XML 31 R22.htm IDEA: XBRL DOCUMENT
v3.19.3

Financial Instruments | 9 Months Ended
--- | ---
Sep. 30, 2019
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Financial Instruments | FINANCIAL INSTRUMENTS Fair values We recognize our fair value estimates using a fair value hierarchy based on the inputs used to measure fair value. The fair value of hierarchy has three levels based on reliability of inputs used to determine fair value as follows: Level 1: Quoted market prices in active markets for identical assets and liabilities. Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data. Level 3: Unobservable inputs that are not corroborated by market data. The carrying values and estimated fair values of our financial instruments at September 30, 2019 and December 31, 2018 are as follows:
|  | September 30, 2019 | December 31, 2018
(in thousands of $) | Fair value hierarchy | Carrying value | Fair value | Carrying value | Fair value
Non-Derivatives: |  |  |  |  |
Cash and cash equivalents | Level 1 | 250,153 |  | 250,153 |  | 217,835 |  | 217,835 |
Restricted cash and short-term deposits | Level 1 | 375,276 |  | 375,276 |  | 486,426 |  | 486,426 |
Current portion of long-term debt and short-term debt (1)(2) | Level 2 | (979,001 | ) | (979,001 | ) | (732,184 | ) | (732,184 | )
Long-term debt - convertible bonds (2) | Level 2 | (364,366 | ) | (352,248 | ) | (353,661 | ) | (373,029 | )
Long-term debt (2) | Level 2 | (1,223,773 | ) | (1,223,773 | ) | (1,496,351 | ) | (1,496,351 | )
Derivatives: |  |  |  |  |
Oil derivative instrument(3)(6) | Level 2 | 41,310 |  | 41,310 |  | 84,730 |  | 84,730 |
Interest rate swaps asset (3)(4) | Level 2 | 606 |  | 606 |  | 10,770 |  | 10,770 |
Interest rate swaps liability (3)(4) | Level 2 | (6,550 | ) | (6,550 | ) | — |  | — |
Foreign exchange swaps asset (3) | Level 2 | 2,615 |  | 2,615 |  | — |  | — |
Foreign exchange swaps liability (3) | Level 2 | (407 | ) | (407 | ) | (1,322 | ) | (1,322 | )
Total return equity swap liability (3)(4)(5) | Level 2 | (101,356 | ) | (101,356 | ) | (70,804 | ) | (70,804 | )
(1) The carrying amounts of our short-term debt 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 above are gross of the deferred finance charges amounting to $12.7 million and $16.8 million at September 30, 2019 and December 31, 2018, respectively. (3) Derivative liabilities are captured within other current liabilities and derivative assets are generally captured within other current assets and non-current assets on the balance sheet. (4) 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. (5) 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. (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 and short-term oil prices obtained from quoted prices in active markets. As of September 30, 2019, 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 $) | Notional value |  | Maturity dates | Fixed interest rates
Interest rate swaps: |  |  |
Receiving floating, pay fixed | 950,000 |  | 2019 to 2025 | 1.28% to 2.37%
During the nine months ended September 30, 2019, we entered into new interest rate swaps with a notional value of $250.0 million and terminated existing interest rate swaps with a notional value of $250.0 million. The credit exposure of our interest rate and equity swap agreements are represented by the fair value of contracts with a positive fair value at the end of each period, reduced by the effects of master netting agreements. It is our policy to enter into master netting agreements with the counterparties to derivative financial instrument contracts, which give us the legal right to discharge all or a portion of amounts owed to the counterparty by offsetting them against amounts that the counterparty owes to us. 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 September 30, 2019 and December 31, 2018 would be adjusted as detailed in the following table:
| September 30, 2019 |  | December 31, 2018 |
(in thousands of $) | 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 |
Total asset derivatives | 606 |  |  | (325 | ) |  | 281 |  |  | 10,770 |  |  | — |  |  | 10,770 |  |
Total liability derivatives | (6,550 | ) |  | 325 |  |  | (6,225 | ) |  | — |  |  | — |  |  | — |  |
The total return equity swap has a credit arrangement that requires us to provide cash collateral equalling 20% of the initial purchase price and to subsequently post additional cash collateral that corresponds to any unrealized loss. As at September 30, 2019, cash collateral amounting to $108.9 million has been provided.

X
- References No definition available. + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for financial instruments. This disclosure includes, but is not limited to, fair value measurements of short and long term marketable securities, international currencies forward contracts, and auction rate securities. Financial instruments may include hedging and non-hedging currency exchange instruments, derivatives, securitizations and securities available for sale at fair value. Also included are investment results, realized and unrealized gains and losses as well as impairments and risk management disclosures. + References No definition available. + Details
Name: | us-gaap_FinancialInstrumentsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration