CONSOLIDATED VARIABLE INTEREST ENTITIES

12 Months Ended

Dec. 31, 2019

CONSOLIDATED VARIABLE INTEREST ENTITIES [Abstract]

CONSOLIDATED VARIABLE INTEREST ENTITIES

CONSOLIDATED VARIABLE INTEREST ENTITIES

As at December 31, 2019, the Company's consolidated financial statements included 40 variable interest entities, all of which are wholly-owned subsidiaries. These subsidiaries own vessels with existing charters during which related and third parties have fixed price options to purchase the respective vessels, at dates varying from January 2020 to November 2033. It has been determined that the Company is the primary beneficiary of these entities, as none of the purchase options are deemed to be at bargain prices and none of the charters include sales options.

At December 31, 2019, 24 of the consolidated variable interest entities have a vessel which is accounted for as investments in sales-type leases, direct financing leases and leaseback assets. At December 31, 2019, the vessels had a carrying value of $588.7 million, unearned lease income of $258.1 million and estimated residual value of $333.3 million. The outstanding loan balances in 18 of these entities amounted to a total of $183.2 million, of which the short-term portion was $9.3 million as at December 31, 2019. The remaining, two of the 24 vessels financed through a lease and had outstanding total finance lease liabilities of $263.6 million, of which the short-term portion was $12.4 million, as at December 31, 2019.

At December 31, 2019, 13 fully consolidated variable interest entities each own vessels which are accounted for as operating lease assets. At December 31, 2019 the vessels had a total net book value of $266.1 million. The outstanding loan balances in these entities amounted to a total of $123.3 million, of which the short-term portion was $13.9 million as at December 31, 2019.

The remaining three consolidated variable interest entities each own vessels which are accounted for as vessels under finance lease and had a total net book value of $295.3 million at December 31, 2019. The outstanding total finance lease liabilities for these entities amounted to $250.9 million, of which the short-term portion was $19.1 million as at December 31, 2019.