XML 61 R27.htm IDEA: XBRL DOCUMENT v2.4.0.8
Financial Instruments (Table)
 3 Months Ended
Dec. 31, 2013
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Oustanding commodity contracts volumes table
As of December 31, 2013, we had net long/(short) commodity contracts outstanding in the following quantities:
Contract Type
 
Hedge Designation
 
Natural Gas
Distribution
 
Nonregulated
 
 
 
 
Quantity (MMcf)
Commodity contracts
 
Fair Value
 
—

 
(18,585
)
 
 
Cash Flow
 
—

 
31,500

 
 
Not designated
 
15,796

 
59,095

 
 
 
 
15,796

 
72,010
Financial instruments on the balance sheet
 
 
 
Natural Gas Distribution
 
Nonregulated
 
Balance Sheet Location
 
Assets
 
Liabilities
 
Assets
 
Liabilities
 
 
 
 (In thousands)
September 30, 2013
 
 
 
 
 
 
 
 
 
Designated As Hedges:
 
 
 
 
 
 
 
 
 
Commodity contracts
Other current assets /
Other current liabilities
 
$
—

 
$
—

 
$
9,094

 
$
(12,173
)
Commodity contracts
Deferred charges and other assets /
Deferred credits and other liabilities
 
—

 
—

 
416

 
(1,639
)
Interest rate contracts
Deferred charges and other assets /
Deferred credits and other liabilities
 
107,512

 
—

 
—

 
—

Total
 
 
107,512

 
—

 
9,510

 
(13,812
)
Not Designated As Hedges:
 
 
 
 
 
 
 
 
 
Commodity contracts
Other current assets /
Other current liabilities
 
1,837

 
(1,543
)
 
65,388

 
(70,876
)
Commodity contracts
Deferred charges and other assets /
Deferred credits and other liabilities
 
1,842

 
—

 
40,982

 
(45,892
)
Total
 
 
3,679

 
(1,543
)
 
106,370

 
(116,768
)
Gross Financial Instruments
 
 
111,191

 
(1,543
)
 
115,880

 
(130,580
)
Gross Amounts Offset on Consolidated Balance Sheet:
 
 
 
 
 
 
 
 
 
Contract netting
 
 
—

 
—

 
(115,875
)
 
115,875

Net Financial Instruments
 
 
111,191

 
(1,543
)
 
5

 
(14,705
)
Cash collateral
 
 
—

 
—

 
10,124

 
14,705

Net Assets/Liabilities from Risk Management Activities
 
 
$
111,191

 
$
(1,543
)
 
$
10,129

 
$
—


 
The following tables present the fair value and balance sheet classification of our financial instruments by operating segment as of December 31, 2013 and September 30, 2013. The gross amounts of recognized assets and liabilities are netted within our unaudited Condensed Consolidated Balance Sheets to the extent that we have netting arrangements with the counterparties.
 
 
 
Natural Gas Distribution
 
Nonregulated
 
Balance Sheet Location
 
Assets
 
Liabilities
 
Assets
 
Liabilities
 
 
 
 (In thousands)
December 31, 2013
 
 
 
 
 
 
 
 
 
Designated As Hedges:
 
 
 
 
 
 
 
 
 
Commodity contracts
Other current assets /
Other current liabilities
 
$
—

 
$
—

 
$
12,238

 
$
(12,089
)
Interest rate contracts
Other current assets /
Other current liabilities
 
83,578

 
—

 
—

 
—

Commodity contracts
Deferred charges and other assets /
Deferred credits and other liabilities
 
—

 
—

 
783

 
(983
)
Interest rate contracts
Deferred charges and other assets /
Deferred credits and other liabilities
 
44,833

 
—

 
—

 
—

Total
 
 
128,411

 
—

 
13,021

 
(13,072
)
Not Designated As Hedges:
 
 
 
 
 
 
 
 
 
Commodity contracts
Other current assets /
Other current liabilities
 
5,356

 
(36
)
 
55,288

 
(63,144
)
Commodity contracts
Deferred charges and other assets /
Deferred credits and other liabilities
 
1,045

 
—

 
35,740

 
(32,926
)
Total
 
 
6,401

 
(36
)
 
91,028

 
(96,070
)
Gross Financial Instruments
 
 
134,812

 
(36
)
 
104,049

 
(109,142
)
Gross Amounts Offset on Consolidated Balance Sheet:
 
 
 
 
 
 
 
 
 
Contract netting
 
 
—

 
—

 
(101,435
)
 
101,435

Net Financial Instruments
 
 
134,812

 
(36
)
 
2,614

 
(7,707
)
Cash collateral
 
 
—

 
—

 
9,001

 
7,707

Net Assets/Liabilities from Risk Management Activities
 
 
$
134,812

 
$
(36
)
 
$
11,615

 
$
—
Fair value hedges table
The impact of our nonregulated commodity contracts designated as fair value hedges and the related hedged item on our condensed consolidated income statement for the three months ended December 31, 2013 and 2012 is presented below.
 
