Duke Energy 2011 Annual Report Download - page 83

PART II
• A $300 million increase in capital, investment and acquisition
expenditures primarily due to Duke Energy’s ongoing
infrastructure modernization program.
Financing Cash Flows
The following table summarizes key components of Duke
Energy’s financing cash flows for the three most recently completed
fiscal years:
Years Ended December 31,
(in millions) 2011 2010 2009
Issuance of common stock related to
employee benefit plans $67$ 302 $ 519
Issuance of long-term debt, net 2,292 1,091 2,876
Notes payable and commercial
power 208 (55) (548)
Dividends paid (1,329) (1,284) (1,222)
Other financing items (36) (14) (40)
Netcashprovidedbyinvesting
activities $1,202 $40$1,585
The increase in net cash provided by financing activities in
2011 as compared to 2010 was due primarily to the following:
• A $1,200 million net increase in long-term debt primarily due
to financings associated with the ongoing fleet modernization
program and
• A $260 million increase in proceeds from net issuances of
notes payable and commercial paper, primarily due to
PremierNotes and commercial paper issuances.
These increases in cash provided were partially offset by:
• A $240 million decrease in proceeds from the issuances of
common stock primarily related to the Dividend Reinvestment
Plan (DRIP) and other internal plans, due to the
discontinuance of new share issuances in the first quarter of
2011 and
• A $50 million increase in dividends paid in 2011 due to an
increase in dividends per share from $0.245 to $0.25 in the
third quarter of 2011. The total annual dividend per share
was $0.99 in 2011 compared to $0.97 in 2010.
The decrease in net cash provided by financing activities in
2010 as compared to 2009 was due primarily to the following:
• A $1,785 million net decrease in long-term debt primarily due
to advanced funding of capital expenditures in 2009 as a
result of favorable borrowing conditions,
• A $200 million decrease in proceeds from the issuances of
common stock primarily related to the DRIP and other internal
plans primarily due to the timing of new share issuances, and
• A $60 million increase in dividends paid in 2010 due to an
increase in dividends per share from $0.24 to $0.245 in the
third quarter of 2010. The total annual dividend per share
was $0.97 in 2010 compared to $0.94 in 2009.
These decreases in cash provided were partially offset by:
• A $490 million increase due to the repayment of outstanding
commercial paper in 2009.
Significant Notes Payable and Long-Term Debt Activities —
2011.
In December 2011, Duke Energy Carolinas issued $1 billion
principal amount of first mortgage bonds, of which $350 million
carry a fixed interest rate of 1.75% and mature December 15, 2016
and $650 million carry a fixed interest rate of 4.25% and mature
December 15, 2041. Proceeds from the issuances were used to
repay $750 million 6.25% senior unsecured notes which matured
January 15, 2012, with the remainder to fund capital expenditures
and for general corporate purposes.
In November 2011, Duke Energy issued $500 million of senior
notes, which carry a fixed interest rate of 2.15% and mature
November 15, 2016. Proceeds from the issuance will be used to
fund capital expenditures in Duke Energy’s unregulated businesses in
the U.S. and for general corporate purposes.
In the third quarter of 2011, Duke Energy issued an additional
$450 million in Commercial Paper. Proceeds from this issuance
were used for general corporate purposes. In the fourth quarter of
2011, Duke Energy repaid $375 million of Commercial Paper with
the proceeds from debt issuances discussed below.
In August 2011, Duke Energy issued $500 million principal
amount of senior notes, which carry a fixed interest rate of 3.55%
and mature September 15, 2021. Proceeds from the issuance were
used to repay a portion of Duke Energy’s commercial paper, as
discussed above, as it matures, to fund capital expenditures in Duke
Energy’s unregulated businesses in the U.S. and for general corporate
purposes.
In May 2011, Duke Energy Carolinas issued $500 million
principal amount of first mortgage bonds, which carry a fixed interest
rate of 3.90% and mature June 15, 2021. Proceeds from this
issuance were used to fund capital expenditures and for general
corporate purposes.
Significant Notes Payable and Long-Term Debt Activities —
2010.
In December 2010, Top of the World Wind Energy, LLC, a
subsidiary of Duke Energy Generation Services, Inc. (DEGS), an
indirect wholly-owned subsidiary of Duke Energy, entered into a long-
term loan agreement for $193 million principal amount maturing in
December 2028. The collateral for this loan is substantially all of the
assets of Top of the World Windpower LLC. The initial interest rate on
the notes is the six month adjusted London Interbank Offered Rate
(LIBOR) plus an applicable margin. In connection with this debt
issuance, DEGS entered into an interest rate swap to convert the
substantial majority of the loan interest payments from a variable rate
to a fixed rate of 3.465% plus the applicable margin, which was
2.375% as of December 31, 2011. Proceeds from the issuance will
be used to help fund the existing wind portfolio.
In September 2010, Duke Energy Carolinas converted $143
million of tax-exempt variable-rate demand bonds to tax-exempt term
bonds, which carry a fixed interest rate of 4.375% and mature
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