Duke Energy 2014 Annual Report Download - page 74

54
PART II
Year Ended December 31, 2013
Issuance Date Maturity Date
Interest
Rate
Duke
Energy
(Parent)
Duke
Energy
Progress
Duke
Energy
Ohio
Duke
Energy
Indiana
Duke
Energy
Unsecured Debt
January 2013(a) January 2073 5.125% $ 500 $ — $ — $ — $ 500
June 2013(b) June 2018 2.100% 500 — — — 500
August 2013(c)(d) August 2023 11.000% — — — — 220
October 2013(e) October 2023 3.950% 400 — — — 400
Secured Debt
February 2013(f)(g) December 2030 2.043% — — — — 203
February 2013(f) June 2037 4.740% — — — — 220
April 2013(h) April 2026 5.456% — — — — 230
December 2013(i) December 2016 0.852% — 300 — — 300
First Mortgage Bonds
March 2013(j) March 2043 4.100% — 500 — — 500
July 2013(k) July 2043 4.900% — — — 350 350
July 2013(k)(l) July 2016 0.619% — — — 150 150
September 2013(m) September 2023 3.800% — — 300 — 300
September 2013(m)(n) March 2015 0.400% — — 150 — 150
Total issuances $1,400 $ 800 $450 $500 $4,023
(a) Callable after January 2018 at par. Proceeds were used to redeem the $300 million 7.10 percent Cumulative Quarterly Income Preferred Securities (QUIPS) and to repay a portion of outstanding commercial paper and for
general corporate purposes.
(b) Proceeds were used to repay $250 million of current maturities and for general corporate purposes, including the repayment of outstanding commercial paper.
(c) Proceeds were used to repay $200 million of current maturities. The maturity date included above applies to half of the instrument. The remaining half matures in August 2018.
(d) The debt is fl oating rate based on a consumer price index and an overnight funds rate in Brazil. The debt is denominated in Brazilian Real.
(e) Proceeds were used to repay commercial paper as well as for general corporate purposes.
(f) Represents the conversion of construction loans related to a renewable energy project issued in December 2012 to term loans. No cash proceeds were received in conjunction with the conversion. The term loans have varying
maturity dates. The maturity date presented represents the latest date for all components of the respective loans.
(g) The debt is fl oating rate. Duke Energy has entered into a pay fi xed-receive fl oating interest rate swap for 95 percent of the loans.
(h) Represents the conversion of a $190 million bridge loan issued in conjunction with the acquisition of Ibener in December 2012. Duke Energy received incremental proceeds of $40 million upon conversion of the bridge loan.
The debt is fl oating rate and is denominated in U.S. dollars. Duke Energy has entered into a pay fi xed-receive fl oating interest rate swap for 75 percent of the loan.
(i) Relates to the securitization of accounts receivable at a subsidiary of Duke Energy Progress; the proceeds were used to repay short-term debt. See Note 17 to the Consolidated Financial Statements, “Variable Interest Entities”
for further details.
(j) Proceeds were used to repay notes payable to affi liated companies as well as for general corporate purposes.
(k) Proceeds were used to repay $400 million of current maturities.
(l) The debt is fl oating rate based on three month LIBOR and a fi xed credit spread of 35 basis points.
(m) Proceeds were used for general corporate purposes including the repayment of short-term notes payable, a portion of which was incurred to fund the retirement of $250 million of fi rst mortgage bonds that matured in the fi rst
half of 2013.
(n) The debt is fl oating rate based on three month LIBOR plus a fi xed credit spread of 14 basis points.
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
indemnifi cations.
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 indemnifi cation 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
Indemnifi cations,” 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 fl ows or fi nancial position.
Other than the guarantee arrangements discussed above and normal
operating lease arrangements, Duke Energy does not have any material
off-balance sheet fi nancing entities or structures. For additional information
on these commitments, see Note 5 to the Consolidated Financial Statements,
“Commitments and Contingencies.”