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HAMILTON, BERMUDA -- (Marketwired) -- 02/20/14 -- Teekay GP L.L.C., the general partner of Teekay LNG Partners L.P. (TGP) (Teekay LNG or the Partnership) (NYSE: TGP) -

Highlights


--  Generated distributable cash flow of $63.4 million in the fourth quarter
    of 2013, an increase of 18 percent from the fourth quarter of 2012.
--  Declared fourth quarter 2013 cash distribution of $0.6918 per unit, an
    increase of 2.5 percent from the previous quarter.
--  In November 2013, acquired and bareboat chartered-back a second LNG
    carrier newbuilding with Awilco LNG.
--  In November 2013, exercised an option for one additional MEGI LNG
    carrier newbuilding to be delivered in 2017.
--  Total liquidity of approximately $332 million as at December 31, 2013.

Teekay GP L.L.C., the general partner of Teekay LNG Partners L.P. (Teekay LNG or the Partnership) (NYSE: TGP), today reported the Partnership's results for the quarter ended December 31, 2013. During the fourth quarter of 2013, the Partnership generated distributable cash flow(1) of $63.4 million, compared to $53.6 million in the same quarter of the previous year. The increase in distributable cash flow was primarily due to the Partnership's acquisition of a 50 percent interest in Exmar LPG BVBA, a liquefied petroleum gas (LPG) carrier joint venture with Exmar N.V. (Exmar), in February 2013 and its acquisition and charter-back of two liquefied natural gas (LNG) carriers from Awilco LNG ASA (Awilco) in September and November 2013. The increase was partially offset by reduced cash flow following the sale of the Tenerife Spirit conventional tanker in December 2013.

On January 15, 2014, the Partnership declared a cash distribution of $0.6918 per unit for the quarter ended December 31, 2013, an increase of $0.0168 per unit, or 2.5 percent, from the previous quarter. The cash distribution was paid on February 14, 2014 to all unitholders of record on January 31, 2014.

"Teekay LNG continued on its course of steady growth in 2013 with the accretive acquisition-charterback transactions with Awilco LNG, which enabled us to increase the Partnership's fourth quarter distribution by 2.5 percent to $0.6918 per unit," commented Peter Evensen, Chief Executive Officer of Teekay GP LLC. "Looking ahead, in addition to the two MEGI LNG carrier newbuildings chartered to Cheniere starting in 2016, we expect the Partnership's three currently unchartered MEGI LNG carrier newbuildings delivering in 2017 will be well-positioned to take advantage of the anticipated strong LNG shipping fundamentals relating to the expected start-up of several new LNG liquefaction projects beginning in 2016," Mr. Evensen continued. "In addition to securing employment for these three unchartered newbuildings, the Partnership is also engaged in LNG shipping and floating regasification project tender opportunities with expected start-up dates in the same timeframe."

Mr. Evensen added, "With 100 percent of Teekay LNG's on-the-water LNG carrier fleet operating under fixed-rate contracts with an average remaining duration of 12 years, the Partnership is largely insulated from the recent declines in spot LNG shipping rates. Over the next three years, only two of Teekay LNG's LNG carriers, both of which are 52-percent owned, are scheduled to roll-off their existing contracts, limiting the Partnership's exposure to any short-term rate volatility through 2016."


(1)  Distributable cash flow is a non-GAAP financial measure used by certain
     investors to measure the financial performance of the Partnership and
     other master limited partnerships. Please see Appendix B for a
     reconciliation of this non-GAAP measure to the most directly comparable
     financial measure under United States generally accepted accounting
     principles (GAAP).

Recent Transactions

Exercised Option for an Additional LNG Carrier Newbuilding

In November 2013, Teekay LNG exercised an option with Daewoo Shipbuilding & Marine Engineering Co., Ltd. (DSME) of South Korea for one additional 173,400 cubic meter (cbm) LNG carrier newbuilding. This vessel will be equipped with the M-type, Electronically Controlled, Gas Injection (MEGI) twin engines, which are expected to be significantly more fuel-efficient and have lower emission levels than other engines currently being utilized in LNG shipping. The Partnership intends to secure long-term charter contract employment for the vessel prior to its delivery in 2017. In connection with exercising the option in November 2013, the Partnership was also able to delay the delivery dates for the two 173,400 cbm LNG carrier newbuildings ordered in July 2013 from 2016 to 2017 to better coincide with the expected timing of new LNG shipping projects. Currently, the Partnership has options with DSME for up to three additional LNG carrier newbuildings.

Acquisition and Bareboat Charter-Back of Second LNG Carrier Newbuilding

In September 2013, Teekay LNG agreed to acquire a second 155,900 cbm LNG carrier newbuilding from Awilco on similar terms as the first vessel. The second vessel was delivered to the Partnership in late-November 2013 and bareboat-chartered to Awilco on a four-year fixed-rate charter contract (plus a one-year extension option) with a fixed-price purchase obligation at the end of the initial term (and option period). Similar to the first Awilco vessel, the second vessel's purchase price was $205 million less a $50 million upfront prepayment of charter hire by Awilco, which is in addition to the daily bareboat charter rate.

Exmar LPG Joint Venture Secured Long-term Contracts

In late January 2014, Exmar LPG BVBA, the Partnership's LPG joint venture with Exmar NV, was awarded two five-year fixed-rate time-charter contracts, up to a maximum of 10 years, with Statoil ASA. The contracts are expected to be serviced by two LPG carrier newbuildings currently under construction at Hanjin Heavy Industries and Construction Co., Ltd., which are scheduled for delivery in 2016.

Also in late January 2014, Exmar LPG BVBA was awarded two 10-year fixed-rate time-charter contracts with Potash Corporation (POT). The contracts will be serviced by two of Exmar LPG BVBA's existing on-the-water LPG carriers.

Financial Summary

The Partnership reported adjusted net income attributable to the partners(1) (as detailed in Appendix A to this release) of $46.2 million for the quarter ended December 31, 2013, compared to $38.5 million for the same period of the prior year. Adjusted net income attributable to the partners excludes a number of specific items that had the net effect of increasing net income by $1.3 million and decreasing net income by $10.3 million for the three months ended December 31, 2013 and 2012, respectively, as detailed in Appendix A. Including these items, the Partnership reported net income attributable to the partners, on a GAAP basis, of $47.5 million and $28.2 million for the three months ended December 31, 2013 and 2012, respectively. Adjusted net income attributable to the partners for the three months ended December 31, 2013 increased from the same period in the prior year, mainly due to the acquisitions of the two LNG carriers from Awilco and the acquisition of the Partnership's 50 percent interest in Exmar LPG BVBA in February 2013.

