Duke Energy 2013 Annual Report Download - page 71

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PART II
Year Ended December 31, 2012
Issuance Date Maturity Date
Interest
Rate
Duke
Energy
(Parent)
Duke
Energy
Carolinas
Progress
Energy
(Parent)
Duke
Energy
Progress
Duke
Energy
Florida
Duke
Energy
Indiana
Duke
Energy
Unsecured Debt
March 2012(a) April 2022 3.15% $ — $ — $450 $ — $ — $ — $ 450
August 2012(b) August 2017 1.63% 700 — — — — — 700
August 2012(b) August 2022 3.05% 500 — — — — — 500
Secured Debt
April 2012(c) September 2024 2.64% 330 — — — — — 330
December 2012(d) March 2013 2.77% 203 — — — — — 203
December 2012(d) March 2013 4.74% 220 — — — — — 220
December 2012(e) June 2013 1.01% 190 — — — — — 190
December 2012(e) December 2025 1.56% 200 — — — — — 200
First Mortgage Bonds
March 2012(f) March 2042 4.20% — — — — — 250 250
May 2012(g) May 2022 2.80% — — — 500 — — 500
May 2012(g) May 2042 4.10% — — — 500 — — 500
September 2012(h) September 2042 4.00% — 650 — — — — 650
November 2012(i) November 2015 0.65% — — — — 250 — 250
November 2012(i) November 2042 3.85% — — — — 400 — 400
Total Issuances $2,343 $ 650 $450 $1,000 $650 $250 $5,343
(a) Proceeds were used to repay current maturities of $450 million.
(b) Proceeds were used to repay current maturities of $500 million, as well as for general corporate purposes, including the repayment of commercial paper.
(c) Proceeds were used to reimburse construction costs for DS Cornerstone, LLC joint venture wind projects. Debt was subsequently deconsolidated upon execution of a joint venture. See Note 17 for further details.
(d) Proceeds were used to fund the existing Los Vientos wind power portfolio.
(e) Debt issuances were executed in connection with the acquisition of Ibener. Both loans were collateralized with cash deposits equal to 101 percent of the loan amounts. See Note 2 for further details.
(f) Proceeds were used to repay a portion of outstanding short-term debt.
(g) Proceeds were used to repay current maturities of $500 million, a portion of outstanding commercial paper and notes payable to affiliated companies.
(h) Proceeds were used to repay current maturities of $420 million, as well as for general corporate purposes, including the funding of capital expenditures.
(i) Proceeds will be used to repay current maturities of $425 million, as well as for general corporate purposes.
Off-Balance Sheet Arrangements
Duke Energy and certain of its subsidiaries enter into guarantee
arrangements in the normal course of business to facilitate commercial
transactions with third parties. These arrangements include performance
guarantees, stand-by letters of credit, debt guarantees, surety bonds and
indemnifications.
Most of the guarantee arrangements entered into by Duke Energy enhance
the credit standing of certain subsidiaries, non-consolidated entities or less
than wholly owned entities, enabling them to conduct business. As such, these
guarantee arrangements involve elements of performance and credit risk, which
are not always included on the Consolidated Balance Sheets. The possibility
of Duke Energy, either on its own or on behalf of Spectra Energy Capital, LLC
(Spectra Capital) through indemnification agreements entered into as part of
the January 2, 2007 spin-off of Spectra Energy Corp (Spectra Energy), having
to honor its contingencies is largely dependent upon the future operations of
the subsidiaries, investees and other third parties, or the occurrence of certain
future events.
Duke Energy performs ongoing assessments of their respective guarantee
obligations to determine whether any liabilities have been incurred as a result of
potential increased non-performance risk by third parties for which Duke Energy
has issued guarantees.
See Note 7 to the Consolidated Financial Statements, “Guarantees and
Indemnifications,” for further details of the guarantee arrangements.
Issuance of these guarantee arrangements is not required for the majority
of Duke Energy’s operations. Thus, if Duke Energy discontinued issuing these
guarantees, there would not be a material impact to the consolidated results of
operations, cash flows or financial position.
Other than the guarantee arrangements discussed above and normal
operating lease arrangements, Duke Energy does not have any material
off-balance sheet financing entities or structures. For additional information
on these commitments, see Note 5 to the Consolidated Financial Statements,
“Commitments and Contingencies.”