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DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | 12 Months Ended
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Sep. 30, 2017
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES Spire Spire Missouri has a risk management policy to utilize various derivatives, including futures contracts, exchange-traded options, and swaps for the explicit purpose of managing price risk associated with purchasing and delivering natural gas on a regular basis to customers in accordance with its tariffs. The objective of this policy is to limit Spire Missouri’s exposure to natural gas price volatility and to manage, hedge and mitigate substantial price risk. Further discussion of this policy can be found in the Spire Missouri section. From time to time Spire Missouri and Spire Alabama purchase NYMEX futures and options contracts to help stabilize operating costs associated with forecasted purchases of gasoline and diesel fuels used to power vehicles and equipment used in the course of their business. Further information on these derivatives can be found in the Spire Missouri and Spire Alabama sections, respectively. In the course of its business, Spire’s gas marketing subsidiary, Spire Marketing, which includes its wholly owned subsidiary Spire Storage Inc., enters into commitments associated with the purchase or sale of natural gas. Certain of Spire Marketing’s derivative natural gas contracts are designated as normal purchases or normal sales and, as such, are excluded from the scope of ASC Topic 815 and are accounted for as executory contracts on an accrual basis. Any of Spire Marketing’s derivative natural gas contracts that are not designated as normal purchases or normal sales are accounted for at fair value. At September 30, 2017, the fair values of 202.1 million MMBtu of non-exchange traded natural gas commodity contracts were reflected in the Consolidated Balance Sheet. Of these contracts, 156.8 million MMBtu will settle during fiscal 2018, and 34.3 million MMBtu, 5.9 million MMBtu, 4.1 million MMBtu, 0.9 million MMBtu, and 0.1 million MMBtu will settle during fiscal years 2019, 2020, 2021, 2022, and 2023, respectively. These contracts have not been designated as hedges; therefore, changes in the fair value of these contracts are reported in earnings each period. Furthermore, Spire Marketing manages the price risk associated with its fixed-priced commitments by either closely matching the offsetting physical purchase or sale of natural gas at fixed prices or through the use of NYMEX or ICE futures, swap, and option contracts to lock in margins. At September 30, 2017, Spire Marketing’s unmatched fixed-price positions were not material to Spire’s financial position or results of operations. Spire Marketing’s NYMEX and ICE natural gas futures, swap, and option contracts used to lock in margins may be designated as cash flow hedges of forecasted transactions for financial reporting purposes. During fiscal 2015, Spire Alabama entered into interest rate swap transactions to protect itself against adverse movement in interest rates in anticipation of its issuance of $115.0 of long-term debt. The notional amount of these interest rate swaps was$104.5. These derivative instruments were designated as cash flow hedges of forecasted transactions. These forward starting swaps involved the payment of a fixed interest rate and the receipt of the London Interbank Offered Rate (LIBOR) over the terms specified in the contracts. Termination of these interest rate swap agreements later in fiscal 2015 resulted in a $2.7 gain which was recorded as a regulatory liability. Of the total issuance of long-term debt, $35.0 was issued on September 15, 2015 and $80.0 was issued on December 1, 2015, and the gain is being amortized to reduce interest expense over the hedged periods. During fiscal 2016, Spire entered into interest rate swap agreements, with a notional amount of $85.0, to effectively lock in interest