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, 2014

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)

Edith Robinson

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.

72,500,502 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		4
Item 2.	Offer Statistics and Expected Timetable		4
Item 3.	Key Information		4
	Selected Financial Data		4
	Risk Factors		7
	Tax Risks		17
Item 4.	Information on the Company		18
	A. Overview, History and Development		18
	B. Operations		21
	Our Fleet		25
	Safety, Management of Ship Operations and Administration		25
	Risk of Loss, Insurance and Risk Management		26
	Operations Outside of the United States		26
	Customers		27
	Flag, Classification, Audits and Inspections		27
	Regulations		27
	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
	Important Financial and Operational Terms and Concepts		35
	Items You Should Consider When Evaluating Our Results		36
	Recent Developments and Results of Operations		37
	Liquidity and Capital Resources		58
	Commitments and Contingencies		62
	Off-Balance Sheet Arrangements		63
	Critical Accounting Estimates		63
Item 6.	Directors, Senior Management and Employees		67
	Directors and Senior Management		67
	Compensation of Directors and Senior Management		69
	Options to Purchase Securities from Registrant or Subsidiaries		69
	Board Practices		69
	Crewing and Staff		71
	Share Ownership		71

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Item 7.	Major Shareholders and Certain Relationships and Related Party Transactions	71
	Major Shareholders		71
	Our Major Shareholder		72
	Our Directors and Executive Officers		72
	Relationships with Our Public Entity Subsidiaries		72
Item 8.	Financial Information		75
Item 9.	The Offer and Listing		75
Item 10.	Additional Information		76
	Memorandum and Articles of Association		76
	Material Contracts		76
	Exchange Controls and Other Limitations Affecting Security Holders		77
	Taxation		77
	Material U.S. Federal Income Tax Considerations		77
	Non-United States Tax Considerations		81
	Documents on Display		81
Item 11.	Quantitative and Qualitative Disclosures About Market Risk		81
Item 12.	Description of Securities Other than Equity Securities		83
PART II.
Item 13.	Defaults, Dividend Arrearages and Delinquencies		83
Item 14.	Material Modifications to the Rights of Security Holders and Use of Proceeds		83
Item 15.	Controls and Procedures		83
	Management’s Report on Internal Control over Financial Reporting		84
Item 16A.	Audit Committee Financial Expert		84
Item 16B.	Code of Ethics		84
Item 16C.	Principal Accountant Fees and Services		84
Item 16D.	Exemptions from the Listing Standards for Audit Committees		85
Item 16E.	Purchases of Equity Securities by the Issuer and Affiliated Purchasers		85
Item 16F.	Change in Registrant’s Certifying Accountant		85
Item 16G.	Corporate Governance		85
Item 16H.	Mine Safety Disclosure		85
PART III.
Item 17.	Financial Statements		85
Item 18.	Financial Statements		85
Item 19.	Exhibits		86
Signature			88

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PART I

This annual report of Teekay Corporation on Form 20-F for the year ended December 31, 2014 (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:

• the timing for implementation of the new Teekay dividend policy;

• the anticipated sale of the Petrojarl Knarr floating production, storage and offloading (or FPSO) unit to Teekay Offshore, including the purchase price, the timing of completion of field installation, contract start-up at full charter rate and the sale, and Teekay Offshore’s ability to finance the purchase price;

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

• our plans for Teekay Parent, which excludes our controlling interests in our publicly-listed subsidiaries, Teekay Offshore, Teekay LNG and Teekay Tankers (or the Daughter Companies), and includes Teekay and its remaining subsidiaries, not to have a direct ownership in any conventional tankers and FPSO units, to increase its free cash flow per share and to grow distributions of Teekay Offshore and Teekay LNG;

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

• the expected positive impact of floating storage on tanker demand in the first half of 2015;

• the relative size of the newbuilding orderbook and the pace of future newbuilding orders in the tanker industry generally;

• 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, capabilities, delivery dates of and financing for newbuildings, acquisitions and conversions including the floating accommodation units (or FAUs), the LNG carriers for Teekay LNG’s new 50/50 joint venture with China LNG (or the Yamal LNG Joint Venture), the LNG carriers acquired by Teekay LNG from BG International Limited, towage vessels, Libra FPSO conversion, and the commencement of service of newbuildings under long-term time-charter contracts;

• the ability to recover from insurance or the charterer certain costs associated with the repair, emergency response and capital upgrades relating to the Petrojarl Banff FPSO unit and the Apollo Spirit storage tanker related to storm damage to the vessels which occurred in December 2011;

• our expectation that the Petrojarl Banff FPSO unit will remain under contract until the end of 2020;

• the ability of Tanker Investments Ltd. (or TIL) to benefit from the cyclical tanker market;

• our ability to obtain charter contracts for newbuildings;

• the exercise of options to order additional M-type, Electronically Controlled, Gas Injection (or MEGI) LNG carrier newbuildings, and the chartering of any such vessels;

• expected financing for the Yamal LNG Joint Venture;

• the cost of supervision contract and crew training in relation to, and expected financing of future shipyard installment payments for the BG Joint Venture;

• the exercise of any counterparty’s rights to terminate a lease, or to obligate us to purchase a leased vessel, or failure to exercise such rights, including the rights under the leases and charters for two of Teekay LNG’s Suezmax tankers;

• the future valuation or impairment of goodwill;

• our expectations as to any impairment of our vessels;

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

• future debt refinancings and our ability to fulfill our debt obligations;

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

• 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;

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

• the impact of recent and future regulatory changes or environmental liabilities;

• the impact of future changes in the demand and price of oil;

• the expected resolution of legal claims against us;

• payment of additional consideration for our acquisitions of ALP Maritime Services B.V. (or ALP) and Logitel Offshore Holding AS (or Logitel) and the capabilities of the ALP vessels and FAUs;

• the expected purchase by Teekay Offshore, through ALP, of six modern on-the-water long-distance towing and offshore installation vessels and our expectation that ALP will become the world’s largest owner and operator of such vessels;

• the ability of Teekay Offshore to grow its long-distance ocean towage and offshore installation services business;

• expected uses of proceeds from vessel or securities transactions;

• features and performance of next generation HiLoad dynamic positioning (or DP) units and Teekay Offshore’s ability to successfully secure a contract for the HiLoad DP unit;

• the impact of our restructuring activities;

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

• our expectations regarding whether the UK taxing authority can successfully challenge the tax benefits available under certain of our former and current leasing arrangements, and the potential financial exposure to us if such a challenge is successful;

• our hedging activities relating to foreign exchange, interest rate and spot market risks;

• 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 2010 through 2014, 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 the Independent Registered Public Accounting Firm therein with respect to fiscal years 2014, 2013, and 2012 (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).

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	Years Ended December 31,
	2010			2011			2012			2013			2014
	(in thousands of U.S. Dollars, except share, per share, and fleet data)
Income Statement Data:
Revenues	$	2,113,604		$	1,976,022		$	1,980,771		$	1,830,085		$	1,993,920
Income (loss) from vessel operations(1)		234,123			108,412			(150,393	)		62,746			427,159
Interest expense		(136,107	)		(137,604	)		(167,615	)		(181,396	)		(208,529	)
Interest income		12,999			10,078			6,159			9,708			6,827
Realized and unrealized (loss) gain on non-designated derivative instruments		(299,598	)		(342,722	)		(80,352	)		18,414			(231,675	)
Equity (loss) income from joint ventures		(11,257	)		(35,309	)		79,211			136,538			128,114
Foreign exchange gain (loss)		31,983			12,654			(12,898	)		(13,304	)		13,431
Other (loss) income		(5,118	)		12,360			366			5,646			(1,152	)
Income tax recovery (expense)		6,340			(4,290	)		14,406			(2,872	)		(10,173	)
Net (loss) income		(166,635	)		(376,421	)		(311,116	)		35,480			124,002
Less: Net (income) loss attributable to non-controlling interests		(100,652	)		17,805			150,936			(150,218	)		(178,759	)
Net loss attributable to shareholders of Teekay Corporation		(267,287	)		(358,616	)		(160,180	)		(114,738	)		(54,757	)
Per Common Share Data:
Basic loss attributable to shareholders of Teekay Corporation		(3.67	)		(5.11	)		(2.31	)		(1.63	)		(0.76	)
Diluted loss attributable to shareholders of Teekay Corporation		(3.67	)		(5.11	)		(2.31	)		(1.63	)		(0.76	)
Cash dividends declared		1.2650			1.2650			1.2650			1.2650			1.2650
Balance Sheet Data (at end of year):
Cash and cash equivalents	$	779,748		$	692,127		$	639,491		$	614,660		$	806,904
Restricted cash		576,271			500,154			533,819			502,732			119,351
Vessels and equipment		6,771,375			7,890,761			7,321,058			7,351,144			8,106,247
Net investments in direct financing leases		487,516			459,908			436,601			727,262			704,953
Total assets		9,912,348			11,137,677			11,002,025			11,555,701			11,864,212
Total debt (including capital lease obligations)		5,170,198			6,091,420			6,197,288			6,707,799			6,800,048
Capital stock and additional paid-in capital		672,684			660,917			681,933			713,760			770,759
Non-controlling interest		1,353,561			1,863,798			1,876,085			2,071,262			2,290,305
Total equity		3,332,008			3,303,794			3,191,474			3,203,050			3,388,633
Number of outstanding shares of common stock		72,012,843			68,732,341			69,704,188			70,729,399			72,500,502
Other Financial Data:
Net revenues (2)	$	1,868,507		$	1,799,408		$	1,842,488		$	1,717,867		$	1,866,073
EBITDA (3)		390,838			184,003			291,832			641,126			758,781
Adjusted EBITDA (3)		729,695			686,795			830,676			817,382			1,037,284
Total debt to total capitalization(4)		60.8	%		64.9	%		66.0	%		67.7	%		66.7	%
Net debt to total net capitalization (5)		53.4	%		59.8	%		61.2	%		63.6	%		63.4	%
Capital expenditures:
Vessel and equipment purchases (6)	$	343,091		$	755,045		$	523,597		$	753,755		$	994,931
(1)    Income (loss) from vessel operations include, among other things, the following:
	Years Ended December 31,
	2010			2011			2012			2013			2014
	(in thousands)
Asset impairments, loan loss provisions and net (loss) gain on sale of vessels and equipment	($	49,150	)	($	151,059	)	($	441,057	)	($	166,358	)	$	11,271
Unrealized losses on derivative instruments		(4,875	)		(791	)		(660	)		(130	)		—
Restructuring charges		(16,396	)		(5,490	)		(7,565	)		(6,921	)		(9,826	)
Goodwill impairment charge		—			(36,652	)		—			—			—
Bargain purchase gain		—			68,535			—			—			—
	$	(70,421	)	$	(125,457	)	$	(449,282	)	$	(173,409	)	$	1,445

(2) 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.

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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,
	2010			2011			2012			2013			2014
	(in thousands of U.S. Dollars)
Revenues	$	2,113,604		$	1,976,022		$	1,980,771		$	1,830,085		$	1,993,920
Voyage expenses	($	245,097	)	($	176,614	)	($	138,283	)	($	112,218	)	($	127,847	)
Net revenues	$	1,868,507		$	1,799,408		$	1,842,488		$	1,717,867		$	1,866,073

(3) EBITDA represents earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA represents EBITDA before restructuring charges, unrealized foreign exchange (gain) loss, asset impairments, loan loss provisions, net loss (gain) on sale of vessels and equipment, goodwill impairment charge, bargain purchase gain, amortization of in-process revenue contracts, unrealized losses (gains) on derivative instruments, realized losses on interest rate swaps, realized losses on interest rate swap amendments and terminations, and share of the above items 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 measures 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.

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

	Year Ended December 31,
	2010			2011			2012			2013			2014
	(in thousands of U.S. Dollars)
Income Statement Data:
Reconciliation of EBITDA and Adjusted EBITDA to Net (Loss) Income
Net (loss) income	$	(166,635	)	$	(376,421	)	$	(311,116	)	$	35,480		$	124,002
Income tax (recovery) expense		(6,340	)		4,290			(14,406	)		2,872			10,173
Depreciation and amortization		440,705			428,608			455,898			431,086			422,904
Interest expense, net of interest income		123,108			127,526			161,456			171,688			201,702
EBITDA		390,838			184,003			291,832			641,126			758,781
Restructuring charges		16,396			5,490			7,565			6,921			9,826
Foreign exchange (gain) loss		(31,983	)		(12,654	)		12,898			13,304			(13,431	)
Loss on notes repurchased		12,645			—			—			—			7,699
Asset impairments, loan loss provisions and net loss (gain) on sale of vessels and equipment		49,150			151,059			441,057			166,358			(11,271	)
Goodwill impairment charge		—			36,652			—			—			—
Bargain purchase gain		—			(68,535	)		—			—			—
Amortization of in-process revenue contracts		(48,254	)		(46,436	)		(72,933	)		(61,700	)		(40,939	)
Unrealized losses (gains) on derivative instruments		140,187			70,822			(29,658	)		(178,731	)		100,496
Realized losses on interest rate swaps		154,098			132,931			123,277			122,439			125,424
Realized losses on interest rate swap amendments and terminations		—			149,666			—			35,985			1,319
Write-down of equity-accounted investments		—			19,411			1,767			—			—
Items related to non-consolidated joint ventures(a)		46,618			64,386			54,871			71,680			99,380
Adjusted EBITDA		729,695			686,795			830,676			817,382			1,037,284
Reconciliation of Adjusted EBITDA to net operating cash flow
Net operating cash flow		411,750			107,193			288,936			292,584			446,317
Expenditures for drydocking		57,483			55,620			35,023			72,205			74,379
Interest expense, net of interest income		123,108			127,526			161,456			171,688			201,702
Change in non-cash working capital items related to operating activities		(45,415	)		84,347			115,209			(64,184	)		(60,631	)
Equity (loss) income, net of dividends received		(11,257	)		(31,376	)		65,639			121,144			94,726
Other (loss) income		(23,086	)		(8,988	)		(21,300	)		(13,080	)		44,842
Restructuring charges		16,396			5,490			7,565			6,921			9,826
Realized losses on interest rate swaps		154,098			132,931			123,277			122,439			125,424
Realized losses on interest rate swap resets and terminations		—			149,666			—			35,985			1,319
Items related to non-consolidated joint ventures(a)		46,618			64,386			54,871			71,680			99,380
Adjusted EBITDA		729,695			686,795			830,676			817,382			1,037,284

(a) Equity income from non-consolidated joint ventures is adjusted for income tax expense (recovery), depreciation and amortization, interest expense, net of interest income, foreign exchange loss (gain), amortization of in-process revenue contracts, and unrealized and realized (gains) losses on derivative instruments.

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

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

(6) Excludes our acquisition of FPSO units and investment in Sevan Marine ASA (or Sevan) in 2011, our acquisition of LNG carriers through our 52% interest in the joint venture between Teekay LNG and Marubeni Corporation in 2012 (or the Teekay LNG-Marubeni Joint Venture), and us and Teekay Tankers taking ownership of three Very Large Crude Carriers (or VLCCs) and Teekay LNG’s acquisition of an LPG carrier in 2014. 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.”

Risk Factors

Some of the following risks relate principally to the industry in which we operate and to our business in general. Other risks relate principally to the securities market and to ownership of our common stock. The occurrence of any of the events described in this section could materially and adversely affect our business, financial condition, operating results and ability to pay dividends on, and the trading price of our common stock.

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.

A continuation of the recent significant declines in oil prices may adversely affect our growth prospects and results of operations.

Global crude oil prices have significantly declined since mid-2014. The significant decline in oil prices has also contributed to depressed natural gas prices. A continuation of lower oil prices or a further decline in oil prices may adversely affect our business, results of operations and financial condition and our ability to make cash distributions, as a result of, among other things:

• a reduction in exploration for or development of new offshore oil fields, or the delay or cancelation of existing offshore projects as energy companies lower their capital expenditures budgets, which may reduce our growth opportunities;

• a reduction in or termination of production of oil at certain fields we service, which may reduce our revenues under volume-based contracts of affreightment, production-based components of our FPSO unit contracts or life-of-field contracts;

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• negatively affecting both the competitiveness of natural gas as a fuel for power generation and the market price of natural gas, to the extent that natural gas prices are benchmarked to the price of crude oil;

• lower demand for vessels of the types we own and operate, which may reduce available charter rates and revenue to us upon redeployment of our vessels following expiration or termination of existing contracts or upon the initial chartering of vessels;

• customers potentially seeking to renegotiate or terminate existing vessel contracts, or failing to extend or renew contracts upon expiration;

• the inability or refusal of customers to make charter payments to us due to financial constraints or otherwise; or

• declines in vessel values, which may result in losses to us upon vessel sales or impairment charges against our earnings.

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 the conventional tanker vessels owned by our publicly-listed subsidiary, Teekay Tankers Ltd. (NYSE: TNK) (or Teekay Tankers), which accounted for approximately 12% and 9% of our net revenues during 2014 and 2013, respectively. These vessels are primarily employed on the spot-charter market, which is highly volatile and fluctuates based upon tanker and oil supply and demand. 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, 2014, we had 33 vessels operating in our shuttle tanker fleet, nine FPSO units operating in our FPSO fleet (of which one is operating in a joint venture and one was not yet in service), one FPSO unit under upgrade and one FPSO unit under conversion. Certain of our shuttle tankers and 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.

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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, commencing in 2016. 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.

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 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 and towage vessels may fluctuate substantially over time and may be lower when we are attempting to re-charter these vessels, which could adversely affect our operating results. Any changes in charter rates for LNG or LPG carriers, shuttle tankers or FSO or FAU 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. Our ability to charter our towage vessels will depend, among other things, the state of the towage market. Towage contracts are highly competitive and are based on the level of projects undertaken by the customer base. There also exists some volatility in charter rates for LNG and LPG carriers, shuttle tankers, FSO and FPSO units and FAUs, 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 redeploy 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 or the disposition of the vessel at a fair market value that is lower than its book 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 marine transportation of LNG and LPG, as well as the supply of LNG and LPG. Demand for LNG and LPG and for the marine transportation of LNG and LPG 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 publicly-listed subsidiary Teekay LNG Partners L.P. (NYSE: TGP) (or Teekay LNG), and could harm its 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, delays or cancellations of projects under development 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;

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• 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 reduced 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 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, 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 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 33%, or $664.1 million, of our consolidated revenues during 2014 (2013 – three customers for 37%, or $677.3 million, 2012 – three customers for 38% or $760.3 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.

Petroleo Brasileiro SA (or Petrobras), the Brazil state-controlled oil company, is our largest customer. Petrobras is alleged to have participated in a widespread corruption scandal involving improper payments to Brazilian politicians and political parties. Petrobras has also announced that it may decrease its five-year capital expenditure budget for 2015 to 2019 and that it is reducing the pace of some projects. It is uncertain at this time how these factors may affect Petrobras, its performance of existing contracts with us or the development of new projects offshore of Brazil. Any adverse effect on Petrobras’ ability to develop new offshore projects or to perform under existing contracts with us could harm us.

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.

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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.

Unlike newbuildings, existing vessels typically do not carry warranties as to their condition. While we generally inspect existing vessels prior to purchase, such an inspection would normally not provide us with as much knowledge of a vessel’s condition as we would possess if it had been built for us and operated by us during its life. Repairs and maintenance costs for existing vessels are difficult to predict and may be substantially higher than for vessels we have operated since they were built. These costs could decrease our cash flow and reduce our liquidity.

We may not be successful in our recent entry into the long-distance ocean towage and offshore installation market or the floating accommodation market. These markets have competitive dynamics that may differ from markets in which we already participate, and we may be unsuccessful in securing contracts for the FAUs and towage vessels which are currently unchartered, gaining acceptance in these markets from customers or competing against other companies with more experience or larger fleets or resources in these markets. We also may not be successful in employing the HiLoad DP unit on contracts sufficient to recover our investment in the unit.

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 and TIL 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.

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 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 at the time and we intend to maintain our compliance with all U.S. and EU sanctions.

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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.

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 are 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, 2014, we had on order 18 LNG carriers, nine LPG carriers, one FSO conversion, one FPSO conversion, one FPSO upgrade, three FAUs and four long-distance towing and offshore installation vessels. The 18 LNG carriers are scheduled for delivery between 2016 and 2020. Nine LPG carriers are scheduled for delivery between 2015 and 2018. One FSO conversion is scheduled for completion in early-2017. One FPSO conversion is scheduled for completion in late 2016.

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One FPSO upgrade is scheduled for completion in early-2016. One floating accommodation unit delivered in 2015 and two are scheduled to deliver in 2016. Four long-distance towing and offshore installation vessels are scheduled to deliver in 2016. As of December 31, 2014, progress payments made towards these newbuildings, excluding payments made by our joint venture partners, totaled $586.7 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 shareholders 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 shareholder dilution and would increase the aggregate amount of cash required to pay quarterly dividends.

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 payments of our Norwegian Kroner bonds.

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 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.

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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 Indian Ocean off the coast of Somalia. While there continue to be significant numbers of piracy incidents in the Gulf of Aden and Indian Ocean, recently there have been increases in the frequency and severity of piracy incidents off the coast of West Africa. 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, including Brazil, or where our vessels are registered. 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.

The LNG carrier newbuildings for the Yamal LNG Project are customized vessels and Teekay LNG’s financial condition, results of operations and ability to make distributions to us could be substantially affected if the Yamal LNG Project is not completed.

The LNG carrier newbuildings ordered by the Yamal LNG Joint Venture will be specifically built for the Arctic requirements of the project located on the Yamal Peninsula in Northern Russia (or the Yamal LNG Project) and will have limited redeployment opportunities to operate as conventional trading LNG carriers if the project is abandoned or cancelled. If the project is abandoned or cancelled for any reason, either before or after commencement of operations, the Yamal LNG Joint Venture may be unable to reach an agreement with the shipyard allowing for the termination of the shipbuilding contracts (since no such optional termination right exists under these contracts), change the vessel specifications to reflect those applicable to more conventional LNG carriers and which do not incorporate ice-breaking capabilities, or find suitable alternative employment for the newbuilding vessels on a long-term basis with other LNG projects or otherwise.

The Yamal LNG Project may be abandoned or not completed for various reasons, including, among others:

• failure of the project to obtain debt financing;

• failure to achieve expected operating results;

• changes in demand for LNG;

• adverse changes in Russian regulations or governmental policy relating to the project or the export of LNG;

• technical challenges of completing and operating the complex project, particularly in extreme Arctic conditions;

• labor disputes; and

• environmental regulations or potential claims.

If the project is not completed or is abandoned, proceeds if any, received from limited Yamal LNG project sponsor guarantees and potential alternative employment, if any, of the vessels and from potential sales of components and scrapping of the vessels likely would fall substantially short of the cost of the vessels to the Yamal LNG Joint Venture. Any such shortfall could have a material adverse effect on our financial condition, results of operations and ability to make distributions to us.

Sanctions against key participants in the Yamal LNG Project could impede completion or performance of the Yamal LNG Project, which could have a material adverse effect on us.

The U.S. Treasury Department’s Office of Foreign Assets Control (or OFAC) recently placed Russia-based Novatek OAO (or Novatek), a 60% owner of the Yamal LNG Project, on the Sectoral Sanctions Identifications List. OFAC also previously imposed sanctions on an investor in Novatek, which sanctions remain in effect. The restrictions on Novatek prohibit U.S. persons from participating in debt financing transactions of greater than 90 day maturity by Novatek and, by virtue of Novatek’s 60% ownership interest, the Yamal LNG Project. To the extent the Yamal LNG Project or Novatek are dependent on financing involving participation by U.S. persons, these OFAC actions could have a material adverse effect on the ability of the Yamal LNG Project to be completed or perform as expected. Effective August 1, 2014, the European Union also imposed certain sanctions on Russia. These sanctions require a European Union license or authorization before a party can provide certain technologies or technical assistance, financing, financial assistance, or brokering with regard to these technologies. However, the technologies being currently sanctioned appear to focus on oil exploration projects, not gas projects. Furthermore, OFAC and other governments or organizations may impose additional sanctions on Novatek, the Yamal LNG Project or other project participants, which may further hinder the ability of the Yamal LNG Project to receive necessary financing.

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Although we believe that we are in compliance with all applicable sanctions laws and regulations, and intend to maintain such compliance, these sanctions have recently been imposed and the scope of these laws may be subject to changing interpretation. Future sanctions may prohibit the Yamal LNG Joint Venture from performing under its contracts with the Yamal LNG Project, which could have a material adverse effect on our financial condition, results of operations and ability to make distributions to us.

Failure of the Yamal LNG Project to achieve expected results could lead to a default under the time-charter contracts by the charter party.

The charter party under the Yamal LNG Joint Venture’s time-charter contracts for the Yamal LNG Project is Yamal Trade Pte. Ltd., a wholly-owned subsidiary of Yamal LNG, the project’s sponsor. If the Yamal LNG Project does not achieve expected results, the risk of charter party default may increase. If the charter party defaults on the time-charter contracts, Teekay LNG may be unable to redeploy the vessels under other time-charter contracts or may be forced to scrap the vessels. Any such default could adversely affect Teekay LNG’s results of operations and ability to make distributions to us.

Neither the Yamal LNG Joint Venture nor Teekay LNG’s joint venture partner may be able to obtain financing for the six LNG carrier newbuildings for the Yamal LNG Project.

The Yamal LNG Joint Venture does not have in place financing for the six LNG carrier newbuildings that will service the Yamal LNG Project. The estimated total fully built-up cost for the vessels is approximately $2.1 billion. If the Yamal LNG Joint Venture is unable to obtain debt financing for the vessels on acceptable terms, if at all, or if Teekay LNG’s joint venture partner fails to fund its portion of the newbuilding financing, Teekay LNG may be unable to purchase the vessels and participate in the Yamal LNG Project.

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, 2014, the total outstanding debt under credit facilities with this type of covenant tied to conventional tanker and shuttle tanker values was $457.5 million, tied to FPSO values was $780.0 million and tied to LNG carrier values was $93.6 million. We have six financing arrangements that require us to maintain vessel value to outstanding loan principal balance ratios ranging from 105% to 130%. At December 31, 2014, 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, 2014, our consolidated debt and capital lease obligations totaled $6.8 billion and we had the capacity to borrow an additional $0.6 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 shareholders;

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• 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 dividends/cash distributions;

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

• selling assets.

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 certain of its joint ventures are party and were party to lease arrangements whereby the lessor could claim 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 (U.K.) taxing authority, the lessor is entitled to increase the rentals so as to maintain its agreed after-tax margin. Under the capital lease arrangements, Teekay LNG does not have the ability to pass these increased rentals onto its charter party. However, the terms of the lease arrangements enable Teekay LNG and its joint venture partner to jointly 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 is 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.

Teekay LNG and its joint venture partner were the lessee under three separate 30-year capital lease arrangements (or the RasGas II Leases) with a third party for three LNG carriers (or the RasGas II LNG Carriers). On December 22, 2014, Teekay LNG and its joint venture partner voluntarily terminated the leasing of the RasGas II LNG Carriers. However, Teekay Nakilat Corporation (or the Teekay Nakilat Joint Venture), of which Teekay LNG owns a 70% interest, remains obligated to the lessor under the RasGas II Leases to maintain the lessor’s agreed after-tax margin from the commencement of the lease to the lease termination date.

The UK taxing authority (or HMRC) has been challenging the use of similar lease structures. One of those challenges resulted in a court decision from the First Tribunal on January 2012 regarding a similar financial lease of an LNG carrier that ruled in favor of the taxpayer, as well as a 2013 decision from the Upper Tribunal that upheld the 2012 verdict.

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However, HMRC appealed the 2013 decision to the Court of Appeal and in August 2014, HMRC was successful in having the judgment of the First Tribunal (in favor of the taxpayer) set aside. The matter will now be reconsidered by the First Tribunal, taking into account the appellate court’s comments on the earlier judgment. If the lessor of the RasGas II LNG Carriers were to lose on a similar claim from HMRC, which we do not consider to be a probable outcome, Teekay LNG’s 70% share of the potential exposure in the Teekay Nakilat Joint Venture is estimated to be approximately $60 million. Such estimate is primarily based on information received from the lessor.

In addition, Teekay LNG’s subsidiaries of another joint venture formed to service the Tangguh LNG project in Indonesia have lease arrangements with a third party for two LNG carriers. The terms of the lease arrangements provide similar tax and change of law risk assumption by this joint venture as Teekay LNG had with the three RasGas II LNG Carriers.

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.

We depend on certain joint venture partners to assist us in operating our businesses and competing in our markets.

Our ability to compete for offshore oil marine transportation, processing, floating accommodation, towage and storage projects and to enter into new charters or contracts of affreightment and expand our customer relationships depends largely on our ability to leverage our relationship with our joint venture partners and their reputation and relationships in the shipping industry. If our joint venture partners suffer material damage to its reputation or relationships, it may harm the ability of us or our subsidiaries to:

• renew existing charters and contracts of affreightment upon their expiration;

• obtain new charters and contracts of affreightment;

• successfully interact with shipyards during periods of shipyard construction constraints;

• obtain financing on commercially acceptable terms; or

• maintain satisfactory relationships with suppliers and other third parties.

If our or our subsidiaries’ ability to do any of the things described above is impaired, it could have a material adverse effect on our business, results of operations and financial condition and our ability to make cash distributions.

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. shareholders.

A non-U.S. entity treated as a corporation for U.S. federal income tax purposes will be treated as a “passive foreign investment company” (or PFIC) for such purposes in any taxable year for which either (a) at least 75% of its gross income consists of “passive income” or (b) at least 50% of the average value of the entity’s assets is attributable to assets that produce or are held for the production of “passive income.” For purposes of these tests, “passive income” includes dividends, interest, 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 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 the current composition of our assets and operations (and those of our subsidiaries), we intend to take the position that we are not now and have never been a PFIC. No assurance can be given, however, that this position would be sustained by a court if contested by the IRS 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.

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If the IRS were to determine that we are or have been a PFIC for any taxable year during which a U.S. Holder (as defined below under “Item 10-Additional Information – Material U.S. Federal Income Tax Considerations”) held our common stock, such U.S. Holder would face adverse U.S. federal income tax consequences. For a more comprehensive discussion regarding our status as a PFIC and the tax consequences to U.S. Holders, 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 the continuation of our conventional tanker business through our publicly-listed subsidiary Teekay Tankers Ltd. (NYSE: TNK) (or Teekay Tankers). We are responsible for managing and operating consolidated assets of approximately $12 billion, comprised of approximately 200 liquefied gas, offshore, and conventional tanker assets (excluding vessels managed for third parties). With offices in 15 countries and approximately 6,900 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 organizational structure can be divided into (a) our controlling interests in our publicly-listed subsidiaries, Teekay Offshore, Teekay LNG and Teekay Tankers (or the Daughter Companies), and (b) Teekay and its remaining subsidiaries, which is referred to herein as Teekay Parent.

Teekay Offshore includes our shuttle tanker operations, floating storage and off-take (or FSO) units, one HiLoad DP unit, a majority of our floating production, storage and offloading (or FPSO) units, and offshore support which includes floating accommodation units (or FAUs), all of which primarily operate under long-term fixed-rate contracts, and long-distance towing and offshore installation vessels. As of December 31, 2014, our shuttle tanker fleet had a total cargo capacity of approximately 4.1 million deadweight tonnes (or dwt), which represented approximately 42% of the total tonnage of the world shuttle tanker fleet. Please read “—B. Operations—Our Fleet.”

Teekay LNG includes all of our LNG and LPG carriers. LNG carriers are usually chartered to carry LNG pursuant to time-charter contracts, where a vessel is hired for a fixed period of time. LPG carriers are mainly chartered to carry LPG on time-charters, on contracts of affreightment or spot voyage charters. As of December 31, 2014, Teekay LNG’s fleet, including newbuildings on order, had a total cargo carrying capacity of approximately 8.6 million cubic meters. Please read “—B. Operations—Our Fleet.”

Teekay Tankers, including Teekay Tanker’s minority investment in Tanker Investments Ltd. (or TIL), includes a substantial majority of our conventional crude oil tankers and product carriers. Our conventional crude oil tankers and product tankers primarily operate in the spot-tanker market or are 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. Certain of our conventional crude oil tankers and product tankers are on fixed-rate time-charter contracts with an initial duration of at least one year. Our conventional Aframax, Suezmax, and large and medium product tankers are among the vessels included in Teekay Tankers. Please read “—B. Operations—Our Fleet.”

Teekay Parent currently owns one conventional tanker and four FPSO units. Our long-term vision is for Teekay Parent not to have a direct ownership in any vessels.

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.

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Recent Business Acquisitions

Acquisition of Logitel

In August 2014, Teekay Offshore acquired Logitel Offshore Holdings Ltd. (or Logitel), a Norway-based company focused on the high-end floating accommodation market. Logitel is currently constructing three newbuilding floating accommodation units (or FAUs), based on the Sevan Marine ASA (or Sevan) cylindrical hull design, at the COSCO (Nantong) Shipyard (or COSCO) in China for an estimated fully built-up cost of approximately $588 million, including $30.0 million from our assumption of Logitel’s obligations under a bond agreement from Sevan. Teekay Offshore also received options to order up to an additional five FAUs. Prior to the acquisition, Logitel secured a three-year fixed-rate charter contract, plus extension options, with Petrobras in Brazil for the first FAU, which delivered in February 2015. The FAU is expected to commence its charter with Petrobras during the second quarter of 2015. Teekay Offshore expects to secure charter contracts for the remaining two newbuilding FAUs prior to their respective scheduled deliveries in the first and fourth quarters of 2016. Teekay Offshore has the option to defer the delivery of the remaining two newbuilding FAUs by up to one year. Teekay Offshore intends to finance the initial newbuilding payments through its existing liquidity and expects to secure long-term debt financing for the units prior to their scheduled deliveries.

Yamal LNG Joint Venture

In July 2014, Teekay LNG, through a new 50/50 joint venture (or the Yamal LNG Joint Venture) with China LNG Shipping (Holdings) Limited (or China LNG), finalized shipbuilding contracts for six internationally-flagged icebreaker LNG carriers for the Yamal LNG Project. The Yamal LNG Project is a joint venture between Russia-based Novatek OAO (60%), France-based Total S.A. (20%) and China-based China National Petroleum Corporation (or CNPC) (20%) and will consist of three LNG trains with a total expected capacity of 16.5 million metric tons of LNG per annum and is currently scheduled to start-up in early-2018. The Yamal LNG Joint Venture will build six 172,000-cubic meter ARC7 LNG carrier newbuildings to be constructed by DSME for a total fully built-up cost of approximately $2.1 billion. The vessels, which will be constructed with maximum 2.1 meter icebreaking capabilities in both the forward and reverse directions, are scheduled to deliver at various times between the first quarter of 2018 and first quarter of 2020. Upon their deliveries, the six LNG carriers will each operate under fixed-rate time-charter contracts with Yamal Trade Pte. Ltd. until December 31, 2045, plus extension options. The six LNG carriers being constructed for the Yamal LNG Project will transport LNG from Northern Russia to Europe and Asia. Teekay LNG accounts for its investment in the Yamal LNG Joint Venture using the equity method.

BG Joint Venture

In June 2014, Teekay LNG acquired from BG International Limited (or BG) its ownership interest in four 174,000-cubic meter Tri-Fuel Diesel Electric LNG carrier newbuildings, which will be constructed by Hudong-Zhonghua Shipbuilding (Group) Co., Ltd. in China for an estimated total fully built-up cost to the joint venture of approximately $1.0 billion. The vessels upon delivery, which are scheduled to deliver between September 2017 and January 2019, will each operate under 20-year fixed-rate time-charter contracts, plus extension options, with Methane Services Limited, a wholly-owned subsidiary of BG. As compensation for BG’s ownership interest in these four LNG carrier newbuildings, Teekay LNG assumed BG’s portion of the shipbuilding installments and its obligation to provide the shipbuilding supervision and crew training services for the four LNG carrier newbuildings up to their delivery date pursuant to a ship construction support agreement. We on behalf of Teekay LNG, will provide the shipbuilding supervision and crew training services for the four LNG carrier newbuildings up to their delivery dates. Teekay LNG estimates that it will incur approximately $38.7 million of costs to provide these services, of which BG has agreed to pay a fixed amount of $20.3 million. Through this transaction, Teekay LNG has a 30% ownership interest in two LNG carrier newbuildings, with the balance of the ownership held by China LNG and CETS Investment Management (HK) Co. Ltd. (or CETS) (an affiliate of China National Offshore Oil Corporation), and a 20% ownership interest in the remaining two LNG carrier newbuildings, with the balance of the ownership held by China LNG, CETS and BW LNG Investments Pte. Ltd. (collectively, the BG Joint Venture). Teekay LNG accounts for its investment in the BG Joint Venture using the equity method. Teekay LNG expects to finance its pro rata equity interest in future shipyard installment payments using a portion of its available liquidity, with the balance of the total cost of the vessels financed with equity contributions by the other partners and a $787.0 million long-term debt facility secured by the BG Joint Venture.

ALP Acquisition and Newbuilding Order

In March 2014, Teekay Offshore acquired ALP Maritime Services B.V. (or ALP), a Netherlands-based provider of long-distance ocean towage and offshore installation services to the global offshore oil and gas industry. As part of the transaction, Teekay Offshore and ALP entered into an agreement with Niigata Shipbuilding & Repair of Japan for the construction of four state-of-the-art SX-157 Ulstein Design ultra-long-distance towing and offshore installation vessel newbuildings, which will be equipped with dynamic positioning (or DP) capability, for a fully built-up cost of approximately $258 million. Teekay Offshore intends to continue financing the newbuilding installments through its existing liquidity and expects to secure long-term debt financing for these vessels prior to their scheduled deliveries in 2016. In October 2014, Teekay Offshore through ALP, agreed to acquire six modern on-the-water long-distance towing and offshore installation vessels for approximately $220 million. The vessels were built between 2006 and 2010 and are all equipped with DP capabilities. Teekay Offshore took delivery of four vessels in early-2015 and expects to take delivery of the remaining two vessels during the second quarter of 2015. Including these vessels, along with ALP’s four state-of-the-art long-distance towing and offshore installation vessel newbuildings scheduled to deliver in 2016, ALP will become the world’s largest owner and operator of DP towing vessels. All ten vessels will be capable of long-distance towing and offshore unit installation and decommissioning of large floating exploration, production and storage units. The acquisition of ALP, the related newbuilding orders and on the water assets represents Teekay Offshore’s entrance into the long-distance ocean towage and offshore installation services business. Teekay Offshore believes that the combination of its infrastructure and access to capital with ALP’s experienced management team in this market will enable Teekay Offshore to further grow this niche business, which is a natural complement to its existing offshore business.

Please read “Item 5. Operating and Financial Review and Prospects—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Recent Developments and Results of Operations” for more information.

Recent Equity Offerings and Transactions by Subsidiaries

Equity Offerings and Transactions by Teekay Tankers

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.

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During August 2014, Teekay Tankers purchased from Teekay a 50% interest in Teekay Tanker Operations Ltd. (TTOL), which owns conventional tanker commercial management and technical management operations, including the direct ownership in three commercially managed tanker pools, for an aggregate price of approximately $23.5 million, including net working capital. As consideration for this acquisition, Teekay Tankers issued to Teekay 4.2 million Class B common shares. The 4.2 million Class B common shares had an approximate value of $15.6 million, or $3.70 per share, when the purchase price was agreed to between the parties and a value of $17.0 million, or $4.03 per share, on the acquisition closing date. The purchase price, for accounting purposes, is based upon the value of the Class B common shares on the acquisition closing date.

During December 2014, Teekay Tankers issued 20.0 million shares of Class A common stock in a public offering and 4.2 million common shares of Class A common stock in a concurrent private placement with Teekay, in each case at a price of $4.80 per share for proceeds of $116.0 million (net proceeds of $111.2 million). In connection with this offering, Teekay Tankers granted its underwriters a 30-day option to purchase up to an additional 3 million shares of Class A common stock. The underwriters exercised this option in late-December 2014 and on January 2, 2015, Teekay Tankers issued a further 3 million shares of Class A common stock for gross proceeds of $14.4 million (net proceeds of $13.7 million). The proceeds from the issuance were used to acquire modern second hand tankers and for general corporate purposes.

Our ownership of Teekay Tankers was 25.5% as of March 1, 2015. 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

During July 2012, Teekay Offshore issued approximately 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 four Suezmax newbuilding shuttle tankers.

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.

During April 2013, Teekay Offshore issued approximately 2.1 million common units in a private placement to an institutional investor for net proceeds of approximately $61.2 million (including Teekay Offshore’s general partner’s proportionate capital contribution). Teekay Offshore used the net proceeds from the sale of the common units to partially fund the acquisition of four Suezmax newbuilding shuttle tankers and for general partnership purposes.

During April 2013, Teekay Offshore issued 6.0 million 7.25% Series A Cumulative Redeemable Preferred Units in a public offering, for net proceeds of approximately $144.8 million. Teekay Offshore used a portion of the net proceeds from the public offering to prepay a portion of its outstanding debt under three of its revolving credit facilities and to partially finance the purchase from us of the Voyageur Spirit FPSO unit and its interest in the Cidade de Itajai FPSO unit, and used the remainder for general partnership purposes.

During May 2013, Teekay Offshore implemented a continuous offering program (or COP), under which Teekay Offshore may issue new common units from time to time at market prices up to a maximum aggregate amount of $100 million. Through December 31, 2013, Teekay Offshore sold an aggregate of 85,508 common units under the COP, generating net proceeds of approximately $2.4 million (including Teekay Offshore’s general partner’s 2% proportionate capital contribution and net of approximately $0.4 million of offering costs). The net proceeds from the issuance of these common units were used for general partnership purposes.

During December 2013, Teekay Offshore issued approximately 1.75 million common units in a private placement to an institutional investor for net proceeds of $54.4 million (including Teekay Offshore’s general partner’s proportionate capital contribution). Teekay Offshore used the net proceeds from the issuance of these common units for general partnership purposes.

During May 2014, Teekay Offshore issued $300 million in new senior unsecured non-rated bonds in the United States which mature in January 2019. The bonds are listed on the New York Stock Exchange and bear interest at a fixed rate of 6.0%. Teekay Offshore used the net proceeds of $293.5 million from the bond offering for general partnership purposes.

During November 2014, Teekay Offshore issued 6.7 million common units to a group of institutional investors, generating net proceeds of $178.5 million (including Teekay Offshore’s general partner’s 2% proportionate capital contribution). The net proceeds from the issuance of these common units were used for general partnership purposes, which include funding vessel conversion projects and financing newbuilding FAUs and towage vessels.

During 2014, Teekay Offshore sold an aggregate of 0.2 million common units under the COP, generating net proceeds of approximately $7.6 million (including Teekay Offshore’s general partner’s 2% proportionate capital contribution and net of offering costs). The net proceeds from the issuance of these common units were used for general partnership purposes.

Our ownership of Teekay Offshore was 27.3% (including our 2% general partner interest) as of March 1, 2015. 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 February 2012, Teekay LNG and Marubeni Corporation (or Marubeni) acquired, through their joint venture (or the Teekay LNG-Marubeni Joint Venture), a 100% interest in 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. 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.

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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.

During May 2013, Teekay LNG implemented a COP under which Teekay LNG may issue new common units from time to time at market prices up to a maximum aggregate amount of $100 million. Through December 31, 2013, Teekay LNG sold an aggregate of 124,071 common units under the COP, generating proceeds of approximately $4.9 million (including Teekay LNG’s general partner’s 2% proportionate capital contribution of $0.1 million and net of approximately $0.1 million of commissions and $0.4 million of other offering costs). Teekay LNG used the net proceeds from the issuance of these common units for general partnership purposes.

During July 2013, Teekay LNG issued approximately 0.9 million common units in a private placement to an institutional investor for net proceeds (including Teekay LNG’s general partner’s 2% proportionate capital contribution) of $40.8 million. Teekay LNG used the proceeds from the private placement to fund the first installment payments on two newbuilding LNG carriers ordered in July 2013 and for general partnership purposes.

During October 2013, Teekay LNG completed a public offering of 3.5 million common units (including 0.45 million common units issued upon exercise of the underwriters’ over-allotment option) at a price of $42.62 per unit, for gross proceeds of approximately $150.0 million (including Teekay LNG’s general partner’s 2% proportionate capital contribution). Teekay LNG used the net proceeds from the offering of approximately $144.8 million to prepay a portion of its outstanding debt under two of its revolving credit facilities and to fund the acquisition of the second LNG carrier newbuilding from Awilco LNG ASA.

During July 2014, Teekay LNG completed a public offering of 3.1 million common units (including 0.3 million common units issued upon exercise of the underwriters’ over-allotment option) at a price of $44.65 per unit, for gross proceeds of approximately $140.8 million (including Teekay LNG’s general partner’s 2% proportionate capital contribution). Teekay LNG used the net proceeds from the offering of approximately $140.5 million to prepay a portion of its outstanding debt under two of its revolving credit facilities, to fund its portion of the first installment payment of $95.3 million for six newbuilding LNG carriers ordered by its 50/50 joint venture with China LNG for the Yamal LNG Project and to fund a portion of its M-type, Electronically Controlled, Gas Injection (or MEGI) newbuildings’ shipyard installments.

During 2014, Teekay LNG sold an aggregate of approximately 1.2 million common units under its COP for net proceeds of $48.4 million (including Teekay LNG’s general partner’s 2% proportionate capital contribution and net of offering costs). Teekay LNG received a portion of these proceeds ($6.8 million for 0.2 million common units) in January 2015.

Our ownership of Teekay LNG was 33.5% (including our 2% general partner interest) as of March 1, 2015. 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— Recent Developments and Results of Operations” for more information on recent transactions.

B. Operations

We have four primary lines of business, which consist of offshore logistics (shuttle tankers, FSO units, FAUs, long-distance towing and offshore installation vessels and the HiLoad unit), offshore production (FPSO units), liquefied gas carriers and conventional tankers. The allocation of capital and assessment of performance of our assets is done first from the perspective of these lines of business which are operated by our internal business units. We manage these businesses for the benefit of all stakeholders. Consequently, our financial statement segments are based upon these four primary lines of business, which is consistent with our internal organizational structure. However, we also allocate capital and assess performance from the separate perspectives of Teekay LNG, Teekay Offshore and Teekay Tankers (collectively, the Daughter Companies) and Teekay Parent, which includes Teekay and its remaining subsidiaries. A substantial majority of the information provided herein has been broken down primarily from the perspective of the Daughter Companies and Teekay Parent, and secondly from the four lines of business. While our internal organizational structure is not fully based on the Daughter Companies and Teekay Parent, we believe this is the best way for Teekay’s shareholders and bondholders to understand our operations, particularly given that a substantial majority of our assets are owned by the Daughter Companies.

Teekay Offshore – Offshore Logistics

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.

Teekay Offshore’s 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 Teekay Offshore commits 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.

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As of December 31, 2014, there were approximately 105 vessels in the world shuttle tanker fleet (including 19 newbuildings), the majority of which operate in the North Sea. Shuttle tankers also operate in Africa, Brazil, Canada, Russia and the United States Gulf of Mexico. As of December 31, 2014, Teekay Offshore had ownership interests in 31 shuttle tankers and chartered-in an additional two shuttle tankers. Other shuttle tanker owners include Knutsen NYK Offshore Tankers AS, Transpetro, Sovcomflot, Viken Shipping, AET and Tsakos Energy Navigation, which, as of December 31, 2014, controlled smaller fleets of 3 to 30 shuttle tankers each. We believe that we have certain 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.

Teekay Offshore’s 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 Teekay Offshore. 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, 2014, there were approximately 94 FSO units operating and eight FSO units on order in the world fleet. As at December 31, 2014, Teekay Offshore had ownership interests in six FSO units. The major markets for FSO units are South East Asia, West Africa, Northern Europe, the Mediterranean and South West Asia/the Middle East. 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.

Towage Vessels

Long-distance towing and offshore installation vessels are used for the towing, station-keeping, installation and decommissioning of large floating objects, such as exploration, production and storage units, including FPSO units, floating liquefied natural gas (or FLNG) units and floating drill rigs. We operate with high-end vessels which can be defined as long-distance towing and offshore installation vessels with a bollard pull of greater than 180 tonnes and a fuel capacity of more than 2,000 metric tonnes. Our focus is on intercontinental towages requiring trans-ocean movements.

Teekay Offshore is the sole provider of long-distance towing and offshore installation vessels with DP2 capability. We expect that Teekay Offshore’s towage vessels will operate on time-charter or voyage-charter towage contracts when they deliver. We expect that such voyage-charter contracts will offer more stable charter rates than sport-market rates, as project budgets are prepared and maintained well in advance of the contract commencement.

As of December 31, 2014, there were approximately 33 long-distance towage vessels operating and four long-distance towage vessels on order in the world fleet, in which Teekay Offshore has 100% ownership interests in ten vessels (including four newbuildings scheduled to deliver throughout 2016, four vessels which delivered in the first and early in the second quarter of 2015 and two vessels expected to deliver during the rest of the second quarter of 2015). The average life expectancy of towage vessels is 25 to 30 years.

FAUs

Floating accommodation units are used primarily for offshore accommodation, storage and support for maintenance and modification projects on existing offshore installations, or during the installation and decommissioning of large floating exploration, production and storage units, including FPSO units, FLNG units and floating drill rigs. Teekay Offshore’s FAUs are available for world-wide operations, excluding operations within the Norwegian Continental Shelf, and include DP3 keeping systems that are capable of operating in deep water and harsh weather.

One of Teekay Offshore’s FAUs is subject to a mid-term, fixed-rate time-charter contract.

As of December 31, 2014, there were approximately 30 DP FAUs operating and 18 units on order in the world fleet, and we had three units (consisting of one unit which delivered in February 2015 and two newbuilding units scheduled for delivery in 2016), in which Teekay Offshore has 100% ownership interests.

Teekay Offshore – Offshore Production

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.

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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. 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 N.V., BW Offshore, MODEC, Bluewater and Bumi Armada. As of December 2014, there were approximately 167 FPSO units operating and 35 FPSO units on order in the world fleet. At December 31, 2014, Teekay Offshore had ownership interests in seven FPSO units (including one unit under conversion and one unit undergoing an upgrade).

Teekay LNG

The vessels in Teekay LNG primarily compete in the LNG and LPG markets. LNG carriers are usually chartered to carry LNG pursuant to time-charter contracts, where a vessel is hired for a fixed period of time 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, Teekay LNG competes 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 include Qatar Gas Transport (Nakilat), Maran Gas Maritime, GasLog, Mitsui O.S.K. Lines, Malaysian International Shipping Company, NYK Line, and Golar LNG.

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, 2014, there were approximately 415 vessels in the worldwide LNG fleet, with an average age of approximately 10 years, and an additional 160 LNG carriers under construction or on order for delivery through 2019. As of December 31, 2014, the worldwide LPG tanker fleet consisted of approximately 1,277 vessels with an average age of approximately 16 years and approximately 232 additional LPG vessels were on order for delivery through 2018. LPG carriers range in size from approximately 250 to approximately 85,000 cubic meters (or cbm). Approximately 50% (in terms of vessel numbers) of the worldwide fleet is less than 5,000 cbm.

Teekay LNG includes substantially all of our LNG and LPG carriers. As at December 31, 2014, Teekay LNG had ownership interests in 29 LNG carriers, as well as 18 additional newbuilding LNG carriers on order. In addition, as at December 31, 2014, Teekay LNG had full ownership of seven LPG carriers and part ownership, through its joint venture agreement with Exmar, in another 11 LPG carriers, nine newbuilding LPG carriers on order, and three chartered-in LPG carriers.

Teekay Tankers

Teekay Tankers includes a substantial majority of our conventional crude oil tankers and product carriers. Our conventional crude oil tankers and product tankers primarily operate in the spot-tanker market or are 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. Certain of our conventional crude oil tankers and product tankers are on fixed-rate time-charter contracts with an initial duration of at least one year. Teekay Tankers and we also have minority interests in Tanker Investments Ltd. (or TIL), which owns conventional and product tankers.

The vessels in Teekay Tankers 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.

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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.

Teekay Tankers competes 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.

Most of Teekay Tankers’ conventional tankers operate pursuant to pooling or revenue sharing commercial management arrangements. Under such arrangements, 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 or revenue sharing commercial management arrangement, less related voyage expenses (such as fuel and port charges) and administrative expenses, are pooled and allocated to the vessel owners according to a pre-determined formula. As of December 31, 2014, Teekay Tankers participated in three main pooling or revenue sharing commercial management arrangements. These include an Aframax tanker revenue sharing commercial management arrangement (or the Aframax RSA), an LR2 tanker pool (or the Taurus Pool), and a Suezmax tanker pool (or the Gemini Pool). As of December 31, 2014, 11 of Teekay Tankers’ Aframax tankers operated in the Aframax RSA, seven of Teekay Tankers’ LR2 tankers operated in the Taurus Pool, and 10 of Teekay Tankers’ Suezmax tankers operated in the Gemini Pool. Each of these pools or revenue sharing commercial management arrangements is either solely or jointly managed by us.

Teekay Tankers’ 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, 2014, our Aframax tanker fleet (excluding Aframax-size shuttle tankers and newbuildings) had an average age of approximately 8.5 years and our Suezmax tanker fleet (excluding Suezmax-size shuttle tankers and newbuildings) had an average age of approximately 8.2 years. This compares to an average age for the world oil tanker fleet of approximately 9.4 years, for the world Aframax tanker fleet of approximately 9.2 years and for the world Suezmax tanker fleet of approximately 8.7 years.

As of December 31, 2014, other large operators of Aframax tonnage (including newbuildings on order) included Malaysian International Shipping Corporation (approximately 48 Aframax vessels), Sovcomflot (approximately 42 vessels), the Navig8 Pool (approximately 26 vessels), and the Sigma Pool (approximately 26 vessels). Other large operators of Suezmax tonnage (including newbuildings on order) as of December 31, 2014 included the Stena Sonangol Pool (approximately 22 vessels), Nordic American Tankers (approximately 24 vessels), the Blue Fin Pool (approximately 19 vessels), Euronav (approximately 23 vessels), Scorpio (approximately 23 vessels), and Sovcomflot (approximately 16 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.

Teekay Parent

Teekay Parent continues to own four FPSO units and one conventional tanker and also in-charters a number of vessels. However, our long-term vision is for Teekay Parent to be primarily a general partner whose role is that of portfolio manager and project developer. Our primary financial objective for Teekay Parent is to increase its free cash flow per share. To support this objective, we intend to de-lever the balance sheet of Teekay Parent by completing the sales of the remaining FPSOs to Teekay Offshore or third parties over the next several years and to seek to grow the distributions of Teekay Offshore and Teekay LNG. Consequently, we expect the Daughter Companies will ultimately hold all of the direct ownership interests in our operating assets and that each of these entities will directly pursue their own merger and acquisition and organic growth opportunities.

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Our Consolidated Fleet

As at December 31, 2014, our consolidated fleet (excluding vessels managed for third parties) consisted of 196 vessels, including chartered-in vessels and newbuildings/conversions on order. The following table summarizes our fleet as at December 31, 2014:

	Owned Vessels			Chartered-in Vessels		Newbuildings / Conversions			Total
Teekay Offshore
Shuttle Tankers		31	(1)		2		—			33
HiLoad Dynamic Positioning Unit		1			—		—			1
FSO Units		6			—		—			6
FPSO Units		5	(2)		—		2	(3)		7
Floating Accomodation Units		—			—		3			3
Towage Vessels		6	(4)		—		4			10
Conventional Tankers
Aframax Tankers		4			—		—			4
		53			2		9			64
Teekay LNG
Gas
LNG		29	(5)		—		18	(6)		47
LPG/Multigas		18	(7)		3		9	(8)		30
Suezmax Tankers		7			—		—			7
Product Tanker		1			—		—			1
		55			3		27			85
Teekay Tankers
Conventional Tankers
Aframax Tankers		11			8		—			19
Suezmax Tankers		10			—		—			10
VLCC		1	(9)		—		—			1
Product Tankers		6			4		—			10
		28			12		—			40
Teekay Parent (10)
FPSO		4			—					4
Conventional Tankers
Aframax Tankers		—			2		—			2
VLCC		1			—		—			1
		5			2		—			7
Total		141			19		36			196

(1) Includes six shuttle tankers 50% owned and two shuttle tankers 67% owned by Teekay Offshore.

(2) Includes one FPSO unit 50% owned by Teekay Offshore.

(3) Includes one FPSO unit newbuilding 50% owned by Teekay Offshore.

(4) Includes three vessels which delivered in early-2015 and three vessels expected to deliver during the second quarter of 2015.

(5) Includes a 52% interest in six LNG carriers, a 50% interest in two LNG carriers, a 40% interest in four LNG carriers, and a 33% interest in four LNG carriers owned by Teekay LNG.

(6) Includes a 50% interest in six LNG newbuildings, a 30% interest in two LNG newbuildings, and a 20% interest in two LNG newbuildings.

(7) Includes 11 LPG carriers 50% owned by Teekay LNG.

(8) Includes nine LPG newbuildings 50% owned by Teekay LNG.

(9) Includes one VLCC 50% owned by Teekay Tankers.

(10) Excludes two LNG carriers chartered from Teekay LNG, and two shuttle tankers, three FSO units, and four Aframax tankers chartered from Teekay Offshore.

Our vessels are of Antigua & Barbuda, Bahamian, Belgian, Cyprus, Danish, Hong Kong, Indian, Isle of Man, Italian, Liberian, Marshall Islands, Norwegian, Panama, 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, 2014, we had eight LNG carriers, three FAUs and four long-distance towing and offshore installation vessels on order, one FSO conversion and one FPSO undergoing an upgrade. In addition, we had a 50% interest in one FPSO under conversion, a 50% interest in six LNG newbuilding orders, a 30% interest in two LNG newbuilding orders, a 20% interest in two LNG newbuilding orders, and a 50% interest in nine LPG newbuilding orders. 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(c)—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.

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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, Occupational Health and Safety Advisory Services (or OHSAS) 18001 and the new Maritime Labour Convention 2006 (MLC 2006) that became enforceable on August 20, 2013. 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.

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 those regions, 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 certain regions 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 regions where we operate could affect our trade patterns, increase insurance costs, increase tanker operational costs and otherwise adversely affect our operations and performance.

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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. Three customers, international oil companies, accounted for a total of 33%, or $664.1 million, of our consolidated revenues during 2014 (2013 - three customers for 37% or $677.3 million, 2012 - two customers for 30% or $588.4 million). No other customer accounted for more than 10% of our consolidated revenues during 2014, 2013 or 2012. 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 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 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.

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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 in accordance with the requirements set out in these regulations, or be of another approved design ensuring the same level of protection against oil pollution. All of our tankers are double hulled.

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 the equipment required for commercial vessels and includes regulations for their 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. A revised and updated IGC Code, to take account of advances in science and technology, was adopted by the IMO’s Maritime Safety Committee (or MSC) on May 22, 2014. It is to enter into force on January 1, 2016 with an implementation/application date of July 1, 2016.

Annex VI to the IMO’s International Convention for the Prevention of Pollution from Ships (MARPOL)(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 (by the adoption in 2004 of the International Convention for the Control and Management of Ships’ Ballast Water and Sediments (or the Ballast Water Convention)) that all tankers of the size we operate that were built starting in 2012 contain ballast water treatment systems to comply with the ballast water performance standard specified in the Ballast Water Convention, and that all other similarly sized tankers install water ballast treatment systems in order to comply with the ballast water performance standard from 2016. In the latter case, compliance is required not later than by the first intermediate or renewal survey in relation to the International Ballast Water Management Certificate, whichever occurs first, after the anniversary date of delivery of the relevant vessel in the year of compliance with the applicable standard. This convention has not yet entered into force, 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.

The IMO has also developed an International Code for Ships Operating in Polar Waters (or Polar Code) which deals with matters regarding design, construction, equipment, operation, search and rescue and environmental protection in relation to ships operating in waters surrounding the two poles. The Polar Code includes both safety and environmental provisions and will be mandatory, with the safety provisions becoming part of SOLAS and the environmental provisions becoming part of MARPOL. In November 2014 the IMO’s MSC adopted the Polar Code and the related amendments to SOLAS in relation to safety, whilst the IMO’s Marine Environment Protection Committee (or MEPC) is expected to adopt the environmental provisions of the Polar Code and associated amendments to MARPOL at its next session in 2015. Once adopted, the Polar Code is to enter into force on January 1, 2017.

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 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.

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The EU has also adopted legislation (Directive 2009/16/EC on Port State Control as subsequently amended) 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 minimum percentages 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 (Directive 2009/15/EC as amended by Directive 2014/111/EU of December 17, 2014).

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% (while within EU member states’ territorial seas, exclusive economic zones and pollution control zones that are included in SOx Emission Control Areas). 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 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 ECAs) 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 1.00%. Other established ECAs under Annex VI to MARPOL are the North American ECA and the United States Caribbean Sea ECA. 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.

The EU has recently adopted Regulation (EU) No 1257/2013 which imposes rules regarding ship recycling and management of hazardous materials on vessels. The Regulation sets out requirements for the recycling of vessels in an environmentally sound manner at approved recycling facilities, so as to minimize the adverse effects of recycling on human health and the environment. The Regulation also contains rules to control and properly manage hazardous materials on vessels and prohibits or restricts the installation or use of certain hazardous materials on vessels. The Regulation aims at facilitating the ratification of the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships adopted by the IMO in 2009 (which has not entered into force). It applies to vessels flying the flag of a Member State. In addition, certain of its provisions also apply to vessels flying the flag of a third country calling at a port or anchorage of a Member State. For example, when calling at a port or anchorage of a Member State, the vessels flying the flag of a third country will be required, amongst other things, to have on board an inventory of hazardous materials which complies with the requirements of the Regulation and to be able to submit to the relevant authorities of that Member State a copy of a statement of compliance issued by the relevant authorities of the country of their flag and verifying the inventory. The Regulation is to apply not earlier than December 31, 2015 and not later than December 31, 2018, although certain of its provisions are applicable from December 31, 2014 and certain others are to apply from December 31, 2020.

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.

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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.

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 incorporates Coast Guard requirements for ballast water exchange and includes specific technology-based requirements for vessels, and includes an 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. Several U.S. states have added specific requirements to the Vessel General Permit and, in some cases, may require vessels to install ballast water treatment technology to meet biological performance standards.

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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. In July 2011 the IMO adopted regulations imposing technical and operational measures for the reduction of greenhouse gas emissions. These new regulations formed a new chapter in Annex VI and became effective on January 1, 2013. The new technical and operational measures include the “Energy Efficiency Design Index,” which is mandatory for newbuilding vessels, and the “Ship Energy Efficiency Management Plan,” which is mandatory for all vessels. In addition, 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. In October 2014, the IMO’s MEPC agreed in principle to develop a system of data collection regarding fuel consumption of ships. 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. The EU is currently considering a proposal for a regulation establishing a system of monitoring, reporting and verification of greenhouse gas shipping emissions (or MRV system). The proposed MRV system may be the precursor to a market-based mechanism to be adopted in the future. 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.

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, 2015. Please read Exhibit 8.1 to this Annual Report for a list of our significant subsidiaries as at March 1, 2015.

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(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 52.9%.

(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, 2014, Teekay LNG’s fleet included 47 LNG carriers (including 27 newbuildings), 30 LPG/multigas carriers (including 9 newbuildings), seven conventional tankers and one product tanker. Teekay LNG’s ownership interests in these vessels range from 20% 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, 2014, Teekay Offshore’s fleet included 33 shuttle tankers (including two chartered-in vessels), one HiLoad DP unit, six FSO units, seven FPSO units (including one unit under conversion and one unit undergoing an upgrade), three newbuilding FAUs, ten towage vessels (including four newbuildling), four conventional Aframax tankers. 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 own our conventional tanker business. As of December 31, 2014, Teekay Tankers’ fleet included 11 double-hull Aframax tankers, ten double-hull Suezmax tankers, six product tankers, one VLCC, eight in-chartered Aframax and four in-chartered product tankers, 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 and the in-chartered vessels. 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.

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 through June 2015.

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D. Properties

Other than our vessels, we do not have any material property. Please read “Item 18. Financial Statements: Note 8—Long-Term Debt” for information about major encumbrances against our vessels.

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 is a discussion of the expected material U.S. federal income tax considerations applicable to us. 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.

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 income from time-charters, contracts of affreightment, bareboat charters, and voyage charters.

Fifty percent (50%) of Transportation Income attributable to transportation that either begins or ends, but that does not both begin and end, in the United States (or U.S. Source International Transportation Income) is considered to be 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) is considered to be 100% derived from sources within the United States. Transportation Income attributable to transportation exclusively between non-U.S. destinations is 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.

Based on our current operations, a substantial portion of our Transportation Income is from sources outside the United States and not subject to U.S. federal income tax. In addition, we believe that we have not earned any U.S. Source Domestic Transportation Income, and we expect 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 and branch profits taxes or the 4% gross basis tax, each of which is 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 (i) is organized in a jurisdiction outside the United States that grants an exemption from tax to U.S. corporations on international Transportation Income (or an Equivalent Exemption), (ii) meets one of three ownership tests (or the Ownership Test) described in the Section 883 Regulations, and (iii) 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 and Branch Profits Taxes. If the Section 883 Exemption does not apply, our U.S. Source International Transportation 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 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.

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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 been 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%) and a 30% branch profits tax imposed under Section 884 of the Code. In addition, 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 generally would be subject to the net basis and branch profits taxes 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 we are not subject to the net basis and branch profits taxes described above, , we would be subject to a 4% U.S. federal income tax on our gross U.S. Source International Transportation Income, without benefit of deductions. For 2014, 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 $1.6 million. In addition, we estimate that certain of our subsidiaries that are unable to claim the Section 883 Exemption were subject to approximately $200,000 in the aggregate of U.S. federal income tax on the U.S. source portion of their U.S. Source International Transportation Income for 2014 and we estimate that these subsidiaries will be subject to approximately $200,000 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, but we do not expect any such tax to be material. 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 an operational leader and project developer in the marine midstream space. We have general partnership interests in two publicly-listed master limited partnerships, Teekay Offshore Partners L.P. (or Teekay Offshore) and Teekay LNG Partners L.P. (or Teekay LNG). In addition, we have a controlling ownership of publicly-listed Teekay Tankers Ltd. (or Teekay Tankers) and a fleet of directly-owned vessels. 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.

Structure

To understand our financial condition and results of operations, a general understanding of our organizational structure is required. Our organizational structure can be divided into (a) our controlling interests in our publicly-listed subsidiaries Teekay Offshore, Teekay LNG and Teekay Tankers (or the Daughter Companies), and (b) Teekay and its remaining subsidiaries, which is referred to herein as Teekay Parent. As of December 31, 2014, we had economic interests in Teekay Offshore, Teekay LNG and Teekay Tankers of 27.3%, 33.5% and 26.2%, respectively. Since we control the voting interests of the Daughter Companies through our ownership of the sole general partner interests of Teekay Offshore and Teekay LNG and of Class A and Class B common shares of Teekay Tankers, we consolidate the results of these subsidiaries. Please read “Item 4C. Information on the Company – Organizational Structure.”

Teekay Offshore and Teekay LNG primarily hold our assets that generate long-term fixed-rate cash flows. The strategic rationale for establishing these two master limited partnerships was to illuminate the 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, to enhance returns to Teekay through fee-based revenue and ownership of the partnerships’ incentive distribution rights and to increase our access to capital for growth. Teekay Tankers holds a substantial majority of our conventional tanker assets. Teekay Parent continues to own four FPSO units and one conventional tanker and to in-charter a number of vessels. However, our long-term vision is for Teekay Parent to be a pure play general partner whose role is that of portfolio manager and project developer. Our primary financial objective for Teekay Parent is to increase its free cash flow per share. To support this objective, we intend to de-lever the balance sheet of Teekay Parent by completing the sales of the remaining FPSO units to Teekay Offshore or third parties over the next several years and to seek to grow the distributions of Teekay Offshore and Teekay LNG. Consequently, we expect the Daughter Companies will ultimately hold all of the interests in our operating assets and that each of these entities will directly pursue its own merger and acquisition and organic growth opportunities.

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Teekay 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 certain rights of first offer on LNG carriers, oil tankers, shuttle tankers, FSO units and FPSO units. In addition, Teekay 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 through June 2015.

We have four primary lines of business, which consist of offshore logistics (shuttle tankers, FSO units, FAUs, long-distance towing and offshore installation vessels and the HiLoad DP unit), offshore production (FPSO units), liquefied gas carriers and conventional tankers. The allocation of capital and assessment of performance of our assets is done first from the perspective of these lines of business, which are operated by our internal business units. We manage these businesses for the benefit of all stakeholders. Consequently, our financial statement segments are based upon these four primary lines of business, which is consistent with our internal organizational structure. However, we also allocate capital and assess performance from the separate perspectives of the Daughter Companies and Teekay Parent. A substantial majority of the information provided herein has been broken down primarily from the perspective of the Daughter Companies and Teekay Parent, and secondly from the four lines of business. While our internal organizational structure is not fully based on the Daughter Companies and Teekay Parent, we believe this is the optimal way for Teekay’s shareholders and bondholders to understand our results of operations, liquidity and capital resources given that a substantial majority of our assets are owned by the Daughter Companies and given the significant differences in Teekay’s percentages of economic ownership of the Daughter Companies compared to Teekay’s wholly-owned subsidiaries, as well as our practice of having each of the Daughter Companies and Teekay Parent obtain financing to solely fund their own operations. In addition, in September 2014 we announced a change to our dividend policy, whereby commencing some time in 2015, the amount of our quarterly dividend will be primarily based on the distributions from our general partner and limited partner interests in Teekay LNG and Teekay Offshore, together with other dividends received, after deductions for parent company level corporate general and administrative expenses and any reserves determined to be required by our Board of Directors. Consequently, the performance of the businesses in Teekay LNG and Teekay Offshore, which directly and primarily affect the distributions received by Teekay, will have a direct impact on the amount of dividends paid by Teekay to its shareholders.

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, the daily production volume on FPSO units, and the oil price for certain 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. The amount of voyage expenses we incur for a particular charter depends upon the form of the charter. For example, under time-charter contracts and FPSO contracts the customer usually pays the voyage expenses and for contracts of affreightment the ship-owner usually pays the voyage expenses, which typically are added to the hire rate at an approximate cost. Consequently, 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

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• charges related to the amortization of intangible assets, including the fair value of 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.

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 conventional tanker market.

• 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 in certain sectors due to growth in the world fleet and competition for qualified personnel. Going forward, there may be significant 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 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 2014 and 2013, on a consolidated basis we incurred 857 and 658 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”. Fifteen of our vessels are scheduled for dry docking during 2015.

• The division of our results of operations between the Daughter Companies and Teekay Parent is impacted by the sale of vessels from Teekay Parent to the Daughter Companies. During 2013 and 2012, Teekay Parent sold certain of its vessels to Teekay Offshore and Teekay Tankers. These subsidiaries account for the acquisition of the vessels from Teekay as a transfer of a business between entities under common control. The method of accounting for such transfers is similar to the pooling of interests method of accounting. Under this method, the carrying amount of net assets recognized in the balance sheets of each combining entity are carried forward to the balance sheet of the combined entity, and no other assets or liabilities are recognized as a result of the combination. In addition, such transfers are accounted for as if the transfer occurred from the date that the acquiring subsidiary and the acquired vessels were both under the common control of Teekay and had begun operations. As a result, the historical financial information of Teekay Offshore and Teekay Tankers included herein reflects the financial results of the vessels acquired from Teekay Parent from the date the vessels were both under the common control of Teekay and had begun operations but prior to the date they were owned by Teekay Offshore or Teekay Tankers. Financial results for vessels sold by Teekay Parent to Teekay Offshore or Teekay Tankers for periods prior to the date of such sales are referred to herein as the Dropdown Predecessor.

• Three of Teekay LNG’s Suezmax tankers and one of its LPG carriers earned revenues based partly on spot market rates. The time-charter contract for one of Teekay LNG’s Suezmax tankers, the Teide Spirit, and one of its LPG carriers, the Norgas Napa, contain a component providing for additional revenue to us beyond the fixed-hire rate when spot market rates exceed certain threshold amounts. The time-charter contracts for the Bermuda Spirit and Hamilton Spirit were amended in the fourth quarter of 2012 for a period of 24 months, which ended on September 30, 2014, and during this period contained a component providing for additional revenues to Teekay LNG beyond the fixed-hire rate when spot market rates exceeded certain threshold amounts. Accordingly, even though declining spot market rates did not result in our receiving less than the fixed-hire rate, Teekay LNG’s results of operations and cash flow from operations were influenced by the variable component of the charters in periods where the spot market rates exceeded the threshold amounts.

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RECENT DEVELOPMENTS AND RESULTS OF OPERATIONS

The results of operations that follows has first been divided into our controlling interests in our subsidiaries Teekay Offshore, Teekay LNG and Teekay Tankers, as well as Teekay Parent. Within each of these four groups, we have further subdivided the results into their respective lines of business, which generally align with the segments in our financial statements. The following table presents revenue and income from vessel operations for each of these three subsidiaries and Teekay Parent and how they reconcile to our consolidated financial statements.

(in thousands of U.S. dollars)	Revenues									Income from Vessel Operations
	2014			2013			2012			2014			2013			2012
Teekay Offshore(1)		1,019,539			950,977			964,194			256,218			98,891			184,937
Teekay LNG		402,928			399,276			392,251			183,823			176,356			147,791
Teekay Tankers		235,593			170,087			197,429			58,271			3,411			(340,195	)
Teekay Parent		450,112			440,008			584,502			(73,723	)		(213,212	)		(135,926	)
Elimination of intercompany(2)(3)		(114,252	)		(130,263	)		(157,605	)		2,570			(2,700	)		(7,000	)
Teekay Corporation Consolidated		1,993,920			1,830,085			1,980,771			427,159			62,746			(150,393	)

(1) Operating results of conventional tankers sold by Teekay Offshore during 2013 and 2012 are presented herein, as they are considered part of income from continuing operations from the perspective of Teekay consolidated as we continue to operate and re-invest in this line of business, although re-investment is not expected to occur within Teekay Offshore. In Teekay Offshore these vessels have been accounted for as discontinued operations.

(2) During 2014, Teekay chartered in three FSO units, two shuttle tankers and four Aframax tankers from Teekay Offshore, two LNG carriers from Teekay LNG and two Aframax tankers from Teekay Tankers. During 2013, Teekay chartered in two FSO units, two shuttle tankers and five Aframax tankers from Teekay Offshore, two LNG carriers from Teekay LNG and two Aframax tankers from Teekay Tankers. During 2012, Teekay chartered in two FSO units, two shuttle tankers and eight Aframax tankers from Teekay Offshore, two LNG carriers from Teekay LNG and two Aframax tankers from Teekay Tankers. Internal charter hire between Teekay Parent and its subsidiaries Teekay Offshore, Teekay LNG and Teekay Tankers are eliminated upon consolidation.

(3) During 2014, Teekay sold to Teekay Tankers a 50% interest in Teekay Tankers Operations Ltd (or TTOL), which owns the conventional tanker commercial management and technical management operations, including direct ownership in three commercially managed tanker pools of the Teekay group. Teekay Tankers and Teekay Parent each account for their 50% interest in TTOL as an equity-accounted investment and, as such, TTOL’s results are reflected in equity income of Teekay Tankers and Teekay Parent. Upon consolidation of Teekay Tankers into Teekay, the results of TTOL are accounted for on a consolidated basis by Teekay. The impact on income from vessel operations of consolidating TTOL in 2014 was $2.6 million. During 2013 and 2012, Teekay LNG paid Teekay business development fees of $2.7 million and $7.0 million, respectively, relating to its acquisition of certain equity-accounted interests. Such amounts were capitalized in Teekay LNG and eliminated upon consolidation.

“Item 18 – Financial Statements: Note 2 Segment Reporting” of this Annual Report contains our financial statement segment results, which generally align with our four primary lines of business, consisting of offshore logistics, offshore production, liquefied gas carriers and conventional tankers. Our financial statement segment results reflect the complete elimination of all intercompany arrangements, including intercompany charters, management services and business development fees. The results of the lines of business within each of Teekay Offshore, Teekay LNG, Teekay Tankers and Teekay Parent are contained in the tables below. Unlike the financial statement segments, the amounts in the tables below do not include the elimination of intercompany arrangements. For example, the internal charter hire from a conventional tanker chartered from Teekay Offshore to Teekay Parent will be reflected as revenue in conventional tanker results for Teekay Offshore and time-charter-hire expense for Teekay Parent. In addition, certain results of the four primary lines of business in Teekay Parent are reflected in Other and Corporate G&A given their smaller size in Teekay Parent, but they are reflected in their respective segment within the consolidated financial statements.

Global crude oil prices have significantly declined since mid-2014. The significant decline in oil prices has also contributed to depressed natural gas prices. A continuation of lower oil prices or a further decline in oil prices may adversely affect investment in the exploration for or development of new or existing offshore projects and limit our growth opportunities, as well as reduce our revenues under volume- or production-based contracts or upon entering into replacement or new charter contracts. Likewise, lower oil prices may negatively affect both the competitiveness of natural gas as a fuel for power generation and the market price of natural gas, to the extent that natural gas prices are benchmarked to the price of crude oil. These factors may adversely affect investment in the exploration for or development of new or existing LNG projects and limit our growth opportunities in the LNG sector, as well as reduce our revenues upon entering into replacement or new LNG charter contracts.

Year Ended December 31, 2014 versus Year Ended December 31, 2013

Teekay Offshore

Recent Developments in Teekay Offshore

In January 2015, Teekay Offshore, through its 50/50 joint venture with Odebrecht Oil & Gas S.A. (or Odebrecht), finalized the contract with Petroleo Brasileiro SA (or Petrobras) to provide an FPSO unit for the Libra field located in the Santos Basin offshore Brazil. The contract will be serviced by a new FPSO unit being converted from Teekay Offshore’s 1995-built shuttle tanker, the Navion Norvegia. The conversion project is underway at Sembcorp Marine’s Jurong Shipyard in Singapore and the converted unit is scheduled to commence operations in early-2017 under a 12-year firm period fixed-rate contract with Petrobras and its international partners. The FPSO conversion is expected to be completed for a total fully built-up cost of approximately $1.0 billion.

In December 2014, Teekay Offshore entered into an agreement with a consortium led by Queiroz Galvão Exploração e Produção SA (or QGEP) to provide an FPSO unit for the Atlanta field located in the Santos Basin offshore Brazil. In connection with the QGEP contract, Teekay Offshore acquired the Petrojarl I FPSO unit from us for $57 million and the unit is currently undergoing upgrades at the Damen Shipyard Group’s DSR Schiedam Shipyard in the Netherlands for an estimated cost of approximately $235 million, including the cost of acquiring the Petrojarl I FPSO unit.

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The unit is scheduled to commence operations in the first half of 2016 under a five-year fixed-rate charter contract with QGEP. The FPSO will be used as an early production system unit on the Atlanta field, which is located 185 kilometers offshore from the Brazil coast at a water depth of approximately 1,550 meters and contains an estimated 260 million recoverable barrels of oil equivalent.

In June 2011, we entered into a contract with BG Norge Limited (or BG) to provide a harsh weather FPSO unit to operate in the North Sea. The contract will be serviced by a newbuilding FPSO unit, the Petrojarl Knarr (or Knarr), which arrived in Norway in mid-September 2014 following delivery from the shipyard. In December 2014, our board of directors approved the sale of the Knarr FPSO unit to Teekay Offshore, subject to the unit achieving first oil and commencing its charter contract. The purchase price for the Knarr, which is based on an estimated fully built-up cost of approximately $1.25 billion, is expected to be financed through the assumption of an existing $815 million long-term debt facility and $450 million through a combination of issuing equity and short-term vendor financing from us. We expect to complete the sale of the Knarr during the second quarter of 2015. During the first quarter of 2015, the unit commenced its ten-year time-charter contract with BG.

In August 2014, Teekay Offshore acquired Logitel Offshore Holding AS (Logitel), a Norway-based company focused on the high-end floating accommodation market. Logitel is currently constructing three newbuilding floating accommodation units (or FAUs), based on a Sevan Marine ASA (or Sevan) cylindrical hull design, at the COSCO (Nantong) Shipyard (or COSCO) in China for an estimated cost of approximately $585 million, including $30.0 million from Teekay Offshore’s assumption of Logitel’s obligations under a bond agreement from Sevan. Teekay Offshore currently holds options to order up to an additional five FAUs. Prior to the acquisition, Logitel secured a three-year fixed-rate charter contract, plus extension options, with Petrobras in Brazil for the first FAU, which delivered in February 2015. The FAU is expected to commence its charter with Petrobras during the second quarter of 2015. Teekay Offshore expects to secure charter contracts for the remaining two newbuilding FAUs prior to their respective scheduled deliveries in the first and fourth quarters of 2016. Teekay Offshore has the option to defer the delivery of the remaining two newbuilding FAUs by up to one year. Teekay Offshore intends to finance the initial newbuilding payments through its existing liquidity and expects to secure long-term debt financing for the units prior to their scheduled deliveries. Please read “Item 18 – Financial Statements: Note 3a – Investments – Acquisition of Logitel Offshore Holding AS.”

In March 2014, Teekay Offshore acquired ALP Maritime Services B.V. (or ALP), a Netherlands-based provider of long-distance ocean towage and offshore installation services to the global offshore oil and gas industry. As part of the transaction, Teekay Offshore and ALP entered into an agreement with Niigata Shipbuilding & Repair of Japan for the construction of four state-of-the-art SX-157 Ulstein Design ultra-long-distance towing and offshore installation vessel newbuildings, which will be equipped with dynamic positioning (or DP) capability, for an estimated cost of approximately $258 million. Teekay Offshore intends to continue financing the newbuilding installments through its existing liquidity and expects to secure long-term debt financing for these vessels prior to their scheduled deliveries in 2016. Please read “Item 18 – Financial Statements: Note 3d – Investments – Teekay Offshore Acquisition of ALP Maritime Services B.V.” In October 2014, Teekay Offshore, through ALP, agreed to acquire six modern on-the-water long-distance towing and offshore installation vessels for approximately $220 million. The vessels were built between 2006 and 2010 and are all equipped with DP capabilities. Teekay Offshore took delivery of four vessels in the first and early in the second quarter of 2015 and expects to take delivery of the remaining two vessels during the rest of the second quarter of 2015. Including these vessels, along with ALP’s four state-of-the-art long-distance towing and offshore installation vessel newbuildings scheduled to deliver in 2016, ALP will become the world’s largest owner and operator of DP towing and offshore installation vessels. All ten vessels will be capable of long-distance towing and offshore unit installation and decommissioning of large floating exploration, production and storage units.

This acquisition of ALP, the related newbuilding orders and on the water assets represents Teekay Offshore’s entrance into the long-distance ocean towage and offshore installation services business. Teekay Offshore believes that the combination of its infrastructure and access to capital with ALP’s experienced management team in this market will enable Teekay Offshore to further grow this niche business, which Teekay Offshore believes is a natural complement to its existing offshore business.

In September 2013, Teekay Offshore acquired a 2010-built HiLoad DP unit from Remora AS (or Remora), a Norway-based offshore marine technology company, for a total purchase price of approximately $60 million, including modification and mobilization costs. In late-December 2014, Teekay Offshore received notification from Petrobras that the HiLoad DP unit did not meet certain test criteria under the time-charter contract and, therefore, Teekay Offshore is currently reviewing various alternatives. In July 2013, Remora was awarded a contract by BG E&P Brasil Ltd. to undertake a front-end engineering and design (or FEED) study to develop the next generation of HiLoad DP units. The design, which is based on the main parameters of the first generation design, is expected to include new features such as increased engine power and capability to maneuver vessels larger than Suezmax conventional tankers. Under the terms of an agreement between Remora and Teekay Offshore, Teekay Offshore has a right of first refusal to acquire any future HiLoad DP projects developed by Remora.

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Operating Results – Teekay Offshore

The following table compares Teekay Offshore’s operating results and number of calendar-ship-days for its vessels for 2014 and 2013, and compares its net revenues (which is a non-GAAP financial measure) for 2014 and 2013, to revenues, the most directly comparable GAAP financial measure, for the same periods.

(in thousands of U.S. dollars, except calendar-ship-days)	Offshore Logistics						Offshore Production						Conventional Tankers						Teekay Offshore Total(2)
	2014			2013			2014			2013			2014			2013(3)			2014			2013(3)
Revenues		630,932			611,035			354,518			284,932			33,566			55,010			1,019,539			950,977
Voyage expenses		(107,062	)		(99,111	)		—			—			(5,373	)		(5,214	)		(112,540	)		(104,325	)
Net revenues		523,870			511,924			354,518			284,932			28,193			49,796			906,999			846,652
Vessel operating expenses		(188,087	)		(185,699	)		(158,216	)		(152,616	)		(5,906	)		(9,664	)		(352,209	)		(347,979	)
Time-charter hire expense		(31,090	)		(56,682	)		—			—			—			—			(31,090	)		(56,682	)
Depreciation and amortization		(118,968	)		(126,091	)		(72,905	)		(66,404	)		(6,680	)		(7,747	)		(198,553	)		(200,242	)
General and administrative (1)		(33,024	)		(24,374	)		(27,406	)		(17,742	)		(2,136	)		(3,134	)		(67,516	)		(45,250	)
Asset impairments		(1,638	)		(76,782	)		—			—			—			(18,164	)		(1,638	)		(94,946	)
Net loss on sale of vessels and equipment		—			—			—			—			—			(301	)		—			(301	)
Restructuring recovery (charges)		225			(2,169	)		—			—			—			(192	)		225			(2,361	)
Income from vessel operations		151,288			40,127			95,991			48,170			13,471			10,594			256,218			98,891
Equity income		—			—			10,341			6,731			—			—			10,341			6,731
Calendar-Ship-Days(4)
Shuttle Tankers		12,672			12,370			—			—			—			—			12,672			12,370
FSO Units		2,190			2,100			—			—			—			—			2,190			2,100
FPSO Units		—			—			1,476			1,339			—			—			1,476			1,339
Conventional Tankers		—			—			—			—			1,460			1,888			1,460			1,888

(1) Includes direct general and administrative expenses and indirect general and administrative expenses allocated to offshore logistics, offshore production and conventional tankers based on estimated use of corporate resources.

(2) Teekay Offshore’s 2014 revenues and income from operations include $0.5 million and $(4.5) million, respectively, from its towage and floating accommodation businesses, which are not separately identified or discussed below as these two businesses did not have any vessels in operation in 2014.

(3) Operating results of conventional tankers sold by Teekay Offshore during 2013 are presented herein as they are considered part of income from continuing operations from the perspective of Teekay consolidated, as we continue to operate and re-invest in this line of business, although re-investment is not expected to occur within Teekay Offshore. In Teekay Offshore’s financial statements these vessels have been accounted for as discontinued operations.

(4) Calendar-ship-days presented relate to owned and in-chartered consolidated vessels.

Teekay Offshore – Offshore Logistics

Offshore Logistics consists of Teekay Offshore’s shuttle tankers, FSO units and HiLoad unit. As at December 31, 2014, the shuttle tanker fleet consisted of 32 vessels that operate under fixed-rate contracts of affreightment, time charters and bareboat charters, one shuttle tanker in lay-up as a conversion candidate, and the HiLoad DP unit. Of these 34 shuttle tankers, six were owned through 50% owned subsidiaries, two through a 67%-owned subsidiary and two were chartered-in. The remaining vessels are owned 100% by Teekay Offshore. All of these shuttle tankers, with the exception of the HiLoad DP unit, provide transportation services to energy companies, primarily in the North Sea and Brazil. These shuttle tankers also service the conventional spot tanker market from time to time. One of these shuttle tankers, the Randgrid, is committed to a conversion into an FSO unit upon the expiry of its existing shuttle tanker charter contract in the second quarter of 2015. In October 2014, the Navion Norvegia was sold to one of Teekay Offshore’s 50/50 joint ventures with Odebrecht and is now undergoing conversion into an FPSO for operation in the Libra oil field in Brazil.

As of December 31, 2014, Teekay Offshore’s FSO fleet consisted of six units that operate under fixed-rate time charters or fixed-rate bareboat charters, in which its ownership interests range from 89% to 100%. Teekay Offshore has committed one shuttle tanker, the Randgrid, to conversion into an FSO unit upon the expiry of its existing shuttle tanker charter contract in the second quarter of 2015. FSO units provide an on-site storage solution to oil field installations that have no oil storage facilities or that require supplemental storage. Teekay Offshore’s revenues and vessel operating expenses for the FSO segment are affected by fluctuations in currency exchange rates, as a significant component of revenues are earned and vessel operating expenses are incurred in Norwegian Kroner and Australian Dollars for certain vessels. The strengthening or weakening of the U.S. Dollar relative to the Norwegian Kroner or Australian Dollar may result in significant decreases or increases, respectively, in our revenues and vessel operating expenses.

The average size of Teekay Offshore’s owned shuttle tanker fleet increased in 2014 compared to 2013, primarily due to the delivery of four newbuilding shuttle tankers (or the BG Shuttle Tankers) and the delivery of the HiLoad DP unit in April 2014, partially offset by the sale of the Navion Norvegia in October 2014, the commencement of the conversion of the Navion Clipper to the Suksan Salamander FSO unit in April 2013, and the sale of the Basker Spirit in January 2013. While the HiLoad DP unit was delivered in April 2014, it did not commence operations in 2014 nor generate revenue as it was undergoing pre-operational testing. Included in calendar-ship-days for 2014 and 2013 is one owned shuttle tanker that has been in lay-up since May 2012 following its redelivery to Teekay Offshore upon expiration of its time-charter-out contract in April 2012.

The average number of Teekay Offshore’s FSO units increased in 2014 compared to 2013, due to the conversion of the Navion Clipper shuttle tanker to the Suksan Salamander FSO unit, which conversion commenced in April 2013 and was completed in July 2014. The Suksan Salamander commenced its charter contract in August 2014.

Income from vessel operations increased to $151.3 million in 2014 compared to $40.1 million in 2013, primarily as a result of:

• asset impairments of $76.8 million during 2013 and a $16.7 million decrease in depreciation in 2014 after reducing the carrying value of the six shuttle tankers to which the asset impairments related (with the write-downs to the vessels’ estimated fair values resulting from the re-contracting of one of the vessels at lower rates than expected, the cancellation of a short-term contract and a change in expectations for the contract renewal for two of the vessels, and a cancellation of a contract renewal and expected sale of an aging vessel);

• an increase of $39.9 million from the delivery of the BG Shuttle Tankers and $1.2 million from the delivery of the Suksan Salamander;

• an increase of $12.9 million from lower time-charter hire expense due to redelivery of an in-chartered shuttle tanker by us to its owner and more off-hire days in the in-chartered fleet;

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• an increase of $7.6 million of revenue due to a higher level of trading of our excess shuttle tanker capacity in the conventional tanker spot market;

• an increase of $4.4 million due to lower operating expenses due to the lay-up of the Navion Norvegia since June 2014 and its subsequent sale to one of Teekay Offshore’s 50/50 joint ventures with Odebrecht in October 2014; and

• an increase of $3.8 million due to an increase in reimbursable bunker expenses by charterers;

partially offset by

• a net decrease of $19.6 million in our contract of affreightment fleet due to lower fleet utilization and a decrease in rates as provided in certain contracts and less opportunity to trade excess shuttle capacity in short-term offshore projects;

• a decrease of $16.1 million due to fewer revenue days resulting from the redelivery of four vessels to us in July 2013, December 2013, January 2014 and February 2014, as they completed their time-charter-out contracts;

• a decrease of $8.7 million due to higher general and administrative expenses due to the delivery of the HiLoad DP unit in 2014 and the commencement of operations for the four BG Shuttle Tankers during 2013 and early-2014, partially offset by cost savings due to the reorganization of marine operations within our shuttle tanker business unit completed in 2013;

• a decrease of $6.0 million from the delivery of the HiLoad DP unit;

• a decrease of $5.1 million from the drydocking of the Navion Saga and Dampier Spirit during 2014; and

• a decrease of $3.2 million due to a decrease in rates on the recontracting of the Pattani Spirit at a lower charter rate in April 2014 for a further five years.

Teekay Offshore – Offshore Production

Offshore Production consists of Teekay Offshore’s FPSO units. As of December 31, 2014, the FPSO fleet consisted of the Petrojarl Varg, the Cidade de Rio das Ostras (or Rio das Ostras), the Piranema Spirit, the Voyageur Spirit and the Petrojarl I FPSO units, all of which Teekay Offshore owns 100%, and the Itajai FPSO unit and the Libra FPSO unit (currently under conversion), of which Teekay Offshore owns 50%. Teekay Offshore acquired the Voyageur Spirit FPSO unit and its interest in the Itajai FPSO unit from us in May 2013 and June 2013, respectively. In October 2014, Teekay Offshore sold a 1995-built shuttle tanker, the Navion Norvegia, to a 50/50 joint venture with Odebrecht and the vessel is undergoing conversion into an FPSO unit for the Libra field located in the Santos Basin offshore Brazil. Teekay Offshore acquired the Petrojarl I FPSO unit from us in December 2014, which unit is undergoing upgrades at the Damen Shipyard Group’s DSR Schiedam Shipyard in the Netherlands. The strengthening or weakening of the U.S. Dollar relative to the Norwegian Kroner may result in significant decreases or increases, respectively, in Teekay Offshore’s revenues and vessel operating expenses.

Teekay Offshore uses the FPSO units to provide production, processing and storage services to oil companies operating offshore oil field installations. These services are typically provided under long-term, fixed-rate FPSO contracts, some of which also include certain incentive compensation or penalties based on the level of oil production and other operational measures. Historically, the utilization of FPSO units and other vessels in the North Sea, where the Petrojarl Varg and Voyageur Spirit operate, is higher in the winter months, as favorable weather conditions in the summer months provide opportunities for repairs and maintenance to our vessels and the offshore oil platforms, which generally reduces oil production.

On April 13, 2013, the Voyageur Spirit FPSO unit began production and on May 2, 2013, Teekay Offshore acquired the unit from us. Upon commencing production, Teekay Offshore had a specified time period to receive final acceptance from the charterer; however due to a defect encountered in one of its two gas compressors, the FPSO unit was unable to achieve final acceptance within the allowable timeframe, resulting in the FPSO unit being declared off-hire by the charterer retroactive to April 13, 2013. On August 27, 2013, repairs to the defective gas compressor on the Voyageur Spirit FPSO unit were completed and the unit achieved full production capacity. Teekay Offshore entered into an interim agreement with E.ON Ruhrgas UK GP Limited (or E.ON), the charterer, whereby Teekay Offshore was compensated for production beginning August 27, 2013 until final acceptance on February 22, 2014. Until the Voyageur Spirit FPSO unit was declared on hire, we indemnified Teekay Offshore for certain production shortfalls and unreimbursed vessel operating expenses. For the period from April 13, 2013 to December 31, 2013, we indemnified Teekay Offshore for a total of $34.9 million for production shortfalls and unreimbursed repair costs. For 2014, we indemnified Teekay Offshore $3.5 million for production shortfalls and unrecovered repair costs to address the compressor issues and paid a further $2.7 million in late-2014 relating to a final settlement of pre-acquisition capital expenditures for the Voyageur Spirit FPSO unit. Amounts paid as indemnification from us to Teekay Offshore were treated as a reduction in the purchase price Teekay Offshore paid for the FPSO unit.

The average number of Teekay Offshore’s FPSO units increased in 2014 compared to 2013, due to the acquisition of the Voyageur Spirit on May 2, 2013, the 50% interest in the Itajai on June 10, 2013, and the Petrojarl I on December 15, 2014. No earnings are expected from the Petrojarl I until its upgrades are completed, which is scheduled for the first half of 2016. Please read “Item 18 – Financial Statements: Note 3f – Acquisitions – FPSO Units and Investment in Sevan Marine ASA.”

Income from vessel operations increased to $96.0 million in 2014 compared to $48.2 million in 2013, primarily as a result of:

• an increase of $40.1 million, excluding general and administrative expenses, for the Voyageur Spirit FPSO unit mainly relating to the commencement of its charter agreement in August 2013, settlement payments relating to reimbursable expenses during the third and fourth quarters of 2014, a decrease in external consulting fees, and an increase in daily hire rates, partially offset by a decrease in incentive compensation of the unit, and a full year of vessel operating costs in 2014 including higher repairs and maintenance costs;

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• an increase of $11.3 million for the Piranema Spirit FPSO unit mainly relating to a produced water treatment plant startup commencing during the second quarter of 2014, a credit earned in 2014 from the charterer for unused maintenance days in accordance with the service contract, lower repairs and maintenance costs, and a decrease in external agency fees; and

• an increase of $8.0 million for the Rio das Ostras FPSO unit mainly relating to an increase in rates in 2014 in accordance with the annual contractual escalation adjustment, a credit earned from the charterer of the unit for unused maintenance days under the service contract, and lower repairs and maintenance costs;

partially offset by

• a decrease of $9.7 million from increased general and administrative expenses due the acquisition of the Voyageur Spirit FPSO unit in May 2013 and the Petrojarl I FPSO during 2014, and an increase in business development costs relating to FPSO tenders including the Libra FPSO project.

Equity income increased to $10.3 million for 2014 compared to $6.7 million for 2013, primarily due to a full year of earnings on Teekay Offshore’s 50% interest in the Itajai FPSO unit, which interest Teekay Offshore acquired from us in June 2013.

Teekay Offshore – Conventional Tankers

As at December 31, 2014, Teekay Offshore owned 100% interests in two Aframax conventional crude oil tankers (which operate under fixed-rate time charters with Teekay Corporation) and two vessels (that have additional equipment for lightering) which operate under fixed-rate bareboat charters with a 100% owned subsidiary of Teekay.

Income from vessel operations increased to $13.5 million in 2014 compared to $10.6 million in 2013, primarily as a result of asset impairments during 2013 and the related sale of three vessels during 2013, partially offset by termination fees received by Teekay Offshore from us in 2013 as a result of our early cancellation of in-charter contracts from Teekay Offshore.

Teekay LNG

Recent Developments in Teekay LNG

In December 2014, the Teekay Nakilat Corporation (or the Teekay Nakilat Joint Venture), in which Teekay LNG has a 70% ownership interest, voluntarily terminated its 30-year capital lease arrangements with the lessor relating to its three LNG carriers (or RasGas II LNG Carriers) under capital lease. As part of this transaction, the Teekay Nakilat Joint Venture acquired the RasGas II LNG Carriers from the lessor and the Teekay Nakilat Joint Venture refinanced its original debt facility of $278 million with a new $450 million debt facility and terminated its interest rate swaps relating to its original debt, capital lease obligations and restricted cash deposits. Please read “Item 18 – Financial Statements: Note 10 – Capital Lease Obligations and Restricted Cash and Note 16d –Commitments and Contingencies – Legal Proceedings and Claims.”

In December 2014, Teekay LNG secured time-charter contracts, ranging in duration from six to eight years plus extension options, with Royal Dutch Shell plc (or Shell) for five LNG carrier newbuildings, which charter contracts will commence upon the vessel deliveries which are scheduled from the second half of 2017 into 2018. In connection with securing these time-charter contracts with Shell, Teekay LNG exercised its option to order three LNG carrier newbuildings from Daewoo Shipbuilding & Marine Engineering Co. (or DSME). In February 2015, Teekay LNG ordered another LNG newbuilding carrier and has four additional newbuilding options it may exercise by the end of April 2015. In total, Teekay LNG has nine LNG newbuildings ordered with four additional newbuilding options. Teekay LNG has entered into time-charter contracts for all but two of the ordered newbuildings.

In November 2014, Teekay LNG acquired a 2003-built 10,200 cubic meter (or cbm) LPG carrier, the Norgas Napa, from I.M. Skaugen SE (or Skaugen) for $27 million. Teekay LNG took delivery of the vessel on November 13, 2014 and chartered the vessel back to Skaugen on a bareboat contract for a period of five years at a fixed-rate plus a profit-share component based on actual earnings of the vessel, which is trading in Skaugen’s Norgas pool.

In July 2014, Teekay LNG, through a new 50/50 joint venture (or the Yamal LNG Joint Venture) with China LNG Shipping (Holdings) Limited (or China LNG) , finalized shipbuilding contracts for six internationally-flagged icebreaker LNG carriers for the Yamal LNG Project. The Yamal LNG Project is a joint venture between Russia-based Novatek OAO (60%), France-based Total S.A. (20%) and China-based China National Petroleum Corporation (or CNPC) (20%) and will consist of three LNG trains with a total expected capacity of 16.5 million metric tons of LNG per annum. The project is currently scheduled to start-up in early-2018. The Yamal LNG Joint Venture will build six 172,000-cubic meter ARC7 LNG carrier newbuildings to be constructed by DSME for an estimated total fully built-up cost of approximately $2.1 billion. The vessels, which will be constructed with maximum 2.1 meter icebreaking capabilities in both the forward and reverse directions, are scheduled to deliver at various times between the first quarter of 2018 and first quarter of 2020. Upon their deliveries, the six LNG carriers will each operate under fixed-rate time-charter contracts with Yamal Trade Pte. Ltd. until December 31, 2045, plus extension options. The six LNG carriers constructed for the Yamal LNG Project will transport LNG from Northern Russia to Europe and Asia. Teekay LNG accounts for its investment in the Yamal LNG Joint Venture using the equity method. Please read “Item 18 – Financial Statements: Note 3b – Investments – Teekay LNG – Yamal LNG Joint Venture.”

In June 2014, Teekay LNG acquired from BG International Limited (or BG) its ownership interest in four 174,000-cubic meter Tri-Fuel Diesel Electric LNG carrier newbuildings, which will be constructed by Hudong-Zhonghua Shipbuilding (Group) Co., Ltd. in China for an estimated total fully built-up cost to the joint venture of approximately $1.0 billion. The vessels upon delivery, scheduled for between September 2017 and January 2019, will each operate under 20-year fixed-rate time-charter contracts, plus extension options, with Methane Services Limited, a wholly-owned subsidiary of BG. As compensation for BG’s ownership interest in these four LNG carrier newbuildings, Teekay LNG assumed BG’s portion of the shipbuilding installments and its obligation to provide the shipbuilding supervision and crew training services for the four LNG carrier newbuildings up to their delivery date pursuant to a ship construction support agreement. We on behalf of Teekay LNG, will provide the shipbuilding supervision and crew training services for the four LNG carrier newbuildings up to their delivery dates. Teekay LNG estimates that it will incur approximately $38.7 million of costs to provide these services, of which BG has agreed to pay $20.3 million. Through this transaction, Teekay LNG has a 30% ownership interest in two LNG carrier newbuildings, with the balance of the ownership held by China LNG and CETS Investment Management (HK) Co. Ltd. (or CETS) (an affiliate of China National Offshore Oil Corporation), and a 20% ownership interest in the remaining two LNG carrier newbuildings, with the balance of the ownership held by China LNG, CETS and BW LNG Investments Pte. Ltd. (collectively the BG Joint Venture).

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Teekay LNG accounts for its investment in the BG Joint Venture using the equity method. Teekay LNG expects to finance its pro rata equity interest in future shipyard installment payments using a portion of its available liquidity, with the balance of the total cost of the vessels financed with equity contributions by the other partners and a $787.0 million long-term debt facility of the BG Joint Venture. Please read “Item 18 – Financial Statements: Note 3c – Investments – Teekay LNG – BG International Limited Joint Venture.”

In January 2015, one of the MALT LNG Carriers, in which Teekay LNG has a 52% ownership interest, had a grounding incident. The vessel was subsequently refloated and returned to service. Teekay LNG expects the cost of such refloating and related costs associated with the grounding to be covered by insurance, less an applicable deductible. The charterer has claimed that the vessel was off-hire for 59 days during the first quarter of 2015. In addition, the charterer claimed that the off-hire time for this vessel during this period gave them the right to terminate the charter contract effective March 28, 2015, which they elected to do. The Teekay LNG-Marubeni Joint Venture has disputed the charterer’s claims of the aggregate off-hire time for this vessel as a result of this incident as well as the charterer’s ability to terminate the charter contract, which originally would have expired in September 2016. The Teekay LNG-Marubeni Joint Venture has obtained legal assistance in resolving this dispute. However, if the charterer’s claim to terminate the charter contract is upheld, Teekay LNG’s 52% portion of the potential loss revenue from March 28, 2015 to September 30, 2016, would be $27.3 million, less any amounts received for re-chartering this vessel during this time. The impact in future periods from this incident will depend upon Teekay LNG’s ability to re-charter the vessel and the resolution of this dispute. The charter contract of another MALT LNG Carrier expired in March 2015 as originally scheduled and the Teekay LNG-Marubeni Joint Venture is seeking to secure employment for this vessel as well.

Operating Results – Teekay LNG

The following table compares Teekay LNG’s operating results and number of calendar-ship-days for its vessels for 2014 and 2013, and compares its net revenues (which is a non-GAAP financial measure) for 2014 and 2013, to revenues, the most directly comparable GAAP financial measure, for the same periods.

(in thousands of U.S. dollars, except calendar-ship-days)	Liquefied Gas Carriers						Conventional Tankers						Teekay LNG Total
	2014			2013			2014			2013			2014			2013
Revenues		307,426			285,694			95,502			113,582			402,928			399,276
Voyage expenses		(1,768	)		(407	)		(1,553	)		(2,450	)		(3,321	)		(2,857	)
Net revenues		305,658			285,287			93,949			111,132			399,607			396,419
Vessel operating expenses		(59,087	)		(55,459	)		(36,721	)		(44,490	)		(95,808	)		(99,949	)
Depreciation and amortization		(71,711	)		(71,485	)		(22,416	)		(26,399	)		(94,127	)		(97,884	)
General and administrative (1)		(17,992	)		(13,913	)		(5,868	)		(6,531	)		(23,860	)		(20,444	)
Restructuring recovery (charges)		—			—			(1,989	)		(1,786	)		(1,989	)		(1,786	)
Income from vessel operations		156,868			144,430			26,955			31,926			183,823			176,356
Equity income		115,478			123,282			—			—			115,478			123,282
Calendar-Ship-Days(2)
Liquefied Gas Carriers		6,619			5,981			—			—			6,619			5,981
Conventional Tankers		—			—			3,202			3,994			3,202			3,994

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

(2) Calendar-ship-days presented relate to consolidated vessels.

Teekay LNG – Liquefied Gas Carriers

As at December 31, 2014, Teekay LNG’s liquefied gas fleet, including newbuildings, included 47 LNG carriers and 30 LPG/Multigas carriers, in which its interests ranged from 20% to 100%. The number of calendar-ship-days for Teekay LNG’s liquefied gas carriers consolidated in its financial results increased to 6,619 days in 2014 from 5,981 days in 2013, as a result of the acquisition and delivery of two LNG carriers from Awilco (or the Awilco LNG Carriers), the Wilforce and Wilpride, in September 2013 and November 2013, respectively, and the acquisition and delivery of the Norgas Napa in November 2014.

Income from vessel operations increased to $156.9 million in 2014 compared to $144.4 million in 2013, primarily as a result of:

• an increase of $20.7 million of revenue as a result of the acquisition and delivery of the Awilco LNG Carriers in September 2013 and November 2013;

partially offset by:

• an increase of $4.1 million in general and administrative expenses primarily due to a greater amount legal and tax activities to support Teekay LNG’s growth, higher advisory fees incurred to support its business development activities, and legal and tax fees associated with the termination of the capital lease obligations in the Teekay Nakilat Joint Venture;

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• an increase of $3.6 million of vessel operating expenses relating to costs to train Teekay LNG’s crew for two LNG carrier newbuildings that are expected to deliver in the first half of 2016, wage increases relating to certain LNG carriers and shipbuilding and site supervision costs associated with the services Teekay LNG is providing to the BG Joint Venture; and

• a decrease of $2.4 million of revenue relating to 18 days of unscheduled off-hire in the first quarter of 2014 due to repairs required for one LNG carrier.

Equity income related to Teekay LNG’s liquefied gas carriers decreased to $115.5 million in 2014 compared to $123.3 million in 2013, as set forth in the table below:

	Angola LNG Carriers			Exmar LNG Carriers		Exmar LPG Carriers		MALT LNG Carriers			RasGas 3 LNG Carriers			Other			Total Equity Income
Year ended December 31, 2014		3,472			10,651		44,114		36,805			20,806			(370	)		115,478
Year ended December 31, 2013		29,178			10,650		17,415		43,428			22,611			—			123,282
Change		(25,706	)		1		26,699		(6,623	)		(1,805	)		(370	)		(7,804	)

Equity income decreased in 2014 by $7.8 million from the prior year, primarily as a result of:

• a $25.7 million decrease in equity income from Teekay LNG’s 33% ownership interest in the four LNG carriers serving the Angola LNG Project (or the Angola LNG Carriers), which was primarily due to $23.6 million of unrealized losses on derivative instruments in 2014 as a result of long-term LIBOR benchmark interest rates decreasing for interest rate swaps maturing in 2023 and 2024, compared to unrealized gains on derivative instruments in 2013, and an increase in vessel operating expenses relating to vessel main engine overhauls in 2014; and

• a $6.6 million decrease in equity income for 2014 in Teekay LNG’s 52% ownership interest in the six LNG carriers (or the MALT LNG Carriers) acquired by the Teekay LNG-Marubeni Joint Venture in February 2012, which was primarily due to the off-hire of Woodside Donaldson and Magellan Spirit for 34 days and 23 days, respectively, during 2014 for scheduled dry dockings, the off-hire of Woodside Donaldson for seven days in 2014 for motor repairs, an increase in vessel operating expenses due to higher overall repair expenditures in 2014, an increase in interest expenses due to higher interest margins upon completion of debt refinancing within the Teekay LNG-Marubeni Joint Venture in June and July 2013, and an increase in depreciation expenses due to dry-dock additions in 2014, partially offset by the Methane Spirit being off-hire for 28 days for a scheduled dry docking in 2013;

partially offset by:

• a $26.7 million increase in equity income from Teekay LNG’s 50% ownership interest in Exmar LPG BVBA (a joint venture with Belgium-based Exmar NV (or Exmar)), which was primarily due to Teekay LNG’s 50% acquisition of this joint venture interest in February 2013, $16.9 million of gains on the sales of the Flanders Tenacity, Eeklo and Flanders Harmony, which were sold during 2014, the delivery of three newbuildings, the Waasmunster, Warinsart and Waregem during the second and third quarters of 2014 and higher revenues as a result of higher Very Large Gas Carrier spot rates earned in 2014; partially offset by the redelivery of the Berlian Ekuator to its owner in January 2014, a loss on the sale of the Temse in the first quarter of 2014, and lower income generated as a result of the disposals of the Donau (March 2013), Temse, Eeklo, Flanders Tenacity and Flanders Harmony.

Teekay LNG – Conventional Tankers

As at December 31, 2014, Teekay LNG’s conventional tanker fleet included seven Suezmax-class double-hulled conventional crude oil tankers and one Handymax product tanker, six of which it owns and two of which it leases under capital leases. All of Teekay LNG’s conventional tankers operate under fixed-rate charters. The number of calendar-ship-days for Teekay LNG’s conventional tankers decreased to 3,202 days in 2014 from 3,994 days in 2013, as the charterer and owner of five of Teekay LNG’s conventional vessels under capital leases sold the Tenerife Spirit in December 2013, the Algeciras Spirit in February 2014 and the Huelva Spirit in August 2014, and on redelivery of the vessels to the charterer, the charter contracts with Teekay LNG were terminated.

Income from vessel operations decreased to $27.0 million during 2014 compared to $31.9 million in 2013, primarily as a result of:

• a decrease of $12.1 million due to the sales of the Tenerife Spirit, Algeciras Spirit and Huelva Spirit in December 2013, February 2014 and August 2014, respectively;

partially offset by:

• an increase of $2.7 million due to off-hire of the European Spirit, Asian Spirit and African Spirit for 25, 22 and 27 days, respectively, in 2013 for scheduled dry dockings;

• an increase of $2.6 million due to higher revenues earned by the Bermuda Spirit and Hamilton Spirit relating to the agreement between us and the charterer as Suezmax tanker spot rates exceeded the renegotiated charter rate and were greater during 2014 as compared to 2013; and

• an increase of $2.4 million due to higher revenues earned by the Toledo Spirit in 2014 relating to the agreement between us and the charterer.

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Teekay Tankers

Recent Developments in Teekay Tankers

In December 2014, Teekay Tankers signed an agreement to acquire one 2008-built Aframax tanker for the purchase price of $37.0 million and placed $3.7 million in an escrow account in connection with this purchase. The vessel delivered in the first quarter of 2015. In December 2014, Teekay Tankers also signed agreements to acquire four modern LR2 vessels for a total purchase price of $193.3 million, which all delivered during the first quarter of 2015. These acquisitions were financed in part by a public offering in December 2014 of Teekay Tankers’ Class A common stock.

In January 2014, Teekay and Teekay Tankers formed Tanker Investments Ltd. (or TIL), which seeks to opportunistically acquire, operate and sell modern secondhand tankers to benefit from an expected recovery from the then cyclical low of the tanker market. TIL completed a $250 million equity private placement in which we and Teekay Tankers co-invested $25 million each for a combined 20% initial ownership in the new company. In addition, each of Teekay and Teekay Tankers received (a) a preferred share entitling it to appoint one TIL director and (b) a stock purchase warrant to acquire up to an additional 750,000 shares of TIL’s common stock, linked to TIL’s future share price performance. In March 2014, TIL completed a $175 million initial public offering and listed its shares on the Oslo Stock Exchange. In October 2014, Teekay Tankers acquired an additional 0.9 million common shares in TIL, representing 2.43% of the then outstanding share capital of TIL. The common shares were acquired at a price of Norwegian Kroner (or NOK) 69 per share, for an aggregate price of $10.1 million. Following completion of the purchase, Teekay Tankers held 3.4 million common shares in TIL, representing 8.94% of the then outstanding share capital of TIL, and brought the combined interests of us and Teekay Tankers in TIL to 15.43%. In October 2014, TIL authorized a share buyback program for up to $30 million and has repurchased $15.1 million to-date at an average price of NOK 68.49 per share, which resulted in the combined ownership interests of Teekay and Teekay Tankers in TIL to be 16.05% as at December 31, 2014. In January 2014, TIL entered into a long-term management agreement with an affiliate of Teekay, pursuant to which the manager provides to TIL commercial, technical, administrative and corporate services and personnel, including TIL’s executive officers, in exchange for management services fees and reimbursement of expenses.

In August 2014, Teekay Tankers acquired from Teekay a 50% interest in TTOL, which owns the conventional tanker commercial management and technical management operations, including the direct ownership in three commercially managed tanker pools, for an aggregate price of approximately $23.5 million, including net working capital. As partial consideration for this acquisition, Teekay Tankers issued to Teekay 4.2 million Class B common shares, which had an approximate value of $17 million, or $4.03 per share, on the acquisition closing date. In addition, Teekay Tankers reimbursed Teekay for $6.5 million of working capital it assumed from Teekay in connection with the purchase.

In March 2014, Teekay Tankers exercised its rights under security documentation to realize the amounts owed under its investment in term loans and assumed full ownership of two VLCC vessels, which previously secured its investment in term loans. At the time of Teekay Tankers’ assumption of ownership, these vessels had a fair value of approximately $144 million, which exceeded the carrying value of the loans. As a result, in the first quarter of 2014 Teekay Tankers recognized $9.1 million of interest income owing under the loans. In May 2014, Teekay Tankers sold the two wholly-owned subsidiaries, each of which owned one of the VLCCs, to TIL for aggregate proceeds of $154 million, plus related working capital on closing.

Operating Results – Teekay Tankers

The following table compares Teekay Tanker’s operating results and number of calendar-ship-days for its vessels for 2014 and 2013, and compares its net revenues (which is a non-GAAP financial measure) for 2014 and 2013, to revenues, the most directly comparable GAAP financial measure, for the same periods.

(in thousands of U.S. dollars, except calendar-ship-days and percentages)	Year Ended December 31,
	2014			2013
Revenues		235,593			170,087
Voyage expenses		(9,984	)		(8,337	)
Net revenues		225,609			161,750
Vessel operating expenses		(93,022	)		(91,667	)
Time-charter hire expense		(22,160	)		(6,174	)
Depreciation and amortization		(50,152	)		(47,833	)
General and administrative		(11,959	)		(12,594	)
Net gain (loss) on sale of vessels and equipment		9,955			(71	)
Income from vessel operations		58,271			3,411
Equity income		5,228			854
Calendar-Ship-Days(1)
Conventional Tankers		11,418			10,427

(1) Calendar-ship-days presented relate to owned and in-chartered consolidated vessels.

Tanker Market and TCE Rates

Crude tanker spot rates strengthened considerably during 2014, with rates at the end of the year averaging the highest for a fourth quarter since 2008. Demand for crude oil improved throughout 2014, as positive fleet fundamentals and changing trade patterns were coupled with a near 50% drop in the price of crude oil. The drop in the price of oil was due to supply exceeding demand by close to 0.8 mb/d and a decision by OPEC in November 2014 to not cut production in favour of continuing production at around 30 mb/d.

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Lower oil prices have encouraged the filling of both strategic and commercial reserves, particularly in China where the government continues to fill the second stage of its Strategic Petroleum Reserve. In addition, refineries have responded to low oil prices by increasing throughput in order to take advantage of improved refining margins. Further, the fall in the price of oil has translated into a reduction in bunker prices, which has been positive for tanker earnings by lowering voyage operating costs

In the product tanker sector, earnings improved in 2014 over 2013 levels, and by year end averaged the highest for a fourth quarter since 2008. LR2 rates have been supported by record high levels of Asian naphtha imports from the West, coupled with an increase in long-haul product exports as new refineries in the Middle East ramp up production. The reduction in global oil prices has also been positive for the LR2 trade, as lower naphtha prices in relation to LPG has led some petrochemical plants to process more naphtha instead of LPG.

The global tanker fleet grew by 7.2 million deadweight tonnes (mdwt), or 1.4%, in 2014. The majority of the fleet growth during the year was in the product sectors, whereas the crude tanker fleet grew by just 2.2 mdwt, or 0.7%. The global Suezmax and uncoated Aframax fleets reduced in size by three vessels, or 0.6%, and 19 vessels, or 2.9%, respectively. Looking ahead, the global tanker fleet is forecast to grow by only 1.7% in 2015, with growth again weighted towards the product sectors and another year of negative fleet growth expected for the Suezmax and uncoated Aframax sectors.

Global oil demand, based on an average of forecasts from the International Energy Agency, the Energy Information Administration, and OPEC, is forecast to grow by 1.0 million barrels day (mb/d) in 2015, which is 0.1 mb/d higher than demand growth in 2014. Non-OECD countries, and China in particular, account for the majority of the growth. However, the “call on OPEC” crude is expected to increase by approximately 0.1 mb/d during 2015, which could have a positive impact on crude tanker tonne-mile demand in 2015.

The outlook for crude tanker fleet utilization and spot tanker rates is expected to remain positive in 2015 based on a shrinking mid-size crude tanker fleet and a continued increase in tanker tonne-mile demand as more crude oil moves on long-haul trades from the Atlantic to Pacific basins. The impact of low oil prices, high refinery throughput, and increased onshore stockpiling in the first quarter of 2015 are also expected to support positive tanker demand in the first half of 2015.

The following table contains the average TCE rates earned by Teekay Tanker’s vessels for 2014 and 2013. As defined and discussed above, we calculate TCE rates as net revenue per revenue day before related-party pool management fees and pool commissions, and off-hire bunker expenses.

	Year Ended December 31, 2014						Year Ended December 31, 2013
	Net  Revenues (1)(2) (in thousands)		Revenue Days		Average TCE per Revenue Day		Net Revenues (2)(3) (in thousands)		Revenue Days		Average TCE per Revenue Day
Voyage-charter contracts - Suezmax	$	67,221		2,926	$	22,976	$	38,659		2,817	$	13,550
Voyage-charter contracts - Aframax	$	37,777		1,692	$	22,321	$	14,472		1,183	$	12,063
Voyage-charter contracts - LR2	$	30,294		1,698	$	17,842	$	14,633		1,094	$	13,164
Voyage-charter contracts - MR	$	9,828		697	$	14,108	$	7,474		555	$	13,414
Voyage-charter contracts - VLCC	$	1,323		96	$	13,805		—		—		—
Time-charter contracts - Suezmax	$	13,727		676	$	20,292	$	13,560		680	$	19,875
Time-charter contracts - Aframax	$	51,761		2,928	$	17,676	$	57,226		3,314	$	17,140
Time-charter contracts - MR	$	13,170		365	$	36,081	$	16,599		517	$	32,008
Total	$	225,101		11,078	$	20,319	$	162,623		10,160	$	15,861

(1) Excludes a total of $6.9 million in pool management fees and commissions payable for commercial management of our vessels and $1.8 million in off-hire bunker and other expenses.

(2) Excludes interest income from investment in term loans of $9.1 million and $7.7 million for 2014 and 2013, respectively.

(3) Excludes a total of $5.3 million in pool management fees and commissions payable for commercial management of our vessels and $3.2 million in off-hire bunker and other expenses.

Teekay Tankers – Conventional Tankers

As at December 31, 2014, Teekay Tankers owned 27 double-hulled conventional oil tankers, time-chartered in eight Aframax tankers and four LR2 product tankers from third parties and owned a 50% interest in one VLCC.

Income from vessel operations increased to $58.3 million in 2014 compared to $3.4 million in 2013, primarily as a result of:

• an increase of $44.2 million of revenue resulting from higher average realized TCE rates earned by our Suezmax, Aframax and LR2 tankers in 2014 compared to 2013; and

• an increase of $7.2 million due to the addition of seven in-chartered Aframax tankers and four in-chartered LR2 product tankers during 2014 and the full year impact of an Aframax tanker in-chartered in 2013, partially offset by the redelivery of an in-chartered Aframax tanker to its owner in 2013; and

• a gain on sale of vessels of $10.0 million for 2014 related to the sale to TIL of two wholly-owned subsidiaries, each of which owned one VLCC;

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partially offset by

• a decrease of $4.6 million resulting from certain vessels changing employment between fixed-rate charters and voyage charters; and

• a decrease of $2.4 million due to more off-hire days in 2014 compared to 2013 primarily related to scheduled dry dockings.

Equity income increased to $5.2 million in 2014 compared to $0.9 million in 2013, primarily due to an increase of $2.5 million due to new investments in TIL and TTOL during 2014 and an increase of $1.8 million from the High-Q joint venture primarily due to the full year of operations in 2014 of a VLCC which delivered to the joint venture during 2013.

Teekay Parent

Recent Developments in Teekay Parent

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 while the necessary repairs and upgrades were completed and the weather permitted re-installation of the unit on the Banff field. We do not have off-hire insurance covering the Banff FPSO. The repairs and upgrades were completed in 2014, and the Banff FPSO unit resumed production on the Banff field in July 2014, where it is expected to remain under contract until the end of 2020.

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 $0.8 million deductible and the other terms and conditions of the applicable policies. In addition, we incurred certain capital upgrade costs for the Banff FPSO unit and the Apollo Spirit shuttle tanker related to upgrades to the mooring system required by the relevant regulatory authorities due to the extreme weather and sea states experienced during the December 7, 2011 storm. The Apollo Spirit was operating on the Banff field as a storage tanker and returned to service on the Banff field at the same time as the Banff FPSO unit. The total of these capital upgrade costs is approximately $181 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. Any capital upgrade costs not recovered from the charterer are expected to be capitalized to the vessel cost.

In March 2014, Teekay exercised its rights under security documentation to realize the amounts owed under our investment in a term loan and assumed full ownership of one VLCC vessel, which previously secured its investment in the term loan. At the time of Teekay’s assumption of ownership, this vessel had a fair value of approximately $78 million, which exceeded the carrying value of the loan. As a result of the exercise of remedies and the increase in the VLCC vessel value during early 2014, in the first quarter of 2014 we recognized $6.1 million of interest owing under the loan.

Operating Results – Teekay Parent

The following table compares Teekay Parent’s operating results and number of calendar-ship-days for its vessels for 2014 and 2013, and compares its net revenues (which is a non-GAAP financial measure) for 2014 and 2013, to revenues, the most directly comparable GAAP financial measure, for the same periods.

(in thousands of U.S. dollars, except calendar-ship-days)	Offshore Production						Conventional Tankers						Other and Corporate G&A						Teekay Parent Total
	2014			2013			2014			2013			2014			2013			2014			2013
Revenues		259,945			282,687			94,376			83,520			95,791			73,801			450,112			440,008
Voyage expenses		(15	)		—			(8,855	)		(2,609	)		263			(195	)		(8,607	)		(2,804	)
Net revenues		259,930			282,687			85,521			80,911			96,054			73,606			441,505			437,204
Vessel operating expenses		(212,159	)		(212,328	)		(29,633	)		(35,752	)		(26,488	)		(18,477	)		(268,280	)		(266,557	)
Time-charter hire expense		(29,623	)		(32,276	)		(54,720	)		(93,576	)		(42,426	)		(40,064	)		(126,769	)		(165,916	)
Depreciation and amortization		(78,630	)		(77,551	)		(2,216	)		(9,882	)		774			2,306			(80,072	)		(85,127	)
General and administrative (1)		(21,778	)		(26,721	)		(3,992	)		(7,093	)		(9,321	)		(25,188	)		(35,091	)		(59,002	)
Asset (impairments) recoveries		—			—			—			(92,699	)		—			20,040			—			(72,659	)
Loan loss provision reversal (provision)		2,521			(2,634	)		—			—			—			1,886			2,521			(748	)
Net gain (loss) on sale of vessels and equipment		935			1,337			(502	)		—			—			1,030			433			2,367
Restructuring charges		—			—			(6,865	)		—			(1,105	)		(2,774	)		(7,970	)		(2,774	)
(Loss) income from vessel operations		(78,804	)		(67,486	)		(12,407	)		(158,091	)		17,488			12,365			(73,723	)		(213,212	)
Equity (loss) income		(1,357	)		4,649			3,052			1,291			(2,546	)		(269	)		(851	)		5,671
Calendar-Ship-Days(2)
FPSO Units		1,444			1,460			—			—			—			—			1,444			1,460
Conventional Tankers		—			—			3,667			5,413			—			—			3,667			5,413
Gas carriers		—			—			—			—			730			730			730			730
FSO Units		—			—			—			—			503			365			503			365

(1) Includes direct general and administrative expenses and indirect general and administrative expenses allocated to offshore production, conventional tankers and other and corporate G&A based on estimated use of corporate resources.

(2) Apart from three FPSO units and one conventional tanker, all remaining calendar-ship-days presented relate to in-chartered days.

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Teekay Parent – Offshore Production

Offshore Production consists of our FPSO units. As at December 31, 2014, we had a direct interest in three 100% owned FPSO units and one FPSO which delivered in 2014 but is not yet fully in service.

The charter contract for the Petrojarl I FPSO unit ended in April 2013 and the unit has since been off-hire. In December 2014, we sold the Petrojarl I FPSO unit to Teekay Offshore.

From the fourth quarter of 2012 through the fourth quarter of 2014, the Foinaven FPSO unit experienced lower than planned production levels due to equipment-related operational issues. In July 2013, we and the charterer agreed to halt production temporarily in order to repair the FPSO unit’s two gas compression trains and repair the charterer’s subsea system. The first compressor train was repaired in August 2013, allowing the unit to recommence partial operations. In March 2014, the Foinaven FPSO unit temporarily halted production as a result of issues with its one operating gas compressor train, and as its second compressor train had not yet completed its repair after sustaining damage in July 2013. In April 2014, one of the Foinaven FPSO’s compressor trains was repaired allowing the unit to recommence partial operations. Repairs to the second compressor train were completed in July 2014, after which the unit was available to produce at its maximum capacity. However, due to issues with the subsea flow lines, which are the responsibility of the charterer, the field has been unable to produce at maximum capacity. In addition, the Foinaven FPSO charter contract includes incentives based on total oil production in the year, certain operational measures, and the average annual oil price. The decline in the price of oil in the fourth quarter of 2014 negatively impacted our incentive compensation for 2014 and may negatively impact our revenues in future periods if the oil price remains at or falls from current levels.

In May 2014, the customer extended the Hummingbird Spirit FPSO unit’s charter contract by a firm period of one year until December 31, 2015, with charterer’s options to extend the contract up to March 2017. The Hummingbird Spirit FPSO charter contract also includes an incentive based on the oil price in which our compensation will be negatively impacted by the recent decline in oil prices and any continuation or deterioration of current prices.

As discussed above, the Banff FPSO unit completed its repairs and upgrades following storm damage in December 2011, and resumed production on the Banff field in July 2014.

We accounted for the Voyageur Spirit as a VIE from November 2011 to May 2013 when we acquired the unit and immediately sold the unit to Teekay Offshore.

The number of Teekay Parent’s FPSO units for 2014 decreased compared to the same periods last year due to the sale of the Petrojarl I FPSO unit to Teekay Offshore in December 2014.

Loss from vessel operations increased to $78.8 million during 2014 compared to $67.5 million in 2013, primarily as a result of:

• an increase of $9.7 million related to the Petrojarl Foinaven due to lower tariff revenue resulting from lower production and higher repairs and maintenance caused by the compressor and sub-sea issues discussed above;

• an increase of $9.6 million due to the Petrojarl I FPSO unit’s contract expiration and subsequent lay-up;

• an increase of $4.9 million incurred for pre-operating costs on the Knarr FPSO unit prior to its mobilization to the North Sea; and

• an increase of $3.2 million relating to the Hummingbird Spirit FPSO unit, primarily due to higher repairs and maintenance costs associated with mooring line repairs and lower amortization of an in-process revenue contract as the amortization period was completed;

partially offset by:

• a decrease of $9.2 million due to the Petrojarl Banff FPSO unit recommencing operations under its time-charter contract in July 2014, partially offset by lower amortization of the in-process revenue contract as a result of the extension of the amortization period compared to 2013;

• a decrease of $5.2 million related to the reversal in 2014 of a $2.5 million provision for a FPSO front-end engineering and design (or FEED) study completed in 2013 which was provided for in 2013 (please read “Item 18 – Financial Statements: Note 18b – Asset Impairments and Provisions”); and

• a decrease of $2.6 million related to FEED studies completed during the third quarter of 2013 for which we received compensation.

Teekay Parent – Conventional Tankers

As at December 31, 2014, Teekay Parent had a direct interest in one conventional tanker, two chartered-in conventional tankers from third parties, and four chartered-in conventional tankers from Teekay Offshore. The average fleet size (including vessels chartered-in), as measured by calendar-ship-days, decreased in 2014 compared with 2013 due to the redeliveries to their owners of two chartered-in Suezmax tankers, six chartered-in Aframax tankers and one chartered-in MR product tanker during 2014, and the sale of four Suezmax tankers during 2014, partially offset by a new time-charter arrangement for two Aframax tankers during 2014 and the addition of one VLCC during 2014. The collective impact from the above noted fleet changes are referred to below as the Net Fleet Reductions.

Loss from vessel operations decreased to $12.4 million during 2014 compared to $158.1 million in 2013, primarily as a result of:

• a decrease of $92.7 million from the write down in 2013 of four Suezmax tankers to their estimated fair value of $163.2 million, which consisted of their sale price;

• a net decrease of $45.6 million due to the Net Fleet Reductions; and

• a net decrease of $8.0 million due to higher average spot tanker TCE rates;

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partially offset by

• a $6.9 million restructuring charge in 2014 for the termination of the employment of certain seafarers upon the redelivery of an in-chartered MR product tanker to its owner in 2014. Please read Item 18. Financial Statements: Note 20—Restructuring Charges.

Teekay Parent – Other and Corporate G&A

As at December 31, 2014, Teekay Parent had two chartered-in LNG carriers owned by Teekay LNG, two chartered-in FSO units owned by Teekay Offshore, and interest income received from, and reversal of previously recognized loss provision on, an investment in a term loan.

Income from vessel operations increased to $17.5 million during 2014 compared to $12.4 million in 2013, primarily as a result of:

• an increase of $15.9 million due to lower general and administrative expenses in 2014, primarily as a result of business development fees received from subsidiaries and various cost-saving initiatives that we have undertaken;

• an increase of $6.1 million due to the Arctic Spirit being off-hire for 41 days in 2013 for a scheduled dry docking;

• an increase of $6.1 million mainly due to the interest income recognized in 2014 related to Teekay Parent’s investment in a term loan which was entered into during 2011; and

• an increase of $4.0 million from transaction fees received from TIL for our arrangement of the purchasing and selling of their vessels;

partially offset by

• a decrease of $20.4 million due to the reversal in 2013 of impairment charges initially recognized in 2012 (Teekay Offshore recognized impairment charges of $18.1 million relating to two conventional tankers during 2013; Teekay Parent had already recognized these impairment charges during the three months ended December 31, 2012 and, therefore, reversed the impairment charge on consolidation. Teekay Parent further reversed $1.9 million in 2013 of a previously recognized loss provision relating to an investment in a term loan; and

• a decrease of $2.1 million due to a crew pension adjustment from our Australian operations in 2013.

Equity (loss) income decreased to $(0.9) million in 2014 compared to $5.7 million in 2013, primarily due to lower license fee revenues, higher consulting costs, a one-time office lease settlement payment during 2014 in Teekay Parent’s 43% investment in Sevan Marine ASA, and the sale of Teekay Parent’s 50% interest in the Itajai FPSO unit to Teekay Offshore in June 2013.

Other Consolidated Operating Results

The following table compares our other consolidated operating results for 2014 and 2013:

(in thousands of U.S. dollars, except percentages)	Year Ended December 31,
	2014			2013			% Change
Interest expense		(208,529	)		(181,396	)		15.0
Interest income		6,827			9,708			(29.7	)
Realized and unrealized (losses) gains on non-designated derivative instruments		(231,675	)		18,414			(1,358.1	)
Foreign exchange gain (loss)		13,431			(13,304	)		(201.0	)
Other (loss) income		(1,152	)		5,646			(120.4	)
Income tax expense		(10,173	)		(2,872	)		254.2

Interest expense. Interest expense increased to $208.5 million in 2014, compared to $181.4 million in 2014, primarily due to:

• an increase of $22.1 million due to the $300 million senior unsecured bonds issued by Teekay Offshore during the second quarter of 2014 and the borrowings by Teekay Offshore relating to the Voyageur Spirit FPSO, the four BG Shuttle Tankers that commenced operations during 2013 and early-2014, and the Suksan Salamander which commenced operations in the second quarter of 2014;

• an increase of $7.0 million relating to two new debt facilities of Teekay LNG used to fund the deliveries of the two Awilco LNG Carriers in late-2013; and

• an increase of $5.2 million primarily from Teekay Offshore’s issuance of NOK 1,000 million senior unsecured bonds in January 2014, partially offset by the repurchase by Teekay Offshore of NOK 388.5 million of the existing NOK 600 million senior unsecured bond issue during the first quarter of 2013 and of the remaining NOK 211.5 million that matured in November 2013;

• an increase of $4.7 million as a result of the Teekay LNG NOK 900 million bond issuance in September 2013; and

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• an increase of $3.0 million relating to accelerated amortization of Teekay Nakilat Joint Venture’s deferred debt issuance cost upon the termination of the leasing of the RasGas II LNG Carriers and related debt refinancing in 2014;

partially offset by

• a decrease of $7.8 million due to a decrease in LIBOR and due to debt repayments during 2013 and in 2014; and

• a decrease of $5.8 million due to lower interest on capital lease obligations due to the sales of the Tenerife Spirit, Algeciras Spirit and Huelva Spirit in December 2013, February 2014 and August 2014, respectively, and related cancelations of the capital leases.

