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Derivative Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2019

Derivative Instruments And Hedging Activities Disclosure [Abstract]

The table below presents derivative balances by type of financial instrument, if the gross amounts recognized in the Consolidated Balance Sheets were netted with derivative instruments and cash collateral received or paid:

	June 30, 2019								December 31, 2018
	Gross Amounts Not Offset in the Consolidated Balance Sheet								Gross Amounts Not Offset in the Consolidated Balance Sheet
(millions)	Gross Liabilities Presented in the Consolidated Balance Sheet		Financial Instruments		Cash Collateral Paid		Net Amounts		Gross Liabilities Presented in the Consolidated Balance Sheet		Financial Instruments		Cash Collateral Paid		Net Amounts
Interest rate contracts:
Over-the-counter	$	19	$	—	$	19	$	—	$	11	$	—	$	11	$	—
Total derivatives	$	19	$	—	$	19	$	—	$	11	$	—	$	11	$	—

Schedule of Volume of Derivative Activity

The following table presents the volume of derivative activity at June 30, 2019. These volumes are based on open derivative positions and represent the combined absolute value of their long and short positions.

		Current				Noncurrent
Interest rate⁽¹⁾		$	—			$	71,400,000

(1)	^{Maturity is determined based on final settlement period.}

Fair Value of Derivatives

The following tables present the fair values of derivatives and where they are presented in the Consolidated Balance Sheets:

(millions)	Fair Value - Derivatives under Hedge Accounting		Fair Value - Derivatives not under Hedge Accounting		Total Fair Value
At June 30, 2019
Current Liabilities
Interest rate	$	1	$	1	$	2
Total current derivative liabilities⁽¹⁾		1		1		2
Noncurrent Liabilities
Interest rate		11		6		17
Total noncurrent derivative liabilities⁽²⁾		11		6		17
Total derivative liabilities	$	12	$	7	$	19
At December 31, 2018
Current Liabilities
Interest rate	$	1	$	—	$	1
Total current derivative liabilities⁽¹⁾		1		—		1
Noncurrent Liabilities
Interest rate		7		3		10
Total noncurrent derivative liabilities⁽²⁾		7		3		10
Total derivative liabilities	$	8	$	3	$	11

(1)	Current derivative liabilities are presented in other current liabilities in the Consolidated Balance Sheets.

(2)	^{Noncurrent derivative liabilities are presented in other deferred credits and other liabilities in the Consolidated Balance Sheets.}

Derivatives in Cash Flow Hedging Relationships

The following tables present the gains and losses on derivatives, as well as where the associated activity is presented in its Consolidated Balance Sheets and Statements of Comprehensive Income (Loss):

Derivatives in Cash Flow Hedging Relationships

(millions)	Gain (loss) Reclassified from Deferred Accounts into Income			Increase (Decrease) in Derivatives Subject to Regulatory Treatment⁽¹⁾
Three Months Ended June 30, 2019
Derivative type and location of gains (losses):
Interest rate⁽²⁾	$	—		$	—
Total	$	—		$	—
Three Months Ended June 30, 2018
Derivative type and location of gains (losses):
Interest rate⁽²⁾	$	(1	)	$	—
Total	$	(1	)	$	—
Six Months Ended June 30, 2019
Derivative type and location of gains (losses):
Interest rate⁽²⁾	$	—		$	(2	)
Total	$	—		$	(2	)
Six Months Ended June 30, 2018
Derivative type and location of gains (losses):
Interest rate⁽²⁾	$	(1	)	$	2
Total	$	(1	)	$	2

(1)	Represents net derivative activity deferred into and amortized out of regulatory assets/liabilities. Amounts deferred into regulatory assets/ liabilities have no associated effect in the Consolidated Statements of Comprehensive Income (Loss).

(2)	Amounts recorded in DESC’s Consolidated Statements of Comprehensive Income (Loss) are classified in interest charges.

Derivatives Not Designated as Hedging Instruments

(millions)	Increase (Decrease) in Derivatives Subject to Regulatory Treatment⁽¹⁾						Amount of Gain (Loss) Recognized in Income on Derivatives⁽²⁾
Three Months Ended June 30,	2019			2018		Location	2019		2018
Derivative type and location of gains (losses):
Interest rate contracts:						Interest charges	$	—	$	(1	)
						Other income		—		—
Total interest rate contracts	$	(2	)	$	—		$	—	$	(1	)
Six Months Ended June 30,
Derivative type and location of gains (losses):
Interest rate contracts:						Interest charges	$	—	$	(1	)
						Other income		—		115
Total interest rate contracts	$	(3	)	$	65		$	—	$	114

(1)	Represents net derivative activity deferred into and amortized out of regulatory assets/liabilities. Amounts deferred into regulatory assets/liabilities have no associated effect in the Consolidated Statements of Comprehensive Income (Loss).

(2)	^{Includes derivative activity amortized out of regulatory assets/liabilities. Amounts deferred into regulatory assets/liabilities have no associated effect in the Consolidated Statements of Comprehensive Income (Loss).}

Derivative Contracts with Credit Contingent Features

(millions)	June 30, 2019		December 31, 2018
in Net Liability Position
Aggregate fair value of derivatives in net liability position	$	19	$	11
Fair value of collateral already posted		19		11
Additional cash collateral or letters of credit in the event credit-risk-related contingent features were triggered	$	—	$	—

- Definition

Tabular disclosure of credit derivatives which includes information by sellers of credit derivatives, about each credit derivative, or each group of similar credit derivatives, including (a) the nature of the credit derivative - its term, how it arose, the events or circumstances that would require the seller to perform under the credit derivative, and the current status of the payment/performance risk of the credit derivative; (b) the maximum potential amount of future payments (undiscounted) the seller could be required to make under the credit derivative; (c) the current fair value of the credit derivative; and (d) the nature of any recourse provisions under the credit derivative, and any assets held either as collateral or by third parties. A credit derivative is a derivative instrument (1) in which one or more of its underlyings are related to the credit risk of a specified entity (or a group of entities) or an index based on the credit risk of a group of entities and (2) that exposes the seller to potential loss from credit-risk-related events specified in the contract. Examples of credit derivatives within the scope of this paragraph include, but are not limited to, credit default swaps, credit spread options, and credit index products; also includes a hybrid instrument that has an embedded credit derivative (for example, but not limited to, a credit-linked note).

+ References + Details