10-Q

 

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)
x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended June 30, 2012 or
¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from              to

Commission file number	Exact name of registrants as specified in theircharters, addresses of principal executiveoffices,  telephone numbers and states of incorporation	IRS Employer Identification No.
1-32853	DUKE ENERGY CORPORATION 550 South Tryon Street Charlotte, NC 28202-1803 704-382-3853 State of Incorporation: Delaware	20-2777218
1-4928	DUKE ENERGY CAROLINAS, LLC 526 South Church Street Charlotte, NC 28202-1803 704-382-3853 State of Incorporation: North Carolina	56-0205520
1-1232	DUKE ENERGY OHIO, INC. 139 East Fourth Street Cincinnati, OH 45202 704-382-3853 State of Incorporation: Ohio	31-0240030
1-3543	DUKE ENERGY INDIANA, INC. 1000 East Main Street Plainfield, IN 46168 704-382-3853 State of Incorporation: Indiana	35-0594457

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Duke Energy Corporation (Duke Energy)	Yes x	No ¨	Duke Energy Ohio, Inc. (Duke Energy Ohio)	Yes x	No ¨
Energy Carolinas, LLC (Duke Energy Carolinas)	Yes x	No ¨	Duke Energy Indiana, Inc. (Duke Energy Indiana)	Yes x	No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Duke Energy	Yes x	No ¨	Duke Energy Ohio	Yes x	No ¨
Duke Energy Carolinas	Yes x	No ¨	Duke Energy Indiana	Yes x	No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Duke Energy	Large accelerated filer x	Accelerated filer ¨	Non-accelerated filer ¨	Smaller reporting company ¨
Duke Energy Carolinas	Large accelerated filer ¨	Accelerated filer ¨	Non-accelerated filer x	Smaller reporting company ¨
Duke Energy Ohio	Large accelerated filer ¨	Accelerated filer ¨	Non-accelerated filer x	Smaller reporting company ¨
Duke Energy Indiana	Large accelerated filer ¨	Accelerated filer ¨	Non-accelerated filer x	Smaller reporting company ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Duke Energy	Yes ¨	No x	Duke Energy Ohio	Yes ¨	No x
Duke Energy Carolinas	Yes ¨	No x	Duke Energy Indiana	Yes ¨	No x

Indicate the number of shares outstanding of each of the Issuer’s classes of common stock, as of the latest practicable date.

Outstanding as of August 3, 2012 Registrant	Description	Shares
Duke Energy	Common Stock, par value $0.001	704,125,200
Duke Energy Carolinas	All of the registrant’s limited liability company member interests are directly owned by Duke Energy.
Duke Energy Ohio	All of the registrant’s common stock is indirectly owned by Duke Energy.
Duke Energy Indiana	All of the registrant’s common stock is indirectly owned by Duke Energy.

This combined Form 10-Q is filed separately by four registrants: Duke Energy, Duke Energy Carolinas, Duke Energy Ohio and Duke Energy Indiana (collectively the Duke Energy Registrants). Information contained herein relating to any individual registrant is filed by such registrant solely on its own behalf. Each registrant makes no representation as to information relating exclusively to the other registrants.

Duke Energy Carolinas, Duke Energy Ohio and Duke Energy Indiana meet the conditions set forth in General Instructions H(1)(a) and (b) of Form 10-Q and are therefore filing this form with the reduced disclosure format specified in General Instructions H(2) of Form 10-Q.  

INDEX
FORM 10-Q FOR THE QUARTER ENDED JUNE 30,  2012
			Page
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements		4
	Duke Energy Corporation (Duke Energy)
		Unaudited Condensed Consolidated Statements of Operations	4
		Unaudited Condensed Consolidated Comprehensive Income	5
		Unaudited Condensed Consolidated Balance Sheets	6
		Unaudited Condensed Consolidated Statements of Cash Flows	8
		Unaudited Condensed Consolidated Statements of Equity	9
	Duke Energy Carolinas, LLC (Duke Energy Carolinas)
		Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income	10
		Unaudited Condensed Consolidated Balance Sheets	11
		Unaudited Condensed Consolidated Statements of Cash Flows	13
		Unaudited Condensed Consolidated Statements of Member’s Equity	14
	Duke Energy Ohio, Inc. (Duke Energy Ohio)
		Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income	15
		Unaudited Condensed Consolidated Balance Sheets	16
		Unaudited Condensed Consolidated Statements of Cash Flows	18
		Unaudited Condensed Consolidated Statements of Common Stockholder’s Equity	19
	Duke Energy Indiana, Inc. (Duke Energy Indiana)
		Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income	20
		Unaudited Condensed Consolidated Balance Sheets	21
		Unaudited Condensed Consolidated Statements of Cash Flows	23
		Unaudited Condensed Consolidated Statements of Common Stockholder’s Equity	24
	Combined Notes to Unaudited Condensed Consolidated Financial Statements for Duke Energy, Duke Energy Carolinas,
	Duke Energy Ohio and Duke Energy Indiana		25
2	Management’s Discussion and Analysis of Financial Condition and Results of Operations		76
3	Quantitative and Qualitative Disclosures About Market Risk		91
4	Controls and Procedures		92
PART II. OTHER INFORMATION
1	Legal Proceedings		93
1A.	Risk Factors		93
2	Unregistered Sales of Equity Securities and Use of Proceeds		93
5	Other Information		93
6	Exhibits		95
	Signatures		96

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

This document includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are based on management’s beliefs and assumptions. These forward-looking statements, which are intended to cover Duke Energy and the applicable Duke Energy Registrants, are identified by terms and phrases such as “anticipate,” “believe,” “intend,” “estimate,” “expect,” “continue,” “should,” “could,” “may,” “plan,” “project,” “predict,” “will,” “potential,” “forecast,” “target,” “guidance,” “outlook,” and similar expressions. Forward-looking statements involve risks and uncertainties that may cause actual results to be materially different from the results predicted. Factors that could cause actual results to differ materially from those indicated in any forward-looking statement include, but are not limited to:

·State, federal and foreign legislative and regulatory initiatives, including costs of compliance with existing and future environmental requirements, as well as rulings that affect cost and investment recovery or have an impact on rate structures;

·The ability to recover eligible costs and earn an adequate return on investment through the regulatory process;

·The scope of necessary repairs of the delamination of Crystal River Unit 3 Nuclear Plant could prove more extensive than is currently identified, such repairs could prove not to be feasible resulting in early retirement of the unit, the cost of repair and/or replacement power could exceed estimates and insurance coverage or may not be recoverable through the regulatory process;

·The ability to maintain relationships with customers, employees or suppliers post-merger;

·The ability to successfully integrate the Progress Energy businesses and realize cost savings and any other synergies expected from the merger;

·The risk that the credit ratings of the combined company or its subsidiaries may be different from what the companies expect;

·The impact of compliance with material restrictions of conditions related to the Progress Energy merger imposed by regulators could exceed our expectations;

·Costs and effects of legal and administrative proceedings, settlements, investigations and claims;

·Industrial, commercial and residential growth or decline in the respective Duke Energy Registrants’ service territories, customer base or customer usage patterns;

·Additional competition in electric markets and continued industry consolidation;

·Political and regulatory uncertainty in other countries in which Duke Energy conducts business;

·The influence of weather and other natural phenomena on each of the Duke Energy Registrants’ operations, including the economic, operational and other effects of storms, hurricanes, droughts and tornadoes;

·The ability to recover, in a timely manner, if at all, costs associated with future significant weather events through the regulatory process;

·The impact on the Duke Energy Registrants’ facilities and business from a terrorist attack;

·The inherent risks associated with the operation and potential construction of nuclear facilities, including environmental, health, safety, regulatory and financial risks;

·The timing and extent of changes in commodity prices, interest rates and foreign currency exchange rates;

·Unscheduled generation outages, unusual maintenance or repairs and electric transmission system constraints;

·The performance of electric generation facilities and of projects undertaken by Duke Energy’s non-regulated businesses;

·The results of financing efforts, including the Duke Energy Registrants’ ability to obtain financing on favorable terms, which can be affected by various factors, including the respective Duke Energy Registrants’ credit ratings and general economic conditions;

·Declines in the market prices of equity securities and resultant cash funding requirements for Duke Energy’s defined benefit pension plans and nuclear decommissioning trust funds;

·The level of creditworthiness of counterparties to Duke Energy Registrants’ transactions;

·Employee workforce factors, including the potential inability to attract and retain key personnel;

·Growth in opportunities for the respective Duke Energy Registrants’ business units, including the timing and success of efforts to develop domestic and international power and other projects;

·Construction and development risks associated with the completion of Duke Energy Registrants’ capital investment projects in existing and new generation facilities, including risks related to financing, obtaining and complying with terms of permits, meeting construction budgets and schedules, and satisfying operating and environmental performance standards, as well as the ability to recover costs from ratepayers in a timely manner or at all;

·The effect of accounting pronouncements issued periodically by accounting standard-setting bodies;

·The impact of potential goodwill impairments;

·The ability to successfully complete future merger, acquisition or divestiture plans.

In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than Duke Energy has described. The Duke Energy Registrants undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
DUKE ENERGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
			Three Months Ended				Six Months Ended
			June 30,				June 30,
(in millions, except per-share amounts)			2012		2011		2012		2011
Operating Revenues
	Regulated electric		$	2,628	$	2,576	$	5,129	$	5,149
	Non-regulated electric, natural gas, and other			868		864		1,826		1,719
	Regulated natural gas			81		94		252		329
	Total operating revenues			3,577		3,534		7,207		7,197
Operating Expenses
	Fuel used in electric generation and purchased power - regulated			849		834		1,626		1,646
	Fuel used in electric generation and purchased power - non-regulated			396		388		844		764
	Cost of natural gas and coal sold			42		63		144		214
	Operation, maintenance and other			862		959		1,608		1,839
	Depreciation and amortization			475		437		954		891
	Property and other taxes			171		169		355		355
	Impairment charges			―		9		402		9
		Total operating expenses		2,795		2,859		5,933		5,718
Gains on Sales of Other Assets and Other, net				4		4		7		14
Operating Income				786		679		1,281		1,493
Other Income and Expenses
	Equity in earnings of unconsolidated affiliates			40		48		85		80
	Impairments and gains on sales of unconsolidated affiliates			(1)		12		(6)		14
	Other income and expenses, net			70		97		159		214
		Total other income and expenses		109		157		238		308
Interest Expense				232		203		456		422
Income From Continuing Operations Before Income Taxes				663		633		1,063		1,379
Income Tax Expense from Continuing Operations				214		192		317		425
Income From Continuing Operations				449		441		746		954
(Loss) Income From Discontinued Operations, net of tax				(1)		―		1		―
Net Income				448		441		747		954
Less: Net Income Attributable to Noncontrolling Interests				4		6		8		8
Net Income Attributable to Duke Energy Corporation			$	444	$	435	$	739	$	946
Earnings Per Share - Basic and Diluted
	Income from continuing operations attributable to Duke Energy Corporation common shareholders
		Basic	$	0.99	$	0.98	$	1.65	$	2.13
		Diluted	$	0.99	$	0.98	$	1.65	$	2.13
	Income from discontinued operations attributable to Duke Energy Corporation common shareholders
		Basic	$	―	$	―	$	―	$	―
		Diluted	$	―	$	―	$	―	$	―
	Net Income attributable to Duke Energy Corporation common shareholders
		Basic	$	0.99	$	0.98	$	1.65	$	2.13
		Diluted	$	0.99	$	0.98	$	1.65	$	2.13
	Dividends declared per share		$	1.515	$	1.485	$	2.265	$	2.22
	Weighted-average shares outstanding
		Basic		446		444		446		444
		Diluted		446		444		446		444

DUKE ENERGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
		Three Months Ended				Six Months Ended
		June 30,				June 30,
(in millions)		2012		2011		2012		2011
Net income		$	448	$	441	$	747	$	954
Other comprehensive (loss) income, net of tax
	Foreign currency translation adjustments		(131)		65		(87)		96
	Pension and OPEB adjustments(a)		2		2		6		(7)
	Net unrealized loss on cash flow hedges(b)		(30)		(7)		(17)		(5)
	Reclassification into earnings from cash flow hedges(c)		3		1		2		2
	Unrealized gain on investments in auction rate securities(d)		6		1		6		4
	Unrealized gain on investments in available for sale securities(e)		2		―		3		―
	Reclassification into earnings from available for sale securities(f)		(2)		―		(3)		―
Other comprehensive (loss) income, net of tax			(150)		62		(90)		90
Comprehensive income			298		503		657		1,044
Less:  Comprehensive income attributable to Noncontrolling Interests			―		9		4		11
Comprehensive income attributable to Duke Energy Corporation		$	298	$	494	$	653	$	1,033
(a)	Net of $1 million tax expense and $3 million tax expense for the three and six months ended June 30, 2012 and insignificant tax expense and $3 tax benefit for the three and six months ended June 30, 2011.
(b)	Net of $14 million tax benefit and $9 million tax benefit for the three and six months ended June 30, 2012 and $3 million tax benefit and $2 million tax benefit for the three and six months ended June 30, 2011.
(c)	Net of $2 million tax benefit and insignificant tax expense for the three and six months ended June 30, 2012 and $1 million tax expense for the three and six months ended June 30, 2011, respectively.
(d)	Net of $2 million tax expense and $3 million tax expense for the three and six months ended June 30, 2012 and $2 million tax benefit and $1 million tax expense for the three and six months ended June 30, 2011.
(e)	Net of insignificant tax expense for the three and six months ended June 30, 2012.
(f)	Net of insignificant tax benefit for the three and six months ended June 30, 2012.

See Notes to Unaudited Condensed Consolidated Financial Statements

4

PART I

DUKE ENERGY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
		June 30,		December 31,
(in millions)		2012		2011
ASSETS
Current Assets
Cash and cash equivalents		$	1,526	$	2,110
Short-term investments			234		190
Receivables (net of allowance for doubtful accounts of $16 at June 30, 2012 and $35 at December 31, 2011)			610		784
Restricted receivables of variable interest entities (net of allowance for doubtful accounts of $43 at June 30, 2012 and $40 at December 31, 2011)			1,233		1,157
Inventory			1,762		1,588
Other			1,122		1,051
	Total current assets		6,487		6,880
Investments and Other Assets
Investments in equity method unconsolidated affiliates			450		460
Nuclear decommissioning trust funds			2,204		2,060
Goodwill			3,842		3,849
Intangibles, net			357		363
Notes receivable			72		62
Restricted other assets of variable interest entities			133		135
Other			1,894		2,231
	Total investments and other assets		8,952		9,160
Property, Plant and Equipment
Cost			61,458		60,377
Cost, variable interest entities			1,357		913
Accumulated depreciation and amortization			(19,101)		(18,709)
Generation facilities to be retired, net			73		80
	Net property, plant and equipment		43,787		42,661
Regulatory Assets and Deferred Debits
Regulatory assets			3,646		3,672
Other			159		153
	Total regulatory assets and deferred debits		3,805		3,825
Total Assets		$	63,031	$	62,526

See Notes to Unaudited Condensed Consolidated Financial Statements

5

PART I

DUKE ENERGY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS — (Continued)
(Unaudited)
		June 30,		December 31,
(in millions, except per-share amounts)		2012		2011
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable		$	1,160	$	1,433
Notes payable and commercial paper			793		154
Non-recourse notes payable of variable interest entities			269		273
Taxes accrued			359		431
Interest accrued			254		252
Current maturities of long-term debt			1,870		1,894
Other			1,434		1,091
	Total current liabilities		6,139		5,528
Long-term Debt			17,539		17,730
Non-recourse long-term debt of variable interest entities			915		949
Deferred Credits and Other Liabilities
Deferred income taxes			7,914		7,581
Investment tax credits			379		384
Accrued pension and other post-retirement benefit costs			829		856
Asset retirement obligations			1,999		1,936
Regulatory liabilities			2,981		2,919
Other			1,820		1,778
	Total deferred credits and other liabilities		15,922		15,454
Commitments and Contingencies
Equity
Common Stock, $0.001 par value, 2 billion shared authorized; 446 million and 444 million shares outstanding at June 30, 2012 and December 31, 2011, respectively			1		1
Additional paid-in capital			21,140		21,132
Retained earnings			1,598		1,873
Accumulated other comprehensive loss			(320)		(234)
	Total Duke Energy Corporation shareholders' equity		22,419		22,772
Noncontrolling interests			97		93
	Total equity		22,516		22,865
Total Liabilities and Equity		$	63,031	$	62,526

See Notes to Unaudited Condensed Consolidated Financial Statements

6

PART I

DUKE ENERGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
					Six Months Ended
					June 30,
(in millions)					2012		2011
CASH FLOWS FROM OPERATING ACTIVITIES
	Net income				$	747	$	954
	Adjustments to reconcile net income to net cash provided by operating activities:
			Depreciation and amortization (including amortization of nuclear fuel)			1,077		991
			Equity component of AFUDC			(116)		(123)
			Gains on sales of other assets			(7)		(27)
			Impairment of other long-lived assets			408		9
			Deferred income taxes			230		461
			Equity in earnings of unconsolidated affiliates			(85)		(80)
			Voluntary opportunity cost deferral			(101)		―
			Accrued pension and other post-retirement benefit costs			57		52
			(Increase) decrease in
				Net realized and unrealized mark-to-market and hedging transactions		(10)		13
				Receivables		61		166
				Inventory		(165)		(85)
				Other current assets		105		128
			Increase (decrease) in
				Accounts payable		(102)		(338)
				Taxes accrued		(67)		(99)
				Other current liabilities		34		(179)
			Other assets			22		81
			Other liabilities			(86)		(207)
				Net cash provided by operating activities		2,002		1,717
CASH FLOWS FROM INVESTING ACTIVITIES
	Capital expenditures					(2,252)		(1,938)
	Investment expenditures					(9)		(49)
	Acquisitions					(36)		(4)
	Purchases of available-for-sale securities					(1,240)		(1,266)
	Proceeds from sales and maturities of available-for-sale securities					1,155		1,281
	Net proceeds from the sales of other assets, and sales of and collections on notes receivable					23		109
	Change in restricted cash					(51)		24
	Other					19		5
				Net cash used in investing activities		(2,391)		(1,838)
CASH FLOWS FROM FINANCING ACTIVITIES
	Proceeds from the:
		Issuance of long-term debt				721		499
		Issuance of common stock related to employee benefit plans				14		10
	Payments for the redemption of long-term debt					(878)		(82)
	Notes payable and commercial paper					631		63
	Distributions to noncontrolling interests					(5)		(18)
	Dividends paid					(670)		(657)
	Other					(8)		(2)
				Net cash used in financing activities		(195)		(187)
	Net decrease in cash and cash equivalents					(584)		(308)
	Cash and cash equivalents at beginning of period					2,110		1,670
	Cash and cash equivalents at end of period				$	1,526	$	1,362
	Supplemental Disclosures:
	Significant non-cash transactions:
		Accrued capital expenditures			$	216	$	317
		Dividends declared but not paid			$	344	$	337
		Extinguishment of debt related to investment in Attiki Gas Supply, S. A.			$	66	$	―

See Notes to Unaudited Condensed Consolidated Financial Statements

7

PART I

DUKE ENERGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(Unaudited)
									Duke Energy Corporation Shareholders
									Accumulated Other Comprehensive Income (Loss)
											Net Gains				Pension and
		Common			Additional				Foreign		(Losses) on				OPEB Related		Common
		Stock	Common		Paid-in		Retained		Currency		Cash Flow				Adjustments		Stockholders'		Noncontrolling		Total
(in millions)		Shares	Stock		Capital		Earnings		Adjustments		Hedges		Other		to AOCI		Equity		Interests		Equity
Balance at December 31, 2010		443	$	1	$	21,023	$	1,496	$	97	$	(18)	$	(17)	$	(60)	$	22,522	$	131	$	22,653
	Net income	―		―		―		946		―		―		―		―		946		8		954
	Other comprehensive income (loss)	―		―		―		―		93		(3)		4		(7)		87		3		90
	Common stock issuances, including dividend reinvestment and employee benefits	1		―		22		―		―		―		―		―		22		―		22
	Common stock dividends	―		―		―		(994)		―		―		―		―		(994)		―		(994)
	Changes in noncontrolling interest in subsidiaries	―		―		―		―		―		―		―		―		―		(23)		(23)
Balance at June 30, 2011		444	$	1	$	21,045	$	1,448	$	190	$	(21)	$	(13)	$	(67)	$	22,583	$	119	$	22,702
Balance at December 31, 2011		445	$	1	$	21,132	$	1,873	$	(45)	$	(71)	$	(9)	$	(109)	$	22,772	$	93	$	22,865
	Net income	―		―		―		739		―		―		―		―		739		8		747
	Other comprehensive (loss) income	―		―		―		―		(83)		(15)		6		6		(86)		(4)		(90)
	Common stock issuances, including dividend reinvestment and employee benefits	1		―		8		―		―		―		―		―		8		―		8
	Common stock dividends	―		―		―		(1,014)		―		―		―		―		(1,014)		―		(1,014)
Balance at June 30, 2012		446	$	1	$	21,140	$	1,598	$	(128)	$	(86)	$	(3)	$	(103)	$	22,419	$	97	$	22,516

See Notes to Unaudited Condensed Consolidated Financial Statements

8

PART I

DUKE ENERGY CAROLINAS, LLC
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
			Three Months Ended				Six Months Ended
			June 30,				June 30,
(in millions)			2012		2011		2012		2011
Operating Revenues-Regulated Electric			$	1,616	$	1,607	$	3,117	$	3,159
Operating Expenses
	Fuel used in electric generation and purchased power			442		511		822		980
	Operation, maintenance and other			476		495		807		930
	Depreciation and amortization			226		190		454		391
	Property and other taxes			89		81		179		165
		Total operating expenses		1,233		1,277		2,262		2,466
Gains on Sales of Other Assets and Other, net				3		1		6		1
Operating Income				386		331		861		694
Other Income and Expenses, net				43		50		82		92
Interest Expense				93		82		190		171
Income Before Income Taxes				336		299		753		615
Income Tax Expense				125		106		276		217
Net Income				211		193		477		398
Other comprehensive income, net of tax
Reclassification into earnings from cash flow hedges(a)				2		1		2		1
Comprehensive Income			$	213	$	194	$	479	$	399
(a)	Net of $2 million tax expense for the three and six months ended June 30, 2012 and 2011.

See Notes to Unaudited Condensed Consolidated Financial Statements

9

PART I

DUKE ENERGY CAROLINAS, LLC
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
		June 30,		December 31,
(in millions)		2012		2011
ASSETS
Current Assets
Cash and cash equivalents		$	18	$	289
Receivables (net of allowance for doubtful accounts of $3 at June 30, 2012 and December 31, 2011)			351		1,187
Restricted receivables of variable interest entities (net of allowance for doubtful accounts of $6 at June 30, 2012 and December 31, 2011)			680		581
Inventory			1,024		917
Other			327		278
	Total current assets		2,400		3,252
Investments and Other Assets
Nuclear decommissioning trust funds			2,204		2,060
Other			971		968
	Total investments and other assets		3,175		3,028
Property, Plant and Equipment
Cost			33,505		32,840
Accumulated depreciation and amortization			(11,374)		(11,269)
Generation facilities to be retired, net			73		80
	Net property, plant and equipment		22,204		21,651
Regulatory Assets and Deferred Debits
Regulatory assets			1,891		1,894
Other			68		71
	Total regulatory assets and deferred debits		1,959		1,965
Total Assets		$	29,738	$	29,896

See Notes to Unaudited Condensed Consolidated Financial Statements

10

PART I

DUKE ENERGY CAROLINAS, LLC
CONDENSED CONSOLIDATED BALANCE SHEETS — (Continued)
(Unaudited)
		June 30,		December 31,
(in millions)		2012		2011
LIABILITIES AND MEMBER'S EQUITY
Current Liabilities
Accounts payable		$	448	$	793
Taxes accrued			109		126
Interest accrued			95		115
Current maturities of long-term debt			427		1,178
Other			481		398
	Total current liabilities		1,560		2,610
Long-term Debt			7,795		7,796
Non-recourse long-term debt of variable interest entities			300		300
Deferred Credits and Other Liabilities
Deferred income taxes			4,891		4,555
Investment tax credits			230		233
Accrued pension and other post-retirement benefit costs			232		248
Asset retirement obligations			1,904		1,846
Regulatory liabilities			1,993		1,928
Other			900		926
	Total deferred credits and other liabilities		10,150		9,736
Commitments and Contingencies
Member's Equity
Member's Equity			9,950		9,473
Accumulated other comprehensive loss			(17)		(19)
	Total member's equity		9,933		9,454
Total Liabilities and Member's Equity		$	29,738	$	29,896

See Notes to Unaudited Condensed Consolidated Financial Statements

11

PART I

DUKE ENERGY CAROLINAS, LLC
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
					Six Months Ended
					June 30,
(in millions)					2012		2011
CASH FLOWS FROM OPERATING ACTIVITIES
	Net income				$	477	$	398
	Adjustments to reconcile net income to net cash provided by operating activities:
			Depreciation and amortization (including amortization of nuclear fuel)			569		486
			Equity component of AFUDC			(74)		(82)
			Gains on sales of other assets and other, net			(6)		(1)
			Deferred income taxes			275		311
			Voluntary opportunity cost deferral			(101)		―
			Accrued pension and other post-retirement benefit costs			21		17
			(Increase) decrease in
				Net realized and unrealized mark-to-market and hedging transactions		1		2
				Receivables		53		143
				Inventory		(99)		(43)
				Other current assets		8		141
			Increase (decrease) in
				Accounts payable		(244)		(322)
				Taxes accrued		(17)		(29)
				Other current liabilities		76		(57)
			Other assets			(40)		(18)
			Other liabilities			(74)		(143)
				Net cash provided by operating activities		825		803
CASH FLOWS FROM INVESTING ACTIVITIES
	Capital expenditures					(1,006)		(1,070)
	Purchases of available-for-sale securities					(607)		(767)
	Proceeds from sales and maturities of available-for-sale securities					591		743
	Change in restricted cash					―		2
	Notes due from affiliate					679		(211)
	Other					(1)		(6)
				Net cash used in investing activities		(344)		(1,309)
CASH FLOWS FROM FINANCING ACTIVITIES
	Proceeds from the issuance of long-term debt					―		499
	Payments for the redemption of long-term debt					(751)		(1)
	Other					(1)		(2)
				Net cash (used in) provided by financing activities		(752)		496
	Net decrease in cash and cash equivalents					(271)		(10)
	Cash and cash equivalents at beginning of period					289		153
	Cash and cash equivalents at end of period				$	18	$	143
	Supplemental Disclosures:
	Significant non-cash transactions:
		Accrued capital expenditures			$	104	$	140

See Notes to Unaudited Condensed Consolidated Financial Statements

12

PART I

DUKE ENERGY CAROLINAS, LLC
CONDENSED CONSOLIDATED STATEMENTS OF MEMBER’S EQUITY
(Unaudited)
				Accumulated
				Other Comprehensive Income
				(Loss)
				Net  Gains
				(Losses) on
		Member's		Cash Flow
(in millions)		Equity		Hedges		Other		Total
Balance at December 31, 2010		$	8,938	$	(20)	$	(2)	$	8,916
	Net income		398		―		―		398
	Other comprehensive income				1				1
Balance at June 30, 2011		$	9,336	$	(19)	$	(2)	$	9,315
Balance at December 31, 2011		$	9,473	$	(17)	$	(2)	$	9,454
	Net income		477		―		―		477
	Other comprehensive income				2				2
Balance at June 30, 2012		$	9,950	$	(15)	$	(2)	$	9,933

See Notes to Unaudited Condensed Consolidated Financial Statements

13

PART I

DUKE ENERGY OHIO, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
			Three Months Ended				Six Months Ended
			June 30,				June 30,
(in millions)			2012		2011		2012		2011
Operating Revenues
	Regulated electric		$	336	$	361	$	660	$	733
	Non-regulated electric and other			299		239		716		510
	Regulated natural gas			82		94		253		330
		Total operating revenues		717		694		1,629		1,573
Operating Expenses
	Fuel used in electric generation and purchased power - regulated			120		91		234		188
	Fuel used in electric generation and purchased power - non-regulated			176		147		415		311
	Cost of natural gas			12		22		87		141
	Operation, maintenance and other			175		215		371		420
	Depreciation and amortization			80		88		163		176
	Property and other taxes			60		63		128		136
	Impairment charges			―		9		―		9
		Total operating expenses		623		635		1,398		1,381
Gains on Sales of Other Assets and Other, net				1		―		2		2
Operating Income				95		59		233		194
Other Income and Expenses, net				4		4		8		9
Interest Expense				25		27		49		51
Income Before Income Taxes				74		36		192		152
Income Tax Expense				29		3		73		46
Net Income				45		33		119		106
Other Comprehensive Income, net of tax
	Pension and OPEB adjustments(a)			―		1		1		1
Comprehensive Income			$	45	$	34	$	120	$	107
(a)	Net of insignificant tax expense for the three and six months ended June 30, 2012, and insignificant tax expense and $1 million tax expense for the three and six months ended June 30, 2011.

See Notes to Unaudited Condensed Consolidated Financial Statements

14

PART I

DUKE ENERGY OHIO, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
		June 30,		December 31,
(in millions)		2012		2011
ASSETS
Current Assets
Cash and cash equivalents		$	22	$	99
Receivables (net of allowance for doubtful accounts of $1 at June 30, 2012 and $16 at December 31, 2011)			760		681
Inventory			262		243
Other			258		220
	Total current assets		1,302		1,243
Investments and Other Assets
Goodwill			921		921
Intangibles, net			136		143
Other			63		58
	Total investments and other assets		1,120		1,122
Property, Plant and Equipment
Cost			10,612		10,632
Accumulated depreciation and amortization			(2,600)		(2,594)
	Net property, plant and equipment		8,012		8,038
Regulatory Assets and Deferred Debits
Regulatory assets			529		520
Other			15		16
	Total regulatory assets and deferred debits		544		536
Total Assets		$	10,978	$	10,939

See Notes to Unaudited Condensed Consolidated Financial Statements

15

PART I

DUKE ENERGY OHIO, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS — (Continued)
(Unaudited)
		June 30,		December 31,
(in millions, except share and per-share amounts)		2012		2011
LIABILITIES AND COMMON STOCKHOLDER'S EQUITY
Current Liabilities
Accounts payable		$	363	$	402
Taxes accrued			158		180
Interest accrued			23		23
Current maturities of long-term debt			757		507
Other			117		122
	Total current liabilities		1,418		1,234
Long-term Debt			1,794		2,048
Deferred Credits and Other Liabilities
Deferred income taxes			1,882		1,853
Investment tax credits			7		8
Accrued pension and other post-retirement benefit costs			142		147
Asset retirement obligations			28		27
Regulatory liabilities			261		273
Other			187		182
	Total deferred credits and other liabilities		2,507		2,490
Commitments and Contingencies
Common Stockholder's Equity
Common Stock, $8.50 par value, 120,000,000 shares authorized; 89,663,086  shares outstanding at June 30, 2012 and December 31, 2011			762		762
Additional paid-in capital			5,057		5,085
Accumulated deficit			(533)		(652)
Accumulated other comprehensive loss			(27)		(28)
	Total common stockholder's equity		5,259		5,167
Total Liabilities and Common Stockholder's Equity		$	10,978	$	10,939

See Notes to Unaudited Condensed Consolidated Financial Statements

16

PART I

DUKE ENERGY OHIO, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
						Six Months Ended
						June 30,
(in millions)						2012		2011
CASH FLOWS FROM OPERATING ACTIVITIES
	Net income				$	119	$	106
	Adjustments to reconcile net income to net cash provided by operating activities:
			Depreciation and amortization			165		177
			Gains on sales of other assets and other, net			(2)		(2)
			Impairment charges			―		9
			Deferred income taxes			69		85
			Accrued pension and other post-retirement benefit costs			6		6
			(Increase) decrease in
				Net realized and unrealized mark-to-market and hedging transactions		(11)		12
				Receivables		51		124
				Inventory		(20)		(4)
				Other current assets		29		15
			Increase (decrease) in
				Accounts payable		(33)		(79)
				Taxes accrued		(22)		(55)
				Other current liabilities		(14)		(6)
			Other assets			(11)		23
			Other liabilities			(75)		(45)
				Net cash provided by operating activities		251		366
CASH FLOWS FROM INVESTING ACTIVITIES
	Capital expenditures					(252)		(230)
	Net proceeds from the sales of other assets					82		―
	Notes due from affiliate					(130)		86
	Change in restricted cash					(25)		4
	Other					1		―
				Net cash used in investing activities		(324)		(140)
CASH FLOWS FROM FINANCING ACTIVITIES
	Payments for the redemption of long-term debt					(4)		(4)
	Dividends to parent					―		(285)
				Net cash used in financing activities		(4)		(289)
	Net decrease in cash and cash equivalents					(77)		(63)
	Cash and cash equivalents at beginning of period					99		228
	Cash and cash equivalents at end of period				$	22	$	165
	Supplemental Disclosures:
	Significant non-cash transactions:
		Accrued capital expenditures			$	37	$	25
		Transfer of Vermillion Generating Station to Duke Energy Indiana			$	28	$	―

See Notes to Unaudited Condensed Consolidated Financial Statements

17

PART I

DUKE ENERGY OHIO, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMMON STOCKHOLDER’S EQUITY
(Unaudited)
								Accumulated Other
								Comprehensive Income (Loss)
				Additional		Retained		Pension and
		Common		Paid-in		Earnings		OPEB
(in millions)		Stock		Capital		(Deficit)		Adjustments		Total
Balance at December 31, 2010		$	762	$	5,570	$	(846)	$	(22)	$	5,464
	Net income		―		―		106		―		106
	Other comprehensive income								1		1
	Dividend to parent		―		(285)		―		―		(285)
Balance at June 30, 2011		$	762	$	5,285	$	(740)	$	(21)	$	5,286
Balance at December 31, 2011		$	762	$	5,085	$	(652)	$	(28)	$	5,167
	Net income		―		―		119		―		119
	Other comprehensive income		―		―		―		1		1
	Transfer of Vermillion Generating Station to Duke Energy Indiana		―		(28)		―		―		(28)
Balance at June 30, 2012		$	762	$	5,057	$	(533)	$	(27)	$	5,259

See Notes to Unaudited Condensed Consolidated Financial Statements

18

PART I

DUKE ENERGY INDIANA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
			Three Months Ended				Six Months Ended
			June 30,				June 30,
(in millions)			2012		2011		2012		2011
Operating Revenues-Regulated Electric			$	685	$	620	$	1,373	$	1,279
Operating Expenses
	Fuel used in electric generation and purchased power			287		232		570		478
	Operation, maintenance and other			151		163		311		324
	Depreciation and amortization			96		97		192		197
	Property and other taxes			17		19		38		41
	Impairment charges			―		―		400		―
		Total operating expenses		551		511		1,511		1,040
Operating Income (Loss)				134		109		(138)		239
Other Income and Expenses, net				19		21		42		44
Interest Expense				36		34		70		70
Income (Loss) Before Income Taxes				117		96		(166)		213
Income Tax Expense (Benefit)				40		28		(76)		69
Net Income (Loss)				77		68		(90)		144
Other Comprehensive Income, net of tax
	Reclassification into earnings from cash flow hedges(a)			―		―		(1)		―
Comprehensive Income (Loss)			$	77	$	68	$	(91)	$	144
(a)	Net of insignificant tax benefit for the three and six months ended June 30, 2012.

See Notes to Unaudited Condensed Consolidated Financial Statements

19

PART I

DUKE ENERGY INDIANA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
		June 30,		December 31,
(in millions)		2012		2011
ASSETS
Current Assets
Cash and cash equivalents		$	19	$	16
Receivables (net of allowance for doubtful accounts of $1 at June 30, 2012 and December 31, 2011)			190		198
Inventory			358		330
Other			107		135
	Total current assets		674		679
Investments and Other Assets
Intangibles, net			44		50
Other			111		113
	Total investments and other assets		155		163
Property, Plant and Equipment
Cost			11,880		11,791
Accumulated depreciation and amortization			(3,575)		(3,393)
	Net property, plant and equipment		8,305		8,398
Regulatory Assets and Deferred Debits
Regulatory assets			781		798
Other			24		24
	Total regulatory assets and deferred debits		805		822
Total Assets		$	9,939	$	10,062

See Notes to Unaudited Condensed Consolidated Financial Statements

20

PART I

DUKE ENERGY INDIANA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS — (Continued)
(Unaudited)
		June 30,		December 31,
(in millions, except share and per-share amounts)		2012		2011
LIABILITIES AND COMMON STOCKHOLDER'S EQUITY
Current Liabilities
Accounts payable		$	209	$	273
Notes payable			113		300
Taxes accrued			50		74
Interest accrued			55		50
Current maturities of long-term debt			5		6
Other			132		93
	Total current liabilities		564		796
Long-term Debt			3,702		3,453
Deferred Credits and Other Liabilities
Deferred income taxes			835		927
Investment tax credits			142		143
Accrued pension and other post-retirement benefit costs			154		161
Asset retirement obligations			44		43
Regulatory liabilities			695		683
Other			134		122
	Total deferred credits and other liabilities		2,004		2,079
Commitments and Contingencies
Common Stockholder's Equity
Common Stock, no par; $0.01 stated value, 60,000,000 shares authorized;  53,913,701 shares outstanding at June 30, 2012  and December 31, 2011			1		1
Additional paid-in capital			1,384		1,358
Retained earnings			2,278		2,368
Accumulated other comprehensive income			6		7
	Total common stockholder's equity		3,669		3,734
Total Liabilities and Common Stockholder's Equity		$	9,939	$	10,062

See Notes to Unaudited Condensed Consolidated Financial Statements

21

PART I

DUKE ENERGY INDIANA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
					Six Months Ended
					June 30,
(in millions)					2012		2011
CASH FLOWS FROM OPERATING ACTIVITIES
	Net (loss) income				$	(90)	$	144
	Adjustments to reconcile net (loss) income to net cash provided by operating activities:
			Depreciation and amortization			195		200
			Equity component of AFUDC			(39)		(39)
			Impairment charges			400		―
			Deferred income taxes and investment tax credit amortization			(73)		39
			Accrued pension and other post-retirement benefit costs			8		11
			(Increase) decrease in
				Receivables		8		89
				Inventory		(28)		(31)
				Other current assets		19		6
			Increase (decrease) in
				Accounts payable		―		(9)
				Taxes accrued		(25)		―
				Other current liabilities		17		(4)
			Other assets			26		15
			Other liabilities			(35)		(27)
				Net cash provided by operating activities		383		394
CASH FLOWS FROM INVESTING ACTIVITIES
	Capital expenditures					(439)		(512)
	Purchases of available-for-sale securities					(8)		(2)
	Proceeds from sales and maturities of available-for-sale securities					10		1
	Notes due from affiliate					―		85
	Change in restricted cash					―		4
	Other					(2)		(3)
				Net cash used in investing activities		(439)		(427)
CASH FLOWS FROM FINANCING ACTIVITIES
	Proceeds from the issuance of long-term debt					250		―
	Payments for the redemption of long-term debt					(2)		(2)
	Notes payable to affiliate					(187)		―
	Other					(2)		―
				Net cash provided by (used in) financing activities		59		(2)
	Net increase (decrease) in cash and cash equivalents					3		(35)
	Cash and cash equivalents at beginning of period					16		54
	Cash and cash equivalents at end of period				$	19	$	19
	Supplemental Disclosures:
	Significant non-cash transactions:
		Accrued capital expenditures			$	46	$	143
		Transfer of Vermillion Generating Station from Duke Energy Ohio			$	26	$	―

See Notes to Unaudited Condensed Consolidated Financial Statements

22

PART I

DUKE ENERGY INDIANA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMMON STOCKHOLDER’S EQUITY
(Unaudited)
								Accumulated
								Other Comprehensive
								Income (Loss)
								Net Gains
				Additional				(Losses) on
		Common		Paid-in		Retained		Cash Flow
(in millions)		Stock		Capital		Earnings		Hedges		Total
Balance at December 31, 2010		$	1	$	1,358	$	2,200	$	8	$	3,567
	Net income		―		―		144		―		144
Balance at June 30, 2011		$	1	$	1,358	$	2,344	$	8	$	3,711
Balance at December 31, 2011		$	1	$	1,358	$	2,368	$	7	$	3,734
	Net loss		―		―		(90)		―		(90)
	Other comprehensive loss		―		―		―		(1)		(1)
	Transfer of Vermillion Generating Station from Duke Energy Ohio		―		26		―		―		26
Balance at June 30, 2012		$	1	$	1,384	$	2,278	$	6	$	3,669

See Notes to Unaudited Condensed Consolidated Financial Statements

23

PART I

Index to Combined Notes To Unaudited Condensed Consolidated Financial Statements

The unaudited notes to the condensed consolidated financial statements that follow are a combined presentation. The following

list indicates the registrants to which the footnotes apply:

Applicable Notes

Registrant

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

Duke Energy Corporation

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

Duke Energy Carolinas,  LLC

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

Duke Energy Ohio, Inc.

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

Duke Energy Indiana, Inc.

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

1. Organization and Basis of Presentation

Organization. Duke Energy Corporation (collectively with its subsidiaries, Duke Energy) is an energy company headquartered in Charlotte, North Carolina. Duke Energy operates in the United States (U.S.) primarily through its direct and indirect wholly owned subsidiaries, Duke Energy Carolinas, LLC (Duke Energy Carolinas), Duke Energy Ohio, Inc. (Duke Energy Ohio), which includes Duke Energy Kentucky, Inc. (Duke Energy Kentucky), and Duke Energy Indiana, Inc. (Duke Energy Indiana), as well as in Latin America through International Energy. When discussing Duke Energy’s condensed consolidated financial information, it necessarily includes the results of its three separate subsidiary registrants, Duke Energy Carolinas, Duke Energy Ohio and Duke Energy Indiana (collectively referred to as the Subsidiary Registrants), which, along with Duke Energy, are collectively referred to as the Duke Energy Registrants. The information in these combined notes relates to each of the Duke Energy Registrants as noted in the Index to the Combined Notes. However, none of the registrants makes any representation as to information related solely to Duke Energy or the subsidiaries of Duke Energy other than itself. As discussed further in Note 3, Duke Energy operates in three reportable business segments: U.S. Franchised Electric and Gas, Commercial Power and International Energy. The remainder of Duke Energy’s operations is presented as Other.

These Unaudited Condensed Consolidated Financial Statements include, after eliminating intercompany transactions and balances, the accounts of the Duke Energy Registrants and all majority-owned subsidiaries where the respective Duke Energy Registrants have control and those variable interest entities (VIEs) where the respective Duke Energy Registrants are the primary beneficiary. These Unaudited Condensed Consolidated Financial Statements also reflect Duke Energy Carolinas’ approximate 19.25% proportionate share of the Catawba Nuclear Station, as well as Duke Energy Ohio’s proportionate share of certain generation and transmission facilities in Ohio, Indiana and Kentucky and Duke Energy Indiana’s proportionate share of certain generation and transmission facilities. In January 2012, Duke Energy Ohio completed the sale of its 75% ownership of the Vermillion Generating Station; upon the close, Duke Energy Indiana purchased a 62.5% interest in the station. See Note 2 for further discussion.

Duke Energy Carolinas, a wholly owned subsidiary of Duke Energy, is an electric utility company that generates, transmits, distributes and sells electricity in North Carolina and South Carolina. Duke Energy Carolinas is subject to the regulatory provisions of the North Carolina Utilities Commission (NCUC), the Public Service Commission of South Carolina (PSCSC), the U.S. Nuclear Regulatory Commission (NRC) and the Federal Energy Regulatory Commission (FERC). Substantially all of Duke Energy Carolinas’ operations are regulated and qualify for regulatory accounting treatment. As discussed further in Note 3, Duke Energy Carolinas’ operations include one reportable business segment, Franchised Electric.

Duke Energy Ohio is an indirect wholly owned subsidiary of Duke Energy. Duke Energy Ohio is a combination electric and gas public utility that provides service in the southwestern portion of Ohio and in northern Kentucky through its wholly owned subsidiary Duke Energy Kentucky, as well as electric generation in parts of Ohio, Illinois and Pennsylvania. Duke Energy Ohio’s principal lines of business include generation, transmission and distribution of electricity, the sale of and/or transportation of natural gas, and energy marketing. Duke Energy Ohio conducts competitive auctions for retail electricity supply in Ohio whereby the energy price is recovered from retail customers. Duke Energy Kentucky’s principal lines of business include generation, transmission and distribution of electricity, as well as the sale of and/or transportation of natural gas. Duke Energy Ohio is subject to the regulatory provisions of the Public Utilities Commission of Ohio (PUCO), the Kentucky Public Service Commission (KPSC) and the FERC. Duke Energy Ohio applies regulatory accounting treatment to substantially all of the operations of its Franchised Electric and Gas operating segment. Through November 2011, Duke Energy Ohio applied regulatory accounting treatment to certain rate riders associated with retail generation of its Commercial Power operating segment. See Note 3 for information about business segments.

Duke Energy Indiana is an indirect wholly owned subsidiary of Duke Energy. Duke Energy Indiana is an electric utility that provides service in north central, central, and southern Indiana. Its primary line of business is generation, transmission and distribution of electricity. Duke Energy Indiana is subject to the regulatory provisions of the Indiana Utility Regulatory Commission (IURC) and the FERC. The substantial majority of Duke Energy Indiana’s operations are regulated and qualify for regulatory accounting treatment. As discussed further in Note 3, Duke Energy Indiana’s operations include one reportable business segment, Franchised Electric.

See Note 2 for information regarding Duke Energy’s merger with Progress Energy, Inc. (Progress Energy) that closed on July 2, 2012. For the periods presented, Duke Energy’s condensed consolidated financial information does not include the results of Progress Energy and its registrants. Also, the Duke Energy Registrants, as defined above, does not include Progress Energy, Inc., Progress Energy Carolinas or Progress Energy Florida, unless otherwise noted.

Basis of Presentation. These Unaudited Condensed Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles (GAAP) in the U.S. for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, these Unaudited Condensed 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 Condensed Consolidated Financial Statements and Notes do not include all of the

See Notes to Unaudited Condensed Consolidated Financial Statements

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DUKE ENERGY INDIANA, INC.

Combined Notes To Unaudited Condensed Consolidated Financial Statements

information and notes required by GAAP in the U.S. for annual financial statements, the Unaudited Condensed Consolidated Financial Statements and other information included in this quarterly report should be read in conjunction with the respective Consolidated Financial Statements and Notes in the Duke Energy Registrants combined Form 10-K for the year ended December 31, 2011.

These Unaudited Condensed Consolidated Financial Statements reflect all normal recurring adjustments that are, in the opinion of the respective companies’ management, necessary to fairly present the financial position and results of operations of each Duke Energy Registrant. Amounts reported in Duke Energy’s interim Unaudited Condensed Consolidated Statements of Operations and each of the Subsidiary Registrants’ interim Unaudited Condensed Consolidated Statements of Income and Comprehensive Income 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.

Duke Energy Ohio and Duke Energy Indiana sell power to and purchase power from PJM Interconnection, LLC (PJM) and Midwest Independent Transmission System Operator, Inc. (MISO), respectively. Duke Energy Ohio and Duke Energy Indiana account for these transactions on a net hourly basis as the transactions are settled on a net hourly basis.

Use of Estimates. To conform to GAAP in the U.S., management makes estimates and assumptions that affect the amounts reported in the Unaudited Condensed Consolidated Financial Statements and Notes. Although these estimates are based on management’s best available information at the time, actual results could differ.

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 applying average revenue per kilowatt-hour or per thousand cubic feet (Mcf) for all customer classes to the number of estimated kilowatt-hours or Mcfs delivered but not billed. Unbilled wholesale energy revenues are calculated by applying the contractual rate per megawatt-hour (MWh) to the number of estimated MWh delivered but not yet billed. Unbilled wholesale demand revenues are calculated by applying the contractual rate per megawatt (MW) to the MW volume delivered but not yet billed. The amount of unbilled revenues can vary significantly from period to period as a result of numerous factors, including seasonality, weather, customer usage patterns and customer mix.  

Duke Energy, Duke Energy Carolinas and Duke Energy Ohio had unbilled revenues within Restricted Receivables of Variable Interest Entities and Receivables on their respective Condensed Consolidated Balance Sheets as follows:

(in millions)	June 30, 2012		December 31, 2011
Duke Energy	$	769	$	674
Duke Energy Carolinas	$	335	$	293
Duke Energy Ohio	$	51	$	50
Duke Energy Indiana	$	8	$	2

Additionally, Duke Energy Ohio and Duke Energy Indiana sell, on a revolving basis, nearly all of their retail and wholesale accounts receivable to Cinergy Receivables Company, LLC (CRC). These transfers meet sales/derecognition criteria and therefore, Duke Energy Ohio and Duke Energy Indiana, account for the transfers of receivables to Cinergy Receivables as sales, and accordingly the receivables sold are not reflected on the Condensed Consolidated Balance Sheets of Duke Energy Ohio and Duke Energy Indiana. Receivables for unbilled revenues related to retail and wholesale accounts receivable at Duke Energy Ohio and Duke Energy Indiana included in the sales of accounts receivable to CRC were as follows:

(in millions)		June 30, 2012		December 31, 2011
Duke Energy Ohio		$	80	$	89
Duke Energy Indiana		$	140	$	115
	See Note 11 for additional information.

2. Acquisitions and Sales of Other Assets

Acquisitions.

The Duke Energy Registrants consolidate assets and liabilities from acquisitions as of the purchase date, and include earnings from acquisitions in consolidated earnings after the purchase date.

Merger with Progress Energy

Description of Transaction

On July 2, 2012, Duke Energy completed the merger contemplated by the Agreement and Plan of Merger (Merger Agreement), among Diamond Acquisition Corporation, a North Carolina corporation and Duke Energy’s wholly owned subsidiary (Merger Sub) and Progress Energy, a North Carolina corporation engaged in the regulated utility business of generation, transmission and distribution and sale of electricity in portions of North Carolina, South Carolina and Florida. As a result of the merger, Merger Sub was merged into Progress Energy and Progress Energy became a wholly owned subsidiary of Duke Energy.

The merger between Duke Energy and Progress Energy provides increased scale and diversity with potentially enhanced access to capital over the long-term and a greater ability to undertake the significant construction programs necessary to respond to increasing environmental regulation, plant retirements and customer demand growth. Duke Energy’s business risk profile is expected to improve over-time due to the increased proportion of the business that is regulated. Additionally, cost savings, efficiencies and other benefits are expected from the combined operations. 

Immediately preceding the merger, Duke Energy completed a one-for-three reverse stock split with respect to the issued and outstanding shares of Duke Energy common stock. The shareholders of Duke Energy approved the reverse stock split at Duke Energy’s special meeting of shareholders

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Combined Notes To Unaudited Condensed Consolidated Financial Statements - (Continued)

held on August 23, 2011. All share and per share amounts presented throughout these financial statements reflect the impact of the one-for-three reverse stock split.

Progress Energy’s shareholders received 0.87083 shares of Duke Energy common stock in exchange for each share of Progress Energy common stock outstanding as of July 2, 2012. Generally, all outstanding Progress Energy equity-based compensation awards were converted into Duke Energy equity-based compensation awards using the same ratio. The merger was structured as a tax-free exchange of shares.

Merger Related Regulatory Matters

Federal Energy Regulatory Commission. On June 8, 2012, the FERC conditionally approved the merger including Duke Energy and Progress Energy’s revised market power mitigation plan, the Joint Dispatch Agreement (JDA) and the joint Open Access Transmission Tariff (OATT). The revised market power mitigation plan provides for the construction of seven transmission projects (Long-term FERC Mitigation) and interim firm power sale agreements during the construction of the transmission projects (Interim FERC Mitigation). The Long-term FERC Mitigation is estimated to cost approximately $110 million.  The Long-term FERC Mitigation plan will increase power imported into the Duke Energy Carolinas and Progress Energy Carolinas service areas and enhance competitive power supply options in the service areas. The construction of these projects will occur over the next two to three years. In conjunction with the Interim FERC Mitigation plan, Duke Energy Carolinas and Progress Energy Carolinas entered into power sale agreements that were effective with the consummation of the merger. These agreements, or similar power sale agreements, will be in place until the Long-term FERC Mitigation is operational. The agreements are for around-the-clock delivery of power during the winter and summer in quantities that vary by season and by peak period. The following table summarizes the amount of megawatts per hour contracted to be sold under the Interim FERC Mitigation agreements.

Megawatts per hour	Duke Energy Carolinas	Progress Energy Carolinas	Duke Energy
Summer off-peak	300	500	800
Summer on-peak	150	325	475
Winter off-peak	225	―	225
Winter on-peak	25	―	25

The FERC order requires an independent party to monitor whether the power sale agreements remain in effect during construction of the transmission projects and provide quarterly reports to the FERC regarding the status of construction of the transmission projects.

·On June 25, 2012, Duke Energy and Progress Energy accepted the conditions imposed by the FERC.

·On July 10, 2012, certain intervenors requested a rehearing seeking to overturn the June 8, 2012 order by the FERC.

North Carolina Utilities Commission and Public Service Commission of South Carolina. In September 2011, Duke Energy and Progress Energy reached settlements with the Public Staff of the North Carolina Utilities Commission (NC Public Staff) and the South Carolina Office of Regulatory Staff (ORS) and certain other interested parties in connection with the regulatory proceedings related to the merger, the JDA and the OATT that were pending before the NCUC and PSCSC. These settlements were updated in May 2012 to reflect the results of ongoing merger related applications pending before the FERC. As part of these settlements and the application for approval of the merger by the NCUC and PSCSC, Duke Energy Carolinas and Progress Energy Carolinas agreed to the conditions and obligations listed below.

·Guarantee of $650 million in system fuel and fuel-related savings over 60 to 78 months for North Carolina and South Carolina retail customers. The savings are expected to be achieved through coal blending, coal commodity and transportation savings, gas transportation savings, and the joint dispatch of Duke Energy Carolinas and Progress Energy Carolinas generation fleets.

·Duke Energy Carolinas and Progress Energy Carolinas will not seek recovery from retail customers for the cost of the Long-term FERC Mitigation for five years following merger consummation. After five years, Duke Energy Carolinas and Progress Energy Carolinas may seek to recover the costs of the Long-term FERC Mitigation, but must show that the projects are needed to provide adequate and reliable retail service regardless of the merger.

·A $65 million rate reduction over the term of the Interim FERC Mitigation to reflect the cost of capacity not available to Duke Energy Carolinas and Progress Energy Carolinas retail customers during the Interim FERC Mitigation. The rate reduction will be achieved through a rider and will be apportioned between Duke Energy Carolinas and Progress Energy Carolinas retail customers.

