Duke Energy 2015 Annual Report Download - page 196

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PART II
DUKE ENERGY CORPORATION • DUKE ENERGY CAROLINAS, LLC • PROGRESS ENERGY, INC. •
DUKE ENERGY PROGRESS, LLC. • DUKE ENERGY FLORIDA, LLC. • DUKE ENERGY OHIO, INC. • DUKE ENERGY INDIANA, INC.
Combined Notes to Consolidated Financial Statements – (Continued)
OTHER FAIR VALUE DISCLOSURES
The fair value and book value of long-term debt, including current maturities, is summarized in the following table. Estimates determined are not necessarily
indicative of amounts that could have been settled in current markets. Fair value of long-term debt uses Level 2 measurements.
December 31, 2015 December 31, 2014
(in millions) Book Value Fair Value Book Value Fair Value
Duke Energy $ 39,569 $42,537 $39,868 $44,566
Duke Energy Carolinas 8,367 9,156 8,353 9,626
Progress Energy 14,464 15,856 14,668 16,951
Duke Energy Progress 6,518 6,757 6,170 6,696
Duke Energy Florida 4,266 4,908 4,823 5,767
Duke Energy Ohio 1,598 1,724 1,760 1,970
Duke Energy Indiana 3,768 4,219 3,769 4,456
At both December 31, 2015 and December 31, 2014, fair value of cash and cash equivalents, accounts and notes receivable, accounts payable, notes payable
and commercial paper, and non-recourse notes payable of variable interest entities are not materially different from their carrying amounts because of the short-term
nature of these instruments and/or because the stated rates approximate market rates.
17. VARIABLE INTEREST ENTITIES
A VIE is an entity that is evaluated for consolidation using more than
a simple analysis of voting control. The analysis to determine whether an
entity is a VIE considers contracts with an entity, credit support for an entity,
the adequacy of the equity investment of an entity and the relationship of
voting power to the amount of equity invested in an entity. This analysis is
performed either upon the creation of a legal entity or upon the occurrence of
an event requiring reevaluation, such as a significant change in an entity’s
assets or activities. A qualitative analysis of control determines the party that
consolidates a VIE. This assessment is based on (i) what party has the power
to direct the most significant activities of the VIE that impact its economic
performance and (ii) what party has rights to receive benefits or is obligated
to absorb losses that are significant to the VIE. The analysis of the party that
consolidates a VIE is a continual reassessment.
No financial support was provided to any of the consolidated VIEs during
the years ended December 31, 2015, 2014 and 2013, or is expected to be
provided in the future, that was not previously contractually required.