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Risk Management, Derivative Instruments And Hedging Activities | 3 Months Ended
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Mar. 31, 2013
Risk Management, Derivative Instruments And Hedging Activities [Abstract] |
Risk Management, Derivative Instruments And Hedging Activities | 8. RISK MANAGEMENT, DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES The Duke Energy Registrants closely monitor the risks associated with commodity price changes and changes in interest rates on their operations and, where appropriate, use various commodity and interest rate instruments to manage these risks. Certain of these derivative instruments qualify for hedge accounting and are designated as hedging instruments, while others either do not qualify as hedges or have not been designated as hedges (hereinafter referred to as undesignated contracts). The Duke Energy Registrants' primary use of energy commodity derivatives is to hedge the generation portfolio against exposure to changes in the prices of power and fuel. Interest rate swaps are entered into to manage interest rate risk primarily associated with the Duke Energy Registrants' variable-rate and fixed-rate borrowings. Additionally, Duke Energy Carolinas', Duke Energy Progress' and Duke Energy Florida's n uclear decommissioning trust fund (NDTF) investment holdings may include certain derivative instruments, such as interest rate swaps and credit default swaps, as part of its overall investment strategy. As further discussed in Note 10 the NDTF's are managed by third party investment managers who have the discretion to make investment decisions within risk management guidelines determined by manageme nt of Duke Energy Carolinas, Duke Energy Progress and Duke Energy Florida. The fair value of these derivative instruments are included within Nuclear decommissioning trust funds on the Condensed Consolidated Balance Sheets and are not material to the investment balance at March 31, 2013 and December 31, 2012. The accounting guidance for derivatives requires the recognition of all derivative instruments not identified as NPNS as either assets or liabilities at fair value in the Condensed Consolidated Balance Sheets. For derivative instruments that qualify for hedge accounting, the Duke Energy Registrants may elect to designate such derivatives as either cash flow hedges or fair value hedges. The Duke Energy Registrants offset fair value amounts recognized on the Condensed Consolidated Balance Sheets related to derivative instruments executed with the same counterparty under the same master netting agreement. The operations of the USFE&G business segment meet the criteria for regulatory accounting treatment. Accordingly, for derivatives that would otherwise be designated as cash flow hedges within USFE&G, gains and losses are reflected as a regulatory liability or asset instead of as a component of accumulated other comprehensive income (AOCI). For derivatives that would otherwise be designated as fair value hedges or left undesignated within USFE&G, gains and losses associated with the change in fair value of these derivative contracts would be deferred as a regulatory liability or asset. As a result changes in fair value of these derivatives have no immediate earnings impact. Within the Duke Energy Registrants' unregulated businesses, for derivative instruments that qualify for hedge accounting and are designated as cash flow hedges, the effective portion of the gain or loss is reported as a component of AOCI and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Any gains or losses on the derivative that represent either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings. For derivative instruments that qualify and are designated as a fair value hedge, the gain or loss on the derivative as well as the fully or partially offsetting loss or gain on the hedged item are recognized in earnings in the current period. The Duke Energy Registrants include the gain or loss on the derivative in the same line item as the offsetting loss or gain on the hedged item in the Condensed Consolidated Statements of Operations. Additionally, the Duke Energy Registrants enter into derivative agreements that are economic hedges that either do not qualify for hedge accounting or have not been designated as a hedge. The changes in fair value of these undesignated derivative instruments are reflected in current earnings. COMMODITY PRICE RISK The Duke Energy Registrants are exposed to the impact of market changes in the future prices of electricity (energy, capacity and financial transmission rights), coal, natural gas and emission allowances (SO 2, seasonal NO X and annual NO X) as a result of their energy operations such as electricity generation and the transportation and sale of natural gas. With respect to commodity price risks associated with electricity generation, the Duke Energy Registrants are exposed to changes including, but not limited to, the cost of the coal and natural gas used to generate electricity, the prices of electricity sold in wholesale markets, the cost of capacity and electricity purchased for resale in wholesale markets and the cost of emission allowances primarily at the Duke Energy Registrants' coal fired power plants. Risks associated with commodity price changes on future operations are closely monitored and, where appropriate, various commodity contracts are used to mitigate the effect of such fluctuations on operations. Exposure to commodity price risk is influenced by a number of factors, including, but not limited to, the term of the contract, the liquidity of the market and delivery location. Commodity Fair Value Hedges At March 31, 2013, there were no open commodity derivative instruments that were designated as fair value hedges. Commodity Cash Flow Hedges At March 31, 2013, open commodity derivative instruments that were designated as cash flow hedges were not material. Undesignated Contracts The Duke Energy Registrants use derivative contracts as economic hedges to manage the market risk exposures that arise from providing electricity generation and capacity to large energy customers, energy aggregators, retail customers and other wholesale companies. Undesignated contracts may include contracts not designated as a hedge, contracts that do not qualify for hedge accounting, derivatives that do not or no longer qualify for the NPNS scope exception, and de-designated hedge contracts. These contracts expire as late as 201 7. Undesignated contracts also include contracts associated with operations that Duke Energy continues to wind down or has included as discontinued operations. As these undesignated contracts expire as late as 2021, Duke Energy has entered into economic hedges that leave it minimally exposed to changes in prices over the duration of these contracts. Duke Energy Carolinas and Duke Energy Progress use derivative contracts primarily as economic hedges to manage the market risk exposures that arise from electricity generation. Duke Energy Carolinas and Duke Energy Progress have also entered into firm power sale agreements, which are accounted for as derivative instruments, as part of the Interim FERC Mitigation in connection with Duke Energy's merger with Progress Energy. Duke Energy Carolinas' undesignated contracts as of March 31, 2013, are primarily associated with forward sales and purchases of power. Duke Energy Progress' undesignated contracts as of March 31, 2013, are primarily associated with forward purchases of fuel used in electricity generation. Duke Energy Florida uses derivative contracts primarily as economic hedges to manage the market risk exposures that arise from electricity generation. Undesignated contracts at March 31, 2013, are primarily associated with forward purchases of fuel used in electricity generation. Duke Energy Ohio uses derivative contracts as economic hedges to manage the market risk exposures that arise from providing electricity generation and capacity to large energy customers, energy aggregators, retail customers and other wholesale companies. Undesignated contracts at March 31, 2013, are primarily associated with forward sales and purchases of power, coal and gas for the Commercial Power segment. Duke Energy Indiana uses derivative contracts as economic hedges to manage the market risk exposures that arise from electricity generation. Undesignated contracts at March 31, 2013, are primarily associated with forward purchases and sales of power, and financial transmission rights. Volumes The table below shows information relating to the volume of the Duke Energy registrants outstanding commodity derivative activity. Amounts disclosed represent the notional volumes of commodities contracts accounted for at fair value. For option contracts, notional amounts include only the delta-equivalent volumes which represent the notional volumes times the probability of exercising the option based on current price volatility. Volumes associated with contracts qualifying for the NPNS exception have been excluded from the table below. Amounts disclosed represent the absolute value of notional amounts. The Duke Energy Registrants have netted contractual amounts where offsetting purchase and sale contracts exist with identical delivery locations and times of delivery. Where all commodity positions are perfectly offset, no quantities are shown below. For additional information on notional dollar amounts of debt subject to derivative contracts accounted for at fair value, see “Interest Rate Risk” section below.