·Duke Energy Carolinas and Progress Energy Carolinas will not seek recovery from retail customers for any revenue shortfalls or fuel-related costs associated with the Interim FERC Mitigation. The Interim FERC Mitigation agreements were in a loss position for Duke Energy as of the date of the merger consummation.

·Duke Energy Carolinas and Progress Energy Carolinas will not seek recovery from retail customers for any of their allocable share of merger related severance costs.

·Duke Energy Carolinas and Progress Energy Carolinas will provide community support through charitable contributions for four years, workforce development, low income energy assistance, and green energy assistance at a total cost of approximately $100 million, which cannot be recovered from retail customers.

·Duke Energy Carolinas and Progress Energy Carolinas will abide by revised North Carolina Regulatory Conditions and Code of Conduct governing their operations.

On June 29, 2012, the NCUC approved the merger application and the JDA application with conditions that were reflective of the settlement agreements described above. On July 2, 2012, the PSCSC approved the JDA application subject to Duke Energy Carolinas and Progress Energy Carolinas providing their South Carolina retail customers pro rata benefits equivalent to those approved by the NCUC in its merger approval order.

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Combined Notes To Unaudited Condensed Consolidated Financial Statements - (Continued)

On July 6, 2012, the NCUC issued an order initiating investigation and scheduling hearings on the Duke Energy board of directors’ decision on July 2, 2012, to replace William D. Johnson with James E. Rogers as President and CEO of Duke Energy subsequent to the merger close, as well as other related matters. See Note 4 for further information.

Kentucky Public Service Commission. On June 24, 2011, Duke Energy and Progress Energy filed a settlement agreement with the Kentucky Attorney General. On August 2, 2011, the KPSC issued an order conditionally approving the merger and required Duke Energy and Progress Energy to accept all conditions contained in the order. Duke Energy and Progress Energy requested and were granted rehearing on the limited issue of the wording of one condition relating to the composition of Duke Energy’s post-merger board of directors. On October 28, 2011, the KPSC issued its order approving a settlement with the Kentucky Attorney General on the revised condition relating to the composition of the post-merger Duke Energy board. Duke Energy and Progress Energy filed their acceptance of the condition on November 2, 2011. Duke Energy Kentucky agreed to (i) not file new gas or electric base rate applications for two years from the date of the KPSC’s final order in the merger proceedings, (ii) make five annual shareholder contributions of $165,000 each to support low-income weatherization efforts and economic development within Duke Energy Kentucky’s service territory and (iii) not seek recovery from retail customers for any of their allocable share of merger related costs.

Accounting Charges to be Recognized Related to the Merger Consummation

Duke Energy anticipates recording charges of approximately $450 million to $550 million in the second half of 2012 associated with the merger. This estimate includes the costs of Long-term FERC Mitigation, Interim FERC Mitigation, the retail rate reduction associated with Interim FERC Mitigation, employee severance, obligations to provide community support and merger transaction expenses. The allocation of these charges to individual subsidiaries will be determined in the third quarter. The majority of these charges will be recognized by Duke Energy Carolinas and Progress Energy Carolinas. See Note 15 for further information related to employee severance expenses.

Duke Energy also expects to incur significant system integration and other merger-related transition costs primarily through 2014 that are necessary in order to achieve certain cost savings, efficiencies and other benefits anticipated to result from the merger with Progress Energy.

Purchase Price

Pursuant to the merger, all Progress Energy common shares were exchanged at the fixed exchange ratio of 0.87083 common shares of Duke Energy for each Progress Energy common share. The total consideration transferred in the merger was based on the closing price of Duke Energy common shares on July 2, 2012, and was calculated as follows:

(dollars in millions, except per share amounts; shares in thousands)
Progress Energy common shares outstanding at July 2, 2012		296,116
Exchange ratio		0.87083
Duke Energy common shares issued for Progress Energy common shares outstanding		257,867
Closing price of Duke Energy common shares on July 2, 2012	$	69.84
Purchase price for common stock	$	18,009
Fair value of outstanding earned stock compensation awards		62
Total estimated purchase price	$	18,071

Progress Energy’s stock-based compensation awards, including performance shares and restricted stock, were replaced with Duke Energy awards upon consummation of the merger. In accordance with accounting guidance for business combinations, a portion of the fair value of these awards is included in the purchase price as it represents consideration transferred in the merger.

Purchase Price Allocation

The fair value of Progress Energy’s assets acquired and liabilities assumed was determined based on significant estimates and assumptions that are judgmental in nature, including projected future cash flows (including timing); discount rates reflecting risk inherent in the future cash flows and market prices of long-term debt. The fair value of Progress Energy’s asset acquired and liabilities assumed utilized for purchase price allocation are considered preliminary as a result of the short time period between the consummation of the merger and the filing of this Form 10-Q.

The majority of Progress Energy’s operations are subject to the rate-setting authority of the FERC, the NCUC, the PSCSC, and the Florida Public Service Commission (FPSC) and are accounted for pursuant to U.S. generally accepted accounting principles, including the accounting guidance for regulated operations. The rate-setting and cost recovery provisions currently in place for Progress Energy’s regulated operations provide revenues derived from costs, including a return on investment of assets and liabilities included in rate base. Thus, the fair values of Progress Energy’s tangible and intangible assets and liabilities subject to these rate-setting provisions approximate their carrying values, and the assets and liabilities acquired and pro forma financial information do not reflect any net adjustments related to these amounts.

The significant assets and liabilities for which preliminary valuation amounts are reflected as of the filing of this Form 10-Q include the fair value of the acquired pension and other post-retirement benefit (OPEB) plans, asset retirement obligations and long-term debt. The preliminary fair value of the outstanding stock compensation awards is included in the purchase price as consideration transferred. The preliminary amounts recognized are subject to revision until the valuations are completed and to the extent that additional information is obtained about the facts and circumstances that existed as of the acquisition date.

The excess of the purchase price over the estimated fair values of the assets acquired and liabilities assumed will be recognized as goodwill in the third quarter of 2012. The goodwill reflects the value paid primarily for the long-term potential for enhanced access to capital as a result of the company’s increased scale and diversity, opportunities for synergies, and an improved risk profile. The allocation of goodwill to Duke Energy’s reporting units has not yet been completed as a result of the short time period between the closing of the merger and the filing of this Form 10-Q. None of the goodwill recognized is deductible for income tax purposes, and as such, no deferred taxes will be recorded related to goodwill.

The preliminary purchase price allocation of the merger was as follows:

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Combined Notes To Unaudited Condensed Consolidated Financial Statements - (Continued)

(in millions)
Current assets	$	3,266
Property, plant and equipment		23,808
Goodwill		12,287
Other long-term assets, excluding goodwill		8,138
Total assets		47,499
Current liabilities, including current maturities of long-term debt		3,536
Long-term liabilities, preferred stock and noncontrolling interests		10,211
Long-term debt		15,681
Total liabilities and preferred stock		29,428
Total estimated purchase price	$	18,071

Current Quarter Impact of Merger

Duke Energy incurred pre-tax transaction and integration related costs of $7 million and $15 million, for the three and six months ended June 30, 2012, respectively, and $5 million and $16 million, for the three and six months ended June 30, 2011, respectively, substantially all of which were recorded within Operation, maintenance and other in Duke Energy’s Condensed Consolidated Statements of Operations.

Pro Forma Financial Information

The following unaudited pro forma financial information reflects the consolidated results of operations of Duke Energy and reflects the amortization of purchase price adjustments assuming the merger had taken place on January 1, 2011. The unaudited pro forma financial information has been presented for illustrative purposes only and is not necessarily indicative of the consolidated results of operations that would have been achieved or the future consolidated results of operations of Duke Energy. This information is preliminary in nature and subject to change based on final purchase price adjustments.

The pro forma financial information does not include potential cost savings or non-recurring adjustments that will be recorded in the third quarter in connection with the merger or non-recurring costs directly related to the merger. Non-recurring transaction and integration costs incurred by both Duke Energy and Progress Energy have also been excluded from the pro forma earnings presented below.  After-tax non-recurring transaction and integration costs incurred were $12 million and $18 million, respectively, for the three and six months ended June 30, 2012, and $4 million and $20 million, respectively, for the three and six months ended June 30, 2011.

	Three Months Ended June 30,				Six Months Ended June 30,
(in millions, except per share amounts)	2012		2011		2012		2011
Revenues	$	5,843	$	5,789	$	11,557	$	11,613
Net Income Attributable to Duke Energy Corporation		527		621		984		1,338
Basic and Diluted Earnings Per Share	$	0.75	$	0.89	$	1.40	$	1.91

Refer to Note 5 for information regarding Progress Energy merger shareholder litigation.

Vermillion Generating Station.

On January 12, 2012, after receiving approvals from the FERC and the IURC on August 12, 2011 and December 28, 2011, respectively, Duke Energy Vermillion II, LLC (Duke Energy Vermillion), an indirect wholly owned subsidiary of Duke Energy Ohio, completed the sale of its 75% undivided ownership interest in the Vermillion Generating Station (Vermillion) to Duke Energy Indiana and Wabash Valley Power Association (WVPA). Upon the closing of the sale, Duke Energy Indiana and WVPA held 62.5% and 37.5% interests in Vermillion, respectively. Duke Energy Ohio received net proceeds of $82 million, consisting of $68 million and $14 million from Duke Energy Indiana and WVPA, respectively. Following the transaction, Duke Energy Indiana retired Gallagher Units 1 and 3 effective February 1, 2012.

As Duke Energy Indiana is an affiliate of Duke Energy Vermillion the transaction has been accounted for as a transfer between entities under common control with no gain or loss recorded and did not have a significant impact to Duke Energy Ohio or Duke Energy Indiana’s results of operations. The proceeds received from Duke Energy Indiana are included in Net proceeds from the sales of other assets on Duke Energy Ohio’s Condensed Consolidated Statements of Cash Flows. The cash paid to Duke Energy Ohio is included in Capital expenditures on Duke Energy Indiana’s Condensed Consolidated Statements of Cash Flows. Duke Energy Ohio and Duke Energy Indiana recognized non-cash equity transfers of $28 million and $26 million, respectively, in their Condensed Consolidated Statements of Common Stockholder’s Equity on the transaction representing the difference between cash exchanged and the net book value of Vermillion. These amounts are not reflected in Duke Energy’s Condensed Consolidated Statements of Cash Flows or Condensed Consolidated Statements of Equity as the transaction is eliminated in consolidation.

The proceeds from WVPA are included in Net proceeds from the sales of other assets, and sale of and collections on notes receivable on Duke Energy and Duke Energy Ohio’s Condensed Consolidated Statements of Cash Flows. In the second quarter of 2011, Duke Energy Ohio recorded a pre-tax impairment charge of $9 million to adjust the carrying value of the proportionate share of Vermillion to be sold to WVPA to the proceeds to be received from WVPA less costs to sell. The sale of the proportionate share of Vermillion to WVPA did not result in a significant additional gain or loss upon close of the transaction.

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Combined Notes To Unaudited Condensed Consolidated Financial Statements - (Continued)

Wind Projects Joint Venture.

In April 2012, Duke Energy executed a joint venture agreement with Sumitomo Corporation of America (SCOA). Under the terms of the agreement, Duke Energy and SCOA will each own a 50% interest in the joint venture (DS Cornerstone, LLC), which owns two wind generation projects. One of the facilities began commercial operations in June 2012 and the other facility is under construction. Duke Energy and SCOA also negotiated a $330 million, Construction and 12-year amortizing Term Loan Facility, on behalf of the borrower, a wholly owned subsidiary of the joint venture. The loan agreement is non-recourse to Duke Energy. Duke Energy received proceeds of $319 million upon execution of the loan agreement. This amount represents reimbursement of a significant portion of Duke Energy’s construction costs incurred as of the date of the agreement. Beginning in April 2012, and through completion of the projects, Duke Energy and SCOA will each fund 50% of the remaining construction cost of the projects through contributions to the joint venture. Duke Energy will consolidate the joint venture until the project under construction reaches commercial operations later in 2012. This transaction is expected to result in an insignificant gain to Duke Energy at the time construction is complete, where upon Duke Energy will no longer consolidate the joint venture. See Note 11 for further information.

3. Business Segments

Effective with the first quarter of 2012, management began evaluating segment performance based on Segment Income. Segment Income is defined as income from continuing operations net of income attributable to noncontrolling interests. Segment Income, as discussed below, includes intercompany revenues and expenses that are eliminated in the Condensed Consolidated Financial Statements. In conjunction with management’s use of the new reporting measure, certain governance costs that were previously unallocated have now been allocated to each of the segments. In addition, direct interest expense and income taxes are included in segment income. Prior year segment profitability information has been recast to conform to the current year presentation. None of these changes impacts the reportable operating segments or the Duke Energy Registrants’ previously reported consolidated revenues, net income or earnings-per-share.

Duke Energy

Duke Energy has the following reportable operating segments: U.S. Franchised Electric and Gas (USFE&G), Commercial Power and International Energy.

USFE&G generates, transmits, distributes and sells electricity in central and western North Carolina, western South Carolina, central, north central and southern Indiana, and northern Kentucky. USFE&G also transmits and distributes electricity in southwestern Ohio. Additionally, USFE&G transports and sells natural gas in southwestern Ohio and northern Kentucky. It conducts operations primarily through Duke Energy Carolinas, regulated portions of Duke Energy Ohio including Duke Energy Kentucky, and Duke Energy Indiana.

Commercial Power owns, operates and manages power plants and engages in the wholesale marketing and procurement of electric power, fuel and emission allowances related to these plants, as well as other contractual positions. Commercial Power also has a retail sales subsidiary, Duke Energy Retail Sales, LLC (Duke Energy Retail), which is certified by the PUCO as a Competitive Retail Electric Service provider in Ohio. Through Duke Energy Generation Services, Inc. and its affiliates (DEGS), Commercial Power engages in the development, construction and operation of renewable energy projects. In addition, DEGS develops commercial transmission projects. DEGS also owns and operates electric generation for large energy consumers, municipalities, utilities and industrial facilities.

International Energy principally operates and manages power generation facilities and engages in sales and marketing of electric power and natural gas outside the U.S. It conducts operations primarily through Duke Energy International, LLC and its affiliates and its activities principally target power generation in Latin America. Additionally, International Energy owns a 25% interest in National Methanol Company, located in Saudi Arabia, which is a large regional producer of methanol and methyl tertiary butyl ether.

The remainder of Duke Energy’s operations is presented as Other. While it is not considered an operating segment, Other primarily includes unallocated corporate costs, which include costs not allocable to Duke Energy’s reportable business segments, primarily governance, costs to achieve mergers and divestitures, and costs associated with certain corporate severance programs. It also includes, Bison Insurance Company Limited (Bison), Duke Energy’s wholly owned, captive insurance subsidiary, Duke Energy’s 50% interest in DukeNet Communications, LLC (DukeNet) and related telecommunications businesses, and Duke Energy Trading and Marketing, LLC, which is 40% owned by Exxon Mobil Corporation and 60% owned by Duke Energy.

Business Segment Data
								Segment Income/
		Unaffiliated		Intersegment		Total		Consolidated
(in millions)		Revenues		Revenues		Revenues		Net Income(a)
Three Months Ended June 30, 2012
USFE&G		$	2,688	$	9	$	2,697	$	337
Commercial Power			488		14		502		28
International Energy			397		―		397		105
	Total reportable segments		3,573		23		3,596		470
Other			4		12		16		(25)
Eliminations			―		(35)		(35)		―
Add back of noncontrolling interest component			―		―		―		4
Income from Discontinued Operations, net of tax			―		―		―		(1)
	Total consolidated	$	3,577	$	―	$	3,577	$	448
Three Months Ended June 30, 2011
USFE&G		$	2,540	$	9	$	2,549	$	297
Commercial Power			592		3		595		30
International Energy			406		―		406		127
	Total reportable segments		3,538		12		3,550		454
Other			(4)		13		9		(19)
Eliminations			―		(25)		(25)		―
Add back of noncontrolling interest component			―		―		―		6
	Total consolidated	$	3,534	$	―	$	3,534	$	441

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Combined Notes To Unaudited Condensed Consolidated Financial Statements - (Continued)

								Segment Income/
		Unaffiliated		Intersegment		Total		Consolidated
(in millions)		Revenues		Revenues		Revenues		Net Income(a)
Six Months Ended June 30, 2012
USFE&G(b)		$	5,348	$	17	$	5,365	$	473
Commercial Power			1,052		30		1,082		59
International Energy			799		―		799		247
	Total reportable segments		7,199		47		7,246		779
Other			8		23		31		(41)
Eliminations			―		(70)		(70)		―
Add back of noncontrolling interest component			―		―		―		8
Income from Discontinued Operations, net of tax			―		―		―		1
	Total consolidated	$	7,207	$	―	$	7,207	$	747
Six Months Ended June 30, 2011
USFE&G		$	5,214	$	18	$	5,232	$	638
Commercial Power			1,234		5		1,239		79
International Energy			754		―		754		255
	Total reportable segments		7,202		23		7,225		972
Other			(5)		25		20		(26)
Eliminations			―		(48)		(48)		―
Add back of noncontrolling interest component			―		―		―		8
	Total consolidated	$	7,197	$	―	$	7,197	$	954
(a)	Segment results exclude noncontrolling interests and results of entities classified as discontinued operations.
(b)	As discussed further in Note 4, Duke Energy recorded pre-tax impairment and other charges of $420 million in the first quarter of 2012 related to the Edwardsport IGCC project.

Segment Assets
	Segment assets in the following table exclude all intercompany assets.
(in millions)		June 30, 2012		December 31, 2011
USFE&G		$	48,451	$	47,977
Commercial Power			7,268		6,939
International Energy			4,678		4,539
	Total reportable segments		60,397		59,455
Other			2,593		2,961
Reclassifications(a)			41		110
	Total consolidated assets	$	63,031	$	62,526
(a)	Primarily represents reclassification of federal tax balances in consolidation.

Duke Energy Ohio

Duke Energy Ohio has two reportable operating segments, Franchised Electric and Gas and Commercial Power.

Franchised Electric and Gas transmits and distributes electricity in southwestern Ohio and generates, transmits, distributes and sells electricity in northern Kentucky. Franchised Electric and Gas also transports and sells natural gas in southwestern Ohio and northern Kentucky. It conducts operations primarily through Duke Energy Ohio and its wholly owned subsidiary Duke Energy Kentucky.

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Commercial Power owns, operates and manages power plants and engages in the wholesale marketing and procurement of electric power, fuel and emission allowances related to these plants, as well as other contractual positions. Duke Energy Ohio’s Commercial Power reportable operating segment does not include the operations of DEGS or Duke Energy Retail, which is included in the Commercial Power reportable operating segment at Duke Energy.

The remainder of Duke Energy Ohio’s operations is presented as Other. While it is not considered an operating segment, Other primarily includes certain governance costs allocated by its parent, Duke Energy (see Note 17).

Business Segment Data
				Segment Income/
		Unaffiliated		Consolidated
(in millions)		Revenues(a)		Net Income
Three Months Ended June 30, 2012
Franchised Electric and Gas		$	387	$	30
Commercial Power			342		17
	Total reportable segments		729		47
Other			―		(2)
Eliminations			(12)		―
	Total consolidated	$	717	$	45
Three Months Ended June 30, 2011
Franchised Electric and Gas		$	315	$	29
Commercial Power			379		6
	Total reportable segments		694		35
Other			―		(2)
	Total consolidated	$	694	$	33

				Segment Income/
		Unaffiliated		Consolidated
(in millions)		Revenues(a)		Net Income
Six Months Ended June 30, 2012
Franchised Electric and Gas		$	860	$	64
Commercial Power			796		61
	Total reportable segments		1,656		125
Other			―		(6)
Eliminations			(27)		―
	Total consolidated	$	1,629	$	119
Six Months Ended June 30, 2011
Franchised Electric and Gas		$	779	$	77
Commercial Power			794		34
	Total reportable segments		1,573		111
Other			―		(5)
	Total consolidated	$	1,573	$	106
(a)	There was an insignificant amount of intersegment revenues for the three and six months ended June 30, 2011.

Segment Assets
	Segment assets in the following table exclude all intercompany assets.
(in millions)		June 30, 2012		December 31, 2011
Franchised Electric and Gas		$	6,559	$	6,293
Commercial Power			4,742		4,740
	Total reportable segments		11,301		11,033
Other			142		259
Reclassifications(a)			(465)		(353)
	Total consolidated assets	$	10,978	$	10,939
(a)	Primarily represents reclassification of federal tax balances in consolidation.

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Duke Energy Carolinas and Duke Energy Indiana

Duke Energy Carolinas and Duke Energy Indiana each have one reportable operating segment, Franchised Electric, which generates, transmits, distributes and sells electricity in central and western North Carolina and western South Carolina, and north central, central and southern Indiana, respectively.

The remainder of Duke Energy Carolinas’ and Duke Energy Indiana’s operations are presented as Other. While it is not considered an operating segment, Other primarily includes costs to achieve certain mergers and divestitures, certain corporate severance programs, and certain costs for use of corporate assets as allocated to Duke Energy Carolinas or Duke Energy Indiana.

At June 30, 2012 and December 31, 2011 all of Duke Energy Carolinas’ and Duke Energy Indiana’s assets are each owned by the Franchised Electric operating segment. For the three and six months ended June 30, 2012 and 2011, substantially all revenues and expenses are from the Franchised Electric operating segment of each registrant.

4. Regulatory Matters

Rate Related Information.

The NCUC, PSCSC, IURC, PUCO and KPSC approve rates for retail electric and gas services within their states. Non-regulated sellers of gas and electric generation are also allowed to operate in Ohio once certified by the PUCO. The FERC approves rates for electric sales to wholesale customers served under cost-based rates, as well as sales of transmission service.

Duke Energy Ohio Standard Service Offer (SSO). The PUCO approved Duke Energy Ohio’s current ESP on November 22, 2011. The ESP effectively separates the generation of electricity from Duke Energy Ohio’s retail load obligation and requires Duke Energy Ohio to transfer its generation assets to a non-regulated affiliate on or before December 31, 2014. The ESP includes competitive auctions for electricity supply whereby the energy price is recovered from retail customers. As a result, Duke Energy Ohio now earns retail margin on the transmission and distribution of electricity only and not on the cost of the underlying energy. New rates for Duke Energy Ohio went into effect for SSO customers on January 1, 2012. The ESP also includes a provision for a non-bypassable stability charge of $110 million per year to be collected from January 1, 2012 through December 31, 2014.

On January 18, 2012, the PUCO denied a request for rehearing of its decision on Duke Energy Ohio’s ESP filed by Columbus Southern Power and Ohio Power Company.

Duke Energy Ohio Generation Asset Transfer. On April 2, 2012, Duke Energy Ohio and various affiliated entities filed an Application for Authorization for Disposition of Jurisdictional Facilities with FERC. The application seeks to transfer, from Duke Energy Ohio’s rate-regulated Ohio utility company, the legacy coal-fired and combustion gas turbine assets to a non-regulated affiliate, consistent with ESP stipulation approved on November 22, 2011. The application outlines a potential additional step in the reorganization that would result in a transfer of all of Duke Energy Ohio’s Commercial Power business to an indirect wholly owned subsidiary of Duke Energy as early as October 2012. The process of determining the optimal corporate structure is an ongoing evaluation of factors, such as tax considerations, that may change between now and the transfer date. In conjunction with the transfer, Duke Energy Ohio’s capital structure will be restructured to reflect appropriate debt and equity ratios for its regulated Franchised Electric and Gas operations. The transfer could instead be accomplished within a wholly owned non-regulated subsidiary of Duke Energy Ohio depending on final tax structuring analysis. Duke Energy Ohio requested the FERC to rule on the application within 90 days. On June 22, 2012, Duke Energy Ohio amended its Application to include several small additional generation units to be transferred.  Duke Energy Ohio requested FERC to rule on its amended Application by August 1, 2012.

Duke Energy Ohio Electric Rate Case. On July 9, 2012, Duke Energy Ohio filed an application with the PUCO for an increase in electric distribution rates of approximately $87 million. On average, total electric rates would increase approximately 5.1% under the filing. The rate increase is designed to recover the cost of investments in projects to improve reliability for customers and upgrades to the distribution system. Pursuant to a stipulation in another case, Duke Energy Ohio will continue recovering its costs associated with grid modernization in a separate rider.

Duke Energy Ohio expects revised rates would likely go into effect in early 2013.

Duke Energy Ohio Natural Gas Rate Case. On July 9, 2012, Duke Energy Ohio filed an application with the PUCO for an increase in natural gas distribution rates of approximately $45 million. On average, total natural gas rates would increase approximately 6.6% under the filing. The rate increase is designed to recover the cost of upgrades to the distribution system, as well as environmental cleanup of manufactured gas plant sites. In addition to the recovery of costs associated with the manufactured gas plants, the rate request includes a proposal for an accelerated service line replacement program that would allow smaller annual increases to reflect increased investment in the distribution system. The filing also requests that the PUCO renew the rider recovery of Duke Energy Ohio’s accelerated main replacement program and grid modernization program.

Duke Energy Ohio expects revised rates would likely go into effect in early 2013.

Duke Energy Carolinas North Carolina Rate Case. On January 27, 2012, the NCUC approved a settlement agreement between Duke Energy Carolinas and the North Carolina Utilities Public Staff (Public Staff). The terms of the agreement include an average 7.2% increase in retail revenues, or approximately $309 million annually beginning in February 2012. The agreement includes a 10.5% return on equity and a capital structure of 53% equity and 47% long-term debt. In order to mitigate the impact of the increase on customers, the agreement provides for (i) Duke Energy to waive its right to increase the amount of construction work in progress in rate base for any expenditures associated with Cliffside Unit 6 above the North Carolina retail portion included in the 2009 North Carolina Rate Case, (ii) the accelerated return of certain regulatory liabilities, related to accumulated EPA sulfur dioxide auction proceeds, to customers, which lowered the total impact to customer bills to an increase of approximately 7.2% in the near-term; and (iii) an $11 million shareholder contribution to agencies that provide energy assistance to low income customers. In exchange for waiving the right to increase the amount of construction work in process for Cliffside Unit 6, Duke Energy will continue to capitalize AFUDC on all expenditures associated with Cliffside Unit 6 not included in rate base as a result of the 2009 North Carolina Rate Case.

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On March 28, 2012, the North Carolina Attorney General filed a notice of appeal with the NCUC challenging the rate of return approved in the agreement. On April 17, 2012, the NCUC denied Duke Energy Carolinas’ request to dismiss the notice of appeal. The North Carolina Supreme Court, which is hearing the appeal, recently docketed the appeal with briefs due August 22, 2012.  Reply briefs are due 30 days later. The court is expected to set a hearing date in late fall.

Duke Energy Carolinas South Carolina Rate Case. On January 25, 2012, the PSCSC approved a settlement agreement between Duke Energy Carolinas and the Office of Regulatory Staff (ORS), Wal-Mart Stores East, LP (Wal-Mart), and Sam’s East, Inc (Sam’s). The Commission of Public Works for the city of Spartanburg, South Carolina and the Spartanburg Sanitary Sewer District were not parties to the agreement; however, they did not object to the agreement. The terms of the agreement include an average 5.98% increase in retail and commercial revenues, or approximately $93 million annually beginning February 6, 2012. The agreement includes a 10.5% return on equity, a capital structure of 53% equity and 47% long-term debt, and a contribution of $4 million to AdvanceSC.

Capital Expansion Projects.

Duke Energy Carolinas Cliffside Unit 6. On March 21, 2007, the NCUC issued an order allowing Duke Energy Carolinas to build an 800 MW coal-fired unit. Following final equipment selection and the completion of detailed engineering, Cliffside Unit 6 is expected to have a net output of 825 MW. On January 31, 2008, Duke Energy Carolinas filed its updated cost estimate of $1.8 billion (excluding AFUDC of $600 million) for Cliffside Unit 6. In March 2010, Duke Energy Carolinas filed an update to the cost estimate of $1.8 billion (excluding AFUDC) with the NCUC where it reduced the estimated AFUDC financing costs to $400 million as a result of the December 2009 rate case settlement with the NCUC that allowed the inclusion of construction work in progress in rate base prospectively. Duke Energy Carolinas believes that the overall cost of Cliffside Unit 6 will be reduced by $125 million in federal advanced clean coal tax credits, as discussed in Note 5. Cliffside Unit 6 is expected to begin commercial operation in the fall of 2012.

Duke Energy Carolinas Dan River Combined Cycle Facility. In June 2008, the NCUC issued its order approving the Certificate of Public Convenience and Necessity (CPCN) applications to construct a 620 MW combined cycle natural gas fired generating facility at Duke Energy Carolinas’ existing Dan River Steam Station. The Division of Air Quality (DAQ) issued a final air permit authorizing construction of the Dan River combined cycle natural gas-fired generating unit in August 2009.

The Dan River project is expected to begin operation by the end of 2012. Based on the most updated cost estimates, total costs (including AFUDC) for the Dan River project are $710 million.

Duke Energy Indiana Edwardsport IGCC Plant. On September 7, 2006, Duke Energy Indiana and Southern Indiana Gas and Electric Company d/b/a Vectren Energy Delivery of Indiana (Vectren) filed a joint petition with the IURC seeking a CPCN for the construction of a 618 MW IGCC power plant at Duke Energy Indiana’s Edwardsport Generating Station in Knox County, Indiana. The facility was initially estimated to cost approximately $1.985 billion (including $120 million of AFUDC). In August 2007, Vectren formally withdrew its participation in the IGCC plant and a hearing was conducted on the CPCN petition based on Duke Energy Indiana owning 100% of the project. On November 20, 2007, the IURC issued an order granting Duke Energy Indiana a CPCN for the proposed IGCC project, approved the cost estimate of $1.985 billion and approved the timely recovery of costs related to the project. On January 25, 2008, Duke Energy Indiana received the final air permit from the Indiana Department of Environmental Management. The Citizens Action Coalition of Indiana, Inc. (CAC), Sierra Club, Inc., Save the Valley, Inc., and Valley Watch, Inc., all intervenors in the CPCN proceeding, have appealed the air permit.

On May 1, 2008, Duke Energy Indiana filed its first semi-annual IGCC rider and ongoing review proceeding with the IURC as required under the CPCN order issued by the IURC. In its filing, Duke Energy Indiana requested approval of a new cost estimate for the IGCC project of $2.35 billion (including $125 million of AFUDC) and for approval of plans to study carbon capture as required by the IURC’s CPCN order. On January 7, 2009, the IURC approved Duke Energy Indiana’s request, including the new cost estimate of $2.35 billion, and cost recovery associated with a study on carbon capture. On November 3, 2008 and May 1, 2009, Duke Energy Indiana filed its second and third semi-annual IGCC riders, respectively, both of which were approved by the IURC in full.

On November 24, 2009, Duke Energy Indiana filed a petition for its fourth semi-annual IGCC rider and ongoing review proceeding with the IURC. As Duke Energy Indiana experienced design modifications, quantity increases and scope growth above what was anticipated from the preliminary engineering design, capital costs to the IGCC project were anticipated to increase. Duke Energy Indiana forecasted that the additional capital cost items would use the remaining contingency and escalation amounts in the current $2.35 billion cost estimate and add $150 million, excluding the impact associated with the need to add more contingency. Duke Energy Indiana did not request approval of an increased cost estimate in the fourth semi-annual update proceeding; rather, Duke Energy Indiana requested, and the IURC approved, a subdocket proceeding in which Duke Energy Indiana would present additional evidence regarding an updated estimated cost for the IGCC project and in which a more comprehensive review of the IGCC project could occur. The evidentiary hearing for the fourth semi-annual update proceeding was held April 6, 2010, and an interim order was received on July 28, 2010. The order approves the implementation of an updated IGCC rider to recover costs incurred through September 30, 2009, effective immediately. The approvals are on an interim basis pending the outcome of the sub-docket proceeding involving the revised cost estimate as discussed further below.

On April 16, 2010, Duke Energy Indiana filed a revised cost estimate for the IGCC project reflecting an estimated cost increase of $530 million. Duke Energy Indiana requested approval of the revised cost estimate of $2.88 billion (including $160 million of AFUDC), and for continuation of the existing cost recovery treatment. A major driver of the cost increase included quantity increases and design changes, which impacted the scope, productivity and schedule of the IGCC project. On September 17, 2010, an agreement was reached with the OUCC, Duke Energy Indiana Industrial Group and Nucor Steel — Indiana to increase the authorized cost estimate of $2.35 billion to $2.76 billion, and to cap the project’s costs that could be passed on to customers at $2.975 billion. Any construction cost amounts above $2.76 billion would be subject to a prudence review similar to most other rate base investments in Duke Energy Indiana’s next general rate increase request before the IURC. Duke Energy Indiana agreed to accept a 150 basis point reduction in the equity return for any project construction costs greater than $2.35 billion. Additionally, Duke Energy Indiana agreed not to file for a general rate case increase before March 2012. Duke Energy Indiana also agreed to reduce depreciation rates earlier than would otherwise be required and to forego a deferred tax incentive related to the IGCC project. As a result of the settlement, Duke Energy Indiana recorded a pre-tax charge to earnings of approximately $44 million in the third quarter of 2010 to reflect the impact of the reduction in the return on equity. Due to the IURC investigation discussed below, the IURC convened a technical conference on November 3, 2010, related to the continuing need for the Edwardsport IGCC facility. On December 9, 2010, the parties to the settlement withdrew the settlement agreement to provide an opportunity to assess whether and to what extent the settlement agreement remained a reasonable allocation of risks and rewards and whether modifications to the settlement agreement

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were appropriate. Management determined that the approximate $44 million charge discussed above was not impacted by the withdrawal of the settlement agreement.

During 2010, Duke Energy Indiana filed petitions for its fifth and sixth semi-annual IGCC riders. Evidentiary hearings were held on April 24, 2012 and April 25, 2012.

The CAC, Sierra Club, Inc., Save the Valley, Inc., and Valley Watch, Inc. filed motions for two subdocket proceedings alleging improper communications, undue influence, fraud, concealment and gross mismanagement, and a request for field hearing in this proceeding. Duke Energy Indiana opposed the requests. On February 25, 2011, the IURC issued an order which denied the request for a subdocket to investigate the allegations of improper communications and undue influence at this time, finding there were other agencies better suited for such investigation. The IURC also found that allegations of fraud, concealment and gross mismanagement related to the IGCC project should be heard in a Phase II proceeding of the cost estimate subdocket and set evidentiary hearings on both Phase I (cost estimate increase) and Phase II beginning in August 2011. After procedural delays, hearings were held on Phase I on October 26, 2011 and on Phase II on November 21, 2011.

On March 10, 2011, Duke Energy Indiana filed testimony with the IURC proposing a framework designed to mitigate customer rate impacts associated with the Edwardsport IGCC project. Duke Energy Indiana’s filing proposed a cap on the project’s construction costs, (excluding financing costs), which can be recovered through rates at $2.72 billion. It also proposed rate-related adjustments that will lower the overall customer rate increase related to the project from an average of 19% to approximately 16%.

On June 27, 2011, Duke Energy Indiana filed testimony with the IURC in connection with its seventh semi-annual rider request which included an update on the current cost forecast of the Edwardsport IGCC project. The updated forecast excluding AFUDC increased from $2.72 billion to $2.82 billion, not including any contingency for unexpected start-up events. On June 30, 2011, the OUCC and intervenors filed testimony in Phase I recommending that Duke Energy Indiana be disallowed cost recovery of any of the additional cost estimate increase above the previously approved cost estimate of $2.35 billion. Duke Energy Indiana filed rebuttal testimony on August 3, 2011.

On November 30, 2011, Duke Energy Indiana filed a petition with the IURC in connection with its eighth semi-annual rider request for the Edwardsport IGCC project. Evidentiary hearings for the seventh and eighth semi-annual rider requests are scheduled for August 6, 2012 and August 7, 2012.

In the subdocket proceeding, on July 14, 2011, the OUCC and certain intervenors filed testimony in Phase II alleging that Duke Energy Indiana concealed information and grossly mismanaged the project, and therefore Duke Energy Indiana should only be permitted to recover from customers $1.985 billion, the original IGCC project cost estimate approved by the IURC. Other intervenors recommended that Duke Energy Indiana not be able to rely on any cost recovery granted under the CPCN or the first cost increase order. Duke Energy Indiana believes it has diligently and prudently managed the project. On September 9, 2011, Duke Energy defended against the allegations in its responsive testimony. The OUCC and intervenors filed their final rebuttal testimony in Phase II on or before October 7, 2011, making similar claims of fraud, concealment and gross mismanagement and recommending the same outcome of limiting Duke Energy Indiana’s recovery to the $1.985 billion initial cost estimate. Additionally, the CAC recommended that recovery be limited to the costs incurred on the IGCC project as of November 30, 2009 (Duke Energy Indiana estimates it had committed costs of $1.6 billion), with further IURC proceedings to be held to determine the financial consequences of this recommendation.

On October 19, 2011, Duke Energy Indiana revised its project cost estimate from approximately $2.82 billion, excluding financing costs, to approximately $2.98 billion, excluding financing costs. The revised estimate reflects additional cost pressures resulting from quantity increases and the resulting impact on the scope, productivity and schedule of the IGCC project. Duke Energy Indiana previously proposed to the IURC a cost cap of approximately $2.72 billion, plus the actual AFUDC that accrues on that amount. As a result, Duke Energy Indiana recorded a pre-tax impairment charge of approximately $222 million in the third quarter of 2011 related to costs expected to be incurred above the cost cap. This charge is in addition to a pre-tax impairment charge of approximately $44 million recorded in the third quarter of 2010 as discussed above. The cost cap, if approved by the IURC, limits the amount of project construction costs that may be incorporated into customer rates in Indiana. As a result of the proposed cost cap, recovery of these cost increases is not considered probable. Additional updates to the cost estimate could occur through the completion of the plant in 2012.

Phase I and Phase II hearings concluded on January 24, 2012. The CAC has filed repeated requests for the IURC to consider issues of ethics, undue influence, due process violations and appearance of impropriety. The IURC denied the most recent motion in March 2012. In April 2012, the CAC filed a motion requesting the IURC to certify questions of law for appeal regarding allegations of fraud on the commission and due process violations. This motion was denied.

On April 30, 2012, Duke Energy Indiana entered into a settlement agreement with the OUCC, the Duke Energy Indiana Industrial Group and Nucor Steel-Indiana on the cost increase for construction of the Edwardsport IGCC plant, including both Phase I and Phase II of the sub docket. Pursuant to the agreement, there would be a cap on costs to be reflected in customer rates of $2.595 billion, including estimated financing costs through June 30, 2012. Pursuant to the agreement, Duke Energy Indiana would be able to recover additional financing costs until customer rates are revised. Duke Energy Indiana also agrees not to request a retail electric base rate increase prior to March 2013, with rates in effect no earlier than April 1, 2014. The agreement is subject to approval by the IURC, and the settling parties have requested that schedule be set to hear evidence in support of the settlement agreement, which could allow for an IURC order as early as the summer of 2012. As a result of the agreement, Duke Energy Indiana recorded pre-tax impairment and other charges of approximately $420 million in the first quarter of 2012. Approximately $400 million is recorded in Impairment charges and the remaining approximately $20 million is recorded in Operation, maintenance and other on Duke Energy’s Condensed Consolidated Statement of Operations and in Duke Energy Indiana’s Condensed Consolidated Statements of Operations and Comprehensive Income. The $20 million recorded in Operation, maintenance and other, is attributed to legal fees Duke Energy Indiana will be responsible for on behalf of certain intervenors, as well as funding for low income energy assistance, as required by the settlement agreement. These charges are in addition to pre-tax impairment charges of approximately $222 million in the third quarter of 2011 and $44 million recorded in the third quarter of 2010, as discussed above.

The CAC, Sierra Club Indiana chapter, Save the Valley and Valley Watch, filed testimony in opposition to the April 30, 2012 settlement agreement contending the agreement should not be approved, and that the amount of costs recovered from customers should be less than what the settlement agreement provides, potentially even zero. In addition to reiterating their prior concerns with the Edwardsport IGCC project, the intervenors noted above also contend new settlement terms should be added to mitigate carbon emissions, conditions should be added prior to the plant being declared in-service and the IURC should consider their allegations of undue influence. Duke Energy Indiana, the Industrial Group and the OUCC, filed rebuttal testimony supporting the settlement as reasonable and in the public interest. An evidentiary hearing on the settlement agreement concluded on July 19,

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2012. Duke Energy Indiana, the Industrial Group and the OUCC will file a proposed order by August 17, 2012. A final order is expected by the end of the year.

On June 8, 2012, Duke Energy Indiana filed a petition with the IURC in connection with its ninth semi-annual rider request for the Edwardsport IGCC project. Evidentiary hearings for the ninth semi-annual rider requests are scheduled for January 14, 2013 and January 15, 2013.

Duke Energy is unable to predict the ultimate outcome of these proceedings. In the event the IURC disallows a portion of the remaining plant costs, including financing costs, or if cost estimates for the plant increase, additional charges to expense, which could be material, could occur. Construction of the Edwardsport IGCC plant is ongoing and the expected in-service date for the plant has been delayed from the fourth quarter of 2012 to the first quarter of 2013. The impact of this delay on the cost of the plant is currently being analyzed but cannot be determined at this time.

Duke Energy Carolinas William States Lee III Nuclear Station. In December 2007, Duke Energy Carolinas filed an application with the NRC, which has been docketed for review, for a combined Construction and Operating License (COL) for two Westinghouse AP1000 (advanced passive) reactors for the proposed William States Lee III Nuclear Station (Lee Nuclear Station) at a site in Cherokee County, South Carolina. Each reactor is capable of producing 1,117 MW. Submitting the COL application does not commit Duke Energy Carolinas to build nuclear units. Through several separate orders, the NCUC and PSCSC have concurred with the prudency of Duke Energy incurring project development and pre-construction costs.

Duke Energy Carolinas V.C. Summer Nuclear Station Letter of Intent. In July 2011, Duke Energy Carolinas signed a letter of intent with Santee Cooper related to the potential acquisition by Duke Energy Carolinas of a 5% to 10% ownership interest in the V.C. Summer Nuclear Station being developed by Santee Cooper and SCE&G near Jenkinsville, South Carolina. The letter of intent provides a path for Duke Energy Carolinas to conduct the necessary due diligence to determine if future participation in this project is beneficial for its customers.

Potential Plant Retirements.

The Subsidiary Registrants periodically file Integrated Resource Plans (IRP) with their state regulatory commissions. The IRPs provide a view of forecasted energy needs over a long term (15-20 years), and options being considered to meet those needs. The IRP’s filed by the Subsidiary Registrants in 2011 and 2010 included planning assumptions to potentially retire by 2015, certain coal-fired generating facilities in North Carolina, South Carolina, Indiana and Ohio that do not have the requisite emission control equipment, primarily to meet EPA regulations that are not yet effective.

Duke Energy classifies generating facilities that are still operating but are expected to be retired significantly before the end of their previously estimated useful lives as Generation facilities to be retired, net, on the Condensed Consolidated Balance Sheets. Amounts are reclassified from the cost and accumulated depreciation of Property, plant and equipment when it becomes probable the plant will be retired. Duke Energy continues to depreciate these generating facilities based on current depreciable lives. When such facilities are removed from service, the remaining net carrying value, if any, is then reclassified to regulatory assets, in accordance with the expected ratemaking treatment.

The table below contains the net carrying value of generating facilities being evaluated for potential retirement included in the Condensed Consolidated Balance Sheets.

		June 30, 2012
		Duke Energy		Duke Energy Carolinas(b)(c)		Duke Energy Ohio(d)		Duke Energy Indiana(e)
Capacity (in MW)			2,773		1,080		1,025		668
Remaining net book value (in millions)(a)		$	327	$	176	$	13	$	138
(a)	Included in Property, plant and equipment, net as of June 30, 2012, on the Condensed Consolidated Balance Sheets, unless otherwise noted.
(b)	Includes Riverbend Units 4 through 7, Lee Units 1 through 3 and Buck Units 5 and 6. Duke Energy Carolinas has committed to retire 1,667 MW in conjunction with a Cliffside air permit settlement, of which 587 MW have already been retired as of June 30, 2012.
(c)	Net book value of Buck Units 5 and 6 of $73 million is included in Generation facilities to be retired, net, on the Condensed Consolidated Balance Sheets at June 30, 2012.
(d)	Includes Beckjord Station and Miami Fort Unit 6. Beckjord has no remaining book value.
(e)	Includes Wabash River Units 2 through 6.
Duke Energy continues to evaluate the potential need to retire these coal-fired generating facilities earlier than the current estimated useful lives, and plans to seek regulatory recovery for amounts that would not be otherwise recovered when any of these assets are retired.

Other Matters.

Progress Energy Merger NCUC and North Carolina Department of Justice (NCDOJ) Investigations. On July 6, 2012, the NCUC issued an order initiating investigation and scheduling hearings addressing the timing of the Duke Energy board of directors’ decision on July 2, 2012, to replace William D. Johnson with James E. Rogers as President and Chief Executive Officer (CEO) of Duke Energy, as well as other related matters.

Pursuant to the merger agreement, William D. Johnson, Chairman, President and CEO of Progress Energy became President and CEO of Duke Energy and James E. Rogers, Chairman, President and CEO of Duke Energy became Executive Chairman of Duke Energy upon close of the merger. Mr. Johnson subsequently resigned as the President and CEO of Duke Energy, effective July 3, 2012.

Pursuant to the NCUC’s July 6, 2012 order, Mr. Rogers appeared before the NCUC on July 10, 2012, and provided testimony regarding  the approval and closing of the merger and his replacement of Mr. Johnson as the President and CEO of Duke Energy. On July 19, 2012, Mr. Johnson, as well as E. Marie McKee and James B. Hyler, Jr., both former members of the Progress Energy board of directors and current members of the post-merger Duke Energy board of directors, appeared before the NCUC. Ann M. Gray and Michael G. Browning, both members of the pre-merger and post-merger Duke Energy board of directors, appeared before the NCUC on July 20, 2012. All provided testimony on the timing of the decision to replace Mr. Johnson with Mr. Rogers, as well as other related matters.

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The NCUC’s order also requests that Duke Energy provide certain documents related to the issue for its review.Duke Energy also received an Investigative Demand issued by the NCDOJ on July 6, 2012, requesting the production of certain documents related to the issues which are also the subject of the NCUC Investigation. Duke Energy’s responses to these requests were submitted on August 7, 2012.  Duke Energy is unable to predict the ultimate outcome of these proceedings.

Refer to Note 5 for information regarding Progress Energy merger shareholder litigation.

Duke Energy Ohio and Duke Energy Kentucky Regional Transmission Organization Realignment. Duke Energy Ohio, which includes its wholly owned subsidiary Duke Energy Kentucky, transferred control of its transmission assets to effect a Regional Transmission Organization (RTO) realignment from MISO to PJM, effective December 31, 2011.

On December 16, 2010, the FERC issued an order related to MISO’s cost allocation methodology surrounding Multi-Value Projects (MVP), a type of MISO Transmission Expansion Planning (MTEP) project cost. MISO expects that MVP will fund the costs of large transmission projects designed to bring renewable generation from the upper Midwest to load centers in the eastern portion of the MISO footprint. MISO approved MVP proposals with estimated project costs of approximately $5.2 billion prior to the date of Duke Energy Ohio’s exit from MISO on December 31, 2011. These projects are expected to be undertaken by the constructing transmission owners from 2012 through 2020 with costs recovered through MISO over the useful life of the projects. The FERC order did not clearly and expressly approve MISO’s apparent interpretation that a withdrawing transmission owner is obligated to pay its share of costs of all MVP projects approved by MISO up to the date of the withdrawing transmission owners’ exit from MISO. Duke Energy Ohio, including Duke Energy Kentucky, has historically represented approximately five-percent of the MISO system. The impact of this order is not fully known, but could result in a substantial increase in MISO transmission expansion costs allocated to Duke Energy Ohio and Duke Energy Kentucky subsequent to a withdrawal from MISO. Duke Energy Ohio and Duke Energy Kentucky, among other parties, sought rehearing of the FERC MVP order. On October 21, 2011, the FERC issued an order on rehearing in this matter largely affirming its original MVP order and conditionally accepting MISO’s compliance filing as well as determining that the MVP allocation methodology is consistent with cost causation principles and FERC precedent. The FERC also reiterated that it will not prejudge any settlement agreement between an RTO and a withdrawing transmission owner for fees that a withdrawing transmission owner owes to the RTO. The order further states that any such fees that a withdrawing transmission owner owes to an RTO are a matter for those parties to negotiate, subject to review by the FERC. The FERC also ruled that Duke Energy Ohio and Duke Energy Kentucky’s challenge of MISO’s ability to allocate MVP costs to a withdrawing transmission owner is beyond the scope of the proceeding. The order further stated that MISO’s tariff withdrawal language establishes that once cost responsibility for transmission upgrades is determined, withdrawing transmission owners retain any costs incurred prior to the withdrawal date. In order to preserve their rights, Duke Energy Ohio and Duke Energy Kentucky filed an appeal of the FERC order in the D.C. Circuit Court of Appeals. The case was consolidated with appeals of the FERC order by other parties in the Seventh Circuit Court of Appeals.

Duke Energy Ohio and Duke Energy Kentucky have entered into settlements or have received state regulatory approvals associated with the RTO realignment. On December 22, 2010, the KPSC issued an order granting approval of Duke Energy Kentucky’s request to effect the RTO realignment, subject to several conditions. The conditions accepted by Duke Energy Kentucky include a commitment to not seek to double-recover in a future rate case the transmission expansion fees that may be charged by MISO and PJM in the same period or overlapping periods. On January 25, 2011, the KPSC issued an order stating that the order had been satisfied and is now unconditional.

On April 26, 2011, Duke Energy Ohio, Ohio Energy Group, The Office of Ohio Consumers’ Counsel and the Commission Staff filed an Application and a Stipulation with the PUCO regarding Duke Energy Ohio’s recovery via a non-bypassable rider of certain costs related to its proposed RTO realignment. Under the Stipulation, Duke Energy Ohio would recover all MTEP costs, including but not limited to MVP costs, directly or indirectly charged to Duke Energy Ohio retail customers. Duke Energy Ohio would not seek to recover any portion of the MISO exit obligation, PJM integration fees, or internal costs associated with the RTO realignment and the first $121 million of PJM transmission expansion costs from Ohio retail customers. Duke Energy Ohio also agreed to vigorously defend against any charges for MVP projects from MISO. On May 25, 2011, the Stipulation was approved by the PUCO. An application for rehearing filed by Ohio Partners for Affordable Energy was denied by the PUCO on July 15, 2011.

On October 14, 2011, Duke Energy Ohio and Duke Energy Kentucky filed an application with the FERC to establish new wholesale customer rates for transmission service under PJM’s Open Access Transmission Tariff. In this filing, Duke Energy Ohio and Duke Energy Kentucky sought recovery of their legacy MTEP costs, including MVP costs, and submitted an analysis showing that the benefits of the RTO realignment outweigh the costs to the customers. The new rates went into effect, subject to refund, on January 1, 2012. Protests were filed by certain transmission customers. On April 24, 2012, FERC issued an order in which it, among other things, denied recovery of legacy MTEP costs without prejudice to the right of Duke Energy Ohio and Duke Energy Kentucky to make another filing including a more comprehensive cost-benefit analysis to support such recovery. Settlement discussions are underway with the relevant intervening parties that address matters raised in the initial October 14, 2011 filing.

On November 2, 2011, MISO, the MISO Transmission Owners, Duke Energy Ohio and Duke Energy Kentucky jointly submitted to the FERC a filing that addresses the treatment of MTEP costs, excluding MVP costs. The November 2, 2011 filing, which was accepted by the FERC on December 30, 2011, provides that the MISO Transmission Owners will continue to be obligated to construct the non-MVP MTEP projects, for which Duke Energy Ohio and Duke Energy Kentucky will continue to be obligated to pay a portion of the costs. Likewise, transmission customers serving load in MISO will continue to be obligated to pay a portion of the costs of a previously identified non-MVP MTEP project that Duke Energy Ohio has constructed.

On December 29, 2011, MISO filed with FERC a Schedule 39 to MISO’s tariff. Schedule 39 provides for the allocation of MVP costs to a withdrawing owner based on the owner’s actual transmission load after the owner’s withdrawal from MISO, or, if the owner fails to report such load, based on the owner’s historical usage in MISO assuming annual load growth. On January 19, 2012, Duke Energy Ohio and Duke Energy Kentucky filed with FERC a protest of the allocation of MVP costs to them under Schedule 39. On February 27, 2012, the FERC accepted Schedule 39 as a just and reasonable basis for MISO to charge for MVP costs, a transmission owner that withdraws from MISO after January 1, 2012. The FERC set for hearing whether MISO’s proposal to use the methodology in Schedule 39 to calculate the obligation of transmission owners who withdrew from MISO prior to January 1, 2012 (such as Duke Energy Ohio and Duke Energy Kentucky) to pay for MVP costs is consistent with the MVP-related withdrawal obligations in the tariff at the time that they withdrew from MISO, and, if not, what amount of, and methodology for calculating, any MVP cost responsibility should be. On March 28, 2012, Duke Energy Ohio and Duke Energy Kentucky filed a request for rehearing of FERC’s order on MISO’s Schedule 39. This hearing is expected to be scheduled for the first quarter of 2013.

On December 31, 2011, Duke Energy Ohio recorded a liability for its MISO exit obligation and share of MTEP costs, excluding MVP, of approximately $110 million. This liability was recorded within Other in Current liabilities and Other in Deferred credits and other liabilities on Duke Energy

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Ohio’s Condensed Consolidated Balance Sheets upon exit from MISO on December 31, 2011. Approximately $74 million of this amount was recorded as a regulatory asset while $36 million was recorded to Operation, maintenance and other in Duke Energy Ohio’s Condensed Consolidated Statements of Operations and Comprehensive Income.  In addition to the above amounts, Duke Energy Ohio may also be responsible for costs associated with MISO MVP projects. Duke Energy Ohio is contesting its obligation to pay for such costs. However, depending on the final outcome of this matter, Duke Energy Ohio could incur material costs associated with MVP projects, which are not reasonably estimable at this time. Regulatory accounting treatment will be pursued for any costs incurred in connection with the resolution of this matter.

