Effective November 1, 2010, we adopted the guidance that requires us to evaluate our variable interest in a variable interest entity (VIE) to qualitatively assess whether we have a controlling financial interest, and if so, determine whether we are the primary beneficiary. Under accounting guidance, a VIE is a legal entity that conducts a business or holds property whose equity, by design, has any of the following characteristics: an insufficient amount of equity at risk to finance its activities, equity owners who do not have the power to direct the significant activities of the entity (or have voting rights that are disproportionate to their ownership interest), or where equity owners do not receive expected losses or returns. An entity may have an interest in a VIE through ownership or other contractual rights or obligations and that interest changes as the entity's net assets change. The consolidating investor is the entity that has the power to direct the activities of a VIE that most significantly impact the VIE's economic performance, and the obligation to absorb losses of the entity that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE.

As of April 30, 2011, we have determined that we are not the primary beneficiary, as defined by the authoritative guidance related to consolidations, in any of our equity method investments, which are discussed in Note 8. Based on our involvement in these investments, we do not have the power to direct the activities of these investments that most significantly impact the VIE's economic performance.

Our investments in joint ventures, as discussed in Note 8, are currently accounted for under the equity method. We will continue to account for these investments under this method, as we determined we are not the consolidating investor. As of April 30, 2011, our maximum loss exposure related to these equity method investments is limited to our equity investment in each entity. Our investment balances are as follows.

In thousands		April 30,		October 31,
		2011		2010

Cardinal	$	15,770	$	11,837
Pine Needle		19,263		21,810
SouthStar		17,919		17,146
Hardy Storage		30,145		29,494
Total equity method investments in non-utility activities	$	83,097	$	80,287

We have also reviewed various lease arrangements, contracts to purchase, sell or deliver natural gas and other agreements in which we hold a variable interest. The adoption of this guidance on November 1, 2010 for these arrangements, contracts and other agreements did not have a material impact on our financial position, results of operations or cash flows.