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Debt and Credit Facilities
 12 Months Ended
Dec. 31, 2014
Debt Disclosure [Abstract]  
Debt and Credit Facilities
DEBT AND CREDIT FACILITIES
Summary of Debt and Related Terms
The following tables summarize outstanding debt.
  
December 31, 2014
(in millions)  
Weighted Average Interest Rate  

 
Duke Energy

Duke Energy Carolinas

Progress Energy

Duke Energy Progress

Duke Energy Florida

Duke Energy Ohio

Duke Energy Indiana

Unsecured debt, maturing 2015 - 2073  
4.92
%
 
$
12,937

$
1,155

$
3,850

$
—

$
150

$
773

$
742

Secured debt, maturing 2016 - 2037  
2.50
%
 
2,806

400

525

300

225

—

—

First mortgage bonds, maturing 2015 - 2044(a)
4.76
%
 
19,180

6,161

9,800

5,475

4,325

900

2,319

Capital leases, maturing 2015 - 2051(b)
5.30
%
 
1,428

27

314

146

168

20

16

Tax-exempt bonds, maturing 2015 - 2041(c)
2.13
%
 
1,296

355

291

291

—

77

573

Notes payable and commercial paper(d)
0.70
%
 
2,989

—

—

—

—

—

—

Money pool/intercompany borrowings  
  
 
—

300

835

—

84

516

221

Fair value hedge carrying value adjustment  
  
 
8

8

—

—

—

—

—

Unamortized debt discount and premium, net(e)
  
 
1,890

(15
)
(26
)
(11
)
(8
)
(29
)
(9
)
Total debt  
4.29
%
 
$
42,534

$
8,391

$
15,589

$
6,201

$
4,944

$
2,257

$
3,862

Short-term notes payable and commercial paper  
  
 
(2,514
)
—

—

—

—

—

—

Short-term money pool borrowings  
 
 
—

—

(835
)
—

(84
)
(491
)
(71
)
Current maturities of long-term debt(f)
  
 
(2,807
)
(507
)
(1,507
)
(945
)
(562
)
(157
)
(5
)
Total long-term debt(f)
4.58
%
 
$
37,213

$
7,884

$
13,247

$
5,256

$
4,298

$
1,609

$
3,786

(a)    Substantially all electric utility property is mortgaged under mortgage bond indentures.
(b)
Duke Energy includes $129 million and $787 million of capital lease purchase accounting adjustments related to Duke Energy Progress and Duke Energy Florida, respectively, related to power purchase agreements that are not accounted for as capital leases in their respective financial statements because of grandfathering provisions in GAAP.
(c)
Substantially all tax-exempt bonds are secured by first mortgage bonds or letters of credit.
(d)
Includes $475 million that was classified as Long-Term Debt on the Consolidated Balance Sheets due to the existence of long-term credit facilities that back-stop these commercial paper balances, along with Duke Energy’s ability and intent to refinance these balances on a long-term basis. The weighted-average days to maturity was 27 days.
(e)
Duke Energy includes $1,975 million in purchase accounting adjustments related to the merger with Progress Energy. See Note 2 for additional information.
(f)
Refer to Note 17 for additional information on amounts from consolidated VIE’s.
  
December 31, 2013
(in millions)  
Weighted Average Interest Rate  

 
Duke Energy

Duke Energy Carolinas

Progress Energy

Duke Energy Progress

Duke Energy Florida

Duke Energy Ohio

Duke Energy Indiana

Unsecured debt, maturing 2014 - 2073  
5.18
%
 
$
13,550

$
1,157

$
4,150

$
—

$
150

$
805

$
744

Secured debt, maturing 2014 - 2037  
2.69
%
 
2,559

400

305

305

—

—

—

First mortgage bonds, maturing 2015 - 2043(a)
4.90
%
 
17,831

6,161

8,450

4,125

4,325

900

2,319

Capital leases, maturing 2014 - 2051(b)
5.23
%
 
1,516

30

327

148

179

27

20

Other debt, maturing 2027  
4.77
%
 
8

—

—

—

—

8

—

Tax-exempt bonds, maturing 2014 - 2041(c)
1.28
%
 
2,356

395

910

669

241

479

573

Notes payable and commercial paper(d)
1.02
%
 
1,289

—

—

—

—

—

—

Money pool/intercompany borrowings  
  
 
—

300

1,213

462

181

43

150

Fair value hedge carrying value adjustment  
  
 
9

9

—

—

—

—

—

Unamortized debt discount and premium, net(e)
  