|  | March 31, 2013
|  | Duke Energy |  | Duke Energy Carolinas |  | Progress Energy |  | Duke Energy Progress |  | Duke Energy Florida |  | Duke Energy Ohio |  | Duke Energy Indiana
Commodity contracts |  |  |  |  |  |  |  |  |  |  |  |  |
Electricity-energy (Gigawatt-hours)(a) | 56,890 |  | 1,802 |  | 1,850 |  | 1,850 |  | ― |  | 53,173 |  | 406
Natural gas (millions of decatherms) | 516 |  | ― |  | 335 |  | 110 |  | 225 |  | 181 |  | ―
|  | December, 31, 2012
|  | Duke Energy |  | Duke Energy Carolinas |  | Progress Energy |  | Duke Energy Progress |  | Duke Energy Florida |  | Duke Energy Ohio |  | Duke Energy Indiana
Commodity contracts |  |  |  |  |  |  |  |  |  |  |  |  |
Electricity-energy (Gigawatt-hours)(a) | 52,104 |  | 2,028 |  | 1,850 |  | 1,850 |  | ― |  | 51,215 |  | 97
Natural gas (millions of decatherms) | 528 |  | ― |  | 348 |  | 118 |  | 230 |  | 180 |  | ―
(a) | Amounts at Duke Energy Ohio include intercompany positions that are eliminated at Duke Energy. |  |
INTEREST RATE RISK The Duke Energy Registrants are exposed to risk resulting from changes in interest rates as a result of their issuance or anticipated issuance of variable and fixed-rate debt and commercial paper. Interest rate exposure is managed by limiting variable-rate exposures to a percentage of total debt and by monitoring the effects of market changes in interest rates. To manage risk associated with changes in interest rates, the Duke Energy Registrants may enter into financial contracts; primarily interest rate swaps and U.S. Treasury lock agreements. Additionally, in anticipation of certain fixed-rate debt issuances, a series of forward starting interest rate swaps may be executed to lock in components of the market interest rates at the time and terminated prior to or upon the issuance of the corresponding debt. When these transactions occur within a business that meets the criteria for regulatory accounting treatment, these contracts may be treated as undesignated and any pre-tax gain or loss recognized from inception to termination of the hedges would be recorded as a regulatory liability or asset and amortized as a component of interest expense over the life of the debt. In businesses that don't meet the criteria for regulatory accounting treatment, these derivatives may be designated as hedges whereby any pre-tax gain or loss recognized from inception to termination of the hedges would be recorded in AOCI and amortized as a component of interest expense over the life of the debt. Duke Energy has a combination foreign exchange, pay fixed-receive floating interest rate swap to fix the US Dollar equivalent payments on a floating rate Chilean debt issue. As discussed above, w ithin the Duke Energy Carolinas, Duke Energy Progress, and Duke Energy Florida NDTFs, certain of the fixed income investment managers have authorization to use interest rate swaps and credit default swaps in their investment strategies to either manage risk or enhance returns. Notional amounts for these contracts are not included in the table below as they are not material to the investment balance at March 31, 2013 and December 31, 2012. The following table shows the notional amounts for derivatives related to interest rate risk.
|  |  | March 31, 2013
(in millions) |  | Duke Energy |  | Progress Energy |  | Duke Energy Progress |  | Duke Energy Ohio |  | Duke Energy Indiana
Cash flow hedges(a) |  | $ | 1,047 |  | $ | ― |  | $ | ― |  | $ | ― |  | $ | ―
Undesignated contracts |  |  | 238 |  |  | ― |  |  | ― |  |  | 27 |  |  | 200
Fair value hedges |  |  | 250 |  |  | ― |  |  | ― |  |  | 250 |  |  | ―
| Total notional amount |  | $ | 1,535 |  | $ | ― |  | $ | ― |  | $ | 277 |  | $ | 200
|  |  | December 31, 2012
(in millions) |  | Duke Energy |  | Progress Energy |  | Duke Energy Progress |  | Duke Energy Ohio |  | Duke Energy Indiana
Cash flow hedges(a) |  | $ | 1,047 |  | $ | ― |  | $ | ― |  | $ | ― |  | $ | ―
Undesignated contracts |  |  | 290 |  |  | 50 |  |  | 50 |  |  | 27 |  |  | 200
Fair value hedges |  |  | 250 |  |  | ― |  |  | ― |  |  | 250 |  |  | ―
| Total notional amount |  | $ | 1,587 |  | $ | 50 |  | $ | 50 |  | $ | 277 |  | $ | 200
(a) | Duke Energy includes amounts related to non-recourse variable rate long-term debt of VIEs of $620 million at March 31, 2013, and at December 31, 2012, respectively.
DUKE ENERGY The following tables show fair value amounts of derivative contracts, and the line items in the Condensed Consolidated Balance Sheets in which such amounts are included. The fair values of derivative contracts are presented on a gross basis, even when the derivative instruments are subject to master netting arrangements where Duke Energy nets the fair value of derivative contracts subject to master netting arrangements with the same counterparty on the Condensed Consolidated Balance Sheets. Cash collateral payables and receivables associated with the derivative contracts have not been netted against the fair value amounts.
|  | March 31, 2013 |  |  | December 31, 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 |  | ― |  |  | 1 |  |  |  | ― |  |  | 1
Interest rate contracts |  |  |  |  |  |  |  |  |  |  |  |
Current assets: other |  | 2 |  |  | ― |  |  |  | 2 |  |  | ―
Investments and other assets: other |  | 3 |  |  | ― |  |  |  | 7 |  |  | ―
Current Liabilities: Other |  | (2) |  |  | 70 |  |  |  | ― |  |  | 81
Deferred credits and other liabilities: other |  | ― |  |  | 30 |  |  |  | ― |  |  | 35
Total Derivatives Designated as Hedging Instruments | $ | 3 |  | $ | 102 |  |  | $ | 9 |  | $ | 119
Derivatives Not Designated as Hedging Instruments |  |  |  |  |  |  |  |  |  |  |  |
Commodity contracts |  |  |  |  |  |  |  |  |  |  |  |
Current assets: other | $ | 52 |  | $ | 9 |  |  | $ | 41 |  | $ | 2
Investments and other assets: other |  | 32 |  |  | 6 |  |  |  | 106 |  |  | 50
Current liabilities: other |  | 151 |  |  | 372 |  |  |  | 106 |  |  | 407
Deferred credits and other liabilities: other |  | 71 |  |  | 293 |  |  |  | 2 |  |  | 255
Interest rate contracts |  |  |  |  |  |  |  |  |  |  |  |
Current liabilities: other |  | ― |  |  | 57 |  |  |  | ― |  |  | 76
Deferred credits and other liabilities: other |  | ― |  |  | 6 |  |  |  | ― |  |  | 8
Total Derivatives Not Designated as Hedging Instruments | $ | 306 |  | $ | 743 |  |  | $ | 255 |  | $ | 798
Total Derivatives | $ | 309 |  | $ | 845 |  |  | $ | 264 |  | $ | 917
The tables below show the balance sheet location of the derivative contracts subject to enforceable master netting agreements and include collateral posted to offset the net position. T his disclosure is intended to enable users to evaluate the effect of netting arrangements on Duke Energy's financial position. The amount shown in the net position column is calculated by counterparty. Most derivatives are entered into with counterparties under enforceable master netting agreement s, or with an Independent System Operator (ISO) such as MISO or PJM. Derivatives entered into wi th a clearinghouse are us ually over-collateralized due to the requirement to post initial margin upon entering into contracts. The amounts shown as offset are limited by the amount of exposure to a counterparty such that an over collateralized position at one counterparty is not allowed to reduce an under collateralized position at another counterparty. In addition to the amounts shown as offset, in the table, Duke Energy may also have available accounts receivable or accounts payable, that are subject to master netting agreements that would offset exposures in the event of bankruptcy.
