Fair Value Measurements

6 Months Ended

Jun. 30, 2011

Fair Value Measurements

Fair Value Measurements

3.  Fair Value Measurements

ASC 820 clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants.  As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability.  As a basis for considering such assumptions, ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

Level 1 — Observable inputs such as quoted prices in active markets for identical assets or liabilities;

Level 2 — Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term for the assets or liabilities; and

Level 3 — Unobservable inputs for which there is little or no market data and that are significant to the fair value of the assets or liabilities.

The tables below present the Company’s financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2011 and December 31, 2010:

	Fair Value Measurements as of June 30, 2011
	Total		Level 1		Level 2		Level 3
	(in thousands)
Cash equivalents
Money market securities	$	213,182	$	213,182	$	—	$	—
Fuel derivative contracts, net*:
Crude oil caps	4,488		—		4,488		—
Crude oil collars	229		—		229		—
Heating oil caps	182		—		182		—
Heating oil collars	212		—		212		—
Total assets measured at fair value	$	218,293	$	213,182	$	5,111	$	—
	Fair Value Measurements as of December 31, 2010
	Total		Level 1		Level 2		Level 3
	(in thousands)
Cash equivalents
Money market securities	$	94,659	$	94,659	$	—	$	—
U.S. government-sponsored enterprise notes	133,048		—		133,048		—
Fuel derivative contracts, net*:
Crude oil caps	6,609		—		6,609		—
Crude oil collars	2,174		—		2,174		—
Total assets measured at fair value	$	236,490	$	94,659	$	141,831	$	—

* The Company had fuel derivative contract assets of $5.1 million and $8.8 million as of June 30, 2011 and December 31, 2010, respectively, in prepaid expenses and other assets in the unaudited Consolidated Balance Sheets.

Cash equivalents.  The Company’s cash equivalents consist of money market securities and U.S. government-sponsored enterprise notes.  The money market securities are classified as Level 1 investments and are valued using inputs observable in markets for identical securities.  The U.S. government-sponsored enterprise notes with contractual maturities less than three months are classified as Level 2 investments and valued using inputs observable in active markets for similar securities.

Fuel derivative contracts.  The Company’s fuel derivative contracts consist of heating oil and crude oil caps (or call options) and collars (a combination of call options and put options) which are not traded on a public exchange. The fair value of these instruments is determined based on inputs available from public markets; therefore, they are classified as Level 2 in the fair value hierarchy.

There were no assets measured at fair value on a recurring basis using unobservable inputs (Level 3) as of June 30, 2011 and December 31, 2010.

Nonfinancial Assets Measured at Fair Value on a Nonrecurring Basis

See Note 6 - Leases, for information related to fair value measurements of nonfinancial assets on a nonrecurring basis performed as of June 30, 2011.