Duke Energy (DUK) 10-Q 7 Aug 09 2009 Q2 Quarterly report Financial data

Statement Of Income Alternative

Statement Of Income Alternative (USD $)
In Millions, except Per Share data	3 Months Ended Jun. 30, 2009	3 Months Ended Jun. 30, 2008	6 Months Ended Jun. 30, 2009	6 Months Ended Jun. 30, 2008
Operating Revenues
Regulated electric	$2,388	$2,279	$4,933	$4,512
Non-regulated electric, natural gas and other	431	837	898	1,584
Regulated natural gas	94	113	394	470
Total operating revenues	2,913	3,229	6,225	6,566
Operating Expenses
Fuel used in electric generation and purchased power-regulated	772	755	1,621	1,441
Fuel used in electric generation and purchased power-non-regulated	157	288	305	554
Cost of natural gas and coal sold	54	83	276	362
Operation, maintenance and other	848	877	1,659	1,662
Depreciation and amortization	407	418	821	831
Property and other taxes	160	158	353	333
Total operating expenses	2,398	2,579	5,035	5,183
Gains on Sales of Other Assets and Other, net	13	33	19	51
Operating Income	528	683	1,209	1,434
Other Income and Expenses
Equity in earnings (losses) of unconsolidated affiliates	19	(61)	25	(18)
Other income and expenses, net	100	75	122	149
Total other income and expenses	119	14	147	131
Interest Expense	186	194	370	376
Income From Continuing Operations Before Income Taxes	461	503	986	1,189
Income Tax Expense from Continuing Operations	177	167	356	389
Income From Continuing Operations	284	336	630	800
(Loss) Income From Discontinued Operations, net of tax	(2)	13	1	15
Net Income	282	349	631	815
Less: Net Income (Loss) Attributable to Noncontrolling Interests	6	(2)	11	(1)
Net Income Attributable to Duke Energy Corporation	$276	$351	$620	$816
Income from continuing operations attributable to Duke Energy Corporation common shareholders
Basic	0.22	0.27	0.48	0.63
Diluted	0.22	0.27	0.48	0.63
Income from discontinued operations attributable to Duke Energy Corporation common shareholders
Basic	$0	0.01	$0	0.01
Diluted	$0	0.01	$0	0.01
Net income attributable to Duke Energy Corporation common shareholders
Basic	0.21	0.28	0.48	0.64
Diluted	0.21	0.28	0.48	0.64
Dividends per share	0.47	0.45	0.7	0.67
Weighted-average shares outstanding
Basic	1,288	1,264	1,284	1,264
Diluted	1,289	1,266	1,285	1,266

Statement Of Financial Position

Statement Of Financial Position Classified (USD $)
In Millions	Jun. 30, 2009	Dec. 31, 2008
Current Assets
Cash and cash equivalents	$706	$986
Short-term investments	4	51
Receivables (net of allowance for doubtful accounts of $46 at June 30, 2009 and $42 at December 31, 2008)	1,511	1,653
Inventory	1,368	1,135
Other	1,802	1,448
Total current assets	5,391	5,273
Investments and Other Assets
Investments in equity method unconsolidated affiliates	466	473
Nuclear decommissioning trust funds	1,513	1,436
Goodwill	4,741	4,720
Intangibles, net	621	680
Notes receivable	135	134
Other	2,598	2,577
Total investments and other assets	10,074	10,020
Property, Plant and Equipment
Cost	52,356	50,304
Less accumulated depreciation and amortization	16,927	16,268
Net property, plant and equipment	35,429	34,036
Regulatory Assets and Deferred Debits
Deferred debt expense	256	257
Regulatory assets related to income taxes	664	625
Other	2,895	2,866
Total regulatory assets and deferred debits	3,815	3,748
Total Assets	54,709	53,077
Current Liabilities
Accounts payable	1,015	1,477
Notes payable and commercial paper	399	543
Taxes accrued	360	362
Interest accrued	215	187
Current maturities of long-term debt	901	646
Other	1,251	1,130
Total current liabilities	4,141	4,345
Long-term Debt	14,433	13,250
Deferred Credits and Other Liabilities
Deferred income taxes	5,895	5,117
Investment tax credits	142	148
Asset retirement obligations	2,657	2,567
Other	6,081	6,499
Total deferred credits and other liabilities	14,775	14,331
Commitments and Contingencies	0	0
Equity
Common Stock, $0.001 par value, 2 billion shares authorized; 1,294 million and 1,272 million shares outstanding at June 30, 2009 and December 31, 2008, respectively	1	1
Additional paid-in capital	20,425	20,106
Retained earnings	1,321	1,607
Accumulated other comprehensive loss	(521)	(726)
Total Duke Energy Corporation shareholders' equity	21,226	20,988
Noncontrolling Interests	134	163
Total equity	21,360	21,151
Total Liabilities and Equity	$54,709	$53,077

1_Statement Of Financial Positi

Statement Of Financial Position Classified (Parenthetical) (USD $)
In Millions, except Share data	Jun. 30, 2009	Dec. 31, 2008
Receivables, allowance for doubtful accounts	$46	$42
Common Stock, par value	0.001	0.001
Common Stock, shares authorized	2,000,000,000	2,000,000,000
Common Stock, shares outstanding	1,294,000,000	1,272,000,000

Statement Of Cash Flows Indirec

Statement Of Cash Flows Indirect (USD $)
In Millions	6 Months Ended Jun. 30, 2009	6 Months Ended Jun. 30, 2008
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$631	$815
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization (including amortization of nuclear fuel)	917	908
Gains on sales of other assets	(19)	(75)
Impairments and other charges	12	0
Deferred income taxes	716	286
Equity in (earnings) loss of unconsolidated affiliates	(25)	18
Contributions to qualified pension plans	(500)	0
(Increase) decrease in
Net realized and unrealized mark-to-market and hedging transactions	(18)	(103)
Receivables	200	(79)
Inventory	(227)	(9)
Other current assets	(338)	24
Increase (decrease) in
Accounts payable	(300)	(54)
Taxes accrued	49	26
Other current liabilities	(130)	(118)
Other assets	(1)	72
Other liabilities	50	(16)
Net cash provided by operating activities	1,017	1,695
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(1,900)	(2,142)
Investment expenditures	(66)	(10)
Acquisitions, net of cash acquired	(114)	0
Purchases of available-for-sale securities	(1,845)	(32,238)
Proceeds from sales and maturities of available-for-sale securities	1,826	31,723
Net proceeds from the sales of other assets and sales of and collections on notes receivable	44	78
Purchases of emission allowances	(38)	(23)
Sales of emission allowances	27	80
Change in restricted cash	(40)	17
Other	(27)	(12)
Net cash used in investing activities	(2,133)	(2,527)
Proceeds from the:
Issuance of long-term debt	2,064	2,393
Issuance of common stock related to employee benefit plans	286	23
Payments for the redemption of long-term debt	(729)	(803)
Notes payable and commercial paper	(148)	(187)
Distributions to noncontrolling interests	(33)	(1)
Contributions from noncontrolling interests	0	3
Dividends paid	(596)	(549)
Other	(8)	(8)
Net cash provided by financing activities	836	871
Net (decrease) increase in cash and cash equivalents	(280)	39
Cash and cash equivalents at beginning of period	986	678
Cash and cash equivalents at end of period	706	717
Significant non-cash transactions:
Accrued capital expenditures	241	125
Dividends declared but not paid	$310	$291

Statement Of Shareholders Equit

Statement Of Shareholders Equity And Other Comprehensive Income (USD $)
In Millions		Common Stock	Additional Paid-in Capital [Member]	Retained Earnings	Foreign Currency Adjustments	Net Gains (Losses) on Cash Flow Hedges		Other		Pension and OPEB Related Adjustments to AOCI		Common Stockholders' Equity		Noncontrolling Interests	Total
Beginning Balance at Dec. 31, 2007		$1	$19,933	$1,398	($7)	($54)		$2		($74)		$21,199		$180	$21,379
Beginning Balance at Dec. 31, 2007	1,262
Net income				816								816		(1)	815
Other Comprehensive Income
Foreign currency translation adjustments					123							123		7	130
Net unrealized gain on cash flow hedges						(12)	[5]					(12)	[5]		(12)	[5]
Reclassification into earnings from cash flow hedges						5	[6]					5	[6]		5	[6]
SFAS No. 158 amortization										12	[3]	12	[3]		12	[3]
Unrealized loss on investments in auction rate securities								(16)	[2]			(16)	[2]		(16)	[2]
Reclassification of losses on investments in auction rate securities and other available for sale securities into earnings								2	[1]			2	[1]		2	[1]
Other								(8)	[4]			(8)	[4]		(8)	[4]
Total comprehensive income												922		6	928
Common stock issuances, including dividend reinvestment and employee benefits	3
Common stock issuances, including dividend reinvestment and employee benefits			41									41			41
Common stock dividends				(850)								(850)			(850)
Additional amounts related to the spin-off of Spectra Energy				(11)								(11)		3	(8)
Ending Balance at Jun. 30, 2008	1,265
Ending Balance at Jun. 30, 2008		1	19,974	1,353	116	(61)		(20)		(62)		21,301		189	21,490
Beginning Balance at Mar. 31, 2008		1
Other Comprehensive Income
Ending Balance at Jun. 30, 2008		1
Beginning Balance at Dec. 31, 2008		1	20,106	1,607	(306)	(41)		(28)		(351)		20,988		163	21,151
Beginning Balance at Dec. 31, 2008	1,272
Net income				620								620		11	631
Other Comprehensive Income
Foreign currency translation adjustments					177							177		9	186
Net unrealized gain on cash flow hedges						1	[5]					1	[5]		1	[5]
Reclassification into earnings from cash flow hedges						14	[6]					14	[6]		14	[6]
SFAS No. 158 amortization										18	[3]	18	[3]		18	[3]
Unrealized loss on investments in auction rate securities								(6)	[2]			(6)	[2]		(6)	[2]
Other								1	[4]			1	[4]		1	[4]
Total comprehensive income												825		20	845
Common stock issuances, including dividend reinvestment and employee benefits	22
Common stock issuances, including dividend reinvestment and employee benefits			305									305			305
Purchases and other changes in noncontrolling interest in subsidiaries			14									14		(49)	(35)
Common stock dividends				(906)								(906)			(906)
Ending Balance at Jun. 30, 2009	1,294
Ending Balance at Jun. 30, 2009		1	20,425	1,321	(129)	(26)		(33)		(333)		21,226		134	21,360
Beginning Balance at Mar. 31, 2009		1
Other Comprehensive Income
Ending Balance at Jun. 30, 2009		$1
[1]Net of $2 tax expense in 2008.
[2]Net of $3 tax benefit in 2009 and $11 tax benefit in 2008.
[3]Net of $9 tax expense in 2009 and $7 tax expense in 2008.
[4]Net of insignificant tax expense in 2009 and $6 tax benefit in 2008.
[5]Net unrealized gains (losses) on cash flow hedges, net of insignificant tax expense in 2009 and $5 tax benefit in 2008.
[6]Reclassification into earnings from cash flow hedges, net of $8 tax expense in 2009 and $2 tax expense in 2008.

