EMPLOYEE BENEFIT PLANS

DEFINED BENEFIT RETIREMENT PLANS

Duke Energy maintains, 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 based upon a percentage of current eligible earnings based on age and/or years of service and interest credits. Certain employees are covered under plans that use a final average earnings formula. Under these average earnings formulas, a plan participant accumulates a retirement benefit equal to the sum of percentages of their (i) highest three-year or four-year average earnings, (ii) highest three-year or four-year average earnings in excess of covered compensation per year of participation (maximum of 35 years), and/or (iii) highest three or four-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. As of January 1, 2014, the qualified and non-qualified non-contributory defined benefit plans are closed to new and rehired non-union and certain unionized employees.

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

Net periodic benefit costs disclosed in the tables below 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. 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 13.

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		Duke Energy Progress		Duke Energy Florida		Duke Energy Ohio		Duke Energy Indiana
Anticipated Contributions:
2015	$	302	$	91	$	83	$	42	$	40	$	8	$	19
Contributions Made:
2014	$	—	$	—	$	—	$	—	$	—	$	—	$	—
2013	250		—		250		63		133		—		—
2012	304		—		346		141		128		—		—

QUALIFIED PENSION PLANS

Components of Net Periodic Pension Costs



	Year Ended December 31, 2014
(in millions)	Duke Energy			Duke Energy Carolinas			Progress Energy			Duke Energy Progress			Duke Energy Florida			Duke Energy Ohio			Duke Energy Indiana
Service cost	$	135		$	41		$	40		$	21		$	20		$	4		$	9
Interest cost on projected benefit obligation	344			85			112			54			57			20			29
Expected return on plan assets	(511		)	(132		)	(173		)	(85		)	(85		)	(27		)	(41		)
Amortization of actuarial loss	150			36			68			32			32			4			13
Amortization of prior service credit	(15		)	(8		)	(3		)	(2		)	(1		)	—			—
Other	8			2			3			1			1			—			1
Net periodic pension costs	$	111		$	24		$	47		$	21		$	24		$	1		$	11



	Year Ended December 31, 2013
(in millions)	Duke Energy			Duke Energy Carolinas			Progress Energy			Duke Energy Progress			Duke Energy Florida			Duke Energy Ohio			Duke Energy Indiana
Service cost	$	167		$	49		$	60		$	22		$	30		$	6		$	11
Interest cost on projected benefit obligation	320			80			116			50			53			21			28
Expected return on plan assets	(549		)	(148		)	(199		)	(94		)	(87		)	(31		)	(46		)
Amortization of actuarial loss	244			60			101			46			49			13			24
Amortization of prior service (credit) cost	(11		)	(6		)	(4		)	(1		)	(2		)	—			1
Other	7			2			2			1			1			—			1
Net periodic pension costs	$	178		$	37		$	76		$	24		$	44		$	9		$	19



	Year Ended December 31, 2012
(in millions)	Duke Energy			Duke Energy Carolinas			Progress Energy			Duke Energy Progress			Duke Energy Florida			Duke Energy Ohio			Duke Energy Indiana
Service cost	$	122		$	35		$	63		$	25		$	30		$	6		$	9
Interest cost on projected benefit obligation	307			90			127			58			56			31			30
Expected return on plan assets	(472		)	(146		)	(188		)	(96		)	(81		)	(45		)	(46		)
Amortization of actuarial loss	144			45			93			37			48			10			15
Amortization of prior service cost (credit)	10			1			9			8			(1		)	1			1
Other	6			2			2			1			1			—			—
Net periodic pension costs	$	117		$	27		$	106		$	33		$	53		$	3		$	9

Amounts Recognized in Accumulated Other Comprehensive Income and Regulatory Assets



	Year Ended December 31, 2014
(in millions)	Duke Energy			Duke Energy Carolinas		Progress Energy			Duke Energy Progress			Duke Energy Florida		Duke Energy Ohio		Duke Energy Indiana
Regulatory assets, net increase (decrease)	$	112		$	30	$	(73	)	$	(17	)	$	11	$	17	$	4
Accumulated other comprehensive (income) loss
Deferred income tax expense	$	(10	)	—		(2		)	—			—		—		—
Actuarial losses arising during the year	29			—		—			—			—		—		—
Prior year service credit arising during the year	—			—		—			—			—		—		—
Amortization of prior year actuarial losses	(9		)	—		—			—			—		—		—
Reclassification of actuarial losses to regulatory assets	(1		)	—		—			—			—		—		—
Net amount recognized in accumulated other comprehensive income	$	9		$	—	$	(2	)	$	—		$	—	$	—	$	—



	Year Ended December 31, 2013
(in millions)	Duke Energy			Duke Energy Carolinas			Progress Energy			Duke Energy Progress			Duke Energy Florida			Duke Energy Ohio			Duke Energy Indiana
Regulatory assets, net decrease	$	(788	)	$	(205	)	$	(253	)	$	(109	)	$	(146	)	$	(96	)	$	(99	)
Accumulated other comprehensive (income) loss
Deferred income tax benefit	$	18		$	—		$	—		$	—		$	—		$	—		$	—
Actuarial gains arising during the year	(33		)	—			(2		)	—			—			—			—
Prior year service credit arising during the year	(1		)	—			—			—			—			—			—
Amortization of prior year actuarial losses	(15		)	—			(3		)	—			—			—			—
Reclassification of actuarial losses to regulatory assets	3			—			—			—			—			—			—
Net amount recognized in accumulated other comprehensive income	$	(28	)	$	—		$	(5	)	$	—		$	—		$	—		$	—

