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FAIR VALUE MEASUREMENTS (Notes)
 12 Months Ended
Dec. 31, 2017
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS

Recurring Fair Value Measurements - The following tables set forth our recurring fair value measurements for the periods indicated:
 
 
December 31, 2017
 
 
Level 1
 
Level 2
 
Level 3
 
Total - Gross
 
Netting (a)
 
Total - Net (b)
 
 
(Thousands of dollars)
Derivative assets
 
 
 
 
 
 
 
 
 
 
 
 
Commodity contracts
 
 
 
 
 
 
 
 
 
 
 
 
Financial contracts
 
$
4,252

 
$
—

 
$
20,203

 
$
24,455

 
$
(24,455
)
 
$
—

Interest-rate contracts
 
—

 
49,960

 
—

 
49,960

 
—

 
49,960

Total derivative assets
 
$
4,252

 
$
49,960

 
$
20,203

 
$
74,415

 
$
(24,455
)
 
$
49,960

 
 
 
 
 
 
 
 
 
 
 
 
 
Derivative liabilities
 
 

 
 

 
 

 
 

 
 

 
 

Commodity contracts
 
 
 
 
 
 
 
 
 
 
 
 
Financial contracts
 
$
(5,708
)
 
$
—

 
$
(48,260
)
 
$
(53,968
)
 
$
53,936

 
$
(32
)
Physical contracts
 
—

 
—

 
(4,781
)
 
(4,781
)
 
—

 
(4,781
)
Total derivative liabilities
 
$
(5,708
)
 
$
—

 
$
(53,041
)
 
$
(58,749
)
 
$
53,936

 
$
(4,813
)
(a) - Derivative assets and liabilities are presented in our Consolidated Balance Sheets on a net basis. We net derivative assets and liabilities when a legally enforceable master-netting arrangement exists between the counterparty to a derivative contract and us. At December 31, 2017, we held no cash and posted $49.7 million of cash with various counterparties, including $29.5 million of cash collateral that is offsetting derivative net liability positions under master-netting arrangements in the table above. The remaining $20.2 million of cash collateral in excess of derivative net liability positions is included in other current assets in our Consolidated Balance Sheets.
(b) - Included in other current assets, other assets or other current liabilities in our Consolidated Balance Sheets.

 
 
December 31, 2016
 
 
Level 1
 
Level 2
 
Level 3
 
Total - Gross
 
Netting (a)
 
Total - Net (b)
 
 
(Thousands of dollars)
Derivative assets
 
 
 
 
 
 
 
 
 
 
 
 
Commodity contracts
 
 
 
 
 
 
 
 
 
 
 
 
Financial contracts
 
$
1,147

 
$
—

 
$
4,564

 
$
5,711

 
$
(4,760
)
 
$
951

Interest-rate contracts
 
—

 
47,457

 
—

 
47,457

 
—

 
47,457

Total derivative assets
 
$
1,147

 
$
47,457

 
$
4,564

 
$
53,168

 
$
(4,760
)
 
$
48,408

 
 
 
 
 
 
 
 
 
 
 
 
 
Derivative liabilities
 
 

 
 

 
 

 
 

 
 

 
 

Commodity contracts
 
 
 
 
 
 
 
 
 
 
 
 
Financial contracts
 
$
(31,458
)
 
$
—

 
$
(24,861
)
 
$
(56,319
)
 
$
56,319

 
$
—

Physical contracts
 
—

 
—

 
(3,022
)
 
(3,022
)
 
—

 
(3,022
)
Interest-rate contracts
 
—

 
(12,795
)
 
—

 
(12,795
)
 
—

 
(12,795
)
Total derivative liabilities
 
$
(31,458
)
 
$
(12,795
)
 
$
(27,883
)
 
$
(72,136
)
 
$
56,319

 
$
(15,817
)
a) - Derivative assets and liabilities are presented in our Consolidated Balance Sheets on a net basis. We net derivative assets and liabilities when a legally enforceable master-netting arrangement exists between the counterparty to a derivative contract and us. At December 31, 2016, we held no cash and posted $67.7 million of cash with various counterparties, including $51.6 million of cash collateral that is offsetting derivative net liability positions under master-netting arrangements in the table above. The remaining $16.1 million of cash collateral in excess of derivative net liability positions is included in other current assets in our Consolidated Balance Sheets.
(b) - Included in other current assets, other assets or other current liabilities in our Consolidated Balance Sheets.

The following table sets forth a reconciliation of our Level 3 fair value measurements for the periods indicated:
 
 
Years Ended December 31,
Derivative Assets (Liabilities)
 
2017
 
2016
 
 
(Thousands of dollars)
Net assets (liabilities) at beginning of period
 
$
(23,319
)
 
$
7,331

Total realized/unrealized gains (losses):
 
 
 
 
Included in earnings (a)
 
212

 
(320
)
Included in other comprehensive income (loss)
 
(9,731
)
 
(30,330
)
Net assets (liabilities) at end of period
 
$
(32,838
)
 
$
(23,319
)

(a) - Included in commodity sales revenues in our Consolidated Statements of Income.

Realized/unrealized gains (losses) include the realization of our derivative contracts through maturity. During the years ended December 31, 2017 and 2016, gains or losses included in earnings attributable to the change in unrealized gains or losses relating to assets and liabilities still held at the end of each reporting period were not material.

We recognize transfers into and out of the levels in the fair value hierarchy as of the end of each reporting period. During the years ended December 31, 2017 and 2016, there were no transfers between levels.

Other Financial Instruments - The approximate fair value of cash and cash equivalents, accounts receivable, accounts payable and short-term borrowings is equal to book value due to the short-term nature of these items. Our cash and cash equivalents are comprised of bank and money market accounts and are classified as Level 1. Our short-term borrowings are classified as Level 2 since the estimated fair value of the short-term borrowings can be determined using information available in the commercial paper market.

The estimated fair value of our consolidated long-term debt, including current maturities, was $9.3 billion and $8.8 billion at December 31, 2017 and 2016, respectively. The book value of our consolidated long-term debt, including current maturities, was $8.5 billion and $8.3 billion at December 31, 2017 and 2016, respectively. The estimated fair value of the aggregate of our and ONEOK Partners’ senior notes outstanding was determined using quoted market prices for similar issues with similar terms and maturities. The estimated fair value of our consolidated long-term debt is classified as Level 2.