Notes to Financial Statements

Notes to Financial Statements
	6 Months Ended Jun. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
1. Basis of Presentation	1. Basis of Presentation Nature of Operations and Basis of Consolidation. Duke Energy Corporation (collectively with its subsidiaries, Duke Energy) is an energy company primarily located in the Americas. These Unaudited Consolidated Financial Statements include, after eliminating intercompany transactions and balances, the accounts of Duke Energy and all majority-owned subsidiaries where Duke Energy has control and those variable interest entities where Duke Energy is the primary beneficiary. These Unaudited Consolidated Financial Statements also reflect Duke Energys proportionate share of certain generation and transmission facilities in South Carolina, Ohio, Indiana and Kentucky. These Unaudited Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles (GAAP) in the United States of America (U.S.) for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, these Unaudited Consolidated Financial Statements do not include all of the information and notes required by GAAP in the U.S. for annual financial statements. Because the interim Unaudited Consolidated Financial Statements and Notes do not include all of the information and notes required by GAAP in the U.S. for annual financial statements, the Unaudited Consolidated Financial Statements and other information included in this quarterly report should be read in conjunction with the Consolidated Financial Statements and Notes in Duke Energys Form 10-K for the year ended December31, 2008. These Unaudited Consolidated Financial Statements reflect all normal recurring adjustments that are, in the opinion of management, necessary to fairly present Duke Energys financial position and results of operations. Amounts reported in the interim Unaudited Consolidated Statements of Operations are not necessarily indicative of amounts expected for the respective annual periods due to the effects of seasonal temperature variations on energy consumption, regulatory rulings, the timing of maintenance on electric generating units, changes in mark-to-market valuations, changing commodity prices and other factors. Use of Estimates. To conform to GAAP in the U.S., management makes estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and Notes. Although these estimates are based on managements best available information at the time, actual results could differ. Reclassifications. Certain prior period amounts on the Unaudited Consolidated Financial Statements have been reclassified in connection with the adoption of Financial Accounting Standards Board (FASB) Statement of Financial Accounting Standards (SFAS) No.160, Noncontrolling Interests in Consolidated Financial Statements an amendment of ARB No.51, (SFAS No.160) on January1, 2009, as discussed in Note 18, the effects of which require retrospective application to the Unaudited Consolidated Financial Statements. Unbilled Revenue. Revenues on sales of electricity and gas are recognized when either the service is provided or the product is delivered. Unbilled retail revenues are estimated by ap
2. Business Segments	2. Business Segments Duke Energy operates the following business segments, which are all considered reportable business segments under SFASNo.131, Disclosures about Segments of an Enterprise and Related Information: U.S. Franchised Electric and Gas (which consists of the regulated operations of Duke Energy Carolinas, LLC (Duke Energy Carolinas), Duke Energy Indiana, Duke Energy Kentucky, and certain regulated operations of Duke Energy Ohio), Commercial Power and International Energy. Duke Energys chief operating decision maker regularly reviews financial information about each of these business units in deciding how to allocate resources and evaluate performance. There is no aggregation within Duke Energys reportable business segments. The remainder of Duke Energys operations is presented as Other. While it is not considered a business segment, Other primarily includes certain unallocated corporate costs, Bison Insurance Company Limited (Bison), Duke Energys wholly-owned, captive insurance subsidiary, Duke Energys effective 50% interest in the Crescent JV (Crescent) and DukeNet Communications, LLC and related telecommunications businesses. Additionally, Other includes the remaining portion of the former Duke Energy North America (DENA) businesses that were not disposed or transferred to Commercial Power, primarily Duke Energy Trading and Marketing, LLC (DETM), which is 40% owned by Exxon Mobil Corporation and 60% owned by Duke Energy and management is currently in the process of winding down. Duke Energys reportable segments offer different products and services and are managed separately as business units. Accounting policies for Duke Energys segments are the same as those described in the Notes to the Consolidated Financial Statements in Duke Energys Annual Report on Form 10-K for the year ended December31, 2008. Management evaluates segment performance based on earnings before interest and taxes from continuing operations, after deducting expenses attributable to noncontrolling interests related to those profits (EBIT). On a segment basis, EBIT excludes discontinued operations, represents all profits from continuing operations (both operating and non-operating) before deducting interest and taxes, and is net of the expenses attributable to noncontrolling interests related to those profits. Cash, cash equivalents and short-term investments are managed centrally by Duke Energy, so the associated realized and unrealized gains and losses from foreign currency transactions and interest and dividend income on those balances are excluded from the segments EBIT. Segment EBIT includes transactions between reportable segments. Business Segment Data Unaffiliated Revenues Intersegment Revenues Total Revenues SegmentEBIT/ ConsolidatedIncome FromContinuing OperationsBefore Income Taxes Depreciationand Amortization (in millions) Three Months Ended June30, 2009 U.S. Franchised Electric and Gas $ 2,141 $ 8 $ 2,149 $ 500 $ 319 Commercial Power 473 1 474 79 49 International Energy 271
3. Acquisitions and Dispositions and Sales of Other Assets	3. Acquisitions and Dispositions and Sales of Other Assets Acquisitions. In June 2009, Duke Energy completed the purchase of the remaining 25% noncontrolling interest in the Aguaytia Integrated Energy Project (Aguaytia), located in Peru, for approximately $28 million. Subsequent to this transaction, Duke Energy owns 100% of Aguaytia. As the carrying value of the noncontrolling interest was approximately $42 million at the date of acquisition, Duke Energys consolidated equity increased approximately $14 million as a result of this transaction. Cash paid for acquiring this additional ownership interest is included in Distributions to minority interests within Net cash provided by financing activities on the Consolidated Statements of Cash Flows. In June 2009, Duke Energy acquired North Allegheny Wind, LLC (North Allegheny) in Western Pennsylvania for approximately $124 million, of which approximately $114 million was paid on the transaction date, with the remaining $10 million paid in July 2009. The fair value of the net assets acquired were determined primarily using a discounted cash flow model as the output of North Allegheny is contracted for 23 1/2 years under a fixed price purchased power agreement. Substantially all of the fair value of the acquired net assets has been attributed to property, plant and equipment. There was no goodwill associated with this transaction. North Allegheny owns 70 MW of power generating assets that are expected to begin commercially generating electricity in the third quarter of 2009. On September30, 2008, Duke Energy completed the purchase of a portion of Saluda River Electric Cooperative, Inc.s (Saluda) ownership interest in the Catawba Nuclear Station. Under the terms of the agreement, Duke Energy paid approximately $150 million for the additional ownership interest in the Catawba Nuclear Station. Following the closing of the transaction, Duke Energy owns approximately 19% of the Catawba Nuclear Station. No goodwill was recorded as a result of this transaction. See Note 13 for discussion of the North Carolina Utilities Commission (NCUC) and the Public Service Commission of South Carolina (PSCSC) approval of Duke Energys petition requesting an accounting order to defer incremental costs incurred from the purchase of this additional ownership interest. In June 2008, Duke Energy announced the execution of a definitive agreement to acquire Catamount Energy Corporation (Catamount) from Diamond Castle Partners. Catamount is a leading wind power company located in Rutland, Vermont. The acquisition closed in September 2008 and expanded Duke Energys renewable energy portfolio to include over 300 MW of power generating assets, including 283 net MW in the Sweetwater wind power facility in West Texas, and 20 net MW of biomass-fueled cogeneration in New England. The acquisition also included approximately 1,750 MW of wind assets with the potential for development in the U.S. and United Kingdom. This transaction resulted in a purchase price of approximately $245 million plus the assumption of approximately $80 million of debt. The purchase accounting entries recorded upon acquisition primarily consisted of