Reconciliation of Funded Status to Net Amount Recognized



	Year Ended December 31, 2014
(in millions)	Duke Energy			Duke Energy Carolinas			Progress Energy			Duke Energy Progress			Duke Energy Florida			Duke Energy Ohio			Duke Energy Indiana
Change in Projected Benefit Obligation
Obligation at prior measurement date	$	7,510		$	1,875		$	2,739		$	1,172		$	1,233		$	442		$	632
Service cost	135			41			40			21			20			4			9
Interest cost	344			85			112			54			57			20			29
Actuarial loss^(a)	618			132			211			98			105			41			41
Transfers	—			37			(375		)	(61		)	(9		)	(6		)	—
Plan amendments	(4		)	(1		)	—			—			—			(1		)	—
Benefits paid	(496		)	(116		)	(170		)	(97		)	(71		)	(31		)	(38		)
Obligation at measurement date	$	8,107		$	2,053		$	2,557		$	1,187		$	1,335		$	469		$	673
Accumulated Benefit Obligation at measurement date	$	7,966		$	2,052		$	2,519		$	1,187		$	1,297		$	459		$	645
Change in Fair Value of Plan Assets
Plan assets at prior measurement date	$	8,142		$	2,162		$	2,944		$	1,330		$	1,299		$	448		$	654
Actual return on plan assets	852			217			300			149			144			45			65
Benefits paid	(496		)	(116		)	(170		)	(97		)	(71		)	(31		)	(38		)
Transfers	—			37			(352		)	(61		)	(9		)	(6		)	—
Plan assets at measurement date	$	8,498		$	2,300		$	2,722		$	1,321		$	1,363		$	456		$	681
Funded status of plan	$	391		$	247		$	165		$	134		$	28		$	(13	)	$	8


(a)	Includes an increase in benefit obligation of $180 million as a result of changes in Duke Energy's mortality assumptions.



	Year Ended December 31, 2013
(in millions)	Duke Energy			Duke Energy Carolinas			Progress Energy			Duke Energy Progress			Duke Energy Florida			Duke Energy Ohio			Duke Energy Indiana
Change in Projected Benefit Obligation
Obligation at prior measurement date	8,030			2,028			2,868			1,264			1,309			527			684
Service cost	167			49			60			22			30			6			11
Interest cost	320			80			116			50			53			21			28
Actuarial gains	(399		)	(73		)	(118		)	(26		)	(75		)	(71		)	(56		)
Transfers	—			(26		)	(7		)	(45		)	(17		)	(2		)	(2		)
Plan amendments	(41		)	(13		)	(19		)	(8		)	(7		)	—			—
Benefits paid	(567		)	(170		)	(161		)	(85		)	(60		)	(39		)	(33		)
Obligation at measurement date	7,510			1,875			2,739			1,172			1,233			442			632
Accumulated Benefit Obligation at measurement date	7,361			1,875			2,698			1,172			1,192			429			608
Change in Fair Value of Plan Assets
Plan assets at prior measurement date	7,754			2,151			2,647			1,289			1,150			446			627
Actual return on plan assets	705			207			215			108			93			43			62
Benefits paid	(567		)	(170		)	(161		)	(85		)	(60		)	(39		)	(33		)
Transfers	—			(26		)	(7		)	(45		)	(17		)	(2		)	(2		)
Employer contributions	250			—			250			63			133			—			—
Plan assets at measurement date	$	8,142		$	2,162		$	2,944		$	1,330		$	1,299		$	448		$	654
Funded status of plan	$	632		$	287		$	205		$	158		$	66		$	6		$	22

Amounts Recognized in the Consolidated Balance Sheets



	December 31, 2014
(in millions)	Duke Energy			Duke Energy Carolinas			Progress Energy			Duke Energy Progress			Duke Energy Florida			Duke Energy Ohio			Duke Energy Indiana
Prefunded pension^(a)	$	441		$	247		$	165		$	134		$	28		$	—		$	8
Non-current pension liability^(b)	$	50		$	—		$	—		$	—		$	—		$	13		$	—
Net asset recognized	$	391		$	247		$	165		$	134		$	28		$	(13	)	$	8
Regulatory assets	$	1,711		$	407		$	753		$	346		$	406		$	65		$	151
Accumulated other comprehensive (income) loss
Deferred income tax asset	$	(51	)	$	—		$	(11	)	$	—		$	—		$	—		$	—
Prior service credit	(5		)	—			—			—			—			—			—
Net actuarial loss	140			—			21			—			—			—			—
Net amounts recognized in accumulated other comprehensive loss^(c)	$	84		$	—		$	10		$	—		$	—		$	—		$	—
Amounts to be recognized in net periodic pension expense in the next year
Unrecognized net actuarial loss	$	166		$	39		$	65		$	34		$	31		$	6		$	14
Unrecognized prior service credit	(15		)	(8		)	(3		)	(2		)	(1		)	—			—



	December 31, 2013
(in millions)	Duke Energy			Duke Energy Carolinas		Progress Energy			Duke Energy Progress		Duke Energy Florida		Duke Energy Ohio			Duke Energy Indiana
Prefunded pension^(a)	$	632		$	287	$	230		$	158	$	66	$	2		$	75
Non-current pension liability^(b)	$	—		$	—	$	25		$	—	$	—	$	(4	)	$	53
Net asset recognized	$	632		$	287	$	205		$	158	$	66	$	6		$	22
Regulatory assets	$	1,599		$	377	$	826		$	363	$	395	$	48		$	147
Accumulated other comprehensive (income) loss
Deferred income tax asset	$	(41	)	$	—	$	(9	)	$	—	$	—	$	—		$	—
Prior service credit	(5		)	—		—			—		—		—			—
Net actuarial loss	121			—		21			—		—		—			—
Net amounts recognized in accumulated other comprehensive loss^(c)	$	75		$	—	$	12		$	—	$	—	$	—		$	—


(a)	Included in Other within Investments and Other Assets on the Consolidated Balance Sheets.


(b)	Included in Accrued pension and other post-retirement benefit costs on the Consolidated Balance Sheets.


(c)	Excludes accumulated other comprehensive income of $22 million and $16 million as of 2014 and 2013, respectively, net of tax, associated with a Brazilian retirement plan.

Information for Plans with Accumulated Benefit Obligation in Excess of Plan Assets



	December 31, 2014
(in millions)	Duke Energy		Duke Energy Ohio
Projected benefit obligation	$	702	$	315
Accumulated benefit obligation	672		306
Fair value of plan assets	652		302

As of December 31, 2013, none of the qualified pension plans had an accumulated benefit obligation in excess of plan assets.

