Duke Energy 2013 Annual Report Download - page 37

PART I
19
obligations. Duke Energy Carolinas, Duke Energy Progress and Duke Energy
Florida have significant obligations in this area and hold significant assets in
these trusts. These assets are subject to market fluctuations and will yield
uncertain returns, which may fall below projected rates of return. Although
a number of factors impact funding requirements, a decline in the market
value of the assets may increase the funding requirements of the obligations
for decommissioning nuclear plants. If Duke Energy Carolinas, Duke Energy
Progress and Duke Energy Florida are unable to successfully manage their NDTF
assets, their financial condition, results of operations and cash flows could be
negatively affected.
Poor investment performance of the Duke Energy pension plan
holdings and other factors impacting pension plan costs could
unfavorably impact the Duke Energy Registrants’ liquidity and results
of operations.
The costs of providing non-contributory defined benefit pension plans
are dependent upon a number of factors, such as the rates of return on plan
assets, discount rates, the level of interest rates used to measure the required
minimum funding levels of the plans, future government regulation and required
or voluntary contributions made to the plans. The Subsidiary Registrants
are allocated their proportionate share of the cost and obligations related to
these plans. Without sustained growth in the pension investments over time
to increase the value of plan assets and, depending upon the other factors
impacting costs as listed above, Duke Energy could be required to fund its
plans with significant amounts of cash. Such cash funding obligations, and the
Subsidiary Registrants’ proportionate share of such cash funding obligations,
could have a material impact on the Duke Energy Registrants’ financial position,
results of operations or cash flows.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.