4. Earnings Per Common Share (EPS)	4. Earnings Per Common Share (EPS) Basic EPS is computed by dividing net income attributable to Duke Energy by the weighted-average number of common shares outstanding during the period. Diluted EPS is computed by dividing net income attributable to Duke Energy, as adjusted, by the diluted weighted-average number of common shares outstanding during the period. Diluted EPS reflects the potential dilution that could occur if securities or other agreements to issue common stock, such as stock options, phantom shares and stock-based performance unit awards were exercised or settled. In June 2008, the FASB issued FASB Staff Position (FSP) No. EITF 03-6-1 Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities, (FSP No. EITF 03-6-1) to address whether instruments granted in share-based payment transactions may be participating securities prior to vesting and, therefore, need to be included in the earnings allocation in computing basic EPS pursuant to the two-class method described in SFAS No.128.The FASB concluded that rights to dividends or dividend equivalents (whether paid or unpaid) on unvested share-based payment awards that provide a noncontingent transfer of value (such as a nonforfeitable right to receive cash when dividends are paid to common stockholders, irrespective of whether the award ultimately vests) to the holder of the share-based payment award constitute participation rights and, therefore, should be included in the computation of basic EPS using the two-class method. Duke Energy issues certain share-based payment awards under which rights to dividends during the vesting period are nonforfeitable. For Duke Energy, FSP No. EITF 03-6-1 was effective as of January1, 2009 and all prior-period EPS data was adjusted retrospectively to conform to the provisions of FSP EITF 03-6-1.The adoption of FSP No. EITF 03-6-1 did not have a material impact on Duke Energys current or historical EPS amounts. The following table illustrates Duke Energys basic and diluted EPS calculations and reconciles the weighted-average number of common shares outstanding to the diluted weighted-average number of common shares outstanding for the three and six months ended June30, 2009 and 2008. Income Average Shares EPS (inmillions,exceptper-shareamounts) Three Months Ended June30, 2009 Income from continuing operations attributable to Duke Energy common shareholdersbasic $ 278 1,288 $ 0.22 Effect of dilutive securities: Stock options, phantom, performance and unvested stock 1 Income from continuing operations attributable to Duke Energy common shareholdersdiluted $ 278 1,289 $ 0.22 Three Months Ended June30, 2008 Income from continuing operations attributable to Duke Energy common shareholdersbasic $ 338 1,264 $ 0.27 Effect of dilutive securities: Stock options, phantom, performance and unvested stock 2 Income from continuing operations attributable to Duke Energy
5. Stock-Based Compensation	5. Stock-Based Compensation Duke Energy accounts for stock-based compensation under the provisions of SFAS No.123(R), Share-Based Payment (SFAS No.123(R)). SFAS No.123(R) established accounting for stock-based awards exchanged for employee and certain nonemployee services. Accordingly, for employee awards, equity classified stock-based compensation cost is measured at the grant date, based on the fair value of the award, and is recognized as expense over the requisite service period. Duke Energy recorded pre-tax stock-based compensation expense included in Income From Continuing Operations for each of the three and six months ended June30, 2009 and 2008 as follows: ThreeMonthsEnded June30, SixMonthsEnded June30, 2009(a) 2008 2009(a) 2008 (in millions) Stock Options $ $ $ 2 $ 1 Phantom Awards 4 4 11 11 Performance Awards 8 7 12 13 Total $ 12 $ 11 $ 25 $ 25 (a) Excludes stock-based compensation cost capitalized of approximately $1 million and $2 million for the three and six months ended June 30, 2009, respectively. No amounts were capitalized during the three or six months ended June 30, 2008. The tax benefit associated with the expense recorded in Income From Continuing Operations for both the three months ended June30, 2009 and 2008 was approximately $5 million. The tax benefit associated with the expense recorded in Income From Continuing Operations for both the six months ended June30, 2009 and 2008 was approximately $10 million. Duke Energys 2006 Long-term Incentive Plan (the 2006 Plan) reserved 60million shares of common stock for awards to employees and outside directors. The 2006 Plan superseded the 1998 Long-term Incentive Plan, as amended (the 1998 Plan), and no additional grants will be made from the 1998 Plan. Under the 2006 Plan, the exercise price of each option granted cannot be less than the market price of Duke Energys common stock on the date of grant and the maximum option term is 10 years. The vesting periods range from immediate to five years. Duke Energy has historically issued new shares upon exercising or vesting of share-based awards. In 2009, Duke Energy may use a combination of new share issuances and open market repurchases for share-based awards which are exercised or become vested; however, Duke Energy has not determined with certainty the amount of such new share issuances or open market repurchases. The 2006 Plan allows for a maximum of 15million shares of common stock to be issued under various stock-based awards other than options and stock appreciation rights. Stock Option Activity Options (inthousands) Weighted- Average Exercise Price Outstanding at December31, 2008 19,790 $ 17 Granted 603 15 Exercised (203 ) 9 Forfeited or expired (1,093 ) 17 Outstanding at June30, 2009 19,097 17 Exercisable at June30, 2009 18,494 $ 17 There were 603,015 stock options granted during the six months
6. Inventory	6. Inventory Inventory consists primarily of materials and supplies and coal held for electric generation and is recorded primarily using the average cost method. Inventory related to Duke Energys regulated operations is valued at historical cost consistent with ratemaking treatment. Materials and supplies are recorded as inventory when purchased and subsequently charged to expense or capitalized to plant when installed. Inventory related to Duke Energys non-regulated operations is valued at the lower of cost or market. June30, 2009 December31, 2008 (in millions) Materials and supplies $ 670 $ 661 Coal held for electric generation 695 471 Natural gas 3 3 Total inventory $ 1,368 $ 1,135
7. Debt and Credit Facilities	7. Debt and Credit Facilities Unsecured Debt. In January 2009, Duke Energy issued $750 million principal amount of 6.30% senior notes due February1, 2014. Proceeds from the issuance were used to redeem commercial paper and for general corporate purposes. In June 2008, Duke Energy issued $500 million principal amount of senior notes, of which $250 million carries a fixed interest rate of 5.65% and matures June15, 2013 and $250 million carries a fixed interest rate of 6.25% and matures June15, 2018. Proceeds from the issuance were used to redeem commercial paper, to fund capital expenditures in Duke Energys unregulated businesses in the U.S. and for general corporate purposes. First and Refunding Mortgage Bonds. In March 2009, Duke Energy Ohio issued $450 million principal amount of first mortgage bonds, which carry a fixed interest rate of 5.45% and mature April1, 2019. Proceeds from this issuance were used to repay short-term notes and for general corporate purposes, including funding capital expenditures. In March 2009, Duke Energy Indiana issued $450 million principal amount of first mortgage bonds, which carry a fixed interest rate of 6.45% and mature April1, 2039. Proceeds from this issuance were used to fund capital expenditures, to replenish cash used to repay $97 million of senior notes which matured on March15, 2009, to fund the repayment at maturity of $125 million of first mortgage bonds due July15, 2009, and for general corporate purposes, including the repayment of short-term notes. In January 2008, Duke Energy Carolinas issued $900 million principal amount of mortgage refunding bonds, of which $400 million carry a fixed interest rate of 5.25% and mature January15, 2018 and $500 million carry a fixed interest rate of 6.00% and mature January15, 2038. Proceeds from the issuance were used to fund capital expenditures and for general corporate purposes, including the repayment of commercial paper. In anticipation of this debt issuance, Duke Energy Carolinas executed a series of interest rate swaps in 2007 to lock in the market interest rates at that time. The value of these interest rate swaps, which were terminated prior to issuance of the fixed rate debt, was a pre-tax loss of approximately $18 million. This amount was recorded as a component of Accumulated Other Comprehensive Loss and is being amortized as a component of Interest Expense over the life of the debt. In April 2008, Duke Energy Carolinas issued $900 million principal amount of mortgage refunding bonds, of which $300 million carries a fixed interest rate of 5.10% and matures April15, 2018 and $600 million carries a fixed interest rate of 6.05% and matures April15, 2038. Proceeds from the issuance were used to fund capital expenditures and for general corporate purposes. In anticipation of this debt issuance, Duke Energy Carolinas executed a series of interest rate swaps in 2007 to lock in the market interest rates at that time. The value of these interest rate swaps, which were terminated prior to issuance of the fixed rate debt, was a pre-tax loss of approximately $23 million. This amount was recorded as a component of Accumulated Other Comprehensi
