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Employee Benefit Obligations
 12 Months Ended
Dec. 31, 2012
Employee Benefit Plans [Abstract]  
Employee Benefit Obligations

23. EMPLOYEE BENEFIT PLANS

 

Defined Benefit Retirement Plans

Duke Energy and its subsidiaries (including legacy Progress Energy and Cinergy businesses) maintain, and the Subsidiary Registrants participate in, qualified, non-contributory defined benefit retirement plans. The plans cover most U.S. employees using a cash balance formula. Under a cash balance formula, a plan participant accumulates a retirement benefit consisting of pay credits that are based upon a percentage (which varies with age and years of service) of current eligible earnings and current interest credits. Certain legacy Progress Energy and legacy Cinergy U.S. employees are covered under plans that use a final average earnings formula. Under the legacy Cinergy final average earnings formula, a plan participant accumulates a retirement benefit equal to a percentage of their highest 3-year average earnings, plus a percentage of their highest 3-year average earnings in excess of covered compensation per year of participation (maximum of 35 years), plus a percentage of their highest 3-year average earnings times years of participation in excess of 35 years. Under the legacy Progress Energy final average earnings formula, a plan participant accumulates a retirement benefit equal to a percentage of their highest 4-year average earnings, plus a percentage of their highest 4-year average earnings in excess of covered compensation per year of participation (maximum of 35 years), plus a percentage of their highest 4-year average earnings times years of participation in excess of 35 years. Duke Energy also maintains, and the Subsidiary Registrants participate in, non-qualified, non-contributory defined benefit retirement plans which cover certain executives.

Actuarial gains and losses subject to amortization are amortized over the average remaining service period of the active employees. The average remaining service period of active employees covered by the qualified retirement plans is nine years for Duke Energy, Duke Energy Carolinas, Duke Energy Ohio and Duke Energy Indiana and eight years for Progress Energy, Progress Energy Carolinas and Progress Energy Florida. The average remaining service period of active employees covered by the non-qualified retirement plans is thirteen years for Duke Energy and Progress Energy, nine years for Duke Energy Carolinas, Duke Energy Ohio and Duke Energy Indiana, twelve years for Progress Energy Carolinas and seventeen years for Progress Energy Florida . Duke Energy determines the market-related value of plan assets using a calculated value that recognizes changes in fair value of the plan assets in a particular year on a straight line basis over the next five years.

Net periodic benefit costs disclosed in the tables below for the qualified, non-qualified and other post-retirement benefit plans represent the cost of the respective benefit plan for the periods presented. However, portions of the net periodic benefit costs disclosed in the tables below have been capitalized as a component of property, plant and equipment.

Duke Energy uses a December 31 measurement date for its defined benefit retirement plan assets and obligations.

Amounts presented in the tables below for the Subsidiary Registrants represent the amounts of pension and other post-retirement benefit cost allocated by Duke Energy for employees of the Subsidiary Registrants. Additionally, the Subsidiary Registrants are allocated their proportionate share of pension and post-retirement benefit cost for employees of Duke Energy's shared services affiliate that provide support to the Subsidiary Registrants. These allocated amounts are included in the governance and shared service costs discussed in Note 14.

Duke Energy's policy is to fund amounts on an actuarial basis to provide assets sufficient to meet benefit payments to be paid to plan participants. The following table includes information related to the Duke Energy Registrants' contributions to its U.S. qualified defined benefit pension plans.

(in millions)Duke Energy Duke Energy Carolinas Progress Energy Progress Energy Carolinas Progress Energy Florida Duke Energy Ohio Duke Energy Indiana
Anticipated Contributions:                    
 2013$ 350 $ - $ 320 $ 94 $ 121 $ 18 $ -
Contributions Made:                    
 2012$ 304 $ - $ 346 $ 141 $ 128 $ - $ -
 2011  200   33   334   217   112   48   52
 2010  400   158   129   95   34   45   46

Qualified Pension Plans
                      
Components of Net Periodic Pension Costs: Qualified Pension Plans
                      
  Year Ended December 31, 2012
(in millions)Duke Energy Duke Energy Carolinas Progress Energy Progress Energy Carolinas Progress Energy Florida Duke Energy Ohio Duke Energy Indiana
Service cost$ 122 $ 35 $ 63 $ 25 $ 30 $ 6 $ 9
Interest cost on project benefit obligation  307   90   127   58   56   31   30
Expected return on plan assets  (472)   (146)   (188)   (96)   (81)   (45)   (46)
Amortization of prior service cost (credit)  10   1   9   8   (1)   1   1
Amortization of actuarial loss  144   45   93   37   48   10   15
Other  6   2   2   1   1   -   -
Net periodic pension costs(a)(b)$ 117 $ 27 $ 106 $ 33 $ 53 $ 3 $ 9
                      
  Year Ended December 31, 2011
(in millions)Duke Energy Duke Energy Carolinas Progress Energy Progress Energy Carolinas Progress Energy Florida Duke Energy Ohio Duke Energy Indiana
Service cost$ 96 $ 37 $ 51 $ 20 $ 24 $ 7 $ 11
Interest cost on project benefit obligation  232   85   132   61   57   32   30
Expected return on plan assets  (384)   (150)   (182)   (91)   (78)   (44)   (45)
Amortization of prior service cost  6   1   7   6   -   1   2
Amortization of actuarial loss  77   37   66   25   33   7   14
Other  18   7   -   -   -   2   2
Net periodic pension costs(a)(b)$ 45 $ 17 $ 74 $ 21 $ 36 $ 5 $ 14
                      
  Year Ended December 31, 2010
(in millions)Duke Energy Duke Energy Carolinas Progress Energy Progress Energy Carolinas Progress Energy Florida Duke Energy Ohio Duke Energy Indiana
Service cost$ 96 $ 36 $ 46 $ 18 $ 22 $ 7 $ 11
Interest cost on project benefit obligation  248   91   131   62   56   33   32
Expected return on plan assets  (378)   (147)   (157)   (77)   (68)   (44)   (45)
Amortization of prior service cost  5   1   7   6   -   1   2
Amortization of actuarial loss  50   27   49   16   31   4   12
Settlement and contractual termination benefit cost  13   -   -   -   -   -   -
Other  18   8   -   -   -   2   2
Net periodic pension costs(a)(b)$ 52 $ 16 $ 76 $ 25 $ 41 $ 3 $ 14
                      
(a)Duke Energy amounts exclude $14 million, $14 million and $16 million for the years ended December 31, 2012, 2011, and 2010, respectively, of regulatory asset amortization resulting from purchase accounting adjustments associated with Duke Energy’s merger with Cinergy in April 2006.
(b)Duke Energy Ohio amounts exclude $6 million, $7 million and $7 million for the years ended December 31, 2012, 2011, and 2010, respectively, of regulatory asset amortization resulting from purchase accounting adjustments associated with Duke Energy’s merger with Cinergy in April 2006.
                      

Other Changes in Plan Assets and Projected Benefit Obligations
                      
Recognized in Accumulated Other Comprehensive Income and Regulatory Assets: Qualified Pension Plans
                      
  Year Ended December 31, 2012
(in millions)Duke Energy Duke Energy Carolinas Progress Energy Progress Energy Carolinas Progress Energy Florida Duke Energy Ohio Duke Energy Indiana
Regulatory assets, net increase (decrease)$ 976 $ (111) $ (76) $ (89) $ 23 $ 22 $ 17
Accumulated other comprehensive (income) loss                    
 Deferred income tax asset$ 14 $ - $ - $ - $ - $ 15 $ -
 Reclassification of actuarial losses to an affiliate  -   -   -   -   -   (48)   -
 Actuarial (gains) losses arising during the year  (2)   -   3   -   -   -   -
 Prior year service credit arising during the year  (7)   -   -   -   -   -   -
 Amortization of prior year actuarial losses  (13)   -   (2)   -   -   (3)   -
 Reclassification of actuarial losses to regulatory assets  (20)   -   -   -   -   (1)   -
 Amortization of prior year prior service cost  (1)   -   (1)   -   -   (1)   -
Net amount recognized in accumulated other comprehensive (income) loss$ (29) $ - $ - $ - $ - $ (38) $ -
                      
  Year Ended December 31, 2011
(in millions)Duke Energy Duke Energy Carolinas Progress Energy Progress Energy Carolinas Progress Energy Florida Duke Energy Ohio Duke Energy Indiana
Regulatory assets, net increase (decrease)$ 152 $ 65 $ 298 $ 98 $ 114 $ 11 $ 5
Accumulated other comprehensive (income) loss                    
 Deferred income tax (asset) liability$ (10) $ - $ 24 $ - $ - $ 1 $ -
 Actuarial losses arising during the year  60   -   13   -   -   10   -
 Amortization of prior year actuarial losses  (8)      (8)   -   -   (3)   
 Reclassification of actuarial gains (losses) to regulatory assets  8   -   (66)   -   -   -   -
 Amortization of prior year service cost  (1)   -   (1)   -   -   -   -
Net amount recognized in accumulated other comprehensive (income) loss$ 49 $ - $ (38) $ - $ - $ 8 $ -
                      

Reconciliation of Funded Status to Net Amount Recognized: Qualified Pension Plans
                      
  Year Ended December 31, 2012
(in millions)Duke Energy Duke Energy Carolinas Progress Energy Progress Energy Carolinas Progress Energy Florida Duke Energy Ohio Duke Energy Indiana
Change in Projected Benefit Obligation                    
Obligation at prior measurement date$ 4,880 $ 1,831 $ 2,729 $ 1,263 $ 1,179 $ 627 $ 613
Obligation assumed from acquisition  2,850   -   -   -   -   -   -
Service cost  122   35   63   25   30   6   9
Interest cost  307   90   127   58   56   31   30
Actuarial losses  489   73   166   34   120   68   76
Transfers  -   176   -   -   -   (167)   -
Plan amendments  (170)   (52)   (64)   (43)   (10)   -   (1)
Benefits paid  (448)   (125)   (153)   (73)   (66)   (38)   (43)
Obligation at measurement date$ 8,030 $ 2,028 $ 2,868 $ 1,264 $ 1,309 $ 527 $ 684
Accumulated Benefit Obligation at December 31$ 7,843 $ 2,028 $ 2,820 $ 1,264 $ 1,261 $ 501 $ 653
Change in Fair Value of Plan Assets                    
Plan assets at prior measurement date$ 4,741 $ 1,820 $ 2,191 $ 1,091 $ 969 $ 565 $ 582
Assets received from acquisition  2,285   -   -   -   -   -   -
Actual return on plan assets  872   280   263   130   119   86   88
Benefits paid  (448)   (125)   (153)   (73)   (66)   (38)   (43)
Transfers  -   176   -   -   -   (167)   -
Employer contributions  304   -   346   141   128   -   -
Plan assets at measurement date$ 7,754 $ 2,151 $ 2,647 $ 1,289 $ 1,150 $ 446 $ 627
                      
  Year Ended December 31, 2011
(in millions)Duke Energy Duke Energy Carolinas Progress Energy Progress Energy Carolinas Progress Energy Florida Duke Energy Ohio Duke Energy Indiana
Change in Projected Benefit Obligation                    
Obligation at prior measurement date$ 4,861 $ 1,786 $ 2,450 $ 1,155 $ 1,043 $ 651 $ 628
Service cost  96   37   51   20   24   7   11
Interest cost  232   85   132   61   57   32   30
Actuarial (gains) losses  (7)   20   221   81   110   (9)   (11)
Transfers  -   (5)   -   -   -   (17)   1
Plan amendments  18   13   -   -   -   -   (1)
Settlement and contractual termination benefit cost  -   -   (6)   -   -   -   -
Benefits paid  (320)   (105)   (119)   (54)   (55)   (37)   (45)
Obligation at measurement date$ 4,880 $ 1,831 $ 2,729 $ 1,263 $ 1,179 $ 627 $ 613
Accumulated Benefit Obligation at December 31$ 4,661 $ 1,787 $ 2,692 $ 1,263 $ 1,142 $ 602 $ 582
Change in Fair Value of Plan Assets                    
Plan assets at prior measurement date$ 4,797 $ 1,837 $ 1,891 $ 884 $ 871 $ 565 $ 565
Actual return on plan assets  64   60   91   44   41   6   9
Benefits paid  (320)   (105)   (125)   (54)   (55)   (37)   (45)
Transfers  -   (5)   -   -   -   (17)   1
Employer contributions  200   33   334   217   112   48   52
Plan assets at measurement date$ 4,741 $ 1,820 $ 2,191 $ 1,091 $ 969 $ 565 $ 582
                      

Amounts Recognized in the Consolidated Balance Sheets: Qualified Pension Plans
                      
  December 31, 2012
(in millions)Duke Energy Duke Energy Carolinas Progress Energy Progress Energy Carolinas Progress Energy Florida Duke Energy Ohio Duke Energy Indiana
Prefunded pension(a)$ 163 $ 123 $ - $ 25 $ - $ - $ -
Accrued pension liability  (439)   -   (221)   -   (159)   (81)   (57)
Net amount recognized$ (276) $ 123 $ (221) $ 25 $ (159) $ (81) $ (57)
Regulatory assets$ 2,387 $ 582 $ 1,079 $ 472 $ 541 $ 144 $ 246
Accumulated other comprehensive (income) loss                    
 Deferred income tax asset$ (59) $ - $ (9) $ - $ - $ - $ -
 Prior service credit  (4)   -   -   -   -   -   -
 Net actuarial loss  166   -   26   -   -   -   -
Net amounts recognized in accumulated other comprehensive (income) loss(b)$ 103 $ - $ 17 $ - $ - $ - $ -
Amounts to be recognized in net periodic pension expense in the next year                    
 Unrecognized net actuarial loss$ 216 $ 46 $ 101 $ 46 $ 49 $ 12 $ 23
 Unrecognized prior service (credit) cost  (12)   (6)   (4)   (1)   (2)   1   1
                      
  December 31, 2011
(in millions)Duke Energy Duke Energy Carolinas Progress Energy Progress Energy Carolinas Progress Energy Florida Duke Energy Ohio Duke Energy Indiana
Accrued pension liability$ (139) $ (11) $ (538) $ (173) $ (210) $ (62) $ (31)
Net amount recognized$ (139) $ (11) $ (538) $ (173) $ (210) $ (62) $ (31)
Regulatory assets$ 1,411 $ 693 $ 1,155 $ 561 $ 518 $ 122 $ 229
Accumulated other comprehensive (income) loss                    
 Deferred income tax asset$ (73) $ - $ (9) $ - $ - $ (15) $ -
 Prior service cost  4   -   1   -   -   1   -
 Net actuarial loss  201   -   25   -   -   52   -
Net amounts recognized in accumulated other comprehensive (income) loss(b)$ 132 $ - $ 17 $ - $ - $ 38 $ -
                      
(a)Included in Other within Investments and Other Assets on the Consolidated Balance Sheets.
(b)Excludes accumulated other comprehensive income of $9 million and $19 million as of December 31, 2012 and 2011, respectively, net of tax, associated with a Brazilian retirement plan.
                      

Additional Information: Qualified Pension Plans
                      
Information for Plans with Accumulated Benefit Obligation in Excess of Plan Assets
                      
  December 31, 2012
(in millions)Duke Energy Duke Energy Carolinas Progress Energy Progress Energy Carolinas Progress Energy Florida Duke Energy Ohio Duke Energy Indiana
Projected benefit obligation$ 5,396 $ - $ 2,868 $ - $ 1,309 $ 527 $ 684
Accumulated benefit obligation  5,201   -   2,820   -   1,261   501   653
Fair value of plan assets  4,957   -   2,647   -   1,150   446   627
                      
  December 31, 2011
(in millions)Duke Energy Duke Energy Carolinas Progress Energy Progress Energy Carolinas Progress Energy Florida Duke Energy Ohio Duke Energy Indiana
Projected benefit obligation$ - $ - $ 2,729 $ 1,263 $ 1,179 $ - $ -
Accumulated benefit obligation  -   -   2,692   1,263   1,142   -   -
Fair value of plan assets  -   -   2,191   1,091   969   -   -
                      

Assumptions Used for Pension Benefits Accounting
          
Duke Energy(a)        
          
  December 31,
 2012 2011 2010
Benefit Obligations        
Discount rate 4.10%  5.10%  5.00%
Salary increase (graded by age) 4.30%  4.40%  4.10%
Net Periodic Benefit Cost        
Discount rate4.60-5.10%  5.00%  5.50%
Salary increase 4.40%  4.10%  4.50%
Expected long-term rate of return on plan assets 8.00%  8.25%  8.50%
          
(a)For Progress Energy plans, the assumptions used in 2012 to determine expense reflect remeasurement as of July 1, 2012 due to the merger between Duke Energy and Progress Energy.