rates on a portion of the long-term debt it anticipated issuing to finance its acquisition of Spire EnergySouth. These derivative instruments were designated as cash flow hedges of forecasted transactions. Termination of the interest rate swap agreements later in fiscal 2016 resulted in a $0.4 loss recorded in accumulated other comprehensive loss to be amortized to interest expense over the life of the related debt issuances. Also during fiscal 2016, Spire entered into interest rate swap transactions with a notional amount of $225.0 to protect itself against adverse movement in interest rates in anticipation of the issuance of long-term debt in fiscal 2017. These hedge positions were settled during fiscal 2017, resulting in a gain of $14.1 which will be amortized to reduce interest expense over the hedged periods. Also during fiscal 2017, Spire entered into a ten-year interest rate swap with a fixed interest rate of 2.658% and a notional amount of $60.0 to protect itself against adverse movements in interest rates on future interest rate payments. The Company recorded a $0.9 mark-to-market loss on these swaps as part of other comprehensive income for the year ended September 30, 2017. The Company’s and Spire Missouri’s exchange-traded/cleared derivative instruments consist primarily of NYMEX and ICE positions. The NYMEX is the primary national commodities exchange on which natural gas derivatives are traded. Open NYMEX/ICE natural gas futures and swap positions at September 30, 2017 were as follows:
| Gas Utility |  | Gas Marketing
| MMBtu (millions) |  | Avg. Price Per MMBtu |  | MMBtu (millions) |  | Avg. Price Per MMBtu
NYMEX/ICE open short futures positions/swap positions |  |  |  |  |  |  |
Fiscal 2018 | — |  |  | $ | — |  |  | 8.66 |  |  | $ | 3.34 |
Fiscal 2019 | — |  |  | — |  |  | 2.07 |  |  | 3.13 |
NYMEX/ICE open long futures/swap positions |  |  |  |  |  |  |  |  |  |  |
Fiscal 2018 | 14.18 |  |  | 2.98 |  |  | 3.78 |  |  | 3.16 |
Fiscal 2019 | 1.68 |  |  | 2.89 |  |  | 1.84 |  |  | 3.02 |
Fiscal 2020 | — |  |  | — |  |  | 0.66 |  |  | 2.91 |
Fiscal 2021 | — |  |  | — |  |  | 0.28 |  |  | 2.90 |
Fiscal 2022 | — |  |  | — |  |  | 0.22 |  |  | 3.00 |
ICE open short daily swap positions |  |  |  |  |  |  |
Fiscal 2018 | — |  |  | — |  |  | 1.32 |  |  | 2.87 |
ICE open long daily swap positions |  |  |  |  |  |  |
Fiscal 2018 | — |  |  | — |  |  | 0.78 |  |  | 2.79 |
ICE open short basis swap positions |  |  |  |  |  |  |
Fiscal 2018 | — |  |  | — |  |  | 14.04 |  |  | 0.10 |
Fiscal 2019 | — |  |  | — |  |  | 3.35 |  |  | 0.27 |
Fiscal 2020 | — |  |  | — |  |  | 0.31 |  |  | 0.36 |
ICE open long basis swap positions |  |  |  |  |  |  |
Fiscal 2018 | — |  |  | — |  |  | 11.12 |  |  | 0.38 |
Fiscal 2019 | — |  |  | — |  |  | 4.51 |  |  | 0.45 |
Fiscal 2020 | — |  |  | — |  |  | 0.62 |  |  | 0.45 |
At September 30, 2017, Spire Missouri also had 33.9 million MMBtu of other price mitigation in place through the use of NYMEX natural gas option-based strategies while Spire Marketing had none. Derivative instruments designated as cash flow hedges of forecasted transactions are recognized on the balance sheets of the Company at fair value, and the change in fair value of the effective portion of these hedge instruments is recorded, net of income tax, in other comprehensive income or loss (OCI). Accumulated other comprehensive income or loss (AOCI) is a component of Total Common Stock Equity. Amounts are reclassified from AOCI into earnings when the hedged items affect net income, using the same revenue or expense category that the hedged item impacts. Based on market prices at September 30, 2017, it is expected that an immaterial amount of unrealized gains will be reclassified into the Consolidated Statements of Income of the Company during the next twelve months. Cash flows from hedging transactions are classified in the same category as the cash flows from the items that are being hedged in the Consolidated Statements of Cash Flows.
