The Duke Energy Registrants classify their investments in debt and equity securities into two categories – trading and available-for-sale.

Investments in debt and equity securities are classified as either short-term investments or long-term investments based on management's intent and ability to sell these securities, taking into consideration illiquidity factors in the current markets.

Investments in debt and equity securities held in grantor trusts associated with certain deferred compensation plans and certain other investments are classified as trading securities and are reported at fair value in the Condensed Consolidated Balance Sheets with net realized and unrealized gains and losses included in earnings each period. At June 30, 2013 and December 31, 2012, the fair value of these investments was $19 million and $33 million, respectively.

All other investments in debt and equity securities are classified as available-for-sale securities, which are also reported at fair value on the Condensed Consolidated Balance Sheets with unrealized gains and losses excluded from earnings and reported either as a regulatory asset or liability, as discussed further below, or as a component of other comprehensive income (OCI) until realized.

Duke Energy's available-for-sale securities are primarily comprised of investments held in the (i) NDTF at Duke Energy Carolinas, Duke Energy Progress and Duke Energy Florida, (ii) investments in grantor trusts at both Duke Energy Indiana and Duke Energy Florida related to OPEB plans as required by the IURC and FERC, respectively, and at Duke Energy Progress, (iii) Duke Energy captive insurance investment portfolio, (iv) Duke Energy's foreign operations investment portfolio and (v) investments of Duke Energy and Duke Energy Carolinas in auction rate debt securities.

Duke Energy holds corporate debt securities which were purchased using excess cash from its foreign operations. These investments are classified as Short-term investments on the Condensed Consolidated Balance Sheet and are available for current operations of Duke Energy's foreign business. The fair value of these investments was $280 million as of June 30, 2013 and $333 million as of December 31, 2012.

Duke Energy classifies all other investments in debt and equity securities as long-term, unless otherwise noted.

The investments within the NDTF at Duke Energy Carolinas, Duke Energy Progress, Duke Energy Florida and the Duke Energy Indiana, Duke Energy Progress and Duke Energy Florida grantor trusts (Investment Trusts) are managed by independent investment managers with discretion to buy, sell and invest pursuant to the objectives set forth by the trust agreements. Therefore, the Duke Energy Registrants have limited oversight of the day-to-day management of these investments. Since day-to-day investment decisions, including buy and sell decisions, are made by the investment manager, the ability to hold investments in unrealized loss positions is outside the control of the Duke Energy Registrants. Accordingly, all unrealized gains and losses associated with debt and equity securities within the Investment Trusts are considered other-than-temporary and are recognized immediately when the fair value of individual investments is less than the cost basis of the investment. Pursuant to regulatory accounting, substantially all unrealized gains and losses associated with investments in debt and equity securities within the Investment Trusts are deferred as a regulatory asset or liability. As a result, there is no immediate impact on the earnings of the Duke Energy Registrants.

For investments in debt and equity securities held in the captive insurance investment portfolio, the foreign operations investment portfolio and investments in auction rate debt securities, unrealized gains and losses are included in other comprehensive income until realized, unless it is determined that the carrying value of an investment is other-than-temporarily impaired. If so, the write-down to fair value may be included in earnings based on the criteria discussed below.

For available-for-sale securities for which other-than-temporary-impairments are required, the Duke Energy Registrants analyze all investment holdings each reporting period to determine whether a decline in fair value should be considered other-than-temporary. Criteria used to evaluate whether an impairment associated with equity securities is other-than-temporary includes, but is not limited to, the length of time over which the market value has been lower than the cost basis of the investment, the percentage decline compared to the cost of the investment and management's intent and ability to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in market value. If a decline in fair value is determined to be other-than-temporary, the investment is written down to its fair value through a charge to earnings.

