Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2013 |
Employee Benefit Plans [Abstract] | ' |
Employee Benefit Plans | ' |
21. 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. As of January 1, 2014, these defined benefit plans are closed to new participants. 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. |
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. |
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(in millions) | Duke Energy | | Duke Energy Carolinas | | Progress Energy | | Duke Energy Progress | | Duke Energy Florida | | Duke Energy Ohio | | Duke Energy Indiana |
Anticipated Contributions: | | | | | | | | | | | | | | | | | | | | |
2014 | $ | 143 | | $ | 42 | | $ | 51 | | $ | 21 | | $ | 21 | | $ | 4 | | $ | 9 |
Contributions Made: | | | | | | | | | | | | | | | | | | | | |
2013 | $ | 250 | | $ | — | | $ | 250 | | $ | 63 | | $ | 133 | | $ | — | | $ | — |
2012 | | 304 | | | — | | | 346 | | | 141 | | | 128 | | | — | | | — |
2011 | | 200 | | | 33 | | | 334 | | | 217 | | | 112 | | | 48 | | | 52 |
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QUALIFIED PENSION PLANS |
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Components of Net Periodic Pension Costs |
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| | 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(a)(b) | $ | 178 | | $ | 37 | | $ | 76 | | $ | 24 | | $ | 44 | | $ | 9 | | $ | 19 |
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| | 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(a)(b) | $ | 117 | | $ | 27 | | $ | 106 | | $ | 33 | | $ | 53 | | $ | 3 | | $ | 9 |
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| | Year Ended December 31, 2011 |
(in millions) | Duke Energy | | Duke Energy Carolinas | | Progress Energy | | Duke Energy Progress | | Duke Energy Florida | | Duke Energy Ohio | | Duke Energy Indiana |
Service cost | $ | 96 | | $ | 37 | | $ | 51 | | $ | 20 | | $ | 24 | | $ | 7 | | $ | 11 |
Interest cost on projected benefit obligation | | 232 | | | 85 | | | 132 | | | 61 | | | 57 | | | 32 | | | 30 |
Expected return on plan assets | | -384 | | | -150 | | | -182 | | | -91 | | | -78 | | | -44 | | | -45 |
Amortization of actuarial loss | | 77 | | | 37 | | | 66 | | | 25 | | | 33 | | | 7 | | | 14 |
Amortization of prior service cost | | 6 | | | 1 | | | 7 | | | 6 | | | ― | | | 1 | | | 2 |
Other | | 18 | | | 7 | | | ― | | | ― | | | ― | | | 2 | | | 2 |
Net periodic pension costs(a)(b) | $ | 45 | | $ | 17 | | $ | 74 | | $ | 21 | | $ | 36 | | $ | 5 | | $ | 14 |
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(a) | Duke Energy amounts exclude $12 million, $14 million and $14 million for the years ended December 2013, 2012, and 2011, respectively, of regulatory asset amortization resulting from purchase accounting adjustments associated with Duke Energy’s merger with Cinergy in April 2006. |
(b) | Duke Energy Ohio amounts exclude $6 million, $6 million and $7 million for the years ended December 2013, 2012, and 2011, respectively, of regulatory asset amortization resulting from purchase accounting adjustments associated with Duke Energy’s merger with Cinergy in April 2006. |
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Amounts Recognized in Accumulated Other Comprehensive Income and Regulatory Assets |
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| | 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 | | $ | ― | | $ | ― | | $ | ― | | $ | ― |
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| | 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 |
Regulatory assets, net increase (decrease) | $ | 976 | | $ | -111 | | $ | -76 | | $ | -89 | | $ | 23 | | $ | 22 | | $ | 17 |
Accumulated other comprehensive (income) loss | | | | | | | | | | | | | | | | | | | | |
Deferred income tax benefit | $ | 14 | | $ | ― | | $ | ― | | $ | ― | | $ | ― | | $ | 15 | | $ | ― |
Reclassification of actuarial losses to an affiliate | | ― | | | ― | | | ― | | | ― | | | ― | | | -48 | | | ― |
Actuarial (gains) losses arising during the year | | -2 | | | ― | | | 3 | | | ― | | | ― | | | ― | | | ― |
Prior year service credit arising during the year | | -7 | | | ― | | | ― | | | ― | | | ― | | | ― | | | ― |
Amortization of prior year actuarial losses | | -13 | | | ― | | | -2 | | | ― | | | ― | | | -3 | | | ― |
Reclassification of actuarial losses to regulatory assets | | -20 | | | ― | | | ― | | | ― | | | ― | | | -1 | | | ― |
Amortization of prior year service cost | | -1 | | | ― | | | -1 | | | ― | | | ― | | | -1 | | | ― |
Net amount recognized in accumulated other comprehensive income | $ | -29 | | $ | ― | | $ | ― | | $ | ― | | $ | ― | | $ | -38 | | $ | ― |
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Reconciliation of Funded Status to Net Amount Recognized |
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| | 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 |
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| | 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 |
Change in Projected Benefit Obligation | | | | | | | | | | | | | | | | | | | | |
Obligation at prior measurement date | $ | 4,880 | | $ | 1,831 | | $ | 2,729 | | $ | 1,263 | | $ | 1,179 | | $ | 627 | | $ | 613 |
Obligation assumed from acquisition | | 2,850 | | | ― | | | ― | | | ― | | | ― | | | ― | | | ― |
Service cost | | 122 | | | 35 | | | 63 | | | 25 | | | 30 | | | 6 | | | 9 |
Interest cost | | 307 | | | 90 | | | 127 | | | 58 | | | 56 | | | 31 | | | 30 |
Actuarial losses | | 489 | | | 73 | | | 166 | | | 34 | | | 120 | | | 68 | | | 76 |
Transfers | | ― | | | 176 | | | ― | | | ― | | | ― | | | -167 | | | ― |
Plan amendments | | -170 | | | -52 | | | -64 | | | -43 | | | -10 | | | ― | | | -1 |
Benefits paid | | -448 | | | -125 | | | -153 | | | -73 | | | -66 | | | -38 | | | -43 |
Obligation at measurement date | $ | 8,030 | | $ | 2,028 | | $ | 2,868 | | $ | 1,264 | | $ | 1,309 | | $ | 527 | | $ | 684 |
Accumulated Benefit Obligation at measurement date | $ | 7,843 | | $ | 2,028 | | $ | 2,820 | | $ | 1,264 | | $ | 1,261 | | $ | 501 | | $ | 653 |
Change in Fair Value of Plan Assets | | | | | | | | | | | | | | | | | | | | |
Plan assets at prior measurement date | $ | 4,741 | | $ | 1,820 | | $ | 2,191 | | $ | 1,091 | | $ | 969 | | $ | 565 | | $ | 582 |
Assets received from acquisition | | 2,285 | | | ― | | | ― | | | ― | | | ― | | | ― | | | ― |
Actual return on plan assets | | 872 | | | 280 | | | 263 | | | 130 | | | 119 | | | 86 | | | 88 |
Benefits paid | | -448 | | | -125 | | | -153 | | | -73 | | | -66 | | | -38 | | | -43 |
Transfers | | ― | | | 176 | | | ― | | | ― | | | ― | | | -167 | | | ― |
Employer contributions | | 304 | | | ― | | | 346 | | | 141 | | | 128 | | | ― | | | ― |
Plan assets at measurement date | $ | 7,754 | | $ | 2,151 | | $ | 2,647 | | $ | 1,289 | | $ | 1,150 | | $ | 446 | | $ | 627 |
Funded status of plan | $ | -276 | | $ | 123 | | $ | -221 | | $ | 25 | | $ | -159 | | $ | -81 | | $ | -57 |
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Amounts Recognized in the Consolidated Balance Sheets |
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| | 31-Dec-13 |
(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 |
Noncurrent pension liability | $ | ― | | $ | ― | | $ | 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(b) | $ | 75 | | $ | ― | | $ | 12 | | $ | ― | | $ | ― | | $ | ― | | $ | ― |
Amounts to be recognized in net periodic pension expense in the next year | | | | | | | | | | | | | | | | | | | | |
Unrecognized net actuarial loss | $ | 149 | | $ | 35 | | $ | 71 | | $ | 33 | | $ | 32 | | $ | 4 | | $ | 7 |
Unrecognized prior service credit | | -15 | | | -8 | | | -4 | | | -2 | | | -1 | | | ― | | | ― |
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| | 31-Dec-12 |
(in millions) | Duke Energy | | Duke Energy Carolinas | | Progress Energy | | Duke Energy Progress | | Duke Energy Florida | | Duke Energy Ohio | | Duke Energy Indiana |
Prefunded pension(a) | $ | 163 | | $ | 123 | | $ | ― | | $ | 25 | | $ | ― | | $ | ― | | $ | ― |
Noncurrent pension liability | $ | 439 | | $ | ― | | $ | 221 | | $ | ― | | $ | 159 | | $ | 81 | | $ | 57 |
Net asset (liability) recognized | $ | -276 | | $ | 123 | | $ | -221 | | $ | 25 | | $ | -159 | | $ | -81 | | $ | -57 |
Regulatory assets | $ | 2,387 | | $ | 582 | | $ | 1,079 | | $ | 472 | | $ | 541 | | $ | 144 | | $ | 246 |
Accumulated other comprehensive (income) loss | | | | | | | | | | | | | | | | | | | | |
Deferred income tax asset | $ | -59 | | $ | ― | | $ | -9 | | $ | ― | | $ | ― | | $ | ― | | $ | ― |
Prior service credit | | -4 | | | ― | | | ― | | | ― | | | ― | | | ― | | | ― |
Net actuarial loss | | 166 | | | ― | | | 26 | | | ― | | | ― | | | ― | | | ― |
Net amounts recognized in accumulated other comprehensive loss(b) | $ | 103 | | $ | ― | | $ | 17 | | $ | ― | | $ | ― | | $ | ― | | $ | ― |
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(a) | Included in Other within Investments and Other Assets on the Consolidated Balance Sheets. |
(b) | Excludes accumulated other comprehensive income of $16 million and $9 million as of 2013 and 2012, respectively, net of tax, associated with a Brazilian retirement plan. |
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Information for Plans with Accumulated Benefit Obligation in Excess of Plan Assets |
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As of December 31, 2013, no qualified pension plans had an accumulated benefit obligation in excess of plan assets. |
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| | 31-Dec-12 |
(in millions) | Duke Energy | | Progress Energy | | Duke Energy Florida | | Duke Energy Ohio | | Duke Energy Indiana | | | | | | |
Projected benefit obligation | $ | 5,396 | | $ | 2,868 | | $ | 1,309 | | $ | 527 | | $ | 684 | | | | | | |
Accumulated benefit obligation | | 5,201 | | | 2,820 | | | 1,261 | | | 501 | | | 653 | | | | | | |
Fair value of plan assets | | 4,957 | | | 2,647 | | | 1,150 | | | 446 | | | 627 | | | | | | |
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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, Duke Energy Ohio and Duke Energy Indiana and eight years for Progress Energy, Duke Energy Progress and Duke Energy Florida. |
The following tables present the assumptions used for pension benefit accounting. For Progress Energy plans, the assumptions used in 2012 to determine net periodic pension cost reflect remeasurement as of July 1, 2012, due to the merger between Duke Energy and Progress Energy. |
