Fair Value Measurements
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Mar. 31, 2014
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Fair Value Measurements | 7. Fair Value Measurements Assets and Liabilities Measured at Fair Value on a Recurring Basis The following table presents assets and liabilities included in our Consolidated Balance Sheets that are recognized at fair value on a recurring basis, and indicates the fair value hierarchy utilized to determine such fair value as of March 31, 2014 and December 31, 2013.
Following is a summary of the valuation methodologies for assets and liabilities recorded in our Consolidated Balance Sheets at fair value on a recurring basis: Cash and Cash Equivalents As of March 31, 2014 and December 31, 2013, our cash and cash equivalents consisted primarily of U.S. Treasury Bills with original maturities of three months or less and money market mutual funds that invest in U.S. government obligations. Natural Gas Derivatives The derivative instruments that we use are primarily natural gas fixed price swaps and call options traded in the OTC markets with either large energy companies or large financial institutions. The derivatives are traded in months forward and settlements are scheduled to coincide with anticipated gas purchases during those future periods. These contracts settle using NYMEX futures prices and accordingly, to determine the fair value of these instruments, we use quoted market prices from NYMEX and standard pricing models with inputs derived from or corroborated by observable market data such as forward curves supplied by an industry recognized unrelated third party. See Note 6—Derivative Financial Instruments for additional information. |