The following table provides a reconciliation of the beginning and ending balance of Duke Energy Ohio’s recorded obligations related to its withdrawal from MISO:

	Balance at		Provision /		Cash		Balance at
(in millions)	December 31, 2011		Adjustments		Reductions		June 30, 2012
Duke Energy Ohio	$	110	$	2	$	(15)	$	97

Duke Energy Indiana Phase 2 Environmental Compliance Proceeding. On June 28, 2012, Duke Energy Indiana filed with the IURC a plan for the addition of certain environmental pollution control projects on several of  its coal-fired generating units in order to comply with existing and proposed environmental rules and regulations. The plan calls for a combination of selective catalytic reduction systems, dry sorbent injection systems for SO₃ mitigation, activated carbon injection systems and/or mercury re-emission chemical injection systems. The capital costs are estimated at $450 million (excluding AFUDC). Duke Energy Indiana also indicated that it preliminarily anticipates the retirement of Wabash River Units 2 through 5 in 2015 and is still evaluating future equipment additions or retirement of Wabash River Unit 6. A procedural schedule for the IURC proceeding has not been established.

Duke Energy Indiana Carbon Sequestration. Duke Energy Indiana filed a petition with the IURC requesting approval of its plans for studying carbon storage, sequestration and/or enhanced oil recovery for the carbon dioxide (CO₂) from the Edwardsport IGCC facility on March 6, 2009. On July 7, 2009, Duke Energy Indiana filed its case-in-chief testimony requesting approval for cost recovery of a $121 million site assessment and characterization plan for CO₂ sequestration options including deep saline sequestration, depleted oil and gas sequestration and enhanced oil recovery for the CO₂ from the Edwardsport IGCC facility. The OUCC filed testimony supportive of the continuing study of carbon storage, but recommended that Duke Energy Indiana break its plan into phases, recommending approval of only $33 million  in expenditures at this time and deferral of expenditures rather than cost recovery through a tracking mechanism as proposed by Duke Energy Indiana. The CAC, an intervenor, recommended against approval of the carbon storage plan stating customers should not be required to pay for research and development costs. Duke Energy Indiana’s rebuttal testimony was filed October 30, 2009, wherein it amended its request to seek deferral of $42 million to cover the carbon storage site assessment and characterization activities scheduled to occur through the end of 2010, with further required study expenditures subject to future IURC proceedings. An evidentiary hearing was held on November 9, 2009.

5. 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. Duke Energy Carolinas, Duke Energy Ohio and Duke Energy Indiana are subject to 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 the Duke Energy Registrants.

The following environmental matters impact all of the Duke Energy Registrants.

Remediation Activities. The Duke Energy Registrants are responsible for environmental remediation at various contaminated sites. These include some properties that are part of ongoing operations and sites formerly owned or used by Duke Energy entities. In some cases, Duke Energy no longer owns the property. Managed in conjunction with relevant federal, state and local agencies, activities vary with site conditions and locations, remediation requirements, complexity and sharing of responsibility. If remediation activities involve statutory joint and several liability provisions, strict liability, or cost recovery or contribution actions, the Duke Energy Registrants could potentially be held responsible for contamination caused by other parties. In some instances, the Duke Energy Registrants 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. Reserves associated with remediation activities at certain sites have been recorded and it is anticipated that additional costs associated with remediation activities at certain sites will be incurred in the future. All of these sites generally are managed in the normal course of business or affiliate operations. The Duke Energy Registrants have accrued 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 environmentally related contingencies and records liabilities when losses become probable and are reasonably estimable. Costs associated with remediation activities within the Duke Energy Registrants’ operations are typically expensed unless regulatory recovery of the costs is deemed probable.

As of June 30, 2012, Duke Energy Ohio had a total reserve of $22 million, related to remediation work at certain former manufactured gas plant (MGP) sites. Duke Energy Ohio has received an order from the PUCO to defer the costs incurred. As of June 30, 2012, Duke Energy Ohio has incurred and deferred $75 million of costs related to the MGP sites. The PUCO will rule on the recovery of these costs at a future proceeding. Management believes it is probable that additional liabilities will be incurred as work progresses at Ohio MGP sites; however, costs associated with future remediation cannot currently be reasonably estimated.

Clean Water Act 316(b). The EPA published its proposed cooling water intake structures rule on April 20, 2011. Duke Energy submitted comments on the proposed rule on August 16, 2011. The proposed rule advances one main approach and three alternatives. The main approach establishes aquatic protection requirements for existing facilities and new on-site facility additions that withdraw 2 million gallons or more of water per day from rivers, streams, lakes, reservoirs, estuaries, oceans, or other U.S. waters for cooling purposes. Based on the main approach proposed, most, if not all of the 22 coal and nuclear-fueled generating facilities in which the Duke Energy Registrants are either a whole or partial owner are likely affected sources. Additional sources, including some combined-cycle combustion turbine facilities, may also be impacted, at least for intake modifications.

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The EPA recently modified a previous settlement agreement that now calls for the EPA to finalize the 316(b) rule by June 2013. Compliance with portions of the rule could begin as early as 2016. Because of the wide range of potential outcomes, including the other three alternative proposals, the Duke Energy Registrants are unable to estimate its costs to comply at this time.

Cross-State Air Pollution Rule (CSAPR). On August 8, 2011, the final Cross-State Air Pollution Rule (CSAPR) was published in the Federal Register. The CSAPR established state-level annual SO₂ and NO_x budgets that were to take effect on January 1, 2012, and state-level ozone-season NO_x budgets that were to take effect on May 1, 2012, allocating emission allowances to affected sources in each state equal to the state budget less an allowance set-aside for new sources. The budget levels were set to decline in 2014 for many states, including each state that the Duke Energy Registrants operate in, except for South Carolina where the budget levels were to remain constant. The rule allowed both intrastate and interstate allowance trading.

Numerous petitions for review of the CSAPR and motions for stay of the CSAPR were filed with the United States Court of Appeals for the District of Columbia. On December 30, 2011, the court ordered a stay of the CSAPR pending the court’s resolution of the various petitions for review. Based on the court’s order, the EPA continues to administer the Clean Air Interstate Rule that the Duke Energy Registrants have been complying with since 2009 and which was to be replaced by the CSAPR beginning in 2012. Oral arguments in the case were held on April 13, 2012. A decision is expected in the third quarter of 2012.

The stringency of the 2012 and 2014 CSAPR requirements varied among the Duke Energy Registrants. Where the CSAPR requirements were to be constraining, activities to meet the requirements could include purchasing emission allowances, power purchases, curtailing generation and utilizing low sulfur fuel. The CSAPR was not expected to result in Duke Energy Registrants adding new emission controls. Technical adjustments to the CSAPR recently finalized by the EPA will not materially impact the Duke Energy Registrants. The Duke Energy Registrants cannot predict the outcome of the litigation or how it might affect the CSAPR requirements as they apply to the Duke Energy Registrants.

Coal Combustion Product (CCP) Management. Duke Energy currently estimates that it will spend $259 million ($78 million at Duke Energy Carolinas, $63 million at Duke Energy Ohio and $118 million at Duke Energy Indiana) over the period 2012-2016 to install synthetic caps and liners at existing and new CCP landfills and to convert some of its CCP handling systems from wet to dry systems to comply with current regulations. A significant portion of the estimated spending will be capitalized as property, plant and equipment, while certain of the costs are the result of a legal obligation as defined by accounting guidance applicable to asset retirement obligations. The Duke Energy Registrants expect to recover the costs associated with regulated operations through routine regulatory rate proceedings. The EPA and a number of states are considering additional regulatory measures that will contain specific and more detailed requirements for the management and disposal of CCPs, primarily ash, which will also impact the Duke Energy Registrants’ coal-fired power plants.

On June 21, 2010, the EPA issued a proposal to regulate, under the Resource Conservation and Recovery Act, coal combustion residuals (CCR), a term the EPA uses to describe the CCPs associated with the generation of electricity. The EPA proposal contains two regulatory options whereby CCRs not employed in approved beneficial use applications would either be regulated as hazardous waste or would continue to be regulated as non-hazardous waste. Duke Energy cannot predict the outcome of this rulemaking. However, based on the proposal, the cost of complying with the final regulation will be material. The timing of a final rule is uncertain, but is not expected before sometime in 2013 at the earliest. A lawsuit has been filed in federal court seeking an unspecified legal deadline for the EPA to issue a final rule. The EPA is opposing the imposition of a legal deadline.

Mercury and Air Toxics Standards (MATS). The final Mercury and Air Toxics Standards rule (previously referred to as the Utility MACT Rule) was published in the Federal Register on February 16, 2012. The final rule establishes emission limits for hazardous air pollutants, including mercury from new and existing coal-fired electric generating units. The rule requires sources to comply with the emission limits by April 16, 2015. Under the Clean Air Act, permitting authorities have the discretion to grant up to a 1-year compliance extension, on a case-by-case basis, to sources that are unable to complete the installation of emission controls before the compliance deadline. The Duke Energy Registrants are evaluating the requirements of the rule and developing strategies for complying with the rule’s requirements. Strategies to achieve compliance with the final MATS rules are likely to include installing new or upgrading existing air emission control equipment, developing monitoring processes and accelerating retirement of some coal-fired electric-generating units. For additional information, refer to Note 4, Regulatory Matters, regarding potential plant retirements.

Numerous petitions for review of the final MATS rule have been filed with the United States Court of Appeals for the District of Columbia. The court has not established a schedule for the litigation. The Duke Energy Registrants cannot predict the outcome of the litigation or how it might affect the MATS requirements as they apply to the Duke Energy Registrants.

As finalized, the cost to the Duke Energy Registrants to comply with the regulation will be material.

EPA Greenhouse Gas New Source Performance Standards (NSPS). On April 13, 2012, the EPA published in the Federal Register its proposed rule to establish carbon dioxide (CO₂) emissions standards for pulverized coal, IGCC, and natural gas combined cycle electric generating units that are permitted and constructed in the future. The proposal would not apply to any of the Duke Energy Registrants’ coal (which includes IGCC) and natural gas generation plants that are currently under construction or in operation. Any future pulverized coal and IGCC units will have to employ carbon capture and storage (CCS) technology to meet the CO₂ emission standard the EPA has proposed. The proposed standard will not require new natural gas combined cycle facilities to install CCS technology.

Management does not expect any material impact on the Duke Energy Registrants’ future results of operations or cash flows based on the EPA’s proposal. The final rule, however, could be significantly different from the proposal. It is not known when the EPA might finalize the rule.

Estimated Cost and Impacts of EPA Rulemakings. While the ultimate compliance requirements for the Duke Energy Registrants for MATS, Clean Water Act 316(b), CSAPR and CCRs will not be known until all the rules have been finalized, for planning purposes, the Duke Energy Registrants currently estimate that the cost of new control equipment that may need to be installed on existing power plants to comply with this group of rules could total $4.5 billion to $5 billion, excluding AFUDC, over the next 10 years. The Duke Energy Registrants also expect to incur increased fuel, purchased power, operation and maintenance, and other expenses in conjunction with these EPA regulations, and also expect to incur costs for replacement generation for potential coal plant retirements. Until the final regulatory requirements of the group of EPA regulations are known and can be fully evaluated, the potential compliance costs associated with these EPA regulatory actions are subject to considerable uncertainty. Therefore, the actual compliance costs incurred may be materially different from these estimates based on the timing and requirements of the final EPA regulations.

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The Duke Energy Registrants intend to seek regulatory recovery of amounts incurred associated with regulated operations in complying with these regulations. Refer to Note 4 for further information regarding potential plant retirements and regulatory filings related to the Duke Energy Registrants.

Litigation.

Duke Energy

Progress Energy Merger Shareholder Litigation. On July 20, 2012, Duke Energy was served with a shareholder Derivative Complaint filed in the Delaware Chancery Court (Rupp v. Rogers, et al). The lawsuit names as defendants Jim Rogers and the ten other members of the Duke Energy board of directors who were also members of the pre-merger Duke Energy board of directors (Legacy Duke Directors).  Duke Energy is named as a nominal defendant.  The lawsuit alleges claims for breach of fiduciary duties of loyalty and care by the defendants in connection with the post-merger change in CEO, as discussed in Note 4.

On August 3, 2012, Duke Energy was served with a second shareholder Derivative Complaint, which has been transferred to the North Carolina Business Court (Krieger v. Johnson, et al). The lawsuit names as defendants, William D. Johnson, James E. Rogers and the Legacy Duke Directors.  Duke Energy is named as a nominal defendant.  The lawsuit alleges claims for breach of fiduciary duty in granting excessive compensation to Mr. Johnson.

Duke Energy has also received three purported securities class action lawsuits.  The first case (Craig v. Duke Energy Corporation, et al,) was filed on July 24, 2012, in the United States District Court for the Eastern District of North Carolina, Western Division and is brought on behalf of all persons who purchased Duke Energy stock between June 28, 2012 and July 9, 2012.  The second case (Nieman v. Duke Energy Corporation, et al,) was filed on July 24, 2012, in the United States District Court for the Western District of North Carolina on behalf of all persons who exchanged shares of Progress Energy common stock for shares of Duke Energy common stock in connection with the merger.  The third case (Sunner v. Duke Energy Corporation, et al,) was filed on July 30, 2012, in the United States District Court for the Western District of North Carolina on behalf of all persons who purchased stock of Duke Energy between June 11, 2012 and July 9, 2012   All three of these lawsuits name as defendants the Legacy Duke Directors. The Craig and Nieman  cases also name certain officers of the company.  

It is not possible to predict whether Duke Energy will incur any liability or to estimate the damages, if any, that Duke Energy might incur in connection with these lawsuits. Additional lawsuits may be filed.

Alaskan Global Warming Lawsuit. On February 26, 2008, plaintiffs, the governing bodies of an Inupiat village in Alaska, filed suit in the U.S. Federal Court for the Northern District of California against Peabody Coal and various oil and power company defendants, including Duke Energy and certain of its subsidiaries. Plaintiffs brought the action on their own behalf and on behalf of the village’s 400 residents. The lawsuit alleges that defendants’ emissions of CO₂ contributed to global warming and constitute a private and public nuisance. Plaintiffs also allege that certain defendants, including Duke Energy, conspired to mislead the public with respect to global warming. The plaintiffs in the case have requested damages in the range of $95 million to $400 million related to the cost of relocating the Village of Kivalina. On June 30, 2008, the defendants filed a motion to dismiss on jurisdictional grounds, together with a motion to dismiss the conspiracy claims. On October 15, 2009, the District Court granted defendants motion to dismiss. The plaintiffs filed a notice of appeal and the Ninth Circuit Court of Appeals held argument in the case on November 28, 2011. Although Duke Energy believes the likelihood of loss is remote based on current case law, it is not possible to predict the ultimate outcome of this matter.

Price Reporting Cases. A total of five lawsuits were filed against Duke Energy affiliates and other energy companies and remain pending in a consolidated, single federal court proceeding in Nevada.

In November 2009, the judge granted defendants’ motion for reconsideration of the denial of defendants’ summary judgment motion in two of the remaining five cases to which Duke Energy affiliates are a party. A hearing on that motion occurred on July 15, 2011, and on July 19, 2011, the judge granted the motion for summary judgment. Plaintiffs have filed a notice of appeal to the U.S. Court of Appeals for the Ninth Circuit.

Each of these cases contains similar claims, that the respective plaintiffs, and the classes they claim to represent, were harmed by the defendants’ alleged manipulation of the natural gas markets by various means, including providing false information to natural gas trade publications and entering into unlawful arrangements and agreements in violation of the antitrust laws of the respective states. Plaintiffs seek damages in unspecified amounts. It is not possible to predict whether Duke Energy will incur any liability or to estimate the damages, if any, that Duke Energy might incur in connection with the remaining matters. However, based on Duke Energy’s past experiences with similar cases of this nature, it does not believe its exposure under these remaining matters is material.

Duke Energy International Paranapanema Lawsuit. On July 16, 2008, Duke Energy International Geracao Paranapanema S.A. (DEIGP) filed a lawsuit in the Brazilian federal court challenging transmission fee assessments imposed under two new resolutions promulgated by the Brazilian Electricity Regulatory Agency (ANEEL) (collectively, the Resolutions). The Resolutions purport to impose additional transmission fees (retroactive to July 1, 2004 and effective through June 30, 2009) on generation companies located in the State of São Paulo for utilization of the electric transmission system. The new charges are based upon a flat-fee that fails to take into account the locational usage by each generator. DEIGP’s additional assessment under these Resolutions amounts to approximately $59 million, inclusive of interest, through June 2012. Based on DEIGP’s continuing refusal to tender payment of the disputed sums, on April 1, 2009, ANEEL imposed an additional fine against DEIGP in the amount of $9 million. DEIGP filed a request to enjoin payment of the fine and for an expedited decision on the merits or, alternatively, an order requiring that all disputed sums be deposited in the court’s registry in lieu of direct payment to the distribution companies.

On June 30, 2009, the court issued a ruling in which it granted DEIGP’s request for injunction regarding the additional fine, but denied DEIGP’s request for an expedited decision on the original assessment or payment into the court registry. Under the court’s order, DEIGP was required to make installment payments on the original assessment directly to the distribution companies pending resolution on the merits. DEIGP filed an appeal and on August 28, 2009, the order was modified to allow DEIGP to deposit the disputed portion of each installment, which was most of the assessed amount, into an escrow account pending resolution on the merits. In the second quarter of 2009, Duke Energy recorded a pre-tax charge of $33 million associated with this matter.

Brazil Expansion Lawsuit. On August 9, 2011, the State of São Paulo filed a lawsuit in Brazilian state court against DEIGP based upon a claim that DEIGP is under a continuing obligation to expand installed generation capacity by 15% pursuant to a stock purchase agreement under which DEIGP purchased generation assets from the state. On August 10, 2011, a judge granted an ex parte injunction ordering DEIGP to present a detailed

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expansion plan in satisfaction of the 15% obligation.  DEIGP has previously taken a position that the 15% expansion obligation is no longer viable given the changes that have occurred in the electric energy sector since privatization of that sector. After filing various objections, defenses and appeals regarding the referenced order, DEIGP submitted its proposed expansion plan on November 11, 2011, but reserved its objections regarding enforceability. The parties will in due course present evidence to the court regarding their respective positions. No trial date has been set.

Crescent Litigation. On September 3, 2010, the Crescent Resources Litigation Trust filed suit against Duke Energy along with various affiliates and several individuals, including current and former employees of Duke Energy, in the U.S. Bankruptcy Court for the Western District of Texas. The Crescent Resources Litigation Trust was established in May 2010 pursuant to the plan of reorganization approved in the Crescent bankruptcy proceedings in the same court. The complaint alleges that in 2006 the defendants caused Crescent to borrow approximately $1.2 billion from a consortium of banks and immediately thereafter distribute most of the loan proceeds to Crescent’s parent company without benefit to Crescent. The complaint further alleges that Crescent was rendered insolvent by the transactions, and that the distribution is subject to recovery by the Crescent bankruptcy estate as an alleged fraudulent transfer. The plaintiff requests return of the funds as well as other statutory and equitable relief, punitive damages and attorneys’ fees. Duke Energy and its affiliated defendants believe that the referenced 2006 transactions were legitimate and did not violate any state or federal law. Defendants filed a motion to dismiss in December 2010. On March 21, 2011, the plaintiff filed a response to the defendant’s motion to dismiss and a motion for leave to file an amended complaint, which was granted. The Defendants filed a second motion to dismiss in response to plaintiffs’ amended complaint.

The plaintiffs filed a demand for a jury trial, a motion to transfer the case to the federal district court, and a motion to consolidate the case with a separate action filed by the plaintiffs against Duke Energy’s legal counsel. On March 22, 2012, the federal District Court issued an order denying the defendant’s motion to dismiss and granting the plaintiffs’ motions for transfer and consolidation. The court has not yet made a final ruling on whether the plaintiffs are entitled to a jury trial. Trial on this matter has been set to commence in January 2014. Duke Energy has agreed to participate in a mediation of this matter, currently scheduled for August 21 and 22, 2012.

It is not possible to predict whether Duke Energy will incur any liability or to estimate the damages, if any, that Duke Energy might incur in connection with this lawsuit.

Federal Advanced Clean Coal Tax Credits. Duke Energy Carolinas has been awarded $125 million of federal advanced clean coal tax credits associated with its construction of Cliffside Unit 6 and Duke Energy Indiana has been awarded $134 million of federal advanced clean coal tax credits associated with its construction of the Edwardsport IGCC plant. In March 2008, two environmental groups, Appalachian Voices and the Canary Coalition, filed suit against the Federal government challenging the tax credits awarded to incentivize certain clean coal projects. Although Duke Energy was not a party to the case, the allegations center on the tax incentives provided for the Cliffside and Edwardsport projects. The initial complaint alleged a failure to comply with the National Environmental Policy Act. The first amended complaint, filed in August 2008, added an Endangered Species Act claim and also sought declaratory and injunctive relief against the DOE and the U.S. Department of the Treasury. In 2008, the District Court dismissed the case. On September 23, 2009, the District Court issued an order granting plaintiffs’ motion to amend their complaint and denying, as moot, the motion for reconsideration. Plaintiffs have filed their second amended complaint. The Federal government has moved to dismiss the second amended complaint; the motion is pending. On July 26, 2010, the District Court denied plaintiffs’ motion for preliminary injunction seeking to halt the issuance of the tax credits.

Duke Energy Carolinas

New Source Review (NSR). In 1999-2000, the DOJ, acting on behalf of the EPA and joined by various citizen groups and states, filed a number of complaints and notices of violation against multiple utilities across the country for alleged violations of the NSR provisions of the CAA. Generally, the government alleges that projects performed at various coal-fired units were major modifications, as defined in the CAA, and that the utilities violated the CAA when they undertook those projects without obtaining permits and installing the best available emission controls for SO₂, NO_x and particulate matter. The complaints seek injunctive relief to require installation of pollution control technology on various generating units that allegedly violated the CAA, and unspecified civil penalties in amounts of up to $32,500 per day for each violation. A number of Duke Energy Carolinas’ plants have been subject to these allegations. Duke Energy Carolinas asserts that there were no CAA violations because the applicable regulations do not require permitting in cases where the projects undertaken are “routine” or otherwise do not result in a net increase in emissions.

In 2000, the government brought a lawsuit against Duke Energy Carolinas in the U.S. District Court in Greensboro, North Carolina. The EPA claims that 29 projects performed at 25 of Duke Energy Carolinas’ coal-fired units violate these NSR provisions. Three environmental groups have intervened in the case. In August 2003, the trial court issued a summary judgment opinion adopting Duke Energy Carolinas’ legal positions on the standard to be used for measuring an increase in emissions, and granted judgment in favor of Duke Energy Carolinas. The trial court’s decision was appealed and ultimately reversed and remanded for trial by the U.S. Supreme Court. At trial, Duke Energy Carolinas will continue to assert that the projects were routine or not projected to increase emissions. On February 11, 2011, the trial judge held an initial status conference and on March 22, 2011, the judge entered an interim scheduling order. The parties have filed a stipulation in which the United States and Plaintiff-Intervenors have dismissed with prejudice 16 claims. In exchange, Duke Energy Carolinas dismissed certain affirmative defenses. The parties have filed motions for summary judgment on the remaining claims. No trial date has been set, but a trial is not expected until the second half of 2012, at the earliest.

It is not possible to estimate the damages, if any, that might be incurred in connection with the unresolved matters related to Duke Energy Carolinas discussed above. Ultimate resolution of these matters could have a material effect on the consolidated results of operations, cash flows or financial position of Duke Energy Carolinas. However, the appropriate regulatory treatment will be pursued for any costs incurred in connection with such resolution.

Asbestos-related Injuries and Damages Claims. Duke Energy Carolinas has experienced numerous claims for indemnification and medical cost reimbursement relating to damages for bodily injuries alleged to have arisen from the exposure to or use of asbestos in connection with construction and maintenance activities conducted on its electric generation plants prior to 1985. As of June 30, 2012, there were 188 asserted claims for non-malignant cases with the cumulative relief sought of up to $47 million, and 58 asserted claims for malignant cases with the cumulative relief sought of up to $21 million. Based on Duke Energy Carolinas’ experience, it is expected that the ultimate resolution of most of these claims likely will be less than the amount claimed.

Amounts recognized as asbestos-related reserves related to Duke Energy Carolinas in the respective Condensed Consolidated Balance Sheets totaled $776 million and $801 million as of June 30, 2012 and December 31, 2011, respectively, and are classified in Other within Deferred Credits and Other Liabilities and Other within Current Liabilities. These reserves are based upon the minimum amount in Duke Energy Carolinas’ best estimate of

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DUKE ENERGY INDIANA, INC.

Combined Notes To Unaudited Condensed Consolidated Financial Statements - (Continued)

the range of loss for current and future asbestos claims through 2030. Management believes that it is possible there will be additional claims filed against Duke Energy Carolinas after 2030. In light of the uncertainties inherent in a longer-term forecast, management does not believe that they can reasonably estimate the indemnity and medical costs that might be incurred after 2030 related to such potential claims. Asbestos-related loss estimates incorporate anticipated inflation, if applicable, and are recorded on an undiscounted basis. These reserves are based upon current estimates and are subject to greater uncertainty as the projection period lengthens. A significant upward or downward trend in the number of claims filed, the nature of the alleged injury, and the average cost of resolving each such claim could change our estimated liability, as could any substantial or favorable verdict at trial. A federal legislative solution, further state tort reform or structured settlement transactions could also change the estimated liability. Given the uncertainties associated with projecting matters into the future and numerous other factors outside our control, management believes that it is possible Duke Energy Carolinas may incur asbestos liabilities in excess of the recorded reserves.

Duke Energy Carolinas has a third-party insurance policy to cover certain losses related to asbestos-related injuries and damages above an aggregate self insured retention of $476 million. Duke Energy Carolinas’ cumulative payments began to exceed the self insurance retention on its insurance policy in 2008. Future payments up to the policy limit will be reimbursed by Duke Energy Carolinas’ third party insurance carrier. The insurance policy limit for potential future insurance recoveries for indemnification and medical cost claim payments is $968 million in excess of the self insured retention. Insurance recoveries of $813 million related to this policy are classified in the respective Condensed Consolidated Balance Sheets in Other within Investments and Other Assets and Receivables as of both June 30, 2012 and December 31, 2011, respectively. Duke Energy Carolinas is not aware of any uncertainties regarding the legal sufficiency of insurance claims. Management believes the insurance recovery asset is probable of recovery as the insurance carrier continues to have a strong financial strength rating.

Duke Energy Ohio

Antitrust Lawsuit. In January 2008, four plaintiffs, including individual, industrial and nonprofit customers, filed a lawsuit against Duke Energy Ohio in federal court in the Southern District of Ohio. Plaintiffs alleged that Duke Energy Ohio (then The Cincinnati Gas & Electric Company), conspired to provide inequitable and unfair price advantages for certain large business consumers by entering into non-public option agreements with such consumers in exchange for their withdrawal of challenges to Duke Energy Ohio’s pending Rate Stabilization Plan (RSP), which was implemented in early 2005. On March 31, 2009, the District Court granted Duke Energy Ohio’s motion to dismiss. Plaintiffs filed a motion to alter or set aside the judgment, which was denied by an order dated March 31, 2010. In April 2010, the plaintiffs filed their appeal of that order with the U.S. Court of Appeals for the Sixth Circuit, which heard argument on that appeal on January 11, 2012. On June 4, 2012, the Sixth Circuit Court of Appeals reversed the district court’s decision and remanded the matter on all claims for trial on the merits and on July 25, 2012, the Court denied Duke Energy Ohio’s petition for an en banc review of the case. It is not possible to predict at this time whether Duke Energy Ohio will incur any liability or to estimate the damages, if any, that Duke Energy Ohio might incur in connection with this lawsuit.

Asbestos-related Injuries and Damages Claims. Duke Energy Ohio has been named as a defendant or co-defendant in lawsuits related to asbestos at its electric generating stations. The impact on Duke Energy Ohio’s consolidated results of operations, cash flows or financial position of these cases to date has not been material. Based on estimates under varying assumptions concerning uncertainties, such as, among others: (i) the number of contractors potentially exposed to asbestos during construction or maintenance of Duke Energy Ohio generating plants; (ii) the possible incidence of various illnesses among exposed workers, and (iii) the potential settlement costs without federal or other legislation that addresses asbestos tort actions, Duke Energy Ohio estimates that the range of reasonably possible exposure in existing and future suits over the foreseeable future is not material. This estimated range of exposure may change as additional settlements occur and claims are made and more case law is established.

Other Litigation and Legal Proceedings.

The Duke Energy Registrants are involved in other legal, tax and regulatory proceedings arising in the ordinary course of business, some of which involve substantial amounts. Management believes that the final disposition of these proceedings will not have a material effect on its consolidated results of operations, cash flows or financial position.

The Duke Energy Registrants expense legal costs related to the defense of loss contingencies as incurred.

The Duke Energy Registrants have exposure to certain legal matters that are described herein. The Duke Energy Registrants have recorded reserves for these proceedings and exposures as presented in the table below. These reserves represent management’s best estimate of probable loss as defined in the accounting guidance for contingencies. The estimated reasonably possible range of loss for non-asbestos related matters in excess of the recorded reserves is not material. Duke Energy has insurance coverage for certain of these losses incurred as presented in the table below.

(in millions)		June 30, 2012		December 31, 2011
Reserves for Legal Matters(a)
Duke Energy(b)		$	792	$	810
Duke Energy Carolinas(b)			776		801
Duke Energy Indiana			8		4
Probable Insurance Recoveries(c)
Duke Energy(d)		$	813	$	813
Duke Energy Carolinas(d)			813		813
(a)	Reserves are classified in the respective Condensed Consolidated Balance Sheets in Other within Deferred Credits and Other Liabilities and Other within Current Liabilities.
(b)	Includes reserves for aforementioned asbestos-related injuries and damages claims.
(c)	Insurance recoveries are classified in the respective Condensed Consolidated Balance Sheets in Other within Investments and Other Assets and Receivables.
(d)	Relates to recoveries associated with aforementioned asbestos-related injuries and damages claims.

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DUKE ENERGY INDIANA, INC.

Combined Notes To Unaudited Condensed Consolidated Financial Statements - (Continued)

Other Commitments and Contingencies

General.

As part of its normal business, the Duke Energy Registrants are a party to various financial guarantees, performance guarantees and other contractual commitments to extend guarantees of credit and other assistance to various subsidiaries, investees and other third parties. To varying degrees, these guarantees involve elements of performance and credit risk, which are not included on the respective Condensed Consolidated Balance Sheets. The possibility of any of the Duke Energy Registrants having to honor their contingencies is largely dependent upon future operations of various subsidiaries, investees and other third parties, or the occurrence of certain future events.

In addition, the Duke Energy Registrants enter into various fixed-price, non-cancelable commitments to purchase or sell power (tolling arrangements or power purchase contracts), take-or-pay arrangements, transportation or throughput agreements and other contracts that may or may not be recognized on the respective Condensed Consolidated Balance Sheets. Some of these arrangements may be recognized at fair value on the respective Condensed Consolidated Balance Sheets if such contracts meet the definition of a derivative and the normal purchase normal sale (NPNS) exception does not apply.

6. Debt and Credit Facilities

Significant changes to the Duke Energy Registrants’ debt and credit facilities since December 31, 2011 are as follows:

First Mortgage Bonds. In March 2012, Duke Energy Indiana issued $250 million principal amount of first mortgage bonds, which carry a fixed interest rate of 4.20% and mature March 15, 2042. Proceeds from the issuances were used to repay a portion of Duke Energy Indiana’s outstanding short-term debt.

Other Debt.DS Cornerstone, LLC, a 50/50 joint venture entity with a third-party joint venture partner, owns two wind generation projects and has executed a third party financing against the two wind generation projects. In April 2012, Duke Energy and SCOA negotiated a $330 million, Construction and 12-year amortizing Term Loan Facility, on behalf of the borrower, a wholly owned subsidiary of the joint venture. The loan agreement is non-recourse to Duke Energy. Duke Energy received proceeds of $319 million upon execution of the loan agreement. This amount represents reimbursement of a significant portion of Duke Energy’s construction costs incurred as of the date of the agreement.

In January 2012, Duke Energy Carolinas used proceeds from its December 2011 $1 billion issuance of principal amount of first mortgage bonds to repay $750 million 6.25% senior unsecured notes that matured January 15, 2012.

In the first quarter of 2012, Duke Energy completed the previously announced sale of International Energy’s indirect 25% ownership interest in Attiki Gas Supply, S.A (Attiki), a Greek corporation, to an existing equity owner in a series of transactions that resulted in the full discharge of the related debt obligation. No gain or loss was recognized on these transactions. As of December 31, 2011, Duke Energy’s investment balance was $64 million and the related debt obligation of $64 million was reflected in Current Maturities of Long-Term Debt on Duke Energy’s Condensed Consolidated Balance Sheets.

On April 4, 2011, Duke Energy filed a registration statement (Form S-3) with the SEC to sell up to $1 billion of variable denomination floating rate demand notes, called PremierNotes. The Form S-3 states that no more than $500 million of the notes will be outstanding at any particular time. The notes are offered on a continuous basis and bear interest at a floating rate per annum determined by the Duke Energy PremierNotes Committee, or its designee, on a weekly basis. The interest rate payable on notes held by an investor may vary based on the principal amount of the investment. The notes have no stated maturity date, but may be redeemed in whole or in part by Duke Energy at any time. The notes are non-transferable and may be redeemed in whole or in part at the investor’s option. Proceeds from the sale of the notes will be used for general corporate purposes. The balance as of June 30, 2012 and December 31, 2011, is $209 million and $79 million, respectively. The notes reflect a short-term debt obligation of Duke Energy and are reflected as Notes payable and commercial paper on Duke Energy’s Condensed Consolidated Balance Sheets.

At June 30, 2012 Duke Energy had $250 million principal amount of 5.65% senior notes due June 2013 classified as Current maturities of long-term debt on Duke Energy’s Condensed Consolidated Balance Sheets. At December 31, 2011, these notes were classified as Long-term Debt on Duke Energy’s Condensed Consolidated Balance Sheets. Duke Energy currently anticipates satisfying this obligation with proceeds from additional borrowings.

At June 30, 2012 and December 31, 2011, Duke Energy Carolinas had $400 million principal amount of 5.625% senior unsecured notes due November 2012 classified as Current maturities of long-term debt on its Condensed Consolidated Balance Sheets. Duke Energy Carolinas currently anticipates satisfying this obligation with proceeds from additional borrowings.

At June 30, 2012 and December 31, 2011, Duke Energy Ohio had $500 million principal amount of 5.70% debentures due September 2012 classified as Current maturities of long-term debt on its Condensed Consolidated Balance Sheets. Duke Energy currently anticipates satisfying this obligation with proceeds from additional borrowings, in connection with the Duke Energy Ohio generation asset transfer, as discussed in Note 4.

At June 30, 2012 Duke Energy Ohio had $250 million principal amount of 2.10% first mortgage bonds due June 2013 classified as Current maturities of long-term debt on Duke Energy Ohio’s Condensed Consolidated Balance Sheets. At December 31, 2011, these notes were classified as Long-term Debt on Duke Energy Ohio’s Condensed Consolidated Balance Sheets. Duke Energy Ohio currently anticipates satisfying this obligation with proceeds from additional borrowings.

Non-Recourse Notes Payable of VIEs. To fund the purchase of receivables, CRC borrows from third parties and such borrowings fluctuate based on the amount of receivables sold to CRC. The borrowings are secured by the assets of CRC and are non-recourse to Duke Energy. The debt is short-term because the facility has an expiration date of October 2012. At June 30, 2012 and December 31, 2011, CRC borrowings were $269 million and $273 million, respectively, and are reflected as Non-recourse notes payable of VIEs on Duke Energy’s Condensed Consolidated Balance Sheets.

Money Pool. The Subsidiary Registrants receive support for their short-term borrowing needs through participation with Duke Energy and certain of its subsidiaries in a money pool arrangement. Under this arrangement, those companies with short-term funds may provide short-term loans to affiliates participating under this arrangement. The money pool is structured such that the Subsidiary Registrants separately manage their cash needs and working capital requirements. Accordingly, there is no net settlement of receivables and payables between the money pool participants. Per the terms of the money pool arrangement, the parent company, Duke Energy may loan funds to its participating subsidiaries, but may not borrow funds

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DUKE ENERGY CORPORATION - DUKE ENERGY CAROLINAS, LLC - DUKE ENERGY OHIO, INC. -

DUKE ENERGY INDIANA, INC.

Combined Notes To Unaudited Condensed Consolidated Financial Statements - (Continued)

through the money pool. Accordingly, as the money pool activity is between Duke Energy and its wholly owned subsidiaries, all money pool balances are eliminated within Duke Energy’s Condensed Consolidated Balance Sheets. The following table shows the Subsidiary Registrants’ money pool balances and classification within their respective Condensed Consolidated Balance Sheets:

	June 30, 2012						December 31, 2011
(in millions)	Receivables		Notes Payable		Long-term Debt		Receivables		Notes Payable		Long-term Debt
Duke Energy Carolinas	$	244	$	―	$	300	$	923	$	―	$	300
Duke Energy Ohio		181		―		―		311		―		―
Duke Energy Indiana		―		113		150		―		300		150

Increases or decreases in money pool receivables are reflected within investing activities on the respective Subsidiary Registrants’ Condensed Consolidated Statements of Cash Flows, while increases or decreases in money pool borrowings are reflected within financing activities on the respective Subsidiary Registrants Condensed Consolidated Statements of Cash Flows.

Available Credit Facilities. In November 2011, Duke Energy entered into a new $6 billion, five-year master credit facility, with $4 billion available at closing and the remaining $2 billion became effective July 2, 2012, following the closing of the merger with Progress Energy. The Duke Energy Registrants each have borrowing capacity under the master credit facility up to specified sublimits for each borrower. However, Duke Energy has the unilateral ability at any time to increase or decrease the borrowing sublimits of each borrower, subject to a maximum sublimit for each borrower. See the table below for the borrowing sublimits for each of the borrowers as of June 30, 2012. The amount available under the master credit facility has been reduced, as indicated in the table below, by the use of the master credit facility to backstop the issuances of commercial paper, letters of credit and certain tax-exempt bonds. As indicated, borrowing sub limits for the Subsidiary Registrants are also reduced for certain amounts outstanding under the money pool arrangement.

This summary only includes Duke Energy’s master credit facility and, accordingly excludes certain demand facilities and committed facilities that are immaterial in size or which generally support very specific requirements, which primarily include facilities that backstop various outstanding tax-exempt bonds. These facilities that backstop various outstanding tax-exempt bonds generally have non-cancelable terms in excess of one year from the balance sheet date, such that the Duke Energy Registrants have the ability to refinance such borrowings on a long-term basis. Accordingly, such borrowings are reflected as Long-term Debt on the Condensed Consolidated Balance Sheets of the respective Duke Energy Registrant.

		June 30, 2012
(in millions)		Duke Energy (Parent)		Duke Energy Carolinas		Duke Energy Ohio		Duke Energy Indiana		Total Duke Energy
Facility Size		$	1,250	$	1,250	$	750	$	750	$	4,000
	Notes Payable and Commercial Paper		(518)		(300)		―		(216)		(1,034)
	Outstanding Letters of Credit		(20)		(7)		―		―		(27)
	Tax-Exempt Bonds		―		(95)		(84)		(81)		(260)
Available Capacity		$	712	$	848	$	666	$	453	$	2,679

Restrictive Debt Covenants. The Duke Energy Registrants’ debt and credit agreements contain various financial and other covenants. The master credit facility contains a covenant requiring the debt-to-total capitalization ratio to not exceed 65% for each borrower. Failure to meet those covenants beyond applicable grace periods could result in accelerated due dates and/or termination of the agreements. As of June 30, 2012, each of the Duke Energy Registrants were in compliance with all covenants related to its significant debt agreements. In addition, some credit agreements may allow for acceleration of payments or termination of the agreements due to nonpayment, or the acceleration of other significant indebtedness of the borrower or some of its subsidiaries. None of the significant debt or credit agreements contain material adverse change clauses.

7. Goodwill

On July 2, 2012, Duke Energy completed the previously announced merger with Progress Energy, which will result in incremental goodwill to Duke Energy in the third quarter of 2012.  See Note 2 for additional information.

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DUKE ENERGY INDIANA, INC.

Combined Notes To Unaudited Condensed Consolidated Financial Statements - (Continued)

Goodwill
	The following tables show goodwill by reportable operating segment for Duke Energy and Duke Energy Ohio:
Duke Energy
(in millions)		USFE&G		Commercial Power		International Energy		Total
Balance at December 31, 2011:
Goodwill		$	3,483	$	940	$	297	$	4,720
Accumulated Impairment Charges			―		(871)		―		(871)
Balance at December 31, 2011, as adjusted for accumulated impairment charges			3,483		69		297		3,849
Balance at June 30, 2012:
Goodwill			3,483		940		297		4,720
Accumulated Impairment Charges			―		(871)		―		(871)
Foreign Exchange and Other Changes			―		―		(7)		(7)
Balance at June 30, 2012, as adjusted for       accumulated impairment charges		$	3,483	$	69	$	290	$	3,842

Duke Energy Ohio
(in millions)	Franchised Electric & Gas		Commercial Power		Total
Balance at December 31, 2011:
Goodwill	$	1,137	$	1,188	$	2,325
Accumulated Impairment Charges		(216)		(1,188)		(1,404)
Balance at December 31, 2011, as adjusted for accumulated impairment charges		921		―		921
Balance at June 30, 2012:
Goodwill		1,137		1,188		2,325
Accumulated Impairment Charges		(216)		(1,188)		(1,404)
Balance at June 30, 2012, as adjusted for accumulated impairment charges	$	921	$	―	$	921

8. Risk Management, Derivative Instruments and Hedging Activities

The Duke Energy Registrants utilize various derivative instruments to manage risks primarily associated with commodity prices and interest rates. The primary use of energy commodity derivatives is to hedge the generation portfolio against exposure to changes in the prices of power and fuel. Interest rate derivatives are entered into to manage interest rate risk associated with variable-rate and fixed-rate borrowings.

Certain derivative instruments qualify for hedge accounting and are designated as either cash flow hedges or fair value hedges, while others either do not qualify as accounting hedges (such as economic hedges) or have not been designated as hedges (hereinafter referred to as undesignated contracts). All derivative instruments not meeting the criteria for the NPNS exception are recognized as either assets or liabilities at fair value in the Condensed Consolidated Balance Sheets. As the regulated operations of the Duke Energy Registrants meet the criteria for regulatory accounting treatment, the majority of the derivative contracts entered into by the regulated operations are not designated as hedges since gains and losses on such contracts are deferred as regulatory liabilities and assets, respectively. Thus there is no immediate earnings impact associated with changes in fair values of such derivative contracts.

For derivative instruments that qualify and are designated 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 qualify and are designated 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. Any gains or losses on the derivative are included in the same line item as the offsetting loss or gain on the hedged item in the Condensed Consolidated Statements of Operations for Duke Energy, or in the Condensed Consolidated Statements of Comprehensive Income for Duke Energy Carolinas, Duke Energy Ohio, and Duke Energy Indiana.

Information presented in the tables below relates to Duke Energy and Duke Energy Ohio. Separate disclosure for Duke Energy Carolinas and Duke Energy Indiana are not always presented as regulatory accounting treatment is applied to substantially all of their derivative instruments.

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DUKE ENERGY CORPORATION - DUKE ENERGY CAROLINAS, LLC - DUKE ENERGY OHIO, INC. -

DUKE ENERGY INDIANA, INC.

Combined Notes To Unaudited Condensed Consolidated Financial Statements - (Continued)

Commodity Price Risk

The Duke Energy Registrants are exposed to the impact of market changes in the future prices of electricity (energy, capacity and financial transmission rights), coal, natural gas and emission allowances (SO₂ , seasonal NO_X and annual NO_X) as a result of their energy operations such as electricity generation and the transportation and sale of natural gas. With respect to commodity price risks associated with electricity generation, the Duke Energy Registrants are exposed to changes including, but not limited to, the cost of the coal and natural gas used to generate electricity, the prices of electricity in wholesale markets, the cost of capacity and electricity purchased for resale in wholesale markets and the cost of emission allowances primarily at the Duke Energy Registrants’ coal fired power plants. Risks associated with commodity price changes on future operations are closely monitored and, where appropriate, various commodity contracts are used to mitigate the effect of such fluctuations on operations. Exposure to commodity price risk is influenced by a number of factors, including, but not limited to, the term of the contract, the liquidity of the market and delivery location.

Commodity Fair Value Hedges.At June 30, 2012, there were no open commodity derivative instruments that were designated as fair value hedges.

Commodity Cash Flow Hedges. At June 30, 2012, there were no open commodity derivative instruments that were designated as cash flow hedges.

Undesignated Contracts.  The Duke Energy Registrants use derivative contracts as economic hedges to manage the market risk exposures that arise from providing electricity generation and capacity to large energy customers, energy aggregators, retail customers and other wholesale companies. Undesignated contracts may include contracts not designated as a hedge, contracts that do not qualify for hedge accounting, derivatives that do not or no longer qualify for the NPNS scope exception, and de-designated hedge contracts. Undesignated contracts also include contracts associated with operations that Duke Energy continues to wind down or has included as discontinued operations. As these undesignated contracts expire as late as 2021, Duke Energy has entered into economic hedges that leave it minimally exposed to changes in prices over the duration of these contracts.

Duke Energy Carolinas uses derivative contracts as economic hedges to manage the market risk exposures that arise from electricity generation. As of June 30, 2012, Duke Energy Carolinas does not have undesignated commodity derivatives.

Duke Energy Ohio uses derivative contracts as economic hedges to manage the market risk exposures that arise from providing electricity generation and capacity to large energy customers, energy aggregators, retail customers and other wholesale companies. Undesignated contracts at June 30, 2012 are primarily associated with forward sales and purchases of power, coal and emission allowances, for the Commercial Power segment.

Duke Energy Indiana uses derivative contracts as economic hedges to manage the market risk exposures that arise from electricity generation. Undesignated contracts at June 30, 2012 are primarily associated with forward purchases and sales of power, financial transmission rights and emission allowances.

Interest Rate Risk

The Duke Energy Registrants are exposed to risk resulting from changes in interest rates as a result of their issuance or anticipated issuance of variable and fixed-rate debt and commercial paper. Interest rate exposure is managed by limiting variable-rate exposures to a percentage of total debt and by monitoring the effects of market changes in interest rates. To manage risk associated with changes in interest rates, the Duke Energy Registrants may enter into financial contracts; primarily interest rate swaps and U.S. Treasury lock agreements. Additionally, in anticipation of certain fixed-rate debt issuances, a series of forward starting interest rate swaps may be executed to lock in components of the market interest rates at the time and terminated prior to or upon the issuance of the corresponding debt. When these transactions occur within a business that meets the criteria for regulatory accounting treatment, these contracts may be treated as undesignated and any pre-tax gain or loss recognized from inception to termination of the hedges would be recorded as a regulatory liability or asset and amortized as a component of interest expense over the life of the debt. Alternatively, these derivatives may be designated as hedges whereby, any pre-tax gain or loss recognized from inception to termination of the hedges would be recorded in AOCI and amortized as a component of interest expense over the life of the debt.

The following table shows the notional amounts for derivatives related to interest rate risk:

Notional Amounts of Derivative Instruments Related to Interest Rate
		Duke Energy		Duke Energy Carolinas		Duke Energy Ohio		Duke Energy Indiana
(in millions)		June 30, 2012
Cash Flow Hedges(a)		$	1,130	$	―	$	―	$	―
Undesignated Contracts			243		―		27		200
Fair Value Hedges			275		25		250		―
	Total Notional Amount	$	1,648	$	25	$	277	$	200
(in millions)		December 31, 2011
Cash Flow Hedges(a)		$	841	$	―	$	―	$	―
Undesignated Contracts			247		―		27		200
Fair Value Hedges			275		25		250		―
	Total Notional Amount	$	1,363	$	25	$	277	$	200
(a)	Includes amounts related to non-recourse variable rate long-term debt of VIEs of $755 million at June 30, 2012 and $466 million at December 31, 2011.

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DUKE ENERGY INDIANA, INC.

Combined Notes To Unaudited Condensed Consolidated Financial Statements - (Continued)

Volumes

The following tables show information relating to the volume of Duke Energy and Duke Energy Ohio’s outstanding commodity derivative activity. Amounts disclosed represent the notional volumes of commodities contracts accounted for at fair value. For option contracts, notional amounts include only the delta-equivalent volumes which represent the notional volumes times the probability of exercising the option based on current price volatility. Volumes associated with contracts qualifying for the NPNS exception have been excluded from the table below. Amounts disclosed represent the absolute value of notional amounts. Duke Energy and Duke Energy Ohio have netted contractual amounts where offsetting purchase and sale contracts exist with identical delivery locations and times of delivery. Where all commodity positions are perfectly offset, no quantities are shown below. For additional information on notional dollar amounts of debt subject to derivative contracts accounted for at fair value, see “Interest Rate Risk” section above.

Underlying Notional Amounts for Commodity Derivative Instruments Accounted for At Fair Value
		Duke Energy		Duke Energy Ohio
		June 30, 2012
Commodity contracts
Electricity-energy (Gigawatt-hours)(a)			10,751		6,773
Emission allowances NOX  (thousands of tons)			3		3
Natural gas (millions of decatherms)			30		21
		December 31, 2011
Commodity contracts
Electricity-energy (Gigawatt-hours)(a)			14,118		14,655
Emission allowances NOX  (thousands of tons)			9		9
Natural gas (millions of decatherms)			40		2
(a)	Amounts at Duke Energy Ohio include intercompany positions that are eliminated at Duke Energy.

	The following tables show fair value amounts of derivative contracts, and the line item(s) in the Condensed Consolidated Balance Sheets
in which such amounts are included. The fair values of derivative contracts are presented on a gross basis, even when the derivative instruments are subject to master netting arrangements where Duke Energy nets the fair value of derivative contracts subject to master netting arrangements with the same counterparty on the Condensed Consolidated Balance Sheets. Cash collateral payables and receivables associated with the derivative contracts have not been netted against the fair value amounts.
Location and Fair Value Amounts of Derivatives Reflected in the Condensed Consolidated Balance Sheets
		Duke Energy				Duke Energy Ohio
		June 30, 2012
(in millions)		Asset		Liability		Asset		Liability
Derivatives Designated as Hedging Instruments
Interest rate contracts
Current Assets: Other		$	4	$	―	$	4	$	―
Current Liabilities: Other			―		14		―		―
Deferred Credits and Other Liabilities: Other			―		99		―		―
Total Derivatives Designated as Hedging Instruments		$	4	$	113	$	4	$	―
Derivatives Not Designated as Hedging Instruments
Commodity contracts
Current Assets: Other(a)		$	192	$	124	$	184	$	131
Investments and Other Assets: Other			17		―		18		1
Current Liabilities: Other			4		49		3		12
Deferred Credits and Other Liabilities: Other			49		103		47		59
Interest rate contracts
Current Liabilities: Other			―		2		―		1
Deferred Credits and Other Liabilities: Other(b)			―		84		―		8
Total Derivatives Not Designated as Hedging Instruments		$	262	$	362	$	252	$	212
Total Derivatives		$	266	$	475	$	256	$	212
(a)	Amount at Duke Energy includes $23 million related to commodity contracts at Duke Energy Indiana which receive regulatory accounting treatment.
(b)	Amount at Duke Energy includes $76 million related to interest rate swaps at Duke Energy Indiana which receive regulatory accounting treatment.

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DUKE ENERGY INDIANA, INC.

Combined Notes To Unaudited Condensed Consolidated Financial Statements - (Continued)

		Duke Energy				Duke Energy Ohio
		December 31, 2011
(in millions)		Asset		Liability		Asset		Liability
Derivatives Designated as Hedging Instruments
Interest rate contracts
Current Assets: Other		$	4	$	―	$	3	$	―
Investments and Other Assets: Other			2		―		2		―
Current Liabilities: Other			―		11		―		―
Deferred Credits and Other Liabilities: Other			―		76		―		―
Total Derivatives Designated as Hedging Instruments		$	6	$	87	$	5	$	―
Derivatives Not Designated as Hedging Instruments
Commodity contracts
Current Assets: Other		$	81	$	31	$	79	$	39
Investments and Other Assets: Other			35		17		29		18
Current Liabilities: Other			136		168		136		146
Deferred Credits and Other Liabilities: Other			25		93		22		33
Interest rate contracts
Current Liabilities: Other			―		2		―		1
Deferred Credits and Other Liabilities: Other(a)			―		75		―		8
Total Derivatives Not Designated as Hedging Instruments		$	277	$	386	$	266	$	245
Total Derivatives		$	283	$	473	$	271	$	245
(a)	Amounts at Duke Energy include $67 million related to interest rate swaps at Duke Energy Indiana which receive regulatory accounting treatment.

	The following table shows the amount of the gains and losses recognized on derivative instruments designated and qualifying as
cash flow hedges by type of derivative contract, and the Condensed Consolidated Statements of Operations line items in which such gains and losses are included for Duke Energy.
Cash Flow Hedges—Location and Amount of Pre-Tax Gains (Losses) Recognized in Comprehensive Income
		Three Months Ended
		June 30,
(in millions)		2012		2011
Pre-tax Gains (Losses) Recorded in AOCI
Interest rate contracts		$	(44)	$	(10)
Total Pre-tax Gains (Losses) Recorded in AOCI		$	(44)	$	(10)
Location of Pre-tax Gains (Losses) Reclassified from AOCI into Earnings(a)
Interest rate contracts
Interest expense		$	(1)	$	(2)
Total Pre-tax Gains (Losses) Reclassified from AOCI into Earnings		$	(1)	$	(2)
(a)	Represents the gains and losses on cash flow hedges previously recorded in AOCI during the term of the hedging relationship and reclassified into earnings during the current period.

		Six Months Ended
		June 30,
(in millions)		2012		2011
Pre-tax Gains (Losses) Recorded in AOCI
Interest rate contracts		$	(26)	$	(7)
Total Pre-tax Gains (Losses) Recorded in AOCI		$	(26)	$	(7)
Location of Pre-tax Gains and (Losses) Reclassified from AOCI into Earnings(a)
Interest rate contracts
Interest expense		$	(2)	$	(3)
Total Pre-tax Gains (Losses) Reclassified from AOCI into Earnings		$	(2)	$	(3)
(a)	Represents the gains and losses on cash flow hedges previously recorded in AOCI during the term of the hedging relationship and reclassified into earnings during the current period.

47

PART I

DUKE ENERGY CORPORATION - DUKE ENERGY CAROLINAS, LLC - DUKE ENERGY OHIO, INC. -

DUKE ENERGY INDIANA, INC.

Combined Notes To Unaudited Condensed Consolidated Financial Statements - (Continued)

There were no gains or losses on cash flow hedges recorded or reclassified at Duke Energy Ohio for the six months ended June 30, 2012 and 2011, respectively. There were no hedge ineffectiveness during the six months ended June 30, 2012 and 2011, and no gains or losses have been excluded from the assessment of hedge effectiveness during the same periods for all Duke Energy Registrants.

