20-F

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 20-F

(Mark One)

¨ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) or (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

x ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2012

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

¨ SHELL COMPANY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report                 

For the transition period from              to            

Commission file number 1-12874

TEEKAY CORPORATION

(Exact name of Registrant as specified in its charter)

Republic of The Marshall Islands

(Jurisdiction of incorporation or organization)

Not Applicable

(Translation of Registrant’s name into English)

4^th Floor, Belvedere Building, 69 Pitts Bay Road, Hamilton, HM 08, Bermuda

Telephone: (441) 298-2530

(Address and telephone number of principal executive offices)

Mark Cave

4^th Floor, Belvedere Building, 69 Pitts Bay Road, Hamilton, HM 08, Bermuda

Telephone: (441) 298-2530

Fax: (441) 292-3931

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered, or to be registered, pursuant to Section 12(b) of the Act.

Title of each class	Name of each exchange on which registered
Common Stock, par value of $0.001 per share	New York Stock Exchange

Securities registered, or to be registered, pursuant to Section 12(g) of the Act.

None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.

None

Indicate the number of outstanding shares of each issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

69,704,188 shares of Common Stock, par value of $0.001 per share.

Indicate by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes     x No    ¨

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

Yes     ¨ No    x

Indicate by check mark if the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes     x No    ¨

Indicate by check mark if the registrant (1) has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes     x No    ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer     x Accelerated Filer     ¨ Non-Accelerated Filer    ¨

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP     x International Financial Reporting Standards as issued by the International Accounting Standards Board    ¨ Other    ¨

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow:

Item 17     ¨ Item 18     ¨

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes     ¨ No     x

TEEKAY CORPORATION

INDEX TO REPORT ON FORM 20-F

INDEX

	PAGE
PART I
Item 1. Identity of Directors, Senior Management and Advisors		7
Item 2. Offer Statistics and Expected Timetable		7
Item 3. Key Information		7
Selected Financial Data		7
Risk Factors		10
Tax Risks		19
Item 4. Information on the Company		19
A. Overview, History and Development		19
B. Operations		22
Our Fleet		25
Safety, Management of Ship Operations and Administration		26
Risk of Loss, Insurance and Risk Management		27
Operations Outside of the United States		27
Customers		27
Flag, Classification, Audits and Inspections		28
Regulations		28
C. Organizational Structure		31
D. Properties		33
E. Taxation of the Company		33
1. United States Taxation		33
2. Marshall Islands Taxation		34
3. Other Taxation		34
Item 4A. Unresolved Staff Comments		34
Item 5. Operating and Financial Review and Prospects		34
Overview		34
Significant Developments in 2012 and 2013		35
Other Significant Projects and Developments		36
Important Financial and Operational Terms and Concepts		37
Items You Should Consider When Evaluating Our Results		38
Results of Operations		38
Liquidity and Capital Resources		57
Commitments and Contingencies		59
Off-Balance Sheet Arrangements		60
Critical Accounting Estimates		60
Item 6. Directors, Senior Management and Employees		63
Directors and Senior Management		63
Compensation of Directors and Senior Management		65
Options to Purchase Securities from Registrant or Subsidiaries		66

Board Practices	66
Crewing and Staff	67
Share Ownership	67
Item 7. Major Shareholders and Certain Relationships and Related Party Transactions	68
Major Shareholders	68
Other Major Shareholder	68
Our Directors and Executive Officers	68
Relationships with Our Public Company Subsidiaries	69
Item 8. Financial Information	71
Item 9. The Offer and Listing	72
Item 10. Additional Information	72
Memorandum and Articles of Association	72
Material Contracts	72
Exchange Controls and Other Limitations Affecting Security Holders	73
Taxation	73
Material U.S. Federal Income Tax Considerations	73
Non-United States Tax Considerations	77
Documents on Display	77
Item 11. Quantitative and Qualitative Disclosures About Market Risk	77
Item 12. Description of Securities Other than Equity Securities	79
PART II.
Item 13. Defaults, Dividend Arrearages and Delinquencies	79
Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds	79
Item 15. Controls and Procedures	80
Management’s Report on Internal Control over Financial Reporting	80
Item 16A. Audit Committee Financial Expert	80
Item 16B. Code of Ethics	80
Item 16C. Principal Accountant Fees and Services	81
Item 16D. Exemptions from the Listing Standards for Audit Committees	81
Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers	81
Item 16F. Change in Registrant’s Certifying Accountant	81
Item 16G. Corporate Governance	81
Item 16H. Mine Safety Disclosure	81
PART III.
Item 17. Financial Statements	82
Item 18. Financial Statements	82
Item 19. Exhibits	82
Signature	84

PART I

This annual report of Teekay Corporation on Form 20-F for the year ended December 31, 2012 (or Annual Report) should be read in conjunction with the consolidated financial statements and accompanying notes included in this report.

Unless otherwise indicated, references in this Annual Report to “Teekay,” “the Company,” “we,” “us” and “our” and similar terms refer to Teekay Corporation and its subsidiaries.

In addition to historical information, this Annual Report contains forward-looking statements that involve risks and uncertainties. Such forward-looking statements relate to future events and our operations, objectives, expectations, performance, financial condition and intentions. When used in this Annual Report, the words “expect,” “intend,” “plan,” “believe,” “anticipate,” “estimate” and variations of such words and similar expressions are intended to identify forward-looking statements. Forward-looking statements in this Annual Report include, in particular, statements regarding:

• our future financial condition or results of operations and future revenues and expenses;

• tanker market conditions and fundamentals, including the balance of supply and demand in these markets and spot tanker charter rates and oil production;

• offshore, liquefied natural gas (or LNG) and liquefied petroleum gas (or LPG) market conditions and fundamentals, including the balance of supply and demand in these markets;

• our future growth prospects;

• future capital expenditure commitments and the financing requirements for such commitments;

• expected costs and delivery dates of and financing for newbuildings, and the commencement of service of newbuildings under long-term time-charter contracts;

• the completion of the acquisition of the Voyageur Spirit floating, production, storage and offloading (or FPSO) unit;

• our acquisition of a HiLoad Dynamic Positioning unit and our entry into a related agreement with Remora AS;

• conversion of the Navion Clipper into an FSO unit for charter to Salamander Energy plc;

• the impact on operating income, the expected repair and insurance coverage, the completion, cost and recovery of certain capital upgrade costs, and the expected return to operations of the Petrojarl Banff FPSO unit, following storm damage to the unit which was incurred in December 2011;

• the expected timing and costs of upgrades to any vessels;

• the future valuation of goodwill;

• our expectations as to any impairment of our vessels;

• the adequacy of restricted cash deposits to fund capital lease obligations;

• the expected timing, amount and method of financing for the purchase of five of our leased Suezmax tankers;

• our ability to fulfill our debt obligations;

• compliance with financing agreements and the expected effect of restrictive covenants in such agreements;

• declining market vessel values and the effect on our liquidity;

• operating expenses, availability of crew and crewing costs, number of off-hire days, dry-docking requirements and durations and the adequacy and cost of insurance;

• the effectiveness of our risk management policies and procedures and the ability of the counterparties to our derivative contracts to fulfill their contractual obligations;

• our ability to maximize the use of our vessels, including the re-deployment or disposition of vessels no longer under long-term contracts;

• the cost of, and our ability to comply with, governmental regulations and maritime self-regulatory organization standards applicable to our business;

• the impact of future regulatory changes or environmental liabilities;

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• taxation of our company and of distributions to our stockholders;

• the expected lifespan of our vessels;

• the expected impact of heightened environmental and quality concerns of insurance underwriters, regulators and charterers;

• the adequacy of our insurance coverage for accident-related risks, environmental damage and pollution;

• anticipated funds for liquidity needs and the sufficiency of cash flows;

• our hedging activities relating to foreign currency exchange and interest rate risks;

• the condition of financial and economic markets, including interest rate volatility and the availability and cost of capital;

• the growth of global oil demand;

• our exemption from tax on our U.S. source international transportation income;

• our expectation regarding uncertain tax positions, including our UK tax leases;

• the expected return on our investment in first-priority ship mortgage loans;

• the expected recoverability of our investment in terms loans which are collateralized by first-priority mortgages on three Very Large Crude Carriers (or VLCC);

• our ability to competitively pursue new projects;

• our competitive positions in our markets;

• our ability to avoid labor disruptions and attract and retain highly skilled personnel;

• our involvement in any EU anti-trust investigation of container line operators;

• our expectation regarding our vessels’ ability to perform to specifications and maintain their hire rates;

• our business strategy and other plans and objectives for future operations; and

• our ability to pay dividends on our common stock.

Forward-looking statements involve known and unknown risks and are based upon a number of assumptions and estimates that are inherently subject to significant uncertainties and contingencies, many of which are beyond our control. Actual results may differ materially from those expressed or implied by such forward-looking statements. Important factors that could cause actual results to differ materially include, but are not limited to, those factors discussed below in “Item 3. Key Information—Risk Factors” and other factors detailed from time to time in other reports we file with the U.S. Securities and Exchange Commission (or SEC).

We do not intend to revise any forward-looking statements in order to reflect any change in our expectations or events or circumstances that may subsequently arise. You should carefully review and consider the various disclosures included in this Annual Report and in our other filings made with the SEC that attempt to advise interested parties of the risks and factors that may affect our business, prospects and results of operations.

Item 1. Identity of Directors, Senior Management and Advisors

Not applicable.

Item 2. Offer Statistics and Expected Timetable

Not applicable.

Item 3. Key Information

Selected Financial Data

Set forth below is selected consolidated financial and other data of Teekay for fiscal years 2008 through 2012, which have been derived from our consolidated financial statements. The data below should be read in conjunction with the consolidated financial statements and the notes thereto and the Reports of Independent Registered Public Accounting Firms therein with respect to fiscal years 2012, 2011, and 2010 (which are included herein) and “Item 5. Operating and Financial Review and Prospects.”

Our consolidated financial statements are prepared in accordance with United States generally accepted accounting principles (or GAAP).

7

	Years Ended December 31,
	2008			2009			2010			2011			2012
										(8)
	(in thousands of U.S. Dollars, except share, per share, and fleet data)
Income Statement Data:
Revenues	$	3,229,443		$	2,181,605		$	2,095,753		$	1,953,782		$	1,956,235
Total operating expenses (1)		(2,969,324	)		(2,011,817	)		(1,861,630	)		(1,845,370	)		(2,106,628	)
Income (loss) from vessel operations		260,119			169,788			234,123			108,412			(150,393	)
Interest expense		(290,933	)		(141,448	)		(136,107	)		(137,604	)		(167,615	)
Interest income		97,111			19,999			12,999			10,078			6,159
Realized and unrealized (loss) gain on non-designated derivative instruments		(567,074	)		140,046			(299,598	)		(342,722	)		(80,352	)
Equity (loss) income from joint ventures		(36,085	)		52,242			(11,257	)		(35,309	)		79,211
Foreign exchange gain (loss)		24,727			(20,922	)		31,983			12,654			(12,898	)
Other (loss) income		(3,935	)		12,961			(5,118	)		12,360			366
Income tax recovery (expense)		56,176			(22,889	)		6,340			(4,290	)		14,406
Net (loss) income		(459,894	)		209,777			(166,635	)		(376,421	)		(311,116	)
Less: Net (income) loss attributable to non-controlling interests		(9,561	)		(81,365	)		(100,652	)		17,805			150,936
Net (loss) income attributable to stockholders of Teekay Corporation (2)		(469,455	)		128,412			(267,287	)		(358,616	)		(160,180	)
Per Common Share Data:
Basic (loss) earnings attributable to stockholders of Teekay Corporation		(6.48	)		1.77			(3.67	)		(5.11	)		(2.31	)
Diluted (loss) earnings attributable to stockholders of Teekay Corporation		(6.48	)		1.76			(3.67	)		(5.11	)		(2.31	)
Cash dividends declared		1.1413			1.2650			1.2650			1.2650			1.2650
Balance Sheet Data (at end of year):
Cash and cash equivalents	$	814,165		$	422,510		$	779,748		$	692,127		$	639,491
Restricted cash		650,556			615,311			576,271			500,154			533,819
Vessels and equipment		7,267,094			6,835,597			6,771,375			7,890,761			7,321,058
Net investments in direct financing leases		79,508			512,412			487,516			459,908			436,601
Total assets		10,215,001			9,517,432			9,912,348			11,137,677			11,002,025
Total debt (including capital lease obligations)		5,770,133			5,203,441			5,170,198			6,091,420			6,197,288
Capital stock and additional paid-in capital		642,911			656,193			672,684			660,917			681,933
Non-controlling interest		583,938			855,580			1,353,561			1,863,798			1,876,085
Total equity		2,652,405			3,095,670			3,332,008			3,303,794			3,191,474
Number of outstanding shares of common stock		72,512,291			72,694,345			72,012,843			68,732,341			69,704,188
Other Financial Data:
Net revenues (3)	$	2,471,055		$	1,887,514		$	1,850,656		$	1,777,168		$	1,817,952
EBITDA (4)		96,554			791,291			390,838			184,003			291,832
Adjusted EBITDA (4)		892,616			563,217			696,876			638,161			768,766
Total debt to total capitalization(5)		68.5	%		62.7	%		60.8	%		64.9	%		66.0	%
Net debt to total net capitalization (6)		61.9	%		57.4	%		53.4	%		59.8	%		61.2	%
Capital expenditures:
Vessel and equipment purchases (7)	$	716,765		$	495,214		$	343,091		$	755,045		$	523,597

(1) Total operating expenses include, among other things, the following:

	Years Ended December 31,
	2008			2009			2010			2011			2012
										(8)
	(in thousands)
Asset impairments and net gain (loss) on sale of vessels and equipment	$	50,267		($	12,629	)	($	49,150	)	($	151,059	)	($	441,057	)
Unrealized (losses) gains on derivative instruments		(8,325	)		14,915			(4,875	)		(791	)		(660	)
Restructuring charges		(15,629	)		(14,444	)		(16,396	)		(5,490	)		(7,565	)
Goodwill impairment charge		(334,165	)		—			—			(36,652	)		—
Bargain purchase gain		—			—			—			68,535			—
	$	(307,852	)	$	(12,158	)	$	(70,421	)	$	(125,457	)	$	(449,282	)

8

(2) In January 2009, we adopted an amendment to Financial Accounting Standards Board (or FASB) Accounting Standards Codification (or ASC) 810, Consolidations, which requires us to include the portion of net income (loss) that is attributable to the non-controlling interest as part of our total net income (loss).

(3) Consistent with general practice in the shipping industry, we use net revenues (defined as revenues less voyage expenses) as a measure of equating revenues generated from voyage charters to revenues generated from time-charters, which assists us in making operating decisions about the deployment of our vessels and their performance. Under time-charters the charterer pays the voyage expenses, which are all expenses unique to a particular voyage, including any bunker fuel expenses, port fees, cargo loading and unloading expenses, canal tolls, agency fees and commissions, whereas under voyage-charter contracts the ship-owner pays these expenses. Some voyage expenses are fixed, and the remainder can be estimated. If we, as the ship-owner, pay the voyage expenses, we typically pass the approximate amount of these expenses on to our customers by charging higher rates under the contract or billing the expenses to them. As a result, although revenues from different types of contracts may vary, the net revenues after subtracting voyage expenses, which we call “net revenues,” are comparable across the different types of contracts. We principally use net revenues, a non-GAAP financial measure, because it provides more meaningful information to us than revenues, the most directly comparable GAAP financial measure. Net revenues are also widely used by investors and analysts in the shipping industry for comparing financial performance between companies and to industry averages. The following table reconciles net revenues with revenues.

	Year Ended December 31,
	2008			2009			2010			2011			2012
	(in thousands of U.S. Dollars)
Revenues	$	3,229,443		$	2,181,605		$	2,095,753		$	1,953,782		$	1,956,235
Voyage expenses	($	758,388	)	($	294,091	)	($	245,097	)	($	176,614	)	($	138,283	)
Net revenues	$	2,471,055		$	1,887,514		$	1,850,656		$	1,777,168		$	1,817,952

(4) EBITDA represents earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA represents EBITDA before restructuring charges, unrealized foreign exchange (gain) loss, asset impairments and net (gain) loss on sale of vessels and equipment, goodwill impairment charge, bargain purchase gain, amortization of in-process revenue contracts, unrealized (gains) losses on derivative instruments, realized losses (gains) on interest rate swaps, realized losses on interest rate swap amendments and terminations, and share of unrealized losses (gains) on interest rate swaps in non-consolidated joint ventures. EBITDA and Adjusted EBITDA are used as supplemental financial measures by management and by external users of our financial statements, such as investors, as discussed below.

• Financial and operating performance. EBITDA and Adjusted EBITDA assist our management and security holders by increasing the comparability of our fundamental performance from period to period and against the fundamental performance of other companies in our industry that provide EBITDA or Adjusted EBITDA-based information. This increased comparability is achieved by excluding the potentially disparate effects between periods or companies of interest expense, taxes, depreciation or amortization (or other items in determining Adjusted EBITDA), which items are affected by various and possibly changing financing methods, capital structure and historical cost basis and which items may significantly affect net income between periods. We believe that including EBITDA and Adjusted EBITDA as a financial and operating measure benefits security holders in (a) selecting between investing in us and other investment alternatives and (b) monitoring our ongoing financial and operational strength and health in assessing whether to continue to hold our equity, or debt securities, as applicable.

• Liquidity. EBITDA and Adjusted EBITDA allow us to assess the ability of assets to generate cash sufficient to service debt, pay dividends and undertake capital expenditures. By eliminating the cash flow effect resulting from our existing capitalization and other items such as dry-docking expenditures, working capital changes and foreign currency exchange gains and losses (which may vary significantly from period to period), EBITDA and Adjusted EBITDA provide a consistent measure of our ability to generate cash over the long term. Management uses this information as a significant factor in determining (a) our proper capitalization (including assessing how much debt to incur and whether changes to the capitalization should be made) and (b) whether to undertake material capital expenditures and how to finance them, all in light of our dividend policy. Use of EBITDA and Adjusted EBITDA as liquidity measures also permits security holders to assess the fundamental ability of our business to generate cash sufficient to meet cash needs, including dividends on shares of our common stock and repayments under debt instruments.

Neither EBITDA nor Adjusted EBITDA should be considered as an alternative to net income, operating income, cash flow from operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. EBITDA and Adjusted EBITDA exclude some, but not all, items that affect net income and operating income, and these measures may vary among other companies. Therefore, EBITDA and Adjusted EBITDA as presented below may not be comparable to similarly titled measures of other companies.

The following table reconciles our historical consolidated EBITDA and Adjusted EBITDA to net income (loss), and our historical consolidated Adjusted EBITDA to net operating cash flow.

	Year Ended December 31,
	2008			2009		2010			2011			2012
									(8)
	(in thousands of U.S. Dollars)
Income Statement Data:
Reconciliation of EBITDA and Adjusted EBITDA to Net income (Loss)
Net (loss) income	$	(459,894	)	$	209,777	$	(166,635	)	$	(376,421	)	$	(311,116	)
Income tax (recovery) expense		(56,176	)		22,889		(6,340	)		4,290			(14,406	)
Depreciation and amortization		418,802			437,176		440,705			428,608			455,898
Interest expense, net of interest income		193,822			121,449		123,108			127,526			161,456

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EBITDA	96,554		791,291		390,838		184,003		291,832
Restructuring charges	15,629		14,444		16,396		5,490		7,565
Foreign exchange (gain) loss	(24,727	)	20,922		(31,983	)	(12,654	)	12,898
Asset impairments and net (gain) loss on sale of vessels and equipment	(50,267	)	12,629		49,150		151,059		441,057
Goodwill impairment charge	334,165		—		—		36,652		—
Bargain purchase gain	—		—		—		(68,535	)	—
Amortization of in-process revenue contracts	(74,425	)	(75,977	)	(48,254	)	(46,436	)	(72,933	)
Unrealized losses (gains) on derivative instruments	530,283		(293,174	)	140,187		70,822		(29,658	)
Realized losses on interest rate swaps	32,445		127,936		154,098		132,931		123,277
Realized losses on interest rate swap amendments and terminations	—		—		—		149,666		—
Unrealized losses (gains) on interest rate swaps in non-consolidated joint ventures	32,959		(34,854	)	26,444		35,163		(5,272	)
Adjusted EBITDA	892,616		563,217		696,876		638,161		768,766
Reconciliation of Adjusted EBITDA to net operating cash flow
Net operating cash flow	523,641		368,251		411,750		107,193		288,936
Expenditures for drydocking	101,511		78,005		57,483		55,620		35,023
Interest expense, net of interest income	193,822		121,449		123,108		127,526		161,456
Change in non-cash working capital items related to operating activities	28,816		(148,655	)	(45,415	)	84,347		115,209
Write-down and gain on sale of marketable securities	(15,581	)	—		1,805		3,372		(2,560	)
Write-down of equity accounted investments	—		—		—		(19,411	)	(1,767	)
Loss on notes repurchase	(1,310	)	(566	)	(12,645	)	—		—
Equity (loss) income, net of dividends received	(30,352	)	49,299		(11,257	)	(31,376	)	65,639
Other income (loss)	25,153		(837	)	(9,627	)	3,902		(9,347	)
Employee stock option compensation	(14,117	)	(11,255	)	(15,264	)	(16,262	)	(9,393	)
Restructuring charges	15,629		14,444		16,396		5,490		7,565
Realized losses on interest rate swaps	32,445		127,936		154,098		132,931		123,277
Realized losses on interest rate swap resets and terminations	—		—		—		149,666		—
Unrealized losses (gains) on interest rate swaps in non-consolidated joint ventures	32,959		(34,854	)	26,444		35,163		(5,272	)
Adjusted EBITDA	892,616		563,217		696,876		638,161		768,766

(5) Total capitalization represents total debt and total equity.

(6) Net debt represents total debt less cash, cash equivalents and restricted cash. Total net capitalization represents net debt and total equity.

(7) Excludes vessels purchased in connection with our acquisitions of the remaining 35% of Teekay Petrojarl ASA (or Teekay Petrojarl) in 2008, our acquisition of FPSO units and Investment in Sevan Marine ASA (or Sevan) in 2011 and 2012, and our acquisition of LNG carriers through our 52% interest in the Teekay LNG – Marubeni Joint Venture. Please read “Item 5. Operating and Financial Review and Prospects.” The expenditures for vessels and equipment exclude non-cash investing activities. Please read “Item 18. Financial Statements: Note 17 Supplemental Cash Flow Information.”

(8) Bargain purchase gain and net loss have been restated for the finalization of the Sevan purchase price allocation. Please read “Item 18. Financial Statements: Note 3a Acquisitions – FPSO Units and Investments in Sevan Marine ASA.”

Risk Factors

Changes in the oil and natural gas markets could result in decreased demand for our vessels and services.

Demand for our vessels and services in transporting, production and storage of oil, petroleum products, LNG and LPG depend upon world and regional oil, petroleum and natural gas markets. Any decrease in shipments of oil, petroleum products, LNG or LPG in those markets could have a material adverse effect on our business, financial condition and results of operations. Historically, those markets have been volatile as a result of the many conditions and events that affect the price, production and transport of oil, petroleum products, LNG or LPG, and competition from alternative energy sources. A slowdown of the U.S. and world economies may result in reduced consumption of oil, petroleum products and natural gas and decreased demand for our vessels and services, which would reduce vessel earnings.

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The cyclical nature of the tanker industry may lead to volatile changes in charter rates and significant fluctuations in the utilization of our vessels, which may adversely affect our earnings and profitability.

Historically, the tanker industry has been cyclical, experiencing volatility in profitability due to changes in the supply of and demand for tanker capacity and changes in the supply of and demand for oil and oil products. The cyclical nature of the tanker industry may cause significant increases or decreases in the revenue we earn from our vessels and may also cause significant increases or decreases in the value of our vessels. If the tanker market is depressed, our earnings may decrease, particularly with respect to our spot tanker sub-segment, a subset of our conventional tanker segment, which accounted for approximately 7% and 9% of our net revenues during 2012 and 2011, respectively. The spot-charter market is highly volatile and fluctuates based upon tanker and oil supply and demand, and declining spot rates in a given period generally will result in corresponding declines in operating results for that period. The successful operation of our vessels in the spot-charter market depends upon, among other things, obtaining profitable spot charters and minimizing, to the extent possible, time spent waiting for charters and time spent traveling unladen to pick up cargo. Future spot rates may not be sufficient to enable our vessels trading in the spot tanker market to operate profitably or to provide sufficient cash flow to service our debt obligations. The factors affecting the supply of and demand for tankers are outside of our control, and the nature, timing and degree of changes in industry conditions are unpredictable.

Factors that influence demand for tanker capacity include:

• demand for oil and oil products;

• supply of oil and oil products;

• regional availability of refining capacity;

• global and regional economic and political conditions;

• the distance oil and oil products are to be moved by sea; and

• changes in seaborne and other transportation patterns.

Factors that influence the supply of tanker capacity include:

• the number of newbuilding deliveries;

• the scrapping rate of older vessels;

• conversion of tankers to other uses;

• the number of vessels that are out of service; and

• environmental concerns and regulations.

Changes in demand for transportation of oil over longer distances and in the supply of tankers to carry that oil may materially affect our revenues, profitability and cash flows.

Reduction in oil produced from offshore oil fields could harm our shuttle tanker and FPSO businesses.

As at December 31, 2012, we had 34 vessels operating in our shuttle tanker fleet and seven FPSO units operating in our FPSO fleet. A majority of our shuttle tankers and all of our FPSO units earn revenue that depends upon the volume of oil we transport or the volume of oil produced from offshore oil fields. Oil production levels are affected by several factors, all of which are beyond our control, including:

• geologic factors, including general declines in production that occur naturally over time;

• the rate of technical developments in extracting oil and related infrastructure and implementation costs; and

• operator decisions based on revenue compared to costs from continued operations.

Factors that may affect an operator’s decision to initiate or continue production include: changes in oil prices; capital budget limitations; the availability of necessary drilling and other governmental permits; the availability of qualified personnel and equipment; the quality of drilling prospects in the area; and regulatory changes. In addition, the volume of oil we transport may be adversely affected by extended repairs to oil field installations or suspensions of field operations as a result of oil spills, operational difficulties, strikes, employee lockouts or other labor unrest. The rate of oil production at fields we service may decline from existing or future levels, and may be terminated, all of which could harm our business and operating results. In addition, if such a reduction or termination occurs, the spot tanker market rates, if any, in the conventional oil tanker trades at which we may be able to redeploy the affected shuttle tankers may be lower than the rates previously earned by the vessels under contracts of affreightment, which would also harm our business and operating results.

The redeployment risk of FPSO units is high given their lack of alternative uses and significant costs.

FPSO units are specialized vessels that have very limited alternative uses and high fixed costs. In addition, FPSO units typically require substantial capital investments prior to being redeployed to a new field and production service agreement. Unless extended, certain of our FPSO production service agreements will expire during the next seven years. Our clients may also terminate certain of our FPSO production service agreements prior to their expiration under specified circumstances. Any idle time prior to the commencement of a new contract or our inability to redeploy the vessels at acceptable rates may have an adverse effect on our business and operating results.

The duration of many of our shuttle tanker and FSO contracts is the life of the relevant oil field or is subject to extension by the field operator or vessel charterer. If the oil field no longer produces oil or is abandoned or the contract term is not extended, we will no longer generate revenue under the related contract and will need to seek to redeploy affected vessels.

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Some of our shuttle tanker contracts have a “life-of-field” duration, which means that the contract continues until oil production at the field ceases. If production terminates for any reason, we no longer will generate revenue under the related contract. Other shuttle tanker and floating storage and off-take (or FSO) contracts under which our vessels operate are subject to extensions beyond their initial term. The likelihood of these contracts being extended may be negatively affected by reductions in oil field reserves, low oil prices generally or other factors. If we are unable to promptly redeploy any affected vessels at rates at least equal to those under the contracts, if at all, our operating results will be harmed. Any potential redeployment may not be under long-term contracts, which may affect the stability of our business and operating results.

Charter rates for conventional oil and product tankers may fluctuate substantially over time and may be lower when we are attempting to re-charter conventional oil or product tankers, which could adversely affect our operating results. Any changes in charter rates for LNG or LPG carriers, shuttle tankers or FSO or FPSO units could also adversely affect redeployment opportunities for those vessels.

Our ability to re-charter our conventional oil and product tankers following expiration of existing time-charter contracts and the rates payable upon any renewal or replacement charters will depend upon, among other things, the state of the conventional tanker market. Conventional oil and product tanker trades are highly competitive and have experienced significant fluctuations in charter rates based on, among other things, oil, refined petroleum product and vessel demand. For example, an oversupply of conventional oil tankers can significantly reduce their charter rates. There also exists some volatility in charter rates for LNG and LPG carriers, shuttle tankers and FSO and FPSO units, which could also adversely affect redeployment opportunities for those vessels.

Over time, the value of our vessels may decline, which could adversely affect our operating results.

Vessel values for oil and product tankers, LNG and LPG carriers and FPSO and FSO units can fluctuate substantially over time due to a number of different factors. Vessel values may decline from existing levels. If operation of a vessel is not profitable, or if we cannot re-deploy a chartered vessel at attractive rates upon charter termination, rather than continue to incur costs to maintain and finance the vessel, we may seek to dispose of it. Our inability to dispose of the vessel at a fair market value could result in a loss on its sale and adversely affect our results of operations and financial condition. Further, if we determine at any time that a vessel’s future useful life and earnings require us to impair its value on our financial statements, we may need to recognize a significant charge against our earnings. Vessel values, particularly of tankers, have declined over the past few years, and have contributed to charges against our earnings.

Our growth depends on continued growth in demand for LNG and LPG, and LNG and LPG shipping, as well as offshore oil transportation, production, processing and storage services.

A significant portion of our growth strategy focuses on continued expansion in the LNG and LPG shipping sectors and on expansion in the FPSO, shuttle tanker, and FSO sectors.

Expansion of the LNG and LPG shipping sectors depends on continued growth in world and regional demand for LNG and LPG and LNG and LPG shipping and the supply of LNG and LPG. Demand for LNG and LPG and LNG and LPG shipping could be negatively affected by a number of factors, such as increases in the costs of natural gas derived from LNG relative to the cost of natural gas generally, increases in the production of natural gas in areas linked by pipelines to consuming areas, increases in the price of LNG and LPG relative to other energy sources, the availability of new energy sources, and negative global or regional economic or political conditions. Reduced demand for LNG or LPG and LNG or LPG shipping would have a material adverse effect on future growth of our liquefied gas segment, and could harm that segment’s results. Growth of the LNG and LPG markets may be limited by infrastructure constraints and community and environmental group resistance to new LNG and LPG infrastructure over concerns about the environment, safety and terrorism. If the LNG or LPG supply chain is disrupted or does not continue to grow, or if a significant LNG or LPG explosion, spill or similar incident occurs, it could have a material adverse effect on growth and could harm our business, results of operations and financial condition.

Expansion of the FPSO, shuttle tanker, and FSO sectors depends on continued growth in world and regional demand for these offshore services, which could be negatively affected by a number of factors, such as:

• decreases in the actual or projected price of oil, which could lead to a reduction in or termination of production of oil at certain fields we service or a reduction in exploration for or development of new offshore oil fields;

• increases in the production of oil in areas linked by pipelines to consuming areas, the extension of existing, or the development of new, pipeline systems in markets we may serve, or the conversion of existing non-oil pipelines to oil pipelines in those markets;

• decreases in the consumption of oil due to increases in its price relative to other energy sources, other factors making consumption of oil less attractive or energy conservation measures;

• availability of new, alternative energy sources; and

• negative global or regional economic or political conditions, particularly in oil consuming regions, which could reduce energy consumption or its growth.

Reduced demand for offshore marine transportation, production, processing or storage services would have a material adverse effect on our future growth and could harm our business, results of operations and financial condition.

The intense competition in our markets may lead to reduced profitability or expansion opportunities.

Our vessels operate in highly competitive markets. Competition arises primarily from other vessel owners, including major oil companies and independent companies. We also compete with owners of other size vessels. Our market share is insufficient to enforce any degree of pricing discipline in the markets in which we operate and our competitive position may erode in the future. Any new markets that we enter could include participants that have greater financial strength and capital resources than we have. We may not be successful in entering new markets.

One of our objectives is to enter into additional long-term, fixed-rate time charters for our LNG and LPG carriers, shuttle tankers, FPSO and FSO units. The process of obtaining new long-term time charters is highly competitive and generally involves an intensive screening process and competitive bids, and often extends for several months. We expect substantial competition for providing services for potential LNG, LPG, FPSO,

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shuttle tanker and FSO projects from a number of experienced companies, including state-sponsored entities and major energy companies. Some of these competitors have greater experience in these markets and greater financial resources than do we. We anticipate that an increasing number of marine transportation companies, including many with strong reputations and extensive resources and experience, will enter the LNG and LPG transportation, shuttle tanker, FSO and FPSO sectors. This increased competition may cause greater price competition for time-charters. As a result of these factors, we may be unable to expand our relationships with existing customers or to obtain new customers on a profitable basis, if at all, which would have a material adverse effect on our business, results of operations and financial condition.

The loss of any key customer or its inability to pay for our services could result in a significant loss of revenue in a given period.

We have derived, and believe that we will continue to derive, a significant portion of our revenues from a limited number of customers. Three customers, international oil companies, accounted for an aggregate of 39%, or $760.3 million, of our consolidated revenues during 2012 (2011 – three customers for 36% or $698.9 million, 2010 – three customers for 38% or $778.6 million). The loss of any significant customer or a substantial decline in the amount of services requested by a significant customer, or the inability of a significant customer to pay for our services, could have a material adverse effect on our business, financial condition and results of operations.

Future adverse economic conditions, including disruptions in the global credit markets, could adversely affect our results of operations.

Economic downturns and financial crises in the global markets could produce illiquidity in the capital markets, market volatility, heightened exposure to interest rate and credit risks and reduced access to capital markets. If global financial markets and economic conditions significantly deteriorate in the future, we may face restricted access to the capital markets or bank lending, which may make it more difficult and costly to fund future growth. Decreased access to such resources could have a material adverse effect on our business, financial condition and results of operations.

Our operations are subject to substantial environmental and other regulations, which may significantly increase our expenses.

Our operations are affected by extensive and changing international, national and local environmental protection laws, regulations, treaties and conventions in force in international waters, the jurisdictional waters of the countries in which our vessels operate, as well as the countries of our vessels’ registration, including those governing oil spills, discharges to air and water, and the handling and disposal of hazardous substances and wastes. Many of these requirements are designed to reduce the risk of oil spills and other pollution. In addition, we believe that the heightened environmental, quality and security concerns of insurance underwriters, regulators and charterers will lead to additional regulatory requirements, including enhanced risk assessment and security requirements and greater inspection and safety requirements on vessels. We expect to incur substantial expenses in complying with these laws and regulations, including expenses for vessel modifications and changes in operating procedures.

These requirements can affect the resale value or useful lives of our vessels, require a reduction in cargo capacity, ship modifications or operational changes or restrictions, lead to decreased availability of insurance coverage for environmental matters or result in the denial of access to certain jurisdictional waters or ports, or detention in, certain ports. Under local, national and foreign laws, as well as international treaties and conventions, we could incur material liabilities, including cleanup obligations, in the event that there is a release of petroleum or other hazardous substances from our vessels or otherwise in connection with our operations. We could also become subject to personal injury or property damage claims relating to the release of or exposure to hazardous materials associated with our operations. In addition, failure to comply with applicable laws and regulations may result in administrative and civil penalties, criminal sanctions or the suspension or termination of our operations, including, in certain instances, seizure or detention of our vessels. For further information about regulations affecting our business and related requirements on us, please read “Item 4. Information on the Company—B. Operations—Regulations.”

We may be unable to make or realize expected benefits from acquisitions, and implementing our strategy of growth through acquisitions may harm our financial condition and performance.

A principal component of our strategy is to continue to grow by expanding our business both in the geographic areas and markets where we have historically focused as well as into new geographic areas, market segments and services. We may not be successful in expanding our operations and any expansion may not be profitable. Our strategy of growth through acquisitions involves business risks commonly encountered in acquisitions of companies, including:

• interruption of, or loss of momentum in, the activities of one or more of an acquired company’s businesses and our businesses;

• additional demands on members of our senior management while integrating acquired businesses, which would decrease the time they have to manage our existing business, service existing customers and attract new customers;

• difficulties in integrating the operations, personnel and business culture of acquired companies;

• difficulties of coordinating and managing geographically separate organizations;

• adverse effects on relationships with our existing suppliers and customers, and those of the companies acquired;

• difficulties entering geographic markets or new market segments in which we have no or limited experience; and

• loss of key officers and employees of acquired companies.

Acquisitions may not be profitable to us at the time of their completion and may not generate revenues sufficient to justify our investment. In addition, our acquisition growth strategy exposes us to risks that may harm our results of operations and financial condition, including risks that we may: fail to realize anticipated benefits, such as cost-savings, revenue and cash flow enhancements and earnings accretion; decrease our liquidity by using a significant portion of our available cash or borrowing capacity to finance acquisitions; incur additional indebtedness, which may result in significantly increased interest expense or financial leverage, or issue additional equity securities to finance acquisitions, which may result in significant shareholder dilution; incur or assume unanticipated liabilities, losses or costs associated with the business acquired; or incur other significant charges, such as impairment of goodwill or other intangible assets, asset devaluation or restructuring charges.

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The strain that growth places upon our systems and management resources may harm our business.

Our growth has placed, and we believe it will continue to place, significant demands on our management, operational and financial resources. As we expand our operations, we must effectively manage and monitor operations, control costs and maintain quality and control in geographically dispersed markets. In addition, our three publicly traded subsidiaries have increased our complexity and placed additional demands on our management. Our future growth and financial performance will also depend on our ability to recruit, train, manage and motivate our employees to support our expanded operations and continue to improve our customer support, financial controls and information systems.

These efforts may not be successful and may not occur in a timely or efficient manner. Failure to effectively manage our growth and the system and procedural transitions required by expansion in a cost-effective manner could have a material adverse effect on our business.

Default by the borrower of the term loans in which we have invested could adversely affect our cash flows and financial condition.

We have invested in term loans with a total principal amount outstanding of $185.0 million as of December 31, 2012. We receive quarterly interest payments on the loans, two of the loans outstanding will be due in July 2013 and the remaining loan outstanding will be due in February 2014. The term loans are collateralized by first priority mortgages on two 2010-built and one 2011-built Very Large Crude Carriers (or VLCCs), together with other related security. The borrower on these loans is facing financial difficulty and failed to pay the January 31, 2013 interest payment in full as we received a nominal amount in March 2013. A full recovery of all amounts due under the loan agreements will be dependent upon cash flow generated by the borrower, financial support from the borrower’s ultimate parent company and our ability to realize the value of the primary collateral, the three VLCCs. Failure of the borrower to pay interest or to repay principal under the loans would harm our results of operations and, to the extent we are unable to foreclose on the collateral, financial condition.

Our insurance may not be sufficient to cover losses that may occur to our property or as a result of our operations.

The operation of oil and product tankers, LNG and LPG carriers, and FPSO and FSO units is inherently risky. Although we carry hull and machinery (marine and war risk) and protection and indemnity insurance, all risks may not be adequately insured against, and any particular claim may not be paid. In addition, we do not generally carry insurance on our vessels covering the loss of revenues resulting from vessel off-hire time based on its cost compared to our off-hire experience. Any significant off-hire time of our vessels could harm our business, operating results and financial condition. Any claims relating to our operations covered by insurance would be subject to deductibles, and since it is possible that a large number of claims may be brought, the aggregate amount of these deductibles could be material. Certain of our insurance coverage is maintained through mutual protection and indemnity associations and as a member of such associations we may be required to make additional payments over and above budgeted premiums if member claims exceed association reserves.

We may be unable to procure adequate insurance coverage at commercially reasonable rates in the future. For example, more stringent environmental regulations have led in the past to increased costs for, and in the future may result in the lack of availability of, insurance against risks of environmental damage or pollution. A catastrophic oil spill, marine disaster or natural disasters could result in losses that exceed our insurance coverage, which could harm our business, financial condition and operating results. Any uninsured or underinsured loss could harm our business and financial condition. In addition, our insurance may be voidable by the insurers as a result of certain of our actions, such as our ships failing to maintain certification with applicable maritime self-regulatory organizations.

Changes in the insurance markets attributable to terrorist attacks may also make certain types of insurance more difficult for us to obtain. In addition, the insurance that may be available may be significantly more expensive than our existing coverage.

Past port calls by our vessels, or third-party vessels from which we derived pooling revenues, to countries that are subject to sanctions imposed by the United States and the European Union may impact investors’ decisions to invest in our securities.

The United States government has imposed sanctions on Iran, Syria and Sudan. The European Union (or EU) has also imposed sanctions on trade with Iran. In the past, conventional oil tankers owned or chartered-in by us, or third-party vessels participating in commercial pooling arrangements from which we derive revenue, made limited port calls to those countries for the loading and discharging of oil products. Those port calls did not violate U.S. or EU sanctions and we intend to maintain our compliance with all U.S. and EU sanctions. In addition, we have no future contracted loadings or discharges in any of those countries and intend not to enter into voyage charter contracts for the transport of oil or gas to or from Iran, Syria or Sudan. We believe that our compliance with these sanctions and our lack of any future port calls to those countries does not and will not adversely impact our revenues, because port calls to these countries have never accounted for any material amount of our revenues. However, some investors might decide not to invest in us simply because we have previously called on, or through our participation in pooling arrangements have previously received revenue from calls on, ports in these sanctioned countries. Any such investor reaction could adversely affect the market for our common shares.

Marine transportation is inherently risky, and an incident involving significant loss of or environmental contamination by any of our vessels could harm our reputation and business.

Our vessels and their cargoes are at risk of being damaged or lost because of events such as:

• marine disaster;

• bad weather or natural disasters;

• mechanical failures;

• grounding, fire, explosions and collisions;

• piracy;

• human error; and

• war and terrorism.

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An accident involving any of our vessels could result in any of the following:

• death or injury to persons, loss of property or environmental damage or pollution;

• delays in the delivery of cargo;

• loss of revenues from or termination of charter contracts;

• governmental fines, penalties or restrictions on conducting business;

• higher insurance rates; and

• damage to our reputation and customer relationships generally.

Any of these results could have a material adverse effect on our business, financial condition and operating results.

Our operating results are subject to seasonal fluctuations.

We operate our conventional tankers in markets that have historically exhibited seasonal variations in demand and, therefore, in charter rates. This seasonality may result in quarter-to-quarter volatility in our results of operations. Tanker markets are typically stronger in the winter months as a result of increased oil consumption in the Northern Hemisphere. In addition, unpredictable weather patterns in these months tend to disrupt vessel scheduling, which historically has increased oil price volatility and oil trading activities in the winter months. As a result, our revenues have historically been weaker during the fiscal quarters ended June 30 and September 30, and stronger in our fiscal quarters ended March 31 and December 31.

Due to harsh winter weather conditions, oil field operators in the North Sea typically schedule oil platform and other infrastructure repairs and maintenance during the summer months. Because the North Sea is our primary existing offshore oil market, this seasonal repair and maintenance activity contributes to quarter-to-quarter volatility in our results of operations, as oil production typically is lower in the fiscal quarters ended June 30 and September 30 in this region compared with production in the fiscal quarters ended March 31 and December 31. Because a number of our North Sea shuttle tankers operate under contracts of affreightment, under which revenue is based on the volume of oil transported, the results of our shuttle tanker operations in the North Sea under these contracts generally reflect this seasonal production pattern. When we redeploy affected shuttle tankers as conventional oil tankers while platform maintenance and repairs are conducted, the overall financial results for our North Sea shuttle tanker operations may be negatively affected if the rates in the conventional oil tanker markets are lower than the contract of affreightment rates. In addition, we seek to coordinate some of the general dry docking schedule of our fleet with this seasonality, which may result in lower revenues and increased dry docking expenses during the summer months.

We expend substantial sums during construction of newbuildings and the conversion of tankers to FPSO or FSO units without earning revenue and without assurance that they will be completed.

We are typically required to expend substantial sums as progress payments during construction of a newbuilding or vessel conversion, but we do not derive any revenue from the vessel until after its delivery. In addition, under some of our time charters if our delivery of a vessel to a customer is delayed, we may be required to pay liquidated damages in amounts equal to or, under some charters, almost double the hire rate during the delay. For prolonged delays, the customer may terminate the time charter and, in addition to the resulting loss of revenues, we may be responsible for additional substantial liquidated charges.

Our newbuilding financing commitments typically have been pre-arranged. However, if we were unable to obtain financing required to complete payments on any of our newbuilding orders, we could effectively forfeit all or a portion of the progress payments previously made. As of December 31, 2012, we had on order four shuttle tankers, a 50% interest in one VLCC, one FPSO unit and two LNG carriers. The four shuttle tankers are scheduled for delivery in 2013, the VLCC is scheduled to deliver in 2013, the FPSO is scheduled to deliver in 2014 and the two LNG carriers are scheduled for delivery in 2016. As of December 31, 2012, progress payments made towards these newbuildings, excluding payments made by our joint venture partners, totaled $708.0 million.

In addition, conversion of tankers to FPSO and FSO units expose us to a numbers of risks, including lack of shipyard capacity and the difficulty of completing the conversions in a timely and cost effective manner. During conversion of a vessel, we do not earn revenue from it. In addition, conversion projects may not be successful.

We make substantial capital expenditures to expand the size of our fleet. Depending on whether we finance our expenditures through cash from operations or by issuing debt or equity securities, our financial leverage could increase or our stockholders could be diluted.

We regularly evaluate and pursue opportunities to provide the marine transportation requirements for various projects, and we have recently submitted bids to provide transportation solutions for LNG and LPG, FPSO and FSO projects. We may submit additional bids from time to time. The award process relating to LNG and LPG transportation, FPSO and FSO opportunities typically involves various stages and takes several months to complete. If we bid on and are awarded contracts relating to any LNG and LPG, FPSO and FSO projects, we will need to incur significant capital expenditures to build the related LNG and LPG carriers, FPSO and FSO units.

To fund the remaining portion of existing or future capital expenditures, we will be required to use cash from operations or incur borrowings or raise capital through the sale of debt or additional equity securities. Our ability to obtain bank financing or to access the capital markets for future offerings may be limited by our financial condition at the time of any such financing or offering as well as by adverse market conditions resulting from, among other things, general economic conditions and contingencies and uncertainties that are beyond our control. Our failure to obtain the funds for necessary future capital expenditures could have a material adverse effect on our business, results of operations and financial condition. Even if we are successful in obtaining necessary funds, incurring additional debt may significantly increase our interest expense and financial leverage, which could limit our financial flexibility and ability to pursue other business opportunities. Issuing additional equity securities may result in significant stockholder dilution and would increase the aggregate amount of cash required to pay quarterly dividends.

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Exposure to currency exchange rate and interest rate fluctuations results in fluctuations in our cash flows and operating results.

Substantially all of our revenues are earned in U.S. Dollars, although we are paid in Euros, Australian Dollars, Norwegian Kroner and British Pounds under some of our charters. A portion of our operating costs are incurred in currencies other than U.S. Dollars. This partial mismatch in operating revenues and expenses leads to fluctuations in net income due to changes in the value of the U.S. dollar relative to other currencies, in particular the Norwegian Kroner, the Australian Dollar, the British Pound and the Euro. We also make payments under two Euro-denominated term loans. If the amount of these and other Euro-denominated obligations exceeds our Euro-denominated revenues, we must convert other currencies, primarily the U.S. Dollar, into Euros. An increase in the strength of the Euro relative to the U.S. Dollar would require us to convert more U.S. Dollars to Euros to satisfy those obligations.

Because we report our operating results in U.S. Dollars, changes in the value of the U.S. Dollar relative to other currencies also result in fluctuations of our reported revenues and earnings. Under U.S. accounting guidelines, all foreign currency-denominated monetary assets and liabilities, such as cash and cash equivalents, accounts receivable, restricted cash, accounts payable, long-term debt and capital lease obligations, are revalued and reported based on the prevailing exchange rate at the end of the period. This revaluation historically has caused us to report significant unrealized foreign currency exchange gains or losses each period. The primary source of these gains and losses is our Euro-denominated term loans and our Norwegian Kroner-denominated bonds. We have entered into foreign currency forward contracts to economically hedge portions of our forecasted expenditures denominated in Norwegian Kroner. We also incur interest expense on our Norwegian Kroner-denominated bonds. We have entered into cross-currency swaps to economically hedge the foreign exchange risk on the principal and interest.

Many of our seafaring employees are covered by collective bargaining agreements and the failure to renew those agreements or any future labor agreements may disrupt operations and adversely affect our cash flows.

A significant portion of our seafarers are employed under collective bargaining agreements. We may become subject to additional labor agreements in the future. We may suffer to labor disruptions if relationships deteriorate with the seafarers or the unions that represent them. Our collective bargaining agreements may not prevent labor disruptions, particularly when the agreements are being renegotiated. Salaries are typically renegotiated annually or bi-annually for seafarers and annually for onshore operational staff and may increase our cost of operation. Any labor disruptions could harm our operations and could have a material adverse effect on our business, results of operations and financial condition.

We may be unable to attract and retain qualified, skilled employees or crew necessary to operate our business.

Our success depends in large part on our ability to attract and retain highly skilled and qualified personnel. In crewing our vessels, we require technically skilled employees with specialized training who can perform physically demanding work. Competition to attract and retain qualified crew members is intense. If crew costs increase, and we are not able to increase our rates to customers to compensate for any crew cost increases, our financial condition and results of operations may be adversely affected. Any inability we experience in the future to hire, train and retain a sufficient number of qualified employees could impair our ability to manage, maintain and grow our business.

Terrorist attacks, piracy, increased hostilities or war could lead to further economic instability, increased costs and disruption of business.

Terrorist attacks, piracy and the current conflicts in the Middle East, and other current and future conflicts, may adversely affect our business, operating results, financial condition, and ability to raise capital and future growth. Continuing hostilities in the Middle East may lead to additional armed conflicts or to further acts of terrorism and civil disturbance in the United States or elsewhere, which may contribute to economic instability and disruption of oil production and distribution, which could result in reduced demand for our services.

In addition, oil facilities, shipyards, vessels, pipelines and oil fields could be targets of future terrorist attacks and our vessels could be targets of pirates or hijackers. Any such attacks could lead to, among other things, bodily injury or loss of life, vessel or other property damage, increased vessel operational costs, including insurance costs, and the inability to transport oil to or from certain locations. Terrorist attacks, war, piracy, hijacking or other events beyond our control that adversely affect the distribution, production or transportation of oil to be shipped by us could entitle customers to terminate charters, which would harm our cash flow and business.

Acts of piracy on ocean-going vessels have recently increased in frequency, which could adversely affect our business.

Acts of piracy have historically affected ocean-going vessels trading in regions of the world such as the South China Sea and the Gulf of Aden off the coast of Somalia. In recent years, the frequency and severity of piracy incidents has significantly increased, particularly in the Gulf of Aden and Indian Ocean. If these piracy attacks result in regions in which our vessels are deployed being named on the Joint War Committee Listed Areas, war risk insurance premiums payable for such coverage can increase significantly and such insurance coverage may be more difficult to obtain. In addition, crew costs, including costs which may be incurred to the extent we employ on-board security guards, could increase in such circumstances. We may not be adequately insured to cover losses from these incidents, which could have a material adverse effect on us. In addition, hijacking as a result of an act of piracy against our vessels, or an increase in cost or unavailability of insurance for our vessels, could have a material adverse impact on our business, financial condition and results of operations.

Our substantial operations outside the United States expose us to political, governmental and economic instability, which could harm our operations.

Because our operations are primarily conducted outside of the United States, they may be affected by economic, political and governmental conditions in the countries where we engage in business. Any disruption caused by these factors could harm our business, including by reducing the levels of oil exploration, development and production activities in these areas. We derive some of our revenues from shipping oil and gas from politically and economically unstable regions. Conflicts in these regions have included attacks on ships and other efforts to disrupt shipping. Hostilities, strikes, or other political or economic instability in regions where we operate or where we may operate could have a material adverse effect on the growth of our business, results of operations and financial condition and ability to make cash distributions. In addition, tariffs, trade embargoes and other economic sanctions by the United States or other countries against countries in which we operate or to which we trade harm our business and ability to make cash distributions. Finally, a government could requisition one or more of our vessels, which is most likely during war or national emergency. Any such requisition would cause a loss of the vessel and could harm our cash flow and financial results.

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Maritime claimants could arrest, or port authorities could detain, our vessels, which could interrupt our cash flow.

Crew members, suppliers of goods and services to a vessel, shippers of cargo and other parties may be entitled to a maritime lien against that vessel for unsatisfied debts, claims or damages. In many jurisdictions, a maritime lienholder may enforce its lien by arresting a vessel through foreclosure proceedings. The arrest or attachment of one or more of our vessels could interrupt our cash flow and require us to pay large sums of funds to have the arrest or attachment lifted. In addition, in some jurisdictions, such as South Africa, under the “sister ship” theory of liability, a claimant may arrest both the vessel that is subject to the claimant’s maritime lien and any “associated” vessel, which is any vessel owned or controlled by the same owner. Claimants could try to assert “sister ship” liability against one vessel in our fleet for claims relating to another of our ships. In addition, port authorities may seek to detain our vessels in port, which could adversely affect our operating results or relationships with customers.

Declining market values of our vessels could adversely affect our liquidity and result in breaches of our financing agreements.

Market values of vessels fluctuate depending upon general economic and market conditions affecting relevant markets and industries and competition from other shipping companies and other modes of transportation. In addition, as vessels become older, they generally decline in value. Declining vessel values could adversely affect our liquidity by limiting our ability to raise cash by refinancing vessels. Declining vessel values could also result in a breach of loan covenants and events of default under certain of our credit facilities that require us to maintain certain loan-to-value ratios. If we are unable to pledge additional collateral in the event of a decline in vessel values, the lenders under these facilities could accelerate our debt and foreclose on our vessels pledged as collateral for the loans. As of December 31, 2012, the total outstanding debt under credit facilities with this type of covenant tied to conventional tanker values was $164.8 million and to LNG carrier values was $434.1 million. We have five financing arrangements that require us to maintain vessel value to outstanding loan principal balance ratios ranging from 105% to 115%. At December 31, 2012, we were in compliance with these required ratios.

Climate change and greenhouse gas restrictions may adversely impact our operations and markets.

Due to concern over the risk of climate change, a number of countries have adopted, or are considering the adoption of, regulatory frameworks to reduce greenhouse gas emissions. These regulatory measures include, among others, adoption of cap and trade regimes, carbon taxes, increased efficiency standards, and incentives or mandates for renewable energy. Compliance with changes in laws, regulations and obligations relating to climate change could increase our costs related to operating and maintaining our vessels and require us to install new emission controls, acquire allowances or pay taxes related to our greenhouse gas emissions, or administer and manage a greenhouse gas emissions program. Revenue generation and strategic growth opportunities may also be adversely affected.

Adverse effects upon the oil and gas industry relating to climate change may also adversely affect demand for our services. Although we do not expect that demand for oil and gas will lessen dramatically over the short-term, in the long-term, climate change may reduce the demand for oil and gas or increased regulation of greenhouse gases may create greater incentives for use of alternative energy sources. Any long-term material adverse effect on the oil and gas industry could have a significant financial and operational adverse impact on our business that we cannot predict with certainty at this time.

We have substantial debt levels and may incur additional debt.

As of December 31, 2012, our consolidated debt and capital lease obligations totaled $6.2 billion and we had the capacity to borrow an additional $1.2 billion under our credit facilities. These credit facilities may be used by us for general corporate purposes. Our consolidated debt and capital lease obligations could increase substantially. We will continue to have the ability to incur additional debt, subject to limitations in our credit facilities. Our level of debt could have important consequences to us, including:

• our ability to obtain additional financing, if necessary, for working capital, capital expenditures, acquisitions or other purposes, and our ability to refinance our credit facilities may be impaired or such financing may not be available on favorable terms;

• we will need a substantial portion of our cash flow to make principal and interest payments on our debt, reducing the funds that would otherwise be available for operations, future business opportunities and dividends to stockholders;

• our debt level may make us more vulnerable than our competitors with less debt to competitive pressures or a downturn in our industry or the economy generally; and

• our debt level may limit our flexibility in obtaining additional financing, pursuing other business opportunities and responding to changing business and economic conditions.

Our ability to service our debt will depend on certain financial, business and other factors, many of which are beyond our control.

Our ability to service our debt will depend upon, among other things, our future financial and operating performance, which will be affected by prevailing economic conditions and financial, business, regulatory and other factors, many of which are beyond our control. In addition, we rely on distributions and other intercompany cash flows from our subsidiaries to repay our obligations. Financing arrangements between some of our subsidiaries and their respective lenders contain restrictions on distributions from such subsidiaries.

If we are unable to generate sufficient cash flow to service our debt service requirements, we may be forced to take actions such as:

• restructuring or refinancing our debt;

• seeking additional debt or equity capital;

• seeking bankruptcy protection;

• reducing distributions;

• reducing or delaying our business activities, acquisitions, investments or capital expenditures; or

• selling assets.

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Such measures might not be successful and might not enable us to service our debt. In addition, any such financing, refinancing or sale of assets might not be available on economically favorable terms. In addition, our credit agreements and the indenture governing our debt securities may restrict our ability to implement some of these measures.

Financing agreements containing operating and financial restrictions may restrict our business and financing activities.

The operating and financial restrictions and covenants in our revolving credit facilities, term loans and in any of our future financing agreements could adversely affect our ability to finance future operations or capital needs or to pursue and expand our business activities. For example, these financing arrangements restrict our ability to:

• pay dividends;

• incur or guarantee indebtedness;

• change ownership or structure, including mergers, consolidations, liquidations and dissolutions;

• grant liens on our assets;

• sell, transfer, assign or convey assets;

• make certain investments; and

• enter into a new line of business.

Our ability to comply with covenants and restrictions contained in debt instruments may be affected by events beyond our control, including prevailing economic, financial and industry conditions. If market or other economic conditions deteriorate, we may fail to comply with these covenants. If we breach any of the restrictions, covenants, ratios or tests in the financing agreements, our obligations may become immediately due and payable, and the lenders’ commitment under our credit facilities, if any, to make further loans may terminate. A default under financing agreements could also result in foreclosure on any of our vessels and other assets securing related loans.

Certain of Teekay LNG’s lease arrangements contain provisions whereby it has provided a tax indemnification to third parties, which may result in increased lease payments or termination of favorable lease arrangements.

Teekay LNG and a joint venture partner are the lessee under 30-year capital lease arrangements with a third party for three LNG carriers. Under the terms of these capital lease arrangements, the lessor claims tax depreciation on the capital expenditures it incurred to acquire these vessels. As is typical in these leasing arrangements, tax and change of law risks are assumed by the lessee. The rentals payable under the lease arrangements are predicated on the basis of certain tax and financial assumptions at the commencement of the leases. If an assumption proves to be incorrect or there is a change in the applicable tax legislation or the interpretation thereof by the United Kingdom taxing authority, the lessor is entitled to increase the rentals so as to maintain its agreed after-tax margin. Teekay LNG does not have the ability to pass these increased rentals onto the charter party. However, the terms of the lease arrangements enable Teekay LNG and the joint venture partner jointly to terminate the lease arrangement on a voluntary basis at any time. In the event of an early termination of the lease arrangements, the joint venture may be obliged to pay termination sums to the lessor sufficient to repay its investment in the vessels and to compensate it for the tax effect of the terminations, including recapture of tax depreciation, if any. Although the exact amount of any such payments upon termination would be negotiated between Teekay LNG and the lessor, we expect the amount would be significant.

As described in “Item 18 – Financial Statements: Note 10 – Capital Lease Obligations and Restricted Cash”, the Teekay Nakilat Joint Venture is the lessee under 30-year capital lease arrangements with a third party for the three RasGas II LNG Carriers (or the RasGas II Leases). The UK taxing authority (or HMRC) has been urging the lessor as well as other lessors under capital lease arrangements that have tax benefits similar to the ones provided by the RasGas II Leases, to terminate such finance lease arrangements and has in other circumstances challenged the use of similar structures. As a result, the lessor has requested that the Teekay Nakilat Joint Venture enter into negotiations to terminate the RasGas II Leases. The Teekay Nakilat Joint Venture has declined this request as it does not believe that HRMC would be able to successfully challenge the availability of the tax benefits of these leases to the lessor. This assessment is partially based on a January 2012 court decision, regarding a similar financial lease of an LNG carrier, that ruled in favor of the taxpayer. However, the HMRC is appealing that decision and the appeal is expected to be heard in May 2013. If the HMRC were able to successfully challenge the RasGas II Leases, the Teekay Nakilat Joint Venture could be subject to significant costs associated with the termination of the lease or increased lease payments to compensate the lessor for the lost tax benefits. Teekay LNG estimates its 70% share of the potential exposure to be approximately $29 million, exclusive of potential financing and interest rate swap termination costs.

The Teekay Nakilat Joint Venture has received notification from the lessor of the three vessels of a credit rating downgrade to the bank that was providing the letter of credit (or LC Bank) to Teekay Nakilat Joint Venture’s tax lease. As a result, the lessor has claimed an increase to the lease rentals over the remaining term of the RasGas II Leases and instructed that an estimated $12 million additional amount of cash be placed on deposit by the Teekay Nakilat Joint Venture. The Teekay Nakilat Joint Venture has engaged external legal counsel to assess these claims. Teekay LNG’s 70% share of the present value of the lease rental increase claim is approximately $10 million; however, the final amount is dependent on external legal counsel’s review. The Teekay Nakilat Joint Venture is also looking at other alternatives to mitigate the impact of the downgrade to the LC Bank’s credit rating.

In addition, the subsidiaries of another joint venture formed to service the Tangguh LNG project in Indonesia have entered into lease arrangements with a third party for two LNG carriers. Teekay LNG purchased our interest in this joint venture in 2009. The terms of the lease arrangements provide similar tax and change of law risk assumption by this joint venture as with the three LNG carriers above.

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Our joint venture arrangements impose obligations upon us but limit our control of the joint ventures, which may affect our ability to achieve our joint venture objectives.

For financial or strategic reasons, we conduct a portion of our business through joint ventures. Generally, we are obligated to provide proportionate financial support for the joint ventures although our control of the business entity may be substantially limited. Due to this limited control, we generally have less flexibility to pursue our own objectives through joint ventures than we would with our own subsidiaries. There is no assurance that our joint venture partners will continue their relationships with us in the future or that we will be able to achieve our financial or strategic objectives relating to the joint ventures and the markets in which they operate. In addition, our joint venture partners may have business objectives that are inconsistent with ours, experience financial and other difficulties that may affect the success of the joint venture, or be unable or unwilling to fulfill their obligations under the joint ventures, which may affect our financial condition or results of operations.

Tax Risks

In addition to the following risk factors, you should read “Item 4. Information on the Company—Taxation of the Company” and “Item 10. Additional Information—Material U.S. Federal Income Tax Considerations” and “—Non-United States Tax Consequences” for a more complete discussion of the expected material U.S. federal and non-U.S. income tax considerations relating to us and the ownership and disposition of our common stock.

U.S. tax authorities could treat us as a “passive foreign investment company,” which could have adverse U.S. federal income tax consequences to U.S. holders.

A non-U.S. entity taxed as a corporation for U.S. federal income tax purposes will be treated as a “passive foreign investment company” (or PFIC) for U.S. federal income tax purposes if at least 75% of its gross income for any taxable year consists of certain types of “passive income,” or at least 50% of the average value of the entity’s assets produce or are held for the production of those types of “passive income.” For purposes of these tests, “passive income” includes dividends, interest, and gains from the sale or exchange of investment property and rents and royalties, other than rents and royalties that are received from unrelated parties in connection with the active conduct of a trade or business. By contrast, income derived from the performance of services does not constitute “passive income.”

There are legal uncertainties involved in determining whether the income derived from our time-chartering activities constitutes rental income or income derived from the performance of services, including the decision in Tidewater Inc. v. United States, 565 F.3d 299 (5th Cir. 2009), which held that income derived from certain time-chartering activities should be treated as rental income rather than services income for purposes of a foreign sales corporation provision of the U.S. Internal Revenue Code of 1986, as amended (or the Code). However, the Internal Revenue Service (or IRS) stated in an Action on Decision (AOD 2010-01) that it disagrees with, and will not acquiesce to, the way that the rental versus services framework was applied to the facts in the Tidewater decision, and in its discussion stated that the time charters at issue in Tidewater would be treated as producing services income for PFIC purposes. The IRS’s statement with respect to Tidewater cannot be relied upon or otherwise cited as precedent by taxpayers. Consequently, in the absence of any binding legal authority specifically relating to the statutory provisions governing PFICs, there can be no assurance that the IRS or a court would not follow the Tidewater decision in interpreting the PFIC provisions of the Code. Nevertheless, based on our current assets and operations, we intend to take the position that we are not now and have never been a PFIC. No assurance can be given, however, that the IRS or a court of law, will accept our position, or that we would not constitute a PFIC for any future taxable year if there were to be changes in our assets, income or operations.

If the IRS were to determine that we are or have been a PFIC for any taxable year, U.S. holders of our common stock will face adverse U.S. federal income tax consequences. Under the PFIC rules, unless those U.S. holders make certain elections available under the Code, such holders would be liable to pay tax at ordinary income tax rates plus interest upon certain distributions and upon any gain from the disposition of our common stock, as if such distribution or gain had been recognized ratably over the U.S. holder’s holding period. Please read “Item 10. Additional Information–Material U.S. Federal Income Tax Considerations—United States Federal Income Taxation of U.S. Holders—Consequences of Possible PFIC Classification.”

We may be subject to taxes, which could affect our operating results.

We or our subsidiaries are subject to tax in certain jurisdictions in which we or our subsidiaries are organized, own assets or have operations, which reduces our operating results. In computing our tax obligations in these jurisdictions, we are required to take various tax accounting and reporting positions on matters that are not entirely free from doubt and for which we have not received rulings from the governing authorities. We cannot assure you that upon review of these positions, the applicable authorities will agree with our positions. A successful challenge by a tax authority could result in additional tax imposed on us or our subsidiaries, further reducing our operating results. In addition, changes in our operations or ownership could result in additional tax being imposed on us or on our subsidiaries in jurisdictions in which operations are conducted. For example, changes in the ownership of our stock may cause us to be unable to claim an exemption from U.S. federal income tax under Section 883 of the Code. If we were not exempt from tax under Section 883 of the Code, we will be subject to U.S. federal income tax on shipping income attributable to our subsidiaries’ transportation of cargoes to or from the U.S., the amount of which is not within our complete control. Also, jurisdictions in which we or our subsidiaries are organized, own assets or have operations may change their tax laws, or we may enter into new business transactions relating to such jurisdictions, which could result in increased tax liability and reduce our operating results. Please read “Item 4. Information on the Company—Taxation of the Company.”

Item 4. Information on the Company

A. Overview, History and Development

Overview

We are a leading provider of international crude oil and gas marine transportation services and we also offer offshore oil production, storage and offloading services, primarily under long-term, fixed-rate contracts. Over the past decade, we have undergone a major transformation from being primarily an owner of ships in the cyclical spot tanker business to being a growth-oriented asset manager in the “Marine Midstream” sector. This transformation has included our expansion into the liquefied natural gas (or LNG) and liquefied petroleum gas (or LPG) shipping sectors through our publicly-listed subsidiary Teekay LNG Partners L.P. (NYSE: TGP) (or Teekay LNG), further growth of our operations in the offshore production, storage and transportation sector through our publicly-listed subsidiary Teekay Offshore Partners L.P. (NYSE: TOO) (or Teekay Offshore) and through our 100% ownership interest in Teekay Petrojarl AS, and expansion of our conventional tanker business through our publicly-listed

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subsidiary, Teekay Tankers Ltd. (NYSE: TNK) (or Teekay Tankers). We are responsible for managing and operating consolidated assets of over $11 billion, comprised of approximately 170 liquefied gas, offshore, and conventional tanker assets. With offices in 16 countries and approximately 6,400 seagoing and shore-based employees, Teekay provides a comprehensive set of marine services to the world’s leading oil and gas companies, and its reputation for safety, quality and innovation has earned it a position with its customers as The Marine Midstream Company.

Our shuttle tanker and FSO segment and our FPSO segment include our shuttle tanker operations, floating storage and off-take (or FSO) units, and our floating production, storage and offloading (or FPSO) units, which primarily operate under long-term fixed-rate contracts. As of December 31, 2012, our shuttle tanker fleet, including newbuildings on order, had a total cargo capacity of approximately 4.8 million deadweight tonnes (or dwt ), which represented approximately 40% of the total tonnage of the world shuttle tanker fleet. Please read “—B. Operations—Our Fleet.”

Our liquefied gas segment includes our LNG and LPG carriers. Substantially all of our LNG and LPG carriers are subject to long-term, fixed-rate charter contracts. As of December 31, 2012, this fleet, including newbuildings on order, had a total cargo carrying capacity of approximately 4.6 million cubic meters. Please read “—B. Operations—Our Fleet.”

Our conventional tanker segment includes our conventional crude oil tankers and product carriers. In order to provide investors with additional information about our conventional tanker segment, we have divided this operating segment into the fixed-rate tanker sub-segment and the spot tanker sub-segment.

Our spot tanker sub-segment consists of conventional crude oil tankers and product tankers operating in the spot-tanker market or subject to time-charters or contracts of affreightment that are priced on a spot-market basis or are short-term, fixed-rate contracts. We consider contracts that have an original term of less than one year in duration to be short-term. Our conventional Aframax, Suezmax, and large and medium product tankers are among the vessels included in the spot tanker sub-segment. Our fixed-rate tanker sub-segment includes our conventional crude oil and product tankers on fixed-rate time-charter contracts with an initial duration of at least one year. Please read “—B. Operations—Our Fleet.”

The Teekay organization was founded in 1973. We are incorporated under the laws of the Republic of The Marshall Islands as Teekay Corporation and maintain our principal executive headquarters at 4^th floor, Belvedere Building, 69 Pitts Bay Road, Hamilton, HM 08, Bermuda. Our telephone number at such address is (441) 298-2530. Our principal operating office is located at Suite 2000, Bentall 5, 550 Burrard Street, Vancouver, British Columbia, Canada, V6C 2K2. Our telephone number at such address is (604) 683-3529.

Recent Business Acquisitions

Teekay LNG – Marubeni Joint Venture

In February 2012, a joint venture between our subsidiary Teekay LNG Partners L.P. (or Teekay LNG) and Marubeni Corporation (or Teekay LNG-Marubeni Joint Venture) acquired a 100% interest in six LNG carriers from Denmark-based A.P. Moller-Maersk A/S for approximately $1.3 billion. The Teekay LNG-Marubeni Joint Venture financed this acquisition with $1.06 billion from secured loan facilities and an aggregate of $266 million from equity contributions from Teekay LNG and Marubeni Corporation. Teekay LNG has agreed to guarantee its 52% share of the secured loan facilities of the Teekay LNG-Marubeni Joint Venture and, as a result, deposited $30 million in a restricted cash account as security. Teekay LNG has a 52% economic interest in the Teekay LNG-Marubeni Joint Venture and, consequently, its share of the equity contribution was approximately $138 million. Teekay LNG financed this equity contribution by borrowing under its existing credit facilities.

Exmar LPG Joint Venture

On February 12, 2013, Teekay LNG entered into a joint venture agreement with Belgium-based Exmar NV (or Exmar) to own and charter-in LPG carriers with a primary focus on the mid-size gas carrier segment. The joint venture entity, called Exmar LPG BVBA, took economic effect as of November 1, 2012 and includes 16 owned LPG carriers (including four newbuildings scheduled for delivery in 2014) and five chartered-in LPG carriers. In addition, the joint venture recently ordered another four medium-size gas carrier newbuildings with deliveries scheduled between 2015 and 2016, with options to order up to four additional vessels, which brings the total fleet size of Exmar LPG BVBA to 25 vessels, excluding options. For its 50% ownership interest in the joint venture, including newbuilding payments made prior to the November 1, 2012 economic effective date of the joint venture, Teekay LNG invested approximately $134 million of equity and assumed approximately $108 million of its pro rata share of the existing debt and lease obligations as of the economic effective date, secured by certain vessels in the Exmar LPG BVBA fleet. Exmar will continue to commercially and technically manage and operate the vessels. Since control of Exmar LPG BVBA will be shared jointly between Exmar and Teekay LNG, Teekay LNG expects to account for Exmar LPG BVBA using the equity method.

HiLoad Dynamic Positioning Unit

In November 2012, Teekay Offshore agreed to acquire a 2010-built HiLoad Dynamic Positioning (DP) unit from Remora AS (or Remora), a Norway-based offshore marine technology company, for a total purchase price of approximately $55 million including modification costs. The HiLoad DP unit is a self-propelled dynamic positioning system that attaches to and keeps conventional tankers in position when loading from offshore installations. The transaction is subject to finalizing a ten-year time-charter contract with Petroleo Brasileiro SA (or Petrobras) in Brazil. The acquisition of the HiLoad DP unit is expected to be completed in the second quarter of 2013 and the unit is expected to commence operating at its full time-charter rate in early 2014 once modifications, delivery of the DP unit to Brazil, and operational testing have been completed. As part of the transaction, we have also agreed to invest approximately $4.4 million to acquire a 49.9% ownership interest in a recapitalized Remora. In addition, Teeky Offshore will enter into an agreement with Remora which will provide Teekay Offshore with the right of first refusal to acquire future HiLoad projects developed by Remora.

Please read “Item 5. Operating and Financial Review and Prospects—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Significant Developments in 2012 and Early 2013 “ for more information.

Recent Equity Offerings and Transactions by Subsidiaries

Equity Offerings and Transactions by Teekay Tankers

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During April 2010, Teekay Tankers completed a public offering of 8.8 million common shares of its Class A Common Stock (including 1.1 million common shares issued upon the partial exercise of the underwriter’s overallotment option) at a price of $12.25 per share, for gross proceeds of $107.5 million. Teekay Tankers used the net proceeds from the offering as partial consideration to acquire from us for a total purchase price of $168.7 million the following three vessels: two Suezmax tankers, the Yamuna Spirit and the Kaveri Spirit, and one Aframax tanker, the Helga Spirit. As part of the purchase price for these vessels, Teekay Tankers concurrently issued to us 2.6 million unregistered shares of Class A Common Stock at the public offering price of $12.25 per share.

During October 2010, Teekay Tankers completed a public offering of 8.6 million common shares of its Class A Common Stock (including 395,000 common shares issued upon the partial exercise of the underwriter’s overallotment option) at a price of $12.15 per share, for gross proceeds of $104.4 million. Teekay Tankers used part of the net proceeds from the offering to repay a portion of its outstanding debt under a term loan.

During February 2011, Teekay Tankers completed a public offering of 9.9 million common shares of its Class A Common Stock (including 1.3 million common shares issued upon the exercise of the underwriter’s overallotment option) at a price of $11.33 per share, for gross proceeds of approximately $112.1 million. Teekay Tankers used the net proceeds from the offering to prepay a portion of its outstanding debt under a revolving credit facility.

During February 2012, Teekay Tankers completed a public offering of 17.3 million common shares of its Class A common stock (including 2.3 million common shares issued upon the full exercise of the underwriter’s overallotment option) at a price of $4.00 per share, for gross proceeds of $69 million. Teekay Tankers used the net proceeds from the offering to repay a portion of its outstanding debt under a revolving credit facility.

During June 2012, Teekay Tankers acquired from Teekay a fleet of 13 double-hull conventional oil and product tankers and related time-charter contracts, debt facilities and other assets and rights, for an aggregate purchase price of approximately $454.2 million. As partial consideration for the sale, Teekay received $25 million of newly issued shares of Teekay Tankers’ Class A common stock, issued at a price of $5.60 per share, and the remaining amount was settled through a combination of a cash payment to Teekay and the assumption by Teekay Tankers of existing debt secured by the acquired vessels.

As a result of these transactions, our ownership of Teekay Tankers was 25.1% as of March 1, 2013. We maintain voting control of Teekay Tankers through our ownership of shares of Class A and Class B Common Stock and continue to consolidate this subsidiary. Please read “Item 18. Financial Statements: Note 5—Financing Transactions.”

Equity Offerings, Unit Issuances and Transactions by Teekay Offshore and the Sale of Remaining Interest in OPCO to Teekay Offshore

During March 2010, Teekay Offshore completed a public offering of 5.1 million common units (including 660,000 units issued upon the exercise of the underwriter’s overallotment option) at a price of $19.48 per unit, for gross proceeds of $100.6 million (including the general partner’s 2% proportionate capital contribution). Teekay Offshore used the net proceeds from the offering to repay the vendor financing of $60.0 million we provided for the acquisition from us of the FPSO unit, the Petrojarl Varg and to finance a portion of the April 2010 acquisition from us of the FSO unit, the Falcon Spirit, for $44.1 million.

During August 2010, Teekay Offshore completed a public offering of 6.0 million common units (including 787,500 units issued upon the exercise of the underwriter’s overallotment option) at a price of $22.15 per unit, for gross proceeds of $136.5 million (including the general partner’s 2% proportionate capital contribution). Teekay Offshore used the net proceeds from the offering to repay a portion of its outstanding debt under one of its revolving credit facilities.

During December 2010, Teekay Offshore completed a public offering of 6.4 million common units (including 840,000 units issued upon the exercise of the underwriter’s overallotment option) at a price of $27.84 per unit, for gross proceeds of $182.9 million (including the general partner’s 2% proportionate capital contribution). Teekay Offshore used the net proceeds from the offering to repay a portion of its outstanding debt under one revolving credit facility.

During March 2011, we sold our 49% interest in OPCO to Teekay Offshore for a combination of $175 million in cash (less $15 million in distributions made by OPCO to us between December 31, 2010 and the date of acquisition) and 7.6 million of Teekay Offshore’s common units. In addition, Teekay Offshore’s general partner made a proportionate capital contribution to maintain its 2% general partner interest. The sale increased Teekay Offshore’s ownership of OPCO from 51% to 100%.

During July 2011, Teekay Offshore completed a private placement of 0.7 million common units at a price of $28.04 per unit to an institutional investor for gross proceeds of approximately $20.4 million (including the general partner’s 2% proportionate capital contribution). Teekay Offshore used the proceeds from the issuance of common units to partially fund the acquisition of four newbuilding shuttle tankers to be chartered under long-term fixed-rate charters with a subsidiary of BG Group plc (or BG) to provide shuttle tanker services in Brazil.

During November 2011, Teekay Offshore completed a private placement of 7.3 million common units at a price of $23.90 to a group of institutional investors for gross proceeds of approximately $173.5 million (including the general partner’s 2% proportionate capital contribution). Teekay Offshore used the proceeds from the issuance of common units to finance its acquisition from Sevan in November 2011 of the Piranema and four BG newbuilding shuttle tankers that are scheduled to deliver in mid-2013.

During November 2011, Teekay Offshore acquired a 100% interest in the Piranema from Sevan. The total purchase price of $164.3 million (including an adjustment for working capital) was paid in cash and was financed through the concurrent issuance of 7.3 million common units in a private placement with third-party investors. The 2007-built Piranema Spirit FPSO unit is currently operating under a long-term charter to Petroleo Brasileiro S.A. (or Petrobras) on the Piranema field located offshore Brazil. The charter includes a firm contract period through March 2018, with up to 11 one-year extension options and includes cost escalation clauses.

During July 2012, Teekay Offshore issued 1.7 million common units to a group of institutional investors for gross proceeds, including Teekay Offshore’s general partner’s 2% proportionate capital contribution, of $45.9 million. Teekay Offshore used the net proceeds from the issuance of common units to partially finance the shipyard instalments for the four Suezmax newbuilding shuttle tankers.

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During September 2012, Teekay Offshore completed a public offering of 7.8 million common units for gross proceeds, including Teekay Offshore’s general partner’s 2% proportionate capital contribution, of $219.5 million. Teekay Offshore used the net proceeds from the issuance of common units to repay a portion of its outstanding debt under its revolving credit facilities.

As a result of these transactions, our ownership of Teekay Offshore was reduced to 29.4% (including our 2% general partner interest) as of March 1, 2013. We maintain control of Teekay Offshore by virtue of our control of the general partner and will continue to consolidate this subsidiary. Please read “Item 18. Financial Statements: Note 5—Financing Transactions.”

Equity Offerings, Unit Issuances and Transactions by Teekay LNG

During July 2010, Teekay LNG completed a direct equity placement of 1.7 million common units at a price of $29.18 per unit, for gross proceeds of $51 million (including the general partner’s 2% proportionate capital contribution).

During November 2010, Teekay LNG acquired a 50% interest in companies that own two LNG carriers (collectively the Exmar Joint Venture) from Exmar NV for a total purchase price of approximately $72.5 million net of assumed debt. Teekay LNG paid $37.3 million of the purchase price by issuing to Exmar NV 1.1 million of its common units and the balance was financed by borrowing under one of its revolving credit facilities.

During April 2011, Teekay LNG completed a public offering of 4.3 million of its common units (including 551,800 million units issued upon the partial exercise of the underwriters’ overallotment option) at a price of $38.88 per unit, for gross proceeds of $168.7 million (including the general partner’s 2% proportionate capital contribution). Teekay LNG used the net proceeds from the offering to fund the equity purchase price of its acquisition from Teekay of a 33% interest in four newbuilding LNG carriers to provide services to the Angola LNG Project.

During November 2011, Teekay LNG completed a public offering of 5.5 million of its common units at a price of $33.40 per unit, for gross proceeds of $187.4 million (including the general partner’s 2% proportionate capital contribution). Teekay LNG used the proceeds from the offering to partially finance the acquisition, through a joint venture with Marubeni Corporation (or Marubeni), of six LNG carriers from A.P. Moller-Maersk A/S (or Maersk).

During February 2012, Teekay LNG and Marubeni acquired, through their joint venture (or the Teekay LNG-Marubeni Joint Venture), a 100% interest in the six LNG carriers from Maersk for an aggregate purchase price of approximately $1.3 billion. Teekay LNG and Marubeni have 52% and 48% economic interests, respectively, but share control in the joint venture that was formed to hold the ownership interests in these LNG carriers. The Teekay LNG-Marubeni Joint Venture financed this acquisition with secured loan facilities and equity contributions from Teekay LNG and Marubeni. Teekay LNG’s share of the equity contribution was approximately $138 million.

During September 2012, Teekay LNG completed a public offering of 4.8 million common units at a price of $38.43 per unit for gross proceeds, including Teekay LNG’s general partner’s 2% proportionate capital contribution, of approximately $189.2 million. Teekay LNG used the net proceeds from the offering to repay a portion of its outstanding debt under two of its revolving credit facilities.

As a result of these transactions, our ownership of Teekay LNG has been reduced to 37.5% (including our 2% general partner interest) as of March 1, 2013. We maintain control of Teekay LNG by virtue of our control of the general partner and will continue to consolidate this subsidiary. Please read “Item 18. Financial Statements: Note 5— Financing Transactions.”

Please read “Item 5. Operating and Financial Review and Prospects—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Significant Developments in 2012 and Early 2013” for more information on recent transactions.

B. Operations

Our organization is divided into the following key areas: the shuttle tanker and FSO segment (included in our Teekay Shuttle and Offshore business unit), the FPSO segment (included in our Teekay Petrojarl business unit), the liquefied gas segment (included in our Teekay Gas Services business unit) and the conventional tanker segment, consisting of the spot tanker sub-segment and fixed-rate tanker sub-segment (both included in our Teekay Tanker Services business unit). These centers of expertise work closely with customers to ensure a thorough understanding of our customers’ requirements and to develop tailored solutions.

• The Teekay Shuttle and Offshore and Teekay Petrojarl business units provide marine transportation, production and storage services to the offshore oil industry, including shuttle tanker, FSO and FPSO services. Our expertise and partnerships with third parties allow us to create solutions for customers producing crude oil from offshore installations.

• The Teekay Gas Services business unit provides gas transportation services, primarily under long-term fixed-rate contracts to major energy and utility companies. These services currently include the transportation of LNG and LPG.

• The Teekay Tanker Services business unit is responsible for the commercial management of our conventional crude oil and product tanker transportation services. We offer a full range of shipping solutions through our worldwide network of commercial offices.

Shuttle Tanker and FSO Segment and FPSO Segment

The main services our shuttle tanker and FSO segment and our FPSO segment provide to customers are:

• offloading and transportation of cargo from oil field installations to onshore terminals via dynamically positioned, offshore loading shuttle tankers;

• floating storage for oil field installations via FSO units; and

• floating production, processing and storage services via FPSO units.

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Shuttle Tankers

A shuttle tanker is a specialized ship designed to transport crude oil and condensates from offshore oil field installations to onshore terminals and refineries. Shuttle tankers are equipped with sophisticated loading systems and dynamic positioning systems that allow the vessels to load cargo safely and reliably from oil field installations, even in harsh weather conditions. Shuttle tankers were developed in the North Sea as an alternative to pipelines. The first cargo from an offshore field in the North Sea was shipped in 1977, and the first dynamically positioned shuttle tankers were introduced in the early 1980s. Shuttle tankers are often described as “floating pipelines” because these vessels typically shuttle oil from offshore installations to onshore facilities in much the same way a pipeline would transport oil along the ocean floor.

Our shuttle tankers are primarily subject to long-term, fixed-rate time-charter contracts or bareboat charter contracts for a specific offshore oil field, where a vessel is hired for a fixed period of time, or under contracts of affreightment for various fields, where we commit to be available to transport the quantity of cargo requested by the customer from time to time over a specified trade route within a given period of time. The number of voyages performed under these contracts of affreightment normally depends upon the oil production of each field. Competition for charters is based primarily upon price, availability, the size, technical sophistication, age and condition of the vessel and the reputation of the vessel’s manager. Technical sophistication of the vessel is especially important in harsh operating environments such as the North Sea. Although the size of the world shuttle tanker fleet has been relatively unchanged in recent years, conventional tankers can be converted into shuttle tankers by adding specialized equipment to meet customer requirements. Shuttle tanker demand may also be affected by the possible substitution of sub-sea pipelines to transport oil from offshore production platforms.

As of December 31, 2012, there were approximately 102 vessels in the world shuttle tanker fleet (including 25 newbuildings), the majority of which operate in the North Sea. Shuttle tankers also operate in Africa, Brazil, Canada, Russia and the United States Gulf. As of December 31, 2012, we had ownership interests in 34 shuttle tankers (including four newbuildings) and chartered-in an additional four shuttle tankers. Subsequent to December 31, 2012, we sold a 1992-built owned shuttle tanker, which was laid-up since July 2011. Other shuttle tanker owners include Knutsen NYK Offshore Tankers AS, Transpetro, Sovcomflot, Viken Shipping and J. Lauritzen which, as of December 31, 2012, controlled smaller fleets of 3 to 22 shuttle tankers each. We believe that we have significant competitive advantages in the shuttle tanker market as a result of the quality, type and dimensions of our vessels combined with our market share in the North Sea and Brazil.

FSO Units

FSO units provide on-site storage for oil field installations that have no storage facilities or that require supplemental storage. An FSO unit is generally used in combination with a jacked-up fixed production system, floating production systems that do not have sufficient storage facilities or as supplemental storage for fixed platform systems, which generally have some on-board storage capacity. An FSO unit is usually of similar design to a conventional tanker, but has specialized loading and off-take systems required by field operators or regulators. FSO units are moored to the seabed at a safe distance from a field installation and receive the cargo from the production facility via a dedicated loading system. An FSO unit is also equipped with an export system that transfers cargo to shuttle or conventional tankers. Depending on the selected mooring arrangement and where they are located, FSO units may or may not have any propulsion systems. FSO units are usually conversions of older conventional or shuttle tankers. These conversions, which include installation of a loading and off-take system and hull refurbishment, can generally extend the lifespan of a vessel as an FSO unit by up to 20 years over the normal conventional or shuttle tanker lifespan of 25 years.

Our FSO units are generally placed on long-term, fixed-rate time-charters or bareboat charters as an integrated part of the field development plan, which provides more stable cash flow to us. Under a bareboat charter, the customer pays a fixed daily rate for a fixed period of time for the full use of the vessel and is responsible for all crewing, management and navigation of the vessel and related expenses.

As of December 31, 2012, there were approximately 101 FSO units operating and nine FSO units on order in the world fleet. As at December 31, 2012, we had ownership interests in five FSO units. The major markets for FSO units are Asia, the Middle East, the North Sea, South America and West Africa. Our primary competitors in the FSO market are conventional tanker owners, who have access to tankers available for conversion, and oil field services companies and oil field engineering and construction companies who compete in the floating production system market. Competition in the FSO market is primarily based on price, expertise in FSO operations, management of FSO conversions and relationships with shipyards, as well as the ability to access vessels for conversion that meet customer specifications.

FPSO Units

FPSO units are offshore production facilities that are ship-shaped or cylindrical-shaped and store processed crude oil in tanks located in the hull of the vessel. FPSO units are typically used as production facilities to develop marginal oil fields or deepwater areas remote from existing pipeline infrastructure. Of four major types of floating production systems, FPSO units are the most common type. Typically, the other types of floating production systems do not have significant storage and need to be connected into a pipeline system or use an FSO unit for storage. FPSO units are less weight-sensitive than other types of floating production systems and their extensive deck area provides flexibility in process plant layouts. In addition, the ability to utilize surplus or aging tanker hulls for conversion to an FPSO unit provides a relatively inexpensive solution compared to the new construction of other floating production systems. A majority of the cost of an FPSO comes from its top-side production equipment and thus, FPSO units are expensive relative to conventional tankers. An FPSO unit carries on-board all the necessary production and processing facilities normally associated with a fixed production platform. As the name suggests, FPSO units are not fixed permanently to the seabed but are designed to be moored at one location for long periods of time. In a typical FPSO unit installation, the untreated well-stream is brought to the surface via subsea equipment on the sea floor that is connected to the FPSO unit by flexible flow lines called risers. The risers carry oil, gas and water from the ocean floor to the vessel, which processes it on board. The resulting crude oil is stored in the hull of the vessel and subsequently transferred to tankers either via a buoy or tandem loading system for transport to shore.

Traditionally for large field developments, the major oil companies have owned and operated new, custom-built FPSO units. FPSO units for smaller fields have generally been provided by independent FPSO contractors under life-of-field production contracts, where the contract’s duration is for the useful life of the oil field. FPSO units have been used to develop offshore fields around the world since the late 1970s. As of December 2012, there were approximately 165 FPSO units operating and 44 FPSO units on order in the world fleet. At December 31, 2012, we had ownership interests in ten FPSO units (including one unit under conversion). Most independent FPSO contractors have backgrounds in marine energy transportation, oil field services or oil field engineering and construction. Other major independent FPSO contractors are SBM Offshore NV, BW Offshore, MODEC, Bluewater, Bumi Armada and Maersk FPSOs.

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During 2012, a total of approximately 60% of our net revenues were earned by the vessels in our shuttle tankers and FSO segment and FPSO segment, compared to approximately 55% in 2011 and 53% in 2010. Please read “Item 5. Operating and Financial Review and Prospects: Results of Operations.”

Liquefied Gas Segment

The vessels in our liquefied gas segment compete in the LNG and LPG markets. LNG carriers are usually chartered to carry LNG pursuant to time-charter contracts with durations between 20 and 25 years, and with charter rates payable to the owner on a monthly basis. LNG shipping historically has been transacted with these long-term, fixed-rate time-charter contracts. LNG projects require significant capital expenditures and typically involve an integrated chain of dedicated facilities and cooperative activities. Accordingly, the overall success of an LNG project depends heavily on long-range planning and coordination of project activities, including marine transportation. Most shipping requirements for new LNG projects continue to be provided on a long-term basis, though the level of spot voyages (typically consisting of a single voyage), short-term time-charters and medium-term time-charters have grown in the past few years.

In the LNG markets, we compete principally with other private and state-controlled energy and utilities companies, which generally operate captive fleets, and independent ship owners and operators. Many major energy companies compete directly with independent owners by transporting LNG for third parties in addition to their own LNG. Given the complex, long-term nature of LNG projects, major energy companies historically have transported LNG through their captive fleets. However, independent fleet operators have been obtaining an increasing percentage of charters for new or expanded LNG projects as major energy companies have continued to divest non-core businesses. Other major operators of LNG carriers are Qatar Gas Transport (Nakilat), Malaysian International Shipping Company, Mitsui O.S.K Lines, NYK Line, Golar LNG, Shell and BW Group.

LNG carriers transport LNG internationally between liquefaction facilities and import terminals. After natural gas is transported by pipeline from production fields to a liquefaction facility, it is super-cooled to a temperature of approximately negative 260 degrees Fahrenheit. This process reduces its volume to approximately 1 / 600^th of its volume in a gaseous state. The reduced volume facilitates economical storage and transportation by ship over long distances, enabling countries with limited natural gas reserves or limited access to long-distance transmission pipelines to meet their demand for natural gas. LNG carriers include a sophisticated containment system that holds and insulates the LNG so it maintains its liquid form. The LNG is transported overseas in specially built tanks on double-hulled ships to a receiving terminal, where it is offloaded and stored in heavily insulated tanks. In regasification facilities at the receiving terminal, the LNG is returned to its gaseous state (or regasified) and then shipped by pipeline for distribution to natural gas customers.

LPG carriers are mainly chartered to carry LPG on time charters of three to five years, on contracts of affreightment or spot voyage charters. The two largest consumers of LPG are residential users and the petrochemical industry. Residential users, particularly in developing regions where electricity and gas pipelines are not developed, do not have fuel switching alternatives and generally are not LPG price sensitive. The petrochemical industry, however, has the ability to switch between LPG and other feedstock fuels depending on price and availability of alternatives.

Most new LNG carriers, including all of our vessels, are built with a membrane containment system. These systems consist of insulation between thin primary and secondary barriers and are designed to accommodate thermal expansion and contraction without overstressing the membrane. New LNG carriers are generally expected to have a lifespan of approximately 35 to 40 years. New LPG carriers are generally expected to have a lifespan of approximately 30 to 35 years. Unlike the oil tanker industry, there are currently no regulations that require the phase-out from trading of LNG and LPG carriers after they reach a certain age. As at December 31, 2012, there were approximately 373 vessels in the worldwide LNG fleet, with an average age of approximately 11 years, and an additional 86 LNG carriers under construction or on order for delivery through 2017. As of December 31, 2012, the worldwide LPG tanker fleet consisted of approximately 1,236 vessels with an average age of approximately 16 years and approximately 97 additional LPG vessels were on order for delivery through 2016. LPG carriers range in size from approximately 250 to approximately 85,000 cubic meters (or cbm). Approximately 53% (in terms of vessel numbers) of the worldwide fleet is less than 5,000 cbm.

Our liquefied gas segment primarily consists of LNG and LPG carriers subject to long-term, fixed-rate charter contracts. As at December 31, 2012, we had ownership interests in 27 LNG carriers, as well as 2 additional newbuilding LNG carriers on order. In addition, as at December 31, 2012, we had ownership interests in five LPG carriers. Subsequent to December 31, 2012, Teekay LNG entered into a joint venture agreement with Belgium-based Exmar NV (or Exmar) to own and charter-in LPG carriers with a primary focus on the mid-size gas carrier segment. The joint venture entity, called Exmar LPG BVBA, took economic effect as of November 1, 2012 and includes 20 owned LPG carriers (including eight newbuildings scheduled for delivery between 2014 and 2016 and five chartered-in LPG carriers.

During 2012, approximately 16% of our net revenues were earned by the vessels in our liquefied gas segment, compared to approximately 15% in 2011, and 13% in 2010. Please read “Item 5. Operating and Financial Review and Prospects: Results of Operations.”

Conventional Tanker Segment

a) Spot Tanker Sub-Segment

Our spot tanker sub-segment consists of conventional crude oil tankers and product tankers operating in the spot-tanker market or subject to time-charters or contracts of affreightment that are priced on a spot-market basis or are short-term, fixed-rate contracts. We consider contracts that have an original term of less than one year in duration to be short-term. The vessels in our spot tanker sub-segment compete primarily in the Aframax and Suezmax tanker markets. In these markets, international seaborne oil and other petroleum products transportation services are provided by two main types of operators: captive fleets of major oil companies (both private and state-owned) and independent ship-owner fleets. Many major oil companies and other oil trading companies, the primary charterers of our vessels, also operate their own vessels and transport their own oil and oil for third-party charterers in direct competition with independent owners and operators. Competition for charters in the Aframax and Suezmax spot charter market is intense and is based upon price, location, the size, age, condition and acceptability of the vessel, and the reputation of the vessel’s manager.

We compete principally with other owners in the spot-charter market through the global tanker charter market. This market is comprised of tanker broker companies that represent both charterers and ship-owners in chartering transactions. Within this market, some transactions, referred to as “market cargoes,” are offered by charterers through two or more brokers simultaneously and shown to the widest possible range of owners; other transactions, referred to as “private cargoes,” are given by the charterer to only one broker and shown selectively to a limited number of owners whose tankers are most likely to be acceptable to the charterer and are in position to undertake the voyage.

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Certain of our vessels in the spot tanker sub-segment operate pursuant to pooling arrangements. Under a pooling arrangement, different vessel owners pool their vessels, which are managed by a pool manager, to improve utilization and reduce expenses. In general, revenues generated by the vessels operating in a pool, less related voyage expenses (such as fuel and port charges) and pool administrative expenses, are pooled and allocated to the vessel owners according to a pre-determined formula. As of December 31, 2012, we participated in two main pooling arrangements. These include an Aframax tanker pool and a Suezmax tanker pool (or the Gemini Pool). As of 2012, eleven of our Aframax tankers operated in the Aframax tanker pool and ten of our Suezmax tankers operated in the Gemini Pool. Each of these pools is either solely or jointly managed by us.

Our competition in the Aframax (80,000 to 119,999 dwt) market is also affected by the availability of other size vessels that compete in that market. Suezmax (120,000 to 199,999 dwt) vessels and Panamax (55,000 to 79,999 dwt) vessels can compete for many of the same charters for which our Aframax tankers compete. Similarly, Aframax tankers and Very Large Crude Carriers (200,000 to 319,999 dwt) (or VLCCs) can compete for many of the same charters for which our Suezmax vessels compete. Because VLCCs comprise a substantial portion of the total capacity of the market, movements by such vessels into Suezmax trades or of Suezmax vessels into Aframax trades would heighten the already intense competition.

We believe that we have competitive advantages in the Aframax and Suezmax tanker market as a result of the quality, type and dimensions of our vessels and our market share in the Indo-Pacific and Atlantic Basins. As of December 31, 2012, our Aframax tanker fleet (excluding Aframax-size shuttle tankers and newbuildings) had an average age of approximately 11.0 years and our Suezmax tanker fleet (excluding Suezmax-size shuttle tankers and newbuildings) had an average age of approximately 7.0 years. This compares to an average age for the world oil tanker fleet of approximately 8.5 years, for the world Aframax tanker fleet of approximately 8.3 years and for the world Suezmax tanker fleet of approximately 7.7 years.

As of December 31, 2012, other large operators of Aframax tonnage (including newbuildings on order) included Malaysian International Shipping Corporation (approximately 55 Aframax vessels), Sovcomflot (approximately 42 vessels), the Sigma Pool (approximately 41 vessels) and the Aframax International Pool (approximately 24 Aframax vessels). Other large operators of Suezmax tonnage (including newbuildings on order) included the Stena Sonangol Pool (approximately 26 vessels), the Blue Fin Pool (approximately 21 vessels), the Orion Pool (approximately 20 vessels) and Sovcomflot (approximately 17 vessels).

We have chartering staff located in Singapore; London, England; and Houston, USA. Each office serves our clients headquartered in that office’s region. Fleet operations, vessel positions and charter market rates are monitored around the clock. We believe that monitoring such information is critical to making informed bids on competitive brokered business.

During 2012, approximately 7% of our net revenues were earned by the vessels in our spot tanker sub-segment, compared to approximately 9% in 2011 and 13% in 2010. Please read “Item 5. Operating and Financial Review and Prospects: Results of Operations.”

b) Fixed-Rate Tanker Sub-Segment

The vessels in our fixed-rate tanker sub-segment primarily consist of Aframax and Suezmax tankers that are employed on long-term time-charters. We consider contracts that have an original term of one year duration or more to be long-term. The only difference between the vessels in the spot tanker sub-segment and the fixed-rate tanker sub-segment is the duration of the contracts under which they are employed. During 2012, approximately 17% of our net revenues were earned by the vessels in the fixed-rate tanker sub-segment, compared to approximately 21% in 2011 and 20% in 2010. Please read “Item 5. Operating and Financial Review and Prospects: Results of Operations.”

Our Fleet

As at December 31, 2012, our fleet (excluding vessels managed for third parties) consisted of 146 vessels, including chartered-in vessels and newbuildings/conversions on order. The following table summarizes our fleet as at December 31, 2012:

	Number of Vessels
	Owned Vessels			Chartered-in Vessels			Newbuildings  / Conversions			Total
Shuttle Tanker and FSO Segment
Shuttle Tankers		28	(1)		4	(2)		4	(3)		36
FSO Units		4	(4)		—						4
Total Shuttle Tanker and FSO Segment		32			4			4			40
FPSO Segment
Shuttle Tankers		2	(1)(5)		—			—			2
FSO Unit		1	(4)(5)		—			—			1
FPSO Units		9	(5)		—			1	(6)		10
Total FPSO Segment		12			—			1			13
Liquefied Gas Segment
LNG Carriers		27	(7)		—			2	(8)		29
LPG Carriers		5	(9)		—			—			5
Total Liquefied Gas Segment		32			—			2			34
Spot Tanker Sub-Segment
Suezmax Tankers		10	(10)		—			—			10
Aframax Tankers		6	(11)		7			—			13
Large Product Tankers		3	(12)		—			—			3
Total Spot Tanker Sub-Segment		19			7			—			26
Fixed-Rate Tanker Sub-Segment
Conventional Tankers		31	(13)		1			1	(14)		33
Total Fixed-Rate Tanker Sub-Segment		31			1			1			33
Total		126			12			8			146

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The following footnotes indicate the vessels in the table above that are owned or chartered-in by non-wholly owned subsidiaries of Teekay or have been or will be offered by us to Teekay LNG, Teekay Offshore or Teekay Tankers:

(1) Includes 30 vessels owned by Teekay Offshore (including six through 50% controlled subsidiaries and three through 67% controlled subsidiaries).

(2) All four vessels chartered-in by Teekay Offshore.

(3) Includes four newbuilding vessels owned 100% by Teekay Offshore, which are scheduled to be delivered during 2013.

(4) Includes four FSO units owned 100% by Teekay Offshore and one FSO unit owned through an 89% subsidiary of Teekay Offshore.

(5) Includes four FPSO units owned 100% by Teekay Petrojarl. Teekay is required to offer to sell to Teekay Offshore any of these units that are servicing contracts in excess of three years in length. Three FPSO units are owned 100% by Teekay Offshore. One FPSO unit is owned 50% by Teekay and one is a variable interest entity. Certain of our FPSO contracts include the services of shuttle tankers and an FSO unit, and as such, these vessels are included in the FPSO segment.

(6) Includes one FPSO unit owned 100% by us, which is scheduled to be delivered during the first half of 2014.

(7) Includes the following interests of Teekay LNG: a 100% interest in six LNG carriers, a 70% interest in five LNG carriers, a 40% interest in four LNG carriers, a 50% interest in two LNG carriers, a 52% interest in six LNG carriers, and a 33% interest in four LNG carriers.

(8) Includes two newbuilding vessels owned 100% by Teekay LNG, which are scheduled to be delivered in 2016.

(9) Includes five vessels owned 100% by Teekay LNG.

(10) Includes six Suezmax tankers owned 100% by Teekay Tankers.

(11) Includes three vessels owned 100% by Teekay Offshore, two of which are chartered to Teekay, and three vessels owned 100% by Teekay Tankers.

(12) Includes three vessels owned 100% by Teekay Tankers.

(13) Includes eleven vessels owned 100% by Teekay LNG, four vessels owned 100% by Teekay Offshore, and 16 vessels owned 100% by Teekay Tankers.

(14) Includes Teekay Tanker’s 50% interest in one VLCC newbuilding, which is scheduled to be delivered in the second quarter of 2013.

Our vessels are of Bahamian, Belgian, Danish, Isle of Man, Liberian, Marshall Islands, Norwegian, Singapore, and Spanish registry.

Many of our Aframax and Suezmax vessels and some of our shuttle tankers have been designed and constructed as substantially identical sister ships. These vessels can, in many situations, be interchanged, providing scheduling flexibility and greater capacity utilization. In addition, spare parts and technical knowledge can be applied to all the vessels in the particular series, thereby generating operating efficiencies.

As of December 31, 2012, we had four shuttle tankers, two LNG carriers and one FPSO unit on order. In addition, we had a 50% interest in one VLCC newbuilding on order. Please read “Item 5. Operating and Financial Review and Prospects: Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and “Item 18. Financial Statements: Notes 16(a) and 16(b)—Commitments and Contingencies—Vessels Under Construction and Joint Ventures.”

Please read “Item 18. Financial Statements: Note 8—Long-Term Debt for information with respect to major encumbrances against our vessels.”

Safety, Management of Ship Operations and Administration

Safety and environmental compliance are our top operational priorities. We operate our vessels in a manner intended to protect the safety and health of our employees, the general public and the environment. We seek to manage the risks inherent in our business and are committed to eliminating incidents that threaten the safety and integrity of our vessels, such as groundings, fires, collisions and petroleum spills. In 2008, we introduced the Quality Assurance and Training Officers Program (or QATO) to conduct rigorous internal audits of our processes and provide our seafarers with on-board training. In 2007, we introduced a behavior-based safety program called “Safety in Action” to improve the safety culture in our fleet. We are also committed to reducing our emissions and waste generation. In 2010, Teekay Corporation introduced the “Operational Leadership” campaign to reinforce commitment to personal and operational safety.

Key performance indicators facilitate regular monitoring of our operational performance. Targets are set on an annual basis to drive continuous improvement, and indicators are reviewed quarterly to determine if remedial action is necessary to reach the targets.

We, through certain of our subsidiaries, assist our operating subsidiaries in managing their ship operations. All vessels are operated under our comprehensive and integrated Safety Management System that complies with the International Safety Management Code (or ISM Code), the International Standards Organization’s (or ISO) 9001 for Quality Assurance, ISO 14001 for Environment Management Systems, and Occupational Health and Safety Advisory Services (or OHSAS) 18001. The management system is certified by Det Norske Veritas (or DNV), the Norwegian classification society. It has also been separately approved by the Australian and Spanish Flag administrations. Although certification is valid for five years, compliance with the above mentioned standards is confirmed on a yearly basis by a rigorous auditing procedure that includes both internal audits as well as external verification audits by DNV and certain flag states.

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We provide, through certain of our subsidiaries, expertise in various functions critical to the operations of our operating subsidiaries. We believe this arrangement affords a safe, efficient and cost-effective operation. Our subsidiaries also provide to us access to human resources, financial and other administrative functions pursuant to administrative services agreements.

Critical ship management functions undertaken by our subsidiaries are:

• vessel maintenance (including repairs and dry docking) and certification;

• crewing by competent seafarers;

• procurement of stores, bunkers and spare parts;

• management of emergencies and incidents;

• supervision of shipyard and projects during new-building and conversions;

• insurance; and

• financial management services.

Integrated on-board and on-shore systems support the management of maintenance, inventory control and procurement, crew management and training and assist with budgetary controls.

Our day-to-day focus on cost efficiencies is applied to all aspects of our operations. We believe that the generally uniform design of some of our existing and new-building vessels and the adoption of common equipment standards provides operational efficiencies, including with respect to crew training and vessel management, equipment operation and repair, and spare parts ordering. In addition, we and two other shipping companies have a purchasing alliance, Teekay Bergesen Worldwide, which leverages the purchasing power of the combined fleets, mainly in such commodity areas as lube oils, paints and other chemicals.

Risk of Loss and Insurance

The operation of any ocean-going vessel carries an inherent risk of catastrophic marine disasters, death or injury of persons and property losses caused by adverse weather conditions, mechanical failures, human error, war, terrorism, piracy and other circumstances or events. In addition, the transportation of crude oil, petroleum products, LNG and LPG is subject to the risk of spills and to business interruptions due to political circumstances in foreign countries, hostilities, labor strikes and boycotts. The occurrence of any of these events may result in loss of revenues or increased costs.

We carry hull and machinery (marine and war risks) and protection and indemnity insurance coverage to protect against most of the accident-related risks involved in the conduct of our business. Hull and machinery insurance covers loss of or damage to a vessel due to marine perils such as collision, grounding and weather. Protection and indemnity insurance indemnifies us against liabilities incurred while operating vessels, including injury to our crew or third parties, cargo loss and pollution. The current maximum amount of our coverage for pollution is $1 billion per vessel per incident. We also carry insurance policies covering war risks (including piracy and terrorism) and, for some of our LNG carriers, loss of revenues resulting from vessel off-hire time due to a marine casualty. We believe that our current insurance coverage is adequate to protect against most of the accident-related risks involved in the conduct of our business and that we maintain appropriate levels of environmental damage and pollution insurance coverage. However, we cannot guarantee that all covered risks are adequately insured against, that any particular claim will be paid or that we will be able to procure adequate insurance coverage at commercially reasonable rates in the future. More stringent environmental regulations have resulted in increased costs for, and may result in the lack of availability of, insurance against risks of environmental damage or pollution.

We use in our operations a thorough risk management program that includes, among other things, risk analysis tools, maintenance and assessment programs, a seafarers competence training program, seafarers workshops and membership in emergency response organizations.

We have achieved certification under the standards reflected in ISO 9001 for quality assurance, ISO 14001 for environment management systems, OHSAS 18001, and the IMO’s International Management Code for the Safe Operation of Ships and Pollution Prevention on a fully integrated basis.

Operations Outside of the United States

Because our operations are primarily conducted outside of the United States, we are affected by currency fluctuations, to the extent we do not contract in U.S. dollars, and by changing economic, political and governmental conditions in the countries where we engage in business or where our vessels are registered. Past political conflicts in that region, particularly in the Arabian Gulf, have included attacks on tankers, mining of waterways and other efforts to disrupt shipping in the area. Vessels trading in the region have also been subject to acts of piracy. In addition to tankers, targets of terrorist attacks could include oil pipelines, LNG facilities and offshore oil fields. The escalation of existing, or the outbreak of future, hostilities or other political instability in this region or other regions where we operate could affect our trade patterns, increase insurance costs, increase tanker operational costs and otherwise adversely affect our operations and performance. In addition, tariffs, trade embargoes, and other economic sanctions by the United States or other countries against countries in the Indo-Pacific Basin or elsewhere as a result of terrorist attacks or otherwise may limit trading activities with those countries, which could also adversely affect our operations and performance.

Customers

We have derived, and believe that we will continue to derive, a significant portion of our revenues from a limited number of customers. Our customers include major energy and utility companies, major oil traders, large oil and LNG consumers and petroleum product producers, government agencies, and various other entities that depend upon marine transportation. Two customers, international oil companies, accounted for

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a total of 30%, or $588.4 million, of our consolidated revenues during 2012 (2011—two customers for 27% or $508.6 million, 2010—three customers for 38% or $778.6 million). No other customer accounted for more than 10% of our consolidated revenues during 2012, 2011, or 2010. The loss of any significant customer or a substantial decline in the amount of services requested by a significant customer, or the inability of a significant customer to pay for our services, could have a material adverse effect on our business, financial condition and results of operations.

Flag, Classification, Audits and Inspections

Our vessels are registered with reputable flag states, and the hull and machinery of all of our vessels have been “Classed” by one of the major classification societies and members of International Association of Classification Societies ltd (or IACS): BV, Lloyd’s Register of Shipping or American Bureau of Shipping.

The applicable classification society certifies that the vessel’s design and build conforms to the applicable Class rules and meets the requirements of the applicable rules and regulations of the country of registry of the vessel and the international conventions to which that country is a signatory. The classification society also verifies throughout the vessel’s life that it continues to be maintained in accordance with those rules. In order to validate this, the vessels are surveyed by the classification society, in accordance to the classification society rules, which in the case of our vessels follows a comprehensive five-year special survey cycle, renewed every fifth year. During each five-year period, the vessel undergoes annual and intermediate surveys, the scrutiny and intensity of which is primarily dictated by the age of the vessel. As our vessels are modern and we have enhanced the resiliency of the underwater coatings of each vessel hull and marked the hull to facilitate underwater inspections by divers, their underwater areas are inspected in a dry-dock at five-year intervals. In-water inspection is carried out during the second or third annual inspection (i.e. during an Intermediate Survey).

In addition to class surveys, the vessel’s flag state also verifies the condition of the vessel during annual flag state inspections, either independently or by additional authorization to class. Also, port state authorities of a vessel’s port of call are authorized under international conventions to undertake regular and spot checks of vessels visiting their jurisdiction.

Processes followed onboard are audited by either the flag state or the classification society acting on behalf of the flag state to ensure that they meet the requirements of the ISM Code. DNV typically carries out this task. We also follow an internal process of internal audits undertaken at each office and vessel annually.

We follow a comprehensive inspections scheme supported by our sea staff, shore-based operational and technical specialists and members of our QATO program. We carry out a minimum of two such inspections annually, which helps ensure us that:

• our vessels and operations adhere to our operating standards;

• the structural integrity of the vessel is being maintained;

• machinery and equipment is being maintained to give reliable service;

• we are optimizing performance in terms of speed and fuel consumption; and

• the vessel’s appearance supports our brand and meets customer expectations.

Our customers also often carry out vetting inspections under the Ship inspection Report Program, which is a significant safety initiative introduced by the Oil Companies International Marine Forum to specifically address concerns about sub-standard vessels. The inspection results permit charterers to screen a vessel to ensure that it meets their general and specific risk-based shipping requirements.

We believe that the heightened environmental and quality concerns of insurance underwriters, regulators and charterers will generally lead to greater scrutiny, inspection and safety requirements on all vessels in the oil tanker and LNG and LPG carrier markets and will accelerate the scrapping or phasing out of older vessels throughout these markets.

Overall, we believe that our relatively new, well-maintained and high-quality vessels provide us with a competitive advantage in the current environment of increasing regulation and customer emphasis on quality of service.

Regulations

General

Our business and the operation of our vessels are significantly affected by international conventions and national, state and local laws and regulations in the jurisdictions in which our vessels operate, as well as in the country or countries of their registration. Because these conventions, laws and regulations change frequently, we cannot predict the ultimate cost of compliance or their impact on the resale price or useful life of our vessels. Additional conventions, laws, and regulations may be adopted that could limit our ability to do business or increase the cost of our doing business and that may materially adversely affect our operations. We are required by various governmental and quasi-governmental agencies to obtain permits, licenses and certificates with respect to our operations. Subject to the discussion below and to the fact that the kinds of permits, licenses and certificates required for the operations of the vessels we own will depend on a number of factors, we believe that we will be able to continue to obtain all permits, licenses and certificates material to the conduct of our operations.

International Maritime Organization (or IMO)

The IMO is the United Nations’ agency for maritime safety. IMO regulations relating to pollution prevention for oil tankers have been adopted by many of the jurisdictions in which our tanker fleet operates. Under IMO regulations and subject to limited exceptions, a tanker must be of double-hull construction, be of a mid-deck design with double-side construction or be of another approved design ensuring the same level of protection against oil pollution. All of our tankers are double hulled.

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Many countries, but not the United States, have ratified and follow the liability regime adopted by the IMO and set out in the International Convention on Civil Liability for Oil Pollution Damage, 1969, as amended (or CLC ). Under this convention, a vessel’s registered owner is strictly liable for pollution damage caused in the territorial waters of a contracting state by discharge of persistent oil (e.g., crude oil, fuel oil, heavy diesel oil or lubricating oil), subject to certain defenses. The right to limit liability to specified amounts that are periodically revised is forfeited under the CLC when the spill is caused by the owner’s actual fault or when the spill is caused by the owner’s intentional or reckless conduct. Vessels trading to contracting states must provide evidence of insurance covering the limited liability of the owner. In jurisdictions where the CLC has not been adopted, various legislative regimes or common law governs, and liability is imposed either on the basis of fault or in a manner similar to the CLC.

IMO regulations also include the International Convention for Safety of Life at Sea (or SOLAS ), including amendments to SOLAS implementing the International Ship and Port Facility Security Code (or ISPS ), the ISM Code, the International Convention on Load Lines of 1966, and, specifically with respect to LNG and LPG carriers, the International Code for Construction and Equipment of Ships Carrying Liquefied Gases in Bulk (the IGC Code ). The IMO Marine Safety Committee has also published guidelines for vessels with dynamic positioning ( DP ) systems, which would apply to shuttle tankers and DP-assisted FSO units and FPSO units. SOLAS provides rules for the construction of and equipment required for commercial vessels and includes regulations for safe operation. Flag states which have ratified the convention and the treaty generally employ the classification societies, which have incorporated SOLAS requirements into their class rules, to undertake surveys to confirm compliance.

SOLAS and other IMO regulations concerning safety, including those relating to treaties on training of shipboard personnel, lifesaving appliances, radio equipment and the global maritime distress and safety system, are applicable to our operations. Non-compliance with IMO regulations, including SOLAS, the ISM Code, ISPS, the IGC Code for LNG and LPG carriers, and the specific requirements for shuttle tankers, FSO units and FPSO units under the NPD (Norway) and HSE (United Kingdom) regulations, may subject us to increased liability or penalties, may lead to decreases in available insurance coverage for affected vessels and may result in the denial of access to or detention in some ports. For example, the U.S. Coast Guard and European Union authorities have indicated that vessels not in compliance with the ISM Code will be prohibited from trading in U.S. and European Union ports. The ISM Code requires vessel operators to obtain a safety management certification for each vessel they manage, evidencing the shipowner’s development and maintenance of an extensive safety management system. Each of the existing vessels in our fleet is currently ISM Code-certified, and we expect to obtain safety management certificates for each newbuilding vessel upon delivery.

LNG and LPG carriers are also subject to regulation under the IGC Code. Each LNG and LPG carrier must obtain a certificate of compliance evidencing that it meets the requirements of the IGC Code, including requirements relating to its design and construction. Each of our LNG and LPG carriers is currently IGC Code certified, and each of the shipbuilding contracts for our LNG newbuildings, and for the LPG newbuildings requires ICG Code compliance prior to delivery.

Annex VI to the IMO’s International Convention for the Prevention of Pollution from Ships (or Annex VI ) sets limits on sulfur oxide and nitrogen oxide emissions from ship exhausts and prohibits emissions of ozone depleting substances, emissions of volatile compounds from cargo tanks and the incineration of specific substances. Annex VI also includes a world-wide cap on the sulfur content of fuel oil and allows for special areas to be established with more stringent controls on sulfur emissions.

The IMO has issued guidance regarding protecting against acts of piracy off the coast of Somalia. We comply with these guidelines.

In addition, the IMO has proposed that all tankers of the size we operate that are built starting in 2012 contain ballast water treatment systems, and that all other similarly sized tankers install treatment systems by their first intermediate or renewal survey after 2016. This convention has not yet been ratified, but when it becomes effective, we estimate that the installation of ballast water treatment systems on our tankers may cost between $2 million and $3 million per vessel.

European Union (or EU)

Like the IMO, the EU has adopted regulations phasing out single-hull tankers. All of our tankers are double-hulled. On May 17, 2011 the European commission carried out a number of “dawn raids”, or unannounced inspections, at the offices of some of the world’s largest container line operators starting an antitrust investigation. We are not directly affected by this investigation and believe that we are compliant with antitrust rules. Nevertheless, it is possible that the investigation could be widened and new companies and practices come under scrutiny within the EU.

The EU has also adopted legislation (directive 2009/16/Econ Port State Control) that: bans from European waters manifestly sub-standard vessels (defined as vessels that have been detained twice by EU port authorities, in the preceding two years); creates obligations on the part of EU member port states to inspect at least 24% of vessels using these ports annually; provides for increased surveillance of vessels posing a high risk to maritime safety or the marine environment; and provides the EU with greater authority and control over classification societies, including the ability to seek to suspend or revoke the authority of negligent societies.

Two new regulations were introduced by the European Commission in September 2010, as part of the implementation of the Port State Control Directive. These came into force on January 1, 2011 and introduce a ranking system (published on a public website and updated daily) displaying shipping companies operating in the EU with the worst safety records. The ranking is judged upon the results of the technical inspections carried out on the vessels owned be a particular shipping company. Those shipping companies that have the most positive safety records are rewarded by subjecting them to fewer inspections, whilst those with the most safety shortcomings or technical failings recorded upon inspection will in turn be subject to a greater frequency of official inspections to their vessels.

The EU has, by way of Directive 2005/35/EC, which has been amended by Directive 2009/123/EC created a legal framework for imposing criminal penalties in the event of discharges of oil and other noxious substances from ships sailing in its waters, irrespective of their flag. This relates to discharges of oil or other noxious substances from vessels. Minor discharges shall not automatically be considered as offences, except where repetition leads to deterioration in the quality of the water. The persons responsible may be subject to criminal penalties if they have acted with intent, recklessly or with serious negligence and the act of inciting, aiding and abetting a person to discharge a polluting substance may also lead to criminal penalties.

The EU has adopted regulations requiring the use of low sulfur fuel. Currently, vessels are required to burn fuel with a sulfur content not exceeding 1%. Beginning January 1, 2015, vessels are required to burn fuel with sulfur content not exceeding 0.1% while within EU member states’ territorial seas, exclusive economic zones and pollution control zones that are included in SOX Emission Control Areas. Other jurisdictions have also adopted regulations requiring the use of low sulfur fuel. The California Air Resources Board (or CARB) requires vessels to burn fuel with 0.1% sulfur content

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or less within 24 nautical miles of California as of January 1, 2014. IMO regulations require that as of January 1, 2015, all vessels operating within Emissions Control Areas (or ECA) worldwide must comply with 0.1% sulfur requirements. Currently, the only grade of fuel meeting 0.1% sulfur content requirement is low sulfur marine gas oil (or LSMGO). Currently, the only grade of fuel meeting this low sulfur content requirement is low sulfur marine gas oil (or LSMGO). Since July 1, 2010, the applicable sulfur content limits in the North Sea, the Baltic Sea and the English Channel sulfur control areas have been 0.1%. Certain modifications were completed on our Suezmax tankers in order to optimize operation on LSMGO of equipment originally designed to operate on Heavy Fuel Oil (or HFO), and to ensure our compliance with the Directive. In addition, LSMGO is more expensive than HFO and this impacts the costs of operations. However, for vessels employed on fixed term business, all fuel costs, including any increases, are borne by the charterer. Our exposure to increased cost is in our spot trading vessels, although our competitors bear a similar cost increase as this is a regulatory item applicable to all vessels. All required vessels in our fleet trading to and within regulated low sulfur areas are able to comply with fuel requirements.

North Sea and Brazil

Our shuttle tankers primarily operate in the North Sea and Brazil. In addition to the regulations imposed by the IMO and EU, countries having jurisdiction over North Sea areas impose regulatory requirements in connection with operations in those areas, including HSE in the United Kingdom and NPD in Norway. These regulatory requirements, together with additional requirements imposed by operators in North Sea oil fields, require that we make further expenditures for sophisticated equipment, reporting and redundancy systems on the shuttle tankers and for the training of seagoing staff. Additional regulations and requirements may be adopted or imposed that could limit our ability to do business or further increase the cost of doing business in the North Sea.

In Norway, the Norwegian Pollution Control Authority requires the installation of volatile organic compound emissions (or VOC) reduction units on most shuttle tankers serving the Norwegian continental shelf. Customers bear the cost to install and operate the VOC equipment on board the shuttle tankers.

In Brazil, Petrobras serves in a regulatory capacity, and has adopted standards similar to those in the North Sea.

United States

The United States has enacted an extensive regulatory and liability regime for the protection and cleanup of the environment from oil spills, including discharges of oil cargoes, bunker fuels or lubricants, primarily through the Oil Pollution Act of 1990 (or OPA 90 ) and the Comprehensive Environmental Response, Compensation and Liability Act (or CERCLA ). OPA 90 affects all owners, bareboat charterers, and operators whose vessels trade to the United States or its territories or possessions or whose vessels operate in United States waters, which include the U.S. territorial sea and 200-mile exclusive economic zone around the United States. CERCLA applies to the discharge of “hazardous substances” rather than “oil” and imposes strict joint and several liability upon the owners, operators or bareboat charterers of vessels for cleanup costs and damages arising from discharges of hazardous substances. We believe that petroleum products and LNG and LPG should not be considered hazardous substances under CERCLA, but additives to oil or lubricants used on LNG or LPG carriers and other vessels might fall within its scope.

Under OPA 90, vessel owners, operators and bareboat charterers are “responsible parties” and are jointly, severally and strictly liable (unless the oil spill results solely from the act or omission of a third party, an act of God or an act of war and the responsible party reports the incident and reasonably cooperates with the appropriate authorities) for all containment and cleanup costs and other damages arising from discharges or threatened discharges of oil from their vessels. These other damages are defined broadly to include:

• natural resources damages and the related assessment costs;

• real and personal property damages;

• net loss of taxes, royalties, rents, fees and other lost revenues;

• lost profits or impairment of earning capacity due to property or natural resources damage;

• net cost of public services necessitated by a spill response, such as protection from fire, safety or health hazards; and

• loss of subsistence use of natural resources.

OPA 90 limits the liability of responsible parties in an amount it periodically updates. The liability limits do not apply if the incident was proximately caused by violation of applicable U.S. federal safety, construction or operating regulations, including IMO conventions to which the United States is a signatory, or by the responsible party’s gross negligence or willful misconduct, or if the responsible party fails or refuses to report the incident or to cooperate and assist in connection with the oil removal activities. Liability under CERCLA is also subject to limits unless the incident is caused by gross negligence, willful misconduct or a violation of certain regulations. We currently maintain for each of our vessel’s pollution liability coverage in the maximum coverage amount of $1 billion per incident. A catastrophic spill could exceed the coverage available, which could harm our business, financial condition and results of operations.

Under OPA 90, with limited exceptions, all newly built or converted tankers delivered after January 1, 1994 and operating in U.S. waters must be double-hulled. All of our tankers are double-hulled.

OPA 90 also requires owners and operators of vessels to establish and maintain with the United States Coast Guard (or Coast Guard ) evidence of financial responsibility in an amount at least equal to the relevant limitation amount for such vessels under the statute. The Coast Guard has implemented regulations requiring that an owner or operator of a fleet of vessels must demonstrate evidence of financial responsibility in an amount sufficient to cover the vessel in the fleet having the greatest maximum limited liability under OPA 90 and CERCLA. Evidence of financial responsibility may be demonstrated by insurance, surety bond, self-insurance, guaranty or an alternate method subject to approval by the Coast Guard. Under the self-insurance provisions, the shipowner or operator must have a net worth and working capital, measured in assets located in the United States against liabilities located anywhere in the world, that exceeds the applicable amount of financial responsibility. We have complied with the Coast Guard regulations by using self-insurance for certain vessels and obtaining financial guaranties from a third party for the remaining vessels. If other vessels in our fleet trade into the United States in the future, we expect to obtain guaranties from third-party insurers.

