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

10. Fair Value Measurements

The carrying amounts of cash and cash equivalents, accounts receivable, net, accounts payable and accrued expenses and other current liabilities approximate fair value based on the short-term maturities of these instruments. We believe the carrying values of our debt and notes receivable approximate fair value since these instruments bear interest either at variable rates or fixed rates which are not significantly different than market rates. Based on the fair value hierarchy, our debt of $380.3 million as of December 31, 2012 and $287.1 million as of December 31, 2011 and our notes receivable of $12.7 million as of December 31, 2012 and $6.8 million as of December 31, 2011 are categorized in Level 3.

The following table presents information about our assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2012 and 2011 (in thousands):

 
   Level 1
   Level 2
   Level 3
   Sub-Total
   Netting
and
Collateral
   Total
  
   
2012                                       
Assets:                                      
Commodity contracts   $ 18,087   $ 57,682   $ —   $ 75,769   $ (56,115)   $ 19,654  
Foreign currency contracts     —     2,434     —     2,434     (2,289)     145  
Hedged item inventories     —     818     —     818     —     818  
   
    $ 18,087   $ 60,934   $ —   $ 79,021   $ (58,404)   $ 20,617  
   

Liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commodity contracts   $ 20,970   $ 44,732   $ —   $ 65,702   $ (49,562)   $ 16,140  
Foreign currency contracts     —     3,845     —     3,845     (2,289)     1,556  
Hedged item inventories     —     525     —     525     —     525  
   
    $ 20,970   $ 49,102   $ —   $ 70,072   $ (51,851)   $ 18,221  
   

2011  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets:                                      
Commodity contracts   $ 14,038   $ 51,033   $ —   $ 65,071   $ (43,275)   $ 21,796  
Foreign currency contracts     —     2,994     —     2,994     (893)     2,101  
Hedged item inventories     —     3,216     —     3,216     —     3,216  
Hedged item commitments     —     206     —     206     —     206  
   
    $ 14,038   $ 57,449   $ —   $ 71,487   $ (44,168)   $ 27,319  
   

Liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commodity contracts   $ 10,148   $ 46,754   $ —   $ 56,902   $ (43,291)   $ 13,611  
Foreign currency contracts     —     1,018     —     1,018     (893)     125  
Hedged item commitments     —     24     —     24     —     24  
Earn-out     —     —     4,194     4,194     —     4,194  
   
    $ 10,148   $ 47,796   $ 4,194   $ 62,138   $ (44,184)   $ 17,954  
   

For our derivative contracts, we may enter into master netting, collateral and offset agreements with counterparties. These agreements provide us the ability to offset a counterparty's rights and obligations, request additional collateral when necessary or liquidate the collateral in the event of counterparty default. We net fair value of cash collateral paid or received against fair value amounts recognized for net derivative positions executed with the same counterparty under the same master netting or offset agreement.

As of December 31, 2012, we had $22.9 million of cash collateral deposits held by financial counterparties included in other current assets in the accompanying consolidated balance sheets. In addition, as of December 31, 2012, we have offset $6.6 million of cash collateral received from customers against the total amount of commodity fair value assets in the above table. As of December 31, 2011, we had $11.8 million of cash collateral deposits held by financial counterparties and there were no significant amounts of cash collateral that were offset against the total commodity fair value assets and liabilities in the above table.

The following table presents information about our assets and liabilities that are measured at fair value on a recurring basis that utilized Level 3 inputs for the periods presented (in thousands):

 
   Beginning
of Period
   Total Gains
(Losses)
Included in
Earnings
   Settlements
   End
of Period
   Change in
Unrealized
Gains
Relating to
Assets and
Liabilities
that are
Held at
end of
Period
   Location of
Total Gains
(Losses)
Included in
Earnings
 
2012                                   
Assets:                                  
Commodity contracts   $ —   $ 1,271   $ 1,271   $ —   $ —   Revenue
     
Liabilities:                                  
Earn-out   $ 4,194   $ (110)   $ 4,304   $ —   $ —   Other income
(expense), net
     

2011  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assets:                                  
Commodity contracts   $ 90   $ —   $ 90   $ —   $ —   Revenue
     
Liabilities:                                  
Earn-out   $ 5,012   $ 818   $ —   $ 4,194   $ 818   Other income
(expense), net
 

There were no transfers between Level 1, 2 or 3 during the periods presented. In addition, there were no significant Level 3 purchases, sales or issuances for the periods presented.