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1.	Basis of Presentation

2.	Recent Accounting Pronouncements

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The Company previously presented the net allocation for its vessels participating in revenue sharing arrangements as net pool revenues. The Company has determined that it is the principal in voyages its vessels perform that are included in the revenue sharing arrangements. As such, the revenue from those voyages is presented in voyage charter revenues and the difference between this amount and the Company's net allocation from the revenue sharing arrangement is presented as voyage expenses. This had the effect of increasing voyage charter revenues and voyage expenses for the three months ended March 31, 2018 by $61.3 million. There was no cumulative impact to opening equity as at January 1, 2018.

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The Company previously presented all accrued revenue as a component of accounts receivable. The Company has determined that if the right to such consideration is conditioned upon something other than the passage of time, such accrued revenue should be presented apart from accounts receivable. This had the effect of increasing other current assets and decreasing accounts receivable by $1.3 million at March 31, 2018.

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3.	Revenue

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(1)

Prior to the adoption of ASU 2014-09, the Company presented the net allocation for its vessels participating in revenue sharing arrangements as net pool revenues. The Company has determined that it is the principal in voyages its vessels perform that are included in the revenue sharing arrangements. As such, the revenue from those voyages is presented in voyage charter revenues and the difference between this amount and the Company's net allocation from the revenue sharing arrangement is presented as voyage expenses. The adoption of ASU 2014-09 had the impact of increasing voyage charter revenues and voyage expenses for the three months ended March 31, 2018 by $61.3 million.

4.	Acquisition of Entities under Common Control

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5.	Segment Reporting

(1)	The ship-to-ship transfer segment provides lightering support services to the conventional tanker segment for full service lightering operations and the pricing for such services was based on actual costs incurred per voyage.

(2)	Revenues, net of the inter-segment adjustment, earned from the ship-to-ship transfer segment are reflected in Other Revenues in the Company's consolidated statements of (loss) income.

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

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6.	Investments in and Advances to Equity Accounted Investments

a.

The Company has a joint venture arrangement with Wah Kwong Maritime Transport Holdings Limited (or Wah Kwong), whereby the Company has a 50% economic interest in the High-Q joint venture, which is jointly controlled by the Company and Wah Kwong. The High-Q joint venture owns one Very Large Crude Carrier (or VLCC), which is trading on a fixed time charter-out contract expiring in the second quarter of 2018. Under this contract, the vessel earns a fixed daily rate and an additional amount if the daily rate of any sub-charter earned exceeds a certain threshold.

b.

In January 2014, the Company and Teekay formed TIL, which owned and operated conventional tankers. The Company purchased 2.5 million shares of TIL common stock for $25.0 million and received a stock purchase warrant entitling it to purchase up to 750,000 additional shares of common stock of TIL (see note 9). The Company also received one preferred share which entitled the Company to elect one board member of TIL. The preferred share did not give the Company a right to any dividends or distributions of TIL.

c.

On May 31, 2017, the Company purchased from Teekay the remaining 50% interest in TTOL, which owns conventional tanker commercial management and technical management operations, including direct ownership in four commercially managed revenue sharing arrangements (or the RSAs), for $39.0 million, which included $13.1 million for assumed working capital (see note 4). Prior to the May 31, 2017 purchase, the Company equity accounted for its initial 50% interest in TTOL.

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7.	Long-Term Debt

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8.	Leases

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9.	Derivative Instruments

(1)	Excludes the margin the Company pays on its variable-rate debt, which, as of March 31, 2018, ranged from 0.30% to 2.75%.

(2)	Notional amount reduces quarterly.

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10.	Other Expense

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11.	Financial Instruments

a.	Fair Value Measurements

(1)	The fair value of the Company’s interest rate swap agreements at March 31, 2018 and December 31, 2017 excludes accrued interest expense which is recorded in accrued liabilities on the unaudited consolidated balance sheets.

(2)

The advances to equity accounted investments together with the Company’s investments in the equity accounted investments form the net aggregate carrying value of the Company’s interests in the equity accounted investments in these consolidated financial statements. The fair values of the individual components of such aggregate interests as at March 31, 2018 and December 31, 2017 were not determinable.

