~~marine disasters;~~

~~bad weather or natural disasters;~~

~~mechanical failures;~~

~~grounding, fire, explosions and collisions;~~

~~piracy (hijacking and kidnapping);~~

~~cyber attack;~~

~~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;~~

~~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. In addition, any damage to, or environmental contamination involving, oil production facilities serviced by our vessels could result in the suspension or curtailment of operations by our customer, which would in turn result in loss of revenues.

Our insurance may not be ~~insufficient~~sufficient to cover losses that may occur to our property or result from our operations.

The operation of LNG and LPG carriers, and ~~oil tankers~~LNG facilities, is inherently risky. Although we carry hull and machinery (marine and war risks) and protection and indemnity insurance, and other liability insurance, all risks may not be adequately insured against, and any particular claim may not be ~~paid.~~paid or paid in full. In addition, only certain of our LNG and LPG carriers carry insurance 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. In addition, the cost of this protection and indemnity coverage has significantly increased and may continue to increase. Even if our insurance coverage is adequate to cover our losses, we may not be able to obtain a timely replacement vessel in the event of a total loss of a vessel.

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 structural changes in insurance markets, economic factors, the impact of the COVID-19 pandemic, outbreaks of communicable diseases, terrorist attacks, environmental catastrophes, or political change 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.~~

~~Our and many of our customers’ substantial operations outside the United States expose us and them to political, governmental and economic instability, which could harm our operations.~~

~~Because our operations, and the operations of certain of our customers, are primarily conducted outside of the United States, they may~~coverage or be affected by economic, political and governmental conditions in the countries where we and they engage in business. Any disruption caused by these factors could harm our business or the business of these customers, including by reducing the levels of oil and gas exploration, development and production activities in these areas. We derive some of our revenues from shipping oil, LNG and LPG from politically and economically unstable regions, such as Angola and Yemen. Hostilities, strikes, or other political or economic instability in regions where we or these customers operate or where we or they 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, or on the ability of these customers to make payments or otherwise perform their obligations to us. 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 may harm our business and ability to make cash distributions and 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. Please see above relating to our two vessels chartered out to YLNG “Item 3 – Risk Factors: We derive a substantial majority of our revenues from a limited number of customers, and the loss of any customer, charter or vessel, or any adjustment to our charter contracts could result in a significant loss of revenues and cash flow.”

~~Terrorist attacks, increased hostilities, political change or war could lead to further economic instability, increased costs and disruption of our business.~~

Terrorist attacks, the current conflicts in the Middle East, South East Asia, West Africa (Nigeria), Libya and elsewhere, and political change, may adversely affect our business, operating results, financial condition, ability to raise capital and future growth. Continuing hostilities in the

Middle East, especially among Qatar, Saudi Arabia, UAE, Yemen and elsewhere 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 LNG, LPG and oil production and distribution, which could result in reduced demand for our services or impact on our operations and or our ability to conduct business.

In addition, LNG, LPG and oil facilities, shipyards, vessels, pipelines and oil and gas fields could be targets of future terrorist attacks and warlike operations and our vessels could be targets of hijackers, terrorists or warlike operations. 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 LNG, LPG and oil to or from certain locations. Terrorist attacks, war, hijacking or other events beyond our control that adversely affect the distribution, production or transportation of LNG, LPG or oil to be shipped by us could entitle our customers to terminate our charter contracts, which would harm our cash flow and our business.

Terrorist attacks, or the perception that LNG or LPG facilities and carriers are potential terrorist targets, could materially and adversely affect expansion of LNG and LPG infrastructure and the continued supply and export of LNG and LPG involving the United States and other countries. Concern that LNG or LPG facilities may be targeted for attack by terrorists, as well as environmental concerns, has contributed to significant community resistance to the construction of a number of LNG or LPG facilities, primarily in North America. If a terrorist incident involving a LNG or LPG facility or LNG or LPG carrier did occur, in addition to the possible effects identified in the previous paragraph, the incident may adversely affect construction of additional LNG or LPG facilities in the United States and other countries or lead to the temporary or permanent closing of various LNG or LPG facilities currently in operation.

~~Acts of piracy on ocean-going vessels continue to be a risk, 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, Gulf of Guinea and the Indian Ocean off the coast of Somalia. While there continues to be a significant risk of piracy 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 and a resurgent piracy risk in the Straits of Malacca, Sulu and Celebes Sea and surrounding waters. 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 may 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 armed security guards and escort vessels, 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.

~~A cyber-attack could materially disrupt our business~~

We rely on information technology systems and networks in our operations and the administration of our business. Cyber-attacks have increased in number and sophistication in recent years. Our operations could be targeted by individuals or groups seeking to sabotage or disrupt our information technology systems and networks, or to steal data. A successful cyber-attack could materially disrupt our operations, including the safety of our operations, or lead to unauthorized release of information or alteration of information on our systems. Any such attack or other breach of our information technology systems could have a material adverse effect on our business and results of operations.

~~Our failure to comply~~available with ~~data privacy laws could damage our customer relationships and expose usto litigation risks and potential fines.~~

Data privacy is subject to frequently changing rules and regulations, which sometimes conflict among the various jurisdictions and countries in which we provide services and continue to develop in ways which we cannot predict, including with respect to evolving technologies such as cloud computing. The European Union has adopted the General Data Privacy Regulation (or ~~GDPR~~), a comprehensive legal framework to govern data collection, use and sharing and related consumer privacy rights which took effect in May 2018. The GDPR includes significant penalties for non-compliance. Our failure to adhere to or successfully implement processes in response to changing regulatory requirements in this area could result in legal liability or impairment to our reputation in the marketplace, which could have a material adverse effect on our business, financial condition and results of operations.

The ARC7 LNG carrier newbuildings for the Yamal LNG Project are customized vessels and our financial condition, results of operations and ability to make distributions on our units could be substantially affected if the Yamal LNG Project is abandoned.

~~On July 9, 2014, the Yamal LNG Joint Venture ordered six internationally-flagged icebreaker LNG carriers for a project located on the Yamal Peninsula in Northern Russia (or the~~ ~~Yamal LNG Project), two of which newbuilding carriers delivered in 2018. The Yamal LNG Project is a joint venture between Russia-based Novatek OAO (or~~ ~~Novatek) (50.1%), France-based Total S.A. (20%), China-based China National Petroleum Corporation (20%) and Silk Road Fund (9.9%).~~

The four remaining ARC7 LNG carrier newbuildings ordered by the Yamal LNG Joint Venture, which are scheduled for delivery during the remainder of 2019, are being specifically built for the Arctic requirements of 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 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 for various reasons, including, among others:~~

~~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; or~~

~~environmental regulations or potential claims.~~

If the project 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 cash distributions to unitholders.restrictive terms.

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~~In 2014, the U.S. Treasury Department’s Office of Foreign Assets Control (or OFAC) placed Russia-based Novatek, a 50.1% owner of the Yamal LNG Project, on the Sectoral Sanctions Identifications List. OFAC also previously imposed sanctions on an investor in Novatek and these sanctions also remain in effect. The current restrictions on Novatek prohibit U.S. persons (and their subsidiaries) from participating in debt financing transactions of greater than 60 days maturity with Novatek and, by virtue of Novatek’s 50.1% ownership interest, the Yamal LNG Project. The ~~European Union~~EU also imposed certain sanctions on Russia. These sanctions require ~~a European Union~~an EU 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 by the EU appear to focus on oil exploration projects, not gas projects. In addition, 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~~adversely affect the Yamal LNG ~~Project to receive necessary financing.~~Project. Although we believe that we are in compliance with all applicable sanctions, laws and regulations, and intend to maintain such compliance, the scope of these sanctions laws may be subject to change. ~~Future~~

Russia's invasion of Ukraine in early 2022 may lead to further regional and international conflicts or armed action. It is possible that the ongoing conflict could result in the imposition of further economic sanctions ~~may prohibit~~by the ~~Yamal LNG Joint Venture from performing under its contracts with~~United States, the European Union (or EU) or other countries against Russia, Novatek and the Yamal LNG Project, or result in retaliatory measures by Russia in response. While much uncertainty remains regarding the global impact of the conflict in Ukraine, it is possible that such tensions could adversely affect our business, financial condition, results of operation and cash flows. Furthermore, it is possible that third parties with whom we have charter contracts may be impacted by events in Russia and Ukraine, which could adversely affect our operations.

In addition to our 50%-owned joint venture with China LNG Shipping (Holdings) Limited (or the Yamal LNG Joint Venture), participants in other projects in which we are involved (including, with respect to such other projects, our joint venture partners, customers, and their respective shareholders or management) may be subject to sanctions, which sanctions may have a material adverse effect on the success of those projects or our joint ventures and, in turn, on our business, financial condition, and results of ~~operations and ability to make cash distributions on our units.~~operations.

Failure, ofshutdown or other adverse events impacting the Yamal LNG Project may result in our inability to ~~achieve expected results could lead to a default under~~re-deploy the ~~time-charter contracts by the charter party.~~ARC7 LNG carriers.

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. Any such default could adversely affect our results of operations and ability~~were to ~~make cash distributions~~shutdown or face other adverse events, in either case on ~~our units. If the charter party defaults on the time-charter contracts,~~a permanent or even temporary basis, we may be unable to redeploy the ~~vessels~~ARC7 LNG carriers under other time-charter contracts or may be forced to scrap the vessels. Any such events could adversely affect our results of operations.

We assume credit risk by entering into agreements with unrated entities.

Some of our vessels are chartered to unrated entities and some of these unrated entities will use revenue generated from the sale of the shipped gas to pay their shipping and other operating expenses, including the charter fees. The price of the gas may be subject to market fluctuations and the LNG supply may be curtailed by start-up delays and stoppages. If the revenue generated by the charterer is insufficient to pay the charter fees, we may be unable to realize the expected economic benefit from these charter agreements. In addition, some of our financing related to certain of our LNG carrier newbuildings are with unrated entities. Any inability of these entities to meet their obligations under the financing arrangements, could have an adverse effect on our liquidity and potentially delay the deliveries of certain of our LNG carrier newbuildings.

~~The marine energy transportation industry is subject to substantial environmental and other regulations, which may significantly limit our operations or 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 Partnership: B. Operations - Regulations.”

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

We are paid in Euros under some of our charters, and certain of our vessel operating expenses and general and administrative expenses currently are denominated in Euros, which is primarily a function of the nationality of our crew and administrative staff. We also make payments under two Euro-denominated term loans. In addition, from time to time we may incur certain capital expenditures relating to our vessels in Euros. If the amount of our 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, which would cause us to have less cash available for distribution to unitholders. In addition, if we do not have sufficient U.S. Dollars, we may be required to convert Euros into U.S. Dollars for distributions to unitholders. An increase in the strength of the U.S. Dollar relative to the Euro could cause us to have less cash available for distribution in this circumstance. We have not entered into currency swaps or forward contracts or similar derivatives to mitigate this risk.

Because we report our operating results in U.S. Dollars, changes in the value of the U.S. Dollar relative to the Euro and Norwegian ~~Kroner~~Krone (or NOK) also result in fluctuations in our reported revenues and earnings. In addition, 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, accrued liabilities, advances from affiliates and long-term debt, 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 for these gains and losses is our Euro-denominated term loans and our ~~Norwegian Kroner-denominated (or~~ ~~NOK~~)NOK-denominated bonds.

Exposure to interest rate fluctuations will result in fluctuations in our cash flows and operating results.

We are exposed to the impact of interest rate changes primarily through our borrowings and finance lease obligations that require us to make interest payments based on LIBOR, EURIBOR or NIBOR. Significant increases in interest rates could adversely affect our ~~operating~~profit margins, results of operations and our ability to service our ~~debt. In addition, there is uncertainty as to the continued use of LIBOR in the future. LIBOR is the subject of recent national, international~~debt and other regulatory guidance and proposals for reform. These reforms and other pressures may cause LIBOR to be eliminated or to perform differently than in the past. The consequences of these developments cannot be entirely predicted but could include an increase in the cost of our variable rate indebtedness andfinance lease obligations. In accordance with our risk management policy, we use interest rate swaps on certain of our debt and cross currency swaps on our NOK bonds to reduce our exposure to market risk from changes in interest rates. The principal objective of these contracts is to minimize the risks and costs associated with our ~~floating-rate~~floating rate debt. However, any hedging activities entered into by us may not be effective in fully mitigating our interest rate risk from our variable rate indebtedness.

In addition, we are exposed to credit loss in the event of non-performance by the counterparties to the interest rate swap agreements. For further information about our financial instruments at December 31, ~~2018,~~2021, that are sensitive to changes in interest rates, please read "Item 11 – Quantitative and Qualitative Disclosures About Market Risk."

Increased regulatory oversight, uncertainty relating to the nature and timing of the potential phasing out of LIBOR, and agreement on any new alternative reference rates may adversely impact our ability to manage our exposure to fluctuations in interest rates and borrowing costs.

A majority of our debt facilities include interest rates primarily based on LIBOR and certain other interest rate benchmarks, and the distribution rate on our Series B preferred units is scheduled to become based on LIBOR or an alternative rate after October 15, 2027. Accordingly, fluctuations in interest rates could have a material effect on our interest expense and borrowing costs. LIBOR and certain other interest rate benchmarks may be subject to regulatory guidance and/or reform that could cause interest rates under our current or future debt agreements to perform differently than in the past or cause other unanticipated consequences. As of December 31, 2021, LIBOR is no longer published on a representative basis, with the exception of the most commonly used tenors of U.S. dollar LIBOR, which will no longer be published on a representative basis after June 30, 2023. While there is no consensus on what interest rate may become accepted as alternatives to LIBOR, the Alternative Reference Rates Committee, a steering committee comprised of U.S. financial market participants, has selected as an alternative the Secured Overnight Finance Rate (or SOFR) as published by the Federal Reserve Bank of New York since May 2018. SOFR is a broad measure of the cost of borrowing cash in the overnight U.S. treasury repo market. At this time, it is impossible to predict whether SOFR or another reference rate will become an accepted alternative to LIBOR. The manner and impact of this transition may materially adversely affect the trading market for LIBOR-based agreements, including our credit facilities, interest rate swaps and Series B preferred units. We will need to negotiate the replacement benchmark rate on our credit facilities and interest rate swaps, and the use of an alternative rate or benchmark may negatively impact our interest rate expense. Any other contracts entered into in the ordinary course of business which currently refer to, use or include LIBOR, may also be impacted.

Further, if a LIBOR rate is not available on a determination date during the floating rate period for any of our LIBOR based agreements, the terms of such agreements will require alternative determination procedures which may result in interest or distribution payments differing from expectations and could affect our profit.

In addition, any changes announced by any governance or oversight body, or future changes adopted by such body, in the method pursuant to which LIBOR rates are determined may result in an increase or decrease in reported LIBOR rates. If that were to occur, the level of interest or distribution payments during the floating rate period for our LIBOR-based agreements would be affected and could affect our profit or the market value of our preferred units.

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 our operations and adversely affect our cash flows.

A significant portion of our seafarers ~~and the seafarers employed by Teekay Corporation and its other affiliates that crew some of our vessels,~~ are employed under collective bargaining agreements. While some of our labor agreements have recently been renewed, crew compensation levels under future collective bargaining agreements may exceed existing compensation levels, which would adversely affect our results of operations and cash flows. We may be subject to labor disruptions in the future if our relationships deteriorate with our seafarers or the unions that represent them. Our collective bargaining agreements may not prevent labor disruptions, particularly when the agreements are being renegotiated. Any labor disruptions could harm our operations and could have a material adverse effect on our business, results of operations and financial ~~condition and our ability to make cash distributions to unitholders.~~condition.

Teekay Corporation and certain of our joint venture partners may be unable to attract and retain qualified, skilled employees or crew necessary to operate our business, or may have to pay substantially increased costs for its employees and crew.

Our ~~success depends in large part on Teekay Corporation’s~~directors and ~~certain of our joint venture partners’ ability to attract~~officers 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. The ability to attract and retain qualified crew members under a competitive industry environment continues to put upward pressure on crew manning costs.

If we are not able to increase our charter rates 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.

~~Due to our lack of diversification, adverse developments in our LNG or LPG marine transportation businesses could reduce our ability to make distributions to our unitholders.~~

We rely exclusively on the cash flow generated from our LNG and LPG carriers that operate in the LNG or LPG transportation businesses. Due to our lack of diversification, an adverse development in the LNG or LPG shipping industry would have a significantly greater impact on our financial condition and results of operations than if we maintained more diverse assets or lines of business.

~~Teekay Corporation and its affiliates may engage in competition with us.~~

~~Teekay Corporation and its affiliates and joint ventures, including its equity-accounted investee, Teekay Offshore Partners L.P. (or~~ ~~Teekay Offshore~~), may engage in competition with us. Pursuant to an omnibus agreement between Teekay Corporation, Teekay Offshore, us and other related parties, Teekay Corporation, Teekay Offshore and their respective controlled affiliates (other than us and our subsidiaries) generally have agreed not to own, operate or charter LNG carriers without the consent of our General Partner. The omnibus agreement, however, allows Teekay Corporation, Teekay Offshore or any of such controlled affiliates to:

acquire LNG carriers and related time-charters as part of a business if a majority of the value of the total assets or business acquired is not attributable to the LNG carriers and time-charters, as determined in good faith by the Board of Directors of Teekay Corporation or the Board of Directors of Teekay Offshore’s general partner; however, if at any time Teekay Corporation or Teekay Offshore completes such an acquisition, it must offer to sell the LNG carriers and related time-charters to us for their fair market value plus any additional tax or other similar costs to Teekay Corporation or Teekay Offshore that would be required to transfer the LNG carriers and time-charters to us separately from the acquired business; or

own, operate and charter LNG carriers that relate to a bid or award for an LNG project that Teekay Corporation or any of its subsidiaries submits or receives; however, at least 180 days prior to the scheduled delivery date of any such LNG carrier, Teekay Corporation must offer to sell the LNG carrier and related time-charter to us, with the vessel valued at its “fully-built-up cost,” which represents the aggregate expenditures incurred (or to be incurred prior to delivery to us) by Teekay Corporation to acquire or construct and bring such LNG carrier to the condition and location necessary for our intended use, plus a reasonable allocation of overhead costs related to the development of such a project and other projects that would have been subject to the offer rights set forth in the omnibus agreement but were not completed.

If we decline the offer to purchase the LNG carriers and time-charters described above, Teekay Corporation or Teekay Offshore may own and operate the LNG carriers, but may not expand that portion of its business.

~~In addition, pursuant to the omnibus agreement, Teekay Corporation, Teekay Offshore or any of their respective controlled affiliates (other than us and our subsidiaries) may:~~

acquire, operate or charter LNG carriers if our General Partner has previously advised Teekay Corporation or Teekay Offshore that the Board of Directors of our General Partner has elected, with the approval of its conflicts committee, not to cause us or our subsidiaries to acquire or operate the carriers;

~~acquire up to a 9.9% equity ownership, voting or profit participation interest in any publicly traded company that owns or operates LNG carriers; and~~

~~provide ship management services relating to LNG carriers.~~

During 2018, there was a change in control of Teekay Offshore, which gives Teekay Offshore the right to elect to terminate the omnibus agreement. Termination of the omnibus agreement could have an adverse effect on our business, results of operations and financial condition and our ability to make cash distributions to unitholders. We have not received any indication from Teekay Offshore that it intends to terminate the omnibus agreement.

~~Our General Partner~~Stonepeak and its other affiliates ~~own~~which have a controlling interest in us and control the appointment of members of our Board have conflicts of interest and limited or no fiduciary duties, which may permit them to favor their own interests to those of us or our unitholders.

~~Teekay Corporation, which owns~~Stonepeak and ~~controls our General Partner, indirectly owns our 2% general partner interest and as at December 31, 2018 owned 31.8%~~its affiliates own all of our outstanding common ~~units. The directors~~units, which also permits them to appoint and ~~officers~~remove all of our ~~General Partner have~~directors (other than any single director our preferred unitholders may be permitted to elect if we are six months in arrears in paying preferred unit distributions (or a ~~fiduciary duty to manage~~Preferred Unit Elected Director)). Neither we nor our ~~General Partner in a manner beneficial to Teekay Corporation. Furthermore, certain directors and officers of our General Partner are~~ directors or officers of affiliates of our General Partner. Conflicts of interest may arise between Teekay Corporation and its affiliates, including our General Partner, on the one hand, and us and our unitholders, on the other hand. As a result of these conflicts, our General Partner may favor its own interests and the interests of its affiliates over the interests of our unitholders. These conflicts include, among others, the following situations:

~~neither our partnership agreement~~ nor Stonepeak owe any other agreement requires our General Partner or Teekay Corporation to pursue a business strategy that favors us or utilizes our assets, and Teekay Corporation’s officers and directors have a fiduciary duty to make decisions in the best interests of the shareholders of Teekay Corporation, which may be contrary to our interests;

~~executive officers of Teekay Gas Group Ltd., our recently formed subsidiary, and three of the directors of our General Partner also currently serve as officers or directors of Teekay Corporation;~~

our General Partner is allowed to take into account the interests of parties other than us, such as Teekay Corporation, in resolving conflicts of interest, which has the effect of limiting its fiduciary duty to our unitholders;

our General Partner has limited its liability and restricted its fiduciary duties under the laws of the Republic of the Marshall Islands, while also restricting the remedies available to our unitholders, and as a result of purchasing units, unitholders are treated as having agreed to the modified standard of fiduciary duties and to certain actions that may be taken by our General Partner, all as set forth in our partnership agreement;

our General Partner determines the amount and timing of our asset purchases and sales, capital expenditures, borrowings, issuances of additional partnership securities and reserves, each of which can affect the amount of cash that is available for distribution to our unitholders;

in some instances, our General Partner may cause us to borrow funds in order to permit the payment of cash distributions, even if the purpose or effect of the borrowing is to make incentive distributions to affiliates to Teekay Corporation;

~~our General Partner determines which costs incurred by it and its affiliates are reimbursable by us;~~

our partnership agreement does not restrict our General Partner from causing us to pay it or its affiliates for any services rendered to us on terms that are fair and reasonable or entering into additional contractual arrangements with any of these entities on our behalf;

~~our General Partner controls the enforcement of obligations owed to us by it and its affiliates; and~~

~~our General Partner decides whether to retain separate counsel, accountants or others to perform services for us.~~

~~The fiduciary duties of the officers and directors of our General Partner may conflict with those of the officers and directors of Teekay Corporation.~~

~~Our General Partner has limited~~ fiduciary duties to ~~manage~~ our ~~business in a manner beneficial~~preferred unitholders, other than an implied contractual duty of good faith and fair dealing pursuant to ~~us and~~ our ~~partners. Our General Partner has a Corporate Secretary but does not have a Chief Executive Officer or a Chief Financial Officer. The Corporate Secretary and the non-independent director~~operating agreement. Three of our ~~General Partner~~directors currently also serve as officers and/or directors of ~~Teekay Corporation and/~~Stonepeak or its other ~~affiliates of Teekay Corporation.~~affiliates. Consequently, these ~~officers and~~ directors may encounter situations in which their fiduciary obligations to ~~Teekay Corporation~~Stonepeak or its other affiliates, on the one hand, and any obligation to us or our unitholders, on the other hand, are in conflict. The resolution of these conflicts may not always be in the best interest of us or our unitholders. These conflicts include, among others, the following situations:

~~Because we are organized~~

•neither our operating agreement nor any other agreement requires Stonepeak or its affiliates to pursue a business strategy that favors us or utilizes our assets, and directors and officers of Stonepeak and its other affiliates have fiduciary duties to make decisions in the best interests of the owners of Stonepeak and such other affiliates, which may be contrary to our interests;

•our Board is allowed to take into account the interests of parties other than us, such as Stonepeak and its other affiliates, in resolving conflicts of interest, which has the effect of limiting any obligation to our unitholders;

•our operating agreement limits the liability and reduces the fiduciary duties and obligations of our directors and officers under the laws of ~~the Marshall Islands, it may be difficult to serve us with legal process or enforce judgments against us, our directors or our management.~~

We are organized under the laws of the Marshall Islands, and all of our assets are located outside of the United States. In addition, certain of our General Partner's directors and officers are non-residents of the United States, and all or a substantial portion of the assets of these non-residents are located outside the United States. As a result, it may be difficult or impossible to bring an action against us or against these individuals in the United States. Even if successful in bringing an action of this kind, the laws of the Marshall Islands and of other jurisdictions may prevent or restrict the enforcement of a judgment against our assets or the assets of our general partner or its directors and officers.

As a Marshall Islands entity with our headquarters in Bermuda, and with a majority of our subsidiaries being Marshall Islands entities and also having subsidiaries in other offshore jurisdictions, our operations may be subject to economic substance requirements of the European Union, which could harm our business.

Finance ministers of the EU rate jurisdictions for tax transparency, governance, real economic activity and corporate tax rate. Countries that do not adequately cooperate with the finance ministers are put on a “grey list” or a “blacklist”. Various countries, including the Republic of the Marshall Islands, while also restricting the remedies available to our unitholders, and ~~Bermuda,~~unitholders are ~~currently on~~treated as having agreed to such modified standards and to certain actions that may be taken by our Board, all as set forth in our operating agreement;

•our Board controls the ~~blacklist.~~enforcement of obligations owed to us by Stonepeak and its other affiliates; and

•our Board decides whether to retain separate counsel, accountants or others to perform services for us, which may be the same firms that provide services to Stonepeak or other affiliates.

EUExcept in limited circumstances, our Board, which is appointed by a common unit majority, has the power and authority to conduct our business without member states have agreed upon a set of measures, which they can choose to apply against the listed countries, including increased monitoring and audits, withholding taxes, special documentation requirements and anti-abuse provisions. The European Commission has stated it will continue to support member states' efforts to develop a more coordinated approach to sanctions for the listed countries in 2019. EU legislation prohibits EU funds from being channelled or transited through entities in countries on the blacklist.approval.

~~We are a Marshall Islands limited partnership with our headquarters in Bermuda. A majority~~Our operating agreement provides that members of our ~~subsidiaries~~Board (other than any Preferred Unit Elected Director) are ~~Marshall Islands entities~~appointed only by a common unit majority and ~~many~~may be removed, with or without cause, and at any time, by a common unit majority. As a result, Stonepeak and its affiliates, which own all our outstanding common units, are able to control the appointment and removal of members of our ~~subsidiaries are either organized~~Board (other than any Preferred Unit Elected Director) and exercise substantial influence over us. Under our operating agreement, our Board generally has full power and authority to do all things (other than those items that require member approval or registered in Bermuda. It is difficult to determine how the EU blacklisting of these jurisdictions will affect our business. These jurisdictions have enacted or may enact economic substance laws and regulations with which we may be obligated to comply. We understand that recently-adopted Bermudian legislation requires each Bermudian-registered entity to maintain a substantial economic presence in Bermuda and provides that a registered entity that carries on a relevant activity may comply with the economic substance requirements if (i) it is directed and managed in Bermuda, (ii) its core income-generating activities are undertaken in Bermuda with respect to which our Board has sought Conflicts Committee approval) on such terms as it determines to be necessary or appropriate to conduct our business including, among others, the ~~relevant activity, (iii) it maintains adequate physical presence~~following:

•the making of any expenditures, the lending or borrowing of money, the assumption or guarantee of, or other contracting for, indebtedness and other liabilities, the issuance of evidences of indebtedness, including, subject to any rights of our preferred unitholders, indebtedness that is convertible into securities of us, and the incurring of any other obligations;

•the negotiation, execution and performance of any contracts, conveyances or other instruments;

•the distribution our cash;

•the selection and dismissal of employees and agents, outside attorneys, accountants, consultants and contractors and the determination of their compensation and other terms of employment or hiring;

•the maintenance of insurance for our benefit and the benefit of our members;

•the formation of, or acquisition of an interest in, ~~Bermuda, (iv) it has adequate full-time employees~~and the contribution of property and the making of loans to, any other limited or general partnerships, joint ventures, corporations, limited liability companies or other relationships; the control of any matters affecting our rights and obligations, including the bringing and defending of actions at law or in ~~Bermuda with suitable qualifications~~equity and ~~(v) it incurs adequate operating expenditures~~otherwise engaging in ~~Bermuda in relation~~the conduct of litigation, arbitration or mediation and the incurring of legal expense and the settlement of claims and litigation;

•the indemnification of any person against liabilities and contingencies to the ~~relevant activity. We do not know what actions~~extent permitted by law; and

•subject to the ~~Marshall Islands may take, if any, to remove itself from~~prior payment of all quarterly distributions on the ~~list; whether~~Series A preferred units and Series B preferred units through the ~~EU will remove~~most recent applicable distribution payment dates, the ~~Marshall Islands~~purchase, sale or ~~Bermuda from the list; how quickly the EU would react~~other acquisition or disposition of our securities or, subject to any ~~changes in legislation of the Marshall Islands, Bermuda or other applicable~~

~~jurisdictions; or how EU banks or other counterparties will react while we or any~~rights of our ~~subsidiaries remain as entities organized~~preferred unitholders, the issuance of additional securities of us and ~~existing or registered under the laws~~ of ~~blacklisted countries. The effect of the EU blacklist,~~options, rights, warrants and ~~any noncompliance by us with any legislation adopted by applicable countries~~appreciation rights relating to ~~achieve removal from the list, could have a material adverse effect on~~ our ~~business, financial condition and operating results.~~securities.

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 or to access available cash of the 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 (including under relevant sanctions and anti-bribery and corruption laws) 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. In addition, we do not have control over the operations of, nor do we have any legal claim to the revenues and expenses of our equity-accounted investments. Consequently, the cash flow generated by our equity-accounted investments may not be available for use by us in the period that such cash flows are generated, if at all.

Legal and Regulatory Risks

Climate change and GHG restrictions may adversely impact our operations and markets.

An increasing concern for, and focus on, climate change has promoted extensive existing and proposed international, national and local regulations intended to reduce GHG emissions (including from various countries and the International Maritime Organization (or IMO)). These regulatory measures may include the adoption of cap and trade regimes, carbon taxes, increased efficiency standards and incentives or mandates for renewable energy. Compliance with these or other regulations and our efforts to participate in reducing GHG emissions could increase our compliance costs, require additional capital expenditures to reduce vessel emissions and may require changes to our business.

Our business includes transporting LNG and LPG. Regulatory changes and growing public concern about the environmental impact of climate change may lead to reduced demand for hydrocarbon products and decreased demand for our services, while increasing or creating greater incentives for use of alternative energy sources. We expect regulatory and consumer efforts aimed at combating climate change to intensify and accelerate. Although we do not expect demand for oil and gas to decline dramatically over the short-term, in the long-term, climate change initiatives will likely significantly affect demand for oil and gas and for alternatives. Any such change could adversely affect our ability to compete in a changing market and our business, financial condition and results of operations.

Increasing scrutiny and changing expectations from investors, lenders, customers and other market participants with respect to ESG policies and practices may impose additional costs on us or expose us to additional risks.

Companies across all industries are facing increasing scrutiny relating to their ESG policies. Investor advocacy groups, certain institutional investors, investment funds, lenders and other market participants are increasingly focused on ESG practices and, in recent years, have placed increasing importance on the implications and social cost of their investments. The increased focus and activism related to ESG and similar matters may hinder access to capital, as investors and lenders may decide to reallocate capital or to not commit capital as a result of their assessment of a company’s ESG practices. Companies that do not adapt to or comply with investor, lender or other industry shareholder expectations and standards, which are evolving, or which are perceived to have not responded appropriately to the growing concern for ESG issues, regardless of whether there is a legal requirement to do so, may suffer from reputational damage and their business, financial condition and stock price may be adversely affected.

We may face increasing pressures from lenders, customers and other market participants, which are increasingly focused on climate change, to prioritize sustainable energy practices, reduce our carbon footprint and promote sustainability. As a result, we may be required to implement more stringent ESG procedures or standards so that our existing lenders remain invested in us and make further investments in us, or in order for customers to consider conducting future business with us, especially given our business of transporting LNG and LPG. In addition, it is likely we will incur additional costs and require additional resources to monitor, report and comply with wide-ranging ESG requirements. The occurrence of any of the foregoing could have a material adverse effect on our business, financial condition and results of operations.

The marine energy transportation industry is subject to substantial environmental and other regulations, which may significantly limit our operations or increase our expenses.

Our operations are affected by extensive and changing international, national and local environmental protection laws, regulations, treaties and conventions which are 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. For example, new or amended legislation relating to ship recycling, sewage systems, emission control (including emissions of GHGs and other pollutants) as well as ballast water treatment and ballast water handling may be adopted. The IMO has also established progressive standards limiting emissions from ships starting from 2023 towards 2030 and 2050 goals. These and other laws or regulations may require significant additional capital expenditures or operating expenses in order for us to comply with the laws and regulations and maintain our vessels in compliance with international and national regulations. In addition, the higher emissions of our steam vessels relative to more modern vessels could make it more difficult to secure employment for these vessels and reduce the rates at which we can charter these vessels to its customers.

The environmental and other laws and regulations applicable to us can affect the future charter rates, 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.

Regulations relating to ballast water discharge may adversely affect our operational results and financial condition.

The IMO, the United Nations agency for maritime safety and the prevention of pollution by vessels, has imposed updated guidelines for ballast water management systems specifying the maximum amount of viable organisms allowed to be discharged from a vessel’s ballast water. Depending on the date of the International Oil Pollution Prevention (or IOPP) renewal survey, existing vessels constructed before September 8,

2017 were required to comply with updated applicable standards on or after September 8, 2019. For most vessels, compliance with the applicable standard will involve installing on-board systems to treat ballast water and eliminate unwanted organisms. Ships constructed on or after September 8, 2017 are required to comply with the applicable standards on or after September 8, 2017. We are currently implementing ballast water management system upgrades on certain of our vessels in accordance with the required timelines imposed by the IMO. The cost of compliance with these regulations, including as a result of installing such systems, may be substantial and may adversely affect our results of operation and financial condition. In addition to the requirements under the IMO, the United States Coast Guard (or USCG) has imposed mandatory ballast water management practices for all vessels equipped with ballast water tanks and entering U.S. waters. These USCG regulations may have the effect of restricting our vessels from entering U.S. waters, unless we equip our vessels with pre-approved ballast water treatment system (or BWTS) or receive authorization by a duly-issued permit or exemption.

Failure to comply with the U.S. Foreign Corrupt Practices Act, the UK Bribery Act, the UK's Criminal Finances Act and other anti-bribery or anti-money laundering legislation in other jurisdictions could result in fines, criminal penalties, contract terminations and an adverse effect on our business.

We operate our vessels worldwide, which may require our vessels to trade in countries known to have a reputation for corruption. We are committed to doing business in accordance with applicable anti-corruption laws and have adopted a code of business conduct and ethics which is consistent and in full compliance with the U.S. Foreign Corrupt Practices Act of 1977 (or the FCPA), the Bribery Act 2010 of the United Kingdom (or the UK Bribery Act) and the Criminal Finances Act 2017 of the United Kingdom (or the CFA). We are subject, however, to the risk that we, our joint venture partners, our affiliated entities or our or their respective officers, directors, employees and agents may take actions determined to be in violation of such anti-corruption and anti-money laundering laws, including the FCPA, the UK Bribery Act and the CFA. Any such violation could result in substantial fines, sanctions, civil and/or criminal penalties, or curtailment of operations in certain jurisdictions, and might adversely affect our business, results of operations or financial condition. In addition, actual or alleged violations could damage our reputation and ability to do business. Furthermore, detecting, investigating, and resolving actual or alleged violations is expensive and can consume significant time and attention of our senior management.

With a majority of our subsidiaries being Marshall Islands entities and also having subsidiaries in other offshore jurisdictions, our operations may be subject to economic substance requirements, which could impact our business.

Finance ministers of the EU rate jurisdictions for tax transparency, governance, real economic activity and corporate tax rate. Countries that do not adequately cooperate with the finance ministers are put on a “grey list” or a “blacklist”. Bermuda and the Marshall Islands were removed from the blacklist in May and October 2019, respectively. Subsequently, in February 2020, Bermuda and the Marshall Islands were "white-listed" by the EU and the Marshall Islands continues to remain on such list. On February 24, 2022, Bermuda was put on the "grey list" and it is expected to be moved back to the "white list" in October of 2022 subject to review by the EU Council. While being on the "grey list", it is expected that Bermuda will not suffer any direct penalties or sanctions from the EU states.

EU member states have agreed upon a set of measures, which they can choose to apply against the listed countries, including increased monitoring and audits, withholding taxes, special documentation requirements and anti-abuse provisions. The European Commission has stated it will continue to support member states' efforts to develop a more coordinated approach to sanctions for the listed countries. EU legislation prohibits EU funds from being channeled or transited through entities in countries on the blacklist. Jurisdictions in which we operate could be put on the blacklist in the future.

A majority of our subsidiaries are Marshall Islands entities and many of our subsidiaries are either organized or registered in Bermuda. These jurisdictions have enacted economic substance laws and regulations with which we may be obligated to comply. We believe that we and our subsidiaries are compliant with the Bermuda and the Marshall Islands economic substance requirements and do not currently expect that these requirements will have a material adverse effect on our business, financial condition and operating results. However, if there were a change in the requirements or interpretation thereof, or if there were an unexpected change to our operations, any such change could result in noncompliance with the economic substance legislation and related fines or other penalties, increased monitoring and audits, and dissolution of the noncompliant entity, which could have an adverse effect on our business, financial condition or operating results.

Information and Technology Risks

A cyber-attack could materially disrupt our business

We rely on information technology systems and networks in our operations and the administration of our business. Cyber-attacks have increased in number and sophistication in recent years. Our operations could be targeted by individuals or groups seeking to sabotage or disrupt our information technology systems and networks, or to steal data. A successful cyber-attack could materially disrupt our operations, including the safety of our operations, or lead to unauthorized release of information or alteration of information on our systems. Any such attack or other breaches of our information technology systems could have a material adverse effect on our business and results of operations.

Our failure to comply with data privacy laws could damage our customer relationships and expose usto litigation risks and potential fines.

Data privacy is subject to frequently changing rules and regulations, which sometimes conflict among the various jurisdictions and countries in which we provide services and continue to develop in ways which we cannot predict, including with respect to evolving technologies such as cloud computing. The EU has adopted the General Data Privacy Regulation (or the GDPR), a comprehensive legal framework to govern data collection, use and sharing and related consumer privacy rights which took effect in May 2018. The GDPR includes significant penalties for non-compliance. Our failure to adhere to or successfully implement processes in response to changing regulatory requirements in this area could result in legal liability or impairment to our reputation in the marketplace, which could have a material adverse effect on our business, financial condition and results of operations.

Risks Related to an Investment in Our Securities

Because we are organized under the laws of the Marshall Islands, it may be difficult to serve us with legal process or enforce judgments against us, our directors or our management.

We are organized under the laws of the Marshall Islands, and all of our assets are located outside of the United States. In addition, certain of our directors and officers are non-residents of the United States, and all or a substantial portion of the assets of these non-residents are located outside the United States. As a result, it may be difficult or impossible to bring an action against us or against these individuals in the United States. Even if successful in bringing an action of this kind, the laws of the Marshall Islands and of other jurisdictions may prevent or restrict the enforcement of a judgment against us or our assets or the assets of our directors and officers.

Tax Risks

In addition to the following risk factors, you should read "Item 4E – Taxation of the Company", "Item 10 – Additional Information – Material United States Federal Income Tax Considerations" and “Item 10 – Additional ~~Information: Taxation”~~Information – Non-United States Tax Considerations" 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 units.

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

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~~in which, after taking into account the income and assets of the corporation and, pursuant to a “look-through” rule, any other corporation or partnership in which the corporation directly or indirectly owns at least 25% of the stock or equity interests (by value) and any partnership in which the corporation directly or indirectly owns less than 25% of the equity interests (by value) to the extent the corporation satisfies an "active partner" test and does not elect out of "look through" treatment, either ~~(a)~~(i) at least 75% of its gross income consists of “passive income,” or ~~(b)~~(ii) 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 and our look-through subsidiaries' 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 the 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 passive foreign investment companies (or 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 look-through 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 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 and our look-through subsidiaries' assets, income or operations.

If we or 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.~~United States Federal Income Tax Considerations") held units, such U.S. Holder would face adverse U.S. federal income tax consequences. For a more comprehensive discussion regarding the tax consequences to U.S. Holders if we are treated as a PFIC, please read "Item 10 – Additional Information: Material ~~U.S.~~United States Federal Income Tax Considerations – United States Federal Income Taxation of U.S. Holders – Consequences of Possible PFIC Classification." In addition, if we or the IRS were to determine that we are or have been a PFIC, the price of our Preferred Units may decline and our ability to raise capital on acceptable terms may be materially and adversely affected.

We are subject to taxes, which ~~reduces~~may impact our ~~cash available for distribution~~liquidity position. In addition, unitholders may be subject to ~~partners.~~Canadian withholding tax on distributions if we are determined to be resident in Canada.

We or our subsidiaries (including those owned in our joint ventures) are subject to tax in certain jurisdictions in which we or our subsidiaries are organized, own assets or have operations, which ~~reduces the amount of~~may adversely impact our ~~cash available for distribution.~~liquidity position. In computing our tax obligations in these jurisdictions, we are required to take various tax accounting and reporting positions, including in certain cases estimates, on matters that are not entirely free from doubt and for which we may not 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 the cash available for distribution. We have established reserves in our financial statements that we believe are adequate to cover our liability for any such additional taxes. We cannot assure you, however, that such reserves will be sufficient to cover any additional tax liability that may be imposed on us or our subsidiaries. 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, ~~Teekay Corporation indirectly owns less than 50%~~with respect to our tax year ending in 2021, we believe we are subject to 4% gross basis tax, as discussed below under “Item 4E – Taxation of the ~~value~~Company”, "Item 10 – Additional Information – Material United States Federal Income Tax Considerations.” With respect to our tax year ending in 2022, we expect that the Section 883 Exemption will be applicable to us, however, changes in the ownership of our ~~outstanding~~ units ~~but has voting control of~~may cause us ~~and therefore~~to be unable to claim an Section 883 Exemption. If we ~~believe that we do~~were not ~~satisfy the requirements of the exemption~~exempt from ~~U.S.~~ taxation under Section 883 of the Code, ~~and our U.S. source income is~~we would be subject to ~~taxation under Section 887 of the Code. The amount~~

~~of such~~U.S. federal income tax ~~will depend upon the amount of~~on income we earn from voyages into or out of the United States, which is not within our complete control. In addition, Seapeak LLC and some of its subsidiaries are relying on (and, prior to the Conversion of the Partnership into Seapeak LLC, some of the Partnership’s subsidiaries relied on) an exemption under

subsection 250(6) of the Income Tax Act (Canada) (or the Canada Tax Act) for (i) corporations whose principal business is international shipping and that derive all or substantially all of their revenue from international shipping, and (ii) certain corporations that hold eligible interests in such corporations or other eligible entities. The exemption deems the qualifying corporations not to be resident in Canada for Canadian income tax purposes. If a corporation (including Seapeak LLC and some of its subsidiaries) that would, but for the subsection 250(6) exemption, be resident in Canada is unable to satisfy the requirements of the subsection 250(6) exemption, that corporation would be subject to Canadian income tax on its world-wide income and dividend distributions to the corporation’s shareholders who are non-residents of Canada would generally be subject to Canadian withholding tax. To the extent Seapeak LLC were to distribute dividends as a corporation determined to be resident in Canada, unitholders who are not resident in Canada for purposes of the Canadian Tax Act would generally be subject to Canadian withholding tax in respect of such dividends.

Typically, most of our charter contracts require the charterer to indemnify us in respect of taxes incurred as a consequence of the voyage activities of our vessels, which are under the direction of the charterers. However, we, our joint ventures and our subsidiaries operate in numerous jurisdictions which may result in various voyage-related or freight taxes being imposed. Although we are generally entitled to indemnification from our charterers for these taxes, there is a risk that we may not be able to successfully claim an indemnity for tax liabilities which could impact our financial condition and ability to make cash distributions on our preferred units.

Unitholders may be subject to income tax in one or more non-U.S. countries, including Canada, as a result of owning our units if, under the laws of any such country, we are considered to be carrying on business there. Such laws may require unitholders to file a tax return with, and pay taxes to, those countries.

Unitholders may be subject to tax in one or more countries ~~including Canada,~~ as a result of owning our units if, under the laws of any such country, we are considered to be carrying on business there. If unitholders are subject to tax in any such country, unitholders may be required to file a tax return with, and pay taxes to, that country based on their allocable share of our income. We may be required to reduce distributions to unitholders on account of any withholding obligations imposed upon us by that country in respect of such allocation to unitholders. The United States may not allow a tax credit for any foreign income taxes that unitholders directly or indirectly incur.

Item 4.Information on the ~~Partnership~~Company


A.	~~Overview, History and Development~~

A.Overview, History and Development

Overview and History

Seapeak LLC (formerly known as Teekay LNG Partners L.P.) is an international provider of marine transportation services ~~for~~focusing on LNG ~~LPG~~ and ~~crude oil.~~LPG. We were formed in 2004 ~~by Teekay Corporation (NYSE: TK), a portfolio manager~~for the purpose of ~~marine services to the global oil and natural gas industries, to expand its operations~~operating in the LNG shipping sector. Our primary strategy focuses on servicing our customers through our fleet of LNG and LPG carriers under medium to long-term, fixed-rate charters. In executing our strategy, we may engage in vessel or business acquisitions or enter into joint ventures and partnerships with companies that provide increased access to emerging opportunities from global expansion of the LNG and LPG sectors. We ~~seek to leverage the expertise, relationships and reputation of Teekay Corporation and its affiliates to~~ pursue ~~these~~ opportunities in the LNG and LPG sectors and may consider other opportunities to which our competitive strengths are well suited, including entering into adjacent liquefied gas markets and maritime opportunities.

As of December 31, 2021, our fleet consisted of 47 LNG carriers (including 25 LNG carriers that are accounted for under the equity method) and 28 LPG carriers and multi-gas carriers (including the 21 carriers that are accounted for under the equity method). In addition, as at December 31, 2021, we had one LNG receiving and regasification terminal ~~business.~~in Bahrain, in which we own a 30% interest. Our equity-accounted LNG carriers include (i) six LNG carriers (or the MALT LNG Carriers) relating to our 52% ownership interest in theMALT Joint Venture, (ii) four LNG carriers (or the RasGas III LNG Carriers) relating to our joint venture with QGTC Nakilat (1643-6) Holdings Corporation in which we have a 40% ownership interest, (iii) four LNG carriers relating to the Angola Project (or the Angola LNG Carriers) in our joint venture with Mitsui & Co. Ltd. and NYK Energy Transport (Atlantic) Ltd. (or the Angola Joint Venture) in which we have a 33% ownership interest, (iv) one LNG carrier in the Excalibur Joint Venture, (v) four LNG carriers (or the Pan Union LNG Carriers), in which we have interests ranging from 20% to 30%, relating to our joint venture with China LNG, CETS Investment Management (HK) Co. Ltd. and BW Investments Pte. Ltd, and (vi) six ARC7 LNG carriers relating to the Yamal LNG Joint Venture. As of December 31, 2021, our 21 equity-accounted LPG carriers (or the Exmar LPGCarriers) relate to our Exmar LPG Joint Venture.

Our fleets of LNG and LPG carriers (including equity-accounted vessels) currently have approximately 7.9 million and 0.9 million cubic meters of total capacity, respectively.

On January 13, 2022, Teekay LNG Partners L.P. was acquired through a merger by investment vehicles managed by Stonepeak. Pursuant to the merger and related transactions (or the Stonepeak Transaction), Stonepeak and its affiliates acquired: (1) 100% of the issued and outstanding common units of the Partnership (including approximately 41.1% of the Partnership common units held by Teekay Corporation), (2) 100% of the ownership interests of Teekay GP L.L.C., the General Partner of the Partnership (or the General Partner), and (3) certain operating subsidiaries from Teekay Corporation which provide services to the Partnership, its subsidiaries and joint ventures.

On February 25, 2022, the Partnership converted from a limited partnership formed under the laws of the Republic of the Marshall Islands into a limited liability company formed under the laws of the Republic of the Marshall Islands (or the Conversion). Concurrently with the Conversion, the Partnership changed its name from "Teekay LNG Partners L.P." to "Seapeak LLC". As a result of the Conversion, Seapeak LLC no longer has a general partner and affiliates of Stonepeak now own 100% of our limited liability company common units. Please see “Item 5 – Operating and Financial Review and Prospects: Management’s Discussion and Analysis of Financial Condition and Results of Operations – Significant Developments in ~~2018~~2021 and Early ~~2019.”~~2022” for additional information about the Stonepeak Transaction and the Conversion.

As of December 31, 2018, our fleet, excluding newbuildings, consisted of 43 LNG carriers (including the six MALT LNG Carriers, four RasGas 3 LNG Carriers, four Angola LNG Carriers, three Pan Union LNG Carriers, one Exmar LNG Carrier and two ARC7 LNG carriers (or the ~~Yamal LNG Carriers~~) that are all accounted for under the equity method), 29 LPG and multi-gas carriers (including the 22 Exmar LPG Carriers that are accounted for under the equity method), one Suezmax-class crude oil tanker, and one Handymax product tanker, all of which are double-hulled. Our fleet is relatively young and has an average age of approximately eight years for our LNG carriers, approximately eight years for our LPG and multi-gas carriers and approximately 12 years for our conventional tankers (Suezmax and Handymax), compared to world averages of 10, 15 and 10 years, respectively, as of December 31, 2018. As at December 31, 2018, we had six LNG carrier newbuildings scheduled for delivery in 2019, and one LNG receiving and regasification terminal under construction scheduled for completion in 2019.

Our fleets of LNG and LPG carriers (excluding newbuildings but including equity-accounted vessels) currently have approximately 7.2 million and 0.9 million cubic meters of total capacity, respectively. The aggregate capacity of our conventional tanker fleet is approximately 0.2 million deadweight tonnes (or ~~dwt~~).

~~We were formed under the laws of the Republic of The Marshall Islands as a limited partnership, Teekay LNG Partners L.P., on November 3, 2004, and maintain our~~ principal executive offices are at ~~4th Floor, Belvedere Building, 69 Pitts Bay Road, Hamilton, HM 08, Bermuda.~~2000, 550 Burrard Street, Vancouver, B.C., Canada, V6C 2K2. Our telephone number at such address is ~~(441) 298-2530.~~(604) 844-6609.


B.	~~Operations~~

The SEC maintains an internet site at www.sec.gov, that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. Our website is www.seapeak.com. The information contained on our website is not part of this annual report.

B.Operations

Our Fleet and Our Charters

We generate revenues by charging customers for the transportation of their LNG ~~LPG~~ and ~~crude oil~~LPG using our vessels. The substantial majority of these services are provided through ~~either a~~ time-charter ~~or bareboat charter contract,~~contracts, where vessels are chartered to customers for a fixed ~~period~~periods of time at rates that are generally fixed but may contain a variable component based on inflation, interest rates or ~~current market rates.~~other factors.

Our vessels and our LNG regasification terminal ~~under construction~~ in Bahrain primarily operate under fixed-rate contracts with major energy and utility companies. As of December 31, ~~2018,~~2021, the average remaining term for these contracts ~~including assets under construction,~~ was ~~approximately~~over 10 years for our LNG carriers and regasification terminal and approximately two years for our LPG carriers, ~~and approximately half a year for our conventional tanker (Handymax),~~ subject, in certain circumstances, to termination or vessel purchase rights.

“Hire” rate refers to the basic payment from the customer for the use of a vessel. Hire is payable monthly, in advance, in U.S. Dollars or Euros, as specified in the charter. The hire rate generally includes two components – a capital cost component and an operating expense component. The capital cost component typically approximates the amount we are required to pay under vessel financing ~~obligations and, for two of our conventional tankers, adjusts for changes in the floating interest rates relating to the underlying vessel financing.~~obligations. The operating expense

component, which adjusts annually for inflation, is intended to compensate us for vessel operating expenses. ~~In addition, we may receive additional revenues beyond the fixed hire rate when current market rates exceed specified amounts under our time-charter contracts for two of our Suezmax tankers.~~

Hire payments may be reduced or, under some charters, we must pay liquidated damages, if the vessel does not perform to certain of its specifications, such as if the average vessel speed falls below a guaranteed speed or the amount of fuel consumed to power the vessel under normal circumstances exceeds a guaranteed amount.

When a vessel is “off-hire” – or not available for service – the customer generally is not required to pay the hire rate and we are responsible for all costs. Prolonged off-hire may lead to vessel substitution or termination of the time-charter. A vessel will typically be deemed to be off-hire if it is in dry dock unless our contract specifies drydocking is not considered off-hire. 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. In addition, a vessel generally will be deemed off-hire if there is a loss of time due to, among other things: operational deficiencies; equipment breakdowns; delays due to accidents, crewing strikes, certain vessel detentions or similar problems; or our failure to maintain the vessel in compliance with its specifications and contractual standards or to provide the required crew.

Liquefied Natural Gas Segment

LNG Carriers

The LNG carriers in our liquefied natural gas segment compete in the LNG market. 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 the charter rate is payable to the owner on a monthly ~~basis.~~basis and in advance. LNG shipping historically has been transacted with 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 levels of spot voyages (typically consisting of a single voyage), short-term time-charters and medium-term time-charters have grown in ~~the past few~~recent years. The amount of LNG traded on a spot and short-term basis (defined as contracts with a duration of 4 years or less) has increased from approximately 10% of total LNG supply in 2010 to approximately 30% in 2018.

In the LNG market, we compete principally with other private and state-controlled energy and utilities companies that generally operate captive fleets, and independent ~~ship owners~~shipowners 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 some major energy companies have continued to divest non-core businesses.

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 supercooled to a temperature of approximately negative 260 degrees Fahrenheit. This process reduces its volume to approximately 1/~~600th~~600th 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 import natural gas. LNG carriers include a sophisticated containment system that holds the LNG and provides insulation to reduce the amount of LNG that boils off naturally. The natural boil off is either used as fuel to power the engines on the ship or it can be reliquefied and put back into the tanks. LNG is transported overseas in specially built tanks in double-hulled ships to a receiving terminal, where it is offloaded and stored in 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.

With the exception of the Arctic Spirit and Polar Spirit, which are the only two ships in the world that utilize the Ishikawajima Harima Heavy Industries Self Supporting Prismatic Tank IMO Type B ~~(or~~ ~~IHI SPB~~) independent tank technology, our fleet uses two of the Gaz Transport and Technigaz (or GTT) membrane containment systems. The GTT membrane systems are used in the majority of LNG tankers now being constructed. New LNG carriers generally have an expected lifespan of approximately 35 to 40 years. Unlike the oil tanker industry, there are currently no regulations that require the phase-out from trading of LNG carriers after they reach a certain age. As at December 31, ~~2018,~~2021, our LNG carriers, ~~excluding newbuilding vessels but~~ including equity-accounted vessels, had an average age of approximately ~~eight~~nine years, compared to the world LNG carrier fleet average age of approximately 10 years. In addition, as at that date, there were approximately ~~555~~681 vessels in the world LNG fleet and approximately ~~136~~183 additional LNG carriers under construction or on order for delivery through ~~2022.~~2025, inclusive of floating storage units and floating storage regasification units.

The following table provides additional information about the LNG carriers in our operating fleet as of December 31, ~~2018.~~2021.

Vessel

Capacity

Delivery

Our
Ownership

Contract Type

Charterer

Expiration of

Charter(1)

(cubic meters)

Operating LNG carriers:

Consolidated

Arctic Spirit

87,305

1993

100%

Time-charter

Petronas LNG Ltd.

Apr. 2022

Polar Spirit

87,305

1993

100%

Time-charter

Petronas LNG Ltd.

May 2022

Hispania Spirit

137,814

2002

100%

Time-charter

Shell International Trading Middle East Ltd.

Sep. 2022

Catalunya Spirit

135,423

2003

100%

Time-charter

Gas Natural SDG

Aug. 2023(2)

Galicia Spirit

137,814

2004

100%

Time-charter

Uniòn Fenosa Gas(3)

Jul. 2029(4)

Madrid Spirit

135,423

2004

100%

Time-charter

Shell International Trading Middle East Ltd.

Dec. 2024(2)

Al Marrouna

149,539

2006

70%

Time-charter

Ras Laffan Liquefied
Natural Gas Company Ltd.

Oct. 2026(5)

Al Areesh

148,786

2007

70%

Time-charter

Ras Laffan Liquefied
Natural Gas Company Ltd.

Jan. 2027(5)

Al Daayen

148,853

2007

70%

Time-charter

Ras Laffan Liquefied
Natural Gas Company Ltd.

Feb. 2027(5)

Tangguh Hiri

151,885

2008

70%

Time-charter

The Tangguh Production
Sharing Contractors

Dec. 2028

Tangguh Sago

155,000

2009

70%

Time-charter

The Tangguh Production
Sharing Contractors

May 2029

Magellan Spirit

165,700

2009

100% –

Chartered-in(6)

Time-charter

Petróleo Brasileiro S.A.

Jun. 2022

Creole Spirit

173,400

2016

100% –
Finance lease(7)

Time-charter

Trafigura Maritime Logistics Pte Ltd.

Feb. 2022(8)

Oak Spirit

173,400

2016

100% –
Finance lease(7)

Time-charter

Total Gas & Power Limited

Jul. 2022 (17)

Macoma

173,400

2017

100% –
Finance lease (7)

Time-charter

Shell Tankers (Singapore) Private Ltd.

Oct. 2023(9)

Murex

173,400

2017

100% –

Finance lease(7)

Time-charter

Shell Tankers (Singapore) Private Ltd.

Oct. 2024(9)

Seapeak Vancouver(16)

173,400

2017

100% –

Finance lease (7)

Time-charter

Gas Natural SDG

Feb. 2022(16)

Magdala

173,400

2018

100% –
Finance lease(7)

Time-charter

Shell Tankers (Singapore) Private Ltd.

Jan. 2026(9)

Myrina

173,400

2018

100% –
Finance lease(7)

Time-charter

Shell Tankers (Singapore) Private Ltd.

May 2024(9)

~~Vessel~~

~~Capacity~~

~~Delivery~~

~~Our~~

~~Ownership~~

~~Contract Type~~

~~Charterer~~

~~Expiration of~~

~~Charter~~⁽¹⁾

~~(cubic meters)~~

~~Operating LNG carriers:~~

~~Consolidated~~


Vessel	Capacity	Delivery	Our Ownership	Contract Type	Charterer	Expiration of Charter(1)
	(cubic meters)
Megara	173,400	2018	100% – Finance lease(7)	Time-charter	Shell Tankers (Singapore) Private Ltd.	Jul. 2026(9)
Bahrain Spirit	173,400	2018	100%	Time-charter	Bahrain LNG W.L.L.	Feb. 2039
Sean Spirit	174,000	2018	100%	Time-charter	BP Gas Marketing Limited	Dec. 2031(10)
Yamal Spirit	174,000	2019	100% – Finance lease(7)	Time-charter	Yamal Trade PTE. Ltd	Jan. 2034(2)

Equity-Accounted
Excalibur	138,034	2002	50%	Idle	Idle	Idle
Marib Spirit	165,500	2008	52%	Time-charter	Yemen LNG Company Limited(11)	Mar. 2029(12)
Arwa Spirit	165,500	2008	52%	Time-charter	Yemen LNG Company Limited(11)	Apr. 2029(12)
Al Huwaila	214,176	2008	40%	Time-charter	Ras Laffan Liquefied Natural Gas Company Ltd.	May 2033(2)
Al Shamal	213,536	2008	40%	Time-charter	Ras Laffan Liquefied Natural Gas Company Ltd.	May 2033(2)
Al Kharsaah	214,198	2008	40%	Time-charter	Ras Laffan Liquefied Natural Gas Company Ltd.	Jun. 2033(2)
Al Khuwair	213,101	2008	40%	Time-charter	Ras Laffan Liquefied Natural Gas Company Ltd.	Jul. 2033(2)
Methane Spirit	165,500	2008	52%	Time-charter	Trafigura	Jan. 2023(13)
Woodside Donaldson	165,500	2009	52%	Time-charter	Pluto LNG Party Limited	Jun. 2026(14)
Magellan Spirit	165,700	2009	52%	Time-charter	Teekay Luxembourg S.À R.L.(6)	Jun. 2022 (6)
Meridian Spirit	165,700	2010	52%	Time-charter	Total E&P Norge AS Mansel Limited	Nov. 2030(12)
Soyo	160,400	2011	33%	Time-charter	Angola LNG Supply Services LLC	Aug. 2031(2)
Malanje	160,400	2011	33%	Time-charter	Angola LNG Supply Services LLC	Sep. 2031(2)
Lobito	160,400	2011	33%	Time-charter	Angola LNG Supply Services LLC	Oct. 2031(2)
Cubal	160,400	2012	33%	Time-charter	Angola LNG Supply Services LLC	Jan. 2032(2)
Pan Asia	174,000	2017	30%	Time-charter	Methane Services Limited	Oct. 2037(15)
Pan Americas	174,000	2018	30%	Time-charter	Methane Services Limited	Jan. 2038(15)
Pan Europe	174,000	2018	20%	Time-charter	Methane Services Limited	Jul. 2038(15)
Eduard Toll	172,410	2018	50%	Time-charter	Yamal Trade PTE Ltd.	Dec. 2045(2)
Rudolf Samoylovich	172,410	2018	50%	Time-charter	Yamal Trade PTE Ltd.	Dec. 2045(2)
Pan Africa	174,000	2019	20%	Time-charter	Methane Services Limited	Jan. 2039(15)
Nikolay Yevgenov	172,410	2019	50%	Time-charter	Yamal Trade PTE Ltd.	Dec. 2045(2)
Vladimir Voronin	172,410	2019	50%	Time-charter	Yamal Trade PTE Ltd.	Dec. 2045(2)
Georgiy Ushakov	172,410	2019	50%	Time-charter	Yamal Trade PTE Ltd.	Dec. 2045(2)

Hispania Spirit 137,814
2002 100% Time-charter Shell Spain LNG S.A.U.
Sep. 2022⁽²⁾
Catalunya Spirit 135,423
2003 100% Time-charter Gas Natural SDG
Aug. 2023⁽²⁾
Galicia Spirit 137,814
2004 100% Time-charter Uniòn Fenosa Gas
Jul. 2029⁽³⁾
Madrid Spirit 135,423
2004 100% Time-charter Shell Spain LNG S.A.U.
Dec. 2024⁽²⁾
Al Marrouna 149,539
2006 70% Time-charter
Ras Laffan Liquefied
Natural Gas Company Ltd.

Oct. 2026⁽⁴⁾
Al Areesh 148,786
2007 70% Time-charter
Ras Laffan Liquefied
Natural Gas Company Ltd.

Jan. 2027⁽⁴⁾
Al Daayen 148,853
2007 70% Time-charter
Ras Laffan Liquefied
Natural Gas Company Ltd.

Feb. 2027⁽⁴⁾
Tangguh Hiri 151,885
2008 69% Time-charter
The Tangguh Production
Sharing Contractors
Jan. 2029
Tangguh Sago 155,000
2009 69% Time-charter
The Tangguh Production
Sharing Contractors
May 2029
Arctic Spirit 87,305
1993 99% Time-charter Petrobras LNG Ltd. May 2022
Polar Spirit 87,305
1993 99% Time-charter Petrobras LNG Ltd. Apr. 2019
Wilforce 155,900
2013 99% Bareboat Awilco LNG ASA
Dec. 2019⁽⁵⁾
Wilpride 155,900
2013 99% Bareboat Awilco LNG ASA
Dec. 2019⁽⁵⁾
Creole Spirit 173,000
2016
100% –
Capital lease⁽⁶⁾
Time-charter Cheniere Marketing, LLC Feb. 2021
Oak Spirit 173,000
2016
100% –
Capital lease⁽⁶⁾
Time-charter Cheniere Marketing, LLC Aug. 2021
Torben Spirit 173,400
2017
100% –
Capital lease⁽⁶⁾
Time-charter Gas Natural SDG Dec. 2021
Magellan Spirit 165,700
2009
100% –
Chartered-in⁽¹³⁾
Time-charter Trafigure Maritime Logistics Pte Ltd. Mar. 2019
Macoma 173,000
2017
99% –
Capital lease⁽⁶⁾
Time-charter Shell Tankers (Singapore) Private Ltd.
Oct. 2023⁽⁸⁾
Murex 173,000
2017
99% –
Capital lease⁽⁶⁾
Time-charter Shell Tankers (Singapore) Private Ltd.
Oct. 2024⁽⁸⁾
Magdala 173,000
2018
99% –
Capital lease⁽⁶⁾
Time-charter Shell Tankers (Singapore) Private Ltd.
Jan. 2026⁽⁸⁾
Myrina 173,000
2018
99% –
Capital lease⁽⁶⁾
Time-charter Shell Tankers (Singapore) Private Ltd.
May 2024⁽⁸⁾
Megara 173,000
2018
99% –
Capital lease⁽⁶⁾
Time-charter Shell Tankers (Singapore) Private Ltd.
Jul. 2026⁽⁸⁾
Bahrain Spirit 173,000
2018 100% Time-charter Bahrain LNG W.L.L. Jul. 2039
Sean Spirit 174,000
2018 100% Time-charter BP Gas Marketing Limited
Dec. 2025⁽¹⁵⁾
Equity-Accounted
Al Huwaila 214,176
2008 40% Time-charter
Ras Laffan Liquefied
Natural Gas Company Ltd.

May 2033⁽²⁾
Al Kharsaah 214,198
2008 40% Time-charter
Ras Laffan Liquefied
Natural Gas Company Ltd.

Jun. 2033⁽²⁾
Al Shamal 213,536
2008 40% Time-charter
Ras Laffan Liquefied
Natural Gas Company Ltd.

May 2033⁽²⁾

Vessel

Capacity

Delivery

Our
Ownership

Contract Type

Charterer

Expiration of

Charter(1)

(cubic meters)

Yakov Gakkel

172,410

2019

50%

Time-charter

Yamal Trade PTE Ltd.

Dec. 2045(2)

7,907,952

(1)Each of our time-charters are subject to certain termination and purchase provisions.

(2)The charterer has two options to extend the term for an additional five years each.

(3)LNG Shipping S.P.A. is a wholly-owned subsidiary of ENI S.P.A.

Al Khuwair 213,101
2008 40% Time-charter
Ras Laffan Liquefied
Natural Gas Company Ltd.

Jul. 2033⁽²⁾
Excalibur 138,034
2002 49% Time-charter Excelerate Energy LP Mar. 2022
Soyo 160,400
2011 33% Time-charter Angola LNG Supply Services LLC
Aug. 2031⁽²⁾
Malanje 160,400
2011 33% Time-charter Angola LNG Supply Services LLC
Sep. 2031⁽²⁾
Lobito 160,400
2011 33% Time-charter Angola LNG Supply Services LLC
Oct. 2031⁽²⁾
Cubal 160,400
2012 33% Time-charter Angola LNG Supply Services LLC
Jan. 2032⁽²⁾
Meridian Spirit 165,700
2010 52% Time-charter Total E&P Norge AS Mansel Limited
Nov. 2030⁽⁹⁾
Magellan Spirit 165,700
2009 52% Time-charter
Teekay LNG Partners L.P.⁽¹³⁾
Sep. 2020
Marib Spirit 165,500
2008 52% Time-charter
Yemen LNG Company Limited⁽¹⁰⁾

Mar. 2029⁽⁹⁾
Arwa Spirit 165,500
2008 52% Time-charter
Yemen LNG Company Limited⁽¹⁰⁾

Apr. 2029⁽⁹⁾
Methane Spirit 165,500
2008 52% Time-charter Osaka Gas
Jul. 2020⁽¹⁴⁾
Woodside Donaldson 165,500
2009 52% Time-charter Pluto LNG Party Limited
Jun. 2026⁽¹¹⁾
Pan Asia 174,000
2017 30% Time-charter Methane Services Limited
Oct. 2037⁽¹²⁾
Pan Americas 174,000
2018 30% Time-charter Methane Services Limited
Jan. 2038⁽¹²⁾
Pan Europe 174,000
2018 20% Time-charter Methane Services Limited
Jul. 2038⁽¹²⁾
Eduard Toll 172,600
2018 50% Time-charter Yamal Trade PTE Ltd.
Dec. 2045⁽²⁾
Rudolf Samoylovich 172,600
2018 50% Time-charter Yamal Trade PTE Ltd.
Dec. 2045⁽²⁾
7,179,292


~~(1)~~	~~Each of our time-charters are subject to certain termination and purchase provisions.~~


~~(2)~~	~~The charterer has two options to extend the term for an additional five years each.~~


~~(3)~~	~~The charterer has one option to extend the term for an additional five years.~~


~~(4)~~	~~The charterer has three options to extend the term for an additional five years each.~~


~~(5)~~	The charterer has an option to extend or decrease the term for 60 days and to purchase the vessel on any purchase option date. If no purchase option has been exercised by the charterer during the charter period, the charterer has an obligation to purchase each vessel at a fixed price at the end of the charter period.


~~(6)~~	~~We are the lessee for these obligations related to capital leases and will be required to purchase the vessel after the end of the lease terms for a fixed price.~~


~~(7)~~	~~The charterer has four options to extend the term for an additional 180 days, 180 days, one year and one year, respectively.~~


~~(8)~~	~~The charterer has four options to extend the term for an additional three years each.~~


~~(9)~~	~~The charterer has three options to extend the term for one, five and five additional years, respectively.~~


~~(10)~~	~~Please see "Item 5~~ – ~~Operating and Financial Review and Prospects: Management's Discussion and Analysis of Financial Condition and Results of Operations~~ – ~~Significant Developments in 2018 and early 2019: Charter Contracts for MALT LNG Carriers" relating to the status of this charter contract.~~


~~(11)~~	~~The charterer has four options to extend the term for an additional five years each.~~


~~(12)~~	~~The charterer has five options to extend the term for an additional two years each.~~


~~(13)~~	~~The~~ ~~Magellan Spirit~~ ~~is chartered-in from the Teekay LNG-Marubeni Joint Venture, until September 2020.~~


~~(14)~~	~~The charterer has one option to extend the term for an additional one year.~~


~~(15)~~	~~The charterer has the right to terminate the charter contract after seven years.~~

(4)The charterer has one option to extend the term for an additional five years.

(5)The ~~following table provides information about our LNG carrier newbuildings as~~charterer has three options to extend the term for an additional five years each.

(6)The Magellan Spirit is chartered-in from the MALT Joint Venture until June 2022. Teekay Luxembourg S.À R.L. is a wholly-owned consolidated subsidiary of ours. We secured a three-year, time-charter contract for the Magellan Spirit with TotalEnergies S.E. (or TotalEnergies), which is expected to commence once the vessel redelivers from its current time-charter contract.

(7)We are the lessee for these obligations related to finance leases and will be required to purchase the vessel after the end of the lease terms for a fixed price.

(8)The charterer exercised a one-year option at a fixed rate in January 2022.

(9)The charterer has four options to extend the term for an additional three years each.

(10)The charterer has the right to terminate the charter contract in 2026.

(11)The charter contracts for the Marib Spirit and Arwa Spirit with YLNG are currently suspended until early-2025. As of December 31, ~~2018. Charters~~2021, Marib Spirit was employed on a short-term contract. Arwa Spirit has entered into a three-year, time-charer contract with TotalEnergies, which is expected to commence once the vessel redelivers from its current time-charter contract with Trafigura in May 2022. Please see "Item 3 – Risk Factors: We derive a substantial majority of our revenues from a limited number of customers, and the loss of any customer, charter or vessel, or any adjustment to our charter contracts could result in a significant loss of revenues and cash flow" and "Item 5 – Operating and Financial Review and Prospects: Management's Discussion and Analysis of Financial Condition and Results of Operations – Significant Developments in 2021 and early 2022: MALT LNG Carriers Charter Contracts" relating to the status of this charter contract.

(12)The charterer has three options to extend the term for ~~these vessels typically~~one, five and five additional years, respectively.

(13)The charterer has one option to extend the term for an additional year.

(14)The charterer has four options to extend the term for an additional five years each.

(15)The charterer has five options to extend the term for an additional two years.

(16)Torben Spirit was renamed Seapeak Vancouver in February 2022 and commenced a new three-year, time-charter contract in March 2022 to Petróleo Brasileiro S.A.

(17)We secured a ten-year, time-charter contract for the Oak Spirit with ENN LNG (Singapore) Pte. Ltd, which is expected to commence ~~upon delivery of~~once the ~~vessels.~~vessel redelivers from its current time-charter contract.

Vessel Capacity Scheduled Delivery Date Shipyard Our Ownership Charterer Length of Charter
(cubic meters)
Consolidated
Yamal Spirit 174,000

Jan. 2019⁽¹⁾

HHI Sambo⁽²⁾
100% Yamal Trade PTE. Ltd. 15 years
Equity-Accounted
Pan Africa 174,000

Jan. 2019⁽¹⁾

Hudong⁽³⁾
20% Methane Services Limited
20 years⁽⁵⁾

Nikolay Yevgenov 172,600
Jun. 2019
DSME⁽⁴⁾
50% Yamal Trade PTE Ltd.
26 years⁽⁶⁾

Vladimir Voronin 172,600
Aug. 2019
DSME⁽⁴⁾
50% Yamal Trade PTE Ltd.
26 years⁽⁶⁾

Georgiy Ushakov 172,600
Oct. 2019
DSME⁽⁴⁾
50% Yamal Trade PTE Ltd.
26 years⁽⁶⁾

Yakov Gakkel 172,600
Nov. 2019
DSME⁽⁴⁾
50% Yamal Trade PTE Ltd.
26 years⁽⁶⁾

1,038,400


~~(1)~~	~~The~~ ~~Yamal Spirit~~ ~~and the~~ ~~Pan Africa~~ ~~delivered in January 2019.~~


~~(2)~~	~~Hyundai Samho Heavy Industries Co.~~


~~(3)~~	~~Hudong-Zhongua Shipbuilding (Group) Co. Ltd.~~


~~(4)~~	~~Daewoo Shipbuilding & Marine Engineering Co. Ltd.~~


~~(5)~~	~~The charterer has five options to extend the term for an additional two years each.~~


~~(6)~~	~~The charterer has two options to extend the term for an additional five years each.~~

~~The following table presents the percentage of~~For our consolidated voyage revenues from LNG customers that accounted for more than 10% of our consolidated voyage revenues, ~~during 2018, 2017~~please read “Item 18 – Financial Statements: Note 4 – Segment Reporting

Charter Expirations

We have five LNG carriers (the ArcticSpirit, the PolarSpirit, the HispaniaSpirit, the Catalunya Spirit, and ~~2016.~~the Macoma) that are subject to time-charter contracts that are scheduled to expire between February 2022 to February 2023.

Year Ended December 31,
2018 2017 2016
Royal Dutch Shell Plc⁽¹⁾
23 % 12% 12%
Ras Laffan Liquefied Natural Gas Company Ltd. 14 % 16% 18%
Cheniere Marketing International LLP 12 % 14% Less than 10%
The Tangguh Production Sharing Contractors Less than 10%
11% 11%


~~(1)~~	~~Includes its subsidiaries Shell Spain LNG S.A.U. and Shell Tankers (Singapore) Private Ltd.~~

NoIn anticipation of the scheduled expiry of these time charters, we are pursuing various opportunities relating to the vessels, which may include redeployment under new time charters, disposition, or other opportunities, all of which will depend on evolving market conditions. Please refer to and read “Item 4 – Information on the Company – Liquefied Natural Gas Segment – LNG ~~customer accounted~~Carriers” for ~~10% or more~~additional information and the full list of scheduled expiration dates of our consolidated voyage revenues during any of these periods. The loss of any significant customer or a substantial decline in the amount of services requested by a significant customer could harm our business, financial condition and results of operations.time-charter contracts.

Other Assets

We have a 30% ownership interest in an LNG receiving and regasification terminal ~~under construction~~ in Bahrain. In addition, we provide the operation and maintenance services to the Bahrain terminal. The Bahrain LNG Joint Venture completed the mechanical construction and commissioning of ~~this~~the Bahrain terminal ~~is expected to be completed~~ in ~~mid-2019~~late-2019 and ~~will be operated~~began receiving terminal use payments in early-2020 under ~~a 20-year~~its agreement with ~~National~~the Kingdom of Bahrain's Ministry of Oil &and Gas ~~Authority (or~~ ~~Nogaholding~~).which ends in February 2039.

Liquefied Petroleum Gas Segment

LPG and Multi-gas Carriers

LPG shipping involves the transportation of three main categories of cargo: liquid petroleum gases, including propane, butane and ethane; petrochemical gases, including ethylene, propylene and butadiene; and ammonia.

In the LPG market, we compete principally with independent ~~ship owners~~shipowners and operators, and other private and state-controlled energy and chemical companies that generally operate captive fleets.

As of December 31, ~~2018,~~2021, our LPG and multi-gas carriers (including equity-accounted vessels) had an average age of approximately ~~eight~~10 years, compared to the world LPG carrier fleet average age of approximately 15 years. As of that date, the worldwide LPG tanker fleet consisted of approximately ~~1,451~~1,522 vessels and approximately 74155 additional LPG vessels were on order for delivery through ~~2022.~~2025. LPG carriers range in

size from approximately 100 to approximately ~~88,000~~98,000 cubic meters. Approximately ~~47%~~39% of the vessels in the worldwide fleet are less than 5,000 cubic meters in size. New LPG carriers generally have an expected lifespan of approximately 30 to 35 years.

LPG carriers are mainly chartered to carry LPG on time-charters, 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.

The following table provides information about our LPG and multi-gas carriers in our operating fleet as of December 31, ~~2018.~~2021.


Vessel	Capacity	Delivery	Our Ownership	Contract Type	Charterer	Expiration of Charter
	(cubic meters)
Operating LPG carriers:
Consolidated
Napa Spirit	10,077	2003	100%	Spot	Spot market	—
Sonoma Spirit	8,469	2003	100%	Time-charter	Marubeni	Jul. 2022
Pan Spirit	5,821	2009	100%	Time-charter	Mitsubishi Corporation	Jan. 2023
Cathinka Spirit	5,831	2009	100%	Time-charter	Marubeni	Mar. 2022(4)
Camilla Spirit	5,479	2010	100%	Time-charter	Mitsui	Jan. 2022(4)
Unikum Spirit	12,022	2011	100%	Spot	Spot market	—
Vision Spirit	12,022	2011	100%	Spot	Spot market	—
Equity-Accounted
Brussels	35,454	1997	50%	Held for sale
Eupen	38,961	1999	50%	Time-charter	An international energy company	Aug. 2022(2)
Bastogne	35,229	2002	50%	Time-charter	An international energy company	Dec. 2022(1)
Antwerpen	35,223	2005	50% – Chartered-in	Time-charter	An international energy company	Oct. 2023(2)
Libramont	38,455	2006	50%	Time-charter	An international fertilizer company	May 2026
Sombeke	38,447	2006	50%	Time-charter	An international fertilizer company	Jun. 2027
Sylvie	35,217	2007	50% – Chartered-in	Time-charter	An international fertilizer company	Oct. 2022(2)
BW Tokyo	83,300	2009	50% – Chartered-in	Spot	In LPG Pool
Waasmunster	38,115	2014	50%	Time-charter	An international energy company	Oct. 2022
Waregem	38,115	2014	50%	Time-charter	An international fertilizer company	Jan. 2023(2)
Warinsart	38,115	2014	50%	Time-charter	An international energy company	Feb. 2023(2)
Warisoulx	38,115	2015	50%	Time-charter	An international trading company	Jul. 2022(1)
Kaprijke	38,500	2015	50%	Time-charter	An international fertilizer company	Dec. 2025
Knokke	38,500	2016	50%	Time-charter	An international energy company	Apr. 2023(2)

Vessel Capacity Delivery Our Ownership Contract Type Charterer
Expiration of
Charter
(cubic meters)
Operating LPG carriers:
Consolidated
Pan Spirit 10,000
2009 99% Spot Spot market —
Cathinka Spirit 10,000
2009 99% Spot Spot market —
Camilla Spirit 10,000
2011 99% Spot Spot market —
Unikum Spirit 12,000
2011 99% Spot Spot market —
Vision Spirit 12,000
2011 99% Spot Spot market —
Napa Spirit 10,200
2003 99% Spot Spot market —
Sonoma Spirit 8,000
2003 99% Spot Spot market —
Equity-Accounted
Temse 12,030
1995
50% –
Capital lease
Time-charter An international fertilizer company Jan. 2020
Libramont 38,455
2006 50% Time-charter An international fertilizer company May 2026
Sombeke 38,447
2006 50% Time-charter An international fertilizer company Jun. 2027
Touraine 39,270
1996 50% Time-charter An international energy company
Nov. 2019⁽²⁾
Bastogne 35,229
2002 50% Time-charter An international energy company Jun. 2019
Eupen 38,961
1999 50% Spot Spot market —
Brussels 35,454
1997 50% Time-charter An international energy company Jul. 2019
Antwerpen 35,223
2005 50% – Chartered-in Time-charter An international energy company Mar. 2019
BW Tokyo 83,270
2009 50% – Chartered-in Time-charter An international trading company Mar. 2019
Waregem 38,189
2014 50% Time-charter An international trading company
Nov. 2019⁽³⁾
Warinsart 38,213
2014 50% Time-charter An international energy company
Feb. 2020⁽³⁾
Waasmunster 38,245
2014 50% Time-charter An international energy company
Aug. 2019⁽³⁾
Warisoulx 38,000
2015 50% Time-charter An international trading company May 2019
Kaprijke 38,000
2015 50% Time-charter An international fertilizer company Dec. 2025
Knokke 38,000
2016 50% Time-charter An international energy company
Mar. 2021⁽⁴⁾
Kontich 38,000
2016 50% Time-charter An international energy company
Jul. 2021⁽⁴⁾
Kortrijk 38,000
2016 50% Time-charter An international trading company Dec. 2019
Kallo 38,000
2017
50% – Capital lease⁽¹⁾
Time-charter An international energy company
Jan. 2020⁽³⁾

Kontich

38,500

2016

50%

Time-charter

An international energy company

Aug. 2022

Kortrijk

38,500

2016

50%

Time-charter

An international trading company

Jan. 2025(2)

Kallo

38,500

2017

50% – Finance lease(3)

Time-charter

An international fertilizer company

Mar. 2022(5)

Kruibeke

38,500

2017

50% – Finance lease(3)

Time-charter

An international trading company

Feb. 2023

Kapellen

38,500

2018

50% – Finance lease(3)

Time-charter

An international trading company

Dec. 2022(1)

Koksijde

38,500

2018

50% – Finance lease(3)

Time-charter

An international energy company

Dec. 2022

Wepion

38,200

2018

50%

Time-charter

An international fertilizer company

Dec. 2022(2)

898,667

(1)The charterer has one option to extend the term for an additional six months.

(2)The charterer has one option to extend the term for an additional one year.

(3)Exmar LPG BVBA, in which we have a 50% ownership interest, is the lessee for these obligations related to finance leases and will be required to purchase the vessel after the end of the lease terms for a fixed price.

Kruibeke 38,000
2017
50% – Capital lease⁽¹⁾
Time-charter An international trading company
Feb. 2020⁽³⁾
Kapellen 38,000
2018
50% – Capital lease⁽¹⁾
Time-charter An international energy company
Sep. 2019⁽²⁾
Koksijde 38,000
2018
50% – Capital lease⁽¹⁾
Time-charter An international trading company Jul. 2019
Wepion 38,000
2018 50% Time-charter An international energy company
Nov. 2020⁽³⁾
923,186

(4)Upon expiration of the time-charter contract, the vessel returned to the spot market.

(5)In March 2022, we secured a three-year, time-charter contract with one option to extend the term for an additional one year.


~~(1)~~	Exmar LPG BVBA, in which we have a 50% ownership interest, is the lessee for these obligations related to capital leases and will be required to purchase the vessel after the end of the lease terms for a fixed price.


~~(2)~~	~~The charterer has one option to extend the term for an additional six months.~~


~~(3)~~	~~The charterer has one option to extend the term for an additional one year.~~


~~(4)~~	~~The charterer has one option to extend the term for an additional five years.~~

No LPG customer accounted for 10% or more of our consolidated voyage revenues during any of ~~2018, 2017,~~2021, 2020 or ~~2016.~~2019. The loss of any significant customer or a substantial decline in the amount of services requested by a significant customer could harm our business, financial condition and results of operations.

~~Conventional Tanker Segment~~

~~As of December 31, 2018, our conventional tankers had an average age of approximately 12 years, compared to the average age for the world conventional tanker fleet of approximately 10 years~~. ~~New conventional tankers generally have an expected lifespan of approximately 25 to 30 years, based on estimated hull fatigue life.~~

~~The following table provides additional information about our conventional oil tankers in our operating fleet as of December 31, 2018.~~

Tanker⁽¹⁾
Capacity Delivery Our Ownership Contract Type Charterer
Expiration of
Charter
(dwt)
Operating Conventional tankers:
Toledo Spirit 159,342
2005
100% – Capital
lease⁽²⁾
Time-charter CEPSA
Jan. 2019⁽²⁾
Alexander Spirit 40,083
2007 100% Time-charter Caltex Australian Petroleum Pty Ltd. Sep. 2019
199,425


~~(1)~~	~~The~~ ~~Toledo Spirit~~ ~~is a Suezmax tanker, and the~~ ~~Alexander Spirit~~ ~~is a Handymax tanker.~~

~~(2)~~

~~We were the lessee for this obligation related to capital lease. The charterer, Compania Espanole de Petroleos, S.A. (or~~ ~~CEPSA), who is also the owner, had the right to terminate the time-charter contract 13 years after the original delivery date without penalty. CEPSA sold the~~ ~~Toledo Spirit~~ ~~in January 2019 and the associated charter contract with CEPSA concurrently terminated. Please read “Item 18 – Financial Statements: Note 5a – Chartered-in Vessels.”~~

No conventional tanker customer accounted for 10% or more of our consolidated voyage revenues during 2018, 2017, and 2016. The loss of any significant customer or a substantial decline in the amount of services requested by a significant customer could harm our business, financial condition and results of operations.

Business Strategies

Our primary long-term business objective is to expand our core businesses globally in order to service our customers' growing gas transportation requirements which we believe will add long-term value for our unitholders. We may evaluate and explore adjacent liquified gas markets and maritime opportunities. Our operating cash flows remain largely stable and growing, supported by a large and well-diversified portfolio of fee-based contracts with high-quality counterparties.

We intend to achieve our long-term business objective, as stated above, by executing the following strategies:

•Provide superior customer service by maintaining high reliability, safety, environmental and quality standards. LNG and LPG project operators seek LNG and LPG transportation partners that have a reputation for high reliability, safety, environmental and quality

standards. We seek to leverage our ~~own and Teekay Corporation’s~~ operational expertise to create a sustainable competitive advantage with consistent delivery of superior customer service.

•Expand our LNG and LPG business globally. We seek to capitalize on opportunities emerging from the global expansion of the LNG and LPG sectors by selectively targeting:

•projects that involve medium to long-term, fixed-rate charters;

•cost-effective LNG and LPG newbuilding contracts;

•joint ventures and partnerships with companies that may provide increased access to opportunities in attractive LNG and LPG importing and exporting geographic regions;

•strategic vessel and business acquisitions; and

•specialized projects in adjacent areas of the business.

•Evaluate and explore adjacent liquified gas markets and maritime opportunities. To continue the growth of our Company, we may evaluate and seek to enter into specialized projects in adjacent areas of our business, including ~~floating storage units.~~other liquified gas markets and maritime opportunities.

Safety, Management of Ship Operations and Administration

~~Teekay Corporation, through its subsidiaries, assists us in managing~~We internally manage our ship operations, other than the vessels owned or chartered-in by our joint ventures with Exmar, which are commercially and technically managed by Exmar, our seven multi-gas carriers, which are technically and commercially managed by external ship managers, two of the Angola LNG Carriers, which are commercially and technically managed by NYK Energy Transport (Atlantic) Ltd. and five of our LNG carriers, which are chartered-out to Shell Tankers (Singapore) Private Ltd. and technically managed by a subsidiary of Royal Dutch Shell Plc. Safety and ~~environmental compliance~~Environmental Compliance are our top operational priorities. We operate our vessels in a manner intended to protect the safety and health of our

employees, and to minimize the ~~employees,~~impact on the ~~general public~~environment and ~~the environment.~~society. We seek to effectively manage risk in the ~~risks inherent~~organization using a three-tiered approach at an operational, management and corporate level, designed to provide a clear line of sight throughout the organization. All of our operational employees receive training in the use of risk tools and the management system. We also have an approved competency management system in place to ensure our ~~business~~seafarers continue their professional development and are ~~committed~~competent before being promoted to ~~eliminating incidents that threaten the~~more senior roles.

We believe in continuous improvement, which has seen our safety and ~~integrity~~environmental culture develop over a significant time period. Health, Safety and Environmental Program milestones include the roll-out of ~~our vessels, such as groundings, fires, collisions and oil spills. In 2007, Teekay Corporation introduced a behavior-based safety program called “Safety~~the Environmental Leadership Program (2005), Safety in ~~Action” to further enhance the safety culture in our fleet. We are also committed to reducing our emissions and waste generation. In 2008, Teekay Corporation introduced the~~Action (2007), Quality Assurance and Training ~~Officers (or~~ ~~QATO) program to conduct rigorous internal audits of our processes~~Officer Program (2008), Operational Leadership - The Journey (2010), E-Colours (2014), Significant Incident Potential (2015), Navigation Handbook (2016), Risk Tool Handbook (2017), Safety Management System upgrade (2018) and ~~provide~~Fleet Training Officer (FTO) Program (2021).

In addition, the ~~seafarers with onboard training. In 2010, Teekay Corporation introduced a safety leadership program for our employees titled “Operational~~Operational Leadership - The ~~Journey” which~~Journey booklet was revised and relaunched in 2020. The booklet sets out ~~Teekay Corporation's~~our operational expectations ~~the~~and responsibilities ~~of individual~~and contains our safety, environmental and leadership commitments and our Health, Safety, Security and Environmental & Quality Assurance Policy, which is signed by all employees and ~~our commitment to empowering our employees~~empowers them to work safely, to live our vision, and ~~live Teekay Corporation’s vision through a positive and responsible attitude.~~to look after one another.

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

~~Teekay Corporation has achieved certification~~certified under the standards reflected in International Standards Organization’s (or ISO) 9001 for Quality Assurance, ISO 14001 for Environment Management Systems, ~~Occupational Health and Safety Advisory Services 18001~~ISO 45001 for Occupational Health and Safety Management Systems, and the IMO’s International Management Code for the Safe Operation of Ships and Pollution Prevention (or ISM Code) on a fully integrated basis. As part of ~~Teekay Corporation’s~~our compliance with the ISM Code, all of our vessels’ safety management certificates are maintained through ~~ongoing~~annual internal audits performed by our certified internal auditors and ~~intermediate~~periodical external audits performed by the classification society ~~DNV-GL.~~DNV. Subject to satisfactory completion of these internal and external audits, certification is valid for five years.

We produce a publicly available sustainability report which reflects the efforts, achievements, results and challenges faced by us relating to several key related matters, including emissions, climate change, corporate social responsibility, diversity and health, safety environment and quality. We recognize the significance of ESG considerations and in 2020 set an ESG strategy foundation which is intended to direct our efforts and performance in the years ahead. Our ESG strategy is focused on three broad areas: allocating capital to support the global energy transition; operating our existing fleets as safely and efficiently as possible; and further strengthening our ESG profile. Annual targets are set for the organization and are closely monitored.

In addition to our operational experience, ~~Teekay Corporation’s~~our in-house global shore staff ~~performs, through its subsidiaries, the~~provides a full range of technical, commercial and business development services for our LNG ~~LPG~~ and ~~conventional~~LPG operations. The staff also provides administrative support to our operations in finance, accounting and human resources. We believe this arrangement affords a safe, efficient and cost-effective operation. Vessel management services are provided by ~~subsidiaries of Teekay Corporation,~~our teams located in various offices around the world. These include critical vessel management functions such as:

•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 construction of newbuildings, conversions, lay-up and ~~conversions;~~recycling;

•terminal support;

•insurance; and

•financial management services.

These functions are supported by onboard and onshore systems for maintenance, inventory, purchasing and budget management.

In addition, Teekay Corporation’s day-to-day focus on cost control is applied to our operations. In 2003, Teekay Corporation and two other shipping companies established a purchasing cooperation agreement called the TBW Alliance, which leverages the purchasing power of the combined fleets, mainly in such commodity areas as marine lubricants, coatings and chemicals and gases. Through our arrangements with Teekay Corporation, we benefit from this purchasing alliance.

We believe that the generally uniform design of some of our existing and newbuilding vessels and the adoption of common equipment standards provide operational efficiencies, including with respect to crew training and vessel management, equipment operation and repair, and spare parts ordering.

Risk of Loss, Insurance and Risk Management

The operation of any ocean-going vessel, or LNG facility, 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 ~~and transfer/lightering~~ of ~~crude oil, petroleum products,~~ LNG and LPG are subject to the risk of spills and to business interruptions due to political circumstances in foreign countries, hostilities, labor strikes, sanctions and ~~boycotts.~~boycotts, whether relating to us or any of our joint venture partners, suppliers or customers. 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, and other liability 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. In addition, the cost of protection and indemnity insurance significantly increased during 2021.

In our operations, we use ~~Teekay Corporation’s~~ 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 ~~believe that we benefit from Teekay Corporation’s commitment to safety~~have achieved certification under the standards reflected in ISO 9001 for Quality Assurance, ISO 14001 for environment management systems, ISO 45001:2018, and ~~environmental protection because certain of its subsidiaries assist us in managing our vessel operations.~~the IMO’s ISM Code on a fully integrated basis.

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~~): Bureau Veritas, ~~(or~~ BV), Lloyd’s Register of Shipping, the American Bureau of Shipping or ~~DNV-GL.~~DNV.

The applicable classification society certifies that the vessel’s design and build ~~conforms~~conform 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 (e.g. 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 classification society acting on behalf of the flag state to ensure that they meet the requirements of the ISM Code. We also follow an internal process of internal audits undertaken annually at each office and vessel.

We follow a comprehensive ~~inspections~~inspection and audit regime supported by our sea staff, shore-based operational and technical specialists and members of our ~~QATO~~Fleet Training Officer (FTO) program. We typically carry out two internal inspections and one internal audit 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

•our ~~vessel’s~~vessels' 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, LNG and LPG carrier markets and will accelerate the scrapping or phasing out of older vessels throughout these markets.

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

Regulations

General

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

International Maritime Organization ~~(or IMO)~~

The IMO is the United Nations’ agency for maritime safety and prevention of pollution. 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~~gas carriers 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~~ (or the IGC Code) and International Code for Ships operating in Polar Waters (or the Polar Code). 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 the 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 Code, IGC Code and ~~the IGC~~Polar Code 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 ~~United States Coast Guard (or~~ USCG) and ~~European Union~~EU authorities have indicated that vessels not in compliance with the ISM Code will be prohibited from trading in U.S. and ~~European Union~~EU ports. The ISM Code requires vessel operators to obtain a safety management certification for each vessel they manage, evidencing the ~~ship owner’s~~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~~a safety management certificate on 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 compliant, and each of the shipbuilding contracts for our LNG carrier newbuildings and for the LPG carrier newbuildings requires IGC Code compliance prior to delivery. Amendments to the IGC Code, aligning wheelhouse window fire-rating requirements with those in SOLAS chapter II-2, were adopted in 2016 and ~~are expected to enter into force~~became effective on January 1, 2020.

~~In addition, the International Code of Safety for Ships using Gases or other Low-flashpoint Fuels (or the~~ ~~IGF Code~~), which entered into force on January 1, 2017, is mandatory for ships fueled by gases or other low-flashpoint fuels, and sets out mandatory provisions for the arrangement, installation, control and monitoring of machinery, equipment and systems using low-flashpoint fuel.

Annex VI of the IMO’s International Convention for the Prevention of Pollution from Ships (or MARPOL) (or Annex VI) sets limits on sulfur oxide (or SOx) and nitrogen oxide (or NOx) 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 "emission control areas" (or ECAs) to be established with more stringent controls on sulfur emissions.

Annex VI provides for a three-tier reduction in NOx emissions from marine diesel engines, with the final tier (or Tier III) to apply to engines installed on vessels constructed on or after January 1, 2016 and which operate in the North American ECA or the U.S. Caribbean Sea ECA as well as ECAs designated in the future by the IMO. Tier III limits are 80% below Tier I, and these cannot be achieved without additional means such as Selective Catalytic Reduction. In October 2016 the IMO’s Marine Environment Protection Committee (or MEPC) approved the designation of the North Sea (including the English Channel) and the Baltic Sea as ECAs for NOx emissions; these ECAs and the related amendments to Annex VI of MARPOL (with some exceptions) entered into effect on January 1, 2019. This requirement will be applicable for new ships constructed on or after January 1, 2021 if they visit the Baltic or the North Sea (including the English Channel) and requires the future trading area of a ship to be assessed at the contract stage. There are exemption provisions to allow ships with only Tier II engines, to navigate in a NOx Tier III ECA if the ship is departing from a shipyard where the ship is newly built or visiting a shipyard for conversion/repair/maintenance without loading/unloading cargoes.

Effective January 1, 2020, Annex VI imposes a global limit for ~~sulphur~~sulfur in fuel oil used on board ships of 0.50% m/m (mass by mass), regardless of whether a ship is operating outside a designated ECA. The ECA limit of 0.10% will still apply, as will any applicable local regulations. Effective March 1, 2020, the carriage of non-compliant fuel is prohibited. To comply with ~~this new standard,~~the 2020 global sulfur limit for fuel, ships ~~may~~must utilize different fuels containing low or ~~zero sulphur~~very low sulfur (e.g. ~~LNG~~, low sulfur fuel oil, very low sulfur fuel oil, low sulfur marine gas oil (or LSMGO), biofuels or ~~biofuels)~~other compliant fuels such as LNG), or utilize exhaust gas cleaning systems, known as “scrubbers.” Amendments to the information to be included in bunker delivery notes relating to the supply of marine fuel oil to ships fitted with alternative mechanisms to address ~~sulphur~~sulfur emission requirements (e.g. scrubbers) became effective January 1, 2019. At present, we have not installed any scrubbers on our existing gas fleet (nor do we have plans to). All of our LNG vessels are in compliance with 2020 global sulfur fuel regulations. Our fuel strategy is to use LNG as primary fuel (except the Q-Flex LNG vessels) and ~~we intend to switch over to burning low sulphur fuel from January 1, 2020.~~compliance fuels as secondary fuel.

As of March 1, 2018, amendments to Annex VI impose new requirements on ships of 5,000 gross tonnage and above to collect fuel oil consumption data for ships, as well as certain other data including proxies for transport ~~work;~~work. Amendments to MARPOL Annex VI that makes the data collection system for fuel oil consumption of ships mandatory were adopted at the 70th session of the MEPC held in October 2016 and entered into force on March 1, 2018. The amendments ~~also set forth criteria~~require operators to update the vessels' Ship Energy Efficiency Management Plan (or SEEMP) to include a part II describing the ship specific methodology that will be used for ~~determining whether cargo residues are harmful~~collecting and measuring data for fuel oil consumption, distance travelled, hours underway, ensuring data quality is maintained and the processes that will be used to report the data to the ~~marine environment and a new Garbage Record Book format~~Administration. This has been verified as compliant on all ships for calendar year 2020. The verification of data collected for the 2021 calendar year is ongoing.

IMO regulations required that, as of January 1, 2015, all vessels operating within ECAs worldwide recognized under MARPOL Annex VI must comply with 0.1% sulfur requirements. In addition, LSMGO is more expensive than HFO, and this impacts the costs of operations. ~~Our exposure~~In general, our charterers are required under our contracts to bear the cost of fuel. However, on occasion we may be exposed to increased ~~cost is~~fuel costs 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 global cap on the sulfur content of fuel oil is currently 3.5%, to be reduced to 0.5% by January 1, 2020.~~

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

IMO Guidance for countering acts of piracy and armed robbery is published by the IMO’s Maritime Safety Committee (or MSC). MSC.1/Circ.1339 (Piracy and armed robbery against ships in waters off the coast of Somalia) outlines Best Management Practices (or BMP) for protection against Somalia based Piracy. Specifically, MSC.1/Circ.1339 provides guidance to Shipowners and ship operators, shipmasters and crews on preventing and suppressing acts of piracy and armed robbery and was adopted by the IMO through Resolution MSC.324(89). The BMP is a joint industry publication by BIMCO, ICS, IGP&I Clubs, INTERTANKO and OCIMF VIQ Version 7 as the latest. Our fleet follows the guidance within BMP 5 when transiting in other regions with recognized threat levels for piracy and armed robbery, including West Africa.

The IMO's Ballast Water Management Convention entered into force on September 8, 2017. ~~As of December 31, 2018, there were 79 contracting states to the convention.~~ The convention stipulates two standards for discharged ballast water. The D-1 standard covers ballast water exchange while the D-2 standard covers ballast water treatment. The convention requires the implementation of either the D-1 or D-2 standard. There will be a transitional period from the entry into force to the ~~International Oil Pollution Prevention (or~~ IOPP) renewal survey in which ballast water exchange (reg. D-1) can be employed. The IMO’s ~~Marine Environment Protection Committee (or~~ MEPC) agreed to a compromise on the implementation dates for the D-2 discharge standard: ships constructed on or after September 8, 2017 must comply with the D-2 standard upon delivery. Existing ships should be D-2 compliant on the first IOPP renewal following entry into force if the survey is completed on or after September 8, 2019, or a renewal IOPP survey iswas completed on or after September 8, 2014 but prior to September 8, 2017. Ships should be D-2 compliant on the second IOPP renewal survey after September 8, 2017 if the first renewal survey after that date iswas completed prior to September 8, 2019 and if the previous two conditions are not met. Vessels will be required to meet the discharge standard D-2 by installing an approved ~~Ballast Water Management System (or~~ ~~BWMS~~).BWTS. Besides the IMO convention, ships sailing in U.S. waters are required to employ a type-approved ~~BWMS~~BWTS which is compliant with USCG regulations. The USCG has approved a number of ~~BWMS -~~BWTSs both nationally and internationally, out of which Alfa Laval (Sweden), Ocean Saver (Norway), ~~Sunrui (China), Optimarin (Norway), Ecochlor (USA), Erma First (Greece), Hyundai Heavy Industries Co. Ltd. (Korea), Qingdao Headway Technology Co. Ltd. (China),~~Techcross, and ~~JFE Engineering Corporation (Japan), out of which first two makers~~De Nora are under ~~Teekay’ s~~our approved list for retrofit. We estimate that the installation of approved ~~BWMS~~BWTS may cost between $2 million and $3 million per vessel.

Amendments to MARPOL Annex VI that makes the data collection system for fuel oil consumption of ships mandatory were adopted at the 70th session of the MEPC held in October 2016 and entered into force on March 1, 2018. The amendments require operators to update the vessels Ship Energy Efficiency Management Plan (or ~~SEEMP~~) to include a part II describing the ship specific methodology that will be used for collecting and measuring data for fuel oil consumption, distance travelled, hours underway, ensuring data quality is maintained and the processes that will be used to report the data to the Administration. This must be verified as compliant on or before December 31, 2018, with the first data collection period being for the 2019 calendar year. A Confirmation of Compliance will be issued by the administration/registered organization, which must be kept on board the ship.

The IMO has also adopted ~~an International Code for Ships Operating in Polar Waters (~~or thePolar Code) which deals with matters regarding the 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. The Polar Code and related amendments entered into force in January 2017. The Polar Code is mandatory for new vessels built after January 1, 2017. For existing ships, this code will be applicable from the first intermediate or renewal survey, whichever occurs first, beginning on or after January 1, 2018. All our vessels trading in this area are fully compliant with the Polar Code.

MARPOL Annex I also states that oil residue may be discharged directly from the sludge tank to the shore reception facility through standard discharge connections. They may also be discharged to the incinerator or to an auxiliary boiler suitable for burning the oil by means of

a dedicated discharge pump. Amendments to Annex I expand on the requirements for discharge connections and piping to ensure residues are properly disposed of. Annex I is applicable for existing vessels with a first renewal survey beginning on or after January 1, 2017.

Amendments to MARPOL Annex V were adopted at the 70th session of the MEPC held in October 2016 and entered into force on March 1, 2018. The changes include criteria for determining whether cargo residues are harmful to the marine environment and a new Garbage Record Book (or GRB) format with a new garbage category for e-waste. Solid bulk cargo as per regulation VI/1-1.2 of SOLAS, other than grain, shall now be classified as per the criteria in the new Appendix I of MARPOL Annex V, and the shipper shall then declare whether or not the cargo is harmful to the marine environment. A new form of the GRB has been included in Appendix II to MAROL Annex V. The GRB is now divided into two parts: Part I - for all garbage other than cargo residues, applicable to all ships. PART II - for cargo residues only applicable to ships carrying solid bulk cargo. These changes are reflected in the vessels latest revised GRB.

~~MSC 91~~MSC.338(91) adopted amendments to SOLAS Regulation II-2/10 to clarify that a minimum of two-way portable radiotelephone apparatus for each fire party for fire-fighters' communication shall be carried on board. These radio devices shall be of explosion proof type or intrinsically safe type. All existing ships built before July 1, 2014 should comply with this requirement by the first safety equipment survey after July 1, 2018. All new vessels constructed (keel laid) on or after July 1, 2014 must comply with this requirement at the time of delivery. ~~Amendments to SOLAS Regulation II-1/2/-12 on protection against noise. Regulation~~Regulations II-2/1 and II 2/10 on firefighting ~~and new Regulation XI-12-1~~came into force on ~~harmonization of survey periods of cargo~~July 1, 2014. Existing ships ~~not subject~~built before July 1, 2014 were required to ~~the ESP code become effective January~~comply by July 1, ~~2020.~~2019.

As per MSC. 338(91), requirements have been highlighted for audio and visual indicators for breathing apparatus which will alert the user before the volume of the air in the cylinder has been reduced to no less than 200 liters. This applies to ships constructed on or after July 1, 2014. Ships constructed before July 1, 2014 ~~must~~were required to comply no later than July 1, 2019. As of December 31, 2021, all of our vessels are in compliance with these requirements.

Cyber-related risks are operational risks that are appropriately assessed and managed in accordance with the safety management requirements of the ISM Code. Cyber risks are required to be appropriately addressed in our safety management system no later than the first annual verification of ~~the company's~~our Document of Compliance after January 1, 2021. As of July 16, 2021, verification audits of our Document of Compliance have been completed and we are in compliance with IMO Resolution MSC.428(98) requirement for maritime cyber risk management.

The Maritime Labour Convention (or MLC) 2006 was adopted by the International Labour Conference at its 94th (Maritime) Session (2006), establishing minimum working and living conditions for seafarers. The convention entered into force August 20, 2013, with further amendments approved by the International Labour Conference at its 103rd Session (2014). The MLC establishes a single, coherent instrument embodying all up-to-date standards of existing international maritime labour conventions and recommendations, as well as the fundamental principles to be found in other international labour conventions. All of our maritime labour contracts comply with the MLC.

The IMO continues to review and introduce new ~~regulations;~~regulations and as such, it is ~~impossible~~difficult to predict what additional requirements, if any, may be adopted by the IMO and what effect, if any, such regulations might have on our ~~operations.~~operations.

~~European Union~~ ~~(or~~EU)

The EU has adopted legislation 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.

Two regulations that are part of the implementation of the Port State Control Directive, 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 beby a particular shipping company. Those shipping companies that have the most positive safety records are rewarded by subjecting them to fewer inspections, while 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 a Directive requiring the use of low sulfur fuel. Since January 1, 2015, vessels have been 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.~~SOx ECAs. Other jurisdictions have also adopted similar regulations. ~~Since~~

All ships above 5,000 gross tonnage calling EU waters are required to comply with EU-MRV regulations. These regulations came into force on July 1, 2015 and aim to reduce GHG emissions within the EU. It requires ships carrying out maritime transport activities to or from European Economic Area ports to monitor and report information including verified data on their CO2 emissions from January 1, ~~2014, the California Air Resources Board has required vessels to burn fuel~~2018. Data collection takes place on a per voyage basis and started from January 1, 2018. The reported CO2 emissions, together with 0.1% sulfur content or less within 24 nautical miles of California. China also established emission control areas and continues to establish such areas, restricting the maximum sulfur content of the fueladditional data (e.g. cargo, energy efficiency parameters), are to be ~~used~~verified by ~~vessels within those areas,~~independent verifiers and sent to a central database, managed by the European Maritime Safety Agency (or EMSA). Teekay Corporation has signed an agreement with DNV for monitoring, verification and reporting as required by this regulation. We are presently using IMOS/Veslink forms which limits become progressively stricter over time. Since January 1, 2017, all core ports within the three China ECAs (e.g. Tianjin, Qinhuangdao, Tangshan, Huanghua, Shenzhen, Guangzhou, Zhuhai, Shanghai, Ningbo-Zhoushan, Suzhou and Nantong) have implemented the low sulfur bunker requirements. It is anticipated that commencing January 1, 2018 all ports within the three China ECAs will have ~~implemented~~a smooth interface with DNV. The reporting period for the ~~low sulfur bunker requirements.~~2020 calendar year has been completed, and emission reports for the vessels which have carried out EU voyages have been submitted in the THETIS database. Based on emission reports submitted in THETIS, a document of compliance has been issued and is placed on board.

The EU Ship Recycling Regulation entered into force on December 30, 2013. It aims to prevent, reduce and minimize accidents, injuries and other negative effects on human health and the environment when ships are recycled, and the hazardous waste they contain is removed. The legislation applies to all ships flying the flag of an EU country and to vessels with non-EU flags that call at an EU port or anchorage. It sets out responsibilities for ~~ship owners~~shipowners and for recycling facilities both in the EU and in other countries. Each new ship is required to have on board an inventory of the hazardous materials (such as asbestos, lead or mercury) it contains in either its structure or equipment. The use of certain hazardous materials is forbidden. Before a ship is recycled, its owner must provide the company carrying out the work with specific information about the vessel and prepare a ship recycling plan. Recycling may only take place at facilities listed on the EU ‘List of facilities’. ~~In 2014, the Council Decision 2014/241/EU authorized EU countries having ships flying their flag or registered~~

~~under their flag to ratify or to accede to the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships.~~ The EU Ship Recycling Regulation generally entered into force on December 31, 2018, with certain provisions applicable from December 31, 2020. Compliance timelines are as follows: EU-flagged ~~new-buildings~~newbuildings were required to have onboard a verified Inventory of Hazardous Materials (or IHM) with a Statement of Compliance ~~at the latest~~ by December 31, 2018, existing EU-flagged vessels are required to have onboard a verified IHM with a Statement of Compliance ~~at the latest~~ by December 31, 2020, non-EU-flagged vessels calling at EU ports are also required to have onboard a verified IHM with a Statement of Compliance latest by December 31, 2020. We contracted a class-approved HazMat expert company to assist in the preparation of an IHM and obtaining Statements of Compliance for our vessels. The EU Commission adopted a European List of approved ship recycling facilities, as well as four further ~~implementing~~ decisions dealing with certification and other administrative requirements set out in the EU Ship Recycling Regulation.In 2014, the Council Decision 2014/241/EU authorized EU countries having ships flying their flag or registered under their flag to ratify or to accede to the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships. The Hong Kong Convention is not yet ratified.

China

China ~~has also~~had established new ECAs in ~~the~~ Pearl River Delta, ~~the~~ Yangtze River Delta and ~~the~~ Bohai Sea, which came into force from January 1, 2016. The Hainan ECA came into force from January 1, 2019. From January 1, 2019, all the ECAs have merged, and the scope of Domestic Emission Controls Areas (or DECAs) will be extended to 12 nautical miles from the coastline, covering the Chinese mainland territorial coastal areas as well as the Hainan Island territorial coastal waters. From January 1, 2019, all vessels navigating within the Chinese mainland territorial coastal DECAs and at berths will be required to use marine fuel with sulfur content of maximum 0.50% m/m. As per the new regulation, ships can also use alternative methods such as an Exhaust Gas Scrubber, LNG or other clean fuel that reduces the SOx to the same level or lower than the maximum required limits of sulfur when using fossil fuel in the DECA areas or when at berth. All the vessels without an exhaust gas cleaning system entering the emission control area are only permitted to carry and use the compliant fuel oil specified by the new regulation.

From July 1, 2019, vessels engaged on international voyages (except tankers) that are equipped to connect to shore power must use shore power if they berth for more than 3 hours in berths with ~~restrictions limiting~~shore supply capacity in the coastal control areas (for inland river control area, berth for more than 2 hours).

From January 1, 2020, all vessels navigating within the Chinese mainland territorial coastal DECAs should use marine fuel with a maximum 0.5% m/m sulfur cap. All the vessels entering China inland waterway emission control area are to use the fuel oil with sulfur content not exceeding 0.1%

m/m. Any vessel using or carrying non-compliant fuel oil due to ~~exceed 0.5% in such ECAs, with such limit decreasing over time.~~

~~All~~ the key ports within the three China ECAs (e.g. Tianjin, Qinhuangdao, Tangshan, Huanghua, Shenzhen, Guangzhou, Zhuhai, Shanghai, Ningbo-Zhoushan, Suzhou and Nantong) have implemented the low sulfur bunker requirements.

~~Commencing January 1, 2018, ships berthing (excluding one hour after berthing and one hour before departure) at all ports within~~non-availability of compliant fuel oil is to submit a fuel oil non-availability report to the China ~~ECAs are required to use fuel with sulphur contents at or below 0.5%. These limitations applied to the entire period vessels are in port within China ECAs effective January 1, 2019.~~

~~China will complete an assessment~~Maritime Safety Administration (or CMSA) of the ~~effectiveness~~next arrival port before entering waters under the jurisdiction of China.

From March 1, 2020, all vessels entering waters under the jurisdiction of the ~~introduced measures~~People’s Republic of China are prohibited to carry fuel oil of sulfur content exceeding 0.50% m/m on board ships. Any vessel carrying non-compliant fuel oil in the waters under the jurisdiction of China is to:

•discharge the non-compliant fuel oil; or

•as permitted by the ~~end~~CMSA of ~~2019. Based~~calling port, to retain the non-compliant fuel oil on board with a commitment letter stating it will not be used in waters under the ~~results~~jurisdiction of such assessment possible further enforcement of regulations limiting SOx emission in ECA’s may be implemented reducing the sulfphur content to 0.1% for ships in the ECA, extending the boundaries of the ECAs or introducing new control measures.China.

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, LNG and LPG should not be considered hazardous substances under CERCLA, but additives to oil or lubricants used on LNG or LPG carriers might fall within its scope.

Under OPA 90, vessel owners, operators and bareboat charters 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 ~~vessels~~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 USCG evidence of financial responsibility in an amount at least equal to the relevant limitation amount for such vessels under the statute. The USCG 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 USCG. 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 USCG 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 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 USCG, and their tankers are required to operate in compliance with their USCG 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.

All our vessels have USCG approved vessel response plans. In addition, we conduct regular oil spill response drills in accordance with the guidelines set out in OPA 90. The USCG has announced it intends to propose similar regulations requiring certain vessels to prepare response plans for the release of hazardous substances. Similarly, we also have California Vessel Contingency Plans on board vessels which are likely to call ports in State of California.

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 (or the 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” (or VGP) and comply with a range of effluent limitations, best management practices, reporting, inspections and other requirements. The ~~Vessel General Permit~~VGP incorporated USCG 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 dry docking after January 1, 2016, depending on the vessel size. The Vessel Incidental Discharge Act (or VIDA) was signed into law on December 4, 2018 and ~~establishes~~established a new framework for the regulation of vessel incidental discharges under the Clean Water Act. VIDA requires the U.S. EPA to develop performance standards for ~~incidental~~approximately 30 discharges by December 2020 (similar to the discharges in the EPA 2013 VGP). In most cases, the future standards will be at least as stringent as the existing EPA 2013 VGP requirements and ~~requires~~will be technology based. Two years thereafter, the USCG is required to develop ~~regulations within two years~~corresponding implementation, compliance, and enforcement regulations. These may include requirements governing the design, construction, testing, approval, installation and use of devices to achieve the ~~EPA’s promulgation~~EPA national standards of ~~standards.~~performance (or NSPs). Under VIDA, all provisions of the ~~Vessel General Permit~~VGP remain in force and effect as currently written until the USCG regulations are finalized. 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~~VGP and, in some cases, may require vessels to install ballast water treatment technology to meet biological performance standards. Every five years the VGP gets reissued, however the provisions of the 2013 VGP, as currently written, will apply beyond 2018 until the EPA publishes new NSPs and the USCG develops implementing regulations for those NSPs which could take up to four years.

Since January 1, 2014, the California Air Resources Board has required that vessels that burn fuel within 24 nautical miles of California burn fuel in such area with 0.1% sulfur content or less.

Various states in the United States, including California, have implemented additional regulations relating to the environment and operation of vessels. California Biofouling Management Plan requirements are as follows: developing and maintaining a Biofouling Management Plan, developing and maintaining a Biofouling Record Book, mandatory biofouling management of the vessel’s wetted surfaces, mandatory biofouling management for vessels that undergo an extended residency period (e.g. remain in the same location for 45 or more days). All vessel calling at California water were required to submit the "Annual Marine Invasive Reporting Form" by October 1, 2017 and should have CA-Biofouling management plan after a vessel’s first regularly scheduled out-of-water maintenance (e.g. dry dock) after January 1, 2018, or upon delivery on or after January 1, 2018.

New Zealand

New Zealand's Craft Risk Management Standard ~~(or~~ ~~CRMS~~) requirements are based on the IMO's guidelines for the control and management of ships' biofouling to minimize the transfer of invasive aquatic species.

Marine pests and diseases brought in on vessel hulls (or biofouling) are a threat to New Zealand's marine resources. From May 15, 2018, all vessels arriving in New Zealand will need to have a clean hull. Vessels staying up to 20 days and only visiting designated ports (places of first arrival) will be allowed a slight amount of biofouling. Vessels staying longer and visiting other places will only be allowed a slime layer and goose barnacles.

~~Greenhouse Gas~~Republic of Korea

The Korean Ministry of Oceans and Fisheries announced an air quality control program that defines selected South Korean ports and areas as ECAs. The ECAs cover Korea’s five major port areas: Incheon, Pyeongtaek & Dangjin, Yeosu & Gwangyang, Busan and Ulsan. From September 1, 2020, ships at berth or at anchor in the new Korean ECAs must burn fuel with a maximum sulfur content of 0.10%. Ships must switch to compliant fuel within one hour of mooring/anchoring and burn compliant fuel until not more than one hour before departure. From January 1, 2022, the requirements will be expanded, and the 0.10% sulfur limit will apply at all times while operating within the ECAs.

A Vessel Speed Reduction Program has also been introduced as a part of an air quality control program on voluntary compliance basis to certain types of ships (Crude, Chemical and LNG carriers) calling at ports Busan, Ulsan, Yeosu, Gwangyang and Incheon.

India

On October 2, 2019, the Government of India urged its citizens and government agencies to take steps towards phasing out single-use plastics (or SUP). As a result, all shipping participants operating in Indian waters are required to contribute to the Indian government’s goal of phasing out SUPs.

The Directorate General of Shipping, India (or DGS) has mandated certain policies as a result, and in order to comply with these required policies, all cargo vessels are required as of January 31, 2020 to prepare a vessel-specific Ship Execution Plan (or SEP) detailing the inventory of all SUP used on board the vessel and which has not been exempted by DGS. This SEP will be reviewed to determine the prohibition of SUP on the subject vessel.

Vessels will be allowed to use an additional 10% of SUP items in the SEP that have not been prohibited. Amendments to the finalized SEP are discouraged save for material corrections.

Foreign vessels visiting Indian ports are not allowed to use prohibited items while at a place or port in India. However, these items are allowed to be on board provided they are stored at identified locations. SEPs are also required to detail the prevention steps that will be implemented during a vessel’s call at an Indian port to prevent unsanctioned usage of SUPs. This includes the preparation and use of a deck and official log entry identifying all SUP items on board the vessel.

GHG Regulation

In February 2005, the Kyoto Protocol to the United Nations Framework Convention on Climate Change (or the Kyoto Protocol) took effect. Pursuant to the Kyoto Protocol, adopting countries are required to implement national programs to reduce emissions of ~~greenhouse gases.~~GHGs. 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 December 2015 the Paris Agreement ~~(or the~~ ~~Paris Agreement~~) was adopted by a large number of countries at the 21st Session of the Conference of Parties (commonly known as COP 21, a conference of the countries which are parties to the United Nations Framework Convention on Climate Change; the COP is the highest decision-making authority of this organization). The Paris Agreement, which entered into force on November 4, 2016, deals with ~~greenhouse gas~~GHG emission reduction measures and targets from 2020 in order to limit the global temperature increases to well below 2^oCelsius above pre-industrial levels. Although shipping was ultimately not included in the Paris Agreement, it is expected that the adoption of the Paris Agreement may lead to regulatory changes in relation to curbing ~~greenhouse gas~~GHG emissions from shipping.

In July 2011, the IMO adopted regulations imposing technical and operational measures for the reduction of ~~greenhouse gas~~GHG emissions. These new regulations formed a new chapter in MARPOL Annex VI and became effective on January 1, 2013. The new technical and operational measures imposed by these new regulations include the “Energy Efficiency Design Index” (or the EEDI), which is mandatory for newbuilding vessels, and ~~the “Ship Energy Efficiency Management Plan,”~~SEEMP which is mandatory for all vessels. In October 2016, the IMO’s MEPC adopted updated guidelines for the calculation of the EEDI. In October 2014, the IMO’s MEPC agreed in principle to develop a system of data collection regarding fuel consumption of ships. In October 2016, the IMO adopted a mandatory data collection system under which vessels of 5,000 gross tonnage and above are to collect fuel consumption and other data and to report the aggregated data so collected to their flag state at the end of each calendar year. The new requirements entered into force on March 1, 2018.

All vessels are required to submit fuel consumption data to their respective administration/registered organizations for onward submission to the IMO for analysis and to help with ~~decision making~~decision-making on future measures. The amendments require operators to update the vessels SEEMP to include ~~a part II describing~~descriptions of the ~~ship specific~~ship-specific methodology that will be used for collecting and measuring data for fuel oil consumption, distance travelled, hours underway and processes that will be used to report the data to the Administration, in order to ensure data quality is maintained.

The vessels were ~~required to be~~ verified as compliant ~~on or~~ before December 31, 2018, with the first data collection period being for the 2019 calendar year. A Confirmation of Compliance ~~will be~~was issued by the administration/registered organization, which must be kept on board the ship. The IMO also approved a roadmap for the development of a comprehensive IMO strategy on the reduction of ~~greenhouse gas~~GHG emissions from ships with an initial strategy adopted on April 13, 2018 and a revised strategy to be adopted in ~~2023~~.2023. Further, the MEPC adopted two other sets of amendments to MARPOL Annex VI related to carbon intensity regulations. The MEPC agreed on combining the technical and operational measures with an entry into force date on January 1, 2023. The Energy Efficiency Existing Ships Index (or EEXI) will be implemented for existing ships as a technical measure to reduce CO2 emissions. The Carbon Intensity Index will be implemented as an operational carbon intensity measure to benchmark and improve efficiency. Regulations and frameworks are expected to be fully defined at the next MEPC meeting in June 2022. We have calculated the EEXI and Engine Power Limiter (EPL) values for our vessels. Further, we are looking at different ways to optimize the emissions either through the use of low friction paints during docking or by installing energy saving devices on board our vessels, such as Mewis ducts.

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~~GHGs from vessels, and individual countries in the EU may impose additional requirements. The EU has adopted Regulation (EU) 2015/757 on the monitoring, reporting and verification (or MRV) of CO2 emissions from vessels (or the MRV Regulation), which entered into force on July 1, 2015. The MRV Regulation aims to quantify and reduce CO2 emissions from shipping. It lists the requirements on the MRV of carbon dioxide emissions and requires ~~ship owners~~shipowners and operators to annually monitor, report and verify CO2 emissions for vessels larger than 5,000 gross tonnage calling at any EU and EFTA (Norway and Iceland) port (with a few exceptions, such as fish-catching or fish-processing vessels). Data collection takes place on a per voyage basis and started January 1, 2018. The reported CO2 emissions, together with additional data, such as cargo and energy efficiency parameters, are to be verified by independent verifiers and sent to a central inspection database hosted by ~~the European Maritime Safety Agency (or~~ EMSA) to collate all the data applicable to the EU region. Companies responsible for the operation of large ships using EU ports are required to report their CO2 emissions. While the EU was considering a proposal for the inclusion of shipping in the EU Emissions Trading System as from 2021 (in the absence of a comparable system operating under the IMO), it appears that the decision to include shipping may be deferred until 2023.

In the United States, the EPA issued an “endangerment finding” regarding ~~greenhouse gases~~GHGs under the U.S. 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~~GHG 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~~GHG could have a significant financial and operational impact on our business that we cannot predict with certainty at this time.

Many financial institutions that lend to the maritime industry have adopted the Poseidon Principles, which establish a framework for assessing and disclosing the climate alignment of ship finance portfolios. The Poseidon Principles set a benchmark to the banks who fund the maritime sector, which is based on the IMO GHG strategy. IMO has approved an initial GHG strategy in April 2018 to reduce GHG emissions generated from shipping activity, which represents a significant shift in climate ambition for a sector that currently accounts for 2%-3% of global carbon dioxide emissions. As a result, the Poseidon Principles are expected to enable financial institutions to align their ship finance portfolios with responsible environmental behavior and incentivize international shipping’s decarbonization.

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). Procedures are in place to inform the relevant reporting regimes such as Maritime Security Council Horn of Africa, ~~(or~~ ~~MSCHOA~~), the Maritime Domain Awareness for Trade - Gulf of Guinea, ~~(or~~ ~~MDAT-GoG~~), the Information Fusion Center ~~(or~~ ~~IFC~~) whenever our vessels are calling in the Indian Ocean Region, or West Coast of Africa ~~(or~~ ~~WAC~~) or SE Asia ~~high risk~~high-risk areas respectively. In order to mitigate the security risk, security arrangements are required for vessels which travel through these ~~high risk~~high-risk areas.

C. Organizational Structure

Our sole ~~General Partner~~common unitholder is ~~Teekay GP L.L.C., which is a wholly-owned indirect subsidiary of Teekay Corporation (NYSE: TK). Teekay Corporation also owns 31.8% of our outstanding publicly~~-~~traded common units. Teekay Corporation also controls~~Stonepeak and its publicly-listed subsidiary Teekay Tankers Ltd. (NYSE: TNK) and owns 49% of the general partner interest and 13.8% of the outstanding publicly-traded common units of Teekay Offshore Partners L.P. (NYSE: TOO).affiliates.

Please read Exhibit 8.1 to this Annual Report for a list of our subsidiaries as at December 31, ~~2018.~~2021.


D.	~~Property, Plant and Equipment~~

D.Property, Plant and Equipment

Other than our vessels and our 30% interest, through the Bahrain LNG Joint Venture, in an LNG receiving and regasification terminal, ~~under construction,~~ we do not have any material property.

Please see “Item 4 – Information on the ~~Partnership:~~Company: Our Fleet and Our Charters” for a description of our vessels, and “Item 18 – Financial Statements: Note 5 – Chartered-in Vessels" and "Note 10 – Long-Term Debt” for information about major encumbrances against our vessels.


E.	E. Taxation ~~of the Partnership~~

The expected material U.S federal income tax considerations applicable to us changed significantly effective as of January 1, 2019, due to our election to be taxed as a corporation, rather than as a partnership, for U.S. federal income tax purposes. The discussion included herein is with regard to the material U.S. federal income tax considerations that may be relevant to us and our unitholders in 2019 and future years. For a discussion on material U.S. federal income tax considerations during 2018 that may have been relevant to us and our unitholders who were individual citizens or residents of the ~~United States, please read “Item 10. Additional Information – Taxation-United States Tax Consequences” in our Annual Report on Form 20-F for the year ended December 31, 2017.~~Company

United States Taxation

The following is a discussion of the ~~expected~~ material U.S. federal income tax considerations applicable to us effective January 1, 2019. This discussion is based upon ~~the~~ provisions of 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.

Election to be Taxed as a Corporation. We ~~have~~ elected to be taxed as a corporation for U.S. federal income tax purposes effective January 1, 2019. As such, we are subject to U.S. federal income tax on our income to the extent it is from U.S. sources or otherwise is effectively connected with the conduct of a trade or business in the United States as discussed below.

Taxation of Operating Income. We expect that substantially all of our gross income and the gross income of our corporate subsidiaries will be attributable to the transportation of LNG, LPG, ammonia ~~crude oil~~ and related products. For this purpose, gross income attributable to transportation (or Transportation Income) includes income derived from, or in connection with, the use (or hiring or leasing for use) of a vessel to transport cargo, or the performance of services directly related to the use of any vessel to transport cargo, and thus includes ~~both time-charter~~income from time-charters and bareboat ~~charter income.~~charters.

Fifty percent (50%) of Transportation Income that either begins or ends, but that does not both begin and end, in the United States (or U.S. Source International Transportation Gross Income) is considered to be derived from sources within the United States. Transportation Income that both begins and ends in the United States (or U.S. Source Domestic Transportation Gross Income) is considered to be 100% derived from sources within the United States. Transportation Income 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 is not subject to U.S. federal income ~~tax~~.tax.

Based on our current operations and the operations of our subsidiaries, we expect most of our Transportation Income to be from sources outside the United States and not subject to U.S. federal income tax. However, we have earned over ~~$64.5~~$59 million of U.S. Source International Transportation Gross Income annually, and we expect that we will continue to earn an increasing amount of such income in future years. Our U.S. Source International Transportation Gross Income or U.S. Source Domestic Transportation Gross Income is 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, unless the ~~exemption from U.S. taxation under Section 883 of the Code (or the~~ Section 883 Exemption) applies.

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 the 4% gross basis tax described below on its U.S. Source International Transportation Gross Income. The Section 883 Exemption does not apply to U.S. Source Domestic Transportation Gross Income.

We do not believe that we will be able to qualify for the Section 883 Exemption with respect to our tax year ending in 2021 and therefore our U.S. Source International Transportation Gross Income for such taxable year will not be exempt from U.S. federal income taxation. However, with respect to our tax year ending in 2022, we believe the Section 883 Exemption will apply and we will not be taxed on our U.S. Source International Transportation Gross income.

A non-U.S. corporation (including an entity electing to be taxed as a corporation for U.S. federal income tax purposes) 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 Gross Income (or an Equivalent Exemption), (ii) meets one of three ownership tests (or Ownership Tests) 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, with respect to our tax year ending in 2022, our U.S. Source International Transportation Gross Income (including for this purpose, our share of 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 one of the Ownership Tests. With respect to our tax year ending in 2022, we believe that we should satisfy one of the Ownership Tests because more than 50% of the value of our outstanding equity interests is owned, or treated as owned after applying certain attribution rules, for at least half of the number of days in the taxable year by “qualified shareholders” 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 units subsequent to the date of this report will permit us to continue to qualify for the Section 883 exemption.

Net Basis Tax and Branch Profits Tax. If the Section 883 Exemption does not apply, our U.S. Source International Transportation Gross 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 Gross 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 Gross 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 Gross 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 will result in such income being treated as Effectively Connected Income. U.S. Source Domestic Transportation Gross Income generally will be treated as Effectively Connected Income. However, we do not anticipate that a material amount of our income has been, or will be, U.S. Source Domestic Transportation Gross Income.

Any income we earn that is treated as Effectively Connected Income would be subject to U.S. federal corporate income tax ~~(the~~(which statutory rate ~~for 2018 onwards is~~as of the end of 2021 was 21%) 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 recognized up to the amount 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. ~~We believe we were not subject to the 4% Gross Basis Tax in 2018 because we were treated as a parthership for U.S. tax purposes in 2018.~~ If the Section 883 Exemption does not apply ~~in 2019 and future years when we are treated as a corporation for U.S. tax purposes~~ and we are not subject to the net basis and branch profits taxes described above, we will be subject to a 4% U.S. federal income tax on our gross U.S. Source International Transportation Gross Income, without benefit of deductions. IfFor our tax year ending in 2021, we ~~had been treated as a corporation in 2018,~~believe we ~~estimate that, in this event, we would have been~~are subject to ~~less than $1.4 million of~~the 4% Gross Basis Tax. The U.S. federal income tax ~~based~~ on ~~the amount of~~our U.S. Source International Transportation Gross Income was approximately $2.4 million in 2021. For our tax year ending in 2022, we ~~earned for 2018. We~~expect the Section 883 Exemption to be applicable to us. However, if the Section 883 Exemption does not apply, we expect the amount of our liability for U.S. federal income tax on our U.S. Source International Transportation Gross Income to increase in ~~2019~~2022 and subsequent years, based on our expected U.S. Source International Transportation Gross Income. The amount of such tax for which we are liable 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

Because we and our controlled affiliates do not, and we do not expect that we and our controlled affiliates will, conduct business, operations, or transactions in the Republic of the Marshall Islands, neither we nor our controlled affiliates are subject to income, capital gains, profits or other taxation under current Marshall Islands law, other than taxes, fines, or fees due to (i) the incorporation, dissolution, continued existence, merger, domestication (or similar concepts) of legal entities registered in the Republic of the Marshall Islands, (ii) filing certificates (such as certificates of incumbency, merger, or redomiciliation) with the Marshall Islands registrar, (iii) obtaining certificates of good standing from, or certified copies of documents filed with, the Marshall Islands registrar, (iv) compliance with Marshall Islands law concerning vessel ownership, such as tonnage tax, or (v) non-compliance with economic substance regulations or requests made by the Marshall Islands ~~registrar~~Registrar of ~~corporations~~Corporations relating to our books and records and the books and records of our subsidiaries. As a result, distributions by controlled affiliates to us are not subject to Marshall Islands taxation.

Other Taxation

those jurisdictions may change or we or our subsidiaries may enter into new business transactions relating to such jurisdictions, which could affect our or our subsidiaries' tax liability. Please read “Item 18 – Financial Statements: Note 11 – Income Tax.”


~~Item 4A.~~	~~Unresolved Staff Comments~~

Item 4A.Unresolved Staff Comments

Not applicable.


~~Item 5.~~	~~Operating and Financial Review and Prospects~~

Item 5.Operating and Financial Review and Prospects

The following discussion should be read in conjunction with the consolidated financial statements and notes thereto appearing elsewhere in this report. In addition, please refer to Item 5 in our Annual Report on Form 20-F for the year ended December 31, 2020 for our discussion and analysis comparing financial condition and results of operations from 2020 to 2019.

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

Overview

~~Teekay LNG Partners L.P.~~Seapeak LLC is an international provider of marine transportation services focusing on LNG and LPG. Our primary strategy focuses on servicing customers through our fleet of LNG and LPG carriers under medium to long-term, fixed-rate charters. We may evaluate and enter into adjacent liquefied gas markets and maritime opportunities. In executing our strategy, we may engage in vessel or business acquisitions or enter into joint ventures and partnerships with companies that provide increased access to emerging opportunities from global expansion of the LNG and LPG sectors. We seek to leverage the expertise, relationships and reputation of Teekay Corporation and its affiliates to pursue these opportunities in the LNG and LPG sectors and may consider other opportunities to which our competitive strengths are well suited. As of December 31, ~~2018,~~2021, we had a fleet of 4947 LNG carriers ~~(including six LNG carrier newbuildings), 29~~and 28 LPG/multi-gas ~~carriers and two conventional tankers.~~carriers. Our ownership interests in these vessels range from 20% to 100%. In addition to our fleet, we have a 30% ownership interest in an LNG receiving and regasification terminal in ~~Bahrain, which is currently under construction.~~Bahrain.

SIGNIFICANT DEVELOPMENTS IN ~~2018~~2021 AND EARLY ~~2019~~2022

~~Quarterly Distributions~~Stonepeak Transaction

~~We intend~~On October 4, 2021, we (as Teekay LNG Partners L.P.) entered into an agreement and plan of merger (or the Merger Agreement) with the General Partner, an investment vehicle (or Acquiror) managed by Stonepeak, and a wholly-owned subsidiary of Acquiror (or Merger Sub). On January 13, 2022, Stonepeak completed its acquisition of us, with Merger Sub merging with and into us, and with us surviving the merger as a subsidiary of Stonepeak (or the Merger). Pursuant to ~~increase~~the Merger and related transactions collectively constituting the Stonepeak Transaction, (a) each issued and outstanding common unit of ours, including approximately 36.0 million common units owned by Teekay (but excluding any common units owned by us, Acquiror or our ~~quarterly~~or Acquiror's respective wholly-owned subsidiaries), was converted into the right to receive cash ~~distributions on~~in an amount of $17.00 per common unit, (b) Teekay sold to Acquiror all of the outstanding ownership interests in the General Partner for $26.4 million, which price consists of $17.00 for each of the approximately 1.6 million common unit equivalents represented by the economic interest of the General Partner's general partner interest in us and (c) we acquired certain restructured subsidiaries of Teekay that provide, through services agreements, comprehensive managerial, operational and administrative services to us and our subsidiaries and joint ventures. On January 24, 2022, our common units ~~by 36% in 2019, commencing~~were delisted from the New York Stock Exchange (or NYSE). Our Series A and Series B Preferred Units remained outstanding and continued to trade on the NYSE under ticker symbols "SEAL PR A" and "SEAL PR B", respectively, following the Merger.

