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Derivative Instruments and Hedging Activities (Tables)
 6 Months Ended
Jun. 30, 2016
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Foreign Currency Forward Contracts
As at June 30, 2016, the Partnership was committed to the following foreign currency forward contracts:
 
Contract Amount
in Foreign
Currency
(thousands)
 
Fair Value / Carrying
Amount of Asset (Liability)
(in thousands of U.S. Dollars)
Non-hedge
 

Average
Forward
Rate (1)
Expected Maturity
 
 
 
 
2016
2017
 
 
 
 
(in thousands of U.S. Dollars)
Norwegian Kroner
422,500

 
(2,302
)
 
8.00

 
24,284

 
28,569

Euro
4,500

 
124

 
0.92

 
4,886

 
—

Singapore Dollar
19,637

 
(17
)
 
1.35

 
14,592

 
—

 
 
 
(2,195
)
 
 
 
43,762

 
28,569

(1)Average forward rate represents the contracted amount of foreign currency one U.S. Dollar will buy.
Interest Rate Swap Agreements
As at June 30, 2016, the Partnership was committed to the following interest rate swap agreements:
 
Interest
Rate
Index
 
Notional
Amount
$
 
Fair Value /
Carrying
Amount of
Asset (Liability)
$
 
Weighted-
Average
Remaining
Term
(years)
 
Fixed
Interest
Rate
(%) (1)
U.S. Dollar-denominated interest rate swaps (2)
LIBOR
 
950,000

 
(225,288
)
 
5.4
 
4.0
U.S. Dollar-denominated interest rate swaps (3)
LIBOR
 
1,229,401

 
(110,646
)
 
5.1
 
2.7
U.S. Dollar-denominated interest rate swaps (4)
LIBOR
 
45,328

 
(2,513
)
 
12.0
 
2.5
 
 
 
2,224,729

 
(338,447
)
 
 
 
 
(1)
Excludes the margin the Partnership pays on its variable-rate debt, which as at June 30, 2016, ranged between 0.30% and 4.00%
(2)
Notional amount remains constant over the term of the swap.
(3)
Principal amount reduces quarterly or semi-annually.
(4)
The interest rate swap is being used to economically hedge expected interest payments on new debt that is planned to be outstanding from 2016 to 2028.
Derivative Instruments, Gain (Loss)
For the periods indicated, the following table presents the effective and ineffective portion of losses on interest rate swap agreements designated and qualifying as cash flow hedges. The following table excludes any interest rate swap agreements designated and qualifying as cash flow hedges in the Partnership’s equity accounted joint ventures.
Three Months Ended June 30, 2016
 
Three Months Ended June 30, 2015
Effective
 
Effective
 

 
 
 
Effective
 
Effective
 

Portion
 
Portion
 

 
 
 
Portion
 
Portion
 

Recognized
 
Reclassified
 
Ineffective
 
 
 
Recognized
 
Reclassified
 
Ineffective
in AOCI (1)
 
from AOCI (2)
 
Portion (3)
 
 
 
in AOCI (1)
 
from AOCI (2)
 
Portion (3)
(1,322)
 
—
 
807
 
Interest expense
 
—
 
—
 
—
(1,322)
 
—
 
807
 
 
 
—
 
—
 
—
 
 
 
 
 
 
 
 
 
 
 
 
 
Six Months Ended June 30, 2016
 
Six Months Ended June 30, 2015
Effective
 
Effective
 

 
 
 
Effective
 
Effective
 

Portion
 
Portion
 

 
 
 
Portion
 
Portion
 

Recognized
 
Reclassified
 
Ineffective
 
 
 
Recognized
 
Reclassified
 
Ineffective
in AOCI (1)
 
from AOCI (2)
 
Portion (3)
 
 
 
in AOCI (1)
 
from AOCI (2)
 
Portion (3)
(4,510)
 
—
 
858
 
Interest expense
 
—
 
—
 
—
(4,510)
 
—
 
858
 
 
 
—
 
—
 
—

(1)
effective portion of designated and qualifying cash flow hedges recognized in accumulated other comprehensive loss (or AOCI).
(2)
effective portion of designated and qualifying cash flow hedges recorded in AOCI during the term of the hedging relationship and reclassified to earnings.
(3)
ineffective portion of designated and qualifying cash flow hedges.
Location and Fair Value Amounts of Assets (Liabilities) of Partnership's Derivative Instruments
The following table presents the location and fair value amounts of derivative instruments, segregated by type of contract, on the Partnership’s balance sheets.
 