Duke Energy.  At June 30, 2012, $129 million of pre-tax deferred net losses on derivative instruments related to interest rate cash flow hedges remains in AOCI and a $10 million pre-tax loss is expected to be recognized in earnings during the next 12 months as the hedged transactions occur.

Duke Energy Ohio.  At June 30, 2012, there were no pre-tax deferred net gains or losses on derivative instruments related to cash flow hedges remaining in AOCI.

	The following tables show the amount of the pre-tax gains and losses recognized on undesignated contracts by type of derivative
instrument, and the line item(s) in the Condensed Consolidated Statements of Comprehensive Income in which such gains and losses are included or deferred on the Condensed Consolidated Balance Sheets as regulatory assets or liabilities.
Undesignated Contracts—Location and Amount of Pre-Tax Gains and (Losses) Recognized in Income or as Regulatory Assets
or Liabilities
		Duke Energy				Duke Energy Ohio
		Three Months Ended June 30,
(in millions)		2012		2011		2012		2011
Location of Pre-tax Gains and (Losses) Recognized in Earnings
Commodity contracts
Revenue, non-regulated electric, natural gas and other			―		(12)		4		(16)
Interest rate contracts
Interest expense			―		―		(1)		(1)
Total Pre-tax (Losses) Gains Recognized in Earnings(a)		$	―	$	(12)	$	3	$	(17)
Location of Pre-tax Gains and (Losses) Recognized as Regulatory Assets or Liabilities
Commodity contracts
Regulatory Asset		$	1	$	(1)	$	―	$	―
Regulatory Liability			17		11		―		(1)
Interest rate contracts
Regulatory Asset			(32)		(21)		(1)		―
Total Pre-tax Gains (Losses) Recognized as Regulatory Assets or Liabilities		$	(14)	$	(11)	$	(1)	$	(1)
(a)	Amounts include Duke Energy Ohio intercompany positions that are eliminated at Duke Energy.

		Duke Energy				Duke Energy Ohio
		Six Months Ended June 30,
(in millions)		2012		2011		2012		2011
Location of Pre-tax Gains and (Losses) Recognized in Earnings
Commodity contracts
Revenue, non-regulated electric, natural gas and other			36		(25)		75		(22)
Fuel used in electric generation and purchased power - non-regulated			―		(1)		―		(1)
Interest rate contracts
Interest expense			―		―		(1)		(1)
Total Pre-tax (Losses) Gains Recognized in Earnings(a)		$	36	$	(26)	$	74	$	(24)
Location of Pre-tax Gains and (Losses) Recognized as Regulatory Assets or Liabilities
Commodity contracts
Regulatory Asset		$	―	$	(1)	$	(2)	$	(1)
Regulatory Liability			22		10		1		―
Interest rate contracts
Regulatory Asset			(10)		(9)		―		―
Total Pre-tax Gains (Losses) Recognized as Regulatory Assets of Liabilities		$	12	$	―	$	(1)	$	(1)
(a)	Amounts include Duke Energy Ohio intercompany positions that are eliminated at Duke Energy.

48

PART I

DUKE ENERGY CORPORATION - DUKE ENERGY CAROLINAS, LLC - DUKE ENERGY OHIO, INC. -

DUKE ENERGY INDIANA, INC.

Combined Notes To Unaudited Condensed Consolidated Financial Statements - (Continued)

Credit Risk

Certain of Duke Energy and Duke Energy Ohio’s derivative contracts contain contingent credit features, such as material adverse change clauses or payment acceleration clauses that could result in immediate payments, the posting of letters of credit or the termination of the derivative contract before maturity if specific events occur, such as a downgrade of Duke Energy or Duke Energy Ohio’s credit rating below investment grade.

The following table shows information with respect to derivative contracts that are in a net liability position and contain objective credit-risk related payment provisions. The amounts disclosed in the table below represent the aggregate fair value amounts of such derivative instruments at the end of the reporting period, the aggregate fair value of assets that are already posted as collateral under such derivative instruments at the end of the reporting period, and the aggregate fair value of additional assets that would be required to be transferred in the event that credit-risk-related contingent features were triggered.

Information Regarding Derivative Instruments that Contain Credit-risk Related Contingent Features
	Duke Energy		Duke Energy Ohio
(in millions)	June 30, 2012
Aggregate Fair Value Amounts of Derivative Instruments in a Net Liability Position	$	193	$	189
Collateral Already Posted	$	67	$	44
Additional Cash Collateral or Letters of Credit in the Event Credit-risk-related Contingent Features were Triggered at the End of the Reporting Period	$	6	$	4
(in millions)	December 31, 2011
Aggregate Fair Value Amounts of Derivative Instruments in a Net Liability Position	$	96	$	94
Collateral Already Posted	$	36	$	35
Additional Cash Collateral or Letters of Credit in the Event Credit-risk-related Contingent Features were Triggered at the End of the Reporting Period	$	5	$	5

Netting of Cash Collateral and Derivative Assets and Liabilities Under Master Netting Arrangements. In accordance with applicable accounting rules, Duke Energy and Duke Energy Ohio have elected to offset fair value amounts (or amounts that approximate fair value) recognized on their Condensed Consolidated Balance Sheets related to cash collateral amounts receivable or payable against fair value amounts recognized for derivative instruments executed with the same counterparty under the same master netting agreement. The amounts disclosed in the table below represent the receivables related to the right to reclaim cash collateral and payables related to the obligation to return cash collateral under master netting arrangements. See Note 9 for additional information on fair value disclosures related to derivatives.

Information Regarding Cash Collateral under Master Netting Arrangements
	Duke Energy				Duke Energy Ohio
	June 30, 2012
(in millions)	Receivables		Payable		Receivables		Payable
Amounts offset against net derivative positions	$	―	$	1	$	―	$	―
Amounts not offset against net derivative positions	$	73	$	―	$	49	$	―
	December 31, 2011
(in millions)	Receivables		Payable		Receivables		Payable
Amounts offset against net derivative positions	$	10	$	―	$	9	$	―
Amounts not offset against net derivative positions	$	30	$	―	$	28	$	―

9. Fair Value of Financial Assets and Liabilities

Under existing accounting guidance, 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 focuses on an exit price, which is the price that would be received 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.

49

PART I

DUKE ENERGY CORPORATION - DUKE ENERGY CAROLINAS, LLC - DUKE ENERGY OHIO, INC. -

DUKE ENERGY INDIANA, INC.

Combined Notes To Unaudited Condensed Consolidated Financial Statements - (Continued)

The Duke Energy Registrants classify recurring and non-recurring fair value measurements based on the following fair value hierarchy, as prescribed by the accounting guidance for fair value, which prioritizes the inputs to valuation techniques used to measure fair value into three levels:

Level 1—unadjusted 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 for any blockage factor.

Level 2—a fair value measurement utilizing inputs other than a quoted market price 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. A Level 2 measurement cannot have more than an insignificant portion of the valuation based on unobservable inputs.

Level 3—any fair value measurements which include unobservable inputs for the asset or liability for more than an insignificant portion of the valuation. A level 3 measurement may be based primarily on Level 2 inputs.

The fair value accounting guidance for financial instruments permits entities to elect to measure many financial instruments and certain other items at fair value that are not required to be accounted for at fair value under other GAAP. There are no financial assets or financial liabilities that are not required to be accounted for at fair value under GAAP for which the option to record at fair value has been elected by the Duke Energy Registrants. However, in the future, the Duke Energy Registrants may elect to measure certain financial instruments at fair value in accordance with this accounting guidance.

The Duke Energy Registrant’s Policy for the recognition of transfers between levels of the fair value hierarchy is to recognize the transfer at the end of the period.

Valuation methods of the primary fair value measurements disclosed below 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 quarter. 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 for after-hours market activity. The majority of investments in equity securities are valued using Level 1 measurements.

Investments in available-for-sale auction rate securities. Duke Energy holds auction rate securities for which an active market does not currently exist. During the three and six months ended June 30, 2012, $39 million of these investments in auction rate securities were redeemed at full par value plus accrued interest. Auction rate securities held are student loan securities for which approximately 90% is ultimately backed by the U.S. government. Approximately 25% of these securities are AAA rated. As of June 30, 2012 and December 31, 2011 all of these auction rate securities are classified as long-term investments and are valued using Level 3 measurements. The methods and significant assumptions used to determine the fair values of the investment in auction rate debt securities represent estimations of fair value using internal discounted cash flow models which incorporate primarily management’s own assumptions as to the term over which such investments will be recovered at par (ranging from zero to 17 years), the current level of interest rates (less than 0.5%), and the appropriate risk-adjusted discount rates (up to 5.3% reflecting a tenor of up to 17 years). In preparing the valuations, all significant value drivers were considered, including the underlying collateral (primarily evaluated on the basis of credit ratings, parity ratios and the percentage of loans backed by the U.S. government). Auction rate securities which are classified as Short-term investments are valued using Level 2 measurements, as they are valued at par based on a commitment by the issuer to redeem at par value. There were no auction rate securities classified as Short-term investments as of June 30, 2012 or December 31, 2011.

There were no other-than-temporary impairments associated with investments in auction rate debt securities during the three months ended and six months ended June 30, 2012 or 2011.

Investments in debt securities. Most debt investments (including those held in the Nuclear Decommissioning Trust Funds (NDTF)) 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 a Level 3 measurement. U.S. Treasury debt is typically a Level 1 measurement. For certain investments that are valued on a net asset value per share (or its equivalent), or the net asset value basis, when Duke Energy does not have the ability to redeem the investment in the near term at net asset value per share (or its equivalent), or the net asset value is not available as of the measurement date, the fair value measurement of the investment is categorized as Level 3.

Commodity derivatives. The pricing for commodity derivatives is primarily a calculated value which incorporates the forward price and is adjusted for liquidity (bid-ask spread), credit or non-performance risk (after reflecting credit enhancements such as collateral) and discounted to present value. The primary difference between a Level 2 and a Level 3 measurement has to do with the level of activity in forward markets for the commodity. If the market is relatively inactive, the measurement is deemed to be a Level 3 measurement. Commodity derivatives with clearinghouses are classified as Level 1 measurements.

50

PART I

DUKE ENERGY CORPORATION - DUKE ENERGY CAROLINAS, LLC - DUKE ENERGY OHIO, INC. -

DUKE ENERGY INDIANA, INC.

Combined Notes To Unaudited Condensed Consolidated Financial Statements - (Continued)

Duke Energy
	The following tables provide the fair value measurement amounts for assets and liabilities recorded on Duke Energy's Condensed
Consolidated Balance Sheets. Derivative amounts in the table below exclude cash collateral amounts which are disclosed in Note 8. See Note 10 for additional information related to investments by major security type.
		Total Fair Value Amounts at
(in millions)		June 30, 2012		Level 1		Level 2		Level 3
Investments in available-for-sale auction rate securities(a)		$	41	$	―	$	―	$	41
Nuclear decommissioning trust fund equity securities			1,470		1,406		46		18
Nuclear decommissioning trust fund debt securities			734		78		610		46
Other long-term trading and available-for-sale equity securities(b)			74		66		8		―
Other trading and available-for-sale debt securities(c)			481		28		453		―
Derivative assets(b)			89		16		9		64
	Total Assets		2,889		1,594		1,126		169
Derivative liabilities(d)			(298)		(12)		(203)		(83)
	Net Assets	$	2,591	$	1,582	$	923	$	86

		Total Fair Value Amounts at
(in millions)		December 31, 2011		Level 1		Level 2		Level 3
Investments in available-for-sale auction rate securities(a)		$	71	$	―	$	―	$	71
Nuclear decommissioning trust fund equity securities			1,337		1,285		46		6
Nuclear decommissioning trust fund debt securities			723		109		567		47
Other long-term trading and available-for-sale equity securities(b)			68		61		7		―
Other trading and available-for-sale debt securities(c)			382		22		360		―
Derivative assets(b)			74		43		6		25
	Total Assets		2,655		1,520		986		149
Derivative liabilities(d)			(264)		(36)		(164)		(64)
	Net Assets	$	2,391	$	1,484	$	822	$	85
(a)	Included in Other within Investments and Other Assets on the Condensed Consolidated Balance Sheets.
(b)	Included in Other within Current Assets and Other within Investments and Other Assets on the Condensed Consolidated Balance Sheet.
(c)	Included in Other within Investments and Other Assets and Short-term Investments on the Condensed Consolidated Balance Sheets.
(d)	Included in Other within Current Liabilities and Other within Deferred Credits and Other Liabilities on the Condensed Consolidated Balance Sheets.

	The following tables provide a reconciliation of beginning and ending balances of assets and liabilities measured at fair value on a
recurring basis where the determination of fair value includes significant unobservable inputs (Level 3):
(in millions)			Available-for-Sale Auction Rate Securities		Available-for-Sale NDTF Investments		Derivatives (net)		Total
Three Months Ended June 30, 2012
Balance at March 31, 2012			$	72	$	56	$	(42)	$	86
	Total pre-tax realized or unrealized losses included in earnings:
		Regulated electric		―		―		17		17
		Revenue, non-regulated electric, natural gas, and other		―		―		(1)		(1)
	Total pre-tax gains included in other comprehensive income:
		Gains on available for sale securities and other		8		―		―		8
	Purchases, sales, issuances and settlements:
		Purchases		―		7		22		29
		Settlements		(39)		―		(15)		(54)
	Total gains included on the Condensed Consolidated Balance Sheet as regulatory asset or liability			―		1		―		1
Balance at June 30, 2012			$	41	$	64	$	(19)	$	86
Three Months Ended June 30, 2011
Balance at March 31, 2011			$	122	$	48	$	(24)	$	146
	Total pre-tax realized or unrealized gains (losses) included in earnings:
		Revenue, non-regulated electric, natural gas, and other		―		―		(11)		(11)
	Total pre-tax losses included in other comprehensive income:
		Losses on available for sale securities and other		(1)		―		―		(1)
	Purchases, sales, issuances and settlements:
		Purchases		―		6		―		6
		Sales		―		(1)		―		(1)
		Settlements		(22)		―		(6)		(28)
	Total gains included on the Condensed Consolidated Balance Sheet as regulatory asset or liability			―		―		19		19
	Transfers out of Level 3			(9)		―		―		(9)
Balance at June 30, 2011			$	90	$	53	$	(22)	$	121

51

PART I

DUKE ENERGY CORPORATION - DUKE ENERGY CAROLINAS, LLC - DUKE ENERGY OHIO, INC. -

DUKE ENERGY INDIANA, INC.

Combined Notes To Unaudited Condensed Consolidated Financial Statements - (Continued)

(in millions)			Available-for-Sale Auction Rate Securities		Available-for-Sale NDTF Investments		Derivatives (net)		Total
Six Months Ended June 30, 2012
Balance at December 31, 2011			$	71	$	53	$	(39)	$	85
	Total pre-tax realized or unrealized losses included in earnings:
		Regulated electric		―		―		25		25
		Revenue, non-regulated electric, natural gas, and other		―		―		(3)		(3)
	Total pre-tax gains included in other comprehensive income:
		Gains on available for sale securities and other		9		―		―		9
	Purchases, sales, issuances and settlements:
		Purchases		―		9		22		31
		Settlements		(39)		―		(24)		(63)
	Total gains included on the Condensed Consolidated Balance Sheet as regulatory asset or liability			―		2		―		2
Balance at June 30, 2012			$	41	$	64	$	(19)	$	86
Pre-tax amounts included in the Condensed Consolidated Statements of Comprehensive Income related to Level 3 measurements outstanding at June 30, 2012
		Revenue, non-regulated electric, natural gas, and other		―		―		3		3
Total			$	―	$	―	$	3	$	3
Six Months Ended June 30, 2011
Balance at December 31, 2010			$	118	$	47	$	(19)	$	146
	Total pre-tax realized or unrealized gains (losses) included in earnings:
		Revenue, non-regulated electric, natural gas, and other		―		―		(19)		(19)
	Total pre-tax gains included in other comprehensive income:
		Gains on available for sale securities and other		5		―		―		5
	Purchases, sales, issuances and settlements:
		Purchases		―		7		―		7
		Sales		―		(3)		―		(3)
		Settlements		(24)		―		(3)		(27)
	Total gains included on the Condensed Consolidated Balance Sheet as regulatory asset or liability			―		2		19		21
	Transfers out of Level 3			(9)		―		―		(9)
Balance at June 30, 2011			$	90	$	53	$	(22)	$	121
Pre-tax amounts included in the Condensed Consolidated Statements of Comprehensive Income related to Level 3 measurements outstanding at June 30, 2012
		Revenue, non-regulated electric, natural gas, and other		―		―		(10)		(10)
Total			$	―	$	―	$	(10)	$	(10)

52

PART I

DUKE ENERGY CORPORATION - DUKE ENERGY CAROLINAS, LLC - DUKE ENERGY OHIO, INC. -

DUKE ENERGY INDIANA, INC.

Combined Notes To Unaudited Condensed Consolidated Financial Statements - (Continued)

Duke Energy Carolinas
	The following tables provide the fair value measurement amounts for assets and liabilities recorded on Duke Energy Carolinas’
Condensed Consolidated Balance Sheets at fair value. Derivative amounts in the table below exclude cash collateral amounts which are disclosed in Note 8. See Note 10 for additional information related to investments by major security type.
			Total Fair Value Amounts at
(in millions)			June 30, 2012	Level 1		Level 2		Level 3
Investments in available-for-sale auction rate securities(a)		$	6	$	―	$	―	$	6
Nuclear decommissioning trust fund equity securities			1,470		1,406		46		18
Nuclear decommissioning trust fund debt securities			734		78		610		46
Derivative assets(b)			1		―		1		―
	Total Assets	$	2,211	$	1,484	$	657	$	70

		Total Fair Value Amounts at
(in millions)		December 31, 2011		Level 1		Level 2		Level 3
Investments in available-for-sale auction rate securities(a)		$	12	$	―	$	―	$	12
Nuclear decommissioning trust fund equity securities			1,337		1,285		46		6
Nuclear decommissioning trust fund debt securities			723		109		567		47
Derivative assets(b)			1		―		1		―
	Total Assets	$	2,073	$	1,394	$	614	$	65
(a)	Included in Other within Investments and Other Assets on the Condensed Consolidated Balance Sheets.
(b)	Included in Other within Current Assets and Other within Investments and Other Assets on the Condensed Consolidated Balance Sheets.

	The following tables provide a reconciliation of beginning and ending balances of assets and liabilities measured at fair value
on a recurring basis where the determination of fair value includes significant unobservable inputs (Level 3):
(in millions)			Available-for-Sale Auction Rate Securities		Available-for-Sale NDTF Investments		Total
Three Months Ended June 30, 2012
Balance at March 31, 2012			$	12	$	56	$	68
	Total pre-tax gains included in other comprehensive income:
		Gains on available for sale securities and other		2		―		2
	Purchases, sales, issuances and settlements:
		Purchases		―		7		7
		Settlements		(8)		―		(8)
	Total gains included on the Condensed Consolidated Balance Sheet as regulatory asset or liability			―		1		1
Balance at June 30, 2012				6	$	64	$	70
Three Months Ended June 30, 2011
Balance at March 31, 2011			$	12	$	48	$	60
	Purchases, sales, issuances and settlements:
		Purchases		―		6		6
		Sales		―		(1)		(1)
Balance at June 30, 2011			$	12	$	53	$	65

53

PART I

DUKE ENERGY CORPORATION - DUKE ENERGY CAROLINAS, LLC - DUKE ENERGY OHIO, INC. -

DUKE ENERGY INDIANA, INC.

Combined Notes To Unaudited Condensed Consolidated Financial Statements - (Continued)

			Available-for-Sale Auction Rate Securities		Available-for-Sale NDTF Investments		Total
Six Months Ended June 30, 2012
Balance at December 31, 2011			$	12	$	53	$	65
	Total pre-tax gains included in other comprehensive income:
		Gains on available for sale securities and other		2		―		2
	Purchases, sales, issuances and settlements:
		Purchases		―		9		9
		Settlements		(8)		―		(8)
	Total gains included on the Condensed Consolidated Balance Sheet as regulatory asset or liability			―		2		2
Balance at June 30, 2012			$	6	$	64	$	70
Six Months Ended June 30, 2011
Balance at December 31, 2010			$	12	$	47	$	59
	Purchases, sales, issuances and settlements:
		Purchases		―		7		7
		Sales		―		(3)		(3)
	Total gains included on the Condensed Consolidated Balance Sheet as regulatory asset or liability			―		2		2
Balance at June 30, 2011			$	12	$	53	$	65

Duke Energy Ohio
	The following tables provide the fair value measurement amounts for assets and liabilities recorded on Duke Energy Ohio’s
Condensed Consolidated Balance Sheets. Derivative amounts in the table below exclude cash collateral amounts which are disclosed in Note 8.
		Total Fair Value Amounts at
(in millions)		June 30, 2012		Level 1		Level 2		Level 3
Derivative assets(a)		$	74	$	62	$	4	$	8
Derivative liabilities(b)			(30)		(11)		(9)		(10)
	Net Assets (Liabilities)	$	44	$	51	$	(5)	$	(2)

		Total Fair Value Amounts at
(in millions)		December 31, 2011		Level 1		Level 2		Level 3
Derivative assets(a)		$	56	$	42	$	5	$	9
Derivative liabilities(b)			(30)		(10)		(8)		(12)
	Net Assets (Liabilities)	$	26	$	32	$	(3)	$	(3)
(a)	Included in Other within Current Assets and Other within Investments and Other Assets on the Condensed Consolidated Balance Sheets.
(b)	Included in Other within Current Liabilities and Other within Deferred Credits and Other Liabilities on the Condensed Consolidated Balance Sheets.

	The following tables provide a reconciliation of beginning and ending balances of assets and liabilities measured at fair value on a
recurring basis where the determination of fair value includes significant unobservable inputs (Level 3):
(in millions)			Derivatives (net)
Three Months Ended June 30, 2012
Balance at March 31, 2012			$	(4)
	Total pre-tax realized or unrealized gains (losses) included in earnings:
		Revenue, non-regulated electric, natural gas, and other		1
	Purchases, sales, issuances and settlements:
		Settlements		2
	Total gains included on the Condensed Consolidated Balance Sheet as regulatory asset or liability			(1)
Balance at June 30, 2012			$	(2)
Three Months Ended June 30, 2011
Balance at March 31, 2011			$	17
	Total pre-tax realized or unrealized gains (losses) included in earnings:
		Revenue, non-regulated electric, natural gas, and other		(10)
Balance at June 30, 2011			$	7

54

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DUKE ENERGY CORPORATION - DUKE ENERGY CAROLINAS, LLC - DUKE ENERGY OHIO, INC. -

DUKE ENERGY INDIANA, INC.

Combined Notes To Unaudited Condensed Consolidated Financial Statements - (Continued)

(in millions)			Derivatives (net)
Six Months Ended June 30, 2012
Balance at December 31, 2011			$	(3)
	Total pre-tax realized or unrealized gains (losses) included in earnings:
		Revenue, non-regulated electric, natural gas, and other		1
	Purchases, sales, issuances and settlements:
		Settlements		2
	Total gains included on the Condensed Consolidated Balance Sheet as regulatory asset or liability			(2)
Balance at June 30, 2012			$	(2)
Pre-tax amounts included in the Condensed Consolidated Statements of Comprehensive Income related to Level 3 measurements outstanding at June 30, 2012:
		Revenue, non-regulated electric and other	$	1
Total			$	1
Six Months Ended June 30, 2011
Balance at December 31, 2010			$	13
	Total pre-tax realized or unrealized gains (losses) included in earnings:
		Revenue, non-regulated electric, natural gas, and other		(6)
	Purchases, sales, issuances and settlements:
		Settlements		(1)
	Total gains included on the Condensed Consolidated Balance Sheet as regulatory asset or liability			1
Balance at June 30, 2011			$	7
Pre-tax amounts included in the Condensed Consolidated Statements of Comprehensive Income related to Level 3 measurements outstanding at June 30, 2011:
		Revenue, non-regulated electric and other	$	1
Total			$	1

Duke Energy Indiana
The following tables provide the fair value measurement amounts for assets and liabilities recorded on Duke Energy Indiana’s
Condensed Consolidated Balance Sheets. Derivative amounts in the table below exclude cash collateral amounts which are disclosed in Note 8. See Note 10 for additional information related to investments by major security type.
		Total Fair Value Amounts at
(in millions)		June 30, 2012		Level 1		Level 2		Level 3
Available-for-sale equity securities(a)		$	46	$	46	$	―	$	―
Available-for-sale debt securities(a)			29		―		29		―
Derivative assets(b)			23		1		―		22
	Total Assets		98		47		29	$	22
Derivative liabilities(c)			(76)		―		(76)		―
	Net Assets (Liabilities)	$	22	$	47	$	(47)	$	22

		Total Fair Value Amounts at
(in millions)		December 31, 2011		Level 1		Level 2		Level 3
Available-for-sale equity securities(a)		$	46	$	46	$	―	$	―
Available-for-sale debt securities(a)			28		―		28		―
Derivative assets(b)			4		―		―		4
	Total Assets		78		46		28	$	4
Derivative liabilities(c)			(69)		(1)		(68)		―
	Net Assets (Liabilities)	$	9	$	45	$	(40)	$	4
(a)	Included in Other within Investments and Other Assets on the Condensed Consolidated Balance Sheets.
(b)	Included in Other within Current Assets on the Condensed Consolidated Balance Sheets.
(c)	Included in Other within Current Liabilities and Other within Deferred Credits and Other Liabilities on the Condensed Consolidated Balance Sheets.

55

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DUKE ENERGY CORPORATION - DUKE ENERGY CAROLINAS, LLC - DUKE ENERGY OHIO, INC. -

DUKE ENERGY INDIANA, INC.

Combined Notes To Unaudited Condensed Consolidated Financial Statements - (Continued)

	The following tables provide a reconciliation of beginning and ending balances of assets and liabilities measured at fair value
on a recurring basis where the determination of fair value includes significant unobservable inputs (Level 3):
			Derivatives
(in millions)			(net)
Three Months Ended June 30, 2012
Balance at March 31, 2012			$	3
	Total pre-tax realized or unrealized gains (losses) included in earnings:
		Regulated electric		16
	Purchases, sales, issuances and settlements:
		Sales		22
		Settlements		(19)
Balance at June 30, 2012			$	22
Three Months Ended June 30, 2011
Balance at March 31, 2011			$	1
	Purchases, sales, issuances and settlements:
		Settlements		(10)
	Total gains included on the Condensed Consolidated Balance Sheet as regulatory asset or liability			19
Balance at June 30, 2011			$	10

			Derivatives
(in millions)			(net)
Six Months Ended June 30, 2012
Balance at December 31, 2011			$	4
	Total pre-tax realized or unrealized gains (losses) included in earnings:
		Regulated  electric		24
	Purchases, sales, issuances and settlements:
		Sales		22
		Settlements		(29)
	Total gains included on the Condensed Consolidated Balance Sheet as regulatory asset or liability			1
Balance at June 30, 2012			$	22
Six Months Ended June 30, 2011
Balance at December 31, 2010			$	4
	Purchases, sales, issuances and settlements:
		Settlements		(12)
	Total gains included on the Condensed Consolidated Balance Sheet as regulatory asset or liability			18
Balance at June 30, 2011			$	10

Additional Fair Value Disclosures—Long-term debt, including current maturities:
The fair value of long-term debt is summarized in the following table. Judgment is required in interpreting market data to develop the estimates of fair value. Accordingly, the estimates determined are not necessarily indicative of the amounts the Duke Energy Registrants could have settled in current markets. The fair value of the long-term debt is determined using Level 2 measurements.
		As of June 30, 2012				As of December 31, 2011
(in millions)		Book Value		Fair Value		Book Value		Fair Value
Duke Energy (a)		$	20,324	$	23,028	$	20,573	$	23,053
Duke Energy Carolinas(b)		$	8,522	$	9,996	$	9,274	$	10,629
Duke Energy Ohio		$	2,551	$	2,684	$	2,555	$	2,688
Duke Energy Indiana		$	3,707	$	4,346	$	3,459	$	4,048
(a)	Includes book value of Non-recourse long-term debt of variable interest entities of $915  million and $949 million June 30, 2012 and December 31, 2011, respectively.
(b)	Includes book value of Non-recourse long-term debt of variable interest entities of $300 million at both June 30, 2012 and December 31, 2011, respectively.

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DUKE ENERGY INDIANA, INC.

Combined Notes To Unaudited Condensed Consolidated Financial Statements - (Continued)

At both June 30, 2012 and December 31, 2011, the fair value of cash and cash equivalents, accounts and notes receivable, accounts payable, notes payable and commercial paper and non-recourse notes payable of variable interest entities are not materially different from their carrying amounts because of the short-term nature of these instruments and/or because the stated rates approximate market rates.

 10. Investments in Debt and Equity Securities

The Duke Energy Registrants classify their investments in debt and equity securities into two categories – trading and available-for-sale.

Trading Securities.Investments in debt and equity securities held in grantor trusts associated with certain deferred compensation plans and certain other investments are classified as trading securities and are reported at fair value in the Condensed Consolidated Balance Sheets with net realized and unrealized gains and losses included in earnings each period. At June 30, 2012 and December 31, 2011, the fair value of these investments was $31 million and $32 million, respectively.

Available for Sale Securities. All other investments in debt and equity securities are classified as available-for-sale securities, which are also reported at fair value on the Condensed 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 Energy’s available-for-sale securities are primarily comprised of investments held in the NDTF at Duke Energy Carolinas, investments in a grantor trust at Duke Energy Indiana related to other post-retirement benefit plans as required by the IURC, Duke Energy captive insurance investment portfolio, Duke Energy’s foreign operations investment portfolio and investments of Duke Energy and Duke Energy Carolinas in auction rate debt securities.

The investments within the Duke Energy Carolinas NDTF and the Duke Energy Indiana 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 Carolinas and Duke Energy Indiana have 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 Carolinas and Duke Energy Indiana. Accordingly, all unrealized gains and losses associated with equity securities within the Duke Energy Carolinas NDTF and the Duke Energy Indiana 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. Pursuant to regulatory accounting, substantially all unrealized losses associated with investments in debt and equity securities within the Duke Energy Carolinas NDTF and the Duke Energy Indiana grantor trust are deferred as a regulatory asset or liability. As a result there is no immediate impact on the earnings of Duke Energy Carolinas and Duke Energy Indiana.

For investments in debt and equity securities held in the captive insurance investment portfolio, Duke Energy’s foreign operations investment portfolio and investments in auction rate debt 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. If so, the write-down to fair value may be included in earnings based on the criteria discussed below.

For available-for-sale securities outside of the Duke Energy Carolinas NDTF and the Duke Energy Indiana grantor trust, which are discussed separately above, Duke Energy analyzes all investment holdings each reporting period to determine whether a decline in fair value should be considered other-than-temporary. Criteria used to evaluate whether an impairment associated with equity securities is other-than-temporary includes, but is not limited to, the length of time over which the market value has been lower than the cost basis of the investment, the percentage decline compared to the cost of the investment and management’s intent and ability to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in market value. If a decline in fair value is determined to be other-than-temporary, the investment is written down to its fair value through a charge to earnings.

With respect to investments in debt securities, under the accounting guidance for other-than-temporary impairment, if the entity does not have an intent to sell the security and it is not more likely than not that management will be required to sell the debt security before the recovery of its cost basis, the impairment write-down to fair value would be recorded as a component of other comprehensive income, except for when it is determined that a credit loss exists. In determining whether a credit loss exists, management considers, among other things, the length of time and the extent to which the fair value has been less than the amortized cost basis, changes in the financial condition of the issuer of the security, or in the case of an asset backed security, the financial condition of the underlying loan obligors, consideration of underlying collateral and guarantees of amounts by government entities, ability of the issuer of the security to make scheduled interest or principal payments and any changes to the rating of the security by rating agencies. If it is determined that a credit loss exists, the amount of impairment write-down to fair value would be split between the credit loss, which would be recognized in earnings, and the amount attributable to all other factors, which would be recognized in other comprehensive income. Management believes, based on consideration of the criteria above, that no credit loss exists as of June 30, 2012 and December 31, 2011. Management does not have the intent to sell such investments in auction rate debt securities and the investments in debt securities within its captive insurance investment portfolio and foreign operations investment portfolio, and it is not more likely than not that management will be required to sell these securities before the anticipated recovery of their cost basis. Management has concluded that there were no other-than-temporary impairments for debt or equity securities necessary as of June 30, 2012 and December 31, 2011. Accordingly, all changes in the market value of investments other than the Duke Energy Carolinas NDTF and the Duke Energy Indiana Grantor Trust were reflected as a component of other comprehensive income in 2012 and 2011.

57

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DUKE ENERGY CORPORATION - DUKE ENERGY CAROLINAS, LLC - DUKE ENERGY OHIO, INC. -

DUKE ENERGY INDIANA, INC.

Combined Notes To Unaudited Condensed Consolidated Financial Statements - (Continued)

See Note 9 for additional information related to fair value measurements for investments in auction rate debt securities.

Short-term and Long-term investments.  Investments in debt and equity securities are classified as either short-term investments or long-term investments based on management’s intent and ability to sell these securities, taking into consideration illiquidity factors in the current markets.

Duke Energy holds corporate debt securities which were purchased using excess cash from its foreign operations. These investments are classified as Short-term Investments on the balance sheet and are available for current operations of Duke Energy’s foreign business. Duke Energy held short-term investments with a fair value of $234 million as of June 30, 2012 and $190 million as of December 31, 2011.

Duke Energy classifies its investments in debt and equity securities held in the Duke Energy Carolinas NDTF (see Note 9 for further information), the Duke Energy Indiana grantor trust and the captive insurance investment portfolio as long-term. Additionally, Duke Energy has classified $41 million carrying value ($50 million par value) and $71 million carrying value ($89 million par value) of investments in auction rate debt securities as long-term at June 30, 2012 and December 31, 2011, respectively, due to market illiquidity factors as a result of continued failed auctions. All of these investments are classified as available-for-sale and, therefore, are reflected on the Condensed Consolidated Balance Sheets at estimated fair value based on either quoted market prices or management’s best estimate of fair value based on expected future cash flow using appropriate risk-adjusted discount rates. Since management does not intend to use these investments in current operations, these investments are classified as long-term.  

	The estimated fair values of short-term and long-term investments for Duke Energy, Duke Energy Carolinas and Duke Energy
Indiana are as follows (in millions):
		June 30, 2012						December 31, 2011
(in millions)		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses		Estimated Fair Value		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses		Estimated Fair Value
Duke Energy Carolinas NDTF
Equity Securities		$	522	$	17	$	1,470	$	443	$	16	$	1,337
Corporate Debt Securities			10		2		221		8		2		205
Municipal Bonds			2		―		73		2		―		51
U.S. Government Bonds			12		―		277		16		―		306
Other			4		1		163		4		4		161
Total Duke Energy Carolinas NDTF(a)		$	550	$	20	$	2,204	$	473	$	22	$	2,060
Duke Energy Indiana Grantor Trust
Equity Securities		$	7	$	1	$	46	$	5	$	1	$	46
Municipal Bonds			1		―		28		1		―		28
Total Duke Energy Indiana Grantor Trust(a)		$	8	$	1	$	74	$	6	$	1	$	74
Other Investments
Equity Securities		$	1	$	1	$	20	$	―	$	1	$	14
Corporate Debt Securities			2		―		295		1		1		241
Municipal Bonds			―		―		1		―		―		―
U.S. Government Bonds			―		―		28		1		―		21
Other			1		―		107		2		―		68
Auction Rate Securities(b)			―		9		41		―		17		71
Total Other Investments		$	4	$	10	$	492	$	4	$	19	$	415
Total Duke Energy Investments		$	562	$	31	$	2,770	$	483	$	42	$	2,549
(a)	Unrealized losses on investments within the Duke Energy Carolinas NDTF and Duke Energy Indiana grantor trust are deferred as regulatory assets pursuant to regulatory accounting treatment.
(b)	At June 30, 2012 and December 31, 2011, $6 million and $12 million of these securities were held by Duke Energy Carolinas, respectively. Gross unrealized holding gains on these securities held by Duke Energy Carolinas were insignificant at both June 30, 2012 and December 31, 2011.  Gross unrealized holding losses on these securities held by Duke Energy Carolinas were $1 million at June 30, 2012 and $3 million at December 31, 2011.

58

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DUKE ENERGY CORPORATION - DUKE ENERGY CAROLINAS, LLC - DUKE ENERGY OHIO, INC. -

DUKE ENERGY INDIANA, INC.

Combined Notes To Unaudited Condensed Consolidated Financial Statements - (Continued)

	The table below summarizes the maturity date for debt securities held by Duke Energy, Duke Energy Carolinas, and Duke Energy Indiana.
(in millions)		< 1 Year		1-5 Years		6-10 Years		Thereafter
Duke Energy(a)		$	164	$	345	$	212	$	471
Duke Energy Carolinas(a)		$	45	$	146	$	174	$	369
Duke Energy Indiana		$	―	$	21	$	5	$	2
(a)	Excludes auction rate securities based on the stated maturity date. See Note 9 for information about fair value measurements related to investments in auction rate debt securities.

The fair values and gross unrealized losses of available-for-sale debt and equity securities which are in an unrealized loss position for which other-than-temporary impairment losses have not been recorded, summarized by investment type and length of time that the securities have been in a continuous loss position, are presented in the table below for Duke Energy, Duke Energy Carolinas, and Duke Energy Indiana.

		June 30, 2012						December 31, 2011
				Unrealized		Unrealized				Unrealized		Unrealized
				Loss		Loss				Loss		Loss
				Position		Position				Position		Position
(in millions)		Fair Value		>12 months		<12 months		Fair Value		>12 months		<12 months
Duke Energy Carolinas NDTF
Equity Securities		$	117	$	7	$	11	$	111	$	4	$	12
Corporate Debt Securities			29		―		1		57		1		1
Municipal Bonds			21		―		―		―		―		―
U.S. Government Bonds			27		―		―		8		―		―
Other			78		―		1		113		1		3
Total Duke Energy Carolinas NDTF(a)		$	272	$	7	$	13	$	289	$	6	$	16
Duke Energy Indiana Grantor Trust
Equity Securities		$	8	$	―	$	1	$	8	$	―	$	1
Municipal Bonds			10		―		―		3		―		―
Total Duke Energy Indiana Grantor Trust(a)		$	18	$	―	$	1	$	11	$	―	$	1
Other Investments
Equity Securities		$	6	$	1	$	―	$	4	$	1	$	―
Corporate Debt Securities			243		―		―		201		1		―
Municipal Bonds			1		―		―		―		―		―
U.S. Government Bonds			12		―		―		―		―		―
Other			11		―		―		8		―		―
Auction Rate Securities(b)			41		9		―		71		17		―
Total Other Investments		$	314	$	10	$	―	$	284	$	19	$	―
Total Duke Energy Investments		$	604	$	17	$	14	$	584	$	25	$	17
(a)	Unrealized losses on investments within the Duke Energy Carolinas NDTF and Duke Energy Indiana grantor trust are deferred as regulatory assets pursuant to regulatory accounting treatment.
(b)	At June 30, 2012 and December 31, 2011, $6 million and $12 million of these securities, respectively, were held by Duke Energy
	Carolinas. The gross unrealized losses on these securities held by Duke Energy Carolinas which were in an unrealized loss position greater than 12 months were $1 million at June 30, 2012 and $3 million at December 31, 2011.

11. Variable Interest Entities

A VIE is an entity that is evaluated for consolidation using more than a simple analysis of voting control. The analysis to determine whether an entity is a VIE considers contracts with an entity, credit support for an entity, the adequacy of the equity investment of an entity and the relationship of voting power to the amount of equity invested in an entity. This analysis is performed either upon the creation of a legal entity or upon the occurrence of an event requiring reevaluation, such as a significant change in an entity’s assets or activities. If an entity is determined to be a VIE, a qualitative analysis of control determines the party that consolidates a VIE based on what party has the power to direct the most significant activities of the VIE that impact its economic performance as well as what party has rights to receive benefits or is obligated to absorb losses that are significant to the VIE. The analysis of the party that consolidates a VIE is a continual reassessment.

59

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DUKE ENERGY CORPORATION - DUKE ENERGY CAROLINAS, LLC - DUKE ENERGY OHIO, INC. -

DUKE ENERGY INDIANA, INC.

Combined Notes To Unaudited Condensed Consolidated Financial Statements - (Continued)

CONSOLIDATED VIEs

The table below shows the VIEs that Duke Energy and Duke Energy Carolinas consolidate and how these entities impact Duke Energy’s and Duke Energy Carolinas’ respective Condensed Consolidated Balance Sheets. None of these entities are consolidated by Duke Energy Ohio or Duke Energy Indiana.

Other than the discussion below related to CRC, no financial support was provided to any of the consolidated VIEs during the six months ended June 30, 2012 and the year ended December 31, 2011, or is expected to be provided in the future, that was not previouslycontractually required.

		June 30, 2012
		Duke Energy
		Receivables
		Financing
(in millions)		LLC (DERF)(a)		CRC		CinCapV		Renewables		Other		Total
Restricted Receivables of VIEs		$	680	$	522	$	14	$	14	$	3	$	1,233
Other Current Assets			―		―		2		118		7		127
Intangibles, net			―		―		―		34		―		34
Restricted Other Assets of VIEs			―		―		58		17		58		133
Other Assets			―		―		11		2		―		13
Property, Plant and Equipment, Cost			―		―		―		1,357		―		1,357
Accumulated Depreciation and Amortization			―		―		―		(83)		―		(83)
Other Deferred Debits			―		―		―		34		1		35
	Total Assets		680		522		85		1,493		69		2,849
Accounts Payable			―		―		―		7		2		9
Non-Recourse Notes Payable			―		269		―		―		―		269
Taxes Accrued			―		―		―		3		―		3
Current Maturities of Long-Term Debt			―		―		12		361		4		377
Other Current Liabilities			―		―		2		20		1		23
Non-Recourse Long-Term Debt			300		―		55		502		58		915
Deferred Income Taxes			―		―		―		155		―		155
Asset Retirement Obligations			―		―		―		18		―		18
Other Liabilities			―		―		9		42		―		51
	Total Liabilities		300		269		78		1,108		65		1,820
Noncontrolling Interests			―		―		―		―		2		2
Net Assets of Consolidated VIEs		$	380	$	253	$	7	$	385	$	2	$	1,027
(a)	DERF is a wholly owned limited liability company of Duke Energy Carolinas.

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DUKE ENERGY CORPORATION - DUKE ENERGY CAROLINAS, LLC - DUKE ENERGY OHIO, INC. -

DUKE ENERGY INDIANA, INC.

Combined Notes To Unaudited Condensed Consolidated Financial Statements - (Continued)

		December 31, 2011
		Duke Energy
		Receivables
		Financing
(in millions)		LLC (DERF)(a)		CRC		CinCapV		Renewables		Other		Total
Restricted Receivables of VIEs		$	581	$	547	$	13	$	13	$	3	$	1,157
Other Current Assets			―		―		2		124		8		134
Intangibles, net			―		―		―		12		―		12
Restricted Other Assets of VIEs			―		―		65		10		60		135
Other Assets			―		―		14		36		―		50
Property, Plant and Equipment, Cost			―		―		―		913		―		913
Accumulated Depreciation and Amortization			―		―		―		(62)		―		(62)
Other Deferred Debits			―		―		―		24		2		26
	Total Assets		581		547		94		1,070		73		2,365
Accounts Payable			―		―		―		1		1		2
Non-Recourse Notes Payable			―		273		―		―		―		273
Taxes Accrued			―		―		―		3		―		3
Current Maturities of Long-Term Debt			―		―		11		49		5		65
Other Current Liabilities			―		―		3		59		―		62
Non-Recourse Long-Term Debt			300		―		60		528		61		949
Deferred Income Taxes			―		―		―		160		―		160
Asset Retirement Obligation			―		―		―		13		―		13
Other Liabilities			―		―		13		37		―		50
	Total Liabilities		300		273		87		850		67		1,577
Noncontrolling Interests			―		―		―		―		1		1
Net Assets of Consolidated VIEs		$	281	$	274	$	7	$	220	$	5	$	787
(a)	DERF is a wholly owned limited liability company of Duke Energy Carolinas.

DERF. Duke Energy Carolinas securitizes certain accounts receivable through DERF, a bankruptcy remote, special purpose subsidiary. DERF is a wholly owned limited liability company of Duke Energy Carolinas with a separate legal existence from its parent, and its assets are not intended to be generally available to creditors of Duke Energy Carolinas. As a result of the securitization, on a daily basis Duke Energy Carolinas sells certain accounts receivable, arising from the sale of electricity and/or related services as part of Duke Energy Carolinas’ franchised electric business, to DERF. In order to fund its purchases of accounts receivable, DERF has a $300 million secured credit facility with a commercial paper conduit, which expires in August 2013. Duke Energy Carolinas provides the servicing for the receivables (collecting and applying the cash to the appropriate receivables). Duke Energy Carolinas’ borrowing under the credit facility is limited to the amount of qualified receivables sold, which has been and is expected to be in excess of the amount borrowed, which is maintained at $300 million. The debt is classified as long-term since the facility has an expiration date of greater than one year from the balance sheet date.

The obligations of DERF under the facility are non-recourse to Duke Energy Carolinas. Duke Energy and its subsidiaries have no requirement to provide liquidity, purchase assets of DERF or guarantee performance. DERF is considered a VIE because the equity capitalization is insufficient to support its operations. If deficiencies in the net worth of DERF were to occur, those deficiencies would be cured through funding from Duke Energy Carolinas. In addition, the most significant activity of DERF relates to the decisions made with respect to the management of delinquent receivables. Since those decisions are made by Duke Energy Carolinas and any net worth deficiencies of DERF would be cured through funding from Duke Energy Carolinas, Duke Energy Carolinas consolidates DERF.

CRC.  CRC was formed in order to secure low cost financing for Duke Energy Ohio, including Duke Energy Kentucky, and Duke Energy Indiana. Duke Energy Ohio and Duke Energy Indiana sell on a revolving basis at a discount, nearly all of their customer accounts receivable and related collections to CRC. The receivables which are sold are selected in order to avoid any significant concentration of credit risk and exclude delinquent receivables. The receivables sold are securitized by CRC through a facility managed by two unrelated third parties and the receivables are used as collateral for commercial paper issued by the unrelated third parties. These loans provide the cash portion of the proceeds paid by CRC to Duke Energy Ohio and Duke Energy Indiana. The proceeds obtained by Duke Energy Ohio and Duke Energy Indiana from the sales of receivables are cash and a subordinated note from CRC (subordinated retained interest in the sold receivables) for a portion of the purchase price (typically approximates 25% of the total proceeds). The amount borrowed by CRC against these receivables is non-recourse to the general credit of Duke Energy, and the associated cash collections from the accounts receivable sold is the sole source of funds to satisfy the related debt obligation. Borrowing is limited to approximately 75% of the transferred receivables. Losses on collection in excess of the discount are first absorbed by the equity of CRC and next by the subordinated retained interests held by Duke Energy Ohio and Duke Energy Indiana. The discount on the receivables reflects interest expense plus an allowance for bad debts net of a servicing fee charged by Duke Energy Ohio and Duke Energy Indiana. Duke Energy Ohio and Duke Energy Indiana are responsible for the servicing of the receivables (collecting and applying the cash to the appropriate receivables). Depending on the experience with collections, additional equity infusions to CRC may be required to be made by Duke Energy in order to maintain a minimum equity balance of $3 million. There were no equity infusions to CRC during the six months ended June 30, 2012. During the six months ended June 30, 2011, Duke Energy infused $6 million of equity to Cinergy receivables to remedy net worth deficiencies. The amount borrowed fluctuates based on the amount of receivables sold. The debt is

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Combined Notes To Unaudited Condensed Consolidated Financial Statements - (Continued)

short term because the facility has an expiration date of less than one year from the balance sheet date. The current expiration date is October 2012. CRC is considered a VIE because the equity capitalization is insufficient to support its operations, the power to direct the most significant activities of the entity are not performed by the equity holder, Cinergy, and deficiencies in the net worth of CRC are not funded by Cinergy, but by Duke Energy. The most significant activity of CRC relates to the decisions made with respect to the management of delinquent receivables. These decisions, as well as the requirement to make up deficiencies in net worth, are made by Duke Energy and not by Duke Energy Ohio, Duke Energy Kentucky or Duke Energy Indiana. Thus, Duke Energy consolidates CRC. Duke Energy Ohio and Duke Energy Indiana do not consolidate CRC.

CinCap V. CinCap V was created to finance and execute a power sale agreement with Central Maine Power Company for approximately 35 MW of capacity and energy. This agreement expires in 2016. CinCap V is considered a VIE because the equity capitalization is insufficient to support its operations. As Duke Energy has the power to direct the most significant activities of the entity, which are the decisions to hedge and finance the power sales agreement, CinCap V is consolidated by Duke Energy.

Renewables. Duke Energy’s renewable energy facilities include Green Frontier Windpower, LLC, Top of The World Wind Energy LLC, DS Cornerstone LLC, and various solar projects, all subsidiaries of DEGS, an indirect wholly owned subsidiary of Duke Energy.

Green Frontier Windpower, LLC, Top of the World Wind Energy, LLC and the various solar projects are VIEs due to power purchase agreements with terms that approximate the expected life of the projects. These fixed price agreements effectively transfer the commodity price risk to the buyer of the power. Duke Energy has consolidated these entities since inception because the most significant activities that impact the economic performance of these renewable energy facilities were the decisions associated with the siting, negotiation of the purchase power agreement, engineering, procurement and construction, and decisions associated with ongoing operations and maintenance related activities, all of which were made solely by Duke Energy.

DS Cornerstone, LLC, a 50/50 joint venture entity with a third-party joint venture partner, owns two windpower projects and has executed a third party financing against the two windpower projects.  DS Cornerstone is currently a VIE as the members equity is not sufficient as of the June 30, 2012 to support the operations of the joint venture as demonstrated by the third party financing.  Duke Energy provided a Production Tax Credit (PTC) Remedy Agreement to the joint venture partner whereby Duke Energy has guaranteed the two windpower projects will achieve commercial operation in 2012 and an agreed to number of wind turbines will qualify for production tax credits. In the event the agreed to number of wind turbines of the two wind generating facilities fail to qualify, the joint venture partner has the option to put its equity ownership interest back to Duke Energy. The PTC Remedy Agreement results in greater loss exposure to Duke Energy and, as a result, Duke Energy will consolidate DS Cornerstone, LLC until both projects reach commercial operation in 2012 and the appropriate number of wind turbines qualify for PTC.

The debt held by these renewable energy facilities is non-recourse to the general credit of Duke Energy. Duke Energy and its subsidiaries have no requirement to provide liquidity or purchase the assets of these renewable energy facilities. Duke Energy does not guarantee performance except for the production tax credit guarantee mentioned above, an immaterial multi-purpose letter of credit and various immaterial debt service reserve and operations and maintenance reserve guarantees. The assets are restricted and they cannot be pledged as collateral or sold to third parties without the prior approval of the debt holders.

Other. Duke Energy has other VIEs with restricted assets and non-recourse debt. These VIEs include certain on-site power generation facilities. Duke Energy consolidates these particular on-site power generation entities because Duke Energy has the power to direct the majority of the most significant activities, which, most notably involve the oversight of operation and maintenance related activities that impact the economic performance of these entities.

NON-CONSOLIDATED VIEs

The tables below show the VIEs that the Duke Energy Registrants do not consolidate and how these entities impact the Duke Energy Registrants respective Condensed Consolidated Balance Sheets. As discussed above, while Duke Energy consolidated CRC, Duke Energy Ohio and Duke Energy Indiana do not consolidate CRC as they are not the primary beneficiary.

		June 30, 2012
			Duke Energy							Duke Energy		Duke Energy
(in millions)		DukeNet		Renewables		Other		Total		Ohio		Indiana
Receivables		$	―	$	―	$	―	$	―	$	101	$	143
Investments in equity method unconsolidated affiliates			122		79		25		226		―		―
Intangibles			―				108		108		108		―
	Total Assets		122		79		133		334		209		143
Other Current Liabilities			―		―		3		3		―		―
Deferred Credits and Other Liabilities			―		―		17		17		―		―
	Total Liabilities		―		―		20		20		―		―
Net Assets		$	122	$	79	$	113	$	314	$	209	$	143

		December 31, 2011
		Duke Energy								Duke Energy		Duke Energy
(in millions)		DukeNet		Renewables		Other		Total		Ohio		Indiana
Receivables		$	―	$	―	$	―	$	―	$	129	$	139
Investments in equity method unconsolidated affiliates			129		81		25		235		―		―
Intangibles			―		―		111		111		111		―
	Total Assets		129		81		136		346		240		139
Other Current Liabilities			―		―		3		3		―		―
Deferred Credits and Other Liabilities			―		―		18		18		―		―
	Total Liabilities		―		―		21		21		―		―
Net Assets		$	129	$	81	$	115	$	325	$	240	$	139

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DUKE ENERGY INDIANA, INC.

Combined Notes To Unaudited Condensed Consolidated Financial Statements - (Continued)

No financial support that was not previously contractually required was provided to any of the unconsolidated VIEs during the six months ended June 30, 2012 and 2011, respectively, or is expected to be provided in the future.

With the exception of the power purchase agreement with the Ohio Valley Electric Corporation (OVEC), which is discussed below, and various guarantees, reflected in the table above as “Deferred Credits and Other Liabilities”, the Duke Energy Registrants are not aware of any situations where the maximum exposure to loss significantly exceeds the carrying values shown above.

CRC.  As discussed above, CRC is consolidated only by Duke Energy. Accordingly, the retained interest in the sold receivables recorded on the Condensed Consolidated Balance Sheets of Duke Energy Ohio and Duke Energy Indiana are eliminated in consolidation at Duke Energy.

The proceeds obtained from the sales of receivables are largely cash but do include a subordinated note from CRC for a portion of the purchase price (typically approximates 25% of the total proceeds). The subordinated note is a retained interest (right to receive a specified portion of cash flows from the sold assets) and is classified within Receivables in Duke Energy Ohio’s and Duke Energy Indiana’s Condensed Consolidated Balance Sheets. The retained interests reflected on the Condensed Consolidated Balance Sheets of Duke Energy Ohio and Duke Energy Indiana approximate fair value.

The carrying values of the retained interests are determined by allocating the carrying value of the receivables between the assets sold and the interests retained based on relative fair value. Because the receivables generally turnover in less than two months, credit losses are reasonably predictable due to the broad customer base and lack of significant concentration, and the purchased beneficial interest (equity in CRC) is subordinate to all retained interests and thus would absorb losses first, the allocated basis of the subordinated notes are not materially different than their face value. The hypothetical effect on the fair value of the retained interests assuming both a 10% and a 20% unfavorable variation in credit losses or discount rates is not material due to the short turnover of receivables and historically low credit loss history. Interest accrues to Duke Energy Ohio, Duke Energy Indiana and Duke Energy Kentucky on the retained interests using the accretable yield method, which generally approximates the stated rate on the notes since the allocated basis and the face value are nearly equivalent. An impairment charge is recorded against the carrying value of both the retained interests and purchased beneficial interest whenever it is determined that an other-than-temporary impairment has occurred. The key assumptions used in estimating the fair value in 2012 and 2011 is detailed in the following table:

	Duke Energy Ohio				Duke Energy Indiana
	2012		2011		2012		2011
Anticipated credit loss ratio	0.8	%	0.8	%	0.4	%	0.4	%
Discount rate	1.3	%	2.6	%	1.3	%	2.6	%
Receivable turnover rate	12.7	%	12.7	%	10.2	%	10.2	%

	The following table shows the gross and net receivables sold:
		Duke Energy Ohio				Duke Energy Indiana
(in millions)		June 30, 2012		December 31, 2011		June 30, 2012		December 31, 2011
Receivables sold		$	251	$	302	$	307	$	279
Less: Retained interests			102		129		143		139
Net receivables sold		$	149	$	173	$	164	$	140

	The following tables show the retained interests, sales, and cash flows related to receivables sold:
		Duke Energy Ohio				Duke Energy Indiana
		Three Months Ended June 30,				Three Months Ended June 30,
(in millions)		2012		2011		2012		2011
Sales
Receivables sold		$	490	$	521	$	701	$	630
Loss recognized on sale		$	3	$	5	$	3	$	4
Cash flows
Cash proceeds from receivables sold		$	484	$	560	$	673	$	646
Collection fees received		$	1	$	―	$	1	$	―
Return received on retained interests		$	1	$	3	$	1	$	3

	Duke Energy Ohio				Duke Energy Indiana
	Six Months Ended June 30,				Six Months Ended June 30,
(in millions)	2012		2011		2012		2011
Sales
Receivables sold	$	1,100	$	1,240	$	1,407	$	1,298
Loss recognized on sale	$	7	$	11	$	6	$	8
Cash flows
Cash proceeds from receivables sold	$	1,120	$	1,337	$	1,397	$	1,355
Collection fees received	$	1	$	-	$	1	$	―
Return received on retained interests	$	3	$	7	$	3	$	7

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DUKE ENERGY INDIANA, INC.

Combined Notes To Unaudited Condensed Consolidated Financial Statements - (Continued)

Cash flows from the sale of receivables are reflected within Operating Activities on Duke Energy Ohio’s and Duke Energy Indiana’s Consolidated Statements of Cash Flows.

Collection fees received in connection with the servicing of transferred accounts receivable are included in Operation, Maintenance and Other on Duke Energy Ohio’s and Duke Energy Indiana’s Consolidated Statements of Operations. The loss recognized on the sale of receivables is calculated monthly by multiplying the receivables sold during the month by the required discount which is derived monthly utilizing a three year weighted average formula that considers charge-off history, late charge history, and turnover history on the sold receivables, as well as a component for the time value of money. The discount rate, or component for the time value of money, is calculated monthly by summing the prior month-end LIBOR plus a fixed rate of 1.00% as of June 30, 2012, as compared to prior month-end LIBOR plus 2.39% as of June 30, 2011.

DukeNet.  In 2010, Duke Energy sold a 50% ownership interest in DukeNet to Alinda. The sale resulted in DukeNet becoming a joint venture with Duke Energy and Alinda each owning a 50% interest. In connection with the formation of the new DukeNet joint venture, a five-year, $150 million senior secured credit facility was executed with a syndicate of ten external financial institutions. This credit facility is non-recourse to Duke Energy. DukeNet is considered a VIE because it has entered into certain contractual arrangements that provide DukeNet with additional forms of subordinated financial support. The most significant activities that impact DukeNet’s economic performance relate to its business development and fiber optic capacity marketing and management activities. The power to direct these activities is jointly and equally shared by Duke Energy and Alinda. As a result, Duke Energy does not consolidate the DukeNet joint venture. Accordingly, DukeNet is a non-consolidated VIE that is reported as an equity method investment.

Unless consent by Duke Energy is given otherwise, Duke Energy and its subsidiaries have no requirement to provide liquidity, purchase the assets of DukeNet, or guarantee performance.  

Renewables.  Duke Energy has investments in various entities that generate electricity through the use of renewable energy technology. Some of these entities, which were part of the Catamount acquisition, are VIEs which are not consolidated due to the joint ownership of the entities when they were created and the power to direct and control key activities is shared jointly Instead, Duke Energy’s investment is recorded under the equity method of accounting. These entities are VIEs due to power purchase agreements with terms that approximate the expected life of the project. These fixed price agreements effectively transfer the commodity price risk to the buyer of the power.

Other.  Duke Energy has investments in various other entities that are VIEs which are not consolidated. The most significant of these investments is Duke Energy Ohio’s 9% ownership interest in OVEC. Through its ownership interest in OVEC, Duke Energy Ohio has a contractual arrangement through June 2040 to buy power from OVEC’s power plants. The proceeds from the sale of power by OVEC to its power purchase agreement counterparties, including Duke Energy Ohio, are designed to be sufficient for OVEC to meet its operating expenses, fixed costs, debt amortization and interest expense, as well as earn a return on equity. Accordingly, the value of this contract is subject to variability due to fluctuations in power prices and changes in OVEC’s costs of business, including costs associated with its 2,256 megawatts of coal-fired generation capacity. As discussed in Note 5, the proposed rulemaking on cooling water intake structures, MATS, CSAPR and CCP’s could increase the costs of OVEC which would be passed through to Duke Energy Ohio. The initial carrying value of this contract was recorded as an intangible asset when Duke Energy acquired Cinergy in April 2006.

In addition, the company has guaranteed the performance of certain entities in which the company no longer has an equity interest. As a result, the company has a variable interest in certain other VIEs that are non-consolidated.

12. Earnings Per Common Share (EPS)

Basic Earnings Per Share (EPS) is computed by dividing net income attributable to Duke Energy common shareholders, adjusted for distributed and undistributed earnings allocated to participating securities, by the weighted-average number of common shares outstanding during the period. Diluted EPS is computed by dividing net income attributable to Duke Energy common shareholders, as adjusted for distributed and undistributed earnings allocated to participating securities, 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.

On July 2, 2012, just prior to the close of the merger with Progress Energy, Duke Energy executed a one-for-three reverse stock split. All earnings per share amounts included in this 10-Q are presented as if the one-for-three reverse stock split had been effective January 1, 2011. The following table, which includes the effects of the reverse stock split, illustrates Duke Energy’s 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:

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DUKE ENERGY INDIANA, INC.

Combined Notes To Unaudited Condensed Consolidated Financial Statements - (Continued)

			Average
(in millions, except per-share amounts)	Income		Shares			EPS
Three Months Ended June 30, 2012
Income from continuing operations attributable to Duke Energy common shareholders, as adjusted for participating securities — basic	$	444		446	$	0.99
Effect of dilutive securities:
Stock options, performance and restricted stock				―
Income from continuing operations attributable to Duke Energy common shareholders, as adjusted for participating securities — diluted	$	444		446	$	0.99
Three Months Ended June 30, 2011
Income from continuing operations attributable to Duke Energy common shareholders, as adjusted for participating securities — basic	$	434		444	$	0.98
Effect of dilutive securities:
Stock options, performance and restricted stock				―
Income from continuing operations attributable to Duke Energy common shareholders, as adjusted for participating securities — diluted	$	434		444	$	0.98

			Average
(In millions, except per-share amounts)	Income		Shares		EPS
Six Months Ended June 30, 2012
Income from continuing operations attributable to Duke Energy common shareholders, as adjusted for participating securities — basic	$	736		446	$	1.65
Effect of dilutive securities:
Stock options, performance and restricted stock				―
Income from continuing operations attributable to Duke Energy common shareholders, as adjusted for participating securities — diluted	$	736		446	$	1.65
Six Months Ended June 30, 2011
Income from continuing operations attributable to Duke Energy common shareholders, as adjusted for participating securities — basic	$	944		444	$	2.13
Effect of dilutive securities:
Stock options, performance and restricted stock				―
Income from continuing operations attributable to Duke Energy common shareholders, as adjusted for participating securities — diluted	$	944		444	$	2.13

As of June 30, 2012 and 2011, 4 million and 2 million, respectively, of stock options and performance and unvested stock awards were not included in the “effect of dilutive securities” in the above table because either the option exercise prices were greater than the average market price of the common shares during those periods, or performance measures related to the awards had not yet been met.

13. Stock-Based Compensation

For employee awards, equity classified stock-based compensation cost is measured at the service inception date or the grant date, based on the estimated achievement of certain performance metrics or the fair value of the award, and is recognized as expense or capitalized as a component of property, plant and equipment over the requisite service period.

Duke Energy recorded pre-tax stock-based compensation expense for the three and six months ended June 30, 2012 and 2011 as follows:

		Three Months Ended				Six Months Ended
		June 30,				June 30,
(in millions)		2012		2011		2012		2011
Stock Options		$	―	$	―	$	2	$	2
Restricted Stock Unit Awards			6		6		14		14
Performance Awards			5		5		3		11
Total(a)(b)(c)(d)		$	11	$	11	$	19	$	27
(a)	Excludes stock-based compensation cost capitalized of $1 million for each of the three months ended June 30, 2012 and 2011.
(b)	Excludes stock-based compensation cost capitalized of $1 million and $2 million for the six months ended June 30, 2012 and 2011, respectively.
(c)	The tax benefit associated with the recorded expense was $4 million and $5 million for the three months ended June 30, 2012 and 2011, respectively.
(d)	The tax benefit associated with the recorded expense was $7 million and $11 million for the six months ended June 30, 2012 and 2011, respectively.

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DUKE ENERGY INDIANA, INC.

Combined Notes To Unaudited Condensed Consolidated Financial Statements - (Continued)

14. Employee Benefit Obligations

Net periodic benefit costs disclosed in the tables below for the qualified pension, non-qualified pension and other post-retirement benefit plans represent the cost of the respective benefit plan to the Duke Energy Registrants 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.

Each of the Subsidiary Registrants participate in qualified pension plans, non-qualified pension plans and other post-retirement benefit plans sponsored by Duke Energy. The net periodic benefit costs shown in the tables below represent the allocated cost of the respective benefit plan for the periods presented. Additionally, the Subsidiary Registrants are allocated their proportionate share of pension and other post-retirement benefit cost for employees of Duke Energy’s shared services affiliate that provide support to the respective Subsidiary Registrant. These allocated amounts are included in the governance and shared services costs for each Subsidiary Registrant discussed in Note 17.

Duke Energy

The following table shows the components of the net periodic benefit costs for the Duke Energy U.S. qualified pension, non-qualified pension  and other post-retirement benefit plans.

		Three Months Ended						Three Months Ended
		June 30, 2012						June 30, 2011
(in millions)		Qualified Pension Plans(a)		Non-Qualified Pension Plans		Other Post-Retirement Benefit Plans(b)		Qualified Pension Plans(a)		Non-Qualified Pension Plans		Other Post-Retirement Benefit Plans(b)
Service cost		$	22	$	―	$	1	$	24	$	1	$	3
Interest cost on projected benefit obligation			59		1		9		58		2		9
Expected return on plan assets			(94)		―		(4)		(96)		―		(4)
Amortization of prior service cost (credit)			2		1		(2)		1		―		(2)
Amortization of net transition liability			―		―		2		―		―		2
Amortization of loss (gain)			25		1		(1)		19		―		(1)
Other			1		―		―		5		―		―
Net periodic costs		$	15	$	3	$	5	$	11	$	3	$	7
(a)	Excludes regulatory asset amortization of $4 million and $3 million for each of the three months ended June 30, 2012 and 2011, respectively, resulting from purchase accounting adjustments associated with Duke Energy’s merger with Cinergy in April 2006.
(b)	Excludes regulatory asset amortization of $2 million for each of the three months ended June 30, 2012 and 2011, resulting from purchase accounting adjustments associated with Duke Energy’s merger with Cinergy in April 2006.

		Six Months Ended						Six Months Ended
		June 30, 2012						June 30, 2011
(in millions)		Qualified Pension Plans(a)		Non-Qualified Pension Plans		Other Post-Retirements Benefit Plans(b)		Qualified Pension Plans(a)		Non-Qualified Pension Plans		Other Post-Retirements Benefit Plans(b)
Service cost		$	45	$	1	$	3	$	48	$	1	$	4
Interest cost on projected benefit obligation			120		3		17		116		4		18
Expected return on plan assets			(188)		―		(8)		(192)		―		(8)
Amortization of prior service cost (credit)			3		1		(4)		3		1		(4)
Amortization of net transition liability			―		―		4		―		―		5
Amortization of loss (gain)			49		1		(3)		38		―		(2)
Other			2		―		―		9		―		―
Net periodic costs		$	31	$	6	$	9	$	22	$	6	$	13
(a)	Excludes regulatory asset amortization of $7 million for each of the six months ended June 30, 2012 and 2011, resulting from purchase accounting adjustments associated with Duke Energy’s merger with Cinergy in April 2006.
(b)	Excludes regulatory asset amortization of $4 million for each of the six months ended June 30, 2012 and 2011, resulting from purchase accounting adjustments associated with Duke Energy’s merger with Cinergy in April 2006.

Duke Energy Carolinas
	Three Months Ended						Three Months Ended
	June 30, 2012						June 30, 2011
(in millions)		Qualified Pension Plans		Non-Qualified Pension Plans		Other Post-Retirement Benefit Plans		Qualified Pension Plans		Non-Qualified Pension Plans		Other Post-Retirement Benefit Plans
Service cost	$	8	$	―	$	―	$	10	$	―	$	1
Interest cost on projected benefit obligation		22		1		4		22		1		4
Expected return on plan assets		(37)		―		(2)		(38)		―		(3)
Amortization of prior service cost (credit)		1		―		(1)		―		―		(2)
Amortization of net transition liability		―		―		2		―		―		3
Amortization of loss		12		―		―		9		―		―
Other		1		―		―		2		―		―
Net periodic costs	$	7	$	1	$	3	$	5	$	1	$	3

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DUKE ENERGY INDIANA, INC.

Combined Notes To Unaudited Condensed Consolidated Financial Statements - (Continued)

	Six Months Ended						Six Months Ended
	June 30, 2012						June 30, 2011
(in millions)		Qualified Pension Plans		Non-Qualified Pension Plans		Other Post-Retirement Benefit Plans		Qualified Pension Plans		Non-Qualified Pension Plans		Other Post-Retirement Benefit Plans
Service cost	$	17	$	―	$	1	$	19	$	―	$	1
Interest cost on projected benefit obligation		45		1		8		43		1		8
Expected return on plan assets		(73)		―		(5)		(75)		―		(5)
Amortization of prior service cost (credit)		1		―		(2)		―		―		(3)
Amortization of net transition liability		―		―		3		―		―		5
Amortization of loss		23		―		1		18		―		1
Other		1		―		―		4		―		―
Net periodic costs	$	14	$	1	$	6	$	9	$	1	$	7

Duke Energy Ohio
		Three Months Ended		Three Months Ended
		June 30, 2012		June 30, 2011
(in millions)			Qualified Pension Plans(a)		Qualified Pension Plans(a)
Service cost		$	1	$	1
Interest cost on projected benefit obligation			8		8
Expected return on plan assets			(11)		(11)
Amortization of loss			3		2
Other			―		1
Net periodic costs(b)		$	1	$	1
(a)	Excludes regulatory asset amortization of $1 million for each of the three months ended June 30, 2012 and 2011, resulting from purchase accounting adjustments associated with Duke Energy’s merger with Cinergy in April 2006.
(b)	Components of net periodic costs for Duke Energy Ohio's other post-retirement benefit plans and non-qualified pension plans were an insignificant amount for each of the three months ended June 30, 2012 and 2011.

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DUKE ENERGY CORPORATION - DUKE ENERGY CAROLINAS, LLC - DUKE ENERGY OHIO, INC. -

DUKE ENERGY INDIANA, INC.

Combined Notes To Unaudited Condensed Consolidated Financial Statements - (Continued)

		Six Months Ended				Six Months Ended
		June 30, 2012				June 30, 2011
(in millions)			Qualified Pension Plans(a)		Other Post-Retirement Benefit Plans(b)		Qualified Pension Plans(a)		Other Post-Retirement Benefit Plans(b)
Service cost		$	3	$	―	$	3	$	―
Interest cost on projected benefit obligation			16		1		16		1
Expected return on plan assets			(22)		―		(22)		―
Amortization of loss (gain)			5		(1)		4		(1)
Other			―		―		1		―
Net periodic costs(c)		$	2	$	―	$	2	$	―
(a)	Excludes regulatory asset amortization of $3 million for each of the six months ended June 30, 2012 and 2011, resulting from purchase accounting adjustments associated with Duke Energy’s merger with Cinergy in April 2006.
(b)	Excludes regulatory asset amortization of $1 million for each of the six months ended June 30, 2012 and 2011, resulting from purchase accounting adjustments associated with Duke Energy’s merger with Cinergy in April 2006.
(c)	Components of net periodic costs for Duke Energy Ohio's non-qualified pension plans were an insignificant amount for each of the six months ended June 30, 2012 and 2011.

Duke Energy Indiana
		Three Months Ended				Three Months Ended
		June 30, 2012				June 30, 2011
(in millions)			Qualified Pension Plans		Other Post-Retirement Benefit Plans		Qualified Pension Plans		Other Post-Retirement Benefit Plans
Service cost		$	3	$	―	$	2	$	―
Interest cost on projected benefit obligation			7		2		8		2
Expected return on plan assets			(11)		(1)		(11)		(1)
Amortization of prior service cost			―		1		1		―
Amortization of loss (gain)			4		(1)		3		1
Other			―		―		1		―
Net periodic costs(a)		$	3	$	1	$	4	$	2
(a)	Components of net periodic costs for Duke Energy Indiana's non-qualified pension plans were an insignificant amount for each of the three months ended June 30, 2012 and 2011.

		Six Months Ended				Six Months Ended
		June 30, 2012				June 30, 2011
(in millions)			Qualified Pension Plans		Other Post-Retirement Benefit Plans		Qualified Pension Plans		Other Post-Retirement Benefit Plans
Service cost		$	5	$	―	$	5	$	―
Interest cost on projected benefit obligation			15		4		15		4
Expected return on plan assets			(23)		(1)		(22)		(1)
Amortization of prior service cost			1		1		1		―
Amortization of loss (gain)			7		(1)		7		1
Other			―		―		1		―
Net periodic costs(a)		$	5	$	3	$	7	$	4
(a)	Components of net periodic costs for Duke Energy Indiana's non-qualified pension plans were an insignificant amount for each of the six months ended June 30, 2012 and 2011.

Employee Savings Plan

Duke Energy sponsors employee savings plans that cover substantially all U.S. employees. Duke Energy made pre-tax employer contributions of $19 million for each of the three months ended June 30, 2012 and 2011, respectively. Duke Energy made pre-tax employer contributions of $47 million and $50 million for the six months ended June 30, 2012 and 2011, respectively.

The Subsidiary Registrants participate in Duke Energy sponsored employee savings plans. The following table shows the respective Subsidiary Registrants’ expense related to its proportionate share of pre-tax employer contributions.

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DUKE ENERGY CORPORATION - DUKE ENERGY CAROLINAS, LLC - DUKE ENERGY OHIO, INC. -

DUKE ENERGY INDIANA, INC.

Combined Notes To Unaudited Condensed Consolidated Financial Statements - (Continued)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in millions)		2012		2011		2012		2011
Duke Energy Carolinas	$	9	$	8	$	20	$	20
Duke Energy Ohio		1		1		2		2
Duke Energy Indiana		1		2		3		5

15. Severance

2011 Severance Plan.In conjunction with the merger, in November 2011, Duke Energy and Progress Energy offered a voluntary severance plan to certain eligible employees. Approximately 1,100 employees from Duke Energy and Progress Energy accepted the termination benefits during the voluntary window period, which closed on November 30, 2011. The estimated amount of severance payments associated with this voluntary plan and other severance benefits are expected to range from $225 million to $275 million.  A significant majority of the severance benefits will be recognized as expense in the second half of 2012 and most of the costs will be charged to Duke Energy Carolinas, Progress Energy Carolinas and Progress Energy Florida.

Other Severance Plans.  Amounts included in the table below represent the severance liability for Duke Energy’s past and on-going severance plans.

	Balance at		Provision /		Cash		Balance at
(in millions)	December 31, 2011		Adjustments		Reductions		June 30, 2012
Duke Energy	$	32	$	(1)	$	(8)	$	23

                As part of Duke Energy Carolinas’ 2011 rate case, the NCUC approved the recovery of $101 million of previously recorded expenses related to a prior year Voluntary Opportunity Plan which were recorded in 2012.

16. Income Taxes and Other Taxes

Income Taxes. Duke Energy and its subsidiaries file income tax returns in the U.S. with federal and various state governmental authorities, and in certain foreign jurisdictions. The taxable income of Duke Energy and its subsidiaries is reflected in Duke Energy’s U.S. federal and state income tax returns. These subsidiaries have a tax sharing agreement with Duke Energy where the separate return method is used to allocate tax expenses and benefits to the subsidiaries whose investments or results of operations provide these tax expenses and benefits. The accounting for income taxes essentially represents the income taxes that each of these subsidiaries would incur if it were a separate company filing its own tax return as a C-Corporation.

The effective tax rates for each of the Duke Energy Registrants are as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2012		2011		2012		2011
Duke Energy	32.2	%	30.4	%	29.8	%	30.8	%
Duke Energy Carolinas	37.2	%	35.5	%	36.7	%	35.3	%
Duke Energy Ohio	39.9	%	9.6	%	38.1	%	30.4	%
Duke Energy Indiana	34.4	%	29.3	%	45.7	%	32.3	%

For the three months ended June 30, 2012, Duke Energy’s effective tax rate increased primarily due to a $10 million reduction of deferred tax liabilities as a result of an election related to the transfer of certain gas fired generation assets to its wholly owned subsidiary Duke Energy Commercial Asset Management, LLC (DECAM) in the second quarter of 2011. For the six months ended June 30, 2012, Duke Energy reflected a decrease in its effective tax rate primarily due to a decrease in pretax income related to the Edwardsport IGCC project impairment charges.

In addition, for the three and six months ended June 30, 2012, Duke Energy Carolinas reflected an increase in its effective tax rate primarily due to a decrease in AFUDC equity, Duke Energy Ohio’s effective tax rate increased primarily due to an increase in pretax income and a $10 million reduction of deferred tax liabilities as a result of an election related to the transfer of certain gas-fired generation assets to its wholly owned subsidiary DECAM in the second quarter of 2011, and Duke Energy Indiana reflected an increase in its effective tax rate primarily due to an increase in pretax loss related to the Edwardsport IGCC project impairment charges. See Note 4 for further details on the impairment charges.

Excise Taxes. Certain excise taxes levied by state or local governments are collected by the Duke Energy Registrants from its customers. These taxes, which are required to be paid regardless of the Duke Energy Registrants’ ability to collect from the customer, are accounted for on a gross basis. When each of the Duke Energy Registrants act 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. Excise taxes for each Duke Energy Registrant are accounted for on a gross basis and recorded as revenues and other tax expense in the respective Condensed Consolidated Statements of Operations were as follows:

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DUKE ENERGY INDIANA, INC.

Combined Notes To Unaudited Condensed Consolidated Financial Statements - (Continued)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in millions)	2012		2011		2012		2011
Duke Energy Carolinas	$	39	$	37	$	78	$	73
Duke Energy Ohio		23		25		53		59
Duke Energy Indiana		8		7		16		15
Duke Energy	$	70	$	69	$	147	$	147

17. Related Party Transactions

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

Duke Energy Carolinas
	Balances due to and due from related parties included on the Condensed Consolidated Balance Sheets, which exclude
assets or liabilities associated with accrued pension and other post-retirement benefits and money pool arrangements, are
presented in the following table:
(in millions)		June 30, 2012		December 31, 2011
Current assets
	Receivables	$	―	$	2
	Other	$	95	$	95
Non-current assets
	Other	$	111	$	111
Current liabilities
	Accounts payable	$	(97)	$	(157)
	Taxes Accrued	$	(10)	$	(14)
Non-current liabilities
	Deferred income taxes	$	(4,891)	$	(4,555)
	Other	$	(64)	$	(64)

	As discussed further in Note 14, Duke Energy Carolinas participates in Duke Energy's qualified pension, non-qualified pension
and other post-retirement benefit plans and is allocated its proportionate share of expenses associated with these plans.  Additionally, Duke Energy Carolinas has been allocated accrued pension and other post-retirement benefit obligations as shown in the following table:
(in millions)		June 30, 2012		December 31, 2011
Other current liabilities		$	8	$	8
Accrued pension and other post-retirement benefit obligations			232		248
Total allocated accrued pension and other post-retirement benefit obligations		$	240	$	256

	Amounts related to transactions with related parties included in the Condensed Consolidated Statements of Operations
and Comprehensive Income are presented in the following table:
		Three Months Ended				Six Months Ended
(in millions)		June 30, 2012		June 30, 2011		June 30, 2012		June 30, 2011
Corporate governance and shared service expenses(a)		$	254	$	251	$	489	$	504
Indemnification coverages(b)		$	6	$	5	$	11	$	10
Rental income and other charged expenses, net(c)		$	(5)	$	(2)	$	(7)	$	(4)
Interest expense on money pool(d)		$	1	$	―	$	1	$	―
(a)	Duke Energy Carolinas is charged its proportionate share of corporate governance and other costs by an unconsolidated affiliate that is a consolidated affiliate of Duke Energy. Corporate governance and other shared services costs are primarily related to human resources, employee benefits, legal and accounting fees, as well as other third party costs. These amounts are recorded in Operation, Maintenance and Other within Operating Expenses on the Condensed Consolidated Statements of Operations and Comprehensive Income.
(b)	Duke Energy Carolinas incurs expenses related to certain indemnification coverages through Bison, Duke Energy’s wholly owned captive insurance subsidiary. These expenses are recorded in Operation, Maintenance and Other within Operating Expenses on the Condensed Consolidated Statements of Operations and Comprehensive Income.
(c)	Duke Energy Carolinas records income associated with the rental of office space to a consolidated affiliate of Duke Energy, as well as its proportionate share of certain charged expenses from affiliates of Duke Energy.
(d)	Recorded in Interest Expense on the Condensed Consolidated Statements of Operations and Comprehensive Income. See Note 6 for additional information related to money pool.

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DUKE ENERGY INDIANA, INC.

Combined Notes To Unaudited Condensed Consolidated Financial Statements - (Continued)

Duke Energy Ohio
	Balances due to and due from related parties included in the Condensed Consolidated Balance Sheets, which exclude
assets or liabilities associated with accrued pension and other post-retirement benefits, CRC and money pool arrangements, are presented in the following table:
(in millions)		June 30, 2012		December 31, 2011
Current assets
	Receivables	$	7	$	15
	Other	$	98	$	76
Non-current assets
	Other	$	28	$	22
Current liabilities
	Accounts payable	$	(73)	$	(84)
	Taxes Accrued	$	(4)	$	―
Non-current liabilities
	Deferred income taxes	$	(1,882)	$	(1,798)
	Other	$	(34)	$	―

	As discussed further in Note 14, Duke Energy Ohio participates in Duke Energy’s qualified pension, non-qualified
pension and other post-retirement benefit plans and is allocated its proportionate share of expenses associated with these plans. Additionally, Duke Energy Ohio has been allocated accrued pension and other post-retirement benefit obligations as shown in the following table:
(in millions)		June 30, 2012		December 31, 2011
Other current liabilities		$	4	$	4
Accrued pension and other post-retirement benefit obligations			160		166
Total allocated accrued pension and other post-retirement benefit obligations		$	164	$	170

	Amounts related to transactions with related parties included in the Condensed Consolidated Statements of Operations and
Comprehensive Income are presented in the following table:
		Three Months Ended				Six Months Ended
(in millions)		June 30, 2012		June 30, 2011		June 30, 2012		June 30, 2011
Corporate governance and shared service expenses(a)		$	86	$	91	$	176	$	186
Indemnification coverages(b)		$	3	$	4	$	7	$	8
Rental income and other charged expenses, net(c)		$	―	$	―	$	(1)	$	―
CRC interest income(d)		$	1	$	3	$	3	$	7
(a)	Duke Energy Ohio is charged its proportionate share of corporate governance and other costs by an unconsolidated affiliate that is a consolidated affiliate of Duke Energy. Corporate governance and other shared services costs are primarily related to human resources, employee benefits, legal and accounting fees, as well as other third party costs. These amounts are recorded in Operation, Maintenance and Other within Operating Expenses on the Condensed Consolidated Statements of Operations and Comprehensive Income.
(b)	Duke Energy Ohio incurs expenses related to certain indemnification coverages through Bison, Duke Energy’s wholly owned captive insurance subsidiary. These expenses are recorded in Operation, Maintenance and Other within Operating Expenses on the Condensed Consolidated Statements of Operations and Comprehensive Income.
(c)	Duke Energy Ohio records income associated with the rental of office space to a consolidated affiliate of Duke Energy, as well as its proportionate share of certain charged expenses from affiliates of Duke Energy.
(d)	As discussed in Note 11, certain trade receivables have been sold by Duke Energy Ohio to CRC, an unconsolidated entity formed by a subsidiary of Duke Energy. The proceeds obtained from the sales of receivables are largely cash but do include a subordinated note from CRC for a portion of the purchase price. The interest income associated with the subordinated note is recorded in Other Income and Expenses, net on the Condensed Consolidated Statements of Operations and Comprehensive Income.

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DUKE ENERGY INDIANA, INC.

Combined Notes To Unaudited Condensed Consolidated Financial Statements - (Continued)

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

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

Duke Energy Indiana
	Balances due to and due from related parties included in the Condensed Consolidated Balance Sheets, which exclude  assets or
liabilities associated with accrued pension and other post-retirement benefits, CRC and money pool arrangements, are presented in the following table.
(in millions)		June 30, 2012		December 31, 2011
Current assets
	Receivables	$	16	$	18
	Other	$	7	$	13
Non-current assets
	Other	$	2	$	2
Current liabilities
	Accounts payable	$	(38)	$	(72)
	Taxes accrued	$	―	$	(25)
	Other	$	(8)	$	―
Non-current liabilities
	Deferred income taxes	$	(835)	$	(927)
	Other	$	(22)	$	(22)

	As discussed further in Note 14, Duke Energy Indiana participates in Duke Energy’s qualified pension, non-qualified pension
and other post-retirement benefit plans and is allocated its proportionate share of expenses associated with these plans. Additionally, Duke Energy Indiana has been allocated accrued pension and other post-retirement benefit obligations as shown in the following table:
(in millions)		June 30, 2012		December 31, 2011
Other current liabilities		$	2	$	2
Accrued pension and other post-retirement benefit obligations			222		231
Total allocated accrued pension and other post-retirement benefit obligations		$	224	$	233

	Amounts related to transactions with related parties included in the Condensed Consolidated Statements of Operations and
Comprehensive Income are presented in the following table:
		Three Months Ended				Six Months Ended
(in millions)		June 30, 2012		June 30, 2011		June 30, 2012		June 30, 2011
Corporate governance and shared service expenses(a)		$	98	$	99	$	199	$	206
Indemnification coverages(b)		$	2	$	2	$	4	$	4
Rental income and other charged expenses, net(c)		$	―	$	2	$	(1)	$	3
Interest expense on money pool(d)		$	1	$	―	$	1	$	―
CRC interest income(e)		$	1	$	3	$	3	$	7
(a)	Duke Energy Indiana is charged its proportionate share of corporate governance and other costs by an unconsolidated affiliate that is a consolidated affiliate of Duke Energy. Corporate governance and other shared services costs are primarily related to human resources, employee benefits, legal and accounting fees, as well as other third party costs. These amounts are recorded in Operation, Maintenance and Other within Operating Expenses on the Condensed Consolidated Statements of Operations and Comprehensive Income.
(b)	Duke Energy Indiana incurs expenses related to certain indemnification coverages through Bison, Duke Energy’s wholly-owned captive insurance subsidiary. These expenses are recorded in Operation, Maintenance and Other within Operating Expenses on the Condensed Consolidated Statements of Operations and Comprehensive Income.
(c)	Duke Energy Indiana records income associated with the rental of office space to a consolidated affiliate of Duke Energy, as well as its proportionate share of certain charged expenses from affiliates of Duke Energy.
(d)	Recorded in Interest Expense on the Condensed Consolidated Statements of Operations and Comprehensive Income. See Note 6 for additional information related to money pool.
(e)	As discussed in Note 11, certain trade receivables have been sold by Duke Energy Indiana to CRC, an unconsolidated entity formed by a subsidiary of Duke Energy. The proceeds obtained from the sales of receivables are largely cash but do include a subordinated note from CRC for a portion of the purchase price. The interest income associated with the subordinated note is recorded in Other Income and Expenses, net on the Condensed Consolidated Statements of Operations and Comprehensive Income.

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DUKE ENERGY INDIANA, INC.

Combined Notes To Unaudited Condensed Consolidated Financial Statements - (Continued)

In January 2012, Duke Energy Indiana recorded a non-cash equity transfer of $26 million on the purchase of Vermillion from Duke Energy Ohio. See Note 2 for further discussion.

18. New Accounting Standards

The following new accounting standards were adopted by the Duke Energy Registrants subsequent to June 30, 2011 and the impact of such adoption, if applicable, has been presented in the respective Condensed Consolidated Financial Statements of the Duke Energy Registrants:

ASC 220 — Comprehensive Income. In June 2011, the FASB amended the existing requirements for presenting comprehensive income in financial statements primarily to increase the prominence of items reported in other comprehensive income (OCI) and to facilitate the convergence of U.S. GAAP and IFRS. Specifically, the revised guidance eliminates the option previously provided to present components of OCI as part of the statement of changes in stockholders’ equity. Accordingly, all non-owner changes in stockholders’ equity are required to be presented either in a single continuous statement of comprehensive income or in two separate but consecutive financial statements. For the Duke Energy Registrants, this revised guidance was effective on a retrospective basis for interim and annual periods beginning January 1, 2012. The adoption of this standard changed the presentation of the Duke Energy Registrants’ financial statements but did not affect the calculation of net income, comprehensive income or earnings per share.

ASC 820 — Fair Value Measurements and Disclosures. In May 2011, the FASB amended existing requirements for measuring fair value and for disclosing information about fair value measurements. This revised guidance results in a consistent definition of fair value, as well as common requirements for measurement and disclosure of fair value information between U.S. GAAP and International Financial Reporting Standards (IFRS). In addition, the amendments set forth enhanced disclosure requirements with respect to recurring Level 3 measurements, nonfinancial assets measured or disclosed at fair value, transfers between levels in the fair value hierarchy, and assets and liabilities disclosed but not recorded at fair value. For the Duke Energy Registrants, the revised fair value measurement guidance was effective on a prospective basis for interim and annual periods beginning January 1, 2012. The adoption of this new guidance did not have a significant impact on the Duke Energy Registrants disclosures or their consolidated results of operations, cash flows, or financial position.

ASC 350 — Intangibles–Goodwill and Other. In September 2011, the FASB amended existing goodwill impairment testing accounting guidance to provide an entity testing goodwill for impairment with the option of performing a qualitative assessment prior to calculating the fair value of a reporting unit in step one of a goodwill impairment test. Under this revised guidance, a qualitative assessment would require an evaluation of economic, industry, and company-specific considerations. If an entity determines, on a basis of such qualitative factors, that the fair value of a reporting unit is more likely than not less than the carrying value of a reporting unit, then step one and if necessary, step two of the impairment test must be performed. Otherwise, no further impairment testing would be required. The revised goodwill impairment testing accounting guidance is effective for the Duke Energy Registrants’ annual and interim goodwill impairment tests performed for fiscal years beginning January 1, 2012, with early adoption of this revised guidance permitted for annual and interim goodwill impairment tests performed as of a date before September 15, 2011. Since annual goodwill impairment tests are performed by Duke Energy as of August 31, the Duke Energy Registrants early adopted this revised accounting guidance during the third quarter of 2011 and applied that guidance to their annual goodwill impairment tests for 2011.

The following new Accounting Standards Updates (ASU) have been issued, but have not yet been adopted by Duke Energy, as of June 30, 2012.

ASC 210—Balance Sheet. In December 2011, the FASB issued revised accounting guidance to amend the existing disclosure requirements for offsetting financial assets and liabilities to enhance current disclosures, as well as to improve comparability of balance sheets prepared under U.S. GAAP and IFRS. The revised disclosure guidance affects all companies that have financial instruments and derivative instruments that are either offset in the balance sheet (i.e., presented on a net basis) or subject to an enforceable master netting arrangement and/or similar agreement. The revised guidance requires that certain enhanced quantitative and qualitative disclosures be made with respect to a company’s netting arrangements and/or rights of setoff associated with its financial instruments and/or derivative instruments including associated collateral. For the Duke Energy Registrants, the revised disclosure guidance is effective on a retrospective basis for interim and annual periods beginning January 1, 2013. Other than additional disclosures, this revised guidance does not impact the consolidated results of operations, cash flows or financial position of Duke Energy.  

19. Subsequent Events

For information on subsequent events related to acquisitions and sales of other assets, regulatory matters, commitments and contingencies, and earnings per share see Notes 2, 4, 5 and 12, respectively.

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DUKE ENERGY INDIANA, INC.

Combined Notes To Unaudited Condensed Consolidated Financial Statements - (Continued)

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

INTRODUCTION

Duke Energy

Duke Energy Corporation (collectively with its subsidiaries, Duke Energy) is an energy company headquartered in Charlotte, North Carolina. Duke Energy operates in the United States (U.S.) primarily through its wholly owned subsidiaries, Duke Energy Carolinas, LLC (Duke Energy Carolinas), Duke Energy Ohio, Inc. (Duke Energy Ohio), which includes Duke Energy Kentucky, Inc. (Duke Energy Kentucky), and Duke Energy Indiana, Inc. (Duke Energy Indiana), as well as in Latin America through International Energy.

Management’s Discussion and Analysis includes financial information prepared in accordance with generally accepted accounting principles (GAAP) in the U.S., as well as certain non-GAAP financial measures such as adjusted earnings and adjusted earnings per share (EPS), discussed below. Generally, a non-GAAP financial measure is a numerical measure of financial performance, financial position or cash flows that excludes (or includes) amounts that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP. The non-GAAP financial measures should be viewed as a supplement to, and not a substitute for, financial measures presented in accordance with GAAP. Non-GAAP measures as presented herein may not be comparable to similarly titled measures used by other companies.

When discussing Duke Energy’s consolidated financial information, it necessarily includes the results of its three separate subsidiary registrants, Duke Energy Carolinas, Duke Energy Ohio and Duke Energy Indiana (collectively referred to as the Subsidiary Registrants), which, along with Duke Energy, are collectively referred to as the Duke Energy Registrants. The following combined Management’s Discussion and Analysis of Financial Condition and Results of Operations is separately filed by Duke Energy, Duke Energy Carolinas, Duke Energy Ohio and Duke Energy Indiana. However, none of the registrants makes any representation as to information related solely to Duke Energy or the Subsidiary Registrants of Duke Energy other than itself. The Duke Energy Registrants, as defined above, does not include Progress Energy, Inc., Progress Energy Carolinas or Progress Energy Florida, unless otherwise noted.

Management’s Discussion and Analysis should be read in conjunction with the Unaudited Condensed Consolidated Financial Statements and Notes.

Merger with Progress Energy

Description of Transaction

On July 2, 2012, Duke Energy completed the merger contemplated by the Agreement and Plan of Merger (Merger Agreement), among Diamond Acquisition Corporation, a North Carolina corporation and Duke Energy’s wholly owned subsidiary (Merger Sub) and Progress Energy, Inc. (Progress Energy), a North Carolina corporation engaged in the regulated utility business of generation, transmission and distribution and sale of electricity in portions of North Carolina, South Carolina and Florida. As a result of the merger, Merger Sub was merged into Progress Energy and Progress Energy became a wholly owned subsidiary of Duke Energy.

The merger between Duke Energy and Progress Energy provides increased scale and diversity with potentially enhanced access to capital over the long-term and a greater ability to undertake the significant construction programs necessary to respond to increasing environmental regulation, plant retirements and customer demand growth. Duke Energy’s business risk profile is expected to improve over-time due to the increased proportion of the business that is regulated. Additionally, cost savings, efficiencies and other benefits are expected from the combined operations.

Immediately preceding the merger, Duke Energy completed a one-for-three reverse stock split with respect to the issued and outstanding shares of Duke Energy common stock. The shareholders of Duke Energy approved the reverse stock split at Duke Energy’s special meeting of shareholders held on August 23, 2011. All share and per share amounts presented herein reflect the impact of the one-for-three reverse stock split.

Progress Energy’s shareholders received 0.87083 shares of Duke Energy common stock in exchange for each share of Progress Energy common stock outstanding as of July 2, 2012. Generally, all outstanding Progress Energy equity-based compensation awards were converted into Duke Energy equity-based compensation awards using the same ratio. The merger was structured as a tax-free exchange of shares.

Merger Related Regulatory Matters

Federal Energy Regulatory Commission (FERC).On June 8, 2012, the FERC conditionally approved the merger including Duke Energy and Progress Energy’s revised market power mitigation plan, the Joint Dispatch Agreement (JDA) and the joint Open Access Transmission Tariff (OATT). The revised market power mitigation plan provides for the construction of seven transmission projects (Long-term FERC Mitigation) and interim firm power sale agreements during the construction of the transmission projects (Interim FERC Mitigation). The Long-term FERC Mitigation is estimated to cost approximately $110 million, excluding one project previously planned to be constructed by Progress Energy Carolinas. The Long-term FERC Mitigation plan will increase power imported into the Duke Energy Carolinas and Progress Energy Carolinas service areas and enhance competitive power supply options in the service areas. The construction of these projects will occur over the next two to three years. In conjunction with the Interim FERC Mitigation plan, Duke Energy Carolinas and Progress Energy Carolinas entered into power sale agreements that were effective with the consummation of the merger. These agreements, or similar power sale agreements, will be in place until the Long-term FERC Mitigation is operational. The agreements are for around the clock delivery of power during the winter and summer in quantities that vary by season and by peak period.

The FERC order requires an independent party to monitor whether the power sale agreements remain in effect during construction of the transmission projects and provide quarterly reports to the FERC regarding the status of construction of the transmission projects.

·On June 25, 2012, Duke Energy and Progress Energy accepted the conditions imposed by the FERC.

·On July 10, 2012, certain intervenors requested a rehearing seeking to overturn the June 8, 2012 order by the FERC.

North Carolina Utilities Commission (NCUC) and Public Service Commission of South Carolina (PSCSC). In September 2011, Duke Energy and Progress Energy reached settlements with the Public Staff of the North Carolina Utilities Commission (NC Public Staff) and the South Carolina Office of Regulatory Staff (ORS) and certain other interested parties in connection with the regulatory proceedings related to the merger, the JDA and the OATT that were pending before the NCUC and PSCSC. These settlements were updated in May 2012 to reflect the results of ongoing merger related applications pending before the FERC. As part of these settlements and the application for approval of the merger by the NCUC and PSCSC, Duke Energy Carolinas and Progress Energy Carolinas agreed to the conditions and obligations listed below.

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·Guarantee of $650 million in system fuel and fuel-related savings over 60 to 78 months for North Carolina and South Carolina retail customers. The savings are expected to be achieved through coal blending, coal commodity and transportation savings, gas transportation savings and the joint dispatch of Duke Energy Carolinas and Progress Energy Carolinas generation fleets.

·Duke Energy Carolinas and Progress Energy Carolinas will not seek recovery from retail customers for the cost of Long-term FERC Mitigation for five years following merger consummation. After five years, Duke Energy Carolinas and Progress Energy Carolinas may seek to recover the costs of the Long-term FERC Mitigation, but must show that the projects are needed to provide adequate and reliable retail service regardless of the merger.

·A $65 million rate reduction over the term of the Interim FERC Mitigation to reflect the cost of capacity not available to Duke Energy Carolinas and Progress Energy Carolinas retail customers during the Interim FERC Mitigation. The rate reduction will be achieved through a rider and will be apportioned between Duke Energy Carolinas and Progress Energy Carolinas retail customers.

·Duke Energy Carolinas and Progress Energy Carolinas will not seek recovery from retail customers for any revenue shortfalls or fuel-related costs associated with the Interim FERC Mitigation. The Interim FERC Mitigation agreements were in a loss position for Duke Energy as of the date of the merger consummation.

·Duke Energy Carolinas and Progress Energy Carolinas will not seek recovery from retail customers for any of their allocable share of merger related severance costs.

·Duke Energy Carolinas and Progress Energy Carolinas will provide community support through charitable contributions for four years, workforce development, low income energy assistance, and green energy assistance at a total cost of approximately $100 million, which cannot be recovered from retail customers.

·Duke Energy Carolinas and Progress Energy Carolinas will abide by revised North Carolina Regulatory Conditions and Code of Conduct governing their operations.

On June 29, 2012, the NCUC approved the merger application and the JDA application with conditions that were reflective of the settlement agreements described above. On July 2, 2012, the PSCSC approved the JDA application subject to Duke Energy Carolinas and Progress Energy Carolinas providing their South Carolina retail customers pro rata benefits equivalent to those approved by the NCUC in its merger approval order.

On July 6, 2012, the NCUC issued an order initiating investigation and scheduling hearings on the Duke Energy board of directors’ decision on July 2, 2012, to replace William D. Johnson with James E. Rogers as president and CEO of Duke Energy subsequent to the merger close. See Note 4 for further information.

Kentucky Public Service Commission. On June 24, 2011, Duke Energy and Progress Energy filed a settlement agreement with the Kentucky Attorney General. On August 2, 2011, the KPSC issued an order conditionally approving the merger and required Duke Energy and Progress Energy to accept all conditions contained in the order. Duke Energy and Progress Energy requested and were granted rehearing on the limited issue of the wording of one condition relating to the composition of Duke Energy’s post-merger board of directors. On October 28, 2011, the KPSC issued its order approving a settlement with the Kentucky Attorney General on the revised condition relating to the composition of the post-merger Duke Energy board. Duke Energy and Progress Energy filed their acceptance of the condition on November 2, 2011. Duke Energy Kentucky agreed to (i) not file new gas or electric base rate applications for two years from the date of the KPSC’s final order in the merger proceedings, (ii) make five annual shareholder contributions of $165,000 each to support low-income weatherization efforts and economic development within Duke Energy Kentucky’s service territory and (iii) not seek recovery from retail customers for any of their allocable share of merger related costs.

Accounting Charges to be Recognized Related to the Merger Consummation

Duke Energy anticipates recording charges of approximately $450 million to $550 million in the second half of 2012 associated with the merger. This estimate includes the costs of the Long-term FERC Mitigation plan, Interim FERC Mitigation, the retail rate reduction associated with Interim FERC Mitigation, employee severance, obligations to provide community support and merger transaction expenses. The majority of these charges will be recognized by Duke Energy Carolinas and Progress Energy Carolinas. See Note 15 for further information related to employee severance expenses.

Duke Energy also expects to incur significant system integration and other merger-related transition costs primarily through 2014 that are necessary in order to achieve certain cost savings, efficiencies and other benefits anticipated to result from the merger with Progress Energy.

RESULTS OF OPERATIONS

In this section, Duke Energy provides analysis and discussion of earnings and factors affecting earnings on both a GAAP and non-GAAP basis.

Management evaluates financial performance in part based on the non-GAAP financial measure, adjusted earnings and adjusted diluted EPS, which are measured as income from continuing operations after deducting income attributable to noncontrolling interests, adjusted for the dollar and per-share impact of special items and the mark-to-market impacts of economic hedges in the Commercial Power segment. Special items represent certain charges and credits, which management believes will not be recurring on a regular basis, although it is reasonably possible such charges and credits could recur. Mark-to-market adjustments reflect the mark-to-market impact of derivative contracts, which is recognized in GAAP earnings immediately as such derivative contracts do not qualify for hedge accounting or regulatory accounting treatment, used in Duke Energy’s hedging of a portion of economic value of its generation assets in the Commercial Power segment. The economic value of the generation assets is subject to fluctuations in fair value due to market price volatility of the input and output commodities (e.g., coal, power) and, as such, the economic hedging involves both purchases and sales of those input and output commodities related to the generation assets. Because the operations of the generation assets are accounted for under the accrual method, management believes that excluding the impact of mark-to-market changes of the economic hedge contracts from operating earnings until settlement better matches the financial impacts of the hedge contract with the portion of economic value of the underlying hedged asset. Management believes that the presentation of adjusted earnings and adjusted diluted EPS provide useful information to investors, as it provides them an additional relevant comparison of Duke Energy’s performance across periods. Management uses these non-GAAP financial measures for planning and forecasting and for reporting results to the Board of Directors, employees, shareholders, analysts and investors concerning Duke Energy’s financial performance. The most directly comparable GAAP measures for adjusted earnings and adjusted diluted EPS are net income and diluted EPS attributable to Duke Energy common shareholders, which include the dollar and per-share impact of special items, the mark-to-market impacts of economic hedges in the Commercial Power segment and discontinued operations.

Executive Overview

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The following tables reconcile adjusted earnings to GAAP net income attributable to Duke Energy and adjusted diluted EPS to GAAP diluted EPS attributable to Duke Energy:

		Three Months Ended June 30,
		2012				2011
(in millions, except per-share amounts)		Amount		EPS		Amount		EPS
Total Adjusted Earnings	$	456	$	1	$	439	$	1
Economic Hedges (Mark-to-Market), net of tax		(4)		(0)		―		―
Costs to Achieve Progress Energy Merger, net of tax		(7)		(0)		(4)		(0)
Income from Discontinued Operations, net of tax		(1)		―		―		―
Net Income Attributable to Duke Energy	$	444	$	0.99	$	435	$	0.98

For the three months ended June 30, 2012, adjusted earnings attributable to Duke Energy were $456 million, or $1.02 per diluted share, compared to adjusted earnings of $439 million or $0.99 per diluted share, for the same period in 2011. The increase as compared to the prior period was primarily due to:

·Implementation of revised rates in North Carolina and South Carolina,

·Lower operation and maintenance costs; and

·Midwest coal stability charge revenues.

Partially offset by:

·Lower non-regulated Midwest coal generation volumes and margin, net of 2012 capacity revenues,  

·Higher depreciation and amortization expense,

·Unfavorable results in Central America, and

·Unfavorable weather.

	Six Months Ended June 30,
		2012				2011
(in millions, except per-share amounts)		Amount		EPS		Amount		EPS
Total Adjusted Earnings	$	962	$	2.16	$	962	$	2.17
Economic Hedges (Mark-to-Market), net of tax		(3)		(0.01)		(3)		(0.01)
Edwardsport Impairment, net of tax		(268)		(0.60)		―		―
Voluntary Opportunity Plan Deferral, net of tax		60		0.13		―		―
Costs to Achieve Progress Energy Merger, net of tax		(13)		(0.03)		(13)		(0.03)
Income from Discontinued Operations, net of tax		1		―		―		―
Net Income Attributable to Duke Energy	$	739	$	1.65	$	946	$	2.13

For the six months ended June 30, 2012, adjusted earnings attributable to Duke Energy were $962 million, or $2.16 per diluted share, compared to adjusted earnings of $962 million or $2.17 per diluted share, for the same period in 2011. The activity as compared to the prior period is primarily due to:

·Unfavorable weather across all jurisdictions,

·Lower non-regulated Midwest coal generation volumes and margin, net of 2012 capacity revenues, and

·Higher depreciation and amortization.

Partially offset by:

·Implementation of revised rates in North Carolina and South Carolina,

·Lower operation and maintenance costs, and

·Midwest coal stability charge.

Segment Results

Effective with the first quarter of 2012, management began evaluating segment performance based on segment income. Segment income is defined as income from continuing operations net of income attributable to noncontrolling interests. Segment Income, as discussed below, includes intercompany revenues and expenses that are eliminated in the Condensed Consolidated Financial Statements. In conjunction with management’s use of the new reporting measure, certain governance costs that were previously unallocated have now been allocated to each of the segments. In addition, direct interest expense and income taxes are included in segment income. Prior year financial information has been recast to conform to the current year presentation. None of these changes impacts the reportable operating segments or the Duke Energy Registrants’ previously reported consolidated revenues, net income or EPS.

See Note 3 to the Unaudited Condensed Consolidated Financial Statements, “Business Segments,” for a discussion of Duke Energy’s segment structure.

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Duke Energy’s segment income may not be comparable to a similarly titled measure of another company because other entities may not calculate segment income in the same manner. Segment income is summarized in the following table, and detailed discussions follow.

Segment Income by Business Segment
	Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	2012		2011			2012	2011
USFE&G	$	337	$	297	$	473	$	638
Commercial Power		28		30		59		79
International Energy		105		127		247		255
Total reportable segment net income		470		454		779		972
Other		(25)		(19)		(41)		(26)
Discontinued Operations		(1)		―		1		―
Net Income Attributable to Duke Energy	$	444	$	435	$	739	$	946

USFE&G
	USFE&G includes the regulated operations of Duke Energy Carolinas, Duke Energy Ohio and Duke Energy Indiana.
		Three Months Ended June 30,						Six Months Ended June 30,
						Increase						Increase
(in millions, except where noted)		2012		2011		(Decrease)		2012		2011		(Decrease)
Operating revenues		$	2,697	$	2,549	$	148	$	5,365	$	5,232	$	133
Operating expenses			2,099		2,042		57		4,481		4,123		358
Gains on sales of other assets and other, net			3		1		2		7		1		6
Operating income			601		508		93		891		1,110		(219)
Other income and expenses, net			62		67		(5)		124		129		(5)
Interest expense			143		134		9		289		274		15
Income before income taxes			520		441		79		726		965		(239)
Income tax expense			183		144		39		253		327		(74)
Segment Income		$	337	$	297	$	40	$	473	$	638	$	(165)
Duke Energy Carolinas’ GWh sales(a)			19,574		20,210		(636)		39,035		40,794		(1,759)
Duke Energy Midwest’s GWh sales(a)(b)			14,234		13,917		317		28,557		28,689		(132)
Net proportional MW capacity in operation(c)									27,145		26,907		238
(a)	Gigawatt-hours (GWh).
(b)	Duke Energy Ohio (Ohio transmission and distribution only), Duke Energy Indiana and Duke Energy Kentucky collectively
	referred to as Duke Energy Midwest within this USFE&G segment discussion.
(c)	Megawatt (MW).

