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Derivatives | 9 Months Ended
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Sep. 30, 2014
Derivatives |
Derivatives | 2.Derivatives We enter into financial derivative contracts in order to mitigate the risk of market price fluctuations in aviation, marine and land fuel, to offer our customers fuel pricing alternatives to meet their needs and to mitigate the risk of fluctuations in foreign currency exchange rates. We also enter into proprietary derivative transactions, primarily intended to capitalize on arbitrage opportunities related to basis or time spreads related to fuel products we sell. We have applied the normal purchase and normal sales exception (“NPNS”), as provided by accounting guidance for derivative instruments and hedging activities, to certain of our physical forward sales and purchase contracts. While these contracts are considered derivative instruments under the guidance for derivative instruments and hedging activities, they are not recorded at fair value, but rather are recorded in our consolidated financial statements when physical settlement of the contracts occurs. If it is determined that a transaction designated as NPNS no longer meets the scope of the exception, the fair value of the related contract is recorded as an asset or liability on the consolidated balance sheet and the difference between the fair value and the contract amount is immediately recognized through earnings. 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. 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. 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 September 30, 2014, 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):
|  |  |  |  |  |  |  |  |  |  |  |  | Weighted |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  | Average |  |  |
|  |  |  |  |  |  |  |  |  | Weighted |  | Mark-to- |  |  |
|  | Settlement |  |  |  |  |  |  |  | Average |  | Market |  | Fair Value
Hedge Strategy |  | Period |  | Derivative Instrument |  | Notional |  | Unit |  | Fixed Price |  | Amount |  | Amount
Fair Value Hedge |  | 2014 |  | Commodity contracts for inventory hedging (long) |  | 267 |  | BBL |  | $ | 106.35 |  | $ | (2.850) |  | $ | (761)
|  | 2014 |  | Commodity contracts for inventory hedging (short) |  | 4,853 |  | BBL |  |  | 72.52 |  |  | 2.912 |  |  | 14,130
|  | 2015 |  | Commodity contracts for inventory hedging (short) |  | 10 |  | BBL |  |  | 113.17 |  |  | 1.300 |  |  | 13
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 13,382
Non-Designated |  | 2014 |  | Commodity contracts (long) |  | 14,323 |  | BBL |  | $ | 81.37 |  | $ | (4.211) |  | $ | (60,319)
|  | 2014 |  | Commodity contracts (short) |  | 13,783 |  | BBL |  |  | 91.92 |  |  | 5.316 |  |  | 73,275
|  | 2015 |  | Commodity contracts (long) |  | 17,690 |  | BBL |  |  | 70.99 |  |  | (1.803) |  |  | (31,900)
|  | 2015 |  | Commodity contracts (short) |  | 12,864 |  | BBL |  |  | 98.41 |  |  | 3.234 |  |  | 41,604
|  | 2016 |  | Commodity contracts (long) |  | 744 |  | BBL |  |  | 91.37 |  |  | (3.231) |  |  | (2,404)
|  | 2016 |  | Commodity contracts (short) |  | 392 |  | BBL |  |  | 95.86 |  |  | 3.926 |  |  | 1,539
|  | 2017 |  | Commodity contracts (long) |  | 56 |  | BBL |  |  | 24.20 |  |  | (0.214) |  |  | (12)
|  | 2017 |  | Commodity contracts (short) |  | 11 |  | BBL |  |  | 70.94 |  |  | 5.909 |  |  | 65
|  | 2018 |  | Commodity contracts (long) |  | 18 |  | BBL |  |  | 25.66 |  |  | — |  |  | —
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 21,848
|  | 2014 |  | Foreign currency contracts (long) |  | 10,746 |  | AUD |  |  | 0.93 |  |  | (0.060) |  |  | (641)
