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Derivatives | 12 Months Ended
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Dec. 31, 2012
Derivatives |
Derivatives | 3. Derivatives The following describes our derivative classifications: Cash Flow Hedges. Includes certain of our foreign currency forward contracts we enter into in order to mitigate the risk of currency exchange rate fluctuations. We recorded an unrealized net gain of $0.1 million as of December 31, 2012 and there were no outstanding cash flow hedges as of December 31, 2011. Fair Value Hedges. Includes derivatives we enter into in order to hedge price risk associated with our inventory and certain firm commitments relating to fixed price purchase and sale contracts. As of December 31, 2012 and 2011, we recorded unrealized net gains of $1.0 million and $2.4 million related to the ineffectiveness between our derivative hedging instruments and hedged items on the respective dates. Non-designated Derivatives. Includes derivatives we primarily enter into in order to mitigate the risk of market price fluctuations in aviation, marine and land fuel in the form of swaps or futures as well as certain fixed price purchase and sale contracts and proprietary trading. In addition, non-designated derivatives are also entered into to hedge the risk of currency rate fluctuations. As of December 31, 2012 and 2011, we recorded unrealized net gains of $9.8 million and $11.1 million, respectively, related to our non-designated derivative positions. For additional information on our derivatives accounting policy, see Note 1. As of December 31, 2012, our derivative instruments, at their respective fair value positions were as follows (in thousands, except weighted average fixed price and weighted average mark-to-market amount):
Hedge Strategy |  | Settlement Period |  | Derivative Instrument |  | Notional |  | Unit |  | Weighted Average Fixed Price |  | Weighted Average Mark-to- Market Amount |  | Fair Value Amount |
--- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ---
Cash Flow Hedge |  | 2013 |  | Foreign currency contracts (long) |  | 1,758 |  | EUR |  | 0.81 |  | 0.08 |  | $ | 148 |
Fair Value Hedge |  | 2013 |  | Commodity contracts for inventory hedging (long) |  | 310 |  | BBL |  | 122.75 |  | 0.79 |  | $ | 246 |
|  | 2013 |  | Commodity contracts for inventory hedging (short) |  | 2,227 |  | BBL |  | 121.97 |  | (0.69) |  |  | (1,539) |
|  |  |  |  |  |  |  |  |  |  |  |  |  | $ | (1,293) |
Non-Designated |  | 2013 |  | Commodity contracts (long) |  | 37,205 |  | BBL |  | 74.92 |  | 0.68 |  | $ | 25,276 |
|  | 2013 |  | Commodity contracts (short) |  | 29,588 |  | BBL |  | 87.34 |  | (0.48) |  |  | (14,305) |
|  | 2014 |  | Commodity contracts (long) |  | 445 |  | BBL |  | 98.12 |  | 2.52 |  |  | 1,123 |
|  | 2014 |  | Commodity contracts (short) |  | 542 |  | BBL |  | 99.74 |  | (1.35) |  |  | (734) |
|  | 2015 |  | Commodity contracts (long) |  | 26 |  | BBL |  | 115.63 |  | 0.69 |  |  | 18 |
|  | 2015 |  | Commodity contracts (short) |  | 26 |  | BBL |  | 117.24 |  | (0.69) |  |  | (18) |
|  | 2013 |  | Foreign currency contracts (long) |  | 3,080 |  | AUD |  | 1.04 |  | 0.00 |  |  | 2 |
|  | 2013 |  | Foreign currency contracts (short) |  | 11,111 |  | AUD |  | 1.04 |  | 0.01 |  |  | 81 |
|  | 2013 |  | Foreign currency contracts (long) |  | 1,859 |  | BRL |  | 2.11 |  | 0.02 |  |  | 32 |
|  | 2013 |  | Foreign currency contracts (short) |  | 1,366 |  | BRL |  | 2.10 |  | (0.01) |  |  | (13) |
|  | 2013 |  | Foreign currency contracts (long) |  | 16,795 |  | CAD |  | 0.99 |  | (0.00) |  |  | (67) |
|  | 2013 |  | Foreign currency contracts (short) |  | 12,220 |  | CAD |  | 0.99 |  | 0.01 |  |  | 69 |
|  | 2013 |  | Foreign currency contracts (long) |  | 1,553,106 |  | CLP |  | 479.38 |  | (0.00) |  |  | (10) |
