Duke Energy 2011 Annual Report Download - page 120

PART II
DUKE ENERGY CORPORATION •DUKE ENERGY CAROLINAS, LLC •DUKE ENERGY OHIO, INC. •DUKE ENERGY INDIANA, INC.
Combined Notes to Consolidated Financial Statements For the Years Ended December 31, 2011, 2010 and 2009
Index to Combined Notes To Consolidated Financial Statements
The notes to the consolidated financial statements that follow
are a combined presentation. The following list indicates the
registrants to which the footnotes apply:
Registrant Applicable Notes
Duke Energy Corporation 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13,
14, 15, 16, 17, 18, 19, 20, 21, 22, 23,
24
Duke Energy Carolinas, LLC 1, 2, 3, 4, 5, 6, 8, 9, 10, 11, 13, 14, 15,
16, 17, 19, 21, 22, 23, 24
DukeEnergyOhio,Inc. 1,2,3,4,5,6,8,9,10,11,12,13,14,
15, 17, 19, 21, 22, 23, 24
Duke Energy Indiana, Inc. 1, 2, 3, 4, 5, 6, 8, 9, 10, 11, 12, 13, 14,
15, 16, 17, 19, 21, 22, 23, 24
1. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Nature of Operations and Basis of Consolidation.
Duke Energy Corporation (collectively with its subsidiaries, Duke
Energy), is an energy company headquartered in Charlotte, North
Carolina. Duke Energy operates in the United States (U.S.) primarily
through its direct and indirect wholly-owned subsidiaries, Duke
Energy Carolinas, LLC (Duke Energy Carolinas), Duke Energy Ohio,
Inc. (Duke Energy Ohio), which includes Duke Energy Kentucky, Inc.
(Duke Energy Kentucky), and Duke Energy Indiana, Inc. (Duke
Energy Indiana), as well as in Latin America through International
Energy. When discussing Duke Energy’s consolidated financial
information, it necessarily includes the results of its three separate
subsidiary registrants, Duke Energy Carolinas, Duke Energy Ohio and
Duke Energy Indiana (collectively referred to as the Subsidiary
Registrants), which, along with Duke Energy, are collectively referred
to as the Duke Energy Registrants. The information in these
combined notes relates to each of the Duke Energy Registrants as
noted in the Index to the Combined Notes. However, none of the
registrants makes any representation as to information related solely
to Duke Energy or the subsidiaries of Duke Energy other than itself.
As discussed further in Note 3, Duke Energy operates three reportable
business segments: U.S. Franchised Electric and Gas, Commercial
Power and International Energy.
These Consolidated Financial Statements include, after
eliminating intercompany transactions and balances, the accounts of
the Duke Energy Registrants and all majority-owned subsidiaries
where the respective Duke Energy Registrants have control and those
variable interest entities (VIEs) where the respective Duke Energy
Registrants are the primary beneficiary.
Duke Energy’s Consolidated Financial Statements reflect Duke
Energy Carolinas’ proportionate share of the Catawba Nuclear Station,
as well as Duke Energy Ohio’s proportionate share of certain
generation and transmission facilities in Ohio, Indiana and Kentucky
and Duke Energy Indiana’s proportionate share of certain generation
and transmission facilities.
Duke Energy Carolinas is an electric utility company that
generates, transmits, distributes and sells electricity in North Carolina
and South Carolina. Duke Energy Carolinas’ Consolidated Financial
Statements reflect its proportionate share of the Catawba Nuclear
Station. Duke Energy Carolinas is subject to the regulatory provisions of
the North Carolina Utilities Commission (NCUC), the Public Service
Commission of South Carolina (PSCSC), the U.S. Nuclear Regulatory
Commission (NRC) and the Federal Energy Regulatory Commission
(FERC). Substantially all of Duke Energy Carolinas’ operations are
regulated and qualify for regulatory accounting treatment. As discussed
further in Note 3, Duke Energy Carolinas’ operations include one
reportable business segment, Franchised Electric.
Duke Energy Ohio is an indirect wholly-owned subsidiary of
Duke Energy. Duke Energy Ohio is a combination electric and gas
public utility that provides service in the southwestern portion of Ohio
and in northern Kentucky through its wholly-owned subsidiary Duke
Energy Kentucky, as well as electric generation in parts of Ohio,
Illinois, Indiana and Pennsylvania. Duke Energy Ohio’s principal lines
of business include generation, transmission and distribution of
electricity, the sale of and/or transportation of natural gas, and energy
marketing. Duke Energy Kentucky’s principal lines of business
include generation, transmission and distribution of electricity, as well
as the sale of and/or transportation of natural gas. References herein
to Duke Energy Ohio include Duke Energy Ohio and its subsidiaries.
Duke Energy Ohio’s Consolidated Financial Statements reflect its
proportionate share of certain generation and transmission facilities in
Ohio, Indiana and Kentucky. Duke Energy Ohio is subject to the
regulatory provisions of the Public Utilities Commission of Ohio
(PUCO), the Kentucky Public Service Commission (KPSC) and the
FERC. Duke Energy Ohio applies regulatory accounting treatment to
substantially all of the operations in its Franchised Electric and Gas
operating segment. Through November 2011, Duke Energy Ohio
applied regulatory accounting treatment to certain rate riders
associated with retail generation of its Commercial Power operating
segment. See Note 3 for information about business segments.
Duke Energy Indiana is an indirect wholly-owned subsidiary of
Duke Energy. Duke Energy Indiana is an electric utility that provides
service in north central, central, and southern Indiana. Duke Energy
Indiana’s Consolidated Financial Statements reflect its proportionate
share of certain generation and transmission facilities. Its primary line
of business is generation, transmission and distribution of electricity.
Duke Energy Indiana is subject to the regulatory provisions of the
Indiana Utility Regulatory Commission (IURC) and the FERC. The
substantial majority of Duke Energy Indiana’s operations are regulated
and qualify for regulatory accounting treatment. As discussed further
in Note 3, Duke Energy Indiana’s operations include one reportable
business segment, Franchised Electric.
Use of Estimates.
To conform to generally accepted accounting principles (GAAP)
in the U.S., management makes estimates and assumptions that
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