Realized and unrealized (losses) gains on non-designated derivative instruments. Realized and unrealized (losses) gains 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 income (loss). Net realized and unrealized (losses) gains on non-designated derivatives were $(231.7) million for 2014, compared to $18.4 million for 2013, as detailed in the table below:

(in thousands of U.S. Dollars)	Year Ended December 31,
	2014			2013
Realized losses relating to:
Interest rate swap agreements		(125,424	)		(122,439	)
Interest rate swap agreement terminations		(1,319	)		(35,985	)
Foreign currency forward contracts		(4,436	)		(2,027	)
		(131,179	)		(160,451	)
Unrealized (losses) gains relating to:
Interest rate swap agreements		(86,045	)		182,800
Foreign currency forward contracts		(16,926	)		(3,935	)
Stock purchase warrants		2,475			—
		(100,496	)		178,865
Total realized and unrealized (losses) gains on derivative instruments		(231,675	)		18,414

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) gains on interest rate swaps for 2014 and 2013 were primarily due to changes in the forward interest rates.

During 2014 and 2013, we had interest rate swap agreements with aggregate average net outstanding notional amounts of approximately $3.6 billion and $3.8 billion, respectively, with average fixed rates of approximately 3.6% and 3.6%, respectively. Short-term variable benchmark interest rates during these periods were generally less than 1.0% and, as such, we incurred realized losses of $125.4 million and $122.4 million during 2014 and 2013, respectively, under the interest rate swap agreements. We also incurred realized losses of $1.3 million during 2014 from the termination of interest rate swaps relating to three capital leases, partially offset by a gain on an early termination of one interest rate swap, compared to losses of $36.0 million during 2013 from the termination of two interest rate swaps, one of which was terminated prior to our acquisition of the Voyageur Spirit FPSO unit and while we accounted for the unit as a VIE.

Primarily as a result of significant changes in long-term benchmark interest rates during 2014 and 2013, we recognized unrealized losses of $86.0 million for 2014 compared with unrealized gains of $182.8 million for 2013 under the interest rate swap agreements. Primarily as a result of the weakening NOK during 2014 from 2013, we recognized unrealized losses of $16.9 million for 2014 compared with $3.9 million for 2013 under the foreign currency forward contracts.

In January 2014, we and Teekay Tankers formed TIL. We and Teekay Tankers purchased 5.0 million shares of common stock, representing an initial aggregate 20% interest in TIL, as part of a $250 million private placement by TIL, which represented a total investment by us and Teekay Tankers of $50.0 million. In addition, we and Teekay Tankers received stock purchase warrants entitling us and Teekay Tankers to purchase an aggregate of up to 1.5 million shares of common stock of TIL at a fixed price of $10 per share. Alternatively, if the shares of TIL’s common stock trade on a National Stock Exchange or over-the-counter market denominated in NOK, we and Teekay Tankers may also exercise their stock purchase warrants at 61.67 NOK per share using a cashless exercise procedure. During the 2014, we recognized a $2.5 million unrealized gain on the stock purchase warrants which are included in the total unrealized derivative (losses) gains. Please read “Item 18. Financial Statements: Note 15 - Derivative Instruments and Hedging Activities.”

Foreign Exchange Gain (Loss). Foreign currency exchange gains (losses) were $13.4 million in 2014 compared to $(13.3) million in 2013. Our foreign currency exchange gains (losses), substantially all of which are unrealized, are due primarily to the relevant period-end revaluation of our NOK-denominated debt and our Euro-denominated term loans, capital leases and restricted cash for financial reporting purposes and the realized and unrealized (losses) gains on our cross currency swaps. Gains on NOK-denominated and Euro-denominated monetary liabilities reflect a stronger U.S. Dollar against the NOK and Euro on the date of revaluation or settlement compared to the rate in effect at the beginning of the period. Losses on NOK-denominated and Euro-denominated monetary liabilities reflect a weaker U.S. Dollar against the NOK and Euro on the date of revaluation or settlement compared to the rate in effect at the beginning of the period. During 2013, Teekay Offshore repurchased NOK 388.5 million of its existing NOK 600 million senior unsecured bond issue that matured in November 2013. Associated with this repurchase, we recorded $6.6 million of realized losses on the repurchased bonds, and recorded $6.8 million of realized gains on the settlements of the associated cross currency swap. For 2014, foreign currency exchange gains include realized losses of $4.0 million (2013 - gains of $2.1 million) and unrealized losses of $167.3 million (2013 - $65.4 million) on our cross currency swaps and unrealized gains of $156.2 million (2013 - $53.8 million) on the revaluation of our NOK-denominated debt. For 2014, foreign currency exchange gains (losses) include the revaluation of our Euro-denominated restricted cash, debt and capital leases of $34.3 million as compared to $(12.5) million for 2013.

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Income Tax Expense. Income tax expense was $10.2 million in 2014 compared to $2.9 million in 2013. The increase in income tax expense for 2014 was primarily due to higher income in 2014 from the termination of capital lease obligations and refinancing in the Teekay Nakilat Joint Venture, lower net reversals of uncertain tax position accruals during 2014, recognition of valuation allowances against deferred tax assets during 2014, utilization of tax losses relating to certain entities in Norway, United Kingdom and Australia, partially offset by an increase in loss carry-forwards relating to certain entities in Norway.

Year Ended December 31, 2013 versus Year Ended December 31, 2012

Teekay Offshore

Operating Results – Teekay Offshore

The following table compares Teekay Offshore’s operating results and number of calendar-ship-days for its vessels for 2013 and 2012, and compares its net revenues (which is a non-GAAP financial measure) for 2013 and 2012, to revenues, the most directly comparable GAAP financial measure, for the same periods.

(in thousands of U.S. dollars, except  calendar-ship-days)	Offshore Logistics						Offshore Production						Conventional Tankers						Teekay Offshore Total
	2013			2012			2013			2012			2013(2)			2012(2)			2013(2)			2012(2)
Revenues		611,035			632,420			284,932			231,688			55,010			100,086			950,977			964,194
Voyage expenses		(99,111	)		(104,794	)		—			—			(5,214	)		(21,890	)		(104,325	)		(126,684	)
Net revenues		511,924			527,626			284,932			231,688			49,796			78,196			846,652			837,510
Vessel operating expenses		(185,699	)		(199,212	)		(152,616	)		(111,855	)		(9,664	)		(20,795	)		(347,979	)		(331,862	)
Time-charter hire expense		(56,682	)		(56,989	)		—			—			—			—			(56,682	)		(56,989	)
Depreciation and amortization		(126,091	)		(131,959	)		(66,404	)		(50,905	)		(7,747	)		(11,767	)		(200,242	)		(194,631	)
General and administrative (1)		(24,374	)		(21,984	)		(17,742	)		(11,208	)		(3,134	)		(2,567	)		(45,250	)		(35,759	)
Asset impairments		(76,782	)		(24,542	)		—			—			(18,164	)		(1,693	)		(94,946	)		(26,235	)
Net loss on sale of vessels and equipment		—			—			—			—			(301	)		(5,982	)		(301	)		(5,982	)
Restructuring charges		(2,169	)		(647	)		—			—			(192	)		(468	)		(2,361	)		(1,115	)
Income from vessel operations		40,127			92,293			48,170			57,720			10,594			34,924			98,891			184,937
Equity income		—			—			6,731			—			—			—			6,731			—
Calendar-Ship-Days(3)
Shuttle Tankers		12,370			12,989			—			—			—			—			12,370			12,989
FSO Units		2,100			1,830			—			—			—			—			2,100			1,830
FPSO Units		—			—			1,339			1,098			—			—			1,339			1,098
Conventional Tankers		—			—			—			—			1,888			3,437			1,888			3,437

(1) Includes direct general and administrative expenses and indirect general and administrative expenses allocated to offshore logistics, offshore production and conventional tankers based on estimated use of corporate resources.

(2) Operating results of conventional tankers sold by Teekay Offshore during 2013 and 2012 are presented herein as they considered part of income from continuing operations from the perspective of Teekay consolidated as we continue to operate and re-invest in this line of business, although re-investment is not expected to occur within Teekay Offshore. In Teekay Offshore, these vessels have been accounted for as discontinued operations.

(3) Calendar-ship-days presented relate to owned and in-chartered consolidated vessels.

Teekay Offshore – Offshore Logistics

Offshore Logistics consists of Teekay Offshore’s shuttle tankers, FSO units and HiLoad unit. As at December 31, 2013, Teekay Offshore’s shuttle tanker fleet consisted of 36 vessels that operated under fixed-rate contracts of affreightment, time charters and bareboat charters. Of the 36 shuttle tankers, six were owned through 50% owned subsidiaries, three through a 67% owned subsidiary and three were chartered-in (of which one was redelivered to its owner in January 2014), with the remainder owned 100% by Teekay Offshore.

As at December 31, 2013, Teekay Offshore’s FSO fleet consisted of five units that operate under fixed-rate time charters or fixed-rate bareboat charters. During the second quarter of 2013, Teekay Offshore committed to converting one of its shuttle tankers, the Navion Clipper, into an FSO unit. Teekay Offshore has 100% ownership interests in the operating FSO units.

The average size of Teekay Offshore’s owned shuttle tanker fleet decreased in 2013 compared to 2012, primarily due to the sale of the Navion Fennia in July 2012, the sale of the Navion Savonita in December 2012, the sale of the Basker Spirit in January 2013, the in-progress conversion of the Navion Clipper to an FSO unit, and the redelivery of one of Teekay Offshore’s in-chartered shuttle tankers in December 2013, partially offset by the delivery of the four BG Shuttle Tankers to Teekay Offshore during 2013. Included in calendar-ship-days is one owned shuttle tanker that has been in lay-up since May 2012 following its redelivery to Teekay Offshore upon maturity of its time-charter-out contract in April 2012.

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The average number of Teekay Offshore’s FSO units for 2013 increased from 2012 due to the commencement of the conversion of the Navion Clipper shuttle tanker to an FSO unit in April 2013.

Income from vessel operations decreased to $40.1 million in 2013 compared to $92.3 million in 2012, primarily as a result of:

• A decrease of $52.2 million related to asset impairments of $76.8 million during 2013 for six shuttle tankers that were written down to their estimated fair value as the result of the re-contracting of one of the vessels at lower rates than expected, the cancellation of a short-term contract and a change in expectations for the contract renewal for two of the shuttle tankers, a cancellation of a contract renewal and expected sale of an aging vessel; compared to $24.5 million in asset impairments in 2012 related to five of Teekay Offshore’s shuttle tankers;

• a decrease of $6.8 million due to the sale of the Navion Savonita in December 2012; and

• a decrease of $2.0 million due to fewer opportunities to trade excess capacity in the conventional spot market;

partially offset by

• an increase of $5.9 million from lower depreciation expense in 2013 mainly due to the lay-up of two vessels following their redelivery to Teekay Offshore in April 2012 and November 2012, the sale of vessels in 2013 and 2012 and the asset impairments taken in 2013 and 2012, partially offset by the delivery of the four BG Shuttle Tankers; and

• an increase of $1.1 million due to the commencement of the ten-year time-charter contracts in June 2013, August 2013 and November 2013 for three of the four BG Shuttle Tankers, the Samba Spirit, the Lambada Spirit and the Bossa Nova Spirit, respectively.

Teekay Offshore – Offshore Production

Offshore Production consists of Teekay Offshore’s FPSO units. As at December 31, 2013, Teekay Offshore’s FPSO fleet consisted of the Petrojarl Varg, the Cidade de Rio das Ostras (or Rio das Ostras), the Piranema Spirit and the Voyageur Spirit FPSO units, all of which Teekay Offshore owns 100%, and a 50% interest in the Itajai FPSO unit. Teekay Offshore acquired the Voyageur Spirit FPSO unit and its interest in the Itajai FPSO unit from us in May 2013 and June 2013, respectively.

On April 13, 2013, the Voyageur Spirit FPSO unit began production and on May 2, 2013, Teekay Offshore acquired the unit from us. Upon commencing production, Teekay Offshore had a specified time period to receive final acceptance from the charterer; however due to a defect encountered in one of its two gas compressors, the FPSO unit was unable to achieve final acceptance within the allowable timeframe resulting in the FPSO unit being declared off-hire by the charterer retroactive to April 13, 2013. On August 27, 2013, repairs to the defective gas compressor on the Voyageur Spirit FPSO unit were completed and the unit achieved full production capacity. Teekay Offshore entered into an interim agreement with E.ON Ruhrgas UK GP Limited (or E.ON), the charterer, whereby Teekay Offshore was compensated for production beginning August 27, 2013 until final acceptance on February 22, 2014. Until the Voyageur Spirit FPSO unit was declared on hire, we indemnified Teekay Offshore for certain production shortfalls and unreimbursed vessel operating expenses. For the period from April 13, 2013 to December 31, 2013, we indemnified Teekay Offshore for a total of $34.9 million for production shortfalls and unreimbursed repair costs. Amounts paid as indemnification from us to Teekay Offshore were treated as a reduction in the purchase price Teekay Offshore paid for the FPSO unit.

The number of Teekay Offshore’s FPSO units for 2013 increased compared to 2012 due to the acquisition of the Voyageur Spirit on May 2, 2013.

Income from vessel operations decreased to $48.2 million in 2013 from $57.7 million in 2012, primarily as a result of:

• a decrease of $6.5 million due to additional general and administrative expenses relating to the acquisition of the Voyageur Spirit FPSO unit in May 2013;

• a decrease of $6.4 million due to the Rio das Ostras earning a 95% standby rate while it was in shutdown and being relocated to a new oil field in 2013, a lower credit earned from the charterer for unused maintenance days under the service contract and higher maintenance work while on shutdown and being relocated to a new oil field in 2013; and

• a decrease of $5.6 million due to higher crew and manning costs mainly relating to the Petrojarl Varg due to higher salaries, crew levels and crew expenses and higher maintenance costs due to increased class work performed during 2013;

partially offset by

• an increase of $6.8 million, excluding general and administrative expenses, due to the acquisition of the Voyageur Spirit FPSO unit in May 2012, partially offset by higher repair and maintenance costs on the unit in 2013;

Equity income was $6.7 million for 2013 relating to Teekay Offshore’s 50% ownership interest in the Itajai FPSO unit, which Teekay Offshore acquired from us in June 2013.

Teekay Offshore – Conventional Tankers

As at December 31, 2013, Teekay Offshore owned 100% interests in two Aframax conventional crude oil tankers (which operate under fixed-rate time charters with us), and two vessels, that have additional equipment for lightering, which operated under fixed-rate bareboat charters with Skaugen PetroTrans (our 50% owned joint venture).

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In addition, the table above includes six additional conventional tankers that Teekay Offshore owns, including one tanker sold during the third quarter of 2013, two tankers sold during the first half of 2013 and three tankers sold in the second half of 2012. During the first and second quarters of 2013 and the second quarter of 2012, Teekay Offshore terminated the long-term time-charter-out contracts employed by three of Teekay Offshore’s conventional tankers with a subsidiary of ours. Teekay Offshore received early termination fees from us of $6.8 million, $4.5 million and $14.7 million in the first and second quarter of 2013 and the second quarter of 2012, respectively.

Income from vessel operations decreased to $10.6 million in 2013 from $34.9 million in 2012, primarily as a result of asset impairments during 2013, the related sale of three vessels during 2013 and the three tankers sold in the second half of 2012, partially offset by termination fees received by Teekay Offshore from Teekay Parent in 2013 as a result of Teekay Parent’s early cancellation of in-charter contracts from Teekay Offshore.

Teekay LNG

Operating Results – Teekay LNG

The following table compares Teekay LNG’s operating results and number of calendar-ship-days for its vessels for 2013 and 2012, and compares its net revenues (which is a non-GAAP financial measure) for 2013 and 2012, to revenues, the most directly comparable GAAP financial measure, for the same periods.

(in thousands of U.S. dollars, except calendar-ship-days)	Liquefied Gas Carriers						Conventional Tankers						Teekay LNG Total
	2013			2012			2013			2012			2013			2012
Revenues		285,694			278,511			113,582			113,740			399,276			392,251
Voyage expenses		(407	)		(66	)		(2,450	)		(1,706	)		(2,857	)		(1,772	)
Net revenues		285,287			278,445			111,132			112,034			396,419			390,479
Vessel operating expenses		(55,459	)		(50,124	)		(44,490	)		(44,412	)		(99,949	)		(94,536	)
Depreciation and amortization		(71,485	)		(69,064	)		(26,399	)		(30,761	)		(97,884	)		(99,825	)
General and administrative (1)		(13,913	)		(13,224	)		(6,531	)		(5,736	)		(20,444	)		(18,960	)
Asset impairments		—			—			—			(29,367	)		—			(29,367	)
Restructuring charges		—			—			(1,786	)		—			(1,786	)		—
Income from vessel operations		144,430			146,033			31,926			1,758			176,356			147,791
Equity income		123,282			78,866			—			—			123,282			78,866
Calendar-Ship-Days(2)
Liquefied Gas Carriers		5,981			5,856			—			—			5,981			5,856
Conventional Tankers		—			—			3,994			4,026			3,994			4,026

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

(2) Calendar-ship-days presented relate to consolidated vessels.

Teekay LNG – Liquefied Gas Carriers

As at December 31, 2013, Teekay LNG’s liquefied gas fleet, including newbuildings, included 34 LNG carriers and 33 LPG/Multigas carriers, in which its interests ranged from 33% to 100%. The number of calendar-ship-days for Teekay LNG’s liquefied gas carriers consolidated in its financial results increased to 5,981 days in 2013 from 5,856 days in 2012, as a result of the acquisition and delivery of the two Awilco Carriers on September 16, 2013 and November 28, 2013, respectively.

Income from vessel operations decreased to $144.4 million in 2013 compared to $146.0 million in 2012, primarily as a result of:

• a decrease of $4.3 million due to the Catalunya Spirit being off-hire for 21 days in 2013 for a scheduled dry docking; and

• a decrease of $2.6 million due to the Arctic Spirit being off-hire for 41 days in 2013 for a scheduled dry docking and an off-hire adjustment incurred associated with its dry docking in 2013;

partially offset by:

• an increase of $5.0 million as a result of the acquisition and delivery of the Awilco LNG Carriers on September 16, 2013 and November 28, 2013.

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Equity income related to Teekay LNG’s liquefied gas carriers increased to $123.3 million in 2013 compared to $78.9 million in 2012, as set forth in the table below:

	Angola LNG Carriers		Exmar LNG Carriers		Exmar LPG Carriers		MALT LNG Carriers		RasGas 3 LNG Carriers		Total Equity Income
Year ended December 31, 2013		29,178		10,650		17,415		43,428		22,611		123,282
Year ended December 31, 2012		13,015		7,994		—		39,349		18,508		78,866
Change		16,163		2,656		17,415		4,079		4,103		44,416

Equity income increased for 2013 by $44.4 million from the prior year, primarily as a result of:

• an increase of $17.4 million due to Teekay LNG’s acquisition of a 50% ownership interest in Exmar LPG BVBA in February 2013;

• an increase of $16.2 in Teekay LNG’s 33% investment in the four Angola LNG Carriers, primarily due to the change in unrealized gains on derivative instruments as a result of long-term LIBOR benchmark interest rates increasing, as compared to 2012;

• an increase of $7.6 million from a full year of operations from Teekay LNG’s 52% ownership interest in the six Malt Carriers, which interest was acquired in February 2012;

• an increase of $4.1 million in Teekay LNG’s 40% investment in the four LNG carriers owned by the RasGas 3 Joint Venture, primarily due to the change in unrealized gains on derivative instruments as a result of long-term LIBOR benchmark interest rates increasing, as compared to 2012; and

• an increase of $2.7 million due to higher net income from Teekay LNG’s 50% investment in two LNG carriers from its LNG joint venture with Exmar NV (or Exmar LNG Carriers) primarily resulting from a provision from a customer’s claim relating to the two LNG carriers in 2012 and from the off-hire of Excalibur for scheduled dry docking during 2012;

partially offset by:

• a decrease of $2.4 million primarily due to the dry docking of the Methane Spirit during March 2013 resulting in 28 off-hire days and higher interest margins upon completion of debt refinancing within the Teekay LNG-Marubeni Joint Venture relating to the MALT LNG Carriers in June and July 2013; and

• a decrease of $1.0 million relating to the ineffective portion of the hedge accounted interest rate swap within the Teekay LNG-Marubeni Joint Venture that was entered into during 2013.

Teekay LNG – Conventional Tankers

As at December 31, 2013, Teekay LNG’s conventional tanker fleet included nine Suezmax-class double-hulled conventional crude oil tankers and one Handymax Product tanker, six of which it owns and four of which it leases under capital leases. All of Teekay LNG’s conventional tankers operated under fixed-rate charters. The number of calendar-ship-days for Teekay LNG’s conventional tankers decreased to 3,994 days in 2013 from 4,026 days in 2012 as the charterer and owner of five of Teekay LNG’s conventional vessels under capital lease sold the Tenerife Spirit in December 2013 and on redelivery of the vessel to the owner, the charter contract with Teekay LNG was terminated.

Income from vessel operations increased to $31.9 million during 2013 compared to $1.8 million in 2012, primarily as a result of:

• an increase of $29.4 million due to vessel write-downs and a $4.4 million increase due to lower depreciation in 2013, relating to the write-downs of Algeciras Spirit, Huelva Spirit and Tenerife Spirit in the fourth quarter of 2012, partially offset by the accelerated amortization of the intangible assets relating to the charter contracts of these vessels as Teekay LNG expected the life of these intangible assets to be shorter than originally assumed in prior periods;

partially offset by:

• a decrease of $2.5 million in net revenues due to the African Spirit, Asian Spirit and European Spirit being off-hire for 26, 22, and 25 days, respectively, as a result of scheduled dry dockings during 2013; and

• a decrease of $1.8 million in restructuring charges in 2013 was related to the seafarer severance payments upon the owner selling Teekay LNG’s vessels under capital lease, the Tenerife Spirit and Algeciras Spirit.

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Teekay Tankers

Operating Results – Teekay Tankers

The following table compares Teekay Tanker’s operating results and number of calendar-ship-days for its vessels for 2013 and 2012, and compares its net revenues (which is a non-GAAP financial measure) for 2013 and 2012, to revenues, the most directly comparable GAAP financial measure, for the same periods.

(in thousands of U.S. dollars, except calendar-ship-days and percentages)	Year Ended December 31,
	2013			2012
Revenues		170,087			197,429
Voyage expenses		(8,337	)		(4,618	)
Net revenues		161,750			192,811
Vessel operating expenses		(91,667	)		(96,160	)
Time-charter hire expense		(6,174	)		(3,950	)
Depreciation and amortization		(47,833	)		(72,365	)
General and administrative		(12,594	)		(7,985	)
Asset impairments		—			(351,355	)
Net loss on sale of vessels and equipment		(71	)		(1,191	)
Income (loss) from vessel operations		3,411			(340,195	)
Equity income (loss)		854			(1	)
Calendar-Ship-Days(1)
Conventional Tankers		10,427			10,610

(1) Calendar-ship-days presented relate to consolidated vessels.

Teekay Tankers – Conventional Tankers

As at December 31, 2013, Teekay Tankers owned 27 double-hulled conventional oil tankers, time-chartered in one Aframax tanker from third party and owned a 50% interest in one VLCC.

Income from vessel operations increased to $3.4 million in 2013 compared to a loss of $340.2 million in 2012, primarily as a result of:

• an increase of $379.5 million due to impairment charges associated with seven Suezmax tankers, four Aframax tankers and one product tanker recorded in fourth quarter of 2012, which also resulted in lower depreciation and amortization; and

• an increase of $2.6 million of savings in vessel operating expenses and depreciation and amortization due to the sale of the Nassau Spirit in January 2013;

partially offset by

• a decrease of $13.1 million resulting from various vessels changing employment between fixed-rate charters and voyage charters in 2013, and redeliveries of three in-chartered Aframax tankers to their owners in March 2012, June 2012 and July 2013, partially offset by the addition of an in-chartered Aframax tanker in 2013;

• a decrease of $6.7 million of revenue resulting from lower average realized TCE rates in 2013 compared to 2012;

• a decrease of $5.3 million due to an increase in administrative and strategic fees due to the increase in fleet size and increase in management cost allocations in 2013;

• a decrease of $3.8 million due to a decrease in interest income earned on Teekay Tankers’ investments in term loans;

• a decrease of $2.3 million due to an increase in pool management costs, pool commissions and off-hire bunker expenses in 2013 compared to 2012; and

• a decrease of $1.1 million due to more off-hire days in 2013 compared to 2012.

Equity income increased by $0.9 million in 2013 due to a VLCC that is jointly owned by Teekay Tankers and which delivered to the joint venture during 2013.

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Teekay Parent

Operating Results – Teekay Parent

The following table compares Teekay Parent’s operating results and number of calendar-ship-days for its vessels for 2013 and 2012, and compares its net revenues (which is a non-GAAP financial measure) for 2013 and 2012, to revenues, the most directly comparable GAAP financial measure, for the same periods.

(in thousands of U.S. dollars, except calendar-ship-days)	Offshore Production						Conventional Tankers						Other and Corporate G&A						Teekay Parent Total
	2013			2012			2013			2012			2013			2012			2013			2012
Revenues		282,687			349,647			83,520			150,246			73,801			84,609			440,008			584,502
Voyage expenses		—			—			(2,609	)		(6,572	)		(195	)		64			(2,804	)		(6,508	)
Net revenues		282,687			349,647			80,911			143,674			73,606			84,673			437,204			577,994
Vessel operating expenses		(212,328	)		(242,133	)		(35,752	)		(33,376	)		(18,477	)		(15,259	)		(266,557	)		(290,768	)
Time-charter hire expense		(32,276	)		(21,741	)		(93,576	)		(161,654	)		(40,064	)		(43,307	)		(165,916	)		(226,702	)
Depreciation and amortization		(77,551	)		(77,161	)		(9,882	)		(11,238	)		2,306			(678	)		(85,127	)		(89,077	)
General and administrative(1)		(26,721	)		(27,091	)		(7,093	)		(7,362	)		(25,188	)		(39,543	)		(59,002	)		(73,996	)
Asset (impairments) recoveries		—			—			(92,699	)		—			20,040			(25,239	)		(72,659	)		(25,239	)
Loan loss (provision) reversal		(2,634	)		—			—			—			1,886			(1,886	)		(748	)		(1,886	)
Net gain (loss) on sale of vessels and equipment		1,337			—			—			198			1,030			—			2,367			198
Restructuring charges		—			—			—			—			(2,774	)		(6,450	)		(2,774	)		(6,450	)
(Loss) income from vessel operations		(67,486	)		(18,479	)		(158,091	)		(69,758	)		12,365			(47,689	)		(213,212	)		(135,926	)
Equity income (loss)		4,649			6,984			1,291			(6,648	)		(269	)		10			5,671			346
Calendar-Ship-Days(2)
FPSO Units		1,460			1,464			—			—			—			—			1,460			1,460
Conventional Tankers		—			—			5,413			8,047			—			—			5,413			8,047
Gas Carriers		—			—			—			—			730			730			730			730
FSO Units		—			—			—			—			365			365			365			365

(1) Includes direct general and administrative expenses and indirect general and administrative expenses allocated to offshore production, conventional tankers and other and corporate G&A based on estimated use of corporate resources.

(2) Apart from three FPSO units and one conventional tanker, all remaining calendar-ship-days presented relate to in-chartered days.

Teekay Parent – Offshore Production

Offshore Production consists of our FPSO units. As at December 31, 2013, we had a direct interest in four 100% owned FPSO units and one FPSO unit under construction, scheduled to deliver in mid-2014. The charter contract for the Petrojarl I FPSO unit ended in April 2013 and the unit has since been off-hire. From the fourth quarter of 2012 through the fourth quarter of 2013, the Foinaven FPSO unit experienced lower than planned production levels due to equipment-related operational issues. In mid-July 2013, we and the charterer agreed to temporarily halt production to repair the FPSO unit’s gas compression trains and repair the subsea system. The first compressor train was repaired in August 2013 allowing the unit to recommence operations. The Banff FPSO unit was under repair following storm damage in December 2011, until its resumption of operations in July 2014.

The number of Teekay Parent’s FPSO units for 2013 decreased compared to 2012 due to the sale of the Voyageur Spirit on May 2, 2013 to Teekay Offshore.

Loss from vessel operations increased to $67.5 million during 2013 compared to $18.5 million in 2012, primarily as a result of:

• an increase of $16.4 million due to repairs and maintenance costs on the Banff FPSO unit as it was being prepared to resume operations in 2014 as a result of the December 2011 weather-related incident;

• an increase of $16.0 million due to the expiration of the charter contract for the Petrojarl I in the second quarter of 2013, partially offset by a higher rate earned and a recovery of fuel costs for that unit during the first quarter of 2013;

• an increase of $9.8 million due to higher crew and maintenance costs from equipment-related operational issues and time-charter hire expense on the Petrojarl Foinaven during 2013 compared to the prior year;

• an increase of $4.8 million for 2013 mainly due to lower amortization of in-process revenue contracts for the Hummingbird Spirit, partially offset by higher incentive revenues earned;

• an increase of $3.6 million from the cost of FEED studies during 2013 compared to 2012; and

• an increase of $3.2 million incurred for pre-operating costs on our FPSO under construction compared to the prior year;

partially offset by

• a decrease of $8.7 million due to the sale of the Voyageur Spirit FPSO unit from Teekay Parent to Teekay Offshore in May 2013 and capitalization of pre-operating costs during its mobilization phase, which occurred mainly during the first quarter of 2013.

Teekay Parent – Conventional Tankers

As at December 31, 2013, Teekay Parent had a direct interest in four conventional tankers, six chartered-in conventional tankers from third parties, two chartered-in conventional tankers from Teekay Tankers and two chartered-in conventional tankers from Teekay Offshore. The average fleet size (including vessels chartered-in), as measured by calendar-ship-days, decreased in 2013 compared with 2012 due to the redeliveries of four chartered-in Suezmax tankers, ten chartered-in Aframax tankers and two chartered-in LR2 product tankers during 2013, and an overall decrease in the number of calendar days for 2013 due to 2012 being a leap year. The collective impact from the above noted fleet changes are referred to below as the Net Fleet Reductions.

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Loss from vessel operations increased to $158.1 million during 2013 compared to $69.8 million in 2012, primarily as a result of:

• an increase of $92.7 million due to impairment charges for 2013 primarily due to the disposal of four 2009-built Suezmax tankers to a new entity; the four Suezmax tankers were written down to their estimated fair value of $163.2 million;

• an increase of $18.6 million due to lower average spot tanker TCE rates earned and lower average charter rates earned from charter renewals; and

• an increase of $5.3 million due to lower interest income earned on Teekay Parent’s investment in a term loan;

partially offset by

• a net decrease of $29.6 million due to savings in the time-charter hire expense resulting from the Net Fleet Reductions, partially offset by a decrease in net revenues resulting from the Net Fleet Reductions.

Teekay Parent – Other and Corporate G&A

As at December 31, 2013, Teekay Parent had two chartered-in LNG carriers owned by Teekay LNG, one chartered-in FSO units owned by Teekay Offshore, and interest income received from and reversal of previously recognized loss provision, on an investment in a term loan.

Income from vessel operations increased to $12.4 million during 2013 compared to a loss of $47.7 million in 2012, primarily as a result of:

• an increase of $45.3 million due to the reversal in 2013 of impairment charges initially recognized in 2012 (Teekay Offshore recognized impairment charges of $18.1 million relating to two conventional tankers during 2013; Teekay Parent recognized these impairment charges during the three months ended December 31, 2012 and, therefore, reversed the impairment charge on consolidation). In 2012 Teekay Parent also had an impairment on the 1988-built Pattani Spirit FSO unit of $5.4 million;

• an increase of $11.1 million due to lower general and administrative expenses in 2013 primarily as a result of various cost-saving initiatives that we have undertaken, partially offset by lower business development fees received from subsidiaries in 2013 compared to 2012;

• an increase of $3.8 million due to the reversal of an allowance provided in 2012 in respect of Teekay Parent’s investment in term loan; and

• an increase of $3.7 million due to lower restructuring charges in 2013 compared to 2012 relating to costs incurred in association with the reorganization of our marine operations;

partially offset by

• a decrease of $2.9 million mainly due to the interest income earned in 2012 by Teekay Parent’s investment in a term loan which was entered into during 2011.

Equity income increased to $5.7 million in 2013 compared to $0.3 million in 2012, due to equity income from Teekay Parent’s investment in Petrotrans Holdings Ltd., an increase in Teekay Parent’s 43% investment in Sevan Marine ASA, an increase related to the impairment of Alta Shipping in 2012 and losses incurred from the Baúna and Piracaba (previously named Tiro and Sidon) joint venture as the Itajai FPSO unit commenced operations in February 2013, partially offset by a gain on sale of Teekay Parent’s interest in the Ikdam FPSO unit in 2012.

Other Consolidated Operating Results

The following table compares our other consolidated operating results for 2013 and 2012:

(in thousands of U.S. dollars, except percentages)	Year Ended December 31,
	2013			2012			% Change
Interest expense		(181,396	)		(167,615	)		8.2
Interest income		9,708			6,159			57.6
Realized and unrealized gains (losses) on non-designated derivative instruments		18,414			(80,352	)		(122.9	)
Foreign exchange loss		(13,304	)		(12,898	)		3.1
Other income		5,646			366			1,442.6
Income tax (expense) recovery		(2,872	)		14,406			(119.9	)

Interest Expense. Interest expense increased to $181.4 million in 2013, compared to $167.6 million in 2012, primarily due to:

• an increase of $11.9 million as a result of the NOK-denominated bond issuances by Teekay LNG in May 2012 and September 2013 and Teekay in October 2012;

• an increase of $10.8 million related to the Voyageur Spirit credit facility, as interest expense was capitalized during the upgrade period of the Voyageur Spirit FPSO unit, which ended in May 2013;

• a net increase of $7.3 million primarily from the issuance by Teekay Offshore of the NOK 1.3 billion senior unsecured bonds in January 2013, partially offset by the repurchase of NOK 388.5 million of Teekay Offshore’s existing NOK 600 million senior unsecured bond issue that matured in November 2013;

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• an increase of $5.9 million due to the drawdown of new debt facilities relating to the four BG Shuttle Tankers that delivered to Teekay Offshore during the last three quarters of 2013;

• an increase of $4.8 million as a result of a new revolving credit facility Teekay Parent entered into in December 2012; and

• an increase of $1.8 million due to an interest rate adjustment on Teekay LNG’s Suezmax tanker capital lease obligations (however, under the terms of the time-charter contracts for these vessels, Teekay LNG has a corresponding increase in charter receipts, which are reflected as an increase to voyage revenues);

partially offset by

• a decrease of $28.9 million due to decreased LIBOR and lower principal U.S. Dollar debt balances due to debt repayments during 2012 and 2013; and

• a decrease of $1.0 million due to lower EURIBOR relating to Euro-denominated debt.

Realized and unrealized gains (losses) on non-designated derivative instruments. Realized and unrealized gains (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 gains (losses) on non-designated derivatives were $18.4 million for 2013, compared to $(80.4) million for 2012, as detailed in the table below:

	Year Ended December 31,
(in thousands of U.S. Dollars)	2013			2012
Realized (losses) gains relating to:
Interest rate swap agreements		(122,439	)		(123,277	)
Interest rate swap agreement amendments and terminations		(35,985	)		—
Foreign currency forward contracts		(2,027	)		1,155
Foinaven embedded derivative		—			11,452
		(160,451	)		(110,670	)
Unrealized gains (losses) relating to:
Interest rate swap agreements		182,800			26,770
Foreign currency forward contracts		(3,935	)		6,933
Foinaven embedded derivative		—			(3,385	)
		178,865			30,318
Total realized and unrealized gains (losses) on derivative instruments		18,414			(80,352	)

The realized losses relate to amounts we actually realized or paid to settle such derivative instruments and interest rate swap agreement amendments. The unrealized gains on interest rate swaps for 2013 and 2012 were primarily due to changes in the forward interest rates.

During 2013 and 2012, we had interest rate swap agreements with aggregate average net outstanding notional amounts of approximately $3.8 billion and $3.9 billion, respectively, with average fixed rates of approximately 3.6% and 3.9%, respectively. Short-term variable benchmark interest rates during these periods were generally less than 1.0% and, as such, we incurred realized losses of $122.4 million and $123.3 million during 2013 and 2012, respectively, under the interest rate swap agreements. We also incurred realized losses of $36.0 million during 2013 from the termination of two interest rate swaps, one of which was terminated prior to our acquisition of the Voyageur Spirit FPSO unit and while we accounted for the unit as a VIE.

Primarily as a result of significant changes in long-term benchmark interest rates during 2013 and 2012, we recognized unrealized gains of $178.9 million and $30.3 million, respectively. Please read “Item 18. Financial Statements: Note 15 - Derivative Instruments and Hedging Activities.”

Foreign Exchange Loss. Foreign currency exchange losses were $13.3 million in 2013 compared to $12.9 million in 2012. Our foreign currency exchange losses, substantially all of which are unrealized, are due primarily to the relevant period-end revaluation of our NOK-denominated debt and our Euro-denominated term loans, capital leases and restricted cash for financial reporting purposes and the realized and unrealized losses on our cross currency swaps. Losses on NOK-denominated and Euro-denominated monetary liabilities reflect a weaker U.S. Dollar against the NOK and Euro on the date of revaluation or settlement compared to the rate in effect at the beginning of the period. Gains on NOK-denominated and Euro-denominated monetary liabilities reflect a stronger U.S. Dollar against the NOK and Euro on the date of revaluation or settlement compared to the rate in effect at the beginning of the period. During 2013, Teekay Offshore repurchased NOK 388.5 million of its existing NOK 600 million senior unsecured bond issue that matures in November 2013. Associated with this, Teekay Offshore recorded $6.6 million of realized losses on the repurchased bonds, and recorded $6.8 million of realized gains on the settlements of the associated cross currency swap. Excluding this, for 2013, foreign currency exchange gains include realized gains of $2.1 million (2012 - $3.6 million) and unrealized losses of $65.4 million (2012 - unrealized gain of $10.7 million) on our cross currency swaps and unrealized gains of $53.8 million (2012 - losses of $17.7 million) on the revaluation of our NOK-denominated debt. For 2013, foreign currency exchange losses include the revaluation of our Euro-denominated restricted cash, debt and capital leases of $12.5 million as compared to $4.7 million for 2012.

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Income Tax (Expense) Recovery. Income tax expense was $2.9 million in 2013 and compared to income tax recovery of $14.4 million in 2012. The increase in income tax expense was primarily due to (i) the reversal of uncertain tax position accruals during 2012, partially offset by reversals of uncertain tax position accruals in 2013; (ii) a new Norwegian tax structure established in the fourth quarter of 2012 which resulted in a deferred tax recovery for the Norwegian tax group in 2012 by being able to carry forward against future projected income past losses; and (iii) recognition or increase of valuation allowances against deferred tax assets in 2013. These increases were partially offset by current income tax recoveries relating to prior years and deferred tax adjustments relating to pension funds in 2013.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity and Cash Needs

Teekay Offshore

Teekay Offshore’s business model is to employ its vessels on fixed-rate contracts with major oil companies, typically with original terms between three to ten years. The operating cash flow Teekay Offshore’s vessels generates each quarter, excluding a reserve for maintenance capital expenditures, is generally paid out to its common unitholders within approximately 45 days after the end of each quarter. Teekay Offshore’s primary short-term liquidity needs are to pay quarterly distributions on its outstanding common and Series A preferred units, payment of operating expenses, dry docking expenditures, debt service costs and to fund general working capital requirements. We anticipate that Teekay Offshore’s primary sources of funds for its short-term liquidity needs will be cash flows from operations. We believe that Teekay Offshore’s existing cash and cash equivalents and undrawn long-term borrowings, in addition to all other sources of cash including cash from operations, will be sufficient to meet its existing liquidity needs for at least the next 12 months.

Teekay Offshore’s long-term liquidity needs primarily relate to expansion and maintenance capital expenditures and debt repayment. Expansion capital expenditures primarily represent the purchase or construction of vessels to the extent the expenditures increase the operating capacity or revenue generated by Teekay Offshore’s fleet, while maintenance capital expenditures primarily consist of dry docking expenditures and expenditures to replace vessels in order to maintain the operating capacity or revenue generated by its fleet. Teekay Offshore’s primary sources of funds for its long-term liquidity needs are from cash from operations, long-term bank borrowings and other debt or equity financings, or a combination thereof. Consequently, Teekay Offshore’s ability to continue to expand the size of its fleet is dependent upon its ability to obtain long-term bank borrowings and other debt, as well as raising equity.

As at December 31, 2014, Teekay Offshore’s total cash and cash equivalents were $252.1 million, compared to $219.1 million at December 31, 2013. Teekay Offshore’s total liquidity, including cash, cash equivalents and undrawn long-term borrowings, was $351.7 million as at December 31, 2014, compared to $331.0 million as at December 31, 2013. The increase in liquidity was primarily due to: the proceeds from the issuance of NOK 1,000 million and $300.0 million of senior unsecured bonds issued in January 2014 and May 2014, respectively; the net proceeds from the issuance of common units, including net proceeds of $7.6 million from the issuance of common units under the continuous offering program in May 2014 and $178.5 million from a private placement of common units in November 2014, partially offset by Teekay Offshore’s acquisition in March 2014 of 100% of the shares of ALP and installments on the four ALP towage vessel newbuildings; Teekay Offshore’s acquisition in August 2014 of 100% of the shares of Logitel and the exercise of the option to construct the third FAU; a reduction in the amount available for borrowing under its revolving credit facilities; and the scheduled repayment and prepayment of outstanding term loans.

As at December 31, 2014, Teekay Offshore had a working capital deficit of $124.0 million, compared to a working capital deficit of $720.6 million at December 31, 2013. The current portion of long-term debt decreased mainly due to the refinancing of three debt facilities and the repayment of various debt facilities during 2014. Teekay Offshore’s net due to affiliates balance decreased mainly due to repayments made during 2014, partially offset by Teekay Offshore’s 2014 acquisition from Teekay of the Petrojarl I FPSO unit. Teekay Offshore expects to manage its working capital deficit primarily with net operating cash flow generated in 2015 and, to a lesser extent, with new and existing undrawn revolving credit facilities and term loans.

Teekay LNG

Teekay LNG’s business model is to employ its vessels on fixed-rate contracts with major oil companies, with original terms typically between 10 to 25 years. The operating cash flow Teekay LNG’s vessels generates each quarter, excluding a reserve for maintenance capital expenditures and debt repayments, is generally paid out to its unitholders within approximately 45 days after the end of each quarter. Teekay LNG’s primary short-term liquidity needs are to pay these quarterly distributions on its outstanding units, payment of operating expenses, dry-docking expenditures, debt service costs and to fund general working capital requirements. We anticipate that Teekay LNG’s primary sources of funds for its short-term liquidity needs will be cash flows from operations. We believe that Teekay LNG’s existing cash and cash equivalents and undrawn long-term borrowings, in addition to all other sources of cash including cash from operations, will be sufficient to meet its existing liquidity needs for at least the next 12 months.

Teekay LNG’s long-term liquidity needs primarily relate to expansion and maintenance capital expenditures and debt repayment. Expansion capital expenditures primarily represent the purchase or construction of vessels to the extent the expenditures increase the operating capacity or revenue generated by its fleet, while maintenance capital expenditures primarily consist of dry-docking expenditures and expenditures to replace vessels in order to maintain the operating capacity or revenue generated by its fleet. Teekay LNG’s primary sources of funds for its long-term liquidity needs are from cash from operations, long-term bank borrowings and other debt or equity financings, or a combination thereof. Consequently, Teekay LNG’s ability to continue to expand the size of its fleet is dependent upon its ability to obtain long-term bank borrowings and other debt, as well as raising equity.

As at December 31, 2014, Teekay LNG’s cash and cash equivalents were $159.6 million, compared to $139.5 million at December 31, 2013. Teekay LNG’s total liquidity, which consists of cash, cash equivalents and undrawn medium-term credit facilities, was $295.2 million as at December 31, 2014, compared to $332.2 million as at December 31, 2013. The decrease in total consolidated liquidity is primarily due to: installment payments in 2014 relating to its eight newbuildings; contributions to the BG Joint Venture and the Yamal LNG Joint Venture to fund the newbuild installments in these joint ventures; and the acquisition of the Norgas Napa; partially offset by a new term loan entered into in March 2014 relating to the second Awilco LNG Carrier, the Wilpride; net proceeds from its 3.1 million common unit equity offering in July 2014; net proceeds from its 1.1 million common units issued under its continuous offering program in the fourth quarter of 2014; and the net proceeds upon refinancing of the Teekay Nakilat Joint Venture’s debt facility in the fourth quarter of 2014.

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As of December 31, 2014, Teekay LNG had a working capital deficit of $117.9 million. The working capital deficit includes a $57.7 million outstanding balance on one of its debt facilities that matures in the second quarter of 2015. Teekay LNG expects to refinance this debt facility before it comes due.

Teekay Tankers

Teekay Tankers’ business model is to own and charter out oil and product tankers and it employs a chartering strategy that seeks to capture upside opportunities in the tanker spot market while using fixed-rate time charters to reduce downside risks. Teekay Tankers’ primary sources of liquidity are cash and cash equivalents, cash flows provided by its operations, its undrawn credit facilities, proceeds from sales of vessels, and capital raised through financing transactions. As at December 31, 2014, Teekay Tankers’ total cash and cash equivalents were $162.8 million, compared to $25.6 million at December 31, 2013.

Teekay Tankers’ total liquidity, including cash, cash equivalents and undrawn credit facilities, was $289.0 million as at December 31, 2014, compared to $173.8 million as at December 31, 2013. Teekay Tankers’ liquidity at December 31, 2014 had increased as a result of its December 2014 public offering of its Class A common stock, which generated gross proceeds of $116 million to be used to fund its acquisition of five vessels for a total purchase price of $230.3 million in early 2015. Subsequent to year end, Teekay Tankers secured a loan facility in the amount of $126.6 million with a maturity date of January 30, 2016 and prepaid $95.0 million of one of its revolving credit facilities. We believe that Teekay Tankers’ existing cash and cash equivalents and undrawn long-term borrowings, in addition to all other sources of cash including cash from operations, will be sufficient to meet its existing liquidity needs for at least the next 12 months.

Teekay Tankers’ short-term liquidity requirements include the payment of operating expenses, dry-docking expenditures, debt servicing costs, dividends on its shares of common stock, scheduled repayments of long-term debt, as well as funding its other working capital requirements. Teekay Tankers’ short-term charters and spot market tanker operations contribute to the volatility of its net operating cash flow, and thus its ability to generate sufficient cash flows to meet its short-term liquidity needs. 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, tanker spot markets historically have exhibited seasonal variations in charter rates. Tanker spot 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.

Teekay Tankers’ long-term capital needs are primarily for capital expenditures and debt repayment. Generally, we expect that Teekay Tankers’ long-term sources of funds will be cash balances, long-term bank borrowings and other debt or equity financings. We expect that Teekay Tankers will rely upon external financing sources, including bank borrowings and the issuance of debt and equity securities, to fund acquisitions and expansion capital expenditures, including opportunities Teekay Tankers may pursue to purchase additional vessels from Teekay or third parties.

Teekay Tankers’ primary revolving credit facility is repayable in full in November 2017. As of December 31, 2014, the facility had an outstanding balance of $452.0 million. Immediately preceding its maturity in November 2017, the maximum amount available under the facility will be $349.4 million. Teekay Tankers’ ability to refinance any amounts outstanding under this facility on or before maturity in November 2017 will likely depend on the strength of the tanker market. If the tanker market weakens materially, Teekay Tankers may need to raise additional liquidity through the issuance of common shares, preferred shares or bonds, or a combination thereof. Alternatively, Teekay Tankers may seek to renegotiate its primary revolving credit facility to extend repayment of the facility. If successful, this may result in an increase in the rate of interest Teekay Tankers pays on amounts borrowed under the facility. In addition, Teekay Tankers’ liquidity requirements in 2017 may impact the types of investments Teekay Tankers makes prior to this date.

Teekay Parent

Teekay Parent continues to own four FPSO units and one conventional tanker and to in-charter a number of vessels. Teekay Parent’s primary short-term liquidity needs are the payment of operating expenses, dry-docking expenditures, debt servicing costs, dividends on its shares of common stock, scheduled repayments of long-term debt, as well as funding its other working capital requirements. Teekay Parent’s primary sources of liquidity are cash and cash equivalents, cash flows provided by operations, dividends/distributions and management fees received from Teekay Offshore, Teekay LNG and Teekay Tankers, its undrawn credit facilities and proceeds from the sale of vessels to external parties or Teekay Offshore. As at December 31, 2014, Teekay Parent’s total cash and cash equivalents was $232.3 million, compared to $230.4 million at December 31, 2013. Teekay Parent’s total liquidity, including cash, cash equivalents and undrawn credit facilities, was $466.8 million as at December 31, 2014, compared to $412.5 million as at December 31, 2013. The increase in liquidity is mainly attributable to an incremental amendment to the $500 million equity margin revolver which had a net increase in liquidity of $52.4 million. The debt is secured on the market value of 23.8 million common units of Teekay Offshore and 25.2 million common units of Teekay LNG owned by Teekay Parent. We believe that Teekay Parent’s existing cash and cash equivalents and undrawn long-term borrowings, in addition to all other sources of cash including cash from operations, will be sufficient to meet its existing liquidity needs for at least the next 12 months.

Our long-term vision is for Teekay Parent to primarily be a pure play general partner whose role is that of portfolio manager and project developer. We are targeting to complete the remaining FPSO sales to Teekay Offshore or third parties over the next several years. Once these sales are completed, we do not expect Teekay Parent to have a significant net debt position.

Teekay Corporation

Overall, our consolidated 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 (primarily by our publicly-traded subsidiaries) 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 $603.3 million, which mostly relates to our 2015 capital expenditure commitments. We are currently in the process of obtaining additional debt financing for our remaining capital commitments relating to our portion of newbuildings on order as at December 31, 2014.

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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.

Our revolving credit facilities and term loans are described in Item 18 – Financial Statements: Note 8 – Long-Term Debt. They contain covenants and other restrictions typical of debt financing secured by vessels that restrict the ship-owning subsidiaries from incurring or guaranteeing indebtedness; changing ownership or structure, including mergers, consolidations, liquidations and dissolutions; making dividends or distributions if we are in default; making capital expenditures in excess of specified levels; making certain negative pledges and granting certain liens; selling, transferring, assigning or conveying assets; making certain loans and investments; or entering into a new line of business. Among other matters, our long-term debt agreements generally provide for maintenance of minimum consolidated financial covenants and six loan agreements require the maintenance of vessel market value to loan ratios. As at December 31, 2014, these vessel market value to loan ratios ranged from 137.4% to 675.6% compared to their minimum required ratios of 105% to 130%, respectively. The vessel values used in these ratios are the appraised values prepared by us based on second hand sale and purchase market data. A weakening of the conventional tanker, FPSO or 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, 2014 this amount was $100.0 million. Most of the loan agreements also require that we maintain an aggregate minimum level of free liquidity and undrawn revolving credit lines with at least six months to maturity from 5% to 7.5% of total debt. As at December 31, 2014, this aggregate amount was $368.1 million. We were in compliance with all of our loan covenants at December 31, 2014.

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. “

As described under “Item 4 — Information on the Company: C. Regulations — Other Environmental Initiatives,” passage of any climate control legislation or other regulatory initiatives that restrict emissions of greenhouse gases could have a significant financial and operational impact on our business, which we cannot predict with certainty at this time. Such regulatory measures 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. In addition, increased regulation of greenhouse gases may, in the long term, lead to reduced demand for oil and gas and reduced demand for our services.

Cash Flows

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

	Year Ended December 31,
	2014			2013			2012
Net operating cash flows		446,317			292,584			288,936
Net financing cash flows		726,761			866,577			299,671
Net investing cash flows		(980,834	)		(1,183,992	)		(641,243	)

Operating Cash Flows

Our net cash flow from operating activities fluctuates primarily as a result of changes in vessel 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, which have been showing signs of recovery after a number of years of historically lower rates. In addition, the production performance of certain of our FPSO units has contributed to fluctuations in operating cash flows. As the charter contracts of two of our FPSO units include incentives based on average annual oil price, the recent reduction in global oil prices may negatively impact our operating cash flows in future quarters.

Net cash flow from operating activities increased to $446.3 million for the year ended December 31, 2014, from $292.6 million for the year ended December 31, 2013. This increase was primarily due a $199.4 million net increase in income from vessel operations before depreciation, amortization, asset impairments, loan loss recoveries (provisions), net gain (loss) on sale of vessels and equipment and the amortization of in-process revenue contracts of our businesses, primarily as a result of increased operating cash flows from our businesses. There was also an $1.7 million decrease in interest expense (net of interest income and including realized losses on interest rate swaps and interest rate swaps terminations) in 2014 compared to 2013. The increases in cash flow were partially offset by an increase of $2.2 million on expenditures for dry docking in 2014 compared to 2013, due to more vessels dry-docked in 2014 compared to 2013. In addition, there was a decrease in changes to non-cash working capital items of $4.8 million, primarily due to the timing of accrued liabilities and capital additions which are not yet paid on our FPSO unit which is not yet in service.

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Net cash flow from operating activities increased to $292.6 million for the year ended December 31, 2013, from $288.9 million for the year ended December 31, 2012. This increase was primarily due to an increase in changes to non-cash working capital items of $179.4 million primarily due the timing of payments made to vendors and the timing of payments received from customers, partially offset by a $75.1 million net decrease in income from vessel operations before depreciation, amortization, asset impairments, loan loss provisions, net (gain) loss on sale of vessels and equipment and the amortization of in-process revenue contracts of our four reportable segments, primarily as a result of reduced operating cash flows from our FPSO and conventional tanker segments. There was an increase of $37.2 million on expenditures for dry docking due to more vessels dry-docked in 2013 compared to 2012. In addition, there was a $45.4 million increase in interest expense (net of interest income and including realized losses on interest rate swaps and interest rate swaps terminations) in 2013 compared to 2012.

For further discussion of changes in income from vessel operations before depreciation, amortization, asset impairments, net loss (gain) on sale of vessels and equipment and the amortization of in-process revenue contracts of our businesses, please read “Results of Operations.”

Financing Cash Flows

The Daughter Companies hold most of our liquefied gas carriers (Teekay LNG), offshore assets, including shuttle tankers, FPSO units and FSO and offshore support 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 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, with a combination of net proceeds from public and private issuances of debt and equity securities 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 $452.1 million in 2014, compared to $446.9 million in 2013 and $496.2 million in 2012. As the sizes of the Daughter Companies have grown through acquisitions, whether from Teekay or otherwise, the amount of their operating cash flows generally have increased, which has resulted in larger aggregate distributions, primarily from Teekay Offshore and Teekay LNG. Consequently, distributions to non-controlling interests have increased to $360.8 million in 2014 from $270.0 million in 2013 and $246.6 million in 2012. In addition, distributions from the Daughter Companies to Teekay Parent have increased to $176.0 million in 2014 from $162.2 million in 2013 and $154.7 million in 2012.

We use our credit facilities to partially finance capital expenditures. Occasionally, we will use revolving credit facilities to finance these 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 the revolving credit facilities. We actively manage the maturity profile of our outstanding financing arrangements. Our proceeds from the issuance of long-term debt, net of debt issuance costs and repayments of long-term debt, was $2.1 billion in 2014, $1.8 billion in 2013 and $1.1 billion in 2012. We used these net proceeds primarily to finance capital expenditures. Changes in net proceeds from long-term debt from 2012 to 2014 were the result of variation is the level of capital expenditures during these periods.

In October 2008, Teekay announced a $200 million share repurchase program. During 2013, we repurchased 0.3 million shares of our common stock for $12.0 million at an average cost of $40.00 per share, pursuant to a separate authorization. During 2014 and 2012, we repurchased no shares of our common stock. As at December 31, 2014, the total remaining amount under the 2008 share repurchase authorization was $37.7 million.

Dividends paid during 2014 were $91.0 million, compared to $90.3 million in 2013 and $83.3 million in 2012, or $1.265 per share for each such period. Effective in 2015, after we complete the sale of the Knarr FPSO to Teekay Offshore, Teekay’s quarterly dividend payment will be primarily based on the cash flow contributions from our general partner and limited partner interests in Teekay Offshore and Teekay LNG, together with other dividends received, after deductions for parent company level corporate general and administrative expenses and any reserves determined to be required by our Board of Directors.

Investing Cash Flows

During 2014, we incurred capital expenditures for vessels and equipment of $994.9 million, primarily for capitalized vessel modifications and shipyard construction installment payments. This amount primarily consisted of Teekay Parent incurring $626.8 million of capital expenditures primarily for the installment payments and conversion costs of the Knarr FPSO unit, which is not yet fully in service, Teekay Offshore incurring capitalized expenditures of $59.7 million on the four newbuilding ALP towage vessels, $53.4 million on FSO conversion costs, $11.5 million on installment payments on the FAUs and $47.8 million on various other vessel additions. In addition, Teekay LNG incurred capital expenditures of $140.4 million relating to newbuilding installments for its eight LNG newbuildings equipped with the MEGI twin engines, $23.1 million relating to the early termination fee on the termination of the leasing of the RasGas II LNG Carriers (which was capitalized as part of the vessels’ costs), $21.6 million, which is net of $5.4 million owing to Skaugen, to fund Teekay LNG’s acquisition of the Norgas Napa in November 2014, and $3.8 million relating to certain vessel upgrades. In addition, we invested $79.6 million in our equity-accounted investees, primarily related to Teekay Tankers and Teekay Parents’ $60.0 million investment in TIL and Teekay Parents’ $25.0 million in a cost accounted investment and we also advanced $87.1 million to our equity-accounted investees. During 2014, Teekay Parent received proceeds of $11.1 million from the sale of four 2009-built Suezmax tankers and $2.2 million from the sale of an office building, Teekay Offshore received proceeds of $13.4 million from the sale of one 1995-built shutter tanker, and Teekay Tankers received proceeds of $154.0 million from the sale of two VLCCs.

During 2013, we incurred capital expenditures for vessels and equipment of $753.8 million, primarily for capitalized vessel modifications and shipyard construction installment payments. This amount primarily consisted of Teekay Offshore incurring capitalized expenditures of $336.8 million for the construction of four shuttle tankers, $54.3 million for the HiLoad DP Unit and $64.5 million of other vessels additions. In addition, Teekay LNG incurred $58.6 million of capital expenditures for three LNG carriers ordered in July and November 2013 and Teekay Parent incurred $236.1 million of capital expenditures primarily for the installment payments and conversion costs of two FPSO units under construction or upgrade. Teekay LNG invested an aggregate of $308.0 million in a direct financing lease to fund the acquisition the Awilco LNG Carriers in September and November 2013. Teekay Offshore received aggregate net proceeds of $28.0 million from the sales of a 1992-built shuttle tanker, a 1992-built conventional tanker and two 1995-built conventional tankers. Teekay Tankers received net proceeds of $9.1 million from the sale of a 1998-built conventional tanker and Teekay Parent received net proceeds of $10.3 million from the sale of sub-sea equipment from the Petrojarl I FPSO unit. In addition, we invested $157.8 million in our equity-accounted investees, of which $135.8 million was invested by Teekay LNG to acquire its interest in the Exmar LPG BVBA joint venture (including working capital contribution and acquisition costs).

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During 2012, we incurred capital expenditures for vessels and equipment of $523.6 million, primarily for capitalized vessel modifications and shipyard construction installment payments. This amount primarily consisted of Teekay Offshore incurring capitalized expenditures of $78.1 million for the construction of four shuttle tankers, Teekay LNG incurring capitalized expenditures of $38.6 million for the construction of two LNG carriers, and Teekay Parent incurring capitalized expenditures of $215.6 million primarily for the installment payments and conversion costs of two FPSO units under construction or upgrade. In November 2012, Teekay Parent prepaid $92.3 million of the Voyageur Spirit purchase price. Teekay Parent received aggregate net proceeds of $215.6 million from the sale of the Cidade de Itajai FPSO project to the 50% joint venture with Odebrecht and the sale of a joint venture. Teekay Offshore received aggregate net proceeds of $35.2 million from the sale of three conventional tankers and two shuttle tankers. In addition, we invested $183.6 million in our equity-accounted investees, mainly related to Teekay LNG’s interest in the Teekay LNG-Marubeni Joint Venture (including working capital contribution and acquisition costs). In addition, Teekay Parent advanced $117.2 million to our equity-accounted investees.

COMMITMENTS AND CONTINGENCIES

The following table summarizes our long-term contractual obligations as at December 31, 2014:

	Total		2015		2016 and 2017		2018 and 2019		Beyond 2019
	In millions of U.S. Dollars
Teekay Offshore
Long-term debt (1) (2)		2,436.0		258.0		792.1		1,035.6		350.3
Chartered-in vessels (operating leases)		30.0		18.4		11.6		—		—
Newbuilding installments/conversion (3)		1,821.3		945.2		874.2		1.9		—
		4,287.3		1,221.6		1,677.9		1,037.5		350.3
Teekay LNG
Long-term debt (2) (4)		1,924.1		157.2		304.3		844.7		617.9
Commitments under capital leases (5)		73.7		7.8		38.6		27.3		—
Commitments under operating leases (6)		343.7		24.1		48.2		48.2		223.2
Newbuilding installments/shipbuilding supervision (7)		2,462.7		188.9		1,092.9		979.8		201.1
		4,804.2		378.0		1,484.0		1,900.0		1,042.2
Teekay Tankers
Long-term debt (8)		656.1		42.0		497.9		76.4		39.8
Chartered-in vessels (operating leases) (9)		62.3		49.0		13.3		—		—
		718.4		91.0		511.2		76.4		39.8
Teekay Parent
Long-term debt (2) (10)		1,720.3		196.9		322.3		378.0		823.1
Chartered-in vessels (operating leases)		27.7		9.1		18.2		0.4		—
Asset retirement obligation		25.0		—		—		—		25.0
		1,773.0		206.0		340.5		378.4		848.1
Total		11,582.9		1,896.6		4,013.6		3,392.3		2,280.4

(1) Excludes expected interest payments of $82.1 million (2015), $131.1 million (2016 and 2017), $66.3 million (2018 and 2019) and $22.8 million (beyond 2019). Expected interest payments are based on LIBOR or NIBOR, plus margins which ranged between 0.30% and 5.75% as at December 31, 2014. The expected interest payments do not reflect the effect of related interest rate swaps that Teekay Offshore used as an economic hedge of certain of its variable rate debt and NOK-denominated obligations.

(2) Euro-denominated and NOK-denominated obligations are presented in U.S. Dollars and have been converted using the prevailing exchange rate as of December 31, 2014.

(3) Consists of Teekay Offshore’s acquisition of four long-distance towing and offshore installation vessel newbuildings and three FAU newbuildings, Teekay Offshore’s 50% interest in an FPSO conversion for the Libra field, upgrades of the Petrojarl I FPSO unit, the FSO conversion for the Randgrid shuttle tanker, and the acquisition of the six modern on-the-water long-distance towing and offshore installation vessels. Please read “Item 18 - Financial Statements: Note 16a – Commitments and Contingencies – Vessels Under Construction.”

(4) Excludes expected interest payments of $41.3 million (2015), $73.1 million (2016 and 2017), $32.1 million (2018 and 2019) and $40.0 million (beyond 2019). Expected interest payments are based on the existing interest rates (fixed-rate loans) and LIBOR, EURIBOR or NIBOR at December 31, 2014, plus margins on debt that has been drawn that ranged up to 5.25% (variable-rate loans). The expected interest payments do not reflect the effect of related interest rate swaps that Teekay LNG has used as an economic hedge of certain of our variable-rate debt.

(5) Includes, in addition to lease payments, amounts Teekay LNG may be required to pay to purchase leased vessels at the end of lease terms. The lessor has the option to sell these vessels to Teekay LNG at any time during the remaining lease term; however, for purposes of this table, we have assumed that the lessor will not exercise its right to sell the vessels to Teekay LNG until after the lease terms expire, which are during 2017 to 2018. The purchase price for any vessel Teekay LNG is required to purchase would be based on the unamortized portion of the vessel construction financing costs for the vessels, which are included in the table above. Teekay LNG expects to satisfy any such purchase price by assuming the existing vessel financing, although Teekay LNG may be required to obtain separate debt or equity financing to complete any purchases if the lenders do not consent to our assuming the financing obligations. Please read “Item 18 - Financial Statements: Note 10 – Capital Lease Obligations and Restricted Cash.”

(6) Teekay LNG has corresponding leases whereby Teekay LNG is the lessor and expects to receive an aggregate of approximately $303.7 million under these leases from 2015 to 2029. Please read “Item 18 - Financial Statements: Note 9 – Operating and Direct Finance Leases.”

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(7) Between December 2012 and December 2014, Teekay LNG entered into agreements for the construction of eight LNG newbuildings. The remaining cost for these newbuildings totaled $1,445.4 million as of December 31, 2014, including estimated interest and construction supervision fees.

As part of the acquisition of an ownership interest in the BG Joint Venture, Teekay LNG agreed to assume BG’s obligation to provide shipbuilding supervision and crew training services for the four LNG carrier newbuildings and to fund Teekay LNG’s proportionate share of the remaining newbuilding installments. The estimated remaining costs for the shipbuilding supervision and crew training services and Teekay LNG’s proportionate share of newbuilding installments, net of the secured financing within the joint venture for the LNG carrier newbuildings, totaled $89.4 million. However, as part of this agreement with BG, Teekay LNG expects to recover approximately $20.3 million of the shipbuilding supervision and crew training costs from BG between 2015 and 2019.

In July 2014, the Yamal LNG Joint Venture, in which Teekay LNG has a 50% ownership interest, entered into agreements for the construction of six LNG newbuildings. As at December 31, 2014, Teekay LNG’s 50% share of the remaining cost for these six newbuildings totaled $928.0 million. The Yamal LNG Joint Venture intends to secure debt financing for 70% to 80% of the fully built-up cost of the six newbuildings.

The table above excludes nine newbuilding LPG carriers scheduled for delivery between early-2015 and 2018 in the joint venture between Exmar and us. As at December 31, 2014, Teekay LNG’s 50% share of the remaining cost for these nine newbuildings totaled $190.2 million, including estimated interest and construction supervision fees. Please read “Item 18 – Financial Statements: Note 16c – Commitments and Contingencies – Joint Ventures.”

(8) Excludes all expected interest payments of $6.5 million (2015), $9.0 million (2016 and 2017), $1.6 million (2018 and 2019), $0.6 million (beyond 2019). Expected interest payments are based on the existing interest rates for fixed-rate loans that range from 4.06% to 4.9% and existing interest rates for variable-rate loans at LIBOR plus margins that range from 0.3% to 1.0% at December 31, 2014. The expected interest payments do not reflect the effect of related interest rate swaps that Teekay Tankers has used to hedge certain of its floating-rate debt.

(9) Excludes payments required if Teekay Tankers executes all options to extend the terms of in-chartered leases. If Teekay Tankers exercise all options to extend the terms of in-chartered leases, Teekay Tankers would expect total payments of $63.6 million (2015), $30.7 million (2016), $7.4 million (2017) and $5.5 million (2018).

(10) Excludes expected interest payments of $71.9 million (2015), $121.8 million (2016 and 2017), $96.7 million (2018 and 2019) and $47.5 million (beyond 2019). Expected interest payments are based on the existing interest rate for a fixed-rate loan at 8.5% and existing interest rates for variable-rate loans that are based on LIBOR or NIBOR, plus margins which ranged between 1.2% and 4.75% as at December 31, 2014. The expected interest payments do not reflect the effect or related interest rate swaps that Teekay Parent uses as an economic hedge of certain of its variable rate debt.

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 proportionate performance 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 proportionate performance 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 proportionate performance method.

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.

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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. 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. 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.

The following table presents, by type of vessel, 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, 2014. 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 2015. 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.

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. In addition, the following table also includes vessels on operational contracts with impairment indicators that are unique to those vessels. Such vessels include the Foinaven FPSO, the Banff FPSO and the HiLoad DP unit.

Due to issues with the subsea flow lines for the Foinaven FPSO, which are the responsibility of the charterer, the field has been unable to produce at maximum capacity. In addition, the Foinaven FPSO charter contract includes incentives based on total oil production in the year, certain operational measures, and the average annual oil price. Should field oil production be significantly below estimated levels or the amount of incentive revenues we expect to receive decline due to low oil prices or otherwise, we may be required to recognize an impairment of the carrying value of the unit.

Following a severe storm event on December 7, 2011, the Petrojarl Banff FPSO sustained damage to its moorings, turret and subsea equipment. Such damage has since been repaired, along with the completion of certain capital upgrades to the unit, and the unit has returned to service. 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. Any capital upgrade costs not recovered from the charterer will be capitalized to the vessel cost. Should the amount we expect to recover from the charterer decline, we may be required to recognize an impairment of the carrying value of the unit.

In late-December 2014, Petrobras notified Teekay Offshore that the HiLoad DP unit that Teekay Offshore had anticipated Petrobras would charter had not met certain test criteria required by Petrobras to commence Brazilian offshore operations. Teekay Offshore continues to believe in the application of HiLoad DP technology for safe and economical offshore loading operations and is currently pursuing various employment alternatives for the unit. Should this assessment change, we may be required to recognize an impairment of both the carrying value of the HiLoad DP unit, which carrying value as of December 31, 2014 was $54.2 million, and the carrying value of our investment in Remora, which carrying value as of December 31, 2014 was $4.5 million.

We would consider the vessels reflected in the following table to be at a higher risk of future impairment than our vessels not reflected in the table. 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) Type of Vessel	Number of Vessels	Market Values (1) $		Carrying Values $
Shuttle Tankers and HiLoad Unit(2)	6		148,600		214,874
Shuttle Tankers(3)	2		46,600		73,205
FSO Units(2)	1		6,500		11,997
FPSO Units(2)	2		318,300		524,911
Liquefied Natural Gas Carriers(3)	2		140,000		168,642
Conventional Tankers(2)	3		40,800		55,331
Conventional Tankers(3)	21		608,500		713,391

(1) Market values are based on second-hand market comparable values or using a depreciated replacement cost approach as at December 31, 2014. 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, FSO units and FPSO 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.

(2) Undiscounted cash flows are marginally greater than the carrying values.

(3) Undiscounted cash flows are significantly greater than the carrying values.

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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. FAUs are depreciated over an estimated useful life of 35 years commencing the date the unit is delivered from the shipyard. Towage vessels are depreciated over an estimated useful life of 25 years commencing the date the vessel is delivered from the shipyard. 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, redeployment assumptions for vessels on long-term charter 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.

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.

Goodwill is not amortized, but reviewed for impairment at the reporting unit level on 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 to below its carrying value. When goodwill is reviewed for impairment, we 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, we may bypass this step and use a fair value approach to identify potential goodwill impairment and, when necessary, measure the amount of impairment. We use 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.

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.

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Effect if Actual Results Differ from Assumptions. As of December 31, 2014, we had three 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 three 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. In addition, we have stock purchase warrants, a type of option agreement, to acquire up to an additional 1.5 million shares of TIL’s common stock at a fixed price. See “Item 18 – Financial Statements: Note 15 – Derivative Instruments and Hedging Activities”. 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 income (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 income (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 and our holding of stock purchase warrants. 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 us 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. For the stock purchase warrants, we take into account the stock price of TIL, the expected volatility of the TIL stock price and an estimate of the risk-free rate over the term of the warrants.

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.

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.

The fair value of our stock purchase warrants at the end of each period is most significantly impacted by the stock price of TIL and the expected future volatility of the TIL stock price. TIL seeks to opportunistically acquire, operate and sell modern second hand tankers to benefit from an expected recovery in the current cyclical low of the tanker market. Pending such transactions, TIL is employing its oil tankers on the spot market. 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 value of TIL’s vessels, TIL’s stock price and the value of the stock purchase warrants we hold.

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 or sell the stock purchase warrants at the reporting date, the amount we would pay or receive to terminate the derivative instruments and the amount we would receive upon sale of the stock purchase warrants 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 income (loss).

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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, 2014 are listed below:

Name	Age	Position
C. Sean Day	65	Director and Chair of the Board
Peter Evensen	56	Director, President and Chief Executive Officer
Axel Karlshoej	74	Director and Chair Emeritus
Dr. Ian D. Blackburne	68	Director
William B. Berry	62	Director
Peter S. Janson	67	Director
Thomas Kuo-Yuen Hsu	68	Director
Eileen A. Mercier	67	Director
Bjorn Moller	57	Director
Tore I. Sandvold	67	Director
Arthur Bensler	57	Executive Vice President, Secretary and General Counsel
Kevin Mackay	46	President and Chief Executive Officer, Teekay Tanker Services, a division of Teekay (1)
David Glendinning	60	President, Teekay Gas Services, a division of Teekay
Kenneth Hvid	46	Executive Vice President and Chief Strategy Officer
Vincent Lok	46	Executive Vice President and Chief Financial Officer
Peter Lytzen	57	President, Teekay Petrojarl AS, a subsidiary of Teekay
Ingvild Saether	46	President, Teekay Shuttle and Offshore, a division of Teekay

(1) Appointed to this position on June 20, 2014.

Certain biographical information about each of these individuals is set forth below:

C. Sean Day has served as a Teekay director since 1998 and as our Chairman of the Board since 1999. Mr. Day also serves as Chairman of Teekay GP L.L.C., the general partner of Teekay LNG Partners L.P., Chairman of Teekay Offshore GP L.L.C., and the general partner of Teekay Offshore Partners L.P. He has served as Chairman of Teekay Tankers Ltd. from 2007 until 2013. From 1989 to 1999, Mr. Day was President and Chief Executive Officer of Navios Corporation, a large bulk shipping company based in Stamford, Connecticut. Prior to Navios, 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., our largest shareholder, to oversee its investments, including that in the Teekay group of companies.

Peter Evensen joined Teekay in 2003 as Senior Vice President, Treasurer and Chief Financial Officer. He was appointed Executive Vice President in 2004 and was appointed Executive Vice President and Chief Strategy Officer in 2006. In April 2011, he became a Teekay director and assumed the position of President and Chief Executive Officer. Mr. Evensen also serves as Chief Executive Officer and Chief Financial Officer and a director of Teekay GP L.L.C. and as Chief Executive Officer and Chief Financial Officer and a director of Teekay Offshore GP L.L.C. He served as a director of Teekay Tankers Ltd. from October 2007 until June 2013. Mr. Evensen has over 30 years of experience in banking and shipping finance. Prior to joining Teekay, 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.

Axel Karlshoej has served as a Teekay director since 1993, was Chairman of the Teekay Board from 1993 to 1999, and has been Chairman Emeritus since stepping down as Chairman. Mr. Karlshoej is Chairman and serves on the compensation committee of Nordic Industries, a California general construction firm with which he has served for the past 30 years. He is the older brother of Teekay’s founder, the late J. Torben Karlshoej.

Dr. Ian D. Blackburne has served as a Teekay director 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 currently serving as Chairman of Aristocrat Leisure Limited and Recall Holdings Limited. He is a former Chairman of CSR Limited and director of Suncorp-Metway Ltd. and Symbion Health Limited (formerly Mayne Group Limited), 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.

Bill Berry has served as a Teekay director 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 Franks International and Continental Resources.

Peter S. Janson has served as a Teekay director 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 as a member of the National Advisory Board on Sciences and Technology in Canada.

Thomas Kuo-Yuen Hsu has served as a Teekay director 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. He has been a Committee Director of the Britannia Steam Ship Insurance Association Limited since 1988.

Eileen A. Mercier has served as a Teekay director since 2000. She has over 42 years of experience in a wide variety of financial and strategic planning positions, including 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.

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She currently serves as Chairman of the Ontario Teachers’ Pension Plan, as a trustee of The University Health Network, and a director and Chair of Audit and Risk Management for Intact Financial Corporation.

Bjorn Moller has served as a Teekay director since 1998. Mr. Moller also served as Teekay’s President and Chief Executive Officer from 1998 until March, 2011. Also until March, 2011, Mr. Moller served as Vice Chairman of Teekay GP L.L.C., Vice Chairman of Teekay Offshore GP L.L.C., and as the Chief Executive Officer of Teekay Tankers Ltd. Mr. Moller remains a director of Teekay Tankers Ltd. Mr. Moller has over 35 years of experience in the shipping industry, and served as Chairman of the International Tanker Owners Pollution Federation from 2006 to 2013. He served in senior management positions with Teekay for more than 20 years and headed our overall operations beginning in January 1997, following his promotion to the position of Chief Operating Officer. Prior to this, Mr. Moller headed our global chartering operations and business development activities. Mr. Moller is a director of Kattegat Limited, the parent company of Resolute Investments, Ltd., our largest shareholder.

Tore I. Sandvold has served as a Teekay director 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 the Board 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 AS, has acted as advisor to companies and advisory bodies in the energy industry. Mr. Sandvold serves on other boards, including those of Schlumberger Limited, Lambert Energy Advisory Ltd., Energy Policy Foundation of Norway, Rowan Companies plc and Njord Gas Infrastructure.

Arthur Bensler joined Teekay in 1998 as General Counsel. He was promoted to the position of Vice President in 2002 and became Corporate Secretary in 2003. He was appointed Senior Vice President in 2004 and Executive Vice President in 2006. In June 2013, Mr. Bensler was appointed Director and Chairman of Teekay Tankers Ltd., having served as Secretary from 2007 to September, 2014. Prior to joining Teekay, Mr. Bensler was a partner in a large Vancouver, Canada law firm, where he practiced corporate, commercial and maritime law from 1987 until joining Teekay.

Kevin Mackay was appointed as President and Chief Executive Officer of Teekay Tankers Ltd., a company controlled by Teekay, on June 20, 2014. Mr. Mackay joined Teekay Tankers from Phillips 66, where he headed the global marine business unit and held a similar role as the General Manager, Commercial Marine at ConocoPhillips from 2009 to 2012 before the formation of Phillips 66. Mr. Mackay started his career working for Neptune Orient Lines in Singapore from 1991 to 1995. He then joined AET Inc. Limited (AET) (formerly American Eagle Tankers Inc.) in Houston, becoming the Regional Director - Americas, Senior Vice President. Mr. Mackay holds a B.Sc. (Econ) Honours from the London School of Economics & Political Science and has extensive international experience.

David Glendinning joined Teekay 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 our Teekay Gas Services division, which is responsible for our initiatives in the LNG business and other areas of gas activity. Prior to joining Teekay, 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 in 2000 and was responsible for leading our global procurement activities until he was promoted in 2004 to Senior Vice President, Teekay Gas Services. During this time, Mr. Hvid was involved in leading Teekay through its entry and growth in the LNG business. He held this position until the beginning of 2006, when he was appointed President of our Teekay Navion Shuttle Tankers and Offshore division. In that role he was responsible for our global shuttle tanker business as well as initiatives in the floating storage and offtake business and related offshore activities. In April 2011, Mr. Hvid assumed the positions of Chief Strategy Officer and Executive Vice President, and became a director of Teekay GP L.L.C. and a director of Teekay Offshore GP L.L.C. Mr. Hvid has 26 years of global shipping experience, 12 of which were spent with A.P. Moller in Copenhagen, San Francisco and Hong Kong. In 2007, Mr. Hvid joined the board of Gard P.&.I. (Bermuda) Ltd.

Vincent Lok has served as Teekay’s Executive Vice President and Chief Financial Officer since 2007. He has held a number of finance and accounting positions with Teekay, including Controller from 1997 until his promotions to the positions of Vice President, Finance in 2002, Senior Vice President and Treasurer in 2004, and Senior Vice President and Chief Financial Officer in 2006. Mr. Lok has also served as the Chief Financial Officer of Teekay Tankers Ltd. since 2007. Prior to joining Teekay, Mr. Lok worked as a Chartered Accountant with Deloitte & Touche LLP. Mr. Lok is also a Chartered Financial Analyst.

Peter Lytzen joined Teekay Petrojarl ASA as President and Chief Executive Officer in 2007. Mr. Lytzen’s experience includes over 20 years in the oil and gas industry and 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 units and other offshore production solutions. He first joined Maersk in 1987 and held progressively responsible positions throughout the organization.

Ingvild Sæther joined Teekay in 2002 as a result of Teekay’s acquisition of Navion AS from Statoil ASA. Ms. Sæther held various management positions in Teekay’s conventional tanker business until 2007, when she assumed the commercial responsibility for Teekay’s shuttle tanker activities in the North Sea. In her role as Vice President, Teekay Navion Shuttle Tankers, she managed the growth of Teekay’s shuttle fleet. Effective April 1, 2011, Ms. Sæther assumed the position of President, Teekay Shuttle and Offshore Services. Ms. Sæther holds an Executive MBA in Shipping Management and has over 20 years of industry experience.

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Compensation of Directors and Senior Management

Director Compensation

During 2014, 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 Chair 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 2013 Equity Incentive Plan. Pursuant to this annual retainer, during 2014 we granted stock options to purchase an aggregate of 10,996 shares of our common stock at an exercise price of $56.76 per share and 9,510 shares of restricted stock. During 2014, the Chair of the Board received a $495,000 annual retainer in the form of 8,720 shares of restricted stock under our 2013 Equity Incentive Plan. The stock options described in this section expire March 11, 2024, 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 dates.

Annual Executive Compensation

The aggregate compensation earned by Teekay’s eight executive officers listed above (or the Executive Officers) for 2014, and excluding equity-based compensation described below, was $6.6 million. This is comprised of base salary ($3.9 million), annual bonus ($2.2 million) and pension and other benefits ($0.5 million). These amounts were paid primarily in Canadian Dollars, but are reported here in U.S. Dollars using an average exchange rate of 1.10 Canadian Dollars for each U.S. Dollar for 2014. Teekay’s annual bonus plan considers company performance, team performance, and individual performance (through comparison to established targets).

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 2014 were made under our 2013 Equity Incentive Plan.

During March 2014, we granted stock options to purchase an aggregate of 4,247 shares of our common stock at an exercise price of $56.76, a total of 82,327 shares of restricted stock units and 48,824 performance shares to the Executive Officers under our 2013 Equity Incentive Plan. The stock options expire March 11, 2024, ten years after the date of grant. The stock options and restricted stock units 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 two or three year performance cycle if the performance conditions are met.

During March 2015, we granted stock options to purchase an aggregate of 155,459 shares of our common stock at an exercise price of $43.99, 1,232 shares of restricted stock units and 61,774 performance shares to the Executive Officers under our 2013 Equity Incentive Plan. The stock options expire March 9, 2025, ten years after the date of grant. The stock options and restricted stock units 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 two or three year performance cycle if the performance conditions are met.

Options to Purchase Securities from Registrant or Subsidiaries

In March 2013, we adopted the 2013 Equity Incentive Plan (or the 2013 Plan) and suspended the 1995 Stock Option Plan and the 2003 Equity Incentive Plan (collectively referred to as the Plans). As at December 31, 2014, we had reserved pursuant to our 2013 Plan 4,009,878 shares of Common Stock, and at December 31, 2013, we had reserved pursuant to our 2013 Plan 4,133,987 shares of Common Stock for issuance upon exercise of options or equity awards granted or to be granted.

During 2014 and 2013, we granted options under the 2013 Plan to acquire up to 15,243 and 72,810 shares of Common Stock, respectively, and during 2012, we granted options under the Plans to acquire up to 432,971 shares of Common Stock, 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 $56.76 per share, with a weighted-average exercise price of $36.61 per share, and expire between March 10, 2015 and March 11, 2024.

Starting in 2013, employees who provide services to our publicly listed subsidiaries (Teekay LNG, Teekay Offshore and Teekay Tankers) received a proportion of their annual equity compensation award under the equity compensation plan of the applicable subsidiary (the Teekay Tanker Ltd. 2007 Long-Term Incentive Plan, the Teekay Offshore Partners L.P. 2006 Long-Term Incentive Plan or the Teekay LNG Partners L.P. 2005 Long-Term Incentive Plan), depending on their level of contribution towards the applicable subsidiary. These awards took the form of Restricted Stock Units (or RSUs), which are described as Phantom Units under the Teekay Offshore Partners L.P. 2006 Long-Term Incentive Plan and the Teekay LNG Partners L.P. 2005 Long-Term Incentive Plan, but we refer to all of these awards as RSUs for purposes of this disclosure. The RSUs vest and become payable with respect to one-third of the shares on each of the first three years following the grant date and accrue distributions or dividends from the date of the grant to the date of vesting.

Board Practices

As at December 31, 2014, the Board of Directors consisted of 10 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.

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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 2016. Directors Thomas Kuo-Yuen Hsu, Axel Karlshoej, Bjorn Moller, and Peter Evensen have terms expiring in 2017.

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, C. Sean Day and Bjorn Moller with our largest shareholder and concluded these relationships do not materially affect their independence as 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 2014 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 2014, the Board held seven meetings. Each director attended all Board meetings, except for two directors who each missed one meeting. Each Audit Committee member, Compensation and Human Resources Committee member, and Nominations & Governance Committee member attended all applicable committee meetings.

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 composed entirely of directors who satisfy applicable NYSE compensation committee independence standards. This committee is currently comprised of Peter S. Janson (Chairman), C. Sean Day, Axel Karlshoej and Ian D. Blackburne.

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.

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Crewing and Staff

As at December 31, 2014, we employed approximately 5,900 seagoing and 900 shore-based personnel, compared to approximately 5,700 seagoing and 900 shore-based personnel as at December 31, 2013, and approximately 5,600 seagoing and 900 shore-based personnel as at December 31, 2012.

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, 2014, 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, 2015 (60 days after December 31, 2014) 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 (17 persons)(1)		2,475,159	(3)		3.4	%(2)

(1) Includes 1,770,786 shares of common stock subject to stock options exercisable as of March 1, 2015 under our equity incentive plans with a weighted-average exercise price of $37.53 that expire between March 10, 2015 and March 12, 2023. Excludes 140,548 shares of common stock subject to stock options that may become exercisable after March 1, 2015 under the plans with a weighted average exercise price of $30.98, that expire between March 6, 2022 and March 11, 2024.

(2) Based on a total of 72.5 million outstanding shares of our common stock as of December 31, 2014. 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, 2015 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 2016 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, 2015, 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, 2015 (60 days after March 1, 2015) through the exercise of any stock option or other right. Unless otherwise indicated, each person or entity has sole voting and investment power with respect to the shares set forth in the following table.

Identity of Person or Group	Shares Owned		Percent of Class (4)
Resolute Investments, Ltd.(1)		25,261,780		34.8	%
Neuberger Berman Group LLC(2)		6,024,833		8.3	%
Magnetar Financial LLC(3)		5,838,732		8.1	%

(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 in part on the Schedule 13D/A (Amendment No. 6) filed by Resolute and Path with the SEC on December 3, 2013. Resolute’s beneficial ownership was 34.8% on March 1, 2015, and 35.7% on March 1, 2014. 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. Another of our directors, Bjorn Moller, is a director of Kattegat Limited.

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(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 11, 2015.

(3) 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 17, 2015.

(4) Based on a total of 72.5 million outstanding shares of our common stock as of March 1, 2015.

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, 2015, Resolute owned approximately 34.8% 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. Another of our directors, Bjorn Moller, is a director of Kattegat Limited. 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 Offshore GP L.L.C. (the general partner of Teekay Offshore) and Teekay GP L.L.C. (the general partner of Teekay LNG), and was also the Chairman of Teekay Tankers Ltd. from 2007 until 2013. 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. Mr. Moller is also a director of Kattegat Limited, the parent company of Resolute Investments, Ltd., our largest shareholder. 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. In June 2013, Arthur Bensler, Teekay’s Executive Vice President, Secretary and General Counsel, was appointed Director and Chairman of Teekay Tankers Ltd., having served as Secretary since 2007.

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. Kevin Mackay is the President and Chief Executive Officer of Teekay Tankers Ltd. and Chief Executive Officer 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 2014, these reimbursement obligations totaled approximately $1.2 million, $3.7 million, and $2.5 million, respectively, for Teekay Tankers, Teekay Offshore and 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 2012 and 2013, these reimbursement obligations for Teekay Tankers, Teekay Offshore and Teekay LNG totaled and $2.7 million, $4.0 million, and $3.7 million, and $3.0 million, $3.8 million, and $3.2 million, respectively.

Relationships with Our Public Entity 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, 2015, we owned shares of Teekay Tankers’ Class A and Class B common stock that represented an ownership interest of 25.5% and voting power of 52.9% of Teekay Tankers’ outstanding common stock.

Until December 31, 2012, Teekay Tankers distributed to its shareholders 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 represented 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.

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Effective January 1, 2013, Teekay Tankers changed to a fixed dividend policy of $0.12 per share per annum. We received distributions from Teekay Tankers of $7.1 million, $2.5 million and $2.6 million in 2012, 2013 and 2014, respectively.

Please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Recent Developments and Results of Operations - Recent Developments in Teekay Tankers” for additional information.

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, 2015, we owned a 25.3% 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, 2015, we owned a 31.5% 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 each of Teekay Offshore and Teekay LNG. 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, if for any quarter Teekay Offshore or Teekay LNG, as applicable, has distributed available cash from operating surplus to its common unitholders in an amount equal to the applicable minimum quarterly distribution for the common units, then Teekay Offshore or Teekay LNG will distribute any additional available cash from operating surplus for that quarter among the common unitholders and its general partner 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 $56.8 million, $62.3 million, and $70.8 million, respectively, with respect to 2012, 2013, and 2014.

Teekay received total distributions, including incentive distributions, from Teekay LNG of $87.4 million, $92.2 million, and $100.7 million, respectively, with respect to 2012, 2013, and 2014.

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.

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 through June 2015.

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 are obligated to sell the Petrojarl Knarr FPSO unit to Teekay Offshore, subject to the unit achieving first oil and commencing its charter contract. The purchase price for the Petrojarl Knarr FPSO unit which is based on a fully built-up cost of approximately $1.25 billion, is expected to be financed through the assumption of an existing $815 million long-term debt facility and $450 million of short-term vendor financing from us. We expect to complete the sale of the Petrojarl Knarr during the second quarter of 2015.

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• We are obligated to offer to sell the Petrojarl Foinaven FPSO unit to Teekay Offshore, subject to approvals required from the charterer. The purchase price for the Foinaven FPSO unit would be its 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.

We own two additional FPSO units, the Hummingbird Spirit FPSO unit, which we will be obligated to offer to Teekay Offshore in the future under the omnibus agreement following the commencement of a charter contract with a firm period of greater than three years duration (which is not currently the case), and the Petrojarl Banff, which in January 2015 had a charter rate reset which makes the unit subject to be offered to Teekay Offshore under the omnibus agreement.

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 2014, four 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. Two of Teekay Offshore’s shuttle tankers were chartered out to Teekay subsidiaries under short-term projects during 2013. Pursuant to these charter contracts, Teekay Offshore earned voyage revenues of $102.8 million, $70.2 million, and $56.5 million, respectively, for 2012, 2013, and 2014.

• During 2014 three (two – 2013) 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, $11.2 million, and $10.5 million, respectively, for 2012, 2013, and 2014.

• 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 2012, 2013, and 2014, Teekay LNG earned revenues of $37.6 million, $34.6 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 2012, 2013, and 2014, Teekay LNG and Teekay Offshore incurred expenses of $22.3 million, $22.8 million, and $26.4 million; and $59.9 million, $64.4 million, and $75.7 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. 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 2012, 2013, and 2014, Teekay Tankers incurred $9.9 million, $16.4 million, and $14.3 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’ shareholders. Teekay Tankers did not incur any performance fees for 2014, 2013 or 2012.

Pooling Arrangements. Certain Aframax tankers, Suezmax tankers and LR2 product 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 to $275 (for the LR2 product tanker pool), $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 2012, 2013, and 2014 of $3.6 million, $4.0 million and $5.3 million, respectively.

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Relationship with Tanker Investments Ltd. (TIL)

In January 2014, Teekay and Teekay Tankers formed TIL. For information about our relationship with TIL, please read “Item 18. Financial Statements: Note 3(e)—Investments.”

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 recent legal proceedings, 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. Effective in 2015, after we complete the anticipated sale of the Knarr FPSO to Teekay Offshore, our quarterly dividend payment will be primarily based on the cash flow contributions from our general partner and limited partner interests in Teekay Offshore and Teekay LNG, together with other dividends received, after deductions for parent company level corporate general and administrative expenses and any reserves determined to be required by our Board of Directors. 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 and investments in joint ventures, our ability to pay dividends on the common stock depends on the earnings and cash flow of our subsidiaries and distributions from the joint ventures.

Significant Changes

Please read “Item 18. Financial Statements: Note 24—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, 2014		Dec. 31, 2013		Dec. 31, 2012		Dec. 31, 2011		Dec. 31, 2010
Years Ended
High	$	67.98	$	48.13	$	36.60	$	37.93	$	33.96
Low	$	44.01	$	32.49	$	24.89	$	20.67	$	20.42
	Mar. 31, 2015		Dec. 31, 2014		Sept. 30, 2014		Jun. 30, 2014		Mar. 31, 2014		Dec. 31, 2013		Sept. 30, 2013		Jun. 30, 2013		Mar. 31, 2013
Quarters Ended
High	$	51.20	$	67.97	$	67.98	$	62.67	$	60.42	$	48.13	$	42.91	$	41.27	$	36.69
Low	$	41.12	$	44.01	$	49.63	$	54.82	$	46.59	$	40.59	$	37.20	$	32.69	$	32.49
	Mar. 31, 2015		Feb. 29, 2015		Jan. 31, 2015		Dec. 31, 2014		Nov. 30, 2014		Oct. 31, 2014
Months Ended
High	$	46.85	$	48.19	$	51.20	$	52.82	$	59.55	$	67.97
Low	$	42.24	$	42.11	$	41.12	$	44.01	$	49.69	$	48.61

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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 is a party, for the two years immediately preceding the date of this Annual Report:

(a) 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.

(b) 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.

(c) 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.

(d) 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.

(e) 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 loan facilities.

(f) 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 loan facilities.

(g) 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.

(h) 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.

(i) Annual Executive Bonus Plan.

(j) 2003 Equity Incentive Plan.

(k) Amended 1995 Stock Option Plan.

(l) Amended and Restated Rights Agreement, dated as of July 2, 2010, between Teekay Corporation and The Bank of New York, as Rights Agent.

(m) 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.

(n) 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.

(o) 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.

(p) 2013 Equity Incentive Plan.

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(q) Agreement, dated December 21, 2012 for a U.S. $200,000,000 Margin Loan Agreement among Teekay Finance Limited, Citibank, N.A. and others.

(r) Agreement, dated October 5, 2012, for NOK 700,000,000 Senior Unsecured Bonds due October 2015, among us and Norsk Tillitsman ASA. All payments are at NIBOR plus 4.75% per annum.

(s) Amendment Agreement, dated December 18, 2013 for a U.S. $300,000,000 Margin Loan Agreement among Teekay Finance Limited, Citibank, N.A. and others.

(t) Agreement, dated February 24, 2014 for a U.S. $815,000,000 Secure Term Loan Facility Agreement among Knarr L.L.C., Citibank, N.A. and others.

(u) Agreement dated July 7, 2014; between Teekay LNG Operating L.L.C. and China LNG Shipping (Holdings) Limited to form TC LNG Shipping LLC in connection with the Yamal LNG Project.

(v) Agreement dated December 17, 2014, for a U.S. $450,000,000 secured loan facility between Nakilat Holdco L.L.C. and Qatar National Bank SAQ. The loan bears interest at LIBOR plus a margin of 1.85%. The facility requires quarterly repayments, with a bullet payment in 2026.

(w) Amendment Agreement No. 2, dated December 19, 2014 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 certain material U.S. federal income tax considerations that may be relevant to shareholders. 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 shareholders 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 shareholder in light of the shareholder’s circumstances, or to certain categories of shareholders 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. Partners in partnerships holding our common stock should consult their own tax advisors to determine the appropriate tax treatment of the partnership’s ownership of our common stock.

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 shareholder 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.

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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, for U.S. federal income tax purposes: (i) a U.S. citizen or U.S. resident alien (or a U.S. Individual Holder), (ii) a corporation or other entity taxable as a corporation, that was created or organized 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 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 current and accumulated 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, which will be either long term or short term capital gain depending upon whether the U.S. Holder has held the shares for more than one year. 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. For purposes of computing allowable foreign tax credits for U.S. federal income tax purposes, dividends paid with respect to our common stock will be treated as foreign source income and generally will be treated as “passive category income.”.

Dividends paid on our common stock to a U.S. Holder who is an individual, trust or estate (or a Non-Corporate U.S. Holder) will be treated as “qualified dividend income” that is taxable to such Non-Corporate U.S. 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 classified as 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 classified as a PFIC, as discussed below); (iii) the Non-Corporate U.S. 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 Non-Corporate U.S. 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 Non-Corporate U.S. Holder. Any dividends paid on our common stock not eligible for these preferential rates will be taxed as ordinary income to a Non-Corporate U.S. Holder.

Special rules may apply to any “extraordinary dividend” paid by us. Generally, an extraordinary dividend is, a dividend with respect to a share of common stock if the amount of the dividend is equal to or in excess of 10% of a common shareholder’s adjusted basis (or fair market value in certain circumstances) in such common 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 recognized by a Non-Corporate U.S. Holder from the sale or exchange of such common stock will be treated as long-term capital loss to the extent of the amount of such dividend.

Certain Non-Corporate U.S. Holders are subject to a 3.8% tax on certain investment income, including dividends. Non-Corporate U.S. 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 capital 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 generally will be treated as (a) 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, or short -term capital gain or loss otherwise and (b) U.S.-source gain or loss, as applicable, for foreign tax credit purposes. Non-Corporate U.S. Holders may be eligible for preferential rates of U.S. federal income tax in respect of long-term capital gains. A U.S. Holder’s ability to deduct capital losses is subject to certain limitations.

Certain Non-Corporate U.S. Holders are subject to a 3.8% tax on certain investment income, including capital gains from the sale or other disposition of stock. Non-Corporate U.S. 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 treated as 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 or are held for the production of passive income. For purposes of these tests, “passive income” includes dividends, interest, 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 legal uncertainties arising from 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 purposes. The IRS’s statement with respect to Tidewater cannot be relied upon or otherwise cited as precedent by taxpayers.

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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 generally 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 income inclusions would not be eligible for the preferential tax rates applicable to qualified dividend income. The Electing Holder’s adjusted tax basis in our 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 our 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 our 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 our 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 our common stock), and (ii) any gain realized on the sale, exchange or other disposition of our common stock. Under these special rules:

• the excess distribution or gain would be allocated ratably over the Non-Electing Holder’s aggregate holding period for our common stock;

• 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;

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• 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.

Additionally, for each year during which a U.S. Holder owns shares, we are a PFIC, and the total value of all PFIC stock that such U.S. Holder directly or indirectly owns exceeds certain thresholds, such U.S. Holder will be required to file IRS Form 8621 with its annual U.S. federal income tax return to report its ownership of our 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 common stock.

U.S. Holders are urged to consult their own tax advisors regarding the PFIC rules, including the PFIC annual reporting requirements, as well as 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 respective share 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 on the last day of a taxable year, or $75,000 at any time during that taxable year, may be required to report such assets on IRS Form 8938 with their U.S. federal income tax return for that taxable year. This reporting requirement does not apply to U.S. Individual Holders who report their ownership of our shares under the PFIC annual reporting rules described above. Penalties apply for failure to properly complete and file IRS Form 8938. U.S. Individual Holders are encouraged to consult with their own 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, a Non-U.S. Holder will not be subject to U.S. federal income tax on distributions received from us with respect to our common stock unless the distributions are effectively connected with the Non-U.S. Holder’s conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, are attributable to a permanent establishment that the Non-U.S. Holder maintains in the United States). If a Non-U.S. Holder is engaged in a U.S. trade or business and the distributions are deemed to be effectively connected to that trade or business, the Non-U.S. Holder generally will be subject to U.S. federal income tax on those distributions in the same manner as if it were a U.S. Holder.

Sale, Exchange or Other Disposition of Common Stock

In general, a Non-U.S. Holder is not subject to U.S. federal income tax on any gain resulting from the disposition of our common stock unless (a) such gain is effectively connected with the Non-U.S. Holder’s conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, is attributable to a permanent establishment that the Non-U.S. Holder maintains in the United States) or (b) the Non-U.S. Holder is an individual who 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. If a Non-U.S. Holder is engaged in a U.S. trade or business and the disposition of our common stock is deemed to be effectively connected to that trade or business, the Non-U.S. Holder generally will be subject to U.S. federal income tax on the resulting gain in the same manner as if it were a U.S. Holder.

Information Reporting and Backup Withholding

In general, payments of distributions with respect to, or the proceeds of a disposition of, our 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 it has failed to report all interest or distributions required to be shown on its 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 made to them within the United States, or through a U.S. payor by certifying their status on IRS Form W-8BEN, W-8BEN-E, W-8EXP, W-8ECI or W-8IMY, as applicable.

Backup withholding is not an additional tax. Rather, a shareholder 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 U.S. federal income tax 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 are not citizens of and 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, as in Teekay Corporation and its subsidiaries, 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. 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, drydocking 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 nine to 12 months. We generally do not hedge our net foreign currency exposure beyond three years forward.

As at December 31, 2014, we had the following foreign currency forward contracts:

	Contract Amount in Foreign		Average		Fair Value / Carrying Amount of Asset (Liability) (3)			Expected Maturity
								2015 (3)		2016 (3)
	Currency (1)		Forward Rate (2)		$			$
Norwegian Kroner		861,000		6.44		(18,407	)		91,400		42,253

(1) Foreign currency contract amounts in thousands.

(2) Average contractual exchange rate represents the contractual amount of foreign currency one U.S. Dollar will buy.

(3) Contract amounts and fair value amounts in thousands of U.S. Dollars.

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, 2014, we had Euro-denominated term loans of 235.6 million Euros ($285.0 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.

We enter into cross currency swaps, and pursuant to these swaps we receive the principal amount in 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 NOK based on NIBOR plus a margin for a payment of U.S. Dollar fixed interest. The purpose of the cross currency swaps is to economically hedge the foreign currency exposure on the payment of interest and principal of our NOK bonds due in 2015 through 2019.

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In addition, the cross currency swaps economically hedge the interest rate exposure on the NOK bonds due in 2015 through 2019. We have not designated, for accounting purposes, these cross currency swaps as cash flow hedges of our NOK-denominated bonds due in 2015 through 2019. As at December 31, 2014, we were committed to the following cross currency swaps:

Notional Amount NOK (1)		Notional Amount USD (1)		Floating Rate Receivable				Fixed Rate Payable			Fair Value / Asset (Liability) (1)			Remaining Term (years)
				Reference Rate	Margin
	700,000		122,800	NIBOR		4.75	%		5.52	%		(30,501	)		0.8
	500,000		89,710	NIBOR		4.00	%		4.80	%		(23,843	)		1.1
	600,000		101,351	NIBOR		5.75	%		7.49	%		(24,732	)		2.1
	700,000		125,000	NIBOR		5.25	%		6.88	%		(35,766	)		2.3
	800,000		143,536	NIBOR		4.75	%		5.93	%		(38,898	)		3.1
	900,000		150,000	NIBOR		4.35	%		6.43	%		(34,620	)		3.7
	1,000,000		162,200	NIBOR		4.25	%		6.28	%		(33,031	)		4.1
												(221,391	)

(1) In thousands of Norwegian Kroner and U.S. Dollars.

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, NIBOR or EURIBOR. Significant increases in interest rates could adversely affect our operating margins, results of operations and our ability to service 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. We have not designated any of our interest rate swap agreements in our consolidated entities as cash flow hedges for accounting purposes.

We are exposed to credit loss in the event of non-performance by the counterparties to the interest rate swap agreements. 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, 2014, that 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
	2015			2016			2017			2018			2019			Thereafter			Total			Asset / (Liability)			Rate(1)
	(in millions of U.S. dollars)
Long-Term Debt:
Variable Rate ($U.S.)(2)		514.7			682.9			905.0			1,196.9			284.0			1,248.7			4,832.2			(4,756.7	)		2.1	%
Variable Rate (Euro)(3)(4)		15.6			16.7			17.9			143.5			10.2			81.1			285.0			(273.5	)		1.6	%
Variable Rate (NOK)(4)(5)		93.9			67.1			174.5			228.1			134.2			—			697.8			(689.0	)		6.3	%
Fixed-Rate Debt ($U.S.)		29.9			30.4			22.1			21.6			316.2			501.3			921.5			(950.1	)		6.7	%
Average Interest Rate		3.3	%		3.4	%		3.1	%		4.9	%		5.9	%		7.7	%		6.7	%
Capital Lease Obligations
Variable-Rate ($U.S.)(6)		4.4			4.6			28.3			26.3			—			—			63.6			(63.6	)		5.5	%
Average Interest Rate(7)		5.4	%		5.4	%		4.6	%		6.4	%		—			—			5.5	%
Interest Rate Swaps:
Contract Amount ($U.S.)(8)		787.4			797.8			479.9			288.6			242.7			1,261.0			3,857.3			(359.9	)		3.5	%
Average Fixed Pay Rate(2)		3.6	%		2.7	%		3.7	%		2.4	%		2.9	%		4.1	%		3.5	%
Contract Amount (Euro)(4)(9)		15.6			16.7			17.9			143.5			10.2			81.1			285.0			(45.8	)		3.1	%
Average Fixed Pay Rate(3)		3.1	%		3.1	%		3.1	%		2.6	%		3.7	%		3.8	%		3.1	%

(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, 2014, ranged from 0.3% to 3.95% for U.S. Dollar denominated debt. 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.

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(3) Interest payments on Euro-denominated debt and interest rate swaps are based on EURIBOR.

(4) Euro-denominated and NOK-denominated amounts have been converted to U.S. Dollars using the prevailing exchange rate as of December 31, 2014.

(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 cross currency swaps, to swap all interest and principal payments at maturity into U.S. Dollars, with the interest payments fixed at rates between 4.80% to 7.49% and interest rate payments swapped from NIBOR plus margins between 4.00% to 5.75% and the transfer of principal fixed between $89.7 million to $162.2 million upon maturity in exchange for NOK 500 million to NOK 1 billion.

(6) The amount of capital lease obligations represents the present value of minimum lease payments together with our purchase obligation, as applicable.

(7) 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.

(8) 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.

(9) The average variable receive rate for our Euro-denominated interest rate swaps is set at 1-month EURIBOR.

Equity Price Risk

We and Teekay Tankers are exposed to the changes in the stock price of TIL. We and Teekay Tankers have stock purchase warrants entitling us and Teekay Tankers to purchase an aggregate of up to 1.5 million shares of common stock of TIL at a fixed price of $10 per share. The stock purchase warrants vest in four equally sized tranches. Each tranche will vest and become exercisable when and if the fair market value of a share of the Common Stock equals or exceeds 77.08 NOK, 92.50 NOK, 107.91 NOK and 123.33 NOK, respectively, for such tranche for any ten consecutive trading days. The stock purchase warrants expire on January 23, 2019.

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, 2014, 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, 2014, 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 U.S. 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 U.S. 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, 2014.

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.

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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 (2013) 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, 2014.

Our independent auditors, KPMG LLP, an independent 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-2 of this Annual Report.

There were no changes in our internal controls that have materially affected, or are reasonably likely to materially affect, 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, 2014.

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 a Standards of Business Conduct that applies to all employees and directors. This document is available under “Investors – Teekay Corporation – Governance” from the home page of our website (www.teekay.com). We also intend to disclose under “Investors – Teekay Corporation – Governance” in the Investors 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 2014 and 2013 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 2014 and 2013.

Fees (in thousands of U.S. dollars)	2014		2013
Audit Fees (1)	$	3,348	$	3,349
Audit-Related Fees (2)		61		44
Tax Fees (3)		69		51
All Other Fees (4)		14		50
Total	$	3,492	$	3,494

(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 2014 and 2013 include approximately $729,000 and $837,000, 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 2014 and 2013 include approximately $841,000 and $771,000, 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 2014 and 2013 include approximately $275,000 and $225,000, 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.

84

(3) For 2014 and 2013, tax fees principally included corporate tax compliance fees.

(4) All other fees principally relate to due diligence services provided in the year.

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 2014 and 2013.

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, 2014, 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, 2014, was $37.7 million. During 2013 and under a separate authorization, Teekay repurchased 0.3 million shares of Common Stock for $12.0 million from Resolute Investments Ltd.

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, are filed as part of this Annual Report:

	Page
Report of Independent Registered Public Accounting Firm		F-1 to F-2
Consolidated Financial Statements
Consolidated Statements of Income (Loss)		F-3
Consolidated Statements of Comprehensive Income (Loss)		F-4
Consolidated Balance Sheets		F-5
Consolidated Statements of Cash Flows		F-6
Consolidated Statements of Changes in Total Equity		F-7
Notes to the Consolidated Financial Statements		F-8

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.

85

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. (13)
1.2	Articles of Amendment of Articles of Incorporation of Teekay Corporation. (13)
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)
2.8	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. (14)
2.9	Agreement, dated October 5, 2012, for NOK 700,000,000 Senior Unsecured Bonds due October 2015, among us and Norsk Tillitsmann ASA. (18)
4.1	1995 Stock Option Plan. (2)
4.2	Amendment to 1995 Stock Option Plan. (3)
4.3	Amended 1995 Stock Option Plan. (4)
4.4	Amended 2003 Equity Incentive Plan. (16)
4.5	Annual Executive Bonus Plan. (5)
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. (7)
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. (8)
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. (5)
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. (5)
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. (6)
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. (9)
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. (9)
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. (10)
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. (11)
4.17	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. (12)
4.18	2013 Equity Incentive Plan. (15)
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. (17)
4.20	Amendment Agreement, dated December 18, 2013 for a U.S. $300,000,000 Margin Loan Agreement among Teekay Finance Limited, Citibank, N.A. and others. (19)
4.21	Agreement, dated February 24, 2014 for a U.S. $815,000,000 Secure Term Loan Facility Agreement among Knarr L.L.C., Citibank, N.A. and others. (20)
4.22	Agreement dated July 7, 2014; Teekay LNG Operating L.L.C. entered into a shareholder agreement with China LNG Shipping (Holdings) Limited to form TC LNG Shipping LLC in connection with the Yamal LNG Project.
4.23	Agreement dated December 17, 2014, for a U.S. $450,000,000 secured loan facility between Nakilat Holdco L.L.C. and Qatar National Bank SAQ.
4.24	Amendment Agreement No. 2, dated December 19, 2014 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	Consolidated Financial Statements of Malt LNG Netherlands Holdings B.V.
23.3	Consolidated Financial Statements of Exmar LPG BVBA.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema
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.

86

(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 Form 6-K (File No.1-12874), filed with the SEC on May 2, 2000, and hereby incorporated by reference to such Report.

(4) 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 Report.

(5) 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.

(6) 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.

(7) 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 Report.

(8) 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.

(9) 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.

(10) 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.

(11) 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.

(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 19, 2007, and hereby incorporated by reference to such Report.

(13) 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.

(14) 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.

(15) 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.

(16) 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.

(17) Previously filed as an exhibit to the Company’s Report on Form 20-F (File No. 1-12874), filed with the SEC on April 29, 2013, and hereby incorporated by reference to such Report.

(18) Previously filed as an exhibit to the Company’s Report on Form 20-F (File No. 1-12874), filed with the SEC on April 28, 2014, and hereby incorporated by reference to such Report.

(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 28, 2014, and hereby incorporated by reference to such Report.

(20) Previously filed as an exhibit to our Company’s Report on Form 6-K (File No. 1-12874), filed with the SEC on September 2, 2014, and hereby incorporated by reference to such Report.

87

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, 2015

88

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Shareholders

TEEKAY CORPORATION

We have audited the accompanying consolidated balance sheets of Teekay Corporation and subsidiaries (the “Company”) as of December 31, 2014 and 2013, and the related consolidated statements of income (loss), comprehensive income (loss), cash flows and changes in total equity for each of the years in the three-year period ended December 31, 2014. 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 audits.

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, 2014 and 2013, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2014, 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, 2014, based on criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and our report dated April 29, 2015, 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, 2015

F - 1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Shareholders

TEEKAY CORPORATION

We have audited Teekay Corporation and subsidiaries’ (“the Company”) internal control over financial reporting as of December 31, 2014, based on the criteria established in Internal Control—Integrated Framework (2013) 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, 2014 based on the criteria established in Internal Control—Integrated Framework (2013) 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, 2014 and 2013, and the related consolidated statements of income (loss), comprehensive income (loss), cash flows and changes in total equity for each of the years in the three-year period ended December 31, 2014, and our report dated April 29, 2015 expressed an unqualified opinion on those consolidated financial statements.

/s/ KPMG LLP

Chartered Accountants

Vancouver, Canada

April 29, 2015

F - 2

TEEKAY CORPORATION AND SUBSIDIARIES (NOTE 1)

CONSOLIDATED STATEMENTS OF INCOME (LOSS)

(in thousands of U.S. dollars, except share amounts)

	Year Ended December 31, 2014 $			Year Ended December 31, 2013 $			Year Ended December 31, 2012 $
Revenues		1,993,920			1,830,085			1,980,771
Voyage expenses		(127,847	)		(112,218	)		(138,283	)
Vessel operating expenses		(809,319	)		(806,152	)		(813,326	)
Time-charter hire expense		(67,219	)		(103,646	)		(130,739	)
Depreciation and amortization		(422,904	)		(431,086	)		(455,898	)
General and administrative		(140,917	)		(140,958	)		(144,296	)
Asset impairments (note 18b)		(4,759	)		(167,605	)		(432,196	)
Loan loss recoveries (provisions) (note 18b)		2,521			(748	)		(1,886	)
Net gain (loss) on sale of vessels, equipment and other assets (note 18a)		13,509			1,995			(6,975	)
Restructuring charges (note 20)		(9,826	)		(6,921	)		(7,565	)
Income (loss) from vessel operations		427,159			62,746			(150,393	)
Interest expense		(208,529	)		(181,396	)		(167,615	)
Interest income		6,827			9,708			6,159
Realized and unrealized (loss) gain on non-designated derivative instruments (note 15)		(231,675	)		18,414			(80,352	)
Equity income (note 23)		128,114			136,538			79,211
Foreign exchange gain (loss) (notes 8 and 15)		13,431			(13,304	)		(12,898	)
Other (loss) income (note 14)		(1,152	)		5,646			366
Net income (loss) before income taxes		134,175			38,352			(325,522	)
Income tax (expense) recovery (note 21)		(10,173	)		(2,872	)		14,406
Net income (loss)		124,002			35,480			(311,116	)
Less: Net (income) loss attributable to non-controlling interests		(178,759	)		(150,218	)		150,936
Net loss attributable to shareholders of Teekay Corporation		(54,757	)		(114,738	)		(160,180	)
Per common share of Teekay Corporation (note 19)
•       Basic loss attributable to shareholders of Teekay Corporation		(0.76	)		(1.63	)		(2.31	)
•       Diluted loss attributable to shareholders of Teekay Corporation		(0.76	)		(1.63	)		(2.31	)
•       Cash dividends declared		1.2650			1.2650			1.2650
Weighted average number of common shares outstanding (note 19)
•       Basic		72,066,008			70,457,968			69,263,369
•       Diluted		72,066,008			70,457,968			69,263,369

The accompanying notes are an integral part of the consolidated financial statements.

F - 3

TEEKAY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands of U.S. dollars)

	Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,
	2014			2013			2012
	$			$			$
Net income (loss)		124,002			35,480			(311,116	)
Other comprehensive (loss) income:
Other comprehensive (loss) income before reclassifications
Unrealized loss on marketable securities		(1,151	)		(2,233	)		(1,904	)
Unrealized (loss) gain on qualifying cash flow hedging instruments		(3,082	)		(836	)		2,412
Pension adjustments, net of taxes		(7,637	)		(3,640	)		6,698
Foreign exchange gain on currency translation		174			740			1,144
Amounts reclassified from accumulated other comprehensive loss
To other income:
Impairment of marketable securities		1,322			2,062			2,560
To general and administrative expenses:
Realized loss (gain) on qualifying cash flow hedging instruments		—			257			(1,435	)
Settlement of defined benefit pension plan		(3,332	)		974			—
To equity income:
Realized loss on qualifying cash flow hedging instruments		1,551			405			—
Other comprehensive (loss) income		(12,155	)		(2,271	)		9,475
Comprehensive income (loss)		111,847			33,209			(301,641	)
Less: Comprehensive (income) loss attributable to non-controlling interests		(177,713	)		(150,368	)		150,601
Comprehensive loss attributable to shareholders of Teekay Corporation		(65,866	)		(117,159	)		(151,040	)

The accompanying notes are an integral part of the consolidated financial statements.

F - 4

TEEKAY CORPORATION AND SUBSIDIARIES (NOTE 1)

CONSOLIDATED BALANCE SHEETS

(in thousands of U.S. dollars)

	As at			As at
	December 31,			December 31,
	2014			2013
	$			$
ASSETS
Current
Cash and cash equivalents (note 8)		806,904			614,660
Restricted cash (note 10)		33,653			4,748
Accounts receivable, including non-trade of $49,707 (2013 - $109,114) and related party balances of $38,616 (2013 - $16,371)		378,193			528,594
Assets held for sale (notes 11 and 18)		—			176,247
Net investment in direct financing leases (note 9)		20,823			21,545
Prepaid expenses and other		69,470			57,158
Current portion of loans to equity-accounted investees (note 23)		26,209			37,019
Current portion of investment in term loans (note 4)		—			211,579
Current portion of derivative assets (note 15)		—			23,040
Total current assets		1,335,252			1,674,590
Restricted cash - non-current (note 10)		85,698			497,984
Vessels and equipment (note 8)
At cost, less accumulated depreciation of $2,627,499 (2013 - $2,135,780)		6,307,971			5,983,128
Vessels under capital leases, at cost, less accumulated amortization of $50,898 (2013 – $152,020) (note 10)		91,776			571,692
Advances on newbuilding contracts and conversion costs (note 16a)		1,706,500			796,324
Total vessels and equipment		8,106,247			7,351,144
Net investment in direct financing leases - non-current (note 9)		684,130			705,717
Loans to equity-accounted investees and joint venture partners, bearing interest between nil to 8% (note 23)		227,217			132,229
Derivative assets (note 15)		14,415			69,797
Equity-accounted investments (notes 16c and 23)		873,421			690,309
Other non-current assets		274,595			159,494
Intangible assets – net (note 6)		94,666			107,898
Goodwill (note 6)		168,571			166,539
Total assets		11,864,212			11,555,701
LIABILITIES AND EQUITY
Current
Accounts payable		85,290			98,415
Accrued liabilities (notes 7 and 15)		394,759			466,824
Liabilities associated with assets held for sale (notes 8, 11 and 18)		—			168,007
Current portion of derivative liabilities (note 15)		203,957			143,999
Current portion of long-term debt (note 8)		654,134			996,425
Current obligation under capital leases (note 10)		4,422			31,668
Current portion of in-process revenue contracts		23,414			40,176
Total current liabilities		1,365,976			1,945,514
Long-term debt, including amounts due to joint venture partners of nil (2013 - $13,282) (note 8)		6,082,364			5,113,045
Long-term obligation under capital leases (note 10)		59,128			566,661
Derivative liabilities (note 15)		422,182			299,570
In-process revenue contracts		149,998			139,676
Other long-term liabilities		383,089			271,621
Total liabilities		8,462,737			8,336,087
Commitments and contingencies (note 8, 9, 10, 15 and 16)
Redeemable non-controlling interest (note 16e)		12,842			16,564
Equity
Common stock and additional paid-in capital ($0.001 par value; 725,000,000 shares authorized; 72,500,502 shares outstanding (2013 - 70,729,399); 73,299,702 shares issued (2013 - 71,528,599) (note 12)		770,759			713,760
Retained earnings		355,867			435,217
Non-controlling interest		2,290,305			2,071,262
Accumulated other comprehensive loss (note 1)		(28,298	)		(17,189	)
Total equity		3,388,633			3,203,050
Total liabilities and equity		11,864,212			11,555,701
Consolidation of variable interest entities (note 3f)

The accompanying notes are an integral part of the consolidated financial statements.

F - 5

TEEKAY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands of U.S. dollars)

	Year Ended December 31, 2014 $			Year Ended December 31, 2013 $			Year Ended December 31, 2012 $
Cash and cash equivalents provided by (used for)
OPERATING ACTIVITIES
Net income (loss)		124,002			35,480			(311,116	)
Non-cash items:
Depreciation and amortization		422,904			431,086			455,898
Amortization of in-process revenue contracts (note 6)		(40,939	)		(61,700	)		(72,933	)
Unrealized loss (gain) on derivative instruments		267,830			(113,344	)		(40,373	)
(Gain) loss on sale of vessels and equipment		(13,509	)		(1,995	)		6,975
Asset impairments and loan loss provisions(note 18b)		2,238			168,353			434,082
Equity income, net of dividends received		(94,726	)		(121,144	)		(65,639	)
Income tax expense (recovery)		10,173			2,872			(14,406	)
Unrealized foreign exchange (gain) loss and other		(217,908	)		(39,003	)		46,680
Change in operating assets and liabilities (note 17a)		60,631			64,184			(115,209	)
Expenditures for dry docking		(74,379	)		(72,205	)		(35,023	)
Net operating cash flow		446,317			292,584			288,936
FINANCING ACTIVITIES
Proceeds from issuance of long-term debt, net of issuance costs (note 8)		3,365,045			2,451,828			1,407,275
Scheduled repayments of long-term debt		(1,291,322	)		(695,688	)		(266,242	)
Prepayments of long-term debt		(1,331,469	)		(1,017,818	)		(1,060,169	)
Repayments of capital lease obligations		(479,115	)		(10,315	)		(10,161	)
Decrease (increase) in restricted cash (note 10)		380,953			31,776			(33,592	)
Net proceeds from equity issuances of subsidiaries (note 5)		452,061			446,893			496,224
Equity contribution by joint venture partner		27,267			4,934			86,350
Issuance of Common Stock upon exercise of stock options		55,165			27,219			11,617
Distribution from subsidiaries to non-controlling interests		(360,820	)		(269,987	)		(246,555	)
Cash dividends paid		(91,004	)		(90,265	)		(83,299	)
Other financing activities		—			(12,000	)		(1,777	)
Net financing cash flow		726,761			866,577			299,671
INVESTING ACTIVITIES
Expenditures for vessels and equipment		(994,931	)		(753,755	)		(523,597	)
Proceeds from sale of vessels and equipment		180,638			47,704			250,807
Purchase of ALP (net of cash acquired of $294) (note 3d)		(2,322	)		—			—
Purchase of Logitel (net of cash acquired of $8,089) (note 3a)		4,090			—			—
Acquisition of FPSO units and Sevan Marine ASA, net of cash acquired (note 3f)		—			—			(92,303	)
Recovery (investment) in term loans (note 4)		4,814			(12,552	)		—
Investment in equity-accounted investees (note 23)		(79,602	)		(157,762	)		(183,554	)
Advances to equity-accounted investees		(87,130	)		(14,466	)		(117,235	)
Investment in direct financing lease assets (note 9)		—			(307,950	)		—
Direct financing lease payments received		22,856			17,289			23,307
Investment in cost accounted investment		(25,000	)		—			—
Other investing activities		(4,247	)		(2,500	)		1,332
Net investing cash flow		(980,834	)		(1,183,992	)		(641,243	)
Increase (decrease) in cash and cash equivalents		192,244			(24,831	)		(52,636	)
Cash and cash equivalents, beginning of the year		614,660			639,491			692,127
Cash and cash equivalents, end of the year		806,904			614,660			639,491
Supplemental cash flow information (note 17)

The accompanying notes are an integral part of the consolidated financial statements.

F - 6

TEEKAY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN TOTAL EQUITY

(in thousands of U.S. dollars and shares)

	TOTAL EQUITY
	Thousands of Shares of Common Stock Outstanding #			Common Stock and Additional Paid-in Capital $			Retained Earnings $			Accumulated Other Comprehensive Income (Loss) $			Non- controlling Interest $			Total $			Redeemable Non- controlling Interest $
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 income														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 (note 12)					9,393												9,393
Dilution gain on public offerings of Teekay Offshore, Teekay Tankers, Teekay LNG and share issuances of Teekay Offshore (note 5)								88,727									88,727
Additions to 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
Net (loss) income								(114,738	)					150,218			35,480
Reclassification of redeemable non-controlling interest in net income														6,391			6,391			(6,391	)
Other comprehensive income											(2,421	)		150			(2,271	)
Dividends declared								(90,273	)					(263,141	)		(353,414	)		(5,860	)
Reinvested dividends		1			8												8
Exercise of stock options and other (note 12)		1,324			27,219												27,219
Repurchase of Common Stock (note 12)		(300	)		(2,722	)		(9,278	)								(12,000	)
Employee stock compensation (note 12)					7,322												7,322
Dilution gain on public offerings of Teekay LNG, Teekay Offshore and Teekay Tankers (note 5)								36,703									36,703
Excess of purchase price over the carrying value upon acquisition of Variable Interest Entity (note 3f)								(35,421	)								(35,421	)
Additions to non-controlling interest from share and unit issuances of subsidiaries and other														301,559			301,559
Balance as at December 31, 2013		70,729			713,760			435,217			(17,189	)		2,071,262			3,203,050			16,564
Net (loss) income								(54,757	)					178,759			124,002
Reclassification of redeemable non-controlling interest in net income														(7,777	)		(7,777	)		7,777
Other comprehensive income											(11,109	)		(1,046	)		(12,155	)
Dividends declared								(93,021	)					(363,685	)		(456,706	)		(11,499	)
Reinvested dividends		1			6												6
Exercise of stock options and other (note 12)		1,771			55,165												55,165
Employee stock compensation (note 12)					1,828												1,828
Dilution gain on public offerings of Teekay LNG, Teekay Offshore and Teekay Tankers (note 5)								68,428									68,428
Additions to non-controlling interest from share and unit issuances of subsidiaries and other														412,792			412,792
Balance as at December 31, 2014		72,501			770,759			355,867			(28,298	)		2,290,305			3,388,633			12,842

The accompanying notes are an integral part of the consolidated financial statements.

F - 7

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

These consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (or GAAP). They include the assets, liabilities, revenues and expenses of Teekay Corporation (or Teekay), which is incorporated under the laws of the Republic of The Marshall Islands, its wholly-owned subsidiaries and those non-wholly owned subsidiaries in which Teekay has a controlling financial interest (collectively, the Company). Certain of Teekay’s significant non-wholly owned subsidiaries are consolidated in these financial statements even though Teekay owns less than a 50% ownership interest in the subsidiaries. These significant subsidiaries include the following publicly traded subsidiaries (collectively, the Public Subsidiaries): Teekay LNG Partners L.P. (or Teekay LNG); Teekay Offshore Partners L.P. (or Teekay Offshore); and Teekay Tankers Ltd. (or Teekay Tankers). As of December 31, 2014, Teekay owned a 33.5% interest in Teekay LNG (35.3% - December 31, 2013), including common units and its 2% general partner interest, a 27.3% interest in Teekay Offshore (29.3% - December 31, 2013), including common units and its 2% general partner interest, and 26.2% of the capital stock of Teekay Tankers (25.1% - December 31, 2013), 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. While Teekay owns less than 50% of each of the Public Subsidiaries, Teekay maintains control of Teekay LNG and Teekay Offshore by virtue of its 100% ownership interest in the general partners of Teekay LNG and Teekay Offshore, which are both master limited partnerships, and maintains control of Teekay Tankers through its ownership of a sufficient number of Class A common shares and Class B common shares, which provide increased voting rights, to maintain a majority voting interest in Teekay Tankers and thus consolidates these subsidiaries. Significant intercompany balances and transactions have been eliminated upon consolidation. 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 through June 2015.

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.

In the current period, the Company has presented the conversion costs incurred at period end for the Company’s committed vessel conversions in Advances on newbuilding contracts and conversion costs on the consolidated balance sheets. Prior to 2014, the Company included these amounts in Vessels and equipment – At cost, less accumulated depreciation. All such costs incurred in comparative periods have been reclassified from Vessels and equipment – At cost, less accumulated depreciation to Advances on newbuilding contracts and conversion costs to conform to the presentation adopted in the current period. The amount reclassified as at December 31, 2013 was $29.8 million.

Non-Controlling Interests

Where Teekay’s ownership interest in a consolidated subsidiary is less than 100%, the non-controlling interests’ share of these non-wholly owned subsidiaries are reported in the Company’s consolidated balance sheets as a separate component of equity. The non-controlling interests’ share of the net income (loss) of these non-wholly owned subsidiaries is reported in the Company’s consolidated statements of income (loss) as a deduction from the Company’s net income (loss) to arrive at net income (loss) attributable to shareholders of Teekay.

The basis for attributing net income (loss) of each non-wholly owned subsidiary to the controlling interest and the non-controlling interests, with the exception of Teekay LNG and Teekay Offshore, is based on the relative ownership interests of the non-controlling interests compared to the controlling interest, which is consistent with how dividends and distributions are paid or are payable for these non-wholly owned subsidiaries.

Teekay LNG and Teekay Offshore each have limited partners and one general partner. Both general partners are owned by Teekay. For Teekay LNG, the limited partners hold common units. For Teekay Offshore, the limited partners hold common units and preferred units. For each quarterly period, the method of attributing Teekay LNG’s and Teekay Offshore’s net income (loss) of that period to the non-controlling interests of Teekay LNG and Teekay Offshore begins by attributing net income (loss) of Teekay Offshore to the non-controlling interests which hold 100% of the preferred units of Teekay Offshore in an amount equal to the amount of preferred unit distributions declared for the quarterly period. The remaining net income (loss) to be attributed to the controlling interest and the non-controlling interests of Teekay LNG and Teekay Offshore is divided into two components. The first component consists of the cash distribution that Teekay LNG or Teekay Offshore will declare and pay to limited and general partners for that quarterly period (the Distributed Earnings). The second component consists of the difference between the net income (loss) of Teekay LNG or Teekay Offshore that is available to be allocated to the common unit holders and the general partner of such entity and the amount of the first component cash distribution (the Undistributed Earnings). The portion of the Distributed Earnings that is allocated to the non-controlling interests is the amount of the cash distribution that Teekay LNG or Teekay Offshore will declare and pay to the non-controlling interests for that quarterly period. The portion of the Undistributed Earnings that is allocated to the non-controlling interests is based on the relative ownership percentages of the non-controlling interests of Teekay LNG and Teekay Offshore compared to the controlling interest.

When Teekay’s non-wholly owned subsidiaries declare dividends or distributions to their owners, or require all of their owners to contribute capital to the non-wholly owned subsidiaries, such amounts are paid to, or received from, each of the owners of the non-wholly owned subsidiaries based on the relative ownership interests in the non-wholly owned subsidiary. As such, any dividends or distributions paid to, or capital contributions received from, the non-controlling interests are reflected as a reduction (dividends or distributions) or an increase (capital contributions) in non-controlling interest in the Company’s consolidated balance sheets.

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)

When Teekay’s non-wholly owned subsidiaries issue additional equity interests to non-controlling interests, Teekay is effectively selling a portion of the non-wholly owned subsidiaries. Consequently, the proceeds received by the subsidiaries from their issuance of additional equity interests are allocated between non-controlling interest and retained earnings in the Company’s consolidated balance sheets. The portion allocated to non-controlling interest on the Company’s consolidated balance sheets consists of the carrying value of the portion of the non-wholly owned subsidiary that is effectively disposed of, with the remaining amount attributable to the controlling interest, which consists of the Company’s dilution gain or loss that is allocated to retained earnings.

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 income (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 proportionate performance method. The Company uses a discharge-to-discharge basis in determining proportionate performance 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 the fulfillment of the applicable performance criteria. Revenues and expenses relating to engineering studies are recognized when the 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 a 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 their 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 was no significant amounts recorded as allowance for doubtful accounts as at December 31, 2014, 2013, and 2012.

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 significantly 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.

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)

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 25 years for FPSO units, 35 years for liquefied natural gas (or LNG) carriers 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, 2014, 2013, and 2012 aggregated $341.5 million, $346.5 million and $364.3 million, respectively. Amortization of vessels accounted for as capital leases was $21.6 million, $22.8 million and $30.1 million for the years ended December 31, 2014, 2013, and 2012, 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, 2014, 2013, and 2012, aggregated $51.3 million, $14.6 million and $34.9 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 costs those costs incurred as part of the dry docking 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.

The continuity of capitalized dry docking costs for the three years ended December 31, 2014, 2013, and 2012, is summarized as follows:

	Year Ended December 31,
	2014			2013			2012
	$			$			$
Balance at the beginning of the year		118,194			100,928			128,987
Costs incurred for dry dockings		74,018			72,545			35,336
Dry dock amortization		(50,926	)		(50,325	)		(57,082	)
Write down / sales of vessels		(5,955	)		(4,954	)		(6,313	)
Balance at the end of the year		135,331			118,194			100,928

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.

Vessels and equipment that are “held for sale” are measured at the lower of their carrying amount or fair value less costs to sell and are not depreciated while classified as held for sale. Interest and other expenses attributable to vessels and equipment classified as held for sale, or to their related liabilities, continue to be recognized as incurred.

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 four LNG carriers and an FSO unit on long-term time charters, 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.

F - 10

The Company’s investments in loan receivables are recorded at cost. The premium paid over the outstanding principal amount was amortized to interest income over the term of the loan using the effective interest rate method. The Company analyzes its loans for collectability 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 (when available) any information provided by the debtor regarding their ability to repay the loan and the fair value of the underlying collateral. 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 statements of income (loss). The carrying value of the loans will be adjusted each subsequent reporting period to reflect any changes in the present value of estimated future cash flows.

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, 2014.

			December 31,
			2014		2013
Class of Financing Receivable	Credit Quality Indicator	Grade	$		$
Direct financing leases	Payment activity	Performing		704,953		727,262
Other loan receivables
Investment in term loans and interest receivable	Collateral	Non-Performing(1)		—		211,579
Loans to equity-accounted investees and joint
venture partners (2)	Other internal metrics	Performing		253,426		169,248
Long-term receivable included in other assets	Payment activity	Performing		43,843		31,634
				1,002,222		1,139,723

(1) In March 2014, Teekay and Teekay Tankers took ownership of the vessels held as collateral in satisfaction of the loans and accrued interest. (See Note 4).

(2) The Company’s subsidiary Teekay LNG owns a 99% interest in Teekay Tangguh Borrower LLC (or Teekay Tangguh), which owns a 70% interest in the Teekay BLT Corporation (or the Teekay Tangguh Joint Venture), essentially giving Teekay LNG a 69% interest in the Teekay Tangguh Joint Venture. During the year ended December 31, 2012, the parent company of Teekay LNG‘s joint venture partner, BLT LNG Tangguh Corporation (or BLT), suspended trading on the Jakarta Stock Exchange and entered into a court-supervised debt restructuring in Indonesia. The remaining loans to BLT, totaling $1.8 million as at December 31, 2014 (December 31, 2013 - $28.5 million), are considered to be collectible given a signed settlement agreement between the Company and BLT regarding repayment terms. In 2014, the Teekay Tangguh Joint Venture declared dividends of $87.1 million, of which $14.4 million was used to offset the advances made to BLT and P.T. Berlian Laju Tanker and $11.7 million was repaid to Teekay by BLT. In addition, $1.5 million was paid to Teekay by BLT as part of the settlement agreement.

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 statements of income (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 (See Note 15).

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)

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 income (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 income (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 income (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 income (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 income (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 (loss) gain 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 gain (loss) in the consolidated statements of income (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 acquired 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 the costs associated with the 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 to be received 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, 2014, the ARO and associated receivable, which is recorded in other non-current assets, were $25.0 million and $6.8 million, respectively (2013 - $27.2 million and $7.5 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.

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)

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.

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 income (loss)

The following table contains the changes in the balances of each component of accumulated other comprehensive income (loss) attributable to shareholders of Teekay for the periods presented.

