Fair Value

6 Months Ended

Jun. 30, 2011

Fair Value

Fair Value

6. Fair Value

Fair value measurements and disclosures relate primarily to the Partnership’s derivative positions discussed in Note 5. The following table presents the derivative instruments carried at fair value as of June 30, 2011 and December 31, 2010 (in thousands):

As of June 30, 2011	Assets		Liabilities
Significant other observable inputs (Level 2)
Commodity contracts	$	333	$	(81,878	)
Significant unobservable inputs (Level 3)
Commodity contracts	4,731		(27,021		)
Embedded derivatives in commodity contracts	1,120		(50,567		)
Total carrying value in Condensed Consolidated Balance Sheet	$	6,184	$	(159,466	)

As of December 31, 2010	Assets		Liabilities
Significant other observable inputs (Level 2)
Commodity contracts	$	52	$	(77,776	)
Significant unobservable inputs (Level 3)
Commodity contracts	3,674		(18,031		)
Embedded derivatives in commodity contracts	1,036		(35,972		)
Total carrying value in Condensed Consolidated Balance Sheet	$	4,762	$	(131,779	)

Changes in Level 3 Fair Value Measurements

The table below includes a rollforward of the balance sheet amounts for the three and six months ended June 30, 2011 and 2010 for assets and liabilities classified by the Partnership within Level 3 of the valuation hierarchy (in thousands).

	Three months ended June 30, 2011
	Commodity Derivative Contracts (net)			Embedded Derivatives in Commodity Contracts (net)
Fair value at beginning of period	$	(35,906	)	$	(50,607	)
Total gain or (loss) (realized and unrealized) included in earnings (1)	10,456			(2,825		)
Settlements	3,160			3,985
Fair value at end of period	$	(22,290	)	$	(49,447	)
The amount of total gain or (loss) for the period included in earnings attributable to the change in unrealized gains or losses relating to contracts still held at end of period (1)	$	10,206		$	(2,429	)

	Three months ended June 30, 2010
	Commodity Derivative Contracts (net)			Embedded Derivatives in Commodity Contracts (net)			Embedded Derivative in Debt Contract
Fair value at beginning of period	$	(7,907	)	$	(30,861	)	$	(134	)
Total gain (realized and unrealized) included in earnings (1)	13,029			4,183			3
Settlements (net)	226			3,042			—
Fair value at end of period	$	5,348		$	(23,636	)	$	(131	)
The amount of total gain for the period included in earnings attributable to the change in unrealized gains or losses relating to contracts still held at end of period (1)	$	10,009		$	7,225		$	3

	Six months ended June 30, 2011
	Commodity Derivative Contracts (net)			Embedded Derivatives in Commodity Contracts (net)
Fair value at beginning of period	$	(14,357	)	$	(34,936	)
Total loss (realized and unrealized) included in earnings (1)	(12,537		)	(22,105		)
Settlements	4,604			7,594
Fair value at end of period	$	(22,290	)	$	(49,447	)
The amount of total losses for the period included in earnings attributable to the change in unrealized gains or losses relating to contracts still held at end of period (1)	$	(10,578	)	$	(20,277	)

	Six months ended June 30, 2010
	Commodity Derivative Contracts (net)			Embedded Derivatives in Commodity Contracts (net)			Interest Rate Contracts			Embedded Derivative in Debt Contract
Fair value at beginning of period	$	(11,340	)	$	(34,199	)	$	509		$	(190	)
Total gain (realized and unrealized) included in earnings (1)	10,271			5,120			1,871			59
Settlements (net)	6,417			5,443			(2,380		)	—
Fair value at end of period	$	5,348		$	(23,636	)	$	—		$	(131	)
The amount of total gains for the period included in earnings attributable to the change in unrealized gains or losses relating to contracts still held at end of period (1)	$	7,551		$	10,562		$	—		$	59

(1) Gains and losses on Commodity Derivative Contracts classified as Level 3 are recorded in Derivative gain (loss) related to revenue. Gains and losses on Embedded Derivatives in Commodity Contracts are recorded in Purchased product costs, Derivative (gain) loss related to purchased product costs and Derivative loss (gain) related to facility expenses.  Gains on Embedded Derivatives in Debt Contract are recorded in Miscellaneous income (expense), net.  Gains on Interest Rate Contracts are recorded in Derivative gain related to interest expense.