Board of Director Changes

Concurrently with the ~~distribution for the quarter ended March 31, 2019, as part~~Merger, all members of ~~a balanced capital allocation strategy. Any increase in the level of quarterly distributions is subject to approval by~~ the board of directors of the General Partner resigned and the following individuals were appointed to the Board: James Wyper (Chair), Hajir Naghdy, Blake Dwyer, Barry Curtis and Mark Kremin.

Name Change and Conversion from a Limited Partnership to a Limited Liability Company

Concurrently with the Conversion, we changed our name to Seapeak LLC and changed the ticker symbols for our Series A and Series B preferred units from "TGP PRA" and "TGP PRB" to "SEAL PRA" and "SEAL PRB", respectively.

The Conversion is deemed a continuation of the existence of the Partnership in the form of the Company, as a Marshall Islands limited liability company, with the existence of the Company deemed to have commenced on the date the Partnership commenced its existence. Upon the Conversion, all of the rights, privileges and powers of the Partnership, and all property of and all property and debts due to the Partnership, became vested in the Company and the property of the Company. In addition, all rights of creditors and all liens upon any property of the Partnership were preserved unimpaired and all debts, liabilities and duties of the Partnership automatically attached to the Company.

Pursuant to the Conversion:

•each outstanding common unit of the Partnership was converted into one issued and outstanding, fully paid and non-assessable common unit of the Company;

•each outstanding Series A Preferred Unit and Series B Preferred Unit of the Partnership was converted into one issued and outstanding, fully paid and non-assessable Series A Preferred Unit or Series B Preferred Unit of the Company, as applicable; and

•the general partner ~~(or~~ ~~Board of Directors~~).

~~Common Unit Repurchase Program~~

In December 2018, we announced that our Board of Directors had authorized a common unit repurchase program of up to $100 million of our common units. Common units may be repurchased in the open market or privately-negotiated transactions or otherwise at times and prices considered appropriate by us. The timing of any purchases and the exact number of common units to be purchased under the common unit repurchase program will be dependent on market conditions and other factors.

~~During December 2018 and January 2019, we repurchased 0.3 million and 0.8 million of our common units for $3.7 million and $9.3 million, respectively.~~

~~Change in Tax Structure~~

During the special meeting of common unitholders held on December 18, 2018, the proposal to allow us to elect to be treated as a corporation, instead of a partnership, for U.S. federal income tax purposes, and other proposals included in the related proxy statement, were approved by unitholders. As a result, effective January 1, 2019, the Partnership will be treated as a corporation for U.S. federal income tax purposes and commencing in 2019, common and preferred unitholders will receive Form 1099s instead of Schedule K-1s relating to distributions taxable as dividends. The Partnership will remain a master limited partnership, all other provisions of the Partnership's limited partnership agreement remain in effect.

~~This change to our status for U.S. federal income tax purposes should not result~~interest in the Partnership ~~recognizing~~was converted into 1,555,061 common units of the Company (which number is equal to the notional common units of the Partnership represented by such general partner interest immediately prior to the Conversion) and the Company, as a ~~tax related gain or loss. While some investors may incur~~limited liability company, no longer had a tax gain on conversion, any gain recognized for U.S. tax purposes is expected to result in tax benefits to investors that are expected to reduce the taxable portion of cash distributions paid by us in the future.general partner.

LNG Carrier ~~Newbuildings~~Charter Contracts

~~Consolidated Fleet~~

~~Six of our LNG carrier newbuildings, the~~ ~~Magdala, Myrina, Megara, Bahrain Spirit~~ ~~FSU,~~ ~~Sean Spirit~~ ~~and~~ ~~YamalSpirit~~ ~~delivered in February 2018, May 2018, July 2018, August 2018, December 2018 and January 2019, respectively. Upon delivery, the~~ ~~Magdala~~, ~~Myrina~~ ~~and~~ ~~Megara~~ were sold to third parties and leased back under 10-year bareboat charter contracts with purchase obligations for each respective vessel and concurrently commenced their six, eight and eight-year charter contracts with Royal Dutch Shell Plc (or ~~Shell), respectively. The~~ ~~Bahrain Spirit~~ ~~FSU commenced its 21-year charter contract with the Bahrain LNG Joint Venture in September 2018 and the~~ ~~Sean Spirit~~ ~~commenced its 13-year charter contract (which the charterer has a cancellation option after seven years) with BP Plc in December 2018.~~ In ~~January 2019, the~~ ~~Yamal Spirit~~ ~~LNG carrier newbuilding was delivered and concurrently commenced its 15-year charter time-contract with Yamal Trade Pte. Ltd~~. ~~Upon delivery of the vessel, the Partnership sold and leased back the vessel under a sale-leaseback financing transaction, which the Partnership secured on January 18, 2019.~~

~~Pan Union Joint Venture~~

~~In January 2018, July 2018 and January 2019, the Pan Union Joint Venture took delivery of its second, third and fourth LNG carrier newbuildings, the~~ ~~Pan Americas, Pan Europe~~ ~~and~~ ~~Pan Africa,~~ ~~respectively. Upon delivery, the vessels commenced their 20-year charter contracts with Shell. We have ownership interest in these vessels ranging from 20% to 30% through the Pan Union Joint Venture.~~

~~Yamal LNG Joint Venture~~

~~In January 2018, the Yamal LNG Joint Venture took delivery of its first ARC7 LNG carrier newbuilding, the~~ ~~Eduard Toll.~~ ~~In September 2018, the Yamal LNG Joint Venture took delivery of its second ARC7 LNG carrier newbuilding,~~ ~~Rudolf Samoylovich,~~ ~~earlier than the scheduled~~ November 2018 delivery date to service the project’s second LNG train. Upon delivery, the vessels commenced their 28-year and 27-year charter contracts with Yamal Trade Pte, respectively. Ltd. The Yamal LNG Joint Venture currently has four remaining ARC7 LNG carrier newbuildings that are scheduled for delivery in 2019. The Yamal LNG Joint Venture has secured financing in place for its four remaining ARC7 LNG carrier newbuildings.

~~Excelsior Joint Venture~~

In January 2018, we sold our 50% ownership interest in the Excelsior Joint Venture to a third party for gross proceeds of approximately $54 million. We recognized a gain on the sale of our ownership interest of $5.6 million, which was recorded in equity income for the year ended December 31, 2018.

~~Re-chartering Activities~~

~~In March 2018, upon its scheduled redelivery to us from Teekay Corporation, we re-chartered the~~ ~~Polar Spirit~~ LNG carrier to an Asian-based energy company for a period of approximately three months and then subsequently secured employment for the vessel beginning in July 2018 for nine months with a subsidiary of Petroliam Nasional Berhad (or ~~Petronas). In addition,~~2021, we secured a ~~four-year~~three-year, fixed-rate charter contract for the ~~Arctic~~Seapeak Vancouver (formerly Torben Spirit) LNG carrier, ~~also~~which commenced in March 2022.

In April 2021, we secured a one-year, fixed-rate charter contract for the Oak Spirit LNG carrier, which commenced in August 2021. Subsequently, in January 2022, we secured a ten-year, fixed-rate charter contract, which is expected to commence once the vessel redelivers from its current contract in August 2022.

In March 2021, we secured a one-year, spot market-linked charter contract with a ~~subsidiary of Petronas, which commenced immediately upon its scheduled redelivery from Teekay Corporation to us in May 2018. In May 2018, we agreed to a six-month charter~~one-year extension ~~of the~~ ~~Torben Spirit~~ ~~LNG carrier to December 2018~~

~~with a major energy company, which was further extended for an additional three years from the six-month extension that ended in December 2018.~~

~~Teekay Nakilat Capital Lease~~

We own a 70% interest in the Teekay Nakilat Joint Venture, which wholly owns a subsidiary that was the lessee under three separate 30-year capital lease arrangements with a third party for three LNG carriers (or the ~~RasGas II LNG Carriers~~). Under the terms of the leases, the lessor claimed tax depreciation on the capital expenditures it incurred to acquire these vessels and paid the Teekay Nakilat Joint Venture as lessee an upfront benefit of $60.9 million at the lease inception. As is typical in these leasing arrangements, tax and change of law risks were assumed by the lessee. As described in "Item 18 - Financial Statements: Note 14b - Commitments and Contingencies," during the year ended December 31, 2018, the lessor made a determination that additional rentals were due under the leases following a challenge by the UK taxing authority and the Teekay Nakilat Joint Venture paid $63 million to the lessor, at foreign exchange rates at the dates of payment, to satisfy this tax indemnification liability in full. Of this amount, $53 million was expensed in other expense in our consolidated statements of income for the year ended December 31, 2018, which was in addition to the $12.7 million tax indemnification guarantee recorded as at December 31, 2017, with the remaining difference relating to foreign currency exchange gain.

~~LPG Carrier Newbuildings~~

~~In March, May and July 2018 our 50%-owned Exmar LPG Joint Venture, took delivery of its seventh, eighth and ninth LPG carrier newbuildings in the past four years, the~~ ~~Kapellen~~, ~~Koksijde~~ ~~and~~ ~~Wepion, respectively. The~~ ~~Kapellen, Koksijde~~ ~~and~~ ~~Wepion~~ ~~are on short-term charter contracts. The~~ ~~Kapellen~~ ~~and~~ ~~Koksijde~~ ~~were financed through sale-leaseback financing transactions and in July 2018 the Exmar LPG Joint Venture completed a three-year, $35 million debt financing for the~~ ~~Wepion~~.

~~Conventional Tankers~~

~~In February 2018 and January 2019, CEPSA, the charterer and owner of our capital leased vessels, the~~ ~~Teide Spirit~~ ~~and~~ ~~Toledo Spirit,~~ sold these vessels to third parties. As a result of these sales, we returned the vessels to CEPSA and the full amount of the associated obligations related to the capital lease were concurrently extinguished. In addition, we incurred associated seafarer severance payments in 2018 of approximately $1.8 million upon the sale of the ~~Teide Spirit~~ ~~and approximately $1.8 million in 2019 for the sale of the~~ ~~Toledo Spirit~~.

~~On October 9, 2018, we sold the~~ ~~African Spirit~~ ~~Suezmax tanker for net proceeds of $12.8 million. On December 5, 2018, we sold the~~ ~~European Spirit~~ Suezmax tanker for net proceeds of $15.7 million. During 2018, prior to the sale of these vessels, we recorded further aggregate write-downs on these two Suezmax tankers totaling $7.9 million (December 31, 2017 – $25.1 million).

~~Bond Issuance and Refinancings~~

In July 2018, we refinanced our 106.8 million Euro-denominated debt facility maturing in 2018 with a new EUR 100 million debt facility maturing in 2024, which is collateralized by a first-priority mortgage on one of our LNG carriers, the ~~Madrid Spirit~~. In August 2018, we issued, in the Norwegian bond market, NOK 850 million in senior unsecured bonds that mature in August 2023. The aggregate principal amount of the bonds was equivalent to $102.0 million and all interest and principal payments have been swapped into U.S. Dollarsoption at a fixed ~~interest~~ rate ~~of 7.89%. We used~~for the ~~net proceeds from the bond offering to repay NOK 900 million~~Creole Spirit LNG carrier, which commenced in senior unsecured bonds that matured in September 2018 and for general corporate purposes. In November 2018, we refinanced our $190 million revolving credit facility, which was scheduled to mature in November 2018, with a new $225 million revolving credit facility maturing in November 2020 at an interest rate of LIBOR plus 1.40%. In December 2018, we refinanced our $100 million facility relating to the ~~Bahrain Spirit~~ ~~FSU by completing a $109 million guaranteed private placement bond maturing in August 2030 at a fixed interest rate of 4.41%.~~March 2021. In January ~~2019, we refinanced our $106 million debt facility relating to~~2022, the ~~Sean Spirit~~ ~~by issuing a $106 million bond maturing in December 2030 at a fixed interest rate of 4.71%.~~charterer exercised its one-year extension option.

~~Equity-Accounted Joint Venture's Financings and Refinancings~~

In September 2018, the Teekay LNG-Marubeni Joint Venture completed the refinancing of its existing $306.5 million U.S. Dollar-denominated term loan which was scheduled to mature in September 2019 with a new $306.5 million U.S. Dollar-denominated loan agreement maturing in December 2023 at an interest rate of LIBOR plus margins ranging from 1.00% to 2.25%. The loan is collateralized by first-priority statutory mortgages over the ~~Marib Spirit~~, ~~Arwa Spirit~~, ~~Methane Spirit~~ ~~and~~ ~~Magellan Spirit~~ LNG carriers, first priority pledges or charges of all the issued shares of the respective vessel owning subsidiaries and is guaranteed by us and Marubeni Corporation on a several basis. In March 2019, the Excalibur Joint Venture amended its $60 million debt facility which extended the loan maturity from November 2019 to December 2021 and lowered the cost of financing.

~~Charter Contracts for~~ MALT LNG Carriers Charter Contracts

Two of the six ~~MALT~~ LNG Carriers in our ~~52%-owned Teekay LNG-Marubeni~~MALT Joint Venture, the Arwa Spirit andMarib Spirit~~and~~ ~~Arwa Spirit~~, are under long-term charters expiring in 2029 with ~~YLNG.~~YLNG, a consortium led by Total SA. Due to the political ~~unrest~~situation in Yemen, YLNG decided to temporarily close operation of its LNG plant in Yemen in 2015. As a result, commencing January 1, 2016, the ~~Teekay LNG-Marubeni~~MALT Joint Venture agreed to successive deferral arrangements with YLNG pursuant to which a portion of the charter payments were deferred. ~~Concurrent~~Concurrently with the ~~anticipated expiry~~expiration of the ~~most current~~ deferral arrangement, ~~which is expected to occur within the first half of~~in April 2019, the ~~Teekay LNG-Marubeni~~MALT Joint Venture ~~intends to enter~~entered into a ~~further~~suspension agreement with YLNG pursuant to which the ~~Teekay LNG-Marubeni~~MALT Joint Venture and YLNG ~~will~~agreed to suspend the two charter contracts for a period of up to three ~~years.~~years from the date of the agreement. In January 2022, the MALT Joint Venture entered into the Second Suspension Agreement with YLNG to further extend the charter deferral period for up to three additional years until April 2025. Should the LNG plant in Yemen ~~resumes~~resume operations during ~~such suspended~~the term ~~it is intended that~~of the Second Suspension Agreement, YLNG will be required to repay the applicable deferred amounts plus interest over a period of installments. However, ~~we make~~there are no ~~assurance whether~~assurances if or when the LNG plant will resume operations and, accordingly, if YLNG will be able to repay all or any portion of the deferred amounts. ~~Our proportionate share~~Pursuant to the Second Suspension Agreement, the MALT Joint Venture is permitted to directly charter the Arwa Spirit and Marib Spirit for its own account to third parties.

In January 2022, the MALT Joint Venture secured three-year, fixed-rate charter contracts for the Arwa Spirit and Magellan Spirit, which are expected to commence in May 2022 and June 2022, respectively. In March 2021, the current charterer of the ~~estimated impact of the charter payment deferral for 2019 compared to the original charter rates earned prior to~~

~~January 1, 2016 is estimated to be a reduction to equity income ranging from $7 million to $8 million per quarter, which we expect will be partially offset by sub-chartering employment for the~~ ~~Marib Spirit~~ ~~and~~ Arwa Spirit ~~in 2019.~~

~~In September 2018, the Teekay LNG-Marubeni Joint Venture agreed~~exercised its one-year extension option to extend that charter ~~its LNG carrier, the~~ ~~Magellan Spirit,~~ contract to ~~us for two years~~May 2022 at a fixed rate.

In ~~turn,~~October 2021, the charterer of the Marib Spirit exercised its one-year option to extend the charter contract at a fixed-rate, effective February 2022.

In April 2021, the Methane Spirit commenced a two-year, fixed-rate charter contract, with a one-year extension option.

Multi-gas Carrier Vessel Sale

In November 2021, we ~~will charter~~agreed to sell the ~~Magellan~~Sonoma Spirit multi-gas carrier for net proceeds of $10.0 million. The vessel is expected to be delivered to its buyer between May and July of 2022.

Novel Coronavirus (COVID-19) Pandemic

Although global demand for LNG and LPG has remained relatively stable, the COVID-19 global pandemic may result in reduced demand for LNG and LPG in the ~~spot market~~future. As our business primarily is the transportation of LNG and LPG on behalf of our customers, any significant decrease in demand for the cargo we transport could adversely affect demand for our vessels and services. However, as our business model is to employ our vessels primarily on long-term, fee-based charter contracts, we do not expect to experience any significant near-term impact on our results of operations or ~~secure~~financial condition absent, among other things, customer defaults or crew health issues.

For the year ended December 31, 2021, we did not experience any material business interruptions or material negative impact on our cash flows as a ~~short-term charter for this vessel. The~~ ~~Magellan Spirit~~ ~~was employed on a charter contract until March 21, 2019 at a charter rate that was significantly higher than the charter-in rate. As~~result of the ~~completion~~COVID-19 global pandemic. However, the pandemic has been a contributing factor to (a) the non-cash $51.0 million write-down of ~~the~~ ~~Magellan Spirit's~~ ~~charter contract in March 21, 2019, we have been in discussions on securing a new charter contract for this vessel.~~

~~Commercial Management Agreement for Multi-gas Vessels~~

~~On February 25, 2019, we entered into a commercial management agreement (or~~ ~~CMA) with a third-party commercial manager (or the~~ ~~Manager) whereby the Manager agreed to commercially manage and employ~~ our seven multi-gas vessels during the year ended 2020 (as described in "Item 18 – Financial Statements: Note 19a – Write-down of Vessels"), and (b) certain logistical challenges relating to crew changes across our fleet. We continue to monitor the potential impact of the COVID-19 global pandemic on us and our industry, including counterparty risk associated with ~~such transition to occur over a period between February 2019~~our vessels under contract and ~~April 2019.~~the impact on vessel impairments. We have also introduced a number of measures to protect the health and safety of the crews on our vessels and our onshore staff. Additionally, we have been proactive in providing our crew access to vaccines, with approximately 90% of our crew vaccinated against COVID-19.

Effects of the COVID-19 global pandemic may include, among others: deterioration of worldwide, regional or national economic conditions and activity and of demand for LNG and LPG; operational disruptions to us or our customers due to worker health risks and the effects of regulations, directives or practices implemented in response to the pandemic (such as travel restrictions for individuals and vessels and quarantining and physical distancing); potential delays in (a) the loading and discharging of cargo on or from our vessels, (b) vessel inspections and related certifications by class societies, customers or government agencies, (c) maintenance, modifications or repairs to, or drydocking of, our existing vessels due to worker health or other business disruptions, and (d) the timing of crew changes; reduced cash flow and financial condition, including potential liquidity constraints; potential reduced access to capital as a result of any credit tightening generally or due to declines in global financial markets; potential reduced ability to ~~withdraw~~opportunistically sell any of our vessels ~~from~~on the ~~Manager at any time subject to the requirements provided~~second-hand market, either as a result of a lack of buyers or a general decline in the ~~CMA.~~value of second-hand vessels; potential decreases in the market values of our vessels and any related impairment charges or breaches relating to vessel-to-loan financial covenants; potential disruptions, delays or cancellations in the construction of new LNG projects (including production, liquefaction, regasification, storage and distribution facilities), which could reduce our future growth opportunities; and potential deterioration in the financial condition and prospects of our customers or business partners.

Given the dynamic nature of the pandemic, including the development of variants of the virus and the levels of effectiveness and delivery of vaccines and other actions to contain or treat the impact of the virus, the duration of any potential business disruption and the related financial impact, and the effects on us and our suppliers, customers and industry, cannot be reasonably estimated at this time, and could materially affect our business, results of operations and financial condition. Please read "Item 3 - Risk Factors" of this Annual Report for more details on potential effects of the coronavirus on our business.

Russian Invasion of Ukraine

Russia’s invasion of Ukraine, in addition to sanctions announced in February and March 2022 by President Biden and several European and world leaders and nations against Russia and any further sanctions, may adversely impact our business given Russia’s role as a major global exporter of crude oil and natural gas. Our business could be harmed by trade tariffs, trade embargoes or other economic sanctions by the United States or other countries against Russia, Russian companies or the Russian energy sector and harmed by any retaliatory measures by Russia in response. While much uncertainty remains regarding the global impact of Russia’s invasion of Ukraine, it is possible that the hostilities could adversely affect our business, financial condition, results of operation and cash flows. Furthermore, it is possible that third parties with whom we have charter contracts or business arrangements may be impacted by events in Russia and Ukraine, which could adversely affect our operations and financial condition.

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:

Voyage Revenues. Voyage revenues currently include revenues from charters accounted for under operating, and direct financing and sales-type leases. Voyage revenues are affected by hire rates and the number of calendar-ship-days a vessel operates. Voyage revenues are also affected by the mix of business between time and voyage charters. Hire rates for voyage charters are more volatile than for time charters, 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 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 by us under voyage charters.

Net Voyage Revenues. Net voyage revenues ~~represent voyage revenues less voyage expenses. Because the amount~~represents income from vessel operations before vessel operating expenses, time-charter hire expenses, depreciation and amortization, general and administrative expenses, write-down and gain on sales of voyage expenses we incur for a particular charter depends upon the type of the charter, we use net voyage revenues to improve the comparability between periods of reported revenues that are generated by the different types of charters. We principally use net voyage revenues,vessels, and restructuring charges. This is a non-GAAP financial measure; for more information about this measure, ~~because it provides more meaningful information to us about the deployment of our vessels~~please read "Item 5 - Operating and ~~their performance than voyage revenues, the most directly comparable financial measure under GAAP.~~Financial Review and Prospects - Non-GAAP Financial Measures".

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, ship management services, 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 the income we receive from each segment after deducting operating expenses, but prior to the inclusion or deduction of equity income, interest expense, ~~taxes, foreign currency~~interest income, realized and unrealized derivative gains or losses on non-designated derivative instruments, foreign currency exchange gains or losses, other expense and ~~other income.~~income tax expense. For more information, please read “Item 18 – Financial Statements: Note 4 – Segment Reporting.”

Dry docking. We must periodically dry dock each of our vessels for inspection, repairs and maintenance and any modifications required to comply with industry certification or governmental requirements. Generally, we dry dock each of our vessels every two and a half years to five years, depending upon the type of vessel and its age. We capitalize certain costs incurred during dry docking and amortize those costs on a straight-line basis from the completion of a dry docking to the estimated completion of the next dry docking. We include in capitalized dry docking those costs incurred as part of the dry docking to meet classification and regulatory requirements. We expense costs related to routine repairs and maintenance performed during dry docking. 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 the following three components:

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

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

•charges related to the amortization of the fair value of the time-charters acquired in a 2004 acquisition of four LNG carriers (over the expected remaining terms of the charters).

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 represents the total number of days available for the vessel to earn revenue. Idle days, which are days when the vessel is available to earn revenue, yet is not employed, are included in revenue days. We use revenue days to explain changes in our net voyage 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 and depreciation and amortization.

Utilization. Utilization is an indicator of the use of our fleet during a given period and is determined by dividing our revenue days by our calendar-ship-days for the period.

SUMMARY FINANCIAL DATA

Set forth below is summary consolidated financial and other data of Seapeak LLC and its subsidiaries for fiscal years 2020 and 2021, which have been derived from our consolidated financial statements. The following table should be read together with, and is qualified in its entirety by reference to, the consolidated financial statements and the accompanying notes for the years ended December 31, 2021 and 2020 (which are included herein).


(in thousands of U.S. Dollars, except unit, per unit and fleet data)	Year Ended December 31, 2021 $	Year Ended December 31, 2020 $
GAAP Financial Comparison: GAAP Financial Comparison:
Income Statement Data:
Voyage revenues	597,831	591,103
Income from vessel operations	246,455	226,093
Equity income	115,399	72,233
Net income	255,548	97,312
Limited partners’ interest in net income per common unit - diluted	2.44	0.73
Cash distributions declared per common unit	1.11	0.94

Balance Sheet Data (at end of period):
Cash and cash equivalents	92,069	206,762
Restricted cash	49,988	51,181
Vessels and equipment(1)	2,831,530	2,895,919
Investment in and advances to equity-accounted joint ventures, net	1,153,874	1,067,783
Net investments in direct financing and sales-type leases, net(2)	495,368	514,070
Total assets	4,798,585	4,854,004
Total debt(3)	2,648,632	2,813,135
Total equity	1,929,023	1,746,270

Non GAAP Financial Comparison:(4)
Net voyage revenues	569,641	573,709
EBITDA	505,917	356,478
Adjusted EBITDA	718,883	757,858

Fleet Data:
Average number of vessels:(5)
Consolidated – LNG Carriers	23.0	23.0
Equity-Accounted – LNG Carriers	25.0	25.0
Consolidated – LPG Carriers	7.0	7.0
Equity-Accounted – LPG Carriers	22.4	23.0

(1)Vessels and equipment consists of (a) our vessels, at cost less accumulated depreciation, (b) vessels related to finance leases, at cost less accumulated depreciation, and (c) operating lease right-of-use assets.

(2)Certain of our external charters have been accounted for as direct financing and sales-type leases. As a result, the vessels associated with the external charters accounted for as direct financing and sales-type leases are not included as part of vessels and equipment. Please see "Item 18 – Financial Statements: Note 6 – Revenue – Net Investments in Direct Financing and Sales-Type Leases."

(3)Total debt represents the current portion of long-term debt and long-term debt, and the current and long-term portions of obligations related to finance leases.

(4)Net voyage revenues, EBITDA and Adjusted EBITDA are non-GAAP financial measures. An explanation of the usefulness and purpose of each measure as well as a reconciliation to the most directly comparable financial measure calculated and presented in accordance with GAAP, are contained with the section “Non-GAAP Financial Measures” at the end of this Item 5 - Operating and Financial Review and Prospects.

(5)Average number of vessels is based on the period during the year that our vessels were in our possession, excluding any vessels under construction. In addition, the average number of vessels for our consolidated LNG fleet includes the charter-in contract of the Magellan Spirit from the MALT Joint Venture from September 2018 until the end of 2021. The average number of vessels for our equity-accounted LPG fleet includes three vessels chartered-in by our Exmar LPG Joint Venture.

RESULTS OF OPERATIONS

Items You Should Consider When Evaluating Our Results of Operations

Some factors that have affected our historical financial performance and may affect our future performance are listed below:

•The size of our fleet changes. Our historical results of operations reflect changes in the size and composition of our fleet due to certain vessel deliveries and sales, including within our equity-accounted joint ventures. Please read “Liquefied Natural Gas Segment”, "Liquefied Petroleum Gas Segment" below and “Significant Developments in 2021 and Early 2022” above for further details about certain prior and future vessel deliveries and sales.

•The amount and timing of dry docking of our vessels can affect our revenues between periods. Our vessels are off-hire at various times due to scheduled and unscheduled maintenance. During ~~2018, 2017~~2021 and ~~2016,~~2020, we had ~~156, 63~~279 and ~~zero~~71 scheduled off-hire days, respectively, relating to the dry docking of our vessels which are consolidated for accounting purposes. In addition, certain of our consolidated vessels had unplanned off-hire of ~~178~~156 days in ~~2018, 57~~2021 and 69 days in ~~2017, and 39 days in 2016~~2020 relating to repairs. The financial impact from these periods of off-hire, if material, is explained in further detail below.

~~The size of our fleet changes~~. Our historical results of operations reflect changes in the size and composition of our fleet due to certain vessel deliveries and sales. Please read “Liquefied Natural Gas Segment”, "Liquefied Petroleum Gas Segment" and “Conventional Tanker Segment” below and “Significant Developments in 2018 and Early 2019” above for further details about certain prior and future vessel deliveries and sales.

•Vessel operating and other costs are facing industry-wide cost pressures. The shipping industry continues to forecast a shortfall in qualified personnel, although weak shipping markets and slowing growth may ease officer shortages. We will continue to focus on our manning and training strategies to meet future needs. In addition, factors such as customer demands for enhanced training and physical equipment, 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~~maintain our operating expense increases at ~~improving~~near inflationary levels; however, regulatory compliance has increased cost pressures on operators in recent years which may lead to increased operational ~~efficiencies, and to temper the effect of inflationary and other price escalations; however, increases to operational costs may well occur~~expenses in the future.

•Our financial results are affected by fluctuations in the fair value of our derivative instruments. The change in fair value of our derivative instruments is included in our net income as the majority of our derivative instruments are not designated as hedges for accounting purposes. These changes may fluctuate significantly as interest rates and foreign currency exchange ~~rates and spot tanker~~ rates fluctuate relating to our interest rate swaps ~~interest rate swaptions,~~and cross currency ~~swaps and to the agreement we had with Teekay Corporation relating to the time charter contract for the~~ ~~Toledo Spirit~~ ~~Suezmax tanker prior to its sale in 2019.~~swaps. Please read “Item 18 – Financial Statements: Note ~~12d – Related Party Transactions” and “Note~~ 13 – Derivative Instruments and Hedging Activities.” The unrealized gains or losses relating to changes in fair value of our derivative instruments do not impact our cash flows.

•Our financial results are affected by fluctuations in currency exchange rates. Under GAAP, all foreign currency-denominated monetary assets and liabilities (including cash and cash equivalents, restricted cash, accounts receivable, accounts payable, accrued liabilities, advances from affiliates, and long-term debt) are revalued and reported based on the prevailing exchange rate at the end of the period. These foreign currency translations fluctuate based on the strength of the U.S. Dollar relative mainly to the Euro and NOK and are included in our results of operations. The translation of all foreign currency-denominated monetary assets and liabilities at each reporting date results in unrealized foreign currency exchange gains or losses but do not currently impact our cash flows.

•Certain of our consolidated and equity-accounted vessels earned revenues based partly on spot market rates. ~~Our previously owned conventional tankers, the~~ ~~European Spirit~~ ~~and~~ ~~African Spirit~~, One LNG carrier, certain of our ~~seven~~ wholly-owned multi-gas carriers,~~four of our 52%-owned LNG carriers in the Teekay LNG-Marubeni Joint Venture,~~ and certain of our LPG carriers in our 50%-owned Exmar LPG Joint Venture were either trading or are currently trading in the spot ~~market.~~market or have a component of their charter rate linked to spot market rates. Volatility of spot rates will affect our results from period to period.

•We ~~increased~~do not control access to cash flow generated by our ~~operating~~investments in equity-accounted joint ventures. We do not have control over the operations of, nor do we have any legal claim to the revenue and ~~reporting segments from two to three segments.~~ ~~Prior to 2018, we reported~~expenses of our ~~financial results on~~investments in, our equity-accounted joint ventures. Consequently, the ~~basis of two business segments: a liquified gas segment and a conventional tanker segment. During 2018,~~cash flow generated by our ~~Teekay Multi-Gas Pool commenced operations. As part of this initiative, we completed an internal reorganization and revised our reportable segments, as~~investments in equity-accounted joint ventures may not be available for use by us in the period that such ~~changes resulted in management viewing the gas fleet and its components differently. As a result, our LPG and multi-gas carriers~~cash flows are ~~now reported in a separate segment apart from our LNG carriers. Effective as of the fourth quarter of 2018, we manage our business and analyze and report~~generated.

•The COVID-19 pandemic could affect our results ~~from~~of operations on the basis of three business segments: the liquefied natural gas segment, the liquefied petroleum gas segment and the conventional tanker segment. All segment information for comparative periods has been retroactively adjusted to conform with the change in segment presentation adopted in 2018. Details of the changes to our results from operations foror financial condition.For the year ended December 31, ~~2018 compared~~2021, we did not experience any material business interruptions as a result of the COVID-19 pandemic. Please refer to “Significant Developments in 2021 and Early 2022” above for additional information and read “Item 3 - Key Information - Risk Factors” for additional information on the ~~year ended December 31, 2017 for each~~potential risks of COVID-19 on our ~~segments are provided below.~~business.

Year Ended December 31, ~~2018~~2021 versus Year Ended December 31, ~~2017~~2020

Summary

Our consolidated income from vessel operations was ~~$147.8~~$246.5 million for the year ended December 31, ~~2018,~~2021, compared to ~~$148.6~~$226.1 million for the year ended December 31, ~~2017.~~2020. The primary reasons for this ~~decrease,~~increase, which are reflected in the table below and described following the table, are as follows:

~~lower income from vessel operations from~~•an increase of $51.0 million due to the write-down of our seven multi-gas carriers ~~and two conventional tankers trading~~ in 2020 partly as a result of the ~~spot market in 2018~~economic environment at that time (including the economic impact of the COVID-19 global pandemic);

•an increase of $15.7 million due to lower operational claims on certain of our LNG carriers; and ~~the~~ ~~Polar Spirit~~ ~~earning~~

•an increase of $1.8 million primarily due to higher charter rates earned, partially offset by unscheduled off-hire days due to repairs on our multi-gas carriers;

partially offset by:

•a ~~lower time-charter rate upon redeployment;~~

decrease of $17.4 million due to higher general and administrative expenses and restructuring charges, primarily incurred in ~~2018~~connection with the Stonepeak Transaction (See "Significant Developments in 2021 and early 2022” above);

•a decrease of $13.0 million due to 182 additional off-hire days and fuel costs related to the scheduled drydockings and upgrade of certain of our LNG carriers in 2021 compared to 2020;

•a decrease of $7.0 million primarily due to an increase in ~~operational staff relating~~repairs and maintenance expenditures incurred;

•a decrease of $6.8 million due to ~~new vessel deliveries, higher levels~~47 additional off-hire days for unscheduled repairs on certain of ~~business development activities~~our LNG carriers; and ~~increased professional fees;~~

•a decrease of $6.0 million due to the redeliveries of the Creole Spirit and the Oak Spirit LNG carriers and these vessels earning lower charter rates upon redeployment in March 2021 and August 2021, respectively.

~~write-downs~~

Summary of ~~goodwill~~Equity Income

Our equity income from equity-accounted joint ventures increased to $115.4 million for the year ended December 31, 2021, compared to $72.2 million for the year ended December 31, 2020. The primary reasons for this increase are reflected in the table below and described following the table:

•an increase of $42.0 million due to unrealized gains on ~~three conventional vessels and~~non-designated interest rate swaps due to an increase in long-term forward LIBOR benchmark interest rates, compared to unrealized losses in 2020 due to a decrease in long-term forward LIBOR benchmark interest rates;

•an increase of $17.0 million due to impairment charges recorded on four ~~multi-gas~~LPG carriers in ~~2018 and restructuring charges~~the Exmar LPG Joint Venture in 2020;

•an increase of $15.3 million related to lower unrealized credit loss provisions primarily due to the ~~sale~~initial unrealized credit loss provision recognized upon commencement of the ~~Teide Spirit~~ sales-type lease for the Bahrain regasification terminal and associated floating storage unit in ~~February 2018, net~~January 2020 in our Bahrain LNG Joint Venture and lower unrealized credit loss provisions recorded in certain of ~~the initial write-downs~~our equity-accounted joint ventures primarily due to declines in estimated charter-free vessel fair values for vessels which are servicing time-charter contracts accounted for as direct financing leases during 2020; and

•an increase of ~~four conventional vessels~~$9.9 million due to a decrease in ~~2017;~~

interest expense resulting from lower debt balances and lower LIBOR during 2021;

partially offset by:

~~deliveries~~•a decrease of $30.0 million due to usan impairment charge recorded on our investment in the Excalibur Joint Venture in 2021;

•a decrease of $6.7 million primarily due to unscheduled off-hire for repairs during 2021 on certain of our equity-accounted LNG carriers in our Yamal LNG Joint Venture, off-hire for scheduled drydockings and unscheduled repairs during 2021 for certain of our equity-accounted LNG carriers in our 33%-owned joint venture with Angola (or the Angola LNG Carriers) and off-hire for scheduled drydockings during 2021 for certain of our equity-accounted LPG carriers in our Exmar LPG Joint Venture; and

•a decrease of $6.5 million primarily due to lower charter rates earned upon redeployment of the ~~Torben~~Marib Spirit ~~Macoma, Murex, Magdala, Myrina, Megara, Bahrain~~, Arwa Spirit and ~~Sean~~Methane Spirit~~LNG carrier newbuildings~~ between ~~February 2017~~May 2020 and ~~December 2018.~~

April 2021 in our MALT Joint Venture.

Liquefied Natural Gas Segment

As at December 31, ~~2018,~~2021, our liquefied natural gas segment fleet ~~including newbuildings,~~ included 4947 LNG carriers and one LNG regasification terminal in Bahrain, in which our interests ranged from 20% to 100%. ~~However, the~~

The following table ofcompares our liquefied natural gas segment’s operating results, ~~below~~revenue days, calendar-ship-days and utilization for 2021 and 2020 and compares its net voyage revenues (which is a non-GAAP financial measure) for the years ended December 31, 2021 and 2020 to income from vessel operations, the most directly comparable GAAP financial measure. With the exception of equity income, all data in this table only includes the 2322 LNG carriers as at December 31, 2021 and 2020, that are accounted for under the consolidation method of accounting and the Magellan Spirit~~, a vessel~~ chartered-in from the ~~Teekay LNG-Marubeni~~MALT Joint ~~Venture and excludes one LNG carrier newbuilding under construction as of December 31, 2018, as well as the vessels and other assets accounted for under the equity method in the following table. The~~Venture. A comparison of the results from vessels and assets accounted for under the equity method is described ~~below~~later in this section under ~~Equity~~"Equity Income."

As at December 31, 2018
Assets accounted for under the equity method of accounting Ownership Percentage # of Delivered Vessels Newbuildings/LNG Terminals Under Construction
Angola Joint Venture 33% 4 —
Bahrain LNG Joint Venture 30% — 1
Exmar LNG Joint Venture 50% 1 —
Pan Union Joint Venture 20%-30% 3 1
RasGas 3 Joint Venture 40% 4 —
Teekay LNG-Marubeni Joint Venture 52% 6 —
Yamal LNG Joint Venture 50% 2 4
20 6


(in thousands of U.S. Dollars, except revenue days, calendar-ship-days and percentages)	Year Ended December 31,		% Change
	2021	2020
Voyage revenues	550,496	552,416	(0.3)
Voyage expenses	(7,183)	(3,009)	138.7
Net voyage revenues(1)	543,313	549,407	(1.1)
Vessel operating expenses	(105,038)	(98,572)	6.6
Time-charter hire expenses	(23,487)	(23,564)	(0.3)
Depreciation and amortization	(123,786)	(122,523)	1.0
General and administrative expenses(2)	(37,668)	(24,879)	51.4

Restructuring charges	(2,958)	—	100.0
Income from vessel operations	250,376	279,869	(10.5)
Equity income	100,925	79,244	27.4
Operating Data:
Revenue Days (A)	8,087	8,350	(3.1)
Calendar-Ship-Days (B)	8,395	8,428	(0.4)
Utilization (A)/(B)	96.3%	99.1%

(1)This is a non-GAAP financial measure; for more information about this measure, please read "Item 5 - Operating and Financial Review and Prospects - Non-GAAP Financial Measures".

(2)Includes direct general and administrative expenses and indirect general and administrative expenses (allocated to each segment based on estimated use of resources).

Our liquefied natural gas segment’s total calendar-ship-days decreased to 8,395 days in 2021 from 8,428 days in 2020. During 2021, vessels in this segment were off-hire for 222 days for scheduled dry dockings, 85 days for unscheduled repairs and one idle day, compared to vessels in this segment being off-hire for 40 days for scheduled dry dockings and 38 days for unscheduled repairs in 2020. As a result, our utilization decreased to 96.3% for 2021, compared to 99.1% in 2020.

Net Voyage Revenues. Net voyage revenues decreased by $6.1 million in 2021 compared to 2020, primarily as a result of:

•a decrease of $13.0 million due to 182 additional off-hire days and fuel costs related to the scheduled drydockings and upgrade of certain of our LNG carriers in 2021 compared to 2020;

•a decrease of $6.8 million due to 47 additional off-hire days for unscheduled repairs on certain of our LNG carriers in 2021; and

•a decrease of $6.0 million due to the redeliveries of the Creole Spirit and the Oak Spirit LNG carriers and these vessels earning a lower charter rate upon redeployment in March 2021 and August 2021, respectively;

partially offset by:

•an increase of $15.7 million due to lower operational claims on certain of our LNG carriers in 2021 compared to 2020; and

•an increase of $3.3 million primarily due to foreign currency exchange gains as a result of appreciation of the U.S. Dollar against the Euro.

Vessel Operating Expenses. Vessel operating expenses increased by $6.5 million in 2021 compared to 2020, primarily as a result of an increase in repairs and maintenance expenditures incurred on certain of our LNG carriers.

Equity Income. Equity income was $100.9 million in 2021 compared to $79.2 million in 2020 as set forth in the table below:


	Equity Income (Loss) from Equity-Accounted LNG Joint Ventures
(in thousands of U.S. Dollars except percentages)	Angola LNG Carriers	Bahrain LNG Joint Venture	Exmar LNG Carriers	MALT LNG Carriers	Pan Union LNG Carriers	RasGas III LNG Carriers	Yamal LNG Carriers	Total
Ownership Percentage	33%	30%	50%	52%	20-30%	40%	50%
Equity income (loss) 2021	13,620	12,000	(25,708)	11,143	7,391	10,140	72,339	100,925
Included in equity income (loss):
Unrealized gains on non-designated derivative instruments	9,218	11,024	—	638	—	—	702	21,582
Credit loss (provision) reversal	(1,239)	(588)	—	(50)	(298)	(3,651)	2,463	(3,363)
Equity income (loss) 2020	3,711	(27,445)	3,288	14,129	10,401	7,714	67,446	79,244
Included in equity income (loss):
Unrealized losses on non-designated derivative instruments	(808)	(18,239)	—	(137)	—	—	(95)	(19,279)
Credit loss (provision) reversal	(3,043)	(9,511)	—	(449)	(411)	(5,446)	215	(18,645)
Difference in Equity Income (Loss)	9,909	39,445	(28,996)	(2,986)	(3,010)	2,426	4,893	21,681

The following table summarizes our equity-accounted fleet as of December 31, 2021 compared to December 31, 2020. In addition, we have 30% interest in a LNG regasification terminal in Bahrain.


	Equity-Accounted Joint Ventures - LNG Fleet Count
	Angola LNG Carriers	Exmar LNG Carriers	MALT LNG Carriers	Pan Union LNG Carriers	RasGas III LNG Carriers	Yamal LNG Carriers	Total Number of Vessels
Number of vessels as at December 31, 2021 and 2020	4	1	6	4	4	6	25

Angola LNG Carriers. The increase in equity income of $9.9 million was primarily due to unrealized gains on non-designated derivative instruments during 2021 compared to unrealized losses during 2020 and lower unrealized credit loss provisions primarily related to a provision in 2020 as a result of declines in estimated charter-free vessel valuations of the Angola LNG Carriers, which are servicing time-charter contracts accounted for as direct financing leases; partially offset by 60 off-hire days for the scheduled dry docking of three Angola LNG Carriers in 2021.

Bahrain LNG Joint Venture. The increase in equity income of $39.4 million was primarily due to unrealized gains on non-designated derivative instruments in 2021 compared to unrealized losses during 2020 and lower unrealized credit loss provisions in 2021 compared to the initial unrealized credit loss provision recognized during 2020 upon commencement of the terminal.

Exmar LNG Carriers. The decrease in equity income of $29.0 million was primarily due to a $30.0 million impairment charge recorded on our investment in the Excalibur Joint Venture in 2021.

MALT LNG Carriers. The decrease in equity income of $3.0 million was primarily due to lower charter rates upon redeployment of the Marib Spirit, Arwa Spirit and Methane Spirit between May 2020 and April 2021. The decrease was partially offset by a decrease in interest expense due to lower debt balances, unrealized gains on non-designated derivative instruments during 2021 compared to unrealized losses during 2020 and lower operational claims during 2021.

Pan Union LNG Carriers. The decrease in equity income of $3.0 million was primarily due to 26 unplanned off-hire days for repairs during 2021 to the Pan Asia and the timing of operating ~~results~~expenditures.

RasGas III LNG Carriers. The increase in equity income of $2.4 million was primarily due to lower unrealized credit loss provisions in 2021, primarily related to a provision in 2020 as a result of declines in estimated charter-free vessel valuations of the RasGas III LNG Carriers, which are servicing time-charter contracts accounted for as direct financing leases.

Yamal LNG Carriers. The increase in equity income of $4.9 million was primarily due to a decrease in interest expense due to lower debt balances, lower operational claims during 2021 and lower unrealized credit loss reversals primarily related to a provision in the fourth quarter of 2020 as a result of declines in estimated charter-free vessel valuations of the Yamal LNG Carriers.

Liquified Petroleum Gas Segment

As at December 31, 2021, our liquefied petroleum gas segment fleet included 21 LPG, in which we own a 50% interest, and seven multi-gas carriers which are wholly-owned.

The following table compares our liquefied ~~natural~~petroleum gas segment’s operating results, revenue days, calendar-ship-days and utilization for ~~2018~~2021 and ~~2017~~2020, and compares its net voyage revenues (which is a non-GAAP financial measure) for ~~2018~~the years ended December 31, 2021 and ~~2017~~2020 to ~~voyage revenues,~~loss from vessel operations, the most directly comparable GAAP financial measure. ~~The following table~~With the exception of ~~operating results also provides a summary of the changes in calendar-ship-days and revenue days for our liquefied natural gas segment:~~

(in thousands of U.S. Dollars, except revenue days,
calendar-ship-days and percentages)
Year Ended December 31, % Change
2018 2017
Voyage revenues 454,517
365,914
24.2
Voyage expenses (2,750 ) (1,802 ) 52.6
Net voyage revenues 451,767
364,112
24.1
Vessel operating expenses⁽²⁾
(82,952 ) (80,245 ) 3.4
Time-charter hire expense (7,670 ) —
100.0
Depreciation and amortization (111,360 ) (86,592 ) 28.6
General and administrative expenses⁽¹⁾⁽²⁾
(23,270 ) (13,223 ) 76.0
Income from vessel operations 226,515
184,052
23.1
Equity income 60,228
17,652
241.2
Operating Data:
Revenue Days (A) 7,425
5,793
28.2
Calendar-Ship-Days (B) 7,570
5,912
28.0
Utilization (A)/(B) 98.1 % 98.0 %


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


~~(2)~~	An adjustment has been made during 2018 to reclassify a ship management cost recovery from general and administrative expenses to vessel operating expenses. The 2017 results have also been reclassified to conform to the presentation adopted in 2018.

~~Our liquefied natural gas segment’s total calendar-ship-days increased by 28.0% to 7,570 days in 2018 from 5,912 days in 2017, as a result of the deliveries of the~~ ~~Torben Spirit~~equity income (loss), ~~Murex~~, ~~Macoma~~, ~~Magdala, Myrina, Megara, Bahrain Spirit~~ ~~and~~ ~~Sean Spirit~~ ~~LNG carrier newbuildings between February 2017 and December 2018 and the~~ ~~Magellan Spirit~~ ~~chartered-in from the Teekay LNG-Marubeni Joint Venture commencing in September 2018. During 2018, vessels~~all data in this segment were off-hire for scheduled dry dockings of 30 days, unscheduled off-hire for repairs of 49 days and idle for 66 days for repositioning to other charters, compared to vessels in this segment being off-hire for scheduled dry dockings of 63 days, unscheduled off-hire for repairs of 53 days and idle for three days in the same period of the prior year. As a result, our utilization increased slightly to 98.1% for 2018, compared to 98.0% in 2017.

~~Net Voyage Revenues. Net voyage revenues increased during 2018 compared to 2017, primarily as a result of:~~

~~an increase of $15.0 million due to the delivery of the~~ ~~Magdala~~ ~~and charter contract commencing in February 2018;~~

~~an increase of $13.5 million due to the delivery of the~~ ~~Murex~~ ~~andcharter contract commencing in November 2017;~~

~~an increase of $12.8 million due to the~~ ~~Magellan Spirit~~ ~~chartered-in from Teekay LNG-Marubeni Joint Venture in September 2018 and commencing its charter-out employment in October 2018;~~

~~an increase of $12.6 million due to the delivery of the~~ ~~Macoma~~ ~~andcharter contract commencing in October 2017;~~

~~an increase of $11.0 million due to the delivery of the~~ ~~Myrina~~ ~~and charter contract commencing in May 2018;~~

~~an increase of $9.7 million due to the delivery of the~~ ~~Torben Spirit~~ ~~andcharter contract commencing in March 2017 and earning an increased charter rate during 2018 upon the charterer extending its original contract in 2017;~~

~~an increase of $8.6 million due to the delivery of the~~ ~~Bahrain Spirit~~ ~~in August 2018 and commencement of its charter contract in September 2018;~~

~~an increase of $7.8 million due to the delivery of the~~ ~~Megara~~ ~~and charter commencing in July 2018;~~

~~an increase of $3.8 million due to the impact of the appreciation of the Euro compared to the U.S. Dollar on our Euro-denominated revenue;~~

~~an increase of $2.4 million relating to 35 days of unscheduled off-hire in the second quarter of 2017 due to repairs required for one of our LNG carriers;~~

~~an increase of $2.0 million due to the~~ ~~Hispania Spirit~~ ~~being off-hire for 31 days in the first quarter of 2017 for a scheduled dry docking; and~~

an increase of $1.6 million due to mobilization service fees earned commencing in October 2018 relating to our 30%-owned LNG receiving and regasification terminal under construction in Bahrain (however, we had a corresponding increase in vessel operating expenses);

~~partially offset by:~~

~~a decrease of $5.6 million due to the~~ ~~Polar Spirit~~ earning a lower charter rate upon redeployment after its original charter contract ended during the first quarter of 2018 and 35 days of unscheduled off-hire and idle days during 2018 primarily due to an incident investigation involving a collision with a small vessel and repositioning to other charters;

a decrease of $3.7 million primarily related to additional revenue recognized during the first quarter of 2017 relating to the accelerated dry docking of two LNG carriers in 2017, the costs of which will be recoverable from the charterer;

~~a decrease of $1.9 million due to the~~ ~~Catalunya Spirit~~ ~~being off-hire for 30 days in 2018 for a scheduled dry docking;~~

a decrease of $1.7 million relating to amortization of in-process contracts recognized into revenue with respect to our shipbuilding and site supervision contract associated with the four LNG newbuilding carriers in the Pan Union Joint Venture due to the deliveries of the ~~Pan Asia, Pan Americas~~ ~~and~~ ~~Pan Europe~~ ~~LNG carrier newbuildings between October 2017 and July 2018 (however, we had a corresponding decrease in vessel operating expenses); and~~

~~a decrease of $1.4 million relating to 20 days of unscheduled off-hire in the fourth quarter of 2018 for the~~ ~~Madrid Spirit~~ ~~due to repairs.~~

~~Vessel Operating Expenses. Vessel operating expenses increased during 2018 compared to 2017, primarily as a result of:~~

~~an increase of $2.4 million due to deliveries of the~~ ~~Bahrain Spirit, Sean Spirit~~ ~~and~~ ~~Torben Spirit;~~

~~an increase of $1.8 million due to the reactivation of the~~ ~~Arctic Spirit~~ ~~from lay-up during the third quarter of 2017; and~~

an increase of $1.6 million due to mobilization expenses incurred commencing in October 2018 relating to our 30%-owned LNG receiving and regasification terminal under construction in Bahrain (however, we had a corresponding increase in net voyage revenues);

~~partially offset by:~~

~~a decrease of $2.4 million due to higher ship management cost recovery in 2018 as a result of the vessels delivered during the year; and~~

~~a decrease of $1.7 million due to lower shipbuilding supervision costs upon the deliveries of~~ ~~Pan Asia, Pan Americas~~ ~~and~~ ~~Pan Europe~~ ~~LNG carrier newbuildings (however, we had a corresponding decrease in net voyage revenues).~~

~~Time-charter Hire Expense. Time-charter hire expense increased by $7.7 million as the~~ ~~Magellan Spirit~~ ~~LNG carrier was chartered-in from the Teekay LNG-Marubeni Joint Venture commencing in September 2018.~~

~~Depreciation and Amortization. Depreciation and amortization increased by $24.8 million in 2018 compared to 2017 primarily due to the deliveries of the~~ ~~Torben Spirit~~, ~~Murex~~, ~~Macoma~~, ~~Magdala, Myrina, Megara~~ ~~and~~ ~~Sean Spirit.~~

~~Equity Income.~~ ~~Equity income increased by $42.6 million in 2018 compared to 2017 as explained below.~~

(in thousands of U.S. Dollars) Year Ended December 31,

Angola
LNG
Carriers
Exmar
LNG
Carriers
MALT
LNG
Carriers
RasGas 3
LNG
Carriers
Pan Union LNG Carriers Yamal LNG Carriers Bahrain LNG Joint Venture
Total
Equity
Income
2018 17,337
9,233
(1,005 ) 14,730
6,819
9,607
3,507
60,228
2017 16,755
7,397
(16,547 ) 16,324
496
(1,761 ) (5,012 ) 17,652
Difference 582
1,836
15,542
(1,594 ) 6,323
11,368
8,519
42,576

The $0.6 million increase in our 33%-owned investment in the four Angola LNG Carriers was primarily due to mark-to-market changes on non-designated derivative instruments. The mark-to-market changes resulted from increases in long-term LIBOR benchmark interest rates for interest rate swaps compared to 2017.

The $1.8 million increase in our 50% investment in the Exmar LNG Carriers was primarily due to a gain of $5.6 million upon the sale of our 50% ownership interest in the Excelsior Joint Venture recorded in equity income, partially offset by lower earnings due to the sale of the Excelsior Joint Venture.

The $15.5 million increase in equity income from our 52% investment in the MALT LNG Carriers was primarily due to higher fleet utilization and higher rates earned as a result of certain vessels that operated in the spot market during 2017 being on short-term charter contracts in 2018.

The $1.6 million decrease in equity income from our 40% investment in the RasGas 3 LNG Carriers was primarily due to higher interest expense due to increase in LIBOR, partially offset by unrealized gains recognized in 2018 relating to its non-designated interest rate swaps compared to unrealized losses in 2017.

~~The $6.3 million increase in equity income from our investment in the Pan Union LNG Carriers was primarily due to the deliveries of the Pan Union Joint Venture's three LNG carrier newbuildings, the~~ ~~Pan Asia, Pan Americas~~ ~~and~~ ~~Pan Europe, in October 2017, January 2018 and July 2018, respectively, in which we have ownership interests ranging from 20% to 30%.~~

The $11.4 million increase in equity income from our 50% investment in the Yamal LNG Carriers was primarily due to the deliveries of the Yamal LNG Joint Venture's first two ARC7 LNG carrier newbuildings, the ~~Eduard Toll~~ ~~and~~ ~~Rudolf Samoylovich~~,~~in January 2018 and September 2018, respectively, partially offset by ineffectiveness recognized on hedged-accounted interest rate swaps.~~

The $8.5 million increase in our 30%-owned investment in the Bahrain LNG Joint Venture was primarily due to unrealized gains on designated and non-designated derivative instruments recorded in earnings in 2018 compared to losses recorded in earnings in 2017 due to mark-to-market changes and the sub-charter income earned in 2018 on the ~~Bahrain Spirit.~~

~~Liquified Petroleum Gas Segment~~

~~As at December 31, 2018, our liquefied petroleum gas segment fleet included 29 LPG and multi-gas carriers, in which our interests ranged from 50% to 99%. However, the~~ table ~~of operating results below~~ only includes the seven multi-gas carriers that are accounted for under the consolidation method of ~~accounting and excludes 22 vessels in the Exmar LPG Joint Venture accounted for under the equity method. The~~accounting. A comparison of the results from vessels ~~and assets~~ accounted for under the equity method are described below under ~~Equity Loss.~~"Equity Income (Loss)".

~~The following table of operating results compares our liquefied petroleum gas segment’s operating results for 2018 and 2017 and compares its net voyage revenues (which~~


(in thousands of U.S. Dollars, except revenue days, calendar-ship-days and percentages)	Year Ended December 31,		% Change
	2021	2020
Voyage revenues	47,335	38,687	22.4
Voyage expenses	(21,007)	(14,385)	46.0
Net voyage revenues(1)	26,328	24,302	8.3
Vessel operating expenses	(19,588)	(17,824)	9.9
Depreciation and amortization	(7,024)	(7,229)	(2.8)
General and administrative expenses(2)	(3,372)	(2,025)	66.5
Write-down of vessels	—	(51,000)	(100.0)
Restructuring charges	(265)	—	100.0
Loss from vessel operations	(3,921)	(53,776)	(92.7)
Equity income (loss)	14,474	(7,011)	306.4
Operating Data:
Revenue Days (A)	2,427	2,500	(2.9)
Calendar-Ship-Days (B)	2,555	2,562	(0.3)
Utilization (A)/(B)	95.0%	97.6%

(1)This is a non-GAAP financial ~~measure)~~measure; for ~~2018~~more information about this measure, please read "Item 5 - Operating and ~~2017~~Financial Review and Prospects - Non-GAAP Financial Measures".

(2)Includes direct general and administrative expenses and indirect general and administrative expenses (allocated to ~~voyage revenues, the most directly comparable GAAP financial measure. The following table~~each segment based on estimated use of ~~operating results also provides a summary of the changes in calendar-ship-days and revenue days for our liquefied petroleum gas segment:~~resources).

(in thousands of U.S. Dollars, except revenue days,
calendar-ship-days and percentages)
Year Ended December 31, % Change
2018 2017
Voyage revenues 23,922
19,769
21.0
Voyage expenses (15,907 ) (1,218 ) 1,206.0
Net voyage revenues 8,015
18,551
(56.8 )
Vessel operating expenses (20,932 ) (3,083 ) 578.9
Depreciation and amortization (7,748 ) (8,433 ) (8.1 )
General and administrative expenses⁽¹⁾
(2,932 ) (2,411 ) 21.6
Write-down of goodwill and vessels (33,790 ) —
100.0
(Loss) income from vessel operations (57,387 ) 4,624
(1,341.1 )
Equity loss (6,682 ) (7,863 ) (15.0 )
Operating Data:
Revenue Days (A) 2,249
2,445
(8.0 )
Calendar-Ship-Days (B) 2,555
2,445
4.5
Utilization (A)/(B) 88.0 % 100.0 %


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

Our liquefied petroleum gas segment’s total calendar-ship-days ~~increased by 4.5%~~decreased to 2,555 days in ~~2018 from 2,445~~2021 compared to 2,562 days in ~~2017, as a result of the acquisition of the~~ ~~Sonoma Spirit~~ ~~in April 2017.~~2020. During ~~2018,~~2021, vessels in this segment were off-hire for 57 days for scheduled dry ~~dockings of 97 days, unscheduled off-hire for repairs of 97 days~~docking and ~~idle for 112~~71 days for ~~repositioning to other charters,~~unscheduled repairs, compared to ~~vessels~~31 days for scheduled dry docking and 31 days for unscheduled repairs in ~~this segment not being off-hire or idle in the same period of the prior year.~~2020. As a result, our utilization decreased to ~~88.0%~~95.0% for ~~2018,~~2021, compared to ~~100.0%~~97.6% in ~~2017.~~2020.

Net Voyage Revenues. Net voyage revenues ~~decreased~~increased by ~~$10.5~~$2.0 million during ~~2018~~2021 compared to ~~2017,~~2020, primarily ~~related~~due to ~~recognition~~higher charter rates earned during 2021, partially offset by more scheduled dry dockings and unscheduled off-hire days during 2021 due to repairs for certain of ~~previous upfront payments received from I.M. Skaugen SE (or~~ ~~Skaugen) during the fourth quarter of 2017 upon termination of charterer contracts with Skaugen.~~our LPG carriers.

Vessel Operating Expenses. Vessel operating expenses increased by ~~$17.8~~$1.8 million during ~~2018~~2021 compared ~~to 2017, primarily due to six multi-gas carriers, which were previously on bareboat charter contracts, incurring operating expenses following their redelivery to us from Skaugen during 2017.~~

~~Write-down of Goodwill and Vessels.~~ ~~Write-down of vessels of $33.0 million in 2018 were due to the write-downs of the~~ ~~Camilla Spirit, Cathinka Spirit~~, ~~Napa Spirit~~ ~~and~~ ~~Pan Spirit~~ multi-gas carriers as a result of our evaluation of alternative strategies for these assets, the charter rate environment at the time and the outlook for charter rates for these vessels. In 2018, we conducted our annual goodwill impairment review and concluded that our liquefied petroleum gas segment was impaired and recorded an impairment charge of $0.8 million for the year ended December 31, 2018.

~~Equity Loss.~~ ~~The $1.2 million improvement in equity loss from our 50% ownership interest in Exmar LPG BVBA (or the~~ ~~Exmar LPG Joint Venture) was primarily due to the impairment losses recorded on the~~ ~~Courcheville~~ ~~and~~ ~~Temse~~ ~~during 2017, partially offset by lower spot rates earned during 2018 compared to 2017 for certain vessels and the sale of the~~ ~~Courcheville~~ ~~in January 2018.~~

~~Conventional Tanker Segment~~

As at December 31, 2018, our conventional tanker fleet included one Suezmax-class double-hulled conventional crude oil tanker, which we lease under capital lease and one Handymax Product tanker, which we own. Two of our conventional tankers, the ~~African Spirit~~ ~~and~~ ~~European Spirit, have been trading in the spot market since the termination of their respective fixed-rate charters in November 2017 and August 2017, respectively. The~~ ~~African Spirit, European Spirit~~ ~~and~~ ~~Toledo Spirit~~ were sold in October 2018, December 2018, and January 2019, respectively. The following table of operating results compares our conventional tanker segment’s operating results for 2018 and 2017, and compares its net voyage revenues (which is a non-GAAP financial measure) for 2018 and 2017 to voyage revenues, the most directly comparable GAAP financial measure. The following table of operating results also provides a summary of the changes in calendar-ship-days and revenue days for our conventional tanker segment:

(in thousands of U.S. Dollars, except revenue days,
calendar-ship-days and percentages)
Year Ended December 31, % Change
2018 2017
Voyage revenues 32,323
46,993
(31.2 )
Voyage expenses (9,580 ) (5,182 ) 84.9
Net voyage revenues 22,743
41,811
(45.6 )
Vessel operating expenses (13,774 ) (18,211 ) (24.4 )
Depreciation and amortization (5,270 ) (10,520 ) (49.9 )
General and administrative expenses⁽¹⁾
(2,310 ) (2,507 ) (7.9 )
Write-down of vessels (20,863 ) (50,600 ) (58.8 )
Restructuring charges (1,845 ) —
100.0
Loss from vessel operations (21,319 ) (40,027 ) (46.7 )
Operating Data:
Revenue Days (A) 1,328
1,868
(28.9 )
Calendar-Ship-Days (B) 1,389
1,904
(27.0 )
Utilization (A)/(B) 95.6 % 98.1 %


~~(1)~~	~~Includes direct general and administrative expenses and indirect general and administrative expenses (allocated to each segment based on estimated use of corporate resources).~~

~~Our conventional tanker segment's total calendar ship days decreased by 27.0% to 1,389 days in 2018 from 1,904 days in 2017~~2020, primarily as a result of ~~the sales of the~~ ~~Asian Spirit~~, ~~Teide Spirit, European Spirit~~ ~~and~~ ~~African Spirit~~an increase in ~~March 2017, February 2018, October 2018 and December 2018, respectively. During 2018, the~~ ~~European Spirit~~ ~~was off-hire for 29 days for a scheduled dry docking and 17 days for~~ repairs and ~~the~~ ~~African~~maintenance expenditures incurred on certain of our multi-gas carriers during 2021.

Write-down of Vessels. During 2020, our seven wholly-owned multi-gas carriers (the Unikum Spirit, Vision Spirit, Pan Spirit,Cathinka Spirit, Camilla Spirit, Napa Spirit and ~~Alexander~~Sonoma Spirit ~~had a total of 15 days of unscheduled off-hire due~~), were written down to ~~repairs, compared to 34 idle days for the~~ ~~Asian Spirit~~ ~~after its firm charter contract ended in January 2017 and two unscheduled off-hire days for the~~ ~~African Spirit~~ ~~for repairs during the same period in 2017. As a result, our utilization decreased to 95.6% in 2018 compared to 98.1% in 2017.~~

~~Net Voyage Revenues. Net voyage revenues decreased during 2018 compared to 2017, primarily as a result of:~~

~~a decrease of $9.5 million due to the sales of the~~ ~~Asian Spirit~~ ~~and~~ ~~Teide Spirit;~~ ~~and~~

~~a decrease of $8.4 million as the fixed-rate charter contracts for the~~ ~~European Spirit~~ ~~and~~ ~~African Spirit~~ ~~expired in August and November 2017, respectively, and the vessels earned lower spot rates until they were sold in October and December of 2018, respectively.~~

~~Vessel Operating Expenses. Vessel operating expenses decreased during 2018 compared to 2017 by $4.4 million primarily~~their estimated fair values, partly as a result of the ~~sales~~economic environment at that time (including the economic impact of the ~~Asian Spirit, Teide Spirit, European Spirit~~ ~~and~~ ~~African Spirit.~~COVID-19 global pandemic), for a total write-down of $51.0 million.

~~Depreciation and Amortization~~Equity Income (Loss). ~~Depreciation and amortization decreased during 2018~~Equity income increased by $21.5 million for 2021 compared to ~~2017 by $5.3 million~~2020, primarily ~~as a result of the sales of the~~ ~~Asian Spirit~~ due to impairment charges recorded on four LPG carriers (the Touraine, Brussels, Temseand ~~Teide Spirit,~~ ~~and the reclassification of the~~ ~~European Spirit~~ ~~and~~ ~~African Spirit~~ ~~to vessels held~~Eupen) during 2020, higher rates earned during 2021, fewer off-hire days for ~~sale~~scheduled drydockings during ~~2017.~~

~~Write-down of vessels.~~ ~~During 2018, we recorded write-downs of $20.9 million. We recorded a write-down of $13.0 million~~2021, gains on the ~~Alexander Spirit~~ ~~conventional tanker to its estimated fair value, using an appraised value, as a result of changes in our expectations~~

~~of the vessel's future opportunities once its current contract ends in 2019. We also recorded write-downs of $7.9 million on a combined basis on the~~ ~~European Spirit~~ ~~and~~ ~~African Spirit~~ Suezmax tankers as a result of declines in the estimated fair market values of these vessels held for sale. During 2017, we recorded write-downs of $50.6 million. We recorded a write-down of $25.5 million on a combined basis in respect of the ~~Teide Spirit~~ ~~and~~ ~~Toledo Spirit~~ ~~upon the charterer of the~~ ~~Teide Spirit, which is the same charterer of the~~ ~~Toledo Spirit, giving formal notification to us of its intention to terminate its charter contract. In addition, we recorded write-downs of $25.1 million on a combined basis in respect of the~~ ~~European Spirit~~ ~~and~~ ~~African Spirit~~ ~~upon their original contracts ending in 2017 and the vessels being marketed for sale.~~

~~Restructuring Charges.~~ ~~The restructuring charges of $1.8 million incurred in 2018 relate to seafarer severance costs upon CEPSA’s~~ sale of Touraine and Temse during the ~~Teide Spirit,~~ ~~our vessel related to capital lease.~~third quarter of 2021 and higher unrealized gains on non-designated derivative instruments during 2021.

Other Operating Results

The following table compares our other operating results for the years ended December 31, 2021 and 2020:


	For the Year Ended
(in thousands of U.S. Dollars)	December 31, 2021	December 31, 2020
General and administrative expenses	(41,040)	(26,904)
Interest expense	(118,618)	(132,806)
Realized and unrealized gain (loss) on non-designated derivative instruments	8,523	(33,334)
Foreign currency exchange gain (loss)	8,612	(21,356)
Other expense	(3,882)	(16,910)
Income tax expense	(6,886)	(3,492)
Other comprehensive income (loss)	52,851	(49,068)

General and Administrative Expenses. General and administrative expenses increased to ~~$28.5~~$41.0 million for ~~2018,~~2021 from ~~$18.1~~$26.9 million for ~~2017,~~2020, primarily due to ~~an increase~~costs incurred in ~~operational staff relating to new vessel deliveries, higher levels of business development activities, an increase in professional fees primarily due to~~connection with the ~~lease dispute for our RasGas II LNG Carriers as described above in~~Stonepeak Transaction (see "Significant Developments in ~~2018~~2021 and Early ~~2019~~2022 – ~~Teekay Nakilat Capital Lease" and due to claims against Skaugen for damages and losses for our multi-gas carriers previously on charter to them.~~Stonepeak Transaction" above).