Effect of Derivative Instruments on the Consolidated Statements of Income and Consolidated Statements of Comprehensive Income
| Location of Gain (Loss) |  |  |  |  |
| Recorded in Income | 2017 |  | 2016 |  | 2015
Derivatives in Cash Flow Hedging Relationships |  |  |  |  |
Effective portion of gain (loss) recognized in OCI on derivatives: |  |  |  |  |
Gas Marketing natural gas contracts |  | $ | — |  |  | $ | (0.6 | ) |  | $ | (4.3 | )
Gas Utility gasoline and heating oil contracts |  | 0.1 |  |  | — |  |  | (1.2 | )
Interest rate swaps |  | 11.4 |  |  | (3.4 | ) |  | — |
Total |  | $ | 11.5 |  |  | $ | (4.0 | ) |  | $ | (5.5 | )
Effective portion of gain (loss) reclassified from AOCI to income: |  |  |  |  |
Natural gas contracts | Gas Marketing Operating Revenues | $ | (0.4 | ) |  | $ | 4.3 |  |  | $ | 1.7 |
| Gas Marketing Operating Expenses | 0.1 |  |  | (4.9 | ) |  | (5.2 | )
Subtotal |  | (0.3 | ) |  | (0.6 | ) |  | (3.5 | )
Gasoline and heating oil contracts | Gas Utility Other Operating Expenses | 0.2 |  |  | (0.5 | ) |  | (0.9 | )
Interest rate swaps | Interest Expense | 0.1 |  |  | — |  |  | — |
Total |  | $ | — |  |  | $ | (1.1 | ) |  | $ | (4.4 | )
Ineffective portion of gain (loss) on derivatives recognized in income: |  |  |  |  |
Natural gas contracts | Gas Marketing Operating Revenues | $ | — |  |  | $ | 0.1 |  |  | $ | — |
| Gas Marketing Operating Expenses | — |  |  | 0.1 |  |  | (0.5 | )
Subtotal |  | — |  |  | 0.2 |  |  | (0.5 | )
Gasoline and heating oil contracts | Gas Utility Other Operating Expenses | — |  |  | 0.1 |  |  | 0.1 |
Interest rate swaps | Interest Expense | 0.5 |  |  | — |  |  | — |
Total |  | $ | 0.5 |  |  | $ | 0.3 |  |  | $ | (0.4 | )
Derivatives Not Designated as Hedging Instruments* |  |  |  |  |
Gain (loss) recognized in income on derivatives: |  |  |  |  |  |
Natural gas commodity contracts | Gas Marketing Operating Revenues | $ | 0.7 |  |  | $ | 12.3 |  |  | $ | (1.3 | )
NYMEX / ICE natural gas contracts | Gas Marketing Operating Revenues | (4.4 | ) |  | (1.7 | ) |  | (9.6 | )
Gasoline and heating oil contracts | Other Income and (Income Deductions) - Net | — |  |  | — |  |  | (0.2 | )
Total |  | $ | (3.7 | ) |  | $ | 10.6 |  |  | $ | (11.1 | )
* | Gains and losses on Spire Missouri’s natural gas derivative instruments, which are not designated as hedging instruments for financial reporting purposes, are deferred pursuant to the Missouri Utilities’ PGA clauses and initially recorded as regulatory assets or regulatory liabilities. These gains and losses are excluded from the table above because they have no direct impact on the statements of income. Such amounts are recognized in the statements of income as a component of Regulated Gas Distribution Natural and Propane Gas operating expenses when they are recovered through the PGA clause and reflected in customer billings.
