Fair Value of Financial Instruments, Derivatives and Fair Value Disclosures (Tables)
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9 Months Ended |
Sep. 30, 2018 |
Fair Value of Financial Instruments, Derivatives and Fair Value Disclosures [Abstract] |
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Fair Value, by Balance Sheet Grouping |
The estimated fair values of the Company’s financial instruments, other than derivatives that are not measured at fair value on a recurring basis, categorized based upon the fair value hierarchy, are as follows:
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Fair Value
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Level 1
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Level 2
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September 30, 2018:
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Cash and cash equivalents (1)
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$
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123,860
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$
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123,860
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$
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-
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2017 Term Loan Facility
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(479,604)
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-
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(479,604)
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ABN Term Loan Facility
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(27,593)
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-
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(27,593)
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Sinosure Credit Facility
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(299,179)
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-
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(299,179)
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8.5% Senior Notes
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(24,800)
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(24,800)
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-
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10.75% Subordinated Notes
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(27,931)
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-
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(27,931)
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December 31, 2017:
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Cash and cash equivalents (1)
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$
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70,606
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$
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70,606
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$
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-
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2017 Term Loan Facility
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(550,689)
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-
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(550,689)
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2017 Revolver Facility
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(30,227)
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-
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(30,227)
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(1) Includes non-current restricted cash of $32,313 and $10,579 at September 30, 2018 and December 31, 2017, respectively.
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Schedule of Derivative Instruments in Statement of Financial Position, Fair Value |
The following table presents information with respect to the fair values of derivatives reflected in the September 30, 2018 and December 31, 2017 balance sheets on a gross basis by transaction:
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Asset Derivatives
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Liability Derivatives
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Balance Sheet
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Balance Sheet
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Location
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Amount
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Location
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Amount
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September 30, 2018:
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Derivatives designated as hedging instruments:
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Interest rate cap:
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Current portion
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Current portion of derivative asset
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$
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619
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Current portion of derivative liability
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$
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-
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Long-term portion
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Long-term derivative asset
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2,278
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Long-term derivative liability
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-
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Interest rate swaps:
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Current portion
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Current portion of derivative asset
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-
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Current portion of derivative liability
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(770)
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Long-term portion
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Long-term derivative asset
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836
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Long-term derivative liability
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-
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Total derivatives designated as hedging instruments
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$
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3,733
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$
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(770)
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December 31, 2017:
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Derivatives designated as hedging instruments:
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Interest rate cap:
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Current portion
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Current portion of derivative asset
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$
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16
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Current portion of derivative liability
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$
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-
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Long-term portion
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Long-term derivative asset
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886
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Long-term derivative liability
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-
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Total derivatives designated as hedging instruments
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$
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902
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$
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-
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Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss) |
The effect of cash flow hedging relationships recognized in other comprehensive income excluding amounts reclassified from accumulated other comprehensive loss (effective portion), including hedges of equity method investees, for the three and nine months ended September 30, 2018 and 2017 follows:
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Three Months Ended
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Nine Months Ended
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September 30,
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September 30,
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2018
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2017
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2018
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2017
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Interest rate swaps
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$
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2,098
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$
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(696)
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$
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6,319
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$
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(3,087)
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Interest rate cap
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450
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-
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1,996
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-
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Total
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$
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2,548
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$
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(696)
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$
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8,315
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$
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(3,087)
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The effect of cash flow hedging relationships on the unaudited condensed consolidated statement of operations is presented excluding hedges of equity method investees. The effect of INSW’s cash flow hedging relationships on the unaudited condensed consolidated statement of operations for the three and nine months ended September 30, 2018 and 2017 follows:
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Statement of Operations
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Effective Portion of Gain/(Loss)
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Reclassified from
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Accumulated Other
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For the three months ended
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Comprehensive Loss
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Ineffective Portion
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Amount of
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Amount of
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Location
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Gain/(Loss)
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Location
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Gain/(Loss)
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September 30, 2018:
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Interest rate cap
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Interest expense
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$
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(4)
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Interest expense
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$
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-
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Interest rate swaps
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Interest expense
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3
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Interest expense
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-
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Total
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$
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(1)
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$
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-
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September 30, 2017:
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Interest rate cap
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Interest expense
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$
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-
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Interest expense
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$
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-
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Total
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$
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-
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$
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-
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Statement of Operations
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Effective Portion of Gain/(Loss)
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Reclassified from
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Accumulated Other
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For the nine months ended
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Comprehensive Loss
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Ineffective Portion
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Amount of
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Amount of
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Location
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Gain/(Loss)
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Location
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Gain/(Loss)
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September 30, 2018:
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Interest rate cap
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Interest expense
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$
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(4)
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Interest expense
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$
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-
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Interest rate swaps
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Interest expense
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3
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Interest expense
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-
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Total
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$
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(1)
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$
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-
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September 30, 2017:
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Interest rate cap
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Interest expense
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$
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(131)
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Interest expense
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$
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-
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Total
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$
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(131)
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$
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-
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Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis |
The following table presents the fair values, which are pre-tax, for assets and liabilities measured on a recurring basis (excluding investments in affiliated companies):
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Fair Value
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Level 1
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Level 2
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Assets/(Liabilities) at September 30, 2018:
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Derivative Assets (interest rate cap)
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$
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3,733
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$
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-
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$
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3,733
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(1)
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Derivative Liabilities (interest rate swap)
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(770)
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-
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(770)
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(1)
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Assets/(Liabilities) at December 31, 2017:
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Derivative Assets (interest rate cap)
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$
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902
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$
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-
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$
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902
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(1)
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(1)For interest rate caps and swaps, fair values are derived using valuation models that utilize the income valuation approach. These valuation models take into account contract terms such as maturity, as well as other inputs such as interest rate yield curves and creditworthiness of the counterparty and the Company.
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Schedule of Fair Value, Assets and Liabilities Measured on Nonrecurring Basis |
The following table summarizes the fair values of assets for which an impairment charge was recognized for the three and nine months ended September 30, 2018:
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Description
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Fair Value
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Level 2
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Total Impairment Charges
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Assets:
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Crude Tankers - Vessels held and used (1)(2)
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7,025
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$
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7,025
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$
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(948)
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Crude Tankers - Vessels held for sale (1)(2)
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$
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17,665
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$
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17,665
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$
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(16,419)
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(1)
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Pre-tax impairment charges of $948 related to one Panamax vessel and $16,419 related to one VLCC vessel in the International Crude Tanker segment were recorded during the three-month periods ended June 30, 2018 and September 30, 2018, respectively. The held-for-sale impairment charges aggregating $16,419 as of September 30, 2018 included a charge of $14,226 to write the value of the vessel down to its estimated fair value, and estimated costs to sell the vessel of $361 and write-off of assets on the vessel of $1,832 which were incurred as a result of held-for-sale impairment.
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(2)
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Fair value measurement of $7,025 at June 30, 2018 used to determine the impairment for one Panamax vessel and fair value measurement of $17,665 at September 30, 2018 used to determine impairment for one VLCC vessel were based upon a market approach, which considered the expected sale prices of the vessels based on executed memorandums of agreement for the sale of each of the vessels as discussed in Note 5, "Vessels." Because sales of vessels occur somewhat infrequently the expected sales prices are considered to be Level 2.
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