Assumptions Used for Pension Benefits Accounting

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 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.

The average remaining service period of active covered employees is nine years for Duke Energy, Duke Energy Carolinas, Progress Energy, Duke Energy Progress, Duke Energy Florida, Duke Energy Ohio and Duke Energy Indiana.

The following tables present the assumptions or range of assumptions used for pension benefit accounting.



	December 31,
	2014				2013				2012^(a)
Benefit Obligations
Discount rate				4.10%				4.70%				4.10%
Salary increase	4.00	%	-	4.40%	4.00	%	-	4.40%	4.00	%	-	4.30%
Net Periodic Benefit Cost
Discount rate				4.70%				4.10%	4.60	%	-	5.10%
Salary increase	4.00	%	-	4.40%	4.00	%	-	4.30%	4.00	%	-	4.40%
Expected long-term rate of return on plan assets				6.75%				7.75%	8.00	%	-	8.25%


(a)	For Progress Energy plans, the assumptions used in 2012 to determine net periodic pension costs reflect remeasurement as of July 1, 2012, due to the merger between Duke Energy and Progress Energy.

Expected Benefit Payments



(in millions)	Duke Energy		Duke Energy Carolinas		Progress Energy		Duke Energy Progress		Duke Energy Florida		Duke Energy Ohio		Duke Energy Indiana
Years ending December 31,
2015	$	584	$	175	$	150	$	80	$	67	$	34	$	45
2016	604		184		158		85		70		35		46
2017	616		195		161		86		73		34		45
2018	625		200		165		87		76		34		46
2019	626		194		168		88		78		34		46
2020 - 2024	3,107		924		868		437		420		168		229

NON-QUALIFIED PENSION PLANS

Components of Net Periodic Pension Costs



	Year Ended December 31, 2014
(in millions)	Duke Energy			Duke Energy Carolinas		Progress Energy			Duke Energy Progress		Duke Energy Florida		Duke Energy Ohio		Duke Energy Indiana
Service cost	$	3		$	—	$	1		$	1	$	—	$	—	$	—
Interest cost on projected benefit obligation	14			1		5			1		2		—		—
Amortization of actuarial loss	3			—		2			—		—		—		—
Amortization of prior service credit	(1		)	—		(1		)	—		—		—		—
Net periodic pension costs	$	19		$	1	$	7		$	2	$	2	$	—	$	—



	Year Ended December 31, 2013
(in millions)	Duke Energy			Duke Energy Carolinas		Progress Energy			Duke Energy Progress		Duke Energy Florida		Duke Energy Ohio		Duke Energy Indiana
Service cost	$	3		$	—	$	1		$	1	$	—	$	—	$	—
Interest cost on projected benefit obligation	13			1		7			1		1		—		—
Amortization of actuarial loss	5			—		3			1		1		—		—
Amortization of prior service credit	(1		)	—		(1		)	—		—		—		—
Net periodic pension costs	$	20		$	1	$	10		$	3	$	2	$	—	$	—



	Year Ended December 31, 2012
(in millions)	Duke Energy		Duke Energy Carolinas		Progress Energy			Duke Energy Progress		Duke Energy Florida		Duke Energy Ohio		Duke Energy Indiana
Service cost	$	2	$	—	$	2		$	1	$	—	$	—	$	—
Interest cost on projected 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	$	—	$	—

Amounts Recognized in Accumulated Other Comprehensive Income and Regulatory Assets and Liabilities



	Year Ended December 31, 2014
(in millions)	Duke Energy			Duke Energy Carolinas		Progress Energy			Duke Energy Progress		Duke Energy Florida		Duke Energy Ohio		Duke Energy Indiana
Regulatory assets, net increase	$	44		$	1	$	14		$	4	$	19	$	1	$	2
Regulatory liabilities, net decrease	$	(7	)	$	—	$	—		$	—	$	—	$	—	$	—
Accumulated other comprehensive (income) loss
Deferred income tax benefit	$	4		$	—	$	5		$	—	$	—	$	—	$	—
Actuarial gains arising during the year	(9		)	—		(11		)	—		—		—		—
Net amount recognized in accumulated other comprehensive loss (income)	$	(5	)	$	—	$	(6	)	$	—	$	—	$	—	$	—



	Year Ended December 31, 2013
(in millions)	Duke Energy			Duke Energy Carolinas		Progress Energy			Duke Energy Progress			Duke Energy Florida			Duke Energy Ohio		Duke Energy Indiana
Regulatory assets, net (decrease) increase	$	(14	)	$	1	$	(16	)	$	(4	)	$	(3	)	$	—	$	(2	)
Regulatory liabilities, net increase	$	5		$	—	$	—		$	—		$	—		$	—	$	—
Accumulated other comprehensive (income) loss
Deferred income tax benefit	$	—		$	—	$	1		$	—		$	—		$	—	$	—
Actuarial losses (gains) arising during the year	2			—		(5		)	—			—			—		—
Prior year service credit arising during the year	(1		)	—		—			—			—			—		—
Net amount recognized in accumulated other comprehensive loss (income)	$	1		$	—	$	(4	)	$	—		$	—		$	—	$	—

Reconciliation of Funded Status to Net Amount Recognized



	Year Ended December 31, 2014
(in millions)	Duke Energy			Duke Energy Carolinas			Progress Energy			Duke Energy Progress			Duke Energy Florida			Duke Energy Ohio		Duke Energy Indiana
Change in Projected Benefit Obligation
Obligation at prior measurement date	$	304		$	15		$	140		$	34		$	39		$	3	$	5
Service cost	3			—			1			1			—			—		—
Interest cost	14			1			5			1			2			—		—
Actuarial losses^(a)	43			2			11			2			20			1		1
Settlements	—			—			—			—			—			—		—
Plan amendments	—			—			—			—			—			—		—
Transfers	—			—			(32		)	—			4			—		—
Benefits paid	(27		)	(2		)	(9		)	(3		)	(4		)	—		(1		)
Obligation at measurement date	$	337		$	16		$	116		$	35		$	61		$	4	$	5
Accumulated Benefit Obligation at measurement date	$	333		$	15		$	116		$	35		$	61		$	4	$	5
Change in Fair Value of Plan Assets
Plan assets at prior measurement date	—			—			—			—			—			—		—
Benefits paid	(27		)	(2		)	(9		)	(3		)	(4		)	—		(1		)
Employer contributions	27			2			9			3			4			—		1
Plan assets at measurement date	$	—		$	—		$	—		$	—		$	—		$	—	$	—


(a)	Includes an increase in benefit obligation of $21 million as a result of changes in Duke Energy's mortality assumptions.