	Qualifying Cash Flow Hedging Instruments			Pension Adjustments			Unrealized (Loss) Gain on Available for Sale Marketable Securities			Foreign Exchange Loss on Currency Translation		Total
	$			$			$			$		$
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	)
Other comprehensive (loss) income		(324	)		(2,666	)		(171	)		740		(2,421	)
Balance as of December 31, 2013		17			(18,919	)		(171	)		1,884		(17,189	)
Other comprehensive (loss) income		(485	)		(10,969	)		171			174		(11,109	)
Balance as of December 31, 2014		(468	)		(29,888	)		—			2,058		(28,298	)

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.

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)

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.

Accounting Pronouncements Not Yet Adopted

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers. ASU 2014-09 will require companies to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. This update creates a five-step model that requires companies to exercise judgment when considering the terms of the contract(s) which include (i) identifying the contract(s) with the customer, (ii) identifying the separate performance obligations in the contract, (iii) determining the transaction price, (iv) allocating the transaction price to the separate performance obligations, and (v) recognizing revenue as each performance obligation is satisfied. ASU 2014-09 is effective for interim and annual periods beginning after December 15, 2016 and shall, at the Company’s option, be applied retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. Early adoption is not permitted. The Company is evaluating the effect of adopting this new accounting guidance.

In April 2014, the FASB issued ASU 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, which raises the threshold for disposals to qualify as discontinued operations. A discontinued operation is now defined as: (i) a component of an entity or group of components that has been disposed of or classified as held for sale and represents a strategic shift that has or will have a major effect on an entity’s operations and financial results; or (ii) an acquired business that is classified as held for sale on the acquisition date. ASU 2014-08 also requires additional disclosures regarding discontinued operations, as well as material disposals that do not meet the definition of discontinued operations. ASU 2014-08 is effective for fiscal years beginning on or after December 15, 2014, and interim periods within those years. Early adoption is permitted, but only for disposals (or classifications as held for sale) that have not been reported in the financial statements previously issued or available for issuance. The impact, if any, of adopting ASU 2014-08 on the Company’s financial statements will depend on the occurrence and nature of disposals that occur after ASU 2014-08 is adopted.

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, FSO and offshore support 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, FSO and offshore support segment consists of shuttle tankers, FSO units, floating accommodation units (or FAUs) and long-distance towing and offshore installation vessels. 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, 2014, 2013, and 2012.

Year ended December 31, 2014	Shuttle Tanker, FSO and Offshore Support Segment $			FPSO Segment $			Liquefied Gas Segment $			Conventional Tanker Segment $			Total $
Revenues		608,068			614,463			325,707			445,682			1,993,920
Voyage expenses		(106,291	)		(756	)		(1,913	)		(18,887	)		(127,847	)
Vessel operating expenses		(191,173	)		(370,397	)		(68,839	)		(178,910	)		(809,319	)
Time-charter hire expense		(31,090	)		—			—			(36,129	)		(67,219	)
Depreciation and amortization		(111,891	)		(157,829	)		(71,712	)		(81,472	)		(422,904	)
General and administrative (1)		(35,665	)		(57,915	)		(27,434	)		(19,903	)		(140,917	)
Asset impairments		(4,759	)		—			—			—			(4,759	)
Loan loss recoveries		—			2,521			—			—			2,521
Net gain on sale of vessels and equipment		3,121			935			—			9,453			13,509
Restructuring recoveries (charges)		812			—			—			(10,638	)		(9,826	)
Income from vessel operations		131,132			31,022			155,809			109,196			427,159

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, 2013	Shuttle Tanker, FSO and Offshore Support Segment $			FPSO Segment $			Liquefied Gas Segment $			Conventional Tanker Segment $			Total $
Revenues		583,201			567,620			298,228			381,036			1,830,085
Voyage expenses		(99,111	)		—			(602	)		(12,505	)		(112,218	)
Vessel operating expenses		(182,973	)		(364,986	)		(61,471	)		(196,722	)		(806,152	)
Time-charter hire expense		(56,682	)		—			—			(46,964	)		(103,646	)
Depreciation and amortization		(116,376	)		(151,365	)		(71,485	)		(91,860	)		(431,086	)
General and administrative (1)		(37,529	)		(51,891	)		(19,597	)		(31,941	)		(140,958	)
Asset impairments		(76,782	)		—			—			(90,823	)		(167,605	)
Loan loss (provisions) recoveries		—			(2,634	)		—			1,886			(748	)
Net gain on sale of vessels and equipment		—			1,338			—			657			1,995
Restructuring charges		(2,123	)		—			—			(4,798	)		(6,921	)
Income (loss) from vessel operations		11,625			(1,918	)		145,073			(92,034	)		62,746
Year ended December 31, 2012	Shuttle Tanker, FSO and Offshore Support Segment $			FPSO Segment $			Liquefied Gas Segment $			Conventional Tanker Segment $			Total $
Revenues		616,295			581,215			291,712			491,549			1,980,771
Voyage expenses		(104,382	)		(232	)		(283	)		(33,386	)		(138,283	)
Vessel operating expenses		(196,021	)		(354,020	)		(54,773	)		(208,512	)		(813,326	)
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 (1)		(36,484	)		(45,139	)		(18,643	)		(44,030	)		(144,296	)
Asset impairments		(28,830	)		—			—			(403,366	)		(432,196	)
Loan loss provisions		—			—			—			(1,886	)		(1,886	)
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	)

(1) 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, 2014		December 31, 2013
	$		$
Shuttle tanker, FSO and offshore support segment		2,055,348		1,947,905
FPSO segment		3,442,109		2,836,998
Liquefied gas segment		3,401,167		3,616,044
Conventional tanker segment		1,538,074		1,874,101
Cash		806,904		614,660
Accounts receivable and other assets		620,610		665,993
Consolidated total assets		11,864,212		11,555,701

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, 2014	Year Ended December 31, 2013	Year Ended December 31, 2012
Petroleo Brasileiro SA (1)	$248.2 or 12%	$244.3 or 13%	$289.3 or 15%
Statoil ASA (1)	$239.8 or 12%	$250.5 or 14%	$299.1 or 15%
BP PLC (2)	(3)	$182.5 or 10%	(3)

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)

(1) Shuttle tanker, FSO and offshore support and conventional tanker segments

(2) Shuttle tanker, FSO and offshore support, liquefied gas and conventional tanker segments

(3) Less than 10%

3. Investments

a) Acquisition of Logitel Offshore Holding AS

In August 2014, the Company’s publicly-listed subsidiary Teekay Offshore acquired 100% of the outstanding shares of Logitel Offshore Holding AS (or Logitel). The purchase price for the shares of Logitel consisted of $4.0 million in cash paid at closing and a potential additional cash amount of $27.6 million, subject to reductions of some or all of this potential additional amount if certain performance criteria are not met, primarily relating to the construction of the three FAUs ordered from the COSCO (Nantong) Shipyard (or COSCO) in China (see note 11).

Teekay Offshore is committed to acquire the three FAUs ordered from COSCO for a total cost of approximately $588 million, including estimated site supervision costs and license fees to be paid to Sevan Marine ASA (or Sevan) to allow for use of its cylindrical hull design in these FAUs, and $30.0 million from Teekay Offshore’s assumption of Logitel’s obligations under a bond agreement from Sevan. Prior to the acquisition, Logitel secured a three-year fixed-rate charter contract, plus extension options, with Petroleo Brasileiro SA (or Petrobras) in Brazil for the first FAU, which delivered in February 2015. The second FAU is currently under construction and in August 2014 Teekay Offshore exercised one of its existing six options with COSCO to construct a third FAU.

As noted above, Teekay Offshore assumed Logitel’s obligations under a bond agreement from Sevan as part of this acquisition. The bond is non-interest bearing and is repayable in amounts of $10.0 million within six months of delivery of each of the three FAUs ordered from COSCO, for a total of $30.0 million. If Logitel orders additional FAUs with the Sevan cylindrical design, Logitel will be required to pay Sevan up to $11.9 million for each of the next three FAUs ordered. If the fourth of six options with COSCO is not exercised by its option expiry date on November 30, 2016, Sevan has a one-time option to receive the remaining two options with COSCO.

The acquisition of Logitel represents Teekay Offshore’s entrance into the FAU business, which is in an adjacent sector to Teekay Offshore’s FPSO and shuttle tanker businesses. The acquisition of Logitel was accounted for using the purchase method of accounting, based upon preliminary estimates of fair value.

The following table summarizes the preliminary estimates of fair values of the Logitel assets acquired and liabilities assumed by Teekay Offshore on the acquisition date. Teekay Offshore is continuing to obtain information to finalize estimated fair value of the Logitel assets acquired and liabilities assumed and expects to complete this process as soon as practicable, but no later than one year from the acquisition date.

(in thousands of U.S. dollars)	As at August 11, 2014 $
ASSETS
Cash and cash equivalents		8,089
Prepaid expenses		640
Advances on newbuilding contracts		46,809
Total assets acquired		55,538
LIABILITIES
Accrued liabilities		4,098
Long-term debt		26,270
Total liabilities assumed		30,368
Net assets acquired		25,170
Cash consideration		4,000
Contingent consideration		21,170

Operating results of Logitel are reflected in the Company’s financial statements commencing August 11, 2014, the effective date of acquisition. For the year ended December 31, 2014, the Company recognized $nil revenue and $1.0 million of net loss resulting from this acquisition.

b) Teekay LNG – Yamal LNG Joint Venture

In July 2014, the Company’s publicly-listed subsidiary Teekay LNG, through a new 50/50 joint venture (or the Yamal LNG Joint Venture) with China LNG Shipping (Holdings) Limited (or China LNG), ordered six internationally-flagged icebreaker LNG carriers for a project located on the Yamal Peninsula in Northern Russia (or the Yamal LNG Project). The Yamal LNG Project is a joint venture between Russia-based Novatek OAO (60%), France-based Total S.A. (20%) and China-based China National Petroleum Corporation (or CNPC) (20%), and will consist of three LNG trains with a total expected capacity of 16.5 million metric tons of LNG per annum and is currently scheduled to start-up in early-2018. The six 172,000-cubic meter ARC7 LNG carrier newbuildings will be constructed by Daewoo Shipbuilding & Marine Engineering Co. (or DSME), of South Korea, for an estimated total fully built-up cost of approximately $2.1 billion.

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 vessels, which will be constructed with maximum 2.1 meter icebreaking capabilities in both the forward and reverse directions, are scheduled to deliver at various times between the first quarter of 2018 and first quarter of 2020. Upon their deliveries, the six LNG carriers will each operate under fixed-rate time-charter contracts with Yamal Trade Pte. Ltd. until December 31, 2045, plus extension options. As of December 31, 2014, Teekay LNG had advanced $95.3 million to the Yamal LNG Joint Venture to fund newbuilding installments.

c) Teekay LNG – BG International Limited Joint Venture

In June 2014, Teekay LNG acquired from BG International Limited (or BG) its ownership interests in four 174,000-cubic meter Tri-Fuel Diesel Electric LNG carrier newbuildings, which will be constructed by Hudong-Zhonghua Shipbuilding (Group) Co., Ltd. in China for an estimated total fully built-up cost to the joint venture of approximately $1.0 billion. The vessels, upon delivery, which are scheduled to deliver between September 2017 and January 2019, will each operate under 20-year fixed-rate time-charter contracts, plus extension options, with Methane Services Limited, a wholly-owned subsidiary of BG. As compensation for BG’s ownership interest in these four LNG carrier newbuildings, Teekay LNG assumed BG’s obligation to provide the shipbuilding supervision and crew training services for the four LNG carrier newbuildings up to their delivery date pursuant to a ship construction support agreement. Teekay, on behalf of Teekay LNG, will provide the shipbuilding supervision and crew training services for the four LNG carrier newbuildings up to their delivery dates. Teekay LNG estimates it will incur approximately $38.7 million of costs to provide these services, of which BG has agreed to pay a fixed amount of $20.3 million. Upon acquisition, Teekay LNG estimated that the fair value of the service obligation was $33.3 million and the fair value of the amount due from BG was $16.5 million. As at December 31, 2014, the carrying value of the service obligation of $33.7 million is included in both the current portion of in-process contracts and in-process contracts and the carrying value of the receivable from BG of $17.1 million is included in other assets in the Company’s consolidated balance sheet. Through this transaction, Teekay LNG has a 30% ownership interest in two LNG carrier newbuildings and a 20% ownership interest in the remaining two LNG carrier newbuildings (collectively, the BG Joint Venture). The excess of Teekay LNG’s investment in the BG Joint Venture over Teekay LNG’s share of the underlying carrying value of net assets acquired was approximately $16.8 million, in accordance with the preliminary purchase price allocation. This basis difference has been allocated notionally to the ship construction support agreements and the time-charter contracts. Teekay LNG accounts for its investment in the BG Joint Venture using the equity method.

d) Teekay Offshore Acquisition of ALP Maritime Services B.V.

In March 2014, Teekay Offshore acquired 100% of the shares of ALP Maritime Services B.V. (or ALP), a Netherlands-based provider of long-distance ocean towage and offshore installation services to the global offshore oil and gas industry. Concurrently with this transaction, Teekay Offshore and ALP entered into an agreement with Niigata Shipbuilding & Repair of Japan for the construction of four SX-157 Ulstein Design ultra-long-distance towing and offshore installation vessel newbuildings. These vessels will be equipped with dynamic positioning capability and are scheduled for delivery in 2016. Teekay Offshore is committed to acquire these newbuildings for a total cost of approximately $258 million.

Teekay Offshore acquired ALP for a purchase price of $2.6 million, which was paid in cash, and also entered into an arrangement to pay additional compensation to three former shareholders of ALP if certain requirements are satisfied. This contingent compensation consists of $2.4 million, which is payable upon the delivery and employment of ALP’s four newbuildings, which are scheduled throughout 2016, and a further amount of up to $2.6 million, which is payable if ALP’s annual operating results from 2017 to 2021 meet certain targets. Teekay Offshore has the option to pay up to 50% of this compensation through the issuance of common units of Teekay Offshore. Each of the contingent compensation amounts are payable only if the three former shareholders are employed by ALP at the time the performance conditions are met. For the year ended December 31, 2014, compensation costs were $0.5 million and were recorded in general and administrative expenses in the Company’s consolidated statements of income (loss). Teekay Offshore also incurred a $1.0 million fee to a third party associated with the acquisition of ALP, which has been recognized in general and administrative expenses during 2014.

The acquisition of ALP and the related newbuilding orders represents Teekay Offshore’s entrance into the long-distance ocean towage and offshore installation services business. This acquisition allows Teekay Offshore to combine its infrastructure and access to capital with ALP’s experienced management team to further grow this niche business, which is in an adjacent sector to Teekay Offshore’s FPSO and shuttle tanker businesses. The acquisition of ALP was accounted for using the purchase method of accounting, based upon finalized estimates of fair value.

The following table summarizes the finalized estimates of fair values of the ALP assets acquired and liabilities assumed by Teekay Offshore on the acquisition date.

(in thousands of U.S. dollars)	As at March 14, 2014 $
ASSETS
Cash and cash equivalents		294
Other current assets		404
Advances on newbuilding contracts		164
Other assets - long-term		395
Goodwill		2,032
Total assets acquired		3,289
LIABILITIES
Current liabilities		387
Other long-term liabilities		286
Total liabilities assumed		673
Net assets acquired		2,616
Consideration		2,616

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 goodwill recognized in connection with the ALP acquisition is attributable primarily to the assembled workforce of ALP, including their experience, skills and abilities. Operating results of ALP are reflected in the Company’s consolidated financial statements commencing March 14, 2014, the effective date of the acquisition. For the year ended December 31, 2014, the Company recognized $0.5 million of revenue and $2.3 million of net loss resulting from this acquisition. On a pro forma basis for the Company for the years ended December 31, 2014 and 2013, there would be no material changes to revenues and net income giving effect to Teekay Offshore’s acquisition of ALP as if it had taken place on January 1, 2013.

e) Tanker Investments Ltd.

In January 2014, Teekay and its publicly-listed subsidiary Teekay Tankers formed Tanker Investments Ltd. (or TIL), which seeks to opportunistically acquire, operate and sell modern second-hand tankers to benefit from an expected recovery in the then cyclical low of the tanker market. In January 2014, Teekay and Teekay Tankers in the aggregate purchased 5.0 million shares of common stock, representing an initial 20% interest in TIL, as part of a $250 million private placement by TIL, which represented a total investment by Teekay and Teekay Tankers of $50.0 million. In addition, Teekay and Teekay Tankers received stock purchase warrants entitling them to purchase in the aggregate up to 1.5 million shares of common stock of TIL (see Note 15). The stock purchase warrants, which had an aggregate value of $6.8 million on issuance, were received in exchange for the Company’s involvement in the formation of TIL and such amount is reflected in other income (expenses) in the Company’s consolidated statements of (loss) income. Teekay also received one Series A-1 preferred share and Teekay Tankers received one Series A-2 preferred share, each of which entitles the holder to elect one board member of TIL. The preferred shares do not give the holder a right to any dividends or distributions of TIL. Teekay and Teekay Tankers account for their investments in TIL using the equity method. In January 2014, TIL entered into a long-term management agreement with an affiliate of Teekay, pursuant to which the manager provides to TIL commercial, technical, administrative and corporate services and personnel, including TIL’s executive officers, in exchange for management services fees and reimbursement of expenses.

In March 2014, TIL issued additional common shares and listed its common shares on the Oslo Stock Exchange. The issuance of shares by an equity-accounted investee is accounted by the Company as if the Company had sold a proportionate share of its investment, and the resulting gain or loss is recognized in equity income in the Company’s consolidated statements of income (loss). For the year ended December 31, 2014, the Company recognized a gain from this investment of $4.1 million. The combined interests of Teekay Tankers and Teekay in TIL of the then outstanding share capital of TIL was 13.0%.

In October 2014, Teekay Tankers acquired an additional 0.9 million common shares in TIL, representing 2.43% of the then outstanding share capital of TIL. The common shares were acquired at a price of Norwegian Kroner (or NOK) 69 per share, for an aggregate price of $10.1 million. Following completion of the purchase, Teekay Tankers held 3.4 million common shares in TIL, representing 8.94% of the then outstanding share capital of TIL, and brought the combined interests of Teekay and Teekay Tankers in TIL to 15.43%. In October 2014, TIL authorized a share buyback program for up to $30 million and has repurchased $15.1 million to-date at an average price of NOK 68.49 per share, which resulted in the combined ownership interests of Teekay and Teekay Tankers in TIL to be 16.05% as at December 31, 2014.

As of December 31, 2014, TIL had completed the acquisition of two 2010-built Very Large Crude Carrier (or VLCC) vessels from Teekay Tankers, four 2009-built Suezmax tankers from Teekay and six 2009, 2010 and 2011-built Aframax tankers and two 2012-built coated Aframax vessels from third parties. TIL acquired the VLCCs and other tankers from Teekay Tankers and Teekay for an aggregate purchase price of $317.2 million. As of December 31, 2014, TIL has signed an agreement to acquire four 2009-built and two 2010-built Suezmax tankers from a third party, which are expected to deliver in the first half of 2015, bringing the total number of vessels to be owned by TIL to 20. Teekay is a guarantor of TIL’s obligations under a term loan related to the four 2009-built Suezmax tankers that TIL acquired from Teekay. TIL has agreed to pay to Teekay an annual guarantee fee of 0.25% of the outstanding balance under the term loan as consideration for Teekay’s continuing guarantee. TIL has also agreed to indemnify Teekay for any losses Teekay suffers from claims made against it pursuant to the guarantee.

f) FPSO Units and Investment in Sevan Marine ASA

On November 30, 2011, the Company acquired from 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, 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 by Teekay Offshore of common units and existing liquidity.

On November 30, 2011, Teekay entered into an agreement to acquire an FPSO unit, the Sevan Voyageur (or Voyageur Spirit), and its existing customer contract from Sevan. Teekay agreed to acquire the Voyageur Spirit once the upgrade project that was underway at the time was completed and the Voyageur Spirit had commenced operations under its customer contract. In September 2012, the Voyageur Spirit completed its upgrade at the Nymo shipyard and arrived at the Huntington Field in the U.K. sector of the North Sea in October 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)

Under the terms of the acquisition agreement, Teekay prepaid Sevan $94 million to acquire the Voyageur Spirit, assumed the Voyageur Spirit’s existing $230.0 million credit facility, which had an outstanding balance of $220.5 million on November 30, 2011, and was responsible for all upgrade costs incurred after November 30, 2011, which were estimated to be between $140 million and $150 million. Teekay had control over the upgrade project and had guaranteed the repayment of the existing credit facility.

On April 13, 2013, the Voyageur Spirit FPSO unit began production on the Huntington Field and commenced its five-year charter with E.ON Ruhrgas UK E&P Limited (or E.ON). On May 2, 2013, Teekay completed the acquisition of the Voyageur Spirit FPSO unit. The excess of the price paid over the carrying value of the non-controlling interest acquired was $35.4 million and has been accounted for as a reduction to equity. Immediately thereafter, the FPSO unit was sold by Teekay to Teekay Offshore for an initial purchase price of $540.0 million. The Voyageur Spirit FPSO unit has been consolidated by the Company since November 30, 2011, as the Voyageur Spirit FPSO unit was a variable interest entity (or VIE) and the Company was the primary beneficiary from November 30, 2011 until its purchase in May 2013.

Upon commencing production on April 13, 2013, the Voyageur Spirit FPSO unit had a specified time period to receive final acceptance from the charterer, E.ON, at which point the unit would commence full operations under the contract with E.ON. However, due to a defect encountered in one of its two gas compressors, the FPSO unit was unable to achieve final acceptance within the allowable timeframe, resulting in the FPSO unit being declared off-hire by the charterer retroactive to April 13, 2013.

On September 30, 2013, Teekay Offshore entered into an interim agreement with E.ON whereby Teekay Offshore was compensated for production beginning August 27, 2013 until the receipt of final acceptance by E.ON. Until declared on hire, Teekay had agreed to indemnify Teekay Offshore for certain production shortfalls and unreimbursed vessel operating expenses. For the period from April 13, 2013 to December 31, 2013, Teekay had indemnified Teekay Offshore a total of $34.9 million for production shortfalls and unreimbursed repair costs. For 2014, Teekay indemnified Teekay Offshore $3.5 million for production shortfalls and unrecovered repair costs to address the compressor issues and paid a further $2.7 million in late-2014 relating to a final settlement of pre-acquisition capital expenditures for the Voyageur Spirit FPSO unit. In April 2014, Teekay Offshore received the certificate of final acceptance from the charterer, which declared the unit on-hire retroactive to February 22, 2014.

Amounts paid as indemnification from Teekay to Teekay Offshore were effectively treated as a reduction in the purchase price. The original purchase price of $540.0 million of the Voyageur Spirit FPSO unit has effectively been reduced to $503.1 million ($273.1 million net of assumed debt of $230.0 million) to reflect total indemnification payments from Teekay of $41.1 million relating to the period from the date of first oil on April 13, 2013 to when the unit was declared on-hire on February 22, 2014, partially offset by the excess value of $4.3 million relating to the 1.4 million common units issued by Teekay Offshore to Teekay on the closing date of the transaction in May 2013 compared to the date Teekay offered to sell the unit to Teekay Offshore.

g) Teekay LNG – Exmar LPG BVBA Joint Venture

In February 2013, Teekay LNG entered into a 50/50 joint venture agreement with Belgium-based Exmar NV (or Exmar) to own and in-charter 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, as of December 31, 2014, included 20 owned LPG carriers (including nine newbuilding carriers scheduled for delivery between 2015 and 2018) and four in-chartered LPG carriers. 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 $133.1 million in exchange for equity and a shareholder loan and assumed approximately $108 million of its pro rata share of existing debt and lease obligations as of the economic effective date. These debt and lease obligations are secured by certain vessels in the Exmar LPG BVBA fleet. The excess of the book value of net assets acquired over Teekay LNG’s investment in the Exmar LPG BVBA, which amounted to approximately $6.0 million, has been accounted for as an adjustment to the value of the vessels, charter agreements and lease obligations of Exmar LPG BVBA and recognition of goodwill, in accordance with the finalized purchase price allocation. Control of Exmar LPG BVBA is shared equally between Exmar and Teekay LNG. Teekay LNG accounts for its investment in Exmar LPG BVBA using the equity method.

h) Teekay LNG – Marubeni Joint Venture

In February 2012, a joint venture between Teekay LNG and Marubeni Corporation (or the Teekay LNG-Marubeni Joint Venture) acquired a 100% interest in six LNG carriers (or the MALT 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 the 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. From June to July 2013, the Teekay LNG Marubeni Joint Venture completed the refinancing of its short-term loan facilities by entering into separate long-term debt facilities totaling approximately $963 million. These debt facilities mature between 2017 and 2030. Teekay LNG has guaranteed its 52% share of the secured loan facilities of the Teekay LNG-Marubeni Joint Venture and, as a result, recorded a guarantee liability of $0.7 million. The carrying value of the guarantee liability as at December 31, 2014 was $0.4 million (December 31, 2013 - $0.6 million) and is included as part of other long-term liabilities in the Company’s consolidated balance sheets.

In July 2013, the Teekay LNG-Marubeni Joint Venture entered into an eight-year interest rate swap with a notional amount of $160.0 million, which amortizes quarterly over the term of the interest rate swap to $70.4 million at maturity. The interest rate swap exchanges the receipt of LIBOR-based interest for the payment of a fixed rate of interest of 2.20% in the first two years and 2.36% in the last six years. This interest rate swap has been designated as a qualifying cash flow hedging instrument for accounting purposes. The Teekay LNG-Marubeni Joint Venture uses the same accounting policy for qualifying cash flow hedging instruments as does Teekay LNG.

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)

4. Investment in Term Loans

In February 2011, Teekay made a $70 million term loan (or the TKC Loan) to a ship-owner of a 2011-built VLCC, based in Asia. The TKC Loan’s interest rate was 9% per annum, which was payable quarterly. The TKC Loan was repayable in full in February 2014. The TKC Loan was collateralized by a first-priority mortgage on the VLCC, together with other related collateral.

In July 2010, Teekay Tankers acquired two term loans, whose borrowers had the same ultimate parent company as the borrower under the TKC Loan, with a total principal amount outstanding of $115.0 million for a total cost of $115.6 million (or the TNK Loans). The TNK Loans had an annual interest rate of 9% per annum, and included a repayment premium feature which provided a total investment yield of approximately 10% per annum. The TNK Loans matured in July 2013. The TNK Loans were collateralized by first-priority mortgages on two 2010-built VLCCs, together with other related security. The principal amount of the TNK Loans and repayment premium were payable in full at maturity in July 2013. The TKC Loan and TNK Loans are collectively referred to as the Loans.

The borrowers of the Loans had been in default on their interest payment obligations since the first quarter of 2013, and of their loan principal and repayment premium obligations on the TNK Loans from their maturity date in July 2013. As of December 31, 2013, the VLCC vessels that collateralize the Loans were trading in the spot tanker market under the Company’s management.

As at December 31, 2013, the balance of the repayment premium included in the investment in term loans was $3.4 million. As at December 31, 2013, accrued and unpaid interest on the Loans, including a portion of default interest, was $10.7 million. Such amounts are presented in investment in term loans on the consolidated balance sheets as at December 31, 2013. Interest income in respect of the Loans is included in revenues in the consolidated statements of income (loss). As of December 31, 2013, $11.2 million of interest income due under the Loans, including default interest, had not been recognized based on the Company‘s estimates at that time of amounts recoverable from future operating cash flows of the vessels and the net proceeds from the sale of the three VLCCs.

In March 2014, the Company exercised its rights under security documentation to realize the amounts owed under its investment in term loans and assumed full ownership of the three VLCC vessels, which previously secured the investment in term loans. At the time of assumption of ownership, these vessels had an aggregate fair value of approximately $222 million, which exceeded the carrying value of the Loans. As a result of the exercise of remedies and the increase in VLCC vessel values during early 2014, in the first quarter of 2014, the Company recognized $15.2 million of interest income, of which $11.2 million related to prior periods and was previously unrecognized, owing under the Loans. In May 2014, Teekay Tankers sold two single-ship wholly-owned subsidiaries, each of which owned one VLCC, to TIL for aggregate proceeds of $154 million, plus related working capital on closing. Teekay Tankers recognized a $10 million gain on the sale of the VLCCs in 2014.

5. Financing Transactions

During the years ended December 31, 2014, 2013, and 2012, 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 $(1)			Offering Expenses $			Net Proceeds Received $
2014
Teekay Offshore Continuous Offering Program		7,784		(156	)		(153	)		7,475
Teekay Offshore Direct Equity Placement		178,569		(3,571	)		(75	)		174,923
Teekay LNG Public Offering		140,784		(2,816	)		(299	)		137,669
Teekay LNG Continuous Offering Program		42,556		(851	)		(901	)		40,804
Teekay Tankers Public Offering		116,000		(20,000	)		(4,810	)		91,190
2013
Teekay Offshore Direct Equity Placements		115,688		(2,314	)		(188	)		113,186
Teekay Offshore Preferred Units Offering		150,000		—			(5,200	)		144,800
Teekay Offshore Continuous Offering Program		2,819		(59	)		(449	)		2,311
Teekay LNG Continuous Offering Program		5,383		(107	)		(457	)		4,819
Teekay LNG Direct Equity Placement		40,816		(816	)		(40	)		39,960
Teekay LNG Public Offering		150,040		(3,001	)		(5,222	)		141,817
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

(1) Consists of the portion Teekay subscribed for in the public offering or equity placement.

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)

In April 2013, the Voyageur Spirit FPSO unit began production and on May 2, 2013, Teekay completed the acquisition of the Voyageur Spirit FPSO unit and, immediately thereafter, Teekay Offshore acquired the unit from Teekay for an original purchase price of $540.0 million (see Note 3(f)). Teekay Offshore financed the acquisition with the assumption of the $230.0 million debt facility secured by the unit, $253.0 million in cash and a $44.3 million equity private placement of common units to Teekay (including the general partner’s 2% proportionate capital contribution), which had a value of $40.0 million at the time Teekay offered to sell the FPSO unit to Teekay Offshore. Upon completion of the private placement to Teekay, Teekay Offshore had 83.6 million common units outstanding.

In August 2014, Teekay Tankers purchased from Teekay a 50% interest in Teekay Tanker Operations Ltd. (TTOL), which owns conventional tanker commercial management and technical management operations, including the direct ownership in three commercially managed tanker pools, for an aggregate price of approximately $23.5 million, including net working capital. As consideration for this acquisition, Teekay Tankers issued to Teekay 4.2 million Class B common shares. The 4.2 million Class B common shares had an approximate aggregate value of $15.6 million, or $3.70 per share, when the purchase price was agreed to between the parties and an aggregate value of $17.0 million, or $4.03 per share, on the acquisition closing date. The purchase price, for accounting purposes, is based upon the value of the Class B common shares on the acquisition closing date. In addition, Teekay Tankers reimbursed Teekay for $6.5 million of working capital it assumed from Teekay in connection with the purchase. The book value of the assets acquired, including working capital, was $16.9 million on the date of acquisition. Upon completion of the purchase from Teekay, Teekay Tankers had 87.8 million common shares outstanding.

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 $68.4 million (2014), $36.7 million (2013) and $88.7 million (2012). These amounts represent Teekay’s dilution gains from the issuance of units and shares by these consolidated subsidiaries.

6. Goodwill, Intangible Assets and In-Process Revenue Contracts

Goodwill

The carrying amount of goodwill for the years ended December 31, 2014 and 2013, for the Company’s reportable segments are as follows:

	Shuttle Tanker, FSO and Offshore Support Segment		Liquefied Gas Segment		Total
	$		$		$
Balance as of December 31, 2012 and 2013		130,908		35,631		166,539
Goodwill acquired		2,032		—		2,032
Balance as of December 31, 2014		132,940		35,631		168,571

In March 2014, Teekay Offshore acquired 100% of the shares of ALP, a Netherlands-based provider of long-distance ocean towage and offshore installation services to the global offshore oil and gas industry. The goodwill recognized in connection with the ALP acquisition is attributable primarily to the assembled workforce of ALP, including their experience, skills and abilities (see Note 3d).

Intangible Assets

As at December 31, 2014, the Company’s intangible assets consisted of:

	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
	$		$			$
Customer contracts		316,684		(223,018	)		93,666
Other intangible assets		1,000		—			1,000
		317,684		(223,018	)		94,666

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)

As at December 31, 2013 the Company’s intangible assets consisted of:

	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
	$		$			$
Customer contracts		316,684		(209,786	)		106,898
Other intangible assets		1,280		(280	)		1,000
		317,964		(210,066	)		107,898

Aggregate amortization expense of intangible assets for the year ended December 31, 2014, was $13.2 million (2013 - $18.2 million, 2012 - $17.2 million), which is included in depreciation and amortization. Amortization of intangible assets following 2014 is expected to be $11.9 million (2015), $10.9 million (2016), $9.8 million (2017), $8.9 million (2018), $8.9 million (2019) and $44.3 million (thereafter).

In-Process Revenue Contracts

As part of the Company’s acquisition of FPSO units from Sevan and its previous acquisition of Petrojarl ASA (subsequently renamed Teekay Petrojarl AS, or Teekay Petrojarl), and Teekay LNG’s acquisition of BG’s ownership interests in four LNG carrier newbuildings, the Company assumed certain FPSO contracts, time charter-out contracts with terms that were less favorable than the then prevailing market terms, and a service obligation for shipbuilding supervision and crew training services for the four LNG carrier newbuildings. At the time of the acquisitions, the Company recognized liabilities based on the estimated fair value of these contracts and service obligations. The Company is amortizing these liabilities over the estimated remaining terms of their associated 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, 2014 was $40.9 million (2013 - $61.7 million, 2012 - $72.9 million), which is included in revenues on the consolidated statements of income (loss). Amortization following 2014 is expected to be $22.8 million (2015), $29.6 million (2016), $32.7 million (2017), $22.2 million (2018), $14.9 million (2019) and $51.2 million (thereafter).

7. Accrued Liabilities

	December 31, 2014		December 31, 2013
	$		$
Voyage and vessel expenses		163,155		250,557
Interest		60,064		73,817
Payroll and benefits and other		100,606		91,369
Deferred revenue - current		66,027		49,486
Loan from affiliates		4,907		1,595
		394,759		466,824

8. Long-Term Debt

	December 31, 2014		December 31, 2013
	$		$
Revolving Credit Facilities		1,766,822		1,919,086
Senior Notes (8.5%) due January 15, 2020		390,712		447,430
Norwegian Kroner-denominated Bonds due through January 2019		697,798		691,778
U.S. Dollar-denominated Term Loans due through 2023		3,103,255		2,523,523
U.S. Dollar Bonds due through 2023		492,918		174,150
Euro-denominated Term Loans due through 2023		284,993		340,221
U.S. Dollar-denominated Unsecured Demand Loans due to Joint Venture Partners		—		13,282
Total		6,736,498		6,109,470
Less current portion		654,134		996,425
Long-term portion		6,082,364		5,113,045

As of December 31, 2014, the Company had 13 revolving credit facilities (or the Revolvers) available, which, as at such date, provided for aggregate borrowings of up to $2.4 billion, of which $0.6 billion was undrawn. Interest payments are based on LIBOR plus margins; at December 31, 2014 and December 31, 2013, the margins ranged between 0.45% and 3.95% and 0.45% and 4.5%, respectively. At December 31, 2014 and December 31, 2013, the three-month LIBOR was 0.26% and 0.25%, respectively. The total amount available under the Revolvers reduces by $382.2 million (2015), $506.2 million (2016), $529.7 million (2017), $895.2 million (2018) and $49.5 million (2019). The Revolvers are collateralized by first-priority mortgages granted on 51 of the Company’s vessels, together with other related security, and include a guarantee from Teekay or its subsidiaries for all outstanding amounts. Included in other security are 23.8 million common units in Teekay Offshore and 25.2 million common units in Teekay LNG which secure a $500 million credit facility. The maximum amount available under the facility is dependent on the market value of the units in Teekay Offshore and Teekay LNG. At December 31, 2014, the maximum available amount was $473.5 million.

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)

The Company’s 8.5% senior unsecured notes (or the 8.5% Notes) are due January 15, 2020 with an original 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. During 2014, the Company repurchased the principal amount of $57.3 million of the 8.5% Notes at a premium of $7.7 million and such amount is reflected in other income in the Company’s consolidated statements of income (loss).

Teekay Offshore, Teekay LNG and Teekay have issued in the Norwegian bond market a total of NOK 4.2 billion of senior unsecured bonds that mature between October 2015 and September 2018. As at December 31, 2014, the total carrying amount of the bonds was $563.6 million. The bonds are listed on the Oslo Stock Exchange. The interest payments on the bonds are based on NIBOR plus a margin, which ranges from 4.00% to 5.75%. The Company entered into cross currency rate swaps to swap all interest and principal payments of the bonds into U.S. Dollars, with the interest payments fixed at rates ranging from 4.80% to 7.49%, and the transfer of principal fixed at $732.4 million upon maturity in exchange for NOK 4.2 billion (see Note 15).

In January 2014, Teekay Offshore issued NOK 1,000 million in senior unsecured bonds that mature in January 2019 in the Norwegian bond market. As of December 31, 2014, the carrying amount of the bonds was $134.2 million. The bonds were listed on the Oslo Stock Exchange in June 2014. The interest payments on the bonds are based on NIBOR plus a margin of 4.25%. Teekay Offshore entered into a cross currency swap to swap all interest and principal payments into U.S. Dollars, with the interest payments fixed at a rate of 6.28%, and the transfer of the principal amount fixed at $162.2 million upon maturity in exchange for NOK 1,000 million (see Note 15).

As of December 31, 2014, the Company had 18 U.S. Dollar-denominated term loans outstanding, which totaled $3.1 billion in aggregate principal amount (December 31, 2013 – $2.5 billion). Certain of the term loans with a total outstanding principal balance of $37.8 million as at December 31, 2014 (December 31, 2013 – $176.3 million) bear interest at a weighted-average fixed rate of 4.8% (December 31, 2013 – 5.2%). Interest payments on the remaining term loans are based on LIBOR plus a margin. At December 31, 2014 and December 31, 2013, the margins ranged between 0.3% and 3.25%. At December 31, 2014 and December 31, 2013, the three-month LIBOR was 0.26% and 0.25%, 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 34 (December 31, 2013 – 35) of the Company’s vessels, together with certain other security. In addition, at December 31, 2014, all but $79.3 million (December 31, 2013 – $94.4 million) of the outstanding term loans were guaranteed by Teekay or its subsidiaries.

During May 2014, Teekay Offshore issued $300 million in five-year senior unsecured bonds that mature in July 2019 in the U.S. bond market. As of December 31, 2014, the carrying amount of the bonds was $300.0 million. The bonds were listed on the New York Stock Exchange in June 2014. The interest payments on the bonds are fixed at a rate of 6.0%.

In September 2013 and November 2013, Teekay Offshore issued $174.2 million of ten-year senior unsecured bonds that mature in December 2023 and that were issued in a U.S. private placement to finance the Bossa Nova Spirit and the Sertanejo Spirit shuttle tankers. The bonds accrue interest at a fixed combined rate of 4.96%. The bonds are collateralized by first-priority mortgages on the two vessels to which the bonds relate, together with other related security. During the year, Teekay Offshore made semi-annual repayments on the bonds and as of December 31, 2014, the carrying amount of the bonds was $166.1 million.

In August 2014, Teekay Offshore assumed Logitel’s obligations under a bond agreement from Sevan as part of the acquisition (see note 3a). The bonds are redeemable at par at any time by Logitel. As of December 31, 2014, the carrying amount of the bond was $26.8 million.

The Company has two Euro-denominated term loans outstanding, which, as at December 31, 2014, totaled 235.6 million Euros ($285.0 million) (December 31, 2013 – 247.6 million Euros ($340.2 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, 2014 and December 31, 2013, the margins ranged between 0.6% and 2.25% and the one-month EURIBOR at December 31, 2014 was 0.02% (December 31, 2013 – 0.2%). The Euro-denominated term loans reduce in monthly payments with varying maturities through 2023, 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 NOK-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 NOK-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 gains of $13.4 million (2013 – $13.3 million loss, 2012 – $12.9 million loss).

The Teekay Nakilat Joint Venture had a U.S. Dollar-denominated demand loan of $13.3 million as at December 31, 2013 owing to Qatar Gas Transport Company Ltd. (or Nakilat), which was repaid by the Teekay Nakilat Joint Venture during 2014.

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)

The weighted-average effective interest rate on the Company’s aggregate long-term debt as at December 31, 2014 was 3.2% (December 31, 2013 – 3.0%). This rate does not include the effect of the Company’s interest rate swap agreements (see Note 15).

Among other matters, the Company’s long-term debt agreements generally provide for maintenance of minimum consolidated financial covenants and six loan agreements require the maintenance of vessel market value to loan ratios. As at December 31, 2014, these ratios ranged from 137.4% to 675.6% compared to their minimum required ratios of 105% to 130%. The vessel values used in these ratios are the appraised values prepared by the Company based on second hand sale and purchase market data. Changes in the conventional tanker market, FPSO 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, 2014 and December 31, 2013, 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, 2014, this aggregate amount was $368.1 million (December 31, 2013- $344.9 million). As at December 31, 2014, the Company was in compliance with all covenants required by its credit facilities and other long-term debt.

The aggregate annual long-term debt principal repayments required to be made by the Company subsequent to December 31, 2014, are $654.1 million (2015), $797.1 million (2016), $1.1 billion (2017), $1.6 billion (2018), $744.6 million (2019) and $1.8 billion (thereafter).

9. Operating and Direct Financing Leases

Charters-in

As at December 31, 2014, minimum commitments to be incurred by the Company under vessel operating leases by which the Company charters-in vessels were approximately $119.9 million, comprised of $76.5 million (2015), $29.1 million (2016), $13.9 million (2017) and $0.4 million (2018). 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, 2014, minimum scheduled future revenues to be received by the Company on time-charters and bareboat charters then in place were approximately $10.2 billion, comprised of $1.4 billion (2015), $1.3 billion (2016), $1.3 billion (2017), $1.2 billion (2018), $1.1 billion (2019) and $4.0 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, 2014, revenue from unexercised option periods of contracts that existed on December 31, 2014 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, 2014, was $6.8 billion (2013 - $6.4 billion). The cost and accumulated depreciation of the vessels employed on operating leases as at December 31, 2014 were $8.9 billion (2013 - $8.2 billion) and $2.1 billion (2013 - $1.8 billion), respectively.

Operating Lease Obligations

Teekay Tangguh Joint Venture

As at December 31, 2014, the Teekay Tangguh Joint Venture was a party to operating leases (or Head Leases) whereby it is leasing its two LNG carriers (or the Tangguh LNG Carriers) to a third party company. The Teekay Tangguh Joint Venture is then leasing back the LNG carriers from the same third party company (or the 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 Joint Venture. 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 Joint Venture’s carrying amounts of this tax indemnification guarantee as at December 31, 2014 and December 31, 2013 were $8.4 million and $8.9 million, respectively, and are 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 Joint Venture may terminate the lease arrangements on a voluntary basis at any time. If the lease arrangements terminate, the Teekay Tangguh Joint Venture will be required to make termination payments 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.

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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, 2014, 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)
2015		22,188		24,113
2016		21,242		24,113
2017		21,242		24,113
2018		21,242		24,113
2019		21,242		24,113
Thereafter		196,579		223,185
Total	$	303,735	$	343,750

(1) The Head Leases are fixed-rate operating leases while the Subleases have a small variable-rate component. As at December 31, 2014, the Teekay Tangguh Subsidiary had received $206.6 million of aggregate Head Lease receipts and had paid $139.6 million of aggregate Sublease payments. The portion of the Head Lease receipts that have not been recognized into earnings, is deferred and amortized on a straight line basis over the lease terms. As at December 31, 2014, $2.8 million and $44.1 million of Head Lease receipts had been deferred and included in accrued liabilities and other long-term liabilities, respectively, 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 VOC equipment are accounted for as direct financing leases. In addition, in September and November 2013, Teekay LNG acquired two 155,900-cubic meter LNG carriers (or Awilco LNG Carriers) from Norway-based Awilco LNG ASA (or Awilco) and chartered them back to Awilco on a five- and four-year fixed-rate bareboat charter contract (plus a one year extension option), respectively, with Awilco holding a fixed-price purchase obligation at the end of the charter. The bareboat charters with Awilco are accounted for as direct financing leases. The purchase price of each vessel was $205 million less a $51.0 million upfront prepayment of charter hire by Awilco (inclusive of a $1.0 million upfront fee), which is in addition to the daily bareboat charter rate. The following table lists the components of the net investments in direct financing leases:

	December 31,			December 31,
	2014			2013
	$			$
Total minimum lease payments to be received		936,164			1,024,187
Estimated unguaranteed residual value of leased properties		203,465			203,465
Initial direct costs and other		461			1,379
Less unearned revenue		(435,137	)		(501,769	)
Total		704,953			727,262
Less current portion		20,823			21,545
Long-term portion		684,130			705,717

As at December 31, 2014, minimum lease payments to be received by the Company in each of the next five years following 2014 were $80.5 million (2015), $83.9 million (2016), $207.9 million (2017), $173.7 million (2018), and $39.1 million (2019). The VOC equipment leases expired in 2014, the FSO contract is scheduled to expire in 2017, the LNG time-charters are both scheduled to expire in 2029 and the two LNG carriers under the Awilco LNG carrier leases expire in 2017 and 2018.

10. Capital Lease Obligations and Restricted Cash

Capital Lease Obligations

	December 31,		December 31,
	2014		2013
	$		$
RasGas II LNG Carriers		—		472,806
Suezmax Tankers		63,550		125,523
Total		63,550		598,329
Less current portion		4,422		31,668
Long-term portion		59,128		566,661

RasGas II LNG Carriers. As at December 31, 2014 and 2013, Teekay LNG owned a 70% interest in Teekay Nakilat Corporation (or Teekay Nakilat Joint Venture). All amounts below and in the table above relating to the Teekay Nakilat Joint Venture’s three LNG carriers (or the RasGas II LNG Carriers), which were under capital leases until the termination of the leasing of the vessels on December 22, 2014, include Teekay LNG’s joint venture partner’s 30% interest in the Teekay Nakilat Joint Venture.

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)

Pursuant to the termination of the leasing of the RasGas II LNG Carriers, the Teekay Nakilat Joint Venture, through its wholly-owned subsidiaries, acquired the RasGas II LNG Carriers from the lessor. In settling the outstanding lease obligations and acquiring the vessels, the Teekay Nakilat Joint Venture capitalized a negotiated early lease termination fee of $23.1 million, which was required under the lease agreement and was paid to the lessor in excess of the outstanding lease obligation of $473.4 million. Concurrently with the lease termination, the Teekay Nakilat Joint Venture refinanced its debt facility (see note 8).

Under the terms of the capital lease arrangements with respect to the RasGas II LNG Carriers, the lessor claimed tax depreciation on these vessels. As is typical in these leasing arrangements, tax and change of law risks were assumed by the Teekay Nakilat Joint Venture, as lessee. Lease payments under the lease arrangements were based on certain tax and financial assumptions at the commencement of the leases. If an assumption proved to be incorrect, the lessor was entitled to increase or decrease the lease payments to maintain its agreed after-tax margin. Even though the Teekay Nakilat Joint Venture has terminated the leasing of the RasGas II LNG Carriers and acquired the leased vessels from the lessor, it remains obligated to the lessor to maintain the lessor’s agreed after-tax margin from the commencement of the lease to the lease termination date. The Company’s carrying amount of the tax indemnification guarantee as at December 31, 2014 and 2013 was $14.4 million and $15.0 million, respectively, and is included as part of other long-term liabilities in the Company’s consolidated balance sheets.

Suezmax Tankers. During 2014 Teekay LNG was a party to capital leases on four Suezmax tankers. Under these capital leases, the owner has the option to require Teekay LNG to purchase the four vessels. The charterer, who is also the owner, also has the option to cancel the charter contracts. Teekay LNG received notification of termination from the owner and the owner sold the Algeciras Spirit on February 28, 2014 and sold the Huelva Spirit on August 15, 2014. For the remaining two Suezmax tankers, the cancellation options are first exercisable in October 2017 and July 2018, respectively. Upon sales of the vessels, Teekay LNG was not required to pay the balance of the capital lease obligations, as the vessels under capital leases were returned to the owner and the capital lease obligations were concurrently extinguished.

The amounts in the table below assume the owner will not exercise its options to require Teekay LNG to purchase either of the two remaining vessels, but rather it assumes the owner will cancel the charter contracts when the cancellation right is first exercisable and sell the vessels to a third party, upon which the lease obligation will be extinguished. At the inception of these leases, the weighted-average interest rate implicit in these leases was 5.5%. 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 Teekay LNG.

As at December 31, 2014, the remaining commitments under the two capital leases, including the purchase obligations for the two Suezmax tankers, approximated $73.7 million, including imputed interest of $10.2 million, repayable from 2015 through 2018, as indicated below:

Year	Commitment
2015	$	7,790
2016	$	7,673
2017	$	30,953
2018	$	27,296

The Company’s capital leases do not contain financial or restrictive covenants other than those relating to operation and maintenance of the vessels.

Restricted Cash

Under the terms of the capital leases for the RasGas II LNG Carriers that were terminated on December 22, 2014, the Teekay Nakilat Joint Venture was required to have on deposit with financial institutions an amount of cash that, together with interest earned on the deposits, would equal the remaining amounts owing under the leases. These cash deposits were restricted to being used for capital lease payments and were fully funded primarily with term loans. These deposits were released as part of the lease termination; however, the Teekay Nakilat Joint Venture was required to place $6.8 million on deposit to the lessor as security against any future claims as the Teekay Nakilat Joint Venture still has an obligation to the lessor to maintain the lessor’s agreed after-tax margin from the commencement of the lease to the lease termination date. As at December 31, 2014 and 2013, the amount of restricted cash on deposit for the three RasGas II LNG Carriers was $6.8 million and $475.6 million, respectively. As at December 31, 2014 and 2013, the weighted-average interest rates earned on the deposits were 0.6% and 0.3%, respectively. These rates do not reflect the effect of related interest rate swaps that the Company has used to economically hedge its floating-rate restricted cash deposits relating to the RasGas II LNG Carriers.

The Company also maintains restricted cash deposits relating to certain term loans, collateral for derivatives and other obligations, which totaled $107.8 million and $27.1 million as at December 31, 2014 and 2013, 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.

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TEEKAY CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in thousands of U.S. dollars, other than share data)

Vessels and equipment and assets held for sale – The estimated fair value of the Company’s vessels and equipment and vessels held for sale was 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. Other assets held for sale include working capital balances and the fair value of such amounts generally approximate their carrying value.

Investment in term loans – The fair value of the Company’s investment in term loans was 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 was 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 receivable included in other assets – The fair values of the Company’s long-term loan receivable is estimated using discounted cash flow analysis based on rates currently available for debt with similar terms and remaining maturities and the current credit worthiness of the counterparty.

Long-term debt and liabilities associated with assets held for sale – 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. Alternatively, if the fixed-rate and variable-rate long-term debt is held for sale the fair value is based on the estimated sales price. Other liabilities held for sale include working capital balances and the fair value of such amounts generally approximate their carrying value.

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. 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.

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)

				December 31, 2014						December 31, 2013
	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			927,679			927,679			1,119,966			1,119,966
Derivative instruments (note 15)
Interest rate swap agreements - assets (1)		Level 2			1,051			1,051			91,415			91,415
Interest rate swap agreements - liabilities (1)		Level 2			(406,783	)		(406,783	)		(410,470	)		(410,470	)
Cross currency interest swap agreement		Level 2			(221,391	)		(221,391	)		(52,219	)		(52,219	)
Foreign currency contracts		Level 2			(18,407	)		(18,407	)		(1,480	)		(1,480	)
Stock purchase warrants (note 3e and 15)		Level 3			9,314			9,314			—			—
Logitel contingent consideration (see below)		Level 3			(21,448	)		(21,448	)		—			—
Non-recurring
Vessels and equipment (note 18b)		Level 2			—			—			17,250			17,250
Assets held for sale (2) (note 18b)		Level 2			—			—			176,247			176,247
Other
Investment in term loans		Level 3			—			—			211,579			209,570
Loans to equity-accounted investees
and joint venture partners - Current		(3	)		26,209			(3	)		37,019			(3	)
Loans to equity-accounted investees and joint venture partners - Long-term		(3	)		227,217			(3	)		132,229			(3	)
Liabilities associated with assets held for sale (2) (note 18b)		Level 2			—			—			(168,007	)		(168,007	)
Long-term receivable included in other assets		Level 2			15,758			15,758			—			—
Long-term debt - public (note 8)		Level 1			(1,554,609	)		(1,574,440	)		(1,313,358	)		(1,376,829	)
Long-term debt - non-public (note 8)		Level 2			(5,181,889	)		(5,094,857	)		(4,796,112	)		(4,582,274	)

(1) The fair value of the Company’s interest rate swap agreements at December 31, 2014 includes $24.5 million (December 31, 2013- $22.0 million) of net accrued interest which is recorded in accrued liabilities and accounts receivable on the consolidated balance sheets.

(2) The fair value of the Company’s assets held for sale and liabilities associated with assets held for sale include vessels held for sale, long-term debt and other working capital balances.

(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

Changes in fair value during the year ended December 31, 2014 for one of the Company’s derivative instruments, the TIL stock purchase warrants, which are described below and are measured at fair value on the recurring basis using significant unobservable inputs (Level 3), are as follows:

	Year Ended December 31,
	2014
	$
Fair value at the beginning of the year		—
Fair value on issuance		6,840
Unrealized gain included in earnings		2,474
Fair value at the end of the year		9,314

During January 2014, the Company received stock purchase warrants entitling it to purchase up to 1.5 million shares of the common stock of TIL (see Note 15). The estimated fair value of the stock purchase warrants was determined using a Monte-Carlo simulation and is based, in part, on the historical price of common shares of TIL, the risk-free rate, vesting conditions and the historical volatility of comparable companies. The estimated fair value of these stock purchase warrants as of December 31, 2014 is based on the historical volatility of the comparable companies of 61.5%. A higher or lower volatility would result in a higher or lower fair value of this derivative asset.

Contingent consideration liability – In August 2014, Teekay Offshore acquired 100% of the outstanding shares of Logitel, a Norway-based company focused on the high-end floating accommodation market, from Cefront Technology AS (or Cefront) for $4 million, which was paid in cash at closing, plus a potential additional amount of up to $27.6 million, depending upon certain performance criteria, which is payable from early-2015 to early-2018 (see Note 3a).

Teekay Offshore will owe an additional amount of up to $27.6 million if there are no yard cost overruns and no charterer late delivery penalties; the two unfixed FAUs under construction are chartered above specified rates and no material defects from construction are identified up until one year after the delivery of each FAU. To the extent such events occur, the potential additional amount of $27.6 million will be reduced in accordance with the terms of the purchase agreement. The estimated fair value of the contingent consideration liability of $27.6 million is the amount Teekay Offshore expects to pay to Cefront discounted to its present value using a weighted average cost of capital rate of 10%. As of December 31, 2014, the amount of the expected payments for each FAU was based upon the construction status for each FAU, the state of the charter market for FAUs, the expectation of potential material defects and, to a lesser extent, the timing of delivery of each FAU. An increase (decrease) in Teekay Offshore’s estimates of yard cost overruns, charterer late delivery penalties, material defects and the discount rate, as well as a decrease (increase) in Teekay Offshore’s estimates of day rates at which it expects to charter the two unchartered FAUs, will decrease (increase) the estimated fair value of the contingent consideration liability.

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TEEKAY CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in thousands of U.S. dollars, other than share data)

Changes in the estimated fair value of Teekay Offshore’s contingent consideration liability relating to the acquisition of Logitel, which is measured at fair value on a recurring basis using significant unobservable inputs (Level 3), during the year ended December 31, 2014 is as follows:

	Year Ended December 31,
	2014
	$
Balance at beginning of year		—
Acquisition of Logitel		(21,170	)
Unrealized loss included in other income - net		(278	)
Balance at end of year		(21,448	)

12. Capital Stock

The authorized capital stock of Teekay at December 31, 2014 and 2013, 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 2014, the Company issued 1.8 million common shares upon the exercise of stock options and restricted stock units and awards, and had no share repurchases of common shares. During 2013, the Company issued 1.3 million common shares upon the exercise of stock options and restricted stock units and awards, and had share repurchases of 0.3 million common shares. As at December 31, 2014, Teekay had issued 73,299,702 shares of Common Stock (2013 – 71,528,599) and no shares of Preferred Stock issued. As at December 31, 2014, Teekay had 72,500,502 shares of Common Stock outstanding (2013 – 70,729,399).

Dividends may be declared and paid out of surplus, 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, 2014, Teekay had repurchased approximately 5.2 million shares of Common Stock for $162.3 million pursuant to such authorization. The total remaining share repurchase authorization at December 31, 2014, was $37.7 million. The shares of Common Stock repurchased during 2013 were under a separate authorization.

On July 2, 2010, the Company amended and restated its Shareholder 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 shareholders that owned in excess of 15% of the Company’s common stock when the Rights Agreement was amended. 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

In March 2013, the Company adopted the 2013 Equity Incentive Plan (or the 2013 Plan) and suspended the 1995 Stock Option Plan and the 2003 Equity Incentive Plan (collectively referred to as the Plans). As at December 31, 2014, the Company had reserved 4,009,878 (2013 - 4,133,987) shares of Common Stock pursuant to the 2013 Plan, for issuance upon the exercise of options or equity awards granted or to be granted.

During the years ended December 31, 2014 and 2013, the Company granted options under the 2013 Plan to acquire up to 15,243 and 72,810 shares of Common Stock, respectively, and during the year ended December 31, 2012, the Company granted options under the Plans to acquire up to 432,971 shares of Common Stock, 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, 2014, expire between March 9, 2015 and March 11, 2024, ten years after the date of each respective grant.

A summary of the Company’s stock option activity and related information for the years ended December 31, 2014, 2013, and 2012, are as follows:

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)

	December 31, 2014					December 31, 2013					December 31, 2012
	Options (000’s) #			Weighted- Average Exercise Price $		Options (000’s) #			Weighted- Average Exercise Price $		Options (000’s) #			Weighted- Average Exercise Price $
Outstanding - beginning of year		4,237			36.33		5,285			34.40		5,713			32.47
Granted		15			56.76		73			34.07		433			27.69
Exercised		(1,528	)		36.10		(1,039	)		26.21		(733	)		15.85
Forfeited / expired		(14	)		28.51		(82	)		38.46		(128	)		31.81
Outstanding - end of year		2,710			36.61		4,237			36.33		5,285			34.40
Exercisable - end of year		2,508			37.03		3,848			37.03		4,561			35.54

A summary of the Company’s non-vested stock option activity and related information for the years ended December 31, 2014, 2013 and 2012, are as follows:

	December 31, 2014					December 31, 2013					December 31, 2012
	Options (000’s)			Weighted- Average Grant Date Fair Value		Options (000’s)			Weighted- Average Grant Date Fair Value		Options (000’s)			Weighted- Average Grant Date Fair Value
	#			$		#			$		#			$
Outstanding non-vested stock options - beginning of year		389			9.24		723			8.74		1,057			6.40
Granted		15			11.50		73			10.54		433			8.72
Vested		(188	)		9.30		(401	)		8.57		(747	)		5.44
Forfeited		(14	)		9.01		(6	)		9.46		(20	)		8.24
Outstanding non-vested stock options - end of year		202			9.37		389			9.24		723			8.74

The weighted average grant date fair value for non-vested options forfeited in 2014 was $0.1 million (2013 - $0.1 million).

As of December 31, 2014, there was $0.3 million of total unrecognized compensation cost related to non-vested stock options granted under the Plans. Recognition of this compensation is expected to be $0.2 million (2015), and $0.1 million (2016). During the years ended December 31, 2014, 2013, and 2012, the Company recognized $1.0 million, $1.8 million and $2.9 million, respectively, of compensation cost relating to stock options granted under the Plans. The intrinsic value of options exercised during 2014 was $22.6 million (2013 - $22.6 million; 2012 - $11.9 million).

As at December 31, 2014, the intrinsic value of the outstanding in–the-money stock options was $39.0 million (2013 - $51.7 million) and of exercisable stock options was $35.0 million (2013 - $44.5 million). As at December 31, 2014, the weighted-average remaining life of options vested and expected to vest was 3.6 years (2013 – 4.2 years).

Further details regarding the Company’s outstanding and exercisable stock options at December 31, 2014 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 – $19.99		193		4.2		11.84		193		4.2		11.84
$20.00 – $24.99		295		5.2		24.42		295		5.2		24.42
$25.00 – $29.99		367		7.2		27.69		228		7.2		27.69
$30.00 – $34.99		117		7.3		34.44		69		6.7		34.70
$35.00 – $39.99		391		1.3		39.01		391		1.3		39.01
$40.00 – $44.99		764		3.2		40.41		764		3.2		40.41
$45.00 – $49.99		139		0.2		46.80		139		0.2		46.80
$50.00 – $54.99		429		2.2		51.40		429		2.2		51.40
$55.00 – $59.99		15		9.2		56.76		—		—		—
		2,710		3.7		36.61		2,508		3.3		37.03

F - 30

The weighted-average grant-date fair value of options granted during 2014 was $11.50 per option (2013 - $10.54, 2012 - $8.72). 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 34.7% in 2014, 53.7% in 2013 and 54.8% in 2012; expected life of five years in 2014, four years in 2013 and 2012; dividend yield of 4.4% in 2014, 4.8% in 2013 and 4.4% in 2012; risk-free interest rate of 1.6% in 2014, 0.8% in 2013, and 2.1% in 2012; and estimated forfeiture rate of 12% in 2014, 12% in 2013 and 12% in 2012. 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 three years from the grant date and the performance share units vest two or three years from the grant date. Upon vesting, the value of the restricted stock units, restricted stock awards and performance shares are paid to each grantee in the form of shares or cash. The number of performance share units that vest will range from zero to a multiple of the original number granted, based on certain performance and market conditions.

During 2014, the Company granted 81,388 restricted stock units with a fair value of $4.6 million and 50,689 performance share units with a fair value of $3.4 million, based on the quoted market price and a Monte Carlo valuation model, to certain of the Company’s employees and directors. During 2014, a total of 261,911 restricted stock units with a market value of $8.5 million vested and that amount, net of withholding taxes, was paid to grantees by issuing 149,082 shares of common stock. During 2013, the Company granted 158,957 restricted stock units with a fair value of $5.4 million and 54,773 performance share units with a fair value of $2.3 million, based on the quoted market price and a Monte Carlo valuation model, to certain of the Company’s employees and directors. During 2013, a total of 296,798 restricted stock units with a market value of $8.8 million vested and that amount, net of withholding taxes, was paid to grantees by issuing 175,206 shares of common stock. 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, a total of 334,256 restricted stock units with a market value of $9.0 million vested and that amount, net of withholding taxes, was paid to grantees by issuing 200,024 shares of common stock. For the year ended December 31, 2014, the Company recorded an expense of $5.4 million (2013 - $8.1 million, 2012 - $7.7 million) related to the restricted stock units.

During 2014, the Company also granted 18,230 (2013 – 26,412 and 2012 – 23,563) shares as restricted stock awards with a fair value of $1.0 million (2013 – $0.9 million and 2012 – $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.

13. Related Party Transactions

As at December 31, 2014, Resolute Investments, Ltd. (or Resolute) owned 34.8% (2013 – 35.7%, 2012 – 44.9%) 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. Another of the Company’s directors, Bjorn Moller, is a director of Kattegat Limited.

14. Other (Loss) Income

	Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,
	2014			2013			2012
	$			$			$
TIL stock purchase warrants received (note 15)		6,839			—			—
Gain on sale of other assets		—			—			2,217
Volatile organic compound emission plant lease income		24			238			1,220
Impairment and loss on sale of marketable securities		(1,322	)		(2,062	)		(2,560	)
Miscellaneous income (loss)		1,006			9,229			(511	)
Loss on bond repurchases		(7,699	)		(1,759	)		—
Other (loss) income		(1,152	)		5,646			366

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)

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.

As at December 31, 2014, the Company was committed to the following foreign currency forward contracts:

					Fair Value /
	Contract Amount				Carrying Amount			Expected Maturity
	in Foreign Currency		Average Forward Rate (1)		of Asset (Liability) $			2015 $		2016 $
Norwegian Kroner		861,000		6.44		(18,407	)		91,400		42,253
						(18,407	)		91,400		42,253

(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 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 NOK based on NIBOR plus a margin for a payment of U.S. Dollar fixed interest. 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 NOK-denominated bonds due in 2015 through 2019. In addition, the cross currency swaps economically hedge the interest rate exposure on the NOK bonds due in 2015 through 2019. The Company has not designated, for accounting purposes, these cross currency swaps as cash flow hedges of its NOK-denominated bonds due in 2015 through 2019. As at December 31, 2014, the Company was committed to the following cross currency swaps:

											Fair Value /
											Carrying
Notional		Notional		Floating Rate Receivable							Amount of
Amount		Amount		Reference				Fixed Rate			Asset /			Remaining
NOK		USD		Rate	Margin			Payable			(Liability)			Term (years)
	700,000		122,800	NIBOR		4.75	%		5.52	%		(30,501	)		0.8
	500,000		89,710	NIBOR		4.00	%		4.80	%		(23,843	)		1.1
	600,000		101,351	NIBOR		5.75	%		7.49	%		(24,732	)		2.1
	700,000		125,000	NIBOR		5.25	%		6.88	%		(35,766	)		2.3
	800,000		143,536	NIBOR		4.75	%		5.93	%		(38,898	)		3.1
	900,000		150,000	NIBOR		4.35	%		6.43	%		(34,620	)		3.7
	1,000,000		162,200	NIBOR		4.25	%		6.28	%		(33,031	)		4.1
												(221,391	)

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. The Company has not designated any of its interest rate swap agreements in its consolidated entities as cash flow hedges for accounting purposes.

As at December 31, 2014, the Company was committed to the following interest rate swap agreements related to its LIBOR-based debt and EURIBOR-based debt, whereby certain of the Company’s floating-rate debt were swapped with fixed-rate obligations:

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)

	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		3,357,287		(342,772	)		5.8		3.5
U.S. Dollar-denominated interest rate swaps (3)	LIBOR		500,000		(17,150	)		0.8		3.1
EURIBOR-Based Debt:
Euro-denominated interest rate swaps (4) (5)	EURIBOR		284,993		(45,810	)		6.0		3.1
					(405,732	)

(1) Excludes the margins the Company pays on its variable-rate debt, which, as of December 31, 2014, ranged from 0.3% to 3.95%.

(2) 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.

(3) Interest rate swap with an aggregate principal amount of $180 million is being used to economically hedge expected interest payments on new debt that is planned to be outstanding from 2016 to 2028. The interest rate swap is subject to mandatory early termination in 2015 whereby the swap will be settled based on its fair value at that time. Interest rate swaps with an aggregate principal amount of $320 million are being used to economically hedge expected interest payments on new debt that is planned to be outstanding from 2016 to 2021. These interest rate swaps are subject to mandatory early termination in 2016 whereby the swaps will be settled based on their fair value at that time.

(4) Principal amount reduces monthly to 70.1 million Euros ($84.8 million) by the maturity dates of the swap agreements.

(5) Principal amount is the U.S. Dollar equivalent of 235.6 million Euros.

Stock Purchase Warrants

In January 2014, Teekay and Teekay Tankers formed TIL. Teekay and Teekay Tankers purchased an aggregate of 5.0 million shares of TIL’s common stock, representing an initial 20% interest in TIL, as part of a $250 million private placement by TIL, which represents a total investment by Teekay and Teekay Tankers of $50.0 million. In addition, Teekay and Teekay Tankers received stock purchase warrants entitling them to purchase an aggregate of up to 1.5 million shares of common stock of TIL at a fixed price of $10 per share. Alternatively, if the shares of TIL’s common stock trade on a National Stock Exchange or over-the-counter market denominated in NOK, Teekay and Teekay Tankers may also exercise their stock purchase warrants at 61.67 NOK per share using a cashless exercise procedure. The estimated fair value of the warrants on issuance was $6.8 million and is included in other income in the consolidated statements of income (loss). The stock purchase warrants vest in four equally sized tranches. If the shares of TIL’s common stock trade on a National Stock Exchange or over-the-counter market denominated in NOK, each tranche will vest and become exercisable when and if the fair market value of a share of TIL’s common stock equals or exceeds 77.08 NOK, 92.50 NOK, 107.91 NOK and 123.33 NOK, respectively, for such tranche for any ten consecutive trading days. The stock purchase warrants expire on January 23, 2019. The fair value of the stock purchase warrants at December 31, 2014 was $9.3 million. The Company reports the unrealized gains from the stock purchase warrants in realized and unrealized (losses) gains on non-designated derivatives in the consolidated statements of income (loss).

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, 2014
Derivatives not designated as a cash flow hedge:
Foreign currency contracts		—		—		—			(14,218	)		(4,189	)
Interest rate swap agreements		—		5,101		(22,656	)		(148,006	)		(240,171	)
Cross currency swap agreements		—		—		(1,835	)		(41,733	)		(177,822	)
Stock purchase warrants		—		9,314		—			—			—
		—		14,415		(24,491	)		(203,957	)		(422,182	)
As at December 31, 2013
Derivatives not designated as a cash flow hedge:
Foreign currency contracts		482		12		—			(1,819	)		(155	)
Interest rate swap agreements		21,779		69,785		(22,025	)		(140,503	)		(248,091	)
Cross currency swap agreements		779		—		3			(1,677	)		(51,324	)
		23,040		69,797		(22,022	)		(143,999	)		(299,570	)

As at December 31, 2014, the Company had multiple interest rate swaps, cross currency swaps and foreign currency forward contracts with the same counterparty that are subject to the same master agreements. Each of these master agreements provides for the net settlement of all derivatives subject to that master agreement through a single payment in the event of default or termination of any one derivative.

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)

The fair value of these derivatives is presented on a gross basis in the Company’s consolidated balance sheets. As at December 31, 2014, these derivatives had an aggregate fair value asset amount of nil and an aggregate fair value liability amount of $487.8 million. As at December 31, 2014, the Company had $85.5 million on deposit with the relevant counterparties as security for swap liabilities under certain master agreements. The deposit is presented in restricted cash on the consolidated balance sheets.

Realized and unrealized gains and (losses) 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 on non-designated derivatives in the consolidated statements of income. The effect of the gains and losses on derivatives not designated as hedging instruments in the consolidated statements of income (loss) are as follows:

	Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,
	2014			2013			2012
	$			$			$
Realized (losses) gains relating to:
Interest rate swap agreements		(125,424	)		(122,439	)		(123,277	)
Interest rate swap agreement terminations		(1,319	)		(35,985	)		—
Foreign currency forward contracts		(4,436	)		(2,027	)		1,155
Foinaven embedded derivative		—			—			11,452
		(131,179	)		(160,451	)		(110,670	)
Unrealized (losses) gains relating to:
Interest rate swap agreements		(86,045	)		182,800			26,770
Foreign currency forward contracts		(16,926	)		(3,935	)		6,933
Stock purchase warrants		2,475			—			—
Foinaven embedded derivative		—			—			(3,385	)
		(100,496	)		178,865			30,318
Total realized and unrealized (losses) gains on derivative instruments		(231,675	)		18,414			(80,352	)

Realized and unrealized (losses) gains of the cross currency swaps are recognized in earnings and reported in foreign currency exchange gain (loss) in the consolidated statements of income (loss). The effect of the loss on cross currency swaps on the consolidated statements of income (loss) is as follows:

	Year Ended December 31,
	2014			2013			2012
	$			$			$
Realized gain on partial termination of cross currency swap		—			6,800			—
Realized (losses) gains		(3,955	)		2,089			3,628
Unrealized (losses) gains		(167,334	)		(65,387	)		10,715
Total realized and unrealized (losses) gains on cross currency swaps		(171,289	)		(56,498	)		14,343

The Company is exposed to credit loss to the extent the fair value represents an asset 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, 2014, the Company was committed to the construction of eight LNG carriers, four long-distance towing and offshore installation vessels, three FAUs, one FSO conversion and one FPSO upgrade for a total cost of approximately $2.8 billion, excluding capitalized interest and other miscellaneous construction costs. Two LNG carriers are scheduled for delivery in 2016, three LNG carriers are scheduled for delivery in 2017 and three LNG carriers are scheduled for delivery in 2018, four long-distance towing and offshore installation vessels are scheduled for delivery in 2016, one FAU delivered in February 2015 and two FAUs are scheduled for delivery in 2016, the one FSO conversion is scheduled for completion in early-2017 and the one FPSO upgrade is scheduled for completion in the first quarter of 2016. As at December 31, 2014, payments made towards these commitments totaled $421.9 million (excluding $9.6 million of capitalized interest and other miscellaneous construction costs) and the carrying value of completed units not yet in service was $1.3 billion.

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)

As at December 31, 2014, the remaining payments required to be made under these newbuilding and conversion capital commitments were $616.8 million (2015), $890.0 million (2016), $517.5 million (2017) and $350.9 million (2018).

b) Purchase Obligations

As at December 31, 2014, Teekay Offshore was committed to the purchase of six long-distance towing and offshore installation vessels for a total cost of approximately $220 million. Four long-distance towing and offshore installation vessels delivered in the first and early in the second quarter of 2015, and two long-distance towing and offshore installation vessels are scheduled for delivery in the rest of the second quarter of 2015.

In December 2014, Teekay Tankers signed an agreement to acquire one 2008-built Aframax tanker for a purchase price of $37 million and placed $3.7 million in an escrow fund related to this purchase. In December 2014, Teekay Tankers also signed an agreement to acquire four modern LR2 vessels for a total purchase price of $193.3 million. Teekay Tankers took delivery of all the vessels during the first quarter of 2015.

c) Joint Ventures

As described in Note 3c, Teekay LNG has an ownership interest in the BG Joint Venture and, as part of the acquisition, agreed to assume BG’s obligation to provide shipbuilding supervision and crew training services for the four LNG carrier newbuildings up to their delivery dates pursuant to a ship construction support agreement. As at December 31, 2014, Teekay LNG had incurred $0.8 million relating to shipbuilding and crew training services. The remaining estimated amounts to be incurred for the shipbuilding and crew training obligation, net of the reimbursement from BG, are $5.2 million (2015), $4.2 million in (2016), $3.8 million in (2017), $4.0 million in (2018) and $0.4 million (2019).

In addition, the BG Joint Venture secured a $787.0 million debt facility to finance a portion of the estimated fully built-up cost of $1.0 billion for its four newbuilding carriers, with the remaining portion to be financed pro-rata based on ownership interests by Teekay LNG and the other partners. As at December 31, 2014, Teekay LNG’s proportionate share of the remaining newbuilding installments, net of debt financing, totaled $4.9 million (2015), $7.9 million in (2016), $15.0 million in (2017), $17.3 million in (2018) and $6.3 million (2019).

As described in Note 3b, Teekay LNG has a 50% ownership interest in the Yamal LNG Joint Venture which will build six 172,000-cubic meter ARC7 LNG carrier newbuildings for an estimated total fully built-up cost of approximately $2.1 billion. As at December 31, 2014, Teekay LNG’s proportionate costs incurred under these newbuilding contracts totaled $95.3 million and Teekay LNG’s proportionate share of the estimated remaining costs to be incurred were $23.7 million (2015), $33.9 million in (2016), $84.4 million in (2017), $344.7 million in (2018), $240.2 million (2019), and $201.1 million (thereafter). The Yamal LNG Joint Venture intends to secure debt financing for 70% to 80% of the fully built-up cost of the six newbuildings.

In October 2014, Teekay Offshore sold a 1995-built shuttle tanker, the Navion Norvegia, to a 50/50 joint venture with Brazilian-based Odebrecht Oil & Gas S.A. (a member of the Odebrecht group) (or Odebrecht). The vessel is committed to a new FPSO conversion for the Libra field located in the Santos Basin offshore Brazil. The conversion project will be completed at Sembcorp Marine’s Jurong Shipyard in Singapore and the FPSO unit is scheduled to commence operations in early-2017 under a 12-year fixed-rate contract with Petrobras. The FPSO conversion is expected to cost approximately $1.0 billion. As at December 31, 2014, payments made towards these commitments totaled $35.0 million and the remaining payments required to be made are $398.6 million (2015) and $552.0 million (2016). Teekay Offshore intends to finance its share of the conversion through its existing liquidity and through long-term debt financing within the joint venture. The joint venture secured a $248 million loan late-2014 and expects to secure additional long-term debt financing for the FPSO unit prior to its scheduled delivery.

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.

Navion Hispania Incident

On November 13, 2006, one of Teekay Offshore’s shuttle tankers, 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 Teekay Offshore. The Navion Hispania and the Njord Bravo both incurred damage as a result of the collision. In November 2007, Navion Offshore Loading AS (or NOL) and Teekay Navion Offshore Loading Pte Ltd. (or TNOL), subsidiaries of Teekay Offshore, and Teekay Shipping Norway AS (or TSN), a subsidiary of Teekay, were named as co-defendants in a legal action filed by Norwegian Hull Club (the hull and machinery insurers of the Njord Bravo), several other insurance underwriters and various licensees in the Njord field.

Following a lower court ruling, the appellate court in June 2013 held that NOL, TNOL and TSN were jointly and severally responsible towards the plaintiffs for all the losses as a result of the collision, plus interests accrued on the amount of damages. In addition, Statoil was held not to be required to indemnify NOL, TNOL and TSN for the losses. NOL, TNOL and TSN were also held liable for legal costs associated with court proceedings. Teekay Offshore and Teekay maintain protection and indemnity insurance for damages to the Navion Hispania and insurance for collision-related costs and claims. Thus, Teekay Offshore recognized a total liability of NOK 216,400,000 (approximately $29.0 million) of damages and legal costs and a receivable of NOK 216,400,000 (approximately $29.0 million) as at December 31, 2013.

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)

In 2014, Teekay Offshore and the insurer entered into a settlement agreement with the plaintiffs, which reduced Teekay Offshore’s liability and related receivable to NOK 117,500,000 (approximately $15.8 million). The insurer paid the settlement amount to the plaintiffs during November 2014. There is no liability or receivable recorded on the Company’s consolidated balance sheets as at December 31, 2014.

Teekay Nakilat Capital Lease

As described under Note 10, the Teekay Nakilat Joint Venture was the lessee under three separate 30-year capital lease arrangements with a third party for the three RasGas II LNG Carriers. Under the terms of the leasing arrangements in respect of the RasGas II LNG Carriers, the lessor claimed 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 were assumed by the lessee, in this case the Teekay Nakilat Joint Venture. Lease payments under the lease arrangements were based on certain tax and financial assumptions at the commencement of the leases and subsequently adjusted to maintain its agreed after-tax margin. On December 22, 2014, the Teekay Nakilat Joint Venture terminated the leasing of the RasGas II LNG Carriers. However, the Teekay Nakilat Joint Venture remains obligated to the lessor to maintain the lessor’s agreed after-tax margin from the commencement of the lease to the lease termination date.

The UK taxing authority (or HMRC) has been challenging the use of similar lease structures. One of those challenges resulted in a court decision from the First Tribunal on January 2012 regarding a similar financial lease of an LNG carrier that ruled in favor of the taxpayer, as well as a 2013 decision from the Upper Tribunal that upheld the 2012 verdict. However, HMRC appealed the 2013 decision to the Court of Appeal and in August 2014, HMRC was successful in having the judgment of the First Tribunal (in favor of the taxpayer) set aside. The matter will now be reconsidered by the First Tribunal, taking into account the appellate court’s comments on the earlier judgment. If the lessor of the RasGas II LNG Carriers were to lose on a similar claim from HMRC, which Teekay LNG does not consider to be a probable outcome, Teekay LNG’s 70% share of the potential exposure in the Teekay Nakilat Joint Venture is estimated to be approximately $60 million. Such estimate is primarily based on information received from the lessor.

Petrojarl Banff Storm Damage

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, Teekay declared force majeure under the customer contract on December 8, 2011 and the Banff FPSO unit commenced a period of off-hire while the necessary repairs and upgrades were completed and the weather permitted re-installation of the unit on the Banff field. The Company does not have off-hire insurance covering the Banff FPSO. The repairs and upgrades were completed in 2014, and the Banff FPSO unit resumed production on the Banff field in July 2014.

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 its insurance coverage, subject to a $0.8 million deductible and the other terms and conditions of the applicable policies. In addition, the Company incurred 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 to the extreme weather and sea states experienced during the December 7, 2011 storm. The Apollo Spirit was operating on the Banff field as a storage tanker and returned to service on the Banff field at the same time as the Banff FPSO unit. The total of these capital upgrade costs was approximately $181 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. Any capital upgrade costs not recovered from the charterer are expected to 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, 2014.

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.

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)

17. Supplemental Cash Flow Information

a) The changes in operating assets and liabilities for the years ended December 31, 2014, 2013, and 2012, are as follows:

	Year Ended December 31,
	2014			2013			2012
Accounts receivable		136,660			(77,837	)		(132,873	)
Prepaid expenses and other assets		(1,618	)		(2,386	)		19,741
Accounts payable		(17,643	)		(10,877	)		18,408
Accrued and other liabilities		(56,768	)		155,284			(20,485	)
		60,631			64,184			(115,209	)

b) Cash interest paid, including realized interest rate swap settlements, during the years ended December 31, 2014, 2013, and 2012, totaled $328.2 million, $282.4 million and $274.2 million, respectively. In addition, during the years ended December 31, 2014, 2013, and 2012, cash interest paid relating to interest rate swap amendments and terminations totaled $1.3 million, $36.0 million and $nil, respectively.

c) During 2014, the Company took ownership of three VLCCs, which were collateral for all amounts owing under the investment in term loans, and the investment in term loans was concurrently discharged. The VLCCs had an estimated aggregate fair value of $222.0 million on this date, which approximated all the amounts owing under the investment in term loans. During the first quarter of 2014, second-hand vessel values for VLCCs increased and, as a result, the Company recognized $15.2 million of interest income owing under the investment in term loans in the first quarter of 2014. The assumption of ownership of the VLCCs and concurrent discharge of the loans has been treated as a non-cash transaction in the Company’s consolidated statement of cash flows.

d) As described in Note 3c, during 2014, Teekay LNG acquired BG’s ownership interest in the BG Joint Venture. As compensation, Teekay LNG assumed BG’s obligation (net of an agreement by BG to pay Teekay LNG approximately $20.3 million) to provide shipbuilding supervision and crew training services for the four LNG carrier newbuildings up to their delivery dates pursuant to a ship construction support agreement. The estimated fair value of the assumed obligation of approximately $33.3 million was used to offset the purchase price and Teekay LNG’s receivable from BG and was treated as a non-cash transaction in the Company’s consolidated statement of cash flows.

e) During 2014, Teekay LNG acquired an LPG carrier, the Norgas Napa, from Skaugen for $27.0 million, of which $21.6 million was paid in cash upon delivery and the remaining $5.4 million is an interest-bearing loan to Skaugen.

f) As described in Note 10, during 2014 and 2013 the sales of the Tenerife Spirit, Huelva Spirit, and Algeciras Spirit conventional tankers resulted in the vessels under capital leases being returned to the owner and the capital lease obligations being concurrently extinguished. Therefore, the sales of the Algeciras Spirit and Huelva Spirit under capital lease of $56.2 million in 2014 and the sale of the Tenerife Spirit under capital lease of $29.7 million in 2013 and the concurrent extinguishment of the corresponding capital lease obligations of $56.2 million in 2014 and $29.7 million in 2013 were treated as non-cash transactions in the Company’s consolidated statements of cash flows.

g) During 2013, Teekay LNG acquired two LNG carriers from Awilco for a purchase price of $205.0 million per vessel. The upfront prepayment of charter hire of $51.0 million (inclusive of a $1.0 million upfront fee) per vessel was used to offset the purchase price and was treated as a non-cash transaction in the consolidated statements of cash flows.

h) During 2014, the portion of dividends declared by the Teekay Tangguh Joint Venture that was used to settle the advances made to BLT LNG Tangguh Corporation and P.T. Berlian Laju Tanker of $14.4 million was treated as a non-cash transaction in the consolidated statements of cash flows.

18. Vessel Sales, Asset Impairments and Provisions

a) Sale of Vessels, Equipment and Other Assets

During 2014 Teekay Offshore sold a 1995-built shuttle tanker, the Navion Norvegia, to a joint venture held between Teekay Offshore and a joint venture partner. The Company’s consolidated statement of income (loss) for the year ended December 31, 2014 includes a $3.1 million gain related to the sale of this vessel. The gain on sale of vessel is included in the Company’s shuttle tanker, FSO and offshore support segment.

During 2014, the Company sold an office building. The Company’s consolidated statement of income (loss) for the year ended December 31, 2014, includes a $0.9 million gain on sale related to this office, which is included in the Company’s FPSO segment.

During 2014, Teekay Tankers sold two wholly-owned subsidiaries, each of which owned one VLCC, to TIL for aggregate proceeds of $154.0 million plus related working capital on closing of $1.7 million. The Company received the purchase price in cash. The Company used a portion of the proceeds from this transaction to prepay $152 million on one of the Company’s revolving credit facilities and the remainder of the proceeds was used for general corporate purposes. During the year ended December 31, 2014, the Company realized a net gain of $10.0 million from the sale of the two subsidiaries to TIL (See Note 18b).

During 2014, the Company sold to TIL four 2009-built Suezmax tankers that were part of the Company’s conventional tanker segment. These vessels were classified as held for sale on the consolidated balance sheet as at December 31, 2013, with their net book values written down to their estimated sale proceeds. During the year ended December 31, 2014, the Company realized a net loss of $0.5 million from the sale of these vessels.

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)

During 2013, the Company sold a 1992-built shuttle tanker, a 1992-built conventional tanker, two 1995-built conventional tankers and a 1998-built conventional tanker that were part of the Company’s shuttle tanker, FSO and offshore support and conventional tanker segments. The Company realized a net gain of $0.7 million from the sale of these vessels. Three of these vessels were classified as held for sale on the consolidated balance sheet as at December 31, 2012, with their net book values written down to their sale proceeds net of cash outlays to complete the sales. All of the vessels were older vessels that the Company disposed of in the ordinary course of business. During 2013, the Company also sold sub-sea equipment from the Petrojarl I FPSO unit that is part of the Company’s FPSO segment. The Company realized a gain of $1.3 million from the sale of the equipment.

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 was recorded in equity income on the Company’s consolidated statements of income (loss) for the year ended December 31, 2012.

b) Asset Impairments and Provisions

During 2014, the carrying value of one of the Company’s 1990s-built shuttle tanker was written down to its estimated fair value, using an appraised value. The write-down was the result of the tanker coming off charter and the expectation that it would be re-chartered at a lower rate. The Company’s consolidated statement of income (loss) for the year ended December 31, 2014, includes a $4.8 million write-down related to this vessel, which is included in the Company’s shuttle tanker, FSO and offshore support segment.

During 2014, the Company reversed a $2.5 million loss provision for an amount receivable related to an FPSO front-end engineering and design study completed in 2013, as this receivable was recovered in 2014. During 2013, the Company recorded a $2.6 million of loss provision relating to this receivable.

During December 2013, the Company commenced a process to dispose of four vessel owning companies (or LLCs), each of which owns one 2009-built Suezmax tanker, through the sale to a new entity, TIL, which was ultimately incorporated on January 10, 2014. On January 23, 2014, TIL completed a $250 million equity private placement in which Teekay Tankers and Teekay co-invested $25 million each for a combined 20% ownership interest in the new company. Concurrently with this equity private placement, Teekay entered into an agreement to sell the four Suezmax tankers to TIL for $163.2 million plus working capital less outstanding debt of the LLCs on closing, which occurred on February 28, 2014. The Company has presented the assets and liabilities of the LLCs as assets held for sale and liabilities held for sale on the Company’s December 31, 2013 balance sheet as follows:

	$
Assets Held for Sale
Accounts receivable		11,179
Prepaid expenses		1,220
Vessels and equipment		163,200
Other long-term assets		648
Total assets		176,247
Liabilities Associated with Assets Held for Sale
Accounts payable		37
Accrued liabilities		3,362
Current portion of long-term debt(note 8)		11,698
Long-term debt(note 8)		152,910
Total liabilities		168,007

During 2013, the Company wrote down the four Suezmax tankers to their estimated fair value of $163.2 million, which consists of their sale price, resulting in the recognition of an asset impairment of $90.8 million in the Company’s consolidated statement of income (loss) for the year ended December 31, 2013. The vessels were part of the Company’s conventional tanker segment.

In 2013, the carrying value of six of the Company’s 1990s-built shuttle tankers were written down to their estimated fair values, using an appraised value. The Company’s consolidated statement of income (loss) for the year ended December 31, 2013, includes a $76.8 million write-down related to these six vessels, of which $56.5 million relates to four shuttle tankers which Teekay Offshore owns through subsidiaries with ownership interests ranging from 50% to 67%. During the third quarter of 2013, four of these six shuttle tankers were written down as the result of the re-contracting of one of the vessels at lower rates than expected during the third quarter of 2013, the cancellation of a short-term contract which occurred in September 2013 and a change in expectations for the contract renewal for two of the shuttle tankers. In the fourth quarter of 2013, the remaining two of the six shuttle tankers were written down due to a cancellation in their contract renewal. The $76.8 million write-down is included within the Company’s shuttle tanker, FSO and offshore support segment.

During 2013, the Company increased the net carrying amount of the investments in term loans, which includes accrued interest income, by $1.9 million as the estimated future cash flows, which primarily reflected the estimated value of the underlying collateral, increased during 2013. The investments in term loans are part of the Company’s conventional tanker segment. The net carrying amount of the loans consists of the present value of estimated future cash flows at December 31, 2013 (see Note 4).

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)

However, as at December 31, 2013, $11.2 million of interest receivable under the term loans, including default interest, was not recorded in respect of its investments in the three term loans based on the Company’s estimates of amounts receivable from its collateral. During March 2014, the Company assumed ownership of the three VLCCs that collateralized the investment in term loans (see Note 18a). At the time of assumption of ownership, these vessels had an aggregate fair value of approximately $222 million, which exceeded the carrying value of the loans. As a result, in the first quarter of 2014, the Company recognized $15.2 million of interest income, of which $11.2 million related to prior periods and was previously unrecognized owing under the loans.

In 2012, a total of 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 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 had a similar age, had a similar carrying value before the impairment and a similar estimated fair value, and were 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 occurred during the fourth quarter of 2012 that caused the write downs were the effects on our estimated future cash flows from negative changes in the outlook for the crude tanker market, delays in the 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, FSO and offshore support 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.

See Note 2 – Segment Reporting for the total write down of vessels by segment for 2014, 2013 and 2012.

19. Loss Per Share

	Year Ended December 31,
	2014			2013			2012
	$			$			$
Net loss attributable to shareholders of Teekay Corporation		(54,757	)		(114,738	)		(160,180	)
Weighted average number of common shares		72,066,008			70,457,968			69,263,369
Dilutive effect of stock-based compensation		—			—			—
Common stock and common stock equivalents		72,066,008			70,457,968			69,263,369
Loss per common share:
- Basic		(0.76	)		(1.63	)		(2.31	)
- Diluted		(0.76	)		(1.63	)		(2.31	)

Stock-based awards, which have an anti-dilutive effect on the calculation of diluted loss per common share, are excluded from this calculation. For the years ended December 31, 2013 and 2012, options to acquire 1.0 million and 3.9 million shares of Common Stock, respectively, had an anti-dilutive effect on the calculation of diluted income per common share.

20. Restructuring Charges

During 2014, the Company recorded restructuring charges of $9.8 million ($6.9 million – 2013, $7.6 million - 2012).

The restructuring charges in 2014 relate to the termination of the employment of certain seafarers upon the re-delivery of an in-chartered conventional tanker in December 2014 and upon the sale of a vessel under capital lease to a third party in August 2014, and the reflagging of one shuttle tanker which commenced in January 2014 and was completed in March 2014, partially offset by an adjustment to the accrual for costs related to the reorganization of the Company’s marine operations.

A portion of the restructuring charges in 2013 relates to the termination of the employment of certain seafarers from the sale of two vessels and the reflagging of one shuttle tanker. The restructuring charges in 2012 and a portion of the restructuring charges in 2013 primarily relate to the reorganization of the Company’s marine operations and certain of its commercial and administrative functions. The purpose of this restructuring was to create better alignment between certain of the Company’s business units and its three publicly-listed subsidiaries, as well as a lower cost organization. The Company does not expect to incur further restructuring charges associated with this reorganization.

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)

At December 31, 2014 and 2013, $9.0 million and $4.9 million, respectively, of restructuring liabilities were recorded in accrued liabilities on the consolidated balance sheets.

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 U.K. and Norwegian subsidiaries are subject to income taxes.

The significant components of the Company’s deferred tax assets and liabilities are as follows:

	December 31,			December 31,
	2014			2013
	$			$
Deferred tax assets:
Vessels and equipment		43,268			73,750
Tax losses carried forward(1)		360,547			427,656
Other		28,973			32,012
Total deferred tax assets		432,788			533,418
Deferred tax liabilities:
Vessels and equipment		12,514			19,555
Long-term debt		2,295			22,008
Other		19,954			30,519
Total deferred tax liabilities		34,763			72,082
Net deferred tax assets		398,025			461,336
Valuation allowance		(385,431	)		(442,504	)
Net deferred tax assets		12,594			18,832

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 $1.46 billion relate primarily to its Norwegian, U.K., and Spanish subsidiaries and, to a lesser extent, to its Australian ship-owning subsidiaries. These net operating loss carryforwards are available to offset future taxable income in the respective jurisdictions, and can be carried forward indefinitely. The Company also has $47.0 million in disallowed finance costs that relate to its Spanish subsidiaries and are available to offset future finance costs and can be carried forward for 18 years.

The components of the provision for income taxes are as follows:

	Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,
	2014			2013			2012
	$			$			$
Current		(6,460	)		2,742			9,167
Deferred		(3,713	)		(5,614	)		5,239
Income tax (expense) recovery		(10,173	)		(2,872	)		14,406

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)

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			Year Ended			Year Ended
	December 31, 2014			December 31, 2013			December 31, 2012
	$			$			$
Net loss before taxes		134,175			38,352			(325,522	)
Net loss not subject to taxes		(80,454	)		(267,665	)		(129,307	)
Net (loss) income subject to taxes		214,629			306,017			(196,215	)
At applicable statutory tax rates		39,382			12,719			(15,808	)
Permanent and currency differences, adjustments to valuation allowances and uncertain tax positions		(28,027	)		(8,173	)		(2,817	)
Other		(1,182	)		(1,674	)		4,219
Tax expense (recovery) related to the current year		10,173			2,872			(14,406	)

The following is a roll-forward of the Company’s unrecognized tax benefits, recorded in other long-term liabilities, from January 1, 2012 to December 31, 2014:

	Year ended			Year ended			Year ended
	December 31,			December 31,			December 31,
	2014			2013			2012
	$			$			$
Balance of unrecognized tax benefits as at January 1		20,304			29,364			39,804
Increases for positions related to the current year		3,643			1,141			4,560
Changes for positions taken in prior years		1,015			(1,284	)		(5,085	)
Decreases related to statute of limitations		(4,627	)		(8,917	)		(9,915	)
Balance of unrecognized tax benefits as at December 31		20,335			20,304			29,364

The majority of the net decrease for positions for the year ended December 31, 2014 relates to a potential tax on freight income becoming statute barred.

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 2010 through 2014 remain open to examination by some of the major 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 $1.6 million in 2014, net of statute barred liabilities, and $7.2 million in 2013 and $0.8 million in 2012.

22. Pension Benefits

a) Defined Contribution Pension Plans

With the exception of certain of the Company’s employees in Australia and Norway, 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, 2014, 2013, and 2012, the amount of cost recognized for the Company’s defined contribution pension plans was $18.0 million, $14.8 million and $14.5 million, 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, 2014, approximately 69% of the defined benefit pension assets were held by the Norwegian plans and approximately 31% were 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.

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)

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			Year Ended
	December 31, 2014			December 31, 2013
	$			$
Change in benefit obligation:
Beginning balance		150,996			148,490
Service cost		8,800			9,768
Interest cost		4,975			4,974
Contributions by plan participants		292			481
Actuarial (gain) loss		15,982			3,396
Benefits paid		(5,476	)		(9,501	)
Plan settlements and amendments		(21,235	)		(3,126	)
Benefit obligations assumed on acquisition		1,083			3,125
Foreign currency exchange rate changes		(33,680	)		(6,515	)
Other		(133	)		(96	)
Ending balance		121,604			150,996
Change in fair value of plan assets:
Beginning balance		138,876			134,408
Actual return on plan assets		2,849			4,453
Contributions by the employer		12,283			14,609
Contributions by plan participants		292			481
Benefits paid		(5,456	)		(9,470	)
Plan settlements and amendments		(22,405	)		(2,118	)
Plan assets assumed on acquisition		998			2,502
Foreign currency exchange rate changes		(29,721	)		(5,564	)
Other		(558	)		(425	)
Ending balance		97,158			138,876
Funded status deficiency		(24,446	)		(12,120	)
Amounts recognized in the balance sheets:
Other long-term liabilities		24,446			12,120
Accumulated other comprehensive loss:
Net actuarial losses		(32,060	)		(20,922	)

(1) As at December 31, 2014, the estimated amount that will be amortized from accumulated other comprehensive (loss) income into net periodic benefit cost in 2015 is $(1.9) million.

As of December 31, 2014 and 2013, the accumulated benefit obligations for the Benefit Plans were $95.7 million and $116.1 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, 2014		December 31, 2013
	$		$
Benefit obligation		90,042		88,140
Fair value of plan assets		64,631		71,955
Accumulated benefit obligation		60,828		1,319
Fair value of plan assets		55,095		689

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)

The components of net periodic pension cost relating to the Benefit Plans for the years ended December 31, 2014, 2013 and 2012 consisted of the following:

	Year Ended December 31, 2014 $			Year Ended December 31, 2013 $			Year Ended December 31, 2012 $
Net periodic pension cost:
Service cost		8,800			9,768			9,921
Interest cost		4,975			4,974			4,392
Expected return on plan assets		(5,333	)		(5,688	)		(5,270	)
Amortization of net actuarial loss		7,148			1,484			1,980
Plan settlement		(3,332	)		973			—
Other		557			425			577
Net cost		12,815			11,936			11,600

The components of other comprehensive loss relating to the Plans for the years ended December 31, 2014, 2013 and 2012 consisted of the following:

	Year Ended December 31, 2014 $			Year Ended December 31, 2013 $			Year Ended December 31, 2012 $
Other comprehensive income (loss):
Net (loss) gain arising during the period		(14,954	)		(3,930	)		6,143
Amortization of net actuarial loss		7,148			1,484			1,979
Plan settlement		(3,332	)		973			—
Total (loss) income		(11,138	)		(1,473	)		8,122

The Company estimates that it will make contributions into the Benefit Plans of $7.5 million during 2015. 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 $
2015		6,744
2016		5,373
2017		6,654
2018		4,707
2019		5,409
2020 – 2024		28,664
Total		57,551

F - 43

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 fair value of the plan assets, by category, as of December 31, 2014 and 2013 were as follows:

	December 31, 2014		December 31, 2013
Pooled Funds (1)		66,563		98,338
Mutual Funds (2)
Equity investments		7,343		18,080
Debt securities		6,119		3,811
Real estate		1,530		2,108
Cash and money market		12,238		8,796
Other		3,365		7,743
Total		97,158		138,876

(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, 2014 and 2013 were as follows:

	December 31, 2014			December 31, 2013
Discount rates		2.9	%		3.9	%
Rate of compensation increase		4.2	%		4.7	%

The weighted average assumptions used to determine net pension expense for the years ended December 31, 2014, 2013 and 2012 were as follows:

	Year Ended December 31, 2014 $			Year Ended December 31, 2013 $			Year Ended December 31, 2012 $
Discount rates		2.9	%		3.9	%		3.0	%
Rate of compensation increase		4.2	%		4.7	%		5.5	%
Expected long-term rates of return (1)		4.0	%		4.8	%		4.8	%

(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.

F - 44

TEEKAY CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in thousands of U.S. dollars, other than share data)

23. Equity-accounted Investments

In October 2014, Teekay Offshore sold a 1995-built shuttle tanker, the Navion Norvegia, to the OOG-TK Libra GmbH & Co KG (or Libra Joint Venture), a joint venture with Odebrecht The vessel is committed to a new FPSO unit conversion for the Libra field located in the Santos Basin offshore Brazil. The conversion project will be completed at Sembcorp Marine’s Jurong Shipyard in Singapore and the FPSO unit is scheduled to commence operations in early-2017 under a 12-year fixed-rate contract with Petrobras (see note 16c).

In July 2014, Teekay LNG, through a new 50/50 joint venture, the Yamal LNG Joint Venture, ordered six internationally-flagged icebreaker LNG carriers for the Yamal LNG Project. The Yamal LNG Project is a joint venture between Russia-based Novatek OAO (60%), France-based Total S.A. (20%) and China-based CNPC (20%), and will consist of three LNG trains with a total expected capacity of 16.5 million metric tons of LNG per annum and is currently scheduled to start-up in early-2018 (see note 3b).

In June 2014, Teekay LNG acquired from BG its ownership interests in four 174,000-cubic meter Tri-Fuel Diesel Electric LNG carrier newbuildings, which will be constructed by Hudong-Zhonghua Shipbuilding (Group) Co., Ltd. in China for an estimated total fully built-up cost to the joint venture of approximately $1.0 billion. The vessels, upon delivery, which are scheduled between September 2017 and January 2019, will each operate under 20-year fixed-rate time-charter contracts, plus extension options, with Methane Services Limited, a wholly-owned subsidiary of BG (see note 3c).

In January 2014, Teekay and Teekay Tankers formed TIL, which seeks to opportunistically acquire, operate and sell modern second-hand tankers to benefit from an expected recovery in the current cyclical low of the tanker market. Teekay and Teekay Tankers in the aggregate purchased 5.0 million shares of common stock, representing an initial 20% interest in TIL, as part of a $250 million private placement by TIL, which represents a total investment by Teekay and Teekay Tankers of $50.0 million. In October 2014, Teekay Tankers acquired an additional 0.9 million common shares in TIL, representing 2.43% of the then outstanding share capital of TIL. In October 2014, TIL authorized a share repurchase program for up to $30 million and has repurchased $15.1 million to-date at an average price of NOK 68.49 per share and brought the combined interests of Teekay and Teekay Tankers in TIL to 16.05% as at December 31, 2014. (see note 3e).

In June 2013, Teekay Offshore completed the acquisition from Teekay of its 50% interest in a FPSO unit, the Cidade de Itajai (or Itajai). The Itajai FPSO has been operating on the Baúna and Piracaba (previously named Tiro and Sidon) fields in the Santos Basin offshore Brazil since February 2013 under a nine-year fixed-rate time-charter contract, plus extension options, with Petrobras. The remaining 50% interest in the Itajai FPSO unit is owned by Odebrecht.

In February 2013, Teekay LNG entered into a joint venture agreement with Exmar to own and charter-in LPG carriers with a primary focus on the mid-size gas carrier segment. Exmar LPG BVBA, took economic effect as of November 1, 2012 and, as of December 31, 2014, its fleet included 20 owned LPG carriers (including nine newbuilding carriers scheduled for delivery between 2015 and 2018) and four chartered-in LPG carriers. Teekay LNG and Exmar each have a 50% economic interest in Exmar LPG BVBA. Since control of the Exmar LPG BVBA is shared jointly between Exmar and Teekay LNG, Teekay LNG accounts for its investment in the Exmar LPG BVBA using the equity method (see note 3g).

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 3h).

Teekay LNG 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. The Wah Kwong Joint Venture is a joint venture arrangement between Teekay Tankers and Wah Kwong Maritime Transport Holdings Limited (or Wah Kwong) whereby Teekay Tankers holds a 50% interest. SkaugenPetrotrans Joint Venture is a joint venture arrangement between Teekay and I.M. Skaugen Marine Services Pte Ltd. whereby Teekay holds a 50% interest. Teekay has a joint venture interest of 49% in Remora AS (or Remora), a Norway-based offshore marine technology company from which Teekay Offshore acquired a 2010-built HiLoad DP unit. The RasGas 3 Joint Venture is a joint venture arrangement between Teekay LNG and QGTC Nakilat (1643-6) Holdings Corporation 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. Teekay LNG has a 50% interest in joint ventures with Exmar (or the Exmar Joint Venture) which owns two LNG carriers that are chartered out under long term contracts.

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 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 of December 31, 2014, the aggregate value of the Company’s 43% interest (43% interest - December 31, 2013) in Sevan, based on the quoted market price of Sevan’s common stock on the Oslo Stock Exchange, was $61.4 million ($94.3 million – December 31, 2013).

F - 45

TEEKAY CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in thousands of U.S. dollars, other than share data)

A condensed summary of the Company’s investments in and advances to equity-accounted investees are as follows (in thousands of U.S. dollars, except percentages):

				As at December 31,
Investments in Equity-accounted Investees	Ownership Percentage			2014 $		2013 $
Malt Joint Venture (note 3h)		52	%		263,446		228,183
RasGas 3 Joint Venture		40	%		141,866		125,648
Exmar LPG Joint Venture (note 3g)		50	%		126,690		82,576
Exmar Joint Venture		50	%		97,037		86,387
TIL (note 3e)		16	%		63,715		—
Tiro and Sidon Joint Venture		50	%		54,540		52,118
Angola Joint Venture		33	%		50,887		54,168
Sevan Marine Equity Investment (note 3f)		43	%		34,985		40,740
BG (note 3c)		20%-30	%		20,704		—
Other		50	%		19,551		20,489
Total					873,421		690,309
				As at December 31,
Loans to Equity-accounted Investees	Ownership Percentage			2014		2013
Yamal LNG Joint Venture (note 3b)		50	%		97,157		—
Exmar LPG Joint Venture (note 3g)		50	%		82,677		82,068
Tiro and Sidon Joint Venture		50	%		18,006		12,781
SkaugenPetroTrans Joint Venture		50	%		14,500		16,079
Teekay LNG-Marubeni Joint Venture (note 3h)		52	%		11,039		10,274
Other		16% - 50	%		28,201		19,570
Total					251,580		140,772

(1) The Company also has loans to joint venture partners of $1.8 million as at December 31, 2014 (2013 - $28.5 million).

A condensed summary of the Company’s financial information for equity-accounted investments (16% to 52% owned) shown on a 100% basis are as follows:

	As at December 31,
	2014(1)		2013(2)
Cash and restricted cash		434,833		323,065
Other assets- current		249,882		165,919
Vessels and equipment		3,345,590		2,496,086
Net investment in direct financing leases		1,873,803		1,907,458
Other assets - non-current		150,618		302,255
Current portion of long-term debt and obligations under capital lease		526,097		501,683
Other liabilities - current		217,180		216,659
Long-term debt and obligations under capital lease		2,958,698		2,973,170
Other liabilities - non-current		459,907		256,465

	Year ended December 31,
	2014(1)			2013(2)		2012(3)(4)
Revenues		998,655			940,156		659,030
Income from vessel operations		454,135			328,430		241,702
Realized and unrealized (loss) gain on derivative instruments		(58,884	)		16,334		(56,307	)
Net income		300,837			288,550		120,395

Certain of the comparative figures have been adjusted to conform to the presentation adopted in the current year.

(1) The results included for TIL are from the date of incorporation in January 2014.

(2) The results included for the Exmar LPG BVBA are from the date of acquisition in February 2013.

(3) The results included for the Teekay LNG-Marubeni Joint Venture are from the date of acquisition of the MALT LNG Carriers, which were acquired in February 2012.

(4) 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.

F - 46

TEEKAY CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in thousands of U.S. dollars, other than share data)

For the year ended December 31, 2014, the Company recorded equity income of $128.1 million (2013 – $136.5 million and 2012 - $79.2 million). The income was primarily comprised of the Company’s share of net income (loss) from the Teekay LNG-Marubeni Joint Venture, Angola LNG Project, the RasGas 3 Joint Venture, Sevan, Exmar Joint Venture, Exmar LPG BVBA, and from the interest in the Itajai. For the year ended December 31, 2014, $1.1 million of the equity gain related to the Company’s share of unrealized gain (loss) on interest rate swaps associated with these projects (2013 – $31.2 million and 2012 - $5.3 million).

24. Subsequent Events

a) In February 2015, Teekay LNG entered into an agreement with DSME for the construction of one additional 173,400 cbm MEGI LNG carrier newbuilding for a total fully built-up cost of approximately $225 million, with options to order up to four additional vessels. Teekay LNG intends to secure long-term contract employment for the ordered vessel prior to its scheduled delivery in the fourth quarter of 2018.

b) In April 2015, Teekay Offshore issued 5.0 million 8.50% Series B Cumulative Redeemable Preferred Units in a public offering for net proceeds of $120.8 million. Teekay Offshore expects to use the net proceeds from the public for general partnership purposes, including the funding of newbuilding installments, capital conversion projects and the acquisitions of vessels that Teekay has offered or may offer to Teekay Offshore, which may include funding Teekay Offshore’s acquisition of the Knarr FPSO unit from Teekay.

F - 47

EX-4.22

Exhibit 4.22

DATED JULY 2014

CHINA LNG SHIPPING (HOLDINGS) LIMITED

and

TEEKAY LNG OPERATING LLC

SHAREHOLDERS’ AGREEMENT

RELATING TO

TC LNG SHIPPING LLC

INDEX

No	Description	Page No.
1.	DEFINITIONS AND INTERPRETATION		1
2.	AGREEMENT FOR JOINT VENTURE AND WARRANTIES		6
3.	OBJECTS		7
4.	SUPERVISION OF CONSTRUCTION AND MANAGEMENT OF VESSELS		7
5.	PRELIMINARY MATTERS		8
6.	WORKING CAPITAL AND FINANCE		9
7	NUMBER OF DIRECTORS		12
8.	MANAGEMENT OF THE COMPANIES		13
9.	BUDGETS		16
10.	RESERVED MATTERS		17
11.	TRANSFER OF SHARES IN THE JOINT VENTURE COMPANY		17
12.	OTHER BUSINESS		21
13.	CONFIDENTIALITY		21
14.	TERMINATION OF THIS AGREEMENT		23
15.	DEFAULT		24
16.	DIVIDEND POLICY		27
17.	DEADLOCK		27
18.	FURTHER ASSURANCE		28
19.	COSTS		29
20.	PROVISIONS RELATING TO THIS AGREEMENT		29
21.	NOTICES		33
22.	APPLICABLE LAW AND ARBITRATION		33
SCHEDULE 1 - RESERVED MATTERS			35
SCHEDULE 2 - COMPANY DETAILS			38
SCHEDULE 3 - FORM OF ANNUAL BUDGET			40
SCHEDULE 4 - FORM OF SUPERVISION AGREEMENT			41
SCHEDULE 5 - FORM OF CORPORATE SERVICES AGREEMENT			42
SCHEDULE 6 - FORM OF SHIPMANAGEMENT AGREEMENT			43

- 1 -

THIS AGREEMENT is made as of the      day of July, 2014

BETWEEN:

(1) CHINA LNG SHIPPING (HOLDINGS) LIMITED (Company No. 0845254), a company incorporated in Hong Kong, having its address for correspondence at Room 912, 9th Floor, China Merchants Tower, Shun Tak Centre, 168-200 Connaught Road Central, Sheung Wan, Hong Kong (“CLNG”);

and

(2) TEEKAY LNG OPERATING LLC (Company No. 960612), a limited liability company formed and existing in the Marshall Islands, having its registered office at Trust Company Complex, Ajeltake Road, Ajeltake island, Majuro, Marshall Islands, MH96960 with a business address at 4th Floor, Belvedere Building, 69 Pitts Bay Road, Hamilton, HM 08, Bermuda (“Teekay”).

WHEREAS

(A) Teekay was approved as a prequalified tenderer to submit a proposal to purchase, charter and manage up to fifteen (15) Arc7 LNG vessels which are to be built by Daewoo Shipbuilding &Marine Engineering Co. Ltd. for service of the Yamal LNG Project (the “Project”).

(B) CLNG and Teekay agreed to cooperate as a consortium (the “Consortium”) in submitting a proposal to provide up to six (6) Vessels (as defined below) for the Project and appointed Teekay as Consortium leader authorized to sign the proposal on behalf of the Consortium, and to act for and bind the Consortium in all matters relating to the Proposal.

(C) Teekay was informed on 17^th February 2014 that it was selected as a preferred bidder for the Project and together with CLNG finalised into bilateral negotiations with Yamal LNG in connection with the Project.

(D) CLNG and Teekay have incorporated the Joint Venture Company (as defined below) and have each subscribed for their respective Agreed Proportions (as defined below) of the issued share capital of the Joint Venture Company. The purpose of the Joint Venture Company is to form and own a separate special purpose company for each Vessel to be purchased and chartered in connection with the Project.

(E) This Agreement sets out the terms upon which, inter alia, the parties will regulate their relationship as shareholders of the Joint Venture Company and the administration and conduct of the respective businesses of the Joint Venture Company, and the Vessel Owning Companies (as defined below).

NOW IT IS HEREBY AGREED as follows:

1. DEFINITIONS AND INTERPRETATION

1.1 In this Agreement, unless the contrary intention appears, the following words and expressions shall have the following meanings:

“Affiliate” means any person who directly or indirectly owns, controls, is under common ownership or control with or is controlled by the party in question; where “own” or “control” means the ownership of 50% or more shares or the right to exercise 50% or more of the voting shares of a company or other entity or of the equivalent rights so as to determine the decisions of such company or other entity.

1

“Annual Budget” has the meaning ascribed thereto in Clause 9.1;

“Agreed Proportions” means 50% in respect of Teekay and 50% in respect of CLNG or (if different) such other proportions as equal, at the relevant time, the percentages which the number of the Shares beneficially owned by those parties respectively in the Joint Venture Company bear to the total number of the issued Shares of the Joint Venture Company.

“Associated Person” means the in relation to a Shareholder, such Shareholder and its Affiliates and their respective directors, officers, employees, agents, suppliers and sub-contractors.

“Board” means, in relation to each Company, the board of directors of that Company from time to time.

“Builder” means Daewoo Shipbuilding &Marine Engineering Co. Ltd.

“Business” means, in relation to each Company, the business to be carried on by that Company as set out in Clause 3.

“Business Day” means a day (excluding Saturdays and Sundays) on which banks are open for business in each of Vancouver, London, Hong Kong and Beijing, and (if payment or other dealing is required to be made on that day) in New York City and (in the case of payment) the place to which such payment is required to be made.

“Charterer” means, in relation to each Time Charter, the charterer for the time being under the Time Charter, being, at the date of this Agreement, Yamal Trade Pte Ltd.

“CLNG Director” means, in relation to each Company, a Director appointed by CLNG in accordance with this Agreement and the Constitution of that Company.

“CLSICO” means, China LNG Shipping (International) Co., Limited with business address Unit Nos. 01-02, Level 31, Millennium City 6, 392 Kwun Tong Road, Kwun Tong, Kowloon, Hong Kong.

“Companies” means the Joint Venture Company and the Vessel Owning Companies and ‘Company’ means any one of them details of which are set out in Schedule 2.

“Constitution” means, in relation to each Company, the articles of incorporation or by-laws or the memorandum and articles of association or equivalent constitutional documents of that Company.

“Corporate Services Agreement” means the agreement to be made between the Companies and the Corporate Services Provider in the agreed form, whereby the Corporate Services Provider will provide administrative and corporate services to the Companies.

“Corporate Services Provider” means, Teekay Shipping Limited (or its Affiliate) or such other entity as may be agreed between Shareholders from time to time.

“Debt Financing” has the meaning ascribed thereto in Clause 6.4;

2

“Directors” means, in relation to each Company, the directors for the time being of that Company.

“Dollars” and the symbol “$” means the lawful currency of the United States of America.

“GAAP” means the generally accepted accounting principles of the United States of America.

“Joint Venture Company” means TC LNG Shipping LLC, a limited liability company formed in the Marshall Islands, with its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960.

“LIBOR” means (i) the rate for Dollar deposits for periods of six months at or about 11:00 a.m. (London Time) on the relevant day in question as displayed on Telerate page 3750 (being the London interbank offered rate administered by ICE Benchmark Administration Limited (or any other person who takes over the administration of that rate) (or such other page as may replace such page 3750 on such system from time to time), or (ii) if on such date no such rate is displayed on Telerate, the arithmetic mean (rounded upwards if necessary to the nearest multiple of one sixteenth of one per cent. (1/16%)), as determined by the parties of offered rates denominated in Dollars for periods of six months which appear on the display designated “LIBOR” on the Reuter Monitor Screen, being the London interbank offered rate administered by ICE Benchmark Administration Limited (or any other person who takes over the administration of that rate, (or such other page as may replace the “LIBOR” page on such system for the purpose of displaying rates of leading reference banks in the London Interbank market) at or about 11:00 a.m. (London time) on the relevant day in question or (iii) if on such date no such rate is so displayed on the Telerate System or the Reuter Monitor System, LIBOR shall be the rate notified to the parties by such bank as they may from time to time jointly select to be the rate at which such bank is offering deposits in US Dollars for periods of six months to leading banks in the London Interbank market in an amount equal to or comparable with the relevant amount at or about 11:00 a.m. (London time) on the relevant day in question.

“LNG” means liquefied natural gas.

“Marshall Islands” means The Republic of the Marshall Islands.

“Material Documents” means the Time Charters, the Shipbuilding Contracts, the Supplementary Construction Agreements, the Corporate Services Agreements, the Supervision Agreements, the Ship Management Agreements, and any material documents entered into in connection with any Debt Financing.

“Reserved Matters” means the matters listed in Schedule 1.

“Shareholder Loan” means any loan made available to the Joint Venture Company or any Vessel Owning Company by a Shareholder or an Affiliate of a Shareholder on behalf of a Shareholder pursuant to this Agreement.

“Shareholders” means, together, Teekay and CLNG (or their respective successors in title to the Shares in the Joint Venture Company) and “Shareholder” means any of them as the context may require.

“Shares” means, in relation to each Company, the ordinary shares or membership interests, as the case may be, in the capital of that Company.

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“Shipbuilding Contract” means, in relation to each Vessel, the shipbuilding contract for the construction of that Vessel made or to be made between the Builder and the relevant Vessel Owning Company referred to below:

Hull Number/Vessel	Vessel Owning Company
2423	DSME Hull No. 2423 L.L.C.
2425	DSME Hull No. 2425 L.L.C.
2430	DSME Hull No. 2430 L.L.C.
2431 2433 2434	DSME Hull No. 2431 L.L.C. DSME Hull No. 2433 L.L.C. DSME Hull No. 2434 L.L.C.

“Ship Management Agreement” means, in relation to each Vessel, the management agreement in respect of that Vessel made or to be made between the Vessel Owning Company and the Ship Manager in the agreed form whereby the Ship Manager manages the Vessel following its delivery to the Vessel Owning Company under the relevant Shipbuilding Contract.

“Ship Manager” means, in relation to each Vessel, the manager of that Vessel being Teekay Shipping Limited or such other entity as may be agreed between Shareholders from time to time.

“Specified Rate” has the meaning ascribed thereto in Clause 15.3.

“Supervision Agreements” means, in relation to each Vessel, the agreement in respect of that Vessel, made or to be made between the Supervisor and the relevant Vessel Owning Company in the agreed form relating to the supervision of construction and plan approval for each of the Vessels.

“Supervisor” means, for the time being, Teekay Shipping Limited (or its Affiliate).

“Supplemental Construction Agreement” means the supplemental construction agreement made or to be made between each Vessel Owning Company and the Charterer in relation to the relevant Shipbuilding Contract of the relevant Vessel.

“TGP” means Teekay LNG Partners L.P. of Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands, MH96960 with business address at 4^th Floor, Belvedere Building, 69 Pitts Bay Road, Hamilton, HM 08 Bermuda and mailing address at Suite No. 1778, 48 Par-la Ville Road, Hamilton, HM11, Bermuda.

“Time Charter” means, in relation to each Vessel, the time charter of that Vessel made or to be made between the relevant Vessel Owning Company purchasing such Vessel as owner and the Charterer as time charterer and, in the event that such time charter is replaced by a bareboat charter in accordance with the terms of time charter, all references herein to the “Time Charter” shall be construed as referring to such bareboat charter.

“Teekay Director” means, in relation to each Company, a Director appointed by Teekay in accordance with this Agreement and the Constitution of that Company.

“Teekay Shipping Limited” means Teekay Shipping Limited of 4^th Floor, Belvedere Building, 69 Pitts Bay Road, Hamilton, HM 08 Bermuda and with its mailing address at Suite No. 1778, 48 Par-la Ville Road, Hamilton, HM11, Bermuda.

“Total Shareholders’ Commitment” means the total amount to be agreed by the Shareholders to contribute towards the total delivered ship cost as equity in each Vessel

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Owning Company and contingent funding for cost overruns, as may be varied by agreement between the Shareholders and the financiers under the Debt Financing, unless otherwise agreed between the Shareholders.

“Vessel Owning Companies” means the Marshall Islands limited liability companies (details of which are set out in Schedule 2), which are wholly owned by the Joint Venture Company.

“Vessels” means the following new building vessels under construction by the Builder with the Builder’s hull numbers specified below, each of which will be acquired under the applicable Shipbuilding Contract and owned by the relevant Vessel Owning Company below:

Hull Number	Vessel Owning Company
2423	DSME Hull No 2423 LLC
2425	DSME Hull No 2425 LLC
2430	DSME Hull No 2430 LLC
2431 2433 2434	DSME Hull No 2431 LLC DSME Hull No 2433 LLC DSME Hull No 2434 LLC

1.2 References to Clauses, Schedules and Appendices are, unless otherwise stated, to clauses of and schedules and appendices to this Agreement.

1.3 Any document expressed to be “in the agreed form” means a document in a form approved by (and for the purpose of identification signed or initialled by or on behalf of) the Shareholders.

1.4 Unless the context otherwise requires, words in the singular include the plural and vice versa.

1.5 References to persons include a corporate entity and anybody of persons, corporate or unincorporate.

1.6 References to any person include such person’s successors and permitted assigns.

1.7 References to any document include the same as varied, supplemented or replaced from time to time.

1.8 Clause headings are for convenience of reference only and are not to be taken into account in construction.

1.9 In this Agreement any reference to an enactment includes a reference to:

(a) that enactment as amended or re-enacted, with or without amendment, whether before this Agreement or not; or

(b) any enactment which that enactment re-enacts, whether with or without amendment; or

(c) any subordinate legislation made under the enactment referred to or under any such enactment as is described in paragraph (a) or (b) of this Clause 1.9;

and a reference to things done or falling to be done under or for the purpose of any enactment shall be construed accordingly.

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1.10 A reference in this Agreement to the service of a notice or other communication, or to the date of such service, shall be construed in accordance with Clause 21.

1.11 A person who is not a party to this Agreement may not enforce or otherwise have the benefit of any provision of this Agreement under the Contracts (Rights of Third Parties) Act 1999 and without limitation, no consent of any such person shall be required for the rescission or amendment of this Agreement, but this does not affect any right or remedy of a third party which exists or is available apart from that Act.

2. AGREEMENT FOR JOINT VENTURE AND WARRANTIES

2.1 The Shareholders agree to operate the Joint Venture Company as a joint venture in accordance with the terms of this Agreement.

2.2 Each Shareholder undertakes with the other that, so long as they hold any beneficial interest in Shares in the Joint Venture Company, they shall do all such acts and things and exercise their respective votes as shareholders of the Joint Venture Company, as appropriate, to ensure that the provisions of this Agreement shall be observed and put into effect for the purpose of the business, operations, management and administration of each Company, and generally use their best endeavours to promote the business and operations of each Company.

2.3 Each Shareholder acknowledges to the other a duty to act in good faith in all the matters and transactions covered by this Agreement.

2.4 Each of the Shareholders represents and warrants to the other that:

2.4.1 it is duly organised and validly existing, and in compliance with the laws of its country of incorporation;

2.4.2 it has the capacity and has taken all necessary actions and has obtained all necessary consents and approvals to enter into this Agreement and the documents to which it is to be party (if any) as specified in this Agreement;

2.4.3 upon execution and delivery, this Agreement and the documents to which it is to be party (if any) as specified in this Agreement will constitute its legal, valid and binding obligations and liabilities enforceable against it in accordance with their respective terms; and

2.4.4 its entry into and performance of its obligations under this Agreement and the documents to which it is to be party (if any) as specified in this Agreement will not involve or lead to a contravention of any applicable statute or regulation of any governmental or official authority or body or other applicable law or of its constitutional documents or any contractual or other obligation or restriction which is binding on it or any of its assets.

2.5 Each Shareholder acknowledges that, in entering into this Agreement, it does not do so in consideration of or in reliance on any representation or warranty by the other Shareholder other than as is contained in this Agreement. Except as expressly provided in this Agreement, all representations and warranties implied by statute or common law are hereby excluded to the fullest extent permitted by law and each Shareholder waives and releases all rights and remedies that it would otherwise have in respect of the same (other than on grounds of fraud).

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2.6 Each Shareholder acknowledges that upon the Vessel Owning Company executing and entering into the Time Charter, such Vessel Owning Company shall be under certain obligations to the Charterer under the terms of the Time Charter. Each Shareholder agrees and acknowledges that it will not take any action in its capacity as a Shareholder which would result in such Vessel Owning Company being in breach of its obligations under the Time Charter.

3. OBJECTS

3.1 The Joint Venture Company shall be the sole owner of all Shares in the Vessel Owning Companies and the business of the Joint Venture Company shall be to ensure that each Vessel Owning Company conducts its business and affairs in accordance with this Agreement and the Material Documents to which it is a party.

3.2 The business of each Vessel Owning Company shall be that of:

3.2.1 supervision of construction and acquisition of the relevant Vessel under the relevant Shipbuilding Contract, and their ownership and operation on long term time charter to the Charterer under the relevant Time Charter, or in employment by charter or otherwise, to such other person or persons as may from time to time be agreed by the Shareholders;

3.2.2 obtaining relevant Debt Financing and granting security to secure such Debt Financing; and

3.2.3 such variation, extension or limitation of those activities as may from time to time be agreed by the Shareholders.

3.3 The Shareholders shall use all reasonable endeavours to ensure that the affairs of the Companies are managed so that, insofar as is reasonably practicable, each Shareholder is kept equally aware of all aspects of the Business of each Company and its activities and has equal access to all information regarding the Business of each Company and its activities, disregarding anything that cannot reasonably be considered material.

3.4 The Business of each Company shall be conducted in the best interests of that Company on sound commercial profit-making principles.

3.5 The Shareholders acknowledge that, for as long as a Vessel remains subject to a Time Charter, the due and punctual performance of the Time Charter by the relevant Vessel Owning Company is, subject always to the applicable law, of paramount concern to such Vessel Owning Company, and the Shareholders will do all such acts and things within their power and exercise their respective votes as Shareholders of the Joint Venture Company (being the sole shareholder of such Vessel Owning Company) to procure such performance and in accordance with this Agreement.

4. SUPERVISION OF CONSTRUCTION AND MANAGEMENT OF VESSELS

4.1 The Shareholders shall procure that each Vessel Owning Company will enter into a Supervision Agreement with the Supervisor in substantially the form set out at Schedule 4 whereby the Supervisor will provide services including plan approval and supervision of the construction and completion of each Vessel. The fee for supervision services payable to the Supervisor pursuant to the Supervision Agreements shall be on a cost basis, flow through of actual expenses incurred by Supervisor to be paid in advance based on budgeted amount with later reconciliation of actual costs.

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4.2 The Shareholders shall procure that each Company will enter into the Corporate Services Agreement in substantially the form set out at Schedule 5 whereby the Corporate Services Provider will provide administrative and corporate services to each of the Companies. The fee for corporate services payable to the Corporate Services Provider shall be US$125,000 per annum per Company and in respect of the Joint Venture Company, payable from 1^st January 2015 cumulatively increased on an annual basis on 1^st January each year by 2.5% (commencing 1^st January 2015), and in respect of each Vessel Owning Company, payable from the date of steel cutting of the relevant Vessel to be owned by that Vessel Owning Company, cumulatively increased on an annual basis on 1^st January each year by 2.5% commencing on 1^st January 2015.

4.3 The Shareholders shall procure that each Vessel Owning Company will enter into a Ship Management Agreement in substantially the form set out in Schedule 6 whereby Ship Manager will, from delivery of such Vessel by the Builder, technically manage such Vessel. The fee for ship management services payable to the Ship Manager shall be US$500,000 per annum per Vessel cumulatively increased on an annual basis on 1st January in each year by 3% payable six months prior to the delivery date of the relevant Vessel ((the 1st such increase occurring on 1st January 2015 regardless of date of delivery of the Vessel). For the avoidance of doubt, the management fee mentioned aforesaid (including its 3% increasing rate in each year) is part of the “management fee” item of Opex Element (as defined in the Time Charter) of hire under the Time Charter in respect of the relevant Vessel.

4.4 In consideration of the Project being awarded to the Consortium on the basis of Teekay’s pre-qualification criteria and successful bid process, the Vessel Owning Companies shall pay to Teekay a success fee equivalent to 1% of the Capex Rate starting from the date of delivery of such Vessel Owning Company’s respective Vessel payable annually in arrears for the first two years then quarterly in advance thereafter on receipt of an invoice from Teekay to each Vessel Owning Company. The fee will be payable by each Vessel Owning Company throughout the Initial Charter Period (as defined in the Time Charter) at all times regardless of any off-hire period under the respective Time Charter. For the purposes of this Clause “Capex Rate” means the Capex Element for each Vessel as defined in clause 2.1 of Appendix II of the Time Charter.

5. PRELIMINARY MATTERS

5.1 On or as soon as practicable after the date hereof or at the time otherwise specified below, the Shareholders shall take or cause to be taken the following actions (to the extent that the same have not already been taken):

5.1.1 the Shareholders will procure that meetings of the Board, and (if appropriate) the members, of each Company, are held at which:

(a) the accounting reference date of each Company is fixed as 31 December in each year;

(b) KPMG are appointed as the auditors of each Company;

(c) a bank as agreed between the Shareholders is appointed as the banker to each Company, a resolution in the form required by that bank is passed and the appropriate mandate is completed;

(d) the Constitution of each Company is amended (where necessary) so as to be consistent with the provisions of this Agreement;

(e) the execution by each Vessel Owning Company of each Time Charter is approved

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(f) the execution by each Vessel Owning Company of each Ship Building Contract is approved

(g) the execution by each Vessel Owning Company of each Supplemental Construction Agreement is approved

(h) the execution by each Vessel Owning Company of the Supervision Agreement is approved;

(i) the execution by each of the Companies of the Corporate Services Agreement is approved;

(j) the execution by each Vessel Owning Company of each Ship Management Agreement is approved; and

(k) any other actions or matters necessary to give effect to this Agreement are approved or executed.

6. WORKING CAPITAL AND FINANCE

6.1 The Shareholders agree that funds for the purchase of the Vessels and for working capital and operating expenses of the Companies shall be provided from:

6.1.1 the Shareholders’ equity contributions;

6.1.2 Shareholder Loans;

6.1.3 other external borrowing; and

6.1.4 the resources of the Companies;

as may be agreed by the Shareholders.

6.2 Each Shareholder will provide, or will procure that an Affiliate nominated by it will provide, funding by way of Shareholder Loans and/or guarantees or securities in its respective Agreed Proportion by reference to the total Shareholder Loans to the relevant Company:-

6.2.1 as may be required to ensure the due and punctual performance by the Company of the Time Charter or otherwise required pursuant to the Time Charter to satisfy any additional expenditure of any kind related to the Vessel as provided in Clause 3.5;

6.2.2 as may be agreed in any Annual Budget or as provided in Clause 6.3;and/or

6.2.3 as may be requested by the Company in accordance with Clause 6.8.

No Shareholder (nor any Affiliate nominated by it in accordance with Clause 6.2) will be obliged to contribute in aggregate by way of additional funding and/or by the provision of guarantees or securities on behalf of the Company an amount in excess of its Agreed Proportion of Total Shareholders’ Commitment (or such other Dollar amount as the Shareholders may agree).

The commitment of the Shareholders to provide additional funding in the Agreed Proportions as provided in this Clause 6.2 and Clause 6.3, will apply only while the Time Charter remains in force.

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6.3 For the purpose of determining whether a Shareholder’s Agreed Proportion of the Total Shareholders’ Commitment has been or will be exceeded, the principal amount of a Shareholder’s contingent liability under any such guarantee or security which is outstanding for the time being will be aggregated with the amount of all Shareholder Loans or other amounts made available by that Shareholder by way of additional funding to the Company, but will be disregarded once such guarantee or security has been released or discharged. An amount paid by a Shareholder pursuant to any claim under such guarantee or security will be deemed to be a Shareholder Loan in that amount to the Company on whose behalf the guarantee or security was provided.

6.4 The Shareholders agree to cooperate in arranging debt financing to part fund the purchase, owning and management of the Vessels with the intention that such financing should be on a non-recourse or limited recourse basis and for 70% - 80% of the delivered cost of each Vessel (the “Debt Financing”). CLNG will endeavour to assist the Joint Venture Company and the Vessel Owning Companies in obtaining Debt Financing from Chinese banks and international banks on the most favourable terms. The Shareholders have appointed Société Générale S.A. to act as financial advisor to assist the Joint Venture Company with obtaining Debt Financing. All costs incurred in connection with obtaining the Debt Financing including the fees payable to Société Générale S.A. including those incurred during the bid process in accordance with the mandate letter dated 29^th October 2013 from Société Générale S.A. to, and accepted by Teekay on 31^st October 2013 shall be for the account of the Shareholders in proportion to their Agreed Proportions.

6.5 Unless otherwise agreed by the Shareholders, Shareholder Loans:

6.5.1 shall be subordinated to any loans obtained from external sources;

6.5.2 shall be secured on the assets of the Companies on a pari pasu and pro rata basis to the extent permitted by any external lenders;

6.5.3 shall accrue interest at the rate of three hundred per cent (300%) per annum above LIBOR compounded at six-monthly intervals if not paid; and

6.5.4 shall be repayable to the Shareholders on a pari passu basis only out of the distributable profits of the Joint Venture Company in priority to any dividend or other distribution, at such times as may be agreed by all the Shareholders or otherwise on the liquidation of the Joint Venture Company.

6.6 The provisions of Clause 6.5 shall apply, mutatis mutandis, to amounts on-lent by the Joint Venture Company to each Vessel Owning Company except that the reference to the Shareholder shall be construed as a reference to the Joint Venture Company.

6.7 The Shareholders’ Loans will be made available by the Shareholders by way of cash advances to the Joint Venture Company and/or by the Joint Venture Company by way of cash advances to the relevant Vessel Owning Company in Dollars and in such funds as may be customary at the time for settlement of transaction in Dollars in the place of payment for value not later than the day on which banks are open for business in New York City immediately preceding the date upon which the relevant payment is due to be made, provided that at least ten (10) Business Days’ written notice of the requirement of funds, and the amount required, is given to each of the Shareholders by the Joint Venture Company in a notice signed with the authority of the Board of the Joint Venture Company by at least one Teekay Director and one CLNG Director and provided further that the Joint Venture Company shall contemporaneously be requesting Shareholder Loans from both Shareholders in the Agreed Proportions of the aggregate amount required by the Joint Venture Company.

