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FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended
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Dec. 31, 2018
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Interest rate derivatives | As of December 31, 2018 and 2017, we were party to the following interest rate swap transactions involving the payment of fixed rates in exchange for LIBOR as summarized below:
Instrument (in thousands of $) |  | Year end |  | Notional value |  |  | Maturity dates |  | Fixed interest rates
Interest rate swaps*: |  |  |  |  |  |  |  |
Receiving floating, pay fixed |  | 2018 |  | 950,000 |  |  | 2019/ 2021 |  | 1.23% to 1.94%
Receiving floating, pay fixed |  | 2017 |  | 1,250,000 |  |  | 2018/ 2021 |  | 1.13% to 1.94%
* This excludes any interest rate swap agreements designated and qualifying cash flow hedges in our equity method investments.
Fair value hierarchy of derivative and non-derivative financial instruments | The carrying value and fair value of our financial instruments at December 31, 2018 and 2017 are as follows:
|  | 2018 |  | 2018 |  | 2017 |  | 2017 |
(in thousands of $) | Fair value hierarchy | Carrying value |  | Fair value |  | Carrying value |  | Fair value |
Non-derivatives: |  |  |  |  |  |  |  |  |
Cash and cash equivalents | Level 1 | 217,835 |  | 217,835 |  | 214,862 |  | 214,862 |
Restricted cash and short-term deposits | Level 1 | 486,426 |  | 486,426 |  | 397,815 |  | 397,815 |
Current portion of long-term debt and short-term debt (1)(2) | Level 2 | (732,184 | ) | (732,184 | ) | (1,393,229 | ) | (1,393,229 | )
Long-term debt – convertible bonds (2) | Level 2 | (353,661 | ) | (373,029 | ) | (340,173 | ) | (430,361 | )
Long-term debt (2) | Level 2 | (1,496,351 | ) | (1,496,351 | ) | (701,498 | ) | (701,498 | )
Derivatives: |  |  |  |  |
Oil derivative instrument (6) | Level 2 | 84,730 |  | 84,730 |  | 94,700 |  | 94,700 |
Interest rate swaps asset (3) | Level 2 | 10,770 |  | 10,770 |  | 10,166 |  | 10,166 |
Foreign exchange swaps asset (3) | Level 2 | — |  | — |  | 51 |  | 51 |
Foreign exchange swaps liability (3) | Level 2 | (1,322 | ) | (1,322 | ) | (223 | ) | (223 | )
Total return equity swap liability (3)(4) | Level 2 | (70,804 | ) | (70,804 | ) | (40,141 | ) | (40,141 | )
Earn-Out Units asset (5) | Level 2 | — |  | — |  | 7,400 |  | 7,400 |
(1) | The carrying amounts of our short-term debts and loans receivable approximate their fair values because of the near term maturity of these instruments.
(2) | Our debt obligations are recorded at amortized cost in the consolidated balance sheets. The amounts presented in the table, are gross of the deferred charges amounting to $16.8 million and $24.1 million at December 31, 2018 and December 31, 2017, respectively.
(3) | The fair value of certain derivative instruments is the estimated amount that we would receive or pay to terminate the agreements at the reporting date, taking into account current interest rates, foreign exchange rates, closing quoted market prices and our creditworthiness and that of our counterparties.
(4) | The fair value of total return equity swaps is calculated using the closing prices of the underlying listed shares, dividends paid since inception and the interest rate charged by the counterparty.
(5) | The Earn-Out Units were issued to Golar in connection with the IDR Reset transaction between Golar and Golar Partners in October 2016. In October 2018, Golar Partners reduced their quarterly distribution and, as such, the fair value of the Earn-Out Units was written down to $nil. See note 16.
(6) | The fair value of the oil derivative instrument was determined using the estimated discounted cash flows of the additional payments due to us as a result of oil prices moving above a contractual oil price floor over the term of the LTA. Significant inputs used in the valuation of the oil derivative include management’s estimate of an appropriate discount rate and the length of time to blend the long-term and the short-term oil prices obtained from quoted prices in active markets.
Summary of fair value of derivative instruments on a gross basis | The following table summarizes the fair value of our derivative instruments on a gross basis (none of which have been designated as hedges) recorded in our consolidated balance sheets as of December 31, 2018 and 2017:
| Balance sheet classification | 2018 |  |  | 2017 |
(in thousands of $) |  |  |  |
Asset derivatives |  |  |  |
Oil derivative instrument | Other non-current assets | 84,730 |  |  | 94,700 |
Earn-Out Units asset | Other non-current assets | — |  |  | 7,400 |
Interest rate swaps | Other current and non-current assets | 10,770 |  |  | 10,166 |
Foreign exchange swaps | Other non-current assets | — |  |  | 51 |
Total asset derivatives |  | 95,500 |  |  | 112,317 |
Liability derivatives |  |  |  |
Foreign exchange swaps | Other current liabilities | 1,322 |  |  | 223 |
Total return equity swap | Other current liabilities | 70,804 |  |  | 40,141 |
Total liability derivatives |  | 72,126 |  |  | 40,364 |
Offsetting assets | We have elected not to offset the fair values of derivative assets and liabilities executed with the same counterparty that are generally subject to enforceable master netting arrangements. However, if we were to offset and record the asset and liability balances of derivatives on a net basis, the amounts presented in our consolidated balance sheets as of December 31, 2018 and 2017 would be adjusted as detailed in the following table:
| 2018 | 2017
| Gross amounts presented in the consolidated balance sheet | Gross amounts not offset in the consolidated balance sheet subject to netting agreements | Net amount | Gross amounts presented in the consolidated balance sheet | Gross amounts not offset in the consolidated balance sheet subject to netting agreements | Net amount
(in thousands of $) |  |  |  |  |  |
Total asset derivatives | 10,770 |  | — |  | 10,770 |  | 10,166 |  | — |  | 10,166 |

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