Fair Value of Derivative Instruments in the Consolidated Balance Sheets
| Asset Derivatives* |  | Liability Derivatives*
September 30, 2017 | Balance Sheet Location | Fair Value |  | Balance Sheet Location | Fair Value
Derivatives designated as hedging instruments |  |  |  |
Gas Utility: |  |  |  |  |
Gasoline and heating oil contracts | Derivative Instrument Assets | $ | 0.1 |  |  | Derivative Instrument Assets | $ | — |
Gas Marketing: |  |  |  |  |
Natural gas contracts | Derivative Instrument Assets | 0.3 |  |  | Derivative Instrument Assets | 0.2 |
| Deferred Charges – Other | 0.3 |  |  | Deferred Charges – Other | — |
Other: |  |  |  |  |
Interest rate swaps | Current Liabilities - Other | — |  |  | Current Liabilities - Other | 0.9 |
Subtotal |  | 0.7 |  |  |  | 1.1 |
Derivatives not designated as hedging instruments |  |  |  |
Gas Utility: |  |  |  |  |
Natural gas contracts | Accounts Receivable – Other | 3.4 |  |  | Accounts Receivable – Other | 1.9 |
Gas Marketing: |  |  |  |  |
NYMEX / ICE natural gas contracts | Derivative Instrument Assets | 1.7 |  |  | Derivative Instrument Assets | 1.4 |
| Deferred Charges – Other | 0.3 |  |  | Deferred Charges – Other | 0.5 |
Natural gas commodity | Derivative Instrument Assets | 5.3 |  |  | Derivative Instrument Assets | 0.1 |
| Other Deferred Charges | 0.4 |  |  | Other Deferred Charges | — |
| Current Liabilities – Other | 0.8 |  |  | Current Liabilities – Other | 5.0 |
| Deferred Credits – Other | 0.4 |  |  | Deferred Credits – Other | 3.3 |
Subtotal |  | 12.3 |  |  |  | 12.2 |
Total derivatives |  | $ | 13.0 |  |  |  | $ | 13.3 |
September 30, 2016 |  |  |
Derivatives designated as hedging instruments |  |  |  |
Gas Utility: |  |  |  |  |
Gasoline and heating oil contracts | Derivative Instrument Assets | $ | 0.3 |  |  | Derivative Instrument Assets | $ | — |
Gas Marketing: |  |  |  |  |
Natural gas contracts | Derivative Instrument Assets | 2.5 |  |  | Derivative Instrument Assets | 0.8 |
| Deferred Charges - Other | 0.4 |  |  | Deferred Charges - Other | 0.1 |
Other: Interest rate swaps | Derivative Instrument Assets | — |  |  | Derivative Instrument Assets | 3.0 |
Subtotal |  | 3.2 |  |  |  | 3.9 |
Derivatives not designated as hedging instruments |  |  |  |
Gas Utility: |  |  |  |  |
Natural gas contracts | Accounts Receivable – Other | 5.4 |  |  | Accounts Receivable – Other | 1.6 |
| Derivative Instrument Assets | — |  |  | Derivative Instrument Assets | 0.2 |
Gas Marketing: |  |  |  |  |
NYMEX / ICE natural gas contracts | Derivative Instrument Assets | 0.8 |  |  | Derivative Instrument Assets | 4.1 |
| Deferred Charges – Other | — |  |  | Deferred Charges – Other | 0.1 |
Natural gas commodity | Derivative Instrument Assets | 6.5 |  |  | Derivative Instrument Assets | 0.2 |
| Other Deferred Charges | 2.1 |  |  | Other Deferred Charges | 0.3 |
| Current Liabilities – Other | 0.2 |  |  | Current Liabilities – Other | 2.0 |
| Deferred Credits – Other | 0.2 |  |  | Deferred Credits – Other | 0.1 |
Subtotal |  | 15.2 |  |  |  | 8.6 |
Total derivatives |  | $ | 18.4 |  |  |  | $ | 12.5 |
* | The fair values of Asset Derivatives and Liability Derivatives exclude the fair value of cash margin receivables or payables with counterparties subject to netting arrangements. Fair value amounts of derivative contracts (including the fair value amounts of cash margin receivables and payables) for which there is a legal right to set off are presented net on the balance sheets. As such, the gross balances presented in the table above are not indicative of the Company’s net economic exposure. Refer to Note 9, Fair Value Measurements, for information on the valuation of derivative instruments.
