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RELATED PARTY TRANSACTIONS (Restated) | 12 Months Ended
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Dec. 31, 2015
Related Party Transactions [Abstract] |
RELATED PARTY TRANSACTIONS (Restated) |
31. | RELATED PARTY TRANSACTIONS (Restated)
a) Transactions with Golar Partners and subsidiaries: Income (expenses):
(in thousands of $) |  | 2015 |  | 2014 |  | 2013 |  |
|  |  |  | Restated |  |
Transactions with Golar Partners and subsidiaries: |  |  |  |  |  |  |
Management and administrative services fees revenue (i) |  | 2,949 |  | 2,877 |  | 2,569 |  |
Ship management fees revenue (ii) |  | 7,577 |  | 7,746 |  | 6,701 |  |
Charter-hire expenses (iii) |  | (41,555 | ) | — |  | — |  |
Gain on disposals to Golar Partners (iv) |  | 102,406 |  | 43,287 |  | 82,270 |  |
Interest income on vendor financing loan (v) |  | 4,217 |  | — |  | — |  |
Interest expense on short-term credit facility |  | (203 | ) | — |  | — |  |
Interest income on high-yield bonds (vi) |  | — |  | — |  | 1,972 |  |
Share options expense recharge (x) |  | 297 |  | — |  | — |  |
Total |  | 75,688 |  | 53,910 |  | 93,512 |  |
Receivables (payables): The balances with Golar Partners and subsidiaries as of December 31, 2015 and 2014 consisted of the following:
(in thousands of $) |  | 2015 |  |  | 2014 |
Trading balances (owing to) due from Golar Partners and subsidiaries (vii) |  | (4,400 | ) |  | 13,453 |
Methane Princess lease security deposit movements (viii) |  | (2,728 | ) |  | (3,486 | )
$20.0 million revolving credit facility (ix) |  | — |  |  | 20,000 |
Total |  | (7,128 | ) |  | 29,967 |
(i) Management and administrative services agreement - On March 30, 2011, Golar Partners entered into a management and administrative services agreement with Golar Management, a wholly-owned subsidiary of ours, pursuant to which Golar Management will provide to Golar Partners certain management and administrative services. The services provided by Golar Management are charged at cost plus a management fee equal to 5% of Golar Management’s costs and expenses incurred in connection with providing these services. Golar Partners may terminate the agreement by providing 120 days written notice. (ii) Ship management fees - Golar and certain of its affiliates charge ship management fees to Golar Partners for the provision of technical and commercial management of the vessels. Each of Golar Partners’ vessels is subject to management agreements pursuant to which certain commercial and technical management services are provided by Golar Management and Golar Wilhelmsen AS ("Golar Wilhelmsen"), a partnership that is jointly controlled by Golar and by Wilhelmsen Ship Management (Norway) AS. Golar Partners may terminate these agreements by providing 30 days written notice. On September 4, 2015, Golar Wilhelmsen became a wholly owned subsidiary of Golar as a result of our acquisition of the remaining 40% interest owned by Wilhelmsen Ship Management (Norway) AS. Accordingly, since this date these ship management fees have been eliminated on consolidation. (iii) Charter-hire expenses - This consists of the charter-hire expenses that we incurred for the charter back of the Golar Eskimo and the Golar Grand from Golar Partners in 2015. In connection with the disposal of the Golar Grand to Golar Partners in November 2012, we issued an option where in the event that the charterer did not renew or extend its charter for the Golar Grand beyond February 2015, the Partnership had the option to require us to charter the vessel through to October 2017. In February 2015, the option was exercised. Accordingly, we recognized charter-hire costs of $28.7 million in 2015 in respect of the Golar Grand. This excludes the expense of $3.9 million, representing the incremental liability recognized in 2015 upon re-measurement of the guarantee obligation, net of the impact of the respective amortization in 2015. In connection with the disposal of the Golar Eskimo in January 2015, we entered into an agreement with Golar Partners to pay $22 million to charter back the vessel until June 30, 2015. Accordingly, of these amounts payable, we recognized total charter-hire expenses of $12.9 million in relation to this agreement in 2015. For additional detail refer to to (iv) below. (iv) Gain on disposals - This refers to the gains arising on the disposals of the Golar Eskimo, the Golar Igloo and the Golar Maria to Golar Partners. These disposals are further described in note 6. In January 2015, we completed the disposal of our interests in the companies that own and operate