 
1,977

(16
)
(27
)
(12
)
(9
)
(31
)
(10
)
Total debt  
4.52
%
 
$
41,095

$
8,436

$
15,328

$
5,697

$
5,067

$
2,231

$
3,796

Short-term notes payable and commercial paper  
  
 
(839
)
—

—

—

—

—

—

Short-term money pool borrowings  
 
 
—

—

(1,213
)
(462
)
(181
)
(43
)
—

Current maturities of long-term debt(f)
  
 
(2,104
)
(47
)
(485
)
(174
)
(11
)
(47
)
(5
)
Total long-term debt(f)
4.59
%
 
$
38,152

$
8,389

$
13,630

$
5,061

$
4,875

$
2,141

$
3,791

(a)    Substantially all electric utility property is mortgaged under mortgage bond indentures.
(b)
Duke Energy includes $144 million and $838 million of capital lease purchase accounting adjustments related to Duke Energy Progress and Duke Energy Florida, respectively, related to power purchase agreements that are not accounted for as capital leases in their respective financial statements because of grandfathering provisions in GAAP.
(c)
Substantially all tax-exempt bonds are secured by first mortgage bonds or letters of credit.
(d)
Includes $450 million that was classified as Long-Term Debt on the Consolidated Balance Sheets due to the existence of long-term credit facilities that back-stop these commercial paper balances, along with Duke Energy’s ability and intent to refinance these balances on a long-term basis. The weighted-average days to maturity was 49 days.
(e)
Duke Energy includes $2,067 million in purchase accounting adjustments related to the merger with Progress Energy. See Note 2 for additional information.
(f)
Refer to Note 17 for additional information on amounts from consolidated VIE’s.

Current Maturities of Long-Term Debt
The following table shows the significant components of Current maturities of Long-Term Debt on the Consolidated Balance Sheets. The Duke Energy Registrants currently anticipate satisfying these obligations with cash on hand and proceeds from additional borrowings.
(in millions)
Maturity Date
 
Interest Rate

 
December 31, 2014

Unsecured Debt
 
 
 
 
 
Duke Energy (Parent)
April 2015
 
3.350
%
 
$
450

First Mortgage Bonds
 
 
 
 
 
Duke Energy Ohio
March 2015
 
0.375
%
 
150

Duke Energy Progress
April 2015
 
5.150
%
 
300

Duke Energy Carolinas
October 2015
 
5.300
%
 
500

Duke Energy Florida
November 2015
 
0.650
%
 
250

Duke Energy Florida
December 2015
 
5.100
%
 
300

Duke Energy Progress
December 2015
 
5.250
%
 
400

Tax-exempt Bonds
 
 
 
 
 
Duke Energy Progress
January 2015
 
0.108
%
 
243

Other
 
 
 
 
214

Current maturities of long-term debt
 
 
 
 
$
2,807


Maturities and Call Options
The following table shows the annual maturities of long-term debt for the next five years and thereafter. Amounts presented exclude short-term notes payable and commercial paper and money pool borrowings for the Subsidiary Registrants.
  