|  | 2014 |  | Foreign currency contracts (short) |  | 8,664 |  | AUD |  |  | 0.91 |  |  | 0.051 |  |  | 445
|  | 2014 |  | Foreign currency contracts (long) |  | 5,183 |  | BRL |  |  | 2.28 |  |  | (0.030) |  |  | (157)
|  | 2014 |  | Foreign currency contracts (long) |  | 7,690 |  | CAD |  |  | 1.09 |  |  | (0.026) |  |  | (201)
|  | 2014 |  | Foreign currency contracts (short) |  | 36,225 |  | CAD |  |  | 1.09 |  |  | 0.028 |  |  | 1,014
|  | 2014 |  | Foreign currency contracts (long) |  | 1,847,698 |  | CLP |  |  | 587.54 |  |  | (0.000) |  |  | (180)
|  | 2014 |  | Foreign currency contracts (short) |  | 2,385,660 |  | CLP |  |  | 583.07 |  |  | 0.000 |  |  | 261
|  | 2014 |  | Foreign currency contracts (long) |  | 19,179,268 |  | COP |  |  | 1,923.93 |  |  | (0.000) |  |  | (580)
|  | 2014 |  | Foreign currency contracts (short) |  | 22,970,683 |  | COP |  |  | 1,926.57 |  |  | 0.000 |  |  | 705
|  | 2014 |  | Foreign currency contracts (long) |  | 35,110 |  | DKK |  |  | 5.60 |  |  | (0.010) |  |  | (349)
|  | 2014 |  | Foreign currency contracts (long) |  | 11,303 |  | EUR |  |  | 1.33 |  |  | (0.072) |  |  | (818)
|  | 2014 |  | Foreign currency contracts (short) |  | 39,442 |  | EUR |  |  | 1.33 |  |  | 0.079 |  |  | 3,124
|  | 2014 |  | Foreign currency contracts (long) |  | 84,016 |  | GBP |  |  | 1.67 |  |  | (0.046) |  |  | (3,889)
|  | 2014 |  | Foreign currency contracts (short) |  | 135,006 |  | GBP |  |  | 1.67 |  |  | 0.061 |  |  | 8,169
|  | 2014 |  | Foreign currency contracts (short) |  | 110,129 |  | INR |  |  | 61.29 |  |  | 0.000 |  |  | 25
|  | 2014 |  | Foreign currency contracts (long) |  | 466,074 |  | JPY |  |  | 103.49 |  |  | (0.000) |  |  | (140)
|  | 2014 |  | Foreign currency contracts (short) |  | 735,479 |  | JPY |  |  | 103.18 |  |  | 0.001 |  |  | 443
|  | 2014 |  | Foreign currency contracts (long) |  | 1,381,969 |  | MXN |  |  | 13.18 |  |  | (0.002) |  |  | (2,594)
|  | 2014 |  | Foreign currency contracts (short) |  | 1,240,477 |  | MXN |  |  | 13.17 |  |  | 0.002 |  |  | 2,395
|  | 2014 |  | Foreign currency contracts (long) |  | 23,081 |  | NOK |  |  | 6.24 |  |  | (0.004) |  |  | (81)
|  | 2014 |  | Foreign currency contracts (short) |  | 65,802 |  | NOK |  |  | 6.25 |  |  | 0.004 |  |  | 280
|  | 2014 |  | Foreign currency contracts (short) |  | 5,676 |  | PLN |  |  | 3.15 |  |  | 0.019 |  |  | 107
|  | 2014 |  | Foreign currency contracts (short) |  | 28,950 |  | RON |  |  | 3.32 |  |  | 0.020 |  |  | 591
|  | 2014 |  | Foreign currency contracts (long) |  | 11,651 |  | SGD |  |  | 1.25 |  |  | (0.017) |  |  | (195)
|  | 2014 |  | Foreign currency contracts (short) |  | 19,956 |  | SGD |  |  | 1.25 |  |  | 0.016 |  |  | 323
|  | 2014 |  | Foreign currency contracts (long) |  | 77,303 |  | ZAR |  |  | 10.82 |  |  | (0.004) |  |  | (290)
|  | 2014 |  | Foreign currency contracts (short) |  | 117,356 |  | ZAR |  |  | 10.94 |  |  | 0.004 |  |  | 498
|  | 2014 |  | Foreign currency contracts (short) |  | 112 |  | CHF |  |  | 0.91 |  |  | 0.054 |  |  | 6
|  | 2014 |  | Foreign currency contracts (long) |  | 221,819 |  | KRW |  |  | 1,019.73 |  |  | (0.000) |  |  | (7)
|  | 2015 |  | Foreign currency contracts (long) |  | 600 |  | GBP |  |  | 1.66 |  |  | (0.040) |  |  | (24)
|  | 2015 |  | Foreign currency contracts (short) |  | 33,150 |  | GBP |  |  | 1.66 |  |  | 0.033 |  |  | 1,094
|  | 2016 |  | Foreign currency contracts (short) |  | 5,125 |  | GBP |  |  | 1.65 |  |  | 0.028 |  |  | 141
|  | 2017 |  | Foreign currency contracts (short) |  | 250 |  | GBP |  |  | 1.67 |  |  | 0.064 |  |  | 16