|  |  | March 31, 2013
(in millions) |  | Gross amounts recognized |  | Gross amounts offset |  | Net amounts included on the Condensed Consolidated Balance Sheet |
Derivative Assets: Current |  |  |  |  |  |  |  |  |  |
Subject to Master Netting |  | $ | 182 |  | $ | 157 |  | $ | 25 |
Not Subject to Master Netting |  |  | 21 |  |  | ― |  |  | 21 |
Total Derivative Assets: Current |  |  | 203 |  |  | 157 |  |  | 46 | (a)
Derivative Assets: Non-current |  |  |  |  |  |  |  |  |  |
Subject to Master Netting |  |  | 91 |  |  | 75 |  |  | 16 |
Not Subject to Master Netting |  |  | 15 |  |  | ― |  |  | 15 |
Total Derivative Assets: Non-current |  |  | 106 |  |  | 75 |  |  | 31 | (b)
Derivative Liabilities: Current |  |  |  |  |  |  |  |  |  |
Subject to Master Netting |  |  | 350 |  |  | 222 |  |  | 128 |
Not Subject to Master Netting |  |  | 159 |  |  | ― |  |  | 159 |
Total Derivative Liabilities: Current |  |  | 509 |  |  | 222 |  |  | 287 | (c)
Derivative Liabilities: Non-current |  |  |  |  |  |  |  |  |  |
Subject to Master Netting |  |  | 295 |  |  | 118 |  |  | 177 |
Not Subject to Master Netting |  |  | 41 |  |  | ― |  |  | 41 |
Total Derivative Liabilities: Non-current |  |  | 336 |  |  | 118 |  |  | 218 | (d)
|  |  | December 31, 2012
(in millions) |  | Gross amounts recognized |  | Gross amounts offset |  | Net amounts included on the Condensed Consolidated Balance Sheet |
Derivative Assets: Current |  |  |  |  |  |  |  |  |  |
Subject to Master Netting |  | $ | 127 |  | $ | 114 |  | $ | 13 |
Not Subject to Master Netting |  |  | 22 |  |  | ― |  |  | 22 |
Total Derivative Assets: Current |  |  | 149 |  |  | 114 |  |  | 35 | (a)
Derivative Assets: Non-current |  |  |  |  |  |  |  |  |  |
Subject to Master Netting |  |  | 96 |  |  | 54 |  |  | 42 |
Not Subject to Master Netting |  |  | 19 |  |  | ― |  |  | 19 |
Total Derivative Assets: Non-current |  |  | 115 |  |  | 54 |  |  | 61 | (b)
Derivative Liabilities: Current |  |  |  |  |  |  |  |  |  |
Subject to Master Netting |  |  | 402 |  |  | 151 |  |  | 251 |
Not Subject to Master Netting |  |  | 166 |  |  | ― |  |  | 166 |
Total Derivative Liabilities: Current |  |  | 568 |  |  | 151 |  |  | 417 | (c)
Derivative Liabilities: Non-current |  |  |  |  |  |  |  |  |  |
Subject to Master Netting |  |  | 295 |  |  | 90 |  |  | 205 |
Not Subject to Master Netting |  |  | 54 |  |  | ― |  |  | 54 |
Total Derivative Liabilities: Non-current |  |  | 349 |  |  | 90 |  |  | 259 | (d)
(a) | Included in Other within Current Assets on the Condensed Consolidated Balance Sheet.
(b) | Included in Other within Investments and Other Assets on the Condensed Consolidated Balance Sheet.
(c) | Included in Other within Current Liabilities on the Condensed Consolidated Balance Sheet.
(d) | Included in Other within Deferred Credits and Other Liabilities on the Condensed Consolidated Balance Sheet.
The following table shows the amount of gains and losses recognized on derivative instruments designated and qualifying as cash flow hedges by type of derivative contract, and the Condensed Consolidated Statements of Operations line items in which such gains and losses are included when reclassified from AOCI.
|  | Three Months Ended March 31,
(in millions) | 2013 |  | 2012
Pre-tax Gains (Losses) Recorded in AOCI |  |  |  |  |
Interest rate contracts | $ | 13 |  | $ | 18
Commodity contracts |  | 1 |  |  | ―
Total Pre-tax Gains (Losses) Recorded in AOCI | $ | 14 |  | $ | 18
Location of Pre-tax Gains and (Losses) Reclassified from AOCI into Earnings(a) |  |  |  |  |
Interest rate contracts(b) |  |  |  |  |
Interest expense | $ | (1) |  | $ | (1)
Total Pre-tax Gains (Losses) Reclassified from AOCI into Earnings | $ | (1) |  | $ | (1)
(a) | Represents the gains and losses on cash flow hedges previously recorded in AOCI during the term of the hedging relationship and reclassified into earnings during the current period.
(b) | Amounts in AOCI related to terminated hedges are reclassified to earnings as the interest expense is recorded. The effective portion of the hedges will be amortized to interest expense over the term of the related debt.
There was no hedge ineffectiveness during the three months ended March 31, 2013 and 2012, and no gains or losses have been excluded from the assessment of hedge effectiveness during the same periods. At March 31, 2013, and 2012, $144 million and $102 million, respectively of pre-tax deferred net losses on derivative instruments related to intere st rate cash flow hedges were included as a component of AOCI and a $4 million pre-tax gain is expected to be recognized in earnings during the next 12 months as the hedged transactions occur. The following tables show the amount of pre-tax gains and losses recognized on undesignated contracts by type of derivative instrument, and the line items in the Condensed Consolidated Statements of Comprehensive Income in which such gains and losses are included or deferred on the Condensed Consolidated Balance Sheets as regulatory assets or liabilities.
|  | Three Months Ended March 31,
(in millions) | 2013 |  | 2012
Location of Pre-tax Gains and (Losses) Recognized in Earnings |  |  |  |  |
Commodity contracts |  |  |  |  |
Revenue, regulated electric | $ | 6 |  | $ | ―
Revenue, nonregulated electric, natural gas and other |  | (82) |  |  | 36
Fuel used in electric generation and purchased power regulated |  | (52) |  |  | ―
Fuel used in electric generation and purchased power - nonregulated |  | (7) |  |  | ―
Interest rate contracts |  |  |  |  |
Interest expense |  | (4) |  |  | ―
Total Pre-tax (Losses) Gains Recognized in Earnings | $ | (139) |  | $ | 36
Location of Pre-tax Gains and (Losses) Recognized as Regulatory Assets or Liabilities |  |  |  |  |
Commodity contracts |  |  |  |  |
Regulatory asset | $ | 105 |  | $ | (1)
Regulatory liability |  | (5) |  |  | 5
Interest rate contracts |  |  |  |  |
Regulatory asset |  | 13 |  |  | 22
Total Pre-tax Gains (Losses) Recognized as Regulatory Assets of Liabilities | $ | 113 |  | $ | 26
DUKE ENERGY CAROLINAS The following tables show fair value amounts of derivative contracts, and the line items in the Condensed Consolidated Balance Sheets in which such amounts are included. The fair values of derivative contracts are presented on a gross basis, even when the derivative instruments are subject to master netting arrangements where Duke Energy Carolinas nets the fair value of derivative contracts subject to master netting arrangements with the same counterparty on the Condensed Consolidated Balance Sheets. Cash collateral payables and receivables associated with the derivative contracts have not been netted against the fair value amounts.
|  | March 31, 2013 |  | December 31, 2012
(in millions) | Asset |  | Liability |  | Asset |  | Liability
Derivatives Not Designated as Hedging Instruments |  |  |  |  |  |  |  |  |  |  |
Commodity contracts |  |  |  |  |  |  |  |  |  |  |
Current liabilities: other | $ | ― |  | $ | 2 |  | $ | ― |  | $ | 6
Deferred credits and other liabilities: other |  | ― |  |  | 3 |  |  | ― |  |  | 6
Total Derivatives Not Designated as Hedging Instruments | $ | ― |  | $ | 5 |  | $ | ― |  | $ | 12
Total Derivatives | $ | ― |  | $ | 5 |  | $ | ― |  | $ | 12
The tables below show the balance sheet location of the derivative contracts subject to enforceable master netting agreements and include collateral posted to offset the net position. T his disclosure is intended to enable users to evaluate the effect of netting arrangements on Duke Energy Carolinas' financial position. The amount shown in the net position column is calculated by counterparty. Most derivatives are entered into with counterparties under enforceable master netting agreement s, or with an ISO such as MISO or PJM. Derivatives entered into wi th a clearinghouse are usually over-collateralized due to the requirement to post initial margin upon entering into contracts. The amounts shown as offset are limited by the amount of exposure to a counterparty such that an over collateralized position at one counterparty is not allowed to reduce an under collateralized position at another counterparty. In addition to the amounts shown as offset, in the table, Duke Energy Carolinas may also have available accounts receivable or accounts payable to offset exposures in the event of bankruptcy.
|  |  | March 31, 2013
(in millions) |  | Gross amounts recognized |  | Gross amounts offset |  | Net amounts included on the Condensed Consolidated Balance Sheet |
Derivative Liabilities: Current |  |  |  |  |  |  |  |  |  |
Not Subject to Master Netting |  | $ | 2 |  | $ | ― |  | $ | 2 | (a)
Derivative Liabilities: Non-current |  |  |  |  |  |  |  |  |  |
Not Subject to Master Netting |  |  | 3 |  |  | ― |  |  | 3 | (b)
|  |  | December 31, 2012
(in millions) |  | Gross amounts recognized |  | Gross amounts offset |  | Net amounts included on the Condensed Consolidated Balance Sheet |
Derivative Liabilities: Current |  |  |  |  |  |  |  |  |  |
Not Subject to Master Netting |  | $ | 6 |  | $ | ― |  | $ | 6 | (a)
Derivative Liabilities: Non-current |  |  |  |  |  |  |  |  |  |
Not Subject to Master Netting |  |  | 6 |  |  | ― |  |  | 6 | (b)
(a) | Included in Other within Current Liabilities on the Condensed Consolidated Balance Sheet.
