a)  Foreign Exchange b)  Interest Rates c)  Credit Default Swaps d)  Equity Derivatives e)  Commodity Instruments The company has entered into energy derivative contracts primarily to hedge the sale of generated power. The company  endeavours to link forward electricity sale derivatives to specific periods in which it expects to generate electricity for sale.  All energy derivative contracts are recorded at an amount equal to fair value and are reflected in the company’s Consolidated  Financial Statements. At December 31, 2013, the company and its subsidiaries held equity derivatives with a notional amount of $1,633 million  (2012 – $1,112 million) which includes $765 million (2012 – $600 million) notional amount that hedges long-term compensation  arrangements. The balance represents common equity positions established in connection with the company’s investment  activities. The fair value of these instruments was reflected in the company’s Consolidated Financial Statements at year end.  As at December 31, 2013, the company held credit default swap contracts with an aggregate notional amount of $800 million  (2012 – $865 million). Credit default swaps are contracts which are designed to compensate the purchaser for any change in  the value of an underlying reference asset, based on measurement in credit spreads, upon the occurrence of pre-determined  credit events. The company is entitled to receive payments in the event of a pre-determined credit event for up to $800 million  (2012 – $815 million) of the notional amount and could be required to make payments in respect of $nil (2012 – $50 million)  of the notional amount. At December 31, 2013, the company held interest rate swap contracts having an aggregate notional amount of $600 million  (2012 – $1,351 million), and interest rate swaptions with an aggregate notional amount of $1,704 million (2012 – $263 million).  The company’s subsidiaries held interest rate swap contracts with an aggregate notional amount of $8,654 million  (2012 – $11,636 million), interest rate cap contracts with an aggregate notional amount of $5,799 million (2012 – $4,951 million),  and bond forwards with an aggregate notional value of $nil (2012 – $471 million). Included in net income are unrealized net gains on foreign currency derivative contracts amounting to $48 million (2012 – net  loss of $2 million) and included in the cumulative translation adjustment account in other comprehensive income are losses  in respect of foreign currency contracts entered into for hedging purposes amounting to $71 million (2012 – net losses of  $45 million). The company held the following foreign exchange contracts with notional amounts at December 31, 2013 and December 31, 2012: Notional Amount (U.S. Dollars) Average Exchange Rate (MILLIONS) Dec. 31, 2013 Dec. 31, 2012 Dec. 31, 2013 Dec. 31, 2012 Foreign exchange contracts British pounds  $  2,782 $  752 $  1.60 $  1.60 Australian dollars  1,932 894 0.94 1.03 Canadian dollars  1,387 1,089 $  0.95 $  0.99 European Union euros  922 199 1.37 1.28 Brazilian reais  702 2 2.34 2.08 Japanese yen  1 5 101.0 86.8 New Zealand dollars  — 321 — 0.77 Cross currency interest rate swaps Australian dollars  1,333 895 1.01 1.00 Canadian dollars  654 655 0.91 0.89 British pounds  300 — 1.49 — Japanese yen  98 98 75.47 75.47 Brazilian reais  — 66 — 1.81 Foreign exchange options Japanese yen  548 548 105.0 105.0 European Union euros  413 — 1.28 — British pounds  123 — 1.86 — Australian dollars  — 416 — 1.05 Brazilian reais  — 219 — 1.50 2013 ANNUAL REPORT 139