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6.8 Without prejudice to Clause 15 the Shareholders further agree that if Shareholder Loans are to be made available and sufficient written notice has been given of the due date as provided in Clause 6.7, and any one of the Shareholders (the “defaulting party”) fails to make or to procure that its Affiliate makes the necessary advance in the amount or at the time specified in Clause 6.7 or as otherwise provided herein, then without prejudice to any other rights of the other Shareholder, such other Shareholder may advance the amount in default to the Joint Venture Company, on behalf of the defaulting party, and the amount in question shall be deemed to be a debt due from the defaulting party to such other Shareholder. Such other Shareholder (the “non-defaulting party”), will not be obliged to make the advance in question and its rights to terminate this Agreement due to the default of the defaulting party in accordance with Clause 15 shall remain unchanged if it decides not to advance such amount in question. In the event of such an advance, the non-defaulting party shall be entitled to recover the amount so advanced together with interest accrued from the defaulting party as a debt due from the defaulting party and repayable upon demand, upon which interest shall be calculated at the rate of five hundred per cent. (500%) per annum above LIBOR (both before and after judgment) from the date of such advance to the date of actual payment, and all interest shall be compounded semi-annually.

6.9 Where the Shareholders (or their Affiliates) (the “Guarantors”) give any guarantee or indemnity on behalf of a Company (a “Relevant Security”), they shall do so in the Agreed Proportions in respect of that Company, and their liability shall be several, and not joint or joint and several, unless otherwise agreed. If a Guarantor incurs any liability, that Guarantor shall be entitled to a contribution from the other Guarantor to ensure that the aggregate liability of the Guarantors is borne by the Guarantors in the Agreed Proportions in respect of the relevant Company. Without prejudice to the foregoing, where any Shareholder or any Affiliate of a Shareholder (a “Relevant Guarantor”) gives a Relevant Security in respect of the obligations of any Company but the other Shareholder does not do so, then (provided always that the giving of such Relevant Security has previously been approved by such other Shareholder, such approval not to be unreasonably withheld or delayed) if the Relevant Guarantor is required to make any payment under the Relevant Security, such Relevant Guarantor shall be entitled to a contribution from the other Shareholder to ensure that the liability under such Relevant Security is shared by the Shareholders in the Agreed Proportions. The provisions of this Clause 6.9 take effect subject to the provisions of Clause 6.10. Any called guarantee or security provided by a Shareholder or its Affiliate(s) shall be treated as a Shareholder Loan so that Clause 6.5 shall apply.

6.10 Where a Relevant Security is given the following provisions shall apply:

6.10.1 The Relevant Guarantor will:

(a) not agree any amendment to the terms of the Relevant Security or waive any of the Relevant Guarantor’s rights under the Relevant Security without, in either case, the other Shareholder’s prior written approval;

(b) promptly notify the other Shareholder in writing if any claim or demand is made of the Relevant Guarantor under the Relevant Security, giving the other Shareholder a copy or copies of the same;

(c) not, prior to the first date on which it is legally obliged to do so, pay or settle or admit any liability under the demand or claim (or otherwise in relation to the Relevant Security) without the prior written consent of the other Shareholder (such consent not to be unreasonably withheld or delayed);

(d) if reasonably requested to do so by the other Shareholder in circumstances where reasonable grounds to do so exist, contest the claim or demand by appropriate proceedings with lawyers approved by the other Shareholder in

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writing (such approval not to be unreasonably withheld or delayed), provided always that the other Shareholder shall reimburse the Relevant Guarantor for its Agreed Proportion of all costs and expenses (including, without limitation, legal costs and taxes thereon) incurred by the Relevant Guarantor in pursuing such contest;

(e) to the extent that it can do so without breaching any confidentiality obligations binding on it, keep the other Shareholder fully informed as to the conduct of any proceedings in relation to any claim or demand or otherwise in relation to the Relevant Security, and not take any major step in the same without the written approval of the other Shareholder (such approval not to be unreasonably withheld or delayed);

6.10.2 The obligation of the other Shareholder to make its contribution to the Relevant Guarantor is also subject as follows:

(a) without limitation to Clause 6.10.1(c), if, prior to the Relevant Guarantor’s making a request for a contribution from the other Shareholder, the Relevant Guarantor has paid the beneficiary of the Relevant Security in whole or in part, the Relevant Guarantor’s providing the other Shareholder with satisfactory evidence of such payment; and

(b) the other Shareholder’s right, in the event that the Relevant Guarantor has not provided the other Shareholder with satisfactory evidence that the Relevant Guarantor has paid the relevant amount claimed or demanded under the Relevant Security in full, to pay such amount as it may consider appropriate to the beneficiary of the Relevant Security direct, which shall be deemed, to the extent of the payment made, to be a good discharge of that Shareholder’s liability to contribute to the Relevant Guarantor in respect of such claim or demand.

7. NUMBER OF DIRECTORS

7.1 For so long as this Agreement is in force each Company shall have four (4) Directors.

7.2 For so long as this Agreement is in force each of the Shareholders shall be entitled to appoint the number of Directors of each Company in office at any one time as is found by multiplying the maximum number specified in Clause 7.1 by the Agreed Proportion of that Shareholder, rounded to the nearest whole number. On the basis that the Agreed Proportions are Teekay: 50% and CLNG: 50%, the number of Directors of each Company to be appointed by them is:

7.2.1 in the case of Teekay, up to two (2) Directors; and

7.2.2 in the case of CLNG, up to two (2) Directors

7.3 Each of the Shareholders shall likewise be entitled to remove any of such Directors appointed by it and appoint another person in his place. Any such appointment or removal of a Director shall be effected by an instrument in writing signed by the relevant Shareholder or on its behalf by a duly authorised representative and shall take effect subject to the person so nominated signing a consent to act, upon presentation at the meeting of the Board or, if later, the date specified in the instrument.

7.4 The respective rights of appointment of Directors granted to each of the Shareholders under Clause 7.2 shall, unless otherwise agreed by the Shareholders, be transferred automatically to any person acquiring all of the beneficial ownership of its Shares in the Joint Venture Company pursuant to any transfer of those Shares made in accordance with this Agreement. At the time of completion of any such transfer of the Shares held by the transferring Shareholder, it shall remove the Directors of each Company appointed by it.

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7.5 The Board of each Company may request such information as it may reasonably require in order to satisfy itself that an appointment or removal made under Clause 7.2 or 7.3 has been made by a person or persons entitled to do so and, if not so satisfied, may reject such appointment or removal.

7.6 The Shareholder removing the Director shall indemnify the relevant Company against any claim arising in connection with that Director’s removal from office and such Shareholder shall promptly replace such removed Director.

7.7 Each Director shall have the right, by written notice to the relevant Company, to appoint and remove an alternate to attend or vote in place of such Director at any meeting of the Board of that Company. Such alternate may be a permanent appointment which shall be expressed to take effect in all circumstances. All such alternates shall be entitled to receive notices of all meetings of the Board of the relevant Company. If an alternate is appointed for a specific meeting, then notice of the appointment of such alternate must be received by the relevant Company before commencement of the meeting in question. If any person should cease to be a Director of any Company for any reason, then the appointment by such person of an alternate shall cease to be effective immediately upon such person ceasing to be a Director of that Company.

7.8 Each Shareholder shall indemnify and hold each Company harmless from and against any fraudulent or dishonest act or omission by any Director of that Company appointed by it.

8. MANAGEMENT OF THE COMPANIES

8.1 The overall management and operation of the Business of each Company shall be carried out by its Board, subject to:

8.1.1 the requirements of Clause 10; and

8.1.2 any requirement of the Constitution of any Company or of applicable law that the relevant action be specifically approved by resolution of the shareholders of that Company, and subject always to the terms of this Agreement.

8.2 The Shareholders shall procure that the Board of each Company meets not less than once every six (6) months and at such other times as either Shareholder shall request, at such venue as the Board may agree, having due regard to the Company’s tax residence, and that a written agenda specifying the matters to be raised at any Board meeting of that Company shall (either together with the notice convening the meeting or not less than fourteen (14) days prior to the date of the meeting) be sent to all Directors of that Company entitled to receive notice of such meeting, and that the Board of each Company gives proper and adequate consideration to any matters raised by any of the Shareholders at any meeting of that Board.

8.3 The quorum necessary for the transaction of business at any meeting of the Board of each Company shall be two (2) Directors, one of which shall be a Teekay Director and the other a CLNG Director and the Shareholders shall procure that at least one of its nominated Directors (or his alternate) shall be present in person or by proxy or by telephone conference as will be necessary to from a quorum at each meeting. A person who holds office as an alternate Director, shall, if his appointer is not present, be counted in a quorum. Any of the requirements of this Clause 8.3 may be waived by either Shareholder in relation to any meeting of the Board of any Company by its giving express notice in writing to that effect to that Company and the other such Shareholder.

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8.4 At any meeting of the Board of any Company the Director or Directors nominated by a Shareholder attending such meeting (whatever the number of those Directors present) shall collectively have one vote for each share in the Joint Venture Company then held by the Shareholder which nominated him or them. Subject to Clause 10, such Company’s Constitution and to the requirements of any applicable law that the relevant resolution be passed by the shareholders of the Company, matters presented to the Board of a Company shall be approved upon receiving the affirmative vote of a simple majority of such votes of the Directors (or their alternates) present and voting at a meeting of that Board duly convened and held.

8.5 The right to appoint the Chairman of the Board of each Company will alternate between the parties every three years, starting with Teekay. The Chairman will not have any second or casting vote.

8.6 Subject to applicable law, a resolution in writing signed by each of the Directors (or their respective alternates) entitled to receive notice of a meeting of the Board shall be as valid and effective for all purposes as a Board resolution passed at a Board meeting of the Company duly convened, held and constituted provided that when a Director has signed a resolution by fax, the original of the signed copy shall be deposited with the Company in its registered office or such other office as the Company may designate for this purpose from time to time by such Director as soon as possible thereafter. Any such resolution may consist of several counterparts, provided that each such counterpart is signed by all the Directors.

8.7 The Shareholders shall take such steps as lie within their power:

8.7.1 to ensure that the Board of each Company performs its functions on a timely basis; and

8.7.2 to ensure that a quorum is present at each meeting of the Board of each Company in accordance with this Agreement and that Company’s Constitution.

8.8 Nothing in this Agreement shall be construed so as to derogate from the fiduciary obligation of the Directors of each Company to act in the best interests of that Company.

8.9 Each Company shall, and each Shareholder shall use all rights and powers available to it in every capacity to procure that each Company shall:

8.9.1 keep accurate and complete books of account and other business records in accordance with the requirements of all applicable laws and GAAP;

8.9.2 prepare consolidated and [individual] [company specific] management accounts on a quarterly basis and despatch such accounts to each of the Shareholders within twelve (12) Vancouver business days of the end of the period in question;

8.9.3 in the case of the Joint Venture Company prepare consolidated annual accounts and arrange for their audit by the auditors (as may be agreed from time to time between the Shareholders) despatch such audited accounts to each of the Shareholders within ninety (90) days of the end of the year in question;

8.9.4 carry on and conduct its Business and affairs in a proper and efficient manner in accordance with all applicable legal requirements and with the provisions of its Constitution and this Agreement;

8.9.5 conduct its dealings on commercial arm’s length terms and in particular, but without limitation, not pay any remuneration or expenses to any person other

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than as proper remuneration for all the services provided or as proper reimbursement for expenses incurred in connection with its Business, including without limitation, all services provided and expenses incurred under the Ship Management Agreements, Supervision Agreements, Corporate Services Agreement and the Shipbuilding Contracts or in connection with the success fee as set out in Clause 4.4 above;

8.9.6 obtain and maintain from time to time all authorisations required from governmental entities which may be at any time required under the laws of its place of incorporation or in the jurisdictions in which that Company conducts its Business; and

8.9.7 pay all taxes, assessments and other governmental charges of any kind imposed on it or in respect of its income, gains or any of its businesses or assets or in respect of taxes or other amounts it is required by law to withhold from amounts paid by it to its employees or any other person before any penalty or interest accrues on the amount payable and before any lien on any of its property exists as a result of non-payment, except insofar as the Company is diligently contesting its alleged obligation to pay the amount concerned in good faith through appropriate proceedings and maintains appropriate reserves or other provisions in respect of the contested amount as may be required under applicable accounting policies; and

8.9.8 procure that a “check the box” election on form 8832 is made for each of the Companies within 75 days of the formation of such Company which will cause such Company to be treated as a partnership for U.S. tax purposes from its date of incorporation.

8.10 Each Shareholder shall promptly notify the other as soon as it becomes aware of:

8.10.1 the occurrence of any event which constitutes a default or event of default or any event which with the giving of notice or lapse of time or the satisfaction of any other condition (or any combination thereof) would constitute a default or event of default, under any indebtedness of any Company;

8.10.2 any litigation or governmental proceeding pending against any Company which can reasonably be expected to affect materially and adversely the assets, liabilities, operations, condition (whether financial or otherwise) or prospects of any Company; and

8.10.3 any other event which is likely to affect materially and adversely the assets, liabilities, business, operations, condition (whether financial or otherwise) or prospects of any Company.

8.11 The Shareholders and their authorised representatives shall each have the right to inspect the books and records of each Company on reasonable notice during normal business hours and shall have the right (at their own expense) to take away copies of or extracts from all such books and records. Either Shareholder shall have the right, on reasonable notice, to require that the books and records of any Company be audited (at the expense of that Shareholder) by a firm of independent auditors nominated by that Shareholder, and the Shareholders shall ensure that such firm is given such cooperation as may be necessary to enable it to perform the audit. The Shareholder commissioning the audit shall provide a copy of the audit report to the other Shareholder.

8.12 CLNG shall have the right to second one person to the office of the Corporate Service Provider to perform the corporate services of any Company in any respect as CLNG deems

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necessary. Teekay shall procure that the Corporate Service Provider will provide suitable office, transportation, accommodation and access to all required information and materials to such person. CLNG will also send one to two persons as Authorised Representative(s) (as defined under the Shipbuilding Contract) to the Builder’s yard. Teekay shall procure that the Supervisor shall ensure equal treatment of such person(s) with other Authorised Representatives appointed by the Supervisor in terms of office condition, transportation and accommodation. All costs in connection with such seconded person(s) or authorized representatives appointed by CLNG shall be for CLNG’s account.

8.13 The quorum necessary for the transaction of business at any meeting of the shareholders of the Joint Venture Company shall be two (2) Shareholders (of which Teekay shall be one and CLNG shall be the other) present in person or by proxy. Subject to Clause 10 and to the requirements of any applicable law, resolutions of the shareholders of the Joint Venture Company shall be adopted by a simple majority of the votes cast (each Shareholder having one vote for each Share held in the Joint Venture Company) at such meeting on such resolutions.

9. BUDGETS

9.1 Each Company will have a budget in respect of all anticipated income and expenses of the Company for each financial year (the “Annual Budget”).

9.2 The first Annual Budget for each Company shall be prepared and agreed between the Shareholders before 31 December 2014 or such other time the Shareholders may agree. Each Annual Budget subsequent to the first shall be prepared as follows:

9.2.1 The Joint Venture Company shall procure that whichever of the Ship Manager and the Corporate Services Provider which is then responsible for such task prepares a draft budget, which shall be ready not later than 1 November in the year preceding that to which it relates.

9.2.2 The budget shall contain the following:

(a) an operating budget (including estimated capital expenditure requirements) and balance sheet forecast;

(b) an estimate of the working capital requirements contained in a cashflow statement, including the amount of the drydock reserve;

(c) a projected profit and loss account;

(d) an indication of the amount (if any) which it is considered prudent to retain out of the previous financial year’s distributable profits to meet the working capital requirements;

(e) a statement of business objectives for the year; and

(f) a report by the finance manager of each Company, which shall include an analysis of the results of that Company as shown in its annual accounts compared with the Annual Budget for the previous year;

and otherwise shall be in the form set out in Schedule 3 of this Agreement.

9.2.3 The draft budget prepared under Clause 9.2.1 shall then be reviewed by and approved by the Board of the relevant Company (with any corrections it considers necessary) as the Annual Budget.

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10. RESERVED MATTERS

10.1 Subject to Clauses 10.2 and 15.11, but notwithstanding any other provision of this Agreement, no action may be taken by or in relation to any Company in relation to a Reserved Matter without the agreement of all the Shareholders. Each Shareholder may give its agreement, as may be appropriate, either:

10.1.1 in writing by its authorised representatives;

10.1.2 by the Director or Directors representing it on the Board of the relevant Company; or

10.1.3 by its authorised representative in its capacity as a member of the Joint Venture Company at a general meeting of the Joint Venture Company.

10.2 For avoidance of doubt, where in this Agreement it is provided, as the case may be, that a particular matter is agreed by the Shareholders or that a Company shall take a particular action, then notwithstanding the provisions of Schedule 1, it shall not be necessary that all the Shareholders give their further agreement to such matter or the taking of such action.

10.3 Each Shareholder shall provide to the other from time to time details of the persons authorised to represent it and of their respective powers to bind that Shareholder, and of any revocation or restriction of their authority.

11. TRANSFER OF SHARES IN THE JOINT VENTURE COMPANY

11.1 No Shareholder shall without the prior written consent of the other Shareholder (such consent being valid for 20 Business Days), sell, assign, transfer, give, donate, or otherwise dispose of or grant a security interest over any of its Shares or Shareholder Loans in the Joint Venture Company or any portion thereof or any right or interest therein now held or hereafter acquired except in accordance with the provisions of this Clause 11 or Clauses 15 and 17.

11.2 It is a condition precedent to any transfer of any Shares or assignment of any Shareholder Loans to a person not already a party to this Agreement that such person agrees in writing by deed in a form reasonably satisfactory to the parties to be bound by the terms of this Agreement prior to such transfer becoming effective.

11.3 Any transfer or purported transfer made otherwise than in accordance with the provisions of this Clause 11 or Clauses 15 and 17, shall be void and of no effect whatsoever and the parties shall procure that the management shall not register the same.

11.4 If at any time either Shareholder (the “Selling Shareholder”) wishes to sell, assign, transfer, give, donate or otherwise dispose of all (but not part only) of its Shares (the “Offered Shares”) and all (but not part only) of its Shareholder Loans (the “Offered Loans” and together with the Offered Shares, the “Offered Interests”) the Selling Shareholder shall first deliver written notice (“Notice of Sale”) to the other party (the “Non-Selling Shareholder”) of its intention to sell the Offered Interests. A Notice of Sale shall name the proposed transferees (if any), specify the price (if any) offered by a third party per Offered Share (the “Share Price”) and per $1 outstanding on the Offered Loans (the “Loan Price”), the terms of payment including but not limited to replacement of the Selling Shareholder’s owner guarantee provided in accordance with the Time Charter and the Shipbuilding Contract, and other relevant terms and conditions, and shall have attached thereto, if relevant, a copy of any bona fide arm’s length offer made by a third party (a “Bona Fide Offer”) in respect of the Offered Interests.

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11.5 In response to the Notice of Sale, the Non-Selling Shareholder must exercise one of the following two options, which must be communicated to the Selling Shareholder within 60 Business Days of the date of receipt of the Notice of Sale:

(a) to refuse the transfer to a third party and purchase the Offered Interests itself at the Fair Market Value, and, if relevant, otherwise on terms no less favourable to the Non-Selling Shareholder than those constituting the Bona Fide Offer (save that the Selling Shareholder shall not be required to give any warranties or indemnities to the Non-Selling Shareholder, other than as specified in Clause 11.11 below);

The right of first refusal contained in option (a) above shall be exercised within 30 Business Days after the date of receipt of the Notice of Sale, within which period the Non-Selling Shareholder, if it wishes to acquire the Offered Interests, must deliver to the Selling Shareholder written notice of the Non-Selling Shareholder’s election (an “Election”) to purchase the Offered Interests, such election stating whether or not the Non-Selling Shareholder requires the Fair Market Value to be determined in accordance with Clause 11.8 below.

(b) to consent to the transfer of the Offered Interests to a third party.

If the Non-Selling Shareholder fails to give notice to the Selling Shareholder of its Election within a period of 60 Business Days after the date of receipt of the Notice of Sale, he will be deemed to have chosen option (b) above.

If the Non-Selling Shareholder, in accordance with this Clause, has given notice to the Selling Shareholder of its consent to the transfer of the Offered Interests to the proposed transferee, the Selling Shareholder shall have the right to sell the Offered Interests within a period of 20 Business Days from the date of receipt of the notice from the Non-Selling Shareholder on terms no more favourable for the transferee than the terms offered to the Non-Selling Shareholder.

11.6 If an Election is made within the period referred to in Clause 11.5 in respect of all of the Offered Interests, the Non-Selling Shareholder shall be obliged to purchase, and the Selling Shareholder shall be obliged to sell to the Non-Selling Shareholder, notwithstanding his right to revoke the Election in accordance with the terms of this Agreement, the Offered Interests at the Fair Market Value and otherwise, if relevant, on the terms specified in Clause 11.4 within 10 Business Days of the date of the determination of the Fair Market Value under Clause 11.8.

11.7 Completion of the purchase and sale of the Offered Interests pursuant to an Election shall take place at the principal office of the Company (or such other location as may be agreed upon by the Selling Shareholder and the Non-Selling Shareholder) within 10 Business Days of the date of determination of the Fair Market Value under Clause 11.8 when:

(a) the Selling Shareholder and the Non-Selling Shareholder shall record the transfer of the Offered Shares in the share register of the Company and both parties shall sign such share register;

(b) the Selling Shareholder shall deliver to the Non-Selling Shareholder a duly executed assignment in respect of the Offered Loans and the certificate(s) representing the Offered Shares (if any);

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(c) the Non-Selling Shareholder purchasing the Offered Interests shall deliver to the Selling Shareholder the consideration for the Offered Interests calculated at the Fair Market Value and otherwise, if relevant, on the terms specified in Clause 11.4;

(d) the Non-Selling Shareholder shall procure the release of the Selling Shareholder or such Selling Shareholder’s Guarantor from any guarantees, indemnities or other undertakings given by it in respect of the obligations of the Joint Venture Company or any of the Vessel Owning Companies and, pending such release shall indemnify and keep indemnified the Selling Shareholder against any liability incurred by the Selling Shareholder under or in respect of any such guarantee, indemnity or undertaking;

(e) the Selling Shareholder shall procure the removal of any Director appointed by it to the Company;

(f) the Selling Shareholder shall pay all amounts owed by it or any of its Affiliates to the Company or any of its Affiliates;

(g) the parties shall do all such other things and execute such other agreements and documents as may reasonably be required to give effect to the sale and purchase of the relevant Offered Interests; and

(h) subject to payment by the Non-Selling Shareholder of any relevant stamp duties, the Non-Selling Shareholder (or such person as it may direct) shall be noted as assignee of the Offered Loans and registered as holder of the Offered Shares.

11.8 For the purposes of this Clause 11, the “Fair Market Value” shall mean:

(a) if a Share Price and/or Loan Price is specified under Clause 11.4 and the Election does not require the Fair Market Value to be determined in accordance with Clause 11.8(b), the relevant Share Price and/or Loan Price;

(b) if no Price is specified under Clause 11.4 or the Election requires the Fair Market Value to be determined in accordance with this Clause 11.8(b), the price per share and/or per $1 outstanding of the Offered Loans:

(i) agreed between the Selling Shareholder and the Non-Selling Shareholder who has made an Election within 10 Business Days of the end of the period for making an Election specified in Clause 11.5 as the Share Price and/or Loan Price; or

(ii) failing agreement in accordance with Clause 11.8(b)(i) determined, at the request of the Selling Shareholder or the Non-Selling Shareholder, to be the fair market value of the Offered Interests determined by the Auditors in accordance with Clause 11.9. In the event that the Auditors are not permitted to determine the Fair Market Value due to regulatory restrictions, an independent auditor from an international audit firm shall be appointed.

A Non-Selling Shareholder who has made an Election shall only be entitled to revoke the same if it is dissatisfied with the Fair Market Value determined under Clause 11.8(b)(ii) within 5 Business Days of such determination.

11.9 In determining the Fair Market Value, the Auditors shall:

(a) take account of the net asset value of the Company as a going concern and such other matters as they may consider to be relevant;

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(b) take no account of the proportion which the Offered Shares bear to the then issued share capital of the Company or which the Offered Loans bear to the aggregate of the Shareholder Loans; and

(c) be considered to be acting as experts and not as arbitrators.

11.10 Each party shall supply the Auditors with such information as they may reasonably require for the purposes of making a determination under Clause 11.9. The cost of such determination shall be borne by the Selling Shareholder and the Non-Selling Shareholder in equal proportions.

11.11 All Shares or Shareholder Loans sold by one Shareholder to the other Shareholder pursuant to the provisions of this Clause 11 or Clauses 15 and 17 shall be sold with full title guarantee together with all rights conferred thereon and free from all Security Interests or other adverse interests, rights, equities, claims or potential claims of any description.

11.12 The Selling Shareholder hereby appoints the Non-Selling Shareholder purchasing any Offered Shares (or any Director nominated by that Shareholder) irrevocably, and by way of security for the performance of the Selling Shareholder’s obligations under this Clause 11, as its attorney or attorneys to execute any agreement or document required to be executed by the Selling Shareholder under this Clause 11 including, without limitation, any transfer of Offered Shares, provided always that this power of attorney shall not apply in favour of any such Non-Selling Shareholder who has failed to tender payment for the relevant Offered Shares or to comply with any of its other obligations under this Clause 11.

11.13 Subject to the provisions of Clause 11.2, the provisions of this Clause 11 shall not apply to any transfer of Shares:

(a) mutually consented to in writing by each of the Shareholders, such consent being valid only for a period of 20 Business Days; or

(b) by either Shareholder to any Affiliate of that Shareholder, provided that if such transferee pursuant hereto shall cease to be an Affiliate of that Shareholder, that Shareholder shall procure that such transferee shall, transfer any Shares held by it to that Shareholder or another Affiliate of that Shareholder.

11.14 Notwithstanding the above no transfer of Shares shall be permitted or consented to without consent of Charterer where such proposed transfer would constitute a change of control as defined in the Time Charters.

11.15 (a) Notwithstanding the above, Teekay shall be permitted to transfer the Shares in the Joint Venture Company then held by it (the “Teekay Shares”) to CLNG or its Affiliate where a Sanctions Event (as such term is defined in each of the Time Charters) has occurred and, following a consultation period between the relevant Vessel Owning Company and the Charterer in accordance with clause [    ] of each of the Time Charters, it is determined that such transfer of the Teekay Shares will remove the effect of the Sanctions Event.

(b) The price payable by CLNG or its Affiliate for the Teekay Shares (the “Purchase Price”) will be the delivered cost of each Vessel amortized to a $30 million scrap assuming a useful life from actual date of Delivery of the Vessel until 31^st December 2045, less the book value of outstanding debt of each Company, adjusted for the fair market value of other assets or liabilities in each Company on the day of transfer, multiplied by Teekay’s respective Agreed Proportion. For the purposes of this Subclause ‘fair market value’ means the highest price available in an open and unrestricted market between informed and prudent parties, acting at arm’s length and under no compulsion to act, expressed in terms of money or money’s worth. Should such transfer of Teekay Shares take place prior to delivery of a

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Vessel, the value attributed to that Vessel for the purposes of calculating the Purchase Price shall be the value of the Losses as such term is defined in the Undertaking given by the Charterer to each of the Vessel Owning Companies pursuant to the respective Time Charters.

(c) Following such transfer of Teekay Shares, in the event that a Sanctions Event is no longer applicable, CLNG or its Affiliate, as the case may be, shall as soon as practicable transfer the Teekay Shares, or such proportion of the Teekay Shares as may be agreed between Teekay and CLNG, to Teekay. The price payable by Teekay shall be the Purchase Price calculated on the day of transfer. Where the Teekay Shares have been transferred to CLNG or its Affiliate, neither CLNG nor its Affiliate, as the case may be, shall be permitted to transfer the Teekay Shares, other than to Teekay, without the prior consent of Teekay.

(d) In the event that it is determined that a transfer of Teekay Shares to CLNG or its Affiliate will not remove the effect of the Sanctions Event or [CLNG is unable to accept a transfer of the Teekay Shares], Teekay shall be permitted, subject to the consent of the Charterer, to transfer the Teekay Shares to a third party not impacted by a Sanctions Event (the “Transferee”) in accordance with this Clause 11, save that Clauses 11.4, 11.5 and 11.6 shall not apply. Following such transfer of Teekay Shares, in the event that a Sanctions Event is no longer applicable, the Transferee shall be obliged to, and as soon as practicable, transfer the Teekay Shares to Teekay in accordance with the terms of this Clause 11, save that Clauses 11.4, 11.5 and 11.6 shall not apply and consent of CLNG to such transfer shall not be required. CLNG shall procure that the Transferee shall not be permitted to transfer the Teekay Shares without the prior consent of Teekay.

(e) Where a Sanctions Event prevents Teekay Shipping Limited from performing its obligations as Ship Manager, or it is unwilling to continue as Ship Manager when a Sanctions Event is applicable, the Shareholders will use reasonable endeavours to procure the consent of the Charterer to CLISCO being appointed as Ship Manager. Teekay will consult with CLISCO to determine any assistance Teekay can provide to CLISCO in its role as Ship Managers including considering the provision of resources to CLISCO from Teekay such as senior office staff and sea staff support on temporary secondment or longer-term employment contract basis.

12. OTHER BUSINESS

12.1 Nothing in this Agreement shall restrict either of Teekay or CLNG or their respective Affiliates from conducting their normal business operations including, but without limitation, sea transportation of LNG and/or other energy related cargoes, or investment in entities doing such business, provided that in carrying on such business that Shareholder or the relevant Affiliate:

12.1.1 shall not abuse its position or any information obtained by it relating to the Business of any Company;

12.1.2 shall not knowingly engage in any practices which are of a commercially unfair nature or which are otherwise likely to harm the Business of any Company; and

12.1.3 shall not be in breach of the relevant Shareholder’s obligations as contemplated under this Agreement.

13. CONFIDENTIALITY

13.1 Neither of the Shareholders shall at any time disclose or make available to any person any information which relates in any way to any business or affairs of any Company or of the

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other Shareholder or any such information which it has acquired as a result of being connected with any Company or the other Shareholder. The Shareholders shall further use all reasonable endeavours to ensure that their Affiliates, each Company and the Affiliates of each Company, and the officers, employees and agents of each of them, shall observe a similar duty of confidence in favour of the Shareholders and the Companies.

13.2 Clause 13.1 does not apply to:

13.2.1 any information already in the public domain other than by virtue of a breach by the disclosing party of Clause 13.1;

13.2.2 a bona fide disclosure on a confidential basis to any Affiliate and, for this purpose, as between the Shareholders,

13.2.3 a bona fide disclosure of information on a confidential basis, between the Shareholders, in connection with the performance of either Shareholder’s obligations under this Agreement;

13.2.4 a bona fide disclosure of information in connection with any actual or prospective proceedings arising out of or in connection with this Agreement provided that the party making the disclosure shall first obtain a written confidentiality undertaking from the recipient(s) of the disclosed information made in terms no less onerous than Clause 13.1 and each party agrees to take all reasonable steps to enforce any confidentiality agreement obtained by it;

13.2.5 a bona fide disclosure of information to a competent judicial, governmental, supervisory or regulatory authority or to inspectors or others authorised by such an authority or by or under any legislation to carry out any enquiries or investigations provided that the party making the disclosure shall inform the recipient(s) of the disclosure of the confidential nature of the information disclosed;

13.2.6 the bona fide disclosure of information required under the rules of any stock exchange on which the shares or securities of either Shareholder (or any of its shareholders or Affiliates for the time being) are listed provided that the party making the disclosure shall inform the recipient(s) of the disclosed information of the confidential nature of the disclosed information

13.2.7 a bona fide disclosure on a confidential basis to the professional advisers, auditors or financiers of the relevant Shareholder or of information which it appears necessary or reasonable for such professional advisers, auditors or financiers to obtain for the purpose of discharging their responsibilities provided that the party making the disclosure shall inform the recipient(s) of the disclosure of the confidential nature of the information disclosed and seek confidential treatment of the information disclosed from such recipient(s);

13.2.8 a bona fide disclosure on a confidential basis to any actual or prospective Debt Finance provider provided that the party making the disclosure shall inform the recipient(s) of the disclosure of the confidential nature of the information disclosed and seek confidential treatment of the information disclosed from such recipient(s).

13.3 The Shareholders acknowledge the value of sharing of technical and operational data and information relating to the Vessels or any of them in order (and only for that purpose) to prevent damage or injury to property or the environment or human health, or otherwise to ensure the safe and efficient operation of vessels of a similar type to the Vessels in which

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directly or indirectly that Shareholder may have an interest from time to time or their compliance with applicable laws and regulations. The Shareholders shall cooperate to seek the agreement of the other owners and operators of vessels for the time being under charter to Charterer or its Affiliates to establish suitable arrangements for the exchange, on a confidential basis, of any technical and operational data and information which may from time to time come into the possession of any of the Shareholders or such owners or operators (except to the extent that they may be restricted from making such disclosure) which may assist (and only for that purpose) to ensure the safe and efficient operation of the Vessels and such other vessels or their compliance with applicable laws and regulations. For avoidance of doubt the references in this Clause 13.3 to “technical and operational data and information” shall not extend to commercial or financial information.

13.4 Neither of the Shareholders shall be entitled to make or permit or authorise the making of any press release or other public statement or disclosure concerning this Agreement or any of the transactions contemplated in it without the prior written consent of the other Shareholder (such consent not to be unreasonably withheld or delayed). Such restriction shall not apply to any release, statement or disclosure required by any governmental, supervisory or regulatory authority or any stock exchange, but before either Shareholder makes any such release, statement or disclosure, it shall, if and to the extent lawful and practicable, first supply a copy of it to the other Shareholder and shall include any amendment or addition reasonably requested by that other Shareholder.

13.5 All rights and obligations of the Shareholders under this Clause 13 shall survive the termination of this Agreement.

14. TERMINATION OF THIS AGREEMENT

14.1 This Agreement shall continue in full force and effect until terminated in accordance with the provisions of this Clause 14.

14.2 If at any time, as a result of a transfer of Shares made in accordance with this Agreement and/or the Joint Venture Company’s Constitution not more than one of the Shareholders holds any Shares in the capital of the Joint Venture Company or if an effective resolution is passed to wind up the Joint Venture Company or if a liquidator of the Joint Venture Company is otherwise appointed:

14.2.1 this Agreement shall terminate; and

14.2.2 where the corporate name of any Company or any part contains any word the same or similar to the corporate name or any distinctive part of the corporate name of the party who is no longer a shareholder, the Shareholder remaining as a shareholder of the Joint Venture Company shall procure that within thirty (30) days the corporate name of that Company or those Companies shall be changed so as to exclude such word.

14.3 If:

14.3.1 all the Shipbuilding Contracts have been terminated without any of the Vessels having been delivered to the Vessel Owning Companies; or

14.3.2 all the Vessels have been sold or have become an actual, constructive or agreed total loss;

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then, unless otherwise agreed, subject to all reasonable and necessary action having been taken (which the Shareholders will procure to be promptly taken) to terminate the Companies’ activities following such event, insofar as relating to the Companies, this Agreement shall be terminated and the Joint Venture Company and each Vessel Owning Company shall be wound up.

14.4 Termination of this Agreement shall be without prejudice to all accrued rights and obligations of the Shareholders as at the date of termination.

14.5 On a winding-up of the Joint Venture Company, the Shareholders shall endeavour to agree a suitable basis for dealing with the interests and assets of each Company and shall endeavour to ensure that:

14.5.1 all existing contracts of each Company are performed so far as resources permit;

14.5.2 no new contractual obligations are entered into by any Company; and

14.5.3 each Company shall be wound up as soon as practicable.

15. DEFAULT

15.1 If any of the events set out in Clause 15.2 shall occur, in relation to a Shareholder (the “Defaulting Shareholder”), and the other Shareholder shall have given notice in writing (a “Default Notice”) to the Defaulting Shareholder to be copied to the Joint Venture Company, that the provisions of this Clause 15 shall apply, the provisions of this Clause 15 shall apply accordingly.

15.2 The events referred to in Clause 15.1 are:

15.2.1 the Defaulting Shareholder fails to make any payment in excess in aggregate of $1,000,000 when due under this Agreement and fails to remedy such breach within thirty (30) days of being specifically required in writing to do so by the other Shareholder. For this purpose, an amount shall be deemed to be due if admitted in writing to be due by the Defaulting Shareholder, or due under any final and non-appealable arbitration award rendered in accordance with this Agreement;

15.2.2 the Defaulting Shareholder commits a material breach of this Agreement (other than a default in payment) and, where such breach is capable of remedy, fails to remedy such breach within thirty (30) days of being specifically required in writing to do so by the other Shareholder; or

15.2.3 a distress, execution, sequestration or other process is levied or enforced upon or against a material part of the Defaulting Shareholder’s property which is not discharged within thirty (30) days (for this purpose a mere arrest of a ship for security shall be disregarded); or

15.2.4 the Defaulting Shareholder becomes insolvent or is unable to pay its debts or commences negotiations or enters into any compromise, composition or other arrangements for the benefit of its general creditors; or

15.2.5 an encumbrancer takes possession of, or an administrator, administrative receiver, receiver or trustee or similar official is appointed over the whole or a material part of the Defaulting Shareholder’s undertaking, property or assets; or

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15.2.6 an order is made or a bona fide resolution is passed for the Defaulting Shareholder’s winding up or bankruptcy, otherwise than for the purpose of a reconstruction or amalgamation without insolvency previously approved by the other Shareholder (which approval shall not be unreasonably withheld); or

15.2.7 any of the events described in Clauses 15.2.3 to 15.2.6 occurs in relation to a Guarantor.

15.3 The other Shareholder is entitled to remedy any default under Clause 15.2.1 or 15.2.2 committed by the Defaulting Shareholder and the cost of the remedy shall be deemed to be a debt due from the Defaulting Shareholder to the other Shareholder repayable upon demand, upon which interest shall be calculated at the rate of five hundred per cent. (500%) per annum above LIBOR (the “Specified Rate”) (both before and after judgment) from the date of such advance to the date of actual payment, and all interest shall be compounded semi-annually, and the default shall not be considered remedied for the purposes of those Clauses until the Defaulting Shareholder has paid that cost to the other Shareholder.

15.4 Upon the occurrence of a default of the kind referred to in Clause 15.1.1, it is agreed that any amount which the Defaulting Shareholder is or may be entitled to receive as a dividend shall be waived by the Defaulting Shareholder and shall be retained by the Joint Venture Company and applied against the obligation in respect of which the Defaulting Shareholder is in default, including interest (calculated in accordance with Clause 15.3) thereon, until the obligation is satisfied in full.

15.5 Upon the occurrence of any of the events set out in Clause 15.2, then the Defaulting Shareholder shall be deemed to have given a notice to the other Shareholder (the “Offeree”), offering to sell in the first instance to the Offeree, all the Shares and Shareholder Loans (together, the “Deemed Offered Shares”) held by the Defaulting Shareholder.

15.6

15.6.1 The following provisions shall apply in determining the purchase price of the Deemed Offered Shares.

15.6.2 The purchase price of the Deemed Offered Shares shall be:

(a) their fair value as agreed between the Shareholders; or

(b) in default of agreement within fourteen (14) days after service of the Default Notice by the Offeree referred to in Clause 15.1, such sum as shall be certified (at the request of either Shareholder) by a firm of chartered accountants practising internationally (the “Expert”) (who shall not be the auditors for the time being of the Joint Venture Company) to be the fair value of the Deemed Offered Shares on the date on which the Default Notice was given. If the Shareholders are unable to agree on the identity of the Expert then either Shareholder may apply to the President for the time being of the Institute of Chartered Accountants in England and Wales for the appointment of the Expert.

15.7 In so certifying, the Expert is irrevocably instructed:

15.7.1 to value the Shares to be bought and sold as the same proportion of the value of the Joint Venture Company as a whole on that date as the relevant shareholding bears to the whole issued ordinary share capital of the Joint Venture Company on that date; and

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15.7.2 to obtain and to take into account valuations of the Vessels from two (2) ship brokers of international standing with appropriate LNG shipping experience, such valuations to take account of the Time Charters or other contracts of employment to which the Vessels may then be subject;

but otherwise the Expert shall take into account all such circumstances as shall seem to it relevant, including, without limitation, applicable practices in valuing the shares of companies carrying on similar businesses.

15.8 In so acting the Expert acts as expert and not as arbitrator and its decision shall (save in respect of manifest error) be final and binding on the Shareholders for all purposes and its costs and the costs of its appointment shall be borne in equal shares by the Shareholders.

15.9 For the purpose of this Clause 15 the Shareholders shall procure that the Joint Venture Company and the Vessel Owning Companies shall supply the Expert with all information which a prudent prospective purchaser of the entire issued share capital of the Joint Venture Company might reasonably require if he were to purchase the same from a willing vendor by private treaty on arm’s length terms and all other information which the Expert may reasonably request.

15.10

15.10.1 The Offeree shall, within fourteen (14) days from the date of determination of the value of the Deemed Offered Shares, by written notice to the Defaulting Shareholder indicate whether it intends to acquire the Deemed Offered Shares.

15.10.2 Upon the expiration of such fourteen (14) day period, the Offeree, if it has indicated such an intention, shall be bound to acquire and the Defaulting Shareholder shall be bound to sell the Deemed Offered Shares at the value so determined (or such of them as the Offeree indicated in its notice).

15.11

15.11.1 If, by reason of any breach by a Shareholder of this Agreement, or of any agreement between a Company and a Shareholder or its Affiliate, an event of default or potential event of default (however described) occurs under any of the Material Documents, then:

(a) the Directors of each Company who were nominated by the other Shareholder (the “Innocent Shareholder”) shall be authorised to take on behalf of that Company and at its cost any action which they reasonably consider necessary, in the best interest of the Company, to remedy the event of default or potential event of default, and such action may include (without limitation) entering into or terminating any contract or agreement, or borrowing money from any person (including without limitation a Shareholder);

(b) any such action shall not be considered a Reserved Matter;

(c) if a shareholders’ resolution of the Joint Venture Company is required for any such action referred to above in this Clause 15.11.1, the presence of the Innocent Shareholder only is required to form a quorum at any meeting held to pass the resolution, and any such resolution shall be passed if the Innocent Shareholder votes in favour or makes such resolution in writing, and regardless of any vote cast by the other Shareholder; and

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(d) if a resolution of the Board of any Company is required for any action referred to above in this Clause 15.11.1, the presence of the Directors appointed by the Innocent Shareholder only is required to form a quorum at any meeting held to pass the resolution, and any such resolution shall be passed if the Directors appointed by the Innocent Shareholder vote in favour or make such resolution in writing, and regardless of any vote cast by the other Directors.

15.11.2 The provisions of this Clause 15.11 shall be without prejudice to any of the Innocent Shareholder’s rights under this Clause 15 or at law.

15.11.3 The Innocent Shareholder shall notify the other Shareholder in writing before any action described in Clause 15.11.1 is taken and specify in reasonable detail the action to be taken.

16. DIVIDEND POLICY

Subject to the prudent retention of profits by way of reserve, to each Company’s obligations to financiers, and to the working capital and cash flow requirements of the Companies, the Companies shall distribute, by way of dividend in respect of each of their financial years, and as soon as reasonably practicable after the end of each financial year and on an interim basis at the end of each quarter of each financial year, such of their profits as are available for distribution in accordance with applicable law.

17. DEADLOCK

17.1 The Shareholders shall use all reasonable endeavours, in relation to any matter which requires their unanimous agreement to agree a common position and, subject to agreement being reached on such common position, to exercise their votes (and votes of the nominated Directors) in each Company jointly and in furtherance of the common position.

17.2 If there is a dispute or disagreement between the Shareholders as to any question which either of them (in its sole judgement) shall consider is of fundamental importance to the future of the Joint Venture Company, or its Business, then at the option of either Shareholder (as applicable), the matter in question shall be considered at the next meeting of the Board of the Joint Venture Company.

17.3 If at the next meeting of the Board of the Joint Venture Company, no resolution is carried in relation to the matter by reason of an equality of votes for and against any proposal for dealing with it, or for any other reason, then a Shareholder may give notice in writing (a “Deadlock Notice”) to the other referring to the matter in dispute and specifying that the provisions of Clause 17.4 shall apply.

17.4 Following service of a Deadlock Notice, either Shareholder may request the matter be referred to the Chief Executive Officers or such appropriate senior executives as such Shareholder may nominate by written notice to the other (the “Nominated Senior Executives”). The Nominated Senior Executives shall meet within 20 days and seek in good faith to resolve the matter in dispute. If the matter in dispute has not been resolved at the meeting referred to above or following such further period as the Nominated Senior Executives may agree (the “Deadlock Period”), then either of the Shareholders (the “Offeror”) may give notice in writing (the “Offer Notice”) within the period of 10 Business Days following expiry of the Deadlock Period to the other (the “Offeree”) offering to sell to the Offeree all of the Shares and Shareholder Loans relating to the Joint Venture Company (the “Deadlock Company”) which are owned by the Offeror for the amount per Share (the “Share Amount”) and/or amount per $1 outstanding on such Shareholder Loans (the “Loan Amount” and together with the Share Amount the “Amounts”) specified in the Offer Notice (the “Offer”).

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17.5 Subject to Clause 17.6, the Offeree shall have a period of 20 Business Days (the “Acceptance Period”) commencing with the Business Day following the date of receipt of the Offer Notice in which to accept or decline the Offer by written notice to the Offeror. If the Offeree accepts the Offer within the Acceptance Period, the Offeror shall sell to the Offeree (or such person as the Offeree shall nominate) and the Offeree, or such person as the Offeree shall nominate, shall purchase from the Offeror all of the Shares and Shareholder Loans owned by the Offeror at a price equal to the Amounts.

17.6 If the Offeree declines the Offer or fails to respond to the Offer Notice within the Acceptance Period the Offeree shall sell to the Offeror (or such person as the Offeror shall nominate) and the Offeror (or such person as the Offeror shall nominate) shall purchase from the Offeree all Shares and Shareholder Loans held by the Offeree at a price equal to the Amounts.

17.7 If each of the Shareholders delivers an Offer Notice in the terms set out in Clause 17.4 and each of such notices is received or deemed to be received upon the same calendar day, then the party whose Offer Notice specifies the higher Amounts shall be deemed to be the Offeror for the purposes of Clause 17.4 and the provisions of Clauses 17.4, 17.5 and 17.6 shall apply save that the Acceptance Period shall be a period of 25 Business Days from the Business Day following receipt (or deemed receipt) of the Offer Notices.

17.8 Subject to Clause 17.6, if an Offer Notice from one party (the “First Party”) is received or deemed to be received by the other party on a calendar day after the calendar day on which an Offer Notice from the other party is received by the First Party, the Offer Notice received on the later calendar day shall be of no effect.

17.9 If either Shareholder (the “Purchaser”) becomes obliged or agrees under the terms of Clauses 17.4 to 17.7 to purchase the Shares and/or Shareholder Loans which are owned by the other (the “Vendor”) the sale of such Shares and/or Shareholder Loans shall be completed on such date (being a Business Day) as the Purchaser may specify to the Vendor provided that the date so specified shall not be less than 14 nor more than 21 Business Days after the expiry of the Acceptance Period and the provisions of Clause 11 shall apply mutatis mutandis thereto.

17.10 If neither Shareholder issues an Offer Notice within the period of 10 Business Days following expiry of the Deadlock Period pursuant to the terms set out in Clause 17.4 either party may elect to place the Joint Venture Company in liquidation.

17.11 Any contemplated change of ownership resulting from this Clause 17 shall always be subject to the provisions of the Time Charters.

18. FURTHER ASSURANCE

18.1 Each of the Shareholders hereby undertakes that it (and any nominee for it) will execute such deeds, sign such documents, attend such meetings, exercise such votes, pass such resolutions and generally do and procure all things as may be necessary or convenient for the implementation of this Agreement.

18.2 Each of the Shareholders hereby further undertakes that it shall, and shall use all reasonable endeavours to procure that any other necessary party shall, execute all such documents and do all such acts and things as may be required to ensure that each party hereto shall have the benefits and burdens of the rights and obligations respectively in accordance with the terms and conditions of this Agreement.

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19. COSTS

19.1 Each Shareholder shall bear its own legal and other costs to the extent that it appoints its own legal or other advisers in connection with the negotiation of this Agreement and related agreements to be executed pursuant to this Agreement.

19.2 All taxes, duties, fees and third party expenses necessarily incurred in connection with the incorporation of the Joint Venture Company shall be borne and shared by the parties jointly on the basis of 50% of the costs being the responsibility of Teekay and 50% of the costs being the responsibility of CLNG. All costs incurred in the administration of the affairs of each Vessel Owning Company shall be borne by that Vessel Owning Company.

20. PROVISIONS RELATING TO THIS AGREEMENT

20.1 Entire Agreement. This Agreement constitutes the entire agreement between the parties regarding the subject matter of this Agreement and supersedes all earlier agreements of any kind, understandings and arrangements, whether oral or in writing, regarding the same (including the Memorandum of Understanding dated 30 October 2013 made between the parties hereto), all of which are hereby terminated and shall cease to have effect in all respects, and there are no collateral or supplemental agreements relating to this Agreement other than those (if any) executed contemporaneously with this Agreement.

20.2 Waiver of other representations. Each Shareholder:

(a) acknowledges and agrees that in entering into this Agreement and the documents and transactions contemplated under this Agreement, it does not rely on and shall have no remedy in respect of, any statement, representation, warranty or understanding (whether negligently or innocently made) of any person (whether a party to this Agreement or not), other than is expressly set out in this Agreement. The only remedy available to each of the party to this Agreement shall be the breach of contract under the terms of this Agreement. Nothing in this Clause 20.2 shall however operate to exclude any liability for fraud;

(b) irrevocably and unconditionally waives any right it may have to claim damages for any misrepresentation, or breach of any warranty, not contained in this Agreement or any such collateral or supplemental agreement unless such misrepresentation or warranty was made fraudulently.

20.3 No rescission. Each party irrevocably and unconditionally waives any right it may have to rescind this Agreement.

20.4 Assignment. This Agreement shall be binding on and enure for the benefit of each party’s successors and assigns save that:

(a) any purported assignment, charge, transfer or other disposition by a party of the benefit of this Agreement (or any related document) or of any of its claims or rights (whether to damages or otherwise) or obligations arising under or in connection with this Agreement (or any related document) which is made without the other parties’ prior written consent shall be void for all purposes; and

(b) any party in breach of Clause 20.4(a) shall not be entitled to recover damages or exercise any other remedy in respect of any loss which may be sustained by any other person who at any time has any right or interest relating to this Agreement as a result of any such breach.

20.5 No Right of set-off. No party shall be entitled to set off against any sums owing by it to any other party or any of them under or in connection with this Agreement or any related document any sums owing by such other party to it under or in connection with this Agreement or any related document.

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20.6 Waiver of this Agreement. In its sole and absolute discretion, any party may waive (in whole or in part) any provision of, or any of its rights under, this Agreement or any related document, and may do so in writing, unconditionally or subject to any terms which it thinks fit.

20.7 Variations, waivers to be in writing. Any variation of this Agreement, or any waiver connected with this Agreement, shall be void for all purposes unless:

(a) in the case of a variation, it is agreed to in writing signed by on behalf of each of the parties; or

(b) in the case of a waiver, it is set out in writing signed by or on behalf of the party granting the waiver.

20.8 Obligations to procure. Notwithstanding any other provisions in this Agreement and where under this Agreement a Shareholder undertakes to procure any action on the part of the Company, that Shareholder will be deemed to have complied with that undertaking if it had used its best efforts to procure such action including proposing and voting in favour of all relevant and necessary resolutions.

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20.9 Rights not affected by signature. Without limiting the generality of Clause 20.8, no party shall lose, or be precluded (permanently or temporarily) from exercising, any right or remedy which is conferred on it by this Agreement or any right or remedy which it has in connection with this Agreement under the general law as a result of this Agreement having been signed or of any delay, acquiescence or lack of diligence on its part in seeking relief or by any act or course of conduct by it which would otherwise imply that it was affirming this Agreement (or a related agreement) after a breach by one or more of the other parties, nor shall any single or partial exercise of any right or remedy preclude the exercise of any other right or remedy.

20.10 Provisions of Agreement severable. If any one or more of the provisions of this Agreement is, or becomes, invalid, unenforceable or illegal in whole or in part, the validity, enforceability or legality of the remaining provisions shall not be impaired.

20.11 Interest for late payment. Any sum owing by either party under this Agreement shall carry interest from the day after the date on which it is payable until actual payment at the Specified Rate. Such interest will be compounded semi-annually and payable after as well as before any judgment.

20.12 Counterparts. This Agreement may be entered into in any number of counterparts and by the parties to it on separate counterparts, each of which when so executed and delivered shall be an original but shall not be effective until each party has executed at least one counterpart, but all the counterparts shall together constitute one and the same instrument.

20.13 No partnership. Nothing in this Agreement shall create a partnership between the parties hereto or any of them.

20.14 Supremacy of this Agreement. If any of the provisions of this Agreement are inconsistent with or in conflict with any of the provisions of the Constitution of a Company then, to the extent of any such inconsistency or conflict, the provisions of this Agreement shall prevail as between the Shareholders so long as this Agreement remains in force and the Shareholders shall procure that such Constitution is amended accordingly and shall not exercise any rights conferred on them by the Constitution which are or may be inconsistent or in conflict with this Agreement.

20.15 Third Party Rights. This Agreement is made for the benefit of the parties hereto and their successors and permitted assigns only and is not intended to benefit, and no term thereof shall be enforceable by, any other person by virtue of the Contracts (Rights of Third Parties) Act 1999.

20.16 Anti-corruption. Notwithstanding anything to the contrary in this Agreement, each of the Shareholders undertakes to the other that:

(a) neither it, its Affiliates nor any of their respective directors, employees or agents will engage in any activity, practice or conduct which would constitute an offence under the US Foreign Corrupt Practices Act of 1977 as amended or the UK Bribery Act 2010 (or which could constitute such an offence if the same had occurred in the United States of America or the United Kingdom, respectively), or, any other applicable laws, statutes, regulations or codes relating to anti-bribery and anticorruption, in relation to the Companies and their respective operations;

(b) it has and will maintain in place, adequate procedures designed to prevent any Associated Person from undertaking any conduct that would give rise to an offence under section 7 of the UK Bribery Act 2010 or the US Foreign Corrupt Practices Act 1977 or any other applicable laws, statutes, regulations or codes relating to anti-bribery and anticorruption;

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(c) none of its officers, employees or other persons associated with such party have been convicted of any offence involving bribery, corruption, fraud or dishonesty;

(d) no officer, director, shareholder, employee or agent of each party is a Foreign Official as such term is defined in the UK Bribery Act 2010 or the US Foreign Corrupt Practices Act 1977;

(e) it shall indemnify the other party against any losses, liabilities, damages, costs (including but not limited to legal fees) and expenses incurred by, or awarded against, such party as a result of any breach of this Clause 20.16;

(f) from time to time, at the reasonable request of the other party, it will confirm in writing that it has complied with its undertakings under this and will provide any information reasonably requested by the other party in support of such compliance; and,

(g) it shall promptly notify the other party if, at any time during the term of this Agreement, its circumstances, knowledge or awareness changes such that it would not be in compliance with its undertakings under this clause.

Breach of any of the undertakings in this clause 20.16 shall be deemed to be a material breach of this Agreement and entitle the other party or other parties to terminate this Agreement.

If any party terminates this Agreement for breach of this clause 20.16, the party in breach of this clause 20.16 shall not be entitled to claim compensation or any further remuneration, regardless of any activities or agreements with additional third parties entered into before such termination.

Regardless of any other provision in this Agreement, each party shall not be obligated to do, or omit to do, any act which would, in its reasonable opinion, put it in breach of any of the undertakings in this clause.

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21. NOTICES

21.1 All notices (which expression includes any demand, request, consent or other communication) to be given by one Shareholder to the others under this Agreement, shall be in the English language, in writing and (unless delivered personally) shall be given by telefax (confirmed by letter, which if sent internationally shall be sent by courier) and be addressed:

21.1.1 in the case of Teekay as follows:

4^th Floor, Belvedere Building

66 Pitts Bay Road

Hamilton, HM 08 Bermuda

Mailing address: Suite No. 1778

48 Par-la Ville Road

Hamilton, HM11, Bermuda

Telefax No: +441 292 3931

Attn: Secretary;

cc Teekay Shipping (Canada) Ltd.

Suite 2000 Bentall 5

550 Burrard Street

Vancouver BC V6C 2K2

Canada

Attn: President, Teekay Gas Services

Telefax No: +1 604 609 6448;

21.1.2 in the case of CLNG as follows:

Room 912, 9^th Floor, China Merchants Tower,

Shun Tak Centre, 168-200 Connaught Road,

Central, Hong Kong

Attn: General Manager

Telefax No: ++852 2587 8371

21.2 If a Shareholder wishes to change its address for communications, the one shall give to the others not less than seven (7) days’ notice in writing of the change desired.

21.3 Notices to a Shareholder addressed as provided above shall be deemed to have been duly given when despatched provided that the correct answerback has been received (in the case of telefax), when delivered (in the case of personal delivery), two (2) days after posting (in the case of letters sent within the same country), or (in the absence of evidence of earlier receipt) five (5) days after despatch (in the case of letters sent internationally by courier), provided that in proving the time of such despatch it shall be sufficient to show that the envelope containing such notice was properly delivered to the courier. In each of the above cases any notice received on a non-working day or after business hours in the country of receipt shall be deemed to be given on the next following working day in such country.

22. APPLICABLE LAW AND ARBITRATION

22.1 This Agreement and any non-contractual obligations arising out of or in connection with it shall be governed by and construed in accordance with English law.

22.2 Any dispute arising out of or connection with this Agreement shall be referred to arbitration in London in accordance with the Arbitration Act 1996 or any statutory modification or re-enactment thereof save to the extent necessary to give effect to the provisions of this Clause 22.

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22.3 The arbitration shall be conducted in accordance with the London Maritime Arbitrators’ Association (LMAA) Terms current at the time when arbitration proceedings are commenced.

22.4 The reference shall be to three (3) arbitrators. A party wishing to refer a dispute to arbitration shall appoint its arbitrator and send notice of such appointment in writing to the other party requiring the other party to appoint its own arbitrator within fourteen (14) calendar days of that notice and stating that it will appoint its arbitrator as sole arbitrator unless the other party appoints its own arbitrator and give notice that it has done so within the fourteen (14) days specified. If the other party does not appoint its own arbitrator and give notice that it has done so within the fourteen (14) days specified, the party referring a dispute to arbitration may, without the requirement of any further prior notice to the other party, appoint its arbitrator as sole arbitrator and shall advise the other party accordingly. The award of a sole arbitrator shall be binding on both parties as if he had been appointed by agreement.

Nothing herein shall prevent the parties agreeing in writing to vary these provisions to provide for the appointment of a sole arbitrator.

22.5 Judgment upon the award rendered may be entered in any court having jurisdiction or application may be made to such court for a judicial acceptance of the award and an order of enforcement, as the case may be.

IN WITNESS whereof this Agreement has been executed by the parties hereto the day and year first above written.

SIGNED	)
for and on behalf of	)
TEEKAY LNG OPERATING LLC	)
by	)
in the presence of:	)
SIGNED	)
for and on behalf of	)
CHINA LNG SHIPPING	)
(HOLDINGS) LIMITED	)
by	)
in the presence of:	)

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SCHEDULE 1

RESERVED MATTERS

1. Approval of the Annual Budget of the Company.

2. Make any expenditure not allowed for in the Annual Budget of the Company to the extent that the relevant expenditure exceeds the greater of $100,000 or 10% of the figure budgeted as the total for the relevant items of expenditure.

3. Make any change in the corporate domicile or tax residence or status of the Company.

4. Change the registry and flag of any Vessel from the Bahamas or the Classification Society of any Vessel from any classification society not included within the International Association of Classification Societies.

5. Make any borrowings, enter into any hire purchase, lease, credit sale or similar agreement or give any guarantee or indemnity, or change the terms of such borrowings, agreements or guarantee or indemnity, other than as provided in this Agreement or in any document executed pursuant to this Agreement.

6. Factor or discount any book debts of the Company.

7. Create or permit to subsist any mortgage, charge or pledge or other encumbrance (excluding, in the case of the Vessels, liens arising by operation of law or in the ordinary course of operation of the Vessels and being promptly discharged or secured) on or over any Vessel or the Shares of any Company or over any other asset of a Company, or change the terms of such mortgage, charge, pledge or other encumbrances, other than as provided in this Agreement or in any agreement executed pursuant to this Agreement.

8. Make any loan or advance or otherwise give credit to any person, or change the terms of such loan, advance or giving of credit, except for the purpose of making deposits with its bankers.

9. Enter into any guarantee or stand surety for the obligation of any third party other than in the ordinary course of its Business or as provided in this Agreement or in any agreement executed pursuant to this Agreement, or change the terms of such guarantee or stand surety.

10. Alter or modify the rights attached to any Shares of the Company or make any alterations to its articles of incorporation and by-laws or its memorandum and articles of association or other constitutional documents.

11. Increase its nominal share capital or issue any share or loan capital or grant any option to subscribe for any of its share or loan capital, or securities convertible into share or loan capital.

12. Acquire, whether by formation or otherwise, any interest in any body corporate nor effect or permit the disposal or dilution of its interest, directly or indirectly, in any Company or other body corporate, whether by the sale, allotment or issue of any shares (or securities convertible into shares) in such entity’s capital otherwise to the Joint Venture Company or any reduction in the voting power or other powers of control exercisable in relation to the any such entity, directly or indirectly, by the Joint Venture Company.

13. Sell, transfer, lease, license or in any way dispose (whether in a single transaction or series of transactions) of:

(a) any Vessel or other ship;

(b) all or a material part of the undertaking, property, business or assets of the Company,

or agree to do so.

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14. Conclude (insofar as the relevant agreement has not already been concluded) or renew on expiry, vary or terminate, make any prepayment under, or release any of the other parties thereto from any of their material duties and liabilities thereunder or waive any breach of any of the said duties and liabilities or consent to any such act or omission of any such party which would otherwise constitute such a breach in respect of any material agreement of the Company.

15. Give any waiver, approval or consent, other than any which cannot reasonably be considered to be of material importance or value, under any material agreement of the Company, unless it is obliged by the terms of such agreement to give such waiver, approval or consent.

16. Make any alterations to the nature of, or cease to carry on, the Business of the Company or make any amendment of or variation to, or the execution, or conclusion, renewal, and/or termination of the agreed form of any of the documents referred to in this Agreement, including, and subject to the consent of the Charterer where required, but not limited to any Time Charter, any Shipbuilding Contract, any Supervision Agreement, any Ship Management Agreement or the Corporate Service Agreement, or any other time charter or contract for the employment of any Vessel, or the giving of any release or waiver thereunder unless such termination is made as a consequence of a sale or other disposal of the relevant Vessel or the total loss of the relevant Vessel, provided that there shall be disregarded any such matter which cannot reasonably be considered material, or appoint a replacement of the Ship Manager.

17. Pay fees or salaries or provide other benefits to the Directors of the Company other than on commercial, arm’s length basis and on the basis that all Directors are treated in like manner.

18. Enter into any agreement with a Shareholder or any of its Affiliates other than as provided in this Agreement or in any document executed pursuant to this Agreement.

19. Make any change in the financial year, auditors, terms of appointment of auditors, or accounting or reporting policies and practices of the Company.

20. Promote or take steps to effect a members’ voluntary winding-up or the making of an administration order, or pass any resolution for winding-up of the Company.

21. Apply to the Courts to order a meeting of creditors or of members or of any class of members of the Company.

22. Enter into any transaction or contract otherwise than on an arm’s length basis and in the ordinary course of the Business of the Company.

23. Entry into or variation of any licence or other similar agreement relating to intellectual property to be licensed to or by the Company which is otherwise than in the ordinary course of its Business or agree to do so.

24. Appoint or remove any Directors other than in accordance with the provisions of this Agreement and the Constitution of the Company.

25. Register any transfer of any Shares otherwise than in accordance with this Agreement and the Constitution of the Company.

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26. Commit any Vessel to any charter or other contract of employment other than the relevant Time Charter.

27. Capitalise or repay any amounts standing to the credit of any reserve of the Company or redeem or purchase its own Shares or establish any employee share option scheme of any kind whatsoever.

28. Enter into any merger, consolidation, joint venture, partnership or other arrangement with any person whereby the profits of the Company may be shared other than as provided in this Agreement or in any agreement executed pursuant to this Agreement.

29. Reduce the share capital of the Company.

30. Appoint or remove bankers of the Company, or approve bank signing mandates, including signatories and the terms thereof, or any variation thereto.

31. The engagement by the Company of any agent, manager, employee or consultant or any change in the terms of employment or service of any such agent, manager, employee or consultant, except as provided in this Agreement.

32. The establishment of any retirement benefit scheme in relation to the employees of the Company or the making of any contribution to any third party scheme for the provision of retirement benefits.

33. Appointing any committee of the Board of the Company or delegating any of the powers of the Board to any third party, or approving any transaction whereby the Business of the Company or part thereof would be controlled otherwise than by the Board.

34. Establishing any share option or other incentive scheme for any Director, consultant or employee of the Company.

35. The institution or settlement by the Company of any arbitration, litigation or similar proceedings relating to any claim totalling more than $1,000,000 or its equivalent in any other currency.

36. Make, grant or allow any claim, disclaimer, surrender, election or consent for tax purposes.

37. Consent to the obligations of the service provider under any Ship Management Agreement, Corporate Services Agreement or any Supervision Agreement being sub-contracted other than in accordance with the terms of such Agreement.

38. Approval of the Annual Budget prepared in accordance with Clause 9, provided that if the Annual Budget is not agreed by the start of the relevant financial year to which such Annual Budget relates, the parties agree that the proposed draft Annual Budget prepared in accordance with Clause 9 in respect of such financial year shall be used as the provisional Annual Budget until such time as the Annual Budget is agreed.

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SCHEDULE 2

COMPANY DETAILS

Name	TC LNG Shipping LLC
Date and country of incorporation	23 May 2014, Marshall Islands
Registration number	962975
Registered office	Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960
Principal place of business	4th Floor, Belvedere Building, 69 Pitts Bay Road, Hamilton, HM 08, Bermuda
Directors	Yan Weiping Xu Jianping Mark Cave Andres Luna
Secretary	Mark Cave
Capital	US$650
Issued share capital	N/A
Members (with numbers of membership interests)	China LNG Shipping (Holdings) Limited - 50% membership interest Teekay LNG Operating L.L.C. - 50% membership interest
Bankers	[tba]
Auditors	KPMG
Accounting reference date	31 December

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Name	DSME Hull No 2423 LLC DSME Hull No 2425 LLC DSME Hull No 2430 LLC DSME Hull No 2431 LLC DSME Hull No 2433 LLC DSME Hull No 2434 LLC
Date and country of formation	27 May 2014, Marshall Islands
Registered number:
DSME Hull No 2423 LLC DSME Hull No 2425 LLC DSME Hull No 2430 LLC DSME Hull No 2431 LLC DSME Hull No 2433 LLC DSME Hull No 2434 LLC	962978 962979 962980 962981 962982 962983
Registered office	Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960
Principal place of business	4th Floor, Belvedere Building, 69 Pitts Bay Road, Hamilton, HM 08, Bermuda
Directors	Yan Weiping Xu Jianping Mark Cave Andres Luna
Secretary	Mark Cave
Capital	US$650
Issued Share Capital	N/A
Members (with numbers of membership interests)	TC LNG Shipping LLC, 100% membership interest
Bankers	[tba]
Auditors	KPMG
Accounting reference date	31 December

39

SCHEDULE 3

FORM OF ANNUAL BUDGET

OPEX	Budget 201x	Comments Budget 201x
Z - VESSEL OPERATING EXPENSE	0
Z1 - Opex Categories	0
A - Crew/Manning
B - Contracts
C - Insurance
D - Tax & Registration
E - Services, Spares & Consumables
F - Inspection
G - Port Expenses
J - Damage
K - Provisions, Projects
L - Capital Expenses
N - Lay Up Costs
O - Opex Suspense
V - Opex Rebates
Z2 - Fleet Overhead	0

40

SCHEDULE 4

FORM OF SUPERVISION AGREEMENT

41

SCHEDULE 5

FORM OF CORPORATE SERVICES AGREEMENT

42

SCHEDULE 6

FORM OF SHIPMANAGEMENT AGREEMENT

43

EX-4.23

Exhibit 4.23

EXECUTION VERSION

FACILITY AGREEMENT

     DECEMBER 2014

Between

QATAR NATIONAL BANK SAQ

(as Facility Agent and Security Agent)

THE FINANCIAL INSTITUTIONS LISTED IN SCHEDULE 7

(as Original Lenders)

and

NAKILAT HOLDCO L.L.C.

(as Borrower)

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CONTENTS

Clause		Page
1.	DEFINITIONS AND INTERPRETATION		4
2.	FINANCE PARTIES’ RIGHTS AND OBLIGATIONS		19
3.	FACILITY		19
4.	CONDITIONS PRECEDENT DOCUMENTATION		21
5.	CONDITIONS OF UTILISATION		21
6.	UTILISATION		22
7.	REPAYMENT		22
8.	REBORROWING		23
9.	COSTS OF UTILISATION		23
10.	DEFAULT INTEREST		24
11.	PREPAYMENT		25
12.	TAX GROSS-UP AND INDEMNITY		27
13.	FATCA APPLICATION		28
14.	FATCA INFORMATION		29
15.	REPRESENTATIONS AND WARRANTIES		30
16.	INFORMATION UNDERTAKINGS		33
17.	OTHER UNDERTAKINGS		35
18.	EVENTS OF DEFAULT		42
19.	INDEMNITIES		44
20.	MORTGAGEE’S INTEREST INSURANCE		45
21.	ASSIGNMENT AND TRANSFER		46
22.	APPOINTMENT OF THE ADMINISTRATIVE AGENTS		52
23.	PAYMENTS BY THE FACILITY AGENT – LIMITED RECOURSE		53
24.	REFUND OF PAYMENTS AND FURTHER PAYMENTS BY THE LENDERS		56
25.	REMITTANCES – DUTIES AND DISCRETIONS OF THE ADMINISTRATIVE AGENTS		57
26.	RELEASES OF SECURITY		64
27.	ENFORCEMENT OF TRANSACTION SECURITY		65
28.	COMMISSIONS, COSTS AND EXPENSES		65
29.	INCREASED COSTS		66
30.	MITIGATION		67
31.	SET-OFF		68
32.	NOTICES		68
33.	PAYMENTS AND EXPENSES		70

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34.	FEES		70
35.	MISCELLANEOUS		71
36.	CONFIDENTIALITY		72
37.	GOVERNING LAW		72
38.	JURISDICTION		72
39.	SERVICE OF PROCESS		73
40.	WAIVER OF IMMUNITY		73
SCHEDULE 1			74
	CONDITIONS PRECEDENT		74
SCHEDULE 2			76
	FORM OF UTILISATION REQUEST		76
SCHEDULE 3			77
	AMORTISATION SCHEDULE		77
SCHEDULE 4			78
	KYC INFORMATION		78
SCHEDULE 5			79
	FORM OF QUIET ENJOYMENT UNDERTAKING		79
SCHEDULE 6			87
	COMPLIANCE CERTIFICATES		87
	PART 1 –	ANNUAL COMPLIANCE CERTIFICATE	87
	PART 2 –	TIME CHARTER PARTY AGREEMENT TERMINATION COMPLIANCE CERTIFICATE	88
SCHEDULE 7			89
	THE LENDERS, NOTICES, COMMITMENTS AND RELEVANT PERCENTAGES		89
SCHEDULE 8			90
	FORM OF TRANSFER UNDERTAKING		90
SCHEDULE 9			92
	FORM OF TRANSFER CERTIFICATE		92
SCHEDULE 10			94
	FORM OF ASSIGNMENT AGREEMENT		94
SCHEDULE 11			97
	FORM OF PAYMENT UNDERTAKING		97
SCHEDULE 12			98
	VESSEL DELIVERABLES		98

3

THIS FACILITY AGREEMENT (this Agreement) is made as a deed and dated      December 2014

BETWEEN:

(1) QATAR NATIONAL BANK SAQ (as the Facility Agent and the Security Agent), a Qatari shareholding company registered in the State of Qatar and having its principal place of business at P.O. Box 1000, Doha, State of Qatar;

(2) THE FINANCIAL INSTITUTIONS LISTED IN SCHEDULE 7 (the Original Lenders); and

(3) NAKILAT HOLDCO L.L.C. (the Borrower), a limited liability company formed in the Republic of the Marshall Islands under Commercial Registration No. 963166 and having its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960,

(together the Parties and each a Party).

IT IS AGREED as follows:

1. DEFINITIONS AND INTERPRETATION

1.1 Definitions

In this Agreement, unless the context otherwise requires:

Account Pledge means a Qatari-law governed account pledge granted by the Borrower to the Security Agent and dated on or about the date hereof in respect of the Debt Service Reserve Account.

Administrative Agent means the Facility Agent or the Security Agent.

Affiliate means in relation to a company such company’s ultimate parent company, if any, and any company in which such parent company or such company (as the case may be) now or hereafter owns or controls, directly or indirectly 50% or more of such company.

Al Areesh L.L.C. means Al Areesh L.L.C., a limited liability company formed in the Republic of the Marshall Islands and whose registered office is Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960.

Al Daayen L.L.C. means Al Daayen L.L.C., a limited liability company formed in the Republic of the Marshall Islands and whose registered office is Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960.

Al Marrouna L.L.C. means Al Marrouna L.L.C., a limited liability company formed in the Republic of the Marshall Islands and whose registered office is Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960.

Announced Rule Change means any announcement, publication, document, directive and/or report promulgated, published or issued on or before the date of this Agreement (including any amendment, supplement, replacement or modification thereto on or before the date of this Agreement or, to the extent substantially consistent with one promulgated, published or issued on or before the date of this Agreement, after the date of this Agreement), whether or not final, by the Basel Committee on Banking Supervision (including its Group of Governors and Heads of Supervision), the Committee on Economic and Monetary Affairs of the European Parliament, the Council of the European Union or the Commission of the European Communities in connection with changes in bank capital and/or liquidity requirements, commonly referred to individually or collectively as “Basel III”.

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Applicable Asset has the meaning given to that term in Clause 17.12(b)(vi) (Financial Indebtedness).

Applicable Law means:

(a) any law, statute, decree, constitution, regulation, authorisation, judgment, injunction or other directive of any Government Entity;

(b) any treaty, pact, compact or other agreement to which any Government Entity is a signatory, party or contracting state; or

(c) any judicial or administrative interpretation with binding characteristics or application of those described in (a) or (b),

and in each case, which is applicable to a Vessel, the use or operation of a Vessel, an Obligor or the Finance Documents.

Assignment Agreement means an agreement substantially in the form set out in Schedule 10 (Form of Assignment Agreement) or any other form agreed between the relevant assignor and assignee.

Authorisation means an authorisation, consent, approval, resolution, licence, exemption, filing, notarisation or registration.

Availability Period means the period from and including the date of this Agreement to and including 31 January 2015, unless extended pursuant to Clause 3.3 (Availability Period Extension).

Availability Period Extension has the meaning given to that term in Clause 3.3(a) (Availability Period Extension).

Availability Period Extension Fee has the meaning given to that term in Clause 3.3(f) (Availability Period Extension).

Availability Period Extension Request has the meaning given to that term in Clause 3.3(b) (Availability Period Extension).

Available Tranche Commitment means, in respect of any Lender, for any Tranche the amount of such Lender’s Tranche Commitment in respect of that Tranche minus:

(a) the amount of such Lender’s participation in any outstanding Loans in respect of that Tranche; and

(b) in relation to any proposed Utilisation in respect of that Tranche, the amount of such Lender’s participation in any Loans that are due to be made on or before the proposed Utilisation Date in respect of that Tranche.

Borrower Security Property means each asset of the Borrower over which the Borrower has granted Security under a Security Document.

Break Costs means the amount (if any) by which:

(a) the interest that a Lender should have received for the period from the date of receipt of all or any part of its Loan or Unpaid Sum to the last day of the current Interest Period in respect of that Loan or Unpaid Sum, had the principal amount or Unpaid Sum received been paid on the last day of that Interest Period;

5

exceeds:

(b) the amount that a Lender would be able to obtain by placing an amount equal to the principal amount or Unpaid Sum received by it on deposit with a leading bank in the London interbank market for a period starting on the Business Day following receipt or recovery and ending on the last day of the current Interest Period.

Business Day means a day (excluding Friday, Saturday and Sunday) on which commercial banks are generally open for business in Doha, London, Vancouver and New York.

Certificate of Transfer Undertaking means a certificate substantially in the form set out in Schedule 8 (Form of Transfer Undertaking).

Charge Agreement means a charge dated on or about the date hereof between the Borrower and the Security Agent granting a charge over the limited liability company interests held by the Borrower in each Guarantor.

Classification Society means, in respect of each Vessel, Lloyds Register of Shipping or another internationally recognised society of equivalent standing, including, without limitation, American Bureau of Shipping and Det Norske Veritas.

Compliance Certificate means a certificate substantially in the form set out in Part 1 or Part 2 of Schedule 6 (Compliance Certificate), as applicable.

Confidential Information means all information relating to the Borrower or any Guarantor, the Finance Documents or the Facility of which a Finance Party becomes aware in its capacity as, or for the purpose of becoming, a Finance Party or which is received by a Finance Party in relation to, or for the purpose of becoming a Finance Party under, the Finance Documents or the Facility from either the Borrower, any Guarantor or any adviser on behalf of the Borrower or any Guarantor in whatever form, and includes information given orally and any document, electronic file or any other way of representing or recording information which contains or is derived or copied from such information but excludes information that:

(a) is or becomes public information other than as a direct or indirect result of any breach by that Finance Party of Clause 36 (Confidentiality); or

(b) is expressly identified in writing at the time of delivery as non-confidential by any member of the Borrower, any Guarantor or any of their advisers; or

(c) is known by that Finance Party before the date the information is disclosed to it in accordance with paragraphs (a) or (b) or is lawfully obtained by that Finance Party after that date, from a source which is, as far as that Finance Party is aware, unconnected with the Borrower or any Guarantor and which, in either case, as far as that Finance Party is aware, has not been obtained in breach of, and is not otherwise subject to, any obligation of confidentiality.

Debt Service Reserve Account means the USD denominated “debt service reserve account” with account number 0220-036836-05 and Swift Code QNBAQAQA established by the Borrower with the Security Agent pursuant to Clause 17.15 (Debt Service Reserve Account).

Deed of Covenant means a deed of covenant entered into by a Guarantor in favour of the Finance Parties in respect of the Vessel owned by such Guarantor.

6

Default means:

(a) an Event of Default; or

(b) any event or circumstance specified in Clause 18 (Events of Default) that would (with the expiry of a grace period, the giving of notice, the making of any determination under the Finance Documents or any combination of any of the foregoing) be an Event of Default.

Environment means:

(a) any land, including sea bed, lake bed or river bed under water;

(b) any structures;

(c) water; and

(d) air.

Environmental Approval means any authorisation required of an Obligor under any Environmental Law.

Environmental Claim means any claim, proceeding, formal notice or investigation by any person in respect of any Environmental Approval, Environmental Law or presence of Hazardous Material in contravention of any Environmental Law.

Environmental Law means any Applicable Law, together with guidance issued under any Applicable Law, concerning:

(a) the protection of health and safety;

(b) the pollution or protection of any ecological system or living organism;

(c) the Environment; or

(d) any Hazardous Material.

Event of Default means any event or circumstance specified as such in Clause 18 (Events of Default).

Existing Borrowers means Al Marrouna Inc., Al Areesh Inc. and Al Daayen Inc.

Existing Facility means the facility agreement dated 15 December 2004 as amended and restated on 15 December 2005 and made between, amongst others, the Existing Borrowers, the lenders named therein as lenders and Crédit Agricole Corporate and Investment Bank as arranger, facility agent and security agent (together, the Existing Lenders) pursuant to which the lenders agreed to advance up to US$468,108,023.

Existing Insurances has the meaning given to that term in Clause 17.17(a) (Vessel undertakings).

Existing Security means, in relation to the Existing Facility, the mortgages granted over the Vessels by the registered owner to the disponent owners (including an assignment of the mortgages by the disponent owners to the registered owner), the assignments by the registered owner to the disponent owners of its rights under the lease in respect of each Vessel, the assignments by the disponent owners to Crédit Agricole Corporate and Investment Bank as security agent of the lease and related assets in respect of each Vessel, pledges over various accounts by the disponent owners and pledges over the shares in each of the disponent owners.

Facility has the meaning given to that term in Clause 3.1 (The Facility).

7

Facility Agent means the Facility Agent appointed from time to time being, as at the date of this Agreement, Qatar National Bank SAQ.

Facility Office means the office or offices notified by a Lender to the Facility Agent in writing on or before the date it becomes a Lender (or, following that date, by not less than five (5) Business Days’ written notice) as the office or offices through which it will perform its obligations under this Agreement.

FATCA means:

(a) sections 1471 to 1474 of the US Internal Revenue Code of 1986 (the Code) or any associated regulations or other official guidance;

(b) any treaty, law, regulation or other official guidance enacted in any other jurisdiction, or relating to an intergovernmental agreement between the US and any other jurisdiction, which (in either case) facilitates the implementation of paragraph (a) above; or

(c) any agreement pursuant to the implementation of paragraphs (a) or (b) above with the US Internal Revenue Service, the US government or any governmental or taxation authority in any other jurisdiction.

FATCA Application Date means:

(a) in relation to a “withholdable payment” described in section 1473(1)(A)(i) of the Code (which relates to payments of interest and certain other payments from sources within the US), 1 July 2014;

(b) in relation to a “withholdable payment” described in section 1473(1)(A)(ii) of the Code (which relates to “gross proceeds” from the disposition of property of a type that can produce interest from sources within the US), 1 January 2017; or

(c) in relation to a “passthru payment” described in section 1471(d)(7) of the Code not falling within paragraphs (a) or (b) above, 1 January 2017,

or, in each case, such other date from which such payment may become subject to a deduction or withholding required by FATCA as a result of any change in FATCA after the date of this Agreement.

FATCA Deduction means a deduction or withholding from a payment under a Finance Document required by FATCA.

FATCA Exempt Party means a Party that is entitled to receive payments free from any FATCA Deduction.

FATCA FFI means a foreign financial institution as defined in section 1471(d)(4) of the Code which, if any Finance Party is not a FATCA Exempt Party, could be required to make a FATCA Deduction.

FATCA Payment means either:

(a) the increase in a payment made by an Obligor to a Finance Party under Clause 12.3 (Tax Gross-Up and Indemnity) or Clause 13.1(b) (FATCA Deduction by Finance Party); or

(b) a payment under Clause 13.1(d) (FATCA Deduction by Finance Party).

8

Fee Letter means a fee letter dated on or about the date of this Agreement and made between the Facility Agent and the Borrower with respect to an arrangement fee.

Final Utilisation Date means the earlier of (i) the date on which the Available Tranche Commitment in respect of each Tranche has been reduced to zero and (ii) the expiry of the Availability Period.

Finance Documents means:

(a) this Agreement;

(b) each Security Document;

(c) the Fee Letter; and

(d) any other agreement designated as such by the Facility Agent and the Borrower.

Finance Party means the Facility Agent, the Security Agent and the Lenders.

Financial Close means the date on which the Facility Agent gives the confirmation required pursuant to Clause 4.1 (Conditions Precedent Documentation).

Financial Indebtedness means any indebtedness for or in respect of:

(a) moneys borrowed;

(b) any amount raised by acceptance under any acceptance credit facility;

(c) any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument;

(d) the amount of any liability in respect of any lease or hire purchase contract which would, in accordance with IFRS, be treated as a finance or capital lease;

(e) receivables sold (other than any receivables to the extent they are sold on a non-recourse basis);

(f) any amount raised under any other transaction having the commercial effect of a borrowing;

(g) any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price (and, when calculating the value of any derivative transaction, only the marked to market value shall be taken into account);

(h) any counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution;

(i) any amount raised by the issue of redeemable shares;

(j) any amount of any liability under an advance or deferred purchase agreement if one of the primary reasons behind the entry into of that agreement is to raise finance; and

(k) (without double counting) the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in paragraphs (a) to (j).

First Repayment Date means the date falling three (3) months after the Initial Utilisation Date, or, if the Availability Period is extended pursuant to Clause 3.3 (Availability Period Extension), the date falling three (3) months after the Final Utilisation Date.

9

Global Assignment Agreement means an assignment agreement dated on or about the date hereof between a Guarantor and the Security Agent in respect of such Guarantor’s Time Charter Party Agreement, Management Agreement, Required Insurances and any reinsurances to the extent such insurance and reinsurance policies are in place from time to time.

Government Entity means:

(a) any national government;

(b) any political subdivision, banking or monetary authority or local jurisdiction in a national government;

(c) any instrumentality, board commission, authority, department, organ, court or agency of any of the entities listed in paragraphs (a) or (b);

(d) any association, organisation or institution of which any of the entities listed in paragraphs (a) or (b) is a member or to whose jurisdiction any is subject or in whose activities any is a participant; and

(e) any person acting or purporting to act on behalf of any of the persons or entities listed in paragraphs (a), (b), (c) and (d).

Guarantee means a guarantee dated on or about the date hereof by a Guarantor in favour of the Finance Parties.

Guarantors means each of Al Areesh L.L.C., Al Daayen L.L.C. and Al Marrouna L.L.C. and Guarantor means one or any of them.

Hazardous Material means any emission or substance, whether on its own or in combination with any other substance, whose release is regulated by Environmental Law or which is determined by any Environmental Law or other Applicable Law to be capable of causing harm to any living organism or the Environment.

IFRS means the body of pronouncements issued by the International Accounting Standards Board, including International Financial Reporting Standards and interpretations approved by the International Accounting Standards Board and International Accounting Standards and Standing Interpretations Committee interpretations approved by the predecessor International Accounting Standards Committee to the extent applicable to the relevant financial statements.

Increased Costs has the meaning given to that term in Clause 29.1(b) (Increased Costs).

Initial Utilisation Date means the date of the first Utilisation of the Facility, such date to be no later than thirty (30) days from the date of this Agreement.

Initial Utilisation Request means the Utilisation Request made in respect of the first Utilisation of the Facility.

Insolvency Proceeding means a case or proceeding seeking a judgment of, or arrangement for, insolvency, bankruptcy, composition, rehabilitation, reorganisation, administration, winding-up, liquidation or other similar relief with respect to a Party or its debts or assets, or seeking the appointment of a trustee, receiver, liquidator, conservator, custodian or other similar official of a Party or any substantial part of its assets, under any bankruptcy, insolvency or other similar law or any banking, insurance or similar law governing the operation of a Party and any analogous proceeding in any jurisdiction to which a Party is subject.

10

Interest Period means, in relation to a Loan, each period determined in accordance with Clause 9.2 (Interest Periods) and in relation to an Unpaid Sum, each period determined in accordance with Clause 10 (Default Interest).

Legal Reservations means:

(a) the principle that equitable remedies may be granted or refused at the discretion of a court and the limitation of enforcement by laws relating to insolvency, reorganisation and other laws generally affecting the rights of creditors;

(b) similar principles, rights and defences under the laws of the Republic of the Marshall Islands or any other jurisdiction where the Borrower conducts its business; and

(c) any other matters which are specifically referred to in any legal opinion delivered pursuant to Clause 17.18 (Account Pledge and legal opinions), paragraph 2 (Legal opinions) of Schedule 12 (Vessel Deliverables) or paragraph 3 (Legal opinions) of Schedule 1 (Conditions Precedent) to this Agreement.

Lenders means the Original Lenders or any assignee or transferee that has become a Lender in accordance with Clause 21 (Assignment and Transfer).

LIBOR means:

(a) the applicable Screen Rate; or

(b) if no Screen Rate is available the arithmetic mean of rates (rounded upwards if necessary to four decimal places) for US Dollars as supplied to the Facility Agent at its request by the relevant Reference Banks to leading banks in the London interbank market for the Interest Period for that Loan,

as of 11.00 am London time on the Rate Fixing Day.

Loan means a loan made or to be made under the Facility or the principal amount outstanding for the time being of that loan.

Majority Lenders means:

(a) if no Loans have been made, a Lender or Lenders whose Tranche Commitments aggregate more than 66 2/3 per cent of the aggregate of all Tranche Commitments (or, if the aggregate of all Tranche Commitments has been reduced to zero, aggregated more than 66 2/3 per cent of the aggregate of all Tranche Commitments immediately before the reduction); or

(b) at any other time, a Lender or Lenders whose participations in the Loans aggregate more than 66 2/3 per cent of the Loans.

Management Agreement means:

(a) in respect of Al Areesh L.L.C., the management agreement dated 29 March 2006 and made between Teekay Nakilat (II) Limited as operator and Teekay Shipping (Glasgow) Limited as manager to be novated, amended and restated pursuant to an amendment, novation and restatement agreement to be entered into by Teekay Nakilat (II) Limited, Teekay Shipping (Glasgow) Limited and Al Areesh L.L.C. dated on or around the date of the initial Utilisation Date in relation to Tranche 1;

11

(b) in respect of Al Daayen L.L.C., the management agreement dated 29 March 2006 and made between Teekay Nakilat (II) Limited as operator and Teekay Shipping (Glasgow) Limited as manager to be novated, amended and restated pursuant to an amendment, novation and restatement agreement to be entered into by Teekay Nakilat (II) Limited, Teekay Shipping (Glasgow) Limited and Al Daayen L.L.C. dated on or around the date of the initial Utilisation Date in relation to Tranche 2; and

(c) in respect of Al Marrouna L.L.C., the management agreement dated 29 March 2006 and made between Teekay Nakilat (II) Limited as operator and Teekay Shipping (Glasgow) Limited as manager to be novated, amended and restated pursuant to an amendment, novation and restatement agreement to be entered into by Teekay Nakilat (II) Limited, Teekay Shipping (Glasgow) Limited and Al Marrouna L.L.C. dated on or around the date of the initial Utilisation Date in relation to Tranche 3.

Margin means 1.85 per cent. per annum.

Market Valuation Report means a valuation report produced by the Vessel Consultant at the instruction and cost of the Borrower specifying the market value of each Vessel for the benefit of the Facility Agent substantially in the same form as has been provided to the Facility Agent by the Borrower prior to the date hereof.

Material Adverse Effect means a material adverse effect on:

(a) the ability of any Obligor to perform its obligations under any Finance Document;

(b) the validity or enforceability of any Finance Document; or

(c) any right or remedy of any Finance Party in respect of a Finance Document.

Minimum Security Percentage has the meaning given to that term in Clause 17.16(b) (Financial covenant).

Obligors means the Borrower and each Guarantor and Obligor means one or any of them.

Original Flag means the flag of the Bahamas.

Permitted Financial Indebtedness has the meaning given to that term in Clause 17.12(b) (Financial Indebtedness).

Quiet Enjoyment Undertaking means a letter substantially in the form appended at Schedule 5 (Form of Quiet Enjoyment Undertaking).

Ras Laffan means Ras Laffan Liquefied Natural Gas Company Limited (II).

Rate Fixing Day means the day falling two (2) Business Days prior to any period for which LIBOR is to be determined.

Receiver means a receiver or receiver and manager or administrative receiver of the whole or any part of the Security Property.

Reference Banks means the principal London offices of Qatar National Bank SAQ, Citibank, N.A. (London Branch) and Standard Chartered Bank.

Refinancing Indebtedness has the meaning given to that term in Clause 17.12(b)(vi) (Financial Indebtedness).

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Relevant Asset has the meaning given to that term in Clause 17.12(b)(v) (Financial Indebtedness).

Relevant Indebtedness has the meaning given to that term in Clause 17.12(b)(v) (Financial Indebtedness).

Relevant Percentage means in relation to a Lender, the percentage assigned to it under the heading “Relevant Percentage” in Schedule 7 (The Lenders, Notices, Commitments and Relevant Percentages), as such percentage may change from time to time in order to reflect the actual percentage of its participation in the aggregate amount of all Loans.

Relevant Subsidiary has the meaning given to that term in Clause 17.12(b)(v) (Financial Indebtedness).

Remittance means any payment made or owing under this Agreement or any other Finance Document to the Facility Agent, excluding any amounts received by the Facility Agent as reimbursement for its costs and expenses save to the extent that the Facility Agent has been reimbursed for such costs and expenses by a Lender in accordance with Clause 28 (Commissions, Costs and Expenses).

Repayment Date means each date specified in Schedule 3 (Amortisation Schedule) as a Repayment Date.

Repayment Instalment means each instalment for the repayment of the principal amount of all outstanding Loans as determined in accordance with Clause 7 (Repayment).

Required DSRA Balance has the meaning given to that term in Clause 17.15 (Debt Service Reserve Account).

Required Insurance Amount means, for each Vessel, 110% of the market value of that Vessel determined in accordance with the most recent Market Valuation Report supplied to the Facility Agent in accordance with Clause 16.5 (Annual Market Valuation Report) at that time.

Required Insurances means insurance policies covering risks related to hull and machinery, war risks and protection and indemnity with respect to each Vessel.

Retiring Administrative Agent has the meaning given to that term in Clause 21.8 (Resignation and termination of appointment of an Administrative Agent).

Screen Rate means the London interbank offered rate administered by ICE Benchmark Administration Limited (or any other person that takes over the administration of that rate) for US Dollars for the Interest Period for the relevant Loan as displayed on pages LIBOR01 or LIBOR02 of the Reuters screen (or any replacement Reuters page which displays that rate) on the appropriate page of such other information service which publishes that rate from time to time in place of Reuters. If such page is replaced or service ceases to be available, the Facility Agent may specify another page or service displaying the appropriate page after consultation with the Borrower and the Lenders.

Secured Obligations means all the present and future liabilities and obligations at any time due, owing or incurred by each Obligor under the Finance Documents, both actual and contingent and whether incurred solely or jointly and as principal or surety or in any other capacity.

Security means a mortgage, charge, pledge, lien or other security interest securing any obligation of any person or any other agreement or arrangement having a similar effect.

13

Security Agent means the security agent appointed from time to time being, as at the date of this Agreement, Qatar National Bank SAQ.

Security Document means:

(a) each Guarantee;

(b) each Vessel Mortgage;

(c) each Global Assignment Agreement;

(d) the Charge Agreement;

(e) the Account Pledge; and

(f) each Deed of Covenant.

Security Property means:

(a) the Transaction Security and all proceeds of the Transaction Security; and

(b) all obligations expressed to be undertaken by an Obligor to pay amounts in respect of the Secured Obligations to the Facility Agent as agent for the Lenders or Security Agent as agent or trustee (as applicable in accordance with Clause 22.2 (Appointment of the Security Agent) for the Lenders and secured by the Transaction Security together with all representations and warranties expressed to be given by an Obligor in favour of the Facility Agent as agent for the Lenders or Security Agent as trustee for the Lenders.

Security Value has the meaning given to that term in Clause 17.16(a) (Financial covenant).

Spot Rate of Exchange means the Facility Agent’s spot rate for the purchase of the relevant currency with US Dollars in the London foreign exchange market at or about 11:00am on a particular day.

Subsidiary means an entity of which a person has direct or indirect control or owns directly or indirectly more than 50% of the voting capital or similar right of ownership and control for this purpose means the power to direct the management and the policies of the entity whether through the ownership of voting capital, by contract or otherwise.

Tax means any direct or indirect tax, impost, charge or levy whatsoever including, without limitation, value added tax and any withholding tax (including any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same) imposed, levied, collected, withheld or assessed by or on behalf of the taxing authority of the State of Qatar, the government of the Republic of the Marshall Islands, the Bahamas or any other jurisdiction of incorporation of any Obligor or any other country where a Vessel is registered or flagged.

Tax Credit means a credit against, relief or remission for, or repayment of any Tax.

Tax Deduction means a deduction or withholding for or on account of Tax from a payment under or in respect of a Finance Document other than a FATCA Deduction.

Tax Payment means an increased payment made by the Borrower to a Finance Party under Clause 12 (Tax Gross-Up and Indemnity).

Termination Date means the date falling twelve (12) years from the Initial Utilisation Date.

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Time Charter Party Agreement means:

(a) in respect of Al Areesh L.L.C., the time charter dated 1 July 2004 as novated, amended and restated on 18 January 2006, as amended and restated by an amendment and restatement agreement dated 21 March 2012 and as to be further novated, amended and restated on or around the date of the initial Utilisation Date in relation to Tranche 1, to be made between Al Areesh L.L.C. and Ras Laffan pursuant to which Al Areesh L.L.C. agree to let and Ras Laffan agree to take on time charter, for the period and upon the terms and conditions therein mentioned, Vessel 1;

(b) in respect of Al Daayen L.L.C., the time charter dated 1 July 2004 as novated, amended and restated on 18 January 2006, as amended and restated by an amendment and restatement agreement dated 21 March 2012 and as to be further novated, amended and restated on or around the date of the initial Utilisation Date in relation to Tranche 2, to be made between Al Daayen L.L.C. and Ras Laffan pursuant to which Al Daayen L.L.C. agree to let and Ras Laffan agree to take on time charter, for the period and upon the terms and conditions therein mentioned, Vessel 2; and

(c) in respect of Al Marrouna L.L.C., the time charter dated 1 July 2004 as novated, amended and restated on 18 January 2006, as amended and restated by an amendment and restatement agreement dated 21 March 2012 and as to be further novated, amended and restated on or around the date of the initial Utilisation Date in relation to Tranche 3, to be made between Al Marrouna L.L.C. and Ras Laffan pursuant to which Al Marrouna L.L.C. agree to let and Ras Laffan agree to take on time charter, for the period and upon the terms and conditions therein mentioned, Vessel 3,

and, in each case, including any replacement thereof pursuant to Clause 17.16(d)(iii) (Financial covenant).

Total Loss means, for a Vessel:

(a) its actual, constructive, compromised, arranged or agreed total loss;

(b) its destruction, damage beyond economic repair or being rendered permanently unfit for normal use for any reason whatsoever;

(c) its requisition of title or other compulsory acquisition by any Government Entity (whether de jure or de facto), but excluding requisition for use or hire not involving requisition of title; or

(d) its capture, seizure, arrest, detention, or confiscation (including any requisition for hire) by a Government Entity or any other person and that deprives the relevant Guarantor of that Vessel or any charterer under the relevant Time Charter Party Agreement of the use of that Vessel, for more than 180 days after that occurrence.

Tranche means any of Tranche 1, Tranche 2 and Tranche 3.

Tranche 1 means that part of the Facility made available in respect of Vessel 1 in an amount up to the aggregate of each Lender’s Tranche Commitment for such tranche.

Tranche 2 means that part of the Facility made available in respect of Vessel 2 in an amount up to the aggregate of each Lender’s Tranche Commitment for such tranche.

Tranche 3 means that part of the Facility made available in respect of Vessel 3 in an amount up to the aggregate of each Lender’s Tranche Commitment for such tranche.

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Tranche Commitment means, in respect of any Lender:

(a) in respect of Tranche 1, the amount stated as its ‘Tranche 1 Commitment’;

(b) in respect of Tranche 2, the amount stated as its ‘Tranche 2 Commitment’; and

(c) in respect of Tranche 3, the amount stated as its ‘Tranche 3 Commitment’,

in each case as specified for such Lender in Schedule 7 (The Lenders, Notices, Commitments and Relevant Percentages) from time to time and to the extent not cancelled, reduced or transferred by such Lender in accordance with this Agreement.

Transaction Security means the Security created or evidenced or expressed to be created or evidenced under or pursuant to the Security Documents.

Transfer Certificate means a certificate substantially in the form set out in Schedule 9 (Form of Transfer Certificate) with any amendments which the Facility Agent may approve or reasonably require or any other form agreed between the Facility Agent and the Borrower.

Transfer Date means, in relation to an assignment or a transfer, the later of:

(a) the proposed Transfer Date specified in the relevant Assignment Agreement or Transfer Certificate; and

(b) the date on which the Facility Agent executes the relevant Assignment Agreement or Transfer Certificate.

Unpaid Sum means any sum due and payable but unpaid by the Borrower under a Finance Document.

US Tax Obligor means:

(a) a person which is resident for tax purposes in the United States of America; or

(b) a person some or all of whose payments under the Finance Documents are from sources within the United States of America for US federal income tax purposes.

USD or US Dollars means the lawful currency of the United States of America.

Utilisation means a utilisation of the Facility.

Utilisation Date means the date of a Utilisation, being the date on which the relevant Loan is to be made.

Utilisation Request means a notice substantially in the form set out in Schedule 2 (Form of Utilisation Request).

Vessel means any of Vessel 1, Vessel 2, and Vessel 3.

Vessel 1 means the liquefied natural gas carrier Al Areesh (Hull No. 2239) owned or to be owned by Al Areesh L.L.C.

Vessel 2 means the liquefied natural gas carrier Al Daayen (Hull No. 2240) owned or to be owned by Al Daayen L.L.C.

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Vessel 3 means the liquefied natural gas carrier Al Marrouna (Hull No. 2238) owned or to be owned by Al Marrouna L.L.C.

Vessel Consultant means Poten & Partners (UK) Ltd., or any one of Clarkson PLC, RS Platou LLP, E.A. Gibson Shipbrokers Limited, Fearnleys or MJLF & Associates as nominated by the Borrower or such other vessel consultant as may be agreed from time to time by the Borrower and the Facility Agent.

Vessel Flag means, in respect of a Vessel, the Original Flag or such other flag as may be selected by the applicable Guarantor with the consent of the Facility Agent (such consent not to be unreasonably withheld or delayed).

Vessel Mortgage means a first priority mortgage granted by a Guarantor in favour of the Finance Parties in respect of the Vessel owned by such Guarantor.

Voluntary Prepayment Date has the meaning given to that term in Clause 11.3(b) (Voluntary prepayment).

Voluntary Prepayment Notice has the meaning given to that term in Clause 11.3(a) (Voluntary prepayment).

1.2 Interpretation

(a) Except where the context otherwise requires, words denoting the singular shall include the plural and vice versa, words denoting a gender shall include every gender and references to persons shall include bodies corporate and unincorporated.

(b) References to Clauses and Schedules are references to clauses and schedules of this Agreement.

(c) The Schedules form part of this Agreement and shall have the same force and effect as if expressly set out in the body of this Agreement and any reference to this Agreement shall include the Schedules.

(d) Clause headings are inserted for convenience only and shall not affect the construction of this Agreement.

(e) References to a Party, a Finance Party, the Facility Agent, the Security Agent, a Lender, the Borrower, a Guarantor or any other person shall be construed so as to include its successors in title, permitted assigns and permitted transferees.

(f) References in this Agreement to any other agreements and documents shall be construed as references to such agreements or documents as amended, supplemented or restated, novated or replaced from time to time. References to an amendment include a supplement, novation, restatement or re-enactment and amended will be construed accordingly.

(g) A period of time shall be construed as a reference to a period of time measured by the Gregorian calendar and all interest, costs, expenses, commission and fees under any Finance Document shall, subject to the provisions of Clause 9.6(c) (Accounts certifications and determinations), be calculated according to the Gregorian calendar. Unless stated otherwise, a reference to a time of day is a reference to Doha time.

(h) Unless otherwise stated a reference to determines or determined means a determination made in the absolute discretion of the person making the determination, acting reasonably.

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(i) References in this Agreement to month or months mean a period beginning in one calendar month and ending in the relevant later calendar month on the day numerically corresponding to the day of the calendar month in which it started, provided that: (a) if the period started on the last Business Day in a calendar month or if there is no such numerically corresponding day, it shall end on the last Business Day in such later calendar month; and (b) if such numerically corresponding day is not a Business Day, the period shall end on the next following Business Day in such later calendar month but if there is no such Business Day it shall end on the preceding Business Day, and monthly shall be construed accordingly.

(j) An Event of Default is continuing if it has not been waived and a Default is continuing if it has not been remedied or waived.

(k) Any references in this Agreement to amounts or obligations owed to or by the Facility Agent shall be deemed to be references to amounts or obligations owed to or by the Facility Agent acting as agent on behalf of the Lenders.

(l) References to “know your customer requirements” are the identification checks that the Facility Agent or a Lender requires in order to meet its obligations under any applicable law or regulation to identify a person who is (or is to become) its customer.

(m) Any reference in this Agreement to any statute or statutory provision shall, unless the context otherwise requires, be construed as a reference to such statute or statutory provision as the same may have been or may from time to time be amended, modified, extended, consolidated, re-enacted or replaced.

(n) Any references in this Agreement to including mean including without limitation.

1.3 Capacity of Parties

Where there are references in this Agreement to:

(a) any Party; and

(b) any obligations or liabilities of one or more such Parties,

these shall be strictly construed as references to any such person or (as the case may be) obligations or liabilities of any such person solely in its capacity as that Party.

1.4 Third party rights

(a) Unless expressly provided to the contrary in a Finance Document, a person who is not a party to a Finance Document has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of that Finance Document.

(b) Notwithstanding any term of any Finance Document, the consent of any person who is not a party to a Finance Document is not required to rescind or vary that Finance Document at any time.

1.5 Deed

The Parties intend that this Agreement will take effect as a deed notwithstanding that any Party may execute it under hand.

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2. FINANCE PARTIES’ RIGHTS AND OBLIGATIONS

2.1 The obligations of each Finance Party under the Finance Documents are several. Failure by a Finance Party to perform its obligations under the Finance Documents does not affect the obligations of any other Party under the Finance Documents. No Finance Party is responsible for the obligations of any other Finance Party under the Finance Documents.

2.2 The rights of each Finance Party under or in connection with the Finance Documents are separate and independent rights and any debt arising under the Finance Documents to a Finance Party from an Obligor shall be a separate and independent debt.

2.3 A Finance Party may, except as otherwise stated in the Finance Documents, separately enforce its rights under the Finance Documents.

3. FACILITY

3.1 The Facility

(a) Subject to the terms and conditions of the Finance Documents, the Facility Agent, on behalf of the Lenders, hereby agrees to make available to the Borrower a term loan facility (the Facility) in an amount up to but not exceeding the aggregate of each Lender’s Tranche Commitments. The Facility shall be made available to the Borrower in three Tranches (being Tranche 1, Tranche 2 and Tranche 3 respectively). Each Tranche is available to the Borrower pursuant to the delivery by the Borrower of one or more Utilisation Requests in accordance with the terms of the Finance Documents in an amount (subject to the aggregate of all Tranche Commitments) in each case of up to but not exceeding the relevant Tranche Commitment.

(b) Subject to the terms and conditions of the Finance Documents, the Borrower may issue multiple Utilisation Requests in respect of each Tranche during the Availability Period.

(c) The Borrower agrees to use the proceeds of the Facility in the following manner:

(i) to pay all fees due under the Finance Documents;

(ii) to fund the Debt Service Reserve Account in accordance with Clause 17.15 (Debt Service Reserve Account);

(iii) to repay or prepay any principal amount, accrued interest and break costs in respect of the Existing Facility;

(iv) to pay any termination sum or other fees in connection with the termination of the Existing Facility, any lease arrangement or any hedging arrangement relating to any Vessel or any indebtedness relating to the financing of any Vessel;

(v) to refund part of the equity contributions previously made to the Borrower or the owners of any Vessel (or their direct or indirect shareholders or equity holders) and/or the Guarantors or otherwise in relation to any Vessel;

(vi) to fund the acquisition of (i) shares or any equivalent equity interest in any Vessel-owning entity that will, following such acquisition, be a wholly owned subsidiary of the Borrower or (ii) any Vessel that, following such acquisition, will be wholly owned by a wholly owned subsidiary of the Borrower; or (iii) any Time Charter Party Agreement or any time charter party purchase or novation agreement relating to a Vessel; and

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(vii) to make loans to any Guarantor, any Existing Borrower and Teekay Nakilat (II) Limited for any of the purposes set out in (i) to (vi) above.

(d) No Finance Party is bound to monitor or verify the application of any utilisation of the Facility.

3.2 Automatic cancellation

Any unutilised portion of any Tranche Commitment shall be automatically cancelled at the end of the Availability Period.

3.3 Availability Period Extension

(a) The Availability Period may, at the discretion of each of the Borrower and the Facility Agent (acting on the instructions of all the Lenders), be extended (an Availability Period Extension) up to and including 30 June 2015 if such an extension is required by the Borrower.

(b) Should the Borrower require an Availability Period Extension, it shall provide a written request (an Availability Period Extension Request) to the Facility Agent at least 10 Business Days before the then scheduled expiry date of the Availability Period specifying the date to which the Borrower wishes the Availability Period to extend.

(c) The Facility Agent shall, within five (5) Business Days of receipt of any such Availability Period Extension Request, confirm whether the requested Availability Period Extension shall be granted. If the Facility Agent does not respond within such period, the Availability Period Extension Request shall be deemed not to be granted.

(d) If the Facility Agent confirms that an Availability Period Extension shall be granted, the Availability Period shall be extended to the date requested by the Borrower under the relevant Availability Period Extension Request.

(e) If the Facility Agent does not grant an Availability Period Extension pursuant to an Availability Period Extension Request, the Availability Period shall end on the scheduled expiry date of the Availability Period before the Availability Period Extension Request was submitted.

(f) In the case of any Availability Period Extension pursuant to this Clause 3.3: (i) the Borrower shall pay to the Facility Agent (for the account of each Lender) an extension fee in relation to the Availability Period Extension in an amount equal to 0.25% of the aggregate of each Lender’s Available Tranche Commitments in each case as at 31 January 2015 (the Availability Period Extension Fee); and (ii) if any Repayment Instalment in Schedule 3 (Amortisation Schedule) otherwise would have fallen due for payment before the First Repayment Date (as adjusted as a result of the Availability Period Extension) had the Availability Period Extension not been granted, Schedule 3 (Amortisation Schedule) shall be adjusted so that the amount of any such Repayment Instalment shall be added to the final Repayment Instalment and the number of Repayment Instalments will be reduced accordingly by removing such Repayment Instalments.

(g) Any Availability Extension Fee pursuant to paragraph (f) shall be payable by the Borrower on or before 9 February 2015.

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4. CONDITIONS PRECEDENT DOCUMENTATION

4.1 The Borrower shall not be entitled to deliver the Initial Utilisation Request under this Agreement until the Facility Agent (acting on behalf of the Lenders) has received or waived the requirement to receive each of the documents and evidence set out in Schedule 1 (Conditions Precedent) in form and substance satisfactory to the Facility Agent. The Facility Agent shall promptly notify the Borrower, in writing, upon being so satisfied.

4.2 The conditions specified in Clause 4.1 are inserted solely for the benefit of the Facility Agent (acting on behalf of the Lenders) and may be waived in whole or in part by the Facility Agent (acting on behalf of the Lenders).

5. CONDITIONS OF UTILISATION

5.1 A Utilisation Request will not be regarded as having been duly completed unless it complies with the following conditions:

(a) the proposed Utilisation Date is a Business Day falling within the Availability Period;

(b) following the delivery of such Utilisation Request, there is (or would be), in respect of any tranche, no more than five (5) Loans outstanding under that Tranche at such time;

(c) the amount specified in any Utilisation Request applicable to a particular Tranche shall not exceed the Available Tranche Commitment for that Tranche; and

(d) the currency and amount of the Loan comply with Clause 5.2 (Currency and amount).

5.2 Currency and amount

(a) The currency specified in a Utilisation Request must be US Dollars.

(b) The amount of the proposed Loan must be:

(i) a minimum of USD 5,000,000 and an integral multiple of USD 1,000,000 or, if less, the Available Tranche Commitment for the relevant Tranche; or

(ii) such other amount as the Facility Agent may agree.

5.3 The Lenders will not be obliged to comply with Clause 6.1(c) (Utilisation Request) or Clause 6.2 (Lenders’ participation):

(a) if a Default or an Event of Default is continuing or would result from the proposed Utilisation; and

(b) unless each representation and warranty in:

(i) Clause 15 (Representations and Warranties), other than Clause 15.7 (Deduction of Tax), Clause 15.8 (No filing or stamp taxes) and Clause 15.9 (No default); and

(ii) clause 3 (Representations and Warranties) of each Guarantee, other than clause 3.7 (Deduction of Tax) and clause 3.8 (No filing or stamp taxes),

is true and correct in all material respects as at the Utilisation Date for the relevant Loan.

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6. UTILISATION

6.1 Utilisation Request

(a) To utilise the Facility, the Borrower shall give to the Facility Agent a duly completed Utilisation Request:

(i) in the case of the Initial Utilisation Request only, by no later than 12 p.m. (Doha time), on the day before the proposed Utilisation Date; and

(ii) in the case of all other Utilisation Requests, by no later than 12 p.m. (Doha time), two (2) days before the proposed Utilisation Date.

(b) Once given, a Utilisation Request will be irrevocable.

(c) On the initial Utilisation Date specified in a duly completed Utilisation Request in respect of any Tranche, on or before the time that the proceeds of a Loan are to be transferred to the account of the Existing Lenders or any other third party as may be specified in the Utilisation Request, the Facility Agent shall, if requested by the Borrower, issue a payment undertaking to the Existing Lenders and/or any such third party in the form set out in Schedule 11 (Form of Payment Undertaking) together with an agreed form MT199 and MT103.

6.2 Lenders’ participation

(a) If the conditions set out in this Agreement have been met, each Lender shall make its participation in each Loan available by the Utilisation Date for such Loan through its Facility Office.

(b) The amount of each Lender’s participation in each Loan in respect of any Tranche will be equal to the proportion borne by its Available Tranche Commitment in respect of that Tranche to the aggregate Available Tranche Commitment of each Lender in that Tranche immediately prior to making the Loan.

(c) The Facility Agent shall notify each Lender of the amount of each Loan and the amount of its participation in that Loan promptly following the delivery by the Borrower of a duly completed Utilisation Request.

(d) No Lender is obliged to participate in a Loan in respect of any Tranche if, as a result:

(i) its participation in the Loans applicable to that Tranche would exceed its Tranche Commitment in respect of that Tranche; or

(ii) the Loans would exceed the aggregate of each Lender’s Tranche Commitment in respect of that Tranche.

7. REPAYMENT

7.1 Repayment of Loans

The Borrower shall repay the Loans made to it in instalments by repaying on each Repayment Date on and from the First Repayment Date the Repayment Instalment applicable to such Repayment Date being an amount equal to the percentage of the aggregate principal amount of all Loans outstanding under each Tranche on and including the last date of the Availability Period set out opposite that Repayment Date in Schedule 3 (Amortisation Schedule), provided that such Repayment Instalments shall be reduced by any pre-payments in accordance with Clause 11.6 (Application of pre-payments).

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7.2 Termination Date

The Loans must be repaid in full on the Termination Date.

8. REBORROWING

The Borrower may not reborrow any part of the Facility that is repaid.

9. COSTS OF UTILISATION

9.1 Interest and other amounts

(a) The rate of interest on each Loan for each Interest Period is the percentage rate per annum which is the aggregate of:

(i) the Margin; and

(ii) LIBOR.

(b) The Borrower shall pay accrued interest on each Loan on the last day of each Interest Period.

(c) The Facility Agent shall promptly notify the Borrower of the determination of a rate of interest under this Agreement once determined in accordance with paragraph (a) above.

(d) Any prepayment under this Agreement shall be made together with accrued interest on the amount prepaid and, subject to any Break Costs, without premium or penalty.

9.2 Interest Periods

(a) Each Interest Period for a Loan shall start on the Utilisation Date for that Loan or (if already made) on the last day of its preceding Interest Period.

(b) Each Interest Period for a Loan shall end on the earlier of (i) the date falling three (3) months from the date referred to in paragraph (a) above; (ii) the last day of the Interest Period of any then outstanding Loan; and (iii) the next occurring Repayment Date.

(c) If an Interest Period would otherwise end on a day that is not a Business Day, that Interest Period will instead end on the next Business Day in that calendar month (if there is one) or the preceding Business Day (if there is not).

(d) If an Interest Period would otherwise overrun the Termination Date, it will be shortened so that it ends on the Termination Date.

9.3 Inability to determine rates

Where LIBOR is to be calculated on any Loan by reference to the Reference Banks but no Reference Bank supplies a rate when required to do so under this Agreement:

(a) the Facility Agent must promptly notify the Borrower and the Lenders of such market disruption event; and

(b) the rate of interest on each Lender’s share of that Loan for the Interest Period shall be the percentage rate per annum which is the aggregate of:

(i) the Margin; and

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(ii) the rate notified to the Facility Agent by that Lender as soon as practicable but by no later than the date when interest is due to be paid in respect of that Interest Period to be that which expresses as a percentage rate per annum the cost to that Lender of funding its participation in that Loan from whatever source it may reasonably select.

9.4 Break Costs

(a) The Borrower shall, within three (3) Business Days of demand by the Facility Agent, pay its Break Costs attributable to all or any part of a Loan or Unpaid Sum being paid by the Borrower on a day other than the last day of an Interest Period for that Loan or Unpaid Sum.

(b) Each Lender shall, as soon as reasonably practicable after a demand by the Facility Agent in accordance with paragraph (a), provide a certificate confirming the amount of its Break Costs for any Interest Period in which they accrue.

9.5 Currency of account

All payments by the Borrower under the Finance Documents must be paid in US Dollars. Any payments by the Borrower relating to costs, losses, expenses or Taxes may, at the request of the Facility Agent, be made in the currency in which the relative costs, losses, expenses or Taxes were incurred. Any currency exchange for the purposes of this Clause 9.5 shall be undertaken at the Spot Rate of Exchange.

9.6 Accounts certifications and determinations

(a) Any certification or determination by any Administrative Agent of a rate or amount under any Finance Document is, in the absence of manifest error, prima facie evidence of the matters to which it relates.

(b) Accounts maintained by the Facility Agent in connection with this Agreement are prima facie evidence of the matters to which they relate for the purpose of any litigation or arbitration proceedings.

(c) Any interest or fee accruing under this Agreement accrues from day to day and is calculated on the basis of the actual number of days elapsed and a year of 360 days.

9.7 Set-off

Except as expressly provided to the contrary in the Finance Documents, all payments (including each Repayment Instalment) by the Borrower under any Finance Document shall be made in full without any set-off or counterclaim.

10. DEFAULT INTEREST

10.1 If the Borrower fails to pay any amount payable by it under a Finance Document on its due date, interest shall accrue on the overdue amount from the due date up to the date of actual payment (both before and after judgment) at a rate that, subject to Clause 10.2 below, is one per cent. higher than the rate that would have been payable if the overdue amount had, during the period of non-payment, constituted a Loan in the currency of the overdue amount for successive Interest Periods, each of a duration selected by the Facility Agent (acting reasonably). Any interest accruing under this Clause 10.1 shall be immediately payable by the Borrower on demand by the Facility Agent.

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10.2 If any overdue amount consists of all or part of a Loan that became due on a day that was not the last day of an Interest Period relating to that Loan:

(a) the first Interest Period for that overdue amount shall have a duration equal to the unexpired portion of the current Interest Period relating to that Loan; and

(b) the rate of interest applying to the overdue amount during that first Interest Period shall be one per cent. higher than the rate that would have applied if the overdue amount had not become due.

10.3 Default interest (if unpaid) arising on an overdue amount will be compounded with the overdue amount at the end of each Interest Period applicable to that overdue amount but will remain immediately due and payable.

11. PREPAYMENT

11.1 Mandatory prepayment – Illegality

(a) If, having taken such mitigating steps reasonably available to it (including pursuant to Clause 30.1(c)(Mitigation), it is unlawful in any applicable jurisdiction for any Lender to perform any of its obligations under a Finance Document or to fund or maintain its participation in any Loan and that Lender has notified the Facility Agent of that fact, the Facility Agent shall notify the Borrower promptly that:

(i) the Borrower shall pay or prepay the participation of that Lender in each Loan (together with, for the avoidance of doubt, that Lender’s proportion of the accrued interest and any Break Costs for that Loan) on the date specified in Clause 11.1(b); and

(ii) all Tranche Commitments of that Lender shall be immediately cancelled.

(b) The date for payment or prepayment of the participation of a Lender in a Loan shall be:

(i) the last day of the current Interest Period of that Loan; or

(ii) if earlier, the date specified by the Lender in the notification under Clause 11.1(a), which shall not be earlier than the last day of any applicable grace period allowed by law.

11.2 Right of prepayment and cancellation of a single Lender

(a) If the Borrower is, or shall be, required to pay to a Lender (or to the Facility Agent for the account of that Lender):

(i) a Tax Payment;

(ii) an Increased Cost; or

(iii) a FATCA Deduction,

the Borrower may, while the requirement continues, give notice to the Facility Agent requesting payment or prepayment and cancellation in respect of that Lender.

(b) After notification under Clause 11.2(a):

(i) the Borrower shall pay or prepay the participation of that Lender in each Loan on the date specified in Clause 11.2(c); and

(ii) all Tranche Commitments of that Lender shall be immediately cancelled.

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(c) The date for payment or prepayment of the participation of that Lender in each Loan shall be:

(i) the last day of the current Interest Period for that Loan; or

(ii) if earlier, the date specified by the Borrower in the notification under Clause 11.2(a).

11.3 Voluntary prepayment

(a) The Borrower may, by notice in writing to the Facility Agent, inform the Facility Agent of its desire to make a voluntary prepayment of a Loan in respect of any Tranche in full or in part prior to the relevant Repayment Date (a Voluntary Prepayment Notice).

(b) A Voluntary Prepayment Notice given by the Borrower must be given no less than five (5) Business Days prior to the proposed date for the voluntary prepayment of all or part of the Loan (the Voluntary Prepayment Date).

(c) Any voluntary prepayment under this Clause 11.3 shall, if only reducing the Facility or any Tranche in part, be in a minimum amount of USD 5,000,000 or any integral multiple thereof.

(d) A Voluntary Prepayment Notice shall be effective only upon receipt by the Facility Agent, shall be irrevocable and shall oblige the Borrower to pay the relevant Loan in full or in part (as the case may be and as specified in the Voluntary Prepayment Notice) on the Voluntary Prepayment Date.

(e) Any purported Voluntary Prepayment Notice that does not comply with the requirements of this Clause 11.3 shall not be valid and the Facility Agent shall not be obliged to take any notice thereof.

11.4 Mandatory prepayment – Charterer option to purchase a Vessel

If Ras Laffan exercises its rights pursuant to the Time Charter Party Agreement in respect of a Vessel to purchase (either itself or through a nominee) such Vessel (the Purchase Option Vessel) then, provided the Borrower provides the notice referred to in Clause 16.8(a) (Notifications under Time Charter Party Agreements) to the Facility Agent not less than 30 days prior to the proposed date for sale of such Purchase Option Vessel to Ras Laffan:

(a) on or before the date for sale of such Purchase Option Vessel to Ras Laffan, the Borrower shall make, or procure the making of, a payment or prepayment in full of the aggregate Loans then outstanding in respect of the Tranche to which such Purchase Option Vessel relates; and

(b) on the same day as payment or prepayment (as applicable) is made pursuant to paragraph (a), the Security Agent shall, pursuant to Clause 26 (Releases of Security), release any Transaction Security in respect of the Purchase Option Vessel and otherwise do all things necessary to enable the applicable Guarantor to deliver the Purchase Option Vessel to Ras Laffan free of all Transaction Security.

11.5 Restrictions

(a) Any notice of cancellation or prepayment given by any Party under Clause 11.2 (Right of prepayment and cancellation of a single Lender) shall be irrevocable and, unless a contrary indication appears in this Agreement, shall specify the date or dates upon which the relevant cancellation or prepayment is to be made and the amount of that cancellation or prepayment.

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(b) The Borrower shall not prepay any Loan or cancel all or part of the Facility except at the times and in the manner expressly provided for in this Agreement.

(c) No amount of the Facility cancelled under this Agreement may be subsequently reinstated.

(d) The Borrower may not reborrow any part of the Facility that is prepaid.

11.6 Application of pre-payments

Any partial pre-payment of any Loan pursuant to Clauses 11.1 (Mandatory prepayment – Illegality) or 11.2 (Right of prepayment and cancellation of a single Lender) shall satisfy the obligations of the Borrower under Clause 7 (Repayment) pro rata. Any partial pre-payment of any Tranche pursuant to Clause 11.3 (Voluntary Prepayment) or any prepayment pursuant to Clauses 11.4 (Mandatory prepayment – Charterer option to purchase a Vessel) shall satisfy the obligations of the Borrower under Clause 7 (Repayment) and in respect of such Tranche in order of their scheduled occurrence.

12. TAX GROSS-UP AND INDEMNITY

12.1 All payments to be made by the Borrower to any Finance Party under any Finance Document shall be made free and clear of and without Tax Deduction unless the Borrower is required to make such a payment subject to the deduction or withholding of any Tax, in which case the sum payable by the Borrower (in respect of which such deduction or withholding is required to be made) shall be increased to the extent necessary to ensure that the relevant Finance Party receives a sum net of any deduction or withholding equal to the sum which it would have received had no such deduction or withholding been made or required to be made.

12.2 A payment shall not be increased if on the date on which the payment falls due, the payment could have been made to a Finance Party without a Tax Deduction if either (i) that Finance Party had complied with its obligations at Clause 12.3 or Clause 30.1(a) (Mitigation) or (ii) the Facility Office of that Finance Party was in Qatar.

12.3 If the Borrower is required to make a FATCA Deduction:

(a) the Borrower must make the FATCA Deduction and any payment required in connection with that FATCA Deduction within the time allowed and in the minimum amount required by FATCA;

(b) the amount of the payment due from the Borrower will be increased to an amount which (after making any FATCA Deduction) leaves an amount equal to the payment which would have been due if no FATCA Deduction had been required;

(c) the Borrower must, promptly upon becoming aware that it must make a FATCA Deduction (or that there is any change in the rate or the basis of a FATCA Deduction), notify the Facility Agent accordingly; and

(d) within 30 days of making that FATCA Deduction or any payment required in connection with that FATCA Deduction, the Borrower must deliver to the Facility Agent evidence reasonably satisfactory to the Facility Agent that the FATCA Deduction has been made or (as applicable) any appropriate payment has been paid to the relevant governmental or taxation authority.

12.4 Clause 12.3 shall only apply if and to the extent the Borrower becomes a FATCA FFI or a US Tax Obligor.

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12.5 Each Finance Party and the Borrower shall co-operate in completing any procedural formalities necessary for the Borrower to obtain authorisation to make the payment without a Tax Deduction.

12.6 Each Finance Party shall notify the Facility Agent (and the Facility Agent shall so notify the Borrower) promptly upon that Finance Party becoming aware of any Tax Deduction or FATCA Deduction being required or that there is any change in the rate or the basis of a Tax Deduction or FATCA Deduction in respect of a payment payable to it or by it.

12.7 The Borrower shall (within three (3) Business Days of demand by the Facility Agent) pay to a Lender an amount equal to the loss, liability or cost which that Lender determines will be or has been (directly or indirectly) suffered for or on account of Tax by that Lender in respect of a Finance Document.

12.8 Clause 12.7 shall not apply:

(a) with respect to any Tax assessed on a Lender:

(i) under the law of the jurisdiction in which that Lender is incorporated or, if different, the jurisdiction (or jurisdictions) in which that Lender is treated as resident for tax purposes; or

(ii) under the law of the jurisdiction in which that Lender’s facility office is located in respect of amounts received or receivable in that jurisdiction,

if that Tax is imposed on or calculated by reference to the net income received or receivable (but not any sum deemed to be received or receivable) by that Lender; or

(b) to the extent a loss, liability or cost:

(i) is compensated for by an increased payment under Clauses 12.1 to 12.6 (inclusive) or Clause 13.1(b) (FATCA Deduction by a Finance Party);

(ii) would have been compensated for by an increased payment under Clauses 12.1 to 12.6 (inclusive) but was not so compensated solely because one of the exclusions in Clause 12.2 applied; or

(iii) is compensated for by a payment under Clause 13.1(d) (FATCA Deduction by a Finance Party) (or would have been compensated for by a payment under Clause 13.1(d) (FATCA Deduction by a Finance Party) but was not so compensated because of the exclusion in Clause 13.1(e)) (FATCA Deduction by a Finance Party).

12.9 If the Borrower makes a payment pursuant to either Clause 12.1 or Clause 12.7 (for the purposes of this Clause 12.9 a Tax Payment) and the relevant Finance Party obtains a credit against, relief or remission for, or repayment of, any Tax attributable to the payment or deduction or withholding to which such Tax Payment relates, the Finance Party shall pay an amount to the Borrower which that Finance Party reasonably determines will leave it (after that payment) in the same after-Tax position as it would have been in had the Borrower not made the applicable Tax Payment.

13. FATCA APPLICATION

13.1 FATCA Deduction by a Finance Party

(a) Each Finance Party may make any FATCA Deduction it is required by FATCA to make, and any payment required in connection with that FATCA Deduction, and no Finance Party is required to increase any payment in respect of which it makes such a FATCA Deduction or otherwise compensate the recipient of the payment for that FATCA Deduction. If a Finance

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Party becomes aware that it must make a FATCA Deduction in respect of a payment to another Party (or that there is any change in the rate or the basis of such FATCA Deduction) it must notify that Party and the Facility Agent.

(b) If the Facility Agent is required to make a FATCA Deduction in respect of a payment to a Finance Party under the Finance Documents that relates to a payment by the Borrower, the amount of the payment due from the Borrower will be increased to an amount that (after the Facility Agent has made such FATCA Deduction), leaves the Facility Agent with an amount equal to the payment that would have been made by the Facility Agent if no FATCA Deduction had been required.

(c) The Facility Agent must promptly upon becoming aware that it must make a FATCA Deduction in respect of a payment to a Finance Party under the Finance Documents that relates to a payment by the Borrower (or that there is any change in the rate or the basis of such a FATCA Deduction) notify the Borrower and relevant Finance Party.

(d) Subject to paragraph (e), the Borrower must (within three (3) Business Days of demand by the Facility Agent) pay to a Finance Party an amount equal to the loss, liability or cost which that Finance Party determines will be or has been (directly or indirectly) suffered by that Finance Party as a result of another Finance Party making a FATCA Deduction in respect of a payment due to it under a Finance Document. This paragraph does not apply to the extent a loss, liability or cost is compensated for by an increased payment under paragraph (b) above.

(e) Paragraph (d) shall only apply if and to the extent the Borrower becomes a FATCA FFI or a US Tax Obligor.

(f) A Finance Party making, or intending to make, a claim under paragraph (d) above must promptly notify the Facility Agent of the FATCA Deduction that will give, or has given, rise to the claim, following which the Facility Agent must notify the Borrower.

(g) A Finance Party must, on receiving a payment from the Borrower under this Clause, notify the Facility Agent.

13.2 Tax Credit and FATCA

If the Borrower makes a FATCA Payment and the relevant Finance Party determines that:

(a) a Tax Credit is attributable to an increased payment of which that FATCA Payment forms part, to that FATCA Payment or to a FATCA Deduction in consequence of which that FATCA Payment was required; and

(b) that Finance Party has obtained and used that Tax Credit,

then that Finance Party must pay an amount to the Borrower which that Finance Party determines will leave it (after that payment) in the same after-Tax position as it would have been in had the FATCA Payment not been required to be made by the Borrower.

14. FATCA INFORMATION

14.1 FATCA confirmation

(a) Subject to paragraph (c) below, each Party must, within ten (10) Business Days of a reasonable request by another Party:

(i) confirm to that other Party whether it is:

(A) a FATCA Exempt Party; or

(B) not a FATCA Exempt Party; and

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(ii) supply to that other Party such forms, documentation and other information relating to its status under FATCA (including its applicable “passthru payment percentage” or other information required under relevant US Treasury regulations or other official guidance including intergovernmental agreements) as that other Party reasonably requests for the purposes of that other Party’s compliance with FATCA; and

(iii) supply to that other Party such forms, documentation and other information relating to its status as that other Party reasonably requests for the purposes of that other Party’s compliance with any other law, regulation, or exchange of information regime.

(b) If a Party confirms to another Party pursuant to paragraph (a)(i) above that it is a FATCA Exempt Party and it subsequently becomes aware that it is not, or has ceased to be a FATCA Exempt Party, that Party must notify that other Party promptly.

(c) A Finance Party is not obliged to do anything under paragraph (a) above, and no other Party is obliged to do anything under paragraph (a)(iii) above, in each case, which would or might in its reasonable opinion constitute a breach of:

(i) any law or regulation;

(ii) any fiduciary duty; or

(iii) any duty of confidentiality.

14.2 Failure to confirm FATCA status

If a Party fails to confirm its status or to supply forms, documentation or other information requested in accordance with Clause 14.1(a) above (including, for the avoidance of doubt, where Clause 14.1(c) (FATCA confirmation) applies), then:

(a) if that Party failed to confirm whether it is (or remains) a FATCA Exempt Party then such Party is to be treated for the purposes of the Finance Documents (and payments made under them) as if it is not a FATCA Exempt Party; and

(b) if that Party failed to confirm its applicable “passthru payment percentage” then such Party is to be treated for the purposes of the Finance Documents (and payments made under them) as if its applicable passthru percentage is 100%,

until (in each case) such time as the Party in question provides the requested confirmation, forms, documentation or other information.

15. REPRESENTATIONS AND WARRANTIES

The Borrower makes the representations and warranties set out in this Clause 15 to each Finance Party on the dates set out in Clause 15.14 (Time for making representations and warranties) and acknowledges that each Finance Party has entered into this Agreement in reliance on those representations and warranties.

15.1 Status

(a) It is a limited liability company formed and validly existing under the laws of the Republic of the Marshall Islands.

(b) It has the power to own its assets and carry on its business as it is being conducted.

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15.2 Binding obligations

The obligations expressed to be assumed by it in the Finance Documents to which it is a party are, subject to the Legal Reservations, legal, valid, binding and enforceable obligations.

15.3 Execution of the Finance Documents

The execution and entry into by it of the Finance Documents to which it is a party and the exercise of its rights and performance of its obligations thereunder do not and will not conflict with:

(a) its constitutional documents;

(b) any law or regulation applicable to it; or

(c) any obligations to which it is subject under any agreement or instrument binding upon it or its assets, where such conflict would have a Material Adverse Effect.

15.4 Power and authority

It has the power to enter into, perform and deliver those Finance Documents to which it is a party and all corporate and other action required to authorise the entry into, performance and delivery of those Finance Documents to which it is a party and the transactions contemplated by those Finance Documents.

15.5 Validity and admissibility in evidence

All Authorisations required:

(a) to enable it lawfully to enter into, exercise its rights under and perform and comply with the obligations expressed to be assumed by it in the Finance Documents to which it is a party;

(b) to ensure that the obligations expressed to be assumed by it in the Finance Documents to which it is a party are legal, valid, binding and enforceable; and

(c) to make the Finance Documents to which it is a party admissible in evidence in the Republic of the Marshall Islands,

where already required, have been obtained or effected and are in full force and effect or, where not yet required, will be promptly obtained or effected by the time required.

15.6 Governing law and enforcement

(a) In respect of each Finance Document to which it is a party, any:

(i) irrevocable submission under such Finance Document to the jurisdiction to which such agreement is stated to be subject;

(ii) agreement as to the governing law of such Finance Document; and

(iii) agreement not to claim any immunity to which it or its assets may be entitled,

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is legal, valid and binding under the laws of the Republic of the Marshall Islands.

(b) The courts of the Republic of The Marshall Islands should recognise as valid and enforce any judgment obtained by a Finance Party against the Borrower in the court of a foreign country without a retrial on the merits provided that (i) the judgment is for a sum of money and is final in the jurisdiction granting the judgment, (ii) the court granting the judgment had jurisdiction under the laws of the place where it sat and the judgment does not offend principles of the Republic of The Marshall Islands as to due process, propriety or public order, and (iii) the defendant was actually present in person or by duly appointed representative and the judgment does not constitute in effect a default judgment.

15.7 Deduction of Tax

As at the date of this Agreement, it is not required to make any deduction for or on account of Tax from any payment it may make under any Finance Document to a Lender.

