CenterPoint Energy 2015 Annual Report Download - page 106

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Fair Value of Derivative Instruments
December 31, 2014
Total derivatives not designated
as hedging instruments
Balance Sheet
Location
Derivative
Assets
Fair Value
Derivative
Liabilities
Fair Value
(in millions)
Naturalgasderivatives(1)(2)(3)
CurrentAssets:Non-tradingderivativeassets
$ 101
$ 1
Naturalgasderivatives(1)(2)(3)
OtherAssets:Non-tradingderivativeassets
32
—
Naturalgasderivatives(1)(2)(3)
CurrentLiabilities:Non-tradingderivativeliabilities
14
83
Naturalgasderivatives(1)(2)(3)
OtherLiabilities:Non-tradingderivativeliabilities
2
18
Indexeddebtsecuritiesderivative
CurrentLiabilities
—
541
Total
$ 149
$ 643
(1) Thefairvalueshownfornaturalgascontractsiscomprisedofderivativegrossvolumestotaling804Bcforanet60Bcflongposition.Ofthenetlong
position,basisswapsconstitute127Bcf.
(2) NaturalgascontractsarepresentedonanetbasisintheConsolidatedBalanceSheets.Naturalgascontractsaresubjecttomasternettingarrangements.
Thisnettingappliestoallundisputedamountsdueorpastdueandcausesderivativeassets(liabilities)tobeultimatelypresentednetinaliability(asset)
account within the Consolidated Balance Sheets. The net of total non-trading derivative assets and liabilities was a $111 millionasset as shown on
CenterPointEnergy’sConsolidatedBalanceSheets(andasdetailedinthetablebelow),andwascomprisedofthenaturalgascontractsderivativeassets
andliabilitiesseparatelyshownabove,offsetbycollateralnettingof$64million.
(3) DerivativeAssetsandDerivativeLiabilitiesincludenomaterialamountsrelatedtophysicalforwardtransactionswithEnable.
Offsetting of Natural Gas Derivative Assets and Liabilities
December 31, 2014
Gross Amounts
Recognized (1)
Gross Amounts Offset in the
Consolidated Balance Sheets
Net Amount Presented in the
Consolidated Balance Sheets (2)
(in millions)
CurrentAssets:Non-tradingderivativeassets
$ 115
$ (16)
$ 99
OtherAssets:Non-tradingderivativeassets
34
(2)
32
CurrentLiabilities:Non-tradingderivativeliabilities
(84)
65
(19)
OtherLiabilities:Non-tradingderivativeliabilities
(18)
17
(1)
Total
$ 47
$ 64
$ 111
(1) Grossamountsrecognizedincludesomederivativeassetsandliabilitiesthatarenotsubjecttomasternettingarrangements.
(2) ThederivativeassetsandliabilitiesontheConsolidatedBalanceSheetsexcludeaccountsreceivableoraccountspayablethat,shouldtheyexist,couldbe
usedasoffsetstothesebalancesintheeventofadefault.
For CenterPoint Energy’s price stabilization activities of the Natural Gas Distribution business segment, the settled costs of derivatives are ultimately
recoveredthroughpurchasedgasadjustments.Accordingly,thenetunrealizedgainsandlossesassociatedwiththesecontractsarerecordedasnetregulatoryassets.
Realized and unrealized gains and losses on other derivatives are recognized in the Statements of Consolidated Income as revenue for retail sales derivative
contractsand asnaturalgas expenseforfinancial naturalgasderivatives andnon-retailrelated physical naturalgasderivatives. Unrealizedgainsand losseson
indexeddebtsecuritiesarerecordedasOtherIncome(Expense)intheStatementsofConsolidatedIncome.
100