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 9,491
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 31,339
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
|  |  |  | September 30, |  | December 31,
|  | Balance Sheet Location |  | 2014 |  | 2013
Derivative assets: |  |  |  |  |  |  |  |
Derivatives designated as hedging instruments |  |  |  |  |  |
Commodity contracts |  | Other current assets |  | $ | 11,207 |  | $ | 735
Commodity contracts |  | Accrued expenses and other current liabilities |  |  | 3,170 |  |  | —
|  |  |  |  | 14,377 |  |  | 735
Derivatives not designated as hedging instruments |  |  |  |  |  |
Commodity contracts |  | Other current assets |  |  | 90,585 |  |  | 47,062
Commodity contracts |  | Identifiable intangible and other non-current assets |  |  | 9,837 |  |  | 1,642
Commodity contracts |  | Accrued expenses and other current liabilities |  |  | 46,130 |  |  | 1,141
Commodity contracts |  | Other long-term liabilities |  |  | 6,981 |  |  | 874
Foreign currency contracts |  | Other current assets |  |  | 16,912 |  |  | 5,003
Foreign currency contracts |  | Identifiable intangible and other non-current assets |  |  | 469 |  |  | —
Foreign currency contracts |  | Accrued expenses and other current liabilities |  |  | 2,476 |  |  | 3,483
|  |  |  |  | 173,390 |  |  | 59,205
|  |  |  | $ | 187,767 |  | $ | 59,940
Derivative liabilities: |  |  |  |  |  |  |  |
Derivatives designated as hedging instruments |  |  |  |  |  |
Commodity contracts |  | Other current assets |  | $ | 501 |  | $ | 1,544
Commodity contracts |  | Accrued expenses and other current liabilities |  |  | 494 |  |  | —
|  |  |  |  | 995 |  |  | 1,544
Derivatives not designated as hedging instruments |  |  |  |  |  |
Commodity contracts |  | Other current assets |  |  | 19,213 |  |  | 26,876
Commodity contracts |  | Identifiable intangible and other non-current assets |  |  | 472 |  |  | 894
Commodity contracts |  | Accrued expenses and other current liabilities |  |  | 97,135 |  |  | 15,473
Commodity contracts |  | Other long-term liabilities |  |  | 14,865 |  |  | 1,228
Foreign currency contracts |  | Other current assets |  |  | 6,035 |  |  | 2,867
Foreign currency contracts |  | Identifiable intangible and other non-current assets |  |  | 7 |  |  | —
Foreign currency contracts |  | Accrued expenses and other current liabilities |  |  | 4,324 |  |  | 8,789
Foreign currency contracts |  | Other long-term liabilities |  |  | — |  |  | 147
|  |  |  |  | 142,051 |  |  | 56,274
|  |  |  | $ | 143,046 |  | $ | 57,818
The following table presents the effect 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):
|  |  |  | Realized and Unrealized |  |  |  |  |  | Realized and Unrealized
Derivative |  |  |  | Gain (Loss) |  | Hedged |  |  |  | Gain (Loss)
Instruments |  | Location |  | 2014 |  | 2013 |  | Items |  | Location |  | 2014 |  | 2013
Three months ended September 30, |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commodity contracts |  | Cost of revenue |  | $ | 36,273 |  | $ | (12,032) |  | Inventories |  | Cost of revenue |  | $ | (36,227) |  | $ | 10,937
Nine months ended September 30, |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commodity contracts |  | Cost of revenue |  | $ | 34,572 |  | $ | 7,593 |  | Inventories |  | Cost of revenue |  | $ | (44,869) |  | $ | (7,224)
There were no gains or losses for the three and nine months ended September 30, 2014 and 2013 that were excluded from the assessment of the effectiveness of our fair value hedges. There were no cash flow hedging activities during the three and nine months ended September 30, 2014 and the cash flow hedging activities during the three and nine months ended September 30, 2013 were not significant. 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):
