Related Party Transactions

6 Months Ended

Jun. 30, 2012

Duke Energy Carolinas [Member]

17. Related Party Transactions

The Subsidiary Registrants engage in related party transactions, which are generally performed at cost and in accordance with the applicable state and federal commission regulations. Balances due to or due from related parties included in the Condensed Consolidated Balance Sheets and amounts related to transactions with related parties included in the Condensed Consolidated Statements of Operations and Comprehensive Income and presented in the following tables.

Duke Energy Carolinas

	Balances due to and due from related parties included on the Condensed Consolidated Balance Sheets, which exclude
assets or liabilities associated with accrued pension and other post-retirement benefits and money pool arrangements, are
presented in the following table:

(in millions)		June 30, 2012		December 31, 2011
Current assets
	Receivables	$	―	$	2
	Other	$	95	$	95
Non-current assets
	Other	$	111	$	111
Current liabilities
	Accounts payable	$	(97)	$	(157)
	Taxes Accrued	$	(10)	$	(14)
Non-current liabilities
	Deferred income taxes	$	(4,891)	$	(4,555)
	Other	$	(64)	$	(64)

	As discussed further in Note ##EBO, Duke Energy Carolinas participates in Duke Energy's qualified pension, non-qualified pension
and other post-retirement benefit plans and is allocated its proportionate share of expenses associated with these plans. Additionally, Duke Energy Carolinas has been allocated accrued pension and other post-retirement benefit obligations as shown in the following table:

(in millions)		June 30, 2012		December 31, 2011
Other current liabilities		$	8	$	8
Accrued pension and other post-retirement benefit obligations			232		248
Total allocated accrued pension and other post-retirement benefit obligations		$	240	$	256

	Amounts related to transactions with related parties included in the Condensed Consolidated Statements of Operations
and Comprehensive Income are presented in the following table:

		Three Months Ended				Six Months Ended
(in millions)		June 30, 2012		June 30, 2011		June 30, 2012		June 30, 2011
Corporate governance and shared service expenses^(a)		$	254	$	251	$	489	$	504
Indemnification coverages^(b)		$	6	$	5	$	11	$	10
Rental income and other charged expenses, net^(c)		$	(5)	$	(2)	$	(7)	$	(4)
Interest expense on money pool^(d)		$	1	$	―	$	1	$	―

(a)	Duke Energy Carolinas is charged its proportionate share of corporate governance and other costs by an unconsolidated affiliate that is a consolidated affiliate of Duke Energy. Corporate governance and other shared services costs are primarily related to human resources, employee benefits, legal and accounting fees, as well as other third party costs. These amounts are recorded in Operation, Maintenance and Other within Operating Expenses on the Condensed Consolidated Statements of Operations and Comprehensive Income.
(b)	Duke Energy Carolinas incurs expenses related to certain indemnification coverages through Bison, Duke Energy’s wholly owned captive insurance subsidiary. These expenses are recorded in Operation, Maintenance and Other within Operating Expenses on the Condensed Consolidated Statements of Operations and Comprehensive Income.
(c)	Duke Energy Carolinas records income associated with the rental of office space to a consolidated affiliate of Duke Energy, as well as its proportionate share of certain charged expenses from affiliates of Duke Energy.
(d)	Recorded in Interest Expense on the Condensed Consolidated Statements of Operations and Comprehensive Income. See Note ##DCF for additional information related to money pool.

Duke Energy Ohio [Member]

Related Party Transactions

17. Related Party Transactions

Duke Energy Ohio

	Balances due to and due from related parties included in the Condensed Consolidated Balance Sheets, which exclude
assets or liabilities associated with accrued pension and other post-retirement benefits, CRC and money pool arrangements, are presented in the following table:

(in millions)		June 30, 2012		December 31, 2011
Current assets
	Receivables	$	7	$	15
	Other	$	98	$	76
Non-current assets
	Other	$	28	$	22
Current liabilities
	Accounts payable	$	(73)	$	(84)
	Taxes Accrued	$	(4)	$	―
Non-current liabilities
	Deferred income taxes	$	(1,882)	$	(1,798)
	Other	$	(34)	$	―

	As discussed further in Note ##EBO, Duke Energy Ohio participates in Duke Energy’s qualified pension, non-qualified
pension and other post-retirement benefit plans and is allocated its proportionate share of expenses associated with these plans. Additionally, Duke Energy Ohio has been allocated accrued pension and other post-retirement benefit obligations as shown in the following table:

(in millions)		June 30, 2012		December 31, 2011
Other current liabilities		$	4	$	4
Accrued pension and other post-retirement benefit obligations			160		166
Total allocated accrued pension and other post-retirement benefit obligations		$	164	$	170

	Amounts related to transactions with related parties included in the Condensed Consolidated Statements of Operations and
Comprehensive Income are presented in the following table:

		Three Months Ended
(in millions)		June 30, 2012		June 30, 2011
Corporate governance and shared service expenses^(a)		$	90	$	95
Indemnification coverages^(b)		$	4	$	4
Rental income and other charged expenses, net^(c)		$	(1)	$	―
Interest expense on money pool^(d)		$	―	$	―
Interest income on money pool^(e)		$	―	$	―
CRC interest income^(f)		$	2	$	4