Progress Energy(a)(b)        
          
  December 31,
 2012 2011 2010
Benefit Obligations        
Discount rate 4.10%  4.75%  5.55%
Salary increase (Bargaining plan) 4.00%  4.00%  4.50%
Net Periodic Benefit Cost        
Discount rate4.60-4.75%  5.55%  6.00%
Salary increase (Bargaining plan)4.00%  4.50%  4.50%
Expected long-term rate of return on plan assets8.00-8.25%  8.50%  8.75%
          
(a)The assumptions used in 2012 to determine expense reflect remeasurement as of July 1, 2012 due to the merger between Duke Energy and Progress Energy.
(b)The weighted-average actuarial assumptions used by Progress Energy Carolinas and Progress Energy Florida were not materially different from the assumptions above, as applicable.
          
 The discount rate used to determine the current year pension obligation and following year’s pension expense is based on a bond
selection-settlement portfolio approach. This approach develops a discount rate by selecting a portfolio of high quality corporate bonds that generate sufficient cash flow to provide for the projected benefit payments of the plan. The selected bond portfolio is derived from a universe of non-callable corporate bonds rated Aa quality or higher. After the bond portfolio is selected, a single interest rate is determined that equates the present value of the plan’s projected benefit payments discounted at this rate with the market value of the bonds selected.

Expected Benefit Payments: Qualified Pension Plans
                      
(in millions)Duke Energy Duke Energy Carolinas Progress Energy Progress Energy Carolinas Progress Energy Florida Duke Energy Ohio Duke Energy Indiana
Years ending December 31,                    
 2013$ 816 $ 250 $ 217 $ 122 $ 71 $ 36 $ 48
 2014  653   214   194   105   68   35   47
 2015  639   210   193   101   71   35   46
 2016  636   207   196   100   74   35   46
 2017  627   199   197   98   78   35   45
 2018 - 2022  2,997   868   978   442   431   186   231

Non-Qualified Pension Plans
                      
Components of Net Periodic Pension Costs: Non-Qualified Pension Plans
                      
  Year Ended December 31, 2012
(in millions)Duke Energy Duke Energy Carolinas Progress Energy Progress Energy Carolinas Progress Energy Florida Duke Energy Ohio Duke Energy Indiana
Service cost$ 2 $ - $ 2 $ 1 $ - $ - $ -
Interest cost on project benefit obligation  12   1   8   1   2   -   -
Amortization of actuarial loss  4   -   5   1   -   -   -
Amortization of prior service cost (credit)  1   -   (1)   -   -   -   -
Net periodic pension costs$ 19 $ 1 $ 14 $ 3 $ 2 $ - $ -
                      
  Year Ended December 31, 2011
(in millions)Duke Energy Duke Energy Carolinas Progress Energy Progress Energy Carolinas Progress Energy Florida Duke Energy Ohio Duke Energy Indiana
Service cost$ 1 $ - $ 2 $ 1 $ - $ - $ -
Interest cost on project benefit obligation  8   1   9   2   2   -   -
Amortization of actuarial loss  -   -   3   -   1   -   -
Amortization of prior service cost  2   -   -   -   -   -   -
Net periodic pension costs$ 11 $ 1 $ 14 $ 3 $ 3 $ - $ -
                      
  Year Ended December 31, 2010
(in millions)Duke Energy Duke Energy Carolinas Progress Energy Progress Energy Carolinas Progress Energy Florida Duke Energy Ohio Duke Energy Indiana
Service cost$ 1 $ - $ 2 $ 1 $ - $ - $ -
Interest cost on project benefit obligation  9   1   9   2   2   -   -
Amortization of actuarial loss  -   -   2   -   1   -   -
Amortization of prior service cost  2   1   -   -   -   -   -
Net periodic pension costs$ 12 $ 2 $ 13 $ 3 $ 3 $ - $ -
                      

Other Changes in Plan Assets and Projected Benefit Obligations
                      
Recognized in Accumulated Other Comprehensive Income and Regulatory Assets: Non-Qualified Pension Plans
                      
  Year Ended December 31, 2012
(in millions)Duke Energy Duke Energy Carolinas Progress Energy Progress Energy Carolinas Progress Energy Florida Duke Energy Ohio Duke Energy Indiana
Regulatory assets, net (decrease) increase $ 34 $ - $ (6) $ (2) $ 1 $ - $ -
Regulatory liabilities, net decrease$ (8) $ - $ - $ - $ - $ - $ -
Accumulated other comprehensive (income) loss                    
 Deferred income tax asset$ - $ - $ (1) $ - $ - $ - $ -
 Actuarial (gains) losses arising during the year  (2)   -   3   -   -   -   -
Net amount recognized in accumulated other comprehensive (income) loss$ (2) $ - $ 2 $ - $ - $ - $ -
                      
  Year Ended December 31, 2011
(in millions)Duke Energy Duke Energy Carolinas Progress Energy Progress Energy Carolinas Progress Energy Florida Duke Energy Ohio Duke Energy Indiana
Regulatory assets, net increase (decrease)$ 2 $ - $ 28 $ 5 $ - $ - $ (1)
Regulatory liabilities, net increase$ 7 $ - $ - $ - $ - $ - $ -
Accumulated other comprehensive (income) loss                    
 Deferred income tax asset$ (1) $ - $ 5 $ - $ - $ - $ -
 Actuarial losses (gains) arising during the year  1   -   7   -   -   -   -
 Amortization of prior year actuarial losses  -   -   (2)   -   -   -   -
 Reclassification of actuarial gains (losses) to regulatory assets  -   -   (18)   -   -   -   -
Net amount recognized in accumulated other comprehensive (income) loss$ - $ - $ (8) $ - $ - $ - $ -
                      

Reconciliation of Funded Status to Net Amount Recognized: Non-Qualified Pension Plans
                      
  Year Ended December 31, 2012
(in millions)Duke Energy Duke Energy Carolinas Progress Energy Progress Energy Carolinas Progress Energy Florida Duke Energy Ohio Duke Energy Indiana
Change in Projected Benefit Obligation                    
Obligation at prior measurement date$ 160 $ 18 $ 177 $ 39 $ 44 $ 4 $ 5
Obligation assumed from acquisition  172   -   -   -   -   -   -
Service cost  2   -   2   1   -   -   -
Interest cost  12   1   8   1   2   -   -
Actuarial losses  18   -   11   3   3   -   -
Plan amendments  (5)   -   (12)   (4)   (2)   -   -
Transfers  -   1   -   -   -   -   -
Benefits paid  (24)   (4)   (10)   (2)   (2)   -   -
Obligation at measurement date$ 335 $ 16 $ 176 $ 38 $ 45 $ 4 $ 5
Accumulated Benefit Obligation at December 31$ 332 $ 16 $ 175 $ 36 $ 44 $ 4 $ 5
Change in Fair Value of Plan Assets                    
Plan assets at prior measurement date$ - $ - $ - $ - $ - $ - $ -
Benefits paid  (24)   (4)   (10)   (2)   (3)   -   -
Employer contributions  24   4   10   2   3   -   -
Plan assets at measurement date$0 $0 $0 $0 $0 $0 $0
                      
  Year Ended December 31, 2011
(in millions)Duke Energy Duke Energy Carolinas Progress Energy Progress Energy Carolinas Progress Energy Florida Duke Energy Ohio Duke Energy Indiana
Change in Projected Benefit Obligation                    
Obligation at prior measurement date$ 167 $ 21 $ 159 $ 33 $ 44 $ 6 $ 6
Service cost  1   -   2   1   -   -   -
Interest cost  8   1   9   2   2   -   -
Actuarial (gains) losses  (2)   -   17   5   1   (1)   (1)
Transfers  -   (1)   -   -   -   -   -
Benefits paid  (14)   (3)   (10)   (2)   (3)   (1)   -
Obligation at measurement date$ 160 $ 18 $ 177 $ 39 $ 44 $ 4 $ 5
Accumulated Benefit Obligation at December 31$ 151 $ 17 $ 162 $ 33 $ 42 $ 4 $ 5
Change in Fair Value of Plan Assets                    
Plan assets at prior measurement date$ - $ - $ - $ - $ - $ - $ -
Benefits paid  (14)   (3)   (10)   (2)   (3)   (1)   -
Employer contributions  14   3   10   2   3   1   -
Plan assets at measurement date$ - $ - $ - $ - $ - $ - $ -
                      