the FSRU, the Golar Eskimo, which resulted in a gain on disposal of $102.4 million. In addition, we provided Golar Partners with a loan facility for an amount of $220.0 million to part fund their purchase. The loan was non-amortizing with a final balloon payment due in December 2016, and bore interest at a rate equal to LIBOR plus a blended margin of 2.84%. The loan was fully repaid by the end of 2015. In connection with the disposal of the Golar Eskimo, we also entered into an agreement to pay Golar Partners $22 million (of which $12.9 million was recognized as charter-hire expense) for the period from January 20, 2015 through to June 30, 2015 for the right to use the Golar Eskimo and receive all revenues earned from the vessel during this period. The balance of $8.1 million paid represented the financing of future operating leasing income to be received by Golar Partners. In addition, in exchange for entering into the charter back arrangement we agreed with Golar Partners that should we achieve a favorable renegotiation and extension of the charter with the charterer, which increased the value of the charter sold along with the vessel, Golar Partners would pay additional consideration to us equivalent to any increase in value. No charter renegotiation took place and no additional consideration was due or paid. In March 2014, we completed the sale of our interests in the company that owns and operates the FSRU, the Golar Igloo, which resulted in a gain on disposal of $43.3 million. In February 2013, we completed the disposal of our interests in the company that owns and operates the LNG carrier, the Golar Maria, which resulted in a gain on disposal of $82.3 million. (v) Golar Eskimo vendor loan - As discussed further in (iv) above, we granted the Partnership a loan facility for an amount of $220.0 million to part fund their purchase of the Golar Eskimo in January 2015. The loan was fully repaid by the end of 2015. (vi) High-yield bonds - In October 2012, Golar Partners completed the issuance of NOK 1,300.0 million in senior unsecured bonds that mature in October 2017. The aggregate principal amount of the bonds is equivalent to approximately $227.0 million. Of this amount, approximately $35.0 million, was issued to us. We sold our participation in the high yield bonds in November 2013. (vii) Trading balances - Receivables and payables with Golar Partners and its subsidiaries are comprised primarily of unpaid management fees, charter-hire expenses, advisory and administrative services and may include working capital adjustments in respect of disposals to the Partnership. In addition, certain receivables and payables arise when we pay an invoice on behalf of a related party and vice versa. Receivables and payables are generally settled quarterly in arrears. Trading balances owing to or due from Golar Partners and its subsidiaries are unsecured, interest-free and intended to be settled in the ordinary course of business. They primarily relate to recharges for trading expenses paid on behalf of Golar Partners, including ship management and administrative service fees due to us. In November 2015, we received funding from Golar Partners in the amount of $50 million for a fixed period of 28 days. Golar Partners charged interest on this balance at a rate of LIBOR plus 5.0%. (viii) Methane Princess lease security deposit movements - This represents net advances from Golar Partners since its IPO, which correspond with the net release of funds from the security deposits held relating to a lease for the Methane Princess. This is in connection with the Methane Princess tax lease indemnity provided to Golar Partners under the Omnibus Agreement. Accordingly, these amounts will be settled as part of the eventual termination of the Methane Princess lease. (ix) $20 million revolving credit facility - In April 2011, we entered into a $20.0 million revolving credit facility with Golar Partners. This facility is unsecured and interest-free, maturing in April 2015. However, this facility was extended until its repayment in June 2015. (x) Share options expense - This relates to a recharge of share option expense to Golar Partners in relation to share options in Golar granted to certain of Golar Partners directors and officers during 2015. Other transactions: Payment under Omnibus Agreement In 2013, Golar Partners incurred expenses of $3.3 million which were indemnified and settled by us in accordance with the terms of the Omnibus Agreement. This was recorded in our statement of operations as "Other non-operating expense". Accordingly, for each of the