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SEC Filings
S-4
SUSSER HOLDINGS CORP filed this Form S-4 on 07/22/2016
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Table of Contents
Index to Financial Statements

PHILADELPHIA ENERGY SOLUTIONS LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(in thousands, except unit and volume data)

 

The table below summarizes the carrying value and fair value of the Company’s recorded financial instruments not carried at fair market value:

 

     December 31, 2015      December 31, 2014  
     Carrying
value
     Fair
value
     Carrying
value
     Fair
value
 

Refining term loan

   $ 531,163       $ 502,783       $ 535,012       $ 506,153   

Logistics term loan

     117,188         117,188         —           —     

Financing obligation

     61,509         61,509         50,035         50,035   

The fair value of the Refining term loan is based on quoted market prices for similar instruments provided by a third party and is classified as Level 2 within the fair value hierarchy. The fair value of the Logistics term loan is based on an internal model and is therefore classified as Level 3 within the fair value hierarchy. Due to the limited availability of market data, the fair value of the financing obligation approximates carrying value and is classified as level 3 within the fair value hierarchy. The carrying values of current assets and liabilities not included in the table above approximated their fair values.

15. DERIVATIVE INSTRUMENTS

The Company enters into commodity derivative instruments to manage price volatility in certain crude oil and feedstock inventories as well as refined product sales. The objective of entering into these derivative contracts is to mitigate certain exposures to commodity price risk. From time-to-time, the Company also enters into foreign currency swap contracts to manage exposure to foreign currency fluctuations on certain receivables denominated in foreign currency.

There were approximately 52.1 million barrels of crude oil, 43.4 million barrels of refined products, 0.8 million dekatherms of natural gas, and 50,640 megawatts of electricity outstanding under commodity derivative instruments as of December 31, 2015. There were also approximately 14,742 Canadian dollars outstanding under foreign currency swap contracts as of December 31, 2015. There were approximately 57.8 million barrels of crude oil, 35.6 million barrels of refined products, 6.9 million dekatherms of natural gas, and 246,960 megawatts of electricity outstanding under commodity derivative instruments as of December 31, 2014. As of December 31, 2015, the Company had commodity derivatives extending to January 2017.

The commodity swaps and other commodity derivative agreements discussed above include multiple derivative positions with counterparties for which the Company has entered into agreements governing the nature of the derivative transactions. Each of the counterparty agreements provides for the right to offset each individual derivative position to arrive at the net receivable due from the counterparty or payable owed by the Company. As a result of the right to offset, the recognized assets and liabilities associated with the outstanding derivative positions have been presented net in the consolidated balance sheets.

Fair value hedges are used to mitigate price volatility of certain refining inventories. The gain or loss on a derivative instrument designated and qualifying as a fair value hedge, as well as the offsetting gain or loss on the hedged item attributable to the hedged risk, is recognized in earnings in the same period.

Under the current intermediation agreement, discussed in note 4, Intermediation Agreements, the Company is required to redeliver inventory to MLC at a future date at a fixed price. The Company has identified the fixed price and volume requirement to redeliver as an embedded derivative and has designated these derivatives as fair value hedges of the underlying inventory. The Company was obligated to redeliver 6.6 million barrels of crude

 

F-60

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