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Financial Instruments | 9 Months Ended
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Sep. 30, 2021
Fair Value Disclosures [Abstract] |
Financial Instruments | Financial Instruments a)Fair Value Measurements For a description of how the Company estimates fair value and for a description of the fair value hierarchy levels, see "Item 18 – Financial Statements: Note 11" in the Company’s Annual Report on Form 20-F for the year ended December 31, 2020. The following table includes the estimated fair value and carrying value of those assets and liabilities that are measured at fair value on a recurring and non-recurring basis, as well as the estimated fair value of the Company’s financial instruments that are not accounted for at fair value on a recurring basis.
|  |  | September 30, 2021 |  | December 31, 2020
| Fair Value Hierarchy Level |  | Carrying Amount Asset (Liability) $ |  | Fair Value Asset (Liability) $ |  | Carrying Amount Asset (Liability) $ |  | Fair Value Asset (Liability) $
Recurring |  |  |  |  |  |  |  |  |
Cash, cash equivalents and restricted cash (note 19) | Level 1 |  | 287,624 |  | 287,624 |  | 405,890 |  | 405,890
Derivative instruments (note 10) |  |  |  |  |  |  |  |  |
Interest rate swap agreements – assets (1) | Level 2 |  | 816 |  | 816 |  | — |  | —
Interest rate swap agreements – liabilities (1) | Level 2 |  | (34,516) |  | (34,516) |  | (77,873) |  | (77,873)
Cross currency interest swap agreements – assets (1) | Level 2 |  | 3,891 |  | 3,891 |  | 4,505 |  | 4,505
Cross currency interest swap agreements – liabilities (1) | Level 2 |  | (20,533) |  | (20,533) |  | (20,022) |  | (20,022)
Foreign currency contracts | Level 2 |  | (56) |  | (56) |  | — |  | —
Forward freight agreements | Level 2 |  | (270) |  | (270) |  | — |  | —
Non-recurring |  |  |  |  |  |  |  |  |
Vessels and equipment | Level 2 |  | — |  | — |  | 99,967 |  | 99,967
Assets held for sale (2) | Level 2 |  | 12,740 |  | 12,740 |  | 31,680 |  | 31,680
Operating lease right-of-use assets (note 13) | Level 2 |  | — |  | — |  | 1,799 |  | 1,799
Other |  |  |  |  |  |  |  |  |
Loans to equity-accounted investees – current | (3) |  | 22,588 |  | (3) |  | 16,772 |  | (3)
Advances to equity-accounted investees and joint venture partners – long-term | (3) |  | 106,420 |  | (3) |  | 111,338 |  | (3)
Short-term debt (note 8) | Level 2 |  | (20,000) |  | (20,000) |  | (10,000) |  | (10,000)
Long-term debt – public (note 9) | Level 1 |  | (585,013) |  | (607,893) |  | (587,913) |  | (597,281)
Long-term debt – non-public (note 9) | Level 2 |  | (1,528,166) |  | (1,555,742) |  | (1,467,194) |  | (1,481,093)
Obligations related to finance leases, including current portion (note 5) | Level 2 |  | (1,520,860) |  | (1,610,745) |  | (1,700,965) |  | (1,868,667)
(1)The fair value of the Company's interest rate swap and cross currency swap agreements at September 30, 2021 includes $3.0 million (December 31, 2020 – $6.1 million) of accrued interest expense which is recorded in accrued liabilities on the unaudited consolidated balance sheet. (2)In September 2021, the carrying value of one Aframax tanker was written down to its estimated sales price, less selling costs. See Note 13. (3)In these unaudited interim consolidated financial statements, the Company’s loans to and investments in equity-accounted investments form the aggregate carrying value of the Company’s interests in entities accounted for by the equity method. The fair value of the individual components of such aggregate interests is not determinable. b) Credit Losses For a description of the Company's exposure to potential credit losses under ASC 326, see "Item 18 – Financial Statements: Note 11b" in the Company’s Annual Report on Form 20-F for the year ended December 31, 2020. The following table includes the amortized cost basis of the Company's direct interests in financing receivables and net investment in direct financing leases by class of financing receivables and by period of origination and their associated credit quality.