For the year ended December 31, 2013, the Partnership reported adjusted net income attributable to the partners(1) (as detailed in Appendix A to this release) of $175.0 million, compared to $156.3 million for the prior year. Adjusted net income attributable to the partners excludes a number of specific items that had the net effect of increasing net income by $26.2 million and decreasing net income by $32.6 million for the year ended December 31, 2013 and 2012, respectively, as detailed in Appendix A. Including these items, the Partnership reported net income attributable to the partners, on a GAAP basis, of $201.2 million and $123.7 million for the year ended December 31, 2013 and 2012, respectively. Adjusted net income attributable to the partners for the year ended December 31, 2013 increased from the same period in the prior year, mainly due to the acquisitions of the two LNG carriers from Awilco, the acquisition of the Partnership's 50 percent interest in Exmar LPG BVBA in February 2013 and the acquisition of the Partnership's 52 percent interest in six LNG carriers from A.P. Moller-Maersk A/S in February 2012.

For accounting purposes, the Partnership is required to recognize the changes in the fair value of its outstanding derivative instruments that are not designated as hedges for accounting purposes in net income. This method of accounting does not affect the Partnership's cash flows or the calculation of distributable cash flow, but results in the recognition of unrealized gains or losses on the consolidated statements of income as detailed in notes 5, 6 and 7 to the Summary Consolidated Statements of Income and Comprehensive Income included in this release.


(1)  Adjusted net income attributable to the partners is a non-GAAP
     financial measure. Please refer to Appendix A to this release for a
     reconciliation of this non-GAAP measure to the most directly comparable
     financial measure under GAAP and information about specific items
     affecting net income which are typically excluded by securities
     analysts in their published estimates of the Partnership's financial
     results.

Operating Results

The following table highlights certain financial information for Teekay LNG's two segments: the Liquefied Gas segment and the Conventional Tanker segment (please refer to the "Teekay LNG's Fleet" section of this release below and Appendices C through F for further details).


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                        Three Months Ended           Three Months Ended
                        December 31, 2013            December 31, 2012
                           (unaudited)                  (unaudited)
                  ----------------------------------------------------------
                  ----------------------------------------------------------
                               Conven-                      Conven-
                   Liquefied    tional          Liquefied    tional
(in thousands of         Gas    Tanker                Gas    Tanker
 U.S. Dollars)       Segment   Segment    Total   Segment   Segment    Total
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net voyage
 revenues(i)          77,166    26,823  103,989    70,545    27,364   97,909
Vessel operating
 expenses             14,106    11,058   25,164    13,846    11,924   25,770
Depreciation and
 amortization         17,916     6,229   24,145    17,359     8,868   26,227
----------------------------------------------------------------------------
----------------------------------------------------------------------------
CFVO from
 consolidated
 vessels(ii)          63,246    10,964   74,210    54,285    13,069   67,354
CFVO from equity
 accounted
 vessels(iii)         52,626         -   52,626    38,498         -   38,498
Total CFVO(ii)       115,872    10,964  126,836    92,783    13,069  105,852
----------------------------------------------------------------------------
----------------------------------------------------------------------------

(i)   Net voyage revenues represents voyage revenues less voyage expenses,
      which comprise all expenses relating to certain voyages, including
      bunker fuel expenses, port fees, canal tolls and brokerage
      commissions. Net voyage revenues is a non-GAAP financial measure used
      by certain investors to measure the financial performance of shipping
      companies. Please see Appendix C for a reconciliation of this non-GAAP
      measure as used in this release to the most directly comparable GAAP
      financial measure.
(ii)  Cash flow from vessel operations (CFVO) from consolidated vessels
      represents income from vessel operations before (a) depreciation and
      amortization expense, (b) amortization of in-process revenue
      contracts, (c) loan loss recovery, (d) write down of vessels, and
      includes (e) adjustments for direct financing leases and on two
      Suezmax tankers to a cash basis. CFVO is included because certain
      investors use this data to measure a company's financial performance.
      CFVO is not required by GAAP and should not be considered as an
      alternative to net income, equity income or any other indicator of the
      Partnership's performance required by GAAP. Please see Appendix E for
      a reconciliation of CFVO from consolidated vessels (a non-GAAP
      measure) as used in this release to the most directly comparable GAAP
      financial measure.
(iii) The Partnership's equity accounted investments for the three months
      ended December 31, 2013 and 2012 include the Partnership's 40 percent
      interest in Teekay Nakilat (III) Corporation, which owns four LNG
      carriers; the Partnership's 50 percent interest in the Excalibur and
      Excelsior joint ventures with Exmar, which own one LNG carrier and one
      regasification unit, respectively; the Partnership's 33 percent
      interest in four LNG carriers servicing the Angola LNG Project; and
      the Partnership's 52 percent interest in Malt LNG Netherlands Holdings
      B.V., the joint venture between the Partnership and Marubeni
      Corporation, which owns six LNG carriers (Malt LNG Carriers). The
      Partnership's equity accounted investments for the three months ended
      December 31, 2013 also includes the Partnership's 50 percent interest
      in Exmar LPG BVBA, the joint venture between the Partnership and
      Exmar, acquired in February 2013, which currently owns and charters-in
      28 vessels in the LPG carrier segment, including 12 newbuildings.
      Please see Appendix F for a description and reconciliation of CFVO
      from equity accounted vessels (a non-GAAP measure) as used in this
      release to the most directly comparable GAAP financial measure.

Liquefied Gas Segment

Cash flow from vessel operations from the Partnership's Liquefied Gas segment, excluding equity accounted vessels, increased to $63.2 million in the fourth quarter of 2013 from $54.3 million in the same quarter of the prior year. The increase is primarily the result of the acquisition of the two LNG carriers from Awilco in September and November 2013.

Cash flow from vessel operations from the Partnership's equity accounted vessels in the Liquefied Gas segment increased to $52.6 million in the fourth quarter of 2013 from $38.5 million in the same quarter of the prior year. This increase was primarily due to the acquisition of a 50 percent interest in the Exmar LPG BVBA joint venture in February 2013 and an increase in the revenue relating to one of the Malt LNG Carriers, which commenced a new three-year charter contract at a higher rate during the third quarter of 2013.

Conventional Tanker Segment

Cash flow from vessel operations from the Partnership's Conventional Tanker segment decreased to $11.0 million in the fourth quarter of 2013 from $13.1 million in the same quarter of the prior year, primarily due to the sale of the Tenerife Spirit in mid-December 2013 and the scheduled dry docking of two Suezmax tankers which resulted in 48 days of off-hire in the fourth quarter of 2013. This decrease was partially offset by an increase in the tanker rates for two of the Partnership's Suezmax tankers in the fourth quarter of 2013.

Teekay LNG's Fleet

The following table summarizes the Partnership's fleet as of February 1, 2014:


----------------------------------------------------------------------------
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                                         Number of Vessels
                      ------------------------------------------------------
                      ------------------------------------------------------
                                 Owned    In-Chartered
                               Vessels         Vessels  Newbuildings   Total
                      ------------------------------------------------------
LNG Carrier Fleet               29 (i)               -             5      34
LPG/Multigas Carrier
 Fleet                         16 (ii)         5 (iii)      12 (iii)      33
Conventional Tanker
 Fleet                              10               -             -      10
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Total                               55               5            17      77
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(i)   The Partnership's ownership interests in these vessels range from 33
      percent to 100 percent.
(ii)  The Partnership's ownership interests in these vessels range from 50
      percent to 99 percent.
(iii) The Partnership's interest in these vessels is 50 percent.