Three Months Ended 
 December 31
 
2013
 
2012
 
(In thousands)
Commodity contracts
$
(8,561
)
 
$
7,314

Fair value adjustment for natural gas inventory designated as the hedged item
13,779

 
8,818

Total decrease in purchased gas cost
$
5,218

 
$
16,132

The (increase) decrease in purchased gas cost is comprised of the following:
 
 
 
Basis ineffectiveness
$
(620
)
 
$
(241
)
Timing ineffectiveness
5,838

 
16,373

 
$
5,218

 
$
16,132

 
 
 
 
Cash flow hedges
The impact of cash flow hedges on our condensed consolidated income statements for the three months ended December 31, 2013 and 2012 is presented below. Note that this presentation does not reflect the financial impact arising from the hedged physical transaction. Therefore, this presentation is not indicative of the economic gross profit we realized when the underlying physical and financial transactions were settled.
 
Three Months Ended December 31, 2013
 
Natural
Gas
Distribution
 
Nonregulated
 
Consolidated
 
(In thousands)
Loss reclassified from AOCI for effective portion of commodity contracts
$
—

 
$
(2,609
)
 
$
(2,609
)
Loss arising from ineffective portion of commodity contracts
—

 
(119
)
 
(119
)
Total impact on purchased gas cost
—

 
(2,728
)
 
(2,728
)
Net loss on settled interest rate agreements reclassified from AOCI into interest expense
(1,058
)
 
—

 
(1,058
)
Total Impact from Cash Flow Hedges
$
(1,058
)
 
$
(2,728
)
 
$
(3,786
)
 
Three Months Ended December 31, 2012
 
Natural
Gas
Distribution
 
Nonregulated
 
Consolidated
 
(In thousands)
Loss reclassified from AOCI for effective portion of commodity contracts
$
—

 
$
(5,160
)
 
$
(5,160
)
Loss arising from ineffective portion of commodity contracts
—

 
(19
)
 
(19
)
Total impact on purchased gas cost
—

 
(5,179
)
 
(5,179
)
Net loss on settled interest rate agreements reclassified from AOCI into interest expense
(502
)
 
—

 
(502
)
Total Impact from Cash Flow Hedges
$
(502
)
 
$
(5,179
)
 
$
(5,681
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Other comprehensive income from hedging table
The following table summarizes the gains and losses arising from hedging transactions that were recognized as a component of other comprehensive income (loss), net of taxes, for the three months ended December 31, 2013 and 2012. The amounts included in the table below exclude gains and losses arising from ineffectiveness because those amounts are immediately recognized in the income statement as incurred.
 
Three Months Ended 
 December 31
 
2013
 
2012
 
(In thousands)
Increase (decrease) in fair value:
 
 
 
Interest rate agreements
$
13,270

 
$
11,945

Forward commodity contracts
6,226

 
(3,513
)
Recognition of (gains) losses in earnings due to settlements:
 
 
 
Interest rate agreements
672

 
319

Forward commodity contracts
1,592

 
3,148

Total other comprehensive income from hedging, net of tax(1)
$
21,760

 
$
11,899


 
(1) 
Utilizing an income tax rate ranging from 37 percent to 39 percent based on the effective rates in each taxing jurisdiction.
Expected recognition in earnings of deferred gains/(losses) in AOCI table
The following amounts, net of deferred taxes, represent the expected recognition in earnings of the deferred gains (losses) recorded in AOCI associated with our financial instruments, based upon the fair values of these financial instruments as of December 31, 2013. However, the table below does not include the expected recognition in earnings of our outstanding interest rate agreements as those instruments have not yet settled.
 
Interest Rate
Agreements
 
Commodity
Contracts
 
Total
 
(In thousands)
Next twelve months
$
(2,343
)
 
$
3,458

 
$
1,115

Thereafter
(27,350
)
 
(116
)
 
(27,466
)
Total(1) 
$
(29,693
)
 
$
3,342

 
$
(26,351
)

 
(1) 
Utilizing an income tax rate ranging from 37 percent to 39 percent based on the effective rates in each taxing jurisdiction.