Duke Energy 2011 Annual Report Download - page 241

PART II
DUKE ENERGY CORPORATION
Schedule I – Condensed Parent Company Financial Statements
Combined Notes to Consolidated Financial Statements – (Continued)
Energy and are reflected as Notes payable on Duke Energy’s
Condensed Consolidated Balance Sheets.
Duke Energy also issued an additional $75 million in
Commercial Paper in the third quarter of 2011, for general corporate
purposes, which is classified as Notes payable and commercial paper
on Duke Energy’s Condensed Consolidated Balance Sheets.
In November 2011, Duke Energy entered into a new $6 billion,
five-year master credit facility, with $4 billion available at closing and
the remaining $2 billion available following successful completion of
the proposed merger with Progress Energy. The Duke Energy
Registrants each have borrowing capacity under the master credit
facility up to specified sublimits for each borrower. However, Duke
Energy has the unilateral ability at any time to increase or decrease
the borrowing sublimits of each borrower, subject to a maximum
sublimit for each borrower. As of December 31, 2011, Duke Energy
has a borrowing sublimit of $1,250 million. The amount available
under the master credit facility has been reduced, by the use of the
master credit facility to backstop the issuances of commercial paper,
letters of credit and certain tax-exempt bonds.
In March 2010, Duke Energy issued $450 million principal
amount of 3.35% senior notes due April 1, 2015. Proceeds from the
issuance were used to repay $274 million of borrowings under the
master credit facility and for general corporate purposes.
Annual Maturities as of December 31, 2011
(in millions)
2012 $ —
2013 249
2014 1,325
2015 450
2016 950
Thereafter 1,354
Total long-term debt, including current maturities $4,328
3. COMMITMENTS AND CONTINGENCIES
Duke Energy and its subsidiaries are a party to litigation,
environmental and other matters. For further information, see Note 5
to the Consolidated Financial Statements, “Commitments and
Contingencies.”
Duke Energy has various financial and performance guarantees
and indemnifications which are issued in the normal course of
business. These contracts include performance guarantees, stand-by
letters of credit, debt guarantees, surety bonds and indemnifications.
Duke Energy enters into these arrangements to facilitate commercial
transactions with third parties by enhancing the value of the
transaction to the third party. The maximum potential amount of
future payments Duke Energy could have been required to make
under these guarantees as of December 31, 2011 was
approximately $4.7 billion. Of this amount, substantially all relates to
guarantees of wholly-owned consolidated entities, including debt
issued by Duke Energy Carolinas discussed above, and less than
wholly-owned consolidated entities. The majority of these guarantees
expire at various times between 2012 and 2036, with the remaining
performance guarantees having no contractual expiration. See Note 7
to the Consolidated Financial Statements, “Guarantees and
Indemnifications,” for further discussion of guarantees issued on
behalf of unconsolidated affiliates and third parties.
4. RELATED PARTY TRANSACTIONS
Balances due to or due from related parties included in the
Balance Sheets as of December 31, 2011 and 2010 are as follows:
December 31,
(in millions) 2011 2010
Assets (Liabilities)
Current assets due from affiliated companies(a)(b) $38 $39
Current liabilities due to affiliated companies(c) $— $(135)
Non-current liabilities due to affiliated companies(d) $(871) $(766)
(a) Balance excludes assets or liabilities associated with money pool arrangements, which
are discussed below.
(b) The balances at December 31, 2011 and 2010 are classified as Receivables on the
Balance Sheets.
(c) The balance at December 31, 2010 is classified as Accounts Payable on the Balance
Sheets.
(d) Of the balance at December 31, 2011, $766 million is classified as Other within Other
Long-Term Liabilities and $105 million is classified as Long-term Debt on the Balance
Sheets. The balance at December 31, 2010 is classified as Other within Other Long-
Term Liabilities on the Balance Sheets.
Duke Energy provides support to certain subsidiaries for their
short-term borrowing needs through participation in a money pool
arrangement. Under this arrangement, certain subsidiaries with short-
term funds may provide short-term loans to affiliates participating
under this arrangement. Additionally, Duke Energy provides loans to
subsidiaries through the money pool, but is not permitted to borrow
funds through the money pool arrangement. Duke Energy had money
pool-related receivables of $450 million classified as Notes
Receivable on the Balance Sheets as of both December 31, 2011
and 2010.
As of December 31, 2011 and 2010, Duke Energy had an
intercompany loan outstanding with Cinergy of $608 million and
$872 million, respectively, which is classified within Receivables on
the Balance Sheets. The $264 million decrease in the intercompany
loan during 2011 and the $263 million decrease during 2010 are
reflected as Notes Receivable from Affiliates, net within Net Cash
Provided by (Used in) Investing Activities on the Condensed
Statements of Cash Flows.
In conjunction with the money pool arrangement and the
intercompany loan noted above, Duke Energy recorded interest
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