	Year Ended December 31, 2013
(in millions)	Duke Energy			Duke Energy Carolinas			Progress Energy			Duke Energy Progress			Duke Energy Florida			Duke Energy Ohio			Duke Energy Indiana
Change in Projected Benefit Obligation
Obligation at prior measurement date	$	335		$	16		$	176		$	38		$	45		$	4		$	5
Service cost	3			—			1			1			—			—			—
Interest cost	13			1			7			1			1			—			—
Actuarial (gains) losses	(15		)	1			(11		)	(3		)	(3		)	(1		)	—
Settlements	(5		)	—			—			—			—			—			—
Plan amendments	(1		)	—			—			—			—			—			—
Transfers	—			—			(21		)	—			—			—			—
Benefits paid	(26		)	(3		)	(12		)	(3		)	(4		)	—			—
Obligation at measurement date	$	304		$	15		$	140		$	34		$	39		$	3		$	5
Accumulated Benefit Obligation at measurement date	$	302		$	15		$	140		$	34		$	39		$	3		$	5
Change in Fair Value of Plan Assets
Plan assets at prior measurement date	—			—			—			—			—			—			—
Benefits paid	(26		)	(3		)	(12		)	(3		)	(4		)	—			—
Employer contributions	26			3			12			3			4			—			—
Plan assets at measurement date	$	—		$	—		$	—		$	—		$	—		$	—		$	—

Amounts Recognized in the Consolidated Balance Sheets



	December 31, 2014
(in millions)	Duke Energy			Duke Energy Carolinas		Progress Energy			Duke Energy Progress		Duke Energy Florida		Duke Energy Ohio		Duke Energy Indiana
Current pension liability^(a)	$	27		$	2	$	8		$	3	$	4	$	—	$	—
Non-current pension liability^(b)	310			14		108			32		57		4		5
Total accrued pension liability	$	337		$	16	$	116		$	35	$	61	$	4	$	5
Regulatory assets	$	89		$	5	$	32		$	7	$	25	$	1	$	2
Regulatory liabilities	$	—		$	—	$	—		$	—	$	—	$	—	$	—
Accumulated other comprehensive (income) loss
Deferred income tax asset	4			—		$	2		—		—		—		—
Prior service credit	(1		)	—		—			—		—		—		—
Net actuarial gain	(8		)	—		(4		)	—		—		—		—
Net amounts recognized in accumulated other comprehensive income	$	(5	)	$	—	$	(2	)	$	—	$	—	$	—	$	—
Amounts to be recognized in net periodic pension expense in the next year
Unrecognized net actuarial loss	$	6		—		$	2		$	1	2		—		—
Unrecognized prior service credit	(1		)	—		—			—		—		—		—



	December 31, 2013
(in millions)	Duke Energy			Duke Energy Carolinas		Progress Energy			Duke Energy Progress		Duke Energy Florida		Duke Energy Ohio		Duke Energy Indiana
Current pension liability^(a)	$	30		$	2	$	11		$	2	$	3	$	—	$	—
Non-current pension liability^(b)	274			13		129			32		36		3		5
Total accrued pension liability	$	304		$	15	$	140		$	34	$	39	$	3	$	5
Regulatory assets	$	45		$	4	$	18		$	3	$	6	$	—	$	—
Regulatory liabilities	$	7		$	—	$	—		$	—	$	—	$	—	$	—
Accumulated other comprehensive (income) loss
Deferred income tax asset	$	—		$	—	$	(3	)	$	—	$	—	$	—	$	—
Prior service credit	(1		)	—		—			—		—		—		—
Net actuarial loss	1			—		7			—		—		—		—
Net amounts recognized in accumulated other comprehensive loss	$	—		$	—	$	4		$	—	$	—	$	—	$	—


(a)	Included in Other within Current Liabilities on the Consolidated Balance Sheets.


(b)	Included in Accrued pension and other post-retirement benefit costs on the Consolidated Balance Sheets.

Information for Plans with Accumulated Benefit Obligation in Excess of Plan Assets



	December 31, 2014
(in millions)	Duke Energy		Duke Energy Carolinas		Progress Energy		Duke Energy Progress		Duke Energy Florida		Duke Energy Ohio		Duke Energy Indiana
Projected benefit obligation	$	337	$	16	$	116	$	35	$	61	$	4	$	5
Accumulated benefit obligation	333		15		116		35		61		4		5



	December 31, 2013
(in millions)	Duke Energy		Duke Energy Carolinas		Progress Energy		Duke Energy Progress		Duke Energy Florida		Duke Energy Ohio		Duke Energy Indiana
Projected benefit obligation	$	304	$	15	$	140	$	34	$	39	$	3	$	5
Accumulated benefit obligation	302		15		140		34		39		3		5

Assumptions Used for Pension Benefits Accounting

The average remaining service period of active covered employees is 13 years for Duke Energy and Progress Energy, nine years for Duke Energy Carolinas, Duke Energy Ohio and Duke Energy Indiana, 12 years for Duke Energy Progress and 17 years for Duke Energy Florida.

The following tables present the assumptions used for pension benefit accounting.



