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Financial Instruments
 6 Months Ended
Jun. 30, 2016
Investments, All Other Investments [Abstract]  
Financial Instruments
Financial Instruments

a)
Fair Value Measurements

For a description of how the Partnership estimates fair value and for a description of the fair value hierarchy levels, see Note 4 in the Partnership’s audited consolidated financial statements filed with its Annual Report on Form 20-F for the year ended December 31, 2015. 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 Partnership’s financial instruments that are not accounted for at fair value on a recurring basis.
 
 
 
June 30, 2016
 
December 31, 2015
 
Fair Value
Hierarchy
Level
 
Carrying
Amount
Asset
 (Liability)
$
 
Fair Value
Asset 
(Liability)
$
 
Carrying
Amount
Asset 
(Liability)
$
 
Fair Value
Asset 
(Liability)
$
Recurring:
 
 
 
 
 
 
 
 
 
Cash and cash equivalents and restricted cash
Level 1
 
409,248

 
409,248

 
318,993

 
318,993

Logitel contingent consideration (see below)
Level 3
 
—

 
—

 
(14,830
)
 
(14,830
)
Derivative instruments (note 9)

 
 
 
 
 
 
 
 
Interest rate swap agreements
Level 2
 
(338,447
)
 
(338,447
)
 
(235,998
)
 
(235,998
)
Cross currency swap agreements
Level 2
 
(144,607
)
 
(144,607
)
 
(183,327
)
 
(183,327
)
Foreign currency forward contracts
Level 2
 
(2,195
)
 
(2,195
)
 
(11,509
)
 
(11,509
)


 
 
 
 
 
 
 
 
Non-Recurring:

 
 
 
 
 
 
 
 
Vessels held for sale (note 14)
Level 2
 
—

 
—

 
55,450

 
55,450

Vessels and equipment (note 14)
Level 2
 
—

 
—

 
100,600

 
100,600



 
 
 
 
 
 
 
 
Other:

 
 
 
 
 
 
 
 
Long-term debt - public (note 6)
Level 1
 
(577,268
)
 
(490,954
)
 
(620,746
)
 
(473,729
)
Long-term debt - non-public (note 6)
Level 2
 
(2,663,963
)
 
(2,579,967
)
 
(2,743,128
)
 
(2,783,597
)

Contingent consideration liability – In August 2014, the Partnership acquired 100% of the outstanding shares of Logitel Offshore Holding AS (or Logitel), a Norway-based company focused on high-end Units for Maintenance and Safety (or UMS), from Cefront Technology AS (or Cefront) for $4.0 million. The Partnership paid the purchase price in cash at closing, plus an additional amount of up to $27.6 million, depending on certain performance criteria.

During the second quarter of 2016, the Partnership canceled the UMS construction contracts for its two remaining UMS newbuildings. This is expected to eliminate any future contingent consideration payments. Consequently, the contingent liability was reversed in the second quarter of 2016. The gain associated with this reversal is included in other (expense) income - net on the Partnership's consolidated statements of loss for the three and six months ended June 30, 2016.

Changes in the estimated fair value of the Partnership’s contingent consideration liability relating to the acquisition of Logitel, which is measured at fair value on a recurring basis using significant unobservable inputs (Level 3), during the three and six months ended June 30, 2016 and 2015 are as follows:

 
Three Months Ended
June 30,
 
Six months ended
June 30,
 
2016
 
2015
 
2016
 
2015
 
Asset (Liability)
 
Asset (Liability)
 
$
 
$
 
$
 
$
Balance at beginning of period
(15,221
)
 
(21,562
)
 
(14,830
)
 
(21,448
)
Acquisition of Logitel
—

 
2,569

 
—

 
2,569

Settlement of liability
—

 
3,540

 
—

 
3,540

Gain included in Other (expense) income - net
15,221

 
161

 
14,830

 
47

Balance at end of period
—

 
(15,292
)
 
—

 
(15,292
)


b)
Financing Receivables
The following table contains a summary of the Partnership’s financing receivables by type of borrower and the method by which the Partnership monitors the credit quality of its financing receivables on a quarterly basis:
 
Credit Quality
Indicator
 
Grade
 
June 30,
2016
 
December 31,
2015
 
 
 
$
 
$
Direct financing leases
Payment activity
 
Performing
 
19,068

 
17,471