|  | Amortized Cost Basis by Origination Year |  |
|  | Credit Quality Grade (1) |  | 2020 |  | 2018 |  | 2016 and prior |  |  |  | Total
As at September 30, 2021 |  |  | $ |  | $ |  | $ |  |  |  | $
Sales-type lease – Teekay Parent |  |  |  |  |  |  |  |  |  |  |  |
Petrojarl Foinaven FPSO |  | Performing |  | 14,574 |  |  | — |  |  | — |  |  |  |  | 14,574 |
Direct financing leases – Teekay LNG |  |  |  |  |  |  |  |  |  |  |  |
Tangguh Hiri and Tangguh Sago |  | Performing |  | — |  |  | — |  |  | 322,949 |  |  |  |  | 322,949 |
Bahrain Spirit |  | Performing |  | — |  |  | 210,190 |  |  | — |  |  |  |  | 210,190 |
|  |  |  | — |  |  | 210,190 |  |  | 322,949 |  |  |  |  | 533,139 |
Loans to equity-accounted joint ventures |  |  |  |  |  |  |  |  |  |  |  |
Exmar LPG Joint Venture |  | Performing |  | — |  |  | — |  |  | 32,266 |  |  |  |  | 32,266 |
Bahrain LNG Joint Venture |  | Performing |  | — |  |  | — |  |  | 73,375 |  |  |  |  | 73,375 |
Other |  | Performing |  | 660 |  |  | — |  |  | — |  |  |  |  | 660 |
|  |  |  | 660 |  |  | — |  |  | 105,641 |  |  |  |  | 106,301 |
|  |  |  | 15,234 |  |  | 210,190 |  |  | 428,590 |  |  |  |  | 654,014 |
As at December 31, 2020 |  |  |  |  |  |  |  |  |  |  |  |
Sales-type lease – Teekay Parent |  |  |  |  |  |  |  |  |  |  |  |
Petrojarl Foinaven FPSO |  | Performing |  | 15,472 |  |  | — |  |  | — |  |  |  |  | 15,472 |
Direct financing leases – Teekay LNG |  |  |  |  |  |  |  |  |  |  |  |
Tangguh Hiri and Tangguh Sago |  | Performing |  | — |  |  | — |  |  | 332,308 |  |  |  |  | 332,308 |
Bahrain Spirit |  | Performing |  | — |  |  | 211,939 |  |  | — |  |  |  |  | 211,939 |
|  |  |  | — |  |  | 211,939 |  |  | 332,308 |  |  |  |  | 544,247 |
Loans to equity-accounted joint ventures |  |  |  |  |  |  |  |  |  |  |  |
Exmar LPG Joint Venture |  | Performing |  | — |  |  | — |  |  | 42,266 |  |  |  |  | 42,266 |
Bahrain LNG Joint Venture |  | Performing |  | — |  |  | — |  |  | 73,375 |  |  |  |  | 73,375 |
Other |  | Performing |  | 991 |  |  | — |  |  | — |  |  |  |  | 991 |
|  |  |  | 991 |  |  | — |  |  | 115,641 |  |  |  |  | 116,632 |
|  |  |  | 16,463 |  |  | 211,939 |  |  | 447,949 |  |  |  |  | 676,351 |
(1)For a description of how the Company's credit quality grades are determined see "Item 18 – Financial Statements: Note 11b" in the Company’s Annual Report on Form 20-F for the year ended December 31, 2020. As at September 30, 2021, all direct financing and sales-type leases held by the Company and Teekay LNG's equity-accounted joint ventures had a credit quality grade of performing. Changes in the allowance for credit losses for the three and nine months ended September 30, 2021 are as follows:
| Direct Financing and Sales-Type Leases (1)(2) $ |  | Direct Financing and Sales-Type Leases and Other within Equity-Accounted Joint Ventures (1)(2) $ |  | Loans to Equity-Accounted Joint Ventures (1)(2) $ |  | Guarantees of Debt (1)(2) $ |  | Total $
Three and Nine Months Ended September 30, 2021 |  |  |  |  |  |  |  |  |
As at December 31, 2020 | 31,078 |  | 54,937 |  | 4,726 |  | 2,080 |  | 92,821
Provision for (reversal of) potential credit losses | 4,726 |  | 6,677 |  | (981) |  | 218 |  | 10,640
As at March 31, 2021 | 35,804 |  | 61,614 |  | 3,745 |  | 2,298 |  | 103,461
(Reversal of) provision for potential credit losses | (404) |  | 722 |  | 255 |  | (298) |  | 275
As at June 30, 2021 | 35,400 |  | 62,336 |  | 4,000 |  | 2,000 |  | 103,736
