XML 54 R26.htm IDEA: XBRL DOCUMENT v2.4.1.9
Financial Instruments (Table)
 6 Months Ended
Mar. 31, 2015
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Oustanding commodity contracts volumes table
As of March 31, 2015, we had net long/(short) commodity contracts outstanding in the following quantities:
Contract Type
 
Hedge Designation
 
Regulated
Distribution
 
Nonregulated
 
 
 
 
Quantity (MMcf)
Commodity contracts
 
Fair Value
 
—

 
(14,445
)
 
 
Cash Flow
 
—

 
62,098

 
 
Not designated
 
7,533

 
86,114

 
 
 
 
7,533

 
133,767
Financial instruments on the balance sheet
 
 
 
Regulated Distribution
 
Nonregulated
 
Balance Sheet Location
 
Assets
 
Liabilities
 
Assets
 
Liabilities
 
 
 
 (In thousands)
September 30, 2014
 
 
 
 
 
 
 
 
 
Designated As Hedges:
 
 
 
 
 
 
 
 
 
Commodity contracts
Other current assets /
Other current liabilities
 
$
—

 
$
—

 
$
8,912

 
$
(7,082
)
Interest rate contracts
Other current assets /
Other current liabilities
 
21,869

 
—

 
—

 
—

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

 
—

 
757

 
(2,459
)
Interest rate contracts
Deferred charges and other assets /
Deferred credits and other liabilities
 
12,608

 
(19,835
)
 
—

 
—

Total
 
 
34,477

 
(19,835
)
 
9,669

 
(9,541
)
Not Designated As Hedges:
 
 
 
 
 
 
 
 
 
Commodity contracts
Other current assets /
Other current liabilities
 
1,233

 
(1,730
)
 
43,677

 
(47,729
)
Commodity contracts
Deferred charges and other assets /
Deferred credits and other liabilities
 
430

 
(291
)
 
15,677

 
(14,786
)
Total
 
 
1,663

 
(2,021
)
 
59,354

 
(62,515
)
Gross Financial Instruments
 
 
36,140

 
(21,856
)
 
69,023

 
(72,056
)
Gross Amounts Offset on Consolidated Balance Sheet:
 
 
 
 
 
 
 
 
 
Contract netting
 
 
—

 
—

 
(69,023
)
 
69,023

Net Financial Instruments
 
 
36,140

 
(21,856
)
 
—

 
(3,033
)
Cash collateral
 
 
—

 
—

 
22,725

 
3,033

Net Assets/Liabilities from Risk Management Activities
 
 
$
36,140

 
$
(21,856
)
 
$
22,725

 
$
—


 
The following tables present the fair value and balance sheet classification of our financial instruments by operating segment as of March 31, 2015 and September 30, 2014. 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.
 
 
 
Regulated Distribution
 
Nonregulated
 
Balance Sheet Location
 
Assets
 
Liabilities
 
Assets
 
Liabilities
 
 
 
 (In thousands)
March 31, 2015
 
 
 
 
 
 
 
 
 
Designated As Hedges:
 
 
 
 
 
 
 
 
 
Commodity contracts
Other current assets /
Other current liabilities
 
$
—

 
$
—

 
$
15,488

 
$
(47,615
)
Commodity contracts
Deferred charges and other assets /
Deferred credits and other liabilities
 
—

 
—

 
170

 
(11,731
)
Interest rate contracts
Deferred charges and other assets /
Deferred credits and other liabilities
 
—

 
(132,305
)
 
—

 
—

Total
 
 
—

 
(132,305
)
 
15,658

 
(59,346
)
Not Designated As Hedges:
 
 
 
 
 
 
 
 
 
Commodity contracts
Other current assets /
Other current liabilities
 
364

 
(5,769
)
 
132,609

 
(127,434
)
Commodity contracts
Deferred charges and other assets /
Deferred credits and other liabilities
 
—

 
—

 
9,921

 
(7,548
)
Total
 
 
364

 
(5,769
)
 
142,530

 
(134,982
)
Gross Financial Instruments
 
 
364

 
(138,074
)
 
158,188

 
(194,328
)
Gross Amounts Offset on Consolidated Balance Sheet:
 
 
 
 
 
 
 
 
 
Contract netting
 
 
—

 
—

 
(158,188
)
 
158,188

Net Financial Instruments
 
 
364

 
(138,074
)
 
—

 
(36,140
)
Cash collateral
 
 
—

 
—

 
16,583

 
36,140

Net Assets/Liabilities from Risk Management Activities
 
 
$
364

 
$
(138,074
)
 
$
16,583

 
$
—
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 and six months ended March 31, 2015 and 2014 is presented below.
 
