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Fair Value Measurements
 12 Months Ended
Dec. 31, 2012
Fair Value Measurements  
Fair Value Measurements

(16) Fair Value Measurements

        ASC Topic 820 — Fair Value Measurements and Disclosures ("ASC 820") established a single authoritative definition of fair value when accounting rules require the use of fair value, set out a framework for measuring fair value and required additional disclosures about fair value measurements. ASC 820 clarifies that fair value is an exit price, representing the amount from the perspective of a market participant that holds the asset or owes the liability at the measurement date.

        ASC 820 discusses valuation techniques, such as the market approach (prices and other relevant information generated by market transactions involving identical or comparable assets, liabilities or a group of assets and liabilities such as a business), the income approach (techniques to convert future amounts to a single current amount based on market expectations about those future amounts including present value techniques and option pricing), and the cost approach (amount that would be required currently to replace the service capacity of an asset which is often referred to as a replacement cost). ASC 820 utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:

  • •
    Level 1 — Quoted prices in active markets for identical assets and liabilities

    •
    Level 2 — Other significant observable inputs (including quoted prices in active markets for similar assets or liabilities)

    •
    Level 3 — Significant unobservable inputs (including the Company's own assumptions in determining the fair value)

        The following table sets forth the assets and liabilities measured at fair value on a recurring basis, by input level, as of December 31, 2012 and 2011:

 
   December 31, 2012  
 
   Level 1   Level 2   Level 3   Total  
 
   (in thousands)
  

Location and Description

                          

Cash equivalents

   $ 133,897   $ —   $ —   $ 133,897  

Other current assets (marketable securities)

     38     —     —     38  

Other current assets (other derivative agreements)

     —     —     —     —  

Other long-term assets (other derivative agreements)

     —     938     —     938  
                   

Total Assets

   $ 133,935   $ 938   $ —   $ 134,873  
                   

Other current liabilities (other derivative agreements)

     —     (67,747 )   —     (67,747 )

Other current liabilities (interest rate swap)

     —     (861 )   —     (861 )

Other long-term liabilities (other derivative agreements)

     —     —     —     —  

Other long-term liabilities (interest rate swap)

     —     (1,890 )   —     (1,890 )
                   

Total Liabilities

   $ —   $ (70,498 ) $ —   $ (70,498 )
                   

 

 
   December 31, 2011  
 
   Level 1   Level 2   Level 3   Total  
 
   (in thousands)
  

Location and Description

                          

Cash equivalents

   $ 187,327   $ —   $ —   $ 187,327  

Other current assets (marketable securities)

     25     —     —     25  

Other current assets (other derivative agreements)

     —     63,051     —     63,051  

Other long-term assets (other derivative agreements)

     —     18,831     —     18,831  
                   

Total Assets

   $ 187,352   $ 81,882   $ —   $ 269,234  
                   

Other current liabilities (interest rate swap)

     —     (905 )   —     (905 )

Other long-term liabilities (interest rate swap)

     —     (1,483 )   —     (1,483 )
                   

Total Liabilities

   $ —   $ (2,388 ) $ —   $ (2,388 )
                   

        As of December 31, 2012 and 2011, the only financial assets and liabilities that are measured at fair value on a recurring basis are the Company's cash equivalents, available-for-sale marketable securities and derivative instruments. Additionally, the fair value of the Company's debt issuances is disclosed in Note 12 ("Long-Term Debt"). The Refining Partnership's commodity derivative contracts are valued using broker quoted market prices of similar commodity contracts using Level 2 inputs. The Nitrogen Fertilizer Partnership has an interest rate swap that is measured at fair value on a recurring basis using Level 2 inputs. The fair value of these interest rate swap instruments are based on discounted cash flow models that incorporate the cash flows of the derivatives, as well as the current LIBOR rate and a forward LIBOR curve, along with other observable market inputs. The Company's investments in marketable securities are classified as available-for-sale, and as a result, are reported at fair market value using quoted market prices. The Company had no transfers of assets or liabilities between any of the above levels during the year ended December 31, 2012.