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| | Duke Energy | | Progress Energy | | | |
| | December 31, | | December 31, | | | |
| 2013 | | 2012 | | 2011 | | 2013 | | 2012 | | 2011 | | | |
Benefit Obligations | | | | | | | | | | | | | | | | | | | | |
Discount rate | 4.7 | % | | 4.1 | % | | 5.1 | % | | 4.7 | % | | 4.1 | % | | 4.75 | % | | | |
Salary increase | 4.4 | % | | 4.3 | % | | 4.4 | % | | 4 | % | | 4 | % | | 4 | % | | | |
Net Periodic Benefit Cost | | | | | | | | | | | | | | | | | | | | |
Discount rate | 4.1 | % | | 4.60-5.10 | % | | 5 | % | | 4.1 | % | | 4.60-4.75 | % | | 5.55 | % | | | |
Salary increase | 4.3 | % | | 4.4 | % | | 4.1 | % | | 4 | % | | 4 | % | | 4.5 | % | | | |
Expected long-term rate of return on plan assets | 7.75 | % | | 8 | % | | 8.25 | % | | 7.75 | % | | 8.00-8.25 | % | | 8.5 | % | | | |
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Expected Benefit Payments |
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(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, | | | | | | | | | | | | | | | | | | | | |
2014 | $ | 667 | | $ | 224 | | $ | 190 | | $ | 98 | | $ | 68 | | $ | 36 | | $ | 47 |
2015 | | 643 | | | 218 | | | 185 | | | 92 | | | 71 | | | 35 | | | 45 |
2016 | | 640 | | | 212 | | | 190 | | | 93 | | | 74 | | | 34 | | | 46 |
2017 | | 633 | | | 205 | | | 191 | | | 91 | | | 77 | | | 34 | | | 44 |
2018 | | 623 | | | 196 | | | 194 | | | 91 | | | 80 | | | 34 | | | 46 |
2019 - 2023 | | 2,933 | | | 807 | | | 969 | | | 422 | | | 430 | | | 171 | | | 227 |
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NON-QUALIFIED PENSION PLANS |
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Components of Net Periodic Pension Costs |
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| | 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 | | $ | ― | | $ | ― |
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| | 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 | | $ | ― | | $ | ― |
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| | Year Ended December 31, 2011 |
(in millions) | Duke Energy | | Duke Energy Carolinas | | Progress Energy | | Duke Energy Progress | | Duke Energy Florida | | Duke Energy Ohio | | Duke Energy Indiana |
Service cost | $ | 1 | | $ | ― | | $ | 2 | | $ | 1 | | $ | ― | | $ | ― | | $ | ― |
Interest cost on projected benefit obligation | | 8 | | | 1 | | | 9 | | | 2 | | | 2 | | | ― | | | ― |
Amortization of actuarial loss | | ― | | | ― | | | 3 | | | ― | | | 1 | | | ― | | | ― |
Amortization of prior service cost | | 2 | | | ― | | | ― | | | ― | | | ― | | | ― | | | ― |
Net periodic pension costs | $ | 11 | | $ | 1 | | $ | 14 | | $ | 3 | | $ | 3 | | $ | ― | | $ | ― |
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Amounts Recognized in Accumulated Other Comprehensive Income and Regulatory Assets and Liabilities |
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| | 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 | | $ | ― | | $ | ― | | $ | ― | | $ | ― |
| | | | | | | | | | | | | | | | | | | | | |
| | 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 |
Regulatory assets, net increase (decrease) | $ | 34 | | $ | ― | | $ | -6 | | $ | -2 | | $ | 1 | | $ | ― | | $ | ― |
Regulatory liabilities, net increase | $ | -8 | | $ | ― | | $ | ― | | $ | ― | | $ | ― | | $ | ― | | $ | ― |
Accumulated other comprehensive (income) loss | | | | | | | | | | | | | | | | | | | | |
Deferred income tax benefit | $ | ― | | $ | ― | | $ | -1 | | $ | ― | | $ | ― | | $ | ― | | $ | ― |
Actuarial (gains) losses arising during the year | | -2 | | | ― | | | 3 | | | ― | | | ― | | | ― | | | ― |
Net amount recognized in accumulated other comprehensive (income) loss | $ | -2 | | $ | ― | | $ | 2 | | $ | ― | | $ | ― | | $ | ― | | $ | ― |
| | | | | | | | | | | | | | | | | | | | | |
Reconciliation of Funded Status to Net Amount Recognized |
| | | | | | | | | | | | | | | | | | | | | |
| | 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 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 | $ | ― | | $ | ― | | $ | ― | | $ | ― | | $ | ― | | $ | ― | | $ | ― |
| | | | | | | | | | | | | | | | | | | | | |
| | 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 |
Change in Projected Benefit Obligation | | | | | | | | | | | | | | | | | | | | |
Obligation at prior measurement date | $ | 160 | | $ | 18 | | $ | 177 | | $ | 39 | | $ | 44 | | $ | 4 | | $ | 5 |
Obligation assumed from acquisition | | 172 | | | ― | | | ― | | | ― | | | ― | | | ― | | | ― |
Service cost | | 2 | | | ― | | | 2 | | | 1 | | | ― | | | ― | | | ― |
Interest cost | | 12 | | | 1 | | | 8 | | | 1 | | | 2 | | | ― | | | ― |
Actuarial losses | | 18 | | | ― | | | 11 | | | 3 | | | 3 | | | ― | | | ― |
Plan amendments | | -5 | | | ― | | | -12 | | | -4 | | | -2 | | | ― | | | ― |
Transfers | | ― | | | 1 | | | ― | | | ― | | | ― | | | ― | | | ― |
Benefits paid | | -24 | | | -4 | | | -10 | | | -2 | | | -2 | | | ― | | | ― |
Obligation at measurement date | $ | 335 | | $ | 16 | | $ | 176 | | $ | 38 | | $ | 45 | | $ | 4 | | $ | 5 |
Accumulated Benefit Obligation at measurement date | $ | 332 | | $ | 16 | | $ | 175 | | $ | 36 | | $ | 44 | | $ | 4 | | $ | 5 |
Change in Fair Value of Plan Assets | | | | | | | | | | | | | | | | | | | | |
Plan assets at prior measurement date | $ | ― | | $ | ― | | $ | ― | | $ | ― | | $ | ― | | $ | ― | | $ | ― |