15.8 No filing or stamp taxes

As at the date of this Agreement, except in respect of the registration of the Account Pledge Agreement in Qatar and the registration of the Vessel Mortgages at the Bahamas Maritime Authority, it is not necessary, under the laws of the Republic of the Marshall Islands, that the Finance Documents, be filed, recorded or enrolled with any court or other authority in such jurisdiction, or that any stamp, registration or similar tax be paid on or in relation to the Finance Documents or the transactions contemplated by the Finance Documents.

15.9 No default

As at the date of this Agreement, no Default is continuing or will result from the entry into or performance of any transaction contemplated by any Finance Document to which it is a party.

15.10 Financial statements

The most recent financial statements of the Borrower have been prepared in accordance with IFRS consistently applied and give a true and fair view of its financial condition and operations during the relevant financial year.

15.11 No material proceedings

As far as it is aware, no action or administrative proceeding of or before any court or agency which, if adversely determined, might reasonably be expected to have a Material Adverse Effect has been started or threatened against it (other than any legal proceedings which could not reasonably be expected to be adversely determined against it).

15.12 No winding-up or bankruptcy

It has not taken any corporate action nor have any other steps been taken or legal proceedings been started or (to the best of its knowledge and belief) threatened against it for its winding-up, bankruptcy, dissolution, administration or reorganisation (whether by voluntary arrangement, scheme of arrangement or otherwise) or for the appointment of a receiver, administrator, administrative receiver, conservator, custodian, trustee or similar officer of it or of any or all of its assets or revenues.

15.13 Pari passu ranking

Its payment obligations under the Finance Documents to which it is party rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors save those whose claims are mandatorily preferred by the law of the Republic of the Marshall Islands applying to companies registered in the Republic of the Marshall Islands generally.

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15.14 Time for making representations and warranties

(a) Subject to paragraph (c), the representations and warranties set out in this Clause 15 are made by the Borrower on the date of this Agreement.

(b) Subject to paragraph (c), each representation and warranty set out in this Clause 15 (other than those contained in Clauses 15.7 (Deduction of tax), 15.8 (No filing or stamp taxes), and 15.9 (No default)) is deemed to be repeated by the Borrower on the date of each Utilisation Request, on each Utilisation Date and on the first day of each Interest Period by reference to the facts and circumstances existing at the time of such repetition.

(c) The representation and warranty set out in Clause 15.10 (Financial statements) shall not be made until the date on which audited financial statements are first delivered in accordance with Clause 16.1 (Financial statements) and shall be made on such date and thereafter shall be deemed to be repeated on each relevant subsequent date in accordance with paragraph (b).

16. INFORMATION UNDERTAKINGS

The undertakings in this Clause 16 remain in force from the date of this Agreement for so long as any amount is outstanding under the Finance Documents.

16.1 Financial statements

The Borrower shall supply to the Facility Agent in sufficient copies for all the Lenders as soon as the same become available, but in any event within 180 days after the end of each of its financial years, its audited consolidated financial statements for that financial year.

16.2 Requirements as to financial statements

(a) Each set of financial statements delivered by the Borrower pursuant to Clause 16.1 (Financial statements) shall be certified by an authorised signatory of the Borrower as giving a true and fair view of its financial condition as at the date at which those financial statements were drawn up.

(b) The Borrower shall procure that each set of financial statements delivered pursuant to Clause 16.1 (Financial statements) is prepared using IFRS consistently applied.

(c) The Borrower shall ensure that each set of financial statements delivered pursuant to Clause 16.1 (Financial statements) is audited by a reputable international firm of accountants and, in respect of each set of financial statements delivered after the first set of such financial statements delivered in accordance with Clause 16.1 (Financial statements) is prepared using accounting policies, practices, procedures and reference periods consistent with those applied in the preparation of the first set of financial statements delivered pursuant to Clause 16.1, unless, in relation to any such set of financial statements, the Borrower notifies the Facility Agent that there have been one or more changes in any such accounting policies, practices, procedures or reference periods and the auditors to the Borrower provide:

(i) a description of the changes and the adjustments which would be required to be made to those financial statements in order to cause them to use the accounting policies, practices, procedures and reference period upon which any previous financial statements of the Borrower were prepared; and

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(ii) sufficient information, in such detail and format as may be reasonably required by the Facility Agent, to enable it to make an accurate comparison between the financial position indicated by those financial statements and any previous financial statements of the Borrower,

any such reference in this Agreement to those financial statements shall be construed as a reference to those financial statements as adjusted to reflect the basis upon which the first financial statements of the Borrower were prepared.

16.3 Information: miscellaneous

The Borrower shall supply to the Facility Agent, promptly upon becoming aware of them, details of:

(a) any litigation, arbitration or proceedings brought against it by any governmental, ministerial or administrative body which are current, threatened or pending against it, and which might, if adversely determined, have a Material Adverse Effect;

(b) any Environmental Claim which is current, pending or threatened against it which might, if adversely determined, have a Material Adverse Effect;

(c) any suspension, revocation or modification of any Environmental Approval;

(d) the occurrence of any accident, casualty or other event which has resulted in or may result in a Vessel being or becoming a Total Loss;

(e) the levy of distress on a Vessel or its arrest, detention, seizure, condemnation as prize, compulsory acquisition or requisition for title or use;

(f) a condition of class applied by the applicable Classification Society which has not been satisfied by the date specified in such condition;

(g) any collision or grounding of a Vessel;

(h) a Vessel being detained by any port, governmental or quasi-governmental authority for a period of more than 30 consecutive days;

(i) any refusal by the flag state or the applicable Classification Society to issue or withdraw any trading certification of a Vessel; and

(j) any material damage of or to a Vessel.

16.4 Notification of default

The Borrower shall notify the Facility Agent of any Default (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence (unless the Borrower is aware that a notification has already been provided by a Guarantor).

16.5 Annual Market Valuation Report

The Borrower shall supply to the Facility Agent a Market Valuation Report with respect to each Vessel within 180 days from the financial year end of the applicable Guarantor, such obligation to commence on and from the Initial Utilisation Date.

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16.6 Annual Compliance Certificate

The Borrower shall supply to the Facility Agent a Compliance Certificate in the form set out in Part 1 of Schedule 6 (Compliance Certificate) signed by two directors of the Borrower within 180 days from the financial year end of the Borrower.

16.7 “Know your customer” checks

If:

(a) the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the date of this Agreement; or

(b) any change in the status of the Borrower after the date of this Agreement,

obliges the Facility Agent to comply with “know your customer” or similar identification procedures in circumstances where the necessary information is not already available to it, the Borrower shall promptly upon the request of the Facility Agent supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Facility Agent in order for the Facility Agent to carry out and be satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.

16.8 Notifications under Time Charter Party Agreements

The Borrower shall supply to the Facility Agent, a copy of:

(a) any notice received by any Obligor from Ras Laffan in respect of any exercise by Ras Laffan of its option pursuant to the Time Charter Party Agreement in respect of a Vessel to purchase such Vessel; and

(b) any notice of default issued or received by any Obligor in respect of any Time Charter Party Agreement,

promptly upon receipt of such notice by the Borrower.

17. OTHER UNDERTAKINGS

Except as otherwise stated in this Clause 17, the undertakings in this Clause 17 remain in force from the date of this Agreement for so long as any amount is outstanding under the Finance Documents. Each Party agrees that nothing in this Clause 17 shall prevent the Guarantors from purchasing or otherwise acquiring the Vessels and the Time Charter Party Agreements and any Management Agreements in respect of the Vessels and each of the undertakings in this Clause 17 shall be construed accordingly.

17.1 Authorisations

The Borrower shall promptly:

(a) obtain, comply with and do all that is necessary to maintain in full force and effect; and

(b) supply copies (certified by an authorised signatory of the Borrower) to the Facility Agent of,

any Authorisation required under any law or regulation of the Republic of the Marshall Islands to enable it to perform its obligations under the Finance Documents to which it is party and to ensure the legality, validity, enforceability or admissibility in evidence in the Republic of the Marshall Islands of any Finance Document to which it is party.

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17.2 Permitted purpose

The Borrower shall procure that the proceeds of the Facility are applied only in accordance with Clause 3.1(c) (The Facility).

17.3 Compliance with laws

The Borrower shall comply in all respects with all laws and regulations (including all Environmental Laws) to which it may be subject that are applicable to carrying on its business, if failure so to comply would have a Material Adverse Effect.

17.4 Negative pledge

(a) The Borrower shall not create or permit to subsist any Security over any Borrower Security Property.

(b) Paragraph (a) does not apply to the Transaction Security, any other Security entered into pursuant to any Finance Document or, during the period ending on the initial Utilisation Date for a Tranche, the Existing Security in respect of the Vessel to which that Tranche relates.

17.5 Disposals

The Borrower shall not enter into a single transaction or a series of transactions (whether related or not) and whether voluntary or involuntary to sell, lease, transfer or otherwise dispose of any asset where such transaction would result in the Borrower being in breach of the financial covenant under Clause 17.16 (Financial covenant).

17.6 Merger

The Borrower shall not enter into any amalgamation, demerger, merger or corporate reconstruction other than pursuant to a solvent corporate restructuring.

17.7 Change of business

The Borrower shall procure that no substantial change is made to the general nature of its business from that carried on at the date of this Agreement.

17.8 Acquisition of assets

Except as otherwise expressly permitted by the Finance Document, the Borrower shall not acquire any asset where such acquisition would result in the Borrower being in breach of the requirements of Clause 17.12(b)(v) (Financial Indebtedness).

17.9 Constitutional documents

The Borrower shall not agree to or permit any amendment to its constitutional documents, if such amendment would have a Material Adverse Effect.

17.10 Loans and guarantees

(a) The Borrower shall not make any loans, grant any credit (save in the ordinary course of business) or give any guarantee or indemnity (except as required under any of the Finance Documents) to or for the benefit of any person or otherwise voluntarily assume any liability, whether actual or contingent, in respect of any obligation of any person.

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(b) Paragraph (a) does not apply to the granting of any guarantee or indemnity which is:

(i) permitted to be granted pursuant to Clause 17.12 (Financial Indebtedness);

(ii) given in respect of the chartering arrangements for any Vessel; or

(iii) given in respect of the payment or performance obligations of any Obligor under any contract or other agreement entered into by it in the ordinary course of its business to the extent that such obligations do not constitute Financial Indebtedness.

(c) Paragraph (a) does not apply to the making of any loans:

(i) which are made by the Borrower to another Obligor or any other Subsidiary of the Borrower; or

(ii) which are loans made to a direct or indirect shareholder or equity holder of the Borrower.

17.11 Taxation

The Borrower shall duly and punctually pay and discharge all material Taxes imposed upon it or its assets within the time period allowed without incurring penalties (save to the extent that (i) payment is being contested in good faith, (ii) adequate reserves are being maintained for those Taxes and (iii) payment can be lawfully withheld), where any failure to pay such Taxes would have a Material Adverse Effect.

17.12 Financial Indebtedness

(a) The Borrower shall not incur any Financial Indebtedness.

(b) Paragraph (a) does not apply to any Financial Indebtedness listed below (Permitted Financial Indebtedness):

(i) Financial Indebtedness incurred under, or that is expressly contemplated by, any Finance Document, Time Charter Party Agreement, or management agreement relating to a Vessel;

(ii) Financial Indebtedness incurred under any hedging arrangement entered into by any Obligor;

(iii) any bond, performance bond, letter of credit, guarantee or other assurance against loss (and any corresponding indemnity or reimbursement obligation) issued by or on behalf of the Borrower in the ordinary course of its business;

(iv) subject to paragraph (c), Financial Indebtedness incurred either (A) with another Obligor; or (B) on a subordinated basis with a direct or indirect shareholder or equity holder of the Borrower;

(v) subject to paragraph (c), Financial Indebtedness incurred as a result of, or in connection with, the acquisition of any vessel (the Relevant Asset) or the acquisition of any Subsidiary which owns, or is established to own, a Relevant Asset (the Relevant Subsidiary), provided that prior to incurring such Financial Indebtedness (the Relevant Indebtedness), the Borrower has provided a certificate (signed by a director or officer) addressed to the Facility Agent:

(A) confirming that the amount of Relevant Indebtedness, when aggregated with any existing Financial Indebtedness relating to the Relevant Asset or the Relevant Subsidiary (as applicable) is no greater than 90% of the purchase price paid by the Borrower for the Relevant Asset or the shares or equivalent equity interest in in the Relevant Subsidiary (as applicable); and

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(B) setting out in reasonable detail the calculations upon which the Borrower is making the confirmation referred to in paragraph (A);

(vi) subject to paragraph (c), Financial Indebtedness (the Refinancing Indebtedness) incurred as a result of, or in connection with, the refinancing of any existing Financial Indebtedness relating to any vessel owned by any Subsidiary of the Borrower, other than a Guarantor, (the Applicable Asset), (including any refinancing of any Financial Indebtedness under any facility or document entered into in accordance with paragraph (b)(v)), provided that prior to incurring such Financial Indebtedness, the Borrower has provided a certificate (signed by a director or officer) addressed to the Facility Agent:

(A) confirming that the amount of Refinancing Indebtedness, when aggregated with any existing Financial Indebtedness relating to the Applicable Asset, is no greater than 90% of the value of the Applicable Asset (to be determined by reference to valuations of the Applicable Asset to be obtained at or about the time of financial close of the Refinancing Indebtedness); and

(B) setting out in reasonable detail the calculations upon which the Borrower is making the confirmation referred to in paragraph (A); or

(vii) Financial Indebtedness incurred with the prior written consent of the Facility Agent.

(c) In the case of Financial Indebtedness incurred pursuant to paragraph (b)(iv), (b)(v) or (b)(vi) the claims of the Facility Agent under this Agreement will at all times rank at least pari passu with the claims of any unsecured and unsubordinated creditors in relation to such Financial Indebtedness save to the extent that such claims are mandatorily preferred by law applying to companies generally.

17.13 Subsidiaries

The Borrower shall not create or acquire any Subsidiary after the date of this Agreement where the creation or acquisition of such Subsidiary would result in the Borrower being in breach of the requirements of Clause 17.12(b)(v) (Financial Indebtedness).

17.14 Change of ownership

(a) The Borrower shall not sell or otherwise dispose of its limited liability company interest in any Guarantor.

(b) The Borrower shall hold 100% of the limited liability company interests in each Guarantor.

(c) The Borrower shall procure that Qatar Gas Transport Company Ltd. (Nakilat) holds, directly or indirectly, no less than 30% of the equity interest in the Borrower.

17.15 Debt Service Reserve Account

(a) On and from the Initial Utilisation Date, the Borrower shall:

(i) open and maintain the Debt Service Reserve Account; and

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(ii) subject to paragraphs (b), (c) and (d) ensure that at all times such account is funded in an amount equal to the aggregate principal amount of the Loans repayable on the next Repayment Date (the Required DSRA Balance).

(b) In respect of the final Repayment Date, the Required DSRA Balance shall not increase and shall remain as an amount equal to the principal amount of debt service payable on the Repayment Date immediately prior to the final Repayment Date.

(c) The Facility Agent may instruct the Security Agent to deduct from the Debt Service Reserve Account any portion of a Repayment Instalment that is due and unpaid and the Facility Agent shall apply such amounts to the payment of such portion of the relevant Repayment Instalment. The Borrower shall ensure that the Debt Service Reserve Account is funded in an amount equal to the Required DSRA Balance by no later than the earlier of:

(i) the next Repayment Date; and

(ii) the date falling 10 Business Days after such deduction.

(d) The Borrower may not withdraw any amounts from the Debt Service Reserve Account without the prior written consent of the Facility Agent.

17.16 Financial covenant

(a) In this Clause, Security Value means the aggregate of the market value of each Vessel (determined in accordance with the most recent Market Valuation Reports for the Vessels supplied to the Facility Agent at that time in accordance with Clause 16.5 (Annual Market Valuation Report) or paragraph (f) below).

(b) The Borrower shall ensure that the Security Value is at least 110 per cent. of the aggregate of all Loans then outstanding and interest then due on such Loans calculated in accordance with Clause 9 (Costs of Utilisation) (the Minimum Security Percentage).

(c) If the Minimum Security Percentage is not met at any time, the Borrower may not:

(i) declare, make or pay any dividend or other distribution (each a Distribution) (or interest on any unpaid Distribution) (whether in cash or in kind) on or in respect of its capital;

(ii) repay or distribute any dividend;

(iii) pay any management, advisory or other fee to or to the order of any of its shareholders or equity holders other than any fees and operating costs and expenses payable in accordance with the terms (as at the date of this Agreement) of any Management Agreement or corporate services agreement relating to a Vessel; or

(iv) redeem, repurchase, return or repay any of its capital or resolve to do so,

until such time as the Minimum Security Percentage has been restored. Such failure to meet the Minimum Security Percentage shall not be deemed a Default or an Event of Default for the purpose of any Finance Document.

(d) The Borrower may restore the Minimum Security Percentage by:

(i) providing additional Security in favour of the Security Agent acceptable to the Facility Agent;

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(ii) making a voluntary prepayment in an amount such that the provisions of this Clause 17.16 are complied with when re-calculated on a pro forma basis; or

(iii) in the event of a termination of a Time Charter Party Agreement, by entering into a replacement time charter or other employment in form and substance satisfactory to the Facility Agent, acting reasonably, for which purposes the Borrower shall deliver an updated Market Valuation Report (on a “with charter” basis) in respect of any Vessel which is the subject of such replacement time charter or other employment.

(e) Except in respect of any restoration of the Minimum Security Percentage, which may be demonstrated by the Borrower at any time, and except in respect of a termination of any Time Charter Party Agreement as set out in paragraph (f), the covenant set out in paragraph (b) will be tested on an annual basis by reference to the Compliance Certificate delivered in accordance with Clause 16.6 (Annual Compliance Certificate) and the Market Valuation Reports provided in accordance with Clause 16.5 (Annual Market Valuation Report).

(f) The covenant set out in paragraph (b) additionally will be tested upon a termination of any Time Charter Party Agreement prior to its scheduled termination date by reference to a Compliance Certificate in the form set out in Part 2 of Schedule 6 (Compliance Certificate) delivered by the Borrower within 10 days of such termination, for which purposes the Borrower shall simultaneously deliver an updated Market Valuation Report (such report to take into account the Time Charter Party Agreement termination) in respect of any Vessel which is the subject of such Time Charter Party Agreement termination.

17.17 Vessel undertakings

The Borrower shall procure that:

(a) subject to paragraph (b), the Required Insurances for each Vessel are maintained on substantially the same terms (including as to governing law) as the Required Insurances for that Vessel existing as at the date of this Agreement (the Existing Insurances);

(b) the Required Insurances for each Vessel are in the Required Insurance Amount applicable to that Vessel;

(c) the Required Insurances for each Vessel are placed through commercially reputable brokers and with commercially reputable underwriters or insurance companies;

(d) the Required Insurances include a loss payable clause in substantially the same form as provided in the Existing Insurances;

(e) each Vessel’s classification and registration is maintained under the Vessel Flag;

(f) nothing is done or omitted to be done by any party by which the registration of its Vessel would or might be defeated or imperilled;

(g) each Vessel (including the operation thereof) complies with all Applicable Laws if failure so to comply would have a Material Adverse Effect;

(h) each Vessel is maintained in good working order and repair (ordinary wear and tear excepted);

(i) each Vessel is surveyed from time to time as required by the Classification Society in which that Vessel is entered at that time;

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(j) the classification of each Vessel is maintained with the applicable Classification Society or any other recognised classification society including, without limitation, American Bureau of Shipping and Det Norske Veritas), free of all overdue requirements and overdue recommendations;

(k) all repairs to or replacement of any damaged, worn or lost parts or equipment are effected in a manner (both as regards workmanship and quality of materials) that does not diminish materially the value of the applicable Vessel;

(l) each Vessel is managed in accordance with customary industry standards;

(m) all debts and other liabilities that may give rise to a lien (other than any lien permitted pursuant to the terms of any Guarantee) or claim enforceable against a Vessel are promptly paid and discharged; and

(n) each Guarantor complies with its obligations under the Time Charter Party Agreement to which it is a party if failure so to comply would have a Material Adverse Effect;

in each case, from the date of the acquisition of each Vessel by the applicable Guarantor and only for so long as each Vessel is owned by a Guarantor.

17.18 Account Pledge and legal opinions

Within ninety (90) days of the date of this Agreement, the Borrower shall:

(a) ensure that the Account Pledge has been executed and perfected in accordance with the requirements of Qatari law; and

(b) procure the delivery of legal opinions in respect of the Account Pledge from the Lender’s Qatari counsel and the Lender’s Marshall Islands counsel addressed to the Finance Parties in form and substance satisfactory to the Facility Agent.

17.19 Insurance report

Within thirty (30) days of the date of this Agreement, the Borrower shall procure, at its own cost and expense, that the Facility Agent receives a final insurance report in respect of the Required Insurances for each Vessel reasonably satisfactory to the Facility Agent prepared by Bankserve or any other advisor acceptable to the Facility Agent.

17.20 Opening balance sheet

Within ninety (90) days of the date of this Agreement, the Borrower shall provide a copy of its unaudited opening balance sheet.

17.21 Amendment of a Time Charter Party Agreement

The Borrower shall procure that no Time Charter Party Agreement is amended without consent of the Facility Agent, where such amendment would have a Material Adverse Effect.

17.22 Vessel deliverables

The Borrower shall procure that each Guarantor delivers the documentation set out in Schedule 12 (Vessel Deliverables) within the applicable time periods specified in such Schedule.

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18. EVENTS OF DEFAULT

Each of the events or circumstances set out in Clause 18 (other than Clause 18.12 (Acceleration) is an Event of Default.

18.1 Non-payment

An Obligor does not pay on or before the date falling ten (10) Business Days after the due date any amount payable by it pursuant to a Finance Document at the place and in the currency in which such amount is expressed to be payable.

18.2 Account Pledge, legal opinions and insurance report

Any requirement of:

(a) Clause 17.18 (Account Pledge and legal opinions);

(b) Clause 17.19 (Insurance report);

(c) Clause 17.20 (Opening balance sheet); or

(d) Clause 17.22 (Vessel Deliverables),

is not satisfied.

18.3 Other obligations

An Obligor does not comply with any provision of the Finance Documents (other than those referred to in Clause 18.1 (Non-payment), Clause 17.18 (Account Pledge and legal opinions), Clause 17.19 (Insurance report), Clause 17.20 (Opening balance sheet), Clause 17.22 (Vessel Deliverables), Clause 18.4 (Termination of Vessel registration), Clause 18.5 (Misrepresentation) or Clause 17.16(b) (Financial covenant)) and such failure is not remedied within 30 days of the earlier of (i) the Facility Agent giving notice to the Borrower of such non-compliance and (ii) any Obligor becoming aware of the failure to comply provided that if such failure to comply cannot be remedied within such 30 day period, and the Obligor has taken steps to remedy such non-compliance, 60 days, from the earlier of (i) the Facility Agent giving notice to the Borrower of such non-compliance and (ii) any Obligor becoming aware of the failure to comply.

18.4 Termination of Vessel registration

The registration of a Vessel is terminated, unless such termination is remedied within 60 days of the termination.

18.5 Misrepresentation

Any representation made under a Finance Document is or proves to have been inaccurate or misleading in any material respect when made, provided that no breach of this Clause 18.5 shall occur if the fact which caused the applicable representation to be inaccurate or misleading is rectified within a period of 60 days of the earlier of receipt by the Borrower of notice of such misrepresentation from the Facility Agent and any Obligor becoming aware of the misrepresentation.

18.6 Cross default

(a) Any Financial Indebtedness of an Obligor is not paid when due (after the expiry of any originally applicable grace period).

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(b) Any Financial Indebtedness of an Obligor is declared to be or otherwise becomes due and payable prior to its specified maturity as a result of an event of default (however described).

(c) Any commitment for any Financial Indebtedness of an Obligor is cancelled or suspended by a creditor of that Obligor as a result of an event of default (however described).

(d) No Event of Default will occur under this Clause 18.6 if the aggregate amount of all such Financial Indebtedness as described in this Clause 18.6 is less than USD 15,000,000 (or its equivalent in other currencies).

18.7 Insolvency

(a) An Obligor:

(i) is unable or admits inability to pay its debts as they fall due; or

(ii) suspends making payments on any of its debts due to it being unable to pay its debts.

(b) The value of the assets of an Obligor is less than its liabilities (taking into account contingent and prospective liabilities).

(c) A moratorium is declared in respect of any indebtedness of an Obligor.

18.8 Insolvency proceedings

Any corporate action, legal proceedings or other procedure or step is taken in any jurisdiction in relation to:

(a) the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) of an Obligor;

(b) a composition, compromise, assignment or arrangement with any creditor of an Obligor;

(c) the appointment of a liquidator, receiver, administrator, compulsory manager or other similar officer in respect of an Obligor or any of its assets; or

(d) enforcement of any Security over any asset of an Obligor having an aggregate value of at least USD 10,000,000,

excluding in each case: (i) any frivolous or vexatious petition for winding up presented by a creditor which is being contested in good faith or (ii) any proceedings that are discharged, stayed or dismissed within 60 days of commencement.

18.9 Analogous events

Any event occurs which under the laws of any jurisdiction has a similar or analogous effect to any of those events mentioned in Clauses 18.7 (Insolvency) and 18.8 (Insolvency proceedings) excluding in each case: (i) any frivolous or vexatious petition for winding up presented by a creditor which is being contested in good faith or (ii) any proceedings that are discharged, stayed or dismissed within 60 days of commencement.

18.10 Unlawfulness

It is or becomes unlawful for any Obligor to perform any of its payment obligations under the Finance Documents to which it is a party.

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18.11 Repudiation

Any Obligor repudiates or terminates a Finance Document or evidences an intention to repudiate or terminate a Finance Document.

18.12 Acceleration

On and at any time after the occurrence of an Event of Default that is continuing the Facility Agent may, and shall if so directed by the Lenders, by serving written notice to the Borrower:

(a) cancel the Facility whereupon it shall immediately be cancelled; and

(b) declare that any outstanding Loans and any amounts accrued or outstanding under any other Finance Documents be immediately due and payable, whereupon they shall become immediately due and payable.

19. INDEMNITIES

19.1 Currency indemnity

(a) If any sum due from any Obligor under the Finance Documents (a Sum), or any order, judgment or award given or made in relation to a Sum, needs to be converted from the currency (the First Currency) in which that Sum is payable into another currency (the Second Currency) for the purpose of:

(i) making or filing a claim or proof against any Obligor;

(ii) obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings,

the Borrower shall as an independent obligation, within three (3) Business Days of demand, indemnify each Finance Party to whom that Sum is due against any cost, loss or liability arising out of or as a result of the conversion including any discrepancy between (A) the rate of exchange used to convert that Sum from the First Currency into the Second Currency and (B) the rate or rates of exchange available to that person at the time of its receipt of that Sum.

(b) The Borrower waives any right it may have in any jurisdiction to pay any amount under the Finance Documents in a currency or currency unit other than that in which it is expressed to be payable.

19.2 Other indemnities

The Borrower shall, within ten (10) Business Days of demand by the Facility Agent, indemnify each Finance Party against any documented cost, loss or liability incurred by that Finance Party as a result of:

(a) the occurrence of any Event of Default or the operation of Clause 18.12 (Acceleration);

(b) a failure by any Obligor to pay any amount due under a Finance Document;

(c) funding, or making arrangements to fund, its participation in any Loan requested by the Borrower in a Utilisation Request but not made by reason of non-satisfaction of the conditions in Clause 5 (Conditions of Utilisation); or

(d) an amount due and payable under a Finance Document not being prepaid in accordance with a notice of prepayment given by the Borrower.

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19.3 Indemnity to the Facility Agent

The Borrower shall promptly indemnify the Facility Agent against any documented cost, loss or liability properly incurred by the Facility Agent and each of its officers and employees (in each case acting reasonably) as a direct result of:

(a) investigating any event which it reasonably believes is a Default;

(b) acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised;

(c) any other exercise of its rights, powers and discretions vested in it by:

(i) the Finance Documents; or

(ii) law relating to the Finance Documents,

which are of a non-ordinary course nature; or

(d) any other actions which otherwise relate to the performance of the terms of this Agreement (otherwise than as a result of its gross negligence or wilful misconduct) which are of a non-ordinary course nature.

20. MORTGAGEE’S INTEREST INSURANCE

20.1 In respect of each Vessel, the Security Agent, acting on the instructions of the Facility Agent, shall be entitled from time to time (at the reasonable cost and expense of the Borrower and at no cost or expense to any Finance Party, hereunder in respect of all premiums and other expenses that are incurred in effecting, maintaining or renewing any such insurance or dealing with, or considering, any matter arising out of any such insurance) to effect, maintain and renew mortgagee’s interest marine insurance providing for the indemnification of the Finance Parties for any losses under or in connection with any Finance Document that directly or indirectly result from loss, of or damage to, a Vessel or a liability of a Vessel, a Guarantor or the Borrower, being a loss or damage that is prima facie covered by a Required Insurance but in respect of which there is a non-payment (or reduced payment) by the underwriters by reason of, or on the basis of any allegation concerning:

(a) any act or omission on the part of a Guarantor or the Borrower, of the manager of any Vessel or of any officer, employee or agent of any such person, including any breach of warranty or condition or any non-disclosure relating to such Required Insurance;

(b) any act or omission, whether deliberate, negligent or accidental, or any knowledge or privity of a Guarantor or the Borrower, of the manager or of any officer, employee or agent of any such person, including the casting away or damaging of any Vessel and/or any Vessel being unseaworthy; or

(c) any other matter that is insured against under a mortgagee’s interest marine insurance policy from time to time generally available, whether or not similar to the foregoing,

on market standard terms, in such manner as the Security Agent may from time to time consider appropriate, in the Required Insurance Amount for such insurance through such insurers as may be available to the Security Agent.

20.2 To the extent reasonably practicable, the Security Agent shall give notice to the Borrower before effecting any policy of insurance in accordance with this Clause 20 and, with any such notice, shall give details of the costs and expenses associated with such policy. Neither the Security Agent’s rights nor the Borrower’s obligations under this Clause 20 (including the Borrower’s obligation to

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bear any costs and expenses associated with effecting, maintaining and renewing any insurances taken out in accordance with this Clause 20) shall be impaired or otherwise affected by any delay or failure by the Security Agent to give notice in accordance with this Clause 20.

21. ASSIGNMENT AND TRANSFER

21.1 Assignment and transfer

(a) Each Finance Party shall, subject to the consent of the Borrower, where required by this Clause 21, be entitled to assign or transfer any of its respective rights, benefits and/or obligations hereunder to another bank or financial institution or to a trust, fund or other entity which is regularly engaged in or established for the purpose of making, purchasing or investing in loans, securities or other financial assets provided that the provisions of this Clause 21 are complied with.

(b) The Finance Parties and the Borrower acknowledge, agree and undertake to fully comply with the requirements and procedures set out in this Clause 21.

(c) Notwithstanding any other provision of this Agreement, no Lender shall be entitled to undertake any syndication with respect to the Tranche Commitments or any Loan without the prior written consent of the Borrower.

21.2 Assignment by the Lenders

The Finance Parties and the Borrower acknowledge and agree that the Lenders may, at any time assign, transfer or otherwise dispose of, or offer or grant any interest in, the whole or any part of their participations in the Loans, their Tranche Commitments or any of their respective rights under this Agreement:

(a) so long as, and to the extent that any such Lender (the Existing Lender) assigns, transfers or otherwise disposes of any interest or rights, the assignee or transferee (the New Lender) provides a satisfactory Certificate of Transfer Undertaking (as conclusively determined by the Facility Agent) to the Administrative Agents, the Lenders and the Borrower that it shall be bound by the terms and conditions of this Agreement and the other Finance Documents and shall be under the same obligations (matching the rights assigned or transferred) towards the Facility Agent, the Lenders and the Borrower as it would have been under if it had originally been a Party to this Agreement;

(b) provided that the Finance Parties and the Borrower shall not be obliged to recognise the New Lender as having rights against any of them until such satisfactory Certificate of Transfer Undertaking referred to in paragraph (a) is obtained from the New Lender whereupon the Existing Lender shall be relieved of those obligations corresponding to the rights so assigned or transferred;

(c) provided that a Lender may only transfer, assign or otherwise dispose of, or offer or grant any interest in, the whole or any part of its participation in the Loans, its Tranche Commitments or any of its rights under this Agreement:

(i) with the Borrower’s prior written consent; or

(ii) with prior written notice to the Borrower, if (A) such transfer, disposal, offer or grant is required by law or by the direction of the Qatar Central Bank or other applicable authority of the State of Qatar and is to a bank or financial institution established in, and with its principal place of business in, Qatar; (B) an Event of Default is continuing; or (C) such transfer or assignment is to another Lender or an Affiliate of a Lender; and

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(d) provided that the consent of the Borrower to an assignment or transfer by a Lender (if required) must not be unreasonably withheld or delayed. The Borrower shall be deemed to have given its consent to any request for such assignment or transfer ten (10) Business Days after the Borrower is given notice of such request unless consent is expressly refused by the Borrower within that time.

21.3 Conditions to assignment by the Lenders

Subject to the provisions of Clause 21.2 (Assignment by the Lenders):

(a) an Existing Lender shall not be responsible to a New Lender for:

(i) the execution, genuineness, validity, enforceability or sufficiency of any Finance Document or any other document;

(ii) the payment of any amounts under Clause 23 (Payments by the Facility Agent – Limited Recourse) to such New Lender; or

(iii) the accuracy of any statements (whether written or oral) made in or in connection with any Finance Document;

(b) each New Lender confirms to the Existing Lender, the Administrative Agents and the other Lenders that it:

(i) has made its own independent investigation and assessment of the financial condition and affairs of the Borrower in connection with its participation in the Loans and has not relied on any information provided to it by the Existing Lender in connection with any Finance Document; and

(ii) will continue to make its own independent appraisal of the creditworthiness of the Borrower while any amount is or may be outstanding under the Finance Documents;

(c) nothing in this Agreement or any Finance Document obliges an Existing Lender to:

(i) accept a re-transfer from a New Lender of any of the rights and/or obligations assigned, transferred or novated under this Clause 21; or

(ii) support any losses incurred by the New Lender by reason of the non-performance by the Borrower of its obligations under any Finance Document or otherwise;

(d) any reference in this Agreement or any Finance Document to a Lender includes a New Lender but excludes a Lender if:

(i) no amount is or may be owed to or by it under this Agreement and the Finance Documents; and

(ii) its Tranche Commitments have been cancelled or otherwise reduced to zero; and

(e) if:

(i) a Lender assigns or transfers any of its rights or obligations under the Finance Documents; and

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(ii) as a result of circumstances existing at or after the date the assignment or transfer occurs, an Obligor would be obliged to make a payment to the New Lender under Clause 12 (Tax gross-up and indemnity) or Clause 29 (Increased Costs),

then the New Lender is only entitled to receive payment under those Clauses to the same extent as the Existing Lender would have been if the assignment or transfer had not occurred.

21.4 Procedure for transfer

(a) Subject to the conditions set out in Clauses 21.2 (Assignment by the Lenders) and 21.3 (Conditions to assignment by the Lenders), a transfer is effected in accordance with paragraph (c) below when the Facility Agent executes an otherwise duly completed Transfer Certificate delivered to it by the Existing Lender and the New Lender. The Facility Agent must, subject to paragraph (b) below, as soon as reasonably practicable after receipt by it of a duly completed Transfer Certificate appearing on its face to comply with the terms of this Agreement execute that Transfer Certificate.

(b) The Facility Agent is only obliged to execute a Transfer Certificate delivered to it by the Existing Lender and the New Lender once it is satisfied it has complied with all necessary “know your customer” checks or other similar checks under any applicable law or regulation in relation to the transfer to such New Lender.

(c) Subject to Clause 21.6 (Pro rata interest settlement) on the Transfer Date:

(i) to the extent that in the Transfer Certificate the Existing Lender seeks to transfer by novation its rights and obligations under the Finance Documents the Borrower and the Existing Lender will be released from further obligations towards one another under the Finance Documents and their respective rights against one another under the Finance Documents will be cancelled insofar as the Borrower and the New Lender have assumed and/or acquired the same in place of the Borrower and the Existing Lender (being the Discharged Rights and Obligations);

(ii) each of the Borrower and the New Lender will assume obligations towards one another and/or acquire rights against one another which differ from the Discharged Rights and Obligations only insofar as the Borrower and the New Lender have assumed and/or acquired the same in place of the Borrower and the Existing Lender;

(iii) each Administrative Agent, the New Lender and other Lenders will acquire the same rights and assume the same obligations between themselves as they would have acquired and assumed had the New Lender been an Original Lender with the rights and/or obligations acquired or assumed by it as a result of the transfer and to that extent each Administrative Agent and the Existing Lender will each be released from further obligations to each other under the Finance Documents; and

(iv) the New Lender will become a Party as a Lender.

(d) Each Party (other than the Existing Lender and the New Lender) irrevocably authorises the Facility Agent to enter into and deliver any duly completed Transfer Certificate on its behalf.

21.5 Procedure for assignment

(a) Subject to the conditions set out in Clauses 21.2 (Assignment by the Lenders) and 21.3 (Conditions to assignment by the Lenders), an assignment may be effected in accordance with paragraph (c) below when the Facility Agent executes an otherwise duly completed

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Assignment Agreement delivered to it by the Existing Lender and the New Lender. The Facility Agent must, subject to paragraph (b) below, as soon as reasonably practicable after receipt by it of a duly completed Assignment Agreement appearing on its face to comply with the terms of this Agreement and delivered in accordance with the terms of this Agreement, execute that Assignment Agreement.

(b) The Facility Agent is only obliged to execute an Assignment Agreement delivered to it by the Existing Lender and the New Lender once it is satisfied it has complied with all necessary “know your customer” checks and other similar checks under any applicable law or regulation in relation to the assignment to such New Lender.

(c) Subject to Clause 21.6 (Pro rata interest settlement), on the Transfer Date:

(i) the Existing Lender will assign absolutely to the New Lender the rights under the Finance Documents expressed to be the subject of the assignment in the Assignment Agreement;

(ii) the Existing Lender will be released by the Borrower and the other Finance Parties from the obligations owed by it (the Relevant Obligations) and expressed to be the subject of the release in the Assignment Agreement;

(iii) the New Lender will become a Party as a Lender and will be bound by obligations equivalent to the Relevant Obligations;

(iv) if the assignment relates only to part of the Existing Lender’s participation in the outstanding Loans that part will be separated from the Existing Lender’s participation in the outstanding Loans, made an independent debt and assigned to the New Lender as a whole debt; and

(v) the Facility Agent’s execution of the Assignment Agreement as agent for the Borrower will constitute notice to the Borrower of the assignment.

(d) Each Party (other than the Existing Lender and the New Lender) irrevocably authorises the Facility Agent to enter into and deliver any duly completed Assignment Agreement on its behalf.

(e) Lenders may utilise procedures other than those set out in this Clause 21.5 (Procedure for assignment) to assign their rights under the Finance Documents (but not, without the consent of the Borrower or unless in accordance with Clause 21.4 (Procedure for transfer), to obtain a release by the Borrower from the obligations owed to the Borrower by the Lenders nor the assumption of equivalent obligations by a New Lender) provided that they comply with the conditions set out in in Clauses 21.2 (Assignment by the Lenders) and 21.3 (Conditions to assignment by the Lenders).

21.6 Pro rata interest settlement

If the Facility Agent has notified the Lenders that it is able to distribute interest payments on a pro rata basis to Existing Lenders and New Lenders then (in respect of any transfer pursuant to Clause 21.4 (Procedure for transfer) or any assignment pursuant to Clause 21.5 (Procedure for assignment) the Transfer Date of which, in each case, is after the date of that notification and is not on the last day of an Interest Period):

(a) any interest or fees in respect of the relevant participation which are expressed to accrue by reference to the lapse of time will continue to accrue in favour of the Existing Lender up to but excluding the Transfer Date (Accrued Amounts) and will become due and payable to the Existing Lender (without further interest accruing on them) on the last day of the current Interest Period; and

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(b) the rights assigned or transferred by the Existing Lender will not include the right to the Accrued Amounts, so that:

(i) when the Accrued Amounts become payable, those Accrued Amounts will be payable to the Existing Lender; and

(ii) the amount payable to the New Lender on that date will be the amount which would, but for the application of this Clause 21.6, have been payable to it on that date, but after deduction of the Accrued Amounts.

21.7 Copy of Transfer Certificate or Assignment Agreement to Borrower

The Facility Agent must, as soon as reasonably practicable after it has executed a Transfer Certificate or an Assignment Agreement, send to the Borrower a copy of that Transfer Certificate or Assignment Agreement.

21.8 Resignation and termination of appointment of an Administrative Agent

(a) An Administrative Agent may, subject to consultation with the Borrower, resign by giving 30 days’ notice to the Lenders and the Borrower, in which case the Majority Lenders may appoint a successor Administrative Agent. If the Majority Lenders have not appointed a successor Administrative Agent within 20 days after notice of resignation was given, the retiring Administrative Agent may appoint a successor Administrative Agent.

(b) The Facility Agent’s resignation notice will take effect upon the appointment of a successor Facility Agent.

(c) The Security Agent’s resignation notice will take effect upon: (i) the appointment of a successor Security Agent; and (ii) the transfer of all Security Property to that successor.

(d) If for any reason an Administrative Agent becomes incapable of performing its obligations hereunder as an Administrative Agent, it may and, if requested by the Majority Lenders, shall resign pursuant to the above paragraph.

(e) The Facility Agent shall resign in accordance with paragraph (a) above if on or after the date that is three months before the earliest FATCA Application Date relating to any payment to the Facility Agent under the Finance Documents, either:

(i) the Facility Agent fails to respond to a request under Clause 14 (FATCA Information) and the Borrower or a Lender reasonably believes that the Facility Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date;

(ii) the information supplied by the Facility Agent pursuant to Clause 14 (FATCA Information) indicates that the Facility Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date; or

(iii) the Facility Agent notifies the Borrower and the Lenders that the Facility Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date,

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and (in each case) the Borrower or a Lender reasonably believes that a Party will be required to make a FATCA Deduction that would not be required if the Facility Agent were a FATCA Exempt Party, and the Borrower or that Lender (as applicable), by notice to the Facility Agent, requires it to resign.

(f) An Administrative Agent who is retiring or whose appointment has been terminated pursuant to this Clause 21.8 (the Retiring Administrative Agent) shall, at its own cost, make available to the successor Administrative Agent such documents and records and provide such assistance as the successor Administrative Agent may reasonably require for the purposes of performing its functions as Administrative Agent under the Finance Documents.

(g) Where the circumstances leading to an Administrative Agent becoming incapable of performing its obligations hereunder as an Administrative Agent and therefore being required to resign pursuant to paragraph (d) may be attributed to such Administrative Agent’s own acts or omissions, that Administrative Agent shall be liable for any loss or damage caused to the Lenders as a result of it becoming incapable of performing its obligations hereunder as an Administrative Agent.

(h) Upon the appointment of a successor Administrative Agent, the Retiring Administrative Agent shall be discharged from any further obligation in respect of the Finance Documents but shall remain entitled to the benefit of this paragraph (h). Any successor Administrative Agent and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party to this Agreement.

21.9 Conditions to assignment by Administrative Agent

No assignment or transfer entered into by an Administrative Agent pursuant to Clause 21.8(a) (Resignation and termination of appointment of an Administrative Agent) or Clause 21.8(d) (Resignation and termination of appointment of an Administrative Agent) shall be effective:

(a) until such assignee or transferee has agreed in writing with the Lenders and the Borrower that it has assumed the obligations of the existing Facility Agent or Security Agent (as applicable) under this Agreement and the Finance Documents whereupon the existing Facility Agent or Security Agent (as applicable) shall be released from all of its obligations hereunder and the successor and each of the Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had originally been a Party as Facility Agent or Security Agent (as applicable) from the date of this Agreement; and

(b) unless:

(i) such assignment or transfer is with the Borrower’s prior written consent; or

(ii) an Event of Default is continuing.

21.10 Assignment by the Borrower

The Borrower shall not be entitled to assign or transfer any of its rights and obligations under this Agreement.

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22. APPOINTMENT OF THE ADMINISTRATIVE AGENTS

22.1 Appointment of the Facility Agent

(a) Each Lender irrevocably:

(i) appoints the Facility Agent to act as its agent under and in connection with the Finance Documents;

(ii) authorises the Facility Agent (whether or not by or through its employees or agents) to:

(A) enter into on its behalf each Finance Document expressed to be entered into by the Facility Agent;

(B) give any authorisation, confirmation or consent expressed to be given by the Facility Agent under the Finance Documents; and

(C) to perform such duties and take such action on its behalf and to exercise such rights, remedies, powers and discretions as are specifically delegated to the Facility Agent by the Finance Documents, together with such rights, remedies, powers and discretions as are reasonably incidental thereto (but subject to any restrictions or limitations specified in this Agreement).

(b) The Facility Agent shall not have any duties, obligations or liabilities (whether fiduciary or otherwise) to any Finance Party beyond those expressly stated in the Finance Documents. Those duties are solely of a mechanical and administrative nature as more particularly set out in this Agreement.

22.2 Appointment of the Security Agent

(a) Each Finance Party (other than the Security Agent) irrevocably:

(i) appoints the Security Agent to act as its trustee and/or agent (as applicable) under, in connection with and on the terms and conditions contained in the Finance Documents;

(ii) authorises the Security Agent (whether or not by or through its employees or agents) to:

(A) enter into and deliver on its behalf each Finance Document expressed to be entered into by the Security Agent;

(B) give any authorisation, confirmation or consent expressed to be given by the Security Agent under the Finance Documents; and

(C) to perform such duties and take such action on its behalf and to exercise such rights, remedies, powers and discretions as are specifically delegated to the Security Agent by the Finance Documents, together with such rights, remedies, powers and discretions as are reasonably incidental thereto (but subject to any restrictions or limitations specified in this Agreement).

(b) The Security Agent shall not have any duties, obligations or liabilities (whether fiduciary or otherwise) to any Finance Party beyond those expressly stated in the Finance Documents. Those duties are solely of a mechanical and administrative nature as more particularly set out in this Agreement.

(c) The Security Agent declares that it holds the Security Property on trust for the Finance Parties on the terms contained in this Agreement.

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(d) In relation to any jurisdiction the courts of which would not recognise or give effect to the trust expressed to be created under paragraph (c), the relationship of the Finance Parties to the Security Agent shall be construed as one of principal and agent but, to the extent permissible under the laws of that jurisdiction, all the other provisions of this Agreement shall have full force and effect between the Parties.

(e) For the purposes of paragraph (d) only, the Borrower hereby undertakes to pay to the Security Agent amounts equal to any amounts owing by it to any Lender or the Facility Agent in respect of the Secured Obligations as and when the same fall due for payment by it under the Finance Documents (the Parallel Debt) so that the Security Agent shall be an obligee of such covenant to pay and the Security Agent shall be entitled to claim performance thereof in its own name and not only as Security Agent acting on behalf of the Lenders. The Parallel Debt owed by the Borrower (i) shall be decreased to the extent that the Secured Obligations to which such Parallel Debt corresponds have been decreased under and in accordance with the Finance Documents and vice versa; and (ii) shall not exceed the aggregate of the Secured Obligations owed by the Borrower. The Security Agent agrees with the other Finance Parties that it will not exercise its rights as creditor of the Parallel Debt except in accordance with this Agreement.

(f) Nothing in this Agreement constitutes the Security Agent as an agent, trustee or fiduciary of any Obligor.

(g) Each of the Security Agent and any Receiver may, at any time, delegate by power of attorney or otherwise to any person for any period, all or any right, power, authority or discretion vested in it in its capacity as such.

22.3 Acceptance

By its signature to this Agreement each Administrative Agent accepts its appointment as set out in this Clause 22.

22.4 Authority

Any action taken by an Administrative Agent under or in relation to the Finance Documents with requisite authority, or on the basis of appropriate instructions, received from the Lenders (or as otherwise duly authorised) shall be binding on the Lenders.

23. PAYMENTS BY THE FACILITY AGENT – LIMITED RECOURSE

23.1 Payments to Lenders

Subject to Clause 23.2 (Limited recourse), the Facility Agent will pay the Lenders amounts in respect of their participations in the Loans on the dates and otherwise on the terms set out in this Clause 23 (Payments by the Facility Agent – Limited Recourse).

23.2 Limited recourse

The obligation of the Facility Agent to pay the Lenders the Relevant Percentage of a Repayment Instalment or any other Remittance pursuant to the terms of this Agreement is conditional upon the Facility Agent having received the corresponding payment from the Borrower pursuant to the relevant Finance Document. The Lenders shall have no recourse to the Facility Agent in the event of any failure by the Borrower to make any such payments, except if such a failure by the Borrower is caused by fraud, gross negligence or wilful default on the part of the Facility Agent. The Lenders acknowledge and agree that the primary credit risk assumed by the Lenders in relation to their participation in each Loan (and their entry into this Agreement) is that of the Borrower.

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23.3 Distribution of Remittances to Lender

Subject to Clause 23.2 (Limited recourse), whenever the Facility Agent:

(a) has actually received a payment from the Borrower in respect of a Remittance; and

(b) is entitled to apply the amount received in such manner,

the Facility Agent shall promptly pay to each Lender its Relevant Percentage of such payment.

23.4 Application of moneys

(a) For the purposes of this Clause 23, if the Facility Agent obtains a partial or total payment of any amount due from the Borrower in respect of any Remittance by virtue of the Borrower being entitled to a set-off, banker’s lien, counterclaim or any security or other payment and actually applies the amount of such payment in or towards satisfaction of amounts due to the Facility Agent in respect of that Remittance, the amount of such partial or total payment so applied will be treated for the purposes of this Clause 23 as if an actual payment of such amount had been received from the Borrower, but without prejudice to the provisions of Clause 24 (Refund of Payments and Further Payments by the Lenders).

(b) Any sums received by the Facility Agent for application in accordance with this Clause 23.4 shall be credited to a suspense account and held by the Facility Agent for the benefit of the Lenders pro rata according to their Relevant Percentages hereunder but shall not be treated as having been received by the Facility Agent for the purposes of this Clause 23 unless and until such sums are appropriated by the Facility Agent in or towards payment in respect of that Remittance.

23.5 Reduction in payments

Notwithstanding any provisions herein to the contrary, in the event that the Borrower fails to pay in full in respect of any amount due to the Facility Agent pursuant to the relevant Finance Document on the due date relating thereto, for any reasons whatsoever, the obligation of the Facility Agent to make the payments referred to in this Clause 23 to the Lenders shall be reduced pro rata by the shortfall in the payment received by the Facility Agent.

23.6 Order of application

(a) All amounts from time to time received or recovered by the Security Agent pursuant to the terms of any Finance Document or in connection with the realisation or enforcement of all or any part of the Transaction Security shall be held by the Security Agent on trust or as agent (as applicable in accordance with Clause 22.2 (Appointment of Security Agent)) for the Finance Parties and transferred promptly to the Facility Agent for application in accordance with paragraph (b).

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(b) All moneys from time to time received or recovered by the Facility Agent in each case in connection with the realisation or enforcement of the Finance Documents (for itself and/or on behalf of the Lenders) shall be held by the Facility Agent and be applied, (unless instructed to the contrary by the Lenders) in the following order of priority:

(i) in discharging (pro rata) any sums (including reimbursement of any fees, costs and other expenses) owing to the Facility Agent, the Security Agent or any Receiver under the Finance Documents;

(ii) in discharging all costs and expenses incurred by any Finance Party in connection with any realisation or enforcement of the Transaction Security taken in accordance with the terms of the Finance Documents;

(iii) in payment to the Lenders in accordance with the provisions of this Agreement for application towards the discharge of all sums due and payable by the Obligors under the Finance Documents; and

(iv) the balance, if any, in payment to the Obligors or any other person so entitled.

23.7 Investment of proceeds

Prior to the application of the proceeds of the Finance Documents in accordance with Clause 23.6 (Order of application), the Facility Agent or Security Agent (as applicable) may, at its discretion, after informing and obtaining the consent of all of the Lenders, hold all or part of those proceeds in a suspense or impersonal account(s) in the name of that Administrative Agent with such financial institution (including itself) for so long as such Administrative Agent shall reasonably think fit (any interest or return on any such account earned being credited to the relevant account) pending the application from time to time of those monies at such Administrative Agent’s discretion in accordance with the provisions of this Clause 23.

23.8 Permitted deductions

The Facility Agent shall be entitled to:

(a) set aside by way of reserve amounts required to meet; and

(b) make and pay,

any deductions and withholdings (on account of Taxes or otherwise) that it is or may be required by any applicable law to make from any distribution or payment made by it under this Agreement, and to pay all Taxes which may be assessed against it in respect of the Finance Documents or as a consequence of performing its duties, or by virtue of its capacity as Facility Agent under any of the Finance Documents or otherwise (other than in connection with its remuneration for performing its duties under this Agreement).

23.9 Discharge of Borrower’s obligations

(a) Any irrevocable and unconditional payment made to the Facility Agent in respect of the Borrower’s obligations by the Borrower under or pursuant to any Finance Document shall be a good discharge to the extent of such payment, and must be applied by the Facility Agent in accordance with Clause 23.6 (Order of application).

(b) Subject to Clause 24.1 (Refund of payments) each of the Lenders acknowledges and agrees that payment by the Borrower to the Facility Agent of the Repayment Instalment (or any part thereof) in accordance with the relevant Finance Documents will, subject to any deductions made by the Facility Agent from such amount pursuant to Clause 23.8 (Permitted deductions) irrevocably and unconditionally satisfy the Borrower’s obligations to pay such Repayment Instalment (or such amount as is actually paid in accordance with the relevant Finance Documents).

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23.10 Sums received by the Borrower

If the Borrower receives any sum which, pursuant to any of the Finance Documents, should have been paid to an Administrative Agent, that sum shall be held by the Borrower as agent for and on behalf of the Facility Agent and the Lenders and shall promptly be paid to the Facility Agent for application in accordance with this Clause 23.

24. REFUND OF PAYMENTS AND FURTHER PAYMENTS BY THE LENDERS

24.1 Refund of payments

If at any time the Facility Agent becomes obliged to:

(a) repay to any liquidator, trustee or other person all or part of an amount previously paid to the Facility Agent by the Borrower (the Relevant Receipt); or

(b) indemnify any liquidator, trustee or other person in respect of a Relevant Receipt,

then:

(i) the Facility Agent shall promptly notify each Lender of the relevant circumstances and of the amount (the Excess Amount) to be repaid by the Facility Agent or, as the case may be, to be paid by way of indemnity by the Facility Agent;

(ii) each Lender shall on demand pay to the Facility Agent an amount equal to its Relevant Percentage of the Excess Amount together with an amount equal to its Relevant Percentage of any default interest, costs, charges or expenses that the Facility Agent shall have become liable to pay in respect of such Excess Amount; and

(iii) any amount subsequently payable to a Lender pursuant to this Agreement on the basis of the Relevant Receipt shall be adjusted accordingly.

24.2 Insolvency

If, in connection with any moratorium, rescheduling, refinancing, suspension of payments or other similar arrangement or circumstance affecting any Remittance:

(a) the Remittance (or equivalent amount) is paid in whole or in part but the obligation of the Borrower in respect of the amount paid is substituted by any other payment obligation; and/or

(b) any sum is paid into a blocked account or in non-convertible currency in or towards discharge or purported discharge of the Remittance or any part thereof; and/or

(c) the Facility Agent is obliged to provide funds in addition to the amount of the Loans, whether to the Borrower or any other person,

then:

(i) any such payment obligation as is referred to in paragraph (a) shall be treated as between the Lenders and the Facility Agent in the same way as the relevant Remittance as if such obligation had been originally contained in the relevant Finance Document for the purpose of ascertaining the right (if any) of the Lenders to receive subsequent payments under Clause 23 (Payments by the Facility Agent – Limited Recourse);

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(ii) the Facility Agent will (at the request and cost of a Lender) assign to the Lenders the Relevant Percentage of the Facility Agent’s rights to any such blocked account or non-convertible currency as is referred to in paragraph (b); and /or

(iii) in the case of paragraph (c), each Lender shall be obliged to pay to the Facility Agent on demand an amount equal to its Relevant Percentage of such additional funds by way of further deposits in accordance with the provisions, mutatis mutandis, of Clause 6.2 (Lenders’ participation).

24.3 Sharing Among the Finance Parties

(a) If any amount owing by the Borrower under the Finance Documents to a Finance Party (the Sharing Finance Party) is discharged by voluntary or involuntary payment, set-off or any other manner other than through the Facility Agent (in accordance with this Agreement), then:

(i) the Sharing Finance Party shall immediately notify the Facility Agent of the amount discharged (the Discharged Amount) and the manner of its receipt or recovery;

(ii) the Sharing Finance Party shall pay the Facility Agent an amount equal to the Discharged Amount within five (5) Business Days of demand by the Facility Agent;

(iii) the Facility Agent shall distribute the Discharged Amount in accordance with this Agreement; and

(iv) the amount owed by the Borrower under the Finance Documents shall be adjusted accordingly.

(b) Notwithstanding paragraph (a), no Sharing Finance Party shall be obliged to share any Discharged Amount which it receives or recovers pursuant to legal proceedings taken by it to recover any sums owing to it under the Finance Documents with any other Finance Party which had a legal right to, but declined to, either join in such proceedings or commence and diligently pursue separate proceedings to enforce its rights, unless the proceedings instituted by the Sharing Finance Party are instituted by it without prior notice having been given to such other Finance Party and without an opportunity having been given to such other Finance Party to join in such proceedings.

(c) If any Discharged Amount subsequently has to be wholly or partly refunded to the Borrower by a Sharing Finance Party which has paid an amount equal to that Discharged Amount to the Facility Agent under paragraph (a), each Finance Party to which any part of that amount was distributed shall, on request from the Sharing Finance Party, repay to the Sharing Finance Party that Finance Party’s proportionate share of the amount which has to be so refunded by the Sharing Finance Party.

(d) Each Finance Party shall on request supply to the Facility Agent such information as the Facility Agent may from time to time request for the purpose of this Clause 24.3.

25. REMITTANCES – DUTIES AND DISCRETIONS OF THE ADMINISTRATIVE AGENTS

25.1 Exercise of duties, powers and discretions by an Administrative Agent

Subject to Clauses 25.2 (Rights and discretions of each Administrative Agent and directions of Majority Lenders), 25.3 (No amendment or waiver without approval of Majority Lenders), 25.4 (Amendments requiring consent of all Lenders) and 25.7 (Administrative Agent’s liability), each other Finance Party authorises each Administrative Agent to perform the duties and to exercise the

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rights, powers, authorities and discretions on its behalf that are specifically delegated to such Administrative Agent under the Finance Documents and all other reasonably related powers required to enable such Administrative Agent to fulfil its obligations and complete the transactions contemplated hereunder.

25.2 Rights and discretions of each Administrative Agent and directions of Majority Lenders

(a) Each Administrative Agent shall exercise such rights, powers and discretions as arise under the Finance Documents (together with any other incidental rights, powers, authorities and discretions), and shall be entitled to take such action as it deems appropriate unless directed by the Majority Lenders to refrain from taking or to take alternative action. Each Administrative Agent shall be obliged to take such action as the Majority Lenders may direct and any such directions given by the Majority Lenders shall be binding on all the Lenders unless a contrary intention otherwise appears in the Finance Documents, provided that such Administrative Agent receives an amount equal to the agreed estimated costs of complying with such directions from the Lenders.

(b) Each Administrative Agent shall be entitled to rely on:

(i) any representation, notice or document believed by it to be genuine, correct and appropriately authorised;

(ii) any statement made by a director, authorised signatory or employee of any person regarding any matters which may reasonably be assumed to be within his knowledge or within his power to verify;

(iii) any communication, instrument or document believed by it to be genuine and correct and to have been signed or sent by the proper person or persons; and

(iv) as to legal matters, written opinions of legal advisers selected or approved by such Administrative Agent.

(c) Each Administrative Agent may assume (unless it has received notice to the contrary in its capacity as an Administrative Agent) that:

(i) no Default has occurred (unless it has actual knowledge of a Default arising); and

(ii) any right, power, authority or discretion vested in any Party has not been exercised.

(d) Nothing in this Agreement shall oblige an Administrative Agent to carry out:

(i) any “know your customer” or other checks in relation to any person; or

(ii) any check on the extent to which any transaction contemplated by a Finance Document might be unlawful for any Lender,

on behalf of any Lender and each Lender confirms to the Administrative Agents that it is solely responsible for any such checks it is required to carry out and that it may not rely on any statement in relation to such checks made by any Administrative Agent.

(e) The Security Agent shall be entitled to accept without enquiry, and shall not be obliged to investigate, any right and title that any Obligor may have to any of the Security Property and shall not be liable for, or bound to require any Obligor to remedy, any defect in its right or title.

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(f) The Security Agent is not obliged to monitor or enquire whether a Default has occurred. The Security Agent is not deemed to have knowledge of the occurrence of a Default.

25.3 No amendment or waiver without approval of Majority Lenders

Subject to Clause 25.4 (Amendments requiring consent of all Lenders), no Administrative Agent shall be entitled to amend, waive, vary, enforce or take or refrain from taking any action or proceedings or acquiesce in any action not otherwise contemplated by Clause 25.1 (Exercise of duties, powers and discretions by an Administrative Agent) and Clause 25.2 (Rights and discretions of each Administrative Agent and directions of Majority Lenders) without first obtaining the written approval of the Majority Lenders.

25.4 Amendments requiring consent of all Lenders

No Administrative Agent shall agree to amend, waive or vary any provisions of this Agreement or any of the Finance Documents without obtaining the unanimous written consent of all the Lenders if the effect of such amendment, waiver or variation would be to:

(a) change the currency of payment hereunder or under any other Finance Document;

(b) extend or defer the required date of payment of any amount payable by an Obligor or reduce any amount due under any Finance Document;

(c) release any Obligor from any payment obligation under any Finance Document;

(d) modify or waive the nature or scope of, or release, any Transaction Security (other than as permitted under a Security Document or to give effect to a transaction permitted under or pursuant to a Security Document);

(e) in relation to any Lender, increase the amount of its Tranche Commitments and/or participations in any Loans other than in accordance with the terms of the Finance Documents;

(f) modify the definition of the Majority Lenders;

(g) amend, vary or waive any provision which expressly require the consent of all the Lenders;

(h) amend this Clause 25.4 or Clause 6.2 (Lenders’ participation); or

(i) change the amount of or the method of calculation of each Repayment Instalment.

The Facility Agent may not provide any consent in accordance with Clause 3.3 (Availability Period Extension) of this Agreement without obtaining the unanimous written consent of all the Lenders.

25.5 Defaulting Lenders

(a) Any Lender who has failed to duly perform or comply with its payment obligations under this Agreement (a Defaulting Lender) shall not be included in any decision-making process for the purposes of Clauses 21.8 (Resignation and termination of appointment of an Administrative Agent), 25.2 (Rights and discretions of each Administrative Agent and directions of Majority Lenders), 25.3 (No amendment or waiver without approval of Majority Lenders) and 25.4 (Amendments requiring consent of all Lenders) whilst such failure is outstanding and until such time as such failure has been remedied by such Lender to the satisfaction of the Facility Agent.

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(b) In the circumstances envisaged under paragraph (a), the consent or non-approval of such Defaulting Lender shall not be necessary in determining whether a decision has been made by:

(i) the Majority Lenders; or

(ii) all the Lenders (as appropriate),

and any such decision shall be made as if such Defaulting Lender was not a Lender for the purposes of calculating the consent level.

25.6 Replacement of a Lender

(a) If at any time:

(i) a Lender becomes a Non-Consenting Lender (as defined in paragraph(b));

(ii) a Lender becomes a Defaulting Lender (as defined above);

(iii) a Lender becomes subject to an Increased Costs amount for which the Borrower becomes obliged to pay in accordance with this Agreement;

(iv) an Obligor becomes obliged to pay any additional amounts pursuant to Clause 12 (Tax Gross-up and Indemnity); or

(v) a Lender is required to be repaid pursuant to Clause 11.1 (Mandatory prepayment – Illegality),

then the Borrower may, on three (3) Business Days’ notice to the Facility Agent and such Lender, replace such Lender by requiring such Lender (and such Lender shall) transfer pursuant to Clause 21 (Assignment and Transfer) all (and not part only) of its rights and obligations under this Agreement to a Lender or other bank, financial institution, trust, fund or other entity (a Replacement Lender) selected by the Borrower, and that is acceptable to the Facility Agent (acting reasonably) that confirms its willingness to assume and does assume all the obligations of the transferring Lender (including the assumption of the transferring Lender’s participation in any Loans on the same basis as the transferring Lender) for a purchase price in cash payable at the time of transfer equal to the aggregate of the transferring Lender’s Relevant Percentage of the outstanding Loan and other amounts payable in relation thereto under the Finance Documents.

(b) In the event that:

(i) the Borrower or the Facility Agent (at the request of the Borrower) has requested the Lenders to give a consent in relation to, or to agree to a waiver or amendment of, any provisions of the Finance Documents;

(ii) the consent, waiver or amendment in question requires the approval of all the Lenders; and

(iii) the Majority Lenders have consented or agreed to such waiver or amendment,

then any Lender who does not and continues not to consent or agree to such waiver or amendment shall be deemed a non-consenting Lender (a Non-Consenting Lender).

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(c) In no event should a Lender replaced pursuant to this Clause 25.6 be required to pay or surrender to such Replacement Lender any of the fees received by such Lender pursuant to the Finance Documents.

25.7 Administrative Agent’s liability

(a) No Administrative Agent nor any of its officers, employees or agents shall be liable to the Lenders for any losses or any liability arising out of any action taken or omitted to be taken under or in connection with the participation of a Lender in any Loan or the Finance Documents or otherwise pursuant to this Agreement unless caused by the fraud, gross negligence or wilful misconduct of that Administrative Agent.

(b) No Administrative Agent assumes any liability for the exercise of, or the failure to exercise, any judgment, discretion or power given to it by or in connection with any of the Finance Documents.

(c) Except where a Finance Document specifically provides otherwise, no Administrative Agent is obliged to review or check the adequacy, accuracy or completeness of any document it forwards to another Party.

25.8 The Facility Agent’s liability

The Facility Agent does not assume any liability or responsibility with regard to the payment, or punctual payment, of any amounts due from any person under or in connection with the Finance Documents nor for any failure on the part of the Borrower in the performance of its obligations thereunder and does not make any representation or warranty as to the genuineness, validity, enforceability or sufficiency of the Finance Documents or of any certificate, report or other document executed or delivered to the Facility Agent thereunder.

25.9 The Security Agent’s liability

(a) None of the Security Agent nor any Receiver will be liable for any shortfall which arises on the enforcement or realisation of the Security Property.

(b) Any liability of the Security Agent or any Receiver arising under or in connection with any Finance Document or the Security Property shall be limited to the amount of actual loss which has been finally judicially determined to have been suffered but without reference to any special conditions or circumstances known to the Security Agent or Receiver (as the case may be) at any time which increase the amount of that loss. In no event shall the Security Agent or Receiver be liable for any loss of profits, goodwill, reputation, business opportunity or anticipated saving, or for special, punitive, indirect or consequential damages, whether or not the Security Agent or Receiver (as the case may be) has been advised of the possibility of such loss or damages.

(c) The Security Agent shall not be liable for any failure to:

(i) require the deposit with it of any deed or document certifying, representing or constituting the title of any Obligor to any of the Security Property;

(ii) register, file or record or otherwise protect any of the Transaction Security (or the priority of any such Security) under any law or regulation or to give notice to any person of the execution of any Finance Document or the Transaction Security; or

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(iii) take, or to require any Obligor to take, any step to perfect its title to any of the Security Property or to render the Transaction Security effective or to secure the creation of any ancillary Security under any law or regulation.

(d) The Security Agent may appoint and pay any person to act as a custodian or nominee on any terms in relation to any asset of the trust as the Security Agent may determine, including for the purpose of depositing with a custodian this Agreement or any document relating to the trust created under this Agreement and the Security Agent shall not be responsible for any loss, liability, expense, demand, cost, claim or proceedings incurred by reason of the misconduct, omission or default on the part of any person appointed by it under this Agreement or be bound to supervise the proceedings or acts of any person.

25.10 Inquiries

The Facility Agent shall use reasonable endeavours to ensure the proper use of the proceeds of each Loan but shall not by virtue of this Agreement or otherwise be required to make any enquiry as to the existence or possible existence of any breach or default by any person in the performance of the other provisions of the Finance Documents unless the Facility Agent has actual knowledge thereof.

25.11 Administrative Agents’ relationship with the Borrower

Each Administrative Agent may, without any liability to account, accept deposits from, provide finance to and generally engage in any kind of banking or trust business with the Borrower, any of the Borrower’s subsidiaries or associated companies or agencies or any other banks or financial institutions involved in the arrangements contemplated by this Agreement as if those arrangements had not been entered into.

25.12 Separate functions

In acting as agent, the each Administrative Agent shall be regarded as acting through its agency or trustee division (as applicable) which shall be treated as a separate entity from any other of its divisions or departments and, notwithstanding any other provision of this Agreement, any information received by some other division or department of that Administrative Agent may be treated as confidential and shall not be regarded as having been given to that Administrative Agent’s agency or trustee division (as applicable).

25.13 Rights and obligations of each Administrative Agent and Lender

It is acknowledged that each Administrative Agent may also be a Lender and a conflict of interest may arise in such circumstances. Each Administrative Agent agrees that it will act on arms’ length terms and will take all measures which it deems appropriate to ensure that it performs its obligations as Administrative Agent under the Finance Documents separately and independently from any of its obligations as a Lender.

25.14 No partnership

None of this Agreement, the Loans and the participations by each Lender shall, nor shall they be construed so as to, constitute a partnership between an Administrative Agent and the Lenders or an assignment (at law or in equity) of all or any part of the Remittances or of all or any of an Administrative Agent’s rights under the Finance Documents.

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25.15 Lender’s warranties

Each Lender acknowledges that:

(a) it has not relied on any statement, opinion, forecast or other representation made by an Administrative Agent to induce it to make its participation in any Loans; and

(b) it has made and will continue to make, without reliance on any Administrative Agent and based on such documents and information as such Lender considers appropriate, its own approval of the creditworthiness of the Borrower and its own independent investigation of the financial condition and affairs of the Borrower in connection with the making of its participation in any Loans and continuance of its participation in any Loans.

25.16 Information

(a) Except as otherwise expressly provided under any Finance Document, no Administrative Agent shall have a duty or responsibility to provide the Lenders with any credit or other information with respect to any Obligor other than such information as is provided to it from time to time under the Finance Documents relating to an Obligor which such Administrative Agent undertakes, subject in every case to any confidentiality obligations which may be applicable to that Administrative Agent in respect of such information, to use all reasonable efforts to transmit to the Lenders as soon as reasonably practicable.

(b) If an Administrative Agent receives notice from a Party referring to any Finance Document, describing a Default and stating that the circumstance described is a Default, it shall promptly notify the Lenders.

25.17 No obligation

The Parties agree, notwithstanding any provision to the contrary, express or implied in this Agreement, and the Lenders expressly acknowledge, that the Facility Agent has no obligation:

(a) to repurchase the Loans or any part of the Loan;

(b) to repay all or any part of the Loans; or

(c) to support, indemnify or compensate the Lenders for losses suffered by the Lenders as a consequence of any of the matters provided for in this Agreement or any Finance Document.

25.18 No responsibility

No Administrative Agent shall be liable for any failure to:

(a) obtain any licence, consent or other authority for the execution, delivery, legality, validity, enforceability or admissibility in evidence of any of the Finance Documents or the Transaction Security; or

(b) require any further assurances in relation to any of the Finance Documents or the Transaction Security.

25.19 Winding up of trust

(a) If the Security Agent determines that:

(i) all of the Secured Obligations and all other obligations secured by the Security Documents have been fully and finally discharged; and

(ii) no Lender is under any commitment, obligation or liability (actual or contingent) to participate in any Loan or provide other financial accommodation to any Obligor pursuant to the Finance Documents,

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(b) then:

(i) the trusts set out in this Agreement shall be wound up and the Security Agent shall release, without recourse or warranty, all of the Transaction Security and the rights of the Security Agent under each of the Security Documents; and

(ii) any Security Agent that is a Retiring Administrative Agent shall release, without recourse or warranty, all of its rights under each Security Document.

25.20 Powers supplemental to Trustee Acts

The rights, powers, authorities and discretions given to the Security Agent under or in connection with the Finance Documents shall be supplemental to the Trustee Act 1925 and the Trustee Act 2000 and in addition to any which may be vested in the Security Agent by law or regulation or otherwise.

25.21 Disapplication of Trustee Acts

Section 1 of the Trustee Act 2000 shall not apply to the duties of the Security Agent in relation to the trusts constituted by this Agreement. Where there are any inconsistencies between the Trustee Act 1925 or the Trustee Act 2000 and the provisions of this Agreement, the provisions of this Agreement shall, to the extent permitted by law and regulation, prevail and, in the case of any inconsistency with the Trustee Act 2000, the provisions of this Agreement shall constitute a restriction or exclusion for the purposes of that Act.

26. RELEASES OF SECURITY

In respect of a disposal of:

(a) any Security Property;

(b) any asset or undertaking by a Obligor; or

(c) any other asset or undertaking that is subject to the Transaction Security,

that is permitted pursuant to the Finance Documents, the Security Agent is irrevocably authorised (at the cost of the relevant Obligor and without the need for any consent, sanction, authority or further confirmation from any Finance Party or Obligor):

(i) to release all or any part of the Transaction Security or any other claim (relating to a Finance Document) over that asset or undertaking;

(ii) where that asset consists of shares or any equivalent equity interest in the capital of an Obligor, to release all or any part of the Transaction Security or any other claim (relating to a Finance Document) over that Obligor’s assets; and

(iii) to execute and deliver or enter into any release of all or any part of the Transaction Security or any claim described in paragraphs (i) and (ii) and any consent to dealing that may, in the discretion of the Security Agent, be considered necessary or desirable.

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27. ENFORCEMENT OF TRANSACTION SECURITY

27.1 Enforcement instructions

(a) The Security Agent may refrain from enforcing the Transaction Security unless instructed otherwise by the Majority Lenders.

(b) Subject to the Transaction Security having become enforceable in accordance with its terms the Majority Lenders may give or refrain from giving instructions to the Security Agent to enforce or refrain from enforcing the Transaction Security as they see fit.

(c) The Security Agent is entitled to rely on and comply with instructions given in accordance with this Clause 27.1.

27.2 Manner of enforcement

If the Transaction Security is being enforced pursuant to Clause 27.1 (Enforcement instructions), the Security Agent shall enforce the Transaction Security in such manner (including, without limitation, the selection of any administrator (or any analogous officer in any jurisdiction) of any Obligor to be appointed by the Security Agent) as the Majority Lenders shall instruct or, in the absence of any such instructions, as the Security Agent considers in its discretion to be appropriate.

27.3 Waiver of rights

To the extent permitted under applicable law and subject to Clause 27.1 (Enforcement instructions), Clause 27.2 (Manner of enforcement) and Clause 23.4 (Application of monies) each Finance Party waives all rights it may otherwise have to require that the Transaction Security be enforced in any particular order or manner or at any particular time or that any amount received or recovered from any person, or by virtue of the enforcement of any of the Transaction Security or of any other Security interest, which is capable of being applied in or towards discharge of any of the Secured Obligations is so applied.

27.4 Enforcement through Security Agent only

The Finance Parties (other than the Security Agent) shall not have any independent power to enforce, or have recourse to, any of the Transaction Security or to exercise any right, power, authority or discretion arising under the Security Documents except through the Security Agent.

28. COMMISSIONS, COSTS AND EXPENSES

28.1 Reimbursement of costs and expenses

Each Lender shall reimburse each Administrative Agent on production of an appropriate statement of costs and expenses prepared by such Administrative Agent an amount equal to its Relevant Percentage of all costs, expenses (including legal expenses) and disbursements which may be properly incurred or made by such Administrative Agent in connection with its obligations under the Finance Documents on a full indemnity basis (except for any costs, expenses and disbursements incurred due to the fraud, gross negligence or wilful default of such Administrative Agent) to the extent that such costs and expenses are not reimbursed by the Borrower or any other responsible party on first demand by such Administrative Agent (or any other person making demand on behalf of an Administrative Agent). Each Administrative Agent shall be entitled to retain any sum due to it from a Lender under this Clause 28.1 and the Facility Agent shall be entitled to retain such sum from any payment to be made to that Lender pursuant to Clause 23 (Payments by the Facility Agent – Limited Recourse).

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28.2 Stamp duty

The Lenders (each to the extent of its Relevant Percentage of the amount concerned) shall pay all stamp duty and documentation, registration or other like duties and Taxes, if any, from time to time imposed on or in connection with this Agreement, the Loans or the Tranche Commitments, and shall indemnify each Administrative Agent against any liability arising by reason of any delay or omission by the Lenders to pay such duties or Taxes (rateably in each case).

29. INCREASED COSTS

29.1 Increased Costs

(a) Subject to Clause 29.2 (Exceptions) and paragraph (c) the Borrower shall pay the amount of any Increased Costs that may be incurred as a result of:

(i) the introduction of or any change in (or in the interpretation or application of) any law or regulation; or

(ii) compliance with any law or regulation made after the date of this Agreement.

(b) In this Agreement, Increased Costs means:

(i) a reduction in the rate of return from the Facility or on a Finance Party’s overall capital;

(ii) an additional or increased cost; or

(iii) a reduction of any amount due and payable under any Finance Document,

which is incurred or suffered by a Lender to the extent that such Increased Cost is attributable to such Lender having entered into its commitment or performing its obligations under any Finance Document.

(c) The Borrower shall not be liable for any Increased Costs that may be incurred during the final Interest Period.

29.2 Exceptions

Clause 29.1 (Increased Costs) does not apply to the extent any Increased Cost is:

(a) attributable to a Tax Deduction required by law to be made by the Borrower;

(b) compensated for by Clause 12 (Tax Gross-Up and Indemnity) (or would have been compensated for under Clause 12 (Tax Gross-Up and Indemnity) but was not so compensated solely because of any exclusion in paragraph 12.2 of Clause 12 (Tax Gross-Up and Indemnity));

(c) compensated for by Clause 13.1(b) or Clause 13.1(d) (or would have been compensated for under Clause 13.1(d) but was not so compensated because of the exclusion in Clause 13.1(e));

(d) attributable to the wilful breach by the relevant Finance Party or its Affiliates of any law or regulation;

(e) attributable to a Finance Party’s market making and trading in the ordinary course of its credit derivatives, hedging and/or credit synthetics business; or

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(f) attributable to the introduction, implementation or application of or compliance with any Announced Rule Change (provided that the Announced Rule Change is introduced and implemented in materially the same form as the announcements, publications, documents and reports referred to in the definition of Announced Rule Change).

29.3 Increased cost claims

(a) In the event that a Finance Party intends to make a claim pursuant to Clause 29.1 (Increased Costs), the Facility Agent shall as soon as is reasonably practicable after a Finance Party has given notice to the Facility Agent that it intends to make claim pursuant to Clause 29.1 (Increased Costs), promptly notify the Borrower of the same.

(b) The Facility Agent shall, as soon as practicable after a demand by the Borrower, provide a certificate confirming the amount and details of the basis for the claim and the calculation of its Increased Costs.

(c) The Borrower shall make payment in respect of any claim pursuant to Clause 29.1 (Increased Costs) within ten (10) Business Days of its receipt of any notice issued by the Facility Agent pursuant to this Clause 29.3 provided that, in the event that a demand is issued by the Borrower for a certificate pursuant to Clause 29.3(b) the Borrower shall make payment within ten (10) Business Days of its receipt of such certificate.

30. MITIGATION

30.1 Each Finance Party must, in consultation with the Borrower, take all reasonable steps to mitigate any circumstances which arise and which result or would result in:

(a) any Tax Payment being payable to any Finance Party;

(b) any Increased Cost being payable to any Finance Party;

(c) the Facility Agent being able to exercise any right of prepayment and/or cancellation under this Agreement by reason of any illegality; or

(d) any FATCA Payment being payable to any Finance Party,

including transferring its rights and obligations under the Finance Documents to an Affiliate.

30.2 Clause 30.1 does not in any way limit the obligations of the Borrower under the Finance Documents.

30.3 The Borrower must indemnify each Finance Party for all costs and expenses reasonably incurred by that Finance Party as a result of any steps taken by it under Clause 30.1.

30.4 A Finance Party is not obliged to take any step under Clause 30.1 if, in the opinion of that Finance Party (acting reasonably), to do so might be prejudicial to it.

30.5 No provision of this Agreement will:

(a) interfere with the right of the Finance Parties to arrange their affairs (Tax or otherwise) in whatever manner it thinks fit;

(b) oblige the Facility Agent (on behalf of the Finance Parties) to investigate or claim any credit, relief, remission or repayment available to it or the extent, order and manner of any claim; or

(c) oblige any of the Finance Parties to disclose any information relating to their affairs (Tax or otherwise) or any computations in respect of Tax.

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31. SET-OFF

A Finance Party may set-off any matured obligation due from the Borrower under the Finance Documents against any matured obligation owed by that Finance Party to the Borrower, regardless of the place of payment, booking branch or currency of either obligation. If the obligations are in different currencies, the Finance Party may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off.

32. NOTICES

32.1 The Borrower

All formal communication under this Agreement to or from the Borrower must be sent through the Facility Agent.

32.2 Electronic communication

Any electronic communication made between an Administrative Agent and another Party will be effective only when actually received in readable form and only if it is addressed in such a manner, and to such email address(es), as the Parties shall specify for this purpose from time to time.

32.3 Method of delivery

Every notice, request, demand or other communication under this Agreement shall be in writing delivered personally, by courier, by authenticated SWIFT message, by first-class prepaid letter, facsimile transmission (confirmed in the case of a facsimile transmission by first-class prepaid letter sent within 48 hours of despatch) or by e-mail.

32.4 Deemed receipt

Every notice, request, demand or other communication shall, subject as otherwise provided in this Agreement, be deemed to have been received, in the case of a letter when delivered personally or ten (10) days after it has been put in to the post in a correctly addressed envelope (as evidenced by proof of posting), in the case of a facsimile transmission when the sender receives a clear transmission report and in the case of an e-mail when the sender receives a confirmed delivery report.

32.5 Notice details

Every notice, request, demand or other communication shall be addressed or sent to the appropriate address, facsimile number or e-mail address as follows:

(a) To the Borrower at:

Nakilat Holdco L.L.C.

Address:

Teekay Shipping (Canada) Limited

Suite 2000, Bentall 5

550 Burrard Street

Vancouver, BC

68

Canada, V6C 2K2

Attention: Renee Eng, Treasury Manager

Fax: +1 604 844 6600

Email: _TreasuryLoansVancouver@teekay.com

with a copy to:

Qatar Gas Transport Company Limited (Nakilat)

Address:

P.O. Box 22271

Doha, Qatar

Attention: Mohammad Siddiqui

Telephone: +974-4499 8111

Fax: +974-4448 3111

E-mail: MSiddiqui@qgtc.com.qa

(b) To the Facility Agent at:

Qatar National Bank SAQ

Address: Corporate & Syndication Loans, Retail & Corporate Operations, P.O. Box 1000, Doha, State of Qatar

Attention: Jaffar Ali / Fathiyeh Ali Hassan / Chiranjib Parial

Fax: +974 4431 3069

Email: jaffar.ali@qnb.com.qa    /    fathiyeh.ali@qnb.com.qa    /    chiranjib.parial@qnb.com.qa    /

Agencyservices@qnb.com.qa

(c) To the Security Agent at:

Qatar National Bank SAQ

Address: Corporate & Syndication Loans, Retail & Corporate Operations, P.O. Box 1000, Doha, State of Qatar

Attention: Jaffar Ali / Fathiyeh Ali Hassan / Chiranjib Parial

Fax: +974 4431 3069

Email: jaffar.ali@qnb.com.qa    /    fathiyeh.ali@qnb.com.qa    /    chiranjib.parial@qnb.com.qa    / Agencyservices@qnb.com.qa

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(d) to the Lenders as set out in Schedule 7 (The Lenders, Notices, Commitments and Relevant Percentages) or as such details are provided pursuant to Clause 21 (Assignment and Transfer),

or to such other address, facsimile number or e-mail address as is notified by one Party to the others.

32.6 English language

(a) Any notice given under or in connection with any Finance Document must be in English.

(b) All other documents provided under or in connection with any Finance Document must be:

(i) in English; or

(ii) if not in English, and if so required by the Facility Agent, accompanied by a certified English translation and, in this case, the English translation will prevail unless the document is a constitutional, statutory or other official document.

33. PAYMENTS AND EXPENSES

33.1 Transaction expenses

The Borrower shall promptly on demand pay a Finance Party the amount of all properly documented out-of-pocket costs and expenses including legal costs, market valuation costs, costs incurred in executing the Finance Documents (including any signing ceremony cost) and perfecting the Transaction Security, in each case reasonably incurred by that Finance Party in connection with the negotiation, preparation, printing, execution and perfection of:

(a) this Agreement and any other documents referred to in this Agreement; and

(b) any other Finance Documents executed after the date of this Agreement.

33.2 Amendment costs

If the Borrower requests an amendment, waiver, release or consent, the Borrower shall promptly on demand, reimburse each Finance Party for the amount of all properly documented costs and expenses (including legal fees) reasonably incurred by that Finance Party in responding to, evaluating, negotiating or complying with that request or requirement.

33.3 Enforcement costs

The Borrower shall promptly on demand by any Finance Party, pay to that Finance Party the amount of all properly documented costs and expenses (including legal fees) reasonably incurred by that Finance Party in connection with the enforcement of, or the preservation of any rights under, any Finance Document.

33.4 Payments

Where any payment or delivery hereunder is due on a day which is not a Business Day, the due date shall be the next following Business Day, unless the next following Business Day falls in the next calendar month, in which case such payment will be made on the preceding Business Day.

34. FEES

The Borrower shall pay to the Facility Agent (for its own account) fees in the amount and manner agreed in the Fee Letter.

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35. MISCELLANEOUS

35.1 No waiver

(a) The rights of the Finance Parties under the Finance Documents:

(i) may be exercised as often as necessary;

(ii) are cumulative and not exclusive of its rights under the general law; and

(iii) may be waived only in writing and specifically.

(b) Delay in exercising or non-exercise or partial exercise of any such right is not a waiver of that right.

35.2 Assignment

Other than in accordance with this Agreement, no Party shall be entitled to assign or transfer any of its rights, benefits or obligations under this Agreement without the prior written consent of the other Party and any attempted assignment or transfer in contravention of this Clause 35.2 shall be void.

35.3 Counterparts

This Agreement may be executed in counterparts (including by exchange of executed counterparts by facsimile transmission) and such counterparts taken together shall be deemed to constitute one and the same instrument.

35.4 Entire agreement

This Agreement constitutes the entire agreement and understanding of the Parties with respect to its subject matter and supersedes all oral communication and prior writings with respect thereto.

35.5 Amendments

No amendment, modification or waiver in respect of this Agreement will be effective unless in writing and executed by each of the Borrower, the Facility Agent and the Security Agent (acting in accordance with Clause 25 (Remittances – duties of and discretion of the Administrative Agents)).

35.6 Remedies cumulative

Except as provided in this Agreement, the rights, powers, remedies and privileges provided in this Agreement are cumulative and not exclusive of any rights, powers, remedies and privileges provided by law.

35.7 Partial invalidity

If, at any time, any provision of any Finance Document is or becomes illegal, invalid or unenforceable in any respect under any law of any jurisdiction, neither the legality, validity or enforceability of any other provision of any Finance Document nor the legality, validity or enforceability of such provision under the law of any other jurisdiction will in any way be affected or impaired.

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36. CONFIDENTIALITY

36.1 Confidential Information

Each Finance Party agrees to keep all Confidential Information confidential and not to disclose it to anyone, save to the extent permitted by Clause 36.2 (Exceptions) and to ensure that all Confidential Information is protected with security measures and a degree of care that would apply to its own confidential information.

36.2 Exceptions

Any Finance Party may disclose:

(a) to any of its Affiliates and any of its or their officers, directors, employees, professional advisers, auditors, partners and representatives such Confidential Information as that Finance Party shall consider appropriate if any person to whom the Confidential Information is to be given pursuant to this Clause 36.2(a) is informed in writing of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no such requirement to so inform if the recipient is subject to professional obligations to maintain the confidentiality of the information or is otherwise bound by requirements of confidentiality in relation to the Confidential Information;

(b) to any person to whom it assigns or transfers (or may potentially assign or transfer) all or any of its rights and/or obligations under one or more Finance Documents and to any of that person’s Affiliates, representative or professional advisers;

(c) to whom information is required or requested to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other regulatory authority or similar body, the rules of any relevant stock exchange or pursuant to any applicable law or regulation; or

(d) to whom information is required to be disclosed in connection with, and for the purposes of any litigation, arbitration, administrative or other investigations, proceedings or disputes.

37. GOVERNING LAW

This Agreement and any non-contractual obligations connected therewith shall be governed by and construed in accordance with English law.

38. JURISDICTION

38.1 Unless specifically provided in another Finance Document in relation to that Finance Document, the English courts have exclusive jurisdiction to settle any dispute arising out of or in connection with any Finance Document (including a dispute relating to the existence, validity or termination of any Finance Document or any non-contractual obligation arising out of or in connection with any Finance Document) (a Dispute).

38.2 The Parties agree that the English courts are the most appropriate and convenient courts to settle Disputes and accordingly no Party will argue to the contrary.

38.3 This Clause 38 is for the benefit of the Finance Parties only. As a result, to the extent allowed by law:

(a) no Finance Party will be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction; and

(b) the Finance Parties may take concurrent proceedings in any number of jurisdictions.

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39. SERVICE OF PROCESS

39.1 Without prejudice to any other mode of service allowed under any relevant law, the Borrower:

(a) irrevocably appoints WFW Legal Services Limited, 15 Appold Street, London, EC2A 2HB as its agent under the Finance Documents for service of process in relation to any proceedings before the English courts in connection with any Finance Document; and

(b) agrees that failure by a process agent to notify the Borrower of the process will not invalidate the proceedings concerned.

39.2 If any person appointed as process agent under this Clause 39 (Service of process) is unable for any reason so to act, the Borrower (on behalf of all the Obligors) must immediately (and in any event within twenty (20) days of the event taking place) appoint another agent on terms acceptable to the Facility Agent. Failing this, the Facility Agent may appoint another process agent for this purpose.

40. WAIVER OF IMMUNITY

The Borrower irrevocably and unconditionally:

(a) agrees not to claim any immunity from proceedings brought by a Finance Party against it in relation to a Finance Document and to ensure that no such claim is made on its behalf;

(b) consents generally to the giving of any relief or the issue of any process in connection with those proceedings; and

(c) waives all rights of immunity in respect of it or its assets.

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SCHEDULE 1

CONDITIONS PRECEDENT

1. CORPORATE DOCUMENTS

1.1 A copy of the constitutional documents of each Obligor.

1.2 A copy of a resolution of the board of directors (or other authorisation) of each Obligor authorising a specified person or persons to approve the terms of, and the performance of all transactions contemplated by, the Finance Documents and to execute and, as necessary, deliver the Finance Documents to which it is a party.

1.3 An original certificate of an authorised signatory of the Borrower (in respect of itself and each Guarantor):

(a) certifying that each copy of the documents specified in paragraphs 1.1, 1.2 and 5 (Other Documents and Evidence) (other than paragraph 5.3) of this Schedule 1 is correct, complete and in full force and effect as at a date no earlier than Financial Close;

(b) confirming the identity and specimen signatures of the directors and signatories of the Borrower and each Guarantor who are authorised to sign the Finance Documents and any notices to which the Borrower or any Guarantor is party on its behalf;

(c) certifying that each representation and warranty made pursuant to:

(i) in respect of the Borrower, Clause 15 (Representations and Warranties), other than Clause 15.9 (No default) and Clause 15.10 (Financial statements); and

(ii) in respect of each Guarantor, clause 3 (Representations and Warranties) of the Guarantee of such Guarantor,

is true and correct in all material respects as at the date of Financial Close; and

(d) certifying that no Default has occurred or is continuing.

2. SIGNED DOCUMENTS

2.1 The following original documents, each duly executed by the parties to it:

(a) this Agreement;

(b) the Fee Letter; and

(c) in respect of each Guarantor:

(i) a Global Assignment Agreement; and

(ii) a Guarantee;

2.2 The original Charge Agreement, duly executed by each party to it and evidence that the Charge Agreement is validly created and perfected.

2.3 Evidence that all documentation required to perfect the Transaction Security created or evidenced pursuant to the Security Documents listed in paragraph 2.1 of this Schedule 1 has been executed and that such Transaction Security will be validly created and perfected immediately upon release of the Existing Security as it relates to the relevant Vessel.

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3. LEGAL OPINIONS

A copy of each of the following executed opinions:

(a) A legal opinion from Watson, Farley & Williams, in respect of (i) the capacity of the Borrower under Republic of the Marshall Islands law to enter into the Facility Agreement and the Charge Agreement; (ii) the capacity of each Guarantor under Republic of the Marshall Islands law to enter into the Global Assignment Agreements and the Guarantees and (iii) the enforceability of the Charge Agreement.

(b) One or more legal opinions from Allen & Overy LLP, legal advisers to the Finance Parties.

4. MARKET VALUATION REPORT

A Market Valuation Report for each Vessel dated no earlier than thirty (30) Business Days prior to the date of this Agreement.

5. OTHER DOCUMENTS AND EVIDENCE

5.1 A copy of any other material Authorisation that is necessary in connection with the entry into and performance by each Obligor of the transactions contemplated by any Finance Document or for the validity and enforceability of any Finance Document.

5.2 Evidence that the agent, under the Finance Documents for service of process in England and Wales has accepted its appointment.

5.3 Evidence from the Existing Lenders that, immediately upon receipt of payment in full of any Existing Facility as it relates to the relevant Vessel, they will release all Existing Security as it relates to the relevant Vessel.

5.4 A copy of each manager’s document of compliance.

5.5 A copy of each document listed in Schedule 4 (KYC Information).

6. FEES

Evidence that the fees, costs and expenses then due from the Borrower pursuant to any of the Finance Documents have been paid or will be paid by the Initial Utilisation Date.

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SCHEDULE 2

FORM OF UTILISATION REQUEST

From:	Nakilat Holdco L.L.C. as Borrower
To:	Qatar National Bank SAQ, as Facility Agent
Date:	[                    ]

Facility Agreement dated      December 2014 (the Agreement)

Terms defined in the Agreement have the same meaning when used in this document.

This is a Utilisation Request under the Agreement.

We wish to borrow a Loan on the following terms:

(a)	Proposed Utilisation Date:	[            ]
(b)	Interest Period:	[            ]
(c)	Currency of Loan:	USD
(d)	Amount	[            ]
(e)	Tranche	[            ]

We confirm that each condition specified in Clause 5 (Conditions of Utilisation) of the Agreement is satisfied on the date of this Utilisation Request.

The proceeds of this Loan should be credited as follows:

(i) USD[ — ] to [account] by no later than [time] on the Proposed Utilisation Date; [and

(ii) USD[ — ] to [account] by no later than [time] on the Proposed Utilisation Date,]¹

[provided that, the amount of the fee payable in accordance with Clause 34 (Fees) and the Fee Letter shall be deemed paid in full with the proceeds of the Loan that are not paid to such account.]²

This Utilisation Request is irrevocable.

Authorised Signatory

For and on behalf of

NAKILAT HOLDCO L.L.C.

¹  Additional instructions to be specified by the Borrower as necessary.

²  To be included for Initial Utilisation Request only. Distribution of funds from initial drawdown to be discussed.

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SCHEDULE 3

AMORTISATION SCHEDULE³

No.	Repayment Date (T = First Repayment Date)	Repayment Instalment (%)
1	T	1.0575
2	T + 3 months	1.0575
3	T + 6 months	1.0575
4	T + 9 months	1.0575
5	T+ 12 months	1.1100
6	T + 15 months	1.1100
7	T + 18 months	1.1100
8	T + 21 months	1.1100
9	T + 24 months	1.1650
10	T + 27 months	1.1650
11	T + 30 months	1.1650
12	T + 33 months	1.1650
13	T + 36 months	1.2225
14	T + 39 months	1.2225
15	T + 42 months	1.2225
16	T + 45 months	1.2225
17	T + 48 months	1.2850
18	T + 51 months	1.2850
19	T + 54 months	1.2850
20	T + 57 months	1.2850
21	T + 60 months	1.3475
22	T + 63 months	1.3475
23	T + 66 months	1.3475
24	T + 69 months	1.3475
25	T + 72 months	1.4150
26	T + 75 months	1.4150
27	T + 78 months	1.4150
28	T + 81 months	1.4150
29	T + 84 months	1.4875
30	T + 87 months	1.4875
31	T + 90 months	1.4875
32	T + 93 months	1.4875
33	T + 96 months	1.5625
34	T + 99 months	1.5625
35	T + 102 months	1.5625
36	T + 105 months	1.5625
37	T + 108 months	1.640
38	T + 111 months	1.640
39	T + 114 months	1.640
40	T + 117 months	1.640
41	T + 120 months	1.7225
42	T + 123 months	1.7225
43	T + 126 months	1.7225
44	T + 129 months	1.7225
45	T + 132 months	1.8075
46	T + 135 months	1.8075
47	T + 138 months	1.8075
48	T + 141 months	34.5175

³  Note: Amortisation schedule to be shortened and final balloon payment to be increased in accordance with Clause 3.3(f) in the event of an Availability Period Extension.

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SCHEDULE 4

KYC INFORMATION

a) A copy of each document listed in paragraphs 1.1, 1.2 and 1.3(b) of Schedule 1 (Conditions Precedent).

b) In respect of each Obligor, a list of each of its directors, in each case disclosing their:

(i) full name;

(ii) nationality;

(iii) date of birth; and

(iv) residential address.

c) To the extent not provided pursuant to paragraph 1.3(b) of Schedule 1 (Conditions Precedent) in respect of each Obligor, a copy of the passport details page in respect of two (2) directors of such Obligor.

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SCHEDULE 5

FORM OF QUIET ENJOYMENT UNDERTAKING

Consent and Agreement

CONSENT AND AGREEMENT (this “Consent’), dated as of      December 2014, among (1) Ras Laffan Liquefied Natural Gas Company Limited (II), a company organised and existing under the laws of the State of Qatar (the “Charterer”); (2) Qatar National Bank SAQ as Security Agent (together with its successors in such capacity, the “Security Agent”) for the sole benefit of the Finance Parties under the Finance Documents (as each such term is defined below); and (3) [ — ], a limited liability company formed and existing under the laws of the Republic of the Marshall Islands (the “Guarantor”).

RECITALS

A. The Vessel. The Guarantor is the registered owner of the liquefied natural gas tanker named “[ — ]” (hull number [ — ]) (the “Vessel’).

B. The Charter. Pursuant to a time charterparty in relation to the Vessel dated 1 July 2004 made between, originally, the Charterer and Teekay Nakilat Corporation, as novated to Teekay Nakilat (II) Limited under a novation agreement dated [18 January 2006] between [the Charterer, Teekay Nakilat Corporation and Teekay Nakilat (II) Limited], as amended and restated by an amendment and restatement agreement dated 21 March 2012 and subsequently novated to the Guarantor under the novation, amendment and restatement agreement dated [ — ] and made between the Guarantor, Teekay Nakilat (II) Limited and the Charterer (the “Novation Agreement”) (such charter as novated, amended and restated by the Novation Agreement, the “Charter’), the Charterer has agreed to charter the Vessel from the Guarantor for an initial period of about twenty (20) years (subject to termination rights) from delivery thereunder.

C. The Finance Documents. Pursuant to a facility agreement dated      December 2014 (the “Facility Agreement”) among (i) Nakilat Holdco L.L.C. (the “Borrower”); (ii) the Security Agent; (iii) Qatar National Bank SAQ (as the “Facility Agent’); and (iv) the financial institutions listed in Schedule 7 (The Lenders, Notices, Commitments and Relevant Percentages) to the Facility Agreement or who are from time to time parties thereto (the “Banks”, and together with the Security Agent, and the Facility Agent, the “Finance Parties”), the Finance Parties have agreed, inter alia, to make a facility available to the Borrower upon the terms and subject to the conditions of the Finance Documents (as such term is defined in the Facility Agreement).

D. Guarantee. Pursuant to a guarantee dated      December 2014 (the “Guarantee”) the Guarantor has agreed to guarantee the obligations of the ‘Obligors’ (as such term is defined in the Facility Agreement) under the Finance Documents. As part of the security for the obligations of the Guarantor to the Finance Parties under the Finance Documents, the Guarantor has agreed to grant to the Security Agent certain security including (inter alia):

(i) an assignment of its rights under the Charter; and

(ii) a first priority ship mortgage over the Vessel (the “Mortgage”).

E. Condition Precedent. The Finance Documents require the execution, delivery and implementation of this Consent and it is a condition precedent to making the facility available that the Charterer shall have executed and delivered this Consent. It is acknowledged by the Guarantor and the Charterer that the execution of this Consent satisfies the requirement of [Clause 27b] of the Charter.

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NOW, THEREFORE in consideration of the foregoing recitals and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Charterer, the Security Agent and the Guarantor hereby agree as follows:

ARTICLE 1. – CONSENT TO ASSIGNMENT, ETC.

1.1 Quiet Enjoyment Undertakings. The Security Agent for itself and in its capacity as agent for the Finance Parties irrevocably undertakes that subject to due performance by the Charterer of all its material obligations under the Charter (subject to the expiry of any grace periods), the Security Agent shall, for the duration of the Charter and any extension thereof permitted by the Charter allow the Charterer unfettered use of the Vessel in accordance with the terms and conditions of the Charter. Any breach by the Charterer of its obligations under the Charter shall be subject solely to the rights and remedies afforded to the Guarantor under the Charter. The Security Agent will not exercise any rights it may have against the Vessel or in connection with the Charter if any default under the Finance Documents (an “Event of Default”) has occurred and is continuing, except as provided by Articles 1.3 and 1.7 below.

For the avoidance of doubt, where the Vessel is arrested or subjected to forfeiture proceedings (or the same are threatened) reasonable actions on the part of the Security Agent, as advised to and agreed by Charterer, to have the Vessel released from such arrest or proceedings or to prevent or avoid any such arrest or proceedings shall not constitute a breach by the Security Agent of the terms of this Consent.

1.2 Consent to Assignment. The Charterer (i) consents in all respects to the pledge and assignment to the Security Agent pursuant to the Finance Documents of all the Guarantor’s right, title and interest in, to and under the Charter (the “Assigned Interests”) and to the grant of the Mortgage; (ii) acknowledges the right of the Security Agent or any designee of the Security Agent, in the exercise of the Security Agent’s rights and remedies under the Finance Documents, to make all demands, give all notices, take all actions and exercise all rights of the Guarantor under the Charter; and (iii) acknowledges that, without the prior written consent of the Facility Agent, acting on the instructions of the requisite Banks in accordance with the Finance Documents, the Guarantor may not amend the Charter, where such amendment would have a material adverse effect on (A) the ability of any Obligor to perform its obligations under any Finance Document, (B) the validity or enforceability of any Finance Document, or (C) any right or remedy of any Finance Party in respect of a Finance Document.

1.3 Substitute Owner. The Charterer agrees that (i) if the Security Agent shall notify the Charterer that an Event of Default has occurred and is continuing and that the Security Agent has elected to exercise the rights and remedies set forth in the Finance Documents, then the Security Agent or its designee (which may be or include a receiver appointed in respect of the Guarantor or a person nominated by the Security Agent or a special purpose company created for the purpose of acquiring the Vessel or a third-party purchaser of the Vessel) which, in any such case, elects to assume the Guarantor’s obligations under the Charter (the “Substitute Owner”) shall be substituted for the Guarantor under the Charter; and (ii) in such event, the Charterer shall (without prejudice to Article 1.4 below) recognise the Substitute Owner and shall continue to perform its obligations under the Charter in favor of the Substitute Owner, provided that (x) the Security Agent shall give the Charterer not less than thirty (30) days’ prior written notice of the intended transfer and details of the proposed Substitute Owner; (y) in the opinion of the Charterer (acting reasonably and without undue delay), the proposed Substitute Owner (and the third-party vessel manager to be employed by the proposed Substitute Owner, if any) shall have the legal capacity and the financial resources and expertise to own and operate the Vessel and, without limitation, to perform the Guarantor’s obligations under the Charter; and (z) such proposed Substitute Owner shall have undertaken to the Charterer in writing to remedy as soon as practicable any outstanding defaults of the Guarantor under the Charter. The Charterer agrees that it will, at no cost to it, enter into such documents as may be reasonably required by the Security Agent or the Substitute Owner to give effect to any substitution to be effected in accordance with this Article 1.3 and the Security Agent agrees that all documented costs and expenses (including legal costs) reasonably and properly incurred by the Charterer in connection with this Article 1.3 shall be for the account of the Security Agent.

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1.4 Preservation of Charterer’s Rights. Notwithstanding any other provision in this Consent, any disposal of the Vessel by the Security Agent to a Substitute Owner in accordance with Article 1.3 shall not prejudice the Charterer’s rights under the Charter accruing before or after the date of such disposal, including, without limitation, any right that the Charterer may then have to terminate the Charter. If the Security Agent exercises its rights under Article 1.3 above to dispose of the Vessel to a Substitute Owner during the term of the Charter, the Security Agent shall comply with the conditions set out in Article 1.1 above and shall (subject to any requirements or restrictions imposed by any applicable law in relation to disposal of the Vessel) dispose of the Vessel expressly subject to the Charter. The Security Agent shall procure that the Substitute Owner (and any other person providing financing to the Substitute Owner for the purposes of the acquisition by the Substitute Owner of the Vessel) issues an undertaking to the Charterer on substantially the same terms as the undertaking granted by the Security Agent in Article 1.1 above.

1.5 Right to Cure. In the event of a default or breach by the Guarantor in the performance of any of its obligations under the Charter, or upon the occurrence or non-occurrence of any event or condition under the Charter that would immediately or with the passage of any applicable grace period or the giving of notice, or both, enable the Charterer to suspend or terminate the Charter (a “Default”), the Charterer shall not suspend or terminate the Charter until it first gives written notice of such Default to the Security Agent or its designee and affords such party a period of thirty (30) days to cure the circumstances giving rise to such suspension or termination rights.

1.6 No Termination or Assignment. Except to the extent permitted in the Charter, the Charterer agrees that it will not, without the prior written consent of the Security Agent, (i) enter into or agree to any consensual suspension, cancellation, or termination of the Charter, or (ii) assign or otherwise transfer any of its right, title or interest under the Charter save as permitted under the Charter.

1.7 Replacement Agreement. In the event that the Charter is terminated as a result of any bankruptcy or insolvency proceeding or other similar proceeding affecting the Guarantor, the Charterer shall, at the option of the Security Agent, enter into a new agreement with the Security Agent or its transferee or nominee (the “Replacement Owner”) on terms substantially the same as the terms of the Charter. In such event, the Security Agent (or, as the case may be, the Replacement Owner) shall comply with the provisions of Article 1.3 (x), (y) and (z) which shall apply for the purposes of this Article 1.7 as if the words “proposed Substitute Owner” have been replaced by the words “proposed Replacement Owner”.

1.8 No Liability. The Charterer acknowledges and agrees that neither the Security Agent nor its designees nor any of the Finance Parties shall have any liability or obligation under the Charter as a result of this Consent, nor shall the Security Agent or its designees be obligated or required to (i) perform any of the Guarantor’s obligations under the Charter, except during any period in which the Security Agent or its designee is a Substitute Owner under the Charter pursuant to Article 1.3 or a Replacement Owner under the Charter pursuant to Article 1.7, in which case the obligations of such Substitute Owner or Replacement Owner shall be no more onerous than those of the Guarantor under the Charter for such period (unless otherwise expressly agreed by the Guarantor and the Security Agent or the Substitute Owner or the Replacement Owner); or (ii) take any action to collect or enforce any claim for payment assigned under the Finance Documents.

1.9 Guarantor’s Undertaking. The Guarantor undertakes to the Charterer that it shall not make any claim against the Vessel and/or the Charterer arising from any transfer or novation of the Charter to the Security Agent or any Substitute Owner or from the entry into a new agreement by the Charterer with a Replacement Owner. The Security Agent acknowledges that delivery by the Guarantor of a notice in writing to the Charterer stating that the Guarantor has no claim, and has no intention of making such a claim, against the Vessel and/or the Charterer which may arise from such transfer or novation or from the entry into a new agreement shall be a condition precedent to the effectiveness of any transfer, novation or new agreement.

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1.10 Delivery of Notices. The Charterer shall use its reasonable commercial efforts to deliver to the Security Agent and its designees, concurrently with the delivery thereof to the Guarantor, a copy of any notice of suspension or termination given by the Charterer to the Guarantor under the Charter.

1.11 Delivery of Financial Statements. On or prior to the date hereof, the Charterer has delivered to the Security Agent a copy of its annual audited financial statement (“Financial Statement”) for its most recent fiscal year. Within one hundred and eighty (180) days after the close of each of its fiscal years, the Charterer shall upon request deliver to the Security Agent its annual audited financial statements, prepared in accordance with International Accounting Standards (“IAS”).

1.12 Waiver of Immunity. To the extent that the Charterer may now or hereafter have or acquire any immunity (including sovereign immunity) from the jurisdiction of any court or from any legal process with respect to itself or its property, the Charterer hereby waives such immunity with respect to all of its obligations under this Consent and the Charter.

1.13 Registration of Interest. To the extent permitted by applicable law and by the Registrar of Ships for vessels registered on the Commonwealth of The Bahamas Ship Register, the terms of the undertaking contained in Article 1.1 above, shall be included in the Mortgage and shall form part of the terms and conditions of the Mortgage. Upon registration of the Mortgage, the Security Agent agrees to request that the Registrar of Ships for vessels registered on the Commonwealth of The Bahamas Ship Register make a note of such undertaking in the Vessel’s register.

ARTICLE 2. – PAYMENTS UNDER THE CHARTER

The Charterer shall pay all amounts payable by it to the Guarantor under the Charter in the manner required by the Charter directly into the account specified on Exhibit A hereto, or to such other person or account as shall be specified from time to time by the Security Agent to the Charterer in writing in accordance with Article 4.1. Should the Charterer receive a notice from the Security Agent asking the Charterer to make payments to an alternative account in accordance with this Article 2, the Guarantor shall pay to the Charterer any net increase in payment costs incurred by the Charterer as a result of making such payments into such alternative account.

ARTICLE 3. – REPRESENTATIONS AND WARRANTIES OF THE CHARTERER

The Charterer makes the following representations and warranties to the Security Agent as at the date hereof.

3.1 Organisation. The Charterer is duly organised and validly existing under the laws of the jurisdiction of its incorporation, and has all requisite corporate power and authority to execute and deliver this Consent, the Charter and the Novation Agreement and perform its obligations thereunder.

3.2 Authorisation; No Conflict. The Charterer has duly authorised, executed and delivered this Consent, the Charter and the Novation Agreement. Neither the execution and delivery of this Consent, the Charter and the Novation Agreement by the Charterer nor its consummation of the transactions contemplated thereby nor its compliance with the terms thereof does or will require any consent or approval not already obtained, or will conflict with the Charterer’s formation documents or any contract or agreement binding on it.

3.3 Legality, Validity and Enforceability. Each of this Consent, the Charter and the Novation Agreement is in full force and effect and is a legal, valid and binding obligation of the Charterer, enforceable against the Charterer in accordance with its terms. The Charter has not been amended, supplemented, suspended, novated, extended, restated or otherwise modified except in accordance with its terms.

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3.4 Governmental Consents. There are no governmental consents existing as of the date of this Consent that are required or will become required to be obtained by the Charterer in connection with the execution, delivery or performance of this Consent, the Charter and the Novation Agreement and the consummation of the transactions contemplated thereunder, other than those governmental consents which have been obtained or can be obtained without undue expense or delay.

3.5 Litigation. There are no pending or, to the Charterer’s knowledge, threatened actions, suits, proceedings or investigations of any kind (including arbitration proceedings) to which the Charterer is a party or is subject, or by which it or any of its properties are bound, that if adversely determined to or against the Charterer, could reasonably be expected to materially and adversely affect the ability of the Charterer to execute and deliver the Charter , the Novation Agreement and this Consent or to perform its obligations thereunder or hereunder.

ARTICLE 4. – MISCELLANEOUS

4.1 Notices. All notices or other communications required or permitted to be given hereunder shall be in writing and shall be considered as properly given (a) if delivered in person, (b) if sent by overnight delivery service or (c) if sent by prepaid telex, or by telecopy with correct answer back received. Notices shall be directed (i) if to the Charterer or the Guarantor, in accordance with the Charter and (ii) if to the Security Agent, to Attn: Jaffar Ali / Fathiyeh Ali Hassan / Chiranjib Parial, Qatar National Bank SAQ, Corporate & Syndication Loans, Retail & Corporate Operations, P.O. Box 1000, Doha, State of Qatar. Notice so given shall be effective upon receipt by the addressee. Any party hereto may change its address for notice hereunder to any other location by giving no less than twenty (20) days’ notice to the other parties in the manner set forth hereinabove.

4.2 Further Assurances. The Charterer shall fully cooperate with the Security Agent and perform all additional acts reasonably requested by the Security Agent to effect the purposes of this Consent.

4.3 Amendments. This Consent may not be amended, changed, waived, discharged, terminated or otherwise modified unless such amendment, change, waiver, discharge, termination or modification is in writing and signed by each of the parties hereto.

4.4 Entire Agreement. This Consent and any agreement, document or instrument attached hereto or referred to herein integrate all the terms and conditions mentioned herein or incidental hereto and supersede all oral negotiations and prior writings in respect to the subject matter hereof.

4.5 Governing Law. This Consent and any non-contractual obligations arising out of or in connection with it shall be governed by the laws of England.

4.6 Severability. In case any one or more of the provisions contained in this Consent should be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby, and the parties hereto shall enter into good faith negotiations to replace the invalid, illegal or unenforceable provision with a view to obtaining the same commercial effect as this Consent would have had if such provision had been legal, valid and enforceable.

4.7 Dispute Resolution. Any dispute arising under this Charter shall be decided by the High Court of Justice in London, England to whose jurisdiction the parties hereby agree. Notwithstanding, the foregoing, the parties may jointly agree in writing to have any dispute arising from this Consent referred to or determined by any arbitral tribunal appointed pursuant to [Article 41] of the Charter. It shall be a condition precedent to the right of any party to a stay of any legal proceedings in which maritime property has been or may be, arrested in connection with a dispute under this Consent, that that party furnishes to the other party security to which that other party would have been entitled in such legal proceedings in the absence of a stay.

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4.8 Service of Process. (i) The Charterer hereby appoints David Reynolds, Clyde and Co LLP, St Botolph Building, 138 Houndsditch, London, EC3A 7AR, United Kingdom as its agent for service of any proceedings under this Consent in the High Court of England and Wales; (ii) the Guarantor hereby appoints WFW Legal Services Limited, 15 Appold Street, London, EC2A 2HB as its agent for service of any proceedings under this Consent in the High Court of England and Wales; and (iii) the Security Agent hereby appoints Qatar National Bank London, 51 Grosvenor Street, London, W1K 3HH as its agent for service of any proceedings under this Consent in the High Court of England and Wales.

4.9 Successors and Assigns. The provisions of this Consent shall be binding upon and inure to the benefit of the parties hereto and their permitted successors and assigns.

4.10 Counterparts. This Consent may be executed in one or more duplicate counterparts and when signed by all of the parties listed below shall constitute a single binding agreement.

4.11 Termination. Each party’s obligations hereunder are absolute and unconditional, and no party shall have any right to terminate this Consent or to be released, relieved or discharged from any obligation or liability hereunder until the earlier of (i) the irrevocable payment in full of all sums owed by the Guarantor to the Finance Parties under the Finance Documents followed by the discharge of the Mortgage; and (ii) any permanent withdrawal of the Vessel from service under, or termination of, the Charter.

4.12 Confidentiality. The terms of this Consent and any and all data, reports, records and other information of any kind whatsoever disclosed to or acquired by the Security Agent or the Charterer in connection with this Consent whether conveyed orally, in writing or via electronic form, shall be kept in confidence and shall not be used by the Security Agent or the Charterer other than for the purposes of this Consent and the related financial agreements referred to herein. All data, reports, records and other information disclosed by Charterer to Security Agent in connection with or in accordance with this Consent that is marked confidential shall be kept in confidence and shall not be disclosed by Security Agent to any party (other than its officers and employees on a “need to know’ basis, the lenders listed in Schedule 7 (The Lenders, Notices, Commitments and Relevant Percentages) to the Facility Agreement and/or its legal advisors who are evaluating the financial condition of Charterer), except with the prior consent of Charterer. The foregoing restrictions on the disclosure of information under this Consent shall not apply to information that (a) is or becomes generally available to the public; or (b) is already known to the party receiving such information prior to the disclosure thereof under this Consent. In the event that the Security Agent or the Charterer is required to make disclosure of this Consent or the related financial agreements identified hereunder for purposes of complying with law or the rules of a rating agency, the Security Agent or the Charterer, as applicable, shall be entitled to make appropriate disclosure, but shall use all reasonable efforts to reach agreement on the terms of the disclosure concerned with the Security Agent or the Charterer, as applicable, in writing beforehand (which approval shall not be unreasonably withheld).

4.13 Contracts (Rights of Third Parties) Act 1999. A person who is not a party to this Consent may not enforce any of its terms under the Contract (Rights of Third Parties) Act 1999.

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IN WITNESS WHEREOF, the parties have caused this Consent to be duly executed and delivered by its officer thereunto duly authorised as of the date first above written.

RAS LAFFAN LIQUEFIED NATURAL GAS COMPANY LIMITED (II)

		By:
		Name:
		Title:
[                        ]	[ [ — ] Insert name of Guarantor ]
		By:
		Name:
		Title:
[                        ]	Qatar National Bank SAQ
		By:
		Name:
		Title:

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Exhibit A to

Consent and Agreement

Payment instructions

For Account

Account Name:	Nakilat Holdco L.L.C.
Bank:	Qatar National Bank SAQ
Swift:
IBAN:

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SCHEDULE 6

COMPLIANCE CERTIFICATES

Part 1 – Annual Compliance Certificate

To: Qatar National Bank SAQ (the Facility Agent)

Date:

Dear Sirs,                        

We refer to the Facility Agreement (the Agreement) dated [ — ] and made between, amongst others, Nakilat Holdco L.L.C. and the Facility Agent. This is a Compliance Certificate.

Terms defined in the Agreement shall bear the same meaning in this Compliance Certificate.

We confirm that:

(a) the Security Value is USD [ — ] being the aggregate of the market value of each Vessel (determined in accordance with the most recent Market Valuation Report for that Vessel supplied to the Facility Agent in accordance with Clause 16.5 (Annual Market Valuation Report) of the Agreement at that time); and accordingly is at least 110 per cent. of the aggregate of all Loans then outstanding and interest then due on such Loans calculated in accordance with Clause 9 (Costs of Utilisation), being USD [ — ]; and

(b) no Event of Default has occurred and is continuing.

Yours faithfully,

Signed for and on behalf of

NAKILAT HOLDCO L.L.C.

Director

Director

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Part 2 – Time Charter Party Agreement Termination Compliance Certificate

To: Qatar National Bank SAQ (the Facility Agent)

Date:

Dear Sirs,

We refer to the Facility Agreement (the Agreement) dated [ — ] and made between, amongst others, Nakilat Holdco L.L.C. and the Facility Agent. This is a Compliance Certificate.

Terms defined in the Agreement shall bear the same meaning in this Compliance Certificate.

We confirm that the Security Value is USD [ — ] being the aggregate of the market value of each Vessel (determined in accordance with the most recent Market Valuation Report for that Vessel supplied to the Facility Agent in accordance with Clause 16.5 (Annual Market Valuation Report) and Clause 17.16(f) (Financial Covenant) of the Agreement at that time); and accordingly is at least 110 per cent. of the aggregate of all Loans then outstanding and interest then due on such Loans calculated in accordance with Clause 9 (Costs of Utilisation), being USD [ — ].

Yours faithfully,

Signed for and on behalf of

NAKILAT HOLDCO L.L.C.

Director

Director

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SCHEDULE 7

THE LENDERS, NOTICES, COMMITMENTS AND RELEVANT PERCENTAGES

QATAR NATIONAL BANK SAQ

Contact details	Tranche 1 Commitment (USD)		Tranche 2 Commitment (USD)		Tranche 3 Commitment (USD)		Aggregate Commitment (USD)		Relevant Percentage (%)
Address: Qatar National Bank SAQ Corporate & Syndication Loans, Retail & Corporate Operations P O Box 1000, Doha, Qatar		150,000,000		151,000,000		149,000,000		450,000,000		100
Attention: Jaffar Ali / Fathiyeh Ali Hassan / Chiranjib Parial Fax: +974 4431 3069 Email: jaffar.ali@qnb.com.qa / fathiyeh.ali@qnb.com.qa / chiranjib.parial@qnb.com.qa / Agencyservices@qnb.com.qa

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SCHEDULE 8

FORM OF TRANSFER UNDERTAKING

To: Qatar National Bank SAQ (as Facility Agent)

To: Each Lender

Copy: The Borrower

From: [—] (the New Lender)

Dated: [—]

Facility Agreement dated      December 2014 (the Agreement)

This is an undertaking in accordance with clause 21 (Assignment and Transfer) of the Agreement.

Unless the context otherwise requires, terms defined in the Agreement have the same meaning when used herein.

In accordance with clause 21 (Assignment and Transfer) of the Agreement, the New Lender hereby notifies the Administrative Agents, the Lenders and the Borrower that it wishes to become a Lender under the terms of the Agreement and therefore hereby requests the Administrative Agents, the Lenders and the Borrower accept this undertaking as being delivered to it pursuant to and for the purposes of clause 21 (Assignment and Transfer) of the Agreement.

The New Lender hereby irrevocably and unconditionally confirms that it would like to participate in an aggregate amount of [—] Dollars (USD[—]) by way of assignment and transfer from [—] (the Existing Lender).

The New Lender shall accordingly become obliged to comply with all of the terms and conditions of the Agreement.

The New Lender hereby undertakes with each of the Administrative Agents, the Lenders and the Borrower to be bound by the terms and conditions of the Agreement and that it will perform its obligations which by the terms of the Agreement will be assumed by it upon this undertaking taking effect as it if were an original Lender in the Agreement.

The address for notices of the New Lender for the purposes of the Agreement is as follows:

Address: [—]

Attention: [—]

Telephone No: [—]

Facsimile No: [—]

E-mail: [—]

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Promptly upon this undertaking taking effect, the Facility Agent shall circulate to the Security Agent and each of the Lenders and the Borrower the amended details of the Lenders and their respective Relevant Percentages.

The New Lender agrees to do all further acts and provide all other assistance that may be requested by the Facility Agent in connection with this undertaking.

This undertaking shall be effective on, and the New Lender shall be deemed to be a Lender as of, [—].

This undertaking and the rights and obligations of the parties hereunder and any non-contractual obligations connected therewith shall be governed by and construed in accordance with English law.

THE NEW LENDER

Signed: Date

THE FACILITY AGENT

We hereby agree on behalf of the Lenders and the Borrower to accept [—] as a New Lender.

Signed: Date

THE SECURITY AGENT

We hereby agree on behalf of the Lenders and the Borrower to accept [—] as a New Lender.

Signed: Date

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SCHEDULE 9

FORM OF TRANSFER CERTIFICATE

To: [AGENT] as Facility Agent

From: [EXISTING LENDER] (the Existing Lender) and [NEW LENDER] (the New Lender)

Date: [                    ]

Nakilat Holdco L.L.C. – USD 450,000,000 Facility Agreement dated [                    ] 2014 (the Agreement)

We refer to the Agreement. This is a Transfer Certificate. Terms defined in the Agreement have the same meaning in this Transfer Certificate unless given a different meaning in this Transfer Certificate.

1. The Existing Lender transfers by novation to the New Lender the Existing Lender’s rights and obligations referred to in the Schedule below in accordance with the terms of the Agreement.

2. The proposed Transfer Date is [                    ].

3. The administrative details of the New Lender for the purposes of the Agreement are set out in the Schedule.

4. The New Lender expressly acknowledges the limitations on the Existing Lender’s obligations in respect of this Transfer Certificate contained in the Agreement.

5. This Transfer Certificate may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Transfer Certificate.

6. This Transfer Certificate and any non-contractual obligations arising out of or in connection with it are governed by English law.

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THE SCHEDULE

Rights and obligations to be transferred by novation

[insert relevant details, including applicable Tranche Commitments (or part)]

Administrative details of the New Lender

[insert details of Facility Office, address for notices and payment details etc.]

[EXISTING LENDER]	[NEW LENDER]
By:	By:

The Transfer Date is confirmed by the Facility Agent as [                    ].

[AGENT]

as Facility Agent for and on behalf of

each of the parties to the Agreement

(other than the Existing Lender and

the New Lender)

By:

Note: The execution of this Transfer Certificate may not transfer a proportionate share of the Existing Lender’s interest in the security in all jurisdictions. It is the responsibility of the New Lender to ascertain whether any other documents or other formalities are required to perfect a transfer of such a share in the Existing Lender’s security in any jurisdiction and, if so, to arrange for execution of those documents and completion of those formalities.

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SCHEDULE 10

FORM OF ASSIGNMENT AGREEMENT

To: [AGENT] as Facility Agent and the Borrower

From: [EXISTING LENDER] (the Existing Lender) and [NEW LENDER] (the New Lender)

Date: [                    ]

Nakilat Holdco L.L.C. – USD 450,000,000 Facility Agreement dated [                    ] 2014 (the Agreement)

We refer to the Agreement. This is an Assignment Agreement. Terms defined in the Agreement have the same meaning in this Assignment Agreement unless given a different meaning in this Assignment Agreement.

1. In accordance with the terms of the Agreement:

(a) the Existing Lender assigns absolutely to the New Lender all the rights of the Existing Lender specified in the Schedule;

(b) to the extent the obligations referred to in paragraph (c) below are effectively assumed by the New Lender, the Existing Lender is released from its obligations under the Agreement specified in the Schedule;

(c) the New Lender assumes obligations equivalent to those obligations of the Existing Lender under the Agreement specified in the Schedule; and

(d) the New Lender becomes a Lender under the Agreement and is bound by the terms of the Agreement as a Lender.

2. The proposed Transfer Date is [                    ].

3. The New Lender expressly acknowledges the limitations on the Existing Lender’s obligations in respect of this Assignment Agreement contained in the Agreement.

4. The administrative details of the New Lender for the purposes of the Agreement are set out in the Schedule.

5. This Assignment Agreement acts as notice to the Facility Agent (on behalf of each Finance Party) and, upon delivery in accordance with Clause 21.7 (Copy of Transfer Certificate or Assignment Agreement to Borrower), to the Borrower of the assignment referred to in this Assignment Agreement.

6. This Assignment Agreement may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of the Assignment Agreement.

7. This Assignment Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.

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THE SCHEDULE

Rights and obligations to be transferred by assignment, assumption and release

[insert relevant details, including applicable Tranche Commitments (or part)]

Administrative details of the New Lender

[insert details of Facility Office, address for notices and payment details etc.]

[EXISTING LENDER]	[NEW LENDER]
By:	By:

The Transfer Date is confirmed by the Facility Agent as [                    ].

[AGENT]

as Facility Agent, for and on behalf of

each of the parties to the Agreement

(other than the Existing Lender and

the New Lender)

By:

Note: The execution of this Assignment Agreement may not transfer a proportionate share of the Existing Lender’s interest in the security in all jurisdictions. It is the responsibility of the New Lender to ascertain whether any other documents or other formalities are required to perfect a transfer of such a share in the Existing Lender’s security in any and, if so, to arrange for execution of those documents and completion of those formalities.

An assignment may give rise to stamp duty or transfer tax issues.

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WITNESS WHEREOF the parties hereto have caused this Deed of Assignment to be duly executed as a deed the day and year first above written as follows:

THE ASSIGNOR

SIGNED and DELIVERED as a Deed by

By

its duly appointed Attorney

THE ASSIGNEE

SIGNED and DELIVERED as a Deed by

By

its duly appointed Attorney

All before me:

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Schedule 11

FORM OF PAYMENT UNDERTAKING

SeaSpirit Leasing Limited

33 Old Broad Street

London

EC2N 1HZ

[—] 2014

Dear Sirs

[“AL MARROUNA”] [“AL AREESH”] [“AL DAAYEN”] - Lease Termination

We hereby irrevocably and unconditionally undertake to remit the sum of:

1. [—] US Dollars (US$ [—]) for value today to account number 12270390, account name SEASPIRIT LEASING LIMITED, IBAN number GB84BOFS80463512270390, SWIFT Code BOFSGBS1095; and

2. [—] US Dollars (US$ [—]) for value today to account number 12270412, sort code 80-46-35, SWIFT BIC: BOFSGBS1095 with Bank of Scotland plc acting thought its US Correspondent: Bank of New York, SWIFT BIC IRVTUS3N

This letter and any non-contractual obligations arising out of or in connection with it shall be governed in accordance with English law.

Yours faithfully

QATAR NATIONAL BANK SAQ

By:

Title: Attorney-in-Fact

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SCHEDULE 12

VESSEL DELIVERABLES

1. VESSEL MORTGAGE

By no later than the date on which the relevant Tranche first is drawn in respect of a Vessel, an original Vessel Mortgage and Deed of Covenant and a copy of the Quiet Enjoyment Agreement in respect of that Vessel, duly executed by the parties to it and evidence that the Vessel Mortgage has been duly perfected.

2. LEGAL OPINIONS

(a) Within two (2) Business Days from the date of a Vessel Mortgage, a legal opinion in respect of the enforceability of that Vessel Mortgage from the Lender’s Bahamian counsel addressed to the Finance Parties in form and substance satisfactory to the Facility Agent.

(b) Within thirty (30) days from date of a Vessel Mortgage, a legal opinion in respect of the capacity of the Guarantor to enter into that Vessel Mortgage from the Lender’s Marshall Islands counsel addressed to the Finance Parties in form and substance satisfactory to the Facility Agent.

3. OTHER DOCUMENTS AND EVIDENCE

Promptly, and by no later than 5 days following the date on which any Guarantor acquires a Vessel, copies of the following documents in respect of such Guarantor and such Vessel (as relevant):

(a) documentary evidence that the Vessel maintains her classification free of all overdue recommendations and conditions with the applicable Classification Society;

(b) a copy of each Time Charter Party Agreement, any sub-charter and each management agreement relating to the Vessel; and

(c) a copy of the safety management certificate and international ship security certificate for the Vessel.

98

SIGNATORIES

This Agreement has been entered into on the date stated at the beginning of this Agreement and executed as a deed and is intended to be delivered as a deed on the date specified above.

THE FACILITY AGENT

Executed and delivered as a DEED by

QATAR NATIONAL BANK SAQ

Signature:

Name:

Title:

Signature:

Name:

Title:

THE SECURITY AGENT

Executed and delivered as a DEED by

QATAR NATIONAL BANK SAQ

Signature:

Name:

Title:

Signature:

Name:

Title:

99

LENDER

Executed and delivered as a DEED by

QATAR NATIONAL BANK SAQ

Signature:

Name:

Title:

Signature:

Name:

Title:

THE BORROWER

Executed and delivered as a DEED by NAKILAT HOLDCO L.L.C. acting by:
Name:
Title:	Signatory
In the presence of:
Name:
Title:
Address:
	Witness

100

EX-4.24

Exhibit 4.24

EXECUTION VERSION

AMENDMENT NO. 2 TO MARGIN LOAN AGREEMENT

This AMENDMENT NO. 2 TO MARGIN LOAN AGREEMENT (this “Amendment”) is made as of December 19, 2014 by and among the parties to the Margin Loan Agreement dated as of December 21, 2012 (as heretofore amended or modified, the “Margin Loan Agreement”) among Teekay Finance Limited, a Bermuda exempted company (“Borrower”), the lenders party thereto, and Citibank, N.A., as administrative agent (in such capacity, “Administrative Agent”), and Teekay Corporation, a corporation organized under the laws of the Republic of the Marshall Islands, as guarantor under the related guarantee agreement (“Guarantor”).

RECITALS:

WHEREAS, Borrower wishes that the Commitments of the Lenders under the Margin Loan Agreement increase by an aggregate amount of $200,000,000.

WHEREAS, each financial institution identified on the signature pages hereto as a “Lender” has agreed severally, on the terms and conditions set forth herein and in the Margin Loan Agreement, to provide such incremental Commitments.

The parties hereto therefore agree as follows:

SECTION 1. Defined Terms; References. Unless otherwise specifically defined herein, each term used herein that is defined in the Margin Loan Agreement has the meaning assigned to such term in the Margin Loan Agreement. Each reference to “hereof”, “hereunder”, “herein” and “hereby” and each other similar reference and each reference to “this Agreement” and each other similar reference contained in the Margin Loan Agreement shall, after this Amendment becomes effective, refer to the Margin Loan Agreement as amended hereby. For the avoidance of doubt, after the Amendment No. 2 Effective Date (as defined below), any references to “date hereof,” or “date of this Agreement,” in the Margin Loan Agreement, shall continue to refer to December 21, 2012.

SECTION 2. Amendments to Margin Loan Agreement. Effective on and as of the Amendment No. 2 Effective Date:

(a) Section 1.01 of the Margin Loan Agreement is hereby amended by

(i) amending and restating the definitions of the following terms to read as follows:

“Adjusted Initial Basket” means, as of the Amendment No. 2 Effective Date, a number of TGP Shares and TOO Shares equal to the Initial Basket (after giving effect to Amendment No. 2), 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 (after giving effect to Amendment No. 2).

“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 such Lender’s Aggregate Commitment, or is the amount set forth opposite such Lender’s name on the signature page in the Assignment and Assumption pursuant to which such Lender shall have assumed its Commitment, as applicable.

“Initial Basket” means (a) as of any date prior to the Amendment No. 1 Effective Date, the number of TGP Shares and the number of TOO Shares constituting Eligible Collateral immediately prior to the first Borrowing hereunder, (b) as of any date from and after the Amendment No. 1 Effective Date but prior to the Amendment No. 2 Effective Date, the number of TGP Shares and the number of TOO Shares constituting Eligible Collateral on the Amendment No. 1 Effective Date after giving effect to the additional pledge referred to in Section 4(b) of Amendment No. 1 and (c) as of any date from and after the Amendment No. 2 Effective Date, the number of TGP Shares and the number of TOO Shares constituting Eligible Collateral on the Amendment No. 2 Effective Date after giving effect to the additional pledge referred to in Section 4(b) of Amendment No. 2.

“Initial Share Collateral Value” means (a) as of any date prior to the Amendment No. 1 Effective Date, the Share Collateral Value as of December 21, 2012, (b) as of any date from and after the Amendment No. 1 Effective Date but prior to the Amendment No. 2 Effective Date, the Share Collateral Value as of the Amendment No. 1 Effective Date after giving effect to the additional pledge referred to in Section 4(b) of Amendment No. 1 and (c) as of any date from and after the Amendment No. 2 Effective Date, the Share Collateral Value as of the Amendment No. 2 Effective Date after giving effect to the additional pledge referred to in Section 4(b) of Amendment No. 2.

“Preliminary Share Collateral Trigger Event” means that, at any time, the aggregate Collateral Value of the Adjusted Initial Basket is less than 60% of the Initial Share Collateral Value.

“Scheduled Maturity Date” means January 2, 2018.

and

(ii) inserting the following terms in the appropriate alphabetical order:

“2014 Incremental Commitment” means, with respect to any Lender, the amount set forth opposite such Lender’s name on its signature page to Amendment No. 2.