(a)	Duke Energy Ohio is charged its proportionate share of corporate governance and other costs by an unconsolidated affiliate that is a consolidated affiliate of Duke Energy. Corporate governance and other shared services costs are primarily related to human resources, employee benefits, legal and accounting fees, as well as other third party costs. These amounts are recorded in Operation, Maintenance and Other within Operating Expenses on the Condensed Consolidated Statements of Operations and Comprehensive Income.
(b)	Duke Energy Ohio incurs expenses related to certain indemnification coverages through Bison, Duke Energy’s wholly-owned captive insurance subsidiary. These expenses are recorded in Operation, Maintenance and Other within Operating Expenses on the Condensed Consolidated Statements of Operations and Comprehensive Income.
(c)	Duke Energy Ohio records income associated with the rental of office space to a consolidated affiliate of Duke Energy, as well as its proportionate share of certain charged expenses from affiliates of Duke Energy.
(d)	Recorded in Interest Expense on the Condensed Consolidated Statements of Operations and Comprehensive Income. See Note ##DCF for additional information related to money pool.
(e)	Recorded in Other Income and Expenses, net on the Condensed Consolidated Statements of Operations and Comprehensive Income. See Note ##DCF for additional information related to money pool.
(f)	As discussed in Note ##VIE, certain trade receivables have been sold by Duke Energy Ohio to CRC, an unconsolidated entity formed by a subsidiary of Duke Energy. The proceeds obtained from the sales of receivables are largely cash but do include a subordinated note from CRC for a portion of the purchase price. The interest income associated with the subordinated note is recorded in Other Income and Expenses, net on the Condensed Consolidated Statements of Operations and Comprehensive Income.

	Amounts related to transactions with related parties included in the Condensed Consolidated Statements of Operations and
Comprehensive Income are presented in the following table:

		Three Months Ended				Six Months Ended
(in millions)		June 30, 2012		June 30, 2011		June 30, 2012		June 30, 2011
Corporate governance and shared service expenses^(a)		$	86	$	91	$	176	$	186
Indemnification coverages^(b)		$	3	$	4	$	7	$	8
Rental income and other charged expenses, net^(c)		$	―	$	―	$	(1)	$	―
CRC interest income^(d)		$	1	$	3	$	3	$	7

(a)	Duke Energy Ohio is charged its proportionate share of corporate governance and other costs by an unconsolidated affiliate that is a consolidated affiliate of Duke Energy. Corporate governance and other shared services costs are primarily related to human resources, employee benefits, legal and accounting fees, as well as other third party costs. These amounts are recorded in Operation, Maintenance and Other within Operating Expenses on the Condensed Consolidated Statements of Operations and Comprehensive Income.
(b)	Duke Energy Ohio incurs expenses related to certain indemnification coverages through Bison, Duke Energy’s wholly owned captive insurance subsidiary. These expenses are recorded in Operation, Maintenance and Other within Operating Expenses on the Condensed Consolidated Statements of Operations and Comprehensive Income.
(c)	Duke Energy Ohio records income associated with the rental of office space to a consolidated affiliate of Duke Energy, as well as its proportionate share of certain charged expenses from affiliates of Duke Energy.
(d)	As discussed in Note ##VIE, certain trade receivables have been sold by Duke Energy Ohio to CRC, an unconsolidated entity formed by a subsidiary of Duke Energy. The proceeds obtained from the sales of receivables are largely cash but do include a subordinated note from CRC for a portion of the purchase price. The interest income associated with the subordinated note is recorded in Other Income and Expenses, net on the Condensed Consolidated Statements of Operations and Comprehensive Income.

DECAM is a non-regulated, direct subsidiary of Duke Energy Ohio. DECAM conducts business activities including the execution of commodity transactions and executing third party vendor and supply contracts as well as service contracts for certain of Duke Energy's non-regulated entities. The commodity contracts that DECAM enters either do not qualify as hedges or have not been designated as hedges (hereinafter referred to as undersigned contracts), thus the mark-to-market impacts of these contracts are reflected in Duke Energy Ohio's Condensed Consolidated Statements of Comprehensive Income. In addition, equal and offsetting mark-to-market impacts of intercompany contracts with non regulated entities are reflected in Duke Energy Ohio's Condensed Consolidated Statements of Comprehensive Income representing the pass through of the economics of the original contracts to non-regulated entities in accordance with contractual arrangements between Duke Energy Ohio and non-regulated entities. See Note 8 for additional information. Because it is not a rated entity, DECAM receives its credit support from Duke Energy or its non-regulated subsidiaries and not the regulated utility operations of Duke Energy Ohio. DECAM meets its funding needs through an intercompany loan agreement from a subsidiary of Duke Energy. The intercompany loan agreement was executed in February 2011. An additional intercompany loan agreement was executed in October 2011 so that DECAM can also loan money to the subsidiary of Duke Energy. DECAM had no outstanding intercompany loan payable with the subsidiary of Duke Energy as of June 30, 2012 or December 31, 2011. DECAM had a $350 million and a $90 million intercompany loan receivable with the subsidiary of Duke Energy as of June 30, 2012 and December 31, 2011, respectively.