Benefits paid | | -24 | | | -4 | | | -10 | | | -2 | | | -3 | | | ― | | | ― |
Employer contributions | | 24 | | | 4 | | | 10 | | | 2 | | | 3 | | | ― | | | ― |
Plan assets at measurement date | $ | ― | | $ | ― | | $ | ― | | $ | ― | | $ | ― | | $ | ― | | $ | ― |
| | | | | | | | | | | | | | | | | | | | | |
Amounts Recognized in the Consolidated Balance Sheets |
| | | | | | | | | | | | | | | | | | | | | |
| | 31-Dec-13 |
(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 | | $ | ― | | $ | ― |
Noncurrent pension liability | | 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 | | $ | ― | | $ | ― | | $ | ― | | $ | ― |
Amounts to be recognized in net periodic pension expense in the next year | | | | | | | | | | | | | | | | | | | | |
Unrecognized net actuarial loss | $ | 5 | | $ | ― | | $ | 2 | | $ | 1 | | $ | ― | | $ | ― | | $ | ― |
Unrecognized prior service credit | | -1 | | | ― | | | -1 | | | -1 | | | ― | | | ― | | | ― |
| | | | | | | | | | | | | | | | | | | | | |
| | 31-Dec-12 |
(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 | | $ | 3 | | $ | 11 | | $ | 2 | | $ | 3 | | $ | ― | | $ | ― |
Noncurrent pension liability | | 305 | | | 13 | | | 165 | | | 36 | | | 42 | | | 4 | | | 5 |
Total accrued pension liability | $ | 335 | | $ | 16 | | $ | 176 | | $ | 38 | | $ | 45 | | $ | 4 | | $ | 5 |
Regulatory assets | $ | 59 | | $ | 3 | | $ | 34 | | $ | 7 | | $ | 9 | | $ | ― | | $ | 2 |
Regulatory liabilities | $ | 2 | | $ | ― | | $ | ― | | $ | ― | | $ | ― | | $ | ― | | $ | ― |
Accumulated other comprehensive (income) loss | | | | | | | | | | | | | | | | | | | | |
Deferred income tax asset | $ | ― | | $ | ― | | $ | -4 | | $ | ― | | $ | ― | | $ | ― | | $ | ― |
Net actuarial (gain) loss | | -1 | | | ― | | | 12 | | | ― | | | ― | | | ― | | | ― |
Net amounts recognized in accumulated other comprehensive (income) loss | $ | -1 | | $ | ― | | $ | 8 | | $ | ― | | $ | ― | | $ | ― | | $ | ― |
| | | | | | | | | | | | | | | | | | | | | |
(a) | Included in Other within Current Liabilities on the Consolidated Balance Sheets. |
| | | | | | | | | | | | | | | | | | | | | |
Information for Plans with Accumulated Benefit Obligation in Excess of Plan Assets |
| | | | | | | | | | | | | | | | | | | | | |
| | 31-Dec-13 |
(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 |
| | | | | | | | | | | | | | | | | | | | | |
| | 31-Dec-12 |
(in millions) | Duke Energy | | Duke Energy Carolinas | | Progress Energy | | Duke Energy Progress | | Duke Energy Florida | | Duke Energy Ohio | | Duke Energy Indiana |
Projected benefit obligation | $ | 335 | | $ | 16 | | $ | 176 | | $ | 38 | | $ | 45 | | $ | 4 | | $ | 5 |
Accumulated benefit obligation | | 332 | | | 16 | | | 175 | | | 36 | | | 44 | | | 4 | | | 5 |
| | | | | | | | | | | | | | | | | | | | | |
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 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. For Progress Energy plans, the assumptions used in 2012 to determine net periodic pension cost reflect remeasurement as of July 1, 2012, due to the merger between Duke Energy and Progress Energy. |
| | | | | | | | | | | | | | | | | | | | | |
| | Duke Energy | | Progress Energy | | | |
| | December 31, | | December 31, | | | |
| 2013 | | 2012 | | 2011 | | 2013 | | 2012 | | 2011 | | | |
Benefit Obligations | | | | | | | | | | | | | | | | | | | | |
Discount rate | 4.7 | % | | 4.1 | % | | 5.1 | % | | 4.7 | % | | 4.1 | % | | 4.8 | % | | | |
Salary increase | 4.4 | % | | 4.3 | % | | 4.4 | % | | ― | % | | ― | % | | 5.25 | % | | | |
Net Periodic Benefit Cost | | | | | | | | | | | | | | | | | | | | |
Discount rate | 4.1 | % | | 4.60-5.10 | % | | 5 | % | | 4.1 | % | | 4.60-4.80 | % | | 5.6 | % | | | |
Salary increase | 4.3 | % | | 4.4 | % | | 4.1 | % | | ― | % | | ― | % | | 5.25 | % | | | |
| | | | | | | | | | | | | | | | | | | | | |
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, | | | | | | | | | | | | | | | | | | | | |
2014 | $ | 31 | | $ | 3 | | $ | 11 | | $ | 2 | | $ | 3 | | $ | ― | | $ | ― |
2015 | | 28 | | | 2 | | | 11 | | | 2 | | | 3 | | | ― | | | ― |
2016 | | 26 | | | 2 | | | 11 | | | 2 | | | 3 | | | ― | | | ― |
2017 | | 27 | | | 2 | | | 11 | | | 2 | | | 3 | | | ― | | | ― |
2018 | | 24 | | | 2 | | | 11 | | | 2 | | | 3 | | | ― | | | ― |
2019 - 2023 | | 112 | | | 6 | | | 52 | | | 13 | | | 15 | | | 1 | | | 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, 2013, 2012 or 2011. |
Components of Net Periodic Other Post-Retirement Benefit Costs |
| | | | | | | | | | | | | | | | | | | | | |
| | 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(a)(b) | $ | 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(a)(b) | $ | 80 | | $ | 13 | | $ | 102 | | $ | 53 | | $ | 39 | | $ | ― | | $ | 6 |
| | | | | | | | | | | | | | | | | | | | | |
| | Year Ended December 31, 2011 |
(in millions) | Duke Energy | | Duke Energy Carolinas | | Progress Energy | | Duke Energy Progress | | Duke Energy Florida | | Duke Energy Ohio | | Duke Energy Indiana |
Service cost | $ | 7 | | $ | 2 | | $ | 11 | | $ | 5 | | $ | 5 | | $ | 1 | | $ | 1 |
Interest cost on accumulated post-retirement benefit obligation | | 35 | | | 16 | | | 41 | | | 20 | | | 18 | | | 3 | | | 7 |
Expected return on plan assets | | -15 | | | -10 | | | -2 | | | ― | | | -2 | | | -1 | | | -1 |