Amounts Recognized in the Consolidated Balance Sheets: Non-Qualified Pension Plans
                      
  December 31, 2012
(in millions)Duke Energy Duke Energy Carolinas Progress Energy Progress Energy Carolinas Progress Energy Florida Duke Energy Ohio Duke Energy Indiana
Accrued pension liability(a)(b)(c)(d)(e)(f)(g)$ (335) $ (16) $ (176) $ (38) $ (45) $ (4) $ (5)
Regulatory assets$ 59 $ 3 $ 34 $ 7 $ 9 $ - $ 2
Regulatory liabilities$ 2 $ - $ - $ - $ - $ - $ -
Accumulated other comprehensive (income) loss                    
 Deferred income tax asset$ - $ - $ (4) $ - $ - $ - $ -
 Net actuarial loss  (1)   -   12   -   -   -   -
Net amounts recognized in accumulated other comprehensive (income) loss$ (1) $ - $ 8 $ - $ - $ - $ -
Amounts to be recognized in net periodic pension expense in the next year                    
 Unrecognized net actuarial loss$ 5 $ - $ 4 $ 1 $ 1 $ - $ -
 Unrecognized prior service cost  (1)   -   (1)   -   -   -   -
                      
  December 31, 2011
(in millions)Duke Energy Duke Energy Carolinas Progress Energy Progress Energy Carolinas Progress Energy Florida Duke Energy Ohio Duke Energy Indiana
Accrued pension liability(a)(b)(c)(d)(e)(f)(g)$ (160) $ (18) $ (177) $ (39) $ (44) $ (4) $ (5)
Regulatory assets$ 25 $ 3 $ 40 $ 9 $ 8 $ - $ 2
Regulatory liabilities$ 10 $ - $ - $ - $ - $ - $ -
Accumulated other comprehensive (income) loss                    
 Deferred income tax asset$ - $ - $ (3) $ - $ - $ - $ -
 Net actuarial loss  1   -   9   -   -   -   -
Net amounts recognized in accumulated other comprehensive (income) loss$ 1 $ - $ 6 $ - $ - $ - $ -
                      
(a)Duke Energy amount includes $30 million and $17 million recognized in Other within Current Liabilities on the Consolidated Balance Sheets as of December 31, 2012 and 2011, respectively.
(b)Duke Energy Carolinas amount includes $3 million and $3 million recognized in Other within Current Liabilities on the Consolidated Balance Sheets as of December 31, 2012 and 2011, respectively.
(c)Progress Energy amount includes $11 million and $10 million recognized in Other within Current Liabilities on the Consolidated Balance Sheets as of December 31, 2012 and 2011, respectively.
(d)Progress Energy Carolinas amount includes $2 million and $2 million recognized in Other within Current Liabilities on the Consolidated Balance Sheets as of December 31, 2012 and 2011, respectively.
(e)Progress Energy Florida amount includes $3 million and $3 million recognized in Other within Current Liabilities on the Balance Sheets as of December 31, 2012 and 2011, respectively.
(f)Duke Energy Ohio amount includes an insignificant amount and $1 million recognized in Other within Current Liabilities on the Consolidated Balance Sheets as of December 31, 2012 and 2011, respectively.
(g)Duke Energy Indiana amount includes an insignificant amount and $1 million recognized in Other within Current Liabilities on the Consolidated Balance Sheets as of December 31, 2012 and 2011, respectively.
                      

Additional Information: Non-Qualified Pension Plans
                      
Information for Plans with Accumulated Benefit Obligation in Excess of Plan Assets
                      
  December 31, 2012
(in millions)Duke Energy Duke Energy Carolinas Progress Energy Progress Energy Carolinas Progress Energy Florida Duke Energy Ohio Duke Energy Indiana
Projected benefit obligation$ 335 $ 16 $ 176 $ 38 $ 45 $ 4 $ 5
Accumulated benefit obligation  332   16   175   36   44   4   5
Fair value of plan assets  -   -   -   -   -   -   -
                      
  December 31, 2011
(in millions)Duke Energy Duke Energy Carolinas Progress Energy Progress Energy Carolinas Progress Energy Florida Duke Energy Ohio Duke Energy Indiana
Projected benefit obligation$ 160 $ 18 $ 177 $ 39 $ 44 $ 4 $ 5
Accumulated benefit obligation  151   17   162   33   42   4   5
Fair value of plan assets  -   -   -   -   -   -   -
                      

Assumptions Used for Pension Benefits Accounting
          
Duke Energy(a)        
          
  December 31,
 2012 2011 2010
Benefit Obligations        
Discount rate4.10%  5.10%  5.00%
Salary increase (graded by age)4.30%  4.40%  4.10%
Net Periodic Benefit Cost        
Discount rate4.60-5.10%  5.00%  5.50%
Salary increase4.40%  4.10%  4.50%
          
(a)For Progress Energy plans, the discount rate used in 2012 to determine expense reflect remeasurement as of July 1, 2012, due to the merger between Duke Energy and Progress Energy.

Progress Energy(a)(b)        
          
  December 31,
 2012 2011 2010
Benefit Obligations        
Discount rate 4.10%  4.80%  5.60%
Salary increase -%  5.25%  5.25%
Net Periodic Benefit Cost        
Discount rate4.60-4.80%  5.60%  6.05%
Salary increase -%  5.25%  5.25%
          
(a)The discount rate used in 2012 to determine expense reflects remeasurement as of July 1, 2012, due to the merger between Duke Energy and Progress Energy.
(b)The weighted-average actuarial assumptions used by Progress Energy Carolinas and Progress Energy Florida were not materially different from the assumptions above, as applicable.
          
 The discount rate used to determine the current year pension obligation and following year’s pension expense is based on a bond
selection-settlement portfolio approach. This approach develops a discount rate by selecting a portfolio of high quality corporate bonds that generate sufficient cash flow to provide for the projected benefit payments of the plan. The selected bond portfolio is derived from a universe of non-callable corporate bonds rated Aa quality or higher. After the bond portfolio is selected, a single interest rate is determined that equates the present value of the plan’s projected benefit payments discounted at this rate with the market value of the bonds selected.

Expected Benefit Payments: Non-Qualified Pension Plans
                      
(in millions)Duke Energy Duke Energy Carolinas Progress Energy Progress Energy Carolinas Progress Energy Florida Duke Energy Ohio Duke Energy Indiana
Years ending December 31,                    
 2013$31 $3 $ 12 $ 2 $ 3 $ - $ -
 2014 31  2   12   2   3   -   -
 2015 28  2   12   2   3   -   -
 2016 27  2   11   2   3   -   -
 2017 28  2   11   2   3   -   -
 2018 - 2022 120  6   56   11   15  2  2

Other Post-Retirement Benefit Plans

Duke Energy and most of its subsidiaries provide, and the Subsidiary Registrants participate in, some health care and life insurance benefits for retired employees on a contributory and non-contributory basis. Employees are eligible for these benefits if they have met age and service requirements at retirement, as defined in the plans. The health care benefits include medical coverage, dental coverage, and prescription drug coverage and are subject to certain limitations, such as deductibles and co-payments.

These benefit costs are accrued over an employee's active service period to the date of full benefits eligibility. The net unrecognized transition obligation is amortized over 20 years.

Actuarial gains and losses are amortized over the average remaining service period of the active employees. The average remaining service period of the active employees covered by the plan is ten years for Duke Energy, Duke Energy Ohio and Duke Energy Indiana, eleven years for Duke Energy Carolinas, nine years for Progress Energy and Progress Energy Florida and seven years for Progress Energy Carolinas.

Duke Energy did not make any pre-funding contributions to its other post-retirement benefit plans during the years ended December 31, 2012, 2011 or 2010.

