TECO ENERGY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
The following table presents the effect of energy related derivatives on the fuel recovery clause mechanism on the
Consolidated Balance Sheets as of Dec. 31, 2011 and 2010:
(millions)
at Dec. 31, 2011
Balance Sheet
Location
(1)
Fair
Value
Balance Sheet
Location
(1)
Fair
Value
Commodity Contracts:
Natural gas derivatives:
Current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Regulatory liabilities
$0.0
Regulatory assets
$58.4
Long-term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Regulatory liabilities
0.0
Regulatory assets
7.4
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$0.0
$65.8
(millions)
at Dec. 31, 2010
Balance Sheet
Location
(1)
Fair
Value
Balance Sheet
Location
(1)
Fair
Value
Commodity Contracts:
Natural gas derivatives:
Current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Regulatory liabilities
$1.1
Regulatory assets
$27.2
Long-term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Regulatory liabilities
0.0
Regulatory assets
2.6
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$1.1
$29.8
(1) Natural gas derivatives are deferred in accordance with accounting standards for regulated operations and all increases and decreases in the cost of natural gas
supply are passed on to customers with the fuel recovery clause mechanism. As gains and losses are realized in future periods, they will be recorded as fuel
costs in the Consolidated Statements of Income.
Based on the fair value of the instruments at Dec. 31, 2011, net pretax losses of $58.4 million are expected to be reclassified
from regulatory assets or liabilities to the Consolidated Statements of Income within the next twelve months.
The following table presents the effect of hedging instruments on OCI and income for the years ended Dec. 31:
(millions)
Amount of
Gain/(Loss) on
Derivatives
Recognized in
OCI
Location of Gain/(Loss)
Reclassified From AOCI
Into Income
Amount of
Gain/(Loss)
Reclassified
From AOCI
Into Income
Derivatives in Cash Flow Hedging Relationships . . . . . . .
Effective
Portion
(1)
Effective Portion
(1)
2011
Interest rate contracts: . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
0.0
Interest expense
($ 0.7)
Commodity contracts:
Diesel fuel derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.2
Mining related costs
2.7
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
1.2
$
2.0
2010
Interest rate contracts: . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
0.0
Interest expense
($ 1.7)
Commodity contracts:
Diesel fuel derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.6
Mining related costs
(0.8)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
0.6
($ 2.5)
2009
Interest rate contracts: . . . . . . . . . . . . . . . . . . . . . . . . . . .
($
0.3)
Interest expense
($ 2.0)
Commodity contracts:
Diesel fuel derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.8
Mining related costs
(13.3)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
2.5
($ 15.3)
(1) Changes in OCI and AOCI are reported in after-tax dollars.
For derivative instruments that meet cash flow hedge criteria, the effective portion of the gain or loss on the derivative is
reported as a component of OCI and reclassified into earnings in the same period or period during which the hedged transaction
affects earnings. Gains and losses on the derivatives representing either hedge ineffectiveness or hedge components excluded from
the assessment of effectiveness are recognized in current earnings. For the years ended Dec. 31, 2011, 2010 and 2009, all hedges
were effective.
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