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OPA 90 and CERCLA permit individual U. S. states to impose their own liability regimes with regard to oil or hazardous substance pollution incidents occurring within their boundaries, and some states have enacted legislation providing for unlimited strict liability for spills. Several coastal states, such as California, Washington and Alaska require state-specific evidence of financial responsibility and vessel response plans. We intend to comply with all applicable state regulations in the ports where our vessels call.

Owners or operators of vessels, including tankers operating in U.S. waters, are required to file vessel response plans with the Coast Guard, and their tankers are required to operate in compliance with their Coast Guard approved plans. Such response plans must, among other things:

• address a “worst case” scenario and identify and ensure, through contract or other approved means, the availability of necessary private response resources to respond to a “worst case discharge”;

• describe crew training and drills; and

• identify a qualified individual with full authority to implement removal actions.

We have filed vessel response plans with the Coast Guard and have received its approval of such plans. In addition, we conduct regular oil spill response drills in accordance with the guidelines set out in OPA 90. The Coast Guard has announced it intends to propose similar regulations requiring certain vessels to prepare response plans for the release of hazardous substances.

OPA 90 and CERCLA do not preclude claimants from seeking damages resulting from the discharge of oil and hazardous substances under other applicable law, including maritime tort law. Such claims could include attempts to characterize the transportation of LNG or LPG aboard a vessel as an ultra-hazardous activity under a doctrine that would impose strict liability for damages resulting from that activity. The application of this doctrine varies by jurisdiction.

The U.S. Clean Water Act also prohibits the discharge of oil or hazardous substances in U.S. navigable waters and imposes strict liability in the form of penalties for unauthorized discharges. The Clean Water Act imposes substantial liability for the costs of removal, remediation and damages and complements the remedies available under OPA 90 and CERCLA discussed above.

Our vessels that discharge certain effluents, including ballast water, in U.S. waters must obtain a Clean Water Act permit from the Environmental Protection Agency (or EPA) titled the “Vessel General Permit” and comply with a range of effluent limitations, best management practices, reporting, inspections and other requirements. The current Vessel General Permit was issued in December 2008 and expires on December 19, 2013. A new Vessel General Permit was issued in March 2013 and will become effective on December 19, 2013. In addition to the ballast water best management practices required under the 2008 Vessel General Permit, the 2013 Vessel General Permit contains numeric technology-based ballast water effluent limitations that will apply to certain commercial vessels with ballast water tanks. For certain existing vessels, the EPA has adopted a staggered implementation schedule to require vessels to meet the ballast water effluent limitations by the first drydocking after January 1, 2014 or January 1, 2016, depending on the vessel size. Vessels that are constructed after December 1, 2013 are subject to the ballast water numeric effluent limitations immediately upon the effective date of the 2013 Vessel General Permit.

Since 2009, several environmental groups and industry associations have filed challenges in U.S. federal court to the EPA’s issuance of the Vessel General Permit. The EPA issued a final revised Vessel General Permit in March 2013 with an effective date of December 19, 2013.

Greenhouse Gas Regulation

In February 2005, the Kyoto Protocol to the United Nations Framework Convention on Climate Change (or the Kyoto Protocol ) entered into force. Pursuant to the Kyoto Protocol, adopting countries are required to implement national programs to reduce emissions of greenhouse gases. In December 2009, more than 27 nations, including the United States, entered into the Copenhagen Accord. The Copenhagen Accord is non-binding, but is intended to pave the way for a comprehensive, international treaty on climate change. The IMO is evaluating various mandatory measures to reduce greenhouse gas emissions from international shipping, which may include market-based instruments or a carbon tax. The EU also has indicated that it intends to propose an expansion of an existing EU emissions trading regime to include emissions of greenhouse gases from vessels, and individual countries in the EU may impose additional requirements. In the United States, the EPA issued an “endangerment finding” regarding greenhouse gases under the Clean Air Act. While this finding in itself does not impose any requirements on our industry, it authorizes the EPA to regulate directly greenhouse gas emissions through a rule-making process. In addition, climate change initiatives are being considered in the United States Congress and by individual states. Any passage of new climate control legislation or other regulatory initiatives by the IMO, EU, the United States or other countries or states where we operate that restrict emissions of greenhouse gases could have a significant financial and operational impact on our business that we cannot predict with certainty at this time.

Vessel Security

The ISPS was adopted by the IMO in December 2002 in the wake of heightened concern over worldwide terrorism and became effective on July 1, 2004. The objective of ISPS is to enhance maritime security by detecting security threats to ships and ports and by requiring the development of security plans and other measures designed to prevent such threats. Each of the existing vessels in our fleet currently complies with the requirements of ISPS and Maritime Transportation Security Act of 2002 (U.S. specific requirements) and regularly exercise these plans to ensure efficient use and familiarity by all involved.

C. Organizational Structure

Our organizational structure includes, among others, our interests in Teekay Offshore, Teekay LNG and Teekay Tankers, which are our publicly listed subsidiaries. We created Teekay Offshore and Teekay LNG primarily to hold our assets that generate long-term fixed-rate cash flows. The strategic rationale for establishing these two limited partnerships was to:

• illuminate higher value of fixed-rate cash flows to Teekay investors;

• realize advantages of a lower cost of equity when investing in new offshore or LNG projects; and

• enhance returns to Teekay through fee-based revenue and ownership of the limited partnership’s incentive distribution rights, which entitle the holder to disproportionate distributions of available cash as cash distribution levels to unit holders increase.

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We also established Teekay Offshore, Teekay LNG and Teekay Tankers to increase our access to capital to grow each of our businesses in the offshore, LNG, and conventional tanker markets.

The following chart provides an overview of our organizational structure as at March 1, 2013. Please read Exhibit 8.1 to this Annual Report for a list of our significant subsidiaries as at March 1, 2013.

(1) The partnership is controlled by its general partner. Teekay Corporation has a 100% beneficial ownership in the general partner. However in certain limited cases, approval of a majority or supermajority of the common unit holders is required to approve certain actions.

(2) Proportion of voting power held is 53.1%.

(3) Including our 100% interest in Teekay Petrojarl.

Teekay LNG is a Marshall Islands limited partnership formed by us in 2005 as part of our strategy to expand our operations in the LNG and LPG shipping sectors. Teekay LNG provides LNG, LPG and crude oil marine transportation service under long-term, fixed-rate contracts with major energy and utility companies. As of December 31, 2012, Teekay LNG operated a fleet of 27 LNG carriers, five LPG carriers, 10 conventional tankers and one product tanker. Teekay LNG’s ownership interests in these vessels range from 33% to 100%.

Teekay Offshore is a Marshall Islands limited partnership formed by us in 2006 as part of our strategy to expand our operations in the offshore oil marine transportation, processing and storage sectors. As of December 31, 2012, Teekay Offshore owned and operated a fleet of 38 shuttle tankers (including four chartered-in vessels and four newbuildings), five FSO units, seven conventional Aframax tankers and three FPSO units. Teekay Offshore’s ownership interests in its owned vessels range from 50% to 100%. Most of Teekay Offshore’s vessels operate under long-term, fixed-rate contracts. Pursuant to an omnibus agreement we entered into in connection with Teekay Offshore’s initial public offering in 2006, we have agreed to offer to Teekay Offshore FPSO units that are servicing contracts in excess of three years in length.

In December 2007, we added Teekay Tankers to our structure. Teekay Tankers is a Marshall Islands corporation formed by us to facilitate the growth of our conventional tanker business. As of December 31, 2012, Teekay Tankers owned a fleet of 12 double-hull Aframax tankers, ten double-hull Suezmax tankers, six product tankers, one VLCC newbuilding and one in-chartered Aframax, all of which trade either in the spot tanker market or under short- or medium-term, fixed-rate time-charter contracts. Teekay Tankers owns 100% of its fleet, other than a 50% interest in the VLCC. Teekay Tankers’ primary objective is to grow through the acquisition of conventional tanker assets from third parties and from us. Through a wholly-owned subsidiary, we provide Teekay Tankers with commercial, technical, administrative, and strategic services under a long-term management agreement. In exchange, Teekay Tankers has agreed to pay us both a market-based fee and a performance fee under certain circumstances to motivate us to increase Teekay Tankers’ cash available for distribution to its stockholders.

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We entered into an omnibus agreement with Teekay LNG, Teekay Offshore and related parties governing, among other things, when we, Teekay LNG, and Teekay Offshore may compete with each other and certain rights of first offer on LNG carriers, oil tankers, shuttle tankers, FSO units and FPSO units. In addition, we entered into a non-competition agreement with Teekay Tankers, which provides Teekay Tankers with a right of first refusal to participate in any future conventional crude oil tanker and product tanker opportunities developed by us for a period of three years from June 2012.

D. Properties

Other than our vessels, we do not have any material property.

E. Taxation of the Company

The following discussion is a summary of the principal tax laws applicable to us. The following discussion of tax matters, as well as the conclusions regarding certain issues of tax law that are reflected in such discussion, are based on current law. No assurance can be given that changes in or interpretation of existing laws will not occur or will not be retroactive or that anticipated future factual matters and circumstances will in fact occur. Our views have no binding effect or official status of any kind, and no assurance can be given that the conclusions discussed below would be sustained if challenged by taxing authorities.

United States Taxation

The following discussion is based upon the provisions of the Internal Revenue Code of 1986, as amended (or the Code), legislative history, applicable U.S. Treasury Regulations (or Treasury Regulations), judicial authority and administrative interpretations, all as in effect on the date of this Annual Report, and which are subject to change, possibly with retroactive effect, or are subject to different interpretations. Changes in these authorities may cause the tax consequences to vary substantially from the consequences described below.

Taxation of Operating Income. A significant portion of our gross income will be attributable to the transportation of crude oil and related products. For this purpose, gross income attributable to transportation (or Transportation Income) includes income derived from, or in connection with, the use (or hiring or leasing for use) of a vessel to transport cargo, or the performance of services directly related to the use of any vessel to transport cargo, and thus includes both time-charter and bareboat charter income.

Transportation Income that is attributable to transportation that begins or ends, but that does not both begin and end, in the United States (or U.S. Source International Transportation Income) will be considered to be 50% derived from sources within the United States. Transportation Income attributable to transportation that both begins and ends in the United States (or U.S. Source Domestic Transportation Income) will be considered to be 100%derived from sources within the United States. Transportation Income attributable to transportation exclusively between non-U.S. destinations will be considered to be 100% derived from sources outside the United States. Transportation Income derived from sources outside the United States generally will not be subject to U.S. federal income tax.

We believe that we have not earned any U.S. Source Domestic Transportation Income, and we except that we will not earn any such income in future years. However, certain of our subsidiaries which have made special U.S. tax elections to be treated as partnerships or disregarded as entities separate from us for U.S. federal income tax purposes are potentially engaged in activities which could give rise to U.S. Source International Transportation Income. Unless the exemption from tax under Section 883 of the Code (or the Section 883 Exemption) applies, our U.S. Source International Transportation Income generally will be subject to U.S. federal income taxation under either the net basis tax and the branch profits tax or the 4% gross basis tax, all of which are discussed below. Certain of our other subsidiaries also are engaged in activities which could give rise to U.S. Source International Transportation Income and rely on our ability to claim exemption under the Section 883 Exemption.

The Section 883 Exemption. In general, the Section 883 Exemption provides that if a non-U.S. corporation satisfies the requirements of Section 883 of the Code and the Treasury Regulations thereunder (or the Section 883 Regulations), it will not be subject to the net basis and branch profits taxes or 4% gross basis tax described below on its U.S. Source International Transportation Income. As discussed below, we believe the Section 883 Exemption will apply and we will not be taxed on our U.S. Source International Transportation Income. The Section 883 Exemption does not apply to U.S. Source Domestic Transportation Income.

A non-U.S. corporation will qualify for the Section 883 Exemption if, among other things, it is organized in a jurisdiction outside the United States that grants an equivalent exemption from tax to corporations organized in the United States (or an Equivalent Exemption), it meets one of three ownership tests described in the Section 883 Regulations (or the Ownership Test), and it meets certain substantiation, reporting and other requirements (or the Substantiation Requirements).

We are organized under the laws of the Republic of The Marshall Islands. The U.S. Treasury Department has recognized the Republic of The Marshall Islands as a jurisdiction that grants an Equivalent Exemption. We also believe that we will be able to satisfy the Substantiation Requirements necessary to qualify for the Section 883 Exemption. Consequently, our U.S. Source International Transportation Income (including for this purpose, any such income earned by our subsidiaries that have properly elected to be treated as partnerships or disregarded as entities separate from us for U.S. federal income tax purposes) will be exempt from U.S. federal income taxation provided we satisfy the Ownership Test. We believe that we should satisfy the Ownership Test because our stock is primarily and regularly traded on an established securities market in the United States within the meaning of Section 883 of the Code and the Section 883 Regulations. We can give no assurance, however, that changes in the ownership of our stock subsequent to the date of this report will permit us to continue to qualify for the Section 883 exemption.

The Net Basis Tax and Branch Profits Tax. If we earn U.S. Source International Transportation Income and the Section 883 Exemption does not apply, such income may be treated as effectively connected with the conduct of a trade or business in the United States (or Effectively Connected Income) if we have a fixed place of business in the United States and substantially all of our U.S. Source International Transportation Income is attributable to regularly scheduled transportation or, in the case of income derived from bareboat charters, is attributable to a fixed place of business

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in the United States. Based on our current operations, none of our potential U.S. Source International Transportation Income is attributable to regularly scheduled transportation or is derived from bareboat charters attributable to a fixed place of business in the United States. As a result, we do not anticipate that any of our U.S. Source International Transportation Income will be treated as Effectively Connected Income. However, there is no assurance that we will not earn income pursuant to regularly scheduled transportation or bareboat charters attributable to a fixed place of business in the United States in the future, which would result in such income being treated as Effectively Connected Income.

U.S. Source Domestic Transportation Income generally will be treated as Effectively Connected Income. However, we do not anticipate that any of our income has or will be U.S. Source Domestic Transportation Income.

Any income we earn that is treated as Effectively Connected Income would be subject to U.S. federal corporate income tax (the highest statutory rate currently is 35%). In addition, if we earn income that is treated as Effectively Connected Income, a 30% branch profits tax imposed under Section 884 of the Code generally would apply to such income, and a branch interest tax could be imposed on certain interest paid or deemed paid by us.

On the sale of a vessel that has produced Effectively Connected Income, we could be subject to the net basis corporate income tax and to the 30% branch profits tax with respect to our gain not in excess of certain prior deductions for depreciation that reduced Effectively Connected Income. Otherwise, we would not be subject to U.S. federal income tax with respect to gain realized on the sale of a vessel, provided the sale is considered to occur outside of the United States under U.S. federal income tax principles.

The 4% Gross Basis Tax. If the Section 883 Exemption does not apply and the net basis tax does not apply, we would be subject to a 4% U.S. federal income tax on the U.S. source portion of our gross U.S. Source International Transportation Income, without benefit of deductions. For 2013, we estimate that, if the Section 883 Exemption and the net basis tax did not apply, the U.S. federal income tax on such U.S. Source International Transportation Income would be approximately $1.5 million. In addition, we estimate that certain of our subsidiaries that are unable to claim the Section 883 Exemption were subject to less than $400,000 in the aggregate of U.S. federal income tax on the U.S. source portion of their U.S. Source International Transportation Income for 2013 and we estimate that these subsidiaries will be subject to less than $400,000 in the aggregate of U.S. federal income tax on the U.S. source portion of their U.S. Source International Transportation Income in subsequent years. The amount of such tax for which we or our subsidiaries may be liable for in any year will depend upon the amount of income we earn from voyages into or out of the United States in such year, however, which is not within our complete control

Marshall Islands Taxation

We believe that neither we nor our subsidiaries will be subject to taxation under the laws of the Marshall Islands, or that distributions by our subsidiaries to us will be subject to any taxes under the laws of the Marshall Islands.

Other Taxation

We and our subsidiaries are subject to taxation in certain non- U.S. jurisdictions because we or our subsidiaries are either organized, or conduct business or operations, in such jurisdictions. We intend that our business and the business of our subsidiaries will be conducted and operated in a manner that minimizes taxes imposed upon us and our subsidiaries. However, we cannot assure this result as tax laws in these or other jurisdictions may change or we may enter into new business transactions relating to such jurisdictions, which could affect our tax liability. Please read “Item 18. Financial Statements: Note 21—Income Taxes.”

Item 4A. Unresolved Staff Comments

None.

Item 5. Operating and Financial Review and Prospects

The following discussion should be read in conjunction with the financial statements and notes thereto appearing elsewhere in this report.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

Teekay Corporation (or Teekay) is a leading provider of international crude oil and gas marine transportation services and we also offer offshore oil production, storage and offloading services, primarily under long-term, fixed-rate contracts. Over the past decade, we have undergone a major transformation from being primarily an owner of ships in the cyclical spot tanker business to being a growth-oriented asset manager in the “Marine Midstream” sector. This transformation has included our expansion into the liquefied natural gas (or LNG) and liquefied petroleum gas (or LPG) shipping sectors through our publicly listed subsidiary Teekay LNG Partners L.P. (or Teekay LNG), further growth of our operations in the offshore production, storage and transportation sector through our publicly listed subsidiary Teekay Offshore Partners L.P. (or Teekay Offshore) and through our 100% ownership interest in Teekay Petrojarl AS (or Teekay Petrojarl), and the continuation of our conventional tanker business through our publicly listed subsidiary Teekay Tankers Ltd. (or Teekay Tankers). We are responsible for managing and operating a fleet of approximately 170 liquefied gas, offshore, and conventional tanker assets with a combined carrying value of over $11 billion. With offices in 16 countries and approximately 6,400 seagoing and shore-based employees, Teekay provides a comprehensive set of marine services to the world’s leading oil and gas companies, and its reputation for safety, quality and innovation has earned it a position with its customers as The Marine Midstream Company.

SIGNIFICANT DEVELOPMENTS IN 2012 AND EARLY 2013

Sale of Vessels to Teekay Tankers

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In June 2012, we sold to Teekay Tankers a fleet of 13 double-hull conventional oil and product tankers and related time-charter contracts, debt facilities and other assets and rights, for an aggregate purchase price of approximately $454.2 million. As partial consideration for the sale, we received $25 million worth of newly issued shares of Teekay Tankers’ Class A common stock, issued at a price of $5.60 per share, and the remaining amount was settled through a combination of a cash payment to us and the assumption by Teekay Tankers of existing debt secured by the acquired vessels. As a result, our economic interest in Teekay Tankers increased from approximately 20.4% to approximately 25.1% and our voting interest as a result of our combined ownership of Class A and Class B shares increased from approximately 51% to approximately 53%. As part of this transaction, we entered into a non-competition agreement with Teekay Tankers, which provides Teekay Tankers with a right of first refusal to participate in any future conventional crude oil tanker and product tanker opportunities developed by us for a period of three years from the closing date of the transaction.

Acquisition of LNG carriers by Teekay LNG

In February 2012, Teekay LNG and the Marubeni Corporation (or Marubeni) acquired, through a joint venture (or the Teekay LNG-Marubeni Joint Venture), 100% ownership interests in six liquefied natural gas (or LNG) carriers (or the MALT LNG Carriers) from Denmark-based A.P. Moeller-Maersk A/S (or Maersk) for an aggregate purchase price of approximately $1.3 billion. Teekay LNG and Marubeni have 52% and 48% respective economic interests, but share control of the Teekay LNG-Marubeni Joint Venture. Four of the six MALT LNG Carriers are currently operating under long-term, fixed-rate time-charter contracts, with an average remaining firm contract period of approximately 17 years, plus extension options. The other two vessels are currently operating under medium-term, fixed-rate time-charters with an average remaining firm contract period of approximately four years. Since control of the Teekay LNG-Marubeni Joint Venture is shared jointly between Teekay LNG and Marubeni, Teekay LNG has accounted for the Teekay LNG-Marubeni Joint Venture using the equity method.

The Teekay LNG-Marubeni Joint Venture financed approximately $1.06 billion of the purchase price for the MALT LNG Carriers with secured loan facilities, and an aggregate $266 million from equity contributions from Teekay LNG and Marubeni. Teekay LNG agreed to guarantee Teekay LNG’s 52% share of the secured loan facilities of the Teekay LNG-Marubeni Joint Venture and as a result, deposited $30 million in a restricted cash account as security. Teekay LNG’s 52% share of the equity contribution was approximately $138 million. Teekay LNG financed this equity contribution by drawing on its existing credit facilities. Teekay provides technical management of the acquired vessels.

Recent Offshore Business Developments

In November 2011, we agreed to acquire from Sevan Marine ASA (Sevan) the Voyageur Spirit (formerly known as the Sevan Voyageur) FPSO unit upon the completion of certain upgrades. In June 2012, we offered the Voyageur Spirit to Teekay Offshore for a purchase price of approximately $540 million. In September 2012, we entered into an agreement to sell, subject to certain conditions, the Voyageur Spirit to Teekay Offshore for such price following its commencement of operations under a long-term charter contract with E.ON Ruhrgas UK E&P Limited (or E.ON). Operations commenced under the charter in April 2013 after the FPSO unit produced “first oil” in the North Sea’s Huntington Field. The charter contract has an initial term of five years, with up to 10 one-year extension options exercisable by E.ON., subject to certain conditions. Teekay Offshore intends to pay the $540 million purchase price for the Voyageur Spirit through (a) the proceeds from its September 2012 equity public offering (b) the issuance by Teekay Offshore to us of $40 million of its common units (priced at the same price per unit to the public as units issued in the September 2012 public offering) and (c) assumption of a new $330 million debt facility secured by the asset. Conditions to the closing of Teekay Offshore’s acquisition of the unit include, among others, Teekay Offshore obtaining financing and that we have acquired the Voyageur Spirit and related assets pursuant to the terms of our acquisition agreement with Sevan. In February 2013, Teekay Offshore made a partial prepayment of $150.0 million to us in connection the acquisition of the Voyageur Spirit FPSO unit. We will pay Teekay Offshore interest at a rate of LIBOR plus a margin of 4.25% per annum on the prepaid funds. We are obligated to repay Teekay Offshore the full amount of the prepaid funds, plus accrued interest, if the acquisition does not close before April 30, 2013.

In January 2012, we sold the assets related to the Tiro and Sidon FPSO project, including the then partially constructed Cidade de Itajai FPSO unit, and the related customer contracts, to OOG-TKP FPSO GmbH & Co KG, a 50/50 joint venture between us and Odebrecht Oil & Gas S.A., for approximately $179 million. The joint venture financed the purchase price 80% with borrowings under a new $300 million debt facility secured by the FPSO unit and the balance with pro rata equity contributions by each of the joint venture partners. The FPSO unit was delivered from the shipyard in Singapore in November 2012 and was transitioned to Brazil. The FPSO unit achieved first oil in February 2013, at which time the unit commenced operations under a nine-year, fixed-rate time-charter contract with Petroleo Brasileiro S.A. (or Petrobras), with six additional one-year extension options exercisable by Petrobras. In April 2013, pursuant to our omnibus agreement with Teekay Offshore, Teekay LNG and others, we offered to Teekay Offshore our 50% interest in this FPSO project at our fully built-up cost.

In November 2012, Teekay Offshore agreed to acquire a 2010-built HiLoad Dynamic Positioning (DP) unit from Remora AS (or Remora), a Norway-based offshore marine technology company, for a total purchase price of approximately $55 million including modification costs. The HiLoad DP unit is a self-propelled dynamic positioning system that attaches to and keeps conventional tankers in position when loading from offshore installations. The transaction is subject to finalizing a ten-year time-charter contract with Petrobras in Brazil. The acquisition of the HiLoad DP unit is expected to be completed in the second quarter of 2013 and the unit is expected to commence operating at its full time-charter rate in early 2014 once modifications, delivery of the DP unit to Brazil, and operational testing have been completed. As part of the transaction, we have also agreed to invest approximately $4.4 million to acquire a 49.9% ownership interest in a recapitalized Remora. In addition, Teeky Offshore will enter into an agreement with Remora which will provide Teekay Offshore with the right of first refusal to acquire future HiLoad projects developed by Remora.

In January 2013, Teekay Offshore signed a letter of intent with Salamander Energy plc to supply an FSO unit in Asia for a firm charter period of ten years commencing in mid-2014. For this contract, Teekay Offshore intends to convert its 1993-built shuttle tanker the Navion Clipper into an FSO unit for an estimated cost of approximately $50 million. Teekay Offshore is in the process of finalizing the contract terms with the charterer.

Private Placement by Teekay Offshore

In April 2013, Teekay Offshore issued 2.06 million common units in a private placement to an institutional investor for proceeds of approximately $60.0 million, excluding the General Partner’s 2% proportionate capital contribution of $1.2 million. Upon completion of the private placement, Teekay Offshore had 83.8 million common units outstanding. Teekay Offshore will use the proceeds from the issuance of common units to partially finance the shipyard instalments for the four Suezmax newbuilding shuttle tankers that are scheduled for deliveries throughout 2013, and for general corporate purposes. As a result of this private placement, our ownership of Teekay Offshore was reduced to 28.7% (including our 2% general partner interest). We maintain control of Teekay Offshore by virtue of our control of the general partner and will continue to consolidate the subsidiary.

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Public Offering of Preferred Units by Teekay Offshore

In April 2013, Teekay Offshore issued 6.0 million preferred units in a public offering for net proceeds of $144.9 million, representing a new class of limited partner interests. Teekay Offshore expects to use the net proceeds from the public offering for general corporate purposes, including the funding of newbuilding installments, capital conversion projects and the acquisitions of vessels we may offer to Teekay Offshore. Pending the application of funds for these purposes, Teekay Offshore expects to repay a portion of its outstanding debt under two of its revolving credit facilities.

OTHER SIGNIFICANT PROJECTS AND DEVELOPMENTS

Four Long Range 2 Product Tanker Newbuildings

In April 2013, Teekay Tankers entered into agreement with STX Offshore & Shipbuilding Co., Ltd (or STX) of South Korea for the construction of four, fuel-efficient 113,000 dead-weight tonne (or dwt) Long Range 2 (or LR2) product tanker newbuidings for a fully built up cost of approximately $47 million each. The agreement with STX also includes fixed-price options for the construction up to 12 additional LR2 newbuildings, which options expire between October 2013 and October 2014. Upon delivery, it is expected that the four vessels will operate in our Taurus Tankers LR2 Pool. Teekay Tankers intends to finance the installment payments with its existing liquidity and expects to secure long-term debt financing for the four vessels prior to their scheduled deliveries in late-2015 and early-2016. Please read “Item 18 – Financial Statements: Note 25 (c) – Subsequent Events.”

Exmar LPG Joint Venture

On February 12, 2013, Teekay LNG entered into a joint venture agreement with Belgium-based Exmar NV (or Exmar) to own and charter-in liquefied petroleum gas (or LPG) carriers with a primary focus on the mid-size gas carrier segment. The joint venture entity, called Exmar LPG BVBA, took economic effect as of November 1, 2012 and includes 16 owned LPG carriers (including four newbuildings scheduled for delivery in 2014) and five chartered-in LPG carriers. In addition, the joint venture recently ordered another four medium-size gas carrier newbuildings with deliveries scheduled between 2015 and 2016, with options to order up to four additional vessels, which brings the total fleet size of Exmar LPG BVBA to 25 vessels, excluding options. For its 50% ownership interest in the joint venture, including newbuilding payments made prior to the November 1, 2012 economic effective date of the joint venture, Teekay LNG invested approximately $134 million of equity and assumed approximately $108 million of its pro rata share of the existing debt and lease obligations as of the economic effective date, secured by certain vessels in the Exmar LPG BVBA fleet. Exmar will continue to commercially and technically manage and operate the vessels. Since control of Exmar LPG BVBA will be shared jointly between Exmar and Teekay LNG, Teekay LNG expects to account for Exmar LPG BVBA using the equity method.

Two LNG Newbuildings

In December 2012, Teekay LNG entered into an agreement with Daewoo Shipbuilding & Marine Engineering Co., Ltd. (or DSME) of South Korea for the construction of two 173,400 cubic meter LNG carrier newbuildings, with options to order up to three additional vessels. Teekay LNG intends to secure long-term contract employment for both vessels prior to their scheduled deliveries in the first half of 2016. The newbuildings will be constructed with M-type, Electronically Controlled, Gas Injection (or MEGI) twin engines, which are expected to be significantly more fuel-efficient and have lower emission levels than other engines currently being utilized in LNG shipping. The contract with DSME includes a favorable installment payment schedule, with the majority of the purchase price due upon delivery. Teekay LNG paid $38.6 million on the first installment payment and intends to finance the future installment payments during construction with a portion of its existing liquidity, which was approximately $495.0 million as of December 31, 2012. Teekay LNG expects to secure long-term debt financing for the two vessels prior to their scheduled delivery.

Storm Damage to Banff FPSO Unit

On December 7, 2011, the Petrojarl Banff FPSO unit (or Banff), which operates on the Banff field in the U.K. sector of the North Sea, suffered a severe storm event and sustained damage to its moorings, turret and subsea equipment, which necessitated the shutdown of production on the unit. Due to the damage, we declared force majeure under the customer contract on December 8, 2011 and the Banff FPSO unit commenced a period of off-hire which is currently expected to continue until the fourth quarter of 2013 while repairs are assessed and completed. We do not have off-hire insurance covering the Banff FPSO. After the repairs and upgrades are completed, the Banff FPSO unit is expected to resume production on the Banff field, where it is expected to remain under contract until the end of 2018.

We expect that repair costs to the Banff FPSO unit and equipment and costs associated with the emergency response to prevent loss or further damage during the December 7, 2011 storm event will be primarily reimbursed through our insurance coverage subject to a $750,000 deductible and the other terms and conditions of the applicable policies. In addition, we will also incur certain capital upgrade costs for the Banff FPSO unit and the Apollo Spirit related to upgrades to the mooring system required by the relevant regulatory authorities due in part to new metocean and environmental data and other safety considerations. The Apollo Spirit was operating on the Banff field as a storage tanker and is expected to return to the Banff field at the same time as the Banff FPSO. The total of these capital upgrade costs is expected to amount to approximately $90 million. The recovery of the capital upgrade costs from the charterer is subject to commercial negotiations or, failing agreement, the responsibility for these costs will be determined by an expedited arbitration procedure already agreed by the parties. Any capital upgrade costs not recovered from the charterer will be capitalized to the vessel cost.

Vessel Impairments

In 2012, 19 conventional tankers were written down to their estimated fair value using an appraised value in a substantial majority of the cases, resulting in a total write down of $405.3 million within the conventional tanker segment. This write down included ten Suezmax tankers ($335.0 million), seven Aframax tankers ($66.0 million), and two other conventional tankers ($4.3 million). When comparing seven of the ten Suezmax tankers to each other and when comparing four of the seven Aframax tankers to each other, the vessels have a similar age, had a similar carrying value and a similar estimated fair value, and are all being employed in the spot market or on short term time-charters. The total write down of $405.3 million includes $350.2 million from these eleven vessels. The primary factors that caused the write downs were a negative change in the outlook for the crude tanker market, a delay in the expected timing of a recovery of the crude tanker market as well as the expected discrimination impact from more fuel efficient vessels being constructed. One of the seven Aframax tankers was held for sale at December 31, 2012 and was subsequently sold in January 2013.

In 2012, four older shuttle tankers and one FSO unit were written down to their estimated fair value using an appraised value, resulting in a total write down of $28.8 million within the shuttle tanker and FSO segment. The write downs were the result of us entering into agreements in the fourth quarter of 2012 to sell two shuttle tankers and a change in the operating plans for the remaining vessels.

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IMPORTANT FINANCIAL AND OPERATIONAL TERMS AND CONCEPTS

We use a variety of financial and operational terms and concepts when analyzing our performance. These include the following:

Revenues. Revenues primarily include revenues from voyage charters, pool arrangements, time-charters accounted for under operating and direct financing leases, contracts of affreightment and FPSO contracts. Revenues are affected by hire rates and the number of days a vessel operates and the daily production volume on FPSO units. Revenues are also affected by the mix of business between time-charters, voyage charters, contracts of affreightment and vessels operating in pool arrangements. Hire rates for voyage charters are more volatile, as they are typically tied to prevailing market rates at the time of a voyage.

Voyage Expenses. Voyage expenses are all expenses unique to a particular voyage, including any bunker fuel expenses, port fees, cargo loading and unloading expenses, canal tolls, agency fees and commissions. Voyage expenses are typically paid by the customer under time-charters and FPSO contracts and by us under voyage charters and contracts of affreightment.

Net Revenues. Net revenues represent revenues less voyage expenses. Because the amount of voyage expenses we incur for a particular charter depends upon the form of the charter, we use net revenues to improve the comparability between periods of reported revenues that are generated by the different forms of charters and contracts. We principally use net revenues, a non-GAAP financial measure, because it provides more meaningful information to us about the deployment of our vessels and their performance than revenues, the most directly comparable financial measure under United States generally accepted accounting principles (or GAAP).

Vessel Operating Expenses. Under all types of charters and contracts for our vessels, except for bareboat charters, we are responsible for vessel operating expenses, which include crewing, repairs and maintenance, insurance, stores, lube oils and communication expenses. The two largest components of our vessel operating expenses are crew costs and repairs and maintenance. We expect these expenses to increase as our fleet matures and to the extent that it expands.

Income from Vessel Operations. To assist us in evaluating our operations by segment, we analyze our income from vessel operations for each segment, which represents the income we receive from the segment after deducting operating expenses, but prior to the deduction of interest expense, realized and unrealized gains (losses) on non-designated derivative instruments, income taxes, foreign currency and other income and losses.

Dry docking. We must periodically dry dock each of our vessels for inspection, repairs and maintenance and any modifications to comply with industry certification or governmental requirements. Generally, we dry dock each of our vessels every two and a half to five years, depending upon the type of vessel and its age. In addition, a shipping society classification intermediate survey is performed on our LNG carriers between the second and third year of the five-year dry docking period. We capitalize a substantial portion of the costs incurred during dry docking and for the survey and amortize those costs on a straight-line basis from the completion of a dry docking or intermediate survey over the estimated useful life of the dry dock. We expense as incurred costs for routine repairs and maintenance performed during dry dockings that do not improve or extend the useful lives of the assets and annual class survey costs for our FPSO units. The number of dry dockings undertaken in a given period and the nature of the work performed determine the level of dry docking expenditures.

Depreciation and Amortization. Our depreciation and amortization expense typically consists of:

• charges related to the depreciation and amortization of the historical cost of our fleet (less an estimated residual value) over the estimated useful lives of our vessels;

• charges related to the amortization of dry docking expenditures over the useful life of the dry dock; and

• charges related to the amortization of intangible assets, including the fair value of the time-charters, contracts of affreightment and customer relationships where amounts have been attributed to those items in acquisitions; these amounts are amortized over the period in which the asset is expected to contribute to our future cash flows.

Time-Charter Equivalent (TCE) Rates. Bulk shipping industry freight rates are commonly measured in the shipping industry at the net revenues level in terms of “time-charter equivalent” (or TCE) rates, which represent net revenues divided by revenue days.

Revenue Days. Revenue days are the total number of calendar days our vessels were in our possession during a period, less the total number of off-hire days during the period associated with major repairs, dry dockings or special or intermediate surveys. Consequently, revenue days represent the total number of days available for the vessel to earn revenue. Idle days, which are days when the vessel is available for the vessel to earn revenue, yet is not employed, are included in revenue days. We use revenue days to explain changes in our net revenues between periods.

Calendar-Ship-Days. Calendar-ship-days are equal to the total number of calendar days that our vessels were in our possession during a period. As a result, we use calendar-ship-days primarily in explaining changes in vessel operating expenses, time-charter hire expense and depreciation and amortization.

Restricted Cash Deposits. Under the terms of the tax leases for three of our LNG carriers, we are required to have on deposit with financial institutions an amount of cash that, together with interest earned on the deposit, will equal the remaining amounts owing under the leases, including the obligations to purchase the LNG carriers at the end of the lease periods, where applicable. During vessel construction, however, the amount of restricted cash approximates the accumulated vessel construction costs. In December 2011, the capital lease on one of the four LNG carriers expired and the purchase obligation was fully funded with restricted cash deposits. These cash deposits are restricted to being used for capital lease payments and have been fully funded with term loans and loans from our joint venture partners. Please read “Item 18. Financial Statements: Note 10 – Capital Lease Obligations and Restricted Cash.”

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ITEMS YOU SHOULD CONSIDER WHEN EVALUATING OUR RESULTS

You should consider the following factors when evaluating our historical financial performance and assessing our future prospects:

• Our revenues are affected by cyclicality in the tanker markets. The cyclical nature of the tanker industry causes significant increases or decreases in the revenue we earn from our vessels, particularly those we trade in the spot market. This could affect the amount of dividends, if any, we pay on our common stock from period to period.

• Tanker rates also fluctuate based on seasonal variations in demand. Tanker markets are typically stronger in the winter months as a result of increased oil consumption in the Northern Hemisphere but weaker in the summer months as a result of lower oil consumption in the Northern Hemisphere and increased refinery maintenance. In addition, unpredictable weather patterns during the winter months tend to disrupt vessel scheduling, which historically has increased oil price volatility and oil trading activities in the winter months. As a result, revenues generated by our vessels have historically been weaker during the quarters ended June 30 and September 30, and stronger in the quarters ended December 31 and March 31.

• The size of our fleet continues to change. Our results of operations reflect changes in the size and composition of our fleet due to certain vessel deliveries, vessel dispositions and changes to the number of vessels we charter in. Please read “—Results of Operations” below for further details about vessel dispositions, deliveries and vessels chartered in. Due to the nature of our business, we expect our fleet to continue to fluctuate in size and composition.

• Vessel operating and other costs are facing industry-wide cost pressures. The shipping industry continues to experience a global manpower shortage of qualified seafarers due to growth in the world fleet, which in recent years has resulted in upward pressure on manning costs. Lately, the gap between demand and supply of officers has narrowed, which has allowed at least on a temporary basis, for wages in certain sectors to stabilize or have smaller increases than has previously been the case. Going forward, there may be increases in crew compensation as vessel and officer supply dynamics continue to change. In addition, factors such as pressure on commodity and raw material prices, as well as changes in regulatory requirements could also contribute to operating expenditure increases. We continue to take action aimed at improving operational efficiencies, and to temper the effect of inflationary and other price escalations, however increases to operational costs are still likely to occur in the future.

• Our net income is affected by fluctuations in the fair value of our derivative instruments. Our cross currency and interest rate swap agreements and some of our foreign currency forward contracts are not designated as hedges for accounting purposes. Although we believe these derivative instruments are economic hedges, the changes in their fair value are included in our statements of loss as unrealized gains or losses on non-designated derivatives. The changes in fair value do not affect our cash flows or liquidity.

• The amount and timing of dry dockings of our vessels can affect our revenues between periods. Our vessels are off hire at various times due to scheduled and unscheduled maintenance. During 2012 and 2011 we incurred 358 and 617 off-hire days relating to dry docking, respectively. The financial impact from these periods of off-hire, if material, is explained in further detail below in “—Results of Operations”. Twenty-one of our vessels are scheduled for dry docking during 2013.

RESULTS OF OPERATIONS

In accordance with GAAP, we report gross revenues in our consolidated income statements and include voyage expenses among our operating expenses. However, ship-owners base economic decisions regarding the deployment of their vessels upon anticipated TCE rates, and industry analysts typically measure bulk shipping freight rates in terms of TCE rates. This is because under time-charter contracts and FPSO contracts the customer usually pays the voyage expenses, while under voyage charters and contracts of affreightment the ship-owner usually pays the voyage expenses, which typically are added to the hire rate at an approximate cost. Accordingly, the discussion of revenue below focuses on net revenues and TCE rates of our four reportable segments where applicable.

We manage our business and analyze and report our results of operations on the basis of four segments: the shuttle tanker and FSO segment, the FPSO segment, the liquefied gas segment, and the conventional tanker segment. In order to provide investors with additional information about our conventional tanker segment, we have divided this operating segment into the fixed-rate tanker sub-segment and the spot tanker sub-segment. Please read “Item 18. Financial Statements: Note 2—Segment Reporting.”

Year Ended December 31, 2012 versus Year Ended December 31, 2011

Shuttle Tanker and FSO Segment

Our shuttle tanker and floating storage and offtake (or FSO) segment (which includes our Teekay Shuttle and Offshore business unit) includes our shuttle tankers and FSO units. As at December 31, 2012, our shuttle tanker fleet consisted of 32 vessels that operate under fixed-rate contracts of affreightment, time charters and bareboat charters. Of the 32 shuttle tankers, six were owned through 50% owned subsidiaries of Teekay Offshore, three through a 67% owned subsidiary of Teekay Offshore and four were chartered-in by Teekay Offshore, with the remainder owned 100% by Teekay Offshore. Our FSO fleet consists of four vessels owned by Teekay Offshore that operate under fixed-rate time charters or fixed-rate bareboat charters. We have 100% ownership interests in these units. We also have four newbuilding shuttle tankers on order which are scheduled to deliver in mid-to late-2013. Please read “Item 18. Financial Statements: Note 16(a) – Commitments and Contingencies – Vessels Under Construction.” We use these vessels to provide transportation and storage services to oil companies operating offshore oil field installations, primarily in the North Sea and Brazil. Our shuttle tankers in this segment service the conventional spot market from time to time.

The following table presents our shuttle tanker and FSO segment’s operating results and compares its net revenues (which is a non-GAAP financial measure) to revenues, the most directly comparable GAAP financial measure. The following table also provides a summary of the changes in calendar-ship-days by owned and chartered-in vessels for our shuttle tanker and FSO segment:

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	Year Ended
	December 31
(in thousands of U.S. dollars, except calendar-ship-days and percentages)	2012		2011		% Change
Revenues		613,388		613,768		(0.1	)
Voyage expenses		104,382		97,743		6.8
Net revenues		509,006		516,025		(1.4	)
Vessel operating expenses		175,459		196,536		(10.7	)
Time-charter hire expense		56,989		74,478		(23.5	)
Depreciation and amortization		125,104		129,293		(3.2	)
General and administrative (1)		54,139		60,359		(10.3	)
Asset impairments		28,830		43,185		(33.2	)
Net loss on sale of vessels and equipment		1,112		171		550.3
Restructuring charges		652		5,351		(87.8	)
Income from vessel operations		66,721		6,652		903.0
Calendar-Ship-Days
Owned Vessels		12,262		12,114		1.2
Chartered-in Vessels		1,459		2,007		(27.3	)
Total		13,721		14,121		(2.8	)

(1) Includes direct general and administrative expenses and indirect general and administrative expenses allocated to the shuttle tanker and FSO segment based on estimated use of corporate resources. For further discussion, please read “Other Operating Results – General and Administrative Expenses.”

The average size of our shuttle tanker and FSO segment fleet decreased for the year ended December 31, 2012 compared to the prior year. The decrease was primarily due to the sale of the Navion Fennia in July 2012 and Navion Savonita in November 2012, the redelivery of one bareboat-in vessel to its owner in October 2011, decreased spot in-chartering of vessels, and the sale of the Karratha Spirit FSO unit in March 2011, partially offset by the delivery of two newbuilding shuttle tankers, the Peary Spirit and the Scott Spirit, in May 2011 and July 2011, respectively (or the 2011 Newbuilding Shuttle Tanker Acquisitions). Included in calendar-ship-days are two owned shuttle tankers which have been in lay-up since July 2011 and May 2012 following their redelivery to us upon termination of their time-charter-out contracts in March 2011 and April 2012.

Net Revenues. Net revenues decreased to $509.0 million for 2012, from $516.0 million for 2011, primarily due to:

• a decrease of $11.6 million due to the lay-up of two vessels since July 2011 and May 2012 following their redeliveries in March 2011 and April 2012 after completion of their time-charter agreements;

• a decrease of $3.6 million due to more repair off-hire days in our time-chartered-out fleet in 2012 as compared to 2011;

• a decrease of $3.2 million due to lower revenues related to the sale of the Karratha Spirit;

• a decrease of $3.1 million due to fewer opportunities to trade excess shuttle tanker capacity in the conventional spot tanker market and in short-term offshore projects due to decreased demand for conventional crude transportation; and

• a decrease of $2.3 million due to the dry docking of the Navion Saga during the third quarter of 2012;

partially offset by

• a net increase of $11.0 million due to an increase in our contract of affreightment fleet, and an increase in revenues in our time-chartered-out fleet from entering into new contracts and an increase in rates as provided in certain contracts, partially offset by fewer revenue days from the redelivery of six vessels to us in March 2011, July 2011, February 2012, April 2012, and two in November 2012 as they completed their time-charter-out agreements; and

• an increase of $5.5 million from customer-paid engineering studies completed to support our FSO tenders.

Vessel Operating Expenses. Vessel operating expenses decreased to $175.5 million for 2012, from $196.5 million for 2011, primarily due to:

• a decrease of $10.6 million relating to the lay-up of two of our shuttle tankers since July 2011 and May 2012 and the reduction of costs associated with the sale of two of our shuttle tankers in July 2012 and November 2012;

• a decrease of $7.1 million due to decrease in costs related to services and spares and the number of vessels dry docked. Certain repair and maintenance items are more efficient to complete while a vessel is in dry dock. Consequently, repair and maintenance costs will typically increase in periods when there is an increase in the number of vessels dry docked;

• a decrease of $5.9 million for crew changes and manning costs as compared to the same periods last year primarily from a change in crew composition and reduced helicopter usage;

• a decrease of $4.5 million relating to the redelivery of one of our bareboat in-chartered vessels to its owner in October 2011;

• a decrease of $1.8 million related to the sale of the Karratha Spirit in March 2011; and

• a decrease of $1.3 million relating to a decrease in start-up costs associated with less short-term offshore projects;

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partially offset by

• an increase of $7.3 million due to expenditures on projects completed to support our FSO tenders; and

• an increase of $4.3 million due to the 2011 Newbuilding Shuttle Tanker Acquisitions.

Time-Charter Hire Expense. Time-charter hire expense decreased to $57.0 million for 2012, from $74.5 million for 2011 primarily due to:

• decrease of $8.7 million due to the redelivery of one bareboat in-chartered vessel to its owner in October 2011; and

• decrease of $7.8 million due to decreased spot in-chartering of vessels as a result of increased capacity available from our owned fleet.

Depreciation and Amortization Expense. Depreciation and amortization expense decreased to $125.1 million for 2012, from $129.3 million for 2011, primarily related to sale of two shuttle tankers in 2012, lower depreciation relating to the impairment and write-down of two older shuttle tankers in 2011 to fair value and the write-down of the carrying value of the FSO unit Navion Saga to its fair value in December 2011, partially offset by accelerated depreciation related to a reduction of the estimated useful life of six older shuttle tankers as well as the 2011 Newbuilding Shuttle Tanker Acquisitions.

Asset Impairments. Asset impairments of vessels was $28.8 million for 2012, resulting from the impairment of four older shuttle tankers and one FSO unit. The write downs were the result of the Company entering into agreements in the fourth quarter of 2012 to sell two shuttle tankers and a change in the operating plans for the remaining vessels. Write down of vessels was $43.2 million for 2011, resulting from the impairment of three shuttle tankers, all of which were 20-years old in 2012, and one FSO unit. These vessels carrying values were written down to their estimated fair value.

Net loss on sale of vessels. Loss on sale of vessels was $1.1 million for 2012 relating to the sale of two 1992-built shuttle tankers. We sold one FSO unit in March 2011 which resulted in a loss of $0.2 million.

Restructuring Charges. Restructuring charges were $0.7 million for 2012, resulting from a reorganization of marine operations to create better alignment within the shuttle tanker business unit to create a reduced-cost organization going forward. The restructuring charges in the prior year were $5.4 million and related to the termination of employment of certain crew members following the sale of an FSO unit, Karratha Spirit and the termination of the time-charter for the shuttle tanker Basker Spirit.

FPSO Segment

Our floating, production, storage and offloading (or FPSO) segment (which includes our Teekay Petrojarl business unit) includes the FPSO units and other vessels used to service our FPSO contracts. As at December 31, 2012, in addition to the four 100% owned FPSO units and the three FPSO units owned by Teekay Offshore, the FPSO segment had one FPSO unit under construction, scheduled to deliver in the first half of 2014, a 50% interest in one FPSO unit which commenced its charter contract in February 2013 after achieving first oil, and accounted for one FPSO unit which will be acquired in the second quarter of 2013 as a variable interest entity (or VIE). We use these units and vessels to provide transportation, production, processing and storage services to oil companies operating offshore oil field installations. These services are typically provided under long-term fixed-rate time-charter contracts or FPSO service contracts. Historically, the utilization of FPSO units and other vessels in the North Sea is higher in the winter months, as favorable weather conditions in the summer months provide opportunities for repairs and maintenance to our offshore oil platforms, which generally reduce oil production.

The following table presents our FPSO segment’s operating results for 2012 and 2011 and also provides a summary of the calendar-ship-days for our FPSO segment:

	Years Ended December 31
(in thousands of U.S. dollars, except calendar-ship-days and percentages)	2012		2011			% Change
Revenues		581,215		464,810			25.0
Voyage expenses		232		—			100.0
Vessel operating expenses		331,124		242,332			36.6
Depreciation and amortization		135,413		96,915			39.7
General and administrative (1)		68,035		52,854			28.7
Gain on sale of vessels and equipment		—		(4,888	)		(100.0	)
Bargain purchase gain		—		(68,535	)		(100.0	)
Income from vessel operations		46,411		146,132			(68.2	)
Calendar-Ship-Days
Owned Vessels		3,660		2,982			22.7

(1) Includes direct general and administrative expenses and indirect general and administrative expenses allocated to the FPSO segment based on estimated use of corporate resources. For further discussion, please read “Other Operating Results – General and Administrative Expenses.”

The number of calendar days for our FPSO units for 2012 increased from last year due to our acquisition of the Hummingbird Spirit FPSO unit and the acquisition of Piranema Spirit FPSO unit by Teekay Offshore from Sevan during the fourth quarter of 2011 (or the Sevan Acquisitions). We agreed to acquire from Sevan the Voyageur Spirit upon completion of certain upgrades (which will be acquired in the second quarter of 2013). The Voyageur Spirit has been accounted for as a VIE since the fourth quarter of 2011 and does not have an impact on our calendar days. Please read “Item 18 – Financial Statements: Note 3(a) – Acquisitions – FPSO Units and Investment in Sevan Marine ASA.”

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Revenues. Revenues increased to $581.2 million for 2012, from $464.8 million for 2011 primarily due to:

• an increase of $161.4 million due to the Sevan Acquisitions;

• an increase of $20.8 million due to revenue recognized on the completion of a front end engineering and design study;

• an increase of $6.7 million due to the recovery of crew and manning costs. In 2011, these recoveries were reported on a net basis in vessel operating expenses; and

• an increase of $5.6 million due to increased rates on the Rio das Ostras FPSO unit and Petrojarl Varg FPSO unit in accordance with the annual contractual escalation adjustments;

partially offset by

• a decrease of $50.1 million due the weather-related incident in December 2011 with the Petrojarl Banff FPSO unit resulting in the unit being off hire during 2012;

• a decrease of $23.4 million due to a shutdown for Petrojarl Foinaven in mid-August 2012 and lower revenues associated with annual performance targets;

• a decrease of $3.5 million relating to payments during 2011 to us for services previously rendered to the charterer of the Rio das Ostras FPSO unit;

• a decrease of $3.5 million due to decreased incentives earned and lower production on the Petrojarl Varg and a planned maintenance shutdown during the second quarter of 2012; and

• a decrease of $2.0 million due to the strengthening of the U.S. Dollar against the Norwegian Kroner.

Vessel Operating Expenses. Vessel operating expenses increased to $331.1 million for 2012, from $242.3 million for 2011, primarily due to:

• an increase of $95.5 million due to the Sevan Acquisitions; and

• an increase of $20.8 million due to costs recognized on the completion of a Front End Engineering and Design study;

• an increase of $5.1 million due to the recovery of certain crew and manning costs, where the recovery is reported in revenue in 2012. In 2011, these recoveries were reported on a net basis in vessel operating expenses; and

• an increase of $2.7 million due to higher maintenance costs relating to the Petrojarl Varg during the third quarter of 2012;

partially offset by

• a decrease of $26.6 million due to the off-hire of the Petrojarl Banff FPSO unit as a result of the December 2011 weather-related incident;

• a decrease of $4.0 million due to the strengthening of the U.S. Dollar against the Norwegian Kroner compared to 2011;

• a decrease of $4.8 million due to repairs on the Rio das Ostras FPSO unit while on yard stay and higher consumables and spares during the first quarter of 2011 and lower crew and manning costs relating to its deployment to the field during the second quarter of 2011; and

• a decrease of $3.3 million due to lower repair and maintenance costs on the Petrojarl I FPSO unit.

Depreciation and Amortization Expense. Depreciation and amortization expense increased to $135.4 million for 2012, from $96.9 million for 2011 primarily due to the Sevan Acquisitions.

Gain on Sale of Vessels and Equipment. Gain on sale of vessels and equipment for 2011 relates to a gain on sale of equipment related to the Tiro and Sidon project.

Bargain purchase gain. In connection with the acquisition of FPSO units by us and Teekay Offshore from Sevan and our 40% equity investment in Sevan, we recognized a final bargain purchase gain on acquisition of $68.5 million. Please read “Item 18. Financial Statements—Note 3a: Acquisition of FPSO Units from and Investment in Sevan Marine ASA.”

Liquefied Gas Segment

Our liquefied gas segment (which includes our Teekay Gas Services business unit) consists of 27 liquefied natural gas (or LNG) (in which Teekay LNG’s interests ranged from 33% to 100%) and five liquefied petroleum gas (or LPG) carriers subject to long-term, fixed-rate time-charter contracts. Teekay LNG’s partial interests in LNG carriers included their 33% interest in the four Angola LNG Carriers, their 40% interest in Teekay Nakilat (III) Corporation, which owns the four RasGas 3 LNG Carriers, their 50% interest in their joint ventures with Exmar NV (or the Excalibur and Excelsior Joint Venture), which own two LNG carriers (or the Excalibur and Excelsior LNG Carriers), their 52% interest in the Teekay LNG-Marubeni Joint Venture, which owns the six MALT LNG Carriers, their 69% interest in the Teekay Tangguh Joint Venture (or Teekay BLT Corporation), which owns the Tangguh Hiri and the Tangguh Sago (or the Tangguh LNG Carriers), their 70% interest in Teekay Nakilat Corporation (or Teekay Nakilat), which is the lessee under 30-year capital lease arrangements relating to three LNG carriers (or the RasGas II LNG Carriers), their 99% interest in the

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Arctic Spirit and Polar Spirit LNG carriers (or the Kenai LNG Carriers) and their 99% interest in five LPG/Multigas carriers. The table below only includes 11 LNG carriers and five LPG carriers because it excludes the six MALT LNG Carriers, the four Angola LNG Carriers, the four RasGas 3 LNG Carriers and the Excalibur and Excelsior LNG Carriers, which are all accounted for under the equity method.

The following table presents our liquefied gas segment’s operating results and compares its net revenues (which is a non-GAAP financial measure) to revenues, the most directly comparable GAAP financial measure. The following table also provides a summary of the changes in calendar-ship-days by owned vessels for our liquefied gas segment:

	Year Ended
	December 31
(in thousands of U.S. dollars, except calendar-ship-days and percentages)	2012		2011		% Change
Revenues		286,237		272,041		5.2
Voyage expenses		283		4,862		(94.2	)
Net revenues		285,954		267,179		7.0
Vessel operating expenses		45,972		48,158		(4.5	)
Depreciation and amortization		69,064		63,641		8.5
General and administrative (1)		21,969		20,586		6.7
Income from vessel operations		148,949		134,794		10.5
Calendar-Ship-Days
Owned Vessels and Vessels under Direct Financing Lease		5,856		5,126		14.2

(1) Includes direct general and administrative expenses and indirect general and administrative expenses allocated to the liquefied gas segment based on estimated use of corporate resources. For further discussion, please read “Operating Results – General and Administrative Expenses.”

Our total calendar-ship-days increased by 14.2% for 2012, compared to 2011, primarily as a result of the delivery of two multigas carriers, the Norgas Unikum, on June 15, 2011, and the Norgas Vision, on October 17, 2011, and the delivery of an LPG carrier, the Norgas Camilla, on September 15, 2011 (collectively, the 2011 Gas Carrier Deliveries).

Net Revenues. Net revenues increased to $286.0 million for 2012, from $267.2 million for 2011, primarily due to:

• an increase of $12.4 million from the Arctic Spirit and Polar Spirit due to the increase in hire rates under new charter contracts signed in April 2011 and less off-hire of the vessels in 2012 compared to 2011;

• an increase of $9.8 million due to the 2011 Gas Carrier Deliveries;

• an increase of $1.6 million due to operating expense recovery adjustments under charter provisions and increases in the charter-hire rates for the Tangguh Hiri and Tangguh Sago at the beginning of 2012; and

• an increase of $0.8 million due to one additional calendar day during 2012;

partially offset by

• a decrease of $4.2 million due to the effect on our Euro-denominated revenues from the weakening of the Euro against the U.S. Dollar in 2012 compared to 2011;

• a decrease of $1.4 million due to the Hispania Spirit being off-hire for 21 days in the second quarter of 2012 for a scheduled dry docking; and

• a decrease of $0.5 million related to payments in 2012 and 2011 for delaying the scheduled dry docking if the Galicia Spirit in 2012 and the Catalunya Spirit in 2011.

Vessel Operating Expenses. Vessel operating expenses decreased to $46.0 million for 2012, from $48.2 million for 2011, primarily due to:

• a decrease of $1.5 million primarily due to the effect on our Euro-denominated crew manning expenses from the weakening of the Euro against the U.S. Dollar during 2012 compared to 2011 (a portion of our vessel operating expenses are denominated in Euros, which is primarily due to the nationality of our crew); and

• a decrease of $0.9 million due to the cancellation of loss of hire insurance on Tangguh Hiri and Tangguh Sago in the third quarter of 2011 and lower insurance premiums on certain LNG carriers.

Depreciation and Amortization. Depreciation and amortization increased to $69.1 million for 2012, from $63.6 million for 2011, primarily due to:

• an increase of $3.3 million primarily due to amortization of dry-dock expenditures incurred in 2011 and the first and second quarters of 2012; and

• an increase of $2.9 million due to the 2011 Gas Carrier Deliveries.

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Conventional Tanker Segment

Our conventional tanker segment consists of conventional crude oil and product tankers that (i) are subject to long-term, fixed-rate time-charter contracts (which have an original term of one year or more), (ii) operate in the spot tanker market, or (iii) are subject to time-charters or contracts of affreightment that are priced on a spot market basis or are short-term, fixed-rate contracts (which have an original term of less than one year).

a) Fixed-Rate Tanker Sub-Segment

Our fixed-rate tanker sub-segment, a subset of our conventional tanker segment (which includes our Teekay Gas Services, Teekay Shuttle Offshore and Teekay Tankers Services business units), includes conventional crude oil and product tankers on fixed-rate time charters with an original duration of more than one year. Teekay Tankers also has a 50% interest in a VLCC under construction that is scheduled for delivery in the second quarter of 2013, which will be accounted for under the equity basis. Upon delivery, this vessel will commence operation under a time-charter for a term of five years. Please read “Item 18 – Financial Statements: Note 16(b) – Commitments and Contingencies – Joint Ventures.”

The following table presents our fixed-rate tanker sub-segment’s operating results and compares its net revenues (which is a non-GAAP financial measure) to revenues, the most directly comparable GAAP financial measure.

	Year Ended December 31
(in thousands of U.S. dollars, except calendar-ship-days and percentages)	2012			2011		% Change
Revenues		311,957			369,849		(15.7	)
Voyage expenses		6,083			4,406		38.1
Net revenues		305,874			365,443		(16.3	)
Vessel operating expenses		114,635			123,027		(6.8	)
Time-charter hire expense		20,594			33,623		(38.8	)
Depreciation and amortization		74,394			84,256		(11.7	)
General and administrative (1)		28,526			44,618		(36.1	)
Asset impairments		148,457			58,034		155.8
Net loss on sale of vessels and equipment		—			218		(100.0	)
Goodwill impairment		—			10,809		(100.0	)
Restructuring charges		3,382			16		21,037.5
(Loss) income from vessel operations		(84,114	)		10,842		(875.8	)
Calendar-Ship-Days
Owned Vessels		11,416			12,199		(6.4	)
Chartered-in Vessels		1,201			1,911		(37.1	)
Total		12,617			14,110		(10.6	)

(1) includes direct general and administrative expenses and indirect general and administrative expenses allocated to the fixed-rate tanker sub-segment based on estimated use of corporate resources. For further discussion, please read “Other Operating Results – General and Administrative Expenses.”

The average fleet size of our fixed-rate tanker sub-segment (including vessels chartered-in), as measured by calendar-ship-days, decreased in 2012 compared with the same periods last year due to:

• the transfer of net four Aframax tankers and two Suezmax tankers to the spot-rate tanker sub-segment; and

• the redeliveries of one Suezmax tanker, one VLCC and one MR product tanker;

partially offset by

• the addition of a bareboat-in MR product tanker during 2011.

The collective impact from the above noted fleet changes are referred to below as the Net Fleet Reductions.

Net Revenues. Net revenues decreased to $305.9 million for 2012, from $365.4 million for 2011, primarily due to:

• a decrease of $58.5 million due to the Net Fleet Reductions; and

• a net decrease of $5.0 million from renewed time-charter out contracts at a lower rates for certain of our Aframax and Suezmax tankers during 2012;

partially offset by

• a net increase of $1.4 million due to adjustments to the daily charter rates based on inflation and an increase in interest rates in accordance with the time-charter contracts for five Suezmax tankers (however, under the terms of the related capital leases, we had corresponding increases in our lease payments, which are reflected as increases to interest expense; therefore, these and future similar interest rate adjustments do not affect our cash flow or net income);

• an increase of $1.1 million from interest income earned by our investment in a term loan entered into during 2011;

• a net increase of $0.9 million due to certain vessels being off-hire during 2012 and 2011; and

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• an increase of $0.5 million relating to crew manning adjustments in the charter-hire rates; the crew manning adjustments increased due to higher crewing costs and the strengthening of the Australian Dollar against the U.S. Dollar compared to 2011.

Vessel Operating Expenses. Vessel operating expenses decreased to $114.6 million for 2012, from $123.0 million for 2011, primarily due to the Net Fleet Reductions and timing of repairs and maintenance costs.

Time-Charter Hire Expense. Time-charter hire expense decreased to $20.6 million for 2012, from $33.6 million for 2011, primarily due to the Net Fleet Reductions.

Depreciation and Amortization. Depreciation and amortization expense decreased to $74.4 million for 2012, from $84.3 million for 2011, primarily due to:

• a net decrease of $8.8 million due to the Net Fleet Reductions; and

• a decrease of $2.8 million due to lower net book values for certain vessels in the fixed tanker sub-segment as a result of write-downs taken in 2011;

partially offset by

• an increase of $1.2 million due to the accelerated amortization of the intangible assets relating to the charter contracts of five Suezmax tankers as we expect the life of these intangible assets will be shorter than originally assumed; and

• an increase of $0.5 million due to a full year of amortization of dry-dock expenditures incurred in 2011.

Asset Impairments. Asset impairments increased to $148.5 million for 2012, from $58.0 million for 2011. The impairments for 2012 relate to nine vessels. We determined these vessels were impaired and wrote down the carrying values of these vessels to their estimated fair value. The primary factors that caused the write downs were a negative change in the outlook for the crude tanker market, a delay in the expected timing of a recovery of the crude tanker market as well as the expected discrimination impact from more fuel efficient vessels being constructed. Please read Item 18. Financial Statements: Note 18—Vessel Sales and Write-downs— b) Write-downs of Vessels, Equipment and Equity Accounted Investments and also read Item 18. Financial Statements: Note 11(a) Fair Value Measurements.

Goodwill Impairment. Goodwill impairment for 2011 relates to the write-down of goodwill from a previous acquisition. Please read “Item 18 – Financial Statements: Note 6 – Goodwill Impairment Charge and “Critical Accounting Estimates.”

b) Spot Tanker Sub-Segment

Our spot tanker sub-segment, a subset of our conventional tanker segment (which includes our Teekay Shuttle Offshore and Teekay Tankers Services business units), consists of conventional crude oil tankers and product carriers operating on the spot tanker market or subject to time-charters or contracts of affreightment that are priced on a spot-market basis or are short-term, fixed-rate contracts. We consider contracts that have an original term of less than one year in duration to be short-term. Our conventional Aframax, Suezmax, and large and medium product tankers are among the vessels included in the spot tanker sub-segment.

Our spot tanker market operations contribute to the volatility of our revenues, cash flow from operations and net income (loss). Historically, the tanker industry has been cyclical, experiencing volatility in profitability and asset values resulting from changes in the supply of, and demand for, vessel capacity. In addition, spot tanker markets historically have exhibited seasonal variations in charter rates. Spot tanker markets are typically stronger in the winter months as a result of increased oil consumption in the Northern Hemisphere and unpredictable weather patterns that tend to disrupt vessel scheduling.

The following table presents our spot tanker sub-segment’s operating results and compares its net revenues (which is a non-GAAP financial measure) to revenues, the most directly comparable GAAP financial measure:

	Year Ended December 31
(in thousands of U.S. dollars, except calendar-ship-days and percentages)	2012			2011			% Change
Revenues		163,438			233,314			(29.9	)
Voyage expenses		27,303			69,603			(60.8	)
Net revenues		136,135			163,711			(16.8	)
Vessel operating expenses		62,929			67,634			(7.0	)
Time-charter hire expense		53,156			106,078			(49.9	)
Depreciation and amortization		51,923			54,503			(4.7	)
General and administrative (1)		30,298			45,199			(33.0	)
Asset impairments		256,795			54,069			374.9
Net loss on sale of vessels and equipment		5,863			270			2,071.5
Goodwill impairment		—			25,843			(100.0	)
Restructuring charge		3,531			123			2,770.7
Loss from vessel operations		(328,360	)		(190,008	)		72.8
Calendar-Ship-Days
Owned Vessels		7,759			7,367			5.3
Chartered-in Vessels		3,030			5,555			(45.5	)
Total		10,789			12,922			(16.5	)

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(1) Includes direct general and administrative expenses and indirect general and administrative expenses allocated to the spot tanker sub-segment based on estimated use of corporate resources. For further discussion, please read “Other Operating Results – General and Administrative Expenses.”

The average size of our spot tanker fleet (including vessels chartered-in), as measured by calendar-ship-days, decreased in 2012 compared to 2011, primarily due to:

• the sale of three Aframax tankers in 2012 and one in 2011; and

• the in-charter redeliveries to their owners of eight Aframax tankers, six Suezmax tankers, two long-range 2 (or LR2) product tankers and one VLCC;

partially offset by

• the transfer of net four Aframax tankers and two Suezmax tankers from the fixed-rate tanker sub-segment.

The collective impact from the above noted fleet changes are referred to below as the Net Spot Fleet Reductions.

Tanker Market and TCE Rates

Crude tanker spot rates strengthened through the first half of 2012 before declining to historically low levels during the second half of the year. Demand for crude tankers in the first half of the year was driven by crude oil stockpiling ahead of the EU’s sanctions on Iranian oil which took effect July 1, 2012 coupled with high levels of global oil production, particularly from OPEC. The combined effect of crude demand for stockpiling purposes and an increase in long-haul OPEC barrels was a significant increase in crude tanker tonne-mile demand through the first half of 2012.

In the second half of 2012, the situation was reversed with rates in the large crude tanker segments falling to historically low levels during the summer months. This decline in tanker rates was due to much lower levels of tanker demand once oil inventories had been replenished, coupled with reduced OPEC oil production. Tanker rates exhibited a modest rebound to six-month highs in the fourth quarter due to seasonal factors but remained well below the long-term average.

In the product tanker sector, the pattern of earnings was the opposite of the crude tanker sector with a very weak first half of the year giving way to a much stronger second half. LR2 spot rates reached a 3-year high during the fourth quarter of 2012 driven by a combination of increased long-haul naphtha movements into Asia and reduced competition from crude tanker newbuildings on the East-West gasoil trade.

The global tanker fleet grew by a net 17.7 million deadweight tonnes (mdwt), or 3.7 percent, during 2012. A total of 32.4 mdwt of tankers delivered into the fleet, down from 40.2 mdwt in 2011, while scrapping and removals increased slightly to 14.7 mdwt from 14.0 mdwt in 2011. Looking ahead to 2013, we estimate that tanker deliveries will total approximately 30 mdwt while scrapping is forecast to total approximately 13 mdwt. As a result, we estimate net tanker fleet growth of approximately 17 mdwt, or 3.5%, in 2013, the lowest level of tanker fleet growth in percentage terms since 2003. Fleet growth during 2013 is expected to be weighted towards the Very Large Crude Carrier (or VLCC) and Suezmax sectors with negligible or declining growth in the Aframax and LR2 sectors.

Global oil demand is expected to grow by 0.9 million barrels per day (mb/d) during 2013 according to the average of forecasts from the International Energy Agency, Energy Information Administration and Organization of Petroleum Exporting Countries (or OPEC). This represents the same level of oil demand growth as in 2012, with the non-OECD countries, and China in particular, accounting for the majority of the growth. However, the “call on OPEC” crude is expected to decline by approximately 0.4 mb/d during 2013, which could result in lower tonne-mile demand for crude tankers compared to 2012.

	Year Ended
	December 31, 2012							December 31, 2011							December 31, 2010
	Net					TCE		Net					TCE		Net					TCE
	Revenues			Revenue		Rate		Revenues			Revenue		Rate		Revenues			Revenue		Rate
Vessel Type	($000’s)			Days		$		($000’s)			Days		$		($000’s)			Days		$
Spot Fleet(1)
Suezmax Tankers		72,223			3,785		19,084		64,529			4,387		14,709		116,986			4,983		23,477
Aframax Tankers		56,345			4,847		11,625		76,606			6,332		12,098		110,437			7,006		15,763
Large/Medium Product Tankers/VLCC		16,908			1,327		12,742		23,486			1,832		12,820		26,020			1,768		14,717
Other(2)		(9,341	)		—		—		(850	)		—		—		(4,390	)		—		—
Totals		136,135			9,959		13,681		163,771			12,551		13,048		249,053			13,757		18,104

(1) Spot fleet includes short-term time-charters and fixed-rate contracts of affreightment less than one year.

(2) Includes the cost of spot in-charter vessels servicing fixed-rate contract of affreightment cargoes, the write-off of doubtful debts and the cost of fuel while offhire.

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Average spot tanker TCE rates increased marginally in 2012 compared to 2011. The TCE rates generally reflect continued weak global oil demand caused by the global economic slowdown. Partially in response to this global economic slowdown, we reduced our exposure to the spot tanker market through the sale of certain vessels that were trading on the spot market, entered into fixed-rate time charters for certain tankers that were previously trading in the spot market, and re-delivered in-chartered vessels. This shift away from our spot tanker employment to fixed-rate employment provided increased cash flow stability through a volatile spot tanker market.

Net Revenues. Net revenues decreased to $136.1 million for 2012, from $163.7 million for 2011, primarily due to:

• a net decrease of $35.2 million due to the Net Spot Fleet Reductions and lay-up of two vessels since March 2012;

partially offset by

• an increases of $7.6 million from increase in our average spot tanker TCE rates, predominantly from our Suezmax tankers.

Vessel Operating Expenses. Vessel operating expenses decreased to $62.9 million for 2012, from $67.6 million for 2011 primarily due to the Net Spot Fleet Reductions.

Time-Charter Hire Expense. Time-charter hire expense decreased to $53.2 million for 2012, from $106.1 million for 2011, primarily due to the Net Spot Fleet Reductions and redeliveries of previously chartered-in vessels upon expiration of their in-charter contracts.

Depreciation and Amortization. Depreciation and amortization expense decreased to $51.9 million for 2012, from $54.5 million for 2011, primarily due to the Net Fleet Reductions.

Asset Impairments. Asset impairments increased to $256.8 million for 2012, from $54.1 million for 2011. The impairments for 2012 relate to nine vessels. We determined these vessels were impaired and wrote down the carrying values of these vessels to their estimated fair value. The primary factors that caused the write downs were a negative change in the outlook for the crude tanker market, a delay in the expected timing of a recovery of the crude tanker market as well as the expected discrimination impact from more fuel efficient vessels being constructed. “Please read Item 18. Financial Statements: Note 18—Vessel Sales and Write-downs— b) Write-downs of Vessels, Equipment and Equity Accounted Investments and also read Item 18. Financial Statements: Note 11(a) Fair Value Measurements.”

Net Loss on Sale of Vessels and Equipment. Loss on sale of vessels and equipment relates to the sale of three Aframaxes during 2012. Please read “Item 18 – Financial Statements: Note 18(a) Vessel Sales.”

Goodwill Impairment. Goodwill impairment for 2011, relates to the write-down of goodwill from a previous acquisition. Please read “Item 18 – Financial Statements: Note 6 – Goodwill Impairment Charge and “Critical Accounting Estimates.”

Restructuring Charges. Restructuring charges for 2012, primarily relate to costs incurred in association with the reorganization of our marine operations. Please read “Item 18 – Financial Statements: Note 20 – Restructuring Charges.”

Other Operating Results

The following table compares our other operating results for 2012 and 2011:

	Year Ended December 31,
(in thousands of U.S. dollars, except percentages)	2012			2011			% Change
General and administrative		(202,967	)		(223,616	)		(9.2	)
Interest expense		(167,615	)		(137,604	)		21.8
Interest income		6,159			10,078			(38.9	)
Realized and unrealized losses on non-designated derivative instruments		(80,352	)		(342,722	)		(76.6	)
Equity income (loss) from joint ventures		79,211			(35,309	)		(324.3	)
Foreign exchange (loss) gain		(12,898	)		12,654			(201.9	)
Other income		366			12,360			(97.0	)
Income tax recovery (expense)		14,406			(4,290	)		(435.8	)

General and Administrative. General and administrative expenses were $203.0 million in 2012, compared to $223.6 million in 2011, primarily due to:

• a decrease of $11.5 million in salaries and benefits, primarily due to a one-time pension expense in 2011 related to the retirement of our former President and Chief Executive Officer;

• a decrease of $7.0 million in equity-based compensation for management, primarily due to the accelerated timing of accounting recognition of certain stock awards as a result of certain management employees meeting retirement eligibility criteria in 2011;

• a decrease of $5.7 million in 2012, from increased pool commissions and cost recoveries from management fees; and

• a decrease of $5.3 million in 2012, in travel-related and other personnel expenses from restructuring initiatives;

partially offset by

• an increase of $8.8 million as a result of the Sevan Acquisitions.

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During 2012, we commenced the reorganization of our marine operations to create greater alignment with our business units and our three publicly-listed subsidiaries. We expect to incur approximately $12 million in total of one-time restructuring charges associated with this reorganization and realize annual cost savings of approximately $15 million commencing in the fourth quarter of 2012. A majority of the reorganization has been completed in 2012; however, certain portions will not be completed until the first half of 2013. Please read “Item 18 – Financial Statements: Note 20 Restructuring Charges.”

Interest Expense. Interest expense increased to $167.6 million in 2012, compared to $137.6 million in 2012, primarily due to:

• an increase of $15.1 million from the issuances of the NOK senior unsecured bonds in January, May and October 2012;

• an increase of $5.6 million due to the acquisition of the Hummingbird Spirit FPSO unit in November 2011 and the associated debt facility;

• an increase of $4.3 million due to increased loan and bond cost amortization in 2012;

• an increase of $4.1 million related to the new $130 million debt facility secured by the Piranema Spirit FPSO unit in February 2012;

• an increase of $4.4 million as a result of higher average outstanding debt balances;

• an increase of $3.1 million as a result of higher margins on the refinancing of a debt facility; and

• an increase of $2.3 million due to an increase in our borrowings upon our acquisitions of three LPG/multigas vessels during the second, third and fourth quarters of 2011;

partially offset by

• a decrease of $5.1 million due to the termination of the Madrid Spirit LNG carrier capital lease in the fourth quarter of 2011. The Madrid Spirit was financed pursuant to a Spanish tax lease arrangement, under which we borrowed under a term loan and deposited the proceeds into a restricted cash account and entered into a capital lease for the vessel; as a result, this decrease in interest expense from the capital lease is offset by a corresponding decrease in the interest income from restricted cash; and

• a decrease of $4.0 million due to lower EURIBOR related to Euro-denominated debt.

Interest Income. Interest income decreased to $6.2 million in 2012 from $10.1 million in 2011, primarily due to the repayment of the capital lease on one LNG carrier, the Madrid Spirit, during the fourth quarter of 2011, which was funded from restricted cash, partially offset by a higher principal balance in restricted cash deposits compared to prior year.

Realized and unrealized losses on non-designated derivative instruments. Realized and unrealized losses related to derivative instruments that are not designated as hedges for accounting purposes are included as a separate line item in the consolidated statements of loss. Net realized and unrealized losses on non-designated derivatives were $80.4 million for 2012, compared to $342.7 million for 2011, as detailed in the table below:

	Year Ended December 31
(in thousands of U.S. Dollars)	2012			2011
Realized (losses) gains relating to:
Interest rate swap agreements		(123,277	)		(132,931	)
Interest rate swap agreement amendments		—			(149,666	)
Foreign currency forward contracts		1,155			9,965
Forward freight agreements and bunker fuel swap contracts		—			36
Foinaven embedded derivative		11,452			—
		(110,670	)		(272,596	)
Unrealized gains (losses) relating to:
Interest rate swap agreements		26,770			(58,405	)
Foreign currency forward contracts		6,933			(11,399	)
Foinaven embedded derivative		(3,385	)		(322	)
		30,318			(70,126	)
Total realized and unrealized losses on derivative instruments		(80,352	)		(342,722	)

The realized losses relate to amounts we actually realized or paid to settle such derivative instruments and interest rate swap agreement amendments. The unrealized losses on interest rate swaps for 2012 and 2011 were primarily due to changes in the forward interest swap rates.

During 2012 and 2011, we had interest rate swap agreements with aggregate average net outstanding notional amounts of approximately $3.9 billion in both periods, with average fixed rates of approximately 3.9% and 3.8%, respectively. Short-term variable benchmark interest rates during these periods were generally less than 1.0% and, as such, we incurred realized losses of $123.3 million and $132.9 million, during 2012 and 2011 under the interest rate swap agreements. We also incurred realized losses of $149.7 million during 2011, for amending the terms of five interest rate swaps to reduce the weighted-average fixed interest rate from 5.1% to 2.5% and the termination of a swap.

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Primarily as a result of significant changes in long-term benchmark interest rates during 2012 and 2011, we recognized unrealized gains and (losses) of $30.3 million and $(70.1) million, respectively. Please read “Item 18. Financial Statements: Note 15—Derivative Instruments and Hedging Activities.”

Equity Income (Loss). Our equity income increased to $79.2 million in 2012 compared to a loss of $35.3 million in 2011, primarily due to:

• an increase of $40.2 million due to the acquisition of a 52% ownership interest in the six MALT LNG carriers in February 2012;

• an increase of $41.8 million related to the Angola LNG Project;

• an increase of $17.5 million due to the equity loss and write-down of our investment in Petrotrans Holdings Ltd., a 50% joint venture in the prior year;

• an increase of $10.8 million due to the sale of our interest in the Ikdam FPSO unit; and

• an increase of $5.0 million related to the Exmar and RasGas 3 joint ventures.

For 2012, equity income includes $5.3 million which relates to our share of unrealized gains on interest rate swaps, compared to unrealized losses on interest rate swaps of $(35.3) million included in equity income (loss) for the same period last year.

Foreign Exchange Gain (Loss). Foreign currency exchange losses were $12.9 million in 2012 compared to foreign currency exchange gains of $12.7 million in 2011. Our foreign currency exchange gains (losses), substantially all of which are unrealized, are due primarily to the relevant period-end revaluation of our Norwegian Kroner-denominated debt and our Euro-denominated term loans, capital leases and restricted cash for financial reporting purposes and the realized and unrealized gains (losses) on our cross currency swaps. Losses on Norwegian Kroner-denominated and Euro-denominated monetary liabilities reflect a weaker U.S. Dollar against the Norwegian Kroner and Euro on the date of revaluation or settlement compared to the rate in effect at the beginning of the period. Gains on Norwegian Kroner-denominated and Euro-denominated monetary liabilities reflect a stronger U.S. Dollar against the Norwegian Kroner and Euro on the date of revaluation or settlement compared to the rate in effect at the beginning of the period. For 2012, foreign currency exchange gains include realized gains of $3.6 million (2011—$2.9 million) and unrealized gains of $10.7 million (2011—unrealized loss of $(1.6) million) on our cross currency swap and unrealized losses of $17.7 million (2011—gains of $2.6 million) on the revaluation of our NOK-denominated debt. For 2012, foreign currency exchange (losses) gains include the revaluation of our Euro-denominated restricted cash, debt and capital leases of ($4.7) million as compared to $10.5 million for 2011.

Income Tax (Expense) Recovery. Income tax recovery was $14.4 million in 2012 and compared to income tax expense of $4.3 million in 2011. The increase in the income tax recovery was primarily due to (i) a new Norwegian tax structure established in the fourth quarter of 2012 which resulted in a deferred tax recovery for the Norwegian tax group by being able to utilize past losses carried forward against future projected income, and (ii) a reversal of uncertain tax position accruals during 2012.

Year Ended December 31, 2011 versus Year Ended December 31, 2010

Shuttle Tanker and FSO Segment

The following table presents our shuttle tanker and FSO segment’s operating results and compares its net revenues (which is a non-GAAP financial measure) to revenues, the most directly comparable GAAP financial measure. The following table also provides a summary of the changes in calendar-ship-days by owned and chartered-in vessels for our shuttle tanker and FSO segment:

	Year Ended December 31,
(in thousands of U.S. dollars, except calendar-ship-days and percentages)	2011		2010		% Change
Revenues		613,768		622,195		(1.4	)
Voyage expenses		97,743		111,003		(11.9	)
Net revenues		516,025		511,192		0.9
Vessel operating expenses		196,536		182,614		7.6
Time-charter hire expense		74,478		89,768		(17.0	)
Depreciation and amortization		129,293		127,438		1.5
General and administrative (1)		60,359		51,281		17.7
Asset impairments and net loss on sale of vessels and equipment		43,356		19,480		122.6
Restructuring charges		5,351		704		660.1
Income from vessel operations		6,652		39,907		(83.3	)
Calendar-Ship-Days
Owned Vessels		12,114		11,221		16.3
Chartered-in Vessels		2,007		2,626		(23.6	)
Total		14,121		13,847		8.8

(1) Includes direct general and administrative expenses and indirect general and administrative expenses (allocated to the shuttle tanker and FSO segment based on estimated use of corporate resources). For further discussion, please read “Other Operating Results – General and Administrative Expenses.”

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The average fleet size of our shuttle tanker and FSO segment (including vessels chartered-in), as measured by calendar-ship-days, increased during 2011 compared to 2010, primarily due to an increase in owned shuttle tankers with the delivery of four newbuilding shuttle tankers, being the Amundsen Spirit and the Nansen Spirit (together, the 2010 Newbuilding Shuttle Tanker Acquisitions), and the Peary Spirit and the Scott Spirit (together, the 2011 Newbuilding Shuttle Tanker Acquisitions) in July 2010, October 2010, May 2011 and July 2011, respectively. This increase in shuttle tankers was partially offset by the sale of the Karratha Spirit FSO unit in March 2011.

Net Revenues. Net revenues increased to $516.0 million for 2011, from $511.2 million for 2010, primarily due to:

• an increase of $38.5 million for 2011 due to the 2010 and 2011 Newbuilding Shuttle Tanker Acquisitions;

• an increase of $16.4 million for 2011 due to an increase in revenues in our time-chartered-out fleet from entering into a new contract and increases in rates as provided in certain bareboat and time-charter-out contracts,

• an increase of $1.8 million for 2011 related to an increase in reimbursable bunker costs as provided for in new contracts during 2010, partially offset by higher bunkers costs during 2011 as compared to the prior year; and

• an increase of $0.7 million for 2011 from short-term offshore projects in the North Sea, which require the use of shuttle tankers;

partially offset by

• a decrease of $24.4 million for 2011 due to lower revenues from our contract of affreightment shuttle tanker fleet from the declining oil production at mature oil fields in the North Sea compounded by fewer opportunities compared to the prior period to trade this excess capacity in the fleet in the conventional spot tanker market as a result of decreased demand for conventional crude transportation;

• a decrease of $11.7 million for 2011 due to lower revenues related to the sale of the Karratha Spirit in March 2011;

• decrease of $10.0 million for 2011, due to the redelivery of one vessel to us in March 2011 upon termination of the time-charter-out contract;

• a decrease of $4.2 million for 2011 due to a lower charter rate on the Navion Saga in accordance with the charter contract, which took effect during the second quarter of 2010; and

• a decrease of $0.9 million due to more off-hire days in our time-chartered-out fleet for 2011 as compared to 2010.

Vessel Operating Expenses. Vessel operating expenses increased to $196.5 million for 2011, from $182.6 million for 2010, primarily due to:

• an increase of $15.6 million for 2011 due to the 2010 and 2011 Newbuilding Shuttle Tanker Acquisitions;

• an increase of $8.3 million for 2011 in crew and manning costs as compared to the prior year resulting primarily from planned increases in wages; and

• an increase of $3.3 million for 2011 due to an increase in the number of vessels dry docked, and costs related to services and spares (certain repair and maintenance items are more efficient to complete while a vessel is in dry dock; consequently, repair and maintenance costs will typically increase in periods when there is an increase in the number of vessels dry docked);

partially offset by

• a decrease of $8.8 million for 2011 related to the sale of the Karratha Spirit in March 2011;

• a decrease of $3.5 million relating to the layup of one of our vessels in July 2011 as it awaits suitable projects;

• a decrease of $1.1 million for 2011 relating to the settlement of a claim with a customer in 2010; and

• a decrease of $1.1 million for 2011 relating to the net realized and unrealized changes in fair value of our foreign currency forward contracts that are or have been designated as hedges for accounting purposes.

Time-Charter Hire Expense. Time-charter hire expense decreased to $74.5 million for 2011, from $89.8 million for 2010, primarily due to:

• a decrease of $13.5 million for 2011 due to the redelivery of three time-chartered-in vessels to their owners in October 2011, February 2010 and November 2010;

• a decrease of $2.3 million due to the acquisition of one previously chartered-in vessel in February 2010; and

• a decrease of $1.2 million due to decreases in rates on certain contracts in the time-chartered-in fleet during 2011;

partially offset by

• an increase of $1.2 million due to increased spot in-chartering during 2011; and

• an increase of $0.5 million due to less offhire in the in-chartered fleet during 2011.

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Depreciation and Amortization. Depreciation and amortization expense increased to $129.3 million for 2011, from $127.4 million for 2010, primarily due to the 2010 and 2011 Newbuilding Shuttle Tanker Acquisitions, partially offset by adjustments to the carrying value of certain capitalized dry docking expenditures in 2010, the write-down of one of our shuttle tankers in 2010, and the sale of the Karratha Spirit in March 2011.

Asset Impairments and Net Loss on Sale of Vessels and Equipment. Asset impairments and net loss on the sale of vessels and equipment were $43.4 million for 2011. The impairments primarily relate to three 1992-built shuttle tankers, all of which will be 20-years old in 2012, and one FSO unit. We determined these vessels were impaired and wrote down the carrying values of these vessels to their estimated fair value, which is either the estimated sales price of the vessel or the estimated scrap value. We identified the following indicators of impairment related to these vessels: the age of the vessels, the requirements of operating in the North Sea, a change in the operating plans for certain vessels, escalating dry dock costs, a continued decline in the fair market value of vessels, and a general decline in the future outlook for shipping and the global economy combined with delayed optimism on when the recovery may occur. Asset impairments and net loss on the sale of vessels and equipment for 2010 were $19.5 million, resulting from the write-down of certain shuttle equipment, as the carrying value exceeded its estimated fair value, and the impairment of a 1992-built shuttle tanker, as the shuttle tanker net carrying value exceeded the net undiscounted cash flows expected to be generated over its remaining useful life. Due to the termination of the vessel’s charter contract and recent economic developments it was determined in 2010 that the shuttle tanker may not generate the future cash flows that were anticipated when originally purchased. The vessel was written down to its estimated fair value. The shuttle tanker equipment was originally purchased for use in future shuttle tanker conversions or new shuttle tankers.

Restructuring Charges. During 2011 and 2010, we incurred restructuring charges of $5.4 million and $0.7 million, respectively, in connection with the termination of employment for certain of the crew members of the Karratha Spirit following the sale of the vessel in March 2011, as well as the termination of the time-charter-out contract of one of our shuttle tankers. The restructuring charges from 2010 primarily resulted from the completion of the reflagging of certain vessels and a change in the nationality mix of our crews.

FPSO Segment

The following table presents our FPSO segment’s operating results and also provides a summary of the changes in calendar-ship-days for our FPSO segment:

	Year Ended December 31,
(in thousands of U.S. dollars, except calendar-ship-days and percentages)	2011			2010		% Change
Revenues		464,810			463,931		0.2
Vessel operating expenses		242,332			209,283		15.8
Depreciation and amortization		96,915			95,784		1.2
General and administrative (1)		52,854			42,714		23.7
Gain on sale of vessels and equipment		(4,888	)		—		(100.0	)
Bargain purchase gain		(68,535	)		—		(100.0	)
Income from vessel operations		146,132			116,150		16.9
Calendar-Ship-Days
Owned Vessels		2,982			2,920		2.1

(1) Includes direct general and administrative expenses and indirect general and administrative expenses (allocated to the FPSO segment based on estimated use of corporate resources). For further discussion, please read “Other Operating Results – General and Administrative Expenses.”

The average fleet size of our FPSO segment, as measured by calendar-ship-days, increased during 2011 compared to 2010 due to the acquisition of the Hummingbird FPSO unit by Teekay and the Piranema FPSO unit by Teekay Offshore (or the Sevan Acquisitions) on November 30, 2011.

Revenues. Revenues increased to $464.8 million for 2011, from $463.9 million for 2010, primarily due to:

• an increase of $28.3 million due to supplemental efficiency and tariff payments received under the amended Petrojarl Foinaven FPSO contract;

• an increase of $14.5 million due to the Sevan Acquisitions;

• an increase of $6.7 million due to increased rates on the Rio das Ostras FPSO unit effective April 2011, concurrent with starting a new contract on the Aruana field off of Brazil;

• an increase of $4.4 million due to a planned maintenance shutdown of the Petrojarl Foinaven FPSO unit in the third quarter of 2010;

• an increase of $4.0 million due to foreign currency exchange differences in 2011 as compared to 2010;

• an increase of $3.5 million relating to back-pay negotiated payments to us for services previously rendered to the charterer of the Rio das Ostras FPSO unit; and

• an increase of $3.1 million due to a planned maintenance shutdown for 13 days on the Petrojarl Varg FPSO unit in the third quarter of 2010;

partially offset by

• a decrease of $59.2 million for one-time payments received in 2010 under the amended operating contract for the Petrojarl Foinaven related to operations in previous years and recognized in 2010; and

• a decrease of $3.2 million due to the weather related incident involving the Banff FPSO unit. Please read “—Other Significant Projects and Developments.”

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As part of our acquisition of Teekay Petrojarl in July 2008 and Sevan in November 2011, we assumed certain FPSO service contracts that had less favorable terms than prevailing market terms at the time of the acquisitions. This contract value liability, which was initially recognized on the date of acquisition, is being amortized to revenue over the remaining firm period of the current FPSO contracts on a weighted basis, based on the projected revenue to be earned under the contracts. The amount of amortization relating to these contracts included in revenue for 2011 was $46.2 million (2010—$47.6 million). The decrease in 2011, compared to 2010, was due to increases in the amortization periods resulting from operating contract amendments and changes to expected contract durations for two of our FPSO units. Please read “Item 18. Financial Statements: Note 6—Goodwill, Intangible Assets and In-Process Revenue Contracts.”

Vessel Operating Expenses. Vessel operating expenses increased to $242.3 million for 2011, from $209.3 million for 2010, primarily due to:

• an increase of $10.3 million due to increased inspections, repairs, crew and travel costs in 2011 relating to the Petrojarl I FPSO unit compared to 2010;

• an increase of $6.9 million due to higher repairs and maintenance costs associated with the Apollo Spirit, an FSO unit used to service the Petrojarl Banff FPSO unit, due to a scheduled dry dock in 2011;

• an increase of $6.7 million due to the Sevan Acquisitions;

• an increase of $6.4 million due to the weakening of the U.S. Dollar against the Norwegian Kroner in 2011 compared to 2010;

• an increase of $3.2 million due to increased repairs on the Rio das Ostras FPSO unit while on yard stay and higher consumables and spares in 2011 compared to 2010; and

• an increase of $3.1 million due to planned crew and manning wage increases during 2011;

partially offset by

• a decrease of $3.9 million due to a planned maintenance shutdown for 13 days on the Petrojarl Varg FPSO unit in the third quarter of 2010.

Depreciation and Amortization. Depreciation and amortization expense increased to $96.9 million for 2011, from $95.8 million for 2010, primarily due capital upgrades on the Rio das Ostras FPSO unit for the Aruana field in the first quarter of 2011 and the Sevan Acquisitions.

Gain on Sale of Vessels and Equipment. Gain on sale of vessels and equipment of $4.9 million for 2011 relates to a gain on sale of equipment related to the Tiro and Sidon FPSO project.

Bargain purchase gain. As part of the acquisition of FPSO units by us and Teekay Offshore from Sevan and our 40% equity investment in Sevan, we recognized a bargain purchase gain on acquisition of $68.5 million. Please read “Item 18. Financial Statements—Note 3: Acquisition of FPSO Units from and investment in Sevan Marine ASA.”

Liquefied Gas Segment

The following table presents our liquefied gas segment’s operating results and compares its net revenues (which is a non-GAAP financial measure) to revenues, the most directly comparable GAAP financial measure. The following table also provides a summary of the changes in calendar-ship-days by owned vessels for our liquefied gas segment:

	Year Ended December 31,
(in thousands of U.S. dollars, except calendar-ship-days and percentages)	2011		2010			% Change
Revenues		272,041		248,378			9.5
Voyage expenses		4,862		29			16,665.5
Net revenues		267,179		248,349			7.6
Vessel operating expenses		48,158		46,497			3.6
Depreciation and amortization		63,641		62,904			1.2
General and administrative (1)		20,586		20,147			2.2
Gain on sale of vessels and equipment		—		(4,340	)		100.0
Restructuring charges		—		394			(100.0	)
Income from vessel operations		134,794		122,747			9.8
Calendar-Ship-Days
Owned Vessels and Vessels under Direct Financing Lease		5,126		5,051			1.5

(1) Includes direct general and administrative expenses and indirect general and administrative expenses (allocated to the liquefied gas segment based on estimated use of resources).

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The increase in the average fleet size of our liquefied gas segment, as measured by calendar-ship-days, was primarily due to the deliveries of two Multigas carriers, the Norgas Unikum and Norgas Vision, on June 15, 2011 and October 17, 2011, respectively, and the delivery of an LPG carrier, the Norgas Camilla, on September 15, 2011 (collectively, the 2011 Gas Carrier Deliveries); partially offset by the sale of an LPG carrier, the Dania Spirit, on November 5, 2010.

During 2011, two of our LNG carriers, the Arctic Spirit and Polar Spirit, were off hire for approximately 11 days and 50 days, respectively, relating to scheduled dry dockings, compared to 288 off-hire days in 2010, of which 44 days were related to scheduled dry dockings of the two vessels, with the remainder due to the Arctic Spirit being idle with no contract.

Net Voyage Revenues. Net voyage revenues increased to $267.2 million for 2011, from $248.3 million for 2010, primarily due to:

• an increase of $15.6 million due to an increase in the hire rates under new charter contracts for the Arctic Spirit and Polar Spirit during 2011 as compared to the prior year;

• an increase of $5.3 million due to the 2011 Gas Carrier Deliveries;

• an increase of $4.1 million due to the effect on our Euro-denominated revenues from the strengthening of the Euro against the U.S. Dollar during 2011 compared to the prior year; and

• an increase of $0.9 million, due to operating expense recovery adjustments during 2011 in the charter-hire rates for the Tangguh LNG Carriers;

partially offset by

• a decrease of $4.0 million due to the sale of the Dania Spirit on November 5, 2010; and

• a decrease of $1.2 million for 2011 due to the Arctic Spirit and Polar Spirit being offhire for 11 days and 13 days, respectively, in the second quarter of 2011 for scheduled dry dockings.

Vessel Operating Expenses. Vessel operating expenses increased to $48.2 million for 2011, from $46.5 million for 2010, primarily due to:

• an increase of $2.9 million due to the scope and extent of service and maintenance activities performed in 2011 compared to 2010 and an increase in manning costs for certain of our LNG carriers;

• an increase of $0.8 million due to unemployment for the Arctic Spirit for most of 2010. As a result, we were able to operate the vessel throughout 2010 with a reduced average number of crew on board and we reduced the amount of repair and maintenance activities performed; and

• an increase of $0.7 million due to the effect on our Euro-denominated crew manning expenses from the strengthening of the Euro against the U.S. Dollar during 2011 compared to 2010 (a portion of our vessel operating expenses are denominated in Euros, which is primarily due to the nationality of our crew);

partially offset by

• a decrease of $2.3 million due to the sale of the Dania Spirit on November 5, 2010; and

• a decrease of $1.0 million due to lower insurance rates upon renewal in 2011.

Depreciation and Amortization. Depreciation and amortization increased to $63.6 million for 2011, from $62.9 million for 2010, primarily due to:

• an increase of $1.5 million due to the 2011 Gas Carrier Deliveries; and

• an increase of $1.2 million as a result of amortization of dry-dock expenditures incurred during 2011;

partially offset by

• a decrease of $0.9 million due to the sale of the Dania Spirit on November 5, 2010.

Gain on Sale of Vessels and Equipment. The $4.3 million gain on sale of vessel in 2010 relates to the sale of the Dania Spirit in November 2010.

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Conventional Tanker Segment

a) Fixed-Rate Tanker Sub-Segment

The following table presents our fixed-rate tanker sub-segment’s operating results and compares its net revenues (which is a non-GAAP financial measure) to revenues, the most directly comparable GAAP financial measure. The following table also provides a summary of the changes in calendar-ship-days by owned vessels for our fixed-rate tanker sub-segment:

	Year Ended December 31,
(in thousands of U.S. dollars, except calendar-ship-days and percentages)	2011		2010		% Change
Revenues		369,849		382,577		(3.3	)
Voyage expenses		4,406		4,446		(0.9	)
Net revenues		365,443		378,131		(3.4	)
Vessel operating expenses		123,027		109,483		12.4
Time-charter hire expense		33,623		60,466		(44.4	)
Depreciation and amortization		84,256		82,746		1.8
General and administrative (1)		44,618		43,147		3.4
Asset impairments and net loss on sale of vessels and equipment		58,252		154		37,726.0
Goodwill impairment		10,809		—		100.0
Restructuring charges		16		330		(95.2	)
Income from vessel operations		10,842		81,805		(86.7	)
Calendar-Ship-Days
Owned Vessels		12,199		11,919		2.4
Chartered-in Vessels		1,911		2,626		(27.2	)
Total		14,110		14,545		(3.0	)

(1) Includes direct general and administrative expenses and indirect general and administrative expenses allocated to the fixed-rate tanker sub-segment based on estimated use of corporate resources. For further discussion, please read “Other Operating Results – General and Administrative Expenses.”

The average fleet size of our fixed-rate tanker sub-segment (including vessels chartered-in), as measured by calendar-ship-days, decreased for 2011 compared to the prior year, primarily due to:

• the transfer to the spot-rate tanker sub-segment of two Aframax tankers, on a net basis, (consisting of the transfer-in of three owned vessels from the spot tanker sub-segment, and the transfer-out of three owned vessels and two in-chartered vessels to the spot tanker sub-segment);

• an overall decrease in the number of in-chartered vessel days during 2011;

• the sale of one product tanker in August 2010; and

• the redelivery by us of one VLCC and one Aframax tanker to their owners during 2011 upon expiration of in-charters;

partially offset by

• the transfer of one Suezmax tanker from the spot tanker sub-segment in April 2010; and

• the deliveries of two product tankers in April 2011.

The collective impact from the above noted fleet changes are referred to below as the Net Fleet Reduction.

Net Revenues. Net revenues decreased to $365.4 million in 2011, from $378.1 million for 2010, primarily due to:

• a decrease of $14.4 million from the redeliveries of in-chartered vessels; and

• a decrease of $9.0 million from the sale of a product tanker in August 2010;

partially offset by

• an increase of $11.5 million resulting from interest income from our investment in term loans, as discussed below.

We earned interest income of $16.8 million and $5.3 million, respectively, for 2011 and 2010 from our investment in three term loans which totalled $187 million as at December 31, 2011, which are collateralized by first-priority mortgages on three modern VLCCs.

Vessel Operating Expenses. Vessel operating expenses increased to $123.0 million in 2011, from $109.5 million in 2010, primarily due to $12.7 million related to the addition of two product tankers and $5.5 million related to an increase in manning for certain of our conventional tankers and the timing of services and maintenance. These increases were partially offset by $4.5 million as a result of the Net Fleet Reduction.

Time-Charter Hire Expense. Time-charter hire expense decreased to $33.6 million in 2011, from $60.5 million in 2010, primarily due to a net decrease in the number of in-chartered vessel days as vessels were redelivered to their owners upon expiration of in-charter contracts, and vessels transferring to the spot tanker sub-segment.

Depreciation and Amortization. Depreciation and amortization expense increased to $84.3 million in 2011, from $82.7 million in 2010, primarily due to an increase in capitalized dry docking expenditures incurred during 2011.

Asset Impairments and Net loss on Sale of Vessels and Equipment. Asset impairments and net loss on sale of vessels and equipment were $58.3 million for 2011. The impairments relate to three vessels built in 2000, 2004 and 2005. We determined these vessels were impaired and wrote down the carrying values of these vessels to their estimated fair value, which is either the estimated sales price of the vessel or the estimated scrap value. We identified the following indicators of impairment related to these vessels: a change in the operating plans for certain vessels, escalating dry dock costs, a continued decline in the fair market value of vessels, and a general decline in the future outlook for shipping and the global economy combined with delayed optimism on when the recovery may occur. Please read “Item 18. Financial Statements: Note 18(b) Write-downs and Note 11(a) Fair Value Measurements.”

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Goodwill Impairment. Goodwill impairment was $10.8 million for 2011 as a result of a write-down of goodwill relating to Suezmax tankers. The recognition of the goodwill impairment charge was driven by the continuing weak tanker market, which has largely been caused by an oversupply of vessels relative to demand. Please read “Item 18. Financial Statements: Note 6 Goodwill, Intangible Assets and In-Process Revenue Contracts.”

b) Spot Tanker Sub-Segment

The following table presents our spot tanker sub-segment’s operating results and compares its net revenues (which is a non-GAAP financial measure) to revenues, the most directly comparable GAAP financial measure. The following table also provides a summary of the changes in calendar-ship-days by owned vessels for our spot tanker sub-segment:

	Year Ended December 31,
(in thousands of U.S. dollars, except calendar-ship-days and percentages)	2011			2010			% Change
Revenues		233,314			378,672			(38.4	)
Voyage expenses		69,603			129,619			(46.3	)
Net revenues		163,711			249,053			(34.3	)
Vessel operating expenses		67,634			82,670			(18.2	)
Time-charter hire expense		106,078			135,758			(21.9	)
Depreciation and amortization		54,503			71,833			(24.1	)
General and administrative (1)		45,199			36,454			24.0
Asset impairments and net loss on sale of vessels and equipment		54,339			33,856			60.5
Goodwill impairment		25,843			—			100.0
Restructuring charge		123			14,968			(99.2	)
Loss from vessel operations		(190,008	)		(126,486	)		50.2
Calendar-Ship-Days
Owned Vessels		7,367			8,185			(10.0	)
Chartered-in Vessels		5,555			6,372			(12.8	)
Total		12,922			14,557			(11.2	)

(1) Includes direct general and administrative expenses and indirect general and administrative expenses allocated to the spot tanker sub-segment based on estimated use of corporate resources. For further discussion, please read “Other Operating Results – General and Administrative Expenses.”

The average size of our spot tanker fleet (including vessels chartered-in), as measured by calendar-ship-days, decreased for 2011, compared to the prior year, primarily due to:

• the sale of two Aframax tankers in 2010 and one in 2011;

• the redelivery by us of four Aframax tankers and six Suezmax tankers to their owners during 2011 upon expiration of in-charters; and

• the transfer of one Suezmax tanker to the fixed-rate tanker sub-segment in April 2010;

partially offset by

• the transfer to the spot-rate tanker sub-segment of two Aframax tankers, on a net basis, (consisting of the transfer-out of three owned vessels to the fixed tanker sub-segment, and the transfer-in of three owned vessels and two in-chartered vessels from the fixed tanker sub-segment); and

• the transfer by us of one in-chartered VLCC from the fixed-rate tanker sub-segment in February 2011 before redelivery to its owner in May 2011.

The collective impact from the above noted fleet changes are referred to below as the Net Spot Fleet Reductions.

Net Revenues. Net revenues decreased to $163.7 million in 2011, from $249.1 million for 2010, primarily due to decreases of $65.2 million from decreases in our average spot tanker TCE rates due to the relative weakening of the spot tanker market and $19.3 million from the Net Spot Fleet Reductions.

Vessel Operating Expenses. Vessel operating expenses decreased to $67.6 million in 2011, from $82.7 million for 2011, primarily due to $15.9 million from the Net Spot Fleet Reductions.

Time-Charter Hire Expense. Time-charter hire expense decreased to $106.1 million for 2011, from $135.8 million for 2010, primarily due to redeliveries of previously chartered-in vessels upon expiration of their in-charter contracts and a decrease in average in-charter contract hire rates.

Depreciation and Amortization. Depreciation and amortization expense decreased to $54.5 million in 2011, from $71.8 million for 2010, primarily due to a decrease of amortization of certain intangible contracts that were fully amortized in 2010 and the Net Spot Fleet Reductions.

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Asset Impairments and Net loss on Sale of Vessels and Equipment. Asset impairments and net loss on sale of vessels and equipment were $54.3 million for 2011. The impairments relate to two 1992-built vessels, one 1993-built vessel, one 1994-built vessel and one 1997-built vessel. We determined these vessels were impaired and wrote down the carrying values of these vessels to their estimated fair value, which is either the estimated sales price of the vessel or the estimated scrap value. We identified the following indicators of impairment related to these vessels: a change in the operating plans for certain vessels, escalating dry dock costs, a continued decline in the fair market value of vessels, and a general decline in the future outlook for shipping and the global economy combined with delayed optimism on when the recovery may occur. Asset impairments and net loss on sale of vessels and equipment for 2010 of $33.9 million, were primarily due to write-downs of $31.7 million for certain customer contracts and three vessel purchase options which either expired unexercised or were unlikely to be exercised by us and a $1.9 million loss on the sale of a 1995-built Aframax tanker in August 2010.

Goodwill Impairment. Goodwill impairment was $25.8 million for 2011 as a result of a write-off of goodwill relating to Suezmax tankers. The recognition of the goodwill impairment charge was driven by the continuing weak tanker market, which has largely been caused by an oversupply of vessels relative to demand. Please read “Item 18. Financial Statements: Note 6 Goodwill, Intangible Assets and In-Process Revenue Contracts.”

Restructuring Charges. Restructuring charges for 2011 and 2010 primarily relate to costs incurred for certain vessel crew changes. We changed the crew operations being managed by an external management company to our own international seafarers in order to reduce future crewing costs.

Other Operating Results

The following table compares our other operating results for 2011 and 2010.

	Year Ended December 31,
(in thousands of U.S. dollars, except percentages)	2011			2010			% Change
General and administrative		(223,616	)		(193,743	)		15.4
Interest expense		(137,604	)		(136,107	)		1.1
Interest income		10,078			12,999			(22.5	)
Realized and unrealized losses on non-designated derivative instruments		(342,722	)		(299,598	)		14.4
Equity loss		(35,309	)		(11,257	)		213.7
Foreign exchange gain		12,654			31,983			(60.4	)
Loss on notes repurchase		—			(12,645	)		(100.0	)
Other income		12,360			7,527			64.2
Income tax (expense) recovery		(4,290	)		6,340			(167.7	)

General and Administrative Expenses. General and administrative expenses increased to $223.6 million for 2011, from $193.7 million for 2010, primarily due to:

• an increase of $30.9 million in salaries and benefits primarily due to a one-time pension expense of $11.0 million related to the retirement of our former President and Chief Executive Officer on March 31, 2011, $1.7 million from the weakening of the U.S. Dollar against the Norwegian Kroner, Canadian dollar, Australian dollar, and other currencies, $4.9 million from an increase in the average number of employees, and $2.8 million from salary increases effective April 2011;

• an increase of $7.2 million in corporate expenses due to higher business development and consulting fees, primarily in our Shuttle Tanker and FSO and FPSO segments, and an increase in directors’ fees;

• an increase of $3.9 million in travel related primarily to increased business development activities; and

• an increase of $1.1 million in acquisition costs related to the Sevan Acquisition;

partially offset by

• a decrease of $6.3 million in lower short-term incentive compensation.

Interest Expense. Interest expense increased to $137.6 million for 2011, from $136.1 million for 2010, primarily due to an increase in average debt balance from $4.4 billion in 2010 to $4.9 billion in 2011; and

• an increase of $7.9 million due to the effect of the November 2010 issuance of the 600 million Norwegian Kroner-denominated senior unsecured bonds due November 2013; and

• an increase of $2.8 million due to increased EURIBOR rates relating to Euro-denominated debt;

partially offset by

• a decrease due to the retirement at maturity of 8.875% senior unsecured notes due in July 2011;

• a decrease of $7.6 million due to capitalized interest on the Tiro and Sidon FPSO project and Knarr FPSO unit; and

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• a decrease of $1.8 million from the scheduled capital lease repayments on the Madrid Spirit (the Madrid Spirit was financed pursuant to a Spanish tax lease arrangement, under which we borrowed under a term loan and deposited the proceeds into a restricted cash account and entered into a capital lease for the vessel; as a result, this decrease in interest expense from the capital lease is offset by a corresponding decrease in the interest income from restricted cash). During the fourth quarter of 2011 the Madrid Spirit lease expired and the purchase obligation was fully funded with restricted cash deposits.

The debt repayments under long-term revolving credit facilities that contributed to a decrease in interest expense for 2011 were primarily funded with net proceeds from the issuance of equity securities by our publicly listed subsidiaries and from the sale of assets to our public company subsidiaries and to third parties. When one of our publicly listed subsidiaries acquires an asset from us, a significant portion of the acquisition typically has been financed through the issuance to the public or private investors of equity securities by the subsidiary. To the extent that there are no immediate investment opportunities, we have generally applied the proceeds from the equity issuances and from the sale of assets to these subsidiaries and third parties towards debt reduction or increasing our cash balances. Please read “Item 4. Information on the Company—Recent Equity Offerings and Transactions by Subsidiaries.”

Interest Income. Interest income decreased to $10.1 million for 2011, compared to $13.0 million for 2010, primarily due to lower cash account balances and a scheduled capital lease repayment on one of our LNG carriers that was funded from restricted cash deposits that earn interest.

Realized and Unrealized Losses on Non-designated Derivative Instruments. Realized and unrealized losses related to derivative instruments that are not designated as hedges for accounting purposes are included as a separate line item in the consolidated statements of loss. The realized (losses) gains relate to the amounts we actually received or paid to settle such derivative instruments and the unrealized (losses) gains relate to the change in fair value of such derivative instruments. Net realized and unrealized losses on non-designated derivatives were $342.7 million for 2011, compared to net realized and unrealized losses on non-designated derivatives of $299.6 million for 2010, as detailed in the table below:

	Year Ended December 31,
(in thousands of U.S. Dollars)	2011			2010
Realized (losses) gains relating to:
Interest rate swap agreements		(132,931	)		(154,098	)
Interest rate swap agreement amendments and terminations		(149,666	)		—
Foreign currency forward contracts		9,965			(2,274	)
Forward freight agreements, bunker fuel swaps and other		36			(7,914	)
		(272,596	)		(164,286	)
Unrealized gains (losses) relating to:
Interest rate swaps		(58,405	)		(146,780	)
Foreign currency forward contracts		(11,399	)		6,307
Forward freight agreements, bunker fuel swaps and other		(322	)		5,161
		(70,126	)		(135,312	)
Total realized and unrealized losses on non-designated derivative instruments		(342,722	)		(299,598	)

The realized losses relate to amounts we actually realized or paid to settle such derivative instruments, or for interest rate swap agreement amendments and terminations. The unrealized losses on interest rate swaps for 2011 were primarily due to changes in the forward interest swap rates.

During 2011 and 2010, we had interest rate swap agreements with aggregate average net outstanding notional amounts of approximately $3.9 billion and $3.6 billion, respectively, with average fixed rates of approximately 3.8% and 4.5%, respectively. Short-term variable benchmark interest rates during these periods were generally less than 1.1% and, as such, we incurred realized losses of $132.9 million and $154.1 million, respectively, during 2011 and 2010 under the interest rate swap agreements. We incurred realized losses of $149.7 million and $nil, respectively, during 2011 and 2010 for amending the terms of five interest rate swaps to reduce the weighted average fixed interest rate from 5.1% to 2.5%, and for the termination of two interest rate swaps.

As a result of significant decreases in long-term benchmark interest rates in 2011 and 2010, we recognized unrealized losses of $70.1 million in 2011 and $135.3 million in 2010. Please see “Item 5. Operating and Financial Review and Prospects: Valuation of Derivative Instruments,” which explains how our derivative instruments are valued, including a description of significant factors and uncertainties in determining the estimated fair value and why changes in these factors result in material variances in realized and unrealized (losses) gain on derivative instruments.

Equity Loss. Equity losses were $35.3 million and $11.3 million for 2011 and 2010, respectively. The loss was primarily comprised of our share of the earnings (loss) from the Angola LNG Project, the RasGas 3 Joint Venture and from the Exmar Joint Venture. Please read “Item 18. Financial Statements: Note 23—Equity Accounted Investments.” Of the equity loss for 2011, $35.3 million relates to our share of unrealized loss on interest rate swaps for 2011. This compares to unrealized loss on interest rate swaps of $26.3 million included in equity loss for 2010. In addition, the equity loss for 2011 includes the impairment of an investment in a joint venture of $19.4 million.

Foreign Exchange Gain. Foreign exchange gains were $12.7 million and $32.0 million for 2011 and 2010, respectively. These foreign currency exchange gains, substantially all of which were unrealized, are due primarily to the relevant period end revaluation of our Euro-denominated term loans, capital leases and restricted cash for financial reporting purposes. Gains reflect a strengthening U.S. Dollar against the Euro on the date of revaluation. Losses reflect a weaker U.S. Dollar against the Euro on the date of revaluation.

Other Income. Other income of $12.4 million for 2011 was primarily comprised of leasing income of $2.9 million in 2011, a $3.4 million gain in 2011 related to a gain on sale of marketable securities, and $6.1 million in miscellaneous income.

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Income Tax Recovery (Expense). Income tax expense was $4.3 million for 2011, compared to an income tax recovery of $6.3 million for 2010. The increase to income tax expense was primarily due to taking a full valuation allowance against the deferred tax asset relating to Norwegian tax losses carried forward, partially offset by an increase in deferred income tax recovery relating to unrealized foreign exchange translation losses and a tax loss on the sale of a vessel.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity and Cash Needs

Our primary sources of liquidity are cash and cash equivalents, cash flows provided by our operations, our undrawn credit facilities, proceeds from the sale of vessels, and capital raised through financing transactions by us or our subsidiaries. Our short-term liquidity requirements are for the payment of operating expenses, debt servicing costs, dividends, scheduled repayments of long-term debt, as well as funding our working capital requirements. As at December 31, 2012, our total cash and cash equivalents totaled $ 639.5 million, compared to $ 692.1 million as at December 31, 2011. As at December 31, 2012 and December 31, 2011, our total liquidity, including cash and undrawn credit facilities, was $1.9 billion and $1.5 billion, respectively.

Our spot tanker market operations contribute to the volatility of our net operating cash flow. Historically, the tanker industry has been cyclical, experiencing volatility in profitability and asset values resulting from changes in the supply of, and demand for, vessel capacity. In addition, spot tanker markets historically have exhibited seasonal variations in charter rates. Spot tanker markets are typically stronger in the winter months as a result of increased oil consumption in the Northern Hemisphere and unpredictable weather patterns that tend to disrupt vessel scheduling.

As at December 31, 2012, we had $797.4 million of scheduled debt repayments coming due within the next twelve months. In addition, as at December 31, 2012, we had $70.3 million current lease obligation for five Suezmax tankers, under which the owner has the option to require us to purchase the vessels and under the charter contracts, the owner also has cancellation rights. For three of the five Suezmax tankers, the cancellation options are first exercisable in August 2013, November 2013 and April 2014, respectively. While we have not received notification of termination, we expect the charterer to exercise these options and the vessels to be sold by the owner to a third party. Therefore, we have classified the outstanding obligations under these leases as due in 2013 for purposes of our disclosures. Upon sale of the vessels, we will not be required to repay the capital lease obligations as the vessels under capital leases will be returned to the owner and the capital lease obligations will be concurrently extinguished.

Our operations are capital intensive. We finance the purchase of our vessels primarily through a combination of borrowings from commercial banks or our joint venture partners, the issuance of equity securities and publicly traded debt instruments and cash generated from operations. In addition, we may use sale and lease-back arrangements as a source of long-term liquidity. Occasionally, we use our revolving credit facilities to temporarily finance capital expenditures until longer-term financing is obtained, at which time we typically use all or a portion of the proceeds from the longer-term financings to prepay outstanding amounts under revolving credit facilities. We have pre-arranged financing of approximately $386 million, which mostly relates to our 2013 capital expenditure commitments. We are currently in the process of obtaining additional debt financing for our remaining capital commitments of $0.9 billion relating to our portion of newbuildings on order as at December 31, 2012.

Our pre-arranged newbuilding debt facilities are in addition to our undrawn credit facilities. We continue to consider strategic opportunities, including the acquisition of additional vessels and expansion into new markets. We may choose to pursue such opportunities through internal growth, joint ventures or business acquisitions. We intend to finance any future acquisitions through various sources of capital, including internally generated cash flow, existing credit facilities, additional debt borrowings, or the issuance of additional debt or equity securities or any combination thereof.

As at December 31, 2012, our revolving credit facilities provided for borrowings of up to $2.8 billion, of which $1.2 billion was undrawn. The amount available under these revolving credit facilities reduces by $740.8 million (2013), $741.3 million (2014), $226.4 million (2015), $346.4 million (2016), $463.0 million (2017) and $321.0 million (thereafter). The revolving credit facilities are collateralized by first-priority mortgages granted on 58 of our vessels, together with other related security, and are guaranteed by us or our subsidiaries.

Our outstanding term loans reduce in monthly, quarterly or semi-annual payments with varying maturities through 2023. Some of the term loans also have bullet or balloon repayments at maturity and are collateralized by first-priority mortgages granted on 39 of our vessels, together with other related security, and are generally guaranteed by us or our subsidiaries.

Among other matters, our long-term debt agreements generally provide for maintenance of minimum consolidated financial covenants and certain loan agreements require the maintenance of market value to loan ratios. Certain loan agreements require that a minimum level of free cash be maintained and as at December 31, 2012, this amount was $100.0 million. Most of the loan agreements also require that we maintain an aggregate level of free liquidity and undrawn revolving credit lines with at least six months to maturity, or 5% to 7.5% of total debt. As at December 31, 2012, this amount was $319.1 million. We were in compliance with all of our loan covenants at December 31, 2012.

We conduct our funding and treasury activities within corporate policies designed to minimize borrowing costs and maximize investment returns while maintaining the safety of the funds and appropriate levels of liquidity for our purposes. We hold cash and cash equivalents primarily in U.S. Dollars, with some balances held in Australian Dollars, British Pounds, Canadian Dollars, Euros, Japanese Yen, Norwegian Kroner and Singapore Dollars.

We are exposed to market risk from foreign currency fluctuations and changes in interest rates, spot tanker market rates for vessels and bunker fuel prices. We use forward foreign currency contracts, cross currency and interest rate swaps, forward freight agreements and bunker fuel swap contracts to manage currency, interest rate, spot tanker rates and bunker fuel price risks. Please read “Item 11 – Quantitative and Qualitative Disclosures About Market Risk. “

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Cash Flows

The following table summarizes our cash and cash equivalents provided by (used for) operating, financing and investing activities for the periods presented:

	Year Ended December 31,
	2012			2011			2010
Net operating cash flows		288,936			107,193			411,750
Net financing cash flows		299,671			976,645			358,702
Net investing cash flows		(641,243	)		(1,171,459	)		(413,214	)

Operating Cash Flows

Our net cash flow from operating activities fluctuates primarily as a result of changes in tanker utilization and TCE rates, changes in interest rates, fluctuations in working capital balances, the timing and amount of drydocking expenditures, repairs and maintenance activities, vessel additions and dispositions, and foreign currency rates. Our exposure to the spot tanker market has contributed significantly to fluctuations in operating cash flows historically as a result of highly cyclical spot tanker rates and more recently as a result of an increase in tanker supply and the reduction in global oil demand that was caused by a slow-down in global economic activity that began in late 2008.

Net cash flow from operating activities increased to $288.9 million for the year ended December 31, 2012, from $107.2 million for the year ended December 31, 2011. This increase was primarily due to a $63.9 million net increase in income from vessel operations before depreciation, amortization, asset impairments, net loss (gain) on sale of vessels and equipment, bargain purchase gain and the amortization of in-process revenue contracts of our four reportable segments. In addition, there was a $125.4 million decrease in interest expense (including interest income and realized losses on interest rate swaps) in the year ended December 31, 2012 compared to the same period in 2011. Of the $125.4 million decrease in interest expense, $149.7 million was paid in the year ended December 31, 2011 to the counterparties of five interest rate swap agreements with notional amounts totaling $665.1 million in consideration for amending the terms of such agreements to reduce the weighted average fixed interest rate from 5.1% to 2.5%, and the termination of a swap. There was a decrease of $20.6 million on expenditures for dry docking in the year ended December 31, 2012 compared to the same period in 2011, which also contributed to the increase in cash flows from operating activities.

Net cash flow from operating activities in 2011 decreased to $107.2 million from $411.8 million for 2010. This decrease was primarily due to a $114.2 million net decrease in (loss) income from vessel operations before depreciation, amortization, asset impairments, net loss (gain) on sale of vessels and equipment, bargain purchase gain and the amortization of in-process revenue contracts of our four reportable segments. In addition, there was a $129.8 million decrease in the change in operating assets and liabilities in 2011 compared to 2010, and a $132.9 million increase in interest expense (including interest income and realized losses on interest rate swaps). The $129.8 million decrease in the change in operating assets and liabilities in 2011 compared to 2010 was primarily the result of an increase in accounts receivable due to increased activity in our conventional tanker pools, a decrease in accrued interest and a decrease in deferred revenues. Of the $132.9 million increase in interest expense, $92.7 million was paid to the counterparties of five interest rate swap agreements with notional amounts totaling $665.1 million in consideration for amending the terms of such agreements to reduce the weighted average fixed interest rate from 5.1% to 2.5%. The amount paid has been reflected as a reduction in the outstanding liability of the interest rate swaps, which are accounted for at fair value. These factors resulting in decreases to cash flows from operating activities were partially offset by a $15.5 million increase in dividends received from our joint ventures and a $20.2 million increase from realized gains on foreign currency forward contracts, bunker fuel swap contracts and forward freight agreements in 2011 compared to 2010.

For further discussion of our four reportable segments, please read “Results of Operations.”

Financing Cash Flows

We have three publicly-traded subsidiaries, Teekay LNG, Teekay Offshore and Teekay Tankers (collectively, the Daughter Companies), in which we have less than 100% ownership interests. It is our intention that the Daughter Companies hold most of our liquefied gas transportation assets (Teekay LNG), our offshore assets, including shuttle tankers, FPSO units and FSO units (Teekay Offshore), and our conventional tanker assets (Teekay Tankers). From and including the respective initial public offerings of these subsidiaries, Teekay has been selling assets that are a part of these lines of businesses to the Daughter Companies. Historically, the Daughter Companies have distributed operating cash flows to their owners in the form of distributions or dividends. The Daughter Companies typically finance acquisitions, including acquisitions of assets from Teekay Corporation, with a combination of debt and new equity from public or private investors or the assumption of debt related to acquired vessels. The Daughter Companies raised net proceeds from issuances of new equity to the public and to third-party investors of $496.2 million in the year ended December 31, 2012, compared to $631.1 million in 2011, and $645.6 million in 2010. As the size of the Daughter Companies have grown through acquisitions, whether from Teekay or otherwise, the amount of the operating cash flows generally have increased, which has resulted in larger aggregate distributions. Consequently, distributions from the Daughter Companies to non-controlling interests have increased to $246.6 million in 2012 from $201.9 million in 2011, and from $159.8 million in 2010.

We use our revolving credit facilities to finance capital expenditures. Occasionally, we will do this until longer-term financing is obtained, at which time we typically use all or a portion of the proceeds from the longer-term financings to prepay outstanding amounts under the revolving credit facilities. Our proceeds from the issuance of long-term debt, net of debt issuance costs and prepayments of long-term debt, was $347.1 million in the year ended December 31, 2012, and $1,223.0 million in 2011 and $218.7 million in 2010. The net proceeds from the issuance of long-term debt in 2011 was higher as a result of capital expenditures incurred on our newbuilding projects and our acquisition of FPSO units from Sevan.

We actively manage the maturity profile of our outstanding financing arrangements. Our scheduled repayments of long-term debt were $266.2 million in the year ended December 31, 2012, compared to $449.6 million in 2011 and $210.0 million in 2010.

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In October 2010, Teekay announced a $200 million share repurchase program. During 2012, we repurchased no shares of our common stock. During 2011, we repurchased 3.9 million shares of our common stock for $122.2 million at an average cost of $31.15 per share, pursuant to the share repurchase program. During 2010, we repurchased 1.2 million shares of our common stock for $40.1 million, at an average cost of $32.40 per share, pursuant to the share repurchase program. As at December 31, 2012, the total remaining amount under the share repurchase authorization was $37.7 million.

Dividends paid during the year ended December 31, 2012 were $83.3 million, compared to $93.5 million in 2011 and $92.7 million in 2010, or $1.265 per share. Subject to financial results and declaration by the Board of Directors, we currently intend to continue to declare and pay a regular quarterly dividend on our common stock. We have paid a quarterly dividend since 1995.