Amortization of actuarial (gain) loss | | -3 | | | 2 | | | 12 | | | 5 | | | 7 | | | -2 | | | 2 |
Amortization of prior service credit | | -8 | | | -5 | | | ― | | | ― | | | ― | | | -1 | | | ― |
Amortization of net transition liability | | 10 | | | 9 | | | 5 | | | 1 | | | 4 | | | ― | | | ― |
Net periodic post-retirement benefit costs(a)(b) | $ | 26 | | $ | 14 | | $ | 67 | | $ | 31 | | $ | 32 | | $ | ― | | $ | 9 |
| | | | | | | | | | | | | | | | | | | | | |
(a) | Duke Energy amounts exclude $8 million, $9 million and $8 million for the years ended December 31, 2013, 2012 and 2011, respectively, of regulatory asset amortization resulting from purchase accounting adjustments associated with Duke Energy’s merger with Cinergy in April 2006. |
(b) | Duke Energy Ohio amounts exclude $2 million for each of the years ended December 31, 2013, 2012 and 2011, respectively, of regulatory asset amortization resulting from purchase accounting adjustments associated with Duke Energy’s merger with Cinergy in April 2006. |
| | | | | | | | | | | | | | | | | | | | | |
Amounts Recognized in Accumulated Other Comprehensive Income and Regulatory Assets and Liabilities |
| | | | | | | | | | | | | | | | | | | | | |
| | 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 | | $ | ― | | $ | ― | | $ | ― | | $ | ― | | $ | ― | | $ | ― |
| | | | | | | | | | | | | | | | | | | | | |
| | 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 |
Regulatory assets, net increase (decrease) | $ | 484 | | $ | -20 | | $ | 228 | | $ | 170 | | $ | 28 | | $ | ― | | $ | -6 |
Regulatory liabilities, net decrease | $ | -6 | | $ | ― | | $ | ― | | $ | ― | | $ | ― | | $ | -1 | | $ | -2 |
Accumulated other comprehensive (income) loss | | | | | | | | | | | | | | | | | | | | |
Deferred income tax expense | $ | -2 | | $ | ― | | $ | ― | | $ | ― | | $ | ― | | $ | -4 | | $ | ― |
Reclassification of actuarial losses to an affiliate | | ― | | | ― | | | ― | | | ― | | | ― | | | 6 | | | ― |
Actuarial losses arising during the year | | ― | | | ― | | | ― | | | ― | | | ― | | | 2 | | | ― |
Prior year service cost arising during the year | | ― | | | ― | | | ― | | | ― | | | ― | | | 1 | | | ― |
Amortization of prior year actuarial loss | | ― | | | ― | | | ― | | | ― | | | ― | | | 1 | | | ― |
Reclassification of actuarial gains to regulatory liabilities | | 4 | | | ― | | | ― | | | ― | | | ― | | | ― | | | ― |
Net amount recognized in accumulated other comprehensive loss | $ | 2 | | $ | ― | | $ | ― | | $ | ― | | $ | ― | | $ | 6 | | $ | ― |
| | | | | | | | | | | | | | | | | | | | | |
Reconciliation of Funded Status to Accrued Other Post-Retirement Benefit Costs |
| | | | | | | | | | | | | | | | | | | | | |
| | 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 | | | ― | | | ― | | | ― |
Benefits paid | | -132 | | | -36 | | | -60 | | | -26 | | | -31 | | | -6 | | | -14 |
Plan amendments | | -476 | | | -16 | | | -455 | | | -311 | | | -91 | | | ― | | | -3 |
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(a) | | ― | | | -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 |
| | | | | | | | | | | | | | | | | | | | | |
| | 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 |
Change in Projected Benefit Obligation | | | | | | | | | | | | | | | | | | | | |
Accumulated post-retirement benefit obligation at prior measurement date | $ | 667 | | $ | 312 | | $ | 841 | | $ | 407 | | $ | 368 | | $ | 61 | | $ | 135 |
Obligation assumed from acquisition | | 977 | | | ― | | | ― | | | ― | | | ― | | | ― | | | ― |
Service cost | | 16 | | | 2 | | | 17 | | | 8 | | | 7 | | | 1 | | | 1 |
Interest cost | | 56 | | | 15 | | | 43 | | | 23 | | | 18 | | | 3 | | | 6 |
Plan participants' contributions | | 41 | | | 18 | | | 13 | | | 5 | | | 7 | | | 4 | | | 8 |
Actuarial gains | | 198 | | | 28 | | | 291 | | | 205 | | | 49 | | | 3 | | | -2 |
Transfers | | ― | | | 9 | | | ― | | | ― | | | ― | | | -16 | | | ― |
Benefits paid | | -105 | | | -38 | | | -61 | | | -24 | | | -33 | | | -8 | | | -13 |
Special termination benefit cost | | 9 | | | 1 | | | 5 | | | 2 | | | 1 | | | ― | | | ― |
Plan amendments | | -70 | | | -33 | | | -25 | | | -16 | | | -6 | | | ― | | | ― |
Accrued retiree drug subsidy | | 5 | | | 2 | | | 4 | | | 2 | | | 2 | | | ― | | | 1 |
Accumulated post-retirement benefit obligation at measurement date | $ | 1,794 | | $ | 316 | | $ | 1,128 | | $ | 612 | | $ | 413 | | $ | 48 | | $ | 136 |
Change in Fair Value of Plan Assets | | | | | | | | | | | | | | | | | | | | |
Plan assets at prior measurement date | $ | 181 | | $ | 120 | | $ | 37 | | $ | ― | | $ | 37 | | $ | 9 | | $ | 14 |
Actual return on plan assets | | 23 | | | 12 | | | 2 | | | ― | | | 2 | | | 1 | | | 2 |
Benefits paid | | -105 | | | -38 | | | -61 | | | -24 | | | -33 | | | -8 | | | -13 |
Transfers(a) | | ― | | | 5 | | | -39 | | | ― | | | -39 | | | -3 | | | ― |
Employer contributions | | 58 | | | 17 | | | 48 | | | 19 | | | 26 | | | 4 | | | 6 |
Plan participants' contributions | | 41 | | | 18 | | | 13 | | | 5 | | | 7 | | | 4 | | | 8 |
Plan assets at measurement date | $ | 198 | | $ | 134 | | $ | ― | | $ | ― | | $ | ― | | $ | 7 | | $ | 17 |
| | | | | | | | | | | | | | | | | | | | | |