|  | 2013 |  | Foreign currency contracts (short) |  | 892,962 |  | CLP |  | 483.07 |  | 0.00 |  |  | 12 |
|  | 2013 |  | Foreign currency contracts (long) |  | 18,734,591 |  | COP |  | 1,803.89 |  | 0.00 |  |  | 147 |
|  | 2013 |  | Foreign currency contracts (short) |  | 15,265,622 |  | COP |  | 1,803.26 |  | (0.00) |  |  | (96) |
|  | 2013 |  | Foreign currency contracts (short) |  | 5,053 |  | DKK |  | 5.69 |  | (0.00) |  |  | (7) |
|  | 2013 |  | Foreign currency contracts (long) |  | 1,175 |  | EUR |  | 0.75 |  | (0.01) |  |  | (6) |
|  | 2013 |  | Foreign currency contracts (short) |  | 18,434 |  | EUR |  | 0.76 |  | (0.01) |  |  | (175) |
|  | 2013 |  | Foreign currency contracts (long) |  | 47,725 |  | GBP |  | 0.63 |  | 0.03 |  |  | 1,417 |
|  | 2013 |  | Foreign currency contracts (short) |  | 79,935 |  | GBP |  | 0.63 |  | (0.03) |  |  | (2,719) |
|  | 2013 |  | Foreign currency contracts (long) |  | 3,538 |  | JPY |  | 80.71 |  | (0.00) |  |  | (4) |
|  | 2013 |  | Foreign currency contracts (short) |  | 15,768 |  | JPY |  | 77.72 |  | 0.00 |  |  | 21 |
|  | 2013 |  | Foreign currency contracts (long) |  | 381,114 |  | MXN |  | 12.97 |  | (0.00) |  |  | (375) |
|  | 2013 |  | Foreign currency contracts (short) |  | 247,549 |  | MXN |  | 12.96 |  | 0.00 |  |  | 307 |
|  | 2013 |  | Foreign currency contracts (long) |  | 9,400 |  | NOK |  | 5.58 |  | (0.00) |  |  | (4) |
|  | 2013 |  | Foreign currency contracts (short) |  | 7,123 |  | NOK |  | 5.64 |  | (0.00) |  |  | (13) |
|  | 2013 |  | Foreign currency contracts (short) |  | 4,459 |  | PLN |  | 3.17 |  | (0.01) |  |  | (23) |
|  | 2013 |  | Foreign currency contracts (short) |  | 6,873 |  | RON |  | 3.48 |  | (0.01) |  |  | (37) |
|  | 2014 |  | Foreign currency contracts (long) |  | 250 |  | GBP |  | 0.62 |  | 0.00 |  |  | 1 |
|  | 2014 |  | Foreign currency contracts (short) |  | 3,090 |  | GBP |  | 0.63 |  | (0.03) |  |  | (99) |
|  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 9,801 |
The following table presents information about our derivative instruments measured at fair value and their locations on the consolidated balance sheets (in thousands):
|  |  |  | As of December 31, |
--- | --- | --- | --- | --- | ---
|  | Balance Sheet Location |  | 2012 |  | 2011 |
Derivative assets: |  |  |  |  |  |  |  |  |
Derivatives designated as hedging instruments |  |  |  |  |  |  |  |  |
Commodity contracts |  | Other current assets |  | $ | 991 |  | $ | 528 |
Commodity contracts |  | Accrued expenses and other current liabilities |  |  | — |  |  | 22 |
Foreign currency contracts |  | Other current assets |  |  | 148 |  |  | — |
|  |  |  |  | 1,139 |  |  | 550 |
Derivatives not designated as hedging instruments |  |  |  |  |  |  |  |  |
Commodity contracts |  | Other current assets |  |  | 67,533 |  |  | 59,185 |
Commodity contracts |  | Non-current other assets |  |  | 1,423 |  |  | 2,065 |
Commodity contracts |  | Accrued expenses and other current liabilities |  |  | 5,776 |  |  | 3,231 |
Commodity contracts |  | Other long-term liabilities |  |  | 46 |  |  | 40 |
Foreign currency contracts |  | Other current assets |  |  | 741 |  |  | 1,912 |
Foreign currency contracts |  | Non-current other assets |  |  | — |  |  | 1,082 |
Foreign currency contracts |  | Accrued expenses and other current liabilities |  |  | 1,545 |  |  | — |
|  |  |  |  | 77,064 |  |  | 67,515 |
|  |  |  | $ | 78,203 |  | $ | 68,065 |
Derivative liabilities: |  |  |  |  |  |  |  |  |
Derivatives designated as hedging instruments |  |  |  |  |  |  |  |  |
Commodity contracts |  | Other current assets |  | $ | 2,284 |  | $ | 1,519 |
Commodity contracts |  | Accrued expenses and other current liabilities |  |  | — |  |  | 21 |
|  |  |  |  | 2,284 |  |  | 1,540 |
Derivatives not designated as hedging instruments |  |  |  |  |  |  |  |  |
Commodity contracts |  | Other current assets |  |  | 41,410 |  |  | 37,713 |