years ended December 31, 2015, 2014 and 2013, in respect of this indemnification, we recognized an expense in our statement of operations of $nil, $0.5 million and $0.5 million, respectively. Golar Partners distributions to us Golar Partners has declared and paid quarterly distributions totaling $52.1 million, $61.3 million, and $63.7 million to us for each of the years ended December 31, 2015, 2014 and 2013, respectively. Indemnifications and guarantees: a) Tax lease indemnifications: Under the Omnibus Agreement, we have agreed to indemnify Golar Partners in the event of any tax liabilities in excess of scheduled or final settlement amounts arising from the Methane Princess leasing arrangement and the termination thereof. In addition, to the extent Golar Partners incurs any liabilities as a consequence of a successful challenge by the U.K. Tax Authorities with regard to the initial tax basis of the transactions relating to any of the U.K. tax leases or in relation to the lease restructuring terminations in 2010, we have agreed to indemnify Golar Partners. The maximum possible amount in respect of the tax lease indemnification is not known as the determination of this amount is dependent on our intention of terminating this lease and the various market factors present at the point of termination. As of December 31, 2015, we recognized a liability of $11.5 million in respect of the tax lease indemnification to Golar Partners representing the fair value at deconsolidation in December 2012 (2014: $11.5 million). b) Environmental and other indemnifications: Under the Omnibus Agreement, we have agreed to indemnify Golar Partners until April 13, 2016, against certain environmental and toxic tort liabilities with respect to the assets that we contributed or sold to Golar Partners to the extent they arose prior to the time they were contributed or sold. However, claims are subject to a deductible of $0.5 million and an aggregate cap of $5.0 million. c) Performance guarantees: We issued performance guarantees to third party charterers in connection with the Time Charter Party agreements entered into with the vessel operating entities who are now subsidiaries of Golar Partners. These performance guarantees relate to the Golar Spirit, the Golar Freeze, the Methane Princess, the Golar Winter and the Golar Mazo. The maximum potential exposure in respect of the performance guarantees issued by the Company is not known as these matters cannot be absolutely determined. The likelihood of triggering the performance guarantees is remote based on the past performance of both our combined fleets. d) Debt guarantee: The debt guarantees were issued by us to third party banks in respect of certain secured debt facilities relating to Golar Partners and subsidiaries. The liability of $4.5 million, representing the fair value on deconsolidation, was being amortized over the remaining term of the respective debt facilities with the credit recognized in "Other financial items, net". As at December 31, 2015, the liability had been fully amortized. Golar Tundra financing related guarantees In November 2015, we sold the Golar Tundra to a CMBL entity (''CMBL lessor'') and subsequently leased back the vessel on a bareboat charter for a term of up to ten years through our subsidiary, Golar LNG NB13 Corporation, or Tundra Corp. Tundra Corp has options to repurchase the vessel throughout the charter term at fixed pre-determined amounts, commencing from the third anniversary of the commencement of the bareboat charter, with an obligation to repurchase the vessel at the end of the ten year lease period. In connection with this transaction, the Company has provided a guarantee to CMBL lessor that, in the event of default by Tundra Corp of its obligations under the lease, the Company will settle any liabilities due within 5 business days (“primary guarantor”). Golar Partners has provided a further guarantee that, in the event the Company is unable to satisfy its obligations as the primary guarantor, then CMBL lessor may look to Golar Partners as the deficiency guarantor. Under a separate side agreement, the Company has agreed to indemnify Golar Partners for any costs incurred with respect to its position as the deficiency guarantor. These agreements, including associated guarantees, contemplate that in the event the equity interests in Tundra Corp are sold by Golar to the Partnership, the guarantee between Golar and CMBL lessor will fall away. The guarantees cover the amounts under the bareboat charter, the details of which are disclosed in Note 4. "Variable Interest Entities." Omnibus