(a) | Progress Energy and Duke Energy Florida amounts reflect assets that did not meet the definition of plan assets. These assets are included in Other within Investments and Other Assets on the Consolidated Balance Sheets. |
| | | | | | | | | | | | | | | | | | | | | |
Amounts Recognized in the Consolidated Balance Sheets |
| | | | | | | | | | | | | | | | | | | | | |
| | 31-Dec-13 |
(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 | | $ | ― |
Noncurrent post-retirement liability | | 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 | | $ | ― | | $ | ― | | $ | ― | | $ | ― | | $ | ― | | $ | ― |
Amounts to be recognized in net periodic pension expense in the next year | | | | | | | | | | | | | | | | | | | | |
Unrecognized net actuarial loss (gain) | $ | 38 | | $ | 3 | | $ | 46 | | | 30 | | $ | 10 | | $ | -2 | | $ | -6 |
Unrecognized prior service credit | | -125 | | | -10 | | | -112 | | | -73 | | | -21 | | | ― | | | ― |
| | | | | | | | | | | | | | | | | | | | | |
| | 31-Dec-12 |
(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) | $ | 50 | | $ | ― | | $ | 47 | | $ | 23 | | $ | 20 | | $ | 2 | | $ | ― |
Noncurrent post-retirement liability | | 1,546 | | | 182 | | | 1,081 | | | 589 | | | 393 | | | 39 | | | 119 |
Total accrued post-retirement liability | $ | 1,596 | | $ | 182 | | $ | 1,128 | | $ | 612 | | $ | 413 | | $ | 41 | | $ | 119 |
Regulatory assets | $ | 521 | | $ | 17 | | $ | 505 | | $ | 291 | | $ | 170 | | $ | ― | | $ | 77 |
Regulatory liabilities | $ | 101 | | $ | ― | | $ | ― | | $ | ― | | $ | ― | | $ | 18 | | $ | 68 |
Accumulated other comprehensive (income) loss | | | | | | | | | | | | | | | | | | | | |
Deferred income tax liability | $ | 2 | | $ | ― | | $ | ― | | $ | ― | | $ | ― | | $ | ― | | $ | ― |
Prior service credit | | -3 | | | ― | | | ― | | | ― | | | ― | | | ― | | | ― |
Net actuarial gain | | -2 | | | ― | | | ― | | | ― | | | ― | | | ― | | | ― |
Net amounts recognized in accumulated other comprehensive income | $ | -3 | | $ | ― | | $ | ― | | $ | ― | | $ | ― | | $ | ― | | $ | ― |
| | | | | | | | | | | | | | | | | | | | | |
(a) | Included in Other within Current Liabilities 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. For Progress Energy plans, the assumptions used in 2012 to determine net periodic other post-retirement benefit cost reflect remeasurement as of July 1, 2012, due to the merger between Duke Energy and Progress Energy. |
| | | | | | | | | | | | | | | | | | | | | |
| | Duke Energy | | Progress Energy | | | |
| | December 31, | | December 31, | | | |
| 2013 | | 2012 | | 2011 | | 2013 | | 2012 | | 2011 | | | |
Benefit Obligations | | | | | | | | | | | | | | | | | | | | |
Discount rate | 4.7 | % | | 4.1 | % | | 5.1 | % | | 4.7 | % | | 4.1 | % | | 4.85 | % | | | |
Net Periodic Benefit Cost | | | | | | | | | | | | | | | | | | | | |
Discount rate | 4.1 | % | | 4.60-5.10 | % | | 5 | % | | 4.1 | % | | 4.60-4.85 | % | | 5.7 | % | | | |
Expected long-term rate of return on plan assets | 7.75 | % | | 5.20-8.00 | % | | 5.36-8.25 | % | | ― | % | | N/A-5.00 | % | | 5 | % | | | |
Assumed tax rate | 35 | % | | 35 | % | | 35 | % | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Assumed Health Care Cost Trend Rate | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | December 31, | | | | | | | | | | | | | | | |
| 2013 | | 2012 | | | | | | | | | | | | | | | |
Health care cost trend rate assumed for next year | 8.5 | % | | 8.5 | % | | | | | | | | | | | | | | | |
Rate to which the cost trend is assumed to decline (the ultimate trend rate) | 5 | % | | 5 | % | | | | | | | | | | | | | | | |
Year that rate reaches ultimate trend | 2021 | | | 2020 | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Sensitivity to Changes in Assumed Health Care Cost Trend Rates |
| | | | | | | | | | | | | | | | | | | | | |
| | 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 |
1-Percentage Point Increase | | | | | | | | | | | | | | | | | | | | |
Effect on total service and interest costs | $ | 11 | | $ | 2 | | $ | 7 | | $ | 4 | | $ | 3 | | $ | 1 | | $ | 1 |
Effect on post-retirement benefit obligation | | 42 | | | 10 | | | 20 | | | 9 | | | 10 | | | 2 | | | 4 |
1-Percentage Point Decrease | | | | | | | | | | | | | | | | | | | | |
Effect on total service and interest costs | | -9 | | | -1 | | | -6 | | | -3 | | | -2 | | | — | | | -1 |
Effect on post-retirement benefit obligation | | -36 | | | -9 | | | -16 | | | -7 | | | -8 | | | -1 | | | -4 |
| | | | | | | | | | | | | | | | | | | | | |
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, | | | | | | | | | | | | | | | | | | | | |
| 2014 | $ | 85 | | $ | 21 | | $ | 36 | | $ | 17 | | $ | 17 | | $ | 4 | | $ | 11 |
| 2015 | | 88 | | | 22 | | | 38 | | | 17 | | | 17 | | | 4 | | | 12 |
| 2016 | | 89 | | | 23 | | | 38 | | | 18 | | | 17 | | | 4 | | | 12 |
| 2017 | | 89 | | | 23 | | | 38 | | | 18 | | | 17 | | | 3 | | | 11 |
| 2018 | | 89 | | | 24 | | | 38 | | | 18 | | | 17 | | | 3 | | | 11 |
| 2019 - 2023 | | 413 | | | 109 | | | 180 | | | 81 | | | 84 | | | 17 | | | 47 |
| | | | | | | | | | | | | | | | | | | | | |
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, 2013 and 2012. 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 high expected return. Debt securities, 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. Duke Energy regularly reviews its actual asset allocation and periodically rebalances its investments to the targeted allocation when considered appropriate. |