Commodity contracts |  | Non-current other assets |  |  | 47 |  |  | 2 |
Commodity contracts |  | Accrued expenses and other current liabilities |  |  | 20,927 |  |  | 16,434 |
Commodity contracts |  | Other long-term liabilities |  |  | 1,034 |  |  | 1,213 |
Foreign currency contracts |  | Other current assets |  |  | 595 |  |  | 413 |
Foreign currency contracts |  | Non-current other assets |  |  | — |  |  | 481 |
Foreign currency contracts |  | Accrued expenses and other current liabilities |  |  | 3,151 |  |  | 124 |
Foreign currency contracts |  | Other long-term liabilities |  |  | 99 |  |  | — |
|  |  |  |  | 67,263 |  |  | 56,380 |
|  |  |  | $ | 69,547 |  | $ | 57,920 |
The following tables present the effect of and financial statement location of our derivative instruments and related hedged items in fair value hedging relationships on our consolidated statements of income and comprehensive income (in thousands):
Derivative Instruments |  | Location |  | Realized and Unrealized Gain (Loss) |  | Hedged Items |  | Location |  | Realized and Unrealized Gain (Loss) |
--- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ---
|  | For the year ended December 31, |  |  |  | For the year ended December 31, |
|  |  |  |  | 2012 |  |  | 2011 |  |  | 2010 |  |  |  |  |  |  | 2012 |  |  | 2011 |  |  | 2010 |
Commodity contracts |  | Revenue |  | $ | 265 |  | $ | 11,608 |  | $ | 10,040 |  | Firm commitments |  | Revenue |  | $ | (201) |  | $ | (12,973) |  | $ | (7,494) |
Commodity contracts |  | Cost of revenue |  |  | (1,417) |  |  | (6,926) |  |  | (739) |  | Firm commitments |  | Cost of revenue |  |  | 739 |  |  | 7,771 |  |  | (797) |
Commodity contracts |  | Cost of revenue |  |  | (19,717) |  |  | (26,039) |  |  | (12,563) |  | Inventories |  | Cost of revenue |  |  | 23,972 |  |  | 38,377 |  |  | 21,419 |
|  |  |  | $ | (20,869) |  | $ | (21,357) |  | $ | (3,262) |  |  |  |  |  | $ | 24,510 |  | $ | 33,175 |  | $ | 13,128 |
There were no gains or losses for the year ended December 31, 2012, 2011 and 2010 that were excluded from the assessment of the effectiveness of our fair value hedges. The following table presents the effect and financial statement location of our derivative instruments in cash flow hedging relationships on our accumulated other comprehensive income and consolidated statements of income and comprehensive income (in thousands):
Derivative Instruments |  | Amount of Gain (Loss) Recognized in Accumulated Other Comprehensive Income (Effective Portion) |  | Location of Realized Gain (Loss) (Effective Portion) |  | Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Effective Portion) |
--- | --- | --- | --- | --- | --- | --- | ---
For the year ended December 31, |  | For the year ended December 31, |
|  |  | 2012 |  |  | 2011 |  |  | 2010 |  |  |  |  | 2012 |  |  | 2011 |  |  | 2010 |
Foreign currency contracts |  | $ | — |  |  | $— |  | $ | 1,799 |  | Revenue |  |  | $— |  |  | $— |  | $ | 1,107 |
Foreign currency contracts |  |  | 196 |  |  | — |  |  | (81) |  | Other income (expense), net |  |  | 48 |  |  | — |  |  | (81) |
|  | $ | 196 |  |  | $— |  | $ | 1,718 |  |  |  |  | $48 |  |  | $— |  | $ | 1,026 |
In the event forecasted foreign currency cash outflows are less than the hedged amounts, a portion or all of the gains or losses recorded in accumulated other comprehensive income would be reclassified to the consolidated statement of income and comprehensive income. As of December 31, 2012, the maximum amount that could be reclassified to the consolidated statements of income and comprehensive income for the next twelve months is not significant. During the year ended December 31, 2010, we de-designated a cash flow hedge due to the hedged forecasted foreign currency cash outflows no longer being probable which resulted in a realized net gain of $0.7 million