Following is a reconciliation of the amounts in the tables above to the amounts presented in the Consolidated Balance Sheets:
| 2017 |  | 2016
Fair value of asset derivatives presented above | $ | 13.0 |  |  | $ | 18.4 |
Fair value of cash margin (payable) receivable offset with derivatives | (1.5 | ) |  | 2.5 |
Netting of assets and liabilities with the same counterparty | (5.3 | ) |  | (7.6 | )
Total | $ | 6.2 |  |  | $ | 13.3 |
Derivative Instrument Assets, per Consolidated Balance Sheets: |  |  |
Derivative instrument assets | $ | 5.9 |  |  | $ | 11.4 |
Deferred Charges – Other | 0.3 |  |  | 1.9 |
Total | $ | 6.2 |  |  | $ | 13.3 |
Fair value of liability derivatives presented above | $ | 13.3 |  |  | $ | 12.5 |
Netting of assets and liabilities with the same counterparty | (5.3 | ) |  | (7.6 | )
Total | $ | 8.0 |  |  | $ | 4.9 |
Derivative Instrument Liabilities, per Consolidated Balance Sheets: |  |  |
Current Liabilities – Other | $ | 4.9 |  |  | $ | 4.8 |
Deferred Credits – Other | 3.1 |  |  | 0.1 |
Total | $ | 8.0 |  |  | $ | 4.9 |
Additionally, at September 30, 2017 and 2016, the Company had $4.0 and $2.9, respectively, in cash margin receivables not offset with derivatives, which are presented in Accounts Receivable – Other. Spire Missouri Spire Missouri has a risk management policy to utilize various derivatives, including futures contracts, exchange-traded options, swaps and over-the-counter instruments for the explicit purpose of managing price risk associated with purchasing and delivering natural gas on a regular basis to customers in accordance with its tariffs. The objective of this policy is to limit Spire Missouri’s exposure to natural gas price volatility and to manage, hedge and mitigate substantial price risk. This policy strictly prohibits speculation and permits Spire Missouri to hedge current physical natural gas purchase commitments or forecasted or anticipated future peak (maximum) physical need for natural gas delivered. Costs and cost reductions, including carrying costs, associated with Spire Missouri’s use of natural gas derivative instruments are allowed to be passed on to Spire Missouri customers through the operation of its PGA clause, through which the MoPSC allows Spire Missouri to recover gas supply costs, subject to prudence review by the MoPSC. Accordingly, Spire Missouri does not expect any adverse earnings impact as a result of the use of these derivative instruments. Spire Missouri does not designate these instruments as hedging instruments for financial reporting purposes because gains or losses associated with the use of these derivative instruments are deferred and recorded as regulatory assets or regulatory liabilities pursuant to ASC Topic 980, “Regulated Operations,” and, as a result, have no direct impact on the statements of income. The timing of the operation of the PGA clause may cause interim variations in short-term cash flows, because Spire Missouri is subject to cash margin requirements associated with changes in the values of these instruments. Nevertheless, carrying costs associated with such requirements are recovered through the PGA clause. From time to time, Spire Missouri purchases NYMEX futures and options contracts to help stabilize operating costs associated with forecasted purchases of gasoline and diesel fuels used to power vehicles and equipment used in the course of its business. At September 30, 2017, Spire Missouri held 0.3 million gallons of gasoline futures contracts at an average price of $1.27 per gallon. Most of these contracts, the longest of which extends to December 2017, are designated as cash flow hedges of forecasted transactions pursuant to ASC Topic 815, “Derivatives and Hedging.” The gains or losses on these derivative instruments are not subject to Spire Missouri’s PGA clause. Derivative instruments designated as cash flow hedges of forecasted transactions are recognized on the balance sheets at fair value and the change in the fair value of the effective portion of these hedge instruments is recorded, net of income tax, in OCI. AOCI is a component of Total Common Stock Equity. Amounts are reclassified from AOCI into earnings when the hedged items affect net income, using the same revenue or expense category that the hedged item impacts. Based on market prices at September 30, 2017, it is expected that an immaterial amount of pre-tax gains will be reclassified into the statements of income during fiscal 2018. Cash flows from hedging transactions are classified in the same category as the cash flows from the items that are being hedged in the statements of cash flows. Spire Missouri’s derivative instruments consist primarily of NYMEX positions. The NYMEX is the primary national commodities exchange on which natural gas derivatives are traded. Open NYMEX natural gas futures positions at September 30, 2017 were as follows:
| MMBtu (millions) |  | Avg. Price Per MMBtu
NYMEX/ICE open long futures/swap positions |  |  |  |  |
Fiscal 2018 | 14.18 |  |  | $ | 2.98 |
Fiscal 2019 | 1.68 |  |  | 2.89 |
At September 30, 2017, Spire Missouri also had 33.9 million MMBtu of other price mitigation in place through the use of NYMEX natural gas option-based strategies.
