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Derivative Instruments
 12 Months Ended
Dec. 31, 2016
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Instruments
Derivative Instruments
The following describes our derivative classifications:
Cash Flow Hedges. Includes certain derivative contracts we execute to mitigate the risk of price volatility in forecasted transactions.
Fair Value Hedges. Includes derivative contracts we hold to hedge the risk of changes in the price of our inventory.
Non-designated Derivatives. Includes derivatives we primarily transact to mitigate the risk of market price fluctuations in the form of swap or futures contracts as well as certain forward fixed price purchase and sale contracts and proprietary trading. In addition, non-designated derivatives are held to hedge the risk of currency rate fluctuations. For additional information on our derivatives accounting policy, see Note 1.
The following table presents the gross fair value of our derivative instruments and their locations on the consolidated balance sheets (in millions):
 
 
 
Gross Derivative Assets
 
 
Gross Derivative Liabilities
 
 
 
 
As of December 31,
 
 
As of December 31,
 
Derivative Instruments
 
Balance Sheet Location
2016
 
2015
 
 
2016
 
2015
 
Derivatives designated as hedging instruments
 
 
 
 
 
 
 
 
 
Commodity contracts
 
Short-term derivative assets, net
$
2.2

$
120.6

 
$
5.4

$
95.0

 
 
Identifiable intangible and other non-current assets
 
—

 
7.4

 
 
—

 
—

 
 
Accrued expenses and other current liabilities
 
86.0

 
6.3

 
 
93.5

 
2.9

 
 
Other long-term liabilities
 
5.1

 
—

 
 
10.1

 
—

Total derivatives designated as hedging instruments
$
93.3

$
134.3

 
$
108.9

$
97.9

 
 
 
 
 
 
 
 
 
 
 
 
Derivatives not designated as hedging instruments
 
 
 
 
 
 
 
 
 
Commodity contracts
Short-term derivative assets, net
$
160.3

$
241.4

 
$
86.7


26.6

 
 
Identifiable intangible and other non-current assets
 
17.1

 
17.0

 
 
6.2

 
4.8

 
 
Accrued expenses and other current liabilities
 
52.5

 
120.4

 
 
112.2

 
319.9

 
 
Other long-term liabilities
 
8.1

 
4.0

 
 
12.1

 
14.2

 
 
 
$
238.0

$
382.9

 
$
217.2

$
365.5

 
 
 
 
 
 
 
 
 
 
 
 
Foreign currency contracts
Short-term derivative assets, net
$
13.5

$
10.8

 
$
3.4

$
3.3

 
 
Identifiable intangible and other non-current assets
 
0.9

 
0.7

 
 
0.1

 
0.1

 
 
Accrued expenses and other current liabilities
 
1.6

 
0.8

 
 
2.8

 
1.7

Total derivatives not designated as hedging instruments
$
16.0

$
12.4

 
$
6.4

$
5.0

Total derivatives
 
 
$
347.2

$
529.6

 
$
332.5

$
468.5


For information regarding our derivative instruments measured at fair value after netting and collateral see Note 11.
The following table summarizes the gross notional values of our commodity and foreign currency exchange derivative contracts used for risk management purposes that were outstanding as of December 31, 2016 (in millions):
 
As of December 31,
 
Derivative Instruments
 
Units
 
2016

Commodity contracts
 
 
 
 
Long
 
BBL
 
62.7

Short
 
BBL
 
(66.7
)
 
 
 
 
 
Foreign currency exchange contracts
 
 
 
 
Long
 
AUD
 
0.2

Short
 
AUD
 
(5.2
)
Long
 
CAD
 
51.9

Short
 
CAD
 
(115.9
)
Long
 
CHF
 
—

Short
 
CHF
 
(0.6
)
Long
 
CLP
 
1,769.6

Short
 
CLP
 
(2,015.1
)
Long
 
COP
 
27,753.2

Short
 
COP
 
(48,454.9
)
Long
 
DKK
 
5.5

Short
 
DKK
 
(135.7
)
Long
 
EUR
 
5.0

Short
 
EUR
 
(38.7
)
Long
 
GBP
 
72.0

Short
 
GBP
 
(81.4
)
Long
 
INR
 
20.3

Short
 
INR
 
(92.7
)
Long
 
JPY
 
1,167.9

Short
 
JPY
 
(1,509.2
)
Short
 
KRW
 
(11,735.9
)
Long
 
MXN
 
1,229.1

Short
 
MXN
 
(1,105.6
)
Long
 
NOK
 
9.6

Short
 
NOK
 
(43.8
)
Short
 
NZD
 
(0.9
)
Short
 
PHP
 
(8.0
)
Long
 
PLN
 
—

Short
 
PLN
 
(9.7
)
Short
 
RON
 
(3.9
)
Long
 
SEK
 
36.7

Short
 
SEK
 
(6.4
)
Long
 
SGD
 
15.9

Short
 
SGD
 
(31.6
)
Long
 
ZAR
 
16.4

Short
 
ZAR
 
(15.4
)
For additional information about our use of derivative instruments, see Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
The following table presents the effect and financial statement location of our derivative instruments and related hedged items in fair value hedging relationships on our consolidated statements of income and comprehensive income (in millions):
 
