Duke Energy 2012 Annual Report Download - page 135

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PART II
Combined Notes to Consolidated Financial Statements – (Continued)
DUKE ENERGY CORPORATION • DUKE ENERGY CAROLINAS, LLC • PROGRESS ENERGY, INC. • CAROLINA POWER & LIGHT COMPANY d/b/a PROGRESS ENERGY
CAROLINAS, INC. • FLORIDA POWER CORPORATION d/b/a PROGRESS ENERY FLORIDA, INC. • DUKE ENERGY OHIO, INC. • DUKE ENERGY INDIANA, INC.
Pension and Other Post-Retirement Benefi t Plans.
Duke Energy maintains qualifi ed, non-qualifi ed and other post-retirement
benefi t plans. Eligible employees of the Subsidiary Registrants participate in the
respective Duke Energy or Progress Energy qualifi ed, non-qualifi ed and other
post-retirement benefi t plans and are allocated their proportionate share of
benefi t costs.
See Note 23 for information related to Duke Energy’s benefi t plans,
including certain accounting policies associated with these plans.
Severance and Special Termination Benefi ts.
Duke Energy has an ongoing severance plan under which, in general,
the longer a terminated employee worked prior to termination the greater the
amount of severance benefi ts. The Duke Energy Registrants record a liability for
involuntary severance once an involuntary severance plan is committed to by
management, or sooner, if involuntary severances are probable and the related
severance benefi ts can be reasonably estimated. For involuntary severance
benefi ts that are incremental to its ongoing severance plan benefi ts, Duke
Energy measures the obligation and records the expense at its fair value at the
communication date if there are no future service requirements, or, if future
service is required to receive the termination benefi t, ratably over the service
period. From time to time, Duke Energy offers special termination benefi ts under
voluntary severance programs. Special termination benefi ts are measured
upon employee acceptance and recorded immediately absent a signifi cant
retention period. If a signifi cant retention period exists, the cost of the special
termination benefi ts are recorded ratably over the remaining service periods of
the affected employees. Employee acceptance of voluntary severance benefi ts
is determined by management based on the facts and circumstances of the
special termination benefi ts being offered.
See Note 21 for further information.
Guarantees.
Upon issuance or modifi cation of a guarantee, the Duke Energy
Registrants recognize a liability at the time of issuance or material modifi cation
for the estimated fair value of the obligation it assumes under that guarantee,
if any. Fair value is estimated using a probability-weighted approach. The
Duke Energy Registrants reduce the obligation over the term of the guarantee
or related contract in a systematic and rational method as risk is reduced
under the obligation. Any additional contingent loss for guarantee contracts
subsequent to the initial recognition of a liability in accordance with applicable
accounting guidance is accounted for and recognized at the time a loss is
probable and the amount of the loss can be reasonably estimated.
The Duke Energy Registrants have entered into various indemnifi cation
agreements related to purchase and sale agreements and other types of
contractual agreements with vendors and other third parties. These agreements
typically cover environmental, tax, litigation and other matters, as well as
breaches of representations, warranties and covenants. Typically, claims may
be made by third parties for various periods of time, depending on the nature of
the claim. Potential exposure under these indemnifi cation agreements can range
from a specifi ed to an unlimited dollar amount, depending on the nature of the
claim and the particular transaction.
See Note 7 for further information.
Other Current and Non-Current Assets and Liabilities.
Other within Current Assets includes current regulatory assets, which
are disclosed in Note 4, and the current portion of deferred tax assets, which
are disclosed in Note 24. Additionally, the following are included in Other within
Current Assets or Current Liabilities in the Consolidated Balance Sheets of
the Duke Energy Registrants at December 31, 2012 and 2011. The amounts
presented exceeded 5% of Current assets or 5% of Current liabilities unless
otherwise noted.
December 31,
(in millions) Location 2012 2011
Duke Energy
Accrued compensation Current Liabilities $725 $407
Duke Energy Carolinas
Accrued compensation Current Liabilities $203 $163
Collateral liabilities(a) Current Liabilities 105 94
Progress Energy
Customer deposits Current Liabilities $342 $340
Accrued compensation(a) Current Liabilities 304 155
Derivative liabilities Current Liabilities 221 382
Progress Energy Carolinas
Customer deposits Current Liabilities $120 $116
Accrued compensation(a) Current Liabilities 160 82
Derivative liabilities(b) Current Liabilities 94 123
Progress Energy Florida
Customer deposits Current Liabilities $222 $224
Accrued compensation(a) Current Liabilities 95 49
Derivative liabilities Current Liabilities 127 220
Duke Energy Ohio
Collateral assets(a) Current Assets $ 99 $ 31
Duke Energy Indiana
Derivative liabilities(a) Current Liabilities $ 63 $1
(a) Does not exceed 5% of Total current assets or Total current liabilities at December 31, 2011.
(b) Does not exceed 5% of Total current assets or Total current liabilities at December 31, 2012.