Duke Energy 2013 Annual Report Download - page 166

148
PART II
DUKE ENERGY CORPORATION • DUKE ENERGY CAROLINAS, LLC • PROGRESS ENERGY, INC. •
DUKE ENERGY PROGRESS, INC. • DUKE ENERGY FLORIDA, INC. • DUKE ENERGY OHIO, INC. • DUKE ENERGY INDIANA, INC.
Combined Notes to Consolidated Financial Statements – (Continued)
December 31,
2013 2012
(in millions) Asset Liability Asset Liability
Derivatives Designated as Hedging Instruments
Commodity contracts
Current liabilities: other $— $ 1 $— $ 2
Deferred credits and other liabilities: other — 4 — 1
Total Derivatives Designated as Hedging Instruments $— $ 5 $— $ 3
Derivatives Not Designated as Hedging Instruments
Commodity contracts
Current assets: other $ 3 $ 2 $ 3 $ —
Investments and other assets: other 2 1 8 —
Current liabilities: other 11 105 — 231
Deferred credits and other liabilities: other 4 91 — 195
Interest rate contracts
Current liabilities: other — — — 11
Total Derivatives Not Designated as
Hedging Instruments $ 20 $199 $ 11 $ 437
Total Derivatives $ 20 $204 $ 11 $ 440
The tables below show the balance sheet location of derivative contracts
subject to enforceable master netting agreements and include collateral posted
to offset the net position. This disclosure is intended to enable users to evaluate
the effect of netting arrangements on financial position. The amounts shown
were calculated by counterparty. Accounts receivable or accounts payable may
also be available to offset exposures in the event of bankruptcy. These amounts
are not included in the tables below.
December 31, 2013
Derivative Assets Derivative Liabilities
(in millions) Current(a)
Non-
Current(b) Current(c)
Non-
Current(d)
Gross amounts recognized $ 15 $ 5 $107 $ 93
Gross amounts offset (13) (4) (17) (10)
Net amount subject to master netting 2 1 90 83
Amounts not subject to master netting — — — 4
Net amounts recognized on
the Consolidated Balance Sheet $ 2 $ 1 $ 90 $ 87
December 31, 2012
Derivative Assets Derivative Liabilities
(in millions) Current(a)
Non-
Current(b) Current(c)
Non-
Current(d)
Gross amounts recognized $ 3 $ 8 $ 244 $ 192
Gross amounts offset — — (22) (36)
Net amounts subject to master netting 3 8 222 156
Amounts not subject to master netting — — — 4
Net amounts recognized on
the Consolidated Balance Sheet $ 3 $ 8 $ 222 $ 160
(a) Included in Other within Current Assets on the Consolidated Balance Sheet.
(b) Included in Other within Investments and Other Assets on the Consolidated Balance Sheet.
(c) Included in Other within Current Liabilities on the Consolidated Balance Sheet.
(d) Included in Other within Deferred Credits and Other Liabilities on the Consolidated Balance Sheet.
The following table shows the gains and losses during the year recognized
on cash flow hedges and the line items on the Consolidated Statements of
Operations and Comprehensive Income or Consolidated Balance Sheet where
such gains and losses are included when reclassified from AOCI.
Years Ended
December 31,
(in millions) 2013 2012 2011
Pretax Gains (Losses) Recorded in AOCI
Commodity contracts $ 1 $ 1 $ (3)
Interest rate contracts(a) —(11) (141)
Total Pretax Gains (Losses) Recorded in AOCI $ 1 $ (10) $(144)
Location of Pretax Gains and (Losses) Reclassified
from AOCI into Earnings
Interest rate contracts
Interest expense $ — $ (14) $ (13)
Total Pretax Gains (Losses) Reclassified from AOCI
into Earnings $ — $ (14) $ (13)
Location of Pretax Gains and (Losses) Reclassified
from AOCI to Regulatory Assets or Liabilities(b)
Interest rate contracts
Regulatory assets $— $(159) $ —
Total Pretax Gains (Losses) Recognized as Regulatory
Assets or Liabilities $— $(159) $ —
(a) Reclassified to earnings as interest expense over the term of the related debt.
(b) Effective with the merger, Progress Energy no longer designates interest rate derivatives for regulated
operations as cash flow hedges. As a result, the pretax losses on derivatives as of the date of the merger
were reclassified from AOCI to Regulatory assets.
There was no hedge ineffectiveness during the years ended December 31,
2013, 2012, and 2011, and no gains or losses have been excluded from the
assessment of hedge effectiveness during the same periods.
At December 31, 2013, and 2012, $61 million and $65 million,
respectively of pretax deferred net losses on derivative instruments related
to interest rate cash flow hedges were included as a component of AOCI.
A $5 million pretax loss is expected to be recognized in earnings during the next
12 months as interest expense.