OG&E 2011 Annual Report Download - page 67

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Income Statement Presentation Related to Derivative Instruments
The following tables present the effect of derivative instruments on the
Company’s Consolidated Statement of Income in 2011.
Amount
Reclassified
from
Amount Accumulated
Recognized Other
in Other Comprehensive Amount
Comprehensive Income into Recognized
(In millions) Income (A) Income in Income
Derivatives in cash flow
hedging relationships
NGLs financial options $(8.4) $÷(9.8) $«–
Natural gas financial futures/swaps 2.9 (30.4) –
Total $(5.5) $(40.2) $«–
(A) The estimated net amount of gains or losses included in Accumulated Other Comprehensive
Income at December 31, 2011 that is expected to be reclassified into income within the next
12 months is a loss of $4.9 million.
Amount
Recognized
(In millions) in Income
Derivatives not designated
as hedging instruments
Natural gas physical purchases/sales $(10.0)
Natural gas financial futures/swaps 0.4
Total $÷(9.6)
The following tables present the effect of derivative instruments on
the Company’s Consolidated Statement of Income in 2010.
Amount
Reclassified
from
Amount Accumulated
Recognized Other
in Other Comprehensive Amount
Comprehensive Income into Recognized
(In millions) Income Income in Income
Derivatives in cash flow
hedging relationships
NGLs financial options $÷(9.7) $÷«1.2 $÷«–
NGLs financial futures/swaps 1.7 (3.7) –
Natural gas financial futures/swaps (14.9 (25.9) 0.2
Total $(22.9) $(28.4) $0.2
Amount
Recognized
(In millions) in Income
Derivatives not designated
as hedging instruments
Natural gas physical purchases/sales $(11.7)
Natural gas financial futures/swaps 3.2
Total $÷(8.5)
OGE Energy Corp. 65
The following tables present the effect of derivative instruments
on the Company’s Consolidated Statement of Income in 2009.
Amount
Reclassified
from
Amount Accumulated
Recognized Other
in Other Comprehensive Amount
Comprehensive Income into Recognized
(In millions) Income Income in Income
Derivatives in cash flow
hedging relationships
NGLs financial options $÷(56.4) $÷«1.7 $««««–
NGLs financial futures/swaps (33.7) 12.6 –
Natural gas financial futures/swaps (19.8) (26.5) (0.2)
Total $(109.9) $(12.2) $(0.2)
Amount
Recognized
(In millions) in Income
Derivatives not designated
as hedging instruments
Natural gas physical purchases/sales $(24.3)
Natural gas financial futures/swaps 17.7
NGLs financial futures/swaps (0.2)
Total $÷(6.8)
For derivatives designated as cash flow hedges in the tables above,
amounts reclassified from Accumulated Other Comprehensive Income
into income (effective portion) and amounts recognized in income (ineffec-
tive portion) for the years ended December 31, 2011, 2010 and 2009, if
any, are reported in Operating Revenues. For derivatives not designated
as hedges in the tables above, amounts recognized in income for the
years ended December 31, 2011, 2010 and 2009, if any, are reported
in Operating Revenues.
Credit-Risk Related Contingent Features in Derivative Instruments
In the event Moody’s Investors Services or Standard & Poor’s Ratings
Services were to lower the Company’s senior unsecured debt rating to
a below investment grade rating, at December 31, 2011, the Company
would have been required to post $2.1 million of cash collateral to sat-
isfy its obligation under its financial and physical contracts relating to
derivative instruments that are in a net liability position at December 31,
2011. In addition, the Company could be required to provide additional
credit assurances in future dealings with third parties, which could
include letters of credit or cash collateral.