3.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 June 30, 2015, our derivative instruments, at their respective fair value positions were as follows (in millions, 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	2015	Commodity contracts for inventory hedging	5.4	BBL	$	53.090	$	0.611	$	3.3
	2016	Commodity contracts for inventory hedging	0.1	BBL		82.308		1.000		0.1
									$	3.4

Non-Designated	2015	Commodity contracts (long)	32.5	BBL	$	48.561	$	(2.025)	$	(65.8)
	2015	Commodity contracts (short)	28.6	BBL		61.486		3.238		92.6
	2016	Commodity contracts (long)	10.6	BBL		47.520		(1.311)		(13.9)
	2016	Commodity contracts (short)	8.0	BBL		59.020		1.150		9.2
	2017	Commodity contracts (long)	0.3	BBL		28.350		(1.333)		(0.4)
	2017	Commodity contracts (short)	0.4	BBL		28.570		1.750		0.7
	2018	Commodity contracts (short)	0.1	BBL		84.000		3.000		0.3
	2015	Foreign currency contracts	18.4	AUD		0.774		(0.005)		(0.1)
	2015	Foreign currency contracts	61.5	CAD		1.235		0.005		0.3
	2015	Foreign currency contracts	1,898.3	CLP		626.065		0.000		0.1
	2015	Foreign currency contracts	40,853.2	COP		2,516.788		(0.000)		(0.1)
	2015	Foreign currency contracts	52.4	EUR		1.105		(0.011)		(0.6)
	2015	Foreign currency contracts	137.5	GBP		1.550		(0.011)		(1.5)
	2015	Foreign currency contracts	2,372.2	MXN		15.371		(0.000)		(0.3)
	2015	Foreign currency contracts	33.0	SEK		8.566		0.003		0.1
	2015	Foreign currency contracts	65.7	SGD		1.345		(0.002)		(0.1)
	2015	Foreign currency contracts	120.2	ZAR		12.201		0.001		0.1
	2016	Foreign currency contracts	27.3	GBP		1.552		(0.018)		(0.5)
									$	20.1

The following table presents information about our derivative instruments measured at fair value and their locations on the consolidated balance sheets (in millions):


		As of
	Balance Sheet Location	June 30, 2015		December 31, 2014
Derivative assets:
Derivatives designated as hedging instruments
Commodity contracts	Short-term derivative assets, net	$	5.0	$	18.8
Commodity contracts	Accrued expenses and other current liabilities		0.8		4.7
			5.8		23.5
Derivatives not designated as hedging instruments
Commodity contracts	Short-term derivative assets, net		272.6		399.0
Commodity contracts	Identifiable intangible and other non-current assets		8.9		12.1
Commodity contracts	Accrued expenses and other current liabilities		200.3		234.1
Commodity contracts	Other long-term liabilities		3.3		4.8
Foreign currency contracts	Short-term derivative assets, net		1.6		21.3
Foreign currency contracts	Identifiable intangible and other non-current assets		0.1		0.5
Foreign currency contracts	Accrued expenses and other current liabilities		4.2		—
Foreign currency contracts	Other long-term liabilities		0.1		—
			491.1		671.8
		$	496.9	$	695.3

Derivative liabilities:
Derivatives designated as hedging instruments
Commodity contracts	Short-term derivative assets, net	$	1.8	$	1.0
Commodity contracts	Accrued expenses and other current liabilities		0.6		0.7
			2.4		1.7
Derivatives not designated as hedging instruments
Commodity contracts	Short-term derivative assets, net		128.9		76.0
Commodity contracts	Identifiable intangible and other non-current assets		1.9		0.6
Commodity contracts	Accrued expenses and other current liabilities		326.4		530.0
Commodity contracts	Other long-term liabilities		5.2		29.3
Foreign currency contracts	Short-term derivative assets, net		1.3		12.0
Foreign currency contracts	Accrued expenses and other current liabilities		6.9		—
Foreign currency contracts	Other long-term liabilities		0.4		—
			471.0		647.9
		$	473.4	$	649.6

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 millions):


		Realized and Unrealized						Realized and Unrealized
Derivative Instruments	Location	Loss				Hedged Items	Location	Gain (Loss)
		2015		2014				2015		2014

Three months ended June 30,
Commodity contracts	Cost of revenue	$	(20.1)	$	(2.1)	Inventories	Cost of revenue	$	19.8	$	(1.1)
Six months ended June 30,
Commodity contracts	Cost of revenue	$	(16.1)	$	(1.7)	Inventories	Cost of revenue	$	19.3	$	(8.6)

There were no gains or losses for the three and six months ended June 30, 2015 and 2014 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 six months ended June 30, 2015 and 2014.

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 millions):


		Realized and Unrealized
Derivatives	Location	Gain (Loss)
		2015		2014

Three months ended June 30,
Commodity contracts	Revenue	$	25.4	$	17.2
Commodity contracts	Cost of revenue		(16.4)		(0.6)
Foreign currency contracts	Revenue		(5.2)		(1.0)
Foreign currency contracts	Other (expense) income, net		(4.2)		(2.6)
		$	(0.4)	$	13.0

Six months ended June 30,
Commodity contracts	Revenue	$	46.0	$	24.1
Commodity contracts	Cost of revenue		(28.1)		9.0
Foreign currency contracts	Revenue		(1.3)		(1.3)
Foreign currency contracts	Other (expense) income, net		5.0		(3.3)
		$	21.6	$	28.5

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 June 30, 2015, the net liability position for such contracts is $35.9 million, the collateral posted is $28.9 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 $7.0 million. As of December 31, 2014, the net liability position for such contracts is $111.7 million, the collateral posted is $89.4 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 $22.3 million.