Duke Energy 2012 Annual Report Download - page 274

PART II
254
DUKE ENERGY CORPORATION
Schedule I - Condensed Parent Company Notes to Financial Statements – (Continued)
In November 2011, Duke Energy entered into a $6 billion, fi ve-year
master credit facility, expiring in November 2016, with $4 billion available at
closing and the remaining $2 billion became available July 2, 2012, following
the closing of the merger with Progress Energy. In October 2012, the Duke
Energy Registrants reached an agreement with banks representing $5.63 billion
of commitments under the master credit facility to extend the expiration date
by one year to November 2017. Through November 2016, the available credit
under this facility remains at $6 billion. The Duke Energy Registrants each have
borrowing capacity under the master credit facility up to specifi ed 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. 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, certain letters of credit and
variable rate demand tax-exempt bonds that may be put to the Company at the
option of the holder. Borrowing sublimits are also reduced for certain amounts
outstanding under the money pool arrangement.
Annual Maturities as of December 31, 2012
(in millions)
2013 $ 706
2014 1,249
2015 449
2016 499
2017 699
Thereafter 2,009
Total long-term debt, including current maturities $ 5,611
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 fi nancial and performance guarantees and
indemnifi cations which are issued in the normal course of business. These
contracts include performance guarantees, stand-by letters of credit, debt
guarantees, surety bonds and indemnifi cations. 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, 2012 was approximately $6.1
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 2013 and 2039, with the remaining
performance guarantees having no contractual expiration. See Note 7 to the
Consolidated Financial Statements, “Guarantees and Indemnifi cations,” for
further discussion of guarantees issued on behalf of unconsolidated affi liates
and third parties.
4. RELATED PARTY TRANSACTIONS
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 affi liates 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 classifi ed as Notes
receivable from affi liated companies on the Condensed Balance Sheets as of
both December 31, 2012 and 2011.
As of December 31, 2012 and 2011, Duke Energy had an intercompany
loan outstanding with Cinergy of $1,590 million and $608 million, respectively,
which is classifi ed within Notes receivable from affi liated companies on the
Condensed Balance Sheets. The $982 million increase in the intercompany loan
during 2012 and the $264 million decrease during 2011 are refl ected as Notes
receivable from affi liated companies 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 income of approximately
$11 million, $4 million and $7 million in 2012, 2011 and 2010, respectively,
which is included in Other Income and Expenses, net on the Condensed
Statements of Operations and Comprehensive Income.
Duke Energy also provides funding to and sweeps cash from subsidiaries
that do not participate in the money pool. For these subsidiaries, the cash is
used in or generated from their operations, capital expenditures, debt payments
and other activities. Amounts funded or received are carried as open accounts,
as either Investment in consolidated subsidiaries or as Other deferred credits
and other liabilities, and do not bear interest. These amounts are included
within Net Cash (Used in) Provided by Operating Activities on the Condensed
Statements of Cash Flows.
During the years ended December 31, 2012, 2011 and 2010, Duke Energy
received equity distributions of $450 million, $299 million and $350 million,
respectively, from Duke Energy Carolinas. These amounts are refl ected
within Net Cash (Used in) Provided by Investing Activities on the Condensed
Statements of Cash Flows.
During the years ended December 31, 2012 and 2011, Duke Energy
paid advances of $16 million and $15 million, respectively, to Cinergy Corp. for
Green Frontier Windpower LLC PTC funding contributions. During the year ended
December 31, 2010, Duke Energy forgave a $29 million advance to Cinergy Corp.