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, 2013 and the actual asset allocations for the Duke Energy Master Retirement Trust. |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | Actual Allocation at December 31, | | | | | | | | | | | |
| Target Allocation | | 2013 | | 2012 | | | | | | | | | | | |
U.S. equity securities | | 10 | % | | 10 | % | | 28 | % | | | | | | | | | | | |
Non-U.S. equity securities | | 8 | % | | 8 | % | | 15 | % | | | | | | | | | | | |
Global equity securities | | 10 | % | | 10 | % | | 10 | % | | | | | | | | | | | |
Global private equity securities | | 3 | % | | 3 | % | | 3 | % | | | | | | | | | | | |
Debt securities | | 63 | % | | 63 | % | | 32 | % | | | | | | | | | | | |
Hedge funds | | 2 | % | | 3 | % | | 4 | % | | | | | | | | | | | |
Real estate and cash | | 2 | % | | 1 | % | | 4 | % | | | | | | | | | | | |
Other global securities | | 2 | % | | 2 | % | | 4 | % | | | | | | | | | | | |
Total | | 100 | % | | 100 | % | | 100 | % | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Progress Energy Master Retirement Trust |
As of December 31, 2012, assets for Progress Energy qualified pension benefits were maintained in the Progress Energy Master Retirement Trust. As of January 1, 2013, assets previously held in the Progress Energy Master Retirement Trust were transferred into the Duke Energy Master Retirement Trust. The following table includes the actual asset allocations for the Progress Energy Master Retirement Trust at December 31, 2012. |
| | | | | | | | | | | | | | | | | | | | | |
| | | Actual Allocation at December 31, | | | | | | | | | | | | | | | | | |
| | 2012 | | | | | | | | | | | | | | | | | |
U.S. equity securities | | 20 | % | | | | | | | | | | | | | | | | | |
Non-U.S. equity securities | | 14 | % | | | | | | | | | | | | | | | | | |
Global equity securities | | 8 | % | | | | | | | | | | | | | | | | | |
Global private equity securities | | 10 | % | | | | | | | | | | | | | | | | | |
Debt securities | | 35 | % | | | | | | | | | | | | | | | | | |
Hedge funds | | 9 | % | | | | | | | | | | | | | | | | | |
Real estate and cash | | 1 | % | | | | | | | | | | | | | | | | | |
Other global securities | | 3 | % | | | | | | | | | | | | | | | | | |
Total | | 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 includes the weighted-average returns expected by asset classes and the target asset allocations at December 31, 2013 and the actual asset allocations for VEBA I. |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | Actual Allocation at December 31, | | | | | | | | | | | |
| Target Allocation | | 2013 | | 2012 | | | | | | | | | | | |
U.S. equity securities | | 30 | % | | 29 | % | | 23 | % | | | | | | | | | | | |
Debt securities | | 45 | % | | 29 | % | | 32 | % | | | | | | | | | | | |
Cash | | 25 | % | | 42 | % | | 45 | % | | | | | | | | | | | |
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 at net asset value per share 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 1. |
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 investment trusts |
Investments in real estate investment trusts are valued based upon property appraisal reports prepared by independent real estate appraisers. The Chief Real Estate Appraiser of the asset manager is responsible for assuring that the valuation process provides independent and reasonable property market value estimates. An external appraisal management firm not affiliated with the asset manager has been appointed to assist the Chief Real Estate Appraiser in maintaining and monitoring the independence and the accuracy of the appraisal process. |
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. | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | 31-Dec-13 | | | | | | | | | |
(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 trusts | | 95 | | | ― | | | ― | | | 95 | | | | | | | | | |
U.S. government securities | | 927 | | | ― | | | 927 | | | ― | | | | | | | | | |
Guaranteed investment contracts | | 33 | | | ― | | | ― | | | 33 | | | | | | | | | |
Governments bonds - foreign | | 19 | | | ― | | | 18 | | | 1 | | | | | | | | | |
Cash | | 58 | | | 58 | | | ― | | | ― | | | | | | | | | |
Government and commercial mortgage 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. | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | 31-Dec-12 | | | | | | | | | |
(in millions) | Total Fair Value | | Level 1 | | Level 2 | | Level 3 | | | | | | | | | |
Equity securities | $ | 2,993 | | $ | 1,415 | | $ | 1,575 | | $ | 3 | | | | | | | | | |
Corporate debt securities | | 1,391 | | | ― | | | 1,388 | | | 3 | | | | | | | | | |
Short-term investment funds | | 100 | | | 23 | | | 77 | | | ― | | | | | | | | | |
Partnership interests | | 141 | | | ― | | | ― | | | 141 | | | | | | | | | |
Hedge funds | | 97 | | | ― | | | 97 | | | ― | | | | | | | | | |
Real estate trusts | | 167 | | | ― | | | ― | | | 167 | | | | | | | | | |
U.S. government securities | | 237 | | | ― | | | 237 | | | ― | | | | | | | | | |
Guarantees investment contracts | | 37 | | | ― | | | ― | | | 37 | | | | | | | | | |
Governments bonds - foreign | | 65 | | | ― | | | 64 | | | 1 | | | | | | | | | |