Liquidity and Continuous Offering Program Update

In May 2013, the Partnership implemented a continuous offering program (COP) under which the Partnership may issue new common units, representing limited partner interests, at market prices up to a maximum aggregate amount of $100 million. Through to December 31, 2013, the Partnership had sold an aggregate of 124,071 common units under the COP, generating net proceeds of approximately $4.9 million (including the Teekay LNG general partner's 2 percent proportionate capital contribution and net of offering costs). The Partnership did not sell any units under the COP during the fourth quarter of 2013.

As of December 31, 2013, the Partnership had total liquidity of $332.2 million (comprised of $139.5 million in cash and cash equivalents and $192.7 million in undrawn credit facilities).

Conference Call

The Partnership plans to host a conference call on Friday, February 21, 2014 at 11:00 a.m. (ET) to discuss the results for the fourth quarter and fiscal year of 2013. All unitholders and interested parties are invited to listen to the live conference call by choosing from the following options:


--  By dialing (866) 322-2356 or (416) 640-3405, if outside North America,
    and quoting conference ID code 2916125.
--  By accessing the webcast, which will be available on Teekay LNG's
    website at www.teekaylng.com (the archive will remain on the web site
    for a period of 30 days).

A supporting Fourth Quarter and Fiscal Year 2013 Earnings Presentation will also be available at www.teekaylng.com in advance of the conference call start time.

The conference call will be recorded and made available until Friday, February 28, 2014. This recording can be accessed following the live call by dialing (888) 203-1112 or (647) 436-0148, if outside North America, and entering access code 2916125.

About Teekay LNG Partners L.P.

Teekay LNG Partners is the world's second largest independent owner and operator of LNG carriers, providing LNG, LPG and crude oil marine transportation services primarily under long-term, fixed-rate charter contracts through its interests in 34 LNG carriers (including one LNG regasification unit and five newbuildings), 33 LPG/Multigas carriers (including five chartered-in LPG carriers and 12 newbuildings) and 10 conventional tankers. The Partnership's interests in these vessels range from 33 to 100 percent. Teekay LNG Partners L.P. is a publicly-traded master limited partnership (MLP) formed by Teekay Corporation (NYSE: TK) as part of its strategy to expand its operations in the LNG and LPG shipping sectors.

Teekay LNG Partners' common units trade on the New York Stock Exchange under the symbol "TGP".



----------------------------------------------------------------------------
                          TEEKAY LNG PARTNERS L.P.
         CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
          (in thousands of U.S. Dollars, except units outstanding)
----------------------------------------------------------------------------

                          Three Months Ended                Year Ended
                    December   September    December    December    December
                         31,         30,         31,         31,         31,
                        2013        2013        2012        2013        2012
                 (unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
----------------------------------------------------------------------------
VOYAGE REVENUES      104,858     100,692      98,236     399,276     392,900
----------------------------------------------------------------------------
OPERATING
 EXPENSES
Voyage expenses          869         373         327       2,857       1,772
Vessel operating
 expenses(1)          25,164      24,655      25,770      99,949      94,536
Depreciation and
 amortization         24,145      24,440      26,227      97,884     100,474
General and
 administrative
 (1)                   5,438       4,793       5,223      20,444      18,960
Loan loss
 (recovery)
 provision(2)        (3,804)       3,804           -           -           -
Restructuring
 charge(3)             1,786           -           -       1,786           -
Write down of
 vessels(4)                -           -      29,367           -      29,367
----------------------------------------------------------------------------
Total operating
 expenses             53,598      58,065      86,914     222,920     245,109
----------------------------------------------------------------------------
Income from
 vessel
 operations           51,260      42,627      11,322     176,356     147,791
----------------------------------------------------------------------------
OTHER ITEMS
Equity income(5)      28,602      28,831      29,634     123,282      78,866
Interest expense    (15,775)    (13,548)    (13,265)    (55,703)    (54,211)
Interest income        1,019         656         771       2,972       3,502
Realized and
 unrealized
 (loss) gain on
 derivative
 instruments(6)      (5,238)    (11,143)      14,373    (14,000)    (29,620)
Foreign exchange
 loss(7)             (5,188)    (16,068)     (6,255)    (15,832)     (8,244)
Other income -
 net                     214         306         615       1,396       1,683
----------------------------------------------------------------------------
                       3,634    (10,966)      25,873      42,115     (8,024)
----------------------------------------------------------------------------
Net income
 before tax
 expense              54,894      31,661      37,195     218,471     139,767
Income tax
 expense             (2,722)       (791)        (75)     (5,156)       (625)
----------------------------------------------------------------------------
Net income            52,172      30,870      37,120     213,315     139,142
----------------------------------------------------------------------------
Other
 comprehensive
 income (loss):
Unrealized net
 gain (loss) on
 qualifying cash
 flow hedging
 instruments in
 equity
 accounted joint
 ventures              1,680     (1,549)           -         131           -
----------------------------------------------------------------------------
Other
 comprehensive
 income (loss):        1,680     (1,549)           -         131           -
----------------------------------------------------------------------------
Comprehensive
 income               53,852      29,321      37,120     213,446     139,142
----------------------------------------------------------------------------
Non-controlling
 interest in net
 income                4,644       1,262       8,895      12,073      15,437
General
 Partner's
 interest in net
 income                7,338       5,784       5,440      25,365      21,303
Limited
 partners'
 interest in net
 income               40,190      23,824      22,785     175,877     102,402
Weighted-average
 number of
 common units
 outstanding:
- Basic           73,971,294  70,451,950  69,683,763  70,965,496  66,328,496
- Diluted         73,995,463  70,474,732  69,683,763  70,996,869  66,328,496
Total number of
 units
 outstanding at
 end of period    74,196,294  70,746,294  69,683,763  74,196,294  69,683,763
----------------------------------------------------------------------------

