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Derivative Instruments (Notes)
 12 Months Ended
Dec. 31, 2016
Derivative Instruments [Abstract]  
Derivative Instruments
Derivative Instruments

From time to time, we enter into forward fuel contracts to limit the exposure to price fluctuations for physical purchases of finished products in the normal course of business. We use derivatives to reduce normal operating and market risks with a primary objective in derivative instrument use being the reduction of the impact of market price volatility on our results of operations. Typically, we enter into forward fuel contracts with major financial institutions in which we fix the purchase price of finished grade fuel for a predetermined number of units with fulfillment terms of less than 90 days.

From time to time, we may also enter into interest rate hedging agreements to limit floating interest rate exposure under the Second Amended and Restated Credit Agreement. Our initial credit facility required us to maintain interest rate hedging arrangements on at least 50% of the amount funded on November 7, 2012 under the credit facility, which was required to be in place for at least a three-year period beginning no later than March 7, 2013. Accordingly, effective February 25, 2013, we entered into an interest rate hedge in the form of a LIBOR interest rate cap for a term of three years for a total notional amount of $45.0 million, thereby meeting the requirements in effect at that time. These requirements were eliminated in connection with the Amended and Restated Credit Agreement in July 2013, but the interest rate hedge remained in place in accordance with its term through its maturity date in February 2016.

The following table presents the fair value of our derivative instruments, as of December 31, 2016 and 2015. The fair value amounts below are presented on a gross basis and do not reflect the netting of asset and liability positions permitted under our master netting arrangements, including any cash collateral on deposit with our counterparties. We have elected to offset the recognized fair value amounts for multiple derivative instruments executed with the same counterparty in our financial statements. As a result, the asset and liability amounts below may differ from the amounts presented in our accompanying consolidated balance sheets. During the years ended December 31, 2016 and 2015, we did not elect hedge accounting treatment for these derivative positions. As a result, all changes in fair value are marked to market in the accompanying consolidated statements of income and comprehensive income.

(in thousands)
 
 
December 31, 2016
 
December 31, 2015
Derivative Type
Balance Sheet Location
 
Assets
 
Liabilities
 
Assets
 
Liabilities
Derivatives:
 
 
 
 
 
 
 
 
OTC commodity swaps (1) 
Other current assets
 
$
9

 
$
(82
)
 
$
171

 
$
(45
)
Total gross value of derivatives
 
9

 
(82
)
 
171

 
(45
)
Less: Counterparty netting and cash collateral (2)
 
 
9

 
621

 
(706
)
 
(45
)
Total net fair value of derivatives
 
 
$
—

 
$
(703
)
 
$
877

 
$
—

            
(1) 
As of December 31, 2016 and 2015, we had open derivative contracts representing 93,000 barrels and 171,000 barrels, respectively, of refined petroleum products.
(2) 
As of December 31, 2016, we had a cash deficit of $0.6 million netted with the net derivative positions of one of our counterparties. As of December 31, 2015, $0.8 million cash collateral was held by counterparty brokerage firms.

Recognized (losses) gains associated with our derivatives for the years ended December 31, 2016 and 2015 were as follows (in thousands):
 
 
 
 
Year Ended December 31,
Derivative Type
Income Statement Location
 
2016
 
2015
 
2014
 
 
 
 
 
 
 
 
Interest rate derivatives
Interest expense
 
$
—

 
$
(24
)
 
$
(92
)
OTC commodity swaps
Cost of goods sold
 
(2,122
)
 
441

 
3,083

 
 Total
 
$
(2,122
)
 
$
417

 
$
2,991