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. Fair value for our debt and notes receivable is derived using a discounted cash flow valuation methodology. The carrying values of these instruments 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 $746.6 million and $689.9 million as of December 31, 2015 and December 31, 2014, respectively, and our notes receivable of $7.4 million and $7.0 million as of December 31, 2015 and December 31, 2014, respectively 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, 2015 and 2014 (in millions):


									Netting and
	Level 1		Level 2		Level 3		Sub-Total		Collateral		Total
2015
Assets:
Commodity contracts	$	255.4	$	251.9	$	3.2	$	510.5	$	(279.0)	$	231.5
Foreign currency contracts		—		12.4		—		12.4		(4.1)		8.3
Cash surrender value of life insurance		—		2.4		—		2.4		—		2.4
Total	$	255.4	$	266.7	$	3.2	$	525.3	$	(283.1)	$	242.2
Liabilities:
Commodity contracts	$	340.1	$	123.4	$	0.2	$	463.7	$	(389.6)	$	74.1
Foreign currency contracts		—		5.0		—		5.0		(4.1)		0.9
Inventories		—		14.3				14.3		—		14.3
Total	$	340.1	$	142.7	$	0.2	$	483.0	$	(393.7)	$	89.3
2014
Assets:
Commodity contracts	$	173.7	$	495.6	$	4.2	$	673.5	$	(368.0)	$	305.5
Foreign currency contracts		—		21.8		—		21.8		(12.0)		9.8
Cash surrender value of life insurance		—		2.2		—		2.2		—		2.2
Total	$	173.7	$	519.6	$	4.2	$	697.5	$	(380.0)	$	317.5
Liabilities:
Commodity contracts	$	306.4	$	329.9	$	1.3	$	637.6	$	(595.6)	$	42.0
Foreign currency contracts		—		12.0		—		12.0		(12.0)		—
Inventories		—		22.9		—		22.9		—		22.9
Total	$	306.4	$	364.8	$	1.3	$	672.5	$	(607.6)	$	64.9

The cash surrender value of life insurance is in connection with the NQDC plan and was included in identifiable intangible and other non-current assets in the accompanying consolidated balance sheets.

Nonrecurring Fair Value Measurements. In connection with the acquisition of all of the outstanding stock of Pester, we committed to a plan to sell certain assets and liabilities of Pester’s fuel retail business. The fair value of the assets and liabilities held for sale were measured using a discounted cash flow valuation methodology. In accordance with the applicable accounting guidance, the long-lived assets held for sale were recorded at fair value less cost to sell at the acquisition date. The carrying amounts of the current assets and liabilities held for sale approximate fair value based on the short-term maturities of these instruments. Based on the fair value hierarchy, as of December 31, 2015, the fair value of the asset disposal group (excluding inventories) of $37.8 million and the liability disposal group of $10.6 million were categorized as Level 3, as significant unobservable inputs were used in the valuation of such assets and liabilities. The inventories of $4.2 million as of December 31, 2015 were categorized as Level 2 as they were valued based on the price to retailers in a wholesale market.

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


	As of December 31,
	2015		2014
Commodity Contracts
Assets:
Short-term derivative assets, net	$	212.6	$	294.3
Identifiable intangible and other non-current assets		18.9		11.2
Total net assets	$	231.5	$	305.5
Liabilities:
Accrued expenses and other current liabilities	$	68.7	$	41.3
Other long-term liabilities		5.4		0.7
Total net liabilities	$	74.1	$	42.0
Foreign Currency Contracts
Assets:
Short-term derivative assets, net	$	7.6	$	9.3
Identifiable intangible and other non-current assets		0.7		0.5
Total net assets	$	8.3	$	9.8
Liabilities:
Accrued expenses and other current liabilities	$	0.9	$	—
Total net liabilities	$	0.9	$	—

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, 2015, we had $174.6 million of cash collateral deposits held by financial counterparties, of which $132.2 million have been offset against the total amount of commodity fair value liabilities in the above table and the remaining $42.4 million is included in other current assets in the accompanying consolidated balance sheets. In addition, as of December 31, 2015, we have offset $21.6 million of cash collateral deposits received from customers against the total amount of commodity fair value assets in the above table. As of December 31, 2014, we had $301.0 million of cash collateral deposits held by financial counterparties, of which $274.3 million have been offset against the total amount of commodity fair value liabilities in the above table and the remaining $26.7 million is included in other current assets in the accompanying consolidated balance sheets. In addition, as of December 31, 2014, we have offset $46.7 million of cash collateral deposits 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 millions):


	Beginning of Period		Realized and Unrealized Gains (Losses) Included in Earnings		Settlements			Transfers into Level 3		End of Period		Change in Unrealized Gains (Losses) Relating to Assets and Liabilities that are Held at end of Period	Location of Realized and Unrealized gains (Losses) in Earnings
2015
Assets:
Commodity contracts	$	4.2	$	3.4	$	5.3	$	1.0	$	3.3	$	2.8	Revenue
Liabilities:
Commodity contracts	$	1.3	$	0.6	$	0.5	$	(0.1)	$	0.3	$	0.2	Cost of revenue
2014
Assets:
Commodity contracts	$	—	$	12.7	$	8.9	$	0.4	$	4.2	$	4.2	Revenue
Liabilities:
Commodity contracts	$	—	$	(1.4)	$	0.1	$	—	$	(1.3)	$	(1.3)	Cost of revenue

The nature of inputs that are considered Level 3 are modeled inputs. Commodity contracts are categorized in Level 3 due to the significance of the unobservable model inputs to their respective fair values. The unobservable model inputs, such as basis differentials, are based on the difference between the historical prices of our prior transactions and the underlying observable data as well as certain risk related to non-performance. The effect on our income before income taxes of a 10% change in the model input for non-performance risk would not be significant. There were no transfers between Level 1 and Level 2 during the periods presented. Transfers between Level 2 and Level 3 were due to the increased significance of basis adjustments which are Level 3 measurements.