Duke Energy 2012 Annual Report Download - page 220

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PART II
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.
Combined Notes to Consolidated Financial Statements – (Continued)
Duke Energy Indiana
The following table presents the estimated fair value of short-term and long-term investments for Duke Energy Indiana. Unrealized holding gains and losses on
these investments are recognized immediately and recorded as Regulatory assets or Regulatory liabilities on the Consolidated Balance Sheets.
December 31, 2012 December 31, 2011
(in millions)
Gross
Unrealized
Holding
Gains
Gross
Unrealized
Holding
Losses
Estimated
Fair
Value
Gross
Unrealized
Holding
Gains
Gross
Unrealized
Holding
Losses
Estimated
Fair
Value
Other Investments
Equity securities $9 $— $50 $5 $ 1 $46
Municipal bonds 1—28 1—28
Total Other Investments(a) $10 $— $78 $6 $ 1 $74
Total Investments $10 $— $78 $6 $ 1 $74
(a) These amounts are recorded in Other within Investments and Other Assets on the Consolidated Balance Sheets.
The table below summarizes the maturity date for debt securities held by Duke Energy Indiana.
(in millions) December 31, 2012
Due in one year or less $1
Due after one through fi ve years 21
Due after fi ve through 10 years 3
Due after 10 years 3
Total $ 28
The fair values and gross unrealized losses of available-for-sale debt and equity securities which are in an unrealized loss position for which other-than-temporary
impairment losses have not been recorded, summarized by investment type and length of time that the securities have been in a continuous loss position, are presented
in the table below for Duke Energy Indiana.
December 31, 2012 December 31, 2011
(in millions) Fair Value
Unrealized
Loss
Position
>12 months
Unrealized
Loss
Position
<12 months Fair Value
Unrealized
Loss
Position
>12 months
Unrealized
Loss
Position
<12 months
Other Investments
Equity securities $— $— $— $8 $— $ 1
Municipal bonds 12——3——
Total Other Investments $12 $— $— $11 $— $ 1
Total Investments $12 $— $— $11 $— $ 1
18. VARIABLE INTEREST ENTITIES
A VIE is an entity that is evaluated for consolidation using more than a
simple analysis of voting control. The analysis to determine whether an entity
is a VIE considers contracts with an entity, credit support for an entity, the
adequacy of the equity investment of an entity and the relationship of voting
power to the amount of equity invested in an entity. This analysis is performed
either upon the creation of a legal entity or upon the occurrence of an event
requiring reevaluation, such as a signifi cant change in an entity’s assets or
activities. If an entity is determined to be a VIE, a qualitative analysis of control
determines the party that consolidates a VIE based on what party has the power
to direct the most signifi cant activities of the VIE that impact its economic
performance as well as what party has rights to receive benefi ts or is obligated
to absorb losses that are signifi cant to the VIE. The analysis of the party that
consolidates a VIE is a continual reassessment.
Consolidated VIEs
The table below shows the VIEs that Duke Energy and Duke Energy
Carolinas consolidate and how these entities impact Duke Energy’s and Duke
Energy Carolinas’ respective Consolidated Balance Sheets. None of these
entities are consolidated by Progress Energy, Progress Energy Carolinas,
Progress Energy Florida, Duke Energy Ohio or Duke Energy Indiana.