Fair Value (Tables)

12 Months Ended

Dec. 31, 2017

Significant unobservable inputs, recurring

The following table summarizes the significant unobservable inputs used for the Level 3 derivative assets (liabilities) as of December 31, 2017 (in millions, except range amounts):



Type of Derivative	Fair Value			Unobservable Input	Amount or Range (Weighted Average)
Interest rate	$	(151	)	Subsidiaries’ credit spreads	1.9% - 5.1% (4.9%)
Foreign currency:
Argentine peso	240			Argentine peso to U.S. dollar currency exchange rate after one year⁽¹⁾	22.8 - 52.3 (36.6)
Commodity:
Other	4
Total	$	93

Derivatives Level 3 Rollforward Table

The following tables present a reconciliation of net derivative assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the years ended December 31, 2017 and 2016 (presented net by type of derivative in millions). Transfers between Level 3 and Level 2 are determined as of the end of the reporting period and principally result from changes in the significance of unobservable inputs used to calculate the credit valuation adjustment.



Year Ended December 31, 2017	Interest Rate			Foreign Currency			Commodity			Total
Balance at January 1	$	(179	)	$	255		$	5		$	81
Total realized and unrealized gains (losses):
Included in earnings	(1		)	21			1			21
Included in other comprehensive income — derivative activity	(23		)	—			—			(23		)
Included in regulatory liabilities	—			—			10			10
Settlements	36			(36		)	(12		)	(12		)
Transfers of liabilities into Level 3	(4		)	—			—			(4		)
Transfers of liabilities out of Level 3	20			—			—			20
Balance at December 31	$	(151	)	$	240		$	4		$	93
Total gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to assets and liabilities held at the end of the period	$	7		$	(15	)	$	1		$	(7	)



Year Ended December 31, 2016	Interest Rate			Foreign Currency			Commodity			Total
Balance at January 1	$	(304	)	$	277		$	3		$	(24	)
Total realized and unrealized gains (losses):
Included in earnings	—			31			2			33
Included in other comprehensive income — derivative activity	(36		)	6			—			(30		)
Included in other comprehensive income — foreign currency translation activity	3			(52		)	—			(49		)
Included in regulatory liabilities	—			—			11			11
Settlements	72			(22		)	(11		)	39
Transfers of liabilities into Level 3	(32		)	—			—			(32		)
Transfers of assets out of Level 3	118			15			—			133
Balance at December 31	$	(179	)	$	255		$	5		$	81
Total gains for the period included in earnings attributable to the change in unrealized gains (losses) relating to assets and liabilities held at the end of the period	$	6		$	16		$	2		$	24

Financial instruments not measured at fair value in the condensed consolidated balance sheets

The following table presents (in millions) the carrying amount, fair value and fair value hierarchy of the Company's financial assets and liabilities that are not measured at fair value in the Consolidated Balance Sheets as of the periods indicated, but for which fair value is disclosed.



		December 31, 2017
		Carrying Amount		Fair Value
		Carrying Amount		Total		Level 1		Level 2		Level 3
Assets:	Accounts receivable — noncurrent ⁽¹⁾	$	163	$	217	$	—	$	6	$	211
Liabilities:	Non-recourse debt	15,340		15,890		—		13,350		2,540
	Recourse debt	4,630		4,920		—		4,920		—



		December 31, 2016
		Carrying Amount		Fair Value
		Carrying Amount		Total		Level 1		Level 2		Level 3
Assets:	Accounts receivable — noncurrent ⁽¹⁾	$	232	$	342	$	—	$	20	$	322
Liabilities:	Non-recourse debt	14,783		15,185		—		14,140		1,045
	Recourse debt	4,671		4,899		—		4,899		—

_____________________________


⁽¹⁾	These amounts primarily relate to amounts due from CAMMESA, the administrator of the wholesale electricity market in Argentina, and are included in Other noncurrent assets in the accompanying Consolidated Balance Sheets. The fair value and carrying amount of these receivables exclude VAT of $31 million and $24 million as of December 31, 2017 and 2016, respectively.

Significant unobservable inputs, nonrecurring

The following table summarizes the significant unobservable inputs used in the Level 3 measurement of long-lived assets held and used measured on a nonrecurring basis during the year ended December 31, 2017 (in millions, except range amounts):



December 31, 2017	Fair Value		Valuation Technique	Unobservable Input	Range (Weighted Average)
Long-lived assets held and used:
Laurel Mountain	$	33	Discounted cash flow	Annual revenue growth	-30% to 2% (0%)
				Pre-tax operating margin (through remaining life)	61% to 73% (64%)
				Weighted-average cost of capital	9%
Kilroot	20		Discounted cash flow	Annual revenue growth	-85% to 17% (-16%)
				Annual pre-tax operating margin	-32% to 28% (6%)
				Weighted-average cost of capital	8%
DPL	11		Discounted cash flow	Pre-tax operating margin (through remaining life)	10% to 22% (15%)
				Weighted-average cost of capital	7%
Total	$	64

Fair value hierarchy for nonrecurring measurements table

The following table summarizes major categories of assets and liabilities measured at fair value on a nonrecurring basis during the period and their level within the fair value hierarchy (in millions):



Year Ended December 31, 2017	Measurement Date	Carrying Amount₍₁₎		Fair Value						Pre-tax Loss
Assets	Measurement Date	Carrying Amount₍₁₎		Level 1		Level 2		Level 3		Pre-tax Loss
Long-lived assets held and used:⁽²⁾
Laurel Mountain	12/31/2017	$	154	$	—	$	—	$	33	$	121
Kilroot	12/31/2017	69		—		—		20		37
DPL	02/28/2017	77		—		—		11		66
Other	Various	18		—		—		—		18
Dispositions and held-for-sale businesses: ⁽³⁾
DPL Peaker Assets	12/31/2017	346		—		237		—		109
Kazakhstan Hydroelectric ⁽⁴⁾	06/30/2017	190		—		92		—		92
Kazakhstan CHPs	03/31/2017	171		—		29		—		94



Year Ended December 31, 2016	Measurement Date	Carrying Amount₍₁₎		Fair Value						Pre-tax Loss
Assets	Measurement Date	Carrying Amount₍₁₎		Level 1		Level 2		Level 3		Pre-tax Loss
Long-lived assets held and used:⁽²⁾
DPL	12/31/2016	$	787	$	—	$	60	$	103	$	624
Buffalo Gap I	08/31/2016	113		—		—		36		77
DPL	06/30/2016	324		—		—		89		235
Buffalo Gap II	03/31/2016	251		—		—		92		159
Discontinued operations: ⁽³⁾
Sul	06/30/2016	1,581		—		470		—		783

_____________________________


⁽¹⁾	Represents the carrying values at the dates of measurement, before fair value adjustment.


⁽²⁾	See Note 19—Asset Impairment Expense for further information.


⁽³⁾	Per the Company's policy, pre-tax loss is limited to the impairment of long-lived assets. Any additional loss will be recognized on completion of the sale. Upon disposal of Sul, we incurred an additional pre-tax loss on sale of $602 million. See Note 21—Discontinued Operations and Note 22—Held-for-Sale Businesses and Dispositions for further information.


⁽⁴⁾	Per the Company's policy, pre-tax loss is limited to the impairment of long-lived assets. Any additional loss will be recognized on completion of the sale. Upon disposal of Kazakhstan HPPs, we incurred an additional pre-tax loss on disposal of $33 million. See Note 19—Asset Impairment Expense and Note 22—Held-for-Sale Businesses and Dispositions for further information.

The foll

Fair value hierarchy for recurring measurements table

The following table presents, by level within the fair value hierarchy, as described in Note 1—General and Summary of Significant Accounting Policies, the Company's financial assets and liabilities that were measured at fair value on a recurring basis as of the dates indicated (in millions). For the Company's investments in marketable debt and equity securities, the security classes presented are determined based on the nature and risk of the security and are consistent with how the Company manages, monitors and measures its marketable securities:



	December 31, 2017								December 31, 2016
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets
AVAILABLE FOR SALE:
Debt securities:
Unsecured debentures	$	—	$	207	$	—	$	207	$	—	$	205	$	—	$	205
Certificates of deposit	—		153		—		153		—		260		—		260
Government debt securities	—		—		—		—		—		9		—		9
Subtotal	—		360		—		360		—		474		—		474
Equity securities:
Mutual funds	—		52		—		52		—		48		—		48
Subtotal	—		52		—		52		—		48		—		48
Total available for sale	—		412		—		412		—		522		—		522
TRADING:
Equity securities:
Mutual funds	20		—		—		20		16		—		—		16
Total trading	20		—		—		20		16		—		—		16
DERIVATIVES:
Interest rate derivatives	—		15		—		15		—		18		—		18
Cross-currency derivatives	—		29		—		29		—		4		—		4
Foreign currency derivatives	—		29		240		269		—		54		255		309
Commodity derivatives	—		30		5		35		—		38		7		45
Total derivatives — assets	—		103		245		348		—		114		262		376
TOTAL ASSETS	$	20	$	515	$	245	$	780	$	16	$	636	$	262	$	914
Liabilities
DERIVATIVES:
Interest rate derivatives	$	—	$	111	$	151	$	262	$	—	$	121	$	179	$	300
Cross-currency derivatives	—		3		—		3		—		18		—		18
Foreign currency derivatives	—		30		—		30		—		64		—		64
Commodity derivatives	—		19		1		20		—		40		2		42
Total derivatives — liabilities	—		163		152		315		—		243		181		424
TOTAL LIABILITIES	$	—	$	163	$	152	$	315	$	—	$	243	$	181	$	424

Available-for-sale Securities [Table Text Block]

The following table presents gross proceeds from sale of AFS securities for the periods indicated (in millions):



Year Ended December 31,	2017		2016		2015
Gross proceeds from sales of AFS securities	$	1,398	$	1,726	$	1,226

- Definition

Tabular disclosure of available-for-sale securities which includes, but is not limited to, changes in the cost basis and fair value, fair value and gross unrealized gain (loss), fair values by type of security, contractual maturity and classification, amortized cost basis, contracts to acquire securities to be accounted for as available-for-sale, debt maturities, transfers to trading, change in net unrealized holding gain (loss) net of tax, continuous unrealized loss position fair value, aggregate losses qualitative disclosures, other than temporary impairment (OTTI) losses or other disclosures related to available for sale securities.

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