Energy Transfer 2012 Annual Report Download - page 167
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F - 22
Fair Value
Total
Fair Value Measurements at
December 31, 2011
Level 1 Level 2
Assets:
Marketable securities $ 1 $ 1 $ —
Interest rate derivatives 36 — 36
Commodity derivatives:
Natural Gas:
Basis Swaps IFERC/NYMEX 63 63 —
Swing Swaps IFERC 15 2 13
Fixed Swaps/Futures 215 215 —
Options – Puts 6 — 6
Forward Physical Swaps 1 — 1
Total commodity derivatives 300 280 20
Total Assets $ 337 $ 281 $ 56
Liabilities:
Interest rate derivatives $(117) $ — $ (117)
Commodity derivatives:
Natural Gas:
Basis Swaps IFERC/NYMEX (82)(82) —
Swing Swaps IFERC (16)(3)(13)
Fixed Swaps/Futures (148)(148) —
Forward Physical Swaps (1) — (1)
Propane — Forwards/Swaps (4) — (4)
Total commodity derivatives (251)(233)(18)
Total Liabilities $(368) $ (233) $ (135)
Contributions in Aid of Construction Costs
On certain of our capital projects, third parties are obligated to reimburse us for all or a portion of project expenditures. The
majority of such arrangements are associated with pipeline construction and production well tie-ins. Contributions in aid of
construction costs (“CIAC”) are netted against our project costs as they are received, and any CIAC which exceeds our total
project costs, is recognized as other income in the period in which it is realized.
Shipping and Handling Costs
Shipping and handling costs related to fuel sold are included in cost of products sold. Shipping and handling costs related to
fuel consumed for compression and treating are included in operating expenses and are as follows:
Years Ended December 31,
2012 2011 2010
Shipping and handling costs – recorded in operating expenses $ 25 $ 40 $ 43
Costs and Expenses
Costs of products sold include actual cost of fuel sold, adjusted for the effects of our hedging and other commodity derivative
activities, and the cost of appliances, parts and fittings. Operating expenses include all costs incurred to provide products to
customers, including compensation for operations personnel, insurance costs, vehicle maintenance, advertising costs,
purchasing costs and plant operations. Selling, general and administrative expenses include all partnership related expenses
and compensation for executive, partnership, and administrative personnel.
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