Agreement In connection with the IPO of Golar Partners, we entered into an Omnibus Agreement with Golar Partners governing, among other things, when we and Golar Partners may compete against each other as well as rights of first offer on certain FSRUs and LNG carriers. Under the Omnibus Agreement, Golar Partners and its subsidiaries agreed to grant a right of first offer on any proposed sale, transfer or other disposition of any vessel it may own. Likewise, we agreed to grant a similar right of first offer to Golar Partners for any vessel under a charter for five or more years that it may own. These rights of first offer will not apply to a (a) sale, transfer or other disposition of vessels between any affiliated subsidiaries, or pursuant to the terms of any current or future charter or other agreement with a charter party or (b) merger with or into, or sale of substantially all of the assets to, an unaffiliated third-party. In addition, the Omnibus Agreement provides for certain indemnities to Golar Partners in connection with the assets transferred from us. b) Net income (expenses) from (due to) other related parties (excluding Golar Partners): On September 10, 2014 following a secondary offering of 32 million of our common shares by World Shipholding Limited (''World Shipholding''), its stake in us was reduced from 36.2% to 1.9%. As of December 31, 2015 and 2014, World Shipholding owned 0.0% and 1.9% of Golar, respectively. Following this, World Shipholding, Frontline Ltd (''Frontline''), Seatankers Management Company Limited (''Seatankers''), Ship Finance AS (''Ship Finance'') and Seadrill Ltd (''Seadrill''), ceased to be our related parties. Transactions with these companies until September 10, 2014 are presented below:
(in thousands of $) | 2015 |  |  | 2014 |  |  | 2013 |
Frontline (i) | — |  |  | 34 |  |  | 49 |
Seatankers (i) | — |  |  | (112 | ) |  | (45 | )
Ship Finance (i) | — |  |  | 116 |  |  | 207 |
Seadrill (i) | — |  |  | (5 | ) |  | — |
Golar Wilhelmsen (ii) | (2,246 | ) |  | (7,031 | ) |  | (4,899 | )
World Shipholding (iii) | — |  |  | — |  |  | (976 | )
Payables to related parties (excluding Golar Partners):
(in thousands of $) | 2015 |  | 2014 |
Golar Wilhelmsen (ii) | — |  | (1,394 | )
i. We used to transact business with the following parties, being companies in which World Shipholding and companies associated with World Shipholding have a significant interest: Frontline, Seatankers, Ship Finance and Seadrill. Net expense/income from Frontline, Seatankers and Ship Finance comprise fees for management support, corporate and insurance administrative services, net of income from supplier rebates and income from the provision of serviced offices and facilities. Receivables and payables with related parties comprise primarily of unpaid management fees, advisory and administrative services. ii. As of September 4, 2015, pursuant to the acquisition of the remaining 40% interest, we held a 100% ownership interest in Golar Wilhelmsen, thus making it a controlled and fully consolidated subsidiary from that date. Previous to that we held a 60% ownership interest in Golar Wilhelmsen, which we accounted for using the equity method (see note 13). Golar Wilhelmsen recharges management fees in relation to provision of technical and ship management services. Accordingly, from September 4, 2015, these management fees are eliminated on consolidation. iii. In April 2011, we entered into a revolving credit facility with a company related to our former major shareholder, World Shipholding. In December 31, 2013, the revolving credit facility was amended to $50 million. We repaid the $50 million borrowed under the facility in April 2014. This facility was subsequently terminated in August 2014.

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- Definition The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(k)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 850 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39603-107864 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 850 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39622-107864 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 850 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39549-107864 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 850 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39678-107864 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 850 -SubTopic 10 -Section 50 -Paragraph 6 -URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39691-107864 + Details
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