Interest Expense. Interest expense ~~increased~~decreased to ~~$128.3~~$118.6 million for ~~2018,~~2021, from ~~$80.9~~$132.8 million for ~~2017.~~2020. Interest expense primarily reflects interest incurred on our long-term debt and obligations related to ~~capital~~finance leases. ~~This increase~~The decrease was ~~primarily the result of:~~

~~an increase of $37.1 million~~ primarily due to ~~deliveries of the~~ ~~Torben Spirit, Murex, Macoma, Magdala, Myrina, Megara,Bahrain Spirit~~ ~~and~~ ~~Sean Spirit~~ ~~during 2018 and 2017;~~

~~an increase of $7.6 million~~a lower debt balance as a result of ~~higher LIBOR rates, net of principal~~ debt repayments ~~as compared to the same periods of the prior year;~~ and a decrease in LIBOR.

~~an increase of $3.7 million due to decreases in capitalized interest as a result of vessels delivered during 2018 and 2017.~~

Realized and Unrealized Gain (Loss) on ~~Non-Designated~~Non-designated Derivative Instruments. Net realized and unrealized gains (losses) on non-designated derivative instruments ~~increased to $3.3~~were $8.5 million and $(33.3) million for ~~2018, from $(5.3) million~~2021 and 2020, respectively. Please see “Item 18 – Financial Statements: Note 13 – Derivative Instruments and Hedging Activities" for ~~2017 as set forth in the table below.~~a further breakdown of such amounts by type of derivative contract.

(in thousands of U.S. Dollars) Year Ended December 31,
2018 2017
Realized
gains
(losses) Unrealized
gains
(losses) Total Realized
gains
(losses) Unrealized
gains
(losses) Total
Interest rate swap agreements (14,654 ) 31,061
16,407
(18,825 ) 12,393
(6,432 )
Interest rate swaption agreements —
2
2
—
945
945
Interest rate swap and swaption agreements termination (13,681 ) —
(13,681 ) (610 ) —
(610 )
Toledo Spirit time-charter derivative 1,480
(930 ) 550
678
110
788
(26,855 ) 30,133
3,278
(18,757 ) 13,448
(5,309 )

We enter into interest rate swaps which exchange a receipt of floating interest for a payment of fixed interest to reduce exposure to interest rate variability on certain of our outstanding U.S. Dollar-denominated and Euro-denominated floating rate debt. As at December 31, ~~2018~~2021 and ~~2017,~~2020, we had interest rate swap agreements, excluding ~~our~~ swap agreements ~~with future commencement dates,~~held by our equity-accounted joint ventures, with aggregate average net outstanding notional amounts of approximately ~~$919~~$911 million and ~~$837~~$806 million, respectively, and with average fixed rates of ~~3.3%~~2.7% and ~~3.5%~~3.1%, respectively. The increases in realized losses relating to our interest rate swaps from 2018 to 2017 were primarily due to an interest rate swap termination in 2018, partially offset by decreases in our settlement payments as a result of the expiration of certain interest rate swaps, which were not renewed, and an increase in LIBOR compared to 2017.

During ~~2018,~~2021, we ~~also~~ recognized unrealized gains on our interest rate swap agreements associated with our U.S. Dollar-denominated long-term debt. This resulted from ~~$4.1~~a reclassification of $31.3 million of previously recognized unrealized losses to realized losses related to cash settlements of our interest rate swap agreements, of which $18.0 million related to the termination of the interest rate swap agreement associated with the debt refinancing in our 70%-owned consolidated joint venture, TK BLT Corporation (or the Tangguh Joint Venture) during the first quarter of 2021, and $8.4 million of unrealized gains primarily relating to ~~increases~~an increase in long-term forward LIBOR benchmark interest rates relative to the beginning of ~~2018 and~~2021.

During 2021, we recognized unrealized gains on our interest rate swap agreements associated with our Euro-denominated long-term debt. This resulted primarily from a reclassification of ~~$8.8~~$2.8 million of previously recognized unrealized losses to realized losses related to actual cash settlements of our interest rate swaps.

During 2020, we recognized unrealized losses on our interest rate swap agreements associated with our U.S. Dollar-denominated long-term debt. This resulted from $32.2 million of unrealized losses relating to decreases in long-term forward LIBOR benchmark interest rates relative to the beginning of 2020, partially offset by a reclassification of $13.5 million of previously recognized unrealized losses to realized losses related to cash settlements of our interest rate swaps.

During ~~2018,~~2020, we recognized unrealized gains on our interest rate swap agreements associated with our Euro-denominated long-term debt. This resulted from reclassification of $19.5 million of previously recognized unrealized losses to realized losses related to actual cash settlements of our interest rate swaps, of which $13.7 million was due to the termination of one of our interest rate swap agreements related to the refinancing of one of our debt facilities, partially offset by $1.3 million of unrealized losses relating to decreases in long-term forward EURIBOR benchmark interest rates relative to the beginning of 2018.

~~The Toledo Spirit time-charter derivative is the agreement with Teekay Corporation under which Teekay Corporation paid us any amounts payable to the charterer of the~~ ~~Toledo Spirit~~ ~~as a result of spot rates being below the fixed rate, and we paid Teekay Corporation any amounts payable to us by the charterer of the~~ ~~Toledo Spirit~~ as a result of spot rates being in excess of the fixed rate. Please read “Item 18 – Financial Statements: Note 12d – Related Party Transactions." The realized gain of $1.5 million for 2018 relates to lower earnings on our profit-loss-sharing agreement for the ~~Toledo Spirit~~ ~~(we had corresponding decrease in net voyage~~

~~revenues). During 2018, we recognized unrealized losses on our Toledo Spirit time-charter derivative contract of $0.9 million. This resulted from~~ a reclassification of previously recognized unrealized gains to realized gains of $1.5 million, partially offset by $0.6 million of unrealized gains relating to decreases in the projected forward tanker rates in the tanker market, relative to the beginning of 2018. The ~~Toledo Spirit~~ ~~was sold in early 2019, and as a result, the derivative agreement ended at that time.~~

~~During 2017, we recognized unrealized gains on our interest rate swap and swaption agreements associated with our U.S. Dollar-denominated long-term debt. This resulted from reclassification of $10.9~~$3.1 million of previously recognized unrealized losses to realized losses related to actual cash settlements of our interest rate swaps partially offset by ~~$2.6~~$1.1 million of unrealized losses ~~relating to decreases in long-term forward LIBOR benchmark interest rates, relative to the beginning of 2017.~~

During 2017, we also recognized unrealized gains on our interest rate swap agreements associated with our Euro-denominated long-term debt. This resulted from reclassification of $7.9 million of previously recognized unrealized losses to realized losses related to actual cash settlements of our interest rate swaps, partially offset by $2.8 million of unrealized losses relatingdue to decreases in long-term forward EURIBOR benchmark interest rates relative to the beginning of ~~2017.~~2020.

Please see “Item 5 – Operating and Financial Review and Prospects: Critical Accounting Estimates – Valuation of Derivative Instruments,” which explains how our derivative instruments are valued, including the significant factors and uncertainties in determining the estimated fair value and why changes in these factors result in material variances in realized and unrealized gain (loss) on non-designated derivative instruments.

Foreign Currency Exchange ~~Gains (Losses)~~Gain (Loss). Foreign currency exchange gains (losses) were ~~$1.4~~$8.6 million and ~~$(26.9)~~$(21.4) million for ~~2018~~2021 and ~~2017,~~2020, respectively. These foreign currency exchange ~~gains (losses) are~~losses were primarily due ~~primarily~~ to the relevant period-end revaluation of our NOK-denominated debt and our Euro-denominated term loans for financial reporting purposes into U.S. Dollars, net of the realized and unrealized gains and losses 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.

For ~~2018,~~2021, foreign currency exchange gains ~~(losses)~~ included ~~realized~~unrealized gains ~~of $42.3 million upon maturity~~on the revaluation of our ~~NOK bonds in 2018, $42.3~~Euro-denominated and non-U.S. Dollar-denominated cash, restricted cash, working capital and debt of $6.4 million, ~~unrealized gains from the transfer of previously recognized unrealized losses to realized losses related to our cross currency swaps associated with the NOK bond which matured in 2018,~~ unrealized gains on the revaluation of our NOK-denominated debt of ~~$19.2~~$5.3 million and unrealized gains on our cross currency swaps of $2.2 million. These gains were partially offset by realized losses on our cross currency swaps of $5.3 million.

For 2020, foreign currency exchange losses included unrealized losses on the revaluation of our ~~Euro denominated,~~Euro-denominated and non-U.S. Dollar-denominated cash, restricted cash, working capital and debt of ~~$9.8 million. These gains were partially offset by $(42.3)~~$11.2 million, of realized losses related to the maturity of our cross currency swaps associated with the NOK bonds which matured in 2018, $(42.3) million of unrealized losses from the transfer of previously recognized unrealized gains to realized gains related to the maturity of the NOK bonds in 2018, unrealized losses on our cross currency swaps of ~~($21.1)~~$7.0 million, ~~relating to depreciation of long-term NOK forward exchange rates~~ and ~~decreases in long-term forward NIBOR benchmark interest rates relative to the beginning of 2018 and ($6.5) million of~~ realized losses on our cross currency ~~swaps.~~

~~For 2017, foreign currency exchange (losses) gains included $(25.7) million~~swaps of ~~realized~~$6.6 million. These losses ~~related to the maturity of our cross currency swaps associated with the NOK bonds which matured in 2017, $(25.7) million of unrealized losses from the transfer of previously recognized~~were partially offset by unrealized gains ~~to realized gains related to the maturity of the NOK bonds in 2017, realized losses of $(9.3) million on our cross currency swaps, the unrealized losses~~ on the revaluation of our NOK-denominated debt of ~~$(17.6)~~$3.5 million.

Other Expense. Other expense decreased to $3.9 million ~~and unrealized losses on the revaluation of our Euro-denominated cash, restricted cash and debt of $(23.3) million. These losses were partially offset by realized gains of $25.7~~for 2021, from $16.9 million ~~upon the maturity of our NOK bonds~~for 2020. The change in 2017, $25.7 million unrealized gains from the transfer of previously recognized unrealized losses to realized losses related to our cross currency swaps associated with the NOK bond which matured in 2017, unrealized gains of $23.3 million on our cross currency swapsother expensewas primarily due to ~~appreciation~~higher unrealized credit loss provisions recognized in 2020 as a result of ~~long-term NOK forward exchange rates~~declines of estimated charter-free valuations of certain of our LNG vessels, which are servicing time-charter contracts accounted for as direct financing leases, and ~~increases~~the impact of such declines on our expectation of the value of such vessels upon completion of their existing charter contracts.


(in thousands of U.S. Dollars)	For the Year Ended December 31,
	2021	2020
Other expense	(3,882)	(16,910)
Included in other expense:
Credit loss provision	(2,797)	(16,096)

Income Tax Expense. Income tax expenseincreased to $6.9 million for 2021, from $3.5 million for 2020 primarily due to changes in ~~long-term forward NIBOR benchmark interest rates relative~~deferred tax amounts related to the ~~beginning~~timing of ~~2017.~~deductions in the Tangguh Joint Venture, in which we own a 70% interest.

Other Comprehensive ~~(Loss)~~ Income ~~(or~~ ~~OCI~~)(Loss). ~~OCI~~ Other comprehensive income (loss) was ~~$(1.1)~~$52.9 million in ~~2018~~2021 compared to ~~$4.0~~$(49.1) million in ~~2017,~~2020, due to changes in the valuation of interest rate swaps accounted for using hedge accounting within the Teekay Nakilat Joint Venture, in which we own a 70% interest, and in certain of our equity-accounted joint ventures.

Year Ended December 31, ~~2017~~2020 versus Year Ended December 31, ~~2016~~2019

~~Liquefied Natural Gas Segment~~

~~As at December 31, 2017,~~For a discussion of our liquefied natural gas segment fleet, including newbuildings, consisted of 50 LNG carriers, in which our interests ranged from 20% to 100%. However, the table of operating results below only includes the 18 LNG carriers that were accounted for under the consolidation method of accounting and excludes six LNG carrier newbuildings under construction as of December 31, 2017 and the following vessels and other assets accounted for under the equity method in the following table. The comparison of the results from vessels and assets accounted for under the equity method is described below under Equity Income.

As at December 31, 2017
Assets accounted for under the equity method of accounting Ownership Percentage # of Delivered Vessels Newbuildings/LNG Terminals Under Construction
Angola Joint Venture 33% 4 —
Bahrain LNG Joint Venture 30% — 1
Exmar LNG Joint Venture 50% 2 —
Pan Union Joint Venture 20%-30% 1 3
RasGas 3 Joint Venture 40% 4 —
Teekay LNG-Marubeni Joint Venture 52% 6 —
Yamal LNG Joint Venture 50% — 6
17 10

~~The following table of operating results compares our liquefied natural gas segment’s~~ operating results for ~~2017 and 2016, and compares its net voyage revenues (which is a non-GAAP financial measure) for 2017 and 2016 to voyage revenues,~~ the most directly comparable GAAP financial measure. The following table of operating results also provides a summary of the changes in calendar-ship-days and revenue days for our liquefied natural gas segment:

(in thousands of U.S. Dollars, except revenue days,
calendar-ship-days and percentages)
Year Ended December 31, % Change
2017 2016
Voyage revenues 365,914
314,591
16.3
Voyage expenses (1,802 ) (449 ) 301.3
Net voyage revenues 364,112
314,142
15.9
Vessel operating expenses (80,245 ) (65,371 ) 22.8
Depreciation and amortization (86,592 ) (72,190 ) 20.0
General and administrative expenses⁽¹⁾
(13,223 ) (13,955 ) (5.2 )
Income from vessel operations 184,052
162,626
13.2
Equity Income 17,652
48,633
(63.7 )
Operating Data:
Revenue Days (A) 5,793
5,178
11.9
Calendar-Ship-Days (B) 5,912
5,244
12.7
Utilization (A)/(B) 98.0 % 98.7 %


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

~~Our liquefied natural gas segment’s total calendar-ship-days increased by 12.7% to 5,912 days in 2017 from 5,244 days in 2016, as a result of the deliveries of the~~ ~~Creole Spirit~~ ~~and~~ ~~Oak Spirit~~ ~~during 2016 and the deliveries of the~~ ~~Torben Spirit, Macoma,~~ ~~and~~ ~~Murex~~ ~~during 2017. During 2017, three of our consolidated vessels in this segment had 53 unscheduled off-hire days for repairs, two vessels were off-hire for scheduled dry dockings of 63 days, and the~~ ~~Torben Spirit~~ ~~was idle for three days prior to its charter contract commencement,~~year ended December 31, 2020 compared ~~to three consolidated vessels in this segment having 39 unscheduled off-hire days for repairs, and the~~ ~~Creole Spirit~~ ~~and~~ ~~Oak Spirit~~ ~~being idle for 12 days and 15 days, respectively, prior to their charter contract commencements in 2016. As a result, our utilization decreased to 98.0% for 2017, compared to 98.7% in 2016.~~

~~Net Voyage Revenues. Net voyage revenues increased during 2017 compared to 2016, primarily as a result of:~~

•~~an increase of $16.6 million due to the~~ ~~Oak Spirit~~ ~~charter contract commencing in August 2016;~~

•~~an increase of $13.5 million due to the~~ ~~Torben Spirit~~ ~~charter contract commencing in March 2017;~~

•~~an increase of $8.4 million due to the~~ ~~Creole Spirit~~ ~~charter contract commencing in February 2016;~~

an increase of $6.9 million primarily related to additional revenue recognized relating to the accelerated dry docking of two LNG carriers, the costs of which will be recoverable from the charterer, and higher pass-through operating expenses due to timing of main engine maintenance (however, we had corresponding increases in vessel operating expenses relating to the engine maintenance);

•~~an increase of $3.5 million due to the~~ ~~Macoma~~ ~~charter contract commencing in October 2017;~~

~~an increase of $3.0 million relating to amortization of in-process contracts recognized as revenue with respect to our shipbuilding and site supervision contract associated~~ with the ~~four LNG newbuilding carriers in the Pan Union Joint Venture (however, we had corresponding increases in vessel operating expenses); and~~

•~~an increase of $2.4 million due to the~~ ~~Murex~~ ~~charter contract commencing in November 2017;~~

~~partially offset by:~~

~~a decrease of $2.4 million relating to 35 days of unscheduled off-hire in the second quarter of 2017 due to repairs required for one of our LNG carriers; and~~

~~a net decrease of $0.5 million due to the~~ ~~Hispania Spirit~~ ~~being off-hire for 31 days in the first quarter of 2017 for a scheduled dry docking, partially offset by a reduction in a performance claim recorded in 2016.~~

~~Vessel Operating Expenses. Vessel operating expenses increased during 2017 compared to 2016, primarily as a result of:~~

~~an increase of $6.0 million due to the deliveries of the~~ ~~Creole Spirit, Oak Spirit~~ ~~and~~ ~~Torben Spirit~~;

an increase of $3.0 million in relation to our agreement to provide shipbuilding and site supervision costs associated with the four LNG newbuilding carriers in the Pan Union Joint Venture (however, we had corresponding increases in net voyage revenues);

~~an increase of $3.0 million for two of our LNG carriers as a result of the timing of main engine maintenance (however, we had corresponding increases in net voyage revenues); and~~

~~an increase of $2.0 million for certain of our LNG carriers due to the timing of repairs and maintenance.~~

~~Depreciation and Amortization. Depreciation and amortization increased by $14.4 million in 2017 compared to 2016 primarily due to the deliveries of the~~ ~~Creole Spirit,Oak Spirit, Torben Spirit, Macoma,~~ ~~and~~ ~~Murex,~~ ~~andhigher dry-dock amortization due to dry dockings of our LNG carriers~~.

~~Equity Income.~~ ~~Equity income decreased by $31.0 million in 2017 compared to 2016 as explained below.~~

(in thousands of U.S. Dollars) Year Ended December 31,
Angola
LNG
Carriers Exmar
LNG
Carriers MALT
LNG
Carriers RasGas 3
LNG
Carriers Pan Union LNG Carriers Other Total
Equity
Income
2017 16,755
7,397
(16,547 ) 16,324
496
(6,773 ) 17,652
2016 15,713
9,038
4,503
19,817
(104 ) (334 ) 48,633
Difference 1,042
(1,641 ) (21,050 ) (3,493 ) 600
(6,439 ) (30,981 )

The $1.0 million increase in our 33% investment in the four Angola LNG Carriers was primarily due to an increase in unrealized gains on non-designated derivative instruments due to mark-to-market changes. The mark-to-market changes resulted from changes in long-term LIBOR benchmark interest rates for interest rate swaps compared to 2016.

~~The $1.6 million decrease in our 50% investment in the Exmar LNG Carriers was primarily due to the~~ ~~Excalibur~~ ~~being off-hire in 2017 for a scheduled dry docking.~~

The $21.1 million decrease in equity income from our 52% investment in the MALT LNG Carriers was primarily due to a settlement payment awarded to the joint venture in 2016 for the disputed contract termination relating to the ~~Magellan Spirit, of which our proportionate share was $20.3 million; and a further deferral effective August 2016 of a portion of the charter payments for the~~ ~~Marib Spirit~~ ~~and~~ ~~Arwa Spirit~~ that are chartered to service the YLNG plant in Yemen, which has been closed since 2015. These decreases were partially offset by higher fleet utilization in the second half of 2017 due to commencements of short-term charter contracts for certain vessels which were previously trading in the spot market.

The $3.5 million decrease in equity income from our 40% investment in the RasGas 3 LNG Carriers was primarily due to higher interest expense resulting from the completion of debt refinancing in December 2016.

~~The $0.6 million increase in equity income from our investment in the Pan Union LNG Carriers was primarily due to the delivery of the Pan Union Joint Venture's first LNG carrier newbuilding, the~~ ~~Pan Asia, in October 2017.~~

The $6.4 million decrease in our other equity-accounted investments was primarily due to unrealized losses on interest rate swaps relating to our 30% ownership interest in the Bahrain LNG Joint Venture in 2017, and higher crew training expenses for the Yamal LNG Joint Venture in preparation for its vessel deliveries which commenced in 2018.

~~Liquefied Petroleum Gas Segment~~

~~As at~~year ended December 31, 2017, our liquefied petroleum gas segment fleet, including newbuildings, consisted of 30 LPG/multi-gas carriers, in which our interests ranged from 50% to 99%. However, the table of operating results below only includes the seven multi-gas carriers that are accounted for under the consolidation method of accounting and excludes 20 delivered vessels and three newbuildings in the Exmar

~~LPG Joint Venture accounted for under the equity method. The comparison of the results from vessels and assets accounted for under the equity method are described below under Equity (Loss) Income.~~

The following table of operating results compares our liquefied petroleum gas segment’s operating results for 2017 and 2016 and compares its net voyage revenues (which is a non-GAAP financial measure) for 2017 and 2016, to voyage revenues, the most directly comparable GAAP financial measure. The following table of operating results also provides a summary of the changes in calendar-ship-days and revenue days for our liquefied petroleum gas segment:

(in thousands of U.S. Dollars, except revenue days,
calendar-ship-days and percentages)
Year Ended December 31, % Change
2017 2016
Voyage revenues 19,769
21,939
(9.9 )
Voyage expenses (1,218 ) —
100.0
Net voyage revenues 18,551
21,939
(15.4 )
Vessel operating expenses (3,083 ) (16 ) 19,168.8
Depreciation and amortization (8,433 ) (7,894 ) 6.8
General and administrative expenses⁽¹⁾
(2,411 ) (2,055 ) 17.3
Income from vessel operations 4,624
11,974
(61.4 )
Equity (loss) income (7,863 ) 13,674
(157.5 )
Operating Data:
Revenue Days (A) 2,445
2,196
11.3
Calendar-Ship-Days (B) 2,445
2,196
11.3
Utilization (A)/(B) 100.0 % 100.0 %

~~Our liquefied petroleum gas segment’s total calendar-ship-days increased by 11.3% to days 2,445 days in 2017 from days 2,196 days in 2016 as a result of our acquisition of the~~ ~~Sonoma Spirit~~ ~~in 2017.~~

~~Net Voyage Revenues. Net voyage revenues decreased during 2017 compared to 2016, primarily as a result of:~~

~~a decrease of $15.1 million due to uncertainty of collection for outstanding hire receivable relating to our six LPG carriers on charter to Skaugen in 2017;~~

~~partially offset by:~~

an increase of $10.3 million due to the prepaid lease payments received from Skaugen in prior periods, which were previously deferred and then recognized in 2017 upon the termination of the charter contracts for five of our LPG carriers that were on charter with Skaugen; and

•~~an increase of $1.4 million due to the acquisition of the~~ ~~Sonoma Spirit~~ ~~in April 2017.~~

~~Vessel Operating Expenses~~. Vessel operating expenses increased during 2017 compared to 2016 by $3.1 million primarily due to six LPG carriers, which were previously on bareboat charter contracts, incurring operating expenses following their redelivery to us from Skaugen during 2017, and the acquisition of the ~~Sonoma Spirit.~~

~~Equity (Loss) Income.~~ The $21.5 million decrease in equity income from our 50% ownership interest in the Exmar LPG Joint Venture was primarily due to more vessels trading in the spot market at lower rates during 2017 compared to higher fixed rates earned in 2016. Other factors that caused the decrease included the scheduled dry dockings of the ~~Eupen~~ ~~and~~ ~~Brussels~~ ~~in the second and third quarters of 2017, respectively, vessel write-downs of the~~ ~~Courcheville~~ ~~and~~ ~~Temse~~ ~~recorded in 2017, and the sale of the~~ ~~Brugge Venture~~ in January 2017. These decreases were partially offset by revenues earned from five LPG carrier newbuildings that delivered to the Exmar LPG Joint Venture between February 2016 and July 2017, and a write-down of the ~~Brugge Venture~~ ~~recorded in 2016.~~

~~Conventional Tanker Segment~~

~~As at December 31, 2017, our conventional tanker fleet included four Suezmax-class double-hulled conventional crude oil tankers and one Handymax Product tanker, three of which we own (including the~~ ~~European Spirit~~ ~~and~~ ~~African Spirit~~ ~~which were classifiedas held for sale) and two of which we lease under capital leases. Three of our five conventional tankers operate under fixed-rate charters, the~~ ~~European Spirit~~ ~~and~~ ~~African Spirit~~ ~~were trading in the spot market in August and November 2017, respectively, as we continued to market those vessels for sale.~~

The following table of operating results compares our conventional tanker segment’s operating results for 2017 and 2016 and compares its net voyage revenues (which is a non-GAAP financial measure) for 2017 and 2016 to voyage revenues, the most directly comparable GAAP financial measure. The following table of operating results also provides a summary of the changes in calendar-ship-days and revenue days for our conventional tanker segment:

(in thousands of U.S. Dollars, except revenue days,
calendar-ship-days and percentages)
Year Ended December 31, % Change
2017 2016
Voyage revenues 46,993
59,914
(21.6 )
Voyage expenses (5,182 ) (1,207 ) 329.3
Net voyage revenues 41,811
58,707
(28.8 )
Vessel operating expenses⁽²⁾
(18,211 ) (22,503 ) (19.1 )
Depreciation and amortization (10,520 ) (15,458 ) (31.9 )
General and administrative expenses⁽¹⁾⁽²⁾
(2,507 ) (3,189 ) (21.4 )
Write-down and loss on sale of vessels (50,600 ) (38,976 ) 29.8
(Loss) income from vessel operations (40,027 ) (21,419 ) 86.9
Operating Data:
Revenue Days (A) 1,868
2,439
(23.4 )
Calendar-Ship-Days (B) 1,904
2,439
(21.9 )
Utilization (A)/(B) 98.1 % 100.0 %


~~(1)~~	~~Includes direct general and administrative expenses and indirect general and administrative expenses (allocated to each segment based on estimated use of corporate resources).~~


~~(2)~~	An adjustment was made during 2018 to reclassify a ship management cost allocation recovery from general and administrative expenses to vessel operating expenses. The 2017 and 2016 results have also been reclassified to conform to the presentation adopted in 2018.

~~Our conventional tanker segment's total calendar ship days decreased by 21.9% to 1,904 days in 2017 from 2,439 days in 2016 primarily as a result of the sales of the~~ ~~Bermuda Spirit, Hamilton Spirit~~ ~~and~~ ~~Asian Spirit~~ ~~in April 2016, May 2016 and March 2017, respectively~~. ~~During 2017, the~~ ~~Asian Spirit~~ ~~was idle for 34 days between the time its firm charter contract ended in January 2017 and the time the vessel was sold and the~~ ~~European Spirit~~ ~~was off-hire for two days for vessel maintenance, compared to no off-hire days during 2016. As a result, our utilization decreased to 98.1% in 2017 compared to 100.0% in 2016~~

~~Net Voyage Revenues. Net voyage revenues decreased during 2017 compared to 2016, primarily as a result of:~~

~~a decrease of $14.0 million primarily due to the sales of the~~ ~~Bermuda Spirit, Hamilton Spirit,~~ ~~and~~ ~~Asian Spirit~~;

~~a decrease of $2.1 million as the fixed-rate charter contracts for the~~ ~~European Spirit~~ ~~and~~ ~~African Spirit~~ ~~expired in August and November 2017, respectively, and the vessels earned lower spot rates during the periods after their respective contracts expired; and~~

~~a decrease of $1.3 million due to lower revenues earned by the~~ ~~Toledo Spirit~~ in 2017 relating to the profit-sharing agreement between us and CEPSA (however, we had a corresponding decrease in our realized loss on our associated derivative contract with Teekay Corporation; therefore, this decrease and future increases or decreases related to this agreement did not and will not affect our cash flow or net income).

~~Vessel Operating Expenses. Vessel operating expenses decreased during 2017 compared to 2016 primarily as a result of the sales of the~~ ~~Bermuda Spirit~~, ~~Hamilton Spirit~~ ~~and~~ ~~Asian Spirit.~~

~~Depreciation and Amortization. Depreciation and amortization decreased during 2017 compared to 2016 primarily as a result of the sales of the~~ ~~Bermuda Spirit~~, ~~Hamilton Spirit~~ ~~and~~ ~~Asian Spirit,~~ ~~the reclassification of the~~ ~~European Spirit~~ ~~to held for sale in the second quarter of 2017, and the vessel write-down of the~~ ~~African Spirit~~ ~~recorded in the third quarter of 2017.~~

~~Write-down of vessels.~~ ~~During 2017, we recorded write-downs of $50.6 million. During the second quarter of 2017, we recorded a write-down of the~~ ~~EuropeanSpirit~~ of $12.6 million to its estimated fair value as we commenced marketing the vessel for sale upon the charterer notifying us it was redelivering the vessel to us upon completion of its charter contract in August 2017. During the third quarter of 2017, we recorded a write-down of the ~~African Spirit~~ of $12.5 million to its estimated fair value as we received notification from the charterer in August 2017 that it would redeliver the vessel to us upon completion of its charter contract in November 2017. In August 2017, the charterer of the ~~Teide Spirit~~ gave formal notification to us of its intention to terminate its charter contract subject to certain conditions being met and third-party approvals being received. Based on our prior experience with the charterer, we expected in 2017 that the charterer would cancel the charter contract for the ~~Toledo Spirit. We recorded a $25.5 million write-down on a combined basis in respect of the~~ ~~Teide Spirit~~ ~~and~~ ~~Toledo Spirit~~ ~~in 2017. During 2016, we incurred losses on the sales of the~~ ~~Bermuda Spirit~~ ~~and~~ ~~Hamilton Spirit~~ ~~of $27.4 million~~, ~~and recorded a write-down of $11.5 million to its estimated fair value for the~~ ~~Asian Spirit~~ ~~upon completion of its charter contract and marketing the vessel for sale.~~

~~Other Operating Results~~

~~General and Administrative Expenses~~. General and administrative expenses decreased to $18.1 million for 2017, from $19.2 million for 2016, primarily due to lower levels of business development activities in 2017 compared to 2016, which was partially offset by reimbursement from the Bahrain LNG Joint Venture in 2016 of our proportionate share of certain costs we paid, including pre-operation, engineering and financing-related expenses, upon the joint venture securing debt financing in the fourth quarter of 2016.

~~Interest Expense~~. Interest expense increased to $80.9 million for 2017, from $58.8 million for 2016. Interest expense primarily reflects interest incurred on our long-term debt and obligations related to capital leases. This increase was primarily the result of:

~~an increase of $16.3 million primarily relating to interest incurred on the obligations related to capital leases for the~~ ~~Creole Spirit~~, ~~Oak Spirit,Torben Spirit, Murex,~~ ~~and~~ ~~Macoma~~ ~~commencing upon their deliveries in 2016 and 2017;~~

an increase of $4.6 million as a result of our issuances of NOK bonds in October 2016 and January 2017, net of our NOK bond repurchases in October 2016 and the maturity of certain of the NOK bonds in May 2017; and

an increase of $4.1 million as a result of interest expense accretion on the Pan Union Joint Venture crew training and site supervision obligation, and higher LIBOR rates net of debt principal repayments;

~~partially offset by:~~

a decrease of $4.1 million due to increases in capitalized interest relating to additional advances and capital contributions to the Yamal LNG Joint Venture and Bahrain LNG Joint Venture for newbuilding installments and construction costs.

~~Realized and Unrealized Loss on Non-Designated Derivative Instruments. Net realized and unrealized losses on non-designated derivative instruments decreased to $5.3 million for 2017, from $7.2 million for 2016 as set forth in the table below.~~

(in thousands of U.S. Dollars) Year Ended December 31,
2017 2016
Realized
gains
(losses) Unrealized
gains
(losses) Total Realized
gains
(losses) Unrealized
gains
(losses) Total
Interest rate swap agreements (18,825 ) 12,393
(6,432 ) (25,940 ) 15,627
(10,313 )
Interest rate swaption agreements —
945
945
—
(164 ) (164 )
Interest rate swaption agreements termination (610 ) —
(610 ) —
—
—
Toledo Spirit time-charter derivative 678
110
788
(654 ) 3,970
3,316
(18,757 ) 13,448
(5,309 ) (26,594 ) 19,433
(7,161 )

~~As at December 31, 2017 and 2016, we had interest rate swap agreements, excluding our swap agreements with future commencement~~

dates, with aggregate average net outstanding notional amounts of approximately $837 million and $755 million, respectively, with average fixed rates of 3.5% and 3.8%, respectively. The decreases in realized losses relating to our interest rate swaps from 2016 to 2017 was primarily due to an increase in LIBOR compared to the prior year, which decreased our settlement payments, and the expiration of certain interest rate swaps, which were not renewed.

During 2017, we recognized unrealized gains on our interest rate swap and swaption agreements associated with our U.S. Dollar-denominated long-term debt. This resulted from reclassification of $10.9 million of previously recognized unrealized losses to realized losses related to actual cash settlements of our interest rate swaps, partially offset by $2.6 million of unrealized losses relating to decreases in long-term forward LIBOR benchmark interest rates, relative to the beginning of 2017.

During 2017, we also recognized unrealized gains on our interest rate swap agreements associated with our Euro-denominated long-term debt. This resulted from reclassification of $7.9 million of previously recognized unrealized losses to realized losses related to actual cash settlements of our interest rate swaps, partially offset by $2.8 million of unrealized losses relating to decreases in long-term forward EURIBOR benchmark interest rates, relative to the beginning of 2017.

The projected forward average tanker rates in the tanker market decreased slightly at December 31, 2017 compared to the beginning of 2017, which resulted in $0.1 million of unrealized gains on our Toledo Spirit time-charter derivative. The Toledo Spirit time-charter derivative is the agreement with Teekay Corporation under which Teekay Corporation paid us any amounts payable to the charterer of the ~~Toledo Spirit~~ ~~as a result of spot rates being below the fixed rate, and we paid Teekay Corporation any amounts payable to us by the charterer of the~~ ~~Toledo Spirit~~ ~~as a result of spot rates being in excess of the fixed rate. The~~ ~~Toledo Spirit~~ ~~was sold in early~~ 2019, ~~and as a result, the derivative agreement ended at that time.~~

During 2016, we recognized unrealized gains on our interest rate swap and swaption agreements associated with our U.S. Dollar-denominated long-term debt. This resulted from transfers of $17.9 million of previously recognized unrealized losses to realized losses related to actual cash settlements of our interest rate swaps, partially offset by $3.7 million of unrealized losses relating to decreases in long-term forward LIBOR benchmark interest rates relative to the beginning of 2016.

During 2016, we also recognized unrealized gains on our interest rate swap agreements associated with our Euro-denominated long-term debt. This resulted from transfers of $8.1 million of previously recognized unrealized losses to realized losses related to actual cash settlements of our interest rate swaps, partially offset by $6.7 million of unrealized losses relating to decreases in long-term forward EURIBOR benchmark interest rates, relative to the beginning of 2016.

The projected forward average tanker rates in the tanker market decreased at December 31, 2016 compared to the beginning of 2016, which resulted in $4.0 million of unrealized gains on our Toledo Spirit time-charter derivative.

~~Please~~please see ~~“Item~~"Item 5 – Operating and Financial Review and ~~Prospects: Critical Accounting Estimates – Valuation of Derivative Instruments,” which explains how~~Prospects" in our ~~derivative instruments are valued, including~~Annual Report on Form 20-F for the significant factors and uncertainties in determining the estimated fair value and why changes in these factors result in material variances in realized and unrealized gain (loss) on non-designated derivative instruments.year ended December 31, 2020.

~~Foreign Currency Exchange Gains~~. Foreign currency exchange (losses) gains were $(26.9) million and $5.3 million for 2017 and 2016, respectively. These foreign currency exchange gains were due primarily to the relevant period-end revaluation of our NOK-denominated debt and our Euro-denominated term loans for financial reporting purposes into U.S. Dollars, net of the realized and unrealized gains and losses 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.

For 2017, foreign currency exchange (losses) gains included $(25.7) million of realized losses related to the maturity of our cross currency swaps associated with the NOK bonds which matured in 2017, $(25.7) million of unrealized losses from the transfer of previously recognized unrealized gains to realized gains related to the maturity of the NOK bonds in 2017, realized losses of $(9.3) million on our cross currency swaps, the unrealized losses on the revaluation of our NOK-denominated debt of $(17.6) million, and unrealized losses on the revaluation of our Euro-denominated cash, restricted cash and debt of $(23.3) million. These losses were partially offset by realized gains of $25.7 million upon the maturity of our NOK bonds in 2017, $25.7 million unrealized gains from the transfer of previously recognized unrealized losses to realized losses related to our cross currency swaps associated with the NOK bond which matured in 2017, unrealized gains of $23.3 million on our cross currency swaps primarily due to appreciation of long-term NOK forward exchange rates and increases in long-term forward NIBOR benchmark interest rates relative to the beginning of 2017.

For 2016, foreign currency exchange gains (losses) included realized gains of $16.8 million on the repurchase of a portion of our NOK bonds maturing in 2017, the transfer of $17.7 million of previously recognized unrealized losses to realized losses related to our cross currency swaps associated with the NOK bond repurchase, unrealized gains of $11.2 million on our cross currency swaps primarily due to appreciation of long-term NOK forward exchange rates and increases in long-term forward NIBOR benchmark interest rates relative to the beginning of 2016, and $5.4 million on the revaluation of our Euro-denominated cash, restricted cash and debt. These gains were partially offset by transfers of $(16.8) million of previously recognized unrealized gains to realized gains related to the repurchase of the NOK bonds in October 2016, $(17.7) million of realized losses related to the termination of our cross currency swaps associated with the NOK bond repurchase, $(9.1) million realized losses on settlements of our cross currency swaps and a $(2.2) million loss on the revaluation of our NOK-denominated debt.

~~Other Comprehensive Income~~ ~~(or~~ ~~OCI~~). OCI was $4.0 million in 2017 compared to $2.8 million in 2016, due to changes in the valuation of interest rate swaps accounted for using hedge accounting within the Teekay Nakilat Joint Venture, in which we own a 70% interest, and certain of our equity-accounted joint ventures.

Liquidity and ~~Cash Needs~~Capital Resources

Sources and Uses of Capital

We generate cash flows from the charters that our vessels service. Our business ~~model~~strategy is to employ ~~the~~a substantial majority of our vessels on fixed-rate contracts primarily with large energy companies and their transportation subsidiaries. ~~Our primary liquidity needs for 2019 through 2020 include payment of~~However, our ~~quarterly distributions, including payments of distributions~~LPG vessels primarily operate on our common units and Series A and Series B Preferred Units, funding any common unit repurchases we may undertake, operating expenses, dry-docking expenditures, debt service costs, scheduled repayments of long-term debt, bank debt maturities and the funding of general working capital requirements. We anticipate that our primary sources of funds for our short-term liquidity needs will be cash flows from operations, proceeds from debt and capital lease financings and dividends we expect to receive from our equity-accounted joint ventures. For 2019 through 2020, we expect that our existing liquidity, combined with the cash flow we expect to generate from our operations and receive as dividends from our equity-accounted joint ventures, will be sufficient to finance the majority of our liquidity needs, including the equity portion of our committed capital expenditures. Our remaining liquidity needs include the requirement to refinance our loan facilities maturing in 2020. We already have committed debt financing in place for all of our existing growth projects, including: our wholly-owned LNG carrier newbuilding to be chartered on a 15-year charter contract to Yamal Trade Pte. Ltd. (which was delivered in January 2019); one LNG carrier under construction in the Pan Union Joint Venture (which was delivered in January 2019); all four ARC7 LNG carriers under construction for the Yamal LNG Joint Venture; and the assets of the Bahrain LNG Joint Venture formed for the development of an LNG receiving and regasification terminal in Bahrain.

Our ability to continue to expand the size of our fleet over the long term is dependent upon our ability to generate operating cash flow, obtain long-term bank borrowings, sale-leaseback financing and other debt, as well as our ability to raise debttime-charters or ~~equity financing through public or private offerings.~~

Our revolving credit facilities, term loans and obligations related to capital leases are described in the "Credit Facilities and Capital Leases" section below and in "Item 18 – Financial Statements: Note 5 – Chartered-in Vessels and Note 10 – Long-Term Debt."

As at December 31, 2018, our consolidated cash and cash equivalents were $149.0 million, compared to $244.2 million at December 31, 2017. Our total liquidity, which consists of cash, cash equivalents and undrawn credit facilities, was $324.6 million as at December 31, 2018, compared to $433.6 million as at December 31, 2017. The decrease in total consolidated liquidity was primarily due to funding of our committed projects, including capital contributions into the Pan Union Joint Venture and Teekay LNG-Marubeni Joint Venture, and payment of the tax indemnification liability in our consolidated Teekay Nakilat Joint Venture during 2018. The decrease in total consolidated liquidity was partially offset by cash generated from operations, proceeds from our sale-leaseback transactions completed during 2018, proceeds from the sales of the ~~European Spirit~~ ~~and~~ ~~African Spirit~~ ~~and proceeds from the sale of our 50% ownership interest in the Excelsior Joint Venture.~~

~~As at December 31, 2018, we had a working capital deficit of $32.8 million, which includes $24.0 million of current obligations related to capital leases relating to the~~ ~~Toledo Spirit~~, which was sold by the owner in January 2019 to a third party, resulting in the extinguishment of the remaining lease obligation without any cash flow impact directly relating to such extinguishment. We expect to manage our working capital deficit primarily with net operating cash flow and dividends from our equity-accounted joint ventures, debt refinancings, and, to a lesser extent, existing undrawn revolving credit facilities. As at December 31, 2018, we had undrawn revolving credit facilities of $175.6 million. Please read “Item 18 - Financial Statements: Note 14a - Commitments and Contingencies” for information about required funding over the next 12 months.

As described under “Item 4 – Information on the Partnership: B. Operations - Regulations,” 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 cash flow for the periods presented:~~

(in thousands of U.S. Dollars) Year Ended December 31,
2018 2017 2016
Net cash flow from operating activities 131,198
218,750
194,362
Net cash flow from financing activities 385,085
643,951
178,019
Net cash flow used for investing activities (632,854 ) (766,439 ) (343,208 )

~~Operating Cash Flows.~~ Net cash flow from operating activities decreased to $131.2 million in 2018 from $218.8 million in 2017, primarily due to the payment of the tax indemnification liability in our consolidated Teekay Nakilat Joint Venture; decrease in cash flows from our seven multi-gas carriers; decrease in cash flows from our two conventional tankers trading in the spot market, ~~and then sold~~which can contribute to volatility of our net operating cash flow. Variability in ~~2018; the~~ ~~Polar Spirit~~ ~~earning a lower time-charter rate upon redeployment; the sales of the~~ ~~Asian Spirit~~ ~~and~~ ~~Teide Spirit~~ ~~conventional tankers in March 2017 and February 2018, respectively; and decrease in dividends received from~~ our ~~equity-accounted joint ventures. These decreases were partially offset by an increase in~~net operating cash flows ~~generated by~~also reflects, among other factors: changes in interest rates; fluctuations in working capital balances; the ~~deliveries to us of the~~ ~~Torben Spirit, Macoma, Murex, Magdala, Myrina, Megara, Bahrain Spirit~~ timing and ~~Sean Spirit~~ ~~LNG carriers between February 2017 and December 2018 and the~~ ~~Magellan Spirit~~ ~~chartered-in from the Teekay LNG-Marubeni Joint Venture commencing its charter-out employment in October 2018.~~

Net cash flow from operating activities increased to $218.8 million in 2017 from $194.4 million in 2016, primarily due to the deliveries of our LNG carrier newbuildings and commencement of their charter contracts during 2016 and 2017; an increase in the amount of ~~dividends received from our equity-accounted joint ventures; six days~~dry-docking expenditures; repairs and maintenance activities; the number of ~~scheduled off-hire during the first quarter of 2016 due to an in-water survey for the~~ ~~Catalunya Spirit~~;vessels in service and vessel acquisitions or vessel dispositions; and the timing of ~~settlement of advances to and from affiliates~~. ~~These increases were partially offset by the sales of the~~ ~~Bermuda Spirit, Hamilton Spirit~~ ~~and~~ ~~Asian Spirit~~ in April 2016, May 2016 and March 2017, respectively; reduced revenues in 2017 for uncollected hire invoices relating to our six LPG carriers on charter to Skaugen; 35 days of unscheduled off-hire in the second quarter of 2017 due to repairs required for one of our LNG carriers; the ~~Hispania Spirit~~ ~~being off-hire for 31 days in the first quarter of 2017 for a scheduled dry docking; lower spot rates earned by the~~ ~~European Spirit~~ ~~and~~ ~~African Spirit~~ after their fixed-rate charter contracts expired in August and November 2017, respectively; an increased amount of dry-docking expenditures in 2017; and one additional calendar day in the first quarter of 2016.

Net cash flow from operating activities depends upon the timing and amount of dry-docking expenditures, repair and maintenance activity, the impact of vessel additions and dispositions on operating cash flows, foreign currency rates, changes in interest rates, timing and amounts of dividends received or return of capital from equity-accounted investments, fluctuations in working capital balances and spot market hire rates (to the extent we have vessels operating in the spot tanker market or our hire rates are partially affected by spot market rates).investments. The number of vessel dry dockings tends to vary each period depending on ~~the vessels’~~our vessels' maintenance ~~schedule.~~schedules and required maintenance.

Our equity-accounted joint ventures are generally required to distribute all available cash to their owners. However, we do not have full control over the ~~timing~~operations of, nor do we have any legal claim to the revenue and ~~amount of dividends from each~~expenses of our investments in our equity-accounted joint ventures. Consequently, the cash flow generated by our investments in equity-accounted joint ventures may not ~~necessarily coincide with~~be available for use by us in the ~~operating~~period that such cash ~~flow generated from each respective equity-accounted joint venture.~~flows are generated. The timing and amount of dividends distributed by our equity-accounted joint ventures are affected by the timing and amounts of debt repayments in the joint ventures, capital requirements of the joint ventures, as well as any cash reserves maintained in the joint ventures for operations, capital expenditures, dry-docking expenditures and/or as required under financing agreements.

~~Financing Cash Flows.~~ ~~Net cash flow~~Our other sources of funds include borrowings from ~~financing activities decreased~~debt facilities, borrowings from obligations related to $385.1 million in 2018 from $644.0 million in 2017 primarily due to an increase in debt prepayments and repayments including settlement of related swaps of $540.8 million primarily in relation to completion of refinancings during 2018; $370.1 million of net proceeds we received from the sale-leaseback financing transactions for the deliveries of the ~~Magdala, Myrina~~ ~~and~~ ~~Megara~~ ~~during 2018, compared to $656.9 million in 2017; $164.4 million increase in~~finance leases, net proceeds from the issuances of debt or equity ~~offerings due~~securities and, to a lesser extent, the ~~issuance~~proceeds from vessel sales. Certain of these sources of funds are described in "Item 18 – Financial Statements: Note 5a – Chartered-in Vessels and Note 10 – Long-Term Debt."

Our primary uses of cash include the payment of operating expenses, dry-docking expenditures, costs associated with modifications to our vessels, committed capital expenditures, debt service costs, interest rate swap and cross currency swap settlements, scheduled repayments of long-term debt, scheduled repayments of our obligations related to finance leases, our quarterly distributions, including payments of distributions on our Series A and Series B Preferred Units ~~in October 2017; increase in repayments of obligations related~~and common units, and funding any preferred unit repurchases we may undertake, as well as funding our other working capital requirements. In addition, we use cash to ~~capital leases of $17.7 million due~~acquire or build vessels to ~~sale-leaseback financing transactions completed during 2018 and 2017; a $13.7 million increase in cash distributions paid as a result of~~grow the ~~issuance~~size of our ~~Series B Preferred Units~~fleet or make investments in October 2017; and $3.8 million used to repurchase common units during 2018. These decreases in cash flows from financing activities were partially offset by a $769.2 million increase in net proceeds from the issuance of long-term debt for refinancings completed in 2018 and the timing of drawdowns on certain of our existing debt facilities.

Net cash flow from financing activities increased to $644.0 million in 2017 from $178.0 million in 2016 primarily as a result of: a total of $366.9 million in lower debt prepayments and repayments as the term loans associated with the sales of the ~~Bermuda Spirit~~ ~~and~~ ~~Hamilton Spirit~~ ~~were~~prepaid in 2016; an increase of $301.6 million in proceeds from the sale-leaseback financing transactions completed on our LNG carrier newbuildings during 2017; and $43.7 million higher net proceeds from equity offerings due to the issuance of our Series B Preferred Units in October 2017. These increases in cash flows from financing activities were partially offset by: a $215.9 million decrease in net proceeds from the issuance of long-term debt, primarily due to the timing of drawdowns on certain of our existing debt facilities; a $20.4 million increase in capital lease repayments during 2017 due to the sale-leaseback financing transactions completed in 2016 and 2017; and a $11.2 million increase in cash distributions paid as a result of the issuance of our Series A Preferred Units in October 2016.

~~Investing Cash Flows.~~ Net cash flow used for investing activities decreased to $632.9 million in 2018 compared to $766.4 million in 2017 primarily due to $686.1 million cash expenditures for vessels and equipment, primarily for newbuilding installment payments and shipbuilding supervision costs for our LNG carrier newbuildings during 2018, compared to $708.6 million during 2017; our contribution of $40.5 million to our equity-accounted joint ventures ~~during 2018, compared~~for them to ~~$183.9 million during 2017, primarily~~acquire or build vessels. The timing of any newbuilding vessel orders or vessel acquisition activity may vary significantly from year to fund project expenditures in the Yamal LNG Joint Venture, the Bahrain LNG Joint Venture, and the Pan Union Joint Venture, and for working capital requirements for the Teekay LNG-Marubeni Joint Venture; and net proceeds received from the sale of our 50% ownership interest in the Excelsior Joint Venture in March 2018 of $54.4 million and proceeds from the sales of the ~~African Spirit~~ ~~and~~ ~~European Spirit~~ ~~in October 2018 and December 2018, respectively, of $28.5 million compared to $20.6 million of proceeds from the sale of the~~ ~~Asian Spirit~~ in March 2017. These decreases in cash used for investing activities were partially offset by $92.3 million return of capital we received in 2017 from the RasGas 3 Joint Venture and the Yamal LNG Joint Venture upon completion of their debt refinancings.year.

Net cash flow used for investing activities increased to $766.4 million in 2017 compared to $343.2 million in 2016. During 2017, we used $708.6 million in cash, primarily for scheduled newbuilding installment payments and shipbuilding supervision costs for our LNG carrier newbuildings compared to $345.8 million during 2016; in March 2017, we received $20.6 million in proceeds from the sale of the ~~Asian Spirit, compared to $94.3 million from the sales of the~~ ~~Bermuda Spirit~~ ~~and~~ ~~Hamilton Spirit~~ in April 2016 and May 2016, respectively; we contributed $183.9 million to our equity-accounted joint ventures in 2017 compared to $120.9 million during 2016, primarily to fund newbuilding installments in the Yamal LNG Joint Venture and project expenditures for the Bahrain LNG project; and during 2017, our receipts from direct financing leases were decreased by $10.5 million, primarily due to our lease payment deferral agreement with Awilco. These increases in cash used for investing activities were partially offset by $40.3 million and $52.0 million returns of capital we received in 2017 from the RasGas 3 Joint Venture and the Yamal LNG Joint Venture, respectively, upon completion of their debt refinancings, compared to $5.5 million of distributions we received during 2016 as a repayment of a shareholder loan from the Exmar LPG Joint Venture.

~~Credit Facilities and Capital Leases~~

Our revolving credit facilities, term loans and obligations related to ~~capital~~finance leases are described in "Item 18 – Financial Statements: Note 55a – Chartered-in Vessels and Note 10 – Long-Term Debt." Our ~~term loans,~~ revolving credit facilities, term loans and obligations related to ~~capital~~finance leases contain covenants and other restrictions typical of debt financing secured by vessels, ~~including, among others, one or more of the following that~~which restrict the ~~ship-owning~~vessel-owning or lessee subsidiaries from:

•incurring or guaranteeing indebtedness;

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

~~making~~•paying dividends or distributions if wethey 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; and

•entering into a new line of business.

Certain ~~loan agreements~~of our credit facilities and obligations related to finance leases require ~~(a) that minimum levels of tangible net worth and aggregate liquidity be maintained, (b) that we~~us to maintain ~~certain ratios of vessel values as it relates to the relevant outstanding loan principal balance, (c) that~~financial covenants. If we do not ~~exceed~~meet these financial covenants, the lender or lessor may limit our ability to borrow additional funds under our credit facilities and accelerate the repayment of our revolving credit facilities, term loans and obligations related to finance leases, which would have a ~~maximum amount~~significant impact on our short-term liquidity requirements. The terms of ~~leverage~~ and ~~(d)~~compliance with these financial covenants are described in further detail in "Item 18 – Financial Statements: Note 5a – Chartered-in Vessels and Note 10 – Long-Term Debt" included in this Annual Report. Certain of our debt facilities and obligations related to finance leases require us to make interest payments based on LIBOR, NIBOR or EURIBOR. Significant increases in interest rates could adversely affect results of operations and our ability to service our debt; however, as part of our strategy to minimize financial risk, we use interest rate swaps and cross currency swaps to reduce our exposure to market risk from changes in interest rates. Our current positions are described in further detail in "Item 18 - Financial Statements: Note 13 – Derivative Instruments and Hedging Activities" and the extent of our exposure to changes in interest rates is described in further detail in "Item 11 – Quantitative and Qualitative Disclosures About Market Risk”.

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:


(in thousands of U.S. Dollars)	Year Ended December 31,
	2021	2020
Net cash flow from operating activities	198,858	613,505
Net cash flow used for financing activities	(283,771)	(607,380)
Net cash flow used for investing activities	(30,973)	(1,473)

Net Operating Cash Flow

Net cash flow from operating activities decreased by $414.6 million to $198.9 million in 2021 from $613.5 million in 2020, primarily due to: $260.4 million in cash flows generated by receipts from the sale of the WilForce and WilPride sales-type leases in January 2020; $91.4 million due to the timing of settlements of non-cash working capital in 2021 compared to 2020; $33.8 million due to the termination of an interest rate swap agreement during 2021; and $19.8 million due to additional off-hire related to scheduled drydockings and vessel upgrades on certain of our LNG carriers during 2021. These decreases were partially offset by $15.7 million due to lower operational claims on certain of our LNG carriers during 2021.

Net Financing Cash Flow

Net cash flow used for financing activities decreased by $323.6 million to $283.8 million in 2021 from $607.4 million in 2020. The change was primarily due to: a $360.5 million decrease in debt prepayments during 2021 (which includes the prepayment of debt collateralized by the WilForce and WilPride LNG carriers upon their sales in January 2020 and higher prepayments on revolving credit facilities in 2020); a $61.0 million increase in net proceeds from the issuance of long-term debt during 2021; $15.6 million of cash used to repurchase common units during 2020; and $2.2 million of cash used to acquire the non-controlling interest in certain of our subsidiaries during 2020. These decreases in cash used for financing activities were partially offset by: a $97.1 million increase in scheduled repayments of long-term debt primarily due to ~~maintain restricted~~the scheduled maturity of one term loan and certain NOK-denominated bonds in 2021, partially offset by the scheduled maturity of certain NOK-denominated bonds in 2020; and a $19.8 million increase in cash ~~deposits. As at December 31, 2018, we had three facilities with an aggregate outstanding loan balance~~distributions paid during 2021 as a result of ~~$442.2~~increases in cash distributions on common units in May 2020 and May 2021.

Net Investing Cash Flow

Net cash flow used for investing activities increased by $29.5 million ~~that require us~~ to ~~maintain minimum vessel-value-to-outstanding-loan-principal-balance ratios ranging~~$31.0 million in 2021 from ~~115%~~$1.5 million in 2020 primarily due to ~~135%, which as at December 31, 2018 ranged from 132%~~a $31.5 million increase in cash expenditures for vessels and equipment primarily related to ~~198%. The vessel values used~~upgrades on certain of our LNG carriers in ~~calculating these ratios~~2021.

Liquidity

Our primary sources of liquidity are ~~the appraised values~~cash and cash equivalents, net operating cash flow provided by ~~third parties where available or prepared by us based on second-hand sale and purchase market data. Since vessel values can be volatile,~~ our estimate of market value may not be indicative of either the current or future price that could be obtained if the related vessel was actually sold. Our ship-owning subsidiaries may not, among other things, pay dividends oroperations, cash distributions if they are in default under their term loans or revolving credit facilities and one of the term loans in the Teekay Nakilat Joint Venture requires it to satisfy a minimum vessel value to outstanding loan principal balance ratio to pay dividends. In addition, we guarantee certain obligations related to capital leases, which require us to maintain minimum levels of tangible net worth and aggregate liquidity, and not to exceed a maximum amount of leverage. As at December 31, 2018, we andreceive from our ~~affiliates were in compliance with all covenants relating to~~equity-accounted joint ventures, our undrawn credit facilities and capital ~~leases.~~raised through financing transactions. Our cash management policies have a primary objective of minimizing both the probability of loss and return volatility, as well as ensuring that securities purchased can be sold readily and efficiently. A secondary objective is ensuring an appropriate return. The nature and extent of amounts that can be borrowed under our revolving credit facilities is described in "Item 18 - Financial Statements: Note 10 - Long-term Debt" of this Annual Report.

~~Contractual Obligations~~Our total liquidity, which consists of cash, cash equivalents and ~~Contingencies~~undrawn credit facilities, decreased by $134.1 million to $327.5 million in 2021 from $461.6 million in 2020. This decrease is primarily due to: $221.7 million of repayments and prepayments of our non-revolving long-term debt and obligations related to finance leases, net of proceeds from the drawdown and issuance of long-term debt; $124.2 million of cash distributions paid; and $42.0 million in cash expenditures for vessels and equipment primarily related to upgrades on certain of our LNG carriers; partially offset by $198.9 million of net operating cash flows generated during 2021; a $45.6 million increase in the borrowing capacity of our revolving credit facilities; and $11.0 million of proceeds from repayments of advances to equity-accounted joint ventures.

The following table summarizes our contractual obligations as at December 31, ~~2018:~~

2021, excluding those of our equity-accounted joint ventures. We expect our liquidity at December 31, 2021, excluding the component from our undrawn revolving credit maturing in 2022, plus the operating cash flow we expect to generate in 2022 substantially from customer contracts in place at December 31, 2021, will be sufficient to pay our obligations

Total 2019 2020 2021 2022 2023
Beyond
2023
(in millions of U.S. Dollars)
U.S. Dollar-Denominated Obligations:
Long-term debt:⁽¹⁾

Scheduled repayments 610.6
108.6
102.7
71.3
58.9
55.3
213.8
Repayments at maturity 830.2
3.3
368.8
166.9
5.0
—
286.2
Commitments related to capital leases⁽²⁾
1,734.2
143.7
118.7
117.8
117.0
116.3
1,120.7
Commitments related to operating leases⁽³⁾
284.7
47.6
39.9
23.9
23.9
23.9
125.5
Newbuilding installments/shipbuilding supervision⁽⁴⁾
652.2
652.2
—
—
—
—
—
Total U.S. Dollar-denominated obligations 4,111.9
955.4
630.1
379.9
204.8
195.5
1,746.2
Euro-Denominated Obligations:⁽⁵⁾

Long-term debt⁽⁶⁾
193.8
24.7
25.8
27.0
28.2
59.6
28.5
Total Euro-denominated obligations 193.8
24.7
25.8
27.0
28.2
59.6
28.5
Norwegian Kroner-Denominated Obligations:⁽⁵⁾

Long-term debt⁽⁷⁾
353.0
—
115.7
138.9
—
98.4
—
Total Norwegian Kroner-Denominated obligations 353.0
—
115.7
138.9
—
98.4
—
Totals 4,658.7
980.1
771.6
545.8
233.0
353.5
1,774.7

~~(1)~~

~~Excludes expected interest payments of $62.5 million (2019~~), ~~$49.9 million (2020), $34.9 million (2021), $28.9 million (2022), $26.1 million (2023) and $71.4 million~~ (beyond 2023). Expected interest payments are based on the existing interest rates (fixed-rate loans) and LIBOR at December 31, 2018, plus margins on debt that has been drawn that range up to 3.25% (variable-rate loans). The expected interest payments do not reflect the effect of related interest rate swaps that we have used as an economic hedge for certaincoming due in 2022. We expect our liquidity in 2022 will be further supplemented by the refinancing of our revolving credit maturing in 2022. Our ability to pay our ~~variable-rate debt. In addition, the above table does not reflect scheduled debt repayments in our equity-accounted joint ventures.~~

~~(2)~~

~~Includes, in addition to lease payments, amounts we may be or are required to pay to purchase the leased vessels at the end of their respective lease terms. For one of our nine~~ obligations coming due subsequent to 2022 and refinance our long-term debt and finance leases coming due subsequent to 2022 will depend on, among other things, our ability to continue to service our long-term charter contracts, our financial condition and the condition of credit markets in the months leading up to the maturity dates. In addition, as at December 31, 2021, we did not have any significant capital commitments related to capital leases, the vessel was sold by the owner in January 2019 and the full amount of the associated lease obligation of $24.0 million was extinguished when we returned the vessel to the owner. Please read “Item 18 - Financial Statements: Note 5d - Chartered in Vessels and Note 20b - Subsequent Events”.


~~(3)~~	~~We have corresponding leases whereby we are the lessor and expect to receive approximately $217.8 million under these leases from 2019 to 2029.~~


~~(4)~~	As of December 31, 2018, we have an agreement for the construction of one wholly-owned LNG carrier newbuilding, for which the estimated remaining cost for this newbuilding totaled $120.4 million, including estimated interest and construction supervision fees. We have secured $159 million of financing related to the commitments for the LNG carrier newbuilding included in the table above.

~~As part of~~ the acquisition of ~~an ownership interest~~new or second-hand vessels. However, we expect to bid on selected LNG projects in the ~~Pan Union Joint Venture,~~future and if we ~~agreed to assume Shell’s obligation to provide shipbuilding supervision and crew training services for the four LNG carrier newbuildings and to fund our proportionate share~~are awarded any of the remaining newbuilding installments. The estimated remaining costs for the shipbuilding supervision and crew training services and our proportionate share of newbuilding installments totaled $29.2 million as of December 31, 2018. However, as part of this agreement with Shell,such contracts, it is expected that we recovered $0.2 million of the shipbuilding supervision and crew training costs from Shell in 2019. The Pan Union Joint Venture has secured undrawn financing of $24 million based on our proportionate share of the remaining newbuilding installments included in the table above.

~~In July 2014, the Yamal LNG Joint Venture, in which we have a 50% ownership interest, entered~~would concurrently enter into ~~agreements for the~~ construction of six ARC7 LNG carrier newbuildings, of which two delivered in 2018. As at December 31, 2018, our 50% share of the estimated remaining costs for the four remaining newbuildings totaled $436.1 million, of which the Yamal LNG Joint Venture has secured undrawn financing of $395 million based on our proportionate share of the remaining newbuilding installments included in the table above.

The Bahrain LNG Joint Venture, in which we have a 30% ownership interest, is developing an LNG receiving and regasification terminal in Bahrain. The project will be owned and operated under a 20-year agreement commencing in mid-2019 with an estimated fully-built up cost of approximately $903.1 million. As at December 31, 2018, our 30% share of the estimated remaining costs included in the table above is $66.5 million, of which the Bahrain LNG Joint Venture has secured undrawn debt financing of $58 millioncontracts related to new vessels. In addition, we may expand the size of our ~~proportionate share.~~fleet through the purchase of second-hand vessels. Our ability to continue to expand the size of our fleet over the long-term is dependent upon our ability to generate operating cash flow, obtain long-term bank borrowings, sale-leaseback financings and other debt, as well as our ability to raise debt or equity financing through public or private offerings.

~~(5)~~

~~Euro-denominated and NOK-denominated obligations are presented in U.S.~~


	Total	2022	2023	2024	2025	2026	Beyond 2026
	(in millions of U.S. Dollars)
U.S. Dollar-Denominated Obligations:
Long-term debt:
Scheduled repayments	417.5	78.8	75.9	73.4	71.1	48.2	70.1
Repayments at maturity	538.8	50.0	115.0	22.1	—	242.8	108.9
Commitments related to finance leases(1)	1,602.8	137.0	135.5	132.0	129.7	305.5	763.1
Commitments related to operating leases(2)	184.8	35.1	24.0	23.9	23.9	23.9	54.0
Equipment and other construction contract costs(3)	24.2	24.2	—	—	—	—	—
Total U.S. Dollar-denominated obligations	2,768.1	325.1	350.4	251.4	224.7	620.4	996.1
Euro-Denominated Obligations:(4)
Long-term debt	115.4	28.0	59.2	28.2	—	—	—
Total Euro-denominated obligations	115.4	28.0	59.2	28.2	—	—	—
Norwegian Krone-Denominated Obligations:(4)
Long-term debt	323.2	—	96.4	—	113.4	113.4	—
Total Norwegian Krone-denominated obligations	323.2	—	96.4	—	113.4	113.4	—
Totals	3,206.7	353.1	506.0	279.6	338.1	733.8	996.1

(1)Includes, in addition to lease payments, amounts we are required to pay to purchase the leased vessels at the end of their respective lease terms.

(2)We have corresponding leases whereby we are the lessor and expect to receive approximately $167.5 million under these leases from 2022 to 2028.

(3)Please read "Item 18 – Financial Statements: Note 14a – Commitments and Contingencies”.

(4)Euro and NOK-denominated obligations are presented in U.S Dollars and have been converted using the prevailing exchange ~~rate as of December 31, 2018.~~

~~(6)~~

Excludes expected interest payments of $2.2 million (2019) $1.9 million (2020), $1.5 million (2021), $1.2 million (2022) $0.8 million (2023) and $0.3 million (beyond 2023). Expected interest payments are based on EURIBOR at December 31, 2018, plus margins that range up to 1.95%, as well as the prevailing U.S. Dollar/Euro exchange rate as of December 31, 2018. The expected interest payments do not reflect the effect of related interest rate swaps that we have used as an economic hedge of certain of our variable-rate debt.


~~(7)~~	~~Excludes expected interest payments of $21.2 million (2019~~), $18.4 million (2020), $10.6 million (2021) $5.7 million (2022) and $2.9 million (2023). Expected interest payments are based on NIBOR at December 31, 2018, plus margins that range up to 6.0%, as well as the prevailing U.S. Dollar/NOK exchange

rate as of December 31, ~~2018. The expected interest payments do not reflect the effect~~2021.

Other risks and uncertainties related to our liquidity include resolution of ~~the related cross currency swaps that we have used~~contingent liabilities as ~~an economic hedge of our foreign exchange and interest rate exposure associated with our NOK-denominated long-term 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. The details of our equity-accounted investments are shownoutlined in "Item 18 – Financial Statements: Note 714c – ~~Equity-Accounted Investments."~~Commitments and Contingencies". We also guarantee our proportionate share of certain loan facilities and obligations on interest rate swaps for certain of our equity-accounted joint ventures. As at December 31, 2021, this proportionate share, based on the aggregate principal amount of the loan facilities and the fair value of the interest rate swaps as at December 31, 2021, was $1.3 billion. As at December 31, 2021, with the exception of debt service coverage ratio breaches for three of the vessels in the Angola Joint Venture, all of our equity-accounted joint ventures were in compliance with all covenants relating to these loan facilities that we guarantee. The Angola Joint Venture expects to obtain a waiver for the covenant requirements that were not met at December 31, 2021, with such waiver being valid until the next compliance test at June 30, 2022, similar to the waivers obtained in March 2021 and October 2021. If such guarantees were to be called upon, it could have a significant financial impact on us. As described under “Item 4 – Information on the Company: B. Operations - Regulations,” passage of any climate control legislation or other regulatory initiatives that restrict emissions of GHGs could have a significant financial and operational impact on our business, which we cannot predict with certainty at this time. These or other 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 GHG emissions, or administer and manage a GHG emissions program. In addition, increased regulation of GHGs may, in the long term, lead to reduced demand for gas and reduced demand for our services.

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 the 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.”

Credit Losses

In June 2016, the Financial Accounting Standards Board issued ASU 2016-13. ASU 2016-13 introduced a new credit loss methodology, which requires earlier recognition of credit losses, while providing additional transparency about credit risk. This new credit loss methodology utilizes a lifetime expected credit loss measurement objective for the recognition of credit losses for net investments in direct financing and sales-type leases, loans to equity-accounted joint ventures, guarantees of secured loan facilities of equity-accounted joint ventures, non-operating lease accounts receivables, contracts assets and other receivables at the time the financial asset is originated or acquired. The expected credit losses are subsequently adjusted each period for changes in expected lifetime credit losses. This methodology replaced multiple impairment methods under previous GAAP for these types of assets, which generally required that a loss be incurred before it was recognized. We adopted ASU 2016-13 on January 1, 2020.

A substantial majority of our exposure to potential credit losses relates to our direct financing and sales-type leases, including those within our equity-accounted joint ventures. See "Item 18 – Financial Statements: Note 3b – Financial Instruments" for a description of these direct financing and sales-type leases.