Investing Cash Flows

During 2012, we incurred capital expenditures for vessels and equipment of $523.6 million, primarily for capitalized vessel modifications and shipyard construction installment payments on our newbuilding shuttle tankers and the installment payments and conversion costs of our FPSO units under construction or conversion. In November 2012, we prepaid $92.3 million of the Voyageur Spirit purchase price. We received aggregate net proceeds of $250.8 million from the sale of the Tiro and Sidon FPSO project to the 50% joint venture with Odebrecht, sale of three conventional tankers, sale of two shuttle tankers and the sale of a joint venture. In addition, we invested $183.6 million in our equity accounted investees, mainly related to the Teekay LNG-Marubeni Joint Venture (including working capital contribution and acquisition costs), and advanced $117.2 million to our equity accounted investees.

During 2011, we incurred capital expenditures for vessels and equipment of $755.0 million, primarily for capitalized vessel modifications and shipyard construction installment payments on our newbuilding shuttle tankers and the installment payments and conversion costs of our FPSO units under construction/conversion. In addition, we: invested $70.0 million in a term loan that bears interest at an interest rate of 9% per annum and has a fixed term of three years, repayable in full on maturity and is collateralized by a first priority mortgage on a 2011-built VLCC; received net proceeds of $33.4 million from the sale of a 1988-built FSO unit, the sale of a 1993-built Aframax tanker and the sale of equipment related to the Tiro and Sidon FPSO project; and invested $322.5 million to acquire FPSO units from Sevan and made a 40% equity investment in a recapitalized Sevan.

During 2010, we incurred capital expenditures for vessels and equipment of $343.1 million, primarily for capitalized vessel modifications and shipyard construction installment payments on our newbuilding shuttle tankers. In addition, we invested $115.6 million in two term loans, received net proceeds of $71.0 million from the sale of three Aframax tankers, one product tanker and one LPG carrier, and invested $45.5 million in joint ventures.

COMMITMENTS AND CONTINGENCIES

The following table summarizes our long-term contractual obligations as at December 31, 2012:

					2014		2016
					and		and		Beyond
	Total		2013		2015		2017		2017
	In millions of U.S. Dollars
U.S. Dollar-Denominated Obligations:
Long-term debt (1)		4,751.1		744.8		1,492.3		1,053.2		1,460.8
Chartered-in vessels (operating leases)		153.8		84.4		50.8		18.2		0.4
Commitments under capital leases (2)		190.5		80.8		43.8		38.6		27.3
Commitments under capital leases (3)		977.1		24.0		48.0		48.0		857.1
Commitments under operating leases (4)		402.8		24.8		49.6		49.5		278.9
Newbuilding installments/conversion (5)(6)		1,096.5		406.6		419.7		270.2		—
Purchase obligation (7)		79.5		79.5		—		—		—
Asset retirement obligation		24.7		—		—		—		24.7
Total U.S. Dollar-Denominated Obligations		7,676.0		1,444.9		2,104.2		1,477.7		2,649.2
Euro-Denominated Obligations: (8)
Long-term debt (9)		341.4		14.8		32.8		37.8		256.0
Total Euro-Denominated Obligations		341.4		14.8		32.8		37.8		256.0
Norwegian Kroner-Denominated Obligations: (8)
Long-term debt (10)		467.2		38.0		125.8		303.4		—
Total Norwegian Kroner-Denominated Obligations		467.2		38.0		125.8		303.4		—
Total		8,484.6		1,497.7		2,262.8		1,818.9		2,905.2

(1) Excludes expected interest payments of $111.7 million (2013), $165.4 million (2014 and 2015), $130.5 million (2016 and 2017) and $119.4 million (beyond 2017). Expected interest payments are based on the existing interest rates (fixed-rate loans) and LIBOR at December 31, 2012, plus margins on debt that has been drawn that ranges up to 4.25% (variable-rate loans). The expected interest payments do not reflect the effect of related interest rate swaps that we have used as an economic hedge on certain of our floating-rate debt. In November 2011, we agreed to acquire the Voyageur Spirit upon completion of its upgrade. The Voyageur Spirit has been determined to be a VIE and we have been determined to be the primary beneficiary. As a result, we have consolidated the Voyageur Spirit, including its existing U.S. Dollar-denominated term loan outstanding, which totalled $230.4 million as at December 31, 2012.

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(2) Includes, in addition to lease payments, amounts we are required to pay to purchase certain leased vessels at the end of the period when cancellation options are first exercisable. The purchase price will be based on the unamortized portion of the vessel construction financing costs for the vessels, which are included in the table above. We expect to satisfy the purchase price by assuming the existing vessel financing, although we may be required to obtain separate debt or equity financing to complete the purchases if the lenders do not consent to our assuming the financing obligations. Please read “Item 18 – Financial Statements: Note 9 – Capital Lease Obligations and Restricted Cash.”

(3) Existing restricted cash deposits of $475.5 million, together with the interest earned on these deposits, are expected to be sufficient to repay the remaining amounts we currently owe under the lease arrangements.

(4) We have corresponding leases whereby we are the lessor. We expect to receive approximately $361.4 million for these leases from 2013 to 2029. Please read “Item 18 – Financial Statements: Note 9 – Capital Lease Obligations and Restricted Cash.”

(5) Represents remaining construction costs (excluding capitalized interest and miscellaneous construction costs for four shuttle tankers, two LNG carriers, one FPSO unit. Please read “Financial Statements: Note 16 (a) – Commitments and Contingencies – Vessels Under Construction.”

(6) We have a 50% interest in a joint venture that has entered into an agreement for the construction of a VLCC. As at December 31, 2012, the remaining commitments on this vessel, excluding capitalized interest and other miscellaneous construction costs, totaled $53.9 million, of which our share is $27.0 million. Please read “Financial Statements: Note 16 (b) – Commitments and Contingencies – Joint Ventures.”

(7) Represents remaining cost to upgrade and acquire the Voyageur Spirit (net of assumed debt of $230 million) as of December 31, 2012, and the total purchase price of approximately $55 million to acquire a 2010-built HiLoad Dynamic Positioning (DP) unit from Remora AS. Please read “Financial Statements: Note 16 (c) – Commitments and Contingencies – Purchase Obligation.” In February 2013, we acquired a 50% ownership in Exmar LPG BVBA for approximately $134 million, which is not included in the above table. Please read “Item 18 – Financial Statements: Note 25 (b) – Subsequent Events.”

(8) Euro-denominated and Norwegian-denominated obligations are presented in U.S. Dollars and have been converted using the prevailing exchange rate as of December 31, 2012.

(9) Excludes expected interest payments of $5.5 million (2013), $10.2 million (2014 and 2015), $9.1 million (2016 and 2017) and $4.9 million (beyond 2017). Expected interest payments are based on EURIBOR at December 31, 2012, plus margins that range up to 2.25%, as well as the prevailing U.S. Dollar/Euro exchange rate as of December 31, 2012. The expected interest payments do not reflect the effect of related interest rate swaps that we have used as an economic hedge of certain of our variable-rate debt.

(10) Excludes expected interest payments of $23.8 million (2013), $34.3 million (2014 and 2015), $20.8 million (2016 and 2017) and $nil (beyond 2017). Expected interest payments are based on NIBOR at December 31, 2012, plus a margin between 4.75% to 5.75%, as well as the prevailing U.S. Dollar/Norwegian Kroner exchange rate as of December 31, 2012. The expected interest payments and principal repayments do not reflect the effect of the related cross currency swap that we have used as an economic hedge of our foreign exchange and interest rate exposure associated with our Norwegian Kroner-denominated long-term debt. The table excludes the NOK bonds issued and repurchased that occurred subsequent to December 31, 2012.

OFF-BALANCE SHEET ARRANGEMENTS

We have no off-balance sheet arrangements that have or are reasonably likely to have, a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources. Our equity accounted investments are described in “Item 18 – Financial Statements: Note 23 – Equity Accounted Investments.”

CRITICAL ACCOUNTING ESTIMATES

We prepare our consolidated financial statements in accordance with GAAP, which requires us to make estimates in the application of our accounting policies based on our best assumptions, judgments and opinions. On a regular basis, management reviews our accounting policies, assumptions, estimates and judgments to ensure that our consolidated financial statements are presented fairly and in accordance with GAAP. However, because future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates, and such differences could be material. Accounting estimates and assumptions discussed in this section are those that we consider to be the most critical to an understanding of our financial statements because they inherently involve significant judgments and uncertainties. For a further description of our material accounting policies, please read “Item 18. Financial Statements: Note 1.Summary of Significant Accounting Policies.”

Revenue Recognition

Description. We recognize voyage revenue using the percentage of completion method. Under such method, voyages may be calculated on either a load-to-load or discharge-to-discharge basis. This means voyage revenues are recognized ratably either from the beginning of when product is loaded for one voyage to when it is loaded for the next voyage, or from when product is discharged (unloaded) at the end of one voyage to when it is discharged after the next voyage.

Judgments and Uncertainties. In applying the percentage of completion method, we believe that in most cases the discharge-to-discharge basis of calculating voyages more accurately reflects voyage results than the load-to-load basis. At the time of cargo discharge, we generally have information about the next load port and expected discharge port, whereas at the time of loading we are normally less certain what the next load port will be. We use this method of revenue recognition for all spot voyages and voyages servicing contracts of affreightment, with an exception for our shuttle tankers servicing contracts of affreightment with offshore oil fields. In this case a voyage commences with tendering of notice of readiness at a field, within the agreed lifting range, and ends with tendering of notice of readiness at a field for the next lifting. However, we do not begin recognizing revenue for any of our vessels until a charter has been agreed to by the customer and us, even if the vessel has discharged its cargo and is sailing to the anticipated load port on its next voyage.

Effect if Actual Results Differ from Assumptions. Our revenues could be overstated or understated for any given period to the extent actual results are not consistent with our estimates in applying the percentage of completion method.

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Vessel Lives and Impairment

Description. The carrying value of each of our vessels represents its original cost at the time of delivery or purchase less depreciation and impairment charges. We depreciate the original cost, less an estimated residual value, of our vessels on a straight-line basis over each vessel’s estimated useful life. The carrying values of our vessels may not represent their market value at any point in time because the market prices of second-hand vessels tend to fluctuate with changes in charter rates and the cost of newbuildings. Both charter rates and newbuilding costs tend to be cyclical in nature.

We review vessels and equipment for impairment whenever events or circumstances indicate the carrying value of an asset, including the carrying value of the charter contract, if any, under which the vessel is employed, may not be recoverable. This occurs when the asset’s carrying value is greater than the future undiscounted cash flows the asset is expected to generate over its remaining useful life. For a vessel under charter, the discounted cash flows from that vessel may exceed its market value, as market values may assume the vessel is not employed on an existing charter. If the estimated future undiscounted cash flows of an asset exceed the asset’s carrying value, no impairment is recognized even though the fair value of the asset may be lower than its carrying value. If the estimated future undiscounted cash flows of an asset are less than the asset’s carrying value and the fair value of the asset is less than its carrying value, the asset is written down to its fair value. Fair value is calculated as the net present value of estimated future cash flows, which, in certain circumstances, will approximate the estimated market value of the vessel.

The following table presents by segment the aggregate market values and carrying values of certain of our vessels that we have determined have a market value that is less than their carrying value as of December 31, 2012. Specifically, the table below reflects all such vessels, except those operating on contracts where the remaining term is significant and the estimated future undiscounted cash flows relating to such contracts are sufficiently greater than the carrying value of the vessels such that we consider it unlikely that an impairment would be recognized in the following year. Consequently, the vessels included in the following table generally include those vessels employed on single-voyage, or “spot” charters, as well as those vessels near the end of existing charters or other operational contracts. While the market values of these vessels are below their carrying values, no impairment has been recognized on any of these vessels as the estimated future undiscounted cash flows relating to such vessels are greater than their carrying values.

We would consider the vessels reflected in the following table to be at a higher risk of future impairment. The table is disaggregated for vessels which have estimated future undiscounted cash flows that are marginally or significantly greater than their respective carrying values. Vessels with estimated future cash flows significantly greater than their respective carrying values would not necessarily represent vessels that would likely be impaired in the next 12 months. In deciding whether to dispose of a vessel, we determine whether it is economically preferable to sell the vessel or continue to operate it. This assessment includes an estimate of the net proceeds expected to be received if the vessel is sold in its existing condition compared to the present value of the vessel’s estimated future revenue, net of operating costs. Such estimates are based on the terms of the existing charter, charter market outlook and estimated operating costs, given a vessel’s type, condition and age. In addition, we typically do not dispose of a vessel that is servicing an existing customer contract. The recognition of an impairment in the future may be more likely for those vessels that have estimated future undiscounted cash only marginally greater than their respective carrying value.

(in thousands of U.S. dollars, except number of vessels) Reportable Segment	Number of Vessels		Market Values (1) $		Carrying Values $
Shuttle Tanker – marginally greater		5		102,800		185,517
Shuttle Tanker – significantly greater		2		40,000		57,720
FSO Segment – significantly greater		2		13,000		20,977
Conventional Tanker Segment – marginally greater		5		102,000		154,447
Conventional Tanker Segment – significantly greater		22		767,500		1,107,203

(1) Market values are based on second-hand market comparable values or using a depreciated replacement cost approach. Since vessel values can be volatile, our estimates of market value may not be indicative of either the current or future prices we could obtain if we sold any of the vessels. In addition, the determination of estimated market values for our shuttle tankers and FSO units may involve considerable judgment, given the illiquidity of the second-hand market for these types of vessels. The estimated market values for the FSO units in the table above were based on second-hand market comparables for similar vessels. Given the advanced age of these vessels, the estimated market values substantially reflect the price of steel and amount of steel in the vessel. The estimated market values for the shuttle tankers were based on second-hand market comparable values for conventional tankers of similar age and size, adjusted for shuttle tanker specific functionality.

Judgments and Uncertainties. Depreciation is calculated using an estimated useful life of 20 to 25 years for conventional tankers and shuttle tankers, 20 to 25 years for FPSO units, and 30 years for LPG carriers and 35 years for LNG carriers, commencing at the date the vessel was originally delivered from the shipyard. FSO units are depreciated over the term of the contract. However, the actual life of a vessel may be different than the estimated useful life, with a shorter actual useful life resulting in an increase in quarterly depreciation and potentially resulting in an impairment loss. The estimated useful life of our vessels takes into account design life, commercial considerations and regulatory restrictions. Our estimates of future cash flows involve assumptions about future charter rates, vessel utilization, operating expenses, dry-docking expenditures, vessel residual values and the remaining estimated life of our vessels. Our estimated charter rates are based on rates under existing vessel contracts and market rates at which we expect we can re-charter our vessels. Our estimates of vessel utilization, including estimated off-hire time and the estimated amount of time our shuttle tankers may spend operating in the spot tanker market when not being used in their capacity as shuttle tankers, are based on historical experience and our projections of the number of future shuttle tanker voyages. Our estimates of operating expenses and dry-docking expenditures are based on historical operating and dry-docking costs and our expectations of future inflation and operating requirements. Vessel residual values are a product of a vessel’s lightweight tonnage and an estimated scrap rate. The remaining estimated lives of our vessels used in our estimates of future cash flows are consistent with those used in the calculations of depreciation.

In our experience, certain assumptions relating to our estimates of future cash flows are more predictable by their nature, including estimated revenue under existing contract terms, on-going operating costs and remaining vessel life. Certain assumptions relating to our estimates of future cash flows require more discretion and are inherently less predictable, such as future charter rates beyond the firm period of existing contracts and vessel residual values, due to factors such as the volatility in vessel charter rates and vessel values. We believe that the assumptions used to estimate future cash flows of our vessels are reasonable at the time they are made. We can make no assurances, however, as to whether our estimates of future cash flows, particularly future vessel charter rates or vessel values, will be accurate.

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Effect if Actual Results Differ from Assumptions. If we conclude that a vessel or equipment is impaired, we recognize a loss in an amount equal to the excess of the carrying value of the asset over its fair value at the date of impairment. The written-down amount becomes the new lower cost basis and will result in a lower annual depreciation expense than for periods before the vessel impairment.

Dry docking

Description. We capitalize a substantial portion of the costs we incur during dry docking and amortize those costs on a straight-line basis over the useful life of the dry dock. We expense costs related to routine repairs and maintenance incurred during dry docking that do not improve operating efficiency or extend the useful lives of the assets and for annual class survey costs on our FPSO units. When significant dry-docking expenditures occur prior to the expiration of the original amortization period, the remaining unamortized balance of the original dry-docking cost and any unamortized intermediate survey costs are expensed in the period of the subsequent dry dockings.

Judgments and Uncertainties. Amortization of capitalized dry dock expenditures requires us to estimate the period of the next dry docking and useful life of dry dock expenditures. While we typically dry dock each vessel every two and a half to five years and have a shipping society classification intermediate survey performed on our LNG and LPG carriers between the second and third year of the five-year dry docking period, we may dry dock the vessels at an earlier date, with a shorter life resulting in an increase in the depreciation.

Effect if Actual Results Differ from Assumptions. If we change our estimate of the next dry dock date for a vessel, we will adjust our annual amortization of dry docking expenditures.

Goodwill and Intangible Assets

Description. We allocate the cost of acquired companies to the identifiable tangible and intangible assets and liabilities acquired, with the remaining amount being classified as goodwill. Certain intangible assets, such as time-charter contracts, are being amortized over time. Our future operating performance will be affected by the amortization of intangible assets and potential impairment charges related to goodwill or intangible assets. Accordingly, the allocation of the purchase price to intangible assets and goodwill may significantly affect our future operating results. Goodwill and indefinite-lived assets are not amortized, but reviewed for impairment annually, or more frequently if impairment indicators arise. The process of evaluating the potential impairment of goodwill and intangible assets is highly subjective and requires significant judgment at many points during the analysis.

Judgments and Uncertainties. The allocation of the purchase price of acquired companies requires management to make significant estimates and assumptions, including estimates of future cash flows expected to be generated by the acquired assets and the appropriate discount rate to value these cash flows. In addition, the process of evaluating the potential impairment of goodwill and intangible assets is highly subjective and requires significant judgment at many points during the analysis. The fair value of our reporting units was estimated based on discounted expected future cash flows using a weighted-average cost of capital rate. The estimates and assumptions regarding expected cash flows and the appropriate discount rates require considerable judgment and are based upon existing contracts, historical experience, financial forecasts and industry trends and conditions.

As of December 31, 2012, we had two reporting units with goodwill attributable to them. As of the date of this Annual Report, we do not believe that there is a reasonable possibility that the goodwill attributable to our two remaining reporting units with goodwill attributable to them might be impaired within the next year as described below.

Effect if Actual Results Differ from Assumptions. As of the date of this Annual Report, we do not believe that there is a reasonable possibility that the goodwill attributable to our two reporting units with goodwill attributable to them might be impaired within the next year. However, certain factors that impact our goodwill impairment tests are inherently difficult to forecast and as such we cannot provide any assurances that an impairment will or will not occur in the future. An assessment for impairment involves a number of assumptions and estimates that are based on factors that are beyond our control. Please read “Part I—Forward-Looking Statements.”

Valuation of Derivative Financial Instruments

Description. Our risk management policies permit the use of derivative financial instruments to manage foreign currency fluctuation, interest rate, bunker fuel price and spot tanker market rate risk. Changes in fair value of derivative financial instruments that are not designated as cash flow hedges for accounting purposes are recognized in earnings in the consolidated statement of loss. Changes in fair value of derivative financial instruments that are designated as cash flow hedges for accounting purposes are recorded in other comprehensive income (loss) and are reclassified to earnings in the consolidated statement of loss when the hedged transaction is reflected in earnings. Ineffective portions of the hedges are recognized in earnings as they occur. During the life of the hedge, we formally assess whether each derivative designated as a hedging instrument continues to be highly effective in offsetting changes in the fair value or cash flows of hedged items. If we determine that a hedge has ceased to be highly effective, we will discontinue hedge accounting prospectively.

Judgments and Uncertainties. A substantial majority of the fair value of our derivative instruments and the change in fair value of our derivative instruments from period to period result from our use of interest rate swap agreements. The fair value of our derivative instruments is the estimated amount that we would receive or pay to terminate the agreements in an arm’s length transaction under normal business conditions at the reporting date, taking into account current interest rates, foreign exchange rates and the current credit worthiness of ourselves and the swap counterparties. The estimated amount is the present value of estimated future cash flows, being equal to the difference between the benchmark interest rate and the fixed rate in the interest rate swap agreement, multiplied by the notional principal amount of the interest rate swap agreement at each interest reset date.

The fair value of our interest rate swap agreements at the end of each period is most significantly impacted by the interest rate implied by the benchmark interest rate yield curve, including its relative steepness. Interest rates have experienced significant volatility in recent years in both the short and long term. While the fair value of our interest rate swap agreements is typically more sensitive to changes in short-term rates, significant changes in the long-term benchmark interest rate also materially impact our interest rate swap agreements.

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The fair value of our interest rate swap agreements is also impacted by changes in our specific credit risk included in the discount factor. We discount our interest rate swap agreements with reference to the credit default swap spreads of similarly rated global industrial companies and by considering any underlying collateral. The process of determining credit worthiness requires significant judgment in determining which source of credit risk information most closely matches our risk profile.

The benchmark interest rate yield curve and our specific credit risk are expected to vary over the life of the interest rate swap agreements. The larger the notional amount of the interest rate swap agreements outstanding and the longer the remaining duration of the interest rate swap agreements, the larger the impact of any variability in these factors will be on the fair value of our interest rate swaps. We economically hedge the interest rate exposure on a significant amount of our long-term debt and for long durations. As such, we have historically experienced, and we expect to continue to experience, material variations in the period-to-period fair value of our derivative instruments.

Effect if Actual Results Differ from Assumptions. Although we measure the fair value of our derivative instruments utilizing the inputs and assumptions described above, if we were to terminate the agreements at the reporting date, the amount we would pay or receive to terminate the derivative instruments may differ from our estimate of fair value. If the estimated fair value differs from the actual termination amount, an adjustment to the carrying amount of the applicable derivative asset or liability would be recognized in earnings for the current period. Such adjustments could be material. See “Item 18. Financial Statements: Note 15—Derivative Instruments and Hedging Activities” for the effects on the change in fair value of our derivative instruments on our consolidated statements of loss.

Item 6. Directors, Senior Management and Employees

Directors and Senior Management

Our directors and executive officers as of the date of this Annual Report and their ages as of December 31, 2012 are listed below:

Name	Age		Position
C. Sean Day		63	Director and Chair of the Board
Peter Evensen		54	Director, President and Chief Executive Officer
Axel Karlshoej		72	Director and Chair Emeritus
Dr. Ian D. Blackburne		67	Director
William B. Berry		60	Director
Peter S. Janson		65	Director
Thomas Kuo-Yuen Hsu		66	Director
Eileen A. Mercier		65	Director
Bjorn Moller		55	Director
Tore I. Sandvold		65	Director
Arthur Bensler		55	Executive Vice President, Secretary and General Counsel
Bruce Chan		40	President, Teekay Tanker Services, a division of Teekay
David Glendinning		59	President, Teekay Gas Services, a division of Teekay
Kenneth Hvid		44	Executive Vice President and Chief Strategy Officer
Vincent Lok		44	Executive Vice President and Chief Financial Officer
Peter Lytzen		55	President, Teekay Petrojarl AS, a subsidiary of Teekay
Ingvild Saether		44	President, Teekay Shuttle and Offshore, a division of Teekay
Lois Nahirney		49	Executive Vice President, Corporate Resources
Geir Sekkesaeter		51	Senior Vice President, Teekay Marine Management(1)

(1) Until March 31, 2013

Certain biographical information about each of these individuals is set forth below:

C. Sean Day has served as a director of Teekay Corporation since 1998 and as Chairman since 1999. Mr. Day also serves as Chairman of the general partner of Teekay LNG Partners L.P., Chairman of the general partner of Teekay Offshore Partners L.P. and Chairman of Teekay Tankers Ltd. From 1989 to 1999 he was President and Chief Executive Officer of Navios Corporation, a large bulk shipping company based in Stamford, Connecticut. Prior to that, Mr. Day held a number of senior management positions in the shipping and finance industries. He currently serves as a director of Kirby Corporation and is Chairman of Compass Diversified Holdings. Mr. Day is engaged as a consultant to Kattegat Limited, the parent company of Resolute Investments, Ltd., Teekay Corporation’s largest shareholder, to oversee its investments, including that in the Teekay group of companies.

Peter Evensen joined Teekay Corporation in 2003 as Senior Vice President, Treasurer and Chief Financial Officer. He was appointed Executive Vice President and Chief Financial Officer in 2004 and was appointed Executive Vice President and Chief Strategy Officer in 2006. In April, 2011, he became President and Chief Executive Officer and a director of Teekay Corporation. Mr. Evensen also serves as Chief Executive Officer and Chief

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Financial Officer and a director of the general partner of Teekay LNG Partners L.P. , Chief Executive Officer and Chief Financial Officer and a director of the general partner of Teekay Offshore Partners L.P. and as a director of Teekay Tankers Ltd. Mr. Evensen has over 25 years of experience in banking and shipping finance. Prior to joining Teekay Corporation, Mr. Evensen was Managing Director and Head of Global Shipping at J.P. Morgan Securities Inc. and worked in other senior positions for its predecessor firms. His international industry experience includes positions in New York, London and Oslo, Norway.

Axel Karlshoej has served as a director of Teekay Corporation since 1989, was Chairman from 1994 to 1999, and has been Chairman Emeritus since stepping down as Chairman. Mr. Karlshoej is President and serves on the compensation committee of the board of directors of Nordic Industries, a California general construction firm with which he has served for the past 30 years. He is the older brother of the late J. Torben Karlshoej.

Dr. Ian D. Blackburne has served as a director of Teekay Corporation since 2000. Dr. Blackburne has over 25 years of experience in petroleum refining and marketing, and in 2000 he retired as Managing Director and Chief Executive Officer of Caltex Australia Limited, a large petroleum refining and marketing conglomerate based in Australia. He is a former Chairman of CSR Limited, and is currently serving as Chairman of Aristocrat Leisure Limited, a director of Suncorp-Metway Ltd. and a director of Symbion Health Limited (formerly Mayne Group Limited), both Australian public companies in the diversified industrial and financial sectors. Dr. Blackburne was also previously the Chairman of the Australian Nuclear Science and Technology Organization.

William B. Berry has served as a director of Teekay Corporation since June, 2011,. Mr. Berry held various positions with ConocoPhillips and its predecessors from 1976 until his retirement in 2008, including the position of Executive Vice President of Exploration and Production, Worldwide from 2002 to 2005 and Executive Vice President, Exploration and Production, Europe, Asia, Africa and Middle East from 2005 to 2008. Mr. Berry serves on the boards of directors of Nexen Inc. and Willbros Group, Inc., and serves as an Honorary Consulate to the Embassy of the Republic of Kazakhstan.

Peter S. Janson has served as a director of Teekay Corporation since 2005. From 1999 to 2002, Mr. Janson was the Chief Executive Officer of Amec Inc. (formerly Agra Inc.), a publicly traded engineering and construction company. From 1986 to 1994, he served as the President and Chief Executive Officer of Canadian operations for Asea Brown Boveri Inc., a company for which he also served as Chief Executive Officer for U.S. operations from 1996 to 1999. Mr. Janson has also served as a member of the Business Round Table in the United States, and served as a member of the National Advisory Board on Sciences and Technology in Canada.

Thomas Kuo-Yuen Hsu has served as a director of Teekay Corporation since 1993. He is presently a director of CNC Industries, an affiliate of the Expedo Group of Companies that manages a fleet of six vessels of 70,000 dwt. Mr. Hsu has been a Committee Director of the Britannia Steam Ship Insurance Association Limited since 1988.

Eileen A. Mercier has served as a director of Teekay Corporation since 2000. She has over 42 years of experience in a wide variety of financial and strategic planning positions, including serving as Senior Vice President and Chief Financial Officer for Abitibi-Price Inc. from 1990 to 1995. She formed her own management consulting company, Finvoy Management Inc. and acted as President from 1995 to 2003. She currently serves as Chairman of the Ontario Teachers’ Pension Plan, a trustee of The University Health Network, a director and Chair of Governance for CGI Group Inc. and a director and Chair of Audit and Risk Management for Intact Financial Corporation.

Bjorn Moller has served as a director of Teekay Corporation since 1998. Mr. Moller also served as Teekay Corporation’s President and Chief Executive Officer from 1998 until April, 2011. Also until April, 2011, Mr. Moller served as Vice Chairman of the general partner of Teekay LNG Partners L.P. , Vice Chairman of the general partner of Teekay Offshore Partners L.P. , and as the Chief Executive Officer of Teekay Tankers Ltd. Mr. Moller has served as a director of Teekay Tankers Ltd. since [YEAR]. Mr. Moller has over 25 years of experience in the shipping industry, and has served as Chairman of the International Tanker Owners Pollution Federation since 2006. He served in senior management positions with Teekay Corporation for more than 15 years and led Teekay Corporation’s overall operations beginning in 1997 following his promotion to the position of Chief Operating Officer. Prior to that, Mr. Moller headed Teekay Corporation’s global chartering operations and business development activities.

Tore I. Sandvold has served as a director of Teekay Corporation since 2003. He has over 30 years of experience in the oil and energy industry. From 1973 to 1987, he served in the Norwegian Ministry of Industry, Oil & Energy in a variety of positions in the areas of domestic and international energy policy. From 1987 to 1990, he served as the Counselor for Energy in the Norwegian Embassy in Washington, D.C. From 1990 to 2001 Mr. Sandvold served as Director General of the Norwegian Ministry of Oil & Energy, with overall responsibility for Norway’s national and international oil and gas policy. From 2001 to 2002 he served as Chairman of Petoro, the Norwegian state-owned oil company that is the largest oil asset manager on the Norwegian continental shelf. From 2002 to the present Mr. Sandvold, through his company Sandvold Energy A.S., has acted as advisor to companies and advisory bodies in the energy industry. Mr. Sandvold serves as a director of Schlumberger Limited, Lambert Energy Advisory Ltd., Energy Policy Foundation of Norway and Njord Gas Infrastructure.

Arthur Bensler joined Teekay Corporation in 1998 as General Counsel. He was promoted to the position of Vice President in 2002 and became Teekay Corporation’s Corporate Secretary in 2003. He was appointed Senior Vice President in 2004 and Executive Vice President in 2006. Prior to joining Teekay Corporation, Mr. Bensler was a partner in a large Vancouver, B.C., Canada law firm where he practiced corporate, commercial and maritime law from 1987 until joining Teekay Corporation.

Bruce Chan joined Teekay Corporation in 1995. Since then, Mr. Chan has held a number of finance and accounting positions, including Vice President, Strategic Development from 2004 until his promotion to the position of Senior Vice President, Corporate Resources in 2005. In 2008 Mr. Chan was appointed President of Teekay Corporation’s Teekay Tanker Services division, which is responsible for the commercial management of Teekay Corporation’s conventional crude oil and product tanker transportation services. In April, 2011, Mr. Chan also assumed the position of Chief Executive Officer of Teekay Tankers Ltd. Prior to joining Teekay Corporation, Mr. Chan worked as a Chartered Accountant in the Vancouver, B.C., Canada office of Ernst & Young LLP.

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David Glendinning joined Teekay Corporation in 1987. Since then, he has held a number of senior positions, including Vice President, Marine and Commercial Operations from 1995 until his promotion to Senior Vice President, Customer Relations and Marine Project Development in 1999. In 2003 Mr. Glendinning was appointed President of Teekay Corporation’s Teekay Gas Services division, which is responsible for Teekay Corporation’s initiatives in the LNG business and other areas of gas activity. Prior to joining Teekay Corporation Mr. Glendinning, who is a Master Mariner, had 18 years of sea service on oil tankers of various types and sizes.

Kenneth Hvid joined Teekay Corporation in 2000 and was responsible for leading Teekay Corporation’s global procurement activities until he was promoted in 2004 to Senior Vice President, Teekay Gas Services. During that time Mr. Hvid was involved in leading Teekay Corporation through its entry and growth in the LNG business. He held that position until the beginning of 2006, when he was appointed President of Teekay Corporation’s Teekay Navion Shuttle Tankers and Offshore division. In that role he was responsible for Teekay Corporation’s global shuttle tanker business as well as initiatives in the floating storage and offtake business and related offshore activities. In April, 2011 Mr. Hvid became Chief Strategy Officer and Executive Vice President of Teekay Corporation, and became a director of the general partner of Teekay LNG Partners L.P. and a director of the general partner of Teekay Offshore Partners L.P. Mr. Hvid rejoined as a director of the general partner of Teekay LNG Partners L.P. on February 19, 2013, after briefly resigning on September 14, 2012 to maintain a majority of independent directors. Mr. Hvid has 24 years of global shipping experience, 12 of which were spent with A.P. Moller in Copenhagen, Denmark, San Francisco and Hong Kong. Since 2007, Mr. Hvid has served as a director of Gard P. & I. (Bermuda) Ltd.

Vincent Lok has served as Teekay Corporation’s Executive Vice President and Chief Financial Officer since 2007. He has held a number of finance and accounting positions with Teekay Corporation, including Controller from 1997 until his promotion to the position of Vice President, Finance in 2002. He was subsequently promoted to Senior Vice President and Treasurer in 2004 and Senior Vice President and Chief Financial Officer in 2006. Mr. Lok has served as the Chief Financial Officer of Teekay Tankers Ltd. since 2007. Prior to joining Teekay Corporation, Mr. Lok worked in the Vancouver, B.C., Canada audit practice of Deloitte & Touche LLP.

Peter Lytzen joined Teekay Petrojarl as President and Chief Executive Officer in 2007. Mr. Lytzen’s experience includes over 20 years in the oil and gas industry. He joined Teekay Petrojarl from Maersk Contractors, where he most recently served as Vice President of Production. In that role, he held overall responsibility for Maersk Contractors’ technical tendering, construction and operation of FPSO and other offshore production solutions. He first joined Maersk in 1987 and held progressively responsible positions throughout the organization.

Ingvild Saether joined Teekay Corporation in 2002 as a result of Teekay Corporation’s acquisition of Navion AS from Statoil ASA. Ms. Saether held various management positions in Teekay Corporation’s conventional tanker business until 2007, when she assumed the commercial responsibility for Teekay Corporation’s shuttle tanker activities in the North Sea. In her role as Vice President, Teekay Navion Shuttle Tankers she managed the growth of Teekay Corporation’s shuttle fleet. In April, 2011, Ms. Saether assumed the position of President, Teekay Shuttle and Offshore Services. Ms. Saether holds an Executive MBA in Shipping Management and has over 20 years of industry experience.

Lois Nahirney joined Teekay Corporation in 2008 and is responsible for shore-based Human Resources, Corporate Communications, Corporate Services, and Information Technology. Ms. Nahirney brings to the role more than 25 years of global experience as a senior executive and consultant in human resources, strategy, organizational change and information systems. Prior to joining Teekay Corporation, she held the position of Acting Chief Human Resources Officer with B.C. Hydro in Vancouver, B.C., Canada and Partner with Western Management Consultants.

Geir Sekkesaeter joined Teekay in 2008 as a leader in Teekay’s fleet operations. In 2011, he was appointed Senior Vice President, Teekay Marine Management unit, which oversees Teekay’s global ship management operations. Prior to joining Teekay, Mr. Sekkesaeter held the position of President at Wilhelmsen Ship Management in Oslo. Mr. Sekkesaeter brings more than 20 years of global experience from ship classification as well as ship management activities. His international experience includes positions in Japan, China, South Korea, UK and Norway. Mr. Sekkesaeter resigned from Teekay effective March 31, 2013.

Compensation of Directors and Senior Management

Director Compensation

During 2012, the nine non-employee directors received, in the aggregate, approximately $1.2 million in cash fees for their service as directors, plus reimbursement of their out-of-pocket expenses. Each non-employee director, other than the Chair of the Board, receives an annual cash retainer of $90,000. The Chairman of the Board receives an annual cash retainer of $375,000. Members of the Audit Committee, Compensation and Human Resources Committee, and Nominating and Governance Committee each receive an annual cash fee of $10,000. The Chairs of the Audit Committee, Compensation and Human Resources Committee, and Nominating and Governance Committee each receive an annual cash fee of $20,000, $17,500 and $15,000, respectively.

Each non-employee director, other than the Chair of the Board, also received a $90,000 annual retainer to be paid by way of a grant of, at the director’s election, restricted stock or stock options under our 2003 Equity Incentive Plan. Pursuant to this annual retainer, during 2012 we granted stock options to purchase an aggregate of 39,522 shares of our common stock at an exercise price of $27.69 per share and 14,625 shares of restricted stock. During 2012 the Chairman of the Board received a $495,000 retainer in the form of stock options to purchase 31,053 shares of our common stock at an exercise price of $27.69 per share and 8,938 shares of restricted stock under our 2003 Equity Incentive Plan. The stock options described above expire March 6, 2022, ten years after the date of their grant. The stock options and restricted stock vest as to one third of the shares on each of the first three anniversaries of their respective grant date.

Annual Executive Compensation

The aggregate compensation earned by Teekay’s 11 executive officers listed above (or the Executive Officers) for 2012 was $8.3 million. This is comprised of base salary ($4.8 million), annual bonus ($2.9 million) and pension and other benefits ($0.6 million). These amounts were paid primarily in Canadian Dollars, but are reported here in U.S. Dollars using an exchange rate of 0.99 Canadian Dollars for each U.S. Dollar, the exchange rate on December 31, 2012. Teekay’s annual bonus plan considers both company performance, through comparison to established targets and individual performance.

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Long-Term Incentive Program

Teekay’s long-term incentive program focuses on the returns realized by our shareholders and is intended to acknowledge and retain those executives who can influence our long-term performance. The long-term incentive plan provides a balance against short-term decisions and encourages a longer time horizon for decisions. This program consists of stock option grants, restricted stock units and performance share units. All grants in 2012 were made under our 2003 Equity Incentive Plan. In March 2013, we adopted a 2013 Equity Incentive Plan and suspended the 2003 Equity Incentive Plan.

During March 2012, we granted stock options to purchase an aggregate of 264,127 shares of our common stock at an exercise price of $27.69, 127,577 shares of restricted stock, and 67,870 performance shares to the Executive Officers under our 2003 Equity Incentive Plan. The stock options expire March 6, 2022, ten years after the date of the grant. The stock options and restricted stock vest as to one third of the shares on each of the first three anniversaries of their grant dates. Performance shares have a bullet vesting at the end of the three year performance cycle.

During March 2013, we granted stock options to purchase an aggregate of 43,974 shares of our common stock at an exercise price of $34.07, 158,957 shares of restricted stock, and 54,773 performance shares to the Executive Officers under our 2013 Equity Incentive Plan. The stock options expire March 12, 2023, ten years after the date of the grant. The stock options and restricted stock vest as to one third of the shares on each of the first three anniversaries of their grant dates. Performance shares have a bullet vesting at the end of the three year performance cycle.

Options to Purchase Securities from Registrant or Subsidiaries

As at December 31, 2012, we had reserved pursuant to our 1995 Stock Option Plan, which was terminated with respect to new grants effective September 10, 2003, and our 2003 Equity Incentive Plan, which was adopted effective on the same date (together, the Plans ), 8,924,470 shares of common stock for issuance upon exercise of options granted or to be granted. During 2012, 2011, and 2010 we granted options under the Plans to acquire up to 432,971, 95,604, and 733,167 shares of common stock, respectively, to eligible officers, employees and directors. Each option under the Plans has a 10-year term and vests equally over three years from the grant date. The outstanding options under the Plans are exercisable at prices ranging from $11.84 to $60.96 per share, with a weighted-average exercise price of $34.40 per share, and expire between March 10, 2013 and March 6, 2022. In March 2013, we adopted a 2013 Equity Incentive Plan and suspended the 2003 Equity Incentive Plan.

Board Practices

As at December 31, 2012, the Board of Directors consisted of ten members. The Board of Directors is divided into three classes, with members of each class elected to hold office for a term of three years in accordance with the classification indicated below or until his or her successor is elected and qualified.

Directors Thomas Kuo-Yuen Hsu, Axel Karlshoej, Bjorn Moller, and Peter Evensen have terms expiring in 2014. Directors Dr. Ian D. Blackburne, William B. Berry, and C. Sean Day have terms expiring in 2015. Directors Peter S. Janson, Eileen A. Mercier and Tore I. Sandvold have terms expiring in 2013.

There are no service contracts between us and any of our directors providing for benefits upon termination of their employment or service.

The Board of Directors has determined that each of the current members of the Board, other than Peter Evensen, our President and Chief Executive Officer, has no material relationship with Teekay (either directly or as a partner, shareholder or officer of an organization that has a relationship with Teekay), and is independent within the meaning of our director independence standards, which reflect the New York Stock Exchange (or NYSE ) director independence standards as currently in effect and as they may be changed from time to time. In making this determination, the Board considered the relationships of Thomas Kuo-Yuen Hsu, Axel Karlshoej and C. Sean Day with our largest shareholder and concluded these relationships do not materially affect their independence as current directors. Please read “Item 7. Major Shareholders and Certain Relationships and Related Party Transactions.”

The Board of Directors has three committees: Audit Committee, Compensation and Human Resources Committee, and Nominating and Governance Committee. The membership of these committees during 2012 and the function of each of the committees are described below. Each of the committees is currently comprised of independent members and operates under a written charter adopted by the Board. All of the committee charters are available under “Corporate Governance” in the Investor Centre of our website at www.teekay.com. During 2012, the Board held four meetings. Each director attended all Board meetings. Each committee member attended all applicable committee meetings, except for one meeting where one director was absent.

Our Audit Committee is composed entirely of directors who satisfy applicable NYSE and SEC audit committee independence standards. Our Audit Committee is currently comprised of Eileen A. Mercier (Chairman), Peter S. Janson, and William B. Berry. All members of the committee are financially literate and the Board has determined that Ms. Mercier qualifies as an audit committee financial expert.

The Audit Committee assists the Board in fulfilling its responsibilities for general oversight of:

• the integrity of our financial statements;

• our compliance with legal and regulatory requirements;

• the independent auditors’ qualifications and independence; and

• the performance of our internal audit function and independent auditors.

Our Compensation and Human Resources Committee is currently comprised of Peter S. Janson (Chairman), C. Sean Day, Axel Karlshoej and Ian D. Blackburne.

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The Compensation and Human Resources Committee:

• reviews and approves corporate goals and objectives relevant to the Chief Executive Officer’s compensation, evaluates the Chief Executive Officer’s performance in light of these goals and objectives, and determines the Chief Executive Officer’s compensation;

• reviews and approves the evaluation process and compensation structure for executive officers, other than the Chief Executive Officer, evaluates their performance and sets their compensation based on this evaluation;

• reviews and makes recommendations to the Board regarding compensation for directors;

• establishes and administers long-term incentive compensation and equity-based plans; and

• oversees our other compensation plans, policies and programs.

Our Nominating and Governance Committee is currently comprised of Ian D. Blackburne (Chairman), Tore I. Sandvold, Eileen A. Mercier and Thomas Kuo-Yuen Hsu.

The Nominating and Governance Committee:

• identifies individuals qualified to become Board members;

• selects and recommends to the Board director and committee member candidates;

• develops and recommends to the Board corporate governance principles and policies applicable to us, monitors compliance with these principles and policies and recommends to the Board appropriate changes; and

• oversees the evaluation of the Board and management.

Crewing and Staff

As at December 31, 2012, we employed approximately 5,600 seagoing and 900 shore-based personnel, compared to approximately 5,500 seagoing and 1,000 shore-based personnel as at December 31, 2011, and 5,500 seagoing and 900 shore-based personnel as at December 31, 2010.

We regard attracting and retaining motivated seagoing personnel as a top priority. Through our global manning organization comprised of offices in Glasgow, Scotland; Manila, Philippines; Mumbai, India; Sydney, Australia; and Madrid, Spain, we offer seafarers what we believe are competitive employment packages and comprehensive benefits. We also intend to provide opportunities for personal and career development, which relate to our philosophy of promoting internally.

During fiscal 1996, we entered into a collective bargaining agreement with the Philippine Seafarers’ Union, an affiliate of the International Transport Workers’ Federation (or ITF), and an agreement with ITF London that cover substantially all of our junior officers and seamen. We are also party to collective bargaining agreements with various Australian maritime unions that cover officers and seamen employed through our Australian operations. Our officers and seamen for our Spanish-flagged vessels are covered by a collective bargaining agreement with Spain’s Union General de Trabajadores and Comisiones Obreras. We believe our relationships with these labor unions are good.

We see our commitment to training as fundamental to the development of the highest caliber seafarers for our marine operations. Our cadet training program is designed to balance academic learning with hands-on training at sea. We have relationships with training institutions in Canada, Croatia, India, Norway, Philippines, Turkey and the United Kingdom. After receiving formal instruction at one of these institutions, the cadets’ training continues on board a Teekay vessel. We also have an accredited Teekay-specific competence management system that is designed to ensure a continuous flow of qualified officers who are trained on our vessels and are familiar with our operational standards, systems and policies. We believe that high-quality manning and training policies will play an increasingly important role in distinguishing larger independent tanker companies that have in-house, or affiliate, capabilities from smaller companies that must rely on outside ship managers and crewing agents.

Share Ownership

The following table sets forth certain information regarding beneficial ownership, as of December 31, 2012, of our common stock by the directors and Executive Officers as a group. The information is not necessarily indicative of beneficial ownership for any other purpose. Under SEC rules a person or entity beneficially owns any shares that the person or entity (a) has or shares voting or investment power or (b) has the right to acquire as of March 1, 2013 (60 days after December 31, 2012) through the exercise of any stock option or other right. Unless otherwise indicated, each person or entity has sole voting and investment power (or shares such powers with his or her spouse) with respect to the shares set forth in the following table. Information for certain holders is based on information delivered to us.

Identity of Person or Group	Shares Owned			Percent of Class
All directors and executive officers as a group (18 persons)(1)		3,301,889	(3)		4.7	%(2)

(1) Includes 2,528,368 shares of common stock subject to stock options exercisable by March 1, 2013 under the Plans with a weighted-average exercise price of $35.36 that expire between May 5, 2013 and March 14, 2021. Excludes (a) 526,903 shares of common stock subject to stock options exercisable after March 1, 2013 under the Plans with a weighted average exercise price of $26.75, that expire between March 8, 2020 and March 6, 2022 and (b) 336,500 shares of restricted stock which vest after March 1, 2013, and (c) 211,508 performance shares which vest after March 1, 2013.

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(2) Based on a total of approximately 69.7 million outstanding shares of our common stock as of December 31, 2012. Each director and Executive Officer beneficially owns less than 1% of the outstanding shares of common stock.

(3) Each director is expected to have acquired shares having a value of at least four times the value of the annual cash retainer paid to them for their Board service (excluding fees for Chair or Committee service) no later than March 1, 2013 or the fifth anniversary of the date on which the director joined the Board, whichever is later. In addition, each Executive Officer is expected to acquire shares of Teekay’s common stock equivalent in value to one to three times their annual base salary by 2014 or, for executive officers subsequently joining Teekay or achieving a position covered by the guidelines, within five years after the guidelines become applicable to them.

Item 7. Major Shareholders and Certain Relationships and Related Party Transactions

Major Shareholders

The following table sets forth information regarding beneficial ownership, as of March 1, 2013, of Teekay’s common stock by each person we know to beneficially own more than 5% of the common stock. Information for certain holders is based on their latest filings with the SEC or information delivered to us. The number of shares beneficially owned by each person or entity is determined under SEC rules and the information is not necessarily indicative of beneficial ownership for any other purpose. Under SEC rules, a person or entity beneficially owns any shares as to which the person or entity has or shares voting or investment power. In addition, a person or entity beneficially owns any shares that the person or entity has the right to acquire as of April 30, 2013 (60 days after March 1, 2013) through the exercise of any stock option or other right. Unless otherwise indicated, each person or entity has sole voting and investment power (or shares such powers with his or her spouse) with respect to the shares set forth in the following table.

Identity of Person or Group	Shares Owned		Percent of  Class(3)
Resolute Investments, Ltd.(1)		31,260,780		44.7	%
Neuberger Berman Group LLC(2)		5,160,693		7.4	%

(1) Includes shared voting and shared dispositive power. The ultimate controlling person of Resolute Investments, Ltd. (or Resolute) is Path Spirit Limited (or Path), which is the trust protector for the trust that indirectly owns all of Resolute’s outstanding equity. This information is based on the Schedule 13D/A (Amendment No. 5) filed by Resolute and Path with the SEC on November 14, 2011. Resolute’s beneficial ownership was 44.7% on March 1, 2013, and 45.5% on March 11, 2012. One of our directors, Thomas Kuo-Yuen Hsu, is the President and a director of Resolute. Another of our directors, Axel Karlshoej, is among the directors of Path. Our Chairman, C. Sean Day, is engaged as a consultant to Kattegat Limited, the parent company of Resolute, to oversee its investments, including that in the Teekay group of companies.

(2) Includes shared voting power and shared dispositive power. This information is based on the Schedule 13G/A filed by this investor with the SEC on February 14, 2013.

(3) Based on a total of 69.9 million outstanding shares of our common stock as of March 1, 2013.

Our major shareholders have the same voting rights as our other shareholders. No corporation or foreign government or other natural or legal person owns more than 50% of our outstanding common stock. We are not aware of any arrangements, the operation of which may at a subsequent date result in a change in control of Teekay.

Teekay and certain of its subsidiaries have relationships or are parties to transactions with other Teekay subsidiaries, including Teekay’s publicly traded subsidiaries Teekay LNG, Teekay Offshore and Teekay Tankers. Certain of these relationships and transactions are described below.

Our Major Shareholder

As of March 1, 2013, Resolute owned approximately 44.7% of our outstanding common stock. The ultimate controlling person of Resolute is Path, which is the trust protector for the trust that indirectly owns all of Resolute’s outstanding equity. One of our directors, Thomas Kuo-Yuen Hsu, is the President and a director of Resolute. Another of our directors, Axel Karlshoej, is among the directors of Path. Our Chairman, C. Sean Day, is engaged as a consultant to Kattegat Limited, the parent company of Resolute, to oversee its investments, including that in the Teekay group of companies. Please read “Item 18. Financial Statements: Note 13—Related Party Transactions.”

Our Directors and Executive Officers

C. Sean Day, the Chairman of Teekay’s board of directors, is also the Chairman of Teekay Tankers Ltd., Teekay Offshore GP L.L.C. (the general partner of Teekay Offshore) and Teekay GP L.L.C. (the general partner of Teekay LNG). Bjorn Moller is one of Teekay’s current directors and is also a director of Teekay Tankers Ltd.. Mr. Moller also served as Teekay’s Chief Executive Officer, Teekay Tankers’ Chief Executive Officer, and as a Vice Chairman and director of each of Teekay Offshore GP L.L.C. and Teekay GP L.L.C., in each case until April 1, 2011. Peter Evensen, a Teekay director and President and Chief Executive Officer of Teekay, is a director of Teekay Tankers and the Chief Executive Officer and Chief Financial Officer and a director of each of Teekay Offshore GP L.L.C. and Teekay GP L.L.C.

Vincent Lok, Teekay’s Executive Vice President and Chief Financial Officer, is also the Chief Financial Officer of Teekay Tankers. Kenneth Hvid is Teekay’s Executive Vice President and Chief Strategy Officer and is a director of each of Teekay GP L.L.C. and Teekay Offshore GP L.L.C. Bruce Chan is the Chief Executive Officer of Teekay Tankers Ltd. and President of Teekay Tanker Services, a division of Teekay. Because the executive officers of Teekay Tankers and of the general partners of Teekay Offshore and Teekay LNG are employees of Teekay or other of its subsidiaries, their compensation (other than any awards under the respective long-term incentive plans of Teekay Tankers, Teekay Offshore and Teekay LNG) is set and paid by Teekay or such other applicable subsidiaries.

Pursuant to agreements with Teekay, each of Teekay Tankers, Teekay Offshore and Teekay LNG have agreed to reimburse Teekay or its applicable subsidiaries for time spent by the executive officers on management matters of such public company subsidiaries. For 2012, these reimbursement obligations totaled approximately $2.7 million, $4.0 million, and $3.7 million, respectively, for Teekay Tankers, Teekay Offshore and

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Teekay LNG, and are included in amounts paid as strategic fees under the management agreement for Teekay Tankers and the services agreements for Teekay Offshore and Teekay LNG described below. For 2010 and 2011, these reimbursement obligations for Teekay Tankers, Teekay Offshore and Teekay LNG totaled $1.0 million, $1.7 million and $1.4 million, and $1.7 million, $3.0 million, and $2.4 million, respectively.

Relationships with Our Public Company Subsidiaries

Teekay Tankers

Teekay Tankers is a NYSE-listed, Marshall Islands corporation, which we formed to acquire from us a fleet of double-hull oil tankers in connection with Teekay Tankers’ initial public offering in December 2007. Teekay Tankers’ business is to own oil tankers and employ a chartering strategy that seeks to capture upside opportunities in the spot market while using fixed-rate time charters to reduce downside risks. Its operations are managed by our subsidiary Teekay Tankers Management Services Ltd.

As of March 1, 2013, we owned shares of Teekay Tankers’ Class A and Class B common stock that represented an ownership interest of 25.1% and voting power of 53.1% of Teekay Tankers’ outstanding common stock.

To December 31, 2012, Teekay Tankers distributed to its stockholders on a quarterly basis all of its Cash Available for Distribution, subject to any reserves the board of directors may from time to time determine are required for the prudent conduct of the business. Cash Available for Distribution represents Teekay Tankers’ net income (loss) plus depreciation and amortization, unrealized losses from derivatives, non-cash items and any write-offs or other non-recurring items less unrealized gains from derivatives and net income attributable to the historical results of vessels acquired by Teekay Tankers from us, prior to their acquisition by Teekay Tankers, for the period when these vessels were owned and operated by us. We received distributions from Teekay Tankers of $19.9 million, $13.4 million and $7.1 million, respectively, with respect to 2010, 2011, and 2012. Effective January 1, 2013, Teekay Tankers announced a change to a fixed dividend policy of $0.12 per share per annum, which, based on our share holdings of Teekay Tankers as of January 1, 2013, will result in us receiving distributions of $2.5 million annually from Teekay Tankers.

Teekay Offshore and Teekay LNG

Teekay Offshore is a NYSE-listed, Marshall Islands limited partnership, which we formed to further develop our operations in the offshore market. Teekay Offshore is an international provider of marine transportation and storage services to the offshore oil industry. We own and control Teekay Offshore’s general partner, and as of March 1, 2013, we owned a 27.4% limited partner and a 2% general partner interest in Teekay Offshore.

Teekay LNG is a NYSE-listed, Marshall Islands limited partnership, which we formed to expand our operations in the LNG shipping sector. Teekay LNG is an international provider of marine transportation services for LNG, LPG and crude oil. We own and control Teekay LNG’s general partner, and as of March 1, 2013, we owned a 35.5% limited partner and a 2% general partner interest in Teekay LNG.

Quarterly Cash Distributions

We are entitled to distributions on our general and limited partner interests in Teekay Offshore and Teekay LNG, respectively. The general partner of each of Teekay Offshore and Teekay LNG is also entitled to distributions payable with respect to incentive distribution rights. Incentive distribution rights represent the right to receive an increasing percentage of quarterly distributions of available cash from operating surplus after the minimum quarterly distribution and the target distribution levels have been achieved. In general, each of Teekay Offshore and Teekay LNG pays quarterly cash distributions in the following manner:

• first, 98% to all unitholders, pro rata, and 2% to the general partner, until each unitholder has received a total of $0.4025 (Teekay Offshore) or $0.4625 (Teekay LNG) per unit for that quarter;

• second, 85% to all unitholders, and 15% to the general partner, until each unitholder has received a total of $0.4375 (Teekay Offshore) or $0.5375 (Teekay LNG) per unit for that quarter;

• third, 75% to all unitholders, and 25% to the general partner, until each unitholder has received a total of $0.525 (Teekay Offshore) or $0.65 (Teekay LNG) per unit for that quarter; and

• thereafter, 50% to all unitholders and 50% to the general partner.

Teekay received total distributions, including incentive distributions, from Teekay Offshore of $32.2 million, $48.7 million, and $56.8 million, respectively, with respect to 2010, 2011, and 2012.

Teekay received total distributions, including incentive distributions, from Teekay LNG of $71.2 million, $76.0 million, and $87.4 million, respectively, with respect to 2010, 2011, and 2012.

Competition with Teekay Tankers, Teekay Offshore and Teekay LNG

We have entered into an omnibus agreement with Teekay LNG, Teekay Offshore and related parties governing, among other things, when Teekay, Teekay LNG, and Teekay Offshore may compete with each other and providing for rights of first offer on the transfer or rechartering of certain LNG carriers, oil tankers, shuttle tankers, FSO units and FPSO units. Subject to applicable exceptions, the omnibus agreement generally provides that (a) neither Teekay nor Teekay LNG will own or operate offshore vessels (i.e. dynamically positioned shuttle tankers, FSO units and FPSO units) that are subject to contracts with a duration of three years or more, excluding extension options, (b) neither Teekay nor Teekay Offshore will own or operate LNG carriers and (c) neither Teekay LNG nor Teekay Offshore will own or operate crude oil tankers.

In addition, Teekay Tankers’ organization documents provide that Teekay may pursue business opportunities attractive to both parties and of which either party becomes aware. These business opportunities may include, among other things, opportunities to charter out, charter in or acquire oil tankers or to acquire tanker businesses.

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In June 2012, in connection with the acquisition by Teekay Tankers of 13 vessels from Teekay, we entered into a non-competition agreement with Teekay Tankers that provides Teekay Tankers with a right of first refusal to participate in any future conventional crude oil tanker and product tanker opportunities identified or developed by us for a period of three years.

Sales of Vessels and Project Interests by Teekay to Teekay Tankers, Teekay Offshore and Teekay LNG

From time to time Teekay has sold to Teekay Tankers, Teekay Offshore and Teekay LNG vessels or interests in vessel owning subsidiaries or joint ventures. These transactions include those described under “Item 5. Operating and Financial Review and Prospects—Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Teekay currently has committed to the following vessel transactions with its public company subsidiaries:

• We have agreed to offer the Petrojarl Foinaven FPSO unit to Teekay Offshore prior to July 9, 2013. The purchase price for the Foinaven FPSO unit would be our fair market value plus any additional tax or other similar costs to Teekay Petrojarl that would be required to transfer the FPSO unit to Teekay Offshore.

• In October 2010, we announced that we had signed a contract with Petroleo Brasileiro SA (or Petrobras) to provide an FPSO unit for the Tiro and Sidon fields located in the Santos Basin offshore Brazil. The new FPSO unit, Petrojarl Cidade de Itajai, was recently converted from an existing Aframax tanker at a cost of approximately $380 million, of which our share was $190 million, Petrojarl Cidade de Itajai achieved first oil in February 2013 and commenced operations under a nine-year, fixed-rate time-charter-out contract to Petrobras with six additional one-year extension options exercisable by Petrobras. In April 2013, pursuant to the omnibus agreement, we offered to Teekay Offshore our 50% interest in this FPSO unit at our fully built-up cost.

• In November 2011, we agreed to acquire from Sevan Marine ASA (Sevan) the Voyageur Spirit (formerly known as the Sevan Voyageur) FPSO unit upon the completion of certain upgrades. In June 2012, we offered the Voyageur Spirit to Teekay Offshore for a purchase price of approximately $540 million. In September 2012, we entered into an agreement to sell, subject to certain conditions, the Voyageur Spirit to Teekay Offshore for such price following its commencement of operations under a long-term charter contract with E.ON Ruhrgas UK E&P Limited (or E.ON). Operations commenced under the charter in April 2013 after the FPSO unit produced “first oil” in the North Sea’s Huntington Field. The charter contract has an initial term of five years, with up to 10 one-year extension options exercisable by E.ON., subject to certain conditions. Conditions to the closing of Teekay Offshore’s acquisition of the unit include, among others, Teekay Offshore obtaining financing and that we have acquired the Voyageur Spirit and related assets pursuant to the terms of our acquisition agreement with Sevan.

Time Chartering and Bareboat Chartering Arrangements

Teekay charters in from or out to its public company subsidiaries certain vessels, including the following charter arrangements:

• During 2012, six of Teekay Offshore’s conventional tankers were chartered out to Teekay subsidiaries under long-term time charters. Two of Teekay Offshore’s shuttle tankers are chartered out to Teekay subsidiaries under long-term bareboat charters. Pursuant to these charter contracts, Teekay Offshore earned voyage revenues of $119.8 million, $140.9 million, and $102.8 million, respectively, for 2010, 2011, and 2012.

• Two of Teekay Offshore’s FSO units are chartered out to Teekay subsidiaries under long-term bareboat charters. Pursuant to these charter contracts, Teekay Offshore earned voyage revenues of $11.2 million, $11.0 million, and $11.2 million, respectively, for 2010, 2011, and 2012.

• Beginning August 2008, Teekay had been chartering in from Teekay Tankers the tanker Nassau Spirit under a fixed-rate time charter that expired in July 2010 and was replaced by a 12-month time-charter contract with a third party, which started immediately after the expiration of the in-charter contract with Teekay and has since expired. During 2010, 2011, and 2012, Teekay Tankers earned revenues of $6.9 million, $nil, and $nil respectively, under this time-charter contract.

• Since April 2008, Teekay has chartered in from Teekay LNG the LNG carriers Arctic Spirit and Polar Spirit under a fixed-rate time charter for a period of ten years, plus options exercisable by Teekay to extend up to an additional 15 years. During 2010, 2011, and 2012, Teekay LNG earned revenues of $36.5 million, $35.1 million, and $37.6 million, respectively, under these time-charter contracts.

Services, Management and Pooling Arrangements

Services Agreements. In connection with their initial public offerings in May 2005 and December 2006, respectively, and subsequent thereto, Teekay LNG and Teekay Offshore and certain of their subsidiaries have entered into services agreements with certain other subsidiaries of Teekay, pursuant to which the other Teekay subsidiaries provide to Teekay LNG, Teekay Offshore and their subsidiaries administrative, advisory and technical and ship management services. These services are provided in a commercially reasonable manner and upon the reasonable request of the general partner or subsidiaries of Teekay LNG or Teekay Offshore, as applicable. The other Teekay subsidiaries that are parties to the services agreements provide these services directly or subcontract for certain of these services with other entities, including other Teekay subsidiaries. Teekay LNG and Teekay Offshore pay arm’s-length fees for the services that include reimbursement of the reasonable cost of any direct and indirect expenses the other Teekay subsidiaries incur in providing these services. During 2010, 2011, and 2012, Teekay LNG and Teekay Offshore incurred expenses of $18.7 million, $18.2 million, and $22.3 million, and $49.6 million, $60.3 million, and $59.9 million, respectively, for these services.

Management Agreement. In connection with its initial public offering, Teekay Tankers entered into the long-term management agreement with Teekay Tankers Management Services Ltd., a subsidiary of Teekay (the Manager). Subject to certain limited termination rights, the initial term of the management agreement will expire on December 31, 2022. If not terminated, the agreement will automatically renew for five-year periods.

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Termination fees are required for early termination by Teekay Tankers under certain circumstances. Pursuant to the management agreement, the Manager provides to Teekay Tankers the following types of services: commercial (primarily vessel chartering), technical (primarily vessel maintenance and crewing), administrative (primarily accounting, legal and financial) and strategic (primarily advising on acquisitions, strategic planning and general management of the business). The Manager has agreed to use its best efforts to provide these services upon Teekay Tankers’ request in a commercially reasonable manner and may provide these services directly to Teekay Tankers or subcontract for certain of these services with other entities, primarily other Teekay subsidiaries.

In return for services under the management agreement, Teekay Tankers pays the Manager an agreed-upon fee for commercial services (other than for Teekay Tankers vessels participating in pooling arrangements), a technical services fee equal to the average rate Teekay charges third parties to technically manage their vessels of a similar size, and fees for administrative and strategic services that reimburse the Manager for its related direct and indirect expenses in providing such services and which includes a profit margin. During 2010, 2011, and 2012, Teekay Tankers incurred $5.6 million, $7.5 million, and $9.9 million, respectively, for these services.

The management agreement also provides for the payment of a performance fee in order to provide the Manager an incentive to increase cash available for distribution to Teekay Tankers’ stockholders. Teekay Tankers did not incur any performance fees for 2012, 2011 or 2010.

Pooling Arrangements. Certain Aframax and Suezmax tankers of Teekay Tankers participate in vessel pooling arrangements managed by other Teekay subsidiaries. The pool managers provide commercial services to the pool participants and administer the pools in exchange for a fee currently equal to 1.25% of the gross revenues attributable to each pool participant’s vessels and a fixed amount per vessel per day which ranges from $325 (for the Suezmax tanker pool) to $350 (for the Aframax tanker pool). Voyage revenues and voyage expenses of Teekay Tankers’ vessels operating in these pool arrangements are pooled with the voyage revenues and voyage expenses of other pool participants. The resulting net pool revenues, calculated on a time charter equivalent basis, are allocated to the pool participants according to an agreed formula. Teekay Tankers incurred pool management fees during 2010, 2011, and 2012 of $1.9 million, $1.8 million and $3.6 million, respectively.

Item 8. Financial Information

Consolidated Financial Statements and Notes

Please see Item 18 below for additional information required to be disclosed under this Item.

Legal Proceedings

From time to time we have been, and we expect to continue to be, subject to legal proceedings and claims in the ordinary course of our business, principally personal injury and property casualty claims. Such claims, even if lacking merit, could result in the expenditure of significant financial and managerial resources. We are not aware of any legal proceedings or claims that we believe will have, individually or in the aggregate, a material adverse effect on our financial condition or results of operations. For information about a recent legal proceeding, please read “Item 18. Financial Statements: Note 16 (d)—Legal Proceedings and Claims.”

Dividend Policy

Commencing with the quarter ended September 30, 1995, we declared and paid quarterly cash dividends in the amount of $0.1075 per share on our common stock. We increased our quarterly dividend from $0.1375 to $0.2075 per share in the fourth quarter of 2005, from $0.2075 to $0.2375 in the fourth quarter of 2006, from $0.2375 to $0.275 in the fourth quarter of 2007, and from $0.275 to $0.31625 in the fourth quarter of 2008. Subject to financial results and declaration by the Board of Directors, we currently intend to continue to declare and pay a regular quarterly dividend in such amount per share on our common stock. Pursuant to our dividend reinvestment program, holders of common stock are permitted to choose, in lieu of receiving cash dividends, to reinvest any dividends in additional shares of common stock at then-prevailing market prices, but without brokerage commissions or service charges.

The timing and amount of dividends, if any, will depend, among other things, on our results of operations, financial condition, cash requirements, restrictions in financing agreements and other factors deemed relevant by our Board of Directors. Because we are a holding company with no material assets other than the stock of our subsidiaries, our ability to pay dividends on the common stock depends on the earnings and cash flow of our subsidiaries.

Significant Changes

Please read “Item 18. Financial Statements: Note 25—Subsequent Events.”

Item 9. The Offer and Listing

Our common stock is traded on the NYSE under the symbol “TK”. The following table sets forth the high and low prices for our common stock on the NYSE for each of the periods indicated.

	Dec. 31,		Dec. 31,		Dec. 31,		Dec. 31,		Dec. 31,
Years Ended	2012		2011		2010		2009		2008
High	$	36.60	$	37.93	$	33.96	$	24.94	$	53.30
Low	$	24.89	$	20.67	$	20.42	$	11.10	$	11.50

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	Mar. 31,		Dec. 31,		Sept. 30,		Jun. 30,		Mar. 31,		Dec. 31,		Sept. 30,		Jun. 30,		Mar. 31,
Quarters Ended	2013		2012		2012		2012		2012		2011		2011		2011		2011
High	$	36.69	$	32.97	$	33.70	$	36.60	$	35.60	$	28.50	$	31.78	$	37.93	$	37.19
Low	$	32.49	$	28.88	$	27.35	$	24.98	$	24.89	$	20.67	$	21.37	$	29.81	$	31.55

	Mar. 31,		Feb. 29,		Jan. 31,		Dec. 31,		Nov. 30,		Oct. 31,
Months Ended	2013		2013		2013		2012		2012		2012
High	$	36.20	$	35.92	$	36.69	$	32.97	$	32.53	$	32.84
Low	$	33.37	$	32.49	$	32.61	$	30.56	$	28.88	$	29.23

Item 10. Additional Information

Memorandum and Articles of Association

Our Amended and Restated Articles of Incorporation, as amended, have been filed as exhibits 1.1 and 1.2 to our Annual Report on Form 20-F (File No. 1-12874), filed with the SEC on April 7, 2009, and are hereby incorporated by reference into this Annual Report. Our Bylaws have previously been filed as exhibit 1.3 to our Report on Form 6-K (File No. 1-12874), filed with the SEC on August 31, 2011, and are hereby incorporated by reference into this Annual Report.

The rights, preferences and restrictions attaching to each class of our capital stock are described in the section entitled “Description of Capital Stock” of our Rule 424(b) prospectus (Registration No. 333-52513), filed with the SEC on June 10, 1998, and hereby incorporated by reference into this Annual Report, provided that since the date of such prospectus (1) the par value of our capital stock has been changed to $0.001 per share, (2) our authorized capital stock has been increased to 725,000,000 shares of common stock and 25,000,000 shares of Preferred Stock, (3) we have been domesticated in the Republic of The Marshall Islands and (4) we have adopted a staggered Board of Directors, with directors serving three-year terms.

The necessary actions required to change the rights of holders of our capital stock and the conditions governing the manner in which annual and special meetings of shareholders are convened are described in our Bylaws filed as exhibit 1.3 to our Report on Form 6-K (File No. 1-12874), filed with the SEC on August 31, 2011, and hereby incorporated by reference into this Annual Report.

We have in place a rights agreement that would have the effect of delaying, deferring or preventing a change in control of Teekay. The amended and restated rights agreement has been filed as part of our Form 8-A/A (File No. 1-12874), filed with the SEC on July 2, 2010, and hereby incorporated by reference into this Annual Report.

There are no limitations on the rights to own securities, including the rights of non-resident or foreign shareholders to hold or exercise voting rights on the securities imposed by the laws of the Republic of The Marshall Islands or by our Articles of Incorporation or Bylaws.

Material Contracts

The following is a summary of each material contract, other than material contracts entered into in the ordinary course of business, to which we or any of our subsidiaries, other than our publicly listed subsidiaries, is a party, for the two years immediately preceding the date of this Annual Report:

(a) Indenture dated June 22, 2001 among Teekay Corporation and The Bank of New York Trust Company of Florida (formerly U.S. Trust Company of Texas, N.A.) for U.S. $250,000,000 8.875% Senior Notes due 2011.

(b) First Supplemental Indenture dated as of December 6, 2001, among Teekay Corporation and The Bank of New York Trust Company of Florida, N.A. for U.S. $100,000,000 8.875% Senior Notes due 2011.

(c) Agreement, dated June 26, 2003, for a U.S. $550,000,000 Secured Reducing Revolving Loan Facility among Norsk Teekay Holdings Ltd., Den Norske Bank ASA and various other banks.

(d) Agreement, dated September 1, 2004 for a U.S. $500,000,000 Credit Facility Agreement to be made available to Teekay Nordic Holdings Incorporated by Nordea Bank Finland PLC, New York Branch.

(e) Supplemental Agreement dated September 30, 2004 to Agreement, dated June 26, 2003, for a U.S. $550,000,000 Secured Reducing Revolving Loan Facility among Norsk Teekay Holdings Ltd., Den Norske Bank ASA and various other banks.

(f) Agreement, dated May 26, 2005 for a U.S. $550,000,000 Credit Facility Agreement to be made available to Avalon Spirit LLC et al by Nordea Bank Finland PLC and others.

(g) Agreement, dated October 2, 2006 for a U.S. $940,000,000 Secured Reducing Revolving Loan Facility among Teekay Offshore Operating L.P., Den Norske Bank ASA and various other banks. Please read Note 8 to the Consolidated Financial Statements of Teekay Corporation included herein for a summary of certain contract terms relating to our revolving loan facilities.

(h) Agreement, dated August 23, 2006 for a U.S. $330,000,000 Secured Reducing Revolving Loan Facility among Teekay LNG Partners L.P., ING Bank N.V. and various other banks. Please read Note 8 to the Consolidated Financial Statements of Teekay Corporation included herein for a summary of certain contract terms relating to our revolving loan facilities.

(i) Agreement, dated November 28, 2007 for a U.S. $845,000,000 Secured Reducing Revolving Loan Facility among Teekay Corporation, Teekay Tankers Ltd., Nordea Bank Finland PLC and various other banks. Please read Note 8 to the Consolidated Financial Statements of Teekay Corporation included herein for a summary of certain contract terms relating to our revolving loan facilities.

(j) Agreement dated May 16, 2007 for a U.S. $700,000,000 Credit Facility Agreement to be made available to Teekay Acquisition Holdings LLC et al by HSH NordBank AG and others.

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(k) Annual Executive Bonus Plan.

(l) Vision Incentive Plan.

(m) 2003 Equity Incentive Plan.

(n) Amended 1995 Stock Option Plan.

(o) Amended and Restated Rights Agreement, dated as of July 2, 2010, between Teekay Corporation and The Bank of New York, as Rights Agent.

(p) Amended and Restated Omnibus Agreement dated as of December 19, 2006, among Teekay Corporation, Teekay GP L.L.C., Teekay LNG Partners L.P., Teekay LNG Operating L.L.C., Teekay Offshore GP L.L.C., Teekay Offshore Partners L.P., Teekay Offshore Operating GP. L.L.C. and Teekay Offshore Operating L.P. govern, among other things, when Teekay Corporation, Teekay LNG L.P. and Teekay Offshore L.P. may compete with each other and to provide the applicable parties certain rights of first offer on LNG carriers, oil tankers, shuttle tankers, FSO units and FPSO units.

(q) Indenture dated January 27, 2010 among Teekay Corporation and The Bank of New York Mellon Trust Company, N.A. for U.S. $450,000,000 8.5% Senior Unsecured Notes due 2020.

(r) Agreement, dated October 5, 2012, for NOK 700,000,000 Senior Unsecured Bonds due October 2015, among us and Norsk Tillitsmann ASA. All payments are at NIBOR plus 4.75% per annum.

(s) 2013 Equity Incentive Plan.

(t) Agreement, dated December 21, 2012 for a U.S. $200,000,000 Margin Loan Agreement among Teekay Finance Limited, Citibank, N.A. and others.

Exchange Controls and Other Limitations Affecting Security Holders

We are not aware of any governmental laws, decrees or regulations, including foreign exchange controls, in the Republic of The Marshall Islands that restrict the export or import of capital or that affect the remittance of dividends, interest or other payments to non-resident holders of our securities.

We are not aware of any limitations on the right of non-resident or foreign owners to hold or vote our securities imposed by the laws of the Republic of The Marshall Islands or our Articles of Incorporation and Bylaws.

Taxation

Teekay Corporation was incorporated in the Republic of Liberia on February 9, 1979 and was domesticated in the Republic of The Marshall Islands on December 20, 1999. Its principal executive headquarters are located in Bermuda. The following provides information regarding taxes to which a U.S. Holder of our common stock may be subject.

Material U.S. Federal Income Tax Considerations

The following is a discussion of the material U.S. federal income tax considerations that may be relevant to stockholders. This discussion is based upon the provisions of the Internal Revenue Code of 1986, as amended (or the Code), legislative history, applicable U.S. Treasury Regulations (or Treasury Regulations), judicial authority and administrative interpretations, all as in effect on the date of this Annual Report and which are subject to change, possibly with retroactive effect, or are subject to different interpretations. Changes in these authorities may cause the tax consequences to vary substantially from the consequences described below. Unless the context otherwise requires, references in this section to “we,” “our” or “us” are references to Teekay Corporation.

This discussion is limited to stockholders who hold their common stock as a capital asset for tax purposes. This discussion does not address all tax considerations that may be important to a particular stockholder in light of the stockholder’s circumstances, or to certain categories of stockholders that may be subject to special tax rules, such as:

• dealers in securities or currencies,

• traders in securities that have elected the mark-to-market method of accounting for their securities,

• persons whose functional currency is not the U.S. dollar,

• persons holding our common stock as part of a hedge, straddle, conversion or other “synthetic security” or integrated transaction,

• certain U.S. expatriates,

• financial institutions,

• insurance companies,

• persons subject to the alternative minimum tax,

• persons that actually or under applicable constructive ownership rules own 10% or more of our common stock; and

• entities that are tax-exempt for U.S. federal income tax purposes.

If a partnership (including any entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds our common stock, the tax treatment of a partner generally will depend upon the status of the partner and the activities of the partnership. If you are a partner in a partnership holding our common stock, you should consult your own tax advisor about the U.S. federal income tax consequences of owning and disposing of the common stock.

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This discussion does not address any U.S. estate tax considerations or tax considerations arising under the laws of any state, local or non-U.S. jurisdiction. Each stockholder is urged to consult its own tax advisor regarding the U.S. federal, state, local and other tax consequences of the ownership or disposition of our common stock.

United States Federal Income Taxation of U.S. Holders

As used herein, the term U.S. Holder means a beneficial owner of our common stock that is (i) a U.S. citizen or U.S. resident alien, (ii) a corporation or other entity taxable as a corporation for U.S. federal income tax purposes, that was created or organized in or under the laws of the United States, any state thereof or the District of Columbia, (iii) an estate whose income is subject to U.S. federal income taxation regardless of its source, or (iv) a trust that either is subject to the supervision of a court within the United States and has one or more U.S. persons with authority to control all of its substantial decisions or has a valid election in effect under applicable U.S. Treasury Regulations to be treated as a U.S. person.

Distributions

Subject to the discussion of passive foreign investment companies (or PFICs) below, any distributions made by us with respect to our common stock to a U.S. Holder generally will constitute dividends, which may be taxable as ordinary income or “qualified dividend income” as described in more detail below, to the extent of our current and accumulated earnings and profits, as determined under U.S. federal income tax principles. Distributions in excess of our earnings and profits will be treated first as a nontaxable return of capital to the extent of the U.S. Holder’s tax basis in its common stock and thereafter as capital gain. U.S. Holders that are corporations for U.S. federal income tax purposes generally will not be entitled to claim a dividends received deduction with respect to any distributions they receive from us. Dividends paid with respect to our common stock generally will be treated as “passive category income” or, in the case of certain types of U.S. Holders, “general category income” for purposes of computing allowable foreign tax credits for U.S. federal income tax purposes.

Dividends paid on our common stock to a U.S. Holder who is an individual, trust or estate (or a U.S. Individual Holder) will be treated as “qualified dividend income” that is taxable to such U.S. Individual Holder at preferential capital gain tax rates provided that: (i) our common stock is readily tradable on an established securities market in the United States (such as the New York Stock Exchange on which our common stock is traded); (ii) we are not a PFIC for the taxable year during which the dividend is paid or the immediately preceding taxable year (we intend to take the position that we are not now and have never been a PFIC, as discussed below); (iii) the U.S. Individual Holder has owned the common stock for more than 60 days in the 121-day period beginning 60 days before the date on which the common stock becomes ex-dividend; (iv) the U.S. Individual Holder is not under an obligation to make related payments with respect to positions in substantially similar or related property; and (v) certain other conditions are met. There is no assurance that any dividends paid on our common stock will be eligible for these preferential rates in the hands of a U.S. Individual Holder. Any dividends paid on our common stock not eligible for these preferential rates will be taxed as ordinary income to a U.S. Individual Holder.

Special rules may apply to any “extraordinary dividend” paid by us. An extraordinary dividend is, generally, a dividend with respect to a share of stock if the amount of the dividend is equal to or in excess of 10% of a stockholder’s adjusted basis (or fair market value in certain circumstances) in such stock. In addition, extraordinary dividends include dividends received within a one year period that, in the aggregate, equal or exceed 20% of a shareholder’s adjusted tax basis. If we pay an “extraordinary dividend” on our common stock that is treated as “qualified dividend income,” then any loss derived by a U.S. Individual Holder from the sale or exchange of such common stock will be treated as long-term capital loss to the extent of such dividend.

Certain U.S. Individual Holders are subject to a 3.8% tax on certain investment income, including dividends, for taxable years beginning after December 31, 2012. U.S. Individual Holders should consult their tax advisors regarding the effect, if any, of this tax on their ownership of our common stock.

Sale, Exchange or Other Disposition of Common Stock

Subject to the discussion of PFICs below, a U.S. Holder generally will recognize taxable gain or loss upon a sale, exchange or other disposition of our common stock in an amount equal to the difference between the amount realized by the U.S. Holder from such sale, exchange or other disposition and the U.S. Holder’s tax basis in such stock. Subject to the discussion of extraordinary dividends above, such gain or loss will be treated as long-term capital gain or loss if the U.S. Holder’s holding period is greater than one year at the time of the sale, exchange or other disposition, and subject to preferential capital gain tax rates. Such capital gain or loss generally will be treated as U.S.-source gain or loss, as applicable, for U.S. foreign tax credit purposes. A U.S. Holder’s ability to deduct capital losses is subject to certain limitations.

Certain U.S. Individual Holders are subject to a 3.8% tax on certain investment income, including capital gains from the sale or other disposition of stock for taxable years beginning after December 31, 2012. U.S. Individual Holders should consult their tax advisors regarding the effect, if any, of this tax on their disposition of our common stock.

Consequences of Possible PFIC Classification

A non-U.S. entity treated as a corporation for U.S. federal income tax purposes will be a PFIC in any taxable year in which, after taking into account the income and assets of the corporation and certain subsidiaries pursuant to a “look through” rule, either: (i) at least 75% of its gross income is “passive” income; or (ii) at least 50% of the average value of its assets is attributable to assets that produce passive income or are held for the production of passive income. For purposes of these tests, “passive income” includes dividends, interest, and gains from the sale or exchange of investment property and rents and royalties, other than rents and royalties that are received from unrelated parties in connection with the active conduct of a trade or business. By contrast, income derived from the performance of services does not constitute “passive income.”

There are legal uncertainties involved in determining whether the income derived from our time-chartering activities constitutes rental income or income derived from the performance of services, including the decision in Tidewater Inc. v. United States, 565 F.3d 299 (5th Cir. 2009), which held that income derived from certain time-chartering activities should be treated as rental income rather than services income for purposes of a foreign sales corporation provision of the Code. However, the Internal Revenue Service (or IRS) stated in an Action on Decision (AOD 2010-01) that it disagrees with, and will not acquiesce to, the way that the rental versus services framework was applied to the facts in the Tidewater decision, and in its discussion stated that the time charters at issue in Tidewater would be treated as producing services income for PFIC

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purposes. The IRS’s statement with respect to Tidewater cannot be relied upon or otherwise cited as precedent by taxpayers. Consequently, in the absence of any binding legal authority specifically relating to the statutory provisions governing PFICs, there can be no assurance that the IRS or a court would not follow the Tidewater decision in interpreting the PFIC provisions of the Code. Nevertheless, based on our and our subsidiaries’ current assets and operations, we intend to take the position that we are not now and have never been a PFIC. No assurance can be given, however, that the IRS, or a court of law, will accept our position or that we would not constitute a PFIC for any future taxable year if there were to be changes in our or our subsidiaries assets, income or operations.

As discussed more fully below, if we were to be treated as a PFIC for any taxable year, a U.S. Holder would be subject to different taxation rules depending on whether the U.S. Holder makes a timely and effective election to treat us as a “Qualified Electing Fund” (a QEF election). As an alternative to making a QEF election, a U.S. Holder should be able to make a “mark-to-market” election with respect to our common stock, as discussed below.

Taxation of U.S. Holders Making a Timely QEF Election. If a U.S. Holder makes a timely QEF election (an Electing Holder), the Electing Holder must report each taxable year for U.S. federal income tax purposes the Electing Holder’s pro rata share of our ordinary earnings and net capital gain, if any, for each taxable year for which we are a PFIC that ends with or within the Electing Holder’s taxable year, regardless of whether or not the Electing Holder received distributions from us in that year. Such pro rata share would not exceed the income allocable to dividends on our shares, although ordinary earnings could be allocated to a shareholder in a taxable year before the dividend is paid. Such income inclusions would not be eligible for the preferential tax rates applicable to qualified dividend income. The Electing Holder’s adjusted tax basis in the common stock will be increased to reflect taxed but undistributed earnings and profits. Distributions of earnings and profits that were previously taxed will result in a corresponding reduction in the Electing Holder’s adjusted tax basis in common stock and will not be taxed again once distributed. An Electing Holder generally will recognize capital gain or loss on the sale, exchange or other disposition of our common stock. A U.S. Holder makes a QEF election with respect to any year that we are a PFIC by filing IRS Form 8621 with the U.S. Holder’s timely filed U.S. federal income tax return (including extensions).

If a U.S. Holder has not made a timely QEF election with respect to the first year in the U.S. Holder’s holding period of our common stock during which we qualified as a PFIC, the U.S. Holder may be treated as having made a timely QEF election by filing a QEF election with the U.S. Holder’s timely filed U.S. federal income tax return (including extensions) and, under the rules of Section 1291 of the Code, a “deemed sale election” to include in income as an “excess distribution” (described below) the amount of any gain that the U.S. Holder would otherwise recognize if the U.S. Holder sold the U.S. Holder’s common stock on the “qualification date.” The qualification date is the first day of our taxable year in which we qualified as a “qualified electing fund” with respect to such U.S. Holder. In addition to the above rules, under very limited circumstances, a U.S. Holder may make a retroactive QEF election if the U.S. Holder failed to file the QEF election documents in a timely manner. If a U.S. Holder makes a timely QEF election for one of our taxable years, but did not make such election with respect to the first year in the U.S. Holder’s holding period of our common stock during which we qualified as a PFIC and the U.S. Holder did not make the deemed sale election described above, the U.S. Holder also will be subject to the more adverse rules described below.

A U.S. Holder’s QEF election will not be effective unless we annually provide the U.S. Holder with certain information concerning our income and gain, calculated in accordance with the Code, to be included with the U.S. Holder’s U.S. federal income tax return. We have not provided our U.S. Holders with such information in prior taxable years and do not intend to provide such information in the current taxable year. Accordingly, U.S. Holders will not be able to make an effective QEF election at this time. If, contrary to our expectations, we determine that we are or will be a PFIC for any taxable year, we will provide U.S. Holders with the information necessary to make an effective QEF election with respect to our common stock.

Taxation of U.S. Holders Making a “Mark-to-Market” Election. If we were to be treated as a PFIC for any taxable year and, as we anticipate, our stock were treated as “marketable stock,” then, as an alternative to making a QEF election, a U.S. Holder would be allowed to make a “mark-to-market” election with respect to our common stock, provided the U.S. Holder completes and files IRS Form 8621 in accordance with the relevant instructions and related Treasury Regulations. If that election is made for the first year a U.S. Holder holds or is deemed to hold our common stock and for which we are a PFIC, the U.S. Holder generally would include as ordinary income in each taxable year that we are a PFIC the excess, if any, of the fair market value of the U.S. Holder’s common stock at the end of the taxable year over the U.S. Holder’s adjusted tax basis in the common stock. The U.S. Holder also would be permitted an ordinary loss in respect of the excess, if any, of the U.S. Holder’s adjusted tax basis in the common stock over the fair market value thereof at the end of the taxable year that we are a PFIC, but only to the extent of the net amount previously included in income as a result of the mark-to-market election. A U.S. Holder’s tax basis in the U.S. Holder’s common stock would be adjusted to reflect any such income or loss recognized. Gain recognized on the sale, exchange or other disposition of our common stock in taxable years that we are a PFIC would be treated as ordinary income, and any loss recognized on the sale, exchange or other disposition of the common stock in taxable years that we are a PFIC would be treated as ordinary loss to the extent that such loss does not exceed the net mark-to-market gains previously included in income by the U.S. Holder. Because the mark-to-market election only applies to marketable stock, however, it would not apply to a U.S. Holder’s indirect interest in any of our subsidiaries that were also determined to be PFICs.

If a U.S. Holder makes a mark-to-market election for one of our taxable years and we were a PFIC for a prior taxable year during which such U.S. Holder held our common stock and for which (i) we were not a QEF with respect to such U.S. Holder and (ii) such U.S. Holder did not make a timely mark-to-market election, such U.S. Holder would also be subject to the more adverse rules described below in the first taxable year for which the mark-to-market election is in effect and also to the extent the fair market value of the U.S. Holder’s common stock exceeds the U.S. Holder’s adjusted tax basis in the common stock at the end of the first taxable year for which the mark-to-market election is in effect.

Taxation of U.S. Holders Not Making a Timely QEF or Mark-to-Market Election. If we were to be treated as a PFIC for any taxable year, a U.S. Holder who does not make either a QEF election or a “mark-to-market” election for that year (a Non-Electing Holder) would be subject to special rules resulting in increased tax liability with respect to (i) any “excess distribution” (i.e., the portion of any distributions received by the Non-Electing Holder on our common stock in a taxable year in excess of 125% of the average annual distributions received by the Non-Electing Holder in the three preceding taxable years, or, if shorter, the Non-Electing Holder’s holding period for the common stock), and (ii) any gain realized on the sale, exchange or other disposition of the stock. Under these special rules:

• the excess distribution or gain would be allocated ratably over the Non-Electing Holder’s aggregate holding period for the common stock;

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• the amount allocated to the current taxable year and any taxable year prior to the taxable year we were first treated as a PFIC with respect to the Non-Electing Holder would be taxed as ordinary income in the current taxable year;

• the amount allocated to each of the other taxable years would be subject to U.S. federal income tax at the highest rate of tax in effect for the applicable class of taxpayers for that year; and

• an interest charge for the deemed deferral benefit would be imposed with respect to the resulting tax attributable to each such other taxable year.

If we were treated as a PFIC, a U.S. Holder would be required to file Form 8621 annually with the IRS with respect to the U.S. Holder’s common stock. In addition, if a Non-Electing Holder who is an individual dies while owning our common stock, such Non-Electing Holder’s successor generally would not receive a step-up in tax basis with respect to such stock.

U.S. Holders are urged to consult their own tax advisors regarding the applicability, availability and advisability of, and procedure for, making QEF, Mark-to-Market Elections and other available elections with respect to us and our subsidiaries, and the U.S. federal income tax consequences of making such elections.

Consequences of Possible Controlled Foreign Corporation Classification

If CFC Shareholders (generally, U.S. Holders who each own, directly, indirectly or constructively, 10% or more of the total combined voting power of our outstanding shares entitled to vote) own directly, indirectly or constructively more than 50% of either the total combined voting power of our outstanding shares entitled to vote or the total value of all of our outstanding shares, we generally would be treated as a controlled foreign corporation (or a CFC).

CFC Shareholders are treated as receiving current distributions of their shares of certain income of the CFC without regard to any actual distributions and are subject to other burdensome U.S. federal income tax and administrative requirements but generally are not also subject to the requirements generally applicable to shareholders of a PFIC. In addition, a person who is or has been a CFC Shareholder may recognize ordinary income on the disposition of shares of the CFC. Although we do not believe we are or will become a CFC, U.S. persons owning a substantial interest in us should consider the potential implications of being treated as a CFC Shareholder in the event we become a CFC in the future.

The U.S. federal income tax consequences to U.S. Holders who are not CFC Shareholders would not change in the event we become a CFC in the future.

U.S. Return Disclosure Requirements for U.S. Individual Holders

U.S. Individual Holders who hold certain specified foreign financial assets, including stock in a foreign corporation that is not held in an account maintained by a financial institution, with an aggregate value in excess of $50,000, may be required to report such assets on IRS Form 8938 with their U.S. federal income tax return. Penalties apply for failure to properly complete and file Form 8938. You are encouraged to consult with your tax advisor regarding the possible application of this disclosure requirement.

United States Federal Income Taxation of Non-U.S. Holders

A beneficial owner of our common stock (other than a partnership, including any entity or arrangement treated as a partnership for U.S. federal income tax purposes) that is not a U.S. Holder is a Non-U.S. Holder.

Distributions

In general, distributions we make to a Non-U.S. Holder will not be subject to U.S. federal income tax or withholding tax if the Non-U.S. Holder is not engaged in a U.S. trade or business. If the Non-U.S. Holder is engaged in a U.S. trade or business, distributions we make will be subject to U.S. federal income tax to the extent those distributions constitute income effectively connected with that Non-U.S. Holder’s U.S. trade or business. However, distributions made to a Non-U.S. Holder that is engaged in a trade or business may be exempt from taxation under an income tax treaty if the income represented thereby is not attributable to a U.S. permanent establishment maintained by the Non-U.S. Holder.

Sale, Exchange or Other Disposition of Common Stock

The U.S. federal income taxation of Non-U.S. Holders on any gain resulting from the disposition of our common stock generally is the same as described above regarding distributions. However, an individual Non-U.S. Holder may be subject to tax on gain resulting from the disposition of our common stock if the Non-U.S. Holder is present in the United States for 183 days or more during the taxable year in which such disposition occurs and meets certain other requirements.

Backup Withholding and Information Reporting

In general, payments of distributions or the proceeds of a disposition of common stock to a non-corporate U.S. Holder will be subject to information reporting requirements. These payments to a non-corporate U.S. Holder also may be subject to backup withholding if the non-corporate U.S. Holder:

• fails to timely provide an accurate taxpayer identification number;

• is notified by the IRS that the U.S. Holder has failed to report all interest or distributions required to be shown on the U.S. Holder’s U.S. federal income tax returns; or

• in certain circumstances, fails to comply with applicable certification requirements.

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Non-U.S. Holders may be required to establish their exemption from information reporting and backup withholding on payments within the United States, or through a U.S. payor by certifying their status on IRS Form W-8BEN, W-8ECI or W-8IMY, as applicable.

Backup withholding is not an additional tax. Rather, a stockholder generally may obtain a credit for any amount withheld against its liability for U.S. federal income tax (and a refund of any amounts withheld in excess of such liability) by accurately completing and timely filing a return with the IRS.

Non-United States Tax Considerations

Marshall Islands Tax Considerations. Because Teekay and our subsidiaries do not, and do not expect that we or they will, conduct business or operations in the Republic of The Marshall Islands, and because all documentation related to issuances of shares of our common stock was executed outside of the Republic of The Marshall Islands, under current Marshall Islands law, no taxes or withholdings will be imposed by the Republic of The Marshall Islands on distributions made to holders of shares of our common stock, so long as such persons do not reside in, maintain offices in, or engage in business in the Republic of The Marshall Islands. Furthermore, no stamp, capital gains or other taxes will be imposed by the Republic of The Marshall Islands on the purchase, ownership or disposition by such persons of shares of our common stock.

Documents on Display

Documents concerning us that are referred to herein may be inspected at our principal executive headquarters at 4^th Floor, Belvedere Building, 69 Pitts Bay Road, Hamilton, HM 08, Bermuda. Those documents electronically filed via the Electronic Data Gathering, Analysis, and Retrieval (or EDGAR) system may also be obtained from the SEC’s website at www.sec.gov, free of charge, or from the Public Reference Section of the SEC at 100F Street, NE, Washington, D.C. 20549, at prescribed rates. Further information on the operation of the SEC public reference rooms may be obtained by calling the SEC at 1-800-SEC-0330.

Item 11. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risk from foreign currency fluctuations and changes in interest rates, bunker fuel prices and spot tanker market rates for vessels. We use foreign currency forward contracts, cross currency and interest rate swaps, bunker fuel swap contracts and forward freight agreements to manage currency, interest rate, bunker fuel price and spot tanker market rate risks but we do not use these financial instruments for trading or speculative purposes, except as noted below under Spot Tanker Market Rate Risk. Please read “Item 18. Financial Statements: Note 15—Derivative Instruments and Hedging Activities.”

Foreign Currency Fluctuation Risk

Our primary economic environment is the international shipping market. Transactions in this market generally utilize the U.S. Dollar. Consequently, a substantial majority of our revenues and most of our operating costs are in U.S. Dollars. We incur certain voyage expenses, vessel operating expenses, dry docking and overhead costs in foreign currencies, the most significant of which are the Australian Dollar, British Pound, Canadian Dollar, Euro, Norwegian Kroner and Singapore Dollar. There is a risk that currency fluctuations will have a negative effect on the value of cash flows.

We reduce our exposure by entering into foreign currency forward contracts. In most cases, we hedge our net foreign currency exposure for the following 9-12 months. We generally do not hedge our net foreign currency exposure beyond three years forward.

As at December 31, 2012, we had the following foreign currency forward contracts:

	Contract amount		Fair  value(1)
Norwegian Kroner:	$	33.9	$	2.1
Average contractual exchange rate(2)		5.93
Euro:	$	13.0	($	0.1	)
Average contractual exchange rate(2)		0.76
Canadian Dollar:	$	9.2	$	0.2
Average contractual exchange rate(2)		1.01
British Pound:	$	17.6	$	0.7
Average contractual exchange rate(2)		0.64

(1) Contract amounts and fair value amounts in millions of U.S. Dollars.

(2) Average contractual exchange rate represents the contractual amount of foreign currency one U.S. Dollar will buy.

Although the majority of our transactions, assets and liabilities are denominated in U.S. Dollars, certain of our subsidiaries have foreign currency-denominated liabilities. There is a risk that currency fluctuations will have a negative effect on the value of our cash flows. We have not entered into any forward contracts to protect against the translation risk of our foreign currency-denominated liabilities. As at December 31, 2012, we had Euro-denominated term loans of 258.8 million Euros ($341.4 million). We receive Euro-denominated revenue from certain of our time-charters. These Euro cash receipts generally are sufficient to pay the principal and interest payments on our Euro-denominated term loans. Consequently, we have not entered into any foreign currency forward contracts with respect to our Euro-denominated term loans, although there is no assurance that our net exposure to fluctuations in the Euro will not increase in the future.

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We enter into cross currency swaps and pursuant to these swaps we receive the principal amount in Norwegian Kroner (or NOK) on the maturity date of the swap, in exchange for payment of a fixed U.S. Dollar amount. In addition, the cross currency swaps exchange a receipt of floating interest in Norwegian Kroner based on NIBOR plus a margin for a payment of US Dollar fixed interest or US Dollar floating interest based on LIBOR plus a margin. The purpose of the cross currency swaps is to economically hedge the foreign currency exposure on the payment of interest and principal of our Norwegian Kroner Bonds due in 2013, 2015 and 2017. In addition, the cross currency swaps due in 2015 and 2017 economically hedges the interest rate exposure on the Norwegian Kroner Bonds due in 2015 and 2017. We have not designated, for accounting purposes, these cross currency swaps as cash flow hedges of its Norwegian Kroner Bonds due in 2013, 2015 and 2017. As at December 31, 2012, we were committed to the following cross currency swaps:

	Principal Amount		Principal		Floating Rate Receivable Floating Rate Payable										Fixed			Fair Value / Asset (Liability) (Thousands			Remaining
Maturity Date	NOK (Thousands)		Amount USD		Reference Rate		Margin			Reference Rate		Margin			Rate Payable			of U.S. Dollars)			Term (years)
2013		600,000		98,500		NIBOR		4.75	%		LIBOR		5.04	%			(1)		9,890			0.9
2015		700,000		122,800		NIBOR		4.75	%							5.52	%		3,075			2.8
2017		600,000		101,400		NIBOR		5.75	%							7.49	%		3,545			4.1
2017		700,000		125,000		NIBOR		5.25	%							6.88	%		(2,624	)		4.3
																			13,886

(1) LIBOR subsequently fixed at 1.1%, subject to a LIBOR rate receivable cap of 3.5%. Please read “Item 18 – Financial statements: Note 15 – Derivative Instruments and Hedging Activities.”

Interest Rate Risk

We are exposed to the impact of interest rate changes primarily through our borrowings that require us to make interest payments based on LIBOR or EURIBOR. Significant increases in interest rates could adversely affect our operating margins, results of operations and our ability to repay our debt. We use interest rate swaps to reduce our exposure to market risk from changes in interest rates. Generally our approach is to economically hedge a substantial majority of floating-rate debt associated with our vessels that are operating on long-term fixed-rate contracts. We manage the rest of our debt based on our outlook for interest rates and other factors.

In order to minimize counterparty risk, we only enter into derivative transactions with counterparties that are rated A- or better by Standard & Poor’s or A3 or better by Moody’s at the time of the transaction. In addition, to the extent possible and practical, interest rate swaps are entered into with different counterparties to reduce concentration risk.

The table below provides information about our financial instruments at December 31, 2012, which are sensitive to changes in interest rates, including our debt and capital lease obligations and interest rate swaps. For long-term debt and capital lease obligations, the table presents principal cash flows and related weighted-average interest rates by expected maturity dates. For interest rate swaps, the table presents notional amounts and weighted-average interest rates by expected contractual maturity dates.

	Expected Maturity Date																					Fair Value Asset / (Liability)
	2013			2014			2015			2016			2017			Thereafter			Total						Rate(1)
Long-Term Debt:
Variable Rate ($U.S.)(2)		700.5			1,148.1			255.5			258.0			707.7			892.9			3,962.7			(3,676.1	)		1.7	%
Variable Rate (Euro)(3)(4)		14.8			15.8			17.0			18.2			19.6			256.0			341.4			(307.8	)		1.6	%
Variable Rate (NOK)(4)(5)		38.0			—			125.8			69.8			233.6			—			467.2			(476.3	)		7.0	%
Fixed-Rate Debt ($U.S.)		44.3			44.3			44.3			44.3			43.3			567.9			788.4			(818.3	)		5.2	%
Average Interest Rate		5.2	%		5.2	%		5.2	%		5.2	%		5.3	%		7.8	%		5.2	%
Capital Lease Obligations(6)
Variable-Rate ($U.S.)(7)		70.3			31.7			4.4			4.5			28.3			26.3			165.5			(165.5	)		7.4	%
Average Interest Rate(8)		9.1	%		7.7	%		5.4	%		5.4	%		4.6	%		6.4	%		7.4	%
Interest Rate Swaps:
Contract Amount ($U.S.)(6)(9)(10)		385.0			201.8			327.5			748.6			355.4			1,250.5			3,268.8			(515.9	)		4.0	%
Average Fixed Pay Rate(2)		2.2	%		3.8	%		4.0	%		2.8	%		4.4	%		5.2	%		4.0	%
Contract Amount (Euro)(4)		14.8			15.8			17.0			18.2			19.6			256.0			341.4			(41.3	)		3.1	%
Average Fixed Pay Rate(3)		3.1	%		3.1	%		3.1	%		3.1	%		3.1	%		3.1	%		3.1	%

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(1) Rate refers to the weighted-average effective interest rate for our long-term debt and capital lease obligations, including the margin we pay on our floating-rate, which, as of December 31, 2012, ranged from 0.3% to 4.25%. The average interest rate for our capital lease obligations is the weighted-average interest rate implicit in our lease obligations at the inception of the leases.

(2) Interest payments on U.S. Dollar-denominated debt and interest rate swaps are based on LIBOR. The average fixed pay rate for our interest rate swaps excludes the margin we pay on our floating-rate debt.

(3) Interest payments on Euro-denominated debt and interest rate swaps are based on EURIBOR.

(4) Euro-denominated and Norwegian Kroner-denominated amounts have been converted to U.S. Dollars using the prevailing exchange rate as of December 31, 2012.

(5) Interest payments on our NOK-denominated debt and on our cross currency swaps are based on NIBOR. Our NOK-denominated debt has been economically hedged with four cross currency swaps, to swap all interest and principal payments at maturity into U.S. Dollars, with the interest payments fixed at a rate of 5.52%, 7.49%, 6.88% and interest rate payments swapped from NIBOR plus a margin of 4.75% into LIBOR plus a margin of 5.04% and the transfer of principal fixed at $122.8 million, $101.4 million, $125.0 million and $98.5 million upon maturity in exchange for NOK 700 million, NOK 600 million, NOK 700 million and NOK 600 million, respectively.

(6) Under the terms of the capital leases for three LNG carriers (or the RasGas II LNG Carriers), (see “Item 18 – Financial Statements: Note 10 – Capital Lease Obligations and Restricted Cash” of our Annual Report on Form 20-F for the year ended December 31, 2012), we are required to have on deposit, subject to a variable rate of interest, an amount of cash that, together with interest earned on the deposit, will equal the remaining amounts owing under the variable-rate leases. The deposits, which as at December 31, 2012 totaled $475.5 million, and the lease obligations, which as at December 31, 2012 totaled $472.1 million, have been swapped for fixed-rate deposits and fixed-rate obligations. Consequently, we are not subject to interest rate risk from these obligations and deposits and, therefore, the lease obligations, cash deposits and related interest rate swaps have been excluded from the table above. As at December 31, 2012, the contract amount, fair value and fixed interest rates of these interest rate swaps related to the RasGas II LNG Carriers capital lease obligations and restricted cash deposits were $412.9 million and $469.3 million, ($110.6) million and $165.7 million, and 4.9% and 4.8%, respectively.

(7) The amount of capital lease obligations represents the present value of minimum lease payments together with our purchase obligation, as applicable.

(8) The average interest rate is the weighted-average interest rate implicit in the capital lease obligations at the inception of the leases. Interest rate adjustments on these leases have corresponding adjustments in charter receipts under the terms of the charter contracts to which these leases relate to.

(9) The average variable receive rate for our interest rate swaps is set quarterly at the 3-month LIBOR or semi-annually at the 6-month LIBOR.

(10) Includes an interest rate swap where the LIBOR rate receivable is capped at 3.5% on a notional amount of $98.5 million maturing in 2013.

Commodity Price Risk

From time to time we may use bunker fuel swap contracts relating to a portion of our bunker fuel expenditures. As at December 31, 2012 and 2011, we were not committed to any bunker fuel swap contracts.

Spot Tanker Market Rate Risk

In order to reduce variability in revenues from fluctuations in certain spot tanker market rates, from time to time we have entered into forward freight agreements (or FFAs). FFAs involve contracts to move a theoretical volume of freight at fixed-rates, thus attempting to reduce our exposure to spot tanker market rates. As at December  31, 2012 and 2011, we had no FFA commitments.

Item 12. Description of Securities Other than Equity Securities

Not applicable.

PART II

Item 13. Defaults, Dividend Arrearages and Delinquencies

None.

Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds

Not applicable.

Item 15. Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as amended (or the Exchange Act)) that are designed to ensure that (i) information required to be disclosed in our reports that are filed or submitted under the Exchange Act, are recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and (ii) information required to be disclosed by us in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including the principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

We conducted an evaluation of our disclosure controls and procedures under the supervision and with the participation of the Chief Executive Officer and Chief Financial Officer. Based on the evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective as of December 31, 2012.

During the year ended 2012, we implemented a new accounting system designed to improve the effectiveness and efficiency of our accounting and financial reporting processes. Although this implementation changed certain specific activities within the accounting function, it did not significantly affect the overall controls and procedures followed by the Company in establishing internal controls over financial reporting. Other than this accounting system implementation, there have been no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the year ended December 31, 2012 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

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The Chief Executive Officer and Chief Financial Officer do not expect that our disclosure controls or internal controls will prevent all error and all fraud. Although our disclosure controls and procedures were designed to provide reasonable assurance of achieving their objectives, a control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within us have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining for us adequate internal controls over financial reporting.

Our internal controls are designed to provide reasonable assurance as to the reliability of our financial reporting and the preparation and presentation of the consolidated financial statements for external purposes in accordance with accounting principles generally accepted in the United States. Our internal controls over financial reporting includes those policies and procedures that: (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of the financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made in accordance with authorizations of management and the directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

We conducted an evaluation of the effectiveness of our internal control over financial reporting based upon the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. This evaluation included review of the documentation of controls, evaluation of the design effectiveness of controls, testing of the operating effectiveness of controls and a conclusion on this evaluation.

Because of its inherent limitations, internal controls over financial reporting may not prevent or detect misstatements even when determined to be effective and can only provide reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate. However, based on the evaluation, management believes that we maintained effective internal control over financial reporting as of December 31, 2012.

Our independent auditors, KPMG LLP, a registered public accounting firm has audited the accompanying consolidated financial statements and our internal control over financial reporting. Their attestation report on the effectiveness of our internal control over financial reporting can be found on page F-3 of this Annual Report.

Item 16A. Audit Committee Financial Expert

The Board has determined that director and Chair of the Audit Committee, Eileen A. Mercier, qualifies as an audit committee financial expert and is independent under applicable NYSE and SEC standards.

Item 16B. Code of Ethics

We have adopted Standards for Business Conduct that apply to all employees and directors. This document is available under “Business – About Teekay – Corporate Governance” from the Home Page of our website (www.teekay.com). We also intend to disclose under “Business – About Teekay – Corporate Governance” in the About Teekay section of our web site any waivers to or amendments of our Standards of Business Conduct for the benefit of our directors and executive officers.

Item 16C. Principal Accountant Fees and Services

Our principal accountant for 2012 and 2011 was KPMG LLP, Chartered Accountants. The following table shows the fees Teekay and our subsidiaries paid or accrued for audit and other services provided by KPMG LLP for 2012 and by KPMG LLP and Ernst & Young LLP for 2011.

Fees (in thousands of U.S. dollars)	2012		2011
Audit Fees (1)	$	3,437	$	3,806
Audit-Related Fees (2)		68		293
Tax Fees (3)		50		73
All Other Fees (4)		—		6
Total (5)	$	3,555	$	4,178

80

(1) Audit fees represent fees for professional services provided in connection with the audits of our consolidated financial statements, reviews of our quarterly consolidated financial statements and audit services provided in connection with other statutory or regulatory filings for Teekay or our subsidiaries including professional services in connection with the review of our regulatory filings for public offerings of our subsidiaries. Audit fees for 2012 and 2011 include approximately $719,000 and $688,000, respectively, of fees paid to KPMG LLP by Teekay LNG that were approved by the Audit Committee of the Board of Directors of the general partner of Teekay LNG. Audit fees for 2012 and 2011 include approximately $716,000 and $1,131,000, respectively, of fees paid to KPMG LLP by our subsidiary Teekay Offshore that were approved by the Audit Committee of the Board of Directors of the general partner of Teekay Offshore. Audit fees for 2012 and 2011 include approximately $359,000 and $477,000, respectively, of fees paid to KPMG LLP by our subsidiary Teekay Tankers that were approved by the Audit Committee of the Board of Directors of Teekay Tankers.

(2) Audit-related fees consisted primarily of accounting consultations, employee benefit plan audits, services related to business acquisitions, divestitures and other attestation services.

(3) For 2012 and 2011, tax fees principally included international tax planning fees and corporate tax compliance fees.

(4) All other fees principally include subscription fees to an internet database of accounting information.

(5) Total fees incurred with respect to KPMG LLP were approximately $3,555,000 and $2,938,000 for 2012 and 2011, respectively. Total fees incurred with respect to Ernst & Young LLP were approximately $1,240,000 for 2011.

The Audit Committee has the authority to pre-approve audit-related and non-audit services not prohibited by law to be performed by our independent auditors and associated fees. Engagements for proposed services either may be separately pre-approved by the Audit Committee or entered into pursuant to detailed pre-approval policies and procedures established by the Audit Committee, as long as the Audit Committee is informed on a timely basis of any engagement entered into on that basis. The Audit Committee separately pre-approved all engagements and fees paid to our principal accountants in 2012.

Item 16D. Exemptions from the Listing Standards for Audit Committees

Not applicable.

Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers

In October 2008, we announced that our Board of Directors had authorized the repurchase of up to $200 million of shares of our common stock. As at December 31, 2012, Teekay had repurchased 5.2 million shares of Common Stock for $162.3 million pursuant to such authorizations. The total remaining share repurchase authorization at December 31, 2012, was $37.7 million.

Item 16F. Change in Registrant’s Certifying Accountant

Not applicable.

Item 16G. Corporate Governance

The following are the significant ways in which our corporate governance practices differ from those followed by domestic companies:

• In lieu of obtaining shareholder approval prior to the adoption of equity compensation plans, the board of directors approves such adoption, as permitted by New York Stock Exchange rules for foreign private issuers.

There are no other significant ways in which our corporate governance practices differ from those followed by U.S. domestic companies under the listing requirements of the New York Stock Exchange.

Item 16H. Mine Safety Disclosure

Not applicable

PART III

Item 17. Financial Statements

Not applicable.

Item 18. Financial Statements

The following consolidated financial statements and schedule, together with the related reports of KPMG LLP, Independent Registered Public Accounting Firm thereon, and Ernst and Young LLP, Independent Registered Public Accounting Firm thereon, are filed as part of this Annual Report:

	Page
Report of Independent Registered Public Accounting Firm		F-1 to F-3
Consolidated Financial Statements Consolidated Statements of Loss		F-4
Consolidated Statements of Comprehensive Loss		F-5
Consolidated Balance Sheets		F-6
Consolidated Statements of Cash Flows		F-7
Consolidated Statements of Changes in Total Equity		F-8
Notes to the Consolidated Financial Statements		F-9

81

All other schedules for which provision is made in the applicable accounting regulations of the SEC are not required, are inapplicable or have been disclosed in the Notes to the Consolidated Financial Statements and therefore have been omitted.

Item 19. Exhibits

The following exhibits are filed as part of this Annual Report:

1.1	Amended and Restated Articles of Incorporation of Teekay Corporation. (15)
1.2	Articles of Amendment of Articles of Incorporation of Teekay Corporation. (15)
1.3	Amended and Restated Bylaws of Teekay Corporation. (1)
2.1	Registration Rights Agreement among Teekay Corporation, Tradewinds Trust Co. Ltd., as Trustee for the Cirrus Trust, and Worldwide Trust Services Ltd., as Trustee for the JTK Trust. (2)
2.2	Specimen of Teekay Corporation Common Stock Certificate. (2)
2.3	Indenture dated June 22, 2001 among Teekay Corporation and The Bank of New York Trust Company of Florida (formerly U.S. Trust Company of Texas, N.A.) for U.S. $250,000,000 8.875% Senior Notes due 2011. (3)
2.4	First Supplemental Indenture dated as of December 6, 2001 among Teekay Corporation and The Bank of New York Trust Company of Florida, N.A. for U.S. $100,000,000 8.875% Senior Notes due 2011. (4)
2.5	Exchange and Registration Rights Agreement dated June 22, 2001 among Teekay Corporation and Goldman, Sachs & Co., Morgan Stanley & Co. Incorporated, Salomon Smith Barney Inc., Deutsche Banc Alex. Brown Inc. and Scotia Capital (USA) Inc. (3)
2.6	Exchange and Registration Rights Agreement dated December 6, 2001 between Teekay Corporation and Goldman, Sachs & Co. (4)
2.7	Specimen of Teekay Corporation’s 8.875% Senior Notes due 2011. (3)
2.8	Indenture dated as of January 27, 2010 among Teekay Corporation and The Bank of New York Mellon Trust Company, N.A. for US $450,000,000 8.5% Senior Notes due 2020. (16)
4.1	1995 Stock Option Plan. (2)
4.2	Amendment to 1995 Stock Option Plan. (5)
4.3	Amended 1995 Stock Option Plan. (6)
4.4	Amended 2003 Equity Incentive Plan. (19)
4.5	Annual Executive Bonus Plan. (7)
4.6	Vision Incentive Plan. (8)
4.7	Form of Indemnification Agreement between Teekay and each of its officers and directors. (2)
4.8	Amended Rights Agreement, dated as of July 2, 2010 between Teekay Corporation and The Bank of New York, as Rights Agent. (9)
4.9	Agreement dated June 26, 2003 for a U.S. $550,000,000 Secured Reducing Revolving Loan Facility among Norsk Teekay Holdings Ltd., Den Norske Bank ASA and various other banks. (10)
4.10	Agreement dated September 1, 2004 for a U.S. $500,000,000 Credit Facility Agreement to be made available to Teekay Nordic Holdings Incorporated by Nordea Bank Finland PLC. (7)
4.11	Supplemental Agreement dated September 30, 2004 to Agreement dated June 26, 2003, for a U.S. $550,000,000 Secured Reducing Revolving Loan Facility among Norsk Teekay Holdings Ltd., Den Norske Bank ASA and various other banks. (7)
4.12	Agreement dated May 26, 2005 for a U.S. $550,000,000 Credit Facility Agreement to be made available to Avalon Spirit LLC et al by Nordea Bank Finland PLC and others. (8)
4.13	Agreement dated October 2, 2006, for a U.S. $940,000,000 Secured Reducing Revolving Loan Facility among Teekay Offshore Operating L.P., Den Norske Bank ASA and various other banks. (11)
4.14	Agreement dated August 23, 2006, for a U.S. $330,000,000 Secured Reducing Revolving Loan Facility among Teekay LNG Partners L.P., ING Bank N.V. and various other banks. (11)
4.15	Agreement, dated November 28, 2007 for a U.S. $845,000,000 Secured Reducing Revolving Loan Facility among Teekay Corporation, Teekay Tankers Ltd., Nordea Bank Finland PLC and various other banks. (12)
4.16	Agreement dated May 16, 2007 for a U.S. $700,000,000 Credit Facility Agreement to be made available to Teekay Acquisition Holdings LLC et al by HSH NordBank AG and others. (13)
4.17	Amended and Restated Omnibus Agreement (14)
4.18	2013 Equity Incentive Plan. (18)
4.19	Agreement, dated December 21, 2012 for a U.S. $200,000,000 Margin Loan Agreement among Teekay Finance Limited, Citibank, N.A. and others.
8.1	List of Significant Subsidiaries.
12.1	Rule 13a-14(a)/15d-14(a) Certification of Teekay’s Chief Executive Officer.
12.2	Rule 13a-14(a)/15d-14(a) Certification of Teekay’s Chief Financial Officer.
13.1	Teekay Corporation Certification of Peter Evensen, Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
13.2	Teekay Corporation Certification of Vincent Lok, Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
23.1	Consent of KPMG LLP, as independent registered public accounting firm.
23.2	Consent of Ernst & Young LLP, as former independent registered public accounting firm.
16.1	Letter of Ernst & Young LLP, dated June 6, 2011, regarding change in independent registered public accounting firm. (17)
16.2	Letter of KPMG LLP, dated June 6, 2011, regarding change in independent registered public accounting firm. (17)
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema

82

101.CAL	XBRL Taxonomy Extension Calculation Linkbase
101.DEF	XBRL Taxonomy Extension Definition Linkbase
101.LAB	XBRL Taxonomy Extension Label Linkbase
101.PRE	XBRL Taxonomy Extension Presentation Linkbase

(1) Previously filed as an exhibit to the Company’s Report on Form 6-K (File No.1-12874), filed with the SEC on August 31, 2011, and hereby incorporated by reference to such Report.

(2) Previously filed as an exhibit to the Company’s Registration Statement on Form F-1 (Registration No. 33-7573-4), filed with the SEC on July 14, 1995, and hereby incorporated by reference to such Registration Statement.

(3) Previously filed as an exhibit to the Company’s Registration Statement on Form F-4 (Registration No. 333-64928), filed with the SEC on July 11, 2001, and hereby incorporated by reference to such Registration Statement.

(4) Previously filed as an exhibit to the Company’s Registration Statement on Form F-4 (Registration No. 333-76922), filed with the SEC on January 17, 2002, and hereby incorporated by reference to such Registration Statement.

(5) Previously filed as an exhibit to the Company’s Form 6-K (File No.1-12874), filed with the SEC on May 2, 2000, and hereby incorporated by reference to such Report.

(6) Previously filed as an exhibit to the Company’s Annual Report on Form 20-F (File No.1-12874), filed with the SEC on April 2, 2001, and hereby incorporated by reference to such Annual Report.

(7) Previously filed as an exhibit to the Company’s Report on Form 20-F (File No. 1-12874), filed with the SEC on April 8, 2005, and hereby incorporated by reference to such Report.

(8) Previously filed as an exhibit to the Company’s Report on Form 20-F (File No. 1-12874), filed with the SEC on April 10, 2006, and hereby incorporated by reference to such Report.

(9) Previously filed as an exhibit to the Company’s Form 8-A/A (File No.1-12874), filed with the SEC on July 2, 2010, and hereby incorporated by reference to such Annual Report.

(10) Previously filed as an exhibit to the Company’s Report on Form 6-K (File No. 1-12874), filed with the SEC on August 14, 2003, and hereby incorporated by reference to such Report.

(11) Previously filed as an exhibit to the Company’s Report on Form 6-K (File No. 1-12874), filed with the SEC on December 21, 2006, and hereby incorporated by reference to such Report.

(12) Previously filed as an exhibit to the Company’s Report on Form 20-F (File No. 1-12874), filed with the SEC on April 11, 2008, and hereby incorporated by reference to such Report.

(13) Previously filed as an exhibit to the Company’s Schedule TO – T/A, filed with the SEC on May 18, 2007, and hereby incorporated by reference to such schedule.

(14) Previously filed as an exhibit to the Company’s Report on Form 20-F (File No. 1-12874), filed with the SEC on April 19, 2007, and hereby incorporated by reference to such Report.

(15) Previously filed as an exhibit to the Company’s Report on Form 20-F (File No. 1-12874), filed with the SEC on April 7, 2009, and hereby incorporated by reference to such Report.

(16) Previously filed as an exhibit to the Company’s Report on Form 6-K (File No. 1-12874), filed with the SEC on January 27, 2010, and hereby incorporated by reference to such Report.

(17) Previously filed as an exhibit to our Report on Form 6-K (File No.1-12874), filed with the SEC on June 6, 2011, and hereby incorporated by reference to such Report.

(18) Previously filed as an exhibit to the Company’s Registration Statement on Form S-8 (Registration No. 333-187142), filed with the SEC on March 8, 2013, and hereby incorporated by reference to such Registration Statement.

(19) Previously filed as an exhibit to the Company’s Report on Form 20-F (File No. 1-12874), filed with the SEC on April 25, 2012, and hereby incorporated by reference to such Report.

83

SIGNATURE

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this Annual Report on its behalf.

TEEKAY CORPORATION
By:	/s/ Vincent Lok
	Vincent Lok
	Executive Vice President and Chief Financial Officer
	(Principal Financial and Accounting Officer)

Dated: April 29, 2013

84

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders

TEEKAY CORPORATION

We have audited the accompanying consolidated balance sheets of Teekay Corporation and subsidiaries (the “Company”) as of December 31, 2012 and 2011, and the related consolidated statements of loss, comprehensive loss, cash flows and changes in total equity for each of the years in the two year period ended December 31, 2012. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. The accompanying consolidated statements of loss, comprehensive loss, cashflows and changes in total equity of Teekay Corporation for the year ended December 31, 2010 were audited by other auditors whose report thereon dated April 13, 2011, expressed an unqualified opinion on those statements.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2012 and 2011, and the results of its operations and its cash flows for each of the years in the two year period ended December 31, 2012, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company’s internal control over financial reporting as of December 31, 2012, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated April 29, 2013, expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

/s/ KPMG LLP

Chartered Accountants

Vancouver, Canada

April 29, 2013

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

TEEKAY CORPORATION

We have audited the accompanying consolidated statements of loss, comprehensive loss, cash flows and changes in total equity of Teekay Corporation and subsidiaries (the “Company”) for the year ended December 31, 2010. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated results of the operations, cash flows and changes in total equity of Teekay Corporation and subsidiaries for the year ended December 31, 2010, in conformity with U.S. generally accepted accounting principles.

Vancouver, Canada,	/s/ ERNST & YOUNG LLP
April 13, 2011	Chartered Accountants

F-2

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders

TEEKAY CORPORATION

We have audited Teekay Corporation and subsidiaries (“the Company”) internal control over financial reporting as of December 31, 2012, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control over Financial Reporting in the accompanying Form 20-F. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2012 based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of the Company as at December 31, 2012 and 2011, and the related consolidated statements of loss, comprehensive loss, cash flows and changes in total equity for each of the years in the two year period ended December 31, 2012, and our report dated April 29, 2013 expressed an unqualified opinion on those consolidated financial statements.

/s/ KPMG LLP

Chartered Accountants

Vancouver, Canada

April 29, 2013

F-3

TEEKAY CORPORATION AND SUBSIDIARIES (NOTE 1)

CONSOLIDATED STATEMENTS OF LOSS

(in thousands of U.S. dollars, except share amounts)

				(note 3a)
	Year Ended December 31,			Year Ended December 31,			Year Ended December 31,
	2012			2011			2010
	$			$			$
REVENUES		1,956,235			1,953,782			2,095,753
OPERATING EXPENSES
Voyage expenses		138,283			176,614			245,097
Vessel operating expenses (note 15)		730,119			677,687			630,547
Time-charter hire expense		130,739			214,179			285,992
Depreciation and amortization		455,898			428,608			440,705
General and administrative (note 12 and 15)		202,967			223,616			193,743
Asset impairments (note 18)		434,082			155,288			51,210
Net loss (gain) on sale of vessels and equipment (note 18)		6,975			(4,229	)		(2,060	)
Bargain purchase gain (note 3a)		—			(68,535	)		—
Goodwill impairment charge (note 6)		—			36,652			—
Restructuring charges (note 20)		7,565			5,490			16,396
Total operating expenses		2,106,628			1,845,370			1,861,630
(Loss) income from vessel operations		(150,393	)		108,412			234,123
OTHER ITEMS
Interest expense		(167,615	)		(137,604	)		(136,107	)
Interest income		6,159			10,078			12,999
Realized and unrealized loss on non-designated derivative instruments (note 15)		(80,352	)		(342,722	)		(299,598	)
Equity income (loss) (note 18b and 23)		79,211			(35,309	)		(11,257	)
Foreign exchange (loss) gain (note 8 and 15)		(12,898	)		12,654			31,983
Other income (loss) (note 14)		366			12,360			(5,118	)
Net loss before income taxes		(325,522	)		(372,131	)		(172,975	)
Income tax recovery (expense) (note 21)		14,406			(4,290	)		6,340
Net loss		(311,116	)		(376,421	)		(166,635	)
Less: Net loss (income) attributable to non-controlling interests		150,936			17,805			(100,652	)
Net loss attributable to stockholders of Teekay Corporation		(160,180	)		(358,616	)		(267,287	)
Per common share of Teekay Corporation (note 19)
• Basic loss attributable to stockholders of Teekay Corporation		(2.31	)		(5.11	)		(3.67	)
• Diluted loss attributable to stockholders of Teekay Corporation		(2.31	)		(5.11	)		(3.67	)
• Cash dividends declared		1.2650			1.2650			1.2650
Weighted average number of common shares outstanding (note 19)
• Basic		69,263,369			70,234,817			72,862,617
• Diluted		69,263,369			70,234,817			72,862,617

The accompanying notes are an integral part of the consolidated financial statements.

F-4

TEEKAY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands of U.S. dollars)

				(note 3a)
	Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,
	2012			2011			2010
	$			$			$
Net loss		(311,116	)		(376,421	)		(166,635	)
Other comprehensive income (loss):
Unrealized (loss) gain on marketable securities		(1,904	)		(4,357	)		2,333
Realized loss (gain) on marketable securities		2,560			(3,372	)		(1,097	)
Pension adjustments, net of taxes		6,698			(5,402	)		(7,245	)
Unrealized gain (loss) on qualifying cash flow hedging instruments		2,412			2,019			(3,559	)
Realized (gain) loss on qualifying cash flow hedging instruments (note 15)		(1,435	)		(5,566	)		3,040
Foreign exchange gain on currency translation (note 15)		1,144			—			—
Other comprehensive income (loss)		9,475			(16,678	)		(6,528	)
Comprehensive loss		(301,641	)		(393,099	)		(173,163	)
Less: Comprehensive loss (income) attributable to non-controlling interests		150,601			18,751			(100,761	)
Comprehensive loss attributable to stockholders of Teekay Corporation		(151,040	)		(374,348	)		(273,924	)

The accompanying notes are an integral part of the consolidated financial statements.

