XML 28 R12.htm IDEA: XBRL DOCUMENT
v3.7.0.1

Derivatives | 6 Months Ended
--- | ---
Jun. 30, 2017
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivatives | Derivatives We enter into financial derivative contracts in order to mitigate the risk of market price fluctuations in aviation, land and marine fuel, to offer our customers fuel pricing alternatives to meet their needs and to mitigate the risk of fluctuations in foreign currency exchange rates. We also enter into proprietary derivative transactions, primarily intended to capitalize on arbitrage opportunities in basis or time spreads related to fuel products we sell. We have applied the normal purchase and normal sales exception (“NPNS”), as provided by accounting guidance for derivative instruments and hedging activities, to certain of our physical forward sales and purchase contracts. While these contracts are considered derivative instruments under the guidance for derivative instruments and hedging activities, they are not recorded at fair value, but rather are recorded in our consolidated financial statements when physical settlement of the contract occurs. If it is determined that a transaction designated as NPNS no longer qualifies for this classification, the fair value of the related contract is recorded as an asset or liability on the consolidated balance sheets and the difference between the fair value and the contract amount is immediately recognized through earnings. 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 swaps or futures as well as certain forward fixed price purchase and sale contracts and proprietary trading. 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 |  |  | As of |
|  |  | June 30, 2017 |  | December 31, 2016 |  |  | June 30, 2017 |  | December 31, 2016 |
Derivative Instruments |  | Balance Sheet Location |
Derivatives designated as hedging instruments |  |  |  |  |  |  |  |  |
Commodity contracts |  | Short-term derivative assets, net |  | $ | 73.0 |  |  | $ | 2.2 |  |  |  | $ | 63.5 |  |  | $ | 5.4 |
|  | Accrued expenses and other current liabilities |  | 0.2 |  |  | 86.0 |  |  |  | 1.0 |  |  | 93.5 |
|  | Other long-term liabilities |  | — |  |  | 5.1 |  |  |  | — |  |  | 10.1 |
Total derivatives designated as hedging instruments |  | $ | 73.3 |  |  | $ | 93.3 |  |  |  | $ | 64.5 |  |  | $ | 108.9 |
Derivatives not designated as hedging instruments |  |  |  |  |  |  |  |  |
Commodity contracts |  | Short-term derivative assets, net |  | $ | 79.4 |  |  | $ | 160.3 |  |  |  | $ | 43.9 |  |  | $ | 86.7 |
|  | Identifiable intangible and other non-current assets |  | 20.7 |  |  | 17.1 |  |  |  | 10.6 |  |  | 6.2 |
|  | Accrued expenses and other current liabilities |  | 55.0 |  |  | 52.5 |  |  |  | 71.2 |  |  | 112.2 |
|  | Other long-term liabilities |  | 4.9 |  |  | 8.1 |  |  |  | 8.6 |  |  | 12.1 |
|  |  |  | $ | 160.0 |  |  | $ | 238.0 |  |  |  | $ | 134.3 |  |  | $ | 217.2 |
Foreign currency contracts |  | Short-term derivative assets, net |  | $ | 1.7 |  |  | $ | 13.5 |  |  |  | $ | 1.0 |  |  | $ | 3.4 |
|  | Identifiable intangible and other non-current assets |  | — |  |  | 0.9 |  |  |  | — |  |  | 0.1 |
|  | Accrued expenses and other current liabilities |  | 8.1 |  |  | 1.6 |  |  |  | 12.8 |  |  | 2.8 |
|  | Other long-term liabilities |  | — |  |  | — |  |  |  | 0.1 |  |  | — |
|  |  |  | $ | 9.9 |  |  | $ | 16.0 |  |  |  | $ | 14.0 |  |  | $ | 6.4 |