	December 31,
	2014		2013		2012^(a)
Benefit Obligations
Discount rate	4.10	%	4.70	%				4.10%
Salary increase	4.40	%	4.40	%				4.30%
Net Periodic Benefit Cost
Discount rate	4.70	%	4.10	%	4.60	%	-	5.10%
Salary increase	4.40	%	4.30	%				4.40%


(a)	For Progress Energy plans, the assumptions used in 2012 to determine net periodic pension costs reflect remeasurement as of July 1, 2012, due to the merger between Duke Energy and Progress Energy.

Expected Benefit Payments



(in millions)	Duke Energy		Duke Energy Carolinas		Progress Energy		Duke Energy Progress		Duke Energy Florida		Duke Energy Ohio		Duke Energy Indiana
Years ending December 31,
2015	$	28	$	2	$	8	$	3	$	4	$	—	$	—
2016	27		2		8		3		4		—		—
2017	27		2		8		3		4		—		—
2018	24		2		8		3		4		—		—
2019	24		2		8		3		4		—		—
2020 - 2024	116		6		38		13		19		2		2

Other Post-Retirement Benefit Plans

Duke Energy provides, 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, dental, and prescription drug coverage and are subject to certain limitations, such as deductibles and co-payments.

Duke Energy did not make any pre-funding contributions to its other post-retirement benefit plans during the years ended December 31, 2014, 2013 or 2012.

Components of Net Periodic Other Post-Retirement Benefit Costs



	Year Ended December 31, 2014
(in millions)	Duke Energy			Duke Energy Carolinas			Progress Energy			Duke Energy Progress			Duke Energy Florida			Duke Energy Ohio			Duke Energy Indiana
Service cost	$	10		$	2		$	4		$	1		$	3		$	—		$	1
Interest cost on accumulated post-retirement benefit obligation	49			12			22			11			12			2			5
Expected return on plan assets	(13		)	(9		)	—			—			—			—			(1		)
Amortization of actuarial loss (gain)	39			3			42			31			10			(2		)	—
Amortization of prior service credit	(125		)	(11		)	(95		)	(73		)	(21		)	—			—
Net periodic post-retirement benefit costs	$	(40	)	$	(3	)	$	(27	)	$	(30	)	$	4		$	—		$	5



	Year Ended December 31, 2013
(in millions)	Duke Energy			Duke Energy Carolinas			Progress Energy			Duke Energy Progress			Duke Energy Florida			Duke Energy Ohio			Duke Energy Indiana
Service cost	$	24		$	2		$	18		$	9		$	7		$	1		$	1
Interest cost on accumulated post-retirement benefit obligation	68			13			41			22			16			2			5
Expected return on plan assets	(14		)	(11		)	—			—			—			(1		)	(1		)
Amortization of actuarial loss (gain)	52			3			57			34			16			(1		)	1
Amortization of prior service credit	(41		)	(7		)	(30		)	(20		)	(6		)	(1		)	—
Net periodic post-retirement benefit costs	$	89		$	—		$	86		$	45		$	33		$	—		$	6



	Year Ended December 31, 2012
(in millions)	Duke Energy			Duke Energy Carolinas			Progress Energy			Duke Energy Progress		Duke 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 actuarial loss (gain)	14			3			35			20		12			(2		)	—
Amortization of prior service credit	(8		)	(5		)	—			—		—			(1		)	—
Amortization of net transition liability	10			7			4			—		3			—			—
Special termination benefit cost	9			1			5			2		1			—			—
Net periodic post-retirement benefit costs	$	80		$	13		$	102		$	53	$	39		$	—		$	6

Amounts Recognized in Accumulated Other Comprehensive Income and Regulatory Assets and Liabilities



	Year Ended December 31, 2014
(in millions)	Duke Energy			Duke Energy Carolinas		Progress Energy			Duke Energy Progress		Duke Energy Florida			Duke Energy Ohio			Duke Energy Indiana
Regulatory assets, net increase (decrease)	$	162		$	34	$	129		$	97	$	(4	)	$	—		$	(7	)
Regulatory liabilities, net increase (decrease)	$	249		$	76	$	122		$	61	$	61		$	(2	)	$	14
Accumulated other comprehensive (income) loss
Deferred income tax benefit	$	1		$	—	$	1		$	—	$	—		$	—		$	—
Actuarial losses (gains) arising during the year	1			—		(2		)	—		—			—			—
Prior year service credit arising during the year	(6		)	—		—			—		—			—			—
Amortization of prior year prior service credit	2			—		—			—		—			—			—
Net amount recognized in accumulated other comprehensive income	$	(2	)	$	—	$	(1	)	$	—	$	—		$	—		$	—



	Year Ended December 31, 2013
(in millions)	Duke Energy			Duke Energy Carolinas			Progress Energy			Duke Energy Progress			Duke Energy Florida			Duke Energy Ohio		Duke Energy Indiana
Regulatory assets, net (decrease) increase	$	(683	)	$	(51	)	$	(634	)	$	(388	)	$	(166	)	$	—	$	(6	)
Regulatory liabilities, net increase (decrease)	$	30		$	—		$	—		$	—		$	—		$	3	$	9
Accumulated other comprehensive (income) loss
Deferred income tax benefit	$	2		$	—		$	—		$	—		$	—		$	—	$	—
Actuarial gains arising during the year	(4		)	—			—			—			—			—		—
Prior year service credit arising during the year	(3		)	—			—			—			—			—		—
Amortization of prior year actuarial loss	1			—			—			—			—			—		—
Net amount recognized in accumulated other comprehensive income	$	(4	)	$	—		$	—		$	—		$	—		$	—	$	—

