Duke Energy 2011 Annual Report Download - page 136

PART II
DUKE ENERGY CORPORATION •DUKE ENERGY CAROLINAS, LLC •DUKE ENERGY OHIO, INC. •DUKE ENERGY INDIANA, INC.
Combined Notes to Consolidated Financial Statements – (Continued)
(d) As discussed in Note 4, Duke Energy recorded pre-tax charges of $222 million and $44 million during the years ended December 31, 2011 and 2010, respectively related to the
Edwardsport integrated gasification combined cycle (IGCC) plant that is currently under construction.
(e) As discussed further in Note 12, during the year ended December 31, 2011, Commercial Power recorded a $79 million impairment to write-down the carrying value of certain emission
allowances. During the year ended December 31, 2010, Commercial Power recorded impairment charges of $660 million, which consisted of a $500 million goodwill impairment
charge associated with the non-regulated Midwest generating operations and a $160 million pre-tax charge to write-down the value of certain non-regulated Midwest generating assets
and emission allowances primarily associated with these generation assets. During the year ended December 31, 2009, Commercial Power recorded impairment charges of $413
million, which consists of a $371 million goodwill impairment charge associated with the non-regulated Midwest generation operations and a $42 million pre-tax charge to write-down
the value of certain generating assets in the Midwest to their estimated fair value.
(f) During 2010, a $172 million expense was recorded related to the 2010 voluntary severance plan and the consolidation of certain corporate office functions from the Midwest to
Charlotte, North Carolina (see Note 19).
(g) During 2010, Duke Energy recognized a $139 million pre-tax gain from the sale of a 50% ownership interest in DukeNet (see Note 2), and a $109 million pre-tax gain from the sale of
an equity method investment in, Q-Comm Corporation (Q-Comm) (see Note 13).
(h) Other within Interest Income and Other includes foreign currency transaction gains and losses and additional noncontrolling interest amounts not allocated to the reportable segments and
Other results.
Geographic Data
(in millions) U.S.
Latin
America(a) Consolidated
2011
Consolidated revenues $13,062 $1,467 $14,529
Consolidated long-lived assets 45,920 2,612 48,532
2010
Consolidated revenues $13,068 $1,204 $14,272
Consolidated long-lived assets 42,754 2,733 45,487
2009
Consolidated revenues $11,573 $1,158 $12,731
Consolidated long-lived assets 41,043 2,561 43,604
(a) Change in amounts of long-lived assets in Latin America is primarily due to foreign
currency translation adjustments on property, plant and equipment and other long-
lived asset balances.
Duke Energy Carolinas
Duke Energy Carolinas has one reportable operating segment,
Franchised Electric, which generates, transmits, distributes and sells
electricity and conducts operations through Duke Energy Carolinas,
which consists of the regulated electric utility business in central and
western North Carolina and western South Carolina.
The remainder of Duke Energy Carolinas’ operations is
presented as Other. While it is not considered an operating segment,
Other primarily includes certain corporate governance costs allocated
by its parent, Duke Energy (see Note 13).
At December 31, 2011, 2010, and 2009, all of Duke Energy
Carolinas’ assets are owned by the Franchised Electric operating
segment. For the years ended December 31, 2011, 2010, and
2009 all revenues, expenses, and capital and acquisition
expenditures are from the Franchised Electric operating segment.
There were no intersegment revenues for the years ended
December 31, 2011, 2010, and 2009. All of Duke Energy
Carolinas’ revenues are generated domestically and its long-lived
assets are all in the U.S.
Business Segment Data
Segment EBIT/Consolidated Income
Before Income Taxes
Years Ended December 31,
(in millions) 2011 2010 2009
Franchised Electric(a) $1,836 $1,930 $1,545
Total reportable segment 1,836 1,930 1,545
Other(b) (180) (296) (143)
Interest expense (360) (362) (330)
Interest income 10 23 7
Total consolidated $1,306 $1,295 $1,079
(a) On December 7, 2009 and January 10, 2010, the North Carolina and South Carolina
rate case settlement agreements were approved by the NCUC and PSCSC, respectively.
Among other things, the rate case settlements included an annual base rate increase of
$315 million in North Carolina to be phased-in primarily over a two-year period
beginning January 1, 2010 and a $74 million annual base rate increase in South
Carolina effective February 1, 2010.
(b) During 2010, a $99 million expense was recorded related to the 2010 voluntary
severance plan (see Note 19).
Duke Energy Ohio
Duke Energy Ohio has two reportable operating segments,
Franchised Electric and Gas and Commercial Power.
Franchised Electric and Gas transmits, distributes, and sells
electricity in southwestern Ohio and generates, transmits, distributes,
and sells electricity in northern Kentucky. Franchised Electric and Gas
also transports and sells natural gas in southwestern Ohio and
northern Kentucky. It conducts operations primarily through Duke
Energy Ohio and its wholly-owned subsidiary Duke Energy Kentucky.
Commercial Power owns, operates and manages power plants
and engages in the wholesale marketing and procurement of electric
power, fuel and emission allowances related to these plants, as well
as other contractual positions. Duke Energy Ohio’s Commercial
Power reportable operating segment does not include the operations
of DEGS or Duke Energy Retail, which is included in the Commercial
Power reportable operating segment at Duke Energy.
The remainder of Duke Energy Ohio’s operations is presented as
Other. While it is not considered an operating segment, Other
primarily includes certain governance costs allocated by its parent,
Duke Energy (see Note 13). All of Duke Energy Ohio’s revenues are
generated domestically and its long-lived assets are all in the U.S.
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