Total derivatives not designated as hedging instruments |  | $ | 169.9 |  |  | $ | 253.9 |  |  |  | $ | 148.3 |  |  | $ | 223.6 |
Total derivatives |  |  |  | $ | 243.2 |  |  | $ | 347.2 |  |  |  | $ | 212.8 |  |  | $ | 332.5 |
For information regarding our derivative instruments measured at fair value after netting and collateral see Note 4. 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 June 30, 2017 (in millions):
|  | As of June 30, |
Derivative Instruments |  | Units |  | 2017 |
Commodity contracts |  |  |  |
Buy / Long |  | BBL |  | 78.3 |
Sell / Short |  | BBL |  | (83.7 | )
Foreign currency exchange contracts |  |  |  |
Sell U.S. dollar, buy other currencies |  | USD |  | (287.9 | )
Buy U.S. dollar, sell other currencies |  | USD |  | 424.3 |
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) | For the Three Months Ended |  |  | Realized and Unrealized Gain (Loss) | For the Three Months Ended |
| June 30, |  |  |  | June 30, |
Derivative Instruments | Location |  | 2017 |  |  | 2016 |  |  | Hedged Items | Location |  | 2017 |  |  | 2016 |
Commodity contracts |  |  |  |  |  |  | Inventories |  |  |  |  |
| Cost of revenue |  | 1.4 |  |  | (34.2 | ) |  |  | Cost of revenue |  | 1.5 |  |  | 13.9 |
Total Gain (Loss) |  |  | $ | 1.4 |  |  | $ | (34.2 | ) |  | Total Gain (Loss) |  |  | $ | 1.5 |  |  | $ | 13.9 |
Realized and Unrealized Gain (Loss) | For the Six Months Ended |  |  | Realized and Unrealized Gain (Loss) | For the Six Months Ended |
| June 30, |  |  |  | June 30, |
Derivative Instruments | Location |  | 2017 |  |  | 2016 |  |  | Hedged Items | Location |  | 2017 |  |  | 2016 |
Commodity contracts |  |  |  |  |  |  | Inventories |  |  |  |  |
| Cost of revenue |  | 6.7 |  |  | (30.8 | ) |  |  | Cost of revenue |  | (2.0 | ) |  | 10.7 |
Total Gain (Loss) |  |  | $ | 6.7 |  |  | $ | (30.8 | ) |  | Total Gain (Loss) |  |  | $ | (2.0 | ) |  | $ | 10.7 |
The net gains or losses recognized in income for the three months ended June 30, 2017 and 2016, representing hedge ineffectiveness were $2.9 million, and $20.3 million, respectively. For the six months ended June 30, 2017 and 2016, the amounts of gains or losses representing hedge ineffectiveness were $4.6 million, and $20.1 million, respectively. There were no amounts for the three and six months ended June 30, 2017 and 2016, 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, consolidated statements of income and comprehensive income (in millions):
Amount of Gain (Loss) Recognized in Accumulated Other Comprehensive Income (Effective Portion) | For the Three Months Ended |  |  | Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion) | For the Three Months Ended |
June 30, |  |  | June 30, |
Derivative Instruments |  | 2017 |  |  | 2016 |  |  | Location |  | 2017 |  |  | 2016 |
Commodity contracts |  | $ | 49.3 |  |  | $ | (70.0 | ) |  | Revenue |  | $ | 15.9 |  |  | $ | 5.4 |
Commodity contracts |  | (43.9 | ) |  | 68.7 |  |  | Cost of Revenue |  | (10.6 | ) |  | 1.1 |
Total Gain (Loss) |  | $ | 5.4 |  |  | $ | (1.3 | ) |  | Total Gain (Loss) |  | $ | 5.4 |  |  | $ | 6.5 |
Amount of Gain (Loss) Recognized in Accumulated Other Comprehensive Income (Effective Portion) | For the Six Months Ended |  |  | Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (Effective Portion) | For the Six Months Ended |
June 30, |  |  | June 30, |