|  |  |  | Realized and Unrealized
|  |  |  | Gain (Loss)
Derivatives |  | Location |  | 2014 |  | 2013
Three months ended September 30, |  |  |  |  |  |  |  |
Commodity contracts |  | Revenue |  | $ | 19,775 |  | $ | 6,589
Commodity contracts |  | Cost of revenue |  |  | 760 |  |  | (521)
Foreign currency contracts |  | Revenue |  |  | 2,901 |  |  | (1,992)
Foreign currency contracts |  | Other income (expense), net |  |  | 8,874 |  |  | (6,105)
|  |  |  | $ | 32,310 |  | $ | (2,029)
Nine months ended September 30, |  |  |  |  |  |  |  |
Commodity contracts |  | Revenue |  | $ | 43,918 |  | $ | 26,096
Commodity contracts |  | Cost of revenue |  |  | 9,805 |  |  | 893
Foreign currency contracts |  | Revenue |  |  | 1,564 |  |  | 748
Foreign currency contracts |  | Other income (expense), net |  |  | 5,549 |  |  | (2,263)
|  |  |  | $ | 60,836 |  | $ | 25,474
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. As of September 30, 2014, the net liability position for such contracts is $23.6 million, the collateral posted is $2.2 million and the amount of assets required to be posted and/or to settle the positions should a credit-risk contingent feature be triggered is $21.4 million. As of December 31, 2013, the net liability position for derivative instrument contracts that contain credit-risk contingent features was not significant.

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- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 30 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=35736893&loc=d3e80748-113994 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4A -URI http://asc.fasb.org/extlink&oid=35706170&loc=SL5618551-113959 Reference 3: 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=35706170&loc=SL5708775-113959 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 25 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6886632&loc=d3e76258-113986 Reference 5: 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=35706170&loc=SL5624181-113959 Reference 6: 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 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4H -URI http://asc.fasb.org/extlink&oid=35706170&loc=SL5624258-113959 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4B -URI http://asc.fasb.org/extlink&oid=35706170&loc=SL5624163-113959 Reference 9: 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=26873400&loc=d3e23780-122690 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4J -URI http://asc.fasb.org/extlink&oid=35706170&loc=SL5708773-113959 Reference 11: 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=35736893&loc=d3e80784-113994 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4D -URI http://asc.fasb.org/extlink&oid=35706170&loc=SL5624177-113959 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=35706170&loc=d3e41620-113959 Reference 14: 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=35706170&loc=SL5579245-113959 Reference 15: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1B -URI http://asc.fasb.org/extlink&oid=35706170&loc=SL5580258-113959 Reference 16: 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=35706170&loc=SL5579240-113959 Reference 17: 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=35706170&loc=d3e41641-113959 Reference 18: 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=35706170&loc=d3e41638-113959 Reference 19: 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=35706170&loc=SL5624171-113959 + Details
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