(1)  To more closely align the Partnership's Statement of Income and
     Comprehensive Income presentation to many of its peers, the cost of
     ship management services of $2.0 million and $7.8 million for the three
     months and year ended December 31, 2013, respectively, and $2.0 million
     for the three months ended September 30, 2013, have been included as
     vessel operating expenses. Prior to 2013, the Partnership included
     these amounts in general and administrative expenses. All such costs
     incurred in comparative periods have been reclassified from general and
     administrative expenses to vessel operating expenses to conform to the
     presentation adopted in the current period. The amounts reclassified
     were $2.1 million and $8.2 million for the three months and year ended
     December 31, 2012, respectively.
(2)  In early-2012, Teekay BLT Corporation (Teekay Tangguh Joint Venture),
     in which the Partnership has a 69 percent ownership interest, advanced
     amounts to P.T. Berlian Laju Tanker, the parent company of the non-
     controlling shareholder of the Teekay Tangguh Joint Venture, as an
     advance of dividends. In July 2012, P.T. Berlian Laju Tanker entered
     into a court-supervised restructuring in Indonesia in order to
     restructure its debts. In September 2013, the Teekay Tangguh Joint
     Venture recorded a $3.8 million loan loss provision relating to the
     advances to P.T. Berlian Laju Tanker, as it was probable, at that time,
     that the carrying value of the loan was impaired. However, during the
     fourth quarter of 2013, as P.T. Berlian Laju Tanker had sufficiently
     restructured its business, the Teekay Tangguh Joint Venture reassessed
     the probability of collectability of this advance and reversed the loan
     loss provision previously recorded in September 2013. On February 1,
     2014, the Teekay Tangguh Joint Venture declared dividends of $69.5
     million of which $14.4 million was used to offset the total advances to
     its non-controlling shareholder and P.T. Berlian Laju Tanker.
(3)  Restructuring charge primarily relates to seafarer severance payments
     upon sale of two conventional tankers under capital lease.
(4)  The carrying value of three of the Partnership's conventional Suezmax
     tankers (the Tenerife Spirit, Algeciras Spirit and Huelva Spirit) was
     written down during the three months and year ended December 31, 2012
     due to the expected termination of their time-charter contracts in 2013
     and 2014. The estimated fair value was based on a discounted cash flow
     approach and such estimates of cash flows were based on existing time-
     charter contracts, lease obligations and budgeted operating costs.
(5)  Equity income includes unrealized gains on derivative instruments and
     any ineffectiveness for any derivative instruments designated as hedges
     for accounting purposes as detailed in the table below:

                          Three Months Ended                Year Ended
                    December   September    December    December    December
                         31,         30,         31,         31,         31,
                        2013        2013        2012        2013        2012
                 -----------------------------------------------------------
Equity income         28,602      28,831      29,634     123,282      78,866
Proportionate
 share of
 unrealized
 gains on
 derivative
 instruments         (5,798)     (1,900)     (9,599)    (26,432)     (5,548)
Proportionate
 share of
 ineffective
 portion of
 hedge accounted
 interest rate
 swap                    514           -           -         514           -
                 -----------------------------------------------------------
Equity income
 excluding
 unrealized
 gains on
 derivative
 instruments and
 ineffective
 portion of
 hedge accounted
 interest rate
 swap                 23,318      26,931      20,035      97,364      73,318
                 -----------------------------------------------------------

(6)  The realized losses relate to the amounts the Partnership actually paid
     to settle derivative instruments and the unrealized (losses) gains
     relate to the change in fair value of such derivative instruments as
     detailed in the table below:

                          Three Months Ended                Year Ended
                    December   September    December    December    December
                         31,         30,         31,         31,         31,
                        2013        2013        2012        2013        2012
                 -----------------------------------------------------------
Realized
 (losses) gains
 relating to:
Interest rate
 swaps               (9,535)     (9,532)     (9,614)    (38,089)    (37,427)
Toledo Spirit
 time-charter
 derivative
 contract                641         903         945       1,521         907
                 -----------------------------------------------------------
                     (8,894)     (8,629)     (8,669)    (36,568)    (36,520)
                 -----------------------------------------------------------
Unrealized gains
 (losses)
 relating to:
Interest rate
 swaps                 2,556     (2,314)      21,442      18,868       5,200
Toledo Spirit
 time-charter
 derivative
 contract              1,100       (200)       1,600       3,700       1,700
                 -----------------------------------------------------------
                       3,656     (2,514)      23,042      22,568       6,900
                 -----------------------------------------------------------
Total realized
 and unrealized
 (losses) gains
 on derivative
 instruments         (5,238)    (11,143)      14,373    (14,000)    (29,620)
                 -----------------------------------------------------------
                 -----------------------------------------------------------

(7)  For accounting purposes, the Partnership is required to revalue all
     foreign currency-denominated monetary assets and liabilities based on
     the prevailing exchange rate at the end of each reporting period. This
     revaluation does not affect the Partnership's cash flows or the
     calculation of distributable cash flow, but results in the recognition
     of unrealized foreign currency translation gains or losses in the
     consolidated statements of income and comprehensive income.

     Foreign exchange loss includes realized (losses) gains relating to the
     amounts the Partnership received (paid) to settle the Partnership's
     non-designated cross currency swap that was entered into as an economic
     hedge in relation to the Partnership's Norwegian Kroner (NOK)-
     denominated unsecured bonds. The Partnership issued NOK 700 million and
     NOK 900 million of unsecured bonds in May 2012 and September 2013 that
     mature in 2017 and 2018, respectively. Foreign exchange loss also
     includes unrealized (losses) gains relating to the change in fair value
     of such derivative instruments, partially offset by unrealized gains
     (losses) on the revaluation of the NOK bonds as detailed in the table
     below:

                          Three Months Ended                Year Ended
                    December   September    December    December    December
                         31,         30,         31,         31,         31,
                        2013        2013        2012        2013        2012
                 -----------------------------------------------------------
Realized
 (losses) gains
 on cross-
 currency swaps        (216)       (113)         102       (338)         257
Unrealized
 (losses) gains
 on cross-
 currency swaps      (2,832)     (3,650)       4,516    (15,404)     (2,677)
Unrealized gains
 (losses) on
 revaluation of
 NOK bonds             2,512       (723)     (3,523)      12,257       (791)

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                          TEEKAY LNG PARTNERS L.P.
                         CONSOLIDATED BALANCE SHEETS
                       (in thousands of U.S. Dollars)
----------------------------------------------------------------------------

