DUKE ENERGY CORPORATION

SCHEDULE I—CONDENSED PARENT COMPANY FINANCIAL STATEMENTS

CONDENSED STATEMENTS OF OPERATIONS

(In millions, except per-share amounts)


	Years Ended December 31,
	2011			2010			2009

Operating Revenues	$	—		$	—		$	—

Operating Expenses		6			52			1

Operating Loss		(6	)		(52	)		(1	)
Equity in Earnings of Subsidiaries		1,782			1,384			1,095
Other Income and Expenses, net		21			6			9
Interest Expense		156			139			99

Income Before Income Taxes		1,641			1,199			1,004
Income Tax Benefit		(64	)		(118	)		(59	)

Income From Continuing Operations		1,705			1,317			1,063
Income From Discontinued Operations, net of tax		1			3			12



Net Income	$	1,706		$	1,320		$	1,075


Common Stock Data
Earnings per share (from continuing operations)
Basic	$	1.28		$	1.00		$	0.82
Diluted	$	1.28		$	1.00		$	0.82
Earnings (loss) per share (from discontinued operations)
Basic	$	—		$	—		$	0.01
Diluted	$	—		$	—		$	0.01
Earnings per share
Basic	$	1.28		$	1.00		$	0.83
Diluted	$	1.28		$	1.00		$	0.83
Dividends declared per share	$	0.99		$	0.97		$	0.94
Weighted-average shares outstanding
Basic		1,332			1,318			1,293
Diluted		1,333			1,319			1,294

DUKE ENERGY CORPORATION

SCHEDULE I - CONDENSED PARENT COMPANY FINANCIAL STATEMENTS

BALANCE SHEETS

(In millions, except per-share amounts)


	December 31,
	2011			2010
ASSETS
Current Assets
Cash and cash equivalents	$	845		$	488
Receivables		653			913
Other		100			34

Total current assets		1,598			1,435

Investments and Other Assets
Notes receivable		450			450
Investment in consolidated subsidiaries		25,670			24,410
Other		571			525

Total investments and other assets		26,691			25,385

Total Assets	$	28,289		$	26,820


LIABILITIES AND EQUITY
Current Liabilities
Accounts payable	$	—		$	138
Notes payable and commercial paper		154			—
Taxes accrued		35			39
Other		65			58

Total current liabilities		254			235

Long-term Debt		4,328			3,222

Other Long-Term Liabilities
Deferred income taxes		16			—
Other		919			841

Total other long-term liabilities		935			841

Commitments and Contingencies
Common Stockholders' Equity
Common Stock, $0.001 par value, 2 billion shares authorized; 1,336 million and 1,329 million shares outstanding at December 31, 2011 and December 31, 2010, respectively		1			1
Additional paid-in capital		21,132			21,023
Retained earnings		1,873			1,496
Accumulated other comprehensive loss		(234	)		2

Total common stockholders' equity		22,772			22,522

Total Liabilities and Common Stockholders' Equity	$	28,289		$	26,820

DUKE ENERGY CORPORATION

SCHEDULE I - CONDENSED PARENT COMPANY FINANCIAL STATEMENTS

CONDENSED STATEMENTS OF CASH FLOWS

(In millions)


	Years Ended December 31,
	2011			2010			2009

CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	1,706		$	1,320		$	1,075
Adjustments to reconcile net income to net cash provided by operating activities		(1,993	)		(1,142	)		(1,002	)

Net cash (used in) provided by operating activities		(287	)		178			73


CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of available-for-sale securities		(45	)		—			—
Proceeds from sales and maturities of available-for-sale securities		105			36			17
Distributions from wholly-owned subsidiaries		299			350			—
Investment in wholly-owned subsidiary		—			—			(250	)
Notes receivable from affiliate, net		264			263			(272	)
Other		14			6			9

Net cash provided by (used in) investing activities		637			655			(496	)


CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the:
Issuance of long-term debt		996			522			1,740
Issuance of common stock related to employee benefit plans		67			302			519
Payments for the redemption of long-term debt		—			(274	)		—
Notes payable and commercial paper		151			(2	)		(269	)
Notes Payable due to affiliate		105			—			—
Dividends paid		(1,329	)		(1,284	)		(1,222	)
Other		17			26			15

Net cash provided by (used in) financing activities		7			(710	)		783

Net increase in cash and cash equivalents		357			123			360
Cash and cash equivalents at beginning of period		488			365			5

Cash and cash equivalents at end of period	$	845		$	488		$	365

1. Basis of Presentation

Duke Energy Corporation (Duke Energy) is a holding company that conducts substantially all of its business operations through its subsidiaries. As specified in the merger conditions issued by various state commissions in connection with Duke Energy's merger with Cinergy Corp. (Cinergy) in April 2006, there are restrictions on Duke Energy's ability to obtain funds from certain of its subsidiaries through dividends, loans or advances. For further information, see Note 4 to the Consolidated Financial Statements, "Regulatory Matters." Accordingly, these condensed financial statements have been prepared on a parent-only basis. Under this parent-only presentation, Duke Energy's investments in its consolidated subsidiaries are presented under the equity method of accounting. In accordance with Rule 12-04 of Regulation S-X, these parent-only financial statements do not include all of the information and footnotes required by Generally Accepted Accounting Principles (GAAP) in the United States (U.S.) for annual financial statements. Because these parent-only financial statements and notes do not include all of the information and footnotes required by GAAP in the U.S. for annual financial statements, these parent-only financial statements and other information included should be read in conjunction with Duke Energy's audited Consolidated Financial Statements contained within Part II, Item 8 of this Form 10-K for the year ended December 31, 2011.