“Aggregate Commitment” means, with respect to any Lender, the sum of (a) such Lender’s Original Commitment, (b) such Lender’s Incremental Commitment and (c) such Lender’s 2014 Incremental Commitment.

“Amendment No. 2” means Amendment No. 2 to this Agreement dated as of December 19, 2014 among Borrower, the Lenders party thereto, Administrative Agent and Guarantor.

“Amendment No. 2 Effective Date” has the meaning specified in Amendment No. 2.

“Amendment No. 2 Structuring Fee” has the meaning specified in Schedule 1.01(b).

“Commitment Fee Calculation Date” means each March 19, June 19, September 19 and December 19 of each year, commencing on March 19, 2015; provided that if any Commitment Fee Calculation Date is not a Business Day, then such Commitment Fee Calculation Date shall be postponed to the next succeeding Business Day.

“Commitment Fee Calculation Period” means each period from the calendar day immediately following a Commitment Fee Calculation Date to the next succeeding Commitment Fee Calculation Date; provided that (i) the first Commitment Fee Calculation Period shall commence on the Amendment No. 2 Effective Date and (ii) the final Commitment Fee Calculation Period shall end on the Business Day immediately preceding the Final Maturity Date.

2

“Commitment Fee Rate” has the meaning specified in Schedule 1.01(b).

“Utilization” means, with respect to any Lender for any calendar day, (i) the total outstanding principal amount of Advances made by such Lender as of such calendar day divided by (ii) the Aggregate Commitment for such Lender, expressed as a percentage.

and

(iii) deleting the definitions of “Incremental Commitment Fee Rate” and “Original Commitment Fee Rate” in their entirety.

(b) Section 2.08(a) is hereby amended by (i) replacing the word “and” before “(iii)” in the first sentence thereof with a comma and (ii) inserting the following after the word “invoiced” and before the period in the first sentence thereof:

, (iv) on January 7, 2015, Borrower shall pay to Administrative Agent for the account of each Lender the Amendment No. 2 Structuring Fee and (v) on the Amendment No. 2 Effective Date, shall pay the Lender Expenses as directed by Administrative Agent; provided that any Lender Expenses not invoiced prior to the Amendment No. 2 Effective Date shall be due and payable three Business Days following the date they are invoiced

(c) Section 2.08(b) is hereby amended and restated in its entirety to read as follows:

(b) Borrower shall pay to Administrative Agent for the account of each Lender a commitment fee (the “Commitment Fee”) on the first Business Day following the end of each Commitment Fee Calculation Period in an amount equal to the sum, for each calendar day that falls in both (x) such Commitment Fee Calculation Period and (y) the Commitment Fee Period, of the product of (i) the undrawn portion of the Aggregate Commitment for such Lender on such day, (ii) the Commitment Fee Rate with respect to such Lender for such day and (iii) 1/360. 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 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 Business Day following the date Administrative Agent delivers such notice.

(d) Schedule 1.01(b) to the Margin Loan Agreement is hereby amended by

(i) inserting the following terms in the appropriate alphabetical order:

“Amendment No. 2 Structuring Fee” means a fee payable on January 7, 2015 by Borrower to Administrative Agent for the account of each Lender, as consideration for the agreements of the Lenders under Amendment No. 2, equal to 0.90% of the Aggregate Commitment of such Lender.

3

“Commitment Fee Rate” means, with respect to any Lender for any calendar day, the rate per annum determined by reference to the table below, based on the Utilization with respect to such Lender for such calendar day.

Utilization	Commitment Fee Rate
Less than 15%	1.50% per annum
15% or greater, but less than 30%	1.25% per annum
30% or greater, but less than 45%	1.00% per annum
45% or greater, but less than 60%	0.75% per annum
60% or greater, but less than 75%	0.50% per annum
75% or greater	0.25% per annum

and

(ii) amending and restating the definitions of the following terms to read as follows:

“Initial LTV Ratio” means twenty-seven and one-half percent (27.5%).

“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 Amendment No. 2 Effective Date, 2.25% of the total Commitments, (ii) after the date that is 12 calendar months following the Amendment No. 2 Effective Date but on or prior to the date that is 24 calendar months following the Amendment No. 2 Effective Date, 1.50% of the sum of the total Original Commitments and the total Incremental Commitments (for the avoidance of doubt, not including the 2014 Incremental Commitments), (iii) after the date that is 24 calendar months following the Amendment No. 2 Effective Date but on or prior to the date that is 36 calendar months following the Amendment No. 2 Effective Date, 0.75% of the sum of the total Original Commitments and the total Incremental Commitments (for the avoidance of doubt, not including the 2014 Incremental Commitments).

“Spread” means 3.95% per annum.

and

(iii) deleting the definitions of “Incremental Commitment Fee Rate” and “Original Commitment Fee Rate” in their entirety.

SECTION 3. Representations of Borrower and Guarantor.

(a) Borrower represents and warrants that:

(i) each of the representations and warranties made by Borrower in or pursuant to the Margin Loan Documents is true and correct in all material respects on and as of the Amendment No. 2 Effective Date after giving effect hereto as if made on and as of such date (except to the extent such representations and warranties are specifically made as of an earlier date, in which case such representations and warranties were true and correct in all material respects as of such date);

4

(ii) no Default or Event of Default has occurred and is continuing on and as of the Amendment No. 2 Effective Date after giving effect hereto;

(iii) the execution, delivery and performance of this Amendment are within Borrower’s corporate powers, have been duly authorized by all necessary corporate and, if required, shareholder action. This Amendment has been duly executed and delivered by Borrower and constitutes a legal, valid and binding obligation of Borrower, enforceable in accordance with its 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; and

(iv) the execution, delivery and performance of this Amendment (1) 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, (2) will not violate any Law applicable to Borrower, (3) 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 (4) 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.

(b) Guarantor represents and warrants that:

(i) each of the representations and warranties made by Guarantor in or pursuant to the Margin Loan Documents is true and correct in all material respects on and as of the Amendment No. 2 Effective Date after giving effect hereto as if made on and as of such date (except to the extent such representations and warranties are specifically made as of an earlier date, in which case such representations and warranties were true and correct in all material respects as of such date);

(ii) Guarantor has the capacity and has taken all action, and no consent of any Person is required, for it to execute and comply with its obligations under this Amendment;

(iii) this Amendment constitutes Guarantor’s legal, valid and binding obligations enforceable against Guarantor in accordance with its terms subject to any relevant insolvency laws affecting creditors’ rights generally; and

(iv) the execution by Guarantor of this Amendment and its compliance with this Amendment will not involve or lead to a contravention of:

(A) any law or regulation;

(B) the constitutional documents of Guarantor; or

(C) any contractual or other obligation or restriction which is binding on Guarantor or any of its assets.

5

SECTION 4. Conditions to the Amendment No. 2 Effective Date. This Amendment shall become effective as of December 19, 2014 (the “Amendment No. 2 Effective Date”) so long as each of the following conditions shall have been satisfied on or prior to such date:

(a) Administrative Agent shall have received each of the following documents, duly executed, each dated on or prior to the Amendment No. 2 Effective Date, in each case, in form and substance reasonably satisfactory to Administrative Agent and each of the Lenders:

(i) duly executed counterparts of this Amendment;

(ii) (x) certificate of Borrower, dated on or prior to the Amendment No. 2 Effective 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 this Amendment and (B) contain appropriate attachments, including the Organization Documents of Borrower (which shall be substantially in the form of Exhibit K to the Margin Loan Agreement), 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 this Amendment;

(iii) a solvency certificate from a Responsible Officer for Borrower in form and substance substantially similar to the solvency certificate delivered in connection with the Closing Date;

(iv) legal opinion of Latham & Watkins LLP, special New York counsel to Borrower; and legal opinion of Alexanders, Bermuda counsel to Borrower; each in form and substance substantially similar to those delivered in connection with the Closing Date (but with respect to this Amendment);

(v) for Borrower, the results of a recent lien search in Borrower’s jurisdiction of organization and, if different, Borrower’s “location” (determined as provided in UCC Section 9-307) and each of the jurisdictions where assets of Borrower are located, and such search shall reveal no liens on any of the assets of Borrower except for liens permitted by Section 6.02 of the Margin Loan Agreement;

(vi) 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 Amendment No. 2 Effective Date, (1) certifying that the aforementioned account statements, if any, are true, correct and complete and (2) 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 (which shall be considered “Borrower Financial Statements” for purposes of the Margin Loan Agreement); and

(b) on or prior to the Amendment No. 2 Effective Date, Borrower shall have pledged an additional 11,708,274 TGP Shares and an additional 11,809,468 TOO Shares by depositing such additional Shares into the Collateral Account pursuant to Section 2.10(c) of the Margin Loan Agreement, for a total of 25,208,274 TGP Shares and a total of 23,809,468 TOO Shares in the Collateral Account as of the Amendment No. 2 Effective Date;

6

(c) the representations and warranties set forth in Section 3 above shall be true and correct on and as of the Amendment No. 2 Effective Date after giving effect hereto;

(d) no Default or Event of Default shall have occurred and be continuing on the Amendment No. 2 Effective Date; and

(e) all documented fees required to be paid under the Margin Loan Documents on or before the Amendment No. 2 Effective Date, including the Lender Expenses invoiced prior to the Amendment No. 2 Effective Date, shall have been paid.

SECTION 5. Governing Law. This Amendment shall be governed by and construed and interpreted in accordance with the 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.

SECTION 6. Confirmation of Guarantees and Security Interests. By signing this Amendment each of Borrower and Guarantor hereby confirms that the obligations of Borrower and Guarantor under the Margin Loan Agreement as modified or supplemented hereby and the other Margin Loan Documents (i) are entitled to the benefits of the guarantees and the security interests set forth or created in the Guarantee Agreement, the Security Agreement and the other Margin Loan Documents, (ii) constitute “Obligations”, “Secured Obligations” and “Guaranteed Obligations” or other similar term for purposes of the Margin Loan Agreement, the Security Agreement and all other Margin Loan Documents, (iii) notwithstanding the effectiveness of the terms hereof, the Guarantee Agreement, the Security Agreement and the other Margin Loan Documents are, and shall continue to be, in full force and effect and are hereby ratified and confirmed in all respects (giving effect to the amendments set forth herein). Each Obligor ratifies and confirms that all Liens granted, conveyed, or assigned to Collateral Agent by such Person pursuant to any Margin Loan Document to which it is a party remain in full force and effect, are not released or reduced, and continue to secure full payment and performance of the Obligations as modified hereby.

SECTION 7. Margin Loan Agreement Governs. Except as expressly set forth herein, this Amendment shall not by implication or otherwise limit, impair, constitute a waiver of or otherwise affect the rights and remedies of any Lender or Administrative Agent under the Margin Loan Agreement or any other Margin Loan Document, and shall not alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Margin Loan Agreement or any other Margin Loan Document, all of which are ratified and affirmed in all respects and shall continue in full force and effect. Nothing herein shall be deemed to entitle Borrower to a consent to, or a waiver, amendment, modification or other change of, any of the terms, conditions, obligations, covenants or agreements contained in the Margin Loan Agreement or any other Margin Loan Document in similar or different circumstances. For the avoidance of doubt, this Amendment shall not affect amounts (including without limitation Commitment Fees or Spread) accrued, due or payable prior to the Amendment No. 2 Effective Date.

SECTION 8. Miscellaneous. This Amendment shall constitute a Margin Loan Document for all purposes of the Margin Loan Agreement and the other Margin Loan Documents. The provisions of this Amendment are deemed incorporated into the Margin Loan Agreement as if fully set forth therein. This Amendment 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.

7

IN WITNESS WHEREOF, the parties hereto have caused this Amendment 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:	/s/ Edith Robinson
	Name: Edith Robinson
	Title: President

Guarantor:
TEEKAY CORPORATION, as Guarantor
By:	/s/ Vincent Lok
	Name: Vincent Lok
	Title: Chief Financial Officer

[Signature Page to Amendment No.2]

CITIBANK, N.A., as Administrative Agent
By:	/s/ James Heathcote
	Name: James Heathcote
	Title: Authorized Signatory

[Signature Page to Amendment No.2]

2014 Incremental Commitment: $100,000,000	CITIBANK, N.A., as a Lender
	By:	/s/ James Heathcote
		Name: James Heathcote
		Title: Authorized Signatory

[Signature Page to Amendment No.2]

2014 Incremental Commitment: $100,000,000	J.P. MORGAN SECURITIES LLC, as agent for JPMORGAN CHASE BANK, N.A., LONDON BRANCH, as a Lender
	By:	/s/ Jason Shrednick
		Name: Jason Shrednick
		Title: Authorized Signatory

[Signature Page to Amendment No.2]

EX-8.1

EXHIBIT 8.1

LISTING OF SUBSIDIARIES

The following is a list of the Company’s significant subsidiaries as at March 1, 2015.

Name of Subsidiary	State or Jurisdiction of Incorporation	Proportion of Ownership Interest
Teekay Holdings Limited	Bermuda		100	%
Teekay Acquisition Holdings L.L.C.	United Kingdom		100	%
VLCC C Investment LLC	Marshall Islands		100	%
Teekay Finance Limited	Bermuda		100	%
Teekay Shipping Limited	Bermuda		100	%
Ugland Stena Storage AS	Norway		100	%
Polarc L.L.C.	Marshall Islands		100	%
TPO Investments Inc.	Marshall Islands		100	%
TPO Investments AS	Norway		100	%
Teekay Petrojarl AS	Norway		100	%
Teekay Petrojarl Production AS	Norway		100	%
Teekay Petrojarl Floating Production UK Ltd.	United Kingdom		100	%
Petrojarl 4 DA	Norway		100	%
Knarr L.L.C.	Marshall Islands		100	%
Banff L.L.C.	Marshall Islands		100	%
Teekay Hummingbird Production Limited	United Kingdom		100	%
Hummingbird Spirit L.L.C.	Marshall Islands		100	%
Teekay LNG Partners L.P.	Marshall Islands		33.46	%(1)
Single Asset Limited Liability Companies	Marshall Islands		33.46	%
Teekay LNG Operating L.L.C.	Luxembourg		33.46	%
Teekay Luxembourg S.A.R.L.	Luxembourg		33.46	%
Naviera Teekay Gas III, S.L.	Spain		33.46	%
Teekay Shipping Spain, S.L.	Spain		33.46	%
Teekay Spain, S.L.	Spain		33.46	%
Teekay LNG Holdings L.P.	United States		34.13	%
Teekay LNG Holdco L.L.C.	Marshall Islands		34.13	%
Teekay Nakilat Corporation	Marshall Islands		23.42	%
Teekay Nakilat (II) Limited	United Kingdom		23.42	%
Teekay Nakilat Holdings Corporation	Marshall Islands		33.46	%
Teekay Offshore Partners L.P.	Marshall Islands		27.26	%(1)
Single Asset Limited Liability Companies	Marshall Islands		27.26	%
Navion Offshore Loading AS	Norway		27.26	%
Norsk Teekay AS	Norway		27.26	%
Norsk Teekay Holdings Ltd.	Marshall Islands		27.26	%
Partrederiet Teekay Shipping Partners DA	Norway		18.17	%
Teekay European Holdings, S.A.R.L.	Luxembourg		27.26	%
Teekay Navion Offshore Loading Pte. Ltd.	Singapore		27.26	%
Teekay Netherlands European Holdings B.V.	Netherlands		27.26	%
Teekay Nordic Holdings Inc.	Marshall Islands		27.26	%
Teekay Norway AS	Norway		27.26	%
Teekay Offshore Operating L.P.	Marshall Islands		27.26	%
Teekay Offshore Operating Pte. Ltd.	Marshall Islands		27.26	%
Teekay Offshore Finance Corp.	Marshall Islands		27.26	%
Teekay Offshore Holdings L.L.C.	Marshall Islands		27.26	%
Teekay Offshore Shuttle Tanker Finance L.L.C.	Marshall Islands		27.26	%
Teekay Petrojarl Offshore Siri AS	Norway		27.26	%
Teekay Shipping Partners Holdings AS	Norway		27.26	%
Teekay Voyageur Production Ltd	United Kingdom		27.26	%
Tiro Sidon Holdings L.L.C.	Marshall Islands		27.26	%
Tiro Sidon L.L.C.	Marshall Islands		27.26	%
Tiro Sidon UK L.L.P.	United Kingdom		27.26	%
Ugland Nordic Shipping AS	Norway		27.26	%
Varg Production AS	Norway		27.26	%
Teekay Tankers Ltd.	Marshall Islands		25.52	%(2)
Single Asset Limited Liability Companies	Marshall Islands		25.52	%
Teekay Tankers Holdings Ltd.	Marshall Islands		25.52	%

(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 52.9%.

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, 2015	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, 2015	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, 2014, 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, 2015

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, 2014, 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, 2015

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,

(6) No. 333-187142 on Form S-8 pertaining to the 2013 Equity Incentive Plan of Teekay, and

(7) No. 333-192753 on Form F-3ASR and related Prospectus for the registration of 5,700,000 shares of common stock.

of our reports dated April 29, 2015, with respect to the consolidated financial statements as at December 31, 2014 and 2013 and for each of the years in the three-year period ended December 31, 2014 and the effectiveness of internal control over financial reporting as of December 31, 2014, which reports appear in the December 31, 2014 Annual Report on Form 20-F of Teekay Corporation.

/s/ KPMG LLP

Chartered Accountants

Vancouver, Canada

April 29, 2015

EX-23.2

Exhibit 23.2

Consolidated Financial Statements

Malt LNG Netherlands Holdings B.V.

December 31, 2014

Independent Auditors’ Report

The Board of Directors of

Malt LNG Netherlands Holdings B.V.:

We have audited the accompanying consolidated financial statements of Malt LNG Netherlands Holdings B.V. (and its subsidiaries), which comprise the consolidated balance sheets as of December 31, 2014 and 2013, and the related consolidated statements of income and comprehensive income, changes in total equity (deficiency), and cash flows for each of the years in the three-year period ended December 31, 2014, and the related notes to the consolidated financial statements.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with U.S. generally accepted accounting principles; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Malt LNG Netherlands Holdings B.V. (and its subsidiaries) as of December 31, 2014 and 2013, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2014 in accordance with U.S. generally accepted accounting principles.

Emphasis of Matter

As discussed in Note 1 to the consolidated financial statements, during 2013, the assets and liabilities of the consolidated group was sold from MALT LNG Holdings ApS to a new inactive entity, Malt LNG Netherlands Holdings B.V. These consolidated financial statements reflect the results of the consolidated group on a continuity of interest basis. Our opinion is not modified with respect to this.

/s/ KPMG

Chartered Accountants

March 16, 2015

Vancouver, Canada

2

MALT LNG NETHERLANDS HOLDINGS B.V. (Note 1)

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(in U.S. Dollars)

	Year Ended December 31, 2014			Year Ended December 31, 2013			Year Ended December 31, 2012
	$			$			$
Voyage revenues (note 9)		197,968,585			205,569,443			169,637,168
Voyage expenses		(867,458	)		(1,994,960	)		(1,101,056	)
Vessel operating expenses (note 11b)		(34,480,640	)		(34,025,463	)		(26,138,918	)
Depreciation and amortization (notes 5 and 6)		(48,433,923	)		(46,163,979	)		(38,242,059	)
Ship management fees (note 11b)		(3,483,391	)		(3,386,416	)		(1,661,202	)
General and administrative (note 11b)		(2,772,605	)		(4,122,822	)		(8,335,175	)
Income from vessel operations		107,930,568			115,875,803			94,158,758
Interest income		268,370			211,472			137,678
Interest expense (notes 11e and 12)		(38,071,358	)		(32,036,616	)		(19,008,892	)
Foreign exchange gain (loss)		249,138			(161,133	)		(21,478	)
Other (loss) income		(24,611	)		(17,144	)		554,086
Net income before income tax recovery (expense)		70,352,107			83,872,382			75,820,152
Income tax recovery (expense)		130,580			(200,000	)		(149,158	)
Net income		70,482,687			83,672,382			75,670,994
Other comprehensive (loss) income:
Unrealized net (loss) gain on qualifying cash flow hedging instruments before reclassifications, net of tax (note 12)		(5,932,116	)		251,576			—
Realized loss on qualifying cash flow hedging instruments reclassified from accumulated other comprehensive (loss) income to interest expense (note 12)		2,982,986			—			—
Other comprehensive (loss) income		(2,949,130	)		251,576			—
Comprehensive income		67,533,557			83,923,958			75,670,994

See accompanying notes to the consolidated financial statements.

Refer to note 11 for related party transactions.

3

MALT LNG NETHERLANDS HOLDINGS B.V. (Note 1)

CONSOLIDATED BALANCE SHEETS

(in U.S. Dollars)

	As at December 31, 2014			As at December 31, 2013
	$			$
ASSETS
Current assets
Cash		72,141,957			51,615,032
Accounts receivable and accrued revenue		325,018			9,161,575
Restricted cash (note 4)		4,153,257			6,307,240
Prepaid expenses and deferred debt issuance costs		4,342,127			4,797,110
Total current assets		80,962,359			71,880,957
Long-term assets
Vessels and equipment (note 5)		1,357,803,514			1,389,398,090
Restricted cash (note 4)		11,876,673			4,701,090
Derivative asset (note 12)		—			1,618,305
Deferred debt issuance costs		6,528,534			9,941,752
Other assets		5,210,305			—
Intangible assets (note 6)		841,200			4,257,080
Total assets		1,463,222,585			1,481,797,274
LIABILITIES AND EQUITY
Current liabilities
Accounts payable		215,376			819,183
Accrued liabilities (notes 7 and 12)		5,480,119			5,098,172
Due to related parties (note 11d)		10,979,825			10,396,363
Deferred revenues		4,049,075			2,672,851
Current portion of long-term debt (note 8)		79,446,595			82,090,117
Current portion of derivative liability (note 12)		2,148,377			2,355,243
Current portion of in-process revenue contracts (note 9)		6,668,323			6,668,528
Total current liabilities		108,987,690			110,100,457
Long-term liabilities
Long-term deferred revenues		2,863,310			3,294,254
Long-term debt (note 8)		763,319,270			842,765,865
Derivative liability (note 12)		1,551,680			—
In-process revenue contracts (note 9)		84,061,349			90,730,969
Total liabilities		960,783,299			1,046,891,545
Equity
Share capital (note 10)		121			121
Additional paid-in capital (note 10)		276,913,356			276,913,356
Retained earnings		228,223,363			157,740,676
Accumulated other comprehensive (loss) income (note 12)		(2,697,554	)		251,576
Total equity		502,439,286			434,905,729
Total liabilities and equity		1,463,222,585			1,481,797,274

See accompanying notes to the consolidated financial statements.

4

MALT LNG NETHERLANDS HOLDINGS B.V. (Note 1)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in U.S. Dollars)

	Year Ended December 31, 2014 $			Year Ended December 31, 2013 $			Year Ended December 31, 2012 $
Cash provided by (used for)
OPERATING ACTIVITIES
Net income		70,482,687			83,672,382			75,670,994
Non-cash items:
Depreciation and amortization		48,433,923			46,163,979			38,242,059
Amortization of in-process revenue contracts		(6,669,825	)		(17,964,926	)		(20,515,577	)
Amortization of deferred debt issuance costs included in interest expense		3,821,377			3,998,591			2,810,474
Ineffective portion of hedge accounted interest rate swap included in interest expense		13,989			988,514			—
Increase in restricted cash		(5,257,319	)		(6,307,240	)		—
Change in operating assets and liabilities (note 13)		4,979,958			(3,776,059	)		17,471,551
Expenditures for dry docking		(12,501,214	)		(9,545,138	)		—
Net operating cash flow		103,303,576			97,230,103			113,679,501
FINANCING ACTIVITIES
Decrease (increase) in restricted cash		235,719			(4,701,090	)		—
Proceeds from issuance of long-term debt		—			963,000,000			1,063,095,200
Scheduled repayments of long-term debt		(82,090,117	)		(1,036,239,218	)		(65,000,000	)
Equity contribution from shareholders (note 10)		—			121			276,905,751
Debt issuance costs		—			(15,471,695	)		(5,042,320	)
Net financing cash flow		(81,854,398	)		(93,411,882	)		1,269,958,631
INVESTING ACTIVITIES
Expenditures for vessels and equipment		(922,253	)		(90,580	)		—
Acquisition of MALT LNG Transport ApS, net of cash assumed of $10.8 million (note 2)		—			—			(1,335,750,741	)
Net investing cash flow		(922,253	)		(90,580	)		(1,335,750,741	)
Increase in cash		20,526,925			3,727,641			47,887,391
Cash, beginning of the year		51,615,032			47,887,391			—
Cash, end of the year		72,141,957			51,615,032			47,887,391

See accompanying notes to the consolidated financial statements.

Supplemental cash flow information (note 13).

5

MALT LNG NETHERLANDS HOLDINGS B.V. (Note 1)

CONSOLIDATED STATEMENTS OF EQUITY (DEFICIENCY)

(in U.S. Dollars except for number of shares)

				Shareholders’ Equity
	Acquired Predecessor Equity (Deficiency) $			Number of Common Shares		Common Shares $		Additional Paid-In Capital $		Retained Earnings $		Accumulated Other Comprehensive (Loss) Income $			Total Equity (Deficiency) $
Balance as at December 31, 2011 (unaudited)		(1,595,095	)		—		—		—		—		—			(1,595,095	)
Issuance of common shares		276,905,751			—		—		—		—		—			276,905,751
Net income		75,670,994			—		—		—		—		—			75,670,994
Balance as at December 31, 2012		350,981,650			—		—		—		—		—			350,981,650
Issuance of common shares (note 10)		—			100		121		—		—		—			121
Net income		50,425,486			—		—		—		33,246,896		—			83,672,382
Other comprehensive income		(1,384,969	)		—		—		—		—		1,636,545			251,576
Acquisition of MALT LNG Holdings ApS		(400,022,167	)		—		—		276,913,356		124,493,780		(1,384,969	)		—
Balance as at December 31, 2013		—			100		121		276,913,356		157,740,676		251,576			434,905,729
Net income		—			—		—		—		70,482,687		—			70,482,687
Other comprehensive loss		—			—		—		—		—		(2,949,130	)		(2,949,130	)
Balance as at December 31, 2014		—			100		121		276,913,356		228,223,363		(2,697,554	)		502,439,286

See accompanying notes to the consolidated financial statements.

6

MALT LNG NETHERLANDS HOLDINGS B.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in U.S. Dollars, unless indicated otherwise)

1. Basis of Presentation and Significant Accounting Policies

The consolidated financial statements have been prepared in conformity with United States generally accepted accounting principles (or US GAAP). These consolidated financial statements include the accounts of Malt LNG Netherlands Holdings B.V., which is incorporated under the laws of Netherlands, its wholly owned subsidiaries and the Acquired Predecessor, as described below (collectively, the Company). The following is a list of Malt LNG Netherlands Holdings B.V. subsidiaries:

Name of Significant Subsidiaries	Jurisdiction of Incorporation	Proportion of Ownership Interest
MALT LNG Holdings ApS	Denmark	100%
MALT LNG Transport ApS	Denmark	100%
Meridian Spirit ApS	Denmark	100%
Magellan Spirit ApS	Denmark	100%
Methane Spirit LLC	Republic of The Marshall Islands	100%
Membrane Shipping Ltd.	Republic of The Marshall Islands	100%
Malt Singapore Pte. Ltd.	Singapore	100%

Significant intercompany balances and transactions have been eliminated upon consolidation. The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Malt LNG Netherlands Holdings B.V. has accounted for the acquisition of its interest in MALT LNG Holdings ApS on August 6, 2013 from its shareholders Teekay Luxembourg S.a.r.l. and Scarlet LNG Transport Co., Ltd. (collectively the Joint Venture Partners) as a transfer of a business between entities under common control. The method of accounting for such transfers is similar to the pooling of interests method of accounting. Under this method, the carrying amount of net assets recognized in the balance sheets of each combining entity are carried forward to the balance sheet of the combined entity, and no other assets or liabilities are recognized as a result of the combination. As a result, the consolidated statements of income and comprehensive income, cash flows and changes in total equity for the years ended December 31, 2013 and 2012 reflect the results of operations of MALT LNG Holdings ApS, referred to herein as the Acquired Predecessor, as if Malt LNG Netherlands Holdings B.V. had acquired it when the Acquired Predecessor began operations under the ownership of the Joint Venture Partners. The consolidated statement of equity (deficiency) has been presented to reflect the capital structure of the new entity and retained earnings on a continuity of interest basis. Any difference between the face value of the shares and the value of the previous equity has been presented as additional paid in capital.

The Company evaluated events and transactions occurring after the balance sheet date and through the day the financial statements were available to be issued which was March 16, 2015.

Foreign currency

The consolidated financial statements are stated in U.S. Dollars and the functional currency of the Company is U.S. Dollars. 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 and losses are reflected separately in the consolidated statements of income and comprehensive income.

Operating revenues and expenses

The principal activity of Malt LNG Netherlands B.V. and its subsidiaries is the transportation of liquefied natural gas (or LNG) through the operation of the Company’s six LNG carriers.

The lease element of time-charters and bareboat charters accounted for as operating leases is recognized by the Company daily over the term of the charter as the applicable vessel operates under the charter. The Company recognizes revenues from the non-lease element of time-charter contracts daily as services are performed. The Company does not recognize revenues during days that the vessel is off-hire.

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.

7

MALT LNG NETHERLANDS HOLDINGS B.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in U.S. Dollars, unless indicated otherwise)

Business combinations

Except as described above in relation to the transfer of business between entities under common control, the Company uses the acquisition method of accounting for business combinations and recognizes asset acquired and liabilities assumed measured at their fair values on the date acquired. The fair values of the assets and liabilities acquired are determined based on the Company’s valuation. The valuation involves making significant estimates and assumptions which are based on detailed financial models including the projection of future cash flows, the weighted average cost of capital and any cost saving that are expected to be derived in the future.

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.

Vessels and equipment

The acquisition cost and all costs incurred to restore used vessels purchased by the Company to the standards 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 35 years for LNG carriers, from the date the vessel is delivered from the shipyard or a shorter period if regulations prevent the Company from operating the vessels for 35 years.

Vessel capital modifications include the addition of new equipment or can encompass various modifications to the vessel which 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.

Generally, the Company dry docks each of its vessels every five years. In addition, a shipping society classification intermediate survey is performed on the Company’s LNG carriers between the second and third year of the five-year dry-docking period. The Company capitalizes certain costs incurred during dry docking and for the survey and amortizes 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. The Company includes in capitalized dry docking those costs incurred as part of the dry docking to meet regulatory requirements, or expenditures that either add economic life to the vessel, increase the vessel’s earning capacity or improve the vessel’s operating efficiency. The Company expenses costs related to routine repairs and maintenance performed during dry docking that do not improve operating efficiency or extend the useful lives of the assets.

Vessels and equipment 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. Estimated fair value is determined based on discounted cash flows or appraised values.

Debt issuance costs

Debt issuance costs, including fees, commissions and legal expenses, relating to bank loan facilities are deferred and amortized using the effective interest rate method over the term of the relevant loan. Amortization of deferred debt issuance 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 also qualifies for hedge accounting. The Company applies hedge accounting to its derivative instrument (note 12).

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

8

MALT LNG NETHERLANDS HOLDINGS B.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in U.S. Dollars, unless indicated otherwise)

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, repaid or no longer possible of occurring.

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 income in equity. In the periods when the hedged items affect earnings, the associated fair value changes on the hedging derivatives are transferred from equity to the corresponding earnings line item in the consolidated statements of income and comprehensive income. The ineffective portion of the change in fair value of the derivative financial instruments is immediately recognized in the consolidated statement of income as interest expense. If a cash flow hedge is terminated and the originally hedged items is still considered possible of occurring, the gains and losses initially recognized in equity remain there until the hedged item impacts earnings, at which point they are transferred to the corresponding earnings line item in the consolidated statements of income and comprehensive income. If the hedged items are no longer possible of occurring, amounts recognized in equity are immediately transferred to the earnings line item in the consolidated statements of income and comprehensive income.

Intangible assets

The Company’s finite life intangible assets consist of acquired time-charter contracts and are amortized on a straight-line basis over the remaining term of the time-charters. Finite life intangible assets are assessed for impairment when events or circumstances indicate that the carrying value may not be recoverable.

Income taxes

The legal jurisdictions in which the Company’s Marshall Island and Singapore subsidiaries are incorporated do not impose income taxes upon shipping-related activities. The Company’s Danish subsidiaries are subject to the Danish Tonnage Tax Regime. Under this regime, the applicable tax is based on the weight (measured as net tonnage) of the vessel and the number of days in the taxable period that the vessel is at the Company’s disposal, excluding time required for repairs.

The Company accounts for income taxes using the liability method which requires companies to determine 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 based on guidance in the interpretation. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. As of December 31, 2014 and December 31, 2013, the Company did not have any material accrued interest and penalties relating to income taxes.

Accumulated other comprehensive (loss) income

The following table contains the changes in the balances of each component of accumulated other comprehensive (loss) income for the periods presented:

	Qualifying Cash Flow Hedging Instruments
	$
Balance as at December 31, 2012		—
Other comprehensive income		251,576
Balance as at December 31, 2013		251,576
Other comprehensive loss		(2,949,130	)
Balance as at December 31, 2014		(2,697,554	)

2. Business Combination

On February 28, 2012, the Company acquired six LNG carriers through the purchase of all outstanding capital stock of MALT LNG Transport ApS (formerly Maersk LNG Transport A/S), from Denmark-based A.P. Moller-Maersk A/S (or Maersk), for approximately $1.3 billion. The acquisition was financed with $1.06 billion from secured loan facilities and $265.7 million from the issuance of common stock to its shareholders. Teekay Luxembourg S.a.r.l. and Scarlet LNG Transport Co., Ltd. are joint venture partners holding interest in the Company of 52% and 48%, respectively.

9

MALT LNG NETHERLANDS HOLDINGS B.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in U.S. Dollars, unless indicated otherwise)

The Company’s acquisition was accounted for using the purchase method of accounting, based upon estimates of fair value. The estimated fair values of certain assets and liabilities have been determined with the assistance of third-party valuation specialists and were finalized during 2012. The operating results of MALT LNG Transport ApS are reflected in the Company’s consolidated financial statements from February 28, 2012, the effective date of acquisition. During the year ended December 31, 2013 and 2012, the Company recognized $205.6 million and $169.6 million of revenue and $98.2 million and $83.9 million of net income, respectively, resulting from this acquisition. In addition, the Company incurred nil and $1.9 million of acquisition-related expenses for the year ended December 31, 2013 and 2012, respectively, which is reflected in general and administrative expenses.

3. Fair Value Measurements

The following methods and assumptions were used to estimate the fair value of each class of financial instrument:

Cash and restricted cash – The fair value of the Company’s cash and restricted cash approximates its carrying amounts reported in the consolidated balance sheets.

Derivative instruments – The fair value of the Company’s derivative instrument is the estimated amount that the Company would receive or pay to terminate the agreement at the reporting date, taking into account current interest rates and the current credit worthiness of both the Company and the derivative counterparty. The estimated amount is the present value of future cash flows. The Company transacts its derivative instrument through investment-grade rated financial institutions at the time of the transaction and requires no collateral from these institutions. Given the current volatility in the credit markets, it is reasonably possible that the derivative fair value recorded could vary by a material amount in the near term.

Long-term debt – The fair values 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.

The Company categorizes the fair value estimates by 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, 2014						December 31, 2013
	Fair Value Hierarchy Level	Carrying Amount Asset (Liability) $			Fair Value Asset (Liability) $			Carrying Amount Asset (Liability) $			Fair Value Asset (Liability) $
Cash and restricted cash	Level 1		88,171,887			88,171,887			62,623,362			62,623,362
Long-term debt (note 8)	Level 2		(842,765,865	)		(827,420,570	)		(924,855,982	)		(905,144,887	)
Derivative instruments (note 12)	Level 2		(4,273,293	)		(4,273,293	)		(1,367,960	)		(1,367,960	)

4. Restricted cash

The Company maintains restricted cash deposits relating to certain term loans and secured notes to be used only for operating, dry-docking and debt-service related expenditures. As at December 31, 2014 and 2013 the short-term amount of restricted cash on deposit was $4.2 million and $6.3 million, respectively, and long-term amount of restricted cash on deposit was $11.9 million and $4.7 million, respectively.

10

MALT LNG NETHERLANDS HOLDINGS B.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in U.S. Dollars, unless indicated otherwise)

5. Vessels and Equipment

	Cost		Accumulated depreciation			Net book value
	$		$			$
Balance, December 31, 2012		1,458,075,490		(35,369,139	)		1,422,706,351
Additions		9,635,718		—			9,635,718
Depreciation and amortization		—		(42,943,979	)		(42,943,979	)
Balance, December 31, 2013		1,467,711,208		(78,313,118	)		1,389,398,090
Additions		13,423,467		—			13,423,467
Depreciation and amortization		—		(45,018,043	)		(45,018,043	)
Balance, December, 31 2014		1,481,134,675		(123,331,161	)		1,357,803,514

6. Intangible Asset

As at December 31, 2014 intangible asset consisted of a time-charter contract. The carrying amount of the intangible asset is as follows:

	December 31, 2014			December 31, 2013
	$			$
Gross carrying amount		10,350,000			10,350,000
Accumulated amortization		(9,508,800	)		(6,092,920	)
Net carrying amount		841,200			4,257,080

Amortization expense of the intangible asset is $3.4 million, $3.2 million, and $2.9 million for the years ended December 31, 2014, 2013 and 2012, respectively. The intangible asset will be fully amortized in 2015.

7. Accrued Liabilities

	December 31, 2014		December 31, 2013
	$		$
Voyage and vessel expenses		2,264,307		2,612,163
Interest expense		1,445,111		1,603,882
Other general expenses		1,507,701		482,127
Income taxes payable and other		263,000		400,000
		5,480,119		5,098,172

8. Long-term Debt

	December 31, 2014			December 31, 2013
	$			$
U.S. Dollar denominated debt due through 2017		512,000,000			576,000,000
U.S. Dollar denominated debt due through 2021		145,546,875			157,109,372
U.S. Dollar denominated debt due through 2030		185,218,990			191,746,610
Total		842,765,865			924,855,982
Less current portion		(79,446,595	)		(82,090,117	)
		763,319,270			842,765,865

As at December 31, 2014, the Company had two U.S. Dollar-denominated term loans outstanding in the amount of $266.2 million and $245.8 million. These loans have quarterly interest payments based on LIBOR plus 3.15% and 0.50%, respectively, and bullet repayments of $206.1 million and $190.2 million, respectively, at maturity on March 31, 2017. The term loans are collateralized by first-priority statutory mortgages over the Marib Spirit, Arwa Spirit, Methane Spirit and Magellan Spirit, first priority pledges or charges of all the issued shares of the respective vessel owning subsidiaries, and a guarantee from Teekay LNG Partners L.P. and Marubeni Corporation.

11

MALT LNG NETHERLANDS HOLDINGS B.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in U.S. Dollars, unless indicated otherwise)

As at December 31, 2014, the Company had a U.S. Dollar-denominated term loan outstanding in the amount of $145.5 million. This loan has equal quarterly principal repayments of $2.9 million, quarterly interest payments based on LIBOR plus 2.60% and a bullet repayment of $67.5 million at maturity on July 18, 2021. The term loan is collateralized by a first-priority mortgage on the Woodside Donaldson.

As at December 31, 2014, the Company had U.S. Dollar-denominated senior secured notes in the amount of $185.2 million. These notes have quarterly principal repayments and quarterly interest payments based on a fixed rate of 4.11%. The notes have a maturity date of August 1, 2030 and are collateralized by a first-priority mortgage on the Meridian Spirit.

The weighted-average effective interest rate for the Company’s long-term debt outstanding as at December 31, 2014 and December 31, 2013 was 2.69% and 2.66%, respectively. The aggregate annual long-term debt principle repayments required subsequent to December 31, 2014 are $79.4 million (2015), $68.0 million (2016), $428.3 million (2017), $19.7 million (2018), $19.9 million (2019) and $227.5 million (thereafter).

9. In-process Revenue Contracts

As part of the Company’s acquisition of MALT LNG Transport ApS the Company assumed certain LNG charter contracts with terms that were less favorable than the then prevailing market terms. The Company has 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 based on the projected revenue to be earned under the contracts and are recorded as part of voyage revenues in the Company’s consolidated statements of income and comprehensive income.

As at December 31, 2014 and 2013 in-process revenue contracts consisted of four time-charter contracts with a weighted-average amortization period of 13.8 years (2013 – 14.8 years). The carrying amount of in-process revenue contracts for the Company is as follows:

	December 31, 2014			December 31, 2013
	$			$
Gross carrying amount		135,880,000			135,880,000
Accumulated amortization		(45,150,328	)		(38,480,503	)
Net carrying amount		90,729,672			97,399,497
Less current portion		(6,668,323	)		(6,668,528	)
		84,061,349			90,730,969

Amortization of in-process revenue contracts in each of the five years following 2014 is approximately $6.7 million per year (2015 – 2019) and $57.2 million (thereafter).

10. Share Capital and Additional Paid-in Capital

On July 12, 2013, Malt LNG Netherlands Holdings B.V. issued 100 shares of common stock for 100 Euro (approximately $121) to the Joint Venture Partners. The Company does not have authorized capital.

On August 6, 2013 the Joint Venture Partners contributed its shares in MALT LNG Holdings ApS to Malt LNG Netherlands Holdings B.V. in exchange for additional paid-in capital of Malt LNG Netherlands Holdings B.V.

	December 31, 2014		December 31, 2013
	$		$
Issued and outstanding
100 Common shares		121		121

12

MALT LNG NETHERLANDS HOLDINGS B.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in U.S. Dollars, unless indicated otherwise)

11. Related Party Transactions

a. Teekay Luxembourg S.a.r.l. and Scarlet LNG Transport Co., Ltd. are joint venture partners holding ownership interest in the Company of 52% and 48%, respectively. Marubeni Corporation is the ultimate parent company of Scarlet LNG Transport Co., Ltd. and Teekay Corporation is the ultimate parent company of Teekay Luxembourg S.a.r.l.

b. The Company and certain of its operating subsidiaries have entered into service agreements with Teekay Shipping Ltd., a wholly-owned subsidiary of Teekay Corporation to which Teekay Shipping Ltd. provides the Company and its subsidiaries with corporate and technical ship management services. In addition, crew training services and transition related services were provided to the Company by Teekay Shipping Ltd. These services are measured at the exchange amount between the parties. For the periods indicated, these related party transactions were as follows:

	Year Ended December 31, 2014		Year Ended December 31, 2013		Year Ended December 31, 2012
	$		$		$
Crew training expenses included in vessel operating expenses		1,235,011		1,015,685		371,582
Ship management services		2,957,975		2,901,416		1,661,202
Corporate services included in general and administrative		1,885,785		1,848,809		1,025,000
Transition services included in general and administrative		—		—		2,100,000

c. From time to time, other payments are made by affiliates on behalf of the Company that are not specific to any agreements described above. During the year ended December 31, 2014, nil (2013 – $0.2 million and 2012 – $1.0 million) payments of this nature were made.

d. The amounts due to related parties are non-interest bearing, unsecured and have no fixed repayment terms. The Company did not incur interest expense from related party balances during the year ended December 31, 2014 and 2013. Balances with related parties are as follows:

	December 31, 2014		December 31, 2013
	$		$
Teekay Shipping Limited		10,849,792		10,176,738
Teekay Corporation		98,805		28,827
Other related parties		31,228		190,798
		10,979,825		10,396,363

e. As a result of the refinancing completed during 2013, the tranches of the facility were guaranteed by the Joint Venture Partners relative to their proportionate interest. As a result of difference in the credit ratings of the guarantors, the tranche guaranteed by Marubeni Corporation received a lower interest rate than the portion guaranteed by Teekay LNG Partners L.P. by 2.567%. As a result, the Company has agreed to pay the interest rate differential to Marubeni Corporation until the facility matures in 2017 as a payment for their guarantee. The payment, which totaled $6.9 million and $3.0 million for the years ended December 31, 2014 and 2013, respectively, is included in interest expense.

12. Derivative Instruments

The Company uses derivative instruments to manage certain risks in accordance with its overall risk management policies.

Interest Rate Risk:

The Company entered into an interest rate swap, which exchanges 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. The Company has designated, for accounting purposes, its interest rate swap as a cash flow hedge.

13

MALT LNG NETHERLANDS HOLDINGS B.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in U.S. Dollars, unless indicated otherwise)

As at December 31, 2014, the Company was committed to the following interest rate swap agreement:

	Interest Rate Index		Notional Amount $		Fair Value / Carrying Amount of Liability $		Average Remaining Term (years)		Fixed Interest Rate (1) (%)
U.S. Dollar-denominated interest rate swap (2)		LIBOR		145,546,875		4,273,293		6.6		2.2

(1) Excludes the margin the Company pays on its variable-rate debt, which as at December 31, 2014 was 2.60%.

(2) Notional amount reduces quarterly.

The Company is exposed to credit loss in the event of non-performance by the counterparty to the interest rate swap agreement. 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 transactions.

The following table presents the location, type of contract and fair value amount of the derivative instrument on the Company’s consolidated balance sheets.

	Derivative Asset $		Accrued Liabilities $			Current Portion of Derivative Liability $			Derivative Liability $
As at December 31, 2014
Interest rate swap agreement		—		(573,236	)		(2,148,377	)		(1,551,680	)
As at December 31, 2013
Interest rate swap agreement		1,618,305		(631,022	)		(2,355,243	)		—

For the periods indicated, the following table presents the effective portion of gains (losses) on interest rate contracts designated and qualifying as cash flow hedges that were (1) recognized in other comprehensive (loss) income, (2) recorded in accumulated other comprehensive (loss) income (or AOCI) during the term of the hedging relationship and reclassified to earnings, and (3) recognized in the ineffective portion of (losses) gains on derivative instruments designated and qualifying as cash flow hedges.

As at December 31, 2014		Year Ended December 31, 2014
Balance Sheet (AOCI)		Statement of Income
Effective Portion		Effective Portion			Ineffective Portion
$		$			$
	—		—			(13,989	)	Interest expense
	(2,697,554)		(2,949,130	)		—		Other comprehensive loss
	(2,697,554)		(2,949,130	)		(13,989	)

As at December 31, 2013		Year Ended December 31, 2013
Balance Sheet (AOCI)		Statement of Income
Effective Portion		Effective Portion		Ineffective Portion
$		$		$
	—		—		(988,514	)	Interest expense
	251,576		251,576		—		Other comprehensive income
	251,576		251,576		(988,514	)

14

MALT LNG NETHERLANDS HOLDINGS B.V.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in U.S. Dollars, unless indicated otherwise)

As at December 31, 2014 and 2013, the Company’s accumulated other comprehensive (loss) income included ($2.9) million and $0.3 million net of unrealized gains on its interest rate swap contract designated as a cash flow hedge. As at December 31, 2014, the Company estimated based on then current interest rates, that it would reclassify approximately $2.4 million of losses on its interest rate swap contract from accumulated other comprehensive income to earnings during the next 12 months.

13. Supplemental Cash Flow Information

a. The changes in operating assets and liabilities for year ended December 31, 2014, 2013 and 2012 are as follows:

	Year Ended December 31, 2014			Year Ended December 31, 2013			Year Ended December 31, 2012
	$			$			$
Accounts receivable and accrued revenue		3,626,254			(2,276,231	)		13,935,536
Prepaid expenses		46,822			(396,955	)		2,914,134
Accounts payable		(603,807	)		19,067			(5,071,155	)
Accrued liabilities		381,947			7,917			6,112,933
Due to related parties		583,462			5,275,731			3,525,537
Deferred revenues		945,280			(6,405,588	)		(3,945,434	)
		4,979,958			(3,776,059	)		17,471,551

b. During the year ended December 31, 2014, 2013 and 2012 cash paid for interest on long-term debt was $34.0 million, $26.4 million and $14.7 million, respectively.

14. Operating Leases

As at December 31, 2014, the minimum scheduled future revenues in the next five years to be received by the Company for the lease and non-lease elements under charters are approximately $154.9 million (2015), $138.2 million (2016), $114.1 million (2017), $112.4 million (2018) and $114.1 million (2019).

Minimum scheduled future revenues do not include amortization of in-process revenue contracts, revenue generated from new contracts entered into after December 31, 2014, revenue from unexercised option periods on contracts that existed on December 31, 2014 or variable or contingent revenues. Therefore, the minimum scheduled future revenues should not be construed to reflect total charter hire revenues for any of the years.

15. Accounting Pronouncement Not Yet Adopted

In May 2014, the Financial Accounting Standards Board (or FASB) issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers, (or ASU 2014-09). ASU 2014-09 will require entities to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This update creates a five-step model that requires entities to exercise judgment when considering the terms of the contract(s) which include (i) identifying the contract(s) with the customer, (ii) identifying the separate performance obligations in the contract, (iii) determining the transaction price, (iv) allocating the transaction price to the separate performance obligations, and (v) recognizing revenue when each performance obligation is satisfied. ASU 2014-09 is effective for interim and annual periods beginning after December 15, 2016 and shall be applied, at the Company’s option, retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. Early adoption is not permitted. The Company is evaluating the effect of adopting this new accounting guidance.

In April 2014, the FASB issued Accounting Standards Update 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity (or ASU 2014-08) which raises the threshold for disposals to qualify as discontinued operations. A discontinued operation is now defined as: (i) a component of an entity or group of components that has been disposed of or classified as held for sale and represents a strategic shift that has or will have a major effect on an entity’s operations and financial results; or (ii) an acquired business that is classified as held for sale on the acquisition date. ASU 2014-08 also requires additional disclosures regarding discontinued operations, as well as material disposals that do not meet the definition of discontinued operations. ASU 2014-08 is effective for fiscal years beginning on or after December 15, 2014, and interim periods within those years. Early adoption is permitted, but only for disposals (or classifications as held for sale) that have not been reported in the financial statements previously issued or available for issuance. The impact, if any, of adopting ASU 2014-08 on the Company’s financial statements will depend on the occurrence and nature of disposals that occur after ASU 2014-08 is adopted.

15

EX-23.3

Exhibit 23.3

Consolidated Financial Statements

EXMAR LPG BVBA

December 31, 2014

INDEPENDENT AUDITORS’ REPORT

To the Board of Directors of Exmar LPG BVBA

Report on the Consolidated Financial Statements

We have audited the accompanying consolidated financial statements of Exmar LPG BVBA, which comprise the consolidated statements of financial position as at December 31, 2014 and 2013, the consolidated statements of income and comprehensive income, equity and cash flows for the year ended December 31, 2014 and for the period from February 12, 2013 to December 31, 2013, and notes, comprising a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements referred to above present fairly in all material respects, the consolidated financial position of Exmar LPG BVBA as of December 31, 2014 and 2013, and the results of its operations and its cash flows for the year ended December 31, 2014 and the period from February 12, 2013 to December 31, 2013 in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.

/s/ KPMG LLP

Chartered Accountants

April 21, 2015

Vancouver, Canada

2

EXMAR LPG BVBA

Consolidated Statements of Financial Position

(in thousands of U.S. Dollars)

	As of December 31, 2014			As of December 31, 2013
Assets
Current:
Cash and cash equivalents		55,392			32,448
Accounts receivable, including non-trade of $10,304 (2013 – $12,537)		15,155			16,494
Other current assets (notes 5 and 10(c))		66,663			9,555
Total current assets		137,210			58,497
Non-current assets:
Vessels, net of accumulated depreciation (note 4)		425,834			396,705
Total assets		563,044			455,202
Liabilities and Equity
Current:
Current portion of long-term debt (note 6)		36,109			39,600
Current portion of finance lease obligations (note 6)		21,547			6,642
Shareholders’ loans (note 7)		165,350			164,139
Accounts payable (note 10(b))		6,889			6,767
Other current liabilities (note 8)		2,140			3,410
Total current liabilities		232,035			220,558
Long-term liabilities:
Long-term debt (note 6)		168,813			141,206
Finance lease obligations (note 6)		—			40,460
Total liabilities		400,848			402,224
Equity:
Common stock (note 9)		132,832			132,832
Reserve for equity adjustment on acquisition		(106,349	)		(106,349	)
Retained earnings		135,713			26,495
Total equity		162,196			52,978
Total liabilities and equity		563,044			455,202

Commitments (Note 12 and Note 13)

The accompanying notes are an integral part of the consolidated financial statements.

3

EXMAR LPG BVBA

Consolidated Statements of Income and Comprehensive Income

(in thousands of U.S. Dollars)

	Year Ended December 31, 2014			Period from February 12, 2013 to December 31, 2013
Operations
Revenues		198,843			170,525
Gain on sales of vessels (note 4)		65,563			1,824
Other operating income		650			31
Vessel operating expenses (note 10(a))		(115,121	)		(106,426	)
Administrative expenses		(1,442	)		(1,682	)
Depreciation (note 4)		(28,244	)		(29,425	)
Other operating expenses		(268	)		(305	)
Income from vessel operations		119,981			34,542
Finance costs		(9,777	)		(8,805	)
Finance income		—			29
Other financial items, net		(905	)		(501	)
Net income before taxes		109,299			25,265
Income taxes (note 3)		(81	)		(97	)
Net income and comprehensive income		109,218			25,168

The accompanying notes are an integral part of the consolidated financial statements.

4

EXMAR LPG BVBA

Consolidated Statements of Cash Flows

(in thousands of U.S. Dollars)

	Year Ended December 31, 2014			Period from February 12, 2013 to December 31, 2013
Cash provided by (used for)
Operating Activities
Net income		109,218			25,168
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation		28,244			29,425
Gain on sale of vessels		(65,563	)		(1,824	)
Finance costs		9,777			8,805
Finance income		—			(29	)
Income taxes		81			97
Changes in operating assets and liabilities:
Decrease (Increase) in accounts receivable		1,339			(8,928	)
Decrease in other current assets		2,892			3,732
Increase in accounts payable		122			129
Decrease in other current liabilities		(1,270	)		(2,218	)
Taxes paid		(85	)		(105	)
Finance costs paid		(9,926	)		(9,654	)
Finance income received		—			29
Dry dock expenditures		(11,397	)		(6,199	)
Other		78			490
Cash provided by operating activities		63,510			38,918
Investing Activities
Capital expenditures		(129,113	)		(61,091	)
Proceeds from sale of vessels		149,986			5,490
Net cash provided by (used in) investing activities		20,873			(55,601	)
Financing Activities
Proceeds from long-term debt		105,000			215,000
Repayments of long-term debt		(80,884	)		(190,560	)
Repayments of finance lease obligations		(25,555	)		(5,115	)
Proceeds from shareholders’ loans		—			27,570
Advance to affiliated company (note 10(c))		(60,000	)		—
Net cash (used in) provided by financing activities		(61,439	)		46,895
Net increase in cash and cash equivalents		22,944			30,212
Cash and cash equivalents at beginning of period		32,448			2,236
Cash and cash equivalents at end of period		55,392			32,448

5

EXMAR LPG BVBA

Consolidated Statements of Changes in Equity

(in thousands of U.S. Dollars)

	Common Stock		Reserve for Equity Adjustment on Acquisition			Retained Earnings		Total Equity
Balance, February 12, 2013		132,832		(106,349	)		1,327		27,810
Net income and comprehensive income		—		—			25,168		25,168
Balance, December 31, 2013		132,832		(106,349	)		26,495		52,978
Net income and comprehensive income		—		—			109,218		109,218
Balance, December 31, 2014		132,832		(106,349	)		135,713		162,196

6

Exmar LPG BVBA

Notes to the Consolidated Financial Statements

(all tabular amounts stated in thousands of U.S. Dollars, unless otherwise indicated)

(1) Summary of Significant Accounting Policies

(a) Basis of preparation

These consolidated financial statements have been prepared in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board (or IFRS). These consolidated financial statements include the accounts of Exmar LPG BVBA, which is incorporated under the laws of Belgium and its wholly owned subsidiaries, as described below (collectively, the Company). The Company is owned jointly by Exmar NV and Teekay Luxembourg S.a.r.l. The comparative figures on the consolidated statement of income and comprehensive income are from February 12, 2013 which is the day Teekay Luxembourg S.a.r.l. acquired Exmar’s 50% interest in the Company. The address of the Company’s registered office is at De Gerlachekaai 20, B-2000 Antwerp, Belgium. The following is a list of Exmar LPG BVBA’s subsidiaries:

Name of Significant Subsidiaries	Jurisdiction of Incorporation	Proportion of Ownership Interest
Exmar Shipping BVBA	Belgium		100	%
Exmar Gas Shipping Ltd	Hong Kong		100	%
Good Investment Ltd	Hong Kong		100	%

All intercompany balances and transactions between Exmar LPG BVBA and its subsidiaries have been eliminated within these consolidated financial statements. The preparation of financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Exmar LPG BVBA was incorporated on July 10, 2012.

The Company evaluated events and transactions occurring after the consolidated statements of financial position date and through the day the financial statements were available to be issued which is April 21, 2015.

(b) Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities (including structured entities) controlled by the Company and its subsidiaries. Control is achieved when the Company:

• has power over the investee;

• is exposed, or has rights, to variable returns from its involvement with the investee; and

• has the ability to use its power to affect its returns.

The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above.

7

Exmar LPG BVBA

Notes to the Consolidated Financial Statements

(all tabular amounts stated in thousands of U.S. Dollars, unless otherwise indicated)

(c) 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.

(d) Use of Judgements and Estimates

The preparation of the consolidated financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected.

Significant items subject to such estimates and assumptions include the useful lives of vessels; the residual value of the vessels; the classification of new lease commitments and the review of the carrying amount of the fleet for potential impairment.

Information about judgments made in applying accounting policies that have the most significant effects on the amounts recognized in the consolidated financial statements is included in the following: the classification of a lease as part of a time charter arrangement and the arm’s length nature of related party transactions.

(e) Cash and Cash Equivalents

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents unless there is a restriction imposed by a third party on the availability of the funds.

(f) Accounts Receivable

Accounts receivable are recorded at the invoiced amount, do not bear interest and are based on the provisions of the respective time charter. Management reviews the need for an allowance for doubtful accounts on a monthly basis. Account balances are charged off against the allowance after all means of collection have been exhausted and the Company believes that the receivable will not be recovered.

As of December 31, 2014 and December 31, 2013, the collection of no accounts receivable was considered doubtful and, accordingly, there was no provision for doubtful accounts recorded.

(g) Operating Revenues and Expenses

The principal activities of the Company are the owning and chartering of vessels.

The lease element of time-charters and bareboat charters accounted for as operating leases are recognized by the Company daily over the term of the charter as the applicable vessel operates under the charter. The Company recognizes revenues from the non-lease element of time-charter contracts daily as services are performed. The Company does not recognize revenues during days that the vessel is off-hire.

All revenues from voyage charters are recognized on a percentage of completion method.

Vessel operating expenses include crewing, repairs and maintenance, insurance, stores, lube oils and communication expenses. Vessel operating expenses are paid by the Company for vessels on time-charters, and during off hire and are recognized when incurred.

8

Exmar LPG BVBA

Notes to the Consolidated Financial Statements

(all tabular amounts stated in thousands of U.S. Dollars, unless otherwise indicated)

As further discussed in Note 10 — Related Party Transactions, related parties have provided the management services for the vessels and employ the crews that work on the vessels.

(h) Vessels and vessels under finance lease

All pre-delivery costs incurred during the construction of new-buildings, including interest, supervision and technical costs, are capitalized. Depreciation is calculated on a straight-line basis over each vessel’s estimated useful life, less an estimated residual value. The vessel’s estimated useful lives are estimated at being 30 years.

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.

The Company dry docks its vessels and vessels under finance lease on a regular basis (on average every three to five years). The Company capitalizes certain costs incurred during dry docking and amortizes those costs on a straight-line basis from the completion of a dry docking over the estimated useful life of the dry dock. The Company includes in capitalized dry docking those costs incurred as part of the dry docking to meet regulatory requirements, or expenditures that either add economic life to the vessel, increase the vessel’s earning capacity or improve the vessel’s operating efficiency. The Company expenses costs related to routine repair and maintenance incurred during dry dock that does not improve or extend the useful life of the vessels.

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.

(i) Other Current Assets

Other current assets consist of prepaid expenses, accrued revenue and advances to an affiliated company.

(j) Debt issuance costs

Debt issuance costs, including fees, commissions and legal expenses, relating to bank loan facilities are deferred and amortized using the effective interest rate method over the term of the relevant loan. Amortization of deferred debt issuance is included in finance costs. Debt issuance costs are presented net of long-term debt.

(k) Commitments and Contingencies

Liabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred.

Each time charter includes a requirement for the Company to guarantee certain performance criteria of the vessel primarily speed, upload/discharge speed and fuel consumption over the term of the charter. Costs associated with these performance claims are recognized when it is probable that the Company has incurred a liability. Management’s best estimate with regards to the probable payment in respect of performance claims issued by the charter party is recognized as a liability. Receivables under insurance policies are recorded when it is probable that the insurer will pay the amount.

9

Exmar LPG BVBA

Notes to the Consolidated Financial Statements

(all tabular amounts stated in thousands of U.S. Dollars, unless otherwise indicated)

(l) Income taxes

The income tax expense is recognised in profit or loss except to the extent that it relates to items recognised directly in equity, in which case is the related income taxes are recognised in equity.

Any deferred tax will be recognised using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred taxes are measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date.

A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which temporary difference can be utilised. Any deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised. No deferred tax asset has been recognized for the current year.

(m) Leases

Payments made under operating leases are recognized in profit or loss on a straight-line basis over the term of the lease. One of the Company’s leases has a provision whereby the amount of the lease payment fluctuates based on a percentage of the amount earned by a group of the Company’s vessels, including the leased vessel. These lease payments are considered contingent rent and are recorded in profit or loss in the period in which the revenue is earned.

Minimum lease payments under finance leases are apportioned between the finance expense and the reduction of the outstanding liability. The finance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability.

(n) New standards and interpretations not yet adopted

IFRS 9 Financial Instruments published in July 2014 replaces the existing guidance in IAS 39 Financial Instruments: Recognition and Measurement. IFRS 9 includes revised guidance on the classification and measurement of financial instruments, including a new expected credit loss model for calculating impairment on financial assets, and the new general hedge accounting requirements, which align hedge accounting more closely with risk management. It also carries forward the guidance on recognition and derecognition of financial instruments from IAS 39. IFRS 9 is effective for annual periods beginning on or after 1 January 2018, with early adoption permitted. The Company does not plan to adopt this standard early and the extent of the impact has not yet been determined.

IFRS 15 Revenue from Contracts with Customers establishes a comprehensive framework for determining whether, how much and when revenue is recognized. It replaces existing revenue recognition guidance, including IAS 18 Revenue, IAS 11 Construction Contracts and IFRIC 13 Customer Loyalty Programs. IFRS 15 is effective for the annual reports beginning on or after 1 January 2017, with early adoption permitted. The Company is assessing the potential impact on its consolidated financial statements resulting from the application of IFRS 15.

(2) Segment Information

The Company has not presented segment information as it considers it operates in one reportable segment, the floating liquefied petroleum gas carrier market. Furthermore, the Company’s vessels operate under time-charters or voyage charters. The charterer controls the choice of which routes the vessel will serve. Accordingly, the Company’s management does not evaluate the Company’s performance according to geographic region.

10

Exmar LPG BVBA

Notes to the Consolidated Financial Statements

(all tabular amounts stated in thousands of U.S. Dollars, unless otherwise indicated)

(3) Taxation

Exmar LPG BVBA

Exmar LPG BVBA is subject to Belgian corporate income taxes. Exmar LPG BVBA has estimated tax losses of $5.1 million available for carry forward against future taxable profits. Given management’s assessment that it is not more likely than not that Exmar LPG BVBA will be able to generate sufficient taxable income in the future the deferred tax asset related to net operating losses carried forward as of December 31, 2014 has not been recognized.

Exmar Shipping BVBA

Exmar Shipping BVBA is subject to the Belgian Tonnage Tax Regime. Under this regime, the applicable tax is based on the weight (measured as net tonnage) of the vessels. The tonnage tax related to the vessels amounted to $0.1 million for the year ended December 31, 2014 and for the period from February 12, 2013 to December 31, 2013.

Exmar Gas Shipping Ltd

No provision for Hong Kong Profits Tax has been made in the financial statements as Exmar Gas Shipping Ltd did not earn any income subject to Hong Kong Profit Tax for the year.

Good Investment Ltd

No provision for Hong Kong Profits Tax has been made in the financial statements as Good Investment Ltd did not earn any income subject to Hong Kong Profit Tax for the year.

(4) Vessels

	Vessels			Vessels under finance lease			Dry dock components			Vessels under Construction			Total
Cost at February 12, 2013		404,376			94,400			28,615			9,664			537,055
Capital expenditures		—			—			6,199			62,578			68,777
Vessel sales		(18,037	)		—			(1,386	)		—			(19,423	)
Component disposal		—			—			(4,480	)		—			(4,480	)
Cost at December 31, 2013		386,339			94,400			28,948			72,242			581,929
Capital expenditures		—			—			11,397			130,480			141,877
Vessel acquisitions (note 6(b))		49,600			(49,600	)		—			—			—
Vessel sales		(140,340	)		—			(8,742	)		—			(149,082	)
Vessel deliveries		146,174			—			—			(146,174	)		—
Component disposal		—			—			(5,346	)		—			(5,346	)
Cost at December 31, 2014		441,773			44,800			26,257			56,548			569,378

11

Exmar LPG BVBA

Notes to the Consolidated Financial Statements

(all tabular amounts stated in thousands of U.S. Dollars, unless otherwise indicated)

Accumulated Depreciation at February 12, 2013	129,684		34,373		11,978		—	176,035
Depreciation	16,405		3,789		9,231		—	29,425
Vessel sales	(14,691	)	—		(1,065	)	—	(15,756	)
Component disposal	—		—		(4,480	)	—	(4,480	)
Accumulated Depreciation at December 31, 2013	131,398		38,162		15,664		—	185,224
Depreciation	17,639		3,007		7,598		—	28,244
Vessel acquisitions (note 6(b))	21,891		(21,891	)	—		—	—
Vessel sales	(59,219	)	—		(5,359	)	—	(64,578	)
Component disposal	—		—		(5,346	)	—	(5,346	)
Accumulated Depreciation at December 31, 2014	111,709		19,278		12,557		—	143,544
Net Book Value at December 31, 2013	254,941		56,238		13,284		72,242	396,705
Net Book Value at December 31, 2014	330,064		25,522		13,700		56,548	425,834

During the year ended December 31, 2014, the Company sold four vessels, the Eeklo, Flanders Harmony, Temse and Flanders Tenacity (which was a vessel under finance lease and purchased by the Company in 2014 immediately prior to the sale), resulting in a gain of $65.6 million. During the period from February 12, 2013 to December 31, 2013, the Company sold one vessel, the Donau, resulting in a gain of $1.8 million.

Interest costs capitalized to vessels for the year ended December 31, 2014 and for the period from February 12, 2013 to December 31, 2013 aggregated $1.5 million and $1.4 million, respectively.

(5) Other Current Assets

	December 31, 2014		December 31, 2013
Accrued revenues		2,834		4,825
Prepaid expenses		3,829		4,730
Advances to affiliated company (note 10(c))		60,000		—
		66,663		9,555

(6) Long-term Debt and Finance Lease Obligations

(a) Long-term debt

	December 31, 2014			December 31, 2013
U.S. Dollar denominated debt due through 2018		208,600			185,300
Less debt issuance costs		(3,678	)		(4,494	)
Total debt		204,922			180,806
Less current portion		(36,109	)		(39,600	)
		168,813			141,206

12

Exmar LPG BVBA

Notes to the Consolidated Financial Statements

(all tabular amounts stated in thousands of U.S. Dollars, unless otherwise indicated)

Annual maturities of long-term debt as of December 31, 2014 during the next four years are as follows:

	Long- term debt
2015		36,109
2016		36,109
2017		36,109
2018		100,273
Total		208,600

The long-term debt of the Company relate to the 5-year senior secured loan facility (the “LPG Facility”) of up to $355.0 million, consisting of: a revolving credit facility (the “Revolving Credit Facility”) of $215.0 million and a newbuilding facility (the “Newbuilding Facility”) of up to $140.0 million. The LPG Facility bears interest at LIBOR plus a margin of 3.25%, the maturity date of the LPG Facility is March 28, 2018. The weighted-average effective interest rate for the Company’s long-term debt outstanding at December 31, 2014 and December 31, 2013 was 3.45% and 3.45%, respectively.

The commitments under the Revolving Credit Facility are reduced by 20 consecutive quarterly reductions commencing on June 2013, the first 19 in an amount of $9.9 million and the last reduction in an amount of $26.9 million. The Newbuilding Facility is repayable in consecutive quarterly instalments, each in an amount equal to one sixtieth of the amount of that newbuilding advance.

All amounts due under the LPG Facility are secured by shareholder guarantees, a first priority mortgage, a first priority share pledge, the assignment of all earnings, insurances and existing or future time-charter contracts, and a first priority pledge of the earnings account.

The LPG Facility contains covenants that require, among other things, compliance with the following:

• minimum aggregate cash and cash equivalents of the higher of (i) $20.0 million and (ii) 5% of financial indebtedness;

• minimum consolidated working capital of $0;

• minimum ratio of net financial indebtedness to consolidated total capitalization of 0.70;

• minimum ratio of EBITDA to interest expense 2.50 to 1.00;

• minimum security coverage ratio of 125%.

Consolidated working capital excludes shareholders’ loans. Dividends may be declared and paid providing that Exmar LPG BVBA and its subsidiaries are in compliance with the financial and other covenants; there is no event of default; and the minimum liquidity is respected.

(b) Finance lease obligations

The outstanding finance lease obligations as at December 31, 2014 relate to the lease arrangement for the LPG carrier Brussels and as at December 31, 2013, also included the LPG carrier Flanders Tenacity. At December 31, 2014, the weighted-average interest rate implicit in this remaining lease was 5.75%.

13

Exmar LPG BVBA

Notes to the Consolidated Financial Statements

(all tabular amounts stated in thousands of U.S. Dollars, unless otherwise indicated)

• Flanders Tenacity

In 2004, Good Investment Ltd entered into a lease arrangement for the LPG carrier Flanders Tenacity. The initial lease period was for 10 years plus 5 years in charterers’ option. Lease rentals were payable on a monthly basis. The lease obligations were secured by a mortgage on the vessel. Exmar Shipping BVBA had the option to purchase the Flanders Tenacity during the initial lease period. If Good Investment Ltd did not extend the charter period for an additional 5 years, the Company (and/or nominee) was obligated to purchase the vessel for a fixed price. In 2014, the Company acquired the vessel from the lessor and was sold to a third party, see Note 4 – Vessels and Dry Dock Components.

• Brussels

The Company entered into a lease arrangement for the LPG carrier Brussels. The lease period commenced January 2009 for a period of six years and three months. Lease rentals are payable on a quarterly basis. Exmar Shipping BVBA has the option to terminate the lease arrangement and to take title to the vessel on any payment date, provided that all amounts due, including the early termination amount, have been paid. At the expiration of the lease period, the Company is required to purchase the vessel at a fixed price, see Note 13 – Commitments.

As at December 31, 2014, the commitments under the remaining finance lease obligation approximated $22.1 million, including imputed interest of $0.6 million and the fixed price purchase obligation, repayable in 2015.

(7) Shareholders’ Loans

As of December 31, 2014, the Company has loans outstanding to its shareholders of $163.4 million (December 31, 2013 – $163.4 million). These loans bear interest at LIBOR plus margins ranging from 0.50% to 2.0% and have no fixed repayment terms. As at December 31, 2014, the interest accrued on these advances was $2.0 million (December 31, 2013 – $0.7 million). Both the principal and the accrued interest on these loans are included as shareholders’ loans in the Company’s consolidated statements of financial position. The weighted-average effective interest rate for the Company’s shareholders’ loans outstanding at December 31, 2014 and December 31, 2013 was 0.73% and 0.74%, respectively.

(8) Other Current Liabilities

	December 31, 2014		December 31, 2013
Deferred revenues		1,898		3,374
Accrued interest expense		242		36
		2,140		3,410

(9) Common Stock

Exmar LPG BVBA has authorized share capital of $132,832,000 divided into 1,328,320 registered shares of no par value, all of which shares have been fully paid, and the legal title and beneficial ownership of 50% of those shares is held by each of Exmar NV and Teekay Luxembourg S.a.r.l.

In 2012, prior to the investment by Teekay Luxembourg S.a.r.l., Exmar NV transferred certain wholly owned subsidiaries to the newly-formed entity, Exmar LPG BVBA in exchange for the registered shares. As this transaction occurred between entities under common control at the time of the transfer, the assets of the underlying entities were recorded at the book value of Exmar NV at the date of the transfer. The difference between the value of the share capital issued and the book value of the assets is recorded as a reserve and adjusted through equity.

14

(10) Related Party Transactions

(a) Exmar NV provides general and corporate management services for the Company. Exmar Shipmanagement NV, a subsidiary of Exmar NV provides all services in relation to crew and technical management of the vessels. Exmar Marine NV, a subsidiary of Exmar NV, provides commercial management services. All amounts charged by Exmar NV, Exmar Shipmanagement NV and Exmar Marine NV to the Company are reflected in vessel operating expenses except for the management fee charged if and when a vessel is sold, these are netted in the gain on sale. Detail as follows:

	Year ended December 31, 2014		Period from February 12, 2013 to December 31, 2013
Exmar NV		588		520
Exmar Hong Kong		115		97
Exmar Shipmanagement NV		2,903		2,521
Exmar Marine NV		4,447		2,199

(b) Included in accounts payable is due to affiliated companies of $0.8 million and $0.4 million as of December 31, 2014 and 2013, respectively.

(c) During the year ended December 31, 2014, the Company loaned $60.0 million to Solaia Shipping LLC, a company under common control. This amount is included as part of other current assets in the Company’s consolidated statements of financial position. In February 2015, the amount advanced to Solaia Shipping LLC was repaid.

(11) Fair Value Measurements

The following methods and assumptions were used to estimate the fair value of each class of financial instrument:

Cash and cash equivalents – The fair value of the Company’s cash and cash equivalents approximates its carrying amounts reported in the consolidated statements of financial position.

Accounts receivable / Accounts payable – The fair value of the Company’s accounts receivable and accounts payable approximates the carrying amount given the short term nature of these instruments.

Advances to affiliated company included in other current assets – The fair value of the Company’s advances to an affiliated company as described in Note 10(c) – Related Party Transactions, approximates its carrying amount reported in the consolidated statements of financial position due to the short term nature.

Shareholders’ loans – The fair values of the Company’s shareholders’ loans are equal to the book value as the shareholders’ loans have no stated repayment terms and are due on demand.

Long-term debt – The fair values of the Company’s fixed-rate and variable-rate long-term debt is estimated using discounted cash flow analyses based on rates currently available for debt with similar terms and remaining maturities. The Company does not include credit enhancement in its fair valuation of long-term debt.

15

Exmar LPG BVBA

Notes to the Consolidated Financial Statements

(all tabular amounts stated in thousands of U.S. Dollars, unless otherwise indicated)

The Company categorizes the fair value estimates by 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, 2014						December 31, 2013
	Fair Value Hierarchy Level	Carrying Amount Asset (Liability)			Fair Value Asset (Liability)			Carrying Amount Asset (Liability)			Fair Value Asset (Liability)
Cash and cash equivalents	Level 1		55,392			55,392			32,448			32,448
Advances to affiliated company included in other current assets	Level 3		60,000			60,000			—			—
Shareholders’ loans	Level 2		(165,350	)		(159,852	)		(164,139	)		(160,180	)
Long-term debt	Level 2		(208,600	)		(211,061	)		(185,300	)		(187,480	)

16

Exmar LPG BVBA

Notes to the Consolidated Financial Statements

(all tabular amounts stated in thousands of U.S. Dollars, unless otherwise indicated)

(12) Operating Leases

(a) Company as a lessor

The Company’s future minimum receipts under short to long term time charters at December 31, 2014 are as follows:

Less than one year	121,606
Between one and five years	290,651
More than five years	200,528
	612,785

Minimum scheduled future revenues assume 100% utilization and do not include revenue generated from new contracts entered into after December 31, 2014, revenue from undelivered vessels, revenue from unexercised option periods of its time-charter contract that existed on December 31, 2014, or variable or contingent revenues. Therefore, the minimum scheduled future revenues should not be construed to reflect total charter hire revenues for any of the years.

(b) Company as a lessee

The Company leases a number of its vessels under operating lease agreements. The expense for 2014 relating to the operating leases amounts to $23.5 million ($20.4 million for 2013) and no payments for non-cancellable subleases were received. The future minimum payments under non-cancellable operating leases at December 31, 2014 are as follows:

Less than one year	26,228
Between one and five years	63,397
More than five years	46,878
	136,503

(13) Commitments

As of December 31, 2014, the Company has newbuilding contracts with Hyundai MIPO Dockyard Co, Ltd and HHIC – Phil Inc for the construction of nine LPG carriers at a total cost of $342.6 million. As at December 31, 2014, the estimated remaining costs to be incurred are $111.5 million (2015), $82.9 million (2016), $113.4 million (2017) and $34.9 million (2018). The Company intends to finance the newbuilding payments through its existing liquidity and expects to secure long-term debt financing for the units prior to their scheduled deliveries.

As described in Note 6(b) – Long-term Debt and Finance Lease Obligations, the Company is required to purchase the LPG carrier Brussels from the lessor at the expiration of the lease in 2015 for $19.9 million.

17

Exmar LPG BVBA

Notes to the Consolidated Financial Statements

(all tabular amounts stated in thousands of U.S. Dollars, unless otherwise indicated)

(14) Financial Risk Management

The Company has exposure to the following risks from its use of financial instruments:

Credit risk

The Company trades only with recognized, creditworthy third parties. It is the Company’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures. In addition, receivable balances are monitored on an ongoing basis with the result that the Company’s exposure to bad debts is not significant. The maximum exposure is the carrying amount as disclosed on the statements of financial position.

Liquidity risk

Liquidity risk is the risk that the Company will not have sufficient funds to meet its liabilities. The Company maintains liquidity and makes adjustments to it in light of changes to economic conditions, underlying risks inherent in its operations and capital requirements to maintain its operations. At December 31, 2014, the Company had $55.4 million of cash and cash equivalents ($32.4 million at December 31, 2013).

The following are the contractual maturities of financial liabilities, including estimated interest payments, as at December 31, 2014:

	Contractual cash flows
	Carrying amount		Total		1 year or less		1-3 years		3-5 years		More than 5 years
Accounts payable		6,889		6,889		6,889		—		—		—
Accrued interest expense		242		242		242		—		—		—
Shareholders’ loans (1)		165,350		165,350		165,350		—		—		—
Long-term debt(2)(3)		208,600		228,838		43,150		84,247		101,441		—
Finance lease obligations		21,547		22,148		22,148		—		—		—
		402,628		423,467		237,779		84,247		101,441		—

(1) The shareholders’ loans are due on demand however, the Company does not expect the shareholders to demand repayment in the next year.

(2) Amount does not include debt issuance costs being netted against long-term debt of $3.7 million.

(3) Contractual cash flows for long-term debt include estimated future variable interest payments of $20.1 million based on current interest rates.

18

Exmar LPG BVBA

Notes to the Consolidated Financial Statements

(all tabular amounts stated in thousands of U.S. Dollars, unless otherwise indicated)

Market risk

Interest Rate Risk

The Company is exposed to the impact of interest rate changes primarily through the borrowings that require the Company to make interest payments based on LIBOR. Significant increases in interest rates could adversely affect the operating margins, results of operations and the ability to service the debt. A 1% change in LIBOR would impact the Company’s consolidated statements of income and other comprehensive income by $2.1 million.

Foreign Currency Risk

The Company’s functional currency is U.S. Dollars. The results of operations are affected by fluctuations in currency exchange rates. The volatility in the financial results due to currency exchange rate fluctuations is attributed primarily to foreign currency expenses. A portion of the vessel operating expenses are denominated in Euro, which is primarily a function of the nationality of the crew. As a result, fluctuations in the Euro relative to the U.S. Dollar have caused, and are likely to continue to cause, fluctuations in our reported vessel operating expenses. A 10 basis point change in foreign currency exchange rates would impact the Company’s consolidated statements of income and comprehensive income by approximately $1.0 million.

(15) Employee expenses and director remuneration

Directors are appointed by the two joint venture partners. Director compensation is nil for the years ended December 31, 2014 and December 31, 2013.

There are no key management personnel employed by the Company. Management of the Company is performed through corporate and ship management service agreements with Exmar Marine NV and Exmar Shipmanagement NV as described in Note 10 — Related Party Transactions. As a result, compensation for key management personnel amounts to nil for the years ended December 31, 2014 and 2013.

The following employee expenses related to seafarers have been included in vessel and other operating expenses:

	Year ended December 31, 2014		For the period from February 12, 2013 to December 31, 2013
Salaries, bonuses and other personnel expenses		15,884		14,331

19

Exmar LPG BVBA

Notes to the Consolidated Financial Statements

(all tabular amounts stated in thousands of U.S. Dollars, unless otherwise indicated)

(16) Capital Management

The Board defines “capital” to include funds raised through the issuance of ordinary share capital, accumulated profits and proceeds raised from debt facilities, including shareholder loans. The Board’s policy is to obtain additional capital for the construction or acquisition of new vessels through shareholder loan injections by the Company’s Joint Venture Partners and external debt facilities and to dividend out any available excess cash the Company generates. The Board regularly reviews and manages its capital structure to maintain a balance between the higher returns that might be possible with higher levels of borrowings and the advantages and security afforded by a sound capital position, and makes adjustments to the capital structure in light of changes in economic conditions.

(17) Subsequent events

(a) In January 2015, one of the Company’s nine LPG newbuilding carriers, the Warisoulx, was delivered.

(b) In February 2015, the Company collected $60 million on the amount it advanced to Solaia Shipping LLC, and paid $70 million in aggregate to its shareholders as dividends and shareholders’ loan repayments.

(c) In April 2015, the Company purchased the LPG carrier Brussels from the lessor which was historically included as a finance lease (see Note 6(b) – Long-term Debt and Finance Lease Obligations).

20

XML

Accrued Liabilities (Tables)

12 Months Ended

Dec. 31, 2014

Payables and Accruals [Abstract]

Schedule of Accrued Liabilities

	December 31, 2014		December 31, 2013
	$		$
Voyage and vessel expenses		163,155		250,557
Interest		60,064		73,817
Payroll and benefits and other		100,606		91,369
Deferred revenue - current		66,027		49,486
Loan from affiliates		4,907		1,595
		394,759		466,824

XML

Pension Benefits - Components of Other Comprehensive Loss Relating to Plans (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Other comprehensive income (loss):
Net (loss) gain arising during the period	$ (14,954)	$ (3,930)	$ 6,143
Amortization of net actuarial loss	7,148	1,484	1,979
Plan settlement	(3,332)	973
Total (loss) income	$ (11,138)	$ (1,473)	$ 8,122

XML

Derivative Instruments and Hedging Activities - Interest Rate Swap Agreements (Detail) In Thousands, unless otherwise specified		12 Months Ended
	Dec. 31, 2014 Euro-denominated interest rate swaps [Member] EUR (€)	Dec. 31, 2014 Euro-denominated interest rate swaps [Member] Euro Interbank Offered Rate Euribor [Member] USD ($)	Dec. 31, 2014 U.S. Dollar-denominated interest rate swaps 1 [Member] London Interbank Offered Rate (LIBOR) [Member] USD ($)	Dec. 31, 2014 U.S. Dollar-denominated interest rate swaps 2 [Member] London Interbank Offered Rate (LIBOR) [Member] USD ($)	Dec. 31, 2014 Interest rate swap agreements [Member] USD ($)
Derivative [Line Items]
Principal Amount	€ 235,600	$ 284,993	$ 3,357,287	$ 500,000
Fair Value / Carrying Amount of Asset / (Liability)		$ (45,810)	$ (342,772)	$ (17,150)	$ (405,732)
Weighted-Average Remaining Term (Years)		6 years	5 years 9 months 18 days	9 months 18 days
Fixed Interest Rate		3.10%	3.50%	3.10%

XML

Summary of Significant Accounting Policies - Summary of Capitalized Dry Docking Costs (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Property, Plant and Equipment [Line Items]
Balance at the end of the year	$ 8,106,247	$ 7,351,144
Dry docking activity [Member]
Property, Plant and Equipment [Line Items]
Balance at the beginning of the year	118,194	100,928	128,987
Costs incurred for dry dockings	74,018	72,545	35,336
Dry dock amortization	(50,926)	(50,325)	(57,082)
Write down / sales of vessels	(5,955)	(4,954)	(6,313)
Balance at the end of the year	$ 135,331	$ 118,194	$ 100,928

XML

Vessel Sales, Asset Impairments and Provisions (Tables)

12 Months Ended

Dec. 31, 2014

Property, Plant and Equipment [Abstract]

Schedule of Assets and Liabilities Held for Sale

The Company has presented the assets and liabilities of the LLCs as assets held for sale and liabilities held for sale on the Company’s December 31, 2013 balance sheet as follows:

	$
Assets Held for Sale
Accounts receivable		11,179
Prepaid expenses		1,220
Vessels and equipment		163,200
Other long-term assets		648
Total assets		176,247
Liabilities Associated with Assets Held for Sale
Accounts payable		37
Accrued liabilities		3,362
Current portion of long-term debt(note 8)		11,698
Long-term debt(note 8)		152,910
Total liabilities		168,007

XML

Commitments and Contingencies - Additional Information - Teekay Nakilat (Detail) (Teekay LNG [Member], USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2014 Vessel	Dec. 31, 2013
Teekay Nakilat Corporation [Member]
Loss Contingencies [Line Items]
Capital lease arrangement period, lessee	The Teekay Nakilat Joint Venture was the lessee under three separate 30-year capital lease arrangements with a third party for the three RasGas II LNG Carriers.
Number of vessels	3
Share of potential exposure	70.00%	70.00%
RasGas II LNG Carriers [Member] | Foreign Tax Authority [Member]
Loss Contingencies [Line Items]
Share of potential exposure	70.00%
Estimated shares of lease rental increase claim	60

XML

Investments - FPSO Units and Investment in Sevan Marine ASA - Additional Information (Detail) (USD $) Share data in Millions, unless otherwise specified	0 Months Ended		12 Months Ended	0 Months Ended	9 Months Ended	12 Months Ended
	May 02, 2013	Apr. 13, 2013	Dec. 31, 2013	Nov. 30, 2011	Dec. 31, 2013	Dec. 31, 2014
Net Investment Income [Line Items]
Equity method investment, ownership interest						16.05%
Carrying value in excess of fair value	$ 4,300,000
Sevan Marine [Member]
Net Investment Income [Line Items]
Investment in Sevan Marine				25,000,000
Equity method investment, ownership interest			43.00%	40.00%	43.00%	43.00%
Voyageur Spirit [Member]
Net Investment Income [Line Items]
Acquisition cost			273,100,000		273,100,000
Assumed debt			230,000,000		230,000,000
Operating lease arrangement period, lessor		5 years
Excess price paid for the carrying value of non-controlling interest acquired	35,400,000
Acquisition costs			503,100,000
FPSO unit Sevan Hummingbird [Member]
Net Investment Income [Line Items]
Acquisition cost				184,000,000
Capital Addition Purchase Commitments [Member] | Voyageur Spirit [Member]
Net Investment Income [Line Items]
Acquisition cost				94,000,000
Assumed debt				230,000,000
Assumed debt, outstanding balance				220,500,000
Indemnification Agreement [Member] | Voyageur Spirit [Member]
Net Investment Income [Line Items]
Indemnification amount			41,100,000		34,900,000
Indemnification Agreement [Member] | Voyageur Spirit [Member] | Capital Expenditures [Member]
Net Investment Income [Line Items]
Business acquisition, pre-acquisition Contingency, amount of settlement						2,700,000
Indemnification Agreement [Member] | Unrecovered Repair Cost [Member] | Voyageur Spirit [Member] | Production Shortfalls [Member]
Net Investment Income [Line Items]
Indemnification amount						3,500,000
Minimum [Member] | Voyageur Spirit [Member]
Net Investment Income [Line Items]
Purchase price of acquisition				140,000,000
Maximum [Member] | Voyageur Spirit [Member]
Net Investment Income [Line Items]
Purchase price of acquisition				150,000,000
Teekay Offshore [Member]
Net Investment Income [Line Items]
Acquisition cost	253,000,000
Assumed debt, outstanding balance	230,000,000
Teekay Offshore [Member] | Common Stock [Member]
Net Investment Income [Line Items]
Common units issued	1.4
Teekay Offshore [Member] | Piranema Spirit [Member]
Net Investment Income [Line Items]
Acquisition cost				164,000,000
Teekay Offshore [Member] | Initial [Member] | Voyageur Spirit [Member]
Net Investment Income [Line Items]
Acquisition costs	$ 540,000,000

XML

Supplemental Cash Flow Information - Changes in Operating Assets and Liabilities (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Supplemental Cash Flow Information [Abstract]
Accounts receivable	$ 136,660	$ (77,837)	$ (132,873)
Prepaid expenses and other assets	(1,618)	(2,386)	19,741
Accounts payable	(17,643)	(10,877)	18,408
Accrued and other liabilities	(56,768)	155,284	(20,485)
Changes in operating assets and liabilities	$ 60,631	$ 64,184	$ (115,209)

XML

Summary of Significant Accounting Policies - Summary of Financing Receivables (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Summary of financing receivables
Direct financing leases	$ 704,953	$ 727,262
Other loan receivables
Investment in term loans and interest receivable		211,579
Loans to equity accounted investees and joint venture partners	251,580	140,772
Total direct financing leases and other loan receivables	1,002,222	1,139,723
Payment activity [Member] | Performing [Member]
Summary of financing receivables
Direct financing leases	704,953	727,262
Other loan receivables
Long term receivable included in other assets	43,843	31,634
Collateral [Member]
Other loan receivables
Investment in term loans and interest receivable		211,579
Other internal metrics [Member] | Performing [Member]
Other loan receivables
Loans to equity accounted investees and joint venture partners	$ 253,426	$ 169,248

XML

Goodwill, Intangible Assets and In-Process Revenue Contracts - Summary of Intangible Assets (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 317,684	$ 317,964
Accumulated Amortization	(223,018)	(210,066)
Net Carrying Amount	94,666	107,898
Customer contracts [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	316,684	316,684
Accumulated Amortization	(223,018)	(209,786)
Net Carrying Amount	93,666	106,898
Other intangible assets [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	1,000	1,280
Accumulated Amortization		(280)
Net Carrying Amount	$ 1,000	$ 1,000

XML

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, 2014	Dec. 31, 2013	Dec. 31, 2012
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Options Outstanding - beginning of year	4,237	5,285	5,713
Options Granted	15	73	433
Options Exercised	(1,528)	(1,039)	(733)
Options Forfeited/Expired	(14)	(82)	(128)
Options Outstanding - end of year	2,710	4,237	5,285
Options Exercisable - end of year	2,508	3,848	4,561
Weighted-Average Exercise Price, Outstanding - beginning of year	$ 36.33	$ 34.40	$ 32.47
Weighted-Average Exercise Price, Granted	$ 56.76	$ 34.07	$ 27.69
Weighted-Average Exercise Price, Exercised	$ 36.10	$ 26.21	$ 15.85
Weighted-Average Exercise Price, Forfeited/Expired	$ 28.51	$ 38.46	$ 31.81
Weighted-Average Exercise Price, Outstanding - end of year	$ 36.61	$ 36.33	$ 34.40
Weighted-Average Exercise Price, Exercisable - end of year	$ 37.03	$ 37.03	$ 35.54

XML

Derivative Instruments and Hedging Activities (Tables)

12 Months Ended

Dec. 31, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Commitment of Foreign Currency Forward Contracts

As at December 31, 2014, the Company was committed to the following foreign currency forward contracts:

	Contract Amount in Foreign Currency		Average Forward Rate (1)		Fair Value / Carrying Amount of Asset (Liability) $			Expected Maturity 2015 $		2016 $
Norwegian Kroner		861,000		6.44		(18,407	)		91,400		42,253
						(18,407	)		91,400		42,253

(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, 2014, the Company was committed to the following cross currency swaps:

												Fair Value / Carrying
Notional		Notional		Floating Rate Receivable								Amount of			Remaining
Amount NOK		Amount USD		Reference Rate		Margin			Fixed Rate Payable			Asset / (Liability)			Term (years)
	700,000		122,800		NIBOR		4.75	%		5.52	%		(30,501	)		0.8
	500,000		89,710		NIBOR		4.00	%		4.80	%		(23,843	)		1.1
	600,000		101,351		NIBOR		5.75	%		7.49	%		(24,732	)		2.1
	700,000		125,000		NIBOR		5.25	%		6.88	%		(35,766	)		2.3
	800,000		143,536		NIBOR		4.75	%		5.93	%		(38,898	)		3.1
	900,000		150,000		NIBOR		4.35	%		6.43	%		(34,620	)		3.7
	1,000,000		162,200		NIBOR		4.25	%		6.28	%		(33,031	)		4.1
													(221,391	)

Interest Rate Swap Agreements

As at December 31, 2014, the Company was committed to the following interest rate swap agreements related to its LIBOR-based debt and EURIBOR-based debt, whereby certain of the Company’s floating-rate debt were swapped with fixed-rate obligations:

	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		3,357,287		(342,772	)		5.8		3.5
U.S. Dollar-denominated interest rate swaps (3)	LIBOR		500,000		(17,150	)		0.8		3.1
EURIBOR-Based Debt:
Euro-denominated interest rate swaps (4) (5)	EURIBOR		284,993		(45,810	)		6.0		3.1
					(405,732	)

(1) Excludes the margins the Company pays on its variable-rate debt, which, as of December 31, 2014, ranged from 0.3% to 3.95%.

(2) 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.

(3) Interest rate swap with an aggregate principal amount of $180 million is being used to economically hedge expected interest payments on new debt that is planned to be outstanding from 2016 to 2028. The interest rate swap is subject to mandatory early termination in 2015 whereby the swap will be settled based on its fair value at that time. Interest rate swaps with an aggregate principal amount of $320 million are being used to economically hedge expected interest payments on new debt that is planned to be outstanding from 2016 to 2021. These interest rate swaps are subject to mandatory early termination in 2016 whereby the swaps will be settled based on their fair value at that time.

(4) Principal amount reduces monthly to 70.1 million Euros ($84.8 million) by the maturity dates of the swap agreements.

(5) Principal amount is the U.S. Dollar equivalent of 235.6 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, 2014
Derivatives not designated as a cash flow hedge:
Foreign currency contracts		—		—		—			(14,218	)		(4,189	)
Interest rate swap agreements		—		5,101		(22,656	)		(148,006	)		(240,171	)
Cross currency swap agreements		—		—		(1,835	)		(41,733	)		(177,822	)
Stock purchase warrants		—		9,314		—			—			—
		—		14,415		(24,491	)		(203,957	)		(422,182	)
As at December 31, 2013
Derivatives not designated as a cash flow hedge:
Foreign currency contracts		482		12		—			(1,819	)		(155	)
Interest rate swap agreements		21,779		69,785		(22,025	)		(140,503	)		(248,091	)
Cross currency swap agreements		779		—		3			(1,677	)		(51,324	)
		23,040		69,797		(22,022	)		(143,999	)		(299,570	)

Effect of Gain (Loss) on Derivatives Not Designated as Hedging Instruments

The effect of the gains and losses on derivatives not designated as hedging instruments in the consolidated statements of income (loss) are as follows:

	Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,
	2014			2013			2012
	$			$			$
Realized (losses) gains relating to:
Interest rate swap agreements		(125,424	)		(122,439	)		(123,277	)
Interest rate swap agreement terminations		(1,319	)		(35,985	)		—
Foreign currency forward contracts		(4,436	)		(2,027	)		1,155
Foinaven embedded derivative		—			—			11,452
		(131,179	)		(160,451	)		(110,670	)
Unrealized (losses) gains relating to:
Interest rate swap agreements		(86,045	)		182,800			26,770
Foreign currency forward contracts		(16,926	)		(3,935	)		6,933
Stock purchase warrants		2,475			—			—
Foinaven embedded derivative		—			—			(3,385	)
		(100,496	)		178,865			30,318
Total realized and unrealized (losses) gains on derivative instruments		(231,675	)		18,414			(80,352	)

Effect of Loss on Cross Currency Swaps

The effect of the loss on cross currency swaps on the consolidated statements of income (loss) is as follows:

	Year Ended December 31,
	2014			2013			2012
	$			$			$
Realized gain on partial termination of cross currency swap		—			6,800			—
Realized (losses) gains		(3,955	)		2,089			3,628
Unrealized (losses) gains		(167,334	)		(65,387	)		10,715
Total realized and unrealized (losses) gains on cross currency swaps		(171,289	)		(56,498	)		14,343

XML

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2014

Accounting Policies [Abstract]

Basis of presentation

Basis of presentation

These consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (or GAAP). They include the assets, liabilities, revenues and expenses of Teekay Corporation (or Teekay), which is incorporated under the laws of the Republic of The Marshall Islands, its wholly-owned subsidiaries and those non-wholly owned subsidiaries in which Teekay has a controlling financial interest (collectively, the Company). Certain of Teekay’s significant non-wholly owned subsidiaries are consolidated in these financial statements even though Teekay owns less than a 50% ownership interest in the subsidiaries. These significant subsidiaries include the following publicly traded subsidiaries (collectively, the Public Subsidiaries): Teekay LNG Partners L.P. (or Teekay LNG); Teekay Offshore Partners L.P. (or Teekay Offshore); and Teekay Tankers Ltd. (or Teekay Tankers). As of December 31, 2014, Teekay owned a 33.5% interest in Teekay LNG (35.3%—December 31, 2013), including common units and its 2% general partner interest, a 27.3% interest in Teekay Offshore (29.3%—December 31, 2013), including common units and its 2% general partner interest, and 26.2% of the capital stock of Teekay Tankers (25.1%—December 31, 2013), 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. While Teekay owns less than 50% of each of the Public Subsidiaries, Teekay maintains control of Teekay LNG and Teekay Offshore by virtue of its 100% ownership interest in the general partners of Teekay LNG and Teekay Offshore, which are both master limited partnerships, and maintains control of Teekay Tankers through its ownership of a sufficient number of Class A common shares and Class B common shares, which provide increased voting rights, to maintain a majority voting interest in Teekay Tankers and thus consolidates these subsidiaries. Significant intercompany balances and transactions have been eliminated upon consolidation. 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 through June 2015.

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.

In the current period, the Company has presented the conversion costs incurred at period end for the Company’s committed vessel conversions in Advances on newbuilding contracts and conversion costs on the consolidated balance sheets. Prior to 2014, the Company included these amounts in Vessels and equipment – At cost, less accumulated depreciation. All such costs incurred in comparative periods have been reclassified from Vessels and equipment – At cost, less accumulated depreciation to Advances on newbuilding contracts and conversion costs to conform to the presentation adopted in the current period. The amount reclassified as at December 31, 2013 was $29.8 million.

Non-Controlling Interests

Non-Controlling Interests

Where Teekay’s ownership interest in a consolidated subsidiary is less than 100%, the non-controlling interests’ share of these non-wholly owned subsidiaries are reported in the Company’s consolidated balance sheets as a separate component of equity. The non-controlling interests’ share of the net income (loss) of these non-wholly owned subsidiaries is reported in the Company’s consolidated statements of income (loss) as a deduction from the Company’s net income (loss) to arrive at net income (loss) attributable to shareholders of Teekay.

The basis for attributing net income (loss) of each non-wholly owned subsidiary to the controlling interest and the non-controlling interests, with the exception of Teekay LNG and Teekay Offshore, is based on the relative ownership interests of the non-controlling interests compared to the controlling interest, which is consistent with how dividends and distributions are paid or are payable for these non-wholly owned subsidiaries.

Teekay LNG and Teekay Offshore each have limited partners and one general partner. Both general partners are owned by Teekay. For Teekay LNG, the limited partners hold common units. For Teekay Offshore, the limited partners hold common units and preferred units. For each quarterly period, the method of attributing Teekay LNG’s and Teekay Offshore’s net income (loss) of that period to the non-controlling interests of Teekay LNG and Teekay Offshore begins by attributing net income (loss) of Teekay Offshore to the non-controlling interests which hold 100% of the preferred units of Teekay Offshore in an amount equal to the amount of preferred unit distributions declared for the quarterly period. The remaining net income (loss) to be attributed to the controlling interest and the non-controlling interests of Teekay LNG and Teekay Offshore is divided into two components. The first component consists of the cash distribution that Teekay LNG or Teekay Offshore will declare and pay to limited and general partners for that quarterly period (the Distributed Earnings). The second component consists of the difference between the net income (loss) of Teekay LNG or Teekay Offshore that is available to be allocated to the common unit holders and the general partner of such entity and the amount of the first component cash distribution (the Undistributed Earnings). The portion of the Distributed Earnings that is allocated to the non-controlling interests is the amount of the cash distribution that Teekay LNG or Teekay Offshore will declare and pay to the non-controlling interests for that quarterly period. The portion of the Undistributed Earnings that is allocated to the non-controlling interests is based on the relative ownership percentages of the non-controlling interests of Teekay LNG and Teekay Offshore compared to the controlling interest.

When Teekay’s non-wholly owned subsidiaries declare dividends or distributions to their owners, or require all of their owners to contribute capital to the non-wholly owned subsidiaries, such amounts are paid to, or received from, each of the owners of the non-wholly owned subsidiaries based on the relative ownership interests in the non-wholly owned subsidiary. As such, any dividends or distributions paid to, or capital contributions received from, the non-controlling interests are reflected as a reduction (dividends or distributions) or an increase (capital contributions) in non-controlling interest in the Company’s consolidated balance sheets.

When Teekay’s non-wholly owned subsidiaries issue additional equity interests to non-controlling interests, Teekay is effectively selling a portion of the non-wholly owned subsidiaries. Consequently, the proceeds received by the subsidiaries from their issuance of additional equity interests are allocated between non-controlling interest and retained earnings in the Company’s consolidated balance sheets. The portion allocated to non-controlling interest on the Company’s consolidated balance sheets consists of the carrying value of the portion of the non-wholly owned subsidiary that is effectively disposed of, with the remaining amount attributable to the controlling interest, which consists of the Company’s dilution gain or loss that is allocated to retained earnings.

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 income (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 proportionate performance method. The Company uses a discharge-to-discharge basis in determining proportionate performance 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 the fulfillment of the applicable performance criteria. Revenues and expenses relating to engineering studies are recognized when the 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 a 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.

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 their 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 was no significant amounts recorded as allowance for doubtful accounts as at December 31, 2014, 2013, and 2012.

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 significantly 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 25 years for FPSO units, 35 years for liquefied natural gas (or LNG) carriers 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, 2014, 2013, and 2012 aggregated $341.5 million, $346.5 million and $364.3 million, respectively. Amortization of vessels accounted for as capital leases was $21.6 million, $22.8 million and $30.1 million for the years ended December 31, 2014, 2013, and 2012, 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, 2014, 2013, and 2012, aggregated $51.3 million, $14.6 million and $34.9 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 costs those costs incurred as part of the dry docking 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.

The continuity of capitalized dry docking costs for the three years ended December 31, 2014, 2013, and 2012, is summarized as follows:

	Year Ended December 31,
	2014			2013			2012
	$			$			$
Balance at the beginning of the year		118,194			100,928			128,987
Costs incurred for dry dockings		74,018			72,545			35,336
Dry dock amortization		(50,926	)		(50,325	)		(57,082	)
Write down / sales of vessels		(5,955	)		(4,954	)		(6,313	)
Balance at the end of the year		135,331			118,194			100,928

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.

Vessels and equipment that are “held for sale” are measured at the lower of their carrying amount or fair value less costs to sell and are not depreciated while classified as held for sale. Interest and other expenses attributable to vessels and equipment classified as held for sale, or to their related liabilities, continue to be recognized as incurred.

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 four LNG carriers and an FSO unit on long-term time charters, 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 was amortized to interest income over the term of the loan using the effective interest rate method. The Company analyzes its loans for collectability 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 (when available) any information provided by the debtor regarding their ability to repay the loan and the fair value of the underlying collateral. 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 statements of income (loss). The carrying value of the loans will be adjusted each subsequent reporting period to reflect any changes in the present value of estimated future cash flows.

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, 2014.

			December 31,
			2014		2013
Class of Financing Receivable	Credit Quality Indicator	Grade	$		$
Direct financing leases	Payment activity	Performing		704,953		727,262
Other loan receivables
Investment in term loans and interest receivable	Collateral	Non-Performing(1)		—		211,579
Loans to equity-accounted investees and joint venture partners (2)	Other internal metrics Performing			253,426		169,248
Long-term receivable included in other assets	Payment activity	Performing		43,843		31,634
				1,002,222		1,139,723

(1) In March 2014, Teekay and Teekay Tankers took ownership of the vessels held as collateral in satisfaction of the loans and accrued interest. (See Note 4).

(2) The Company’s subsidiary Teekay LNG owns a 99% interest in Teekay Tangguh Borrower LLC (or Teekay Tangguh), which owns a 70% interest in the Teekay BLT Corporation (or the Teekay Tangguh Joint Venture), essentially giving Teekay LNG a 69% interest in the Teekay Tangguh Joint Venture. During the year ended December 31, 2012, the parent company of Teekay LNG‘s joint venture partner, BLT LNG Tangguh Corporation (or BLT), suspended trading on the Jakarta Stock Exchange and entered into a court-supervised debt restructuring in Indonesia. The remaining loans to BLT, totaling $1.8 million as at December 31, 2014 (December 31, 2013—$28.5 million), are considered to be collectible given a signed settlement agreement between the Company and BLT regarding repayment terms. In 2014, the Teekay Tangguh Joint Venture declared dividends of $87.1 million, of which $14.4 million was used to offset the advances made to BLT and P.T. Berlian Laju Tanker and $11.7 million was repaid to Teekay by BLT. In addition, $1.5 million was paid to Teekay by BLT as part of the settlement agreement.

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 statements of income (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 (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 income (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 income (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 income (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 income (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 income (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 (loss) gain 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 gain (loss) in the consolidated statements of income (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 acquired 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 the costs associated with the 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 to be received 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, 2014, the ARO and associated receivable, which is recorded in other non-current assets, were $25.0 million and $6.8 million, respectively (2013 - $27.2 million and $7.5 million, respectively).

Repurchase of common stock

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.

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.

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.

Accumulated other comprehensive income (loss)

Accumulated other comprehensive income (loss)

The following table contains the changes in the balances of each component of accumulated other comprehensive income (loss) attributable to shareholders of Teekay for the periods presented.

	Qualifying Cash Flow Hedging Instruments			Pension Adjustments			Unrealized (Loss) Gain on Available for Sale Marketable Securities			Foreign Exchange Loss on Currency Translation		Total
	$			$			$			$		$
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	)
Other comprehensive (loss) income		(324	)		(2,666	)		(171	)		740		(2,421	)
Balance as of December 31, 2013		17			(18,919	)		(171	)		1,884		(17,189	)
Other comprehensive (loss) income		(485	)		(10,969	)		171			174		(11,109	)
Balance as of December 31, 2014		(468	)		(29,888	)		—			2,058		(28,298	)

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.

Accounting Pronouncements Not Yet Adopted

Accounting Pronouncements Not Yet Adopted

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers. ASU 2014-09 will require companies to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. This update creates a five-step model that requires companies to exercise judgment when considering the terms of the contract(s) which include (i) identifying the contract(s) with the customer, (ii) identifying the separate performance obligations in the contract, (iii) determining the transaction price, (iv) allocating the transaction price to the separate performance obligations, and (v) recognizing revenue as each performance obligation is satisfied. ASU 2014-09 is effective for interim and annual periods beginning after December 15, 2016 and shall, at the Company’s option, be applied retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. Early adoption is not permitted. The Company is evaluating the effect of adopting this new accounting guidance.

In April 2014, the FASB issued ASU 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, which raises the threshold for disposals to qualify as discontinued operations. A discontinued operation is now defined as: (i) a component of an entity or group of components that has been disposed of or classified as held for sale and represents a strategic shift that has or will have a major effect on an entity’s operations and financial results; or (ii) an acquired business that is classified as held for sale on the acquisition date. ASU 2014-08 also requires additional disclosures regarding discontinued operations, as well as material disposals that do not meet the definition of discontinued operations. ASU 2014-08 is effective for fiscal years beginning on or after December 15, 2014, and interim periods within those years. Early adoption is permitted, but only for disposals (or classifications as held for sale) that have not been reported in the financial statements previously issued or available for issuance. The impact, if any, of adopting ASU 2014-08 on the Company’s financial statements will depend on the occurrence and nature of disposals that occur after ASU 2014-08 is adopted.

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Accrued Liabilities - Schedule of Accrued Liabilities (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Accrued Liabilities, Current [Abstract]
Voyage and vessel expenses	$ 163,155	$ 250,557
Interest	60,064	73,817
Payroll and benefits and other	100,606	91,369
Deferred revenue - current	66,027	49,486
Loan from affiliates	4,907	1,595
Accrued Liabilities	$ 394,759	$ 466,824

XML

Commitments and Contingencies - Additional Information - Purchase Obligations (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2014 Vessel
Teekay Tankers [Member] | Aframax tankers [Member]
Long-term Purchase Commitment [Line Items]
Aggregate purchase price	$ 37.0
Escrow fund	3.7
Teekay Tankers [Member] | Modern LR2 Vessels [Member]
Long-term Purchase Commitment [Line Items]
Number of vessels	4
Aggregate purchase price	193.3
Long Distance Towing And Offshore Installation [Member] | Teekay Offshore [Member]
Long-term Purchase Commitment [Line Items]
Number of vessels	6
Aggregate purchase price	$ 220.0
Long Distance Towing And Offshore Installation [Member] | Teekay Offshore [Member] | Delivery In the first and early second quarter of 2015 [Member]
Long-term Purchase Commitment [Line Items]
Number of vessels	4
Long Distance Towing And Offshore Installation [Member] | Teekay Offshore [Member] | Delivery in rest of Second Quarter of 2015 [Member]
Long-term Purchase Commitment [Line Items]
Number of vessels	2

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Vessel Sales, Asset Impairments and Provisions - Schedule of Assets and Liabilities Held for Sale (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Summary Of Assets And Liabilities Held For Sale [Line Items]
Total assets		$ 176,247
Accounts payable	85,290	98,415
Accrued liabilities	394,759	466,824
Current portion of long-term debt(note 8)	654,134	996,425
Long-term debt(note 8)	6,082,364	5,113,045
Total liabilities		168,007
Assets Held for Sale [Member]
Summary Of Assets And Liabilities Held For Sale [Line Items]
Accounts receivable		11,179
Prepaid expenses		1,220
Vessels and equipment		163,200
Other long-term assets		648
Total assets		176,247
Liabilities Associated With Assets Held For Sale [Member]
Summary Of Assets And Liabilities Held For Sale [Line Items]
Accounts payable		37
Accrued liabilities		3,362
Current portion of long-term debt(note 8)		11,698
Long-term debt(note 8)		152,910
Total liabilities		$ 168,007

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Income Taxes - Components of Provision for Income Taxes (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Income Tax Disclosure [Abstract]
Current	$ (6,460)	$ 2,742	$ 9,167
Deferred	(3,713)	(5,614)	5,239
Income tax (expense) recovery	$ (10,173)	$ (2,872)	$ 14,406

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Investment in Term Loans - Additional Information (Detail) (USD $)	12 Months Ended			1 Months Ended	3 Months Ended	1 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Mar. 31, 2014 Vessel	Mar. 31, 2014	Jul. 31, 2010 Term_loan	May 31, 2014	Feb. 28, 2011
Net Investment Income [Line Items]
Repayment premium included in investment in term loans		$ 3,400,000
Interest income from loans		11,200,000
Gain (loss) on sale of assets	13,509,000	1,995,000	(6,975,000)
VLCC [Member]
Net Investment Income [Line Items]
Interest income from loans				11,200,000	11,200,000
Number of vessels	3			3
Estimated aggregate fair value of vessels				222,000,000	222,000,000
Interest income recognized					15,200,000
Sold Asset [Member]
Net Investment Income [Line Items]
Number of vessels			3
Teekay Tankers [Member]
Net Investment Income [Line Items]
Term loan						115,600,000
Interest rate on term loan						9.00%
Acquired term loans						2
Principal amount outstanding of term loan						115,000,000
Investment yield						10.00%
Investment, Interest Rate Reflects Current Yield Flag						true
Debt instrument collateral, description	The TNK Loans were collateralized by first-priority mortgages on two 2010-built VLCCs, together with other related security.
Teekay Tankers [Member] | VLCC [Member]
Net Investment Income [Line Items]
Gain (loss) on sale of assets	10,000,000
Aggregate proceeds received							154,000,000
Teekay Tankers [Member] | Sold Asset [Member]
Net Investment Income [Line Items]
Number of vessels							2
Loans receivable [Member]
Net Investment Income [Line Items]
Term loan								70,000,000
Interest rate on term loan								9.00%
Accrued and unpaid interest on loans		$ 10,700,000

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Operating and Direct Financing Leases - Charter-out - Additional Information (Detail) (USD $)	Dec. 31, 2014	Dec. 31, 2013
Property Subject to or Available for Operating Lease [Line Items]
Carrying amount of the vessels accounted for as operating leases	$ 6,800,000,000	$ 6,400,000,000
Cost of the vessels	8,900,000,000	8,200,000,000
Accumulated depreciation of the vessels	2,100,000,000	1,800,000,000
Charters Out [Member]
Property Subject to or Available for Operating Lease [Line Items]
Minimum scheduled future revenues to be received by the company	10,200,000,000
Minimum scheduled future revenues to be received by the company in current year	1,400,000,000
Minimum scheduled future revenues to be received by the company in second year	1,300,000,000
Minimum scheduled future revenues to be received by the company in third year	1,300,000,000
Minimum scheduled future revenues to be received by the company in fourth year	1,200,000,000
Minimum scheduled future revenues to be received by the company in fifth year	1,100,000,000
Minimum scheduled future revenues to be received by the company thereafter	$ 4,000,000,000

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Summary of Significant Accounting Policies - Schedule of Accumulated Other Comprehensive Income (Loss) (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated other comprehensive income (Loss), Beginning balance	$ (17,189)	$ (14,768)	$ (23,903)
Other comprehensive income (Loss)	(11,109)	(2,421)	9,135
Accumulated other comprehensive income (Loss), Ending balance	(28,298)	(17,189)	(14,768)
Qualifying Cash Flow Hedging Instruments [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated other comprehensive income (Loss), Beginning balance	17	341	(306)
Other comprehensive income (Loss)	(485)	(324)	647
Accumulated other comprehensive income (Loss), Ending balance	(468)	17	341
Pension Adjustments [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated other comprehensive income (Loss), Beginning balance	(18,919)	(16,253)	(22,941)
Other comprehensive income (Loss)	(10,969)	(2,666)	6,688
Accumulated other comprehensive income (Loss), Ending balance	(29,888)	(18,919)	(16,253)
Unrealized (Loss) Gain on Available for Sale Marketable Securities [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated other comprehensive income (Loss), Beginning balance	(171)		(656)
Other comprehensive income (Loss)	171	(171)	656
Accumulated other comprehensive income (Loss), Ending balance		(171)
Foreign Exchange Loss on Currency Translation [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated other comprehensive income (Loss), Beginning balance	1,884	1,144
Other comprehensive income (Loss)	174	740	1,144
Accumulated other comprehensive income (Loss), Ending balance	$ 2,058	$ 1,884	$ 1,144

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Derivative Instruments and Hedging Activities - Commitment of Foreign Currency Forward Contracts (Detail) In Thousands, unless otherwise specified	Dec. 31, 2014 USD ($)	Dec. 31, 2014 Norwegian Kroner [Member] USD ($)	Dec. 31, 2014 Norwegian Kroner [Member] Foreign currency forward contracts [Member] NOK
Derivative [Line Items]
Contract Amount in Foreign Currency			861,000
Average Forward Rate		6.44
Fair Value / Carrying Amount of Asset (Liability)	(18,407)	(18,407)
Expected Maturity Amount of Foreign Currency Derivatives in Next Fiscal Year	91,400	91,400
Expected Maturity Amount of Foreign Currency Derivatives in Year Two	$ 42,253	$ 42,253

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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, 2014	Dec. 31, 2013	Dec. 31, 2012
Effective Income Tax Rate Reconciliation, Amount [Abstract]
Net income (loss) before income taxes	$ 134,175	$ 38,352	$ (325,522)
Net loss not subject to taxes	(80,454)	(267,665)	(129,307)
Net (loss) income subject to taxes	214,629	306,017	(196,215)
At applicable statutory tax rates	39,382	12,719	(15,808)
Permanent and currency differences, adjustments to valuation allowances and uncertain tax positions	(28,027)	(8,173)	(2,817)
Other	(1,182)	(1,674)	4,219
Tax expense (recovery) related to the current year	$ 10,173	$ 2,872	$ (14,406)

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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, 2014	Dec. 31, 2013
Goodwill [Line Items]
Goodwill, Beginning balance	$ 166,539	$ 166,539
Goodwill acquired	2,032
Goodwill, Ending balance	168,571	166,539
Shuttle Tanker, FSO and Offshore Support Segment [Member]
Goodwill [Line Items]
Goodwill, Beginning balance	130,908	130,908
Goodwill acquired	2,032
Goodwill, Ending balance	132,940	130,908
Liquefied Gas Segment [Member]
Goodwill [Line Items]
Goodwill, Beginning balance		35,631
Goodwill acquired
Goodwill, Ending balance	$ 35,631	$ 35,631

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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, 2014	Dec. 31, 2013	Feb. 29, 2012	Oct. 31, 2014	Nov. 30, 2011
Schedule of Equity Method Investments [Line Items]
Equity method investment, ownership interest	16.05%
Investment in equity accounted investments	$ 873,421	$ 690,309
Long-term Loans to equity accounted investees	251,580	140,772
Equity Method Investments [Member]
Schedule of Equity Method Investments [Line Items]
Equity method investment, ownership interest	50.00%
Investment in equity accounted investments	19,551	20,489
Long-term Loans to equity accounted investees	28,201	19,570
China Lng [Member]
Schedule of Equity Method Investments [Line Items]
Equity method investment, ownership interest	50.00%
Long-term Loans to equity accounted investees	97,157
Exmar LPG BVBA [Member]
Schedule of Equity Method Investments [Line Items]
Equity method investment, ownership interest	50.00%
Investment in equity accounted investments	126,690	82,576
Long-term Loans to equity accounted investees	82,677	82,068
Tiro and Sidon [Member]
Schedule of Equity Method Investments [Line Items]
Equity method investment, ownership interest	50.00%
Investment in equity accounted investments	54,540	52,118
Long-term Loans to equity accounted investees	18,006	12,781
Teekay LNG-Marubeni Joint Venture [Member]
Schedule of Equity Method Investments [Line Items]
Equity method investment, ownership interest	52.00%		52.00%
Long-term Loans to equity accounted investees	11,039	10,274
Malt Joint Venture [Member]
Schedule of Equity Method Investments [Line Items]
Equity method investment, ownership interest	52.00%
Investment in equity accounted investments	263,446	228,183
RasGas 3 [Member]
Schedule of Equity Method Investments [Line Items]
Equity method investment, ownership interest	40.00%
Investment in equity accounted investments	141,866	125,648
Exmar [Member]
Schedule of Equity Method Investments [Line Items]
Equity method investment, ownership interest	50.00%
Investment in equity accounted investments	97,037	86,387
Tanker Investments Limited [Member]
Schedule of Equity Method Investments [Line Items]
Equity method investment, ownership interest	16.00%			8.94%
Investment in equity accounted investments	63,715
Angola Joint Venture [Member]
Schedule of Equity Method Investments [Line Items]
Equity method investment, ownership interest	33.00%
Investment in equity accounted investments	50,887	54,168
Sevan Marine [Member]
Schedule of Equity Method Investments [Line Items]
Equity method investment, ownership interest	43.00%	43.00%			40.00%
Investment in equity accounted investments	34,985	40,740
BG Joint Venture [Member]
Schedule of Equity Method Investments [Line Items]
Investment in equity accounted investments	20,704
SkaugenPetroTrans [Member]
Schedule of Equity Method Investments [Line Items]
Equity method investment, ownership interest	50.00%
Long-term Loans to equity accounted investees	$ 14,500	$ 16,079
Minimum [Member] | Equity Method Investments [Member]
Schedule of Equity Method Investments [Line Items]
Equity method investment, ownership interest	16.00%
Minimum [Member] | BG Joint Venture [Member]
Schedule of Equity Method Investments [Line Items]
Equity method investment, ownership interest	20.00%
Maximum [Member] | Equity Method Investments [Member]
Schedule of Equity Method Investments [Line Items]
Equity method investment, ownership interest	50.00%
Maximum [Member] | BG Joint Venture [Member]
Schedule of Equity Method Investments [Line Items]
Equity method investment, ownership interest	30.00%

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Long-Term Debt - Additional Information - Term Loans (Detail) In Thousands, unless otherwise specified			12 Months Ended
	Dec. 31, 2014 USD ($)	Dec. 31, 2013 USD ($)	Dec. 31, 2014 Euro-denominated Term Loans due through 2023 [Member] USD ($) Term_loan	Dec. 31, 2014 Euro-denominated Term Loans due through 2023 [Member] EUR (€) Term_loan	Dec. 31, 2013 Euro-denominated Term Loans due through 2023 [Member] USD ($)	Dec. 31, 2013 Euro-denominated Term Loans due through 2023 [Member] EUR (€)	Dec. 31, 2014 Euro-denominated Term Loans due through 2023 [Member] One-month EURIBOR [Member]	Dec. 31, 2013 Euro-denominated Term Loans due through 2023 [Member] One-month EURIBOR [Member]
Debt Instrument [Line Items]
Number of debt instruments			2	2
Reference rate on variable rate of the debt instrument			EURIBOR	EURIBOR
Long-term Debt	$ 6,736,498	$ 6,109,470	$ 284,993	€ 235,600	$ 340,221	€ 247,600
Debt instrument variable interest rate			0.60%	0.60%	2.25%	2.25%
Debt instrument interest							0.02%	0.20%
Debt instrument collateral, description			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.	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.

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Pension Benefits - Fair Value of Plan Assets (Parenthetical) (Detail)	Dec. 31, 2014
Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract]
Growth oriented assets	70.00%
Defensive assets	30.00%

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Equity Accounted Investments - Condensed Summary of Company's Investments in and Advances to Joint Ventures (Parenthetical) (Detail) (Teekay BLT Corporation [Member], Teekay Tangguh Borrower LLC [Member], USD $) In Millions, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Teekay BLT Corporation [Member] | Teekay Tangguh Borrower LLC [Member]
Schedule of Equity Method Investments [Line Items]
Loans to joint venture partners carrying value	$ 1.8	$ 28.5

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Long-Term Debt - Additional Information - Revolvers (Detail) (USD $) Share data in Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Debt Instrument [Line Items]
Amount reduced under revolving credit facility in 2015	654,100,000
Amount reduced under revolving credit facility in 2016	797,100,000
Amount reduced under revolving credit facility in 2017	1,100,000,000
Amount reduced under revolving credit facility in 2018	1,600,000,000
Amount reduced under revolving credit facility in 2019	744,600,000
Minimum [Member]
Debt Instrument [Line Items]
Debt instrument interest	0.00%	0.00%
Maximum [Member]
Debt Instrument [Line Items]
Debt instrument interest	8.00%	8.00%
Teekay Offshore [Member] | Securities Pledged as Collateral [Member]
Debt Instrument [Line Items]
Number of other securities collateralized by first-priority mortgages	23.8
Teekay LNG [Member] | Securities Pledged as Collateral [Member]
Debt Instrument [Line Items]
Number of other securities collateralized by first-priority mortgages	25.2
Revolving Credit Facilities [Member]
Debt Instrument [Line Items]
Number of credit facilities	13
Aggregate borrowings	2,400,000,000
Undrawn amount of revolving credit facility	600,000,000
Reference rate on variable rate of the debt instrument	LIBOR
Debt instrument interest	0.26%	0.25%
Amount reduced under revolving credit facility in 2015	382,200,000
Amount reduced under revolving credit facility in 2016	506,200,000
Amount reduced under revolving credit facility in 2017	529,700,000
Amount reduced under revolving credit facility in 2018	895,200,000
Amount reduced under revolving credit facility in 2019	49,500,000
Debt instrument collateral, description	The Revolvers are collateralized by first-priority mortgages granted on 51 of the Company’s vessels, together with other related security, and include a guarantee from Teekay or its subsidiaries for all outstanding amounts.
Secured revolving credit facility	500,000,000
Revolving Credit Facilities [Member] | Minimum [Member]
Debt Instrument [Line Items]
Percentage of margin	0.45%	0.45%
Revolving Credit Facilities [Member] | Maximum [Member]
Debt Instrument [Line Items]
Percentage of margin	3.95%	4.50%
Revolving Credit Facilities [Member] | Teekay Offshore and Teekay LNG [Member]
Debt Instrument [Line Items]
Aggregate borrowings	473,500,000

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Long-Term Debt - Additional Information - Other (Detail) (USD $)	12 Months Ended
	Dec. 31, 2014 SecurityLoan	Dec. 31, 2013	Dec. 31, 2012
Debt Instrument [Line Items]
Interest at a weighted-average fixed rate	3.20%	3.00%
Unrealized foreign exchange gain (loss)	$ 13,431,000	$ (13,304,000)	$ (12,898,000)
Long-term Debt	6,736,498,000	6,109,470,000
Number of loan agreement	6
Minimum level of free cash be maintained as per loan agreements	100,000,000	100,000,000
Amount of free liquidity and undrawn revolving credit line	368,100,000	344,900,000
Amount reduced under revolving credit facility in first year	654,100,000
Amount reduced under revolving credit facility in second year	797,100,000
Amount reduced under revolving credit facility in third year	1,100,000,000
Amount reduced under revolving credit facility in fourth year	1,600,000,000
Amount reduced under revolving credit facility in fifth year	744,600,000
Amount reduced under revolving credit facility thereafter	1,800,000,000
Minimum [Member]
Debt Instrument [Line Items]
Vessel market value to loan ratio	137.40%
Vessel market value to loan minimum required ratio	105.00%
Free liquidity and undrawn revolving credit line as percentage of debt	5.00%
Revolving credit lines maturity period	6 months
Maximum [Member]
Debt Instrument [Line Items]
Vessel market value to loan ratio	675.60%
Vessel market value to loan minimum required ratio	130.00%
Free liquidity and undrawn revolving credit line as percentage of debt	7.50%
U.S. Dollar-denominated Unsecured Demand Loans due to Joint Venture Partners [Member] | Teekay Nakilat Corporation [Member]
Debt Instrument [Line Items]
Long-term Debt		$ 13,282,000

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Goodwill, Intangible Assets and In-Process Revenue Contracts - Additional Information (Detail) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Mar. 14, 2014
Finite-Lived Intangible Assets [Line Items]
Aggregate amortization expense	$ 13,200,000	$ 18,200,000	$ 17,200,000
Amortization of intangible assets, 2015	11,900,000
Amortization of intangible assets, 2016	10,900,000
Amortization of intangible assets, 2017	9,800,000
Amortization of intangible assets, 2018	8,900,000
Amortization of intangible assets, 2019	8,900,000
Amortization of intangible assets, thereafter	44,300,000
Amortization of in-process revenue	(40,939,000)	(61,700,000)	(72,933,000)
Teekay LNG [Member] | Newbuildings [Member]
Finite-Lived Intangible Assets [Line Items]
Number of vessels	4
ALP Maritime Services B.V [Member] | Teekay Offshore [Member]
Finite-Lived Intangible Assets [Line Items]
Percentage of ownership acquired				100.00%
BG Joint Venture [Member] | Teekay LNG [Member] | Shipbuilding supervision and crew training services [Member] | Newbuildings [Member]
Finite-Lived Intangible Assets [Line Items]
Number of vessels	4
Teekay Petrojarl and Omi Corporation [Member]
Finite-Lived Intangible Assets [Line Items]
Amortization of in-process revenue	40,900,000	61,700,000	72,900,000
Amortization of in-process revenue contracts, 2015	22,800,000
Amortization of in-process revenue contracts, 2016	29,600,000
Amortization of in-process revenue contracts, 2017	32,700,000
Amortization of in-process revenue contracts, 2018	22,200,000
Amortization of in-process revenue contracts, 2019	14,900,000
Amortization of in-process revenue contracts, thereafter	$ 51,200,000

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Investments - Teekay LNG Exmar LPG BVBA Joint Venture - Additional Information (Detail) (USD $)	12 Months Ended			1 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Feb. 28, 2013
Net Investment Income [Line Items]
Percentage of ownership	16.05%
Investments in joint venture	$ 79,602,000	$ 157,762,000	$ 183,554,000
Newbuildings [Member] | Teekay LNG [Member]
Net Investment Income [Line Items]
Percentage of ownership	33.00%
Exmar LPG BVBA [Member]
Net Investment Income [Line Items]
Percentage of ownership	50.00%
Exmar LPG BVBA [Member] | Teekay LNG [Member]
Net Investment Income [Line Items]
Number of vessels	20
Percentage of ownership	50.00%
Investments in joint venture				133,100,000
Excess of book value of net assets acquired				(6,000,000)
Exmar LPG BVBA [Member] | Newbuildings [Member] | Teekay LNG [Member]
Net Investment Income [Line Items]
Number of vessels	9
Exmar LPG BVBA [Member] | Charters-in [Member] | Teekay LNG [Member]
Net Investment Income [Line Items]
Number of vessels	4
Pro Rata Share [Member] | Exmar LPG BVBA [Member] | Secured debt [Member] | Teekay LNG [Member]
Net Investment Income [Line Items]
Pro rata share of existing debt and lease obligations				$ 108,000,000

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Supplemental Cash Flow Information

12 Months Ended

Dec. 31, 2014

Supplemental Cash Flow Elements [Abstract]

Supplemental Cash Flow Information

17. Supplemental Cash Flow Information

a) The changes in operating assets and liabilities for the years ended December 31, 2014, 2013, and 2012, are as follows:

	Year Ended December 31,
	2014			2013			2012
Accounts receivable		136,660			(77,837	)		(132,873	)
Prepaid expenses and other assets		(1,618	)		(2,386	)		19,741
Accounts payable		(17,643	)		(10,877	)		18,408
Accrued and other liabilities		(56,768	)		155,284			(20,485	)
		60,631			64,184			(115,209	)

b) Cash interest paid, including realized interest rate swap settlements, during the years ended December 31, 2014, 2013, and 2012, totaled $328.2 million, $282.4 million and $274.2 million, respectively. In addition, during the years ended December 31, 2014, 2013, and 2012, cash interest paid relating to interest rate swap amendments and terminations totaled $1.3 million, $36.0 million and $nil, respectively.

c) During 2014, the Company took ownership of three VLCCs, which were collateral for all amounts owing under the investment in term loans, and the investment in term loans was concurrently discharged. The VLCCs had an estimated aggregate fair value of $222.0 million on this date, which approximated all the amounts owing under the investment in term loans. During the first quarter of 2014, second-hand vessel values for VLCCs increased and, as a result, the Company recognized $15.2 million of interest income owing under the investment in term loans in the first quarter of 2014. The assumption of ownership of the VLCCs and concurrent discharge of the loans has been treated as a non-cash transaction in the Company’s consolidated statement of cash flows.

d) As described in Note 3c, during 2014, Teekay LNG acquired BG’s ownership interest in the BG Joint Venture. As compensation, Teekay LNG assumed BG’s obligation (net of an agreement by BG to pay Teekay LNG approximately $20.3 million) to provide shipbuilding supervision and crew training services for the four LNG carrier newbuildings up to their delivery dates pursuant to a ship construction support agreement. The estimated fair value of the assumed obligation of approximately $33.3 million was used to offset the purchase price and Teekay LNG’s receivable from BG and was treated as a non-cash transaction in the Company’s consolidated statement of cash flows.

e) During 2014, Teekay LNG acquired an LPG carrier, the Norgas Napa, from Skaugen for $27.0 million, of which $21.6 million was paid in cash upon delivery and the remaining $5.4 million is an interest-bearing loan to Skaugen.

f) As described in Note 10, during 2014 and 2013 the sales of the Tenerife Spirit, Huelva Spirit, and Algeciras Spirit conventional tankers resulted in the vessels under capital leases being returned to the owner and the capital lease obligations being concurrently extinguished. Therefore, the sales of the Algeciras Spirit and Huelva Spirit under capital lease of $56.2 million in 2014 and the sale of the Tenerife Spirit under capital lease of $29.7 million in 2013 and the concurrent extinguishment of the corresponding capital lease obligations of $56.2 million in 2014 and $29.7 million in 2013 were treated as non-cash transactions in the Company’s consolidated statements of cash flows.

g) During 2013, Teekay LNG acquired two LNG carriers from Awilco for a purchase price of $205.0 million per vessel. The upfront prepayment of charter hire of $51.0 million (inclusive of a $1.0 million upfront fee) per vessel was used to offset the purchase price and was treated as a non-cash transaction in the consolidated statements of cash flows.

h) During 2014, the portion of dividends declared by the Teekay Tangguh Joint Venture that was used to settle the advances made to BLT LNG Tangguh Corporation and P.T. Berlian Laju Tanker of $14.4 million was treated as a non-cash transaction in the consolidated statements of cash flows.

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Pension Benefits - Components of Net Periodic Pension Cost Relating to Benefit Plans (Detail) (Net period pension cost [Member], USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Net period pension cost [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 8,800	$ 9,768	$ 9,921
Interest cost	4,975	4,974	4,392
Expected return on plan assets	(5,333)	(5,688)	(5,270)
Amortization of net actuarial loss	7,148	1,484	1,980
Plan settlement	(3,332)	973
Other	557	425	577
Net cost	$ 12,815	$ 11,936	$ 11,600

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2014

Income Tax Disclosure [Abstract]

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,			December 31,
	2014			2013
	$			$
Deferred tax assets:
Vessels and equipment		43,268			73,750
Tax losses carried forward(1)		360,547			427,656
Other		28,973			32,012
Total deferred tax assets		432,788			533,418
Deferred tax liabilities:
Vessels and equipment		12,514			19,555
Long-term debt		2,295			22,008
Other		19,954			30,519
Total deferred tax liabilities		34,763			72,082
Net deferred tax assets		398,025			461,336
Valuation allowance		(385,431	)		(442,504	)
Net deferred tax assets		12,594			18,832

(1) Substantially all of the Company’s net operating loss carryforwards of $1.46 billion relate primarily to its Norwegian, U.K., and Spanish subsidiaries and, to a lesser extent, to its Australian ship-owning subsidiaries. These net operating loss carryforwards are available to offset future taxable income in the respective jurisdictions, and can be carried forward indefinitely. The Company also has $47.0 million in disallowed finance costs that relate to its Spanish subsidiaries and are available to offset future finance costs and can be carried forward for 18 years.

