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Assets and Liabilities Measured at Fair Value
 12 Months Ended
Dec. 31, 2014
Assets and Liabilities Measured at Fair Value [Abstract]  
Assets and Liabilities Measured at Fair Value

Note Q – Assets and Liabilities Measured at Fair Value

 

The Company carries certain assets and liabilities at fair value in its Consolidated Balance Sheet.  The fair value hierarchy is based on the quality of inputs used to measure fair value, with Level 1 being the highest quality and Level 3 being the lowest quality.  Level 1 inputs are quoted prices in active markets for identical assets or liabilities. Level 2 inputs are observable inputs other than quoted prices included within Level 1.  Level 3 inputs are unobservable inputs which reflect assumptions about pricing by market participants.

 

The fair value measurements for these assets and liabilities at December 31, 2014 and 2013 are presented in the following table.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair Value Measurements at Reporting Date Using

(Thousands of dollars)

Fair Value at
December 31, 2014

 

Quoted Prices
in Active Markets
for Identical
Assets (Liabilities)
(Level 1)

 

Significant
Other Observable
Inputs
(Level 2)

 

Significant
Unobservable
Inputs
(Level 3)

Assets

 

 

 

 

 

 

 

 

        Commodity derivative contracts

$
23,168 

 

– 

 
23,168 

 

– 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

        Nonqualified employee savings plan

$
(14,408)

 
(14,408)

 

– 

 

– 

        Foreign currency exchange
             derivative contracts

 
(25)

 

– 

 
(25)

 

– 

                    Total

$
(14,433)

 
(14,408)

 
(25)

 

– 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair Value Measurements at Reporting Date Using

(Thousands of dollars)

Fair Value at
December 31, 2013

 

Quoted Prices
in Active Markets
for Identical
Assets (Liabilities)
(Level 1)

 

Significant
Other Observable
Inputs
(Level 2)

 

Significant
Unobservable
Inputs
(Level 3)

Assets

 

 

 

 

 

 

 

 

        Commodity derivative contracts

$
1,970 

 

– 

 
1,970 

 

– 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

        Nonqualified employee savings plan

$
(13,267)

 
(13,267)

 

– 

 

– 

        Foreign currency exchange
             derivative contracts

 
(1,038)

 

– 

 
(1,038)

 

– 

                    Total

$
(14,305)

 
(13,267)

 
(1,038)

 

– 

 

The fair value of West Texas Intermediate (WTI) crude oil contracts in 2013 was based on active market quotes for WTI crude oil.  The fair value of foreign exchange derivative contracts in each year was based on market quotes for similar contracts at the balance sheet date.  The income effect of changes in fair value of crude oil derivative contracts is recorded in Sales and Other Operating Revenues in the Consolidated Statements of Income, while the effects of changes in fair value of foreign exchange derivative contracts is recorded in Interest and Other Income.  The nonqualified employee savings plan is an unfunded savings plan through which participants seek a return via phantom investments in equity securities and/or mutual funds.  The fair value of this liability was based on quoted prices for these equity securities and mutual funds.  The income effect of changes in the fair value of the nonqualified employee savings plan is recorded in Selling and General Expenses.

 

The Company offsets certain assets and liabilities related to derivative contracts when the legal right of offset exists.  There were no offsetting positions recorded at December 31, 2014 and 2013.

 

The following table presents the carrying amounts and estimated fair values of financial instruments held by the Company at December 31, 2014 and 2013.  The fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties.  The table excludes cash and cash equivalents, trade accounts receivable, trade accounts payable and accrued expenses, all of which had fair values approximating carrying amounts.  The carrying value of Canadian government securities is determined based on cost plus earned interest.  The fair value of current and long-term debt was estimated based on rates offered to the Company at that time for debt of the same maturities.  The Company has off-balance sheet exposures relating to certain letters of credit.  The fair value of these, which represents fees associated with obtaining the instruments, was nominal.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At December 31,

 

2014

 

2013

(Thousands of dollars)

Carrying
Amount

 

Fair
Value

 

Carrying
Amount

 

Fair
Value

Financial assets (liabilities):

 

 

 

 

 

 

 

 

        Canadian government securities with maturities
            greater than 90 days at the date of acquisition

$
461,313 

 
462,056 

 
374,842 

 
375,623 

        Current and long-term debt

 
(3,001,626)

 
(2,774,065)

 
(2,962,812)

 
(2,822,827)