Duke Energy 2013 Annual Report Download - page 168

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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)
Years Ended December 31,
(in millions) 2013 2012 2011
Location of Pretax Gains and (Losses) Reclassified
from AOCI to Regulatory Assets or Liabilities(b)
Interest rate contracts
Regulatory assets $ — $(117) $ —
Total Pretax Gains (Losses) Recognized as Regulatory
Assets or Liabilities $— $(117) $ —
(a) Reclassified to earnings as interest expense over the term of the related debt.
(b) Effective with the merger, Duke Energy Progress 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.
The following table shows the gains and losses during the year recognized
on undesignated derivatives and the line items on the Consolidated Statements
of Operations and Comprehensive Income or the Consolidated Balance Sheets
where the pretax gains and losses were reported.
Years Ended
December 31,
(in millions) 2013 2012 2011
Location of Pretax Gains and (Losses) Recognized
in Earnings
Commodity contracts
Operating revenues $ 11 $ (11) $ 1
Fuel used in electric generation and purchased power (71) (115) (60)
Interest rate contracts
Interest expense (13) (6) —
Total Pretax (Losses) Gains Recognized in Earnings $(73) $(132) $ (59)
Location of Pretax Gains and (Losses) Recognized as
Regulatory Assets or Liabilities
Commodity contracts(a)
Regulatory assets $ (6) $ (55) $(140)
Interest rate contracts(b)
Regulatory assets 13 6 —
Total Pretax Gains (Losses) Recognized as Regulatory
Assets or Liabilities $ 7 $ (49) $(140)
(a) Reclassified to earnings to match recovery through the fuel clause.
(b) Reclassified to earnings as interest expense over the term of the related debt.
DUKE ENERGY FLORIDA
The following table shows the fair value of derivatives and the line
items in the Consolidated Balance Sheets where they are reported. Although
derivatives subject to master netting arrangements are netted on the
Consolidated Balance Sheets, the fair values presented below are shown gross
and cash collateral on the derivatives has not been netted against the fair
values shown.
December 31,
2013 2012
(in millions) Asset Liability Asset Liability
Derivatives Designated as Hedging Instruments
Commodity contracts
Current liabilities: other $— $ — $ — $ 1
Total Derivatives Designated as Hedging Instruments $— $ — $ — $ 1
Derivatives Not Designated as Hedging Instruments
Commodity contracts(a)
Current assets: other $ 3 $ 2 $ 2 $ —
Investments and other assets: other — — 7 —
Current liabilities: other 9 64 — 146
Deferred credits and other liabilities: other 2 63 — 123
Total Derivatives Not Designated as Hedging
Instruments $ 14 $ 129 $ 9 $ 269
Total Derivatives $ 14 $129 $ 9 $ 270
(a) Substantially all of these contracts are recorded as regulatory assets or liabilities.
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 $ 12 $ 2 $ 66 $ 63
Gross amounts offset (10) (2) (15) (7)
Net amount subject to master netting 2 — 51 56
Net amounts recognized on
the Consolidated Balance Sheet $ 2 $ — $ 51 $ 56
December 31, 2012
Derivative Assets Derivative Liabilities
(in millions) Current(a)
Non-
Current(b) Current(c)
Non-
Current(d)
Gross amounts recognized $ 2 $ 7 $147 $ 123
Gross amounts offset — — (20) (29)
Net amounts subject to master netting 2 7 127 94
Net amounts recognized on
the Consolidated Balance Sheet $ 2 $ 7 $127 $ 94
(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.