Fair Value of Financial Instruments

9 Months Ended

Dec. 31, 2021

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 sheets at the dates indicated:


	December 31, 2021				March 31, 2021
	Derivative Assets		Derivative Liabilities		Derivative Assets		Derivative Liabilities
	(in thousands)
Level 1 measurements	$	39,882	$	(13,497)	$	12,312	$	(17,857)
Level 2 measurements	33,588		(20,417)		37,520		(24,474)
	73,470		(33,914)		49,832		(42,331)

Netting of counterparty contracts (1)	(13,550)		13,550		(12,648)		12,648
Net cash collateral (held) provided	(5,755)		—		2,660		5,543
Commodity derivatives	$	54,165	$	(20,364)	$	39,844	$	(24,140)

(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. Our physical contracts that do not qualify as normal purchase normal sale transactions are not subject to such netting arrangements.

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, 2021		March 31, 2021
	(in thousands)
Prepaid expenses and other current assets	$	54,165	$	39,844

Accrued expenses and other payables	(20,278)		(21,562)
Other noncurrent liabilities	(86)		(2,578)
Net commodity derivative asset	$	33,801	$	15,704

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, 2021:
Crude oil fixed-price (1)	January 2022–December 2023	(1,030)	$	27,054
Propane fixed-price (1)	January 2022–December 2023	6	6,145
Refined products fixed-price (1)	January 2022–December 2022	(278)	(2,084)
Butane fixed-price (1)	January 2022–December 2023	(446)	(5,273)
Other	January 2022–December 2022		13,714
			39,556
Net cash collateral held			(5,755)
Net commodity derivative asset			$	33,801

At March 31, 2021:
Crude oil fixed-price (1)	April 2021–December 2023	(1,850)	$	(5,414)
Propane fixed-price (1)	April 2021–December 2023	(195)	2,188
Refined products fixed-price (1)	April 2021–January 2022	(503)	1,928
Butane fixed-price (1)	April 2021–March 2022	(753)	(3,764)
Other	April 2021–June 2022		12,563
			7,501
Net cash collateral provided			8,203
Net commodity derivative asset			$	15,704

(1) 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 ended December 31, 2021 and 2020, we recorded net losses of $2.2 million and $24.6 million, respectively, from our commodity derivatives to revenues and cost of sales in our unaudited condensed consolidated statements of operations. During the nine months ended December 31, 2021 and 2020, we recorded net losses of $42.9 million and $55.2 million, respectively, from our commodity derivatives to revenues and cost of sales in our unaudited condensed consolidated statements of operations. The amounts for the three months and nine months ended December 31, 2020 do not include net gains and losses related to Mid-Con (as defined herein) and Gas Blending (as defined herein), as these amounts have been classified as discontinued operations within our unaudited condensed consolidated statements of operations (see Note 16).

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, 2021, 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

The ABL Facility is variable-rate debt with interest rates that are generally indexed to the Wall Street Journal prime rate or LIBOR interest rate (or successor rate). At December 31, 2021, we had $156.0 million of outstanding borrowings under the ABL Facility at a weighted average interest rate of 4.24%.

Fair Value of Fixed-Rate Notes

The following table provides fair value estimates of our fixed-rate notes at December 31, 2021 (in thousands):


Senior Secured Notes:
2026 Senior Secured Notes	$	2,109,826
Senior Unsecured Notes:
2023 Notes	$	514,734
2025 Notes	$	327,134
2026 Notes	$	285,312

For the 2026 Senior Secured Notes and Senior Unsecured Notes, the fair value estimates were developed based on publicly traded quotes and would be classified as Level 2 in the fair value hierarchy.