Derivative Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2016

Schedule of notional values of derivative instruments


	Units (1)		Unit of Measure
Exchange-Traded Derivatives
Long		90,523	Thousands of barrels
Short		(95,484)	Thousands of barrels

OTC Derivatives (Petroleum/Ethanol)
Long		6,260	Thousands of barrels
Short		(4,820)	Thousands of barrels

OTC Derivatives (Natural Gas)
Long		13,081	Thousands of decatherms
Short		(12,672)	Thousands of decatherms

Interest Rate Swaps	$	100.0	Millions of U.S. dollars

(1)

Number of open positions and gross notional values do not measure the Partnership’s risk of loss, quantify risk or represent assets or liabilities of the Partnership, but rather indicate the relative size of the derivative instruments and are used in the calculation of the amounts to be exchanged between counterparties upon settlements.

Schedule of the amount of gains and losses from derivatives not involved in a fair value hedging relationship or in a hedging relationship recognized in the consolidated statements of income (in thousands)


	Statement of Gain (Loss)	Three Months Ended				Nine Months Ended
Derivatives not designated as	Recognized in	September 30,				September 30,
hedging instruments	Income on Derivatives	2016		2015		2016		2015
Commodity contracts	Cost of sales	$	1,883	$	(1,013)	$	1,794	$	3,500
Forward foreign currency contracts	Cost of sales		(32)		3		71		35
Total		$	1,851	$	(1,010)	$	1,865	$	3,535

Schedule of fair values of derivative instruments and location in consolidated balance sheets (in thousands)


		September 30, 2016
		Derivatives		Derivatives Not
		Designated as		Designated as
		Hedging		Hedging
	Balance Sheet Location	Instruments		Instruments		Total
Asset Derivatives:
Exchange-traded derivative contracts	Broker margin deposits	$	—	$	37,145	$	37,145
Forward derivative contracts (1)	Derivative assets		—		24,563		24,563
Total asset derivatives		$	—	$	61,708	$	61,708

Liability Derivatives:
Exchange-traded derivative contracts	Broker margin deposits	$	22,478	$	50,505	$	72,983
Forward derivative contracts (1)	Derivative liabilities		—		24,491		24,491
Interest rate swap contracts	Other long-term liabilities		—		2,144		2,144
Total liability derivatives		$	22,478	$	77,140	$	99,618


		December 31, 2015
		Derivatives		Derivatives Not
		Designated as		Designated as
		Hedging		Hedging
	Balance Sheet Location	Instruments		Instruments		Total
Asset Derivatives:
Exchange-traded derivative contracts	Broker margin deposits	$	83,645	$	11,722	$	95,367
Forward derivative contracts (1)	Derivative assets		—		66,099		66,099
Forward foreign currency contracts	Other assets		—		10		10
Total asset derivatives		$	83,645	$	77,831	$	161,476

Liability Derivatives:
Forward derivative contracts (1)	Derivative liabilities	$	—	$	31,911	$	31,911
Interest rate swap contracts	Other long-term liabilities		—		3,343		3,343
Total liability derivatives		$	—	$	35,254	$	35,254

(1)

Forward derivative contracts include the Partnership’s petroleum and ethanol physical and financial forwards and OTC swaps.

Fair Value Hedge

Derivative Financial Instruments

Schedule of net gains and losses from derivatives recognized in consolidated statements of operations (in thousands)


	Statement of Gain (Loss)	Three Months Ended				Nine Months Ended
	Recognized in Income on	September 30,				September 30,
	Derivatives	2016		2015		2016		2015
Derivatives in fair value hedging relationship
Exchange-traded futures contracts and OTC derivative contracts for petroleum commodity products	Cost of sales	$	16,506	$	62,500	$	(1,546)	$	72,067

Hedged items in fair value hedge relationship
Physical inventory	Cost of sales	$	(19,336)	$	(65,387)	$	9,152	$	(71,718)

Cash Flow Hedges

Derivative Financial Instruments

Schedule of net gains and losses from derivatives recognized in consolidated statements of operations (in thousands)


	Amount of Gain (Loss)				Location of Gain (Loss)	Amount of Gain (Loss)
	Recognized in				Reclassified from	Reclassified from
	Other Comprehensive				Accumulated Other	Other Comprehensive
	Income on Derivatives				Comprehensive Income into	Income into Income
	(Effective Portion)				Income (Effective Portion)	(Effective Portion)
	Three Months Ended					Three Months Ended
Derivatives Designated in	September 30,					September 30,
Cash Flow Hedging Relationship	2016		2015			2016		2015
Interest rate swaps	$	660	$	186	Interest expense	$	—	$	—
Interest rate cap		—		(11)	Interest expense		—		—
Total	$	660	$	175		$	—	$	—


	Amount of Gain (Loss)				Location of Gain (Loss)	Amount of Gain (Loss)
	Recognized in				Reclassified from	Reclassified from
	Other Comprehensive				Accumulated Other	Other Comprehensive
	Income on Derivatives				Comprehensive Income into	Income into Income
	(Effective Portion)				Income (Effective Portion)	(Effective Portion)
	Nine Months Ended					Nine Months Ended
Derivatives Designated in	September 30,					September 30,
Cash Flow Hedging Relationship	2016		2015			2016		2015
Interest rate swaps	$	1,199	$	1,365	Interest expense	$	—	$	—
Interest rate cap		—		(16)	Interest expense		—		—
Total	$	1,199	$	1,349		$	—	$	—