XML 87 R41.htm IDEA: XBRL DOCUMENT v3.3.0.814
Financial Instruments (Table)
 12 Months Ended
Sep. 30, 2015
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Schedule of financial instrument assets and liabilities at fair value
The following table shows the fair values of our risk management assets and liabilities by segment at September 30, 2015 and 2014:
 
Regulated
Distribution
 
Nonregulated
 
Total
 
(In thousands)
September 30, 2015
 
 
 
 
 
Assets from risk management activities, current(1)
$
378

 
$
8,854

 
$
9,232

Assets from risk management activities, noncurrent
368

 
—

 
368

Liabilities from risk management activities, current(1)
(9,568
)
 
—

 
(9,568
)
Liabilities from risk management activities, noncurrent(1)
(110,539
)
 
—

 
(110,539
)
Net assets (liabilities)
$
(119,361
)
 
$
8,854

 
$
(110,507
)
September 30, 2014
 
 
 
 
 
Assets from risk management activities, current(2)
$
23,102

 
$
22,725

 
$
45,827

Assets from risk management activities, noncurrent
13,038

 
—

 
13,038

Liabilities from risk management activities, current(2)
(1,730
)
 
—

 
(1,730
)
Liabilities from risk management activities, noncurrent(2)
(20,126
)
 
—

 
(20,126
)
Net assets
$
14,284

 
$
22,725

 
$
37,009


 
(1) 
Includes $43.5 million of cash held on deposit to collateralize certain financial instruments. Of this amount, $34.6 million was used to offset current and noncurent risk management liabilities under master netting arrangements and the remaining $8.9 million is classified as current risk management assets.
(2) 
Includes $25.8 million of cash held on deposit to collateralize certain financial instruments. Of this amount, $3.1 million was used to offset current and noncurrent risk management liabilities under master netting arrangements and the remaining $22.7 million is classified as current risk management assets.
Outstanding commodity contracts volumes table
As of September 30, 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
 
—

 
(18,378
)
 
 
Cash Flow
 
—

 
56,368

 
 
Not designated
 
24,849

 
58,513

 
 
 
 
24,849

 
96,503
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 September 30, 2015 and 2014. The gross amounts of recognized assets and liabilities are netted within our 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)
September 30, 2015
 
 
 
 
 
 
 
 
 
Designated As Hedges:
 
 
 
 
 
 
 
 
 
Commodity contracts
Other current assets /
Other current liabilities
 
$
—

 
$
—

 
$
11,680

 
$
(36,067
)
Commodity contracts
Deferred charges and other assets /
Deferred credits and other liabilities
 
—

 
—

 
126

 
(9,918
)
Interest rate contracts
Deferred charges and other assets /
Deferred credits and other liabilities
 
—

 
(110,539
)
 
—

 
—

Total
 
 
—

 
(110,539
)
 
11,806

 
(45,985
)
Not Designated As Hedges:
 
 
 
 
 
 
 
 
 
Commodity contracts
Other current assets /
Other current liabilities
 
378

 
(9,568
)
 
65,239

 
(65,780
)
Commodity contracts
Deferred charges and other assets /
Deferred credits and other liabilities
 
368

 
—

 
14,318

 
(14,218
)
Total
 
 
746

 
(9,568
)
 
79,557

 
(79,998
)
Gross Financial Instruments
 
 
746

 
(120,107
)
 
91,363

 
(125,983
)
Gross Amounts Offset on Consolidated Balance Sheet:
 
 
 
 
 
 
 
 
 
Contract netting
 
 
—

 
—

 
(91,363
)
 
91,363

Net Financial Instruments
 
 
746

 
(120,107
)
 
—

 
(34,620
)
Cash collateral
 
 
—

 
—

 
8,854

 
34,620

Net Assets/Liabilities from Risk Management Activities
 
 
$
746

 
$
(120,107
)
 
$
8,854

 
$
—
Fair value hedges table
The impact of our nonregulated commodity contracts designated as fair value hedges and the related hedged item on our consolidated income statement for the years ended September 30, 2015, 2014 and 2013 is presented below.
 
