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Derivative Instruments
 12 Months Ended
Dec. 31, 2017
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 for portfolio optimization. In addition, non-designated derivatives are held to hedge the risk of currency rate fluctuations.
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
 
2017
 
2016
 
 
2017
 
2016
Derivatives designated as hedging instruments
 
 
 
 
 
 
 
 
 
Commodity contracts
 
Short-term derivative assets, net
 
$
0.4

 
$
2.2

 
 
$
0.5

 
$
5.4

 
 
Identifiable intangible and other non-current assets
 
—

 
—

 
 
—

 
—

 
 
Accrued expenses and other current liabilities
 
2.3

 
86.0

 
 
43.1

 
93.5

 
 
Other long-term liabilities
 
—

 
5.1

 
 
—

 
10.1

Total derivatives designated as hedging instruments
 
$
2.7

 
$
93.3

 
 
$
43.6

 
$
108.9

 
 
 
 
 
 
 
 
 
 
 
 
Derivatives not designated as hedging instruments
 
 
 
 
 
 
 
 
 
Commodity contracts
Short-term derivative assets, net
 
$
191.4

 
$
160.3

 
 
$
123.3

 
$
86.7

 
 
Identifiable intangible and other non-current assets
 
18.2

 
17.1

 
 
5.2

 
6.2

 
 
Accrued expenses and other current liabilities
 
86.1

 
52.5

 
 
138.2

 
112.2

 
 
Other long-term liabilities
 
5.2

 
8.1

 
 
13.5

 
12.1

 
 
 
 
$
300.9

 
$
238.0

 
 
$
280.2

 
$
217.2

 
 
 
 
 
 
 
 
 
 
 
 
Foreign currency contracts
Short-term derivative assets, net
 
$
4.5

 
$
13.5

 
 
$
2.8

 
$
3.4

 
 
Identifiable intangible and other non-current assets
 
—

 
0.9

 
 
—

 
0.1

 
 
Accrued expenses and other current liabilities
 
3.9

 
1.6

 
 
5.7

 
2.8

 
 
Other long-term liabilities
 
—

 
 
 
 
0.2

 
 
 
 
 
 
$
8.5

 
$
16.0

 
 
$
8.7

 
$
6.4

Total derivatives not designated as hedging instruments
 
$
309.4

 
$
253.9

 
 
$
288.9

 
$
223.6

 
 
 
 
 
 
 
 
 
 
 
 
Total derivatives
 
 
 
$
312.0

 
$
347.2

 
 
$
332.5

 
$
332.5


For information regarding our derivative instruments measured at fair value after netting and collateral see Note 12.
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, 2017 (in millions):
 
As of December 31,
Derivative Instruments
 
Units
 
2017
Commodity contracts
 
 
 
 
Buy / Long
 
BBL
 
66.5

Sell / Short
 
BBL
 
(75.9
)
 
 
 
 
 
Foreign currency exchange contracts
 
 
 
 
Sell U.S. dollar, buy other currencies
 
USD
 
(255.8
)
Buy U.S. dollar, sell other currencies
 
USD
 
485.5

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)
For the Year Ended

 
Realized and Unrealized Gain (Loss)
For the Year Ended

 
 
December 31,
 
 
 
December 31,
Derivative Instruments
Location
 
2017
 
2016
 
2015
 
Hedged Items
Location
 
2017
 
2016
 
2015
Commodity contracts
 
 
 
 
 
 
 
 
Inventories
 
 
 
 
 
 
 
 
Revenue
 
$
—

 
$
—

 
$
49.3

 
 
Revenue
 
$
—

 
$
—

 
$
—

 
Cost of revenue
 
(35.7
)
 
(25.3
)
 
37.5

 
 
Cost of revenue
 
13.0

 
10.8

 
(70.7
)
Total gain (loss)
 
$
(35.7
)
 
$
(25.3
)
 
$
86.8

 
Total gain (loss)
 
$
13.0

 
$
10.8

 
$
(70.7
)

We recognized net losses in income representing hedge ineffectiveness of $22.7 million and $14.5 million for the years ended December 31, 2017 and 2016, respectively, and net gains of $16.1 million for the year ended December 31, 2015. There were no gains or losses for the year ended December 31, 2017, 2016 and 2015 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)
For the Year Ended
 
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Effective Portion)
For the Year Ended
 
December 31,
 
 
December 31,
Derivative Instruments
 
2017
 
2016
 
2015
 
Location
 
2017
 
2016
 
2015
Commodity contracts
 
$
(7.8
)
 
$
(145.8
)
 
$
106.5

 
Revenue
 
$
(41.3
)
 
$
18.1

 
$
7.2

Commodity contracts
 
(0.1
)
 
178.1

 
(105.4
)
 
Cost of revenue
 
33.7

 
20.8

 
(5.3
)
Total gain (loss)
 
$
(7.9
)
 
$
32.3

 
$
1.0

 
Total gain (loss)
 
$
(7.6
)
 
$
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
 
2017
 
2016
 
2015
Revenue
 
$
0.7

 
$
(13.7
)
 
$
28.6

Cost of revenue
 
(15.4
)
 
9.4

 
(17.8
)
Total gain (loss)
 
$
(14.8
)
 
$
(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
 
2017
 
2016
 
2015
Commodity contracts
 
 
 
 
 
 
 
Revenue
 
$
(0.5
)
 
$
29.7

 
$
171.7

 
Cost of revenue
 
62.3

 
(31.6
)
 
(139.0
)
 
 
 
$
61.8

 
$
(1.9
)
 
$
32.7

Foreign currency contracts
 
 
 
 
 
 
 
Revenue
 
$
(3.2
)
 
$
10.0

 
$
4.1

 
Other (expense) income, net
 
(7.8
)
 
(0.8
)
 
9.5

 
 
 
$
(11.0
)
 
$
9.2

 
$
13.6

Total gain
 
 
$
50.8

 
$
7.3

 
$
46.3


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. 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 December 31,
 
 
 
2017
 
 
2016
Net derivative liability positions with credit contingent features
 
 
$
11.8

 
 
$
15.2

Maximum potential collateral requirements
 
 
$
11.8

 
 
$
15.2


At December 31, 2017 and 2016, there was no collateral held by our counterparties on these derivative contracts with credit-risk-contingent features.