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b.	Financing Receivables

12.	Capital Stock and Stock-Based Compensation

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13.	Related Party Transactions

a.

Teekay, and its wholly-owned subsidiary and the Company's manager, Teekay Tankers Management Services Ltd. (or the Manager), provide commercial, technical, strategic and administrative services to the Company pursuant to a long-term management agreement (the Management Agreement). In addition, the Manager has subcontracted with TTOL and its affiliates to provide certain commercial and technical services to the Company, except for certain vessels acquired in the merger with TIL as they are technically managed by a third-party. Certain of the Company’s vessels participate in revenue sharing arrangements (or RSAs) managed by TTOL (or the Pool Manager). Amounts received and paid by the Company for such related party transactions for the periods indicated were as follows:

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(i)	The Company’s share of TTOL’s fees for RSAs are reflected as a reduction to net pool revenues from affiliates on the Company’s consolidated statements of (loss) income. The Company acquired the remaining 50% interest in TTOL on May 31, 2017 (notes 4 and 6(c)). Subsequent to the acquisition, the Company's share of the TTOL's fees has been eliminated.

(ii)	The Manager’s commercial management fees for vessels on time-charter out contracts and spot-traded vessels are not included in the RSAs, which are reflected in voyage expenses on the Company’s consolidated statements of (loss) income. Subsequent to the Company's acquisition of the remaining 50% interest in TTOL, the Company's share of the Manager's commercial management fees has been eliminated.

(iii)	The cost of ship management services provided by the Manager has been presented as vessel operating expenses on the Company's consolidated statements of (loss) income.

(iv)

The Manager's strategic and administrative service fees have been presented in general and administrative expenses on the Company's consolidated statements of (loss) income. The Company's executive officers are employees of Teekay or subsidiaries thereof, and their compensation (other than any awards under the Company's long-term incentive plan described in note 12) is set and paid by Teekay or such other subsidiaries. The Company reimburses Teekay for time spent by its executive officers on the Company's management matters through the strategic portion of the management fee.

(v)	The Company pays secondment fees for services provided by some employees of Teekay. Secondment fees have been presented in general and administrative expenses on the Company's consolidated statements of (loss) income.

(vi)

The Company's ship-to-ship transfer business has an operational and maintenance subcontract with Teekay LNG Bahrain Operations L.L.C., an entity wholly-owned by Teekay LNG Partners L.P. (or TGP) (which is controlled by Teekay), for the Bahrain LNG Import Terminal (or the Terminal). The Terminal is owned by Bahrain LNG W.I.L., a joint venture for which Teekay LNG Operating L.L.C., an entity wholly-owned by TGP, has a 30% interest. The Company's ship-to-ship transfer business also has a services agreement with Teekay Shipping Ltd., an entity wholly-owned by Teekay, to provide certain LNG services.

(vii)	The Company receives reimbursements from Teekay who subcontracts technical management services from the Manager. These reimbursements have been presented in general and administrative expenses on the Company's consolidated statements of (loss) income.

(viii)	The Company recorded revenue relating to TTOL's administration of certain RSAs and provision of certain commercial services to participants in the arrangements. The Company also recorded revenue of $1.1 million for the three months ended March 31, 2017 associated with the Entities under Common Control.

b.

The Manager and other subsidiaries of Teekay collect revenues and remit payments for expenses incurred by the Company’s vessels. Such amounts, which are presented on the Company’s consolidated balance sheets in "due from affiliates" or "due to affiliates," as applicable, are without interest or stated terms of repayment. The amounts owing from the RSAs for monthly distributions are reflected in the consolidated balance sheets as pool receivable from affiliates, are without interest and are repayable upon the terms contained within the applicable pool agreement. The Company had advanced $51.6 million and $45.1 million as at March 31, 2018 and December 31, 2017, respectively, to the RSAs for working capital purposes. These amounts, which are reflected in the consolidated balance sheets in due from affiliates, are without interest and are repayable when applicable vessels leave the RSAs.

c.	Pursuant to a service agreement with the Teekay Aframax RSA, from time to time the Company may hire vessels to perform full service lightering services. In the three months ended March 31, 2018 and March 31, 2017, the Company recognized $8.4 million and $5.0

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14.	Sales of Vessels

15.	(Loss) Earnings Per Share

(1)	The weighted-average number of common shares outstanding for periods to May 2017 has been retroactively adjusted to include approximately 13.8 million shares of the Company's Class B common stock issued to Teekay as consideration for the acquisition of 50% of TTOL in May 2017.

16.	Supplemental Cash Flow Information

17.	Liquidity

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18.	Acquisition of Tanker Investments Ltd.

19.	Subsequent Events

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1.	Long Range 2 (or LR2) product tankers.

2.	VLCC owned through a 50/50 joint venture.

3.	Ten time charter-out contracts are scheduled to expire in 2018 and one in 2019.

4.	Three Aframax tankers are currently time-chartered in for initial periods ranging from 45 days to 60 months, with two of these periods ending in 2018 and one in 2021; one of these contracts includes an option to extend at an escalating rate.

5.

A total of 43 of our owned vessels and vessels related to capital leases, and one of our in-chartered vessels operated in the spot market in revenue sharing arrangements (or RSAs) at March 31, 2018. As at March 31, 2018, the three vessel class RSAs in which we participate were comprised of a total of 31 Suezmax tankers, 29 modern Aframax tankers and nine LR2 product tankers (of which five LR2 product tankers are cross-trading in the Aframax RSA). Each RSA we participate in also includes vessels owned by other revenue sharing members.

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Our financial results reflect the results of adopting new accounting standards. In May 2014, the Financial Accounting Standards Board (or FASB) issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers (or ASU 2014-09) (please read "Item 1 - Financial Statements: Note 2 - Recent Accounting Pronouncements"). We adopted ASU 2014-09 as a cumulative-effect adjustment as of January 1, 2018, and as a result comparative periods do not reflect the effect of this new standard. We previously presented the net allocation for our vessels participating in RSAs as revenues. We had determined that we are the principal in voyages our vessels perform that are included in the RSAs. As such, the revenue from those voyages will be presented in voyage revenues and the difference between this amount and our net allocation from the RSA will be presented as voyage expenses. This had the effect of increasing revenues and voyage expenses for the three months ended March 31, 2018 by $61.3 million.

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•	a decrease of $18.1 million primarily due to lower average realized spot TCE rates earned by our Suezmax, Aframax and LR2 product tankers;

•	a net decrease of $5.4 million primarily due to the expiry of time-charter out contracts for various vessels which subsequently traded on spot voyages at lower average realized rates; and

•	a decrease of $1.5 million primarily due to lower commissions and management fees earned from the management of external vessels;

•	a net increase of $5.8 million primarily due to losses on sale of vessels during 2017 and lower operating expenditures in 2018 as a result of the sales of the Ganges Spirit, Yamuna Spirit, Kyeema Spirit, Kareela Spirit and Kanata Spirit.

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(1)	Includes $3.2 million and $3.0 million of voyage expenses for the three months ended March 31, 2018 and 2017, respectively, relating to lightering support services which the STS transfer segment provided to the conventional tanker segment for full service lightering operations.

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(1)	The impact of adopting ASU 2014-09 has increased revenues and voyage expenses for the three months ended March 31, 2018 by $61.3 million. Please refer to Item 1 – Financial Statements: Note 2 – Recent Accounting Pronouncements for further details.

(2)	Includes $3.7 million of revenue earned from the vessels that were internally chartered from the RSAs to perform full service lightering. Excludes $1.4 million of commissions and management fees earned by TTOL from the management of external vessels trading in the RSAs and $0.7 million of bunker rebates for the three months ended March 31, 2018.

(3)	Includes $3.2 million of inter-segment voyage expenses relating to lightering support services provided by the STS transfer segment to the full service lightering business for the three months ended March 31, 2018 and $3.7 million of voyage expenses incurred by the vessels that were internally chartered from the RSA to perform full service lightering.

(4)	Average TCE per Revenue Day excludes off-hire bunker and other expenses included as part of the adjustments.