Components of Net Periodic Other Post-Retirement Benefit Costs
                      
  Year Ended December 31, 2012
(in millions)Duke Energy Duke Energy Carolinas Progress Energy Progress Energy Carolinas Progress Energy Florida Duke Energy Ohio Duke Energy Indiana
Service cost$ 16 $ 2   17 $ 8 $ 7 $ 1 $ 1
Interest cost on accumulated post-retirement benefit obligation  56   15   43   23   18   3   6
Expected return on plan assets  (17)   (10)   (2)   -   (2)   (1)   (1)
Amortization of prior service credit  (8)   (5)   -   -   -   (1)   -
Amortization of net transition liability  10   7   4   -   3   -   -
Amortization of actuarial loss (gain)  14   3   35   20   12   (2)   -
Special termination charge  9   1   5   2   1   -   -
Net periodic pension costs(a)(b)$ 80 $ 13 $ 102 $ 53 $ 39 $ - $ 6
                      
  Year Ended December 31, 2011
(in millions)Duke Energy Duke Energy Carolinas Progress Energy Progress Energy Carolinas Progress Energy Florida Duke Energy Ohio Duke Energy Indiana
Service cost$ 7 $ 2 $ 11 $ 5 $ 5 $ 1 $ 1
Interest cost on accumulated post-retirement benefit obligation  35   16   41   20   18   3   7
Expected return on plan assets  (15)   (10)   (2)   -   (2)   (1)   (1)
Amortization of prior service credit  (8)   (5)   -   -   -   (1)   -
Amortization of net transition liability  10   9   5   1   4   -   -
Amortization of actuarial (gain) loss  (3)   2   12   5   7   (2)   2
Net periodic pension costs(a)(b)$ 26 $ 14 $ 67 $ 31 $ 32 $ - $ 9
                      
  Year Ended December 31, 2010
(in millions)Duke Energy Duke Energy Carolinas Progress Energy Progress Energy Carolinas Progress Energy Florida Duke Energy Ohio Duke Energy Indiana
Service cost$ 7 $ 2 $ 16 $ 5 $ 10 $ 1 $ 1
Interest cost on accumulated post-retirement benefit obligation  38   17   45   20   22   3   8
Expected return on plan assets  (15)   (10)   (4)   (2)   (2)   (1)   (1)
Amortization of prior service credit  (8)   (5)   -   -   -   (1)   -
Amortization of net transition liability  11   9   5   1   4   -   -
Amortization of actuarial (gain) loss  (5)   3   13   4   9   (2)   1
Net periodic pension costs(a)(b)$ 28 $ 16 $ 75 $ 28 $ 43 $ - $ 9
                      
(a)Duke Energy amounts exclude $9 million, $8 million and $9 million for the years ended December 31, 2012, 2011 and 2010, respectively, of regulatory asset amortization resulting from purchase accounting adjustments associated with Duke Energy’s merger with Cinergy in April 2006.
(b)Duke Energy Ohio amounts exclude $2 million for each of the years ended December 31, 2012, 2011 and 2010, respectively, of regulatory asset amortization resulting from purchase accounting adjustments associated with Duke Energy’s merger with Cinergy in April 2006.
                      
 The Medicare Prescription Drug, Improvement and Modernization Act of 2003 (Modernization Act) introduced a prescription drug
benefit under Medicare (Medicare Part D) as well as a federal subsidy to sponsors of retiree health care benefit plans. Accounting guidance issued and adopted by Duke Energy in 2004 prescribes the appropriate accounting for the federal subsidy. The after-tax effect on Duke Energy's net periodic post-retirement benefit cost was a decrease of $3 million in 2012, $3 million in 2011 and $4 million in 2010. Duke Energy recognized a $1 million subsidy receivable as of December 31, 2012 and 2011, which is included in Receivables on the Consolidated Balance Sheets.

Other Changes in Plan Assets and Projected Benefit Obligations
                      
Recognized in Accumulated Other Comprehensive Income and Regulatory Assets: Other Post-Retirement Benefit Plans
                      
  Year Ended December 31, 2012
(in millions)Duke Energy Duke Energy Carolinas Progress Energy Progress Energy Carolinas Progress Energy Florida Duke Energy Ohio Duke Energy Indiana
Regulatory assets, net increase (decrease)$ 484 $ (20) $ 228 $ 170 $ 28 $ - $ (6)
Regulatory liabilities, net decrease$ (6) $ - $ - $ - $ - $ (1) $ (2)
Accumulated other comprehensive (income) loss                    
 Deferred income tax liability$ (2) $ - $ - $ - $ - $ (4) $ -
 Reclassification of actuarial losses to an affiliate  -   -   -   -   -   6   -
 Prior year service cost arising during the year  -   -   -   -   -   1   -
 Actuarial losses arising during the year  -   -   -   -   -   2   -
 Reclassification of actuarial gains to regulatory liabilities  4   -   -   -   -   -   -
 Amortization of prior year actuarial loss  -   -   -   -   -   1   -
Net amount recognized in accumulated other comprehensive (income) loss$ 2 $ - $ - $ - $ - $ 6 $ -
                      
  Year Ended December 31, 2011
(in millions)Duke Energy Duke Energy Carolinas Progress Energy Progress Energy Carolinas Progress Energy Florida Duke Energy Ohio Duke Energy Indiana
Regulatory assets, net (decrease) increase$ (22) $ (12) $ 74 $ 43 $ 28 $ - $ (7)
Regulatory liabilities, net increase (decrease)$ 21 $ - $ - $ - $ - $ (1) $ 12
Accumulated other comprehensive (income) loss                    
 Deferred income tax liability$ 1 $ - $ (2) $ - $ - $ (1) $ -
 Actuarial losses (gains) arising during the year  -   -   2   -   -   2   -
 Amortization of prior year actuarial losses  1   -   -   -   -   1   -
 Reclassification of actuarial losses to regulatory assets  -   -   4   -   -   -   -
Net amount recognized in accumulated other comprehensive (income) loss$ 2 $ - $ 4 $ - $ - $ 2 $ -
                      

Reconciliation of Funded Status to Accrued Other Post-Retirement Benefit Costs
                      
  Year Ended December 31, 2012
(in millions)Duke Energy Duke Energy Carolinas Progress Energy Progress Energy Carolinas Progress Energy Florida Duke Energy Ohio Duke Energy Indiana
Change in Projected Benefit Obligation                    
Accumulated post-retirement benefit obligation at prior measurement date$ 667 $ 312 $ 841 $ 407 $ 368 $ 61 $ 135
Obligation assumed from acquisition  977   -   -   -   -   -   -
Service cost  16   2   17   8   7   1   1
Interest cost  56   15   43   23   18   3   6
Plan participants' contributions  41   18   13   5   7   4   8
Actuarial gains  198   28   291   205   49   3   (2)
Transfers  -   9   -   -   -   (16)   -
Benefits paid  (105)   (38)   (61)   (24)   (33)   (8)   (13)
Special termination benefit cost  9   1   5   2   1   -   -
Plan amendments  (70)   (33)   (25)   (16)   (6)   -   -
Accrued retiree drug subsidy  5   2   4   2   2   -   1
Accumulated post-retirement benefit obligation at measurement date$ 1,794 $ 316 $ 1,128 $ 612 $ 413 $ 48 $ 136
Change in Fair Value of Plan Assets                    
Plan assets at prior measurement date$ 181 $ 120 $ 37 $ - $ 37 $ 9 $ 14
Actual return on plan assets  23   12   2   -   2   1   2
Benefits paid  (105)   (38)   (61)   (24)   (33)   (8)   (13)
Transfers(a)  -   5   (39)   -   (39)   (3)   -
Employer contributions  58   17   48   19   26   4   6
Plan participants' contributions  41   18   13   5   7   4   8
Plan assets at measurement date$198 $134 $ - $ - $ - $ 7 $17
                      
  Year Ended December 31, 2011
(in millions)Duke Energy Duke Energy Carolinas Progress Energy Progress Energy Carolinas Progress Energy Florida Duke Energy Ohio Duke Energy Indiana
Change in Projected Benefit Obligation                    
Accumulated post-retirement benefit obligation at prior measurement date$ 723 $ 326 $ 733 $ 352 $ 326 $ 66 $ 152
Service cost  7   2   11   5   5   1   1
Interest cost  35   16   41   20   18   3   7
Plan participants' contributions  32   21   9   5   3   1   4
Actuarial (gains) losses  (55)   (12)   98   49   40   -   (17)
Transfers  -   (1)   -   -   -   (2)   -
Plan transfer  -   (1)   -   -   -   -   -
Benefits paid  (83)   (44)   (51)   (24)   (24)   (8)   (14)
Early retirement reinsurance program subsidy  3   2   -   -   -   -   1
Accrued retiree drug subsidy  5   3   -   -   -   -   1
Accumulated post-retirement benefit obligation at measurement date$ 667 $ 312 $ 841 $ 407 $ 368 $ 61 $ 135
Change in Fair Value of Plan Assets                    
Plan assets at prior measurement date$ 186 $ 125 $ 33 $ - $ 33 $ 8 $ 14
Actual return on plan assets  4   2   3   -   4   -   -
Benefits paid  (83)   (44)   (51)   (24)   (24)   (8)   (14)
Employer contributions  42   16   43   19   21   8   10
Plan participants' contributions  32   21   9   5   3   1   4
Plan assets at measurement date$ 181 $ 120 $ 37 $ - $ 37 $ 9 $ 14
                      
(a)Progress Energy and Progress Energy Florida amounts reflect assets that did not meet the definition of plan assets. These assets are included in Other within Investments and Other Assets on the Consolidated Balance Sheets.
                      

