FAIR VALUE MEASUREMENTS (Tables)

The following assets and liabilities are measured at fair value on a recurring basis:



	September 30, 2014
	Level 1			Level 2			Level 3			Total
	(Thousands of Dollars)
Assets:
Other current assets:
Product imbalances	$	2,822		$	—		$	—		$	2,822
Commodity derivatives	6,714			3,166			—			9,880
Other long-term assets, net:
Commodity derivatives	—			233			—			233
Total	$	9,536		$	3,399		$	—		$	12,935
Liabilities:
Accrued liabilities:
Product imbalances	$	(2,335	)	$	—		$	—		$	(2,335	)
Commodity derivatives	—			(1,615		)	—			(1,615		)
Other long-term liabilities:
Commodity derivatives	—			(105		)	—			(105		)
Guarantee liability	—			—			(1,730		)	(1,730		)
Total	$	(2,335	)	$	(1,720	)	$	(1,730	)	$	(5,785	)



	December 31, 2013
	Level 1			Level 2			Level 3			Total
	(Thousands of Dollars)
Assets:
Other current assets:
Product imbalances	$	1,980		$	—		$	—		$	1,980
Commodity derivatives	—			4,948			—			4,948
Other long-term assets, net:
Commodity derivatives	—			6,977			—			6,977
Total	$	1,980		$	11,925		$	—		$	13,905
Liabilities:
Accrued liabilities:
Product imbalances	$	(2,190	)	$	—		$	—		$	(2,190	)
Commodity derivatives	(1,433		)	(800		)	—			(2,233		)
Contingent consideration	—			—			(1,318		)	(1,318		)
Other long-term liabilities:
Commodity derivatives	—			(1,575		)	—			(1,575		)
Guarantee liability	—			—			(1,880		)	(1,880		)
Total	$	(3,623	)	$	(2,375	)	$	(3,198	)	$	(9,196	)

The following table summarizes the activity in our Level 3 liabilities:



	Nine Months Ended September 30, 2014
	(Thousands of Dollars)
Beginning balance	$	3,198
Amounts settled	(870		)
Adjustments to guarantee liability	(150		)
Changes in fair value recorded in earnings:
Operating expenses	(448		)
Ending balance	$	1,730

The estimated fair value and carrying amounts of the debt and note receivable were as follows:



	September 30, 2014				December 31, 2013
	Fair Value		Carrying Amount		Fair Value		Carrying Amount
	(Thousands of Dollars)
Long-term debt	$	2,783,666	$	2,731,551	$	2,636,734	$	2,655,553
Note receivable from Axeon	$	148,300	$	170,385	$	133,416	$	165,440

- Definition

Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances.

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- Definition

Tabular disclosure of the fair value measurement of liabilities using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets), and gains or losses recognized in other comprehensive income (loss) and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs) by class of liability.

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