FAIR VALUE MEASUREMENTS

9 Months Ended

Sep. 30, 2016

The tables below present information about the Company's financial assets and liabilities measured and recorded at fair value on a recurring basis and indicate the fair value hierarchy of the inputs utilized to determine the fair values as of September 30, 2016 and December 31, 2015.

We have elected to offset the fair value amounts recognized for multiple derivative contracts executed with the same counterparty; however, fair value amounts by hierarchy level are presented on a gross basis in the tables below. We have posted cash margin with various counterparties to support hedging and trading activities. The cash margin posted is required by counterparties as collateral deposits and cannot be offset against the fair value of open contracts except in the event of default. We have no derivative contracts that are subject to master netting arrangements that are reflected gross on the balance sheet.



	As of September 30, 2016
	Fair Value Hierarchy						Total Gross Fair Value		Effect of Counter-party Netting		Net Carrying Value on Balance Sheet
	Level 1		Level 2		Level 3		Total Gross Fair Value		Effect of Counter-party Netting		Net Carrying Value on Balance Sheet
Assets:
Money market funds	$	307,508	$	—	$	—	$	307,508	N/A		$	307,508
Marketable securities	59,991		—		—		59,991		N/A		59,991
Commodity contracts	24,086		10,440		382		34,908		(30,065	)	4,843
Derivatives included with inventory intermediation agreement obligations	—		6,194		—		6,194		—		6,194
Liabilities:
Commodity contracts	26,618		3,447		—		30,065		(30,065	)	—
Catalyst lease obligations	—		44,286		—		44,286		—		44,286



	As of December 31, 2015
	Fair Value Hierarchy						Total Gross Fair Value		Effect of Counter-party Netting		Net Carrying Value on Balance Sheet
	Level 1		Level 2		Level 3		Total Gross Fair Value		Effect of Counter-party Netting		Net Carrying Value on Balance Sheet
Assets:
Money market funds	$	631,280	$	—	$	—	$	631,280	N/A		$	631,280
Marketable securities	234,258		—		—		234,258		N/A		234,258
Commodity contracts	63,810		31,256		3,543		98,609		(52,482	)	46,127
Derivatives included with inventory intermediation agreement obligations	—		35,511		—		35,511		—		35,511
Derivatives included with inventory supply arrangement obligations	—		—		—		—		—		—
Liabilities:
Commodity contracts	49,960		2,522		—		52,482		(52,482	)	—
Catalyst lease obligations	—		31,802		—		31,802		—		31,802

The valuation methods used to measure financial instruments at fair value are as follows:


•	Money market funds categorized in Level 1 of the fair value hierarchy are measured at fair value based on quoted market prices and included within Cash and cash equivalents.


•	Marketable securities, consisting primarily of US Treasury securities, categorized in Level 1 of the fair value hierarchy are measured at fair value based on quoted market prices.


•	The commodity contracts categorized in Level 1 of the fair value hierarchy are measured at fair value based on quoted prices in an active market. The commodity contracts categorized in Level 2 of the fair value hierarchy are measured at fair value using a market approach based upon future commodity prices for similar instruments quoted in active markets.

•

The commodity contracts categorized in Level 3 of the fair value hierarchy consist of commodity price swap contracts that relate to forecasted purchases of crude oil for which quoted forward market prices are not readily available due to market illiquidity. The forward prices used to value these swaps were derived using broker quotes, prices from other third party sources and other available market based data.


•	The derivatives included with inventory supply arrangement obligations, derivatives included with inventory intermediation agreement obligations and the catalyst lease obligations are categorized in Level 2 of the fair value hierarchy and are measured at fair value using a market approach based upon commodity prices for similar instruments quoted in active markets.

Non-qualified pension plan assets are measured at fair value using a market approach based on published net asset values of mutual funds as a practical expedient. As of September 30, 2016 and December 31, 2015, $9,773 and $9,325, respectively, were included within Deferred charges and other assets, net for these non-qualified pension plan assets.

The table below summarizes the changes in fair value measurements categorized in Level 3 of the fair value hierarchy:



	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Balance at beginning of period	$	493		$	1,905		$	3,543		$	1,521
Purchases	—			—			—			—
Settlements	(90		)	(1,238		)	(1,093		)	(12,549		)
Unrealized (loss) gain included in earnings	(21		)	(852		)	(2,068		)	10,843
Transfers into Level 3	—			—			—			—
Transfers out of Level 3	—			—			—			—
Balance at end of period	$	382		$	(185	)	$	382		$	(185	)

There were no transfers between levels during the three and nine months ended September 30, 2016 and 2015, respectively.

Fair value of debt

The table below summarizes the fair value and carrying value of debt as of September 30, 2016 and December 31, 2015.



	September 30, 2016				December 31, 2015
	Carrying value		Fair value		Carrying value		Fair value
Senior Secured Notes due 2020 (a)	$	670,551	$	697,649	$	669,644	$	706,246
Revolving Loan (b)	550,000		550,000		—		—
Senior Secured Notes due 2023 (a)	500,000		475,031		500,000		492,452
PBFX Senior Notes (a)	350,000		339,989		350,000		321,722
PBFX Term Loan (b)	59,664		59,664		234,200		234,200
PBFX Revolving Credit Facility (b)	169,200		169,200		24,500		24,500
Rail Facility (b)	56,035		56,035		67,491		67,491
Catalyst leases (c)	44,286		44,286		31,802		31,802
	2,399,736		2,391,854		1,877,637		1,878,413
Less - Current maturities	59,664		59,664		—		—
Less - Unamortized deferred financing costs	34,111		n/a		41,282		n/a
Long-term debt	$	2,305,961	$	2,332,190	$	1,836,355	$	1,878,413

(a) The estimated fair value, categorized as a Level 2 measurement, was calculated based on the present value of future expected payments utilizing implied current market interest rates based on quoted prices of the Senior Secured Notes and the PBFX Senior Notes.

(b) The estimated fair value approximates carrying value, categorized as a Level 2 measurement, as these borrowings bear interest based upon short-term floating market interest rates.

(c) Catalyst leases are valued using a market approach based upon commodity prices for similar instruments quoted in active markets and are categorized as a Level 2 measurement. The Company has elected the fair value option for accounting for its catalyst lease repurchase obligations as the Company's liability is directly impacted by the change in fair value of the underlying catalyst.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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