Financial Derivative Instruments
|9 Months Ended|
Sep. 30, 2023
|Financial Derivative Instruments [Abstract]|
|Financial Derivative Instruments||
6. Financial Derivative Instruments
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, 2023, the Company had fuel futures contracts in place to hedge approximately 1.8 million gallons of diesel fuel for which the Company had a firm commitment to purchase. As of September 30, 2023 and December 31, 2022, the Company had asset derivatives with fair values of approximately $0.05 million and $0.5 million, respectively, recorded in other current assets and firm commitments with fair values of approximately $0.05 million and $0.5 million, respectively, recorded in other current liabilities on the condensed consolidated balance sheets.
As of September 30, 2023 and December 31, 2022, there was $0.05 million and $0.5 million, respectively, of 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 statements 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://www.xbrl.org/2003/role/disclosureRef