	The following table shows the percent changes in GWh sales and average number of customers for the current three
and six month periods compared to the same periods in the prior year. Except as otherwise noted, the below percentages represent billed sales only and are not weather normalized.
Duke Energy Carolinas
		Three Months Ended	Six Months Ended
Increase (decrease) over prior year		June 30, 2012	June 30, 2012
Residential sales(a)		(8.2%)	(11.5%)
General service sales(a)		(0.1%)	(0.8%)
Industrial sales(a)		1.2%	1.5%
Wholesale power sales		(16.8%)	(17.8%)
Total Duke Energy Carolinas sales(b)		(3.1%)	(4.3%)
Average number of customers		0.6%	0.5%
(a)	Major components of Duke Energy Carolinas’ retail sales.
(b)	Consists of all components of Duke Energy Carolinas’ sales, including all billed and unbilled retail sales, and wholesale
	sales to incorporated municipalities and to public and private utilities and power marketers.
Duke Energy Midwest
		Three Months Ended	Six Months Ended
Increase (decrease) over prior year		June 30, 2012	June 30, 2012
Residential sales(a)		(5.6%)	(9.3%)
General service sales(a)		(0.8%)	(2.8%)
Industrial sales(a)		2.0%	2.1%
Wholesale power sales		3.3%	(0.1%)
Total Duke Energy Midwest sales(b)		2.3%	(0.5%)
Average number of customers		0.5%	0.5%
(a)	Major components of Duke Energy Midwest’s retail sales.
(b)	Consists of all components of Duke Energy Midwest’s sales, including all billed and unbilled retail sales, and wholesale sales
	to incorporated municipalities and to public and private utilities and power marketers.

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Three Months Ended June 30, 2012 as Compared to June 30, 2011

Operating Revenues.The increase was driven primarily by:

·A $111 million net increase in retail rates and rate riders primarily due to revised retail rates resulting from the 2011 North Carolina and South Carolina rate cases implemented in the first quarter of 2012, and revenues recognized for the energy efficiency programs; and

·A $71 million increase in fuel revenues (including emission allowances) driven primarily by higher fuel rates for electric retail customers in all regions and higher revenues in Ohio for purchases of power as a result of the new Ohio Electric Security Plan (ESP) which became effective January 1, 2012, partially offset by decreased demand from electric retail customers mainly due to less favorable weather conditions, and lower natural gas fuel rates in Ohio and Kentucky. Fuel revenues represent sales to retail and wholesale customers.

Partially offsetting these increases was:

·A $35 million decrease in electric sales (net of fuel) to retail customers due to overall less favorable weather conditions in 2012 compared to the same period in 2011. For the Carolinas, cooling degree days for the second quarter of 2012 were 5% above normal as compared to 31% above normal during the same period in 2011. For the Midwest, cooling degree days for the second quarter of 2012 were 37% above normal as compared to 17% above normal during the same period in 2011.

Operating Expenses.The increase was driven primarily by:

·A $61 million increase in fuel expense (including purchased power and natural gas purchases for resale) primarily related to higher purchases of power in Ohio (as a result of the new Ohio ESP), higher volumes of natural gas used in electric generation, higher coal prices, higher purchased power costs in the Carolinas and Indiana, partially offset by lower volume of coal used in electric generation resulting from less favorable weather conditions and lower coal-fired generation due to low natural gas prices, and lower prices for natural gas used in electric generation; and

·A $29 million increase in depreciation and amortization primarily due to increases in depreciation as a result of additional plant in service and amortization of regulatory assets.

Partially offsetting these increases was:

·A $37 million decrease in operating and maintenance expense primarily due to lower storm costs, partially offset by increased costs associated with the energy efficiency programs.

Income Tax Expense.  The increase is primarily due to the increase in pretax income. The effective tax rate for the three months ended June 30, 2012 and 2011 was 35.1% and 32.6%, respectively. The change in the effective tax rate is primarily due to a reduction in prior year state deferred tax liabilities.

Segment Income.  The increase resulted primarily from higher net retail pricing and rate riders, and a decrease in operating and maintenance expenses. These positive impacts were partially offset by higher income tax expense, less favorable weather, and increased depreciation and amortization.

Six Months Ended June 30, 2012 as Compared to June 30, 2011

Operating Revenues.The increase was driven primarily by:

·A $189 million net increase in retail rates and rate riders primarily due to revised retail rates resulting from the 2011 North Carolina and South Carolina rate cases implemented in the first quarter of 2012, and revenues recognized for the energy efficiency programs; and

·An $60 million increase in fuel revenues (including emission allowances) driven primarily by higher revenues in Ohio for purchases of power as a result of the new Ohio ESP, higher fuel rates for electric retail customers in all jurisdictions, and higher revenues for purchases of power in Indiana and the Carolinas, partially offset by decreased demand from electric retail customers in 2012 compared to the same period in 2011 mainly due to unfavorable weather conditions, and lower demand and fuel rates in Ohio and Kentucky from natural gas retail customers . Fuel revenues represent sales to retail and wholesale customers.

Partially offsetting these increases was:

·A $119 million decrease in electric and gas sales (net of fuel) to retail customers due to unfavorable weather conditions in 2012 compared to the same period in 2011. For the Carolinas, weather statistics for cooling degree days in 2012 were less favorable compared to the same period in 2011, while cooling degree days in the Midwest were favorable in 2012 compared to the same period in 2011. For the Carolinas and Midwest, weather statistics for heating degree days in 2012 were unfavorable compared to the same period in 2011.

Operating Expenses.The increase was driven primarily by:

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·A $420 million increase due to 2012 impairment and other charges related to the Edwardsport integrated gasification combined cycle (IGCC) plant that is currently under construction. See Note 4 to the Unaudited Condensed Consolidated Financial Statements, "Regulatory Matters," for additional information;

·A $50 million increase in depreciation and amortization primarily due to increases in depreciation as a result of additional plant in service and amortization of regulatory assets; and

·An $44 million increase in fuel expense (including purchased power and natural gas purchases for resale) primarily related to higher purchases of power in Ohio (as a result of the new Ohio ESP), higher volumes of natural gas used in electric generation, higher coal prices, higher purchased power costs in Indiana and the Carolinas, partially offset by lower volume of coal used in electric generation resulting from unfavorable weather conditions and lower coal-fired generation due to low natural gas prices, lower prices for natural gas used in electric generation, and lower gas volumes and prices to full-service retail gas customers.

Partially offsetting these increases was:

·A $142 million decrease in operating and maintenance expense primarily due to the establishment of regulatory assets in the first quarter of 2012, pursuant to regulatory orders, for future recovery of certain employee severance costs related to the 2010 voluntary severance plan and other costs, and lower storm costs, partially offset by increased costs associated with the energy efficiency programs.

Interest Expense. The increase was primarily driven by higher debt balances in 2012.

Income tax expense. The decrease is primarily due to the decrease in pretax income. The effective tax rate for the six months ended June 30, 2012 and 2011 was 34.9% and 33.9%, respectively. The change in the effective tax rate is primarily due to a decrease in AFUDC in 2012.

Segment Income.  The decrease resulted primarily from the 2012 impairment and other charges related to the Edwardsport IGCC plant, unfavorable weather, and increased depreciation and amortization. These negative impacts were partially offset by higher net retail pricing and rate riders, a decrease in operating and maintenance expenses, and lower income tax expense.

Matters Impacting Future USFE&G Results

Results of USFE&G are impacted by the completion of its major generation fleet modernization projects. See Note 4 to the Condensed Consolidated Financial Statements, “Regulatory Matters,” for a discussion of the significant increase in the estimated cost of the 618 MW IGCC plant at Duke Energy Indiana’s Edwardsport Generating Station (Edwardsport IGCC). Additional updates to the cost estimate could occur through the completion of the plant in 2013. On April 30, 2012, Duke Energy Indiana entered into a settlement agreement with certain intervenors to cap the construction cost recoverable in retail rates which resulted in the recognition of a $420 million pre-tax charge to earnings in the first quarter of 2012. The agreement is subject to approval by the IURC, a final order is expected by the end of 2012. Duke Energy Indiana is unable to predict the ultimate outcome of these proceedings. In the event the IURC disallows a portion of the remaining plant costs, including financing costs, or if cost estimates for the plant increase, additional charges to expense, which could be material, could occur.

See Item 1A, Risk Factors, for a discussion of significant uncertainties related to Progress Energy Florida’s Crystal River Unit 3. The decision related to repairing or retiring Crystal River Unit 3 is complex and subject to a number of unknown factors, including but not limited to, the cost of repair and the likelihood of obtaining NRC approval to restart the reactor after repair. In addition, the scope and estimated costs of necessary repairs of the delamination of Crystal River Unit 3 could prove more extensive than is currently identified, such repairs could prove not to be feasible resulting in the retirement of the unit, the costs of repair and/or replacement power could exceed estimates and insurance coverage or may not be recoverable through the regulatory process; the occurrence of any of which could adversely affect USFE&G’s financial condition, results of operations and cash flows.

Duke Energy Carolinas plans to file rate cases in North Carolina and South Carolina during 2012. Progress Energy Carolinas plans to file a rate case in North Carolina in 2012. Duke Energy Ohio filed electric and gas distribution rate cases in July 2012. These planned rates cases are needed to recover investments in Duke Energy’s ongoing infrastructure modernization projects and operating costs. USFE&G’s earnings could be adversely impacted if these rate cases are denied or delayed by any of the state regulatory commissions.

Duke Energy anticipates recording charges of approximately $450 million to $550 million in the second half of 2012 associated with the merger with Progress Energy. This estimate includes the costs of the Long-term FERC Mitigation plan, Interim FERC Mitigation, the retail rate reduction associated with Interim FERC Mitigation, employee severance, obligations to provide community support and merger transaction expenses. The majority of these costs will be recorded by USFE&G.

The ability to integrate Progress Energy businesses and realize cost savings and any other synergies expected from the merger with Progress Energy could be different from what USFE&G expects and may have a significant impact on USFE&G’s results of operations.

Commercial Power
	Three Months Ended June 30,						Six Months Ended June 30,
					Increase						Increase
(in millions, except where noted)	2012		2011		(Decrease)		2012		2011		(Decrease)
Operating revenues	$	502	$	595	$	(93)	$	1,082	$	1,239	$	(157)
Operating expenses		460		550		(90)		990		1,114		(124)
Gains on sales of other assets and other, net		1		11		(10)		1		13		(12)
Operating income		43		56		(13)		93		138		(45)
Other income and expenses, net		17		9		8		25		17		8
Interest expense		22		22		―		41		46		(5)
Income before income taxes		38		43		(5)		77		109		(32)
Income tax expense		10		6		4		18		23		(5)
Less: Income attributable to noncontrolling interests		―		7		(7)		―		7		(7)
Segment Income	$	28	$	30	$	(2)	$	59	$	79	$	(20)
Actual coal-fired plant production, GWh		3,299		3,716		(417)		7,367		8,407		(1,040)
Actual gas-fired plant production, GWh		4,513		2,512		2,001		9,096		5,221		3,875
Actual renewable plant production, GWh		786		844		(58)		1,784		1,741		43
Net proportional MW capacity in operation								7,757		8,273		(516)

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PART I

Three Months Ended June 30, 2012 as Compared to June 30, 2011

Operating Revenues.The decrease was driven primarily by:

·A $59 million decrease in electric revenues from the coal-fired generation assets driven primarily by the expiration of the 2009-2011 ESP which dedicated Commercial Power’s coal-fired generation to Duke Energy Ohio’s retail customers, net of stability charge revenues, partially offset by the coal-fired generation assets participating in the PJM Interconnection, LLC (PJM) wholesale energy market in 2012;

·A $35 million decrease in electric revenues from Duke Energy Retail Sales, LLC (Duke Energy Retail) resulting from lower volumes and unfavorable pricing; and

·A $12 million decrease in electric revenues from the gas-fired generation assets driven primarily by lower power prices partially offset by increased volumes.

Partially offsetting these decreases were:

·A $17 million increase from participation in competitive retail load auctions.

Operating Expenses.The decrease was driven primarily by:

·A $31 million decrease in operating expenses resulting primarily from lower 2012 transmission costs, lower expenses at the generating stations, and 2011 regulatory asset amortization expenses;

·A $25 million decrease in fuel expenses from the gas-fired generation assets driven by lower natural gas costs;

·A $15 million decrease due to the receipt of funds in 2012 related to a previously written off receivable associated with the Lehman Brothers bankruptcy;

·A $12 million decrease in fuel expenses from the coal-fired generation assets driven by lower production, partially offset by higher purchased power costs; and

·A $9 million decrease due to the impairment of the Vermillion station in the second quarter of 2011.

Gains on Sales of Other Assets and Other, net.The decrease in 2012 as compared to 2011 is attributable to 2011 gains on sales of certain assets resulting from a contract termination.

Other Income and Expenses, net.The increase in 2012 as compared to 2011 is primarily due to equity earnings on the renewables portfolio.

Net Income Attributable to Noncontrolling interest.  The decrease in 2012 as compared to 2011 is primarily attributable to the prior year recognition of expense for a partner’s interest in the gain on a contract termination.

Segment Income. The decrease is primarily attributable to lower revenues driven by the expiration of the 2009-2011 ESP and the impact of competitive market dispatch for the Duke Energy Ohio coal-fired assets. These negative impacts were partially offset by 2012 PJM capacity revenues, and favorable earnings from the gas-fired generation assets.

Six Months Ended June 30, 2012 as Compared to June 30, 2011

Operating Revenues.The decrease was driven primarily by:

·A $131 million decrease in electric revenues from the coal-fired generation assets driven primarily by the expiration of the 2009-2011 ESP which dedicated Commercial Power’s coal-fired generation to Duke Energy Ohio’s retail customers, net of stability charge revenues, partially offset by the coal-fired generation assets participating in the PJM wholesale energy market in 2012;

·A $76 million decrease in electric revenues from Duke Energy Retail resulting from lower volumes and unfavorable pricing; and

·A $25 million decrease in electric revenues from DEGS, excluding renewables, due primarily to the termination of certain operations at the end of the first quarter of 2011 and a reduction of coal sales volumes as a result of lower natural gas prices.

Partially offsetting these decreases were:

·A $35 million increase from participation in competitive retail load auctions;

·A $28 million increase primarily due to PJM capacity revenues associated with the move of the coal-fired generation assets from MISO to PJM in 2012, net of a decrease related to lower average cleared capacity auction pricing in 2012 compared to 2011 for the gas-fired generation assets; and

·A $10 million increase in electric revenues from the gas-fired generation assets driven primarily by increased volumes partially offset by lower power prices.

Operating Expenses.The decrease was driven primarily by:

·A $46 million decrease in operating and maintenance expenses resulting primarily from higher prior year station outages, transmission costs, and regulatory asset amortization expenses;

·A $31 million decrease in fuel expenses from the gas-fired generation assets driven by lower natural gas costs, partially offset by higher volumes;

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·A $21 million decrease in DEGS, excluding renewables, fuel used due primarily to the termination of certain operations at the end of the first quarter of 2011 and from lower natural gas prices;

·A $15 million decrease due to the receipt of funds in 2012 related to a previously written off receivable associated with the Lehman Brothers bankruptcy; and

·A $12 million decrease in purchased power to serve Duke Energy Retail customers.

Gains on Sales of Other Assets and Other, net.The decrease in 2012 as compared to 2011 is attributable to 2011 gains on sales of certain assets resulting from a contract termination.

Other Income and Expenses, net.The increase in 2012 as compared to 2011 is primarily due to equity earnings on the renewables portfolio.

Income Tax Expense. The decrease is primarily due to lower pretax income. The effective tax rate for the six months ended June 30, 2012 and 2011 was 23.1% and 21.5%, respectively. The change in the effective tax rate is primarily due to the decrease in pretax income.

Segment Income.  The decrease is primarily attributable to lower revenues driven by the expiration of the 2009-2011 ESP and the impact of competitive market dispatch for the Duke Energy Ohio coal-fired assets. These negative impacts were partially offset by higher PJM capacity revenues, and favorable earnings from the gas-fired generation assets.

Matters Impacting Future Commercial Power Results

Commercial Power’s gas-fired non-regulated generation assets earn capacity revenues from PJM. PJM capacity prices are determined through an auction process for planning years from June through May of the following year and are conducted approximately three years in advance of the capacity delivery period. Capacity prices, for periods beginning June 2011 and continuing through May 2014 will be significantly lower than current and historical capacity prices. As a result, Commercial Power’s operating revenues and segment income will be negatively impacted through 2014.

Changes or variability in assumptions used in calculating the fair value of the renewables reporting unit for goodwill testing purposes including but not limited to, legislative actions related to tax credit extensions and long-term growth rates, could significantly impact the estimated fair value of the renewables reporting unit. In the event of a significant decline in the estimated fair value of the renewables reporting unit, goodwill and other asset impairment charges could be recorded. The carrying value of goodwill, and intangible assets associated with proposed renewable projects within Commercial Power’s renewables reporting unit was approximately $130 million at June 30, 2012.

International Energy
	Three Months Ended June 30,						Six Months Ended June 30,
					Increase						Increase
(in millions, except where noted)	2012		2011		(Decrease)		2012		2011		(Decrease)
Operating revenues	$	397	$	406	$	(9)	$	799	$	754	$	45
Operating expenses		257		265		(8)		502		476		26
Operating income		140		141		(1)		297		278		19
Other income and expenses, net		36		55		(19)		90		114		(24)
Interest expense		21		11		10		37		27		10
Income before income taxes		155		185		(30)		350		365		(15)
Income tax expense		46		55		(9)		95		103		(8)
Less: Income attributable to noncontrolling interest		4		3		1		8		7		1
Segment Income	$	105	$	127	$	(22)	$	247	$	255	$	(8)
Sales, GWh		4,882		4,516		366		9,956		9,303		653
Proportional MW capacity in operation								4,225		4,190		35

Three Months Ended June 30, 2012 as Compared to June 30, 2011

Operating Revenues.The decrease was driven primarily by:

·A $26 million decrease in Central America due to lower average prices as a result of a regulatory change in El Salvador and unfavorable hydrology.

Partially offsetting these decreases was:

·A $10 million increase in Peru as a result of higher average energy prices and volumes;

·A $6 million increase in Argentina as a result of higher volumes due to favorable hydrology; and

·A $3 million increase in Brazil due to higher average prices, offset by unfavorable exchange rates.

Operating Expenses.The decrease was driven primarily by:

·A $7 million decrease in Brazil primarily due to favorable exchange rates and reversal of bad debt provision, offset by higher variable costs.

Other Income and Expenses, net.The decrease was primarily driven by a remeasurement loss on dividends in Brazil, and a decrease in equity earnings from National Methanol Company (NMC) due to lower average prices and sales volumes of methyl tertiary butyl ether (MTBE).

Interest Expense.The decrease was primarily due to lower capitalized interest.

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Income Tax Expense. The decrease is primarily due to the decrease in pretax income. The effective tax rate for the three months ended June 30, 2012 and 2011 was 29.5% and 29.4%, respectively.

Segment Income. The decrease was primarily due to lower average prices and volumes in Central America, unfavorable exchange rates in Brazil, and lower equity earnings from NMC. These negative impacts were partially offset by higher average prices and volumes in Peru and Brazil.

Six Months Ended June 30, 2012 as Compared to June 30, 2011

Operating Revenues.The increase was driven primarily by:

·A $24 million increase in Brazil due to higher average prices and volumes, offset by unfavorable exchange rates;

·A $19 million increase in Peru due to higher average energy prices and favorable exchange rates; and

·An $8 million increase in Argentina as a result of higher volumes due to favorable hydrology, offset by unfavorable exchange rates.

Partially offsetting these increases was:

·A $3 million decrease in Ecuador as a result of lower dispatch.

Operating Expenses.The increase was driven primarily by:

·A $29 million increase in Central America primarily due to higher purchased power and operating expenses on a project placed in service after second quarter 2011.

Other Income and Expenses, net.The decrease was primarily driven by the absence of prior year Peru arbitration award, partially offset by higher equity earnings in NMC due to higher average prices and sales volumes of MTBE.

Interest Expense.The decrease was primarily due to lower capitalized interest.

Income Tax Expense. The decrease is primarily due to the decrease in pretax income. The effective tax rate for the six months ended June 30, 2012 and 2011 was 27.1% and 28.1%, respectively.

Segment Income. The decrease was primarily due to the absence of a prior year Peru arbitration award, lower average prices and volumes in Central America, and unfavorable exchange rates in Brazil. These negative impacts were partially offset by higher average prices in Brazil and Peru, and higher equity earnings from NMC.

Other
	Three Months Ended June 30,						Six Months Ended June 30,
					Increase						Increase
(in millions)	2012		2011		(Decrease)		2012		2011		(Decrease)
Operating revenues	$	16	$	9	$	7	$	31	$	20	$	11
Operating expenses		14		27		(13)		30		53		(23)
Losses on sales of other assets and other, net		―		(8)		8		(1)		―		(1)
Operating income (loss)		2		(26)		28		―		(33)		33
Other income and expenses, net		(6)		26		(32)		(1)		48		(49)
Interest expense		46		36		10		89		75		14
(Loss) income before income taxes		(50)		(36)		(14)		(90)		(60)		(30)
Income tax benefit		(25)		(13)		(12)		(49)		(28)		(21)
Less: (Loss) income attributable to noncontrolling interest		―		(4)		4		―		(6)		6
Net Expense	$	(25)	$	(19)	$	(6)	$	(41)	$	(26)	$	(15)

Three Months Ended June 30, 2012 as Compared to June 30, 2011

Operating Revenues.The increase was driven primarily by mark-to-market activity at Duke Energy Trading and Marketing, LLC (DETM).

Operating Expenses.The decrease was driven primarily by favorable loss experience at Bison and higher prior year donations.

Other Income and Expenses, net.  The decrease was driven primarily by lower returns on investments that support benefit obligations in 2012 compared to 2011, a reversal of reserves related to certain guarantees Duke Energy had issued on behalf of Crescent in the prior year, higher interest income recorded in 2011 following the resolution of certain income tax matters related to prior years, and prior year net gains on sales of investments.

Interest Expense. The increase was due primarily to higher debt balances in the current year.

Income Tax Benefit. The increase is primarily due to the decrease in pretax income. The effective tax rate for the three months ended June 30, 2012 and 2011 was 50.0% and 34.8%, respectively.

Net Expense. The increase was due primarily to higher interest expense due to new debt issuances, lower returns on investments that support benefit obligations, a reversal of reserves related to certain guarantees. These negative impacts were partially offset by higher income tax benefit due to increased net expense.

Six Months Ended June 30, 2012 as Compared to June 30, 2011

Operating Revenues.The increase was driven primarily by mark-to-market activity at DETM.

Operating Expenses.The decrease was driven primarily by favorable loss experience at Bison, prior year donations, and lower costs related to the merger with Progress Energy.

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Other Income and Expenses, net.  The decrease was driven primarily by lower returns on investments that support benefit obligations in 2012 compared to 2011, higher interest income recorded in 2011 following the resolution of certain income tax matters related to prior years, a reversal of reserves related to certain guarantees Duke Energy had issued on behalf of Crescent in the prior year, and current year impairments and prior year net gains on sales of investments.

Interest Expense. The increase was due primarily to higher debt balances in the current year.

Income Tax Benefit. The increase is primarily due to the decrease in pretax income. The effective tax rate for the six months ended June 30, 2012 and 2011 was 54.4% and 46.5%, respectively.

Net Expense. The increase was due primarily to higher interest expense due to new debt issuances, favorable tax resolutions in the prior year, unfavorable returns on investments that support benefit obligations, a reversal of reserves related to certain guarantees and current year impairments. These negative impacts were partially offset by higher income tax benefit due to increased net expense, mark-to-market activity at DETM and favorable loss experience at Bison.

Matters Impacting Future Other Results

Duke Energy previously held an effective 50% interest in Crescent, which was a real estate joint venture formed by Duke Energy in 2006 that filed for Chapter 11 bankruptcy protection in June 2009. On June 9, 2010, Crescent restructured and emerged from bankruptcy and Duke Energy forfeited its entire 50% ownership interest to Crescent debt holders. This forfeiture caused Duke Energy to recognize a loss, for tax purposes, on its interest in the second quarter of 2010. Although Crescent has reorganized and emerged from bankruptcy with creditors owning all Crescent interest, there remains uncertainty as to the tax treatment associated with the restructuring. Based on this uncertainty, it is possible that Duke Energy could incur a future tax liability related to the tax losses associated with its partnership interest in Crescent and the resolution of issues associated with Crescent’s emergence from bankruptcy.

DUKE ENERGY CAROLINAS

INTRODUCTION

Management’s Discussion and Analysis should be read in conjunction with Duke Energy Carolinas’s Unaudited Condensed Consolidated Financial Statements.

Duke Energy Carolinas is an indirect wholly owned subsidiary of Duke Energy. Duke Energy Carolinas is an electric utility company that generates, transmits, distributes and sells electricity in North Carolina and South Carolina.

BASIS OF PRESENTATION

The results of operations and variance discussion for Duke Energy Carolinas is presented in a reduced disclosure format in accordance with General Instruction H(2) of Form 10-Q.

	Six Months Ended June 30,
					Increase
(in millions)	2012		2011		(Decrease)
Operating revenues	$	3,117	$	3,159	$	(42)
Operating expenses		2,262		2,466		(204)
Gains on sales of other assets and other, net		6		1		5
Operating income		861		694		167
Other income and expenses, net		82		92		(10)
Interest expense		190		171		19
Income before income taxes		753		615		138
Income tax expense		276		217		59
Net Income	$	477	$	398	$	79

The increase in Duke Energy Carolinas’ net income for the six months ended June 30, 2012 compared to June 30, 2011 was primarily due to the following factors:

Operating Revenues. The decrease was primarily due to:

·A $156 million decrease in fuel revenues driven primarily by decreased demand from retail customers mainly due to unfavorable weather conditions, partially offset by higher fuel rates in both North Carolina and South Carolina.  Fuel revenues represent sales to retail and wholesale customers; and

·A $99 million (net of fuel) decrease in sales to retail customers due to unfavorable weather conditions. The number of heating degree days for the first half of 2012 was 25% below normal as compared to essentially flat to normal in 2011. In addition, cooling degree days for 2012 were 11% above normal compared to 32% above normal in 2011.

Partially offsetting these decreases were:

·A $193 million increase in net retail pricing and rate riders primarily due to revised retail base rates implemented in North Carolina and South Carolina in the first quarter of 2012, and revenues recognized for the energy efficiency programs; and

·A $14 million increase in weather adjusted sales volumes to customers primarily due to an extra day of revenues for leap year 2012.

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Operating Expenses. The decrease was primarily due to:  

·A $158 million decrease in fuel expense (including purchased power) primarily related to lower volume of coal used in electric generation due to lower demand based on unfavorable weather conditions and lower coal-fired generation due to low natural gas prices; and

·A $122 million decrease in operating and maintenance expenses primarily due to the establishment of regulatory assets in the first quarter of 2012, pursuant to regulatory orders for future recovery of certain employee severance costs related to the 2010 voluntary severance plan and other costs coupled with decreased storm costs, partially offset by required donations resulting from the most recent North Carolina and South Carolina rate cases.

Partially offsetting these decreases were:

·A $63 million increase in depreciation and amortization primarily due to increases in depreciation as a result of additional plant in service and amortization of certain regulatory assets; and

·A $13 million increase in general taxes primarily due to a favorable prior year resolution of a property tax issue related to pollution control equipment exemptions, higher revenue related taxes in 2012 and a sales and use tax refund in 2011.

Other Income and Expenses, net. The decrease is primarily due to lower equity component of AFUDC.

Interest Expense. The increase is primarily due to lower debt return on deferred projects, lower debt component of AFUDC, and higher interest expense on long-term debt and certain income tax matters.

Income Tax Expense. The increase in income tax expense is primarily due to an increase in pretax income. The effective tax rate for the six months ended June 30, 2012 and 2011, was 36.7% and 35.3%, respectively. The increase in the effective tax rate is primarily due to the increase in pretax income and a decrease in AFUDC in 2012.

Matters Impacting Future Duke Energy Carolinas Results

Duke Energy Carolinas plans to file rate cases in North Carolina and South Carolina during 2012. These planned rates cases are needed to recover investments in Duke Energy Carolinas’ ongoing infrastructure modernization projects and operating costs. Duke Energy Carolinas’ earnings could be adversely impacted if these rate cases are denied or delayed by either of the state regulatory commissions.

Duke Energy anticipates recording charges of approximately $450 million to $550 million in the second half of 2012 associated with the merger with Progress Energy. This estimate includes the costs of the Long-term FERC Mitigation plan, Interim FERC Mitigation, the retail rate reduction associated with Interim FERC Mitigation, employee severance, obligations to provide community support and merger transaction expenses. A significant portion of these costs will be recorded by Duke Energy Carolinas.

The ability to integrate Progress Energy businesses and realize cost savings and any other synergies expected from the merger with Progress Energy could be different from what Duke Energy Carolinas expects and may have a significant impact on Duke Energy Carolinas’ results of operations.

DUKE ENERGY OHIO

INTRODUCTION

Management’s Discussion and Analysis should be read in conjunction with Duke Energy Ohio’s Unaudited Condensed Consolidated Financial Statements.

Duke Energy Ohio is an indirect wholly owned subsidiary of Duke Energy. Duke Energy Ohio’s principal lines of business include generation, transmission and distribution of electricity, the sale of and/or transportation of natural gas, and energy marketing in parts of Ohio, Illinois and Pennsylvania.

BASIS OF PRESENTATION

The results of operations and variance discussion for Duke Energy Ohio is presented in a reduced disclosure format in accordance with General Instruction H(2) of Form 10-Q.

	Six Months Ended June 30,
					Increase
(in millions)	2012		2011		(Decrease)
Operating revenues	$	1,629	$	1,573	$	56
Operating expenses		1,398		1,381		17
Gains on sales of other assets and other, net		2		2		―
Operating income		233		194		39
Other income and expenses, net		8		9		(1)
Interest expense		49		51		(2)
Income before income taxes		192		152		40
Income tax expense		73		46		27
Net Income	$	119	$	106	$	13

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The increase in Duke Energy Ohio’s net income for the six months ended June 30, 2012 compared to June 30, 2011 was primarily due to the following factors:

Operating Revenues. The increase was primarily driven by:

·A $116 million increase in regulated fuel revenues driven primarily by higher purchased power revenues collected under the new Ohio ESP which became effective January 1, 2012, partially offset by reduced gas sales volumes and lower natural gas costs;

·A $33 million increase in net mark-to-market revenues on non-qualifying power and capacity hedge contracts, consisting of mark-to-market gains of $22 million in 2012 compared to losses of $11 million in 2011;

·A $28 million increase primarily due to PJM capacity revenues associated with the move of the coal-fired generation assets from MISO to PJM in 2012, net of a decrease related to lower average cleared auction pricing in 2012 compared to 2011 for the gas-fired generation assets; and

·A $10 million increase in electric revenues from the gas-fired generation assets driven primarily by increased volumes, partially offset by lower power prices.

Partially offsetting these increases were:

·A $131 million decrease in electric revenues from the coal-fired generation assets driven primarily by the expiration of the 2009-2011 ESP, partially offset by the coal-fired generation assets participating in the PJM wholesale energy market.

Operating Expenses. The increase was primarily driven by:

·A $107 million increase in regulated fuel expense driven primarily by higher purchased power expense as a result of the new Ohio ESP, net of stability charge revenues, partially offset by reduced gas sales volumes and lower natural gas costs.

Partially offsetting these increases were:

·A $31 million decrease in fuel expense for the gas-fired generation assets driven by lower natural gas costs, partially offset by higher volumes;

·A $31 million decrease in operating and maintenance expenses resulting primarily from higher prior year station outages and regulatory asset amortization expense;

·A $15 million decrease due to the receipt of funds in 2012 related to a previously written off receivable associated with the Lehman Brothers bankruptcy; and

·A $13 million decrease in depreciation and amortization costs related to lower regulatory and software amortization.

Income Tax Expense. The increase in income tax expense is primarily due to an increase in pretax income. The effective tax rate for the six months ended June 30, 2012 and 2011, was 38.1% and 30.4%, respectively. The increase in the effective tax rate is primarily due a reduction in prior year state deferred tax liabilities.

Matters Impacting Future Duke Energy Ohio Results

Duke Energy Ohio’s gas-fired non-regulated generation assets earn capacity revenues from PJM. PJM capacity prices are determined through an auction process for planning years from June through May of the following year and are conducted approximately three years in advance of the capacity delivery period. Capacity prices, for periods beginning June 2011 and continuing through May 2014 will be significantly lower than current and historical capacity prices. As a result, Duke Energy Ohio’s operating revenues and net income will be negatively impacted through 2014.

Duke Energy Ohio filed electric and gas distribution rate cases in July 2012. These planned rate cases are needed to recover capital investments and operating costs. Duke Energy Ohio’s earnings could be adversely impacted if these rate cases are denied or delayed by the state regulatory commission.

DUKE ENERGY INDIANA

INTRODUCTION

Management’s Discussion and Analysis should be read in conjunction with Duke Energy Indiana’s Unaudited Condensed Consolidated Financial Statements.

Duke Energy Indiana is an indirect wholly owned subsidiary of Duke Energy. Duke Energy Indiana is an electric utility company that generates, transmits, distributes and sells electricity in north central, central and southern Indiana.

BASIS OF PRESENTATION

The results of operations and variance discussion for Duke Energy Indiana is presented in a reduced disclosure format in accordance with General Instruction H(2) of Form 10-Q.

	Six Months Ended June 30,
					Increase
(in millions)	2012		2011		(Decrease)
Operating revenues	$	1,373	$	1,279	$	94
Operating expenses		1,511		1,040		471
Operating (loss) income		(138)		239		(377)
Other income and expenses, net		42		44		(2)
Interest expense		70		70		―
(Loss) income before income taxes		(166)		213		(379)
Income tax (benefit) expense		(76)		69		(145)
Net (loss) income	$	(90)	$	144	$	(234)

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Duke Energy Indiana’s net loss for the six months ended June 30, 2012 compared to net income for the six months ended June 30, 2011 was primarily due to the following factors:

Operating Revenues. The increase was primarily due to:

·A $100 million increase in fuel revenues (including emissions allowances) primarily due to increase in fuel rates as a result of higher fuel and purchased power costs; and

·A $10 million increase in rate pricing due to the positive impact on overall average prices of lower sales volumes.

Partially offsetting these increases were:

·An $8 million decrease in retail revenues related to unfavorable weather conditions in 2012 compared to 2011.

Operating Expenses. The increase was primarily due to:

·A $420 million increase due to 2012 impairment and other charges related to the Edwardsport IGCC plant that is currently under construction.  See Note 4 to the Unaudited Condensed Consolidated Financial Statements, “Regulatory Matters,” for additional information; and

·A $92 million increase in fuel costs primarily due to higher purchases of power (reflective of favorable market prices); and increased generation cost at coal plants due to higher generation levels.

Partially offsetting these increases were:

·A $32 million decrease in operation and maintenance primarily due to higher storm costs in the prior year, and lower generation and outage maintenance costs.

Income Tax (Benefit) Expense. The decrease in income tax (benefit) expense is primarily due to a decrease in pretax income. The effective tax rate for the six months ended June 30, 2012 and 2011, was 45.7% and 32.3%, respectively. The increase in the effective tax rate is primarily due to the decrease in pretax income resulting from the 2012 impairment and other charges related to the Edwardsport IGCC project.

Matters Impacting Future Duke Energy Indiana Results

Duke Energy Indiana results are impacted by the completion of its major generation fleet modernization project. See Note 4 to the Condensed Consolidated Financial Statements, “Regulatory Matters,” for a discussion of the significant increase in the estimated cost of the 618 MW Edwardsport IGCC plant. Additional updates to the cost estimate could occur through the completion of the plant in 2013. On April 30, 2012, Duke Energy Indiana entered into a settlement agreement with certain intervenors to cap the construction cost recoverable in retail rates which resulted in the recognition of a $420 million pre-tax charge to earnings in the first quarter of 2012. The agreement is subject to approval by the IURC, a final order is expected by the end of 2012. Duke Energy Indiana is unable to predict the ultimate outcome of these proceedings. In the event the IURC disallows a portion of the remaining plant costs, including financing costs, or if the cost estimates for the plant increase, additional charges to expense, which could be material, could occur.

LIQUIDITY AND CAPITAL RESOURCES

The following discussion of liquidity and capital resources is on a consolidated Duke Energy basis. Duke Energy’s significant cash requirements are largely due to the capital intensive nature of its operations, including capital expansion projects, fleet modernization and other expenditures for environmental compliance. Duke Energy relies upon its cash flows from operations, as well as its ability to access the long-term debt and equity capital markets for sources of domestic liquidity. Additionally, Duke Energy has access to unsecured revolving credit facilities, which are not restricted upon general market conditions, as discussed further below.

Cash Flow Information

	The following table summarizes Duke Energy’s cash flows:
		Six Months Ended June 30,
(in millions)			2012		2011
Cash flows provided by (used in):
	Operating activities	$	2,002	$	1,717
	Investing activities		(2,391)		(1,838)
	Financing activities		(195)		(187)
Net decrease in cash and cash equivalents			(584)		(308)
Cash and cash equivalents at beginning of period			2,110		1,670
Cash and cash equivalents at end of period		$	1,526	$	1,362

	Operating Cash Flows. The following table summarizes key components of Duke Energy’s operating cash flows.
		Six Months Ended June 30,
(in millions)			2012		2011
Net income		$	747	$	954
Non-cash adjustments to net income			1,463		1,283
Working capital			(208)		(520)
Net cash provided by operating activities		$	2,002	$	1,717
The increase in cash provided by operating activities in 2012 as compared to 2011 was driven primarily by:
•	A $250 million increase in traditional working capital, mainly due to prior year refund of North Carolina overcollected fuel costs and current year overcollection of North Carolina and South Carolina fuel costs.

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	Investing Cash Flows. The following table summarizes key components of Duke Energy’s investing cash flows.
		Six Months Ended June 30,
(in millions)			2012		2011
Capital, investment and acquisition expenditures		$	(2,297)	$	(1,991)
Available for sale securities, net			(85)		15
Proceeds from sales of equity investments and other assets, and sales of and collections on notes receivable			23		109
Other investing items			(32)		29
Net cash used in investing activities		$	(2,391)	$	(1,838)
The increase in cash used in investing activities in 2012 as compared to 2011 was driven primarily by:
•	A $310 million increase in capital, investment and acquisition expenditures due to the timing of payments related to Duke Energy's ongoing infrastructure modernization program,
•	A $100 million decrease in proceeds of available for sale securities, net of purchases, and
•	A $90 million decrease primarily as a result of the prior year sale of Windstream Corp. stock received in conjunction with the sale of Q-Comm Corporation in December 2010.

	Financing Cash Flows. The following table summarizes key components of Duke Energy’s financing cash flows.
		Six Months Ended June 30,
(in millions)			2012		2011
Issuance of common stock related to employee benefit plans		$	14	$	10
(Payments) Issuances of long-term debt, net			(157)		417
Notes payable and commercial paper			631		63
Dividends paid			(670)		(657)
Other financing items			(13)		(20)
Net cash used in financing activities		$	(195)	$	(187)
The increase in cash used in financing activities in 2012 as compared to 2011 was driven primarily by:
•	A $570 million increase in payments for the redemption of long-term debt net of issuances, primarily due to the timing of redemptions and issuances between years and
•	A $10 million increase in dividends paid in 2012 due to an increase in dividends per share from $0.735 to $0.75 in the third quarter of 2011.
These increases were offset by:
•	A $570 million increase in net proceeds from the issuance of Commercial Paper and increased outstanding PremierNotes.

Significant Notes Payable and Long-Term Debt Activities - 2012. 

DS Cornerstone, LLC, a 50/50 joint venture entity with a third-party joint venture partner, owns two wind generation projects and has executed a third party financing against the two against the two wind generation projects. In April 2012, Duke Energy and SCOA negotiated a $330 million, Construction and 12-year amortizing Term Loan Facility, on behalf of the borrower, a wholly owned subsidiary of the joint venture. The loan agreement is non-recourse to Duke Energy. Duke Energy received proceeds of $319 million upon execution of the loan agreement. This amount represents reimbursement of a significant portion of Duke Energy’s construction costs incurred as of the date of the agreement.

In March 2012, Duke Energy Indiana issued $250 million principal amount of first mortgage bonds, which carry a fixed interest rate of 4.20% and mature March 15, 2042. Proceeds from the issuance were used to repay a portion of Duke Energy Indiana’s outstanding short-term debt.

In January 2012, Duke Energy Carolinas used proceeds from its December 2011 $1 billion issuance of principal amount of first mortgage bonds to repay $750 million 6.25% senior unsecured notes that matured January 15, 2012.

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On April 4, 2011, Duke Energy filed a registration statement (Form S-3) with the Securities and Exchange Commission (SEC) to sell up to $1 billion (maximum of $500 million of notes outstanding at any particular time) of variable denomination floating rate demand notes, called PremierNotes. The notes are offered on a continuous basis and bear interest at a floating rate per annum determined by the Duke Energy PremierNotes Committee, or its designee, on a weekly basis. The interest rate payable on notes held by an investor may vary based on the principal amount of the investment. The notes have no stated maturity date, but may be redeemed in whole or in part by Duke Energy at any time. The notes are non-transferable and may be redeemed in whole or in part at the investor’s option. Proceeds from the sale of the notes will be used for general corporate purposes. The balance as of June 30, 2012 and December 31, 2011, is $209 million and $79 million, respectively. The notes reflect a short-term debt obligation of Duke Energy and will be reflected as Notes Payable and Commercial Paper on Duke Energy’s Condensed Consolidated Balance Sheets.

Available Credit Facilities and Restrictive Debt Covenants.In November 2011, Duke Energy entered into a new $6 billion, five-year master credit facility, with $4 billion available at closing and the remaining $2 billion available following successful completion of the merger with Progress Energy. The Duke Energy Registrants each have borrowing capacity under the master credit facility up to specified sublimits for each borrower. However, Duke Energy has the unilateral ability at any time to increase or decrease the borrowing sublimits of each borrower, subject to a maximum sublimit for each borrower. See the table below for the borrowing sublimits for each of the borrowers, including Progress Energy Carolinas and Progress Energy Florida as of July 2, 2012. The amount available under the master credit facility is reduced by the use of the master credit facility to backstop the issuances of commercial paper, letters of credit and certain tax-exempt bonds. Borrowing sub limits for the Subsidiary Registrants are also reduced for amounts outstanding under the money pool arrangement.

	July 2, 2012
(in millions)	Duke Energy (Parent)		Duke Energy Carolinas		Progress Energy Carolinas		Progress Energy Florida		Duke Energy Ohio		Duke Energy Indiana		Total Duke Energy
Facility Size	$	1,750	$	1,250	$	750	$	750	$	750	$	750	$	6,000

First Mortgage Bond Restrictions. The Subsidiary Registrants’ first mortgage bonds, including those of Progress Energy Carolinas’ and Progress Energy Florida’s, are secured under their respective mortgage indentures. Each mortgage constitutes a first lien on substantially all of the fixed properties of the respective company, subject to certain permitted encumbrances and exceptions. The lien of each mortgage also covers subsequently acquired property. Each mortgage allows the issuance of additional first mortgage bonds based on property additions, retirements of first mortgage bonds and the deposit of cash if certain conditions are satisfied. In order to issue new first mortgage bonds other than on the basis of retired bonds, the mortgage bond indentures require that the issuer’s adjusted net earnings, which is calculated based on results for 12 consecutive months within the prior 15 months, be at least twice the annual interest requirement for bonds currently outstanding and to be outstanding. Progress Energy Florida’s and Duke Energy Indiana’s ratio of net earnings to the annual interest requirement for bonds outstanding was below 2.0 times at June 30, 2012. Progress Energy Florida’s net earnings were impacted by a $288 million pre-tax charge recorded in December 2011 for amounts to be refunded to customers under the terms of a February 2012 settlement agreement approved by the Florida Public Service Commission. Duke Energy Indiana’s net earnings were impacted by a $420 million pre-tax charge recorded in the first quarter of 2012 related to the Edwardsport IGCC project. Until this ratio is above 2.0 times, Progress Energy Florida’s and Duke Energy Indiana’s capacity to issue first mortgage bonds is limited to a portion of retired first mortgage bonds. In the event Progress Energy Florida’s or Duke Energy Indiana’s long-term debt requirements exceed their first mortgage bond capacity, Progress Energy Florida or Duke Energy Indiana can access alternative sources of capital, including, but not limited, to issuing unsecured public debt or through private placement, borrowing under the money pool, entering into bilateral direct loan arrangements, and, if necessary, utilizing the available capacity under the master credit facility.

Restrictive Debt Covenants.The Duke Energy Registrants’ debt and credit agreements contain various financial and other covenants. The master credit facility contains a covenant requiring the debt-to-total capitalization ratio to not exceed 65% for each borrower. Failure to meet those covenants beyond applicable grace periods could result in accelerated due dates and/or termination of the agreements. As of June 30, 2012, each of the Duke Energy Registrants was in compliance with all covenants related to its significant debt agreements. In addition, some credit agreements may allow for acceleration of payments or termination of the agreements due to nonpayment, or the acceleration of other significant indebtedness of the borrower or some of its subsidiaries. None of the significant debt or credit agreements contain material adverse change clauses.

Credit Ratings.On July 25, 2012, Standard and Poor’s affirmed Duke Energy and Progress Energy's short-term credit ratings of A-2. Standard and Poor’s also affirmed its ratings on Duke Energy Carolinas, Progress Energy Carolinas, Progress Energy Florida, Duke Energy Ohio and Duke Energy Indiana’s first-mortgage bonds at A. However, Standard and Poor’s lowered its corporate credit rating for Duke Energy, Duke Energy Carolinas, Duke Energy Indiana, Duke Energy Ohio and Duke Energy Kentucky to BBB+ from A- with a negative outlook, citing lack of transparency and heightened regulatory risk around the CEO transition. Standard and Poor’s affirmed Progress Energy’s corporate credit rating and its subsidiaries ratings at BBB+ as well as its A-2 short-term rating. Standard and Poor’s negative outlook for Duke Energy and all of its subsidiaries’ is based on increased regulatory risk in North Carolina and Florida and concerns over Duke Energy’s ability to successfully integrate Progress Energy.

On July 3, 2012, Moody’s affirmed their ratings for the new merged Duke Energy and its subsidiaries with a stable outlook. On July 6, 2012, Fitch Ratings initiated coverage on Duke Energy and its subsidiaries.  These ratings are investment grade and are on stable outlook.  On June 22, Fitch Ratings affirmed their ratings for Progress Energy and its subsidiaries prior to the merger consummation.

A further downgrade below the Duke Energy Registrants’, including Progress Energy and its subsidiaries, current investment grade ratings would likely result in an increase in the entities’ borrowing costs, perhaps significantly. In addition, the Duke Energy Registrants’, including Progress Energy and its subsidiaries, potential pool of investors and funding sources would likely decrease. A downgrade below investment grade could also require the Duke Energy Registrants, including Progress Energy and its subsidiaries, to post additional collateral in the form of letters of credit or cash under various commodity contracts and credit agreements and trigger termination clauses in some interest rate derivative agreements, which would require cash payments. All of these events would likely reduce the Duke Energy Registrants’, including Progress Energy and its subsidiaries, liquidity and profitability and could have a material adverse effect on the Duke Energy Registrants’, including Progress Energy and its subsidiaries, financial position, results of operations or cash flows.

Undistributed Foreign Earnings. Undistributed earnings associated with Duke Energy’s foreign operations are considered indefinitely reinvested, thus no U.S. tax is recorded on such earnings. This assertion is based on management’s determination that the cash held in Duke Energy’s foreign jurisdictions is not needed to fund its U.S. operations and that Duke Energy either has invested or has intentions to reinvest such earnings. Duke Energy periodically evaluates the impact of repatriation of cash generated and held in foreign countries. While Duke Energy’s current intent is to indefinitely reinvest foreign earnings, circumstances could arise that may alter that view, including a future change in tax law governing U.S. taxation of foreign earnings or changes in Duke Energy’s U.S. cash flow requirements. If Duke Energy were to decide to repatriate foreign generated and held cash

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previously designated as undistributed earnings, recognition of material U.S. federal income tax liabilities would be required to be recognized in the period such determination is made. The cumulative undistributed earnings as of June 30, 2012, on which Duke Energy has not provided deferred U.S. income taxes and foreign withholding taxes is $1.7 billion. The amount of unrecognized deferred tax liability related to these undistributed earnings is estimated to be between $175 million and $225 million.

OTHER ISSUES

Global Climate Change. For information on global climate change and the potential impacts on Duke Energy, see “Other Issues” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Duke Energy’s Annual Report on Form 10-K for the year ended December 31, 2011.

Merger with Progress Energy Inc. See Note 2 to the Unaudited Condensed Consolidated Financial Statements, “Acquisitions” for information related to Duke Energy’s pending merger with Progress Energy, Inc.

Nuclear Matters.Following the events at the Fukushima Daiichi nuclear power station in Japan, Duke Energy conducted thorough inspections at each of our four nuclear sites during 2011. The initial inspections have not identified any significant vulnerabilities, however, Duke Energy is reviewing designs to increase safety margins to external events. Emergency-response capabilities, written procedures and engineering specifications were reviewed to verify each site’s ability to respond in the unlikely event of station blackout or record flood. In 2012, Duke Energy is working to establish industry best practices and improve the safety standards and margin using the three layers of safety approach used in the U.S.: protection, mitigation and emergency response. Emergency equipment is currently being added at each station to perform key safety functions in the event that backup power sources are lost permanently. These improvements are in addition to the numerous layers of safety measures and systems previously in place.

In March 2011, the NRC formed a task force to conduct a comprehensive review of processes and regulations to determine whether the agency should make additional improvements to the nuclear regulatory system. On July 13, 2011, the task force proposed a set of improvements designed to ensure protection, enhance accident mitigation, strengthen emergency preparedness and improve efficiency of NRC programs. The recommendations were further prioritized into three tiers based on the safety enhancement level. On March 12, 2012, the NRC issued three regulatory orders requiring safety enhancements related to mitigation strategies to respond to extreme natural events resulting in the loss of power at a plant, ensuring reliable hardened containment vents and enhancing spent fuel pool instrumentation. The NRC held public meetings with stakeholders to develop implementation guidance that is expected to be issued by the NRC in August 2012. Plants are then required to submit implementation plans to the NRC by February 28, 2013, and complete implementation of the safety enhancements within two refueling outages or by December 31, 2016, whichever comes first. Each plant is also required to reassess their seismic and flooding hazards using present-day methods and information, conduct inspections to ensure protection against hazards in the current design basis, and re-evaluate emergency communications systems and staffing levels. In May 2012, the NRC issued guidance on re-evaluating emergency communications systems and staffing levels and performing seismic and flooding walkdowns. The NRC is expected to issue guidance on performing seismic and flooding re-evaluations in November 2012. Notices for Tier 2 and 3 recommendations are expected to be issued later this year.

Duke Energy is committed to compliance with all safety enhancements ordered by the NRC, the cost of which could be material. With the NRC’s continuing review of the remaining recommendations, Duke Energy cannot predict to what extent the NRC will impose additional licensing and safety-related requirements, or the costs of complying with such requirements. The tight timeframe required to complete the necessary safety enhancements by no later than 2016 could lead to even higher costs. Upon receipt of additional guidance from the NRC and a collaborative industry review, Duke Energy will be able to determine an implementation plan and associated costs. See Item 1A, “Risk Factors”, in the 2011 Form 10-K for further discussion of applicable risk factors.

OFF-BALANCE SHEET ARRANGEMENTS

The following discussion of off balance sheet arrangements and contractual obligations is on a consolidated Duke Energy basis. During the six months ended June 30, 2012, there were no material changes to Duke Energy’s off-balance sheet arrangements. For information on Duke Energy’s off-balance sheet arrangements, see “Off-Balance Sheet Arrangements” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Duke Energy’s Annual Report on Form 10-K for the year ended December 31, 2011.

CONTRACTUAL OBLIGATIONS

Duke Energy enters into contracts that require cash payment at specified periods, based on specified minimum quantities and prices. During the three months ended June 30, 2012, there were no material changes in Duke Energy’s contractual obligations. For an in-depth discussion of Duke Energy’s contractual obligations, see “Contractual Obligations” and “Quantitative and Qualitative Disclosures about Market Risk” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Duke Energy’s Annual Report on Form 10-K for the year ended December 31, 2011.

NEW ACCOUNTING STANDARDS

The following new Accounting Standards Updates (ASU) have been issued, but have not yet been adopted by Duke Energy, as of June 30, 2012.

ASC 210—Balance Sheet. In December 2011, the FASB issued revised accounting guidance to amend the existing disclosure requirements for offsetting financial assets and liabilities to enhance current disclosures, as well as to improve comparability of balance sheets prepared under U.S. GAAP and IFRS. The revised disclosure guidance affects all companies that have financial instruments and derivative instruments that are either offset in the balance sheet (i.e., presented on a net basis) or subject to an enforceable master netting arrangement and/or similar agreement. The revised guidance requires that certain enhanced quantitative and qualitative disclosures be made with respect to a company’s netting arrangements and/or rights of setoff associated with its financial instruments and/or derivative instruments including associated collateral. For the Duke Energy Registrants, the revised disclosure guidance is effective on a retrospective basis for interim and annual periods beginning January 1, 2013. Other than additional disclosures, this revised guidance does not impact the consolidated results of operations, cash flows or financial position of Duke Energy.  

SUBSEQUENT EVENTS

For information on subsequent events related to acquisitions and sales of other assets, regulatory matters, commitments and contingencies, and earnings per share see Notes 2, 4, 5 and 12, respectively, to the Unaudited Condensed Consolidated Financial Statements.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no significant changes from the disclosures presented in Duke Energy’s Annual Report on Form 10-K for the year ended December 31, 2011. For an in-depth discussion of Duke Energy’s market risks, see “Management’s Discussion and Analysis of Quantitative and Qualitative Disclosures about Market Risk” in Duke Energy’s Annual Report on Form 10-K for the year ended December 31, 2011.  

ITEM 4. CONTROLS AND PROCEDURES. – DUKE ENERGY, DUKE ENERGY CAROLINAS, DUKE ENERGY OHIO, DUKE ENERGY INDIANA

DISCLOSURE CONTROLS AND PROCEDURES

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed by the Duke Energy Registrants in the reports they file or submit under the Securities Exchange Act of 1934 (Exchange Act) is recorded, processed, summarized, and reported, within the time periods specified by the Securities and Exchange Commission’s (SEC) rules and forms.

Disclosure controls and procedures include, without limitation, controls and procedures designed to provide reasonable assurance that information required to be disclosed by the Duke Energy Registrants in the reports they file or submit under the Exchange Act is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, the Duke Energy Registrants have evaluated their effectiveness of their disclosure controls and procedures (as such term is defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of June 30, 2012, and, based upon this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that these controls and procedures are effective in providing reasonable assurance of compliance.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, the Duke Energy Registrants have evaluated changes in internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the fiscal quarter ended June 30, 2012 and have concluded no change has materially affected, or is reasonably likely to materially affect, internal control over financial reporting.

On July 2, 2012, the previously announced merger between Duke Energy and Progress Energy closed. Duke Energy is currently in the process of integrating Progress’s operations and will be conducting control reviews pursuant to Section 404 of the Sarbanes-Oxley Act of 2002. See Note 2 of the “Notes to the Condensed Consolidated Financial Statements” in “Item 1 Financial Statements” for additional information relating to the merger.

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ITEM 1. LEGAL PROCEEDINGS.

For information regarding legal proceedings that became reportable events or in which there were material developments in the second quarter of 2012, see Note 4 to the Unaudited Condensed Consolidated Financial Statements, “Regulatory Matters” and Note 5 to the Unaudited Condensed Consolidated Financial Statements, “Commitments and Contingencies” under the heading “Litigation.”

ITEM 1A. RISK FACTORS.

Please see below an update to risk factors affecting Duke Energy’s business in addition to those presented in our Annual Report on Form 10-K, Part I, Item 1A, for the year ended December 31, 2011. Except for the update below, there have been no material changes in our assessment of our risk factors from those set forth in our Annual Report on Form 10-K for the year ended December 31, 2011. For further detailed information regarding the risk factor below, refer to the Progress Energy Second Quarter 2012 Form 10-Q.

The scope of necessary repairs of the delamination of Progress Energy Florida’s Crystal River Unit 3 could prove more extensive than is currently identified, such repairs could prove not to be feasible resulting in early retirement of the unit, the costs of repair and/or replacement power could exceed estimates and insurance coverage or may not be recoverable through the regulatory process; the occurrence of any of which could adversely affect Duke Energy’s and Progress Energy Florida’s financial condition, results of operations and cash flows.

In September 2009, Crystal River Unit 3 began an outage for normal refueling and maintenance as well as an uprate project to increase its generating capability and to replace two steam generators. During preparations to replace the steam generators, workers discovered a delamination (or separation) within the concrete at the periphery of the containment building, which resulted in an extension of the outage. After analysis, Progress Energy Florida determined that the concrete delamination was caused by redistribution of stresses in the containment wall that occurred when Progress Energy Florida engineers created an opening to accommodate the replacement of the unit’s steam generators.

In March 2011, the work to return the plant to service was suspended after monitoring equipment at the repair site identified a new delamination that occurred in a different section of the outer wall after the repair work was completed and during the late stages of retensioning the containment building. Subsequent to March 2011, monitoring equipment has detected additional changes and further damage in the partially tensioned containment building and additional cracking or delaminations could occur during the repair process. Crystal River Unit 3 has remained out of service while Progress Energy Florida conducted an engineering analysis and review of the new delamination and evaluated repair options.

In June 2011, Progress Energy Florida notified the NRC and the FPSC that it plans to repair the Crystal River Unit 3 containment structure and estimates the unit will return to service in 2014. The repair option selected entails systematically removing and replacing concrete in substantial portions of the containment structure walls. The preliminary estimate of $900 million to $1.3 billion, as filed with the FPSC on June 27, 2011, is currently under review and could change following completion of further detailed engineering studies, vendor negotiations and final risk assessments. These engineering studies and risk assessments include analyses by independent entities currently in progress. The risk assessment process includes analysis of events that, although currently deemed unlikely, could have a significant impact on the cost estimate or feasibility of repair. The cost range of the repair option, based on preliminary analysis, appears to be trending upward. Progress Energy Florida believes the actions taken and costs incurred in response to the Crystal River Unit 3 delamination have been prudent and, accordingly, believe that replacement power and repair costs not recoverable through insurance to be recoverable through Progress Energy Florida’s fuel cost-recovery clause or base rates.

Additionally, as of result of the potential repair challenges, the unit could be forced to be retired early. Early retirement could result in continued purchases of replacement power, additional capital and operating costs associated with construction of replacement capacity resources, and impairments of unrecoverable portions of the retired plant.

While the foregoing reflects Progress Energy Florida’s current intentions and estimates with respect to Crystal River Unit 3, the costs, timing and feasibility of additional repairs to Crystal River Unit 3, the cost of replacement power, and the degree of recoverability of these costs, are all subject to significant uncertainties. Additional developments with respect to the condition of the Crystal River Unit 3 structures, costs that are greater than anticipated, recoverability that is less than anticipated and/or the inability to return Crystal River Unit 3 to service all could adversely affect Duke Energy’s and Progress Energy Florida’s financial condition, results of operations and cash flows.

In addition to the other information set forth in this report, careful consideration should be given to the factors discussed in Part I, “Item 1A. Risk Factors” in Duke Energy’s, Duke Energy Carolinas’, Duke Energy Ohio’s and Duke Energy Indiana’s Annual Report on Form 10-K for the year ended December 31, 2011, which could materially affect the Duke Energy Registrants’ financial condition or future results.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

ISSUER PURCHASES OF EQUITY SECURITIES FOR THE SECOND QUARTER of 2012

There were no issuer purchases of equity securities during the second quarter of 2012.

ITEM 5. OTHER INFORMATION.

Departure of Directors

On July 27, 2012, John D. Baker II and Theresa M. Stone, each directors of Duke Energy, resigned from the Board of Directors of Duke Energy (the “Board”), effective immediately. Mr. Baker, who has served as a Director of Duke Energy or its predecessor companies since 2009, was a member of the Board’s Compensation Committee and Regulatory Policy and Operations Committee. Ms. Stone, who has served as a Director of Duke Energy or its predecessor companies since 2005, was Chair of the Board’s Audit Committee and was a member of the Finance & Risk Management Committee.

Based on Mr. Baker’s and Ms. Stone’s resignation letters, it is Duke Energy’s understanding that they determined to resign, in part, due to the Board’s actions on July 2, 2012 regarding the decision to make a change in the Chief Executive Officer of the Company.

Impact of Reverse Stock Split on Earnings Per Share

Immediately preceding the merger with Progress Energy on July 2, 2012, Duke Energy completed a one-for-three reverse stock split with respect to the issued and outstanding shares of Duke Energy common stock. The shareholders of Duke Energy approved the reverse stock split at Duke Energy’s special meeting of shareholders held on August 23, 2011.

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PART II – OTHER INFORMATION

The table below includes the currently reported and previously reported earnings per share information for the three most recently completed fiscal years and the three months ended March 31, 2012. The currently reported information reflects retrospective adjustment of the effect of the one-for-three reverse stock split.

			As Currently Reported					As Previously Reported
				Average				Average
(In millions, except per-share amounts)	Income			Shares		EPS		Shares		EPS
Three Months Ended March 31, 2012
Income from continuing operations attributable to Duke Energy common shareholders, as adjusted for participating securities — basic and diluted	$	292			446	$	0.66		1,337	$	0.22
Year Ended December 31, 2011
Income from continuing operations attributable to Duke Energy common shareholders, as adjusted for participating securities — basic	$	1,702			444	$	3.83		1,332	$	1.28
Effect of dilutive securities:
Stock options, performance and restricted stock					―				1
Income from continuing operations attributable to Duke Energy common shareholders, as adjusted for participating securities — diluted		1,702			444	$	3.83		1,333	$	1.28
Year Ended December 31, 2010
Income from continuing operations attributable to Duke Energy common shareholders, as adjusted for participating securities — basic	$	1,315			439	$	2.99		1,318	$	1.00
Effect of dilutive securities:
Stock options, performance and restricted stock					1				1
Income from continuing operations attributable to Duke Energy common shareholders, as adjusted for participating securities — diluted		1,315			440	$	2.99		1,319	$	1.00
Year Ended December 31, 2009
Income from continuing operations attributable to Duke Energy common shareholders, as adjusted for participating securities — basic	$	1,061			431	$	2.46		1,293	$	0.82
Effect of dilutive securities:
Stock options, performance and restricted stock					―				1
Income from continuing operations attributable to Duke Energy common shareholders, as adjusted for participating securities — diluted		1,061			431	$	2.46		1,294	$	0.82

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PART II – OTHER INFORMATION

ITEM 6. EXHIBITS
(a)	Exhibits
	Exhibits filed or furnished herewith are designated by an asterisk (*).
Exhibit Number			Duke Energy	Duke Energy Carolinas	Duke Energy Ohio	Duke Energy Indiana
*10.1		Amendment dated as of June 27, 2012, to the Employment Agreement, dated as of February 19, 2009 by and between James E. Rogers and Duke Energy Corporation	X
*10.2		Second Amendment, dated as of July 3, 2012 to the Employment Agreement dated as of February 19, 2009, by and between James E. Rogers and Duke Energy Corporation	X
*10.3		Amendment to Duke Energy Corporation 2010 Long-Term Incentive Plan	X
*12		Computation of Ratio of Earnings to Fixed Charges	X
*31.1		Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	X
*31.2		Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	X
*31.3		Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.		X
*31.4		Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.		X
*31.5		Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.			X
*31.6		Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.			X
*31.7		Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.				X
*31.8		Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.				X
*32.1		Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	X
*32.2		Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	X
*32.3		Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.		X
*32.4		Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.		X
*32.5		Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.			X
*32.6		Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.			X
*32.7		Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.				X
*32.8		Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.				X
*101.INS		XBRL Instance Document	X	X	X	X
*101.SCH		XBRL Taxonomy Extension Schema Document	X	X	X	X
*101.CAL		XBRL Taxonomy Calculation Linkbase Document	X	X	X	X
*101.LAB		XBRL Taxonomy Label Linkbase Document	X	X	X	X
*101.PRE		XBRL Taxonomy Presentation Linkbase Document	X	X	X	X
*101.DEF		XBRL Taxonomy Definition Linkbase Document	X	X	X	X
	The total amount of securities of the registrant or its subsidiaries authorized under any instrument with respect to long-term debt
not filed as an exhibit does not exceed 10% of the total assets of the registrant and its subsidiaries on a consolidated basis.  The
registrant agrees, upon request of the Securities and Exchange Commission (SEC), to furnish copies of any or all of such instruments to it.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned thereunto duly authorized.

	DUKE ENERGY CORPORATION DUKE ENERGY CAROLINAS, LLC DUKE ENERGY OHIO, INC. DUKE ENERGY INDIANA, INC.
Date: August 8, 2012	/S/    LYNN J. GOOD
	Lynn J. Good Executive Vice President and Chief Financial Officer
Date: August 8, 2012	/S/    STEVEN K. YOUNG
	Steven K. Young Vice President, Chief Accounting Officer, and Controller

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EX-10.1

 

AMENDMENT TO EMPLOYMENT AGREEMENT

This Amendment (the “Amendment”), dated as of June 27, 2012 to the employment agreement (the “Employment Agreement”), dated as of February 19, 2009, by and between James E. Rogers (the “Employee”) and Duke Energy Corporation (“Duke Energy”). 

WHEREAS, the Employee and Duke Energy entered into the Employment Agreement, pursuant to which the Employee currently serves as the Chairman, President and Chief Executive Officer of Duke Energy;

WHEREAS, Duke Energy, Diamond Acquisition Corporation and Progress Energy, Inc. entered into an Agreement and Plan of Merger, dated as of January 8, 2011 (the Merger Agreement), pursuant to which Diamond Acquisition Corporation, a wholly owned subsidiary of Duke Energy, shall merge with and into Progress Energy, Inc. and Progress Energy, Inc. shall become a wholly owned subsidiary of Duke Energy;

WHEREAS, concurrently with executing the Merger Agreement, Duke Energy, Diamond Acquisition Corporation and the Employee entered into a term sheet that was appended as Exhibit D to the Merger Agreement (the Term Sheet) requiring the Employee and Duke Energy to use commercially reasonable efforts to amend the Employment Agreement to provide for certain agreed upon terms; and

WHEREAS, the Merger Agreement provides that, as of the Effective Time (as defined in the Merger Agreement), the Employee shall cease to be employed as President and Chief Executive Officer of Duke Energy and shall solely serve as the Executive Chairman of the Board of Directors of Duke Energy.

NOW; THEREFORE, in light of the foregoing and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Duke Energy and the Employee agree to amend the Employment Agreement as follows, effective as of the Effective Time (as defined in the Merger Agreement); provided, however, in the event that the Effective Time shall not occur for any reason, this Amendment shall be null and void and of no force or effect

1.Section 2(a) of the Employment Agreement is hereby deleted in its entirety and replaced with the following:

“Duties. The Employee shall serve as Executive Chairman of the Board. The Employee shall conduct the Board meetings, support the Board member selection process, assist in setting the Board agenda, provide input on Duke Energy’s public policy positions, be the spokesman on certain public policy initiatives (i.e., national and international policy, global initiatives, active role in national and state government relations, in coordination with the Chief Executive Officer of Duke Energy), provide input on the selection of Duke Energy’s executive management team and represent the Board to the public.  The division of responsibility between the Employee and the Chief Executive Officer of Duke Energy for certain areas is specified in Exhibit B to the Merger Agreement.  The Employee shall report directly to the Board.”

2.Section 2(e) of the Employment Agreement is hereby deleted in its entirety.

3.Section 3 of the Employment Agreement is hereby deleted in its entirety and replaced with the following:

“Term of Employment. The term of the Employee’s employment pursuant to this Agreement shall commence on the Effective Date and end on the second anniversary of the Effective Time (as defined in the Agreement and Plan of Merger by and among Duke Energy, Diamond Acquisition Corporation and Progress Energy, Inc., dated as of January 8, 2011 (the “Merger Agreement”)), unless terminated earlier pursuant to the provisions of this Agreement.  Notwithstanding anything to the contrary provided in this Agreement, in the event that the Employee’s term of employment extends beyond December 31, 2013 and the Employee continues to serve as Executive Chairman of the Board at that time, the parties to this Agreement acknowledge and agree that the compensation terms set forth in Sections 4, 5, 6 and 7 herein shall be reviewed by the Compensation Committee and shall be determined through mutual agreement of the parties hereto.”

4.The sixth sentence of Section 6 is hereby deleted in its entirety and replaced with the following sentence:

“To the extent the Employee incurs ordinary and reasonable expenses associated with his spouse accompanying him on business travel, Duke Energy will reimburse the Employee for those expenses.”

5.The definition of “Good Reason” set forth on Exhibit B to the Employment Agreement is hereby deleted in its entirety and replaced with the following:

““Good Reason” means:

(a) The material reduction without his consent of the Employee’s title, authority, duties, or responsibilities from those in effect immediately following the Effective Time (as defined in the Merger Agreement), the failure by Duke Energy without the consent of the Employee to nominate the Employee for re-election to the Board, or a material adverse change in the Employee’s reporting responsibilities.  For the avoidance of doubt, the Employee ceasing to be employed as President and Chief Executive Officer of Duke Energy and continuing to serve as Executive Chairman of the Board in connection with the consummation of the Merger (as defined in the Merger Agreement) shall not constitute Good Reason under this Agreement.

(b) Any breach by Duke Energy of any other material provision of this Agreement (including but not limited to the place of performance as specified in Section 2(d)).”

6.Document Preparation Fees.  Duke Energy shall promptly reimburse the Employee for reasonable advisor fees incurred by the Employee in the negotiation and documentation of this Amendment and the Term Sheet upon receipt of supporting documentation reasonably satisfactory to Duke Energy. Payment will be made within five (5) business days after delivery of the Employee’s written request for payment accompanied by such evidence of fees and expenses incurred as Duke Energy reasonably may require in a manner consistent with Section 21 of the Employment Agreement.

7.Except as expressly amended by this Amendment, all terms and conditions of the Employment Agreement remain in full force and effect and are unmodified hereby.

8.This Amendment constitutes the entire understanding of the parties hereto with respect to the subject matter hereof and supersedes all prior negotiations, discussions, writings and agreements between the Employee and Duke Energy.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 

IN WITNESS WHEREOF, the parties have executed or caused this Amendment to be executed as of the day and year first above written.

EMPLOYEE

/s/ James E. Rogers
James E. Rogers

Acknowledged and Agreed:

DUKE ENERGY CORPORATION

By:     /s/ James H. Hance, Jr.
Name:  James H. Hance, Jr.
Title:    Chairman, Compensation Committee

EX-10.2

 

SECOND AMENDMENT TO EMPLOYMENT AGREEMENT

This Second Amendment (the “Amendment”), dated as of July 3, 2012 to the employment agreement (the “Employment Agreement”), dated as of February 19, 2009, by and between James E. Rogers (the “Employee”) and Duke Energy Corporation (Duke Energy), as amended.

WHEREAS, the Employee and Duke Energy entered into the Employment Agreement, pursuant to which the Employee currently serves as the Executive Chairman of the Board of Directors of Duke Energy (the “Executive Chairman”); 

WHEREAS, the Employee and Duke Energy entered into an amendment to the Employment Agreement that became effective at the Effective Time (as defined in the Agreement and Plan of Merger, by and among Duke Energy, Diamond Acquisition Corporation and Progress Energy, Inc., dated as of January 8, 2011 (the “Merger Agreement”)), pursuant to which the Employee ceased to be employed as President and Chief Executive Officer of Duke Energy and began to solely serve as the Executive Chairman (the “First Amendment”);  

WHEREAS, immediately following the Effective Time, the Board of Directors of Duke Energy determined that it was in the best interest of Duke Energy for the Employee to be reappointed as President and Chief Executive Officer of Duke Energy and that he remain Chairman of the Duke Energy Board of Directors; and

WHEREAS, the Board of Directors has determined that the Employee should continue with Duke Energy on terms and conditions that are the same as prior to the execution of the First Amendment.

NOW; THEREFORE, in light of the foregoing and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Duke Energy and the Employee agree to amend the Employment Agreement as follows, effective as of 12:01 a.m. on July 3, 2012:

1.All amendments set forth in the First Amendment shall be null and void and of no force or effect. All terms and conditions of the Employment Agreement shall revert to the operative terms and conditions prior to the Effective Time in all respects.

2.This Amendment constitutes the entire understanding of the parties hereto with respect to the subject matter hereof and supersedes all prior negotiations, discussions, writings and agreements between the Employee and Duke Energy.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 

IN WITNESS WHEREOF, the parties have executed or caused this Amendment to be executed as of the day and year first above written.

EMPLOYEE

/s/ James E. Rogers
James E. Rogers

Acknowledged and Agreed:

DUKE ENERGY CORPORATION

By:  /s/ Ann M. Gray
Name:  Ann M. Gray
Title:    Lead Director

EX-10.3

 

AMENDMENT TO
DUKE ENERGY CORPORATION
2010 LONG-TERM INCENTIVE PLAN

                The Duke Energy Corporation 2010 Long-Term Incentive Plan (the "Plan") is hereby amended, effective immediately prior to the "Effective Time" (as defined in the Agreement and Plan of Merger, dated as of January 8, 2011, by and among Duke Energy Corporation ("Duke Energy"), Diamond Acquisition Corporation and Progress Energy, Inc.) to equitably reflect the 1-for-3 reverse stock split with respect to the issued and outstanding Duke Energy common stock, as follows:  

1.             Section 3.1 of the Plan is hereby amended by deleting the number "75,000,000" each place that it appears and replacing it in each case with the number "25,000,000". 

2.             Each of Sections 6.1 and 7.1 of the Plan is hereby amended by deleting the number "3,000,000" and replacing it with the number "1,000,000".

3.          Each of Sections 8.2 and 9.4 of the Plan is hereby amended by deleting the number "600,000" and replacing it with the number "200,000".

4.            Except as explicitly set forth herein, the Plan will remain in full force and effect.

                                                                                                 DUKE ENERGY CORPORATION

                                                                                                 By:            /s/ Jennifer L. Weber            

                                                                                                                  Jennifer L. Weber

                                                                                                                  Executive Vice President and Chief

                                                                                                                  Human Resources Officer

EX-12

 

EXHIBIT 12
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES – DUKE ENERGY CORPORATION
The ratio of earnings to fixed charges is calculated using the Securities and Exchange Commission guidelines.
		Six Months
		Ended June 30,		Years Ended December 31,
(in millions)		2012		2011		2010		2009		2008		2007
Earnings as defined for fixed charges calculation
Add:
	Pretax income from continuing operations(a)	$	970	$	2,297	$	2,097	$	1,770	$	1,993	$	2,078
	Fixed charges		544		1,057		1,045		892		883		797
	Distributed income of equity investees		81		149		111		82		195		147
Deduct:
	Interest capitalized(b)		74		166		168		102		93		71
Total earnings		$	1,521	$	3,337	$	3,085	$	2,642	$	2,978	$	2,951
Fixed charges:
	Interest on debt, including capitalized portions(b)	$	530	$	1,026	$	1,008	$	853	$	834	$	756
	Estimate of interest within rental expense		14		31		37		39		49		41
Total fixed charges		$	544	$	1,057	$	1,045	$	892	$	883	$	797
Ratio of earnings to fixed charges			2.8		3.2		3.0		3.0		3.4		3.7
(a)	Excludes amounts attributable to noncontrolling interests and income or loss from equity investees.
(b)	Excludes the equity costs related to Allowance for Funds Used During Construction that are included in Other Income and Expenses in the Condensed Consolidated Statements of Operations.

EX-31.1

 

EXHIBIT 31.1

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, James E. Rogers, certify that:

1) I have reviewed this quarterly report on Form 10-Q of Duke Energy Corporation;

2)  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3)  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4)  The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Acts Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)  Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)  Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)   Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

5)   The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)   Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 8, 2012

/s/    JAMES E. ROGERS        

James E. Rogers

Chairman, President and

Chief Executive Officer

EX-31.2

 

EXHIBIT 31.2

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Lynn J. Good, certify that:

1)  I have reviewed this quarterly report on Form 10-Q of Duke Energy Corporation;

2)  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3)  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4)  The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Acts Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)  Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)  Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)  Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

5)  The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)  Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 8, 2012

/s/    LYNN J. GOOD        

Lynn J. Good

Executive Vice President and

Chief Financial Officer

EX-31.3

 

EXHIBIT 31.3

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, James E. Rogers, certify that:

1)  I have reviewed this quarterly report on Form 10-Q of Duke Energy Carolinas, LLC;

2)  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3)  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4)  The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Acts Rules 13a–15(f) and 15d–15(f)) for the registrant and have:

a)  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)  Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)  Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)  Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

5)  The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)  Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 8, 2012

/s/    JAMES E. ROGERS        

James E. Rogers

Chief Executive Officer

EX-31.4

 

EXHIBIT 31.4

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Lynn J. Good, certify that:

1)  I have reviewed this quarterly report on Form 10-Q of Duke Energy Carolinas, LLC;

2)  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3)  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4)  The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Acts Rules 13a–15(f) and 15d–15(f)) for the registrant and have:

a)  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)  Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)  Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)  Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

5)  The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)   All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)  Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 8, 2012

/s/    LYNN J. GOOD        

Lynn J. Good

Chief Financial Officer

EX-31.5

 

EXHIBIT 31.5

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, James E. Rogers, certify that:

1)  I have reviewed this quarterly report on Form 10-Q of Duke Energy Ohio, Inc.;

2)  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3)  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4)  The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Acts Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)  Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)  Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)  Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

5)  The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)  Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 8, 2012

/s/    JAMES E. ROGERS        

James E. Rogers

Chief Executive Officer

EX-31.6

 

EXHIBIT 31.6

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Lynn J. Good, certify that:

1)  I have reviewed this quarterly report on Form 10-Q of Duke Energy Ohio, Inc.;

2)  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3)  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4)  The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Acts Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)  Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)  Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)  Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

5)  The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)  Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 8, 2012

/s/    LYNN J. GOOD        

Lynn J. Good

Chief Financial Officer

EX-31.7

 

EXHIBIT 31.7

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, James E. Rogers, certify that:

1)  I have reviewed this quarterly report on Form 10-Q of Duke Energy Indiana, Inc.;

2)  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3)  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4)  The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Acts Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)  Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)  Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)  Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

5)  The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)  Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 8, 2012

/s/    JAMES E. ROGERS        

James E. Rogers

Chief Executive Officer

EX-31.8

 

EXHIBIT 31.8

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Lynn J. Good, certify that:

1)  I have reviewed this quarterly report on Form 10-Q of Duke Energy Indiana, Inc.;

2)  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3)  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4)  The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Acts Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)  Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)  Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)  Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

5)  The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)  Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 8, 2012

/s/    LYNN J. GOOD        

Lynn J. Good

Chief Financial Officer

EX-32.1

 

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Duke Energy Corporation (Duke Energy) on Form 10-Q for the period ending June 30, 2012 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, James E. Rogers, President and Chief Executive Officer of Duke Energy, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)  The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)  The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Duke Energy.

/s/    JAMES E. ROGERS        

James E. Rogers

Chairman, President and Chief Executive Officer

August 8, 2012

EX-32.2

 

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Duke Energy Corporation (Duke Energy) on Form 10-Q for the period ending June 30, 2012 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Lynn J. Good, Executive Vice President and Chief Financial Officer of Duke Energy, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)  The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)  The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Duke Energy.

/s/    LYNN J. GOOD        

Lynn J. Good

Executive Vice President and Chief Financial Officer

August 8, 2012

EX-32.3

 

EXHIBIT 32.3

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Duke Energy Carolinas, LLC (Duke Energy Carolinas) on Form 10-Q for the period ending June 30, 2012 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, James E. Rogers, Chief Executive Officer of Duke Energy Carolinas, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)  The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)  The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Duke Energy Carolinas.

/s/    JAMES E. ROGERS        

James E. Rogers

Chief Executive Officer

August 8, 2012

EX-32.4

 

EXHIBIT 32.4

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Duke Energy Carolinas, LLC (Duke Energy Carolinas) on Form 10-Q for the period ending June 30, 2012 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Lynn J. Good, Chief Financial Officer of Duke Energy Carolinas, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)  The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)  The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Duke Energy Carolinas.

/S/    LYNN J. GOOD        

Lynn J. Good

Chief Financial Officer

August 8, 2012

EX-32.5

 

EXHIBIT 32.5

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Duke Energy Ohio, Inc. (Duke Energy Ohio) on Form 10-Q for the period ending June 30, 2012 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, James E. Rogers, Chief Executive Officer of Duke Energy Ohio, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)  The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)  The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Duke Energy Ohio.

/S/    JAMES E. ROGERS        

James E. Rogers

Chief Executive Officer

August 8, 2012

EX-32.6

 

EXHIBIT 32.6

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Duke Energy Ohio, Inc. (Duke Energy Ohio) on Form 10-Q for the period ending June 30, 2012 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Lynn J. Good, Chief Financial Officer of Duke Energy Ohio, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)  The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)  The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Duke Energy Ohio.

/S/    LYNN J. GOOD        

Lynn J. Good

Chief Financial Officer

August 8, 2012

EX-32.7

 

EXHIBIT 32.7

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Duke Energy Indiana, Inc. (Duke Energy Indiana) on Form 10-Q for the period ending June 30, 2012 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, James E. Rogers, Chief Executive Officer of Duke Energy Indiana, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)  The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)  The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Duke Energy Indiana.

/s/    JAMES E. ROGERS        

James E. Rogers

Chief Executive Officer

August 8, 2012

EX-32.8

 

EXHIBIT 32.8

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Duke Energy Indiana, Inc. (Duke Energy Indiana) on Form 10-Q for the period ending June 30, 2012 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Lynn J. Good, Chief Financial Officer of Duke Energy Indiana, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)  The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)  The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Duke Energy Indiana.

/s/    LYNN J. GOOD        

Lynn J. Good

Chief Financial Officer

August 8, 2012

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Goodwill (Tables)

6 Months Ended

Jun. 30, 2012

Goodwill By Reportable Operating Segment

Goodwill
	The following tables show goodwill by reportable operating segment for Duke Energy and Duke Energy Ohio:
Duke Energy
(in millions)		USFE&G		Commercial Power		International Energy		Total
Balance at December 31, 2011:
Goodwill		$	3,483	$	940	$	297	$	4,720
Accumulated Impairment Charges			―		(871)		―		(871)
Balance at December 31, 2011, as adjusted for accumulated impairment charges			3,483		69		297		3,849
Balance at June 30, 2012:
Goodwill			3,483		940		297		4,720
Accumulated Impairment Charges			―		(871)		―		(871)
Foreign Exchange and Other Changes			―		―		(7)		(7)
Balance at June 30, 2012, as adjusted for accumulated impairment charges		$	3,483	$	69	$	290	$	3,842

Duke Energy Ohio [Member]

Goodwill By Reportable Operating Segment

Duke Energy Ohio
(in millions)	Franchised Electric & Gas		Commercial Power		Total
Balance at December 31, 2011:
Goodwill	$	1,137	$	1,188	$	2,325
Accumulated Impairment Charges		(216)		(1,188)		(1,404)
Balance at December 31, 2011, as adjusted for accumulated impairment charges		921		―		921
Balance at June 30, 2012:
Goodwill		1,137		1,188		2,325
Accumulated Impairment Charges		(216)		(1,188)		(1,404)
Balance at June 30, 2012, as adjusted for accumulated impairment charges	$	921	$	―	$	921

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Acquisitions and Sales of Other Assets (Purchase Price Allocation) (Details) (USD $) In Millions, unless otherwise specified	Jul. 02, 2012
Current assets	$ 3,266
Property, plant and equipment	23,808
Goodwill	12,287
Other long-term assets, excluding goodwill	8,138
Total assets	47,499
Current liabilities, including current maturities of long-term debt	3,536
Long-term liabilities, preferred stock and noncontrolling interests	10,211
Long-term debt	15,681
Total liabilities and preferred stock	29,428
Total estimated purchase price	$ 18,071

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Income Taxes And Other Taxes (Tables)

6 Months Ended

Jun. 30, 2012

Income Taxes And Other Taxes [Abstract]

Summary Of Effective Tax Rates

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2012		2011		2012		2011
Duke Energy	32.2	%	30.4	%	29.8	%	30.8	%
Duke Energy Carolinas	37.2	%	35.5	%	36.7	%	35.3	%
Duke Energy Ohio	39.9	%	9.6	%	38.1	%	30.4	%
Duke Energy Indiana	34.4	%	29.3	%	45.7	%	32.3	%

Schedule Of Excise Taxes

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in millions)	2012		2011		2012		2011
Duke Energy Carolinas	$	39	$	37	$	78	$	73
Duke Energy Ohio		23		25		53		59
Duke Energy Indiana		8		7		16		15
Duke Energy	$	70	$	69	$	147	$	147

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Risk Management, Derivative Instruments And Hedging Activities (Underlying Notional Amounts For Derivative Instruments Accounted For At Fair Value) (Details)	6 Months Ended	12 Months Ended
	Jun. 30, 2012 MWh dth T	Dec. 31, 2011 MWh T dth
Electricity-energy (Gigawatt-hours)	10,751,000,000	14,118,000,000
Emission allowances: NOX (in tons)	3,000	9,000
Natural gas (in decatherms)	30,000,000	40,000,000
Duke Energy Ohio [Member]
Electricity-energy (Gigawatt-hours)	6,773,000,000	14,655,000,000
Emission allowances: NOX (in tons)	3,000	9,000
Natural gas (in decatherms)	21,000,000	2,000,000

XML

Acquisitions and Sales of Other Assets (Pro Forma Financial Information) (Details) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Revenues	$ 5,843	$ 5,789	$ 11,557	$ 11,613
Net Income Attributable to Duke Energy Corporation	$ 527	$ 621	$ 984	$ 1,338
Basic Earnings Per Share	$ 0.75	$ 0.89	$ 1.40	$ 1.91
Diluted Earnings Per Share	$ 0.75	$ 0.89	$ 1.40	$ 1.91

XML

Fair Value Of Financial Assets And Liabilities (Reconciliation Of Assets And Liabilities Measured At Fair Value On A Recurring Basis Using Unobservable Inputs) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended		3 Months Ended		6 Months Ended		3 Months Ended		6 Months Ended		3 Months Ended	6 Months Ended				3 Months Ended		6 Months Ended		3 Months Ended		6 Months Ended		3 Months Ended		6 Months Ended		3 Months Ended		6 Months Ended		3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012 Duke Energy Carolinas [Member]	Jun. 30, 2011 Duke Energy Carolinas [Member]	Jun. 30, 2012 Duke Energy Carolinas [Member]	Jun. 30, 2011 Duke Energy Carolinas [Member]	Jun. 30, 2012 Available-For-Sale Auction Rate Securities [Member]	Jun. 30, 2011 Available-For-Sale Auction Rate Securities [Member]	Jun. 30, 2012 Available-For-Sale Auction Rate Securities [Member]	Jun. 30, 2011 Available-For-Sale Auction Rate Securities [Member]	Jun. 30, 2012 Available-For-Sale Auction Rate Securities [Member] Duke Energy Carolinas [Member]	Jun. 30, 2012 Available-For-Sale Auction Rate Securities [Member] Duke Energy Carolinas [Member]	Jun. 30, 2011 Available-For-Sale Auction Rate Securities [Member] Duke Energy Carolinas [Member]	Mar. 31, 2011 Available-For-Sale Auction Rate Securities [Member] Duke Energy Carolinas [Member]	Dec. 31, 2010 Available-For-Sale Auction Rate Securities [Member] Duke Energy Carolinas [Member]	Jun. 30, 2012 Available-For-Sale NDTF Investments [Member]	Jun. 30, 2011 Available-For-Sale NDTF Investments [Member]	Jun. 30, 2012 Available-For-Sale NDTF Investments [Member]	Jun. 30, 2011 Available-For-Sale NDTF Investments [Member]	Jun. 30, 2012 Available-For-Sale NDTF Investments [Member] Duke Energy Carolinas [Member]	Jun. 30, 2011 Available-For-Sale NDTF Investments [Member] Duke Energy Carolinas [Member]	Jun. 30, 2012 Available-For-Sale NDTF Investments [Member] Duke Energy Carolinas [Member]	Jun. 30, 2011 Available-For-Sale NDTF Investments [Member] Duke Energy Carolinas [Member]	Jun. 30, 2012 Derivatives, Net [Member]	Jun. 30, 2011 Derivatives, Net [Member]	Jun. 30, 2012 Derivatives, Net [Member]	Jun. 30, 2011 Derivatives, Net [Member]	Jun. 30, 2012 Derivatives, Net [Member] Duke Energy Ohio [Member]	Jun. 30, 2011 Derivatives, Net [Member] Duke Energy Ohio [Member]	Jun. 30, 2012 Derivatives, Net [Member] Duke Energy Ohio [Member]	Jun. 30, 2011 Derivatives, Net [Member] Duke Energy Ohio [Member]	Jun. 30, 2012 Derivatives, Net [Member] Duke Energy Indiana [Member]	Jun. 30, 2011 Derivatives, Net [Member] Duke Energy Indiana [Member]	Jun. 30, 2012 Derivatives, Net [Member] Duke Energy Indiana [Member]	Jun. 30, 2011 Derivatives, Net [Member] Duke Energy Indiana [Member]
Beginning balance	$ 86	$ 146	$ 85	$ 146	$ 68	$ 60	$ 65	$ 59	$ 72	$ 122	$ 71	$ 118	$ 12	$ 12	$ 12	$ 12	$ 12	$ 56	$ 48	$ 53	$ 47	$ 56	$ 48	$ 53	$ 47	$ (42)	$ (24)	$ (39)	$ (19)	$ (4)	$ 17	$ (3)	$ 13	$ 3	$ 1	$ 4	$ 4
Revenue, regulated electric	17		25																							17		25						16		24
Revenue, non-regulated electric, natural gas	(1)	(11)	(3)	(19)																						(1)	(11)	(3)	(19)	(1)	(10)	(1)	(6)
Gains on available for sale securities and other	8	(1)	9	5	2		2		8	(1)	9	5	2	2
Purchases	29	6	31	7	7	6	9	7										7	6	9	7	7	6	9	7	22		22
Sales		(1)		(3)		(1)		(3)											(1)		(3)		(1)		(3)									(22)		(22)
Settlements	(54)	(28)	(63)	(27)	(8)		(8)		(39)	(22)	(39)	(24)	(8)	(8)												(15)	(6)	(24)	(3)	(2)		(2)	(1)	(19)	(10)	(29)	(12)
Total gains (losses) included on the Condensed Consolidated Balance Sheet as regulatory asset or liability	1	19	2	21	1		2	2										1		2	2	1		2	2		19		19	(1)		(2)	1		19	1	18
Fair Value, Level 3 Transfers out		(9)		(9)						(9)		(9)
Ending Balance	86	121	86	121	70	65	70	65	41	90	41	90	6	6	12	12	12	64	53	64	53	64	53	64	53	(19)	(22)	(19)	(22)	(2)	7	(2)	7	22	10	22	10
Revenue, non regulated electric and other - non-regulated			$ (3)	$ (10)																								$ (3)	$ (10)			$ 1	$ 1

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Employee Benefit Plans (Tables)

3 Months Ended

6 Months Ended

Jun. 30, 2012

Jun. 30, 2012

Components Of Net Periodic Pension Costs

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in millions)		2012		2011		2012		2011
Duke Energy Carolinas	$	9	$	8	$	20	$	20
Duke Energy Ohio		1		1		2		2
Duke Energy Indiana		1		2		3		5

Duke Energy Carolinas [Member]

Components Of Net Periodic Pension Costs

Duke Energy Carolinas
	Three Months Ended						Three Months Ended
	June 30, 2012						June 30, 2011
(in millions)		Qualified Pension Plans		Non-Qualified Pension Plans		Other Post-Retirement Benefit Plans		Qualified Pension Plans		Non-Qualified Pension Plans		Other Post-Retirement Benefit Plans
Service cost	$	8	$	―	$	―	$	10	$	―	$	1
Interest cost on projected benefit obligation		22		1		4		22		1		4
Expected return on plan assets		(37)		―		(2)		(38)		―		(3)
Amortization of prior service cost (credit)		1		―		(1)		―		―		(2)
Amortization of net transition liability		―		―		2		―		―		3
Amortization of loss		12		―		―		9		―		―
Other		1		―		―		2		―		―
Net periodic costs	$	7	$	1	$	3	$	5	$	1	$	3

	Six Months Ended						Six Months Ended
	June 30, 2012						June 30, 2011
(in millions)		Qualified Pension Plans		Non-Qualified Pension Plans		Other Post-Retirement Benefit Plans		Qualified Pension Plans		Non-Qualified Pension Plans		Other Post-Retirement Benefit Plans
Service cost	$	17	$	―	$	1	$	19	$	―	$	1
Interest cost on projected benefit obligation		45		1		8		43		1		8
Expected return on plan assets		(73)		―		(5)		(75)		―		(5)
Amortization of prior service cost (credit)		1		―		(2)		―		―		(3)
Amortization of net transition liability		―		―		3		―		―		5
Amortization of loss		23		―		1		18		―		1
Other		1		―		―		4		―		―
Net periodic costs	$	14	$	1	$	6	$	9	$	1	$	7

Duke Energy Ohio [Member]

Components Of Net Periodic Pension Costs

Duke Energy Ohio
		Three Months Ended				Three Months Ended
		June 30, 2012				June 30, 2011
(in millions)			Qualified Pension Plans(a)		Qualified Pension Plans(a)
Service cost		$	1	$	1
Interest cost on projected benefit obligation			8		8
Expected return on plan assets			(11)		(11)
Amortization of loss			3		2
Other			―		1
Net periodic costs(b)		$	1	$	1
(a)	Excludes regulatory asset amortization of $1 million for each of the three months ended June 30, 2012 and 2011, resulting from purchase accounting adjustments associated with Duke Energy’s merger with Cinergy in April 2006.
(b)	Components of net periodic costs for Duke Energy Ohio's other post-retirement benefit plans and non-qualified pension plans were an insignificant amount for each of the three months ended June 30, 2012 and 2011.

		Six Months Ended				Six Months Ended
		June 30, 2012				June 30, 2011
(in millions)			Qualified Pension Plans(a)		Other Post-Retirement Benefit Plans(b)		Qualified Pension Plans(a)		Other Post-Retirement Benefit Plans(b)
Service cost		$	3	$	―	$	3	$	―
Interest cost on projected benefit obligation			16		1		16		1
Expected return on plan assets			(22)		―		(22)		―
Amortization of loss (gain)			5		(1)		4		(1)
Other			―		―		1		―
Net periodic costs(c)		$	2	$	―	$	2	$	―
(a)	Excludes regulatory asset amortization of $3 million for each of the six months ended June 30, 2012 and 2011, resulting from purchase accounting adjustments associated with Duke Energy’s merger with Cinergy in April 2006.
(b)	Excludes regulatory asset amortization of $1 million for each of the six months ended June 30, 2012 and 2011, resulting from purchase accounting adjustments associated with Duke Energy’s merger with Cinergy in April 2006.
(c)	Components of net periodic costs for Duke Energy Ohio's non-qualified pension plans were an insignificant amount for each of the six months ended June 30, 2012 and 2011.

Duke Energy Indiana [Member]

Components Of Net Periodic Pension Costs

Duke Energy Indiana
		Three Months Ended				Three Months Ended
		June 30, 2012				June 30, 2011
(in millions)			Qualified Pension Plans		Other Post-Retirement Benefit Plans		Qualified Pension Plans		Other Post-Retirement Benefit Plans
Service cost		$	3	$	―	$	2	$	―
Interest cost on projected benefit obligation			7		2		8		2
Expected return on plan assets			(11)		(1)		(11)		(1)
Amortization of prior service cost			―		1		1		―
Amortization of loss (gain)			4		(1)		3		1
Other			―		―		1		―
Net periodic costs(a)		$	3	$	1	$	4	$	2
(a)	Components of net periodic costs for Duke Energy Indiana's non-qualified pension plans were an insignificant amount for each of the three months ended June 30, 2012 and 2011.

		Six Months Ended				Six Months Ended
		June 30, 2012				June 30, 2011
(in millions)			Qualified Pension Plans		Other Post-Retirement Benefit Plans		Qualified Pension Plans		Other Post-Retirement Benefit Plans
Service cost		$	5	$	―	$	5	$	―
Interest cost on projected benefit obligation			15		4		15		4
Expected return on plan assets			(23)		(1)		(22)		(1)
Amortization of prior service cost			1		1		1		―
Amortization of loss (gain)			7		(1)		7		1
Other			―		―		1		―
Net periodic costs(a)		$	5	$	3	$	7	$	4
(a)	Components of net periodic costs for Duke Energy Indiana's non-qualified pension plans were an insignificant amount for each of the six months ended June 30, 2012 and 2011.

Duke Energy Corp [Member]

Components Of Net Periodic Pension Costs

		Three Months Ended						Three Months Ended
		June 30, 2012						June 30, 2011
(in millions)		Qualified Pension Plans(a)		Non-Qualified Pension Plans		Other Post-Retirement Benefit Plans(b)		Qualified Pension Plans(a)		Non-Qualified Pension Plans		Other Post-Retirement Benefit Plans(b)
Service cost		$	22	$	―	$	1	$	24	$	1	$	3
Interest cost on projected benefit obligation			59		1		9		58		2		9
Expected return on plan assets			(94)		―		(4)		(96)		―		(4)
Amortization of prior service cost (credit)			2		1		(2)		1		―		(2)
Amortization of net transition liability			―		―		2		―		―		2
Amortization of loss (gain)			25		1		(1)		19		―		(1)
Other			1		―		―		5		―		―
Net periodic costs		$	15	$	3	$	5	$	11	$	3	$	7
(a)	Excludes regulatory asset amortization of $4 million and $3 million for each of the three months ended June 30, 2012 and 2011, respectively, resulting from purchase accounting adjustments associated with Duke Energy’s merger with Cinergy in April 2006.
(b)	Excludes regulatory asset amortization of $2 million for each of the three months ended June 30, 2012 and 2011, resulting from purchase accounting adjustments associated with Duke Energy’s merger with Cinergy in April 2006.

		Six Months Ended						Six Months Ended
		June 30, 2012						June 30, 2011
(in millions)		Qualified Pension Plans(a)		Non-Qualified Pension Plans		Other Post-Retirements Benefit Plans(b)		Qualified Pension Plans(a)		Non-Qualified Pension Plans		Other Post-Retirements Benefit Plans(b)
Service cost		$	45	$	1	$	3	$	48	$	1	$	4
Interest cost on projected benefit obligation			120		3		17		116		4		18
Expected return on plan assets			(188)		―		(8)		(192)		―		(8)
Amortization of prior service cost (credit)			3		1		(4)		3		1		(4)
Amortization of net transition liability			―		―		4		―		―		5
Amortization of loss (gain)			49		1		(3)		38		―		(2)
Other			2		―		―		9		―		―
Net periodic costs		$	31	$	6	$	9	$	22	$	6	$	13
(a)	Excludes regulatory asset amortization of $7 million for each of the six months ended June 30, 2012 and 2011, resulting from purchase accounting adjustments associated with Duke Energy’s merger with Cinergy in April 2006.
(b)	Excludes regulatory asset amortization of $4 million for each of the six months ended June 30, 2012 and 2011, resulting from purchase accounting adjustments associated with Duke Energy’s merger with Cinergy in April 2006.

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Organization And Basis Of Presentation (Tables)

6 Months Ended

Jun. 30, 2012

Organization And Basis of Presentation [Abstract]

Schedule Of Unbilled Revenues With Restricted Receivables

(in millions)	June 30, 2012		December 31, 2011
Duke Energy	$	769	$	674
Duke Energy Carolinas	$	335	$	293
Duke Energy Ohio	$	51	$	50
Duke Energy Indiana	$	8	$	2

Schedule of Unbilled Revenues Sold to CRC

(in millions)		June 30, 2012		December 31, 2011
Duke Energy Ohio		$	80	$	89
Duke Energy Indiana		$	140	$	115
	See Note ##VIE for additional information.

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Fair Value Of Financial Assets And Liabilities (Additional Fair Value Disclosure) (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended		12 Months Ended
	Jun. 30, 2012		Dec. 31, 2011
Debt of variable interest entities	$ 915		$ 949
Book Value [Member]
Long-term Debt	20,324	[1]	20,573	[1]
Fair Value [Member]
Long-term Debt, Fair Value	23,028		23,053
Duke Energy Carolinas [Member]
Debt of variable interest entities	300		300
Duke Energy Carolinas [Member] | Book Value [Member]
Long-term Debt	8,522	[2]	9,274	[2]
Duke Energy Carolinas [Member] | Fair Value [Member]
Long-term Debt, Fair Value	9,996		10,629
Duke Energy Ohio [Member] | Book Value [Member]
Long-term Debt	2,551		2,555
Duke Energy Ohio [Member] | Fair Value [Member]
Long-term Debt, Fair Value	2,684		2,688
Duke Energy Indiana [Member] | Book Value [Member]
Long-term Debt	3,707		3,459
Duke Energy Indiana [Member] | Fair Value [Member]
Long-term Debt, Fair Value	$ 4,346		$ 4,048

[1] Includes book value of Non-recourse long-term debt of variable interest entities of $915 million and $949 million June 30, 2012 and December 31, 2011, respectively.

[2] Includes book value of Non-recourse long-term debt of variable interest entities of $300 million at both June 30, 2012 and December 31, 2011, respectively.

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Risk Management, Derivative Instruments And Hedging Activities (Undesignated Contracts - Location And Amount Of Pre-Tax Gains And (Losses) Recognized In Income Or As Regulatory Assets Or Liabilities) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Total Pre-tax Gains (Losses) Recognized as Regulatory Assets or Liabilities	$ (14)	$ (11)	$ 12	$ 0
Total Pre-tax Losses Recognized in Earnings	0	(12)	36	(26)
Duke Energy Ohio [Member]
Total Pre-tax Gains (Losses) Recognized as Regulatory Assets or Liabilities	(1)	(1)	(1)
Total Pre-tax Losses Recognized in Earnings	3	(17)	74	(24)
Interest Rate Contracts [Member] | Duke Energy Ohio [Member]
Total Pre-tax Losses Recognized in Earnings	(1)	(1)	(1)	(1)
Revenue, Non-Regulated Electric, Natural Gas And Other [Member] | Commodity Contracts [Member]
Total Pre-tax Losses Recognized in Earnings	0	(12)	36	(25)
Revenue, Non-Regulated Electric, Natural Gas And Other [Member] | Commodity Contracts [Member] | Duke Energy Ohio [Member]
Total Pre-tax Losses Recognized in Earnings	4	(16)	75	(22)
Fuel Used In Electric Generation And Purchased Power-Non-Regulated [Member] | Commodity Contracts [Member]
Total Pre-tax Losses Recognized in Earnings				(1)
Fuel Used In Electric Generation And Purchased Power-Non-Regulated [Member] | Commodity Contracts [Member] | Duke Energy Ohio [Member]
Total Pre-tax Losses Recognized in Earnings				(1)
Regulatory Asset [Member] | Interest Rate Contracts [Member]
Total Pre-tax Gains (Losses) Recognized as Regulatory Assets or Liabilities	(32)	(21)	(10)	(9)
Regulatory Asset [Member] | Interest Rate Contracts [Member] | Duke Energy Ohio [Member]
Total Pre-tax Gains (Losses) Recognized as Regulatory Assets or Liabilities	(1)
Regulatory Asset [Member] | Commodity Contracts [Member]
Total Pre-tax Gains (Losses) Recognized as Regulatory Assets or Liabilities	1	(1)		(1)
Regulatory Asset [Member] | Commodity Contracts [Member] | Duke Energy Ohio [Member]
Total Pre-tax Gains (Losses) Recognized as Regulatory Assets or Liabilities	0	0	(2)	(1)
Regulatory Liability [Member] | Commodity Contracts [Member]
Total Pre-tax Gains (Losses) Recognized as Regulatory Assets or Liabilities	17	11	22	10
Regulatory Liability [Member] | Commodity Contracts [Member] | Duke Energy Ohio [Member]
Total Pre-tax Gains (Losses) Recognized as Regulatory Assets or Liabilities		$ (1)	$ 1

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Variable Interest Entities (Sales and Cash Flows)(Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Duke Energy Ohio [Member]
CRC Receivable Sales	$ 490	$ 521	$ 1,100	$ 1,240
Gain (Loss) on Sale of Accounts Receivable	3	5	7	11
Cash Flows Between Transferor and Transferee, Proceeds from New Transfers	484	560	1,120	1,337
CRC Return Received on Retained Interests	1	3	3	7
CRC Collection Fees Received	1	0	1	0
Duke Energy Indiana [Member]
CRC Receivable Sales	701	630	1,407	1,298
Gain (Loss) on Sale of Accounts Receivable	3	4	6	8
Cash Flows Between Transferor and Transferee, Proceeds from New Transfers	673	646	1,397	1,355
CRC Return Received on Retained Interests	1	3	3	7
CRC Collection Fees Received	$ 1	$ 0	$ 1	$ 0

XML

Business Segments (Business Segment Data) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Unaffiliated Revenues	$ 3,577	$ 3,534	$ 7,207	$ 7,197
Intersegment Revenues	0	0	0	0
Segment Reporting Information, Revenue for Reportable Segment, Total	3,577	3,534	7,207	7,197
Add back Noncontrolling interest component	4	6	8	8
Income (Loss) from Discontinued Operations, Net of Tax, Including Portion Attributable to Noncontrolling Interest	(1)	0	1	0
Net Income (Loss)	448	441	747	954
Duke Energy Ohio [Member]
Unaffiliated Revenues	717	694	1,629	1,573
Net Income (Loss)	45	33	119	106
U.S. Franchised Electric And Gas [Member]
Unaffiliated Revenues	2,688	2,540	5,348	5,214
Intersegment Revenues	9	9	17	18
Segment Reporting Information, Revenue for Reportable Segment, Total	2,697	2,549	5,365	5,232
Segment Income	337	297	473	638
Commercial Power [Member]
Unaffiliated Revenues	488	592	1,052	1,234
Intersegment Revenues	14	3	30	5
Segment Reporting Information, Revenue for Reportable Segment, Total	502	595	1,082	1,239
Segment Income	28	30	59	79
International Energy [Member]
Unaffiliated Revenues	397	406	799	754
Intersegment Revenues	0	0	0	0
Segment Reporting Information, Revenue for Reportable Segment, Total	397	406	799	754
Segment Income	105	127	247	255
Total Reportable Segments [Member]
Unaffiliated Revenues	3,573	3,538	7,199	7,202
Intersegment Revenues	23	12	47	23
Segment Reporting Information, Revenue for Reportable Segment, Total	3,596	3,550	7,246	7,225
Segment Income	470	454	779	972
Total Reportable Segments [Member] | Duke Energy Ohio [Member]
Unaffiliated Revenues	729	694	1,656	1,573
Segment Income	47	35	125	111
Other [Member]
Unaffiliated Revenues	4	(4)	8	(5)
Intersegment Revenues	12	13	23	25
Segment Reporting Information, Revenue for Reportable Segment, Total	16	9	31	20
Segment Income	(25)	(19)	(41)	(26)
Other [Member] | Duke Energy Ohio [Member]
Segment Income	(2)	(2)	(6)	(5)
Eliminations [Member]
Intersegment Revenues	(35)	(25)	(70)	(48)
Segment Reporting Information, Revenue for Reportable Segment, Total	(35)	(25)	(70)	(48)
Eliminations [Member] | Duke Energy Ohio [Member]
Unaffiliated Revenues	(12)		(27)
DEO Commercial Power [Member] | Duke Energy Ohio [Member]
Unaffiliated Revenues	342	379	796	794
Segment Income	17	6	61	34
Franchised Electric & Gas [Member] | Duke Energy Ohio [Member]
Unaffiliated Revenues	387	315	860	779
Segment Income	$ 30	$ 29	$ 64	$ 77

XML

Fair Value Of Financial Assets And Liabilities (Narrative) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Auction rate securities sold in period	$ 54	$ 28	$ 63	$ 27
Duke Energy Carolinas [Member]
Auction rate securities sold in period	8		8
Auction Rate Securities [Member]
Auction rate securities sold in period			$ (39)
Auction Rate Securities [Member] | Income Approach Valuation Technique [Member] | Risk Adjusted Discount Rates [Member]
Level 3 ARS Assumptions	5.30%		5.30%
Auction Rate Securities [Member] | Income Approach Valuation Technique [Member] | Interest Rate Current [Member]
Level 3 ARS Assumptions	0.50%		0.50%

XML

Variable Interest Entities (Schedule Of Non-Consolidated VIEs) (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Investments in equity method unconsolidated affiliates	$ 450	$ 460
Intangibles	357	363
Other Current Liabilities	1,434	1,091
Deferred Credits and Other Liabilities	15,922	15,454
Duke Energy Carolinas [Member]
Other Current Liabilities	481	398
Deferred Credits and Other Liabilities	10,150	9,736
Duke Energy Ohio [Member]
Intangibles	136	143
Other Current Liabilities	117	122
Deferred Credits and Other Liabilities	2,507	2,490
Duke Energy Indiana [Member]
Intangibles	44	50
Other Current Liabilities	132	93
Deferred Credits and Other Liabilities	2,004	2,079
Non-Consolidated VIEs [Member]
Investments in equity method unconsolidated affiliates	226	235
Intangibles	108	111
Total Assets	334	346
Other Current Liabilities	3	3
Deferred Credits and Other Liabilities	17	18
Total Liabilities	20	21
Net Assets	314	325
Non-Consolidated VIEs [Member] | DukeNet [Member]
Investments in equity method unconsolidated affiliates	122	129
Total Assets	122	129
Net Assets	122	129
Non-Consolidated VIEs [Member] | Renewables [Member]
Investments in equity method unconsolidated affiliates	79	81
Total Assets	79	81
Net Assets	79	81
Non-Consolidated VIEs [Member] | Other VIEs [Member]
Investments in equity method unconsolidated affiliates	25	25
Intangibles	108	111
Total Assets	133	136
Other Current Liabilities	3	3
Deferred Credits and Other Liabilities	17	18
Total Liabilities	20	21
Net Assets	113	115
Non-Consolidated VIEs [Member] | Duke Energy Ohio [Member]
Accounts Receivable, Net	101	129
Intangibles	108	111
Total Assets	209	240
Net Assets	209	240
Non-Consolidated VIEs [Member] | Duke Energy Indiana [Member]
Accounts Receivable, Net	143	139
Total Assets	143	139
Net Assets	$ 143	$ 139

XML

Investments In Debt And Equity Securities (Available-For-Sale Investments) (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2012		Dec. 31, 2011
Gross Unrealized Holding Gains	$ 562		$ 483
Gross Unrealized Holding Losses	31		42
Estimated Fair Value	2,770		2,549
Other Classification [Member]
Gross Unrealized Holding Gains	4		4
Gross Unrealized Holding Losses	10		19
Estimated Fair Value	492		415
Duke Energy Carolinas [Member] | Ndtf [Member]
Gross Unrealized Holding Gains	550	[1]	473	[1]
Gross Unrealized Holding Losses	20	[1]	22	[1]
Estimated Fair Value	2,204	[1]	2,060	[1]
Duke Energy Indiana [Member] | Grantor Trust [Member]
Gross Unrealized Holding Gains	8	[1]	6	[1]
Gross Unrealized Holding Losses	1	[1]	1	[1]
Estimated Fair Value	74	[1]	74	[1]
Equity Securities [Member] | Other Classification [Member]
Gross Unrealized Holding Gains	1		0
Gross Unrealized Holding Losses	1		1
Estimated Fair Value	20		14
Equity Securities [Member] | Duke Energy Carolinas [Member] | Ndtf [Member]
Gross Unrealized Holding Gains	522		443
Gross Unrealized Holding Losses	17		16
Estimated Fair Value	1,470		1,337
Equity Securities [Member] | Duke Energy Indiana [Member] | Grantor Trust [Member]
Gross Unrealized Holding Gains	7		5
Gross Unrealized Holding Losses	1		1
Estimated Fair Value	46		46
Corporate Debt Securities [Member] | Other Classification [Member]
Gross Unrealized Holding Gains	2		1
Gross Unrealized Holding Losses	0		1
Estimated Fair Value	295		241
Corporate Debt Securities [Member] | Duke Energy Carolinas [Member] | Ndtf [Member]
Gross Unrealized Holding Gains	10		8
Gross Unrealized Holding Losses	2		2
Estimated Fair Value	221		205
Municipal Bonds [Member] | Other Classification [Member]
Gross Unrealized Holding Gains	0		0
Gross Unrealized Holding Losses	0		0
Estimated Fair Value	1		0
Municipal Bonds [Member] | Duke Energy Carolinas [Member] | Ndtf [Member]
Gross Unrealized Holding Gains	2		2
Gross Unrealized Holding Losses	0		0
Estimated Fair Value	73		51
Municipal Bonds [Member] | Duke Energy Indiana [Member] | Grantor Trust [Member]
Gross Unrealized Holding Gains	1		1
Gross Unrealized Holding Losses	0		0
Estimated Fair Value	28		28
U.S. Government Bonds [Member] | Other Classification [Member]
Gross Unrealized Holding Gains	0		1
Gross Unrealized Holding Losses	0		0
Estimated Fair Value	28		21
U.S. Government Bonds [Member] | Duke Energy Carolinas [Member] | Ndtf [Member]
Gross Unrealized Holding Gains	12		16
Gross Unrealized Holding Losses	0		0
Estimated Fair Value	277		306
Auction Rate Securities [Member] | Other Classification [Member]
Gross Unrealized Holding Gains	0		0
Gross Unrealized Holding Losses	9		17
Estimated Fair Value	41		71
Auction Rate Securities [Member] | Duke Energy Carolinas [Member] | Other Classification [Member]
Gross Unrealized Holding Losses	1	[2]	3	[2]
Estimated Fair Value	6	[2]	12	[2]
Other Debt Securities [Member] | Other Classification [Member]
Gross Unrealized Holding Gains	1		2
Gross Unrealized Holding Losses	0		0
Estimated Fair Value	107		68
Other Debt Securities [Member] | Duke Energy Carolinas [Member] | Ndtf [Member]
Gross Unrealized Holding Gains	4		4
Gross Unrealized Holding Losses	1		4
Estimated Fair Value	$ 163		$ 161

[1] Unrealized losses on investments within the Duke Energy Carolinas NDTF and Duke Energy Indiana grantor trust are deferred as regulatory assets pursuant to regulatory accounting treatment.