 
Realized and Unrealized
Gain (Loss)
 
 
 
 
Realized and Unrealized
Gain (Loss)
 
 
 
for the Year ended
December 31,
 
 
 
 
for the Year ended
December 31,
 
Derivative Instruments
Location of Gain (Loss)
 
2016

 
2015

 
2014

 
Hedged Items
Location of Gain (Loss)
 
2016

 
2015

 
2014

Commodity contracts
 
 
 
 
 
 
 
 
Inventories
 
 
 
 
 
 
 
 
Revenue
$
—

$
49.3

$
—

 
 
Revenue
$
—

$
—

$
—

 
Cost of revenue
 
(25.3
)
 
37.5

 
132.2

 
 
Cost of revenue
 
10.8

 
(70.7
)
 
(150.9
)
Total gain (loss)
$
(25.3
)
$
86.8

$
132.2

 
Total gain (loss)
$
10.8

$
(70.7
)
$
(150.9
)

The net gains or losses recognized in income for the years ended December 31, 2016, 2015 and 2014 representing hedge ineffectiveness were -$14.5 million, $16.1 million, and -$18.7 million respectively. There were no gains or losses for the year ended December 31, 2016, 2015 and 2014 that were excluded from the assessment of the effectiveness of our fair value hedges.
The following table presents the effect and financial statement location of our derivative instruments in cash flow hedging relationships on our accumulated other comprehensive income and consolidated statements of income and comprehensive income (in millions):
 
Amount of Gain (Loss) Recognized in Accumulated Other Comprehensive Income (Effective Portion)
 
 
 
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion)
 
Derivative
for the Year ended December 31,
 
 
Location of
for the Year ended December 31,
 
Instruments
 
2016

 
2015

 
2014

 
Gain (Loss)
 
2016

 
2015

 
2014

Commodity contracts
$
(145.8
)
$
106.5

$
—

 
Revenue
$
18.1

$
7.2

$
—

Commodity contracts
 
178.1

 
(105.4
)
 
—

 
Cost of revenue
 
20.8

 
(5.3
)
 
—

Total gain (loss)
$
32.3

$
1.0

$
—

 
Total gain (loss)
$
38.8

$
1.8

$
—


 
Amount of Gain (Loss) Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
 
 
for the Year ended December 31,
 
Location of Gain (Loss)
 
2016

 
2015

 
2014

Revenue
$
(13.7
)
$
28.6

$
—

Cost of revenue
 
9.4

 
(17.8
)
 
—

Total gain (loss)
$
(4.4
)
$
10.8

$
—


The effective portion of the gains or losses on derivative instruments designated as cash flow hedges of forecasted transactions are initially reported as a component of accumulated other comprehensive income and subsequently reclassified into earnings once the future transaction affects earnings.
The following table presents the effect and financial statement location of our derivative instruments not designated as hedging instruments on our consolidated statements of income and comprehensive income (in millions):
 
 
Amount of Realized and Unrealized Gain (Loss)
 
 
 
for the Year ended December 31,
 
Derivative Instruments - Non-designated
Location of Gain (Loss)
 
2016

 
2015

 
2014

Commodity contracts
 
 
 
 
 
 
 
Revenue
$
29.7

$
171.7

$
64.5

 
Cost of revenue
 
(31.6
)
 
(139.0
)
 
2.2

 
 
$
(1.9
)
$
32.7

$
66.7

Foreign currency contracts
 
 
 
 
 
 
 
Revenue
$
10.0

$
4.1

$
4.3

 
Other (expense) income, net
 
(0.8
)
 
9.5

 
12.6

 
 
$
9.2

$
13.6

$
16.9

Total gain (loss)
 
$
7.3

$
46.3

$
83.6


Credit-Risk-Related Contingent Features
We enter into derivative contracts which may require us to post collateral periodically. Certain of these derivative contracts contain credit-risk-related contingent clauses which are triggered by credit events. These credit events may include the requirement to post additional collateral or the immediate settlement of the derivative instruments upon the occurrence of a credit downgrade or if certain defined financial ratios fall below an established threshold.
As of December 31, 2016, the net liability position for such contracts is $15.2 million, there was no collateral posted, and the maximum potential collateral requirements arising from the credit risk related contingent features to be posted should a credit-risk contingent feature be triggered is $15.2 million. As of December 31, 2015, the net liability position for such contracts is $63.2 million, the collateral posted is $28.1 million and the maximum potential collateral requirements arising from the credit risk related contingent features to be posted should a credit-risk contingent feature be triggered is $35.1 million.