Derivative Instruments

6 Months Ended

Aug. 01, 2015

Derivative [Line Items]

DERIVATIVE INSTRUMENTS

DERIVATIVE INSTRUMENTS

In the first quarter of 2015, our Board of Directors authorized our management to enter into derivative instruments designed to mitigate certain risks; and we entered into collar contracts to mitigate our risk associated with market fluctuations in diesel fuel prices. These contracts are used strictly to limit our risk exposure and not as speculative transactions. Our derivative instruments associated with diesel fuel do not meet the requirements for cash flow hedge accounting. Therefore, our derivative instruments associated with diesel fuel will be marked-to-market to determine their fair value; and the associated gains and losses will be recognized currently in other income (expense) on our consolidated statements of operations.

Our outstanding derivative instrument contracts for the second quarter of 2015 were comprised of the following:

	Second Quarter
(In thousands)	2015
Diesel fuel collars (in gallons)	7,675

The fair value of our outstanding derivative instrument contracts was as follows:

		Assets (Liabilities)
(In thousands)		Second Quarter
Derivative Instrument	Balance Sheet Location	2015
Diesel fuel collars	Other current assets	$	216
	Other assets	656
	Accrued operating expenses	(1,086		)
	Other liabilities	(1,500		)
Total derivative instruments		$	(1,714	)

The effect of derivative instruments on the consolidated statements of operations was as follows:

		Amount of Gain (Loss)
(In thousands)		Second Quarter			Year-to-Date
Derivative Instrument	Statements of Operations Location	2015			2015
Diesel fuel collars
Realized	Other income (expense)	$	—		$	—
Unrealized	Other income (expense)	(1,742		)	(1,714		)
Total derivative instruments		$	(1,742	)	$	(1,714	)

The fair values of our derivative instruments are determined using observable inputs from commonly quoted markets. These fair value measurements are classified as Level 2 within the fair value hierarchy.