Cash | | 4 | | | 4 | | | ― | | | ― | | | | | | | | | |
Asset backed securities | | 14 | | | ― | | | 14 | | | ― | | | | | | | | | |
Net pending transactions and other investments | | -16 | | | -21 | | | 5 | | | ― | | | | | | | | | |
Total assets(a) | $ | 5,230 | | $ | 1,421 | | $ | 3,457 | | $ | 352 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
(a) | Duke Energy Carolinas, Duke Energy Ohio and Duke Energy Indiana were allocated approximately 43 percent, 9 percent and 12 percent, respectively, of the Duke Energy Master Retirement Trust assets at December 31, 2012. Accordingly, all Level 1, 2 and 3 amounts included in the table above are allocable to Duke Energy Carolinas, Duke Energy Ohio and Duke Energy Indiana using these percentages. | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
The following tables provide 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) | 2013 | | 2012 | | | | | | | | | | | | | | | |
Balance at January 1 | $ | 352 | | $ | 322 | | | | | | | | | | | | | | | |
Combination of trust assets | | 288 | | | ― | | | | | | | | | | | | | | | |
Purchases, sales, issuances and settlements | | | | | | | | | | | | | | | | | | | | |
Purchases | | 25 | | | 21 | | | | | | | | | | | | | | | |
Sales | | -152 | | | -4 | | | | | | | | | | | | | | | |
Total gains (losses) and other | | 33 | | | 13 | | | | | | | | | | | | | | | |
Balance at December 31 | $ | 546 | | $ | 352 | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
Progress Energy Master Retirement Trust | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
The following table provides the fair value measurement amounts for the Progress Energy Master Retirement Trust qualified pension assets. | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | 31-Dec-12 | | | | | | | | | |
(in millions) | Total Fair Value | | Level 1 | | Level 2 | | Level 3 | | | | | | | | | |
Equity securities | $ | 1,094 | | $ | 361 | | $ | 733 | | $ | ― | | | | | | | | | |
Corporate debt securities | | 432 | | | ― | | | 432 | | | ― | | | | | | | | | |
Partnership interests | | 154 | | | ― | | | ― | | | 154 | | | | | | | | | |
Hedge funds | | 313 | | | ― | | | 189 | | | 124 | | | | | | | | | |
U.S. government securities | | 515 | | | 405 | | | 110 | | | ― | | | | | | | | | |
Governments bonds - foreign | | 6 | | | ― | | | 6 | | | ― | | | | | | | | | |
Cash | | 160 | | | 113 | | | 47 | | | ― | | | | | | | | | |
Net pending transactions and other investments | | 16 | | | ― | | | 6 | | | 10 | | | | | | | | | |
Total assets(a) | $ | 2,690 | | $ | 879 | | $ | 1,523 | | $ | 288 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
(a) | Duke Energy Progress and Duke Energy Florida were allocated approximately 48 percent and 44 percent, respectively, of the Progress Energy Master Trust assets at December 31, 2012. Accordingly, all Level 1, 2 and 3 amounts included in the table above are allocable to Duke Energy Progress and Duke Energy Florida using these percentages. | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
The following tables provide a reconciliation of beginning and ending balances of Progress Trust assets measured at fair value on a recurring basis where the determination of fair value includes significant unobservable inputs (Level 3). | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
(in millions) | 2013 | | 2012 | | | | | | | | | | | | | | | |
Balance at January 1 | $ | 288 | | $ | 311 | | | | | | | | | | | | | | | |
Combination of trust assets | | -288 | | | ― | | | | | | | | | | | | | | | |
Purchases, sales, issuances and settlements | | | | | | | | | | | | | | | | | | | | |
Purchases | | ― | | | 13 | | | | | | | | | | | | | | | |
Sales | | ― | | | -14 | | | | | | | | | | | | | | | |
Transfers in and/or out of level 3 | | ― | | | -41 | | | | | | | | | | | | | | | |
Total gains (losses) and other | | ― | | | 19 | | | | | | | | | | | | | | | |
Balance at December 31 | $ | ― | | $ | 288 | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
VEBA I | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
The following tables provide the fair value measurement amounts for VEBA I other post-retirement assets. | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | 31-Dec-13 | | | | | | | | | |
(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 | | $ | ― | | | | | | | | | |
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| | 31-Dec-12 | | | | | | | | | |
(in millions) | Total Fair Value | | Level 1 | | Level 2 | | Level 3 | | | | | | | | | |
Cash and cash equivalents | $ | 22 | | $ | ― | | $ | 22 | | $ | ― | | | | | | | | | |
Equity securities | | 12 | | | ― | | | 12 | | | ― | | | | | | | | | |
Debt securities | | 16 | | | ― | | | 16 | | | ― | | | | | | | | | |
Total assets | $ | 50 | | $ | ― | | $ | 50 | | $ | ― | | | | | | | | | |
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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. |
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, | | | | | | | | | | | | | | | | | | | | |
| 2013 | $ | 134 | | $ | 45 | | $ | 45 | | $ | 25 | | $ | 14 | | $ | 3 | | $ | 7 |
| 2012 | | 107 | | | 37 | | | 45 | | | 24 | | | 15 | | | 4 | | | 6 |
| 2011 | | 86 | | | 37 | | | 44 | | | 23 | | | 14 | | | 4 | | | 8 |
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