Duke Energy and its subsidiaries file a consolidated federal income tax return and other state and foreign jurisdictional returns as required. The taxable income of Duke Energy's wholly-owned operating subsidiaries is reflected in Duke Energy's U.S. federal and state income tax returns. Duke Energy has a tax sharing agreement with its wholly-owned operating subsidiaries, where the separate return method is used to allocate tax expenses and benefits to the wholly-owned operating subsidiaries whose investments or results of operations provide these tax expenses and benefits. The accounting for income taxes essentially represents the income taxes that Duke Energy's wholly-owned operating subsidiaries would incur if each were a separate company filing its own tax return as a C-Corporation.

2. Debt

Summary of Debt and Related Terms


	Weighted- Average Rate			Year Due	December 31,
	Weighted- Average Rate			Year Due	2011			2010
					(in millions)
Unsecured debt^(a)		4.3	%	2013 – 2021	$	3,878		$	2,772
Notes Payable and commercial paper^(b)		0.5	%			604			450

Total debt						4,482			3,222
Short-term notes payable and commercial paper						(154	)		—

Total long-term debt					$	4,328		$	3,222

(a)	As of December 31, 2011, this amount includes an intercompany loan of $105 million with Duke Energy's affiliate, Bison Insurance Company Limited.

(b)

Includes $450 million at December 31, 2011 and 2010 that was classified as Long-term Debt on the Consolidated Balance Sheets due to the existence of long-term credit facilities which back-stop these commercial paper balances, along with Duke Energy's ability and intent to refinance these balances on a long-term basis. The weighted-average days to maturity was 17 days and 14 days as of December 31, 2011 and 2010, respectively.

At December 31, 2011, Duke Energy has guaranteed approximately $2.0 billion of debt issued by Duke Energy Carolinas, LLC, one of Duke Energy's wholly-owned operating subsidiaries.

In November 2011, Duke Energy issued $500 million of senior notes, which carry a fixed interest rate of 2.15% and mature November 15, 2016. Proceeds from the issuance will be used to fund capital expenditures in Duke Energy's unregulated businesses in the U.S. and for general corporate purposes.

In August 2011, Duke Energy issued $500 million principal amount of senior notes, which carry a fixed interest rate of 3.55% and mature September 15, 2021. Proceeds from the issuance will be used to repay a portion of Duke Energy's commercial paper as it matures, to fund capital expenditures in Duke Energy's unregulated businesses in the U.S. and for general corporate purposes.

In April 2011, Duke Energy filed a registration statement (Form S-3) with the SEC to sell up to $1 billion of variable denomination floating rate demand notes, called PremierNotes. The Form S-3 states that no more than $500 million of the notes will be outstanding at any particular time. The notes are offered on a continuous basis and bear interest at a floating rate per annum determined by the Duke Energy PremierNotes Committee, or its designee, on a weekly basis. The interest rate payable on notes held by an investor may vary based on the principal amount of the investment. The notes have no stated maturity date, but may be redeemed in whole or in part by Duke Energy at any time. The notes are non-transferable and may be redeemed in whole or in part at the investor's option. Proceeds from the sale of the notes will be used for general corporate purposes. The balance as of December 31, 2011 is $79 million. The notes reflect a short-term debt obligation of Duke Energy and are reflected as Notes payable on Duke Energy's Condensed Consolidated Balance Sheets.

Duke Energy also issued an additional $75 million in Commercial Paper in the third quarter of 2011, for general corporate purposes, which is classified as Notes payable and commercial paper on Duke Energy's Condensed Consolidated Balance Sheets.

In November 2011, Duke Energy entered into a new $6 billion, five-year master credit facility, with $4 billion available at closing and the remaining $2 billion available following successful completion of the proposed merger with Progress Energy. The Duke Energy Registrants each have borrowing capacity under the master credit facility up to specified sublimits for each borrower. However, Duke Energy has the unilateral ability at any time to increase or decrease the borrowing sublimits of each borrower, subject to a maximum sublimit for each borrower. As of December 31, 2011, Duke Energy has a borrowing sublimit of $1,250 million. The amount available under the master credit facility has been reduced, by the use of the master credit facility to backstop the issuances of commercial paper, letters of credit and certain tax-exempt bonds.

