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The following table details the outstanding commodity-related derivatives as of December 31, 2010 and
2009:
2010 2009
Notional
Volume Maturity
Notional
Volume Maturity
Mark to Market Derivatives
Natural Gas:
Basis Swaps IFERC/NYMEX (MMBtu) (38,897,500) 2011 72,325,000 2010-2011
Swing Swaps IFERC (MMBtu) (19,720,000) 2011 (38,935,000) 2010
Fixed Swaps/Futures (MMBtu) (2,570,000) 2011 4,852,500 2010-2011
Options — Puts (MMBtu) — — 2,640,000 2010
Options — Calls (MMBtu) (3,000,000) 2011 (2,640,000) 2010
Propane:
Forwards/Swaps (Gallons) 1,974,000 2011 6,090,000 2010
Fair Value Hedging Derivatives
Natural Gas:
Basis Swaps IFERC/NYMEX (MMBtu) (28,050,000) 2011 (22,625,000) 2010
Fixed Swaps/Futures (MMBtu) (39,105,000) 2011 (27,300,000) 2010
Hedged Item — Inventory (MMBtu) 39,105,000 2011 27,300,000 2010
Cash Flow Hedging Derivatives
Natural Gas:
Basis Swaps IFERC/NYMEX (MMBtu) — — (13,225,000) 2010
Fixed Swaps/Futures (MMBtu) (210,000) 2011 (22,800,000) 2010
Options – Puts (MMBtu) 26,760,000 2011-2012 — —
Options – Calls (MMBtu) (26,760,000) 2011-2012 — —
Propane:
Forwards/Swaps (Gallons) 32,466,000 2011 20,538,000 2010
We expect gains of $24.0 million related to commodity derivatives to be reclassified into earnings over the
next twelve months related to amounts currently reported in AOCI. The amount ultimately realized,
however, will differ as commodity prices change and the underlying physical transaction occurs.
As of July 2008, we no longer engage in the trading of commodity derivative instruments that are not
substantially offset by physical or other commodity derivative positions. As a result, we no longer have any
material exposure to market risk from such activities. The derivative contracts that were previously entered
into for trading purposes were recognized in the consolidated balance sheets at fair value, and changes in the
fair value of these derivative instruments are recognized in revenue in the consolidated statements of
operations on a net basis. Trading activities, including trading of physical gas and financial derivative
instruments, resulted in net losses of approximately $26.2 million for the year ended December 31, 2008.
Interest Rate Risk
We are exposed to market risk for changes in interest rates. In order to maintain a cost effective capital
structure, we borrow funds using a mix of fixed rate debt and variable rate debt. We manage a portion of our
current and future interest rate exposures by utilizing interest rate swaps in order to achieve our desired mix
of fixed and variable rate debt. We also utilize forward starting interest rate swaps to lock in the rate on a
portion of our anticipated debt issuances.
F-41