Duke Energy Ohio paid a $285 million dividend to its parent, Cinergy, in March 2011. In January 2012, Duke Energy Ohio recorded a non-cash equity transfer of $28 million related to the sale of Vermillion to Duke Energy Indiana. See Note 2 for further discussion.

Duke Energy Indiana [Member]

Related Party Transactions

17. Related Party Transactions

Duke Energy Indiana

	Balances due to and due from related parties included in the Condensed Consolidated Balance Sheets, which exclude assets or
liabilities associated with accrued pension and other post-retirement benefits, CRC and money pool arrangements, are presented in the following table.

(in millions)		June 30, 2012		December 31, 2011
Current assets
	Receivables	$	16	$	18
	Other	$	7	$	13
Non-current assets
	Other	$	2	$	2
Current liabilities
	Accounts payable	$	(38)	$	(72)
	Taxes accrued	$	―	$	(25)
	Other	$	(8)	$	―
Non-current liabilities
	Deferred income taxes	$	(835)	$	(927)
	Other	$	(22)	$	(22)

	As discussed further in Note ##EBO, Duke Energy Indiana participates in Duke Energy’s qualified pension, non-qualified pension
and other post-retirement benefit plans and is allocated its proportionate share of expenses associated with these plans. Additionally, Duke Energy Indiana has been allocated accrued pension and other post-retirement benefit obligations as shown in the following table:

(in millions)		June 30, 2012		December 31, 2011
Other current liabilities		$	2	$	2
Accrued pension and other post-retirement benefit obligations			222		231
Total allocated accrued pension and other post-retirement benefit obligations		$	224	$	233

	Amounts related to transactions with related parties included in the Condensed Consolidated Statements of Operations and
Comprehensive Income are presented in the following table:

		Three Months Ended				Six Months Ended
(in millions)		June 30, 2012		June 30, 2011		June 30, 2012		June 30, 2011
Corporate governance and shared service expenses^(a)		$	98	$	99	$	199	$	206
Indemnification coverages^(b)		$	2	$	2	$	4	$	4
Rental income and other charged expenses, net^(c)		$	―	$	2	$	(1)	$	3
Interest expense on money pool^(d)		$	1	$	―	$	1	$	―
CRC interest income^(e)		$	1	$	3	$	3	$	7

(a)	Duke Energy Indiana is charged its proportionate share of corporate governance and other costs by an unconsolidated affiliate that is a consolidated affiliate of Duke Energy. Corporate governance and other shared services costs are primarily related to human resources, employee benefits, legal and accounting fees, as well as other third party costs. These amounts are recorded in Operation, Maintenance and Other within Operating Expenses on the Condensed Consolidated Statements of Operations and Comprehensive Income.
(b)	Duke Energy Indiana incurs expenses related to certain indemnification coverages through Bison, Duke Energy’s wholly-owned captive insurance subsidiary. These expenses are recorded in Operation, Maintenance and Other within Operating Expenses on the Condensed Consolidated Statements of Operations and Comprehensive Income.
(c)	Duke Energy Indiana records income associated with the rental of office space to a consolidated affiliate of Duke Energy, as well as its proportionate share of certain charged expenses from affiliates of Duke Energy.
(d)	Recorded in Interest Expense on the Condensed Consolidated Statements of Operations and Comprehensive Income. See Note ##DCF for additional information related to money pool.
(e)	As discussed in Note ##VIE, certain trade receivables have been sold by Duke Energy Indiana to CRC, an unconsolidated entity formed by a subsidiary of Duke Energy. The proceeds obtained from the sales of receivables are largely cash but do include a subordinated note from CRC for a portion of the purchase price. The interest income associated with the subordinated note is recorded in Other Income and Expenses, net on the Condensed Consolidated Statements of Operations and Comprehensive Income.

- Definition

The entire disclosure for related party transactions, including the nature of the relationship(s), a description of the transactions, the amount of the transactions, the effects of any change in the method of establishing the terms of the transaction from the previous period, stated interest rate, expiration date, terms and manner of settlement per the agreement with the related party, and amounts due to or from related parties. If the entity and one or more other entities are under common ownership or management control and this control affects the operating results or financial position, disclosure includes the nature of the control relationship even if there are no transactions between the entities. Disclosure may also include the aggregate amount of current and deferred tax expense for each statement of earnings presented where the entity is a member of a group that files a consolidated tax return, the amount of any tax related balances due to or from affiliates as of the date of each statement of financial position presented, the principal provisions of the method by which the consolidated amount of current and deferred tax expense is allocated to the members of the group and the nature and effect of any changes in that method. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

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Reference 3: http://www.xbrl.org/2003/role/presentationRef

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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef

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Reference 8: http://www.xbrl.org/2003/role/presentationRef

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+ Details