Effect of Derivative Instruments on the Statements of Income and Statements of Comprehensive Income
| Location of Gain (Loss) |  |  |  |  |
| Recorded in Income | 2017 |  | 2016 |  | 2015
Derivatives in Cash Flow Hedging Relationships |  |  |  |  |
Effective portion of gain (loss) recognized in OCI on derivatives: |  |  |  |  |
Gasoline and heating oil contracts |  | $ | 0.1 |  |  | $ | — |  |  | $ | (1.2 | )
Effective portion of gain (loss) reclassified from AOCI to income: |  |  |  |  |
Gasoline and heating oil contracts | Gas Utility Other Operating Expenses | $ | 0.2 |  |  | $ | (0.5 | ) |  | $ | (0.9 | )
Ineffective portion of gain (loss) on derivatives recognized in income: |  |  |  |  |
Gasoline and heating oil contracts | Gas Utility Other Operating Expenses | $ | — |  |  | $ | 0.1 |  |  | $ | 0.1 |
Derivatives Not Designated as Hedging Instruments* |  |  |  |  |
Gain (loss) recognized in income on derivatives: |  |  |  |  |  |
Gasoline and heating oil contracts | Other Income and (Income Deductions) - Net | $ | — |  |  | $ | — |  |  | $ | (0.2 | )
* | Gains and losses on Spire Missouri’s natural gas derivative instruments, which are not designated as hedging instruments for financial reporting purposes, are deferred pursuant to the Spire Missouri’s PGA clauses and initially recorded as regulatory assets or regulatory liabilities. These gains and losses are excluded from the table above because they have no direct impact on the Statements of Income. Such amounts are recognized in the Statements of Income as a component of Regulated Gas Distribution Natural and Propane Gas operating expenses when they are recovered through the PGA clause and reflected in customer billings.
Fair Value of Derivative Instruments in the Balance Sheets
| Asset Derivatives* |  | Liability Derivatives*
September 30, 2017 | Balance Sheet Location | Fair Value |  | Balance Sheet Location | Fair Value
Derivatives designated as hedging instruments |  |  |  |
Gasoline and heating oil contracts | Derivative Instrument Assets | $ | 0.1 |  |  | Derivative Instrument Assets | $ | — |
Derivatives not designated as hedging instruments |  |  |  |
Natural gas contracts | Accounts Receivable – Other | 3.4 |  |  | Accounts Receivable – Other | 1.9 |
Total derivatives |  | $ | 3.5 |  |  |  | $ | 1.9 |
September 30, 2016 |  |  |  |  |
Derivatives designated as hedging instruments |  |  |  |
Gasoline and heating oil contracts | Derivative Instrument Assets | $ | 0.3 |  |  | Derivative Instrument Assets | $ | — |
Subtotal |  | 0.3 |  |  |  | — |
Derivatives not designated as hedging instruments |  |  |  |
Natural gas contracts | Accounts Receivable – Other | 5.4 |  |  | Accounts Receivable – Other | 1.6 |
OTCBB natural gas contracts | Derivative Instrument Assets | — |  |  | Derivative Instrument Assets | 0.2 |
Subtotal |  | 5.4 |  |  |  | 1.8 |
Total derivatives |  | $ | 5.7 |  |  |  | $ | 1.8 |
* | The fair values of Asset Derivatives and Liability Derivatives exclude the fair value of cash margin receivables or payables with counterparties subject to netting arrangements. Fair value amounts of derivative contracts (including the fair value amounts of cash margin receivables and payables) for which there is a legal right to set off are presented net on the Balance Sheets. As such, the gross balances presented in the table above are not indicative of Spire Missouri’s net economic exposure. Refer to Note 9, Fair Value Measurements, for information on the valuation of derivative instruments.