8. Employee Benefit Obligations	8. Employee Benefit Obligations Net periodic benefit costs disclosed in the tables below for the qualified, non-qualified and other-postretirement benefit plans 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. Qualified Pension Plans The following table shows the components of the net periodic pension costs for the Duke Energy U.S. qualified pension plans. Components of Net Periodic Pension Costs: Qualified Pension Costs ThreeMonthsEnded June30, SixMonthsEnded June30, 2009(a) 2008(a) 2009(b) 2008(b) (in millions) Service cost $ 22 $ 22 $ 42 $ 46 Interest cost on projected benefit obligation 63 66 128 128 Expected return on plan assets (89 ) (84 ) (180 ) (170 ) Amortization of prior service cost 1 1 3 3 Amortization of loss 2 1 6 Other 5 5 9 10 Net periodic pension costs $ 2 $ 12 $ 3 $ 23 (a) Net periodic qualified pension costs for the three months ended June30, 2009 and 2008 excludes regulatory asset amortization of approximately $3 million and $4 million, respectively, resulting from purchase accounting adjustments associated with Duke Energys merger with Cinergy in April 2006. (b) Net periodic qualified pension costs for each of the six months ended June30, 2009 and 2008 excludes regulatory asset amortization of approximately $6 million, resulting from purchase accounting adjustments associated with Duke Energys merger with Cinergy in April 2006. Duke Energys policy is to fund amounts for its U.S. qualified pension plans on an actuarial basis to provide assets sufficient to meet benefit payments to be paid to plan participants. In February 2009, Duke Energy made an approximate $500 million contribution to its U.S. qualified pension plans. Duke Energy does not anticipate making additional contributions to its qualified or non-qualified pension plans during the remainder of 2009. There were no contributions to the U.S. qualified pension plans during the six months ended June30, 2008. Non-Qualified Pension Plans The following table shows the components of the net periodic pension costs for the Duke Energy U.S. non-qualified pension plans. Components of Net Periodic Pension Costs: Non-Qualified Pension Costs ThreeMonthsEnded June30, SixMonthsEnded June30, 2009 2008 2009 2008 (in millions) Service cost $ 1 $ $ 1 $ 1 Interest cost on projected benefit obligation 2 3 5 5 Amortization of prior service cost 1 1 Amortization of loss 1 1 Net periodic pension costs $ 3 $ 4 $ 7 $ 8 Other Post-Retirement Benefit Plans The following table shows the com
9. Goodwill and Intangible Assets	9. Goodwill and Intangible Assets The following table shows goodwill by business segment at June30, 2009 and December31, 2008: Balance December31, 2008 Changes Balance June30, 2009 (in millions) U.S. Franchised Electric and Gas $ 3,500 $ $ 3,500 Commercial Power 960 960 International Energy 260 21 281 Total consolidated $ 4,720 $ 21 $ 4,741 The carrying amount and accumulated amortization of intangible assets as of June30, 2009 and December31, 2008 are as follows: June30, 2009 December31, 2008 (in millions) Emission allowances $ 286 $ 300 Gas, coal and power contracts 296 296 Wind development rights(a) 127 161 Other 69 68 Total gross carrying amount 778 825 Accumulated amortizationgas, coal and power contracts (129 ) (117 ) Accumulated amortizationother (28 ) (28 ) Total accumulated amortization (157 ) (145 ) Total intangible assets, net $ 621 $ 680 (a) As discussed further below and in Note 3, the decrease in wind development rights primarily relates to the sale of certain projects that were acquired as part of Catamount in September 2008. Emission allowances in the table above include emission allowances acquired by Duke Energy as part of its merger with Cinergy, which were recorded at the then fair value on the date of the merger in April 2006, and emission allowances purchased by Duke Energy. Additionally, Duke Energy is allocated certain zero cost emission allowances on an annual basis. The change in the gross carrying value of emission allowances during the six months ended June30, 2009 is as follows: (inmillions) Gross carrying value at beginning of period $ 300 Purchases of emission allowances 38 Sales and consumption of emission allowances(a)(b) (54 ) Other changes 2 Gross carrying value at end of period $ 286 (a) Carrying value of emission allowances are recognized via a charge to expense when consumed. Carrying value of emission allowances sold or consumed during the six months ended June30, 2008 was approximately $66 million. (b) See Note 3 for a discussion of gains and losses on sales of emission allowances by Commercial Power and U.S. Franchised Electric and Gas during the three and six months ended June30, 2009 and 2008. Amortization expense for gas, coal and power contracts and other intangible assets was approximately $6 million and $5 million for the three months ended June30, 2009 and 2008, respectively, and approximately $12 million for each of the six months ended June30, 2009 and 2008. As discussed in Note 3, Duke Energy completed the acquisition of Catamount in September 2008, resulting in the recognition of approximately $117 million of intangible assets related to wind farm development rights. Of this amount, a portion of the intangible
10. Investments in Equity Method Unconsolidated Affiliates	10. Investments in Equity Method Unconsolidated Affiliates In connection with the renegotiation of its debt agreements in June 2008, Crescent management modified its existing business strategy to focus some of its efforts on producing near term cash flows from its non-strategic real estate projects in order to improve liquidity. As a result of its revised business strategy to accelerate certain cash flows resulting from the June 2008 amendments to its debt agreements, Crescent updated its recoverability assessments for its real estate projects as required under SFAS No.144. Under SFAS No.144, the carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. For certain of Crescents non-strategic assets, it was determined as of June30, 2008 that certain projects projected undiscounted cash flows did not exceed the carrying value of the projects based on the revised business strategy assumptions, and an impairment loss was recorded equal to the amount by which the carrying amount of each impaired project exceeded its estimated fair value. The methods for determining fair value included discounted cash flow models, as well as valuing certain properties based on recent offer prices for bulk-sale transactions and other price data for similar assets. During the three months ended June30, 2008, Crescent recorded impairment charges on certain of its property holdings, primarily in its residential division, of which Duke Energys proportionate pre-tax share was approximately $113 million. Duke Energys proportionate pre-tax share of impairment charges associated with Crescent was approximately $124 million for the six months ended June30, 2008. These amounts are recorded in Equity in Earnings (Losses) of Unconsolidated Affiliates in Duke Energys Consolidated Statements of Operations. During the third quarter of 2008, Duke Energy recorded its proportionate share of additional impairment charges recorded by Crescent which reduced the carrying value of Duke Energys investment in Crescent to zero. Accordingly, Duke Energy discontinued applying the equity method of accounting to its investment in Crescent in the third quarter of 2008 and did not record its proportionate share of any Crescent earnings or losses in subsequent periods. See Note 15 for a discussion of a charge recorded in the first quarter of 2009 related to performance guarantees issued by Duke Energy on behalf of Crescent. Crescent filed Chapter 11 petitions in a U.S. Bankruptcy Court in June 2009.
11. Discontinued Operations and Assets Held for Sale	11. Discontinued Operations and Assets Held for Sale (Loss) Income From Discontinued Operations, net of tax, was a loss of approximately $2 million and income of approximately $1 million for the three and six months ended June30, 2009, respectively, and income of approximately $13 million and $15 million for the three and six months ended June30, 2008, respectively. There were no Assets Held for Sale and Liabilities Associated with Assets Held for Sale in the Consolidated Balance Sheets as of June30, 2009 or December31, 2008. The income recorded during the three and six months ended June30, 2008 primarily relates to Commercial Powers gain on the sale of its 480 MW natural gas-fired peaking generating station located near Brownsville, Tennessee to Tennessee Valley Authority for approximately $55 million in April 2008. This transaction resulted in Duke Energy recognizing an approximate $23 million pre-tax gain at closing.
12. Risk Management, Derivative Instruments and Hedging Activities	12. Risk Management, Derivative Instruments and Hedging Activities The primary risks Duke Energy manages by utilizing derivative instruments are commodity price risk and interest rate risk. Duke Energy closely monitors the risks associated with commodity price changes and changes in interest rates on its operations and, where appropriate, uses various commodity and interest rate instruments to manage these risks. Certain of these derivative instruments are designated as hedging instruments under SFAS No.133 Accounting for Derivative Instruments and Hedging Activities (SFAS No.133) while others either do not qualify as a hedge or have not been designated as hedges by Duke Energy (hereinafter referred to as undesignated contracts). Duke Energys primary use of energy commodity derivatives is to hedge its generation portfolio against exposure to the prices of power and fuel. Interest rate swaps are entered into to manage interest rate risk primarily associated with Duke Energys variable-rate and fixed-rate borrowings. SFAS No.133 requires the recognition of all derivative instruments as either assets or liabilities at fair value in the Consolidated Balance Sheets. In accordance with SFAS No.133, Duke Energy may elect to designate qualifying commodity and interest rate derivatives as either cash flow hedges or fair value hedges. For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the gain or loss is reported as a component of Accumulated Other Comprehensive Income (AOCI) and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Any gains or losses on the derivative that represent either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings. For derivative instruments that are designated and qualify as a fair value hedge, the gain or loss on the derivative as well as the offsetting loss or gain on the hedged item are recognized in earnings in the current period. Duke Energy includes the gain or loss on the derivative in the same line item as the offsetting loss or gain on the hedged item in the Consolidated Statements of Operations. Additionally, Duke Energy enters into derivative agreements that are economic hedges that either do not qualify for hedge accounting or have not been designated as a hedge. These derivative instruments are typically reflected on the Consolidated Balance Sheets at fair value with changes in the value of the derivative instrument reflected in regulatory assets or liabilities, as discussed below, or possibly in current earnings. As Duke Energys regulated operations within its U.S. Franchised Electric and Gas and Commercial Power business segments apply the provisions of SFAS No.71, certain gains and losses associated with undesignated contracts are deferred as regulatory liabilities and assets, respectively, thus there is no immediate earnings impact associated with the change in fair values of these derivative contracts. Commodity Price Risk Duke Energy is exposed to the impact of market changes in the future prices of electri
