Derivative Instruments and Hedging Activities (Tables)

12 Months Ended

Dec. 31, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Commitment of Foreign Currency Forward Contracts

As at December 31, 2014, the Company was committed to the following foreign currency forward contracts:


	Contract Amount in Foreign Currency		Average Forward Rate ⁽¹⁾		Fair Value / Carrying Amount of Asset (Liability) $			Expected Maturity 2015 $		2016 $
Norwegian Kroner		861,000		6.44		(18,407	)		91,400		42,253

						(18,407	)		91,400		42,253

(1)	Average contractual exchange rate represents the contracted amount of foreign currency one U.S. Dollar will buy.

Commitment of Cross Currency Swaps

As at December 31, 2014, the Company was committed to the following cross currency swaps:


												Fair Value / Carrying
Notional		Notional		Floating Rate Receivable								Amount of			Remaining
Amount NOK		Amount USD		Reference Rate		Margin			Fixed Rate Payable			Asset / (Liability)			Term (years)
	700,000		122,800		NIBOR		4.75	%		5.52	%		(30,501	)		0.8
	500,000		89,710		NIBOR		4.00	%		4.80	%		(23,843	)		1.1
	600,000		101,351		NIBOR		5.75	%		7.49	%		(24,732	)		2.1
	700,000		125,000		NIBOR		5.25	%		6.88	%		(35,766	)		2.3
	800,000		143,536		NIBOR		4.75	%		5.93	%		(38,898	)		3.1
	900,000		150,000		NIBOR		4.35	%		6.43	%		(34,620	)		3.7
	1,000,000		162,200		NIBOR		4.25	%		6.28	%		(33,031	)		4.1

													(221,391	)

Interest Rate Swap Agreements

As at December 31, 2014, the Company was committed to the following interest rate swap agreements related to its LIBOR-based debt and EURIBOR-based debt, whereby certain of the Company’s floating-rate debt were swapped with fixed-rate obligations:


	Interest Rate Index	Principal Amount $		Fair Value / Carrying Amount of Asset / (Liability) $			Weighted- Average Remaining Term (years)		Fixed Interest Rate (%)⁽¹⁾
LIBOR-Based Debt:
U.S. Dollar-denominated interest rate swaps ⁽²⁾	LIBOR		3,357,287		(342,772	)		5.8		3.5
U.S. Dollar-denominated interest rate swaps ⁽³⁾	LIBOR		500,000		(17,150	)		0.8		3.1
EURIBOR-Based Debt:
Euro-denominated interest rate swaps ^{(4) (5)}	EURIBOR		284,993		(45,810	)		6.0		3.1

					(405,732	)

(1)	Excludes the margins the Company pays on its variable-rate debt, which, as of December 31, 2014, ranged from 0.3% to 3.95%.

(2)	Principal amount of $200 million is fixed at 2.14%, unless LIBOR exceeds 6%, in which case the Company pays a floating rate of interest.

(3)

Interest rate swap with an aggregate principal amount of $180 million is being used to economically hedge expected interest payments on new debt that is planned to be outstanding from 2016 to 2028. The interest rate swap is subject to mandatory early termination in 2015 whereby the swap will be settled based on its fair value at that time. Interest rate swaps with an aggregate principal amount of $320 million are being used to economically hedge expected interest payments on new debt that is planned to be outstanding from 2016 to 2021. These interest rate swaps are subject to mandatory early termination in 2016 whereby the swaps will be settled based on their fair value at that time.

(4)	Principal amount reduces monthly to 70.1 million Euros ($84.8 million) by the maturity dates of the swap agreements.

(5)	Principal amount is the U.S. Dollar equivalent of 235.6 million Euros.

Location and Fair Value Amounts of Derivative Instruments

The following table presents the location and fair value amounts of derivative instruments, segregated by type of contract, on the Company’s consolidated balance sheets.


	Current							Current
	Portion of							Portion of
	Derivative		Derivative		Accrued			Derivative			Derivative
	Assets		Assets		Liabilities			Liabilities			Liabilities
As at December 31, 2014
Derivatives not designated as a cash flow hedge:
Foreign currency contracts		—		—		—			(14,218	)		(4,189	)
Interest rate swap agreements		—		5,101		(22,656	)		(148,006	)		(240,171	)
Cross currency swap agreements		—		—		(1,835	)		(41,733	)		(177,822	)
Stock purchase warrants		—		9,314		—			—			—

		—		14,415		(24,491	)		(203,957	)		(422,182	)

As at December 31, 2013
Derivatives not designated as a cash flow hedge:
Foreign currency contracts		482		12		—			(1,819	)		(155	)
Interest rate swap agreements		21,779		69,785		(22,025	)		(140,503	)		(248,091	)
Cross currency swap agreements		779		—		3			(1,677	)		(51,324	)

		23,040		69,797		(22,022	)		(143,999	)		(299,570	)

Effect of Gain (Loss) on Derivatives Not Designated as Hedging Instruments

The effect of the gains and losses on derivatives not designated as hedging instruments in the consolidated statements of income (loss) are as follows:


	Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,
	2014			2013			2012
	$			$			$
Realized (losses) gains relating to:
Interest rate swap agreements		(125,424	)		(122,439	)		(123,277	)
Interest rate swap agreement terminations		(1,319	)		(35,985	)		—
Foreign currency forward contracts		(4,436	)		(2,027	)		1,155
Foinaven embedded derivative		—			—			11,452

		(131,179	)		(160,451	)		(110,670	)

Unrealized (losses) gains relating to:
Interest rate swap agreements		(86,045	)		182,800			26,770
Foreign currency forward contracts		(16,926	)		(3,935	)		6,933
Stock purchase warrants		2,475			—			—
Foinaven embedded derivative		—			—			(3,385	)

		(100,496	)		178,865			30,318

Total realized and unrealized (losses) gains on derivative instruments		(231,675	)		18,414			(80,352	)

Effect of Loss on Cross Currency Swaps

The effect of the loss on cross currency swaps on the consolidated statements of income (loss) is as follows:


	Year Ended December 31,
	2014			2013			2012
	$			$			$
Realized gain on partial termination of cross currency swap		—			6,800			—
Realized (losses) gains		(3,955	)		2,089			3,628
Unrealized (losses) gains		(167,334	)		(65,387	)		10,715

Total realized and unrealized (losses) gains on cross currency swaps		(171,289	)		(56,498	)		14,343