Following is a reconciliation of the amounts in the tables above to the amounts presented in Spire Missouri’s Balance Sheets:
| 2017 |  | 2016
Fair value of asset derivatives presented above | $ | 3.5 |  |  | $ | 5.7 |
Fair value of cash margin (payable) receivable offset with derivatives | (1.5 | ) |  | 0.8 |
Netting of assets and liabilities with the same counterparty | (1.9 | ) |  | (1.6 | )
Total | $ | 0.1 |  |  | $ | 4.9 |
Derivative Instrument Assets, per Balance Sheets: |  |  |
Derivative instrument assets | $ | 0.1 |  |  | $ | 4.9 |
Total | $ | 0.1 |  |  | $ | 4.9 |
Fair value of liability derivatives presented above | $ | 1.9 |  |  | $ | 1.8 |
Netting of assets and liabilities with the same counterparty | (1.9 | ) |  | (1.6 | )
Total | $ | — |  |  | $ | 0.2 |
Derivative Instrument Liabilities, per Balance Sheets: |  |  |
Current Liabilities – Other | $ | — |  |  | $ | 0.2 |
Total | $ | — |  |  | $ | 0.2 |
Additionally, at September 30, 2017 and 2016, Spire Missouri had $4.0 and $0.5, respectively, in cash margin receivables not offset with derivatives, which are presented in Accounts Receivable – Other. Spire Alabama In prior years, Spire Alabama entered into cash flow derivative commodity instruments to hedge its exposure to price fluctuations on its gas supply. Spire Alabama recognizes all derivatives at fair value as either assets or liabilities on the balance sheet. Any realized gains or losses are passed through to customers using the mechanisms of the GSA rider in accordance with Spire Alabama’s APSC approved tariff. During the second quarter of fiscal 2015, Spire Alabama entered into certain interest rate swap transactions to protect itself against adverse movement in interest rates in anticipation of its issuance of $115.0 of long-term debt. Spire Alabama received prior approval from the APSC to enter into these hedges. The notional amount of interest rate swaps outstanding was $80.5 with stated maturities ranging from 2025 to 2045 and fixed interest rates ranging between 2.18% and 2.85%. In April 2015, Spire Alabama entered into an additional hedge with a notional amount of $24.0 and terms within the same range. These derivative instruments were designated as cash flow hedges of forecasted transactions. These forward starting swaps involved the payment of a fixed interest rate and the receipt of LIBOR over the terms specified in the contracts. On May 21, 2015, the interest rate swap agreements were terminated and the settlement resulted in a $2.7 gain which was recorded as a regulatory liability. Of the total issuance of long-term debt, $35.0 was issued on September 15, 2015 and the remaining $80.0 was issued on December 1, 2015. During the fiscal second quarter of 2016, Spire Alabama commenced a gasoline derivative program to help stabilize operating costs associated with forecasted purchases of gasoline and diesel fuels used to power vehicles and equipment used in the course of its business. At September 30, 2017, Spire Alabama held 0.1 million gallons of gasoline futures contracts at an average price of $1.28 per gallon. Most of these contracts, the longest of which extends to December 2017, are designated as cash flow hedges of forecasted transactions pursuant to ASC Topic 815, “Derivatives and Hedging.” The gains or losses on these derivative instruments are not subject to Spire Alabama’s GSA rider. As of September 30, 2017 and 2016, the fair value of gasoline contracts was not significant.

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- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI http://asc.fasb.org/topic&trid=2229140 + Details
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