13. Regulatory Matters	13. Regulatory Matters U.S. Franchised Electric and Gas. Rate Related Information. The NCUC, PSCSC, Indiana Utility Regulatory Commission (IURC) and Kentucky Public Service Commission (KPSC) approve rates for retail electric and gas services within their states. The PUCO approves rates for retail gas and electric service within Ohio, except that non-regulated sellers of gas and electric generation also are allowed to operate in Ohio (see Commercial Power below). The FERC approves rates for electric sales to wholesale customers served under cost-based and market-based rates. Duke Energy Carolinas 2007 North Carolina Rate Case. On December 20, 2007, the NCUC issued its Order Approving Stipulation and Deciding Non-Settled Issues (Order), which required that Duke Energy Carolinas test period for operating costs reflect an annualized level of the merger cost savings actually experienced in the test period. However, the NCUC recognized that its treatment of merger savings would not produce a fair result. Therefore, on February18, 2008, the NCUC issued an order authorizing a 12-month increment rider, beginning January 2008, of approximately $80 million designed to provide a more equitable sharing of the actual merger savings achieved on an ongoing basis. Duke Energy Carolinas implemented the rate rider effective January1, 2008 and terminated the rider effective January1, 2009. The Order ultimately resulted in an overall average rate decrease of 5% in 2008, increasing to 7% upon expiration of this one-time rate rider. Duke Energy Carolinas 2009 North Carolina Rate Case. On June2, 2009, Duke Energy Carolinas filed an Application for Adjustment of Rates and Charges Applicable to Electric Service in North Carolina to increase its base rates by approximately 12.6%, constituting an increase in annual revenues from North Carolina retail operations of approximately $496 million. The Application is based upon a historical test year consisting of the 12 months ended December31, 2008. The NCUC issued a procedural order setting five public hearings during September 2009 in various cities within Duke Energy Carolinas North Carolina service territory and an evidentiary hearing beginning October19, 2009. Duke Energy Carolinas anticipates that new rates resulting from the proceeding, if approved, would be effective January1, 2010. However, Duke Energy Carolinas cannot predict the outcome of this proceeding. Duke Energy Carolinas 2009 South Carolina Rate Case. On July27, 2009, Duke Energy Carolinas filed its Application for Authority to Increase and Adjust Rates and Charges for an increase in rates and charges in South Carolina. Duke Energy Carolinas has requested approval to raise general rates by an average of 9.3%, constituting an increase in annual revenues of approximately $104million; however, customers would only experience a 7.2% increase if the PSCSC approves Duke Energy Carolinas plan to return money previously collected from customers for energy efficiency and demand side management (DSM) programs. Additionally, Duke Energy Carolinas also requested that the PSCSC approve a charge to customer bills to pay for Duke Energy Carolinas new en
14. Commitments and Contingencies	14. Commitments and Contingencies Environmental Duke Energy is subject to international, federal, state and local regulations regarding air and water quality, hazardous and solid waste disposal and other environmental matters. These regulations can be changed from time to time, imposing new obligations on Duke Energy. Remediation Activities. Duke Energy and its affiliates are responsible for environmental remediation at various contaminated sites. These include some properties that are part of ongoing Duke Energy operations, sites formerly owned or used by Duke Energy entities, and sites owned by third parties. Remediation typically involves management of contaminated soils and may involve groundwater remediation. Managed in conjunction with relevant federal, state and local agencies, activities vary with site conditions and locations, remedial requirements, complexity and sharing of responsibility. If remediation activities involve statutory joint and several liability provisions, strict liability, or cost recovery or contribution actions, Duke Energy or its affiliates could potentially be held responsible for contamination caused by other parties. In some instances, Duke Energy may share liability associated with contamination with other potentially responsible parties, and may also benefit from insurance policies or contractual indemnities that cover some or all cleanup costs. All of these sites generally are managed in the normal course of business or affiliate operations. During 2009, Duke Energy has recorded additional reserves associated with remediation activities at certain sites and it is anticipated that additional costs associated with remediation activities at certain of its sites will be incurred. Included in Other within Deferred Credits and Other Liabilities and Other within Current Liabilities on the Consolidated Balance Sheets were total accruals related to extended environmental-related activities of approximately $65 million and $55 million as of June30, 2009 and December31, 2008, respectively. These accruals represent Duke Energys provisions for costs associated with remediation activities at some of its current and former sites, as well as other relevant environmental contingent liabilities. Management, in the normal course of business, continually assesses the nature and extent of known or potential environmental-related contingencies and records liabilities when losses become probable and are reasonably estimable. Clean Water Act 316(b). The EPA finalized its cooling water intake structures rule in July 2004. The rule established aquatic protection requirements for existing facilities that withdraw 50million gallons or more of water per day from rivers, streams, lakes, reservoirs, estuaries, oceans or other U.S. waters for cooling purposes. Fourteen of the 23 coal and nuclear-fueled generating facilities in which Duke Energy is either a whole or partial owner are affected sources under that rule. On April1, 2009, the U.S. Supreme Court ruled in favor of the appellants that the EPA may consider costs when determining which technology option each site should implement. Depending on how the cost-benefit a
15. Guarantees and Indemnifications	15. Guarantees and Indemnifications Duke Energy and its subsidiaries have various financial and performance guarantees and indemnifications which are issued in the normal course of business. As discussed below, these contracts include performance guarantees, stand-by letters of credit, debt guarantees, surety bonds and indemnifications. Duke Energy and its subsidiaries enter into these arrangements to facilitate commercial transactions with third parties by enhancing the value of the transaction to the third party. On January2, 2007, Duke Energy completed the spin-off of its natural gas businesses to shareholders. Guarantees that were issued by Duke Energy, Cinergy, or International Energy, or were assigned to Duke Energy prior to the spin-off remained with Duke Energy subsequent to the spin-off. Guarantees issued by Spectra Energy Capital, LLC (Spectra Capital) or its affiliates prior to the spin-off remained with Spectra Capital subsequent to the spin-off, except for certain guarantees that are in the process of being assigned to Duke Energy. During this assignment period, Duke Energy has indemnified Spectra Capital against any losses incurred under these guarantee obligations. The maximum potential amount of future payments associated with the guarantees issued by Spectra Capital is approximately $320 million. Duke Energy has issued performance guarantees to customers and other third parties that guarantee the payment and performance of other parties, including certain non-wholly-owned entities, as well as guarantees of debt of certain non-consolidated entities and less than wholly-owned consolidated entities. If such entities were to default on payments or performance, Duke Energy would be required under the guarantees to make payments on the obligations of the less than wholly-owned entity. The maximum potential amount of future payments Duke Energy could have been required to make under these guarantees as of June30, 2009 was approximately $459 million. Of this amount, approximately $212 million relates to guarantees issued on behalf of less than wholly-owned consolidated entities, with the remainder related to guarantees issued on behalf of third parties and unconsolidated affiliates of Duke Energy. Approximately $156 million of the guarantees expire between 2010 and 2019, with the remaining performance guarantees having no contractual expiration. Included in the maximum potential amount of future payments discussed above is approximately $63 million of maximum potential amounts of future payments associated with guarantees issued to customers or other third parties related to the payment or performance obligations of certain entities that were previously wholly owned by Duke Energy but which have been sold to third parties, such as DukeSolutions, Inc. (DukeSolutions) and Duke Engineering Services, Inc. (DES). These guarantees are primarily related to payment of lease obligations, debt obligations, and performance guarantees related to provision of goods and services. Duke Energy has received back-to-back indemnification from the buyer of DES indemnifying Duke Energy for any amounts paid related to the DES guarantees. Duk
