Duke Energy 2014 Annual Report Download - page 176

156
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)
The following table shows the gains and losses during the year recognized
on cash fl ow 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 reclassifi ed from AOCI. Amounts for
interest rate contracts are reclassifi ed to earnings as interest expense over the
term of the related debt.
Years Ended
December 31,
(in millions) 2014 2013 2012
Pretax Gains (Losses) Recorded in AOCI
Commodity contracts $— $1 $1
Interest rate contracts —— (11)
Total Pretax Gains (Losses) Recorded in AOCI $— $ 1 $ (10)
Location of Pretax Gains and (Losses) Reclassifi ed
from AOCI into Earnings
Interest rate contracts
Interest expense $(13) $ — $ (14)
Location of Pretax Gains and (Losses) Reclassifi ed
from AOCI to Regulatory Assets or Liabilities(a)
Interest rate contracts
Regulatory assets $— $ — $(159)
(a) Effective with the merger, Duke Energy Progress and Duke Energy Florida no longer designates interest
rate derivatives for regulated operations as cash fl ow hedges. As a result, the pretax losses on derivatives
as of the date of the merger were reclassifi ed from AOCI to regulatory assets.
There was no hedge ineffectiveness during the years ended December 31,
2014, 2013 and 2012, and no gains or losses have been excluded from the
assessment of hedge effectiveness during the same periods.
A $13 million pretax loss is expected to be recognized in earnings during
the next 12 months as interest expense.
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. Amounts included
in Regulatory Assets or Liabilities for commodity contracts are reclassifi ed
to earnings to match recovery through the fuel clause. Amounts included in
Regulatory Assets or Liabilities for interest rate contracts are reclassifi ed to
earnings as interest expense over the term of the related debt.
Years Ended
December 31,
(in millions) 2014 2013 2012
Location of Pretax Gains and (Losses) Recognized
in Earnings
Commodity contracts
Operating revenues $— $ 11 $ (11)
Fuel used in electric generation and purchased power (44) (200) (454)
Other income and expenses, net ——7
Interest rate contracts
Interest expense (4) (17) (8)
Total Pretax (Losses) Gains Recognized in Earnings $ (48) $ (206) $ (466)
Location of Pretax Gains and (Losses) Recognized as
Regulatory Assets or Liabilities
Commodity contracts
Regulatory assets $ (233) $ (10) $ (171)
Regulatory liabilities 2——
Interest rate contracts
Regulatory assets 218 6
Total Pretax Gains (Losses) Recognized as Regulatory
Assets or Liabilities $ (229) $ 28 $ (165)
DUKE ENERGY PROGRESS
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. Substantially
all derivatives not designated as hedging instruments receive regulatory
accounting treatment.
December 31,
2014 2013
(in millions) Asset Liability Asset Liability
Derivatives Designated as Hedging Instruments
Commodity contracts
Current liabilities: other $— $ 1 $— $ 1
Total Derivatives Designated as Hedging Instruments $ — $ 1 $— $ 1
Derivatives Not Designated as Hedging Instruments
Commodity contracts
Investments and other assets: other $— $ — $2 $ 1
Current liabilities: other — 108 240
Deferred credits and other liabilities: other —23229
Total Derivatives Not Designated as Hedging Instruments $ — $131 $6 $70
Total Derivatives $— $132 $6 $71