Judgments and Uncertainties. ASU 2016-13 gives entities the flexibility to select an appropriate method to measure the estimate of expected credit losses. That is, entities are permitted to use estimation techniques that are practical and relevant to their circumstances, as long as they are applied consistently over time and aim to faithfully estimate expected credit losses. We have determined the credit loss provision related to the lease receivable component of the net investment in direct financing and sales-type leases using an internal historical loss rate method. We concluded that using a loss rate method which is primarily based on internal historical data is inherently more representative than primarily using external data, which may include all industries, or all oil and gas or all marine transportation, which are not as comparable. In addition, a substantial majority of our customers are private single-purpose entities or subsidiaries or joint ventures of larger listed-entities that do not publish financial information nor do they have published credit ratings determined by credit rating agencies. In the limited circumstances where relevant and reliable external data is available and where judged to be appropriate, we have considered such data in making adjustments to our internally derived loss rate. Judgment is required to determine the applicability and reliability of the external data used. The credit loss provision for the residual value component of net investment in direct financing and sales-type leases is based on the current estimated fair value of the vessel as depreciated to the end of the charter contract as compared to the expected carrying value, with such potential gain or loss on maturity being included in the credit loss provision in increasing magnitude on a straight-line basis the closer the contract is to its maturity. Given the volatility in vessel values, the selection of the method to estimate the credit loss provision for the residual value component involves judgment.

We believe that the assumptions used to estimate our expected credit losses are reasonable at the time they are made. We can make no assurances, however, as to whether our estimates will be accurate.

In addition to the judgment used in selecting the methods to measure the credit loss provision, there is also judgment used in applying the methods. We have used judgment in determining whether or not the risk characteristics of a specific direct financing lease or sales-type lease at the measurement date are consistent with those used to measure the internal historical loss rate, and to determine whether we expect current conditions and reasonable and supportable forecasts to differ from the conditions that existed to measure the internal historical loss rate. In addition, judgment has been used to determine the internal historical loss rate, as it is based in part on estimates of the occurrence or non-occurrence of future events which will dictate the amount of recoveries earned or additional losses incurred associated with known losses incurred to date. Judgment has also been used to determine the adjustment required to the internal historical loss rate, in those circumstances where relevant and reliable external data was identified. Furthermore, the current estimated fair value of the vessels used in our estimate of expected credit losses for direct financing and sales-type leases has been determined based on appraised values, such appraised values are normally completed by us using second-hand sale and purchase data and other information provided by third parties. Judgment is used when vessels sold are different in age, size and technical specifications compared to our vessels. Since vessel values can be volatile, our estimates may not be indicative of either the current or future prices we could obtain if we sold any of the vessels.

Effect if Actual Results Differ from Assumptions. To the extent the methods, and judgments used in applying these methods, that we use to measure our estimate of expected credit losses results in a credit loss provision that is different from actual results, our credit loss provision at the end of each period and the change in the credit loss provision in each period will be different than what would have otherwise been. More specifically, if the judgments used in determining our unadjusted historical loss rate for our direct financing and sales-type leases results were changed and such changes resulted in a 5% increase (decrease) to our unadjusted historical loss rate, our 2021 net income before non-controlling interest and total equity would have both decreased (increased) by $1.8 million. In addition, if we had increased (decreased) our estimates of the residual value of the vessels by 5%, our 2021 net income before non-controlling interest and total equity would have both increased (decreased) by $10.9 million.

Vessel ~~Lives and Impairment~~Depreciation

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.~~newbuildings, among other factors. Both charter rates and newbuilding costs tend to be cyclical in nature.

Judgments and Uncertainties. For the years ended December 31, 2021, 2020, and 2019, depreciation is calculated using an estimated useful life of 30 years for LPG carriers and 35 years for LNG carriers, commencing the date the vessel is delivered from the shipyard, or a shorter period if regulations prevent us from operating the vessels for those periods of time. The estimated useful life of our vessels involves an element of judgment, which takes into account design life, commercial considerations and regulatory restrictions.

Effect if Actual Results Differ from Assumptions. 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 depreciation expense. A longer actual useful life will result in a decrease in depreciation expense. Had we depreciated our LPG carriers and LNG carriers using an estimated useful life of 25 years instead of 30 years for our LPG carriers and an estimated

useful life of 30 years instead of 35 years for our LNG carriers effective December 31, 2020, our depreciation for the year ended December 31, 2021 would have increased by $47.0 million.

Vessel Impairment

Description.We review vessels and equipment for impairment whenever events or circumstances indicate the carrying value of an asset, including the carrying value of the charter contract, if any, under which the vessel is employed, may not be recoverable. This occurs when the asset’s carrying value is greater than the future undiscounted cash flows the asset is expected to generate over its remaining useful life. ~~For a vessel under charter, the discounted cash flows from that vessel may exceed its market value, as market values may assume the vessel is not employed on an existing charter.~~ If the estimated future undiscounted cash flows of an asset exceed the asset’s carrying value, no impairment is ~~recognized even though the fair value of the asset may be lower than its carrying value.~~recognized. 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~~The estimated fair value is ~~calculated as~~determined using discounted cash flows or appraised values. In cases where an active second-hand sale and purchase market does not exist, we use a discounted cash flow approach to estimate the ~~net present~~fair value of ~~estimated~~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 we would expect to receive if we were to sell the vessel. Such appraisal is normally completed by us and is based on second-hand sale and purchase data, and other information provided by third parties. 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.

Judgments and Uncertainties. Our estimates of future cash flows involve assumptions about future charter rates, vessel utilization, operating expenses, dry-docking expenditures, vessel residual values and the remaining estimated life of our vessels. Our estimated charter rates are based on rates under existing vessel contracts and market rates at which we expect we can re-charter our vessels. Such market rates are based on a 10-year historical industry average of spot charter rates taking into account the propulsion type and size of the vessel, except for LNG carriers with a steam turbine propulsion system in which case a five-year historical industry average is used due to this type of vessel being less efficient than newer vessels and management viewing the five-year historical average as more representative of the future outlook for this type of vessel.

Our estimates of vessel utilization, including estimated off-hire time, are based on historical experience. 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 calculation of depreciation.

In our experience, certain ~~circumstances,~~assumptions relating to our estimates of future cash flows are more predictable by their nature, including estimated revenue under existing contract terms and on-going operating costs. Certain assumptions relating to our estimates of future cash flows require more judgment 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 potential regulatory changes, the volatility in vessel charter rates and vessel values, as well as the probability of vessel sales. 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 ~~approximate~~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 ~~estimated market~~excess of the carrying value of the ~~vessel.~~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 in periods subsequent to the vessel impairment. Consequently, any changes in our estimates of future undiscounted cash flows may result in a different conclusion as to whether a vessel or equipment is impaired, leading to a different impairment amount, including no impairment, and a different future annual depreciation expense.

Our business model is to employ our vessels on fixed-rate contracts primarily with large energy companies and their transportation subsidiaries. These contracts generally have original terms between five to 25 years in length. Consequently, while the market value of a vessel may decline below its carrying value, the carrying value of a vessel may still be recoverable based on the future undiscounted cash flows the vessel is expected to obtain from servicing its existing contract and future contracts.

~~The~~Consistent with our methodology and disclosures in prior years, the following table presents ~~by segment~~ the aggregate market values and carrying values of certain of our vessels that we have determined have a market value that is less than their carrying value as of December 31, ~~2018. Specifically, the following table reflects all such vessels, except~~2021. We have excluded those assets operating on charter contracts where the remaining term is significant and the estimated future undiscounted cash flows relating to such charter contracts are sufficiently greater than the carrying value of the vessels such that we consider it unlikely an impairment would be recognized in ~~the following year. Consequently, the vessels included in the following table generally include those vessels near the end of existing charters or other operational contracts.~~2022. While the market values of these vessels ~~are~~may be below their carrying values, no impairment has been recognized on any of these vessels as the estimated future undiscounted cash flows relating to such vessels are greater than their carrying values.

We would consider the vessels reflected in the following table to be at a higher risk of future ~~impairment. The~~impairment compared to other vessels in our fleet. As noted in the footnotes to the table, all the vessels in this table have estimated future undiscounted cash flows ~~of the vessels reflected in the following table~~that are either marginally or significantly greater than their respective carrying values. ~~Consequently,~~The recognition of an impairment in ~~these cases,~~ the ~~following table would not necessarily represent~~future may be more likely for those vessels that have estimated future undiscounted cash marginally greater than their respective carrying values. Vessels with estimated future cash flows significantly greater than their respective carrying values would likely only be impaired in the next 12 months ~~and the recognition of an impairment in the future for any of those vessels may primarily depend upon our deciding~~if we decided to dispose of a vessel instead of continuing to operate it. In deciding whether to dispose of a vessel, we determine whether it is economically preferable to sell a vessel or continue to operate it. This assessment includes an ~~estimate~~estimation of the net proceeds expected to be received if a 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 its existing charter, charter market outlook, estimated future vessel values 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.


(in thousands of U.S. Dollars, except number of vessels) Reportable Segment ___________________________________	Number of Vessels	Market Values⁽¹⁾$	Carrying Values $
Reportable Segment (in thousands of U.S. Dollars, except number of vessels)				Reportable Segment (in thousands of U.S. Dollars, except number of vessels)		Number of Vessels		Market Values(1) $		Carrying Values $
Liquefied Natural Gas Segment (2)				Liquefied Natural Gas Segment (2)		1		168,000		172,000
Liquefied Natural Gas Segment⁽²⁾⁽³⁾	1	31,000	64,593		5		169,000		417,000
Liquefied Petroleum Gas Segment⁽²⁾	2	69,250	81,823
Total	3	100,250	146,416	Total		6		337,000		589,000

~~L.L.C. (as borrowers) and China Development Bank. The loan bears interest at LIBOR plus 3.1% and requires semi-annual payments, with balloon payments upon maturity through 2031.~~

Exchange Controls and Other Limitations Affecting Unitholders

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,~~distributions, interest or other payments to holders of our securities that are non-resident and not ~~citizens.~~citizens and otherwise not conducting business or transactions in the Marshall Islands.

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 ~~partnership agreement.~~Company Agreement.

Material United States Federal Income Tax Considerations

The following is a discussion of certain material U.S. federal income tax considerations that may be relevant to unitholders. This discussion is based upon provisions of the ~~Internal Revenue~~ theCode, ~~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 LNG Partners L.P.~~Seapeak LLC.

This discussion is limited to unitholders who hold their units as capital assets for tax purposes. This discussion does not address all tax considerations that may be important to a particular unitholder in light of the unitholder’s circumstances, or to certain categories of unitholders 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 units 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 units (by vote or value); 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 units, 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 units should consult their tax advisors to determine the appropriate tax treatment of the partnership’s ownership of our ~~units~~.units.

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 unitholder is urged to consult its tax advisor regarding the U.S. federal, state, local, non-U.S. and other tax consequences of the ownership or disposition of our ~~units~~.units.

United States Federal Income Taxation of U.S. Holders

As used herein, the term U.S. Holder means a beneficial owner of our units 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

We ~~have~~ elected to be taxed as a corporation for U.S. federal income tax purposes effective January 1, 2019.

Subject to the discussion of ~~passive foreign investment companies (or~~ PFICs) below, any distributions made by us with respect to our units 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 allocated to the U.S. Holder’s units, as determined under U.S. federal income tax principles. Distributions in excess of our current and accumulated earnings and profits allocated to the U.S. Holder's units will be treated first as a nontaxable return of capital to the extent of the U.S. Holder’s tax basis in our units 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 units 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 received with respect to our units will be treated as foreign source income and generally will be treated as “passive category income.”

Subject to holding period requirements and certain other limitations, dividends received with respect to our units by 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 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). Any dividends received with respect to our units 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 stock if the amount of the dividend is equal to or in excess of 10% of a common stockholder’s, or 5% of a preferred stockholder’s, adjusted tax basis (or fair market value in certain circumstances) in such stock. In addition, extraordinary dividends include dividends received within a one-year period that, in the aggregate, equal or exceed 20% of a stockholder’s adjusted tax basis (or fair market value in certain circumstances). If we pay an “extraordinary dividend” on our units 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 units 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 units.

Sale, Exchange or Other Disposition of Units

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 units 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 units. Subject to the discussion of extraordinary dividends above, such gain or loss generally will be treated as ~~(a)~~(i) 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)~~(ii) 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 units. Non-Corporate U.S. Holders should consult their tax advisors regarding the effect, if any, of this tax on their disposition of our ~~units~~.units.

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, any other corporation or partnership in which the corporation directly or indirectly owns at least 25% of the stock or equity interests (by value) and any partnership in which the corporation directly or indirectly owns less than 25% of the equity interests (by value) to the extent the corporation satisfies an “active partner” test and does not elect out of “look through” treatment, either: ~~(a)~~(i) at least 75% of its gross income is “passive” income, or ~~(b)~~(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 and our look-through subsidiaries' 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 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. Moreover, the market value of our units may be treated as reflecting the value of our assets at any given time. Therefore, a decline in the market value of our units, which is not within our control, may impact the determination of whether we are a PFIC. Nevertheless, based on our and our look-through 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 look-through 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”~~“qualified electing fund” (or 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 units, as discussed below.

Taxation of U.S. Holders Making a Timely QEF Election

A U.S. Holder who makes a timely QEF election (or an Electing Holder) must report 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 units 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 units 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 units. 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 units 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 units 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 units 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 ~~units~~.units.

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 units 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 units, 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 units 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 units at the end of the taxable year over the U.S. Holder’s adjusted tax basis in the units.

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 units 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 units would be adjusted to reflect any such income or loss recognized. Gain recognized on the sale, exchange or other disposition of our units 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 units 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 units and for which ~~(a)~~(i) we were not a QEF with respect to such U.S. Holder and ~~(b)~~(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 units exceeds the U.S. Holder’s adjusted tax basis in the units 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 ~~(a)~~(i) any “excess distribution” (e.g. the portion of any distributions received by the Non- Electing Holder on our units 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 units), and ~~(b)~~(ii) any gain realized on the sale, exchange or other disposition of our units. Under these special rules:

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

•the amount allocated to the current taxable year and any taxable year prior to the taxable year we were first treated as a PFIC with respect to the Non-Electing Holder would be taxed as ordinary income in the current taxable year;

•the amount allocated to each of the other taxable years would be subject to U.S. federal income tax at the highest rate of tax in effect for the applicable class of taxpayer 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 holds our units, we are a PFIC, and the total value of all PFIC units that such U.S. Holder directly or indirectly holds 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 units. In addition, if a Non-Electing Holder, who is an individual, dies while owning our units, such Non-Electing Holder’s successor generally would not receive a step-up in tax basis with respect to such ~~units~~.units.

U.S. Holders are urged to consult their 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 and other available elections with respect to us, and the U.S. federal income tax consequences of making such elections.

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 units 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 tax advisors regarding the possible application of this disclosure requirement to their investment in our units.

United States Federal Income Taxation of Non-U.S. Holders

A beneficial owner of our units (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~~.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 units 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 trade or business within the United States and the distributions are deemed to be effectively connected to that trade or business (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), 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. In addition, a Non-U.S. Holder. that is a foreign corporation for U.S. federal income tax purposes may be subject to branch profits tax at a rate of 30% (or lower applicable treaty rate) on the after-tax earnings and profits attributable to such distributions.

Sale, Exchange or Other Disposition of Units

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 units unless ~~(a)~~(i) such gain is 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, is attributable to a permanent establishment that the Non-U.S. Holder maintains in the United States) or ~~(b)~~(ii) 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 trade or business (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), within the United States and the disposition of our units 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. In addition, a Non-U.S. Holder that is a foreign corporation for U.S. federal income tax purposes may be subject to branch profits tax at a rate of 30% (or lower applicable treaty rate) on the after-tax earnings and profits attributable to such gain.

Information Reporting and Backup Withholding

In general, distributions taxable as dividends with respect to, or the proceeds from a sale, redemption or other taxable disposition of, our units held by a Non-Corporate U.S. Holder will be subject to information reporting requirements, unless such distribution taxable as a dividend is paid and received outside the United States by a non-U.S. payor or non-U.S. middleman (within the meaning of ~~U.S.~~the Treasury Regulations), or such proceeds are effected through an office outside the U.S. of a broker that is considered a non-U.S. payor or non-U.S. middleman (within the meaning of ~~U.S.~~the Treasury Regulations). These amounts also generally will 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.

Information reporting and backup withholding generally will not apply to distributions taxable as dividends on our units to a Non-U.S. Holder if such dividend is paid and received outside the United States by a non-U.S. payor or non-U.S. middleman (within the meaning of ~~U.S.~~the Treasury Regulations) or the Non-U.S. Holder properly certifies under penalties of perjury as to its non-U.S. status (generally on IRS Form W-8BEN, W-8BEN-E, W-8ECI, ~~W-8EXP~~ or ~~W-8IMY,~~W-8EXP, as applicable) and certain other conditions are met or the Non-U.S. Holder otherwise establishes an exemption.

Payment of proceeds to a Non-U.S. Holder from a sale, redemption or other taxable disposition of our units to or through the U.S. office of a broker, or through a broker that is considered a U.S. payor or U.S. middleman (within the meaning of ~~U.S.~~the Treasury Regulations), generally will be subject to information reporting and backup withholding, unless the Non-U.S. Holder properly certifies under penalties of perjury as to its non-U.S. status (generally on IRS Form W-8BEN, W-8BEN-E, W-8ECI, ~~W-8EXP~~ or ~~W-8IMY,~~W-8EXP, as applicable) and certain other conditions are met or the Non-U.S. Holder otherwise establishes an exemption.

Backup withholding is not an additional tax. Rather, a Non-Corporate U.S. Holder or Non-U.S. Holder generally may obtain a credit for any amount withheld against its liability for U.S. federal income tax (and obtain 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 Taxation

Because we and our ~~controlled affiliates~~subsidiaries do not, and we do not expect that we ~~and our controlled affiliates~~or they will, conduct business, transactions or operations in the Republic of the Marshall Islands, and because all documentation related to issuance of shares of our common and preferred units was and is expected to be executed outside of the Republic of the Marshall Islands, under current Marshall Islands law, holders of our common and preferred units that are not citizens of and do not reside in, maintain offices in, or engage in business, operations, or transactions in the Republic of the Marshall Islands ~~neither we nor our controlled affiliates are~~will not be subject to ~~income,~~Marshall Islands taxation or withholding on distributions that we make to our unitholders. In addition, such unitholders will not be subject to Marshall Islands stamp, capital gains ~~profits~~ or other ~~taxation under current Marshall Islands law, other than~~ taxes ~~fines,~~on the purchase, ownership or ~~fees due to (i) the incorporation, dissolution, continued existence, merger, domestication (or similar concepts)~~disposition of ~~legal entities registered in~~our common and preferred units, and they will not be required by the Republic of the Marshall Islands (ii) filing certificates (such as certificates of incumbency, merger, or redomiciliation) with the Marshall Islands registrar, (iii) obtaining certificates of good standing from, or certified copies of documents filed with, the Marshall Islands registrar, (iv) compliance with Marshall Islands law concerning vessel ownership, such as tonnageto file a tax ~~or (v) non-compliance with requests made by the Marshall Islands registrar of corporations~~return relating to ~~our books and records and~~ the ~~books and records of our subsidiaries. As a result, distributions by controlled affiliates to us are not subject to Marshall Islands taxation.~~common or preferred units.

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. In other non-U.S. jurisdictions, ~~but~~ we ~~do not expect any such tax to be material.~~and our subsidiaries rely on statutory exemptions from tax. However, we cannot assure ~~this result~~that any statutory exemptions from tax on which we or our subsidiaries rely will continue as tax laws in ~~these or other~~those jurisdictions may change or we may enter into new business transactions relating to such jurisdictions, which could affect our or our subsidiaries' tax liability. Please read “Item 18 – Financial Statements: Note 11 – Income Tax.”

Canadian Federal Income Tax Considerations

Unless the context otherwise requires, references in this section to “we,” “our” or “us” are references to Seapeak LLC. The following discussion is a summary of the material Canadian federal income tax considerations under the ~~Income Tax Act (Canada) (or the~~ Canada Tax Act) that we believe are relevant to holders of units of Seapeak LLC (formerly Teekay LNG Partners L.P.) prior to the Conversion who, for the purposes of the Canada Tax Act and the Canada-United States Tax Convention 1980 (or the Canada-U.S. Treaty), are at all relevant times resident in the United States and entitled to all of the benefits of the Canada - U.S. Treaty and who deal at arm’s length with us ~~and Teekay Corporation~~ (or U.S. Resident Holders). This discussion takes into account all proposed amendments to the Canada Tax Act and the regulations thereunder that have been publicly announced by or on behalf of the Minister of Finance (Canada) prior to the date hereof and assumes that such proposed amendments will be enacted substantially as proposed. However, no assurance can be given that such proposed amendments will be enacted in the form proposed or at all.

~~Teekay LNG Partners L.P. is~~Prior to the Conversion, Seapeak LLC was considered to be a partnership under Canadian federal income tax law and therefore not a taxable entity for Canadian income tax purposes. A U.S. Resident Holder will not be liable to tax under the Canada Tax Act on any income or gains allocated by ~~Teekay LNG Partners L.P.~~Seapeak LLC to the ~~U.S. Resident Holder in respect of such~~ U.S. Resident Holder in respect of such U.S. Resident Holder’s units, provided that ~~(a) Teekay LNG Partners L.P.~~(i) Seapeak LLC does not carry on business in Canada for the purposes of the Canada Tax Act and ~~(b)~~(ii) such U.S. Resident Holder does not hold such units in connection with a business carried on by such U.S. Resident Holder through a permanent establishment in Canada for purposes of the Canada-U.S. Treaty.

A U.S. Resident Holder will not be liable to tax under the Canada Tax Act on any income or gain from the sale, redemption or other disposition of such U.S. Resident Holder’s units, provided that, for purposes of the Canada-U.S. Treaty, such units do not, and did not at any time in the twelve-month period preceding the date of disposition, form part of the business property of a permanent establishment in Canada of such U.S. Resident Holder.

We believe that the activities and affairs of ~~Teekay LNG Partners L.P. are~~Seapeak LLC prior to the Conversion were conducted in such a manner that ~~Teekay LNG Partners L.P. is~~Seapeak LLC was not carrying on business in Canada and that U.S. Resident Holders should not be considered to be carrying on business in Canada for purposes of the Canada Tax Act or the Canada-U.S. Treaty solely by reason of the acquisition, holding, disposition or redemption of our units. We intend that this is and continues to be the case, notwithstanding that Teekay Shipping Limited (a subsidiary of Teekay Corporation that is a non-resident of Canada) and Service Provider (an indirect subsidiary of Teekay LNG Partners L.P. that is a non-resident of Canada) provide certain services to Teekay LNG Partners L.P. and obtain some or all such services under subcontracts with Canadian service providers. If ~~the arrangements we have entered into result in Teekay LNG Partners L.P. being considered to carry~~Seapeak LLC carried on business in Canada for purposes of the Canada Tax Act, U.S. Resident Holders would behave been considered to be carrying on business in Canada and may have been be required to file Canadian tax returns and, subject to any relief provided under the Canada-U.S. Treaty, would behave been subject to taxation in Canada on any income that iswas considered to be attributable to the business carried on by ~~Teekay LNG Partners L.P.~~Seapeak LLC in Canada. The Canada-U.S. Treaty contains a treaty benefit denial rule which may have the effect of denying relief thereunder from Canadian taxation to U.S. Resident Holders in respect of any income attributable to a business carried on by usSeapeak LLC in ~~Canada~~.Canada.

~~Although we do not intend~~Pursuant to ~~do so, there can be no assurance that~~ the ~~manner in which we carry~~Conversion, Teekay LNG Partners L.P. became Seapeak LLC. Unlike Teekay LNG Partners L.P., Seapeak LLC is considered a corporation for Canadian federal income tax purposes. We are relying on ~~our activities will not change from time to time as circumstances dictate or warrant in a manner that may cause U.S. Resident Holders to be carrying on business in Canada for purposes~~an exemption under subsection 250(6) of the Canada Tax ~~Act. Further, the relevant~~Act to deem Seapeak LLC not to be resident in Canada for Canadian ~~federal~~ income tax ~~law may change by legislation or judicial interpretation and the Canadian taxing authorities may take a different view than we have of the current law.~~purposes.

It is the responsibility of each unitholder to investigate the legal and tax consequences, under the laws of pertinent jurisdictions, including Canada, of an investment in us. Accordingly, each unitholder is urged to consult, and depend upon, such unitholder’s tax counsel or other advisor with regard to those matters. Further, it is the responsibility of each unitholder to file all state, local and non-U.S., as well as U.S. federal tax returns, that may be required of such unitholder.

Please read "Item 3 – Risk Factors" for more information on potential tax risks applicable to unitholders and our business.

Documents on Display

Documents concerning us that are referred to herein may be ~~accessed on our website under “Investors - Teekay LNG Partners L.P. - Financials & Presentations” from the home page of our web site at~~ ~~www.teekay.com~~ ~~or may be~~ inspected at our principal executive offices at ~~4th Floor, Belvedere Building, 69 Pitts Bay Road, Hamilton, HM 08, Bermuda.~~2000, 550 Burrard Street, Vancouver, B.C., Canada, V6C 2K2. Those documents electronically filed via the SEC’s 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.


~~Item 11.~~	~~Quantitative and Qualitative Disclosures About Market Risk~~

Item 11.Quantitative and Qualitative Disclosures About Market Risk

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, EURIBOR or NIBOR. Significant increases in interest rates could adversely affect our ~~operating margins,~~ results of operations and our ability to service our debt. From time to time, we use interest rate swaps to reduce our exposure to market risk from changes in interest rates. The principal objective of these contracts is to minimize the risks and costs associated with our floating-rate debt. Please read "Item 3 – Risk Factors" for more details on the scheduled phasing out of LIBOR as an interest “benchmark”.

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 transactions. In addition, to the extent 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, ~~2018,~~2021, that are sensitive to changes in interest rates, including our long-term debt, obligations related to ~~capital~~finance leases and interest rate swaps, but excluding any amounts related to our equity-accounted ~~investments.~~joint ventures. For long-term debt and obligations related to ~~capital~~finance leases, the table presents principal payments 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. The expected contractual maturity dates do not reflect potential prepayments of long-term debt and obligations related to ~~capital~~finance leases as well as the potential exercise of early termination options for certain of our interest rate swaps.

Expected Maturity Date


	2022	2023	2024	2025	2026	There- after	Total	Fair Value Liability	Rate(1)
	(in millions of U.S. Dollars, except percentages)
Long-Term Debt:
Fixed Rate ($U.S.)	18.1	18.1	18.1	18.1	18.1	70.2	160.7	165.4	4.3%
Variable-Rate ($U.S.) (2)	110.7	172.8	77.4	53.0	272.9	108.8	795.6	810.7	2.3%
Variable-Rate (Euro) (3) (4)	28.0	59.2	28.2	—	—	—	115.4	117.3	1.1%
Variable-Rate (NOK) (4) (5)	—	96.4	—	113.4	113.4	—	323.2	325.9	5.7%
Obligations Related to Finance Leases:
Variable-Rate ($U.S.) (6)	27.2	27.3	25.4	24.8	24.9	276.9	406.5	417.3	4.6%
Fixed-Rate ($U.S.) (6)	46.8	49.0	51.1	53.4	238.3	423.9	862.5	914.7	5.4%
Average Interest Rate (7)	5.4%	5.4%	5.4%	5.4%	5.5%	5.4%	5.4%
Interest Rate Swaps:
Contract Amount ($U.S.) (8)	61.3	177.1	296.5	54.3	199.6	186.9	975.7	19.7	2.1%
Average Fixed-Pay Rate (2)	2.0%	3.0%	2.4%	1.4%	1.5%	—	2.1%
Contract Amount (Euro) (4) (9)	12.0	42.7	—	—	—	—	54.7	3.2	3.9%
Average Fixed-Pay Rate (3)	3.7%	3.9%	—	—	—	—	3.9%

2019 2020 2021 2022 2023
There-
after
Total
Fair
Value
Liability

Rate⁽¹⁾
(in millions of U.S. Dollars, except percentages)
Long-Term Debt:
Fixed Rate ($U.S.) 9.3
9.3
9.3
9.3
9.3
62.8
109.3
106.8
4.4 %
Variable-Rate ($U.S.) ⁽²⁾
102.6
462.2
228.9
54.6
46.0
437.2
1,331.5
1,307.4
4.5 %
Variable-Rate (Euro) ^{(3) (4)}
24.7
25.8
27.0
28.2
59.6
28.5
193.8
189.9
1.2 %
Variable-Rate (NOK) ^{(4) (5)}
—
115.7
138.9
—
98.4
—
353.0
361.1
6.0 %
Obligations Related to Capital Leases:
Variable-Rate ($U.S.) ⁽⁶⁾
42.5
18.5
18.5
18.6
18.6
234.9
351.6
350.7
4.5 %
Fixed-Rate ($U.S.) ⁽⁶⁾
38.8
40.7
42.8
45.1
47.6
732.0
947.0
924.0
5.4 %
Average Interest Rate ⁽⁷⁾
5.4 % 5.4 % 5.4 % 5.4 % 5.4 % 5.4 % 5.4 %
Interest Rate Swaps:
Contract Amount ($U.S.) ⁽⁸⁾
174.9
197.6
190.8
25.9
26.6
188.9
804.7
(26,525 ) 3.3 %
Average Fixed-Pay Rate ⁽²⁾
2.8 % 3.3 % 3.5 % 3.7 % 3.6 % 3.3 % 3.3 %
Contract Amount (Euro) ^{(4) (9)}
9.7
10.4
11.2
12.1
43.1
— 86.5
(11,092 ) 3.8 %
Average Fixed-Pay Rate ⁽³⁾
3.7 % 3.7 % 3.7 % 3.7 % 3.9 % — 3.8 %

~~(1)~~

~~Rate refers to the weighted-average effective interest rate for our long-term debt and obligations related to capital~~(1)Rate refers to the weighted-average effective interest rate for our long-term debt and obligations related to finance leases, including the margin we pay on our floating-rate debt and the average fixed pay rate for our interest rate swap agreements. The average interest rate for our obligations related to finance leases is the weighted-average interest rate implicit in our lease obligations at the inception of the leases. The average fixed pay rate for our interest rate swaps excludes the margin we pay on our drawn floating-rate debt, which as of December 31, 2021 ranged from 1.85% to 3.25%. Please read “Item 18 – Financial Statements: Note 10 – Long-Term Debt.”

(2)Interest payments on U.S. Dollar-denominated debt and interest rate swaps are based on LIBOR.

(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, 2021.

(5)Interest payments on our NOK-denominated debt and on our cross currency swaps are based on NIBOR. Our NOK-denominated bonds have been economically hedged with cross currency swaps, to swap all interest and principal payments into U.S. Dollars, with the respective interest payments fixed pay rate for our interest rate swap agreements. The average interest rate for our obligations related to capital leases is the weighted-average interest rate implicit in our lease obligations at the inception of the leases. The average fixed pay rate for our interest rate swaps excludes the margin we pay on our drawn floating-rate debt, which as of December 31, 2018 ranged from 0.30% to 3.25%. Please read “Item 18 – Financial Statements: Note 10 – Long-Term Debt.”


~~(2)~~	~~Interest payments on U.S. Dollar-denominated debt and interest rate swaps are based on LIBOR.~~


~~(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, 2018.~~


~~(5)~~	Interest payments on our NOK-denominated debt and on our cross currency swaps are based on NIBOR. Our NOK-denominated bonds have been economically hedged with cross currency swaps, to swap all interest and principal payments into U.S. Dollars, with the respective interest payments fixed

at a rate ranging from ~~5.92%~~5.74% to 7.89%, and the transfer of principal locked in at ~~$382.5~~$331 million upon maturities. Please see "Foreign Currency Fluctuations" below and read “Item 18 – Financial Statements: Note 13 – Derivative Instruments and Hedging Activities.”


~~(6)~~	~~The amount of obligations related to capital leases 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 obligations related to our fixed-rate capital leases at the inception of the leases.~~


~~(8)~~	~~The average variable receive rate for our U.S. Dollar-denominated interest rate swaps is set at 3-month or 6-month LIBOR.~~


~~(9)~~	~~The average variable receive rate for our Euro-denominated interest rate swaps is set at 1-month EURIBOR or 6-month EURIBOR.~~

(6)The amount of obligations related to finance leases 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 obligations related to our fixed-rate finance leases at the inception of the leases.

(8)The average variable receive rate for our U.S. Dollar-denominated interest rate swaps is set at 3-month or 6-month LIBOR. Contract amount for U.S Dollar-denominated interest rate swaps includes forward-starting swaps with inception dates ranging from October 2023 to April 2024.

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

Spot Market Rate Risk

~~Our seven~~Certain of our multi-gas vessels ~~and certain of our LNG and LPG carriers in our equity-accounted joint ventures~~ are trading in the spot ~~market.~~market and one of our wholly-owned LNG carriers is earning a variable-rate charter hire based on spot rates until March 2022. In addition, three of our wholly-owned LNG carriers' charter contracts are ending in 2022 and may be traded in the spot market if we are unable to obtain charter contracts prior to the expiration of their current charter contracts. Please see “Item 5 – Operating and Financial Review and Prospects: Management’s Discussion and Analysis of Financial Condition and Results of Operations – Significant Developments in 2021 and Early 2022: LNG Carrier Charter Contract". The cyclical nature of the LPG and LNG spot market may cause significant increases or decreases in the revenues we earn from these vessels trading in the spot market.

Foreign Currency Fluctuations

Our functional currency is U.S. Dollars because nearly all of our revenues and most of our operating costs are in U.S. Dollars. Our results of operations are affected by fluctuations in currency exchange rates. The volatility in our financial results due to currency exchange rate fluctuations is

attributed primarily to foreign currency revenues and expenses, our Euro-denominated loans and restricted cash deposits and our NOK-denominated bonds. A portion of our voyage revenues are denominated in Euros. A portion of our vessel operating expenses, and general and administrative expenses are denominated in Euros, which is primarily a function of the nationality of our crew and administrative staff. In addition, we have a portion of our capital expenditures denominated in Euros. We have Euro-denominated interest expense and Euro-denominated interest income related to our Euro-denominated loans of ~~169.0~~101.5 million Euros ($~~193.8~~115.4 million) and Euro-denominated restricted cash deposits of ~~21.6~~27.0 million Euros ($~~24.8~~30.7 million), respectively, as at December 31, ~~2018.~~2021. We also incur NOK-denominated interest expense on our NOK-denominated bonds; however, we entered 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 ~~2020~~2023 through ~~2023,~~2026, and to economically hedge the interest rate exposure. We have not designated, for accounting purposes, these cross currency swaps as cash flow hedges of the NOK-denominated bonds due in ~~2018~~2023 through ~~2021.~~2026. Please read “Item 18 – Financial Statements: Note 13 – Derivative Instruments and Hedging Activities.” At December 31, ~~2018,~~2021, the fair value of the cross currency swaps derivative liabilities was ~~$29.1~~$10.5 million and the change from December ~~2017~~2020 to the reporting period has been reported in foreign currency exchange gain (loss) in the consolidated statements of income. As a result, fluctuations in the Euro and NOK relative to the U.S. Dollar have caused, and are likely to continue to cause, fluctuations in our reported voyage revenues, vessel operating expenses, general and administrative expenses, interest expense, interest income, realized and unrealized ~~loss~~gain (loss) on non-designated derivative instruments and foreign currency exchange gain (loss).


~~Item 12.~~	~~Description of Securities Other than Equity Securities~~

Item 12.Description of Securities Other than Equity Securities

Not applicable.

PART II


~~Item 13.~~	~~Defaults, Dividend Arrearages and Delinquencies~~

Item 13.Defaults, Dividend Arrearages and Delinquencies

None.


~~Item 14.~~	~~Material Modifications to the Rights of Unitholders and Use of Proceeds~~

Item 14.Material Modifications to the Rights of Unitholders and Use of Proceeds

Not applicable.


~~Item 15.~~	~~Controls and Procedures~~

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)~~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 SEC’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~~our Chief Executive Officer and our Chief Financial ~~Officer of the Service Provider.~~Officer. Based on the evaluation, the Chief Executive Officer and Chief Financial Officer ~~of the Service Provider~~ concluded that our disclosure controls and procedures are effective as of December 31, ~~2018.~~2021.

The Chief Executive Officer and Chief Financial Officer ~~of the Service Provider~~ do not expect that our disclosure controls or internal controls will prevent all errors and all fraud. Although our disclosure controls and procedures were designed to provide reasonable assurance of achieving their objectives, a control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within us have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining for us adequate internal control 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 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 our assets; 2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of the financial statements in accordance with U.S. 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 our consolidated 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 control 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. ~~Based~~However, based on the evaluation, management has determined that the internal control over financial reporting was effective as of December 31, ~~2018.~~2021.

Our independent auditors, KPMG LLP, an independent registered public accounting firm, have audited the accompanying consolidated financial statements and the effectiveness of our internal control over financial reporting as of December 31, ~~2018.~~2021. Their attestation report on the effectiveness of our internal control over financial reporting can be found on page ~~F-2~~F-3 of this Annual Report.

Changes in Internal Control over Financial Reporting

There ~~were~~have been no changes in our internal ~~controls~~control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during the year ended December 31, 2021 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, 2018.~~reporting.


~~Item 16A.~~	~~Audit Committee Financial Expert~~

Item 16A.Audit Committee Financial Expert

The Board ~~of Directors of our General Partner~~(which is controlled by Stonepeak and its affiliates) has determined that ~~director~~Director and Chair of the Audit Committee, ~~Ms. Beverlee F. Park~~Barry Curtis, qualifies as an audit committee financial expert and is independent under applicable NYSE and SEC standards.

Item 16B.Code of Ethics


~~Item 16B.~~	~~Code of Ethics~~

We have adopted a Standards of Business Conduct Policy that applies to all our employees and ~~the employees and directors of our General Partner.~~directors. This document is available under ~~“Investors – Teekay LNG Partners L.P. - Governance”~~“Governance” from the home page of our web site (~~www.teekay.com~~www.seapeak.com). We intend to disclose, under ~~“Investors – Teekay LNG Partners L.P. - Governance”~~“Governance” in the Investors section of our web site, any waivers to or amendments of our Standards of Business Conduct Policy that benefit any directors and executive officers of ~~our General Partner.~~Seapeak.


~~Item 16C.~~	~~Principal Accountant Fees and Services~~

Item 16C.Principal Accountant Fees and Services

Our principal accountant for ~~2018~~2021 and ~~2017~~2020 was KPMG LLP, ~~Chartered Professional Accountants.~~independent registered public accounting firm. The following table shows the fees we paid or accrued for audit ~~and audit-related~~ services provided by KPMG LLP for ~~2018~~2021 and ~~2017.~~2020.


Fees (in thousands of U.S. Dollars)	2021	2020
Audit Fees(1)	1,435	1,100

(1)Audit fees represent fees for professional services provided in connection with the audits of our consolidated financial statements and effectiveness of internal control over financial reporting, review of our quarterly consolidated financial statements, audit services provided in connection with other statutory audits and professional services in connection with the review of our regulatory filings for our equity offerings.

Fees (in thousands of U.S. Dollars)
2018 2017
Audit Fees⁽¹⁾
859
930
Audit-Related Fees⁽²⁾
5
11
Total 864
941

~~(1)~~

Audit fees represent fees for professional services provided in connection with the audits of our consolidated financial statements and effectiveness of internal control over financial reporting, review of our quarterly consolidated financial statements, audit services provided in connection with other statutory audits and professional services in connection with the review of our regulatory filings for our equity offerings.


~~(2)~~	~~Audit-related fees relate to other accounting consultations.~~

No ~~fees for~~audit-related or tax services were provided to ~~the Partnership~~us by the auditor during ~~the term of their appointments in 2018 and 2017.~~2021 or 2020.

The Audit Committee of our ~~General Partner’s~~ Board ~~of Directors~~ has the authority to pre-approve permissible audit, 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 pre-approved all engagements and fees paid to our principal accountant in ~~2018~~2021 and in ~~2017.~~2020.


~~Item 16D.~~	~~Exemptions from the Listing Standards for Audit Committees~~

Item 16D. Exemptions from the Listing Standards for Audit Committees

Not applicable.


~~Item 16E.~~	~~Purchases of Units by the Issuer and Affiliated Purchasers~~

~~During 2018,~~Item 16E. Purchases of Units by the Issuer and Affiliated Purchasers

In March 2022, we ~~announced that~~implemented a repurchase plan to which we are authorized to repurchase our ~~Board of Directors had authorized a common unit repurchase program of~~Series A and Series B Preferred Units up to ~~$100~~a maximum of $30.0 million in aggregate for the Series A and Series B Preferred Units combined. No Series A and Series B Preferred Units have been repurchased as at the date of ~~our common units. Common units may be repurchased~~this Annual Report.

Item 16F.Change in the open market or privately-negotiated transactions or otherwise at times and prices considered appropriate by us. The timing of any purchases and the exact number of common units to be purchased under the common unit repurchase program will be dependent on market conditions and other factors. Registrant’s Certifying Accountant

~~During 2018, we repurchased common units during the month of December, as indicated in the table below.~~

(in thousands of U.S. Dollars, except unit data) Number of common units Repurchase amount
December 2018 326,780 3,710


~~Item 16F.~~	~~Change in Registrant’s Certifying Accountant~~

Not applicable.


~~Item 16G.~~	~~Corporate Governance~~

Item 16G. Corporate Governance

As a foreign private issuer, we are not required to comply with certain corporate governance practices followed by U.S. companies under the NYSE listing standards.

The following is the significant ways in which our corporate governance practices differ from those followed by U.S. domestic companies listed on the NYSE that are also “controlled companies” (as defined in the NYSE Listed Company Manual), and which differences are permitted by NYSE rules for foreign private issuers such as us organized under the laws of the Marshall Islands:

•We are not required to obtain unitholder approval prior to the adoption of equity compensation plans or certain equity issuances, including, among others, issuing 20% or more of our outstanding common units or voting power in a ~~transaction~~.transaction.

~~There~~•We are ~~no other significant ways in which our corporate governance practices differ from those followed by domestic limited partnerships under the listing requirements~~not required to have an Audit Committee comprised of ~~the New York Stock Exchange.~~at least three independent directors. Our Audit Committee currently is comprised of one member.


~~Item 16H.~~	~~Mine Safety Disclosure~~

Item 16H. Mine Safety Disclosure

Not applicable.

PART III


~~Item 17.~~	~~Financial Statements~~

Item 17.Financial Statements

Not applicable.


~~Item 18.~~	~~Financial Statements~~

Item 18.Financial Statements

The following financial statements, together with the related reports of KPMG LLP, Independent Registered Public Accounting Firm are filed as part of this Annual Report:



			Page
Reports of Independent Registered Public Accounting Firm			F - ~~1,2~~1, F - 3

Consolidated Financial Statements
Consolidated Statements of Income			F - 34
Consolidated Statements of Comprehensive Income			F - 45
Consolidated Balance Sheets			F - 56
Consolidated Statements of Cash Flows			F - 67
Consolidated Statements of Changes in Total Equity			F - 78
Notes to the Consolidated Financial Statements			F - 89

All schedules for which provision is made in the applicable accounting regulations of the SEC are not required, are inapplicable or have been disclosed in the Notes to the Consolidated Financial Statements and therefore have been omitted.


~~Item 19.~~	~~Exhibits~~

Item 19.Exhibits

The following exhibits are filed as part of this Annual Report:



1.1		Certificate of ~~Limited Partnership of Teekay LNG Partners L.P.~~ ^{Conversion (1)}
1.2		~~Fourth Amended and Restated Agreement~~Plan of ~~Limited Partnership~~Conversion dated as of ~~Teekay LNG Partners L.P.~~ ⁽²⁾February 25, 2022 (1)
1.3		Certificate of Formation of ~~Teekay GP L.L.C.~~ ^{Seapeak LLC (1)}
1.4		~~Second Amended and Restated~~ Limited Liability Company Agreement of ~~Teekay GP L.L.C., dated March 2005, as amended by Amendment No. 1, dated February 25, 2008, and Amendment No.2, dated February 29, 2008.~~ ⁽³⁾Seapeak LLC. (1)
~~2.1~~2.2		~~Agreement, dated May 18, 2015, for NOK 1,000,000,000, Senior Unsecured Bonds due May 2020, between Teekay LNG Partners L.P. and Nordic Trustee ASA.~~ ⁽⁴⁾ Description of Securities Registered Under Section 12 of the Exchange Act.
~~4.1~~4.1		~~Amended Teekay LNG Partners L.P. 2005 Long-Term Incentive Plan.~~⁽³⁾
~~4.2~~	Amended and Restated Omnibus Agreement with Teekay Corporation, ~~Teekay Offshore,~~Altera, our General Partner and related parties. ⁽⁵⁾(2)
~~4.3~~	~~Administrative Services Agreement with Teekay Shipping Limited.~~⁽³⁾
~~4.4~~	~~Advisory, Technical and Administrative Services Agreement between Teekay Shipping Spain S.L. and Teekay Shipping Limited.~~ ⁽³⁾
~~4.5~~	~~LNG Strategic Consulting and Advisory Services Agreement between Teekay LNG Partners L.P. and Teekay Shipping Limited.~~⁽³⁾
~~4.6~~	Syndicated Loan Agreement between Naviera Teekay Gas III, S.L. (formerly Naviera F. Tapias Gas III, S.A.) and Caixa de Aforros de Vigo Ourense e Pontevedra, as Agent, dated as of October 2, 2000, as amended. ⁽³⁾
~~4.7~~	Deed of Amendment and Restatement dated October 10, 2008, relating to a Loan Agreement for a U.S. $92,400,000 Buyer Credit and a U.S. $117,600,000 Commercial Loan between MiNT LNG I, Ltd., BNP Paribas S.A., and other banks. ⁽⁶⁾
~~4.8~~	Deed of Amendment and Restatement dated October 10, 2008, relating to a Loan Agreement for a U.S. $92,400,000 Buyer Credit and a U.S. $117,600,000 Commercial Loan between MiNT LNG II, Ltd., BNP Paribas S.A., and other banks. ⁽⁶⁾
~~4.9~~	Deed of Amendment and Restatement dated October 10, 2008, relating to a Loan Agreement for a U.S. $92,400,000 Buyer Credit and a U.S. $117,600,000 Commercial Loan between MiNT LNG III, Ltd ., BNP Paribas S.A., and other banks.⁽⁶⁾
~~4.10~~	Deed of Amendment and Restatement dated November 10, 2008, relating to a Loan Agreement for a U.S. $92,400,000 Buyer Credit and a U.S. $117,600,000 Commercial Loan between MiNT LNG IV, Ltd., BNP Paribas S.A., and other banks. ⁽⁶⁾
~~4.11~~	~~Agreement dated January 1, 2012, for business development services between Teekay LNG Operating L.L.C. and Teekay Shipping Limited.~~ ⁽⁷⁾
~~4.12~~	~~Agreement dated June 27, 2013, for U.S. $195,000,000 senior secured notes between Meridian Spirit ApS and Wells Fargo Bank Northwest N.A.~~ ⁽⁸⁾
~~4.13~~	~~Agreement dated June 28, 2013, for U.S. $160,000,000 loan facility between Malt Singapore Pte. Ltd. and Commonwealth Bank of Australia.~~ ⁽⁸⁾



~~4.14~~4.2		~~Agreement dated February 12, 2013; Teekay Luxembourg S.a.r.l. entered into a share purchase agreement with Exmar NV and Exmar Marine NV to purchase 50% of the shares in Exmar LPG BVBA.~~ ⁽⁹⁾
~~4.15~~	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 L.L.C. in connection with the Yamal LNG Project. ⁽¹⁰⁾
~~4.16~~	~~Agreement dated December 17, 2014, for U.S. $450,000,000 loan facility between Nakilat Holdco L.L.C. and Qatar National Bank SAQ.~~ ⁽¹⁰⁾
~~4.17~~	~~Amending and Restating Agreement dated June 5, 2015, for a U.S. $460,000,000 secured loan facility between Exmar LPG BVBA and Nordea Bank Norge ASA and other banks.~~ ⁽⁴⁾
~~4.18~~	Agreement dated November 15, 2016, for a U.S. $730,000,000 Secured Loan Facility between Bahrain LNG W.L.L. and Standard Chartered Bank and other banks.⁽¹¹⁾ (3)
~~4.19~~4.3		Agreement dated December 21, 2016, for a U.S. $723,200,000 Secured Loan Facility between Teekay Nakilat (III) Corporation and Qatar National Bank SAQ. ⁽¹¹⁾(3)
~~4.20~~4.4		Agreement dated December 8, 2017, for a U.S. $1,632,000,000 Secured Loan Agreement between DSME Hull No. 2423 L.L.C., DSME Hull No. 2425 L.L.C., DSME Hull No. 2430 L.L.C., DSME Hull No. 2431 L.L.C., DSME Hull No. 2433 L.L.C. and DSME Hull No. 2434 L.L.C. (as borrowers) and China Development Bank.(4)
4.5		Agreement and Plan of Merger, dated October 4, 2021, by and among Stonepeak Infrastructure Fund IV Cayman (AIV III) LP, Limestone Merger Sub, Inc., Teekay LNG Partners, L.P. and Teekay GP L.L.C. (5)
8.1		List of Subsidiaries of ~~Teekay LNG Partners L.P.~~Seapeak LLC.
12.1		Rule 13a-15(e)/15d-15(e) Certification of Mark Kremin, President and Chief Executive ~~Officer of Teekay Gas Group Ltd.~~Officer.
12.2		Rule 13a-15(e)/15d-15(e) Certification of Scott Gayton, Chief Financial ~~Officer of Teekay Gas Group Ltd.~~Officer.
13.1		Certification of Mark Kremin, President and Chief Executive Officer, ~~of Teekay Gas Group Ltd.,~~ pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
13.2		Certification of Scott Gayton, Chief Financial Officer, ~~of Teekay Gas Group Ltd.,~~ pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
15.1		~~Consent~~Consolidated Financial Statements of ~~KPMG LLP, as independent registered public accounting firm, for Teekay~~TC LNG ~~Partners L.P.~~Shipping L.L.C.
101.INS		XBRL Instance Document.
101.SCJ		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 exhibits 3.1 and 3.5 to the Partnership’s Registration Statement on Form F-1 (File No. 333-120727), filed with the SEC on November 24, 2004, and hereby incorporated by reference to such Annual Report.


~~(2)~~	~~Previously filed as exhibit 4.1 to the Partnership’s Report on Form 6-K filed with the SEC on January 4, 2019, and hereby incorporated by reference to such Report.~~


~~(3)~~	Previously filed as exhibits 3.4, 10.3, 10.5, 10.6, 10.7 and 10.11 to the Partnership’s Amendment No. 3 to Registration Statement on Form F-1 (File No. 333-120727), filed with the SEC on April 11, 2005, and hereby incorporated by reference to such Registration Statement.


~~(4)~~	~~Previously filed as exhibit 2.3 and 4.34 to the Partnership’s Annual Report on Form 20-F (File No. 1-32479), filed with the SEC on April 27, 2016 and hereby incorporated by reference to such report.~~


~~(5)~~	~~Previously filed as exhibit 4.17 to the Partnership’s Annual Report on Form 20-F (File No. 1-32479), filed with the SEC on April 19, 2007 and hereby incorporated by reference to such report.~~


~~(6)~~	Previously filed as exhibits 4.19, 4.20, 4.21 and 4.22 to the Partnership’s Report on Form 20-F (File No. 1-32479), filed with the SEC on April 11, 2012 and hereby incorporated by reference to such report.


~~(7)~~	~~Previously filed as exhibit 4.26 to the Partnership’s Annual Report on Form 20-F (File No. 1-32479), filed with the SEC on April 16, 2013 and hereby incorporated by reference to such report.~~


~~(8)~~	~~Previously filed as exhibits 4.1 and 4.2 to the Partnership’s Report on Form 6-K (File No. 1-32479), filed with the SEC on November 27, 2013 and hereby incorporated by reference to such report.~~


~~(9)~~	~~Previously filed as exhibit 4.31 to the Partnership's Annual Report on Form 20-F (File No. 1-32479), filed with the SEC on April 29, 2014 and hereby incorporated by reference to such report.~~


~~(10)~~	Previously filed as exhibits 4.29 and 4.30 to the Partnership’s Annual Report on Form 20-F (File No. 1-32479), filed with the SEC on April 23, 2015 and hereby incorporated by reference to such report.


~~(11)~~	Previously filed as exhibits 4.37 and 4.39 to the Partnership’s Annual Report on Form 20-F (File No. 1-32479), filed with the SEC on April 26, 2017 and hereby incorporated by reference to such report.

___________________________

(1)Previously filed as exhibits 1.1, 1.2, 1.3 and 1.4 to the Company's Report on Form 6-K (File No. 333-120727), filed with the SEC on February 25, 2022, and hereby incorporated by reference to such Annual Report.

(2)Previously filed as exhibit 4.17 to the Company's Annual Report on Form 20-F (File No. 1-32479), filed with the SEC on April 19, 2007 and hereby incorporated by reference to such report.

(3)Previously filed as exhibits 4.37 and 4.39 to the Company's Annual Report on Form 20-F (File No. 1-32479), filed with the SEC on April 26, 2017 and hereby incorporated by reference to such report.

(4)Previously filed as exhibit 4.20 to the Company's Annual Report on Form 20-F (File No. 1-32479), filed with the SEC on April 5, 2019 and hereby incorporated by reference to such report.

(5)Previously filed as an exhibit to the Company's Report on Form 6-K (File No. 1-32479), filed with the SEC on October 12, 2021 and hereby incorporated by reference to such report.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

~~TEEKAY LNG PARTNERS L.P.~~SEAPEAK LLC

~~By:~~

~~Teekay GP L.L.C., its General Partner~~

Date: April ~~5, 2019~~4, 2022

By:

/s/ ~~Edith Robinson~~Scott Gayton

~~Edith Robinson~~Scott Gayton

~~Corporate Secretary~~Chief Financial Officer

(Principal Financial and Accounting Officer)

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

~~The~~To the Board of Directors and Unitholders ~~of Teekay LNG Partners L.P.~~

Seapeak LLC

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Seapeak LLC and subsidiaries (the Entity, formerly Teekay LNG Partners L.P. ~~and subsidiaries (the Partnership)~~) as of December 31, ~~2018~~2021 and ~~2017,~~2020, the related consolidated statements of income, comprehensive income, cash flows, and changes in total equity for each of the years in the ~~three‑year~~three-year period ended December 31, ~~2018,~~2021, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the ~~Partnership~~Entity as of December 31, ~~2018~~2021 and ~~2017,~~2020, and the results of its operations and its cash flows for each of the years in the ~~three‑year~~three-year period ended December 31, ~~2018,~~2021, 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) (PCAOB), the ~~Partnership’s~~Entity’s internal control over financial reporting as of December 31, ~~2018,~~2021, based on ~~the~~ criteria established in Internal Control -– Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated April ~~5, 2019~~4, 2022 expressed an unqualified opinion on the effectiveness of the ~~Partnership’s~~Entity’s internal control over financial reporting.

Change in Accounting Principle

As discussed in Note 2 to the consolidated financial statements, the ~~Partnership~~Entity has changed its method of accounting ~~policies~~ for ~~revenue recognition~~credit losses as of January 1, ~~2018~~2020 due to the adoption of ASU ~~2014-09~~ ~~- Revenue from Contracts with Customers,~~ ~~and the classification~~2016-13 Financial Instruments—Credit Losses: Measurement of ~~restricted cash and final settlements~~Credit Losses on ~~cross currency swap agreements on the consolidated statements of cash flows for 2018 and comparative periods due to the adoption of ASU 2016-18 -~~ ~~Statement of Cash Flows: Restricted Cash~~ ~~andASU 2016-15~~ ~~- Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments, respectively.~~Financial Instruments (ASU 2016-13).

Basis for Opinion

These consolidated financial statements are the responsibility of the ~~Partnership’s~~Entity’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the ~~Partnership~~Entity in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing a separate opinion on the critical audit matters or on the accounts or disclosures to which they relate.

Indicators of impairment and recoverability of vessels and equipment

As discussed in Note 1 to the consolidated financial statements, the Entity assesses vessels and equipment that are intended to be held and used in the Entity’s business for impairment when events or circumstances indicate the carrying value 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 and the fair value of the asset is less than its carrying value, the carrying value of the asset is reduced to its estimated fair value. The Entity’s evaluation of events or circumstances that may indicate impairment and estimates of undiscounted cash flows used to determine the recoverability of a vessel’s carrying value include, amongst others, an assessment of its intended use and anticipated operating cash flows, which is primarily influenced by the estimation of future charter rates. The carrying value of vessels and equipment reported on the consolidated balance sheet as of December 31, 2021 was $2,832 million, which includes vessels and equipment in the liquefied natural gas (LNG) segment.

We identified the assessment of indicators of impairment for vessels and equipment and the recoverability of LNG vessels as critical audit matters. Subjective auditor judgment was required to assess the Entity’s evaluation of anticipated operating cash flows, including estimated future charter rates as these assumptions are market-dependent and subject to significant changes. Changes in these significant assumptions could have ~~served as~~changed the ~~Partnership’s auditor since 2011.~~Entity’s conclusion regarding indicators of impairment and recoverability of vessels carrying value.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the Entity’s impairment assessment process. This included internal controls related to the Entity’s identification and evaluation of indicators of impairment and the determination of estimated future charter rates. We assessed the Entity’s responses related to elements considered in their evaluation of indicators of impairment by comparing them to publicly available information about the industry and assessing whether the Entity omitted any significant internal or external elements in its evaluation. We assessed a selection of estimated future charter rates by comparing them to historical rates and the rates in third-party publications for LNG carriers with similar characteristics, including type and size. We compared the Entity’s historical revenue projections to actual results to assess the Entity’s ability to accurately project future revenue.

F-1

Allowance for credit losses of net investment in direct financing and sales-type leases

As discussed in Note 3b to the consolidated financial statements, the Entity’s allowance for expected credit losses for its net investment in direct financing and sales-type leases (net investment in leases), and those attributable to its equity-accounted joint ventures, totaled $92,300 thousand as of December 31, 2021. The allowance for expected credit losses has two components: the lease receivable component and the residual value component. The credit loss allowance related to the lease receivable component of the net investment in direct financing and sales-type leases is determined using an internal historical loss rate method.

We identified the assessment of the allowance for expected credit losses related to the lease receivable component of the Entity’s net investment in leases as a critical audit matter. In particular, subjective auditor judgment was required to evaluate the estimate of the unadjusted loss rate used in the historical loss rate method. Certain of the assumptions and inputs to estimate the unadjusted loss rate were based in part on probabilities of the occurrence or non-occurrence of future events which impact the amount of future recoveries earned or additional losses incurred in measuring the value attributable to the leased assets. Changes in the unadjusted loss rate could have had a significant impact on the credit loss provision for the Entity’s net investment in leases.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the Entity’s allowance for expected credit losses process. This included controls related to the determination of certain of the assumptions and inputs used to estimate the unadjusted loss rate. We evaluated the Entity’s estimated unadjusted loss rate by testing certain inputs and assumptions that the Entity used and considered the relevance and reliability of such inputs and assumptions. We compared the losses incurred to date to historical financial results, historical charter rates, and contractual agreements. We assessed a selection of projected charter rates used to estimate the amount of future recoveries earned or additional losses incurred by comparing them to historical rates and third-party industry publications for vessels with similar characteristics, including type, size, and age and to recent experience.



/s/ KPMG LLP
Chartered Professional Accountants
~~Vancouver, Canada~~We have served as the Entity’s auditor since 2011.
Vancouver, Canada
April ~~5, 2019~~4, 2022

F-2

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

~~The~~To the Board of Directors and Unitholders ~~of Teekay LNG Partners L.P.~~

Seapeak LLC

Opinion on Internal Control Over Financial Reporting

We have audited Seapeak LLC and subsidiaries’ (the Entity, formerly Teekay LNG Partners L.P. ~~and subsidiaries’ (the Partnership)~~) internal control over financial reporting as of December 31, ~~2018,~~2021, based on the criteria established inInternal Control -– Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the ~~Partnership~~Entity maintained, in all material respects, effective internal control over financial reporting as of December 31, ~~2018,~~2021, based on the criteria established in Internal Control -– Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the ~~Partnership~~Entity as of December 31, ~~2018~~2021 and ~~2017,~~2020, the related consolidated statements of income, comprehensive income, cash flows, and changes in total equity for each of the years in the three-year period ended December 31, ~~2018,~~2021, and the related notes (collectively, the consolidated financial statements), and our report dated April ~~5, 2019~~4, 2022 expressed an unqualified opinion on those consolidated financial statements.

Basis for Opinion

The ~~Partnership’s~~Entity’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 the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the ~~Partnership’s~~Entity’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the ~~Partnership~~Entity in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. 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 of internal control over financial reporting 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.

Definition and Limitations of Internal Control Over Financial Reporting

~~An entity’s~~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. ~~An entity’s~~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 generally accepted accounting principles, and that receipts and expenditures of the ~~entity~~company are being made only in accordance with authorizations of management and directors of the ~~entity;~~company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the ~~entity’s~~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.



