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Derivative Instruments and Hedging Activities (Tables)
 6 Months Ended
Jun. 30, 2018
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Foreign Currency Forward Contracts
As at June 30, 2018, 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
 
 
 
 
2018
2019
 
 
 
 
(in thousands of U.S. Dollars)
Norwegian Kroner
500,000

 
(2,062
)
 
7.86

 
31,764

 
31,825

Euro
6,000

 
(300
)
 
0.82

 
7,280

 
—

 
 
 
(2,362
)
 
 
 
39,044

 
31,825

(1)Average forward rate represents the contracted amount of foreign currency one U.S. Dollar will buy.
Schedule of Cross Currency Contracts Statement of Financial Position
As at June 30, 2018, the Partnership was committed to the following cross currency swap:
Notional
Amount
NOK
(thousands)
 
Principal
Amount
USD
(thousands)
 
Floating Rate Receivable
 
Fixed Rate
Payable
 
Fair Value /
Asset (Liability)
$
 
Remaining
Term
(years)
 
 
Reference
Rate
 
Margin
 
 
 
 
 
1,000,000
 
162,200

 
NIBOR
 
4.25
%
 
7.45
%
 
(42,118
)
 
0.6
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest Rate Swap Agreements
As at June 30, 2018, the Partnership and its consolidated subsidiaries were 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
 
700,000

 
(80,136
)
 
7.0
 
4.2
%
U.S. Dollar-denominated interest rate swaps (3) 
LIBOR
 
831,835

 
(15,985
)
 
4.1
 
3.1
%
 
 
 
1,531,835

 
(96,121
)
 
 
 
 
(1)
Excludes the margin the Partnership pays on its variable-rate debt, which as at June 30, 2018, ranged between 0.90% and 4.30%.
(2)
Notional amount remains constant over the term of the swap.
(3)
Principal amount reduces quarterly or semi-annually.
Derivative Instruments, Gain (Loss)
The following tables exclude 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, 2018
 
Three Months Ended June 30, 2017
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)
 
(614
)
 
48

 
—

 
Interest expense
 
(438
)
 
(706
)
 
(74
)
Interest expense
(614
)
 
48

 
—

 
 
 
(438
)
 
(706
)
 
(74
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Six Months Ended June 30, 2018
 
Six Months Ended June 30, 2017
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)
 
(2,495
)
 
(52
)
 
—

 
Interest expense
 
(460
)
 
(762
)
 
(7
)
Interest expense
(2,495
)
 
(52
)
 
—

 
 
 
(460
)
 
(762
)
 
(7
)
 
(1)
Effective portion of designated and qualifying cash flow hedges recognized in accumulated other comprehensive income (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, 2018
 
 

 
 
 
 
 
 
Foreign currency contracts
100

 
—

 
—

 
(2,255
)
 
(207
)
Cross currency swaps
—

 
—

 
(933
)
 
(41,185
)
 
—

Interest rate swaps
737

 
7,205

 
(2,226
)
 
(18,833
)
 
(83,004
)

837

 
7,205

 
(3,159
)
 
(62,273
)
 
(83,211
)
 
 
 
 
 
 
 
 
 
 
As at December 31, 2017

 

 

 

 

Foreign currency contracts
347

 
28

 
—

 
(665
)
 
(67
)
Cross currency swaps
—

 
—

 
(916
)
 
(4,412
)
 
(38,678
)
Interest rate swaps
233

 
1,565

 
(3,883
)
 
(37,438
)
 
(128,724
)
 
580

 
1,593

 
(4,799
)
 
(42,515
)
 
(167,469
)
Effect of Losses on Derivatives
The effect of the gain (loss) on these derivatives in the consolidated statements of (loss) income for the three and six months ended June 30, 2018 and 2017 is as follows:
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2018
 
2017
 
2018
 
2017
 
$
 
$
 
$
 
$
Realized (loss) gain on derivative instruments
 
 
 
 
 
 
 
Interest rate swaps
(5,843
)
 
(10,296
)
 
(22,986
)
 
(20,962
)
Foreign currency forward contracts
370

 
(309
)
 
988

 
(410
)

(5,473
)
 
(10,605
)
 
(21,998
)
 
(21,372
)
Unrealized gain (loss) on derivative instruments

 

 

 

Interest rate swaps
18,674

 
(12,871
)
 
67,974

 
(9,367
)
Foreign currency forward contracts
(3,760
)
 
1,679

 
(2,084
)
 
2,410


14,914

 
(11,192
)
 
65,890

 
(6,957
)
Total realized and unrealized gain (loss) on derivative instruments
9,441

 
(21,797
)
 
43,892

 
(28,329
)
Effect of Gain on Cross Currency Swaps on Consolidated Statements of Income (Loss)
The effect of the (loss) gain on cross currency swaps in the consolidated statements of (loss) income for the three and six months ended June 30, 2018 and 2017 is as follows:
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2018
 
2017
 
2018
 
2017
 
$
 
$
 
$
 
$
Realized loss
(1,444
)
 
(3,310
)
 
(2,737
)
 
(6,514
)
Unrealized (loss) gain
(4,433
)
 
8,111

 
1,905

 
12,490

Total realized and unrealized (loss) gain on cross currency swaps
(5,877
)
 
4,801

 
(832
)
 
5,976