                            As at December  As at September   As at December
                                  31, 2013         30, 2013         31, 2012
                               (unaudited)      (unaudited)      (unaudited)
ASSETS
Current
Cash and cash equivalents          139,481          118,131          113,577
Restricted cash - current                -            2,996           34,160
Accounts receivable                 19,844           19,869           13,408
Prepaid expenses                     5,756            7,720            5,836
Current portion of
 derivative assets                  18,444           18,449           17,212
Current portion of net
 investments in direct
 financing leases                   16,441           11,747            6,656
Current portion of
 advances to joint
 venture partner                    14,364                -                -
Advances to affiliates               6,634            3,798           13,864
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Total current assets               220,964          182,710          204,713
----------------------------------------------------------------------------
Restricted cash - long-
 term                              497,298          496,351          494,429
Vessels and equipment
At cost, less accumulated
 depreciation                    1,253,763        1,260,588        1,286,957
Vessels under capital
 leases, at cost, less
 accumulated depreciation          571,692          607,026          624,059
Advances on newbuilding
 contracts                          97,207           77,854           38,624
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Total vessels and
 equipment                       1,922,662        1,945,468        1,949,640
----------------------------------------------------------------------------
Investment in and
 advances to equity
 accounted joint ventures          671,789          649,851          409,735
Net investments in direct
 financing leases                  683,254          538,964          396,730
Advances to joint venture
 partner                                 -           10,200           14,004
Other assets                        28,284           29,964           25,233
Derivative assets                   62,867           80,439          145,347
Intangible assets - net             96,845           99,769          109,984
Goodwill - liquefied gas
 segment                            35,631           35,631           35,631
----------------------------------------------------------------------------
Total assets                     4,219,594        4,069,347        3,785,446
----------------------------------------------------------------------------
----------------------------------------------------------------------------
LIABILITIES AND EQUITY
Current
Accounts payable                     1,741            2,260            2,178
Accrued liabilities                 45,796           37,013           38,134
Unearned revenue                    15,455           10,146           19,417
Current portion of long-
 term debt                          97,114           88,096           86,489
Current obligations under
 capital lease                      31,668          157,649           70,272
Current portion of
 derivative liabilities             76,980           72,024           48,046
Advances from affiliates            19,270           16,870           12,083
----------------------------------------------------------------------------
Total current liabilities          288,024          384,058          276,619
----------------------------------------------------------------------------
Long-term debt                   1,680,393        1,645,302        1,326,864
Long-term obligations
 under capital lease               566,661          472,621          567,302
Long-term unearned
 revenue                            36,689           36,521           38,570
Other long-term
 liabilities                        73,140           73,589           73,568
Derivative liabilities             130,903          154,261          248,249
----------------------------------------------------------------------------
Total liabilities                2,775,810        2,766,352        2,531,172
----------------------------------------------------------------------------
Equity
Limited partners                 1,338,133        1,206,043        1,165,634
General Partner                     52,526           48,502           47,346
Accumulated other
 comprehensive income
 (loss)                                131          (1,549)                -
----------------------------------------------------------------------------
Partners' equity                 1,390,790        1,252,996        1,212,980
Non-controlling interest
 (1)                                52,994           49,999           41,294
----------------------------------------------------------------------------
Total equity                     1,443,784        1,302,995        1,254,274
----------------------------------------------------------------------------
Total liabilities and
 total equity                    4,219,594        4,069,347        3,785,446
----------------------------------------------------------------------------
----------------------------------------------------------------------------

(1)  Non-controlling interest includes a 30 percent equity interest in the
     RasGas II project (which owns three LNG carriers), a 31 percent equity
     interest in the Tangguh Project (which owns two LNG carriers), a 1
     percent equity interest in two LNG carriers (Arctic Spirit and Polar
     Spirit), a 1 percent equity interest in the Excalibur joint venture
     (which owns one LNG carrier), a 1 percent equity interest in the five
     LPG/Multigas carriers that are chartered out to I.M. Skaugen ASA, and a
     1 percent equity interest in two LNG carriers chartered out to Awilco,
     which in each case represents the ownership interest not owned by the
     Partnership.

----------------------------------------------------------------------------
                          TEEKAY LNG PARTNERS L.P.
                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                       (in thousands of U.S. Dollars)
----------------------------------------------------------------------------

                                                Year Ended        Year Ended
                                              December 31,      December 31,
                                                      2013              2012
                                                         $                 $
                                        ------------------------------------
Cash and cash equivalents provided by
 (used for)
OPERATING ACTIVITIES
Net income                                         213,315           139,142
Non-cash items:
  Unrealized (gain) loss on derivative
   instruments                                    (22,568)           (6,900)
  Depreciation and amortization                     97,884           100,474
  Write down of vessels                                  -            29,367
  Unrealized foreign currency exchange
   gain                                             16,019             8,923
  Equity income, net of dividends
   received of $13,738 (2012 - $14,700)          (109,544)          (64,166)
  Amortization of deferred debt issuance
   costs and other                                   5,551              (27)
Change in operating assets and
 liabilities                                        10,078           (7,307)
Expenditures for dry docking                      (27,203)           (7,493)
----------------------------------------------------------------------------
Net operating cash flow                            183,532           192,013
----------------------------------------------------------------------------
FINANCING ACTIVITIES
Proceeds from issuance of long-term debt           719,300           500,335
Debt issuance costs                                (3,362)           (2,065)
Scheduled repayments of long-term debt            (86,609)          (84,666)
Prepayments of long-term debt                    (270,000)         (324,274)
Scheduled repayments of capital lease
 obligations                                      (10,315)          (10,161)
Proceeds from equity offerings, net of
 offering costs                                    190,520           182,316
Advances to joint venture partners and
 equity accounted joint ventures                  (16,822)           (3,600)
Decrease (increase) in restricted cash              27,761          (31,217)
Cash distributions paid                          (215,416)         (195,909)
Other                                                (373)             (385)
----------------------------------------------------------------------------
Net financing cash flow                            334,684            30,374
----------------------------------------------------------------------------
INVESTING ACTIVITIES
Purchase of equity accounted investments         (135,790)         (170,067)
Receipts from direct financing leases               11,641             6,155
Expenditures for vessels and equipment           (368,163)          (39,894)
Other                                                    -             1,369
----------------------------------------------------------------------------
Net investing cash flow                          (492,312)         (202,437)
----------------------------------------------------------------------------
Increase in cash and cash equivalents               25,904            19,950
Cash and cash equivalents, beginning of
 the year                                          113,577            93,627
----------------------------------------------------------------------------
Cash and cash equivalents, end of the
 year                                              139,481           113,577
----------------------------------------------------------------------------

----------------------------------------------------------------------------
                          TEEKAY LNG PARTNERS L.P.
              APPENDIX A - SPECIFIC ITEMS AFFECTING NET INCOME
                       (in thousands of U.S. Dollars)
----------------------------------------------------------------------------

Set forth below is a reconciliation of the Partnership's unaudited adjusted net income attributable to the partners, a non-GAAP financial measure, to net income attributable to the partners as determined in accordance with GAAP. The Partnership believes that, in addition to conventional measures prepared in accordance with GAAP, certain investors use this information to evaluate the Partnership's financial performance. The items below are also typically excluded by securities analysts in their published estimates of the Partnership's financial results. Adjusted net income attributable to the partners is intended to provide additional information and should not be considered a substitute for measures of performance prepared in accordance with GAAP.


