EMPLOYEE BENEFIT PLANS

DEFINED BENEFIT RETIREMENT PLANS

Duke Energy maintains, and the Subsidiary Registrants participate in, qualified and non-qualified, non-contributory defined benefit retirement plans. 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. Duke Energy did not make any contributions to its U.S. qualified defined benefit pension plans during the six months ended June 30, 2017 and 2016.

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 costs 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 costs for employees of Duke Energy’s shared services affiliate that provides support to the Subsidiary Registrants. These allocated amounts are included in the governance and shared service costs discussed in Note 8. Duke Energy uses a December 31 measurement date for its defined benefit retirement plan assets and obligations.

QUALIFIED PENSION PLANS

The following tables include the components of net periodic pension costs for qualified pension plans.



	Three Months Ended June 30, 2017
				Duke						Duke			Duke			Duke			Duke
	Duke			Energy			Progress			Energy			Energy			Energy			Energy
(in millions)	Energy			Carolinas			Energy			Progress			Florida			Ohio			Indiana			Piedmont
Service cost	$	40		$	12		$	12		$	6		$	5		$	1		$	2		$	3
Interest cost on projected benefit obligation	82			20			25			12			13			5			7			3
Expected return on plan assets	(136		)	(36		)	(43		)	(21		)	(21		)	(7		)	(11		)	(6		)
Amortization of actuarial loss	36			8			14			6			7			1			3			3
Amortization of prior service credit	(6		)	(2		)	(1		)	—			—			—			—			(1		)
Other	2			—			1			1			—			—			—			1
Net periodic pension costs	$	18		$	2		$	8		$	4		$	4		$	—		$	1		$	3



	Three Months Ended June 30, 2016
				Duke						Duke			Duke			Duke			Duke
	Duke			Energy			Progress			Energy			Energy			Energy			Energy
(in millions)	Energy			Carolinas			Energy			Progress			Florida			Ohio			Indiana			Piedmont
Service cost	$	37		$	12		$	10		$	6		$	5		$	1		$	2		$	2
Interest cost on projected benefit obligation	83			22			27			13			14			5			7			3
Expected return on plan assets	(129		)	(36		)	(42		)	(20		)	(21		)	(7		)	(11		)	(6		)
Amortization of actuarial loss	33			8			13			5			7			1			3			2
Amortization of prior service credit	(4		)	(2		)	(1		)	(1		)	—			—			—			(1		)
Other	1			—			—			1			—			—			—			—
Net periodic pension costs	$	21		$	4		$	7		$	4		$	5		$	—		$	1		$	—



	Six Months Ended June 30, 2017
				Duke						Duke			Duke			Duke			Duke
	Duke			Energy			Progress			Energy			Energy			Energy			Energy
(in millions)	Energy			Carolinas			Energy			Progress			Florida			Ohio			Indiana			Piedmont
Service cost	$	80		$	24		$	24		$	12		$	10		$	2		$	4		$	6
Interest cost on projected benefit obligation	164			40			50			24			26			10			14			6
Expected return on plan assets	(272		)	(71		)	(86		)	(42		)	(42		)	(14		)	(22		)	(12		)
Amortization of actuarial loss	72			16			28			12			14			2			6			6
Amortization of prior service credit	(12		)	(4		)	(2		)	—			—			—			—			(2		)
Other	4			—			2			1			—			—			—			1
Net periodic pension costs	$	36		$	5		$	16		$	7		$	8		$	—		$	2		$	5



	Six Months Ended June 30, 2016
				Duke						Duke			Duke			Duke			Duke
	Duke			Energy			Progress			Energy			Energy			Energy			Energy
(in millions)	Energy			Carolinas			Energy			Progress			Florida			Ohio			Indiana			Piedmont
Service cost	$	73		$	24		$	21		$	12		$	10		$	2		$	4		$	5
Interest cost on projected benefit obligation	166			43			53			25			28			10			14			5
Expected return on plan assets	(258		)	(71		)	(84		)	(41		)	(42		)	(14		)	(21		)	(12		)
Amortization of actuarial loss	66			16			27			11			14			2			6			4
Amortization of prior service credit	(8		)	(4		)	(2		)	(1		)	—			—			—			(1		)
Other	4			1			1			1			—			—			—			—
Net periodic pension costs	$	43		$	9		$	16		$	7		$	10		$	—		$	3		$	1

NON-QUALIFIED PENSION PLANS

The following tables include the components of net periodic pension costs for non-qualified pension plans for registrants with non-qualified pension costs.



	Three Months Ended June 30, 2017
			Duke				Duke		Duke
	Duke		Energy		Progress		Energy		Energy
(in millions)	Energy		Carolinas		Energy		Progress		Florida
Service cost	$	—	$	—	$	—	$	—	$	—
Interest cost on projected benefit obligation	3		1		1		—		—
Amortization of actuarial loss	2		—		1		—		—
Net periodic pension costs	$	5	$	1	$	2	$	—	$	—



	Three Months Ended June 30, 2016
			Duke				Duke		Duke
	Duke		Energy		Progress		Energy		Energy
(in millions)	Energy		Carolinas		Energy		Progress		Florida
Service cost	$	1	$	—	$	—	$	—	$	—
Interest cost on projected benefit obligation	3		1		1		1		1
Amortization of actuarial loss	2		—		—		—		—
Net periodic pension costs	$	6	$	1	$	1	$	1	$	1



	Six Months Ended June 30, 2017
			Duke				Duke		Duke
	Duke		Energy		Progress		Energy		Energy
(in millions)	Energy		Carolinas		Energy		Progress		Florida
Service cost	$	—	$	—	$	—	$	—	$	—
Interest cost on projected benefit obligation	6		1		2		1		1
Amortization of actuarial loss	4		—		2		—		—
Net periodic pension costs	$	10	$	1	$	4	$	1	$	1



	Six Months Ended June 30, 2016
			Duke				Duke		Duke
	Duke		Energy		Progress		Energy		Energy
(in millions)	Energy		Carolinas		Energy		Progress		Florida
Service cost	$	1	$	—	$	—	$	—	$	—
Interest cost on projected benefit obligation	7		1		2		1		1
Amortization of actuarial loss	4		—		1		—		—
Net periodic pension costs	$	12	$	1	$	3	$	1	$	1

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.