F-5

TEEKAY CORPORATION AND SUBSIDIARIES (NOTE 1)

CONSOLIDATED BALANCE SHEETS

(in thousands of U.S. dollars)

				(note 3a)
	As at			As at
	December 31,			December 31,
	2012			2011
	$			$
ASSETS
Current
Cash and cash equivalents (note 8)		639,491			692,127
Restricted cash (note 10)		39,390			4,370
Accounts receivable, including non-trade of $83,046 (2011—$38,120) and related party balance of $9,101 (2011—$3,487)		491,656			359,758
Vessels held for sale (note 11 and 18)		22,364			19,000
Net investment in direct financing leases (note 9)		12,303			23,171
Prepaid expenses and other		61,549			85,599
Current portion of loans to equity accounted investees		139,183			50,000
Current portion of investment in term loans (note 4)		117,820			—
Current portion of derivative assets (note 15)		31,669			24,712
Total current assets		1,555,425			1,258,737
Restricted cash—non-current (note 10)		494,429			495,784
Vessels and equipment (note 8)
At cost, less accumulated depreciation of $1,976,257 (2011—$2,102,856)		6,004,324			6,701,299
Vessels under capital leases, at cost, less accumulated amortization of $133,228 (2011 — $163,939) (note 10)		624,059			681,554
Advances on newbuilding contracts (note 16a)		692,675			507,908
Total vessels and equipment		7,321,058			7,890,761
Net investment in direct financing leases—non-current (note 9)		424,298			436,737
Loans to equity accounted investees and joint venture partners, bearing interest between 4.4% to 8%		67,720			35,248
Derivative assets (note 15)		148,581			140,557
Equity accounted investments (note 16b, 18b and 23)		480,043			240,537
Investment in term loans (note 4)		68,114			186,844
Other non-current assets		149,682			149,191
Intangible assets—net (note 6)		126,136			136,742
Goodwill (note 6)		166,539			166,539
Total assets		11,002,025			11,137,677
LIABILITIES AND EQUITY
Current
Accounts payable		111,474			93,065
Accrued liabilities (note 7)		363,218			394,586
Current portion of derivative liabilities (note 15)		115,835			117,337
Current portion of long-term debt (note 8)		797,411			401,376
Current obligation under capital leases (note 10)		70,272			47,203
Current portion of in-process revenue contracts (note 6)		60,627			73,344
Loan from affiliates		4,064			—
Total current liabilities		1,522,901			1,126,911
Long-term debt, including amounts due to joint venture partners of $13,282 (2011—$13,282) (note 8)		4,762,303			5,042,997
Long-term obligation under capital leases (note 10)		567,302			599,844
Derivative liabilities (note 15)		528,187			569,542
In-process revenue contracts		180,964			235,296
Other long-term liabilities		220,079			220,986
Total liabilities		7,781,736			7,795,576
Commitments and contingencies (note 8, 9, 10, 15 and 16)
Redeemable non-controlling interest (note 16e)		28,815			38,307
Equity
Common stock and additional paid-in capital ($0.001 par value; 725,000,000 shares authorized; 69,704,188 shares outstanding (2011—68,732,341); 70,203,388 shares issued (2011—74,391,691) (note 12)		681,933			660,917
Retained earnings		648,224			802,982
Non-controlling interest		1,876,085			1,863,798
Accumulated other comprehensive loss (note 1)		(14,768	)		(23,903	)
Total equity		3,191,474			3,303,794
Total liabilities and equity		11,002,025			11,137,677

Consolidation of variable interest entities (note 3)

The accompanying notes are an integral part of the consolidated financial statements.

F-6

TEEKAY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands of U.S. dollars)

				(note 3a)
	Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,
	2012			2011			2010
	$			$			$
Cash and cash equivalents provided by (used for)
OPERATING ACTIVITIES
Net loss		(311,116	)		(376,421	)		(166,635	)
Non-cash items:
Depreciation and amortization		455,898			428,608			440,705
Amortization of in-process revenue contracts (note 6)		(72,933	)		(46,436	)		(48,254	)
Loss (gain) on sale of marketable securities		2,560			(3,372	)		(1,805	)
Loss (gain) on sale of vessels and equipment		6,975			(4,229	)		(2,060	)
Goodwill impairment charge		—			36,652			—
Write-down of equity accounted investments (note 18b)		1,767			19,411			—
Asset impairments (note 18b)		434,082			155,288			51,210
Bargain purchase gain (note 3a)		—			(68,535	)		—
Loss on repurchase of notes		—			—			12,645
Equity (income) loss, net of dividends received		(65,639	)		31,376			11,257
Income tax (recovery) expense		(14,406	)		4,290			(6,340	)
Employee stock option compensation		9,393			16,262			15,264
Unrealized foreign exchange loss (gain)		22,137			(11,614	)		(21,427	)
Unrealized (gain) loss on derivative instruments		(40,373	)		70,822			140,187
Other		10,823			(4,942	)		(929	)
Change in operating assets and liabilities (note 17a)		(115,209	)		(84,347	)		45,415
Expenditures for dry docking		(35,023	)		(55,620	)		(57,483	)
Net operating cash flow		288,936			107,193			411,750
FINANCING ACTIVITIES
Proceeds from issuance of long-term debt (note 8)		1,417,870			2,114,879			1,769,742
Debt issuance costs		(10,595	)		(10,634	)		(14,471	)
Scheduled repayments of long-term debt		(266,242	)		(449,640	)		(210,025	)
Prepayments of long-term debt		(1,060,169	)		(881,207	)		(1,536,587	)
Repayments of capital lease obligations		(10,161	)		(89,145	)		(38,958	)
(Increase) decrease in restricted cash (note 10)		(33,592	)		73,105			30,291
Net proceeds from equity issuances of subsidiaries (note 5)		496,224			631,057			645,642
Equity contribution by joint venture partner		86,350			—			—
Repurchase of Common Stock (note 12)		—			(122,195	)		(40,111	)
Distribution from subsidiaries to non-controlling interests		(246,555	)		(201,942	)		(159,808	)
Cash dividends paid		(83,299	)		(93,480	)		(92,695	)
Other financing activities		9,840			5,847			5,682
Net financing cash flow		299,671			976,645			358,702
INVESTING ACTIVITIES
Expenditures for vessels and equipment		(523,597	)		(755,045	)		(343,091	)
Proceeds from sale of vessels and equipment		250,807			33,424			70,958
Acquisition of FPSO units and Sevan Marine ASA, net of cash acquired (note 3a)		(92,303	)		(322,500	)		—
Investment in term loans (note 4)		—			(70,000	)		(115,575	)
Investment in equity accounted investees (note 23)		(183,554	)		(38,496	)		(45,480	)
Advances to equity accounted investees		(117,235	)		(55,156	)		(5,447	)
Direct financing lease payments received		23,307			27,608			25,782
Other investing activities		1,332			8,706			(361	)
Net investing cash flow		(641,243	)		(1,171,459	)		(413,214	)
(Decrease) increase in cash and cash equivalents		(52,636	)		(87,621	)		357,238
Cash and cash equivalents, beginning of the year		692,127			779,748			422,510
Cash and cash equivalents, end of the year		639,491			692,127			779,748

Supplemental cash flow information (note 17)

The accompanying notes are an integral part of the consolidated financial statements.

F-7

TEEKAY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN TOTAL EQUITY

(in thousands of U.S. dollars and shares)

	TOTAL EQUITY (note 3a)
	Thousands			Common						Accumul-									Redee-
	of Shares			Stock and						ated Other									mable
	of Common			Addi-						Compre-			Non-						Non-
	Stock			tional						hensive			control-						control-
	Outstand-			Paid-in			Retained			Income			ling						ling
	ing			Capital			Earnings			(Loss)			Interest			Total			Interest
	#			$			$			$			$			$			$
Balance as at December 31, 2009		72,694			656,193			1,585,431			(1,534	)		855,580			3,095,670			—
Net (loss) income								(267,287	)					100,652			(166,635	)
Reclassification of redeemable non-controlling interest in net income														(798	)		(798	)		798
Other comprehensive income (loss)											(6,637	)		109			(6,528	)
Dividends declared								(92,736	)					(159,808	)		(252,544	)		(2,267	)
Reinvested dividends		2			41												41
Exercise of stock options and other		555			5,735												5,735
Repurchase of Common Stock (note 12)		(1,238	)		(10,610	)		(29,501	)								(40,111	)
Employee stock option compensation and other (note 12)					21,325												21,325
Dilution gains on public offerings of Teekay Offshore, Teekay Tankers and unit issuances of Teekay LNG (note 5)								123,203									123,203
Dilution loss on initiation of majority owned subsidiary								(5,176	)					(2,256	)		(7,432	)		7,432
Addition of non-controlling interest from share and unit issuances of subsidiaries and other														560,082			560,082			35,762
Balance as at December 31, 2010		72,013			672,684			1,313,934			(8,171	)		1,353,561			3,332,008			41,725
Net loss								(358,616	)					(17,805	)		(376,421	)
Reclassification of redeemable non-controlling interest in net income														(6,601	)		(6,601	)		6,601
Other comprehensive income (loss)											(15,732	)		(946	)		(16,678	)
Dividends declared								(93,489	)					(201,942	)		(295,431	)		(10,019	)
Reinvested dividends		1			9												9
Exercise of stock options		641			5,906												5,906
Repurchase of Common Stock (note 12)		(3,923	)		(33,944	)		(88,251	)								(122,195	)
Employee stock option compensation (note 12)					16,262												16,262
Dilution gains on public offerings of Teekay LNG, Teekay Tankers and unit issuances of Teekay Offshore (note 5)								124,247									124,247
Sale of 49% interest of OPCO to Teekay Offshore								(94,843	)					94,843			—
Acquisition of Voyageur FPSO unit (note 3a)														144,600			144,600
Increase to non-controlling interest from share and unit issuances of subsidiaries and other														498,088			498,088
Balance as at December 31, 2011		68,732			660,917			802,982			(23,903	)		1,863,798			3,303,794			38,307
Net loss								(160,180	)					(150,936	)		(311,116	)
Reclassification of redeemable non-controlling interest in net loss														4,520			4,520			(4,520	)
Other comprehensive income											9,135			340			9,475
Dividends declared								(83,305	)					(241,583	)		(324,888	)		(4,972	)
Reinvested dividends		1			6												6
Exercise of stock options and other (note 12)		971			11,617												11,617
Employee stock option compensation and other (note 12)					9,393												9,393
Dilution gain (loss) on public offerings of Teekay Offshore, Teekay Tankers, Teekay LNG and share issuance of Teekay Offshore (note 5)								88,727									88,727
Addition of non-controlling interest from share and unit issuances of subsidiaries and other														399,946			399,946
Balance as at December 31, 2012		69,704			681,933			648,224			(14,768	)		1,876,085			3,191,474			28,815

F-8

TEEKAY CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in thousands of U.S. dollars, other than share data)

1. Summary of Significant Accounting Policies

Basis of presentation

The consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (or GAAP). They include the accounts of Teekay Corporation (or Teekay), which is incorporated under the laws of The Republic of the Marshall Islands, and its wholly-owned or controlled subsidiaries (collectively, the Company). Significant intercompany balances and transactions have been eliminated upon consolidation.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates. Given the current credit markets, it is possible that the amounts recorded as derivative assets and liabilities could vary by material amounts.

Certain of the comparative figures have been reclassified to conform with the presentation adopted in the current period relating to the reclassification of prepaid expenses of $10.1 million less accounts payable of $4.0 million as at December 31, 2011 into accounts receivable in the consolidated balance sheets.

Reporting currency

The consolidated financial statements are stated in U.S. Dollars. The functional currency of the Company is the U.S. Dollar because the Company operates in the international shipping market, which typically utilizes the U.S. Dollar as the functional currency. Transactions involving other currencies during the year are converted into U.S. Dollars using the exchange rates in effect at the time of the transactions. At the balance sheet date, monetary assets and liabilities that are denominated in currencies other than the U.S. Dollar are translated to reflect the year-end exchange rates. Resulting gains or losses are reflected separately in the accompanying consolidated statements of loss.

Operating revenues and expenses

The Company recognizes revenues from time-charters and bareboat charters daily over the term of the charter as the applicable vessel operates under the charter. The Company does not recognize revenue during days that the vessel is off hire. When the time-charter contains a profit-sharing agreement, the Company recognizes the profit-sharing or contingent revenue only after meeting the profit sharing or other contingent threshold. All revenues from voyage charters are recognized on a percentage of completion method. The Company uses a discharge-to-discharge basis in determining percentage of completion for all spot voyages and voyages servicing contracts of affreightment, whereby it recognizes revenue ratably from when product is discharged (unloaded) at the end of one voyage to when it is discharged after the next voyage. The Company does not begin recognizing revenue until a charter has been agreed to by the customer and the Company, even if the vessel has discharged its cargo and is sailing to the anticipated load port on its next voyage. Shuttle tanker voyages servicing contracts of affreightment with offshore oil fields commence with tendering of notice of readiness at a field, within the agreed lifting range, and ends with tendering of notice of readiness at a field for the next lifting. Revenues from floating production, storage and offloading (or FPSO) contracts are recognized as service is performed. Certain of the Company’s FPSO units receive incentive-based revenue, which is recognized when earned by fulfillment of the applicable performance criteria. Revenues and expenses relating to engineering studies are recognized when service is completed, unless the expenses are not recoverable in which case the expenses are recognized as incurred. The consolidated balance sheets reflect the deferred portion of revenues and expenses, which will be earned in subsequent periods.

Revenues and voyage expenses of the Company’s vessels operating in pool arrangements with unrelated parties are pooled with the revenues and voyage expenses of other pool participants. The resulting net pool revenues, calculated on the time-charter-equivalent basis, are allocated to the pool participants according to an agreed formula. The Company accounts for the net allocation from the pool as revenues and amounts due from the pool are included in accounts receivable.

Voyage expenses are all expenses unique to a particular voyage, including bunker fuel expenses, port fees, cargo loading and unloading expenses, canal tolls, agency fees and commissions. Vessel operating expenses include crewing, repairs and maintenance, insurance, stores, lube oils and communication expenses. Voyage expenses and vessel operating expenses are recognized when incurred.

Cash and cash equivalents

The Company classifies all highly liquid investments with a maturity date of three months or less at inception as cash equivalents.

Accounts receivable and allowance for doubtful accounts

Accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in existing accounts receivable. The Company determines the allowance based on historical write-off experience and customer economic data. The Company reviews the allowance for doubtful accounts regularly and past due balances are reviewed for collectability. Account balances are charged off against the allowance when the Company believes that the receivable will not be recovered. There were no significant amounts recorded as allowance for doubtful accounts as at December 31, 2012, 2011, and 2010.

Marketable securities

The Company’s investments in marketable securities are classified as available-for-sale securities and are carried at fair value. Net unrealized gains and losses on available-for-sale securities are reported as a component of accumulated other comprehensive loss. Realized gains and losses on available-for-sale securities are computed based upon the historical cost of these securities applied using the weighted-average historical cost method.

F-9

TEEKAY CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in thousands of U.S. dollars, other than share data)

The Company analyzes its available-for-sale securities for impairment during each reporting period to evaluate whether an event or change in circumstances has occurred in that period that may have a significant adverse effect on the fair value of the investment. The Company records an impairment charge through current-period earnings and adjusts the cost basis for such other-than-temporary declines in fair value when the fair value is not anticipated to recover above cost within a three-month period after the measurement date, unless there are mitigating factors that indicate an impairment charge through earnings may not be required. If an impairment charge is recorded, subsequent recoveries in fair value are not reflected in earnings until sale of the security.

Vessels and equipment

All pre-delivery costs incurred during the construction of newbuildings, including interest, supervision and technical costs, are capitalized. The acquisition cost and all costs incurred to restore used vessels purchased by the Company to the standard required to properly service the Company’s customers are capitalized.

Depreciation is calculated on a straight-line basis over a vessel’s estimated useful life, less an estimated residual value. Depreciation is calculated using an estimated useful life of 25 years for tankers carrying crude oil and refined product, 20 to 30 years for FPSO units, 35 years for liquefied natural gas (or LNG) and 30 years for liquefied petroleum gas (or LPG) carriers, commencing the date the vessel is delivered from the shipyard, or a shorter period if regulations prevent the Company from operating the vessels for those periods of time. Floating storage and off take (or FSO) units are depreciated over the term of the contract. Depreciation includes depreciation on all owned vessels and amortization of vessels accounted for as capital leases. Depreciation of vessels and equipment, excluding amortization of dry docking expenditures, for the years ended December 31, 2012, 2011, and 2010 aggregated $364.3 million, $356.0 million and $355.5 million, respectively. Amortization of vessels accounted for as capital leases was $30.1 million, $34.7 million and $33.5 million for the years ended December 31, 2012, 2011, and 2010, respectively.

Vessel capital modifications include the addition of new equipment or can encompass various modifications to the vessel that are aimed at improving or increasing the operational efficiency and functionality of the asset. This type of expenditure is amortized over the estimated useful life of the modification. Expenditures covering recurring routine repairs and maintenance are expensed as incurred.

Interest costs capitalized to vessels and equipment for the years ended December 31, 2012, 2011, and 2010, aggregated $34.9 million, $8.1 million and $14.0 million, respectively.

Generally, the Company dry docks each tanker and gas carrier every two and a half to five years. The Company capitalizes a substantial portion of the costs incurred during dry docking and amortizes those costs on a straight-line basis over their estimated useful life, which typically is from the completion of a dry docking or intermediate survey to the estimated completion of the next dry docking. The Company includes in capitalized dry docking those costs incurred as part of the dry dock to meet classification and regulatory requirements. The Company expenses costs related to routine repairs and maintenance performed during dry docking, and for annual class survey costs on the Company’s FPSO units.

Dry docking activity for the three years ended December 31, 2012, 2011, and 2010, is summarized as follows:

	Year Ended December 31,
	2012 $			2011 $			2010 $
Balance at the beginning of the year		128,987			143,103			172,053
Costs incurred for drydocking		35,336			54,296			57,156
Dry-dock amortization		(57,082	)		(67,180	)		(86,106	)
Write down / sale of vessels		(6,313	)		(1,232	)		—
Balance at the end of the year		100,928			128,987			143,103

Vessels and equipment that are “held and used” are assessed for impairment when events or circumstances indicate the carrying amount of the asset may not be recoverable. If the asset’s net carrying value exceeds the net undiscounted cash flows expected to be generated over its remaining useful life, the carrying amount of the asset is reduced to its estimated fair value. The estimated fair value for the Company’s impaired vessels is determined using discounted cash flows or appraised values. In cases where an active second hand sale and purchase market does not exist, the Company uses a discounted cash flow approach to estimate the fair value of an impaired vessel. In cases where an active second hand sale and purchase market exists an appraised value is used to estimate the fair value of an impaired vessel. An appraised value is generally the amount the Company would expect to receive if it were to sell the vessel. Such appraisal is normally completed by the Company and based on second-hand sale and purchase data.

Gains on vessels sold and leased back under capital leases are deferred and amortized over the remaining term of the capital lease. Losses on vessels sold and leased back under capital leases are recognized immediately when the fair value of the vessel at the time of sale and lease-back is less than its book value. In such case, the Company would recognize a loss in the amount by which book value exceeds fair value.

F-10

TEEKAY CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in thousands of U.S. dollars, other than share data)

Direct financing leases and other loan receivables

The Company (i) employs two vessels on long-term time charters and employs an FSO unit, and (ii) assembles, installs, operates and leases equipment that reduces volatile organic compound emissions (or VOC Equipment) during loading, transportation and storage of oil and oil products, all of which are accounted for as direct financing leases. The lease payments received by the Company under these lease arrangements are allocated between the net investments in the leases and revenues or other income using the effective interest method so as to produce a constant periodic rate of return over the lease terms.

The Company’s investments in loan receivables are recorded at cost. The premium paid over the outstanding principal amount, if any, is amortized to interest income over the term of the loan using the effective interest rate method. The Company analyzes its loans for impairment during each reporting period. A loan is impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. Factors the Company considers in determining that a loan is impaired include, among other things, an assessment of the financial condition of the debtor, payment history of the debtor, general economic conditions, the credit rating of the debtor, the value of any collateral, and any information provided by the debtor regarding its ability to repay the loan. When a loan is impaired, the Company measures the amount of the impairment based on the present value of expected future cash flows discounted at the loan’s effective interest rate and recognizes the resulting impairment in the consolidated statement of loss.

The following table contains a summary of the Company’s financing receivables by type of borrower, the method by which the Company monitors the credit quality of its financing receivables on a quarterly basis, and the grade as of December 31, 2012.

					December 31,
Class of Financing Receivable	Credit Quality Indicator	Grade			2012 $		2011 $
Direct financing leases	Payment activity		Performing			436,601		459,908
Other loan receivables
Investment in term loans and interest receivable	Collateral		Performing(2)			119,385		188,616
Investment in term loans and interest receivable	Collateral		(3	)		69,371		—
Loans to equity accounted investees and joint venture partners (1)	Other internal metrics		Performing			206,903		85,248
Long term receivable included in other assets	Payment activity		Performing			1,704		786
						833,964		734,558

(1) The Company’s subsidiary Teekay LNG Partners L.P. (or Teekay LNG) owns a 99% interest in Teekay Tangguh Borrower LLC (or Teekay Tangguh), which owns a 70% interest in Teekay BLT Corporation (or Teekay Tangguh Subsidiary). During the year ended December 31, 2012, one of Teekay LNG’s joint venture partner’s parent company, PT Berlian Laju Tanker (or BLT), suspended trading on the Jakarta Stock Exchange and entered into a court-supervised restructuring under the Suspension of Payment process in Indonesia, in order to restructure its debts. The Company believes the loans to BLT and Teekay LNG’s joint venture partner, BLT LNG Tangguh Corporation, totaling $24.0 million as at December 31, 2012 (2011—$19.1 million) are collectible given the expected cash flows anticipated to be generated by the Teekay Tangguh Subsidiary that can be used to repay the loan and given the underlying collateral securing the loans to BLT.

(2) Subsequent to December 31, 2012, the borrower did not pay in full the January 31, 2013 interest payment. It is expected that the Company will recover all amounts due under the loan agreements based upon cash flow generated by the borrower, financial support from the borrower’s ultimate parent company and the Company realizing the value of the primary collateral, two 2010-built Very Large Crude Carriers.

(3) As of December 31, 2012, the estimated fair value of the asset that has been pledged as collateral for the loan is greater than 95% of the principal amount of the loan and unpaid interest. Subsequent to the end of the year, the borrower did not pay in full the January 31, 2013 interest payment. Based on a review of the borrower’s financial condition, it is expected that a full recovery of all amounts due under the loan agreement will be dependent upon cash flow generated by the borrower, financial support from the borrower’s ultimate parent company and the Company realizing the value of the primary collateral, a 2011-built Very Large Crude Carrier.

Joint ventures

The Company’s investments in joint ventures are accounted for using the equity method of accounting. Under the equity method of accounting, investments are stated at initial cost and are adjusted for subsequent additional investments and the Company’s proportionate share of earnings or losses and distributions. The Company evaluates its investments in joint ventures for impairment when events or circumstances indicate that the carrying value of such investments may have experienced an other than temporary decline in value below their carrying value. If the estimated fair value is less than the carrying value and is considered an other than temporary decline, the carrying value is written down to its estimated fair value and the resulting impairment is recorded in the consolidated statement of loss.

Debt issuance costs

Debt issuance costs, including fees, commissions and legal expenses, are deferred and presented as other non-current assets. Debt issuance costs of revolving credit facilities are amortized on a straight-line basis over the term of the relevant facility. Debt issuance costs of term loans are amortized using the effective interest rate method over the term of the relevant loan. Amortization of debt issuance costs is included in interest expense.

F-11

TEEKAY CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in thousands of U.S. dollars, other than share data)

Derivative instruments

All derivative instruments are initially recorded at fair value as either assets or liabilities in the accompanying consolidated balance sheets and subsequently remeasured to fair value, regardless of the purpose or intent for holding the derivative. The method of recognizing the resulting gain or loss is dependent on whether the derivative contract is designed to hedge a specific risk and whether the contract qualifies for hedge accounting. The Company does not apply hedge accounting to its derivative instruments, except for certain foreign exchange currency contracts and certain types of interest rate swaps that it may enter into in the future (See Note 15).

When a derivative is designated as a cash flow hedge, the Company formally documents the relationship between the derivative and the hedged item. This documentation includes the strategy and risk management objective for undertaking the hedge and the method that will be used to assess the effectiveness of the hedge. Any hedge ineffectiveness is recognized immediately in earnings, as are any gains and losses on the derivative that are excluded from the assessment of hedge effectiveness. The Company does not apply hedge accounting if it is determined that the hedge was not effective or will no longer be effective, the derivative was sold or exercised, or the hedged item was sold, or repaid.

For derivative financial instruments designated and qualifying as cash flow hedges, changes in the fair value of the effective portion of the derivative financial instruments are initially recorded as a component of accumulated other comprehensive loss in total equity. In the periods when the hedged items affect earnings, the associated fair value changes on the hedging derivatives are transferred from total equity to the corresponding earnings line item in the consolidated statements of loss. The ineffective portion of the change in fair value of the derivative financial instruments is immediately recognized in earnings in the consolidated statements of loss. If a cash flow hedge is terminated and the originally hedged item is still considered possible of occurring, the gains and losses initially recognized in total equity remain there until the hedged item impacts earnings, at which point they are transferred to the corresponding earnings line item (e.g. general and administrative expense) item in the consolidated statements of loss. If the hedged items are no longer possible of occurring, amounts recognized in total equity are immediately transferred to the earnings item in the consolidated statements of loss.

For derivative financial instruments that are not designated or that do not qualify as hedges under Financial Accounting Standards Board (or FASB) Accounting Standards Codification (or ASC) 815, Derivatives and Hedging, the changes in the fair value of the derivative financial instruments are recognized in earnings. Gains and losses from the Company’s non-designated interest rate swaps related to long-term debt, capital lease obligations, restricted cash deposits, non-designated bunker fuel swap contracts and forward freight agreements, and non-designated foreign exchange currency forward contracts are recorded in realized and unrealized gain (loss) on non-designated derivative instruments. Gains and losses from the Company’s hedge accounted foreign currency forward contracts are recorded primarily in vessel operating expenses and general and administrative expense. Gains and losses from the Company’s non-designated cross currency swap are recorded in foreign currency exchange (loss) gain in the consolidated statements of loss.

Goodwill and intangible assets

Goodwill is not amortized, but reviewed for impairment at the reporting unit level on an annual basis or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. When goodwill is reviewed for impairment, the Company may elect to assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. Alternatively, the Company may bypass this step and use a fair value approach to identify potential goodwill impairment and, when necessary, measure the amount of impairment. The Company uses a discounted cash flow model to determine the fair value of reporting units, unless there is a readily determinable fair market value. Intangible assets are assessed for impairment when and if impairment indicators exist. An impairment loss is recognized if the carrying amount of an intangible asset is not recoverable and its carrying amount exceeds its fair value.

The Company’s intangible assets consist primarily of acquired time-charter contracts and contracts of affreightment. The value ascribed to the time-charter contracts and contracts of affreightment are being amortized over the life of the associated contract, with the amount amortized each year being weighted based on the projected revenue to be earned under the contracts.

Asset retirement obligation

The Company has an asset retirement obligation (or ARO) relating to the sub-sea production facility associated with the Petrojarl Banff FPSO unit operating in the North Sea. This obligation generally involves restoration of the environment surrounding the facility and removal and disposal of all production equipment. This obligation is expected to be settled at the end of the contract under which the FPSO unit currently operates, which is anticipated no later than 2018. The ARO will be covered in part by contractual payments from FPSO contract counterparties.

The Company records the fair value of an ARO as a liability in the period when the obligation arises. The fair value of the ARO is measured using expected future cash outflows discounted at the Company’s credit-adjusted risk-free interest rate. When the liability is recorded, the Company capitalizes the cost by increasing the carrying amount of the related equipment. Each period, the liability is increased for the change in its present value, and the capitalized cost is depreciated over the useful life of the related asset. Changes in the amount or timing of the estimated ARO are recorded as an adjustment to the related asset and liability. As at December 31, 2012, the ARO and associated receivable which is recorded in other non-current assets from third parties were $24.7 million and $6.4 million, respectively (2011—$21.2 million and $6.1 million, respectively).

F-12

TEEKAY CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in thousands of U.S. dollars, other than share data)

Repurchase of common stock

The Company accounts for repurchases of common stock by decreasing common stock by the par value of the stock repurchased. In addition, the excess of the repurchase price over the par value is allocated between additional paid in capital and retained earnings. The amount allocated to additional paid in capital is the pro-rata share of the capital paid in and the balance is allocated to retained earnings.

Issuance of shares or units by subsidiaries

The Company accounts for dilution gains or losses from the issuance of shares or units by its publicly listed subsidiaries as an adjustment to retained earnings.

Share-based compensation

The Company grants stock options, restricted stock units, performance share units and restricted stock awards as incentive-based compensation to certain employees and directors. The Company measures the cost of such awards using the grant date fair value of the award and recognizes that cost, net of estimated forfeitures, over the requisite service period, which generally equals the vesting period. For stock-based compensation awards subject to graded vesting, the Company calculates the value for the award as if it was one single award with one expected life and amortizes the calculated expense for the entire award on a straight-line basis over the vesting period of the award.

Compensation cost for awards with performance conditions is recognized when it is probable that the performance condition will be achieved. The compensation cost of the Company’s stock-based compensation awards are substantially reflected in general and administrative expense.

In 2005, the Company adopted the Vision Incentive Plan (or the VIP) to reward exceptional corporate performance and shareholder returns. This plan was designed to result in an award pool for senior management based on the following two measures: (a) economic profit from 2005 to 2010; and (b) market value added from 2001 to 2010. In March 2008, an interim distribution was made to certain participants with a value of $13.3 million, paid in restricted stock units, with vesting of the interim distribution in three equal amounts on November 2008, November 2009 and November 2010. In September 2009, 187,400 restricted stock units, with two-year bullet vesting, were granted as the June 2009 New Participants Reserve Pool allocation under the VIP. The Plan terminated on December 31, 2010 and no final award was granted to participants. During the year ended December 31, 2012, the Company recorded an expense from the VIP of $nil ($1.3 million – 2011 and $2.4 million – 2010), which is included in general and administrative expense. As at December 31, 2012 and 2011, there was no VIP liability.

Income taxes

The Company accounts for income taxes using the liability method. Under the liability method, deferred tax assets and liabilities are recognized for the anticipated future tax effects of temporary differences between the financial statement basis and the tax basis of the Company’s assets and liabilities using the applicable jurisdictional tax rates. A valuation allowance for deferred tax assets is recorded when it is more likely than not that some or all of the benefit from the deferred tax asset will not be realized.

Recognition of uncertain tax positions is dependent upon whether it is more-likely-than-not that a tax position taken or expected to be taken in a tax return will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. If a tax position meets the more-likely-than-not recognition threshold, it is measured to determine the amount of benefit to recognize in the financial statements. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense.

The Company believes that it and its subsidiaries are not subject to taxation under the laws of the Republic of The Marshall Islands or Bermuda, or that distributions by its subsidiaries to the Company will be subject to any taxes under the laws of such countries, and that it qualifies for the Section 883 exemption under U.S. federal income tax purposes.

Accumulated other comprehensive (loss) income

The following table contains the changes in the balances of each component of accumulated other comprehensive income (loss) for the periods presented.

	Qualifying Cash Flow Hedging Instruments $			Pension Adjustments $			Unrealized Gain (Loss) on Available for Sale Marketable Securities $			Foreign Exchange Loss on Currency Translation $		Total $
Balance as of December 31, 2009		2,923			(10,294	)		5,837			—		(1,534	)
Other comprehensive (loss) income		(628	)		(7,245	)		1,236			—		(6,637	)
Balance as of December 31, 2010		2,295			(17,539	)		7,073			—		(8,171	)
Other comprehensive loss		(2,601	)		(5,402	)		(7,729	)		—		(15,732	)
Balance as of December 31, 2011		(306	)		(22,941	)		(656	)		—		(23,903	)
Other comprehensive income		647			6,688			656			1,144		9,135
Balance as of December 31, 2012		341			(16,253	)		—			1,144		(14,768	)

F-13

TEEKAY CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in thousands of U.S. dollars, other than share data)

Employee pension plans

The Company has defined contribution pension plans covering the majority of its employees. Pension costs associated with the Company’s required contributions under its defined contribution pension plans are based on a percentage of employees’ salaries and are charged to earnings in the year incurred. The Company also has defined benefit pension plans covering certain of its employees. The Company accrues the costs and related obligations associated with its defined benefit pension plans based on actuarial computations using the projected benefits obligation method and management’s best estimates of expected plan investment performance, salary escalation, and other relevant factors. For the purpose of calculating the expected return on plan assets, those assets are valued at fair value. The overfunded or underfunded status of the defined benefit pension plans are recognized as assets or liabilities in the consolidated balance sheet. The Company recognizes as a component of other comprehensive loss, the gains or losses that arise during a period but that are not recognized as part of net periodic benefit costs.

Earnings (loss) per common share

The computation of basic earnings (loss) per share is based on the weighted average number of common shares outstanding during the period. The computation of diluted earnings per share assumes the exercise of all dilutive stock options and restricted stock awards using the treasury stock method. The computation of diluted loss per share does not assume such exercises.

Adoption of new accounting pronouncements

In January 2012, the Company adopted an amendment to FASB ASC 820, Fair Value Measurement, which clarifies or changes the application of existing fair value measurements, including: that the highest and best use and valuation premise in a fair value measurement are relevant only when measuring the fair value of nonfinancial assets; that a reporting entity should measure the fair value of its own equity instrument from the perspective of a market participant that holds that instrument as an asset; to permit an entity to measure the fair value of certain financial instruments on a net basis rather than based on its gross exposure when the reporting entity manages its financial instruments on the basis of such net exposure; that in the absence of a Level 1 input, a reporting entity should apply premiums and discounts when market participants would do so when pricing the asset or liability consistent with the unit of account; and that premiums and discounts related to size as a characteristic of the reporting entity’s holding are not permitted in a fair value measurement. The adoption of this standard did not have an impact on the Company’s consolidated financial statements other than the disclosures as presented in note 3 – Financial Instruments.

2. Segment Reporting

The Company is a leading provider of international crude oil and gas marine transportation services and also offers offshore oil production storage and offloading services, primarily under long-term fixed-rate contracts.

The Company has four reportable segments: its shuttle tanker and FSO segment (or Teekay Shuttle and Offshore), its FPSO segment (or Teekay Petrojarl), its liquefied gas segment (or Teekay Gas Services) and its conventional tanker segment (or Teekay Tanker Services). The Company’s shuttle tanker and FSO segment consists of shuttle tankers and FSO units. The Company’s FPSO segment consists of FPSO units and other vessels used to service its FPSO contracts. The Company’s liquefied gas segment consists of LNG and LPG carriers. The Company’s conventional tanker segment consists of conventional crude oil and product tankers that: (i) are subject to long-term, fixed-rate time-charter contracts, which have an original term of one year or more; (ii) operate in the spot tanker market; or (iii) are subject to time-charters or contracts of affreightment that are priced on a spot-market basis or are short-term, fixed-rate contracts, which have an original term of less than one year. Segment results are evaluated based on income from vessel operations. The accounting policies applied to the reportable segments are the same as those used in the preparation of the Company’s consolidated financial statements.

The following tables present results for these segments for the years ended December 31, 2012, 2011, and 2010.

Year ended December 31, 2012	Shuttle Tanker and FSO Segment $		FPSO Segment $		Liquefied Gas Segment $		Conventional Tanker Segment $			Total $
Revenues		613,388		581,215		286,237		475,395			1,956,235
Voyage expenses		104,382		232		283		33,386			138,283
Vessel operating expenses		175,459		331,124		45,972		177,564			730,119
Time-charter hire expense		56,989		—		—		73,750			130,739
Depreciation and amortization		125,104		135,413		69,064		126,317			455,898
General and administrative (2)		54,139		68,035		21,969		58,824			202,967
Asset impairments		28,830		—		—		405,252			434,082
Net loss on sale of vessels and equipment		1,112		—		—		5,863			6,975
Restructuring charges		652		—		—		6,913			7,565
Income (loss) from vessel operations		66,721		46,411		148,949		(412,474	)		(150,393	)
Total assets of operating segments at December 31, 2012		1,709,674		2,824,832		3,148,037		2,037,394			9,719,938

F-14

TEEKAY CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in thousands of U.S. dollars, other than share data)

Year ended December 31, 2011	Shuttle Tanker and FSO Segment $		FPSO Segment $			Liquefied Gas Segment $			Conventional Tanker Segment $			Total $
Revenues		613,768		464,810			272,041			603,163			1,953,782
Voyage expenses		97,743		—			4,862			74,009			176,614
Vessel operating expenses		196,536		242,332			48,158			190,661			677,687
Time-charter hire expense		74,478		—			—			139,701			214,179
Depreciation and amortization		129,293		96,915			63,641			138,759			428,608
General and administrative (2)		60,359		52,854			20,586			89,817			223,616
Asset impairments		43,185		—			—			112,103			155,288
Net loss (gain) on sale of vessels and equipment		171		(4,888	)		—			488			(4,229	)
Bargain purchase gain		—		(68,535	)		—			—			(68,535	)
Goodwill impairment		—		—			—			36,652			36,652
Restructuring charges		5,351		—			—			139			5,490
Income (loss) from vessel operations		6,652		146,132			134,794			(179,166	)		108,412
Total assets of operating segments at December 31, 2011		1,891,496		2,527,095			2,924,653			2,572,685			9,915,929
Year ended December 31, 2010	Shuttle Tanker and FSO Segment $		FPSO Segment $			Liquefied Gas Segment $			Conventional Tanker Segment $			Total $
Revenues (1)		622,195		463,931			248,378			761,249			2,095,753
Voyage expenses		111,003		—			29			134,065			245,097
Vessel operating expenses		182,614		209,283			46,497			192,153			630,547
Time-charter hire expense		89,768		—			—			196,224			285,992
Depreciation and amortization		127,438		95,784			62,904			154,579			440,705
General and administrative (2)		51,281		42,714			20,147			79,601			193,743
Asset impairments		19,480		—			—			31,730			51,210
Net (gain) loss on sale of vessels and equipment		—		—			(4,340	)		2,280			(2,060	)
Restructuring charges		704		—			394			15,298			16,396
Income (loss) from vessel operations		39,907		116,150			122,747			(44,681	)		234,123

(1) FPSO segment includes $59.2 million in revenue for the year ended December 31, 2010, related to operations in previous years as a result of executing a contract amendment in March 2010.

(2) Includes direct general and administrative expenses and indirect general and administrative expenses (allocated to each segment based on estimated use of corporate resources).

A reconciliation of total segment assets to amounts presented in the accompanying consolidated balance sheets is as follows:

	December 31, 2012 $		December 31, 2011 $
Total assets of all segments		9,719,938		9,915,929
Cash		639,491		692,127
Accounts receivable and other assets		642,596		529,621
Consolidated total assets		11,002,025		11,137,677

F-15

TEEKAY CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in thousands of U.S. dollars, other than share data)

The following table presents revenues and percentage of consolidated revenues for customers that accounted for more than 10% of the Company’s consolidated revenues during the periods presented. All of these customers are international oil companies.

(U.S. dollars in millions)	Year Ended December 31, 2012			Year Ended December 31, 2011			Year Ended December 31, 2010
Statoil ASA (1)		$299.1 or 15%		$	283.7 or 15	%	$	330.4 or 16	%
Petroleo Brasileiro SA (1)		$289.3 or 15%		$	224.9 or 12	%	$	226.0 or 11	%
BP PLC (2)		(3	)			(3)	$	222.2 or 11	%

(1) Shuttle tanker and FSO, FPSO and conventional tanker segments

(2) Shuttle tanker and FSO, FPSO, liquefied gas and conventional tanker segments

(3) Less than 10%

3. Acquisitions

a) FPSO Units and Investment in Sevan Marine ASA

On November 30, 2011, the Company acquired from Sevan Marine ASA (or Sevan) the FPSO unit Sevan Hummingbird (or Hummingbird Spirit) and its existing customer contract for approximately $184 million (including an adjustment for working capital) and made an investment of approximately $25 million to obtain a 40% ownership interest in a recapitalized Sevan. The Company also entered into a cooperation agreement with Sevan relating to joint marketing of offshore projects, the development of future projects, and the financing of such projects. Concurrently, the Company’s subsidiary Teekay Offshore Partners L.P. (or Teekay Offshore) acquired from Sevan the FPSO unit Sevan Piranema (or Piranema Spirit) and its existing customer contract for approximately $164 million (including an adjustment for working capital). The purchase price for the acquisitions of the Hummingbird Spirit, the Piranema Spirit and the investment in Sevan were paid in cash and financed by a combination of new debt facilities, a private placement of Teekay Offshore common units and existing liquidity.

On November 30, 2011, the Company also entered into an agreement to acquire the FPSO unit Sevan Voyageur (or Voyageur Spirit) and its existing customer contract from Sevan. The Company has agreed to acquire the Voyageur Spirit once the existing upgrade project is completed and the Voyageur Spirit commences operations under its customer contract, which occurred in April 2013. Under the terms of the agreement, the Company will pay Sevan $94 million to acquire the Voyageur Spirit, will assume the Voyageur Spirit’s existing $230.0 million credit facility, which had an outstanding balance of $220.5 million on November 30, 2011, and is responsible for all upgrade costs after November 30, 2011, which are estimated to be between $140 million and $150 million (see Note 16c). The Company has control over the upgrade project and has guaranteed the repayment of the existing credit facility. The Voyageur Spirit has been consolidated by the Company since November 30, 2011, as the Voyageur Spirit has been determined to be a variable interest entity (or VIE) and the Company has been determined to be the primary beneficiary. The following table summarizes the balance sheet of the Voyageur Spirit as at December 31, 2012:

	$
ASSETS
Cash and cash equivalents		9,756
Other current assets		11,380
Vessels and equipment		455,819
Deferred tax assets		1,955
Total assets		478,910
LIABILITIES AND EQUITY
Accounts payable		18,359
Accrued liabilities		3,687
Long-term debt(note 8)		230,359
Derivative liabilities		4,509
Other long-term liabilities		13,344
Total liabilities		270,258
Total equity		208,652
Total liabilities and total equity		478,910

The 2007-built Piranema Spirit FPSO unit is currently operating under a long-term charter to Petrobras S.A. on the Piranema field located in the Brazil offshore region. The charter includes a firm contract period through March 2018, with up to 11 one-year extension options that includes cost-escalation clauses.

F-16

TEEKAY CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in thousands of U.S. dollars, other than share data)

The 2008-built Hummingbird Spirit FPSO unit is currently operating under a charter to Centrica Energy Upstream on the Chestnut field in the UK sector of the North Sea. The charter was recently extended to December 2013 and thereafter, includes five three-month extension options.

The 2009-built Voyageur Spirit FPSO unit operated successfully on the Shelley field in the UK sector of the North Sea from August 2009 to August 2010. The unit under-went an upgrade prior to commencement of its charter contract with E.ON Ruhrgas UK E&P on the Huntington field in the UK sector of the North Sea. The charter commenced in April 2013 and has a firm period of five years, with extension options.

This transaction consolidates the industry in the harsh environment FPSO space, broadens the Company’s FPSO offering to include both ship shape and cylindrical FPSO solutions and was concluded at an attractive price. The Company recognized a total bargain purchase gain of $68.5 million related to the acquisition of the FPSO units and the 40% equity investment in Sevan. The gain has been recorded in the consolidated statements of loss for the year ended December 31, 2011.

During 2011, Sevan encountered severe financial difficulties following significant cost overruns on the upgrade of the Voyageur Spirit and was unable to service its existing financial obligations. The acceptance of the Company’s offer and the recognition of the bargain purchase gain, was in part due to the Company’s ability to structure the transaction in a way that would satisfy all the various stakeholders, including Sevan’s management, lenders, customers and shareholders, within a short time frame, the Company’s financial strength and limited competition in the transaction. As a result, the Company was able to purchase this business at a discount in this distressed acquisition situation.

The Company’s acquisition was accounted for using the purchase method of accounting, based upon estimates of fair value. The purchase price allocation was finalized in 2012 and there were changes to the preliminary fair values of the assets acquired and liabilities assumed by the Company. The changes are summarized in the table below. The Company’s 2011 consolidated financial statements were retroactively adjusted to include the impact of the revisions to the Company’s preliminary purchase price allocation. The operating results of the Hummingbird Spirit, Piranema Spirit and Voyageur Spirit are reflected in the Company’s consolidated financial statements from November 30, 2011, the effective date of acquisition. During the year ended December 31, 2011, the Company recognized $14.5 million of revenue and $68.4 million of net income, including the bargain purchase gain, resulting from these acquisitions. In addition, the Company incurred $1.1 million of acquisition-related expenses, which are reflected in general and administrative expenses.

The following table summarizes the preliminary and final purchase price allocation, which included the Voyageur Spirit VIE, by the Company at November 30, 2011:

	Preliminary $			Revisions $			Final $
ASSETS
Cash and cash equivalents		50,230			—			50,230
Other current assets		29,209			—			29,209
Vessels and equipment		869,952			22,400			892,352
Deferred income taxes		3,307			—			3,307
Investment in Sevan Marine		49,200			(12,100	)		37,100
Other assets—long-term		659			—			659
Total assets acquired		1,002,557			10,300			1,012,857
Current liabilities		41,376			—			41,376
In-process revenue contracts		158,968			—			158,968
Long-term debt (note 8)		220,497			—			220,497
Other long-term liabilities		6,036			—			6,036
Non-controlling interest		144,600			—			144,600
Total liabilities assumed		571,477			—			571,477
Net assets acquired		431,080			—			441,380
Bargain purchase gain		(58,235	)		(10,300	)		(68,535	)
Cash consideration		372,845			—			372,845

F-17

TEEKAY CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in thousands of U.S. dollars, other than share data)

The following table shows comparative summarized consolidated pro forma financial information for the Company for the years ended December 31, 2011 and 2010, giving effect to the Company’s acquisition of the Sevan FPSO units as if it had taken place on January 1, 2010:

	Pro Forma Year Ended December 31, 2011 (unaudited) $			Pro Forma Year Ended December 31, 2010 (unaudited) $
Revenues		2,109,929			2,284,336
Net loss		(372,132	)		(176,456	)
Loss per common share
- Basic		(5.03	)		(3.79	)
- Diluted		(5.03	)		(3.79	)

b) Teekay LNG – Marubeni Joint Venture

In February 2012, a joint venture between the Company’s subsidiary Teekay LNG Partners L.P. (or Teekay LNG) and Marubeni Corporation (or Teekay LNG-Marubeni Joint Venture) acquired a 100% interest in six LNG carriers from Denmark-based A.P. Moller-Maersk A/S for approximately $1.3 billion. The Teekay LNG-Marubeni Joint Venture financed this acquisition with $1.06 billion from secured loan facilities and an aggregate of $266 million from equity contributions from Teekay LNG and Marubeni Corporation. Teekay LNG has agreed to guarantee its 52% share of the secured loan facilities of the Teekay LNG-Marubeni Joint Venture and, as a result, deposited $30 million in a restricted cash account as security. Teekay LNG has a 52% economic interest in the Teekay LNG-Marubeni Joint Venture and, consequently, its share of the equity contribution was approximately $138.2 million. Teekay LNG also contributed an additional $5.8 million for its share of legal and financing costs. Teekay LNG financed this equity contribution by borrowing under its existing credit facilities. This jointly-controlled entity is accounted for using the equity method.

4. Investment in Term Loans

In February 2011, Teekay made a $70 million term loan (or the 2011 Loan) to an unrelated ship-owner of a 2011-built Very Large Crude Carrier (or VLCC). The 2011 Loan bears interest at 9% per annum, which is payable quarterly. The 2011 Loan is repayable in full in February 2014. However, it may be repaid prior to maturity at the option of the borrower. The 2011 Loan is collateralized by a first-priority mortgage on the VLCC, together with other related collateral.

In July 2010, the Company’s subsidiary Teekay Tankers Ltd. (or Teekay Tankers) acquired two term loans with a total principal amount outstanding of $115.0 million for a total cost of $115.6 million (the Loans). The Loans bear interest at an annual interest rate of 9% per annum, and include a repayment premium feature which provides a total investment yield of approximately 10% per annum. The 9% interest income is received in quarterly installments and the Loans and repayment premium are payable in full at maturity in July 2013 when the repayment premium of 3% is calculated on the principal amount of the Loan outstanding at maturity. As at December 31, 2012 and 2011, the repayment premium included in the principal balance was $2.7 million and $1.5 million, respectively. The Loans are collateralized by first-priority mortgages on two 2010-built VLCCs owned by a shipowner based in Asia, together with other related security. The Loans can be repaid prior to maturity, at the option of the borrower.

The borrower on the 2011 Loan and the Loans is facing financial difficulty and subsequent to December 31, 2012 has defaulted on its interest payment obligations since January 31, 2013. If the borrower continues to be unable to make interest payments or to repay principal under these term loans, Teekay and Teekay Tankers may need to seek to foreclose on the security interests in the VLCCs.

Interest income in respect of the investments in the term loans is included in revenues in the consolidated statements of loss. As at December 31, 2012 and 2011, $2.8 million and $2.8 million, respectively, in interest receivable from the investment in these term loans were recorded in the consolidated balance sheets as accounts receivable.

The maximum potential loss relating to these loans is the Company’s original investment of $185.6 million and any unpaid interest, less the realized value of the underlying collateral.

5. Financing Transactions

Teekay LNG and Teekay Offshore are limited partnerships formed by the Company as part of its strategy to expand its operations primarily in the LNG and LPG shipping sector (Teekay LNG) and to expand its operations in the offshore oil marine transportation, production, processing and storage sectors (Teekay Offshore). Teekay Tankers is a corporation formed by the Company to provide international marine transportation of crude oil and refined products. As of December 31, 2012, Teekay owned a 37.5% interest in Teekay LNG (40.1%—December 31, 2011), including common units and its 2% general partner interest, a 29.4% interest in Teekay Offshore (33.0%—December 31, 2011), including common units and its 2% general partner interest and 25.1% of the capital stock of Teekay Tankers (26.0%—December 31, 2011), including Teekay Tankers’ outstanding shares of Class B common stock, which entitle the holders to five votes per share, subject to a 49% aggregate Class B Common Stock voting power maximum. Teekay maintains control of Teekay LNG and Teekay Offshore by virtue of its control of the general partner of each partnership and thus consolidates these subsidiaries. Teekay has entered into an omnibus agreement with Teekay LNG and Teekay Offshore to govern, among other things, when the Company, Teekay LNG and Teekay Offshore may compete with each other and to provide the applicable parties certain rights of first offer on LNG carriers, oil tankers, shuttle tankers, FSO units and FPSO units. In addition, Teekay has entered into a non-competition agreement with Teekay Tankers, which provides Teekay Tankers with a right of first refusal to participate in any future conventional crude oil tanker and product tanker opportunities developed by Teekay for a period of three years from June 2012.

F-18

TEEKAY CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in thousands of U.S. dollars, other than share data)

During the years ended December 31, 2012, 2011, and 2010, the Company’s publicly traded subsidiaries, Teekay Tankers, Teekay Offshore and Teekay LNG completed the following public offerings and equity placements:

	Total  Proceeds Received $		Less: Teekay Corporation Portion $			Offering Expenses $			Net  Proceeds Received $
2012
Teekay Offshore Public Offerings		219,474		(4,389	)		(8,164	)		206,921
Teekay Offshore Direct Equity Placement		45,919		(919	)		—			45,000
Teekay Tankers Public Offerings		69,000		—			(3,229	)		65,771
Teekay LNG Public Offering		189,243		(3,784	)		(6,927	)		178,532
2011
Teekay Tankers Public Offerings		112,054		—			(4,820	)		107,234
Teekay Offshore Private Equity Placement		420,145		(230,144	)		(279	)		189,722
Teekay LNG Public Offerings		356,133		(7,123	)		(14,909	)		334,101
2010
Teekay Offshore Public Offerings		419,989		(8,400	)		(18,645	)		392,944
Teekay Tankers Public Offerings		243,977		(32,000	)		(9,279	)		202,698
Teekay LNG Direct Equity Placement		51,020		(1,020	)		—			50,000

(1) Consists of the portion Teekay Corporation subscribed for in the public offering or equity placement.

As a result of the public offerings and equity placements of Teekay Tankers, Teekay Offshore and Teekay LNG, the Company recorded increases to retained earnings of $88.7 million (2012), $124.2 million (2011) and $123.2 million (2010). These amounts represent Teekay’s dilution gains from the issuance of units and shares in these consolidated subsidiaries.

6. Goodwill, Intangible Assets and In-Process Revenue Contracts

Goodwill

The carrying amount of goodwill for the years ended December 31, 2012 and 2011, for the Company’s reportable segments are as follows:

	Shuttle Tanker and FSO Segment $		Liquefied  Gas Segment $		Conventional Tanker Segment $			Total $
Balance as of December 31, 2010		130,908		35,631		36,652			203,191
Goodwill impairment		—		—		(36,652	)		(36,652	)
Balance as of December 31, 2011 and 2012		130,908		35,631		—			166,539

A goodwill impairment charge of $36.7 million was recognized in the Company’s consolidated statements of loss for the year ended December 31, 2011 in respect of its Suezmax tanker reporting unit. The fair value of this reporting unit was determined using the present value of expected future cash flows discounted at a rate equivalent to a market participant’s weighted-average cost of capital. The estimates and assumptions regarding expected future cash flows and the appropriate discount rates are in part based upon existing contracts, future tanker market rates, historical experience, financial forecasts and industry trends and conditions. The recognition of the goodwill impairment charge was driven by the continuing weak tanker market, which has largely been caused by an oversupply of vessels relative to demand.

F-19

TEEKAY CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in thousands of U.S. dollars, other than share data)

Intangible Assets

As at December 31, 2012, the Company’s intangible assets consisted of:

	Weighted-Average Amortization Period (Years)		Gross  Carrying Amount $		Accumulated Amortization $			Net  Carrying Amount $
Customer contracts		13.7		316,684		(191,587	)		125,097
Other intangible assets		0.9		1,280		(241	)		1,039
		13.6		317,964		(191,828	)		126,136

As at December 31, 2011 the Company’s intangible assets consisted of:

	Weighted-Average Amortization Period (Years)		Gross Carrying Amount $		Accumulated Amortization $			Net  Carrying Amount $
Customer contracts		15.6		329,815		(194,266	)		135,549
Other intangible assets		4.5		11,430		(10,237	)		1,193
		15.2		341,245		(204,503	)		136,742

Aggregate amortization expense of intangible assets for the year ended December 31, 2012, was $17.2 million (2011—$19.1 million, 2010—$26.2 million), which is included in depreciation and amortization. Amortization of intangible assets for the five years following 2012 is expected to be $18.4 million (2013), $13.0 million (2014), $11.9 million (2015), $10.9 million (2016), $9.9 million (2017) and $62.0 million (thereafter). During the year ended December 31, 2012, unfavorable customer contracts with a carrying value of $5.9 million were reclassified from intangible assets to in-process revenue contracts.

During 2010, the Company recognized $31.7 million in write-downs of three vessel purchase options and certain in-charter customer contracts. The vessel purchase options and in-charter contracts either expired unexercised or were unlikely to be exercised by the Company.

In-Process Revenue Contracts

As part of the Company’s acquisition of FPSO units from Sevan and its previous acquisitions of Petrojarl ASA (subsequently renamed Teekay Petrojarl AS, or Teekay Petrojarl) and 50% of OMI Corporation (or OMI), the Company assumed certain FPSO contracts and time charter-out contracts with terms that were less favorable than the then prevailing market terms. At the time of the acquisitions, the Company recognized a liability based on the estimated fair value of these contracts. The Company is amortizing this liability over the estimated remaining terms of the contracts on a weighted basis based on the projected revenue to be earned under the contracts.

Amortization of in-process revenue contracts for the year ended December 31, 2012 was $72.9 million (2011—$46.4 million, 2010—$48.3 million), which is included in revenues on the consolidated statements of loss. Amortization for the five years following 2012 is expected to be $61.7 million (2013), $40.2 million (2014), $19.8 million (2015), $19.8 million (2016), $19.8 million (2017) and $80.3 million (thereafter).

7. Accrued Liabilities

	December 31,  2012 $		December 31,  2011 $
Voyage and vessel expenses		144,250		209,058
Interest		66,125		63,310
Payroll and benefits and other		100,452		83,528
Deferred revenue		52,391		38,690
		363,218		394,586

8. Long-Term Debt

	December 31, 2012		December 31, 2011
	$		$
Revolving Credit Facilities		1,627,979		2,244,634
Senior Notes (8.5%) due January 15, 2020		447,115		446,825
Norwegian Kroner-denominated Bonds due through May 2017		467,223		100,417
U.S. Dollar-denominated Term Loans due through 2021		2,432,374		2,069,860
U.S. Dollar-denominated Term Loan Variable Interest Entity due October 2016		230,359		220,450
Euro-denominated Term Loans due through 2023		341,382		348,905
U.S. Dollar-denominated Unsecured Demand Loans due to Joint Venture Partners		13,282		13,282
Total		5,559,714		5,444,373
Less current portion		797,411		401,376
Long-term portion		4,762,303		5,042,997

F-20

TEEKAY CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in thousands of U.S. dollars, other than share data)

As of December 31, 2012, the Company had 15 revolving credit facilities (or the Revolvers) available, which, as at such date, provided for aggregate borrowings of up to $2.8 billion, of which $1.2 billion was undrawn. Interest payments are based on LIBOR plus margins; at December 31, 2012, and December 31, 2011, the margins ranged between 0.45% and 3.25%. At December 31, 2012, and December 31, 2011, the three-month LIBOR was 0.31% and 0.58%, respectively. The total amount available under the Revolvers reduces by $740.8 million (2013), $741.3 million (2014), $226.4 million (2015), $346.4 million (2016), $463.0 million (2017) and $321.0 million (thereafter). The Revolvers are collateralized by first-priority mortgages granted on 58 of the Company’s vessels, together with other related security, and include a guarantee from Teekay or its subsidiaries for all outstanding amounts.

The Company’s 8.5% senior unsecured notes (or the 8.5% Notes) are due January 15, 2020 with a principal amount of $450 million. The 8.5% Notes were sold at a price equal to 99.181% of par and the discount is accreted through the maturity date of the notes using the effective interest rate of 8.625% per year. The Company capitalized issuance costs of $9.4 million, which is recorded in other non-current assets in the consolidated balance sheet and is amortized to interest expense over the term of the 8.5% Notes. The 8.5% Notes rank equally in right of payment with all of Teekay’s existing and future senior unsecured debt and senior to any future subordinated debt of Teekay. The 8.5% Notes are not guaranteed by any of Teekay’s subsidiaries and effectively rank behind all existing and future secured debt of Teekay and other liabilities of its subsidiaries.

The Company may redeem the 8.5% Notes in whole or in part at any time before their maturity date at a redemption price equal to the greater of (i) 100% of the principal amount of the 8.5% Notes to be redeemed and (ii) the sum of the present values of the remaining scheduled payments of principal and interest on the 8.5% Notes to be redeemed (excluding accrued interest), discounted to the redemption date on a semi-annual basis, at the treasury yield plus 50 basis points, plus accrued and unpaid interest to the redemption date. In addition, at any time or from time to time prior to January 15, 2013, the Company may redeem up to 35% of the aggregate principal amount of the 8.5% Notes issued under the indenture with the net cash proceeds of one or more qualified equity offerings at a redemption price equal to 108.5% of the principal amount of the 8.5% Notes to be redeemed, plus accrued and unpaid interest, if any, to the redemption date, provided certain conditions are met. No such redemptions had been made as at December 31, 2012.

In November 2010, Teekay Offshore issued in the Norwegian bond market NOK 600 million of senior unsecured bonds that mature in November 2013. As at December 31, 2012, the carrying amount of the bonds was $107.8 million. The bonds are listed on the Oslo Stock Exchange. Interest payments on the bonds are based on NIBOR plus a margin of 4.75%. Teekay Offshore entered into a cross currency rate swap to swap all interest and payments into U.S. Dollars with interest rate payments swapped from NIBOR plus a margin of 4.75% into LIBOR plus a margin of 5.04% and the transfer of the principal amount fixed at $98.5 million upon maturity in exchange for NOK 600 million. Teekay Offshore also entered into an interest rate swap to swap the interest payments from LIBOR to a fixed rate of 1.12%. The floating LIBOR rate receivable from the interest rate swap is capped at 3.5%, which effectively results in a fixed rate of 1.12% unless LIBOR exceeds 3.5%, in which case Teekay Offshore’s related interest rate effectively floats at LIBOR, but reduced by 2.38% (see Note 15).

In January 2012, Teekay Offshore issued in the Norwegian bond market NOK 600 million of senior unsecured bonds that mature in January 2017. As at December 31, 2012, the carrying amount of the bonds was approximately $107.8 million. The bonds are listed on the Oslo Stock Exchange. The interest payments on the bonds are based on NIBOR plus a margin of 5.75%. Teekay Offshore entered into a cross currency rate swap to swap all interest and principal payments into U.S. Dollars, with the interest payments fixed at a rate of 7.49%, and the transfer of the principal amount fixed at $101.4 million upon maturity in exchange for NOK 600 million (see Note 15).

In May 2012, Teekay LNG issued in the Norwegian bond market NOK 700 million of senior unsecured bonds that mature in May 2017. As at December 31, 2012, the carrying amount of the bonds was $125.8 million. The bonds are listed on the Oslo Stock Exchange. The interest payments on the bonds are based on NIBOR plus a margin of 5.25%. Teekay LNG entered into a cross currency rate swap to swap all interest and principal payments into U.S. Dollars, with the interest payments fixed at a rate of 6.88%, and the transfer of principal fixed at $125.0 million upon maturity in exchange for NOK 700 million (see Note 15).

In October 2012, Teekay issued in the Norwegian bond market NOK 700 million of senior unsecured bonds that mature in October 2015. As at December 31, 2012, the carrying amount of the bonds was $125.8 million. The Company has applied to list the bonds on the Oslo Stock Exchange. The interest payments on the bonds are based on NIBOR plus a margin of 4.75%. Teekay entered into a cross currency rate swap to swap all interest and principal payments into U.S. Dollars, with the interest payments fixed at a rate of 5.52%, and the transfer of principal fixed at $122.8 million upon maturity in exchange for NOK 700 million (see Note 15).

As of December 31, 2012, the Company had 18 U.S. Dollar-denominated term loans outstanding, which totaled $2.4 billion (December 31, 2011– $2.1 billion). Certain of the term loans with a total outstanding principal balance of $328.0 million as at December 31, 2012 (December 31, 2011– $372.7 million) bear interest at a weighted-average fixed rate of 5.3% (December 31, 2011 – 5.3%). Interest payments on the remaining term loans are based on LIBOR plus a margin. At December 31, 2012 and December 31, 2011, the margins ranged between 0.3% and 4.25%, and between 0.3% and 4.00%, respectively. At December 31, 2012 and December 31, 2011, the three-month LIBOR was 0.31% and 0.58%, respectively. The term loan payments are made in quarterly or semi-annual payments commencing three or six months after delivery of each newbuilding vessel financed thereby, and 17 of the term loans have balloon or bullet repayments due at maturity. The term loans are collateralized by first-priority mortgages on 36 (December 31, 2011 – 33) of the Company’s vessels, together with certain other security. In addition, at December 31, 2012, all but $107.0 million (December 31, 2011 – $119.4 million) of the outstanding term loans were guaranteed by Teekay or its subsidiaries.

The Voyageur Spirit FPSO unit has been consolidated by the Company effective November 30, 2011, as the Voyageur Spirit has been determined to be a VIE and the Company has been determined to be the primary beneficiary (see Note 3a). As a result, the Company has included the Voyageur Spirit’s existing U.S. Dollar-denominated term loan (VIE term loan) outstanding, which, as at December 31, 2012, totaled

F-21

TEEKAY CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in thousands of U.S. dollars, other than share data)

$230.4 million (December 31, 2011 – $220.5 million). Interest payments on the VIE term loan are based on LIBOR plus a margin of 2.95% and are paid quarterly. The VIE term loan is collateralized by a first-priority mortgage on the Voyageur Spirit, together with certain other security. The Company has guaranteed the repayment of the existing credit facility.

The Company has two Euro-denominated term loans outstanding, which, as at December 31, 2012, totaled 258.8 million Euros ($341.4 million) (December 31, 2011 – 269.2 million Euros ($348.9 million)). The Company is repaying the loans with funds generated by two Euro-denominated, long-term time-charter contracts. Interest payments on the loans are based on EURIBOR plus a margin. At December 31, 2012, and December 31, 2011, the margins ranged between 0.6% and 2.25% and the one-month EURIBOR at December 31, 2012, was 0.1% (December 31, 2011 – 1.02%). The Euro-denominated term loans reduce in monthly payments with varying maturities through 2023 and are collateralized by first-priority mortgages on two of the Company’s vessels, together with certain other security, and are guaranteed by a subsidiary of Teekay.

Both Euro-denominated term loans and Norwegian Kroner-denominated bonds are revalued at the end of each period using the then-prevailing U.S. Dollar exchange rate. Due primarily to the revaluation of the Company’s Norwegian Kroner-denominated bonds, the Company’s Euro-denominated term loans, capital leases and restricted cash, and the change in the valuation of the Company’s cross currency swaps, the Company recognized foreign exchange loss of $12.9 million (2011 – $12.7 million gain, 2010 – $32.0 million gain).

The Company has one U.S. Dollar-denominated loan outstanding owing to a joint venture partner, which, as at December 31, 2012, totaled $13.3 million (2011 – $13.3 million), including accrued interest. Interest payments on the loan are based on a fixed interest rate of 4.84%. This loan is repayable on demand no earlier than February 27, 2027.

The weighted-average effective interest rate on the Company’s aggregate long-term debt as at December 31, 2012 was 2.9% (December 31, 2011 – 2.6%). This rate does not include the effect of the Company’s interest rate swap agreements (see Note 15).

The aggregate annual long-term debt principal repayments required to be made by the Company subsequent to December 31, 2012, are $797.4 million (2013), $1,208.2 million (2014), $442.6 million (2015), $390.2 million (2016), $1,004.2 million (2017) and $1.7 billion (thereafter).

Among other matters, the Company’s long-term debt agreements generally provide for maintenance of minimum consolidated financial covenants and five loan agreements require the maintenance of vessel market value to loan ratios. As at December 31, 2012 these ratios ranged from 113.2 % to 284.0% compared to their minimum required ratios of 105% and 115%. The vessel values used in these ratios are appraised values prepared by the Company based on second hand sale and purchase market data. A further delay in the recovery of the conventional tanker market and a weakening of the LNG/LPG carrier market could negatively affect the ratios. Certain loan agreements require that a minimum level of free cash be maintained and as at December 31, 2012 and December 31, 2011, this amount was $100.0 million. Most of the loan agreements also require that the Company maintain an aggregate minimum level of free liquidity and undrawn revolving credit lines with at least six months to maturity, in amounts ranging from 5% to 7.5% of total debt. As at December 31, 2012, this aggregate amount was $319.1 million (December 31, 2011—$318.3 million).

As at December 31, 2012, the Company was in compliance with all covenants required by its credit facilities and other long-term debt.

9. Operating and Direct Financing Leases

Charters-in

As at December 31, 2012, minimum commitments to be incurred by the Company under vessel operating leases by which the Company charters-in vessels were approximately $153.8 million, comprised of $84.4 million (2013), $35.0 million (2014), $15.8 million (2015), $9.1 million (2016), $9.1 million (2017) and $0.4 million (thereafter). The Company recognizes the expense from these charters, which is included in time-charter hire expense, on a straight-line basis over the firm period of the charters.

Charters-out

Time-charters and bareboat charters of the Company’s vessels to third parties (except as noted below) are accounted for as operating leases. Certain of these charters provide the charterer with the option to acquire the vessel or the option to extend the charter. As at December 31, 2012, minimum scheduled future revenues to be received by the Company on time-charters and bareboat charters then in place were approximately $9.8 billion, comprised of $1.1 billion (2013), $1.2 billion (2014), $1.2 billion (2015), $1.0 billion (2016), $1.0 billion (2017) and $4.3 billion (thereafter). The minimum scheduled future revenues should not be construed to reflect total charter hire revenues for any of the years. Minimum scheduled future revenues do not include revenue generated from new contracts entered into after December 31, 2012, revenue from unexercised option periods of contracts that existed on December 31, 2012 or variable or contingent revenues. In addition, minimum scheduled future revenues presented in this paragraph have been reduced by estimated off-hire time for scheduled periodic maintenance. The amounts may vary given future events such as unscheduled vessel maintenance.

The carrying amount of the vessels accounted for as operating leases at December 31, 2012, was $6.1 billion (2011—$5.3 billion). The cost and accumulated depreciation of the vessels employed on operating leases as at December 31, 2012 were $7.8 billion (2011—$7.2 billion) and $1.7 billion (2011—$1.9 billion), respectively.

F-22

TEEKAY CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in thousands of U.S. dollars, other than share data)

Operating Lease Obligations

Teekay Tangguh Subsidiary

The Company’s subsidiary Teekay LNG owns a 99% interest in Teekay Tangguh, which owns a 70% interest in Teekay Tangguh Subsidiary, essentially giving Teekay LNG a 69% interest in the Teekay Tangguh Subsidiary. As at December 31, 2012, the Teekay Tangguh Subsidiary was a party to operating leases whereby it is leasing its two LNG carriers (or the Tangguh LNG Carriers) to a third party company (or Head Leases). The Teekay Tangguh Subsidiary is then leasing back the LNG carriers from the same third party company (or Subleases). Under the terms of these leases, the third party company claims tax depreciation on the capital expenditures it incurred to lease the vessels. As is typical in these leasing arrangements, tax and change of law risks are assumed by the Teekay Tangguh Subsidiary. Lease payments under the Subleases are based on certain tax and financial assumptions at the commencement of the leases. If an assumption proves to be incorrect, the lease payments are increased or decreased under the Sublease to maintain the agreed after-tax margin. The Teekay Tangguh Subsidiary’s carrying amount of this tax indemnification as at December 31, 2012 and December 31, 2011 was $9.4 million and $9.9 million, respectively, and is included as part of other long-term liabilities in the consolidated balance sheets of the Company. The tax indemnification is for the duration of the lease contract with the third party plus the years it would take for the lease payments to be statute barred, and ends in 2033. Although there is no maximum potential amount of future payments, the Teekay Tangguh Subsidiary may terminate the lease arrangements on a voluntary basis at any time. If the lease arrangements terminate, the Teekay Tangguh Subsidiary will be required to pay termination sums to the third party company sufficient to repay the third party company’s investment in the vessels and to compensate it for the tax effect of the terminations, including recapture of any tax depreciation. The Head Leases and the Subleases have 20 year terms and are classified as operating leases. The Head Lease and the Sublease for the two Tangguh LNG Carriers commenced in November 2008 and March 2009, respectively.

As at December 31, 2012, the total estimated future minimum rental payments to be received and paid under the lease contracts are as follows:

Year	Head Lease Receipts (1)		Sublease Payments(1)(2)
2013		28,843		24,779
2014		28,828		24,779
2015		22,188		24,779
2016		21,242		24,779
2017		21,242		24,779
Thereafter		239,063		278,884
Total	$	361,406	$	402,779

(1) The Head Leases are fixed-rate operating leases while the Subleases have a small variable-rate component. As at December 31, 2012, the Teekay Tangguh Subsidiary had received $149.0 million of aggregate Head Lease receipts and had paid $90.6 million of aggregate Sublease payments. The portion of the Head Lease receipts that haven’t been recognized into earnings are deferred and amortized on a straight line basis over the lease terms and as at December 31, 2012, $39.1 million of Head Lease receipts had been deferred and included in other long-term liabilities in the Company’s consolidated balance sheets.

(2) The amount of payments under the Subleases are updated annually to reflect any changes in the lease payments due to changes in tax law.

Net Investment in Direct Financing Leases

The time-charters for two of the Company’s LNG carriers, one FSO unit and equipment that reduce volatile organic compound emissions (or VOC equipment) are accounted for as direct financing leases. The following table lists the components of the net investments in direct financing leases:

	December  31, 2012 $			December  31, 2011 $
Total minimum lease payments to be received		675,013			741,604
Estimated unguaranteed residual value of leased properties		203,465			203,465
Initial direct costs and other		1,409			1,636
Less unearned revenue		(443,286	)		(486,797	)
Total		436,601			459,908
Less current portion		12,303			23,171
Long-term portion		424,298			436,737

As at December 31, 2012, minimum lease payments to be received by the Company in each of the next five years following 2012 were $50.1 million (2013), $48.7 million (2014), $47.8 million (2015), $47.9 million (2016), and $43.0 million (2017). The VOC equipment lease is scheduled to expire in 2014, the FSO contract is scheduled to expire in 2017, and the LNG time-charters are both scheduled to expire in 2029.

F-23

TEEKAY CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in thousands of U.S. dollars, other than share data)

10. Capital Lease Obligations and Restricted Cash

Capital Lease Obligations

	December  31, 2012 $		December  31, 2011 $
RasGas II LNG Carriers		472,085		471,397
Suezmax Tankers		165,489		175,650
Total		637,574		647,047
Less current portion		70,272		47,203
Long-term portion		567,302		599,844

RasGas II LNG Carriers. As at December 31, 2012, the Company was a party, as lessee, to 30-year capital lease arrangements relating to three LNG carriers (or the RasGas II LNG Carriers) that operate under time-charter contracts with Ras Laffan Liquefied Natural Gas Company Limited (II) (or RasGas II), a joint venture between Qatar Petroleum and ExxonMobil RasGas Inc., a subsidiary of Exxon Mobil Corporation. The Company has a 70% share in the leases for the RasGas II LNG Carriers.

Under the terms of the RasGas II LNG Carriers capital lease arrangements, the lessor claims tax depreciation on the capital expenditures it incurred to acquire these vessels. As is typical in these leasing arrangements, tax and change of law risks are assumed by the lessee. Lease payments under the lease arrangements are based on certain tax and financial assumptions at the commencement of the leases. If an assumption proves to be incorrect, the lessor is entitled to increase the lease payments to maintain its agreed after-tax margin. The Company’s carrying amount of the tax indemnification guarantee as at December 31, 2012 was $15.5 million and is included as part of other long-term liabilities in the Company’s consolidated balance sheets.

The tax indemnification is for the duration of the lease contract with the third party plus the years it would take for the lease payments to be statute barred, and ends in 2041. Although there is no maximum potential amount of future payments, the Company may terminate the lease arrangements on a voluntary basis at any time. If the lease arrangements terminate, the Company will be required to pay termination sums to the lessor sufficient to repay the lessor’s investment in the vessels and to compensate it for the tax-effect of the terminations, including recapture of any tax depreciation.

At their inception, the weighted-average interest rate implicit in these leases was 5.2%. These capital leases are variable-rate capital leases. As at December 31, 2012, the commitments under these capital leases approximated $977.1 million, including imputed interest of $505.0 million, repayable as follows:

Year	Commitment
2013	$	24,000
2014	$	24,000
2015	$	24,000
2016	$	24,000
2017	$	24,000
Thereafter	$	857,128

As the payments in the next five years only cover a portion of the estimated interest expense, the lease obligation will continue to increase. Starting in 2024, the lease payments will increase to cover both interest and principal to commence reduction of the principal portion of the lease obligations.

Suezmax Tankers. As at December 31, 2012, the Company was a party to capital leases on five Suezmax tankers. Under the terms of the lease arrangements the Company is required to purchase these vessels for a fixed price, at the option of the lessor. During 2012, the lessor extended the term of one of the five leases and has deferred its option to sell all five vessels to the Company until 2014. However, the Company expects the charterer to exercise its option to terminate their charter contracts on two of the Suezmax tankers in 2013. If this occurs, the capital leases for these two vessels will concurrently terminate and it is expected that the vessels will be sold to a third party. At the inception of these leases, the weighted-average interest rate implicit in these leases was 7.4%. These capital leases are variable-rate capital leases. However, any change in the lease payments resulting from changes in interest rates is offset by a corresponding change in the charter hire payments received by the Company.

Restricted Cash

Under the terms of the capital leases for the RasGas II LNG Carriers, the Company is required to have on deposit with financial institutions an amount of cash that, together with interest earned on the deposits, will equal the remaining amounts owing under the leases. These cash deposits are restricted to being used for capital lease payments and have been fully funded primarily with term loans (see Note 8).

F-24

TEEKAY CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in thousands of U.S. dollars, other than share data)

As at December 31, 2012 and 2011, the amount of restricted cash on deposit for the three RasGas II LNG Carriers was $475.5 million and $476.1 million, respectively. As at December 31, 2012 and 2011, the weighted-average interest rates earned on the deposits were 0.4% and 0.3%, respectively. These rates do not reflect the effect of related interest rate swaps (see Note 15).

The Company also maintains restricted cash deposits relating to certain term loans and other obligations, which totaled $58.3 million and $21.1 million as at December 31, 2012 and 2011, respectively.

11. Fair Value Measurements

The following methods and assumptions were used to estimate the fair value of each class of financial instruments and other non-financial assets.

Cash and cash equivalents, restricted cash and marketable securities - The fair value of the Company’s cash and cash equivalents restricted cash, and marketable securities approximates their carrying amounts reported in the accompanying consolidated balance sheets.

Vessels and equipment and vessels held for sale – The estimated fair value of the Company’s vessels and equipment and vessels held for sale is determined based on discounted cash flows or appraised values. In cases where an active second hand sale and purchase market does not exist, the Company uses a discounted cash flow approach to estimate the fair value of an impaired vessel. In cases where an active second hand sale and purchase market exists, an appraised value is generally the amount the Company would expect to receive if it were to sell the vessel. Such appraisal is normally completed by the Company.

Investment in term loans –The fair value of the Company’s investment in term loans is estimated using a discounted cash flow analysis, based on current rates currently available for debt with similar terms and remaining maturities. In addition, an assessment of the credit worthiness of the borrower and the value of the collateral is taken into account when determining the fair value.

Loans to equity accounted investees and joint venture partners – The fair value of the Company’s loans to joint ventures and joint venture partners approximates their carrying amounts reported in the accompanying consolidated balance sheets.

Long-term debt – The fair value of the Company’s fixed-rate and variable-rate long-term debt is either based on quoted market prices or estimated using discounted cash flow analyses, based on rates currently available for debt with similar terms and remaining maturities and the current credit worthiness of the Company.

Derivative instruments – The fair value of the Company’s derivative instruments is the estimated amount that the Company would receive or pay to terminate the agreements at the reporting date, taking into account, as applicable, fixed interest rates on interest rate swaps, current interest rates, foreign exchange rates, and the current credit worthiness of both the Company and the derivative counterparties. The estimated amount is the present value of future cash flows. The Company transacts all of its derivative instruments through investment-grade rated financial institutions at the time of the transaction and requires no collateral from these institutions. For the Foinaven FPSO embedded derivative, the calculation of the fair value takes into account the fixed rate in the contract, current interest rates and foreign exchange rates. Given the current volatility in the credit markets, it is reasonably possible that the amounts recorded as derivative assets and liabilities could vary by material amounts in the near term.

The Company categorizes its fair value estimates using a fair value hierarchy based on the inputs used to measure fair value. The fair value hierarchy has three levels based on the reliability of the inputs used to determine fair value as follows:

Level 1. Observable inputs such as quoted prices in active markets;

Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

The following table includes the estimated fair value and carrying value of those assets and liabilities that are measured at fair value on a recurring and non-recurring basis, as well as the estimated fair value of the Company’s financial instruments that are not accounted for at a fair value on a recurring basis.

			December 31, 2012						December 31, 2011
	Fair Value Hierarchy Level		Carrying Amount Asset (Liability) $			Fair Value Asset (Liability) $			Carrying Amount Asset (Liability) $			Fair Value Asset (Liability) $
Recurring
Cash and cash equivalents, restricted cash, and marketable securities		Level 1		1,178,118			1,178,118			1,200,063			1,200,063
Derivative instruments(note 15)
Interest rate swap agreements—assets(1)		Level 2		165,688			165,688			159,603			159,603
Interest rate swap agreements—liabilities(1)		Level 2		(667,825	)		(667,825	)		(707,437	)		(707,437	)

F-25

TEEKAY CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in thousands of U.S. dollars, other than share data)

Cross currency interest swap agreement	Level 2		13,886		13,886		2,677		2,677
Foreign currency contracts	Level 2		2,885		2,885		(4,362	)	(4,362	)
Foinaven embedded derivative	Level 2		—		—		3,385		3,385
Non-recurring
Vessels and equipment(note 18b)	Level 2		287,983		287,983		118,682		118,682
Equity accounted investments(2)	Level 3		—		—		9,623		9,623
Vessels held for sale(note 18b)	Level 2		22,364		22,364		19,000		19,000
Other
Investment in term loans	Level 3		188,756		186,048		189,666		190,939
Loans to equity accounted investees and joint venture partners—Current	Level 3		139,183		139,183		—		—
Loans to equity accounted investees and joint venture partners—Long-term	(3	)	67,720		(3	)	85,248		(3	)
Long-term debt—public(note 8)	Level 1		(914,338	)	(949,326	)	(547,242	)	(533,999	)
Long-term debt—non-public(note 8)	Level 2		(4,645,376	)	(4,329,117	)	(4,897,131	)	(4,538,215	)

(1) The fair value of the Company’s interest rate swap agreements at December 31, 2012 includes $21.6 million (December 31, 2011- $24.5 million) of net accrued interest which is recorded in accrued liabilities and accounts receivable on the consolidated balance sheets.

(2) The fair value measurement used to determine the impairment of the investment in Petrotrans Holdings Ltd. (or PTH) was based upon the estimated liquidation values of the underlying net assets of the investment.

(3) In these consolidated financial statements, the Company’s loans to and equity investments in equity accounted investees form the aggregate carrying value of the Company’s interests in entities accounted for by the equity method. In addition, the loans to joint venture partners together with the joint venture partner’s equity investment in joint venture form the net aggregate carrying value of the joint venture partner’s interest in the joint venture. The fair value of the individual components of such aggregate interests is not determinable.

12. Capital Stock

The authorized capital stock of Teekay at December 31, 2012 and 2011, was 25,000,000 shares of Preferred Stock, with a par value of $1 per share, and 725,000,000 shares of Common Stock, with a par value of $0.001 per share. During 2012, the Company issued 1.0 million common shares upon the exercise of stock options and restricted stock units and awards, and had no share repurchases of common shares. During 2011, the Company issued 0.6 million common shares upon the exercise of stock options and restricted stock units and awards, and had share repurchases of 3.9 million common shares. As at December 31, 2012, Teekay had issued 70,203,388 shares of Common Stock (2011 – 74,391,691) and no shares of Preferred Stock issued. As at December 31, 2012, Teekay had 69,704,188 shares of Common Stock outstanding (2011 – 68,732,341).

Dividends may be declared and paid out of surplus only, but if there is no surplus, dividends may be declared or paid out of the net profits for the fiscal year in which the dividend is declared and for the preceding fiscal year. Surplus is the excess of the net assets of the Company over the aggregated par value of the issued shares of the Teekay. Subject to preferences that may apply to any shares of preferred stock outstanding at the time, the holders of common stock are entitled to share equally in any dividends that the board of directors may declare from time to time out of funds legally available for dividends.

During 2008, Teekay announced that its Board of Directors had authorized the repurchase of up to $200 million of shares of its Common Stock in the open market, subject to cancellation upon approval by the Board of Directors. As at December 31, 2012, Teekay had repurchased approximately 5.2 million shares of Common Stock for $162.3 million pursuant to such authorizations. The total remaining share repurchase authorization at December 31, 2012, was $37.7 million.

On July 2, 2010, the Company amended and restated its Stockholder Rights Agreement (the Rights Agreement), which was originally adopted by the Board of Directors in September 2000. In September 2000, the Board of Directors declared a dividend of one common share purchase right (a Right) for each outstanding share of the Company’s common stock. These Rights continue to remain outstanding and will not be exercisable and will trade with the shares of the Company’s common stock until after such time, if any, as a person or group becomes an “acquiring person” as set forth in the amended Rights Agreement. A person or group will be deemed to be an “acquiring person,” and the Rights generally will become exercisable, if a person or group acquires 20% or more of the Company’s common stock, or if a person or group commences a tender offer that could result in that person or group owning more than 20% of the Company’s common stock, subject to certain higher thresholds for existing stockholders that currently own in excess of 15% of the Company’s common stock. Once exercisable, each Right held by a person other than the “acquiring person” would entitle the holder to purchase, at the then-current exercise price, a number of shares of common stock of the Company having a value of twice the exercise price of the Right. In addition, if the Company is acquired in a merger or other business combination transaction after any such event, each holder of a Right would then be entitled to purchase, at the then-current exercise price, shares of the acquiring company’s common stock having a value of twice the exercise price of the Right. The amended Rights Agreement will expire on July 1, 2020, unless the expiry date is extended or the Rights are earlier redeemed or exchanged by the Company.

F-26

TEEKAY CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in thousands of U.S. dollars, other than share data)

Stock-based compensation

As at December 31, 2012, the Company had reserved pursuant to its 1995 Stock Option Plan and 2003 Equity Incentive Plan (collectively referred to as the Plans) 8,924,470 shares of Common Stock (2011 – 9,895,787) for issuance upon exercise of options or equity awards granted or to be granted. During the years ended December 31, 2012, 2011, and 2010, the Company granted options under the Plans to acquire up to 432,971, 95,604, and 733,167 shares of Common Stock, respectively, to certain eligible officers, employees and directors of the Company. The options under the Plans have ten-year terms and vest equally over three years from the grant date. All options outstanding as of December 31, 2012, expire between March 6, 2013 and March 6, 2022, ten years after the date of each respective grant. In March 2013, the Company adopted a 2013 Equity Incentive Plan and suspended the 2003 Equity Incentive Plan.

A summary of the Company’s stock option activity and related information for the years ended December 31, 2012, 2011, and 2010, are as follows:

	December 31, 2012					December 31, 2011					December 31, 2010
	Options			Weighted- Average		Options			Weighted- Average		Options			Weighted- Average
	(000’s)			Exercise Price		(000’s)			Exercise Price		(000’s)			Exercise Price
	#			$		#			$		#			$
Outstanding—beginning of year		5,713			32.47		6,123			31.54		5,983			31.46
Granted		433			27.69		96			34.93		733			24.42
Exercised		(733	)		15.85		(363	)		16.14		(380	)		15.12
Forfeited / expired		(128	)		31.81		(143	)		33.11		(213	)		29.00
Outstanding—end of year		5,285			34.40		5,713			32.47		6,123			31.54
Exercisable—end of year		4,561			35.54		4,656			35.40		3,963			36.80

A summary of the Company’s non-vested stock option activity and related information for the years ended December 31, 2012, 2011 and 2010, are as follows:

	December 31, 2012					December 31, 2011					December 31, 2010
	Options			Weighted- Average		Options			Weighted- Average					Weighted- Average
	(000’s)			Grant Date Fair Value		(000’s)			Grant Date Fair Value		(000’s)			Grant Date Fair Value
	#			$		#			$		#			$
Outstanding non-vested stock options—beginning of year		1,057			6.40		2,160			6.36		2,684			6.56
Granted		433			8.72		96			11.27		733			8.16
Vested		(747	)		5.44		(1,071	)		6.18		(1,084	)		7.48
Forfeited		(20	)		8.24		(128	)		11.47		(173	)		10.06
Outstanding non-vested stock options—end of year		723			8.74		1,057			6.40		2,160			6.36

The weighted average grant date fair value for options forfeited in 2012 was $0.8 million (2011—$1.2 million).

As of December 31, 2012, there was $2.3 million of total unrecognized compensation cost related to non-vested stock options granted under the Plans. Recognition of this compensation is expected to be $1.3 million (2013), and $1.0 million (2014). During the years ended December 31, 2012, 2011, and 2010, the Company recognized $2.9 million, $5.3 million and $8.1 million, respectively, of compensation cost relating to stock options granted under the Plans. The intrinsic value of options exercised during 2012 was $11.9 million (2011—$3.8 million; 2010—$6.8 million).

As at December 31, 2012, the intrinsic value of the outstanding in–the-money stock options was $22.0 million (2011—$20.9 million) and exercisable stock options was $18.3 million (2011—$12.6 million). As at December 31, 2012, the weighted-average remaining life of options vested and expected to vest was 5.0 years (2011 – 5.4 years).

F-27

TEEKAY CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in thousands of U.S. dollars, other than share data)

Further details regarding the Company’s outstanding and exercisable stock options at December 31, 2012 are as follows:

	Outstanding Options						Exercisable Options
	Options (000’s)		Weighted- Average Remaining Life		Weighted- Average Exercise Price		Options (000’s)		Weighted- Average Remaining Life		Weighted- Average Exercise Price
Range of Exercise Prices	#		(Years)		$		#		(Years)		$
$10.00 – $14.99		689		6.2		11.84		689		6.2		11.84
$15.00 – $19.99		107		0.2		19.59		107		0.2		19.59
$20.00 – $24.99		626		7.1		24.39		392		7.1		24.37
$25.00 – $29.99		433		9.2		27.69		—		—		—
$30.00 – $34.99		429		2.6		33.84		373		1.8		33.67
$35.00 – $39.99		741		3.3		38.98		741		3.3		38.98
$40.00 – $44.99		1,246		5.2		40.41		1,246		5.2		40.41
$45.00 – $49.99		345		2.2		46.80		345		2.2		46.80
$50.00 – $59.99		666		4.2		51.40		666		4.2		51.40
$60.00 – $64.99		3		4.3		60.96		3		4.3		60.96
		5,285		5.0		34.40		4,562		4.4		35.54

The weighted-average grant-date fair value of options granted during 2012 was $8.72 per option (2011—$11.27, 2010—$8.16). The fair value of each option granted was estimated on the date of the grant using the Black-Scholes option pricing model. The following weighted-average assumptions were used in computing the fair value of the options granted: expected volatility of 54.8% in 2012, 53.6% in 2011 and 52.7% in 2010; expected life of four years; dividend yield of 4.4% in 2012, 3.8% in 2011 and 3.3% in 2010; risk-free interest rate of 2.1% in 2012, 2.1% in 2011, and 2.6% in 2010; and estimated forfeiture rate of 12% in 2012, 11.2% in 2011 and 9.8% in 2010. The expected life of the options granted was estimated using the historical exercise behavior of employees. The expected volatility was generally based on historical volatility as calculated using historical data during the five years prior to the grant date.

The Company grants restricted stock units and performance share units to certain eligible officers, employees and directors of the Company. Each restricted stock unit and performance share unit is equivalent in value to one share of the Company’s common stock plus reinvested dividends from the grant date to the vesting date. The restricted stock units vest equally over two or three years from the grant date and the performance share units vest three years from the grant date. Upon vesting, the value of the restricted stock units and performance share units are paid to each grantee in the form of shares. The number of performance share units that vest will range from zero to three times the original number granted, based on certain performance and market conditions.

In February 2010, the Company modified settlement terms for its then outstanding restricted stock units, such that all restricted stock units will be paid in the form of shares. This modification decreased accrued liabilities by $4.0 million, decreased other long-term liabilities by $2.0 million, and increased additional paid-in capital by $6.0 million.

During 2012, the Company granted 268,595 restricted stock units with a fair value of $7.4 million and 67,870 performance share units with a fair value of $2.5 million, based on the quoted market price and a Monte Carlo valuation model, to certain of the Company’s employees and directors. During 2012, 334,256 restricted stock units with a market value of $9.0 million vested and that amount was paid to grantees by issuing 200,024 shares of common stock, net of withholding taxes. During 2011, the Company granted 358,180 restricted stock units with a fair value of $12.5 million and 73,349 performance share units with a fair value of $3.7 million, based on the quoted market price and a Monte Carlo valuation model, to certain of the Company’s employees and directors. During 2011, 214,863 restricted stock units with a market value of $4.9 million vested and that amount was paid to grantees by issuing 131,682 shares of common stock, net of withholding taxes. During 2010, the Company granted 263,620 restricted stock units with a fair value of $6.4 million and 87,054 performance share units with a fair value of $3.5 million, based on the quoted market price and a Monte Carlo valuation model, to certain of the Company’s employees and directors. During 2010, 227,165 restricted stock units with a market value of $4.9 million vested and that amount was paid to grantees by issuing 148,518 shares of common stock, net of withholding taxes. For the year ended December 31, 2012, the Company recorded an expense of $7.7 million (2011—$12.5 million, 2010—$4.8 million) related to the restricted stock units.

During 2012, the Company also granted 23,563 (2011 – 29,663 and 2010 – 27,028) shares of restricted stock awards with a fair value of $0.7 million, based on the quoted market price, to certain of the Company’s directors. The shares of restricted stock are issued when granted.

In March 2011, the Company incurred a one-time $11.0 million increase to the pension plan benefits of Bjorn Moller, who retired from his position as the Company’s President and Chief Executive Officer on April 1, 2011. The additional pension benefit was in recognition of Mr. Moller’s service to the Company. In addition, the Company recognized a compensation expense of approximately $4.7 million which related to the portion of Mr. Moller’s previously unvested outstanding stock-based compensation grants that vested on the date of his retirement. The total compensation expense related to Mr. Moller’s retirement of $15.7 million was recorded in general and administrative expense in the consolidated statements of loss for the year ended December 31, 2011.

F-28

TEEKAY CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in thousands of U.S. dollars, other than share data)

13. Related Party Transactions

As at December 31, 2012, Resolute Investments, Ltd. (or Resolute) owned 44.9% (2011 – 45.5%, 2010 – 42.3%) of the Company’s outstanding Common Stock. One of the Company’s directors, Thomas Kuo-Yuen Hsu, is the President and a director of Resolute. Another of the Company’s directors, Axel Karlshoej, is among the directors of Path Spirit Limited, which is the trust protector for the trust that indirectly owns all of Resolute’s outstanding equity. The Company’s Chairman, C. Sean Day, is engaged as a consultant to Kattegat Limited, the parent company of Resolute, to oversee its investments, including that in the Teekay group of companies.

14. Other Income

	Year Ended			Year Ended		Year Ended
	December 31,			December 31,		December 31,
	2012			2011		2010
	$			$		$
Gain on sale of other assets		2,217			—		—
Volatile organic compound emission plant lease income		1,220			2,900		4,714
(Loss) gain on sale of marketable securities		(2,560	)		3,372		1,805
Miscellaneous (loss) income		(511	)		6,088		1,008
Loss on notes repurchase		—			—		(12,645	)
Other income (loss)		366			12,360		(5,118	)

15. Derivative Instruments and Hedging Activities

The Company uses derivatives to manage certain risks in accordance with its overall risk management policies.

Foreign Exchange Risk

The Company economically hedges portions of its forecasted expenditures denominated in foreign currencies with foreign currency forward contracts. Certain foreign currency forward contracts are designated, for accounting purposes, as cash flow hedges of forecasted foreign currency expenditures.

As at December 31, 2012, the Company was committed to the following foreign currency forward contracts:

					Fair Value /Carrying Amount
	Contract Amount in Foreign Currency (millions)		Average Forward  Rate (1)		of Asset (Liability)					Expected Maturity
					Hedge		Non-hedge			2013
					$		$			$
					(in millions of U.S. Dollars)					(in millions of U.S. Dollars)
Norwegian Kroner		201.0		5.93		—		2.1			33.9
Euro		9.8		0.76		—		(0.1	)		13.0
Canadian Dollar		9.3		1.01		0.2		—			9.2
British Pound		11.3		0.64		0.3		0.4			17.6
						0.5		2.4			73.7

(1) Average contractual exchange rate represents the contracted amount of foreign currency one U.S. Dollar will buy.

The Company enters into cross currency swaps, and pursuant to these swaps the Company receives the principal amount in Norwegian Kroner (or NOK) on the maturity date of the swap, in exchange for payment of a fixed U.S. Dollar amount. In addition, the cross currency swaps exchange a receipt of floating interest in Norwegian Kroner based on NIBOR plus a margin for a payment of US Dollar fixed interest or US Dollar floating interest based on LIBOR plus a margin. The purpose of the cross currency swaps is to economically hedge the foreign currency exposure on the payment of interest and principal at maturity of the Company’s Norwegian Kroner bonds due in 2013, 2015 and 2017. In addition, the cross currency swaps due in 2015 and 2017 economically hedges the interest rate exposure on the Norwegian Kroner bonds due in 2015 and 2017. The Company has not designated, for accounting purposes, these cross currency swaps as cash flow hedges of its Norwegian Kroner bonds due in 2013, 2015 and 2017. As at December 31, 2012, the Company was committed to the following cross currency swaps:

F-29

TEEKAY CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in thousands of U.S. dollars, other than share data)

	Notional Amount		Notional Amount		Floating Rate Receivable					Floating Rate Payable								Fair Value / Carrying Amount of Asset /
Maturity					Reference					Reference					Fixed Rate
Date	NOK		USD		Rate		Margin			Rate		Margin			Payable			Liability
2013		600,000		98,500		NIBOR		4.75	%		LIBOR		5.04	%			(1)		9,890
2015		700,000		122,800		NIBOR		4.75	%							5.52	%		3,075
2017		600,000		101,400		NIBOR		5.75	%							7.49	%		3,545
2017		700,000		125,000		NIBOR		5.25	%							6.88	%		(2,624	)
																			13,886

(1) LIBOR subsequently fixed at 1.1%, subject to a LIBOR rate receivable cap of 3.5% (see next section).

Interest Rate Risk

The Company enters into interest rate swap agreements which exchange a receipt of floating interest for a payment of fixed interest to reduce the Company’s exposure to interest rate variability on its outstanding floating-rate debt. In addition, the Company holds interest rate swaps which exchange a payment of floating rate interest for a receipt of fixed interest in order to reduce the Company’s exposure to the variability of interest income on its restricted cash deposits. The Company has not designated its interest rate swap agreements as cash flow hedges for accounting purposes.

As at December 31, 2012, the Company was committed to the following interest rate swap agreements related to its LIBOR-based debt, restricted cash deposits and EURIBOR-based debt, whereby certain of the Company’s floating-rate debt and restricted cash deposits were swapped with fixed-rate obligations or fixed-rate deposits:

	Interest Rate Index		Principal Amount $		Fair Value / Carrying Amount of Asset / (Liability) $			Weighted- Average Remaining Term (years)		Fixed Interest Rate (%) (1)
LIBOR-Based Debt:
U.S. Dollar-denominated interest rate swaps (2)		LIBOR		412,880		(110,590	)		24.1		4.9
U.S. Dollar-denominated interest rate swaps (3)		LIBOR		3,170,273		(515,124	)		7.9		4.1
U.S. Dollar-denominated interest rate swaps (4)		LIBOR		98,500		(782	)		0.9		1.1
LIBOR-Based Restricted Cash Deposit:
U.S. Dollar-denominated interest rate swaps (2)		LIBOR		469,260		165,688			24.1		4.8
EURIBOR-Based Debt:
Euro-denominated interest rate swaps (5) (6)		EURIBOR		341,382		(41,329	)		11.5		3.1
				4,492,295		(502,137	)

(1) Excludes the margins the Company pays on its variable-rate debt, which, as of December 31, 2012, ranged from 0.3% to 4.25%.

(2) Principal amount reduces quarterly.

(3) Principal amount of $200 million is fixed at 2.14%, unless LIBOR exceeds 6%, in which case the Company pays a floating rate of interest.

(4) The floating LIBOR rate receivable is capped at 3.5%, which effectively results in a fixed rate of 1.12% unless LIBOR exceeds 3.5%, in which case the Company’s related interest rate effectively floats at LIBOR reduced by 2.38%.

(5) Principal amount reduces monthly to 70.1 million Euros ($92.5 million) by the maturity dates of the swap agreements.

(6) Principal amount is the U.S. Dollar equivalent of 258.8 million Euros.

Tabular Disclosure

The following table presents the location and fair value amounts of derivative instruments, segregated by type of contract, on the Company’s consolidated balance sheets.

F-30

TEEKAY CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in thousands of U.S. dollars, other than share data)

	Current							Current
	Portion of							Portion of
	Derivative		Derivative		Accrued			Derivative			Derivative
	Assets		Assets		Liabilities			Liabilities			Liabilities
As at December 31, 2012
Derivatives designated as a cash flow hedge:
Foreign currency contracts		441		—		—			(1	)		—
Derivatives not designated as a cash flow hedge:
Foreign currency contracts		2,506		—		—			(60	)		—
Interest rate swap agreements		16,927		144,247		(22,312	)		(115,774	)		(525,225	)
Cross currency swap agreements		11,795		4,334		719			—			(2,962	)
		31,669		148,581		(21,593	)		(115,835	)		(528,187	)
As at December 31, 2011
Derivatives designated as a cash flow hedge:
Foreign currency contracts		1,551		28		—			(1,192	)		(264	)
Derivatives not designated as a cash flow hedge:
Foreign currency contracts		2,592		3		—			(6,248	)		(832	)
Interest rate swap agreements		15,608		139,651		(24,750	)		(109,897	)		(568,446	)
Cross currency swap agreements		1,576		875		225			—			—
Foinaven embedded derivative		3,385		—		—			—			—
		24,712		140,557		(24,525	)		(117,337	)		(569,542	)

For the periods indicated, the following table presents the effective portion of gains (losses) on foreign currency contracts designated and qualifying as cash flow hedges that was recognized in (1) accumulated other comprehensive income (loss) (or AOCI), (2) recorded in accumulated other comprehensive income (loss) during the term of the hedging relationship and reclassified to earnings, and (3) the ineffective portion of gains (losses) on derivative instruments designated and qualifying as cash flow hedges.

Year Ended December 31, 2012							Year Ended December 31, 2011
Balance Sheet (AOCI)	Statement of Loss						Balance Sheet (AOCI)		Statement of Loss
Effective Portion	Effective		Ineffective Portion				Effective Portion		Effective Portion		Ineffective Portion
2,412		—		—		Vessel operating expenses		2,007		918		(568	)	Vessel operating expenses
		1,436		(660	)	General and administrative expenses				4,636		(223	)	General and administrative expenses
2,412		1,436		(660	)			2,007		5,554		(791	)

Year Ended December 31, 2010
Balance Sheet (AOCI)		Statement of Loss
Effective Portion		Effective Portion			Ineffective Portion
	(3,559)		(680	)		(3,473	)	Vessel operating expenses
			(2,360	)		(1,402	)	General and administrative expenses
	(3,559)		(3,040	)		(4,875	)

Realized and unrealized (losses) gains from derivative instruments that are not designated for accounting purposes as cash flow hedges, are recognized in earnings and reported in realized and unrealized (losses) gains on non-designated derivatives in the consolidated statements of loss. The effect of the (loss) gain on derivatives not designated as hedging instruments in the statements of loss are as follows:

F-31

TEEKAY CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in thousands of U.S. dollars, other than share data)

	Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,
	2012			2011			2010
	$			$			$
Realized (losses) gains relating to:
Interest rate swap agreements		(123,277	)		(132,931	)		(154,098	)
Interest rate swap agreement amendments		—			(149,666	)		—
Foreign currency forward contracts		1,155			9,965			(2,274	)
Forward freight agreements and bunker fuel swap contracts		—			36			(7,914	)
Foinaven embedded derivative		11,452			—			—
		(110,670	)		(272,596	)		(164,286	)
Unrealized gains (losses) relating to:
Interest rate swap agreements		26,770			(58,405	)		(146,780	)
Foreign currency forward contracts		6,933			(11,399	)		6,307
Forward freight agreements and bunker fuel swap contracts		—			—			(108	)
Foinaven embedded derivative		(3,385	)		(322	)		5,269
		30,318			(70,126	)		(135,312	)
Total realized and unrealized losses on derivative instruments		(80,352	)		(342,722	)		(299,598	)

Realized and unrealized gains (losses) of the cross currency swaps are recognized in earnings and reported in foreign currency exchange gain (loss) in the consolidated statements of loss. The effect of the gain (loss) on cross currency swaps on the consolidated statements of loss is as follows:

	Year Ended December 31,
	2012		2011			2010
	$		$			$
Realized gains		3,628		2,881			198
Unrealized gains (losses)		10,715		(1,583	)		4,034
Total realized and unrealized gains on cross currency swaps		14,343		1,298			4,232

As at December 31, 2012, the Company’s accumulated other comprehensive loss included $0.3 million of unrealized gains on foreign currency forward contracts designated as cash flow hedges. As at December 31, 2012, the Company estimated, based on then current foreign exchange rates, that it would reclassify approximately $0.3 million of net gains on foreign currency forward contracts from accumulated other comprehensive loss to earnings during the next 12 months. During 2010, the Company de-designated certain foreign currency forward contracts that were designated as cash flow hedges and reclassified $0.6 million of net losses from accumulated other comprehensive loss to earnings in the consolidated statement of loss. There were no de-designations in 2012 or 2011.

The Company is exposed to credit loss to the extent the fair value represents an asset (see above) in the event of non-performance by the counterparties to the foreign currency forward contracts, and cross currency and interest rate swap agreements; however, the Company does not anticipate non-performance by any of the counterparties. In order to minimize counterparty risk, the Company only enters into derivative transactions with counterparties that are rated A- or better by Standard & Poor’s or A3 or better by Moody’s at the time of the transaction. In addition, to the extent possible and practical, interest rate swaps are entered into with different counterparties to reduce concentration risk.

16. Commitments and Contingencies

a) Vessels under Construction

As at December 31, 2012, the Company was committed to the construction of four shuttle tankers, two LNG carriers and one FPSO unit, not including the Voyageur Spirit, for a total cost of approximately $1.8 billion, excluding capitalized interest and other miscellaneous construction costs. The four shuttle tankers are scheduled for delivery in mid-to-late 2013, the two LNG carriers are scheduled for delivery in 2016, and the FPSO unit is scheduled to be delivered in the first half of 2014. As at December 31, 2012, payments made towards these commitments totaled $686.0 million (excluding $26.0 million of capitalized interest and other miscellaneous construction costs). As at December 31, 2012, the remaining payments required to be made under these newbuilding contracts were $379.7 million (2013), $361.8 million (2014), $57.9 million (2015), and $270.2 million (2016).

b) Joint Ventures

In September 2010, Teekay Tankers entered into a joint venture arrangement (the Joint Venture) with Wah Kwong Maritime Transport Holdings Limited (or Wah Kwong) to have a Very Large Crude Carrier (or VLCC) constructed, managed and chartered to third parties. Teekay Tankers has a 50% economic interest in the Joint Venture, which is jointly controlled by Teekay Tankers and Wah Kwong. The VLCC has an estimated purchase price of approximately $98 million (of which Teekay Tankers’ 50% portion is $49 million), excluding capitalized interest and other miscellaneous construction costs. The vessel is scheduled to be delivered in June, 2013. An unrelated party has agreed to time-charter the vessel following its delivery for a term of five years at a fixed daily rate and an additional amount if the daily rate of any sub-charter earned by the unrelated party exceeds a certain threshold.

F-32

TEEKAY CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in thousands of U.S. dollars, other than share data)

As at December 31, 2012, the remaining payments required to be made under this newbuilding contract, including Wah Kwong’s 50% share, were $53.9 million in 2013. As at December 31, 2012, the Joint Venture had signed an agreement with a financial institution for a loan of $68.6 million, of which $19.6 million has been drawn. The loan is secured by a first-priority statutory mortgage on the VLCC and guaranteed by both Teekay Tankers and Wah Kwong. As a result, Teekay Tankers‘s exposure to this loan is limited to the 50% guarantee to the loan. This loan is repayable in 32 quarterly installments of $1.4 million each commencing three months after the initial post-delivery drawdown date and a balloon payment of $22.6 million at the maturity of the loan. In addition, Teekay Tankers and Wah Kwong have each agreed to finance 50% of the costs to acquire the VLCC that are not financed with commercial bank financing. As at December 31, 2012, the Company had advanced $9.8 million to the joint venture in the form of a non-interest bearing and unsecured loan and invested an additional $3.2 million into the joint venture.

c) Purchase Obligation

As at December 31, 2012, the Company was committed to fund the remaining upgrade costs of the Voyageur Spirit in connection with the Sevan acquisition, for a total cost estimated to be between $140 million and $150 million. As at December 31, 2012, payments made towards these remaining upgrade costs totaled $129.6 million and the remaining payments required to be made are estimated to be between $10 million and $20 million in 2013. In addition to the upgrade costs, in November 2012 the Company prepaid $92.4 million of the Voyageur Spirit purchase price. Teekay entered into an agreement to sell the Voyageur Spirit to Teekay Offshore for $540 million. Conditions to the closing of this transaction include, among others, Teekay Offshore obtaining financing and that Teekay has acquired the Voyageur Spirit and related assets pursuant to the terms of the acquisition agreement with Sevan.

In September 2012, the Voyageur Spirit completed its upgrade at the Nymo shipyard in Norway and arrived at the Huntington Field in the U.K. sector of the North Sea in October 2012. First oil occurred in April 2013 after the remaining upgrades were completed, at which time the Voyageur Spirit commenced its 5-year charter with E.ON Ruhrgas UK E&P Limited (or E.ON) and the FPSO unit is expected to be acquired by Teekay Offshore in the second quarter of 2013.

In November 2012, Teekay Offshore agreed to acquire a 2010-built HiLoad Dynamic Positioning (DP) unit from Remora AS (or Remora), a Norway-based offshore marine technology company, for a total purchase price of approximately $55 million including modification costs. The HiLoad DP unit is a self-propelled dynamic positioning system that attaches to and keeps conventional tankers in position when loading from offshore installations. The transaction is subject to finalizing a ten-year time-charter contract with Petroleo Brasileiro SA (or Petrobras) in Brazil. The acquisition of the HiLoad DP unit is expected to be completed in the second quarter of 2013 and the unit is expected to commence operating at its full time-charter rate in early 2014 once modifications, delivery of the DP unit to Brazil, and operational testing have been completed. As part of the transaction, Teekay has also agreed to invest approximately $4.4 million to acquire a 49.9% ownership interest in a recapitalized Remora. In addition, Teekay Offshore will enter into an agreement with Remora which will provide Teekay Offshore with the right of first refusal to acquire future HiLoad projects developed by Remora.

d) Legal Proceedings and Claims

The Company may, from time to time, be involved in legal proceedings and claims that arise in the ordinary course of business. The Company believes that any adverse outcome of existing claims, individually or in the aggregate, would not have a material effect on its financial position, results of operations or cash flows, when taking into account its insurance coverage and indemnifications from charterers.

On November 13, 2006, Teekay Offshore’s shuttle tanker the Navion Hispania collided with the Njord Bravo, an FSO unit, while preparing to load an oil cargo from the Njord Bravo. The Njord Bravo services the Njord field, which is operated by Statoil Petroleum AS (or Statoil) and is located off the Norwegian coast. At the time of the incident, Statoil was chartering the Navion Hispania from the Company. The Navion Hispania and the Njord Bravo both incurred damages as a result of the collision. In November 2007, Navion Offshore Loading AS (or NOL), the Company’s subsidiary, and two other subsidiaries of the Company, were named as co-defendants in a legal action filed by Norwegian Hull Club (the hull and machinery insurers of the Njord Bravo) and various licensees in the Njord field. The Plaintiffs sought damages for vessel repairs, expenses for a replacement vessel and other amounts related to production stoppage on the field, totaling NOK 213,000,000 (approximately $38.3 million). The matter was heard before the Stavanger District Court in December 2011. The Stavanger District Court found that NOL is liable for damages except for damages related to certain indirect or consequential losses. The court also found that Statoil ASA is liable to NOL for the same amount of damages. The parties have appealed the decision. As a result of the judgment, as at December 31, 2011 and December 31, 2012, the Company recognized a liability of NOK 76,000,000 (approximately $13.9 million, which is a reduced amount in accordance with the court’s decision to exclude a large part of the indirect or consequential losses) to the Plaintiffs and a corresponding receivable from Statoil recorded in other liabilities and other assets, respectively. The Company believes the likelihood of any losses relating to the claim is remote. The Company believes that the charter contract relating to the Navion Hispania requires that Statoil be responsible and indemnify the Company for all losses relating to the damage to the Njord Bravo. The Company also maintains protection and indemnity insurance for damages to the Navion Hispania and insurance for collision-related costs and claims. The Company believes that these insurance policies will cover the costs related to this incident, including any costs not indemnified by Statoil, subject to standard deductibles. Teekay has agreed to indemnify Teekay Offshore for any losses it may incur in connection with this incident.

Teekay Nakilat Corporation (or Teekay Nakilat), a subsidiary of Teekay LNG, is the lessee under 30-year capital lease arrangements with a third party for the RasGas II LNG Carriers (or RasGas II Leases). The UK taxing authority (or HMRC) has been urging our lessor, as well as other lessors under capital lease arrangements that have tax benefits similar to the ones provided by the RasGas II Leases, to terminate such finance lease arrangements, and has in other circumstances challenged the use of similar structures. As a result, the lessor has requested that Teekay Nakilat enter into negotiations to terminate the RasGas II Leases. Teekay Nakilat has declined this request as it does not believe that HRMC would be able to successfully challenge the availability of the tax benefits of these leases to the lessor. This assessment is partially based on a January 2012 court decision regarding a similar financial lease of an LNG carrier that ruled in favor of the taxpayer. However, the HMRC is appealing that decision and the appeal is expected to be heard in May 2013. If the HMRC were able to successfully challenge the RasGas II Leases, Teekay Nakilat could be subject to significant costs associated with the termination of the lease or increased lease payments to compensate the lessor for the lost tax benefits. Teekay LNG estimates its 70% share of the potential exposure to be approximately $29 million, exclusive of potential financing and interest

F-33

TEEKAY CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in thousands of U.S. dollars, other than share data)

rate swap termination costs. The Teekay Nakilat Joint Venture has received notification from the lessor of the three vessels of a credit rating downgrade to the bank that was providing the letter of credit (or LC Bank) to Teekay Nakilat Joint Venture’s tax lease. As a result, the lessor has claimed an increase to the lease rentals over the remaining term of the RasGas II Leases and instructed that an estimated $12 million additional amount of cash be placed on deposit by the Teekay Nakilat Joint Venture. The Teekay Nakilat Joint Venture has engaged external legal counsel to validate these claims. Teekay LNG’s 70% share of the present value of the lease rental increase claim is approximately $10 million, however the final amount is dependent on external legal counsel’s review. The Teekay Nakilat Joint Venture is also looking at other alternatives to mitigate the impact of the downgrade to the LC Bank’s credit rating.

On December 7, 2011, the Petrojarl Banff FPSO unit (or Banff), which operates on the Banff field in the U.K. sector of the North Sea, suffered a severe storm event and sustained damage to its moorings, turret and subsea equipment, which necessitated the shutdown of production on the unit. Due to the damage, the Company declared force majeure under the customer contract on December 8, 2011 and the Banff FPSO unit commenced a period of off-hire which is currently expected to continue until the fourth quarter of 2013 while repairs are assessed and completed. The Company does not have off-hire insurance covering the Banff FPSO. After the repairs and upgrades are completed, the Banff FPSO unit is expected to resume production on the Banff field, where it is expected to remain under contract until the end of 2018.

The Company expects that repair costs to the Banff FPSO unit and equipment and costs associated with the emergency response to prevent loss or further damage during the December 7, 2011 storm event will be primarily reimbursed through our insurance coverage subject to a $750,000 deductible and the other terms and conditions of the applicable policies. In addition, the Company will also incur certain capital upgrade costs for the Banff FPSO unit and the Apollo Spirit related to upgrades to the mooring system required by the relevant regulatory authorities due in part to new metocean and environmental data and other safety considerations. The Apollo Spirit was operating on the Banff field as a storage tanker and is expected to return to the Banff field at the same time as the Banff FPSO. The total of these capital upgrade costs is expected to amount to approximately $90 million. The recovery of the capital upgrade costs from the charterer is subject to commercial negotiations or, failing agreement, the responsibility for these costs will be determined by an expedited arbitration procedure already agreed to by the parties. Any capital upgrade costs not recovered from the charterer will be capitalized to the vessel cost.

e) Redeemable Non-Controlling Interest

During 2010, an unrelated party contributed a shuttle tanker with a value of $35.0 million to a subsidiary of Teekay Offshore for a 33% equity interest in the subsidiary. The non-controlling interest owner of Teekay Offshore’s 67% owned subsidiary holds a put option which, if exercised, would obligate Teekay Offshore to purchase the non-controlling interest owner’s 33% share in the entity for cash in accordance with a defined formula. The redeemable non-controlling interest is subject to remeasurement if the formulaic redemption amount exceeds the carrying value. No remeasurement was required as at December 31, 2012.

f) Other

The Company enters into indemnification agreements with certain officers and directors. In addition, the Company enters into other indemnification agreements in the ordinary course of business. The maximum potential amount of future payments required under these indemnification agreements is unlimited. However, the Company maintains what it believes is appropriate liability insurance that reduces its exposure and enables the Company to recover future amounts paid up to the maximum amount of the insurance coverage, less any deductible amounts pursuant to the terms of the respective policies, the amounts of which are not considered material.

17. Supplemental Cash Flow Information

a) The changes in operating assets and liabilities for the years ended December 31, 2012, 2011, and 2010, are as follows:

	Year Ended December 31,
	2012			2011			2010
Accounts receivable		(132,873	)		(68,914	)		(21,820	)
Prepaid expenses and other assets		19,741			(8,225	)		12,719
Accounts payable		18,408			12,216			(11,002	)
Accrued and other liabilities		(20,485	)		(19,424	)		65,518
		(115,209	)		(84,347	)		45,415

b) Cash interest paid, including realized interest rate swap settlements, during the years ended December 31, 2012, 2011, and 2010, totaled $274.2 million, $279.1 million and $271.3 million, respectively. In addition, during the years ended December 31, 2012, 2011, and 2010, cash interest paid relating to interest rate swap amendments and terminations totaled $nil, $149.7 million and $nil, respectively.

c) During the year ended December 31, 2010, an unrelated party contributed a shuttle tanker with a value of $35.0 million to a subsidiary of the Company in exchange for a 33% equity interest in the subsidiary as described in Note 16(e) to these consolidated financial statements. This contribution has been treated as a non-cash transaction in the Company’s consolidated statement of cash flows.

F-34

TEEKAY CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in thousands of U.S. dollars, other than share data)

18. Vessel Sales and Write-downs

a) Vessel Sales

During 2012, the Company sold two shuttle tankers and three conventional tankers, resulting in a loss on sale of $1.1 million (shuttle tanker segment) and $5.9 million (conventional tanker segment). In addition, the Company sold its joint venture interest in the Ikdam FPSO unit and realized a gain of $10.8 million, which has been recorded in equity income (loss) on the Company’s consolidated statements of loss for the year ended December 31, 2012. During 2011, the Company sold one FSO unit and one conventional tanker, resulting in a loss on sale of $0.2 million (shuttle tanker and FSO segment). During 2010, the Company sold one LPG carrier and four conventional tankers, resulting in a gain on sale of $4.3 million (liquefied gas segment) and a loss on sale of $2.3 million (conventional tanker segment). All of the vessels disposed of were older vessels that the Company disposed of in the ordinary course of business.

b) Write-downs of Vessels, Equipment and Equity Accounted Investments

In 2012, 19 conventional tankers were written down to their estimated fair value using an appraised value, resulting in a total write down of $405.3 million within the conventional tanker segment. The appraised values were determined based on second-hand sale and purchase market data. This write down includes ten Suezmax tankers ($335.0 million), seven Aframax tankers ($66.0 million), and two other conventional tankers ($4.3 million). When comparing seven of the ten Suezmax tankers to each other and when comparing four of the seven Aframax tankers to each other, the vessels have a similar age, had a similar carrying value before the impairment and a similar estimated fair value, and are all being employed in the spot market or on short term time-charters. The total write down of $405.3 million includes $350.2 million from these eleven vessels. The primary factors that caused the write downs were a negative change in the outlook for the crude tanker market, a delay in the expected timing of a recovery of the crude tanker market as well as the expected discrimination impact from more fuel efficient vessels being constructed. One of the seven Aframax tankers was held for sale at December 31, 2012 and was subsequently sold in January 2013.

In 2012, four older shuttle tankers and one FSO unit were written down to their estimated fair value, resulting in a total write down of $28.8 million within the shuttle tanker and FSO segment. The write downs were the result of the Company entering into agreements in the fourth quarter of 2012 to sell two shuttle tankers and a change in the operating plans for the remaining vessels. Excluding one shuttle tanker, the estimated fair value for all five vessels was determined using an appraised value, based on second hand sale and purchase market data. The estimated fair value for the remaining vessel was determined using a discounted cash flow approach. Such a technique used estimates of future operating life (2.2 years based on the estimated remaining trading life of this vessel), future revenues ($37.2 million based on field production forecasts and the availability of contracts of affreightment suitable for the vessel), operating and dry-dock expenditures ($20.5 million), a residual value ($6.5 million based on the vessel’s light weight tonnage and the price of steel), and a discount rate (7.9%) that approximates the weighted average cost of capital of a market participant.

In 2011, eight older conventional tankers were written down to their estimated fair value using an appraised value, resulting in a total write down of $112.1 million within the conventional tanker segment. The write downs were the result of a change in the operating plans for certain vessels, escalating dry dock costs, a general decline in the future outlook for shipping and the global economy combined with delayed optimism on when economic recovery may occur.

In 2011, three older shuttle tankers and one FSO unit were written down to their estimated fair value using an appraised value, resulting in a total write down of $43.2 million within the shuttle tanker and FSO segment. The write downs were the result of the age of the vessels, the requirements of operating in the North Sea and Brazil, a change in the operating plans for certain vessels, and escalating dry dock costs.

During the year ended December 31, 2011, the Company incurred a $19.4 million write-down of its investment in PTH, a 50% joint venture which provides ship-to-ship lightering services. The write-down was recorded in equity income (loss) on the Company’s consolidated statement of loss for the year ended December 31, 2011. The Company’s investment in PTH is part of the Company’s conventional tanker segment and was written down to its estimated fair value, which is based upon the estimated liquidation values of the underlying net assets of PTH. The recognition of this write-down was driven by the continuing weak tanker market.

In 2010, certain shuttle tanker equipment and one 1992-built shuttle tanker was written down to its estimated fair value using an appraised value, resulting in a total write down of $19.5 million within the shuttle tanker and FSO segment. The write downs were the result of a change in expectation for utilization of the shuttle tanker equipment on new projects and in conjunction with the termination of the charter contract for the vessel. In addition, certain intangible assets of the conventional tanker segment were written down by $31.7. See Note 6.

See Note 2 – Segment Reporting for the total write down of vessels by segment for 2012, 2011 and 2010.

F-35

TEEKAY CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in thousands of U.S. dollars, other than share data)

19. Loss Per Share

	Year Ended December 31,
	2012 $			2011 $			2010 $
Net loss attributable to stockholders’ of Teekay Corporation		(160,180	)		(358,616	)		(267,287	)
Weighted average number of common shares		69,263,369			70,234,817			72,862,617
Dilutive effect of stock-based compensation		—			—			—
Common stock and common stock equivalents		69,263,369			70,234,817			72,862,617
Loss per common share:
—Basic		(2.31	)		(5.11	)		(3.67	)
—Diluted		(2.31	)		(5.11	)		(3.67	)

The anti-dilutive effect attributable to outstanding stock-based compensation excluded from the calculation of diluted loss per common share, for the years ended December 31, 2012, 2011, and 2010 was 3.9 million, 5.7 million and 6.1 million shares, respectively.

20. Restructuring Charges

During 2012, the Company recognized $7.6 million of restructuring charges. The restructuring charges primarily relate to reorganization of the Company’s marine operations to create better alignment with its conventional tanker business unit and its three publicly-listed subsidiaries and to create a lower-cost organization going forward. The Company expects to incur approximately $12 million of restructuring charges associated with this reorganization. A majority of the reorganization has been completed in 2012; however, certain portions will not be completed until the first half of 2013. As at December 31, 2012, $3.4 million of restructuring liabilities were recorded in accrued liabilities on the consolidated balance sheet.

During 2011, the Company incurred $5.5 million of restructuring costs. The restructuring costs were primarily related to the sale of an FSO unit, the Karratha Spirit, and the termination of the time-charter for the shuttle tanker Basker Spirit. The Company committed to plans for termination of the employment of certain seafarers of the two vessels. At December 31, 2011 and 2012, no restructuring liability was recorded in accrued liabilities on the consolidated balance sheet.

During 2010, the Company incurred $16.4 million of restructuring costs. The restructuring costs were primarily related to the reflagging of certain vessels, crew changes, and global staffing changes.

21. Income Taxes

Teekay and a majority of its subsidiaries are not subject to income tax in the jurisdictions in which they are incorporated because they do not conduct business or operate in those jurisdictions. However, among others, the Company’s Australian ship-owing subsidiaries and its Norwegian subsidiaries are subject to income taxes.

The significant components of the Company’s deferred tax assets and liabilities are as follows:

	December  31, 2012 $			December  31, 2011 $
Deferred tax assets:
Vessels and equipment		58,825			76,582
Tax losses carried forward(1)		427,443			380,299
Other		64,194			95,312
Total deferred tax assets		550,462			552,193
Deferred tax liabilities:
Vessels and equipment		26,503			60,776
Long-term debt		33,764			24,918
Other		40,117			45,624
Total deferred tax liabilities		100,384			131,318
Net deferred tax assets		450,078			420,875
Valuation allowance		(421,343	)		(398,559	)
Net deferred tax assets		28,735			22,316

F-36

TEEKAY CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in thousands of U.S. dollars, other than share data)

Net deferred tax assets are presented in other non-current assets in the accompanying consolidated balance sheets.

(1) Substantially all of the Company’s net operating loss carryforwards of $1.69 billion relate to its Australian ship-owning subsidiaries and its Norwegian subsidiaries. These net operating loss carryforwards are available to offset future taxable income in the respective jurisdictions, and can be carried forward indefinitely.