----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                Three Months Ended          Year Ended
                                   December 31             December 31
                                    2013        2012        2013        2012
                             (unaudited) (unaudited) (unaudited) (unaudited)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net income - GAAP basis           52,172      37,120     213,315     139,142
Less:
  Net income attributable to
   non-controlling interest      (4,644)     (8,895)    (12,073)    (15,437)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net income attributable to
 the partners                     47,528      28,225     201,242     123,705
Add (subtract) specific
 items affecting net income:
  Unrealized foreign
   currency exchange
   losses(1)                       4,866       6,300      15,674       8,213
  Unrealized gains from
   derivative instruments(2)     (3,656)    (23,042)    (22,568)     (6,900)
  Unrealized gains from
   derivative instruments
   and other items from
   equity accounted
   investees(3)                  (5,284)     (8,849)    (25,918)     (3,721)
  Loan loss recovery(4)          (3,804)           -           -           -
  Restructuring charge(5)          1,786           -       1,786           -
  Income tax expense(6)            3,050           -       3,050           -
  Write down of vessels(7)             -      29,367           -      29,367
  Non-controlling interests'
   share of items above(8)         1,738       6,497       1,689       5,650
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Total adjustments                (1,304)      10,273    (26,287)      32,609
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Adjusted net income
 attributable to the
 partners                         46,224      38,498     174,955     156,314
----------------------------------------------------------------------------
----------------------------------------------------------------------------

(1)  Unrealized foreign exchange losses primarily relate to the
     Partnership's revaluation of all foreign currency-denominated monetary
     assets and liabilities based on the prevailing exchange rate at the end
     of each reporting period and unrealized loss on the cross-currency swap
     economically hedging the Partnership's NOK bond and exclude the
     realized gains relating to the cross currency swap for the NOK bonds.
(2)  Reflects the unrealized losses (gains) due to changes in the mark-to-
     market value of derivative instruments that are not designated as
     hedges for accounting purposes.
(3)  Reflects the unrealized (gains) losses due to changes in the mark-to-
     market value of derivative instruments that are not designated as
     hedges for accounting purposes and any ineffectiveness for any
     derivative instruments designated as hedges for accounting purposes
     within the Partnership's equity-accounted investments. In addition, it
     also reflects $1.1 million of acquisition-related costs during the year
     ended December 31, 2012 relating to the acquisition of the Malt LNG
     Carriers in February 2012 and a $0.8 million provision during the three
     months and year ended December 31, 2012 relating to a prior year
     customer claim from the Excalibur and Excelsior joint ventures.
(4)  In early-2012, Teekay BLT Corporation, in which the Partnership has a
     69 percent ownership interest, advanced amounts to P.T. Berlian Laju
     Tanker, the parent company of the non-controlling shareholder of the
     Teekay Tangguh Joint Venture, as an advance of dividends. In July 2012,
     P.T. Berlian Laju Tanker entered into a court-supervised restructuring
     in Indonesia in order to restructure its debts. In September 2013, the
     Teekay Tangguh Joint Venture recorded a $3.8 million loan loss
     provision relating to the advances to P.T. Berlian Laju Tanker, as it
     was probable, at that time, that the carrying value of the loan was
     impaired. However, during the fourth quarter of 2013, as P.T. Berlian
     Laju Tanker had sufficiently restructured its business, the Teekay
     Tangguh Joint Venture reassessed the probability of collectability of
     this advance and reversed the loan loss provision previously recorded
     in September 2013. On February 1, 2014, the Teekay Tangguh Joint
     Venture declared dividends of $69.5 million of which $14.4 million was
     used to offset the total advances to its non-controlling shareholder
     and P.T. Berlian Laju Tanker.
(5)  Restructuring charge primarily relates to seafarer severance payments
     upon sale of two conventional tankers under capital lease.
(6)  Reflects an annual adjustment to the Partnership's valuation allowance
     for its deferred tax assets.
(7)  The carrying value of three of the Partnership's conventional Suezmax
     tankers (the Tenerife Spirit, Algeciras Spirit and Huelva Spirit) was
     written down during the three months and year ended December 31, 2012
     due to the expected termination of their time-charter contracts in 2013
     and 2014. The estimated fair value was based on a discounted cash flow
     approach and such estimates of cash flows were based on existing time-
     charter contracts, lease obligations and budgeted operating costs.
(8)  Items affecting net income include items from the Partnership's wholly-
     owned subsidiaries, its consolidated non-wholly-owned subsidiaries and
     its proportionate share of items from equity accounted for investments.
     The specific items affecting net income are analyzed to determine
     whether any of the amounts originated from a consolidated non-wholly-
     owned subsidiary. Each amount that originates from a consolidated non-
     wholly-owned subsidiary is multiplied by the non-controlling interests'
     percentage share in this subsidiary to arrive at the non-controlling
     interests' share of the amount. The amount identified as "non-
     controlling interests' share of items listed above" in the table above
     is the cumulative amount of the non-controlling interests'
     proportionate share of items listed in the table.

----------------------------------------------------------------------------
                          TEEKAY LNG PARTNERS L.P.
         APPENDIX B - RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
                        DISTRIBUTABLE CASH FLOW (DCF)
                       (in thousands of U.S. Dollars)
----------------------------------------------------------------------------

Description of Non-GAAP Financial Measure - Distributable Cash Flow (DCF)

Distributable cash flow represents net income adjusted for depreciation and amortization expense, non-cash items, estimated maintenance capital expenditures, unrealized gains and losses from derivatives, distributions relating to equity financing of newbuilding installments, loan loss recovery, equity income, write down of vessels, adjustments for direct financing leases to a cash basis, deferred income taxes and foreign exchange related items. Maintenance capital expenditures represent those capital expenditures required to maintain over the long-term the operating capacity of, or the revenue generated by, the Partnership's capital assets. Distributable cash flow is a quantitative standard used in the publicly-traded partnership investment community to assist in evaluating a partnership's ability to make quarterly cash distributions. Distributable cash flow is not required by GAAP and should not be considered as an alternative to net income or any other indicator of the Partnership's performance required by GAAP. The table below reconciles distributable cash flow to net income.


----------------------------------------------------------------------------
                                              Three Months      Three Months
                                                     Ended             Ended
                                         December 31, 2013 December 31, 2012
                                               (unaudited)       (unaudited)
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Net income:                                         52,172            37,120
Add:
  Depreciation and amortization                     24,145            26,227
  Partnership's share of equity
   accounted joint ventures' DCF
  before estimated maintenance and
   capital expenditures                             37,944            27,748
  Write down of vessels                                  -            29,367
  Unrealized foreign exchange loss                   4,866             6,300
  Distributions relating to equity
   financing of newbuildings                         1,261                 -
  Direct finance lease payments received
   in excess of revenue recognized                   3,950             1,475
  Deferred income tax                                3,050               504
Less:
  Loan loss recovery                               (3,804)                 -
  Unrealized loss on derivatives and
   other non-cash items                            (6,689)          (27,346)
  Estimated maintenance capital
   expenditures                                   (20,282)          (14,345)
  Equity income                                   (28,602)          (29,634)
----------------------------------------------------------------------------
Distributable Cash Flow before Non-
 controlling interest                               68,011            57,416
Non-controlling interests' share of DCF
 before estimated maintenance capital
 expenditures                                      (4,625)           (3,817)
----------------------------------------------------------------------------
Distributable Cash Flow                             63,386            53,599
----------------------------------------------------------------------------

----------------------------------------------------------------------------
                          TEEKAY LNG PARTNERS L.P.
         APPENDIX C - RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
                             NET VOYAGE REVENUES
                       (in thousands of U.S. Dollars)
----------------------------------------------------------------------------

Description of Non-GAAP Financial Measure - Net Voyage Revenues

Net voyage revenues represents voyage revenues less voyage expenses, which comprise all expenses relating to certain voyages, including bunker fuel expenses, port fees, canal tolls and brokerage commissions. Net voyage revenues is included because certain investors use this data to measure the financial performance of shipping companies. Net voyage revenues is not required by GAAP and should not be considered as an alternative to voyage revenues or any other indicator of the Partnership's performance required by GAAP.


