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)


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.