| Fair Value Disclosures |
Fair Value Disclosures
Fair Value Methods and Assumptions - Financial Assets and Liabilities
The following methods and assumptions were used in estimating fair value for our financial assets and liabilities:
| | • | Energy commodity derivatives contracts. These include exchange-traded futures contracts related to petroleum products. These contracts are carried at fair value on our consolidated balance sheets and are valued based on quoted prices in active markets. See Note 12 – Derivative Financial Instruments for further disclosures regarding these contracts. |
| | • | Interest rate contracts. These include forward-starting interest rate swap agreements to hedge against the risk of variability of interest payments on future debt. These contracts are carried at fair value on our consolidated balance sheets and are valued based on an assumed exchange, at the end of each period, in an orderly transaction with a market participant in the market in which the financial instrument is traded. The exchange value was calculated using present value techniques on estimated future cash flows based on forward interest rate curves. See Note 12 – Derivative Financial Instruments for further disclosures regarding these contracts. |
| | • | Long-term receivables. These primarily include payments receivable under a direct-financing leasing arrangement and cost reimbursement payments receivable. These receivables were recorded at fair value on our consolidated balance sheets, using then-current market rates to estimate the present value of future cash flows. |
| | • | Guarantees. These primarily include an indemnity agreement we entered into with OMERS in connection with the partial sale of our interest in BridgeTex. These guarantees were recorded at fair value on our consolidated balance sheets upon initial recognition, using probability-weighted potential outcome scenarios to estimate the value of such guarantees. |
| | • | Debt. The fair value of our publicly traded notes was based on the prices of those notes at December 31, 2017 and 2018; however, where recent observable market trades were not available, prices were determined using adjustments to the last traded value for that debt issuance or by adjustments to the prices of similar debt instruments of peer entities that are actively traded. The carrying amount of borrowings, if any, under our revolving credit facility and our commercial paper program approximates fair value due to the frequent repricing of these obligations. |
Fair Value Measurements - Financial Assets and Liabilities
The following tables summarize the carrying amounts, fair values and fair value measurements recorded or disclosed as of December 31, 2017 and 2018, based on the three levels established by ASC 820; Fair Value Measurements and Disclosures (in thousands): | | | | | | | | | | | | | | | | | | | | | | | | | | | | Fair Value Measurements as of December 31, 2017 using: | Assets (Liabilities) | | Carrying Amount | | Fair Value | | Quoted Prices in Active Markets for Identical Assets (Level 1) | | Significant Other Observable Inputs (Level 2) | | Significant Unobservable Inputs (Level 3) | Energy commodity derivatives contracts | | $ | (26,085 | ) | | $ | (26,085 | ) | | $ | (26,085 | ) | | $ | — |
| | $ | — |
| Interest rate contracts | | $ | 12,177 |
| | $ | 12,177 |
| | $ | — |
| | $ | 12,177 |
| | $ | — |
| Long-term receivables | | $ | 27,676 |
| | $ | 27,676 |
| | $ | — |
| | $ | — |
| | $ | 27,676 |
| Debt | | $ | (4,524,492 | ) | | $ | (4,826,480 | ) | | $ | — |
| | $ | (4,826,480 | ) | | $ | — |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Fair Value Measurements as of December 31, 2018 using: | Assets (Liabilities) | | Carrying Amount | | Fair Value | | Quoted Prices in Active Markets for Identical Assets (Level 1) | | Significant Other Observable Inputs (Level 2) | | Significant Unobservable Inputs (Level 3) | Energy commodity derivatives contracts | | $ | 55,011 |
| | $ | 55,011 |
| | $ | 55,011 |
| | $ | — |
| | $ | — |
| Interest rate contracts | | $ | (8,126 | ) | | $ | (8,126 | ) | | $ | — |
| | $ | (8,126 | ) | | $ | — |
| Long-term receivables | | $ | 20,844 |
| | $ | 20,844 |
| | $ | — |
| | $ | — |
| | $ | 20,844 |
| Guarantees | | $ | (16,409 | ) | | $ | (16,409 | ) | | $ | — |
| | $ | — |
| | $ | (16,409 | ) | Debt | | $ | (4,270,869 | ) | | $ | (4,224,373 | ) | | $ | — |
| | $ | (4,224,373 | ) | | $ | — |
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