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Derivative Instruments (Tables)
 12 Months Ended
Dec. 31, 2015
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Schedule of Notional Amounts of Outstanding Derivative Positions
As of December 31, we had natural gas contracts outstanding in the following quantities:
In Bcf (1)
 
2015 (2)
 
2014
Cash flow hedges
 
5

 
9

Not designated as hedges
 
(14
)
 
75

Total volumes
 
(9
)
 
84

Short position – cash flow hedges
 
(6
)
 
(4
)
Short position – not designated as hedges
 
(3,089
)
 
(2,828
)
Long position – cash flow hedges
 
11

 
13

Long position – not designated as hedges
 
3,075

 
2,903

Net (short) long position
 
(9
)
 
84

(1)
Volumes related to Nicor Gas exclude variable-priced contracts, which are carried at fair value, but whose fair values are not directly impacted by changes in commodity prices.
(2)
Approximately 96% of these contracts have durations of two years or less and approximately 4% expire between two and five years.
Loss Recognized In Income
The following amounts deferred as a regulatory asset or liability on our Consolidated Balance Sheets represent the net realized gains (losses) related to these natural gas cost hedging activities as of December 31.
In millions
 
2015
 
2014
Nicor Gas
 
$
(47
)
 
$
10

Elizabethtown Gas
 
(20
)
 
2
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value
The following table presents the fair values and Consolidated Balance Sheets classifications of our derivative instruments as of December 31.
 
 
 
2015
 
2014
In millions
Classification
 
Assets
 
Liabilities
 
Assets
 
Liabilities
Designated as cash flow or fair value hedges
 
 
 
 
 
 
 
 
Natural gas contracts
Current
 
$
3

 
$
(5
)
 
$
6

 
$
(11
)
Natural gas contracts
Long-term
 
—

 
(2
)
 
—

 
(1
)
Interest rate swap agreements
Current
 
9

 
—

 
—

 
—

Total designated as cash flow or fair value hedges
 
 
$
12

 
$
(7
)
 
$
6

 
$
(12
)
Not designated as hedges
 
 

 
 

 
 

 
 

Natural gas and weather contracts
Current
 
$
751

 
$
(672
)
 
$
1,061

 
$
(1,020
)
Natural gas contracts
Long-term
 
179

 
(187
)
 
145

 
(119
)
Total not designated as hedges
 
 
$
930

 
$
(859
)
 
$
1,206

 
$
(1,139
)
Gross amount of recognized assets and liabilities (1) (2)
 
942

 
(866
)
 
1,212

 
(1,151
)
Gross amounts offset on our Consolidated Balance Sheets (2)
 
(724
)
 
820

 
(925
)
 
1,058

Net amounts of assets and liabilities presented on our Consolidated Balance Sheets (3)
 
$
218

 
$
(46
)
 
$
287

 
$
(93
)
(1)
The gross amounts of recognized assets and liabilities are netted on our Consolidated Balance Sheets to the extent that we have netting arrangements with the counterparties.
(2)
As required by the authoritative guidance related to derivatives and hedging, the gross amounts of recognized assets and liabilities do not include cash collateral held on deposit in broker margin accounts of $96 million as of December 31, 2015 and $133 million as of December 31, 2014. Cash collateral is included in the “Gross amounts offset on our Consolidated Balance Sheets” line of this table.
(3)
As of December 31, 2015 and 2014, we held letters of credit from counterparties that under master netting arrangements would offset an insignificant portion of these assets.
Schedule of Derivative Instruments
The following table presents the impacts of our derivative instruments on our Consolidated Statements of Income for the years ended December 31.
In millions
 
2015
 
2014
 
2013
Designated as cash flow or fair value hedges
 
 
 
 
 
 
Natural gas contracts – net gain (loss) reclassified from OCI into cost of goods sold
 
$
(10
)
 
$
4

 
$
(1
)
Natural gas contracts – net gain (loss) reclassified from OCI into operation and maintenance expense
 
(1
)
 
1

 
—

Interest rate swaps – net gain (loss) reclassified from OCI into interest expense
 
2

 
—

 
(3
)
Income tax
 
1

 
(2
)
 
1

Total designated as cash flow or fair value hedges, net of tax
 
$
(8
)
 
$
3

 
$
(3
)
Not designated as hedges (1)
 
 

 
 

 
 

Natural gas contracts - net fair value adjustments recorded in operating revenues
 
$
56

 
$
149

 
$
(90
)
Natural gas contracts - net fair value adjustments recorded in cost of goods sold (2)
 
(6
)
 
(7
)
 
2

Income tax
 
(19
)
 
(54
)
 
34

Total not designated as hedges, net of tax
 
$
31

 
$
88

 
$
(54
)
Total gains (losses) on derivative instruments, net of tax
 
$
23

 
$
91

 
$
(57
)
(1)
Associated with the fair value of derivative instruments held at December 31, 2015, 2014 and 2013.
(2)
Excludes (gains) and losses recorded in cost of goods sold associated with weather derivatives of $(12) million, $7 million and $5 million for the years ended December 31, 2015, 2014 and 2013, respectively.