With respect to investments in debt securities, under the accounting guidance for other-than-temporary impairment, if the entity does not have an intent to sell the security and it is not more likely than not that management will be required to sell the debt security before the recovery of its cost basis, the impairment write-down to fair value would be recorded as a component of other comprehensive income, except for when it is determined that a credit loss exists. In determining whether a credit loss exists, management considers, among other things, the length of time and the extent to which the fair value has been less than the amortized cost basis, changes in the financial condition of the issuer of the security, or in the case of an asset backed security, the financial condition of the underlying loan obligors, consideration of underlying collateral and guarantees of amounts by government entities, ability of the issuer of the security to make scheduled interest or principal payments and any changes to the rating of the security by rating agencies. If it is determined that a credit loss exists, the amount of impairment write-down to fair value would be split between the credit loss, which would be recognized in earnings, and the amount attributable to all other factors, which would be recognized in other comprehensive income. Management believes, based on consideration of the criteria above, that no credit loss exists as of June 30, 2013 and December 31, 2012. Management does not have the intent to sell such investments in auction rate debt securities and the investments in debt securities within its captive insurance investment portfolio and foreign operations investment portfolio, and it is not more likely than not that management will be required to sell these securities before the anticipated recovery of their cost basis. Management has concluded that there were no other-than-temporary impairments for debt or equity securities necessary as of June 30, 2013 and December 31, 2012. Accordingly, all changes in the market value of investments other than those held in the Investment Trusts, which receive regulatory accounting as discussed above, were reflected as a component of other comprehensive income in 2013 and 2012.

See Note 10 for additional information related to fair value measurements for investments in auction rate debt securities.

DUKE ENERGY

The following table presents the estimated fair value of short-term and long-term investments for Duke Energy. For investments held within the NDTF, and investments within Grantor Trusts which are classified as Other Investments below, unrealized holding gains and losses are recognized immediately and recorded as Regulatory assets or Regulatory liabilities on the Condensed Consolidated Balance Sheets.

		June 30, 2013								December 31, 2012
(in millions)		Gross Unrealized Holding Gains			Gross Unrealized Holding Losses			Estimated Fair Value		Gross Unrealized Holding Gains			Gross Unrealized Holding Losses			Estimated Fair Value
NDTF
Cash and cash equivalents			$	―		$	―	$	91		$	―		$	―	$	105
Equity securities				1,418			27		3,170			1,132			19		2,837
Corporate debt securities				10			8		324			21			1		338
Municipal bonds				6			6		205			12			1		194
U.S. government bonds				12			13		625			24			1		625
Other debt securities				16			4		163			10			1		164
Total NDTF				1,462			58		4,578			1,199			23		4,263
Other Investments
Cash and cash equivalents				―			―		19			―			―		17
Equity securities				17			1		78			10			―		63
Corporate debt securities				1			2		334			2			―		381
Municipal bonds				3			2		77			4			1		70
U.S. government bonds				―			―		46			―			―		23
Other debt securities				―			2		96			1			―		86
Auction rate securities				―			7		26			―			6		29
Total Other Investments^(a)				21			14		676			17			7		669
Total Investments			$	1,483		$	72	$	5,254		$	1,216		$	30	$	4,932

(a)	These amounts are recorded in Other within Investments and Other Assets on the Condensed Consolidated Balance Sheets.

The table below summarizes the maturity date for debt securities held by Duke Energy. The table below excludes auction rate securities based on the stated maturity date. See Note 10 for information about fair value measurements related to investments in auction rate debt securities.

(in millions)	June 30, 2013
Due in one year or less		$	340
Due after one through five years			392
Due after five through 10 years			366
Due after 10 years			772
Total		$	1,870

Realized gains and losses, which were determined on a specific basis, from sales of Duke Energy's available-for-sale securities were as follows.

	Three Months Ended June 30,					Six Months Ended June 30,
(in millions)			2013	2012				2013	2012
Realized gains		$	32	$	29		$	63	$	50
Realized losses			15		―			22		2

DUKE ENERGY CAROLINAS

The following table presents the estimated fair value of short-term and long-term investments for Duke Energy Carolinas. For investments held within the NDTF, unrealized holding gains and losses are recognized immediately and recorded as Regulatory assets or Regulatory liabilities on the Condensed Consolidated Balance Sheets.

