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VARIABLE INTEREST ENTITIES ("VIE") | 12 Months Ended
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Dec. 31, 2018
VARIABLE INTEREST ENTITIES [Abstract] |
VARIABLE INTEREST ENTITIES (VIE) |
5. | VARIABLE INTEREST ENTITIES ("VIEs")
As of December 31, 2018, we leased eight vessels (December 31, 2017: seven vessels) from VIEs as part of sale and leaseback agreements, of which four were with ICBC Finance Leasing Co. Ltd, or ICBCL; one with a subsidiary of China Merchants Bank Co. Ltd, or CMBL; one with CCB Financial Leasing Corporation Limited, or CCBFL; one with a COSCO Shipping entity, or COSCO and one with a China State Shipbuilding Corporation entity, or CSSC. ICBCL Lessor VIEs Commencing in October 2014, we sold the Golar Glacier, followed by the remaining three newbuilds (the Golar Kelvin, Golar Snow and Golar Ice) to ICBCL entities in the first quarter of 2015. The vessels were simultaneously leased back on bareboat charters for a term of ten years. We have several options to repurchase the vessels at fixed pre-determined amounts during the charter periods with the earliest date from the fifth year anniversary of commencement of the bareboat charter, and an obligation to purchase the assets at the end of the ten year lease period. CMBL Lessor VIE In November 2015, we sold the Golar Tundra to a CMBL entity and subsequently leased back the vessel on a bareboat charter for a term of ten years. We have options to repurchase the vessel throughout the charter term at fixed pre-determined amounts, commencing from the third year anniversary of the commencement of the bareboat charter, with an obligation to repurchase the vessel at the end of the ten year lease period. CCBFL Lessor VIE In March 2016, we sold the Golar Seal to a CCBFL entity and subsequently leased back the vessel on a bareboat charter for a term of ten years. We have options to repurchase the vessel throughout the charter term at fixed pre-determined amounts, commencing from the fifth year anniversary of the commencement of the bareboat charter, with an obligation to repurchase the vessel at the end of the ten year lease period. COSCO Lessor VIE In March 2017, we sold the Golar Crystal to a COSCO entity and subsequently leased back the vessel on a bareboat charter for a term of ten years. We have options to repurchase the vessel throughout the charter term at fixed pre-determined amounts, commencing from the third year anniversary of the commencement of the bareboat charter, with an obligation to repurchase the vessel at the end of the ten year lease period. CSSC Lessor VIE In June 2018, we sold the Hilli to a CSSC entity and subsequently leased back the vessel on a bareboat charter for a term of ten years. We have options to repurchase the vessel throughout the charter term at fixed pre-determined amounts, commencing from the fifth year anniversary of the commencement of the bareboat charter, with an obligation to repurchase the vessel at the end of the ten year lease period. While we do not hold any equity investments in the above SPVs, we have determined that we have a variable interest in these SPVs and that these lessor entities, that own the vessels, are VIEs. Based on our evaluation of the agreements, we have concluded that we are the primary beneficiary of these VIEs and, accordingly, these VIEs are consolidated into our financial results. We did not record any gains or losses from the sale of these vessels as they continued to be reported as vessels at their original costs in our consolidated financial statements at the time of each transaction. Similarly, the effect of the bareboat charter arrangement is eliminated upon consolidation of the SPV. The equity attributable to ICBCL, CMBL, CCBFL, COSCO and CSSC in their respective VIEs are included in non-controlling interests in our consolidated financial statements. As of December 31, 2018 and 2017, the respective vessels are reported under "Vessels and equipment, net" in our consolidated balance sheets. The following table gives a summary of the sale and leaseback arrangements, including repurchase options and obligations as of December 31, 2018:
Vessel | Effective from | Sales value (in $ millions) | First repurchase option (in $ millions) | Date of first repurchase option | Repurchase obligation at end of lease term (in $ millions) | End of lease term
Golar Glacier | October 2014 | 204.0 | 173.8 | October 2019 | 135.1 | October 2024
Golar Kelvin | January 2015 | 204.0 | 173.8 | January 2020 | 135.1 | January 2025
Golar Snow | January 2015 | 204.0 | 173.8 | January 2020 | 135.1 | January 2025
Golar Ice | February 2015 | 204.0 | 173.8 | February 2020 | 135.1 | February 2025
Golar Tundra | November 2015 | 254.6 | 168.7 | November 2018 (1) | 76.4 | November 2025
Golar Seal | March 2016 | 203.0 | 132.8 | March 2021 | 87.4 | March 2026
Golar Crystal | March 2017 | 187.0 | 97.3 | March 2020 | 50.6 | March 2027
Hilli | June 2018 | 1,200.0 | 633.2 | June 2023 | 300.0 | June 2028
(1) We did not exercise the first repurchase option relating to the Golar Tundra. A summary of our payment obligations (excluding repurchase options and obligations) under the bareboat charters with the lessor VIEs as of December 31, 2018, are shown below:
(in thousands of $) | 2019 | 2020 | 2021 | 2022 | 2023 | 2024+
Golar Glacier | 17,100 | 17,147 | 17,100 | 17,100 | 17,100 | 12,884
Golar Kelvin | 17,100 | 17,147 | 17,100 | 17,100 | 17,100 | 15,695
Golar Snow | 17,100 | 17,147 | 17,100 | 17,100 | 17,100 | 15,695
Golar Ice | 17,100 | 17,147 | 17,100 | 17,100 | 17,100 | 18,599
Golar Tundra (1)(2) | 22,437 | 21,548 | 20,610 | 19,697 | 18,784 | 32,079
Golar Seal (2) | 13,754 | 13,717 | 13,717 | 13,717 | 13,754 | 27,433
Golar Crystal (1) | 12,441 | 12,335 | 12,175 | 12,050 | 11,907 | 37,601
Hilli (1) | 128,418 | 123,526 | 118,800 | 114,075 | 109,463 | 412,055
(1) The payment obligations relating to the Golar Tundra, Golar Crystal and Hilli above include variable rental payments due under the lease based on an assumed LIBOR plus a margin. (2) The payment obligations relating to the Golar Tundra and the Golar Seal above have been prepared on the assumption that we are able to secure a replacement charter for these two vessels, to ensure continuation of these financing arrangements. Refer to note 1 for further details. The assets and liabilities of the lessor VIEs that most significantly impact our consolidated balance sheets as of December 31, 2018 and 2017, are as follows:
(in thousands of $) | Golar Glacier | Golar Kelvin | Golar Snow | Golar Ice | Golar Tundra | Golar Seal | Golar Crystal | Hilli | 2018 | 2017
Assets |  |  |  |  |  |  |  |  | Total | Total
Restricted cash and short-term deposits (see note 14) | 21,170 |  | 71,924 |  | 19,294 |  | 8 |  | — |  | 3,405 |  | 3,186 |  | 57,441 |  | 176,428 |  | 130,063 |
Liabilities |  |  |  |  |  |  |  |  |  |
Debt: |  |  |  |  |  |  |  |  |  |
Current portion of long-term debt and short-term debt (1) | 39,319 |  | 182,540 |  | 30,404 |  | 117,888 |  | 121,741 |  | — |  | 5,741 |  | 148,880 |  | 646,513 |  | 833,664 |
Long-term interest bearing debt - non-current portion (1) | 114,093 |  | — |  | 123,267 |  | — |  | — |  | 123,524 |  | 90,790 |  | 749,100 |  | 1,200,774 |  | 252,691 |
| 153,412 |  | 182,540 |  | 153,671 |  | 117,888 |  | 121,741 |  | 123,524 |  | 96,531 |  | 897,980 |  | 1,847,287 |  | 1,086,355 |
(1) Where applicable, these balances are net of deferred finance charges (see note 20). The most significant impact of the lessor VIEs operations on our consolidated statements of income is interest expense of $61.5 million, $37.4 million and $44.1 million for the years ended December 31, 2018, 2017 and 2016, respectively. The most significant impact of the lessor VIEs cash flows on our consolidated statements of cash flows is net cash received in financing activities of $761.2 million, $51.5 million and $154.2 million for the years ended December 31, 2018, 2017 and 2016, respectively. Subsequent to the sale of common units in Golar Hilli LLC (see note 6 for further information), we have retained sole control over the most significant activities and the greatest exposure to variability in residual returns and expected losses from the Hilli. Accordingly, management have concluded Hilli LLC is a VIE and that we are the primary beneficiary. The assets and liabilities of Hilli LLC that most significantly impact our consolidated balance sheet as of December 31, 2018, are as follows:
(in thousands of $) | Hilli LLC (2) |
Assets |
Cash and short-term deposits | 85,238 |
Restricted cash and short-term deposits | 57,441 |
Vessels and equipment, net | 1,301,279 |
Other non-current assets | 91,431 |
| 1,535,389 |
Liabilities |
Current portion of long-term debt and short-term debt (1) | 148,880 |
Long-term interest bearing debt - non-current portion (1) | 749,100 |
| 897,980 |
(1) Where applicable, these balances are net of deferred finance charges. (2) As Hilli LLC is the primary beneficiary of the Hilli Lessor VIE (see above) the Hilli LLC balances include the Hilli Lessor VIE. The most significant impact of Hilli LLC VIE's operations on our consolidated statements of operations is liquefaction services revenue of $127.6 million and realized and unrealized gain on oil derivative instrument of $16.8 million for the period July 12, 2018 to December 31, 2018. The most significant impact of lessor VIE's cash flows on our consolidated statements of cash flows is net payments of $30.3 million in financing activities for the period July 12, 2018 to December 31, 2018.

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- Definition VARIABLE INTEREST ENTITIES [Abstract] + References No definition available. + Details
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- Definition The entire disclosure for a variable interest entity (VIE), including but not limited to, judgments and assumptions in determining whether to consolidate and in identifying the primary beneficiary, gain (loss) recognized on the initial consolidation of the VIE, terms of arrangements, amounts and classification of the VIE's assets and liabilities, and the entity's maximum exposure to loss. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 810 -URI http://asc.fasb.org/topic&trid=2197479 + Details
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