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Fair Value Measurements
 6 Months Ended
Jun. 30, 2013
Fair Value Measurements  
Fair Value Measurements

8.     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 $351.4 million and $380.3 million as of June 30, 2013 and December 31, 2012, respectively, and our notes receivable of $10.1 million and $12.7 million as of June 30, 2013 and December 31, 2012, respectively, are categorized in Level 3.

 

The following table presents information about our financial assets and liabilities that are measured at estimated fair value on a recurring basis (in thousands):

 

 

 

Level 1

 

Level 2

 

Level 3

 

Sub-Total

 

Netting
and
Collateral

 

Total

 

As of June 30, 2013

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodity contracts

 

$

21,781

 

$

56,741

 

$

—

 

$

78,522

 

$

(42,995

)

$

35,527

 

Foreign currency contracts

 

—

 

12,331

 

—

 

12,331

 

(8,790

)

3,541

 

Inventories

 

—

 

563

 

—

 

563

 

(563

)

—

 

Total

 

$

21,781

 

$

69,635

 

$

—

 

$

91,416

 

$

(52,348

)

$

39,068

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodity contracts

 

$

12,717

 

$

55,926

 

$

89

 

$

68,732

 

$

(53,085

)

$

15,647

 

Foreign currency contracts

 

—

 

10,385

 

—

 

10,385

 

(8,790

)

1,595

 

Inventories

 

—

 

1,853

 

—

 

1,853

 

(563

)

1,290

 

Total

 

$

12,717

 

$

68,164

 

$

89

 

$

80,970

 

$

(62,438

)

$

18,532

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of December 31, 2012

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodity contracts

 

$

18,087

 

$

57,682

 

$

—

 

$

75,769

 

$

(56,115

)

$

19,654

 

Foreign currency contracts

 

—

 

2,434

 

—

 

2,434

 

(2,289

)

145

 

Inventories

 

—

 

818

 

—

 

818

 

(525

)

293

 

Total

 

$

18,087

 

$

60,934

 

$

—

 

$

79,021

 

$

(58,929

)

$

20,092

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodity contracts

 

$

20,970

 

$

44,732

 

$

—

 

$

65,702

 

$

(49,562

)

$

16,140

 

Foreign currency contracts

 

—

 

3,845

 

—

 

3,845

 

(2,289

)

1,556

 

Inventories

 

—

 

525

 

—

 

525

 

(525

)

—

 

Total

 

$

20,970

 

$

49,102

 

$

—

 

$

70,072

 

$

(52,376

)

$

17,696

 

 

The following table presents information regarding the balance sheet location of our commodity and foreign currency contracts net assets and liabilities (in thousands):

 

 

 

As of

 

 

 

June 30, 2013

 

December 31, 2012

 

Commodity Contracts

 

 

 

 

 

Assets:

 

 

 

 

 

Other current assets

 

$

34,032

 

$

18,277

 

Identifiable intangible and other non-current assets

 

1,495

 

1,377

 

Total net assets

 

$

35,527

 

$

19,654

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

Accrued expenses and other current liabilities

 

$

14,778

 

$

15,152

 

Other long-term liabilities

 

869

 

988

 

Total net liabilities

 

$

15,647

 

$

16,140

 

 

 

 

 

 

 

Foreign Currency Contracts

 

 

 

 

 

Assets:

 

 

 

 

 

Other current assets

 

$

3,486

 

$

145

 

Identifiable intangible and other non-current assets

 

55

 

—

 

Total net assets

 

$

3,541

 

$

145

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

Accrued expenses and other current liabilities

 

$

1,595

 

$

1,458

 

Other long-term liabilities

 

—

 

98

 

Total net liabilities

 

$

1,595

 

$

1,556

 

 

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 June 30, 2013, we had $34.3 million of cash collateral deposits held by financial counterparties of which $10.7 million have been offset against the total amount of commodity fair value liabilities in the above table and the remaining $23.6 million is included in other current assets in the accompanying consolidated balance sheets.  Additionally, as of June 30, 2013, we have offset $0.6 million of cash collateral received from customers against the total amount of commodity fair value assets in the above table.  As of December 31, 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.  Additionally, 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.

 

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
Losses
Relating to
Liabilities that
are Held at end
of Period

 

Location of Total Gains
(Losses) Included in
Earnings

 

Three months ended June 30, 2013

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodity contracts

 

$

—

 

$

(89

)

$

—

 

$

(89

)

$

(89

)

Cost of revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended June 30, 2012

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Earn-out

 

$

4,323

 

$

19

 

$

4,304

 

$

—

 

$

—

 

Other (expense) income, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six months ended June 30, 2013

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodity contracts

 

$

—

 

$

(89

)

$

—

 

$

(89

)

$

(89

)

Cost of revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six months ended June 30, 2012

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Earn-out

 

$

4,194

 

$

(110

)

$

4,304

 

$

—

 

$

—

 

Other (expense) income, net

 

 

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