Duke Energy 2011 Annual Report Download - page 22

TABLE OF CONTENTS CAUTIONARY STATEMENTS REGARDING
FORWARD-LOOKING INFORMATION
FORM 10-K FOR THE YEAR ENDED
DECEMBER 31, 2011
Item Page
PART I.
DUKE ENERGY CORPORATION (DUKE ENERGY)
1. BUSINESS ........................................ 5
GENERAL .................................... 6
U.S. FRANCHISED ELECTRIC AND GAS ............. 6
COMMERCIAL POWER .......................... 15
INTERNATIONAL ENERGY ....................... 17
OTHER ...................................... 17
GEOGRAPHIC REGIONS ......................... 17
EMPLOYEES .................................. 17
EXECUTIVE OFFICERS OF DUKE ENERGY ........... 18
DUKE ENERGY CAROLINAS, LLC (DUKE ENERGY CAROLINAS)
DUKE ENERGY OHIO, INC. (DUKE ENERGY OHIO)
DUKE ENERGY INDIANA, INC. (DUKE ENERGY INDIANA)
BUSINESS
GENERAL .................................... 19
DUKE ENERGY, DUKE ENERGY CAROLINAS, DUKE ENERGY
OHIO, DUKE ENERGY INDIANA
ENVIRONMENTAL MATTERS .......................... 20
1A. RISK FACTORS .................................... 21
1B. UNRESOLVED STAFF COMMENTS ..................... 28
2. PROPERTIES ...................................... 29
3. LEGAL PROCEEDINGS ............................... 31
4. MINE SAFETY DISCLOSURE .......................... 31
PART II.
5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED
STOCKHOLDER MATTERS AND ISSUER PURCHASES OF
EQUITY SECURITIES ................................ 32
6. SELECTED FINANCIAL DATA .......................... 34
7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS .... 35
7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK ..................................... 75
8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA .... 76
9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE .......... 227
9A. CONTROLS AND PROCEDURES ....................... 227
PART III.
10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE ..................................... 228
11. EXECUTIVE COMPENSATION ......................... 228
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS ........................................ 228
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,
AND DIRECTOR INDEPENDENCE ...................... 228
14. PRINCIPAL ACCOUNTING FEES AND SERVICES ........... 229
PART IV.
15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES ......... 230
SIGNATURES ................................. 231
EXHIBIT INDEX ................................ E-1
This document includes forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Forward-looking statements are based on management’s
beliefs and assumptions. These forward-looking statements, which are intended
to cover Duke Energy and the applicable Duke Energy Registrants, are identified
by terms and phrases such as “anticipate,” “believe,” “intend,” “estimate,”
“expect,”“continue,”“should,”“could,”“may,”“plan,”“project,”“predict,”“will,”
“potential,” “forecast,” “target,” “guidance,” “outlook” and similar expressions.
Forward-looking statements involve risks and uncertainties that may cause
actual results to be materially different from the results predicted. Factors that
could cause actual results to differ materially from those indicated in any
forward-looking statement include, but are not limited to:
•State, federal and foreign legislative and regulatory initiatives, including
costs of compliance with existing and future environmental requirements,
as well as rulings that affect cost and investment recovery or have an
impact on rate structures;
•Costs and effects of legal and administrative proceedings, settlements,
investigations and claims;
•Industrial, commercial and residential growth or decline in the respective
Duke Energy Registrants’ service territories, customer base or customer
usage patterns;
•Additional competition in electric markets and continued industry
consolidation;
•Political and regulatory uncertainty in other countries in which Duke
Energy conducts business;
•The influence of weather and other natural phenomena on each of the
Duke Energy Registrants’ operations, including the economic, operational
and other effects of storms, hurricanes, droughts and tornados;
•The impact on the Duke Energy Registrants’ facilities and business from a
terrorist attack;
•The inherent risks associated with the operation and potential construction
of nuclear facilities, including environmental, health, safety, regulatory and
financial risks;
•The timing and extent of changes in commodity prices, interest rates and
foreign currency exchange rates;
•Unscheduled generation outages, unusual maintenance or repairs and
electric transmission system constraints;
•The performance of electric generation facilities and of projects undertaken
by Duke Energy’s non-regulated businesses;
•The results of financing efforts, including the Duke Energy Registrants’
ability to obtain financing on favorable terms, which can be affected by
variousfactors,includingtherespectiveDukeEnergyRegistrants’credit
ratings and general economic conditions;
•Declines in the market prices of equity securities and resultant cash
funding requirements for Duke Energy’s defined benefit pension plans;
•The level of creditworthiness of counterparties to Duke Energy Registrants’
transactions;
•Employee workforce factors, including the potential inability to attract and
retain key personnel;
•Growth in opportunities for the respective Duke Energy Registrants’
business units, including the timing and success of efforts to develop
domestic and international power and other projects;
•Construction and development risks associated with the completion of
Duke Energy Registrants’ capital investment projects in existing and new
generation facilities, including risks related to financing, obtaining and
complying with terms of permits, meeting construction budgets and
schedules, and satisfying operating and environmental performance
standards, as well as the ability to recover costs from ratepayers in a
timely manner or at all;
•The effect of accounting pronouncements issued periodically by
accounting standard-setting bodies;
•The expected timing and likelihood of completion of the proposed merger
with Progress Energy, Inc. (Progress Energy), including the timing, receipt
and terms and conditions of any required governmental and regulatory
approvals of the proposed merger that could reduce anticipated benefits or
cause the parties to abandon the merger, the diversion of management’s
time and attention from Duke Energy’s ongoing business during this time
period, the ability to maintain relationships with customers, employees or
suppliers as well as the ability to successfully integrate the businesses and
realize cost savings and any other synergies and the risk that the credit
ratings of the combined company or its subsidiaries may be different from
what the companies expect;
•The risk that the proposed merger with Progress Energy is terminated prior
to completion and results in significant transaction costs to Duke Energy;
and
•The ability to successfully complete merger, acquisition or divestiture
plans.
In light of these risks, uncertainties and assumptions, the events described in
the forward-looking statements might not occur or might occur to a different extent
or at a different time than Duke Energy has described. The Duke Energy
Registrants undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.