The components of the provision for income taxes are as follows:

	Year Ended December 31, 2012 $		Year Ended December 31, 2011 $			Year Ended December 31, 2010 $
Current		9,167		(6,768	)		(13,129	)
Deferred		5,239		2,478			19,469
Income tax recovery (expense)		14,406		(4,290	)		6,340

The Company operates in countries that have differing tax laws and rates. Consequently, a consolidated weighted average tax rate will vary from year to year according to the source of earnings or losses by country and the change in applicable tax rates. Reconciliations of the tax charge related to the relevant year at the applicable statutory income tax rates and the actual tax charge related to the relevant year are as follows:

	Year Ended December 31, 2012 $			Year Ended December 31, 2011 $			Year Ended December 31, 2010 $
Net loss before taxes		(325,522	)		(372,131	)		(172,975	)
Net loss not subject to taxes		(129,307	)		(341,473	)		(416,684	)
Net (loss) income subject to taxes		(196,215	)		(30,658	)		243,709
At applicable statutory tax rates		(15,808	)		(8,987	)		57,737
Permanent and currency differences		(253,143	)		(172,368	)		(104,514	)
Adjustments to valuation allowances and uncertain tax positions		250,327			179,675			40,863
Other		4,218			5,970			(426	)
Tax expense (recovery) related to the current year		(14,406	)		4,290			(6,340	)

The following is a roll-forward of the Company’s unrecognized tax benefits, recorded in other long-term liabilities, from January 1, 2010 to December 31, 2012:

	Year ended December 31, 2012 $			Year ended December 31, 2011 $			Year ended December 31, 2010 $
Balance of unrecognized tax benefits as at January 1		39,804			45,302			40,943
Increase for positions taken in prior years		—			83			4,037
Increase for positions related to the current year		4,560			3,308			8,979
Decreases for positions taken in prior years		(5,085	)		—			(4,557	)
Decreases related to statute of limitations		(9,915	)		(8,889	)		(4,100	)
Balance of unrecognized tax benefits as at December 31		29,364			39,804			45,302

The majority of the net decrease for positions for the year ended December 31, 2012 relates to potential tax on freight income.

F-37

TEEKAY CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in thousands of U.S. dollars, other than share data)

The Company does not presently anticipate such uncertain tax positions will significantly increase or decrease in the next 12 months; however, actual developments could differ from those currently expected. The tax years 2008 through 2012 remain open to examination by some of the major taxing jurisdictions in which the Company is subject to tax.

The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. The interest and penalties on unrecognized tax benefits are included in the roll-forward schedule above and are approximately a reduction of $0.8 million in 2012, net of statute barred liabilities, and $1.8 million in 2011 and $1.2 million in 2010.

22. Pension Benefits

a) Defined Contribution Pension Plans

With the exception of the Company’s employees in Norway and certain of its employees in Australia, the Company’s employees are generally eligible to participate in defined contribution plans. These plans allow for the employees to contribute a certain percentage of their base salaries into the plans. The Company matches all or a portion of the employees’ contributions, depending on how much each employee contributes. During the years ended December 31, 2012, 2011, and 2010, the amount of cost recognized for the Company’s defined contribution pension plans was $14.5 million, $18.3 million and $17.1million, respectively.

b) Defined Benefit Pension Plans

The Company has a number of defined benefit pension plans (or the Benefit Plans) which primarily cover its employees in Norway and certain employees in Australia. As at December 31, 2012, approximately 71% of the defined benefit pension assets were held by the Norwegian plans and approximately 28% are held by the Australian plan. The pension assets in the Norwegian plans have been guaranteed a minimum rate of return by the provider, thus reducing potential exposure to the Company to the extent the counterparty honors its obligations. Potential exposure to the Company has also been reduced, particularly for the Australian plans, as a result of certain of its time-charter and management contracts that allow the Company, under certain conditions, to recover pension plan costs from its customers.

In 2010, the Norwegian Parliament enacted a new early retirement plan for the private sector in Norway, which was effective January 1, 2011. As a result of the legislation, the Company was substantially released from its obligation under the Company’s prior early retirement plan (a single-employer defined benefit pension plan) and the Company recorded income of $3.7 million in the 2010 consolidated statement of income (loss).

The following table provides information about changes in the benefit obligation and the fair value of the Benefit Plans assets, a statement of the funded status, and amounts recognized on the Company’s balance sheets:

	Year Ended December 31, 2012 $			Year Ended December 31, 2011 $
Change in benefit obligation:
Beginning balance		137,172			120,723
Service cost		10,004			8,829
Interest cost		4,436			5,167
Contributions by plan participants		692			739
Actuarial (gain) loss		(12,059	)		9,408
Benefits paid		(3,216	)		(4,395	)
Plan amendments		6,549			—
Foreign currency exchange rate changes and other		4,912			(3,299	)
Ending balance		148,490			137,172
Change in fair value of plan assets:
Beginning balance		110,698			102,085
Actual return on plan assets		2,094			2,931
Contributions by the employer		13,404			12,061
Contributions by plan participants		692			739
Benefits paid		(3,166	)		(4,339	)
Plan amendments		4,328			—
Foreign currency exchange rate changes		6,848			(2,357	)
Other		(490	)		(422	)
Ending balance		134,408			110,698
Funded status deficiency		(14,082	)		(26,474	)
Amounts recognized in the balance sheets:
Other long-term liabilities		14,082			26,474
Accumulated other comprehensive loss:
Net actuarial losses		(19,449	)		(19,929	)

(1) As at December 31, 2012, the estimated amount that will be amortized from accumulated other comprehensive (loss) income into net periodic benefit cost in 2013 is $(1.2) million.

F-38

TEEKAY CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in thousands of U.S. dollars, other than share data)

As of December 31, 2012 and 2011, the accumulated benefit obligation for the Benefit Plans was $115.0 million and $100.4 million, respectively. The following table provides information for those pension plans with a benefit obligation in excess of plan assets and those pension plans with an accumulated benefit obligation in excess of plan assets:

	December 31, 2012 $		December 31, 2011 $
Benefit obligation		125,945		113,460
Fair value of plan assets		106,616		85,432
Accumulated benefit obligation		4,350		35,358
Fair value of plan assets		2,795		31,815

The components of net periodic pension cost relating to the Benefit Plans for the years ended December 31, 2012, 2011 and 2010 consisted of the following:

	Year Ended December 31, 2012 $			Year Ended December 31, 2011 $			Year Ended December 31, 2010 $
Net periodic pension cost:
Service cost		9,921			8,978			8,616
Interest cost		4,392			5,250			5,091
Expected return on plan assets		(5,270	)		(5,805	)		(5,431	)
Amortization of net actuarial loss		1,980			371			281
Other		577			421			(3,390	)
Net cost		11,600			9,215			5,167

The components of other comprehensive loss relating to the Plans for the years ended December 31, 2012, 2011 and 2010 consisted of the following:

	Year Ended December 31, 2012 $		Year Ended December 31, 2011 $			Year Ended December 31, 2010 $
Other comprehensive income (loss):
Net gain (loss) arising during the period		6,143		(12,052	)		(5,711	)
Amortization of net actuarial loss (gain)		1,979		319			(1,026	)
Other loss		—		—			(390	)
Total income (loss)		8,122		(11,733	)		(7,127	)

F-39

TEEKAY CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in thousands of U.S. dollars, other than share data)

The Company estimates that it will make contributions into the Benefit Plans of $10.5 million during 2013. The following table provides the estimated future benefit payments, which reflect expected future service, to be paid by the Benefit Plans:

Year	Pension Benefit Payments $
2013		9,264
2014		7,858
2015		6,612
2016		8,491
2017		8,531
2018 – 2022		39,868
Total		80,624

The fair value of the plan assets, by category, as of December 31, 2012 and 2011 were as follows:

	December 31, 2012		December 31, 2011
Pooled Funds (1)		94,981		82,501
Mutual Funds (2)
Equity investments		19,907		13,852
Debt securities		4,298		3,445
Real estate		3,843		2,092
Cash and money market		672		291
Other		10,707		8,517
Total		134,408		110,698

(1) The Company has no control over the investment mix or strategy of the pooled funds. The pooled funds guarantee a minimum rate of return. If actual investment returns are less than the guarantee minimum rate, then the provider’s statutory reserves are used to top up the shortfall. The pooled funds primarily invest in hold to maturity bonds, real estate and other fixed income investments, which are expected to provide a stable rate of return.

(2) The mutual funds primary aim is to provide investors with an exposure to a diversified mix of predominantly growth oriented assets (70%) with moderate to high volatility and some defensive assets (30%).

The investment strategy for all plan assets is generally to actively manage a portfolio that is diversified among asset classes, markets and regions. Certain of the investment funds do not invest in companies that do not meet certain socially responsible investment criteria. In addition to diversification, other risk management strategies employed by the investment funds include gradual implementation of portfolio adjustments and hedging currency risks.

The Company’s plan assets are primarily invested in commingled funds holding equity and debt securities, which are valued using the net asset value (or NAV) provided by the administrator of the fund. The NAV is based on the value of the underlying assets owned by the fund, minus its liabilities, and then divided by the number of shares or units outstanding. Commingled funds are classified within Level 2 of the fair value hierarchy as the NAVs are not publicly available.

The Company has a pension committee that is comprised of various members of senior management. Among other things, the Company’s pension committee oversees the investment and management of the plan assets, with a view to ensuring the prudent and effective management of such plans. In addition, the pension committee reviews investment manager performance results annually and approves changes to the investment managers.

The weighted average assumptions used to determine benefit obligations at December 31, 2012 and 2011 were as follows:

F-40

TEEKAY CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in thousands of U.S. dollars, other than share data)

	December 31, 2012			December 31, 2011
Discount rates		3.0	%		3.2	%
Rate of compensation increase		5.5	%		4.4	%

The weighted average assumptions used to determine net pension expense for the years ended December 31, 2012, 2011 and 2010 were as follows:

	Year Ended December 31, 2012 $			Year Ended December 31, 2011 $			Year Ended December 31, 2010 $
Discount rates		3.0	%		3.2	%		4.4	%
Rate of compensation increase		5.5	%		4.4	%		4.6	%
Expected long-term rates of return (1)		4.8	%		5.0	%		5.7	%

(1) To the extent the expected return on plan assets varies from the actual return, an actuarial gain or loss results. The expected long-term rates of return on plan assets are based on the estimated weighted-average long-term returns of major asset classes. In determining asset class returns, the Company takes into account long-term returns of major asset classes, historical performance of plan assets, as well as the current interest rate environment. The asset class returns are weighted based on the target asset allocations.

23. Equity Accounted Investments

The Company has a 33% ownership interest in four newbuilding 160,400-cubic meter LNG carriers (or the Angola LNG Carriers). The Angola LNG Carriers are chartered at fixed rates to the Angola LNG Project (see Note 16b). The Wah Kwong Joint Venture is a joint venture arrangement between Teekay Tankers and Wah Kwong whereby Teekay Tankers holds a 50% interest (see Note 16b). The RasGas 3 Joint Venture is a joint venture arrangement between Teekay LNG and QGTC 3 whereby Teekay LNG holds a 40% interest. The RasGas 3 Joint Venture owns four LNG carriers and related long-term fixed-rate time-charters to service the expansion of a LNG project in Qatar.

In February 2012, the Teekay LNG-Marubeni Joint Venture acquired a 100% interest in the six LNG Carriers from Denmark-based A.P. Moller-Maersk A/S for approximately $1.3 billion. Teekay LNG and Marubeni Corporation (or Marubeni) have 52% and 48% economic interests, respectively, but share control of Teekay LNG-Marubeni Joint Venture. Since control of the Teekay LNG-Marubeni Joint Venture is shared jointly between Marubeni and Teekay LNG, Teekay LNG accounts for its investment in the Teekay LNG-Marubeni Joint Venture using the equity method (see note 3b).

In November 2011, Teekay acquired a 40% interest in a recapitalized Sevan for approximately $25 million (see Note 3a). Sevan owns (i) two partially-completed hulls (#4 and #5) available for upgrade to FPSOs or other offshore projects; (ii) a licensing agreement with ENI SpA; (iii) an engineering and offshore project development business; and (iv) intellectual property rights, including offshore unit design patents. As at November 30, 2011, the fair value of the Company’s interest in Sevan was determined to be $37.1 million. The difference between the fair value of the Company’s 40% interest in Sevan and the price paid has been recognized as a bargain purchase gain in the Company’s consolidated statements of loss. As of December 31, 2012, the aggregate value of the Company’s 43% interest (40% interest —December 31, 2011) in Sevan, based on the quoted market price of Sevan’s common stock on the Oslo Stock Exchange was $83.1 million ($29.4 million – December 31, 2011).

In November 2010, Teekay LNG acquired a 50% interest in companies that own two LNG carriers (collectively, the Exmar Joint Venture) from Exmar NV for a total equity purchase price of approximately $72.5 million (net of assumed debt). Teekay LNG financed $37.3 million of the purchase price by issuing to Exmar NV approximately 1.1 million new common units with the balance financed by drawing on one of Teekay LNG’s revolving credit facilities. As part of the transaction, Teekay LNG agreed to guarantee its 50% share of the $206 million of debt secured by the Exmar Joint Venture. Exmar NV retains a 50% ownership interest in the Exmar Joint Venture. The two vessels acquired are the 2002-built Excalibur, a conventional LNG carrier, and the 2005-built Excelsior, a specialized gas carrier which can both transport and regasify LNG onboard. Both vessels are on long-term, fixed-rate charter contracts to Excelerate Energy LP for firm periods until 2022 and 2025, respectively.

A condensed summary of the Company’s investments in and advances to equity accounted investments are as follows (in thousands of dollars, except percentages):

F-41

TEEKAY CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in thousands of U.S. dollars, other than share data)

				As at December 31,
Investments in Equity Accounted Investments	Ownership Percentage			2012 $		2011 $
Malt Joint Venture (note 3b)		52	%		183,724		—
RasGas 3 Joint Venture		40	%		107,386		97,423
Exmar Joint Venture		50	%		82,737		81,242
Angola Joint Venture		33	%		28,699		16,063
Sevan Marine Equity Investment (note 3a)		43	%		39,223		34,898
Tiro and Sidon Joint Venture		50	%		30,024		—
Other		40% to 50%			8,250		10,911
Total					480,043		240,537
				As at December 31,
Loans to Equity Accounted Investees	Ownership Percentage			2012		2011
Sevan Marine Equity Investment		43	%		133,000		50,000
Tiro and Sidon Joint Venture		50	%		18,121		—
Other		40% to 50%			55,782		35,248
Total					206,903		85,248

A condensed summary of the Company’s financial information for equity accounted investments (33% to 52% owned) shown on a 100% basis are as follows:

	As at December 31,
	2012 (1)(2)		2011 (2)
Cash and restricted cash		229,963		184,296
Other assets- current		125,152		105,925
Vessels and equipment		2,114,435		462,335
Net investment in direct financing leases		1,938,011		1,728,902
Other assets—non-current		228,887		188,384
Current portion of long-term debt (3)		1,106,706		106,584
Other liabilities—current		193,785		138,945
Long-term debt		1,911,419		1,567,215
Other liabilities—non-current		469,220		395,750

	Year ended December 31,
	2012 (1)(2)			2011 (2)			2010 (4)
Revenues		659,030			303,607			232,516
Income from vessel operations		241,702			118,408			91,290
Realized and unrealized loss on derivative instruments		(56,307	)		(127,230	)		(95,750	)
Net income (loss)		120,395			(48,996	)		(44,794	)

(1) The results included for the Teekay LNG-Marubeni Joint Venture are from the date of acquisition of the MALT LNG Carriers which were acquired on February 28, 2012.

(2) The results included for the Angola Joint Venture are from the time the vessels were delivered in August, September, October 2011 and January 2012, respectively.

(3) The Teekay LNG-Marubeni Joint Venture expects to refinance its existing debt facility maturing in August 2013 with two long-term project facilities and a medium-term facility, secured by all of the vessels under the joint venture as well as through several guarantees from the joint venture partners based on their relative share holdings.

(4) The results included for the Excalibur and Excelsior Joint Ventures are from November 4, 2010.

For the year ended December 31, 2012, the Company recorded equity income (loss) of $79.2 million (2011 – $(35.3) million and 2010—$(11.3) million). The income or loss was primarily comprised of the Company’s share of net (loss) income from the Teekay LNG-Marubeni Joint Venture, Angola LNG Project, the RasGas 3 Joint Venture, Sevan, and from the Exmar Joint Venture. For the year ended December 31, 2012, $5.3 million of the equity gain related to the Company’s share of unrealized gain (loss) on interest rate swaps associated with these projects (2011 – $(35.2) million and 2010—$(26.3) million).

24. Change in Accounting Estimate

Effective January 1, 2012, the Company reduced the estimated useful life of six of its older shuttle tankers from 25 years to 20 years. As a result of the change in useful life, the Company increased its estimate of the residual value of these vessels to reflect the more recent average scrap prices. As a result, depreciation and amortization expense has increased by $14.9 million for the year ended December 31, 2012, and net income attributable to the stockholders of Teekay has decreased by $4.4 million, or $0.06 per share for the year ended December 31, 2012.

F-42

TEEKAY CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in thousands of U.S. dollars, other than share data)

25. Subsequent Events

a) In January 2013, Teekay Offshore issued in the Norwegian bond market NOK 1,300 million in senior unsecured bonds. The bonds were issued in two tranches maturing in January 2016 (NOK 500 million) and January 2018 (NOK 800 million). The aggregate principal amount of the bonds is equivalent to approximately $233 million and all interest and principal payments under each of the two tranches have been swapped into U.S. dollars at fixed rates of 4.80% on the tranche maturing in 2016 and 5.93% on the tranche maturing in 2018. In connection with this, Teekay Offshore repurchased NOK 388.5 million of the existing NOK 600 million bond issue maturing in November 2013. The net proceeds of approximately $167 million have been used to reduce portion of amounts outstanding under Teekay Offshore’s revolving credit facilities and for general partnership purposes. Teekay Offshore will apply to list the bonds on the Oslo Stock Exchange.

b) In February 2013, Teekay LNG completed its joint venture agreement with Belgium-based Exmar NV to own and charter-in liquefied petroleum gas (LPG) carriers with a primary focus on the mid-size gas carrier segment. The joint venture entity, called Exmar LPG BVBA, took economic effect as of November 1, 2012 and includes 16 owned LPG carriers (including four newbuildings scheduled for delivery in 2014) and five chartered-in LPG carriers. In addition, the joint venture recently ordered another four medium-size gas carrier newbuildings with deliveries scheduled between 2015 and 2016, with options to order up to four additional vessels, which brings the total fleet size of Exmar LPG BVBA to 25 vessels, excluding options. For its 50% ownership interest in the joint venture, including newbuilding payments made prior to the November 1, 2012, Teekay LNG invested approximately $134 million of equity and assumed approximately $108 million of its pro rata share of existing debt and lease obligations as of the economic effective date, secured by certain vessels in the Exmar LPG BVBA fleet. Exmar LPG BVBA is in the process of refinancing the joint venture fleet and four of the newbuildings with a new $355 million debt facility.

c) In April 2013, Teekay Tankers entered into agreement with STX Offshore & Shipbuilding Co., Ltd (or STX) of South Korea for the construction of four, fuel-efficient 113,000 dead-weight tonne Long Range 2 (or LR2) product tanker newbuildings for a fully-built-up cost of approximately $47 million each. The agreement with STX also includes fixed-price options for the construction up to 12 additional LR2 newbuildings, which options expire between October 2013 and October 2014. Upon delivery, it is expected that the four vessels will operate in the Company’s Taurus Tankers LR2 Pool. Teekay Tankers intends to finance the installment payments with its existing liquidity and to secure long-term debt financing for the four vessels prior to their scheduled deliveries in late-2015 and early-2016.

d) In April 2013, Teekay Offshore issued 2.06 million common units in a private placement to an institutional investor for proceeds of approximately $60.0 million, excluding the General Partner’s 2% proportionate capital contribution of $1.2 million. Upon completion of the private placement, Teekay Offshore had 83.8 million common units outstanding. Teekay Offshore will use the proceeds from the issuance of common units to partially finance the shipyard instalments for the four Suezmax newbuilding shuttle tankers that are scheduled for deliveries throughout 2013, and for general corporate purposes. As a result of this private placement, Teekay’s ownership of Teekay Offshore was reduced to 28.7% (including the Company’s 2% general partner interest). Teekay maintains control of Teekay Offshore by virtue of its control of the general partner and will continue to consolidate the subsidiary.

e) In April 2013, Teekay Offshore issued 6.0 million preferred units in a public offering for net proceeds of $144.9 million, representing a new class of limited partner interests. Teekay Offshore expects to use the net proceeds from the public offering for general corporate purposes, including the funding of newbuilding installments, capital conversion projects and the acquisitions of vessels that Teekay may offer to Teekay Offshore. Pending the application of funds for these purposes, Teekay Offshore expects to repay a portion of its outstanding debt under two of its revolving credit facilities.

F-43

EX-4.19

Exhibit 4.19

EXECUTION VERSION

MARGIN LOAN AGREEMENT

Dated as of December 21, 2012

among

TEEKAY FINANCE LIMITED,

as Borrower,

the Lenders party hereto

and

CITIBANK, N.A.,

as Administrative Agent

TABLE OF CONTENTS

	Page
ARTICLE 1
DEFINITIONS AND ACCOUNTING TERMS
Section 1.01 . Certain Defined Terms		1
Section 1.02 . Times Of Day		21
Section 1.03 . Terms Generally.		21
Section 1.04 . Accounting Terms; GAAP		22
ARTICLE 2
AMOUNTS AND TERMS OF THE ADVANCES
Section 2.01 . Commitments.		22
Section 2.02 . Advances and Borrowings.		22
Section 2.03 . Requests For Borrowings.		23
Section 2.04 . Funding Of Borrowings.		23
Section 2.05 . Termination Of Facility		24
Section 2.06 . Repayment Of Advances		24
Section 2.07 . Interest.		24
Section 2.08 . Fees.		24
Section 2.09 . Interest Rate Determinations		25
Section 2.10 . Prepayments Of Borrowings; Withdrawal Of Collateral; Substitution of Collateral Shares.		25
Section 2.11 . Increased Costs		27
Section 2.12 . Taxes.		28
Section 2.13 . Illegality		32
Section 2.14 . Break-Funding.		33
Section 2.15 . Evidence Of Debt		33
Section 2.16 . Payments And Computations; Pro Rata Treatment; Sharing of Set-offs.		33
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
Section 3.01 . Organization; Powers		35
Section 3.02 . Authorization; Enforceability		35
Section 3.03 . Governmental Approvals; No Conflicts		35
Section 3.04 . Financial Condition; No Material Adverse Change.		36
Section 3.05 . Litigation Matters		36
Section 3.06 . Compliance With Laws And Agreements		36
Section 3.07 . Investment Company Status		36

i

Section 3.08 . Taxes	36
Section 3.09 . Disclosure	37
Section 3.10 . Material Agreements	37
Section 3.11 . Solvency	37
Section 3.12 . Trading And Other Restrictions.	37
Section 3.13 . Capitalization and Subsidiaries	38
Section 3.14 . Patriot Act; Sanctioned Persons.	38
Section 3.15 . Material Nonpublic Information	38
Section 3.16 Restricted Transactions. As of the Closing Date, Borrower is not a party to any Restricted Transactions in respect of Borrower.	38
Section 3.17 . Conduct of Business	39
Section 3.18 . Ownership of Property; Ownership of Shares	39
Section 3.19 . No Sovereign Immunity	39
ARTICLE 4
CONDITIONS OF LENDING
Section 4.01 . Conditions Precedent to First Borrowing	39
Section 4.02 . Conditions Precedent To Each Advance	41
ARTICLE 5
AFFIRMATIVE COVENANTS OF BORROWER
Section 5.01 . Financial Statements	42
Section 5.02 . Notices Of Material Events	43
Section 5.03 . Existence; Conduct Of Business	43
Section 5.04 . Payment Of Taxes	44
Section 5.05 . Compliance With Laws	44
Section 5.06 . Compliance With Exchange Act Requirements	44
Section 5.07 . Further Assurances	44
Section 5.08 . Books And Records	44
Section 5.09 . Maintenance of Separateness	44
Section 5.10 . Use Of Proceeds	45
ARTICLE 6
NEGATIVE COVENANTS
Section 6.01 . Indebtedness	45
Section 6.02 . Liens	45
Section 6.03 . Fundamental Changes.	46
Section 6.04 . Asset Sales	46
Section 6.05 . Investments And Acquisitions	46
Section 6.06 . Restricted Payments	46
Section 6.07 . Investment Company	46
Section 6.08 . No Amendment Of Organization Documents, Etc	46

ii

Section 6.09 . Formation Of Subsidiaries	46
Section 6.10 . Restricted Transaction	47
Section 6.11 . No Impairment of Collateral Shares	47
Section 6.12 . Tax Status	47
Section 6.13 . Use Of Proceeds	47
Section 6.14 . Provision Of Public Information	47
ARTICLE 7
EVENTS OF DEFAULT
Section 7.01 . Events Of Default	48
ARTICLE 8
ADMINISTRATIVE AGENT
Section 8.01 . Administrative Agent.	51
ARTICLE 9
MISCELLANEOUS
Section 9.01 . Amendments, Etc.	53
Section 9.02 . Notices; Effectiveness; Electronic Communications.	56
Section 9.03 . No Waiver; Remedies.	59
Section 9.04 . Costs And Expenses; Indemnification; Damage Waiver.	60
Section 9.05 . Collateral Agent.	61
Section 9.06 . Calculation Agent.	61
Section 9.07 . Payments Set Aside.	62
Section 9.08 . Governing Law; Submission To Jurisdiction.	62
Section 9.09 . Successors and Assigns.	63
Section 9.10 . Severability	66
Section 9.11 . Counterparts; Integration; Effectiveness	66
Section 9.12 . Survival Of Representations	66
Section 9.13 . Confidentiality	67
Section 9.14 . No Advisory Or Fiduciary Relationship	68
Section 9.15 . Right Of Setoff	68
Section 9.16 . Judgment Currency	68
Section 9.17 . USA PATRIOT Act Notice	69
Section 9.18 . Interest Rate Limitation	69
Section 9.19 . Disclosure	69

iii

EXHIBITS

Exhibit A – Form of Borrowing Notice

Exhibit B – Form of Security Agreement

Exhibit C – Form of Control Agreement

Exhibit D-1 – Form of Issuer Acknowledgement with TGP Issuer

Exhibit D-2 – Form of Issuer Acknowledgement with TOO Issuer

Exhibit E-1 – U.S. Tax Certificate (For Non-U.S. Lenders that are not Partnerships for U.S. Federal Income Tax Purposes

Exhibit E-2 – U.S. Tax Certificate (For Non-U.S. Lenders that are Partnerships for U.S. Federal Income Tax Purposes

Exhibit E-3 – U.S. Tax Certificate (For Non-U.S. Participants that are not Partnerships for U.S. Federal Income Tax Purposes

Exhibit E-4 – U.S. Tax Certificate (For Non-U.S. Participants that are Partnerships for U.S. Federal Income Tax Purposes

Exhibit F – Form of Guarantee Agreement

Exhibit G – Form of New York law opinion

Exhibit H – Form of Marshall Islands law opinion

Exhibit I – Form of Bermuda law opinion

Exhibit J – Form of Assignment and Assumption

Exhibit K – Form of Amendments to Borrower’s Organization Documents

SCHEDULES

Schedule 1.01(a) – Haircuts for Cash Equivalents

Schedule 1.01(b) – Certain Defined Terms

Schedule 3.13 – Capitalization

Schedule 9.02 – Certain Addresses for Notices

iv

This MARGIN LOAN AGREEMENT (as it may be amended or modified from time to time, this “Agreement”) is made as of December 21, 2012 by and among Teekay Finance Limited, a Bermuda exempted company, as Borrower (“Borrower”), the Lenders party hereto and CITIBANK, N.A., as Administrative Agent (in such capacity, “Administrative Agent”).

Borrower has requested that the Lenders make loans to it from time to time in an aggregate principal amount not exceeding the Commitments (as hereinafter defined) of the Lenders, and the Lenders are prepared to make such loans upon the terms and subject to the conditions set forth in this Agreement.

In consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows:

ARTICLE 1

DEFINITIONS AND ACCOUNTING TERMS

Section 1.01. Certain Defined Terms. As used in this Agreement, the following terms shall have the following meanings:

“Act” has the meaning specified in Section 9.17.

“Adjusted Initial Basket” means, initially, a number of TGP Shares and TOO Shares equal to the Initial Basket, which number shall from time to time be (x) reduced by the number of TGP Shares or TOO Shares, as the case may be, released pursuant to Section 2.10(b) or Section 2.10(c) and (y) increased by the number of any additional TGP Shares or TOO Shares, as the case may be, pledged by Borrower pursuant to Section 2.10(c) that constitute Eligible Collateral; provided that neither the number of TGP Shares nor the number of TOO Shares in the Adjusted Initial Basket may be so increased to exceed the number of TGP Shares or TOO Shares, respectively, in the Initial Basket.

“Administrative Agent” has the meaning specified in the preamble hereto.

“Advance” has the meaning specified in Section 2.01.

“Affiliate” means, with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

“Agreement” has the meaning specified in the preamble hereto.

“Amendment Effective Time” means, in respect of any Potential Facility Amendment Event, Share Collateral Trigger Event or Redocumentation Event, 5:00 p.m. on the third Business Day following the Notice Date applicable to such Potential Facility Amendment Event, Share Collateral Trigger Event or Redocumentation Event, as the case may be; provided that if Borrower delivers to Administrative Agent on or prior to the first Business Day following the

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applicable Notice Date (i) a copy of a duly executed and delivered notice of borrowing under a revolving credit facility of Guarantor in respect of an amount sufficient to pay the Total Accrued Loan Amount and (ii) evidence reasonably satisfactory to Administrative Agent that Guarantor has agreed to contribute the proceeds of such borrowing to Borrower, the Amendment Effective Time shall be 5:00 p.m. on the fourth Business Day following the applicable Notice Date.

“Applicable Percentage” means, with respect to any Lender, the percentage of the total Commitments in effect at any given time represented by such Lender’s then applicable Commitment. If the Commitments have terminated or expired, the Applicable Percentages shall be determined based upon the outstanding principal amounts of the Advances made by the respective Lenders.

“Assignment and Assumption” means an assignment and assumption entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 9.09), and accepted by Administrative Agent, in the form of Exhibit J or any other form approved by Administrative Agent and reasonably acceptable to Borrower.

“Attributable Debt” means, at any time, (a) in respect of any capital lease of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared at such time in accordance with GAAP, and (b) in respect of any Synthetic Lease Obligation, the capitalized amount of the remaining lease payments under the relevant lease that would appear on a balance sheet of such Person prepared at such time in accordance with GAAP if such lease were accounted for as a capital lease.

“Availability Period” means the period from and including the Closing Date to the Final Maturity Date, but excluding any Commitment Unavailability Period.

“Bankruptcy Code” means the United States Bankruptcy Code.

“Base Rate” means, with respect to any Interest Period, the applicable LIBOR plus the Spread; provided that if LIBOR cannot be determined for such Interest Period for whatever reason, Base Rate means, with respect to each day in such Interest Period, a rate per annum equal to (i) the Spread plus (ii) the greatest of (a) the Citibank Base Rate in effect on such day minus 1.00%, (b) the Federal Funds Effective Rate in effect on such day minus  ¹/₂ of 1.00%, and (c) 0.00%. Any change in the Base Rate due to a change in the Citibank Base Rate or the Federal Funds Effective Rate shall be effective from and including the effective date of such change in the Citibank Base Rate or the Federal Funds Effective Rate, respectively.

“Basket Ratio Requirement” means, at any time, that the Share Collateral Value attributable to TOO Shares as of such date is not less than 25% nor greater than 50% of the total Share Collateral Value at such time.

“Borrower” has the meaning specified in the preamble hereto.

“Borrower Financial Statements” has the meaning specified in Section 4.01(a).

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“Borrowing” means Advances made on the same date.

“Borrowing Notice” has the meaning specified in Section 2.03(a).

“Business Day” means any day on which commercial banks are open for business in New York City, United States, and Vancouver, Canada, and, if such day relates to any Advance, means any such day on which dealings in Dollar deposits are conducted by and between banks in the London interbank eurodollar market.

“Calculation Agent” means Administrative Agent, in its capacity as Calculation Agent.

“Cash” means cash in Dollars.

“Cash Collateral Amount” means, at any time, the aggregate Collateral Value of all Eligible Collateral consisting of Cash and Cash Equivalents at such time.

“Cash Equivalents” means any of the following having a maturity of not greater than 12 months from the date of issuance thereof: (a) readily marketable direct obligations of the Government of the United States or any agency or instrumentality thereof or obligations unconditionally guaranteed by the full faith and credit of the Government of the United States, (b) certificates of deposit of or time deposits with any commercial bank that is a Lender or a member of the Federal Reserve System that issues (or the parent of which issues) commercial paper rated as described in clause (c), is organized under the laws of the United States or any state thereof and has combined capital and surplus of at least $500,000,000, (c) commercial paper in an aggregate amount of no more than $10,000,000 per issuer outstanding at any time, issued by any corporation organized under the laws of any state of the United States and rated at least “Prime 1” (or the then equivalent grade) by Moody’s or “A 1” (or the then equivalent grade) by S&P, or (d) offshore overnight interest bearing deposits in foreign branches of Administrative Agent, any Lender or any Affiliate of a Lender.

“Change in Law” means the occurrence, after the Closing Date, of (a) the adoption of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the interpretation or application thereof by any Governmental Authority or (c) compliance by any Lender or Administrative Agent (or, for purposes of Section 2.11(b), by any lending office of any Lender or by any Lender’s holding company, if any) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement; provided that, notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall be deemed to have been introduced or adopted after the Closing Date, regardless of the date enacted, adopted or issued.

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“Change of Control” means, with respect to any Person, any event or transaction, or series of related events or transactions, as a result of which (i) a “person” or “group” becomes the “beneficial owner” of more than 50% of such Person’s common equity (all within the meaning of Section 13(d) of the Exchange Act and the rules promulgated thereunder) or (ii) if such Person is a partnership or limited liability company or similar entity, the identity of the general partner or managing member or similar Person (the “GP”) of such Person changes or a Change of Control (as defined in clause (i) of this sentence) occurs with respect to the GP of such Person.

“Charges” has the meaning specified in Section 9.18.

“Citibank Base Rate” means the rate of interest per annum publicly announced from time to time by Citibank, N.A. as its base rate in effect at its principal office in New York City. Any change in such rate shall take effect on the day specified in the public announcement of such change.

“Closing Date” means the earliest date on which the conditions precedent set forth in Section 4.01 and Section 4.02 shall have been satisfied or waived in accordance with Section 9.01 of this Agreement.

“Closing Share Price” means, at any time and for either of the TGP Shares or the TOO Shares, the closing price for one such Share on the applicable Exchange on the immediately preceding Exchange Business Day for such Shares, as reported on Bloomberg Page “TGP <equity> AQR” in the case of the TGP Shares or Bloomberg Page “TOO <equity> AQR” in the case of the TOO Shares (or, any successor or replacement reporting entity or page thereto reasonably selected by Calculation Agent); provided that if (i) a Market Disruption Event exists in respect of such Shares or (ii) such closing price is not so reported, in each case on such immediately preceding Exchange Business Day for such Shares, the “Closing Share Price” shall be the market value of one such Share as determined by Calculation Agent using objectively verifiable data and information sources, if available. If a Delisting has occurred and is continuing in respect of such Shares on such immediately preceding Exchange Business Day, the “Closing Share Price” shall be the closing sale price for such Shares on the primary national or regional securities exchange on which such Shares are listed or admitted for trading or, if such Shares are not listed or admitted for trading on any such exchange, the last quoted bid price for such Shares in the over-the-counter market as reported by OTC Markets Group Inc. or a similar organization reasonably selected by Calculation Agent, in either case on such immediately preceding Exchange Business Day.

“Code” means the Internal Revenue Code of 1986, as amended.

“Collateral” has the meaning specified in the Security Agreement.

“Collateral Account” has the meaning specified in the Security Agreement.

“Collateral Agent” means Administrative Agent, in its capacity as collateral agent.

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“Collateral Requirement” means that (i) Administrative Agent shall have received from Borrower duly executed and delivered by Borrower (x) counterparts of the Security Agreement and the Control Agreement and (y) a UCC financing statement in appropriate form for filing with the Recorder of Deeds in the District of Columbia and (ii) Borrower shall have taken all other action required to be taken by Borrower under the Security Agreement or the Control Agreement to perfect, register or record the Liens granted by it thereunder.

“Collateral Shares” means any Shares held in the Collateral Account.

“Collateral Value” means, at any time, (i) with respect to Cash, the face amount of such Cash, (ii) with respect to Cash Equivalents, the fair market value of such Cash Equivalents at such time, as determined by Calculation Agent, multiplied by the applicable haircut set forth in Schedule 1.01(a) for such category of Cash Equivalents, (iii) with respect to a Collateral Share, the Closing Share Price for such Collateral Share at such time, and (iv) with respect to Other Collateral, the fair market value of such Other Collateral at such time, as determined by Calculation Agent, multiplied by the applicable haircut agreed by Borrower and Collateral Agent at the time Borrower and Collateral Agent agree that such other Collateral shall constitute Other Collateral.

“Commitment” means, with respect to each Lender, the commitment of such Lender to make the Advances hereunder, as reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 9.09. The amount of each Lender’s Commitment is set forth opposite such Lender’s name on the signature page hereof, or in the Assignment and Assumption pursuant to which such Lender shall have assumed its Commitment, as applicable.

“Commitment Fee” has the meaning specified in Section 2.08(b).

“Commitment Fee Period” means the period from and including the date hereof to the Final Maturity Date, but excluding any Commitment Unavailability Period.

“Commitment Fee Rate” has the meaning specified in Schedule 1.01(b).

“Commitment Unavailability Period” means the period from any date on which Borrower prepays the Total Accrued Loan Amount pursuant to clause (i) of the proviso to Section 9.01(b), but does not terminate the Commitments pursuant to clause (ii) of such proviso, to the first subsequent date on which the aggregate Collateral Value of the Adjusted Initial Basket has been greater than 60% of the Initial Share Collateral Value for at least 15 consecutive Exchange Business Days.

“Communication” has the meaning specified in Section 6.14.

“Compensation Period” has the meaning specified in Section 2.04(b).

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“Connection Income Taxes” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.

“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.

“Control Agreement” means that certain Account Control Agreement, dated as of the date hereof, among Borrower, Custodian and Collateral Agent, in the form of Exhibit C.

“Cross-Default Person” means each of Borrower, Guarantor, each Subsidiary of Guarantor, each Issuer and each Subsidiary of each Issuer.

“Custodian” means Citigroup Global Markets, Inc. or any other custodian selected in good faith by Collateral Agent.

“Debtor Relief Laws” means the Bankruptcy Code, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.

“Default” means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default.

“Defaulting Lender” means, at any time, a Lender (i) that has failed for three or more Business Days to comply with its obligations under this Agreement to make an Advance (a “funding obligation”), (ii) that has notified Administrative Agent, or has stated publicly, that it will not comply with any such funding obligation hereunder, or has defaulted on its funding obligations under any other loan agreement or credit agreement or other similar agreement, (iii) that has, for three or more Business Days, failed to confirm in writing to Administrative Agent, in response to a written request of Administrative Agent, that it will comply with its funding obligations hereunder, (iv) with respect to which a Lender Insolvency Event has occurred and is continuing or (v) that has otherwise failed to pay over to Administrative Agent or any Lender any other amount required to be paid by it hereunder within three Business Days of the date when due, unless the subject of a good faith dispute. Administrative Agent will promptly send to all parties hereto notice of any Lender becoming a Defaulting Lender.

“Delisting” means, for either the TGP Shares or the TOO Shares, that such Shares are no longer listed or admitted for trading on any Designated Exchange.

“Designated Exchange” means any of The New York Stock Exchange, The NASDAQ Global Select Market or The NASDAQ Global Market, or any successor thereto.

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“Dollars” and “$” mean the lawful money of the United States.

“DTC” means The Depository Trust Company, a New York corporation, or its successor.

“Early Closure” means the closure on any Exchange Business Day of the relevant Exchange prior to its scheduled closing time for such day unless such earlier closing time is announced by such Exchange at least one hour prior to the actual closing time for the regular trading session on such Exchange on such Exchange Business Day.

“Eligible Collateral” means the following assets of Borrower, to the extent held in the Collateral Account and subject to a perfected first priority Lien in favor of Collateral Agent and with respect to which the Collateral Requirement shall have been satisfied:

(a) Cash; provided that the Collateral Value of Eligible Collateral consisting of Cash shall not exceed the Total Accrued Loan Amount;

(b) Cash Equivalents;

(c) Shares; provided that (i) any TGP Shares constituting Collateral in excess of the Maximum TGP Shares and any TOO Shares constituting Collateral in excess of the Maximum TOO Shares and (ii) any Shares not registered in global form in the name of DTC or its nominee shall, in each case, not be Eligible Collateral; and

(d) Other Collateral, if any.

“Equity Interests” means, with respect to any Person, shares of capital stock of (or other ownership or profit interests in) such Person, any warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and any other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, whether economic or non-economic, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination.

“Events of Default” has the meaning specified in Section 7.01.

“Exchange” means, for each of the TGP Shares and the TOO Shares, The New York Stock Exchange or its successor, or if such Shares are not listed for trading on such exchange, the Designated Exchange that is the primary trading market for such Shares.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

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“Exchange Business Day” means, for either the TGP Shares or the TOO Shares, any day on which the Exchange for such Shares is open for trading during its regular trading session, notwithstanding such Exchange closing prior to its scheduled closing time.

“Exchange Disruption” means, with respect to either the TGP Shares or the TOO Shares, any event (other than an Early Closure or Trading Suspension) that materially disrupts or impairs the ability of market participants in general to effect transactions in, or obtain market values for, such Shares on the Exchange for such Shares on any Exchange Business Day for such Shares as determined by Calculation Agent.

“Excluded Taxes” means any of the following Taxes imposed on or with respect to any Lender Person or required to be withheld or deducted from any payment to any Lender Person, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Lender Person being organized under the laws of, or having its principal office or its Lending Office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) Taxes attributable to such Lender Person’s failure to comply with Section 2.12(e) and (c) any Taxes imposed under FATCA.

“Existing Transfer Restrictions” means Transfer Restrictions on the Collateral Shares arising solely from the fact that Borrower is an “affiliate” of the Issuer within the meaning of Rule 144. The parties hereto acknowledge that the Agreement of Limited Partnership of each Issuer contains provisions that could restrict the transfer of record ownership of the relevant Shares on the books of such Issuer, which provisions do not apply to transfers of beneficial interests in Shares registered in global form in the name of DTC or its nominee.

“Extraordinary Dividend” means any dividend or distribution to existing holders of TGP Shares or TOO Shares, as the case may be, that is not an Ordinary Cash Dividend or a stock split or other dividend or distribution in Shares.

“Facility” means the credit facility contemplated by this Agreement.

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof, any agreements entered into pursuant to Section 1471(b)(1) of the Code, and any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement entered into in connection with the implementation of such Sections of the Code.

“Federal Funds Effective Rate” means, for any day, the weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average (rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for such day for such transactions received by Lender from three Federal funds brokers of recognized standing selected by it.

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“Final Maturity Date” means the earliest of: (a) the Scheduled Maturity Date; (b) the date on which the Facility is terminated pursuant to Section 2.05; and (c) the date on which all Commitments otherwise terminate pursuant to this Agreement.

“Foreign Lender” means any Lender that is organized under the laws of a jurisdiction other than the United States of America, any State thereof or the District of Columbia.

“FRB” means the Board of Governors of the Federal Reserve System of the United States.

“Funding Account” means the deposit account of Borrower to which Administrative Agent is authorized by Borrower in the relevant Borrowing Notice to transfer the proceeds of any Borrowings requested or authorized pursuant to this Agreement.

“GAAP” means generally accepted accounting principles in the United States of America.

“Governmental Authority” means the government of the United States of America or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).

“Guarantee” means, as to any Person, (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation payable or performable by another Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other obligation of the payment or performance of such Indebtedness or other obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation, (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness or other obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part), or (v) as an applicant in respect of any letter of credit or letter of credit guaranty issued to support such Indebtedness, or (b) any Lien on any assets of such Person securing any Indebtedness or other obligation of any other Person, whether or not such Indebtedness or other obligation is assumed by such Person (or any right, contingent or otherwise, of any holder of such Indebtedness to obtain any such Lien). The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which

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such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith. The term “Guarantee” as a verb has a corresponding meaning.

“Guarantee Agreement” means that certain Guarantee Agreement, dated as of the date hereof, executed by Guarantor in favor of Administrative Agent and the Lenders, in the form of Exhibit F.

“Guarantor” means Teekay Corporation, a corporation organized under the laws of the Republic of the Marshall Islands.

“Guarantor Financial Statements” has the meaning specified in Section 4.01(a).

“Indebtedness” means, as to any Person at any time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP, (a) all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments; (b) all direct or contingent payment obligations of such Person arising under letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds and similar instruments; (c) net payment or delivery obligations of such Person under any Swap Contract; (d) all payment obligations of such Person to pay the deferred purchase price of property or services (other than trade accounts payable in the ordinary course of business and accruals for liabilities incurred in the ordinary course of business); (e) indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse; (f) capital leases and Synthetic Lease Obligations; (g) all obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment in respect of any Equity Interest in such Person or any other Person, valued, in the case of a redeemable preferred interest, at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends; and (h) all Guarantees of such Person in respect of any of the foregoing. For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer, unless such Indebtedness is expressly made non-recourse to such Person. The amount of any net obligation under any Swap Contract on any date shall be deemed to be the Swap Termination Value thereof as of such date. The amount of any capital lease or Synthetic Lease Obligation as of any date shall be deemed to be the amount of Attributable Debt in respect thereof as of such date.

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of any Obligor under any Margin Loan Document and (b) to the extent not otherwise described in (a), Other Taxes.

“Indemnitee” has the meaning specified in Section 9.04(b).

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“Information” has the meaning specified in Section 9.13.

“Initial Borrowing” means any Borrowing made at a time at which, immediately prior to giving effect to such Borrowing, the Total Accrued Loan Amount is zero.

“Initial Basket” means the number of TGP Shares and the number of TOO Shares constituting Eligible Collateral immediately prior to the first Borrowing hereunder.

“Initial LTV Ratio” has the meaning specified in Schedule 1.01(b).

“Initial Share Collateral Value” means the Share Collateral Value as of the date hereof.

“Interest Period” means, for any Advance, the period commencing on the date of such Advance and ending on the day that numerically corresponds to the date of the most recent Initial Borrowing in the calendar month that is three months after such date of such Initial Borrowing; provided that (i) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day and (ii) any Interest Period pertaining to an Advance that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period.

“IRS” means the United States Internal Revenue Service.

“Issuer” means each of TGP Issuer and TOO Issuer.

“Issuer Acknowledgement” means, for each Issuer, an Issuer Acknowledgement dated as of the date hereof in the forms of Exhibit D-1 (in the case of TGP Issuer) and Exhibit D-2 (in the case of TOO Issuer).

“Judgment Currency” has the meaning specified in Section 9.16.

“Law” means, with respect to any Person, collectively, all international, foreign, U.S. Federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case that is applicable to such Person or such Person’s business or operation and whether or not having the force of law.

“Lender” means each financial institution listed on the signature pages hereto as a Lender, and any other person that becomes a party hereto pursuant to Section 9.09.

“Lender Expenses” has the meaning specified in Section 9.04(a).

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“Lender Expenses Cap” has the meaning specified in Schedule 1.01(b).

“Lender Insolvency Event” means that (i) a Lender or its Parent Company is insolvent, or is generally unable to pay its debts as they become due, or admits in writing its inability to pay its debts as they become due, or makes a general assignment for the benefit of its creditors, or (ii) a Lender or its Parent Company is the subject of a bankruptcy, insolvency, reorganization, liquidation or similar proceeding, or a receiver, trustee, conservator, intervenor or sequestrator or the like has been appointed for such Lender or its Parent Company, or such Lender or its Parent Company has taken any action in furtherance of or indicating its consent to or acquiescence in any such proceeding or appointment.

“Lender Person” means any of Administrative Agent and any Lender.

“Lender Process Agent” has the meaning specified in Section 9.02(e).

“Lending Office” means, with respect to each Lender, the office of such Lender specified in Schedule 9.02 hereto, or such other office of such Lender as such Lender may from time to time specify in writing to Borrower.

“LIBOR” means, with respect to any Interest Period (or other period determined by Calculation Agent with respect to any overdue amount), the per annum rate for deposits in Dollars for a term coextensive with such Interest Period (or other period) and for an amount substantially equal to the total Commitments which appears on Telerate Page 3750 as of 11:00 a.m., London time, on the day that is two Business Days preceding the first day of such Interest Period (or other period). (For purposes of the preceding sentence, LIBOR for any Interest Period (or other period) of a length for which rates do not appear on Telerate Page 3750 shall be determined through the use of straight line interpolation by reference to two LIBOR rates appearing on Telerate Page 3750, one of which shall be the rate for the period of time next shorter than the length of the Interest Period (or other period) and the other of which shall be the rate for the period of time next longer than the length of the Interest Period (or other period).) If no such rate appears on Telerate Page 3750, LIBOR shall mean the per annum rate, determined on the basis of the rates at which deposits in Dollars for a term coextensive with such Interest Period (or other period) and in an amount approximately equal to the principal amount of the applicable Borrowing or overdue amount are offered by four major banks in the London interbank market, selected by Calculation Agent, at approximately 11:00 a.m., London time, on the day that is two Business Days preceding the first day of such Interest Period (or other period). If at least two such quotations are provided, LIBOR for such Interest Period (or other period) shall be the arithmetic mean of the quotations. If fewer than two quotations are provided as requested, LIBOR for such Interest Period (or other period) shall be the arithmetic mean of the per annum rates quoted by major banks in New York City, selected by Calculation Agent, at approximately 11:00 a.m. on such day for loans in Dollars to leading European banks for a term coextensive with such Interest Period (or other period) and in an amount approximately equal to the principal amount of the applicable Borrowing or overdue amount. If such rate is not available at such time for any reason, then the rate for that Interest Period (or other period) will be determined by such alternate method as reasonably selected by Calculation Agent.

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“Lien” means any mortgage, pledge, hypothecation, collateral assignment, encumbrance, lien (statutory or other), charge, or preference, priority or other security interest or preferential arrangement in the nature of a security interest of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any easement, right of way or other encumbrance on title to real property, and any financing lease having substantially the same economic effect as any of the foregoing).

“LTV Ratio” means, at any time, the quotient (expressed as a percentage) of (a) the difference of (i) the Total Accrued Loan Amount (for the avoidance of doubt, calculated without regard to the then applicable Make Whole Amount) minus (ii) the Cash Collateral Amount, if any, divided by (b) the sum of (i) the Share Collateral Value plus (ii) the Other Collateral Value, in each case at such time.

“Make Whole Amount” has the meaning specified in Schedule 1.01(b).

“Margin Loan Document” means each of this Agreement, the Security Agreement, the Guarantee Agreement, the Control Agreement, each Issuer Acknowledgement, each promissory note delivered pursuant to Section 2.15(d), each Borrowing Notice and each agreement delivered under Section 5.07.

“Margin Stock” has the meaning specified in Regulation U promulgated by the FRB.

“Market Disruption Event” means an Early Closure, an Exchange Disruption, or a Trading Disruption.

“Material Adverse Effect” means, with respect to any Cross-Default Person, a material adverse effect on (a) the business, assets or liabilities, of such Cross-Default Person taken as a whole, (b) the ability of such Cross-Default Person to perform any of its obligations under any Margin Loan Document to which it is a party, (c) the Collateral, or Collateral Agent’s Liens on the Collateral or the priority of such Liens, or (d) the rights of or benefits available to Administrative Agent, Collateral Agent or the Lenders under any Margin Loan Document.

“Material Indebtedness” means any Indebtedness if the amount thereof exceeds the Threshold Amount.

“Material Nonpublic Information” means information (i) that has not been disseminated in a manner making it available to investors generally, within the meaning of Regulation FD, and (ii) to which an investor would reasonably attach importance in reaching a decision to buy, sell or hold Shares.

“Material Subsidiary” means, with respect to any Person, any Subsidiary of such Person with total assets equal to or greater than $100,000,000.

“Maximum Rate” has the meaning specified in Section 9.18.

“Maximum TGP Shares” means 13.5 million TGP Shares.

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“Maximum TOO Shares” means 12 million TOO Shares.

“Merger Event” means, with respect to either the TGP Shares or the TOO Shares, any transaction or event that is, or results in, (i) a reclassification or change of such Shares that results in a transfer of or an irrevocable commitment to transfer all of such Shares outstanding to another entity or person, (ii) a consolidation, amalgamation, merger or binding share exchange of the TGP Issuer or the TOO Issuer, as the case may be, with or into another entity or person (other than a consolidation, amalgamation, merger or binding share exchange in which such Issuer is the continuing entity and that does not result in a reclassification or change of all of such Shares outstanding), (iii) a takeover offer, tender offer, exchange offer, solicitation, proposal or other event by any entity or person to purchase or otherwise obtain 100% of the outstanding Shares of the TGP Issuer or the TOO Issuer, as the case may be, that results in a transfer of or an irrevocable commitment to transfer all such Shares (other than such Shares owned or controlled by such other entity or person), or (iv) a consolidation, amalgamation, merger or binding share exchange of the TGP Issuer or the TOO Issuer, as the case may be, or its subsidiaries with or into another entity in which such Issuer is the continuing entity and that does not result in a reclassification or change of all such Shares outstanding but results in the outstanding TGP Shares or TOO Shares, as the case may be (other than such Shares owned or controlled by such other entity), immediately prior to such event collectively representing less than 50% of the outstanding TGP Shares or TOO Shares, as the case may be, immediately following such event.

“Moody’s” means Moody’s Investors Service, Inc. (or its successor).

“Notice Date” means, in respect of any Potential Facility Amendment Event or Share Collateral Trigger Event, the date, if any, on which Administrative Agent delivers notice to Borrower of the proposed amendments to the terms of the relevant Margin Loan Documents in respect of such Potential Facility Amendment Event or Share Collateral Trigger Event, as the case may be, and, in the case of a Redocumentation Event, the date, if any, on which either party delivers notice to the other party that such Redocumentation Event has occurred.

“Obligations” means all Advances to, and all debts, liabilities, obligations, covenants, indemnifications, and duties of, Borrower arising under any Margin Loan Document or otherwise with respect to the Advances, in each case whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against Borrower of any proceeding under any Debtor Relief Laws naming Borrower as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding.

“Obligor” means each of Borrower and Guarantor.

“Ordinary Cash Dividend” means any quarterly cash dividend or distribution to existing holders of the TGP Shares or the TOO Shares, as the case may be, that does not exceed $1.50 per share. For the avoidance of doubt, only one dividend or distribution per calendar quarter in respect of each of the TGP Shares and the TOO Shares may be an Ordinary Cash Dividend.

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“Organization Documents” means, (a) with respect to any corporation or company, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the certificate or articles of formation or organization, and the limited liability company agreement or operating agreement; and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.

“Other Collateral” means such assets of Borrower, if any, not consisting of Cash, Cash Equivalents or Shares as Borrower and Collateral Agent, with the consent of the Required Lenders, shall agree in writing shall constitute Other Collateral.

“Other Collateral Value” means, at any time, the aggregate Collateral Value of all Eligible Collateral consisting of Other Collateral at such time.

“Other Connection Taxes” means Taxes imposed as a result of a present or former connection between a Lender Person and the jurisdiction imposing such Tax (other than connections arising from such Lender Person having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Margin Loan Document, or sold or assigned an interest in any Advance or Margin Loan Document).

“Other Taxes” means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Margin Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment, any sale of participations or the designation of a new Lending Office (other than at the request of Borrower pursuant to Section 2.11(e)).

“Parent Company” means, with respect to a Lender, the bank holding company (as defined in Federal Reserve Board Regulation Y), if any, of such Lender, and/or any Person owning, beneficially or of record, directly or indirectly, a majority of the shares of such Lender.

“Participant” has the meaning specified in Section 9.09(c).

“Permitted Investments” means loans of Cash owned by Borrower and not constituting Collateral (or required by any Margin Loan Document to be held as Collateral) to Guarantor or any Subsidiary of Guarantor on arm’s-length terms.

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“Permitted Liens” means (a) Liens imposed by Law for taxes that are not yet due or are being contested in good faith by appropriate proceedings and with respect to which adequate reserves in conformity with GAAP have been taken and (b) Liens granted to Collateral Agent pursuant to the Margin Loan Documents.

“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

“Potential Facility Amendment Events” has the meaning specified in Section 9.01(c).

“Preliminary Share Collateral Trigger Event” means that, at any time, aggregate Collateral Value of the Adjusted Initial Basket is less than 55% of the Initial Share Collateral Value.

“Preliminary Share Collateral Trigger Event Grace Period” means, in respect of any Preliminary Share Collateral Trigger Event, the period of three Business Days immediately following the date (the “notice date”) on which Administrative Agent gives Borrower notice of the occurrence of an event that will cause such Preliminary Share Collateral Trigger Event to occur; provided that if Borrower delivers to Administrative Agent on or prior to the first Business Day immediately following such notice date (i) a copy of a duly executed and delivered notice of borrowing under a revolving credit facility of Guarantor in respect of an amount sufficient to prepay Borrowings pursuant to Section 2.10(a) such that, immediately after giving effect to such prepayment, the LTV Ratio would be equal to or less than the Initial LTV Ratio and (ii) evidence reasonably satisfactory to Administrative Agent that Guarantor has agreed to contribute the proceeds of such borrowing to Borrower, the Preliminary Share Collateral Trigger Event Grace Period for such Preliminary Share Collateral Trigger Event shall be the period of four Business Days immediately following such notice date.

“Process Agent” has the meaning specified in Section 9.02(e).

“Redocumentation Event” means that (i) an event is announced that if consummated or completed would result in either Issuer ceasing to be a “foreign private issuer” as such term is defined in Rule 3b-4 under the Exchange Act or (ii) either Issuer ceases to be such a “foreign private issuer.”

“Register” has the meaning specified in Section 9.09(b)(iv).

“Regulation U” means Regulation U issued by the FRB.

“Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents, trustees and advisors of such Person and of such Person’s Affiliates.

“Required Lenders” means, at any time, Lenders (not including Borrower or any of its Affiliates) having aggregate Applicable Percentages in excess of 50% at such time.

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“Responsible Officer” means, with respect to either Borrower or Guarantor, any of the chief executive officer, chairman, president, chief financial officer, chief strategy officer, any vice president, secretary, assistant secretary or director of such Person.

“Restricted Payment” means, with respect to any Person, any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interests in such Person, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such Equity Interests in such Person or any option, warrant or other right to acquire any such Equity Interests in such Person.

“Restricted Transaction” means, in respect of an Obligor, any pledge or encumbrance of Shares to any person (a “Secured Party”) to secure any obligation of such Obligor or any Affiliate of such Obligor; provided that such a pledge or encumbrance of Shares by an Obligor other than Borrower that does not relate to a transaction that gives rise to any obligations of Borrower shall not constitute a Restricted Transaction if (i) such Obligor has given Administrative Agent, on behalf of the Lenders, a right of first refusal to either (x) enter into the transaction that would give rise to such obligation on the same terms as those proposed to be entered into with such Secured Party or (y) amend the Margin Loan Documents to add such Shares to the Eligible Collateral and (1) increase the total Commitments by an amount equal to the product of the Share Collateral Value in respect of such Shares as of the date such Shares are added to the Eligible Collateral and the Initial LTV Ratio (with a proportional increase to the Commitment of each Lender) and (2) increase the Maximum TGP Shares and the Maximum TOO Shares by the number of TGP Shares and TOO Shares included in such Shares, in either case of (x) or (y), in lieu of the proposed transaction between the Obligor and the proposed Secured Party; and (ii) if Administrative Agent, on behalf of the Lenders, has declined to exercise such right of first refusal (including, for the avoidance of doubt, by reason of being unable to obtain the consents required by Section 9.01(a) to affect such amendments to the Margin Loan Documents), (A) the transaction between the Obligor and the proposed Secured Party does not contain any events of default, collateral triggers or other provisions that could allow such Secured Party to liquidate any such Shares prior to a time at which Collateral Agent would have the right to liquidate the Collateral under the Margin Loan Documents and (B) Borrower agrees to amend the terms of this Agreement to include, in addition to the Events of Default set forth herein, any default, event of default, collateral trigger or other event or circumstance giving rise to a right on behalf of such Secured Party to liquidate any Shares as an Event of Default under this Agreement.

“Rule 144” means Rule 144 under the Securities Act.

“S&P” means Standard & Poor’s (or its successor).

“Sanctions” has the meaning specified in Section 3.14.

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“Scheduled Maturity Date” means the date (to be notified in writing to Borrower by Administrative Agent) that is three years from the earlier of (i) the date of the first Borrowing hereunder and (ii) the date that is one month from the date hereof.

“SEC” means the U.S. Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.

“Securities Act” means the United States Securities Act of 1933, as amended.

“Security Agreement” means that certain Pledge and Security Agreement, dated as of the date hereof, between Borrower and Collateral Agent, in the form of Exhibit B.

“Separate Facility” has the meaning specified in Section 9.01(d).

“Set-off Party” has the meaning specified in Section 9.15.

“Share Collateral Trigger Event” means that, any time, the aggregate Collateral Value of the Adjusted Initial Basket is less than 50% of the Initial Share Collateral Value.

“Share Collateral Value” means, at any time, the aggregate Collateral Value of all Eligible Collateral consisting of Collateral Shares at such time.

“Shares” means each of the TGP Shares and the TOO Shares.

“Solvent” means, with respect to any Person, that at any time, both (a)(i) the sum of such Person’s liabilities (including contingent liabilities) does not exceed the present fair saleable value of such Person’s present assets; (ii) such Person’s capital is not unreasonably small in relation to its business as contemplated on the Closing Date; and (iii) such Person has not incurred and does not intend to incur, or believe (or reasonably believe) that it will incur, debts beyond its ability to pay such debts as they become due (whether at maturity or otherwise); and (b) such Person is “solvent” within the meaning given that term and similar terms under applicable laws relating to fraudulent transfers and conveyances. For purposes of this definition, the amount of any contingent liability at any time shall be computed as the amount that, in light of all of the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

“Spread” has the meaning specified in Schedule 1.01(b).

“Structuring Fee” has the meaning specified in the Schedule 1.01(b).

“Structuring Fee Payment Date” means the earlier of (i) the date that is two calendar weeks following the date hereof and (ii) the date of the first Borrowing hereunder.

“Subsidiary” means, with respect to any Person, any corporation, partnership, limited liability company or other entity of which the majority of the Equity Interests having by the terms thereof ordinary voting power to elect a majority of the board of directors or other persons

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performing similar functions of such corporation, partnership, limited liability company or other entity (irrespective of whether or not at the time securities or other ownership interests of any other class or classes of such corporation, partnership, limited liability company or other entity shall have or might have voting power by reason of the happening of any contingency) is at the time directly or indirectly owned or controlled by such Person or one or more Subsidiaries of such Person or by such Person and one or more Subsidiaries of such Person.

“Swap Contract” means (a) any and all rate swap transaction, swap option, basis swap, forward rate transaction, commodity swap, commodity option, equity or equity index swap, equity or equity index option, bond option, interest rate option, foreign exchange transaction, cap transaction, floor transaction, collar transaction, currency swap transaction, cross-currency rate swap transaction, currency option, credit protection transaction, credit swap, credit default swap, credit default option, total return swap, credit spread transaction, repurchase transaction, reverse repurchase transaction, buy/sell-back transaction, securities lending transaction, weather index transaction or forward purchase or sale of a security, commodity or other financial instrument or interest (including any option with respect to any of these transactions), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, that are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement.

“Swap Termination Value” means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Swap Contracts, as determined by Calculation Agent, using commercially reasonable procedures in order to produce a commercially reasonable result, based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts (which may include Administrative Agent, any Lender or any Affiliate of Administrative Agent or any Lender).

“Synthetic Lease Obligation” means the monetary obligation of a Person under (a) a so-called synthetic, off-balance sheet or tax retention lease, or (b) an agreement for the use or possession of property (including sale and leaseback transactions), in each case, creating obligations that do not appear on the balance sheet of such Person but that, upon the application of any Debtor Relief Laws to such Person, would be characterized as the indebtedness of such Person (without regard to accounting treatment).

“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

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“TGP Issuer” means Teekay LNG Partners L.P., a limited partnership organized under the laws of the Republic of the Marshall Islands.

“TGP Shares” means the common units of TGP Issuer.

“Threshold Amount” has the meaning specified in Schedule 1.01(b).

“TOO Issuer” means Teekay Offshore Partners L.P., a limited partnership organized under the laws of the Republic of the Marshall Islands.

“TOO Shares” means the common units of TOO Issuer.

“Total Accrued Loan Amount” means, at any time, the aggregate outstanding principal amount of all Advances, together with accrued and unpaid interest thereon, the accrued and unpaid fees, including the Make Whole Amount, if applicable, and all reimbursable expenses and other Obligations together with accrued and unpaid interest thereon.

“Trading Disruption” means, for either the TGP Shares or the TOO Shares, any material suspension of or limitation imposed on trading by the Exchange for such Shares on any Exchange Business Day for such Shares (whether by reason of movements in price exceeding limits permitted by such Exchange or otherwise) relating to such Shares.

“Transactions” means the execution, delivery and performance by Borrower of the Margin Loan Documents, the grant of the security interest contemplated hereby or thereby and the borrowing of the Advances.

“Transfer Restriction” means, with respect to any item of Collateral, any condition to or restriction on the ability of the owner thereof to sell, assign or otherwise transfer such item of Collateral or enforce the provisions thereof or of any document related thereto whether set forth in such item of Collateral itself or in any document related thereto, including, without limitation, (i) any requirement that any sale, assignment or other transfer or enforcement for such item of Collateral be consented to or approved by any Person, including, without limitation, the issuer thereof or any other obligor thereon, (ii) any limitation on the type or status, financial or otherwise, of any purchaser, pledgee, assignee or transferee of such item of Collateral, (iii) any requirement for the delivery of any certificate, consent, agreement, opinion of counsel, notice or any other document of any Person to the issuer of, any other obligor on or any registrar or transfer agent for, such item of Collateral, prior to the sale, pledge, assignment or other transfer or enforcement of such item of Collateral and (iv) any registration or qualification requirement or prospectus delivery requirement for such item of Collateral pursuant to any federal, state, local or foreign securities law (including, without limitation, any such requirement arising under Section 5 of the Securities Act as a result of such item of Collateral being a “restricted security” or Borrower being an “affiliate” of the issuer of such item of Collateral, as such terms are defined in Rule 144); provided that the required delivery of a customary assignment, instruction or entitlement order from Borrower, together with any evidence of the corporate or other authority of Borrower, shall not constitute a “Transfer Restriction”.

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“U.S. Person” means a “United States person” within the meaning of Section 7701(a)(30) of the Code.

“U.S. Tax Compliance Certificate” has the meaning specified in Section 2.12(e)(ii)(B)(3).

“UCC” means the Uniform Commercial Code as in effect from time to time in the State of New York or any other state or jurisdiction of the United States the laws of which are required to be applied in connection with the issue of perfection of security interests.

“United States” and “U.S.” mean the United States of America.

Section 1.02. Times Of Day. Unless otherwise specified, all references herein to times of day shall be references to New York City time (daylight or standard, as applicable).

Section 1.03. Terms Generally.

(a) The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The word “will” shall be construed to have the same meaning and effect as the word “shall”. Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (c) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement and (e) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights. In the computation of periods of time from a specified date to a later specified date, unless expressly specified otherwise, the word “from” means “from and including;” the words “to” and “until” each mean “to but excluding;” and the word “through” means “to and including.”

(b) Section headings herein and in the other Margin Loan Documents are included for convenience of reference only and shall not affect the interpretation of this Agreement or any other Margin Loan Documents.

(c) Determinations, consents, approvals or any other actions or non-actions taken by or determined by Administrative Agent in such capacity shall be made in good faith and, unless otherwise stated herein, its sole discretion.

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(d) In the computation of numbers of shares, triggers related to price or value per share or traded volume of shares herein, such number, or collateral trigger in this Agreement, as applicable, may be adjusted from time to time by Calculation Agent in connection with any buy-back, share split or any other event with dilutive or concentrative effect (which, for the avoidance of doubt, does not include ordinary course equity or convertible/exchangeable offerings on market terms, as well as contribution arrangements where the parent contributes assets to the issuers in exchange for shares issued at prevailing market prices) with respect to such shares so that the trigger levels reflect the same collateral value and the numbers of such shares maintains the same ratio to the aggregate number of such shares issued and outstanding, in each case had such buy-back, share split or similar event not occurred.

Section 1.04. Accounting Terms; GAAP. Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; provided that if Borrower notifies Administrative Agent that Borrower requests an amendment to any provision hereof to eliminate the effect of any change occurring after the date hereof in GAAP or in the application thereof on the operation of such provision (or if Administrative Agent notifies Borrower that Administrative Agent or the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith.

ARTICLE 2

AMOUNTS AND TERMS OF THE ADVANCES

Section 2.01. Commitments.

(a) Subject to the terms and conditions set forth herein, each Lender agrees to make loans in Dollars to Borrower (each such loan, an “Advance”) from time to time during the Availability Period in an aggregate principal amount that will not result in (i) the total outstanding principal amount of Advances made by such Lender exceeding the Commitment for such Lender or (ii) the total outstanding principal amount of Advances made by all Lenders exceeding the Commitments for all Lenders.

Section 2.02. Advances and Borrowings.

(a) Each Advance shall be made as part of a Borrowing consisting of Advances made by the Lenders ratably in accordance with their then Applicable Percentages. The failure of any Lender to make any Advance required to be made by it shall not relieve any other Lender of its obligations hereunder.

(b) Each Borrowing shall be in an amount of $10,000,000 or a whole multiple of $1,000,000 in excess thereof. Subject to the conditions set forth in Article 4 and the other terms and conditions set forth herein, Borrower may from time to time borrow, prepay pursuant to Section 2.10(a) and reborrow under this Section 2.02.

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Section 2.03. Requests For Borrowings.

(a) (i) To request a Borrowing, Borrower shall notify Administrative Agent and each other Lender of such request no later than 1:00 p.m. on the second Business Day prior to the date of such proposed Borrowing.

(ii) Each such notice of a request for a Borrowing (a “Borrowing Notice”) shall be in writing in substantially the form of Exhibit A, specifying therein: (x) the date of such Borrowing, which shall be a Business Day, (y) the aggregate amount of such Borrowing and (z) the Funding Account. If a Borrowing Notice is not given by the time referred to in Section 2.03(a)(i) above, it shall be deemed to have been given on the next succeeding Business Day.

(b) Each Borrowing Notice shall be irrevocable and binding on Borrower.

Section 2.04. Funding Of Borrowings.

(a) Each Lender shall make each Advance to be made by it hereunder on the proposed date thereof by wire transfer of immediately available funds promptly and not later than 3:00 p.m. to the account of Administrative Agent most recently designated by it for such purpose by notice to the Lenders. Upon satisfaction of the applicable conditions set forth in Section 4.02 (and, if such Borrowing is the first Borrowing, Section 4.01), Administrative Agent will make all funds so received available to Borrower by crediting the amounts so received, in like funds as received by Administrative Agent, to the Funding Account.

(b) Unless Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing that such Lender will not make available to Administrative Agent such Lender’s share of such Borrowing, Administrative Agent may assume that such Lender has made such share available on such date in accordance with paragraph (a) of this Section and may, in reliance upon such assumption, make available to Borrower a corresponding amount. If and to the extent that such Lender did not make available such Lender’s share of such Borrowing, then such Lender shall forthwith on demand pay to Administrative Agent the amount thereof in immediately available funds, together with interest thereon for the period from the date such amount was made available by Administrative Agent to Borrower to the date such amount is received by Administrative Agent (the “Compensation Period”) at a rate per annum equal to the Federal Funds Effective Rate from time to time as in effect plus Administrative Agent’s standard processing fee for interbank compensation. If such Lender pays such amount to Administrative Agent, then such amount shall constitute such Lender’s Advance included in the applicable Borrowing. If such Lender does not pay such amount forthwith upon Administrative Agent’s demand therefor, Administrative Agent may make a demand therefor upon Borrower, and Borrower shall pay such amount to Administrative Agent, together with the interest thereon for the Compensation Period at a rate per annum equal to the rate of interest applicable to the

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applicable Borrowing. Nothing herein shall be deemed to relieve any Lender from its obligations to fulfill its Commitment or to prejudice any rights that Administrative Agent or Borrower may have against any Lender as a result of any default by such Lender hereunder.

Section 2.05. Termination Of Facility. (a) Unless previously terminated, the Commitment shall terminate on the Scheduled Maturity Date.

(b) Borrower may at any time, upon written notice to Administrative Agent, terminate the Commitments upon the prepayment in full of the Total Accrued Loan Amount to Administrative Agent for the account of each Lender. Upon delivery by Borrower of such written notice, the Facility shall be irrevocably terminated, may not be reinstated and shall cease to have further effect, except with respect to the provisions that by their express terms survive the termination of the Facility.

(c) Borrower may not reduce the amount of the Commitment, except as set forth in Section 2.10 below.

Section 2.06. Repayment Of Advances. Borrower hereby unconditionally promises to pay to Administrative Agent for the account of each Lender the then unpaid principal amount of each Advance on the Final Maturity Date.

Section 2.07. Interest.

(a) Borrower shall pay interest on the outstanding principal amount of each Advance, from the date of such Advance until the date on which such principal amount shall have been paid in full, at a rate per annum equal to the Base Rate, payable quarterly in arrears for each Interest Period on the first Business Day following the end of such Interest Period, commencing on the first Business Day following the end of the first Interest Period following the Closing Date, and on the Final Maturity Date; provided that (i) interest accrued pursuant to paragraph (b) of this Section shall be payable on demand and (ii) in the event of any repayment or prepayment of any Advance, accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment. The total amount of interest due on each such day shall be computed by Calculation Agent on the immediately preceding Business Day. The Base Rate shall be computed by Calculation Agent based on a year of 360 days and actual days elapsed in the Interest Period for which interest is payable.

(b) Notwithstanding the foregoing, during the occurrence and continuance of an Event of Default, (i) all Advances shall bear interest at 2% plus the Base Rate and (ii) any other amount outstanding hereunder shall accrue interest at 2% plus the Base Rate.

Section 2.08. Fees.

(a) On the Structuring Fee Payment Date, Borrower shall pay to Administrative Agent for the account of each Lender the Structuring Fee and shall pay the Lender Expenses as directed by Administrative Agent; provided that any Lender Expenses not invoiced prior to the Closing Date shall be due and payable three Business Days following the date they are invoiced. Such fee shall be fully earned when paid and shall not be refundable for any reason whatsoever.

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(b) Borrower shall pay to Administrative Agent for the account of each Lender a commitment fee (the “Commitment Fee”) on the average daily undrawn portion of the Commitment for such Lender during the Commitment Fee Period at a rate equal to the Commitment Fee Rate, calculated on the basis of the actual days elapsed and a year of 360 days and payable in arrears on each day the interest is due (or would be due if Borrowings were outstanding) pursuant to Section 2.07. The Commitment Fee shall accrue at all times during the Commitment Fee Period (but not, for the avoidance of doubt, during any Commitment Unavailability Period), including at any time during which one or more of the conditions in Article 4 is not met. Administrative Agent shall notify Borrower no later than the third Business Day prior to any date on which the accrued Commitment Fee is payable of the amount of such Commitment Fee due on such payment date; provided that if Administrative Agent gives Borrower such notice after such deadline, such accrued Commitment Fee shall be due and payable on the third Business Day following the date Administrative Agent delivers such notice.

(c) If the Commitments are terminated in full by Borrower pursuant to Section 2.05(b) or if the Total Accrued Loan Amount is declared due and payable in connection with an Event of Default of the type described in Section 7.01(a) (solely to the extent that the payment required to be made is based upon an Event of Default under any of the other Sections enumerated in this Section 2.08(c)), Section 7.01(b), Section 7.01(d) (solely with respect to Borrower and solely under Section 5.03, Section 5.09, and Article 6, but excluding Section 6.14, of this Agreement), Section 7.01(g) (solely with respect to Borrower), Section 7.01(h)(ii), Section 7.01(i)(ii) or Section 7.01(n) (solely with respect to Borrower) of this Agreement, in each case prior to the Final Maturity Date, Borrower shall pay to Administrative Agent for the account of each Lender the Make Whole Amount, except that no Make Whole Amount shall be payable in connection with any such termination to the extent provided in Section 9.01(b), Section 9.01(c) or Section 9.01(d).

(d) All fees payable hereunder shall be paid on the dates due, in immediately available funds, to Administrative Agent for distribution to the Lenders ratably in accordance with the Applicable Percentage of each Lender. Fees shall not be refundable under any circumstances.

(e) Notwithstanding anything to the contrary herein, during such period as a Lender is a Defaulting Lender, such Defaulting Lender will not be entitled to any fees accruing during such period pursuant to Section 2.08(b) (without prejudice to the rights of the Lenders other than Defaulting Lenders in respect of such fees).

Section 2.09. Interest Rate Determinations. Calculation Agent shall give notice to Borrower and the Lenders of the applicable interest rates for the purposes of Section 2.07.

Section 2.10. Prepayments Of Borrowings; Withdrawal Of Collateral; Substitution of Collateral Shares.

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(a) Borrower may prepay Borrowings, in whole or in part, by prepaying an amount equal to the sum of (i) the principal amount of the Borrowings being prepaid and (ii) accrued interest to the date of such prepayment on the amount prepaid, upon irrevocable notice thereof. Such notice shall be given to Administrative Agent by Borrower not later than 2:00 p.m. on the date five (5) Business Days prior to the date of any such prepayment; provided that each partial prepayment of the Borrowings shall be in an aggregate principal amount of $10,000,000 or a whole multiple of $1,000,000 in excess thereof. Any such prepayment shall be made to Administrative Agent for the account of each Lender.

(b) Borrower shall not withdraw any Collateral from the Collateral Account, except as provided in this subsection (b) or in subsection (c), (d) or (e) of this Section 2.10. Borrower shall be entitled to the release, upon written notice thereof delivered to Collateral Agent on or before 2:00 p.m. three (3) Exchange Business Days prior to the requested date of the release, of (i) Cash, Cash Equivalents or any other Collateral other than Collateral Shares from the Collateral Account (other than Ordinary Cash Dividends) if immediately following such release the LTV Ratio would be less than or equal to the Initial LTV Ratio; or (ii) Collateral Shares from the Collateral Account if (A) immediately following such release (x) the LTV Ratio would be less than or equal to the Initial LTV Ratio and (y) the Basket Ratio Requirement would be satisfied and (B) the Share Collateral Value is greater than 120% of the Initial Share Collateral Value at all times on the 30 consecutive Exchange Business Days immediately prior to such request; provided that prior to and immediately after giving effect to any release pursuant to clause (i) or (ii) of this Section 2.10(b), no Default or Event of Default has occurred and is continuing or would occur.

(c) Borrower may in its discretion (i) pledge additional Shares by depositing them into the Collateral Account or (ii) request the release of any TGP Shares or TOO Shares constituting Collateral, and Collateral Agent shall grant such request if in connection with such request Borrower pledges additional TGP Shares (in the case of a requested release of TOO Shares) or TOO Shares (in the case of a requested release of TGP Shares) by depositing such additional Shares into the Collateral Account in an amount such that immediately after giving effect to such requested release and the related pledge of additional Shares, the LTV Ratio shall not be increased (a “substitution”); provided that immediately following any such additional pledge or substitution, the Basket Ratio Requirement shall be satisfied.

(d) Any Ordinary Cash Dividend shall be automatically released to Borrower on the Business Day immediately following the day such Ordinary Cash Dividend is credited to the Collateral Account; provided that (i) no Share Collateral Trigger Event has occurred and is continuing and (ii) prior to and immediately after giving effect to such release, no Default or Event of Default has occurred and is continuing or would occur. Upon request of Borrower to Administrative Agent, any Collateral consisting of the proceeds of any Extraordinary Dividend, whether in the form of cash or other property, shall be released to Borrower on the fifth Exchange Business Day following the receipt of such request; provided that (i) a Share Collateral Trigger Event has not occurred and is continuing and (ii) prior to and immediately after giving effect to such release, no Default or Event of Default has occurred and is continuing or would occur.

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(e) Interest shall accrue to the account of Borrower on any Cash held in the Collateral Account at the Federal Funds Effective Rate, and shall be credited to the Collateral Account by Administrative Agent on each Business Day. Such interest shall be automatically released to Borrower on the Business Day immediately following the day such interest is credited to the Collateral Account; provided that (i) no Share Collateral Trigger Event has occurred and is continuing and (ii) prior to and immediately after giving effect to such release, no Default or Event of Default has occurred and is continuing or would occur.

Section 2.11. Increased Costs. (a) If any Change in Law shall:

(i) impose, modify or deem applicable any reserve, special deposit or similar requirement (including any compulsory loan requirement, insurance charge or other assessment) against assets of, deposits with or for the account of, or credit extended by, any Lender;

(ii) impose on any Lender or the London interbank market any other condition, cost or expense (other than Taxes) affecting this Agreement or Advances made by such Lender or participation therein; or

(iii) subject any Lender Person to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described in clauses (b) or (c) of the definition of Excluded Taxes and (C) Connection Income Taxes) on its loans, loan principal, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto;

and the result of any of the foregoing shall be to increase the cost to such Lender or Administrative Agent of making or maintaining the Advances hereunder (or of maintaining its Commitment) or to reduce the amount of any sum received or receivable by such Lender or Administrative Agent hereunder (whether of principal, interest or otherwise), then Borrower will pay such Lender or Administrative Agent such additional amount or amounts as will compensate such Lender or Administrative Agent, as the case may be, for such additional costs actually incurred or reduction actually suffered.

(b) If any Lender determines that any Change in Law regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on such Lender’s capital or on the capital of such Lender’s holding company, if any, as a consequence of any Margin Loan Document, the Commitment of such Lender or the Advances made by such Lender, to a level below that which such Lender or such Lender’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s policies and the policies of such Lender’s holding company with respect to capital adequacy and liquidity), then from time to time Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender or such Lender’s holding company for any such reduction actually suffered.

(c) A certificate of a Lender setting forth in reasonable detail the amount or amounts necessary to compensate such Lender or its holding company, as the case may be, as specified in paragraph (a) or (b) of this Section shall be delivered to Borrower and shall be conclusive absent manifest error. Borrower shall pay such Lender the amount shown as due on any such certificate within 10 days after receipt thereof.

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(d) Failure or delay on the part of any Lender to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s right to demand such compensation; provided that Borrower shall not be required to compensate such Lender pursuant to this Section for any increased costs or reductions incurred more than 270 days prior to the date that such Lender notifies Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender’s intention to claim compensation therefor; and provided further that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 270-day period referred to above shall be extended to include the period of retroactive effect thereof.

(e) Notwithstanding the foregoing, if any Lender Person requests compensation under this Section 2.11 or Borrower must pay increased amounts or any amounts for Indemnified Taxes pursuant to Section 2.12, then the applicable Lender will, if requested by Borrower, use commercially reasonable efforts to designate another Lending Office for any Advance, or portion thereof, affected by the relevant event if such designation would avoid the requirement for or reduce the amount of such compensation, increased amounts or amounts for Indemnified Taxes; provided that such efforts need only be made on terms that, in the commercially reasonable judgment of such Lender, cause such Lender and its Lending Office(s) to suffer no material economic, legal or regulatory disadvantage; and provided further that nothing in this Section 2.11(e) shall affect or postpone any of the Obligations of Borrower or the rights of such Lender Person pursuant to Section 2.11(a) through (d) or Section 2.12. Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation.

(f) If any Lender requests compensation under this Section 2.11 or that Borrower pay increased amounts or any amount for Indemnified Taxes under Section 2.12, Borrower may, upon prior written notice to Administrative Agent in accordance with Section 2.10(a), terminate the Commitment of such Lender upon the prepayment in full of such Lender’s Applicable Percentage of the Total Accrued Loan Amount (including the Make Whole Amount, which for purposes of this Section 2.11(f) shall be calculated with regard to such Lender’s Commitment only) to Administrative Agent for the account of such Lender. For the avoidance of doubt, Section 2.14 shall apply to any such prepayment. Upon receipt of such prepayment, the Commitment of such Lender shall be irrevocably terminated and such Lender shall be deemed to no longer be a party to this Agreement or any Margin Loan Document, but for the avoidance of doubt provisions of any Margin Loan Document that by their express terms survive the termination of the Facility shall continue to apply with respect to such Lender.

(g) All of Borrower’s obligations under this Section 2.11 shall survive termination of the Facility and repayment of all other Obligations hereunder.

Section 2.12. Taxes.

(a) Any and all payments by or on account of any obligation of any Obligor under any Margin Loan Document shall be made without deduction or withholding for any Taxes, except

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as required by applicable law. If any applicable law (as determined in the good faith discretion of an applicable withholding agent) requires the deduction or withholding of any Tax from any such payment by a withholding agent, then the applicable withholding agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law and, if such Tax is an Indemnified Tax, then the sum payable by the applicable Obligor shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Section 2.12) the applicable Lender Person receives an amount equal to the sum it would have received had no such deduction or withholding been made.

(b) The applicable Obligor shall timely pay to the relevant Governmental Authority in accordance with applicable law, or at the option of Administrative Agent, timely reimburse it for the payment of, Other Taxes.

(c) As soon as reasonably practicable after any payment of Taxes by any Obligor to a Governmental Authority pursuant to this Section 2.12, such Obligor shall deliver to Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to Administrative Agent.

(d) The Obligors shall jointly and severally indemnify each Lender Person, within 10 days after written demand therefor accompanied by a certificate satisfying the requirements set forth below, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section) payable or paid by such Lender Person, or required to be withheld or deducted from a payment to such Lender Person, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to Borrower by such Lender Person (with a copy to Administrative Agent), or by Administrative Agent on behalf of such Lender Person, setting forth in reasonable detail the basis for calculating the additional amounts payable to the applicable Lender Person under this Section shall be conclusive absent manifest error.

(e) (i) If any Lender is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Margin Loan Document it shall deliver to Borrower and Administrative Agent, at the time or times reasonably requested by Borrower or Administrative Agent, such properly completed and executed documentation reasonably requested by Borrower or Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, if reasonably requested by Borrower or Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by Borrower or Administrative Agent as will enable Borrower or Administrative Agent to determine whether or not Lender is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of any such

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documentation other than such documentation set forth in Section 2.12(e)(ii)(A), (ii)(B) and (ii)(D) below requested by Borrower shall not be required if in Lender’s reasonable judgment such completion, execution or submission would subject Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of Lender.

(ii) Without limiting the generality of the foregoing,

(A) any Lender that is a U.S. Person shall deliver to Borrower and Administrative Agent on or prior to the date on which such Lender becomes Lender under this Agreement (and from time to time thereafter upon the reasonable request of Borrower or Administrative Agent), properly completed and executed originals of IRS Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding tax;

(B) any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to Borrower and Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes Lender under this Agreement (and from time to time thereafter upon the reasonable request of Borrower or Administrative Agent), whichever of the following is applicable:

(1) in the case of a Foreign Lender claiming the benefits of an income tax treaty to which the United States is a party (x) with respect to payments of interest under any Margin Loan Document, properly completed and executed originals of IRS Form W-8BEN establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “interest” article of such tax treaty and (y) with respect to any other applicable payments under any Margin Loan Document, properly completed and executed originals of IRS Form W-8BEN establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;

(2) properly completed and executed originals of IRS Form W-8ECI;

(3) in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate substantially in the form of Exhibit E-1 to the effect that such Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of Borrower within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and (y) properly completed and executed originals of IRS Form W-8BEN; or

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(4) to the extent a Foreign Lender is not the beneficial owner, properly completed and executed originals of IRS Form W-8IMY, accompanied by properly completed and executed IRS Form W-8ECI, IRS Form W-8BEN, a U.S. Tax Compliance Certificate substantially in the form of Exhibit E-2 or Exhibit E-3, IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that if the Foreign Lender is a partnership and one or more direct or indirect partners of such Foreign Lender are claiming the portfolio interest exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate substantially in the form of Exhibit E-4 on behalf of each such direct and indirect partner;

(C) any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to Borrower and Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes Lender under this Agreement (and from time to time thereafter upon the reasonable request of Borrower or Administrative Agent), executed originals of any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by applicable law to permit Borrower or Administrative Agent to determine the withholding or deduction required to be made; and

(D) if a payment made to a Lender under any Margin Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to Borrower and Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by Borrower or Administrative Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by Borrower or Administrative Agent as may be necessary for Borrower and Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment.

Each Lender agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify Borrower and Administrative Agent in writing of its legal inability to do so.

(f) If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 2.12 (including by the payment of additional amounts pursuant to this Section 2.12), it shall promptly pay to the indemnifying party an amount equal to such refund (but only to the extent of

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indemnity payments made under this Section 2.12 with respect to the Taxes giving rise to such refund), net of all reasonable out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this paragraph (f) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this paragraph (f), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this paragraph (f) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would have been in if the Tax subject to indemnification and giving rise to such refund had never been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid. This paragraph shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.

(g) Each Lender shall severally indemnify Administrative Agent, within 10 days after demand therefor, for (i) any Indemnified Taxes or Other Taxes attributable to such Lender (but only to the extent that any Obligor has not already indemnified Administrative Agent for such Indemnified Taxes or Other Taxes and without limiting the obligation of the Obligors to do so) and (ii) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by Administrative Agent in connection with any Margin Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Lender by Administrative Agent shall be conclusive absent manifest error. Each Lender hereby authorizes Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under any Margin Loan Document or otherwise payable by Administrative Agent to the Lender from any other source against any amount due to Administrative Agent under this paragraph (g).

(h) Each party’s obligations under this Section 2.12 shall survive the assignment of rights by, or the replacement of any Lender Person, the termination of the Commitment and the repayment, satisfaction or discharge of all obligations under any Margin Loan Document.

Section 2.13. Illegality. Notwithstanding any other provision of this Agreement, if any Lender shall notify Administrative Agent and Borrower that any Law makes it unlawful, or any Governmental Authority asserts that it is unlawful, for such Lender to perform its obligations to make or maintain Advances hereunder, the obligation of such Lender to make the Advances shall be terminated and all Advances, all interest thereon and all other amounts payable under this Agreement to such Lender shall become due and payable either on the last day of the then current Interest Period, if such Lender may lawfully continue to maintain the Advances to such day, or immediately, if such Lender may not lawfully continue to maintain the Advances.

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Section 2.14. Break-Funding. In the event of the payment of any principal of an Advance other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default), or the failure to borrow (for a reason other than the failure of Administrative Agent or a Lender to make such Advance), prepay any Advance on the date specified in any notice delivered pursuant hereto, then, in any such event, upon written demand of the applicable Lender, Borrower shall compensate each Lender for the loss, cost and expense (excluding loss of anticipated profits or margin) attributable to such event to the extent actually incurred by the applicable Lender. A certificate of Calculation Agent setting forth in reasonable detail any amount or amounts that each Lender is entitled to receive pursuant to this Section shall be delivered to Borrower and shall be conclusive absent manifest error. Borrower shall pay each Lender the amount shown as due on any such certificate within 10 days after receipt thereof. All of Borrower’s obligations under this Section 2.14 shall survive termination of the Facility or repayment of all other Obligations hereunder.

Section 2.15. Evidence Of Debt. (a) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of Borrower to such Lender resulting from each Advance made by such Lender from time to time, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.

(b) Administrative Agent shall maintain in accordance with its usual practice accounts in which it shall record (i) the amount of each Advance made hereunder and the Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from Borrower hereunder and (iii) the amount of any sum received by Administrative Agent hereunder for the account of the Lenders and each Lender’s share thereof.

(c) The entries maintained in the accounts maintained pursuant to Subsections (a) and (b) above shall be prima facie evidence of the existence and amounts of the obligations therein recorded; provided that the failure of any Lender or Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligation of Borrower to repay such obligations in accordance with their terms.

(d) No promissory note shall be required to evidence the Advances by any Lender to Borrower. Upon the request of any Lender, Borrower shall prepare, execute and deliver to such Lender a promissory note, payable to such Lender and its registered assigns and in a form approved by such Lender, which shall evidence the Advances to Borrower by such Lender in addition to such records. Thereafter, the Advances evidenced by such promissory note and interest thereon shall at all times be represented by one or more promissory notes in such form payable to the payee named therein and its registered assigns.

Section 2.16. Payments And Computations; Pro Rata Treatment; Sharing of Set-offs.

(a) All payments to be made by Borrower shall be made without condition or deduction for any counterclaim, defense, recoupment or setoff. Borrower shall make each payment hereunder not later than 1:00 p.m. on the day when due in Dollars to, except as otherwise expressly provided herein, Administrative Agent in immediately available funds. All

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payments received by Administrative Agent after 1:00 p.m. shall be deemed received on the next succeeding Business Day and any applicable interest or fee shall continue to accrue. All such payments shall be made to Administrative Agent at its offices as set forth on Schedule 9.02.

(b) Whenever any payment hereunder would be due on a day other than a Business Day, such payment shall be extended to the next succeeding Business Day, and such extension of time shall in such case be included in the computation of payment of interest or any fees, as the case may be.

(c) All payments (including prepayments and any other amounts received hereunder in connection with the exercise of Administrative Agent’s rights after an Event of Default) made by Borrower to Administrative Agent under any Margin Loan Document shall be applied to amounts then due and payable in the following order: (i) the Structuring Fee, if any; (ii) to any expenses and indemnities payable by Borrower to Administrative Agent or any Lender under any Margin Loan Document; (iii) to any accrued and unpaid interest and fees due under this Agreement; (iv) to principal payments on the outstanding Advances; and (v) to the extent of any excess, to the payment of all other Obligations under the Margin Loan Documents.

(d) If any Lender shall, by exercising any right of set-off or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Advances or other Obligations under the Margin Loan Documents resulting in such Lender receiving payment of a proportion of the aggregate amount of its Advances and accrued interest thereon or such other obligations greater than its pro rata share thereof as provided herein, then the Lender receiving such greater proportion shall (i) notify Administrative Agent of such fact, and (ii) purchase (for cash at face value) participations in the Advances and such other obligations of the other Lenders, or make such other adjustments that shall be equitable so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with their respective Applicable Percentages; provided that (A) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and (B) the provisions of this paragraph shall not be construed to apply to any payment made by Borrower pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Advances to any assignee or participant, other than to Guarantor or any Subsidiary thereof (as to which the provisions of this paragraph shall apply). Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against Borrower and Guarantor rights of set-off and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of Borrower or Guarantor in the amount of such participation.

(e) Unless Administrative Agent shall have received notice from Borrower prior to the date on which any payment is due to Administrative Agent for the account of the Lenders hereunder that Borrower will not make such payment, Administrative Agent may assume that Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders the amount due. In such event, if Borrower has not in

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fact made such payment, then each of the Lenders severally agrees to repay to Administrative Agent forthwith on demand the amount so distributed to such Lender with interest thereon, for each day from the date such amount is distributed to the date of payment to Administrative Agent, at the greater of the Federal Funds Effective Rate and a rate determined by Administrative Agent in accordance with banking industry rules on interbank compensation.

(f) If any Lender shall fail to make any payment required to be made by it pursuant to Sections 2.04(b), 2.16(e) and 9.04(f), then Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), apply any amount thereafter received by Administrative Agent for the account of such Lender to satisfy such Lender’s obligations under such Sections until all such unsatisfied obligations are fully paid.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES

Borrower represents and warrants to Administrative Agent and the Lenders that:

Section 3.01. Organization; Powers. Borrower is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, has all requisite power and authority to carry on its business as now conducted and, except as could not reasonably be expected to result in a Material Adverse Effect, is qualified to do business in, and is in good standing in, every jurisdiction where such qualification or good standing is required. All licenses, permits, approvals, concessions or other authorizations necessary for (i) the consummation of the Transaction and (ii) except where the failure to obtain and maintain any of the foregoing could not reasonably be expected to result in a Material Adverse Effect with respect to Borrower, the conduct of the business of Borrower, have been duly obtained and are in full force and effect.

Section 3.02. Authorization; Enforceability. The Transactions are within Borrower’s corporate powers, have been duly authorized by all necessary corporate and, if required, shareholder action. The Margin Loan Documents to which Borrower is a party have been duly executed and delivered by Borrower and constitute legal, valid and binding obligations of Borrower, enforceable in accordance with their terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

Section 3.03. Governmental Approvals; No Conflicts. The Transactions (a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except such as have been obtained or made and are in full force and effect and except for filings necessary to register and/or perfect Liens created pursuant to the Margin Loan Documents, (b) will not violate any Law applicable to Borrower, (c) will not violate or result in a default under any indenture, agreement or other instrument binding upon Borrower or its assets, or give rise to a right thereunder to require any payment to be made by Borrower, and (d) will not result in the creation or imposition of any Lien on any asset of Borrower, except Liens created pursuant to the Margin Loan Documents.

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Section 3.04. Financial Condition; No Material Adverse Change.

(a) Borrower has heretofore furnished to Administrative Agent the Borrower Financial Statements, if any, and the Guarantor Financial Statements. Such financial statements present fairly, in all material respects, the financial position and results of operations and cash flows of Borrower or Guarantor, as applicable, as of such dates and for such periods in accordance with GAAP, subject to year-end audit adjustments and show all material indebtedness and other liabilities, direct or contingent, of Borrower or Guarantor, as applicable, as of the date thereof, including liabilities for taxes, material commitments and Indebtedness.

(b) As of any date, no event, change or condition has occurred that has had, or could reasonably be expected to have, a Material Adverse Effect with respect to Guarantor, since the date of the last financial statements delivered pursuant to Section 4.01(a)(x) or Section 5.01, as applicable, with respect to Guarantor.

Section 3.05. Litigation Matters. There are no actions, suits or proceedings by or before any arbitrator or Governmental Authority pending against or, to the knowledge of Borrower, threatened in writing against or affecting Borrower (i) as to which there is a reasonable possibility of an adverse determination and that, if adversely determined, could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect with respect to Borrower or (ii) that involve this Agreement or the Transactions.

Section 3.06. Compliance With Laws And Agreements. Borrower is in compliance with the requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to its properties, except in such instances in which (i) such requirement of Law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligently conducted or (ii) the failure to comply therewith, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect with respect to any Person. Borrower is in compliance with its reporting obligations under Sections 13 and 16 of the Exchange Act, including in respect of the transactions contemplated hereunder. No Default exists and no Event of Default has occurred, other than those that have been waived or deemed not to have occurred pursuant to the last sentence of Section 7.01.

Section 3.07. Investment Company Status. Borrower is not and, after giving effect to the contemplated Transactions, will not be required to register as an “investment company” and is not a Person “controlled by” an “investment company,” as such terms are defined in the United States Investment Company Act of 1940.

Section 3.08. Taxes. Borrower has timely filed all income tax returns and other material tax returns that are required to be filed by it in all jurisdictions and has paid all taxes, assessments, claims, governmental charges or levies imposed on it or its properties, except for Taxes contested in good faith by appropriate proceedings diligently conducted and as to which adequate reserves have been provided in accordance with GAAP. There is no proposed tax assessment against Borrower that would, if made, have a Material Adverse Effect with respect to any Cross-Default Person. Prior to any request for a Borrowing pursuant to Section 2.03,

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Borrower will elect to be disregarded as an entity separate from its owner for U.S. federal income tax purposes, which election will be valid and effective as of its formation, and its regarded owner for U.S. federal income tax purposes will be a “foreign corporation” (within the meaning of Section 7701(a)(5) of the Code). Borrower does not have, and has never had, a trade or business or a permanent establishment in any country other than the country of its organization.

Section 3.09. Disclosure. Borrower has disclosed to Administrative Agent all agreements, instruments and corporate or other restrictions to which it is subject, and all other matters known to it, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect with respect to Borrower. All information provided with respect to Borrower and its Affiliates by or on behalf of Borrower to Administrative Agent in connection with the negotiation, execution and delivery of this Agreement and the other Margin Loan Documents or the transactions contemplated hereby and thereby, taken as a whole, was or will be, on or as of the applicable date of provision thereof, taken as a whole, complete and correct in all material respects and did not (or will not) contain any material misstatement of fact or omit to state a material fact necessary to make the statements contained therein not materially misleading in light of the circumstances under which such statements were made.

Section 3.10. Material Agreements. Borrower is not in default under any provision of any material agreement or instrument to which Borrower is a party or by which Borrower or any of its properties or assets is bound that could reasonably be expected to result in a Material Adverse Effect with respect to Borrower.

Section 3.11. Solvency. Each of Borrower and Guarantor is, and upon the incurrence of any Obligations by Borrower on any date on which this representation and warranty is made or deemed made, will be, Solvent.

Section 3.12. Trading And Other Restrictions.

(a) Borrower is the direct, sole beneficial owner and sole holder of record of all Collateral.

(b) Borrower’s holding period (as determined in accordance with Rule 144) as to the Collateral Shares began more than one year prior to the date hereof.

(c) The Collateral Shares constituting Eligible Collateral (i) are not subject to any restrictions on transfer or pledge that affect the ability of any Obligor to consummate any of the Transactions contemplated by the Margin Loan Documents or the ability of Administrative Agent, Collateral Agent or any Lender to exercise any remedies contemplated by the Margin Loan Documents, other than Existing Transfer Restrictions, (ii) do not contain any legends on the certificates therefor or other similar types of restrictions on such Shares, and do not require any opinions from Issuer’s counsel, or the removal of any “stop transfer order” prior to the sale of such Shares, (iii) are not subject to any shareholders agreement, investor rights agreements, or any other similar agreements or any voting or other contractual restrictions that affect the ability

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of any Obligor to consummate any of the Transactions contemplated by the Margin Loan Documents or the ability of Administrative Agent, Collateral Agent or any Lender to exercise any remedies contemplated by the Margin Loan Documents and (iv) have been duly authorized and validly issued and are fully paid and non-assessable.

Section 3.13. Capitalization and Subsidiaries. Borrower has no Subsidiaries. Schedule 3.13 sets forth a true and complete listing of each class of each of Borrower’s authorized Equity Interests, of which all of such issued shares are validly issued, outstanding, fully paid and non-assessable, and owned beneficially and of record by the Persons identified on Schedule 3.13.

Section 3.14. Patriot Act; Sanctioned Persons.

(a) Borrower is not an “enemy” or an “ally of the enemy” within the meaning of Section 2 of the Trading with the Enemy Act of the United States of America (50 U.S.C. App. § 1 et seq.), as amended. Borrower and each of its Affiliates is in compliance, in all material respects, with (i) the Trading with the Enemy Act, as amended, and (ii) the Act, to the extent that any such Act is applicable to it. No part of the proceeds of any Advance will be used, directly or indirectly, for any payments to any governmental official or governmental employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity on behalf of a government, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended.

(b) Neither Borrower nor Guarantor is a Person that is (i) the subject of any sanctions (A) administered by the U.S. Department of the Treasury’s Office of Foreign Assets Control, the United Nations Security Council, the European Union, Her Majesty’s Treasury, or other relevant sanctions authority or (B) pursuant to the U.S. Iran Sanctions Act, as amended (collectively, the “Sanctions”) , nor (ii) located, organized or resident in a country or territory that is the subject of Sanctions (including, without limitation, Burma/Myanmar, Cuba, Iran, Libya, North Korea, Sudan and Syria). No part of the proceeds of any extension of credit hereunder will be used, directly or indirectly (i) to fund any activities or business of or with any Person, or in any country or territory, that, at the time of such funding, is the subject of Sanctions, or (ii) in any other manner that would result in a violation of Sanctions by any Person (including any Person participating in the Facility, whether as lender, underwriter, advisor, investor, or otherwise). Neither Borrower nor Guarantor has, in the past five years, knowingly engaged in, is now knowingly engaged in, or will engage in, any dealings or transactions with any Person, or in any country or territory, that at the time of the dealing or transaction is or was the subject of Sanctions.

Section 3.15. Material Nonpublic Information. Borrower is not in possession of any adverse Material Nonpublic Information with respect to either Issuer or either of the Shares.

Section 3.16. Restricted Transactions. As of the Closing Date, Borrower is not a party to any Restricted Transactions in respect of Borrower.

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Section 3.17. Conduct of Business. Borrower is not engaged in any business other than as described in Section 6.03.

Section 3.18. Ownership of Property; Ownership of Shares. As of the Closing Date, Borrower owns directly 11,250,000 TGP Shares and 11,250,000 TOO Shares, and has no other material assets.

Section 3.19. No Sovereign Immunity. Neither Borrower nor any of its assets or properties has any right of immunity on the grounds of sovereignty from jurisdiction of any court or from setoff or any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) under the Law of any jurisdiction.

ARTICLE 4

CONDITIONS OF LENDING

Section 4.01. Conditions Precedent to First Borrowing. The obligation of each Lender to make an Advance on the occasion of the first Borrowing hereunder is subject to satisfaction or waiver of the following conditions precedent:

(a) Administrative Agent shall have received each of the following documents, duly executed, each dated on or prior to the Closing Date, in each case, in form and substance reasonably satisfactory to Administrative Agent and each of the Lenders:

(i) duly executed counterparts of this Agreement, the Security Agreement, the Control Agreement and the Guarantee Agreement;

(ii) a UCC financing statement in appropriate form for filing with the Recorder of Deeds in the District of Columbia;

(iii) (x) certificate of Borrower, dated on or prior to the Closing Date and executed by any Director, Officer or the Secretary, which shall (A) certify the resolutions of its Board of Directors, members or other body authorizing the execution, delivery and performance of the Margin Loan Documents to which it is a party, (B) identify by name and title the Responsible Officers, and (C) contain appropriate attachments, including the Organization Documents of Borrower (which shall be substantially in the form of Exhibit K attached hereto), certified by the relevant authority of the jurisdiction of organization of Borrower, and a Certificate of Compliance for Borrower, from its jurisdiction of organization; and (y) incumbency certificate, which shall identify by name and title and bear the signatures of the Responsible Officers authorized to sign the Margin Loan Documents;

(iv) (x) certificate of Guarantor, dated on or prior to the Closing Date and executed by its Secretary, which shall (A) certify the resolutions of its Board of Directors authorizing the execution, delivery and performance of the Margin Loan Documents to

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which it is a party, (B) identify by name and title of the Responsible Officers, and (C) contain appropriate attachments, including the Organization Documents of Guarantor, and a Certificate of Goodstanding for Guarantor, from its jurisdiction of organization; and (y) incumbency certificate, which shall identify by name and title and bear the signatures of the Responsible Officers authorized to sign the Margin Loan Documents;

(v) a solvency certificate from a Responsible Officer for each of Borrower and Guarantor;

(vi) legal opinion of Latham & Watkins LLP, special New York counsel to Borrower and Guarantor; legal opinion of Alexanders, Bermuda counsel to Borrower; legal opinion of Watson, Farley & Williams (New York) LLP, special Marshall Islands counsel to Guarantor; each substantially in the form of exhibits to this Agreement;

(vii) for each Obligor, the results of a recent lien search in such Obligor’s jurisdiction of organization and, if different, such Obligor’s “location” (determined as provided in UCC Section 9-307) and each of the jurisdictions where assets of such Obligor are located, and, in the case of Borrower, such search shall reveal no liens on any of the assets of Borrower except for liens permitted by Section 6.02 or discharged on or prior to the Closing Date pursuant to a pay-off letter or other documentation satisfactory to Lender.

(viii) completed FRB Forms U-1 with respect to the Facility duly executed by Borrower;

(ix) the most recent account statements of Borrower with respect to each asset owned by Borrower, to the extent any such account statements have been prepared, and a certificate of a Responsible Officer, dated as of the Closing Date, (A) certifying that the aforementioned account statements, if any, are true, correct and complete and (B) containing a list of all Indebtedness, tax liabilities and/or commitments of Borrower, a description of the material terms of each item on such list (including the amount of any liability thereunder, whether contingent, direct or otherwise, the due date for each such liability, the total unfunded commitment, if any, and the rate of interest, if any, applicable thereto) and a certification that such list is true, correct and complete and that Borrower has no other Indebtedness, tax liabilities or commitments other than those set forth on such list (the “Borrower Financial Statements”);

(x) (w) audited consolidated financial statements of Guarantor for the 2009, 2010, and 2011 fiscal years, (x) unaudited interim consolidated financial statements of Guarantor for each fiscal quarter ended after the date of the latest applicable financial statements delivered pursuant to clause (w) of this paragraph as to which such financial statements are available, and (y) a certificate of a Responsible Officer of Guarantor, dated as of the Closing Date, (A) certifying, in the case of the financial statements delivered under clause (x) above, as presenting fairly in all material respects the financial condition and results of operations of Guarantor in accordance with GAAP consistently applied,

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subject to normal year-end audit adjustments and (B) certifying as to whether a Default has occurred and, if a Default has occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto (the “Guarantor Financial Statements”);

(xi) evidence that each of Borrower and Guarantor has duly appointed a process agent in New York City to accept such service of any and all writs, process and summonses for any action arising out of this Agreement or any other Margin Loan Document; and

(xii) an Issuer Acknowledgement executed by each Issuer.

(b) The Collateral Account shall have been established by Borrower, and the Collateral Shares shall have been credited to the Collateral Account free from all Transfer Restrictions (other than Existing Transfer Restrictions) by book-entry transfer through DTC, as depositary.

(c) Immediately prior to such Borrowing, the quotient of (i) the aggregate amount of the Commitments of all Lenders hereunder divided by (ii) the Share Collateral Value shall be equal to or less than the Initial LTV Ratio.

(d) The Basket Ratio Requirement shall be satisfied at the time of such Borrowing.

(e) All documented fees required to be paid under the Margin Loan Documents on or before the Closing Date, including the Structuring Fee and Lender Expenses invoiced prior to the Closing Date, shall have been paid.

(f) No Change in Law shall have occurred and be continuing that, after giving effect to such Borrowing, would result in Borrower being obligated to compensate Administrative Agent or any Lender with respect to such Change in Law pursuant to the terms of Section 2.11.

Section 4.02. Conditions Precedent To Each Advance. The obligation of each Lender to make any Advance on the occasion of any Borrowing (including the first Borrowing hereunder) shall be subject to the following further conditions precedent:

(a) Each of the representations and warranties of Borrower and Guarantor contained in Article 3 or in any other Margin Loan Document shall be true and correct in all material respects on and as of the date of such Borrowing, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct in all material respects as of such earlier date;

(b) Since the date of the last financial statements delivered pursuant to Section 4.01(a)(x) or Section 5.01, as applicable, with respect to Guarantor, no event or condition has resulted in, or could be reasonably expected to cause, either individually or in the aggregate, a Material Adverse Effect with respect to Guarantor;

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(c) Borrower shall have delivered a Borrowing Notice in accordance with the requirements hereof;

(d) Immediately after giving effect to such Borrowing, the LTV Ratio shall not exceed the Initial LTV Ratio;

(e) No Default or Event of Default shall have occurred and be continuing, or would result from such Borrowing or from the application of the proceeds therefrom;

(f) Borrower shall not have provided notice of termination of the Commitments; and

(g) The Collateral Requirement shall have been satisfied.

ARTICLE 5

AFFIRMATIVE COVENANTS OF BORROWER

On and after the Closing Date and so long as any Lender has a commitment to make an Advance or any Obligations (other than indemnification obligations for which no claim has accrued or been asserted) remain outstanding:

Section 5.01. Financial Statements. Borrower will furnish to Administrative Agent or cause to be furnished to Administrative Agent:

(a) within 120 days after the end of each fiscal year of each Obligor, such Obligor’s audited consolidated balance sheet and related statements of operations, stockholders’ equity and cash flows as of the end of and for such year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on by independent public accountants of recognized national standing (without a “going concern” or like qualification or exception and without any qualification or exception as to the scope of such audit) to the effect that such consolidated financial statements present fairly in all material respects the financial condition and results of operations of such Obligor in accordance with GAAP consistently applied, accompanied by any management letter prepared by said accountants; provided that Borrower shall have no obligation under this clause to provide any such financial statements, certificates or reports except to the extent Borrower has then prepared such items for its own internal use;

(b) within 90 days after the end of each of the first three fiscal quarters of each Obligor, such Obligor’s consolidated balance sheet and related statements of operations, stockholders’ equity and cash flows as of the end of and for such fiscal quarter and the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year, all certified by one of such Obligor’s Responsible Officers as presenting fairly in all material respects the financial condition and results of operations of such Obligor in accordance with GAAP consistently applied, subject to normal year-end audit adjustments; provided that Borrower shall have no obligation under this clause to provide any such financial statements, certificates or reports except to the extent Borrower has then prepared such items for its own internal use;

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(c) concurrently with any delivery of financial statements under clause (a) or (b) above, a certificate of a Responsible Officer of the applicable Obligor (or, in the case of Borrower, a Responsible Officer of Guarantor) (x) certifying, in the case of the financial statements delivered under clause (b), as presenting fairly in all material respects the financial condition and results of operations of such Obligor in accordance with GAAP consistently applied, subject to normal year-end audit adjustments, and (y) certifying as to whether a Default has occurred and, if a Default has occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto;

(d) In addition, Borrower shall promptly furnish to Administrative Agent such additional information regarding the business, financial or corporate affairs of Borrower or Guarantor, or compliance with the terms of the Margin Loan Documents, as Administrative Agent may from time to time reasonably request.

Section 5.02. Notices Of Material Events. Borrower shall furnish to Administrative Agent or cause to be furnished to Administrative Agent notice, as promptly as reasonably practicable after obtaining actual knowledge, of:

(a) the occurrence of (i) any Default, Potential Facility Amendment Event or Redocumentation Event or (ii) any matter that has resulted or could reasonably be expected to result in a Material Adverse Effect with respect to either Borrower or Guarantor, including the receipt of any notice of any governmental investigation or any litigation commenced or threatened against Borrower or Guarantor;

(b) the occurrence of a Change of Control of Borrower or an Issuer;

(c) any Lien (other than Permitted Liens) or claim made or asserted against any of the Other Collateral, if any;

(d) any material loss, damage, or destruction to any Other Collateral, if any, whether or not covered by insurance.

Each notice delivered under this Section shall be accompanied by a statement of a Responsible Officer of Borrower setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.

Section 5.03. Existence; Conduct Of Business. Borrower shall do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence and the rights, qualifications, licenses, permits, franchises and governmental authorizations material to the conduct of its business, and maintain all requisite authority to conduct its business in each jurisdiction in which its business is conducted.

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Section 5.04. Payment Of Taxes. Borrower shall pay and discharge as and when the same shall become due and payable, all material Taxes imposed upon it or upon its property, except where (a) the validity or amount thereof is being diligently contested in good faith and by appropriate proceedings, (b) Borrower has set aside on its books appropriate reserves with respect thereto in accordance with GAAP and (c) in the case of any liabilities which have or may become or result in a Lien upon any Collateral, none of the Collateral is subject to unstayed proceedings to sell such Collateral.

Section 5.05. Compliance With Laws. Borrower shall comply in all material respects with the requirements of all applicable material Laws and all material orders, writs, injunctions and decrees applicable to it or its property.

Section 5.06. Compliance With Exchange Act Requirements. Borrower shall promptly comply with its reporting obligations under Sections 13 and 16 of the Exchange Act in respect of the transactions contemplated hereunder, and Borrower shall give prior notice to Administrative Agent of any public filing of or relating to the Margin Loan Documents and provide Administrative Agent with a copy of any such report at least one Business Day prior to the filing thereof.

Section 5.07. Further Assurances. As promptly as reasonably practicable upon the request of Administrative Agent, Borrower shall execute and/or deliver any additional agreements, documents and instruments, and take such further actions as Administrative Agent may reasonably deem necessary or desirable (a) to assure Collateral Agent is perfected with a first priority Lien on the Collateral and (b) to carry out the provisions and purposes of the Margin Loan Documents. Such agreements, documents or instruments or actions shall be reasonably satisfactory to Administrative Agent.

Section 5.08. Books And Records. Borrower shall keep proper books of record and account in which full, true and correct entries are made of all dealings and transactions in relation to its business and activities.

Section 5.09. Maintenance of Separateness. Borrower shall:

(a) maintain its own separate books and records and bank accounts;

(b) at all times conduct its business solely in its own name and in a manner not misleading to third parties as to its identity (including through the use of separate stationary or letterhead);

(c) not commingle its assets with the assets of any other Person and hold its assets in its own name;

(d) comply strictly with any organization formalities to maintain its separate existence;

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(e) pay its own liabilities out of its own funds (after giving effect to any intercompany loans or additional investments, directly or indirectly, by Guarantor permitted under the Margin Loan Documents);

(f) maintain an arm’s-length relationship with its Affiliates and enter into transactions with Affiliates only on a commercially reasonable basis and on terms similar to those of an arm’s-length transaction (except to the extent that Borrower may enter into any contract or any other affiliate transaction permitted under the Margin Loan Documents, including making Permitted Investments);

(g) maintain adequate capital appropriate to the contemplated business purpose, transactions and liabilities of Borrower; provided that Guarantor, as the ultimate beneficial owner, shall not be required to make any additional capital contributions to the Company except as required by, or occurring in connection with, the guarantee by Guarantor in favor of Administrative Agent and the Lenders;

(h) cause the directors, officers, agents and other representatives of Borrower to act at all times with respect to Borrower consistently and in furtherance of the foregoing and in the best interests of Borrower;

(i) not identify itself as a division of any other Person and use reasonable efforts to correct any known misunderstanding regarding the separate identity of Borrower; and

(j) any financial statements maintained by Borrower shall show its assets and liabilities separate and apart from those of any other Person.

Section 5.10. Use Of Proceeds. Borrower shall use the proceeds of the Advances for general corporate purposes, including Restricted Payments and Permitted Investments.

ARTICLE 6

NEGATIVE COVENANTS

On and after the Closing Date and so long as any Lender has a commitment to make an Advance or any Obligations (other than indemnification obligations for which no claim has accrued or been asserted) remain outstanding:

Section 6.01. Indebtedness. Borrower shall not create, incur, assume or suffer to exist any Indebtedness, other than the Obligations under the Margin Loan Documents.

Section 6.02. Liens. Borrower shall not create, incur, assume or suffer to exist any Lien upon the Collateral or any other property or asset, whether now owned or hereafter acquired, other than Permitted Liens.

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Section 6.03. Fundamental Changes.

(a) Borrower shall not (i) engage in any activity other than (x) acquiring and holding the Shares, and activities incidental thereto or otherwise contemplated herein, (y) issuing Equity Interests, accepting capital contributions and activities incidental to any of the foregoing or (z) making Permitted Investments and activities incidental thereto; (ii) acquire or own any material assets other than the Shares, Cash, Cash Equivalents and Other Collateral, and property incidental thereto; (iii) own any material assets that are not held in the Collateral Account, (iv) engage in any business other than businesses of the type conducted by Borrower on the date of execution of this Agreement and businesses reasonably related thereto; or (v) change its capital structure to include any interests other than a single class of equity interests.

Section 6.04. Asset Sales. Borrower shall not sell, transfer, lease or otherwise dispose of any asset; provided that Borrower may sell or transfer assets for cash (not on an installment basis) to any direct or indirect Subsidiary of Guarantor in an arm’s-length transaction.

Section 6.05. Investments And Acquisitions. Other than Shares, Cash, Cash Equivalents, Other Collateral or Permitted Investments, Borrower shall not purchase, hold or acquire (including pursuant to any merger) any capital stock, evidences of indebtedness or other securities (including any option, warrant or other right to acquire any of the foregoing) of, make or permit to exist any loans or advances to, Guarantee any obligations of, or make or permit to exist any investment or any other interest in, any other Person, or purchase or otherwise acquire (in one transaction or a series of transactions) any assets of any other Person constituting a business unit (whether through purchase of assets, merger or otherwise).

Section 6.06. Restricted Payments. Borrower shall not declare or make, or agree to pay or make, directly or indirectly, any Restricted Payments with respect to Borrower, or incur any obligation to do so other than, so long as no Event of Default exists and is continuing, Restricted Payments of assets and properties not required to be held as Collateral under the Margin Loan Documentation.

Section 6.07. Investment Company. Borrower shall not become an “investment company” or a Person “controlled by” an “investment company,” as such terms are defined in the United States Investment Company Act of 1940.

Section 6.08. No Amendment Of Organization Documents, Etc. Borrower shall not consent to any material amendment, supplement or other modification of any of the terms or provisions of its Organization Documents, unless consented to by Administrative Agent (such consent not to be unreasonably withheld, conditioned or delayed); provided that an amendment, supplement or modification of the terms and provisions of Borrower’s Organization Documents to effect the replacement of a director or officer of Borrower may be made without Administrative Agent’s consent.

Section 6.09. Formation Of Subsidiaries. Borrower shall not form, create, organize, incorporate or acquire any Subsidiaries.

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Section 6.10. Restricted Transaction. Neither Borrower nor Guarantor shall enter into, or agree to enter into, any Restricted Transaction.

Section 6.11. No Impairment of Collateral Shares. Borrower shall not take any action that would materially impair the value of the Collateral Shares relative to the value of the Shares generally or impair Collateral Agent’s security interest therein or its ability to sell or otherwise realize against such Collateral Shares.

Section 6.12. Tax Status. Borrower shall not change its status for U.S. federal income tax purposes unless Administrative Agent shall have provided its prior written consent to such change, which consent shall not be unreasonably withheld, conditioned or delayed, and at all times that it is disregarded as an entity separate from its owner for U.S. federal income tax purposes it will have a “foreign corporation” (within the meaning of Section 7701(a)(5) of the Code) as its regarded owner for U.S. federal income tax purposes.

Section 6.13. Use Of Proceeds. Borrower shall not use the proceeds of any Advance, whether directly or indirectly, and whether immediately, incidentally or ultimately, to purchase or carry (within the meaning of Regulation U of the FRB) Margin Stock or to extend credit to others for the purpose of purchasing or carrying Margin Stock or to refund indebtedness originally incurred for such purpose in each case in violation of Regulation U of the FRB, or otherwise use any such proceeds, in each case in contravention of any Law or any Margin Loan Document.

Section 6.14. Provision Of Public Information. Notwithstanding anything to the contrary in the Margin Loan Documents, Borrower shall use good faith efforts not to provide to any employee or agent on the “public” side of the internal information wall (such internal information wall, the “Wall” and each such employee or agent, a “public side person”) of Administrative Agent, any Lender or any of their respective Affiliates any Material Nonpublic Information with respect to either Issuer, their Subsidiaries or their securities in any document or notice required to be delivered pursuant to this Agreement or communication in connection with this Agreement (each a “Communication”). Borrower shall be deemed to have represented that any such Communication addressed or directed by Borrower or any Affiliate of Borrower to, or that Borrower or such Affiliate believes or should reasonably believe is likely be received by, any public side person contains no such Material Nonpublic Information. If at any time, Borrower is unable to make the representation required under the immediately preceding sentence, it shall use its reasonable best efforts to put itself in a position of being able to provide such a representation as promptly as practicable. If any public side person at Administrative Agent or any Lender or any of their Affiliates (each a “Lender Party”) receives from Borrower or any Affiliate of Borrower any Material Nonpublic Information at any time, such Lender Party shall use reasonable efforts to bring such public side person over to the “private” side of such Wall with respect to such Material Nonpublic Information. If, notwithstanding such efforts, Administrative Agent, such Lender Party or the related Lender, as applicable, reasonably determines, based on the advice of counsel, that awareness of such Material Nonpublic Information could impair the ability of Administrative Agent, Collateral Agent or any Lender to exercise any of its remedies under any Margin Loan Document, such Lender Party may, solely in

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connection with the exercise of its remedies under Section 9 of the Security Agreement with respect to the TGP Shares or TOO Shares, as applicable, and with prior notice to Borrower, disclose such Material Nonpublic Information publicly, to any potential purchaser of the Collateral or to any other Person in order to remedy such impairment. For the avoidance of doubt, no communication (i) between Borrower and any employee or agent of Administrative Agent, any Lender or any of their respective Affiliates on the “private” side of the Wall of Administrative Agent, such Lender or such Affiliate or (ii) to any employee or agent of Administrative Agent, any Lender or any of their respective Affiliates initiated or solicited by that employee or agent, shall in either case be deemed to violate the provisions of this Section 6.14.

ARTICLE 7

EVENTS OF DEFAULT

Section 7.01. Events Of Default. If any of the following events (“Events of Default”) shall occur:

(a) Borrower shall fail to pay any principal of any Advance or Make Whole Amount when and as the same shall become due and payable, whether at the due date thereof or a date fixed for prepayment thereof or otherwise; provided that if Borrower can demonstrate to the reasonable satisfaction of Administrative Agent that all necessary instructions were given to effect such payment and the non-receipt thereof is attributable solely to an error in the banking system, such payment shall instead be deemed to be due and payable, solely for the purposes of this paragraph, within 3 Business Days of the originally scheduled due date for such payment;

(b) Borrower shall fail to pay any interest on any Advance or any fee or any other amount (other than an amount referred to in Section 7.01) payable under this Agreement, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of five Business Days;

(c) any representation or warranty made or deemed made by or on behalf of Borrower or Guarantor herein or in any Margin Loan Document or any amendment or modification thereof or waiver thereunder, or in any report, certificate, financial statement or other document furnished pursuant to or in connection with this Agreement or any Margin Loan Document or any amendment or modification thereof or waiver thereunder, shall prove to have been materially incorrect when made or deemed made;

(d) Borrower or Guarantor shall fail to perform or observe any covenant, condition or agreement applicable to it in Section 5.02, 5.03, 5.04, 5.05, 5.06, 5.09 or Article 6 (but excluding Section 6.14) of this Agreement or any other Margin Loan Document;

(e) Borrower or Guarantor shall fail to observe or perform any covenant, condition or agreement in this Agreement or any other Margin Loan Document other than any such covenant, condition or agreement, referred to in any other Section of this Section 7.01 and such failure shall not have been remedied or waived within 30 days of receipt by Borrower and Guarantor of written notice from Administrative Agent of such Default.