The following tables include the components of net periodic other post-retirement benefit costs.



	Three Months Ended June 30, 2017
				Duke						Duke			Duke			Duke			Duke
	Duke			Energy			Progress			Energy			Energy			Energy			Energy
(in millions)	Energy			Carolinas			Energy			Progress			Florida			Ohio			Indiana		Piedmont
Service cost	$	1		$	—		$	—		$	—		$	—		$	—		$	—	$	—
Interest cost on accumulated post-retirement benefit obligation	9			2			3			2			2			—			—		—
Expected return on plan assets	(4		)	(2		)	—			—			—			—			—		—
Amortization of actuarial loss (gain)	2			(1		)	5			3			2			(1		)	—		—
Amortization of prior service credit	(29		)	(2		)	(21		)	(13		)	(7		)	—			—		—
Net periodic other post-retirement benefit costs	$	(21	)	$	(3	)	$	(13	)	$	(8	)	$	(3	)	$	(1	)	$	—	$	—



	Three Months Ended June 30, 2016
				Duke						Duke			Duke			Duke			Duke
	Duke			Energy			Progress			Energy			Energy			Energy			Energy
(in millions)	Energy			Carolinas			Energy			Progress			Florida			Ohio			Indiana			Piedmont
Service cost	$	1		$	—		$	—		$	—		$	—		$	—		$	—		$	—
Interest cost on accumulated post-retirement benefit obligation	9			2			3			2			1			1			1			—
Expected return on plan assets	(4		)	(2		)	—			—			—			—			(1		)	—
Amortization of actuarial loss (gain)	2			(1		)	6			3			3			(1		)	—			—
Amortization of prior service credit	(36		)	(3		)	(25		)	(17		)	(9		)	—			—			—
Net periodic other post-retirement benefit costs	$	(28	)	$	(4	)	$	(16	)	$	(12	)	$	(5	)	$	—		$	—		$	—



	Six Months Ended June 30, 2017
				Duke						Duke			Duke			Duke			Duke
	Duke			Energy			Progress			Energy			Energy			Energy			Energy
(in millions)	Energy			Carolinas			Energy			Progress			Florida			Ohio			Indiana		Piedmont
Service cost	$	2		$	—		$	—		$	—		$	—		$	—		$	—	$	—
Interest cost on accumulated post-retirement benefit obligation	18			4			7			4			4			—			—		—
Expected return on plan assets	(7		)	(4		)	—			—			—			—			—		—
Amortization of actuarial loss (gain)	4			(2		)	10			6			4			(1		)	—		—
Amortization of prior service credit	(58		)	(4		)	(42		)	(27		)	(15		)	—			—		—
Net periodic other post-retirement benefit costs	$	(41	)	$	(6	)	$	(25	)	$	(17	)	$	(7	)	$	(1	)	$	—	$	—



	Six Months Ended June 30, 2016
				Duke						Duke			Duke			Duke			Duke
	Duke			Energy			Progress			Energy			Energy			Energy			Energy
(in millions)	Energy			Carolinas			Energy			Progress			Florida			Ohio			Indiana			Piedmont
Service cost	$	2		$	—		$	—		$	—		$	—		$	—		$	—		$	—
Interest cost on accumulated post-retirement benefit obligation	17			4			7			4			3			1			2			1
Expected return on plan assets	(7		)	(4		)	—			—			—			—			(1		)	(1		)
Amortization of actuarial loss (gain)	3			(2		)	11			6			5			(1		)	(1		)	—
Amortization of prior service credit	(71		)	(6		)	(51		)	(34		)	(18		)	—			—			—
Net periodic other post-retirement benefit costs	$	(56	)	$	(8	)	$	(33	)	$	(24	)	$	(10	)	$	—		$	—		$	—

DEFINED CONTRIBUTION RETIREMENT PLANS

EMPLOYEE SAVINGS PLANS

Duke Energy sponsors, and the Subsidiary Registrants participate in, employee savings plans that cover substantially all U.S. employees. The following table presents employer contributions made by Duke Energy and expensed by the Subsidiary Registrants.



			Duke				Duke		Duke		Duke		Duke
	Duke		Energy		Progress		Energy		Energy		Energy		Energy
(in millions)	Energy		Carolinas		Energy		Progress		Florida		Ohio		Indiana		Piedmont
Three Months Ended June 30,
2017	$	39	$	13	$	12	$	8	$	4	$	1	$	2	$	1
2016	39		13		12		8		4		1		2		1
Six Months Ended June 30,
2017	$	104	$	35	$	30	$	21	$	9	$	2	$	5	$	3
2016	91		31		27		19		8		2		4		3

MONEY PURCHASE PENSION PLAN

Duke Energy provides, and Piedmont participates in, the Money Purchase Pension (MPP) plan, which is a defined contribution pension plan that allows certain employees to direct investments and assume risk of investment returns. In January 2017, a $2 million contribution was made to the MPP plan.