Amounts Recognized in the Consolidated Balance Sheets: Other Post-Retirement Benefit Plans
                      
  December 31, 2012
(in millions)Duke Energy Duke Energy Carolinas Progress Energy Progress Energy Carolinas Progress Energy Florida Duke Energy Ohio Duke Energy Indiana
Accrued post-retirement liability(a)(b)(c)(d)(e)(f)(g)$ (1,596) $ (182) $ (1,128) $ (612) $ (413) $ (41) $ (119)
Regulatory assets$ 521 $ 17 $ 505 $ 291 $ 170 $ - $ 77
Regulatory liabilities$ 101 $ - $ - $ - $ - $ 18 $ 68
Accumulated other comprehensive (income) loss                    
 Deferred income tax liability$ 2 $ - $ - $ - $ - $ - $ -
 Prior service credit  (3)   -   -   -   -   -   -
 Net actuarial gain  (2)   -   -   -   -   -   -
Net amounts recognized in accumulated other comprehensive (income) loss$ (3) $ - $ - $ - $ - $ - $ -
Amounts to be recognized in net periodic pension expense in the next year                    
 Unrecognized net actuarial loss (gain)$ 54 $ 3 $ 59   37 $ 16 $ (1) $ -
 Unrecognized prior service credit  (15)   (7)   (4)   (2)   (1)   -   -
                      
  December 31, 2011
(in millions)Duke Energy Duke Energy Carolinas Progress Energy Progress Energy Carolinas Progress Energy Florida Duke Energy Ohio Duke Energy Indiana
Accrued post-retirement liability(a)(b)(c)(d)(e)(f)(g)$ (486) $ (192) $ (804) $ (407) $ (331) $ (52) $ (121)
Regulatory assets$ 37 $ 37 $ 277 $ 121 $ 142 $ - $ 83
Regulatory liabilities$ 107 $ - $ - $ - $ - $ 19 $ 70
Accumulated other comprehensive (income) loss                    
 Deferred income tax liability$ 4 $ - $ - $ - $ - $ 4 $ -
 Prior service credit  (3)   -   -   -   -   (1)   -
 Net actuarial loss (gain)  (6)   -   -   -   -   (9)   -
Net amounts recognized in accumulated other comprehensive (income) loss$ (5) $ - $ - $ - $ - $ (6) $ -
                      
(a)Duke Energy amount includes $50 million and $3 million recognized in Other within Current Liabilities on the Consolidated Balance Sheets as of December 31, 2012 and 2011, respectively.
(b)Duke Energy Carolinas amount includes an insignificant amount recognized in Other within Current Liabilities on the Consolidated Balance Sheets as of December 31, 2012 and 2011, respectively.
(c)Progress Energy amount includes $47 million and $22 million recognized in Other within Current Liabilities on the Consolidated Balance Sheets as of December 31, 2012 and 2011, respectively.
(d)Progress Energy Carolinas amount includes $23 million and $19 million recognized in Other within Current Liabilities on the Consolidated Balance Sheets as of December 31, 2012 and 2011, respectively.
(e)Progress Energy Florida amount includes $20 million and zero recognized in Other within Current Liabilities on the Balance Sheets as of December 31, 2012 and 2011, respectively.
(f)Duke Energy Ohio amount includes $2 million and $2 million recognized in Other within Current Liabilities on the Consolidated Balance Sheets as of December 31, 2012 and 2011, respectively.
(g)Duke Energy Indiana amount includes an insignificant amount recognized in Other within Current Liabilities on the Consolidated Balance Sheets as of December 31, 2012 and 2011, respectively.
                      

Assumptions Used for Other Post-Retirement Benefits Accounting
          
Duke Energy(a)        
          
  December 31,
 2012 2011 2010
Benefit Obligations        
Discount rate 4.10%  5.10%  5.00%
Net Periodic Benefit Cost        
Discount rate4.60-5.10%  5.00%  5.50%
Expected long-term rate of return on plan assets(b)5.20-8.00% 5.36-8.25% 5.53-8.50%
Assumed tax rate(c)(d)35%  35.0%  35.0%
          
(a)For Progress Energy plans, the discount rate used in 2012 to determine expense reflect remeasurement as of July 1, 2012 due to the merger between Duke Energy and Progress Energy.
(b)The expected long-term rate of return on plan assets for Duke Energy Ohio and Duke Energy Indiana was 8.00%, 8.25% and 8.50% as of December 31, 2012, 2011 and 2010, respectively.
(c)Applicable to the health care portion of funded post-retirement benefits.
(d)Does not apply to Duke Energy Ohio and Duke Energy Indiana.

Progress Energy(a)(b)        
          
  December 31,
 2012 2011 2010
Benefit Obligations        
Discount rate 4.10%  4.85%  5.75%
Net Periodic Benefit Cost        
Discount rate4.60-4.85%  5.70%  6.05%
Expected long-term rate of return on plan assets(b)N/A-5.00%  5.00%  6.60%
          
(a)The assumptions used in 2012 to determine expense reflect remeasurement as of July 1, 2012 due to the merger between Duke Energy and Progress Energy.
(b)The weighted-average actuarial assumptions used by Progress Energy Carolinas and Progress Energy Florida were not materially different from the assumptions above, as applicable, with the exception of the expected long-term rate of return on plan assets which was 5.00% for all years presented for Progress Energy Florida and 8.75% in 2010 for Progress Energy Carolinas. Progress Energy Florida held no other post-retirement benefit plan assets as of December 31, 2012. Progress Energy Carolinas held no other post-retirement plan assets after December 31, 2010.
          
 The discount rate used to determine the current year other post-retirement benefits obligation and following year’s other
post-retirement benefits expense is based on a bond selection-settlement portfolio approach. This approach develops a discount rate by selecting a portfolio of high quality corporate bonds that generate sufficient cash flow to provide for the projected benefit payments of the plan. The selected bond portfolio is derived from a universe of non-callable corporate bonds rated Aa quality or higher. After the bond portfolio is selected, a single interest rate is determined that equates the present value of the plan’s projected benefit payments discounted at this rate with the market value of the bonds selected.

Assumed Health Care Cost Trend Rate - Duke Energy (a)
       
  December 31,
 2012 2011
Health care cost trend rate assumed for next year 8.50%  8.75%
Rate to which the cost trend is assumed to decline (the ultimate trend rate) 5.00%  5.00%
Year that rate reaches ultimate trend2020  2020 
       
(a)Applicable to all Subsidiary Registrants     

Sensitivity to Changes in Assumed Health Care Cost Trend Rates
                      
  Year Ended December 31, 2012
(in millions)Duke Energy Duke Energy Carolinas Progress Energy Progress Energy Carolinas Progress Energy Florida Duke Energy Ohio Duke Energy Indiana
1-Percentage Point Increase                    
Effect on total service and interest costs$ 9 $ 1 $ 8 $ 4 $ 3 $ 1 $ 1
Effect on post-retirement benefit obligation  164   11   133   72   49   3   8
1-Percentage Point Decrease                    
Effect on total service and interest costs  (7)   (1)   (6)   (3)   (2)   (1)   (1)
Effect on post-retirement benefit obligation  (133)   (10)   (106)   (57)   (39)   (3)   (7)