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(f) (i) any event or condition shall occur that results in any Material Indebtedness of any Cross-Default Person becoming due prior to its scheduled maturity or that enables or permits (with or without the giving of notice, the lapse of time or both) the holder or holders of any such Material Indebtedness or any trustee or agent on its or their behalf to cause any such Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity, provided that this clause shall not apply to secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness; or (ii) there shall occur under any Swap Contract to which any Cross-Default Person is a party an early termination date (howsoever defined in such Swap Contract) resulting from any event of default (howsoever defined in such Swap Contract) under such Swap Contract as to which any Cross-Default Person is the defaulting party (howsoever defined in such Swap Contract) and the Swap Termination Value owed by such Cross-Default Person as a result thereof is greater than the Threshold Amount, and in each case of clause (i) or (ii) such failure or occurrence shall continue unremedied for a period of two Business Days;

(g) (i) Borrower, Guarantor, an Issuer or any Material Subsidiary of Borrower, Guarantor or an Issuer shall become unable or admit in writing its inability or shall fail generally to pay its debts as they become due; (ii) Borrower, Guarantor, an Issuer or any Material Subsidiary of Borrower, Guarantor or an Issuer shall institute or consent to the institution of any proceeding under any Debtor Relief Law, or shall make an assignment for the benefit of creditors, or shall apply for or consent to the appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer for it or for all or any material part of its property; (iii) any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer shall be appointed without the application or consent of Borrower, Guarantor, an Issuer or any Material Subsidiary of Borrower, Guarantor or an Issuer and the appointment continues undischarged or unstayed for ninety (90) calendar days; (iv) any proceeding under any Debtor Relief Law relating to Borrower, Guarantor, an Issuer or any Material Subsidiary of Borrower, Guarantor or an Issuer or to all or any material part of the property of Borrower, Guarantor, an Issuer or any Material Subsidiary of Borrower, Guarantor or an Issuer shall be instituted without the consent of such Person, as the case may be, and continues undismissed or unstayed for ninety (90) calendar days, or an order for relief is entered in any such proceeding; or (v) Borrower, Guarantor, an Issuer or any Material Subsidiary of Borrower, Guarantor or an Issuer shall take any action to authorize any of the actions set forth above in this Section;

(h) (i) any material provision of any Margin Loan Document for any reason ceases to be valid, binding and enforceable in accordance with its terms or (ii) Borrower or Guarantor shall challenge the enforceability of any Margin Loan Document or shall assert in writing, or engage in any action or inaction based on any such assertion, that any provision of any of the Margin Loan Documents has ceased to be or otherwise is not valid, binding and enforceable in accordance with its terms;

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(i) (i) the Security Agreement shall for any reason fail to create a valid and perfected first priority Lien in the Collateral, except as permitted by the terms thereof, the Security Agreement shall fail to remain in full force or effect or Collateral Agent ceases to have a first priority perfected Lien in the Collateral or (ii) Borrower or Guarantor shall take any action to discontinue or assert in writing the invalidity or unenforceability of the Security Agreement, or Borrower or Guarantor shall fail to comply with any of the terms or provisions of the Security Agreement;

(j) any money judgment, writ or warrant of attachment or similar process in excess of the Threshold Amount shall be entered or filed against Borrower or Guarantor on any of their respective Assets and shall remain undischarged, unvacated, unbonded or unstayed for a period of 30 (thirty) days;

(k) there shall occur a change in the assets of Guarantor such that Guarantor has no material assets other than its indirect ownership interest in Borrower;

(l) the number of shares of TGP Shares or TOO Shares constituting Collateral Shares shall represent more than 19.9% of the number of outstanding TGP Shares or TOO Shares, as the case may be, for a period of ten consecutive Business Days;

(m) any Governmental Authority shall condemn, nationalize, seize or otherwise expropriate all or any substantial part of the property, shares of capital stock or equity or other assets of any Guarantor and its Subsidiaries taken as a whole or either Issuer and its Subsidiaries taken as a whole;

(n) there shall occur a Change of Control with respect to Borrower or an Issuer, and such Change of Control shall continue for three Business Days; or

(o) there shall occur a Preliminary Share Collateral Trigger Event; provided that such Preliminary Share Collateral Trigger Event will not constitute an Event of Default if within the applicable Preliminary Share Collateral Trigger Event Grace Period, Borrower prepays outstanding Borrowings pursuant to Section 2.10(a) and/or pledges additional Eligible Collateral pursuant to Section 2.10(c) such that immediately after giving effect to such prepayments and/or pledge the LTV Ratio is equal to or less than the Initial LTV Ratio;

then, and in any such event, and at any time thereafter during the continuance of such event, Administrative Agent shall, at the request of Lenders having aggregate Applicable Percentages equal to or in excess of 50% at such time, by written notice to Borrower, take either or both of the following actions, at the same or different times: (i) declare the Total Accrued Loan Amount to be forthwith due and payable, whereupon the Total Accrued Loan Amount (including the applicable Make Whole Amount, if any, payable to Administrative Agent for the account of each Lender pursuant to Section 2.08(c)) shall become and be forthwith due and payable, without presentment, demand, protest or notice of any kind, all of which are hereby expressly waived by Borrower and (ii) declare the Commitments to be terminated, whereupon the same shall forthwith terminate; provided that upon the occurrence in respect of Borrower of any event of the

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type described in Section 7.01(g), (x) the Total Accrued Loan Amount shall automatically become and be due and payable, without presentment, demand, protest or any notice of any kind, all of which are hereby expressly waived by Borrower and (y) the Commitments shall automatically be terminated. Upon the occurrence and the continuance of an Event of Default, Lender may exercise any rights and remedies provided to Administrative Agent and the Lenders under the Margin Loan Document or at law or equity, including all remedies provided under the UCC.

ARTICLE 8

ADMINISTRATIVE AGENT

Section 8.01. Administrative Agent.

Each of the Lenders hereby irrevocably appoints Administrative Agent as its agent and authorizes Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to Administrative Agent by the terms hereof, together with such actions and powers as are reasonably incidental thereto.

The Person serving as Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as Administrative Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with Borrower, Guarantor or any Subsidiary or other Affiliate thereof as if such Person were not Administrative Agent hereunder and without any duty to account therefor to the Lenders.

Administrative Agent shall not have any duties or obligations except those expressly set forth herein. Without limiting the generality of the foregoing, (a) Administrative Agent shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing, (b) Administrative Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby that Administrative Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for elsewhere in this agreement), provided that Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose Administrative Agent to liability or that is contrary to this Agreement, the other Margin Loan Documents or applicable law, and (c) except as expressly set forth herein, Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to Borrower, Guarantor or any of its Subsidiaries or any of their respective Affiliates that is communicated to or obtained by the Person serving as Administrative Agent or any of its Affiliates in any capacity. Administrative Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as Administrative Agent

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shall believe in good faith shall be necessary, pursuant to this Agreement) or (ii) in the absence of its own gross negligence or willful misconduct. Administrative Agent shall be deemed not to have knowledge of any Default unless and until notice describing such Default is given to Administrative Agent by Borrower or a Lender and Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or the other Margin Loan Documents, (ii) the contents of any certificate, report or other document delivered hereunder or in connection herewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement or any other agreement, instrument or document or (v) the satisfaction of any condition set forth in Article 4 or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to Administrative Agent.

Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of an Advance that by its terms must be fulfilled to the satisfaction of a Lender, Administrative Agent may presume that such condition is satisfactory to such Lender unless Administrative Agent shall have received notice to the contrary from such Lender prior to the making of such Advance. Administrative Agent may consult with legal counsel (who may be counsel for Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder by or through any one or more subagents appointed by Administrative Agent. Administrative Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of this Article shall apply to any such sub-agent and to the Related Parties of Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.

Administrative Agent may at any time give notice of its resignation to the Lenders and Borrower. Upon receipt of any such notice of resignation, the Required Lenders (calculated without regard to the Applicable Percentage of the resigning Administrative Agent) shall have the right, in consultation with Borrower, to appoint a successor, which shall be a commercial bank with an office in New York, New York, or an Affiliate of any such commercial bank with an office in New York, New York, and which may, for the avoidance of doubt, be a Lender or an Affiliate of a Lender. If no such successor shall have been so appointed by the Required Lenders

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and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may on behalf of the Lenders, appoint a successor Administrative Agent meeting the qualifications set forth above; provided that if Administrative Agent shall notify Borrower and the Lenders that no qualifying Person has accepted such appointment, then such resignation shall nonetheless become effective in accordance with such notice and (1) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Margin Loan Documents and (2) all payments, communications and determinations provided to be made by, to or through Administrative Agent shall instead be made by or to each Lender directly, until such time as the Required Lenders appoint a successor Administrative Agent as provided for above in this paragraph. The successor shall be consented to by Borrower at all times other than during the existence of an Event of Default (which consent of Borrower shall not be unreasonably withheld or delayed). Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or retired) Administrative Agent, and the retiring Administrative Agent shall be discharged from all of its duties and obligations hereunder (if not already discharged therefrom as provided above in this paragraph). The fees payable by Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between Borrower and such successor. After the retiring Administrative Agent’s resignation hereunder and under the other Margin Loan Documents, the provisions of this Article and Section 9.04 shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring Administrative Agent was acting as Administrative Agent.

Each Lender acknowledges that it has, independently and without reliance upon Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement or any related agreement or any document furnished hereunder or thereunder.

ARTICLE 9

MISCELLANEOUS

Section 9.01. Amendments, Etc.

(a) Neither this Agreement nor any other Margin Loan Document nor any provision hereof or thereof may be waived, amended or modified except (x) as set forth in Sections 9.01(b), 9.01(c) or 9.01(d) or (y) pursuant to an agreement or agreements in writing entered into by Borrower, Guarantor (as applicable) and the Required Lenders or by Borrower, Guarantor (as

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applicable) and Administrative Agent with the consent of the Required Lenders; provided that no such agreement shall (i) increase the Commitment of any Lender without the written consent of such Lender, (ii) reduce the principal amount of any Advance or reduce the rate of interest thereon, or reduce any fees payable hereunder, without the written consent of each Lender directly affected thereby, (iii) postpone the scheduled date of payment of the principal amount of any Advance or any interest thereon, or any fees payable hereunder, or reduce the amount of, waive or excuse any such payment, or postpone the scheduled date of expiration of any Commitment, without the written consent of each Lender directly affected thereby, (iv) change Section 2.16(c) or (d) in a manner that would alter the pro rata sharing of payments required thereby, without the written consent of each Lender, (v) release Guarantor from its obligations under the Guarantee Agreement, without the written consent of each Lender, (vi) change any of the provisions of this Section or the definition of “Required Lenders” or any other provision hereof specifying the number or percentage of Lenders required to waive, amend or modify any rights hereunder or make any determination or grant any consent hereunder, without the written consent of each Lender; provided, further that no such agreement shall amend, modify or otherwise affect the rights or duties of Administrative Agent under any Margin Loan Document without the prior written consent of Administrative Agent. Anything herein to the contrary notwithstanding, during such period as a Lender is a Defaulting Lender, to the fullest extent permitted by applicable law, such Lender will not be entitled to vote in respect of amendments and waivers hereunder and the Commitment and the outstanding Advance or other extensions of credit of such Lender hereunder will not be taken into account in determining whether the Required Lenders have approved any such amendment or waiver (and the definition of “Required Lenders” will automatically be deemed modified accordingly for the duration of such period); provided that any such amendment or waiver that would increase the Commitment of such Defaulting Lender, reduce the principal amount of any Advance of such Defaulting Lender or reduce the rate of interest thereon, or reduce any fees payable owing to such Defaulting Lender hereunder, postpone the scheduled date of payment of the principal amount of any Advance of such Defaulting Lender or any interest thereon, or any fees payable to such Defaulting Lender hereunder, or reduce the amount of, waive or excuse any such payment, or postpone the scheduled date of expiration of any Commitment of such Defaulting Lender, or alter the terms of this proviso, will require the consent of such Defaulting Lender.

(b) Upon the occurrence of a Share Collateral Trigger Event, Administrative Agent may, with the consent of the Required Lenders, in consultation with Borrower to the extent reasonably practicable and to the extent that such consultation would not cause undue delay, propose to amend one or more of the material terms of any Margin Loan Document other than the Guarantee Agreement (subject to the proviso to Section 9.01(a)) by delivering written notice of such proposed amendments to Borrower and the Lenders. Such amendments will take effect at the applicable Amendment Effective Time; provided that following receipt of such notice, Borrower may (i) prepay in full the Total Accrued Loan Amount to Administrative Agent for the account of each Lender prior to the Amendment Effective Time, in which case the proposed amendments will not take effect and (ii) if Borrower makes the payment described in clause (i), Borrower may (but shall not be required to) simultaneously terminate the Commitments pursuant to Section 2.05(b) without paying any Make Whole Amount.

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(c) If any of the following events (“Potential Facility Amendment Events”) shall occur:

(i) the occurrence of the tenth scheduled Exchange Business Day prior to the scheduled consummation of a Merger Event in relation to an Issuer, unless Calculation Agent determines that such consummation is unlikely to occur;

(ii) the announcement of an event that if consummated or completed would result in a Delisting of the TGP Shares or the TOO Shares and such shares not being immediately relisted on a Designated Exchange;

(iii) the payment of an Extraordinary Dividend with respect to either the TGP Shares or the TOO Shares;

(iv) the occurrence of the record date in respect of a distribution, issue or dividend to existing holders of the TGP Shares or the TOO Shares of share capital or other securities of another issuer acquired or owned (directly or indirectly) by the relevant Issuer in connection with a spin-off or other similar transaction with a value greater than 35% of the value of the share capital of the relevant Issuer immediately prior to such record date, as determined by Calculation Agent; or

(v) suspension from trading of the TGP Shares or the TOO Shares on the applicable Exchange for three consecutive Exchange Business Days, other than a suspension that affects all common equity securities on such Exchange;

then, and in any such event, and at any time thereafter during the continuance of such event, Administrative Agent may, with the consent of the Required Lenders, in consultation with Borrower to the extent reasonably practicable and to the extent such consultation would not cause undue delay, propose to amend one or more of the material terms of any Margin Loan Document other than the Guarantee Agreement (subject to the proviso to Section 9.01(a)) to account for such Potential Facility Amendment Event by delivering written notice of such proposed amendments to Borrower and the Lenders. Such amendments will take effect at the applicable Amendment Effective Time; provided that following receipt of such notice, Borrower may, prior to the Amendment Effective Time, (x) prepay in full the Total Accrued Loan Amount to Administrative Agent for the account of each Lender and (y) terminate the Commitments pursuant to Section 2.05(b) without paying any Make Whole Amount (and, for the avoidance of doubt, Borrower must take the action described in clause (y) if Borrower takes the action described in clause (x)).

(d) Upon the occurrence of a Redocumentation Event, Borrower may, on or prior to the applicable Amendment Effective Time, (x) prepay in full the Total Accrued Loan Amount to Administrative Agent for the account of each Lender and (y) terminate the Commitments pursuant to Section 2.05(b) without paying any Make Whole Amount (and, for the avoidance of doubt, Borrower must take the action described in clause (y) if Borrower takes the action described in clause (x)). Unless Borrower so elects to prepay the Total Accrued Loan Amount

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and terminate the Commitments pursuant to the preceding sentence, then after the applicable Amendment Effective Time, Administrative Agent may, with the consent of the Required Lenders, split the Facility into a separate facility with each Lender (each a “Separate Facility”) on economic terms identical to those of the Facility (subject to any necessary conforming changes), with aggregate Commitments and outstanding Advances equal to the Commitments and outstanding Advances under the Facility, and which shall be documented in separate agreements on substantially the same terms and conditions as this Agreement and the other Margin Loan Documents; provided that all conditions precedent to the making of the Advances on the occasion of the first Borrowing specified in this Agreement shall be deemed to be satisfied upon Borrower’s entry into the Separate Facilities and Borrower shall not be required to deliver any certificates, certifications, opinions or other documents upon its entry into the Separate Facilities other than (i) standard corporate housekeeping opinions (with the cost of such opinions to be paid by the applicable Lender or Lenders, as the case may be, requesting such opinions) and (ii) UCC financing statements in an appropriate form for filing with the Recorder of Deeds in the District of Columbia and completed Federal Reserve Board Forms U-1, to the extent necessary; provided, further that Borrower shall not be required to incur any increased tax, cost or expense (other than its own out-of-pocket fees and expenses of counsel) in connection with the establishment and maintenance of the Separate Facilities other than increased taxes, costs or expenses that Borrower would be required to incur under this Agreement and the other Margin Loan Documents. The parties will work together in good faith to agree on documentation for the Separate Facilities that takes into account changes appropriate to reflect the fact that each Separate Facility has a single Lender (including, for the avoidance of doubt, changes to the definition of Permitted Liens to reflect the fact that Borrower will pledge collateral separately to each Lender). A Lender shall be Administrative Agent under each Separate Facility with a single Commitment and outstanding Advances proportional to the Commitment of such Lender under the Facility, and each Separate Facility will have its own Collateral Agent and will be separately secured by a portion of the Collateral proportional to the Commitment in respect of such Separate Facility. Borrower will not be responsible for any fees, costs or other expenses incurred by Administrative Agent or any Lender in connection with the establishment and maintenance of the Separate Facilities, other than fees, costs and other expenses for which Borrower would be responsible under this Agreement and the other Margin Loan Documents.

Section 9.02. Notices; Effectiveness; Electronic Communications.

(a) Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in Subsection (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by facsimile or email as follows, and all notices and other communications expressly permitted hereunder to be given by telephone shall be made to the applicable telephone number, as follows:

(i) if to Borrower, to:

Deliver by courier to:

Teekay Finance Limited

4th Floor, Belvedere Building

69 Pitts Bay Road

Hamilton, HM 08 Bermuda

Attn: Mark Cave, President & Secretary

Telephone No.: (441) 298-2530

Facsimile No.: (441) 292-3931

Email: mark.cave@teekay.com

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with a copy to:

Teekay Finance Limited

Suite No. 1778

48 Par-la-Ville Road

Hamilton, HM 11 Bermuda

Attn: Mark Cave, President & Secretary

with a copy to:

Teekay Corporation

c/o Teekay Shipping (Canada) Ltd.

Suite 2000 Bentall 5

550 Burrard Street

Vancouver, BC V6C 2K2

Canada

Attn: Renee Eng, Manager, Treasury

Telephone No.: (604) 609-6418

Facsimile No.: (604) 681-3011

and

Rafal Gawlowski

Latham & Watkins LLP

885 Third Avenue

New York, New York 10022

(ii) if to Administrative Agent, to its applicable address set forth on Schedule 9.02.

(iii) if to any other Lender, to it at its address (or facsimile number or electronic mail address or telephone number) set forth on Schedule 9.02 or in the Assignment and Assumption pursuant to which such Lender becomes party to this Agreement or to such other address, facsimile number, electronic mail address or telephone number as shall be designated by such party in a notice to Borrower and Administrative Agent.

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Notices and other communications sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices and other communications sent by facsimile shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient). Notices and other communications delivered through electronic communications to the extent provided in Subsection (b) below, shall be effective as provided in such Subsection (b).

(b) (i) Notices and other communications sent to an email address shall be deemed received when sent absent receipt of a failure to deliver notice, and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its email address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor.

(c) Any party hereto may change its address (including email address), facsimile or telephone number for notices and other communications hereunder by notice to the other parties hereto.

(d) Administrative Agent and the Lenders shall be entitled to rely and act upon any notices purportedly given by or on behalf of Borrower. Borrower shall indemnify Administrative Agent and the Lenders and the Related Parties of Administrative Agent and the Lenders from all losses, costs, expenses and liabilities resulting from the reliance by such Person on each notice purportedly given by or on behalf of Borrower, except to the extent such losses, costs, expenses and liabilities arise from the gross negligence, bad faith or willful misconduct of Administrative Agent or any of its Related Parties. All telephonic notices to and other telephonic communications with Administrative Agent or any Lender may be recorded by such Person, and each of the parties hereto hereby consents to such recording.

(e) Borrower hereby agrees that service of all writs, process and summonses in any suit, action or proceeding brought under any Margin Loan Document may be made upon Watson, Farley & Williams (New York) LLP, presently located at 1133 Avenue of the Americas, New York, New York 10036 (the “Process Agent”), and Borrower hereby confirms and agrees that the Process Agent has been duly and irrevocably appointed as its agent and true and lawful attorney-in-fact in its name, place and stead to accept such service of any and all such writs, process and summonses, and agrees that the failure of the Process Agent to give any notice of any such service of process to Borrower shall not impair or affect the validity of such service or of any judgment based thereon. Borrower hereby further irrevocably consents to the service of process in any suit, action or proceeding in the manner provided in Section 9.08(d).

(f) Each Lender that is not otherwise subject to service of writs, process or summonses in New York City hereby agrees that service of all writs, process and summonses in any suit,

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action or proceeding brought under any Margin Loan Document may be made upon JPMorgan Chase Bank, N.A., presently located at 383 Madison Avenue, New York, New York 10179 (the “Lender Process Agent”), and such Lender hereby confirms and agrees that the Lender Process Agent has been duly and irrevocably appointed as its agent and true and lawful attorney-in-fact in its name, place and stead to accept such service of any and all such writs, process and summonses, and agrees that the failure of the Lender Process Agent to give any notice of any such service of process to such Lender shall not impair or affect the validity of such service or of any judgment based thereon. Each such Lender further irrevocably consents to the service of process in any suit, action or proceeding in the manner provided in Section 9.08(d).

Section 9.03. No Waiver; Remedies.

(a) No failure or delay by Administrative Agent or any Lender in exercising any right or power hereunder or under any other Margin Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of Administrative Agent and the Lenders hereunder and under any other Margin Loan Document are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of any Margin Loan Document or consent to any departure by Borrower therefrom shall in any event be effective unless the same shall be permitted by Section 9.01, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice to or demand on Borrower in any case shall entitle Borrower to any other or further notice or demand in similar or other circumstances or constitute a waiver of the rights of Administrative Agent or any Lender to any other or further action in any circumstances without notice or demand. Without limiting the generality of the foregoing, the making of an Advance shall not be construed as a waiver of any Event of Default, regardless of whether Administrative Agent or any Lender may have had notice or knowledge of such Event of Default at the time.

(b) The Advances are made with full recourse to Borrower and constitute direct, general, unconditional and unsubordinated Indebtedness of Borrower.

(c) Borrower, Administrative Agent and each Lender acknowledge and agree that the Margin Loan Documents collectively are intended to constitute a “securities contract” as such term is defined in Section 741(7) of the Bankruptcy Code and that each delivery, transfer, payment and grant of a security interest made or required to be made hereunder or contemplated hereby or made, required to be made or contemplated in connection herewith is a “transfer” and a “margin payment” or a “settlement payment” within the meaning of Section 362(b)(6) and/or (27) and Sections 546(e) and/or (j) of the Bankruptcy Code. In addition, all obligations under or in connection with the Margin Loan Documents represent obligations in respect of “termination values,” “payment amounts” or “other transfer obligations” within the meaning of Sections 362 and 561 of the Bankruptcy Code. The parties further acknowledge and agree that the Margin Loan Documents collectively constitute a “master netting agreement” within the meaning of the Bankruptcy Code.

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Section 9.04. Costs And Expenses; Indemnification; Damage Waiver.

(a) Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by Administrative Agent and Collateral Agent, including the reasonable fees, charges and disbursements of counsel for Administrative Agent and Collateral Agent (whether outside counsel or the allocated costs of its internal legal department), in connection with the Facility provided for herein, the preparation and administration of the Margin Loan Documents or any amendments, modifications or waivers of the provisions of the Margin Loan Documents (whether or not the transactions contemplated hereby or thereby shall be consummated but only so long as the Lenders are ready, willing and able to make the Advances contemplated by this Agreement upon satisfaction of all conditions precedent to the making of such Advances) (the “Lender Expenses”), but only up to an aggregate amount equal to the Lender Expenses Cap, and (ii) all expenses incurred by Administrative Agent, Collateral Agent or the Lenders or any of their respective Affiliates, including the fees, charges and disbursements of any counsel (whether outside counsel or the allocated costs of its internal legal department), in connection with the enforcement, collection or protection of its rights in connection with the Margin Loan Documents, including its rights under this Section, or in connection with the Advances made hereunder, including, subject to Section 9.01(d), all such expenses incurred during any workout, restructuring or negotiations in respect of such Advances.

(b) Borrower shall indemnify Administrative Agent, Collateral Agent and each Lender (and any sub-agent thereof) and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses, including the fees, charges and disbursements of any counsel for any Indemnitee, incurred by or asserted against any Indemnitee by any third party or by Borrower or any Related Party of Borrower arising out of, in connection with, or as a result of (i) the preparation, negotiation, execution, delivery or administration of this Agreement, any other Margin Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder, the enforcement or protection of their rights hereunder and thereunder or the consummation of the transactions contemplated by this Agreement, any other Margin Loan Document or any agreement or instrument contemplated hereby or thereby, (ii) any Advance or the use or proposed use of the proceeds therefrom, or (iii) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by Borrower or any other Related Party of Borrower, and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence, bad faith or willful misconduct of such Indemnitee or (y) arise out of any dispute among Indemnitees (other than a dispute involving claims against Administrative Agent or Collateral Agent, in each case in their respective capacities as such) that did not involve actions or omissions of Borrower, Guarantor or their respective Affiliates.

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(c) To the fullest extent permitted by applicable Law, Borrower shall not assert, and hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Margin Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Advance or the use of the proceeds thereof. No Indemnitee referred to in Subsection (b) above shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Margin Loan Document or the transactions contemplated hereby or thereby, except to the extent such charges result from the willful misconduct, bad faith or gross negligence of such Indemnitee.

(d) All amounts due under this Section shall be payable not later than ten Business Days after demand therefor.

(e) To the extent that Borrower fails to pay any amount required to be paid by it to Administrative Agent or any Related Party thereof under paragraph (a) or (b) of this Section, each Lender severally agrees to pay to Administrative Agent or such Related Party, as the case may be, such Lender’s Applicable Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount; provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against Administrative Agent in its capacity as such, or against any Related Person acting for Administrative Agent in connection with such capacity.

(f) The agreements in this Section shall survive the termination of the Facility and the repayment, satisfaction or discharge of all the other Obligations.

Section 9.05. Collateral Agent.

Administrative Agent and each Lender hereby appoint Citibank, N.A. as Collateral Agent hereunder to take such actions on their behalf and to exercise such powers as are delegated to such agent by the terms of this Agreement, the Security Agreement, the Guarantee or by any written instruction of Administrative Agent, together with such actions and powers as are reasonably related thereto to the extent permitted by applicable law. Without limiting the generality of the foregoing, Collateral Agent is hereby expressly authorized to execute any and all documents (including releases) with respect to the Collateral and exercise the rights as a secured party on behalf of Administrative Agent and each Lender with respect thereto, as contemplated by and in accordance with the provisions of this Agreement and the Security Agreement to the extent permitted by applicable law. Citibank, N.A. hereby accepts and agrees to such appointment.

Section 9.06. Calculation Agent.

The parties hereto hereby appoint Citibank, N.A. as Calculation Agent to take such actions, and to exercise such powers, as are delegated to such agent by the terms of the Margin

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Loan Documents, and Citibank, N.A. hereby accepts and agrees to such appointment. Whenever Calculation Agent is required to act or to exercise judgment in any way, it shall do so in good faith and in a commercially reasonable manner and, when reasonably practicable, in consultation with Borrower and to the extent that such consultation would not cause undue delay. Following any determination, calculation or other act by Calculation Agent, upon request by Borrower, Calculation Agent will provide to Borrower a report (in a commonly used file format for the storage and manipulation of financial data) displaying, in reasonable detail, the basis for such determination, calculation or action, it being understood that Calculation Agent will not be obligated to disclose any proprietary models or other confidential or proprietary information or data used by it for such determination, calculation or action.

Section 9.07. Payments Set Aside.

To the extent that any payment by or on behalf of Borrower is made to Administrative Agent or any Lender, or Administrative Agent or any Lender exercises their right of setoff, and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by Administrative Agent or such Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such setoff had not occurred.

Section 9.08. Governing Law; Submission To Jurisdiction.

(a) The Margin Loan Documents shall be governed by, and construed in accordance with, laws of the State of New York without giving effect to its conflict of laws provisions other than Section 5 1401 of the New York General Obligations Law.

(b) Each of the parties to this Agreement hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of any U.S. Federal or New York State court sitting in New York, New York in any action or proceeding arising out of or relating to any Margin Loan Document, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement or any other Margin Loan Document shall affect any right that Administrative Agent or any Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Margin Loan Document against Borrower or its properties in the courts of any jurisdiction.

(c) Each of the parties to this Agreement hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection that it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to

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this Agreement or any other Margin Loan Document in any court referred to in Subsection (b) of this Section. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

(d) Each party hereto irrevocably consents to service of process in the manner provided for notices in Section 9.02(a). Nothing in this Agreement or any other Margin Loan Document will affect the right of any party hereto to serve process in any other manner permitted by applicable Law.

(e) EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER MARGIN LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER MARGIN LOAN DOCUMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.08(e).

Section 9.09. Successors and Assigns.

(a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that (i) Borrower may not assign or otherwise transfer any of its rights or obligations hereunder or under any other Margin Loan Document without the prior written consent of Administrative Agent and each Lender (and any attempted assignment or transfer by Borrower without such consent shall be null and void) and (ii) no Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance with this Section. Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby and, to the extent expressly contemplated hereby, the Related Parties of Administrative Agent and each Lender) any legal or equitable right, remedy or claim under or by reason of this Agreement.

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(b) (i) Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may assign to a single assignee all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Advances at the time owing to it) with the prior written consent (such consent not to be unreasonably withheld) of:

(A) Borrower; provided that no consent of Borrower shall be required for an assignment to a Lender, an Affiliate of a Lender or, if a payment or bankruptcy Event of Default has occurred and is continuing, any other Person (other than a natural person); and

(B) Administrative Agent; provided that no consent of Administrative Agent shall be required for an assignment to an Affiliate of a Lender.

(ii) Assignments by a Lender shall be subject to the following additional conditions:

(A) in no event shall there be more than two Lenders;

(B) the amount of the Commitment or Advances of the assigning Lender subject to each such assignment, and the amount of the Commitment or Advances of the assigning Lender remaining after each such assignment (in each case determined as of the date the Assignment and Assumption with respect to such assignment is delivered to Administrative Agent), in each case shall not be less than the lesser of (1) $10,000,000 and (2) the entire remaining amount of the assigning Lender’s Commitments or Advances, as applicable, unless each of Borrower and Administrative Agent otherwise consent (each such consent not to be unreasonably withheld or delayed);

(C) each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement; and

(D) the parties to each assignment shall execute and deliver to Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500.

(iii) Subject to acceptance and recording thereof pursuant to paragraph (b)(iv) of this Section, from and after the effective date specified in each Assignment and Assumption, the assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.11, 2.12, 2.14 and 9.15). Upon request, Borrower (at its expense) shall execute and deliver a promissory note in the form described in Section 2.15(d) to the assignee Lender, and the promissory note, if any, theretofore held by the assignor Lender shall be returned to Borrower in exchange for a new promissory note,

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payable to the assignee Lender and reflecting its retained interest (if any) hereunder. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section 9.09 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (c) of this Section.

(iv) Administrative Agent, acting solely for this purpose as an agent of Borrower, shall maintain at one of its offices a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitment of, and principal amount (and stated interest) of the Advances owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive, and Borrower, Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

(v) Upon its receipt of a duly completed Assignment and Assumption executed by an assigning Lender and an assignee, the processing and recordation fee referred to in paragraph (b) of this Section and any written consent to such assignment required by paragraph (b) of this Section, Administrative Agent shall accept such Assignment and Assumption and record the information contained therein in the Register. No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph.

(c) Any Lender may, without the consent of Borrower or Administrative Agent, sell participations to one or more banks or other entities (other than Borrower of any of its Affiliates) (a “Participant”) in all or a portion of such Lender’s rights and obligations under this Agreement and the other Margin Loan Document (including all or a portion of the Advances); provided that (i) such Lender’s obligations under the Margin Loan Document shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the other parties hereto shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. Subject to Subsection (d) of this Section, Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.11, 2.12, and 2.14 (subject to the requirements and limitations therein, including the requirements under Section 2.12(e) (it being understood that the documentation required under Section 2.12(e) shall be delivered to the participating Lender)) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to this Section. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 9.16 as though it were a Lender. Any Lender that sells a participation to a Participant, shall, acting solely for this purpose as an agent of Borrower, maintain a register on which it enters the name and address of each Participant and the principal amount (and stated interest) of each Participant’s interest in this Agreement and the other Margin Loan Document; provided that no Lender shall have any obligation to disclose all or any portion of such register (including the

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identity of any Participant or any information relating to a Participant’s interest in any Commitments or Advances or its other obligations under any Margin Loan Document) to any Person except to the extent such disclosure is necessary to establish that such Commitment or Advance or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations.

(d) A Participant shall not be entitled to receive any greater payment under Sections 2.11 and 2.12 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, except to the extent that such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant acquired the applicable participation.

(e) Any Lender may at any time (i) pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender or (ii) enter into derivative transactions relating to such Lender’s Commitments or Advances, and this Section shall not apply to any such pledge or assignment of a security interest or derivative transaction; provided that no such pledge or assignment of a security interest or derivative transaction shall (x) release such Lender from any of its obligations hereunder or substitute any such pledgee, assignee or derivative transaction counterparty for such Lender as a party hereto or (y) result in the rehypothecation of any Collateral.

Section 9.10. Severability. Any provision of any Margin Loan Document held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions thereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

Section 9.11. Counterparts; Integration; Effectiveness. This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement, the other Margin Loan Document and any separate letter agreements with respect to fees payable to Administrative Agent or the Lenders constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Article 4, this Agreement shall become effective when it shall have been executed by Administrative Agent and when Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or electronic transmission shall be effective as delivery of a manually executed counterpart of this Agreement.

Section 9.12. Survival Of Representations. All covenants, agreements, representations and warranties made by Borrower in the Margin Loan Documents and in the certificates or other instruments delivered in connection with or pursuant to this Agreement or any other Margin

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Loan Document shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of the Margin Loan Documents and the making of any Advances, regardless of any investigation made by any such other party or on its behalf and notwithstanding that Administrative Agent or any Lender may have had notice or knowledge of any Event of Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Advance or any other Obligation under this Agreement is outstanding and unpaid or unsatisfied. The provisions of Sections 2.11, 2.12, 2.14, Section 8.01 and Article 9 shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Advances, the resignation or replacement of Administrative Agent or the termination of this Agreement or any other Margin Loan Document or any provision hereof or thereof.

Section 9.13. Confidentiality. Subject to Section 6.14, each of Administrative Agent and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates’ directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority having jurisdiction over Administrative Agent or any Lender (in which case the disclosing party agrees to inform Borrower promptly of such disclosure, unless such notice is prohibited by applicable Law and except in connection with any request as part of a regulatory examination), (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process (in which case the disclosing party agrees to inform Borrower promptly of such disclosure to the extent permitted by law and except in connection with a regulatory examination or an audit or examination conducted by bank accountants), (d) to any other party to this Agreement, (e) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or any other Margin Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to Borrower and its obligations, (g) with the consent of Borrower or (h) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section or (ii) becomes available to Administrative Agent or the applicable Lender on a non-confidential basis from a source other than Borrower or its Affiliates. For the purposes of this Section, “Information” means all information received from Borrower relating to Borrower or its business hereunder or pursuant hereto, other than any such information that is available to Administrative Agent or any Lender on a non-confidential basis prior to disclosure by Borrower; provided that, in the case of information received from Borrower after the date hereof, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

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Section 9.14. No Advisory Or Fiduciary Relationship. In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Margin Loan Document), Borrower acknowledges and agrees that: (a)(i) the arranging and other services regarding this Agreement provided by Administrative Agent and the Lenders are arm’s-length commercial transactions between Borrower and its Affiliates, on the one hand, and Administrative Agent and the Lenders and their respective Affiliates, on the other hand, (ii) Borrower has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (iii) Borrower is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Margin Loan Document; (b)(i) each of Administrative Agent and each Lender is and has been acting solely as a principal and, except as expressly agreed in writing herein or otherwise by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for Borrower or any of its Affiliates, or any other Person and (ii) each of Administrative Agent and each Lender has no obligation to Borrower or any of its Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Margin Loan Document; and (c) Administrative Agent and the Lenders and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of Borrower and its Affiliates, and each of Administrative Agent and each Lender has no obligations to disclose any of such interests to Borrower or any of its Affiliates. To the fullest extent permitted by law, Borrower hereby waives and releases any claims that it may have against Administrative Agent or the Lenders or their respective Affiliates with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby.

Section 9.15. Right Of Setoff. If an Event of Default shall have occurred and be continuing, Administrative Agent, Collateral Agent and each Lender (each, a “Set-off Party”) is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other obligations at any time owing by such Set-off Party to or for the credit or the account of Borrower against any and all of the obligations and liabilities of Borrower, irrespective of whether or not the relevant Set-off Party shall have made any demand under the Margin Loan Documents and although such obligations may be unmatured. The rights of each Set-off Party under this Section are in addition to other rights and remedies (including other rights of setoff) that such Set-off Party may have.

Section 9.16. Judgment Currency. If a judgment, order or award is rendered by any court or tribunal for the payment of any amounts owing to Administrative Agent or any Lender under this Agreement or any other Margin Loan Document or for the payment of damages in respect of a judgment or order of another court or tribunal for the payment of such amount or damages, such judgment, order or award being expressed in a currency (the “Judgment Currency”) other than Dollars, Borrower agrees (a) that its obligations in respect of any such amounts owing shall be discharged only to the extent that on the Business Day following

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Administrative Agent or such Lender’s receipt, as applicable, of any sum adjudged in the Judgment Currency, Administrative Agent or such Lender, as applicable, may purchase Dollars with the Judgment Currency, and (b) to indemnify and hold harmless Administrative Agent or such Lender against any deficiency in terms of Dollars in the amounts actually received by Administrative Agent or such Lender following any such purchase (after deduction of any premiums and costs of exchange payable in connection with the purchase of, or conversion into, Dollars). The indemnity set forth in the preceding sentence shall (notwithstanding any judgment referred to in the preceding sentence) constitute an obligation of Borrower separate and independent from its other obligations hereunder and shall survive the termination of this Agreement.

Section 9.17. USA PATRIOT Act Notice. Each Lender that is subject to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)), as amended (the “Act”), and Administrative Agent (for itself and not on behalf of any Lender) hereby notifies Borrower that pursuant to the requirements of the Act, it is required to obtain, verify and record information that identifies Borrower, which information includes the name and address of Borrower and other information that will allow Administrative Agent or such Lender to identify Borrower in accordance with the Act. Borrower agrees to promptly provide Administrative Agent or such Lender with all of the information requested by such Person to the extent such Person deems such information reasonably necessary to identify Borrower in accordance with the Act.

Section 9.18. Interest Rate Limitation. Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any Advance, together with all fees, charges and other amounts that are treated as interest on such Advance under applicable law (collectively the “Charges”), shall exceed the maximum lawful rate (the “Maximum Rate”) that may be contracted for, charged, taken, received or reserved by the Lender holding such Advance in accordance with applicable law, the rate of interest payable in respect of such Advance hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charges that would have been payable in respect of such Advance but were not payable as a result of the operation of this Section shall be cumulated and the interest and Charges payable to such Lender in respect of other Advances or periods shall be increased (but not above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the Federal Funds Effective Rate to the date of repayment, shall have been received by such Lender.

Section 9.19. Disclosure. Borrower hereby acknowledges and agrees that Administrative Agent and each Lender and/or their Affiliates from time to time may hold investments in, make other loans to or have other relationships with Borrower or its Affiliates.

[END OF TEXT]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their respective officers or representatives thereunto duly authorized, as of the date first above written.

BORROWER:
TEEKAY FINANCE LIMITED, as Borrower
By:
	Name:	Mark Cave
	Title:	President

[Signature Page to Margin Loan Agreement]

	CITIBANK, N.A., as Administrative Agent
	By:
		Name:	JAMES HEATHCOTE
		Title:	AUTHORIZED SIGNATORY
	CITIBANK, N.A., as Collateral Agent and solely in respect of Section 9.05
	By:
		Name:	JAMES HEATHCOTE
		Title:	AUTHORIZED SIGNATORY
Commitment: $100,000,000	CITIBANK, N.A., as a Lender
	By:
		Name:	JAMES HEATHCOTE
		Title:	AUTHORIZED SIGNATORY
Commitment: $100,000,000	JPMORGAN CHASE BANK, N.A., LONDON BRANCH, as a Lender
	By:
		Name:	Michael L. Gordon
		Title:	Managing Director

[Signature Page to Margin Loan Agreement]

Schedule 1.01(a)

The following haircuts shall be applicable for purposes of determining the Collateral Value of Cash Equivalents:

(a) in the case of readily marketable direct obligations of the Government of the United States or any agency or instrumentality thereof or obligations unconditionally guaranteed by the full faith and credit of the Government of the United States with a remaining time to maturity: (i) equal to or less than one year, 99%; (ii) greater than one year but equal to or less than five years, 96%; (iii) greater than five years but equal to or less than ten years, 94%; and (iv) greater than ten years but equal to or less than 30 years, 88%;

(b) in the case of certificates of deposit of or time deposits with any commercial bank that is a Lender or a member of the Federal Reserve System that issues (or the parent of which issues) commercial paper rated as described in clause (c) of the definition of Cash Equivalents, is organized under the laws of the United States or any state thereof and has combined capital and surplus of at least $500,000,000: 97%;

(c) in the case of commercial paper in an aggregate amount of no more than $10,000,000 per issuer outstanding at any time, issued by any corporation organized under the laws of any state of the United States and rated at least “Prime 1” (or the then equivalent grade) by Moody’s or “A 1” (or the then equivalent grade) by S&P: 97%; and

(d) in the case of offshore overnight interest bearing deposits in foreign branches of Administrative Agent, any Lender or an Affiliate of a Lender: 98%.

Schedule 1.01(b)

As used in this Agreement, the following terms shall have the following meanings:

“Commitment Fee Rate” means 0.75% per annum.

“Initial LTV Ratio” means thirty percent (30%).

“Lender Expenses Cap” means $250,000.

“Make Whole Amount” means, if Borrower elects to terminate the Commitments (i) on or prior to the date that is 12 calendar months following the Closing Date, 2.25% of the total Commitments, (ii) after the date that is 12 calendar months following the Closing Date but on or prior to the date that is 24 calendar months following the Closing Date, 1.50% of the total Commitments, (iii) after the date that is 24 calendar months following the Closing Date but on or prior to the date that is 36 calendar months following the Closing Date, 0.75% of the total Commitments.

“Spread” means 4.50% per annum.

“Structuring Fee” means a fee payable by Borrower to Administrative Agent for the account of each Lender, as consideration for the agreements of the Lenders under this Agreement, equal to 1.25% of the total Commitments.

“Threshold Amount” means $100,000,000.

Schedule 3.13

Capitalization Table for Teekay Finance Limited

Equity Interests	Equity Owner
Common Stock and additional paid in capital ($.001 par value, 728,775,000 issued out of 2,000,000,000 authorized)	Teekay Holdings Limited	728,775
Contributed Surplus	Teekay Holdings Limited	728,046,225
Total Equity		728,775,000
Total Capitalization		728,775,000

Schedule 9.02

Address for Payments to Administrative Agent:

Citibank, N.A.

388 Greenwich Street

New York, NY 10013

Payment Instructions:

Bank: Citibank NA New York

BIC: CITIUS33 (or ABA: 021000089)

F/O: Citibank New York

A/C: 00167679

Ref: NY Swap Operations

Address for Notices to Administrative Agent:

Citibank, N.A.

390 Greenwich Street—3^rd Floor

New York, NY 10013

Attn: Corporate Equity Derivatives, Dustin Sheppard

Telephone No.: (212) 723-5757

Facsimile No.: (347) 853-7272

Email: dustin.c.sheppard@citi.com

Address for Notices to Citibank, N.A. as Lender:

Citibank, N.A.

390 Greenwich Street—3^rd Floor

New York, NY 10013

Attn: Corporate Equity Derivatives, Dustin Sheppard

Telephone No.: (212) 723-5757

Facsimile No.: (347) 853-7272

Email: dustin.c.sheppard@citi.com

Address for Notices to JPMorgan Chase Bank N.A., London Branch as Lender:

JPMorgan Chase Bank, N.A., London Branch

Corporate EDG Trading

383 Madison Avenue

New York, NY 10179

Attn: Pierandrea Minafra, Graham Orton

Telephone No.: (212) 622-7064

Facsimile No.: (917) 464-6770

Email: edg_corporates_na@jpmorgan.com

with a copy to:

JPMorgan Chase Bank, N.A., London Branch

Corporate Equity Derivatives

383 Madison Avenue

New York, NY 10179

Attn: Jason Shrednick

Telephone No.: (212) 622-6392

Facsimile No.: (917) 464-6770

Email: jason.shrednick@jpmorgan.com

EXHIBIT A

FORM OF BORROWING NOTICE

Borrowing Notice

Citibank, N.A., as Administrative Agent

390 Greenwich Street—3^rd Floor

New York, NY 10013

Attn: Corporate Equity Derivatives

[Date]

Ladies and Gentlemen:

The undersigned, TEEKAY FINANCE LIMITED (“Borrower”), refers to the Margin Loan Agreement dated as of December 21, 2012 (as from time to time amended, the “Margin Loan Agreement,” the terms defined therein being used herein as therein defined), by and among Borrower, the Lenders party thereto and Citibank, N.A. as Administrative Agent (“Administrative Agent”) and hereby gives you notice, irrevocably, pursuant to Section 2.03 of the Margin Loan Agreement, that the undersigned hereby requests a Borrowing under the Margin Loan Agreement, and in that regard sets forth below the information relating to such Advance (the “Proposed Borrowing”) as required by Section 2.03(a) of the Margin Loan Agreement:

(i) The Business Day of the Proposed Borrowing is             ,         .

(ii) The aggregate amount of the Proposed Borrowing is $            .

(iii) The Funding Account to which proceeds of the Proposed Borrowing should be deposited is                     .

The undersigned hereby certifies that the following statements are true on the date hereof and will be true on the date of the Proposed Borrowing:

(a) Each of the representations and warranties contained in Article 3 of the Margin Loan Agreement or in any other Margin Loan Document are true and correct in all material respects on and as of the date of the Proposed Borrowing, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct in all material respects as of such earlier date.

(b) Since the date of the last financial statements delivered pursuant to Section 4.01(a)(x) or Section 5.01, as applicable, with respect to Guarantor, no event or condition has resulted in, or could be reasonably expected to cause, either individually or in the aggregate, a Material Adverse Effect with respect to Guarantor.

Exhibit A to Margin Loan Agreement

A-1

(c) Immediately after giving effect to the Proposed Borrowing, the LTV Ratio shall not exceed the Initial LTV Ratio.

(d) No Default or Event of Default shall have occurred and be continuing, or would result from the Proposed Borrowing or from the application of the proceeds therefrom.

(e) Borrower has not provided notice of termination of the Facility.

(f) The Collateral Requirement has been satisfied in all respects.

This Borrowing Notice is a representation and warranty by Borrower that all other conditions specified in [Section 4.01 and Section 4.02]¹ [Section 4.02]² will be satisfied on and as of the date of the Proposed Borrowing.

Very truly yours,
TEEKAY FINANCE LIMITED
By:
	Name:
	Title:

¹  Insert for initial borrowing under revolver.

²  Insert for any subsequent borrowing under revolver.

Exhibit A to Margin Loan Agreement

A-2

EXHIBIT B

FORM OF PLEDGE AND CONTROL AGREEMENT

[Attached]

Exhibit B to Margin Loan Agreement

B-1

EXHIBIT C

FORM OF CONTROL AGREEMENT

[Attached]

Exhibit C to Margin Loan Agreement

C-1

EXHIBIT D-1

FORM OF ISSUER ACKNOWLEDGEMENT WITH TGP ISSUER

[Attached]

Exhibit D-1 to Margin Loan Agreement

D-1-1

EXHIBIT D-2

FORM OF ISSUER ACKNOWLEDGEMENT WITH TOO ISSUER

[Attached]

Exhibit D-2 to Margin Loan Agreement

D-2-1

EXHIBIT E-1

[FORM OF]

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to the Margin Loan Agreement dated as of December 21, 2012 (as amended, supplemented or otherwise modified from time to time, the “Agreement”), by and among Borrower, the Lenders party thereto and Citibank, N.A. as Administrative Agent.

Pursuant to the provisions of Section 2.12 of the Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the Advance(s) in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of Borrower within the meaning of Section 871(h)(3)(B) of the Code and (iv) it is not a controlled foreign corporation related to Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished Borrower with a certificate of its non-U.S. Person status on IRS Form W-8BEN. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform Borrower and Administrative Agent, and (2) the undersigned shall have at all times furnished Borrower and Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Agreement and used herein shall have the meanings given to them in the Agreement.

[NAME OF LENDER]
By:
	Name:
	Title:

Date:            , 20[    ]

Exhibit E-1 to Margin Loan Agreement

E-1

EXHIBIT E-2

[FORM OF]

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to the Margin Loan Agreement dated as of December 21, 2012 (as amended, supplemented or otherwise modified from time to time, the “Agreement”), among by and among Borrower, the Lenders party thereto and Citibank, N.A. as Administrative Agent, and each lender from time to time party thereto.

Pursuant to the provisions of Section 2.12 of the Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the participation in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of Borrower within the meaning of Section 871(h)(3)(B) of the Code, and (iv) it is not a controlled foreign corporation related to Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished Administrative Agent with a certificate of its non-U.S. Person status on IRS Form W-8BEN. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform Administrative Agent in writing, and (2) the undersigned shall have at all times furnished Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Agreement and used herein shall have the meanings given to them in the Agreement.

[NAME OF LENDER]
By:
	Name:
	Title:

Date:            , 20[    ]

Exhibit E-2 to Margin Loan Agreement

E-2-1

EXHIBIT E-3

[FORM OF]

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to the Margin Loan Agreement dated as of December 21, 2012 (as amended, supplemented or otherwise modified from time to time, the “Agreement”), by and among Borrower, the Lenders party thereto and Citibank, N.A. as Administrative Agent.

Pursuant to the provisions of Section 2.12 of the Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the participation in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such participation, (iii) with respect such participation, neither the undersigned nor any of its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is a ten percent shareholder of Borrower within the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or indirect partners/members is a controlled foreign corporation related to Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished Administrative Agent with IRS Form W-8IMY accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN from each of such partner’s/member’s beneficial owners that is claiming the portfolio interest exemption. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform Administrative Agent and (2) the undersigned shall have at all times furnished Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Agreement and used herein shall have the meanings given to them in the Agreement.

[NAME OF LENDER]
By:
	Name:
	Title:

Date:            , 20[    ]

Exhibit E-3 to Margin Loan Agreement

E-3-1

EXHIBIT E-4

[FORM OF]

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to the Margin Loan Agreement dated as of December 21, 2012 (as amended, supplemented or otherwise modified from time to time, the “Agreement”), by and among Borrower, the Lenders party thereto and Citibank, N.A. as Administrative Agent.

Pursuant to the provisions of Section 2.12 of the Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the Advance(s) in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such Advance(s), (iii) with respect to the extension of credit pursuant to this Agreement or any other Margin Loan Document, neither the undersigned nor any of its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is a ten percent shareholder of Borrower within the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or indirect partners/members is a controlled foreign corporation related to Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished Borrower and Administrative Agent with IRS Form W-8IMY accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN from each of such partner’s/member’s beneficial owners that is claiming the portfolio interest exemption. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform Borrower and Administrative Agent, and (2) the undersigned shall have at all times furnished Borrower and Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Agreement and used herein shall have the meanings given to them in the Agreement.

[NAME OF LENDER]
By:
	Name:
	Title:

Date:            , 20[    ]

Exhibit E-4 to Margin Loan Agreement

E-4-1

EXHIBIT F

FORM OF GUARANTEE AGREEMENT

[Attached]

Exhibit F to Margin Loan Agreement

F-1

EXHIBIT G

FORM OF NEW YORK LAW OPINION

[Attached]

Exhibit G to Margin Loan Agreement

G-1

EXHIBIT H

FORM OF MARSHALL ISLANDS LAW OPINION

[Attached]

Exhibit H to Margin Loan Agreement

H-1

EXHIBIT I

FORM OF BERMUDA LAW OPINION

[Attached]

Exhibit I to Margin Loan Agreement

I-1

EXHIBIT J

FORM OF ASSIGNMENT AND ASSUMPTION

This Assignment and Assumption (the “Assignment and Assumption”) is dated as of the Effective Date set forth below and is entered into by and between [Insert name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the “Assignee”). Capitalized terms used but not defined herein shall have the meanings given to them in the Margin Loan Agreement identified below (as amended, the “Margin Loan Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full.

For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to and in accordance with the Standard Terms and Conditions and the Margin Loan Agreement, as of the Effective Date inserted by Administrative Agent as contemplated below (i) all of the Assignor’s rights and obligations in its capacity as a Lender under the Margin Loan Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of the Assignor under the Facility (including the Guarantee Agreement) and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of the Assignor (in its capacity as a Lender) against any Person, whether known or unknown, arising under or in connection with the Margin Loan Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned pursuant to clauses (i) and (ii) above being referred to herein collectively as the “Assigned Interest”). Such sale and assignment is without recourse to the Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by the Assignor.

1.	Assignor:
2.	Assignee:
		[and is [a Lender][an Affiliate of [identify Lender] who is a Lender]]3
3.	Borrower:	Teekay Finance Limited
4.	Administrative Agent:	Citibank, N.A., as the administrative agent under the Margin Loan Agreement

³  Select as applicable.

Exhibit J to Margin Loan Agreement

J-1

5.	Margin Loan Agreement:	The Margin Loan Agreement dated as of December 21, 2012 among Teekay Finance Limited, the Lenders parties thereto, and Administrative Agent
6.	Assigned Interest:

Aggregate Amount  of Commitment/Advances for all Lenders	Amount of Commitment/Advances Assigned	Percentage Assigned of Commitment/Advances4
$	$		%
$	$		%
$	$		%

Effective Date:             , 20     [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]

The Assignee agrees to receive all notices and other communications at the following address, facsimile number, electronic mail address or telephone number, as provided in Section 9.02 of the Margin Loan Agreement:

[Insert contact information for Assignee, including address, facsimile number, electronic mail address and telephone number]

The terms set forth in this Assignment and Assumption are hereby agreed to:

ASSIGNOR
[NAME OF ASSIGNOR]
	By:
		Title:
ASSIGNEE [NAME OF ASSIGNEE]
	By:
		Title:

⁴  Set forth, to at least 9 decimals, as a percentage of the Commitment/Advances of all Lenders thereunder.

Exhibit J to Margin Loan Agreement

J-2

[Consented to and]5 Accepted:
CITIBANK, N.A., as Administrative Agent
By
	Title:

[Consented to:

TEEKAY FINANCE LIMITED]⁶

By

Title:

⁵  To be added only if the consent of Administrative Agent is required by the terms of the Margin Loan Agreement.

⁶  To be added only if the consent of Borrower is required by the terms of the Margin Loan Agreement.

Exhibit J to Margin Loan Agreement

J-3

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

1. Representations and Warranties.

1.1 Assignor. The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Margin Loan Agreement, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Margin Loan Agreement or any collateral thereunder, (iii) the financial condition of Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in respect of the Margin Loan Agreement or (iv) the performance or observance by Borrower, any of its Subsidiaries or Affiliates or any other Person of any of their respective obligations under the Margin Loan Agreement.

1.2. Assignee. The Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Margin Loan Agreement, (ii) it satisfies the requirements, if any, specified in the Margin Loan Agreement that are required to be satisfied by it in order to acquire the Assigned Interest and become a Lender, (iii) from and after the Effective Date, it shall be bound by the provisions of the Margin Loan Agreement as a Lender thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it has received a copy of the Margin Loan Agreement, together with copies of the most recent financial statements delivered pursuant to Section 5.01 thereof, as applicable, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase the Assigned Interest on the basis of which it has made such analysis and decision independently and without reliance on Administrative Agent or any other Lender, and (v) attached to the Assignment and Assumption is any documentation required to be delivered by it pursuant to the terms of the Margin Loan Agreement, duly completed and executed by the Assignee; and (b) agrees that (i) it will, independently and without reliance on Administrative Agent, the Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Margin Loan Agreement, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Margin Loan Agreement are required to be performed by it as a Lender.

2. Payments. From and after the Effective Date, Administrative Agent shall make all payments in respect of the Assigned Interest (including payments of principal, interest, fees and other amounts) to the Assignor for amounts which have accrued to but excluding the Effective Date and to the Assignee for amounts which have accrued from and after the Effective Date.

Exhibit J to Margin Loan Agreement

J-4

3. General Provisions. This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument. Delivery of an executed counterpart of a signature page of this Assignment and Assumption by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption. This Assignment and Assumption shall be governed by, and construed in accordance with, the law of the State of New York without giving effect to its conflict of laws provisions other than Section 5-1401 of the New York General Obligations Law.

Exhibit J to Margin Loan Agreement

J-5

EXHIBIT K

FORM OF AMENDMENTS TO BORROWER’S ORGANIZATION DOCUMENTS

[Attached]

Exhibit K to Margin Loan Agreement

K-1

EX-8.1

EXHIBIT 8.1

LISTING OF SUBSIDIARIES

The following is a list of the Company’s significant subsidiaries as at March 31, 2013.

Name of Significant Subsidiary	State or Jurisdiction of Incorporation	Proportion of Ownership Interest
TEEKAY CHARTERING LIMITED	MARSHALL ISLANDS		100.0	%
TEEKAY HOLDINGS LIMITED	BERMUDA		100.0	%
SINGLE SHIP LIMITED LIABILITY COMPANIES	MARSHALL ISLANDS		100.0	%
TEEKAY LNG PARTNERS LP	MARSHALL ISLANDS		37.5	%(1)
TEEKAY OFFSHORE PARTNERS LP	MARSHALL ISLANDS		29.4	%(1)
TEEKAY OFFSHORE OPERATING LP	MARSHALL ISLANDS		29.4	%(1)
TEEKAY NAVION OFFSHORE LOADING PTE LTD.	SINGAPORE		29.4	%(1)
TEEKAY PETROJARL AS	NORWAY		100.0	%
TEEKAY TANKERS LTD.	MARSHALL ISLANDS		25.1	%(2)

(1) The partnership is controlled by its general partner. Teekay Corporation has a 100% beneficial ownership in the general partner. In limited cases, approval of a majority or supermajority of the common unit holders (in some cases excluding units held by the general partner and its affiliates) is required to approve certain actions.

(2) Proportion of voting power held is 53.1%.

EX-12.1

EXHIBIT 12.1

CERTIFICATION

I, Peter Evensen, President and Chief Executive Officer of the company, certify that:

1. I have reviewed this report on Form 20-F of Teekay Corporation (the “company”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4. The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a -15(f) and 15d-15(f)) for the company and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the Annual Report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting;

5. The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.

Dated: April 29, 2013	By:	/s/ Peter Evensen
	Peter Evensen
	President and Chief Executive Officer

EX-12.2

EXHIBIT 12.2

CERTIFICATION

I, Vincent Lok, Executive Vice President and Chief Financial Officer of the company, certify that:

1. I have reviewed this report on Form 20-F of Teekay Corporation (the “company”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4. The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a -15(f) and 15d-15(f)) for the company and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the Annual Report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting;

5. The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.

Dated: April 29, 2013	By:	/s/ Vincent Lok
	Vincent Lok
	Executive Vice President and Chief Financial Officer

EX-13.1

EXHIBIT 13.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Teekay Corporation (the “Company”) on Form 20-F for the year ended December 31, 2012, as filed with the Securities and Exchange Commission on the date hereof (the “Form 20-F”), I Peter Evensen, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Form 20-F fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

(2) The information contained in the Form 20-F fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: April 29, 2013

By:	/s/ Peter Evensen
Peter Evensen President and Chief Executive Officer

EX-13.2

EXHIBIT 13.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Teekay Corporation (the “Company”) on Form 20-F for the year ended December 31, 2012, as filed with the Securities and Exchange Commission on the date hereof (the “Form 20-F”), I Vincent Lok, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Form 20-F fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

(2) The information contained in the Form 20-F fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: April 29, 2013

By:	/s/ Vincent Lok
Vincent Lok Executive Vice President and Chief Financial Officer

EX-23.1

EXHIBIT 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the following Registration Statements of Teekay Corporation:

(1) No. 333-42434 on Form S-8 pertaining to the Amended 1995 Stock Option Plan,

(2) No. 333-119564 on Form S-8 pertaining to the Amended 1995 Stock Option Plan and the 2003 Equity Incentive Plan,

(3) No. 33-97746 on Form F-3 and related Prospectus for the registration of 2,000,000 shares of common stock under its Dividend Reinvestment Plan,

(4) No. 333-147683 on Form S-8 pertaining to the 2003 Equity Incentive Plan of Teekay,

(5) No. 333-166523 on Form S-8 pertaining to the 2003 Equity Incentive Plan of Teekay; and

(6) No. 333-187142 on Form S-8 pertaining to the 2013 Equity Incentive Plan of Teekay;

of our reports dated April 29, 2013, with respect to the consolidated financial statements as at December 31, 2012 and 2011 and for each of the years in the two year period ended December 31, 2012 and the effectiveness of internal control over financial reporting as of December 31, 2012, which reports appear in the December 31, 2012 Annual Report on Form 20-F of Teekay Corporation.

/s/ KPMG LLP

Chartered Accountants

Vancouver, Canada

April 29, 2013

EX-23.2

EXHIBIT 23.2

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the following Registration Statements:

(1) Registration Statement (Form S-8 No. 333-42434) pertaining to the Amended 1995 Stock Option Plan of Teekay Corporation (“Teekay”),

(2) Registration Statement (Form S-8 No. 333-119564) pertaining to the Amended 1995 Stock Option Plan and the 2003 Equity Incentive Plan of Teekay,

(3) Registration Statement (Form F-3 No. 33-97746) and related Prospectus of Teekay for the registration of 2,000,000 shares of Teekay common stock under its Dividend Reinvestment Plan,

(4) Registration Statement (Form S-8 No. 333-147683) pertaining to the 2003 Equity Incentive Plan of Teekay,

(5) Registration Statement (Form S-8 No. 333-166523) pertaining to the 2003 Equity Incentive Plan of Teekay; and

(6) Registration Statement (Form S-8 333-187142) pertaining to the 2013 Equity Incentive Plan of Teekay;

of our report dated April 13, 2011, with respect to the consolidated statements of loss, comprehensive loss, cash flows and changes in total equity of Teekay Corporation and subsidiaries for the year ended December 31, 2010, included in this Annual Report (Form 20-F) of Teekay for the year ended December 31, 2012.

Vancouver, Canada,	/s/ Ernst & Young LLP
April 29, 2013	Chartered Accountants

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Goodwill, Intangible Assets and In-Process Revenue Contracts (Tables)

12 Months Ended

Dec. 31, 2012

Carrying Amount of Goodwill for Company's Reportable Segment

The carrying amount of goodwill for the years ended December 31, 2012 and 2011, for the Company’s reportable segments are as follows:

	Shuttle Tanker and FSO Segment $		Liquefied  Gas Segment $		Conventional Tanker Segment $			Total $
Balance as of December 31, 2010		130,908		35,631		36,652			203,191
Goodwill impairment		—		—		(36,652	)		(36,652	)
Balance as of December 31, 2011 and 2012		130,908		35,631		—			166,539

Summary of Intangible Assets

As at December 31, 2012, the Company’s intangible assets consisted of:

	Weighted-Average Amortization Period (Years)		Gross  Carrying Amount $		Accumulated Amortization $			Net  Carrying Amount $
Customer contracts		13.7		316,684		(191,587	)		125,097
Other intangible assets		0.9		1,280		(241	)		1,039
		13.6		317,964		(191,828	)		126,136

As at December 31, 2011 the Company’s intangible assets consisted of:

	Weighted-Average Amortization Period (Years)		Gross Carrying Amount $		Accumulated Amortization $			Net  Carrying Amount $
Customer contracts		15.6		329,815		(194,266	)		135,549
Other intangible assets		4.5		11,430		(10,237	)		1,193
		15.2		341,245		(204,503	)		136,742

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Income Taxes - Reconciliations of Income Tax Rates and Actual Tax Charge (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Income Tax Expense (Benefit), Continuing Operations, Income Tax Reconciliation [Abstract]
Net loss before taxes	$ (325,522)	$ (372,131)	$ (172,975)
Net loss not subject to taxes	(129,307)	(341,473)	(416,684)
Net (loss) income subject to taxes	(196,215)	(30,658)	243,709
At applicable statutory tax rates	(15,808)	(8,987)	57,737
Permanent and currency differences	(253,143)	(172,368)	(104,514)
Adjustments to valuation allowances and uncertain tax positions	250,327	179,675	40,863
Other	4,218	5,970	(426)
Tax expense (recovery) related to the current year	$ (14,406)	$ 4,290	$ (6,340)

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Summary of Significant Accounting Policies - Summarized Dry Docking Activity (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Property, Plant and Equipment [Line Items]
Balance at the end of the year	$ 7,321,058	$ 7,890,761
Dry docking activity [Member]
Property, Plant and Equipment [Line Items]
Balance at the beginning of the year	128,987	143,103	172,053
Costs incurred for drydocking	35,336	54,296	57,156
Dry-dock amortization	(57,082)	(67,180)	(86,106)
Write down / sale of vessels	(6,313)	(1,232)
Balance at the end of the year	$ 100,928	$ 128,987	$ 143,103

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Supplemental Cash Flow Information (Tables)

12 Months Ended

Dec. 31, 2012

Changes in Operating Assets and Liabilities

a) The changes in operating assets and liabilities for the years ended December 31, 2012, 2011, and 2010, are as follows:

	Year Ended December 31,
	2012			2011			2010
Accounts receivable		(132,873	)		(68,914	)		(21,820	)
Prepaid expenses and other assets		19,741			(8,225	)		12,719
Accounts payable		18,408			12,216			(11,002	)
Accrued and other liabilities		(20,485	)		(19,424	)		65,518
		(115,209	)		(84,347	)		45,415

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Pension Benefits - Estimated Future Benefit Payments which Reflect Expected Future Service to be Paid by Benefit Plans (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012
Defined Benefit Plan, Expected Future Benefit Payments, Fiscal Year Maturity [Abstract]
2013	$ 9,264
2014	7,858
2015	6,612
2016	8,491
2017	8,531
2018 - 2022	39,868
Total	$ 80,624

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Financing Transactions - Summary of Public Offerings and Equity Placements (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Subsidiary, Sale of Stock [Line Items]
Total Proceeds Received			$ 35,000
Net Proceeds Received	496,224	631,057	645,642
Teekay Offshore [Member]
Subsidiary, Sale of Stock [Line Items]
Total Proceeds Received			35,000
Public Offerings [Member] | Teekay Offshore [Member]
Subsidiary, Sale of Stock [Line Items]
Total Proceeds Received	219,474		419,989
Less: Teekay Corporation portion	(4,389)		(8,400)
Offering Costs	(8,164)		(18,645)
Net Proceeds Received	206,921		392,944
Public Offerings [Member] | Teekay Tankers [Member]
Subsidiary, Sale of Stock [Line Items]
Total Proceeds Received	69,000	112,054	243,977
Less: Teekay Corporation portion			(32,000)
Offering Expenses	(3,229)	(4,820)	(9,279)
Net Proceeds Received	65,771	107,234	202,698
Public Offerings [Member] | Teekay LNG [Member]
Subsidiary, Sale of Stock [Line Items]
Total Proceeds Received	189,243	356,133
Less: Teekay Corporation portion	(3,784)	(7,123)
Offering Costs	(6,927)	(14,909)
Net Proceeds Received	178,532	334,101
Direct Equity Placement [Member] | Teekay Offshore [Member]
Subsidiary, Sale of Stock [Line Items]
Total Proceeds Received	45,919
Less: Teekay Corporation portion	(919)
Offering Costs
Net Proceeds Received	45,000
Direct Equity Placement [Member] | Teekay LNG [Member]
Subsidiary, Sale of Stock [Line Items]
Total Proceeds Received			51,020
Less: Teekay Corporation portion			(1,020)
Offering Costs
Net Proceeds Received			50,000
Private Equity Placement [Member] | Teekay Offshore [Member]
Subsidiary, Sale of Stock [Line Items]
Total Proceeds Received		420,145
Less: Teekay Corporation portion		(230,144)
Offering Costs		(279)
Net Proceeds Received		$ 189,722

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Pension Benefits - Schedule of Assumptions Used (Detail)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Weighted average assumptions used to determine benefit obligation
Discount rates	3.00%	3.20%
Rate of compensation increase	5.50%	4.40%
Weighted average assumptions used to determine net pension expense
Discount rates	3.00%	3.20%	4.40%
Rate of compensation increase	5.50%	4.40%	4.60%
Expected long-term rates of return	4.80%	5.00%	5.70%

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Summary of Significant Accounting Policies - Summary of Financing Receivables (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Other loan receivables
Loans to equity accounted investees and joint venture partners	$ 206,903	$ 85,248
Total direct financing leases and other loan receivables	833,964	734,558
Payment activity [Member] | Performing [Member]
Summary of financing receivables
Direct financing leases	436,601	459,908
Other loan receivables
Long term receivable included in other assets	1,704	786
Collateral [Member]
Other loan receivables
Investment in term loans and interest receivable	69,371
Collateral [Member] | Performing [Member]
Other loan receivables
Investment in term loans and interest receivable	119,385	188,616
Other internal metrics [Member] | Performing [Member]
Other loan receivables
Loans to equity accounted investees and joint venture partners	$ 206,903	$ 85,248

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Operating and Direct Financing Leases - Schedule of Estimated Future Minimum Rental Payments to be Received and Paid Under Lease Contracts (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012
Head Lease Receipts [Member]
Operating Leased Assets [Line Items]
2013	$ 28,843
2014	28,828
2015	22,188
2016	21,242
2017	21,242
Thereafter	239,063
Total	361,406
Sublease Payments [Member]
Operating Leased Assets [Line Items]
2013	24,779
2014	24,779
2015	24,779
2016	24,779
2017	24,779
Thereafter	278,884
Total	$ 402,779

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Supplemental Cash Flow Information - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Supplemental Cash Flow Information [Line Items]
Cash interest paid, including realized interest rate swap settlements	$ 274.2	$ 279.1	$ 271.3
Cash interest paid relating to interest rate swap amendments and terminations	0	149.7	0
Value of shuttle tanker contributed by unrelated party in exchange of equity interest in subsidiary			$ 35.0
Ownership interest			33.00%

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Other Income (Tables)

12 Months Ended

Dec. 31, 2012

Summary of Other Income

	Year Ended			Year Ended		Year Ended
	December 31,			December 31,		December 31,
	2012			2011		2010
	$			$		$
Gain on sale of other assets		2,217			—		—
Volatile organic compound emission plant lease income		1,220			2,900		4,714
(Loss) gain on sale of marketable securities		(2,560	)		3,372		1,805
Miscellaneous (loss) income		(511	)		6,088		1,008
Loss on notes repurchase		—			—		(12,645	)
Other income (loss)		366			12,360		(5,118	)

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Subsequent Events

12 Months Ended

Dec. 31, 2012

Subsequent Events

25. Subsequent Events

a) In January 2013, Teekay Offshore issued in the Norwegian bond market NOK 1,300 million in senior unsecured bonds. The bonds were issued in two tranches maturing in January 2016 (NOK 500 million) and January 2018 (NOK 800 million). The aggregate principal amount of the bonds is equivalent to approximately $233 million and all interest and principal payments under each of the two tranches have been swapped into U.S. dollars at fixed rates of 4.80% on the tranche maturing in 2016 and 5.93% on the tranche maturing in 2018. In connection with this, Teekay Offshore repurchased NOK 388.5 million of the existing NOK 600 million bond issue maturing in November 2013. The net proceeds of approximately $167 million have been used to reduce portion of amounts outstanding under Teekay Offshore’s revolving credit facilities and for general partnership purposes. Teekay Offshore will apply to list the bonds on the Oslo Stock Exchange.

b) In February 2013, Teekay LNG completed its joint venture agreement with Belgium-based Exmar NV to own and charter-in liquefied petroleum gas (LPG) carriers with a primary focus on the mid-size gas carrier segment. The joint venture entity, called Exmar LPG BVBA, took economic effect as of November 1, 2012 and includes 16 owned LPG carriers (including four newbuildings scheduled for delivery in 2014) and five chartered-in LPG carriers. In addition, the joint venture recently ordered another four medium-size gas carrier newbuildings with deliveries scheduled between 2015 and 2016, with options to order up to four additional vessels, which brings the total fleet size of Exmar LPG BVBA to 25 vessels, excluding options. For its 50% ownership interest in the joint venture, including newbuilding payments made prior to the November 1, 2012, Teekay LNG invested approximately $134 million of equity and assumed approximately $108 million of its pro rata share of existing debt and lease obligations as of the economic effective date, secured by certain vessels in the Exmar LPG BVBA fleet. Exmar LPG BVBA is in the process of refinancing the joint venture fleet and four of the newbuildings with a new $355 million debt facility.

c) In April 2013, Teekay Tankers entered into agreement with STX Offshore & Shipbuilding Co., Ltd (or STX) of South Korea for the construction of four, fuel-efficient 113,000 dead-weight tonne Long Range 2 (or LR2) product tanker newbuildings for a fully-built-up cost of approximately $47 million each. The agreement with STX also includes fixed-price options for the construction up to 12 additional LR2 newbuildings, which options expire between October 2013 and October 2014. Upon delivery, it is expected that the four vessels will operate in the Company’s Taurus Tankers LR2 Pool. Teekay Tankers intends to finance the installment payments with its existing liquidity and to secure long-term debt financing for the four vessels prior to their scheduled deliveries in late-2015 and early-2016.

d) In April 2013, Teekay Offshore issued 2.06 million common units in a private placement to an institutional investor for proceeds of approximately $60.0 million, excluding the General Partner’s 2% proportionate capital contribution of $1.2 million. Upon completion of the private placement, Teekay Offshore had 83.8 million common units outstanding. Teekay Offshore will use the proceeds from the issuance of common units to partially finance the shipyard instalments for the four Suezmax newbuilding shuttle tankers that are scheduled for deliveries throughout 2013, and for general corporate purposes. As a result of this private placement, Teekay’s ownership of Teekay Offshore was reduced to 28.7% (including the Company’s 2% general partner interest). Teekay maintains control of Teekay Offshore by virtue of its control of the general partner and will continue to consolidate the subsidiary.

e) In April 2013, Teekay Offshore issued 6.0 million preferred units in a public offering for net proceeds of $144.9 million, representing a new class of limited partner interests. Teekay Offshore expects to use the net proceeds from the public offering for general corporate purposes, including the funding of newbuilding installments, capital conversion projects and the acquisitions of vessels that Teekay may offer to Teekay Offshore. Pending the application of funds for these purposes, Teekay Offshore expects to repay a portion of its outstanding debt under two of its revolving credit facilities.

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Operating and Direct Financing Leases - Schedule of Estimated Future Minimum Rental Payments to be Received and Paid Under Lease Contracts (Parenthetical) (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2012
Operating Leased Assets [Line Items]
Head lease payment received	$ 149.0
Sublease payment made	90.6
Deferred Head Lease receipts	$ 39.1

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Pension Benefits - Pension Plans with Benefit Obligations and Accumulated Benefit Obligations in Excess of Plan Assets (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Defined Benefit Plan Disclosure [Line Items]
Benefit obligation	$ 125,945	$ 113,460
Fair value of plan assets	106,616	85,432
Accumulated benefit obligation	4,350	35,358
Fair value of plan assets	$ 2,795	$ 31,815

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Equity Accounted Investments - Condensed Summary of Company's Financial Information for Joint Venture (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Schedule of Equity Method Investments [Line Items]
Income from vessel operations	$ (150,393)	$ 108,412	$ 234,123
Joint Venture [Member]
Schedule of Equity Method Investments [Line Items]
REVENUES	659,030	303,607	232,516
Income from vessel operations	241,702	118,408	91,290
Realized and unrealized loss on derivative instruments	(56,307)	(127,230)	(95,750)
Net income (loss)	120,395	(48,996)	(44,794)
Joint Venture [Member] | Cash and restricted cash [Member]
Schedule of Equity Method Investments [Line Items]
Cash and restricted cash	229,963	184,296
Joint Venture [Member] | Other assets - current [Member]
Schedule of Equity Method Investments [Line Items]
Cash and restricted cash	125,152	105,925
Joint Venture [Member] | Vessels and Equipment [Member]
Schedule of Equity Method Investments [Line Items]
Net investment in direct financing leases	2,114,435	462,335
Joint Venture [Member] | Net investment in direct financing leases [Member]
Schedule of Equity Method Investments [Line Items]
Net investment in direct financing leases	1,938,011	1,728,902
Joint Venture [Member] | Other assets - non - current [Member]
Schedule of Equity Method Investments [Line Items]
Net investment in direct financing leases	228,887	188,384
Joint Venture [Member] | Current portion of long-term debt [Member]
Schedule of Equity Method Investments [Line Items]
Current portion of long-term debt	1,106,706	106,584
Joint Venture [Member] | Other liabilities - current [Member]
Schedule of Equity Method Investments [Line Items]
Current portion of long-term debt	193,785	138,945
Joint Venture [Member] | Long-term debt [Member]
Schedule of Equity Method Investments [Line Items]
Long-term debt	1,911,419	1,567,215
Joint Venture [Member] | Other liabilities - non-current [Member]
Schedule of Equity Method Investments [Line Items]
Long-term debt	$ 469,220	$ 395,750

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Goodwill, Intangible Assets and In-Process Revenue Contracts - Summary of Intangible Assets (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Acquired Finite-Lived Intangible Assets [Line Items]
Weighted-Average Amortization Period (Years)	13 years 7 months 6 days	15 years 2 months 12 days
Gross Carrying Amount	$ 317,964	$ 341,245
Accumulated Amortization	(191,828)	(204,503)
Net Carrying Amount	126,136	136,742
Customer contracts [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Weighted-Average Amortization Period (Years)	13 years 8 months 12 days	15 years 7 months 6 days
Gross Carrying Amount	316,684	329,815
Accumulated Amortization	(191,587)	(194,266)
Net Carrying Amount	125,097	135,549
Other intangible assets [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Weighted-Average Amortization Period (Years)	10 months 24 days	4 years 6 months
Gross Carrying Amount	1,280	11,430
Accumulated Amortization	(241)	(10,237)
Net Carrying Amount	$ 1,039	$ 1,193

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Capital Stock - Details Regarding Outstanding and Exercisable Stock Options (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2012
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Number of Outstanding Options	5,285
Outstanding Options, Weighted-Average Remaining Life (Years)	5 years
Outstanding Options, Weighted-Average Exercise Price	$ 34.40
Number of Exercisable Options	4,562
Exercisable Options, Weighted-Average Remaining Life (Years)	4 years 4 months 24 days
Exercisable Options, Weighted Average Exercise Price	$ 35.54
$10.00 - $14.99 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Prices, lower limit	$ 10.00
Range of Exercise Prices, upper limit	$ 14.99
Number of Outstanding Options	689
Outstanding Options, Weighted-Average Remaining Life (Years)	6 years 2 months 12 days
Outstanding Options, Weighted-Average Exercise Price	$ 11.84
Number of Exercisable Options	689
Exercisable Options, Weighted-Average Remaining Life (Years)	6 years 2 months 12 days
Exercisable Options, Weighted Average Exercise Price	$ 11.84
$15.00 - $19.99 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Prices, lower limit	$ 15.00
Range of Exercise Prices, upper limit	$ 19.99
Number of Outstanding Options	107
Outstanding Options, Weighted-Average Remaining Life (Years)	2 months 12 days
Outstanding Options, Weighted-Average Exercise Price	$ 19.59
Number of Exercisable Options	107
Exercisable Options, Weighted-Average Remaining Life (Years)	2 months 12 days
Exercisable Options, Weighted Average Exercise Price	$ 19.59
$20.00 - $24.99 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Prices, lower limit	$ 20.00
Range of Exercise Prices, upper limit	$ 24.99
Number of Outstanding Options	626
Outstanding Options, Weighted-Average Remaining Life (Years)	7 years 1 month 6 days
Outstanding Options, Weighted-Average Exercise Price	$ 24.39
Number of Exercisable Options	392
Exercisable Options, Weighted-Average Remaining Life (Years)	7 years 1 month 6 days
Exercisable Options, Weighted Average Exercise Price	$ 24.37
$25.00 - $29.99 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Prices, lower limit	$ 25.00
Range of Exercise Prices, upper limit	$ 29.99
Number of Outstanding Options	433
Outstanding Options, Weighted-Average Remaining Life (Years)	9 years 2 months 12 days
Outstanding Options, Weighted-Average Exercise Price	$ 27.69
$30.00 - $34.99 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Prices, lower limit	$ 30.00
Range of Exercise Prices, upper limit	$ 34.99
Number of Outstanding Options	429
Outstanding Options, Weighted-Average Remaining Life (Years)	2 years 7 months 6 days
Outstanding Options, Weighted-Average Exercise Price	$ 33.84
Number of Exercisable Options	373
Exercisable Options, Weighted-Average Remaining Life (Years)	1 year 9 months 18 days
Exercisable Options, Weighted Average Exercise Price	$ 33.67
$35.00 - $39.99 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Prices, lower limit	$ 35.00
Range of Exercise Prices, upper limit	$ 39.99
Number of Outstanding Options	741
Outstanding Options, Weighted-Average Remaining Life (Years)	3 years 3 months 18 days
Outstanding Options, Weighted-Average Exercise Price	$ 38.98
Number of Exercisable Options	741
Exercisable Options, Weighted-Average Remaining Life (Years)	3 years 3 months 18 days
Exercisable Options, Weighted Average Exercise Price	$ 38.98
$40.00 - $44.99 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Prices, lower limit	$ 40.00
Range of Exercise Prices, upper limit	$ 44.99
Number of Outstanding Options	1,246
Outstanding Options, Weighted-Average Remaining Life (Years)	5 years 2 months 12 days
Outstanding Options, Weighted-Average Exercise Price	$ 40.41
Number of Exercisable Options	1,246
Exercisable Options, Weighted-Average Remaining Life (Years)	5 years 2 months 12 days
Exercisable Options, Weighted Average Exercise Price	$ 40.41
$45.00 - $49.99 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Prices, lower limit	$ 45.00
Range of Exercise Prices, upper limit	$ 49.99
Number of Outstanding Options	345
Outstanding Options, Weighted-Average Remaining Life (Years)	2 years 2 months 12 days
Outstanding Options, Weighted-Average Exercise Price	$ 46.80
Number of Exercisable Options	345
Exercisable Options, Weighted-Average Remaining Life (Years)	2 years 2 months 12 days
Exercisable Options, Weighted Average Exercise Price	$ 46.80
$50.00 - $59.99 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Prices, lower limit	$ 50.00
Range of Exercise Prices, upper limit	$ 59.99
Number of Outstanding Options	666
Outstanding Options, Weighted-Average Remaining Life (Years)	4 years 2 months 12 days
Outstanding Options, Weighted-Average Exercise Price	$ 51.40
Number of Exercisable Options	666
Exercisable Options, Weighted-Average Remaining Life (Years)	4 years 2 months 12 days
Exercisable Options, Weighted Average Exercise Price	$ 51.40
$60.00 - $64.99 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Prices, lower limit	$ 60.00
Range of Exercise Prices, upper limit	$ 64.99
Number of Outstanding Options	3
Outstanding Options, Weighted-Average Remaining Life (Years)	4 years 3 months 18 days
Outstanding Options, Weighted-Average Exercise Price	$ 60.96
Number of Exercisable Options	3
Exercisable Options, Weighted-Average Remaining Life (Years)	4 years 3 months 18 days
Exercisable Options, Weighted Average Exercise Price	$ 60.96

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Summary of Significant Accounting Policies - Schedule of Accumulated Other Comprehensive (Loss) Income (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Property, Plant and Equipment [Line Items]
Accumulated Other Comprehensive Income (Loss), Qualifying Cash Flow Hedging Instruments	$ 341	$ (306)	$ 2,295	$ 2,923
Accumulated Other Comprehensive Income (Loss), Pension Adjustments	(16,253)	(22,941)	(17,539)	(10,294)
Accumulated Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Available for Sale Marketable Securities		(656)	7,073	5,837
Accumulated Other Comprehensive Income (Loss), Foreign Exchange Gain (Loss) on Currency Translation	1,144
Accumulated Other Comprehensive Income (Loss), Total	(14,768)	(23,903)	(8,171)	(1,534)
Other comprehensive (loss) income, Qualifying cash flow hedging instruments	647	(2,601)	(628)
Other comprehensive (loss) income, Pension adjustments	6,688	(5,402)	(7,245)
Other Comprehensive (loss) income, Unrealized gain on available for sale marketable securities	656	(7,729)	1,236
Accumulated Other Comprehensive Income (Loss), Foreign Exchange Gain (Loss) on Currency Translation	1,144
Other comprehensive income (loss)	$ 9,135	$ (15,732)	$ (6,637)

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Income Taxes - Components of Company's Deferred Tax Assets and Liabilities (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Deferred tax assets:
Vessels and equipment	$ 58,825	$ 76,582
Tax losses carried forward	427,443	380,299
Other	64,194	95,312
Total deferred tax assets	550,462	552,193
Deferred tax liabilities:
Vessels and equipment	26,503	60,776
Long-term debt	33,764	24,918
Other	40,117	45,624
Total deferred tax liabilities	100,384	131,318
Net deferred tax assets	450,078	420,875
Valuation allowance	(421,343)	(398,559)
Net deferred tax assets	$ 28,735	$ 22,316

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Long-Term Debt - Additional Information (Detail)	12 Months Ended					12 Months Ended				12 Months Ended								1 Months Ended									12 Months Ended								12 Months Ended
	Dec. 31, 2012 USD ($)	Dec. 31, 2011 USD ($)	Dec. 31, 2010 USD ($)	Dec. 31, 2012 Minimum [Member]	Dec. 31, 2012 Maximum [Member]	Dec. 31, 2012 Senior Notes (8.5%) due January 15, 2020 [Member] USD ($)	Dec. 31, 2011 Senior Notes (8.5%) due January 15, 2020 [Member] USD ($)	Dec. 31, 2012 U.S. Dollar-denominated Unsecured Demand Loans due to Joint Venture Partners [Member] USD ($)	Dec. 31, 2011 U.S. Dollar-denominated Unsecured Demand Loans due to Joint Venture Partners [Member] USD ($)	Dec. 31, 2012 Revolving credit facilities [Member] USD ($) CreditFacility Vessel	Dec. 31, 2011 Revolving credit facilities [Member] USD ($)	Dec. 31, 2012 Revolving credit facilities [Member] Minimum [Member]	Dec. 31, 2011 Revolving credit facilities [Member] Minimum [Member]	Dec. 31, 2012 Revolving credit facilities [Member] Maximum [Member]	Dec. 31, 2011 Revolving credit facilities [Member] Maximum [Member]	Dec. 31, 2012 Norwegian Kroner-denominated Bonds due November 2013 [Member] USD ($)	Nov. 30, 2010 Norwegian Kroner-denominated Bonds due November 2013 [Member] NOK	Nov. 30, 2010 Norwegian Kroner-denominated Bonds due November 2013 [Member] Interest rate swap agreements [Member] USD ($)	Dec. 31, 2012 Norwegian Kroner-denominated bonds due January 2017 [Member] Teekay Offshore [Member] USD ($)	Jan. 31, 2012 Norwegian Kroner-denominated bonds due January 2017 [Member] Teekay Offshore [Member] USD ($)	Jan. 31, 2012 Norwegian Kroner-denominated bonds due January 2017 [Member] Teekay Offshore [Member] NOK	Dec. 31, 2012 Norwegian Kroner-denominated Bonds due through May 2017 [Member] USD ($)	Dec. 31, 2011 Norwegian Kroner-denominated Bonds due through May 2017 [Member] USD ($)	Dec. 31, 2012 Norwegian Kroner-denominated Bonds due through May 2017 [Member] Teekay LNG [Member] USD ($)	May 31, 2012 Norwegian Kroner-denominated Bonds due through May 2017 [Member] Teekay LNG [Member] USD ($)	May 31, 2012 Norwegian Kroner-denominated Bonds due through May 2017 [Member] Teekay LNG [Member] NOK	Dec. 31, 2012 Secured Debt [Member] USD ($) Vessel Term_loan	Dec. 31, 2011 Secured Debt [Member] USD ($) Vessel	Dec. 31, 2012 Secured Debt [Member] Minimum [Member]	Dec. 31, 2011 Secured Debt [Member] Minimum [Member]	Dec. 31, 2012 Secured Debt [Member] Maximum [Member]	Dec. 31, 2011 Secured Debt [Member] Maximum [Member]	Dec. 31, 2012 5.3% term loan [Member] USD ($)	Dec. 31, 2011 5.3% term loan [Member] USD ($)	Dec. 31, 2012 Euro-denominated Term Loans due through 2023 [Member] USD ($)	Dec. 31, 2011 Euro-denominated Term Loans due through 2023 [Member] USD ($)	Dec. 31, 2010 Euro-denominated Term Loans due through 2023 [Member] USD ($)	Dec. 31, 2012 Euro-denominated Term Loans due through 2023 [Member] EUR (€)	Dec. 31, 2011 Euro-denominated Term Loans due through 2023 [Member] EUR (€)	Dec. 31, 2012 Euro-denominated Term Loans due through 2023 [Member] Minimum [Member]	Dec. 31, 2011 Euro-denominated Term Loans due through 2023 [Member] Minimum [Member]	Dec. 31, 2012 Euro-denominated Term Loans due through 2023 [Member] Maximum [Member]	Dec. 31, 2011 Euro-denominated Term Loans due through 2023 [Member] Maximum [Member]	Dec. 31, 2012 Norwegian Kroner Denominated Bonds Due October Two Thousand Fifteen [Member] Teekay LNG [Member] USD ($)	Oct. 31, 2012 Norwegian Kroner Denominated Bonds Due October Two Thousand Fifteen [Member] Teekay LNG [Member] USD ($)	Oct. 31, 2012 Norwegian Kroner Denominated Bonds Due October Two Thousand Fifteen [Member] Teekay LNG [Member] NOK	Dec. 31, 2012 U.S. Dollar-denominated term loan (VIE term loan) [Member] USD ($)	Dec. 31, 2011 U.S. Dollar-denominated term loan (VIE term loan) [Member] USD ($)
Debt Instrument [Line Items]
Aggregate borrowings										$ 2,800,000,000
Undrawn amount of revolving credit facility										1,200,000,000
Number of debt instruments										15																	18
Percentage of margin												0.45%	0.45%	3.25%	3.25%		4.75%			5.75%	5.75%				5.25%	5.25%			0.30%	0.30%	4.25%	4.00%								0.60%	0.60%	2.25%	2.25%		4.75%	4.75%	2.95%	2.95%
LIBOR as at date indicated	0.31%	0.58%																									0.31%	0.58%
Amount reduced under revolving credit facility in first year										740,800,000
Amount reduced under revolving credit facility in second year										741,300,000
Amount reduced under revolving credit facility in third year										226,400,000
Amount reduced under revolving credit facility in fourth year										346,400,000
Amount reduced under revolving credit facility in fifth year										463,000,000
Amount reduced under revolving credit facility thereafter										321,000,000
Collateralized number of vessels by first-priority mortgages granted										58																	36	33
Fixed interest rate on the portion of U. S. Dollar-denominated term loans outstanding						8.50%		4.84%	4.84%
Debt Instrument, face amount						450,000,000											600,000,000				600,000,000					700,000,000																				700,000,000
Percentage over par at which notes sold						99.181%
Effective interest rate						8.625%
Capitalized cost included in other non-current asset						9,400,000
Debt instrument redemption price as percentage of principle amount						100.00%
Debt instrument percentage of principle redeemable with equity offering proceeds						108.50%
Maximum Redemption Percentage Of Aggregate Principal Amount						35.00%
Treasury yield plus 50 basis points						0.50%
Debt instrument, carrying amount																107,800,000			107,800,000					125,800,000																				125,800,000
Fixed interest rates based on interest rate and cross currency swaps																		1.12%		7.49%	7.49%				6.88%	6.88%																			5.52%	5.52%
Margin added to reference rate on cross currency swap																		5.04%
Transfer of principal amount																		98,500,000		101,400,000					125,000,000																				122,800,000
Rate on interest rate swap																		3.50%
LIBOR rate receivable variable																		The floating LIBOR rate receivable from the interest rate swap is capped at 3.5%, which effectively results in a fixed rate of 1.12% unless LIBOR exceeds 3.5%, in which case Teekay Offshore's related interest rate effectively floats at LIBOR, but reduced by 2.38%
Long-term debt	5,559,714,000	5,444,373,000				447,115,000	446,825,000	13,300,000	13,300,000	1,627,979,000	2,244,634,000											467,223,000	100,417,000				2,432,374,000	2,069,860,000					328,000,000	327,700,000	341,382,000	348,905,000		258,800,000	269,200,000								230,400,000	220,500,000
Interest at a weighted-average fixed rate	2.90%	2.60%																															5.30%	5.30%
Number of term loans which have balloon or bullet repayments																											17
Outstanding term loans not guaranteed by Teekay or its subsidiaries																											107,000,000	119,400,000
EURIBOR as at date indicated	0.10%	1.02%
Unrealized foreign exchange gain (loss)	(22,137,000)	11,614,000	21,427,000																																(12,900,000)	12,700,000	32,000,000
Amount reduced under revolving credit facility in first year	797,400,000
Amount reduced under revolving credit facility in second year	1,208,200,000
Amount reduced under revolving credit facility in third year	442,600,000
Amount reduced under revolving credit facility in fourth year	390,200,000
Amount reduced under revolving credit facility in fifth year	1,004,200,000
Amount reduced under revolving credit facility thereafter	1,700,000,000
Vessel market value to loan ratio				113.20%	284.00%
Vessel market value to loan minimum required ratio				105.00%	115.00%
Minimum level of free cash be maintained as per loan agreements	100,000,000	100,000,000
Free liquidity and undrawn revolving credit line as percentage of debt				5.00%	7.50%
Amount of free liquidity and undrawn revolving credit line	$ 319,100,000	$ 318,300,000

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Capital Stock - Additional Information (Detail) (USD $)	12 Months Ended						12 Months Ended			1 Months Ended	12 Months Ended										12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010	Feb. 28, 2010	Dec. 31, 2012 Stock Options [Member]	Dec. 31, 2011 Stock Options [Member]	Dec. 31, 2012 Officers directors employee [Member]	Dec. 31, 2011 Officers directors employee [Member]	Dec. 31, 2010 Officers directors employee [Member]	Mar. 31, 2011 Pension costs [Member]	Dec. 31, 2012 Minimum [Member]	Dec. 31, 2012 Maximum [Member]	Dec. 31, 2012 Restricted Stock [Member]	Dec. 31, 2011 Restricted Stock [Member]	Dec. 31, 2010 Restricted Stock [Member]	Dec. 31, 2012 Restricted Stock [Member] Minimum [Member]	Dec. 31, 2012 Restricted Stock [Member] Maximum [Member]	Dec. 31, 2012 TOTAL EQUITY Thousands of Shares of Common Stock Outstanding [Member]	Dec. 31, 2008 TOTAL EQUITY Thousands of Shares of Common Stock Outstanding [Member]	Dec. 31, 2011 TOTAL EQUITY Thousands of Shares of Common Stock Outstanding [Member]	Dec. 31, 2012 Performance Shares [Member] Times	Dec. 31, 2011 Performance Shares [Member]	Dec. 31, 2010 Performance Shares [Member]	Dec. 31, 2012 Restricted Stock Units (RSUs) [Member]	Dec. 31, 2011 Restricted Stock Units (RSUs) [Member]	Dec. 31, 2010 Restricted Stock Units (RSUs) [Member]	Dec. 31, 2010 Tender Offers [Member]
Class of Stock [Line Items]
Number of common shares issued related to the exercise of share based compensation during the period	1,000,000	600,000
Repurchase of Common Stock, shares																		0		3,900,000
Preferred Stock, share authorized	25,000,000	25,000,000
Preferred Stock, par value	$ 1	$ 1
Common stock, share authorized	725,000,000	725,000,000
Common stock, par value	$ 0.001	$ 0.001
Common Stock, share issued	70,203,388	74,391,691
Common Stock, share outstanding	69,704,188	68,732,341
Common stock repurchase, amount authorized																			$ 200,000,000
Common stock repurchase, total remaining amount authorized	37,700,000
Repurchase of common stock, amount	162,300,000	122,195,000	40,111,000
Repurchase of common stock, shares																		5,200,000
Minimum percentage of shares acquired in exercisable Rights			20.00%																								20.00%
Minimum percentage of common stock acquired by stockholders for higher thresholds			15.00%
Common stock, shares reserved for issuance upon exercise of options or equity awards granted or to be granted					8,924,470	9,895,787
Expiry date of options outstanding											Mar. 06, 2013	Mar. 06, 2022
Vesting period of performance shares	3 years										3 years					2 years	3 years				3 years
Term of options under Plans	Ten-year
Granted options under the Plans							432,971	95,604	733,167
Weighted-average grant-date fair value of options forfeited	$ 800,000	$ 1,200,000
Unrecognized compensation cost related to non-vested stock options granted under the Plans	2,300,000
Expected recognition of compensation related to non-vested stock options granted under the Plans in 2013	1,300,000
Expected recognition of compensation related to non-vested stock options granted under the Plans in 2014	1,000,000
Fair value of restricted stock awards	2,900,000	5,300,000	8,100,000										700,000
Intrinsic value of options exercised	11,900,000	3,800,000	6,800,000
Intrinsic value of outstanding in-the-money stock options	22,000,000	20,900,000
Intrinsic value of exercisable stock options	18,300,000	12,600,000
Weighted-average remaining life of options vested and expected to vest	5 years	5 years 4 months 24 days
Weighted-average grant-date fair value of options granted	$ 8.72	$ 11.27	$ 8.16
Expected volatility used in computing fair value of options granted	54.80%	53.60%	52.70%
Expected life used in computing fair value of options granted, years	4 years
Dividend yield used in computing fair value of options granted	4.40%	3.80%	3.30%
Risk-free interest rate used in computing fair value of options granted	2.10%	2.10%	2.60%
Estimated forfeiture rate used in computing fair value of options granted	12.00%	11.20%	9.80%
Period of Historical data used to calculate expected volatility in years	5 years
Value of each restricted stock unit and performance share unit in shares													Each restricted stock unit and performance share unit is equivalent in value to one share of the Company's common stock plus reinvested dividends from the grant date to the vesting date.
Number of times performance units to vest, Minimum																					0
Number of times performance units to vest, Maximum																					3
Decrease in value of accrued liabilities				4,000,000
Other long-term liabilities	220,079,000	220,986,000		2,000,000
Increase in value of additional paid in capital				6,000,000
Options Granted	433,000	96,000	733,000										23,563	29,663	27,028						67,870	73,349	87,054	268,595	358,180	263,620
Fair value of granted stock																					2,500,000	3,700,000	3,500,000	7,400,000	12,500,000	6,400,000
Vested restricted stock	747,000	1,071,000	1,084,000																					334,256	214,863	227,165
Market value of vested restricted stock																								9,000,000	4,900,000	4,900,000
Restricted stock or unit expense		1,300,000	2,400,000																					7,700,000	12,500,000	4,800,000
Stock granted																								200,024	131,682	148,518
One-time increase in pension plan benefits										11,000,000
Compensation expense related to Mr. Moller's grants		4,700,000
General and administrative	$ 202,967,000	$ 223,616,000	$ 193,743,000					$ 15,700,000

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Capital Lease Obligations and Restricted Cash - Schedule of Capital Lease Obligations (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Capital Leased Assets [Line Items]
Capital Lease Obligations	$ 637,574	$ 647,047
Less current portion	70,272	47,203
Long-term portion	567,302	599,844
RasGas II LNG Carriers [Member]
Capital Leased Assets [Line Items]
Capital Lease Obligations	472,085	471,397
Suezmax Tankers [Member]
Capital Leased Assets [Line Items]
Capital Lease Obligations	$ 165,489	$ 175,650

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Capital Stock - Summary of Stock Option Activity and Related Information (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Schedule Of Stock Option Activity [Line Items]
Options Outstanding-beginning of year	5,713	6,123	5,983
Options Granted	433	96	733
Options Exercised	(733)	(363)	(380)
Options Forfeited/Expired	(128)	(143)	(213)
Options Outstanding-end of year	5,285	5,713	6,123
Options Exercisable-end of year	4,561	4,656	3,963
Weighted-Average Exercise Price, Outstanding-beginning of year	$ 32.47	$ 31.54	$ 31.46
Weighted-Average Exercise Price, Granted	$ 27.69	$ 34.93	$ 24.42
Weighted-Average Exercise Price, Exercised	$ 15.85	$ 16.14	$ 15.12
Weighted-Average Exercise Price, Forfeited/Expired	$ 31.81	$ 33.11	$ 29.00
Weighted-Average Exercise Price, Outstanding-end of year	$ 34.40	$ 32.47	$ 31.54
Weighted-Average Exercise Price, Exercisable-end of year	$ 35.54	$ 35.40	$ 36.80

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Operating and Direct Financing Leases - Additional Information (Detail) (USD $)	12 Months Ended		12 Months Ended
	Dec. 31, 2012 Unit Carriers	Dec. 31, 2011	Dec. 31, 2011 Teekay Tangguh Borrower LLC [Member] Teekay BLT Corporation [Member]	Dec. 31, 2011 Teekay LNG [Member] Teekay BLT Corporation [Member]	Dec. 31, 2012 Teekay LNG [Member] Teekay Tangguh Borrower LLC [Member]	Dec. 31, 2012 Property Available for Operating Lease [Member]
Property Subject to or Available for Operating Lease [Line Items]
Minimum commitments to be incurred by the Company	$ 153,800,000
Minimum commitments to be incurred by the Company in current year	84,400,000
Minimum commitments to be incurred by the Company in second year	35,000,000
Minimum commitments to be incurred by the Company in third year	15,800,000
Minimum commitments to be incurred by the Company in fourth year	9,100,000
Minimum commitments to be incurred by the Company in fifth year	9,100,000
Minimum commitments to be incurred by the Company thereafter	400,000
Minimum scheduled future revenues to be received by the company						9,800,000,000
Minimum scheduled future revenues to be received by the company in current year						1,100,000,000
Minimum scheduled future revenues to be received by the company in second year						1,200,000,000
Minimum scheduled future revenues to be received by the company in third year						1,200,000,000
Minimum scheduled future revenues to be received by the company in fourth year						1,000,000,000
Minimum scheduled future revenues to be received by the company in fifth year						1,000,000,000
Minimum scheduled future revenues to be received by the company thereafter						4,300,000,000
Carrying amount of the vessels accounted for as operating leases	6,100,000,000	5,300,000,000
Cost of the vessels	7,800,000,000	7,200,000,000
Accumulated depreciation of the vessels	1,700,000,000	1,900,000,000
Agreed Purchase Interest in Teekay Tangguh Borrower LLC				69.00%	99.00%
Ownership interest			70.00%
Lease of LNG carriers	2
Tax indemnification guarantee included other long term liabilities	9,400,000	9,900,000
Terms operating leases	20 year
Time charter for carriers	2
Number of FSO unit and equipment	1
Minimum scheduled future revenues to be received by company in next 12 months	50,100,000
Minimum scheduled future revenues to be received by company in second year	48,700,000
Minimum scheduled future revenues to be received by company in third year	47,800,000
Minimum scheduled future revenues to be received by company in fourth year	47,900,000
Minimum scheduled future revenues to be received by company in fifth year	$ 43,000,000

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Goodwill, Intangible Assets and In-Process Revenue Contracts - Carrying Amount of Goodwill for Company's Reportable Segment (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2012
Segment Reporting Information [Line Items]
Goodwill, Beginning balance	$ 203,191	$ 166,539
Impairment loss	(36,652)
Goodwill, Ending balance	166,539	166,539
Shuttle tanker and FSO segment [Member]
Segment Reporting Information [Line Items]
Goodwill, Beginning balance	130,908	130,908
Impairment loss
Goodwill, Ending balance	130,908	130,908
Liquefied Gas Segment [Member]
Segment Reporting Information [Line Items]
Goodwill, Beginning balance	35,631	35,631
Impairment loss
Goodwill, Ending balance	35,631	35,631
Conventional tanker segment [Member]
Segment Reporting Information [Line Items]
Goodwill, Beginning balance	36,652
Impairment loss	(36,652)
Goodwill, Ending balance

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Supplemental Cash Flow Information

12 Months Ended

Dec. 31, 2012

Supplemental Cash Flow Information

17. Supplemental Cash Flow Information

a) The changes in operating assets and liabilities for the years ended December 31, 2012, 2011, and 2010, are as follows:

	Year Ended December 31,
	2012			2011			2010
Accounts receivable		(132,873	)		(68,914	)		(21,820	)
Prepaid expenses and other assets		19,741			(8,225	)		12,719
Accounts payable		18,408			12,216			(11,002	)
Accrued and other liabilities		(20,485	)		(19,424	)		65,518
		(115,209	)		(84,347	)		45,415

b) Cash interest paid, including realized interest rate swap settlements, during the years ended December 31, 2012, 2011, and 2010, totaled $274.2 million, $279.1 million and $271.3 million, respectively. In addition, during the years ended December 31, 2012, 2011, and 2010, cash interest paid relating to interest rate swap amendments and terminations totaled $nil, $149.7 million and $nil, respectively.

c) During the year ended December 31, 2010, an unrelated party contributed a shuttle tanker with a value of $35.0 million to a subsidiary of the Company in exchange for a 33% equity interest in the subsidiary as described in Note 16(e) to these consolidated financial statements. This contribution has been treated as a non-cash transaction in the Company’s consolidated statement of cash flows.

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

Components of Company's Deferred Tax Assets and Liabilities

The significant components of the Company’s deferred tax assets and liabilities are as follows:

	December  31, 2012 $			December  31, 2011 $
Deferred tax assets:
Vessels and equipment		58,825			76,582
Tax losses carried forward(1)		427,443			380,299
Other		64,194			95,312
Total deferred tax assets		550,462			552,193
Deferred tax liabilities:
Vessels and equipment		26,503			60,776
Long-term debt		33,764			24,918
Other		40,117			45,624
Total deferred tax liabilities		100,384			131,318
Net deferred tax assets		450,078			420,875
Valuation allowance		(421,343	)		(398,559	)
Net deferred tax assets		28,735			22,316

(1) Substantially all of the Company’s net operating loss carryforwards of $1.69 billion relate to its Australian ship-owning subsidiaries and its Norwegian subsidiaries. These net operating loss carryforwards are available to offset future taxable income in the respective jurisdictions, and can be carried forward indefinitely.

Components of Provision for Income Taxes

The components of the provision for income taxes are as follows:

	Year Ended December 31, 2012 $		Year Ended December 31, 2011 $			Year Ended December 31, 2010 $
Current		9,167		(6,768	)		(13,129	)
Deferred		5,239		2,478			19,469
Income tax recovery (expense)		14,406		(4,290	)		6,340

Reconciliations of Income Tax Rates and Actual Tax Charge

Reconciliations of the tax charge related to the relevant year at the applicable statutory income tax rates and the actual tax charge related to the relevant year are as follows:

	Year Ended December 31, 2012 $			Year Ended December 31, 2011 $			Year Ended December 31, 2010 $
Net loss before taxes		(325,522	)		(372,131	)		(172,975	)
Net loss not subject to taxes		(129,307	)		(341,473	)		(416,684	)
Net (loss) income subject to taxes		(196,215	)		(30,658	)		243,709
At applicable statutory tax rates		(15,808	)		(8,987	)		57,737
Permanent and currency differences		(253,143	)		(172,368	)		(104,514	)
Adjustments to valuation allowances and uncertain tax positions		250,327			179,675			40,863
Other		4,218			5,970			(426	)
Tax expense (recovery) related to the current year		(14,406	)		4,290			(6,340	)

Unrecognized Tax Benefits, Recorded in Other Long-term Liabilities

The following is a roll-forward of the Company’s unrecognized tax benefits, recorded in other long-term liabilities, from January 1, 2010 to December 31, 2012:

	Year ended December 31, 2012 $			Year ended December 31, 2011 $			Year ended December 31, 2010 $
Balance of unrecognized tax benefits as at January 1		39,804			45,302			40,943
Increase for positions taken in prior years		—			83			4,037
Increase for positions related to the current year		4,560			3,308			8,979
Decreases for positions taken in prior years		(5,085	)		—			(4,557	)
Decreases related to statute of limitations		(9,915	)		(8,889	)		(4,100	)
Balance of unrecognized tax benefits as at December 31		29,364			39,804			45,302

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Operating and Direct Financing Leases (Tables)

12 Months Ended

Dec. 31, 2012

Estimated Future Minimum Rental Payments to be Received and Paid Under Lease Contracts

As at December 31, 2012, the total estimated future minimum rental payments to be received and paid under the lease contracts are as follows:

Year	Head Lease Receipts (1)		Sublease Payments(1)(2)
2013		28,843		24,779
2014		28,828		24,779
2015		22,188		24,779
2016		21,242		24,779
2017		21,242		24,779
Thereafter		239,063		278,884
Total	$	361,406	$	402,779

(1) The Head Leases are fixed-rate operating leases while the Subleases have a small variable-rate component. As at December 31, 2012, the Teekay Tangguh Subsidiary had received $149.0 million of aggregate Head Lease receipts and had paid $90.6 million of aggregate Sublease payments. The portion of the Head Lease receipts that haven’t been recognized into earnings are deferred and amortized on a straight line basis over the lease terms and as at December 31, 2012, $39.1 million of Head Lease receipts had been deferred and included in other long-term liabilities in the Company’s consolidated balance sheets.

(2) The amount of payments under the Subleases are updated annually to reflect any changes in the lease payments due to changes in tax law.

Net Investment in Direct Financing Leases

The time-charters for two of the Company’s LNG carriers, one FSO unit and equipment that reduce volatile organic compound emissions (or VOC equipment) are accounted for as direct financing leases. The following table lists the components of the net investments in direct financing leases:

	December  31, 2012 $			December  31, 2011 $
Total minimum lease payments to be received		675,013			741,604
Estimated unguaranteed residual value of leased properties		203,465			203,465
Initial direct costs and other		1,409			1,636
Less unearned revenue		(443,286	)		(486,797	)
Total		436,601			459,908
Less current portion		12,303			23,171
Long-term portion		424,298			436,737

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Long-Term Debt - Summary of Long-Term Debt (Detail)	Dec. 31, 2012 USD ($)	Dec. 31, 2011 USD ($)	Dec. 31, 2012 Revolving credit facilities [Member] USD ($)	Dec. 31, 2011 Revolving credit facilities [Member] USD ($)	Dec. 31, 2012 Senior Notes (8.5%) due January 15, 2020 [Member] USD ($)	Dec. 31, 2011 Senior Notes (8.5%) due January 15, 2020 [Member] USD ($)	Dec. 31, 2012 Norwegian Kroner-denominated Bonds due through May 2017 [Member] USD ($)	Dec. 31, 2011 Norwegian Kroner-denominated Bonds due through May 2017 [Member] USD ($)	Dec. 31, 2012 U.S. Dollar-denominated Term Loans due through 2021 [Member] USD ($)	Dec. 31, 2011 U.S. Dollar-denominated Term Loans due through 2021 [Member] USD ($)	Dec. 31, 2012 U.S. Dollar-denominated Term Loan Variable Interest Entity due October 2016 [Member] USD ($)	Dec. 31, 2011 U.S. Dollar-denominated Term Loan Variable Interest Entity due October 2016 [Member] USD ($)	Dec. 31, 2012 Euro-denominated Term Loans due through 2023 [Member] USD ($)	Dec. 31, 2012 Euro-denominated Term Loans due through 2023 [Member] EUR (€)	Dec. 31, 2011 Euro-denominated Term Loans due through 2023 [Member] USD ($)	Dec. 31, 2011 Euro-denominated Term Loans due through 2023 [Member] EUR (€)	Dec. 31, 2012 U.S. Dollar-denominated Unsecured Demand Loans due to Joint Venture Partners [Member] USD ($)	Dec. 31, 2011 U.S. Dollar-denominated Unsecured Demand Loans due to Joint Venture Partners [Member] USD ($)	Dec. 31, 2012 Co-venturer [Member] U.S. Dollar-denominated Unsecured Demand Loans due to Joint Venture Partners [Member] USD ($)	Dec. 31, 2011 Co-venturer [Member] U.S. Dollar-denominated Unsecured Demand Loans due to Joint Venture Partners [Member] USD ($)
Debt Instrument [Line Items]
Total	$ 5,559,714,000	$ 5,444,373,000	$ 1,627,979,000	$ 2,244,634,000	$ 447,115,000	$ 446,825,000	$ 467,223,000	$ 100,417,000	$ 2,432,374,000	$ 2,069,860,000	$ 230,359,000	$ 220,450,000	$ 341,382,000	€ 258,800,000	$ 348,905,000	€ 269,200,000	$ 13,300,000	$ 13,300,000	$ 13,282,000	$ 13,282,000
Less current portion	797,411,000	401,376,000
Long-term portion	$ 4,762,303,000	$ 5,042,997,000

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Derivative Instruments and Hedging Activities - Location and Fair Value Amounts of Derivative Instruments (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Derivatives, Fair Value [Line Items]
Current Portion of Derivative Assets	$ 31,669	$ 24,712
Derivative Assets	148,581	140,557
Accrued Liabilities	(21,593)	(24,525)
Current Portion of Derivative Liabilities	(115,835)	(117,337)
Derivative Liabilities	(528,187)	(569,542)
Derivatives designated as a cash flow hedge [Member] | Foreign currency contracts [Member]
Derivatives, Fair Value [Line Items]
Current Portion of Derivative Assets	441	1,551
Derivative Assets		28
Current Portion of Derivative Liabilities	(1)	(1,192)
Derivative Liabilities		(264)
Derivatives not designated as a cash flow hedge [Member] | Foreign currency contracts [Member]
Derivatives, Fair Value [Line Items]
Current Portion of Derivative Assets	2,506	2,592
Derivative Assets		3
Current Portion of Derivative Liabilities	(60)	(6,248)
Derivative Liabilities		(832)
Derivatives not designated as a cash flow hedge [Member] | Interest rate swap agreements [Member]
Derivatives, Fair Value [Line Items]
Current Portion of Derivative Assets	16,927	15,608
Derivative Assets	144,247	139,651
Accrued Liabilities	(22,312)	(24,750)
Current Portion of Derivative Liabilities	(115,774)	(109,897)
Derivative Liabilities	(525,225)	(568,446)
Derivatives not designated as a cash flow hedge [Member] | Cross currency swap agreements [Member]
Derivatives, Fair Value [Line Items]
Current Portion of Derivative Assets	11,795	1,576
Derivative Assets	4,334	875
Accrued Liabilities	719	225
Derivative Liabilities	(2,962)
Derivatives not designated as a cash flow hedge [Member] | Foinaven embedded derivative [Member]
Derivatives, Fair Value [Line Items]
Current Portion of Derivative Assets		$ 3,385

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Acquisitions (Tables)

12 Months Ended

Dec. 31, 2012

Summarized Balance Sheet of Variable Interest Entity (VIE)

The following table summarizes the balance sheet of the Voyageur Spirit as at December 31, 2012:

	$
ASSETS
Cash and cash equivalents		9,756
Other current assets		11,380
Vessels and equipment		455,819
Deferred tax assets		1,955
Total assets		478,910
LIABILITIES AND EQUITY
Accounts payable		18,359
Accrued liabilities		3,687
Long-term debt(note 8)		230,359
Derivative liabilities		4,509
Other long-term liabilities		13,344
Total liabilities		270,258
Total equity		208,652
Total liabilities and total equity		478,910

Summary of Preliminary and Final Fair Values of Assets Acquired and Liabilities Assumed, Including VIE

The following table summarizes the preliminary and final purchase price allocation, which included the Voyageur Spirit VIE, by the Company at November 30, 2011:

	Preliminary $			Revisions $			Final $
ASSETS
Cash and cash equivalents		50,230			—			50,230
Other current assets		29,209			—			29,209
Vessels and equipment		869,952			22,400			892,352
Deferred income taxes		3,307			—			3,307
Investment in Sevan Marine		49,200			(12,100	)		37,100
Other assets—long-term		659			—			659
Total assets acquired		1,002,557			10,300			1,012,857
Current liabilities		41,376			—			41,376
In-process revenue contracts		158,968			—			158,968
Long-term debt (note 8)		220,497			—			220,497
Other long-term liabilities		6,036			—			6,036
Non-controlling interest		144,600			—			144,600
Total liabilities assumed		571,477			—			571,477
Net assets acquired		431,080			—			441,380
Bargain purchase gain		(58,235	)		(10,300	)		(68,535	)
Cash consideration		372,845			—			372,845

Comparative Summarized Consolidated Pro Forma Financial Information

The following table shows comparative summarized consolidated pro forma financial information for the Company for the years ended December 31, 2011 and 2010, giving effect to the Company’s acquisition of the Sevan FPSO units as if it had taken place on January 1, 2010:

	Pro Forma Year Ended December 31, 2011 (unaudited) $			Pro Forma Year Ended December 31, 2010 (unaudited) $
Revenues		2,109,929			2,284,336
Net loss		(372,132	)		(176,456	)
Loss per common share
- Basic		(5.03	)		(3.79	)
- Diluted		(5.03	)		(3.79	)

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Equity Accounted Investments (Tables)

12 Months Ended

Dec. 31, 2012

Condensed Summary of Company's Investments in and Advances to Joint Ventures

A condensed summary of the Company’s investments in and advances to equity accounted investments are as follows (in thousands of dollars, except percentages):

				As at December 31,
Investments in Equity Accounted Investments	Ownership Percentage			2012 $		2011 $
Malt Joint Venture (note 3b)		52	%		183,724		—
RasGas 3 Joint Venture		40	%		107,386		97,423
Exmar Joint Venture		50	%		82,737		81,242
Angola Joint Venture		33	%		28,699		16,063
Sevan Marine Equity Investment (note 3a)		43	%		39,223		34,898
Tiro and Sidon Joint Venture		50	%		30,024		—
Other		40% to 50%			8,250		10,911
Total					480,043		240,537
				As at December 31,
Loans to Equity Accounted Investees	Ownership Percentage			2012		2011
Sevan Marine Equity Investment		43	%		133,000		50,000
Tiro and Sidon Joint Venture		50	%		18,121		—
Other		40% to 50%			55,782		35,248
Total					206,903		85,248

Condensed Summary of Company's Financial Information for Joint Venture

A condensed summary of the Company’s financial information for equity accounted investments (33% to 52% owned) shown on a 100% basis are as follows:

	As at December 31,
	2012 (1)(2)		2011 (2)
Cash and restricted cash		229,963		184,296
Other assets- current		125,152		105,925
Vessels and equipment		2,114,435		462,335
Net investment in direct financing leases		1,938,011		1,728,902
Other assets—non-current		228,887		188,384
Current portion of long-term debt (3)		1,106,706		106,584
Other liabilities—current		193,785		138,945
Long-term debt		1,911,419		1,567,215
Other liabilities—non-current		469,220		395,750

	Year ended December 31,
	2012 (1)(2)			2011 (2)			2010 (4)
Revenues		659,030			303,607			232,516
Income from vessel operations		241,702			118,408			91,290
Realized and unrealized loss on derivative instruments		(56,307	)		(127,230	)		(95,750	)
Net income (loss)		120,395			(48,996	)		(44,794	)

(1) The results included for the Teekay LNG-Marubeni Joint Venture are from the date of acquisition of the MALT LNG Carriers which were acquired on February 28, 2012.

(2) The results included for the Angola Joint Venture are from the time the vessels were delivered in August, September, October 2011 and January 2012, respectively.

(3) The Teekay LNG-Marubeni Joint Venture expects to refinance its existing debt facility maturing in August 2013 with two long-term project facilities and a medium-term facility, secured by all of the vessels under the joint venture as well as through several guarantees from the joint venture partners based on their relative share holdings.

(4) The results included for the Excalibur and Excelsior Joint Ventures are from November 4, 2010.

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Acquisitions - Comparative Summarized Consolidated Pro Forma Financial Information (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Business Acquisition Pro Forma Information [Line Items]
REVENUES	$ 2,109,929	$ 2,284,336
Net loss	$ (372,132)	$ (176,456)
Loss per common share
Basic	$ (5.03)	$ (3.79)
Diluted	$ (5.03)	$ (3.79)

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Income Taxes - Components of Provision for Income Taxes (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Income Tax Disclosure [Abstract]
Current	$ 9,167	$ (6,768)	$ (13,129)
Deferred	5,239	2,478	19,469
Income tax recovery (expense)	$ 14,406	$ (4,290)	$ 6,340

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Segment Reporting - Reconciliation of Total Segment Assets (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Segment Reporting Information [Line Items]
Total assets of all segments	$ 9,719,938	$ 9,915,929
Cash	639,491	692,127	779,748	422,510
Accounts receivable and other assets	642,596	529,621
Total assets	$ 11,002,025	$ 11,137,677

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Derivative Instruments and Hedging Activities (Tables)

12 Months Ended

Dec. 31, 2012

Commitment of Foreign Currency Forward Contracts

As at December 31, 2012, the Company was committed to the following foreign currency forward contracts:

					Fair Value /Carrying Amount
	Contract Amount in Foreign Currency (millions)		Average Forward  Rate (1)		of Asset (Liability)					Expected Maturity
					Hedge		Non-hedge			2013
					$		$			$
					(in millions of U.S. Dollars)					(in millions of U.S. Dollars)
Norwegian Kroner		201.0		5.93		—		2.1			33.9
Euro		9.8		0.76		—		(0.1	)		13.0
Canadian Dollar		9.3		1.01		0.2		—			9.2
British Pound		11.3		0.64		0.3		0.4			17.6
						0.5		2.4			73.7

(1) Average contractual exchange rate represents the contracted amount of foreign currency one U.S. Dollar will buy.

Commitment of Cross Currency Swaps

As at December 31, 2012, the Company was committed to the following cross currency swaps:

	Notional Amount		Notional Amount		Floating Rate Receivable					Floating Rate Payable								Fair Value / Carrying Amount of Asset /
Maturity					Reference					Reference					Fixed Rate
Date	NOK		USD		Rate		Margin			Rate		Margin			Payable			Liability
2013		600,000		98,500		NIBOR		4.75	%		LIBOR		5.04	%			(1)		9,890
2015		700,000		122,800		NIBOR		4.75	%							5.52	%		3,075
2017		600,000		101,400		NIBOR		5.75	%							7.49	%		3,545
2017		700,000		125,000		NIBOR		5.25	%							6.88	%		(2,624	)
																			13,886

(1) LIBOR subsequently fixed at 1.1%, subject to a LIBOR rate receivable cap of 3.5% (see next section).

Interest Rate Swap Agreements

As at December 31, 2012, the Company was committed to the following interest rate swap agreements related to its LIBOR-based debt, restricted cash deposits and EURIBOR-based debt, whereby certain of the Company’s floating-rate debt and restricted cash deposits were swapped with fixed-rate obligations or fixed-rate deposits:

	Interest Rate Index		Principal Amount $		Fair Value / Carrying Amount of Asset / (Liability) $			Weighted- Average Remaining Term (years)		Fixed Interest Rate (%) (1)
LIBOR-Based Debt:
U.S. Dollar-denominated interest rate swaps (2)		LIBOR		412,880		(110,590	)		24.1		4.9
U.S. Dollar-denominated interest rate swaps (3)		LIBOR		3,170,273		(515,124	)		7.9		4.1
U.S. Dollar-denominated interest rate swaps (4)		LIBOR		98,500		(782	)		0.9		1.1
LIBOR-Based Restricted Cash Deposit:
U.S. Dollar-denominated interest rate swaps (2)		LIBOR		469,260		165,688			24.1		4.8
EURIBOR-Based Debt:
Euro-denominated interest rate swaps (5) (6)		EURIBOR		341,382		(41,329	)		11.5		3.1
				4,492,295		(502,137	)

(1) Excludes the margins the Company pays on its variable-rate debt, which, as of December 31, 2012, ranged from 0.3% to 4.25%.

(2) Principal amount reduces quarterly.

(3) Principal amount of $200 million is fixed at 2.14%, unless LIBOR exceeds 6%, in which case the Company pays a floating rate of interest.

(4) The floating LIBOR rate receivable is capped at 3.5%, which effectively results in a fixed rate of 1.12% unless LIBOR exceeds 3.5%, in which case the Company’s related interest rate effectively floats at LIBOR reduced by 2.38%.

(5) Principal amount reduces monthly to 70.1 million Euros ($92.5 million) by the maturity dates of the swap agreements.

(6) Principal amount is the U.S. Dollar equivalent of 258.8 million Euros.

Location and Fair Value Amounts of Derivative Instruments

The following table presents the location and fair value amounts of derivative instruments, segregated by type of contract, on the Company’s consolidated balance sheets.

	Current							Current
	Portion of							Portion of
	Derivative		Derivative		Accrued			Derivative			Derivative
	Assets		Assets		Liabilities			Liabilities			Liabilities
As at December 31, 2012
Derivatives designated as a cash flow hedge:
Foreign currency contracts		441		—		—			(1	)		—
Derivatives not designated as a cash flow hedge:
Foreign currency contracts		2,506		—		—			(60	)		—
Interest rate swap agreements		16,927		144,247		(22,312	)		(115,774	)		(525,225	)
Cross currency swap agreements		11,795		4,334		719			—			(2,962	)
		31,669		148,581		(21,593	)		(115,835	)		(528,187	)
As at December 31, 2011
Derivatives designated as a cash flow hedge:
Foreign currency contracts		1,551		28		—			(1,192	)		(264	)
Derivatives not designated as a cash flow hedge:
Foreign currency contracts		2,592		3		—			(6,248	)		(832	)
Interest rate swap agreements		15,608		139,651		(24,750	)		(109,897	)		(568,446	)
Cross currency swap agreements		1,576		875		225			—			—
Foinaven embedded derivative		3,385		—		—			—			—
		24,712		140,557		(24,525	)		(117,337	)		(569,542	)

Effective Portion of Gains (Losses) on Foreign Currency Contracts

For the periods indicated, the following table presents the effective portion of gains (losses) on foreign currency contracts designated and qualifying as cash flow hedges that was recognized in (1) accumulated other comprehensive income (loss) (or AOCI), (2) recorded in accumulated other comprehensive income (loss) during the term of the hedging relationship and reclassified to earnings, and (3) the ineffective portion of gains (losses) on derivative instruments designated and qualifying as cash flow hedges.

Year Ended December 31, 2012							Year Ended December 31, 2011
Balance Sheet (AOCI)	Statement of Loss						Balance Sheet (AOCI)		Statement of Loss
Effective Portion	Effective		Ineffective Portion				Effective Portion		Effective Portion		Ineffective Portion
2,412		—		—		Vessel operating expenses		2,007		918		(568	)	Vessel operating expenses
		1,436		(660	)	General and administrative expenses				4,636		(223	)	General and administrative expenses
2,412		1,436		(660	)			2,007		5,554		(791	)

Year Ended December 31, 2010
Balance Sheet (AOCI)		Statement of Loss
Effective Portion		Effective Portion			Ineffective Portion
	(3,559)		(680	)		(3,473	)	Vessel operating expenses
			(2,360	)		(1,402	)	General and administrative expenses
	(3,559)		(3,040	)		(4,875	)

Effect of (Loss) Gain on Derivatives Not Designated as Hedging Instruments

The effect of the (loss) gain on derivatives not designated as hedging instruments in the statements of loss are as follows:

	Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,
	2012			2011			2010
	$			$			$
Realized (losses) gains relating to:
Interest rate swap agreements		(123,277	)		(132,931	)		(154,098	)
Interest rate swap agreement amendments		—			(149,666	)		—
Foreign currency forward contracts		1,155			9,965			(2,274	)
Forward freight agreements and bunker fuel swap contracts		—			36			(7,914	)
Foinaven embedded derivative		11,452			—			—
		(110,670	)		(272,596	)		(164,286	)
Unrealized gains (losses) relating to:
Interest rate swap agreements		26,770			(58,405	)		(146,780	)
Foreign currency forward contracts		6,933			(11,399	)		6,307
Forward freight agreements and bunker fuel swap contracts		—			—			(108	)
Foinaven embedded derivative		(3,385	)		(322	)		5,269
		30,318			(70,126	)		(135,312	)
Total realized and unrealized losses on derivative instruments		(80,352	)		(342,722	)		(299,598	)

Effect of Gain (Loss) on Cross Currency Swaps

Realized and unrealized gains (losses) of the cross currency swaps are recognized in earnings and reported in foreign currency exchange gain (loss) in the consolidated statements of loss. The effect of the gain (loss) on cross currency swaps on the consolidated statements of loss is as follows:

	Year Ended December 31,
	2012		2011			2010
	$		$			$
Realized gains		3,628		2,881			198
Unrealized gains (losses)		10,715		(1,583	)		4,034
Total realized and unrealized gains on cross currency swaps		14,343		1,298			4,232

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Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2012

Summary of Significant Accounting Policies

1. Summary of Significant Accounting Policies

Basis of presentation

The consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (or GAAP). They include the accounts of Teekay Corporation (or Teekay), which is incorporated under the laws of The Republic of the Marshall Islands, and its wholly-owned or controlled subsidiaries (collectively, the Company). Significant intercompany balances and transactions have been eliminated upon consolidation.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates. Given the current credit markets, it is possible that the amounts recorded as derivative assets and liabilities could vary by material amounts.