being reclassified from accumulated other comprehensive income to other income (expense), net in the consolidated statements of income and comprehensive income. During the years ended 2012, 2011 and 2010, there were no amounts recognized in the consolidated statements of income and comprehensive income related to the ineffective portion of our cash flow hedges or amounts excluded from the assessment of our cash flow hedge effectiveness. The following table presents the effect and financial statement location of our derivative instruments not designated as hedging instruments on our consolidated statements of income and comprehensive income (in thousands):
Derivatives |  | Location |  | Realized and Unrealized Gain (Loss) |
--- | --- | --- | --- | --- | ---
|  |  |  |  | For the Year ended December 31, |
|  |  |  |  | 2012 |  |  | 2011 |  |  | 2010 |
Commodity contracts |  | Revenue |  | $ | 14,967 |  | $ | 14,283 |  | $ | 4,385 |
Commodity contracts |  | Cost of revenue |  |  | 3,333 |  |  | 3,137 |  |  | (1,001) |
Foreign currency contracts |  | Revenue |  |  | (2,384) |  |  | 1,653 |  |  | — |
Foreign currency contracts |  | Other income (expense), net |  |  | (2,271) |  |  | (386) |  |  | 2,536 |
|  |  |  | $ | 13,645 |  | $ | 18,687 |  | $ | 5,920 |
We enter into derivative instrument contracts which may require us to periodically post collateral. Certain of these derivative contracts contain clauses that are similar to credit-risk-related contingent features, including material adverse change, general adequate assurance and internal credit review clauses that may require additional collateral to be posted and/or settlement of the instruments in the event an aforementioned clause is triggered. The triggering events are not a quantifiable measure; rather they are based on good faith and reasonable determination by the counterparty that the triggers have occurred. The net liability position for such contracts, the collateral posted and the amount of assets required to be posted and or to settle the positions should a contingent feature be triggered is not significant as of December 31, 2012.

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- Definition The entire disclosure for the entity's entire derivative instruments and hedging activities. Describes an entity's risk management strategies, derivatives in hedging activities and non-hedging derivative instruments, the assets, obligations, liabilities, revenues and expenses arising therefrom, and the amounts of and methodologies and assumptions used in determining the amounts of such items. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=7668309&loc=d3e80784-113994 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4C -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5624171-113959 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4E -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5624181-113959 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4K -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5708775-113959 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1A -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5579245-113959 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(n)) -URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=7476318&loc=d3e41641-113959 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5579240-113959 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 30 -Section 45 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6441202&loc=d3e80720-113993 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=7476318&loc=d3e41638-113959 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=7476318&loc=d3e41635-113959 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 133 -Paragraph 44 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. 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