Expected Benefit Payments: Other Post-Retirement Benefit Plans
                      
(in millions)Duke Energy(a) Duke Energy Carolinas(b) Progress Energy(c) Progress Energy Carolinas(d) Progress Energy Florida(e) Duke Energy Ohio(f) Duke Energy Indiana(g)
Years ending December 31,                    
 2013$98 $22 $48 $24 $20 $4 $12
 2014 104  23  51  26  21  4  12
 2015 108  23  55  28  22  4  12
 2016 111  24  58  30  23  4  12
 2017 114  24  61  32  24  4  12
 2018 - 2022 583  112  330  177  125  19  53
                      
(a)Duke Energy expects to receive future subsidies under Medicare Part D of $7 million in each of the years 2013-2015, $8 million in each of the years 2016 and 2017, and a total of $46 million during the years 2018-2022.
(b)Duke Energy Carolinas expects to receive future subsidies under Medicare Part D of $2 million in each of the years 2013-2017 and a total of $8 million during the years 2018-2022.
(c)Progress Energy expects to receive future subsidies under Medicare Part D of $4 million in each of the years 2013-2015, $5 million each of the years 2016-2017, and a total of $34 million during the years 2018-2022.
(d)Progress Energy Carolinas expects to receive future subsidies under Medicare Part D of $2 million in each of the years 2013-2015, $3 million in each of the years 2016-2017, and a total of $19 million during the years 2018-2022.
(e)Progress Energy Florida expects to receive future subsidies under Medicare Part D of $2 million in each of the years 2013-2017, and a total of $12 million during the years 2018-2022.
(f)Duke Energy Ohio does not expect to receive future subsidies under Medicare Part D.
(g)Duke Energy Indiana expects to receive future subsidies under Medicare Part D of $1 million in each of the years 2013-2017 and a total of $5 million during the years 2018-2022.

Plan Assets

Duke Energy Master Retirement Trust. Assets for both the qualified pension and other post-retirement benefits (excluding Progress Energy plans) are maintained in a Master Retirement Trust (Duke Energy Master Trust). Approximately 97% of the Duke Energy Master Trust assets were allocated to qualified pension plans and approximately 3% were allocated to other post-retirement plans, as of December 31, 2012 and 2011. The investment objective of the Duke Energy Master Trust is to achieve reasonable returns, subject to a prudent level of portfolio risk, for the purpose of enhancing the security of benefits for plan participants.

The asset allocation targets were set after considering the investment objective and the risk profile. U.S. equities are held for their high expected return. Non-U.S. equities, debt securities, and real estate are held for diversification. Investments within asset classes are to be diversified to achieve broad market participation and reduce the impact of individual managers or investments. Duke Energy regularly reviews its actual asset allocation and periodically rebalances its investments to the targeted allocation when considered appropriate.

Qualified pension and other post-retirement benefits for Duke Energy Carolinas, Duke Energy Ohio and Duke Energy Indiana are derived from the Duke Energy Master Trust, as such, each are allocated their proportionate share of the assets discussed below.

The following table includes the target asset allocations by asset class at December 31, 2012 and the actual asset allocations for the Duke Energy Master Trust.

           
           
   Target Allocation  Actual Allocation at December 31,
    2012 2011
Duke Energy Master Trust         
U.S. equity securities  28%  28%  28%
Non-U.S. equity securities  15%  15%  15%
Global equity securities  10%  10%  9%
Global private equity securities  3%  3%  1%
Debt securities  32%  32%  32%
Hedge funds  4%  4%  3%
Real estate and cash  4%  4%  9%
Other global securities  4%  4%  3%
Total 100%  100%  100%

Progress Energy Master Trust. Assets for Progress Energy qualified pension benefits are maintained in a trust (Progress Energy Master Trust).The primary objectives of the Progress Energy Master Trust are to ensure sufficient funds are available at all times to finance promised benefits and to invest the funds such that contributions are minimized, within acceptable risk limits. Progress Energy periodically performs studies to analyze various aspects of our pension plans including asset allocations, expected portfolio return, pension contributions and net funded status. One key investment objective is to achieve a rate of return significantly in excess of the discount rate used to measure the plan liabilities over the long term. Tactical shifts (plus or minus 5 percent) in asset allocation from the target allocations are made based on the near-term view of the risk and return tradeoffs of the asset classes. Domestic equity includes investments across large, medium and small capitalized domestic stocks, using investment managers with value, growth and core-based investment strategies and includes both long only and long/short equity managers. International equity includes investments in foreign stocks in both developed and emerging market countries, using a mix of value and growth-based investment strategies and includes both long only and long/short equity managers. Domestic fixed income primarily includes domestic investment grade long duration fixed income investments.

Qualified pension benefits for Progress Energy, Progress Energy Carolinas and Progress Energy Florida are derived from the Progress Energy Master Trust. As such, each are allocated their proportional share of the assets discussed below.

The following table includes the target asset allocations by asset class at December 31, 2012 and the actual asset allocations for the Progress Energy Master Trust.

           
           
   Target Allocation  Actual Allocation at December 31,
    2012 2011
Progress Energy Master Trust         
U.S. equity securities  29%  20%  28%
Non-U.S. equity securities  19%  14%  15%
Global equity securities  4%  8%  9%
Global private equity securities  6%  10%  -%
Debt securities  35%  35%  36%
Hedge funds  7%  9%  6%
Real estate and cash  -%  1%  6%
Other global securities  -%  3%  -%
Total 100%  100%  100%

VEBA I. Duke Energy also invests other post-retirement assets in the Duke Energy Corporation Employee Benefits Trust (VEBA I). The investment objective of VEBA I is to achieve sufficient returns, subject to a prudent level of portfolio risk, for the purpose of promoting the security of plan benefits for participants. VEBA I is passively managed.

The following table includes the weighted-average returns expected by asset classes and the target asset allocations at December 31, 2012 and the actual asset allocations for VEBA I.

  Target Allocation  Actual Allocation at December 31,
   2012 2011
VEBA I        
U.S. equity securities 30%  23%  20%
Debt securities 45%  32%  31%
Cash 25%  45%  49%
Total 100%  100%  100%

Fair Value Measurements.

The accounting guidance for fair value defines fair value, establishes a framework for measuring fair value in GAAP in the U.S. and expands disclosure requirements about fair value measurements. Under the accounting guidance for fair value, fair value is considered to be the exchange price in an orderly transaction between market participants to sell an asset or transfer a liability at the measurement date. The fair value definition focuses on an exit price, which is the price that would be received by Duke Energy to sell an asset or paid to transfer a liability versus an entry price, which would be the price paid to acquire an asset or received to assume a liability. Although the accounting guidance for fair value does not require additional fair value measurements, it applies to other accounting pronouncements that require or permit fair value measurements.

Duke Energy classifies recurring and non-recurring fair value measurements based on the following fair value hierarchy, as prescribed by the accounting guidance for fair value, which prioritizes the inputs to valuation techniques used to measure fair value into three levels:

Level 1 — unadjusted quoted prices in active markets for identical assets or liabilities that Duke Energy has the ability to access. An active market for the asset or liability is one in which transactions for the asset or liability occurs with sufficient frequency and volume to provide ongoing pricing information. Duke Energy does not adjust quoted market prices on Level 1 for any blockage factor.

Level 2 — a fair value measurement utilizing inputs other than a quoted market price that are observable, either directly or indirectly, for the asset or liability. Level 2 inputs include, but are not limited to, quoted prices for similar assets or liabilities in an active market, quoted prices for identical or similar assets or liabilities in markets that are not active and inputs other than quoted market prices that are observable for the asset or liability, such as interest rate curves and yield curves observable at commonly quoted intervals, volatilities, credit risk and default rates. A Level 2 measurement cannot have more than an insignificant portion of the valuation based on unobservable inputs.

Level 3 — any fair value measurements which include unobservable inputs for the asset or liability for more than an insignificant portion of the valuation. A Level 3 measurement may be based primarily on Level 2 inputs.

 The following tables provide the fair value measurement amounts for the Duke Energy Master Trust qualified pension and other
post-retirement assets.
             