		June 30, 2013								December 31, 2012
(in millions)		Gross Unrealized Holding Gains			Gross Unrealized Holding Losses			Estimated Fair Value		Gross Unrealized Holding Gains			Gross Unrealized Holding Losses			Estimated Fair Value
NDTF
Cash and cash equivalents			$	―		$	―	$	32		$	―		$	―	$	40
Equity securities				754			13		1,763			600			5		1,592
Corporate debt securities				5			6		234			11			1		250
Municipal bonds				―			1		42			2			―		40
U.S. government bonds				4			7		321			10			―		304
Other debt securities				15			4		141			9			2		135
Total NDTF				778			31		2,533			632			8		2,361
Other Investments
Auction rate securities				―			1		3			―			1		3
Total Other Investments^(a)				―			1		3			―			1		3
Total Investments			$	778		$	32	$	2,536		$	632		$	9	$	2,364

(a)	These amounts are recorded in Other within Investments and Other Assets on the Condensed Consolidated Balance Sheets.

The table below summarizes the maturity date for debt securities held by Duke Energy Carolinas. The table below excludes auction rate securities based on the stated maturity date. See Note 10 for information about fair value measurements related to investments in auction rate debt securities.

(in millions)	June 30, 2013
Due in one year or less		$	14
Due after one through five years			172
Due after five through 10 years			183
Due after 10 years			369
Total		$	738

Realized gains and losses, which were determined on a specific basis, from sales of Duke Energy Carolinas' available-for-sale securities were as follows.

	Three Months Ended June 30,					Six Months Ended June 30,
(in millions)			2013	2012				2013	2012
Realized gains		$	21	$	26		$	46	$	46
Realized losses			6		―			10		2

PROGRESS ENERGY

The following table presents the estimated fair value of short-term and long-term investments for Progress Energy. For investments held within the NDTF, and investments within Grantor Trusts which are classified as Other Investments below, unrealized holding gains and losses are recognized immediately and recorded as Regulatory assets or Regulatory liabilities on the Condensed Consolidated Balance Sheets.

		June 30, 2013								December 31, 2012
(in millions)		Gross Unrealized Holding Gains			Gross Unrealized Holding Losses			Estimated Fair Value		Gross Unrealized Holding Gains			Gross Unrealized Holding Losses			Estimated Fair Value
NDTF
Cash and cash equivalents			$	―		$	―	$	59		$	―		$	―	$	65
Equity securities				664			14		1,407			532			14		1,245
Corporate debt securities				5			2		90			9			―		89
Municipal bonds				6			5		163			11			1		154
U.S. government bonds				8			6		304			14			―		321
Other debt securities				1			―		22			1			―		28
Total NDTF				684			27		2,045			567			15		1,902
Other Investments
Cash and cash equivalents				―			―		19			―			―		17
Municipal bonds				3			1		40			3			―		40
Total Other Investments^(a)				3			1		59			3			―		57
Total Investments			$	687		$	28	$	2,104		$	570		$	15	$	1,959

(a)	These amounts are recorded in Other within Investments and Other Assets on the Condensed Consolidated Balance Sheets.

Realized gains and losses, which were determined on a specific basis, from sales of Progress Energy's available-for-sale securities were as follows.

	Three Months Ended June 30,					Six Months Ended June 30,
(in millions)			2013	2012				2013	2012
Realized gains		$	10	$	8		$	15	$	15
Realized losses			7		1			9		―

DUKE ENERGY PROGRESS

The following table presents the estimated fair value of short-term and long-term investments for Duke Energy Progress. For investments held within the NDTF, and investments within Grantor Trusts which are classified as Other Investments below, unrealized holding gains and losses are recognized immediately and recorded as Regulatory assets or Regulatory liabilities on the Consolidated Balance Sheets.