/s/ KPMG LLP
Chartered Professional Accountants
Vancouver, Canada
April ~~5, 2019~~4, 2022

F-3

SEAPEAK LLC (FORMERLY TEEKAY LNG PARTNERS L.P.) AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (notes 1 and 2)

(in thousands of U.S. Dollars, except unit and per unit data)


	Year Ended December 31, 2021 $	Year Ended December 31, 2020 $	Year Ended December 31, 2019 $
Voyage revenues (notes 6 and 12a)	597,831	591,103	601,256
Voyage expenses	(28,190)	(17,394)	(21,387)
Vessel operating expenses (note 12a)	(124,626)	(116,396)	(111,585)
Time-charter hire expenses (notes 5b and 12a)	(23,487)	(23,564)	(19,994)
Depreciation and amortization	(130,810)	(129,752)	(136,765)
General and administrative expenses (notes 12a and 17)	(41,040)	(26,904)	(22,521)
(Write-down) and gain on sales of vessels (notes 6 and 19)	—	(51,000)	13,564
Restructuring charges (notes 12a and 18)	(3,223)	—	(3,315)
Income from vessel operations	246,455	226,093	299,253
Equity income (notes 7 and 12a)	115,399	72,233	58,819
Interest expense	(118,618)	(132,806)	(164,521)
Interest income (note 7a)	5,945	6,884	3,985
Realized and unrealized gain (loss) on non-designated derivative instruments (note 13)	8,523	(33,334)	(13,361)
Foreign currency exchange gain (loss) (notes 10 and 13)	8,612	(21,356)	(9,640)

Other expense (notes 3b and 5a)	(3,882)	(16,910)	(2,454)
Net income before income tax expense	262,434	100,804	172,081
Income tax expense (notes 11 and 14b)	(6,886)	(3,492)	(7,477)
Net income	255,548	97,312	164,604
Non-controlling interest in net income	12,900	9,955	11,814
Preferred unitholders' interest in net income	25,702	25,702	25,702
General partner's interest in net income	3,808	1,023	2,542
Limited partners’ interest in net income	213,138	60,632	124,546
Limited partners’ interest in net income per common unit (note 16):
• Basic	2.45	0.73	1.59
• Diluted	2.44	0.73	1.59
Weighted-average number of common units outstanding (note 16):
• Basic	87,091,647	83,313,097	78,177,189
• Diluted	87,216,312	83,419,004	78,268,412
Cash distributions declared per common unit	1.11	0.94	0.71

Year Ended
December 31,
2018
$ Year Ended
December 31,
2017
$ Year Ended
December 31,
2016
$
Voyage revenues (notes 6 and 12a)
510,762
432,676
396,444
Voyage expenses (28,237 ) (8,202 ) (1,656 )
Vessel operating expenses (note 12a)
(117,658 ) (101,539 ) (87,890 )
Time-charter hire expense (note 12a)
(7,670 ) —
—
Depreciation and amortization (124,378 ) (105,545 ) (95,542 )
General and administrative expenses (notes 12a and 17)
(28,512 ) (18,141 ) (19,199 )
Write-down of goodwill and write-down and loss on sales of vessels (notes 8 and 19)
(54,653 ) (50,600 ) (38,976 )
Restructuring charges (note 18)
(1,845 ) —
—
Income from vessel operations 147,809
148,649
153,181
Equity income (notes 7 and 14d)
53,546
9,789
62,307
Interest expense (128,303 ) (80,937 ) (58,844 )
Interest income 3,760
2,915
2,583
Realized and unrealized gain (loss) on non-designated
derivative instruments (note 13)
3,278
(5,309 ) (7,161 )
Foreign currency exchange gain (loss) (notes 10 and 13)
1,371
(26,933 ) 5,335
Other (expense) income (note 14b)
(51,373 ) 1,561
1,537
Net income before income tax expense 30,088
49,735
158,938
Income tax expense (notes 11 and 14c)
(3,213 ) (824 ) (973 )
Net income 26,875
48,911
157,965
Non-controlling interest in net income (1,494 ) 14,946
17,514
Preferred unitholders' interest in net income 25,701
13,979
2,719
General Partner's interest in net income 53
400
2,755
Limited partners’ interest in net income 2,615
19,586
134,977
Limited partners’ interest in net income per common unit (note 16):

• Basic 0.03
0.25
1.70
• Diluted 0.03
0.25
1.69
Weighted-average number of common units outstanding (note 16):

• Basic 79,672,435
79,617,778
79,568,352
• Diluted 79,842,328
79,791,041
79,671,858
Cash distributions declared per common unit 0.56
0.56
0.56

Related party transactions (note 12)

Subsequent events (note 20)

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

F-4

SEAPEAK LLC (FORMERLY TEEKAY LNG PARTNERS L.P.) AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (notes 1 and 2)

(in thousands of U.S. Dollars)

Year Ended
December 31,
2018
$ Year Ended
December 31,
2017
$ Year Ended
December 31,
2016
$
Net income 26,875
48,911
157,965
Other comprehensive (loss) income:
Other comprehensive (loss) income before reclassifications
Unrealized (loss) gain on qualifying cash flow hedging instruments,
net of tax (note 13)
(893 ) 1,140
(486 )
Amounts reclassified from accumulated other comprehensive
income, net of tax
To equity income:
Realized (gain) loss on qualifying cash flow hedging instruments (383 ) 2,465
3,289
To interest expense:
Realized loss on qualifying cash flow hedging instruments (note 13)
152
427
—
Other comprehensive (loss) income (1,124 ) 4,032
2,803
Comprehensive income 25,751
52,943
160,768
Non-controlling interest in comprehensive (loss) income (856 ) 15,074
17,691
Preferred unitholders' interest in comprehensive income 25,701
13,979
2,719
General and limited partners' interest in comprehensive income 906
23,890
140,358


	Year Ended December 31, 2021 $	Year Ended December 31, 2020 $	Year Ended December 31, 2019 $
Net income	255,548	97,312	164,604
Other comprehensive income (loss):
Other comprehensive income (loss) before reclassifications
Unrealized gain (loss) on qualifying cash flow hedging instruments, net of tax	29,292	(66,958)	(57,616)
Amounts reclassified from accumulated other comprehensive loss, net of tax
To equity income:
Realized loss on qualifying cash flow hedging instruments	20,255	15,570	552
To interest expense:
Realized loss (gain) on qualifying cash flow hedging instruments (note 13)	3,304	2,320	(376)
Other comprehensive income (loss)	52,851	(49,068)	(57,440)
Comprehensive income	308,399	48,244	107,164
Non-controlling interest in comprehensive income	15,078	7,411	9,572
Preferred unitholders' interest in comprehensive income	25,702	25,702	25,702
General and limited partners' interest in comprehensive income	267,619	15,131	71,890

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

F-5

SEAPEAK LLC (FORMERLY TEEKAY LNG PARTNERS L.P.) AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (notes 1 and 2)

(in thousands of U.S. Dollars)

As at
December 31,
2018
$ As at
December 31,
2017
$

ASSETS
Current
Cash and cash equivalents 149,014
244,241
Restricted cash – current (note 15a)
38,329
22,326
Accounts receivable, including non-trade of $6,461 (2017 – $13,203) (note 7a iii)
20,795
24,054
Prepaid expenses 8,076
6,539
Vessels held for sale (note 19c and 19d)
—
33,671
Current portion of derivative assets (note 13)
835
1,078
Current portion of net investments in direct financing leases (note 6)
12,635
9,884
Current portion of advances to equity-accounted joint ventures (note 7)
79,108
—
Advances to affiliates (notes 12c and 13)
8,229
7,300
Other current assets (note 2)
2,306
—
Total current assets 319,327
349,093
Restricted cash – long-term (note 15a)
35,521
72,868
Vessels and equipment
At cost, less accumulated depreciation of $665,206 (2017 – $681,991) 1,657,338
1,416,381
Vessels related to capital leases, at cost, less accumulated depreciation of $66,878 (2017 – $25,883) (note 5a)
1,585,243
1,044,838
Advances on newbuilding contracts (notes 12b and 14a)
86,942
444,493
Total vessels and equipment 3,329,523
2,905,712
Investment in and advances to equity-accounted joint ventures (note 7)
1,037,025
1,094,596
Net investments in direct financing leases (note 6)
562,528
486,106
Other assets (notes 6 and 11)
11,432
8,043
Derivative assets (note 13)
2,362
6,172
Intangible assets – net (note 8)
52,222
61,078
Goodwill (note 8)
34,841
35,631
Total assets 5,384,781
5,019,299
LIABILITIES AND EQUITY
Current
Accounts payable 3,830
3,509
Accrued liabilities (notes 9 and 13)
74,753
45,757
Unearned revenue (notes 5c and 6)
30,108
25,873
Current portion of long-term debt (note 10)
135,901
552,404
Current obligations related to capital leases (note 5a)
81,219
106,946
In-process contracts (note 7a iii)
—
7,946
Current portion of derivative liabilities (note 13)
11,604
79,139
Advances from affiliates (note 12c)
14,731
12,140
Total current liabilities 352,146
833,714
Long-term debt (note 10)
1,833,875
1,245,588
Long-term obligations related to capital leases (note 5a)
1,217,337
904,603
Other long-term liabilities (notes 5c and 7a)
43,788
58,174
Derivative liabilities (note 13)
55,038
45,797
Total liabilities 3,502,184
3,087,876
Commitments and contingencies (notes 5, 7, 10, 13 and 14)

Equity

Limited Partners - common units (79.4 million units and 79.6 million units issued and outstanding at December 31, 2018 and 2017, respectively) (note 16)
1,496,107
1,539,248
Limited Partners - preferred units (11.8 million units issued and outstanding at December 31, 2018 and 2017) (note 16)
285,159
285,159
General Partner 49,271
50,152
Accumulated other comprehensive income 2,717
4,479
Partners' equity 1,833,254
1,879,038
Non-controlling interest 49,343
52,385
Total equity 1,882,597
1,931,423
Total liabilities and total equity 5,384,781
5,019,299


	As at December 31, 2021 $	As at December 31, 2020 $

ASSETS
Current
Cash and cash equivalents	92,069	206,762
Restricted cash – current (note 15a)	11,888	8,358
Accounts receivable, including non-trade of $25,247 (2020 – $5,411)	45,505	7,631
Prepaid expenses	14,950	9,259
Vessel held for sale (note 19a)	9,813	—
Current portion of derivative assets (note 13)	672	—
Current portion of net investments in direct financing leases, net (notes 3b and 6)	14,860	13,969
Current portion of advances to equity-accounted joint ventures, net (notes 3b and 7)	17,500	10,991
Advances to affiliates (note 12b)	4,153	4,924
Other current assets	6,033	237
Total current assets	217,443	262,131
Restricted cash – long-term (note 15a)	38,100	42,823
Vessels and equipment
At cost, less accumulated depreciation of $801,725 (2020 – $744,258)	1,186,968	1,220,355
Vessels related to finance leases, at cost, less accumulated depreciation of $206,161 (2020 – $157,386) (note 5a)	1,637,815	1,654,814
Operating lease right-of-use assets (note 5b)	6,747	20,750

Total vessels and equipment	2,831,530	2,895,919
Investments in and advances to equity-accounted joint ventures, net (notes 3b and 7)	1,136,374	1,056,792
Net investments in direct financing leases, net (notes 3b and 6)	480,508	500,101
Other assets	26,710	22,382
Derivative assets (note 13)	7,425	4,505
Intangible assets, net (note 8)	25,654	34,510
Goodwill (note 8)	34,841	34,841
Total assets	4,798,585	4,854,004
LIABILITIES AND EQUITY
Current
Accounts payable	10,197	4,883
Accrued liabilities (notes 9, 13 and 18)	71,864	81,706
Unearned revenue (note 6)	19,973	30,254
Current portion of long-term debt (note 10)	156,064	250,508
Current obligations related to finance leases (note 5a)	73,953	71,932

Current portion of operating lease liabilities (note 5b)	6,747	14,003
Current portion of derivative liabilities (note 13)	15,581	56,925
Advances from affiliates (note 12b)	12,426	11,047
Total current liabilities	366,805	521,258
Long-term debt (note 10)	1,223,578	1,221,705
Long-term obligations related to finance leases (note 5a)	1,195,037	1,268,990
Long-term operating lease liabilities (note 5b)	—	6,747
Other long-term liabilities (notes 3b, 7a and 14c)	60,853	56,063
Derivative liabilities (note 13)	23,289	32,971
Total liabilities	2,869,562	3,107,734
Commitments and contingencies (notes 5, 7, 10, 13 and 14)

Equity
Limited partners - common units (Unlimited units authorized; 87.0 million units issued and outstanding at December 31, 2021 and 2020, respectively)	1,583,229	1,465,408
Limited partners - preferred units (11.9 million units authorized; 11.8 million units issued and outstanding at December 31, 2021 and 2020)	285,159	285,159
General partner	48,286	46,182
Accumulated other comprehensive loss	(53,163)	(103,836)
Partners' equity	1,863,511	1,692,913
Non-controlling interest	65,512	53,357
Total equity	1,929,023	1,746,270
Total liabilities and total equity	4,798,585	4,854,004

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

statements

F-6

SEAPEAK LLC (FORMERLY TEEKAY LNG PARTNERS L.P.) AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (notes 1 and 2)

(in thousands of U.S. Dollars)


	Year Ended December 31, 2021 $	Year Ended December 31, 2020 $	Year Ended December 31, 2019 $
Cash, cash equivalents and restricted cash provided by (used for)
OPERATING ACTIVITIES
Net income	255,548	97,312	164,604
Non-cash and non-operating items:
Unrealized (gain) loss on non-designated derivative instruments (note 13)	(42,652)	16,467	3,133
Depreciation and amortization	130,810	129,752	136,765
Write-down and (gain) on sales of vessels (notes 6, 8 and 19)	—	51,000	(13,564)
Unrealized foreign currency exchange (gain) loss including the effect of settlement upon maturity or termination of cross currency swaps (note 13)	(16,656)	16,194	2,805
Equity income, net of distributions received and return of capital $50,122 (2020 – $71,758 and 2019 – $40,303)	(65,277)	(475)	(18,516)
Amortization of deferred financing issuance costs included in interest expense	5,245	5,788	8,135
Change in unrealized credit loss provisions included in other expense (note 3b)	2,817	16,075	—
Other non-cash items	6,578	7,161	7,634
Change in operating assets and liabilities (note 15b)	(77,555)	274,231	7,933
Net operating cash flow	198,858	613,505	298,929

FINANCING ACTIVITIES
Proceeds from issuance of long-term debt	669,691	604,050	186,566
Scheduled repayments of long-term debt and settlement of related swaps (note 13)	(353,141)	(256,085)	(132,627)
Prepayments of long-term debt	(391,543)	(752,061)	(188,787)
Financing issuance costs	(9,728)	(5,111)	(1,149)
Proceeds from financing related to sales and leaseback of vessels	—	—	317,806
Scheduled repayments of obligations related to finance leases	(71,932)	(69,982)	(71,726)
Extinguishment of obligations related to finance leases	—	—	(111,617)

Repurchase of common units (note 16)	—	(15,635)	(25,728)

Cash distributions paid	(124,195)	(104,397)	(82,379)

Dividends paid to non-controlling interest	(2,923)	(5,940)	(90)
Acquisition of non-controlling interest in certain of the Company's subsidiaries (note 12d)	—	(2,219)	—

Net financing cash flow	(283,771)	(607,380)	(109,731)

INVESTING ACTIVITIES
Expenditures for vessels and equipment, net of warranty settlement	(41,973)	(10,482)	(97,895)
Capital contributions and advances to equity-accounted joint ventures	—	(991)	(72,391)
Proceeds from repayments of advances to equity-accounted joint ventures	11,000	10,000	—
Proceeds from sales of vessels (note 19b)	—	—	11,515
Net investing cash flow	(30,973)	(1,473)	(158,771)

Increase in cash, cash equivalents and restricted cash	(115,886)	4,652	30,427
Cash, cash equivalents and restricted cash, beginning of the year	257,943	253,291	222,864
Cash, cash equivalents and restricted cash, end of the year	142,057	257,943	253,291

Year Ended
December 31,
2018
$ Year Ended
December 31,
2017
$ Year Ended
December 31,
2016
$
Cash, cash equivalents and restricted cash provided by (used for)
OPERATING ACTIVITIES
Net income 26,875
48,911
157,965
Non-cash and non-operating items:
Unrealized gain on non-designated derivative instruments (note 13)
(30,133 ) (13,448 ) (19,433 )
Depreciation and amortization 124,378
105,545
95,542
Write-down of goodwill and write-down and loss on sales of vessels 54,653
50,600
38,976
Unrealized foreign currency exchange (gain) loss including the effect of the termination of cross currency swaps (note 13)
(7,525 ) 23,153
(15,345 )
Equity income, net of dividends received of $14,421 (2017 – $42,692 and 2016 – $31,113) (39,125 ) 32,903
(31,194 )
Ineffective portion of qualifying hedge-accounted interest rate swaps included in interest expense (740 ) 740
—
Other non-cash items (1,035 ) (5,616 ) (9,602 )
Change in non-cash operating assets and liabilities (note 15b)
19,218
(2,396 ) (9,861 )
Expenditures for dry docking (15,368 ) (21,642 ) (12,686 )
Net operating cash flow 131,198

218,750
194,362

FINANCING ACTIVITIES
Proceeds from issuance of long-term debt 1,135,304
362,527
573,514
Scheduled repayments of long-term debt and settlement of related swaps (506,437 ) (194,237 ) (316,450 )
Prepayments of long-term debt and settlement of related swaps (465,122 ) (236,474 ) (481,133 )
Financing issuance costs (11,932 ) (8,361 ) (3,462 )
Proceeds from financing related to sales and leaseback of vessels 370,050
656,935
355,306
Scheduled repayments of obligations related to capital leases (59,722 ) (42,000 ) (21,594 )
Proceeds from issuance of preferred units net of offering costs (note 16)
—
164,411
120,707
Repurchase of common units (note 16)
(3,786 ) —
—
Cash distributions paid (70,345 ) (56,650 ) (45,467 )
Dividends paid to non-controlling interest (2,925 ) (1,595 ) (3,402 )
Other —
(605 ) —
Net financing cash flow 385,085
643,951
178,019

INVESTING ACTIVITIES
Expenditures for vessels and equipment (686,148 ) (708,608 ) (345,790 )
Capital contributions and advances to equity-accounted joint ventures (40,544 ) (183,874 ) (120,879 )
Return of capital and repayment of advances from equity-accounted joint ventures —
92,320
5,500
Proceeds from sale of equity-accounted joint venture 54,438
—
—
Receipts from direct financing leases 10,882
13,143
23,650
Proceeds from sales of vessels (note 19a)
28,518
20,580
94,311
Net investing cash flow (632,854 ) (766,439 ) (343,208 )
(Decrease) increase in cash, cash equivalents and restricted cash (116,571 ) 96,262
29,173
Cash, cash equivalents and restricted cash, beginning of the year 339,435
243,173
214,000
Cash, cash equivalents and restricted cash, end of the year 222,864
339,435
243,173

Supplemental cash flow information (note 15)

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

F-7

SEAPEAK LLC (FORMERLY TEEKAY LNG PARTNERS L.P.) AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN TOTAL EQUITY (notes 1 and 2)

(in thousands of U.S. Dollars and units)

TOTAL EQUITY
Partners’ Equity
Limited Partners
Common
Units Common
Units Preferred
Units Preferred
Units General
Partner Accumulated
Other Comprehensive Income (Loss) Non-
controlling
Interest Total
# $ # $ $ $ $ $
Balance as at December 31, 2015 79,551
1,472,327
—
—
48,786
(2,051 ) 24,617
1,543,679
Net income —
134,977
—
2,719
2,755
—
17,514
157,965
Other comprehensive income —
—
—
—
—
2,626
177
2,803
Distributions declared —
(44,557 ) —
—
(910 ) —
—
(45,467 )
Dividends paid to non-controlling interest —
—
—
—
—
—
(3,402 ) (3,402 )
Equity based compensation, net of withholding tax of $0.2 million 21
1,105
—
—
22
—
—
1,127
Proceeds from equity offerings (note 16)
—
—
5,000
120,707
—
—
—
120,707
Balance as at December 31, 2016 79,572
1,563,852
5,000
123,426
50,653
575
38,906
1,777,412
Net income —
19,586
—
13,979
400
—
14,946
48,911
Other comprehensive income —
—
—
—
—
3,904
128
4,032
Distributions declared —
(44,584 ) —
(16,657 ) (909 ) —
—
(62,150 )
Dividends paid to non-controlling interest —
—
—
—
—
—
(1,595 ) (1,595 )
Equity based compensation, net of withholding tax of $0.6 million 55
394
—
—
8
—
—
402
Proceeds from equity offerings (note 16)
—
—
6,800
164,411
—
—
—
164,411
Balance as at December 31, 2017 79,627
1,539,248
11,800
285,159
50,152
4,479
52,385
1,931,423
Net income (loss) —
2,615
—
25,701
53
—
(1,494 ) 26,875
Other comprehensive (loss) income —
—
—
—
—
(1,762 ) 638
(1,124 )
Distributions declared —
(44,617 ) —
(25,701 ) (911 ) —
—
(71,229 )
Dividends paid to non-controlling interest —
—
—
—
—
—
(2,925 ) (2,925 )
Change in accounting policy (note 2)
—
1,959
—
—
41
—
739
2,739
Equity based compensation, net of withholding tax of $0.7 million 61
612
—
—
12
—
—
624
Repurchase of common units (note 16)
(327 ) (3,710 ) —
—
(76 ) —
—
(3,786 )
Balance as at December 31, 2018 79,361
1,496,107
11,800
285,159
49,271
2,717
49,343
1,882,597


	TOTAL EQUITY
	Partners’ Equity
	Limited Partners
	Common Units	Common Units	Preferred Units	Preferred Units	General Partner		Accumulated Other Comprehensive Income (Loss)	Non- controlling Interest	Total
	#	$	#	$	$		$	$	$











Balance as at December 31, 2018	79,361	1,496,107	11,800	285,159	49,271		2,717	49,343	1,882,597
Net income	—	124,546	—	25,702	2,542		—	11,814	164,604
Other comprehensive loss	—	—	—	—	—		(55,198)	(2,242)	(57,440)
Distributions declared:
Common units ($0.71 per unit)	—	(55,543)	—	—	(1,134)		—	—	(56,677)
Preferred units Series A ($2.25 per unit)	—	—	—	(11,250)	—		—	—	(11,250)
Preferred units Series B ($2.13 per unit)	—	—	—	(14,452)	—		—	—	(14,452)
Dividends paid to non-controlling interest	—	—	—	—	—		—	(90)	(90)
Change in accounting policy	—	1,777	—	—	37	\	(4,831)	—	(3,017)
Equity based compensation, net of withholding tax of $0.5 million	83	1,087	—	—	22		—	—	1,109
Acquisition of non-controlling interest in certain of the Company's subsidiaries (note 12d)	—	838	—	—	17		—	(3,536)	(2,681)
Repurchase of common units (note 16)	(1,934)	(25,214)	—	—	(514)		—	—	(25,728)
Balance as at December 31, 2019	77,510	1,543,598	11,800	285,159	50,241		(57,312)	55,289	1,876,975
Net income	—	60,632	—	25,702	1,023		—	9,955	97,312
Other comprehensive loss	—	—	—	—	—		(46,524)	(2,544)	(49,068)
Distributions declared:
Common units ($0.94 per unit)	—	(77,228)	—	—	(1,467)		—	—	(78,695)
Preferred units Series A ($2.25 per unit)	—	—	—	(11,249)	—		—	—	(11,249)
Preferred units Series B ($2.13 per unit)	—	—	—	(14,453)	—		—	—	(14,453)
Dividends paid to non-controlling interest	—	—	—	—	—		—	(5,940)	(5,940)
Change in accounting policy (note 2)	—	(50,839)	—	—	(1,037)		—	(3,224)	(55,100)
Equity based compensation, net of withholding tax of $0.4 million	64	1,630	—	—	31		—	—	1,661
Other (note 12d)	—	629	—	—	12		—	(179)	462
Issuance of common units (notes 12e and 16)	10,750	2,308	—	—	(2,308)		—	—	—
Repurchase of common units (note 16)	(1,373)	(15,322)	—	—	(313)		—	—	(15,635)
Balance as at December 31, 2020	86,951	1,465,408	11,800	285,159	46,182		(103,836)	53,357	1,746,270
Net income	—	213,138	—	25,702	3,808		—	12,900	255,548
Other comprehensive income	—	—	—	—	—		50,673	2,178	52,851
Distributions declared:
Common units ($1.11 per unit)	—	(96,763)	—	—	(1,730)		—	—	(98,493)
Preferred units Series A ($2.25 per unit)	—	—	—	(11,249)	—		—	—	(11,249)
Preferred units Series B ($2.13 per unit)	—	—	—	(14,453)	—		—	—	(14,453)
Dividends paid to non-controlling interest	—	—	—	—	—		—	(2,923)	(2,923)
Equity based compensation, net of withholding tax of $0.5 million	59	1,446	—	—	26		—	—	1,472
Balance as at December 31, 2021	87,010	1,583,229	11,800	285,159	48,286		(53,163)	65,512	1,929,023

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

F-8


1.	~~Summary of Significant Accounting Policies~~

SEAPEAK LLC (FORMERLY TEEKAY LNG PARTNERS L.P.) AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in thousands of U.S. Dollars, except unit and per unit data and foreign currency exchange rates or unless otherwise indicated)

1.Summary of Significant Accounting Policies

Basis of presentation

Effective February 25, 2022, Teekay LNG Partners L.P. (or the Partnership) legally changed its name to Seapeak LLCand converted from a limited partnership formed under the laws of the Republic of the Marshall Islands into a limited liability company formed under the laws of the Republic of the Marshall Islands (or the Conversion). The Conversion is deemed a continuation of the existence of the Partnership in the form of Seapeak LLC, as a Marshall Islands limited liability company, with the existence of Seapeak LLC deemed to have commenced on the date the Partnership commenced its existence. Upon the Conversion, all of the rights, privileges and powers of the Partnership, and all property of and all property and debts due to the Partnership, became vested in Seapeak LLC and the property of Seapeak LLC (as described in Note 20b).

These consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (or GAAP). They include the accounts of ~~Teekay LNG Partners L.P.,~~Seapeak LLC, which is a limited ~~partnership organized~~liability company formed under the laws of the Republic of The Marshall Islands, its wholly-owned or controlled subsidiaries and any variable interest entities (or VIEs) of which it is the primary beneficiary (see Note 5a) (collectively, the ~~Partnership~~Company,which also refers to Seapeak LLC when it was previously Teekay LNG Partners L.P.).

The preparation of ~~these~~ consolidated 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. Significant intercompany balances and transactions have been eliminated upon consolidation.

In ~~addition, certain comparative figures have been reclassified~~March 2020, the World Health Organization declared the outbreak of a novel coronavirus (or COVID-19) as a pandemic. While the Company has experienced some logistical challenges across its fleet due to ~~conform~~COVID-19, the Company has not yet experienced any material negative financial impacts to its results of operations or financial position for the periods covered by these consolidated financial statements as a result of COVID-19, other than the COVID-19 global pandemic being a contributing factor to the ~~presentation adopted in~~write-down of the ~~current period relating to a change in~~Company's 7 multi-gas vessels during the Partnership's reportable segments (see Note 4) and to reclassifications of certain related party transactions between vessel operating expenses and general and administrative expenses in the Partnership's consolidated statements of income that resulted in a decrease in vessel operating expenses and an offsetting increase in general and administrative expenses of $1.6 million and $0.7 million for the yearsyear ended December 31, ~~2017~~2020 as described in Note 19a. Given the dynamic nature of the COVID-19 global pandemic, the full extent to which the COVID-19 global pandemic may have material direct or indirect impact on the Company's business and ~~December 31, 2016, respectively.~~the related financial reporting implications cannot be reasonably estimated at this time, although it could materially affect the business, results of operations and financial condition in the future.

Foreign currency

The consolidated financial statements are stated in U.S. Dollars and the functional currency of the ~~Partnership~~Company is the U.S. Dollar. 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 in foreign currency exchange gain (loss) in the accompanying consolidated statements of income.

Revenues

The Company’s time charters and voyage charters include both a lease component, consisting of the lease of the vessel, and a non-lease component, consisting of the operation of the vessel for the customer. The Company has elected to not separate the non-lease component from the lease component for all such charters, where the lease component is classified as an operating lease, and to account for the combined component as an operating lease. The Company’s time-charter contracts accounted for as direct financing leases and sales-type leases contain both a lease component (lease of the vessel) and a non-lease component (operation of the vessel). The Company has allocated the contract consideration between the lease component and non-lease component on a relative standalone selling price basis. The standalone selling price of the non-lease component has been determined using a cost-plus approach, whereby the Company estimates the cost to operate the vessel using cost benchmarking studies prepared by a third party, when available, or internal estimates when not available, plus a profit margin. The standalone selling price of the lease component has been determined using an adjusted market approach, whereby the Company calculates a rate excluding the operating component based on a market time-charter rate from published broker estimates, when available, or internal estimates when not available. Given that there are no observable standalone selling prices for either of these two components, judgment is required in determining the standalone selling price of each component.

Time charters

Revenues from ~~time-charters~~time charters accounted for as operating leases are recognized by the ~~Partnership~~Company on a straight-line basis daily over the term of the charter. If collectibility of the time-charter hire receipts from time charters accounted for as operating leases is not probable, revenue that would have otherwise been recognized is limited to the amount collected from the charterer.

Upon commencement of a time charter accounted for as a sales-type lease or a direct financing lease, the carrying value of the vessel is derecognized and the net investment in the lease is ~~recognized. The~~recognized, based on the fair value of the vessel. For direct financing leases and sales-type leases, the lease element of time-charter hire receipts is allocated to the lease receivable and voyage revenues over the term of the lease using the effective interest rate method. The non-lease element of time-charter hire receipts is recognized by the ~~Partnership~~Company on a straight-line basis daily over the term of the charter. Drydock cost reimbursements allocable to the non-lease element of a time-charter are recognized on a straight-line basis over the period between the previous scheduled drydock and the next scheduled drydock. In addition, if collectibility of non-lease receipts of charter payments from charterers is not probable, any such receipts are recognized as a liability unless the receipts are non-refundable and either the time-charter contract has been terminated or the Company has no remaining performance obligations. For time-charter contracts where the charterer is responsible for the operation of the vessel, the ~~Partnership~~Company offsets any vessel operating expenses it incurs against reimbursements from the charterer.

F-9

SEAPEAK LLC (FORMERLY TEEKAY LNG PARTNERS L.P.) AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in thousands of U.S. Dollars, except unit and per unit data and foreign currency exchange rates or unless otherwise indicated)

The ~~Partnership~~Company does not recognize revenues during days that the vessel is ~~off-hire or if collectability of receipts of charter payments from charterers is not reasonably assured.~~off-hire. When the ~~time charter~~time-charter contains a profit-sharing agreement, drydock cost reimbursements for time charters accounted for as operating leases (see Note 2), or other variable consideration, the ~~Partnership~~Company recognizes this revenue in the ~~profit-sharing or contingent revenues when~~period in which the ~~contingency is resolved.~~changes in facts and circumstances on which the variable charter hire payments are based occur.

Voyage charters

Revenues from voyage charters are recognized on a proportionate performance method. The ~~Partnership~~Company uses a discharge-to-discharge basis in determining proportionate performance for all spot voyages that contain a lease and a load-to-discharge basis in determining proportionate performance for all spot voyages that do not contain a lease. The ~~Partnership~~Company does not begin recognizing revenue until a charter has been agreed to by the customer, even if the vessel has discharged its cargo and is sailing to the anticipated load port on its next voyage. The consolidated balance sheets reflect, in other current assets, the accrued portion of revenues for those voyages that commence prior to balance sheet date and complete after the balance sheet date.

Bareboat charters

Revenues from bareboat charters accounted for as operating leases are recognized by the ~~Partnership~~Company on a straight-line basis daily over the term of the charter. If collectibility of the bareboat hire receipts from bareboat charters accounted for as operating leases is not probable, revenue that would have otherwise been recognized is limited to the amount collected from the charterer.

Upon commencement of a bareboat charter accounted for as a ~~direct financing~~sales-type lease, the carrying value of the vessel is derecognized and the net investment in the lease is ~~recognized. Bareboat~~recognized, based on the fair value of the vessel. For direct financing leases and sales-type leases, bareboat hire receipts are allocated to the lease receivable and voyage revenues over the term of the lease using the effective interest rate method. ~~The Partnership does not recognize revenues if collectability of charter hire payments is not reasonably assured.~~

Operating expenses

Voyage expenses include all expenses unique to a particular voyage, including fuel expenses, port fees, cargo loading and unloading expenses, canal tolls, agency fees and commissions. The ~~Partnership,~~Company, as shipowner, pays voyage expenses under voyage charters. The ~~Partnership’s~~Company’s customers pay voyage expenses under time charters, except when the vessel is off-hire during the term of a time-charter, in which case the ~~Partnership~~Company pays voyage expenses.

Vessel operating expenses include crewing, ship management services, repairs and maintenance, insurance, stores, lube oils and communication expenses.

Voyage expenses and vessel operating expenses are recognized when incurred except when the ~~Partnership~~Company incurs pre-operational costs related to the repositioning of a vessel (i) that relates directly to a specific customer contract, (ii) that generates or enhances resources of the ~~Partnership~~Company that will be used in satisfying performance obligations in the future; and (iii) where such costs are expected to be recovered via the customer contract. In this case, such costs are deferred and amortized over the duration of the customer contract.

~~The Partnership recognizes the expense from vessels accounted for as operating leases, which is included in time-charter hire expense, on a straight-line basis over the firm period of the charters.~~

Cash and cash equivalents

The ~~Partnership~~Company classifies all highly liquid investments with an original maturity date of three months or less as cash and cash equivalents.

Restricted cash

The ~~Partnership~~Company maintains restricted cash deposits relating to certain term loans, collateral for derivatives, project tenders, leasing arrangements, amounts received from charterers to be used only for dry-docking expenditures and emergency repairs and other obligations.

Accounts receivable and ~~allowance for doubtful accounts~~other loan receivables

Accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is the Partnership’s best estimate of the amount of probable credit losses in existing accounts receivable. The Partnership determines the allowance based on historical write-off experience and customer economic data. The Partnership reviews the allowance for doubtful accounts regularly and past due balances are reviewed for collectability. Account balances are charged against the allowance when the Partnership believes that the receivable will not be recovered. The consolidated balance sheets reflect amounts where the right to consideration is conditioned upon the passage of time as "accounts receivable," and reflect accrued revenue where the right to consideration is conditioned upon something other than the passage of time as "other current assets."

~~Other loan receivables~~

The ~~Partnership’s~~Company’s advances to equity-accounted joint ventures and any other investments in loan receivables are recorded at cost. The Partnership analyzes its loans for collectability during each reporting period. A loan loss provision is recognized, based on current information and events, if it is probable that the Partnership will be unable to collect all amounts due according to the contractual terms of the loan agreement. Factors the Partnership considers in determining if a loan loss provision is required 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 its ability to repay the loan, and the fair value of the underlying collateral. When a loan loss provision is recognized, the Partnership measures the amount of the loss provision based on the present value of expected future cash flows discounted at the loan’s effective interest rate and recognizes the resulting loss in the consolidated statements of income. The carrying value of the loan is adjusted each subsequent period to reflect any changes in the present value of the expected future cash flows, which may result in increases or decreases to the loan loss provision.

The following table contains a summary of the carrying value of the Partnership’s financing receivables by type of borrower, the method by which the Partnership monitors the credit quality of its financing receivables on a quarterly basis and the grade as at December 31, 2018.

Class of Financing Receivable Credit Quality Indicator Grade December 31,
2018
$ December 31,
2017
$
Direct financing leases Payment activity Performing 575,163
495,990
Other receivables:
Long-term receivable and accrued revenue included in accounts receivable and other assets Payment activity Performing 5,694
5,476
Advances to equity-accounted joint ventures (note 7)
Other internal metrics Performing 131,386
131,685
712,243
633,151

Vessels and equipment

All pre-delivery costs incurred during the construction of newbuildings, including interest and supervision and technical costs, are capitalized. The acquisition cost and all costs incurred to restore used vessels purchased by the ~~Partnership~~Company to the standards required to properly service the ~~Partnership’s~~Company’s customers are capitalized.

~~Interest costs capitalized to vessels and equipment for the years ended December 31, 2018, 2017 and 2016 aggregated $14.8 million, $13.9 million and $9.9 million, respectively.~~

Vessel capital modifications include the addition of new equipment or certain modifications to the vessel which are aimed at improving or increasing the operational efficiency and functionality of the asset. This type of expenditure is capitalized and depreciated over the estimated useful life of the modification. Expenditures covering recurring routine repairs and maintenance are expensed as incurred.

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 conventional tankers, 30 years for liquefied petroleum gas (or LPG) carriers and 35 years for liquefied natural gas (or LNG) carriers, from the date the vessel is delivered from the shipyard, or a shorter period if regulations prevent the ~~Partnership~~Company from operating the vessels for 25 years, 30 years, or 35 years, respectively. Depreciation of vessels and equipment, excluding amortization of dry-docking expenditures, for the years ended December 31, ~~2018, 2017~~2021, 2020 and ~~2016~~2019 aggregated ~~$115.5~~to $106.4 million, ~~$96.7~~$107.1 million and ~~$86.6~~$115.1 million, respectively. Depreciation and amortization includes depreciation on all owned vessels and amortization of vessels accounted for as ~~capital~~finance leases.

F-10

SEAPEAK LLC (FORMERLY TEEKAY LNG PARTNERS L.P.) AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in thousands of U.S. Dollars, except unit and per unit data and foreign currency exchange rates or unless otherwise indicated)

Generally, the ~~Partnership~~Company dry docks each of its vessels every ~~two and a half~~2.5 years to ~~five~~5 years. The ~~Partnership~~Company capitalizes certain costs incurred during dry docking and amortizes those costs on a straight-line basis from the completion of a dry docking to the estimated completion of the next dry docking. The ~~Partnership~~Company includes in capitalized dry docking those costs incurred as part of the dry docking to meet classification and regulatory requirements. The ~~Partnership~~Company expenses costs related to routine repairs and maintenance performed during dry docking.

The following table summarizes the change in the ~~Partnership’s~~Company’s capitalized ~~dry docking~~dry-docking costs from January 1, ~~2016~~2019 to December 31, ~~2018:~~2021:


	Year Ended December 31, 2021 $	Year Ended December 31, 2020 $	Year Ended December 31, 2019 $
Balance at January 1,	31,239	38,764	40,365
Cost incurred for dry docking	36,060	6,968	11,000
Transfer to vessel held for sale and write-down of vessels	(896)	(766)	—
Dry-dock amortization	(15,383)	(13,727)	(12,601)
Balance at December 31,	51,020	31,239	38,764

Year Ended
December 31,
2018
$ Year Ended
December 31,
2017
$ Year Ended
December 31,
2016
$
Balance at January 1, 39,144
33,538
33,916
Cost incurred for dry docking 15,259
22,283
13,944
Write-downs and sales of vessels (2,448 ) (2,782 ) (2,886 )
Dry-dock amortization (11,590 ) (13,895 ) (11,436 )
Balance at December 31, 40,365
39,144
33,538

Vessels and equipment that are intended to be held and used in the ~~Partnership's~~Company's business are assessed for impairment when events or circumstances indicate the carrying ~~amount~~value of the asset may not be recoverable. If the asset’s net carrying value exceeds the estimated net undiscounted cash flows expected to be generated over its remaining useful life and the fair value of the asset is less than its carrying value, the carrying ~~amount~~value of the asset is reduced to its estimated fair value. The estimated fair value for the ~~Partnership’s~~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, or in certain other cases, the ~~Partnership~~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 ~~Partnership~~Company would expect to receive if it were to sell the vessel. Such appraisal is ~~normally completed by the Partnership and is~~ based on second-hand sale and purchase ~~data.~~data, and other information provided by third parties.

Vessels and equipment that are "held for sale" are measured at the lower of their carrying ~~amount~~value or fair value less costs to sell and are not depreciated while classified as held for sale. Interest and other expenses and related liabilities attributable to vessels and equipment classified as held for sale 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 a sale-leaseback transaction is less than its book value. In such case, the Partnership would recognize a loss in the amount by which book value exceeds fair value.

Equity-accounted ~~investments~~joint ventures

The ~~Partnership’s~~Company’s investments in certain joint ventures, in which the ~~Partnership~~Company does not control the entity but has the ability to exercise significant influence over the operating and financial policies of the entity, 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 ~~Partnership’s~~Company’s proportionate share of comprehensive earnings or losses and distributions. The ~~Partnership~~Company evaluates its equity-accounted ~~investments~~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 its carrying value. If an equity-accounted investment is impaired and if the estimated fair value is less than its carrying value, the carrying value is written down to its estimated fair value and the resulting impairment is recorded in the ~~Partnership’s~~Company’s consolidated statements of income. The ~~Partnership’s~~Company’s maximum exposure to loss is the amount it has invested in and advanced to its equity-accounted ~~for investments.~~joint ventures, and the Company's proportionate share of the long-term debt and interest rate swaps that it has guaranteed within its equity-accounted joint ventures.

Debt issuance costs

Debt issuance costs related to a recognized debt liability, including fees, commissions and legal expenses, are deferred and presented as a direct reduction from the carrying amount of that debt liability and amortized on an effective interest rate method over the term of the relevant loan. Debt issuance costs that are not attributable to a specific debt liability or where the debt issuance costs exceed the carrying value of the related debt liability (primarily undrawn revolving credit facilities) are deferred and presented as other non-current assets in the ~~Partnership's~~

Company's consolidated balance sheets. Amortization of debt issuance costs is included in interest expense in the ~~Partnership’s~~Company’s consolidated statements of income.

Fees paid to substantially amend a non-revolving credit facility are associated with the extinguishment of the old debt instrument and included in determining the debt extinguishment gain or loss to be recognized. Other costs incurred with third parties directly related to the extinguishment are deferred and presented as a direct reduction from the carrying amount of the replacement debt instrument and amortized using the effective interest rate method. In addition, any unamortized debt issuance costs associated with the old debt instrument are written off. If the amendment is considered not to be a substantial amendment, then the fees would be associated with the replacement or modified debt instrument and, along with any existing unamortized premium, discount and unamortized debt issuance costs, would be amortized as an adjustment of interest expense over the remaining term of the replacement or modified debt instrument using the effective interest method. Other ~~related~~ costs incurred with third parties directly related to the modification, other than the loan amendment fee, are expensed as incurred.

Fees paid to amend a revolving credit facility are deferred and amortized over the term of the modified revolving credit facility. If the borrowing capacity of the revolving credit facility increases as a result of the amendment, unamortized debt issuance costs of the original revolving credit facility are amortized over the remaining term of the modified revolving credit facility. If the borrowing capacity of the revolving credit facility decreases as a result of the amendment, a proportionate amount, based on the reduction in borrowing capacity, of the unamortized debt issuance costs of the original revolving credit facility are written off and the remaining amount is amortized over the remaining term of the modified revolving credit facility.

F-11

SEAPEAK LLC (FORMERLY TEEKAY LNG PARTNERS L.P.) AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in thousands of U.S. Dollars, except unit and per unit data and foreign currency exchange rates or unless otherwise indicated)

Goodwill and intangible assets

Goodwill is not amortized but is 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. A reporting unit is a component of the ~~Partnership~~Company that constitutes a business for which discrete financial information is available and regularly reviewed by management. When goodwill is reviewed for impairment, the ~~Partnership~~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 ~~Partnership~~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 ~~Partnership~~Company uses a discounted cash flow model to determine the fair value of reporting units, unless there is a readily determinable fair market value. ~~The Partnership adopted ASU 2017-04,~~ ~~Simplifying the Test for~~ Goodwill ~~Impairment,~~ ~~effective October 1, 2018. Consequently, goodwill~~ impairment is measured as the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying value of goodwill.

Customer-related intangible assets are amortized over the expected life of a customer contract. The amount amortized each year is weighted based on the projected revenue to be earned under the contracts. 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.

Lease obligations and right-of-use assets

As of the lease commencement date, the Company recognizes a liability for its lease obligation, initially measured at the present value of lease payments not yet paid, and an asset for its right to use the underlying asset, initially measured equal to the lease liability and adjusted for lease payments made at or before lease commencement, lease incentives, and any initial direct costs. The initial recognition of the lease obligation and right-of-use asset excludes short-term leases for the Company’s vessels and office leases. Short-term leases are leases with an original term of one year or less, excluding those leases with an option to extend the lease for greater than one year or an option to purchase the underlying asset that the lessee is deemed reasonably certain to exercise. The initial recognition of this lease obligation and right-of-use asset excludes variable lease payments that are based on the usage or performance of the underlying asset and the portion of payments related to non-lease elements of vessel charters.

The Company uses the effective interest rate method to subsequently account for the lease liability, whereby interest is recognized in interest expense in the Company’s consolidated statements of income. For those leases classified as operating leases, lease interest and right-of-use asset amortization in aggregate result in a straight-line expense profile that is presented in time-charter hire expense for vessels and general and administrative expense for office leases, unless the right-of-use asset becomes impaired. For those leases classified as finance leases, the right-of-use asset is amortized on a straight-line basis over the remaining life of the vessel, with such amortization included in depreciation and amortization in the Company’s consolidated statements of income. Variable lease payments that are based on the usage or performance of the underlying asset are recognized as an expense when incurred, unless achievement of a specified target triggers the lease payment, in which case an expense is recognized in the period when achievement of the target is considered probable.

The Company recognizes the expense from short-term leases and any non-lease components of vessels time-chartered from other owners, on a straight-line basis over the firm period of the charters. The expense is included in time-charter hire expense for vessel charters and general and administrative expenses for office leases.

The Company has determined its time-charter-in contract contains both a lease component (lease of the vessel) and a non-lease component (operation of the vessel). The Company has allocated the contract consideration between the lease component and non-lease component on a relative standalone selling price basis. The standalone selling price of the non-lease component has been determined using a cost-plus approach, whereby the Company estimates the cost to operate the vessel using cost benchmarking studies prepared by a third party, when available, or internal estimates when not available, plus a profit margin. The standalone selling price of the lease component has been determined using an adjusted market approach, whereby the Company calculates a rate excluding the operating component based on market time-charter rate information from published broker estimates, when available, or internal estimates when not available. Given that there are no observable standalone selling prices for either of these two components, judgment is required in determining the standalone selling price of each component. The discount rate of the lease is determined using the Company’s incremental borrowing rate, which is based on the fixed interest rate the Company could obtain when entering into a secured loan facility with similar terms.

The right-of-use asset is assessed for impairment when events or circumstances indicate the carrying amount of the asset may not be recoverable. If the right-of-use 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 right-of-use asset is reduced to its estimated fair value. The estimated fair value for the Company's impaired right-of-use assets from vessel in-charters is determined using a discounted cash flow approach to estimate the fair value. Subsequent to an impairment, a right-of-use asset related to an operating lease is amortized on a straight-line basis over its remaining life.

Vessels sold and leased back by the Company, where the Company has a fixed price repurchase obligation or other situations where the leaseback would be classified as a finance lease, are accounted for as a failed sale of the vessel. The Company does not derecognize the vessel sold and continues to depreciate the vessel as if it was the legal owner. Proceeds received from the sale of the vessel are recognized as an obligation related to finance lease and bareboat charter hire payments made by the Company to the lessor are allocated between interest expense and principal repayments on the obligation related to finance lease.

Credit losses

The Company utilizes a lifetime expected credit loss measurement objective for the recognition of credit losses for net investments in direct financing and sales-type leases, loans to equity-accounted joint ventures, guarantees of secured loan facilities of equity-accounted joint ventures, non-operating lease accounts receivables, contracts assets and other receivables at the time the financial asset is originated or acquired. The expected credit losses are subsequently adjusted each period for changes in expected lifetime credit losses. The Company discontinues accrual of interest on financial assets if collection of required payments is no longer probable, and in those situations, recognizes payments received on non-accrual assets on a cash basis method, until collection of required payments becomes probable. The Company considers a financial asset to be past due when payment is not made with 30 days of it being owed, assuming there is no dispute or other uncertainty regarding the amount owing.

F-12

SEAPEAK LLC (FORMERLY TEEKAY LNG PARTNERS L.P.) AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in thousands of U.S. Dollars, except unit and per unit data and foreign currency exchange rates or unless otherwise indicated)

Expected credit loss provisions are presented on the consolidated balance sheets as a reduction to the carrying value of the related financial asset and as an other long-term liability for expected credit loss provisions that relate to guarantees of secured loan facilities of equity-accounted joint ventures. Changes in expected credit loss provisions are presented within other expense in the Company's consolidated statements of income.

Prior to the adoption of Accounting Standards Update ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments (or ASU 2016-13) on January 1, 2020, the Company recognized an allowance for doubtful accounts receivable consisting of the Company's best estimate of the amount of probable credit losses in existing accounts receivable based on historical write-off experience and customer economic data. The Company reviewed the allowance for doubtful accounts regularly and past due balances were reviewed for collectibility. Account balances were charged against the allowance when the Company believed that the receivable would not be recovered. In addition, the Company analyzed its loans for collectibility during each reporting period. A loan loss provision was recognized, based on prevailing information and events, if it was probable that the Company would be unable to collect all amounts due according to the contractual terms of the loan agreement. Factors the Company considered in determining if a loan loss provision was required 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 its ability to repay the loan, and the fair value of the underlying collateral. When a loan loss provision was recognized, the Company measured the amount of the loss provision based on the present value of expected future cash flows discounted at the loan's effective interest rate and recognized the resulting loss in the consolidated statements of income. The carrying value of the loan was adjusted each subsequent period to reflect any changes in the present value of the expected future cash flows.

For charter contracts being accounted for as operating leases, if the remaining lease payments are no longer probable of being collected any unpaid accounts receivable and any accrued revenue will be reversed against revenue and any subsequent payments will be recognized as revenue when collected until such time that the remaining lease payments are probable of being collected.

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 each period end, 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.

When a derivative is designated as a cash flow hedge, the ~~Partnership~~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.~~effectiveness are recognized immediately in earnings. The ~~Partnership~~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 probable 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 (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 (e.g. interest expense) in the Partnership’s consolidated statements of income. The ineffective portion of the change in fair value of the derivative financial instruments is immediately recognized in the corresponding earnings line item in the Partnership’sCompany’s consolidated statements of income. If a cash flow hedge is terminated or dedesignated and the originally hedged item is still considered probable 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 in the ~~Partnership’s~~Company’s consolidated statements of income. If the hedged items are no longer probable of occurring, amounts recognized in total equity are immediately transferred to the earnings line item in the ~~Partnership’s~~Company’s consolidated statements of income.

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 ~~Partnership’s~~Company’s non-designated interest rate swaps ~~non-designated interest rate swaptions,~~ and the ~~Partnership’s~~Company's agreement with Teekay Corporation (or Teekay) for the Suezmax tanker the Toledo Spirit ~~(see Note 12d)~~ (which was sold in January 2019) are recorded in realized and unrealized ~~loss~~gain (loss) on non-designated derivative instruments in the ~~Partnership’s~~Company’s consolidated statements of income. Gains and

losses from the ~~Partnership’s~~Company’s cross currency swaps are recorded in foreign currency exchange gain (loss) in the ~~Partnership’s~~Company’s consolidated statements of income.

Unit-based compensation

~~The Partnership grants~~Prior to the effective time of the Merger (as defined in Note 20a) on January 13, 2022, the Company granted restricted unit awards as incentive-based compensation under the Teekay LNG Partners L.P. 2005 Long-Term Incentive Plan to certain of the ~~Partnership’s~~Company’s employees and to certain employees of ~~Teekay Corporation’s~~Teekay’s subsidiaries that ~~provide~~provided services to the ~~Partnership~~Company and its subsidiaries. The ~~Partnership measures~~Company measured the cost of such awards using the grant date fair value of the award and ~~recognizes~~recognized that cost, net of estimated forfeitures, over the requisite service period. The requisite service period ~~consists~~consisted of the period from the grant date of the award to the earlier of the date of vesting or the date the recipient ~~becomes~~became eligible for retirement. For unit-based compensation awards subject to graded vesting, the ~~Partnership calculates~~Company calculated the value of the award as if it was one single award with one expected life and ~~amortizes~~amortized the calculated expense for the entire award on a straight-line basis over the requisite service period. The compensation cost of the ~~Partnership’s~~Company’s unit-based compensation awards is reflected in general and administrative expenses in the ~~Partnership’s~~Company’s consolidated statements of income.

Income taxes

The ~~Partnership~~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 consolidated financial statement basis and the tax basis of the ~~Partnership’s~~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~~more-likely-than-not that some or all of the benefit from the deferred tax asset will not be realized. ~~Three~~

F-13

SEAPEAK LLC (FORMERLY TEEKAY LNG PARTNERS L.P.) AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in thousands of ~~the five Partnership’s Spanish-flagged vessels are subject to the Spanish Tonnage Tax Regime (or~~ ~~TTR). Under this regime, the applicable tax is based on the weight (measured as net tonnage) of the vessel~~U.S. Dollars, except unit and the number of days during the taxable period that the vessel is at the Partnership’s disposal, excluding time required for repairs. The income the Partnership receives with respect to the remaining two Spanish-flagged vessels is taxed in Spain at a rate of 25%. However, these two vessels are registered in the Canary Islands Special Ship Registry. Consequently, the Partnership is allowed a credit, equal to 90% of the tax payable on income from the commercial operation of these vessels, against the taxper unit data and foreign currency exchange rates or unless otherwise ~~payable. This effectively results in an income tax rate of approximately 2.5% on income from the operation of these two Spanish-flagged vessels.~~indicated)

The ~~Partnership~~Company recognizes the tax benefits of uncertain tax positions only if 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 by the taxing authorities, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefits recognized in the ~~Partnership’s~~Company’s consolidated financial statements from such positions are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The ~~Partnership~~Company recognizes interest and penalties related to uncertain tax positions in income tax expense in the ~~Partnership’s~~Company’s consolidated statements of income.

Guarantees

Guarantees issued by the ~~Partnership,~~Company, excluding those that are guaranteeing its own performance, are recognized at fair value at the time the guarantees are issued and are presented in the ~~Partnership’s~~Company’s consolidated balance sheets as other long-term liabilities. The liability recognized on issuance is amortized to other income on the ~~Partnership’s~~Company’s consolidated statements of income over the term of the guarantee. If it becomes probable that the ~~Partnership~~Company will have to perform under a guarantee, the ~~Partnership~~Company will recognize an additional liability if the amount of the loss can be reasonably estimated.


2.	~~Accounting Pronouncements~~

~~In May 2014, the FASB issued~~ 2.Accounting ~~Standards Update 2014-09,~~ ~~Revenue from Contracts with Customers, (or~~ ~~ASU 2014-09~~). ASU 2014-09 requires an entity to recognize revenue when it transfers promised goods or services to customers at 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 as each performance obligation is satisfied. ASU 2014-09 became effective for the Partnership as of January 1, 2018, and may be applied, at the Partnership’s option, retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. The Partnership adopted ASU 2014-09 as a cumulative-effect adjustment as of such date. The Partnership has elected to apply ASC 2014-09 only to those contracts that were not completed as of January 1, 2018. The Partnership has identified the following differences on adoption of ASU 2014-09:Pronouncements

In certain cases, the Partnership incurs pre-operational costs relating directly to a specific customer contract, that generate or enhance resources of the Partnership that will be used in satisfying performance obligations in the future, whereby such costs are expected to be recovered via the customer contract. Such costs are deferred and amortized over the duration of the customer contract. The Partnership previously expensed such costs as incurred unless the costs were directly reimbursable by the contract. This change increased net income by $1.1 million for the year ended December 31, 2018, and increased other assets by $3.5 million, investments in equity-accounted joint ventures by $0.3 million, and total equity by $3.8 million as at December 31, 2018. The cumulative increase to opening equity as at January 1, 2018 was $2.7 million.

The Partnership previously presented all accrued revenue as a component of accounts receivable. The Partnership has determined that if the right to such consideration is conditional upon something other than the passage of time, such accrued revenue should be presented

apart from accounts receivable. This had the impact of increasing other current assets and decreasing accounts receivable by $2.3 million at December 31, 2018. There was no cumulative impact to opening equity as at January 1, 2018.

~~In February 2016, FASB issued Accounting Standards Update 2016-02,~~ ~~Leases~~ ~~(or~~ ~~ASU 2016-02~~). ASU 2016-02 establishes a right-of-use model that requires a lessee to record a right of use asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. For lessees, leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. ASU 2016-02 requires lessors to classify leases as a sales-type, direct financing, or operating lease. A lease is a sales-type lease if any one of five criteria are met, each of which indicate that the lease, in effect, transfers control of the underlying asset to the lessee. If none of those five criteria are met, but two additional criteria are both met, indicating that the lessor has transferred substantially all of the risks and benefits of the underlying asset to the lessee and a third party, the lease is a direct financing lease. All leases that are not sales-type leases or direct financing leases are operating leases. ASU 2016-02 is effective January 1, 2019, with early adoption permitted. FASB issued an additional accounting standards update in July 2018 that made further amendments to accounting for leases, including allowing the use of a transition approach whereby a cumulative effect adjustment is made as of the effective date, with no retrospective effect. The Partnership will adopt ASU 2016-02 on January 1, 2019. To determine the cumulative effect adjustment, the Partnership will not reassess lease classification, initial direct costs for any existing leases and whether any expired or existing contracts are or contain leases. The Partnership identified the following differences:

The adoption of ASU 2016-02 will result in a change in the accounting method for the lease portion of the daily charter hire accounted for as operating leases with firm periods of greater than one year for certain of the chartered-in vessels of the Partnership and the Partnership's equity-accounted joint ventures. Under ASU 2016-02, one of the Partnership's in-charter contracts currently accounted for as an operating lease will be treated as a right-of-use asset and a lease liability, which will result in an increase of the Partnership's assets and liabilities. The right-of-use asset and lease liability to be recognized on January 1, 2019 is $22.7 million. In addition, certain equity-accounted joint ventures will recognize a right-of-use asset and a lease liability on the balance sheet for these charters based on the present value of future minimum lease payments, whereas currently no right-of-use asset or lease liability is recognized. This will have the result of increasing the equity-accounted joint venture’s assets and liabilities. The pattern of expense recognition of chartered-in vessels is expected to remain substantially unchanged, unless the right-of-use asset becomes impaired.

The adoption of ASU 2016-02 will result in the Partnership's lease classification assessment being determined when a lease commences instead of when the lease is entered into. The Partnership has entered into charters in prior periods for certain of its vessels currently under construction and which are expected to deliver in 2019. Historically, for charters that were negotiated concurrently with the construction of the related vessels, the fair value of the constructed asset was presumed to be its newbuilding cost and no gain or loss was recognized on commencement of the charter if such charters were classified as direct finance leases. Subsequent to the adoption of ASU 2016-02, the fair value of the vessel will be determined based on information available at the lease commencement date and any difference in the fair value of the ship upon commencement of the charter and its carrying value is recognized as a gain or loss upon commencement of the charter.

The adoption of ASU 2016-02 will result in the recognition of revenue from the reimbursement of scheduled dry-dock expenditures, where such charter contract is accounted for as an operating lease, occurring upon completion of the scheduled dry-dock, instead of ratably over the period between the previous scheduled dry-dock and the next scheduled dry-dock. The cumulative decrease to opening equity as at January 1, 2019 was $3.0 million.

~~In addition, direct financing lease payments received will be presented as an operating cash inflow instead of an investing cash inflow in the consolidated statements of cash flows.~~

~~In August 2016, the FASB issued Accounting Standards Update 2016-15,~~ ~~Statement of Cash Flows: Classification of Certain Cash Receipts~~

~~and Cash Payments~~ ~~(or~~ ~~ASU 2016-15~~), which, among other things, provides guidance on two acceptable approaches of classifying distributions received from equity-method investees in the statements of cash flows and application of the predominance principle on the cash flow statement classification of cash receipts and payments that have aspects of more than one class of cash flows. ASU 2016-15 became effective for the Partnership as of January 1, 2018, with a retrospective approach required on adoption. The Partnership has elected to classify distributions received from equity method investees in the consolidated statements of cash flows based on the nature of the distribution. In addition, the adoption of ASU 2016-15 resulted in $25.7 million and $17.7 million of cross currency swap payments that were related to the principal repayment of long-term debt for the years ended December 31, 2017 and December 31, 2016, respectively, being reclassified from unrealized foreign currency exchange (gain) loss including the effect of the termination of cross currency swaps in net operating cash flow, to scheduled repayments of long-term debt and settlement of related swaps in net financing cash flow for the year ended December 31, 2017 and to prepayments of long-term debt and settlement of related swaps for the year ended December 31, 2016 as the amounts related to the termination of final settlement of the cross currency swaps.

~~In November 2016, the FASB issued Accounting Standards Update 2016-18,~~ ~~Statement of Cash Flows: Restricted Cash~~ (~~or ASU 2016-18~~).

ASU 2016-18 requires that the statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Entities are also required to reconcile such total to amounts on the balance sheet and disclose the nature of the restrictions. ASU 2016-18 became effective for the Partnership as of January 1, 2018. Adoption of ASU 2016-18 resulted in the Partnership including in the consolidated statement of cash flows changes in cash, cash equivalents and restricted cash.

~~In August 2017, the FASB issued Accounting Standards Update 2017-12,~~ ~~Derivatives and Hedging~~ - ~~Targeted Improvements to Accounting~~

~~for Hedging Activities~~ (~~or ASU 2017-12~~). ASU 2017-12 eliminates the requirement to separately measure and report hedge ineffectiveness and generally requires, for qualifying hedges, the entire change in the fair value of a hedging instrument to be presented in the same income

statement line as the hedged item. The guidance also modifies the accounting for components excluded from the assessment of hedge effectiveness, eases documentation and assessment requirements and modifies certain disclosure requirements. ASU 2017-12 became effective for the Partnership as of January 1, 2019. The Partnership is currently evaluating the effect of adopting this new guidance.

In June 2016, the FASB issued ~~Accounting Standards Update 2016-13,~~ ~~Financial Instruments - Credit Losses: Measurement of Credit Losses~~

~~on Financial Instruments~~ (or ASU ~~2016-13~~).2016-13. ASU 2016-13 ~~replaces~~introduced a new credit loss methodology, which requires earlier recognition of potential credit losses, while also providing additional transparency about credit risk. This new credit loss methodology utilizes a lifetime “expected credit loss” measurement objective for the ~~incurred loss impairment methodology with a methodology that reflects~~recognition of credit losses for loans, held-to-maturity debt securities and other receivables at the time the financial asset is originated or acquired. The expected credit losses ~~and requires consideration~~are subsequently adjusted each period for changes in expected lifetime credit losses. This methodology replaced multiple existing impairment methods under previous GAAP for these types of assets, which generally required that a ~~broader range of reasonable and supportable information to inform credit~~ loss ~~estimates. This~~be incurred before it was recognized.

The Company adopted this update ~~is effective for the Partnership~~on January 1, 2020 with a modified-retrospective approach, ~~required~~whereby a cumulative-effect adjustment was made to reduce partner's equity on ~~adoption.~~January 1, 2020 without any retroactive application to prior periods. The ~~Partnership is currently evaluating~~Company's net investments in direct financing and sales-type leases, advances to equity-accounted joint ventures, guarantees of indebtedness of equity-accounted joint ventures, contracts assets and other receivables, and receivables related to non-operating lease revenue arrangements are subject to ASU 2016-13. On adoption, the ~~effect of adopting this new guidance.~~

~~In October 2017, the FASB issued Accounting Standards Update 2017-04,~~ ~~Simplifying the Test for Goodwill Impairment~~ (~~or ASU 2017-04~~). ~~Pursuant to this update, goodwill impairment is now measured as the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed~~Company decreased the carrying value of ~~goodwill. This~~partners' equity by $51.9 million, investments in and advances to equity-accounted joint ventures by $40.0 million, net investments in direct financing and sales-type leases by $15.1 million and non-controlling interest by $3.2 million, and increased its other assets and other long-term liabilities by $1.4 million and $1.4 million, respectively. The cumulative adjustment recorded on initial adoption of this update ~~eliminates~~does not reflect an increase in credit risk exposure to the Company compared to previous ~~guidance that required an entity to determine goodwill impairment by calculating~~periods presented.

In December 2019, the ~~implied fair value of goodwill by hypothetically assigning~~FASB issued ASU 2019-12 - Income Taxes (Topic 740) Simplifying the ~~fair value of a reporting unit to all~~Accounting for Income Taxes (or ASU 2019-12), as part of its ~~assets~~initiative to reduce complexity in the accounting standards. The amendments in ASU 2019-12 eliminate certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences, among other changes. The Company adopted this update on January 1, 2021. The adoption did not have an impact on the Company's consolidated financial statements and related disclosures.

In March 2020, the FASB issued ASU 2020-04 - Reference Rate Reform (Topic 848) Facilitation of the Effects of Reference Rate Reform on Financial Reporting (or ASU 2020-04). This ASU provides optional guidance for a limited period of time to ease potential accounting impacts associated with transitioning away from reference rates that are expected to be discontinued, such as ifthe London Interbank Offered Rate (or LIBOR). This ASU applies only to contracts, hedging relationships, and other transactions that ~~reporting unit had been acquired in a business combination.~~reference LIBOR or another reference rate expected to be discontinued. This ASU ~~2017-04 requires a prospective adoption approach and~~ is effective ~~for annual and interim periods beginning after~~through December ~~15, 2019, with early~~31, 2022. The Company does not expect that adoption ~~permitted.~~of ASU ~~2017-04 was adopted by the Partnership on October 1, 2018, and such adoption did not~~2020-04 will have a material impact on the ~~Partnership's consolidated financial statements and related disclosures.~~Company.

In ~~August 2018,~~July 2021, the FASB issued ~~Accounting Standards Update 2018-15,~~ ~~Intangibles-Goodwill~~ASU 2021-05 - Leases (Topic 842) Lessors — Certain Leases with Variable Lease Payments (or ASU 2021-05). Pursuant to ASU 2021-05, lessors should classify and ~~Other-Internal Use Software: Customer’s Accounting~~account for ~~Implementation Costs Incurred in~~ a ~~Cloud Computing Arrangement~~lease with variable lease payments that isdo not depend on a ~~Service Contract, (or~~ reference index or a rate as an operating lease if, without reference to ASU ~~2018-15~~).2012-05, the lease would have been classified as a sales-type lease or a direct financing lease and a day-one loss would have been recognized. On January 1, 2022, the Company adopted ASU ~~2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement~~2021-05 prospectively to leases that ~~is a service contract with the requirements for capitalizing implementation costs incurred to develop~~commence or ~~obtain internal-use software.~~are modified on or after January 1, 2022. The Company does not expect that adoption of ASU ~~2018-15 is effective for annual and interim periods beginning~~2021-05 will impact its accounting of leases that commence or are modified on or after ~~December 15, 2019, with early adoption permitted. The Partnership elected to adopt ASU 2018-15 on October~~January 1, ~~2018, and such adoption did not have a material impact on the Partnership’s consolidated financial statements and related disclosures.~~2022.


3.	~~Financial Instruments~~

3.Fair Value Measurements and Financial Instruments

a) 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 and restricted cash – The fair value of the ~~Partnership’s~~Company’s cash and cash equivalents and restricted cash approximates its carrying amounts reported in the consolidated balance sheets.

Interest rate ~~swap/swaption~~swap agreements and cross currency swap agreements– The fair value of these derivative instruments of the ~~Partnership~~Company is the estimated amount that the ~~Partnership~~Company would receive or pay to terminate the agreements at the reporting date, taking into account current interest rates, foreign exchange rates and the current credit worthiness of both the ~~Partnership~~Company and the derivative counterparties. The estimated amount is the present value of future cash flows. The ~~Partnership~~Company transacts all of these derivative instruments through investment-grade rated financial institutions at the time of the transaction. The ~~Partnership's~~Company's interest rate swap agreements do not require the ~~Partnership~~Company to provide cash collateral to these institutions; however, cash collateral may be required by certain institutions on some of the ~~Partnership's~~Company's cross currency swap agreements and as at December 31, ~~2018,~~2021, the ~~Partnership~~Company had pledged ~~$6.8~~$2.9 million cash as collateral (December 31, ~~2017~~2020 – ~~$22.3~~$3.8 million), which has been recorded as restricted cash – current and long-term on the ~~Partnership's~~Company's consolidated balance sheets. Given the current volatility in the credit markets, it is reasonably possible that the amount recorded as a derivative asset or liability could vary by a material amount in the near term. Minor changes to

F-14

~~Other derivative~~ ~~– The Partnership’s other derivative agreement is between Teekay Corporation~~SEAPEAK LLC (FORMERLY TEEKAY LNG PARTNERS L.P.) AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in thousands of U.S. Dollars, except unit and per unit data and foreign currency exchange rates or unless otherwise indicated)

the ~~Partnership~~forward interest curves and ~~relates~~forward foreign exchange rates used as inputs to ~~hire payments under~~ the ~~time-charter contract for~~valuations may have a significant effect on the ~~Suezmax tanker~~ ~~Toledo Spirit~~ ~~(see Note 12d). The~~ fair value of ~~this~~these derivative agreement is the estimated amount that the Partnership would receive or pay to terminate the agreement at the reporting date, based on the present value of the Partnership’s projection of future spot market tanker rates, which have been derived from current spot market tanker rates and long-term historical average rates. As projections of future spot rates are specific to the Partnership, these are considered Level 3 inputs for the purposes of estimating the fair value.instruments.

~~Long-term receivable included in accounts receivable and other assets~~ – The fair value of the Partnership’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 – The fair values of the ~~Partnership’s~~Company’s fixed-rate and variable-rate long-term debt are either based on quoted market prices or estimated by the Company 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 ~~Partnership.~~Company.

Long-term obligations related to ~~capital~~finance leases – The fair values of the ~~Partnership's~~Company's long-term obligations related to ~~capital~~finance leases are estimated by the Company using discounted cash flow analyses, based on rates currently available for debt with similar terms and remaining ~~maturities.~~maturities and the current credit worthiness of the Company.

The ~~Partnership~~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 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.~~

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 ~~Partnership’s~~Company’s financial instruments that are not accounted for at a fair value on a recurring basis.


		December 31, 2021		December 31, 2020
	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 and restricted cash (note 15a)	Level 1	142,057	142,057	257,943	257,943
Derivative instruments (note 13)
Interest rate swap agreements – assets	Level 2	3,896	3,896	—	—
Interest rate swap agreements – liabilities	Level 2	(26,802)	(26,802)	(75,468)	(75,468)



Cross currency swap agreements – assets	Level 2	4,201	4,201	—	—
Cross currency swap agreements – liabilities	Level 2	(14,654)	(14,654)	(20,022)	(20,022)

Non-recurring:
Vessel held for sale (note 19a)	Level 2	9,813	9,813	—	—
Equity-accounted joint ventures (note 7a)	Level 2	10,418	10,418	—	—
Vessels and equipment (note 19a)	Level 2	—	—	40,717	40,717

Other:
Loans to equity-accounted joint ventures (note 7)	(i)	105,641	(i)	116,632	(i)

Long-term debt – public (note 10)	Level 1	(317,860)	(325,873)	(352,260)	(359,581)
Long-term debt – non-public (note 10)	Level 2	(1,061,782)	(1,093,400)	(1,119,953)	(1,137,050)
Obligations related to finance leases (note 5a)	Level 2	(1,268,990)	(1,332,044)	(1,340,922)	(1,456,927)

(i)The advances to equity-accounted joint ventures together with the Company’s equity investments in the joint ventures form the net aggregate carrying value of the Company’s interests in the joint ventures in these consolidated financial statements. The fair values of the individual components of such aggregate interests are not determinable.

b) Credit Losses

The Company's exposure to potential credit losses under ASC 326 includes its 3 direct financing leases, 2 of its loans to equity-accounted joint ventures and its guarantees of its proportionate share of secured loan facilities and finance leases of 5 of its equity-accounted joint ventures. In addition, the Company's exposure to potential credit losses within its equity-accounted joint ventures under ASC 326 primarily includes direct financing and sales-types leases for 18 LNG carriers within its 50/50 joint venture with China LNG Shipping (Holdings) Limited (or China LNG) (or the Yamal LNG Joint Venture); its joint venture with China LNG, CETS Investment Management (HK) Co. Ltd. and BW Investments Pte. Ltd (or the Pan Union Joint Venture); its 40% ownership interest in Teekay Nakilat (III) Corporation (or the RasGas III Joint Venture); its 33% ownership interest in a joint venture with NYK Energy Transport (or NYK) and Mitsui & Co. Ltd. (or the Angola Joint Venture); and 1 floating storage unit (or FSU) and an LNG regasification terminal joint venture within Bahrain LNG W.L.L (or the Bahrain LNG Joint Venture) (see Note 7a).

F-15

SEAPEAK LLC (FORMERLY TEEKAY LNG PARTNERS L.P.) AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in thousands of U.S. Dollars, except unit and per unit data and foreign currency exchange rates or unless otherwise indicated)

December 31, 2018 December 31, 2017
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 and restricted cash Level 1 222,864
222,864
339,435
339,435
   Derivative instruments (note 13)

      Interest rate swap agreements – assets Level 2 3,341
3,341
878
878
      Interest rate swap agreements – liabilities Level 2 (40,958 ) (40,958 ) (73,984 ) (73,984 )
      Cross currency swap agreements – assets Level 2 —
—
3,758
3,758
      Cross currency swap agreements – liabilities Level 2 (29,122 ) (29,122 ) (54,217 ) (54,217 )
      Other derivative Level 3 1,061
1,061
1,648
1,648
Non-recurring:
   Vessels held for sale (notes 19c and 19d)
Level 2 —
—
16,671
16,671
Other:
Advances to equity-accounted joint ventures, current and long-term (note 7)

⁽ⁱ⁾
131,386

⁽ⁱ⁾

131,685

⁽ⁱ⁾

Long-term receivable included in accounts receivable and other assets ⁽ⁱⁱ⁾
Level 3 175
174
3,476
3,459
Long-term debt – public (note 10)
Level 1 (350,813 ) (361,095 ) (376,581 ) (384,820 )
Long-term debt – non-public (note 10)
Level 2 (1,618,963 ) (1,604,106 ) (1,421,411 ) (1,391,524 )
Obligations related to capital leases (note 5)
Level 2 (1,298,556 ) (1,274,693 ) (1,011,549 ) (1,001,588 )


~~(i)~~	The advances to equity-accounted joint ventures together with the Partnership’s equity investments in the joint ventures form the net aggregate carrying value of the Partnership’s interests in the joint ventures in these consolidated financial statements. The fair values of the individual components of such aggregate interests are not determinable.

~~(ii)~~

~~As at December 31, 2018, the estimated fair value of the non-interest bearing receivable is based on the remaining future fixed payments of $0.2 million, to be received from Royal Dutch Shell Plc (or~~ ~~Shell~~) (formerly BG International Limited) as part of the ship construction support agreement, and using an estimated discount rate of 8.0%. As there is no market rate for the equivalent of an unsecured non-interest bearing receivable from Shell, the discount rate is based on unsecured debt instruments of similar maturity held, adjusted for a liquidity premium. A higher or lower discount rate would result in a lower or higher fair value asset.

The following table includes the amortized cost basis of the Company’s direct interests in financing receivables and net investment in direct financing leases by class of financing receivables and by period of origination and their associated credit quality.


