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During the nine months ended September 30, 2008, through
our treasury activities, we engaged in the active management
of investments in energy industry and foreign currency securities
traded on domestic securities exchanges. During this period,
we held a daily weighted average of approximately $7.7 million
outstanding of notional value in a combination of exchange-traded
common stock options, commodity futures contracts and foreign
currency contracts. At September 30, 2008, we held approximately
$8.3 million outstanding of notional value in exchange-traded
positions.
In October 2008, due to the dramatic volatility in the U.S.
and international stock markets, we closed our entire open
derivative trading portfolio resulting in net realized
losses of over $3.3 million to be recognized in our earnings
in the fourth quarter 2008.
Monitoring the Portfolio
We monitor our portfolio on a daily basis to verify that there
is no market or liquidity exposure level we consider not acceptable.
We recalculate our estimates of gross aggregate cash exposure
on a daily basis so that total notional value outstanding and
cash on hand does not exceed $20 million. |
