XML 119 R12.htm IDEA: XBRL DOCUMENT v3.19.3.a.u2
FAIR VALUE MEASUREMENTS (Notes)
 12 Months Ended
Dec. 31, 2019
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS

Recurring Fair Value Measurements - The following tables set forth our recurring fair value measurements for the periods indicated:
 
 
December 31, 2019
 
 
Level 1
 
Level 2
 
Level 3
 
Total - Gross
 
Netting (a)
 
Total - Net
 
 
(Thousands of dollars)
Derivative assets
 
 
 
 
 
 
 
 
 
 
 
 
Commodity contracts
 
 
 
 
 
 
 
 
 
 
 
 
Financial contracts
 
$
10,892

 
$
—

 
$
55,557

 
$
66,449

 
$
(28,588
)
 
$
37,861

Interest-rate contracts
 
—

 
581

 
—

 
581

 
—

 
581

Total derivative assets
 
$
10,892

 
$
581

 
$
55,557

 
$
67,030

 
$
(28,588
)
 
$
38,442

 
 
 
 
 
 
 
 
 
 
 
 
 
Derivative liabilities
 
 
 
 
 
 
 
 
 
 
 
 
Commodity contracts
 
 
 
 
 
 
 
 
 
 
 
 
Financial contracts
 
$
(4,811
)
 
$
—

 
$
(24,785
)
 
$
(29,596
)
 
$
28,588

 
$
(1,008
)
Interest-rate contracts
 
—

 
(201,941
)
 
—

 
(201,941
)
 
—

 
(201,941
)
Total derivative liabilities
 
$
(4,811
)
 
$
(201,941
)
 
$
(24,785
)
 
$
(231,537
)
 
$
28,588

 
$
(202,949
)
(a) - Derivative assets and liabilities are presented in our Consolidated Balance Sheet on a net basis. We net derivative assets and liabilities when a legally enforceable master-netting arrangement exists between the counterparty to a derivative contract and us. At December 31, 2019, we held no cash and posted $8.8 million of cash with various counterparties, which is included in other current assets in our Consolidated Balance Sheet.

 
 
December 31, 2018
 
 
Level 1
 
Level 2
 
Level 3
 
Total - Gross
 
Netting (a)
 
Total - Net
 
 
(Thousands of dollars)
Derivative assets
 
 
 
 
 
 
 
 
 
 
 
 
Commodity contracts
 
 
 
 
 
 
 
 
 
 
 
 
Financial contracts
 
$
10,812

 
$
—

 
$
69,165

 
$
79,977

 
$
(32,739
)
 
$
47,238

Physical contracts
 
—

 
—

 
1,142

 
1,142

 
—

 
1,142

Interest-rate contracts
 
—

 
19,005

 
—

 
19,005

 
—

 
19,005

Total derivative assets
 
$
10,812

 
$
19,005

 
$
70,307

 
$
100,124

 
$
(32,739
)
 
$
67,385

 
 
 
 
 
 
 
 
 
 
 
 
 
Derivative liabilities
 
 

 
 

 
 

 
 

 
 

 
 

Commodity contracts
 
 
 
 
 
 
 
 
 
 
 
 
Financial contracts
 
$
(2,916
)
 
$
—

 
$
(29,823
)
 
$
(32,739
)
 
$
32,739

 
$
—

Interest-rate contracts
 
—

 
(99,260
)
 
—

 
(99,260
)
 
—

 
(99,260
)
Total derivative liabilities
 
$
(2,916
)
 
$
(99,260
)
 
$
(29,823
)
 
$
(131,999
)
 
$
32,739

 
$
(99,260
)
(a) - Derivative assets and liabilities are presented in our Consolidated Balance Sheet on a net basis. We net derivative assets and liabilities when a legally enforceable master-netting arrangement exists between the counterparty to a derivative contract and us. At December 31, 2018, we held no cash and posted $0.8 million of cash with various counterparties, which is included in other current assets in our Consolidated Balance Sheet.

The following table sets forth a reconciliation of our Level 3 fair value measurements for the periods indicated:
 
 
Years Ended
 
 
December 31,
Derivative Assets (Liabilities)
 
2019
 
2018
 
 
(Thousands of dollars)
Net assets (liabilities) at beginning of period
 
$
40,484

 
$
(32,838
)
Total changes in fair value:
 
 
 
 
Gains (losses) included in net income (a)
 
—

 
(140
)
Settlements included in net income (a)
 
(40,344
)
 
29,141

New Level 3 derivatives included in other comprehensive income (loss) (b)
 
30,627

 
37,106

Unrealized change included in other comprehensive income (loss) (b)
 
5

 
7,215

Net assets (liabilities) at end of period
 
$
30,772

 
$
40,484


(a) - Included in commodity sales revenues/cost of sales and fuel in our Consolidated Statements of Income.
(b) - Included in change in fair value of derivatives in our Consolidated Statements of Comprehensive Income.

During the years ended December 31, 2019 and 2018, there were no transfers in or out of Level 3 of the fair value hierarchy.

Other Financial Instruments - The approximate fair value of cash and cash equivalents, accounts receivable, accounts payable and short-term borrowings is equal to book value due to the short-term nature of these items. Our cash and cash equivalents are composed of bank and money market accounts and are classified as Level 1. Our short-term borrowings are classified as Level 2 since the estimated fair value of the short-term borrowings can be determined using information available in the commercial paper market.

The estimated fair value of our consolidated long-term debt, including current maturities, was $13.8 billion and $9.6 billion at December 31, 2019 and 2018, respectively. The book value of our consolidated long-term debt, including current maturities, was $12.5 billion and $9.4 billion at December 31, 2019 and 2018, respectively. The estimated fair value of the aggregate senior notes outstanding was determined using quoted market prices for similar issues with similar terms and maturities. The estimated fair value of our consolidated long-term debt is classified as Level 2.