Fair Value Measurements

12 Months Ended

Dec. 31, 2011

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

The Company measures its investments in certain fixed-income and equity securities at fair value with changes in fair value recognized in income. The Company anticipates using these investments to satisfy its obligations under its unfunded, nonqualified benefit plans for executive officers and certain key management employees, and invests in these fixed-income and equity securities for the purpose of earning investment returns and capital appreciation. These investments, which totaled $38.4 million and $39.5 million as of December 31, 2011 and 2010, respectively, are classified as Investments on the Consolidated Balance Sheets. The decrease in the fair value of these investments for the year ended December 31, 2011, was $1.1 million (before tax). The increase in the fair value of these investments for the years ended December 31, 2010 and 2009, was $5.8 million (before tax) and $7.1 million (before tax), respectively. The change in fair value, which is considered part of the cost of the plan, is classified in operation and maintenance expense on the Consolidated Statements of Income.

The Company did not elect the fair value option, which records gains and losses in income, for its remaining available-for-sale securities, which include auction rate securities, mortgage-backed securities and U.S. Treasury securities. These available-for-sale securities are recorded at fair value and are classified as Investments on the Consolidated Balance Sheets. The Company's auction rate securities approximate cost and, as a result, there are no accumulated unrealized gains or losses recorded in accumulated other comprehensive income (loss) on the Consolidated Balance Sheets related to these investments. Unrealized gains or losses on mortgage-backed securities and U.S. Treasury securities are recorded in accumulated other comprehensive income (loss) as discussed in Note 1. Details of available-for-sale securities were as follows:

December 31, 2011	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(In thousands)
Insurance investment contract	$	31,884	$	6,468	$	—		$	38,352
Auction rate securities	11,400		—		—			11,400
Mortgage-backed securities	8,206		95		(5		)	8,296
U.S. Treasury securities	1,619		37		—			1,656
Total	$	53,109	$	6,600	$	(5	)	$	59,704

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. The ASC establishes a hierarchy for grouping assets and liabilities, based on the significance of inputs. The Company's assets and liabilities measured at fair value on a recurring basis are as follows:

	Fair Value Measurements at December 31, 2011, Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs  (Level 3)		Balance at December 31, 2011
	(In thousands)
Assets:
Money market funds	$	—	$	97,500	$	—	$	97,500
Available-for-sale securities:
Insurance investment contract*	—		38,352		—		38,352
Auction rate securities	—		11,400		—		11,400
Mortgage-backed securities	—		8,296		—		8,296
U.S. Treasury securities	—		1,656		—		1,656
Commodity derivative instruments - current	—		27,687		—		27,687
Commodity derivative instruments - noncurrent	—		2,768		—		2,768
Total assets measured at fair value	$	—	$	187,659	$	—	$	187,659
Liabilities:
Commodity derivative instruments - current	$	—	$	13,164	$	—	$	13,164
Commodity derivative instruments - noncurrent	—		937		—		937
Interest rate derivative instruments - current	—		827		—		827
Interest rate derivative instruments - noncurrent	—		3,935		—		3,935
Total liabilities measured at fair value	$	—	$	18,863	$	—	$	18,863

* The insurance investment contract invests approximately 33 percent in common stock of mid-cap companies, 34 percent in common stock of small-cap companies, 32 percent in common stock of large-cap companies and 1 percent in cash and cash equivalents.

	Fair Value Measurements at December 31, 2010, Using
	Quoted Prices in Active Markets for Identical Assets  (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs  (Level 3)		Balance at December 31, 2010
	(In thousands)
Assets:
Money market funds	$	—	$	166,620	$	—	$	166,620
Available-for-sale securities:
Insurance investment contract*	—		39,541		—		39,541
Auction rate securities	—		11,400		—		11,400
Commodity derivative instruments - current	—		15,123		—		15,123
Commodity derivative instruments - noncurrent	—		4,104		—		4,104
Total assets measured at fair value	$	—	$	236,788	$	—	$	236,788
Liabilities:
Commodity derivative instruments - current	$	—	$	24,428	$	—	$	24,428
Commodity derivative instruments - noncurrent	—		6,483		—		6,483
Total liabilities measured at fair value	$	—	$	30,911	$	—	$	30,911

* The insurance investment contract invests approximately 35 percent in common stock of mid-cap companies, 33 percent in common stock of small-cap companies, 31 percent in common stock of large-cap companies and 1 percent in cash and cash equivalents.

The estimated fair value of the Company's Level 2 money market funds and available-for-sale securities is determined using the market approach. The Level 2 money market funds consist of investments in short-term unsecured promissory notes and the value is based on comparable market transactions taking into consideration the credit quality of the issuer. The estimated fair value of the Company's Level 2 available-for-sale securities is based on comparable market transactions, other observable inputs or other sources, including pricing from outside sources such as the fund itself.

The estimated fair value of the Company's Level 2 commodity derivative instruments is based upon futures prices, volatility and time to maturity, among other things. Counterparty statements are utilized to determine the value of the commodity derivative instruments and are reviewed and corroborated using various methodologies and significant observable inputs. The nonperformance risk of the counterparties in addition to the Company's nonperformance risk is also evaluated.

The estimated fair value of the Company's Level 2 interest rate derivative instruments is measured using quoted market prices or pricing models using prevailing market interest rates as of the measurement date. Counterparty statements are utilized to determine the value of the interest rate derivative instruments and are reviewed and corroborated using various methodologies and significant observable inputs. The nonperformance risk of the counterparties in addition to the Company's nonperformance risk is also evaluated.

Though the Company believes the methods used to estimate fair value are consistent with those used by other market participants, the use of other methods or assumptions could result in a different estimate of fair value. For the years ended December 31, 2011 and 2010, there were no significant transfers between Levels 1 and 2.

The Company's long-term debt is not measured at fair value on the Consolidated Balance Sheets and the fair value is being provided for disclosure purposes only, and was based on quoted market prices of the same or similar issues. The estimated fair value of the Company's long-term debt at December 31 was as follows:

	2011				2010
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(In thousands)
Long-term debt	$	1,424,678	$	1,592,807	$	1,506,752	$	1,621,184

The carrying amounts of the Company's remaining financial instruments included in current assets and current liabilities approximate their fair values.