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DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables)
 12 Months Ended
Dec. 31, 2015
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Schedule of commodity derivative instruments outstanding
The following table summarizes our commodity derivative instruments outstanding at December 31, 2015 (amounts in thousands of gallons):
 
 
Volume (1)
 
Accounting
Derivative Purpose 
 
Current
 
Long-Term
 
Treatment
 
 
 
 
 
 
 
Derivatives NOT designated as hedging instruments:
 
 

 
 

 
 
Physical fixed price derivative contracts
 
13,741

 
1,659

 
Mark-to-market
Physical index derivative contracts
 
69,457

 
—

 
Mark-to-market
Futures contracts for refined petroleum products
 
13,587

 
2,562

 
Mark-to-market
 
 
 
 
 
 
 
Derivatives designated as hedging instruments:
 
 

 
 

 
 
Futures contracts for refined petroleum products
 
136,458

 
—

 
Fair Value Hedge
Futures contracts for refined petroleum products
 
8,400

 
—

 
Cash Flow Hedge
____________________________
(1)
Volume represents absolute value of net notional volume position.
Schedule of fair value of each classification of derivative instruments
The following table sets forth the fair value of each classification of derivative instruments and the locations of the derivative instruments on our consolidated balance sheets at the dates indicated (in thousands):
 
December 31, 2015
 
Derivatives
NOT Designated
as Hedging
Instruments
 
Derivatives
Designated
as Hedging
Instruments
 
Derivative
Carrying
Value
 
Netting
Balance
Sheet
Adjustment (1)
 
Total
Physical fixed price derivative contracts
$
26,698

 
$
—

 
$
26,698

 
$
(79
)
 
$
26,619

Physical index derivative contracts
87

 
—

 
87

 
(62
)
 
25

Futures contracts for refined products
136,131

 
36,834

 
172,965

 
(121,324
)
 
51,641

Total current derivative assets
162,916

 
36,834

 
199,750

 
(121,465
)
 
78,285

Physical fixed price derivative contracts
1,057

 
—

 
1,057

 
—

 
1,057

Total non-current derivative assets
1,057

 
—

 
1,057

 
—

 
1,057

Physical fixed price derivative contracts
(535
)
 
—

 
(535
)
 
79

 
(456
)
Physical index derivative contracts
(116
)
 
—

 
(116
)
 
62

 
(54
)
Futures contracts for refined products
(119,506
)
 
(1,818
)
 
(121,324
)
 
121,324

 
—

Total current derivative liabilities
(120,157
)
 
(1,818
)
 
(121,975
)
 
121,465

 
(510
)
Futures contracts for refined products
(703
)
 
—

 
(703
)
 
—

 
(703
)
Total non-current derivative liabilities
(703
)
 
—

 
(703
)
 
—

 
(703
)
Net derivative assets
$
43,113

 
$
35,016

 
$
78,129

 
$
—

 
$
78,129

____________________________
(1)
Amounts represent the netting of physical fixed and index contracts’ assets and liabilities when a legal right of offset exists. Futures contracts are subject to settlement through margin requirements and are additionally presented on a net basis.
 
 
December 31, 2014
 
Derivatives
NOT Designated
as Hedging
Instruments
 
Derivatives
Designated
as Hedging
Instruments
 
Derivative
Carrying
Value
 
Netting
Balance
Sheet
Adjustment (1)
 
Total
Physical fixed price derivative contracts
$
42,005

 
$
—

 
$
42,005

 
$
(12
)
 
$
41,993

Physical index derivative contracts
112

 
—

 
112

 
(59
)
 
53

Futures contracts for refined products
150,352

 
30,702

 
181,054

 
(153,911
)
 
27,143

Total current derivative assets
192,469

 
30,702

 
223,171

 
(153,982
)
 
69,189

Physical fixed price derivative contracts
2,919

 
—

 
2,919

 
—

 
2,919

Total non-current derivative assets
2,919

 
—

 
2,919

 
—

 
2,919

Physical fixed price derivative contracts
(1,502
)
 
—

 
(1,502
)
 
12

 
(1,490
)
Physical index derivative contracts
(371
)
 
—

 
(371
)
 
59

 
(312
)
Futures contracts for refined products
(153,911
)
 
—

 
(153,911
)
 
153,911

 
—

Total current derivative liabilities
(155,784
)
 
—

 
(155,784
)
 
153,982

 
(1,802
)
Physical fixed price derivative contracts
(5
)
 
—

 
(5
)
 
—

 
(5
)
Futures contracts for refined products
(2,615
)
 
—

 
(2,615
)
 
—

 
(2,615
)
Total non-current derivative liabilities
(2,620
)
 
—

 
(2,620
)
 
—

 
(2,620
)
Net derivative assets
$
36,984

 
$
30,702

 
$
67,686

 
$
—

 
$
67,686

____________________________
(1)
Amounts represent the netting of physical fixed and index contracts’ assets and liabilities when a legal right of offset exists. Futures contracts are subject to settlement through margin requirements and are additionally presented on a net basis.
Schedule of gains and losses on derivative instruments recognized in income
The gains and losses on our derivative instruments recognized in income were as follows for the periods indicated (in thousands):
 
 
 
Year Ended December 31,
 
Location
 
2015
 
2014
Derivatives NOT designated as hedging instruments:
 
 
 

 
 

Physical fixed price derivative contracts
Product sales
 
$
35,667

 
$
50,293

Physical index derivative contracts
Product sales
 
(268
)
 
(73
)
Physical fixed price derivative contracts
Cost of product sales
 
12,489

 
4,352

Physical index derivative contracts
Cost of product sales
 
101

 
(849
)
Futures contracts for refined products
Cost of product sales
 
(6,559
)
 
(14,151
)
 
 
 
 
 
 
Derivatives designated as fair value hedging instruments:
 
 
 

 
 

Futures contracts for refined products
Cost of product sales
 
$
75,974

 
$
117,283

Physical inventory - hedged items
Cost of product sales
 
(83,703
)
 
(144,142
)
 
 
 
 
 
 
Ineffectiveness excluding the time value component on fair value hedging instruments:
 
 
 

 
 

Fair value hedge ineffectiveness (excluding time value)
Cost of product sales
 
$
2,162

 
$
40

Time value excluded from hedge assessment
Cost of product sales
 
(9,891
)
 
(26,899
)
Net loss in income
 
 
$
(7,729
)
 
$
(26,859
)
Schedule of change in value recognized in OCI and Losses reclassified from AOCI
The change in value recognized in OCI and the losses reclassified from AOCI to income attributable to our derivative instruments designated as cash flow hedges were as follows for the periods indicated (in thousands):
 
Gain (Loss) Recognized
in OCI on Derivatives for the
Year Ended December 31,
 
2015
 
2014
Derivatives designated as cash flow hedging instruments:
 

 
 

Interest rate contracts
$
—

 
$
(21,424
)
Commodity derivatives
1,266

 
—

 
$
1,266

 
$
(21,424
)

 
 
 
Loss Reclassified
From AOCI to Income for the
Year Ended December 31,
 
Location
 
2015
 
2014
Derivatives designated as cash flow hedging instruments:
 
 
 

 
 

Interest rate contracts
Interest and debt expense
 
$
(12,151
)
 
$
(9,753
)