Derivative Instruments |  | 2017 |  |  | 2016 |  |  | Location |  | 2017 |  |  | 2016 |
Commodity contracts |  | $ | 106.4 |  |  | $ | (116.5 | ) |  | Revenue |  | $ | 5.8 |  |  | $ | (48.4 | )
Commodity contracts |  | (93.9 | ) |  | 112.9 |  |  | Cost of Revenue |  | (3.8 | ) |  | 55.5 |
Total Gain (Loss) |  | $ | 12.5 |  |  | $ | (3.6 | ) |  | Total Gain (Loss) |  | $ | 2.0 |  |  | $ | 7.1 |
Amount of Gain (Loss) Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing) | For the Three Months Ended |
June 30, |
Location |  | 2017 |  |  | 2016 |
Revenue |  | $ | (7.9 | ) |  | $ | (15.0 | )
Cost of Revenue |  | 2.1 |  |  | 9.9 |
Total Gain (Loss) |  | $ | (5.7 | ) |  | $ | (5.0 | )
Amount of Gain (Loss) Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing) | For the Six Months Ended |
June 30, |
Location |  | 2017 |  |  | 2016 |
Revenue |  | $ | 10.3 |  |  | $ | (15.1 | )
Cost of Revenue |  | (18.1 | ) |  | 12.8 |
Total Gain (Loss) |  | $ | (7.8 | ) |  | $ | (2.3 | )
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 transactions 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 Three Months Ended |
|  |  | June 30, |
Derivative Instruments - Non-designated | Location |  | 2017 |  |  | 2016 |
Commodity contracts |  |  |  |  |
| Revenue |  | $ | 19.1 |  |  | $ | (5.5 | )
| Cost of revenue |  | 2.6 |  |  | 8.8 |
|  |  | $ | 21.7 |  |  | $ | 3.3 |
Foreign currency contracts |  |  |  |  |
| Revenue |  | $ | (1.6 | ) |  | $ | 4.5 |
| Other (expense), income, net |  | (4.8 | ) |  | (0.4 | )
|  |  | $ | (6.5 | ) |  | $ | 4.1 |
Total Gain (Loss) |  |  | $ | 15.2 |  |  | $ | 7.4 |
Amount of Realized and Unrealized Gain (Loss) |  | For the Six Months Ended |
|  |  | June 30, |
Derivative Instruments - Non-designated | Location |  | 2017 |  |  | 2016 |
Commodity contracts |  |  |  |  |
| Revenue |  | $ | 68.2 |  |  | $ | 33.4 |
| Cost of revenue |  | (36.2 | ) |  | (38.7 | )
|  |  | $ | 32.1 |  |  | $ | (5.3 | )
Foreign currency contracts |  |  |  |  |
| Revenue |  | $ | (2.1 | ) |  | $ | 6.5 |
| Other (expense), income, net |  | (6.4 | ) |  | (5.6 | )
|  |  | $ | (8.5 | ) |  | $ | 0.9 |
Total Gain (Loss) |  |  | $ | 23.6 |  |  | $ | (4.4 | )
Credit-Risk-Related Contingent Features We enter into derivative instrument contracts which may require us to periodically provide collateral. Certain derivative contracts contain credit-risk-related contingent clauses which are triggered by credit events. These credit events may include the requirement to provide 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. The following table presents the potential collateral requirements for derivative liabilities with credit-risk-contingent features (in millions):
| Potential Collateral Requirements for Derivative Liabilities with Credit-Risk-Contingent Features |
|  |  | As of June 30, 2017 |  |  |  | As of December 31, 2016 |
Net derivatives liability positions with credit contingent features |  |  | $ | 4.8 |  |  |  | $ | 15.2 |
Maximum potential collateral requirements |  |  | $ | 4.8 |  |  |  | $ | 15.2 |
At June 30, 2017 and December 31, 2016, there was no collateral held by our counterparties on these derivative contracts with credit-risk-contingent features.

X
- References No definition available. + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI http://asc.fasb.org/topic&trid=2229140 + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration