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FAIR VALUE MEASUREMENTS | 12 Months Ended
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Dec. 31, 2015
Fair Value Disclosures [Abstract] |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS We segregate the inputs used in measuring fair value into three levels: Level 1, defined as observable inputs such as quoted prices for identical assets or liabilities in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable, such as quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in markets that are not active; and Level 3, defined as unobservable inputs for which little or no market data exists. We consider counterparty credit risk and our own credit risk in the determination of all estimated fair values. Recurring Fair Value Measurements The following assets and liabilities are measured at fair value on a recurring basis:
| December 31, 2015
| Level 1 |  | Level 2 |  | Level 3 |  | Total
| (Thousands of Dollars)
Assets: |  |  |  |  |  |  |
Other current assets: |  |  |  |  |  |  |
Product imbalances | $ | 179 |  |  | $ | — |  |  | $ | — |  |  | $ | 179 |
Commodity derivatives | 11,325 |  |  | 77 |  |  | — |  |  | 11,402 |
Other long-term assets, net: |  |  |  |  |  |  |
Interest rate swaps | — |  |  | 2,755 |  |  | — |  |  | 2,755 |
Total | $ | 11,504 |  |  | $ | 2,832 |  |  | $ | — |  |  | $ | 14,336 |
Liabilities: |  |  |  |  |  |  |
Accrued liabilities: |  |  |  |  |  |  |
Product imbalances | $ | (419 | ) |  | $ | — |  |  | $ | — |  |  | $ | (419 | )
Commodity derivatives | — |  |  | (120 | ) |  | — |  |  | (120 | )
Other long-term liabilities: |  |  |  |  |  |  |
Guarantee liability | — |  |  | — |  |  | (1,697 | ) |  | (1,697 | )
Interest rate swaps | — |  |  | (1,452 | ) |  | — |  |  | (1,452 | )
Total | $ | (419 | ) |  | $ | (1,572 | ) |  | $ | (1,697 | ) |  | $ | (3,688 | )
| December 31, 2014
| Level 1 |  | Level 2 |  | Level 3 |  | Total
| (Thousands of Dollars)
Assets: |  |  |  |  |  |  |
Other current assets: |  |  |  |  |  |  |
Product imbalances | $ | 117 |  |  | $ | — |  |  | $ | — |  |  | $ | 117 |
Commodity derivatives | 11,009 |  |  | 5,353 |  |  | — |  |  | 16,362 |
Total | $ | 11,126 |  |  | $ | 5,353 |  |  | $ | — |  |  | $ | 16,479 |
Liabilities: |  |  |  |  |  |  |
Accrued liabilities: |  |  |  |  |  |  |
Product imbalances | $ | (1,388 | ) |  | $ | — |  |  | $ | — |  |  | $ | (1,388 | )
Commodity derivatives | — |  |  | (4,623 | ) |  | — |  |  | (4,623 | )
Other long-term liabilities: |  |  |  |  |  |  |
Guarantee liability | — |  |  | — |  |  | (580 | ) |  | (580 | )
Total | $ | (1,388 | ) |  | $ | (4,623 | ) |  | $ | (580 | ) |  | $ | (6,591 | )
Product Imbalances. We value our assets and liabilities related to product imbalances using quoted market prices in active markets as of the reporting date. Therefore, we include these product imbalances in Level 1 of the fair value hierarchy. Interest Rate Swaps. We estimate the fair value of our forward-starting interest rate swaps using discounted cash flows, which use observable inputs such as time to maturity and market interest rates. Therefore, we include these interest rate swaps in Level 2 of the fair value hierarchy. Commodity Derivatives. We base the fair value of certain of our commodity derivative instruments on quoted prices on an exchange; accordingly, we include these in Level 1 of the fair value hierarchy. We also have derivative instruments for which we determine fair value using industry pricing services and other observable inputs, such as quoted prices on an exchange for similar derivative instruments. Therefore, we include these derivative instruments in Level 2 of the fair value hierarchy. See Note 17 for a discussion of our derivative instruments. Guarantees. As of December 31, 2015 and 2014, we recorded a liability of $1.7 million and $0.6 million, respectively, representing the fair value of guarantees we have issued on behalf of Axeon. We estimated the fair value considering the probability of default by Axeon and an estimate of the amount we would be obligated to pay under the guarantees at the time of default. We calculated the fair value based on the guarantees outstanding as of December 31, 2015 and 2014, totaling $71.9 million and $25.3 million, respectively, plus two guarantees that do not specify a maximum amount. We provide guarantees for commodity purchases, lease obligations and certain utilities for Axeon. A majority of these guarantees have no expiration date. Our estimate of the fair value is based on significant inputs not observable in the market and thus falls within Level 3 of the fair value hierarchy. The following table summarizes the activity in our Level 3 liabilities:
| Year Ended December 31, 2015
| (Thousands of Dollars)
Beginning balance | $ | 580 |
Adjustment to guarantee liability | 1,117 |
Ending balance | $ | 1,697 |
Fair Value of Financial Instruments We recognize cash equivalents, receivables, note receivables, payables and debt in our consolidated balance sheets at their carrying amounts. The fair values of these financial instruments, except for the Axeon Term Loan and long-term debt, approximate their carrying amounts. The estimated fair values and carrying amounts of the long-term debt and the Axeon Term Loan were as follows:
| December 31, 2015 |  | December 31, 2014
| Fair Value |  | Carrying Amount |  | Fair Value |  | Carrying Amount
| (Thousands of Dollars)
Long-term debt | $ | 2,929,438 |  |  | $ | 3,079,349 |  |  | $ | 2,764,242 |  |  | $ | 2,749,452 |
Axeon Term Loan | $ | 172,123 |  |  | $ | 170,352 |  |  | $ | 164,386 |  |  | $ | 169,235 |
We estimated the fair value of our publicly-traded senior notes based upon quoted prices in active markets; therefore, we determined the fair value of our publicly-traded senior notes falls in Level 1 of the fair value hierarchy. For our other debt, for which a quoted market price is not available, we estimated the fair value using a discounted cash flow analysis using current incremental borrowing rates for similar types of borrowing arrangements and determined the fair value falls in Level 2 of the fair value hierarchy. We estimated the fair value of the Axeon Term Loan using discounted cash flows, which use observable inputs such as time to maturity and market interest rates, and determined the fair value falls in Level 2 of the fair value hierarchy. The carrying value of the Axeon Term Loan is included in “Other long-term assets, net” on the consolidated balance sheets.

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=36462937&loc=d3e19207-110258 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14172-108612 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 28 -URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14064-108612 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=49121117&loc=d3e13537-108611 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 16 -URI http://asc.fasb.org/extlink&oid=49121117&loc=d3e13504-108611 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=49121117&loc=d3e13433-108611 + Details
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