| Fair Value Disclosures |
Fair Value Disclosures
Fair Value Methods and Assumptions - Financial Assets and Liabilities
We used the following methods and assumptions in estimating fair value for our financial assets and liabilities:
| | • | Cash and cash equivalents. Cash equivalents include money market and mutual fund accounts and commercial paper. The carrying amounts reported on our consolidated balance sheets approximate fair value due to the short-term maturity or variable rates of these instruments. |
| | • | Energy commodity derivatives deposits. This asset represents short-term deposits we have made associated with our energy commodity derivatives contracts. The carrying amount reported on our consolidated balance sheets approximates fair value as the deposits change daily in relation to the associated contracts which are held in separate accounts. |
| | • | Energy commodity derivatives contracts. These include NYMEX futures and exchange-traded butane futures agreements related to petroleum products. These contracts are carried at fair value on our consolidated balance sheets and are valued based on quoted prices in active markets. See Note 13 – Derivative Financial Instruments for further disclosures regarding these contracts. |
| | • | Long-term receivables. These are primarily insurance receivables, whose fair value was determined by estimating the present value of future cash flows using a risk-free rate of interest derived from U.S. treasury rates. |
| | • | Debt. The fair value of our publicly traded notes was based on the prices of those notes at December 31, 2012 and 2013; however, where recent observable market trades were not available, prices were determined using adjustments to the last traded value for that debt issuance or by adjustments to the prices of similar debt instruments of peer entities that are actively traded. The carrying amount of borrowings, if any, under our revolving credit facility approximates fair value due to the variable rates of that instrument. |
Fair Value Measurements - Financial Assets and Liabilities
The following tables summarize the carrying amounts, fair values and recurring fair value measurements recorded or disclosed as of December 31, 2012 and 2013, based on the three levels established by ASC 820; Fair Value Measurements. The carrying values of cash and cash equivalents (classified as Level 1) and energy commodity derivatives deposits approximate fair value because of the short-term nature or variable rates of these instruments; therefore, these items are not presented in the following tables (in thousands): | | | | | | | | | | | | | | | | | | | | | | | | | | | | Fair Value Measurements as of December 31, 2012 using: | Assets (Liabilities) | | Carrying Amount | | Fair Value | | Quoted Prices in Active Markets for Identical Assets (Level 1) | | Significant Other Observable Inputs (Level 2) | | Significant Unobservable Inputs (Level 3) | Energy commodity derivatives contracts (liabilities) | | $ | (7,338 | ) | | $ | (7,338 | ) | | $ | (7,338 | ) | | $ | — |
| | $ | — |
| Long-term receivables | | $ | 5,135 |
| | $ | 5,108 |
| | $ | — |
| | $ | — |
| | $ | 5,108 |
| Debt | | $ | (2,393,408 | ) | | $ | (2,721,985 | ) | | $ | (2,721,985 | ) | | $ | — |
| | $ | — |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Fair Value Measurements as of December 31, 2013 using: | Assets (Liabilities) | | Carrying Amount | | Fair Value | | Quoted Prices in Active Markets for Identical Assets (Level 1) | | Significant Other Observable Inputs (Level 2) | | Significant Unobservable Inputs (Level 3) | Energy commodity derivatives contracts (liabilities) | | $ | (4,502 | ) | | $ | (4,502 | ) | | $ | (4,502 | ) | | $ | — |
| | $ | — |
| Long-term receivables | | $ | 2,730 |
| | $ | 2,658 |
| | $ | — |
| | $ | — |
| | $ | 2,658 |
| Debt | | $ | (2,685,287 | ) | | $ | (2,815,210 | ) | | $ | — |
| | $ | (2,815,210 | ) | | $ | — |
|
During 2013, we re-evaluated the market in which our debt securities trade. Based on that review, we determined that this market no longer included sufficient market activity to qualify as an active market, as defined in ASC 820, Fair Value Measurements. As a result, we transferred the hierarchical reporting level of the fair value measurement of our debt securities from Level 1 to Level 2. Our policy is to effect transfers between hierarchical reporting levels at the end of the reporting period where it has been determined that a change is required. |