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Fair Value Measurements (Tables)
 12 Months Ended
Dec. 31, 2021
Fair Value Disclosures [Abstract]  
Fair Value Measurements, Nonrecurring
The fair values of the assets acquired and liabilities assumed as a result of the Washington Acquisition were estimated as of January 11, 2019, the date of the acquisition, using valuation techniques described in notes (1) through (6) below.
Valuation
Fair ValueTechnique
(in thousands)
Net working capital excluding operating leases$(35,854)(1)
Property, plant, and equipment412,766 (2)
Operating lease right-of-use assets62,337 (3)
Goodwill42,522 (4)
Current operating lease liabilities(21,571)(3)
Long-term operating lease liabilities(40,766)(3)
Deferred tax liability(92,103)(5)
Other non-current liabilities(804)(6)
Total$326,527 
(1)Current assets acquired and liabilities assumed were recorded at their net realizable value.
(2)The fair value of personal property was estimated using the cost approach. Key assumptions in the cost approach include determining the replacement cost by evaluating recent purchases of comparable assets or published data, and adjusting replacement cost for economic and functional obsolescence, location, normal useful lives, and capacity (if applicable). The fair value of real property was estimated using the market approach. Key assumptions in the market approach include determining the asset value by evaluating recent purchases of comparable assets under similar circumstances.
(3)Operating lease right-of-use assets and liabilities were recognized based on the present value of lease payments over the lease term using the incremental borrowing rate at acquisition of 9.6%.
(4)The excess of the purchase price paid over the fair value of the identifiable assets acquired and liabilities assumed is allocated to goodwill.
(5)The deferred tax liability was determined based on the differences between the tax bases of the assets acquired and the values of those assets recorded on our consolidated balance sheets as of the date of acquisition.
(6)Other non-current liabilities are related to pension plan obligations. The underfunded status of the defined benefit plan represents the difference between the fair value of the plan’s assets and the projected benefit obligations.
Fair Value, Assets Measured on Recurring Basis The following table provides information on the fair value amounts (in thousands) of these derivatives as of December 31, 2021 and 2020 and their placement within our consolidated balance sheets.
December 31,
Balance Sheet Location20212020
Asset (Liability)
Commodity derivatives (1)Prepaid and other current assets$1,260 $1,346 
Commodity derivatives Other accrued liabilities(1,431)— 
J. Aron repurchase obligation derivativeObligations under inventory financing agreements(15,151)(20,797)
MLC terminal obligation derivativeObligations under inventory financing agreements(22,170)(10,161)
Interest rate derivativesOther accrued liabilities— (966)
Interest rate derivativesOther liabilities— (2,027)
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(1)Does not include cash collateral of $6.1 million and $1.5 million recorded in Prepaid and other current assets and $9.5 million and $9.5 million in Other long-term assets as of December 31, 2021 and 2020, respectively.
Fair value amounts by hierarchy level as of December 31, 2021 and 2020 are presented gross in the tables below (in thousands):
December 31, 2021
Level 1Level 2Level 3Gross Fair ValueEffect of Counter-party NettingNet Carrying Value on Balance Sheet (1)
Assets
Commodity derivatives$4,283 $4,513 $— $8,796 $(7,536)$1,260 
Liabilities
Commodity derivatives$(3,964)$(5,003)$— $(8,967)$7,536 $(1,431)
J. Aron repurchase obligation derivative— — (15,151)(15,151)— (15,151)
MLC terminal obligation derivative— — (22,170)(22,170)— (22,170)
Gross environmental credit obligations (2)— (311,014)— (311,014)— (311,014)
Total (3)$(3,964)$(316,017)$(37,321)$(357,302)$7,536 $(349,766)
December 31, 2020
Level 1Level 2Level 3Gross Fair ValueEffect of Counter-party NettingNet Carrying Value on Balance Sheet (1)
Assets
Commodity derivatives$616 $1,573 $— $2,189 $(843)$1,346 
Liabilities
Commodity derivatives$(3)$(840)$— $(843)$843 $— 
J.Aron repurchase obligation derivative— — (20,797)(20,797)— (20,797)
MLC terminal obligation derivative— — (10,161)(10,161)— (10,161)
Interest rate derivatives— (2,993)— (2,993)— (2,993)
Gross environmental credit obligations (2)— (150,482)— (150,482)— (150,482)
Total$(3)$(154,315)$(30,958)$(185,276)$843 $(184,433)
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(1)Does not include cash collateral of $15.6 million and $11.0 million as of December 31, 2021 and 2020, respectively, included within Prepaid and other current assets and Other long-term assets on our consolidated balance sheets.
(2)Does not include RINs assets and other environmental credits of $120.1 million and $26.7 million presented as Inventories on our consolidated balance sheet and stated at the lower of cost and net realizable value as of December 31, 2021 and 2020, respectively.
(3)The interest rate derivative was settled in February 2021, therefore, there is no asset or liability related to the interest rate derivative at December 31, 2021. Please read Note 14—Derivatives for further information.
Reconciliation of Level 3 Derivative Instruments, Fair Value A roll forward of Level 3 derivative instruments measured at fair value on a recurring basis is as follows (in thousands):
Year Ended December 31,
202120202019
Balance, beginning of period$(30,958)$(22,750)$(922)
Settlements61,247 (31,328)13,263 
Acquired— — (8,654)
Total gains (losses) included in earnings(67,610)23,120 (26,437)
Balance, end of period$(37,321)$(30,958)$(22,750)
Schedule of Carrying Value and Fair Value of Long Term Debt and Other Financial Instruments The carrying value and fair value of long-term debt and other financial instruments as of December 31, 2021 and 2020 are as follows (in thousands):
December 31, 2021
Carrying ValueFair Value
ABL Credit Facility due 2022$— $— 
7.75% Senior Secured Notes due 2025 (1)
290,621 299,700 
Term Loan B Facility due 2026 (1)208,903 214,827 
12.875% Senior Secured Notes due 2026 (1)
65,034 75,758 
December 31, 2020
Carrying ValueFair Value
5.00% Convertible Senior Notes due 2021 (1) (3)
$47,301 $50,311 
ABL Credit Facility due 2022— — 
Retail Property Term Loan due 2024 (2)41,891 41,891 
7.75% Senior Secured Notes due 2025 (1)
293,289 289,521 
Term Loan B Facility due 2026 (1)219,708 215,578 
12.875% Senior Secured Notes due 2026 (1)
99,213 112,901 
Mid Pac Term Loan due 2028 (2)1,399 1,399 
PHL Term Loan due 2030 (2)5,792 5,792 
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(1)The fair value measurements of the 5.00% Convertible Senior Notes, 7.75% Senior Secured Notes, Term Loan B Facility, and 12.875% Senior Secured Notes are considered Level 2 measurements in the fair value hierarchy as discussed below.
(2)The fair value measurements of the ABL Credit Facility, Mid Pac Term Loan, Retail Property Term Loan, and PHL Term Loan are considered Level 3 measurements in the fair value hierarchy.
(3)The carrying value of the 5.00% Convertible Senior Notes excludes the fair value of the equity component, which was classified as equity upon issuance.