	Amortized Cost Basis by Origination Year
	Credit Quality Grade (1)	2018	2016 and prior	Total
As at December 31, 2021		$	$	$
Direct financing leases
Tangguh Hiri and Tangguh Sago	Performing	—	319,799	319,799
Bahrain Spirit	Performing	209,569	—	209,569
		209,569	319,799	529,368
Loans to equity-accounted joint ventures
Exmar LPG Joint Venture	Performing	—	32,266	32,266
Bahrain LNG Joint Venture	Performing	—	73,375	73,375
		—	105,641	105,641
		209,569	425,440	635,009


	Amortized Cost Basis by Origination Year
	Credit Quality Grade (1)	2020	2018	2016 and prior	Total
As at December 31, 2020		$	$	$	$
Direct financing leases
Tangguh Hiri and Tangguh Sago	Performing	—	—	332,308	332,308
Bahrain Spirit	Performing	—	211,939	—	211,939
		—	211,939	332,308	544,247
Loans to equity-accounted joint ventures
Exmar LPG Joint Venture	Performing	—	—	42,266	42,266
Bahrain LNG Joint Venture	Performing	—	—	73,375	73,375
Other	Performing	991	—	—	991
		991	—	115,641	116,632
		991	211,939	447,949	660,879

(1)The Company's credit quality grades are based on internal risk credit ratings whereby a credit quality grade of performing is consistent with a low likelihood of loss. The Company assesses the credit quality of its direct financing leases and loan to the Company's 50/50 LPG-related joint venture with Exmar NV (or Exmar) (or the Exmar LPG Joint Venture) on whether there are no past due payments (30 days late), no concessions granted to the counterparties and whether the Company is aware of any other information that would indicate that there is a material increase of likelihood of loss. The same policy is applied by the equity-accounted joint ventures. The Company assesses the credit quality of its loan to the Bahrain LNG Joint Venture based on whether there are any past due payments from the Bahrain LNG Joint Venture’s primary customer, whether the Bahrain LNG Joint Venture has granted any concessions to its primary customer and whether the Company is aware of any other information that would indicate that there is a material increase of likelihood of loss. As at December 31, 2021 and 2020, all direct financing and sales-type leases held by the Company and the Company’s equity-accounted joint ventures had a credit quality grade of performing.

Changes in ~~fair value during~~the Company's allowance for credit losses for the years ended December 31, ~~2018~~2021 and ~~2017~~2020are as follows:


	Direct financing leases (1) $	Direct financing and sales-type leases and other within equity-accounted joint ventures (1) $	Loans to equity-accounted joint ventures (2) $	Guarantees of debt (3) $	Total $

As at January 1, 2020	15,055	36,292	3,714	2,139	57,200
Provision for (reversal of) potential credit losses	15,122	18,645	1,012	(59)	34,720
As at December 31, 2020	30,177	54,937	4,726	2,080	91,920
Provision for (reversal of) potential credit losses	3,823	3,363	(626)	(380)	6,180
As at December 31, 2021	34,000	58,300	4,100	1,700	98,100

(1)The credit loss provision related to the lease receivable component of the net investment in direct financing and sales-type leases is based on an internal historical loss rate, as adjusted when asset specific risk characteristics of the existing lease receivables at the reporting date are not consistent

F-16

SEAPEAK LLC (FORMERLY TEEKAY LNG PARTNERS L.P.) AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in thousands of U.S. Dollars, except unit and per unit data and foreign currency exchange rates or unless otherwise indicated)

with those used to measure the internal historical loss rate and as further adjusted when management expects current conditions and reasonable and supportable forecasts to differ from the conditions that existed to measure the internal historical loss rate. During the years ended December 31, 2021 and 2020, 2 LNG project counterparties maintained investment grade credit ratings. As such, the internal historical loss rate used to determine the credit loss provision at January 1, 2020, December 31, 2020 and December 31, 2021 was adjusted downwards to reflect a lower risk profile for these 2 LNG projects at such dates compared to the average LNG project used to determine the internal historical loss rate. In addition, the internal historical loss rate was adjusted upwards for (a) 1 LNG project to reflect a lower credit rating for the ~~Partnership’s~~counterparty, including consideration of the critical infrastructure nature of LNG production, and (b) a second LNG project to reflect a larger potential risk of loss upon potential default as the vessels servicing this project have fewer opportunities for redeployment compared to the Company’s other ~~derivative asset,~~LNG carriers. The credit loss provision for the ~~Toledo Spirit~~ ~~time-charter derivative, which~~residual value component is ~~described below and is measured at fair value~~based on a ~~recurring basis using significant unobservable inputs (Level 3), are as follows:~~

Year Ended
December 31,
2018
$ Year Ended
December 31,
2017
$
Fair value at beginning of year 1,648
2,134
Realized and unrealized gains included in earnings 550
788
Settlements (1,137 ) (1,274 )
Fair value at end of year 1,061
1,648

~~The Partnership’s Suezmax tanker~~reversion methodology whereby the ~~Toledo Spirit~~ operates pursuant to a time-charter contract that increases or decreases the otherwise fixed-hire rate established in the charter depending on the spot charter rates that the Partnership would have earned had it traded the vessel in the spot tanker market. The time-charter contract ended in January 2019 upon the charterer, which was also the owner, selling the vessel (see Note 20a). In order to reduce the variability of its revenue under the ~~Toledo Spirit~~ ~~time-charter, the Partnership entered into an agreement with Teekay Corporation under which Teekay Corporation paid the Partnership any amounts payable to the charterer of the~~ ~~Toledo Spirit~~ ~~as a result of spot rates being below the fixed rate, and the Partnership paid Teekay Corporation any amounts payable to the Partnership by the~~

~~charterer of the~~ ~~Toledo Spirit~~ ~~as a result of spot rates being in excess of the fixed rate. The~~current estimated fair value of ~~this other derivative was based in part upon~~ the ~~Partnership’s projection of future spot market tanker rates, which was derived from current spot market tanker rates and long-term historical average rates~~vessel as well as an estimated discount rate. The estimated fair value of this other derivative as of December 31, 2018 was based upon an average daily tanker rate of $24,000 (December 31, 2017 – $17,500) overdepreciated to the ~~remaining duration~~end of the charter contract is compared to the expected carrying value, with such potential gain or loss on maturity being included in the credit loss provision in increasing magnitude on a straight-line basis the closer the contract is to its maturity. Risks related to the net investments in direct financing and sales-type leases consist of risks related to the underlying LNG projects and demand for LNG carriers at the end of the time-charter contracts.

The change in credit loss provision of $3.8 million for the Company's consolidated vessels for the year ended December 31, 2021 (2020 - $15.1 million) was included in other expense in the Company's consolidated statements of income. The change in credit loss provision for the year ended December 31, 2021 primarily reflects a decline in the estimated charter-free valuations for certain types of its LNG carriers at the end of their time-charter contract which are accounted for as direct financing leases. These estimated future charter-free values are subject to change based on the underlying LNG shipping market fundamentals.

The change in credit loss provision of $3.4 million for the year ended ~~January 2019,~~December 31, 2021 (2020 - $18.6 million) relating to the direct financing and sales-type leases and other within the Company's equity-accounted joint ventures was included in equity income in the Company's consolidated statements of income. The change in credit loss provision for the year ended December 31, 2021 primarily reflects a ~~discount~~decline in the estimated charter-free valuations for certain types of LNG carriers at the end of their time-charter contract which are accounted for as direct financing and sales-type leases.

The changes in the credit loss provision for the Company's consolidated vessels and the vessels within the Company's equity-accounted joint ventures for the year ended December 31, 2021 do not reflect any material change in expectations of the charterers' ability to make their time-charter hire payments as they come due compared to the beginning of the year.

(2)The determination of the credit loss provision for such loans is based on their expected duration and on an internal historical loss rate of ~~9.5% (December 31, 2017 – 8.7%). In developing~~the Company and ~~evaluating this estimate,~~its affiliates, as adjusted when asset specific risk characteristics of the ~~Partnership considered~~existing loans at the reporting date are not consistent with those used to measure the internal historical loss rate and as further adjusted when management expects current ~~tanker~~conditions and reasonable and supportable forecasts to differ from the conditions that existed to measure the internal historical loss rate. These 2 loans rank behind secured debt in each equity-accounted joint venture. As such, they are similar to equity in terms of risk. The Exmar LPG Joint Venture owns and charters-in LPG carriers with a primary focus on mid-size gas carriers. Their vessels trade on the spot market ~~fundamentals~~or short-term charters. Adverse changes in the spot market for mid-size LPG carriers, as well as operating costs for such vessels, may impact the ability of the Exmar LPG Joint Venture to repay its loan to the Company. The Bahrain LNG Joint Venture owns an LNG receiving and regasification terminal in Bahrain. The ability of Bahrain LNG Joint Venture to repay its loan to the Company is primarily dependent upon the Bahrain LNG Joint Venture’s customer, a company owned by the Kingdom of Bahrain, fulfilling its obligations under the 20-year agreement, as well as the ~~short~~Bahrain LNG Joint Venture’s ability to operate the terminal in accordance with the agreed upon operating criteria.

(3)The determination of the credit loss provision for such guarantees was based on a probability of default and ~~long-term outlook~~loss given default methodology. In determining the overall estimated loss from default as a percentage of the outstanding guaranteed share of secured loan facilities and finance leases, the Company considers current and future operational performance of the vessels securing the loan facilities and finance leases and current and future expectations of the proceeds that could be received from the sale of the vessels securing the loan facilities and finance leases in comparison to the outstanding principal amount of the loan facilities and finance leases if the Company was required to fulfill its obligations under the guarantees. See Note 7d relating to the guarantees the Company provides for its equity-accounted joint ventures.

4.Segment Reporting

As at that time. A higher or lower average daily tanker rate would result in a higher or lower fair value liability or a lower or higher fair value asset. A higher or lower discount rate would result in a lower or higher fair value asset or liability.


4.	~~Segment Reporting~~

~~Prior to 2018,~~December 31, 2021 and 2020, the ~~Partnership reported its financial results on~~Company has 2 reportable segments, the ~~basis of two business segments: a liquefied gas~~LNG segment and ~~a conventional tanker segment. During 2018,~~ the Partnership’s Teekay Multi-Gas Pool commenced operations. As part of this initiative, the Partnership completed an internal reorganization and revised its reportable segments, as such changes resulted in management viewing the gas fleet and its components differently. As a result, the Partnership’s LPG and multi-gas carriers are reported in a separate segment apart from its LNG carriers. All segment information for comparative periods has been retroactively adjusted to conform with the change in segment presentation adopted in 2018.

~~The Partnership has three reportable segments, its LNG segment, LPG segment and its conventional tanker~~ segment. The ~~Partnership’s~~Company’s LNG segment consists of LNG carriers which generally operate under long-term, fixed-rate charters to international energy companies. The ~~Partnership's~~Company's LPG segment consists of LPG and multi-gas carriers which generally operate under voyage charters or time-charters. As at December 31, ~~2018,~~2021, the ~~Partnership’s~~Company’s LNG segment consisted of 4947 LNG carriers ~~and LNG carrier newbuildings~~ (including 25 LNG carriers ~~and LNG carrier newbuildings~~ included in joint ventures that are accounted for under the equity method). and 1 LNG receiving and regasification terminal in Bahrain. As at December 31, ~~2018,~~2021, the ~~Partnership's~~Company's LPG segment consisted of 2928 LPG/multi-gas carriers ~~and LPG carrier newbuildings~~ (including 2221 LPG carriers included in a joint venture that is accounted for under the equity method). As at December 31, ~~2018,~~2019, the ~~Partnership’s~~Company had the following reportable segments: the LNG segment, the LPG segment and the conventional tanker ~~segment consisted of one Suezmax-class crude oil~~segment. The Company sold its 2 remaining conventional tankers, the Toledo Spirit and ~~one Handymax product tanker.~~the Alexander Spirit, in January and October 2019, respectively. 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 ~~Partnership’s~~Company’s consolidated financial statements.

The following table presents voyage revenues and percentage of consolidated voyage revenues for the ~~Partnership’s~~Company’s customers who accounted for 10% or more of the ~~Partnership's~~Company's consolidated voyage revenues during any of the periods presented.

(U.S. Dollars in millions)

Year Ended
December 31, ~~2018~~2021

Year Ended
December 31, ~~2017~~2020

Year Ended
December 31, ~~2016~~2019

Royal Dutch Shell Plc. ^{(i) (ii)}

$~~115.4~~136.3 or 23%

$~~53.8~~134.4 or ~~12%~~23%

$~~48.2~~126.9 or ~~12%~~21%

Ras Laffan Liquefied Natural Gas Company Ltd. ⁽ⁱ⁾

$~~70.6~~69.9 or ~~14%~~12%

$71.5 or 12%

$71.1 or 12%

Naturgy Energy Group S.A. (i)

$64.9 or 11%

$65.3 or 11%

$65.6 or 11%

Cheniere Marketing International (i)

Less than 10%

$~~70.3~~61.0 or ~~16%~~

~~$70.3 or 18%~~

~~Cheniere Marketing International~~ ⁽ⁱ⁾

~~$60.1 or 12%~~

~~$60.2 or 14%~~

~~Less than 10%~~

~~The Tangguh Production Sharing Contractors~~ ⁽ⁱ⁾

~~Less than~~ 10%

$~~49.7 or 11%~~

~~$44.4~~60.6 or 11%


~~(i)~~	~~LNG segment.~~


~~(ii)~~	~~Includes its subsidiaries Shell Spain LNG S.A.U. and Shell Tankers (Singapore) Private Ltd.~~

(i)LNG segment.

(ii)Includes its subsidiaries Shell International Trading Middle East Ltd. and Shell Tankers (Singapore) Private Ltd.

F-17

SEAPEAK LLC (FORMERLY TEEKAY LNG PARTNERS L.P.) AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in thousands of U.S. Dollars, except unit and per unit data and foreign currency exchange rates or unless otherwise indicated)

The following tables include results for these segments for the years presented in these consolidated financial statements.


	Year Ended December 31, 2021
	Liquefied Natural Gas Segment $	Liquefied Petroleum Gas Segment $	Total $
Voyage revenues	550,496	47,335	597,831
Voyage expenses	(7,183)	(21,007)	(28,190)
Vessel operating expenses	(105,038)	(19,588)	(124,626)
Time-charter hire expenses	(23,487)	—	(23,487)
Depreciation and amortization	(123,786)	(7,024)	(130,810)
General and administrative expenses(i)	(37,668)	(3,372)	(41,040)
Restructuring charges	(2,958)	(265)	(3,223)
Income (loss) from vessel operations	250,376	(3,921)	246,455

Equity income	100,925	14,474	115,399
Investment in and advances to equity-accounted joint ventures, net	1,015,370	138,504	1,153,874

Expenditures for vessels and equipment	(44,011)	(1,161)	(45,172)
Expenditures for dry docking	(31,808)	(4,252)	(36,060)


	Year Ended December 31, 2020
	Liquefied Natural Gas Segment $	Liquefied Petroleum Gas Segment $	Total $
Voyage revenues	552,416	38,687	591,103
Voyage expenses	(3,009)	(14,385)	(17,394)
Vessel operating expenses	(98,572)	(17,824)	(116,396)
Time-charter hire expenses	(23,564)	—	(23,564)
Depreciation and amortization	(122,523)	(7,229)	(129,752)
General and administrative expenses(i)	(24,879)	(2,025)	(26,904)
Write-down of vessels	—	(51,000)	(51,000)
Income (loss) from vessel operations	279,869	(53,776)	226,093

Equity income (loss)	79,244	(7,011)	72,233
Investment in and advances to equity-accounted joint ventures, net	934,059	133,724	1,067,783
Expenditures for vessels and equipment	(12,382)	(1,093)	(13,475)
Expenditures for dry docking	(4,862)	(2,106)	(6,968)

F-18

SEAPEAK LLC (FORMERLY TEEKAY LNG PARTNERS L.P.) AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in thousands of U.S. Dollars, except unit and per unit data and foreign currency exchange rates or unless otherwise indicated)


	Year Ended December 31, 2018									Year Ended December 31, 2019
	Liquefied Natural Gas Segment $		Liquefied Petroleum Gas Segment $		Conventional Tanker Segment $		Total $			Liquefied Natural Gas Segment $	Liquefied Petroleum Gas Segment $	Conventional Tanker Segment $	Total $
Voyage revenues	454,517		23,922		32,323		510,762		Voyage revenues	555,303	39,211	6,742	601,256
Voyage expenses	(2,750	)	(15,907	)	(9,580	)	(28,237	)	Voyage expenses	(4,493)	(16,563)	(331)	(21,387)
Vessel operating expenses	(82,952	)	(20,932	)	(13,774	)	(117,658	)	Vessel operating expenses	(90,954)	(17,888)	(2,743)	(111,585)
Time-charter hire expense	(7,670	)	—		—		(7,670	)
Time-charter hire expenses									Time-charter hire expenses	(19,994)	—	—	(19,994)
Depreciation and amortization	(111,360	)	(7,748	)	(5,270	)	(124,378	)	Depreciation and amortization	(128,138)	(7,931)	(696)	(136,765)
General and administrative expenses⁽ⁱ⁾	(23,270	)	(2,932	)	(2,310	)	(28,512	)	General and administrative expenses(i)	(20,193)	(1,789)	(539)	(22,521)
Write-down of goodwill and vessels	—		(33,790	)	(20,863	)	(54,653	)
Gain on sales and (write-down) of vessels									Gain on sales and (write-down) of vessels	14,349	—	(785)	13,564
Restructuring charges	—		—		(1,845	)	(1,845	)	Restructuring charges	(400)	—	(2,915)	(3,315)
Income (loss) from vessel operations	226,515		(57,387	)	(21,319	)	147,809		Income (loss) from vessel operations	305,480	(4,960)	(1,267)	299,253

Equity income (loss)	60,228		(6,682	)	—		53,546		Equity income (loss)	59,600	(781)	—	58,819
Investment in and advances to equity-accounted joint ventures	962,236		153,897		—		1,116,133
Total assets at December 31, 2018	4,861,977		326,111		39,450		5,227,538
Expenditures for vessels and equipment	(684,951	)	(1,230	)	(124	)	(686,305	)	Expenditures for vessels and equipment	(101,052)	(1,538)	—	(102,590)
Expenditures for dry docking	(7,505	)	(5,059	)	(15	)	(12,579	)	Expenditures for dry docking	(8,224)	(2,776)	—	(11,000)

(i)Includes direct general and administrative expenses and indirect general and administrative expenses (allocated to each segment based on estimated use of corporate resources (Note 12a)).

Year Ended December 31, 2017
Liquefied Natural Gas
Segment
$ Liquefied Petroleum Gas
Segment
$ Conventional
Tanker
Segment
$ Total
$
Voyage revenues 365,914
19,769
46,993
432,676
Voyage expenses (1,802 ) (1,218 ) (5,182 ) (8,202 )
Vessel operating expenses (80,245 ) (3,083 ) (18,211 ) (101,539 )
Depreciation and amortization (86,592 ) (8,433 ) (10,520 ) (105,545 )
General and administrative expenses⁽ⁱ⁾
(13,223 ) (2,411 ) (2,507 ) (18,141 )
Write-down of vessels —
—
(50,600 ) (50,600 )
Income (loss) from vessel operations 184,052
4,624
(40,027 ) 148,649

Equity income (loss) 17,652
(7,863 ) —
9,789
Investment in and advances to equity-accounted joint ventures 933,970
160,626
—
1,094,596
Total assets at December 31, 2017 4,284,767
364,164
118,827
4,767,758
Expenditures for vessels and equipment (701,116 ) (13,412 ) —
(714,529 )
Expenditures for dry docking (20,047 ) (107 ) (2,130 ) (22,283 )

Year Ended December 31, 2016
Liquefied Natural Gas
Segment
$ Liquefied Petroleum Gas
Segment
$ Conventional
Tanker
Segment
$ Total
$
Voyage revenues 314,591
21,939
59,914
396,444
Voyage expenses (449 ) —
(1,207 ) (1,656 )
Vessel operating expenses (65,371 ) (16 ) (22,503 ) (87,890 )
Depreciation and amortization (72,190 ) (7,894 ) (15,458 ) (95,542 )
General and administrative expenses⁽ⁱ⁾
(13,955 ) (2,055 ) (3,189 ) (19,199 )
Write-down and loss on sales of vessels —
—
(38,976 ) (38,976 )
Income (loss) from vessel operations 162,626
11,974
(21,419 ) 153,181

Equity income 48,633
13,674
—
62,307
Expenditures for vessels and equipment (344,924 ) —
(63 ) (344,987 )
Expenditures for dry docking (13,944 ) —
—
(13,944 )


~~(i)~~	~~Includes direct general and administrative expenses and indirect general and administrative expenses (allocated to each segment based on estimated use of corporate resources (Note 12a)).~~

A reconciliation of total segment assets presented in the Company's consolidated balance sheets is as follows:


	December 31, 2021 $	December 31, 2020 $
Total assets of the liquefied natural gas segment	4,449,598	4,395,336
Total assets of the liquefied petroleum gas segment	252,765	246,982
Unallocated:
Cash and cash equivalents	92,069	206,762
Advances to affiliates	4,153	4,924
Consolidated total assets	4,798,585	4,854,004

5.Chartered-in Vessels

December 31,
2018
$ December 31,
2017
$
Total assets of the liquefied natural gas segment 4,861,977
4,284,767
Total assets of the liquefied petroleum gas segment 326,111
364,164
Total assets of the conventional tanker segment 39,450
118,827
Unallocated:
Cash and cash equivalents 149,014
244,241
Advances to affiliates 8,229
7,300
Consolidated total assets 5,384,781
5,019,299


5.	~~Chartered-in Vessels~~

a) ~~Capital~~Obligations related to Finance Leases


	December 31, 2021 $	December 31, 2020 $
Total obligations related to finance leases	1,268,990	1,340,922
Less current portion	(73,953)	(71,932)
Long-term obligations related to finance leases	1,195,037	1,268,990

December 31,
2018
$ December 31,
2017
$
LNG Carriers 1,274,569
961,711
Suezmax Tanker 23,987
49,838
Total obligations related to capital leases 1,298,556
1,011,549
Less current portion (81,219 ) (106,946 )
Long-term obligations related to capital leases 1,217,337
904,603

~~LNG Carriers.~~As at December 31, ~~2018,~~2021 and 2020, the ~~Partnership~~Company was a party to ~~capital~~finance leases on ~~eight~~9 LNG carriers. These 9 LNG carriers were sold by the ~~Creole Spirit,~~ ~~the~~ ~~Oak Spirit,~~ ~~the~~ ~~Torben Spirit,~~ ~~the~~ ~~Macoma,~~ ~~the~~ ~~Murex,~~ ~~the~~ ~~Magdala,~~ ~~the~~ ~~Myrina~~ ~~andthe~~ ~~Megara. Upon delivery of these eight LNG carriers between February 2016 and July 2018, the Partnership sold these vessels~~Company to third parties (or Lessors) and leased ~~them~~ back under ~~10-year~~7.5 to 15-year bareboat charter contracts ending in 2026 through to ~~2028.~~2034. At inception of these leases, the weighted-average interest rate implicit in these leases was 5.1%. The bareboat charter contracts are ~~accounted for~~presented as obligations related to ~~capital~~finance leases on the Company's consolidated balance sheets and have purchase obligations at the end of the lease terms.

The ~~Partnership~~Company consolidates 7 of the 9 Lessors for financial reporting purposes as VIEs. The Company understands that these vessels and lease operations are the only assets and operations of the Lessors. The ~~Partnership~~Company operates the vessels during the lease term and, as a result, is considered to be, under GAAP, the Lessor's primary ~~beneficiary; therefore, the Partnership consolidates the Lessors~~beneficiary. The sale and leaseback of 2 vessels are accounted for ~~financial reporting purposes~~ as ~~VIEs.~~failed sales. The Company is not considered as holding a variable interest in these buyer Lessor entities and thus, does not consolidate these entities.

The liabilities of the 7 Lessors considered as VIEs are loans and are non-recourse to the ~~Partnership.~~Company. The amounts funded to the 7 Lessors in order to purchase the vessels materially match the funding to be paid by the ~~Partnership's~~Company's subsidiaries under the sale-leaseback ~~transaction.~~transactions. As a result, the amounts

due by the ~~Partnership's~~Company's subsidiaries to the 7 Lessors considered as VIEs have been included in obligations related to ~~capital~~finance leases as representing the Lessors' loans.

F-19

SEAPEAK LLC (FORMERLY TEEKAY LNG PARTNERS L.P.) AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in thousands of U.S. Dollars, except unit and per unit data and foreign currency exchange rates or unless otherwise indicated)

During September 2019, the Company refinanced the Torben Spirit by acquiring the Torben Spirit from its original Lessor and then selling the vessel to another Lessor and leasing it back for a period of 7.5 years. The Company is required to purchase the vessel at the end of the lease term. As a result of this refinancing transaction, the Company recognized a loss of $1.4 million for the year ended December 31, 2019 on the extinguishment of the original finance lease which was included in other expense in the Company's consolidated statements of income.

The obligations of the ~~Partnership~~Company under the bareboat charter contracts for the 9 LNG carriers are guaranteed by the ~~Partnership.~~Company. In addition, the guarantee agreements require the ~~Partnership~~Company to maintain minimum levels of tangible net worth and aggregate liquidity, and not to exceed a maximum amount of leverage. As at December 31, ~~2018,~~2021, the ~~Partnership~~Company was in compliance with all covenants in respect of the obligations related to its ~~capital~~finance leases.

As at December 31, ~~2018,~~2021, the remaining commitments related to the ~~eight capital leases for the Partnership's~~financial liabilities of these 9 LNG carriers, including the amounts to be paid for the related purchase obligations, approximated ~~$1.7~~$1.6 billion including imputed interest of ~~$435.3~~$333.8 million repayable ~~from 2019~~ through ~~2028,~~2034, as indicated below:


Year	Commitments as at December 31, 2021


2022	$	136,959
2023	$	135,459
2024	$	132,011
2025	$	129,725
2026	$	305,457
Thereafter	$	763,184

Year Commitment
2019 $ 119,517
2020 $ 118,685
2021 $ 117,772
2022 $ 116,978
2023 $ 116,338
Thereafter $ 1,120,670

~~Suezmax Tanker.~~ ~~As at December 31, 2018, the Partnership was a party, as lessee, to a capital lease on one Suezmax tanker, the~~ ~~Toledo Spirit~~. Under this capital lease, the owner had the option to require the Partnership to purchase the vessel. The charterer, who is also the owner, also had the option to cancel the charter contract and the cancellation option was first exercisable in August 2018. In January 2019, the charterer of the ~~Toledo Spirit~~ ~~sold the vessel and the capital lease was terminated.~~

As at December 31, 2018, the remaining commitments related to the one capital lease for the Suezmax tanker, including the related purchase obligations, approximated $24.2 million including imputed interest of $0.2 million, repayable in 2019. Upon sale of the vessel in January 2019, the Partnership returned the vessel to the owner and the full amount of the associated obligation related to the capital lease was concurrently extinguished.

~~The Partnership’s capital lease relating to its Suezmax tanker does not contain financial or restrictive covenants other than those relating to operation and maintenance of the vessels.~~

b) Operating Leases

The ~~minimum estimated charter hire payments for the following two fiscal years, as at December 31, 2018, for the Partnership's chartered-in vessel accounted for as an operating lease were as follows:~~

2019 2020
Vessel Charters $ $
Charters-in – operating leases ⁽ⁱ⁾
23,725 16,055

~~(i) As at December 31, 2018, the Partnership was chartering in~~Company has chartered a vessel ~~at a fixed-rate~~ from its 52%~~-owned~~ owned LNG-related joint venture with Marubeni Corporation (or the ~~Teekay LNG-Marubeni~~MALT Joint Venture) on a time-charter-in contract, whereby the MALT Joint Venture provides use of the vessel to the Company and operates the vessel for ~~a period~~the Company.

Under its time-charter-in contract with the MALT Joint Venture commencing in September 2018, which had an original term of two years ~~until September 2020.~~and was further extended by 21 months to June 2022, the Company incurred time-charter hire expenses for the year ended December 31, 2021 of $23.5 million (2020 – $23.6 million, 2019 – $20.0 million), of which $14.5 million (2020 – $14.6 million, 2019 – $12.4 million) was allocable to the lease component and $9.0 million (2020 – $9.0 million, 2019 – $7.6 million) was allocable to the non-lease component. The ~~Partnership recognizes~~lease component approximates the ~~expense from this charter on a straight-line basis over~~cash paid for the ~~firm period of the charter~~amounts included in operating lease liabilities and is ~~presented~~reflected as ~~time-charter hire expense~~a reduction in operating cash flows for the ~~Partnership's consolidated statements of income.~~

~~c) Teekay Tangguh Joint Venture Operating Leases~~

years ended December 31, 2021, 2020 and 2019. As at December 31, ~~2018,~~2021, the ~~Teekay BLT Corporation (or~~remaining lease term and discount rate for the ~~Teekay Tangguh Joint Venture~~)time-charter-in contract were 0.5 years and 4.6%, ~~of which the Partnership has a 69% ownership interest and consolidates, was a party to operating leases (or~~ ~~Head Leases) whereby it leases its two LNG carriers (or the~~ ~~Tangguh LNG Carriers) to a third-party company. The Teekay Tangguh Joint Venture then leases 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 commencementrespectively.

A maturity analysis of the ~~leases. If an assumption proves to be incorrect,~~Company’s operating lease liabilities from its time-charter-in contract with the ~~lease payments are increased or decreased under the Sublease to maintain the agreed after-tax margin. The Teekay Tangguh~~MALT Joint ~~Venture’s carrying amounts of this estimated tax indemnification guarantee~~Venture as at December 31, ~~2018 and 2017 were $6.6 million and $7.1 million, respectively, and are included as part of other long-term liabilities in the consolidated balance sheets of the Partnership. The tax indemnification~~2021 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 Leases and the Subleases for the two Tangguh LNG Carriers commenced in November 2008 and March 2009.

~~As at December 31, 2018, the total estimated future minimum rental payments to be received and paid by the Teekay Tangguh Joint Venture related to the lease contracts are~~ as follows:


	Lease Commitment	Non-Lease Commitment	Total Commitment
Year	$	$	$
Payments:
2022	6,832	4,218	11,050
Less imputed interest	(85)
Carrying value of current portion of operating lease liabilities	6,747

Year
Head Lease Receipts ⁽ⁱ⁾

Sublease Payments ^{(i) (ii)}
2019 $ 21,242
$ 23,875
2020 $ 21,242
$ 23,875
2021 $ 21,242
$ 23,875
2022 $ 21,242
$ 23,875
2023 $ 21,242
$ 23,875
Thereafter $ 111,611
$ 125,485
Total $ 217,821
$ 244,860

~~(i)~~

The Head Leases are fixed-rate operating leases while the Subleases have a variable-rate component. As at December 31, 2018, the Partnership had received $292.6 million of aggregate Head Lease receipts and had paid $236.3 million of aggregate Sublease payments. The portion of the Head Lease receipts that has not been recognized into earnings is deferred and amortized on a straight-line basis over the lease terms and, as at December 31, 2018, $3.7 million (December 31, 2017 – ~~$3.7 million) and $29.3 million (December 31, 2017~~ – ~~$33.0 million) of Head Lease receipts had been deferred and included in unearned revenue and other long-term liabilities, respectively, in the Partnership’s consolidated balance sheets.~~


~~(ii)~~	~~The amount of payments related to the Subleases are updated annually to reflect any changes in the lease payments due to changes in tax law.~~

6.Revenue


6.	~~Revenue~~

The ~~Partnership’s~~Company’s primary source of revenue is chartering its vessels to customers. The ~~Partnership~~Company utilizes ~~three~~3 primary forms of contracts, consisting of time-charter contracts, voyage charter contracts and bareboat charter contracts. ~~The Partnership also generates revenue from construction supervision and crew-training for the vessels under construction in its joint venture with China LNG Shipping (Holdings) Limited (or~~ ~~China LNG), CETS Investment Management (HK) Co. Ltd. and BW Investments Pte. Ltd (or the~~ ~~Pan Union Joint Venture~~), in which the Partnership's ownership interests range from 20% to 30%, and from the start-up of an LNG receiving and regasification terminal under construction related to its 30%-owned joint venture with National Oil and Gas Authority 30%), Gulf Investment Corporation (24%), and Samsung C&T (16%) (or the ~~Bahrain LNG Joint Venture). Such services may include the procurement of third party goods and services for the asset’s owner.~~

Time Charters

Pursuant to a time-charter contract, the ~~Partnership~~Company charters a vessel to a customer for a fixed period of time, generally one year or more. The performance obligations of a time-charter contract, which include the lease of the vessel to the charterer as well as the operation of the vessel, are satisfied as services are rendered over the duration of such contract, as measured using the time that has elapsed from commencement of performance. In addition, any expenses unique to a particular voyage, including any fuel expenses, port fees, cargo loading and unloading expenses, canal tolls, agency fees and commissions, are the responsibility of the customer, as long as the vessel is not off-hire. Hire is based on a fixed daily hire amount and is typically invoiced monthly in advance for time-charter contracts. However, certain sources of variability exist, including penalties, such as those that relate to periods the vessels are off-hire and where minimum speed and performance metrics are not met. In addition, certain time-charter contracts contain provisions allowing the ~~Partnership~~Company to be compensated for increases in the ~~Partnership's~~Company's costs during the term of the charter. Such provisions may be in the form of annual hire rate adjustments for changes in inflation indices or interest rates or in the form of cost reimbursements for vessel operating expenditures or dry-docking expenditures. Finally, in a small number of charters, the ~~Partnership~~

F-20

SEAPEAK LLC (FORMERLY TEEKAY LNG PARTNERS L.P.) AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in thousands of U.S. Dollars, except unit and per unit data and foreign currency exchange rates or unless otherwise indicated)

Company may earn a profit share consideration, which occurs when actual spot tanker rates earned by the vessel exceed certain thresholds for a period of time. Variable consideration of the Partnership’s contracts is typically recognized in the period in which the changes in facts and circumstances on which the variable lease payments are based occur as either such revenue is allocated and accounted for under lease accounting requirements or alternatively such consideration is allocated to distinct periods within a contract that such variable consideration was incurred in. The ~~Partnership~~Company does not engage in any specific tactics to minimize residual value risk.

As at December 31, ~~2018,~~2021, a substantial majority of the ~~Partnership’s~~Company’s consolidated vessels operated under time-charter contracts with the ~~Partnership’s~~Company’s customers. Such contracts are scheduled to expire between ~~2019~~2022 and ~~2038.~~2039. Certain of these contracts result in situations whereby the customer will pay consideration up front for performance to be provided at a later date. The time-charter contracts for many of the ~~Partnership's~~Company's LNG carriers have options ~~whereby~~that permit the charterer ~~can~~to extend the contract for periods up to a total extension between three and 15 years. In addition, each of the ~~Partnership's~~Company's time-charter contracts are subject to certain termination and purchase provisions. As at December 31, ~~2018,~~2021, the ~~Partnership~~Company had ~~$26.4~~$22.2 million of advanced payments recognized as contract liabilities ~~included in unearned revenue~~ (December 31, ~~2017~~2020 – ~~$22.2~~$28.4 million) which are expected to be recognized as voyage revenues ~~in 2019~~ and are included in unearned revenue and other long-term liabilities on the ~~Partnership's~~Company's consolidated balance sheets. ~~During~~The Company recognized $26.5 million and $24.9 million of revenue for the ~~year~~years ended December 31, ~~2018, the Partnership recognized $22.2 million of revenue~~2021 and 2020, respectively, that was ~~included in the~~recognized as a contract liability ~~balance on transition.~~at the beginning of those years.

Voyage Charters

Voyage charters are charters for a specific voyage that are usually priced on a current or “spot” market rate. The performance obligations of a voyage charter contract, which typically include the lease of the vessel to the charterer as well as the operation of the vessel, are satisfied as services are rendered over the duration of the voyage, as measured using the time that has elapsed from commencement of performance. In addition, any expenses that are unique to a particular voyage, including any fuel expenses, port fees, cargo loading and unloading expenses, canal tolls, agency fees and commissions, are the responsibility of the vessel owner. The ~~Partnership’s~~Company’s voyage charters will normally contain a lease; however, judgment is necessary to determine this based upon the decision-making rights of the charterer under the contract. Consideration for such contracts is generally fixed, although certain sources of variability exist - for example, delays caused by the charterer result in additional consideration. Payment for the voyage is not due until the voyage is completed. The duration of a single voyage is typically less than three months. The ~~Partnership~~Company does not engage in any specific tactics to minimize residual value risk due to the short-term nature of the contracts.

Bareboat Charters

Pursuant to a bareboat charter, the ~~Partnership~~Company charters a vessel to a customer for a fixed period of time, generally one year or more, at rates that are generally fixed. However, the customer is responsible for operation and maintenance of the vessel with its own crew as well as any expenses that are unique to a particular voyage, including any fuel expenses, port fees, cargo loading and unloading expenses, canal tolls, agency fees and commissions. If the vessel goes off-hire due to a mechanical issue or any other reason, the monthly hire received by the ~~Partnership~~Company is normally not impacted. The performance obligations of a bareboat charter, which include the lease of the vessel to the charterer, are satisfied over the duration of such contract, as measured using the time elapsed from commencement of the lease. Hire is typically invoiced monthly in advance for bareboat charters, based on a fixed daily hire amount.

Revenue Table

The following tables contain the ~~Partnership's~~Company's revenue for the year ended December 31, ~~2018, 2017~~2021, 2020 and ~~2016,~~2019, by contract type and by segment.


	Year Ended December 31, 2021
	Liquefied Natural Gas Segment $	Liquefied Petroleum Gas Segment $	Total $
Time charters	540,379	11,356	551,735
Voyage charters	—	35,979	35,979

Management fees and other income	10,117	—	10,117
	550,496	47,335	597,831


	Year Ended December 31, 2020
	Liquefied Natural Gas Segment $	Liquefied Petroleum Gas Segment $	Total $
Time charters	543,408	—	543,408
Voyage charters	—	38,687	38,687

Management fees and other income	9,008	—	9,008
	552,416	38,687	591,103

F-21

SEAPEAK LLC (FORMERLY TEEKAY LNG PARTNERS L.P.) AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in thousands of U.S. Dollars, except unit and per unit data and foreign currency exchange rates or unless otherwise indicated)


	Year Ended December 31, 2018					Year Ended December 31, 2019
	Liquefied Natural Gas Segment $	Liquefied Petroleum Gas Segment $	Conventional Tanker Segment $	Total $		Liquefied Natural Gas Segment $	Liquefied Petroleum Gas Segment $	Conventional Tanker Segment $	Total $
Time charters	420,262	—	17,405	437,667	Time charters	530,434	2,860	6,742	540,036
Voyage charters	—	23,922	14,591	38,513	Voyage charters	—	36,351	—	36,351
Bareboat charters	23,820	—	—	23,820	Bareboat charters	18,387	—	—	18,387
Management fees and other income	10,435	—	327	10,762	Management fees and other income	6,482	—	—	6,482
	454,517	23,922	32,323	510,762		555,303	39,211	6,742	601,256

Year Ended December 31, 2017

Liquefied
Natural Gas
Segment
$

Liquefied
Petroleum Gas
Segment
$

Conventional
Tanker
Segment
$
Total
$
Time charters 332,751
—
39,171
371,922
Voyage charters —
2,285
6,709
8,994
Bareboat charters 22,574
17,484
—
40,058
Management fees and other income 10,589
—
1,113
11,702
365,914
19,769
46,993
432,676

Year Ended December 31, 2016

Liquefied
Natural Gas
Segment
$

Liquefied
Petroleum Gas
Segment
$

Conventional
Tanker
Segment
$
Total
$
Time charters 283,159
—

58,802

341,961
Bareboat charters 23,824
21,939

—

45,763
Management fees and other income 7,608
—

1,112

8,720
314,591
21,939

59,914

396,444

The following table contains the ~~Partnership’s~~Company’s total revenue ~~from contracts that do not contain a lease element and the non-lease element of time-charter contracts accounted for as direct financing leases~~ for the years ended December 31, ~~2018, 2017~~2021, 2020 and ~~2016.~~

2019, by contracts or components of contracts accounted for as leases and those not accounted for as leases:


					Year Ended December 31, 2021 $	Year Ended December 31, 2020 $	Year Ended December 31, 2019 $
Lease revenue				Lease revenue
Lease revenue from lease payments of operating leases				Lease revenue from lease payments of operating leases	508,932	505,029	516,772
Interest income on lease receivables				Interest income on lease receivables	49,142	50,504	51,676
Variable lease payments – cost reimbursements(1)				Variable lease payments – cost reimbursements(1)	5,755	5,398	4,635
	December 31, 2018 $	December 31, 2017 $	December 31, 2016 $		563,829	560,931	573,083
Non-lease revenue - related to sales type or direct financing leases	18,554	21,228	13,855
Non-lease revenue				Non-lease revenue
Non-lease revenue – related to sales-type or direct financing leases				Non-lease revenue – related to sales-type or direct financing leases	23,885	21,164	21,691
Management fees and other income	10,762	11,702	8,720	Management fees and other income	10,117	9,008	6,482
					34,002	30,172	28,173
Total	29,316	32,930	22,575	Total	597,831	591,103	601,256

SEAPEAK LLC (FORMERLY TEEKAY LNG PARTNERS L.P.) AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in ~~either segment prior to this. The amount~~thousands of ~~the impairment charge was determined using a discounted cash flow valuation approach. The impairment charge is included in write-down of goodwill~~U.S. Dollars, except unit and ~~write-down~~per unit data and loss on sales of vessels in the Partnership's consolidated statements of income. The impairment charge followed a change in the Partnership’s reporting structure, as discussed in Note 4, combined with a reduction in the near-term hire rate outlook for its multi-gas vessels.foreign currency exchange rates or unless otherwise indicated)


9.	~~Accrued Liabilities~~

December 31,
2018
$ December 31,
2017
$
Interest including interest rate swaps 23,083
19,186
Voyage and vessel expenses 34,889
12,476
Payroll and benefits 5,950
3,900
Other general expenses 2,542
3,360
Income and other tax payable 1,864
1,335
Distributions payable on preferred units 6,425
5,500
Total 74,753
45,757


~~10.~~	~~Long-Term Debt~~

December 31, 2018 December 31, 2017
$ $
U.S. Dollar-denominated Revolving Credit Facilities due from 2020 to 2022 225,000
254,275
U.S. Dollar-denominated Term Loans due from 2020 to 2030 1,212,504
935,286
Norwegian Kroner-denominated Bonds due from 2020 to 2023 352,973
377,856
Euro-denominated Term Loans due from 2023 to 2024 193,781
232,957
Other U.S. Dollar-denominated Loans 3,300
10,000
    Total principal 1,987,558
1,810,374
Unamortized discount and debt issuance costs (17,782 ) (12,382 )
    Total debt 1,969,776
1,797,992
Less current portion (135,901 ) (552,404 )
    Long-term debt 1,833,875
1,245,588

As at December 31, ~~2018,~~2021, the ~~Partnership~~Company had ~~two~~2 revolving credit facilities available, ~~both of~~ which ~~credit facilities were long-term. The two credit facilities, as at such date,~~ provided for borrowings of up to ~~$400.6~~$400.4 million (December 31, ~~2017~~2020 – ~~$443.7~~$354.8 million), of which ~~$175.6~~$235.4 million (December 31, ~~2017~~2020 – ~~$189.4~~$254.8 million) was undrawn. Interest payments are based on LIBOR plus a margin, where margins ~~which~~ ranged from 1.40% to 2.25%. The amount available under the ~~two~~2 revolving credit facilities will be reduced by ~~$22.4 million in 2019, $248.4 million in 2020, $24.4 million in 2021 and~~ $105.4 million in ~~2022.~~2022 and $295.0 million in 2023, when the revolving credit facilities mature. The revolving credit facilities may be used by the ~~Partnership~~Company to fund general ~~partnership~~company purposes. ~~One~~NaN of the revolving credit facilities is unsecured, while the other revolving credit facility is collateralized by first-priority mortgages granted on ~~two~~2 of the ~~Partnership’s~~Company’s vessels, together with other related security, and ~~include~~includes a guarantee from ~~two~~2 of the ~~Partnership’s subsidiaries.~~Company's subsidiaries of all outstanding amounts.

As at December 31, ~~2018,~~2021, the ~~Partnership~~Company had ~~seven combined~~6 U.S. Dollar-denominated term loans and bonds outstanding, which totaled ~~$1.2 billion (December 31, 2017 – $935.3 million)~~$791.3 million in aggregate principal ~~amount.~~amount (December 31, 2020 – $873.7 million). Interest payments on the term loans are based on LIBOR plus a margin, ~~which~~where margins ranged from ~~0.30%~~1.85% to 3.25% and fixed interest payments on the bonds ~~are fixed at~~ranging from 4.11% to 4.41%. The ~~seven~~6 combined term loans and bonds require quarterly interest and principal payments and ~~six~~5 have balloon or bullet repayments due at maturity. The term loans and bonds are collateralized by first-priority mortgages on ~~18 of~~ the ~~Partnership’s~~16 Company vessels to which the loans relate, together with certain other related security. In addition, as at December 31, ~~2018,~~2021, all of the outstanding term loans ~~and bonds~~ were guaranteed by either the ~~Partnership~~Company or ~~subsidiaries of~~the ship-owning entities within Teekay Nakilat Corporation (or the ~~Teekay Nakilat~~RasGas II Joint Venture), of which the ~~Partnership~~Company has a 70% ownership interest.

~~The Partnership has~~As at December 31, 2021, the Company had Norwegian ~~Kroner~~Krone (or NOK) 2.9 billion (December 31, 2020 – NOK 3.1 ~~billion~~billion) of senior unsecured bonds ~~issued~~ in the Norwegian bond market that mature through ~~2023.~~2026. As at December 31, ~~2018,~~2021, the total amount of the bonds, which are listed on the Oslo Stock Exchange, was ~~$353.0~~$323.2 million (December 31, ~~2017~~2020 – ~~$377.9~~$355.5 million). The interest payments on the bonds are based on Norwegian Interbank Offered Rate (or NIBOR) plus a margin, ~~which~~where margins ranged from ~~3.70%~~4.60% to ~~6.00%~~5.15%. The ~~Partnership~~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 ~~5.92%~~5.74% to 7.89% and the transfer of principal fixed at ~~$382.5~~$331.0 million upon maturity in exchange for NOK ~~3.1~~2.9 billion (see Note 13).

~~The Partnership has two~~As at December 31, 2021, the Company had 2 Euro-denominated term loans outstanding, which ~~as at December 31, 2018,~~ totaled ~~169.0~~101.5 million Euros ($~~193.8~~115.4 million) (December 31, ~~2017~~2020 – ~~194.1~~125.0 million Euros ($~~233.0~~152.7 million)). Interest payments for 1 of the term loans are based on the Euro Interbank Offered Rate (or EURIBOR) plus a margin. Interest payments on the remaining term loan are based on EURIBOR where EURIBOR is limited to zero or above zero values, plus ~~margins, which margins~~a margin. Margins ranged from 0.60% to 1.95% as at December 31, ~~2018, and the~~2021. The terms loans require monthly and semi-annual interest and principal payments. The term loans have varying maturities through 2024. The term loans are collateralized by first-priority mortgages on ~~two~~2 of the ~~Partnership's~~Company vessels to which the loans relate, together with certain other related security and are guaranteed by the ~~Partnership~~Company and ~~one~~1 of its subsidiaries.

AsThe weighted-average interest rates for the Company’s long-term debt outstanding as at December 31, 2018, the Teekay Nakilat Joint Venture, which the Partnership has a 70% ownership interest, has a $3.3 million loan payable to its 30% non-controlling interest owner. The interest is based on LIBOR plus 1.0%2021, and ~~is payable on demand.~~

~~The weighted-average effective interest rate for the Partnership’s long-term debt outstanding at December 31, 2018~~2020 were 3.22% and ~~December 31, 2017 were 4.44% and 3.34%~~3.04%, respectively. These rates do not reflect the effect of related interest rate swaps that the ~~Partnership~~Company has used to economically hedge certain of its floating-rate debt (see Note 13). ~~At December 31, 2018, the margins on the Partnership’s outstanding revolving credit facilities and term loans ranged from 0.30% to 3.25%.~~

All 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 ~~Partnership’s~~Company’s NOK-denominated bonds, the ~~Partnership’s~~Company’s Euro-denominated term loans and restricted cash, ~~the repayment of the Partnership's NOK-denominated bonds and the termination of the associated cross currency swaps,~~ and the change in the valuation of the ~~Partnership’s~~Company’s cross currency swaps, the ~~Partnership~~Company incurred foreign exchange gains (losses) of ~~$1.4~~$8.6 million, ~~$(26.9)~~$(21.4) million, and ~~$5.3~~$(9.6) million for the years ended December 31, ~~2018, 2017~~2021, 2020 and ~~2016,~~2019, respectively.

The aggregate annual long-term debt principal repayments required under these revolving credit facilities, loans and bonds subsequent to December 31, ~~2018~~2021, are ~~$136.6 million (2019), $613.0 million (2020), $404.1 million (2021), $92.1~~$156.8 million (2022), ~~$213.3~~$346.4 million (2023), $123.8 million (2024), $184.6 million (2025), $404.3 million (2026) and ~~$528.5~~$179.0 million (thereafter).

Certain loan agreements require that (a) the ~~Partnership~~Company maintains minimum levels of tangible net worth and aggregate liquidity, (b) the ~~Partnership~~Company maintain certain ratios of vessel values related to the relevant outstanding loan principal balance, (c) the ~~Partnership~~Company not exceed a maximum amount of leverage, and (d) certain of the ~~Partnership��s~~Company’s subsidiaries maintain restricted cash deposits. As at December 31, ~~2018,~~2021, the ~~Partnership has three~~Company had 5 credit facilities with an aggregate outstanding loan balance of ~~$442.2~~$496.1 million that require it to maintain minimum vessel-value-to-outstanding-loan-principal-balance ratios ~~ranging from~~of 110%, 115% to, 120%, 120% and 135%, which as at December 31, ~~2018 ranged from 132% to 198% which exceeded the required ratios for the three facilities.~~2021 were 146%, 1,030%, 151%, 166%, and 241%, respectively. The vessel values used in calculating these ratios are the appraised values provided by third parties, where available, or prepared by the ~~Partnership~~Company based on second-hand sale and purchase market data. Since vessel values can be volatile, the ~~Partnership’s~~Company’s estimates of market value may not be indicative of either the current or future prices that could be obtained if the ~~Partnership~~Company sold any of the vessels. The ~~Partnership’s~~Company’s ship-owning subsidiaries may not, among other things, pay dividends or distributions if the ~~Partnership's~~Company's subsidiaries are in default under their term loans ~~or revolving credit facilities~~ and, in addition, one of the term loans in the ~~Teekay Nakilat~~RasGas II Joint Venture requires it to satisfy a minimum vessel value to outstanding loan principal balance ratio to pay dividends. As at December 31, ~~2018,~~2021, the ~~Partnership~~Company was in compliance with all covenants relating to the ~~Partnership’s~~Company’s credit facilities and other long-term debt.


~~11.~~	~~Income Tax~~

11.Income Tax

The components of the provision for income taxes were as follows:


	Year Ended December 31, 2021 $	Year Ended December 31, 2020 $	Year Ended December 31, 2019 $
Current	(6,257)	(4,396)	(6,824)
Deferred	(629)	904	(653)
Income tax expense	(6,886)	(3,492)	(7,477)

F-27

SEAPEAK LLC (FORMERLY TEEKAY LNG PARTNERS L.P.) AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in thousands of U.S. Dollars, except unit and per unit data and foreign currency exchange rates or unless otherwise indicated)

Year Ended
December 31,
2018
$ Year Ended
December 31,
2017
$ Year Ended
December 31,
2016
$
Current (2,361 ) (3,557 ) (962 )
Deferred (852 ) 2,733
(11 )
Income tax expense (3,213 ) (824 ) (973 )
Included in the Company's current income tax expense are provisions for uncertain tax positions relating to freight taxes. The Company does not presently anticipate that its provisions for these uncertain tax positions will significantly increase in the next 12 months; however, this is dependent on the jurisdictions in which vessel trading activity occurs. The Company reviews its freight tax obligations on a regular basis and may update its assessment of its tax positions based on available information at that time. Such information may include additional legal advice as to the applicability of freight taxes in relevant jurisdictions. Freight tax regulations are subject to change and interpretation; therefore, the amounts recorded by the Company may change accordingly.

The ~~Partnership~~Company operates in countries that have differing tax laws and rates. Consequently, a consolidated weighted average tax rate will vary from year to year according to the source of earnings or losses by country and the change in applicable tax rates. Reconciliations of the tax charge related to the relevant year at the applicable statutory income tax rates and the actual tax charge related to the relevant year are as follows:


	Year Ended December 31, 2021 $	Year Ended December 31, 2020 $	Year Ended December 31, 2019 $
Net income before income tax expenses	262,434	100,804	172,081
Net income not subject to taxes	(217,184)	(135,010)	(167,667)
Net income (loss) income subject to taxes	45,250	(34,206)	4,414
At applicable statutory tax rates
Amount computed using the standard rate of corporate tax	(7,555)	8,888	(1,821)
Adjustments to valuation allowance and uncertain tax positions	(24,629)	(5,569)	(6,767)
Permanent and currency differences	25,065	(7,186)	4,592
Change in tax rates	233	375	(3,481)
Tax expense related to the current year	(6,886)	(3,492)	(7,477)

Year Ended
December 31,
2018
$ Year Ended
December 31,
2017
$ Year Ended
December 31,
2016
$
Net income before income tax expenses 30,088
49,735
158,938
Net income not subject to taxes (68,675 ) (94,106 ) (138,542 )
Net (loss) income subject to taxes (38,587 ) (44,371 ) 20,396
At applicable statutory tax rates
Amount computed using the standard rate of corporate tax 6,833
13,874
(3,338 )
Adjustments to valuation allowance and uncertain tax positions (14,733 ) 324
11,802
Permanent and currency differences 3,257
(12,507 ) (9,125 )
Change in tax rates 1,430
(2,515 ) (312 )
Tax expense related to the current year (3,213 ) (824 ) (973 )

The significant components of the ~~Partnership’s~~Company’s deferred tax assets ~~(liabilities)~~ were as follows:


	December 31, 2021 $	December 31, 2020 $
Derivative instruments	(703)	3,650
Taxation loss carryforwards and disallowed finance costs	78,031	58,310
Vessels and equipment	(277)	(1,256)
Other items	(276)	(2,636)
	76,775	58,068
Valuation allowance	(73,341)	(54,005)
Net deferred tax assets	3,434	4,063

December 31,
2018
$ December 31,
2017
$
Derivative instruments 2,793
3,823
Taxation loss carryforwards and disallowed finance costs 49,298
35,326
Vessels and equipment 4,045
3,936
Capitalized interest (1,853 ) (1,927 )
54,283
41,158
Valuation allowance (52,570 ) (38,594 )
Net deferred tax assets included in other assets 1,713
2,564


	December 31, 2021 $	December 31, 2020 $
Deferred income tax assets included in other assets	4,142	5,386
Deferred income tax liabilities included in other long-term liabilities	(708)	(1,323)
Net deferred tax assets	3,434	4,063

The ~~Partnership~~Company had tax losses in the United Kingdom (or UK) of ~~$15.9~~$28.9 million as at December 31, ~~2018~~2021 (December 31, ~~2017~~2020 – ~~$7.9~~$26.5 million) that are available indefinitely for offset against future taxable income in the UK. The ~~Partnership~~Company had tax losses and estimated disallowed finance costs in Spain of 110.3 million Euros or approximately ~~$126.3~~$125.2 million (December 31, ~~2017~~2020 – 110.3 million Euros or approximately ~~$132.5~~$134.8 million) and ~~20.7~~14.8 million Euros or approximately ~~$23.6~~$16.9 million (December 31, ~~2017~~2020 – ~~25.2~~7.5 million Euros or approximately ~~$30.2~~$9.2 million), respectively, at December 31, ~~2018~~2021 of which the tax losses ~~are available indefinitely~~ and the disallowed finance costs are available ~~for 18 years from the year the costs are incurred~~indefinitely for offset against future taxable income in Spain. ~~The Partnership also~~In addition, the Company had estimated tax losses in Luxembourg of ~~109.9~~197.8 million Euros or approximately ~~$125.7~~$224.9 million as at December 31, ~~2018~~2021 (December 31, ~~2017~~2020 – ~~91.5~~123.2 million Euros or approximately ~~$109.9~~$150.5 million) that are available for offset against taxable future income in Luxembourg, either indefinitely for losses arising prior to 2017, or for 17 years for losses arising subsequent to 2016.

The ~~Partnership~~Company recognizes interest and penalties related to uncertain tax positions in income tax expense. The tax years ~~2008~~2010 through ~~2018~~2021 currently remain open to examination by the major tax jurisdictions to which the ~~Partnership~~Company is subject.


~~12.~~	~~Related Party Transactions~~


a)	~~The following table and related footnotes provide information about certain of the Partnership's related party transactions for the periods indicated:~~

F-28

SEAPEAK LLC (FORMERLY TEEKAY LNG PARTNERS L.P.) AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in thousands of U.S. Dollars, except unit and per unit data and foreign currency exchange rates or unless otherwise indicated)

Year Ended
December 31,
2018
$ Year Ended
December 31,
2017
$ Year Ended
December 31,
2016
$
Voyage revenues ^(i)(vi)
11,018
36,358
37,336
Vessel operating expenses ^(ii)(vi)
(17,666 ) (23,564 ) (19,738 )
Time-charter hire expense⁽ⁱⁱⁱ⁾
(7,671 ) —

—
General and administrative expenses ^(iv)
(15,967 ) (9,434 ) (12,590 )
General and administrative expenses deferred and capitalized ^(v)
(822 ) (859 ) (571 )
12.Related Party Transactions


~~(i)~~	~~Commencing in 2008, the~~ ~~Arctic Spirit~~ ~~and~~ ~~Polar Spirit~~ ~~LNG carriers were time-chartered to Teekay Corporation at fixed-rates for periods of 10 years. The contract periods for the~~ ~~Polar Spirit~~ ~~and for the~~ ~~Arctic Spirit~~ ~~expired in March 2018 and April 2018, respectively.~~

~~(ii)~~

~~The Partnership and certain of its operating subsidiaries have entered into service agreements with certain subsidiaries of Teekay Corporation pursuant to which the Teekay Corporation subsidiaries~~

a)The following table and related footnotes provide information about certain of the Company's related party transactions for the periods indicated:


	Year Ended December 31, 2021 $	Year Ended December 31, 2020 $	Year Ended December 31, 2019 $
Voyage revenues (i)(iii)	40,225	37,481	49,257
Vessel operating expenses (i)(ii)	(7,011)	(6,505)	(6,629)
Time-charter hire expenses (iii)	(23,487)	(23,564)	(19,994)
General and administrative expenses (iv)	(27,098)	(15,779)	(15,393)
Restructuring charges (v)	(3,223)	—	(400)
Equity income (vi)	2,417	2,424	1,316

(i)In September 2018, the Company’s FSU, the Bahrain Spirit, commenced its 21-year charter contract with the Bahrain LNG Joint Venture. Voyage revenues from the charter of the Bahrain Spirit to the Bahrain LNG Joint Venture for the year ended December 31, 2021 amounted to $30.1 million ($28.8 million during 2020 and $30.6 million during 2019). In addition, the Company has an operation and maintenance contract with the Bahrain LNG Joint Venture and had an operating and maintenance subcontract with Teekay Marine Solutions (Bermuda) Ltd. (or TMS), an entity wholly-owned by Teekay Tankers Ltd., which is controlled by Teekay, relating to the LNG regasification terminal in Bahrain. The contract with TMS was terminated in August 2019 and such services are currently managed by the Company. The subcontractor fees paid to TMS for the year ended December 31, 2019 were $2.0 million, and are included in vessel operating expenses in the Company's consolidated statements of income. Fees received in relation to the Partnership and its subsidiaries crew training and technical management services. In addition, as part of the Partnership's acquisition of its ownership interest in the Pan Union Joint Venture in 2014, the Partnership entered into an agreement with a subsidiary of Teekay Corporation whereby Teekay Corporation's subsidiary agreed to provide, on behalf of the Partnership, shipbuilding supervision and crew training services for four LNG carrier newbuildings in the Pan Union Joint Venture, up to their delivery dates from 2017 to 2019. All costs incurred by these Teekay Corporation subsidiaries related to these services are charged to the Partnership and recorded as part of vessel operating expenses.


~~(iii)~~	In September 2018, the Partnership entered into an agreement with its 52%-owned joint venture, the Teekay LNG-Marubeni Joint Venture, to charter in one of Teekay LNG-Marubeni Joint Venture's LNG carriers, the ~~Magellan Spirit, for a period of two years at a fixed-rate.~~


~~(iv)~~	Includes administrative, advisory, business development, commercial and strategic consulting services charged by Teekay Corporation's subsidiaries and reimbursements to the Partnership's General Partner for costs incurred on the Partnership's behalf for the conduct of the Partnership's business.

~~(v)~~

Includes the Partnership's costs associated with the Bahrain LNG Joint Venture including pre-operation, engineering and financing-related expenses, of which $1.1 million was reimbursed by the Bahrain LNG Joint Venture during 2018 (December 31, 2017 – $1.1 million; December 31, 2016 – $0.4 million). The net costs are recorded as part of investments in and advances to equity-accounted joint ventures in the Partnership's consolidated balance sheets.

~~(vi)~~

~~The Partnership entered into an~~ operation and maintenance contract ~~with the Bahrain LNG Joint Venture and an operating and maintenance subcontract with Teekay Marine Solutions (Bermuda) Ltd. (or~~ ~~TMS~~), an entity wholly-owned by Teekay Tankers Ltd., which is controlled by Teekay Corporation, relating to the LNG regasification terminal in Bahrain. The Partnership, as the contractor, and TMS, as the subcontractor, agreed to provide pre-mobilization services up to August 2018, and mobilization services and other general operational and maintenance services of the facility thereafter. The subcontractor fees from TMS of $1.6 million during 2018 ($nil during 2017 and 2016) are included in vessel operating expenses in the Partnership's consolidated statements

~~of income. Cost recoveries~~ from the Bahrain LNG Joint Venture ~~of $1.6~~for the year ended December 31, 2021 were $10.1 million ($8.7 million during ~~2018 ($nil~~2020 and $6.5 million during ~~2017~~2019) and ~~2016)~~ are included in voyage revenues in the ~~Partnership's~~Company's consolidated statements of income.

(ii)The Company and certain of its operating subsidiaries have entered into service agreements with certain subsidiaries of Teekay pursuant to which the Teekay subsidiaries provide to the Company and its subsidiaries crew training and technical management services. In addition, as part of the Company's acquisition of its ownership interest in the Pan Union Joint Venture in 2014, the Company entered into an agreement with a subsidiary of Teekay whereby Teekay's subsidiary provided, on behalf of the Company, shipbuilding supervision and crew training services for 4 LNG carrier newbuildings in the Pan Union Joint Venture, up to their delivery dates from 2017 to 2019. All costs incurred by these Teekay subsidiaries related to these services were charged to the Company and recorded as part of vessel operating expenses. On January 13, 2022, as part of the Stonepeak Transaction (as defined in Note 20a), the Company acquired the subsidiaries of Teekay that provide crew training and technical management services.

The Partnership entered into services agreements with certain subsidiaries of Teekay Corporation pursuant to which the Teekay Corporation subsidiaries provide the Partnership with shipbuilding and site supervision services related to certain LNG carrier newbuildings the Partnership has ordered. These costs are capitalized and included as part of advances on newbuilding contracts in the Partnership’s consolidated balance sheets. During the years ended 2018, 2017 and 2016, the Partnership incurred shipbuilding and site supervision costs with Teekay Corporation subsidiaries of $15.3 million, $13.2 million and $8.5 million, respectively.


c)	As at December 31, 2018 and 2017, non-interest bearing advances to affiliates totaled $8.2 million and $7.3 million, respectively, and non-interest bearing advances from affiliates totaled $14.7 million and $12.1 million, respectively. These advances are unsecured and have no fixed repayment terms. Affiliates are entities that are under the same common control.

(iii)Commencing in September 2018, the Company entered into an agreement with the MALT Joint Venture to charter in one of the MALT Joint Venture's LNG carriers, the Magellan Spirit (see Note 5b). The time-charter hire expenses charged for the year ended December 31, 2021 were $23.5 million ($23.6 million during 2020 and $20.0 million during 2019). In addition, commencing in May 2019, the Company entered into an agreement with a subsidiary of Teekay to charter out the Magellan Spirit until October 31, 2019. The Company recognized revenue of $12.2 million for the year ended December 31, 2019 from this charter to Teekay. On October 31, 2019, the subsidiary of Teekay novated the charter contract to the Company and the Company is chartering the Magellan Spirit to an external customer until June 2022.

~~The Partnership’s Suezmax tanker the~~ ~~Toledo Spirit~~ operates pursuant to a time-charter contract that increases or decreases the otherwise fixed-hire rate established in the charter depending on the spot charter rates that the Partnership would have earned had it traded the vessel in the spot tanker market. The time-charter contract was terminated in January 2019 upon which the charterer, which is also the owner, sold the vessel to a third party. The Partnership has entered into an agreement with Teekay Corporation under which Teekay Corporation paid the Partnership any amounts payable to the charterer as a result of spot rates being below the fixed rate, and the Partnership paid Teekay Corporation any amounts payable to the Partnership as a result of spot rates being in excess of the fixed rate. The amounts receivable or payable to Teekay Corporation are settled annually (see Notes 3 and 13).

(iv)Includes administrative, advisory, business development, commercial and strategic consulting services charged by Teekay and reimbursements to Teekay and Teekay GP L.L.C. (or the Company's General Partner) for costs incurred on the Company's behalf for the conduct of the Company's business.

(v)The Company incurred restructuring charges of $3.2 million from subsidiaries of Teekay related to severance costs resulting from the reorganization and realignment of employees supporting the Company as a result of the Stonepeak Transaction in January 2022 during the year ended December 31, 2021 (see Notes 18a and 20a).


~~13.~~	~~Derivative Instruments and Hedging Activities~~

The ~~Partnership~~Company incurred restructuring charges of $0.4 million from subsidiaries of Teekay attributable to employees supporting the Company during the year ended December 31, 2019 (see Note 18c).

(vi)During the year ended December 31, 2021, the Company charged fees of $2.4 million ($2.4 million during 2020 and $1.3 million during 2019) to the Yamal LNG Joint Venture relating to the successful bid process for the construction and chartering of 6 ARC7 LNG carriers. The fees are reflected in equity income in the Company’s consolidated statements of income.

b)As at December 31, 2021 and 2020, non-interest-bearing advances to affiliates totaled $4.2 million and $4.9 million, respectively, and non-interest-bearing advances from affiliates totaled $12.4 million and $11.0 million, respectively. These advances are unsecured and have no fixed repayment terms. Affiliates are entities that are under common control with the Company.

c)The Company had an agreement with Teekay under which Teekay paid the Company any amounts payable to the charterer of the Toledo Spirit as a result of spot rates being below the fixed rate, and the Company paid Teekay any amounts payable to the Company by the charterer of the Toledo Spirit as a result of spot rates being in excess of the fixed rate. The amounts receivable or payable to Teekay were settled annually (see Note 13). The time-charter contract was terminated in January 2019, upon which the charterer, which was also the owner, sold the vessel to a third party, which resulted in the agreement with Teekay ending concurrently.

d)In December 2019, as part of dissolving certain of the Company's controlled subsidiaries as a result of a simplification transaction, the Company acquired the General Partner's 1% non-controlling interest in certain of the Company's subsidiaries for an amount initially estimated at $2.7 million. In April 2020, the purchase price was finalized at $2.2 million.

e)On May 11, 2020, Teekay and the Company eliminated all of the Company's incentive distribution rights, which were held by the General Partner, in exchange for the issuance to a subsidiary of Teekay of 10.75 million newly-issued common units of the Company. The common units were valued at $122.6 million, based on the prevailing unit price at the time of issuance. This transaction was treated as a non-cash transaction in the Company's consolidated statements of cash flows.

f)For other transactions with the Company's equity-accounted joint ventures not disclosed above, please refer to Note 7.

F-29

SEAPEAK LLC (FORMERLY TEEKAY LNG PARTNERS L.P.) AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in thousands of U.S. Dollars, except unit and per unit data and foreign currency exchange rates or unless otherwise indicated)

13.Derivative Instruments and Hedging Activities

The Company uses derivative instruments in accordance with its overall risk management policy.

Foreign Exchange Risk

From time to time, the Company economically hedges portions of its forecasted expenditures denominated in foreign currencies with foreign currency forward contracts. As at December 31, 2021, the Company was not committed to any foreign currency forward contracts.

The ~~Partnership~~Company entered into cross currency swaps concurrently with the issuance of its NOK-denominated senior unsecured bonds (see Note 10), and pursuant to these swaps, the ~~Partnership~~Company receives the principal amount in NOK on maturity dates of the swaps in exchange for payments 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 the ~~Partnership’s~~Company’s NOK-denominated bonds due in ~~2020, 2021~~2023, 2025 and ~~2023,~~2026, and to economically hedge the interest rate exposure. The following table reflects information relating to the cross currency swaps as at December 31, ~~2018.~~2021.