Components of Provision for Income Taxes

The components of the provision for income taxes are as follows:

	Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,
	2014			2013			2012
	$			$			$
Current		(6,460	)		2,742			9,167
Deferred		(3,713	)		(5,614	)		5,239
Income tax (expense) recovery		(10,173	)		(2,872	)		14,406

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			Year Ended			Year Ended
	December 31, 2014			December 31, 2013			December 31, 2012
	$			$			$
Net loss before taxes		134,175			38,352			(325,522	)
Net loss not subject to taxes		(80,454	)		(267,665	)		(129,307	)
Net (loss) income subject to taxes		214,629			306,017			(196,215	)
At applicable statutory tax rates		39,382			12,719			(15,808	)
Permanent and currency differences, adjustments to valuation allowances and uncertain tax positions		(28,027	)		(8,173	)		(2,817	)
Other		(1,182	)		(1,674	)		4,219
Tax expense (recovery) related to the current year		10,173			2,872			(14,406	)

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, 2012 to December 31, 2014:

	Year ended			Year ended			Year ended
	December 31,			December 31,			December 31,
	2014			2013			2012
	$			$			$
Balance of unrecognized tax benefits as at January 1		20,304			29,364			39,804
Increases for positions related to the current year		3,643			1,141			4,560
Changes for positions taken in prior years		1,015			(1,284	)		(5,085	)
Decreases related to statute of limitations		(4,627	)		(8,917	)		(9,915	)
Balance of unrecognized tax benefits as at December 31		20,335			20,304			29,364

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Capital Lease Obligations and Restricted Cash (Tables)

12 Months Ended

Dec. 31, 2014

Text Block [Abstract]

Capital Lease Obligations

Capital Lease Obligations

	December 31,		December 31,
	2014		2013
	$		$
RasGas II LNG Carriers		—		472,806
Suezmax Tankers		63,550		125,523
Total		63,550		598,329
Less current portion		4,422		31,668
Long-term portion		59,128		566,661

Schedule of Repayments of Capital Leases Including Imputed Interest

As at December 31, 2014, the remaining commitments under the two capital leases, including the purchase obligations for the two Suezmax tankers, approximated $73.7 million, including imputed interest of $10.2 million, repayable from 2015 through 2018, as indicated below:

Year	Commitment
2015	$	7,790
2016	$	7,673
2017	$	30,953
2018	$	27,296

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Financing Transactions - Additional Information (Detail) (USD $) Share data in Millions, except Per Share data, unless otherwise specified	12 Months Ended			0 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Aug. 01, 2014 Pools	May 02, 2013
Subsidiary or Equity Method Investee [Line Items]
Equity method investment, ownership interest	16.05%
Amount increases to retained earnings	$ 68,428,000	$ 36,703,000	$ 88,727,000
Voyageur Spirit [Member]
Subsidiary or Equity Method Investee [Line Items]
Business acquisition, purchase price		503,100,000
Conventional Tanker Commercial Operations and Technical Management Operations [Member]
Subsidiary or Equity Method Investee [Line Items]
Business acquisition, purchase price				23,500,000
Common units outstanding	87.8
Equity method investment, ownership interest				50.00%
Commercially managed tanker pools				3
Value of the assets acquired, including working capital	16,900,000
Conventional Tanker Commercial Operations and Technical Management Operations [Member] | Reimbursed working capital [Member]
Subsidiary or Equity Method Investee [Line Items]
Business acquisition, purchase price	6,500,000
Common Class B [Member] | Conventional Tanker Commercial Operations and Technical Management Operations [Member]
Subsidiary or Equity Method Investee [Line Items]
Number of common shares issued for acquisition	4.2
Value of common shares issued for acquisition	17,000,000
Common share price per share, acquisition closing date	$ 4.03
Initial [Member] | Common Class B [Member] | Conventional Tanker Commercial Operations and Technical Management Operations [Member]
Subsidiary or Equity Method Investee [Line Items]
Value of common shares issued for acquisition	15,600,000
Common share price per share, acquisition closing date	$ 3.70
Teekay Offshore [Member]
Subsidiary or Equity Method Investee [Line Items]
Business acquisition, debt assumed					230,000,000
Business acquisition, cash paid					253,000,000
Interest of Company's general partner					2.00%
Business acquisition, value of common units					44,300,000
Business acquisition, fair value of common units					40,000,000
Common units outstanding					83.6
Teekay Offshore [Member] | Initial [Member] | Voyageur Spirit [Member]
Subsidiary or Equity Method Investee [Line Items]
Business acquisition, purchase price					$ 540,000,000

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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, 2014
Leases [Abstract]
Commitment, 2015	$ 7,790
Commitment, 2016	7,673
Commitment, 2017	30,953
Commitment, 2018	$ 27,296

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Financing Transactions (Tables)

12 Months Ended

Dec. 31, 2014

Equity [Abstract]

Summary of Proceeds Received from Financial Transactions

During the years ended December 31, 2014, 2013, and 2012, 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 $(1)			Offering Expenses $			Net Proceeds Received $
2014
Teekay Offshore Continuous Offering Program		7,784		(156	)		(153	)		7,475
Teekay Offshore Direct Equity Placement		178,569		(3,571	)		(75	)		174,923
Teekay LNG Public Offering		140,784		(2,816	)		(299	)		137,669
Teekay LNG Continuous Offering Program		42,556		(851	)		(901	)		40,804
Teekay Tankers Public Offering		116,000		(20,000	)		(4,810	)		91,190
2013
Teekay Offshore Direct Equity Placements		115,688		(2,314	)		(188	)		113,186
Teekay Offshore Preferred Units Offering		150,000		—			(5,200	)		144,800
Teekay Offshore Continuous Offering Program		2,819		(59	)		(449	)		2,311
Teekay LNG Continuous Offering Program		5,383		(107	)		(457	)		4,819
Teekay LNG Direct Equity Placement		40,816		(816	)		(40	)		39,960
Teekay LNG Public Offering		150,040		(3,001	)		(5,222	)		141,817
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

(1) Consists of the portion Teekay subscribed for in the public offering or equity placement.

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Equity Accounted Investments (Tables)

12 Months Ended

Dec. 31, 2014

Equity Method Investments and Joint Ventures [Abstract]

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 investees are as follows (in thousands of U.S. dollars, except percentages):

				As at December 31,
	Ownership			2014		2013
Investments in Equity-accounted Investees	Percentage			$		$
Malt Joint Venture (note 3h)		52	%		263,446		228,183
RasGas 3 Joint Venture		40	%		141,866		125,648
Exmar LPG Joint Venture (note 3g)		50	%		126,690		82,576
Exmar Joint Venture		50	%		97,037		86,387
TIL (note 3e)		16	%		63,715		—
Tiro and Sidon Joint Venture		50	%		54,540		52,118
Angola Joint Venture		33	%		50,887		54,168
Sevan Marine Equity Investment (note 3f)		43	%		34,985		40,740
BG (note 3c)		20%-30	%		20,704		—
Other		50	%		19,551		20,489
Total					873,421		690,309

	Ownership		As at December 31,
Loans to Equity-accounted Investees	Percentage		2014		2013
Yamal LNG Joint Venture (note 3b)		50%		97,157		—
Exmar LPG Joint Venture (note 3g)		50%		82,677		82,068
Tiro and Sidon Joint Venture		50%		18,006		12,781
SkaugenPetroTrans Joint Venture		50%		14,500		16,079
Teekay LNG-Marubeni Joint Venture (note 3h)		52%		11,039		10,274
Other		16%-50%		28,201		19,570
Total				251,580		140,772

(1) The Company also has loans to joint venture partners of $1.8 million as at December 31, 2014 (2013—$28.5 million).

Condensed Summary of Company's Financial Information for Joint Venture

A condensed summary of the Company’s financial information for equity-accounted investments (16% to 52% owned) shown on a 100% basis are as follows:

	As at December 31,
	2014(1)		2013(2)
Cash and restricted cash		434,833		323,065
Other assets- current		249,882		165,919
Vessels and equipment		3,345,590		2,496,086
Net investment in direct financing leases		1,873,803		1,907,458
Other assets—non-current		150,618		302,255
Current portion of long-term debt and obligations under capital lease		526,097		501,683
Other liabilities—current		217,180		216,659
Long-term debt and obligations under capital lease		2,958,698		2,973,170
Other liabilities—non-current		459,907		256,465

	Year ended December 31,
	2014(1)			2013(2)		2012(3)(4)
Revenues		998,655			940,156		659,030
Income from vessel operations		454,135			328,430		241,702
Realized and unrealized (loss) gain on derivative instruments		(58,884	)		16,334		(56,307	)
Net income		300,837			288,550		120,395

Certain of the comparative figures have been adjusted to conform to the presentation adopted in the current year.

(1) The results included for TIL are from the date of incorporation in January 2014.

(2) The results included for the Exmar LPG BVBA are from the date of acquisition in February 2013.

(3) The results included for the Teekay LNG-Marubeni Joint Venture are from the date of acquisition of the MALT LNG Carriers, which were acquired in February 2012.

(4) 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.

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Investments - Teekay Offshore Acquisition of ALP Maritime Services B.V. - Additional Information (Detail) (USD $)	12 Months Ended			0 Months Ended		1 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	May 02, 2013	Mar. 14, 2014	Mar. 14, 2014
Net Investment Income [Line Items]
General and administrative	$ 140,917,000	$ 140,958,000	$ 144,296,000
Revenue	1,993,920,000	1,830,085,000	1,980,771,000
Net loss	124,002,000	35,480,000	(311,116,000)
Newbuildings [Member]
Net Investment Income [Line Items]
Expected cost of project	2,800,000,000
ALP Maritime Services B.V [Member]
Net Investment Income [Line Items]
Revenue	500,000
Net loss	(2,300,000)
Teekay Offshore [Member]
Net Investment Income [Line Items]
Purchase price paid in cash				253,000,000
Teekay Offshore [Member] | Long Distance Towing And Offshore Installation [Member]
Net Investment Income [Line Items]
Number of vessels	6
Teekay Offshore [Member] | ALP Maritime Services B.V [Member]
Net Investment Income [Line Items]
Percentage of ownership acquired					100.00%	100.00%
Expected cost of project					258,000,000
Purchase price paid in cash					2,616,000	2,616,000
Business Combination, Contingent Consideration Arrangements, Description	Teekay Offshore has the option to pay up to 50% of this compensation through the issuance of common units of Teekay Offshore. Each of the contingent compensation amounts are payable only if the three former shareholders are employed by ALP at the time the performance conditions are met.
General and administrative	500,000
Acquisition and success fee	1,000,000
Teekay Offshore [Member] | ALP Maritime Services B.V [Member] | Majority Shareholder [Member]
Net Investment Income [Line Items]
Number of shareholders					3	3
Teekay Offshore [Member] | ALP Maritime Services B.V [Member] | Delivered [Member] | Majority Shareholder [Member]
Net Investment Income [Line Items]
Contingent consideration payable					2,400,000	2,400,000
Teekay Offshore [Member] | ALP Maritime Services B.V [Member] | Contingent Consideration On Operating Results [Member] | Majority Shareholder [Member]
Net Investment Income [Line Items]
Contingent consideration payable					$ 2,600,000	$ 2,600,000
Teekay Offshore [Member] | ALP Maritime Services B.V [Member] | Newbuildings [Member] | Long Distance Towing And Offshore Installation [Member]
Net Investment Income [Line Items]
Number of vessels						4

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Derivative Instruments and Hedging Activities - Additional Information (Detail) Share data in Millions, except Per Share data, unless otherwise specified	12 Months Ended			0 Months Ended	1 Months Ended		1 Months Ended
	Dec. 31, 2014 USD ($)	Dec. 31, 2013 USD ($)	Dec. 31, 2014 Interest Rate Swaps And Cross Currency Swaps Agreement [Member] USD ($)	Jan. 23, 2014 Teekay Tankers [Member] Tanker Investments Limited [Member] USD ($)	Jan. 31, 2014 Teekay Tankers [Member] Tanker Investments Limited [Member] USD ($)	Jan. 23, 2014 Teekay Tankers [Member] Tanker Investments Limited [Member]	Jan. 31, 2014 Teekay Tankers [Member] Tanker Investments Limited [Member] Warrant [Member] NOK	Dec. 31, 2014 Teekay Tankers [Member] Tanker Investments Limited [Member] Warrant [Member] USD ($)	Dec. 31, 2014 Teekay Tankers [Member] Tanker Investments Limited [Member] Warrant [Member] Derivatives not designated as a cash flow hedge [Member] USD ($)	Jan. 31, 2014 Teekay Tankers [Member] Tanker Investments Limited [Member] Warrant [Member] Derivatives not designated as a cash flow hedge [Member] USD ($)	Jan. 31, 2014 Teekay Tankers [Member] Tanker Investments Limited [Member] Maximum [Member] Warrant [Member]	Jan. 31, 2014 Teekay Tankers [Member] Tanker Investments Limited [Member] Minimum [Member] Warrant [Member] Tranche One [Member]	Jan. 31, 2014 Teekay Tankers [Member] Tanker Investments Limited [Member] Minimum [Member] Warrant [Member] Tranche Two [Member]	Jan. 31, 2014 Teekay Tankers [Member] Tanker Investments Limited [Member] Minimum [Member] Warrant [Member] Tranche Three [Member]	Jan. 31, 2014 Teekay Tankers [Member] Tanker Investments Limited [Member] Minimum [Member] Warrant [Member] Tranche Four [Member]
Derivative [Line Items]
Interest rate swaps, Description of Objective	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.
Purchase of common stock					5.0
Equity method investment, ownership interest	16.05%				20.00%	20.00%
Issuance of equity private placement				$ 250,000,000
Equity method investment					50,000,000
Number of shares available through exercise of stock purchase warrant											1.5
Fixed price of stock purchase warrants, per share							61.67	$ 10.00
Fair market value of the shares												77.08	92.50	107.91	123.33
Consecutive trading days							10 days
Derivatives not designated as a cash flow hedge	14,415,000	69,797,000							9,314,000	6,800,000
Fair value asset amount of interest rate swaps and cross currency swaps			0
Fair value liability amount of interest rate swaps and cross currency swaps			487,800,000
Restricted cash			$ 85,500,000

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Subsequent Events - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended	1 Months Ended
	Dec. 31, 2014	Feb. 28, 2015 Vessel m3	Apr. 29, 2015
Newbuildings [Member]
Subsequent Event [Line Items]
Fully built-up cost	$ 2,800
Teekay LNG [Member] | Newbuildings [Member]
Subsequent Event [Line Items]
Number of vessels	4
Subsequent Events [Member] | Teekay LNG [Member] | Newbuildings [Member]
Subsequent Event [Line Items]
Volume of vessels		173,400
Fully built-up cost		225
Number of vessels		4
Subsequent Events [Member] | Teekay Offshore [Member] | 8.50% Series B Cumulative Redeemable Preferred Units [Member]
Subsequent Event [Line Items]
Preferred Units issued in public offering			5.0
Preferred Units dividend rate			8.50%
Net proceeds from public offering			$ 120.8

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Segment Reporting - Revenues and Percentage of Consolidated Revenues (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Revenue, Major Customer [Line Items]
Revenue of Significant Customer	$ 1,993,920	$ 1,830,085	$ 1,980,771
BP PLC [Member] | Customer Concentration Risk [Member]
Revenue, Major Customer [Line Items]
Revenue of Significant Customer		182,500
BP PLC [Member] | Customer Concentration Risk [Member] | Sales Revenue, Net [Member]
Revenue, Major Customer [Line Items]
Percentage of Revenue of Significant Customer		10.00%
Petroleo Brasileiro SA [Member] | Customer Concentration Risk [Member]
Revenue, Major Customer [Line Items]
Revenue of Significant Customer	248,200	244,300	289,300
Petroleo Brasileiro SA [Member] | Customer Concentration Risk [Member] | Sales Revenue, Net [Member]
Revenue, Major Customer [Line Items]
Percentage of Revenue of Significant Customer	12.00%	13.00%	15.00%
Statoil ASA [Member] | Customer Concentration Risk [Member]
Revenue, Major Customer [Line Items]
Revenue of Significant Customer	$ 239,800	$ 250,500	$ 299,100
Statoil ASA [Member] | Customer Concentration Risk [Member] | Sales Revenue, Net [Member]
Revenue, Major Customer [Line Items]
Percentage of Revenue of Significant Customer	12.00%	14.00%	15.00%

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Supplemental Cash Flow Information (Tables)

12 Months Ended

Dec. 31, 2014

Supplemental Cash Flow Elements [Abstract]

Changes in Operating Assets and Liabilities

a) The changes in operating assets and liabilities for the years ended December 31, 2014, 2013, and 2012, are as follows:

	Year Ended December 31,
	2014			2013			2012
Accounts receivable		136,660			(77,837	)		(132,873	)
Prepaid expenses and other assets		(1,618	)		(2,386	)		19,741
Accounts payable		(17,643	)		(10,877	)		18,408
Accrued and other liabilities		(56,768	)		155,284			(20,485	)
		60,631			64,184			(115,209	)

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Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2014

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

1. Summary of Significant Accounting Policies

Basis of presentation

These consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (or GAAP). They include the assets, liabilities, revenues and expenses of Teekay Corporation (or Teekay), which is incorporated under the laws of the Republic of The Marshall Islands, its wholly-owned subsidiaries and those non-wholly owned subsidiaries in which Teekay has a controlling financial interest (collectively, the Company). Certain of Teekay’s significant non-wholly owned subsidiaries are consolidated in these financial statements even though Teekay owns less than a 50% ownership interest in the subsidiaries. These significant subsidiaries include the following publicly traded subsidiaries (collectively, the Public Subsidiaries): Teekay LNG Partners L.P. (or Teekay LNG); Teekay Offshore Partners L.P. (or Teekay Offshore); and Teekay Tankers Ltd. (or Teekay Tankers). As of December 31, 2014, Teekay owned a 33.5% interest in Teekay LNG (35.3%—December 31, 2013), including common units and its 2% general partner interest, a 27.3% interest in Teekay Offshore (29.3%—December 31, 2013), including common units and its 2% general partner interest, and 26.2% of the capital stock of Teekay Tankers (25.1%—December 31, 2013), 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. While Teekay owns less than 50% of each of the Public Subsidiaries, Teekay maintains control of Teekay LNG and Teekay Offshore by virtue of its 100% ownership interest in the general partners of Teekay LNG and Teekay Offshore, which are both master limited partnerships, and maintains control of Teekay Tankers through its ownership of a sufficient number of Class A common shares and Class B common shares, which provide increased voting rights, to maintain a majority voting interest in Teekay Tankers and thus consolidates these subsidiaries. Significant intercompany balances and transactions have been eliminated upon consolidation. 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 through June 2015.

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.

In the current period, the Company has presented the conversion costs incurred at period end for the Company’s committed vessel conversions in Advances on newbuilding contracts and conversion costs on the consolidated balance sheets. Prior to 2014, the Company included these amounts in Vessels and equipment – At cost, less accumulated depreciation. All such costs incurred in comparative periods have been reclassified from Vessels and equipment – At cost, less accumulated depreciation to Advances on newbuilding contracts and conversion costs to conform to the presentation adopted in the current period. The amount reclassified as at December 31, 2013 was $29.8 million.

Non-Controlling Interests

Where Teekay’s ownership interest in a consolidated subsidiary is less than 100%, the non-controlling interests’ share of these non-wholly owned subsidiaries are reported in the Company’s consolidated balance sheets as a separate component of equity. The non-controlling interests’ share of the net income (loss) of these non-wholly owned subsidiaries is reported in the Company’s consolidated statements of income (loss) as a deduction from the Company’s net income (loss) to arrive at net income (loss) attributable to shareholders of Teekay.

The basis for attributing net income (loss) of each non-wholly owned subsidiary to the controlling interest and the non-controlling interests, with the exception of Teekay LNG and Teekay Offshore, is based on the relative ownership interests of the non-controlling interests compared to the controlling interest, which is consistent with how dividends and distributions are paid or are payable for these non-wholly owned subsidiaries.

Teekay LNG and Teekay Offshore each have limited partners and one general partner. Both general partners are owned by Teekay. For Teekay LNG, the limited partners hold common units. For Teekay Offshore, the limited partners hold common units and preferred units. For each quarterly period, the method of attributing Teekay LNG’s and Teekay Offshore’s net income (loss) of that period to the non-controlling interests of Teekay LNG and Teekay Offshore begins by attributing net income (loss) of Teekay Offshore to the non-controlling interests which hold 100% of the preferred units of Teekay Offshore in an amount equal to the amount of preferred unit distributions declared for the quarterly period. The remaining net income (loss) to be attributed to the controlling interest and the non-controlling interests of Teekay LNG and Teekay Offshore is divided into two components. The first component consists of the cash distribution that Teekay LNG or Teekay Offshore will declare and pay to limited and general partners for that quarterly period (the Distributed Earnings). The second component consists of the difference between the net income (loss) of Teekay LNG or Teekay Offshore that is available to be allocated to the common unit holders and the general partner of such entity and the amount of the first component cash distribution (the Undistributed Earnings). The portion of the Distributed Earnings that is allocated to the non-controlling interests is the amount of the cash distribution that Teekay LNG or Teekay Offshore will declare and pay to the non-controlling interests for that quarterly period. The portion of the Undistributed Earnings that is allocated to the non-controlling interests is based on the relative ownership percentages of the non-controlling interests of Teekay LNG and Teekay Offshore compared to the controlling interest.

When Teekay’s non-wholly owned subsidiaries declare dividends or distributions to their owners, or require all of their owners to contribute capital to the non-wholly owned subsidiaries, such amounts are paid to, or received from, each of the owners of the non-wholly owned subsidiaries based on the relative ownership interests in the non-wholly owned subsidiary. As such, any dividends or distributions paid to, or capital contributions received from, the non-controlling interests are reflected as a reduction (dividends or distributions) or an increase (capital contributions) in non-controlling interest in the Company’s consolidated balance sheets.

When Teekay’s non-wholly owned subsidiaries issue additional equity interests to non-controlling interests, Teekay is effectively selling a portion of the non-wholly owned subsidiaries. Consequently, the proceeds received by the subsidiaries from their issuance of additional equity interests are allocated between non-controlling interest and retained earnings in the Company’s consolidated balance sheets. The portion allocated to non-controlling interest on the Company’s consolidated balance sheets consists of the carrying value of the portion of the non-wholly owned subsidiary that is effectively disposed of, with the remaining amount attributable to the controlling interest, which consists of the Company’s dilution gain or loss that is allocated to retained earnings.

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 income (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 proportionate performance method. The Company uses a discharge-to-discharge basis in determining proportionate performance 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 the fulfillment of the applicable performance criteria. Revenues and expenses relating to engineering studies are recognized when the 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 a 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 their 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 was no significant amounts recorded as allowance for doubtful accounts as at December 31, 2014, 2013, and 2012.

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 significantly 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 25 years for FPSO units, 35 years for liquefied natural gas (or LNG) carriers 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, 2014, 2013, and 2012 aggregated $341.5 million, $346.5 million and $364.3 million, respectively. Amortization of vessels accounted for as capital leases was $21.6 million, $22.8 million and $30.1 million for the years ended December 31, 2014, 2013, and 2012, 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, 2014, 2013, and 2012, aggregated $51.3 million, $14.6 million and $34.9 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 costs those costs incurred as part of the dry docking 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.

The continuity of capitalized dry docking costs for the three years ended December 31, 2014, 2013, and 2012, is summarized as follows:

	Year Ended December 31,
	2014			2013			2012
	$			$			$
Balance at the beginning of the year		118,194			100,928			128,987
Costs incurred for dry dockings		74,018			72,545			35,336
Dry dock amortization		(50,926	)		(50,325	)		(57,082	)
Write down / sales of vessels		(5,955	)		(4,954	)		(6,313	)
Balance at the end of the year		135,331			118,194			100,928

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.

Vessels and equipment that are “held for sale” are measured at the lower of their carrying amount or fair value less costs to sell and are not depreciated while classified as held for sale. Interest and other expenses attributable to vessels and equipment classified as held for sale, or to their related liabilities, continue to be recognized as incurred.

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 four LNG carriers and an FSO unit on long-term time charters, 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 was amortized to interest income over the term of the loan using the effective interest rate method. The Company analyzes its loans for collectability 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 (when available) any information provided by the debtor regarding their ability to repay the loan and the fair value of the underlying collateral. 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 statements of income (loss). The carrying value of the loans will be adjusted each subsequent reporting period to reflect any changes in the present value of estimated future cash flows.

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, 2014.

			December 31,
			2014		2013
Class of Financing Receivable	Credit Quality Indicator	Grade	$		$
Direct financing leases	Payment activity	Performing		704,953		727,262
Other loan receivables
Investment in term loans and interest receivable	Collateral	Non-Performing(1)		—		211,579
Loans to equity-accounted investees and joint venture partners (2)	Other internal metrics Performing			253,426		169,248
Long-term receivable included in other assets	Payment activity	Performing		43,843		31,634
				1,002,222		1,139,723

(1) In March 2014, Teekay and Teekay Tankers took ownership of the vessels held as collateral in satisfaction of the loans and accrued interest. (See Note 4).

(2) The Company’s subsidiary Teekay LNG owns a 99% interest in Teekay Tangguh Borrower LLC (or Teekay Tangguh), which owns a 70% interest in the Teekay BLT Corporation (or the Teekay Tangguh Joint Venture), essentially giving Teekay LNG a 69% interest in the Teekay Tangguh Joint Venture. During the year ended December 31, 2012, the parent company of Teekay LNG‘s joint venture partner, BLT LNG Tangguh Corporation (or BLT), suspended trading on the Jakarta Stock Exchange and entered into a court-supervised debt restructuring in Indonesia. The remaining loans to BLT, totaling $1.8 million as at December 31, 2014 (December 31, 2013—$28.5 million), are considered to be collectible given a signed settlement agreement between the Company and BLT regarding repayment terms. In 2014, the Teekay Tangguh Joint Venture declared dividends of $87.1 million, of which $14.4 million was used to offset the advances made to BLT and P.T. Berlian Laju Tanker and $11.7 million was repaid to Teekay by BLT. In addition, $1.5 million was paid to Teekay by BLT as part of the settlement agreement.

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 statements of income (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 (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 income (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 income (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 income (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 income (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 income (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 (loss) gain 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 gain (loss) in the consolidated statements of income (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 acquired 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 the costs associated with the 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 to be received 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, 2014, the ARO and associated receivable, which is recorded in other non-current assets, were $25.0 million and $6.8 million, respectively (2013 - $27.2 million and $7.5 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.

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.

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 income (loss)

The following table contains the changes in the balances of each component of accumulated other comprehensive income (loss) attributable to shareholders of Teekay for the periods presented.

	Qualifying Cash Flow Hedging Instruments			Pension Adjustments			Unrealized (Loss) Gain on Available for Sale Marketable Securities			Foreign Exchange Loss on Currency Translation		Total
	$			$			$			$		$
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	)
Other comprehensive (loss) income		(324	)		(2,666	)		(171	)		740		(2,421	)
Balance as of December 31, 2013		17			(18,919	)		(171	)		1,884		(17,189	)
Other comprehensive (loss) income		(485	)		(10,969	)		171			174		(11,109	)
Balance as of December 31, 2014		(468	)		(29,888	)		—			2,058		(28,298	)

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.

Accounting Pronouncements Not Yet Adopted

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers. ASU 2014-09 will require companies to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. This update creates a five-step model that requires companies to exercise judgment when considering the terms of the contract(s) which include (i) identifying the contract(s) with the customer, (ii) identifying the separate performance obligations in the contract, (iii) determining the transaction price, (iv) allocating the transaction price to the separate performance obligations, and (v) recognizing revenue as each performance obligation is satisfied. ASU 2014-09 is effective for interim and annual periods beginning after December 15, 2016 and shall, at the Company’s option, be applied retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. Early adoption is not permitted. The Company is evaluating the effect of adopting this new accounting guidance.

In April 2014, the FASB issued ASU 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, which raises the threshold for disposals to qualify as discontinued operations. A discontinued operation is now defined as: (i) a component of an entity or group of components that has been disposed of or classified as held for sale and represents a strategic shift that has or will have a major effect on an entity’s operations and financial results; or (ii) an acquired business that is classified as held for sale on the acquisition date. ASU 2014-08 also requires additional disclosures regarding discontinued operations, as well as material disposals that do not meet the definition of discontinued operations. ASU 2014-08 is effective for fiscal years beginning on or after December 15, 2014, and interim periods within those years. Early adoption is permitted, but only for disposals (or classifications as held for sale) that have not been reported in the financial statements previously issued or available for issuance. The impact, if any, of adopting ASU 2014-08 on the Company’s financial statements will depend on the occurrence and nature of disposals that occur after ASU 2014-08 is adopted.

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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, 2014
Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract]
Amortized from accumulated other comprehensive (loss) income into net periodic benefit cost	$ (1.9)

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Derivative Instruments and Hedging Activities - Effect of Loss on Cross Currency Swaps (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Derivative Instruments, Gain (Loss) [Line Items]
Realized and Unrealized (losses) gains	$ 13,431	$ (13,304)	$ (12,898)
Cross Currency Interest Rate Contract [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Realized and Unrealized (losses) gains	(171,289)	(56,498)	14,343
Cross Currency Interest Rate Contract [Member] | Realized gain on partial termination of cross currency swap [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Realized and Unrealized (losses) gains		6,800
Cross Currency Interest Rate Contract [Member] | Realized (losses) gains [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Realized and Unrealized (losses) gains	(3,955)	2,089	3,628
Cross Currency Interest Rate Contract [Member] | Unrealized (losses) gains [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Realized and Unrealized (losses) gains	$ (167,334)	$ (65,387)	$ 10,715

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Segment Reporting - Revenues and Percentage of Consolidated Revenues (Parenthetical) (Detail) (Customer Concentration Risk [Member], BP PLC [Member], Sales Revenue, Net [Member])	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Revenue, Major Customer [Line Items]
Percentage of revenue for BP PLC		10.00%
Maximum [Member]
Revenue, Major Customer [Line Items]
Percentage of revenue for BP PLC	10.00%		10.00%

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Loss Per Share - Schedule of Loss Per Share (Detail) (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Earnings Per Share [Abstract]
Net (loss) income attributable to shareholders of Teekay Corporation	$ (54,757)	$ (114,738)	$ (160,180)
Weighted average number of common shares	72,066,008	70,457,968	69,263,369
Dilutive effect of stock-based compensation	0	0	0
Common stock and common stock equivalents	72,066,008	70,457,968	69,263,369
(Loss) income per common share:
Basic	$ (0.76)	$ (1.63)	$ (2.31)
Diluted	$ (0.76)	$ (1.63)	$ (2.31)

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Income Taxes - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Income Tax Disclosure [Abstract]
Interest and penalties on unrecognized tax benefits	$ 1.6	$ 7.2	$ 0.8

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Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2014

Fair Value Disclosures [Abstract]

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, 2014						December 31, 2013
				Carrying			Fair			Carrying			Fair
	Fair			Amount			Value			Amount			Value
	Value Hierarchy			Asset (Liability)			Asset (Liability)			Asset (Liability)			Asset (Liability)
	Level			$			$			$			$
Recurring
Cash and cash equivalents, restricted cash, and marketable securities		Level 1			927,679			927,679			1,119,966			1,119,966
Derivative instruments (note 15)
Interest rate swap agreements—assets (1)		Level 2			1,051			1,051			91,415			91,415
Interest rate swap agreements—liabilities (1)		Level 2			(406,783	)		(406,783	)		(410,470	)		(410,470	)
Cross currency interest swap agreement		Level 2			(221,391	)		(221,391	)		(52,219	)		(52,219	)
Foreign currency contracts		Level 2			(18,407	)		(18,407	)		(1,480	)		(1,480	)
Stock purchase warrants (note 3e and 15)		Level 3			9,314			9,314			—			—
Logitel contingent consideration (see below)		Level 3			(21,448	)		(21,448	)		—			—
Non-recurring
Vessels and equipment (note 18b)		Level 2			—			—			17,250			17,250
Assets held for sale (2) (note 18b)		Level 2			—			—			176,247			176,247
Other
Investment in term loans		Level 3			—			—			211,579			209,570
Loans to equity-accounted investees and joint venture partners - Current		(3	)		26,209			(3	)		37,019			(3	)
Loans to equity-accounted investees and joint venture partners - Long-term		(3	)		227,217			(3	)		132,229			(3	)
Liabilities associated with assets held for sale (2) (note 18b)		Level 2			—			—			(168,007	)		(168,007	)
Long-term receivable included in other assets		Level 2			15,758			15,758			—			—
Long-term debt - public (note 8)		Level 1			(1,554,609	)		(1,574,440	)		(1,313,358	)		(1,376,829	)
Long-term debt - non-public (note 8)		Level 2			(5,181,889	)		(5,094,857	)		(4,796,112	)		(4,582,274	)

(1) The fair value of the Company’s interest rate swap agreements at December 31, 2014 includes $24.5 million (December 31, 2013- $22.0 million) of net accrued interest which is recorded in accrued liabilities and accounts receivable on the consolidated balance sheets.

(2) The fair value of the Company’s assets held for sale and liabilities associated with assets held for sale include vessels held for sale, long-term debt and other working capital balances.

(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

Changes in Fair Value Measured on Recurring Basis Using Significant Unobservable Inputs (Level 3)

Changes in fair value during the year ended December 31, 2014 for one of the Company’s derivative instruments, the TIL stock purchase warrants, which are described below and are measured at fair value on the recurring basis using significant unobservable inputs (Level 3), are as follows:

	Year Ended December 31,
	2014
	$
Fair value at the beginning of the year		—
Fair value on issuance		6,840
Unrealized gain included in earnings		2,474
Fair value at the end of the year		9,314

Changes in Estimated Fair Value of Contingent Consideration Liability Relating to Acquisition of Logitel

Changes in the estimated fair value of Teekay Offshore’s contingent consideration liability relating to the acquisition of Logitel, which is measured at fair value on a recurring basis using significant unobservable inputs (Level 3), during the year ended December 31, 2014 is as follows:

	Year Ended December 31,
	2014
	$
Balance at beginning of year		—
Acquisition of Logitel		(21,170	)
Unrealized loss included in other income - net		(278	)
Balance at end of year		(21,448	)

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Income Taxes

12 Months Ended

Dec. 31, 2014

Income Tax Disclosure [Abstract]

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 U.K. and Norwegian subsidiaries are subject to income taxes.

The significant components of the Company’s deferred tax assets and liabilities are as follows:

	December 31,			December 31,
	2014			2013
	$			$
Deferred tax assets:
Vessels and equipment		43,268			73,750
Tax losses carried forward(1)		360,547			427,656
Other		28,973			32,012
Total deferred tax assets		432,788			533,418
Deferred tax liabilities:
Vessels and equipment		12,514			19,555
Long-term debt		2,295			22,008
Other		19,954			30,519
Total deferred tax liabilities		34,763			72,082
Net deferred tax assets		398,025			461,336
Valuation allowance		(385,431	)		(442,504	)
Net deferred tax assets		12,594			18,832

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 $1.46 billion relate primarily to its Norwegian, U.K., and Spanish subsidiaries and, to a lesser extent, to its Australian ship-owning subsidiaries. These net operating loss carryforwards are available to offset future taxable income in the respective jurisdictions, and can be carried forward indefinitely. The Company also has $47.0 million in disallowed finance costs that relate to its Spanish subsidiaries and are available to offset future finance costs and can be carried forward for 18 years.

The components of the provision for income taxes are as follows:

	Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,
	2014			2013			2012
	$			$			$
Current		(6,460	)		2,742			9,167
Deferred		(3,713	)		(5,614	)		5,239
Income tax (expense) recovery		(10,173	)		(2,872	)		14,406

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			Year Ended			Year Ended
	December 31, 2014			December 31, 2013			December 31, 2012
	$			$			$
Net loss before taxes		134,175			38,352			(325,522	)
Net loss not subject to taxes		(80,454	)		(267,665	)		(129,307	)
Net (loss) income subject to taxes		214,629			306,017			(196,215	)
At applicable statutory tax rates		39,382			12,719			(15,808	)
Permanent and currency differences, adjustments to valuation allowances and uncertain tax positions		(28,027	)		(8,173	)		(2,817	)
Other		(1,182	)		(1,674	)		4,219
Tax expense (recovery) related to the current year		10,173			2,872			(14,406	)

The following is a roll-forward of the Company’s unrecognized tax benefits, recorded in other long-term liabilities, from January 1, 2012 to December 31, 2014:

	Year ended			Year ended			Year ended
	December 31,			December 31,			December 31,
	2014			2013			2012
	$			$			$
Balance of unrecognized tax benefits as at January 1		20,304			29,364			39,804
Increases for positions related to the current year		3,643			1,141			4,560
Changes for positions taken in prior years		1,015			(1,284	)		(5,085	)
Decreases related to statute of limitations		(4,627	)		(8,917	)		(9,915	)
Balance of unrecognized tax benefits as at December 31		20,335			20,304			29,364

The majority of the net decrease for positions for the year ended December 31, 2014 relates to a potential tax on freight income becoming statute barred.

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 2010 through 2014 remain open to examination by some of the major 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 $1.6 million in 2014, net of statute barred liabilities, and $7.2 million in 2013 and $0.8 million in 2012.

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Restructuring Charges

12 Months Ended

Dec. 31, 2014

Restructuring and Related Activities [Abstract]

Restructuring Charges

20. Restructuring Charges

During 2014, the Company recorded restructuring charges of $9.8 million ($6.9 million – 2013, $7.6 million—2012).

The restructuring charges in 2014 relate to the termination of the employment of certain seafarers upon the re-delivery of an in-chartered conventional tanker in December 2014 and upon the sale of a vessel under capital lease to a third party in August 2014, and the reflagging of one shuttle tanker which commenced in January 2014 and was completed in March 2014, partially offset by an adjustment to the accrual for costs related to the reorganization of the Company’s marine operations.

A portion of the restructuring charges in 2013 relates to the termination of the employment of certain seafarers from the sale of two vessels and the reflagging of one shuttle tanker. The restructuring charges in 2012 and a portion of the restructuring charges in 2013 primarily relate to the reorganization of the Company’s marine operations and certain of its commercial and administrative functions. The purpose of this restructuring was to create better alignment between certain of the Company’s business units and its three publicly-listed subsidiaries, as well as a lower cost organization. The Company does not expect to incur further restructuring charges associated with this reorganization.

At December 31, 2014 and 2013, $9.0 million and $4.9 million, respectively, of restructuring liabilities were recorded in accrued liabilities on the consolidated balance sheets.

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Fair Value Measurements - Changes in Fair Value Measured on Recurring Basis Using Significant Unobservable Inputs (Level 3) (Detail) (Recurring [Member], Level 3 [Member], Warrant [Member], USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014
Recurring [Member] | Level 3 [Member] | Warrant [Member]
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value at the beginning of the year
Fair value on issuance	6,840
Unrealized gain included in earnings	2,474
Fair value at the end of the year	$ 9,314

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Summary of Significant Accounting Policies - Summary of Financing Receivables (Parenthetical) (Detail) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Financing Receivable, Recorded Investment [Line Items]
Dividends declared	$ 456,706,000	$ 353,414,000	$ 324,888,000
Teekay Tangguh Borrower LLC [Member]
Financing Receivable, Recorded Investment [Line Items]
Ownership percentage	99.00%
Teekay BLT Corporation [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans to equity accounted investees and joint venture partners carrying value	1,800,000	28,500,000
Advances repaid	11,700,000
Additional amount repaid as part of settlement agreement	1,500,000
Teekay Tangguh Joint Venture [Member]
Financing Receivable, Recorded Investment [Line Items]
Ownership percentage	69.00%
Advances repaid	14,400,000
Dividends declared	$ 87,100,000
Teekay Tangguh Joint Venture [Member] | Teekay BLT Corporation [Member]
Financing Receivable, Recorded Investment [Line Items]
Ownership percentage	70.00%

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Capital Stock (Tables)

12 Months Ended

Dec. 31, 2014

Equity [Abstract]

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, 2014, 2013, and 2012, are as follows:

	December 31, 2014					December 31, 2013					December 31, 2012
				Weighted- Average					Weighted- Average					Weighted- Average
	Options (000’s)			Exercise Price		Options (000’s)			Exercise Price		Options (000’s)			Exercise Price
	#			$		#			$		#			$
Outstanding - beginning of year		4,237			36.33		5,285			34.40		5,713			32.47
Granted		15			56.76		73			34.07		433			27.69
Exercised		(1,528	)		36.10		(1,039	)		26.21		(733	)		15.85
Forfeited / expired		(14	)		28.51		(82	)		38.46		(128	)		31.81
Outstanding - end of year		2,710			36.61		4,237			36.33		5,285			34.40
Exercisable - end of year		2,508			37.03		3,848			37.03		4,561			35.54

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, 2014, 2013 and 2012, are as follows:

	December 31, 2014					December 31, 2013					December 31, 2012
				Weighted- Average					Weighted- Average					Weighted- Average
	Options (000’s)			Grant Date Fair Value		Options (000’s)			Grant Date Fair Value		Options (000’s)			Grant Date Fair Value
	#			$		#			$		#			$
Outstanding non-vested stock options—beginning of year		389			9.24		723			8.74		1,057			6.40
Granted		15			11.50		73			10.54		433			8.72
Vested		(188	)		9.30		(401	)		8.57		(747	)		5.44
Forfeited		(14	)		9.01		(6	)		9.46		(20	)		8.24
Outstanding non-vested stock options—end of year		202			9.37		389			9.24		723			8.74

Details Regarding Outstanding and Exercisable Stock Options

Further details regarding the Company’s outstanding and exercisable stock options at December 31, 2014 are as follows:

	Outstanding Options						Exercisable Options
			Weighted-		Weighted-				Weighted-		Weighted-
	Options (000’s)		Average Remaining Life		Average Exercise Price		Options (000’s)		Average Remaining Life		Average Exercise Price
Range of Exercise Prices	#		(Years)		$		#		(Years)		$
$10.00 – $19.99		193		4.2		11.84		193		4.2		11.84
$20.00 – $24.99		295		5.2		24.42		295		5.2		24.42
$25.00 – $29.99		367		7.2		27.69		228		7.2		27.69
$30.00 – $34.99		117		7.3		34.44		69		6.7		34.70
$35.00 – $39.99		391		1.3		39.01		391		1.3		39.01
$40.00 – $44.99		764		3.2		40.41		764		3.2		40.41
$45.00 – $49.99		139		0.2		46.80		139		0.2		46.80
$50.00 – $54.99		429		2.2		51.40		429		2.2		51.40
$55.00 – $59.99		15		9.2		56.76		—		—		—
		2,710		3.7		36.61		2,508		3.3		37.03

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Pension Benefits

12 Months Ended

Dec. 31, 2014

Compensation and Retirement Disclosure [Abstract]

Pension Benefits

22. Pension Benefits

a) Defined Contribution Pension Plans

With the exception of certain of the Company’s employees in Australia and Norway, 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, 2014, 2013, and 2012, the amount of cost recognized for the Company’s defined contribution pension plans was $18.0 million, $14.8 million and $14.5 million, 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, 2014, approximately 69% of the defined benefit pension assets were held by the Norwegian plans and approximately 31% were 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.

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			Year Ended
	December 31, 2014			December 31, 2013
	$			$
Change in benefit obligation:
Beginning balance		150,996			148,490
Service cost		8,800			9,768
Interest cost		4,975			4,974
Contributions by plan participants		292			481
Actuarial (gain) loss		15,982			3,396
Benefits paid		(5,476	)		(9,501	)
Plan settlements and amendments		(21,235	)		(3,126	)
Benefit obligations assumed on acquisition		1,083			3,125
Foreign currency exchange rate changes		(33,680	)		(6,515	)
Other		(133	)		(96	)
Ending balance		121,604			150,996
Change in fair value of plan assets:
Beginning balance		138,876			134,408
Actual return on plan assets		2,849			4,453
Contributions by the employer		12,283			14,609
Contributions by plan participants		292			481
Benefits paid		(5,456	)		(9,470	)
Plan settlements and amendments		(22,405	)		(2,118	)
Plan assets assumed on acquisition		998			2,502
Foreign currency exchange rate changes		(29,721	)		(5,564	)
Other		(558	)		(425	)
Ending balance		97,158			138,876
Funded status deficiency		(24,446	)		(12,120	)
Amounts recognized in the balance sheets:
Other long-term liabilities		24,446			12,120
Accumulated other comprehensive loss:
Net actuarial losses		(32,060	)		(20,922	)

(1) As at December 31, 2014, the estimated amount that will be amortized from accumulated other comprehensive (loss) income into net periodic benefit cost in 2015 is $(1.9) million.

As of December 31, 2014 and 2013, the accumulated benefit obligations for the Benefit Plans were $95.7 million and $116.1 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, 2014		December 31, 2013
	$		$
Benefit obligation		90,042		88,140
Fair value of plan assets		64,631		71,955
Accumulated benefit obligation		60,828		1,319
Fair value of plan assets		55,095		689

The components of net periodic pension cost relating to the Benefit Plans for the years ended December 31, 2014, 2013 and 2012 consisted of the following:

	Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,
	2014			2013			2012
	$			$			$
Net periodic pension cost:
Service cost		8,800			9,768			9,921
Interest cost		4,975			4,974			4,392
Expected return on plan assets		(5,333	)		(5,688	)		(5,270	)
Amortization of net actuarial loss		7,148			1,484			1,980
Plan settlement		(3,332	)		973			—
Other		557			425			577
Net cost		12,815			11,936			11,600

The components of other comprehensive loss relating to the Plans for the years ended December 31, 2014, 2013 and 2012 consisted of the following:

	Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,
	2014			2013			2012
	$			$			$
Other comprehensive income (loss):
Net (loss) gain arising during the period		(14,954	)		(3,930	)		6,143
Amortization of net actuarial loss		7,148			1,484			1,979
Plan settlement		(3,332	)		973			—
Total (loss) income		(11,138	)		(1,473	)		8,122

The Company estimates that it will make contributions into the Benefit Plans of $7.5 million during 2015. 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 $
2015		6,744
2016		5,373
2017		6,654
2018		4,707
2019		5,409
2020 – 2024		28,664
Total		57,551

The fair value of the plan assets, by category, as of December 31, 2014 and 2013 were as follows:

	December 31, 2014		December 31, 2013
Pooled Funds (1)		66,563		98,338
Mutual Funds (2)
Equity investments		7,343		18,080
Debt securities		6,119		3,811
Real estate		1,530		2,108
Cash and money market		12,238		8,796
Other		3,365		7,743
Total		97,158		138,876

(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, 2014 and 2013 were as follows:

	December 31, 2014			December 31, 2013
Discount rates		2.9	%		3.9	%
Rate of compensation increase		4.2	%		4.7	%

The weighted average assumptions used to determine net pension expense for the years ended December 31, 2014, 2013 and 2012 were as follows:

	Year Ended December 31, 2014 $			Year Ended December 31, 2013 $			Year Ended December 31, 2012 $
Discount rates		2.9	%		3.9	%		3.0	%
Rate of compensation increase		4.2	%		4.7	%		5.5	%
Expected long-term rates of return (1)		4.0	%		4.8	%		4.8	%

(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, 2014

Equity Method Investments and Joint Ventures [Abstract]

Equity Accounted Investments

23. Equity-accounted Investments

In October 2014, Teekay Offshore sold a 1995-built shuttle tanker, the Navion Norvegia, to the OOG-TK Libra GmbH & Co KG (or Libra Joint Venture), a joint venture with Odebrecht The vessel is committed to a new FPSO unit conversion for the Libra field located in the Santos Basin offshore Brazil. The conversion project will be completed at Sembcorp Marine’s Jurong Shipyard in Singapore and the FPSO unit is scheduled to commence operations in early-2017 under a 12-year fixed-rate contract with Petrobras (see note 16c).

In July 2014, Teekay LNG, through a new 50/50 joint venture, the Yamal LNG Joint Venture, ordered six internationally-flagged icebreaker LNG carriers for the Yamal LNG Project. The Yamal LNG Project is a joint venture between Russia-based Novatek OAO (60%), France-based Total S.A. (20%) and China-based CNPC (20%), and will consist of three LNG trains with a total expected capacity of 16.5 million metric tons of LNG per annum and is currently scheduled to start-up in early-2018 (see note 3b).

In June 2014, Teekay LNG acquired from BG its ownership interests in four 174,000-cubic meter Tri-Fuel Diesel Electric LNG carrier newbuildings, which will be constructed by Hudong-Zhonghua Shipbuilding (Group) Co., Ltd. in China for an estimated total fully built-up cost to the joint venture of approximately $1.0 billion. The vessels, upon delivery, which are scheduled between September 2017 and January 2019, will each operate under 20-year fixed-rate time-charter contracts, plus extension options, with Methane Services Limited, a wholly-owned subsidiary of BG (see note 3c).

In January 2014, Teekay and Teekay Tankers formed TIL, which seeks to opportunistically acquire, operate and sell modern second-hand tankers to benefit from an expected recovery in the current cyclical low of the tanker market. Teekay and Teekay Tankers in the aggregate purchased 5.0 million shares of common stock, representing an initial 20% interest in TIL, as part of a $250 million private placement by TIL, which represents a total investment by Teekay and Teekay Tankers of $50.0 million. In October 2014, Teekay Tankers acquired an additional 0.9 million common shares in TIL, representing 2.43% of the then outstanding share capital of TIL. In October 2014, TIL authorized a share repurchase program for up to $30 million and has repurchased $15.1 million to-date at an average price of NOK 68.49 per share and brought the combined interests of Teekay and Teekay Tankers in TIL to 16.05% as at December 31, 2014. (see note 3e).

In June 2013, Teekay Offshore completed the acquisition from Teekay of its 50% interest in a FPSO unit, the Cidade de Itajai (or Itajai). The Itajai FPSO has been operating on the Baúna and Piracaba (previously named Tiro and Sidon) fields in the Santos Basin offshore Brazil since February 2013 under a nine-year fixed-rate time-charter contract, plus extension options, with Petrobras. The remaining 50% interest in the Itajai FPSO unit is owned by Odebrecht.

In February 2013, Teekay LNG entered into a joint venture agreement with Exmar to own and charter-in LPG carriers with a primary focus on the mid-size gas carrier segment. Exmar LPG BVBA, took economic effect as of November 1, 2012 and, as of December 31, 2014, its fleet included 20 owned LPG carriers (including nine newbuilding carriers scheduled for delivery between 2015 and 2018) and four chartered-in LPG carriers. Teekay LNG and Exmar each have a 50% economic interest in Exmar LPG BVBA. Since control of the Exmar LPG BVBA is shared jointly between Exmar and Teekay LNG, Teekay LNG accounts for its investment in the Exmar LPG BVBA using the equity method (see note 3g).

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 3h).

Teekay LNG 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. The Wah Kwong Joint Venture is a joint venture arrangement between Teekay Tankers and Wah Kwong Maritime Transport Holdings Limited (or Wah Kwong) whereby Teekay Tankers holds a 50% interest. SkaugenPetrotrans Joint Venture is a joint venture arrangement between Teekay and I.M. Skaugen Marine Services Pte Ltd. whereby Teekay holds a 50% interest. Teekay has a joint venture interest of 49% in Remora AS (or Remora), a Norway-based offshore marine technology company from which Teekay Offshore acquired a 2010-built HiLoad DP unit. The RasGas 3 Joint Venture is a joint venture arrangement between Teekay LNG and QGTC Nakilat (1643-6) Holdings Corporation 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. Teekay LNG has a 50% interest in joint ventures with Exmar (or the Exmar Joint Venture) which owns two LNG carriers that are chartered out under long term contracts.

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 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 of December 31, 2014, the aggregate value of the Company’s 43% interest (43% interest —December 31, 2013) in Sevan, based on the quoted market price of Sevan’s common stock on the Oslo Stock Exchange, was $61.4 million ($94.3 million – December 31, 2013).

A condensed summary of the Company’s investments in and advances to equity-accounted investees are as follows (in thousands of U.S. dollars, except percentages):

				As at December 31,
	Ownership			2014		2013
Investments in Equity-accounted Investees	Percentage			$		$
Malt Joint Venture (note 3h)		52	%		263,446		228,183
RasGas 3 Joint Venture		40	%		141,866		125,648
Exmar LPG Joint Venture (note 3g)		50	%		126,690		82,576
Exmar Joint Venture		50	%		97,037		86,387
TIL (note 3e)		16	%		63,715		—
Tiro and Sidon Joint Venture		50	%		54,540		52,118
Angola Joint Venture		33	%		50,887		54,168
Sevan Marine Equity Investment (note 3f)		43	%		34,985		40,740
BG (note 3c)		20%-30	%		20,704		—
Other		50	%		19,551		20,489
Total					873,421		690,309

	Ownership		As at December 31,
Loans to Equity-accounted Investees	Percentage		2014		2013
Yamal LNG Joint Venture (note 3b)		50%		97,157		—
Exmar LPG Joint Venture (note 3g)		50%		82,677		82,068
Tiro and Sidon Joint Venture		50%		18,006		12,781
SkaugenPetroTrans Joint Venture		50%		14,500		16,079
Teekay LNG-Marubeni Joint Venture (note 3h)		52%		11,039		10,274
Other		16%-50%		28,201		19,570
Total				251,580		140,772

(1) The Company also has loans to joint venture partners of $1.8 million as at December 31, 2014 (2013—$28.5 million).

A condensed summary of the Company’s financial information for equity-accounted investments (16% to 52% owned) shown on a 100% basis are as follows:

	As at December 31,
	2014(1)		2013(2)
Cash and restricted cash		434,833		323,065
Other assets- current		249,882		165,919
Vessels and equipment		3,345,590		2,496,086
Net investment in direct financing leases		1,873,803		1,907,458
Other assets—non-current		150,618		302,255
Current portion of long-term debt and obligations under capital lease		526,097		501,683
Other liabilities—current		217,180		216,659
Long-term debt and obligations under capital lease		2,958,698		2,973,170
Other liabilities—non-current		459,907		256,465

	Year ended December 31,
	2014(1)			2013(2)		2012(3)(4)
Revenues		998,655			940,156		659,030
Income from vessel operations		454,135			328,430		241,702
Realized and unrealized (loss) gain on derivative instruments		(58,884	)		16,334		(56,307	)
Net income		300,837			288,550		120,395

Certain of the comparative figures have been adjusted to conform to the presentation adopted in the current year.

(1) The results included for TIL are from the date of incorporation in January 2014.

(2) The results included for the Exmar LPG BVBA are from the date of acquisition in February 2013.

(3) The results included for the Teekay LNG-Marubeni Joint Venture are from the date of acquisition of the MALT LNG Carriers, which were acquired in February 2012.

(4) 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.

For the year ended December 31, 2014, the Company recorded equity income of $128.1 million (2013 – $136.5 million and 2012—$79.2 million). The income was primarily comprised of the Company’s share of net income (loss) from the Teekay LNG-Marubeni Joint Venture, Angola LNG Project, the RasGas 3 Joint Venture, Sevan, Exmar Joint Venture, Exmar LPG BVBA, and from the interest in the Itajai. For the year ended December 31, 2014, $1.1 million of the equity gain related to the Company’s share of unrealized gain (loss) on interest rate swaps associated with these projects (2013 – $31.2 million and 2012—$5.3 million).

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Consolidated Statements of Changes in Total Equity (USD $) In Thousands, except Share data	Total USD ($)	Redeemable Non-controlling Interest [Member] USD ($)	Common Stock [Member]	TOTAL EQUITY Common Stock and Additional Paid-in Capital [Member] USD ($)	TOTAL EQUITY Retained Earnings [Member] USD ($)	TOTAL EQUITY Accumulated Other Comprehensive Loss [Member] USD ($)	TOTAL EQUITY Non-controlling Interests [Member] USD ($)
Beginning Balance at Dec. 31, 2011	$ 3,303,794	$ 38,307		$ 660,917	$ 802,982	$ (23,903)	$ 1,863,798
Beginning Balance, Shares at Dec. 31, 2011			68,732,000
Net (loss) income	(311,116)				(160,180)		(150,936)
Reclassification of redeemable non-controlling interest in net income	4,520	(4,520)					4,520
Other comprehensive income	9,475					9,135	340
Dividends declared	(324,888)	(4,972)			(83,305)		(241,583)
Reinvested dividends	6			6
Reinvested dividends, Shares			1,000
Exercise of stock options and other (note 12)	11,617			11,617
Exercise of stock options and other (note 12), shares	733,000		971,000
Employee stock compensation (note 12)	9,393			9,393
Dilution gain on public offerings of Teekay Offshore, Teekay Tankers, Teekay LNG and share issuances of Teekay Offshore (note 5)	88,727				88,727
Additions to 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	28,815		681,933	648,224	(14,768)	1,876,085
Ending Balance, Shares at Dec. 31, 2012			69,704,000
Net (loss) income	35,480				(114,738)		150,218
Reclassification of redeemable non-controlling interest in net income	6,391	(6,391)					6,391
Other comprehensive income	(2,271)					(2,421)	150
Dividends declared	(353,414)	(5,860)			(90,273)		(263,141)
Reinvested dividends	8			8
Reinvested dividends, Shares			1,000
Exercise of stock options and other (note 12)	27,219			27,219
Exercise of stock options and other (note 12), shares	1,039,000		1,324,000
Repurchase of Common Stock (note 12)	(12,000)			(2,722)	(9,278)
Repurchase of Common Stock (note 12), shares			(300,000)
Employee stock compensation (note 12)	7,322			7,322
Dilution gain on public offerings of Teekay Offshore, Teekay Tankers, Teekay LNG and share issuances of Teekay Offshore (note 5)	36,703				36,703
Excess of purchase price over the carrying value upon acquisition of Variable Interest Entity (note 3f)	(35,421)				(35,421)
Additions to non-controlling interest from share and unit issuances of subsidiaries and other	301,559						301,559
Ending Balance at Dec. 31, 2013	3,203,050	16,564		713,760	435,217	(17,189)	2,071,262
Ending Balance, Shares at Dec. 31, 2013	70,729,399		70,729,339
Net (loss) income	124,002				(54,757)		178,759
Reclassification of redeemable non-controlling interest in net income	(7,777)	7,777					(7,777)
Other comprehensive income	(12,155)					(11,109)	(1,046)
Dividends declared	(456,706)	(11,499)			(93,021)		(363,685)
Reinvested dividends	6			6
Reinvested dividends, Shares			1,000
Exercise of stock options and other (note 12)	55,165			55,165
Exercise of stock options and other (note 12), shares	1,528,000		1,771,000
Employee stock compensation (note 12)	1,828			1,828
Dilution gain on public offerings of Teekay Offshore, Teekay Tankers, Teekay LNG and share issuances of Teekay Offshore (note 5)	68,428				68,428
Additions to non-controlling interest from share and unit issuances of subsidiaries and other	412,792						412,792
Ending Balance at Dec. 31, 2014	$ 3,388,633	$ 12,842		$ 770,759	$ 355,867	$ (28,298)	$ 2,290,305
Ending Balance, Shares at Dec. 31, 2014	72,500,502		72,500,502

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Subsequent Events

12 Months Ended

Dec. 31, 2014

Subsequent Events [Abstract]

Subsequent Events

24. Subsequent Events

a) In February 2015, Teekay LNG entered into an agreement with DSME for the construction of one additional 173,400 cbm MEGI LNG carrier newbuilding for a total fully built-up cost of approximately $225 million, with options to order up to four additional vessels. Teekay LNG intends to secure long-term contract employment for the ordered vessel prior to its scheduled delivery in the fourth quarter of 2018.

b) In April 2015, Teekay Offshore issued 5.0 million 8.50% Series B Cumulative Redeemable Preferred Units in a public offering for net proceeds of $120.8 million. Teekay Offshore expects to use the net proceeds from the public for general partnership purposes, including the funding of newbuilding installments, capital conversion projects and the acquisitions of vessels that Teekay has offered or may offer to Teekay Offshore, which may include funding Teekay Offshore’s acquisition of the Knarr FPSO unit from Teekay.

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Long-Term Debt - Additional Information - NOK Bonds (Detail) (Nibor Loan [Member])			12 Months Ended
	Dec. 31, 2014 Public Subsidiaries [Member] Norwegian Kroner-denominated bonds due between October 2015 and September 2018 [Member] USD ($)	Dec. 31, 2014 Public Subsidiaries [Member] Norwegian Kroner-denominated bonds due between October 2015 and September 2018 [Member] NOK	Dec. 31, 2014 Public Subsidiaries [Member] Norwegian Kroner-denominated bonds due between October 2015 and September 2018 [Member] Minimum [Member]	Dec. 31, 2014 Public Subsidiaries [Member] Norwegian Kroner-denominated bonds due between October 2015 and September 2018 [Member] Maximum [Member]	Dec. 31, 2014 Teekay Offshore [Member] Norwegian Kroner Bond Mature in January 2019 [Member] USD ($)	Jan. 31, 2014 Teekay Offshore [Member] Norwegian Kroner Bond Mature in January 2019 [Member] NOK
Debt Instrument [Line Items]
Senior unsecured bonds issued		4,200,000,000				1,000,000,000
Debt instrument, carrying amount	563,600,000				134,200,000
Percentage of margin			4.00%	5.75%	4.25%
Debt instrument interest			4.80%	7.49%	6.28%
Debt instrument transfer of principal amount	$ 732,400,000				$ 162,200,000

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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, 2014	Dec. 31, 2013
Derivatives, Fair Value [Line Items]
Current Portion of Derivative Assets		$ 23,040
Derivative Assets	14,415	69,797
Accrued Liabilities	(24,491)	(22,022)
Current Portion of Derivative Liabilities	(203,957)	(143,999)
Derivative Liabilities	(422,182)	(299,570)
Derivatives not designated as a cash flow hedge [Member] | Warrant [Member]
Derivatives, Fair Value [Line Items]
Derivative Assets	9,314
Derivatives not designated as a cash flow hedge [Member] | Foreign currency contracts [Member]
Derivatives, Fair Value [Line Items]
Current Portion of Derivative Assets		482
Derivative Assets		12
Current Portion of Derivative Liabilities	(14,218)	(1,819)
Derivative Liabilities	(4,189)	(155)
Derivatives not designated as a cash flow hedge [Member] | Interest rate swap agreements [Member]
Derivatives, Fair Value [Line Items]
Current Portion of Derivative Assets		21,779
Derivative Assets	5,101	69,785
Accrued Liabilities	(22,656)	(22,025)
Current Portion of Derivative Liabilities	(148,006)	(140,503)
Derivative Liabilities	(240,171)	(248,091)
Derivatives not designated as a cash flow hedge [Member] | Cross currency swap agreements [Member]
Derivatives, Fair Value [Line Items]
Current Portion of Derivative Assets		779
Accrued Liabilities	(1,835)	3
Current Portion of Derivative Liabilities	(41,733)	(1,677)
Derivative Liabilities	$ (177,822)	$ (51,324)

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Long-Term Debt (Tables)

12 Months Ended

Dec. 31, 2014

Debt Disclosure [Abstract]

Summary of Long-Term Debt

	December 31, 2014		December 31, 2013
	$		$
Revolving Credit Facilities		1,766,822		1,919,086
Senior Notes (8.5%) due January 15, 2020		390,712		447,430
Norwegian Kroner-denominated Bonds due through January 2019		697,798		691,778
U.S. Dollar-denominated Term Loans due through 2023		3,103,255		2,523,523
U.S. Dollar Bonds due through 2023		492,918		174,150
Euro-denominated Term Loans due through 2023		284,993		340,221
U.S. Dollar-denominated Unsecured Demand Loans due to Joint Venture Partners		—		13,282
Total		6,736,498		6,109,470
Less current portion		654,134		996,425
Long-term portion		6,082,364		5,113,045

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Summary of Significant Accounting Policies - Additional Information (Detail) (USD $)	12 Months Ended			0 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	May 02, 2013
Property, Plant and Equipment [Line Items]
Advances on newbuilding contracts and conversion costs	$ 1,706,500,000	$ 796,324,000
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 and amortization	422,904,000	431,086,000	455,898,000
Amortization of vessels accounted for as capital leases	21,600,000	22,800,000	30,100,000
Interest costs capitalized to vessels and equipment	51,300,000	14,600,000	34,900,000
Asset retirement obligation	25,000,000	27,200,000
Other non-current assets	274,595,000	159,494,000
Public Subsidiaries [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Ownership interest in the subsidiaries	50.00%
Gp Of Teekay Lng And Teekay Offshore[Member]
Property, Plant and Equipment [Line Items]
Ownership interest in the subsidiaries	100.00%
Teekay LNG [Member]
Property, Plant and Equipment [Line Items]
Ownership interest in the subsidiaries	33.50%	35.30%
Teekay Offshore [Member]
Property, Plant and Equipment [Line Items]
Ownership interest in the subsidiaries	27.30%	29.30%
Interest of Company's general partner				2.00%
Teekay Offshore [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Ownership interest in the subsidiaries		67.00%
Teekay Offshore [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Ownership interest in the subsidiaries		50.00%
Teekay Tankers [Member]
Property, Plant and Equipment [Line Items]
Ownership interest in the subsidiaries	26.20%	25.10%
Teekay Tankers [Member] | Common Class B [Member]
Property, Plant and Equipment [Line Items]
Common Stock, maximum voting power	49.00%
Common stock number of votes per share	Five votes per share
Crude oil tanker [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, useful life	25 years
Refined product tanker [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, useful life	25 years
FPSO [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, useful life	25 years
FPSO [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, useful life	20 years
Liquefied Natural Gas [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, useful life	35 years
Liquefied Petroleum Gas [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, useful life	30 years
Excluding amortization of Drydocking expenditure [Member]
Property, Plant and Equipment [Line Items]
Depreciation and amortization	341,500,000	346,500,000	364,300,000
Dry docking activity [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, useful life	5 years
Dry docking activity [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, useful life	2 years 6 months
Asset retirement obligation [Member]
Property, Plant and Equipment [Line Items]
Other non-current assets	6,800,000	7,500,000
Liquefied Gas Segment [Member]
Property, Plant and Equipment [Line Items]
Depreciation and amortization	71,712,000	71,485,000	69,064,000
Liquefied Gas Segment [Member] | Direct Financing Lease [Member]
Property, Plant and Equipment [Line Items]
Number of vessels	4
Fso Segment [Member] | Direct Financing Lease [Member]
Property, Plant and Equipment [Line Items]
Number of vessels	1
General Partner [Member] | Teekay LNG [Member]
Property, Plant and Equipment [Line Items]
Interest of Company's general partner	2.00%
General Partner [Member] | Teekay Offshore [Member]
Property, Plant and Equipment [Line Items]
Interest of Company's general partner	2.00%
Reclassification to advances on newbuilding contracts and conversion costs [Member]
Property, Plant and Equipment [Line Items]
Advances on newbuilding contracts and conversion costs		$ 29,800,000

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Investments - Teekay LNG - Marubeni Joint Venture - Additional Information (Detail) (USD $)	1 Months Ended
	Jul. 31, 2013	Feb. 29, 2012 Vessel	Dec. 31, 2014	Dec. 31, 2013
Net Investment Income [Line Items]
Percentage of ownership			16.05%
Long-term Debt			$ 6,736,498,000	$ 6,109,470,000
Interest rate swap agreements [Member]
Net Investment Income [Line Items]
Teekay LNG-Marubeni Joint Venture entered in to an interest rate swap	8 years
Notional amount	160,000,000
Amortizing quarterly over the term of the interest rate swap to million at maturity	70,400,000
Interest rate swap agreements [Member] | Derivative Instrument Interest Payment Period One [Member]
Net Investment Income [Line Items]
LIBOR-based interest for the payment of a fixed rate of interest	2.20%
Interest rate swap agreements [Member] | Derivative Instrument Interest Payment Period Two [Member]
Net Investment Income [Line Items]
LIBOR-based interest for the payment of a fixed rate of interest	2.36%
Teekay LNG-Marubeni Joint Venture [Member]
Net Investment Income [Line Items]
Percentage of ownership		100.00%
Number of vessels		6
Acquisition cost		1,300,000,000
Percentage of ownership		52.00%	52.00%
Long-term Debt			963,000,000
Carrying value of the guarantee liability	$ 700,000		$ 400,000	$ 600,000
Marubeni Corporation [Member]
Net Investment Income [Line Items]
Percentage of ownership		48.00%

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Consolidated Statements of Income (Loss) (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Income Statement [Abstract]
Revenues	$ 1,993,920	$ 1,830,085	$ 1,980,771
Voyage expenses	(127,847)	(112,218)	(138,283)
Vessel operating expenses	(809,319)	(806,152)	(813,326)
Time-charter hire expense	(67,219)	(103,646)	(130,739)
Depreciation and amortization	(422,904)	(431,086)	(455,898)
General and administrative	(140,917)	(140,958)	(144,296)
Asset impairments (note 18b)	(4,759)	(167,605)	(432,196)
Loan loss recoveries (provisions) (note 18b)	2,521	(748)	(1,886)
Net gain (loss) on sale of vessels, equipment and other assets (note 18a)	13,509	1,995	(6,975)
Restructuring charges (note 20)	(9,826)	(6,921)	(7,565)
Income (loss) from vessel operations	427,159	62,746	(150,393)
Interest expense	(208,529)	(181,396)	(167,615)
Interest income	6,827	9,708	6,159
Realized and unrealized (loss) gain on non-designated derivative instruments (note 15)	(231,675)	18,414	(80,352)
Equity income (note 23)	128,114	136,538	79,211
Foreign exchange gain (loss) (notes 8 and 15)	13,431	(13,304)	(12,898)
Other (loss) income (note 14)	(1,152)	5,646	366
Net income (loss) before income taxes	134,175	38,352	(325,522)
Income tax (expense) recovery (note 21)	(10,173)	(2,872)	14,406
Net income (loss)	124,002	35,480	(311,116)
Less: Net (income) loss attributable to non-controlling interests	(178,759)	(150,218)	150,936
Net loss attributable to shareholders of Teekay Corporation	$ (54,757)	$ (114,738)	$ (160,180)
Per common share of Teekay Corporation (note 19)
Basic loss attributable to shareholders of Teekay Corporation	$ (0.76)	$ (1.63)	$ (2.31)
Diluted loss attributable to shareholders of Teekay Corporation	$ (0.76)	$ (1.63)	$ (2.31)
Cash dividends declared	$ 1.2650	$ 1.2650	$ 1.2650
Weighted average number of common shares outstanding (note 19)
Basic	72,066,008	70,457,968	69,263,369
Diluted	72,066,008	70,457,968	69,263,369

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Other (Loss) Income (Tables)

12 Months Ended

Dec. 31, 2014

Other Income and Expenses [Abstract]

Summary of Other (Loss) Income

	Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,
	2014			2013			2012
	$			$			$
TIL stock purchase warrants received (note 15)		6,839			—			—
Gain on sale of other assets		—			—			2,217
Volatile organic compound emission plant lease income		24			238			1,220
Impairment and loss on sale of marketable securities		(1,322	)		(2,062	)		(2,560	)
Miscellaneous income (loss)		1,006			9,229			(511	)
Loss on bond repurchases		(7,699	)		(1,759	)		—
Other (loss) income		(1,152	)		5,646			366

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Capital Lease Obligations and Restricted Cash - Additional Information (Detail) (USD $)	12 Months Ended
	Dec. 22, 2014	Dec. 31, 2014 Vessel	Dec. 31, 2013
Capital Leased Assets [Line Items]
Outstanding lease obligation		63,550,000	598,329,000
Restricted cash on deposits		85,698,000	497,984,000
Teekay Nakilat Corporation [Member]
Capital Leased Assets [Line Items]
Security deposit against future claims		6,800,000
Certain Term Loans and Other Obligations [Member]
Capital Leased Assets [Line Items]
Restricted cash deposits relating to certain term loans, collateral for derivatives and other obligations		107,800,000	27,100,000
Assets Held for Sale [Member]
Capital Leased Assets [Line Items]
Number of vessels		2
RasGas II LNG Carriers [Member]
Capital Leased Assets [Line Items]
Restricted cash on deposits		6,800,000	475,600,000
Weighted-average interest rates earned on deposits		0.60%	0.30%
RasGas II LNG Carriers [Member] | Teekay LNG [Member]
Capital Leased Assets [Line Items]
Number of capital leased assets	3
Percentage of partnership's in joint ventures partner's share	30.00%
Teekay Nakilat Corporation [Member]
Capital Leased Assets [Line Items]
Tax indemnification		14,400,000	15,000,000
Teekay Nakilat Corporation [Member] | Teekay LNG [Member]
Capital Leased Assets [Line Items]
Ownership interest held by partnership		70.00%	70.00%
Capitalized amount paid to the lessor in excess of the outstanding lease obligation	23,100,000
Outstanding lease obligation	473,400,000
Capital lease arrangement period, lessee		The Teekay Nakilat Joint Venture was the lessee under three separate 30-year capital lease arrangements with a third party for the three RasGas II LNG Carriers.
Number of vessels		3
Suezmax Tankers [Member]
Capital Leased Assets [Line Items]
Weighted-average interest rate on leases		5.50%
Approximate capital leases future minimum payments due		73,700,000
Interest expenses included in capital lease payment obligation		10,200,000
Suezmax Tankers [Member] | Teekay LNG [Member]
Capital Leased Assets [Line Items]
Number of capital leased assets		4
Capital lease arrangement period, lessee		Under these capital leases, the owner has the option to require Teekay LNG to purchase the four vessels. The charterer, who is also the owner, also has the option to cancel the charter contracts.
Suezmax Tankers [Member] | Assets Held for Sale [Member] | Teekay LNG [Member]
Capital Leased Assets [Line Items]
Number of vessels		2

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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, 2014	Dec. 31, 2013	Dec. 31, 2012
Income Tax Disclosure [Abstract]
Balance of unrecognized tax benefits as at January 1	$ 20,304	$ 29,364	$ 39,804
Increases for positions related to the current year	3,643	1,141	4,560
Changes for positions taken in prior years	1,015	(1,284)	(5,085)
Decreases related to statute of limitations	(4,627)	(8,917)	(9,915)
Balance of unrecognized tax benefits as at December 31	$ 20,335	$ 20,304	$ 29,364

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Derivative Instruments and Hedging Activities - Interest Rate Swap Agreements (Parenthetical) (Detail)	Dec. 31, 2014	Dec. 31, 2014 Floating Rate Payable [Member] USD ($)	Dec. 31, 2014 Euro-denominated interest rate swaps [Member] USD ($)	Dec. 31, 2014 Euro-denominated interest rate swaps [Member] EUR (€)	Dec. 31, 2014 Derivatives designated as a cash flow hedge [Member] U.S. Dollar-denominated interest rate swaps 3 [Member] 2015 Termination [Member] USD ($)	Dec. 31, 2014 Derivatives designated as a cash flow hedge [Member] U.S. Dollar-denominated interest rate swaps 3 [Member] 2016 Termination [Member] USD ($)
Derivative [Line Items]
Minimum variable interest rate on debt	0.30%
Maximum variable interest rate on debt	3.95%
Interest rate swap aggregate principal amount used to economically hedge on new debt		$ 200,000,000		€ 235,600,000	$ 180,000,000	$ 320,000,000
LIBOR rate receivable fixed		2.14%
Floating LIBOR rate receivable/payable cap		6.00%
Reducing principal amount of Euro-denominated interest rate swaps			$ 84,800,000	€ 70,100,000

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Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
OPERATING ACTIVITIES
Net income (loss)	$ 124,002	$ 35,480	$ (311,116)
Non-cash items:
Depreciation and amortization	422,904	431,086	455,898
Amortization of in-process revenue contracts (note 6)	(40,939)	(61,700)	(72,933)
Unrealized loss (gain) on derivative instruments	267,830	(113,344)	(40,373)
(Gain) loss on sale of vessels and equipment	(13,509)	(1,995)	6,975
Asset impairments and loan loss provisions (note 18b)	2,238	168,353	434,082
Equity income, net of dividends received	(94,726)	(121,144)	(65,639)
Income tax expense (recovery)	10,173	2,872	(14,406)
Unrealized foreign exchange (gain) loss and other	(217,908)	(39,003)	46,680
Change in operating assets and liabilities (note 17a)	60,631	64,184	(115,209)
Expenditures for dry docking	(74,379)	(72,205)	(35,023)
Net operating cash flow	446,317	292,584	288,936
FINANCING ACTIVITIES
Proceeds from issuance of long-term debt, net of issuance costs (note 8)	3,365,045	2,451,828	1,407,275
Scheduled repayments of long-term debt	(1,291,322)	(695,688)	(266,242)
Prepayments of long-term debt	(1,331,469)	(1,017,818)	(1,060,169)
Repayments of capital lease obligations	(479,115)	(10,315)	(10,161)
Decrease (increase) in restricted cash (note 10)	380,953	31,776	(33,592)
Net proceeds from equity issuances of subsidiaries (note 5)	452,061	446,893	496,224
Equity contribution by joint venture partner	27,267	4,934	86,350
Issuance of Common Stock upon exercise of stock options	55,165	27,219	11,617
Distribution from subsidiaries to non-controlling interests	(360,820)	(269,987)	(246,555)
Cash dividends paid	(91,004)	(90,265)	(83,299)
Other financing activities		(12,000)	(1,777)
Net financing cash flow	726,761	866,577	299,671
INVESTING ACTIVITIES
Expenditures for vessels and equipment	(994,931)	(753,755)	(523,597)
Proceeds from sale of vessels and equipment	180,638	47,704	250,807
Recovery (investment) in term loans (note 4)	4,814	(12,552)
Investment in equity-accounted investees (note 23)	(79,602)	(157,762)	(183,554)
Advances to equity-accounted investees	(87,130)	(14,466)	(117,235)
Investment in direct financing lease assets (note 9)		(307,950)
Direct financing lease payments received	22,856	17,289	23,307
Investment in cost accounted investment	(25,000)
Other investing activities	(4,247)	(2,500)	1,332
Net investing cash flow	(980,834)	(1,183,992)	(641,243)
Increase (decrease) in cash and cash equivalents	192,244	(24,831)	(52,636)
Cash and cash equivalents, beginning of the year	614,660	639,491	692,127
Cash and cash equivalents, end of the year	806,904	614,660	639,491
ALP Maritime Services B.V [Member]
OPERATING ACTIVITIES
Net income (loss)	(2,300)
INVESTING ACTIVITIES
Purchase of business (net of cash acquired)	(2,322)
Logitel Offshore Holdings [Member]
OPERATING ACTIVITIES
Net income (loss)	(1,000)
INVESTING ACTIVITIES
Purchase of business (net of cash acquired)	4,090
FPSO unit Sevan Hummingbird [Member] | Sevan Marine [Member]
INVESTING ACTIVITIES
Purchase of business (net of cash acquired)			$ (92,303)

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Operating and Direct Financing Leases - Components of Net Investments in Direct Financing Leases (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Leases [Abstract]
Total minimum lease payments to be received	$ 936,164	$ 1,024,187
Estimated unguaranteed residual value of leased properties	203,465	203,465
Initial direct costs and other	461	1,379
Less unearned revenue	(435,137)	(501,769)
Total	704,953	727,262
Total	704,953	727,262
Less current portion	20,823	21,545
Long-term portion	$ 684,130	$ 705,717

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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, 2014	Dec. 31, 2013
Change in fair value of plan assets:
Ending balance	$ 97,158	$ 138,876
Funded status deficiency	(24,446)	(12,120)
Amounts recognized in the balance sheets:
Other long-term liabilities	24,446	12,120
Accumulated other comprehensive loss:
Net actuarial losses	(32,060)	(20,922)
Benefit obligation [Member]
Change in benefit obligation:
Beginning balance	150,996	148,490
Service cost	8,800	9,768
Interest cost	4,975	4,974
Contributions by plan participants	292	481
Actuarial (gain) loss	15,982	3,396
Benefits paid	(5,476)	(9,501)
Plan settlements and amendments	(21,235)	(3,126)
Benefit obligations assumed on acquisition	1,083	3,125
Foreign currency exchange rate changes	(33,680)	(6,515)
Other	(133)	(96)
Ending balance	121,604	150,996
Change in fair value of plan assets:
Contributions by plan participants	292	481
Benefits paid	(5,476)	(9,501)
Other	133	96
Fair Value Of Plan Assets [Member]
Change in benefit obligation:
Contributions by plan participants	292	481
Benefits paid	(5,456)	(9,470)
Other	558	425
Change in fair value of plan assets:
Beginning balance	138,876	134,408
Actual return on plan assets	2,849	4,453
Contributions by the employer	12,283	14,609
Contributions by plan participants	292	481
Benefits paid	(5,456)	(9,470)
Plan settlements and amendments	(22,405)	(2,118)
Plan assets assumed on acquisition	998	2,502
Foreign currency exchange rate changes	(29,721)	(5,564)
Other	(558)	(425)
Ending balance	$ 97,158	$ 138,876

XML

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, 2014	Dec. 31, 2013
Defined Benefit Plan, Plans with Benefit Obligations in Excess of Plan Assets [Abstract]
Benefit obligation	$ 90,042	$ 88,140
Fair value of plan assets	64,631	71,955
Accumulated benefit obligation	60,828	1,319
Fair value of plan assets	$ 55,095	$ 689

XML

Segment Reporting - Segment Results Information (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Segment Reporting Information [Line Items]
Revenues	$ 1,993,920	$ 1,830,085	$ 1,980,771
Voyage expenses	(127,847)	(112,218)	(138,283)
Vessel operating expenses	(809,319)	(806,152)	(813,326)
Time-charter hire expense	(67,219)	(103,646)	(130,739)
Depreciation and amortization	(422,904)	(431,086)	(455,898)
General and administrative	(140,917)	(140,958)	(144,296)
Asset impairments	(4,759)	(167,605)	(432,196)
Loan loss (provisions) recoveries	2,521	(748)	(1,886)
Net gain (loss)on sale of vessels and equipment	13,509	1,995	(6,975)
Restructuring recoveries (charges)	(9,826)	(6,921)	(7,565)
Income (loss) from vessel operations	427,159	62,746	(150,393)
Shuttle Tanker, FSO and Offshore Support Segment [Member]
Segment Reporting Information [Line Items]
Revenues	608,068	583,201	616,295
Voyage expenses	(106,291)	(99,111)	(104,382)
Vessel operating expenses	(191,173)	(182,973)	(196,021)
Time-charter hire expense	(31,090)	(56,682)	(56,989)
Depreciation and amortization	(111,891)	(116,376)	(125,104)
General and administrative	(35,665)	(37,529)	(36,484)
Asset impairments	(4,759)	(76,782)	(28,830)
Net gain (loss)on sale of vessels and equipment	3,121		(1,112)
Restructuring recoveries (charges)	812	(2,123)	(652)
Income (loss) from vessel operations	131,132	11,625	66,721
FPSO Segment [Member]
Segment Reporting Information [Line Items]
Revenues	614,463	567,620	581,215
Voyage expenses	(756)		(232)
Vessel operating expenses	(370,397)	(364,986)	(354,020)
Depreciation and amortization	(157,829)	(151,365)	(135,413)
General and administrative	(57,915)	(51,891)	(45,139)
Loan loss (provisions) recoveries	2,521	(2,634)
Net gain (loss)on sale of vessels and equipment	935	1,338
Income (loss) from vessel operations	31,022	(1,918)	46,411
Liquefied Gas Segment [Member]
Segment Reporting Information [Line Items]
Revenues	325,707	298,228	291,712
Voyage expenses	(1,913)	(602)	(283)
Vessel operating expenses	(68,839)	(61,471)	(54,773)
Depreciation and amortization	(71,712)	(71,485)	(69,064)
General and administrative	(27,434)	(19,597)	(18,643)
Income (loss) from vessel operations	155,809	145,073	148,949
Conventional Tanker [Member]
Segment Reporting Information [Line Items]
Revenues	445,682	381,036	491,549
Voyage expenses	(18,887)	(12,505)	(33,386)
Vessel operating expenses	(178,910)	(196,722)	(208,512)
Time-charter hire expense	(36,129)	(46,964)	(73,750)
Depreciation and amortization	(81,472)	(91,860)	(126,317)
General and administrative	(19,903)	(31,941)	(44,030)
Asset impairments		(90,823)	(403,366)
Loan loss (provisions) recoveries		1,886	(1,886)
Net gain (loss)on sale of vessels and equipment	9,453	657	(5,863)
Restructuring recoveries (charges)	(10,638)	(4,798)	(6,913)
Income (loss) from vessel operations	$ 109,196	$ (92,034)	$ (412,474)

XML

Fair Value Measurements - Fair Value of Financial Instruments and Other Non-Financial Assets (Parenthetical) (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Fair Value Disclosures [Abstract]
Fair value of interest rate swap agreements	$ 24.5	$ 22.0

XML

Segment Reporting (Tables)

12 Months Ended

Dec. 31, 2014

Segment Reporting [Abstract]

Segment Results Information

The following tables present results for these segments for the years ended December 31, 2014, 2013, and 2012.

Year ended December 31, 2014	Shuttle Tanker, FSO and Offshore Support Segment			FPSO Segment			Liquefied Gas Segment			Conventional Tanker Segment			Total
	$			$			$			$			$
Revenues		608,068			614,463			325,707			445,682			1,993,920
Voyage expenses		(106,291	)		(756	)		(1,913	)		(18,887	)		(127,847	)
Vessel operating expenses		(191,173	)		(370,397	)		(68,839	)		(178,910	)		(809,319	)
Time-charter hire expense		(31,090	)		—			—			(36,129	)		(67,219	)
Depreciation and amortization		(111,891	)		(157,829	)		(71,712	)		(81,472	)		(422,904	)
General and administrative (1)		(35,665	)		(57,915	)		(27,434	)		(19,903	)		(140,917	)
Asset impairments		(4,759	)		—			—			—			(4,759	)
Loan loss recoveries		—			2,521			—			—			2,521
Net gain on sale of vessels and equipment		3,121			935			—			9,453			13,509
Restructuring recoveries (charges)		812			—			—			(10,638	)		(9,826	)
Income from vessel operations		131,132			31,022			155,809			109,196			427,159
Year ended December 31, 2013	Shuttle Tanker, FSO and Offshore Support Segment			FPSO Segment			Liquefied Gas Segment			Conventional Tanker Segment			Total
	$			$			$			$			$
Revenues		583,201			567,620			298,228			381,036			1,830,085
Voyage expenses		(99,111	)		—			(602	)		(12,505	)		(112,218	)
Vessel operating expenses		(182,973	)		(364,986	)		(61,471	)		(196,722	)		(806,152	)

Time-charter hire expense		(56,682	)		—			—			(46,964	)		(103,646	)
Depreciation and amortization		(116,376	)		(151,365	)		(71,485	)		(91,860	)		(431,086	)
General and administrative (1)		(37,529	)		(51,891	)		(19,597	)		(31,941	)		(140,958	)
Asset impairments		(76,782	)		—			—			(90,823	)		(167,605	)
Loan loss (provisions) recoveries		—			(2,634	)		—			1,886			(748	)
Net gain on sale of vessels and equipment		—			1,338			—			657			1,995
Restructuring charges		(2,123	)		—			—			(4,798	)		(6,921	)
Income (loss) from vessel operations		11,625			(1,918	)		145,073			(92,034	)		62,746
Year ended December 31, 2012	Shuttle Tanker, FSO and Offshore Support Segment			FPSO Segment			Liquefied Gas Segment			Conventional Tanker Segment			Total
	$			$			$			$			$
Revenues		616,295			581,215			291,712			491,549			1,980,771
Voyage expenses		(104,382	)		(232	)		(283	)		(33,386	)		(138,283	)
Vessel operating expenses		(196,021	)		(354,020	)		(54,773	)		(208,512	)		(813,326	)
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 (1)		(36,484	)		(45,139	)		(18,643	)		(44,030	)		(144,296	)
Asset impairments		(28,830	)		—			—			(403,366	)		(432,196	)
Loan loss provisions		—			—			—			(1,886	)		(1,886	)
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	)

(1) 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, 2014		December 31, 2013
	$		$
Shuttle tanker, FSO and offshore support segment		2,055,348		1,947,905
FPSO segment		3,442,109		2,836,998
Liquefied gas segment		3,401,167		3,616,044
Conventional tanker segment		1,538,074		1,874,101
Cash		806,904		614,660
Accounts receivable and other assets		620,610		665,993
Consolidated total assets		11,864,212		11,555,701

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, 2014			Year Ended December 31, 2013			Year Ended December 31, 2012
Petroleo Brasileiro SA (1)	$	248.2 or 12	%	$	244.3 or 13	%	$	289.3 or 15	%
Statoil ASA (1)	$	239.8 or 12	%	$	250.5 or 14	%	$	299.1 or 15	%
BP PLC (2)		(3	)	$	182.5 or 10	%		(3	)

(1) Shuttle tanker, FSO and offshore support and conventional tanker segments

(2) Shuttle tanker, FSO and offshore support, liquefied gas and conventional tanker segments

(3) Less than 10%

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Equity Accounted Investments - Additional Information (Detail) Share data in Millions, except Per Share data, unless otherwise specified	12 Months Ended				12 Months Ended				1 Months Ended		1 Months Ended	12 Months Ended						12 Months Ended		12 Months Ended				1 Months Ended						12 Months Ended		1 Months Ended	12 Months Ended						0 Months Ended	1 Months Ended			1 Months Ended				0 Months Ended
	Dec. 31, 2014 USD ($)	Dec. 31, 2013 USD ($)	Dec. 31, 2012 USD ($)	Dec. 31, 2014 Remora AS [Member]	Dec. 31, 2014 Newbuildings [Member] USD ($)	Dec. 31, 2014 FPSO [Member] Itajai Fpso Joint Venture [Member]	Dec. 31, 2014 Tanker Investments Limited [Member] Vessel	Oct. 31, 2014 Tanker Investments Limited [Member]	Feb. 29, 2012 Teekay LNG-Marubeni Joint Venture [Member] USD ($) Vessel	Dec. 31, 2014 Teekay LNG-Marubeni Joint Venture [Member]	Oct. 31, 2014 Odebrecht Oil & Gas S.A. [Member] USD ($)	Dec. 31, 2014 Odebrecht Oil & Gas S.A. [Member]	Jun. 30, 2013 Odebrecht Oil & Gas S.A. [Member] FPSO [Member]	Dec. 31, 2014 BG Joint Venture [Member] Maximum [Member]	Dec. 31, 2014 Exmar LPG BVBA [Member]	Nov. 01, 2012 Exmar LPG BVBA [Member] Charters-in [Member] Vessel	Feb. 28, 2013 Exmar LPG BVBA [Member] Exmar [Member]	Dec. 31, 2014 Angola Joint Venture [Member] m3	Dec. 31, 2014 SkaugenPetroTrans [Member]	Dec. 31, 2014 RasGas 3 [Member] Vessel	Dec. 31, 2014 Sevan Marine [Member] USD ($)	Dec. 31, 2013 Sevan Marine [Member] USD ($)	Nov. 30, 2011 Sevan Marine [Member] USD ($)	Nov. 30, 2011 Sevan Marine [Member] FPSO [Member] Vessel	Jul. 31, 2014 Teekay LNG [Member] Metric_Tons Trains	Jul. 31, 2014 Teekay LNG [Member] Yamal LNG [Member] Vessel	Jul. 31, 2014 Teekay LNG [Member] Russia-based Novatek OAO [Member]	Jul. 31, 2014 Teekay LNG [Member] France-based Total S.A. [Member]	Jul. 31, 2014 Teekay LNG [Member] China-based China National Petroleum Corporation [Member]	Dec. 31, 2014 Teekay LNG [Member] Exmar [Member] Vessel	Dec. 31, 2014 Teekay LNG [Member] Newbuildings [Member] Vessel	Jun. 30, 2014 Teekay LNG [Member] BG Joint Venture [Member] Newbuildings [Member] Shipbuilding supervision and crew training services [Member] USD ($) m3 Vessel	Dec. 31, 2014 Teekay LNG [Member] BG Joint Venture [Member] Newbuildings [Member] Shipbuilding supervision and crew training services [Member] USD ($) Vessel	Dec. 31, 2014 Teekay LNG [Member] Exmar LPG BVBA [Member] Vessel	Feb. 28, 2013 Teekay LNG [Member] Exmar LPG BVBA [Member]	Dec. 31, 2014 Teekay LNG [Member] Exmar LPG BVBA [Member] Newbuildings [Member] Vessel	Dec. 31, 2014 Teekay LNG [Member] Angola Joint Venture [Member]	Dec. 31, 2014 Teekay Tankers [Member] Wah Kwong [Member]	Jan. 23, 2014 Teekay Tankers [Member] Tanker Investments Limited [Member] USD ($)	Oct. 31, 2014 Teekay Tankers [Member] Tanker Investments Limited [Member]	Jan. 31, 2014 Teekay Tankers [Member] Tanker Investments Limited [Member] USD ($)	Mar. 31, 2014 Teekay Tankers [Member] Tanker Investments Limited [Member]	Oct. 31, 2014 Teekay Tankers [Member] Tanker Investments Limited [Member] Common Stock [Member] USD ($)	Jan. 31, 2014 Teekay Tankers [Member] Tanker Investments Limited [Member] Common Stock [Member]	Oct. 31, 2014 Teekay Tankers [Member] Tanker Investments Limited [Member] Common Stock [Member] Maximum [Member] USD ($)	Oct. 31, 2014 Teekay Tankers [Member] Tanker Investments Limited [Member] Common Stock [Member] Share Repurchase Program October Two Thousand And Fourteen [Member] NOK	May 02, 2013 Teekay Offshore [Member] USD ($)	Jun. 30, 2013 Teekay Offshore [Member] FPSO [Member]
Schedule of Equity Method Investments [Line Items]
Operating lease arrangement period, lessor						9 years						12 years																					20 years
Equity method investment, ownership interest	16.05%			49.00%			16.00%	8.94%	52.00%	52.00%	50.00%		50.00%	30.00%	50.00%			33.00%	50.00%	40.00%	43.00%	43.00%	40.00%			50.00%				50.00%	33.00%			50.00%			40.00%	50.00%			20.00%	13.00%						50.00%
Number of vessels									6											4				2		6				2	4	4	4
Ownership percentage																											60.00%	20.00%	20.00%
Number of LNG trains																									3
Total expected capacity of trains																									16,500,000
Volume of vessels																		160,400														174,000
Expected cost of project					$ 2,800,000,000						$ 1,000,000,000																					$ 1,000,000,000	$ 1,000,000,000
Purchase of common stock																																									5.0		0.9	5.0
Issuance of equity private placement																																							250,000,000
Equity method investment																																									50,000,000
Percentage of ownership																																								2.43%
Average price per share																																														68.49
Combined interest of shares held in investment owned	16.05%																																							15.43%
Common stock repurchased value		12,000,000																																									15,100,000
Common stock repurchase, amount authorized																																													30,000,000
Number of vessels							20									4																		20		9
Co-venturer interest in joint venture									48.00%								50.00%																		50.00%
Joint Venture interest in acquired business									100.00%
Acquisition cost									1,300,000,000																																						253,000,000
Acquisition cost																							25,000,000
Quoted market value of investment of existing contract																					61,400,000	94,300,000
Equity income	128,114,000	136,538,000	79,211,000
Unrealized gain (loss) on interest rate swaps	$ 1,100,000	$ 31,200,000	$ 5,300,000

XML

Income Taxes - Components of Company's Deferred Tax Assets and Liabilities (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Deferred tax assets:
Vessels and equipment	$ 43,268	$ 73,750
Tax losses carried forward	360,547	427,656
Other	28,973	32,012
Total deferred tax assets	432,788	533,418
Deferred tax liabilities:
Vessels and equipment	12,514	19,555
Long-term debt	2,295	22,008
Other	19,954	30,519
Total deferred tax liabilities	34,763	72,082
Net deferred tax assets	398,025	461,336
Valuation allowance	(385,431)	(442,504)
Net deferred tax assets	$ 12,594	$ 18,832

XML

Investments - Teekay LNG - Yamal LNG Joint Venture - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	1 Months Ended	12 Months Ended
	Jul. 31, 2014 m3 Vessel	Dec. 31, 2014
Net Investment Income [Line Items]
Equity method investment, ownership interest		16.05%
Maximum icebreaking capabilities in meters	2.1
Teekay LNG [Member]
Net Investment Income [Line Items]
Number of LNG trains	3
Expected capacity of trains	16,500,000
Teekay LNG [Member] | Russia-based Novatek OAO [Member]
Net Investment Income [Line Items]
Partnership owns percentage in joint venture	60.00%
Teekay LNG [Member] | France-based Total S.A. [Member]
Net Investment Income [Line Items]
Ownership percentage	20.00%
Teekay LNG [Member] | China-based China National Petroleum Corporation [Member]
Net Investment Income [Line Items]
Ownership percentage	20.00%
Teekay LNG [Member] | Yamal LNG Joint Venture [Member]
Net Investment Income [Line Items]
Equity method investment, ownership interest	50.00%	50.00%
Number of vessels	6
Volume of vessels	172,000
Fully built-up cost	$ 2,100	$ 2,100
Due from joint venture		$ 95.3

XML

Other (Loss) Income

12 Months Ended

Dec. 31, 2014

Other Income and Expenses [Abstract]

Other (Loss) Income

14. Other (Loss) Income

	Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,
	2014			2013			2012
	$			$			$
TIL stock purchase warrants received (note 15)		6,839			—			—
Gain on sale of other assets		—			—			2,217
Volatile organic compound emission plant lease income		24			238			1,220
Impairment and loss on sale of marketable securities		(1,322	)		(2,062	)		(2,560	)
Miscellaneous income (loss)		1,006			9,229			(511	)
Loss on bond repurchases		(7,699	)		(1,759	)		—
Other (loss) income		(1,152	)		5,646			366

XML

Investments (Tables) (Teekay Offshore [Member])

12 Months Ended

Dec. 31, 2014

Summary of Preliminary and Finalized Fair Values of Assets Acquired and Liabilities Assumed

The following table summarizes the preliminary estimates of fair values of the Logitel assets acquired and liabilities assumed by Teekay Offshore on the acquisition date. Teekay Offshore is continuing to obtain information to finalize estimated fair value of the Logitel assets acquired and liabilities assumed and expects to complete this process as soon as practicable, but no later than one year from the acquisition date.

(in thousands of U.S. dollars)	As at August 11, 2014
	$
ASSETS
Cash and cash equivalents		8,089
Prepaid expenses		640
Advances on newbuilding contracts		46,809
Total assets acquired		55,538
LIABILITIES
Accrued liabilities		4,098
Long-term debt		26,270
Total liabilities assumed		30,368
Net assets acquired		25,170
Cash consideration		4,000
Contingent consideration		21,170

ALP Maritime Services B.V [Member]

Summary of Preliminary and Finalized Fair Values of Assets Acquired and Liabilities Assumed

The following table summarizes the finalized estimates of fair values of the ALP assets acquired and liabilities assumed by Teekay Offshore on the acquisition date.

	As at
(in thousands of U.S. dollars)	March 14, 2014
	$
ASSETS
Cash and cash equivalents		294
Other current assets		404
Advances on newbuilding contracts		164
Other assets - long-term		395
Goodwill		2,032
Total assets acquired		3,289
LIABILITIES
Current liabilities		387
Other long-term liabilities		286
Total liabilities assumed		673
Net assets acquired		2,616
Consideration		2,616

XML

Fair Value Measurements - Fair Value of Financial Instruments and Other Non-Financial Assets (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cross currency interest swap agreement	$ 18,407
Derivatives not designated as a cash flow hedge	14,415	69,797
Assets held for sale		176,247
Investment in term loans		211,579
Loans to equity-accounted investees and joint venture partners - Current	26,209	37,019
Loans to equity-accounted investees and joint venture partners - Long-term	227,217	132,229
Liabilities associated with assets held for sale		(168,007)
Long-term debt	(6,736,498)	(6,109,470)
Interest rate swap agreements [Member] | Derivatives not designated as a cash flow hedge [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivatives not designated as a cash flow hedge	5,101	69,785
Foreign currency contracts [Member] | Derivatives not designated as a cash flow hedge [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivatives not designated as a cash flow hedge		12
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	927,679	1,119,966
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 - assets	1,051	91,415
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 - liabilities	(406,783)	(410,470)
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	(221,391)	(52,219)
Fair Value Asset (Liability) [Member] | Recurring [Member] | Level 2 [Member] | Foreign currency contracts [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cross currency interest swap agreement	(18,407)	(1,480)
Fair Value Asset (Liability) [Member] | Recurring [Member] | Level 3 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Logitel contingent consideration (see below)	(21,448)
Fair Value Asset (Liability) [Member] | Recurring [Member] | Level 3 [Member] | Warrant [Member] | Derivatives not designated as a cash flow hedge [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivatives not designated as a cash flow hedge	9,314
Fair Value Asset (Liability) [Member] | Non-recurring [Member] | Level 2 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Vessels and equipment		17,250
Assets held for sale		176,247
Fair Value Asset (Liability) [Member] | Fair Value Measurements Other [Member] | Level 1 [Member] | Public [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term debt	(1,574,440)	(1,376,829)
Fair Value Asset (Liability) [Member] | Fair Value Measurements Other [Member] | Level 2 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Liabilities associated with assets held for sale		(168,007)
Long-term receivable included in other assets	15,758
Fair Value Asset (Liability) [Member] | Fair Value Measurements Other [Member] | Level 2 [Member] | Private [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term debt	(5,094,857)	(4,582,274)
Fair Value Asset (Liability) [Member] | Fair Value Measurements Other [Member] | Level 3 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Investment in term loans		209,570
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	927,679	1,119,966
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 - assets	1,051	91,415
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 - liabilities	(406,783)	(410,470)
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	(221,391)	(52,219)
Carrying Amount Asset (Liability) [Member] | Recurring [Member] | Level 2 [Member] | Foreign currency contracts [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cross currency interest swap agreement	(18,407)	(1,480)
Carrying Amount Asset (Liability) [Member] | Recurring [Member] | Level 3 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Logitel contingent consideration (see below)	(21,448)
Carrying Amount Asset (Liability) [Member] | Recurring [Member] | Level 3 [Member] | Warrant [Member] | Derivatives not designated as a cash flow hedge [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivatives not designated as a cash flow hedge	9,314
Carrying Amount Asset (Liability) [Member] | Non-recurring [Member] | Level 2 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Vessels and equipment		17,250
Assets held for sale		176,247
Carrying Amount Asset (Liability) [Member] | Fair Value Measurements Other [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Loans to equity-accounted investees and joint venture partners - Long-term	227,217	132,229
Carrying Amount Asset (Liability) [Member] | Fair Value Measurements Other [Member] | Level 1 [Member] | Public [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term debt	(1,554,609)	(1,313,358)
Carrying Amount Asset (Liability) [Member] | Fair Value Measurements Other [Member] | Level 2 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Liabilities associated with assets held for sale		(168,007)
Long-term receivable included in other assets	15,758
Carrying Amount Asset (Liability) [Member] | Fair Value Measurements Other [Member] | Level 2 [Member] | Private [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term debt	(5,181,889)	(4,796,112)
Carrying Amount Asset (Liability) [Member] | Fair Value Measurements Other [Member] | Level 3 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Investment in term loans		211,579
Loans to equity-accounted investees and joint venture partners - Current	$ 26,209	$ 37,019

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Commitments and Contingencies - Additional Information - Redeemable Non-Controlling Interest (Detail) (Teekay Offshore [Member], USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2014	Dec. 31, 2013
Redeemable Noncontrolling Interest [Line Items]
Ownership percentage		27.30%	29.30%
TOTAL EQUITY Non-controlling Interests [Member]
Redeemable Noncontrolling Interest [Line Items]
Value of shuttle tanker contributed by unrelated party in exchange of equity interest in subsidiary	$ 35,000
Ownership percentage	67.00%
Percentage of non-controlling interest owner's share	33.00%

XML

Commitments and Contingencies

12 Months Ended

Dec. 31, 2014

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

16. Commitments and Contingencies

a) Vessels under Construction

As at December 31, 2014, the Company was committed to the construction of eight LNG carriers, four long-distance towing and offshore installation vessels, three FAUs, one FSO conversion and one FPSO upgrade for a total cost of approximately $2.8 billion, excluding capitalized interest and other miscellaneous construction costs. Two LNG carriers are scheduled for delivery in 2016, three LNG carriers are scheduled for delivery in 2017 and three LNG carriers are scheduled for delivery in 2018, four long-distance towing and offshore installation vessels are scheduled for delivery in 2016, one FAU delivered in February 2015 and two FAUs are scheduled for delivery in 2016, the one FSO conversion is scheduled for completion in early-2017 and the one FPSO upgrade is scheduled for completion in the first quarter of 2016. As at December 31, 2014, payments made towards these commitments totaled $421.9 million (excluding $9.6 million of capitalized interest and other miscellaneous construction costs) and the carrying value of completed units not yet in service was $1.3 billion. As at December 31, 2014, the remaining payments required to be made under these newbuilding and conversion capital commitments were $616.8 million (2015), $890.0 million (2016), $517.5 million (2017) and $350.9 million (2018).

b) Purchase Obligations

As at December 31, 2014, Teekay Offshore was committed to the purchase of six long-distance towing and offshore installation vessels for a total cost of approximately $220 million. Four long-distance towing and offshore installation vessels delivered in the first and early in the second quarter of 2015, and two long-distance towing and offshore installation vessels are scheduled for delivery in the rest of second quarter of 2015.

In December 2014, Teekay Tankers signed an agreement to acquire one 2008-built Aframax tanker for a purchase price of $37 million and placed $3.7 million in an escrow fund related to this purchase. In December 2014, Teekay Tankers also signed an agreement to acquire four modern LR2 vessels for a total purchase price of $193.3 million. Teekay Tankers took delivery of all the vessels during the first quarter of 2015.

c) Joint Ventures

As described in Note 3c, Teekay LNG has an ownership interest in the BG Joint Venture and, as part of the acquisition, agreed to assume BG’s obligation to provide shipbuilding supervision and crew training services for the four LNG carrier newbuildings up to their delivery dates pursuant to a ship construction support agreement. As at December 31, 2014, Teekay LNG had incurred $0.8 million relating to shipbuilding and crew training services. The remaining estimated amounts to be incurred for the shipbuilding and crew training obligation, net of the reimbursement from BG, are $5.2 million (2015), $4.2 million in (2016), $3.8 million in (2017), $4.0 million in (2018) and $0.4 million (2019).

In addition, the BG Joint Venture secured a $787.0 million debt facility to finance a portion of the estimated fully built-up cost of $1.0 billion for its four newbuilding carriers, with the remaining portion to be financed pro-rata based on ownership interests by Teekay LNG and the other partners. As at December 31, 2014, Teekay LNG’s proportionate share of the remaining newbuilding installments, net of debt financing, totaled $4.9 million (2015), $7.9 million in (2016), $15.0 million in (2017), $17.3 million in (2018) and $6.3 million (2019).

As described in Note 3b, Teekay LNG has a 50% ownership interest in the Yamal LNG Joint Venture which will build six 172,000-cubic meter ARC7 LNG carrier newbuildings for an estimated total fully built-up cost of approximately $2.1 billion. As at December 31, 2014, Teekay LNG’s proportionate costs incurred under these newbuilding contracts totaled $95.3 million and Teekay LNG’s proportionate share of the estimated remaining costs to be incurred were $23.7 million (2015), $33.9 million in (2016), $84.4 million in (2017), $344.7 million in (2018), $240.2 million (2019), and $201.1 million (thereafter). The Yamal LNG Joint Venture intends to secure debt financing for 70% to 80% of the fully built-up cost of the six newbuildings.

In October 2014, Teekay Offshore sold a 1995-built shuttle tanker, the Navion Norvegia, to a 50/50 joint venture with Brazilian-based Odebrecht Oil & Gas S.A. (a member of the Odebrecht group) (or Odebrecht). The vessel is committed to a new FPSO conversion for the Libra field located in the Santos Basin offshore Brazil. The conversion project will be completed at Sembcorp Marine’s Jurong Shipyard in Singapore and the FPSO unit is scheduled to commence operations in early-2017 under a 12-year fixed-rate contract with Petrobras. The FPSO conversion is expected to cost approximately $1.0 billion. As at December 31, 2014, payments made towards these commitments totaled $35.0 million and the remaining payments required to be made are $398.6 million (2015) and $552.0 million (2016). Teekay Offshore intends to finance its share of the conversion through its existing liquidity and through long-term debt financing within the joint venture. The joint venture secured a $248 million loan late-2014 and expects to secure additional long-term debt financing for the FPSO unit prior to its scheduled delivery.

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.

Navion Hispania Incident

On November 13, 2006, one of Teekay Offshore’s shuttle tankers, 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 Teekay Offshore. The Navion Hispania and the Njord Bravo both incurred damage as a result of the collision. In November 2007, Navion Offshore Loading AS (or NOL) and Teekay Navion Offshore Loading Pte Ltd. (or TNOL), subsidiaries of Teekay Offshore, and Teekay Shipping Norway AS (or TSN), a subsidiary of Teekay, were named as co-defendants in a legal action filed by Norwegian Hull Club (the hull and machinery insurers of the Njord Bravo), several other insurance underwriters and various licensees in the Njord field.

Following a lower court ruling, the appellate court in June 2013 held that NOL, TNOL and TSN were jointly and severally responsible towards the plaintiffs for all the losses as a result of the collision, plus interests accrued on the amount of damages. In addition, Statoil was held not to be required to indemnify NOL, TNOL and TSN for the losses. NOL, TNOL and TSN were also held liable for legal costs associated with court proceedings. Teekay Offshore and Teekay maintain protection and indemnity insurance for damages to the Navion Hispania and insurance for collision-related costs and claims. Thus, Teekay Offshore recognized a total liability of NOK 216,400,000 (approximately $29.0 million) of damages and legal costs and a receivable of NOK 216,400,000 (approximately $29.0 million) as at December 31, 2013.

In 2014, Teekay Offshore and the insurer entered into a settlement agreement with the plaintiffs, which reduced Teekay Offshore’s liability and related receivable to NOK 117,500,000 (approximately $15.8 million). The insurer paid the settlement amount to the plaintiffs during November 2014. There is no liability or receivable recorded on the Company’s consolidated balance sheets as at December 31, 2014.

Teekay Nakilat Capital Lease

As described under Note 10, the Teekay Nakilat Joint Venture was the lessee under three separate 30-year capital lease arrangements with a third party for the three RasGas II LNG Carriers. Under the terms of the leasing arrangements in respect of the RasGas II LNG Carriers, the lessor claimed 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 were assumed by the lessee, in this case the Teekay Nakilat Joint Venture. Lease payments under the lease arrangements were based on certain tax and financial assumptions at the commencement of the leases and subsequently adjusted to maintain its agreed after-tax margin. On December 22, 2014, the Teekay Nakilat Joint Venture terminated the leasing of the RasGas II LNG Carriers. However, the Teekay Nakilat Joint Venture remains obligated to the lessor to maintain the lessor’s agreed after-tax margin from the commencement of the lease to the lease termination date.

The UK taxing authority (or HMRC) has been challenging the use of similar lease structures. One of those challenges resulted in a court decision from the First Tribunal on January 2012 regarding a similar financial lease of an LNG carrier that ruled in favor of the taxpayer, as well as a 2013 decision from the Upper Tribunal that upheld the 2012 verdict. However, HMRC appealed the 2013 decision to the Court of Appeal and in August 2014, HMRC was successful in having the judgment of the First Tribunal (in favor of the taxpayer) set aside. The matter will now be reconsidered by the First Tribunal, taking into account the appellate court’s comments on the earlier judgment. If the lessor of the RasGas II LNG Carriers were to lose on a similar claim from HMRC, which Teekay LNG does not consider to be a probable outcome, Teekay LNG’s 70% share of the potential exposure in the Teekay Nakilat Joint Venture is estimated to be approximately $60 million. Such estimate is primarily based on information received from the lessor.

Petrojarl Banff Storm Damage

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, Teekay declared force majeure under the customer contract on December 8, 2011 and the Banff FPSO unit commenced a period of off-hire while the necessary repairs and upgrades were completed and the weather permitted re-installation of the unit on the Banff field. The Company does not have off-hire insurance covering the Banff FPSO. The repairs and upgrades were completed in 2014, and the Banff FPSO unit resumed production on the Banff field in July 2014.

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 its insurance coverage, subject to a $0.8 million deductible and the other terms and conditions of the applicable policies. In addition, the Company incurred 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 to the extreme weather and sea states experienced during the December 7, 2011 storm. The Apollo Spirit was operating on the Banff field as a storage tanker and returned to service on the Banff field at the same time as the Banff FPSO unit. The total of these capital upgrade costs was approximately $181 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. Any capital upgrade costs not recovered from the charterer are expected to 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, 2014.

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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Investments - Teekay Offshore Acquisition of ALP Maritime Services B.V. - Summary of Preliminary and Finalized Fair Values of Assets Acquired and Liabilities Assumed (Detail) (USD $) In Thousands, unless otherwise specified	0 Months Ended		1 Months Ended
	May 02, 2013	Mar. 14, 2014	Mar. 14, 2014	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
ASSETS
Goodwill				$ 168,571	$ 166,539	$ 166,539
LIABILITIES
Other long-term liabilities				149,998	139,676
Teekay Offshore [Member]
LIABILITIES
Cash consideration	253,000
Teekay Offshore [Member] | ALP Maritime Services B.V [Member]
ASSETS
Cash and cash equivalents		294	294
Other current assets		404	404
Advances on newbuilding contracts		164	164
Other assets - long-term		395	395
Goodwill		2,032	2,032
Total assets acquired		3,289	3,289
LIABILITIES
Current liabilities		387	387
Other long-term liabilities		286	286
Total liabilities assumed		673	673
Net assets acquired		2,616	2,616
Cash consideration		$ 2,616	$ 2,616

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Other (Loss) Income - Summary of Other (Loss) Income (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Other Income and Expenses [Abstract]
TIL stock purchase warrants received	$ 6,839
Gain on sale of other assets			2,217
Volatile organic compound emission plant lease income	24	238	1,220
Impairment and loss on sale of marketable securities	(1,322)	(2,062)	(2,560)
Miscellaneous income (loss)	1,006	9,229	(511)
Loss on bond repurchases	(7,699)	(1,759)
Other (loss) income	$ (1,152)	$ 5,646	$ 366

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Consolidated Statements of Cash Flows (Parenthetical) (Teekay Offshore [Member], USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014
ALP Maritime Services B.V [Member]
Cash acquired	$ 294
Logitel Offshore Holdings [Member]
Cash acquired	$ 8,089

XML

Consolidated Statements of Comprehensive Income (Loss) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ 124,002	$ 35,480	$ (311,116)
Other comprehensive (loss) income before reclassifications
Unrealized loss on marketable securities	(1,151)	(2,233)	(1,904)
Unrealized (loss) gain on qualifying cash flow hedging instruments	(3,082)	(836)	2,412
Pension adjustments, net of taxes	(7,637)	(3,640)	6,698
Foreign exchange gain on currency translation	174	740	1,144
Amounts reclassified from accumulated other comprehensive loss To other income:
Impairment of marketable securities	1,322	2,062	2,560
To general and administrative expenses:
Realized loss (gain) on qualifying cash flow hedging instruments		257	(1,435)
Settlement of defined benefit pension plan	(3,332)	974
To equity income:
Realized loss on qualifying cash flow hedging instruments	1,551	405
Other comprehensive (loss) income	(12,155)	(2,271)	9,475
Comprehensive income (loss)	111,847	33,209	(301,641)
Less: Comprehensive (income) loss attributable to non-controlling interests	(177,713)	(150,368)	150,601
Comprehensive loss attributable to shareholders of Teekay Corporation	$ (65,866)	$ (117,159)	$ (151,040)

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Operating and Direct Financing Leases

12 Months Ended

Dec. 31, 2014

Text Block [Abstract]

Operating and Direct Financing Leases

9. Operating and Direct Financing Leases

Charters-in

As at December 31, 2014, minimum commitments to be incurred by the Company under vessel operating leases by which the Company charters-in vessels were approximately $119.9 million, comprised of $76.5 million (2015), $29.1 million (2016), $13.9 million (2017) and $0.4 million (2018). 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, 2014, minimum scheduled future revenues to be received by the Company on time-charters and bareboat charters then in place were approximately $10.2 billion, comprised of $1.4 billion (2015), $1.3 billion (2016), $1.3 billion (2017), $1.2 billion (2018), $1.1 billion (2019) and $4.0 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, 2014, revenue from unexercised option periods of contracts that existed on December 31, 2014 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, 2014, was $6.8 billion (2013—$6.4 billion). The cost and accumulated depreciation of the vessels employed on operating leases as at December 31, 2014 were $8.9 billion (2013—$8.2 billion) and $2.1 billion (2013—$1.8 billion), respectively.

Operating Lease Obligations

Teekay Tangguh Joint Venture

As at December 31, 2014, the Teekay Tangguh Joint Venture was a party to operating leases (or Head Leases) whereby it is leasing its two LNG carriers (or the Tangguh LNG Carriers) to a third party company. The Teekay Tangguh Joint Venture is then leasing back the LNG carriers from the same third party company (or the 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 Joint Venture. 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 Joint Venture’s carrying amounts of this tax indemnification guarantee as at December 31, 2014 and December 31, 2013 were $8.4 million and $8.9 million, respectively, and are 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 Joint Venture may terminate the lease arrangements on a voluntary basis at any time. If the lease arrangements terminate, the Teekay Tangguh Joint Venture will be required to make termination payments 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, 2014, 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)
2015		22,188		24,113
2016		21,242		24,113
2017		21,242		24,113
2018		21,242		24,113
2019		21,242		24,113
Thereafter		196,579		223,185
Total	$	303,735	$	343,750

(1) The Head Leases are fixed-rate operating leases while the Subleases have a small variable-rate component. As at December 31, 2014, the Teekay Tangguh Subsidiary had received $206.6 million of aggregate Head Lease receipts and had paid $139.6 million of aggregate Sublease payments. The portion of the Head Lease receipts that have not been recognized into earnings, is deferred and amortized on a straight line basis over the lease terms. As at December 31, 2014, $2.8 million and $44.1 million of Head Lease receipts had been deferred and included in accrued liabilities and other long-term liabilities, respectively, 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 VOC equipment are accounted for as direct financing leases. In addition, in September and November 2013, Teekay LNG acquired two 155,900-cubic meter LNG carriers (or Awilco LNG Carriers) from Norway-based Awilco LNG ASA (or Awilco) and chartered them back to Awilco on a five- and four-year fixed-rate bareboat charter contract (plus a one year extension option), respectively, with Awilco holding a fixed-price purchase obligation at the end of the charter. The bareboat charters with Awilco are accounted for as direct financing leases. The purchase price of each vessel was $205 million less a $51.0 million upfront prepayment of charter hire by Awilco (inclusive of a $1.0 million upfront fee), which is in addition to the daily bareboat charter rate. The following table lists the components of the net investments in direct financing leases:

	December 31,			December 31,
	2014			2013
	$			$
Total minimum lease payments to be received		936,164			1,024,187
Estimated unguaranteed residual value of leased properties		203,465			203,465
Initial direct costs and other		461			1,379
Less unearned revenue		(435,137	)		(501,769	)
Total		704,953			727,262
Less current portion		20,823			21,545
Long-term portion		684,130			705,717

As at December 31, 2014, minimum lease payments to be received by the Company in each of the next five years following 2014 were $80.5 million (2015), $83.9 million (2016), $207.9 million (2017), $173.7 million (2018), and $39.1 million (2019). The VOC equipment leases expired in 2014, the FSO contract is scheduled to expire in 2017, the LNG time-charters are both scheduled to expire in 2029 and the two LNG carriers under the Awilco LNG carrier leases expire in 2017 and 2018.

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Capital Stock - Additional Information (Detail) (USD $) In Millions, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2008
Class of Stock [Line Items]
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
Number of common shares issued related to the exercise of share based compensation during the period	1,800,000	1,300,000
Common stock, share issued	73,299,702	71,528,599
Preferred stock, share issued	0	0
Common stock, share outstanding	72,500,502	70,729,399
Minimum percentage of shares acquired in exercisable rights	20.00%
Minimum percentage of common stock acquired by stockholders for higher thresholds	15.00%
Weighted-average grant-date fair value of options granted	$ 11.50	$ 10.54	$ 8.72
Restricted stock units [Member]
Class of Stock [Line Items]
Vesting period of stock option, restricted stock units and performance shares	3 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.
Options granted	81,388	158,957	268,595
Fair value of granted stock	$ 4.6	$ 5.4	$ 7.4
Vested restricted stock	261,911	296,798	334,256
Market value of vested restricted stock	8.5	8.8	9.0
Restricted stock or unit expense	5.4	8.1	7.7
Stock granted	149,082	175,206	200,024
Performance shares [Member]
Class of Stock [Line Items]
Number of times performance units to vest, Minimum	0
Options granted	50,689	54,773	67,870
Fair value of granted stock	3.4	2.3	2.5
Performance shares [Member] | Minimum [Member]
Class of Stock [Line Items]
Vesting period of stock option, restricted stock units and performance shares	2 years
Performance shares [Member] | Maximum [Member]
Class of Stock [Line Items]
Vesting period of stock option, restricted stock units and performance shares	3 years
Stock Option [Member]
Class of Stock [Line Items]
Common stock, shares reserved for issuance upon exercise of options or equity awards granted or to be granted	4,009,878	4,133,987
Stock option, term	10 years
Vesting period of stock option, restricted stock units and performance shares	3 years
Stock options, granted	15,243	72,810	432,971
Unrecognized compensation cost related to non-vested stock options granted under the Plans	0.3
Expected recognition of compensation related to non-vested stock options granted under the Plans in 2015	0.2
Expected recognition of compensation related to non-vested stock options granted under the Plans in 2016	0.1
Compensation costs	1.0	1.8	2.9
Intrinsic value of options exercised	22.6	22.6	11.9
Intrinsic value of outstanding in-the-money stock options	39.0	51.7
Intrinsic value of exercisable stock options	35.0	44.5
Weighted-average remaining life of options vested and expected to vest	3 years 7 months 6 days	4 years 2 months 12 days
Weighted-average grant-date fair value of options granted	$ 11.50	$ 10.54	$ 8.72
Expected volatility used in computing fair value of options granted	34.70%	53.70%	54.80%
Expected life used in computing fair value of options granted, years	5 years	4 years	4 years
Dividend yield used in computing fair value of options granted	4.40%	4.80%	4.40%
Risk-free interest rate used in computing fair value of options granted	1.60%	0.80%	2.10%
Estimated forfeiture rate used in computing fair value of options granted	12.00%	12.00%	12.00%
Period of historical data used to calculate expected volatility in years	5 years
Stock Option [Member] | Nonvested [Member]
Class of Stock [Line Items]
Weighted average grant date fair value of non-vested options forfeited	0.1	0.1
Restricted Stock Awards [Member]
Class of Stock [Line Items]
Compensation costs	1.0	0.9	0.7
Options granted	18,230	26,412	23,563
Tender Offers [Member]
Class of Stock [Line Items]
Minimum percentage of shares acquired in exercisable rights	20.00%
Common Stock [Member]
Class of Stock [Line Items]
Repurchase of Common stock, shares	0	300,000
Common stock, share outstanding	72,500,502	70,729,339	69,704,000	68,732,000
Common Stock [Member] | Share Repurchase Program Two Thousand And Eight [Member]
Class of Stock [Line Items]
Common stock repurchase, amount authorized					200.0
Common Stock [Member] | Two Thousand Thirteen Repurchase Authorization [Member]
Class of Stock [Line Items]
Repurchase of Common stock, shares	5,200,000
Common stock repurchase, amount authorized	162.3
Common stock repurchase, total remaining amount authorized	$ 37.7

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Operating and Direct Financing Leases - Net Investment in Direct Financing Leases - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2014
Direct Financing Lease [Member]
Property Subject to or Available for Operating Lease [Line Items]
Purchase price of each vessel less upfront prepayment	$ 205.0
Upfront prepayment	51.0
Upfront fee	1.0
Minimum scheduled future revenues to be received by company in next 12 months	80.5
Minimum scheduled future revenues to be received by company in second year	83.9
Minimum scheduled future revenues to be received by company in third year	207.9
Minimum scheduled future revenues to be received by company in fourth year	173.7
Minimum scheduled future revenues to be received by company in fifth year	$ 39.1
Liquefied Natural Gas [Member]
Property Subject to or Available for Operating Lease [Line Items]
Number of capital lease assets	2
FSO [Member]
Property Subject to or Available for Operating Lease [Line Items]
Number of capital lease assets	1
Awilco LNG carriers [Member]
Property Subject to or Available for Operating Lease [Line Items]
Number of vessels	2
Volume of vessels	155,900
Fixed-rate charter period, extension	1 year
Awilco LNG carriers [Member] | Maximum [Member]
Property Subject to or Available for Operating Lease [Line Items]
Capital lease arrangement period, lessor	five-year fixed rate
Awilco LNG carriers [Member] | Minimum [Member]
Property Subject to or Available for Operating Lease [Line Items]
Capital lease arrangement period, lessor	four-year fixed rate

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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, 2014
Head Lease Receipts [Member]
Operating Leased Assets [Line Items]
2015	$ 22,188
2016	21,242
2017	21,242
2018	21,242
2019	21,242
Thereafter	196,579
Total	303,735
Sublease Payments [Member]
Operating Leased Assets [Line Items]
2015	24,113
2016	24,113
2017	24,113
2018	24,113
2019	24,113
Thereafter	223,185
Total	$ 343,750

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Commitments and Contingencies - Additional Information - Banff (Detail) (USD $) In Millions, unless otherwise specified	Dec. 31, 2014
Loss Contingencies [Line Items]
Maximum recovery of capital lease	$ 181
Insurance Claims [Member]
Loss Contingencies [Line Items]
Recovery from deductible insurance coverage	$ 0.8

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Income Taxes - Components of Company's Deferred Tax Assets and Liabilities (Parenthetical) (Detail) (USD $)	12 Months Ended
	Dec. 31, 2014
Income Tax Disclosure [Abstract]
Net operating loss carryforwards	$ 1,460,000,000
Disallowed finance costs	$ 47,000,000
Finance costs carryforward period	18 years

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Pension Benefits - Schedule of Assumptions Used (Detail)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Weighted average assumptions used to determine benefit obligation
Discount rates	2.90%	3.90%
Rate of compensation increase	4.20%	4.70%
Weighted average assumptions used to determine net pension expense
Discount rates	2.90%	3.90%	3.00%
Rate of compensation increase	4.20%	4.70%	5.50%
Expected long-term rates of return	4.00%	4.80%	4.80%

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Commitments and Contingencies - Additional Information - Joint Ventures (Detail) (USD $) In Millions, unless otherwise specified	1 Months Ended	12 Months Ended	1 Months Ended
	Oct. 31, 2014	Dec. 31, 2014	Jul. 31, 2014 Vessel m3	Jun. 30, 2014 Vessel m3
Long-term Purchase Commitment [Line Items]
Joint venture ownership percentage		16.05%
Odebrecht Oil & Gas S.A. [Member]
Long-term Purchase Commitment [Line Items]
Expected cost of project	$ 1,000
Joint venture ownership percentage	50.00%
Payment made towards commitments		35.0
Operating lease arrangement period, lessor		12 years
Purchase obligation due in 2015		398.6
Purchase obligation due in 2016		552.0
Loan secured by joint venture		248
Minimum [Member] | BG Joint Venture [Member]
Long-term Purchase Commitment [Line Items]
Joint venture ownership percentage		20.00%
Maximum [Member] | BG Joint Venture [Member]
Long-term Purchase Commitment [Line Items]
Joint venture ownership percentage		30.00%
Newbuildings [Member]
Long-term Purchase Commitment [Line Items]
Expected cost of project		2,800
Net of financing on newbuilding installments, 2015		616.8
Net of financing on newbuilding installments, 2016		890.0
Net of financing on newbuilding installments, 2017		517.5
Net of financing on newbuilding installments, 2018		350.9
Teekay LNG [Member] | Yamal LNG Joint Venture [Member]
Long-term Purchase Commitment [Line Items]
Number of vessels			6
Expected cost of project		2,100	2,100
Net of financing on newbuilding installments, 2015		23.7
Net of financing on newbuilding installments, 2016		33.9
Net of financing on newbuilding installments, 2017		84.4
Net of financing on newbuilding installments, 2018		344.7
Net of financing on newbuilding installments, 2019		240.2
Joint venture ownership percentage		50.00%	50.00%
Volume of vessels			172,000
Payment made towards commitments		95.3
Net of financing on newbuilding installments, thereafter		201.1
Teekay LNG [Member] | Minimum [Member] | Yamal LNG Joint Venture [Member]
Long-term Purchase Commitment [Line Items]
Secured debt financing percentage		70.00%
Teekay LNG [Member] | Maximum [Member] | Yamal LNG Joint Venture [Member]
Long-term Purchase Commitment [Line Items]
Secured debt financing percentage		80.00%
Teekay LNG [Member] | Newbuildings [Member]
Long-term Purchase Commitment [Line Items]
Number of vessels		4
Joint venture ownership percentage		33.00%
Teekay LNG [Member] | Newbuildings [Member] | Shipbuilding supervision and crew training services [Member] | BG Joint Venture [Member]
Long-term Purchase Commitment [Line Items]
Number of vessels		4		4
Shipbuilding and crew training obligation incurred		0.8
Shipbuilding and crew training obligation in 2015		5.2
Shipbuilding and crew training obligation in 2016		4.2
Shipbuilding and crew training obligation in 2017		3.8
Shipbuilding and crew training obligation in 2018		4.0
Shipbuilding and crew training obligation in 2019		0.4
Debt facility used to finance a portion of estimated fully built-up cost		787.0
Expected cost of project		1,000		1,000
Volume of vessels				174,000
Operating lease arrangement period, lessor		20 years
Teekay LNG [Member] | Newbuildings [Member] | Shipbuilding supervision and crew training services [Member] | BG Joint Venture [Member] | Pro Rata Share [Member]
Long-term Purchase Commitment [Line Items]
Net of financing on newbuilding installments, 2015		4.9
Net of financing on newbuilding installments, 2016		7.9
Net of financing on newbuilding installments, 2017		15.0
Net of financing on newbuilding installments, 2018		17.3
Net of financing on newbuilding installments, 2019		$ 6.3

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Document and Entity Information	12 Months Ended
	Dec. 31, 2014
Document And Entity Information [Abstract]
Document Type	20-F
Amendment Flag	false
Document Period End Date	Dec. 31, 2014
Document Fiscal Year Focus	2014
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	72,500,502

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Supplemental Cash Flow Information - Additional Information (Detail) (USD $)	12 Months Ended			1 Months Ended		3 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Jun. 30, 2014 Vessel	Mar. 31, 2014 Vessel	Mar. 31, 2014
Schedule Of Supplemental Cash Flow [Line Items]
Cash interest paid, including realized interest rate swap settlements	$ 328,200,000	$ 282,400,000	$ 274,200,000
Cash interest paid relating to interest rate swap amendments and terminations	1,300,000	36,000,000	0
Algeciras Spirit and Huelva Spirit [Member]
Schedule Of Supplemental Cash Flow [Line Items]
Sale of vessel	56,200,000
Algeciras Spirit and Huelva Spirit [Member] | Capital Lease Obligations [Member]
Schedule Of Supplemental Cash Flow [Line Items]
Extinguishment of debt	56,200,000
Tenerife Spirit [Member]
Schedule Of Supplemental Cash Flow [Line Items]
Sale of vessel		29,700,000
Tenerife Spirit [Member] | Capital Lease Obligations [Member]
Schedule Of Supplemental Cash Flow [Line Items]
Extinguishment of debt		29,700,000
Teekay Tangguh Joint Venture [Member]
Schedule Of Supplemental Cash Flow [Line Items]
Amount offset to total advances	14,400,000
Teekay LNG [Member] | Skaugen Multigas Subsidiary [Member]
Schedule Of Supplemental Cash Flow [Line Items]
Acquisition cost of vessels and associated fixed-rate contracts	27,000,000
Portion of purchase price paid in cash	21,600,000
Interest-bearing loan amount	5,400,000
Teekay LNG [Member] | Newbuildings [Member]
Schedule Of Supplemental Cash Flow [Line Items]
Number of vessels	4
Teekay LNG [Member] | BG Joint Venture [Member] | Newbuildings [Member] | Shipbuilding supervision and crew training services [Member]
Schedule Of Supplemental Cash Flow [Line Items]
Number of vessels	4			4
Payments to acquire ownership interest				16,500,000
Estimated fair value of the service obligation	33,300,000			33,300,000
Teekay LNG [Member] | BG Joint Venture [Member] | Newbuildings [Member] | Shipbuilding supervision and crew training services [Member] | Principal Amount [Member]
Schedule Of Supplemental Cash Flow [Line Items]
Payments to acquire ownership interest	20,300,000			20,300,000
VLCC [Member]
Schedule Of Supplemental Cash Flow [Line Items]
Number of vessels	3				3
Estimated aggregate fair value of vessels					222,000,000	222,000,000
Interest income recognized						15,200,000
Awilco LNG carriers [Member]
Schedule Of Supplemental Cash Flow [Line Items]
Number of vessels	2
Awilco LNG carriers [Member] | Teekay LNG [Member]
Schedule Of Supplemental Cash Flow [Line Items]
Time charter for carriers		2
Purchase price of per vessel		205,000,000
Upfront prepayment		51,000,000
Upfront fee		$ 1,000,000

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Capital Lease Obligations and Restricted Cash

12 Months Ended

Dec. 31, 2014

Text Block [Abstract]

Capital Lease Obligations and Restricted Cash

10. Capital Lease Obligations and Restricted Cash

Capital Lease Obligations

	December 31,		December 31,
	2014		2013
	$		$
RasGas II LNG Carriers		—		472,806
Suezmax Tankers		63,550		125,523
Total		63,550		598,329
Less current portion		4,422		31,668
Long-term portion		59,128		566,661

RasGas II LNG Carriers. As at December 31, 2014 and 2013, Teekay LNG owned a 70% interest in Teekay Nakilat Corporation (or Teekay Nakilat Joint Venture). All amounts below and in the table above relating to the Teekay Nakilat Joint Venture’s three LNG carriers (or the RasGas II LNG Carriers), which were under capital leases until the termination of the leasing of the vessels on December 22, 2014, include Teekay LNG’s joint venture partner’s 30% interest in the Teekay Nakilat Joint Venture. Pursuant to the termination of the leasing of the RasGas II LNG Carriers, the Teekay Nakilat Joint Venture, through its wholly-owned subsidiaries, acquired the RasGas II LNG Carriers from the lessor. In settling the outstanding lease obligations and acquiring the vessels, the Teekay Nakilat Joint Venture capitalized a negotiated early lease termination fee of $23.1 million, which was required under the lease agreement and was paid to the lessor in excess of the outstanding lease obligation of $473.4 million. Concurrently with the lease termination, the Teekay Nakilat Joint Venture refinanced its debt facility (see note 8).

Under the terms of the capital lease arrangements with respect to the RasGas II LNG Carriers, the lessor claimed tax depreciation on these vessels. As is typical in these leasing arrangements, tax and change of law risks were assumed by the Teekay Nakilat Joint Venture, as lessee. Lease payments under the lease arrangements were based on certain tax and financial assumptions at the commencement of the leases. If an assumption proved to be incorrect, the lessor was entitled to increase or decrease the lease payments to maintain its agreed after-tax margin. Even though the Teekay Nakilat Joint Venture has terminated the leasing of the RasGas II LNG Carriers and acquired the leased vessels from the lessor, it remains obligated to the lessor to maintain the lessor’s agreed after-tax margin from the commencement of the lease to the lease termination date. The Company’s carrying amount of the tax indemnification guarantee as at December 31, 2014 and 2013 was $14.4 million and $15.0 million, respectively, and is included as part of other long-term liabilities in the Company’s consolidated balance sheets.

Suezmax Tankers. During 2014 Teekay LNG was a party to capital leases on four Suezmax tankers. Under these capital leases, the owner has the option to require Teekay LNG to purchase the four vessels. The charterer, who is also the owner, also has the option to cancel the charter contracts. Teekay LNG received notification of termination from the owner and the owner sold the Algeciras Spirit on February 28, 2014 and sold the Huelva Spirit on August 15, 2014. For the remaining two Suezmax tankers, the cancellation options are first exercisable in October 2017 and July 2018, respectively. Upon sales of the vessels, Teekay LNG was not required to pay the balance of the capital lease obligations, as the vessels under capital leases were returned to the owner and the capital lease obligations were concurrently extinguished.