Other Current Assets
$
 
Other Assets
$
 
Accrued
Liabilities
$
 
Current
Portion of
Derivative
Liabilities
$
 
Derivative
Liabilities
$
As at June 30, 2016
 
 

 
 
 
 
 
 
Foreign currency contracts
318

 
253

 
—

 
(2,746
)
 
(20
)
Cross currency swaps
—

 
—

 
(1,948
)
 
(19,985
)
 
(122,674
)
Interest rate swaps
—

 
—

 
(6,885
)
 
(41,193
)
 
(290,369
)

318

 
253

 
(8,833
)
 
(63,924
)
 
(413,063
)
As at

 

 

 

 

As at December 31, 2015

 

 

 

 

Foreign currency contracts
80

 
—

 
—

 
(10,266
)
 
(1,323
)
Cross currency swaps
—

 
—

 
(2,196
)
 
(42,878
)
 
(138,253
)
Interest rate swaps
—

 
1,894

 
(7,827
)
 
(148,312
)
 
(81,753
)
 
80

 
1,894

 
(10,023
)
 
(201,456
)
 
(221,329
)
Effect of Losses on Derivatives
The effect of the (losses) gains on these derivatives in the consolidated statements of (loss) income for the three and six months ended June 30, 2016 and 2015 is as follows:
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2016
 
2015
 
2016
 
2015
 
$
 
$
 
$
 
$
Realized losses on derivative instruments
 
 
 
 
 
 
 
Interest rate swaps
(13,515
)
 
(16,101
)
 
(27,482
)
 
(29,520
)
Foreign currency forward contracts
(1,687
)
 
(2,571
)
 
(4,620
)
 
(5,824
)

(15,202
)
 
(18,672
)
 
(32,102
)
 
(35,344
)
Unrealized (losses) gains on derivative instruments

 

 

 

Interest rate swaps
(47,818
)
 
62,188

 
(99,739
)
 
21,148

Foreign currency forward contracts
983

 
6,213

 
9,314

 
1,117


(46,835
)
 
68,401

 
(90,425
)
 
22,265

Total realized and unrealized (losses) gains on derivative instruments
(62,037
)
 
49,729

 
(122,527
)
 
(13,079
)
Effect of Gain (Loss) on Cross Currency Swaps on Consolidated Statements of Income (Loss)
The effect of the (losses) gains on cross currency swaps in the consolidated statements of (loss) income for the three and six months ended June 30, 2016 and 2015 is as follows:
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2016
 
2015
 
2016
 
2015
 
$
 
$
 
$
 
$
Realized losses
(2,671
)
 
(1,953
)
 
(37,947
)
 
(4,333
)
Unrealized (losses) gains
(14,422
)
 
12,525

 
38,473

 
(19,676
)
Total realized and unrealized (losses) gains on cross currency swaps
(17,093
)
 
10,572

 
526

 
(24,009
)
Schedule of Cross Currency Contracts Statement of Financial Position [Table Text Block]
As at June 30, 2016, the Partnership was committed to the following cross currency swaps:
Notional
Amount
NOK
(thousands)
 
Principal
Amount
USD
(thousands)
 
Floating Rate Receivable
 
Fixed Rate
Payable
 
Fair Value /
Asset (Liability)
$
 
Remaining
Term
(years)
 
 
Reference
Rate
 
Margin
 
 
 
 
 
600,000 (1)(2)

 
101,351


NIBOR
 
5.75
%
 
8.84
%
 
(34,817
)
 
2.4
800,000 (1)(3)

 
143,536


NIBOR
 
5.75
%
 
7.58
%
 
(55,132
)
 
2.5
1,000,000

 
162,200

 
NIBOR
 
4.25
%
 
7.45
%
 
(54,658
)
 
2.6
 
 
 
 
 
 
 
 
 
 
(144,607
)
 
 
(1) Notional amount reduces equally with NOK bond repayments (see note 6).
(2)
Excludes an economic hedge on the foreign currency exposure for a three percent premium upon maturity of the NOK bonds which exchanges NOK 7.2 million for $1.2 million (see note 6).
(3) Excludes an economic hedge on the foreign currency exposure for a three percent premium upon maturity of the NOK bonds which exchanges NOK 19.2 million for $3.4 million (see note 6).