Teekay (TK) Will Reduce Qtr. Dividend by 90%

Teekay (NYSE: TK) announced that its Board of Directors has approved a plan to reduce the Company's quarterly dividend to $0.055 per share, down from $0.55 per share in the third quarter of 2015, commencing with the fourth quarter of 2015 dividend payable in February 2016. The reduction in the Company's dividend amount is in response to announcements by the general partners of Teekay Offshore Partners L.P. (Teekay Offshore) and Teekay LNG Partners L.P. (Teekay LNG) that they plan to reduce their respective quarterly cash distribution amounts. Teekay Offshore and Teekay LNG now expect to use a significant portion of their internally generated cash flow to fund the equity capital requirements of their future profitable growth projects and reduce debt levels, eliminating their need to access the equity capital markets for the foreseeable future.

"Teekay Corporation is committed to being a supportive Sponsor of our two master limited partnerships," commented Peter Evensen, Teekay's President and Chief Executive Officer. "Although it is painful in the short-term to have to temporarily reduce Teekay Corporation's dividend, management and our Board of Directors believe Teekay and its shareholders will achieve greater long-term value creation by focusing on enhancing the value of our ownership interests in Teekay Offshore and Teekay LNG and being in a better position to support their continued growth and distributable cash flow generation."

Mr. Evensen added, "The underlying businesses of our two master limited partnerships remain strong, in stark contrast to the current weakness in the oil price and energy capital markets. Cash flows generated by both Teekay Offshore and Teekay LNG, which largely underpin Teekay Corporation's dividend payment, remain stable and growing, supported by large and well-diversified portfolios of fee-based contracts with blue-chip counterparties. However, Teekay Offshore and Teekay LNG require capital to fund their growth and there is currently a dislocation in the capital markets relative to the underlying stability of our MLPs' businesses. As a result, their cost of equity has increased to the point where it is currently not an economically attractive source of growth capital."

"Based on the upcoming capital requirements for Teekay Offshore's and Teekay LNG's committed growth projects and bond maturities, coupled with the uncertainty of how long it will take for the energy and capital markets to normalize, we believe the distribution reductions announced today are in the best interests of long-term investors, including shareholders of Teekay," Mr. Evensen continued. "As a result of their announced distribution reductions, our MLPs will now be able to fund their future capital commitments and reduce their debt levels with internally generated cash flow rather than permanently dilute their unitholders through the issuance of expensive equity. In addition, we believe the retention of additional cash flow will further improve Teekay Offshore's and Teekay LNG's long-term financial position and preserve the long-term growth potential of each entity."

Mr. Evensen concluded, "The effect of the distribution reductions of our two MLPs is that Teekay Corporation will temporarily forego its near-term GP cash flows. However, we fully expect the actions taken today will result in higher distributable cash flow per unit in each of our MLPs, as their committed growth projects deliver, and improve their capacity to increase distributions in the future, which in turn is expected to enhance the value of our GP interests in the longer-term."

The Company and its two master limited partnerships plan to host a joint conference call on Thursday, December 17, 2015 at 8:45 a.m. (ET) to discuss this announcement. All shareholders and interested parties are invited to listen to the live conference call by choosing from the following options:

--  By dialing 1-800-524-8950 or 1-416-260-0113, if outside North America,

    and quoting conference ID code 4020024.

--  By accessing the webcast, which will be available on Teekay's website

    www.teekay.com (the archive will remain on the website for a period of

    30 days).

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