Derivative Instruments (Tables)

3 Months Ended

Mar. 31, 2013

Derivative Instruments

Derivatives designated and not designated as hedging instruments

	Three Months Ended
	March 31,
	2013			2012
	(Thousands)
Commodity derivatives designated as cash flow hedges
Amount of (loss) gain recognized in OCI (effective portion), net of tax	$	(52,601	)	$	107,488
Amount of gain reclassified from accumulated OCI into operating revenues (effective portion), net of tax	25,833			47,986
Amount of loss recognized in operating revenues (ineffective portion) (a)	(481		)	(31		)
Interest rate derivatives designated as cash flow hedges
Amount of gain recognized in OCI (effective portion), net of tax	$	–		$	2,373
Amount of loss reclassified from accumulated OCI, net of tax, into interest expense (effective portion)	(36		)	(65		)
Commodity derivatives designated as fair value hedges (b)
Amount of (loss) gain recognized in operating revenues for fair value commodity contracts	$	(3,539	)	$	7,072
Fair value gain (loss) recognized in operating revenues for inventory designated as hedged item	4,537			(9,931		)
Derivatives not designated as hedging instruments
Amount of (loss) gain recognized in operating revenues	$	(262	)	$	2,463

(a) No amounts have been excluded from effectiveness testing of cash flow hedges.

(b) For the three months ended March 31, 2013, the net impact on operating revenues associated with commodity derivatives as fair value hedges was a $1.3 million gain which resulted from the Company’s election to exclude the spot/forward differential from the assessment of effectiveness of the fair value hedges and a $0.3 million loss due to changes in basis. For the three months ended March 31, 2012, the net impact on operating revenues associated with commodity derivatives as fair value hedges was a $3.3 million loss which resulted from the Company’s election to exclude the spot/forward differential from the assessment of effectiveness of the fair value hedges and a $0.4 million gain due to changes in basis.

Asset and liability derivatives

	As of March 31,		As of December 31,
	2013		2012
	(Thousands)
Asset derivatives
Commodity derivatives designated as hedging instruments	$	153,741	$	259,459
Commodity derivatives not designated as hedging instruments	29,986		44,778
Total asset derivatives	$	183,727	$	304,237
Liability derivatives
Commodity derivatives designated as hedging instruments	$	59,209	$	27,946
Commodity derivatives not designated as hedging instruments	32,898		47,616
Total liability derivatives	$	92,107	$	75,562

Schedule of impact of netting agreements and margin deposits on gross derivative assets and liabilities

As of March 31, 2013	Derivative instruments, recorded in the Condensed Consolidated Balance Sheet, gross		Derivative instruments subject to master netting agreements		Margin deposits remitted to counterparties		Derivative instruments, net
	(Thousands)
Asset derivatives:
Derivative instruments, at fair value	$	183,727	$	(66,428)	$	–	$	117,299
Liability derivatives:
Derivative instruments, at fair value	$	92,107	$	(66,428)	$	(1,125)	$	24,554

As of December 31, 2012	Derivative instruments, recorded in the Condensed Consolidated Balance Sheet, gross		Derivative instruments subject to master netting agreements		Margin deposits remitted to counterparties		Derivative instruments, net
	(Thousands)
Asset derivatives:
Derivative instruments, at fair value	$	304,237	$	(73,753)	$	–	$	230,484
Liability derivatives:
Derivative instruments, at fair value	$	75,562	$	(73,753)	$	(736)	$	1,073