10-K - SCANA Corporation
10-K - SCANA Corporation
10-K - SCANA Corporation
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Table of Contents<br />
Credit Risk Considerations<br />
Certain of the Company’s derivative instruments contain contingent provisions that require the Company to provide collateral<br />
upon the occurrence of specific events, primarily credit downgrades. As of December 31, 2011 and 20<strong>10</strong>, the Company has posted<br />
$140.3 million and $20.0 million, respectively, of collateral related to derivatives with contingent provisions that are in a net liability<br />
position. If all of the contingent features underlying these instruments were fully triggered as of December 31, 2011 and 20<strong>10</strong>, the<br />
Company would be required to post an additional $50.7 million and $74.0 million, respectively, of collateral to its counterparties. The<br />
aggregate fair value of all derivative instruments with contingent provisions that are in a net liability position as of December 31, 2011<br />
and 20<strong>10</strong>, are $191.0 million and $94.0 million, respectively.<br />
7. FAIR VALUE MEASUREMENTS, INCLUDING DERIVATIVES<br />
The Company values available for sale securities using quoted prices from a national stock exchange, such as the NASDAQ,<br />
where the securities are actively traded. For commodity derivative assets and liabilities, the Company uses unadjusted NYMEX prices<br />
to determine fair value, and considers such measures of fair value to be Level 1 for exchange traded instruments and Level 2 for overthe-counter<br />
instruments. The Company’s interest rate swap agreements are valued using discounted cash flow models with<br />
independently sourced data. Fair value measurements, and the level within the fair value hierarchy in which the measurements fall,<br />
were as follows:<br />
There were no fair value measurements based on significant unobservable inputs (Level 3) for either period presented. In<br />
addition, there were no transfers of fair value amounts into or out of Levels 1 and 2 during any period presented.<br />
Financial instruments for which the carrying amount may not equal estimated fair value at December 31, 2011 and<br />
December 31, 20<strong>10</strong> were as follows:<br />
Fair values of long-term debt are based on quoted market prices of the instruments or similar instruments. For debt<br />
instruments for which no quoted market prices are available, fair values are based on net present value calculations. Carrying values<br />
reflect the fair values of interest rate swaps based on discounted cash flow models with independently sourced data. Early settlement<br />
of long-term debt may not be possible or may not be considered prudent.<br />
76<br />
Quoted Prices in Active<br />
Markets for Identical Assets<br />
(Level 1)<br />
Fair Value Measurements Using<br />
Significant Other<br />
Observable Inputs<br />
(Level 2)<br />
Millions of dollars<br />
As of December 31, 2011<br />
Assets-Available for sale securities $ 3 —<br />
Interest rate contracts — $ 2<br />
Commodity contracts — 1<br />
Energy management contracts — 27<br />
Liabilities-Interest rate contracts — 158<br />
Commodity contracts 1 13<br />
Energy management contracts — 26<br />
As of December 31, 20<strong>10</strong><br />
Assets-Available for sale securities $ 3 —<br />
Interest rate contracts — $ 8<br />
Commodity contracts 2 2<br />
Energy management contracts — 9<br />
Liabilities-Interest rate contracts — 82<br />
Commodity contracts 1 6<br />
Energy management contracts — 11<br />
December 31, 2011 December 31, 20<strong>10</strong><br />
Estimated<br />
Fair<br />
Value<br />
Estimated<br />
Fair<br />
Value<br />
Carrying<br />
Carrying<br />
Millions of dollars<br />
Amount<br />
Amount<br />
Long-term debt $ 4,653.0 $ 5,479.2 $ 4,488.3 $ 4,840.5