Financial Derivative Instruments
|9 Months Ended|
Sep. 30, 2022
|Financial Derivative Instruments [Abstract]|
|Financial Derivative Instruments||
6. Financial Derivative Instruments
Beginning in the third quarter of 2022, the Company makes limited use of derivative instruments (futures contracts) to manage certain risks related to diesel fuel prices. The Company does not hold any derivatives for speculative purposes and it does not use derivatives with leveraged or complex features. The Company currently uses derivative instruments that are traded primarily over national exchanges such as the New York Mercantile Exchange (“NYMEX”). For accounting purposes, the Company has designated its derivative contracts as fair value hedges of firm commitments.
As of September 30, 2022, the Company had fuel futures contracts in place to hedge approximately 2.4 million gallons of diesel fuel for which the Company had a firm commitment to purchase. As of September 30, 2022, the Company had an asset derivative with a fair value of approximately $0.7 million recorded in other current assets and a firm commitment with a fair value of approximately $0.7 million recorded in other current liabilities on the condensed consolidated balance sheet.
As of September 30, 2022, there was no cash collateral provided to counterparties that was classified as restricted cash on the condensed consolidated balance sheet. All cash flows associated with purchasing and selling fuel derivative instruments are classified as other operating activities, net cash flows in the condensed consolidated statement of cash flows.
The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef