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EX-10.3 - EMPLOYMENT AGREEMENT - ROBERT B. WALLACE - PVR PARTNERS, L. P.d241002dex103.htm
EX-10.4 - EMPLOYMENT AGREEMENT - RONALD K. PAGE - PVR PARTNERS, L. P.d241002dex104.htm
EX-10.1 - NON-EMPLOYEE DIRECTOR COMPENSATORY SUMMARY SHEET - PVR PARTNERS, L. P.d241002dex101.htm
EX-10.2 - EMPLOYMENT AGREEMENT - WILLIAM H. SHEA, JR. - PVR PARTNERS, L. P.d241002dex102.htm
EX-10.5 - EMPLOYMENT AGREEMENT - KEITH D. HORTON - PVR PARTNERS, L. P.d241002dex105.htm
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EX-10.6 - EMPLOYMENT AGREEMENT - BRUCE D. DAVIS, JR. - PVR PARTNERS, L. P.d241002dex106.htm
EX-31.2 - SECTION 302 CFO CERTIFICATION - PVR PARTNERS, L. P.d241002dex312.htm
EX-32.1 - SECTION 906 CEO CERTIFICATION - PVR PARTNERS, L. P.d241002dex321.htm
EX-31.1 - SECTION 302 CEO CERTIFICATION - PVR PARTNERS, L. P.d241002dex311.htm
EX-32.1 - SECTION 906 CFO CERTIFICATION - PVR PARTNERS, L. P.d241002dex3211.htm
10-Q - FORM 10-Q - PVR PARTNERS, L. P.d241002d10q.htm
EX-12.1 - STATEMENT OF COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES CALCULATION - PVR PARTNERS, L. P.d241002dex121.htm
v2.3.0.15
Derivative Instruments
9 Months Ended
Sep. 30, 2011
Derivative Instruments [Abstract] 
Derivative Instruments
5. Derivative Instruments

Natural Gas Midstream Segment Commodity Derivatives

We determine the fair values of our derivative agreements using third-party quoted forward prices for the respective commodities as of the end of the reporting period and discount rates adjusted for the credit risk of our counterparties if the derivative is in an asset position and our own credit risk if the derivative is in a liability position. The following table sets forth our commodity derivative positions as of September 30, 2011:

 

     Average
Volume

Per Day
    Swap Price     Weighted Average Price      Fair Value at
September 30, 2011
 
         Put      Call     

NGL – natural gasoline collar

     (gallons       (per gallon)      

Fourth quarter 2011

     95,000        $ 1.57       $ 1.94       $ (2,492

NGL – natural gasoline collar

     (gallons       (per gallon)      

First quarter 2012 through fourth quarter 2012

     54,000        $ 1.75       $ 2.02         (3,138

Crude oil collar

     (barrels       (per barrel)      

Fourth quarter 2011

     400        $ 75.00       $ 98.50         109   

Crude oil swap

     (barrels     (per barrel        

First quarter 2012 through fourth quarter 2012

     600      $ 88.62              1,604   

Natural gas purchase swap

     (MMBtu     (MMBtu        

Fourth quarter 2011

     6,500      $ 5.80              (1,193

Natural gas purchase swap

     (MMBtu     (MMBtu        

First quarter 2012 through fourth quarter 2012

     4,000      $ 5.195              (1,370

Settlements to be paid in subsequent period

               (1,165

Interest Rate Swaps

We have entered into the Interest Rate Swaps to establish fixed interest rates on a portion of the outstanding borrowings under the Revolver. The following table sets forth the positions of the Interest Rate Swaps as of September 30, 2011:

 

     Notional Amounts
(in millions)
     Swap Interest Rates (1)      Fair Value  at
September 30, 2011
 

Term

      Pay     Receive     

October 2011 – December 2011

   $ 250.0         3.37     LIBOR       $ (1,907

January 2011 – December 2012

   $ 100.0         2.09     LIBOR       $ (1,517

(1) References to LIBOR represent the 3-month rate.

For the Interest Rate Swaps, we reported a (i) net derivative liability of $3.4 million at September 30, 2011 and (ii) gain in accumulated other comprehensive income ("AOCI") of $0.8 million as of September 30, 2011. In connection with periodic settlements, we reclassified a total of $0.4 million of net hedging losses on the Interest Rate Swaps from AOCI to the derivatives line on the Consolidated Statements of Income during the nine months ended September 30, 2011. See the following "Financial Statement Impact of Derivatives" section for the impact of the Interest Rate Swaps on our Consolidated Financial Statements.

 

Financial Statement Impact of Derivatives

The following table summarizes the effects of our derivative activities, as well as the location of gains (losses) on our Consolidated Statements of Income for the periods presented:

 

     Location of
derivatives recognized

in income statement
   Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
            2011         2010         2011         2010  

Derivatives not designated as hedging instruments:

           

Interest rate contracts (1)

   Interest expense    $ —        $ —        $ —        $ (1,090

Interest rate contracts

   Derivatives      (58     (2,568     (956     (7,739

Commodity contracts

   Derivatives      8,748        (8,452     (5,333     (3,775
     

 

 

   

 

 

   

 

 

   

 

 

 

Total increase (decrease) in net income resulting from derivatives

      $ 8,690      $ (11,020   $ (6,289   $ (12,604
     

 

 

   

 

 

   

 

 

   

 

 

 

Realized and unrealized derivative impact:

           

Cash paid for commodity and interest rate contract settlements

   Derivatives    $ (6,699   $ (2,435   $ (19,477   $ (6,493

Unrealized derivative gains (losses) (2)

        15,389        (8,585     13,188        (6,111
     

 

 

   

 

 

   

 

 

   

 

 

 

Total increase (decrease) in net income resulting from derivatives

      $ 8,690      $ (11,020   $ (6,289   $ (12,604
     

 

 

   

 

 

   

 

 

   

 

 

 

(1) This activity represents Interest Rate Swap amounts reclassified out of AOCI and into interest expense.
(2) This activity represents unrealized gains (losses) in the interest expense and derivatives caption on our Consolidated Statements of Income.

The following table summarizes the fair value of our derivative instruments, as well as the locations of these instruments, on our Consolidated Balance Sheets for the periods presented:

 

     Balance Sheet Location    Fair Values as of
September 30, 2011
     Fair Values as of
December 31, 2010
 
        Derivative
Assets
     Derivative
Liabilities
     Derivative
Assets
     Derivative
Liabilities
 

Derivatives not designated as hedging instruments:

              

Interest rate contracts

   Derivative
assets/liabilities –
current
   $ —         $ 3,048       $ —         $ 7,647   

Interest rate contracts

   Derivative

assets/liabilities –
noncurrent

     —           376         —           1,037   

Commodity contracts

   Derivative

assets/liabilities –
current

     1,381         8,479         —           11,869   

Commodity contracts

   Derivative

assets/liabilities –
noncurrent

     332         879         —           4,070   
     

 

 

    

 

 

    

 

 

    

 

 

 

Total derivatives not designated as hedging instruments

   $ 1,713       $ 12,782       $ —         $ 24,623   
     

 

 

    

 

 

    

 

 

    

 

 

 

Total fair value of derivative instruments

      $ 1,713       $ 12,782       $ —         $ 24,623   
     

 

 

    

 

 

    

 

 

    

 

 

 

As of September 30, 2011, we were not party to derivative instruments that were classified as fair value hedges or trading securities. In addition, as of September 30, 2011, we were not party to derivative instruments containing credit risk contingencies.