December 31, 2014
(in millions)
Duke Energy(a)

 
Duke Energy Carolinas

 
Progress Energy

 
Duke Energy Progress

 
Duke Energy Florida

 
Duke Energy Ohio

 
Duke Energy Indiana

2015
$
2,793

 
$
507

 
$
1,507

 
$
945

 
$
562

 
$
157

 
$
5

2016
2,980

 
756

 
614

 
302

 
12

 
57

 
480

2017
2,452

 
116

 
940

 
453

 
487

 
3

 
3

2018
3,207

 
1,505

 
515

 
3

 
512

 
28

 
153

2019
2,810

 
5

 
1,418

 
606

 
12

 
552

 
62

Thereafter
23,803

 
5,502

 
9,760

 
3,892

 
3,275

 
969

 
3,088

Total long-term debt, including current maturities
$
38,045


$
8,391


$
14,754


$
6,201


$
4,860


$
1,766


$
3,791

(a)
Excludes $1,975 million in purchase accounting adjustments related to the merger with Progress Energy. See Note 2 for additional information.
The Duke Energy Registrants have the ability under certain debt facilities to call and repay the obligation prior to its scheduled maturity. Therefore, the actual timing of future cash repayments could be materially different than as presented above.
Short-Term Obligations Classified as Long-Term Debt
Tax-exempt bonds that may be put to the Duke Energy Registrants at the option of the holder and certain commercial paper issuances and money pool borrowings are classified as Long-Term Debt on the Consolidated Balance Sheets. These tax-exempt bonds, commercial paper issuances and money pool borrowings, which are short-term obligations by nature, are classified as long term due to Duke Energy’s intent and ability to utilize such borrowings as long-term financing. As Duke Energy’s Master Credit Facility and other bilateral letter of credit agreements have non-cancelable terms in excess of one year as of the balance sheet date, Duke Energy has the ability to refinance these short-term obligations on a long-term basis. The following tables show short-term obligations classified as long-term debt.
  
December 31, 2014
(in millions)  
Duke Energy

 
Duke Energy Carolinas

 
Duke Energy Ohio

 
Duke Energy Indiana

Tax-exempt bonds  
$
347

 
$
35

 
$
27

 
$
285

Commercial paper  
475

 
300

 
25

 
150

Secured debt(a)
200

 
—

 
—

 
—

Total  
$
1,022


$
335


$
52


$
435


  
December 31, 2013
(in millions)  
Duke Energy

 
Duke Energy Carolinas

 
Duke Energy Ohio

 
Duke Energy Indiana

Tax exempt bonds  
$
471

 
$
75

 
$
111

 
$
285

Commercial paper  
450

 
300

 
—

 
150

Secured debt(a)
200

 
—

 
—

 
—

Total  
$
1,121


$
375


$
111


$
435

(a)
Instrument has a term of less than one year with the right to extend the maturity date for additional one-year periods with a final maturity date no later than December 2026.
Summary of Significant Debt Issuances
The following tables summarize significant debt issuances (in millions).
 
 
 
 
 
Year Ended December 31, 2014
Issuance Date
Maturity Date
 
Interest Rate

 
Duke Energy (Parent)

 
Duke Energy Progress

 
Duke Energy Florida

 
Duke Energy

Unsecured Debt
 
 
 
 
 
 
 
 
 
 
 
April 2014(a)
April 2024
 
3.750
%
 
600

 
—

 
—

 
600

April 2014(a)(b)
April 2017
 
0.613
%
 
400

 
—

 
—

 
400

June 2014(c)
May 2019
 
11.970
%
 
—

 
—

 
—

 
108

June 2014(c)
May 2021
 
13.680
%
 
—

 
—

 
—

 
110

Secured Debt
 
 
 
 
 
 
 
 
 
 


March 2014(d)
March 2017
 
0.863
%
 
—

 
—

 
225

 
225

July 2014(e)
July 2036
 
5.340
%
 
—

 
—

 
—

 
129

First Mortgage Bonds
 
 
 
 
 
 
 
 
 
 


March 2014(f)
March 2044
 
4.375
%
 
—

 
400

 
—

 
400

March 2014(f)(g)
March 2017
 
0.435
%
 
—

 
250

 
—

 
250

November 2014(h)
December 2044
 
4.150
%
 
—

 
500

 
—

 
500

November 2014(g)(h)
November 2017
 
0.432
%
 
—

 
200

 
—

 
200

Total issuances
 
 
 