Fiscal Year Ended September 30
 
2015
 
2014
 
2013
 
(In thousands)
Commodity contracts
$
10,311

 
$
(792
)
 
$
2,165

Fair value adjustment for natural gas inventory designated as the hedged item
(9,768
)
 
2,486

 
15,938

Total decrease in purchased gas cost
$
543

 
$
1,694

 
$
18,103

The decrease in purchased gas cost is comprised of the following:
 
 
 
 
 
Basis ineffectiveness
$
811

 
$
(919
)
 
$
(208
)
Timing ineffectiveness
(268
)
 
2,613

 
18,311

 
$
543

 
$
1,694

 
$
18,103
Cash flow hedges table
The impact of cash flow hedges on our consolidated income statements for the years ended September 30, 2015, 2014 and 2013 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.
 
Fiscal Year Ended September 30, 2015
 
Regulated
Distribution
 
Nonregulated
 
Consolidated
 
(In thousands)
Loss reclassified from AOCI for effective portion of commodity contracts
$
—

 
$
(41,716
)
 
$
(41,716
)
Loss arising from ineffective portion of commodity contracts
—

 
(325
)
 
(325
)
Total impact on purchased gas cost
—

 
(42,041
)
 
(42,041
)
Net loss on settled interest rate agreements reclassified from AOCI into interest expense
(853
)
 
—

 
(853
)
Total impact from cash flow hedges
$
(853
)
 
$
(42,041
)
 
$
(42,894
)

 
Fiscal Year Ended September 30, 2014
 
Regulated
Distribution
 
Nonregulated
 
Consolidated
 
(In thousands)
Gain reclassified from AOCI for effective portion of commodity contracts
$
—

 
$
8,365

 
$
8,365

Gain arising from ineffective portion of commodity contracts
—

 
198

 
198

Total impact on purchased gas cost
—

 
8,563

 
8,563

Net loss on settled interest rate agreements reclassified from AOCI into interest expense
(4,230
)
 
—

 
(4,230
)
Total impact from cash flow hedges
$
(4,230
)
 
$
8,563

 
$
4,333

 
 
Fiscal Year Ended September 30, 2013
 
Regulated
Distribution
 
Nonregulated
 
Consolidated
 
(In thousands)
Loss reclassified from AOCI for effective portion of commodity contracts
$
—

 
$
(10,778
)
 
$
(10,778
)
Gain arising from ineffective portion of commodity contracts
—

 
97

 
97

Total impact on purchased gas cost
—

 
(10,681
)
 
(10,681
)
Net loss on settled interest rate agreements reclassified from AOCI into interest expense
(3,489
)
 
—

 
(3,489
)
Total impact from cash flow hedges
$
(3,489
)
 
$
(10,681
)
 
$
(14,170
)
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 years ended September 30, 2015 and 2014. The amounts included in the table below exclude gains and losses arising from ineffectiveness because these amounts are immediately recognized in the income statement as incurred.
 
Fiscal Year Ended
September 30
 
2015
 
2014
 
(In thousands)
Increase (decrease) in fair value:
 
 
 
Interest rate agreements
$
(71,003
)
 
$
(58,973
)
Forward commodity contracts
(49,211
)
 
7,904

Recognition of (gains) losses in earnings due to settlements:
 
 
 
Interest rate agreements
542

 
2,686

Forward commodity contracts
25,448

 
(5,102
)
Total other comprehensive income (loss) from hedging, net of tax(1)
$
(94,224
)
 
$
(53,485
)

 
(1) 
Utilizing an income tax rate ranging from approximately 37 percent to 39 percent based on the effective rates in each taxing jurisdiction.
Expected recognition in earnings of deferred 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 September 30, 2015. However, the table below does not include the expected recognition in earnings of the interest rate agreements entered into in October 2012 and fiscal 2014 as those financial instruments have not yet settled.
 
Interest Rate
Agreements
 
Commodity
Contracts
 
Total
 
(In thousands)
2016
$
(347
)
 
$
(19,484
)
 
$
(19,831
)
2017
(447
)
 
(5,044
)
 
(5,491
)
2018
(649
)
 
(819
)
 
(1,468
)
2019
(673
)
 
(85
)
 
(758
)
2020
(698
)
 
(5
)
 
(703
)
Thereafter
(15,836
)
 
—

 
(15,836
)
Total(1) 
$
(18,650
)
 
$
(25,437
)
 
$
(44,087
)

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