Derivative Instruments (Tables)

12 Months Ended

Dec. 31, 2012

Outstanding Trading Contracts

As of December 31, 2012, we had the following outstanding trading contracts, which we accounted for as derivatives:

	Quantity in		Estimated Market		Weighted Average
At December 31, 2012	Gallons		Prices		Contract Prices
Forward Contracts
Sale		1,262,000	$	0.7550 — $1.3650	$	0.9214
Purchase		2,648,000	$	0.7550 — $1.3300	$	0.9291

Fair Values of Derivative Contracts Recorded in Consolidated Balance Sheets

Fair values of the derivative contracts recorded in the consolidated balance sheets as of December 31, 2012 and 2011, are as follows:

	Asset Derivatives
		Fair Value
(in thousands)	Balance Sheet Location	December 31, 2012		December 31, 2011
Derivatives not designated as hedging instruments
Forward contracts	Mark-to-market energy assets	$	182	$	1,686
Derivatives designated as fair value hedges
Put option (1)	Mark-to-market energy assets		—		68
Call option (2)	Mark-to-market energy assets		28		—
Total asset derivatives		$	210	$	1,754
	Liability Derivatives
		Fair Value
(in thousands)	Balance Sheet Location	December 31, 2012		December 31, 2011
Derivatives not designated as hedging instruments
Forward contracts	Mark-to-market energy liabilities	$	331	$	1,496
Total liability derivatives		$	331	$	1,496

(1) We purchased a put option for the propane price cap program in August 2011. The put option was exercised in January through March of 2012 as the propane prices fell below the strike price of $1.445 per gallon during this period.

(2) As a fair value hedge with no ineffective portion, the unrealized gains and losses associated with this call option are recorded in cost of sales, offset by the corresponding change in the value of propane inventory (hedged item), which is also recorded in cost of sales. The amounts in cost of sales offset to zero and the unrealized gains and losses of this call option effectively changed the value of propane inventory.

Effects of Gains and Losses from Derivative Instruments

The effects of gains and losses from derivative instruments are as follows:

	Amount of Gain (Loss) on Derivatives:
	Location of Gain (Loss) on Derivatives	For the Years Ended December 31,
(in thousands)		2012			2011			2010
Derivatives designated as fair value hedges:
Put Option	Cost of Sales	$	27		$	—		$	—
Put/Call Option (1)	Propane Inventory		(40	)		(23	)		—
Derivatives not designated as hedging instruments:
Put Option	Cost of Sales		—			—			(168	)
Unrealized gain (loss) on forward contracts	Revenue		(339	)		41			284
Total			($352	)	$	18		$	116

⁽¹⁾  As a fair value hedge with no ineffective portion, the unrealized gains and losses associated with this put option are recorded in cost of sales, offset by the corresponding change in the value of propane inventory (hedged item), which is also recorded in cost of sales. The amounts in cost of sales offset to zero and the unrealized gains and losses of this put option effectively changed the value of propane inventory.

Effects of Trading Activities on Consolidated Statements of Income

The effects of trading activities on the consolidated statements of income are as follows:

	Amount of Trading Revenue
	Location of Gain	For the Years Ended December 31,
(in thousands)	(Loss) on Derivatives	2012			2011		2010
Realized gain on forward contracts/put option	Revenue	$	2,695		$	2,215	$	1,540
Unrealized gain (loss) on forward contracts	Revenue		(339	)		41		284
Total		$	2,356		$	2,256	$	1,824