Reconciliation of Funded Status to Accrued Other Post-Retirement Benefit Costs



	Year Ended December 31, 2014
(in millions)	Duke Energy			Duke Energy Carolinas			Progress Energy			Duke Energy Progress			Duke Energy Florida			Duke Energy Ohio			Duke Energy Indiana
Change in Projected Benefit Obligation
Accumulated post-retirement benefit obligation at prior measurement date	$	1,106		$	265		$	533		$	233		$	253		$	42		$	118
Service cost	10			2			4			1			3			—			1
Interest cost	49			12			22			11			12			2			5
Plan participants' contributions	25			10			8			4			4			—			2
Actuarial gains^(a)	(87		)	(35		)	(19		)	(21		)	—			—			(20		)
Transfers	—			1			(48		)	(2		)	—			(1		)	—
Plan amendments	(85		)	(4		)	(77		)	—			(78		)	(1		)	—
Benefits paid	(103		)	(31		)	(44		)	(19		)	(24		)	(3		)	(10		)
Accrued retiree drug subsidy	1			—			—			—			—			—			—
Accumulated post-retirement benefit obligation at measurement date	$	916		$	220		$	379		$	207		$	170		$	39		$	96
Change in Fair Value of Plan Assets
Plan assets at prior measurement date	$	214		$	143		—			—			—			$	8		$	18
Actual return on plan assets	18			12			—			—			—			—			2
Benefits paid	(103		)	(31		)	(44		)	(19		)	(24		)	(3		)	(10		)
Transfers	—			(1		)	—			—			—			—			—
Employer contributions	73			12			36			14			20			3			11
Plan participants' contributions	25			10			8			4			4			—			2
Plan assets at measurement date	$	227		$	145		$	—		$	(1	)	$	—		$	8		$	23


(a)	Includes an increase in benefit obligation of $7 million as a result of changes in Duke Energy's mortality assumptions.



	Year Ended December 31, 2013
(in millions)	Duke Energy			Duke Energy Carolinas			Progress Energy			Duke Energy Progress			Duke Energy Florida			Duke Energy Ohio			Duke Energy Indiana
Change in Projected Benefit Obligation
Accumulated post-retirement benefit obligation at prior measurement date	$	1,794		$	316		$	1,128		$	612		$	413		$	48		$	136
Service cost	24			2			18			9			7			1			1
Interest cost	68			13			41			22			16			2			5
Plan participants' contributions	47			15			14			6			7			3			3
Actuarial gains	(227		)	(32		)	(156		)	(73		)	(70		)	(6		)	(12		)
Transfers	—			—			(1		)	(8		)	—			—			—
Plan amendments	(476		)	(16		)	(455		)	(311		)	(91		)	—			(3		)
Benefits paid	(132		)	(36		)	(60		)	(26		)	(31		)	(6		)	(14		)
Accrued retiree drug subsidy	8			3			4			2			2			—			2
Accumulated post-retirement benefit obligation at measurement date	$	1,106		$	265		$	533		$	233		$	253		$	42		$	118
Change in Fair Value of Plan Assets
Plan assets at prior measurement date	$	198		$	134		$	—		$	—		$	—		$	7		$	17
Actual return on plan assets	18			13			—			—			—			2			2
Benefits paid	(132		)	(36		)	(60		)	(26		)	(31		)	(6		)	(14		)
Transfers	—			(1		)	—			—			—			—			—
Employer contributions	83			18			46			20			24			2			10
Plan participants' contributions	47			15			14			6			7			3			3
Plan assets at measurement date	$	214		$	143		$	—		$	—		$	—		$	8		$	18

Amounts Recognized in the Consolidated Balance Sheets



	December 31, 2014
(in millions)	Duke Energy			Duke Energy Carolinas			Progress Energy			Duke Energy Progress			Duke Energy Florida			Duke Energy Ohio			Duke Energy Indiana
Current post-retirement liability^(a)	$	35		$	—		$	29		$	16		$	14		$	2		$	—
Non-current post-retirement liability^(b)	654			75			350			192			156			29			73
Total accrued post-retirement liability	$	689		$	75		$	379		$	208		$	170		$	31		$	73
Regulatory assets	$	—		$	—		$	—		$	—		$	—		$	—		$	64
Regulatory liabilities	$	380		$	76		$	122		$	61		$	61		$	19		$	91
Accumulated other comprehensive (income) loss
Deferred income tax liability	$	5		$	—		$	1		$	—		$	—		$	—		$	—
Prior service credit	(9		)	—			—			—			—			—			—
Net actuarial gain	(5		)	—			(2		)	—			—			—			—
Net amounts recognized in accumulated other comprehensive income	$	(9	)	$	—		$	(1	)	$	—		$	—		$	—		$	—
Amounts to be recognized in net periodic pension expense in the next year
Unrecognized net actuarial loss (gain)	$	16		$	(1	)	$	28		$	18		$	10		$	(2	)	$	—
Unrecognized prior service credit	(140		)	(14		)	(103		)	(68		)	(35		)	—			—



	December 31, 2013
(in millions)	Duke Energy			Duke Energy Carolinas			Progress Energy			Duke Energy Progress			Duke Energy Florida		Duke Energy Ohio		Duke Energy Indiana
Current post-retirement liability^(a)	$	39		$	—		$	36		$	17		$	16	$	2	$	—
Non-current post-retirement liability^(b)	853			122			497			216			237		32		100
Total accrued post-retirement liability	$	892		$	122		$	533		$	233		$	253	$	34	$	100
Regulatory assets	$	(162	)	$	(34	)	$	(129	)	$	(97	)	$	4	$	—	$	71
Regulatory liabilities	$	131		$	—		$	—		$	—		$	—	$	21	$	77
Accumulated other comprehensive (income) loss
Deferred income tax liability	$	4		$	—		$	—		$	—		$	—	$	—	$	—
Prior service credit	(5		)	—			—			—			—		—		—
Net actuarial gain	(6		)	—			—			—			—		—		—
Net amounts recognized in accumulated other comprehensive income	$	(7	)	$	—		$	—		$	—		$	—	$	—	$	—


(a)	Included in Other within Current Liabilities on the Consolidated Balance Sheets.


(b)	Included in Accrued pension and other post-retirement benefit costs on the Consolidated Balance Sheets.

Assumptions Used for Other Post-Retirement Benefits Accounting

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 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 present value of the plan’s projected benefit payments discounted at this rate with the market value of the bonds selected.

The following tables present the assumptions used for other post-retirement benefits accounting.



