Duke Energy 2013 Annual Report Download - page 159

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PART II
DUKE ENERGY CORPORATION • DUKE ENERGY CAROLINAS, LLC • PROGRESS ENERGY, INC. •
DUKE ENERGY PROGRESS, INC. • DUKE ENERGY FLORIDA, INC. • DUKE ENERGY OHIO, INC. • DUKE ENERGY INDIANA, INC.
Combined Notes to Consolidated Financial Statements – (Continued)
11. GOODWILL AND INTANGIBLE ASSETS
GOODWILL
The following tables present goodwill by reportable operating segment for
Duke Energy and Duke Energy Ohio.
Duke Energy
(in millions)
Regulated
Utilities
International
Energy
Commercial
Power Total
Balance at December 31, 2012
Goodwill $ 15,950 $ 353 $ 933 $17,236
Accumulated impairment charges — — (871) (871)
Balance at December 31, 2012,
as adjusted for accumulated
impairment charges 15,950 353 62 16,365
Acquisitions(a) 2 (5) 2 (1)
Foreign exchange and other changes (2) (22) — (24)
Balance at December 31, 2013
Goodwill 15,950 326 935 17,211
Accumulated impairment charges — — (871) (871)
Balance at December 31, 2013,
as adjusted for accumulated
impairment charges $ 15,950 $ 326 $ 64 $16,340
(a) Amounts represent purchase price adjustments related to the Progress Energy merger at Regulated
Utilities, the Chilean hydro acquisition at International Energy and a minor renewables acquisition at
Commercial Power. See Note 2 for further information on purchase price adjustments related to the
Progress Energy merger.
Duke Energy Ohio
(in millions)
Regulated
Utilities
Commercial
Power Total
Balance at December 31, 2012
Goodwill $1,137 $ 1,188 $ 2,325
Accumulated impairment charges (216) (1,188) (1,404)
Balance at December 31, 2012, as adjusted
for accumulated impairment charges 921 — 921
Foreign exchange and other changes (1) — (1)
Balance at December 31, 2013
Goodwill 1,136 1,188 2,324
Accumulated impairment charges (216) (1,188) (1,404)
Balance at December 31, 2013, as adjusted
for accumulated impairment charges $ 920 $ — $ 920
Progress Energy
Progress Energy had Goodwill of $3,655 million as of December 31, 2013
and 2012, for which there are no accumulated impairment charges.
Impairment Analysis
As the fair values of the reporting units of Duke Energy, Progress Energy
and Duke Energy Ohio exceeded their respective carrying values at the date of
the annual goodwill impairment analysis, no impairment charges were recorded.
In addition, at December 31, 2013, goodwill for the Renewables reporting
unit within Commercial Power was analyzed for impairment primarily as a
result of the expiration of wind production tax credits at the end of 2013. Based
on results of the fourth quarter 2013 impairment analysis, the fair value of
the Renewables reporting unit exceeded its carrying value and no impairment
was recorded. The fair value of the Renewables reporting unit is impacted by a
multitude of factors, including legislative actions related to tax credit extensions,
long-term growth rate assumptions, the market price of power and discount
rates. Management continues to monitor these assumptions for any indicators
that the fair value of the reporting unit could be below the carrying value, and
will assess goodwill for impairment as appropriate.
INTANGIBLE ASSETS
The following tables show the carrying amount and accumulated amortization of intangible assets.
December 31, 2013
(in millions)
Duke
Energy
Duke
Energy
Carolinas
Progress
Energy
Duke
Energy
Progress
Duke
Energy
Florida
Duke
Energy
Ohio
Duke
Energy
Indiana
Emission allowances $ 63 $ 1 $ 21 $ 3 $ 18 $ 20 $ 21
Renewable energy certificates 82 16 64 64 — 2 —
Gas, coal and power contracts 180 — — — — 156 24
Wind development rights 86 — — — — — —
Other 76 — — — — — —
Total gross carrying amounts 487 17 85 67 18 178 45
Accumulated amortization — gas, coal and power contracts (73) — — — — (60) (13)
Accumulated amortization — wind development rights (12) — — — — — —
Accumulated amortization — other (24) — — — — — —
Total accumulated amortization (109) — — — — (60) (13)
Total intangible assets, net $ 378 $ 17 $ 85 $ 67 $ 18 $ 118 $ 32