(5)	Includes $27.8 million of revenues and $21.4 million of voyage expenses related to the full service lightering business, which include $3.2 million of inter-segment voyage expenses referenced in note 2 above for the three months ended March 31, 2018.

(1)	Excludes $2.8 million of commissions and management fees earned by TTOL from the management of external vessels trading in the RSAs and $0.8 million of bunker rebates and $0.1 million of revenue earned from a profit-sharing agreement for the three months ended March 31, 2017.

(2)	Includes $3.0 million of inter-segment voyage expenses relating to lightering support services provided by the STS transfer segment to the full service lightering business for the three months ended March 31, 2017.

(3)	Average TCE per Revenue Day excludes off-hire bunker and other expenses included as part of the adjustments.

(4)	Includes $27.2 million of revenues and $20.4 million of voyage expenses related to the full service lightering business, which include $3.0 million of inter-segment voyage expenses referenced in note 2 above for the three months ended March 31, 2017.

•	a decrease of $18.1 million for the three months ended March 31, 2018 due to lower average realized rates earned by our Suezmax, Aframax and LR2 tankers;

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•	a net decrease of $5.4 million for the three months ended March 31, 2018 due to the expiry of time-charter out contracts for various vessels which subsequently traded on spot voyages at lower average realized rates;

•	a decrease of $1.5 million for the three months ended March 31, 2018 due to lower commissions and management fees earned by TTOL from the management of fewer external vessels trading in the RSAs in the three months ended March 31, 2018 compared to the same period in the prior year; and

•	a decrease of $0.5 million for the three months ended March 31, 2018 due to a decrease in the number of revenue days related to our full service lightering operations;

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a net increase of $8.7 million for the three months ended March 31, 2018 primarily due to the addition of 18 vessels that we acquired as part of the TIL merger which was completed in the fourth quarter of 2017 and the addition of three Aframax in-chartered tankers that were delivered to us in the first quarter of 2018, partially offset by the redeliveries of various in-chartered tankers to their owners at various times during 2017 and the sale of one Suezmax tanker and three older Aframax tankers in 2017.

•	an increase of $14.2 million for the three months ended March 31, 2018, primarily due to the addition of 10 Suezmax tankers, six Aframax tankers and two LR2 product tankers which we acquired in the merger with TIL;

•	a net decrease of $3.2 million for the three months ended March 31, 2018, primarily due to the sale of three Aframax tankers and two Suezmax tankers during 2017; and

•	a decrease of $1.1 million for the three months ended March 31, 2018, due to lower transition costs which were incurred in 2017 relating to three vessels that changed from external to in-house ship management.

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(1)	Includes $3.2 million and $3.0 million of revenues for the three months ended March 31, 2018 and March 31, 2017, respectively, relating to lightering support services which the STS transfer segment provided to the conventional tanker segment for full service lightering operations.

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•	a net decrease of $24.7 million in operating earnings, primarily as a result of lower realized average spot tanker rates earned, the expiry of time-chartered out contracts for various vessels which subsequently traded on spot voyages at lower average realized rates and the sale of three Aframax tankers and one Suezmax tanker in 2017; and

•	an increase of $4.5 million in operating cash outflows relating to higher expenditures on dry-docking activities during the three months ended March 31, 2018, compared to the same period in 2017;

•	a decrease of $7.9 million in operating cash outflows primarily due to the timing of the settlement of operating assets and liabilities.

•	a net decrease in cash outflows of $50.5 million due to the overall decrease in prepayments and scheduled repayments on our term loans and revolving credit facilities, primarily resulting from the refinancing of our long-term debt facilities in 2017. This was partially offset by higher scheduled repayments due to the debt facilities assumed in the merger with TIL in November 2017; and

•	an increase in cash inflows of $29.8 million primarily due to the additional draw-down of one of our corporate revolving credit facilities;

•	a decrease of $13.6 million in cash inflows from proceeds received from share issuances under our continuous offering program (or COP), which we relaunched in November 2016 and closed in the first quarter of 2017;

•	an increase of $3.1 million in cash outflows due to the additional cash dividends paid during the three months ended March 31, 2018 due to the increase in the number of our outstanding shares of Class A and B common stock from issuances of our shares in 2017 and early 2018; and

•	an increase of $1.7 million in cash outflows due to the scheduled payments on our obligations related to our capital leases which we entered into in July 2017.