                                   Three Months Ended December 31, 2013
                                               (unaudited)

                              Liquefied Gas     Conventional
                                     Segment  Tanker Segment           Total
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Voyage revenues                       77,166          27,692         104,858
Voyage expenses                            -             869             869
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net voyage revenues                   77,166          26,823         103,989
----------------------------------------------------------------------------
----------------------------------------------------------------------------

                                   Three Months Ended December 31, 2012
                                               (unaudited)

                              Liquefied Gas     Conventional
                                     Segment  Tanker Segment           Total
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Voyage revenues                       70,489          27,747          98,236
Voyage (recoveries) expenses            (56)             383             327
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net voyage revenues                   70,545          27,364          97,909
----------------------------------------------------------------------------
----------------------------------------------------------------------------

----------------------------------------------------------------------------
                          TEEKAY LNG PARTNERS L.P.
                APPENDIX D - SUPPLEMENTAL SEGMENT INFORMATION
                       (in thousands of U.S. Dollars)
----------------------------------------------------------------------------

                                   Three Months Ended December 31, 2013
                                                (unaudited)
                                                   Conventional
                               Liquefied Gas             Tanker
                                     Segment            Segment        Total
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net voyage revenues (See
 Appendix C)                          77,166             26,823      103,989
Vessel operating expenses             14,106             11,058       25,164
Depreciation and amortization         17,916              6,229       24,145
General and administrative             3,764              1,674        5,438
Loan loss recovery                   (3,804)                  -      (3,804)
Restructuring charge                       -              1,786        1,786
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Income from vessel operations         45,184              6,076       51,260
----------------------------------------------------------------------------
----------------------------------------------------------------------------



                                   Three Months Ended December 31, 2012
                                                (unaudited)
                                                   Conventional
                               Liquefied Gas             Tanker
                                     Segment            Segment        Total
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net voyage revenues (See
 Appendix C)                          70,545             27,364       97,909
Vessel operating expenses             13,846             11,924       25,770
Depreciation and amortization         17,359              8,868       26,227
General and administrative             3,889              1,334        5,223
Write down of vessels                      -             29,367       29,367
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Income from vessel operations         35,451           (24,129)       11,322
----------------------------------------------------------------------------
----------------------------------------------------------------------------

----------------------------------------------------------------------------
                          TEEKAY LNG PARTNERS L.P.
         APPENDIX E - RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
                      CASH FLOW FROM VESSEL OPERATIONS
                          FROM CONSOLIDATED VESSELS
                       (in thousands of U.S. Dollars)
----------------------------------------------------------------------------

Description of Non-GAAP Financial Measure - Cash Flow from Vessel Operations from Consolidated Vessels

Cash flow from vessel operations from consolidated vessels represents income from vessel operations before (a) depreciation and amortization expense, (b) amortization of in-process revenue contracts included in voyage revenues, (c) loan loss recovery, (d) write down of vessels and includes (e) adjustments for direct financing leases and two Suezmax tankers to a cash basis. The Partnership's direct financing leases for the periods indicated relates to the Partnership's 69 percent interest in two LNG carriers, the Tangguh Sago and Tangguh Hiri, and the two LNG carriers acquired from Awilco in September and November 2013. The Partnership's cash flow from vessel operations from consolidated vessels does not include the Partnership's cash flow from vessel operations from its equity accounted joint ventures. Cash flow from vessel operations is included because certain investors use cash flow from vessel operations to measure a company's financial performance, and to highlight this measure for the Partnership's consolidated vessels. Cash flow from vessel operations from consolidated vessels is not required by GAAP and should not be considered as an alternative to net income or any other indicator of the Partnership's performance required by GAAP.


                                      Three Months Ended December 31, 2013
                                                   (unaudited)
                                       Liquefied       Conventional
                                     Gas Segment     Tanker Segment    Total
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Income from vessel operations (See
 Appendix D)                              45,184              6,076   51,260
Depreciation and amortization             17,916              6,229   24,145
Amortization of in-process revenue
 contracts included in voyage
 revenues                                      -              (278)    (278)
Direct finance lease payments
 received in excess of revenue
 recognized                                3,950                  -    3,950
Loan loss recovery(1)                    (3,804)                  -  (3,804)
Realized gain on Toledo Spirit
 derivative contract                           -                641      641
Cash flow adjustment for two
 Suezmax tankers(2)                            -            (1,704)  (1,704)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Cash flow from vessel operations
 from consolidated vessels                63,246             10,964   74,210
----------------------------------------------------------------------------
----------------------------------------------------------------------------

                                      Three Months Ended December 31, 2012
                                                   (unaudited)
                                       Liquefied       Conventional
                                     Gas Segment     Tanker Segment    Total
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Income from vessel operations (See
 Appendix D)                              35,451           (24,129)   11,322
Depreciation and amortization             17,359              8,868   26,227
Write down of vessels                          -             29,367   29,367
Amortization of in-process revenue
 contracts included in voyage
 revenues                                      -              (278)    (278)
Direct finance lease payments
 received in excess of revenue
 recognized                                1,475                  -    1,475
Realized gain on Toledo Spirit
 derivative contract                           -                945      945
Cash flow adjustment for two
 Suezmax tankers(2)                            -            (1,704)  (1,704)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Cash flow from vessel operations
 from consolidated vessels                54,285             13,069   67,354
----------------------------------------------------------------------------
----------------------------------------------------------------------------

(1)  In early-2012, Teekay BLT Corporation, in which the Partnership has a
     69 percent ownership interest, advanced amounts to P.T. Berlian Laju
     Tanker, the parent company of the non-controlling shareholder of the
     Teekay Tangguh Joint Venture, as an advance of dividends. In July 2012,
     P.T. Berlian Laju Tanker entered into a court-supervised restructuring
     in Indonesia in order to restructure its debts. In September 2013, the
     Teekay Tangguh Joint Venture recorded a $3.8 million loan loss
     provision relating to the advances to P.T. Berlian Laju Tanker, as it
     was probable, at that time, that the carrying value of the loan was
     impaired. However, during the fourth quarter of 2013, as P.T. Berlian
     Laju Tanker had sufficiently restructured its business, the Teekay
     Tangguh Joint Venture reassessed the probability of collectability of
     this advance and reversed the loan loss provision previously recorded
     in September 2013. On February 1, 2014, the Teekay Tangguh Joint
     Venture declared dividends of $69.5 million of which $14.4 million was
     used to offset the total advances to its non-controlling shareholder
     and P.T. Berlian Laju Tanker.
(2)  The Partnership's charter contracts for two of its Suezmax tankers, the
     Bermuda Spirit and Hamilton Spirit, were amended in 2012, which had the
     effect of reducing the daily charter rates by $12,000 per day for a
     duration of 24 months commencing October 1, 2012. However, during this
     period, if Suezmax spot tanker rates exceed the amended rates, the
     charterer will pay the Partnership the excess amount up to a maximum of
     the original daily charter rate. The cash impact of the change in hire
     rates is not fully reflected in the Partnership's statements of income
     and comprehensive income as the change in the lease payments is being
     recognized on a straight-line basis over the term of the lease.