The amounts in the table below assume the owner will not exercise its options to require Teekay LNG to purchase either of the two remaining vessels, but rather it assumes the owner will cancel the charter contracts when the cancellation right is first exercisable and sell the vessels to a third party, upon which the lease obligation will be extinguished. At the inception of these leases, the weighted-average interest rate implicit in these leases was 5.5%. 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 Teekay LNG.

As at December 31, 2014, the remaining commitments under the two capital leases, including the purchase obligations for the two Suezmax tankers, approximated $73.7 million, including imputed interest of $10.2 million, repayable from 2015 through 2018, as indicated below:

Year	Commitment
2015	$	7,790
2016	$	7,673
2017	$	30,953
2018	$	27,296

The Company’s capital leases do not contain financial or restrictive covenants other than those relating to operation and maintenance of the vessels.

Restricted Cash

Under the terms of the capital leases for the RasGas II LNG Carriers that were terminated on December 22, 2014, the Teekay Nakilat Joint Venture was required to have on deposit with financial institutions an amount of cash that, together with interest earned on the deposits, would equal the remaining amounts owing under the leases. These cash deposits were restricted to being used for capital lease payments and were fully funded primarily with term loans. These deposits were released as part of the lease termination; however, the Teekay Nakilat Joint Venture was required to place $6.8 million on deposit to the lessor as security against any future claims as the Teekay Nakilat Joint Venture still has an obligation to the lessor to maintain the lessor’s agreed after-tax margin from the commencement of the lease to the lease termination date. As at December 31, 2014 and 2013, the amount of restricted cash on deposit for the three RasGas II LNG Carriers was $6.8 million and $475.6 million, respectively. As at December 31, 2014 and 2013, the weighted-average interest rates earned on the deposits were 0.6% and 0.3%, respectively. These rates do not reflect the effect of related interest rate swaps that the Company has used to economically hedge its floating-rate restricted cash deposits relating to the RasGas II LNG Carriers.

The Company also maintains restricted cash deposits relating to certain term loans, collateral for derivatives and other obligations, which totaled $107.8 million and $27.1 million as at December 31, 2014 and 2013, respectively.

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Long-Term Debt - Summary of Long-Term Debt (Detail) In Thousands, unless otherwise specified	Dec. 31, 2014 USD ($)	Dec. 31, 2013 USD ($)	Dec. 31, 2014 Senior Notes (8.5%) due January 15, 2020 [Member] USD ($)	Dec. 31, 2013 Senior Notes (8.5%) due January 15, 2020 [Member] USD ($)	Dec. 31, 2014 Norwegian Kroner Denominated Bonds Due Through Two Thousand NIneteen [Member] USD ($)	Dec. 31, 2013 Norwegian Kroner Denominated Bonds Due Through Two Thousand NIneteen [Member] USD ($)	Dec. 31, 2014 U.S. Dollar-denominated Term Loans due through 2023 [Member] USD ($)	Dec. 31, 2013 U.S. Dollar-denominated Term Loans due through 2023 [Member] USD ($)	Dec. 31, 2014 U.S. Dollar Bonds due through 2023 [Member] USD ($)	Dec. 31, 2013 U.S. Dollar Bonds due through 2023 [Member] USD ($)	Dec. 31, 2014 Euro-denominated Term Loans due through 2023 [Member] USD ($)	Dec. 31, 2014 Euro-denominated Term Loans due through 2023 [Member] EUR (€)	Dec. 31, 2013 Euro-denominated Term Loans due through 2023 [Member] USD ($)	Dec. 31, 2013 Euro-denominated Term Loans due through 2023 [Member] EUR (€)	Dec. 31, 2013 U.S. Dollar-denominated Unsecured Demand Loans due to Joint Venture Partners [Member] Teekay Nakilat Corporation [Member] USD ($)	Dec. 31, 2014 Revolving Credit Facilities [Member] USD ($)	Dec. 31, 2013 Revolving Credit Facilities [Member] USD ($)
Debt Instrument [Line Items]
Total	$ 6,736,498	$ 6,109,470	$ 390,712	$ 447,430	$ 697,798	$ 691,778	$ 3,103,255	$ 2,523,523	$ 492,918	$ 174,150	$ 284,993	€ 235,600	$ 340,221	€ 247,600	$ 13,282	$ 1,766,822	$ 1,919,086
Total	6,736,498	6,109,470	390,712	447,430	697,798	691,778	3,103,255	2,523,523	492,918	174,150	284,993	235,600	340,221	247,600	13,282	1,766,822	1,919,086
Less current portion	654,134	996,425
Long-term portion	$ 6,082,364	$ 5,113,045

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Operating and Direct Financing Leases - Operating Lease Obligations - Additional Information (Detail) (Teekay Tangguh Joint Venture [Member], USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2014 Vessel	Dec. 31, 2013
Teekay Tangguh Joint Venture [Member]
Property Subject to or Available for Operating Lease [Line Items]
Number of vessels	2
Tax indemnification	$ 8.4	$ 8.9
Tax indemnification of lease contracts	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.
Operating lease arrangement period	20 year
Operating lease arrangement period	20 year

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Current
Cash and cash equivalents (note 8)	$ 806,904	$ 614,660
Restricted cash (note 10)	33,653	4,748
Accounts receivable, including non-trade of $49,707 (2013 - $109,114) and related party balances of $38,616 (2013 - $16,371)	378,193	528,594
Assets held for sale (notes 11 and 18)		176,247
Net investment in direct financing leases (note 9)	20,823	21,545
Prepaid expenses and other	69,470	57,158
Current portion of loans to equity-accounted investees (note 23)	26,209	37,019
Current portion of investment in term loans (note 4)		211,579
Current portion of derivative assets (note 15)		23,040
Total current assets	1,335,252	1,674,590
Restricted cash - non-current (note 10)	85,698	497,984
Vessels and equipment (note 8)
At cost, less accumulated depreciation of $2,627,499 (2013 - $2,135,780)	6,307,971	5,983,128
Vessels under capital leases, at cost, less accumulated amortization of $50,898 (2013 - $152,020) (note 10)	91,776	571,692
Advances on newbuilding contracts and conversion costs (note 16a)	1,706,500	796,324
Total vessels and equipment	8,106,247	7,351,144
Net investment in direct financing leases - non-current (note 9)	684,130	705,717
Loans to equity-accounted investees and joint venture partners, bearing interest between nil to 8% (note 23)	227,217	132,229
Derivative assets (note 15)	14,415	69,797
Equity-accounted investments (notes 16c and 23)	873,421	690,309
Other non-current assets	274,595	159,494
Intangible assets - net (note 6)	94,666	107,898
Goodwill (note 6)	168,571	166,539
Total assets	11,864,212	11,555,701
Current
Accounts payable	85,290	98,415
Accrued liabilities (notes 7 and 15)	394,759	466,824
Liabilities associated with assets held for sale (notes 8, 11 and 18)		168,007
Current portion of derivative liabilities (note 15)	203,957	143,999
Current portion of long-term debt (note 8)	654,134	996,425
Current obligation under capital leases (note 10)	4,422	31,668
Current portion of in-process revenue contracts	23,414	40,176
Total current liabilities	1,365,976	1,945,514
Long-term debt, including amounts due to joint venture partners of nil (2013 - $13,282) (note 8)	6,082,364	5,113,045
Long-term obligation under capital leases (note 10)	59,128	566,661
Derivative liabilities (note 15)	422,182	299,570
In-process revenue contracts	149,998	139,676
Other long-term liabilities	383,089	271,621
Total liabilities	8,462,737	8,336,087
Commitments and contingencies (note 8, 9, 10, 15 and 16)
Redeemable non-controlling interest (note 16e)	12,842	16,564
Equity
Common stock and additional paid-in capital ($0.001 par value; 725,000,000 shares authorized; 72,500,502 shares outstanding (2013 - 70,729,399); 73,299,702 shares issued (2013 - 71,528,599) (note 12)	770,759	713,760
Retained earnings	355,867	435,217
Non-controlling interest	2,290,305	2,071,262
Accumulated other comprehensive loss (note 1)	(28,298)	(17,189)
Total equity	3,388,633	3,203,050
Total liabilities and equity	$ 11,864,212	$ 11,555,701

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Investment in Term Loans

12 Months Ended

Dec. 31, 2014

Receivables [Abstract]

Investment in Term Loans

4. Investment in Term Loans

In February 2011, Teekay made a $70 million term loan (or the TKC Loan) to a ship-owner of a 2011-built VLCC, based in Asia. The TKC Loan’s interest rate was 9% per annum, which was payable quarterly. The TKC Loan was repayable in full in February 2014. The TKC Loan was collateralized by a first-priority mortgage on the VLCC, together with other related collateral.

In July 2010, Teekay Tankers acquired two term loans, whose borrowers had the same ultimate parent company as the borrower under the TKC Loan, with a total principal amount outstanding of $115.0 million for a total cost of $115.6 million (or the TNK Loans). The TNK Loans had an annual interest rate of 9% per annum, and included a repayment premium feature which provided a total investment yield of approximately 10% per annum. The TNK Loans matured in July 2013. The TNK Loans were collateralized by first-priority mortgages on two 2010-built VLCCs, together with other related security. The principal amount of the TNK Loans and repayment premium were payable in full at maturity in July 2013. The TKC Loan and TNK Loans are collectively referred to as the Loans.

The borrowers of the Loans had been in default on their interest payment obligations since the first quarter of 2013, and of their loan principal and repayment premium obligations on the TNK Loans from their maturity date in July 2013. As of December 31, 2013, the VLCC vessels that collateralize the Loans were trading in the spot tanker market under the Company’s management.

As at December 31, 2013, the balance of the repayment premium included in the investment in term loans was $3.4 million. As at December 31, 2013, accrued and unpaid interest on the Loans, including a portion of default interest, was $10.7 million. Such amounts are presented in investment in term loans on the consolidated balance sheets as at December 31, 2013. Interest income in respect of the Loans is included in revenues in the consolidated statements of income (loss). As of December 31, 2013, $11.2 million of interest income due under the Loans, including default interest, had not been recognized based on the Company‘s estimates at that time of amounts recoverable from future operating cash flows of the vessels and the net proceeds from the sale of the three VLCCs.

In March 2014, the Company exercised its rights under security documentation to realize the amounts owed under its investment in term loans and assumed full ownership of the three VLCC vessels, which previously secured the investment in term loans. At the time of assumption of ownership, these vessels had an aggregate fair value of approximately $222 million, which exceeded the carrying value of the Loans. As a result of the exercise of remedies and the increase in VLCC vessel values during early 2014, in the first quarter of 2014, the Company recognized $15.2 million of interest income, of which $11.2 million related to prior periods and was previously unrecognized, owing under the Loans. In May 2014, Teekay Tankers sold two single-ship wholly-owned subsidiaries, each of which owned one VLCC, to TIL for aggregate proceeds of $154 million, plus related working capital on closing. Teekay Tankers recognized a $10 million gain on the sale of the VLCCs in 2014.

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Investments

12 Months Ended

Dec. 31, 2014

Business Combinations [Abstract]

Investments

3. Investments

a) Acquisition of Logitel Offshore Holding AS

In August 2014, the Company’s publicly-listed subsidiary Teekay Offshore acquired 100% of the outstanding shares of Logitel Offshore Holding AS (or Logitel). The purchase price for the shares of Logitel consisted of $4.0 million in cash paid at closing and a potential additional cash amount of $27.6 million, subject to reductions of some or all of this potential additional amount if certain performance criteria are not met, primarily relating to the construction of the three FAUs ordered from the COSCO (Nantong) Shipyard (or COSCO) in China (see note 11).

Teekay Offshore is committed to acquire the three FAUs ordered from COSCO for a total cost of approximately $588 million, including estimated site supervision costs and license fees to be paid to Sevan Marine ASA (or Sevan) to allow for use of its cylindrical hull design in these FAUs, and $30.0 million from Teekay Offshore’s assumption of Logitel’s obligations under a bond agreement from Sevan. Prior to the acquisition, Logitel secured a three-year fixed-rate charter contract, plus extension options, with Petroleo Brasileiro SA (or Petrobras) in Brazil for the first FAU, which delivered in February 2015. The second FAU is currently under construction and in August 2014 Teekay Offshore exercised one of its existing six options with COSCO to construct a third FAU.

As noted above, Teekay Offshore assumed Logitel’s obligations under a bond agreement from Sevan as part of this acquisition. The bond is non-interest bearing and is repayable in amounts of $10.0 million within six months of delivery of each of the three FAUs ordered from COSCO, for a total of $30.0 million. If Logitel orders additional FAUs with the Sevan cylindrical design, Logitel will be required to pay Sevan up to $11.9 million for each of the next three FAUs ordered. If the fourth of six options with COSCO is not exercised by its option expiry date on November 30, 2016, Sevan has a one-time option to receive the remaining two options with COSCO.

The acquisition of Logitel represents Teekay Offshore’s entrance into the FAU business, which is in an adjacent sector to Teekay Offshore’s FPSO and shuttle tanker businesses. The acquisition of Logitel was accounted for using the purchase method of accounting, based upon preliminary estimates of fair value.

The following table summarizes the preliminary estimates of fair values of the Logitel assets acquired and liabilities assumed by Teekay Offshore on the acquisition date. Teekay Offshore is continuing to obtain information to finalize estimated fair value of the Logitel assets acquired and liabilities assumed and expects to complete this process as soon as practicable, but no later than one year from the acquisition date.

(in thousands of U.S. dollars)	As at August 11, 2014
	$
ASSETS
Cash and cash equivalents		8,089
Prepaid expenses		640
Advances on newbuilding contracts		46,809
Total assets acquired		55,538
LIABILITIES
Accrued liabilities		4,098
Long-term debt		26,270
Total liabilities assumed		30,368
Net assets acquired		25,170
Cash consideration		4,000
Contingent consideration		21,170

Operating results of Logitel are reflected in the Company’s financial statements commencing August 11, 2014, the effective date of acquisition. For the year ended December 31, 2014, the Company recognized $nil revenue and $1.0 million of net loss resulting from this acquisition.

b) Teekay LNG – Yamal LNG Joint Venture

In July 2014, the Company’s publicly-listed subsidiary Teekay LNG, through a new 50/50 joint venture (or the Yamal LNG Joint Venture) with China LNG Shipping (Holdings) Limited (or China LNG), ordered six internationally-flagged icebreaker LNG carriers for a project located on the Yamal Peninsula in Northern Russia (or the Yamal LNG Project). The Yamal LNG Project is a joint venture between Russia-based Novatek OAO (60%), France-based Total S.A. (20%) and China-based China National Petroleum Corporation (or CNPC) (20%), and will consist of three LNG trains with a total expected capacity of 16.5 million metric tons of LNG per annum and is currently scheduled to start-up in early-2018. The six 172,000-cubic meter ARC7 LNG carrier newbuildings will be constructed by Daewoo Shipbuilding & Marine Engineering Co. (or DSME), of South Korea, for an estimated total fully built-up cost of approximately $2.1 billion. The vessels, which will be constructed with maximum 2.1 meter icebreaking capabilities in both the forward and reverse directions, are scheduled to deliver at various times between the first quarter of 2018 and first quarter of 2020. Upon their deliveries, the six LNG carriers will each operate under fixed-rate time-charter contracts with Yamal Trade Pte. Ltd. until December 31, 2045, plus extension options. As of December 31, 2014, Teekay LNG had advanced $95.3 million to the Yamal LNG Joint Venture to fund newbuilding installments.

c) Teekay LNG – BG International Limited Joint Venture

In June 2014, Teekay LNG acquired from BG International Limited (or BG) its ownership interests in four 174,000-cubic meter Tri-Fuel Diesel Electric LNG carrier newbuildings, which will be constructed by Hudong-Zhonghua Shipbuilding (Group) Co., Ltd. in China for an estimated total fully built-up cost to the joint venture of approximately $1.0 billion. The vessels, upon delivery, which are scheduled to deliver between September 2017 and January 2019, will each operate under 20-year fixed-rate time-charter contracts, plus extension options, with Methane Services Limited, a wholly-owned subsidiary of BG. As compensation for BG’s ownership interest in these four LNG carrier newbuildings, Teekay LNG assumed BG’s obligation to provide the shipbuilding supervision and crew training services for the four LNG carrier newbuildings up to their delivery date pursuant to a ship construction support agreement. Teekay, on behalf of Teekay LNG, will provide the shipbuilding supervision and crew training services for the four LNG carrier newbuildings up to their delivery dates. Teekay LNG estimates it will incur approximately $38.7 million of costs to provide these services, of which BG has agreed to pay a fixed amount of $20.3 million. Upon acquisition, Teekay LNG estimated that the fair value of the service obligation was $33.3 million and the fair value of the amount due from BG was $16.5 million. As at December 31, 2014, the carrying value of the service obligation of $33.7 million is included in both the current portion of in-process contracts and in-process contracts and the carrying value of the receivable from BG of $17.1 million is included in other assets in the Company’s consolidated balance sheet. Through this transaction, Teekay LNG has a 30% ownership interest in two LNG carrier newbuildings and a 20% ownership interest in the remaining two LNG carrier newbuildings (collectively, the BG Joint Venture). The excess of Teekay LNG’s investment in the BG Joint Venture over Teekay LNG’s share of the underlying carrying value of net assets acquired was approximately $16.8 million, in accordance with the preliminary purchase price allocation. This basis difference has been allocated notionally to the ship construction support agreements and the time-charter contracts. Teekay LNG accounts for its investment in the BG Joint Venture using the equity method.

d) Teekay Offshore Acquisition of ALP Maritime Services B.V.

In March 2014, Teekay Offshore acquired 100% of the shares of ALP Maritime Services B.V. (or ALP), a Netherlands-based provider of long-distance ocean towage and offshore installation services to the global offshore oil and gas industry. Concurrently with this transaction, Teekay Offshore and ALP entered into an agreement with Niigata Shipbuilding & Repair of Japan for the construction of four SX-157 Ulstein Design ultra-long-distance towing and offshore installation vessel newbuildings. These vessels will be equipped with dynamic positioning capability and are scheduled for delivery in 2016. Teekay Offshore is committed to acquire these newbuildings for a total cost of approximately $258 million.

Teekay Offshore acquired ALP for a purchase price of $2.6 million, which was paid in cash, and also entered into an arrangement to pay additional compensation to three former shareholders of ALP if certain requirements are satisfied. This contingent compensation consists of $2.4 million, which is payable upon the delivery and employment of ALP’s four newbuildings, which are scheduled throughout 2016, and a further amount of up to $2.6 million, which is payable if ALP’s annual operating results from 2017 to 2021 meet certain targets. Teekay Offshore has the option to pay up to 50% of this compensation through the issuance of common units of Teekay Offshore. Each of the contingent compensation amounts are payable only if the three former shareholders are employed by ALP at the time the performance conditions are met. For the year ended December 31, 2014, compensation costs were $0.5 million and were recorded in general and administrative expenses in the Company’s consolidated statements of income (loss). Teekay Offshore also incurred a $1.0 million fee to a third party associated with the acquisition of ALP, which has been recognized in general and administrative expenses during 2014.

The acquisition of ALP and the related newbuilding orders represents Teekay Offshore’s entrance into the long-distance ocean towage and offshore installation services business. This acquisition allows Teekay Offshore to combine its infrastructure and access to capital with ALP’s experienced management team to further grow this niche business, which is in an adjacent sector to Teekay Offshore’s FPSO and shuttle tanker businesses. The acquisition of ALP was accounted for using the purchase method of accounting, based upon finalized estimates of fair value.

The following table summarizes the finalized estimates of fair values of the ALP assets acquired and liabilities assumed by Teekay Offshore on the acquisition date.

	As at
(in thousands of U.S. dollars)	March 14, 2014
	$
ASSETS
Cash and cash equivalents		294
Other current assets		404
Advances on newbuilding contracts		164
Other assets - long-term		395
Goodwill		2,032
Total assets acquired		3,289
LIABILITIES
Current liabilities		387
Other long-term liabilities		286
Total liabilities assumed		673
Net assets acquired		2,616
Consideration		2,616

The goodwill recognized in connection with the ALP acquisition is attributable primarily to the assembled workforce of ALP, including their experience, skills and abilities. Operating results of ALP are reflected in the Company’s consolidated financial statements commencing March 14, 2014, the effective date of the acquisition. For the year ended December 31, 2014, the Company recognized $0.5 million of revenue and $2.3 million of net loss resulting from this acquisition. On a pro forma basis for the Company for the years ended December 31, 2014 and 2013, there would be no material changes to revenues and net income giving effect to Teekay Offshore’s acquisition of ALP as if it had taken place on January 1, 2013.

e) Tanker Investments Ltd.

In January 2014, Teekay and its publicly-listed subsidiary Teekay Tankers formed Tanker Investments Ltd. (or TIL), which seeks to opportunistically acquire, operate and sell modern second-hand tankers to benefit from an expected recovery in the then cyclical low of the tanker market. In January 2014, Teekay and Teekay Tankers in the aggregate purchased 5.0 million shares of common stock, representing an initial 20% interest in TIL, as part of a $250 million private placement by TIL, which represented a total investment by Teekay and Teekay Tankers of $50.0 million. In addition, Teekay and Teekay Tankers received stock purchase warrants entitling them to purchase in the aggregate up to 1.5 million shares of common stock of TIL (see Note 15). The stock purchase warrants, which had an aggregate value of $6.8 million on issuance, were received in exchange for the Company’s involvement in the formation of TIL and such amount is reflected in other income (expenses) in the Company’s consolidated statements of (loss) income. Teekay also received one Series A-1 preferred share and Teekay Tankers received one Series A-2 preferred share, each of which entitles the holder to elect one board member of TIL. The preferred shares do not give the holder a right to any dividends or distributions of TIL. Teekay and Teekay Tankers account for their investments in TIL using the equity method. In January 2014, TIL entered into a long-term management agreement with an affiliate of Teekay, pursuant to which the manager provides to TIL commercial, technical, administrative and corporate services and personnel, including TIL’s executive officers, in exchange for management services fees and reimbursement of expenses.

In March 2014, TIL issued additional common shares and listed its common shares on the Oslo Stock Exchange. The issuance of shares by an equity-accounted investee is accounted by the Company as if the Company had sold a proportionate share of its investment, and the resulting gain or loss is recognized in equity income in the Company’s consolidated statements of income (loss). For the year ended December 31, 2014, the Company recognized a gain from this investment of $4.1 million. The combined interests of Teekay Tankers and Teekay in TIL of the then outstanding share capital of TIL was 13.0%.

In October 2014, Teekay Tankers acquired an additional 0.9 million common shares in TIL, representing 2.43% of the then outstanding share capital of TIL. The common shares were acquired at a price of Norwegian Kroner (or NOK) 69 per share, for an aggregate price of $10.1 million. Following completion of the purchase, Teekay Tankers held 3.4 million common shares in TIL, representing 8.94% of the then outstanding share capital of TIL, and brought the combined interests of Teekay and Teekay Tankers in TIL to 15.43%. In October 2014, TIL authorized a share buyback program for up to $30 million and has repurchased $15.1 million to-date at an average price of NOK 68.49 per share, which resulted in the combined ownership interests of Teekay and Teekay Tankers in TIL to be 16.05% as at December 31, 2014.

As of December 31, 2014, TIL had completed the acquisition of two 2010-built Very Large Crude Carrier (or VLCC) vessels from Teekay Tankers, four 2009-built Suezmax tankers from Teekay and six 2009, 2010 and 2011-built Aframax tankers and two 2012-built coated Aframax vessels from third parties. TIL acquired the VLCCs and other tankers from Teekay Tankers and Teekay for an aggregate purchase price of $317.2 million. As of December 31, 2014, TIL has signed an agreement to acquire four 2009-built and two 2010-built Suezmax tankers from a third party, which are expected to deliver in the first half of 2015, bringing the total number of vessels to be owned by TIL to 20. Teekay is a guarantor of TIL’s obligations under a term loan related to the four 2009-built Suezmax tankers that TIL acquired from Teekay. TIL has agreed to pay to Teekay an annual guarantee fee of 0.25% of the outstanding balance under the term loan as consideration for Teekay’s continuing guarantee. TIL has also agreed to indemnify Teekay for any losses Teekay suffers from claims made against it pursuant to the guarantee.

f) FPSO Units and Investment in Sevan Marine ASA

On November 30, 2011, the Company acquired from 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, 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 by Teekay Offshore of common units and existing liquidity.

On November 30, 2011, Teekay entered into an agreement to acquire an FPSO unit, the Sevan Voyageur (or Voyageur Spirit), and its existing customer contract from Sevan. Teekay agreed to acquire the Voyageur Spirit once the upgrade project that was underway at the time was completed and the Voyageur Spirit had commenced operations under its customer contract. In September 2012, the Voyageur Spirit completed its upgrade at the Nymo shipyard and arrived at the Huntington Field in the U.K. sector of the North Sea in October 2012. Under the terms of the acquisition agreement, Teekay prepaid Sevan $94 million to acquire the Voyageur Spirit, assumed the Voyageur Spirit’s existing $230.0 million credit facility, which had an outstanding balance of $220.5 million on November 30, 2011, and was responsible for all upgrade costs incurred after November 30, 2011, which were estimated to be between $140 million and $150 million. Teekay had control over the upgrade project and had guaranteed the repayment of the existing credit facility.

On April 13, 2013, the Voyageur Spirit FPSO unit began production on the Huntington Field and commenced its five-year charter with E.ON Ruhrgas UK E&P Limited (or E.ON). On May 2, 2013, Teekay completed the acquisition of the Voyageur Spirit FPSO unit. The excess of the price paid over the carrying value of the non-controlling interest acquired was $35.4 million and has been accounted for as a reduction to equity. Immediately thereafter, the FPSO unit was sold by Teekay to Teekay Offshore for an initial purchase price of $540.0 million. The Voyageur Spirit FPSO unit has been consolidated by the Company since November 30, 2011, as the Voyageur Spirit FPSO unit was a variable interest entity (or VIE) and the Company was the primary beneficiary from November 30, 2011 until its purchase in May 2013.

Upon commencing production on April 13, 2013, the Voyageur Spirit FPSO unit had a specified time period to receive final acceptance from the charterer, E.ON, at which point the unit would commence full operations under the contract with E.ON. However, due to a defect encountered in one of its two gas compressors, the FPSO unit was unable to achieve final acceptance within the allowable timeframe, resulting in the FPSO unit being declared off-hire by the charterer retroactive to April 13, 2013.

On September 30, 2013, Teekay Offshore entered into an interim agreement with E.ON whereby Teekay Offshore was compensated for production beginning August 27, 2013 until the receipt of final acceptance by E.ON. Until declared on hire, Teekay had agreed to indemnify Teekay Offshore for certain production shortfalls and unreimbursed vessel operating expenses. For the period from April 13, 2013 to December 31, 2013, Teekay had indemnified Teekay Offshore a total of $34.9 million for production shortfalls and unreimbursed repair costs. For 2014, Teekay indemnified Teekay Offshore for $3.5 million for production shortfalls and unrecovered repair costs to address the compressor issues and paid a further $2.7 million in late-2014 relating to a final settlement of pre-acquisition capital expenditures for Voyageur Spirit FPSO unit. In April 2014, Teekay Offshore received the certificate of final acceptance from the charterer, which declared the unit on-hire retroactive to February 22, 2014.

Amounts paid as indemnification from Teekay to Teekay Offshore were effectively treated as a reduction in the purchase price. The original purchase price of $540.0 million of the Voyageur Spirit FPSO unit has effectively been reduced to $503.1 million ($273.1 million net of assumed debt of $230.0 million) to reflect total indemnification payments from Teekay of $41.1 million relating to the period from the date of first oil on April 13, 2013 to when the unit was declared on-hire on February 22, 2014, partially offset by the excess value of $4.3 million relating to the 1.4 million common units issued by Teekay Offshore to Teekay on the closing date of the transaction in May 2013 compared to the date Teekay offered to sell the unit to Teekay Offshore.

g) Teekay LNG – Exmar LPG BVBA Joint Venture

In February 2013, Teekay LNG entered into a 50/50 joint venture agreement with Belgium-based Exmar NV (or Exmar) to own and in-charter 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, as of December 31, 2014, included 20 owned LPG carriers (including nine newbuilding carriers scheduled for delivery between 2015 and 2018) and four in-chartered LPG carriers. 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 $133.1 million in exchange for equity and a shareholder loan and assumed approximately $108 million of its pro rata share of existing debt and lease obligations as of the economic effective date. These debt and lease obligations are secured by certain vessels in the Exmar LPG BVBA fleet. The excess of the book value of net assets acquired over Teekay LNG’s investment in the Exmar LPG BVBA, which amounted to approximately $6.0 million, has been accounted for as an adjustment to the value of the vessels, charter agreements and lease obligations of Exmar LPG BVBA and recognition of goodwill, in accordance with the finalized purchase price allocation. Control of Exmar LPG BVBA is shared equally between Exmar and Teekay LNG. Teekay LNG accounts for its investment in Exmar LPG BVBA using the equity method.

h) Teekay LNG – Marubeni Joint Venture

In February 2012, a joint venture between Teekay LNG and Marubeni Corporation (or the Teekay LNG-Marubeni Joint Venture) acquired a 100% interest in six LNG carriers (or the MALT 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 the 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. From June to July 2013, the Teekay LNG Marubeni Joint Venture completed the refinancing of its short-term loan facilities by entering into separate long-term debt facilities totaling approximately $963 million. These debt facilities mature between 2017 and 2030. Teekay LNG has guaranteed its 52% share of the secured loan facilities of the Teekay LNG-Marubeni Joint Venture and, as a result, recorded a guarantee liability of $0.7 million. The carrying value of the guarantee liability as at December 31, 2014 was $0.4 million (December 31, 2013—$0.6 million) and is included as part of other long-term liabilities in the Company’s consolidated balance sheets.

In July 2013, the Teekay LNG-Marubeni Joint Venture entered into an eight-year interest rate swap with a notional amount of $160.0 million, which amortizes quarterly over the term of the interest rate swap to $70.4 million at maturity. The interest rate swap exchanges the receipt of LIBOR-based interest for the payment of a fixed rate of interest of 2.20% in the first two years and 2.36% in the last six years. This interest rate swap has been designated as a qualifying cash flow hedging instrument for accounting purposes. The Teekay LNG-Marubeni Joint Venture uses the same accounting policy for qualifying cash flow hedging instruments as does Teekay LNG.

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Pension Benefits - Fair Value of Plan Assets (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	$ 97,158	$ 138,876
Pooled Funds [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	66,563	98,338
Mutual Fund Equity investments [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	7,343	18,080
Mutual Funds Debt securities [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	6,119	3,811
Mutual Funds Real estate [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	1,530	2,108
Mutual Funds Cash and money market [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	12,238	8,796
Mutual Funds Other [Member]
Defined Benefit Plan Disclosure [Line Items]
Fair value of plan assets	$ 3,365	$ 7,743

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Derivative Instruments and Hedging Activities

12 Months Ended

Dec. 31, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

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.

As at December 31, 2014, the Company was committed to the following foreign currency forward contracts:

	Contract Amount in Foreign Currency		Average Forward Rate (1)		Fair Value / Carrying Amount of Asset (Liability) $			Expected Maturity 2015 $		2016 $
Norwegian Kroner		861,000		6.44		(18,407	)		91,400		42,253
						(18,407	)		91,400		42,253

(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 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 NOK based on NIBOR plus a margin for a payment of U.S. Dollar fixed interest. 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 NOK-denominated bonds due in 2015 through 2019. In addition, the cross currency swaps economically hedge the interest rate exposure on the NOK bonds due in 2015 through 2019. The Company has not designated, for accounting purposes, these cross currency swaps as cash flow hedges of its NOK-denominated bonds due in 2015 through 2019. As at December 31, 2014, the Company was committed to the following cross currency swaps:

												Fair Value / Carrying
Notional		Notional		Floating Rate Receivable								Amount of			Remaining
Amount NOK		Amount USD		Reference Rate		Margin			Fixed Rate Payable			Asset / (Liability)			Term (years)
	700,000		122,800		NIBOR		4.75	%		5.52	%		(30,501	)		0.8
	500,000		89,710		NIBOR		4.00	%		4.80	%		(23,843	)		1.1
	600,000		101,351		NIBOR		5.75	%		7.49	%		(24,732	)		2.1
	700,000		125,000		NIBOR		5.25	%		6.88	%		(35,766	)		2.3
	800,000		143,536		NIBOR		4.75	%		5.93	%		(38,898	)		3.1
	900,000		150,000		NIBOR		4.35	%		6.43	%		(34,620	)		3.7
	1,000,000		162,200		NIBOR		4.25	%		6.28	%		(33,031	)		4.1
													(221,391	)

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. The Company has not designated any of its interest rate swap agreements in its consolidated entities as cash flow hedges for accounting purposes.

As at December 31, 2014, the Company was committed to the following interest rate swap agreements related to its LIBOR-based debt and EURIBOR-based debt, whereby certain of the Company’s floating-rate debt were swapped with fixed-rate obligations:

	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		3,357,287		(342,772	)		5.8		3.5
U.S. Dollar-denominated interest rate swaps (3)	LIBOR		500,000		(17,150	)		0.8		3.1
EURIBOR-Based Debt:
Euro-denominated interest rate swaps (4) (5)	EURIBOR		284,993		(45,810	)		6.0		3.1
					(405,732	)

(1) Excludes the margins the Company pays on its variable-rate debt, which, as of December 31, 2014, ranged from 0.3% to 3.95%.

(2) 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.

(3) Interest rate swap with an aggregate principal amount of $180 million is being used to economically hedge expected interest payments on new debt that is planned to be outstanding from 2016 to 2028. The interest rate swap is subject to mandatory early termination in 2015 whereby the swap will be settled based on its fair value at that time. Interest rate swaps with an aggregate principal amount of $320 million are being used to economically hedge expected interest payments on new debt that is planned to be outstanding from 2016 to 2021. These interest rate swaps are subject to mandatory early termination in 2016 whereby the swaps will be settled based on their fair value at that time.

(4) Principal amount reduces monthly to 70.1 million Euros ($84.8 million) by the maturity dates of the swap agreements.

(5) Principal amount is the U.S. Dollar equivalent of 235.6 million Euros.

Stock Purchase Warrants

In January 2014, Teekay and Teekay Tankers formed TIL. Teekay and Teekay Tankers purchased an aggregate of 5.0 million shares of TIL’s common stock, representing an initial 20% interest in TIL, as part of a $250 million private placement by TIL, which represents a total investment by Teekay and Teekay Tankers of $50.0 million. In addition, Teekay and Teekay Tankers received stock purchase warrants entitling them to purchase an aggregate of up to 1.5 million shares of common stock of TIL at a fixed price of $10 per share. Alternatively, if the shares of TIL’s common stock trade on a National Stock Exchange or over-the-counter market denominated in NOK, Teekay and Teekay Tankers may also exercise their stock purchase warrants at 61.67 NOK per share using a cashless exercise procedure. The estimated fair value of the warrants on issuance was $6.8 million and is included in other income in the consolidated statements of income (loss). The stock purchase warrants vest in four equally sized tranches. If the shares of TIL’s common stock trade on a National Stock Exchange or over-the-counter market denominated in NOK, each tranche will vest and become exercisable when and if the fair market value of a share of TIL’s common stock equals or exceeds 77.08 NOK, 92.50 NOK, 107.91 NOK and 123.33 NOK, respectively, for such tranche for any ten consecutive trading days. The stock purchase warrants expire on January 23, 2019. The fair value of the stock purchase warrants at December 31, 2014 was $9.3 million. The Company reports the unrealized gains from the stock purchase warrants in realized and unrealized (losses) gains on non-designated derivatives in the consolidated statements of income (loss).

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, 2014
Derivatives not designated as a cash flow hedge:
Foreign currency contracts		—		—		—			(14,218	)		(4,189	)
Interest rate swap agreements		—		5,101		(22,656	)		(148,006	)		(240,171	)
Cross currency swap agreements		—		—		(1,835	)		(41,733	)		(177,822	)
Stock purchase warrants		—		9,314		—			—			—
		—		14,415		(24,491	)		(203,957	)		(422,182	)
As at December 31, 2013
Derivatives not designated as a cash flow hedge:
Foreign currency contracts		482		12		—			(1,819	)		(155	)
Interest rate swap agreements		21,779		69,785		(22,025	)		(140,503	)		(248,091	)
Cross currency swap agreements		779		—		3			(1,677	)		(51,324	)
		23,040		69,797		(22,022	)		(143,999	)		(299,570	)

As at December 31, 2014, the Company had multiple interest rate swaps, cross currency swaps and foreign currency forward contracts with the same counterparty that are subject to the same master agreements. Each of these master agreements provides for the net settlement of all derivatives subject to that master agreement through a single payment in the event of default or termination of any one derivative. The fair value of these derivatives is presented on a gross basis in the Company’s consolidated balance sheets. As at December 31, 2014, these derivatives had an aggregate fair value asset amount of nil and an aggregate fair value liability amount of $487.8 million. As at December 31, 2014, the Company had $85.5 million on deposit with the relevant counterparties as security for swap liabilities under certain master agreements. The deposit is presented in restricted cash on the consolidated balance sheets.

Realized and unrealized gains and (losses) 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 on non-designated derivatives in the consolidated statements of income. The effect of the gains and losses on derivatives not designated as hedging instruments in the consolidated statements of income (loss) are as follows:

	Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,
	2014			2013			2012
	$			$			$
Realized (losses) gains relating to:
Interest rate swap agreements		(125,424	)		(122,439	)		(123,277	)
Interest rate swap agreement terminations		(1,319	)		(35,985	)		—
Foreign currency forward contracts		(4,436	)		(2,027	)		1,155
Foinaven embedded derivative		—			—			11,452
		(131,179	)		(160,451	)		(110,670	)
Unrealized (losses) gains relating to:
Interest rate swap agreements		(86,045	)		182,800			26,770
Foreign currency forward contracts		(16,926	)		(3,935	)		6,933
Stock purchase warrants		2,475			—			—
Foinaven embedded derivative		—			—			(3,385	)
		(100,496	)		178,865			30,318
Total realized and unrealized (losses) gains on derivative instruments		(231,675	)		18,414			(80,352	)

Realized and unrealized (losses) gains of the cross currency swaps are recognized in earnings and reported in foreign currency exchange gain (loss) in the consolidated statements of income (loss). The effect of the loss on cross currency swaps on the consolidated statements of income (loss) is as follows:

	Year Ended December 31,
	2014			2013			2012
	$			$			$
Realized gain on partial termination of cross currency swap		—			6,800			—
Realized (losses) gains		(3,955	)		2,089			3,628
Unrealized (losses) gains		(167,334	)		(65,387	)		10,715
Total realized and unrealized (losses) gains on cross currency swaps		(171,289	)		(56,498	)		14,343

The Company is exposed to credit loss to the extent the fair value represents an asset 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, 2014

Fair Value Disclosures [Abstract]

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 assets held for sale – The estimated fair value of the Company’s vessels and equipment and vessels held for sale was 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. Other assets held for sale include working capital balances and the fair value of such amounts generally approximate their carrying value.

Investment in term loans –The fair value of the Company’s investment in term loans was 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 was 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 receivable included in other assets – The fair values of the Company’s long-term loan receivable is estimated using discounted cash flow analysis based on rates currently available for debt with similar terms and remaining maturities and the current credit worthiness of the counterparty.

Long-term debt and liabilities associated with assets held for sale – 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. Alternatively, if the fixed-rate and variable-rate long-term debt is held for sale the fair value is based on the estimated sales price. Other liabilities held for sale include working capital balances and the fair value of such amounts generally approximate their carrying value.

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. 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, 2014						December 31, 2013
				Carrying			Fair			Carrying			Fair
	Fair			Amount			Value			Amount			Value
	Value Hierarchy			Asset (Liability)			Asset (Liability)			Asset (Liability)			Asset (Liability)
	Level			$			$			$			$
Recurring
Cash and cash equivalents, restricted cash, and marketable securities		Level 1			927,679			927,679			1,119,966			1,119,966
Derivative instruments (note 15)
Interest rate swap agreements—assets (1)		Level 2			1,051			1,051			91,415			91,415
Interest rate swap agreements—liabilities (1)		Level 2			(406,783	)		(406,783	)		(410,470	)		(410,470	)
Cross currency interest swap agreement		Level 2			(221,391	)		(221,391	)		(52,219	)		(52,219	)
Foreign currency contracts		Level 2			(18,407	)		(18,407	)		(1,480	)		(1,480	)
Stock purchase warrants (note 3e and 15)		Level 3			9,314			9,314			—			—
Logitel contingent consideration (see below)		Level 3			(21,448	)		(21,448	)		—			—
Non-recurring
Vessels and equipment (note 18b)		Level 2			—			—			17,250			17,250
Assets held for sale (2) (note 18b)		Level 2			—			—			176,247			176,247
Other
Investment in term loans		Level 3			—			—			211,579			209,570
Loans to equity-accounted investees and joint venture partners - Current		(3	)		26,209			(3	)		37,019			(3	)
Loans to equity-accounted investees and joint venture partners - Long-term		(3	)		227,217			(3	)		132,229			(3	)
Liabilities associated with assets held for sale (2) (note 18b)		Level 2			—			—			(168,007	)		(168,007	)
Long-term receivable included in other assets		Level 2			15,758			15,758			—			—
Long-term debt - public (note 8)		Level 1			(1,554,609	)		(1,574,440	)		(1,313,358	)		(1,376,829	)
Long-term debt - non-public (note 8)		Level 2			(5,181,889	)		(5,094,857	)		(4,796,112	)		(4,582,274	)

(1) The fair value of the Company’s interest rate swap agreements at December 31, 2014 includes $24.5 million (December 31, 2013- $22.0 million) of net accrued interest which is recorded in accrued liabilities and accounts receivable on the consolidated balance sheets.

(2) The fair value of the Company’s assets held for sale and liabilities associated with assets held for sale include vessels held for sale, long-term debt and other working capital balances.

(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

Changes in fair value during the year ended December 31, 2014 for one of the Company’s derivative instruments, the TIL stock purchase warrants, which are described below and are measured at fair value on the recurring basis using significant unobservable inputs (Level 3), are as follows:

.

	Year Ended December 31,
	2014
	$
Fair value at the beginning of the year		—
Fair value on issuance		6,840
Unrealized gain included in earnings		2,474
Fair value at the end of the year		9,314

During January 2014, the Company received stock purchase warrants entitling it to purchase up to 1.5 million shares of the common stock of TIL (see Note 15). The estimated fair value of the stock purchase warrants was determined using a Monte-Carlo simulation and is based, in part, on the historical price of common shares of TIL, the risk-free rate, vesting conditions and the historical volatility of comparable companies. The estimated fair value of these stock purchase warrants as of December 31, 2014 is based on the historical volatility of the comparable companies of 61.5%. A higher or lower volatility would result in a higher or lower fair value of this derivative asset.

Contingent consideration liability – In August 2014, Teekay Offshore acquired 100% of the outstanding shares of Logitel, a Norway-based company focused on the high-end floating accommodation market, from Cefront Technology AS (or Cefront) for $4 million, which was paid in cash at closing, plus a potential additional amount of up to $27.6 million, depending upon certain performance criteria, which is payable from early-2015 to early-2018 (see Note 3a).

Teekay Offshore will owe an additional amount of up to $27.6 million if there are no yard cost overruns and no charterer late delivery penalties; the two unfixed FAUs under construction are chartered above specified rates and no material defects from construction are identified up until one year after the delivery of each FAU. To the extent such events occur, the potential additional amount of $27.6 million will be reduced in accordance with the terms of the purchase agreement. The estimated fair value of the contingent consideration liability of $27.6 million is the amount Teekay Offshore expects to pay to Cefront discounted to its present value using a weighted average cost of capital rate of 10%. As of December 31, 2014, the amount of the expected payments for each FAU was based upon the construction status for each FAU, the state of the charter market for FAUs, the expectation of potential material defects and, to a lesser extent, the timing of delivery of each FAU. An increase (decrease) in Teekay Offshore’s estimates of yard cost overruns, charterer late delivery penalties, material defects and the discount rate, as well as a decrease (increase) in Teekay Offshore’s estimates of day rates at which it expects to charter the two unchartered FAUs, will decrease (increase) the estimated fair value of the contingent consideration liability.

Changes in the estimated fair value of Teekay Offshore’s contingent consideration liability relating to the acquisition of Logitel, which is measured at fair value on a recurring basis using significant unobservable inputs (Level 3), during the year ended December 31, 2014 is as follows:

	Year Ended December 31,
	2014
	$
Balance at beginning of year		—
Acquisition of Logitel		(21,170	)
Unrealized loss included in other income - net		(278	)
Balance at end of year		(21,448	)

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Long-Term Debt - Additional Information - USD Term Loans (Detail) (USD $)	12 Months Ended
	Dec. 31, 2014 Vessel Term_loan	Dec. 31, 2013 Vessel
Debt Instrument [Line Items]
Long-term Debt	$ 6,736,498,000	$ 6,109,470,000
Interest at a weighted-average fixed rate	3.20%	3.00%
Secured debt [Member]
Debt Instrument [Line Items]
Number of debt instruments	18
Long-term Debt	3,100,000,000	2,500,000,000
Number of term loans which have balloon or bullet repayments	17
Number of vessels	34	35
Debt instrument collateral, description	The term loans are collateralized by first-priority mortgages on 34 (December 31, 2013 - 35) of the Company's vessels, together with certain other security.
Outstanding term loans not guaranteed by Teekay or its subsidiaries	79,300,000	94,400,000
Term loan payments	Quarterly or semi-annual payments commencing three or six months after delivery of each newbuilding vessel financed thereby,
Secured debt [Member] | Certain Term Loans [Member]
Debt Instrument [Line Items]
Long-term Debt	$ 37,800,000	$ 176,300,000
Interest at a weighted-average fixed rate	4.80%	5.20%
Secured debt [Member] | Remaining Term Loans [Member]
Debt Instrument [Line Items]
Debt instrument, interest rate terms	LIBOR plus a margin
Debt instrument variable interest rate	0.30%	3.25%
Debt instrument interest	0.26%	0.25%

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Accrued Liabilities

12 Months Ended

Dec. 31, 2014

Payables and Accruals [Abstract]

Accrued Liabilities

7. Accrued Liabilities

	December 31, 2014		December 31, 2013
	$		$
Voyage and vessel expenses		163,155		250,557
Interest		60,064		73,817
Payroll and benefits and other		100,606		91,369
Deferred revenue - current		66,027		49,486
Loan from affiliates		4,907		1,595
		394,759		466,824

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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, 2014	Dec. 31, 2013	Dec. 31, 2012
Schedule of Equity Method Investments [Line Items]
Income from vessel operations	$ 427,159	$ 62,746	$ (150,393)
Equity Method Investments [Member]
Schedule of Equity Method Investments [Line Items]
Revenues	998,655	940,156	659,030
Income from vessel operations	454,135	328,430	241,702
Realized and unrealized (loss) gain on derivative instruments	(58,884)	16,334	(56,307)
Net income	300,837	288,550	120,395
Equity Method Investments [Member] | Other assets - current [Member]
Schedule of Equity Method Investments [Line Items]
Current Assets	249,882	165,919
Equity Method Investments [Member] | Other assets - non - current [Member]
Schedule of Equity Method Investments [Line Items]
Non-current assets	150,618	302,255
Equity Method Investments [Member] | Other liabilities - current [Member]
Schedule of Equity Method Investments [Line Items]
Current liabilities	217,180	216,659
Equity Method Investments [Member] | Other liabilities - non-current [Member]
Schedule of Equity Method Investments [Line Items]
Non-current liabilities	459,907	256,465
Equity Method Investments [Member] | Vessels and Equipment [Member]
Schedule of Equity Method Investments [Line Items]
Non-current assets	3,345,590	2,496,086
Equity Method Investments [Member] | Cash and restricted cash [Member]
Schedule of Equity Method Investments [Line Items]
Current Assets	434,833	323,065
Equity Method Investments [Member] | Net investment in direct financing leases [Member]
Schedule of Equity Method Investments [Line Items]
Non-current assets	1,873,803	1,907,458
Equity Method Investments [Member] | Current portion of long-term debt and obligations under capital lease [Member]
Schedule of Equity Method Investments [Line Items]
Current liabilities	526,097	501,683
Equity Method Investments [Member] | Long-term debt and obligations under capital lease [Member]
Schedule of Equity Method Investments [Line Items]
Non-current liabilities	$ 2,958,698	$ 2,973,170

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Segment Reporting - Reconciliation of Total Segment Assets (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Segment Reporting Information [Line Items]
Consolidated total assets	$ 11,864,212	$ 11,555,701
Shuttle Tanker, FSO and Offshore Support Segment [Member]
Segment Reporting Information [Line Items]
Consolidated total assets	2,055,348	1,947,905
FPSO Segment [Member]
Segment Reporting Information [Line Items]
Consolidated total assets	3,442,109	2,836,998
Liquefied Gas Segment [Member]
Segment Reporting Information [Line Items]
Consolidated total assets	3,401,167	3,616,044
Conventional Tanker [Member]
Segment Reporting Information [Line Items]
Consolidated total assets	1,538,074	1,874,101
Cash [Member]
Segment Reporting Information [Line Items]
Consolidated total assets	806,904	614,660
Accounts Receivable [Member] | Other Assets [Member]
Segment Reporting Information [Line Items]
Consolidated total assets	$ 620,610	$ 665,993

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Derivative Instruments and Hedging Activities - Commitment of Cross Currency Swaps (Detail) In Thousands, unless otherwise specified			12 Months Ended
	Dec. 31, 2014 USD ($)	Dec. 31, 2014 Cross Currency Interest Rate Contract [Member] USD ($)	Dec. 31, 2014 Cross Currency Interest Rate Contract [Member] Maturing In October 2015 [Member] NIBOR [Member] USD ($)	Dec. 31, 2014 Cross Currency Interest Rate Contract [Member] Maturing In October 2015 [Member] NIBOR [Member] NOK	Dec. 31, 2014 Cross Currency Interest Rate Contract [Member] Maturing In January 2016 [Member] NIBOR [Member] USD ($)	Dec. 31, 2014 Cross Currency Interest Rate Contract [Member] Maturing In January 2016 [Member] NIBOR [Member] NOK	Dec. 31, 2014 Cross Currency Interest Rate Contract [Member] Maturing In January 2017 [Member] NIBOR [Member] USD ($)	Dec. 31, 2014 Cross Currency Interest Rate Contract [Member] Maturing In January 2017 [Member] NIBOR [Member] NOK	Dec. 31, 2014 Cross Currency Interest Rate Contract [Member] Maturing In May 2017 [Member] NIBOR [Member] USD ($)	Dec. 31, 2014 Cross Currency Interest Rate Contract [Member] Maturing In May 2017 [Member] NIBOR [Member] NOK	Dec. 31, 2014 Cross Currency Interest Rate Contract [Member] Maturing In 2018 [Member] NIBOR [Member] USD ($)	Dec. 31, 2014 Cross Currency Interest Rate Contract [Member] Maturing In 2018 [Member] NIBOR [Member] NOK	Dec. 31, 2014 Cross Currency Interest Rate Contract [Member] Maturing In September 2018 [Member] NIBOR [Member] USD ($)	Dec. 31, 2014 Cross Currency Interest Rate Contract [Member] Maturing In September 2018 [Member] NIBOR [Member] NOK	Dec. 31, 2014 Cross Currency Interest Rate Contract [Member] Maturing In January 2019 [Member] NIBOR [Member] USD ($)	Dec. 31, 2014 Cross Currency Interest Rate Contract [Member] Maturing In January 2019 [Member] NIBOR [Member] NOK
Derivative [Line Items]
Fair Value / Carrying Amount of Asset / (Liability)	$ (18,407)	$ (221,391)	$ (30,501)		$ (23,843)		$ (24,732)		$ (35,766)		$ (38,898)		$ (34,620)		$ (33,031)
Notional Amount			$ 122,800	700,000	$ 89,710	500,000	$ 101,351	600,000	$ 125,000	700,000	$ 143,536	800,000	$ 150,000	900,000	$ 162,200	1,000,000
Receivable Margin			4.75%	4.75%	4.00%	4.00%	5.75%	5.75%	5.25%	5.25%	4.75%	4.75%	4.35%	4.35%	4.25%	4.25%
Fixed Rate Payable			5.52%	5.52%	4.80%	4.80%	7.49%	7.49%	6.88%	6.88%	5.93%	5.93%	6.43%	6.43%	6.28%	6.28%
Remaining Term (years)			9 months 18 days	9 months 18 days	1 year 1 month 6 days	1 year 1 month 6 days	2 years 1 month 6 days	2 years 1 month 6 days	2 years 3 months 18 days	2 years 3 months 18 days	3 years 1 month 6 days	3 years 1 month 6 days	3 years 8 months 12 days	3 years 8 months 12 days	4 years 1 month 6 days	4 years 1 month 6 days

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Financing Transactions

12 Months Ended

Dec. 31, 2014

Equity [Abstract]

Financing Transactions

5. Financing Transactions

During the years ended December 31, 2014, 2013, and 2012, 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 $(1)			Offering Expenses $			Net Proceeds Received $
2014
Teekay Offshore Continuous Offering Program		7,784		(156	)		(153	)		7,475
Teekay Offshore Direct Equity Placement		178,569		(3,571	)		(75	)		174,923
Teekay LNG Public Offering		140,784		(2,816	)		(299	)		137,669
Teekay LNG Continuous Offering Program		42,556		(851	)		(901	)		40,804
Teekay Tankers Public Offering		116,000		(20,000	)		(4,810	)		91,190
2013
Teekay Offshore Direct Equity Placements		115,688		(2,314	)		(188	)		113,186
Teekay Offshore Preferred Units Offering		150,000		—			(5,200	)		144,800
Teekay Offshore Continuous Offering Program		2,819		(59	)		(449	)		2,311
Teekay LNG Continuous Offering Program		5,383		(107	)		(457	)		4,819
Teekay LNG Direct Equity Placement		40,816		(816	)		(40	)		39,960
Teekay LNG Public Offering		150,040		(3,001	)		(5,222	)		141,817
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

(1) Consists of the portion Teekay subscribed for in the public offering or equity placement.

In April 2013, the Voyageur Spirit FPSO unit began production and on May 2, 2013, Teekay completed the acquisition of the Voyageur Spirit FPSO unit and, immediately thereafter, Teekay Offshore acquired the unit from Teekay for an original purchase price of $540.0 million (see Note 3(f)). Teekay Offshore financed the acquisition with the assumption of the $230.0 million debt facility secured by the unit, $253.0 million in cash and a $44.3 million equity private placement of common units to Teekay (including the general partner’s 2% proportionate capital contribution), which had a value of $40.0 million at the time Teekay offered to sell the FPSO unit to Teekay Offshore. Upon completion of the private placement to Teekay, Teekay Offshore had 83.6 million common units outstanding.

In August 2014, Teekay Tankers purchased from Teekay a 50% interest in Teekay Tanker Operations Ltd. (TTOL), which owns conventional tanker commercial management and technical management operations, including the direct ownership in three commercially managed tanker pools, for an aggregate price of approximately $23.5 million, including net working capital. As consideration for this acquisition, Teekay Tankers issued to Teekay 4.2 million Class B common shares. The 4.2 million Class B common shares had an approximate aggregate value of $15.6 million, or $3.70 per share, when the purchase price was agreed to between the parties and an aggregate value of $17.0 million, or $4.03 per share, on the acquisition closing date. The purchase price, for accounting purposes, is based upon the value of the Class B common shares on the acquisition closing date. In addition, Teekay Tankers reimbursed Teekay for $6.5 million of working capital it assumed from Teekay in connection with the purchase. The book value of the assets acquired, including working capital, was $16.9 million on the date of acquisition. Upon completion of the purchase from Teekay, Teekay Tankers had 87.8 million common shares outstanding.

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 $68.4 million (2014), $36.7 million (2013) and $88.7 million (2012). These amounts represent Teekay’s dilution gains from the issuance of units and shares by these consolidated subsidiaries.

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Goodwill, Intangible Assets and In-Process Revenue Contracts

12 Months Ended

Dec. 31, 2014

Text Block [Abstract]

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, 2014 and 2013, for the Company’s reportable segments are as follows:

	Shuttle Tanker, FSO and Offshore Support Segment		Liquefied Gas Segment		Total
	$		$		$
Balance as of December 31, 2012 and 2013		130,908		35,631		166,539
Goodwill acquired		2,032		—		2,032
Balance as of December 31, 2014		132,940		35,631		168,571

In March 2014, Teekay Offshore acquired 100% of the shares of ALP, a Netherlands-based provider of long-distance ocean towage and offshore installation services to the global offshore oil and gas industry. The goodwill recognized in connection with the ALP acquisition is attributable primarily to the assembled workforce of ALP, including their experience, skills and abilities (see Note 3d).

Intangible Assets

As at December 31, 2014, the Company’s intangible assets consisted of:

	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
	$		$			$
Customer contracts		316,684		(223,018	)		93,666
Other intangible assets		1,000		—			1,000
		317,684		(223,018	)		94,666

As at December 31, 2013 the Company’s intangible assets consisted of:

	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
	$		$			$
Customer contracts		316,684		(209,786	)		106,898
Other intangible assets		1,280		(280	)		1,000
		317,964		(210,066	)		107,898

Aggregate amortization expense of intangible assets for the year ended December 31, 2014, was $13.2 million (2013—$18.2 million, 2012 - $17.2 million), which is included in depreciation and amortization. Amortization of intangible assets following 2014 is expected to be $11.9 million (2015), $10.9 million (2016), $9.8 million (2017), $8.9 million (2018), $8.9 million (2019) and $44.3 million (thereafter).

In-Process Revenue Contracts

As part of the Company’s acquisition of FPSO units from Sevan and its previous acquisition of Petrojarl ASA (subsequently renamed Teekay Petrojarl AS, or Teekay Petrojarl), and Teekay LNG’s acquisition of BG’s ownership interests in four LNG carrier newbuildings, the Company assumed certain FPSO contracts, time charter-out contracts with terms that were less favorable than the then prevailing market terms, and a service obligation for shipbuilding supervision and crew training services for the four LNG carrier newbuildings. At the time of the acquisitions, the Company recognized liabilities based on the estimated fair value of these contracts and service obligations. The Company is amortizing these liabilities over the estimated remaining terms of their associated 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, 2014 was $40.9 million (2013—$61.7 million, 2012 - $72.9 million), which is included in revenues on the consolidated statements of income (loss). Amortization following 2014 is expected to be $22.8 million (2015), $29.6 million (2016), $32.7 million (2017), $22.2 million (2018), $14.9 million (2019) and $51.2 million (thereafter).

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Pension Benefits - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2011
Defined Benefit Plan Disclosure [Line Items]
Cost recognized for defined contribution pension plans	$ 18.0	$ 14.8	$ 14.5
Accumulated benefit obligation	95.7	116.1
Estimations of contributions into benefit plan during 2015	$ 7.5
NORWAY
Defined Benefit Plan Disclosure [Line Items]
Percentage of ownership of defined benefit pension assets	69.00%
AUSTRALIA
Defined Benefit Plan Disclosure [Line Items]
Percentage of ownership of defined benefit pension assets	31.00%

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Long-Term Debt

12 Months Ended

Dec. 31, 2014

Debt Disclosure [Abstract]

Long-Term Debt

8. Long-Term Debt

	December 31, 2014		December 31, 2013
	$		$
Revolving Credit Facilities		1,766,822		1,919,086
Senior Notes (8.5%) due January 15, 2020		390,712		447,430
Norwegian Kroner-denominated Bonds due through January 2019		697,798		691,778
U.S. Dollar-denominated Term Loans due through 2023		3,103,255		2,523,523
U.S. Dollar Bonds due through 2023		492,918		174,150
Euro-denominated Term Loans due through 2023		284,993		340,221
U.S. Dollar-denominated Unsecured Demand Loans due to Joint Venture Partners		—		13,282
Total		6,736,498		6,109,470
Less current portion		654,134		996,425
Long-term portion		6,082,364		5,113,045

As of December 31, 2014, the Company had 13 revolving credit facilities (or the Revolvers) available, which, as at such date, provided for aggregate borrowings of up to $2.4 billion, of which $0.6 billion was undrawn. Interest payments are based on LIBOR plus margins; at December 31, 2014 and December 31, 2013, the margins ranged between 0.45% and 3.95% and 0.45% and 4.5%, respectively. At December 31, 2014 and December 31, 2013, the three-month LIBOR was 0.26% and 0.25%, respectively. The total amount available under the Revolvers reduces by $382.2 million (2015), $506.2 million (2016), $529.7 million (2017), $895.2 million (2018) and $49.5 million (2019). The Revolvers are collateralized by first-priority mortgages granted on 51 of the Company’s vessels, together with other related security, and include a guarantee from Teekay or its subsidiaries for all outstanding amounts. Included in other security are 23.8 million common units in Teekay Offshore and 25.2 million common units in Teekay LNG which secure a $500 million credit facility. The maximum amount available under the facility is dependent on the market value of the units in Teekay Offshore and Teekay LNG. At December 31, 2014, the maximum available amount was $473.5 million.

The Company’s 8.5% senior unsecured notes (or the 8.5% Notes) are due January 15, 2020 with an original 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. During 2014, the Company repurchased the principal amount of $57.3 million of the 8.5% Notes at a premium of $7.7 million and such amount is reflected in other income in the Company’s consolidated statements of income (loss).

Teekay Offshore, Teekay LNG and Teekay have issued in the Norwegian bond market a total of NOK 4.2 billion of senior unsecured bonds that mature between October 2015 and September 2018. As at December 31, 2014, the total carrying amount of the bonds was $563.6 million. The bonds are listed on the Oslo Stock Exchange. The interest payments on the bonds are based on NIBOR plus a margin, which ranges from 4.00% to 5.75%. The Company entered into cross currency rate swaps to swap all interest and principal payments of the bonds into U.S. Dollars, with the interest payments fixed at rates ranging from 4.80% to 7.49%, and the transfer of principal fixed at $732.4 million upon maturity in exchange for NOK 4.2 billion (see Note 15).

In January 2014, Teekay Offshore issued NOK 1,000 million in senior unsecured bonds that mature in January 2019 in the Norwegian bond market. As of December 31, 2014, the carrying amount of the bonds was $134.2 million. The bonds were listed on the Oslo Stock Exchange in June 2014. The interest payments on the bonds are based on NIBOR plus a margin of 4.25%. Teekay Offshore entered into a cross currency swap to swap all interest and principal payments into U.S. Dollars, with the interest payments fixed at a rate of 6.28%, and the transfer of the principal amount fixed at $162.2 million upon maturity in exchange for NOK 1,000 million (see Note 15).

As of December 31, 2014, the Company had 18 U.S. Dollar-denominated term loans outstanding, which totaled $3.1 billion in aggregate principal amount (December 31, 2013 – $2.5 billion). Certain of the term loans with a total outstanding principal balance of $37.8 million as at December 31, 2014 (December 31, 2013 – $176.3 million) bear interest at a weighted-average fixed rate of 4.8% (December 31, 2013 – 5.2%). Interest payments on the remaining term loans are based on LIBOR plus a margin. At December 31, 2014 and December 31, 2013, the margins ranged between 0.3% and 3.25%. At December 31, 2014 and December 31, 2013, the three-month LIBOR was 0.26% and 0.25%, 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 34 (December 31, 2013 – 35) of the Company’s vessels, together with certain other security. In addition, at December 31, 2014, all but $79.3 million (December 31, 2013 – $94.4 million) of the outstanding term loans were guaranteed by Teekay or its subsidiaries.

During May 2014, Teekay Offshore issued $300 million in five-year senior unsecured bonds that mature in July 2019 in the U.S. bond market. As of December 31, 2014, the carrying amount of the bonds was $300.0 million. The bonds were listed on the New York Stock Exchange in June 2014. The interest payments on the bonds are fixed at a rate of 6.0%.

In September 2013 and November 2013, Teekay Offshore issued $174.2 million of ten-year senior unsecured bonds that mature in December 2023 and that were issued in a U.S. private placement to finance the Bossa Nova Spirit and the Sertanejo Spirit shuttle tankers. The bonds accrue interest at a fixed combined rate of 4.96%. The bonds are collateralized by first-priority mortgages on the two vessels to which the bonds relate, together with other related security. During the year, Teekay Offshore made semi-annual repayments on the bonds and as of December 31, 2014, the carrying amount of the bonds was $166.1 million.

In August 2014, Teekay Offshore assumed Logitel’s obligations under a bond agreement from Sevan as part of the acquisition (see note 3a). The bonds are redeemable at par at any time by Logitel. As of December 31, 2014, the carrying amount of the bond was $26.8 million.

The Company has two Euro-denominated term loans outstanding, which, as at December 31, 2014, totaled 235.6 million Euros ($285.0 million) (December 31, 2013 – 247.6 million Euros ($340.2 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, 2014 and December 31, 2013, the margins ranged between 0.6% and 2.25% and the one-month EURIBOR at December 31, 2014 was 0.02% (December 31, 2013 – 0.2%). The Euro-denominated term loans reduce in monthly payments with varying maturities through 2023, 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 NOK-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 NOK-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 gains of $13.4 million (2013 – $13.3 million loss, 2012 – $12.9 million loss).

The Teekay Nakilat Joint Venture had a U.S. Dollar-denominated demand loan of $13.3 million as at December 31, 2013 owing to Qatar Gas Transport Company Ltd. (or Nakilat), which was repaid by the Teekay Nakilat Joint Venture during 2014.

The weighted-average effective interest rate on the Company’s aggregate long-term debt as at December 31, 2014 was 3.2% (December 31, 2013 – 3.0%). This rate does not include the effect of the Company’s interest rate swap agreements (see Note 15).

Among other matters, the Company’s long-term debt agreements generally provide for maintenance of minimum consolidated financial covenants and six loan agreements require the maintenance of vessel market value to loan ratios. As at December 31, 2014, these ratios ranged from 137.4% to 675.6% compared to their minimum required ratios of 105% to 130%. The vessel values used in these ratios are the appraised values prepared by the Company based on second hand sale and purchase market data. Changes in the conventional tanker market, FPSO 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, 2014 and December 31, 2013, 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, 2014, this aggregate amount was $368.1 million (December 31, 2013- $344.9 million). As at December 31, 2014, the Company was in compliance with all covenants required by its credit facilities and other long-term debt.

The aggregate annual long-term debt principal repayments required to be made by the Company subsequent to December 31, 2014, are $654.1 million (2015), $797.1 million (2016), $1.1 billion (2017), $1.6 billion (2018), $744.6 million (2019) and $1.8 billion (thereafter).

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Investments - Acquisition of Logitel Offshore Holding AS - Summary of Preliminary and Finalized Fair Values of Assets Acquired and Liabilities Assumed (Detail) (Teekay Offshore [Member], USD $) In Thousands, unless otherwise specified	0 Months Ended
	May 02, 2013	Aug. 11, 2014
LIABILITIES
Long-term debt	$ 230,000
Cash consideration	253,000
Logitel Offshore Holdings [Member]
ASSETS
Cash and cash equivalents		8,089
Prepaid expenses		640
Advances on newbuilding contracts		46,809
Total assets acquired		55,538
LIABILITIES
Accrued liabilities		4,098
Long-term debt		26,270
Total liabilities assumed		30,368
Net assets acquired		25,170
Cash consideration		4,000
Contingent consideration		$ 21,170

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Commitments and Contingencies - Additional Information - Navion Hispania (Detail)	Dec. 31, 2014 USD ($)	Dec. 31, 2013 USD ($)	Dec. 31, 2014 Navion Offshore Loading [Member] USD ($)	Dec. 31, 2013 Navion Offshore Loading [Member] USD ($)	Dec. 31, 2013 Navion Offshore Loading [Member] NOK	Dec. 31, 2014 Navion Offshore Loading [Member] Loss from Catastrophes [Member] USD ($)	Dec. 31, 2014 Navion Offshore Loading [Member] Loss from Catastrophes [Member] NOK
Long-term Purchase Commitment [Line Items]
Loss contingency, liability accrual			$ 0	$ 29,000,000	216,400,000	$ 15,800,000	117,500,000
Accounts receivable	378,193,000	528,594,000		29,000,000	216,400,000	15,800,000	117,500,000
Accounts receivable			$ 0

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Long-Term Debt - Additional Information - Senior unsecured bonds (Detail) (Teekay Offshore [Member], USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	May 31, 2014	Nov. 30, 2013	Sep. 30, 2013
Logitel Offshore Holdings [Member]
Debt Instrument [Line Items]
Debt instrument, carrying amount	$ 26.8
Five-year senior unsecured bonds [Member]
Debt Instrument [Line Items]
Senior unsecured bonds issued		300.0
Debt instrument, carrying amount	300.0
Fixed interest rate of bonds		6.00%
Ten-year senior unsecured bonds [Member]
Debt Instrument [Line Items]
Senior unsecured bonds issued			174.2	174.2
Debt instrument, carrying amount	$ 166.1
Fixed interest rate of bonds			4.96%	4.96%
Debt instrument collateral, description	The bonds are collateralized by first-priority mortgages on the two vessels to which the bonds relate, together with other related security.
Frequency of paying U.S. Dollar-denominated Term Loans	Semi-annual repayments

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Investments - Teekay LNG - BG International Limited Joint Venture - Additional Information (Detail) (USD $)	1 Months Ended	12 Months Ended
	Jun. 30, 2014 Vessel m3	Dec. 31, 2014 Vessel
Net Investment Income [Line Items]
Equity method investment, ownership interest		16.05%
Newbuildings [Member]
Net Investment Income [Line Items]
Expected cost of project		$ 2,800,000,000
Teekay LNG [Member] | Newbuildings [Member]
Net Investment Income [Line Items]
Number of vessels		4
Equity method investment, ownership interest		33.00%
Teekay LNG [Member] | BG Joint Venture [Member] | Newbuildings [Member] | 30% Ownership [Member]
Net Investment Income [Line Items]
Number of vessels	2
Teekay LNG [Member] | BG Joint Venture [Member] | Newbuildings [Member] | 20% Ownership [Member]
Net Investment Income [Line Items]
Number of vessels	2
Teekay LNG [Member] | BG Joint Venture [Member] | Newbuildings [Member] | Shipbuilding supervision and crew training services [Member]
Net Investment Income [Line Items]
Number of vessels	4	4
Volume of vessels	174,000
Expected cost of project	1,000,000,000	1,000,000,000
Operating lease arrangement period, lessor		20 years
Cost of service obligation	33,300,000	33,300,000
Fair value of amount due	16,500,000
Carrying value of service obligation		17,100,000
Carrying value of receivable		33,700,000
Excess of book value over the investment	16,800,000
Teekay LNG [Member] | BG Joint Venture [Member] | Newbuildings [Member] | Shipbuilding supervision and crew training services [Member] | 30% Ownership [Member]
Net Investment Income [Line Items]
Equity method investment, ownership interest	30.00%
Teekay LNG [Member] | BG Joint Venture [Member] | Newbuildings [Member] | Shipbuilding supervision and crew training services [Member] | 20% Ownership [Member]
Net Investment Income [Line Items]
Equity method investment, ownership interest	20.00%
Teekay LNG [Member] | BG Joint Venture [Member] | Newbuildings [Member] | Shipbuilding supervision and crew training services [Member] | Fair Value Asset (Liability) [Member]
Net Investment Income [Line Items]
Cost of service obligation	38,700,000
Teekay LNG [Member] | BG Joint Venture [Member] | Newbuildings [Member] | Shipbuilding supervision and crew training services [Member] | Principal Amount [Member]
Net Investment Income [Line Items]
Fair value of amount due	$ 20,300,000	$ 20,300,000

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Fair Value Measurements - Changes in Estimated Fair Value of Contingent Consideration Liability Relating to Acquisition of Logitel (Detail) (Contingent Consideration [Member], Logitel Offshore Holdings [Member], Teekay Offshore [Member], USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014
Contingent Consideration [Member] | Logitel Offshore Holdings [Member] | Teekay Offshore [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Balance at beginning of year
Acquisition of Logitel	(21,170)
Unrealized loss included in other income - net	(278)
Balance at end of year	$ (21,448)

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Investments - Acquisition of Logitel Offshore Holding AS - Additional Information (Detail) (USD $)	12 Months Ended			0 Months Ended	1 Months Ended	0 Months Ended	1 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Aug. 11, 2014 FloatingAccommodationUnits	Feb. 28, 2015 FloatingAccommodationUnits	May 02, 2013	Aug. 31, 2014 PurchaseOrder
Net Investment Income [Line Items]
Revenue	$ 1,993,920,000	$ 1,830,085,000	$ 1,980,771,000
Net loss	124,002,000	35,480,000	(311,116,000)
Newbuildings [Member]
Net Investment Income [Line Items]
Expected cost of project	2,800,000,000
Logitel Offshore Holdings [Member]
Net Investment Income [Line Items]
Number of floating accommodation units				3
Expected cost of project				588,000,000
Revenue	0
Net loss	(1,000,000)
Logitel Offshore Holdings [Member] | Order or Production Backlog [Member]
Net Investment Income [Line Items]
Number of options to order				6
Logitel Offshore Holdings [Member] | Delivered [Member]
Net Investment Income [Line Items]
Operating lease arrangement period, lessor	3 years
Logitel Offshore Holdings [Member] | Delivered [Member] | Subsequent Events [Member]
Net Investment Income [Line Items]
Number of floating accommodation units					1
Logitel Offshore Holdings [Member] | Newbuildings [Member]
Net Investment Income [Line Items]
Number of floating accommodation units				1
Teekay Offshore [Member]
Net Investment Income [Line Items]
Portion of purchase price paid in cash						253,000,000
Teekay Offshore [Member] | Logitel Offshore Holdings [Member]
Net Investment Income [Line Items]
Percentage of ownership acquired				100.00%
Portion of purchase price paid in cash				4,000,000
Potential additional cash amount for purchase price				27,600,000
Teekay Offshore [Member] | Logitel Offshore Holdings [Member] | Order or Production Backlog [Member]
Net Investment Income [Line Items]
Repayment of non-interest bearing amount on bond				30,000,000
Long-term debt, maturities, repayment terms	Within six months of delivery of each of the three FAUs ordered from COSCO
Teekay Offshore [Member] | Logitel Offshore Holdings [Member] | Newbuildings [Member]
Net Investment Income [Line Items]
Number of floating accommodation units				2
Teekay Offshore [Member] | Logitel Offshore Holdings [Member] | Newbuildings [Member] | Order or Production Backlog [Member]
Net Investment Income [Line Items]
Repayment of non-interest bearing amount on bond	10,000,000
Debt conversion	If Logitel orders additional FAUs with the Sevan cylindrical design, Logitel will be required to pay Sevan up to $11.9 million for each of the next three FAUs ordered. If the fourth of six options with COSCO is not exercised by its option expiry date on November 30, 2016, Sevan has a one-time option to receive the remaining two options with COSCO
Teekay Offshore [Member] | Logitel Offshore Holdings [Member] | Option To Order Exercised [Member] | Order or Production Backlog [Member]
Net Investment Income [Line Items]
Number of options to order							1
Teekay Offshore [Member] | Sevan Marine [Member] | Newbuildings [Member] | Additional Order Or Production Backlog [Member] | Maximum [Member]
Net Investment Income [Line Items]
Repayment of non-interest bearing amount on bond				$ 11,900,000

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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) (Teekay Tangguh Joint Venture [Member], USD $) In Millions, unless otherwise specified	Dec. 31, 2014
Operating Leased Assets [Line Items]
Head lease payment received	$ 206.6
Sublease payment made	139.6
Accrued Liabilities [Member]
Operating Leased Assets [Line Items]
Deferred Head Lease receipts	2.8
Other Long Term Liabilities [Member]
Operating Leased Assets [Line Items]
Deferred Head Lease receipts	$ 44.1

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Loss Per Share - Additional Information (Detail) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Earnings Per Share [Abstract]
Anti-dilutive effect on calculation of diluted loss per common share attributable to outstanding stock-based awards	1.0	3.9

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Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2014

Accounting Policies [Abstract]

Summary of Capitalized Dry Docking Costs

The continuity of capitalized dry docking costs for the three years ended December 31, 2014, 2013, and 2012, is summarized as follows:

	Year Ended December 31,
	2014			2013			2012
	$			$			$
Balance at the beginning of the year		118,194			100,928			128,987
Costs incurred for dry dockings		74,018			72,545			35,336
Dry dock amortization		(50,926	)		(50,325	)		(57,082	)
Write down / sales of vessels		(5,955	)		(4,954	)		(6,313	)
Balance at the end of the year		135,331			118,194			100,928

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, 2014.

			December 31,
			2014		2013
Class of Financing Receivable	Credit Quality Indicator	Grade	$		$
Direct financing leases	Payment activity	Performing		704,953		727,262
Other loan receivables
Investment in term loans and interest receivable	Collateral	Non-Performing(1)		—		211,579
Loans to equity-accounted investees and joint venture partners (2)	Other internal metrics Performing			253,426		169,248
Long-term receivable included in other assets	Payment activity	Performing		43,843		31,634
				1,002,222		1,139,723

(1) In March 2014, Teekay and Teekay Tankers took ownership of the vessels held as collateral in satisfaction of the loans and accrued interest. (See Note 4).

(2) The Company’s subsidiary Teekay LNG owns a 99% interest in Teekay Tangguh Borrower LLC (or Teekay Tangguh), which owns a 70% interest in the Teekay BLT Corporation (or the Teekay Tangguh Joint Venture), essentially giving Teekay LNG a 69% interest in the Teekay Tangguh Joint Venture. During the year ended December 31, 2012, the parent company of Teekay LNG‘s joint venture partner, BLT LNG Tangguh Corporation (or BLT), suspended trading on the Jakarta Stock Exchange and entered into a court-supervised debt restructuring in Indonesia. The remaining loans to BLT, totaling $1.8 million as at December 31, 2014 (December 31, 2013—$28.5 million), are considered to be collectible given a signed settlement agreement between the Company and BLT regarding repayment terms. In 2014, the Teekay Tangguh Joint Venture declared dividends of $87.1 million, of which $14.4 million was used to offset the advances made to BLT and P.T. Berlian Laju Tanker and $11.7 million was repaid to Teekay by BLT. In addition, $1.5 million was paid to Teekay by BLT as part of the settlement agreement.

Schedule of Accumulated Other Comprehensive Income (Loss)

The following table contains the changes in the balances of each component of accumulated other comprehensive income (loss) attributable to shareholders of Teekay for the periods presented.

	Qualifying Cash Flow Hedging Instruments			Pension Adjustments			Unrealized (Loss) Gain on Available for Sale Marketable Securities			Foreign Exchange Loss on Currency Translation		Total
	$			$			$			$		$
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	)
Other comprehensive (loss) income		(324	)		(2,666	)		(171	)		740		(2,421	)
Balance as of December 31, 2013		17			(18,919	)		(171	)		1,884		(17,189	)
Other comprehensive (loss) income		(485	)		(10,969	)		171			174		(11,109	)
Balance as of December 31, 2014		(468	)		(29,888	)		—			2,058		(28,298	)

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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, 2014
Defined Benefit Plan, Expected Future Benefit Payments, Fiscal Year Maturity [Abstract]
2015	$ 6,744
2016	5,373
2017	6,654
2018	4,707
2019	5,409
2020 - 2024	28,664
Total	$ 57,551

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Pension Benefits (Tables)

12 Months Ended

Dec. 31, 2014

Compensation and Retirement Disclosure [Abstract]

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			Year Ended
	December 31, 2014			December 31, 2013
	$			$
Change in benefit obligation:
Beginning balance		150,996			148,490
Service cost		8,800			9,768
Interest cost		4,975			4,974
Contributions by plan participants		292			481
Actuarial (gain) loss		15,982			3,396
Benefits paid		(5,476	)		(9,501	)
Plan settlements and amendments		(21,235	)		(3,126	)
Benefit obligations assumed on acquisition		1,083			3,125
Foreign currency exchange rate changes		(33,680	)		(6,515	)
Other		(133	)		(96	)
Ending balance		121,604			150,996
Change in fair value of plan assets:
Beginning balance		138,876			134,408
Actual return on plan assets		2,849			4,453
Contributions by the employer		12,283			14,609
Contributions by plan participants		292			481
Benefits paid		(5,456	)		(9,470	)
Plan settlements and amendments		(22,405	)		(2,118	)
Plan assets assumed on acquisition		998			2,502
Foreign currency exchange rate changes		(29,721	)		(5,564	)
Other		(558	)		(425	)
Ending balance		97,158			138,876
Funded status deficiency		(24,446	)		(12,120	)
Amounts recognized in the balance sheets:
Other long-term liabilities		24,446			12,120
Accumulated other comprehensive loss:
Net actuarial losses		(32,060	)		(20,922	)

(1) As at December 31, 2014, the estimated amount that will be amortized from accumulated other comprehensive (loss) income into net periodic benefit cost in 2015 is $(1.9) 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, 2014		December 31, 2013
	$		$
Benefit obligation		90,042		88,140
Fair value of plan assets		64,631		71,955
Accumulated benefit obligation		60,828		1,319
Fair value of plan assets		55,095		689

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, 2014, 2013 and 2012 consisted of the following:

	Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,
	2014			2013			2012
	$			$			$
Net periodic pension cost:
Service cost		8,800			9,768			9,921
Interest cost		4,975			4,974			4,392
Expected return on plan assets		(5,333	)		(5,688	)		(5,270	)
Amortization of net actuarial loss		7,148			1,484			1,980
Plan settlement		(3,332	)		973			—
Other		557			425			577
Net cost		12,815			11,936			11,600

Components of Other Comprehensive Loss Relating to Plans

The components of other comprehensive loss relating to the Plans for the years ended December 31, 2014, 2013 and 2012 consisted of the following:

	Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,
	2014			2013			2012
	$			$			$
Other comprehensive income (loss):
Net (loss) gain arising during the period		(14,954	)		(3,930	)		6,143
Amortization of net actuarial loss		7,148			1,484			1,979
Plan settlement		(3,332	)		973			—
Total (loss) income		(11,138	)		(1,473	)		8,122

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 $
2015		6,744
2016		5,373
2017		6,654
2018		4,707
2019		5,409
2020 – 2024		28,664
Total		57,551

Fair Value of Plan Assets

The fair value of the plan assets, by category, as of December 31, 2014 and 2013 were as follows:

	December 31, 2014		December 31, 2013
Pooled Funds (1)		66,563		98,338
Mutual Funds (2)
Equity investments		7,343		18,080
Debt securities		6,119		3,811
Real estate		1,530		2,108
Cash and money market		12,238		8,796
Other		3,365		7,743
Total		97,158		138,876

(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, 2014 and 2013 were as follows:

	December 31, 2014			December 31, 2013
Discount rates		2.9	%		3.9	%
Rate of compensation increase		4.2	%		4.7	%

The weighted average assumptions used to determine net pension expense for the years ended December 31, 2014, 2013 and 2012 were as follows:

	Year Ended December 31, 2014 $			Year Ended December 31, 2013 $			Year Ended December 31, 2012 $
Discount rates		2.9	%		3.9	%		3.0	%
Rate of compensation increase		4.2	%		4.7	%		5.5	%
Expected long-term rates of return (1)		4.0	%		4.8	%		4.8	%

(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, 2014

Related Party Transactions [Abstract]

Related Party Transactions

13. Related Party Transactions

As at December 31, 2014, Resolute Investments, Ltd. (or Resolute) owned 34.8% (2013 – 35.7%, 2012 – 44.9%) 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. Another of the Company’s directors, Bjorn Moller, is a director of Kattegat Limited.

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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, 2014	Dec. 31, 2013	Dec. 31, 2012
Realized (losses) gains relating to:
Derivative instruments not designated as hedging instruments realized gain (loss) net	$ (131,179)	$ (160,451)	$ (110,670)
Unrealized (losses) gains relating to:
Derivative instruments not designated as hedging instruments unrealized (loss) gain net	(100,496)	178,865	30,318
Total realized and unrealized (losses) gains on derivative instruments	(231,675)	18,414	(80,352)
Interest rate swap agreements [Member]
Realized (losses) gains relating to:
Derivative instruments not designated as hedging instruments realized gain (loss) net	(125,424)	(122,439)	(123,277)
Unrealized (losses) gains relating to:
Derivative instruments not designated as hedging instruments unrealized (loss) gain net	(86,045)	182,800	26,770
Interest Rate Swaps Terminated [Member]
Realized (losses) gains relating to:
Derivative instruments not designated as hedging instruments realized gain (loss) net	(1,319)	(35,985)
Foreign currency forward contracts [Member]
Realized (losses) gains relating to:
Derivative instruments not designated as hedging instruments realized gain (loss) net	(4,436)	(2,027)	1,155
Unrealized (losses) gains relating to:
Derivative instruments not designated as hedging instruments unrealized (loss) gain net	(16,926)	(3,935)	6,933
Foinaven embedded derivative [Member]
Realized (losses) gains relating to:
Derivative instruments not designated as hedging instruments realized gain (loss) net			11,452
Unrealized (losses) gains relating to:
Derivative instruments not designated as hedging instruments unrealized (loss) gain net			(3,385)
Stock purchase warrants [Member]
Unrealized (losses) gains relating to:
Derivative instruments not designated as hedging instruments unrealized (loss) gain net	$ 2,475

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Vessel Sales, Asset Impairments and Provisions

12 Months Ended

Dec. 31, 2014

Property, Plant and Equipment [Abstract]

Vessel Sales, Asset Impairments and Provisions

18. Vessel Sales, Asset Impairments and Provisions

a) Sale of Vessels, Equipment and Other Assets

During 2014 Teekay Offshore sold a 1995-built shuttle tanker, the Navion Norvegia, to a joint venture held between Teekay Offshore and a joint venture partner. The Company’s consolidated statement of income (loss) for the year ended December 31, 2014 includes a $3.1 million gain related to the sale of this vessel. The gain on sale of vessel is included in the Company’s shuttle tanker, FSO and offshore support segment.

During 2014, the Company sold an office building. The Company’s consolidated statement of income (loss) for the year ended December 31, 2014, includes a $0.9 million gain on sale related to this office, which is included in the Company’s FPSO segment.

During 2014, Teekay Tankers sold two wholly-owned subsidiaries, each of which owned one VLCC, to TIL for aggregate proceeds of $154.0 million plus related working capital on closing of $1.7 million. The Company received the purchase price in cash. The Company used a portion of the proceeds from this transaction to prepay $152 million on one of the Company’s revolving credit facilities and the remainder of the proceeds was used for general corporate purposes. During the year ended December 31, 2014, the Company realized a net gain of $10.0 million from the sale of the two subsidiaries to TIL (See Note 18b).

During 2014, the Company sold to TIL four 2009-built Suezmax tankers that were part of the Company’s conventional tanker segment. These vessels were classified as held for sale on the consolidated balance sheet as at December 31, 2013, with their net book values written down to their estimated sale proceeds. During the year ended December 31, 2014, the Company realized a net loss of $0.5 million from the sale of these vessels.

During 2013, the Company sold a 1992-built shuttle tanker, a 1992-built conventional tanker, two 1995-built conventional tankers and a 1998-built conventional tanker that were part of the Company’s shuttle tanker, FSO and offshore support and conventional tanker segments. The Company realized a net gain of $0.7 million from the sale of these vessels. Three of these vessels were classified as held for sale on the consolidated balance sheet as at December 31, 2012, with their net book values written down to their sale proceeds net of cash outlays to complete the sales. All of the vessels were older vessels that the Company disposed of in the ordinary course of business. During 2013, the Company also sold sub-sea equipment from the Petrojarl I FPSO unit that is part of the Company’s FPSO segment. The Company realized a gain of $1.3 million from the sale of the equipment.

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 was recorded in equity income on the Company’s consolidated statements of income (loss) for the year ended December 31, 2012.

b) Asset Impairments and Provisions

During 2014, the carrying value of one of the Company’s 1990s-built shuttle tanker was written down to its estimated fair value, using an appraised value. The write-down was the result of the tanker coming off charter and the expectation that it would be re-chartered at a lower rate. The Company’s consolidated statement of income (loss) for the year ended December 31, 2014, includes a $4.8 million write-down related to this vessel, which is included in the Company’s shuttle tanker, FSO and offshore support segment.

During 2014, the Company reversed a $2.5 million loss provision for an amount receivable related to an FPSO front-end engineering and design study completed in 2013, as this receivable was recovered in 2014. During 2013, the Company recorded a $2.6 million of loss provision relating to this receivable.

During December 2013, the Company commenced a process to dispose of four vessel owning companies (or LLCs), each of which owns one 2009-built Suezmax tanker, through the sale to a new entity, TIL, which was ultimately incorporated on January 10, 2014. On January 23, 2014, TIL completed a $250 million equity private placement in which Teekay Tankers and Teekay co-invested $25 million each for a combined 20% ownership interest in the new company. Concurrently with this equity private placement, Teekay entered into an agreement to sell the four Suezmax tankers to TIL for $163.2 million plus working capital less outstanding debt of the LLCs on closing, which occurred on February 28, 2014. The Company has presented the assets and liabilities of the LLCs as assets held for sale and liabilities held for sale on the Company’s December 31, 2013 balance sheet as follows:

	$
Assets Held for Sale
Accounts receivable		11,179
Prepaid expenses		1,220
Vessels and equipment		163,200
Other long-term assets		648
Total assets		176,247
Liabilities Associated with Assets Held for Sale
Accounts payable		37
Accrued liabilities		3,362
Current portion of long-term debt(note 8)		11,698
Long-term debt(note 8)		152,910
Total liabilities		168,007

During 2013, the Company wrote down the four Suezmax tankers to their estimated fair value of $163.2 million, which consists of their sale price, resulting in the recognition of an asset impairment of $90.8 million in the Company’s consolidated statement of income (loss) for the year ended December 31, 2013. The vessels were part of the Company’s conventional tanker segment.

In 2013, the carrying value of six of the Company’s 1990s-built shuttle tankers were written down to their estimated fair values, using an appraised value. The Company’s consolidated statement of income (loss) for the year ended December 31, 2013, includes a $76.8 million write-down related to these six vessels, of which $56.5 million relates to four shuttle tankers which Teekay Offshore owns through subsidiaries with ownership interests ranging from 50% to 67%. During the third quarter of 2013, four of these six shuttle tankers were written down as the result of the re-contracting of one of the vessels at lower rates than expected during the third quarter of 2013, the cancellation of a short-term contract which occurred in September 2013 and a change in expectations for the contract renewal for two of the shuttle tankers. In the fourth quarter of 2013, the remaining two of the six shuttle tankers were written down due to a cancellation in their contract renewal. The $76.8 million write-down is included within the Company’s shuttle tanker, FSO and offshore support segment.

During 2013, the Company increased the net carrying amount of the investments in term loans, which includes accrued interest income, by $1.9 million as the estimated future cash flows, which primarily reflected the estimated value of the underlying collateral, increased during 2013. The investments in term loans are part of the Company’s conventional tanker segment. The net carrying amount of the loans consists of the present value of estimated future cash flows at December 31, 2013 (see Note 4). However, as at December 31, 2013, $11.2 million of interest receivable under the term loans, including default interest, was not recorded in respect of its investments in the three term loans based on the Company’s estimates of amounts receivable from its collateral. During March 2014, the Company assumed ownership of the three VLCCs that collateralized the investment in term loans (see Note 18a). At the time of assumption of ownership, these vessels had an aggregate fair value of approximately $222 million, which exceeded the carrying value of the loans. As a result, in the first quarter of 2014, the Company recognized $15.2 million of interest income, of which $11.2 million related to prior periods and was previously unrecognized owing under the loans.

In 2012, a total of 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 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 had a similar age, had a similar carrying value before the impairment and a similar estimated fair value, and were 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 occurred during the fourth quarter of 2012 that caused the write downs were the effects on our estimated future cash flows from negative changes in the outlook for the crude tanker market, delays in the 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, FSO and offshore support 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.

See Note 2 – Segment Reporting for the total write down of vessels by segment for 2014, 2013 and 2012.

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Capital Lease Obligations and Restricted Cash - Capital Lease Obligations (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Capital Leased Assets [Line Items]
Capital Lease Obligations	$ 63,550	$ 598,329
Less current portion	4,422	31,668
Long-term portion	59,128	566,661
RasGas II LNG Carriers [Member]
Capital Leased Assets [Line Items]
Capital Lease Obligations		472,806
Suezmax Tankers [Member]
Capital Leased Assets [Line Items]
Capital Lease Obligations	$ 63,550	$ 125,523

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Loss Per Share (Tables)

12 Months Ended

Dec. 31, 2014

Earnings Per Share [Abstract]

Schedule of Loss Per Share

	Year Ended December 31,
	2014			2013			2012
	$			$			$
Net loss attributable to shareholders of Teekay Corporation		(54,757	)		(114,738	)		(160,180	)
Weighted average number of common shares		72,066,008			70,457,968			69,263,369
Dilutive effect of stock-based compensation		—			—			—
Common stock and common stock equivalents		72,066,008			70,457,968			69,263,369
Loss per common share:
- Basic		(0.76	)		(1.63	)		(2.31	)
- Diluted		(0.76	)		(1.63	)		(2.31	)

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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, 2014	Dec. 31, 2013	Dec. 31, 2012
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Options Outstanding Non-Vested Stock Options-beginning of year	389	723	1,057
Options, Granted	15	73	433
Options, Vested	(188)	(401)	(747)
Options, Forfeited	(14)	(6)	(20)
Options Outstanding Non-Vested Stock Options-end of year	202	389	723
Weighted-Average Grant Date Fair Value, Outstanding non-vested stock options-beginning of Year	$ 9.24	$ 8.74	$ 6.40
Weighted-Average Grant Date Fair Value, Granted	$ 11.50	$ 10.54	$ 8.72
Weighted-Average Grant Date Fair Value, Vested	$ 9.30	$ 8.57	$ 5.44
Weighted-Average Grant Date Fair Value, Forfeited	$ 9.01	$ 9.46	$ 8.24
Weighted-Average Grant Date Fair Value, outstanding non-vested stock options-end of year	$ 9.37	$ 9.24	$ 8.74

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Operating and Direct Financing Leases (Tables)

12 Months Ended

Dec. 31, 2014

Text Block [Abstract]

Estimated Future Minimum Rental Payments to be Received and Paid Under Lease Contracts

As at December 31, 2014, 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)
2015		22,188		24,113
2016		21,242		24,113
2017		21,242		24,113
2018		21,242		24,113
2019		21,242		24,113
Thereafter		196,579		223,185
Total	$	303,735	$	343,750

(1) The Head Leases are fixed-rate operating leases while the Subleases have a small variable-rate component. As at December 31, 2014, the Teekay Tangguh Subsidiary had received $206.6 million of aggregate Head Lease receipts and had paid $139.6 million of aggregate Sublease payments. The portion of the Head Lease receipts that have not been recognized into earnings, is deferred and amortized on a straight line basis over the lease terms. As at December 31, 2014, $2.8 million and $44.1 million of Head Lease receipts had been deferred and included in accrued liabilities and other long-term liabilities, respectively, 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 Investments in Direct Financing Leases

The following table lists the components of the net investments in direct financing leases:

	December 31,			December 31,
	2014			2013
	$			$
Total minimum lease payments to be received		936,164			1,024,187
Estimated unguaranteed residual value of leased properties		203,465			203,465
Initial direct costs and other		461			1,379
Less unearned revenue		(435,137	)		(501,769	)
Total		704,953			727,262
Less current portion		20,823			21,545
Long-term portion		684,130			705,717

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Related Party Transactions - Additional Information (Detail) (Resolute Investments, Ltd. [Member])	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Resolute Investments, Ltd. [Member]
Related Party Transaction [Line Items]
Share of Resolute in outstanding common stock	34.80%	35.70%	44.90%

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Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Accounts receivable, non-trade	$ 49,707	$ 109,114
Accounts receivable, related party balance	38,616	16,371
Accumulated depreciation on vessels and equipment	2,627,499	2,135,780
Accumulated amortization on vessels under capital lease	50,898	152,020
Amounts due to joint venture partners	$ 0	$ 13,282
Common stock, par value	$ 0.001	$ 0.001
Common stock, share authorized	725,000,000	725,000,000
Common stock, share issued	73,299,702	71,528,599
Common stock, share outstanding	72,500,502	70,729,399
Minimum [Member]
Range of interest	0.00%	0.00%
Maximum [Member]
Range of interest	8.00%	8.00%

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Operating and Direct Financing Leases - Charters-in - Additional Information (Detail) (Charters-in [Member], USD $) In Thousands, unless otherwise specified	Dec. 31, 2014
Charters-in [Member]
Property Subject to or Available for Operating Lease [Line Items]
Minimum commitments to be incurred by the company	$ 119,900
Minimum commitments to be incurred by the company in current year	76,500
Minimum commitments to be incurred by the company in second year	29,100
Minimum commitments to be incurred by the company in third year	13,900
Minimum commitments to be incurred by the company in fourth year	$ 400

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Segment Reporting

12 Months Ended

Dec. 31, 2014

Segment Reporting [Abstract]

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, FSO and offshore support 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, FSO and offshore support segment consists of shuttle tankers, FSO units, floating accommodation units (or FAUs) and long-distance towing and offshore installation vessels. 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, 2014, 2013, and 2012.

Year ended December 31, 2014	Shuttle Tanker, FSO and Offshore Support Segment			FPSO Segment			Liquefied Gas Segment			Conventional Tanker Segment			Total
	$			$			$			$			$
Revenues		608,068			614,463			325,707			445,682			1,993,920
Voyage expenses		(106,291	)		(756	)		(1,913	)		(18,887	)		(127,847	)
Vessel operating expenses		(191,173	)		(370,397	)		(68,839	)		(178,910	)		(809,319	)
Time-charter hire expense		(31,090	)		—			—			(36,129	)		(67,219	)
Depreciation and amortization		(111,891	)		(157,829	)		(71,712	)		(81,472	)		(422,904	)
General and administrative (1)		(35,665	)		(57,915	)		(27,434	)		(19,903	)		(140,917	)
Asset impairments		(4,759	)		—			—			—			(4,759	)
Loan loss recoveries		—			2,521			—			—			2,521
Net gain on sale of vessels and equipment		3,121			935			—			9,453			13,509
Restructuring recoveries (charges)		812			—			—			(10,638	)		(9,826	)
Income from vessel operations		131,132			31,022			155,809			109,196			427,159
Year ended December 31, 2013	Shuttle Tanker, FSO and Offshore Support Segment			FPSO Segment			Liquefied Gas Segment			Conventional Tanker Segment			Total
	$			$			$			$			$
Revenues		583,201			567,620			298,228			381,036			1,830,085
Voyage expenses		(99,111	)		—			(602	)		(12,505	)		(112,218	)
Vessel operating expenses		(182,973	)		(364,986	)		(61,471	)		(196,722	)		(806,152	)

Time-charter hire expense		(56,682	)		—			—			(46,964	)		(103,646	)
Depreciation and amortization		(116,376	)		(151,365	)		(71,485	)		(91,860	)		(431,086	)
General and administrative (1)		(37,529	)		(51,891	)		(19,597	)		(31,941	)		(140,958	)
Asset impairments		(76,782	)		—			—			(90,823	)		(167,605	)
Loan loss (provisions) recoveries		—			(2,634	)		—			1,886			(748	)
Net gain on sale of vessels and equipment		—			1,338			—			657			1,995
Restructuring charges		(2,123	)		—			—			(4,798	)		(6,921	)
Income (loss) from vessel operations		11,625			(1,918	)		145,073			(92,034	)		62,746
Year ended December 31, 2012	Shuttle Tanker, FSO and Offshore Support Segment			FPSO Segment			Liquefied Gas Segment			Conventional Tanker Segment			Total
	$			$			$			$			$
Revenues		616,295			581,215			291,712			491,549			1,980,771
Voyage expenses		(104,382	)		(232	)		(283	)		(33,386	)		(138,283	)
Vessel operating expenses		(196,021	)		(354,020	)		(54,773	)		(208,512	)		(813,326	)
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 (1)		(36,484	)		(45,139	)		(18,643	)		(44,030	)		(144,296	)
Asset impairments		(28,830	)		—			—			(403,366	)		(432,196	)
Loan loss provisions		—			—			—			(1,886	)		(1,886	)
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	)

(1) 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, 2014		December 31, 2013
	$		$
Shuttle tanker, FSO and offshore support segment		2,055,348		1,947,905
FPSO segment		3,442,109		2,836,998
Liquefied gas segment		3,401,167		3,616,044
Conventional tanker segment		1,538,074		1,874,101
Cash		806,904		614,660
Accounts receivable and other assets		620,610		665,993
Consolidated total assets		11,864,212		11,555,701

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, 2014			Year Ended December 31, 2013			Year Ended December 31, 2012
Petroleo Brasileiro SA (1)	$	248.2 or 12	%	$	244.3 or 13	%	$	289.3 or 15	%
Statoil ASA (1)	$	239.8 or 12	%	$	250.5 or 14	%	$	299.1 or 15	%
BP PLC (2)		(3	)	$	182.5 or 10	%		(3	)

(1) Shuttle tanker, FSO and offshore support and conventional tanker segments

(2) Shuttle tanker, FSO and offshore support, liquefied gas and conventional tanker segments

(3) Less than 10%

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Segment Reporting - Additional Information (Detail)	12 Months Ended
	Dec. 31, 2014 Segment
Segment Reporting Information [Line Items]
Number of reportable segments	4
Conventional Tanker [Member] | Maximum [Member]
Segment Reporting Information [Line Items]
Operating lease arrangement period, lessee	1 year
Conventional Tanker [Member] | Minimum [Member]
Segment Reporting Information [Line Items]
Operating lease arrangement period, lessee	1 year

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Long-Term Debt - Additional Information - Senior unsecured notes (Detail) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Debt Instrument [Line Items]
Loss on bond repurchases	$ (7,699,000)	$ (1,759,000)
Senior Notes (8.5%) due January 15, 2020 [Member]
Debt Instrument [Line Items]
Fixed interest rate on the portion of U. S. Dollar-denominated term loans outstanding	8.50%
Debt instrument, principal amount	450,000,000
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 principal amount	100.00%
Discount rate for redemption feature	0.50%
Repurchased principal amount	57,300,000
Loss on bond repurchases	$ 7,699,000

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Capital Stock - Details Regarding Outstanding and Exercisable Stock Options (Detail) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Number of Outstanding Options	2,710
Outstanding Options, Weighted-Average Remaining Life (Years)	3 years 8 months 12 days
Outstanding Options, Weighted-Average Exercise Price	$ 36.61	$ 36.33	$ 34.40	$ 32.47
Number of Exercisable Options	2,508
Exercisable Options, Weighted-Average Remaining Life (Years)	3 years 3 months 18 days
Exercisable Options, Weighted-Average Exercise Price	$ 37.03	$ 37.03	$ 35.54
$10.00 - $19.99 [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	$ 19.99
Number of Outstanding Options	193
Outstanding Options, Weighted-Average Remaining Life (Years)	4 years 2 months 12 days
Outstanding Options, Weighted-Average Exercise Price	$ 11.84
Number of Exercisable Options	193
Exercisable Options, Weighted-Average Remaining Life (Years)	4 years 2 months 12 days
Exercisable Options, Weighted-Average Exercise Price	$ 11.84
$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	295
Outstanding Options, Weighted-Average Remaining Life (Years)	5 years 2 months 12 days
Outstanding Options, Weighted-Average Exercise Price	$ 24.42
Number of Exercisable Options	295
Exercisable Options, Weighted-Average Remaining Life (Years)	5 years 2 months 12 days
Exercisable Options, Weighted-Average Exercise Price	$ 24.42
$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	367
Outstanding Options, Weighted-Average Remaining Life (Years)	7 years 2 months 12 days
Outstanding Options, Weighted-Average Exercise Price	$ 27.69
Number of Exercisable Options	228
Exercisable Options, Weighted-Average Remaining Life (Years)	7 years 2 months 12 days
Exercisable 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	117
Outstanding Options, Weighted-Average Remaining Life (Years)	7 years 3 months 18 days
Outstanding Options, Weighted-Average Exercise Price	$ 34.44
Number of Exercisable Options	69
Exercisable Options, Weighted-Average Remaining Life (Years)	6 years 8 months 12 days
Exercisable Options, Weighted-Average Exercise Price	$ 34.70
$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	391
Outstanding Options, Weighted-Average Remaining Life (Years)	1 year 3 months 18 days
Outstanding Options, Weighted-Average Exercise Price	$ 39.01
Number of Exercisable Options	391
Exercisable Options, Weighted-Average Remaining Life (Years)	1 year 3 months 18 days
Exercisable Options, Weighted-Average Exercise Price	$ 39.01
$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	764
Outstanding Options, Weighted-Average Remaining Life (Years)	3 years 2 months 12 days
Outstanding Options, Weighted-Average Exercise Price	$ 40.41
Number of Exercisable Options	764
Exercisable Options, Weighted-Average Remaining Life (Years)	3 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	139
Outstanding Options, Weighted-Average Remaining Life (Years)	2 months 12 days
Outstanding Options, Weighted-Average Exercise Price	$ 46.80
Number of Exercisable Options	139
Exercisable Options, Weighted-Average Remaining Life (Years)	2 months 12 days
Exercisable Options, Weighted-Average Exercise Price	$ 46.80
$50.00 - $54.99 [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	$ 54.99
Number of Outstanding Options	429
Outstanding Options, Weighted-Average Remaining Life (Years)	2 years 2 months 12 days
Outstanding Options, Weighted-Average Exercise Price	$ 51.40
Number of Exercisable Options	429
Exercisable Options, Weighted-Average Remaining Life (Years)	2 years 2 months 12 days
Exercisable Options, Weighted-Average Exercise Price	$ 51.40
$55.00 - $59.99 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Range of Exercise Prices, lower limit	$ 55.00
Range of Exercise Prices, upper limit	$ 59.99
Number of Outstanding Options	15
Outstanding Options, Weighted-Average Remaining Life (Years)	9 years 2 months 12 days
Outstanding Options, Weighted-Average Exercise Price	$ 56.76
Exercisable Options, Weighted-Average Remaining Life (Years)	0 years

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Investments - Tanker Investments Ltd - Additional Information (Detail)	12 Months Ended								0 Months Ended	1 Months Ended		12 Months Ended		1 Months Ended					1 Months Ended
	Dec. 31, 2014 USD ($)	Dec. 31, 2013 USD ($)	Dec. 31, 2014 Tanker Investments Limited [Member] Vessel	Oct. 31, 2014 Tanker Investments Limited [Member]	Jan. 31, 2014 Tanker Investments Limited [Member] Series A- One Preferred Stock [Member]	Jan. 31, 2014 Tanker Investments Limited [Member] Series A- Two Preferred Stock [Member]	Dec. 31, 2014 Tanker Investments Limited [Member] 2009 - built Suezmax tankers [Member] Vessel	Dec. 31, 2014 Tanker Investments Limited [Member] 2010 - built Suezmax tankers [Member] Vessel	Jan. 23, 2014 Teekay Tankers [Member] Tanker Investments Limited [Member] USD ($)	Oct. 31, 2014 Teekay Tankers [Member] Tanker Investments Limited [Member]	Jan. 31, 2014 Teekay Tankers [Member] Tanker Investments Limited [Member] USD ($)	Dec. 31, 2014 Teekay Tankers [Member] Tanker Investments Limited [Member] USD ($)	Mar. 31, 2014 Teekay Tankers [Member] Tanker Investments Limited [Member]	Oct. 31, 2014 Teekay Tankers [Member] Tanker Investments Limited [Member] Common Stock [Member] USD ($)	Jan. 31, 2014 Teekay Tankers [Member] Tanker Investments Limited [Member] Common Stock [Member]	Oct. 31, 2014 Teekay Tankers [Member] Tanker Investments Limited [Member] Common Stock [Member] NOK	Oct. 31, 2014 Teekay Tankers [Member] Tanker Investments Limited [Member] Common Stock [Member] Maximum [Member] USD ($)	Oct. 31, 2014 Teekay Tankers [Member] Tanker Investments Limited [Member] Common Stock [Member] Share Repurchase Program October Two Thousand And Fourteen [Member] NOK	Jan. 31, 2014 Teekay Tankers [Member] Tanker Investments Limited [Member] Warrant [Member] Maximum [Member]	Jan. 31, 2014 Teekay Tankers [Member] Tanker Investments Limited [Member] Warrant [Member] Derivatives not designated as a cash flow hedge [Member] USD ($)	Dec. 31, 2014 Teekay Tankers [Member] Tanker Investments Limited [Member] 2010 - built VLCC [Member] Vessel	Dec. 31, 2014 Teekay Tankers [Member] Tanker Investments Limited [Member] 2009 - built Suezmax tankers [Member] Vessel	Dec. 31, 2014 Teekay Tankers [Member] Tanker Investments Limited [Member] 2009, 2010 and 2011-built Aframax tankers [Member] Vessel	Dec. 31, 2014 Teekay Tankers [Member] Tanker Investments Limited [Member] 2012-built coated Aframax [Member] Vessel	Dec. 31, 2014 Teekay Tankers [Member] Tanker Investments Limited [Member] VLCC [Member] Other Vessels [Member] USD ($)
Net Investment Income [Line Items]
Purchase of common stock											5,000,000			900,000	5,000,000
Percentage of combined ownership interest	16.05%		16.00%	8.94%							20.00%		13.00%
Issuance of equity private placement									$ 250,000,000
Equity method investment											50,000,000
Number of shares available through exercise of stock purchase warrant																			1,500,000
Derivatives not designated as a cash flow hedge	14,415,000	69,797,000																		6,800,000
Preferred Stock, Share	0	0			1	1
Preferred stock, voting rights			elect one board member
Gain from sale of investment												4,100,000
Ownership interest										2.43%
Shares acquired, price per share																69
Aggregate price of common stock														10,100,000
Shares held in investment owned																3,400,000
Combined interest of shares held in investment owned	16.05%									15.43%
Common stock repurchase, amount authorized																	30,000,000
Common stock repurchase, amount authorized		12,000,000												15,100,000
Average price per share																		68.49
Number of vessels			20				4	2													2	4	6	2
Aggregate purchase price																									$ 317,200,000
Annual guarantee fee			0.25%

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Loss Per Share

12 Months Ended

Dec. 31, 2014

Earnings Per Share [Abstract]

Loss Per Share

19. Loss Per Share

	Year Ended December 31,
	2014			2013			2012
	$			$			$
Net loss attributable to shareholders of Teekay Corporation		(54,757	)		(114,738	)		(160,180	)
Weighted average number of common shares		72,066,008			70,457,968			69,263,369
Dilutive effect of stock-based compensation		—			—			—
Common stock and common stock equivalents		72,066,008			70,457,968			69,263,369
Loss per common share:
- Basic		(0.76	)		(1.63	)		(2.31	)
- Diluted		(0.76	)		(1.63	)		(2.31	)

Stock-based awards, which have an anti-dilutive effect on the calculation of diluted loss per common share, are excluded from this calculation. For the years ended December 31, 2013 and 2012, options to acquire 1.0 million and 3.9 million shares of Common Stock, respectively, had an anti-dilutive effect on the calculation of diluted income per common share.

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Commitments and Contingencies - Additional Information - Vessels Under Construction (Detail) (USD $)	12 Months Ended
	Dec. 31, 2014 FloatingAccommodationUnits	Dec. 31, 2013
Long-term Purchase Commitment [Line Items]
Payments made towards commitments for construction of certain carriers and tankers	$ 1,706,500,000	$ 796,324,000
Newbuildings [Member]
Long-term Purchase Commitment [Line Items]
Number of floating accommodation units	3
Estimated purchase price	2,800,000,000
Payments made towards commitments for construction of certain carriers and tankers	421,900,000
Carrying value of completed units not yet in service	1,300,000,000
Capitalized interest and other miscellaneous construction costs	9,600,000
Estimated remaining payments required to be made under newbuilding contract in 2015	616,800,000
Estimated remaining payments required to be made under newbuilding contract in 2016	890,000,000
Estimated remaining payments required to be made under newbuilding contract in 2017	517,500,000
Estimated remaining payments required to be made under newbuilding contract in 2018	$ 350,900,000
Newbuildings [Member] | Delivery in 2016 [Member]
Long-term Purchase Commitment [Line Items]
Number of floating accommodation units	2
Newbuildings [Member] | Delivery in February 2015 [Member]
Long-term Purchase Commitment [Line Items]
Number of floating accommodation units	1
Newbuildings [Member] | Liquefied Natural Gas [Member]
Long-term Purchase Commitment [Line Items]
Number of vessels	8
Newbuildings [Member] | Liquefied Natural Gas [Member] | Delivery in 2016 [Member]
Long-term Purchase Commitment [Line Items]
Number of vessels	2
Newbuildings [Member] | Liquefied Natural Gas [Member] | Delivery In Two Thousand Seventeen [Member]
Long-term Purchase Commitment [Line Items]
Number of vessels	3
Newbuildings [Member] | Liquefied Natural Gas [Member] | Delivery In Two Thousand Eighteen [Member]
Long-term Purchase Commitment [Line Items]
Number of vessels	3
Newbuildings [Member] | Long Distance Towing And Offshore Installation [Member]
Long-term Purchase Commitment [Line Items]
Number of vessels	4
Newbuildings [Member] | Long Distance Towing And Offshore Installation [Member] | Delivery in 2016 [Member]
Long-term Purchase Commitment [Line Items]
Number of vessels	4
Newbuildings [Member] | Fso Segment [Member] | Delivery In Two Thousand Seventeen [Member]
Long-term Purchase Commitment [Line Items]
Number of vessels	1
Newbuildings [Member] | FPSO Segment [Member] | First Quarter Two Thousand and Sixteen [Member]
Long-term Purchase Commitment [Line Items]
Number of vessels	1

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Restructuring Charges - Additional Information (Detail) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Restructuring Cost and Reserve [Line Items]
Restructuring charges	$ 9,826,000	$ 6,921,000	$ 7,565,000
Restructuring liability	$ 9,000,000	$ 4,900,000
Assets Held for Sale [Member]
Restructuring Cost and Reserve [Line Items]
Number of vessels	2
Shuttle tankers reflagged [Member]
Restructuring Cost and Reserve [Line Items]
Number of vessels	1

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Vessel Sales, Asset Impairments and Provisions - Additional Information (Detail) (USD $)	12 Months Ended			1 Months Ended	3 Months Ended		0 Months Ended	1 Months Ended	3 Months Ended	1 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Mar. 31, 2014 Vessel	Mar. 31, 2014	Sep. 30, 2013 Vessel	Jan. 23, 2014	May 31, 2014	Dec. 31, 2013 Vessel	Jan. 13, 2013 Vessel	Feb. 28, 2014	Jan. 31, 2014
Long Lived Assets Held-for-sale [Line Items]
Gain (loss) on sale of assets	$ 13,509,000	$ 1,995,000	$ (6,975,000)
Realized gain (loss) on sale of joint venture interest	128,114,000	136,538,000	79,211,000
Write-down charges related to vessel	4,759,000	167,605,000	432,196,000
Percentage of ownership in joint venture arrangement	16.05%
Loan loss provisions	(2,521,000)	748,000	1,886,000
Interest income from loans		11,200,000							11,200,000
Shuttle tankers [Member]
Long Lived Assets Held-for-sale [Line Items]
Gain (loss) on sale of assets			1,100,000
Number of vessels		6
Suezmax Tankers [Member]
Long Lived Assets Held-for-sale [Line Items]
Write-down charges related to vessel		90,800,000
Shuttle Tanker, FSO and Offshore Support Segment [Member]
Long Lived Assets Held-for-sale [Line Items]
Write-down charges related to vessel		76,800,000
Tanker Investments Limited [Member]
Long Lived Assets Held-for-sale [Line Items]
Investment in equity private placement							25,000,000
Vessels and equipment											163,200,000
VLCC [Member]
Long Lived Assets Held-for-sale [Line Items]
Number of vessels	3			3
Interest income from loans				11,200,000	11,200,000
Estimated aggregate fair value of vessels				222,000,000	222,000,000
Interest income recognized					15,200,000
Sold Asset [Member]
Long Lived Assets Held-for-sale [Line Items]
Number of vessels			3
Sold Asset [Member] | Shuttle tankers [Member]
Long Lived Assets Held-for-sale [Line Items]
Number of vessels			2
Impaired Asset [Member] | Shuttle tankers [Member]
Long Lived Assets Held-for-sale [Line Items]
Number of vessels			4
Impaired Asset [Member] | Shuttle tankers [Member] | Contract Termination [Member]
Long Lived Assets Held-for-sale [Line Items]
Number of vessels						4
Impaired Asset [Member] | Shuttle tankers [Member] | Recontracting [Member]
Long Lived Assets Held-for-sale [Line Items]
Number of vessels						1
Impaired Asset [Member] | Shuttle tankers [Member] | Contract Renewal [Member]
Long Lived Assets Held-for-sale [Line Items]
Number of vessels						2
Impaired Asset [Member] | Suezmax Tankers [Member]
Long Lived Assets Held-for-sale [Line Items]
Number of vessels		4
Teekay Tankers [Member]
Long Lived Assets Held-for-sale [Line Items]
Number of subsidiaries sold	2
Related working capital receivable	1,700,000
Revolving credit facilities repaid	152,000,000
Ownership percentage	26.20%	25.10%							25.10%
Teekay Tankers [Member] | Tanker Investments Limited [Member]
Long Lived Assets Held-for-sale [Line Items]
Issuance of equity private placement							250,000,000
Investment in equity private placement							25,000,000
Percentage of ownership in joint venture arrangement							20.00%					20.00%
Teekay Tankers [Member] | Tanker Investments Limited [Member] | Suezmax Tankers [Member]
Long Lived Assets Held-for-sale [Line Items]
Number of vessels							4
Teekay Tankers [Member] | VLCC [Member]
Long Lived Assets Held-for-sale [Line Items]
Gain (loss) on sale of assets	10,000,000
Aggregate proceeds received								154,000,000
Teekay Tankers [Member] | Sold Asset [Member]
Long Lived Assets Held-for-sale [Line Items]
Number of vessels								2
Teekay Offshore [Member]
Long Lived Assets Held-for-sale [Line Items]
Ownership percentage	27.30%	29.30%							29.30%
Teekay Offshore [Member] | Minimum [Member]
Long Lived Assets Held-for-sale [Line Items]
Ownership percentage		50.00%							50.00%
Teekay Offshore [Member] | Maximum [Member]
Long Lived Assets Held-for-sale [Line Items]
Ownership percentage		67.00%							67.00%
Teekay Offshore [Member] | Shuttle tankers [Member]
Long Lived Assets Held-for-sale [Line Items]
Number of vessels		4
Write-down charges related to vessel		56,500,000
Teekay Offshore [Member] | Impaired Asset [Member] | Minimum [Member]
Long Lived Assets Held-for-sale [Line Items]
Number of vessels									2
Nineteen Conventional Tankers [Member]
Long Lived Assets Held-for-sale [Line Items]
Number of vessels			19
Write-down charges related to vessel			405,300,000
Nineteen Conventional Tankers [Member] | Suezmax Tankers [Member]
Long Lived Assets Held-for-sale [Line Items]
Number of vessels			10
Write-down charges related to vessel			335,000,000
Nineteen Conventional Tankers [Member] | Aframax tankers [Member]
Long Lived Assets Held-for-sale [Line Items]
Number of vessels			7
Write-down charges related to vessel			66,000,000
Nineteen Conventional Tankers [Member] | Other conventional tankers [Member]
Long Lived Assets Held-for-sale [Line Items]
Number of vessels			2
Write-down charges related to vessel			4,300,000
Nineteen Conventional Tankers [Member] | Seven Suezmax tankers and four Aframax tankers [Member]
Long Lived Assets Held-for-sale [Line Items]
Write-down charges related to vessel			350,200,000
Nineteen Conventional Tankers [Member] | Sold Asset [Member] | Aframax tankers [Member]
Long Lived Assets Held-for-sale [Line Items]
Number of vessels										1
Nineteen Conventional Tankers [Member] | Asset Held For Sale [Member] | Aframax tankers [Member]
Long Lived Assets Held-for-sale [Line Items]
Number of vessels			1
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 [Member] | Impaired Asset [Member]
Long Lived Assets Held-for-sale [Line Items]
Number of vessels			1
FSO and Offshore Support Segment [Member] | 1995-build shuttle tanker [Member]
Long Lived Assets Held-for-sale [Line Items]
Gain (loss) on sale of assets	3,100,000
FPSO Segment [Member]
Long Lived Assets Held-for-sale [Line Items]
Gain (loss) on sale of assets	935,000	1,338,000
Reversal and recorded of loss provision related to receivable	2,500,000	2,600,000
Loan loss provisions	(2,521,000)	2,634,000
FPSO Segment [Member] | Office building [Member]
Long Lived Assets Held-for-sale [Line Items]
Gain (loss) on sale of assets	900,000
Conventional Tanker [Member]
Long Lived Assets Held-for-sale [Line Items]
Gain (loss) on sale of assets	9,453,000	657,000	(5,863,000)
Realized gain (loss) on sale of tankers			5,900,000
Write-down charges related to vessel		90,823,000	403,366,000
Loan loss provisions		(1,886,000)	1,886,000
Conventional Tanker [Member] | Sold Asset [Member]
Long Lived Assets Held-for-sale [Line Items]
Number of vessels			3
Conventional Tanker [Member] | Shuttle Tanker and FSO Segment [Member] | Suezmax Tankers [Member]
Long Lived Assets Held-for-sale [Line Items]
Number of vessels	4
Conventional Tanker [Member] | Shuttle Tanker and FSO Segment [Member] | Sold Asset [Member] | Suezmax Tankers [Member]
Long Lived Assets Held-for-sale [Line Items]
Gain (loss) on sale of assets	(500,000)
Conventional Tanker [Member] | 1992-built shuttle tanker [Member] | Sold Asset [Member]
Long Lived Assets Held-for-sale [Line Items]
Number of vessels		1
Conventional Tanker [Member] | 1995-built conventional tankers [Member] | Sold Asset [Member]
Long Lived Assets Held-for-sale [Line Items]
Number of vessels		2
Conventional Tanker [Member] | Nineteen Ninety Eight Built Conventional Tanker [Member] | Sold Asset [Member]
Long Lived Assets Held-for-sale [Line Items]
Number of vessels		1
Shuttle tankers [Member] | 1992-built shuttle tanker [Member] | Sold Asset [Member]
Long Lived Assets Held-for-sale [Line Items]
Number of vessels		1
Shuttle Tanker, FSO and Offshore Support Segment [Member]
Long Lived Assets Held-for-sale [Line Items]
Gain (loss) on sale of assets	3,121,000		(1,112,000)
Write-down charges related to vessel	4,759,000	76,782,000	28,830,000
Future operating life (based on the estimated remaining trading life of vessel)			2 years 2 months 12 days
Future revenues (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%
Shuttle Tanker, FSO and Offshore Support Segment [Member] | Appraised Value [Member]
Long Lived Assets Held-for-sale [Line Items]
Number of vessels			5
Shuttle Tanker, FSO and Offshore Support Segment [Member] | Discounted Cash Flows Value [Member] | Impaired Asset [Member]
Long Lived Assets Held-for-sale [Line Items]
Number of vessels			1

XML

Financing Transactions - Summary of Proceeds Received from Financial Transactions (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Subsidiary, Sale of Stock [Line Items]
Net Proceeds Received	$ 452,061	$ 446,893	$ 496,224
Teekay Offshore [Member] | Continuous Offering Program [Member]
Subsidiary, Sale of Stock [Line Items]
Total Proceeds Received	7,784	2,819
Less: Teekay Corporation Portion	(156)	(59)
Offering Expenses	(153)	(449)
Net Proceeds Received	7,475	2,311
Teekay Offshore [Member] | Direct/Private Equity Placement [Member]
Subsidiary, Sale of Stock [Line Items]
Total Proceeds Received	178,569	115,688	45,919
Less: Teekay Corporation Portion	(3,571)	(2,314)	(919)
Offering Expenses	(75)	(188)
Net Proceeds Received	174,923	113,186	45,000
Teekay Offshore [Member] | Public Offerings [Member]
Subsidiary, Sale of Stock [Line Items]
Total Proceeds Received			219,474
Less: Teekay Corporation Portion			(4,389)
Offering Expenses			(8,164)
Net Proceeds Received			206,921
Teekay Offshore [Member] | Preferred Units Offering [Member]
Subsidiary, Sale of Stock [Line Items]
Total Proceeds Received		150,000
Offering Expenses		(5,200)
Net Proceeds Received		144,800
Teekay LNG [Member] | Continuous Offering Program [Member]
Subsidiary, Sale of Stock [Line Items]
Total Proceeds Received	42,556	5,383
Less: Teekay Corporation Portion	(851)	(107)
Offering Expenses	(901)	(457)
Net Proceeds Received	40,804	4,819
Teekay LNG [Member] | Direct/Private Equity Placement [Member]
Subsidiary, Sale of Stock [Line Items]
Total Proceeds Received		40,816
Less: Teekay Corporation Portion		(816)
Offering Expenses		(40)
Net Proceeds Received		39,960
Teekay LNG [Member] | Public Offerings [Member]
Subsidiary, Sale of Stock [Line Items]
Total Proceeds Received	140,784	150,040	189,243
Less: Teekay Corporation Portion	(2,816)	(3,001)	(3,784)
Offering Expenses	(299)	(5,222)	(6,927)
Net Proceeds Received	137,669	141,817	178,532
Teekay Tankers [Member] | Public Offerings [Member]
Subsidiary, Sale of Stock [Line Items]
Total Proceeds Received	116,000		69,000
Less: Teekay Corporation Portion	(20,000)
Offering Expenses	(4,810)		(3,229)
Net Proceeds Received	$ 91,190		$ 65,771

XML

Goodwill, Intangible Assets and In-Process Revenue Contracts (Tables)

12 Months Ended

Dec. 31, 2014

Text Block [Abstract]

Carrying Amount of Goodwill for Company's Reportable Segment

The carrying amount of goodwill for the years ended December 31, 2014 and 2013, for the Company’s reportable segments are as follows:

	Shuttle Tanker, FSO and Offshore Support Segment		Liquefied Gas Segment		Total
	$		$		$
Balance as of December 31, 2012 and 2013		130,908		35,631		166,539
Goodwill acquired		2,032		—		2,032
Balance as of December 31, 2014		132,940		35,631		168,571

Summary of Intangible Assets

As at December 31, 2014, the Company’s intangible assets consisted of:

	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
	$		$			$
Customer contracts		316,684		(223,018	)		93,666
Other intangible assets		1,000		—			1,000
		317,684		(223,018	)		94,666

As at December 31, 2013 the Company’s intangible assets consisted of:

	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
	$		$			$
Customer contracts		316,684		(209,786	)		106,898
Other intangible assets		1,280		(280	)		1,000
		317,964		(210,066	)		107,898

XML

Capital Stock

12 Months Ended

Dec. 31, 2014

Equity [Abstract]

Capital Stock

12. Capital Stock

The authorized capital stock of Teekay at December 31, 2014 and 2013, 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 2014, the Company issued 1.8 million common shares upon the exercise of stock options and restricted stock units and awards, and had no share repurchases of common shares. During 2013, the Company issued 1.3 million common shares upon the exercise of stock options and restricted stock units and awards, and had share repurchases of 0.3 million common shares. As at December 31, 2014, Teekay had issued 73,299,702 shares of Common Stock (2013 – 71,528,599) and no shares of Preferred Stock issued. As at December 31, 2014, Teekay had 72,500,502 shares of Common Stock outstanding (2013 – 70,729,399).

Dividends may be declared and paid out of surplus, 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, 2014, Teekay had repurchased approximately 5.2 million shares of Common Stock for $162.3 million pursuant to such authorization. The total remaining share repurchase authorization at December 31, 2014, was $37.7 million. The shares of Common Stock repurchased during 2013 were under a separate authorization.

On July 2, 2010, the Company amended and restated its Shareholder 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 shareholders that owned in excess of 15% of the Company’s common stock when the Rights Agreement was amended. 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

In March 2013, the Company adopted the 2013 Equity Incentive Plan (or the 2013 Plan) and suspended the 1995 Stock Option Plan and the 2003 Equity Incentive Plan (collectively referred to as the Plans). As at December 31, 2014, the Company had reserved 4,009,878 (2013—4,133,987) shares of Common Stock pursuant to the 2013 Plan, for issuance upon the exercise of options or equity awards granted or to be granted.

During the years ended December 31, 2014 and 2013, the Company granted options under the 2013 Plan to acquire up to 15,243 and 72,810 shares of Common Stock, respectively, and during the year ended December 31, 2012, the Company granted options under the Plans to acquire up to 432,971 shares of Common Stock, 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, 2014, expire between March 9, 2015 and March 11, 2024, ten years after the date of each respective grant.

A summary of the Company’s stock option activity and related information for the years ended December 31, 2014, 2013, and 2012, are as follows:

	December 31, 2014					December 31, 2013					December 31, 2012
				Weighted- Average					Weighted- Average					Weighted- Average
	Options (000’s)			Exercise Price		Options (000’s)			Exercise Price		Options (000’s)			Exercise Price
	#			$		#			$		#			$
Outstanding - beginning of year		4,237			36.33		5,285			34.40		5,713			32.47
Granted		15			56.76		73			34.07		433			27.69
Exercised		(1,528	)		36.10		(1,039	)		26.21		(733	)		15.85
Forfeited / expired		(14	)		28.51		(82	)		38.46		(128	)		31.81
Outstanding - end of year		2,710			36.61		4,237			36.33		5,285			34.40
Exercisable - end of year		2,508			37.03		3,848			37.03		4,561			35.54

A summary of the Company’s non-vested stock option activity and related information for the years ended December 31, 2014, 2013 and 2012, are as follows:

	December 31, 2014					December 31, 2013					December 31, 2012
				Weighted- Average					Weighted- Average					Weighted- Average
	Options (000’s)			Grant Date Fair Value		Options (000’s)			Grant Date Fair Value		Options (000’s)			Grant Date Fair Value
	#			$		#			$		#			$
Outstanding non-vested stock options—beginning of year		389			9.24		723			8.74		1,057			6.40
Granted		15			11.50		73			10.54		433			8.72
Vested		(188	)		9.30		(401	)		8.57		(747	)		5.44
Forfeited		(14	)		9.01		(6	)		9.46		(20	)		8.24
Outstanding non-vested stock options—end of year		202			9.37		389			9.24		723			8.74

The weighted average grant date fair value for non-vested options forfeited in 2014 was $0.1 million (2013—$0.1 million).

As of December 31, 2014, there was $0.3 million of total unrecognized compensation cost related to non-vested stock options granted under the Plans. Recognition of this compensation is expected to be $0.2 million (2015), and $0.1 million (2016). During the years ended December 31, 2014, 2013, and 2012, the Company recognized $1.0 million, $1.8 million and $2.9 million, respectively, of compensation cost relating to stock options granted under the Plans. The intrinsic value of options exercised during 2014 was $22.6 million (2013—$22.6 million; 2012—$11.9 million).

As at December 31, 2014, the intrinsic value of the outstanding in–the-money stock options was $39.0 million (2013—$51.7 million) and of exercisable stock options was $35.0 million (2013—$44.5 million). As at December 31, 2014, the weighted-average remaining life of options vested and expected to vest was 3.6 years (2013 – 4.2 years).

Further details regarding the Company’s outstanding and exercisable stock options at December 31, 2014 are as follows:

	Outstanding Options						Exercisable Options
			Weighted-		Weighted-				Weighted-		Weighted-
	Options (000’s)		Average Remaining Life		Average Exercise Price		Options (000’s)		Average Remaining Life		Average Exercise Price
Range of Exercise Prices	#		(Years)		$		#		(Years)		$
$10.00 – $19.99		193		4.2		11.84		193		4.2		11.84
$20.00 – $24.99		295		5.2		24.42		295		5.2		24.42
$25.00 – $29.99		367		7.2		27.69		228		7.2		27.69
$30.00 – $34.99		117		7.3		34.44		69		6.7		34.70
$35.00 – $39.99		391		1.3		39.01		391		1.3		39.01
$40.00 – $44.99		764		3.2		40.41		764		3.2		40.41
$45.00 – $49.99		139		0.2		46.80		139		0.2		46.80
$50.00 – $54.99		429		2.2		51.40		429		2.2		51.40
$55.00 – $59.99		15		9.2		56.76		—		—		—
		2,710		3.7		36.61		2,508		3.3		37.03

The weighted-average grant-date fair value of options granted during 2014 was $11.50 per option (2013—$10.54, 2012—$8.72). 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 34.7% in 2014, 53.7% in 2013 and 54.8% in 2012; expected life of five years in 2014, four years in 2013 and 2012; dividend yield of 4.4% in 2014, 4.8% in 2013 and 4.4% in 2012; risk-free interest rate of 1.6% in 2014, 0.8% in 2013, and 2.1% in 2012; and estimated forfeiture rate of 12% in 2014, 12% in 2013 and 12% in 2012. 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 three years from the grant date and the performance share units vest two or three years from the grant date. Upon vesting, the value of the restricted stock units, restricted stock awards and performance shares are paid to each grantee in the form of shares or cash. The number of performance share units that vest will range from zero to a multiple of the original number granted, based on certain performance and market conditions.

During 2014, the Company granted 81,388 restricted stock units with a fair value of $4.6 million and 50,689 performance share units with a fair value of $3.4 million, based on the quoted market price and a Monte Carlo valuation model, to certain of the Company’s employees and directors. During 2014, a total of 261,911 restricted stock units with a market value of $8.5 million vested and that amount, net of withholding taxes, was paid to grantees by issuing 149,082 shares of common stock. During 2013, the Company granted 158,957 restricted stock units with a fair value of $5.4 million and 54,773 performance share units with a fair value of $2.3 million, based on the quoted market price and a Monte Carlo valuation model, to certain of the Company’s employees and directors. During 2013, a total of 296,798 restricted stock units with a market value of $8.8 million vested and that amount, net of withholding taxes, was paid to grantees by issuing 175,206 shares of common stock. 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, a total of 334,256 restricted stock units with a market value of $9.0 million vested and that amount, net of withholding taxes, was paid to grantees by issuing 200,024 shares of common stock. For the year ended December 31, 2014, the Company recorded an expense of $5.4 million (2013—$8.1 million, 2012—$7.7 million) related to the restricted stock units.

During 2014, the Company also granted 18,230 (2013 – 26,412 and 2012 – 23,563) shares as restricted stock awards with a fair value of $1.0 million (2013 – $0.9 million and 2012 – $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.

XML

Fair Value Measurements - Additional Information (Detail) (USD $) Share data in Millions, unless otherwise specified	0 Months Ended	12 Months Ended	1 Months Ended	0 Months Ended
	Aug. 11, 2014 FloatingAccommodationUnits	Dec. 31, 2014	Jan. 31, 2014	May 02, 2013
Logitel Offshore Holdings [Member]
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Number of floating accommodation units	3
Newbuildings [Member] | Logitel Offshore Holdings [Member]
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Number of floating accommodation units	1
Tanker Investments Limited [Member] | Warrant [Member]
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Expected volatility used in computing fair value of stock purchase warrants		61.50%
Tanker Investments Limited [Member] | Warrant [Member] | Maximum [Member]
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Number of shares available through exercise of stock purchase warrant			1.5
Teekay Offshore [Member]
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Portion of purchase price paid in cash				$ 253,000,000
Teekay Offshore [Member] | Logitel Offshore Holdings [Member]
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Percentage of noncontrolling interest acquired	100.00%
Portion of purchase price paid in cash	4,000,000
Potential additional cash amount for purchase price	27,600,000
Weighted average cost of capital, discount rate		10.00%
Teekay Offshore [Member] | Newbuildings [Member] | Logitel Offshore Holdings [Member]
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Number of floating accommodation units	2