•	a decrease of $32.6 million in cash inflows related to the sale of two Suezmax tankers during the three months ended March 31, 2017;

•	an increase of $0.7 million in cash inflows due to the return of capital from our equity accounted investment in Gemini Tankers L.L.C.

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(1)

Excludes expected interest payments of $27.8 million (remaining in 2018), $31.4 million (2019), $26.6 million (2020), $15.6 million (2021) and $3.6 million (2022). Expected interest payments are based on the existing interest rates for fixed-rate loans of 5.4% and existing interest rates for variable-rate loans at LIBOR plus margins that range from 0.30% to 2.75% at March 31, 2018. The expected interest payments do not reflect the effect of related interest rate swaps that we have used to hedge certain of our floating-rate debt.

(2)	Excludes imputed interest payments of $6.7 million (remaining in 2018), $8.6 million (2019), $8.1 million (2020), $7.5 million (2021), $7.0 million (2022) and $29.0 million (thereafter).

(3)	Excludes payments required if we execute all options to extend the terms of in-chartered leases signed as of March 31, 2018. If we exercise all options to extend the terms of signed in-chartered leases, we would expect total payments of $14.5 million (remaining in 2018), $11.4 million (2019), $10.6 million (2020) and $1.9 million (2021).

•	the timing and certainty of our future growth prospects and opportunities, including any future vessel acquisitions;

•	our financial position and ability to take advantage of growth opportunities in the global conventional tanker market;

•	the crude oil and refined product tanker market fundamentals, including the balance of supply and demand in the tanker market, estimated growth in the world tanker fleet, estimated growth in global oil demand and crude oil tanker demand, and changes in spot tanker rates;

•	the expected delivery dates for our tankers in-chartered, out-chartered, and pending sale;

•	expected contract commencement and termination dates;

•	future oil prices and production;

•	tanker fleet utilization, including our ability to secure new fixed-rate time charter-out agreements;

•	the effectiveness of our chartering strategy in capturing upside opportunities and reducing downside risks, including our ability to take advantage of a tanker market recovery;

•	our ability to generate surplus cash flow and pay dividends from our existing vessel fleet or from any potential vessel acquisitions;

•	our dividend policy and the expected range of our quarterly adjusted net income to be paid as quarterly dividends;

•	meeting our going concern requirements and our liquidity needs for the upcoming 12 months, including anticipated funds and sources of financing for liquidity and capital expenditure needs and the sufficiency of cash flows;

•	our ability to refinance existing debt obligations, to raise additional debt and capital to fund capital expenditures and negotiate extensions or redeployments of existing assets;

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•	our compliance with, and the effect on our business and operating results of, covenants under our term loans and credit facilities;

•	our expectations regarding payments made on behalf of our co-obligors in connection with the loan arrangements in which certain other subsidiaries of Teekay are also borrowers;

•	the adoption and potential impact of new accounting policies, including recording lease agreements on our balance sheet;

•	the completion and effect of proposed debt refinancings and sale-leaseback financing transactions;

•	continued material variations in the period-to-period fair value of our derivative instruments;

•	our expectations regarding uncertain tax positions; and

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

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(1)	Rate refers to the weighted-average interest rate for our long-term debt, including the margin we pay on our variable and fixed rates, and the average imputed interest rate we pay for our capital lease obligations.

(2)	Interest payments on U.S. Dollar-denominated debt and interest rate swaps are based on LIBOR. The average variable rate paid to us under our interest rate swaps is set quarterly at the six-month and three-month LIBOR, respectively.

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(1)	Previously filed as Exhibits 3.1 to the Company’s Amendment No. 1 to the Registration Statement on Form F-1 (Registration No. 33-147798), filed with the SEC on December 11, 2007, and hereby incorporated by reference to such Amendment No. 1 to Registration Statement.

(2)	Previously filed as Exhibit 99.1 to the Company's Registration Statement on Form S-8 filed with the SEC on March 21, 2018 and hereby incorporated by reference to such Registration Statement.

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