In March 2010, Duke Energy issued $450 million principal amount of 3.35% senior notes due April 1, 2015. Proceeds from the issuance were used to repay $274 million of borrowings under the master credit facility and for general corporate purposes.

Annual Maturities as of December 31, 2011


	(in millions)
2012	$	—
2013		249
2014		1,325
2015		450
2016		950
Thereafter		1,354

Total long-term debt, including current maturities	$	4,328

3. Commitments and Contingencies

Duke Energy and its subsidiaries are a party to litigation, environmental and other matters. For further information, see Note 5 to the Consolidated Financial Statements, "Commitments and Contingencies."

Duke Energy has various financial and performance guarantees and indemnifications which are issued in the normal course of business. These contracts include performance guarantees, stand-by letters of credit, debt guarantees, surety bonds and indemnifications. Duke Energy enters into these arrangements to facilitate commercial transactions with third parties by enhancing the value of the transaction to the third party. The maximum potential amount of future payments Duke Energy could have been required to make under these guarantees as of December 31, 2011 was approximately $4.7 billion. Of this amount, substantially all relates to guarantees of wholly-owned consolidated entities, including debt issued by Duke Energy Carolinas discussed above, and less than wholly-owned consolidated entities. The majority of these guarantees expire at various times between 2012 and 2036, with the remaining performance guarantees having no contractual expiration. See Note 7 to the Consolidated Financial Statements, "Guarantees and Indemnifications," for further discussion of guarantees issued on behalf of unconsolidated affiliates and third parties.

4. Related Party Transactions

Balances due to or due from related parties included in the Balance Sheets as of December 31, 2011 and 2010 are as follows:


	December 31,
Assets (Liabilities)	2011			2010
	(in millions)
Current assets due from affiliated companies^(a)(b)	$	38		$	39
Current liabilities due to affiliated companies^(c)	$	—		$	(135	)
Non-current liabilities due to affiliated companies^(d)	$	(871	)	$	(766	)

(a)	Balance excludes assets or liabilities associated with money pool arrangements, which are discussed below.

(b)	The balances at December 31, 2011 and 2010 are classified as Receivables on the Balance Sheets.

(c)	The balance at December 31, 2010 is classified as Accounts Payable on the Balance Sheets.

(d)	Of the balance at December 31, 2011, $766 million is classified as Other within Other Long-Term Liabilities and $105 million is classified as Long-term Debt on the Balance Sheets. The balance at December 31, 2010 is classified as Other within Other Long-Term Liabilities on the Balance Sheets.

Duke Energy provides support to certain subsidiaries for their short-term borrowing needs through participation in a money pool arrangement. Under this arrangement, certain subsidiaries with short-term funds may provide short-term loans to affiliates participating under this arrangement. Additionally, Duke Energy provides loans to subsidiaries through the money pool, but is not permitted to borrow funds through the money pool arrangement. Duke Energy had money pool-related receivables of $450 million classified as Notes Receivable on the Balance Sheets as of both December 31, 2011 and 2010.

As of December 31, 2011 and 2010, Duke Energy had an intercompany loan outstanding with Cinergy of $608 million and $872 million, respectively, which is classified within Receivables on the Balance Sheets. The $264 million decrease in the intercompany loan during 2011 and the $263 million decrease during 2010 are reflected as Notes Receivable from Affiliates, net within Net Cash Provided by (Used in) Investing Activities on the Condensed Statements of Cash Flows.

In conjunction with the money pool arrangement and the intercompany loan noted above, Duke Energy recorded interest income of approximately $4 million, $7 million and $12 million in 2011, 2010 and 2009, respectively, which is included in Other Income and Expenses, net on the Condensed Statements of Operations.

Duke Energy also provides funding to and sweeps cash from subsidiaries that do not participate in the money pool. For these subsidiaries, the cash is used in or generated from their operations, capital expenditures, debt payments and other activities. Amounts funded or received are carried as open accounts as either, Investments and Advances to Consolidated Subsidiaries or as Other Non-Current Liabilities and do not bear interest. These amounts are included within Net Cash (Used in) Provided by Operating Activities on the Condensed Statements of Cash Flows.

During the year ended December 31, 2011, Duke Energy received an equity distribution of $299 million from Duke Energy Carolinas, which is reflected within Net Cash (Used in) Provided by Operating Activities on the Condensed Statements of Cash Flows. Additionally, Duke Energy received an equity distribution from Duke Energy Carolinas of $350 million in 2010, which is reflected within Net Cash (Used in) Provided by Operating Activities on the Condensed Statements of Cash Flows.

During the year ended December 31, 2011, Duke Energy paid a $15 million advance to Cinergy Corp. for Green Frontier Windpower LLC PTC funding contributions. During the year ended December 31, 2010, Duke Energy forgave a $29 million advance to Cinergy Corp.

During the year ended December 31, 2009, Duke Energy contributed approximately $250 million of capital to its subsidiary, Duke Energy Carolinas.