		Floating Rate Receivable
Principal Amount NOK	Principal Amount $	Reference Rate	Margin	Fixed Rate Payable	Fair Value / Carrying Amount of Asset (Liability) $	Weighted- Average Remaining Term (years)

850,000	102,000	NIBOR	4.60%	7.89%	(10,000)	1.7
1,000,000	112,000	NIBOR	5.15%	5.74%	4,230	3.7
1,000,000	117,000	NIBOR	4.90%	6.37%	(4,683)	4.9
					(10,453)

Floating Rate Receivable
Principal
Amount
NOK Principal
Amount
$ Reference
Rate Margin Fixed Rate
Payable Fair Value /
Carrying
Amount of Asset
(Liability)
$ Weighted-
Average
Remaining
Term (Years)
1,000,000
134,000
NIBOR 3.70 % 5.92 % (18,315 ) 1.4
1,200,000
146,500
NIBOR 6.00 % 7.72 % (4,727 ) 2.8
850,000
102,000
NIBOR 4.60 % 7.89 % (6,080 ) 4.7
(29,122 )

Interest Rate Risk

The ~~Partnership~~Company enters into interest rate swaps which exchange a receipt of floating interest for a payment of fixed interest to reduce the ~~Partnership’s~~Company’s exposure to interest rate variability on certain of its outstanding floating-rate debt. As at December 31, ~~2018,~~2021, the ~~Partnership~~Company was committed to the following interest rate swap agreements:


	Interest Rate Index	Principal Amount $	Fair Value / Carrying Amount of Asset (Liability) $	Weighted- Average Remaining Term (years)	Weighted- Average Fixed Interest Rate (i)
LIBOR-Based Debt:
U.S. Dollar-denominated interest rate swaps (ii)(iii)	LIBOR	740,503	(19,428)	3.3	2.2%
U.S. Dollar-denominated interest rate swaps (ii)(iv)	LIBOR	235,202	(290)	4.0	1.7%
EURIBOR-Based Debt:
Euro-denominated interest rate swaps (v)	EURIBOR	54,695	(3,188)	1.7	3.9%
			(22,906)

Interest
Rate
Index Principal
Amount
$ Fair Value /
Carrying
Amount of
Assets
(Liability)
$ Weighted-
Average
Remaining
Term
(years)
Fixed
Interest
Rate ⁽ⁱ⁾
LIBOR-Based Debt:
U.S. Dollar-denominated interest rate swaps LIBOR 30,000
(519 ) 0.5 4.9 %
U.S. Dollar-denominated interest rate swaps⁽ⁱⁱ⁾
LIBOR 131,250
(16,494 ) 10.0 5.2 %
U.S. Dollar-denominated interest rate swaps⁽ⁱⁱ⁾
LIBOR 32,134
(66 ) 2.6 2.8 %
U.S. Dollar-denominated interest rate swaps^(iii)(iv)
LIBOR 336,316
(12,787 ) 2.0 3.4 %
U.S. Dollar-denominated interest rate swaps^(iv)
LIBOR 91,000
174
0.0 1.7 %
U.S. Dollar-denominated interest rate swaps^(iv)
LIBOR 184,005
3,167
8.0 2.3 %
EURIBOR-Based Debt:
Euro-denominated interest rate swaps EURIBOR 86,477
(11,092 ) 4.7 3.8 %
(37,617 )
(i)Excludes the margins the Company pays on its floating-rate term loans, which, at December 31, 2021, ranged from 0.60% to 3.25%.


~~(i)~~	~~Excludes the margins the Partnership pays on its floating-rate term loans, which, at December 31, 2018, ranged from 0.30% to 3.25%.~~


~~(ii)~~	~~Principal amount reduces semi-annually.~~


~~(iii)~~	~~These interest rate swaps are subject to mandatory early termination in 2020 and 2021, whereby the swaps will be settled based on their fair value at that time.~~


~~(iv)~~	~~Principal amount reduces quarterly.~~

(ii)Principal amount reduces quarterly.

(iii)NaN interest rate swaps are subject to mandatory early termination in 2024 whereby the swaps will be settled based on their fair value at that time.

(iv)Forward-starting interest rate swaps with inception dates ranging from October 2023 to April 2024.

(v)Principal amount reduces monthly.

As at December 31, ~~2018,~~2021, the ~~Partnership~~Company had multiple interest rate swaps and cross currency swaps with the same counterparty that are subject to the same master agreement. Each of these master agreements provide for the net settlement of all swaps subject to that master agreement through a single payment in the event of default or termination of any one swap. The fair value of these derivative instruments is presented on a gross basis in the ~~Partnership’s~~Company’s consolidated balance sheets. As at December 31, ~~2018,~~2021, these interest rate swaps and cross currency swaps had an aggregate fair value asset of ~~$3.2~~$7.1 million (December 31, ~~2017~~2020 – $4.5 million) and an aggregate fair value liability of ~~$53.6~~$36.9 million (December 31, ~~2017~~

F-30

SEAPEAK LLC (FORMERLY TEEKAY LNG PARTNERS L.P.) AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in thousands of U.S. Dollars, except unit and per unit data and foreign currency exchange rates or unless otherwise indicated)

2020 – ~~$81.5~~$73.7 million). As at December 31, ~~2018,~~2021, the ~~Partnership~~Company had ~~$6.8~~$2.9 million (December 31, ~~2017~~2020 – ~~$22.3~~$3.8 million) on deposit as security for swap liabilities under certain master agreements. The deposit is presented in restricted cash – current and long-term on the ~~Partnership’s~~Company’s consolidated balance sheets.

Credit Risk

The ~~Partnership~~Company is 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, the ~~Partnership~~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. In addition, to the extent practical, interest rate swaps are entered into with different counterparties to reduce concentration risk.

~~Other Derivatives~~

In order to reduce the variability of its revenue, the Partnership has entered into an agreement with Teekay Corporation under which Teekay Corporation pays the Partnership any amounts payable to the charterer of the ~~Toledo Spirit~~ ~~as a result of spot rates being below the fixed rate, and the Partnership pays Teekay Corporation any amounts payable to the Partnership by the charterer of the~~ ~~Toledo Spirit~~ ~~as a result of spot rates being in excess of the fixed rate. The fair value of the derivative asset at December 31, 2018 was $1.1 million (December 31, 2017 – an asset of $1.6 million).~~

The following table presents the ~~location~~classification and fair value amounts of derivative instruments, segregated by type of contract, on the ~~Partnership’s~~Company’s consolidated balance sheets.


	Current portion of derivative assets $	Derivative assets $	Accrued liabilities $	Current portion of derivative liabilities $	Derivative liabilities $
As at December 31, 2021
Derivatives designated as a cash flow hedge:
Interest rate swap agreements	—	—	(67)	(2,451)	(3,081)
Derivatives not designated as a cash flow hedge:
Interest rate swap agreements	—	3,896	(2,177)	(10,327)	(8,699)

Cross currency swap agreements	672	3,529	(342)	(2,803)	(11,509)
	672	7,425	(2,586)	(15,581)	(23,289)
As at December 31, 2020
Derivatives designated as a cash flow hedge:
Interest rate swap agreements	—	—	(70)	(3,162)	(9,631)
Derivatives not designated as a cash flow hedge:
Interest rate swap agreements	—	—	(4,823)	(42,329)	(15,453)

Cross currency swap agreements	—	4,505	(701)	(11,434)	(7,887)
	—	4,505	(5,594)	(56,925)	(32,971)

Accounts receivable/Advances to affiliates $ Current portion of derivative assets
$ Derivative assets
$ Accrued liabilities
$ Current portion of derivative liabilities
$ Derivative liabilities
$
As at December 31, 2018
Interest rate swap agreements 188
795
2,362
(2,729 ) (6,875 ) (31,358 )
Cross currency swap agreements —
—
—
(713 ) (4,729 ) (23,680 )
Toledo Spirit time-charter derivative 1,021
40
—
—
—
—
1,209
835
2,362
(3,442 ) (11,604 ) (55,038 )
As at December 31, 2017
Interest rate swap agreements —
108
1,130
(4,101 ) (34,614 ) (35,629 )
Interest rate swaption agreements —
—
—
—
(2 ) —
Cross currency swap agreements —
—
5,042
(810 ) (44,523 ) (10,168 )
Toledo Spirit time-charter derivative 678
970
—
—
—
—
678
1,078
6,172
(4,911 ) (79,139 ) (45,797 )

Realized and unrealized gains (losses) relating to non-designated interest rate swap agreements, ~~interest rate swaption agreements,~~foreign currency forward contracts and the Toledo Spirit time-charter derivative are recognized in earnings and reported in realized and unrealized gain (loss) on non-designated derivative instruments in the ~~Partnership’s~~Company’s consolidated statements of income. The effect of the gain (loss) on these derivatives on the ~~Partnership’s~~Company’s consolidated statements of income is as follows:


	Year Ended December 31,
	2021 $			2020 $			2019 $
	Realized gains (losses)	Unrealized gains (losses)	Total	Realized gains (losses)	Unrealized gains (losses)	Total	Realized gains (losses)	Unrealized gains (losses)	Total
Interest rate swap agreements	(16,117)	42,652	26,535	(16,626)	(16,669)	(33,295)	(10,081)	(2,891)	(12,972)

Interest rate swap agreements termination	(18,012)	—	(18,012)	—	—	—	—	—	—
Foreign currency forward contracts	—	—	—	(241)	202	(39)	(147)	(202)	(349)
Toledo Spirit time- charter derivative	—	—	—	—	—	—	—	(40)	(40)
	(34,129)	42,652	8,523	(16,867)	(16,467)	(33,334)	(10,228)	(3,133)	(13,361)

F-31

SEAPEAK LLC (FORMERLY TEEKAY LNG PARTNERS L.P.) AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in thousands of U.S. Dollars, except unit and per unit data and foreign currency exchange rates or unless otherwise indicated)

Year Ended December 31,

2018
$

2017
$

2016
$
Realized gains (losses) Unrealized gains (losses) Total Realized gains (losses) Unrealized gains (losses) Total Realized gains (losses) Unrealized gains (losses) Total
Interest rate swap agreements (14,654 ) 31,061
16,407
(18,825 ) 12,393
(6,432 ) (25,940 ) 15,627
(10,313 )
Interest rate swaption agreements —
2
2
—
945
945
—
(164 ) (164 )
Interest rate swap and swaption agreements termination (13,681 ) —
(13,681 ) (610 ) —
(610 ) —
—
—
Toledo Spirit time-charter derivative
1,480
(930 ) 550
678
110
788
(654 ) 3,970
3,316
(26,855 )
30,133

3,278

(18,757 )
13,448

(5,309 )
(26,594 )
19,433

(7,161 )

~~Unrealized~~Realized and ~~realized~~unrealized gains (losses) relating to cross currency swap agreements are recognized in earnings and reported in foreign currency exchange gain (loss) in the ~~Partnership’s~~Company’s consolidated statements of income. The effect of the gain (loss) on these derivatives on the ~~Partnership's~~Company's consolidated statements of income is as follows:


	Year Ended December 31,
	2021 $			2020 $			2019 $
	Realized gains (losses)	Unrealized gains (losses)	Total	Realized gains (losses)	Unrealized gains (losses)	Total	Realized gains (losses)	Unrealized gains (losses)	Total
Cross currency swap agreements	(5,294)	4,705	(589)	(6,588)	26,832	20,244	(5,061)	(13,239)	(18,300)
Cross currency swap agreements maturity and termination	(2,470)	—	(2,470)	(33,844)	—	(33,844)	—	—	—
	(7,764)	4,705	(3,059)	(40,432)	26,832	(13,600)	(5,061)	(13,239)	(18,300)

Year Ended December 31,

2018
$

2017
$

2016
$
Realized
gains
(losses) Unrealized
gains
(losses) Total Realized
gains
(losses) Unrealized
gains
(losses) Total Realized
gains
(losses) Unrealized
gains
(losses) Total
Cross currency swap agreements (6,533 ) 21,240
14,707
(9,344 ) 49,047
39,703
(9,063 ) 28,905
19,842
Cross currency swap agreements termination (42,271 ) —
(42,271 ) (25,733 ) —
(25,733 ) (17,711 ) —
(17,711 )
(48,804 ) 21,240
(27,564 ) (35,077 ) 49,047
13,970
(26,774 ) 28,905
2,131

For the ~~years ended December 31, 2018, 2017 and 2016,~~periods indicated, the following ~~tables present~~table presents the ~~effective and ineffective portion of~~gains or losses on interest rate swap agreements designated and qualifying as cash flow ~~hedges.~~hedges and their impact on other comprehensive loss (or OCI). The following ~~tables exclude~~table excludes any interest rate swap agreements designated and qualifying as cash flow hedges in the ~~Partnership’s~~Company’s equity-accounted joint ventures.


Year Ended December 31, 2021
Amount of Gain Recognized in OCI $						Amount of Loss Reclassified from Accumulated OCI to Interest Expense $
7,257						(3,304)


Year Ended December 31, 2020
Amount of Loss Recognized in OCI $						Amount of Loss Reclassified from Accumulated OCI to Interest Expense $
(8,481)						(2,320)


Year Ended December 31, 2019
Amount of Loss Recognized in OCI $						Amount of Gain Reclassified from Accumulated OCI to Interest Expense (effective portion) $
(7,458)						376

Year Ended December 31, 2018
Effective Portion Recognized in AOCI ⁽ⁱ⁾ $

Effective Portion Reclassified from AOCI ⁽ⁱⁱ⁾
$

Ineffective Portion ⁽ⁱⁱⁱ⁾
$

2,128 (152) 740 Interest expense
2,128 (152) 740
14.Commitments and Contingencies

Year Ended December 31, 2017
Effective Portion Recognized in AOCI ⁽ⁱ⁾ $

Effective Portion Reclassified from AOCI ⁽ⁱⁱ⁾
$

Ineffective Portion ⁽ⁱⁱⁱ⁾
$

429 (427) (740) Interest expense
429 (427) (740)

a)As at December 31, 2021, the Company’s share of commitments to fund equipment installation and other construction contract costs, which are expected to be incurred in 2022, is as follows:



~~Year Ended December 31, 2016~~		2022 $
~~Effective Portion Recognized in AOCI~~ ^{Certain consolidated LNG carriers (i)} $					~~Effective Portion Reclassified from AOCI~~ ⁽ⁱⁱ⁾ $	~~Ineffective Portion~~ ⁽ⁱⁱⁱ⁾ $
~~590~~	—		—	~~Interest expense~~
~~590~~	—		—


~~(i)~~	~~Effective portion of designated and qualifying cash flow hedges recognized in other comprehensive (loss) income.~~


~~(ii)~~	~~Effective portion of designated and qualifying cash flow hedges recorded in accumulated other comprehensive income (or~~ ~~AOCI) during the term of the hedging relationship and reclassified to earnings.~~


~~(iii)~~	~~Ineffective portion of designated and qualifying cash flow hedges.~~


~~14.~~	~~Commitments and Contingencies~~


a)	~~The Partnership’s share of commitments to fund newbuilding and other construction contract costs as at December 31, 2018 is as follows:~~



	~~2019~~ $12,853
~~Hyundai Samho Heavy Industries Co.~~ ⁽ⁱ⁾		~~120,413~~
~~Yamal LNG Joint Venture~~ ⁽ⁱⁱ⁾	~~436,100~~
~~Pan Union Joint Venture~~ ⁽ⁱⁱⁱ⁾	~~29,200~~
Bahrain LNG Joint Venture ^(iv)(ii)	~~66,509~~		11,339
		~~652,222~~		24,192

~~(i)~~

~~As at December 31, 2018, the Partnership had one remaining 100%-owned LNG carrier newbuilding on order with Hyundai Samho Heavy Industries Co. (or~~ ~~HHI~~). The vessel delivered on January 31, 2019. As at December 31, 2018, costs incurred under this newbuilding contract totaled $86.9 million. In January 2019, the Partnership secured $159 million of financing through a sale-leaseback agreement for this remaining HHI LNG carrier newbuilding.

~~(ii)~~

The Partnership, through the Yamal LNG Joint Venture, has a 50% ownership interest in four 172,000-cubic meter ARC7 LNG carrier newbuildings that have an estimated total fully built-up cost of approximately $1.4 billion. As at December 31, 2018, the Partnership’s proportionate costs incurred under these newbuilding contracts totaled $255.8 million. The Yamal LNG Joint Venture has secured debt financing of $1.1 billion for the four LNG carrier newbuildings, of which $395 million was undrawn at December 31, 2018, related to the Partnership's proportionate share of the commitments included in the table above.

~~(iii)~~

Through the Pan Union Joint Venture, the Partnership has a 20% ownership interest in one LNG carrier newbuilding which delivered on January 8, 2019 (see Note 20a). The Pan Union Joint Venture has secured financing of $24 million related to the Partnership's proportionate share of the commitments included in the table above and the Partnership received $0.2 million of reimbursement directly from Shell in 2019 (see Note 7a iii).

~~(iv)~~

The Partnership has a 30% ownership interest in the Bahrain LNG Joint Venture for the development of an LNG receiving and regasification terminal in Bahrain. The project will include an FSU, which will be modified from one of the Partnership’s existing MEGI LNG carrier newbuildings, an offshore gas receiving facility, and an onshore nitrogen production facility. The terminal will have a capacity of 800 million standard cubic feet per day and will be owned and operated under a 20-year agreement commencing mid-2019. The receiving and regasification terminal is expected to have a fully-built up cost of approximately $903 million. The Bahrain LNG Joint Venture has secured undrawn debt financing of $195 million, of which $58 million relates to the Partnership's proportionate share of the commitments included in the table above.

~~Following the termination of the capital lease arrangements for the three LNG carriers in the Teekay Nakilat Joint Venture~~in 2014, the lessor made a determination that additional rentals were due under the leases following a challenge by the UK taxing authority. As a result, in 2018 the Teekay Nakilat Joint Venture recognized an additional liability of $53.0 million, which was included as part of other (expense) income in the Partnership's consolidated statements of income, and paid this liability by releasing a $7.0 million cash deposit it had made with the lessor and making a $56.0 million cash payment for the balance, which was based on the GBP/USD foreign currency exchange rates at the time the payments were made.

The Teekay Tangguh Joint Venture is currently undergoing a tax audit related to its tax returns filed for the 2010 and subsequent fiscal years. The UK taxing authority has challenged the deductibility of certain transactions not directly related to the long funding lease and the Teekay Tangguh Joint Venture has recorded a provision of $1.6 million (of which the Partnership’s 69% share is $1.1 million) in December 2017 which is included in income tax expense in the Partnership’s consolidated statements of income for the year ended December 31, 2017.

In May 2016, the Teekay LNG-Marubeni Joint Venture reached a settlement agreement with a charterer relating to a disputed charter contract termination for one of its LNG carriers that occurred in 2015. The charterer paid $39.0 million to the Teekay LNG-Marubeni Joint Venture in June 2016 for lost revenues, of which the Partnership’s share of $20.3 million was recorded in equity income for the year ended December 31, 2016.

Management is required to assess whether the Partnership will have sufficient liquidity to continue as a going concern for the one-year period following the issuance of its financial statements. The Partnership completed a number of financings and re-financings over the past 12 months, including the Partnership's refinancing and up-sizing of its $190 million revolving credit facility with a new $225 million revolving credit facility in early-November 2018 and the Partnership securing $159 million financing on its one remaining LNG carrier newbuilding in our consolidated fleet in January 2019. Based on the Partnership’s liquidity at the date these consolidated financial statements were issued and the liquidity it expects to generate from operations over the following year, the Partnership estimates that it will have sufficient liquidity to continue as a going concern for at least the one-year period following the issuance of these consolidated financial statements.

(i)In June 2019, the Company entered into an agreement with a contractor to supply reliquefaction equipment on certain of the Company's LNG carriers in 2021 and 2022, for an estimated installed cost of $52.8 million. As at December 31, 2021, the estimated remaining cost of these installations was $12.9 million.


~~15.~~	~~Supplemental Cash Flow Information~~


a)	~~The following is a tabular reconciliation of the Partnership's cash, cash equivalents and restricted cash balances for the periods presented in the Partnership's consolidated statements of cash flows:~~

(ii)The Company has a 30% ownership interest in the Bahrain LNG Joint Venture which has an LNG receiving and regasification terminal in Bahrain as described in Note 7a(ii). As at December 31, 2021, the Company's proportionate share of the estimated remaining cost of $11.3 million relates to the final construction installment on the LNG terminal. The Bahrain LNG Joint Venture has remaining debt financing of $23.5 million, of which $7.1 million relates to the Company's proportionate share of the construction commitments included in the table above.

F-32

SEAPEAK LLC (FORMERLY TEEKAY LNG PARTNERS L.P.) AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in thousands of U.S. Dollars, except unit and per unit data and foreign currency exchange rates or unless otherwise indicated)

December 31, 2018
$

December 31, 2017
$

December 31, 2016
$

December 31, 2015
$
Cash and cash equivalents 149,014
244,241
126,146
102,481
Restricted cash - current 38,329
22,326
10,145
6,600
Restricted cash - long-term 35,521
72,868
106,882
104,919
Total 222,864
339,435
243,173
214,000
b)The Tangguh Joint Venture is currently undergoing a tax audit related to its tax returns filed for the 2010 and subsequent fiscal years. The UK taxing authority has challenged the deductibility of certain transactions not directly related to the long funding lease and the Tangguh Joint Venture has recorded a provision of $1.6 million in 2017 (of which the Company's 70% share is $1.1 million) which is recorded in accrued liabilities in the Company’s consolidated balance sheets as at December 31, 2021 (December 31, 2020 – $1.6 million presented net of income tax receivable in accounts receivable).

c)Tangguh Joint Venture Operating Leases

As at December 31, 2021, the Tangguh Joint Venture was a party to operating leases (or Head Leases) whereby it leases its 2 LNG carriers (or the Tangguh LNG Carriers) to a third-party company. The Tangguh Joint Venture then leases 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 and indemnified by the 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 Tangguh Joint Venture’s carrying amounts of this estimated tax indemnification obligation as at December 31, 2021 and 2020 were $5.2 million and $5.7 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 Tangguh Joint Venture may terminate the lease arrangements on a voluntary basis at any time. If the lease arrangements terminate, the 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 Leases and the Subleases for the 2 Tangguh LNG Carriers commenced in November 2008 and March 2009, respectively.

As at December 31, 2021, the total estimated future minimum rental payments to be received and paid by the Tangguh Joint Venture related to the lease contracts are as follows:


Year	Head Lease Receipts (i)		Sublease Payments (i) (ii)
2022	$	21,242	$	23,934
2023	$	21,242	$	23,934
2024	$	21,242	$	23,934
2025	$	21,242	$	23,934
2026	$	21,242	$	23,934
Thereafter	$	47,885	$	53,988
Total	$	154,095	$	173,658

(i) The Head Leases are fixed-rate operating leases while the Subleases have a variable-rate component. As at December 31, 2021, the Company had received $356.3 million of aggregate Head Lease receipts and had paid $310.1 million of aggregate Sublease payments. The portion of the Head Lease receipts that has not been recognized into earnings is deferred and amortized on a straight-line basis over the lease terms and, as at December 31, 2021, $3.7 million (December 31, 2020 – $3.7 million) and $18.1 million (December 31, 2020 – $21.8 million) of Head Lease receipts had been deferred and included in unearned revenue and other long-term liabilities, respectively, in the Company’s consolidated balance sheets.

(ii) The amount of payments related to the Subleases are updated annually to reflect any changes in the lease payments due to changes in tax law.

15.Supplemental Cash Flow Information

a)The following is a tabular reconciliation of the Company's cash, cash equivalents and restricted cash balances for the periods presented in the Company's consolidated statements of cash flows:


	December 31, 2021 $	December 31, 2020 $	December 31, 2019 $	December 31, 2018 $
Cash and cash equivalents	92,069	206,762	160,221	149,014
Restricted cash – current	11,888	8,358	53,689	38,329
Restricted cash – long-term	38,100	42,823	39,381	35,521
Total	142,057	257,943	253,291	222,864

The ~~Partnership~~Company maintains restricted cash deposits relating to certain term loans, collateral for cross currency swaps ~~project tenders~~(see Note 13), performance bond collateral and amounts received from charterers to be used only for dry-docking expenditures and emergency repairs.

F-33


b)	~~The changes in operating assets and liabilities for years ended December 31, 2018, 2017 and 2016 are as follows:~~

SEAPEAK LLC (FORMERLY TEEKAY LNG PARTNERS L.P.) AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in thousands of U.S. Dollars, except unit and per unit data and foreign currency exchange rates or unless otherwise indicated)

Year Ended
December 31,
2018
$ Year Ended
December 31,
2017
$ Year Ended
December 31,
2016
$
Accounts receivable 3,542
1,620
5,494
Prepaid expenses and other current assets (3,843 ) (2,815 ) 745
Accounts payable 274
(2,053 ) 2,791
Accrued liabilities and other long-term liabilities 13,958
2,449
(1,572 )
Unearned revenue and long-term unearned revenue 4,234
(1,456 ) (3,218 )
Advances to and from affiliates 2,183
(913 ) (9,699 )
Other operating assets and liabilities (1,130 ) 772
(4,402 )
Total 19,218
(2,396 ) (9,861 )

b)The changes in operating assets and liabilities for years ended December 31, 2021, 2020 and 2019 are as follows:


c)	Cash interest paid (including realized losses on interest rate swaps) on long-term debt, advances from affiliates and obligations related to capital leases, net of amounts capitalized, during the years ended December 31, 2018, 2017 and 2016 totaled $167.8 million, $122.7 million and $100.9 million, respectively.


d)	~~During the years ended December 31, 2018, 2017 and 2016, cash paid for corporate income taxes was $6.0 million, $2.9 million and $4.9 million, respectively.~~

~~During the year ended December 31, 2017, the Partnership acquired a 100% ownership interest in Skaugen Gulf Petchem Carriers B.S.C.(c) (or the~~ ~~Skaugen LPG Joint Venture), which owned the LPG carrier~~ ~~Norgas Sonoma, from I.M. Skaugen SE (or~~ ~~Skaugen~~) (35%), The Oil & Gas Holding Company B.S.C.(c) (35%) and Suffun Bahrain W.L.L. (30%) for $13.2 million. The Partnership applied $4.6 million of the outstanding hire owed by Skaugen to the Partnership as a portion of the purchase price to acquire the Skaugen LPG Joint Venture, which was treated as a non-cash transaction in the Partnership’s consolidated statements of cash flows.


	Year Ended December 31, 2021 $	Year Ended December 31, 2020 $	Year Ended December 31, 2019 $
Accounts receivable	(21,874)	5,829	6,184
Prepaid expenses and other current assets	(10,082)	(2,463)	3,348
Accounts payable	5,315	(211)	1,264
Accrued liabilities and other long-term liabilities	(15,912)	(1,484)	(252)
Unearned revenue and long-term unearned revenue	(14,419)	(2,675)	(197)
Advances to and from affiliates	4,567	9,368	(6,007)
Receipts from direct financing and sales-type leases (note 6)	15,013	274,562	17,073
Expenditures for dry docking	(32,808)	(5,259)	(12,358)
Other operating assets and liabilities	(7,355)	(3,436)	(1,122)
Total	(77,555)	274,231	7,933


~~16.~~	~~Total Capital and Net Income Per Common Unit~~

c)Cash interest paid (including realized losses on interest rate swaps) on long-term debt, advances from affiliates and obligations related to finance leases, net of amounts capitalized, during the years ended December 31, 2021, 2020 and 2019 totaled $171.5 million, $170.0 million and $193.3 million, respectively.

d)During the years ended December 31, 2021, 2020 and 2019, cash paid for taxes was $6.9 million, $3.5 million and $3.7 million, respectively.

e)The sales of the Toledo Spirit by its owner during the year ended December 31, 2019 resulted in the vessel being returned to its owner with the obligation related to finance lease being concurrently extinguished. As a result, the sale of the vessel and the concurrent extinguishment of the corresponding obligation related to finance lease of $23.6 million for the year ended December 31, 2019, was treated as a non-cash transaction in the Company's consolidated statements of cash flows.

f)As at December 31, 2018, the Company had advanced $79.1 million to the Bahrain LNG Joint Venture and these advances were repayable on November 14, 2019. On the repayment date, the Company agreed to convert $7.9 million of advances into equity and agreed to convert the remaining advances of $71.2 million into a subordinated loan at an interest rate of 6% with no fixed repayment terms. Both of these transactions were treated as non-cash transactions in the Company's consolidated statements of cash flows for the year ended December 31, 2019.

g)On May 11, 2020, Teekay and the Company eliminated all of the Company's incentive distribution rights, which were held by the General Partner, in exchange for the issuance to a subsidiary of Teekay of newly-issued common units of the Company (see Note 12e). This transaction was treated as a non-cash transaction in the Company's consolidated statements of cash flows.

16.Total Capital and Net Income Per Common Unit

As at December 31, 2021, a total of ~~68.2%~~58.7% of the ~~Partnership's~~Company's common units outstanding were held by the public. The remaining common units, as well as the 2%1.8% general partner interest, were held by subsidiaries of ~~Teekay Corporation.~~Teekay. All of the ~~Partnership's~~Company's outstanding Series A Cumulative Redeemable Perpetual Preferred Units (or the Series A Preferred Units) and Series B Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units (or the Series B Preferred Units) are held by the public.

Limited Partners’ Rights

Significant rights of the ~~Partnership’s~~Company’s limited partners include the following:

•Right of common unitholders to receive distribution of Available Cash (as defined in the partnership agreement and which takes into account cash reserves for, among other things, future capital expenditures and future credit needs of the ~~Partnership)~~Company) within approximately 45 days after the end of each quarter.

•No limited partner shall have any management power over the ~~Partnership’s~~Company’s business and affairs; the General Partneris responsible for the conduct, directions and management of the ~~Partnership’s~~Company’s activities.

•The General Partner may be removed if such removal is approved by common unitholders holding at least 66-2/3% of the outstanding units voting as a single class, including units held by ~~our~~the General Partner and its affiliates.

Incentive Distribution Rights

~~The~~On May 11, 2020, Teekay and the Company agreed to eliminate all of the Company's incentive distribution rights, which were held by the General Partner, ~~is entitled~~in exchange for the issuance to a Teekay subsidiary of 10.75 million newly-issued common units of the Company. The common units were valued at $122.6 million, based on the prevailing unit price at the time of issuance. This transaction decreased the General Partner’s equity by $2.3 million representing its 1.8% proportionate share of the cost to eliminate the incentive ~~distributions if~~distribution rights. This transaction increased the ~~amount~~limited partners’ equity by $2.3 million, representing the ~~Partnership distributes~~excess value of the common units issued over its 98.2% share of the cost to ~~common unitholders with respect to any quarter exceeds specified target levels shown below:~~

eliminate the incentive

F-34

Quarterly Distribution Target Amount (per unit) Unitholders General Partner
Minimum quarterly distribution of $0.4125 98 % 2 %
Up to $0.4625 98 % 2 %
Above $0.4625 up to $0.5375 85 % 15 %
Above $0.5375 up to $0.6500 75 % 25 %
Above $0.6500 50 % 50 %

SEAPEAK LLC (FORMERLY TEEKAY LNG PARTNERS L.P.) AND SUBSIDIARIES

~~During 2018, 2017, and 2016, the quarterly cash distributions were below $0.4625 per common~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in thousands of U.S. Dollars, except unit and ~~consequently,~~per unit data and foreign currency exchange rates or unless otherwise indicated)

distribution rights. Subsequent to the ~~assumed~~elimination of the Company’s incentive distribution rights, the amount of net income ~~was~~attributable to the limited partners and General Partner is based on the limited partners' and General Partner’s respective ownership ~~percentage for the purposes of the net income per common unit calculation.~~

percentages.

In the event of a liquidation, all property and cash in excess of that required to discharge all liabilities and liquidation amounts on the Series A Preferred Units and Series B Preferred Units will be distributed to the common unitholders and the General Partner in proportion to their capital account balances, as adjusted to reflect any gain or loss upon the sale or other disposition of the ~~Partnership’s~~Company’s assets in liquidation in accordance with the partnership agreement.

Net Income Per Common Unit

Limited partners' interest in net income per common unit is determined by dividing net income, after deducting the amount of net income attributable to the non-controlling interests, the General Partner’s interest and the distributions on the Series A and Series B Preferred Units by the weighted-average number of common units outstanding during the period. The distributions payable on the Series A and Series B Preferred Units for the ~~year~~years ended December 31, ~~2018~~2021, 2020 and 2019 were $25.7 ~~million (December 31, 2017 – $14.0 million, December 31, 2016 – $2.7 million).~~million.


	Year Ended December 31, 2021 $	Year Ended December 31, 2020 $	Year Ended December 31, 2019 $
Limited partners' interest in net income for basic and diluted net income per common unit	213,138	60,632	124,546


Weighted average number of common units (i)	87,091,647	83,313,097	78,177,189
Dilutive effect of unit-based compensation	124,665	105,907	91,223
Weighted average number of common units and common unit equivalents	87,216,312	83,419,004	78,268,412
Limited partner's interest in net income per common unit:
Basic	2.45	0.73	1.59
Diluted	2.44	0.73	1.59

Year Ended
December 31,
2018
$ Year Ended
December 31,
2017
$ Year Ended
December 31,
2016
$
Limited partners' interest in net income for basic net income per common unit 2,615
19,586
134,977
Weighted average number of common units 79,672,435
79,617,778
79,568,352
Dilutive effect of unit-based compensation 169,893
173,263
103,506
Common units and common unit equivalents 79,842,328
79,791,041
79,671,858
Limited partner's interest in net income per common unit:
Basic 0.03
0.25
1.70
Diluted 0.03
0.25
1.69
(i) Includes common units related to non-forfeitable unit-based compensation

The General Partner’s and common unitholders’ interests in net income are calculated as if all net income was distributed according to the terms of the ~~Partnership’s~~Company’s partnership agreement, regardless of whether those earnings would or could be distributed. The partnership agreement does not provide for the distribution of net income; rather, it provides for the distribution of available cash, which is a contractually defined term that generally means all cash on hand at the end of each quarter after establishment of cash reserves determined by the ~~Partnership’s~~Company’s Board of Directors (or Board) to provide for the proper conduct of the ~~Partnership’s~~Company’s business, including reserves for maintenance and replacement capital expenditure and anticipated credit needs. ~~In addition, the General Partner is entitled to incentive distributions if the amount the Partnership distributes to common unitholders with respect to any quarter exceeds specified target levels.~~ Unlike available cash, net income is affected by non-cash items, such as depreciation and amortization, unrealized gains or losses on non-designated derivative instruments and foreign currency translation gains ~~(losses).~~or losses.

Pursuant to the ~~Partnership~~partnership agreement, allocations to partners are made on a quarterly basis.

~~Equity Offerings~~

~~The following table summarizes the issuances of common and preferred units over the three years ended December 31, 2018:~~

Date Units
Issued Type of Units Offering
Price per Unit
Gross Proceeds⁽ⁱ⁾
$

Net Proceeds
$

Teekay
Corporation’s
Ownership
After the
Offering⁽ⁱⁱ⁾
Use of Proceeds
October 2016 Public Offering 2016⁽ⁱⁱⁱ⁾
5,000,000
Preferred $ 25.00
125,000
120,707
33.02 % General partnership purposes, including debt repayments and funding newbuilding installments
October 2017 Public Offering^(iv)
6,800,000
Preferred $ 25.00
170,000
164,411
33.02 % General partnership purposes, including debt repayments and funding newbuilding installments


~~(i)~~	~~Including the General Partner’s proportionate capital contribution.~~


~~(ii)~~	~~Including Teekay Corporation’s indirect general partner interest relating to common unit offerings.~~

~~(iii)~~

On October 5, 2016, the Partnership issued Series A Preferred Units having a distribution rate of 9.0% per annum of the stated liquidation preference of $25.00 per unit. At any time on or after October 5, 2021, the Partnership may redeem the Series A Preferred Units, in whole or in part, at a redemption price of $25.00 per unit plus all accumulated and unpaid distributions to the date of redemption, whether or not declared.

~~(iv)~~

On October 23, 2017, the Partnership issued Series B Preferred Units having a distribution rate of 8.5% per annum of the stated liquidation preference of $25.00 per unit up to October 15, 2027, at which point the rate moves to a floating rate equal to three-month LIBOR plus a margin of 6.241%. At any time on or after October 15, 2027, the Partnership may redeem the Series B Preferred Units, in whole or in part, at a redemption price of $25.00 per unit plus all accumulated and unpaid distributions thereon to the date of redemption, whether or not declared.

Common Unit Repurchases

In December 2018, the ~~Partnership~~Company announced that its Board ~~of Directors~~ had authorized a common unit repurchase program for the repurchase of up to $100 million of the ~~Partnership's~~Company's common units. ~~As at~~The following table summarizes the common units repurchased during the years ended December 31, ~~2018,~~2021, 2020 and 2019:


Year ended December 31,	Units repurchased	Average price paid per unit	Total cost (1) $



2021	—	—	—
2020	1,373,066	$11.16	15,322
2019	1,934,569	$13.03	25,214
Total	3,307,635	$12.17	40,536

(1)Excludes the ~~Partnership had repurchased approximately 0.3 million units for $3.7 million (see Note 20d).~~repurchase cost of the associated general partner interest


~~17.~~	~~Unit-Based Compensation~~

17.Unit-Based Compensation

In ~~March 2018,~~June 2021, a total of ~~17,498~~26,985 common units, with an aggregate value of ~~$0.3~~$0.4 million, were granted to the non-management directors of the General Partner as part of their annual compensation for ~~2018.~~2021. These common units were fully vested upon grant. During ~~2017~~2020 and ~~2016,~~2019, the ~~Partnership~~Company awarded ~~17,345~~29,595 and ~~32,723~~35,419 common units, respectively, as compensation to non-management directors. The awards were fully vested in ~~March 2017~~June 2020 and March ~~2016,~~2019, respectively. The compensation to the non-management directors is included in general and administrative expenses on the ~~Partnership’s~~Company’s consolidated statements of income.

F-35

SEAPEAK LLC (FORMERLY TEEKAY LNG PARTNERS L.P.) AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in thousands of U.S. Dollars, except unit and per unit data and foreign currency exchange rates or unless otherwise indicated)

During ~~March 2018, 2017~~2021, 2020 and ~~2016,~~2019, the ~~Partnership~~Company granted ~~62,283, 60,809~~67,102, 243,940 and ~~132,582~~80,100 restricted units awards, respectively, with grant date fair values of ~~$1.2~~$1.1 million, ~~$1.0~~$3.1 million and ~~$1.5~~$1.2 million, respectively, to certain of the ~~Partnership’s~~Company’s employees and to certain employees of ~~Teekay Corporation’s~~Teekay’s subsidiaries who ~~provide~~provided services to the ~~Partnership,~~Company, based on the ~~Partnership’s~~Company’s closing common unit price on the grant date. Each restricted unit iswas equal in value to one of the ~~Partnership's~~Company's common units plus reinvested distributions from the grant date to the vesting date. The restricted units ~~vest~~awards vested equally over three years from the grant date. Any portion of a restricted unit award that iswas not vested on the date of a recipient’s termination of service iswas canceled, unless their termination ~~arises~~arose as a result of the recipient’s retirement, and in this case, the restricted unit award ~~will~~would continue to vest in accordance with the vesting schedule. Upon vesting, the value of the restricted unit awards iswas paid to each recipient in the form of common units, net of withholding tax. During the years ended December 31, ~~2018, 2017~~2021, 2020 and ~~2016,~~2019, the ~~Partnership~~Company recorded an expense of ~~$1.3~~$2.0 million, ~~$1.0~~$2.1 million, and ~~$1.3~~$1.6 million, respectively, related to the restricted units and common units.


~~18.~~	~~Restructuring Charges~~

18.Restructuring Charges

a)During ~~2018,~~the year ended December 31, 2021, the Company incurred restructuring charges of $3.2 million from subsidiaries of Teekay. The restructuring charges primarily relate to severance costs resulting from the reorganization and realignment of employees supporting the Company as a result of the ~~sale~~Stonepeak Transaction in January 2022 (see Note 20a).

b)In January 2019, the charterer, who was also the owner of the ~~Teide~~Toledo Spirit ~~(see Note 19e),~~conventional tanker, sold the ~~Partnership~~vessel to a third party. As a result of this sale, the Company returned the vessels to the owner and incurred seafarer severance payments of $2.9 million for the year ended December 31, ~~2018 of $1.8 million and~~2019, which was presented as restructuring charges in the ~~Partnership's~~Company's consolidated statements of income. As at December 31, ~~2018,~~2021 and 2020, the remaining balance of unpaid restructuring charges of ~~$0.5~~$0.6 million is included in accrued liabilities in the ~~Partnership's~~Company's consolidated balance sheets.


~~19.~~	~~Write-Down and Loss on Sales of Vessels~~

~~During February and March 2016, Centrofin Management Inc. (or~~ ~~Centrofin), the charterer for both the~~ ~~Bermuda Spirit~~ ~~and~~ ~~Hamilton Spirit~~ Suezmax tankers, exercised its option under the charter contracts to purchase both vessels. As a result of Centrofin’s acquisition of the vessels, the Partnership recorded a $27.4 million loss on the sale of the vessels and associated charter contracts in the year ended December 31, 2016 in the Partnership's consolidated statements of income. The ~~Bermuda Spirit~~ ~~was sold on April 15, 2016 and the~~

c)During the year ended December 31, 2019, the Company incurred restructuring charges of $0.4 million from subsidiaries of Teekay attributable to employees supporting the Company.

~~Hamilton~~

19.(Write-Down) and Gain on Sales of Vessels

The following table provides information on the Company's (write-down) and gain on sales of vessels for the years presented in these consolidated financial statements:


			Year Ended December 31,
Segment	Asset Type	Completion of Sale Date	2021 $	2020 $	2019 $
Liquefied Petroleum Gas (note 19a)	7 Multi-gas Carriers	N/A	—	(51,000)	—
Liquefied Natural Gas (note 6)	2 LNG Carriers	Jan-2020	—	—	14,349
Conventional Tanker (note 19b)	1 Handymax	Oct-2019	—	—	(785)
(Write-down) and gain on sales of vessels			—	(51,000)	13,564

a)During the year ended December 31, 2020, the carrying values of the Company's 7 wholly-owned multi-gas carriers (the Unikum Spirit, Vision Spirit, Pan Spirit, Cathinka Spirit, Camilla Spirit, Sonoma Spirit and Napa Spirit), were written down to their estimated fair values, using appraised values, primarily due to the lower near-term outlook for these types of vessels partly as a result of the economic environment at that time (including the COVID-19 pandemic), as well as the Company receiving notification during 2020 that the Company's then-existing commercial management agreement with a third-party commercial manager was ~~sold~~to be terminated and replaced by a new commercial management agreement in September 2020. The total impairment charge of $51.0 million was included in (write-down) and gain on ~~May 17, 2016. The Partnership used~~sales of vessels for the ~~total~~year ended December 31, 2020 in the Company's consolidated statements of income.

In November 2021, the Company signed a memorandum of agreement for the sale of its wholly-owned multi-gas carrier, the Sonoma Spirit, for net proceeds of ~~$94.3~~$10.0 million. The vessel is expected to be delivered between May and July 2022. The vessel is classified as held for sale at its net book value of $9.8 million on the Company's consolidated balance sheet as at December 31, 2021.

b)As a result of the sale of the Alexander Spirit in October 2019 for net proceeds of $11.5 million, the Company recorded a write-down in respect of this vessel of $0.8 million for the year ended December 31, 2019, which is included in (write-down) and gain on sales of vessels in the Company's consolidated statements of income.

20.Subsequent Events

a)Stonepeak Transaction

On October 4, 2021, the Company (as Teekay LNG Partners L.P.), entered into an agreement and plan of merger with the General Partner, an investment vehicle (or Acquiror) managed by Stonepeak Partners L.P. (or Stonepeak), and a wholly-owned subsidiary of Acquiror (or Merger Sub). On January 13, 2022, Stonepeak completed its acquisition of the Company, with Merger Sub merging with and into the Company, and with the Company surviving the merger as a subsidiary of Stonepeak (or the Merger). Pursuant to the Merger and related transactions collectively constituting the Stonepeak Transaction, (a) each issued and outstanding common unit of the Company, including approximately 36.0 million common units owned by Teekay (but excluding any common units owned by the Company, Acquiror or the Company’s or Acquiror’s respective wholly-owned subsidiaries), was converted into the right to receive cash in an amount of $17.00 per common unit, (b)

F-36

SEAPEAK LLC (FORMERLY TEEKAY LNG PARTNERS L.P.) AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(all tabular amounts stated in thousands of U.S. Dollars, except unit and per unit data and foreign currency exchange rates or unless otherwise indicated)

Teekay sold to Acquiror all of the outstanding ownership interests in the General Partner for $26.4 million, which price consists of $17.00 for each of the approximately 1.6 million common unit equivalents represented by the economic interest of the General Partner's general partner interest in the Company and (c) the Company acquired certain restructured subsidiaries of Teekay that provide, through services agreements, comprehensive managerial, operational and administrative services to the Company and its subsidiaries and joint ventures. On January 24, 2022, the Company's common units were delisted from the ~~sales primarily~~New York Stock Exchange. The Company's Series A and Series B Preferred Units remained outstanding and continued to ~~repay existing term loans associated~~trade on the New York Stock Exchange following the Merger.

Additionally, at the effective time of the Merger on January 13, 2022, each restricted unit award granted pursuant to the Teekay LNG Partners L.P. 2005 Long-Term Incentive Plan that was outstanding immediately prior to the effective time, whether or not vested, was automatically vested, cancelled and converted into the right to receive an amount in cash equal to the product of (a) $17.00 multiplied by (b) the number of common units subject to such restricted unit award held by the holder thereof, less applicable withholding taxes.

b)Conversion and Name Change

On February 25, 2022, Teekay LNG Partners L.P. converted from a limited partnership formed under the laws of the Republic of the Marshall Islands into a limited liability company formed under the laws of the Republic of the Marshall Islands. The Conversion is deemed a continuation of the existence of the Partnership in the form of the Company, as a Marshall Islands limited liability company, with ~~these vessels.~~the existence of the Company deemed to have commenced on the date the Partnership commenced its existence. Upon the Conversion, all of the rights, privileges and powers of the Partnership, and all property of and all property and debts due to the Partnership, became vested in the Company and the property of the Company. In addition, all rights of creditors and all liens upon any property of the Partnership were preserved unimpaired and all debts, liabilities and duties of the Partnership automatically attached to the Company. Concurrently with the Conversion, the Company changed its name to Seapeak LLC and changed the ticker symbols for its Series A Preferred Units and Series B Preferred Units from “TGP PRA” and “TGP PRB” to “SEAL PRA” and “SEAL PRB,” respectively.

Pursuant to the Conversion:

•each outstanding common unit of the Partnership was converted into one issued and outstanding, fully paid and non-assessable common unit of the Company;

•the general partner interest in the Partnership was converted into 1,555,061 common units of the Company (which number is equal to the notional common units of the Partnership represented by such general partner interest immediately prior to the Conversion) and the Company, as a limited liability company, no longer had a general partner.

~~In November 2016, the Partnership reached an agreement to sell the~~ ~~Asian Spirit~~ Suezmax tanker for net proceeds of $20.6 million and as a result, recorded an $11.5 million impairment charge on the write-down of the vessel for the year ended December 31, 2016 in the Partnership's consolidated statements of income. The vessel delivered to the new owner on March 21, 2017. The Partnership used the net proceeds from the sale primarily to repay its existing term loan associated with the vessel.

~~In June 2017, the charterer for the~~ ~~European Spirit~~ Suezmax tanker gave formal notice to the Partnership that it would not exercise its one-year extension option under the charter contract and the charterer redelivered the vessel to the Partnership in August 2017. Upon receiving this notification, the Partnership commenced marketing the vessel for sale. As a result, the Partnership wrote-down the vessel to its estimated resale value, based on second-hand market comparable values and recorded a $12.6 million write-down of the vessel for the year ended December 31, 2017 in the Partnership's consolidated statements of income. The vessel was presented as held for sale in the Partnership's consolidated balance sheets as of December 31, 2017. The Partnership recorded a further write-down on this vessel of $4.0 million for the year ended December 31, 2018 in the Partnership's consolidated statements of income. On December 6, 2018 the ~~European Spirit~~ ~~Suezmax tanker was sold for net proceeds of $15.7 million. The Partnership used the net proceeds from the sale primarily to repay its existing term loan associated with the vessel.~~

~~In August 2017, the charterer for the~~ ~~African Spirit~~ Suezmax tanker gave formal notice to the Partnership that it will not exercise its one-year extension option under the charter contract and the charterer redelivered the vessel to the Partnership in November 2017. As a result, the Partnership wrote-down the vessel to its estimated resale value, based on second-hand market comparable values, and recorded a $12.5 million write-down of the vessel for the year ended December 31, 2017 in the Partnership's consolidated statements of income. The vessel was presented as held for sale in the Partnership's consolidated balance sheets as of December 31, 2017. The Partnership recorded a further write-down on this vessel of $3.9 million for the year ended December 31, 2018 in the Partnership's consolidated statements of income. On October 9, 2018 the ~~African Spirit~~ ~~Suezmax tanker was sold for net proceeds of $12.8 million. The Partnership used the net proceeds from the sale primarily to repay its existing term loan associated with the vessel.~~

~~Under the Partnership's charter contracts for the~~ ~~Teide Spirit~~ ~~and~~ ~~Toledo Spirit~~ Suezmax tankers, the charterer, who is also the owner of the vessels, has the option to cancel the charter contracts 13 years following commencement of the respective charter contracts. In August 2017, the charterer of the ~~Teide Spirit~~ gave formal notification to the Partnership of its intention to terminate its charter contract subject to certain conditions being met and third-party approvals being received. In February 2018, the charterer, sold the ~~Teide Spirit~~ ~~to a third party. On May 20, 2018, the charterer of the~~ ~~Toledo Spirit~~ gave formal notification to the Partnership of its intention to terminate its charter contract subject to certain conditions being met and the receipt of certain third-party approvals. On November 20, 2018, the owner and charterer of the ~~Toledo Spirit~~, reached an agreement to sell the vessel and delivered the vessel to the buyer in January 2019 (see Note 20b). The Partnership wrote-down the vessels to their estimated fair values based on their expected future discounted cash flows and recorded an aggregated write-down of $25.5 million for the year ended December 31, 2017 in the Partnership's consolidated statements of income.

~~In March 2018, the carrying value of the~~ ~~Alexander Spirit~~ conventional tanker was written down to its estimated fair value, using an appraised value, as a result of changes in the Partnership's expectations of the vessel's future opportunities once its current charter contract ends in 2019. The impairment charge of $13.0 million is included in write-down of goodwill and write-down and loss on sales of vessels for the year ended December 31, 2018 in the Partnership's consolidated statements of income.

~~In June 2018, the carrying values for four of the Partnership's seven wholly-owned multi-gas carriers (the~~ ~~Napa Spirit~~, ~~Pan Spirit~~, ~~Camilla Spirit~~ ~~and~~ ~~Cathinka Spirit~~), were written down to their estimated fair values, taking into consideration vessel appraised values, as a result of the Partnership's evaluation of alternative strategies for these assets, the current charter rate environment and the outlook for charter rates for these vessels at that time. The total impairment charge of $33.0 million is included in write-down of goodwill and write-down and loss on sales of vessels for the year ended December 31, 2018 in the Partnership's consolidated statements of income.


~~20.~~	~~Subsequent Events~~


a)	~~On January 8, 2019, the Pan Union Joint Venture took delivery of its fourth LNG carrier newbuilding, the~~ ~~Pan Africa, in which the Partnership has a 20% ownership interest. The vessel concurrently commenced its 20-year charter contract with Shell.~~


b)	~~On January 23, 2019, the~~ ~~Toledo Spirit~~ Suezmax tanker was delivered to the owner of the vessel. Upon delivery, the charterer, who is also the owner of the vessel, terminated its time-charter contract with the Partnership and sold the vessel to a third-party.


c)	~~On January 31, 2019, the~~ ~~Yamal Spirit~~ ~~LNG carrier newbuilding was delivered and concurrently commenced its 15-year charter time-contract with Yamal Trade Pte. Ltd~~. Upon delivery of the vessel, the Partnership sold and leased back the vessel under a sale-leaseback financing transaction, which the Partnership secured on January 18, 2019 prior to the delivery of the ~~Yamal Spirit~~.


d)	~~During January 2019, the Partnership repurchased 0.8 million of its common units for $9.3 million.~~

~~On February 25, 2019, the Partnership entered into a commercial management agreement (or~~ ~~CMA) with a third-party commercial manager (or the~~ ~~Manager) whereby the Manager agreed to commercially manage and employ the Partnership's seven~~ multi-gas vessels, with such transition to occur over a period between February 2019 and April 2019. The Partnership has the ability to withdraw its vessels from the Manager at any time subject to the requirements provided in the CMA.

F-37



Title of each class		Trading Symbol	Name of each exchange on which registered
~~Common~~Series A Preferred Units		SEAL PRA	New York Stock Exchange
Series AB Preferred Units		SEAL PRB	New York Stock Exchange
~~Series B Preferred Units~~	~~New York Stock Exchange~~



				Page
PART I.
Item 1.			Identity of Directors, Senior Management and Advisers	4
Item 2.			Offer Statistics and Expected Timetable	4
Item 3.			Key Information	4
			~~Selected Financial Data~~Risk Factors	4
Item 4.			~~Risk Factors~~	9
~~Item 4.~~	Information on the ~~Partnership~~Company	2622
			A. Overview, History and Development	2622
			B. Operations	2623
			Our Fleet and Our Charters	2623
			Liquefied Natural Gas Segment	2723
			Liquefied Petroleum Gas Segment	3026
			~~Conventional Tanker Segment~~Business Strategies	3228
			~~Business Strategies~~	32
	Safety, Management of Ship Operations and Administration	3328
			Risk of Loss, Insurance and Risk Management	3429
			Flag, Classification, Audits and Inspections	3430
			Regulations	3530
			C. Organizational Structure	4037
			D. Property, Plant and Equipment	4037
			E. Taxation of the ~~Partnership~~C o m pany	4137
			United States Taxation	4137
			Marshall Islands Taxation	4238
			Other Taxation	4238
Item 4A.			Unresolved Staff Comments	4239
Item 5.			Operating and Financial Review and Prospects	4239
			Overview	4239
			Significant Developments in ~~2018~~202 1 and Early ~~2019~~20 22	4239
			Important Financial and Operational Terms and Concepts	4542
			S u mmary Financial Data	42
			Results of Operations	4643
			Year Ended December 31, ~~2018~~202 1 versus Year Ended December 31, ~~2017~~20 20	4644
			Year Ended December 31, ~~2017~~2020 versus Year Ended December 31, ~~2016~~2019	5350
			Liquidity and ~~Cash Needs~~Capital Resources	5950
			~~Credit Facilities and Capital Leases~~	61
			~~Contractual Obligations and Contingencies~~	61
	~~Off-Balance Sheet Arrangements~~	63
	Critical Accounting Estimates	6352
			Non -GAAP Financial Measures	56
Item 6.			Directors, Senior Management and Employees	6658
			~~Management~~ Directors and Executive Officers of ~~Teekay LNG Partners L.P.~~Seapeak LLC	6658
			~~Directors of Teekay GP L.L.C.~~	66
	~~Our Management~~	67
	Annual Executive Compensation	6859
			Compensation of Directors	6859
			2005 Long-Term Incentive Plan	6859
			Board Practices	6859
			The Board's Role in Oversight of Environmental, Social and Corporate Governance	60
			Crewing and Staff	6960
			Common Unit Ownership	7060
Item 7.			Major Common Unitholders and Related Party Transactions	7061
			Major Common Unitholders	7061



	Related Party Transactions	7161
Item 8.			Financial Information	7261
			A. Consolidated Financial Statements and Other Financial Information	7261
			Consolidated Financial Statements and Notes	7261
			Legal Proceedings	7261



Interest expense	(128,303	)	(80,937	)	(58,844	)	(43,259	)	(60,414	)
Interest income	3,760		2,915		2,583		2,501		3,052
Realized and unrealized gain (loss) on non-designated derivative instruments⁽³⁾	3,278		(5,309	)	(7,161	)	(20,022	)	(44,682	)
Foreign currency exchange gain (loss)⁽⁴⁾	1,371		(26,933	)	5,335		13,943		28,401
Other (expense) income⁽⁵⁾	(51,373	)	1,561		1,537		1,526		836
Income tax expense	(3,213	)	(824	)	(973	)	(2,722	)	(7,567	)
Net income	26,875		48,911		157,965		217,510		218,927
Non-controlling and other interests in net income	24,260		29,325		22,988		42,903		44,676
Limited partners’ interest in net income	2,615		19,586		134,977		174,607		174,251
Limited partners’ interest in net income per:
Common unit - basic	0.03		0.25		1.70		2.21		2.30
Common unit - diluted	0.03		0.25		1.69		2.21		2.30
Cash distributions declared per common unit	0.5600		0.5600		0.5600		2.8000		2.7672
Balance Sheet Data (at end of period):
Cash and cash equivalents	149,014		244,241		126,146		102,481		159,639
Restricted cash	73,850		95,194		117,027		111,519		45,997
Vessels and equipment⁽⁶⁾	3,329,523		2,905,712		2,215,983		2,108,160		1,989,230
Investment in and advances to equity-accounted joint ventures	1,116,133		1,094,596		1,037,726		883,731		891,478
Net investments in direct financing leases⁽⁷⁾	575,163		495,990		643,008		666,658		682,495
Total assets	5,384,781		5,019,299		4,315,474		4,052,980		3,947,275
Total debt and obligations related to capital leases	3,268,332		2,809,541		2,184,065		2,058,336		1,970,531
Partners’ equity	1,833,254		1,879,038		1,738,506		1,519,062		1,537,752
Total equity	1,882,597		1,931,423		1,777,412		1,543,679		1,547,371
Common units outstanding	79,360,719		79,626,819		79,571,820		79,551,012		78,353,354
Preferred units outstanding	11,800,000		11,800,000		5,000,000		—		—
Other Financial Data:
Net voyage revenues⁽⁸⁾	482,525		424,474		394,788		396,845		399,607
EBITDA⁽⁹⁾	279,009		233,302		310,741		353,243		377,983
Adjusted EBITDA⁽⁹⁾	492,275		424,436		445,341		442,463		466,965
Capital expenditures:
Expenditures for vessels and equipment⁽¹⁰⁾	686,305		714,529		344,987		191,969		194,255
Liquefied Natural Gas Fleet Data:
Consolidated:
Calendar-ship-days⁽¹¹⁾	7,570		5,912		5,244		4,745		4,745
Average age of our fleet (in years at end of year)	7.8		8.9		9.7		10.2		9.2
Vessels at end of year⁽¹²⁾	23		18		15		13		13
Equity-Accounted:⁽¹³⁾
Calendar-ship-days⁽¹¹⁾	6,912		5,920		5,840		5,840		5,840
Average age of our fleet (in years at end of year)	7.0		8.0		7.5		6.5		5.5
Vessels at end of year⁽¹²⁾	20		17		16		16		16
Liquefied Petroleum Gas Fleet Data:
Consolidated:
Calendar-ship-days⁽¹¹⁾	2,555		2,445		2,196		2,190		1,874
Average age of our fleet (in years at end of year)	9.9		8.9		7.0		6.0		5.0
Vessels at end of year⁽¹²⁾	7		7		6		6		6
Equity-Accounted:⁽¹³⁾
Calendar-ship-days⁽¹¹⁾	7,645		7,001		6,395		5,880		5,498
Average age of our fleet (in years at end of year)	7.9		9.1		9.6		10.4		10.8
Vessels at end of year⁽¹²⁾	22		20		19		16		15
Conventional Fleet Data:
Calendar-ship-days⁽¹¹⁾	1,389		1,904		2,439		2,920		3,202
Average age of our fleet (in years at end of year)	12.0		12.6		11.7		9.5		8.5
Vessels at end of year	2		5		6		8		8



(in thousands of U.S. Dollars)	Year Ended December 31, 2018		Year Ended December 31, 2017		Year Ended December 31, 2016		Year Ended December 31, 2015		Year Ended December 31, 2014
Reconciliation of “EBITDA” and “Adjusted EBITDA” to “Net income”:
Net income	26,875		48,911		157,965		217,510		218,927
Depreciation and amortization	124,378		105,545		95,542		92,253		94,127
Interest expense, net of interest income	124,543		78,022		56,261		40,758		57,362
Income tax expense	3,213		824		973		2,722		7,567
EBITDA	279,009		233,302		310,741		353,243		377,983
Write-down of goodwill and write-down and loss on sale of vessels	54,653		50,600		38,976		—		—
Foreign currency exchange (gain) loss	(1,371	)	26,933		(5,335	)	(13,943	)	(28,401	)
Amortization of in-process contracts included in voyage revenues, net of offsetting vessel operating expenses	(326	)	(1,113	)	(1,113	)	(1,113	)	(1,113	)
Unrealized (gain) loss on non-designated derivative instruments	(30,133	)	(13,448	)	(19,433	)	(12,375	)	2,096
Realized loss on interest rate swaps and swaptions	28,335		19,435		25,940		28,968		41,725
Adjustments to Equity-Accounted EBITDA^(14)(15)	109,108		108,727		95,565		87,683		74,675
Other expense⁽⁵⁾	53,000		—		—		—		—
Adjusted EBITDA	492,275		424,436		445,341		442,463		466,965



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



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



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



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


			~~Cash Distribution Policy for Common Unitholders~~	72
	B. Significant Changes	7361
Item 9.			The Offer and Listing	7361
Item 10.			Additional Information	7361
			Memorandum and Articles of Association	7361
			Material Contracts	7361
			Exchange Controls and Other Limitations Affecting Unitholders	7562
			Material United States Federal Income Tax Considerations	7962
			Non-United States Tax Considerations	7965
			Canadian Federal Income Tax Considerations	7966
			Documents on Display	7966
Item 11.			Quantitative and Qualitative Disclosures About Market Risk	8066
Item 12.			Description of Securities Other than Equity Securities	8168

PART II.
Item 13.			Defaults, Dividend Arrearages and Delinquencies	8169
Item 14.			Material Modifications to the Rights of Unitholders and Use of Proceeds	8169
Item 15.			Controls and Procedures	8169
Item 16A.			Audit Committee Financial Expert	8270
Item 16B.			Code of Ethics	8270
Item 16C.			Principal Accountant Fees and Services	8270
Item 16D.			Exemptions from the Listing Standards for Audit Committees	8370
Item 16E.			Purchases of Units by the Issuer and Affiliated Purchasers	8370
Item 16F.			Change in Registrant’s Certifying Accountant	8370
Item 16G.			Corporate Governance	8370
Item 16H.			Mine Safety Disclosure	8370

PART III.
Item 17.			Financial Statements	8371
Item 18.			Financial Statements	8371
Item 19.			Exhibits	8472
Signature				8673


~~Item 1.~~	~~Identity of Directors, Senior Management and Advisers~~



(in thousands of U.S. Dollars, except unit, per unit and fleet data)	Year Ended December 31, 2018 $	Year Ended December 31, 2017 $	Year Ended December 31, 2016 $	Year Ended December 31, 2015 $	Year Ended December 31, 2014 $
Income Statement Data:
Voyage revenues	510,762	432,676	396,444	397,991	402,928
Income from vessel operations⁽¹⁾	147,809	148,649	153,181	181,372	183,823
Equity income⁽²⁾	53,546	9,789	62,307	84,171	115,478


~~(1)~~	Income from vessel operations includes write-down of goodwill and write-down and loss on sale of vessels of $54.7 million, $50.6 million and $39.0 million for the years ended December 31, 2018, 2017 and 2016, respectively.


~~(5)~~	Other (expense) income for the year ended December 31, 2018 includes a $53.0 million expense relating to the Teekay Nakilat Joint Venture recognizing an additional tax indemnification liability. Please see "Item 5 – Operating and Financial Review and Prospects: Significant Developments in 2018 and Early 2019 – Teekay Nakilat Capital Lease."


~~(6)~~	Vessels and equipment consist of (a) our vessels, at cost less accumulated depreciation, (b) vessels related to capital leases, at cost less accumulated depreciation and (c) advances on our newbuildings.


~~(7)~~	Certain of our external charters have been accounted for as direct financing leases. As a result, the vessels associated with the external charters accounted for as direct financing leases are not included as part of vessels and equipment. Please see "Item 18 – Financial Statements: Note 6 – Revenue – Net Investments in Direct Financing Leases."


~~(10)~~	~~Excludes expenditures for vessels and equipment from our equity-accounted joint ventures.~~


~~(15)~~	~~Adjustments relating to equity income from our equity-accounted joint ventures are as follows:~~



		As at December 31, 2018
Assets accounted for under the equity method of accounting	Ownership Percentage	# of Delivered Vessels	Newbuildings/LNG Terminals Under Construction
Angola Joint Venture	33%	4	—
Bahrain LNG Joint Venture	30%	—	1
Exmar LNG Joint Venture	50%	1	—
Pan Union Joint Venture	20%-30%	3	1
RasGas 3 Joint Venture	40%	4	—
Teekay LNG-Marubeni Joint Venture	52%	6	—
Yamal LNG Joint Venture	50%	2	4
		20	6



		As at December 31, 2017
Assets accounted for under the equity method of accounting	Ownership Percentage	# of Delivered Vessels	Newbuildings/LNG Terminals Under Construction
Angola Joint Venture	33%	4	—
Bahrain LNG Joint Venture	30%	—	1
Exmar LNG Joint Venture	50%	2	—
Pan Union Joint Venture	20%-30%	1	3
RasGas 3 Joint Venture	40%	4	—
Teekay LNG-Marubeni Joint Venture	52%	6	—
Yamal LNG Joint Venture	50%	—	6
		17	10


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


	Years Ended December 31,
(in thousands of U.S. Dollars)	2021	2020
Income from vessel operations	246,455	226,093
Restructuring charges	3,223	—
Write-down and (gain) on sales of vessels	—	51,000
General and administrative expenses	41,040	26,904
Depreciation and amortization	130,810	129,752
Time-charter hire expenses	23,487	23,564
Vessel operating expenses	124,626	116,396
Net voyage revenues	569,641	573,709


~~(2)~~	~~Member of Audit Committee and Conflicts Committee~~



~~Name~~	~~Age~~	~~Position~~
~~Mark Kremin~~	48	~~President and Chief Executive Officer, Teekay Gas Group Ltd.~~
~~Scott Gayton~~	44	~~Chief Financial Officer, Teekay Gas Group Ltd.~~ ⁽¹⁾
~~Edith Robinson~~	54	~~Corporate Secretary, Teekay GP L.L.C.; Corporate Secretary, Teekay Gas Group Ltd.~~


~~(1)~~	Excludes units owned by Teekay Corporation which controls us and on the Board of which serves the director of our General Partner, C. Sean Day. Please read “Item 7 – Major Common Unitholders and Related Party Transactions" for more detail.


~~(2)~~	Each director, executive officer and key employee beneficially owns less than 1% of the outstanding common units. Under SEC rules, a person beneficially owns any units as to which the person has or shares voting or investment power.


~~(3)~~	~~Based on 79,360,719 of common units outstanding as of December 31, 2018. Excludes the 2% general partner interest held by our General Partner, a wholly-owned subsidiary of Teekay Corporation.~~



Identity of Person or Group	Common Units Owned	Percentage of Common Units Owned ⁽¹⁾
Teekay Corporation⁽¹⁾	25,208,274	31.8	%
FMR LLC⁽²⁾	7,970,000	10.0	%
Cobas Asset Management, SGIIC, SA⁽³⁾	6,656,159	8.4	%


~~(2)~~	FMR LLC has the sole dispositive power as to 7,970,000 common units and has sole voting power as to 18,400 of these common units. This information is based on the Schedule 13G/A filed by this group with the SEC on February 13, 2019.


~~(3)~~	~~Cobas Asset Management, SGIIC, SA has sole and shared voting power as to 6,656,159 common units. This information is based on the Schedule 13G/A filed by this group with the SEC on February 13, 2019.~~


a)	We have entered into an amended and restated omnibus agreement with Teekay Corporation, our General Partner, Opco, Teekay Offshore and related parties. The following discussion describes certain provisions of the omnibus agreement, as it has been amended.


d)	~~Please read “Item 18 – Financial Statements: Note 12 – Related Party Transactions” for additional information about these and various other related-party transactions.~~


A.	~~Consolidated Financial Statements and Other Financial Information~~



	Quarterly Distribution Target Amount (per unit)	Marginal Percentage Interest
		Unitholders	General Partner
Minimum Quarterly Distribution	$0.4125	98%	2%
First Target Distribution	Up to $0.4625	98%	2%
Second Target Distribution	Above $0.4625 up to $0.5375	85%	15%
Third Target Distribution	Above $0.5375 up to $0.6500	75%	25%
Thereafter	Above $0.6500	50%	50%

Identity of Person or Group

Common Units
Owned

Percentage of
Common Units
Owned ⁽³⁾

All directors and officers of Teekay GP L.L.C. and Teekay Gas Group Ltd. as a group (9 persons) ^{(1) (2)}