Derivative Commodity Instruments

12 Months Ended

Dec. 31, 2015

Derivative Instruments and Hedges, Assets [Abstract]

Derivative Commodity Instruments

Derivative Commodity Instruments

Commodity Risk Management

The Company uses derivative instruments to reduce price volatility risk on commodities, primarily natural gas and ethane, from time to time. The Company does not use derivative instruments to engage in speculative activities.

For derivative instruments that are designated and qualify as fair value hedges, the gains or losses on the derivative instruments, as well as the offsetting losses or gains on the hedged items attributable to the hedged risk, were included in cost of sales in the consolidated statement of operations for the year ended December 31, 2013. The Company had no derivative instruments that were designated as fair value hedges during the years ended December 31, 2015 and 2014.

Gains and losses from changes in the fair value of derivative instruments that are not designated as hedging instruments were included in gross profit in the consolidated statements of operations for the years ended December 31, 2015, 2014 and 2013.

The exposure on commodity derivatives used for price risk management includes the risk that the counterparty will not pay if the market declines below the established fixed price. In such case, the Company would lose the benefit of the derivative differential on the volume of the commodities covered. In any event, the Company would continue to receive the market price on the actual volume hedged. The Company also bears the risk that it could lose the benefit of market improvements over the fixed derivative price for the term and volume of the derivative instruments (as such improvements would accrue to the benefit of the counterparty).

The fair values of derivative instruments in the Company's consolidated balance sheets were as follows:

	Asset Derivatives
	Balance Sheet Location	Fair Value as of December 31,
		2015		2014
Not designated as hedging instruments
Commodity forward contracts	Accounts receivable, net	$	3,465	$	3,145
Commodity forward contracts	Deferred charges and    other assets, net	2,088		—
Total asset derivatives		$	5,553	$	3,145
	Liability Derivatives
	Balance Sheet Location	Fair Value as of December 31,
		2015		2014
Not designated as hedging instruments
Commodity forward contracts	Accrued liabilities	$	9,325	$	6,549
Commodity forward contracts	Other liabilities	12,437		3,559
Total liability derivatives		$	21,762	$	10,108

The following tables reflect the impact of derivative instruments designated as fair value hedges and the related hedged item on the Company's consolidated statement of operations. There was no material ineffectiveness with regard to the Company's qualifying hedges for the year ended December 31, 2013. The Company had no derivative instruments that were designated as fair value hedges during the years ended December 31, 2015 and 2014.

Derivatives in Fair Value    Hedging Relationships	Location of Gain (Loss) Recognized in Income on Derivative	Year Ended December 31,
		2013
Commodity forward contracts	Cost of sales	$	(303	)

Hedged Items in Fair Value    Hedging Relationships	Location of Gain (Loss) Recognized in Income on  Hedged Items	Year Ended December 31,
		2013
Firm commitment designated as the hedged item	Cost of sales	$	143

The impact of derivative instruments that have not been designated as hedges on the Company's consolidated statements of operations were as follows:

Derivatives Not Designated as    Hedging Instruments	Location of Gain (Loss) Recognized in Income on Derivative	Year Ended December 31,
		2015			2014			2013
Commodity forward contracts	Gross profit	$	(11,395	)	$	(9,678	)	$	5,438

See Note 14 for the fair value of the Company's derivative instruments.

Disclosure about Offsetting Asset and Liability Derivatives

Certain of the Company's derivative instruments are executed under an International Swaps and Derivatives Association ("ISDA") Master Agreement, which permits the Company and a counterparty to aggregate the amounts owed by each party under multiple transactions and replace them with a single net amount payable by one party to the other. The following tables present the Company's derivative assets and derivative liabilities reported on the consolidated balance sheets and derivative assets and derivative liabilities subject to enforceable master netting arrangements.

	Derivative Assets as of December 31,
	2015		2014
Derivative assets subject to enforceable master netting arrangements	$	—	$	2,333
Derivative assets not subject to enforceable master netting arrangements	462		111
Total derivative assets	$	462	$	2,444

	December 31, 2015							December 31, 2014
Offsetting of Derivative Assets	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Consolidated Balance Sheet			Net Amounts of Assets Presented in the Consolidated Balance Sheet		Gross Amounts of Recognized Assets		Gross Amounts Offset in the Consolidated Balance Sheet			Net Amounts of Assets Presented in the Consolidated Balance Sheet
Commodity forward contracts	$	5,091	$	(5,091	)	$	—	$	3,034	$	(701	)	$	2,333

	December 31, 2015						December 31, 2014
Derivative Assets by Counterparty	Net Amounts of Assets Presented in the Consolidated Balance Sheet		Gross Amounts Not Offset in the Consolidated Balance Sheet		Net Amount		Net Amounts of Assets Presented in the Consolidated Balance Sheet		Gross Amounts Not Offset in the Consolidated Balance Sheet		Net Amount
Counterparty A	$	—	$	—	$	—	$	2,333	$	—	$	2,333
Total	$	—	$	—	$	—	$	2,333	$	—	$	2,333

	Derivative Liabilities as of December 31,
	2015		2014
Derivative liabilities subject to enforceable master netting arrangements	$	5,803	$	1,490
Derivative liabilities not subject to enforceable master netting arrangements	10,868		7,917
Total derivative liabilities	$	16,671	$	9,407

	December 31, 2015							December 31, 2014
Offsetting of Derivative Liabilities	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Consolidated Balance Sheet			Net Amounts of Liabilities Presented in the Consolidated Balance Sheet		Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Consolidated Balance Sheet			Net Amounts of Liabilities Presented in the Consolidated Balance Sheet
Commodity forward contracts	$	10,894	$	(5,091	)	$	5,803	$	2,191	$	(701	)	$	1,490

	December 31, 2015						December 31, 2014
Derivative Liabilities by Counterparty	Net Amounts of Liabilities Presented in the Consolidated Balance Sheet		Gross Amounts Not Offset in the Consolidated Balance Sheet		Net Amount		Net Amounts of Liabilities Presented in the Consolidated Balance Sheet		Gross Amounts Not Offset in the Consolidated Balance Sheet		Net Amount
Counterparty A	$	5,564	$	—	$	5,564	$	1,490	$	—	$	1,490
Counterparty B	239		—		239		—		—		—
Total	$	5,803	$	—	$	5,803	$	1,490	$	—	$	1,490