	December 31,
	2014		2013		2012^(a)
Benefit Obligations
Discount rate	4.10	%	4.70	%				4.10	%
Net Periodic Benefit Cost
Discount rate	4.70	%	4.10	%	4.60	%	-	5.10	%
Expected long-term rate of return on plan assets	6.75	%	7.75	%	5.00	%	-	8.00	%
Assumed tax rate	35	%	35	%				35	%


(a)	For Progress Energy plans, the assumptions used in 2012 to determine net periodic post-retirement benefit costs reflect remeasurement as of July 1, 2012, due to the merger between Duke Energy and Progress Energy.

Assumed Health Care Cost Trend Rate



	December 31,
	2014		2013
Health care cost trend rate assumed for next year	6.75	%	8.50	%
Rate to which the cost trend is assumed to decline (the ultimate trend rate)	4.75	%	5.00	%
Year that rate reaches ultimate trend	2023		2021

Sensitivity to Changes in Assumed Health Care Cost Trend Rates



	Year Ended December 31, 2014
(in millions)	Duke Energy			Duke Energy Carolinas			Progress Energy			Duke Energy Progress			Duke Energy Florida			Duke Energy Ohio			Duke Energy Indiana
1-Percentage Point Increase
Effect on total service and interest costs	$	2		$	1		$	1		$	—		$	1		$	—		$	—
Effect on post-retirement benefit obligation	36			9			15			8			7			2			4
1-Percentage Point Decrease
Effect on total service and interest costs	(2		)	(1		)	(1		)	—			(1		)	—			—
Effect on post-retirement benefit obligation	(31		)	(8		)	(13		)	(7		)	(6		)	(1		)	(3		)

Expected Benefit Payments



(in millions)	Duke Energy		Duke Energy Carolinas		Progress Energy		Duke Energy Progress		Duke Energy Florida		Duke Energy Ohio		Duke Energy Indiana
Years ending December 31,
2015	$	77	$	17	$	30	$	16	$	14	$	4	$	10
2016	77		18		30		16		14		4		10
2017	76		18		29		15		14		3		9
2018	74		19		29		15		14		3		9
2019	73		19		29		15		13		3		8
2020 - 2024	332		84		132		70		61		15		35

PLAN ASSETS

Description and Allocations

Duke Energy Master Retirement Trust

Assets for both the qualified pension and other post-retirement benefits are maintained in the Duke Energy Master Retirement Trust. Approximately 98 percent of the Duke Energy Master Retirement Trust assets were allocated to qualified pension plans and approximately 2 percent were allocated to other post-retirement plans, as of December 31, 2014 and 2013. The investment objective of the Duke Energy Master Retirement 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. Equity securities are held for their higher expected return. Debt securities are primarily held to hedge qualified pension plan liability. Hedge funds, real estate and other global securities 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.

In 2013, Duke Energy adopted a de-risking investment strategy for the Duke Energy Master Retirement Trust. As the funded status of the qualified pension plans increases, the targeted allocation to return seeking assets will be reduced and the targeted allocation to fixed-income assets will be increased to better manage Duke Energy’s qualified pension liability and reduced funded status volatility. Duke Energy regularly reviews its actual asset allocation and periodically rebalances its investments to the targeted allocation when considered appropriate.

The Duke Energy Retirement Master Trust is authorized to engage in the lending of certain plan assets. Securities lending is an investment management enhancement that utilizes certain existing securities of the Duke Energy Retirement Master Trust to earn additional income. Securities lending involves the loaning of securities to approved parties. In return for the loaned securities, the Duke Energy Retirement Master Trust receives collateral in the form of cash as a safeguard against possible default of any borrower on the return of the loan under terms that permit the Duke Energy Retirement Master Trust to sell the securities. The Master Trust mitigates credit risk associated with securities lending arrangements by monitoring the fair value of the securities loaned, with additional collateral obtained or refunded as necessary. The fair value of securities on loan was approximately $383 million and $43 million at December 31, 2014 and 2013, respectively. Cash obtained as collateral exceeded the fair value of the securities loaned at December 31, 2014 and 2013, respectively. Securities lending income earned by the Master Trust was immaterial for the years ended December 31, 2014, 2013 and 2012, respectively.

Qualified pension and other post-retirement benefits for the Subsidiary Registrants are derived from the Duke Energy Master Retirement 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, 2014 and the actual asset allocations for the Duke Energy Master Retirement Trust.



			Actual Allocation at December 31,
	Target Allocation		2014		2013
U.S. equity securities	10	%	10	%	10	%
Non-U.S. equity securities	8	%	8	%	8	%
Global equity securities	10	%	10	%	10	%
Global private equity securities	3	%	3	%	3	%
Debt securities	63	%	63	%	63	%
Hedge funds	2	%	3	%	3	%
Real estate and cash	2	%	1	%	1	%
Other global securities	2	%	2	%	2	%
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 presents target and actual asset allocations for VEBA I at December 31, 2014.



			Actual Allocation at December 31,
	Target Allocation		2014		2013
U.S. equity securities	30	%	29	%	29	%
Debt securities	45	%	28	%	29	%
Cash	25	%	43	%	42	%
Total	100	%	100	%	100	%

Fair Value Measurements

Duke Energy classifies recurring and non-recurring fair value measurements based on the fair value hierarchy as discussed in Note 16.

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

Investments in equity securities

Investments in equity securities, other than those accounted for as equity and cost method investments, are typically valued at the closing price in the principal active market as of the last business day of the reporting period. 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. Prices have not been adjusted to reflect after-hours market activity. The majority of investments in equity securities are valued using Level 1 measurements. When (i) the Duke Energy Registrants lack the ability to redeem investments valued on a net asset value per share basis in the near future or (ii) net asset value per share is not available at the measurement date, the fair value measurement of the investment is categorized as Level 3.

Investments in debt 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 measurements. If the market for a particular fixed income security is relatively inactive or illiquid, the measurement is Level 3. U.S. Treasury debt is typically Level 2.