 
$
1,000


$
1,350


$
225


$
2,922

(a)
Proceeds were used to redeem $402 million of tax-exempt bonds at Duke Energy Ohio, the repayment of outstanding commercial paper and for general corporate purposes. See Note 13 for additional information related to the redemption of Duke Energy Ohio's tax-exempt bonds.
(b)
The debt is floating rate based on three-month London Interbank Offered Rate (LIBOR) plus a fixed credit spread of 38 basis points.
(c)
Proceeds were used to repay $196 million of debt for International Energy and for general corporate purposes.
(d)
Relates to the securitization of accounts receivable at a subsidiary of Duke Energy Florida. Proceeds were used to repay short-term borrowings under the intercompany money pool borrowing arrangement and for general corporate purposes. See Note 17 for further details.
(e)
Proceeds were used to fund a portion of Duke Energy's prior investment in the existing Wind Star renewables portfolio.
(f)
Proceeds were used to repay short-term borrowings under the intercompany money pool borrowing arrangement and for general corporate purposes.
(g)
The debt is floating rate based on three-month LIBOR plus a fixed credit spread of 20 basis points.
(h)
Proceeds will be used to redeem $450 million of tax-exempt bonds, repay short-term borrowings under the intercompany money pool borrowing arrangement and for general corporate purposes.
  
  
 
  
 
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% 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 floating 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 two renewable energy projects 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 floating rate. Duke Energy has entered into a pay fixed-receive floating 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 floating rate and is denominated in U.S. dollars. Duke Energy has entered into a pay fixed-receive floating 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 for further details.
(j)
Proceeds were used to repay notes payable to affiliated companies as well as for general corporate purposes.
(k)
Proceeds were used to repay $400 million of current maturities.
(l)
The debt is floating rate based on three-month LIBOR and a fixed 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 first mortgage bonds that matured in the first half of 2013.
(n)
The debt is floating rate based on three-month LIBOR plus a fixed credit spread of 14 basis points.
Available Credit Facilities
At December 31, 2014, Duke Energy had a Master Credit Facility with a capacity of $6 billion through December 2018. In January 2015, Duke Energy amended the Master Credit Facility to increase its capacity to $7.5 billion through January 2020. The Duke Energy Registrants, excluding Progress Energy, each have borrowing capacity under the Master Credit Facility up to specified sublimits for each borrower. Duke Energy has the unilateral ability at any time to increase or decrease the borrowing sublimits of each borrower, subject to a maximum sublimit for each borrower. The amount available under the Master Credit Facility has been reduced to backstop the issuances of commercial paper, certain letters of credit and variable-rate demand tax-exempt bonds that may be put to the Duke Energy Registrants at the option of the holder. The table below includes the current borrowing sublimits and available capacity under the Master Credit Facility.
  
December 31, 2014
(in millions)  
Duke Energy

 
Duke Energy (Parent)

 
Duke Energy Carolinas

 
Duke Energy Progress

 
Duke Energy Florida

 
Duke Energy Ohio

 
Duke Energy Indiana

Facility size(a)
$
6,000

 
$
2,250

 
$
1,000

 
$
750

 
$
650

 
$
650

 
$
700

Reduction to backstop issuances  
  
 
  
 
  
 
  
 
  
 
  
 
  
Commercial paper(b)
(2,021
)
 
(1,479
)
 
(300
)
 
—

 
(29
)
 
(38
)
 
(175
)
Outstanding letters of credit  
(70
)
 
(62
)
 
(4
)
 
(2
)
 
(1
)
 
—

 
(1
)
Tax-exempt bonds  
(116
)
 
—

 
(35
)
 