Certain of the comparative figures have been reclassified to conform with the presentation adopted in the current period relating to the reclassification of prepaid expenses of $10.1 million less accounts payable of $4.0 million as at December 31, 2011 into accounts receivable in the consolidated balance sheets.

Reporting currency

The consolidated financial statements are stated in U.S. Dollars. The functional currency of the Company is the U.S. Dollar because the Company operates in the international shipping market, which typically utilizes the U.S. Dollar as the functional currency. Transactions involving other currencies during the year are converted into U.S. Dollars using the exchange rates in effect at the time of the transactions. At the balance sheet date, monetary assets and liabilities that are denominated in currencies other than the U.S. Dollar are translated to reflect the year-end exchange rates. Resulting gains or losses are reflected separately in the accompanying consolidated statements of loss.

Operating revenues and expenses

The Company recognizes revenues from time-charters and bareboat charters daily over the term of the charter as the applicable vessel operates under the charter. The Company does not recognize revenue during days that the vessel is off hire. When the time-charter contains a profit-sharing agreement, the Company recognizes the profit-sharing or contingent revenue only after meeting the profit sharing or other contingent threshold. All revenues from voyage charters are recognized on a percentage of completion method. The Company uses a discharge-to-discharge basis in determining percentage of completion for all spot voyages and voyages servicing contracts of affreightment, whereby it recognizes revenue ratably from when product is discharged (unloaded) at the end of one voyage to when it is discharged after the next voyage. The Company does not begin recognizing revenue until a charter has been agreed to by the customer and the Company, even if the vessel has discharged its cargo and is sailing to the anticipated load port on its next voyage. Shuttle tanker voyages servicing contracts of affreightment with offshore oil fields commence with tendering of notice of readiness at a field, within the agreed lifting range, and ends with tendering of notice of readiness at a field for the next lifting. Revenues from floating production, storage and offloading (or FPSO) contracts are recognized as service is performed. Certain of the Company’s FPSO units receive incentive-based revenue, which is recognized when earned by fulfillment of the applicable performance criteria. Revenues and expenses relating to engineering studies are recognized when service is completed, unless the expenses are not recoverable in which case the expenses are recognized as incurred. The consolidated balance sheets reflect the deferred portion of revenues and expenses, which will be earned in subsequent periods.

Revenues and voyage expenses of the Company’s vessels operating in pool arrangements with unrelated parties are pooled with the revenues and voyage expenses of other pool participants. The resulting net pool revenues, calculated on the time-charter-equivalent basis, are allocated to the pool participants according to an agreed formula. The Company accounts for the net allocation from the pool as revenues and amounts due from the pool are included in accounts receivable.

Voyage expenses are all expenses unique to a particular voyage, including bunker fuel expenses, port fees, cargo loading and unloading expenses, canal tolls, agency fees and commissions. Vessel operating expenses include crewing, repairs and maintenance, insurance, stores, lube oils and communication expenses. Voyage expenses and vessel operating expenses are recognized when incurred.

Cash and cash equivalents

The Company classifies all highly liquid investments with a maturity date of three months or less at inception as cash equivalents.

Accounts receivable and allowance for doubtful accounts

Accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in existing accounts receivable. The Company determines the allowance based on historical write-off experience and customer economic data. The Company reviews the allowance for doubtful accounts regularly and past due balances are reviewed for collectability. Account balances are charged off against the allowance when the Company believes that the receivable will not be recovered. There were no significant amounts recorded as allowance for doubtful accounts as at December 31, 2012, 2011, and 2010.

Marketable securities

The Company’s investments in marketable securities are classified as available-for-sale securities and are carried at fair value. Net unrealized gains and losses on available-for-sale securities are reported as a component of accumulated other comprehensive loss. Realized gains and losses on available-for-sale securities are computed based upon the historical cost of these securities applied using the weighted-average historical cost method.

The Company analyzes its available-for-sale securities for impairment during each reporting period to evaluate whether an event or change in circumstances has occurred in that period that may have a significant adverse effect on the fair value of the investment. The Company records an impairment charge through current-period earnings and adjusts the cost basis for such other-than-temporary declines in fair value when the fair value is not anticipated to recover above cost within a three-month period after the measurement date, unless there are mitigating factors that indicate an impairment charge through earnings may not be required. If an impairment charge is recorded, subsequent recoveries in fair value are not reflected in earnings until sale of the security.

Vessels and equipment

All pre-delivery costs incurred during the construction of newbuildings, including interest, supervision and technical costs, are capitalized. The acquisition cost and all costs incurred to restore used vessels purchased by the Company to the standard required to properly service the Company’s customers are capitalized.

Depreciation is calculated on a straight-line basis over a vessel’s estimated useful life, less an estimated residual value. Depreciation is calculated using an estimated useful life of 25 years for tankers carrying crude oil and refined product, 20 to 30 years for FPSO units, 35 years for liquefied natural gas (or LNG) and 30 years for liquefied petroleum gas (or LPG) carriers, commencing the date the vessel is delivered from the shipyard, or a shorter period if regulations prevent the Company from operating the vessels for those periods of time. Floating storage and off take (or FSO) units are depreciated over the term of the contract. Depreciation includes depreciation on all owned vessels and amortization of vessels accounted for as capital leases. Depreciation of vessels and equipment, excluding amortization of dry docking expenditures, for the years ended December 31, 2012, 2011, and 2010 aggregated $364.3 million, $356.0 million and $355.5 million, respectively. Amortization of vessels accounted for as capital leases was $30.1 million, $34.7 million and $33.5 million for the years ended December 31, 2012, 2011, and 2010, respectively.

Vessel capital modifications include the addition of new equipment or can encompass various modifications to the vessel that are aimed at improving or increasing the operational efficiency and functionality of the asset. This type of expenditure is amortized over the estimated useful life of the modification. Expenditures covering recurring routine repairs and maintenance are expensed as incurred.

Interest costs capitalized to vessels and equipment for the years ended December 31, 2012, 2011, and 2010, aggregated $34.9 million, $8.1 million and $14.0 million, respectively.

Generally, the Company dry docks each tanker and gas carrier every two and a half to five years. The Company capitalizes a substantial portion of the costs incurred during dry docking and amortizes those costs on a straight-line basis over their estimated useful life, which typically is from the completion of a dry docking or intermediate survey to the estimated completion of the next dry docking. The Company includes in capitalized dry docking those costs incurred as part of the dry dock to meet classification and regulatory requirements. The Company expenses costs related to routine repairs and maintenance performed during dry docking, and for annual class survey costs on the Company’s FPSO units.

Dry docking activity for the three years ended December 31, 2012, 2011, and 2010, is summarized as follows:

	Year Ended December 31,
	2012 $			2011 $			2010 $
Balance at the beginning of the year		128,987			143,103			172,053
Costs incurred for drydocking		35,336			54,296			57,156
Dry-dock amortization		(57,082	)		(67,180	)		(86,106	)
Write down / sale of vessels		(6,313	)		(1,232	)		—
Balance at the end of the year		100,928			128,987			143,103

Vessels and equipment that are “held and used” are assessed for impairment when events or circumstances indicate the carrying amount of the asset may not be recoverable. If the asset’s net carrying value exceeds the net undiscounted cash flows expected to be generated over its remaining useful life, the carrying amount of the asset is reduced to its estimated fair value. The estimated fair value for the Company’s impaired vessels is determined using discounted cash flows or appraised values. In cases where an active second hand sale and purchase market does not exist, the Company uses a discounted cash flow approach to estimate the fair value of an impaired vessel. In cases where an active second hand sale and purchase market exists an appraised value is used to estimate the fair value of an impaired vessel. An appraised value is generally the amount the Company would expect to receive if it were to sell the vessel. Such appraisal is normally completed by the Company and based on second-hand sale and purchase data.

Gains on vessels sold and leased back under capital leases are deferred and amortized over the remaining term of the capital lease. Losses on vessels sold and leased back under capital leases are recognized immediately when the fair value of the vessel at the time of sale and lease-back is less than its book value. In such case, the Company would recognize a loss in the amount by which book value exceeds fair value.

Direct financing leases and other loan receivables

The Company (i) employs two vessels on long-term time charters and employs an FSO unit, and (ii) assembles, installs, operates and leases equipment that reduces volatile organic compound emissions (or VOC Equipment) during loading, transportation and storage of oil and oil products, all of which are accounted for as direct financing leases. The lease payments received by the Company under these lease arrangements are allocated between the net investments in the leases and revenues or other income using the effective interest method so as to produce a constant periodic rate of return over the lease terms.

The Company’s investments in loan receivables are recorded at cost. The premium paid over the outstanding principal amount, if any, is amortized to interest income over the term of the loan using the effective interest rate method. The Company analyzes its loans for impairment during each reporting period. A loan is impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. Factors the Company considers in determining that a loan is impaired include, among other things, an assessment of the financial condition of the debtor, payment history of the debtor, general economic conditions, the credit rating of the debtor, the value of any collateral, and any information provided by the debtor regarding its ability to repay the loan. When a loan is impaired, the Company measures the amount of the impairment based on the present value of expected future cash flows discounted at the loan’s effective interest rate and recognizes the resulting impairment in the consolidated statement of loss.

The following table contains a summary of the Company’s financing receivables by type of borrower, the method by which the Company monitors the credit quality of its financing receivables on a quarterly basis, and the grade as of December 31, 2012.

					December 31,
Class of Financing Receivable	Credit Quality Indicator	Grade			2012 $		2011 $
Direct financing leases	Payment activity		Performing			436,601		459,908
Other loan receivables
Investment in term loans and interest receivable	Collateral		Performing(2)			119,385		188,616
Investment in term loans and interest receivable	Collateral		(3	)		69,371		—
Loans to equity accounted investees and joint venture partners (1)	Other internal metrics		Performing			206,903		85,248
Long term receivable included in other assets	Payment activity		Performing			1,704		786
						833,964		734,558

(1) The Company’s subsidiary Teekay LNG Partners L.P. (or Teekay LNG) owns a 99% interest in Teekay Tangguh Borrower LLC (or Teekay Tangguh), which owns a 70% interest in Teekay BLT Corporation (or Teekay Tangguh Subsidiary). During the year ended December 31, 2012, one of Teekay LNG’s joint venture partner’s parent company, PT Berlian Laju Tanker (or BLT), suspended trading on the Jakarta Stock Exchange and entered into a court-supervised restructuring under the Suspension of Payment process in Indonesia, in order to restructure its debts. The Company believes the loans to BLT and Teekay LNG’s joint venture partner, BLT LNG Tangguh Corporation, totaling $24.0 million as at December 31, 2012 (2011—$19.1 million) are collectible given the expected cash flows anticipated to be generated by the Teekay Tangguh Subsidiary that can be used to repay the loan and given the underlying collateral securing the loans to BLT.

(2) Subsequent to December 31, 2012, the borrower did not pay in full the January 31, 2013 interest payment. It is expected that the Company will recover all amounts due under the loan agreements based upon cash flow generated by the borrower, financial support from the borrower’s ultimate parent company and the Company realizing the value of the primary collateral, two 2010-built Very Large Crude Carriers.

(3) As of December 31, 2012, the estimated fair value of the asset that has been pledged as collateral for the loan is greater than 95% of the principal amount of the loan and unpaid interest. Subsequent to the end of the year, the borrower did not pay in full the January 31, 2013 interest payment. Based on a review of the borrower’s financial condition, it is expected that a full recovery of all amounts due under the loan agreement will be dependent upon cash flow generated by the borrower, financial support from the borrower’s ultimate parent company and the Company realizing the value of the primary collateral, a 2011-built Very Large Crude Carrier.

Joint ventures

The Company’s investments in joint ventures are accounted for using the equity method of accounting. Under the equity method of accounting, investments are stated at initial cost and are adjusted for subsequent additional investments and the Company’s proportionate share of earnings or losses and distributions. The Company evaluates its investments in joint ventures for impairment when events or circumstances indicate that the carrying value of such investments may have experienced an other than temporary decline in value below their carrying value. If the estimated fair value is less than the carrying value and is considered an other than temporary decline, the carrying value is written down to its estimated fair value and the resulting impairment is recorded in the consolidated statement of loss.

Debt issuance costs

Debt issuance costs, including fees, commissions and legal expenses, are deferred and presented as other non-current assets. Debt issuance costs of revolving credit facilities are amortized on a straight-line basis over the term of the relevant facility. Debt issuance costs of term loans are amortized using the effective interest rate method over the term of the relevant loan. Amortization of debt issuance costs is included in interest expense.

Derivative instruments

All derivative instruments are initially recorded at fair value as either assets or liabilities in the accompanying consolidated balance sheets and subsequently remeasured to fair value, regardless of the purpose or intent for holding the derivative. The method of recognizing the resulting gain or loss is dependent on whether the derivative contract is designed to hedge a specific risk and whether the contract qualifies for hedge accounting. The Company does not apply hedge accounting to its derivative instruments, except for certain foreign exchange currency contracts and certain types of interest rate swaps that it may enter into in the future (See Note 15).

When a derivative is designated as a cash flow hedge, the Company formally documents the relationship between the derivative and the hedged item. This documentation includes the strategy and risk management objective for undertaking the hedge and the method that will be used to assess the effectiveness of the hedge. Any hedge ineffectiveness is recognized immediately in earnings, as are any gains and losses on the derivative that are excluded from the assessment of hedge effectiveness. The Company does not apply hedge accounting if it is determined that the hedge was not effective or will no longer be effective, the derivative was sold or exercised, or the hedged item was sold, or repaid.

For derivative financial instruments designated and qualifying as cash flow hedges, changes in the fair value of the effective portion of the derivative financial instruments are initially recorded as a component of accumulated other comprehensive loss in total equity. In the periods when the hedged items affect earnings, the associated fair value changes on the hedging derivatives are transferred from total equity to the corresponding earnings line item in the consolidated statements of loss. The ineffective portion of the change in fair value of the derivative financial instruments is immediately recognized in earnings in the consolidated statements of loss. If a cash flow hedge is terminated and the originally hedged item is still considered possible of occurring, the gains and losses initially recognized in total equity remain there until the hedged item impacts earnings, at which point they are transferred to the corresponding earnings line item (e.g. general and administrative expense) item in the consolidated statements of loss. If the hedged items are no longer possible of occurring, amounts recognized in total equity are immediately transferred to the earnings item in the consolidated statements of loss.

For derivative financial instruments that are not designated or that do not qualify as hedges under Financial Accounting Standards Board (or FASB) Accounting Standards Codification (or ASC) 815, Derivatives and Hedging, the changes in the fair value of the derivative financial instruments are recognized in earnings. Gains and losses from the Company’s non-designated interest rate swaps related to long-term debt, capital lease obligations, restricted cash deposits, non-designated bunker fuel swap contracts and forward freight agreements, and non-designated foreign exchange currency forward contracts are recorded in realized and unrealized gain (loss) on non-designated derivative instruments. Gains and losses from the Company’s hedge accounted foreign currency forward contracts are recorded primarily in vessel operating expenses and general and administrative expense. Gains and losses from the Company’s non-designated cross currency swap are recorded in foreign currency exchange (loss) gain in the consolidated statements of loss.

Goodwill and intangible assets

Goodwill is not amortized, but reviewed for impairment at the reporting unit level on an annual basis or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. When goodwill is reviewed for impairment, the Company may elect to assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. Alternatively, the Company may bypass this step and use a fair value approach to identify potential goodwill impairment and, when necessary, measure the amount of impairment. The Company uses a discounted cash flow model to determine the fair value of reporting units, unless there is a readily determinable fair market value. Intangible assets are assessed for impairment when and if impairment indicators exist. An impairment loss is recognized if the carrying amount of an intangible asset is not recoverable and its carrying amount exceeds its fair value.

The Company’s intangible assets consist primarily of acquired time-charter contracts and contracts of affreightment. The value ascribed to the time-charter contracts and contracts of affreightment are being amortized over the life of the associated contract, with the amount amortized each year being weighted based on the projected revenue to be earned under the contracts.

Asset retirement obligation

The Company has an asset retirement obligation (or ARO) relating to the sub-sea production facility associated with the Petrojarl Banff FPSO unit operating in the North Sea. This obligation generally involves restoration of the environment surrounding the facility and removal and disposal of all production equipment. This obligation is expected to be settled at the end of the contract under which the FPSO unit currently operates, which is anticipated no later than 2018. The ARO will be covered in part by contractual payments from FPSO contract counterparties.

The Company records the fair value of an ARO as a liability in the period when the obligation arises. The fair value of the ARO is measured using expected future cash outflows discounted at the Company’s credit-adjusted risk-free interest rate. When the liability is recorded, the Company capitalizes the cost by increasing the carrying amount of the related equipment. Each period, the liability is increased for the change in its present value, and the capitalized cost is depreciated over the useful life of the related asset. Changes in the amount or timing of the estimated ARO are recorded as an adjustment to the related asset and liability. As at December 31, 2012, the ARO and associated receivable which is recorded in other non-current assets from third parties were $24.7 million and $6.4 million, respectively (2011—$21.2 million and $6.1 million, respectively).

Repurchase of common stock

The Company accounts for repurchases of common stock by decreasing common stock by the par value of the stock repurchased. In addition, the excess of the repurchase price over the par value is allocated between additional paid in capital and retained earnings. The amount allocated to additional paid in capital is the pro-rata share of the capital paid in and the balance is allocated to retained earnings.

Issuance of shares or units by subsidiaries

The Company accounts for dilution gains or losses from the issuance of shares or units by its publicly listed subsidiaries as an adjustment to retained earnings.

Share-based compensation

The Company grants stock options, restricted stock units, performance share units and restricted stock awards as incentive-based compensation to certain employees and directors. The Company measures the cost of such awards using the grant date fair value of the award and recognizes that cost, net of estimated forfeitures, over the requisite service period, which generally equals the vesting period. For stock-based compensation awards subject to graded vesting, the Company calculates the value for the award as if it was one single award with one expected life and amortizes the calculated expense for the entire award on a straight-line basis over the vesting period of the award.

Compensation cost for awards with performance conditions is recognized when it is probable that the performance condition will be achieved. The compensation cost of the Company’s stock-based compensation awards are substantially reflected in general and administrative expense.

In 2005, the Company adopted the Vision Incentive Plan (or the VIP) to reward exceptional corporate performance and shareholder returns. This plan was designed to result in an award pool for senior management based on the following two measures: (a) economic profit from 2005 to 2010; and (b) market value added from 2001 to 2010. In March 2008, an interim distribution was made to certain participants with a value of $13.3 million, paid in restricted stock units, with vesting of the interim distribution in three equal amounts on November 2008, November 2009 and November 2010. In September 2009, 187,400 restricted stock units, with two-year bullet vesting, were granted as the June 2009 New Participants Reserve Pool allocation under the VIP. The Plan terminated on December 31, 2010 and no final award was granted to participants. During the year ended December 31, 2012, the Company recorded an expense from the VIP of $nil ($1.3 million – 2011 and $2.4 million – 2010), which is included in general and administrative expense. As at December 31, 2012 and 2011, there was no VIP liability.

Income taxes

The Company accounts for income taxes using the liability method. Under the liability method, deferred tax assets and liabilities are recognized for the anticipated future tax effects of temporary differences between the financial statement basis and the tax basis of the Company’s assets and liabilities using the applicable jurisdictional tax rates. A valuation allowance for deferred tax assets is recorded when it is more likely than not that some or all of the benefit from the deferred tax asset will not be realized.

Recognition of uncertain tax positions is dependent upon whether it is more-likely-than-not that a tax position taken or expected to be taken in a tax return will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. If a tax position meets the more-likely-than-not recognition threshold, it is measured to determine the amount of benefit to recognize in the financial statements. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense.

The Company believes that it and its subsidiaries are not subject to taxation under the laws of the Republic of The Marshall Islands or Bermuda, or that distributions by its subsidiaries to the Company will be subject to any taxes under the laws of such countries, and that it qualifies for the Section 883 exemption under U.S. federal income tax purposes.

Accumulated other comprehensive (loss) income

The following table contains the changes in the balances of each component of accumulated other comprehensive income (loss) for the periods presented.

	Qualifying Cash Flow Hedging Instruments $			Pension Adjustments $			Unrealized Gain (Loss) on Available for Sale Marketable Securities $			Foreign Exchange Loss on Currency Translation $		Total $
Balance as of December 31, 2009		2,923			(10,294	)		5,837			—		(1,534	)
Other comprehensive (loss) income		(628	)		(7,245	)		1,236			—		(6,637	)
Balance as of December 31, 2010		2,295			(17,539	)		7,073			—		(8,171	)
Other comprehensive loss		(2,601	)		(5,402	)		(7,729	)		—		(15,732	)
Balance as of December 31, 2011		(306	)		(22,941	)		(656	)		—		(23,903	)
Other comprehensive income		647			6,688			656			1,144		9,135
Balance as of December 31, 2012		341			(16,253	)		—			1,144		(14,768	)

Employee pension plans

The Company has defined contribution pension plans covering the majority of its employees. Pension costs associated with the Company’s required contributions under its defined contribution pension plans are based on a percentage of employees’ salaries and are charged to earnings in the year incurred. The Company also has defined benefit pension plans covering certain of its employees. The Company accrues the costs and related obligations associated with its defined benefit pension plans based on actuarial computations using the projected benefits obligation method and management’s best estimates of expected plan investment performance, salary escalation, and other relevant factors. For the purpose of calculating the expected return on plan assets, those assets are valued at fair value. The overfunded or underfunded status of the defined benefit pension plans are recognized as assets or liabilities in the consolidated balance sheet. The Company recognizes as a component of other comprehensive loss, the gains or losses that arise during a period but that are not recognized as part of net periodic benefit costs.

Earnings (loss) per common share

The computation of basic earnings (loss) per share is based on the weighted average number of common shares outstanding during the period. The computation of diluted earnings per share assumes the exercise of all dilutive stock options and restricted stock awards using the treasury stock method. The computation of diluted loss per share does not assume such exercises.

Adoption of new accounting pronouncements

In January 2012, the Company adopted an amendment to FASB ASC 820, Fair Value Measurement, which clarifies or changes the application of existing fair value measurements, including: that the highest and best use and valuation premise in a fair value measurement are relevant only when measuring the fair value of nonfinancial assets; that a reporting entity should measure the fair value of its own equity instrument from the perspective of a market participant that holds that instrument as an asset; to permit an entity to measure the fair value of certain financial instruments on a net basis rather than based on its gross exposure when the reporting entity manages its financial instruments on the basis of such net exposure; that in the absence of a Level 1 input, a reporting entity should apply premiums and discounts when market participants would do so when pricing the asset or liability consistent with the unit of account; and that premiums and discounts related to size as a characteristic of the reporting entity’s holding are not permitted in a fair value measurement. The adoption of this standard did not have an impact on the Company’s consolidated financial statements other than the disclosures as presented in note 3 – Financial Instruments.

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Pension Benefits - Changes in Benefit Obligation and Fair Value of Benefit Plans Assets (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Change in benefit obligation:
Contributions by plan participants	$ 692	$ 739
Change in fair value of plan assets:
Beginning balance	110,698	102,085
Actual return on plan assets	2,094	2,931
Contributions by the employer	13,404	12,061
Contributions by plan participants	692	739
Benefits paid	(3,166)	(4,339)
Plan amendments	4,328
Foreign currency exchange rate changes	6,848	(2,357)
Other	(490)	(422)
Ending balance	134,408	110,698
Funded status deficiency	(14,082)	(26,474)
Amounts recognized in the balance sheets:
Other long-term liabilities	14,082	26,474
Accumulated other comprehensive loss:
Net actuarial losses	(19,449)	(19,929)
Benefit obligation [Member]
Change in benefit obligation:
Beginning balance	137,172	120,723
Service cost	10,004	8,829
Interest cost	4,436	5,167
Contributions by plan participants	692	739
Actuarial (gain) loss	(12,059)	9,408
Benefits paid	(3,216)	(4,395)
Plan amendments	6,549
Foreign currency exchange rate changes and other	4,912	(3,299)
Ending balance	148,490	137,172
Change in fair value of plan assets:
Contributions by plan participants	$ 692	$ 739

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Segment Reporting - Revenues and Percentage of Consolidated Revenues (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Statoil ASA [Member]
Segment Reporting Information [Line Items]
Revenue of Significant Customer	$ 299.1	$ 283.7	$ 330.4
Percentage of Revenue of Significant Customer	15.00%	15.00%	16.00%
Petroleo Brasileiro SA [Member]
Segment Reporting Information [Line Items]
Revenue of Significant Customer	289.3	224.9	226.0
Percentage of Revenue of Significant Customer	15.00%	12.00%	11.00%
BP PLC [Member]
Segment Reporting Information [Line Items]
Revenue of Significant Customer			$ 222.2
Percentage of Revenue of Significant Customer			11.00%

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Equity Accounted Investments - Condensed Summary of Company's Financial Information for Joint Venture (Parenthetical) (Detail)	12 Months Ended
	Dec. 31, 2012
Schedule of Equity Method Investments [Line Items]
Date of acquisition	Feb. 28, 2012
Debt maturity date	Aug. 01, 2013

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Capital Lease Obligations and Restricted Cash (Tables)

12 Months Ended

Dec. 31, 2012

Capital Lease Obligations

Capital Lease Obligations

	December  31, 2012 $		December  31, 2011 $
RasGas II LNG Carriers		472,085		471,397
Suezmax Tankers		165,489		175,650
Total		637,574		647,047
Less current portion		70,272		47,203
Long-term portion		567,302		599,844

Schedule of Repayments of Capital Leases Including Imputed Interest

As at December 31, 2012, the commitments under these capital leases approximated $977.1 million, including imputed interest of ($505.0) million, repayable as follows:

Year	Commitment
2013	$	24,000
2014	$	24,000
2015	$	24,000
2016	$	24,000
2017	$	24,000
Thereafter	$	857,128

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Income Taxes

12 Months Ended

Dec. 31, 2012

Income Taxes

21. Income Taxes

Teekay and a majority of its subsidiaries are not subject to income tax in the jurisdictions in which they are incorporated because they do not conduct business or operate in those jurisdictions. However, among others, the Company’s Australian ship-owing subsidiaries and its Norwegian subsidiaries are subject to income taxes.

The significant components of the Company’s deferred tax assets and liabilities are as follows:

	December  31, 2012 $			December  31, 2011 $
Deferred tax assets:
Vessels and equipment		58,825			76,582
Tax losses carried forward(1)		427,443			380,299
Other		64,194			95,312
Total deferred tax assets		550,462			552,193
Deferred tax liabilities:
Vessels and equipment		26,503			60,776
Long-term debt		33,764			24,918
Other		40,117			45,624
Total deferred tax liabilities		100,384			131,318
Net deferred tax assets		450,078			420,875
Valuation allowance		(421,343	)		(398,559	)
Net deferred tax assets		28,735			22,316

Net deferred tax assets are presented in other non-current assets in the accompanying consolidated balance sheets.

(1) Substantially all of the Company’s net operating loss carryforwards of $1.69 billion relate to its Australian ship-owning subsidiaries and its Norwegian subsidiaries. These net operating loss carryforwards are available to offset future taxable income in the respective jurisdictions, and can be carried forward indefinitely.

The components of the provision for income taxes are as follows:

	Year Ended December 31, 2012 $		Year Ended December 31, 2011 $			Year Ended December 31, 2010 $
Current		9,167		(6,768	)		(13,129	)
Deferred		5,239		2,478			19,469
Income tax recovery (expense)		14,406		(4,290	)		6,340

The Company operates in countries that have differing tax laws and rates. Consequently, a consolidated weighted average tax rate will vary from year to year according to the source of earnings or losses by country and the change in applicable tax rates. Reconciliations of the tax charge related to the relevant year at the applicable statutory income tax rates and the actual tax charge related to the relevant year are as follows:

	Year Ended December 31, 2012 $			Year Ended December 31, 2011 $			Year Ended December 31, 2010 $
Net loss before taxes		(325,522	)		(372,131	)		(172,975	)
Net loss not subject to taxes		(129,307	)		(341,473	)		(416,684	)
Net (loss) income subject to taxes		(196,215	)		(30,658	)		243,709
At applicable statutory tax rates		(15,808	)		(8,987	)		57,737
Permanent and currency differences		(253,143	)		(172,368	)		(104,514	)
Adjustments to valuation allowances and uncertain tax positions		250,327			179,675			40,863
Other		4,218			5,970			(426	)
Tax expense (recovery) related to the current year		(14,406	)		4,290			(6,340	)

The following is a roll-forward of the Company’s unrecognized tax benefits, recorded in other long-term liabilities, from January 1, 2010 to December 31, 2012:

	Year ended December 31, 2012 $			Year ended December 31, 2011 $			Year ended December 31, 2010 $
Balance of unrecognized tax benefits as at January 1		39,804			45,302			40,943
Increase for positions taken in prior years		—			83			4,037
Increase for positions related to the current year		4,560			3,308			8,979
Decreases for positions taken in prior years		(5,085	)		—			(4,557	)
Decreases related to statute of limitations		(9,915	)		(8,889	)		(4,100	)
Balance of unrecognized tax benefits as at December 31		29,364			39,804			45,302

The majority of the net decrease for positions for the year ended December 31, 2012 relates to potential tax on freight income.

The Company does not presently anticipate such uncertain tax positions will significantly increase or decrease in the next 12 months; however, actual developments could differ from those currently expected. The tax years 2008 through 2012 remain open to examination by some of the major taxing jurisdictions in which the Company is subject to tax.

The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. The interest and penalties on unrecognized tax benefits are included in the roll-forward schedule above and are approximately a reduction of $0.8 million in 2012, net of statute barred liabilities, and $1.8 million in 2011 and $1.2 million in 2010.

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Restructuring Charges

12 Months Ended

Dec. 31, 2012

Restructuring Charges

20. Restructuring Charges

During 2012, the Company recognized $7.6 million of restructuring charges. The restructuring charges primarily relate to reorganization of the Company’s marine operations to create better alignment with its conventional tanker business unit and its three publicly-listed subsidiaries and to create a lower-cost organization going forward. The Company expects to incur approximately $12 million of restructuring charges associated with this reorganization. A majority of the reorganization has been completed in 2012; however, certain portions will not be completed until the first half of 2013. As at December 31, 2012, $3.4 million of restructuring liabilities were recorded in accrued liabilities on the consolidated balance sheet.

During 2011, the Company incurred $5.5 million of restructuring costs. The restructuring costs were primarily related to the sale of an FSO unit, the Karratha Spirit, and the termination of the time-charter for the shuttle tanker Basker Spirit. The Company committed to plans for termination of the employment of certain seafarers of the two vessels. At December 31, 2011 and 2012, no restructuring liability was recorded in accrued liabilities on the consolidated balance sheet.

During 2010, the Company incurred $16.4 million of restructuring costs. The restructuring costs were primarily related to the reflagging of certain vessels, crew changes, and global staffing changes.

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Derivative Instruments and Hedging Activities - Effect of Gain (Loss) on Cross Currency Swaps (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Derivative Instruments, Gain (Loss) [Line Items]
Unrealized gains (losses)	$ 40,373	$ (70,822)	$ (140,187)
Cross currency swaps [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Realized gains	3,628	2,881	198
Unrealized gains (losses)	10,715	(1,583)	4,034
Total realized and unrealized gains on cross currency swaps	$ 14,343	$ 1,298	$ 4,232

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Summary of Significant Accounting Policies - Summary of Financing Receivables (Parenthetical) (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2012 Vessel	Dec. 31, 2011
Financing Receivable, Recorded Investment [Line Items]
Ownership percentage		49.00%
Number of vessels held as collateral	1
Subsequent Event [Member]
Financing Receivable, Recorded Investment [Line Items]
Number of vessels held as collateral	2
Minimum [Member]
Financing Receivable, Recorded Investment [Line Items]
Percentage of carrying value of loan	95.00%
Teekay Tangguh Borrower LLC [Member] | Teekay LNG [Member]
Financing Receivable, Recorded Investment [Line Items]
Ownership percentage	99.00%
Teekay Tangguh Borrower LLC [Member] | Teekay BLT Corporation [Member]
Financing Receivable, Recorded Investment [Line Items]
Ownership percentage	70.00%
Loans to equity accounted investees and joint venture partners carrying value	24.0	19.1

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Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2012

Fair Value of Financial Instruments and Other Non-Financial Assets

The following table includes the estimated fair value and carrying value of those assets and liabilities that are measured at fair value on a recurring and non-recurring basis, as well as the estimated fair value of the Company’s financial instruments that are not accounted for at a fair value on a recurring basis.

			December 31, 2012						December 31, 2011
	Fair Value Hierarchy Level		Carrying Amount Asset (Liability) $			Fair Value Asset (Liability) $			Carrying Amount Asset (Liability) $			Fair Value Asset (Liability) $
Recurring
Cash and cash equivalents, restricted cash, and marketable securities		Level 1		1,178,118			1,178,118			1,200,063			1,200,063
Derivative instruments(note 15)
Interest rate swap agreements—assets(1)		Level 2		165,688			165,688			159,603			159,603
Interest rate swap agreements—liabilities(1)		Level 2		(667,825	)		(667,825	)		(707,437	)		(707,437	)

Cross currency interest swap agreement	Level 2		13,886		13,886		2,677		2,677
Foreign currency contracts	Level 2		2,885		2,885		(4,362	)	(4,362	)
Foinaven embedded derivative	Level 2		—		—		3,385		3,385
Non-recurring
Vessels and equipment(note 18b)	Level 2		287,983		287,983		118,682		118,682
Equity accounted investments(2)	Level 3		—		—		9,623		9,623
Vessels held for sale(note 18b)	Level 2		22,364		22,364		19,000		19,000
Other
Investment in term loans	Level 3		188,756		186,048		189,666		190,939
Loans to equity accounted investees and joint venture partners—Current	Level 3		139,183		139,183		—		—
Loans to equity accounted investees and joint venture partners—Long-term	(3	)	67,720		(3	)	85,248		(3	)
Long-term debt—public(note 8)	Level 1		(914,338	)	(949,326	)	(547,242	)	(533,999	)
Long-term debt—non-public(note 8)	Level 2		(4,645,376	)	(4,329,117	)	(4,897,131	)	(4,538,215	)

(1) The fair value of the Company’s interest rate swap agreements at December 31, 2012 includes $21.6 million (December 31, 2011- $24.5 million) of net accrued interest which is recorded in accrued liabilities and accounts receivable on the consolidated balance sheets.

(2) The fair value measurement used to determine the impairment of the investment in Petrotrans Holdings Ltd. (or PTH) was based upon the estimated liquidation values of the underlying net assets of the investment.

(3) In these consolidated financial statements the Company’s loans to and equity investments in equity accounted investees form the aggregate carrying value of the Company’s interests in entities accounted for by the equity method. In addition, the loans to joint venture partners together with the joint venture partner’s equity investment in joint venture form the net aggregate carrying value of the joint venture partner’s interest in the joint venture. The fair value of the individual components of such aggregate interests is not determinable.

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Pension Benefits

12 Months Ended

Dec. 31, 2012

Pension Benefits

22. Pension Benefits

a) Defined Contribution Pension Plans

With the exception of the Company’s employees in Norway and certain of its employees in Australia, the Company’s employees are generally eligible to participate in defined contribution plans. These plans allow for the employees to contribute a certain percentage of their base salaries into the plans. The Company matches all or a portion of the employees’ contributions, depending on how much each employee contributes. During the years ended December 31, 2012, 2011, and 2010, the amount of cost recognized for the Company’s defined contribution pension plans was $14.5 million, $18.3 million and $17.1million, respectively.

b) Defined Benefit Pension Plans

The Company has a number of defined benefit pension plans (or the Benefit Plans) which primarily cover its employees in Norway and certain employees in Australia. As at December 31, 2012, approximately 71% of the defined benefit pension assets were held by the Norwegian plans and approximately 28% are held by the Australian plan. The pension assets in the Norwegian plans have been guaranteed a minimum rate of return by the provider, thus reducing potential exposure to the Company to the extent the counterparty honors its obligations. Potential exposure to the Company has also been reduced, particularly for the Australian plans, as a result of certain of its time-charter and management contracts that allow the Company, under certain conditions, to recover pension plan costs from its customers.

In 2010, the Norwegian Parliament enacted a new early retirement plan for the private sector in Norway, which was effective January 1, 2011. As a result of the legislation, the Company was substantially released from its obligation under the Company’s prior early retirement plan (a single-employer defined benefit pension plan) and the Company recorded income of $3.7 million in the 2010 consolidated statement of income (loss).

The following table provides information about changes in the benefit obligation and the fair value of the Benefit Plans assets, a statement of the funded status, and amounts recognized on the Company’s balance sheets:

	Year Ended December 31, 2012 $			Year Ended December 31, 2011 $
Change in benefit obligation:
Beginning balance		137,172			120,723
Service cost		10,004			8,829
Interest cost		4,436			5,167
Contributions by plan participants		692			739
Actuarial (gain) loss		(12,059	)		9,408
Benefits paid		(3,216	)		(4,395	)
Plan amendments		6,549			—
Foreign currency exchange rate changes and other		4,912			(3,299	)
Ending balance		148,490			137,172
Change in fair value of plan assets:
Beginning balance		110,698			102,085
Actual return on plan assets		2,094			2,931
Contributions by the employer		13,404			12,061
Contributions by plan participants		692			739
Benefits paid		(3,166	)		(4,339	)
Plan amendments		4,328			—
Foreign currency exchange rate changes		6,848			(2,357	)
Other		(490	)		(422	)
Ending balance		134,408			110,698
Funded status deficiency		(14,082	)		(26,474	)
Amounts recognized in the balance sheets:
Other long-term liabilities		14,082			26,474
Accumulated other comprehensive loss:
Net actuarial losses		(19,449	)		(19,929	)

(1) As at December 31, 2012, the estimated amount that will be amortized from accumulated other comprehensive (loss) income into net periodic benefit cost in 2013 is $(1.2) million.

As of December 31, 2012 and 2011, the accumulated benefit obligation for the Benefit Plans was $115.0 million and $100.4 million, respectively. The following table provides information for those pension plans with a benefit obligation in excess of plan assets and those pension plans with an accumulated benefit obligation in excess of plan assets:

	December 31, 2012 $		December 31, 2011 $
Benefit obligation		125,945		113,460
Fair value of plan assets		106,616		85,432
Accumulated benefit obligation		4,350		35,358
Fair value of plan assets		2,795		31,815

The components of net periodic pension cost relating to the Benefit Plans for the years ended December 31, 2012, 2011 and 2010 consisted of the following:

	Year Ended December 31, 2012 $			Year Ended December 31, 2011 $			Year Ended December 31, 2010 $
Net periodic pension cost:
Service cost		9,921			8,978			8,616
Interest cost		4,392			5,250			5,091
Expected return on plan assets		(5,270	)		(5,805	)		(5,431	)
Amortization of net actuarial loss		1,980			371			281
Other		577			421			(3,390	)
Net cost		11,600			9,215			5,167

The components of other comprehensive loss relating to the Plans for the years ended December 31, 2012, 2011 and 2010 consisted of the following:

	Year Ended December 31, 2012 $		Year Ended December 31, 2011 $			Year Ended December 31, 2010 $
Other comprehensive income (loss):
Net gain (loss) arising during the period		6,143		(12,052	)		(5,711	)
Amortization of net actuarial loss (gain)		1,979		319			(1,026	)
Other loss		—		—			(390	)
Total income (loss)		8,122		(11,733	)		(7,127	)

The Company estimates that it will make contributions into the Benefit Plans of $10.5 million during 2013. The following table provides the estimated future benefit payments, which reflect expected future service, to be paid by the Benefit Plans:

Year	Pension Benefit Payments $
2013		9,264
2014		7,858
2015		6,612
2016		8,491
2017		8,531
2018 – 2022		39,868
Total		80,624

The fair value of the plan assets, by category, as of December 31, 2012 and 2011 were as follows:

	December 31, 2012		December 31, 2011
Pooled Funds (1)		94,981		82,501
Mutual Funds (2)
Equity investments		19,907		13,852
Debt securities		4,298		3,445
Real estate		3,843		2,092
Cash and money market		672		291
Other		10,707		8,517
Total		134,408		110,698

(1) The Company has no control over the investment mix or strategy of the pooled funds. The pooled funds guarantee a minimum rate of return. If actual investment returns are less than the guarantee minimum rate, then the provider’s statutory reserves are used to top up the shortfall. The pooled funds primarily invest in hold to maturity bonds, real estate and other fixed income investments, which are expected to provide a stable rate of return.

(2) The mutual funds primary aim is to provide investors with an exposure to a diversified mix of predominantly growth oriented assets (70%) with moderate to high volatility and some defensive assets (30%).

The investment strategy for all plan assets is generally to actively manage a portfolio that is diversified among asset classes, markets and regions. Certain of the investment funds do not invest in companies that do not meet certain socially responsible investment criteria. In addition to diversification, other risk management strategies employed by the investment funds include gradual implementation of portfolio adjustments and hedging currency risks.

The Company’s plan assets are primarily invested in commingled funds holding equity and debt securities, which are valued using the net asset value (or NAV) provided by the administrator of the fund. The NAV is based on the value of the underlying assets owned by the fund, minus its liabilities, and then divided by the number of shares or units outstanding. Commingled funds are classified within Level 2 of the fair value hierarchy as the NAVs are not publicly available.

The Company has a pension committee that is comprised of various members of senior management. Among other things, the Company’s pension committee oversees the investment and management of the plan assets, with a view to ensuring the prudent and effective management of such plans. In addition, the pension committee reviews investment manager performance results annually and approves changes to the investment managers.

The weighted average assumptions used to determine benefit obligations at December 31, 2012 and 2011 were as follows:

	December 31, 2012			December 31, 2011
Discount rates		3.0	%		3.2	%
Rate of compensation increase		5.5	%		4.4	%

The weighted average assumptions used to determine net pension expense for the years ended December 31, 2012, 2011 and 2010 were as follows:

	Year Ended December 31, 2012 $			Year Ended December 31, 2011 $			Year Ended December 31, 2010 $
Discount rates		3.0	%		3.2	%		4.4	%
Rate of compensation increase		5.5	%		4.4	%		4.6	%
Expected long-term rates of return (1)		4.8	%		5.0	%		5.7	%

(1) To the extent the expected return on plan assets varies from the actual return, an actuarial gain or loss results. The expected long-term rates of return on plan assets are based on the estimated weighted-average long-term returns of major asset classes. In determining asset class returns, the Company takes into account long-term returns of major asset classes, historical performance of plan assets, as well as the current interest rate environment. The asset class returns are weighted based on the target asset allocations.

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Equity Accounted Investments

12 Months Ended

Dec. 31, 2012

Equity Accounted Investments

23. Equity Accounted Investments

The Company has a 33% ownership interest in four newbuilding 160,400-cubic meter LNG carriers (or the Angola LNG Carriers). The Angola LNG Carriers are chartered at fixed rates to the Angola LNG Project (see Note 16b). The Wah Kwong Joint Venture is a joint venture arrangement between Teekay Tankers and Wah Kwong whereby Teekay Tankers holds a 50% interest (see Note 16b). The RasGas 3 Joint Venture is a joint venture arrangement between Teekay LNG and QGTC 3 whereby Teekay LNG holds a 40% interest. The RasGas 3 Joint Venture owns four LNG carriers and related long-term fixed-rate time-charters to service the expansion of a LNG project in Qatar.

In February 2012, the Teekay LNG-Marubeni Joint Venture acquired a 100% interest in the six LNG Carriers from Denmark-based A.P. Moller-Maersk A/S for approximately $1.3 billion. Teekay LNG and Marubeni Corporation (or Marubeni) have 52% and 48% economic interests, respectively, but share control of Teekay LNG-Marubeni Joint Venture. Since control of the Teekay LNG-Marubeni Joint Venture is shared jointly between Marubeni and Teekay LNG, Teekay LNG accounts for its investment in the Teekay LNG-Marubeni Joint Venture using the equity method (see note 3b).

In November 2011, Teekay acquired a 40% interest in a recapitalized Sevan for approximately $25 million (see Note 3a). Sevan owns (i) two partially-completed hulls (#4 and #5) available for upgrade to FPSOs or other offshore projects; (ii) a licensing agreement with ENI SpA; (iii) an engineering and offshore project development business; and (iv) intellectual property rights, including offshore unit design patents. As at November 30, 2011, the fair value of the Company’s interest in Sevan was determined to be $37.1 million. The difference between the fair value of the Company’s 40% interest in Sevan and the price paid has been recognized as a bargain purchase gain in the Company’s consolidated statements of loss. As of December 31, 2012, the aggregate value of the Company’s 43% interest (40% interest —December 31, 2011) in Sevan, based on the quoted market price of Sevan’s common stock on the Oslo Stock Exchange was $83.1 million ($29.4 million – December 31, 2011).

In November 2010, Teekay LNG acquired a 50% interest in companies that own two LNG carriers (collectively, the Exmar Joint Venture) from Exmar NV for a total equity purchase price of approximately $72.5 million (net of assumed debt). Teekay LNG financed $37.3 million of the purchase price by issuing to Exmar NV approximately 1.1 million new common units with the balance financed by drawing on one of Teekay LNG’s revolving credit facilities. As part of the transaction, Teekay LNG agreed to guarantee its 50% share of the $206 million of debt secured by the Exmar Joint Venture. Exmar NV retains a 50% ownership interest in the Exmar Joint Venture. The two vessels acquired are the 2002-built Excalibur, a conventional LNG carrier, and the 2005-built Excelsior, a specialized gas carrier which can both transport and regasify LNG onboard. Both vessels are on long-term, fixed-rate charter contracts to Excelerate Energy LP for firm periods until 2022 and 2025, respectively.

A condensed summary of the Company’s investments in and advances to equity accounted investments are as follows (in thousands of dollars, except percentages):

				As at December 31,
Investments in Equity Accounted Investments	Ownership Percentage			2012 $		2011 $
Malt Joint Venture (note 3b)		52	%		183,724		—
RasGas 3 Joint Venture		40	%		107,386		97,423
Exmar Joint Venture		50	%		82,737		81,242
Angola Joint Venture		33	%		28,699		16,063
Sevan Marine Equity Investment (note 3a)		43	%		39,223		34,898
Tiro and Sidon Joint Venture		50	%		30,024		—
Other		40% to 50%			8,250		10,911
Total					480,043		240,537
				As at December 31,
Loans to Equity Accounted Investees	Ownership Percentage			2012		2011
Sevan Marine Equity Investment		43	%		133,000		50,000
Tiro and Sidon Joint Venture		50	%		18,121		—
Other		40% to 50%			55,782		35,248
Total					206,903		85,248

A condensed summary of the Company’s financial information for equity accounted investments (33% to 52% owned) shown on a 100% basis are as follows:

	As at December 31,
	2012 (1)(2)		2011 (2)
Cash and restricted cash		229,963		184,296
Other assets- current		125,152		105,925
Vessels and equipment		2,114,435		462,335
Net investment in direct financing leases		1,938,011		1,728,902
Other assets—non-current		228,887		188,384
Current portion of long-term debt (3)		1,106,706		106,584
Other liabilities—current		193,785		138,945
Long-term debt		1,911,419		1,567,215
Other liabilities—non-current		469,220		395,750

	Year ended December 31,
	2012 (1)(2)			2011 (2)			2010 (4)
Revenues		659,030			303,607			232,516
Income from vessel operations		241,702			118,408			91,290
Realized and unrealized loss on derivative instruments		(56,307	)		(127,230	)		(95,750	)
Net income (loss)		120,395			(48,996	)		(44,794	)

(1) The results included for the Teekay LNG-Marubeni Joint Venture are from the date of acquisition of the MALT LNG Carriers which were acquired on February 28, 2012.

(2) The results included for the Angola Joint Venture are from the time the vessels were delivered in August, September, October 2011 and January 2012, respectively.

(3) The Teekay LNG-Marubeni Joint Venture expects to refinance its existing debt facility maturing in August 2013 with two long-term project facilities and a medium-term facility, secured by all of the vessels under the joint venture as well as through several guarantees from the joint venture partners based on their relative share holdings.

(4) The results included for the Excalibur and Excelsior Joint Ventures are from November 4, 2010.

For the year ended December 31, 2012, the Company recorded equity income (loss) of $79.2 million (2011 – $(35.3) million and 2010—$(11.3) million). The income or loss was primarily comprised of the Company’s share of net (loss) income from the Teekay LNG-Marubeni Joint Venture, Angola LNG Project, the RasGas 3 Joint Venture, Sevan, and from the Exmar Joint Venture. For the year ended December 31, 2012, $5.3 million of the equity gain related to the Company’s share of unrealized gain (loss) on interest rate swaps associated with these projects (2011 – $(35.2) million and 2010—$(26.3) million).

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CONSOLIDATED STATEMENTS OF CHANGES IN TOTAL EQUITY (Parenthetical)	Dec. 31, 2011
Percentage of sale of ownership interest	49.00%

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Change in Accounting Estimate

12 Months Ended

Dec. 31, 2012

Change in Accounting Estimate

24. Change in Accounting Estimate

Effective January 1, 2012, the Company reduced the estimated useful life of six of its older shuttle tankers from 25 years to 20 years. As a result of the change in useful life, the Company increased its estimate of the residual value of these vessels to reflect the more recent average scrap prices. As a result, depreciation and amortization expense has increased by $14.9 million for the year ended December 31, 2012, and net income attributable to the stockholders of Teekay has decreased by $4.4 million, or $0.06 per share for the year ended December 31, 2012.

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Capital Lease Obligations and Restricted Cash - Schedule of Repayments of Capital Leases Including Imputed Interest (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012
Capital Lease Obligations [Line Items]
Commitment, 2013	$ 24,000
Commitment, 2014	24,000
Commitment, 2015	24,000
Commitment, 2016	24,000
Commitment, 2017	24,000
Thereafter	$ 857,128

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Income Taxes - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Income Tax Contingency [Line Items]
Interest and penalties on unrecognized tax benefits	$ 0.8	$ 1.8	$ 1.2

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Accrued Liabilities (Tables)

12 Months Ended

Dec. 31, 2012

Accrued Liabilities

	December 31,  2012 $		December 31,  2011 $
Voyage and vessel expenses		144,250		209,058
Interest		66,125		63,310
Payroll and benefits and other		100,452		83,528
Deferred revenue		52,391		38,690
		363,218		394,586

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Summary of Significant Accounting Policies - Additional Information (Detail) (USD $) In Millions, except Share data, unless otherwise specified	1 Months Ended	12 Months Ended			1 Months Ended			12 Months Ended
	Mar. 31, 2008	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010	Sep. 30, 2009 Restricted Stock Units (RSUs) [Member]	Dec. 31, 2012 Vision Incentive Plan [Member]	Dec. 31, 2011 Vision Incentive Plan [Member]	Dec. 31, 2011 Prepaid expenses into accounts receivable [Member]	Dec. 31, 2011 Accounts payable into accounts receivable [Member]	Dec. 31, 2012 Crude oil tanker [Member]	Dec. 31, 2012 Refined product tanker [Member]	Dec. 31, 2012 LNG carriers [Member]	Dec. 31, 2012 LPG carrier [Member]	Dec. 31, 2012 Minimum [Member] Dry docking activity [Member]	Dec. 31, 2012 Minimum [Member] FPSO [Member]	Dec. 31, 2012 Maximum [Member] Dry docking activity [Member]	Dec. 31, 2012 Maximum [Member] FPSO [Member]
Property, Plant and Equipment [Line Items]
Reclassification of prior period adjustment								$ 10.1	$ 4.0
Property, plant and equipment, useful life										25 years	25 years	35 years	30 years	2 years 6 months	20 years	5 years	30 years
Condition for claiming depreciation vessel's estimated useful life		Commencing the date the vessel is delivered from the shipyard, or a shorter period if regulations prevent the Company from operating the vessels for those periods of time
Depreciation of vessels and equipment, excluding amortization of dry docking expenditures		364.3	356.0	355.5
Amortization of vessels accounted for as capital leases		30.1	34.7	33.5
Interest costs capitalized to vessels and equipment		34.9	8.1	14.0
Asset retirement obligation		24.7	21.2
Associated receivable recorded in other non-current assets from third parties		6.4	6.1
Interim distribution made to certain participants in restricted stock units	13.3
Restricted stock units with New Participants Reserve Pool allocation under the VIP					187,400
Vision Incentive Plan Expense			1.3	2.4
VIP Liability						$ 0	$ 0

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Goodwill, Intangible Assets and In-Process Revenue Contracts - Additional Information (Detail) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Segment Reporting Information [Line Items]
Goodwill impairment charge (note 6)		$ 36,652,000
Aggregate amortization expense	17,200,000	19,100,000	26,200,000
Amortization of intangible assets, 2013	18,400,000
Amortization of intangible assets, 2014	13,000,000
Amortization of intangible assets, 2015	11,900,000
Amortization of intangible assets, 2016	10,900,000
Amortization of intangible assets, 2017	9,900,000
Amortization of intangible assets, thereafter	62,000,000
Reclassification of unfavorable customer contracts from intangible assets	5,900,000
Write-downs of intangibles and other			31,730,000
Amortization of in-process revenue	(72,933,000)	(46,436,000)	(48,254,000)
OMI Corporation [Member]
Segment Reporting Information [Line Items]
Percentage share of business acquired	50.00%
Teekay Petrojarl And Omi Corporation [Member]
Segment Reporting Information [Line Items]
Amortization of in-process revenue	72,933,000	46,436,000	48,254,000
Amortization of in-process revenue contracts, 2013	61,700,000
Amortization of in-process revenue contracts, 2014	40,200,000
Amortization of in-process revenue contracts, 2015	19,800,000
Amortization of in-process revenue contracts, 2016	19,800,000
Amortization of in-process revenue contracts, 2017	19,800,000
Amortization of in-process revenue contracts, thereafter	80,300,000
Suezmax Tankers [Member]
Segment Reporting Information [Line Items]
Goodwill impairment charge (note 6)		$ 36,652,000

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CONSOLIDATED STATEMENTS OF LOSS (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
REVENUES	$ 1,956,235	$ 1,953,782	$ 2,095,753
OPERATING EXPENSES
Voyage expenses	138,283	176,614	245,097
Vessel operating expenses (note 15)	730,119	677,687	630,547
Time-charter hire expense	130,739	214,179	285,992
Depreciation and amortization	455,898	428,608	440,705
General and administrative (note 12 and 15)	202,967	223,616	193,743
Asset impairments (note 18)	434,082	155,288	51,210
Net loss (gain) on sale of vessels and equipment (note 18)	6,975	(4,229)	(2,060)
Bargain purchase gain (note 3a)		(68,535)
Goodwill impairment charge (note 6)		36,652
Restructuring charges (note 20)	7,565	5,490	16,396
Total operating expenses	2,106,628	1,845,370	1,861,630
(Loss) income from vessel operations	(150,393)	108,412	234,123
OTHER ITEMS
Interest expense	(167,615)	(137,604)	(136,107)
Interest income	6,159	10,078	12,999
Realized and unrealized loss on non-designated derivative instruments (note 15)	(80,352)	(342,722)	(299,598)
Equity income (loss) (note 18b and 23)	79,211	(35,309)	(11,257)
Foreign exchange (loss) gain (note 8 and 15)	(12,898)	12,654	31,983
Other income (loss) (note 14)	366	12,360	(5,118)
Net loss before income taxes	(325,522)	(372,131)	(172,975)
Income tax recovery (expense) (note 21)	14,406	(4,290)	6,340
Net loss	(311,116)	(376,421)	(166,635)
Less: Net loss (income) attributable to non-controlling interests	150,936	17,805	(100,652)
Net loss attributable to stockholders of Teekay Corporation	$ (160,180)	$ (358,616)	$ (267,287)
Per common share of Teekay Corporation (note 19)
Basic loss attributable to stockholders of Teekay Corporation	$ (2.31)	$ (5.11)	$ (3.67)
Diluted loss attributable to stockholders of Teekay Corporation	$ (2.31)	$ (5.11)	$ (3.67)
Cash dividends declared	$ 1.2650	$ 1.2650	$ 1.2650
Weighted average number of common shares outstanding (note 19)
Basic	69,263,369	70,234,817	72,862,617
Diluted	69,263,369	70,234,817	72,862,617

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Capital Stock (Tables)

12 Months Ended

Dec. 31, 2012

Summary of Stock Option Activity and Related Information

A summary of the Company’s stock option activity and related information for the years ended December 31, 2012, 2011, and 2010, are as follows:

	December 31, 2012					December 31, 2011					December 31, 2010
	Options			Weighted- Average		Options			Weighted- Average		Options			Weighted- Average
	(000’s)			Exercise Price		(000’s)			Exercise Price		(000’s)			Exercise Price
	#			$		#			$		#			$
Outstanding—beginning of year		5,713			32.47		6,123			31.54		5,983			31.46
Granted		433			27.69		96			34.93		733			24.42
Exercised		(733	)		15.85		(363	)		16.14		(380	)		15.12
Forfeited / expired		(128	)		31.81		(143	)		33.11		(213	)		29.00
Outstanding—end of year		5,285			34.40		5,713			32.47		6,123			31.54
Exercisable—end of year		4,561			35.54		4,656			35.40		3,963			36.80

Non-vested Stock Option Activity and Related Information

A summary of the Company’s non-vested stock option activity and related information for the years ended December 31, 2012, 2011 and 2010, are as follows:

	December 31, 2012					December 31, 2011					December 31, 2010
	Options			Weighted- Average		Options			Weighted- Average					Weighted- Average
	(000’s)			Grant Date Fair Value		(000’s)			Grant Date Fair Value		(000’s)			Grant Date Fair Value
	#			$		#			$		#			$
Outstanding non-vested stock options—beginning of year		1,057			6.40		2,160			6.36		2,684			6.56
Granted		433			8.72		96			11.27		733			8.16
Vested		(747	)		5.44		(1,071	)		6.18		(1,084	)		7.48
Forfeited		(20	)		8.24		(128	)		11.47		(173	)		10.06
Outstanding non-vested stock options—end of year		723			8.74		1,057			6.40		2,160			6.36

Details Regarding Outstanding and Exercisable Stock Options

Further details regarding the Company’s outstanding and exercisable stock options at December 31, 2012 are as follows:

	Outstanding Options						Exercisable Options
	Options (000’s)		Weighted- Average Remaining Life		Weighted- Average Exercise Price		Options (000’s)		Weighted- Average Remaining Life		Weighted- Average Exercise Price
Range of Exercise Prices	#		(Years)		$		#		(Years)		$
$10.00 – $14.99		689		6.2		11.84		689		6.2		11.84
$15.00 – $19.99		107		0.2		19.59		107		0.2		19.59
$20.00 – $24.99		626		7.1		24.39		392		7.1		24.37
$25.00 – $29.99		433		9.2		27.69		—		—		—
$30.00 – $34.99		429		2.6		33.84		373		1.8		33.67
$35.00 – $39.99		741		3.3		38.98		741		3.3		38.98
$40.00 – $44.99		1,246		5.2		40.41		1,246		5.2		40.41
$45.00 – $49.99		345		2.2		46.80		345		2.2		46.80
$50.00 – $59.99		666		4.2		51.40		666		4.2		51.40
$60.00 – $64.99		3		4.3		60.96		3		4.3		60.96
		5,285		5.0		34.40		4,562		4.4		35.54

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Derivative Instrument and Hedging Activities - Interest Rate Swap Agreement (Parenthetical) (Detail)	Dec. 31, 2012 USD ($)	Dec. 31, 2012 EUR (€)	Dec. 31, 2012 Interest rate swap agreements [Member] EUR (€)	Dec. 31, 2012 Floating Rate Payable [Member] USD ($)	Dec. 31, 2012 Floating Rate Receivable [Member]
Derivative [Line Items]
Minimum variable interest rate on debt	0.30%	0.30%
Maximum variable interest rate on debt	4.25%	4.25%
Principal Amount			€ 258,800,000	$ 200,000,000
LIBOR fixed				2.14%	1.12%
Floating LIBOR rate receivable/payable cap				6.00%	3.50%
Effective reduction rate should rate exceed LIBOR rate					2.38%
Reducing principal amount of Euro-denominated interest rate swaps	$ 92,500,000	€ 70,100,000

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Income Taxes - Unrecognized Tax Benefits, Recorded in Other Long-term Liabilities (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Income Tax Contingency [Line Items]
Balance of unrecognized tax benefits as at January 1	$ 39,804	$ 45,302	$ 40,943
Increase for positions taken in prior years		83	4,037
Increase for positions related to the current year	4,560	3,308	8,979
Decreases for positions taken in prior years	(5,085)		(4,557)
Decreases related to statute of limitations	(9,951)	(8,889)	(4,100)
Balance of unrecognized tax benefits as at December 31	$ 29,364	$ 39,804	$ 45,302

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
OPERATING ACTIVITIES
Net loss	$ (311,116)	$ (376,421)	$ (166,635)
Non-cash items:
Depreciation and amortization	455,898	428,608	440,705
Amortization of in-process revenue contracts (note 6)	(72,933)	(46,436)	(48,254)
Loss (gain) on sale of marketable securities	2,560	(3,372)	(1,805)
Loss (gain) on sale of vessels and equipment	6,975	(4,229)	(2,060)
Goodwill impairment charge		36,652
Write-down of equity accounted investments (note 18b)	1,767	19,411
Asset impairments (note 18b)	434,082	155,288	51,210
Bargain purchase gain (note 3)		(68,535)
Loss on repurchase of notes			12,645
Equity (income) loss, net of dividends received	(65,639)	31,376	11,257
Income tax (recovery) expense	(14,406)	4,290	(6,340)
Employee stock option compensation	9,393	16,262	15,264
Unrealized foreign exchange loss (gain)	22,137	(11,614)	(21,427)
Unrealized (gain) loss on derivative instruments	(40,373)	70,822	140,187
Other	10,823	(4,942)	(929)
Change in operating assets and liabilities (note 17a)	(115,209)	(84,347)	45,415
Expenditures for dry docking	(35,023)	(55,620)	(57,483)
Net operating cash flow	288,936	107,193	411,750
FINANCING ACTIVITIES
Proceeds from issuance of long-term debt (note 8)	1,417,870	2,114,879	1,769,742
Debt issuance costs	(10,595)	(10,634)	(14,471)
Scheduled repayments of long-term debt	(266,242)	(449,640)	(210,025)
Prepayments of long-term debt	(1,060,169)	(881,207)	(1,536,587)
Repayments of capital lease obligations	(10,161)	(89,145)	(38,958)
(Increase) decrease in restricted cash (note 10)	(33,592)	73,105	30,291
Net proceeds from equity issuances of subsidiaries (note 5)	496,224	631,057	645,642
Equity contribution by joint venture partner	86,350
Repurchase of Common Stock (note 12)		(122,195)	(40,111)
Distribution from subsidiaries to non-controlling interests	(246,555)	(201,942)	(159,808)
Cash dividends paid	(83,299)	(93,480)	(92,695)
Other financing activities	9,840	5,847	5,682
Net financing cash flow	299,671	976,645	358,702
INVESTING ACTIVITIES
Expenditures for vessels and equipment	(523,597)	(755,045)	(343,091)
Proceeds from sale of vessels and equipment	250,807	33,424	70,958
Acquisition of FPSO units and Sevan Marine ASA, net of cash acquired (note 3a)	(92,303)	(322,500)
Investment in term loans (note 4)		(70,000)	(115,575)
Investment in equity accounted investees (note 23)	(183,554)	(38,496)	(45,480)
Advances to equity accounted investees	(117,235)	(55,156)	(5,447)
Direct financing lease payments received	23,307	27,608	25,782
Other investing activities	1,332	8,706	(361)
Net investing cash flow	(641,243)	(1,171,459)	(413,214)
(Decrease) increase in cash and cash equivalents	(52,636)	(87,621)	357,238
Cash and cash equivalents, beginning of the year	692,127	779,748	422,510
Cash and cash equivalents, end of the year	$ 639,491	$ 692,127	$ 779,748

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Derivative Instruments and Hedging Activities - Commitment of Cross Currency Swaps (Parenthetical) (Detail) (Floating Rate Receivable [Member])	Dec. 31, 2012
Derivative [Line Items]
LIBOR fixed	1.12%
LIBOR rate receivable cap	3.50%
Currency swaps maturing in 2013 [Member]
Derivative [Line Items]
LIBOR fixed	1.12%
LIBOR rate receivable cap	3.50%

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Segment Reporting - Segment Results Information (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Segment Reporting Information [Line Items]
REVENUES	$ 1,956,235	$ 1,953,782	$ 2,095,753
Voyage expenses	138,283	176,614	245,097
Vessel operating expenses	730,119	677,687	630,547
Time-charter hire expense	130,739	214,179	285,992
Depreciation and amortization	455,898	428,608	440,705
General and administrative	202,967	223,616	193,743
Asset impairments	434,082	155,288	51,210
Net (gain) loss on sale of vessels and equipment	6,975	(4,229)	(2,060)
Bargain purchase gain		(68,535)
Goodwill impairment		36,652
Restructuring charges	7,565	5,490	16,396
(Loss) income from vessel operations	(150,393)	108,412	234,123
Total assets of operating segments	9,719,938	9,915,929
FPSO Segment [Member]
Segment Reporting Information [Line Items]
REVENUES	581,215	464,810	463,931
Voyage expenses	232
Vessel operating expenses	331,124	242,332	209,283
Depreciation and amortization	135,413	96,915	95,784
General and administrative	68,035	52,854	42,714
Net (gain) loss on sale of vessels and equipment		(4,888)
Bargain purchase gain		(68,535)
(Loss) income from vessel operations	46,411	146,132	116,150
Total assets of operating segments	2,824,832	2,527,095
Shuttle tanker and FSO segment [Member]
Segment Reporting Information [Line Items]
REVENUES	613,388	613,768	622,195
Voyage expenses	104,382	97,743	111,003
Vessel operating expenses	175,459	196,536	182,614
Time-charter hire expense	56,989	74,478	89,768
Depreciation and amortization	125,104	129,293	127,438
General and administrative	54,139	60,359	51,281
Asset impairments	28,830	43,185	19,480
Net (gain) loss on sale of vessels and equipment	1,112	171
Goodwill impairment
Restructuring charges	652	5,351	704
(Loss) income from vessel operations	66,721	6,652	39,907
Total assets of operating segments	1,709,674	1,891,496
Liquefied Gas Segment [Member]
Segment Reporting Information [Line Items]
REVENUES	286,237	272,041	248,378
Voyage expenses	283	4,862	29
Vessel operating expenses	45,972	48,158	46,497
Depreciation and amortization	69,064	63,641	62,904
General and administrative	21,969	20,586	20,147
Net (gain) loss on sale of vessels and equipment			(4,340)
Goodwill impairment
Restructuring charges			394
(Loss) income from vessel operations	148,949	134,794	122,747
Total assets of operating segments	3,148,037	2,924,653
Conventional tanker segment [Member]
Segment Reporting Information [Line Items]
REVENUES	475,395	603,163	761,249
Voyage expenses	33,386	74,009	134,065
Vessel operating expenses	177,564	190,661	192,153
Time-charter hire expense	73,750	139,701	196,224
Depreciation and amortization	126,317	138,759	154,579
General and administrative	58,824	89,817	79,601
Asset impairments	405,252	112,103	31,730
Net (gain) loss on sale of vessels and equipment	5,863	488	2,280
Goodwill impairment		36,652
Restructuring charges	6,913	139	15,298
(Loss) income from vessel operations	(412,474)	(179,166)	(44,681)
Total assets of operating segments	$ 2,037,394	$ 2,572,685

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Derivative Instruments and Hedging Activities - Effect of (Loss) Gain on Derivatives Not Designated as Hedging Instruments (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Realized (losses) gains relating to:
Derivative instruments not designated as hedging instruments realized gain (loss) net	$ (110,670)	$ (272,596)	$ (164,286)
Unrealized gains (losses) relating to:
Derivative instruments not designated as hedging instruments unrealized gain (loss) net	30,318	(70,126)	(135,312)
Total realized and unrealized losses on derivative instruments	(80,352)	(342,722)	(299,598)
Interest rate swap agreements [Member]
Realized (losses) gains relating to:
Derivative instruments not designated as hedging instruments realized gain (loss) net	(123,277)	(132,931)	(154,098)
Unrealized gains (losses) relating to:
Derivative instruments not designated as hedging instruments unrealized gain (loss) net	26,770	(58,405)	(146,780)
Interest rate swap agreement amendments [Member]
Realized (losses) gains relating to:
Derivative instruments not designated as hedging instruments realized gain (loss) net		(149,666)
Foreign currency forward contracts [Member]
Realized (losses) gains relating to:
Derivative instruments not designated as hedging instruments realized gain (loss) net	1,155	9,965	(2,274)
Unrealized gains (losses) relating to:
Derivative instruments not designated as hedging instruments unrealized gain (loss) net	6,933	(11,399)	6,307
Forward freight agreements and bunker fuel swap contracts [Member]
Realized (losses) gains relating to:
Derivative instruments not designated as hedging instruments realized gain (loss) net		36	(7,914)
Unrealized gains (losses) relating to:
Derivative instruments not designated as hedging instruments unrealized gain (loss) net			(108)
Foinaven embedded derivative [Member]
Realized (losses) gains relating to:
Derivative instruments not designated as hedging instruments realized gain (loss) net	11,452
Unrealized gains (losses) relating to:
Derivative instruments not designated as hedging instruments unrealized gain (loss) net	$ (3,385)	$ (322)	$ 5,269

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Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2012

Summarized Dry Docking Activity

Dry docking activity for the three years ended December 31, 2012, 2011, and 2010, is summarized as follows:

	Year Ended December 31,
	2012 $			2011 $			2010 $
Balance at the beginning of the year		128,987			143,103			172,053
Costs incurred for drydocking		35,336			54,296			57,156
Dry-dock amortization		(57,082	)		(67,180	)		(86,106	)
Write down / sale of vessels		(6,313	)		(1,232	)		—
Balance at the end of the year		100,928			128,987			143,103

Summary of Financing Receivables

The following table contains a summary of the Company’s financing receivables by type of borrower, the method by which the Company monitors the credit quality of its financing receivables on a quarterly basis, and the grade as of December 31, 2012.

					December 31,
Class of Financing Receivable	Credit Quality Indicator	Grade			2012 $		2011 $
Direct financing leases	Payment activity		Performing			436,601		459,908
Other loan receivables
Investment in term loans and interest receivable	Collateral		Performing(2)			119,385		188,616
Investment in term loans and interest receivable	Collateral		(3	)		69,371		—
Loans to equity accounted investees and joint venture partners (1)	Other internal metrics		Performing			206,903		85,248
Long term receivable included in other assets	Payment activity		Performing			1,704		786
						833,964		734,558

(1) The Company’s subsidiary Teekay LNG Partners L.P. (or Teekay LNG) owns a 99% interest in Teekay Tangguh Borrower LLC (or Teekay Tangguh), which owns a 70% interest in Teekay BLT Corporation (or Teekay Tangguh Subsidiary). During the year ended December 31, 2012, one of Teekay LNG’s joint venture partner’s parent company, PT Berlian Laju Tanker (or BLT), suspended trading on the Jakarta Stock Exchange and entered into a court-supervised restructuring under the Suspension of Payment process in Indonesia, in order to restructure its debts. The Company believes the loans to BLT and Teekay LNG’s joint venture partner, BLT LNG Tangguh Corporation, totaling $24.0 million as at December 31, 2012 (2011—$19.1 million) are collectible given the expected cash flows anticipated to be generated by the Teekay Tangguh Subsidiary that can be used to repay the loan and given the underlying collateral securing the loans to BLT.

(2) Subsequent to December 31, 2012, the borrower did not pay in full the January 31, 2013 interest payment. It is expected that the Company will recover all amounts due under the loan agreements based upon cash flow generated by the borrower, financial support from the borrower’s ultimate parent company and the Company realizing the value of the primary collateral, two 2010-built Very Large Crude Carriers.

(3) As of December 31, 2012, the estimated fair value of the asset that has been pledged as collateral for the loan is greater than 95% of the principal amount of the loan and unpaid interest. Subsequent to the end of the year, the borrower did not pay in full the January 31, 2013 interest payment. Based on a review of the borrower’s financial condition, it is expected that a full recovery of all amounts due under the loan agreement will be dependent upon cash flow generated by the borrower, financial support from the borrower’s ultimate parent company and the Company realizing the value of the primary collateral, a 2011-built Very Large Crude Carrier.

Schedule of Accumulated Other Comprehensive (Loss) Income

The following table contains the changes in the balances of each component of accumulated other comprehensive income (loss) for the periods presented.

	Qualifying Cash Flow Hedging Instruments $			Pension Adjustments $			Unrealized Gain (Loss) on Available for Sale Marketable Securities $			Foreign Exchange Loss on Currency Translation $		Total $
Balance as of December 31, 2009		2,923			(10,294	)		5,837			—		(1,534	)
Other comprehensive (loss) income		(628	)		(7,245	)		1,236			—		(6,637	)
Balance as of December 31, 2010		2,295			(17,539	)		7,073			—		(8,171	)
Other comprehensive loss		(2,601	)		(5,402	)		(7,729	)		—		(15,732	)
Balance as of December 31, 2011		(306	)		(22,941	)		(656	)		—		(23,903	)
Other comprehensive income		647			6,688			656			1,144		9,135
Balance as of December 31, 2012		341			(16,253	)		—			1,144		(14,768	)

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Acquisitions - Summarized Balance Sheet of Variable Interest Entity (VIE) (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010	Feb. 28, 2010	Dec. 31, 2009
ASSETS
Cash and cash equivalents	$ 639,491	$ 692,127	$ 779,748		$ 422,510
Vessels and equipment	7,321,058	7,890,761
Total assets	11,002,025	11,137,677
LIABILITIES AND EQUITY
Accounts payable	111,474	93,065
Accrued liabilities	363,218	394,586
Long-term debt(note 8)	4,762,303	5,042,997
Derivative liabilities	528,187	569,542
Other long-term liabilities	220,079	220,986		2,000
Total liabilities	7,781,736	7,795,576
Total equity	3,191,474	3,303,794	3,332,008		3,095,670
Total liabilities and equity	11,002,025	11,137,677
Voyageur Spirit [Member]
ASSETS
Cash and cash equivalents	9,756
Other current assets	11,380
Vessels and equipment	455,819
Deferred tax assets	1,955
Total assets	478,910
LIABILITIES AND EQUITY
Accounts payable	18,359
Accrued liabilities	3,687
Long-term debt(note 8)	230,359
Derivative liabilities	4,509
Other long-term liabilities	13,344
Total liabilities	270,258
Total equity	208,652
Total liabilities and equity	$ 478,910

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Other Income

12 Months Ended

Dec. 31, 2012

Other Income

14. Other Income

	Year Ended			Year Ended		Year Ended
	December 31,			December 31,		December 31,
	2012			2011		2010
	$			$		$
Gain on sale of other assets		2,217			—		—
Volatile organic compound emission plant lease income		1,220			2,900		4,714
(Loss) gain on sale of marketable securities		(2,560	)		3,372		1,805
Miscellaneous (loss) income		(511	)		6,088		1,008
Loss on notes repurchase		—			—		(12,645	)
Other income (loss)		366			12,360		(5,118	)

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Segment Reporting (Tables)

12 Months Ended

Dec. 31, 2012

Segment Results Information

The following tables present results for these segments for the years ended December 31, 2012, 2011, and 2010.

Year ended December 31, 2012	Shuttle Tanker and FSO Segment $		FPSO Segment $		Liquefied Gas Segment $		Conventional Tanker Segment $			Total $
Revenues		613,388		581,215		286,237		475,395			1,956,235
Voyage expenses		104,382		232		283		33,386			138,283
Vessel operating expenses		175,459		331,124		45,972		177,564			730,119
Time-charter hire expense		56,989		—		—		73,750			130,739
Depreciation and amortization		125,104		135,413		69,064		126,317			455,898
General and administrative (2)		54,139		68,035		21,969		58,824			202,967
Asset impairments		28,830		—		—		405,252			434,082
Net loss on sale of vessels and equipment		1,112		—		—		5,863			6,975
Restructuring charges		652		—		—		6,913			7,565
Income (loss) from vessel operations		66,721		46,411		148,949		(412,474	)		(150,393	)
Total assets of operating segments at December 31, 2012		1,709,674		2,824,832		3,148,037		2,037,394			9,719,938

Year ended December 31, 2011	Shuttle Tanker and FSO Segment $		FPSO Segment $			Liquefied Gas Segment $			Conventional Tanker Segment $			Total $
Revenues		613,768		464,810			272,041			603,163			1,953,782
Voyage expenses		97,743		—			4,862			74,009			176,614
Vessel operating expenses		196,536		242,332			48,158			190,661			677,687
Time-charter hire expense		74,478		—			—			139,701			214,179
Depreciation and amortization		129,293		96,915			63,641			138,759			428,608
General and administrative (2)		60,359		52,854			20,586			89,817			223,616
Asset impairments		43,185		—			—			112,103			155,288
Net loss (gain) on sale of vessels and equipment		171		(4,888	)		—			488			(4,229	)
Bargain purchase gain		—		(68,535	)		—			—			(68,535	)
Goodwill impairment		—		—			—			36,652			36,652
Restructuring charges		5,351		—			—			139			5,490
Income (loss) from vessel operations		6,652		146,132			134,794			(179,166	)		108,412
Total assets of operating segments at December 31, 2011		1,891,496		2,527,095			2,924,653			2,572,685			9,915,929
Year ended December 31, 2010	Shuttle Tanker and FSO Segment $		FPSO Segment $			Liquefied Gas Segment $			Conventional Tanker Segment $			Total $
Revenues (1)		622,195		463,931			248,378			761,249			2,095,753
Voyage expenses		111,003		—			29			134,065			245,097
Vessel operating expenses		182,614		209,283			46,497			192,153			630,547
Time-charter hire expense		89,768		—			—			196,224			285,992
Depreciation and amortization		127,438		95,784			62,904			154,579			440,705
General and administrative (2)		51,281		42,714			20,147			79,601			193,743
Asset impairments		19,480		—			—			31,730			51,210
Net (gain) loss on sale of vessels and equipment		—		—			(4,340	)		2,280			(2,060	)
Restructuring charges		704		—			394			15,298			16,396
Income (loss) from vessel operations		39,907		116,150			122,747			(44,681	)		234,123

(1) FPSO segment includes $59.2 million in revenue for the year ended December 31, 2010, related to operations in previous years as a result of executing a contract amendment in March 2010.

(2) Includes direct general and administrative expenses and indirect general and administrative expenses (allocated to each segment based on estimated use of corporate resources).

Reconciliation of Total Segment Assets

A reconciliation of total segment assets to amounts presented in the accompanying consolidated balance sheets is as follows:

	December 31, 2012 $		December 31, 2011 $
Total assets of all segments		9,719,938		9,915,929
Cash		639,491		692,127
Accounts receivable and other assets		642,596		529,621
Consolidated total assets		11,002,025		11,137,677

Revenues and Percentage of Consolidated Revenues

The following table presents revenues and percentage of consolidated revenues for customers that accounted for more than 10% of the Company’s consolidated revenues during the periods presented. All of these customers are international oil companies.

(U.S. dollars in millions)	Year Ended December 31, 2012			Year Ended December 31, 2011			Year Ended December 31, 2010
Statoil ASA (1)		$299.1 or 15%		$	283.7 or 15	%	$	330.4 or 16	%
Petroleo Brasileiro SA (1)		$289.3 or 15%		$	224.9 or 12	%	$	226.0 or 11	%
BP PLC (2)		(3	)			(3)	$	222.2 or 11	%

(1) Shuttle tanker and FSO, FPSO and conventional tanker segments

(2) Shuttle tanker and FSO, FPSO, liquefied gas and conventional tanker segments

(3) Less than 10%

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Derivative Instruments and Hedging Activities - Effective Portion of Gains (Losses) on Foreign Currency Contracts (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Balance Sheet [Member]
Derivatives, Fair Value [Line Items]
Effective Portion of AOCI	$ 2,412	$ 2,007	$ (3,559)
Income Statement [Member]
Derivatives, Fair Value [Line Items]
Effective Portion of AOCI reclassified to earnings	1,436	5,554	(3,040)
Ineffective portion of gains (losses) on derivative instruments designated and qualifying as cash flow hedges	(660)	(791)	(4,875)
Income Statement [Member] | Vessel operating expenses [Member]
Derivatives, Fair Value [Line Items]
Effective Portion of AOCI reclassified to earnings		918	(680)
Ineffective portion of gains (losses) on derivative instruments designated and qualifying as cash flow hedges		(568)	(3,473)
Income Statement [Member] | General and administrative expenses [Member]
Derivatives, Fair Value [Line Items]
Effective Portion of AOCI reclassified to earnings	1,436	4,636	(2,360)
Ineffective portion of gains (losses) on derivative instruments designated and qualifying as cash flow hedges	$ (660)	$ (223)	$ (1,402)

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Pension Benefits - Fair Value of Plan Assets (Parenthetical) (Detail)	Dec. 31, 2012
Defined Benefit Plan Disclosure [Line Items]
Growth oriented assets	70.00%
Defensive assets	30.00%

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2012

Commitments and Contingencies

16. Commitments and Contingencies

a) Vessels under Construction

As at December 31, 2012, the Company was committed to the construction of four shuttle tankers, two LNG carriers and one FPSO unit, not including the Voyageur Spirit, for a total cost of approximately $1.8 billion, excluding capitalized interest and other miscellaneous construction costs. The four shuttle tankers are scheduled for delivery in mid-to-late 2013, the two LNG carriers are scheduled for delivery in 2016, and the FPSO unit is scheduled to be delivered in the first half of 2014. As at December 31, 2012, payments made towards these commitments totaled $686.0 million (excluding $26.0 million of capitalized interest and other miscellaneous construction costs). As at December 31, 2012, the remaining payments required to be made under these newbuilding contracts were $379.7 million (2013), $361.8 million (2014), $57.9 million (2015), and $270.2 million (2016).

b) Joint Ventures

In September 2010, Teekay Tankers entered into a joint venture arrangement (the Joint Venture) with Wah Kwong Maritime Transport Holdings Limited (or Wah Kwong) to have a Very Large Crude Carrier (or VLCC) constructed, managed and chartered to third parties. Teekay Tankers has a 50% economic interest in the Joint Venture, which is jointly controlled by Teekay Tankers and Wah Kwong. The VLCC has an estimated purchase price of approximately $98 million (of which Teekay Tankers’ 50% portion is $49 million), excluding capitalized interest and other miscellaneous construction costs. The vessel is scheduled to be delivered in June, 2013. An unrelated party has agreed to time-charter the vessel following its delivery for a term of five years at a fixed daily rate and an additional amount if the daily rate of any sub-charter earned by the unrelated party exceeds a certain threshold.

As at December 31, 2012, the remaining payments required to be made under this newbuilding contract, including Wah Kwong’s 50% share, were $53.9 million in 2013. As at December 31, 2012, the Joint Venture had signed an agreement with a financial institution for a loan of $68.6 million, of which $19.6 million has been drawn. The loan is secured by a first-priority statutory mortgage on the VLCC and guaranteed by both Teekay Tankers and Wah Kwong. As a result, Teekay Tankers‘s exposure to this loan is limited to the 50% guarantee to the loan. This loan is repayable in 32 quarterly installments of $1.4 million each commencing three months after the initial post-delivery drawdown date and a balloon payment of $22.6 million at the maturity of the loan. In addition, Teekay Tankers and Wah Kwong have each agreed to finance 50% of the costs to acquire the VLCC that are not financed with commercial bank financing. As at December 31, 2012, the Company had advanced $9.8 million to the joint venture in the form of a non-interest bearing and unsecured loan and invested an additional $3.2 million into the joint venture.

c) Purchase Obligation

As at December 31, 2012, the Company was committed to fund the remaining upgrade costs of the Voyageur Spirit in connection with the Sevan acquisition, for a total cost estimated to be between $140 million and $150 million. As at December 31, 2012, payments made towards these remaining upgrade costs totaled $129.6 million and the remaining payments required to be made are estimated to be between $10 million and $20 million in 2013. In addition to the upgrade costs, in November 2012 the Company prepaid $92.4 million of the Voyageur Spirit purchase price. Teekay entered into an agreement to sell the Voyageur Spirit to Teekay Offshore for $540 million. Conditions to the closing of this transaction include, among others, Teekay Offshore obtaining financing and that Teekay has acquired the Voyageur Spirit and related assets pursuant to the terms of the acquisition agreement with Sevan.

In September 2012, the Voyageur Spirit completed its upgrade at the Nymo shipyard in Norway and arrived at the Huntington Field in the U.K. sector of the North Sea in October 2012. First oil occurred in April 2013 after the remaining upgrades were completed, at which time the Voyageur Spirit commenced its 5-year charter with E.ON Ruhrgas UK E&P Limited (or E.ON) and the FPSO unit is expected to be acquired by Teekay Offshore in the second quarter of 2013.

In November 2012, Teekay Offshore agreed to acquire a 2010-built HiLoad Dynamic Positioning (DP) unit from Remora AS (or Remora), a Norway-based offshore marine technology company, for a total purchase price of approximately $55 million including modification costs. The HiLoad DP unit is a self-propelled dynamic positioning system that attaches to and keeps conventional tankers in position when loading from offshore installations. The transaction is subject to finalizing a ten-year time-charter contract with Petroleo Brasileiro SA (or Petrobras) in Brazil. The acquisition of the HiLoad DP unit is expected to be completed in the second quarter of 2013 and the unit is expected to commence operating at its full time-charter rate in early 2014 once modifications, delivery of the DP unit to Brazil, and operational testing have been completed. As part of the transaction, Teekay has also agreed to invest approximately $4.4 million to acquire a 49.9% ownership interest in a recapitalized Remora. In addition, Teekay Offshore will enter into an agreement with Remora which will provide Teekay Offshore with the right of first refusal to acquire future HiLoad projects developed by Remora.

d) Legal Proceedings and Claims

The Company may, from time to time, be involved in legal proceedings and claims that arise in the ordinary course of business. The Company believes that any adverse outcome of existing claims, individually or in the aggregate, would not have a material effect on its financial position, results of operations or cash flows, when taking into account its insurance coverage and indemnifications from charterers.

On November 13, 2006, Teekay Offshore’s shuttle tanker the Navion Hispania collided with the Njord Bravo, an FSO unit, while preparing to load an oil cargo from the Njord Bravo. The Njord Bravo services the Njord field, which is operated by Statoil Petroleum AS (or Statoil) and is located off the Norwegian coast. At the time of the incident, Statoil was chartering the Navion Hispania from the Company. The Navion Hispania and the Njord Bravo both incurred damages as a result of the collision. In November 2007, Navion Offshore Loading AS (or NOL), the Company’s subsidiary, and two other subsidiaries of the Company, were named as co-defendants in a legal action filed by Norwegian Hull Club (the hull and machinery insurers of the Njord Bravo) and various licensees in the Njord field. The Plaintiffs sought damages for vessel repairs, expenses for a replacement vessel and other amounts related to production stoppage on the field, totaling NOK 213,000,000 (approximately $38.3 million). The matter was heard before the Stavanger District Court in December 2011. The Stavanger District Court found that NOL is liable for damages except for damages related to certain indirect or consequential losses. The court also found that Statoil ASA is liable to NOL for the same amount of damages. The parties have appealed the decision. As a result of the judgment, as at December 31, 2011 and December 31, 2012, the Company recognized a liability of NOK 76,000,000 (approximately $13.9 million, which is a reduced amount in accordance with the court’s decision to exclude a large part of the indirect or consequential losses) to the Plaintiffs and a corresponding receivable from Statoil recorded in other liabilities and other assets, respectively. The Company believes the likelihood of any losses relating to the claim is remote. The Company believes that the charter contract relating to the Navion Hispania requires that Statoil be responsible and indemnify the Company for all losses relating to the damage to the Njord Bravo. The Company also maintains protection and indemnity insurance for damages to the Navion Hispania and insurance for collision-related costs and claims. The Company believes that these insurance policies will cover the costs related to this incident, including any costs not indemnified by Statoil, subject to standard deductibles. Teekay has agreed to indemnify Teekay Offshore for any losses it may incur in connection with this incident.

Teekay Nakilat Corporation (or Teekay Nakilat), a subsidiary of Teekay LNG, is the lessee under 30-year capital lease arrangements with a third party for the RasGas II LNG Carriers (or RasGas II Leases). The UK taxing authority (or HMRC) has been urging our lessor, as well as other lessors under capital lease arrangements that have tax benefits similar to the ones provided by the RasGas II Leases, to terminate such finance lease arrangements, and has in other circumstances challenged the use of similar structures. As a result, the lessor has requested that Teekay Nakilat enter into negotiations to terminate the RasGas II Leases. Teekay Nakilat has declined this request as it does not believe that HRMC would be able to successfully challenge the availability of the tax benefits of these leases to the lessor. This assessment is partially based on a January 2012 court decision regarding a similar financial lease of an LNG carrier that ruled in favor of the taxpayer. However, the HMRC is appealing that decision and the appeal is expected to be heard in May 2013. If the HMRC were able to successfully challenge the RasGas II Leases, Teekay Nakilat could be subject to significant costs associated with the termination of the lease or increased lease payments to compensate the lessor for the lost tax benefits. Teekay LNG estimates its 70% share of the potential exposure to be approximately $29 million, exclusive of potential financing and interest rate swap termination costs. The Teekay Nakilat Joint Venture has received notification from the lessor of the three vessels of a credit rating downgrade to the bank that was providing the letter of credit (or LC Bank) to Teekay Nakilat Joint Venture’s tax lease. As a result, the lessor has claimed an increase to the lease rentals over the remaining term of the RasGas II Leases and instructed that an estimated $12 million additional amount of cash be placed on deposit by the Teekay Nakilat Joint Venture. The Teekay Nakilat Joint Venture has engaged external legal counsel to validate these claims. Teekay LNG’s 70% share of the present value of the lease rental increase claim is approximately $10 million, however the final amount is dependent on external legal counsel’s review. The Teekay Nakilat Joint Venture is also looking at other alternatives to mitigate the impact of the downgrade to the LC Bank’s credit rating.

On December 7, 2011, the Petrojarl Banff FPSO unit (or Banff), which operates on the Banff field in the U.K. sector of the North Sea, suffered a severe storm event and sustained damage to its moorings, turret and subsea equipment, which necessitated the shutdown of production on the unit. Due to the damage, the Company declared force majeure under the customer contract on December 8, 2011 and the Banff FPSO unit commenced a period of off-hire which is currently expected to continue until the fourth quarter of 2013 while repairs are assessed and completed. The Company does not have off-hire insurance covering the Banff FPSO. After the repairs and upgrades are completed, the Banff FPSO unit is expected to resume production on the Banff field, where it is expected to remain under contract until the end of 2018.

The Company expects that repair costs to the Banff FPSO unit and equipment and costs associated with the emergency response to prevent loss or further damage during the December 7, 2011 storm event will be primarily reimbursed through our insurance coverage subject to a $750,000 deductible and the other terms and conditions of the applicable policies. In addition, the Company will also incur certain capital upgrade costs for the Banff FPSO unit and the Apollo Spirit related to upgrades to the mooring system required by the relevant regulatory authorities due in part to new metocean and environmental data and other safety considerations. The Apollo Spirit was operating on the Banff field as a storage tanker and is expected to return to the Banff field at the same time as the Banff FPSO. The total of these capital upgrade costs is expected to amount to approximately $90 million. The recovery of the capital upgrade costs from the charterer is subject to commercial negotiations or, failing agreement, the responsibility for these costs will be determined by an expedited arbitration procedure already agreed to by the parties. Any capital upgrade costs not recovered from the charterer will be capitalized to the vessel cost.

e) Redeemable Non-Controlling Interest

During 2010, an unrelated party contributed a shuttle tanker with a value of $35.0 million to a subsidiary of Teekay Offshore for a 33% equity interest in the subsidiary. The non-controlling interest owner of Teekay Offshore’s 67% owned subsidiary holds a put option which, if exercised, would obligate Teekay Offshore to purchase the non-controlling interest owner’s 33% share in the entity for cash in accordance with a defined formula. The redeemable non-controlling interest is subject to remeasurement if the formulaic redemption amount exceeds the carrying value. No remeasurement was required as at December 31, 2012.

f) Other

The Company enters into indemnification agreements with certain officers and directors. In addition, the Company enters into other indemnification agreements in the ordinary course of business. The maximum potential amount of future payments required under these indemnification agreements is unlimited. However, the Company maintains what it believes is appropriate liability insurance that reduces its exposure and enables the Company to recover future amounts paid up to the maximum amount of the insurance coverage, less any deductible amounts pursuant to the terms of the respective policies, the amounts of which are not considered material.

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Investment in Term Loans - Additional Information (Detail) (USD $)	12 Months Ended			1 Months Ended	12 Months Ended				1 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2012 Vessel	Feb. 28, 2011 Loans Receivable [Member] Vessel	Dec. 31, 2012 Loans Receivable [Member]	Dec. 31, 2011 Loans Receivable [Member]	Dec. 31, 2012 Loans Receivable [Member] Accounts Receivable [Member]	Dec. 31, 2011 Loans Receivable [Member] Accounts Receivable [Member]	Jul. 31, 2010 Teekay Tankers [Member] Loans Receivable [Member] Term_loan Vessel
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Principal amount outstanding of term loan									$ 115,000,000
Term loan	70,000,000	115,575,000		70,000,000					115,575,000
Interest rate on term loan				9.00%					9.00%
Investment yield									10.00%
Repayment premium on loans outstanding									3.00%
Repayment premium included in principal balance					2,700,000	1,500,000
Acquired term loans									2
Number of VLCC collateralized for loans			1	1					2
Interest receivable recorded as accounts receivables							2,800,000	2,800,000
Investment in term loans					$ 185,600,000

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Restructuring Charges - Additional Information (Detail) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Reorganization Items [Line Items]
Restructuring charges	$ 7,565,000	$ 5,490,000	$ 16,396,000
Expected restructuring charges	12,000,000
Restructuring Charges [Member]
Reorganization Items [Line Items]
Restructuring liability	$ 3,400,000

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CONSOLIDATED STATEMENTS OF CHANGES IN TOTAL EQUITY (USD $) In Thousands	Total USD ($)	TOTAL EQUITY Thousands of Shares of Common Stock Outstanding [Member]	TOTAL EQUITY Common Stock and Additional Paid-in Capital [Member] USD ($)	TOTAL EQUITY Retained Earnings [Member] USD ($)	TOTAL EQUITY Accumulated Other Comprehensive Income (Loss) [Member] USD ($)	TOTAL EQUITY Non-controlling Interest [Member] USD ($)	Redeemable Non-controlling Interest [Member] USD ($)
Beginning Balance at Dec. 31, 2009	$ 3,095,670		$ 656,193	$ 1,585,431	$ (1,534)	$ 855,580
Beginning Balance, shares at Dec. 31, 2009		72,694
Net (loss) income	(166,635)			(267,287)		100,652
Reclassification of redeemable non-controlling interest in net (income) loss	(798)					(798)	798
Other comprehensive income (loss)	(6,528)				(6,637)	109
Dividends declared	(252,544)			(92,736)		(159,808)	(2,267)
Reinvested dividends (in shares)		2
Reinvested dividends	41		41
Exercise of stock options and other	5,735		5,735
Exercise of stock options, Shares	380	555
Repurchase of Common Stock (note 12)	(40,111)		(10,610)	(29,501)
Repurchase of Common Stock (note 12), Shares		(1,238)
Employee stock option compensation (note 12)	21,325		21,325
Dilution gain (loss) on public offerings and unit/share issuance of Teekay Offshore, Teekay Tankers and Teekay LNG (note 5)	123,203			123,203
Dilution loss on initiation of majority owned subsidiary	(7,432)			(5,176)		(2,256)	7,432
Addition of non-controlling interest from share and unit issuances of subsidiaries and other	560,082					560,082	35,762
Ending Balance at Dec. 31, 2010	3,332,008		672,684	1,313,934	(8,171)	1,353,561	41,725
Ending Balance, shares at Dec. 31, 2010		72,013
Net (loss) income	(376,421)			(358,616)		(17,805)
Reclassification of redeemable non-controlling interest in net (income) loss	(6,601)					(6,601)	6,601
Other comprehensive income (loss)	(16,678)				(15,732)	(946)
Dividends declared	(295,431)			(93,489)		(201,942)	(10,019)
Reinvested dividends (in shares)		1
Reinvested dividends	9		9
Exercise of stock options and other	5,906		5,906
Exercise of stock options, Shares	363	641
Repurchase of Common Stock (note 12)	(122,195)		(33,944)	(88,251)
Repurchase of Common Stock (note 12), Shares		(3,923)
Employee stock option compensation (note 12)	16,262		16,262
Dilution gain (loss) on public offerings and unit/share issuance of Teekay Offshore, Teekay Tankers and Teekay LNG (note 5)	124,247			124,247
Sale of 49% interest of OPCO to Teekay Offshore				(94,843)		94,843
Acquisition of Voyageur FPSO unit (note 3a)	144,600					144,600
Addition of non-controlling interest from share and unit issuances of subsidiaries and other	498,088					498,088
Ending Balance at Dec. 31, 2011	3,303,794		660,917	802,982	(23,903)	1,863,798	38,307
Ending Balance, shares at Dec. 31, 2011		68,732
Net (loss) income	(311,116)			(160,180)		(150,936)
Reclassification of redeemable non-controlling interest in net (income) loss	4,520					4,520	(4,520)
Other comprehensive income (loss)	9,475				9,135	340
Dividends declared	(324,888)			(83,305)		(241,583)	(4,972)
Reinvested dividends (in shares)		1
Reinvested dividends	6		6
Exercise of stock options and other	11,617		11,617
Exercise of stock options, Shares	733	971
Repurchase of Common Stock (note 12)	(162,300)
Employee stock option compensation (note 12)	9,393		9,393
Dilution gain (loss) on public offerings and unit/share issuance of Teekay Offshore, Teekay Tankers and Teekay LNG (note 5)	88,727			88,727
Addition of non-controlling interest from share and unit issuances of subsidiaries and other	399,946					399,946
Ending Balance at Dec. 31, 2012	$ 3,191,474		$ 681,933	$ 648,224	$ (14,768)	$ 1,876,085	$ 28,815
Ending Balance, shares at Dec. 31, 2012		69,704

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Net loss	$ (311,116)	$ (376,421)	$ (166,635)
Other comprehensive income (loss):
Unrealized (loss) gain on marketable securities	(1,904)	(4,357)	2,333
Realized loss (gain) on marketable securities	2,560	(3,372)	(1,097)
Pension adjustments, net of taxes	6,698	(5,402)	(7,245)
Unrealized gain (loss) on qualifying cash flow hedging instruments	2,412	2,019	(3,559)
Realized (gain) loss on qualifying cash flow hedging instruments (note 15)	(1,435)	(5,566)	3,040
Foreign exchange gain on currency translation (note 15)	1,144
Other comprehensive income (loss)	9,475	(16,678)	(6,528)
Comprehensive loss	(301,641)	(393,099)	(173,163)
Less: Comprehensive loss (income) attributable to non-controlling interests	150,601	18,751	(100,761)
Comprehensive loss attributable to stockholders of Teekay Corporation	$ (151,040)	$ (374,348)	$ (273,924)

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Operating and Direct Financing Leases

12 Months Ended

Dec. 31, 2012

Operating and Direct Financing Leases

9. Operating and Direct Financing Leases

Charters-in

As at December 31, 2012, minimum commitments to be incurred by the Company under vessel operating leases by which the Company charters-in vessels were approximately $153.8 million, comprised of $84.4 million (2013), $35.0 million (2014), $15.8 million (2015), $9.1 million (2016), $9.1 million (2017) and $0.4 million (thereafter). The Company recognizes the expense from these charters, which is included in time-charter hire expense, on a straight-line basis over the firm period of the charters.

Charters-out

Time-charters and bareboat charters of the Company’s vessels to third parties (except as noted below) are accounted for as operating leases. Certain of these charters provide the charterer with the option to acquire the vessel or the option to extend the charter. As at December 31, 2012, minimum scheduled future revenues to be received by the Company on time-charters and bareboat charters then in place were approximately $9.8 billion, comprised of $1.1 billion (2013), $1.2 billion (2014), $1.2 billion (2015), $1.0 billion (2016), $1.0 billion (2017) and $4.3 billion (thereafter). The minimum scheduled future revenues should not be construed to reflect total charter hire revenues for any of the years. Minimum scheduled future revenues do not include revenue generated from new contracts entered into after December 31, 2012, revenue from unexercised option periods of contracts that existed on December 31, 2012 or variable or contingent revenues. In addition, minimum scheduled future revenues presented in this paragraph have been reduced by estimated off-hire time for scheduled periodic maintenance. The amounts may vary given future events such as unscheduled vessel maintenance.

The carrying amount of the vessels accounted for as operating leases at December 31, 2012, was $6.1 billion (2011—$5.3 billion). The cost and accumulated depreciation of the vessels employed on operating leases as at December 31, 2012 were $7.8 billion (2011—$7.2 billion) and $1.7 billion (2011—$1.9 billion), respectively.

Operating Lease Obligations

Teekay Tangguh Subsidiary

The Company’s subsidiary Teekay LNG owns a 99% interest in Teekay Tangguh, which owns a 70% interest in Teekay Tangguh Subsidiary, essentially giving Teekay LNG a 69% interest in the Teekay Tangguh Subsidiary. As at December 31, 2012, the Teekay Tangguh Subsidiary was a party to operating leases whereby it is leasing its two LNG carriers (or the Tangguh LNG Carriers) to a third party company (or Head Leases). The Teekay Tangguh Subsidiary is then leasing back the LNG carriers from the same third party company (or Subleases). Under the terms of these leases, the third party company claims tax depreciation on the capital expenditures it incurred to lease the vessels. As is typical in these leasing arrangements, tax and change of law risks are assumed by the Teekay Tangguh Subsidiary. Lease payments under the Subleases are based on certain tax and financial assumptions at the commencement of the leases. If an assumption proves to be incorrect, the lease payments are increased or decreased under the Sublease to maintain the agreed after-tax margin. The Teekay Tangguh Subsidiary’s carrying amount of this tax indemnification as at December 31, 2012 and December 31, 2011 was $9.4 million and $9.9 million, respectively, and is included as part of other long-term liabilities in the consolidated balance sheets of the Company. The tax indemnification is for the duration of the lease contract with the third party plus the years it would take for the lease payments to be statute barred, and ends in 2033. Although there is no maximum potential amount of future payments, the Teekay Tangguh Subsidiary may terminate the lease arrangements on a voluntary basis at any time. If the lease arrangements terminate, the Teekay Tangguh Subsidiary will be required to pay termination sums to the third party company sufficient to repay the third party company’s investment in the vessels and to compensate it for the tax effect of the terminations, including recapture of any tax depreciation. The Head Leases and the Subleases have 20 year terms and are classified as operating leases. The Head Lease and the Sublease for the two Tangguh LNG Carriers commenced in November 2008 and March 2009, respectively.

As at December 31, 2012, the total estimated future minimum rental payments to be received and paid under the lease contracts are as follows:

Year	Head Lease Receipts (1)		Sublease Payments(1)(2)
2013		28,843		24,779
2014		28,828		24,779
2015		22,188		24,779
2016		21,242		24,779
2017		21,242		24,779
Thereafter		239,063		278,884
Total	$	361,406	$	402,779

(1) The Head Leases are fixed-rate operating leases while the Subleases have a small variable-rate component. As at December 31, 2012, the Teekay Tangguh Subsidiary had received $149.0 million of aggregate Head Lease receipts and had paid $90.6 million of aggregate Sublease payments. The portion of the Head Lease receipts that haven’t been recognized into earnings are deferred and amortized on a straight line basis over the lease terms and as at December 31, 2012, $39.1 million of Head Lease receipts had been deferred and included in other long-term liabilities in the Company’s consolidated balance sheets.

(2) The amount of payments under the Subleases are updated annually to reflect any changes in the lease payments due to changes in tax law.

Net Investment in Direct Financing Leases

The time-charters for two of the Company’s LNG carriers, one FSO unit and equipment that reduce volatile organic compound emissions (or VOC equipment) are accounted for as direct financing leases. The following table lists the components of the net investments in direct financing leases:

	December  31, 2012 $			December  31, 2011 $
Total minimum lease payments to be received		675,013			741,604
Estimated unguaranteed residual value of leased properties		203,465			203,465
Initial direct costs and other		1,409			1,636
Less unearned revenue		(443,286	)		(486,797	)
Total		436,601			459,908
Less current portion		12,303			23,171
Long-term portion		424,298			436,737

As at December 31, 2012, minimum lease payments to be received by the Company in each of the next five years following 2012 were $50.1 million (2013), $48.7 million (2014), $47.8 million (2015), $47.9 million (2016), and $43.0 million (2017). The VOC equipment lease is scheduled to expire in 2014, the FSO contract is scheduled to expire in 2017, and the LNG time-charters are both scheduled to expire in 2029.

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Supplemental Cash Flow Information - Changes in Operating Assets and Liabilities (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Supplemental Cash Flow Information [Abstract]
Accounts receivable	$ (132,873)	$ (68,914)	$ (21,820)
Prepaid expenses and other assets	19,741	(8,225)	12,719
Accounts payable	18,408	12,216	(11,002)
Accrued and other liabilities	(20,485)	(19,424)	65,518
Changes in operating assets and liabilities	$ (115,209)	$ (84,347)	$ 45,415

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Derivative Instruments and Hedging Activities - Commitment of Cross Currency Swaps (Detail)		12 Months Ended									12 Months Ended					12 Months Ended
	Dec. 31, 2012 USD ($)	Dec. 31, 2012 Currency swaps maturing in 2013 [Member] USD ($)	Dec. 31, 2012 Currency swaps maturing in 2013 [Member] NOK	Dec. 31, 2012 Derivative Instrument Maturity Date December 2015 [Member] USD ($)	Dec. 31, 2012 Derivative Instrument Maturity Date December 2015 [Member] NOK	Dec. 31, 2012 Currency swaps maturing in 2017 [Member] USD ($)	Dec. 31, 2012 Currency swaps maturing in 2017 [Member] NOK	Dec. 31, 2012 Currency swaps maturing in 2017 [Member] USD ($)	Dec. 31, 2012 Currency swaps maturing in 2017 [Member] NOK	Dec. 31, 2012 Floating Rate Receivable [Member]	Dec. 31, 2012 Floating Rate Receivable [Member] Currency swaps maturing in 2013 [Member]	Dec. 31, 2012 Floating Rate Receivable [Member] Derivative Instrument Maturity Date December 2015 [Member]	Dec. 31, 2012 Floating Rate Receivable [Member] Currency swaps maturing in 2017 [Member]	Dec. 31, 2012 Floating Rate Receivable [Member] Currency swaps maturing in 2017 [Member]	Dec. 31, 2012 Floating Rate Payable [Member] USD ($)	Dec. 31, 2012 Floating Rate Payable [Member] Currency swaps maturing in 2013 [Member]	Dec. 31, 2012 Fixed Rate Payable [Member] Derivative Instrument Maturity Date December 2015 [Member]	Dec. 31, 2012 Fixed Rate Payable [Member] Currency swaps maturing in 2017 [Member]	Dec. 31, 2012 Fixed Rate Payable [Member] Currency swaps maturing in 2017 [Member]
Derivative [Line Items]
Maturity Date		2013	2013	2015	2015	2017	2017	2017	2017
Notional Amount		$ 98,500,000	600,000,000	$ 122,800,000	700,000,000	$ 101,400,000	600,000,000	$ 125,000,000	700,000,000						$ 200,000,000
Floating Rate Receivable and Payable Reference Rate											NIBOR	NIBOR	NIBOR	NIBOR		LIBOR
Floating Rate Receivable and Payable Margin											4.75%	4.75%	5.75%	5.25%		5.04%
Fixed Rate Payable										1.12%					2.14%		5.52%	7.49%	6.88%
Fair Value/ Carrying Amount of Asset/ Liability	$ 13,886,000	$ 9,890,000		$ 3,075,000		$ 3,545,000		$ (2,624,000)

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Other Income - Summary of Other Income (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Component of Other Income, Nonoperating [Line Items]
Gain on sale of other assets	$ 2,217
Volatile organic compound emission plant lease income	1,220	2,900	4,714
(Loss) gain on sale of marketable securities	(2,560)	3,372	1,805
Miscellaneous (loss) income	(511)	6,088	1,008
Loss on notes repurchase			(12,645)
Other income (loss)	$ 366	$ 12,360	$ (5,118)

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Pension Benefits - Fair Value of Plan Assets (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	$ 134,408	$ 110,698	$ 102,085
Pooled Funds [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	94,981	82,501
Mutual Fund Equity investments [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	19,907	13,852
Mutual Funds Debt securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	4,298	3,445
Mutual Funds Real estate [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	3,843	2,092
Mutual Funds Cash and money market [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	672	291
Mutual Funds Other [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	$ 10,707	$ 8,517

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Pension Benefits - Components of Net Periodic Pension Cost Relating to Benefit Plans (Detail) (Net periodic pension cost [Member], USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Net periodic pension cost [Member]
Defined Benefit Plan, Net Periodic Benefit Cost [Abstract]
Service cost	$ 9,921	$ 8,978	$ 8,616
Interest cost	4,392	5,250	5,091
Expected return on plan assets	(5,270)	(5,805)	(5,431)
Amortization of net actuarial loss	1,980	371	281
Other	577	421	(3,390)
Net cost	$ 11,600	$ 9,215	$ 5,167

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Document and Entity Information	12 Months Ended
	Dec. 31, 2012
Entity Information [Line Items]
Document Type	20-F
Amendment Flag	false
Document Period End Date	Dec. 31, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	FY
Trading Symbol	TK
Entity Registrant Name	TEEKAY CORP
Entity Central Index Key	0000911971
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding	69,704,188

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Equity Accounted Investments - Additional Information (Detail) (USD $)	12 Months Ended					12 Months Ended			12 Months Ended				12 Months Ended	1 Months Ended		12 Months Ended				12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010	Sep. 30, 2010 Wah Kwong [Member]	Dec. 31, 2012 Exmar [Member]	Dec. 31, 2012 Angola LNG Project [Member] m3 Buildings	Dec. 31, 2012 RasGas 3 [Member]	Dec. 31, 2012 LNG carriers [Member]	Dec. 31, 2012 FPSO [Member] Vessel	Dec. 31, 2012 Sevan Marine ASA [Member]	Dec. 31, 2011 Sevan Marine ASA [Member]	Nov. 30, 2011 Sevan Marine ASA [Member]	Nov. 30, 2011 Sevan Marine ASA [Member] FPSO [Member] Vessel	Feb. 28, 2012 Teekay LNG [Member] Carriers	Nov. 30, 2010 Teekay LNG [Member] Exmar [Member] Vessel	Dec. 31, 2012 Teekay LNG [Member] RasGas 3 [Member] Vessel	Sep. 30, 2010 Teekay Tankers [Member]	Dec. 31, 2012 Teekay Tankers [Member] Wah Kwong [Member]	Dec. 31, 2012 Teekay LNG-Marubeni Joint Venture [Member]	Feb. 29, 2012 Teekay LNG-Marubeni Joint Venture [Member] Malt Lng Carriers [Member] Vessel
Schedule of Equity Method Investments [Line Items]
Ownership Percentage				50.00%	50.00%	33.00%	40.00%	52.00%		43.00%	40.00%	40.00%			50.00%	40.00%	50.00%	50.00%
Number of newbuilding						4
Area of newbuilding						160,400
Number of vessels									1				2	6	2	4				6
Joint venture interest in acquired business																				100.00%
Acquisition cost												$ 25,000,000			$ 72,500,000					$ 1,300,000,000
Ownership percentage																			48.00%
Fair value of investment of existing contract												37,100,000
Quoted market value of investment of existing contract										83,100,000	29,400,000
Percentage of debt secured guaranteed															50.00%			50.00%
Portion of purchase price financed															37,300,000
Issuance of common stock units															1,100,000
Secured debt															206,000,000			68,600,000
Equity (loss) income	79,211,000	(35,309,000)	(11,257,000)
Equity (loss) gain related to unrealized (loss) gain on interest rate swap	$ 5,300,000	$ (35,200,000)	$ (26,300,000)

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Capital Lease Obligations and Restricted Cash

12 Months Ended

Dec. 31, 2012

Capital Lease Obligations and Restricted Cash

10. Capital Lease Obligations and Restricted Cash

Capital Lease Obligations

	December  31, 2012 $		December  31, 2011 $
RasGas II LNG Carriers		472,085		471,397
Suezmax Tankers		165,489		175,650
Total		637,574		647,047
Less current portion		70,272		47,203
Long-term portion		567,302		599,844

RasGas II LNG Carriers. As at December 31, 2012, the Company was a party, as lessee, to 30-year capital lease arrangements relating to three LNG carriers (or the RasGas II LNG Carriers) that operate under time-charter contracts with Ras Laffan Liquefied Natural Gas Company Limited (II) (or RasGas II), a joint venture between Qatar Petroleum and ExxonMobil RasGas Inc., a subsidiary of Exxon Mobil Corporation. The Company has a 70% share in the leases for the RasGas II LNG Carriers.

Under the terms of the RasGas II LNG Carriers capital lease arrangements, the lessor claims tax depreciation on the capital expenditures it incurred to acquire these vessels. As is typical in these leasing arrangements, tax and change of law risks are assumed by the lessee. Lease payments under the lease arrangements are based on certain tax and financial assumptions at the commencement of the leases. If an assumption proves to be incorrect, the lessor is entitled to increase the lease payments to maintain its agreed after-tax margin. The Company’s carrying amount of the tax indemnification guarantee as at December 31, 2012 was $15.5 million and is included as part of other long-term liabilities in the Company’s consolidated balance sheets.

The tax indemnification is for the duration of the lease contract with the third party plus the years it would take for the lease payments to be statute barred, and ends in 2041. Although there is no maximum potential amount of future payments, the Company may terminate the lease arrangements on a voluntary basis at any time. If the lease arrangements terminate, the Company will be required to pay termination sums to the lessor sufficient to repay the lessor’s investment in the vessels and to compensate it for the tax-effect of the terminations, including recapture of any tax depreciation.

At their inception, the weighted-average interest rate implicit in these leases was 5.2%. These capital leases are variable-rate capital leases. As at December 31, 2012, the commitments under these capital leases approximated $977.1 million, including imputed interest of $505.0 million, repayable as follows:

Year	Commitment
2013	$	24,000
2014	$	24,000
2015	$	24,000
2016	$	24,000
2017	$	24,000
Thereafter	$	857,128

As the payments in the next five years only cover a portion of the estimated interest expense, the lease obligation will continue to increase. Starting in 2024, the lease payments will increase to cover both interest and principal to commence reduction of the principal portion of the lease obligations.

Suezmax Tankers. As at December 31, 2012, the Company was a party to capital leases on five Suezmax tankers. Under the terms of the lease arrangements the Company is required to purchase these vessels for a fixed price, at the option of the lessor. During 2012, the lessor extended the term of one of the five leases and has deferred its option to sell all five vessels to the Company until 2014. However, the Company expects the charterer to exercise its option to terminate their charter contracts on two of the Suezmax tankers in 2013. If this occurs, the capital leases for these two vessels will concurrently terminate and it is expected that the vessels will be sold to a third party. At the inception of these leases, the weighted-average interest rate implicit in these leases was 7.4%. These capital leases are variable-rate capital leases. However, any change in the lease payments resulting from changes in interest rates is offset by a corresponding change in the charter hire payments received by the Company.

Restricted Cash

Under the terms of the capital leases for the RasGas II LNG Carriers, the Company is required to have on deposit with financial institutions an amount of cash that, together with interest earned on the deposits, will equal the remaining amounts owing under the leases. These cash deposits are restricted to being used for capital lease payments and have been fully funded primarily with term loans (see Note 8).

As at December 31, 2012 and 2011, the amount of restricted cash on deposit for the three RasGas II LNG Carriers was $475.5 million and $476.1 million, respectively. As at December 31, 2012 and 2011, the weighted-average interest rates earned on the deposits were 0.4% and 0.3%, respectively. These rates do not reflect the effect of related interest rate swaps (see Note 15).

The Company also maintains restricted cash deposits relating to certain term loans and other obligations, which totaled $58.3 million and $21.1 million as at December 31, 2012 and 2011, respectively.

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Operating and Direct Financing Leases - Components of Net Investment in Direct Financing Leases (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Schedule Of Capital Leases Future Minimum Payments Receivable [Line Items]
Total minimum lease payments to be received	$ 675,013	$ 741,604
Estimated unguaranteed residual value of leased properties	203,465	203,465
Initial direct costs and other	1,409	1,636
Less unearned revenue	(443,286)	(486,797)
Total	436,601	459,908
Less current portion	12,303	23,171
Long-term portion	$ 424,298	$ 436,737

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Related Party Transactions - Additional Information (Detail) (Resolute Investments, Ltd. [Member])	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Resolute Investments, Ltd. [Member]
Related Party Transaction [Line Items]
Share of Resolute in outstanding common stock	44.90%	45.50%	42.30%

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CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Current
Cash and cash equivalents (note 8)	$ 639,491	$ 692,127
Restricted cash (note 10)	39,390	4,370
Accounts receivable, including non-trade of $83,046 (2011 - $38,120) and related party balance of $9,101 (2011 - $3,487)	491,656	359,758
Vessels held for sale (note 11 and 18)	22,364	19,000
Net investment in direct financing leases (note 9)	12,303	23,171
Prepaid expenses and other	61,549	85,599
Current portion of loans to equity accounted investees	139,183	50,000
Current portion of investment in term loans (note 4)	117,820
Current portion of derivative assets (note 15)	31,669	24,712
Total current assets	1,555,425	1,258,737
Restricted cash - non-current (note 10)	494,429	495,784
Vessels and equipment(note 8)
At cost, less accumulated depreciation of $1,976,257 (2011 - $2,102,856)	6,004,324	6,701,299
Vessels under capital leases, at cost, less accumulated amortization of $133,228 (2011 - $163,939) (note 10)	624,059	681,554
Advances on newbuilding contracts (note 16a)	692,675	507,908
Total vessels and equipment	7,321,058	7,890,761
Net investment in direct financing leases - non-current (note 9)	424,298	436,737
Loans to equity accounted investees and joint venture partners, bearing interest between 4.4% to 8%	67,720	35,248
Derivative assets (note 15)	148,581	140,557
Equity accounted investments (note 16b, 18b and 23)	480,043	240,537
Investment in term loans (note 4)	68,114	186,844
Other non-current assets	149,682	149,191
Intangible assets - net (note 6)	126,136	136,742
Goodwill (note 6)	166,539	166,539
Total assets	11,002,025	11,137,677
Current
Accounts payable	111,474	93,065
Accrued liabilities (note 7)	363,218	394,586
Current portion of derivative liabilities (note 15)	115,835	117,337
Current portion of long-term debt (note 8)	797,411	401,376
Current obligation under capital leases (note 10)	70,272	47,203
Current portion of in-process revenue contracts (note 6)	60,627	73,344
Loan from affiliates	4,064
Total current liabilities	1,522,901	1,126,911
Long-term debt, including amounts due to joint venture partners of $13,282 (2011 - $13,282) (note 8)	4,762,303	5,042,997
Long-term obligation under capital leases (note 10)	567,302	599,844
Derivative liabilities (note 15)	528,187	569,542
In-process revenue contracts	180,964	235,296
Other long-term liabilities	220,079	220,986
Total liabilities	7,781,736	7,795,576
Commitments and contingencies (note 8, 9, 10, 15 and 16)
Redeemable non-controlling interest (note 16e)	28,815	38,307
Equity
Common stock and additional paid-in capital ($0.001 par value; 725,000,000 shares authorized; 69 704,188 shares outstanding (2011 - 68,732,341); 70,203,388 shares issued (2011 - 74,391,691) (note 12)	681,933	660,917
Retained earnings	648,224	802,982
Non-controlling interest	1,876,085	1,863,798
Accumulated other comprehensive loss (note 1)	(14,768)	(23,903)
Total equity	3,191,474	3,303,794
Total liabilities and equity	$ 11,002,025	$ 11,137,677

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Investment in Term Loans

12 Months Ended

Dec. 31, 2012

Investment in Term Loans

4. Investment in Term Loans

In February 2011, Teekay made a $70 million term loan (or the 2011 Loan) to an unrelated ship-owner of a 2011-built Very Large Crude Carrier (or VLCC). The 2011 Loan bears interest at 9% per annum, which is payable quarterly. The 2011 Loan is repayable in full in February 2014. However, it may be repaid prior to maturity at the option of the borrower. The 2011 Loan is collateralized by a first-priority mortgage on the VLCC, together with other related collateral.

In July 2010, the Company’s subsidiary Teekay Tankers Ltd. (or Teekay Tankers) acquired two term loans with a total principal amount outstanding of $115.0 million for a total cost of $115.6 million (the Loans). The Loans bear interest at an annual interest rate of 9% per annum, and include a repayment premium feature which provides a total investment yield of approximately 10% per annum. The 9% interest income is received in quarterly installments and the Loans and repayment premium are payable in full at maturity in July 2013 when the repayment premium of 3% is calculated on the principal amount of the Loan outstanding at maturity. As at December 31, 2012 and 2011, the repayment premium included in the principal balance was $2.7 million and $1.5 million, respectively. The Loans are collateralized by first-priority mortgages on two 2010-built VLCCs owned by a shipowner based in Asia, together with other related security. The Loans can be repaid prior to maturity, at the option of the borrower.

The borrower on the 2011 Loan and the Loans is facing financial difficulty and subsequent to December 31, 2012 has defaulted on its interest payment obligations since January 31, 2013. If the borrower continues to be unable to make interest payments or to repay principal under these term loans, Teekay and Teekay Tankers may need to seek to foreclose on the security interests in the VLCCs.

Interest income in respect of the investments in the term loans is included in revenues in the consolidated statements of loss. As at December 31, 2012 and 2011, $2.8 million and $2.8 million, respectively, in interest receivable from the investment in these term loans were recorded in the consolidated balance sheets as accounts receivable.

The maximum potential loss relating to these loans is the Company’s original investment of $185.6 million and any unpaid interest, less the realized value of the underlying collateral.

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Acquisitions

12 Months Ended

Dec. 31, 2012

Acquisitions

3. Acquisitions

a) FPSO Units and Investment in Sevan Marine ASA

On November 30, 2011, the Company acquired from Sevan Marine ASA (or Sevan) the FPSO unit Sevan Hummingbird (or Hummingbird Spirit) and its existing customer contract for approximately $184 million (including an adjustment for working capital) and made an investment of approximately $25 million to obtain a 40% ownership interest in a recapitalized Sevan. The Company also entered into a cooperation agreement with Sevan relating to joint marketing of offshore projects, the development of future projects, and the financing of such projects. Concurrently, the Company’s subsidiary Teekay Offshore Partners L.P. (or Teekay Offshore) acquired from Sevan the FPSO unit Sevan Piranema (or Piranema Spirit) and its existing customer contract for approximately $164 million (including an adjustment for working capital). The purchase price for the acquisitions of the Hummingbird Spirit, the Piranema Spirit and the investment in Sevan were paid in cash and financed by a combination of new debt facilities, a private placement of Teekay Offshore common units and existing liquidity.

On November 30, 2011, the Company also entered into an agreement to acquire the FPSO unit Sevan Voyageur (or Voyageur Spirit) and its existing customer contract from Sevan. The Company has agreed to acquire the Voyageur Spirit once the existing upgrade project is completed and the Voyageur Spirit commences operations under its customer contract, which occurred in April 2013. Under the terms of the agreement, the Company will pay Sevan $94 million to acquire the Voyageur Spirit, will assume the Voyageur Spirit’s existing $230.0 million credit facility, which had an outstanding balance of $220.5 million on November 30, 2011, and is responsible for all upgrade costs after November 30, 2011, which are estimated to be between $140 million and $150 million (see Note 16c). The Company has control over the upgrade project and has guaranteed the repayment of the existing credit facility. The Voyageur Spirit has been consolidated by the Company since November 30, 2011, as the Voyageur Spirit has been determined to be a variable interest entity (or VIE) and the Company has been determined to be the primary beneficiary. The following table summarizes the balance sheet of the Voyageur Spirit as at December 31, 2012:

	$
ASSETS
Cash and cash equivalents		9,756
Other current assets		11,380
Vessels and equipment		455,819
Deferred tax assets		1,955
Total assets		478,910
LIABILITIES AND EQUITY
Accounts payable		18,359
Accrued liabilities		3,687
Long-term debt(note 8)		230,359
Derivative liabilities		4,509
Other long-term liabilities		13,344
Total liabilities		270,258
Total equity		208,652
Total liabilities and total equity		478,910

The 2007-built Piranema Spirit FPSO unit is currently operating under a long-term charter to Petrobras S.A. on the Piranema field located in the Brazil offshore region. The charter includes a firm contract period through March 2018, with up to 11 one-year extension options that includes cost-escalation clauses.

The 2008-built Hummingbird Spirit FPSO unit is currently operating under a charter to Centrica Energy Upstream on the Chestnut field in the UK sector of the North Sea. The charter was recently extended to December 2013 and thereafter, includes five three-month extension options.

The 2009-built Voyageur Spirit FPSO unit operated successfully on the Shelley field in the UK sector of the North Sea from August 2009 to August 2010. The unit under-went an upgrade prior to commencement of its charter contract with E.ON Ruhrgas UK E&P on the Huntington field in the UK sector of the North Sea. The charter commenced in April 2013 and has a firm period of five years, with extension options.

This transaction consolidates the industry in the harsh environment FPSO space, broadens the Company’s FPSO offering to include both ship shape and cylindrical FPSO solutions and was concluded at an attractive price. The Company recognized a total bargain purchase gain of $68.5 million related to the acquisition of the FPSO units and the 40% equity investment in Sevan. The gain has been recorded in the consolidated statements of loss for the year ended December 31, 2011.