----------------------------------------------------------------------------
                          TEEKAY LNG PARTNERS L.P.
         APPENDIX F - RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
       CASH FLOW FROM VESSEL OPERATIONS FROM EQUITY ACCOUNTED VESSELS
                       (in thousands of U.S. Dollars)
----------------------------------------------------------------------------

Description of Non-GAAP Financial Measure - Cash Flow from Vessel Operations from Equity Accounted Vessels

Cash flow from vessel operations from equity accounted vessels represents income from vessel operations before (a) depreciation and amortization expense, (b) amortization of in-process revenue contracts, and includes (c) adjustments for direct financing leases to a cash basis. Cash flow from vessel operations from equity accounted vessels is included because certain investors use cash flow from vessel operations to measure a company's financial performance, and to highlight this measure for the Partnership's equity accounted joint ventures. Cash flow from vessel operations from equity-accounted vessels is not required by GAAP and should not be considered as an alternative to equity income or any other indicator of the Partnership's performance required by GAAP.


                           Three Months Ended         Three Months Ended
                            December 31, 2013          December 31, 2012
                               (unaudited)                (unaudited)
                                At  Partnership's          At  Partnership's
                              100%     Portion(1)        100%     Portion(1)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Voyage revenues            171,275         79,803     113,881         51,265
Vessel and other
 operating expenses         57,219         27,050      24,607         11,159
Depreciation and
 amortization               28,004         14,140      16,653          8,583
----------------------------------------------------------------------------
Income from vessel
 operations of equity
 accounted vessels          86,052         38,613      72,621         31,523
----------------------------------------------------------------------------
Interest expense - net    (22,638)       (10,609)    (15,482)        (6,797)
Realized and
 unrealized gain
 (loss) on derivative
 instruments                 1,969            614      13,435          4,431
Other (expense) income
 - net                       (477)           (16)         286            477
----------------------------------------------------------------------------
Other items               (21,146)       (10,011)     (1,761)        (1,889)
----------------------------------------------------------------------------

Net income / equity
 income of equity
 accounted vessels          64,906         28,602      70,860         29,634

----------------------------------------------------------------------------
----------------------------------------------------------------------------


----------------------------------------------------------------------------
----------------------------------------------------------------------------
Income from vessel
 operations                 86,052         38,613      72,621         31,523
Depreciation and
 amortization               28,004         14,140      16,653          8,583
Direct finance lease
 payments received in
 excess of revenue
 recognized                  7,472          2,711       7,466          2,731
Amortization of in-
 process revenue
 contracts                 (5,606)        (2,838)     (8,350)        (4,339)
----------------------------------------------------------------------------
Cash flow from vessel
 operations from
 equity accounted
 vessels                   115,922         52,626      88,390         38,498
----------------------------------------------------------------------------
----------------------------------------------------------------------------

(1)  The Partnership's equity accounted investments for the three months
     ended December 31, 2013 and 2012 include the Partnership's 40 percent
     interest in Teekay Nakilat (III) Corporation, which owns four LNG
     carriers; the Partnership's 50 percent interest in the Excalibur and
     Excelsior joint ventures, which owns one LNG carrier and one
     regasification unit, respectively; the Partnership's 33 percent
     interest in four LNG carriers servicing the Angola LNG Project; and the
     Partnership's 52 percent interest in Malt LNG Netherlands Holdings
     B.V., the joint venture between the Partnership and Marubeni
     Corporation, which owns six LNG carriers. The Partnership's equity
     accounted investments for the three months ended December 31, 2013 also
     includes the Partnership's 50 percent interest in Exmar LPG BVBA, the
     joint venture between the Partnership and Exmar, commencing in February
     2013, which owns and charters-in 28 vessels in the LPG carrier segment,
     including 12 newbuildings.

----------------------------------------------------------------------------
                         FORWARD LOOKING STATEMENTS
----------------------------------------------------------------------------

This release contains forward-looking statements (as defined in Section 21E of the Securities Exchange Act of 1934, as amended) which reflect management's current views with respect to certain future events and performance, including statements regarding: future growth opportunities, including the Partnership's ability to successfully bid for new LNG shipping and floating regasification projects; the Partnership's ability to secure charter contract employment and long-term financing for the three currently unchartered MEGI LNG carrier newbuilding vessels ordered in July and November 2013; expected fuel-efficiency and emission levels associated with the MEGI engines to be installed in the Partnership's five LNG newbuildings to be built by DSME; the expected delivery dates for the Partnership's newbuilding vessels and, if applicable, commencing their time charter contracts; the average remaining contract length on the Partnership's LNG fleet; the Partnership's exposure to spot and short-term LNG shipping rates; and LNG shipping market fundamentals, including the short-term demand for LNG carrier capacity, future growth in global LNG supply, and the balance of supply and demand of shipping capacity and shipping charter rates in the sector.

The following factors are among those that could cause actual results to differ materially from the forward-looking statements, which involve risks and uncertainties, and that should be considered in evaluating any such statement: shipyard construction delays or cost overruns; availability of suitable LNG shipping, LPG shipping, floating storage and regasification and other growth project opportunities; changes in production of LNG or LPG, either generally or in particular regions; changes in trading patterns or timing of start-up of new LNG liquefaction and regasification projects significantly affecting overall vessel tonnage requirements; competitive dynamics in bidding for potential LNG, LPG or floating regasification projects; the Partnership's ability to secure new contracts through bidding on project tenders; the Partnership's ability to secure charter contracts for the three currently unchartered MEGI LNG carrier newbuildings; changes in applicable industry laws and regulations and the timing of implementation of new laws and regulations; the potential for early termination of long-term contracts of existing vessels in the Teekay LNG fleet; the inability of charterers to make future charter payments; the inability of the Partnership to renew or replace long-term contracts on existing vessels or attain fixed-rate long-term contracts for newbuilding vessels; the Partnership's ability to raise financing for its existing newbuildings or to purchase additional vessels or to pursue other projects; actual performance of the MEGI engines; and other factors discussed in Teekay LNG Partners' filings from time to time with the SEC (SCUR), including its Report on Form 20-F for the fiscal year ended December 31, 2012. The Partnership expressly disclaims any obligation to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Partnership's expectations with respect thereto or any change in events, conditions or circumstances on which any such statement is based.

Contacts:
For Investor Relations enquiries contact:
Teekay LNG Partners L.P.
Ryan Hamilton
+1 (604) 609-6442
www.teekaylng.com

Source: Teekay LNG Partners L.P.

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