16. Fair Value of Financial Assets and Liabilities	16. Fair Value of Financial Assets and Liabilities On January1, 2008, Duke Energy adopted SFAS No.157 for financial instruments and non-financial derivatives. InFebruary 2008, the FASB issued FSP No. FAS157-2, Effective Date of FASB Statement No.157, which delayed the effective date of SFAS No.157 until January1, 2009 for non-financial assets and liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis. Accordingly, effective January1, 2009, Duke Energy adopted SFAS No.157 for non-financial assets and liabilities. Duke Energy did not record any cumulative effect adjustment to retained earnings as a result of the adoption of SFAS No.157. SFAS No.157 defines fair value, establishes a framework for measuring fair value in GAAP in the U.S. and expands disclosure requirements about fair value measurements. Under SFAS No.157, fair value is considered to be the exchange price in an orderly transaction between market participants to sell an asset or transfer a liability at the measurement date. The fair value definition under SFAS No.157 focuses on an exit price, which is the price that would be received by Duke Energy to sell an asset or paid to transfer a liability versus an entry price, which would be the price paid to acquire an asset or received to assume a liability. Although SFAS No.157 does not require additional fair value measurements, it applies to other accounting pronouncements that require or permit fair value measurements. Duke Energy determines fair value of financial assets and liabilities based on the following fair value hierarchy, as prescribed by SFAS No.157, which prioritizes the inputs to valuation techniques used to measure fair value into three levels: Level 1 inputsunadjusted quoted prices in active markets for identical assets or liabilities that Duke Energy has the ability to access. An active market for the asset or liability is one in which transactions for the asset or liability occur with sufficient frequency and volume to provide ongoing pricing information. Duke Energy does not adjust quoted market prices on Level 1 inputs for any blockage factor. Level 2 inputsinputs other than quoted market prices included in Level 1 that are observable, either directly or indirectly, for the asset or liability. Level 2 inputs include, but are not limited to, quoted prices for similar assets or liabilities in an active market, quoted prices for identical or similar assets or liabilities in markets that are not active and inputs other than quoted market prices that are observable for the asset or liability, such as interest rate curves and yield curves observable at commonly quoted intervals, volatilities, credit risk and default rates. Level 3 inputsunobservable inputs for the asset or liability. In February 2007, the FASB issued SFAS No.159, The Fair Value Option for Financial Assets and Financial Liabilities- including an amendment of FASB Statement No.115 (SFAS No.159), which permits entities to elect to measure many financial instruments andcertain other items at fair value. For Duke Energy, SFAS No.159 was effective as of January1, 2008
17. Investments in Debt and Equity Securities	17. Investments in Debt and Equity Securities Duke Energy applies SFAS No.115, Accounting For Certain Investments in Debt and Equity Securities (SFAS No.115), to its investments in debt and equity securities and classifies its investments into two categories trading and available-for-sale. Certain investments in debt and equity securities held in grantor trusts associated with certain deferred compensation plans are classified as trading securities and are reported at fair value in the Consolidated Balance Sheets with net realized and unrealized gains and losses included in earnings each period. All other investments in debt and equity securities are classified as available-for-sale securities, which are also reported at fair value on the Consolidated Balance Sheets with unrealized gains and losses excluded from earnings and reported either as a regulatory asset or liability, as discussed further below, or as a component of other comprehensive income until realized. Duke Energys available-for-sale securities are primarily comprised of investments held in the nuclear decommissioning trust fund (NDTF), investments in a grantor trust at Duke Energy Indiana related to other post-retirement benefit plans as required by the IURC, the captive insurance investment portfolio and investments in auction rate debt securities. The investments within the NDTF and Duke Energy Indianas grantor trust are managed by independent investment managers with discretion to buy, sell and invest pursuant to the objectives set forth by the trust agreements. Therefore, Duke Energy has limited oversight of the day-to-day management of these investments. Since day-to-day investment decisions, including buy and sell decisions, are made by the investment manager, the ability to hold investments in unrealized loss positions is outside the control of Duke Energy. Accordingly, all unrealized losses associated with equity securities within the NDTF and Duke Energy Indianas grantor trust are considered other-than-temporary and are recognized immediately when the fair value of individual investments is less than the cost basis of the investment. With respect to investments in debt securities within the NDTF and Duke Energy Indianas grantor trust, Duke Energy applies the provisions of FSP No. FAS 115-2 and FAS 124-2, which is discussed further below. However, pursuant to regulatory accounting, all unrealized losses associated with investments in debt and equity securities within the NDTF and Duke Energy Indianas grantor trust are deferred as a regulatory asset, thus there is no impact on the earnings of Duke Energy as a result of any other-than-temporary impairments that would otherwise be required to be recognized in earnings under SFAS No.115 or FSP No. FAS 115-2 and FAS 124-2, as discussed further below. For all other investments in debt and equity securities, unrealized gains and losses are included in other comprehensive income until realized, unless it is determined that the carrying value of an investment is other-than-temporarily impaired, at which time the write-down to fair value may be included in earnings based on the criteria discussed below. For available-
18. New Accounting Standards	18. New Accounting Standards The following new accounting standards were adopted by Duke Energy subsequent to June30, 2008 and the impact of such adoption, if applicable, has been presented in the accompanying Consolidated Financial Statements: SFAS No.141R. In December 2007, the FASB issued SFAS No.141R, which replaces SFAS No.141, Business Combinations. SFAS No.141R retains the fundamental requirements in SFAS No.141 that the acquisition method of accounting be used for all business combinations and that an acquirer be identified for each business combination. This statement also establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, any noncontrolling (minority) interests in an acquiree, and any goodwill acquired in a business combination or gain recognized from a bargain purchase. For Duke Energy, SFAS No.141R must be applied prospectively to business combinations for which the acquisition date occurs on or after January1, 2009. The impact to Duke Energy of applying SFAS No.141R for periods subsequent to implementation will be dependent upon the nature of any transactions within the scope of SFAS No.141R. SFAS No.141R changes the accounting for income taxes related to prior business combinations, such as Duke Energys merger with Cinergy. Subsequent to the effective date of SFAS No.141R, the resolution of any tax contingencies relating to Cinergy that existed as of the date of the merger will be required to be reflected in the Consolidated Statements of Operations instead of being reflected as an adjustment to the purchase price via an adjustment to goodwill. SFAS No.160, Noncontrolling Interests in Consolidated Financial Statementsan amendment of Accounting Research Bulletin (ARB) No.51 (SFAS No.160). In December 2007, the FASB issued SFAS No.160, which amends ARB No.51, Consolidated Financial Statements, to establish accounting and reporting standards for the noncontrolling (minority) interest in a subsidiary and for the deconsolidation of a subsidiary. SFAS No.160 clarified that a noncontrolling interest in a subsidiary is an ownership interest in a consolidated entity that should be reported as equity in the consolidated financial statements. This statement also changed the way the consolidated income statement is presented by requiring consolidated net income to be reported at amounts that include the amounts attributable to both the parent and the noncontrolling interest. In addition, SFAS No.160 established a single method of accounting for changes in a parents ownership interest in a subsidiary that do not result in deconsolidation. For Duke Energy, SFAS No.160 was effective as ofJanuary1, 2009, and has been applied prospectively, except for certain presentation and disclosure requirements that were applied retrospectively. The adoption of SFAS No.160 impacted the presentation of noncontrolling interests in Duke Energys Consolidated Financial Statements, as well as the calculation of Duke Energys effective tax rate. SFAS No.161, Disclosures about Derivative Instruments and Hedging Activitiesan amendment