—

 
—

 
—

 
(81
)
Available capacity  
$
3,793


$
709


$
661


$
748


$
620


$
612


$
443

(a)
Represents the sublimit of each borrower.
(b)
Duke Energy issued $475 million of commercial paper and loaned the proceeds through the money pool to Duke Energy Carolinas, Duke Energy Ohio and Duke Energy Indiana. The balances are classified as Long-Term Debt Payable to Affiliated Companies in the Consolidated Balance Sheets.
On February 20, 2015, Duke Energy Carolinas, Duke Energy Progress and DEBS, a wholly owned subsidiary of Duke Energy, each entered into the Plea Agreements in connection with the investigation initiated by the USDOJ. Under the terms of the Plea Agreements, Duke Energy Carolinas and Duke Energy Progress are required to each maintain $250 million of available capacity under the Master Credit Facility as security to meet their obligations under the Plea Agreements, in addition to certain other conditions set out in the Plea Agreements. The Plea Agreements are subject to court approval. See Note 5 for further details.
Other Debt Matters
In September 2013, Duke Energy filed a registration statement (Form S-3) with the Securities and Exchange Commission (SEC). Under this Form S-3, which is uncapped, the Duke Energy Registrants, excluding Progress Energy, may issue debt and other securities in the future at amounts, prices and with terms to be determined at the time of future offerings. The registration statement also allows for the issuance of common stock by Duke Energy.
Duke Energy has an effective Form S-3 with the SEC to sell up to $3 billion of variable denomination floating-rate demand notes, called PremierNotes. The Form S-3 states that no more than $1.5 billion of the notes will be outstanding at any particular time. The notes are offered on a continuous basis and bear interest at a floating rate per annum determined by the Duke Energy PremierNotes Committee, or its designee, on a weekly basis. The interest rate payable on notes held by an investor may vary based on the principal amount of the investment. The notes have no stated maturity date, are non-transferable and may be redeemed in whole or in part by Duke Energy or at the investor’s option at any time. The balance as of December 31, 2014 and 2013 was $968 million and $836 million, respectively. The notes are short-term debt obligations of Duke Energy and are reflected as Notes payable and commercial paper on Duke Energy’s Consolidated Balance Sheets.
At December 31, 2014 and 2013, $767 million and $811 million, respectively, of debt issued by Duke Energy Carolinas was guaranteed by Duke Energy.
Money Pool 
The Subsidiary Registrants, excluding Progress Energy receive support for their short-term borrowing needs through participation with Duke Energy and certain of its subsidiaries in a money pool arrangement. Under this arrangement, those companies with short-term funds may provide short-term loans to affiliates participating in this arrangement. The money pool is structured such that the Subsidiary Registrants, excluding Progress Energy, separately manage their cash needs and working capital requirements. Accordingly, there is no net settlement of receivables and payables between money pool participants. Duke Energy (Parent), may loan funds to its participating subsidiaries, but may not borrow funds through the money pool. Accordingly, as the money pool activity is between Duke Energy and its wholly owned subsidiaries, all money pool balances are eliminated within Duke Energy’s Consolidated Balance Sheets.
Money pool receivable balances are reflected within Notes receivable from affiliated companies on the Subsidiary Registrants’ Consolidated Balance Sheets. Money pool payable balances are reflected within either Notes payable to affiliated companies or Long-Term Debt Payable to Affiliated Companies on the Subsidiary Registrants’ Consolidated Balance Sheets.
Restrictive Debt Covenants
The Duke Energy Registrants’ debt and credit agreements contain various financial and other covenants. The Master Credit Facility contains a covenant requiring the debt-to-total capitalization ratio not exceed 65 percent for each borrower. Failure to meet those covenants beyond applicable grace periods could result in accelerated due dates and/or termination of the agreements. As of December 31, 2014, each of the Duke Energy Registrants were in compliance with all covenants related to their significant debt agreements. In addition, some credit agreements may allow for acceleration of payments or termination of the agreements due to nonpayment, or acceleration of other significant indebtedness of the borrower or some of its subsidiaries. None of the significant debt or credit agreements contain material adverse change clauses.
Other Loans
During 2014 and 2013, Duke Energy and Duke Energy Progress had loans outstanding against the cash surrender value of life insurance policies it owns on the lives of its executives. The amounts outstanding were $603 million, including $44 million at Duke Energy Progress and $571 million, including $48 million at Duke Energy Progress as of December 31, 2014 and 2013, respectively. The amounts outstanding were carried as a reduction of the related cash surrender value that is included in Other within Investments and Other Assets on the Consolidated Balance Sheets.