  December 31, 2012
(in millions)Total Fair Value(a) Level 1 Level 2 Level 3
Duke Energy Master Trust           
Equity securities$ 2,993 $ 1,415 $ 1,575 $ 3
Corporate bonds  1,391   -   1,388   3
Short-term investment funds  100   23   77   -
Partnership interests  141   -   -   141
Hedge funds  97   -   97   -
Real estate trusts  167   -   -   167
U.S. government securities  237   -   237   -
Other investments(b)  (16)   (21)   5   -
Guaranteed investment contracts  37   -   -   37
Governments bonds - foreign  65   -   64   1
Cash  4   4   -   -
Asset backed securities  2   -   2   -
Government and commercial mortgage backed securities  12   -   12   -
Total assets(c) $ 5,230 $ 1,421 $ 3,457 $ 352
             
(a)Excludes $26 million in net receivables associated with security purchases and sales.
(b)Includes pending investment sales (net of investment purchases) of $29 million.
(c)Duke Energy Carolinas, Duke Energy Ohio and Duke Energy Indiana were allocated approximately 43%, 9% and 12% of the Duke Energy Master Trust assets at December 31, 2012, respectively. Accordingly, all Level 1, 2 and 3 amounts included in the table above are allocable to Duke Energy Carolinas, Duke Energy Ohio and Duke Energy Indiana using these percentages.

  December 31, 2011
(in millions)Total Fair Value(a) Level 1 Level 2 Level 3
Duke Energy Master Trust           
Equity securities$ 2,568 $ 1,745 $ 823 $ -
Corporate bonds  1,237   -   1,236   1
Short-term investment funds  328   276   52   -
Partnership interests  127   -   -   127
Hedge funds  89   -   89   -
Real estate trusts  152   -   -   152
U.S. government securities  211   -   211   -
Other investments(b)  33   30   2   1
Guarantees investment contracts  39   -   -   39
Governments bonds - foreign  39   -   38   1
Cash  7   7   -   -
Asset backed securities  4   -   3   1
Government and commercial mortgage backed securities  8   -   8   -
Total assets(c) $ 4,842 $ 2,058 $ 2,462 $ 322
             
(a)Excludes $27 million in net receivables and payables associated with security purchases and sales.
(b)Includes pending investment sales (net of investment purchases) of $3 million.
(c) Duke Energy Carolinas, Duke Energy Ohio and Duke Energy Indiana were allocated approximately 39%, 12% and 12% of the Duke Energy Master Trust assets at December 31, 2012, respectively. Accordingly, all Level 1, 2 and 3 amounts included in the table above are allocable to Duke Energy Carolinas, Duke Energy Ohio and Duke Energy Indiana using these percentages.

 The following tables provide the fair value measurement amounts for the Progress Energy Master Trust qualified pension assets.
             
Progress Energy           
             
  December 31, 2012
(in millions)Total Fair Value(a) Level 1 Level 2 Level 3
Progress Energy Master Trust           
Equity securities$ 1,094 $ 361 $ 733 $ -
Corporate bonds  432   -   432   -
Partnership interests  154   -   -   154
Hedge funds  313   -   189   124
U.S. government securities  515   405   110   -
Other investments  16   -   6   10
Governments bonds - foreign  6   -   6   -
Cash  160   113   47   -
Total assets(b)$ 2,690 $ 879 $ 1,523 $ 288
             
(a)Excludes $43 million in net payables associated with security purchases and sales.
(b)Progress Energy Carolinas and Progress Energy Florida were allocated approximately 48% and 44% of the Progress Energy Master Trust assets at December 31, 2012, respectively. Accordingly, all Level 1, 2 and 3 amounts included in the table above are allocable to Progress Energy Carolinas and Progress Energy Florida using these percentages.

  December 31, 2011
(in millions)Total Fair Value Level 1 Level 2 Level 3
Progress Energy Master Trust           
Equity securities$ 803 $ 313 $ 490 $ -
Corporate bonds  407   -   407   -
Partnership interests  153   -   -   153
Hedge funds  306   -   159   147
U.S. government securities  391   247   144   -
Other investments  16   -   5   11
Cash  115   82   33   -
Total assets(a)$ 2,191 $ 642 $ 1,238 $ 311
             
(a)Progress Energy Carolinas and Progress Energy Florida were allocated approximately 50% and 44% of the Progress Energy Master Trust assets at December 31, 2011, respectively. Accordingly, all Level 1, 2 and 3 amounts included in the table above are allocable to Progress Energy Carolinas and Progress Energy Florida using these percentages.

 The following tables provide the fair value measurement amounts for VEBA I other post-retirement assets.
             
  December 31, 2012
(in millions)Total Fair Value Level 1 Level 2 Level 3
VEBA I           
Cash and cash equivalents$ 22 $ - $ 22 $ -
Equity securities  12   -   12   -
Debt securities  16   -   16   -
Total assets$ 50 $ - $ 50 $ -
             
  December 31, 2011
(in millions)Total Fair Value Level 1 Level 2 Level 3
VEBA I           
Cash and cash equivalents$ 26 $ - $ 26 $ -
Equity securities  11   -   11   -
Debt securities  16   -   16   -
Total assets$ 53 $ - $ 53 $ -
             

 The following table provides a reconciliation of beginning and ending balances of Master Trust assets measured at fair value on a
recurring basis where the determination of fair value includes significant unobservable inputs (Level 3).
       
(in millions)2012 2011
Duke Energy Master Trust     
Balance at January 1$ 322 $ 185
Purchases, sales, issuances and settlements     
 Purchases  21   156
 Sales  (4)   (29)
Total gains (losses) and other  13   10
Balance at December 31$ 352 $ 322

 The following table provides a reconciliation of beginning and ending balances of Progress Trust assets measured at fair value on a
recurring basis where the determination of fair value includes significant unobservable inputs (Level 3).
       
(in millions)2012 2011
Progress Energy Master Trust     
Balance at January 1$ 311 $ 160
Purchases, sales, issuances and settlements     
 Purchases  13   107
 Sales  (14)   (13)
Transfers in and/or out of level 3  (41)   -
Total gains (losses) and other  19   57
Balance at December 31$288 $ 311

Valuation methods of the primary fair value measurements disclosed above are as follows:

Investments in equity securities. Investments in equity securities are typically valued at the closing price in the principal active market as of the last business day of the quarter. Principal active markets for equity prices include published exchanges such as NASDAQ and NYSE. Foreign equity prices are translated from their trading currency using the currency exchange rate in effect at the close of the principal active market. Duke Energy has not adjusted prices to reflect for after-hours market activity. Most equity security valuations are Level 1 measures. Investments in equity securities with unpublished prices are valued as Level 2 if they are redeemable at the measurement date. Investments in equity securities with redemption restrictions are valued as Level 3.

Investments in corporate bonds and U.S. government securities. Most debt investments are valued based on a calculation using interest rate curves and credit spreads applied to the terms of the debt instrument (maturity and coupon interest rate) and consider the counterparty credit rating. Most debt valuations are Level 2 measures. If the market for a particular fixed income security is relatively inactive or illiquid, the measurement is a Level 3 measurement.

Investments in short-term investment funds. Investments in short-term investment funds are valued at the net asset value of units held at year end. Investments in short-term investment funds with published prices are valued as Level 1. Investments in short-term investment funds with unpublished prices are valued as Level 2.

Investments in real estate investment trusts. Investments in real estate investment trusts are valued based upon property appraisal reports prepared by independent real estate appraisers. The Chief Real Estate Appraiser of the asset manager is responsible for assuring that the valuation process provides independent and reasonable property market value estimates. An external appraisal management firm not affiliated with the asset manager has been appointed to assist the Chief Real Estate Appraiser in maintaining and monitoring the independence and the accuracy of the appraisal process.

Employee Savings Plans

Duke Energy and Progress Energy sponsor, and the Subsidiary Registrants participate in, employee savings plans that cover substantially all U.S. employees. Most employees participate in a matching contribution formula where Duke Energy provides a matching contribution generally equal to 100% of employee before-tax and Roth 401(k) contributions, and, as applicable, after-tax contributions, of up to 6% of eligible pay per pay period. Dividends on Duke Energy shares held by the savings plans are charged to retained earnings when declared and shares held in the plans are considered outstanding in the calculation of basic and diluted earnings per share.

The following table includes pre-tax employer matching contributions made by Duke Energy and expensed by the Subsidiary Registrants.

(in millions)Duke Energy Duke Energy Carolinas Progress Energy Progress Energy Carolinas Progress Energy Florida Duke Energy Ohio Duke Energy Indiana
For the years ended December 31,                    
 2012$ 107 $ 37 $ 45 $ 24 $ 15 $ 4 $ 6
 2011  86   37   44   23   14   4   8
 2010  85   36   43   23   14   4   6