Three Months Ended 
 March 31
 
2015
 
2014
 
(In thousands)
Commodity contracts
$
(7,622
)
 
$
3,587

Fair value adjustment for natural gas inventory designated as the hedged item
5,142

 
(7,450
)
Total increase in purchased gas cost
$
(2,480
)
 
$
(3,863
)
The increase in purchased gas cost is comprised of the following:
 
 
 
Basis ineffectiveness
$
(678
)
 
$
(579
)
Timing ineffectiveness
(1,802
)
 
(3,284
)
 
$
(2,480
)
 
$
(3,863
)
 
 
 
 
 
Six Months Ended 
 March 31
 
2015
 
2014
 
(In thousands)
Commodity contracts
$
7,469

 
$
(4,974
)
Fair value adjustment for natural gas inventory designated as the hedged item
(11,641
)
 
6,329

Total (increase) decrease in purchased gas cost
$
(4,172
)
 
$
1,355

The (increase) decrease in purchased gas cost is comprised of the following:
 
 
 
Basis ineffectiveness
$
309

 
$
(1,199
)
Timing ineffectiveness
(4,481
)
 
2,554

 
$
(4,172
)
 
$
1,355
Cash flow hedges
The impact of cash flow hedges on our condensed consolidated income statements for the three and six months ended March 31, 2015 and 2014 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 March 31, 2015
 
Regulated Distribution
 
Nonregulated
 
Consolidated
 
(In thousands)
Loss reclassified from AOCI for effective portion of commodity contracts
$
—

 
$
(13,078
)
 
$
(13,078
)
Gain arising from ineffective portion of commodity contracts
—

 
163

 
163

Total impact on purchased gas cost
—

 
(12,915
)
 
(12,915
)
Net loss on settled interest rate agreements reclassified from AOCI into interest expense
(136
)
 
—

 
(136
)
Total Impact from Cash Flow Hedges
$
(136
)
 
$
(12,915
)
 
$
(13,051
)
 
Three Months Ended March 31, 2014
 
Regulated Distribution
 
Nonregulated
 
Consolidated
 
(In thousands)
Gain reclassified from AOCI for effective portion of commodity contracts
$
—

 
$
7,184

 
$
7,184

Gain arising from ineffective portion of commodity contracts
—

 
142

 
142

Total impact on purchased gas cost
—

 
7,326

 
7,326

Net loss on settled interest rate agreements reclassified from AOCI into interest expense
(1,057
)
 
—

 
(1,057
)
Total Impact from Cash Flow Hedges
$
(1,057
)
 
$
7,326

 
$
6,269

 
 
 
 
 
 
 
Six Months Ended March 31, 2015
 
Regulated Distribution
 
Nonregulated
 
Consolidated
 
(In thousands)
Loss reclassified from AOCI for effective portion of commodity contracts
$
—

 
$
(12,734
)
 
$
(12,734
)
Loss arising from ineffective portion of commodity contracts
—

 
(327
)
 
(327
)
Total impact on purchased gas cost
—

 
(13,061
)
 
(13,061
)
Net loss on settled interest rate agreements reclassified from AOCI into interest expense
(580
)
 
—

 
(580
)
Total Impact from Cash Flow Hedges
$
(580
)
 
$
(13,061
)
 
$
(13,641
)
 
 
 
 
 
 
 
Six Months Ended March 31, 2014
 
Regulated Distribution
 
Nonregulated
 
Consolidated
 
(In thousands)
Gain reclassified from AOCI for effective portion of commodity contracts
$
—

 
$
4,574

 
$
4,574

Gain arising from ineffective portion of commodity contracts
—

 
24

 
24

Total impact on purchased gas cost
—

 
4,598

 
4,598

Net loss on settled interest rate agreements reclassified from AOCI into interest expense
(2,115
)
 
—

 
(2,115
)
Total Impact from Cash Flow Hedges
$
(2,115
)
 
$
4,598

 
$
2,483
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 and six months ended March 31, 2015 and 2014. 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 
 March 31
 
Six Months Ended 
 March 31
 
2015
 
2014
 
2015
 
2014
 
(In thousands)
Increase (decrease) in fair value:
 
 
 
 
 
 
 
Interest rate agreements
$
(32,755
)
 
$
(27,718
)
 
$
(84,824
)
 
$
(14,448
)
Forward commodity contracts
(10,160
)
 
5,483

 
(38,902
)
 
11,709

Recognition of (gains) losses in earnings due to settlements:
 
 
 
 
 
 
 
Interest rate agreements
86

 
671

 
368

 
1,343

Forward commodity contracts
7,978

 
(4,382
)
 
7,768

 
(2,790
)
Total other comprehensive income (loss) from hedging, net of tax(1)
$
(34,851
)
 
$
(25,946
)
 
$
(115,590
)
 
$
(4,186
)

 
(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 March 31, 2015. 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
$
(347
)
 
$
(25,826
)
 
$
(26,173
)
Thereafter
(18,477
)
 
(6,982
)
 
(25,459
)
Total(1) 
$
(18,824
)
 
$
(32,808
)
 
$
(51,632
)

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