		June 30, 2013								December 31, 2012
(in millions)		Gross Unrealized Holding Gains			Gross Unrealized Holding Losses			Estimated Fair Value		Gross Unrealized Holding Gains			Gross Unrealized Holding Losses			Estimated Fair Value
NDTF
Cash and cash equivalents			$	―		$	―	$	32		$	―		$	―	$	55
Equity securities				425			10		919			337			11		811
Corporate debt securities				4			2		80			8			―		78
Municipal bonds				3			4		102			4			―		80
U.S. government bonds				8			3		228			13			―		241
Other debt securities				1			―		11			1			―		10
Total NDTF				441			19		1,372			363			11		1,275
Other Investments
Cash and cash equivalents				―			―		2			―			―		3
Total Other Investments^(a)				―			―		2			―			―		3
Total Investments			$	441		$	19	$	1,374		$	363		$	11	$	1,278

(a)	These amounts are recorded in Other within Investments and Other Assets on the Condensed Consolidated Balance Sheets.

Realized gains and losses, which were determined on a specific basis, from sales of Duke Energy Progress' available-for-sale securities were as follows.

	Three Months Ended June 30,					Six Months Ended June 30,
(in millions)			2013	2012				2013	2012
Realized gains		$	6	$	5		$	8	$	10
Realized losses			3		1			4		3

DUKE ENERGY FLORIDA

The following table presents the estimated fair value of short-term and long-term investments for Duke Energy Florida. For investments held within the NDTF, and investments within Grantor Trusts which are classified as Other Investments below, unrealized holding gains and losses are recognized immediately and recorded as Regulatory assets or Regulatory liabilities on the Condensed Balance Sheets.

		June 30, 2013								December 31, 2012
(in millions)		Gross Unrealized Holding Gains			Gross Unrealized Holding Losses			Estimated Fair Value		Gross Unrealized Holding Gains			Gross Unrealized Holding Losses			Estimated Fair Value
NDTF
Cash and cash equivalents			$	―		$	―	$	27		$	―		$	―	$	10
Equity securities				239			4		488			194			4		434
Corporate debt securities				1			―		10			1			―		11
Municipal bonds				3			1		61			7			―		74
U.S. government bonds				―			3		76			1			―		80
Other debt securities				―			―		11			1			―		18
Total NDTF				243			8		673			204			4		627
Other Investments
Cash and cash equivalents				―			―		3			―			―		1
Municipal bonds				3			―		40			3			―		40
Total Other Investments^(a)				3			―		43			3			―		41
Total Investments			$	246		$	8	$	716		$	207		$	4	$	668

(a)	These amounts are recorded in Other within Investments and Other Assets on the Condensed Balance sheets.

Realized gains and losses, which were determined on a specific basis, from sales of Duke Energy Florida's available-for-sale securities were as follows.

	Three Months Ended June 30,					Six Months Ended June 30,
(in millions)			2013	2012				2013		2012
Realized gains		$	5	$	3		$	8	$	5
Realized losses			3		2			4		3

DUKE ENERGY INDIANA

The following table presents the estimated fair value of short-term and long-term investments for Duke Energy Indiana. Unrealized holding gains and losses on these investments are recognized immediately and recorded as Regulatory assets or Regulatory liabilities on the Condensed Consolidated Balance Sheets.

		June 30, 2013								December 31, 2012
(in millions)		Gross Unrealized Holding Gains			Gross Unrealized Holding Losses			Estimated Fair Value		Gross Unrealized Holding Gains			Gross Unrealized Holding Losses			Estimated Fair Value
Other Investments
Equity securities			$	15		$	―	$	56		$	9		$	―	$	50
Municipal bonds				―			1		28			1			―		28
Total Other Investments^(a)				15			1		84			10			―	$	78
Total Investments			$	15		$	1	$	84		$	10		$	―	$	78

(a)	These amounts are recorded in Other within Investments and Other Assets on the Condensed Consolidated Balance Sheets.