(Reversal of) provision for potential credit losses | (1,400) |  | (1,736) |  | 300 |  | (200) |  | (3,036)
As at September 30, 2021 | 34,000 |  | 60,600 |  | 4,300 |  | 1,800 |  | 100,700
Three and Nine Months Ended September 30, 2020 |  |  |  |  |  |  |  |  |
As at January 1, 2020 | 11,155 |  | 36,292 |  | 3,714 |  | 2,139 |  | 53,300
(Reversal of) provision for potential credit losses | (100) |  | 8,980 |  | — |  | — |  | 8,880
As at March 31, 2020 | 11,055 |  | 45,272 |  | 3,714 |  | 2,139 |  | 62,180
Provision for (reversal of) potential credit losses | 465 |  | (423) |  | 83 |  | (288) |  | (163)
As at June 30, 2020 | 11,520 |  | 44,849 |  | 3,797 |  | 1,851 |  | 62,017
Provision for (reversal of) potential credit losses | 13,805 |  | 7,099 |  | 877 |  | (285) |  | 21,496
As at September 30, 2020 | 25,325 |  | 51,948 |  | 4,674 |  | 1,566 |  | 83,513
(1)For a description of how the credit loss provision for direct financing leases, direct financing and sales-type leases and other within equity-accounted joint ventures, loans to equity-accounted joint ventures and guarantees of debt was determined for the three and nine months ended September 30, 2021 and 2020, see "Item 18 – Financial Statements: Note 11b" in the Company’s Annual Report on Form 20-F for the year ended December 31, 2020. (2)The changes in credit loss provision of ($1.4) million and $2.9 million for the three and nine months ended September 30, 2021, respectively ($13.8 million and $14.2 million for the three and nine months ended September 30, 2020, respectively), relating to the Company's consolidated vessels, are included in other expense on the unaudited consolidated statements of income. The change in the credit loss provision for the nine months ended September 30, 2021 primarily reflects a decline in the estimated charter-free valuations for certain types of Teekay LNG's LNG carriers at the end of their time-charter contract, which are accounted for as direct financing leases. These estimated future charter-free values are subject to change based on the underlying LNG shipping market fundamentals and it is possible that these estimates could vary by material amounts in future periods. The changes in credit loss provision of ($1.7) million and $5.7 million for the three and nine months ended September 30, 2021, respectively ($7.1 million and $15.7 million for the three and nine months ended September 30, 2020, respectively), relating to the direct financing and sales-type leases and other within Teekay LNG's equity-accounted joint ventures are included in equity income. The change in credit loss provision for the nine months ended September 30, 2021 primarily reflects a decline in the estimated charter-free valuations for certain types of LNG carriers at the end of their time-charter contract, which are accounted for as direct financing and sales-type leases. The changes in the credit loss provision for the Company's consolidated vessels and the vessels within Teekay LNG's equity-accounted joint ventures for the nine months ended September 30, 2021 do not reflect any material change in expectations of the charterers' ability to make their time-charter hire payments as they come due compared to the beginning of the year.

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- 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
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