Duke Energy 2011 Annual Report Download - page 179

PART II
DUKE ENERGY CORPORATION •DUKE ENERGY CAROLINAS, LLC •DUKE ENERGY OHIO, INC. •DUKE ENERGY INDIANA, INC.
Combined Notes to Consolidated Financial Statements – (Continued)
not the regulated utility operations of Duke Energy Ohio. DECAM
meets its funding needs through an intercompany loan agreement
from a subsidiary of Duke Energy. The intercompany loan agreement
was executed in February 2011. An additional intercompany loan
agreement was executed in October 2011 so that DECAM can also
loan money to the subsidiary of Duke Energy. DECAM had no
outstanding intercompany loan payable with the subsidiary of Duke
Energy as of December 31, 2011. DECAM had a $90 million
intercompany loan receivable with the subsidiary of Duke Energy as
of December 31, 2011.
In January 2012, Duke Energy Vermillion, an indirect wholly-
owned subsidiary of Duke Energy Ohio, sold its 75% undivided
ownership interest in Vermillion Generating Station to Duke Energy
Indiana and WVPA. Refer to Notes 2 and 5 for further discussion.
During the years ended December 31, 2011 and 2009, Duke
Energy Ohio paid dividends to its parent, Cinergy of $485 million and
$360 million, respectively.
Duke Energy Indiana
Duke Energy Indiana 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) $18 $51
Non-current assets(c) 2—
Current liabilities(d) (97) (69)
Non-current liabilities(e) (22) (20)
Net deferred tax liabilities(f) (914) (932)
(a) Balances exclude assets or liabilities associated with accrued pension and other post-
retirement benefits, CRC and money pool arrangements as discussed below.
(b) The balance at December 31, 2011, is classified as Receivables on the Consolidated
Balance Sheets. Of the balance at December 31, 2010, $27 million is classified as
Receivables and $24 million is classified as Other within Current Assets on the
Consolidated Balance Sheets.
(c) The balance at December 31, 2011 is classified as Other within Investments and
Other Assets on the Consolidated Balance Sheets.
(d) Of the balance at December 31, 2011, $(72) million is classified as Accounts payable
and $(25) million is classified as Taxes accrued on the Consolidated Balance Sheets.
Of the balance at December 31, 2010 $(67) million is classified as Accounts payable
and $(2) million is classified as Taxes accrued on the Consolidated Balance Sheets.
(e) The balances at December 31, 2011 and 2010, are classified as Other within
Deferred Credits and Other Liabilities on the Consolidated Balance Sheets.
(f) Of the balance at December 31, 2011, $(927) million is classified as Deferred income
taxes and $13 million is classified as Other within Current Assets on the Consolidated
Balance Sheets. Of the balance at December 31, 2010, $(973) million is classified as
Deferred income taxes and $41 million is classified as Other within Current Assets on
the Consolidated Balance Sheets.
As discussed further in Note 21, Duke Energy Indiana
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 Indiana 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 $2 $2
Accrued pension and other post-
retirement benefit costs 231 270
Total allocated accrued pension and
other post-retirement benefit
obligations $233 $272
Other Related Party Amounts
For the Years Ended December 31,
(in millions) 2011 2010 2009
Corporate governance and shared
service expenses(a) $415 $364 $343
Indemnification coverages(b) 7810
Rental income and other charged
expenses, net(c) 1812
CRC interest income(d) 14 13 12
(a) Duke Energy Indiana 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.
(b) Duke Energy Indiana 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 Indiana 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.
(d) As discussed in Note 11, certain trade receivables have been sold by Duke Energy
Indiana to CRC, an unconsolidated entity formed by a subsidiary of Duke Energy. The
proceeds obtained from the sales of receivables are largely cash but do include a
subordinated note from CRC for a portion of the purchase price. The interest income
associated with the subordinated note is recorded in Other Income and Expenses, net
on the Consolidated Statements of Operations.
As discussed further in Note 6, Duke Energy Indiana
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
insignificant for the years ended December 31, 2011 and 2010 and
$1 million 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, 2010 and 2009.
In January 2012, Duke Energy Vermillion, an indirect wholly-
owned subsidiary of Duke Energy Ohio, sold its 75% undivided
ownership interest in the Vermillion Generating Station to Duke Energy
Indiana and WVPA. Refer to Note 2 and 5 for further discussion.
During the year ended December 31, 2010 and 2009, Duke
Energy Indiana received $350 million and $140 million,
respectively, in capital contributions, from its parent, Cinergy.
159