During 2011, Sevan encountered severe financial difficulties following significant cost overruns on the upgrade of the Voyageur Spirit and was unable to service its existing financial obligations. The acceptance of the Company’s offer and the recognition of the bargain purchase gain, was in part due to the Company’s ability to structure the transaction in a way that would satisfy all the various stakeholders, including Sevan’s management, lenders, customers and shareholders, within a short time frame, the Company’s financial strength and limited competition in the transaction. As a result, the Company was able to purchase this business at a discount in this distressed acquisition situation.

The Company’s acquisition was accounted for using the purchase method of accounting, based upon estimates of fair value. The purchase price allocation was finalized in 2012 and there were changes to the preliminary fair values of the assets acquired and liabilities assumed by the Company. The changes are summarized in the table below. The Company’s 2011 consolidated financial statements were retroactively adjusted to include the impact of the revisions to the Company’s preliminary purchase price allocation. The operating results of the Hummingbird Spirit, Piranema Spirit and Voyageur Spirit are reflected in the Company’s consolidated financial statements from November 30, 2011, the effective date of acquisition. During the year ended December 31, 2011, the Company recognized $14.5 million of revenue and $68.4 million of net income, including the bargain purchase gain, resulting from these acquisitions. In addition, the Company incurred $1.1 million of acquisition-related expenses, which are reflected in general and administrative expenses.

The following table summarizes the preliminary and final purchase price allocation, which included the Voyageur Spirit VIE, by the Company at November 30, 2011:

	Preliminary $			Revisions $			Final $
ASSETS
Cash and cash equivalents		50,230			—			50,230
Other current assets		29,209			—			29,209
Vessels and equipment		869,952			22,400			892,352
Deferred income taxes		3,307			—			3,307
Investment in Sevan Marine		49,200			(12,100	)		37,100
Other assets—long-term		659			—			659
Total assets acquired		1,002,557			10,300			1,012,857
Current liabilities		41,376			—			41,376
In-process revenue contracts		158,968			—			158,968
Long-term debt (note 8)		220,497			—			220,497
Other long-term liabilities		6,036			—			6,036
Non-controlling interest		144,600			—			144,600
Total liabilities assumed		571,477			—			571,477
Net assets acquired		431,080			—			441,380
Bargain purchase gain		(58,235	)		(10,300	)		(68,535	)
Cash consideration		372,845			—			372,845

The following table shows comparative summarized consolidated pro forma financial information for the Company for the years ended December 31, 2011 and 2010, giving effect to the Company’s acquisition of the Sevan FPSO units as if it had taken place on January 1, 2010:

	Pro Forma Year Ended December 31, 2011 (unaudited) $			Pro Forma Year Ended December 31, 2010 (unaudited) $
Revenues		2,109,929			2,284,336
Net loss		(372,132	)		(176,456	)
Loss per common share
- Basic		(5.03	)		(3.79	)
- Diluted		(5.03	)		(3.79	)

b) Teekay LNG – Marubeni Joint Venture

In February 2012, a joint venture between the Company’s subsidiary Teekay LNG Partners L.P. (or Teekay LNG) and Marubeni Corporation (or Teekay LNG-Marubeni Joint Venture) acquired a 100% interest in six LNG carriers from Denmark-based A.P. Moller-Maersk A/S for approximately $1.3 billion. The Teekay LNG-Marubeni Joint Venture financed this acquisition with $1.06 billion from secured loan facilities and an aggregate of $266 million from equity contributions from Teekay LNG and Marubeni Corporation. Teekay LNG has agreed to guarantee its 52% share of the secured loan facilities of the Teekay LNG-Marubeni Joint Venture and, as a result, deposited $30 million in a restricted cash account as security. Teekay LNG has a 52% economic interest in the Teekay LNG-Marubeni Joint Venture and, consequently, its share of the equity contribution was approximately $138.2 million. Teekay LNG also contributed an additional $5.8 million for its share of legal and financing costs. Teekay LNG financed this equity contribution by borrowing under its existing credit facilities. This jointly-controlled entity is accounted for using the equity method.

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Derivative Instruments and Hedging Activities

12 Months Ended

Dec. 31, 2012

Derivative Instruments and Hedging Activities

15. Derivative Instruments and Hedging Activities

The Company uses derivatives to manage certain risks in accordance with its overall risk management policies.

Foreign Exchange Risk

The Company economically hedges portions of its forecasted expenditures denominated in foreign currencies with foreign currency forward contracts. Certain foreign currency forward contracts are designated, for accounting purposes, as cash flow hedges of forecasted foreign currency expenditures.

As at December 31, 2012, the Company was committed to the following foreign currency forward contracts:

					Fair Value /Carrying Amount
	Contract Amount in Foreign Currency (millions)		Average Forward  Rate (1)		of Asset (Liability)					Expected Maturity
					Hedge		Non-hedge			2013
					$		$			$
					(in millions of U.S. Dollars)					(in millions of U.S. Dollars)
Norwegian Kroner		201.0		5.93		—		2.1			33.9
Euro		9.8		0.76		—		(0.1	)		13.0
Canadian Dollar		9.3		1.01		0.2		—			9.2
British Pound		11.3		0.64		0.3		0.4			17.6
						0.5		2.4			73.7

(1) Average contractual exchange rate represents the contracted amount of foreign currency one U.S. Dollar will buy.

The Company enters into cross currency swaps, and pursuant to these swaps the Company receives the principal amount in Norwegian Kroner (or NOK) on the maturity date of the swap, in exchange for payment of a fixed U.S. Dollar amount. In addition, the cross currency swaps exchange a receipt of floating interest in Norwegian Kroner based on NIBOR plus a margin for a payment of US Dollar fixed interest or US Dollar floating interest based on LIBOR plus a margin. The purpose of the cross currency swaps is to economically hedge the foreign currency exposure on the payment of interest and principal at maturity of the Company’s Norwegian Kroner bonds due in 2013, 2015 and 2017. In addition, the cross currency swaps due in 2015 and 2017 economically hedges the interest rate exposure on the Norwegian Kroner bonds due in 2015 and 2017. The Company has not designated, for accounting purposes, these cross currency swaps as cash flow hedges of its Norwegian Kroner bonds due in 2013, 2015 and 2017. As at December 31, 2012, the Company was committed to the following cross currency swaps:

	Notional Amount		Notional Amount		Floating Rate Receivable					Floating Rate Payable								Fair Value / Carrying Amount of Asset /
Maturity					Reference					Reference					Fixed Rate
Date	NOK		USD		Rate		Margin			Rate		Margin			Payable			Liability
2013		600,000		98,500		NIBOR		4.75	%		LIBOR		5.04	%			(1)		9,890
2015		700,000		122,800		NIBOR		4.75	%							5.52	%		3,075
2017		600,000		101,400		NIBOR		5.75	%							7.49	%		3,545
2017		700,000		125,000		NIBOR		5.25	%							6.88	%		(2,624	)
																			13,886

(1) LIBOR subsequently fixed at 1.1%, subject to a LIBOR rate receivable cap of 3.5% (see next section).

Interest Rate Risk

The Company enters into interest rate swap agreements which exchange a receipt of floating interest for a payment of fixed interest to reduce the Company’s exposure to interest rate variability on its outstanding floating-rate debt. In addition, the Company holds interest rate swaps which exchange a payment of floating rate interest for a receipt of fixed interest in order to reduce the Company’s exposure to the variability of interest income on its restricted cash deposits. The Company has not designated its interest rate swap agreements as cash flow hedges for accounting purposes.

As at December 31, 2012, the Company was committed to the following interest rate swap agreements related to its LIBOR-based debt, restricted cash deposits and EURIBOR-based debt, whereby certain of the Company’s floating-rate debt and restricted cash deposits were swapped with fixed-rate obligations or fixed-rate deposits:

	Interest Rate Index		Principal Amount $		Fair Value / Carrying Amount of Asset / (Liability) $			Weighted- Average Remaining Term (years)		Fixed Interest Rate (%) (1)
LIBOR-Based Debt:
U.S. Dollar-denominated interest rate swaps (2)		LIBOR		412,880		(110,590	)		24.1		4.9
U.S. Dollar-denominated interest rate swaps (3)		LIBOR		3,170,273		(515,124	)		7.9		4.1
U.S. Dollar-denominated interest rate swaps (4)		LIBOR		98,500		(782	)		0.9		1.1
LIBOR-Based Restricted Cash Deposit:
U.S. Dollar-denominated interest rate swaps (2)		LIBOR		469,260		165,688			24.1		4.8
EURIBOR-Based Debt:
Euro-denominated interest rate swaps (5) (6)		EURIBOR		341,382		(41,329	)		11.5		3.1
				4,492,295		(502,137	)

(1) Excludes the margins the Company pays on its variable-rate debt, which, as of December 31, 2012, ranged from 0.3% to 4.25%.

(2) Principal amount reduces quarterly.

(3) Principal amount of $200 million is fixed at 2.14%, unless LIBOR exceeds 6%, in which case the Company pays a floating rate of interest.

(4) The floating LIBOR rate receivable is capped at 3.5%, which effectively results in a fixed rate of 1.12% unless LIBOR exceeds 3.5%, in which case the Company’s related interest rate effectively floats at LIBOR reduced by 2.38%.

(5) Principal amount reduces monthly to 70.1 million Euros ($92.5 million) by the maturity dates of the swap agreements.

(6) Principal amount is the U.S. Dollar equivalent of 258.8 million Euros.

Tabular Disclosure

The following table presents the location and fair value amounts of derivative instruments, segregated by type of contract, on the Company’s consolidated balance sheets.

	Current							Current
	Portion of							Portion of
	Derivative		Derivative		Accrued			Derivative			Derivative
	Assets		Assets		Liabilities			Liabilities			Liabilities
As at December 31, 2012
Derivatives designated as a cash flow hedge:
Foreign currency contracts		441		—		—			(1	)		—
Derivatives not designated as a cash flow hedge:
Foreign currency contracts		2,506		—		—			(60	)		—
Interest rate swap agreements		16,927		144,247		(22,312	)		(115,774	)		(525,225	)
Cross currency swap agreements		11,795		4,334		719			—			(2,962	)
		31,669		148,581		(21,593	)		(115,835	)		(528,187	)
As at December 31, 2011
Derivatives designated as a cash flow hedge:
Foreign currency contracts		1,551		28		—			(1,192	)		(264	)
Derivatives not designated as a cash flow hedge:
Foreign currency contracts		2,592		3		—			(6,248	)		(832	)
Interest rate swap agreements		15,608		139,651		(24,750	)		(109,897	)		(568,446	)
Cross currency swap agreements		1,576		875		225			—			—
Foinaven embedded derivative		3,385		—		—			—			—
		24,712		140,557		(24,525	)		(117,337	)		(569,542	)

For the periods indicated, the following table presents the effective portion of gains (losses) on foreign currency contracts designated and qualifying as cash flow hedges that was recognized in (1) accumulated other comprehensive income (loss) (or AOCI), (2) recorded in accumulated other comprehensive income (loss) during the term of the hedging relationship and reclassified to earnings, and (3) the ineffective portion of gains (losses) on derivative instruments designated and qualifying as cash flow hedges.

Year Ended December 31, 2012							Year Ended December 31, 2011
Balance Sheet (AOCI)	Statement of Loss						Balance Sheet (AOCI)		Statement of Loss
Effective Portion	Effective		Ineffective Portion				Effective Portion		Effective Portion		Ineffective Portion
2,412		—		—		Vessel operating expenses		2,007		918		(568	)	Vessel operating expenses
		1,436		(660	)	General and administrative expenses				4,636		(223	)	General and administrative expenses
2,412		1,436		(660	)			2,007		5,554		(791	)

Year Ended December 31, 2010
Balance Sheet (AOCI)		Statement of Loss
Effective Portion		Effective Portion			Ineffective Portion
	(3,559)		(680	)		(3,473	)	Vessel operating expenses
			(2,360	)		(1,402	)	General and administrative expenses
	(3,559)		(3,040	)		(4,875	)

Realized and unrealized (losses) gains from derivative instruments that are not designated for accounting purposes as cash flow hedges, are recognized in earnings and reported in realized and unrealized (losses) gains on non-designated derivatives in the consolidated statements of loss. The effect of the (loss) gain on derivatives not designated as hedging instruments in the statements of loss are as follows:

	Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,
	2012			2011			2010
	$			$			$
Realized (losses) gains relating to:
Interest rate swap agreements		(123,277	)		(132,931	)		(154,098	)
Interest rate swap agreement amendments		—			(149,666	)		—
Foreign currency forward contracts		1,155			9,965			(2,274	)
Forward freight agreements and bunker fuel swap contracts		—			36			(7,914	)
Foinaven embedded derivative		11,452			—			—
		(110,670	)		(272,596	)		(164,286	)
Unrealized gains (losses) relating to:
Interest rate swap agreements		26,770			(58,405	)		(146,780	)
Foreign currency forward contracts		6,933			(11,399	)		6,307
Forward freight agreements and bunker fuel swap contracts		—			—			(108	)
Foinaven embedded derivative		(3,385	)		(322	)		5,269
		30,318			(70,126	)		(135,312	)
Total realized and unrealized losses on derivative instruments		(80,352	)		(342,722	)		(299,598	)

Realized and unrealized gains (losses) of the cross currency swaps are recognized in earnings and reported in foreign currency exchange gain (loss) in the consolidated statements of loss. The effect of the gain (loss) on cross currency swaps on the consolidated statements of loss is as follows:

	Year Ended December 31,
	2012		2011			2010
	$		$			$
Realized gains		3,628		2,881			198
Unrealized gains (losses)		10,715		(1,583	)		4,034
Total realized and unrealized gains on cross currency swaps		14,343		1,298			4,232

As at December 31, 2012, the Company’s accumulated other comprehensive loss included $0.3 million of unrealized gains on foreign currency forward contracts designated as cash flow hedges. As at December 31, 2012, the Company estimated, based on then current foreign exchange rates, that it would reclassify approximately $0.3 million of net gains on foreign currency forward contracts from accumulated other comprehensive loss to earnings during the next 12 months. During 2010, the Company de-designated certain foreign currency forward contracts that were designated as cash flow hedges and reclassified $0.6 million of net losses from accumulated other comprehensive loss to earnings in the consolidated statement of loss. There were no de-designations in 2012 or 2011.

The Company is exposed to credit loss to the extent the fair value represents an asset (see above) in the event of non-performance by the counterparties to the foreign currency forward contracts, and cross currency and interest rate swap agreements; however, the Company does not anticipate non-performance by any of the counterparties. In order to minimize counterparty risk, the Company only enters into derivative transactions with counterparties that are rated A- or better by Standard & Poor’s or A3 or better by Moody’s at the time of the transaction. In addition, to the extent possible and practical, interest rate swaps are entered into with different counterparties to reduce concentration risk.

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Fair Value Measurements

12 Months Ended

Dec. 31, 2012

Fair Value Measurements

11. Fair Value Measurements

The following methods and assumptions were used to estimate the fair value of each class of financial instruments and other non-financial assets.

Cash and cash equivalents, restricted cash and marketable securities - The fair value of the Company’s cash and cash equivalents restricted cash, and marketable securities approximates their carrying amounts reported in the accompanying consolidated balance sheets.

Vessels and equipment and vessels held for sale – The estimated fair value of the Company’s vessels and equipment and vessels held for sale is determined based on discounted cash flows or appraised values. In cases where an active second hand sale and purchase market does not exist, the Company uses a discounted cash flow approach to estimate the fair value of an impaired vessel. In cases where an active second hand sale and purchase market exists, an appraised value is generally the amount the Company would expect to receive if it were to sell the vessel. Such appraisal is normally completed by the Company.

Investment in term loans –The fair value of the Company’s investment in term loans is estimated using a discounted cash flow analysis, based on current rates currently available for debt with similar terms and remaining maturities. In addition, an assessment of the credit worthiness of the borrower and the value of the collateral is taken into account when determining the fair value.

Loans to equity accounted investees and joint venture partners – The fair value of the Company’s loans to joint ventures and joint venture partners approximates their carrying amounts reported in the accompanying consolidated balance sheets.

Long-term debt – The fair value of the Company’s fixed-rate and variable-rate long-term debt is either based on quoted market prices or estimated using discounted cash flow analyses, based on rates currently available for debt with similar terms and remaining maturities and the current credit worthiness of the Company.

Derivative instruments – The fair value of the Company’s derivative instruments is the estimated amount that the Company would receive or pay to terminate the agreements at the reporting date, taking into account, as applicable, fixed interest rates on interest rate swaps, current interest rates, foreign exchange rates, and the current credit worthiness of both the Company and the derivative counterparties. The estimated amount is the present value of future cash flows. The Company transacts all of its derivative instruments through investment-grade rated financial institutions at the time of the transaction and requires no collateral from these institutions. For the Foinaven FPSO embedded derivative, the calculation of the fair value takes into account the fixed rate in the contract, current interest rates and foreign exchange rates. Given the current volatility in the credit markets, it is reasonably possible that the amounts recorded as derivative assets and liabilities could vary by material amounts in the near term.

The Company categorizes its fair value estimates using a fair value hierarchy based on the inputs used to measure fair value. The fair value hierarchy has three levels based on the reliability of the inputs used to determine fair value as follows:

Level 1. Observable inputs such as quoted prices in active markets;

Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

The following table includes the estimated fair value and carrying value of those assets and liabilities that are measured at fair value on a recurring and non-recurring basis, as well as the estimated fair value of the Company’s financial instruments that are not accounted for at a fair value on a recurring basis.

			December 31, 2012						December 31, 2011
	Fair Value Hierarchy Level		Carrying Amount Asset (Liability) $			Fair Value Asset (Liability) $			Carrying Amount Asset (Liability) $			Fair Value Asset (Liability) $
Recurring
Cash and cash equivalents, restricted cash, and marketable securities		Level 1		1,178,118			1,178,118			1,200,063			1,200,063
Derivative instruments(note 15)
Interest rate swap agreements—assets(1)		Level 2		165,688			165,688			159,603			159,603
Interest rate swap agreements—liabilities(1)		Level 2		(667,825	)		(667,825	)		(707,437	)		(707,437	)

Cross currency interest swap agreement	Level 2		13,886		13,886		2,677		2,677
Foreign currency contracts	Level 2		2,885		2,885		(4,362	)	(4,362	)
Foinaven embedded derivative	Level 2		—		—		3,385		3,385
Non-recurring
Vessels and equipment(note 18b)	Level 2		287,983		287,983		118,682		118,682
Equity accounted investments(2)	Level 3		—		—		9,623		9,623
Vessels held for sale(note 18b)	Level 2		22,364		22,364		19,000		19,000
Other
Investment in term loans	Level 3		188,756		186,048		189,666		190,939
Loans to equity accounted investees and joint venture partners—Current	Level 3		139,183		139,183		—		—
Loans to equity accounted investees and joint venture partners—Long-term	(3	)	67,720		(3	)	85,248		(3	)
Long-term debt—public(note 8)	Level 1		(914,338	)	(949,326	)	(547,242	)	(533,999	)
Long-term debt—non-public(note 8)	Level 2		(4,645,376	)	(4,329,117	)	(4,897,131	)	(4,538,215	)

(1) The fair value of the Company’s interest rate swap agreements at December 31, 2012 includes $21.6 million (December 31, 2011- $24.5 million) of net accrued interest which is recorded in accrued liabilities and accounts receivable on the consolidated balance sheets.

(2) The fair value measurement used to determine the impairment of the investment in Petrotrans Holdings Ltd. (or PTH) was based upon the estimated liquidation values of the underlying net assets of the investment.

(3) In these consolidated financial statements the Company’s loans to and equity investments in equity accounted investees form the aggregate carrying value of the Company’s interests in entities accounted for by the equity method. In addition, the loans to joint venture partners together with the joint venture partner’s equity investment in joint venture form the net aggregate carrying value of the joint venture partner’s interest in the joint venture. The fair value of the individual components of such aggregate interests is not determinable.

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Fair Value Measurements - Schedule of Fair Value of Financial Instruments and Other Non-Financial Assets (Detail) (USD $)	Dec. 31, 2012	Dec. 31, 2011
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Vessels held for sale	$ 22,364,000	$ 19,000,000
Investment in term loans	68,114,000	186,844,000
Loans to equity accounted investees and joint venture partners	139,183,000	50,000,000
Loans to equity accounted investees and joint venture partners - Long-term	67,720,000	35,248,000
Long-term debt	(5,559,714,000)	(5,444,373,000)
Fair Value Asset (Liability) [Member] | Level 1 [Member] | Public [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term debt	(949,326,000)	(533,999,000)
Fair Value Asset (Liability) [Member] | Level 2 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Vessels held for sale	22,364,000	19,000,000
Fair Value Asset (Liability) [Member] | Level 2 [Member] | Private [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term debt	(4,329,117,000)	(4,538,215,000)
Fair Value Asset (Liability) [Member] | Level 3 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Equity accounted investments		9,623,000
Investment in term loans	186,048,000	190,939,000
Loans to equity accounted investees and joint venture partners	139,183,000
Fair Value Asset (Liability) [Member] | Recurring [Member] | Level 1 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents, restricted cash, and marketable securities	1,178,118,000	1,200,063,000
Fair Value Asset (Liability) [Member] | Recurring [Member] | Level 2 [Member] | Interest rate swap agreements [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Interest rate swap agreements	165,688,000	159,603,000
Fair Value Asset (Liability) [Member] | Recurring [Member] | Level 2 [Member] | Interest Rate Swap Agreements 1 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Interest rate swap agreements	(667,825,000)	(707,437,000)
Fair Value Asset (Liability) [Member] | Recurring [Member] | Level 2 [Member] | Cross currency swap agreements [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cross currency interest swap agreement	13,886,000	2,677,000
Fair Value Asset (Liability) [Member] | Non-recurring [Member] | Level 2 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Vessels and equipment	287,983,000	118,682,000
Fair Value Asset (Liability) [Member] | Non-recurring [Member] | Level 2 [Member] | Foreign currency contracts [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Foreign currency contracts	2,885,000	(4,362,000)
Fair Value Asset (Liability) [Member] | Non-recurring [Member] | Level 2 [Member] | Foinaven embedded derivative [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Foinaven embedded derivative		3,385,000
Carrying Amount Asset (Liability) [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Loans to equity accounted investees and joint venture partners - Long-term	67,720,000	85,248,000
Carrying Amount Asset (Liability) [Member] | Level 1 [Member] | Public [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term debt	(914,338,000)	(547,242,000)
Carrying Amount Asset (Liability) [Member] | Level 2 [Member] | Private [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term debt	(4,645,376,000)	(4,897,131,000)
Carrying Amount Asset (Liability) [Member] | Level 3 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Investment in term loans	188,756,000	189,666,000
Loans to equity accounted investees and joint venture partners - Current	139,183,000
Carrying Amount Asset (Liability) [Member] | Recurring [Member] | Level 1 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents, restricted cash, and marketable securities	1,178,118,000	1,200,063,000
Carrying Amount Asset (Liability) [Member] | Recurring [Member] | Level 2 [Member] | Interest rate swap agreements [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Interest rate swap agreements	165,688,000	159,603,000
Carrying Amount Asset (Liability) [Member] | Recurring [Member] | Level 2 [Member] | Interest Rate Swap Agreements 1 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Interest rate swap agreements	(667,825,000)	(707,437,000)
Carrying Amount Asset (Liability) [Member] | Recurring [Member] | Level 2 [Member] | Cross currency swap agreements [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cross currency interest swap agreement	13,886,000	2,677,000
Carrying Amount Asset (Liability) [Member] | Recurring [Member] | Level 2 [Member] | Foreign currency contracts [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Foreign currency contracts	2,885,000	(4,362,000)
Carrying Amount Asset (Liability) [Member] | Recurring [Member] | Level 2 [Member] | Foinaven embedded derivative [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Foinaven embedded derivative		3,385,000
Carrying Amount Asset (Liability) [Member] | Non-recurring [Member] | Level 2 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Vessels and equipment	287,983,000	118,682,000
Vessels held for sale	22,364,000	19,000,000
Carrying Amount Asset (Liability) [Member] | Non-recurring [Member] | Level 3 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Equity accounted investments		$ 9,623,000

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Accrued Liabilities

12 Months Ended

Dec. 31, 2012

Accrued Liabilities

7. Accrued Liabilities

	December 31,  2012 $		December 31,  2011 $
Voyage and vessel expenses		144,250		209,058
Interest		66,125		63,310
Payroll and benefits and other		100,452		83,528
Deferred revenue		52,391		38,690
		363,218		394,586

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Segment Reporting - Segment Results Information (Parenthetical) (Detail) (FPSO Segment [Member], USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2010
FPSO Segment [Member]
Segment Reporting Information [Line Items]
Revenue related to operations in previous years	$ 59.2

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Income Taxes - Components of Company's Deferred Tax Assets and Liabilities (Parenthetical) (Detail) (USD $) In Billions, unless otherwise specified	Dec. 31, 2012
Income Taxes [Line Items]
Net operating loss carry forwards	$ 1.69

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Financing Transactions

12 Months Ended

Dec. 31, 2012

Financing Transactions

5. Financing Transactions

Teekay LNG and Teekay Offshore are limited partnerships formed by the Company as part of its strategy to expand its operations primarily in the LNG and LPG shipping sector (Teekay LNG) and to expand its operations in the offshore oil marine transportation, production, processing and storage sectors (Teekay Offshore). Teekay Tankers is a corporation formed by the Company to provide international marine transportation of crude oil and refined products. As of December 31, 2012, Teekay owned a 37.5% interest in Teekay LNG (40.1%—December 31, 2011), including common units and its 2% general partner interest, a 29.4% interest in Teekay Offshore (33.0%—December 31, 2011), including common units and its 2% general partner interest and 25.1% of the capital stock of Teekay Tankers (26.0%—December 31, 2011), including Teekay Tankers’ outstanding shares of Class B common stock, which entitle the holders to five votes per share, subject to a 49% aggregate Class B Common Stock voting power maximum. Teekay maintains control of Teekay LNG and Teekay Offshore by virtue of its control of the general partner of each partnership and thus consolidates these subsidiaries. Teekay has entered into an omnibus agreement with Teekay LNG and Teekay Offshore to govern, among other things, when the Company, Teekay LNG and Teekay Offshore may compete with each other and to provide the applicable parties certain rights of first offer on LNG carriers, oil tankers, shuttle tankers, FSO units and FPSO units. In addition, Teekay has entered into a non-competition agreement with Teekay Tankers, which provides Teekay Tankers with a right of first refusal to participate in any future conventional crude oil tanker and product tanker opportunities developed by Teekay for a period of three years from June 2012.

During the years ended December 31, 2012, 2011, and 2010, the Company’s publicly traded subsidiaries, Teekay Tankers, Teekay Offshore and Teekay LNG completed the following public offerings and equity placements:

	Total  Proceeds Received $		Less: Teekay Corporation Portion $			Offering Expenses $			Net  Proceeds Received $
2012
Teekay Offshore Public Offerings		219,474		(4,389	)		(8,164	)		206,921
Teekay Offshore Direct Equity Placement		45,919		(919	)		—			45,000
Teekay Tankers Public Offerings		69,000		—			(3,229	)		65,771
Teekay LNG Public Offering		189,243		(3,784	)		(6,927	)		178,532
2011
Teekay Tankers Public Offerings		112,054		—			(4,820	)		107,234
Teekay Offshore Private Equity Placement		420,145		(230,144	)		(279	)		189,722
Teekay LNG Public Offerings		356,133		(7,123	)		(14,909	)		334,101
2010
Teekay Offshore Public Offerings		419,989		(8,400	)		(18,645	)		392,944
Teekay Tankers Public Offerings		243,977		(32,000	)		(9,279	)		202,698
Teekay LNG Direct Equity Placement		51,020		(1,020	)		—			50,000

(1) Consists of the portion Teekay Corporation subscribed for in the public offering or equity placement.

As a result of the public offerings and equity placements of Teekay Tankers, Teekay Offshore and Teekay LNG, the Company recorded increases to retained earnings of $88.7 million (2012), $124.2 million (2011) and $123.2 million (2010). These amounts represent Teekay’s dilution gains from the issuance of units and shares in these consolidated subsidiaries.

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Goodwill, Intangible Assets and In-Process Revenue Contracts

12 Months Ended

Dec. 31, 2012

Goodwill, Intangible Assets and In-Process Revenue Contracts

6. Goodwill, Intangible Assets and In-Process Revenue Contracts

Goodwill

The carrying amount of goodwill for the years ended December 31, 2012 and 2011, for the Company’s reportable segments are as follows:

	Shuttle Tanker and FSO Segment $		Liquefied  Gas Segment $		Conventional Tanker Segment $			Total $
Balance as of December 31, 2010		130,908		35,631		36,652			203,191
Goodwill impairment		—		—		(36,652	)		(36,652	)
Balance as of December 31, 2011 and 2012		130,908		35,631		—			166,539

A goodwill impairment charge of $36.7 million was recognized in the Company’s consolidated statements of loss for the year ended December 31, 2011 in respect of its Suezmax tanker reporting unit. The fair value of this reporting unit was determined using the present value of expected future cash flows discounted at a rate equivalent to a market participant’s weighted-average cost of capital. The estimates and assumptions regarding expected future cash flows and the appropriate discount rates are in part based upon existing contracts, future tanker market rates, historical experience, financial forecasts and industry trends and conditions. The recognition of the goodwill impairment charge was driven by the continuing weak tanker market, which has largely been caused by an oversupply of vessels relative to demand.

Intangible Assets

As at December 31, 2012, the Company’s intangible assets consisted of:

	Weighted-Average Amortization Period (Years)		Gross  Carrying Amount $		Accumulated Amortization $			Net  Carrying Amount $
Customer contracts		13.7		316,684		(191,587	)		125,097
Other intangible assets		0.9		1,280		(241	)		1,039
		13.6		317,964		(191,828	)		126,136

As at December 31, 2011 the Company’s intangible assets consisted of:

	Weighted-Average Amortization Period (Years)		Gross Carrying Amount $		Accumulated Amortization $			Net  Carrying Amount $
Customer contracts		15.6		329,815		(194,266	)		135,549
Other intangible assets		4.5		11,430		(10,237	)		1,193
		15.2		341,245		(204,503	)		136,742

Aggregate amortization expense of intangible assets for the year ended December 31, 2012, was $17.2 million (2011—$19.1 million, 2010—$26.2 million), which is included in depreciation and amortization. Amortization of intangible assets for the five years following 2012 is expected to be $18.4 million (2013), $13.0 million (2014), $11.9 million (2015), $10.9 million (2016), $9.9 million (2017) and $62.0 million (thereafter). During the year ended December 31, 2012, unfavorable customer contracts with a carrying value of $5.9 million were reclassified from intangible assets to in-process revenue contracts.

During 2010, the Company recognized $31.7 million in write-downs of three vessel purchase options and certain in-charter customer contracts. The vessel purchase options and in-charter contracts either expired unexercised or were unlikely to be exercised by the Company.

In-Process Revenue Contracts

As part of the Company’s acquisition of FPSO units from Sevan and its previous acquisitions of Petrojarl ASA (subsequently renamed Teekay Petrojarl AS, or Teekay Petrojarl) and 50% of OMI Corporation (or OMI), the Company assumed certain FPSO contracts and time charter-out contracts with terms that were less favorable than the then prevailing market terms. At the time of the acquisitions, the Company recognized a liability based on the estimated fair value of these contracts. The Company is amortizing this liability over the estimated remaining terms of the contracts on a weighted basis based on the projected revenue to be earned under the contracts.

Amortization of in-process revenue contracts for the year ended December 31, 2012 was $72.9 million (2011—$46.4 million, 2010—$48.3 million), which is included in revenues on the consolidated statements of loss. Amortization for the five years following 2012 is expected to be $61.7 million (2013), $40.2 million (2014), $19.8 million (2015), $19.8 million (2016), $19.8 million (2017) and $80.3 million (thereafter).

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Long-Term Debt

12 Months Ended

Dec. 31, 2012

Long-Term Debt

8. Long-Term Debt

	December 31, 2012		December 31, 2011
	$		$
Revolving Credit Facilities		1,627,979		2,244,634
Senior Notes (8.5%) due January 15, 2020		447,115		446,825
Norwegian Kroner-denominated Bonds due through May 2017		467,223		100,417
U.S. Dollar-denominated Term Loans due through 2021		2,432,374		2,069,860
U.S. Dollar-denominated Term Loan Variable Interest Entity due October 2016		230,359		220,450
Euro-denominated Term Loans due through 2023		341,382		348,905
U.S. Dollar-denominated Unsecured Demand Loans due to Joint Venture Partners		13,282		13,282
Total		5,559,714		5,444,373
Less current portion		797,411		401,376
Long-term portion		4,762,303		5,042,997

As of December 31, 2012, the Company had 15 revolving credit facilities (or the Revolvers) available, which, as at such date, provided for aggregate borrowings of up to $2.8 billion, of which $1.2 billion was undrawn. Interest payments are based on LIBOR plus margins; at December 31, 2012, and December 31, 2011, the margins ranged between 0.45% and 3.25%. At December 31, 2012, and December 31, 2011, the three-month LIBOR was 0.31% and 0.58%, respectively. The total amount available under the Revolvers reduces by $740.8 million (2013), $741.3 million (2014), $226.4 million (2015), $346.4 million (2016), $463.0 million (2017) and $321.0 million (thereafter). The Revolvers are collateralized by first-priority mortgages granted on 58 of the Company’s vessels, together with other related security, and include a guarantee from Teekay or its subsidiaries for all outstanding amounts.

The Company’s 8.5% senior unsecured notes (or the 8.5% Notes) are due January 15, 2020 with a principal amount of $450 million. The 8.5% Notes were sold at a price equal to 99.181% of par and the discount is accreted through the maturity date of the notes using the effective interest rate of 8.625% per year. The Company capitalized issuance costs of $9.4 million, which is recorded in other non-current assets in the consolidated balance sheet and is amortized to interest expense over the term of the 8.5% Notes. The 8.5% Notes rank equally in right of payment with all of Teekay’s existing and future senior unsecured debt and senior to any future subordinated debt of Teekay. The 8.5% Notes are not guaranteed by any of Teekay’s subsidiaries and effectively rank behind all existing and future secured debt of Teekay and other liabilities of its subsidiaries.

The Company may redeem the 8.5% Notes in whole or in part at any time before their maturity date at a redemption price equal to the greater of (i) 100% of the principal amount of the 8.5% Notes to be redeemed and (ii) the sum of the present values of the remaining scheduled payments of principal and interest on the 8.5% Notes to be redeemed (excluding accrued interest), discounted to the redemption date on a semi-annual basis, at the treasury yield plus 50 basis points, plus accrued and unpaid interest to the redemption date. In addition, at any time or from time to time prior to January 15, 2013, the Company may redeem up to 35% of the aggregate principal amount of the 8.5% Notes issued under the indenture with the net cash proceeds of one or more qualified equity offerings at a redemption price equal to 108.5% of the principal amount of the 8.5% Notes to be redeemed, plus accrued and unpaid interest, if any, to the redemption date, provided certain conditions are met. No such redemptions had been made as at December 31, 2012.

In November 2010, Teekay Offshore issued in the Norwegian bond market NOK 600 million of senior unsecured bonds that mature in November 2013. As at December 31, 2012, the carrying amount of the bonds was $107.8 million. The bonds are listed on the Oslo Stock Exchange. Interest payments on the bonds are based on NIBOR plus a margin of 4.75%. Teekay Offshore entered into a cross currency rate swap to swap all interest and payments into U.S. Dollars with interest rate payments swapped from NIBOR plus a margin of 4.75% into LIBOR plus a margin of 5.04% and the transfer of the principal amount fixed at $98.5 million upon maturity in exchange for NOK 600 million. Teekay Offshore also entered into an interest rate swap to swap the interest payments from LIBOR to a fixed rate of 1.12%. The floating LIBOR rate receivable from the interest rate swap is capped at 3.5%, which effectively results in a fixed rate of 1.12% unless LIBOR exceeds 3.5%, in which case Teekay Offshore’s related interest rate effectively floats at LIBOR, but reduced by 2.38% (see Note 15).

In January 2012, Teekay Offshore issued in the Norwegian bond market NOK 600 million of senior unsecured bonds that mature in January 2017. As at December 31, 2012, the carrying amount of the bonds was approximately $107.8 million. The bonds are listed on the Oslo Stock Exchange. The interest payments on the bonds are based on NIBOR plus a margin of 5.75%. Teekay Offshore entered into a cross currency rate swap to swap all interest and principal payments into U.S. Dollars, with the interest payments fixed at a rate of 7.49%, and the transfer of the principal amount fixed at $101.4 million upon maturity in exchange for NOK 600 million (see Note 15).

In May 2012, Teekay LNG issued in the Norwegian bond market NOK 700 million of senior unsecured bonds that mature in May 2017. As at December 31, 2012, the carrying amount of the bonds was $125.8 million. The bonds are listed on the Oslo Stock Exchange. The interest payments on the bonds are based on NIBOR plus a margin of 5.25%. Teekay LNG entered into a cross currency rate swap to swap all interest and principal payments into U.S. Dollars, with the interest payments fixed at a rate of 6.88%, and the transfer of principal fixed at $125.0 million upon maturity in exchange for NOK 700 million (see Note 15).

In October 2012, Teekay issued in the Norwegian bond market NOK 700 million of senior unsecured bonds that mature in October 2015. As at December 31, 2012, the carrying amount of the bonds was $125.8 million. The Company has applied to list the bonds on the Oslo Stock Exchange. The interest payments on the bonds are based on NIBOR plus a margin of 4.75%. Teekay entered into a cross currency rate swap to swap all interest and principal payments into U.S. Dollars, with the interest payments fixed at a rate of 5.52%, and the transfer of principal fixed at $122.8 million upon maturity in exchange for NOK 700 million (see Note 15).

As of December 31, 2012, the Company had 18 U.S. Dollar-denominated term loans outstanding, which totaled $2.4 billion (December 31, 2011– $2.1 billion). Certain of the term loans with a total outstanding principal balance of $328.0 million as at December 31, 2012 (December 31, 2011– $372.7 million) bear interest at a weighted-average fixed rate of 5.3% (December 31, 2011 – 5.3%). Interest payments on the remaining term loans are based on LIBOR plus a margin. At December 31, 2012 and December 31, 2011, the margins ranged between 0.3% and 4.25%, and between 0.3% and 4.00%, respectively. At December 31, 2012 and December 31, 2011, the three-month LIBOR was 0.31% and 0.58%, respectively. The term loan payments are made in quarterly or semi-annual payments commencing three or six months after delivery of each newbuilding vessel financed thereby, and 17 of the term loans have balloon or bullet repayments due at maturity. The term loans are collateralized by first-priority mortgages on 36 (December 31, 2011 – 33) of the Company’s vessels, together with certain other security. In addition, at December 31, 2012, all but $107.0 million (December 31, 2011 – $119.4 million) of the outstanding term loans were guaranteed by Teekay or its subsidiaries.

The Voyageur Spirit FPSO unit has been consolidated by the Company effective November 30, 2011, as the Voyageur Spirit has been determined to be a VIE and the Company has been determined to be the primary beneficiary (see Note 3a). As a result, the Company has included the Voyageur Spirit’s existing U.S. Dollar-denominated term loan (VIE term loan) outstanding, which, as at December 31, 2012, totaled $230.4 million (December 31, 2011 – $220.5 million). Interest payments on the VIE term loan are based on LIBOR plus a margin of 2.95% and are paid quarterly. The VIE term loan is collateralized by a first-priority mortgage on the Voyageur Spirit, together with certain other security. The Company has guaranteed the repayment of the existing credit facility.

The Company has two Euro-denominated term loans outstanding, which, as at December 31, 2012, totaled 258.8 million Euros ($341.4 million) (December 31, 2011 – 269.2 million Euros ($348.9 million)). The Company is repaying the loans with funds generated by two Euro-denominated, long-term time-charter contracts. Interest payments on the loans are based on EURIBOR plus a margin. At December 31, 2012, and December 31, 2011, the margins ranged between 0.6% and 2.25% and the one-month EURIBOR at December 31, 2012, was 0.1% (December 31, 2011 – 1.02%). The Euro-denominated term loans reduce in monthly payments with varying maturities through 2023 and are collateralized by first-priority mortgages on two of the Company’s vessels, together with certain other security, and are guaranteed by a subsidiary of Teekay.

Both Euro-denominated term loans and Norwegian Kroner-denominated bonds are revalued at the end of each period using the then-prevailing U.S. Dollar exchange rate. Due primarily to the revaluation of the Company’s Norwegian Kroner-denominated bonds, the Company’s Euro-denominated term loans, capital leases and restricted cash, and the change in the valuation of the Company’s cross currency swaps, the Company recognized foreign exchange loss of $12.9 million (2011 – $12.7 million gain, 2010 – $32.0 million gain).

The Company has one U.S. Dollar-denominated loan outstanding owing to a joint venture partner, which, as at December 31, 2012, totaled $13.3 million (2011 – $13.3 million), including accrued interest. Interest payments on the loan are based on a fixed interest rate of 4.84%. This loan is repayable on demand no earlier than February 27, 2027.

The weighted-average effective interest rate on the Company’s aggregate long-term debt as at December 31, 2012 was 2.9% (December 31, 2011 – 2.6%). This rate does not include the effect of the Company’s interest rate swap agreements (see Note 15).

The aggregate annual long-term debt principal repayments required to be made by the Company subsequent to December 31, 2012, are $797.4 million (2013), $1,208.2 million (2014), $442.6 million (2015), $390.2 million (2016), $1,004.2 million (2017) and $1.7 billion (thereafter).

Among other matters, the Company’s long-term debt agreements generally provide for maintenance of minimum consolidated financial covenants and five loan agreements require the maintenance of vessel market value to loan ratios. As at December 31, 2012 these ratios ranged from 113.2 % to 284.0% compared to their minimum required ratios of 105% and 115%. The vessel values used in these ratios are appraised values prepared by the Company based on second hand sale and purchase market data. A further delay in the recovery of the conventional tanker market and a weakening of the LNG/LPG carrier market could negatively affect the ratios. Certain loan agreements require that a minimum level of free cash be maintained and as at December 31, 2012 and December 31, 2011, this amount was $100.0 million. Most of the loan agreements also require that the Company maintain an aggregate minimum level of free liquidity and undrawn revolving credit lines with at least six months to maturity, in amounts ranging from 5% to 7.5% of total debt. As at December 31, 2012, this aggregate amount was $319.1 million (December 31, 2011—$318.3 million).

As at December 31, 2012, the Company was in compliance with all covenants required by its credit facilities and other long-term debt.

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Acquisitions - Additional Information (Detail) (USD $)	12 Months Ended							12 Months Ended		12 Months Ended				12 Months Ended				12 Months Ended	1 Months Ended		1 Months Ended			1 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2012 Teekay LNG-Marubeni Joint Venture [Member]	Feb. 28, 2012 Teekay LNG-Marubeni Joint Venture [Member]	Feb. 28, 2012 Teekay LNG-Marubeni Joint Venture [Member] Secured Debt [Member]	Feb. 28, 2012 Teekay LNG-Marubeni Joint Venture [Member] Shareholders' Equity [Member]	Dec. 31, 2012 FPSO unit Sevan Hummingbird [Member]	Nov. 30, 2011 FPSO unit Sevan Hummingbird [Member]	Dec. 31, 2012 FPSO unit Sevan Piranema [Member]	Dec. 31, 2012 Sevan Marine ASA [Member]	Dec. 31, 2011 Sevan Marine ASA [Member]	Nov. 30, 2011 Sevan Marine ASA [Member]	Dec. 31, 2012 Voyageur Spirit [Member] Subsequent Event [Member]	Nov. 30, 2011 Voyageur Spirit [Member] Minimum [Member]	Nov. 30, 2011 Voyageur Spirit [Member] Maximum [Member]	Nov. 30, 2011 Voyageur Spirit [Member] Capital Addition Purchase Commitments [Member]	Dec. 31, 2011 FPSO Segment [Member]	Nov. 30, 2012 Teekay Offshore [Member]	Nov. 30, 2011 Teekay Offshore [Member] FPSO unit Sevan Piranema [Member]	Feb. 28, 2012 Teekay LNG [Member] Carriers	Feb. 28, 2012 Teekay LNG [Member] Teekay LNG-Marubeni Joint Venture [Member]	Feb. 28, 2012 Teekay LNG [Member] Teekay LNG-Marubeni Joint Venture [Member] Secured Debt [Member]	Feb. 28, 2012 Teekay LNG [Member] Teekay LNG-Marubeni Joint Venture [Member] Shareholders' Equity [Member]
Business Acquisition [Line Items]
Acquisition cost					$ 1,300,000,000				$ 184,000,000				$ 25,000,000				$ 94,000,000			$ 164,000,000
Assume existing credit facility																	230,000,000
Outstanding balance of credit facility																	220,500,000
Purchase price of acquisition															140,000,000	150,000,000			55,000,000
Extension option of contract								Includes five three-month extension options		Up to 11 one-year extension options
Extension option period														5 years					10 years
Bargain purchase gain		68,535,000																68,535,000
REVENUES																		14,500,000
Income from acquisition, including bargain purchase gain																		68,400,000
Acquisition-related expenses																		1,100,000
Percentage of ownership in LNG carriers				52.00%	100.00%						43.00%	40.00%	40.00%									52.00%
Number of vessels																					6
Financed amount						1,060,000,000	266,000,000
Percentage of secured debt guaranteed by the Partnership																							52.00%
Restricted cash deposits relating to certain term loans	494,429,000	495,784,000																					30,000,000
Financed amount through equity contributions																								138,200,000
Additional share of legal and financing costs	$ 183,554,000	$ 38,496,000	$ 45,480,000																			$ 5,800,000

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Pension Benefits - Components of Other Comprehensive Loss Relating to Plans (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Other comprehensive (loss):
Net gain (loss) arising during the period	$ 6,143	$ (12,052)	$ (5,711)
Amortization of net actuarial loss (gain)	1,979	319	(1,026)
Other loss			(390)
Total income (loss)	$ 8,122	$ (11,733)	$ (7,127)

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Fair Value Measurements - Schedule of Fair Value of Financial Instruments and Other Non-Financial Assets (Parenthetical) (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair value of interest rate swap agreements	$ 21.6	$ 24.5
Level 2 [Member] | Fair Value Asset (Liability) [Member] | Recurring [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair value of interest rate swap agreements	$ 21.6	$ 24.5

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Acquisitions - Summary of Preliminary and Final Fair Values of Assets Acquired and Liabilities Assumed, Including VIE (Detail) (USD $) In Thousands, unless otherwise specified			1 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Nov. 30, 2011 Preliminary [Member]	Nov. 30, 2011 Revisions [Member]	Nov. 30, 2011 Final [Member]
Business Acquisition [Line Items]
Cash and cash equivalents			$ 50,230		$ 50,230
Other current assets			29,209		29,209
Vessels and equipment			869,952	22,400	892,352
Deferred income taxes			3,307		3,307
Investment in Sevan Marine			49,200	(12,100)	37,100
Other assets - long-term			659		659
Total assets acquired			1,002,557	10,300	1,012,857
Current liabilities			41,376		41,376
In-process revenue contracts	180,964	235,296	158,968		158,968
Long-term debt (note 8)			220,497		220,497
Other long-term liabilities			6,036		6,036
Non-controlling interest			144,600		144,600
Total liabilities assumed			571,477		571,477
Net assets acquired			431,080		441,380
Bargain purchase gain			(58,235)	(10,300)	(68,535)
Cash consideration			$ 372,845		$ 372,845

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Commitments and Contingencies - Additional Information (Detail)	12 Months Ended			12 Months Ended					12 Months Ended				12 Months Ended			1 Months Ended	12 Months Ended					12 Months Ended				12 Months Ended				12 Months Ended			1 Months Ended
	Dec. 31, 2012 USD ($)	Dec. 31, 2010 USD ($)	Dec. 31, 2011	Dec. 31, 2012 Voyageur Spirit [Member] USD ($)	Dec. 31, 2012 Vessels [Member] USD ($)	Dec. 31, 2012 Insurance Claims [Member] USD ($)	Nov. 30, 2011 Minimum [Member] Voyageur Spirit [Member] USD ($)	Nov. 30, 2011 Maximum [Member] Voyageur Spirit [Member] USD ($)	Dec. 31, 2012 Letter of Credit [Member] Vessel	Dec. 31, 2012 RasGas II LNG Carriers [Member]	Dec. 31, 2012 RasGas II LNG Carriers [Member] Letter of Credit [Member] USD ($)	Sep. 30, 2010 Wah Kwong [Member]	Dec. 31, 2012 Shuttle tankers [Member] Vessel	Dec. 31, 2012 FPSO [Member] Vessel	Dec. 31, 2012 LNG carriers [Member] Vessel	Nov. 30, 2012 Teekay Offshore [Member] USD ($)	Dec. 31, 2012 Teekay Offshore [Member] USD ($)	Dec. 31, 2012 Teekay Offshore [Member] NOK	Dec. 31, 2010 Teekay Offshore [Member] USD ($)	Dec. 31, 2011 Teekay Offshore [Member] USD ($)	Dec. 31, 2011 Teekay Offshore [Member] NOK	Dec. 31, 2012 Teekay Offshore [Member] Voyageur Spirit [Member] USD ($)	Dec. 31, 2012 Teekay Tankers [Member] USD ($)	Dec. 31, 2011 Teekay Tankers [Member]	Sep. 30, 2010 Teekay Tankers [Member]	Dec. 31, 2012 Teekay Tankers [Member] Wah Kwong [Member] USD ($) Installment	Sep. 30, 2010 Teekay Tankers [Member] Wah Kwong [Member] USD ($)	Sep. 30, 2010 Teekay Tankers [Member] VLCC [Member] USD ($)	Sep. 30, 2010 Teekay Tankers [Member] VLCC [Member] Wah Kwong [Member] USD ($)	Dec. 31, 2012 Voyageur Spirit [Member] USD ($)	Dec. 31, 2012 Voyageur Spirit [Member] Minimum [Member] USD ($)	Dec. 31, 2012 Voyageur Spirit [Member] Maximum [Member] USD ($)	Feb. 28, 2012 Teekay LNG [Member] Carriers	Dec. 31, 2012 Teekay LNG [Member] RasGas II LNG Carriers [Member] USD ($)	Dec. 31, 2012 Teekay LNG [Member] RasGas II LNG Carriers [Member] Letter of Credit [Member] USD ($)
Long-term Purchase Commitment [Line Items]
Number of vessels									3				4	1	2																		6
Estimated purchase price					$ 1,800,000,000																							$ 49,000,000	$ 98,000,000
Payment made towards commitments for construction of certain carriers and tankers					686,000,000
Capitalized interest and other miscellaneous construction costs					26,000,000
Remaining payments required to be made under new building contract in 2013					379,700,000																						53,900,000
Remaining payments required to be made under new building contract in 2014					361,800,000
Remaining payments required to be made under new building contract in 2015					57,900,000
Remaining payments required to be made under new building contract in 2016					270,200,000
Percentage of ownership in joint venture arrangement												50.00%													50.00%	50.00%
Portion in future payments to be made by joint venture towards commitment																										68,600,000
Due from joint venture																							9,800,000
Number of Quarterly installments loans payable																										32
Quarterly installments amount																										1,400,000
Balloon payment on maturity of loan	442,600,000																									22,600,000
Investment by partner on equity																							3,200,000
Loan amount drawn																										19,600,000
Percentage of debt secured guaranteed																										50.00%
Charter period	five years
Purchase price of acquisition							140,000,000	150,000,000								55,000,000															140,000,000	150,000,000
Payments made for the acquisition																														129,600,000
Remaining payments required																															10,000,000	20,000,000
Prepayments for acquisition				92,400,000
Agreement to sell business																						540,000,000
Period of charter contract																10 years
Cost of acquisition																4,400,000
Percentage of ownership																49.90%
Claim sought for damages											12,000,000						38,300,000	213,000,000
Liability recognized in legal proceedings																	13,900,000	76,000,000		13,900,000	76,000,000
Term of capital leases										30 years
Estimated shares of lease rental increase claim																																		29,000,000	10,000,000
Share of potential exposure										70.00%
Recovery from deductible insurance coverage						750,000
Maximum recovery of capital lease	90,000,000
Value of shuttle tanker contributed by unrelated party in exchange of equity interest in subsidiary		$ 35,000,000																	$ 35,000,000
Percentage of Joint venture interests			49.00%														29.40%	29.40%	67.00%	33.00%	33.00%		25.10%	26.00%
Additional interest acquired by subsidiary																			33.00%
Percentage of noncontrolling interest owner's interest		33.00%																	33.00%

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Segment Reporting - Revenues and Percentage of Consolidated Revenues (Parenthetical) (Detail) (Maximum [Member])	12 Months Ended
	Dec. 31, 2012
Maximum [Member]
Segment Reporting Information [Line Items]
Percentage of revenue for BP PLC	10.00%

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Derivative Instruments and Hedging Activities - Commitment of Foreign Currency Forward Contracts (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2012
Derivative [Line Items]
Fair Value / Carrying Amount of Asset (Liability) Hedge Derivatives	$ 0.5
Fair Value / Carrying Amount of Asset (Liability) Non-hedge Derivatives	2.4
Expected Maturity Amount of Foreign Currency Derivatives in Current Year	73.7
NOK [Member]
Derivative [Line Items]
Contract Amount in Foreign Currency	201.0
Average Forward Rate	5.93
Fair Value / Carrying Amount of Asset (Liability) Non-hedge Derivatives	2.1
Expected Maturity Amount of Foreign Currency Derivatives in Current Year	33.9
Euro [Member]
Derivative [Line Items]
Contract Amount in Foreign Currency	9.8
Average Forward Rate	0.76
Fair Value / Carrying Amount of Asset (Liability) Non-hedge Derivatives	(0.1)
Expected Maturity Amount of Foreign Currency Derivatives in Current Year	13.0
Canadian Dollar [Member]
Derivative [Line Items]
Contract Amount in Foreign Currency	9.3
Average Forward Rate	1.01
Fair Value / Carrying Amount of Asset (Liability) Hedge Derivatives	0.2
Expected Maturity Amount of Foreign Currency Derivatives in Current Year	9.2
British Pounds [Member]
Derivative [Line Items]
Contract Amount in Foreign Currency	11.3
Average Forward Rate	0.64
Fair Value / Carrying Amount of Asset (Liability) Hedge Derivatives	0.3
Fair Value / Carrying Amount of Asset (Liability) Non-hedge Derivatives	0.4
Expected Maturity Amount of Foreign Currency Derivatives in Current Year	$ 17.6

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Change in Accounting Estimate - Additional Information (Detail) (USD $) In Millions, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2012
Change in Accounting Estimate [Line Items]
Increase in depreciation and amortization expenses	$ 14.9
Decrease in net income attributable to partners	$ 4.4
Decrease in net income attributable to partners, per share amount	$ 0.06
Older shuttle tankers [Member]
Change in Accounting Estimate [Line Items]
Number of shuttle tankers impacted by reduced useful lives	6
Original useful life [Member] | Older shuttle tankers [Member]
Change in Accounting Estimate [Line Items]
Estimated useful life	25 years
Reduced useful life [Member] | Older shuttle tankers [Member]
Change in Accounting Estimate [Line Items]
Estimated useful life	20 years

XML

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2012

Basis of presentation

Basis of presentation

The consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (or GAAP). They include the accounts of Teekay Corporation (or Teekay), which is incorporated under the laws of The Republic of the Marshall Islands, and its wholly-owned or controlled subsidiaries (collectively, the Company). Significant intercompany balances and transactions have been eliminated upon consolidation.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates. Given the current credit markets, it is possible that the amounts recorded as derivative assets and liabilities could vary by material amounts.

Certain of the comparative figures have been reclassified to conform with the presentation adopted in the current period relating to the reclassification of prepaid expenses of $10.1 million less accounts payable of $4.0 million as at December 31, 2011 into accounts receivable in the consolidated balance sheets.

Reporting currency

Reporting currency

The consolidated financial statements are stated in U.S. Dollars. The functional currency of the Company is the U.S. Dollar because the Company operates in the international shipping market, which typically utilizes the U.S. Dollar as the functional currency. Transactions involving other currencies during the year are converted into U.S. Dollars using the exchange rates in effect at the time of the transactions. At the balance sheet date, monetary assets and liabilities that are denominated in currencies other than the U.S. Dollar are translated to reflect the year-end exchange rates. Resulting gains or losses are reflected separately in the accompanying consolidated statements of loss.

Operating revenues

Operating revenues and expenses

The Company recognizes revenues from time-charters and bareboat charters daily over the term of the charter as the applicable vessel operates under the charter. The Company does not recognize revenue during days that the vessel is off hire. When the time-charter contains a profit-sharing agreement, the Company recognizes the profit-sharing or contingent revenue only after meeting the profit sharing or other contingent threshold. All revenues from voyage charters are recognized on a percentage of completion method. The Company uses a discharge-to-discharge basis in determining percentage of completion for all spot voyages and voyages servicing contracts of affreightment, whereby it recognizes revenue ratably from when product is discharged (unloaded) at the end of one voyage to when it is discharged after the next voyage. The Company does not begin recognizing revenue until a charter has been agreed to by the customer and the Company, even if the vessel has discharged its cargo and is sailing to the anticipated load port on its next voyage. Shuttle tanker voyages servicing contracts of affreightment with offshore oil fields commence with tendering of notice of readiness at a field, within the agreed lifting range, and ends with tendering of notice of readiness at a field for the next lifting. Revenues from floating production, storage and offloading (or FPSO) contracts are recognized as service is performed. Certain of the Company’s FPSO units receive incentive-based revenue, which is recognized when earned by fulfillment of the applicable performance criteria. Revenues and expenses relating to engineering studies are recognized when service is completed, unless the expenses are not recoverable in which case the expenses are recognized as incurred. The consolidated balance sheets reflect the deferred portion of revenues and expenses, which will be earned in subsequent periods.

Revenues and voyage expenses of the Company’s vessels operating in pool arrangements with unrelated parties are pooled with the revenues and voyage expenses of other pool participants. The resulting net pool revenues, calculated on the time-charter-equivalent basis, are allocated to the pool participants according to an agreed formula. The Company accounts for the net allocation from the pool as revenues and amounts due from the pool are included in accounts receivable.

Voyage expenses are all expenses unique to a particular voyage, including bunker fuel expenses, port fees, cargo loading and unloading expenses, canal tolls, agency fees and commissions. Vessel operating expenses include crewing, repairs and maintenance, insurance, stores, lube oils and communication expenses. Voyage expenses and vessel operating expenses are recognized when incurred.

Operating expenses

Voyage expenses are all expenses unique to a particular voyage, including bunker fuel expenses, port fees, cargo loading and unloading expenses, canal tolls, agency fees and commissions. Vessel operating expenses include crewing, repairs and maintenance, insurance, stores, lube oils and communication expenses. Voyage expenses and vessel operating expenses are recognized when incurred.

Cash and cash equivalents

Cash and cash equivalents

The Company classifies all highly liquid investments with a maturity date of three months or less at inception as cash equivalents.

Accounts receivable and allowance for doubtful accounts

Accounts receivable and allowance for doubtful accounts

Accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in existing accounts receivable. The Company determines the allowance based on historical write-off experience and customer economic data. The Company reviews the allowance for doubtful accounts regularly and past due balances are reviewed for collectability. Account balances are charged off against the allowance when the Company believes that the receivable will not be recovered. There were no significant amounts recorded as allowance for doubtful accounts as at December 31, 2012, 2011, and 2010.

Marketable securities

Marketable securities

The Company’s investments in marketable securities are classified as available-for-sale securities and are carried at fair value. Net unrealized gains and losses on available-for-sale securities are reported as a component of accumulated other comprehensive loss. Realized gains and losses on available-for-sale securities are computed based upon the historical cost of these securities applied using the weighted-average historical cost method.

The Company analyzes its available-for-sale securities for impairment during each reporting period to evaluate whether an event or change in circumstances has occurred in that period that may have a significant adverse effect on the fair value of the investment. The Company records an impairment charge through current-period earnings and adjusts the cost basis for such other-than-temporary declines in fair value when the fair value is not anticipated to recover above cost within a three-month period after the measurement date, unless there are mitigating factors that indicate an impairment charge through earnings may not be required. If an impairment charge is recorded, subsequent recoveries in fair value are not reflected in earnings until sale of the security.

Vessels and equipment

Vessels and equipment

All pre-delivery costs incurred during the construction of newbuildings, including interest, supervision and technical costs, are capitalized. The acquisition cost and all costs incurred to restore used vessels purchased by the Company to the standard required to properly service the Company’s customers are capitalized.

Depreciation is calculated on a straight-line basis over a vessel’s estimated useful life, less an estimated residual value. Depreciation is calculated using an estimated useful life of 25 years for tankers carrying crude oil and refined product, 20 to 30 years for FPSO units, 35 years for liquefied natural gas (or LNG) and 30 years for liquefied petroleum gas (or LPG) carriers, commencing the date the vessel is delivered from the shipyard, or a shorter period if regulations prevent the Company from operating the vessels for those periods of time. Floating storage and off take (or FSO) units are depreciated over the term of the contract. Depreciation includes depreciation on all owned vessels and amortization of vessels accounted for as capital leases. Depreciation of vessels and equipment, excluding amortization of dry docking expenditures, for the years ended December 31, 2012, 2011, and 2010 aggregated $364.3 million, $356.0 million and $355.5 million, respectively. Amortization of vessels accounted for as capital leases was $30.1 million, $34.7 million and $33.5 million for the years ended December 31, 2012, 2011, and 2010, respectively.

Vessel capital modifications include the addition of new equipment or can encompass various modifications to the vessel that are aimed at improving or increasing the operational efficiency and functionality of the asset. This type of expenditure is amortized over the estimated useful life of the modification. Expenditures covering recurring routine repairs and maintenance are expensed as incurred.

Interest costs capitalized to vessels and equipment for the years ended December 31, 2012, 2011, and 2010, aggregated $34.9 million, $8.1 million and $14.0 million, respectively.

Generally, the Company dry docks each tanker and gas carrier every two and a half to five years. The Company capitalizes a substantial portion of the costs incurred during dry docking and amortizes those costs on a straight-line basis over their estimated useful life, which typically is from the completion of a dry docking or intermediate survey to the estimated completion of the next dry docking. The Company includes in capitalized dry docking those costs incurred as part of the dry dock to meet classification and regulatory requirements. The Company expenses costs related to routine repairs and maintenance performed during dry docking, and for annual class survey costs on the Company’s FPSO units.

Dry docking activity for the three years ended December 31, 2012, 2011, and 2010, is summarized as follows:

	Year Ended December 31,
	2012 $			2011 $			2010 $
Balance at the beginning of the year		128,987			143,103			172,053
Costs incurred for drydocking		35,336			54,296			57,156
Dry-dock amortization		(57,082	)		(67,180	)		(86,106	)
Write down / sale of vessels		(6,313	)		(1,232	)		—
Balance at the end of the year		100,928			128,987			143,103

Vessels and equipment that are “held and used” are assessed for impairment when events or circumstances indicate the carrying amount of the asset may not be recoverable. If the asset’s net carrying value exceeds the net undiscounted cash flows expected to be generated over its remaining useful life, the carrying amount of the asset is reduced to its estimated fair value. The estimated fair value for the Company’s impaired vessels is determined using discounted cash flows or appraised values. In cases where an active second hand sale and purchase market does not exist, the Company uses a discounted cash flow approach to estimate the fair value of an impaired vessel. In cases where an active second hand sale and purchase market exists an appraised value is used to estimate the fair value of an impaired vessel. An appraised value is generally the amount the Company would expect to receive if it were to sell the vessel. Such appraisal is normally completed by the Company and based on second-hand sale and purchase data.

Gains on vessels sold and leased back under capital leases are deferred and amortized over the remaining term of the capital lease. Losses on vessels sold and leased back under capital leases are recognized immediately when the fair value of the vessel at the time of sale and lease-back is less than its book value. In such case, the Company would recognize a loss in the amount by which book value exceeds fair value.

Direct financing leases and other loan receivables

Direct financing leases and other loan receivables

The Company (i) employs two vessels on long-term time charters and employs an FSO unit, and (ii) assembles, installs, operates and leases equipment that reduces volatile organic compound emissions (or VOC Equipment) during loading, transportation and storage of oil and oil products, all of which are accounted for as direct financing leases. The lease payments received by the Company under these lease arrangements are allocated between the net investments in the leases and revenues or other income using the effective interest method so as to produce a constant periodic rate of return over the lease terms.

The Company’s investments in loan receivables are recorded at cost. The premium paid over the outstanding principal amount, if any, is amortized to interest income over the term of the loan using the effective interest rate method. The Company analyzes its loans for impairment during each reporting period. A loan is impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. Factors the Company considers in determining that a loan is impaired include, among other things, an assessment of the financial condition of the debtor, payment history of the debtor, general economic conditions, the credit rating of the debtor, the value of any collateral, and any information provided by the debtor regarding its ability to repay the loan. When a loan is impaired, the Company measures the amount of the impairment based on the present value of expected future cash flows discounted at the loan’s effective interest rate and recognizes the resulting impairment in the consolidated statement of loss.

The following table contains a summary of the Company’s financing receivables by type of borrower, the method by which the Company monitors the credit quality of its financing receivables on a quarterly basis, and the grade as of December 31, 2012.

					December 31,
Class of Financing Receivable	Credit Quality Indicator	Grade			2012 $		2011 $
Direct financing leases	Payment activity		Performing			436,601		459,908
Other loan receivables
Investment in term loans and interest receivable (current)	Collateral		Performing(2)			119,385		—
Investment in term loans and interest receivable (non-current)	Collateral		(3	)		69,371		188,616
Loans to equity accounted investees and joint venture partners (1)	Other internal metrics		Performing			206,903		85,248
Long term receivable included in other assets	Payment activity		Performing			1,704		786
						833,964		734,558

(1) The Company’s subsidiary Teekay LNG Partners L.P. (or Teekay LNG) owns a 99% interest in Teekay Tangguh Borrower LLC (or Teekay Tangguh), which owns a 70% interest in Teekay BLT Corporation (or Teekay Tangguh Subsidiary). During the year ended December 31, 2012, one of Teekay LNG’s joint venture partner’s parent company, PT Berlian Laju Tanker (or BLT), suspended trading on the Jakarta Stock Exchange and entered into a court-supervised restructuring under the Suspension of Payment process in Indonesia, in order to restructure its debts. The Company believes the loans to BLT and Teekay LNG’s joint venture partner, BLT LNG Tangguh Corporation, totaling $24.0 million as at December 31, 2012 (2011—$19.1 million) are collectible given the expected cash flows anticipated to be generated by the Teekay Tangguh Subsidiary that can be used to repay the loan and given the underlying collateral securing the loans to BLT.

(2) Subsequent to December 31, 2012, the borrower did not pay in full the January 31, 2013 interest payment. It is expected that the Company will recover all amounts due under the loan agreements will be dependent upon cash flow generated by the borrower, financial support from the borrower’s ultimate parent company and the Company realizing the value of the primary collateral, two 2010-built very large crude carriers.

(3) As of December 31, 2012, the estimated fair value of the asset that has been pledged as collateral for the loan is greater than 95% of the principal amount of the loan and unpaid interest. Subsequent to the end of the year, the borrower did not pay in full the January 31, 2013 interest payment. Based on a review of the borrower’s financial condition, it is expected that a full recovery of all amounts due under the loan agreement will be dependent upon cash flow generated by the borrower, financial support from the borrower’s ultimate parent company and the Company realizing the value of the primary collateral, a 2011-built very large crude carrier.

Joint ventures

Joint ventures

The Company’s investments in joint ventures are accounted for using the equity method of accounting. Under the equity method of accounting, investments are stated at initial cost and are adjusted for subsequent additional investments and the Company’s proportionate share of earnings or losses and distributions. The Company evaluates its investments in joint ventures for impairment when events or circumstances indicate that the carrying value of such investments may have experienced an other than temporary decline in value below their carrying value. If the estimated fair value is less than the carrying value and is considered an other than temporary decline, the carrying value is written down to its estimated fair value and the resulting impairment is recorded in the consolidated statement of loss.

Debt issuance costs

Debt issuance costs

Debt issuance costs, including fees, commissions and legal expenses, are deferred and presented as other non-current assets. Debt issuance costs of revolving credit facilities are amortized on a straight-line basis over the term of the relevant facility. Debt issuance costs of term loans are amortized using the effective interest rate method over the term of the relevant loan. Amortization of debt issuance costs is included in interest expense.

Derivative instruments

Derivative instruments

All derivative instruments are initially recorded at fair value as either assets or liabilities in the accompanying consolidated balance sheets and subsequently remeasured to fair value, regardless of the purpose or intent for holding the derivative. The method of recognizing the resulting gain or loss is dependent on whether the derivative contract is designed to hedge a specific risk and whether the contract qualifies for hedge accounting. The Company does not apply hedge accounting to its derivative instruments, except for certain foreign exchange currency contracts and certain types of interest rate swaps that it may enter into in the future (See Note 15).

When a derivative is designated as a cash flow hedge, the Company formally documents the relationship between the derivative and the hedged item. This documentation includes the strategy and risk management objective for undertaking the hedge and the method that will be used to assess the effectiveness of the hedge. Any hedge ineffectiveness is recognized immediately in earnings, as are any gains and losses on the derivative that are excluded from the assessment of hedge effectiveness. The Company does not apply hedge accounting if it is determined that the hedge was not effective or will no longer be effective, the derivative was sold or exercised, or the hedged item was sold, or repaid.

For derivative financial instruments designated and qualifying as cash flow hedges, changes in the fair value of the effective portion of the derivative financial instruments are initially recorded as a component of accumulated other comprehensive loss in total equity. In the periods when the hedged items affect earnings, the associated fair value changes on the hedging derivatives are transferred from total equity to the corresponding earnings line item in the consolidated statements of loss. The ineffective portion of the change in fair value of the derivative financial instruments is immediately recognized in earnings in the consolidated statements of loss. If a cash flow hedge is terminated and the originally hedged item is still considered possible of occurring, the gains and losses initially recognized in total equity remain there until the hedged item impacts earnings, at which point they are transferred to the corresponding earnings line item (e.g. general and administrative expense) item in the consolidated statements of loss. If the hedged items are no longer possible of occurring, amounts recognized in total equity are immediately transferred to the earnings item in the consolidated statements of loss.

For derivative financial instruments that are not designated or that do not qualify as hedges under Financial Accounting Standards Board (or FASB) Accounting Standards Codification (or ASC) 815, Derivatives and Hedging, the changes in the fair value of the derivative financial instruments are recognized in earnings. Gains and losses from the Company’s non-designated interest rate swaps related to long-term debt, capital lease obligations, restricted cash deposits, non-designated bunker fuel swap contracts and forward freight agreements, and non-designated foreign exchange currency forward contracts are recorded in realized and unrealized gain (loss) on non-designated derivative instruments. Gains and losses from the Company’s hedge accounted foreign currency forward contracts are recorded primarily in vessel operating expenses and general and administrative expense. Gains and losses from the Company’s non-designated cross currency swap are recorded in foreign currency exchange (loss) gain in the consolidated statements of loss.

Goodwill and intangible assets

Goodwill and intangible assets

Goodwill is not amortized, but reviewed for impairment at the reporting unit level on an annual basis or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. When goodwill is reviewed for impairment, the Company may elect to assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. Alternatively, the Company may bypass this step and use a fair value approach to identify potential goodwill impairment and, when necessary, measure the amount of impairment. The Company uses a discounted cash flow model to determine the fair value of reporting units, unless there is a readily determinable fair market value. Intangible assets are assessed for impairment when and if impairment indicators exist. An impairment loss is recognized if the carrying amount of an intangible asset is not recoverable and its carrying amount exceeds its fair value.

The Company’s intangible assets consist primarily of acquired time-charter contracts and contracts of affreightment. The value ascribed to the time-charter contracts and contracts of affreightment are being amortized over the life of the associated contract, with the amount amortized each year being weighted based on the projected revenue to be earned under the contracts.

Asset retirement obligation

Asset retirement obligation

The Company has an asset retirement obligation (or ARO) relating to the sub-sea production facility associated with the Petrojarl Banff FPSO unit operating in the North Sea. This obligation generally involves restoration of the environment surrounding the facility and removal and disposal of all production equipment. This obligation is expected to be settled at the end of the contract under which the FPSO unit currently operates, which is anticipated no later than 2018. The ARO will be covered in part by contractual payments from FPSO contract counterparties.

The Company records the fair value of an ARO as a liability in the period when the obligation arises. The fair value of the ARO is measured using expected future cash outflows discounted at the Company’s credit-adjusted risk-free interest rate. When the liability is recorded, the Company capitalizes the cost by increasing the carrying amount of the related equipment. Each period, the liability is increased for the change in its present value, and the capitalized cost is depreciated over the useful life of the related asset. Changes in the amount or timing of the estimated ARO are recorded as an adjustment to the related asset and liability. As at December 31, 2012, the ARO and associated receivable which is recorded in other non-current assets from third parties were $24.7 million and $6.4 million, respectively (2011—$21.2 million and $6.1 million, respectively).

Stockholders' equity

Repurchase of common stock

The Company accounts for repurchases of common stock by decreasing common stock by the par value of the stock repurchased. In addition, the excess of the repurchase price over the par value is allocated between additional paid in capital and retained earnings. The amount allocated to additional paid in capital is the pro-rata share of the capital paid in and the balance is allocated to retained earnings.

Issuance of shares or units by subsidiaries

The Company accounts for dilution gains or losses from the issuance of shares or units by its publicly listed subsidiaries as an adjustment to retained earnings.

Accumulated other comprehensive (loss) income

The following table contains the changes in the balances of each component of accumulated other comprehensive income (loss) for the periods presented.

	Qualifying Cash Flow Hedging Instruments $			Pension Adjustments $			Unrealized Gain (Loss) on Available for Sale Marketable Securities $			Foreign Exchange Loss on Currency Translation $		Total $
Balance as of December 31, 2009		2,923			(10,294	)		5,837			—		(1,534	)
Other comprehensive (loss) income		(628	)		(7,245	)		1,236			—		(6,637	)
Balance as of December 31, 2010		2,295			(17,539	)		7,073			—		(8,171	)
Other comprehensive loss		(2,601	)		(5,402	)		(7,729	)		—		(15,732	)
Balance as of December 31, 2011		(306	)		(22,941	)		(656	)		—		(23,903	)
Other comprehensive income		647			6,688			656			1,144		9,135
Balance as of December 31, 2012		341			(16,253	)		—			1,144		(14,768	)

Share-based compensation

Share-based compensation

The Company grants stock options, restricted stock units, performance share units and restricted stock awards as incentive-based compensation to certain employees and directors. The Company measures the cost of such awards using the grant date fair value of the award and recognizes that cost, net of estimated forfeitures, over the requisite service period, which generally equals the vesting period. For stock-based compensation awards subject to graded vesting, the Company calculates the value for the award as if it was one single award with one expected life and amortizes the calculated expense for the entire award on a straight-line basis over the vesting period of the award.

Compensation cost for awards with performance conditions is recognized when it is probable that the performance condition will be achieved. The compensation cost of the Company’s stock-based compensation awards are substantially reflected in general and administrative expense.

In 2005, the Company adopted the Vision Incentive Plan (or the VIP) to reward exceptional corporate performance and shareholder returns. This plan was designed to result in an award pool for senior management based on the following two measures: (a) economic profit from 2005 to 2010; and (b) market value added from 2001 to 2010. In March 2008, an interim distribution was made to certain participants with a value of $13.3 million, paid in restricted stock units, with vesting of the interim distribution in three equal amounts on November 2008, November 2009 and November 2010. In September 2009, 187,400 restricted stock units, with two-year bullet vesting, were granted as the June 2009 New Participants Reserve Pool allocation under the VIP. The Plan terminated on December 31, 2010 and no final award was granted to participants. During the year ended December 31, 2012, the Company recorded an expense from the VIP of $nil ($1.3 million – 2011 and $2.4 million – 2010), which is included in general and administrative expense. As at December 31, 2012 and 2011, there was no VIP liability.

Income taxes

Income taxes

The Company accounts for income taxes using the liability method. Under the liability method, deferred tax assets and liabilities are recognized for the anticipated future tax effects of temporary differences between the financial statement basis and the tax basis of the Company’s assets and liabilities using the applicable jurisdictional tax rates. A valuation allowance for deferred tax assets is recorded when it is more likely than not that some or all of the benefit from the deferred tax asset will not be realized.

Recognition of uncertain tax positions is dependent upon whether it is more-likely-than-not that a tax position taken or expected to be taken in a tax return will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. If a tax position meets the more-likely-than-not recognition threshold, it is measured to determine the amount of benefit to recognize in the financial statements. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense.

The Company believes that it and its subsidiaries are not subject to taxation under the laws of the Republic of The Marshall Islands or Bermuda, or that distributions by its subsidiaries to the Company will be subject to any taxes under the laws of such countries, and that it qualifies for the Section 883 exemption under U.S. federal income tax purposes.

Employee pension plans

Employee pension plans

The Company has defined contribution pension plans covering the majority of its employees. Pension costs associated with the Company’s required contributions under its defined contribution pension plans are based on a percentage of employees’ salaries and are charged to earnings in the year incurred. The Company also has defined benefit pension plans covering certain of its employees. The Company accrues the costs and related obligations associated with its defined benefit pension plans based on actuarial computations using the projected benefits obligation method and management’s best estimates of expected plan investment performance, salary escalation, and other relevant factors. For the purpose of calculating the expected return on plan assets, those assets are valued at fair value. The overfunded or underfunded status of the defined benefit pension plans are recognized as assets or liabilities in the consolidated balance sheet. The Company recognizes as a component of other comprehensive loss, the gains or losses that arise during a period but that are not recognized as part of net periodic benefit costs.

Earnings (loss) per common share

Earnings (loss) per common share

The computation of basic earnings (loss) per share is based on the weighted average number of common shares outstanding during the period. The computation of diluted earnings per share assumes the exercise of all dilutive stock options and restricted stock awards using the treasury stock method. The computation of diluted loss per share does not assume such exercises.

Adoption of new accounting pronouncements

Adoption of new accounting pronouncements

In January 2012, the Company adopted an amendment to FASB ASC 820, Fair Value Measurement, which clarifies or changes the application of existing fair value measurements, including: that the highest and best use and valuation premise in a fair value measurement are relevant only when measuring the fair value of nonfinancial assets; that a reporting entity should measure the fair value of its own equity instrument from the perspective of a market participant that holds that instrument as an asset; to permit an entity to measure the fair value of certain financial instruments on a net basis rather than based on its gross exposure when the reporting entity manages its financial instruments on the basis of such net exposure; that in the absence of a Level 1 input, a reporting entity should apply premiums and discounts when market participants would do so when pricing the asset or liability consistent with the unit of account; and that premiums and discounts related to size as a characteristic of the reporting entity’s holding are not permitted in a fair value measurement. The adoption of this standard did not have an impact on the Company’s consolidated financial statements other than the disclosures as presented in note 3 – Financial Instruments.

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Pension Benefits (Tables)

12 Months Ended

Dec. 31, 2012

Changes in Benefit Obligation and Fair Value of Benefit Plans Assets

The following table provides information about changes in the benefit obligation and the fair value of the Benefit Plans assets, a statement of the funded status, and amounts recognized on the Company’s balance sheets:

	Year Ended December 31, 2012 $			Year Ended December 31, 2011 $
Change in benefit obligation:
Beginning balance		137,172			120,723
Service cost		10,004			8,829
Interest cost		4,436			5,167
Contributions by plan participants		692			739
Actuarial (gain) loss		(12,059	)		9,408
Benefits paid		(3,216	)		(4,395	)
Plan amendments		6,549			—
Foreign currency exchange rate changes and other		4,912			(3,299	)
Ending balance		148,490			137,172
Change in fair value of plan assets:
Beginning balance		110,698			102,085
Actual return on plan assets		2,094			2,931
Contributions by the employer		13,404			12,061
Contributions by plan participants		692			739
Benefits paid		(3,166	)		(4,339	)
Plan amendments		4,328			—
Foreign currency exchange rate changes		6,848			(2,357	)
Other		(490	)		(422	)
Ending balance		134,408			110,698
Funded status deficiency		(14,082	)		(26,474	)
Amounts recognized in the balance sheets:
Other long-term liabilities		14,082			26,474
Accumulated other comprehensive loss:
Net actuarial losses		(19,449	)		(19,929	)

(1) As at December 31, 2012, the estimated amount that will be amortized from accumulated other comprehensive (loss) income into net periodic benefit cost in 2013 is $(1.2) million.

Pension Plans with Benefit Obligations and Accumulated Benefit Obligations in Excess of Plan Assets

The following table provides information for those pension plans with a benefit obligation in excess of plan assets and those pension plans with an accumulated benefit obligation in excess of plan assets:

	December 31, 2012 $		December 31, 2011 $
Benefit obligation		125,945		113,460
Fair value of plan assets		106,616		85,432
Accumulated benefit obligation		4,350		35,358
Fair value of plan assets		2,795		31,815

Components of Net Periodic Pension Cost Relating to Benefit Plans

The components of net periodic pension cost relating to the Benefit Plans for the years ended December 31, 2012, 2011 and 2010 consisted of the following:

	Year Ended December 31, 2012 $			Year Ended December 31, 2011 $			Year Ended December 31, 2010 $
Net periodic pension cost:
Service cost		9,921			8,978			8,616
Interest cost		4,392			5,250			5,091
Expected return on plan assets		(5,270	)		(5,805	)		(5,431	)
Amortization of net actuarial loss		1,980			371			281
Other		577			421			(3,390	)
Net cost		11,600			9,215			5,167

Components of Other Comprehensive Loss Relating to Plans

The components of other comprehensive loss relating to the Plans for the years ended December 31, 2012, 2011 and 2010 consisted of the following:

	Year Ended December 31, 2012 $		Year Ended December 31, 2011 $			Year Ended December 31, 2010 $
Other comprehensive income (loss):
Net gain (loss) arising during the period		6,143		(12,052	)		(5,711	)
Amortization of net actuarial loss (gain)		1,979		319			(1,026	)
Other loss		—		—			(390	)
Total income (loss)		8,122		(11,733	)		(7,127	)

Estimated Future Benefit Payments which Reflect Expected Future Service to be Paid by Benefit Plans

The following table provides the estimated future benefit payments, which reflect expected future service, to be paid by the Benefit Plans:

Year	Pension Benefit Payments $
2013		9,264
2014		7,858
2015		6,612
2016		8,491
2017		8,531
2018 – 2022		39,868
Total		80,624

Fair Value of Plan Assets

The fair value of the plan assets, by category, as of December 31, 2012 and 2011 were as follows:

	December 31, 2012		December 31, 2011
Pooled Funds (1)		94,981		82,501
Mutual Funds (2)
Equity investments		19,907		13,852
Debt securities		4,298		3,445
Real estate		3,843		2,092
Cash and money market		672		291
Other		10,707		8,517
Total		134,408		110,698

(1) The Company has no control over the investment mix or strategy of the pooled funds. The pooled funds guarantee a minimum rate of return. If actual investment returns are less than the guarantee minimum rate, then the provider’s statutory reserves are used to top up the shortfall. The pooled funds primarily invest in hold to maturity bonds, real estate and other fixed income investments, which are expected to provide a stable rate of return.

(2) The mutual funds primary aim is to provide investors with an exposure to a diversified mix of predominantly growth oriented assets (70%) with moderate to high volatility and some defensive assets (30%).

Schedule of Assumptions Used

The weighted average assumptions used to determine benefit obligations at December 31, 2012 and 2011 were as follows:

	December 31, 2012			December 31, 2011
Discount rates		3.0	%		3.2	%
Rate of compensation increase		5.5	%		4.4	%

The weighted average assumptions used to determine net pension expense for the years ended December 31, 2012, 2011 and 2010 were as follows:

	Year Ended December 31, 2012 $			Year Ended December 31, 2011 $			Year Ended December 31, 2010 $
Discount rates		3.0	%		3.2	%		4.4	%
Rate of compensation increase		5.5	%		4.4	%		4.6	%
Expected long-term rates of return (1)		4.8	%		5.0	%		5.7	%

(1) To the extent the expected return on plan assets varies from the actual return, an actuarial gain or loss results. The expected long-term rates of return on plan assets are based on the estimated weighted-average long-term returns of major asset classes. In determining asset class returns, the Company takes into account long-term returns of major asset classes, historical performance of plan assets, as well as the current interest rate environment. The asset class returns are weighted based on the target asset allocations.

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Related Party Transactions

12 Months Ended

Dec. 31, 2012

Related Party Transactions

13. Related Party Transactions

As at December 31, 2012, Resolute Investments, Ltd. (or Resolute) owned 44.9% (2011 – 45.5%, 2010 – 42.3%) of the Company’s outstanding Common Stock. One of the Company’s directors, Thomas Kuo-Yuen Hsu, is the President and a director of Resolute. Another of the Company’s directors, Axel Karlshoej, is among the directors of Path Spirit Limited, which is the trust protector for the trust that indirectly owns all of Resolute’s outstanding equity. The Company’s Chairman, C. Sean Day, is engaged as a consultant to Kattegat Limited, the parent company of Resolute, to oversee its investments, including that in the Teekay group of companies.

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Pension Benefits - Additional Information (Detail) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Defined Benefit Plan Disclosure [Line Items]
Cost recognized for defined contribution pension plans	$ 14,500,000	$ 18,300,000	$ 17,100,000
Accumulated benefit obligation	115,000,000	100,400,000
Estimations of contributions into benefit plan during 2013	10,500,000
Norwegian plans [Member]
Defined Benefit Plan Disclosure [Line Items]
Percentage of ownership of defined benefit pension assets	71.00%
Income from change in retirement plan obligation			$ 3,700,000
Australia plans [Member]
Defined Benefit Plan Disclosure [Line Items]
Percentage of ownership of defined benefit pension assets	28.00%

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Vessel Sales and Write-downs

12 Months Ended

Dec. 31, 2012

Vessel Sales and Write-downs

18. Vessel Sales and Write-downs

a) Vessel Sales

During 2012, the Company sold two shuttle tankers and three conventional tankers, resulting in a loss on sale of $1.1 million (shuttle tanker segment) and $5.9 million (conventional tanker segment). In addition, the Company sold its joint venture interest in the Ikdam FPSO unit and realized a gain of $10.8 million, which has been recorded in equity income (loss) on the Company’s consolidated statements of loss for the year ended December 31, 2012. During 2011, the Company sold one FSO unit and one conventional tanker, resulting in a loss on sale of $0.2 million (shuttle tanker and FSO segment). During 2010, the Company sold one LPG carrier and four conventional tankers, resulting in a gain on sale of $4.3 million (liquefied gas segment) and a loss on sale of $2.3 million (conventional tanker segment). All of the vessels disposed of were older vessels that the Company disposed of in the ordinary course of business.

b) Write-downs of Vessels, Equipment and Equity Accounted Investments

In 2012, 19 conventional tankers were written down to their estimated fair value using an appraised value, resulting in a total write down of $405.3 million within the conventional tanker segment. The appraised values were determined based on second-hand sale and purchase market data. This write down includes ten Suezmax tankers ($335.0 million), seven Aframax tankers ($66.0 million), and two other conventional tankers ($4.3 million). When comparing seven of the ten Suezmax tankers to each other and when comparing four of the seven Aframax tankers to each other, the vessels have a similar age, had a similar carrying value before the impairment and a similar estimated fair value, and are all being employed in the spot market or on short term time-charters. The total write down of $405.3 million includes $350.2 million from these eleven vessels. The primary factors that caused the write downs were a negative change in the outlook for the crude tanker market, a delay in the expected timing of a recovery of the crude tanker market as well as the expected discrimination impact from more fuel efficient vessels being constructed. One of the seven Aframax tankers was held for sale at December 31, 2012 and was subsequently sold in January 2013.

In 2012, four older shuttle tankers and one FSO unit were written down to their estimated fair value, resulting in a total write down of $28.8 million within the shuttle tanker and FSO segment. The write downs were the result of the Company entering into agreements in the fourth quarter of 2012 to sell two shuttle tankers and a change in the operating plans for the remaining vessels. Excluding one shuttle tanker, the estimated fair value for all five vessels was determined using an appraised value, based on second hand sale and purchase market data. The estimated fair value for the remaining vessel was determined using a discounted cash flow approach. Such a technique used estimates of future operating life (2.2 years based on the estimated remaining trading life of this vessel), future revenues ($37.2 million based on field production forecasts and the availability of contracts of affreightment suitable for the vessel), operating and dry-dock expenditures ($20.5 million), a residual value ($6.5 million based on the vessel’s light weight tonnage and the price of steel), and a discount rate (7.9%) that approximates the weighted average cost of capital of a market participant.

In 2011, eight older conventional tankers were written down to their estimated fair value using an appraised value, resulting in a total write down of $112.1 million within the conventional tanker segment. The write downs were the result of a change in the operating plans for certain vessels, escalating dry dock costs, a general decline in the future outlook for shipping and the global economy combined with delayed optimism on when economic recovery may occur.

In 2011, three older shuttle tankers and one FSO unit were written down to their estimated fair value using an appraised value, resulting in a total write down of $43.2 million within the shuttle tanker and FSO segment. The write downs were the result of the age of the vessels, the requirements of operating in the North Sea and Brazil, a change in the operating plans for certain vessels, and escalating dry dock costs.

During the year ended December 31, 2011, the Company incurred a $19.4 million write-down of its investment in PTH, a 50% joint venture which provides ship-to-ship lightering services. The write-down was recorded in equity income (loss) on the Company’s consolidated statement of loss for the year ended December 31, 2011. The Company’s investment in PTH is part of the Company’s conventional tanker segment and was written down to its estimated fair value, which is based upon the estimated liquidation values of the underlying net assets of PTH. The recognition of this write-down was driven by the continuing weak tanker market.

In 2010, certain shuttle tanker equipment and one 1992-built shuttle tanker was written down to its estimated fair value using an appraised value, resulting in a total write down of $19.5 million within the shuttle tanker and FSO segment. The write downs were the result of a change in expectation for utilization of the shuttle tanker equipment on new projects and in conjunction with the termination of the charter contract for the vessel. In addition, certain intangible assets of the conventional tanker segment were written down by $31.7. See Note 6.

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Derivative Instrument and Hedging Activities - Interest Rate Swap Agreement (Detail) (USD $)	12 Months Ended
	Dec. 31, 2012
U.S. Dollar-denominated interest rate swaps 1 [Member]
Derivative [Line Items]
Interest Rate Index	LIBOR
Principal Amount	$ 412,880,000
Fair Value / Carrying Amount of Asset / (Liability)	(110,590,000)
Weighted-Average Remaining Term (Years)	24 years 1 month 6 days
Fixed Interest Rate (%)	4.90%
U.S. Dollar-denominated interest rate swaps 2 [Member]
Derivative [Line Items]
Interest Rate Index	LIBOR
Principal Amount	3,170,273,000
Fair Value / Carrying Amount of Asset / (Liability)	(515,124,000)
Weighted-Average Remaining Term (Years)	7 years 10 months 24 days
Fixed Interest Rate (%)	4.10%
U.S. Dollar-denominated interest rate swaps 3 [Member]
Derivative [Line Items]
Interest Rate Index	LIBOR
Principal Amount	98,500,000
Fair Value / Carrying Amount of Asset / (Liability)	(782,000)
Weighted-Average Remaining Term (Years)	10 months 24 days
Fixed Interest Rate (%)	1.10%
U.S. Dollar-denominated Interest Rate Swaps Four [Member]
Derivative [Line Items]
Interest Rate Index	LIBOR
Principal Amount	469,260,000
Fair Value / Carrying Amount of Asset / (Liability)	165,688,000
Weighted-Average Remaining Term (Years)	24 years 1 month 6 days
Fixed Interest Rate (%)	4.80%
Euro-denominated interest rate swaps [Member]
Derivative [Line Items]
Interest Rate Index	EURIBOR
Principal Amount	341,382,000
Fair Value / Carrying Amount of Asset / (Liability)	(41,329,000)
Weighted-Average Remaining Term (Years)	11 years 6 months
Fixed Interest Rate (%)	3.10%
Interest rate swap agreements [Member]
Derivative [Line Items]
Principal Amount	4,492,295,000
Fair Value / Carrying Amount of Asset / (Liability)	$ (502,137,000)

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Loss Per Share (Tables)

12 Months Ended

Dec. 31, 2012

Loss Per Share

	Year Ended December 31,
	2012 $			2011 $			2010 $
Net loss attributable to stockholders’ of Teekay Corporation		(160,180	)		(358,616	)		(267,287	)
Weighted average number of common shares		69,263,369			70,234,817			72,862,617
Dilutive effect of stock-based compensation		—			—			—
Common stock and common stock equivalents		69,263,369			70,234,817			72,862,617
Loss per common share:
—Basic		(2.31	)		(5.11	)		(3.67	)
—Diluted		(2.31	)		(5.11	)		(3.67	)

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Vessel Sales and Write-downs - Additional Information (Detail) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Long Lived Assets Held-for-sale [Line Items]
Realized gain (loss) on sale of joint venture interest	$ 79,211,000	$ (35,309,000)	$ (11,257,000)
Conventional tanker segment [Member]
Long Lived Assets Held-for-sale [Line Items]
Write-down estimated fair value	405,300,000
Number of vessels written down	19
Suezmax Tankers [Member] | Conventional tanker segment [Member]
Long Lived Assets Held-for-sale [Line Items]
Write-down estimated fair value	335,000,000
Number of vessels written down	10
Aframax tanker [Member] | Conventional tanker segment [Member]
Long Lived Assets Held-for-sale [Line Items]
Write-down estimated fair value	66,000,000
Number of vessels written down	7
Number of tankers held for sale	1
Other conventional tankers [Member] | Conventional tanker segment [Member]
Long Lived Assets Held-for-sale [Line Items]
Write-down estimated fair value	4,300,000
Number of vessels written down	2
Seven Suezmax tankers and four Aframax tankers [Member] | Conventional tanker segment [Member]
Long Lived Assets Held-for-sale [Line Items]
Write-down estimated fair value	350,200,000
Shuttle tanker and FSO segment [Member]
Long Lived Assets Held-for-sale [Line Items]
Write-down estimated fair value	28,800,000	43,200,000
Future operating life (based on the estimated remaining trading life of vessel)	2 years 2 months 12 days
Future revenue (based on field production forecasts and the availability of contracts of affreightment suitable for vessel)	37,200,000
Operating and dry-dock expenditures	20,500,000
Residual value (based on vessel's light weight tonnage and price of steel)	6,500,000
Discount rate (approximate weighted average cost of capital of a market participant)	7.90%
Number of vessels whose estimated fair value was determined using an appraised value	4
Number of vessels whose estimated fair value was determined using discounted cash flow method	1
Shuttle tankers [Member]
Long Lived Assets Held-for-sale [Line Items]
Realized gain (loss) on sale of tanker	1,100,000
Number of vessels sold	2
Number of vessels written down	4	3	1
Write-down for impairment of vessels			19,500,000
Conventional tanker [Member]
Long Lived Assets Held-for-sale [Line Items]
Realized gain (loss) on sale of tanker	5,900,000		2,300,000
Number of vessels sold	3	1	4
Write-down estimated fair value		112,100,000
Number of vessels written down		8
Write-down of intangibles			31,700,000
Ikdam FPSO unit [Member]
Long Lived Assets Held-for-sale [Line Items]
Realized gain (loss) on sale of joint venture interest	10,800,000
FSO Unit [Member]
Long Lived Assets Held-for-sale [Line Items]
Realized gain (loss) on sale of tanker		200,000
Number of vessels sold		1
Number of vessels written down	1	1
LPG carrier [Member] | Liquefied Gas Segment [Member]
Long Lived Assets Held-for-sale [Line Items]
Realized gain (loss) on sale of tanker			4,300,000
Number of vessels sold			1
PTH [Member]
Long Lived Assets Held-for-sale [Line Items]
Write-down of Investments		$ 19,400,000
Percentage of Joint venture interests		50.00%

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Long-Term Debt (Tables)

12 Months Ended

Dec. 31, 2012

Summary of Long-Term Debt

Long-Term Debt

	December 31, 2012		December 31, 2011
	$		$
Revolving Credit Facilities		1,627,979		2,244,634
Senior Notes (8.5%) due January 15, 2020		447,115		446,825
Norwegian Kroner-denominated Bonds due through May 2017		467,223		100,417
U.S. Dollar-denominated Term Loans due through 2021		2,432,374		2,069,860
U.S. Dollar-denominated Term Loan Variable Interest Entity due October 2016		230,359		220,450
Euro-denominated Term Loans due through 2023		341,382		348,905
U.S. Dollar-denominated Unsecured Demand Loans due to Joint Venture Partners		13,282		13,282
Total		5,559,714		5,444,373
Less current portion		797,411		401,376
Long-term portion		4,762,303		5,042,997

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Loss Per Share - Additional Information (Detail) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Earnings Per Share [Abstract]
Anti-dilutive effect attributable to outstanding stock-based compensation	3.9	5.7	6.1

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CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Accounts receivable, non-trade	$ 83,046	$ 38,120
Accounts receivable, related party balance	9,101	3,487
Accumulated depreciation on vessels and equipment	1,976,257	2,102,856
Accumulated amortization on Vessels under capital leases	133,228	163,939
Amounts due to joint venture partners	$ 13,282	$ 13,282
Common stock, par value	$ 0.001	$ 0.001
Common stock, share authorized	725,000,000	725,000,000
Common Stock, share issued	70,203,388	74,391,691
Common Stock, share outstanding	69,704,188	68,732,341
Minimum [Member]
Range of interest	4.40%	4.40%
Maximum [Member]
Range of interest	8.00%	8.00%

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Capital Stock - Non-vested Stock Option Activity and Related Information (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Schedule Of Nonvested Stock Option Activity [Line Items]
Options Outstanding Non-Vested Stock Options-beginning of year	1,057	2,160	2,684
Options, Granted	433	96	733
Options, Vested	(747)	(1,071)	(1,084)
Options, Forfeited	(20)	(128)	(173)
Options Outstanding Non-Vested Stock Options-end of year	723	1,057	2,160
Weighted-Average Grant Date Fair Value, Outstanding non-vested stock options-beginning of Year	$ 6.40	$ 6.36	$ 6.56
Weighted-Average Grant Date Fair Value, Granted	$ 8.72	$ 11.27	$ 8.16
Weighted-Average Grant Date Fair Value, Vested	$ 5.44	$ 6.18	$ 7.48
Weighted Average Grant Date Fair Value, Forfeited	$ 8.24	$ 11.47	$ 10.06
Weighted-Average Grant Date Fair Value, outstanding non-vested stock options-end of year	$ 8.74	$ 6.40	$ 6.36

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Segment Reporting

12 Months Ended

Dec. 31, 2012

Segment Reporting

2. Segment Reporting

The Company is a leading provider of international crude oil and gas marine transportation services and also offers offshore oil production storage and offloading services, primarily under long-term fixed-rate contracts.

The Company has four reportable segments: its shuttle tanker and FSO segment (or Teekay Shuttle and Offshore), its FPSO segment (or Teekay Petrojarl), its liquefied gas segment (or Teekay Gas Services) and its conventional tanker segment (or Teekay Tanker Services). The Company’s shuttle tanker and FSO segment consists of shuttle tankers and FSO units. The Company’s FPSO segment consists of FPSO units and other vessels used to service its FPSO contracts. The Company’s liquefied gas segment consists of LNG and LPG carriers. The Company’s conventional tanker segment consists of conventional crude oil and product tankers that: (i) are subject to long-term, fixed-rate time-charter contracts, which have an original term of one year or more; (ii) operate in the spot tanker market; or (iii) are subject to time-charters or contracts of affreightment that are priced on a spot-market basis or are short-term, fixed-rate contracts, which have an original term of less than one year. Segment results are evaluated based on income from vessel operations. The accounting policies applied to the reportable segments are the same as those used in the preparation of the Company’s consolidated financial statements.

The following tables present results for these segments for the years ended December 31, 2012, 2011, and 2010.

Year ended December 31, 2012	Shuttle Tanker and FSO Segment $		FPSO Segment $		Liquefied Gas Segment $		Conventional Tanker Segment $			Total $
Revenues		613,388		581,215		286,237		475,395			1,956,235
Voyage expenses		104,382		232		283		33,386			138,283
Vessel operating expenses		175,459		331,124		45,972		177,564			730,119
Time-charter hire expense		56,989		—		—		73,750			130,739
Depreciation and amortization		125,104		135,413		69,064		126,317			455,898
General and administrative (2)		54,139		68,035		21,969		58,824			202,967
Asset impairments		28,830		—		—		405,252			434,082
Net loss on sale of vessels and equipment		1,112		—		—		5,863			6,975
Restructuring charges		652		—		—		6,913			7,565
Income (loss) from vessel operations		66,721		46,411		148,949		(412,474	)		(150,393	)
Total assets of operating segments at December 31, 2012		1,709,674		2,824,832		3,148,037		2,037,394			9,719,938

Year ended December 31, 2011	Shuttle Tanker and FSO Segment $		FPSO Segment $			Liquefied Gas Segment $			Conventional Tanker Segment $			Total $
Revenues		613,768		464,810			272,041			603,163			1,953,782
Voyage expenses		97,743		—			4,862			74,009			176,614
Vessel operating expenses		196,536		242,332			48,158			190,661			677,687
Time-charter hire expense		74,478		—			—			139,701			214,179
Depreciation and amortization		129,293		96,915			63,641			138,759			428,608
General and administrative (2)		60,359		52,854			20,586			89,817			223,616
Asset impairments		43,185		—			—			112,103			155,288
Net loss (gain) on sale of vessels and equipment		171		(4,888	)		—			488			(4,229	)
Bargain purchase gain		—		(68,535	)		—			—			(68,535	)
Goodwill impairment		—		—			—			36,652			36,652
Restructuring charges		5,351		—			—			139			5,490
Income (loss) from vessel operations		6,652		146,132			134,794			(179,166	)		108,412
Total assets of operating segments at December 31, 2011		1,891,496		2,527,095			2,924,653			2,572,685			9,915,929
Year ended December 31, 2010	Shuttle Tanker and FSO Segment $		FPSO Segment $			Liquefied Gas Segment $			Conventional Tanker Segment $			Total $
Revenues (1)		622,195		463,931			248,378			761,249			2,095,753
Voyage expenses		111,003		—			29			134,065			245,097
Vessel operating expenses		182,614		209,283			46,497			192,153			630,547
Time-charter hire expense		89,768		—			—			196,224			285,992
Depreciation and amortization		127,438		95,784			62,904			154,579			440,705
General and administrative (2)		51,281		42,714			20,147			79,601			193,743
Asset impairments		19,480		—			—			31,730			51,210
Net (gain) loss on sale of vessels and equipment		—		—			(4,340	)		2,280			(2,060	)
Restructuring charges		704		—			394			15,298			16,396
Income (loss) from vessel operations		39,907		116,150			122,747			(44,681	)		234,123

(1) FPSO segment includes $59.2 million in revenue for the year ended December 31, 2010, related to operations in previous years as a result of executing a contract amendment in March 2010.

(2) Includes direct general and administrative expenses and indirect general and administrative expenses (allocated to each segment based on estimated use of corporate resources).

A reconciliation of total segment assets to amounts presented in the accompanying consolidated balance sheets is as follows:

	December 31, 2012 $		December 31, 2011 $
Total assets of all segments		9,719,938		9,915,929
Cash		639,491		692,127
Accounts receivable and other assets		642,596		529,621
Consolidated total assets		11,002,025		11,137,677

The following table presents revenues and percentage of consolidated revenues for customers that accounted for more than 10% of the Company’s consolidated revenues during the periods presented. All of these customers are international oil companies.

(U.S. dollars in millions)	Year Ended December 31, 2012			Year Ended December 31, 2011			Year Ended December 31, 2010
Statoil ASA (1)		$299.1 or 15%		$	283.7 or 15	%	$	330.4 or 16	%
Petroleo Brasileiro SA (1)		$289.3 or 15%		$	224.9 or 12	%	$	226.0 or 11	%
BP PLC (2)		(3	)			(3)	$	222.2 or 11	%

(1) Shuttle tanker and FSO, FPSO and conventional tanker segments

(2) Shuttle tanker and FSO, FPSO, liquefied gas and conventional tanker segments

(3) Less than 10%

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Segment Reporting - Additional Information (Detail)	12 Months Ended
	Dec. 31, 2012 Segment
Segment Reporting Information [Line Items]
Number of reportable segments	4
Long Term Fixed-rate time-charter contracts [Member] | Minimum [Member]
Segment Reporting Information [Line Items]
Charter period	1 year
Short Term Fixed-rate time-charter contracts [Member] | Maximum [Member]
Segment Reporting Information [Line Items]
Charter period	1 year

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Capital Lease Obligations and Restricted Cash - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Capital Leased Assets [Line Items]
End of lease contract	Dec. 31, 2041
Restricted cash deposits related to certain term loans and other obligations	$ 58.3	$ 21.1
RasGas II LNG Carriers [Member]
Capital Leased Assets [Line Items]
Capital lease arrangement period	30 years
Ownership interest	70.00%
Number of Carriers	3
Tax indemnification guarantee	15.5
Interest expenses included in capital leases payment obligation	505.0
Approximate capital leases future minimum payments due	977.1
Weighted-average interest rate on lease	5.20%
Restricted cash on deposits	$ 475.5	$ 476.1
Weighted-average interest rates earned on deposits	0.40%	0.30%
Suezmax Tankers [Member]
Capital Leased Assets [Line Items]
Capital lease arrangement period	During 2012, the lessor extended the term of one of the five leases and has forfeited their option to sell all five vessels to the Company until 2014.
Number of Carriers	5
Weighted-average interest rate on lease	7.40%
Number Of vessel expected to be sold to third party	2

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Loss Per Share - Loss Per Share (Detail) (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Earnings Per Share [Abstract]
Net loss attributable to stockholders' of Teekay Corporation	$ (160,180)	$ (358,616)	$ (267,287)
Weighted average number of common shares	69,263,369	70,234,817	72,862,617
Dilutive effect of stock-based compensation
Common stock and common stock equivalents	69,263,369	70,234,817	72,862,617
Loss per common share:
Basic	$ (2.31)	$ (5.11)	$ (3.67)
Diluted	$ (2.31)	$ (5.11)	$ (3.67)

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Financing Transactions - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Subsidiary or Equity Method Investee [Line Items]
Ownership percentage		49.00%
Amount increases to retained earnings	$ 88,727	$ 124,247	$ 123,203
Teekay LNG [Member]
Subsidiary or Equity Method Investee [Line Items]
Ownership percentage	37.50%	40.10%
Interest of Company's general partner	2.00%
Teekay Offshore [Member]
Subsidiary or Equity Method Investee [Line Items]
Ownership percentage	29.40%	33.00%	67.00%
Interest of Company's general partner	2.00%
Teekay Tankers [Member]
Subsidiary or Equity Method Investee [Line Items]
Ownership percentage	25.10%	26.00%
Teekay Tankers [Member] | Common Class B [Member]
Subsidiary or Equity Method Investee [Line Items]
Common Stock, maximum voting power	49.00%
Common stock number of votes per share	Five votes per share

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Loss Per Share

12 Months Ended

Dec. 31, 2012

Loss Per Share

19. Loss Per Share

	Year Ended December 31,
	2012 $			2011 $			2010 $
Net loss attributable to stockholders’ of Teekay Corporation		(160,180	)		(358,616	)		(267,287	)
Weighted average number of common shares		69,263,369			70,234,817			72,862,617
Dilutive effect of stock-based compensation		—			—			—
Common stock and common stock equivalents		69,263,369			70,234,817			72,862,617
Loss per common share:
—Basic		(2.31	)		(5.11	)		(3.67	)
—Diluted		(2.31	)		(5.11	)		(3.67	)

The anti-dilutive effect attributable to outstanding stock-based compensation excluded from the calculation of diluted loss per common share, for the years ended December 31, 2012, 2011, and 2010 was 3.9 million, 5.7 million and 6.1 million shares, respectively.

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Pension Benefits - Changes in Benefit Obligation and Fair Value of Benefit Plans Assets (Parenthetical) (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2012
Defined Benefit Plan Disclosure [Line Items]
Amortized from accumulated other comprehensive (loss) income into net periodic benefit cost	$ (1.2)

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Subsequent Events - Additional Information (Detail) Share data in Millions, unless otherwise specified	12 Months Ended				1 Months Ended		1 Months Ended		1 Months Ended	12 Months Ended				1 Months Ended					1 Months Ended
	Dec. 31, 2012 USD ($)	Dec. 31, 2011 USD ($)	Dec. 31, 2010 USD ($)	Jan. 31, 2013 Subsequent Event [Member] NOK	Apr. 30, 2013 Teekay Offshore [Member] Subsequent Event [Member] USD ($)	Jan. 31, 2013 Teekay Offshore [Member] Subsequent Event [Member] USD ($)	Apr. 30, 2013 General Partner [Member] Teekay Offshore [Member] Subsequent Event [Member]	Apr. 30, 2013 Partner's equity common units [Member] Teekay Offshore [Member] Subsequent Event [Member]	Apr. 30, 2013 Suezmax Tankers [Member] Teekay Offshore [Member] Subsequent Event [Member] Vessel	Dec. 31, 2012 Exmar Lpg Bvba [Member] USD ($) Vessel	Dec. 31, 2012 Exmar Lpg Bvba [Member] Pro Rata Share [Member] Secured Debt [Member] USD ($)	Dec. 31, 2012 Exmar Lpg Bvba [Member] Two Thousand And Fifteen And Two Thousand And Sixteen [Member] Vessel	Dec. 31, 2012 Exmar Lpg Bvba [Member] Two Thousand And Fourteen [Member] Buildings	Apr. 30, 2013 STX [Member] Subsequent Event [Member] USD ($) DWT Vessel Buildings	Jan. 31, 2013 NOK 2016 [Member] Subsequent Event [Member] NOK	Jan. 31, 2013 NOK 2018 [Member] Subsequent Event [Member] NOK	Jan. 31, 2013 NOK 2013 [Member] Subsequent Event [Member] USD ($)	Jan. 31, 2013 Norwegian Kroner Bond Net [Member] Subsequent Event [Member] USD ($)	Apr. 30, 2013 Revolving credit facilities [Member] Teekay Offshore [Member] Subsequent Event [Member] CreditFacility
Subsequent Event [Line Items]
Debt Instrument senior unsecured bond				1,300,000,000		$ 233,000,000									500,000,000	800,000,000
Fixed interest rate on loans															4.80%	5.93%
Amount used to repurchase bonds																	388,500,000
Senior unsecured bonds																	600,000,000
Net proceeds from bond issuance and bond repurchase																		167,000,000
Number of LPG carriers										16
Number of new building												4	4	4
Number of chartered-in LPG carriers										5
Number of vessels									4	25
Order option maximum additional vessels										4				12
Partnership own joint venture										50.00%
Total acquisition amount of joint venture	183,554,000	38,496,000	45,480,000							134,000,000
Pro rata share of existing debt and lease obligations											108,000,000
Refinancing of joint venture										355,000,000
Weight capacity in dead-weight tonnes														113,000
Costs expected to be incurred for each product tanker new building														47,000,000
Issuance of common units in private placement					2.06
Proceeds from issuance of common units in private placement					60,000,000
Percentage of General Partner's capital							2.00%
General Partner's capital contribution, value					1,200,000
Common units outstanding after private placement								83.8
Issuance of preferred units in public offering					6.0
Proceeds from issuance of preferred units in public offering					$ 144,900,000
Ownership percentage after private placement					28.70%
Number of revolving credit facilities expected to be repaid																			2

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Equity Accounted Investments - Condensed Summary of Company's Investments in and Advances to Joint Ventures (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2012 Sevan Marine [Member]	Dec. 31, 2011 Sevan Marine [Member]	Dec. 31, 2012 Tiro and Sidon [Member]	Dec. 31, 2012 Joint Venture [Member]	Dec. 31, 2011 Joint Venture [Member]	Dec. 31, 2012 Joint Venture [Member] Minimum [Member]	Dec. 31, 2012 Joint Venture [Member] Maximum [Member]	Dec. 31, 2012 Teekay LNG-Marubeni Joint Venture [Member]	Feb. 28, 2012 Teekay LNG-Marubeni Joint Venture [Member]	Dec. 31, 2012 RasGas 3 [Member]	Dec. 31, 2011 RasGas 3 [Member]	Dec. 31, 2012 Exmar [Member]	Dec. 31, 2011 Exmar [Member]	Dec. 31, 2012 Angola LNG Project [Member]	Dec. 31, 2011 Angola LNG Project [Member]
Schedule of Equity Method Investments [Line Items]
Investment in Joint Ventures	$ 480,043	$ 240,537	$ 39,223	$ 34,898	$ 30,024	$ 8,250	$ 10,911			$ 183,724		$ 107,386	$ 97,423	$ 82,737	$ 81,242	$ 28,699	$ 16,063
Ownership Percentage			43.00%		50.00%			40.00%	50.00%	52.00%	100.00%	40.00%		50.00%		33.00%
Long-term Loans to Joint Venture	$ 206,903	$ 85,248	$ 133,000	$ 50,000	$ 18,121	$ 55,782	$ 35,248

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Accrued Liabilities - Accrued Liabilities (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2012	Dec. 31, 2011
Schedule Of Accrued Liabilities [Line Items]
Voyage and vessel expenses	$ 144,250	$ 209,058
Interest	66,125	63,310
Payroll and benefits and other	100,452	83,528
Deferred revenue	52,391	38,690
Accrued Liabilities	$ 363,218	$ 394,586

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Financing Transactions (Tables)

12 Months Ended

Dec. 31, 2012

Summary of Proceeds Received from Financial Transactions

During the years ended December 31, 2012, 2011, and 2010, the Company’s publicly traded subsidiaries, Teekay Tankers, Teekay Offshore and Teekay LNG completed the following public offerings and equity placements:

	Total  Proceeds Received $		Less: Teekay Corporation Portion $			Offering Expenses $			Net  Proceeds Received $
2012
Teekay Offshore Public Offerings		219,474		(4,389	)		(8,164	)		206,921
Teekay Offshore Direct Equity Placement		45,919		(919	)		—			45,000
Teekay Tankers Public Offerings		69,000		—			(3,229	)		65,771
Teekay LNG Public Offering		189,243		(3,784	)		(6,927	)		178,532
2011
Teekay Tankers Public Offerings		112,054		—			(4,820	)		107,234
Teekay Offshore Private Equity Placement		420,145		(230,144	)		(279	)		189,722
Teekay LNG Public Offerings		356,133		(7,123	)		(14,909	)		334,101
2010
Teekay Offshore Public Offerings		419,989		(8,400	)		(18,645	)		392,944
Teekay Tankers Public Offerings		243,977		(32,000	)		(9,279	)		202,698
Teekay LNG Direct Equity Placement		51,020		(1,020	)		—			50,000

(1) Consists of the portion Teekay Corporation subscribed for in the public offering or equity placement.

As a result of the public offerings and equity placements of Teekay Tankers, Teekay Offshore and Teekay LNG, the Company recorded increases to retained earnings of $88.7 million (2012), $124.2 million (2011) and $123.2 million (2010). These amounts represent Teekay’s dilution gains from the issuance of units and shares in these consolidated subsidiaries.

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Capital Stock

12 Months Ended

Dec. 31, 2012

Capital Stock

12. Capital Stock

The authorized capital stock of Teekay at December 31, 2012 and 2011, was 25,000,000 shares of Preferred Stock, with a par value of $1 per share, and 725,000,000 shares of Common Stock, with a par value of $0.001 per share. During 2012, the Company issued 1.0 million common shares upon the exercise of stock options and restricted stock units and awards, and had no share repurchases of common shares. During 2011, the Company issued 0.6 million common shares upon the exercise of stock options and restricted stock units and awards, and had share repurchases of 3.9 million common shares. As at December 31, 2012, Teekay had issued 70,203,388 shares of Common Stock (2011 – 74,391,691) and no shares of Preferred Stock issued. As at December 31, 2012, Teekay had 69,704,188 shares of Common Stock outstanding (2011 – 68,732,341).

Dividends may be declared and paid out of surplus only, but if there is no surplus, dividends may be declared or paid out of the net profits for the fiscal year in which the dividend is declared and for the preceding fiscal year. Surplus is the excess of the net assets of the Company over the aggregated par value of the issued shares of the Teekay. Subject to preferences that may apply to any shares of preferred stock outstanding at the time, the holders of common stock are entitled to share equally in any dividends that the board of directors may declare from time to time out of funds legally available for dividends.

During 2008, Teekay announced that its Board of Directors had authorized the repurchase of up to $200 million of shares of its Common Stock in the open market, subject to cancellation upon approval by the Board of Directors. As at December 31, 2012, Teekay had repurchased approximately 5.2 million shares of Common Stock for $162.3 million pursuant to such authorizations. The total remaining share repurchase authorization at December 31, 2012, was $37.7 million.

On July 2, 2010, the Company amended and restated its Stockholder Rights Agreement (the Rights Agreement), which was originally adopted by the Board of Directors in September 2000. In September 2000, the Board of Directors declared a dividend of one common share purchase right (a Right) for each outstanding share of the Company’s common stock. These Rights continue to remain outstanding and will not be exercisable and will trade with the shares of the Company’s common stock until after such time, if any, as a person or group becomes an “acquiring person” as set forth in the amended Rights Agreement. A person or group will be deemed to be an “acquiring person,” and the Rights generally will become exercisable, if a person or group acquires 20% or more of the Company’s common stock, or if a person or group commences a tender offer that could result in that person or group owning more than 20% of the Company’s common stock, subject to certain higher thresholds for existing stockholders that currently own in excess of 15% of the Company’s common stock. Once exercisable, each Right held by a person other than the “acquiring person” would entitle the holder to purchase, at the then-current exercise price, a number of shares of common stock of the Company having a value of twice the exercise price of the Right. In addition, if the Company is acquired in a merger or other business combination transaction after any such event, each holder of a Right would then be entitled to purchase, at the then-current exercise price, shares of the acquiring company’s common stock having a value of twice the exercise price of the Right. The amended Rights Agreement will expire on July 1, 2020, unless the expiry date is extended or the Rights are earlier redeemed or exchanged by the Company.

Stock-based compensation

As at December 31, 2012, the Company had reserved pursuant to its 1995 Stock Option Plan and 2003 Equity Incentive Plan (collectively referred to as the Plans) 8,924,470 shares of Common Stock (2011 – 9,895,787) for issuance upon exercise of options or equity awards granted or to be granted. During the years ended December 31, 2012, 2011, and 2010, the Company granted options under the Plans to acquire up to 432,971, 95,604, and 733,167 shares of Common Stock, respectively, to certain eligible officers, employees and directors of the Company. The options under the Plans have ten-year terms and vest equally over three years from the grant date. All options outstanding as of December 31, 2012, expire between March 6, 2013 and March 6, 2022, ten years after the date of each respective grant. In March 2013, the Company adopted a 2013 Equity Incentive Plan and suspended the 2003 Equity Incentive Plan.

A summary of the Company’s stock option activity and related information for the years ended December 31, 2012, 2011, and 2010, are as follows:

	December 31, 2012					December 31, 2011					December 31, 2010
	Options			Weighted- Average		Options			Weighted- Average		Options			Weighted- Average
	(000’s)			Exercise Price		(000’s)			Exercise Price		(000’s)			Exercise Price
	#			$		#			$		#			$
Outstanding—beginning of year		5,713			32.47		6,123			31.54		5,983			31.46
Granted		433			27.69		96			34.93		733			24.42
Exercised		(733	)		15.85		(363	)		16.14		(380	)		15.12
Forfeited / expired		(128	)		31.81		(143	)		33.11		(213	)		29.00
Outstanding—end of year		5,285			34.40		5,713			32.47		6,123			31.54
Exercisable—end of year		4,561			35.54		4,656			35.40		3,963			36.80

A summary of the Company’s non-vested stock option activity and related information for the years ended December 31, 2012, 2011 and 2010, are as follows:

	December 31, 2012					December 31, 2011					December 31, 2010
	Options			Weighted- Average		Options			Weighted- Average					Weighted- Average
	(000’s)			Grant Date Fair Value		(000’s)			Grant Date Fair Value		(000’s)			Grant Date Fair Value
	#			$		#			$		#			$
Outstanding non-vested stock options—beginning of year		1,057			6.40		2,160			6.36		2,684			6.56
Granted		433			8.72		96			11.27		733			8.16
Vested		(747	)		5.44		(1,071	)		6.18		(1,084	)		7.48
Forfeited		(20	)		8.24		(128	)		11.47		(173	)		10.06
Outstanding non-vested stock options—end of year		723			8.74		1,057			6.40		2,160			6.36

The weighted average grant date fair value for options forfeited in 2012 was $0.8 million (2011—$1.2 million).

As of December 31, 2012, there was $2.3 million of total unrecognized compensation cost related to non-vested stock options granted under the Plans. Recognition of this compensation is expected to be $1.3 million (2013), and $1.0 million (2014). During the years ended December 31, 2012, 2011, and 2010, the Company recognized $2.9 million, $5.3 million and $8.1 million, respectively, of compensation cost relating to stock options granted under the Plans. The intrinsic value of options exercised during 2012 was $11.9 million (2011—$3.8 million; 2010—$6.8 million).

As at December 31, 2012, the intrinsic value of the outstanding in–the-money stock options was $22.0 million (2011—$20.9 million) and exercisable stock options was $18.3 million (2011—$12.6 million). As at December 31, 2012, the weighted-average remaining life of options vested and expected to vest was 5.0 years (2011 – 5.4 years).

Further details regarding the Company’s outstanding and exercisable stock options at December 31, 2012 are as follows:

	Outstanding Options						Exercisable Options
	Options (000’s)		Weighted- Average Remaining Life		Weighted- Average Exercise Price		Options (000’s)		Weighted- Average Remaining Life		Weighted- Average Exercise Price
Range of Exercise Prices	#		(Years)		$		#		(Years)		$
$10.00 – $14.99		689		6.2		11.84		689		6.2		11.84
$15.00 – $19.99		107		0.2		19.59		107		0.2		19.59
$20.00 – $24.99		626		7.1		24.39		392		7.1		24.37
$25.00 – $29.99		433		9.2		27.69		—		—		—
$30.00 – $34.99		429		2.6		33.84		373		1.8		33.67
$35.00 – $39.99		741		3.3		38.98		741		3.3		38.98
$40.00 – $44.99		1,246		5.2		40.41		1,246		5.2		40.41
$45.00 – $49.99		345		2.2		46.80		345		2.2		46.80
$50.00 – $59.99		666		4.2		51.40		666		4.2		51.40
$60.00 – $64.99		3		4.3		60.96		3		4.3		60.96
		5,285		5.0		34.40		4,562		4.4		35.54

The weighted-average grant-date fair value of options granted during 2012 was $8.72 per option (2011—$11.27, 2010—$8.16). The fair value of each option granted was estimated on the date of the grant using the Black-Scholes option pricing model. The following weighted-average assumptions were used in computing the fair value of the options granted: expected volatility of 54.8% in 2012, 53.6% in 2011 and 52.7% in 2010; expected life of four years; dividend yield of 4.4% in 2012, 3.8% in 2011 and 3.3% in 2010; risk-free interest rate of 2.1% in 2012, 2.1% in 2011, and 2.6% in 2010; and estimated forfeiture rate of 12% in 2012, 11.2% in 2011 and 9.8% in 2010. The expected life of the options granted was estimated using the historical exercise behavior of employees. The expected volatility was generally based on historical volatility as calculated using historical data during the five years prior to the grant date.

The Company grants restricted stock units and performance share units to certain eligible officers, employees and directors of the Company. Each restricted stock unit and performance share unit is equivalent in value to one share of the Company’s common stock plus reinvested dividends from the grant date to the vesting date. The restricted stock units vest equally over two or three years from the grant date and the performance share units vest three years from the grant date. Upon vesting, the value of the restricted stock units and performance share units are paid to each grantee in the form of shares. The number of performance share units that vest will range from zero to three times the original number granted, based on certain performance and market conditions.

In February 2010, the Company modified settlement terms for its then outstanding restricted stock units, such that all restricted stock units will be paid in the form of shares. This modification decreased accrued liabilities by $4.0 million, decreased other long-term liabilities by $2.0 million, and increased additional paid-in capital by $6.0 million.

During 2012, the Company granted 268,595 restricted stock units with a fair value of $7.4 million and 67,870 performance share units with a fair value of $2.5 million, based on the quoted market price and a Monte Carlo valuation model, to certain of the Company’s employees and directors. During 2012, 334,256 restricted stock units with a market value of $9.0 million vested and that amount was paid to grantees by issuing 200,024 shares of common stock, net of withholding taxes. During 2011, the Company granted 358,180 restricted stock units with a fair value of $12.5 million and 73,349 performance share units with a fair value of $3.7 million, based on the quoted market price and a Monte Carlo valuation model, to certain of the Company’s employees and directors. During 2011, 214,863 restricted stock units with a market value of $4.9 million vested and that amount was paid to grantees by issuing 131,682 shares of common stock, net of withholding taxes. During 2010, the Company granted 263,620 restricted stock units with a fair value of $6.4 million and 87,054 performance share units with a fair value of $3.5 million, based on the quoted market price and a Monte Carlo valuation model, to certain of the Company’s employees and directors. During 2010, 227,165 restricted stock units with a market value of $4.9 million vested and that amount was paid to grantees by issuing 148,518 shares of common stock, net of withholding taxes. For the year ended December 31, 2012, the Company recorded an expense of $7.7 million (2011—$12.5 million, 2010—$4.8 million) related to the restricted stock units.

During 2012, the Company also granted 23,563 (2011 – 29,663 and 2010 – 27,028) shares of restricted stock awards with a fair value of $0.7 million, based on the quoted market price, to certain of the Company’s directors. The shares of restricted stock are issued when granted.

In March 2011, the Company incurred a one-time $11.0 million increase to the pension plan benefits of Bjorn Moller, who retired from his position as the Company’s President and Chief Executive Officer on April 1, 2011. The additional pension benefit was in recognition of Mr. Moller’s service to the Company. In addition, the Company recognized a compensation expense of approximately $4.7 million which related to the portion of Mr. Moller’s previously unvested outstanding stock-based compensation grants that vested on the date of his retirement. The total compensation expense related to Mr. Moller’s retirement of $15.7 million was recorded in general and administrative expense in the consolidated statements of loss for the year ended December 31, 2011.

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Derivative Instruments and Hedging Activities - Additional Information (Detail) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2010	Dec. 31, 2011	Dec. 31, 2009
Derivative [Line Items]
Unrealized gains on foreign currency forward contracts designated cash flow hedges	$ 341,000	$ 2,295,000	$ (306,000)	$ 2,923,000
Net gains on foreign currency forward contract	300,000
Estimated time to reclassify, net loss from Income to other Comprehensive loss	12 months
Net losses reclassified from accumulated other comprehensive loss to earnings		600,000
Foreign currency forward contracts [Member]
Derivative [Line Items]
Unrealized gains on foreign currency forward contracts designated cash flow hedges	$ 300,000