Duke Energy 2011 Annual Report Download - page 177

PART II
DUKE ENERGY CORPORATION •DUKE ENERGY CAROLINAS, LLC •DUKE ENERGY OHIO, INC. •DUKE ENERGY INDIANA, INC.
Combined Notes to Consolidated Financial Statements – (Continued)
Duke Energy exercised the cash settlement option of an asset
swap agreement for SHGP and received total cash proceeds of $184
million in December 2010. This transaction did not result in a
significant gain.
Advance SC, LLC., which provides funding for economic
development projects, educational initiatives, and other programs,
was formed during 2004. USFE&G made donations of $3 million,
$1 million and $11 million to the unconsolidated subsidiary during
the years ended December 31, 2011, 2010 and 2009, respectively.
Additionally, at December 31, 2011, USFE&G had an immaterial
trade payable to Advance SC, LLC. At December 31, 2010, USFE&G
had a trade payable to Advance SC, LLC. of $3 million.
Duke Energy Carolinas
Duke Energy Carolinas engages in related party transactions,
which are generally performed at cost and in accordance with the
applicable state and federal commission regulations. Balances due to
or due from related parties included in the Consolidated Balance
Sheets are as follows:
Assets/(Liabilities)
(in millions)
December 31,
2011(a)
December 31,
2010(a)
Current assets(b) $51 $293
Non-current assets(c) 111 104
Current liabilities(d) (171) (195)
Non-current liabilities(e) (64) (93)
Net deferred tax liabilities(f) (4,509) (3,906)
(a) Balances exclude assets or liabilities associated with accrued pension and other post-
retirement benefits and money pool arrangements as discussed below.
(b) Of the balance at December 31, 2011, $2 million is classified as Receivables and $49
million is classified as Other within Current Assets on the Consolidated Balance Sheets.
Of the balance at December 31, 2010, $90 million is classified as Receivables and
$203 million is classified as Other within Current Assets on the Consolidated Balance
Sheets.
(c) The balances at December 31, 2011 and December 31, 2010 are classified as Other
within Investments and Other Assets on the Consolidated Balance Sheets.
(d) Of the balance at December 31, 2011, $157 million is classified as Accounts payable
and $14 million is classified as accrued taxes on the Consolidated Balance Sheets. The
balance at December 31, 2010 is classified as Accounts payable on the Consolidated
Balance Sheets.
(e) The balances at December 31, 2011 and December 31, 2010 are classified as Other
within Deferred Credits and Other Liabilities on the Consolidated Balance Sheets.
(f) Of the balance at December 31, 2011, $(4,555) million is classified as Deferred
income taxes and $46 million is classified as Other within Current Assets on the
Consolidated Balance Sheets. Of the balance at December 31, 2010, $(3,988) million
is classified as Deferred income taxes and $82 million is classified as Other within
Current Assets on the Consolidated Balance Sheets.
As discussed further in Note 21, Duke Energy Carolinas
participates in Duke Energy’s qualified pension plan, non-qualified
pension plan and other post-retirement benefit plans and is allocated
its proportionate share of expenses associated with these plans.
Additionally, Duke Energy Carolinas has been allocated accrued
pension and other post-retirement benefit obligations as shown in the
following table:
(in millions)
December 31,
2011
December 31,
2010
Other current liabilities $8 $10
Accrued pension and other post-
retirement benefit costs 248 242
Total allocated accrued pension and
other post-retirement benefit
obligations $256 $252
Other Related Party Amounts
Years Ended December 31,
(in millions) 2011 2010 2009
Corporate governance and shared service
expenses(a) $1,009 $1,016 $825
Indemnification coverages(b) 21 25 28
Rental income and other charged expenses,
net(c) (11) 322
(a) Duke Energy Carolinas is charged its proportionate share of corporate governance and
other costs by an unconsolidated affiliate that is a consolidated affiliate of Duke Energy.
Corporate governance and other shared services costs are primarily related to human
resources, employee benefits, legal and accounting fees, as well as other third party
costs. These amounts are recorded in Operation, Maintenance and Other within
Operating Expenses on the Consolidated Statements of Operations. The increase in
2010 as compared to 2009 is primarily attributable to the 2010 voluntary opportunity
plan discussed further in Note 19.
(b) Duke Energy Carolinas incurs expenses related to certain indemnification coverages
through Bison, Duke Energy’s wholly-owned captive insurance subsidiary. These
expenses are recorded in Operation, Maintenance and Other within Operating
Expenses on the Consolidated Statements of Operations.
(c) Duke Energy Carolinas records income associated with the rental of office space to a
consolidated affiliate of Duke Energy, as well as its proportionate share of certain
charged expenses from affiliates of Duke Energy.
As discussed further in Note 6, Duke Energy Carolinas
participates in a money pool arrangement with Duke Energy and
other Duke Energy subsidiaries. Interest income associated with
money pool activity, which is recorded in Other Income and
Expenses, net on the Consolidated Statements of Operations, was $1
million for the years ended December 31, 2011 and 2010, and
insignificant for the year ended December 31, 2009. Interest
expense associated with money pool activity, which is recorded in
Interest Expense on the Consolidated Statements of Operations, was
$1 million, for the years ended December 31, 2011 and 2010 and
$3 million for the year ended December 31, 2009.
During December 31, 2011 and 2010, Duke Energy Carolinas
made equity distributions to its parent, Duke Energy, in the amounts
of $299 million and $350 million, respectively.
During the year ended December 31, 2010, Duke Energy
Carolinas received a $146 million allocation of net pension and other
post-retirement benefit assets from its parent, Duke Energy. During
the year ended December 31, 2009, Duke Energy Carolinas received
$250 million in capital contributions from its parent, Duke Energy.
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