(b) | Included in Other within Deferred Credits and Other Liabilities on the Condensed Consolidated Balance Sheet.
There were insignificant losses on cash flow hedges reclassified at Duke Energy Carolinas for the three months ended March 31, 2013 and 2012, respectively. At March 31, 2013 and 2012, there were no pre-tax deferred net gains or losses on outstanding derivative instruments related to cash flow hedges remaining in AOCI for Duke Energy Carolinas. At March 31, 2013 and 2012, there were no pre-tax losses recognized on undesignated contracts for Duke Energy Carolinas. PROGRESS ENERGY The following tables show fair value amounts of derivative contracts, and the line items in the Condensed Consolidated Balance Sheets in which such amounts are included. The fair values of derivative contracts are presented on a gross basis, even when the derivative instruments are subject to master netting arrangements where Progress Energy nets the fair value of derivative contracts subject to master netting arrangements with the same counterparty on the Condensed Consolidated Balance Sheets. Cash collateral payables and receivables associate with the derivative contracts have not been netted against the fair value amounts.
|  | March 31, 2013 |  | December 31, 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 |  | ― |  |  | 1 |  |  | ― |  |  | 1
Total Derivatives Designated as Hedging Instruments | $ | ― |  | $ | 2 |  | $ | ― |  | $ | 3
Derivatives Not Designated as Hedging Instruments |  |  |  |  |  |  |  |  |  |  |
Commodity contracts |  |  |  |  |  |  |  |  |  |  |
Current assets: other | $ | 13 |  | $ | ― |  | $ | 3 |  | $ | ―
Investments and other assets: other |  | 2 |  |  | ― |  |  | 8 |  |  | ―
Current liabilities: other |  | 20 |  |  | 140 |  |  | ― |  |  | 231
Deferred credits and other liabilities: other |  | 12 |  |  | 159 |  |  | ― |  |  | 195
Interest rate contracts |  |  |  |  |  |  |  |  |  |  |
Current liabilities: other |  | ― |  |  | ― |  |  | ― |  |  | 11
Total Derivatives Not Designated as Hedging Instruments | $ | 47 |  | $ | 299 |  | $ | 11 |  | $ | 437
Total Derivatives | $ | 47 |  | $ | 301 |  | $ | 11 |  | $ | 440
The tables below show the balance sheet location of the derivative contracts subject to enforceable master netting agreements and include collateral posted to offset the net position. T his disclosure is intended to enable users to evaluate the effect of netting arrangements on Progress E nergy's financial position. The amount shown in the net position column is calculated by counterparty. Most derivatives are entered into with counterparties under enforceable master netting agreement s, or with an ISO such as MISO or PJM. Derivatives entered into wi th a clearinghouse are usually over-collateralized due to the requirement to post initial margin upon entering into contracts The amounts shown as offset are limited by the amount of exposure to a counterparty such that an over collateralized position at one counterparty is not allowed to reduce an under collateralized position at another counterparty. In addition to the amounts shown as offset, in the table, Progress Energy may also have available accounts receivable or accounts payables to offset exposures in the event of bankruptcy.
|  |  | March 31, 2013
(in millions) |  | Gross amounts recognized |  | Gross amounts offset |  | Net amounts included on the Condensed Consolidated Balance Sheet |
Derivative Assets: Current |  |  |  |  |  |  |  |  |  |
Subject to Master Netting |  | $ | 33 |  | $ | 21 |  | $ | 12 | (a)
Derivative Assets: Non-current |  |  |  |  |  |  |  |  |  |
Subject to Master Netting |  |  | 14 |  |  | 12 |  |  | 2 | (b)
Derivative Liabilities: Current |  |  |  |  |  |  |  |  |  |
Subject to Master Netting |  |  | 141 |  |  | 34 |  |  | 107 | (c)
Derivative Liabilities: Non-current |  |  |  |  |  |  |  |  |  |
Subject to Master Netting |  |  | 156 |  |  | 34 |  |  | 122 |
Not Subject to Master Netting |  |  | 4 |  |  | ― |  |  | 4 |
Total Derivative Liabilities: Non-current |  |  | 160 |  |  | 34 |  |  | 126 | (d)
|  |  | December 31, 2012
(in millions) |  | Gross amounts recognized |  | Gross amounts offset |  | Net amounts included on the Condensed Consolidated Balance Sheet |
Derivative Assets: Current |  |  |  |  |  |  |  |  |  |
Subject to Master Netting |  | $ | 3 |  | $ | ― |  | $ | 3 | (a)
Derivative Assets: Non-current |  |  |  |  |  |  |  |  |  |
Subject to Master Netting |  |  | 8 |  |  | ― |  |  | 8 | (b)
Derivative Liabilities: Current |  |  |  |  |  |  |  |  |  |
Subject to Master Netting |  |  | 244 |  |  | 22 |  |  | 222 | (c)
Derivative Liabilities: Non-current |  |  |  |  |  |  |  |  |  |
Subject to Master Netting |  |  | 192 |  |  | 36 |  |  | 156 |
Not Subject to Master Netting |  |  | 4 |  |  | ― |  |  | 4 |
Total Derivative Liabilities: Non-current |  |  | 196 |  |  | 36 |  |  | 160 | (d)
(a) | Included in Other within Current Assets on the Condensed Consolidated Balance Sheet.
(b) | Included in Other within Investments and Other Assets on the Condensed Consolidated Balance Sheet.
(c) | Included in Other within Current Liabilities on the Condensed Consolidated Balance Sheet.
(d) | Included in Other within Deferred Credits and Other Liabilities on the Condensed Consolidated Balance Sheet.
The following table shows the amount of gains and losses recognized on derivative instruments designated and qualifying as cash flow hedges by type of derivative contract, and the Condensed Consolidated Statements of Operations and Comprehensive Income line items in which such gains and losses are included when reclassified from AOCI.
|  | Three Months Ended March 31,
(in millions) | 2013 |  | 2012
Pre-tax Gains (Losses) Recorded in AOCI |  |  |  |  |
Commodity contracts | $ | 1 |  | $ | ―
Interest rate contracts |  | ― |  |  | 4
Total Pre-tax Gains (Losses) Recorded in AOCI | $ | 1 |  | $ | 4
Location of Pre-tax Gains and (Losses) Reclassified from AOCI into Earnings(a) |  |  |  |  |
Interest rate contracts(b) |  |  |  |  |
Interest expense | $ | ― |  | $ | (4)
Total Pre-tax Gains (Losses) Reclassified from AOCI into Earnings | $ | ― |  | $ | (4)
(a) | Represents the gains and losses on cash flow hedges previously recorded in AOCI during the term of the hedging relationships and reclassified into earnings during the current period.
(b) | Amounts in AOCI related to terminated hedges are reclassified to earnings as the interest expense is recorded. The effective portion of the hedges will be amortized to interest expense over the term of the related debt.
At March 31, 2013, and 2012 $6 8 million and $226 million, respectively of pre-tax deferred net losses on derivative instruments related to interest rate cash flow hedges were included as a component of AOCI and a $5 millio n pre-tax loss is expected to be recognized in earnings during the next 12 months as the hedged transactions occur. The following tables show the amount of pre-tax gains and losses recognized on undesignated contracts by type of derivative instrument, and the line items in the Consolidated Statements of Operations and Comprehensive Income in which such gains and losses are included or deferred on the consolidated Balance Sheets as regulatory assets or liabilities.
|  | Three Months Ended March 31,
(in millions) | 2013 |  | 2012
Location of Pre-tax Gains and (Losses) Recognized in Earnings |  |  |  |  |
Commodity contracts |  |  |  |  |
Revenue, regulated electric | $ | 6 |  | $ | ―
Fuel used in electric generation and purchased power - regulated(a) |  | (52) |  |  | (105)
Other income and expenses, net |  | ― |  |  | 8
Interest rate contracts |  |  |  |  |
Interest expense |  | (4) |  |  | ―
Total Pre-tax (Losses) Gains Recognized in Earnings | $ | (50) |  | $ | (97)
Location of Pre-tax Gains and (Losses) Recognized as Regulatory Assets or Liabilities |  |  |  |  |
Commodity contracts(c) |  |  |  |  |
Regulatory asset | $ | 105 |  | $ | (206)
Interest rate contracts(b) |  |  |  |  |
Regulatory asset |  | 5 |  |  | ―
Total Pre-tax Gains (Losses) Recognized as Regulatory Assets of Liabilities | $ | 110 |  | $ | (206)
(a) | After the settlement of the derivatives and the consumption of the fuel, gains or losses are passed through the fuel cost-recovery clause.
(b) | Amounts in regulatory assets and liabilities related to terminated hedges are reclassified to earnings as the interest expense is recorded. The hedges will be amortized to interest expense over the term of the related debt.
(c) | Amounts are recorded as regulatory assets and liabilities in the Condensed Consolidated Balance Sheets until gains or losses are passed through the fuel cost-recovery clause.
DUKE ENERGY PROGRESS The following tables show fair value amounts of derivative contracts, and the line items in the Condensed Consolidated Balance Sheets in which such amounts are included. The fair values of derivative contracts are presented on a gross basis, even when the derivative instruments are subject to master netting arrangements where Duke Energy Progress nets the fair value of derivative cont r acts subject to master netting arrangements with the same counterparty on the Condensed Consolidated Balance Sheets. Cash collateral payables and receivables associated with the derivative contracts have not been netted against the fair value amounts.
|  | March 31, 2013 |  | December 31, 2012
(in millions) | Asset |  | Liability |  | Asset |  | Liability
Derivatives Designated as Hedging Instruments |  |  |  |  |  |  |  |  |  |  |
Commodity contracts |  |  |  |  |  |  |  |  |  |  |
Current liabilities: other | $ | ― |  | $ | 1 |  | $ | ― |  |  | 1
Deferred credits and other liabilities: other |  | ― |  |  | 1 |  |  | ― |  |  | 1
Total Derivatives Designated as Hedging Instruments | $ | ― |  | $ | 2 |  | $ | ― |  | $ | 2
Derivatives Not Designated as Hedging Instruments |  |  |  |  |  |  |  |  |  |  |
Commodity contracts(a) |  |  |  |  |  |  |  |  |  |  |
Current assets: other | $ | 4 |  | $ | ― |  | $ | 1 |  | $ | ―
Investments and other assets: other |  | ― |  |  | ― |  |  | 1 |  |  | ―
Current liabilities: other |  | 8 |  |  | 52 |  |  | ― |  |  | 85
Deferred credits and other liabilities: other |  | 2 |  |  | 54 |  |  | ― |  |  | 68
Interest rate contracts |  |  |  |  |  |  |  |  |  |  |
Current liabilities: other |  | ― |  |  | ― |  |  | ― |  |  | 11
Total Derivatives Not Designated as Hedging Instruments | $ | 14 |  | $ | 106 |  | $ | 2 |  | $ | 164
Total Derivatives | $ | 14 |  | $ | 108 |  | $ | 2 |  | $ | 166
(a) | Substantially all of these contracts receive regulatory treatment.
The tables below show the balance sheet location of the derivative contracts subject to enforceable master netting agreements and include collateral posted to offset the net position. T his disclosure is intended to enable users to evaluate the effect of netting arrangements on Duke Energy Progress' financial position. The amount shown in the net position column is calculated by counterparty. Most derivatives are entered into with counterparties under enforceable master netting agreement s, or with an ISO such as MISO or PJM. Derivatives entered into wi th a clearinghouse are usually over-collateralized due to the requirement to post initial margin upon entering into contracts. The amounts shown as offset are limited by the amount of exposure to a counterparty such that an over collateralized position at one counterparty is not allowed to reduce an under collateralized position at another counterparty. In addition to the amounts shown as offset, in the table, Duke Energy Progress may also have available accounts receivable or accounts payable to offset exposures in the events of bankruptcy.
|  |  | March 31, 2013
(in millions) |  | Gross amounts recognized |  | Gross amounts offset |  | Net amounts included on the Condensed Consolidated Balance Sheet |
Derivative Assets: Current |  |  |  |  |  |  |  |  |  |
Subject to Master Netting |  | $ | 12 |  | $ | 8 |  | $ | 4 | (a)
Derivative Assets: Non-current |  |  |  |  |  |  |  |  |  |
Subject to Master Netting |  |  | 2 |  |  | 2 |  |  | ― | (b)
Derivative Liabilities: Current |  |  |  |  |  |  |  |  |  |
Subject to Master Netting |  |  | 53 |  |  | 8 |  |  | 45 | (c)
Derivative Liabilities: Non-current |  |  |  |  |  |  |  |  |  |
Subject to Master Netting |  |  | 55 |  |  | 5 |  |  | 50 | (d)
|  |  | December 31, 2012
(in millions) |  | Gross amounts recognized |  | Gross amounts offset |  | Net amounts included on the Condensed Consolidated Balance Sheet |
Derivative Assets: Current |  |  |  |  |  |  |  |  |  |
Subject to Master Netting |  | $ | 1 |  | $ | ― |  | $ | 1 | (a)
Derivative Assets: Non-current |  |  |  |  |  |  |  |  |  |
Subject to Master Netting |  |  | 1 |  |  | ― |  |  | 1 | (b)
Derivative Liabilities: Current |  |  |  |  |  |  |  |  |  |
Subject to Master Netting |  |  | 97 |  |  | 2 |  |  | 95 | (c)
Derivative Liabilities: Non-current |  |  |  |  |  |  |  |  |  |
Subject to Master Netting |  |  | 69 |  |  | 7 |  |  | 62 | (d)
(a) | Included in Other within Current Assets on the Condensed Consolidated Balance Sheet.
(b) | Included in Other within Investments and Other Assets on the Condensed Consolidated Balance Sheet.
(c) | Included in Other within Current Liabilities on the Condensed Consolidated Balance Sheet.
(d) | Included in Other within Deferred Credits and Other Liabilities on the Condensed Consolidated Balance Sheet.
The following table shows the amount of gains and losses recognized on derivative instruments designated and qualifying as cash flow hedges by type of derivative contract, and the Condensed Consolidated Statements of Operations and Comprehensive Income line items in which such gains and losses are included when reclassified from AOCI.
|  | Three Months Ended March 31,
(in millions) | 2013 |  | 2012
Pre-tax Gains (Losses) Recorded in AOCI |  |  |  |  |
Interest rate contracts(b) | $ | ― |  | $ | 5
Total Pre-tax Gains (Losses) Recorded in AOCI | $ | ― |  | $ | 5
Location of Pre-tax Gains and (Losses) Reclassified from AOCI into Earnings(a) |  |  |  |  |
Interest rate contracts(b) |  |  |  |  |
Interest expense | $ | ― |  | $ | (3)
Total Pre-tax Gains (Losses) Reclassified from AOCI into Earnings | $ | ― |  | $ | (3)
(a) | Represents the gains and losses on cash flow hedges previously recorded in AOCI during the term of the hedging relationships and reclassified into earnings during the current period
(b) | Amounts in AOCI related to terminated hedges are reclassified to earnings as the interest expense is recorded. The effective portion of the hedges will be amortized to interest expense over the term of the related debt.
At March 31, 2012, $1 09 million of pre-tax deferred net losses on derivative instruments related to interest rate cash flow hedges were included as a component of AOCI. The following tables show the amount of pre-tax gains and losses recognized on undesignated contracts by type of derivative instrument and the line items in the Condensed Consolidated Statements of Operations and Comprehensive Income in which such gains and losses are included or deferred on the Condensed Consolidated Balance Sheets as regulatory assets or liabilities.
|  | Three Months Ended March 31,
(in millions) | 2013 |  | 2012
Location of Pre-tax Gains and (Losses) Recognized in Earnings |  |  |  |  |
Commodity contracts |  |  |  |  |
Revenue, regulated electric | $ | 6 |  | $ | ―
Fuel used in electric generation and purchased power -regulated(a) |  | (17) |  |  | (26)
Interest rate contracts |  |  |  |  |
Interest expense |  | (3) |  |  | ―
Total Pre-tax (Losses) Gains Recognized in Earnings | $ | (14) |  | $ | (26)
Location of Pre-tax Gains and (Losses) Recognized as Regulatory Assets or Liabilities |  |  |  |  |
Commodity contracts(c) |  |  |  |  |
Regulatory asset | $ | 36 |  | $ | (59)
Interest rate contracts(b) |  |  |  |  |
Regulatory asset |  | 3 |  |  | ―
Total Pre-tax Gains (Losses) Recognized as Regulatory Assets of Liabilities | $ | 39 |  | $ | (59)
(a) | After the settlement of the derivatives and the consumption of fuel, gains or losses are passed through the fuel cost-recovery clause.
(b) | Amounts in regulatory assets and liabilities related to terminated hedges are reclassified to earnings as the interest expense is recorded. The hedges will be amortized to interest expense over the term of the related debt.
(c) | Amounts are recorded in regulatory assets and liabilities in the Condensed Consolidated Balance Sheets until gains or losses are passed through the fuel cost-recovery clause.
DUKE ENERGY FLORIDA The following tables show fair value amounts of derivative contracts, and the line items in the Condensed Balance Sheets in which such amounts are included. The fair value of derivative contracts are presented on a gross basis, even when the derivative instruments are subject to master netting arrangements where Duke Energy Florida nets the fair value of derivative contracts subject to master netting arrangements with the same counterparty on the Condensed Balance Sheets. Cash collateral payables and receivables associated with the derivative contracts have not been netted against the fair value amounts.
|  | March 31, 2013 |  | December 31, 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 | $ | 8 |  | $ | ― |  | $ | 2 |  | $ | ―
Investments and Other Assets: Other |  | 2 |  |  | ― |  |  | 7 |  |  | ―
Current liabilities: other |  | 13 |  |  | 89 |  |  | ― |  |  | 146
Deferred credits and other liabilities: other |  | 10 |  |  | 101 |  |  | ― |  |  | 123
Total Derivatives Not Designated as Hedging Instruments | $ | 33 |  | $ | 190 |  | $ | 9 |  | $ | 269
Total Derivatives | $ | 33 |  | $ | 190 |  | $ | 9 |  | $ | 270
(a) | Substantially all of these contracts receive regulatory treatment.
The tables below show the balance sheet location of the derivative contracts subject to enforceable master netting agreements and include collateral posted to offset the net position. T his disclosure is intended to enable users to evaluate the effect of netting arrangements on Duke Energy Florida's financial position. The amount shown in the net position column is calculated by counterparty. Most derivatives are entered into with counterparties under enforceable master netting agreement s, or with an ISO such as MISO or PJM. Derivatives entered into wi th a clearinghouse are usually over-collateralized due to the requirement to post initial margin upon entering into contracts. The amounts shown as offset are limited by the amount of exposure to a counterparty such that an over collateralized position at one counterparty is not allowed to reduce an under collateralized position at another counterparty. In addition to the amounts offset, in the table, Duke Energy Florida may also have available accounts receivable or accounts payable to offset exposures in the event of bankruptcy.
|  |  | March 31, 2013
(in millions) |  | Gross amounts recognized |  | Gross amounts offset |  | Net amounts included on Condensed Balance Sheet |
Derivative Assets: Current |  |  |  |  |  |  |  |  |  |
Subject to Master Netting |  | $ | 21 |  | $ | 13 |  | $ | 8 | (a)
Derivative Assets: Non-current |  |  |  |  |  |  |  |  |  |
Subject to Master Netting |  |  | 12 |  |  | 10 |  |  | 2 | (b)
Derivative Liabilities: Current |  |  |  |  |  |  |  |  |  |
Subject to Master Netting |  |  | 89 |  |  | 26 |  |  | 63 | (c)
Derivative Liabilities: Non-current |  |  |  |  |  |  |  |  |  |
Subject to Master Netting |  |  | 101 |  |  | 29 |  |  | 72 | (d)
|  |  | December 31, 2012
(in millions) |  | Gross amounts recognized |  | Gross amounts offset |  | Net amounts included on Condensed Balance Sheet |
Derivative Assets: Current |  |  |  |  |  |  |  |  |  |
Subject to Master Netting |  | $ | 2 |  | $ | ― |  | $ | 2 | (a)
Derivative Assets: Non-current |  |  |  |  |  |  |  |  |  |
Subject to Master Netting |  |  | 7 |  |  | ― |  |  | 7 | (b)
Derivative Liabilities: Current |  |  |  |  |  |  |  |  |  |
Subject to Master Netting |  |  | 147 |  |  | 20 |  |  | 127 | (c)
Derivative Liabilities: Non-current |  |  |  |  |  |  |  |  |  |
Subject to Master Netting |  |  | 123 |  |  | 29 |  |  | 94 | (d)
(a) | Included in Other within Current Assets on the Condensed Balance Sheet.
(b) | Included in Other within Investments and Other Assets on the Condensed Balance Sheet.
(c) | Included in Other within Current Liabilities on the Condensed Balance Sheet.
(d) | Included in Other within Deferred Credits and Other Liabilities on the Condensed Balance Sheet.
There were insignificant gains on cash flow hedges recorded or reclassified at Duke Energy Florida for the three months ended March 31, 2013 and 2012, respectively. At March 31, 2012, $42 million of pre-tax deferred net losses on derivative instruments related to outstanding interest rate cash flow hedges that were included as a component of AOCI. The following tables show the amount of pre-tax gains and losses recognized on undesignated contracts by type of derivative instrument and the line items in the Condensed Consolidated Statements of Operations and Comprehensive Income in which such gains and losses are included or deferred on the Condensed Consolidated Balance Sheets as r egulatory assets or liabilities.
|  | Three Months Ended March 31,
(in millions) | 2013 |  | 2012
Location of Pre-tax Gains and (Losses) Recognized in Earnings |  |  |  |  |
Commodity contracts |  |  |  |  |
Fuel used in electric generation and purchased power - regulated(a) | $ | (35) |  | $ | (79)
Interest rate contracts |  |  |  |  |
Interest expense |  | (1) |  |  | ―
Total Pre-tax (Losses) Gains Recognized in Earnings | $ | (36) |  | $ | (79)
Location of Pre-tax Gains and (Losses) Recognized as Regulatory Assets or Liabilities |  |  |  |  |
Commodity contracts(b) |  |  |  |  |
Regulatory asset | $ | 69 |  | $ | (147)
Interest rate contracts |  |  |  |  |
Regulatory asset |  | 1 |  |  | ―
Total Pre-tax Gains (Losses) Recognized as Regulatory Assets of Liabilities | $ | 70 |  | $ | (147)
(a) | After the settlement of the derivatives and the consumption of fuel, gains or losses are passed through the fuel cost-recovery clause.
(b) | Amounts are recorded in regulatory assets and liabilities in the Condensed Balance Sheets until gains or losses are passed through the fuel cost-recovery clause.
DUKE ENERGY OHIO The following tables show fair value amounts of derivative contracts, and the line items in the Condensed Consolidated Balance Sheets in which such amounts are included. The fair values of derivative contracts are presented on a gross basis, even when the derivative instruments are subject to master netting arrangements where Duke Energy Ohio nets the fair value of derivative contracts subject to master netting arrangements with the same counterparty on the Condensed Consolidated Balance Sheets. Cash collateral payables and receivables associated with the derivative contracts have not been netted against the fair value amounts.
|  | March 31, 2013 |  | December 31, 2012
(in millions) | Asset |  | Liability |  | Asset |  | Liability
Derivatives Designated as Hedging Instruments |  |  |  |  |  |  |  |  |  |  |
Interest rate contracts |  |  |  |  |  |  |  |  |  |  |
Current assets: other | $ | 2 |  | $ | ― |  | $ | 2 |  | $ | ―
Total Derivatives Designated as Hedging Instruments | $ | 2 |  | $ | ― |  | $ | 2 |  | $ | ―
Derivatives Not Designated as Hedging Instruments |  |  |  |  |  |  |  |  |  |  |
Commodity contracts |  |  |  |  |  |  |  |  |  |  |
Current assets: other | $ | 42 |  | $ | 32 |  | $ | 31 |  | $ | 4
Investments and other assets: other |  | 13 |  |  | 7 |  |  | 81 |  |  | 51
Current liabilities: other |  | 130 |  |  | 182 |  |  | 106 |  |  | 132
Deferred credits and other liabilities: other |  | 57 |  |  | 91 |  |  | ― |  |  | 4
Interest rate contracts |  |  |  |  |  |  |  |  |  |  |
Current liabilities: other |  | ― |  |  | 1 |  |  | ― |  |  | 1
Deferred credits and other liabilities: other |  | ― |  |  | 6 |  |  | ― |  |  | 7
Total Derivatives Not Designated as Hedging Instruments | $ | 242 |  | $ | 319 |  | $ | 218 |  | $ | 199
Total Derivatives | $ | 244 |  | $ | 319 |  | $ | 220 |  | $ | 199
The tables below show the balance sheet location of the derivative contracts subject to enforceable master netting agreements and include collateral posted to offset the net position. T his disclosure is intended to enable users to evaluate the effect of netting arrangements on Duke Energy Ohio's financial position. The amount shown in the net position column is calculated by counterparty. Most derivatives are entered into with counterparties under enforceable master netting agreement s, or with an ISO such as MISO or PJM. Derivatives entered into wi th a clearinghouse are usually over-collateralized due to the requirement to post initial margin upon entering into contracts. The amounts shown as offset are limited by the amount of exposure to a counterparty such that an over collateralized position at one counterparty is not allowed to reduce an under collateralized position at another counterparty. In addition to the amounts shown as offset, in the table, Duke Energy Ohio may also have available accounts receivable or accounts payable to offset exposures in the event of bankruptcy.
|  |  | March 31, 2013
(in millions) |  | Gross amounts recognized |  | Gross amounts offset |  | Net amounts included on the Condensed Consolidated Balance Sheet |
Derivative Assets: Current |  |  |  |  |  |  |  |  |  |
Subject to Master Netting |  | $ | 172 |  | $ | 163 |  | $ | 9 |
Not Subject to Master Netting |  |  | 2 |  |  | ― |  |  | 2 |
Total Derivative Assets: Current |  |  | 174 |  |  | 163 |  |  | 11 | (a)
Derivative Assets: Non-current |  |  |  |  |  |  |  |  |  |
Subject to Master Netting |  |  | 70 |  |  | 63 |  |  | 7 | (b)
Derivative Liabilities: Current |  |  |  |  |  |  |  |  |  |
Subject to Master Netting |  |  | 214 |  |  | 209 |  |  | 5 |
Not Subject to Master Netting |  |  | 1 |  |  | ― |  |  | 1 |
Total Derivative Liabilities: Current |  |  | 215 |  |  | 209 |  |  | 6 | (c)
Derivative Liabilities: Non-current |  |  |  |  |  |  |  |  |  |
Subject to Master Netting |  |  | 98 |  |  | 90 |  |  | 8 |
Not Subject to Master Netting |  |  | 6 |  |  | ― |  |  | 6 |
Total Derivative Liabilities: Non-current |  |  | 104 |  |  | 90 |  |  | 14 | (d)
|  |  | December 31, 2012
(in millions) |  | Gross amounts recognized |  | Gross amounts offset |  | Net amounts included on the Condensed Consolidated Balance Sheet |
Derivative Assets: Current |  |  |  |  |  |  |  |  |  |
Subject to Master Netting |  | $ | 137 |  | $ | 110 |  | $ | 27 |
Not Subject to Master Netting |  |  | 2 |  |  | ― |  |  | 2 |
Total Derivative Assets: Current |  |  | 139 |  |  | 110 |  |  | 29 | (a)
Derivative Assets: Non-current |  |  |  |  |  |  |  |  |  |
Subject to Master Netting |  |  | 81 |  |  | 51 |  |  | 30 | (b)
Derivative Liabilities: Current |  |  |  |  |  |  |  |  |  |
Subject to Master Netting |  |  | 136 |  |  | 125 |  |  | 11 |
Not Subject to Master Netting |  |  | 1 |  |  | ― |  |  | 1 |
Total Derivative Liabilities: Current |  |  | 137 |  |  | 125 |  |  | 12 | (c)
Derivative Liabilities: Non-current |  |  |  |  |  |  |  |  |  |
Subject to Master Netting |  |  | 55 |  |  | 51 |  |  | 4 |
Not Subject to Master Netting |  |  | 7 |  |  | ― |  |  | 7 |
Total Derivative Liabilities: Non-current |  |  | 62 |  |  | 51 |  |  | 11 | (d)
(a) | Included in Other within Current Assets on the Condensed Consolidated Balance Sheet.
(b) | Included in Other within Investments and Other Assets on the Condensed Consolidated Balance Sheet.
(c) | Included in Other within Current Liabilities on the Condensed Consolidated Balance Sheet.
(d) | Included in Other within Deferred Credits and Other Liabilities on the Condensed Consolidated Balance Sheet.
There were no gains or losses on cash flow hedges recorded or reclassified at Duke Energy Ohio for the three months ended March 31, 2013 and 2012, respectively. At March 31, 2013, there were no pre-tax deferred net gains or losses on derivative instruments relate d to cash flow hedges remaining in AOCI for Duke Energy Ohio. The following tables show the amount of the pre-tax gains and losses recognized on undesignated contracts by type of derivative instrument, and the line items in the Condensed Consolidated Statements of Operations and Comprehensive Income in which such gains and losses are included or deferred on the Condensed Consolidated Balance Sheets as regulatory assets or liabilities.
|  | Three Months Ended March 31,
(in millions) | 2013 |  | 2012
Location of Pre-tax Gains and (Losses) Recognized in Earnings |  |  |  |  |
Commodity contracts |  |  |  |  |
Revenue, nonregulated electric, natural gas and other | $ | (91) |  | $ | 71
Fuel used in electric generation and purchased power - nonregulated |  | (7) |  |  | ―
Total Pre-tax (Losses) Gains Recognized in Earnings | $ | (98) |  | $ | 71
Location of Pre-tax Gains and (Losses) Recognized as Regulatory Assets or Liabilities |  |  |  |  |
Commodity contracts |  |  |  |  |
Regulatory asset | $ | ― |  | $ | (2)
Interest rate contracts |  |  |  |  |
Regulatory asset |  | 1 |  |  | 1
Total Pre-tax Gains (Losses) Recognized as Regulatory Assets of Liabilities | $ | 1 |  | $ | (1)
DUKE ENERGY INDIANA The following tables show fair value amounts of derivative contracts, and the line items in the Condensed Consolidated Balance Sheets in which such amounts are included. The fair values of derivative contracts are presented on a gross basis, even when the derivative instruments are subject to master netting arrangements where Duke Energy Indiana nets the fair value of derivative contracts subject to master netting arrangements with the same counterparty on the Condensed Consolidated Balance Sheets. Cash collateral payables and receivables associated with the derivative contracts have not been netted against the fair value amounts.
|  | March 31, 2013 |  | December 31, 2012
(in millions) | Asset |  | Liability |  | Asset |  | Liability
Derivatives Not Designated as Hedging Instruments |  |  |  |  |  |  |  |  |  |  |
Commodity contracts |  |  |  |  |  |  |  |  |  |  |
Current assets: other | $ | 5 |  | $ | ― |  | $ | 10 |  | $ | ―
Interest rate contracts |  |  |  |  |  |  |  |  |  |  |
Current liabilities: other |  | ― |  |  | 55 |  |  | ― |  |  | 63
Total Derivatives Not Designated as Hedging Instruments | $ | 5 |  | $ | 55 |  | $ | 10 |  | $ | 63
Total Derivatives | $ | 5 |  | $ | 55 |  | $ | 10 |  | $ | 63
The tables below show the balance sheet location of the derivative contracts subject to enforceable master netting agreements and include collateral posted to offset the net position. T his disclosure is intended to enable users to evaluate the effect of netting arrangements on Duke Energy Indiana's financial position. The amount shown in the net position column is calculated by counterparty. Most derivatives are entered into with counterparties under enforceable master netting agreement s, or with an ISO such as MISO or PJM. Derivatives entered into wi th a clearinghouse are usually over-collateralized due to the requirement to post initial margin upon entering into contracts. The amounts shown as offset are limited by the amount of exposure to a counterparty such that an over collateralized position at one counterparty is not allowed to reduce an under collateralized position at another counterparty. In addition to the amounts shown as offset, in the table, Duke Energy Indiana may also have available accounts receivable or accounts payable to offset exposures in the event of bankruptcy.
|  |  | March 31, 2013
(in millions) |  | Gross amounts recognized |  | Gross amounts offset |  | Net amounts included on the Condensed Consolidated Balance Sheets |
Derivative Assets: Current |  |  |  |  |  |  |  |  |  |
Subject to Master Netting |  | $ | 5 |  | $ | ― |  | $ | 5 | (a)
Derivative Liabilities: Current |  |  |  |  |  |  |  |  |  |
Not Subject to Master Netting |  |  | 55 |  |  | ― |  |  | 55 | (b)
|  |  | December 31, 2012
(in millions) |  | Gross amounts recognized |  | Gross amounts offset |  | Net amounts included on the Condensed Consolidated Balance Sheets |
Derivative Assets: Current |  |  |  |  |  |  |  |  |  |
Subject to Master Netting |  | $ | 10 |  | $ | ― |  | $ | 10 | (a)
Derivative Liabilities: Current |  |  |  |  |  |  |  |  |  |
Not Subject to Master Netting |  |  | 63 |  |  | ― |  |  | 63 | (b)
(a) | Included in Other within Current Assets on the Condensed Consolidated Balance Sheet.
(b) | Included in Other within Current Liabilities on the Condensed Consolidated Balance Sheet.
There were insignificant gains on cash flow hedges reclassified at Duke Energy Indiana for the three months ended March 31, 2013 and 2012, respectively. T here were no pre-tax deferred net gains or losses on derivative instruments related to cash flow hedges remaining in AOCI for Duke Energy Indiana at March 31, 2013, and 2012, respectively. The following tables show the amount of the pre-tax gains and losses recognized on undesignated contracts by type of derivative instrument and line items in the Condensed Consolidated Statements of Operations and Comprehensive Income in which such gain s and losses are included or deferred on the Condensed Consolidated Balance Sheets as regulatory assets or liabilities.
|  | Three Months Ended March 31,
(in millions) | 2013 |  | 2012
Location of Pre-tax Gains and (Losses) Recognized as Regulatory Assets or Liabilities |  |  |  |  |
Commodity contracts |  |  |  |  |
Regulatory liability | $ | 4 |  | $ | 4
Interest rate contracts |  |  |  |  |
Regulatory asset |  | 8 |  |  | 21
Total Pre-tax Gains (Losses) Recognized as Regulatory Assets of Liabilities | $ | 12 |  | $ | 25
CREDIT RISK Certain derivative contracts of the Duke Energy Registrants contain contingent credit features, such as material adverse change clauses or payment acceleration clauses that could result in immediate payments, the posting of letters of credit or the termination of the derivative contract before maturity if specific events occur, such as a credit rating downgrade below investment grade. The following table shows information with respect to derivative contracts that are in a net liability position and contain objective credit-risk related payment provisions. The amounts disclosed in the table below represent the aggregate fair value amounts of such derivative instruments at the end of the reporting period, the aggregate fair value of assets that are already posted as collateral under such derivative instruments at the end of the reporting period, and the aggregate fair value of additional assets that would be required to be transferred in the event that credit-risk-related contingent features were triggered.
|  |  | March 31, 2013
(in millions) |  | Duke Energy |  | Progress Energy |  | Duke Energy Progress |  | Duke Energy Florida |  | Duke Energy Ohio
Aggregate fair value amounts of derivative instruments in a net liability position |  | $ | 512 |  | $ | 230 |  | $ | 79 |  | $ | 151 |  | $ | 279
Collateral already posted |  |  | 215 |  |  | 35 |  |  | 3 |  |  | 32 |  |  | 180
Additional cash collateral or letters of credit in the event credit-risk-related contingent features were triggered at the end of the reporting period |  |  | 202 |  |  | 195 |  |  | 76 |  |  | 119 |  |  | 7
|  |  | December 31, 2012
(in millions) |  | Duke Energy |  | Progress Energy |  | Duke Energy Progress |  | Duke Energy Florida |  | Duke Energy Ohio
Aggregate fair value amounts of derivative instruments in a net liability position |  | $ | 466 |  | $ | 286 |  | $ | 108 |  | $ | 178 |  | $ | 176
Collateral already posted |  |  | 163 |  |  | 59 |  |  | 9 |  |  | 50 |  |  | 104
Additional cash collateral or letters of credit in the event credit-risk-related contingent features were triggered at the end of the reporting period |  |  | 230 |  |  | 227 |  |  | 99 |  |  | 128 |  |  | 2
Netting of Cash Collateral and Derivative Assets and Liabilities Under Master Netting Arrangements. In accordance with applicable accounting guidance, the Duke Energy Registrants have elected to offset fair value amounts (or amounts that approximate fair value) recognized on their Condensed Consolidated Balance Sheets related to cash collateral amounts receivable or payable against fair value amounts recognized for derivative instruments executed with the same counterparty under the same master netting agreement. The amounts disclosed in the table below represent the receivables related to the right to reclaim cash collateral and payables related to the obligation to return cash collateral un der master netting arrangements. See Note 9 for additional information on fair value disclosures related to derivatives.
|  | March 31, 2013 |  | December 31, 2012
(in millions) | Receivables |  | Payables |  | Receivables |  | Payables
Duke Energy |  |  |  |  |  |  |  |  |  |  |
Amounts offset against net derivative positions | $ | 107 |  | $ | ― |  | $ | 73 |  | $ | ―
Amounts not offset against net derivative positions |  | 108 |  |  | ― |  |  | 93 |  |  | ―
Progress Energy |  |  |  |  |  |  |  |  |  |  |
Amounts offset against net derivative positions |  | 35 |  |  | ― |  |  | 58 |  |  | ―
Amounts not offset against net derivative positions |  | ― |  |  | ― |  |  | 1 |  |  | ―
Duke Energy Progress |  |  |  |  |  |  |  |  |  |  |
Amounts offset against net derivative positions |  | 3 |  |  | ― |  |  | 9 |  |  | ―
Amounts not offset against net derivative positions |  | ― |  |  | ― |  |  | ― |  |  | ―
Duke Energy Florida |  |  |  |  |  |  |  |  |  |  |
Amounts offset against net derivative positions |  | 32 |  |  | ― |  |  | 49 |  |  | ―
Amounts not offset against net derivative positions |  | ― |  |  | ― |  |  | 1 |  |  | ―
Duke Energy Ohio |  |  |  |  |  |  |  |  |  |  |
Amounts offset against net derivative positions |  | 72 |  |  | ― |  |  | 15 |  |  | ―
Amounts not offset against net derivative positions | $ | 108 |  | $ | ― |  | $ | 92 |  | $ | ―

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- Definition The entire disclosure for the entity's entire derivative instruments and hedging activities. 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