19. Income Taxes and Other Taxes	19. Income Taxes and Other Taxes Duke Energy or its subsidiaries file income tax returns in the U.S. with federal and various state governmental authorities, and in certain foreign jurisdictions. The following table details the changes in Duke Energys unrecognized tax benefits from January1, 2009 to June30, 2009. Increase/(Decrease) (inmillions) Unrecognized Tax BenefitsJanuary1, 2009 $ 572 Unrecognized Tax Benefits Changes Gross increasestax positions in prior periods 5 Gross decreasestax positions in prior periods (1 ) Gross increasescurrent period tax positions 2 Settlements (11 ) Total Changes (5 ) Unrecognized Tax BenefitsJune30, 2009 $ 567 At June30, 2009 and December31, 2008, Duke Energy had approximately $298 million and $294 million, respectively, of unrecognized tax benefits that, if recognized, would affect the effective tax rate or a regulatory liability. At this time, Duke Energy is unable to estimate the specific effect to either. At June30, 2009, Duke Energy has approximately $15 million that, if recognized, would affect Income From Discontinued Operations, net of tax. It is reasonably possible that Duke Energy will reflect an approximate $50 million reduction in unrecognized tax benefits within the next twelve months due to expected settlements. Duke Energy has the following tax years open. Jurisdiction Tax Years Federal 1999 and after (except for Cinergy and its subsidiaries, which are open for years 2005 and after) State Majority closed through 2001 except for certain refund claims for tax years 1978-2001 and any adjustments related to open federal years International 2000 and after As of June30, 2009 and December31, 2008, approximately $831 million and $490 million, respectively, of federal income taxes receivable were included in Other within Current Assets on the Consolidated Balance Sheets. At June30, 2009, this balance exceeded 5% of total current assets. The effective tax rate increased for the three months ended June30, 2009 (38.4%)compared to the same period in 2008 (33.0%)primarily due to an increase in state deferred taxes and a true up of prior year taxes related to adjustments to the manufacturing deduction. The effective tax rate increased for the six months ended June30, 2009 (36.1%)compared to the same period in 2008 (32.7%)primarily due to an increase in state deferred taxes and a true up of prior year taxes related to adjustments to the manufacturing deduction. Excise Taxes. Certain excise taxes levied by state or local governments are collected by Duke Energy from its customers. These taxes, which are required to be paid regardless of Duke Energys ability to collect from the customer, are accounted for on a gross basis. When Duke Energy acts as an agent, and the tax is not required to be remitted if it is not collected from the customer, the taxes are accounted for on a net basis. Duke Energys excise taxes accounted for on a gross basis and recorded as operating revenues in the accompanying Consolidated Statements of Ope
20. Variable Interest Entities	20. Variable Interest Entities Accounts Receivable Securitization Cinergy Receivables Company. During 2002, Duke Energy Ohio, Duke Energy Indiana and Duke Energy Kentucky entered into an agreement to sell certain of their accounts receivable and related collections through Cinergy Receivables, a bankruptcy-remote, QSPE. Cinergy Receivables is a wholly-owned limited liability company of Cinergy and was formed in 2002 through a $5 million equity contribution by Cinergy to purchase certain accounts receivable of Duke Energy Ohio, Duke Energy Indiana and Duke Energy Kentucky. The purpose of the formation of Cinergy Receivables was to improve liquidity at the lowest possible financing cost. As a result of the securitization, Duke Energy Ohio, Duke Energy Indiana and Duke Energy Kentucky sell, on a revolving basis, nearly all of their retail accounts receivable and related collections. The securitization transaction was structured to meet the criteria for sale treatment under SFAS No.140 and, accordingly, Duke Energy does not consolidate Cinergy Receivables and the transfers of receivables are accounted for as sales. Duke Energy accounts for Cinergy Receivables under the equity method of accounting and all of the earnings or losses of Cinergy Receivables are therefore reflected in Duke Energys consolidated earnings. However, as discussed further in Note 18, the accounting treatment and/or the financial statement presentation of Cinergy Receivables could potentially be impacted by the adoption of SFAS No.166 and SFAS No.167 on January1, 2010. The proceeds obtained from the sales of receivables are largely cash but do include a subordinated note from Cinergy Receivables for a portion of the purchase price (typically approximates 25% of the total proceeds). The note, which amounts to approximately $286 million and $292 million at June30, 2009 and December31, 2008, respectively, is subordinate to senior loans that Cinergy Receivables obtains from commercial paper conduits controlled by unrelated financial institutions. Cinergy Receivables provides credit enhancement related to senior loans in the form of over-collateralization of the purchased receivables. However, the over-collateralization is calculated monthly and does not extend to the entire pool of receivables held by Cinergy Receivables at any point in time. As such, these senior loans do not have recourse to all assets of Cinergy Receivables. These loans provide the cash portion of the proceeds paid to Duke Energy Ohio, Duke Energy Indiana and Duke Energy Kentucky. This subordinated note is a retained interest (right to receive a specified portion of cash flows from the sold assets) under SFAS No.140 and is classified within Receivables in the accompanying Consolidated Balance Sheets at June30, 2009 and December31, 2008. In addition, Duke Energys investment in Cinergy Receivables constitutes a purchased beneficial interest (purchased right to receive specified cash flows, in this case residual cash flows), which is subordinate to the retained interests held by Duke Energy Ohio, Duke Energy Indiana and Duke Energy Kentucky. In 2008, Cinergy Receivables and Duke Energy Ohio, Duke
21. Comprehensive Income and Accumulated Other Comprehensive Income	21. Comprehensive Income and Accumulated Other Comprehensive Income Comprehensive Income. Comprehensive income includes net income and all other non-owner changes in equity. The table below provides the components of other comprehensive income and total comprehensive income for the three months ended June30, 2009 and 2008. Components of other comprehensive income and total comprehensive income for the six months ended June30, 2009 and 2008 are presented in the Consolidated Statements of Equity and Comprehensive Income. Total Comprehensive Income Common Stockholders Equity Noncontrolling Interests Total Equity (in millions) Three Months Ended June30, 2009 Net Income $ 276 $ 6 $ 282 Other comprehensive income Foreign currency translation adjustments 183 9 192 Net unrealized gain on cash flow hedges(a) 1 1 Reclassification into earnings from cash flow hedges(b) 4 4 SFAS No.158 amortization(c) 17 17 Unrealized gain on investments in available for sale securities(d) 3 3 Other(e) 1 1 Other comprehensive income, net of tax 209 9 218 Total Comprehensive Income $ 485 $ 15 $ 500 (a) Net of insignificant tax expense for the three months ended June30, 2009. (b) Net of $4 million tax expense for the three months ended June30, 2009. (c) Net of $9 million tax expense for the three months ended June30, 2009. (d) Net of $1 million tax expense for the three months ended June30, 2009. (e) Net of insignificant tax expense for the three months ended June30, 2009. Common Stockholders Equity Noncontrolling Interests Total Equity (in millions) Three Months Ended June30, 2008 Net Income $ 351 $ (2 ) $ 349 Other comprehensive income Foreign currency translation adjustments 85 6 91 Net unrealized loss on cash flow hedges(a) (2 ) (2 ) Reclassification into earnings from cash flow hedges(b) 4 4 SFAS No.158 amortization(c) 11 11 Unrealized loss on investments in auction rate securities(d) (4 ) (4 ) Reclassification of losses on investments in auction rate securities and other available for sale securities into earnings(e) 2 2 Other(f) (8 ) (8 ) Other comprehensive income, net of tax 88 6 94 Total Comprehensive Income $ 439 $ 4 $ 443 (a) Net of insignificant tax benefit for the three months ended June30, 2008. (b) Net of $1 million tax expense for the three months ended June30, 2008. (c) Net of $7 million tax expense for the three months ended June30, 2008. (d) Net of $3 million tax benefit for the three months ended June30, 2008. (e) Net of
22. Subsequent Events	22. Subsequent Events For information on subsequent events related to regulatory matters, commitments and contingencies and variable interest entities, see Notes 13, 14 and 20, respectively. Management has evaluated these Unaudited Consolidated Financial Statements and Notes for subsequent events up through August7, 2009, which is the date of filing of the Unaudited Consolidated Financial Statements with the SEC.

Document Information

Document Information
	6 Months Ended Jun. 30, 2009 USD / shares
Document Information [Text Block]
Document Type	10-Q
Amendment Flag	false
Amendment Description	N.A.
Document Period End Date	2009-06-30

Entity Information

Entity Information (USD $)
	6 Months Ended Jun. 30, 2009	Aug. 03, 2009	Jun. 30, 2008
Entity [Text Block]
Trading Symbol	DUK
Entity Registrant Name	Duke Energy CORP
Entity Central Index Key	0001326160
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		1,296,723,582
Entity Public Float			$21,946,000,000