| Fair Value of Financial Instruments and Other Non-Financial Assets |
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.
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June 30,
2013 |
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December 31,
2012 |
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Fair
Value
Hierarchy
Level
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Carrying
Amount
Asset (Liability)
$ |
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Fair
Value
Asset (Liability)
$ |
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Carrying
Amount
Asset (Liability)
$ |
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Fair
Value
Asset (Liability)
$ |
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Recurring
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Cash and cash equivalents, restricted cash, and marketable
securities
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Level 1 |
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1,076,022 |
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1,076,022 |
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1,178,118 |
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1,178,118 |
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Derivative instruments (note 14)
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Interest rate swap agreements—assets
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Level 2 |
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118,683 |
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118,683 |
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165,688 |
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165,688 |
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Interest rate swap agreements—liabilities
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Level 2 |
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(504,429 |
) |
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(504,429 |
) |
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(667,825 |
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(667,825 |
) |
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Cross currency swap agreement
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Level 2 |
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(40,963 |
) |
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(40,963 |
) |
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13,886 |
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13,886 |
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Foreign currency contracts
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Level 2 |
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(4,671 |
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(4,671 |
) |
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2,885 |
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2,885 |
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Non-recurring
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Vessels and equipment
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Level 2 |
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— |
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— |
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287,983 |
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287,983 |
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Vessels held for sale
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Level 2 |
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6,800 |
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6,800 |
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22,364 |
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22,364 |
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Other
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Investment in term loans
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Level 3 |
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188,895 |
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184,246 |
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188,756 |
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186,048 |
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Loans to equity accounted investees and joint venture
partners—Current
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Level 3 |
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2,743 |
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2,743 |
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139,183 |
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139,183 |
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Loans to equity accounted investees and joint venture
partners—Long-term
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(1) |
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177,111 |
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(1 |
) |
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67,720 |
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(1 |
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Long-term debt—public (note 7)
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Level 1 |
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(1,025,778 |
) |
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(1,072,211 |
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(914,338 |
) |
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(949,326 |
) |
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Long-term debt—non-public (note 7)
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Level 2 |
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(4,717,331 |
) |
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(4,441,873 |
) |
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(4,645,376 |
) |
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(4,329,117 |
) |
| (1) |
In these consolidated financial
statements, the Company’s long-term loans to and equity
investments in equity accounted investees form the aggregate
carrying value of the Company’s interests in entities
accounted for by the equity method. In addition, the long-term
loans to joint venture partners together with the joint venture
partner’s equity investment in joint ventures form the net
aggregate carrying value of the Company’s interest in the
joint ventures. The fair value of the individual components of such
aggregate interests is not determinable. |
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| Summary of Financing Receivables |
The following table contains a summary of the Company’s
financing receivables by type of borrower and the method by which
the Company monitors the credit quality of its financing
receivables on a quarterly basis.
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Class of Financing Receivable
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Credit Quality Indicator
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Grade
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June 30,
2013
$ |
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December 31,
2012
$ |
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Direct financing leases
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Payment activity |
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Performing |
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430,414 |
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436,601 |
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Other loan receivables
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Investment in term loans (note 6b)
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Collateral |
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Non-Performing |
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188,895 |
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188,756 |
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Loans to equity accounted investees and joint venture partners
(1)
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Other internal metrics |
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Performing |
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179,854 |
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206,903 |
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Long term receivable included in other assets
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Payment activity |
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Performing |
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— |
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1,704 |
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799,163 |
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833,964 |
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| (1) |
Teekay LNG owns a 99% interest in
Teekay Tangguh, which owns a 70% interest in Teekay BLT Corporation
(or Teekay Tangguh Subsidiary). During the year ended
December 31, 2012, one of Teekay LNG‘s joint venture
partner‘s parent company, PT Berlian Laju Tanker (or
BLT), suspended trading on the Jakarta Stock Exchange and
entered into a court-supervised debt restructuring in Indonesia.
The Company believes the loans to BLT and Teekay LNG‘s joint
venture partner, BLT LNG Tangguh Corporation, totaling $24.0
million as at June 30, 2013 (December 31, 2012—$24.0
million), are collectible given the expected cash flows anticipated
to be generated by the Teekay Tangguh Subsidiary that can be used
to repay the loan and given the underlying collateral securing the
loans to BLT. |
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