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 limited partnerships

Investments in real estate limited partnerships are valued by the trustee at each valuation date (monthly). As part of the trustee’s valuation process, properties are externally appraised generally on an annual basis, conducted by reputable, independent appraisal firms, and signed by appraisers that are members of the Appraisal Institute, with the professional designation MAI. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. There are three valuation techniques that can be used to value investments in real estate assets: the market, income or cost approach. The appropriateness of each valuation technique depends on the type of asset or business being valued. In addition, the trustee may cause additional appraisals to be performed as warranted by specific asset or market conditions. Property valuations and the salient valuation-sensitive assumptions of each direct investment property are reviewed by the trustee quarterly and values are adjusted if there has been a significant change in circumstances related to the investment property since the last valuation. Value adjustments for interim capital expenditures are only recognized to the extent that the valuation process acknowledges a corresponding increase in fair value. An independent firm is hired to review and approve quarterly direct real estate valuations. Key inputs and assumptions used to determine fair value includes among others, rental revenue and expense amounts and related revenue and expense growth rates, terminal capitalization rates and discount rates. Development investments are valued using cost incurred to date as a primary input until substantive progress is achieved in terms of mitigating construction and leasing risk at which point a discounted cash flow approach is more heavily weighted. Key inputs and assumptions in addition to those noted above used to determine the fair value of development investments include construction costs, and the status of construction completion and leasing. Investments in real estate limited partnerships are valued as Level 3.

Duke Energy Master Retirement Trust

The following tables provide the fair value measurement amounts for the Duke Energy Master Retirement Trust qualified pension and other post-retirement assets.



	December 31, 2014
(in millions)	Total Fair Value		Level 1			Level 2		Level 3
Equity securities	$	2,346	$	1,625		$	721	$	—
Corporate debt securities	4,349		—			4,348		1
Short-term investment funds	333		171			162		—
Partnership interests	298		—			—		298
Hedge funds	146		—			146		—
Real estate limited partnerships	104		—			—		104
U.S. government securities	917		—			916		1
Guaranteed investment contracts	32		—			—		32
Governments bonds - foreign	44		—			44		—
Cash	30		30			—		—
Government and commercial mortgage backed securities	9		—			9		—
Net pending transactions and other investments	10		(10		)	20		—
Total assets^(a)	$	8,618	$	1,816		$	6,366	$	436

(a)

Duke Energy Carolinas, Progress Energy, Duke Energy Progress, Duke Energy Florida, Duke Energy Ohio and Duke Energy Indiana were allocated approximately 28 percent, 31 percent, 15 percent, 16 percent, 5 percent and 8 percent, respectively, of the Duke Energy Master Retirement Trust assets at December 31, 2014. Accordingly, all Level 1, 2 and 3 amounts included in the table above are allocable to the Subsidiary Registrants using these percentages.



	December 31, 2013
(in millions)	Total Fair Value		Level 1		Level 2		Level 3
Equity securities	$	2,877	$	1,801	$	1,022	$	54
Corporate debt securities	2,604		—		2,601		3
Short-term investment funds	1,158		254		904		—
Partnership interests	307		—		—		307
Hedge funds	164		—		111		53
Real estate limited partnerships	95		—		—		95
U.S. government securities	927		—		927		—
Guarantees investment contracts	33		—		—		33
Governments bonds - foreign	19		—		18		1
Cash	58		58		—		—
Asset backed securities	7		—		7		—
Net pending transactions and other investments	12		7		5		—
Total assets^(a)	$	8,261	$	2,120	$	5,595	$	546

(a)

Duke Energy Carolinas, Progress Energy, Duke Energy Progress, Duke Energy Florida, Duke Energy Ohio and Duke Energy Indiana were allocated approximately 28 percent, 35 percent, 16 percent, 16 percent, 5 percent and 8 percent, respectively, of the Duke Energy Master Retirement Trust assets at December 31, 2013. Accordingly, all Level 1, 2 and 3 amounts included in the table above are allocable to the Subsidiary Registrants using these percentages.

The following table provides a reconciliation of beginning and ending balances of assets of master trusts measured at fair value on a recurring basis where the determination of fair value includes significant unobservable inputs (Level 3).



(in millions)	2014			2013
Balance at January 1	$	546		$	352
Combination of trust assets^(a)	—			288
Purchases, sales, issuances and settlements
Purchases	17			25
Sales	(164		)	(152		)
Total gains (losses) and other, net	37			33
Balance at December 31	$	436		$	546


(a)	As of January 1, 2013, assets previously held in the Progress Energy Master Retirement Trust were transferred into the Duke Energy Master Retirement Trust.

VEBA I

The following tables provide the fair value measurement amounts for VEBA I other post-retirement assets.



	December 31, 2014
(in millions)	Total Fair Value		Level 1	Level 2		Level 3
Cash and cash equivalents	$	21	—	$	21	—
Equity securities	14		—	14		—
Debt securities	13		—	13		—
Total assets	$	48	—	$	48	—



	December 31, 2013
(in millions)	Total Fair Value		Level 1	Level 2		Level 3
Cash and cash equivalents	$	21	—	$	21	—
Equity securities	15		—	15		—
Debt securities	15		—	15		—
Total assets	$	51	—	$	51	—

EMPLOYEE SAVINGS PLANS

Duke Energy sponsors, 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 percent of employee before-tax and Roth 401(k) contributions, and, as applicable, after-tax contributions, of up to 6 percent 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.

As of January 1, 2014, for new and rehired non-union and certain unionized employees who are not eligible to participate in Duke Energy’s defined benefit plans, an additional employer contribution of 4 percent of eligible pay per pay period, which is subject to a three-year vesting schedule, is provided to the employee’s savings plan account.

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



(in millions)	Duke Energy		Duke Energy Carolinas		Progress Energy		Duke Energy Progress		Duke Energy Florida		Duke Energy Ohio		Duke Energy Indiana
Years ended December 31,
2014^(a)	$	143	$	47	$	43	$	30	$	14	$	3	$	7
2013	134		45		45		25		14		3		7
2012	107		37		45		24		15		4		6


(a)	For 2014, amounts include the additional employer contribution of 4 percent of eligible pay per pay period for employees not eligible to participate in a defined benefit plan.