Fair Value of Financial Instruments

Our cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, and other current assets and liabilities (excluding derivative instruments) are carried at amounts which reasonably approximate their fair values due to their short-term nature.

Commodity Derivatives

The following table summarizes the estimated fair values of our commodity derivative assets and liabilities reported in our unaudited condensed consolidated balance sheet at the dates indicated:



	December 31, 2016						March 31, 2016
	Derivative Assets			Derivative Liabilities			Derivative Assets			Derivative Liabilities
	(in thousands)
Level 1 measurements	$	3,358		$	(75,986	)	$	47,361		$	(3,983	)
Level 2 measurements	51,054			(40,982		)	32,700			(28,612		)
	54,412			(116,968		)	80,061			(32,595		)

Netting of counterparty contracts (1)	(2,690		)	2,690			(3,384		)	3,384
Net cash collateral provided (held)	(843		)	73,465			(18,176		)	599
Commodity derivatives	$	50,879		$	(40,813	)	$	58,501		$	(28,612	)


(1)	Relates to commodity derivative assets and liabilities that are expected to be net settled on an exchange or through a netting arrangement with the counterparty.

The following table summarizes the accounts that include our commodity derivative assets and liabilities in our unaudited condensed consolidated balance sheets at the dates indicated:



	December 31, 2016			March 31, 2016
	(in thousands)
Prepaid expenses and other current assets	$	50,879		$	58,501
Accrued expenses and other payables	(40,813		)	(28,612		)
Net commodity derivative asset	$	10,066		$	29,889

The following table summarizes our open commodity derivative contract positions at the dates indicated. We do not account for these derivatives as hedges.



Contracts	Settlement Period	Net Long (Short) Notional Units (in barrels)		Fair Value of Net Assets (Liabilities)
		(in thousands)
At December 31, 2016:
Cross-commodity (1)	January 2017–March 2017	53		$	1,348
Crude oil fixed-price (2)	January 2017–March 2017	(671	)	(2,469		)
Propane fixed-price (2)	January 2017–December 2017	106		1,338
Refined products fixed-price (2)	January 2017–January 2019	(7,027	)	(66,119		)
Refined products index (2)	January 2017–December 2017	(24	)	(197		)
Other	January 2017–March 2022			3,543
				(62,556		)
Net cash collateral provided				72,622
Net commodity derivative asset				$	10,066

At March 31, 2016:
Cross-commodity (1)	April 2016–March 2017	251		$	1,663
Crude oil fixed-price (2)	April 2016–December 2016	(1,583	)	(3,655		)
Propane fixed-price (2)	April 2016–December 2017	540		(592		)
Refined products fixed-price (2)	April 2016–June 2017	(5,355	)	48,557
Other	April 2016–March 2017			1,493
				47,466
Net cash collateral held				(17,577		)
Net commodity derivative asset				$	29,889


(1)	We may purchase or sell a physical commodity where the underlying contract pricing mechanisms are tied to different commodity price indices. These contracts are derivatives we have entered into as an economic hedge against the risk of one commodity price moving relative to another commodity price.


(2)	We may have fixed price physical purchases, including inventory, offset by floating price physical sales or floating price physical purchases offset by fixed price physical sales. These contracts are derivatives we have entered into as an economic hedge against the risk of mismatches between fixed and floating price physical obligations.

During the three months and nine months ended December 31, 2016, we recorded net losses of $57.7 million and $102.6 million, respectively, and during the three months and nine months ended December 31, 2015, we recorded net gains of $52.5 million and $97.1 million, respectively, from our commodity derivatives to cost of sales.

Credit Risk

We have credit policies that we believe minimize our overall credit risk, including an evaluation of potential counterparties’ financial condition (including credit ratings), collateral requirements under certain circumstances, and the use of industry standard master netting agreements, which allow for offsetting counterparty receivable and payable balances for certain transactions. At December 31, 2016, our primary counterparties were retailers, resellers, energy marketers, producers, refiners, and dealers. This concentration of counterparties may impact our overall exposure to credit risk, either positively or negatively, as the counterparties may be similarly affected by changes in economic, regulatory or other conditions. If a counterparty does not perform on a contract, we may not realize amounts that have been recorded in our unaudited condensed consolidated balance sheets and recognized in our net income.

Interest Rate Risk

Our Revolving Credit Facility is variable-rate debt with interest rates that are generally indexed to bank prime or LIBOR interest rates. At December 31, 2016, we had $1.5 billion of outstanding borrowings under our Revolving Credit Facility at a weighted average interest rate of 3.39%.

Fair Value of Fixed-Rate Notes

The following table provides fair value estimates of our fixed-rate notes at December 31, 2016 (in thousands):



2019 Notes	$	381,070
2021 Notes	$	379,443
2022 Notes	$	277,806
2023 Notes	$	725,667

For the 2019 Notes, 2021 Notes and 2023 Notes, the fair value estimates were developed based on publicly traded quotes and would be classified as Level 1 in the fair value hierarchy. For the 2022 Notes, the fair value estimate was developed using observed yields on publicly traded notes issued by us, adjusted for differences in the key terms of those notes and the key terms of our notes (examples include differences in the tenor of the debt, credit standing of the issuer, whether the notes are publicly traded, and whether the notes are secured or unsecured). This fair value estimate would be classified as Level 3 in the fair value hierarchy.