Duke Energy 2012 Annual Report Download - page 193

173
PART II
DUKE ENERGY CORPORATION • DUKE ENERGY CAROLINAS, LLC • PROGRESS ENERGY, INC. • CAROLINA POWER & LIGHT COMPANY d/b/a PROGRESS ENERGY
CAROLINAS, INC. • FLORIDA POWER CORPORATION d/b/a PROGRESS ENERY FLORIDA, INC. • DUKE ENERGY OHIO, INC. • DUKE ENERGY INDIANA, INC
.
Combined Notes to Consolidated Financial Statements – (Continued)
arrangements where Duke Energy nets the fair value of derivative contracts
subject to master netting arrangements with the same counterparty on the
Consolidated Balance Sheets. Cash collateral payables and receivables
associated with the derivative contracts have not been netted against the fair
value amounts.
December 31,
2012 2011
(in millions) Asset Liability Asset Liability
Derivatives Designated as Hedging Instruments
Commodity contracts
Current liabilities: other $— $ 2 $— $ —
Deferred credits and other liabilities: other — 1 ——
Interest rate contracts
Current assets: other 2 — 4 —
Investments and other assets: other 7 — 2 —
Current Liabilities: Other — 81 — 11
Deferred credits and other liabilities: other — 35 — 76
Total Derivatives Designated as Hedging
Instruments $ 9 $119 $ 6 $ 87
Derivatives Not Designated as Hedging
Instruments
Commodity contracts
Current assets: other $ 41 $ 2 $ 81 $ 31
Investments and other assets: other 106 50 35 17
Current liabilities: other 106 407 136 168
Deferred credits and other liabilities: other 2 255 25 93
Interest rate contracts
Current liabilities: other — 76 — 2
Deferred credits and other liabilities: other — 8 — 75
Total Derivatives Not Designated as Hedging
Instruments $ 255 $798 $277 $ 386
Total Derivatives $ 264 $917 $283 $ 473
The following table shows the amount of gains and losses recognized on
derivative instruments designated and qualifying as cash fl ow hedges by type of
derivative contract, and the Consolidated Statements of Operations line items in
which such gains and losses are included when reclassifi ed from AOCI.
Years Ended December 31,
(in millions) 2012 2011 2010
Pre-tax Gains (Losses) Recorded in AOCI
Interest rate contracts $(23) $(88) $ 2
Commodity contracts 1 ——
Total Pre-tax Gains (Losses) Recorded in AOCI $(22) $(88) $ 2
Location of Pre-tax Gains and (Losses) Reclassifi ed
from AOCI into Earnings(a)
Fuel used in electric generation and purchased power $— $— $ 2
Interest rate contracts
Interest expense 2 (5) (5)
Total Pre-tax Gains (Losses) Reclassifi ed from AOCI
into Earnings $ 2 $ (5) $ (3)
(a) Represents the gains and losses on cash fl ow hedges previously recorded in AOCI during the term of the
hedging relationship and reclassifi ed into earnings during the current period.
There was no hedge ineffectiveness during the years ended December 31,
2012, 2011 and 2010, and no gains or losses have been excluded from the
assessment of hedge effectiveness during the same periods.
At December 31, 2012, and December 31, 2011, $151 million and $115 million,
respectively of pre-tax deferred net losses on derivative instruments related
to interest rate cash fl ow hedges were included as a component of AOCI and a
$5 million pre-tax gain is expected to be recognized in earnings during the next
12 months as the hedged transactions occur.
The following tables show the amount of pre-tax gains and losses
recognized on undesignated contracts by type of derivative instrument, and the
line items in the Consolidated Statements of Comprehensive Income in which
such gains and losses are included or deferred on the Consolidated Balance
Sheets as regulatory assets or liabilities.
Years Ended
December 31,
(in millions) 2012 2011 2010
Location of Pre-tax Gains and (Losses) Recognized
in Earnings
Commodity contracts
Revenue, regulated electric $ (23) $— $ 1
Revenue, nonregulated electric, natural gas and other 38 (59) (38)
Other income and expenses (2) — —
Fuel used in electric generation and purchased power regulated (194) — —
Fuel used in electric generation and purchased
power — nonregulated 2 (1) 9
Interest rate contracts
Interest expense (8) — —
Total Pre-tax (Losses) Gains Recognized in Earnings $(187) $ (60) $(28)
Location of Pre-tax Gains and (Losses) Recognized
as Regulatory Assets or Liabilities
Commodity contracts
Regulatory asset $ (2) $ (1) $ 5
Regulatory liability 36 17 14
Interest rate contracts
Regulatory asset 10 (165) (1)
Regulatory liability — (60) 60
Total Pre-tax Gains (Losses) Recognized
as Regulatory Assets of Liabilities $ 44 $(209) $ 78
Duke Energy Carolinas
The following tables show fair value amounts of derivative contracts,
and the line items in the Consolidated Balance Sheets in which such amounts
are included. The fair values of derivative contracts are presented on a gross
basis, even when the derivative instruments are subject to master netting
arrangements where Duke Energy Carolinas nets the fair value of derivative
contracts subject to master netting arrangements with the same counterparty
on the Consolidated Balance Sheets. Cash collateral payables and receivables
associated with the derivative contracts have not been netted against the fair
value amounts.