[2] At June 30, 2012 and December 31, 2011, $6 million and $12 million of these securities were held by Duke Energy Carolinas, respectively. Gross unrealized holding gains on these securities held by Duke Energy Carolinas were insignificant at both June 30, 2012 and December 31, 2011. Gross unrealized holding losses on these securities held by Duke Energy Carolinas were $1 million at June 30, 2012 and $3 million at December 31, 2011.

XML

Variable Interest Entities (Fair Value Assumptions)(Details)	6 Months Ended	12 Months Ended
	Jun. 30, 2012	Dec. 31, 2011
Duke Energy Ohio [Member]
Assumption for Fair Value of Assets or Liabilities that relate to Transferor's Continuing Involvement, Expected Credit Losses	0.80%	0.80%
Assumption for Fair Value of Assets or Liabilities that relate to Transferor's Continuing Involvement, Discount Rate	1.30%	2.60%
CRC Receivable Turnover Rate	12.70%	12.70%
Duke Energy Indiana [Member]
Assumption for Fair Value of Assets or Liabilities that relate to Transferor's Continuing Involvement, Expected Credit Losses	0.40%	0.40%
Assumption for Fair Value of Assets or Liabilities that relate to Transferor's Continuing Involvement, Discount Rate	1.30%	2.60%
CRC Receivable Turnover Rate	10.20%	10.20%

XML

Fair Value Of Financial Assets And Liabilities (Fair Value Measurement Amounts For Assets And Liabilities) (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Investments in available-for-sale auction rate securities, fair value	$ 41	$ 71
Nuclear decommissioning trust fund equity securities	1,470	1,337
Nuclear decommissioning trust fund debt securities	734	723
Other long-term trading and available-for-sale equity securities	74	68
Other trading and available-for sale debt securities	481	382
Derivative assets	89	74
Assets, Fair Value Disclosure, Total	2,889	2,655
Derivative liabilities	(298)	(264)
Net Assets Fair Value, Total	2,591	2,391
Duke Energy Carolinas [Member]
Investments in available-for-sale auction rate securities, fair value	6	12
Nuclear decommissioning trust fund equity securities	1,470	1,337
Nuclear decommissioning trust fund debt securities	734	723
Derivative assets	1	1
Assets, Fair Value Disclosure, Total	2,211	2,073
Duke Energy Ohio [Member]
Derivative assets	74	56
Assets, Fair Value Disclosure, Total	74	56
Derivative liabilities	(30)	(30)
Net Assets Fair Value, Total	44	26
Duke Energy Indiana [Member]
Available-for-sale Securities, Equity Securities	46	46
Available-for-sale Securities, Debt Securities	29	28
Derivative assets	23	4
Assets, Fair Value Disclosure, Total	98	78
Derivative liabilities	(76)	(69)
Net Assets Fair Value, Total	22	9
Level 1 [Member]
Nuclear decommissioning trust fund equity securities	1,406	1,285
Nuclear decommissioning trust fund debt securities	78	109
Other long-term trading and available-for-sale equity securities	66	61
Other trading and available-for sale debt securities	28	22
Derivative assets	16	43
Assets, Fair Value Disclosure, Total	1,594	1,520
Derivative liabilities	(12)	(36)
Net Assets Fair Value, Total	1,582	1,484
Level 1 [Member] | Duke Energy Carolinas [Member]
Nuclear decommissioning trust fund equity securities	1,406	1,285
Nuclear decommissioning trust fund debt securities	78	109
Assets, Fair Value Disclosure, Total	1,484	1,394
Level 1 [Member] | Duke Energy Ohio [Member]
Derivative assets	62	42
Assets, Fair Value Disclosure, Total	62	42
Derivative liabilities	(11)	(10)
Net Assets Fair Value, Total	51	32
Level 1 [Member] | Duke Energy Indiana [Member]
Available-for-sale Securities, Equity Securities	46	46
Derivative assets	1
Assets, Fair Value Disclosure, Total	47	46
Derivative liabilities		(1)
Net Assets Fair Value, Total	47	45
Level 2 [Member]
Nuclear decommissioning trust fund equity securities	46	46
Nuclear decommissioning trust fund debt securities	610	567
Other long-term trading and available-for-sale equity securities	8	7
Other trading and available-for sale debt securities	453	360
Derivative assets	9	6
Assets, Fair Value Disclosure, Total	1,126	986
Derivative liabilities	(203)	(164)
Net Assets Fair Value, Total	923	822
Level 2 [Member] | Duke Energy Carolinas [Member]
Nuclear decommissioning trust fund equity securities	46	46
Nuclear decommissioning trust fund debt securities	610	567
Derivative assets	1	1
Assets, Fair Value Disclosure, Total	657	614
Level 2 [Member] | Duke Energy Ohio [Member]
Derivative assets	4	5
Assets, Fair Value Disclosure, Total	4	5
Derivative liabilities	(9)	(8)
Net Assets Fair Value, Total	(5)	(3)
Level 2 [Member] | Duke Energy Indiana [Member]
Available-for-sale Securities, Debt Securities	29	28
Derivative assets	0
Assets, Fair Value Disclosure, Total	29	28
Derivative liabilities	(76)	(68)
Net Assets Fair Value, Total	(47)	(40)
Level 3 [Member]
Investments in available-for-sale auction rate securities, fair value	41	71
Nuclear decommissioning trust fund equity securities	18	6
Nuclear decommissioning trust fund debt securities	46	47
Other long-term trading and available-for-sale equity securities	0	0
Other trading and available-for sale debt securities	0	0
Derivative assets	64	25
Assets, Fair Value Disclosure, Total	169	149
Derivative liabilities	(83)	(64)
Net Assets Fair Value, Total	86	85
Level 3 [Member] | Duke Energy Carolinas [Member]
Investments in available-for-sale auction rate securities, fair value	6	12
Nuclear decommissioning trust fund equity securities	18	6
Nuclear decommissioning trust fund debt securities	46	47
Assets, Fair Value Disclosure, Total	70	65
Level 3 [Member] | Duke Energy Ohio [Member]
Derivative assets	8	9
Assets, Fair Value Disclosure, Total	8	9
Derivative liabilities	(10)	(12)
Net Assets Fair Value, Total	(2)	(3)
Level 3 [Member] | Duke Energy Indiana [Member]
Derivative assets	22	4
Assets, Fair Value Disclosure, Total	22	4
Net Assets Fair Value, Total	$ 22	$ 4

XML

Risk Management, Derivative Instruments And Hedging Activities (Location And Fair Value Amounts Of Derivatives Reflected In The Condensed Consolidated Balance Sheets) (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2012		Dec. 31, 2011
Location and fair value amounts of derivatives (Asset)	$ 266		$ 283
Location and fair value amounts of derivatives (Liability)	475		473
Duke Energy Ohio [Member]
Location and fair value amounts of derivatives (Asset)	256		271
Location and fair value amounts of derivatives (Liability)	212		245
Designated As Hedging Instrument [Member]
Location and fair value amounts of derivatives (Asset)	4
Location and fair value amounts of derivatives (Liability)	113
Designated As Hedging Instrument [Member] | Duke Energy Ohio [Member]
Location and fair value amounts of derivatives (Asset)	4
Designated As Hedging Instrument [Member] | Interest Rate Contract [Member]
Location and fair value amounts of derivatives (Asset)			6
Location and fair value amounts of derivatives (Liability)			87
Designated As Hedging Instrument [Member] | Interest Rate Contract [Member] | Duke Energy Ohio [Member]
Location and fair value amounts of derivatives (Asset)			5
Designated As Hedging Instrument [Member] | Interest Rate Contract [Member] | Current Assets, Other [Member]
Location and fair value amounts of derivatives (Asset)	4		4
Designated As Hedging Instrument [Member] | Interest Rate Contract [Member] | Current Assets, Other [Member] | Duke Energy Ohio [Member]
Location and fair value amounts of derivatives (Asset)	4		3
Designated As Hedging Instrument [Member] | Interest Rate Contract [Member] | Investments And Other Assets, Other [Member]
Location and fair value amounts of derivatives (Asset)			2
Designated As Hedging Instrument [Member] | Interest Rate Contract [Member] | Investments And Other Assets, Other [Member] | Duke Energy Ohio [Member]
Location and fair value amounts of derivatives (Asset)			2
Designated As Hedging Instrument [Member] | Interest Rate Contract [Member] | Current Liabilities, Other [Member]
Location and fair value amounts of derivatives (Liability)	14		11
Designated As Hedging Instrument [Member] | Interest Rate Contract [Member] | Deferred Credits And Other Liabilities, Other [Member]
Location and fair value amounts of derivatives (Liability)	99		76
Not Designated As Hedging Instrument [Member]
Location and fair value amounts of derivatives (Asset)	262		277
Location and fair value amounts of derivatives (Liability)	362		386
Not Designated As Hedging Instrument [Member] | Duke Energy Ohio [Member]
Location and fair value amounts of derivatives (Asset)	252		266
Location and fair value amounts of derivatives (Liability)	212		245
Not Designated As Hedging Instrument [Member] | Interest Rate Contract [Member] | Current Liabilities, Other [Member]
Location and fair value amounts of derivatives (Liability)	2		2
Not Designated As Hedging Instrument [Member] | Interest Rate Contract [Member] | Current Liabilities, Other [Member] | Duke Energy Ohio [Member]
Location and fair value amounts of derivatives (Liability)	1		1
Not Designated As Hedging Instrument [Member] | Interest Rate Contract [Member] | Deferred Credits And Other Liabilities, Other [Member]
Location and fair value amounts of derivatives (Liability)	84	[1]	75
Not Designated As Hedging Instrument [Member] | Interest Rate Contract [Member] | Deferred Credits And Other Liabilities, Other [Member] | Duke Energy Ohio [Member]
Location and fair value amounts of derivatives (Liability)	8		8
Not Designated As Hedging Instrument [Member] | Interest Rate Contract [Member] | Deferred Credits And Other Liabilities, Other [Member] | Duke Energy Indiana [Member]
Location and fair value amounts of derivatives (Liability)	76		67
Not Designated As Hedging Instrument [Member] | Commodity Contract [Member] | Current Assets, Other [Member]
Location and fair value amounts of derivatives (Asset)	192	[2]	81
Location and fair value amounts of derivatives (Liability)	124		31
Not Designated As Hedging Instrument [Member] | Commodity Contract [Member] | Current Assets, Other [Member] | Duke Energy Ohio [Member]
Location and fair value amounts of derivatives (Asset)	184		79
Location and fair value amounts of derivatives (Liability)	131		39
Not Designated As Hedging Instrument [Member] | Commodity Contract [Member] | Current Assets, Other [Member] | Duke Energy Indiana [Member]
Location and fair value amounts of derivatives (Asset)	23
Not Designated As Hedging Instrument [Member] | Commodity Contract [Member] | Investments And Other Assets, Other [Member]
Location and fair value amounts of derivatives (Asset)	17		35
Location and fair value amounts of derivatives (Liability)			17
Not Designated As Hedging Instrument [Member] | Commodity Contract [Member] | Investments And Other Assets, Other [Member] | Duke Energy Ohio [Member]
Location and fair value amounts of derivatives (Asset)	18		29
Location and fair value amounts of derivatives (Liability)	1		18
Not Designated As Hedging Instrument [Member] | Commodity Contract [Member] | Current Liabilities, Other [Member]
Location and fair value amounts of derivatives (Asset)	4		136
Location and fair value amounts of derivatives (Liability)	49		168
Not Designated As Hedging Instrument [Member] | Commodity Contract [Member] | Current Liabilities, Other [Member] | Duke Energy Ohio [Member]
Location and fair value amounts of derivatives (Asset)	3		136
Location and fair value amounts of derivatives (Liability)	12		146
Not Designated As Hedging Instrument [Member] | Commodity Contract [Member] | Deferred Credits And Other Liabilities, Other [Member]
Location and fair value amounts of derivatives (Asset)	49		25
Location and fair value amounts of derivatives (Liability)	103		93
Not Designated As Hedging Instrument [Member] | Commodity Contract [Member] | Deferred Credits And Other Liabilities, Other [Member] | Duke Energy Ohio [Member]
Location and fair value amounts of derivatives (Asset)	47		22
Location and fair value amounts of derivatives (Liability)	$ 59		$ 33

[1] Amount at Duke Energy includes $76 million related to interest rate swaps at Duke Energy Indiana which receive regulatory accounting treatment.

[2] Amount at Duke Energy includes $23 million related to commodity contracts at Duke Energy Indiana which receive regulatory accounting treatment.

XML

Stock-Based Compensation

6 Months Ended

Jun. 30, 2012

Stock-Based Compensation [Abstract]

Stock-Based Compensation

13. Stock-Based Compensation

For employee awards, equity classified stock-based compensation cost is measured at the service inception date or the grant date, based on the estimated achievement of certain performance metrics or the fair value of the award, and is recognized as expense or capitalized as a component of property, plant and equipment over the requisite service period.

Duke Energy recorded pre-tax stock-based compensation expense for the three and six months endedJune 30, 2012 and 2011 as follows:

		Three Months Ended				Six Months Ended
		June 30,				June 30,
(in millions)		2012		2011		2012		2011
Stock Options		$	―	$	―	$	2	$	2
Restricted Stock Unit Awards			6		6		14		14
Performance Awards			5		5		3		11
Total(a)(b)(c)(d)		$	11	$	11	$	19	$	27
(a)	Excludes stock-based compensation cost capitalized of $1 million for each of the three months ended June 30, 2012 and 2011.
(b)	Excludes stock-based compensation cost capitalized of $1 million and $2 million for the six months ended June 30, 2012 and 2011, respectively.
(c)	The tax benefit associated with the recorded expense was $4 million and $5 million for the three months ended June 30, 2012 and 2011, respectively.
(d)	The tax benefit associated with the recorded expense was $7 million and $11 million for the six months ended June 30, 2012 and 2011, respectively.

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Organization And Basis Of Presentation (Schedule Of Unbilled Revenues With Restricted Receivables) (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Unbilled revenues within restricted receivables of variable interest entities and receivables	$ 769	$ 674
Duke Energy Carolinas [Member]
Unbilled revenues within restricted receivables of variable interest entities and receivables	335	293
Duke Energy Ohio [Member]
Unbilled revenues within restricted receivables of variable interest entities and receivables	51	50
Unbilled revenues sold to CRC	80	89
Duke Energy Indiana [Member]
Unbilled revenues within restricted receivables of variable interest entities and receivables	8	2
Unbilled revenues sold to CRC	$ 140	$ 115

XML

Investments In Debt And Equity Securities (Tables)

6 Months Ended

Jun. 30, 2012

Unrealized Losses Of Available-For-Sale Debt And Equity Securities In A Continuous Loss Position

		June 30, 2012						December 31, 2011
				Unrealized		Unrealized				Unrealized		Unrealized
				Loss		Loss				Loss		Loss
				Position		Position				Position		Position
(in millions)		Fair Value		>12 months		<12 months		Fair Value		>12 months		<12 months
Duke Energy Carolinas NDTF
Equity Securities		$	117	$	7	$	11	$	111	$	4	$	12
Corporate Debt Securities			29		―		1		57		1		1
Municipal Bonds			21		―		―		―		―		―
U.S. Government Bonds			27		―		―		8		―		―
Other			78		―		1		113		1		3
Total Duke Energy Carolinas NDTF(a)		$	272	$	7	$	13	$	289	$	6	$	16
Duke Energy Indiana Grantor Trust
Equity Securities		$	8	$	―	$	1	$	8	$	―	$	1
Municipal Bonds			10		―		―		3		―		―
Total Duke Energy Indiana Grantor Trust(a)		$	18	$	―	$	1	$	11	$	―	$	1
Other Investments
Equity Securities		$	6	$	1	$	―	$	4	$	1	$	―
Corporate Debt Securities			243		―		―		201		1		―
Municipal Bonds			1		―		―		―		―		―
U.S. Government Bonds			12		―		―		―		―		―
Other			11		―		―		8		―		―
Auction Rate Securities(b)			41		9		―		71		17		―
Total Other Investments		$	314	$	10	$	―	$	284	$	19	$	―
Total Duke Energy Investments		$	604	$	17	$	14	$	584	$	25	$	17
(a)	Unrealized losses on investments within the Duke Energy Carolinas NDTF and Duke Energy Indiana grantor trust are deferred as regulatory assets pursuant to regulatory accounting treatment.
(b)	At June 30, 2012 and December 31, 2011, $6 million and $12 million of these securities, respectively, were held by Duke Energy
	Carolinas. The gross unrealized losses on these securities held by Duke Energy Carolinas which were in an unrealized loss position greater than 12 months were $1 million at June 30, 2012 and $3 million at December 31, 2011.

Summarizes The Maturity Date For Debt Securities

	The table below summarizes the maturity date for debt securities held by Duke Energy, Duke Energy Carolinas, and Duke Energy Indiana.
(in millions)		< 1 Year		1-5 Years		6-10 Years		Thereafter
Duke Energy(a)		$	164	$	345	$	212	$	471
Duke Energy Carolinas(a)		$	45	$	146	$	174	$	369
Duke Energy Indiana		$	―	$	21	$	5	$	2
(a)	Excludes auction rate securities based on the stated maturity date. See Note ##FVFAL for information about fair value measurements related to investments in auction rate debt securities.

Available-For-Sale Investments

	The estimated fair values of short-term and long-term investments for Duke Energy, Duke Energy Carolinas and Duke Energy
Indiana are as follows (in millions):
		June 30, 2012						December 31, 2011
(in millions)		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses		Estimated Fair Value		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses		Estimated Fair Value
Duke Energy Carolinas NDTF
Equity Securities		$	522	$	17	$	1,470	$	443	$	16	$	1,337
Corporate Debt Securities			10		2		221		8		2		205
Municipal Bonds			2		―		73		2		―		51
U.S. Government Bonds			12		―		277		16		―		306
Other			4		1		163		4		4		161
Total Duke Energy Carolinas NDTF(a)		$	550	$	20	$	2,204	$	473	$	22	$	2,060
Duke Energy Indiana Grantor Trust
Equity Securities		$	7	$	1	$	46	$	5	$	1	$	46
Municipal Bonds			1		―		28		1		―		28
Total Duke Energy Indiana Grantor Trust(a)		$	8	$	1	$	74	$	6	$	1	$	74
Other Investments
Equity Securities		$	1	$	1	$	20	$	―	$	1	$	14
Corporate Debt Securities			2		―		295		1		1		241
Municipal Bonds			―		―		1		―		―		―
U.S. Government Bonds			―		―		28		1		―		21
Other			1		―		107		2		―		68
Auction Rate Securities(b)			―		9		41		―		17		71
Total Other Investments		$	4	$	10	$	492	$	4	$	19	$	415
Total Duke Energy Investments		$	562	$	31	$	2,770	$	483	$	42	$	2,549
(a)	Unrealized losses on investments within the Duke Energy Carolinas NDTF and Duke Energy Indiana grantor trust are deferred as regulatory assets pursuant to regulatory accounting treatment.
(b)	At June 30, 2012 and December 31, 2011, $6 million and $12 million of these securities were held by Duke Energy Carolinas, respectively. Gross unrealized holding gains on these securities held by Duke Energy Carolinas were insignificant at both June 30, 2012 and December 31, 2011. Gross unrealized holding losses on these securities held by Duke Energy Carolinas were $1 million at June 30, 2012 and $3 million at December 31, 2011.

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Risk Management, Derivative Instruments And Hedging Activities (Information Regarding Cash Collateral Under Master Netting Arrangements) (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Amounts offset against derivative positions on the net condensed Consolidated Balance Sheets, Receivables	$ 0	$ 10
Amounts not offset against net derivative positions on the Condensed Consolidated Balance Sheets, Receivables	73	30
Amounts offset against derivative positions on the net condensed Consolidated Balance Sheets, Payables	1
Duke Energy Ohio [Member]
Amounts offset against derivative positions on the net condensed Consolidated Balance Sheets, Receivables	0	9
Amounts not offset against net derivative positions on the Condensed Consolidated Balance Sheets, Receivables	$ 49	$ 28

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Income Taxes And Other Taxes (Schedule Of Excise Taxes) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Excise taxes	$ 70	$ 69	$ 147	$ 147
Duke Energy Carolinas [Member]
Excise taxes	39	37	78	73
Duke Energy Ohio [Member]
Excise taxes	23	25	53	59
Duke Energy Indiana [Member]
Excise taxes	$ 8	$ 7	$ 16	$ 15

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Commitments and Contingencies (Table)

6 Months Ended

Jun. 30, 2012

Commitments And Contingencies [Abstract]

Schedule of Litigation Reserves and Related Insurance Recoveries [Table Text Block]

(in millions)		June 30, 2012		December 31, 2011
Reserves for Legal Matters(a)
Duke Energy(b)		$	792	$	810
Duke Energy Carolinas(b)			776		801
Duke Energy Indiana			8		4
Probable Insurance Recoveries(c)
Duke Energy(d)		$	813	$	813
Duke Energy Carolinas(d)			813		813
(a)	Reserves are classified in the respective Condensed Consolidated Balance Sheets in Other within Deferred Credits and Other Liabilities and Other within Current Liabilities.
(b)	Includes reserves for aforementioned asbestos-related injuries and damages claims.
(c)	Insurance recoveries are classified in the respective Condensed Consolidated Balance Sheets in Other within Investments and Other Assets and Receivables.
(d)	Relates to recoveries associated with aforementioned asbestos-related injuries and damages claims.

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Acquisitions and Sales of Other Assets (Megawatts per hour sold) (Details)	6 Months Ended
	Jun. 30, 2012 MWh
Summer off-peak hours	800
Summer on-peak hours	475
Winter off-peak hours	225
Winter on-peak hours	25
Duke Energy Carolinas [Member]
Summer off-peak hours	300
Summer on-peak hours	150
Winter off-peak hours	225
Winter on-peak hours	25
Progress Energy Carolinas [Member]
Summer off-peak hours	500
Summer on-peak hours	325
Winter off-peak hours	0
Winter on-peak hours	0

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Goodwill (Goodwill By Reportable Operating Segment) (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Dec. 31, 2011
Goodwill	$ 4,720	$ 4,720
Goodwill accumulated impairment charges	(871)	(871)
Foreign Exchange and Other Changes	(7)
Goodwill as adjusted for accumulated impairment charges	3,842	3,849
Duke Energy Ohio [Member]
Goodwill	2,325	2,325
Goodwill accumulated impairment charges	(1,404)	(1,404)
Goodwill as adjusted for accumulated impairment charges	921	921
USFE&G [Member]
Goodwill	3,483	3,483
Goodwill as adjusted for accumulated impairment charges	3,483	3,483
Commercial Power [Member]
Goodwill	940	940
Goodwill accumulated impairment charges	(871)	(871)
Goodwill as adjusted for accumulated impairment charges	69	69
International [Member]
Goodwill	297	297
Foreign Exchange and Other Changes	(7)
Goodwill as adjusted for accumulated impairment charges	290	297
Franchised Electric & Gas [Member] | Duke Energy Ohio [Member]
Goodwill	1,137	1,137
Goodwill accumulated impairment charges	(216)	(216)
Goodwill as adjusted for accumulated impairment charges	921	921
DEO Commercial Power [Member] | Duke Energy Ohio [Member]
Goodwill	1,188	1,188
Goodwill accumulated impairment charges	(1,188)	(1,188)
Goodwill as adjusted for accumulated impairment charges	$ 0	$ 0

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Regulatory Matters (Schedule of MISO Exit fees)(Details) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2012
Restructuring Liability, beginning balance	$ 32
Cash Reductions	(8)
Restructuring Reserve, Period Expense	(1)
Restructuring Liability, ending balance	23
Duke Energy Ohio [Member] | Regional Transmission Organization Realignment [Member]
Restructuring Liability, beginning balance	110
Cash Reductions	(15)
Restructuring Reserve Period Deferral	2
Restructuring Liability, ending balance	$ 97

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Severance (Tables)

6 Months Ended

Jun. 30, 2012

Severance [Abstract]

Schedule Of Severance Liability

	Balance at		Provision /		Cash		Balance at
(in millions)	December 31, 2011		Adjustments		Reductions		June 30, 2012
Duke Energy	$	32	$	(1)	$	(8)	$	23

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Condensed Consolidated Statements Of Equity (USD $) In Millions, except Share data	Total	Common Stock [Member]	Additional Paid In Capital [Member]	Retained Earnings [Member]	Foreign Currency Adjustments [Member]	Net Gains (Losses) on Cash Flow Hedges [Member]	Other [Member]	Pension And OPEB Related Adjustments To AOCI [Member]	Common Stockholders' Equity [Member]	Noncontrolling Interest [Member]
Balance at Dec. 31, 2010	$ 22,653	$ 1	$ 21,023	$ 1,496	$ 97	$ (18)	$ (17)	$ (60)	$ 22,522	$ 131
Balance (in shares) at Dec. 31, 2010	443,000,000
Net income	954			946					946	8
Other comprehensive income, net of tax	90				93	(3)	4	(7)	87	3
Total comprehensive income	1,044
Common stock issuances, including dividend reinvestment and employee benefits (in shares)	1,000,000
Common stock issuances, including dividend reinvestment and employee benefits	22		22						22
Common stock dividends	994			994					994
Changes in noncontrolling interest in subsidiaries	(23)									(23)
Balance at Jun. 30, 2011	22,702	1	21,045	1,448	190	(21)	(13)	(67)	22,583	119
Balance (in shares) at Jun. 30, 2011	444,000,000
Balance at Dec. 31, 2011	22,865	1	21,132	1,873	(45)	(71)	(9)	(109)	22,772	93
Balance (in shares) at Dec. 31, 2011	445,000,000
Net income	747			739					739	8
Other comprehensive income, net of tax	(90)				(83)	(15)	6	6	(86)	(4)
Total comprehensive income	657
Common stock issuances, including dividend reinvestment and employee benefits (in shares)	1,000,000
Common stock issuances, including dividend reinvestment and employee benefits	8		8						8
Common stock dividends	1,014			1,014					1,014
Changes in noncontrolling interest in subsidiaries	0									0
Balance at Jun. 30, 2012	$ 22,516	$ 1	$ 21,140	$ 1,598	$ (128)	$ (86)	$ (3)	$ (103)	$ 22,419	$ 97
Balance (in shares) at Jun. 30, 2012	446,000,000

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Commitments And Contingencies (Narrative) (Details) (USD $)	6 Months Ended		60 Months Ended
	Jun. 30, 2012		Dec. 31, 2016	Dec. 31, 2011
Estimated cost of installing synthetic caps and liners at exisitng and new CCP landfills			$ 259,000,000
Probable insurance recoveries	813,000,000	[1],[2]		813,000,000	[1],[2]
Reserves for legal matters	792,000,000	[3],[4]		810,000,000	[3],[4]
Duke Energy Carolinas [Member]
Estimated cost of installing synthetic caps and liners at exisitng and new CCP landfills			78,000,000
Federal Clean Coal Tax Credits	125,000,000
Probable insurance recoveries	813,000,000	[1],[2]		813,000,000	[1],[2]
Reserves for legal matters	776,000,000	[3],[4]		801,000,000	[3],[4]
Duke Energy Ohio [Member]
Reserve for remediation work at former MGP sites	22,000,000
Amount of deferred costs related to former MGP sites	75,000,000
Estimated cost of installing synthetic caps and liners at exisitng and new CCP landfills			63,000,000
Duke Energy Indiana [Member]
Estimated cost of installing synthetic caps and liners at exisitng and new CCP landfills			118,000,000
Federal Clean Coal Tax Credits	134,000,000
Reserves for legal matters	8,000,000	[3]		4,000,000	[3]
Paranapanema Lawsuit [Member]
Additional assessment under resolutions promulgated by ANEEL	59,000,000
Fines imposed by ANEEL due to DEIGP's refusal to pay additional assessments	9,000,000
Pre-tax charge recorded	33,000,000
Brazil Expansion Lawsuit [Member]
Obligation to expand installed generation capacity, percent	15.00%
Crescent Litigation [Member]
Amount of claim(s)	1,200,000,000
Asbestos Issue [Member] | Duke Energy Carolinas [Member]
Number of nonmalignant asbestos related claims	188
Cumulative relief sought for nonmalignant asbestos related claims	47,000,000
Number of malignant asbestos related claims	58
Cumulative relief sought for malignant asbestos related claims	21,000,000
Asbestos-related injuries and damages reserves	776,000,000			801,000,000
Asbestos related injuries and damages self insured retention	476,000,000
Policy limit for potential future insurance recoveries for indemnification and medical cost claim payments in excess of self insured limit	968,000,000
Probable insurance recoveries	(813,000,000)			(813,000,000)
Minimum [Member]
Estimated cost of complying with recently issued and proposed EPA regulations	4,500,000,000
Minimum [Member] | Alaskan Global Warming Lawsuit [Member]
Amount of claim(s)	95,000,000
Maximum [Member]
Estimated cost of complying with recently issued and proposed EPA regulations	5,000,000,000
Maximum [Member] | Alaskan Global Warming Lawsuit [Member]
Amount of claim(s)	$ 400,000,000

[1] Insurance recoveries are classified in the respective Condensed Consolidated Balance Sheets in Other within Investments and Other Assets and Receivables.

[2] Relates to recoveries associated with aforementioned asbestos-related injuries and damages claims.

[3] Reserves are classified in the respective Condensed Consolidated Balance Sheets in Other within Deferred Credits and Other Liabilities and Other within Current Liabilities.

[4] Includes reserves for aforementioned asbestos-related injuries and damages claims.

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Variable Interest Entities (Tables)

6 Months Ended

12 Months Ended

Jun. 30, 2012

Dec. 31, 2011

Schedule Of Consolidated VIEs

		December 31, 2011
		Duke Energy
		Receivables
		Financing
(in millions)		LLC (DERF)(a)		CRC		CinCapV		Renewables		Other		Total
Restricted Receivables of VIEs		$	581	$	547	$	13	$	13	$	3	$	1,157
Other Current Assets			―		―		2		124		8		134
Intangibles, net			―		―		―		12		―		12
Restricted Other Assets of VIEs			―		―		65		10		60		135
Other Assets			―		―		14		36		―		50
Property, Plant and Equipment, Cost			―		―		―		913		―		913
Accumulated Depreciation and Amortization			―		―		―		(62)		―		(62)
Other Deferred Debits			―		―		―		24		2		26
	Total Assets		581		547		94		1,070		73		2,365
Accounts Payable			―		―		―		1		1		2
Non-Recourse Notes Payable			―		273		―		―		―		273
Taxes Accrued			―		―		―		3		―		3
Current Maturities of Long-Term Debt			―		―		11		49		5		65
Other Current Liabilities			―		―		3		59		―		62
Non-Recourse Long-Term Debt			300		―		60		528		61		949
Deferred Income Taxes			―		―		―		160		―		160
Asset Retirement Obligation			―		―		―		13		―		13
Other Liabilities			―		―		13		37		―		50
	Total Liabilities		300		273		87		850		67		1,577
Noncontrolling Interests			―		―		―		―		1		1
Net Assets of Consolidated VIEs		$	281	$	274	$	7	$	220	$	5	$	787
(a)	DERF is a wholly owned limited liability company of Duke Energy Carolinas.

CRC Fair Value Assumptions

	Duke Energy Ohio				Duke Energy Indiana
	2012		2011		2012		2011
Anticipated credit loss ratio	0.8	%	0.8	%	0.4	%	0.4	%
Discount rate	1.3	%	2.6	%	1.3	%	2.6	%
Receivable turnover rate	12.7	%	12.7	%	10.2	%	10.2	%

CRC Receivables Sold

	The following table shows the gross and net receivables sold:
		Duke Energy Ohio				Duke Energy Indiana
(in millions)		June 30, 2012		December 31, 2011		June 30, 2012		December 31, 2011
Receivables sold		$	251	$	302	$	307	$	279
Less: Retained interests			102		129		143		139
Net receivables sold		$	149	$	173	$	164	$	140

CRC Sales and Cash Flows

	The following tables show the retained interests, sales, and cash flows related to receivables sold:
		Duke Energy Ohio				Duke Energy Indiana
		Three Months Ended June 30,				Three Months Ended June 30,
(in millions)		2012		2011		2012		2011
Sales
Receivables sold		$	490	$	521	$	701	$	630
Loss recognized on sale		$	3	$	5	$	3	$	4
Cash flows
Cash proceeds from receivables sold		$	484	$	560	$	673	$	646
Collection fees received		$	1	$	―	$	1	$	―
Return received on retained interests		$	1	$	3	$	1	$	3

	Duke Energy Ohio				Duke Energy Indiana
	Six Months Ended June 30,				Six Months Ended June 30,
(in millions)	2012		2011		2012		2011
Sales
Receivables sold	$	1,100	$	1,240	$	1,407	$	1,298
Loss recognized on sale	$	7	$	11	$	6	$	8
Cash flows
Cash proceeds from receivables sold	$	1,120	$	1,337	$	1,397	$	1,355
Collection fees received	$	1	$	-	$	1	$	―
Return received on retained interests	$	3	$	7	$	3	$	7

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Related Party Transactions

6 Months Ended

Jun. 30, 2012

Duke Energy Carolinas [Member]

Related Party Transactions

17. Related Party Transactions

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

Duke Energy Carolinas
	Balances due to and due from related parties included on the Condensed Consolidated Balance Sheets, which exclude
assets or liabilities associated with accrued pension and other post-retirement benefits and money pool arrangements, are
presented in the following table:
(in millions)		June 30, 2012		December 31, 2011
Current assets
	Receivables	$	―	$	2
	Other	$	95	$	95
Non-current assets
	Other	$	111	$	111
Current liabilities
	Accounts payable	$	(97)	$	(157)
	Taxes Accrued	$	(10)	$	(14)
Non-current liabilities
	Deferred income taxes	$	(4,891)	$	(4,555)
	Other	$	(64)	$	(64)

	As discussed further in Note ##EBO, Duke Energy Carolinas participates in Duke Energy's qualified pension, non-qualified pension
and other post-retirement benefit plans and is allocated its proportionate share of expenses associated with these plans. Additionally, Duke Energy Carolinas has been allocated accrued pension and other post-retirement benefit obligations as shown in the following table:
(in millions)		June 30, 2012		December 31, 2011
Other current liabilities		$	8	$	8
Accrued pension and other post-retirement benefit obligations			232		248
Total allocated accrued pension and other post-retirement benefit obligations		$	240	$	256

	Amounts related to transactions with related parties included in the Condensed Consolidated Statements of Operations
and Comprehensive Income are presented in the following table:
		Three Months Ended				Six Months Ended
(in millions)		June 30, 2012		June 30, 2011		June 30, 2012		June 30, 2011
Corporate governance and shared service expenses(a)		$	254	$	251	$	489	$	504
Indemnification coverages(b)		$	6	$	5	$	11	$	10
Rental income and other charged expenses, net(c)		$	(5)	$	(2)	$	(7)	$	(4)
Interest expense on money pool(d)		$	1	$	―	$	1	$	―
(a)	Duke Energy Carolinas is charged its proportionate share of corporate governance and other costs by an unconsolidated affiliate that is a consolidated affiliate of Duke Energy. Corporate governance and other shared services costs are primarily related to human resources, employee benefits, legal and accounting fees, as well as other third party costs. These amounts are recorded in Operation, Maintenance and Other within Operating Expenses on the Condensed Consolidated Statements of Operations and Comprehensive Income.
(b)	Duke Energy Carolinas incurs expenses related to certain indemnification coverages through Bison, Duke Energy’s wholly owned captive insurance subsidiary. These expenses are recorded in Operation, Maintenance and Other within Operating Expenses on the Condensed Consolidated Statements of Operations and Comprehensive Income.
(c)	Duke Energy Carolinas records income associated with the rental of office space to a consolidated affiliate of Duke Energy, as well as its proportionate share of certain charged expenses from affiliates of Duke Energy.
(d)	Recorded in Interest Expense on the Condensed Consolidated Statements of Operations and Comprehensive Income. See Note ##DCF for additional information related to money pool.

Duke Energy Ohio [Member]

Related Party Transactions

17. Related Party Transactions

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

Duke Energy Ohio
	Balances due to and due from related parties included in the Condensed Consolidated Balance Sheets, which exclude
assets or liabilities associated with accrued pension and other post-retirement benefits, CRC and money pool arrangements, are presented in the following table:
(in millions)		June 30, 2012		December 31, 2011
Current assets
	Receivables	$	7	$	15
	Other	$	98	$	76
Non-current assets
	Other	$	28	$	22
Current liabilities
	Accounts payable	$	(73)	$	(84)
	Taxes Accrued	$	(4)	$	―
Non-current liabilities
	Deferred income taxes	$	(1,882)	$	(1,798)
	Other	$	(34)	$	―

	As discussed further in Note ##EBO, Duke Energy Ohio participates in Duke Energy’s qualified pension, non-qualified
pension and other post-retirement benefit plans and is allocated its proportionate share of expenses associated with these plans. Additionally, Duke Energy Ohio has been allocated accrued pension and other post-retirement benefit obligations as shown in the following table:
(in millions)		June 30, 2012		December 31, 2011
Other current liabilities		$	4	$	4
Accrued pension and other post-retirement benefit obligations			160		166
Total allocated accrued pension and other post-retirement benefit obligations		$	164	$	170

	Amounts related to transactions with related parties included in the Condensed Consolidated Statements of Operations and
Comprehensive Income are presented in the following table:
		Three Months Ended
(in millions)		June 30, 2012		June 30, 2011
Corporate governance and shared service expenses(a)		$	90	$	95
Indemnification coverages(b)		$	4	$	4
Rental income and other charged expenses, net(c)		$	(1)	$	―
Interest expense on money pool(d)		$	―	$	―
Interest income on money pool(e)		$	―	$	―
CRC interest income(f)		$	2	$	4
(a)	Duke Energy Ohio is charged its proportionate share of corporate governance and other costs by an unconsolidated affiliate that is a consolidated affiliate of Duke Energy. Corporate governance and other shared services costs are primarily related to human resources, employee benefits, legal and accounting fees, as well as other third party costs. These amounts are recorded in Operation, Maintenance and Other within Operating Expenses on the Condensed Consolidated Statements of Operations and Comprehensive Income.
(b)	Duke Energy Ohio incurs expenses related to certain indemnification coverages through Bison, Duke Energy’s wholly-owned captive insurance subsidiary. These expenses are recorded in Operation, Maintenance and Other within Operating Expenses on the Condensed Consolidated Statements of Operations and Comprehensive Income.
(c)	Duke Energy Ohio records income associated with the rental of office space to a consolidated affiliate of Duke Energy, as well as its proportionate share of certain charged expenses from affiliates of Duke Energy.
(d)	Recorded in Interest Expense on the Condensed Consolidated Statements of Operations and Comprehensive Income. See Note ##DCF for additional information related to money pool.
(e)	Recorded in Other Income and Expenses, net on the Condensed Consolidated Statements of Operations and Comprehensive Income. See Note ##DCF for additional information related to money pool.
(f)	As discussed in Note ##VIE, certain trade receivables have been sold by Duke Energy Ohio to CRC, an unconsolidated entity formed by a subsidiary of Duke Energy. The proceeds obtained from the sales of receivables are largely cash but do include a subordinated note from CRC for a portion of the purchase price. The interest income associated with the subordinated note is recorded in Other Income and Expenses, net on the Condensed Consolidated Statements of Operations and Comprehensive Income.

	Amounts related to transactions with related parties included in the Condensed Consolidated Statements of Operations and
Comprehensive Income are presented in the following table:
		Three Months Ended				Six Months Ended
(in millions)		June 30, 2012		June 30, 2011		June 30, 2012		June 30, 2011
Corporate governance and shared service expenses(a)		$	86	$	91	$	176	$	186
Indemnification coverages(b)		$	3	$	4	$	7	$	8
Rental income and other charged expenses, net(c)		$	―	$	―	$	(1)	$	―
CRC interest income(d)		$	1	$	3	$	3	$	7
(a)	Duke Energy Ohio is charged its proportionate share of corporate governance and other costs by an unconsolidated affiliate that is a consolidated affiliate of Duke Energy. Corporate governance and other shared services costs are primarily related to human resources, employee benefits, legal and accounting fees, as well as other third party costs. These amounts are recorded in Operation, Maintenance and Other within Operating Expenses on the Condensed Consolidated Statements of Operations and Comprehensive Income.
(b)	Duke Energy Ohio incurs expenses related to certain indemnification coverages through Bison, Duke Energy’s wholly owned captive insurance subsidiary. These expenses are recorded in Operation, Maintenance and Other within Operating Expenses on the Condensed Consolidated Statements of Operations and Comprehensive Income.
(c)	Duke Energy Ohio records income associated with the rental of office space to a consolidated affiliate of Duke Energy, as well as its proportionate share of certain charged expenses from affiliates of Duke Energy.
(d)	As discussed in Note ##VIE, certain trade receivables have been sold by Duke Energy Ohio to CRC, an unconsolidated entity formed by a subsidiary of Duke Energy. The proceeds obtained from the sales of receivables are largely cash but do include a subordinated note from CRC for a portion of the purchase price. The interest income associated with the subordinated note is recorded in Other Income and Expenses, net on the Condensed Consolidated Statements of Operations and Comprehensive Income.

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

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

Duke Energy Indiana [Member]

Related Party Transactions

17. Related Party Transactions

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

Duke Energy Indiana
	Balances due to and due from related parties included in the Condensed Consolidated Balance Sheets, which exclude assets or
liabilities associated with accrued pension and other post-retirement benefits, CRC and money pool arrangements, are presented in the following table.
(in millions)		June 30, 2012		December 31, 2011
Current assets
	Receivables	$	16	$	18
	Other	$	7	$	13
Non-current assets
	Other	$	2	$	2
Current liabilities
	Accounts payable	$	(38)	$	(72)
	Taxes accrued	$	―	$	(25)
	Other	$	(8)	$	―
Non-current liabilities
	Deferred income taxes	$	(835)	$	(927)
	Other	$	(22)	$	(22)

	As discussed further in Note ##EBO, Duke Energy Indiana participates in Duke Energy’s qualified pension, non-qualified pension
and other post-retirement benefit plans and is allocated its proportionate share of expenses associated with these plans. Additionally, Duke Energy Indiana has been allocated accrued pension and other post-retirement benefit obligations as shown in the following table:
(in millions)		June 30, 2012		December 31, 2011
Other current liabilities		$	2	$	2
Accrued pension and other post-retirement benefit obligations			222		231
Total allocated accrued pension and other post-retirement benefit obligations		$	224	$	233

	Amounts related to transactions with related parties included in the Condensed Consolidated Statements of Operations and
Comprehensive Income are presented in the following table:
		Three Months Ended				Six Months Ended
(in millions)		June 30, 2012		June 30, 2011		June 30, 2012		June 30, 2011
Corporate governance and shared service expenses(a)		$	98	$	99	$	199	$	206
Indemnification coverages(b)		$	2	$	2	$	4	$	4
Rental income and other charged expenses, net(c)		$	―	$	2	$	(1)	$	3
Interest expense on money pool(d)		$	1	$	―	$	1	$	―
CRC interest income(e)		$	1	$	3	$	3	$	7
(a)	Duke Energy Indiana is charged its proportionate share of corporate governance and other costs by an unconsolidated affiliate that is a consolidated affiliate of Duke Energy. Corporate governance and other shared services costs are primarily related to human resources, employee benefits, legal and accounting fees, as well as other third party costs. These amounts are recorded in Operation, Maintenance and Other within Operating Expenses on the Condensed Consolidated Statements of Operations and Comprehensive Income.
(b)	Duke Energy Indiana incurs expenses related to certain indemnification coverages through Bison, Duke Energy’s wholly-owned captive insurance subsidiary. These expenses are recorded in Operation, Maintenance and Other within Operating Expenses on the Condensed Consolidated Statements of Operations and Comprehensive Income.
(c)	Duke Energy Indiana records income associated with the rental of office space to a consolidated affiliate of Duke Energy, as well as its proportionate share of certain charged expenses from affiliates of Duke Energy.
(d)	Recorded in Interest Expense on the Condensed Consolidated Statements of Operations and Comprehensive Income. See Note ##DCF for additional information related to money pool.
(e)	As discussed in Note ##VIE, certain trade receivables have been sold by Duke Energy Indiana to CRC, an unconsolidated entity formed by a subsidiary of Duke Energy. The proceeds obtained from the sales of receivables are largely cash but do include a subordinated note from CRC for a portion of the purchase price. The interest income associated with the subordinated note is recorded in Other Income and Expenses, net on the Condensed Consolidated Statements of Operations and Comprehensive Income.

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Income Taxes And Other Taxes

6 Months Ended

Jun. 30, 2012

Income Taxes And Other Taxes

16. Income Taxes and Other Taxes

Income Taxes. Duke Energy and its subsidiaries file income tax returns in the U.S. with federal and various state governmental authorities, and in certain foreign jurisdictions. The taxable income of Duke Energy and its subsidiaries is reflected in Duke Energy's U.S. federal and state income tax returns. These subsidiaries have a tax sharing agreement with Duke Energy where the separate return method is used to allocate tax expenses and benefits to the subsidiaries whose investments or results of operations provide these tax expenses and benefits. The accounting for income taxes essentially represents the income taxes that each of these subsidiaries would incur if it were a separate company filing its own tax return as a C-Corporation.

The effective tax rates for each of the Duke Energy Registrants are as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2012		2011		2012		2011
Duke Energy	32.2	%	30.4	%	29.8	%	30.8	%
Duke Energy Carolinas	37.2	%	35.5	%	36.7	%	35.3	%
Duke Energy Ohio	39.9	%	9.6	%	38.1	%	30.4	%
Duke Energy Indiana	34.4	%	29.3	%	45.7	%	32.3	%

For the three months ended June 30, 2012, Duke Energy's effective tax rate increased primarily due to a $10 million reduction of deferred tax liabilities as a result of an election related to the transfer of certain gas fired generation assets to its wholly owned subsidiary Duke Energy Commercial Asset Management, LLC (DECAM) in the second quarter of 2011. For the six months ended June 30, 2012, Duke Energy reflected a decrease in its effective tax rate primarily due to a decrease in pretax income related to the Edwardsport IGCC project impairment charges.

In addition, for the three and six months ended June 30, 2012, Duke Energy Carolinas reflected an increase in its effective tax rate primarily due to a decrease in AFUDC equity, Duke Energy Ohio's effective tax rate increased primarily due to an increase in pretax income and a $10 million reduction of deferred tax liabilities as a result of an election related to the transfer of certain gas-fired generation assets to its wholly owned subsidiary DECAM in the second quarter of 2011, and Duke Energy Indiana reflected an increase in its effective tax rate primarily due to an increase in pretax loss related to the Edwardsport IGCC project impairment charges. See Note 4 for further details on the impairment charges.

Excise Taxes. Certain excise taxes levied by state or local governments are collected by the Duke Energy Registrants from its customers. These taxes, which are required to be paid regardless of the Duke Energy Registrants' ability to collect from the customer, are accounted for on a gross basis. When each of the Duke Energy Registrants act 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. Excise taxes for each Duke Energy Registrant are accounted for on a gross basis and recorded as revenues and other tax expensein therespective Condensed Consolidated Statements of Operations were as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in millions)	2012		2011		2012		2011
Duke Energy Carolinas	$	39	$	37	$	78	$	73
Duke Energy Ohio		23		25		53		59
Duke Energy Indiana		8		7		16		15
Duke Energy	$	70	$	69	$	147	$	147

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Related Party Transactions(OtherRevenueAndExpense)(Details) (USD $) In Millions, unless otherwise specified	3 Months Ended				6 Months Ended
	Jun. 30, 2012		Jun. 30, 2011		Jun. 30, 2012		Jun. 30, 2011
Duke Energy Carolinas [Member] | Corporate governance and shared service expenses [Member]
Related Party Transaction, Expenses from Transactions with Related Party	$ 254	[1]	$ 251	[1]	$ 489	[1]	$ 504	[1]
Duke Energy Carolinas [Member] | Indemnification Coverages [Member]
Related Party Transaction, Expenses from Transactions with Related Party	6	[2]	5	[2]	11	[2]	10	[2]
Duke Energy Carolinas [Member] | Rental Income and Other Charged Expenses, net [ Member]
Related Party Transaction, Other Revenues from Transactions with Related Party	(5)	[3]	(2)	[3]	(7)	[3]	(4)	[3]
Duke Energy Carolinas [Member] | Interest Expense on Money Pool [Member]
Interest Expense, Money Pool	1	[4]	0	[4]	1	[4]	0	[4]
Duke Energy Carolinas [Member] | Interest Income on Money Pool [Member]
Related Party Transaction, Other Revenues from Transactions with Related Party	0		0		0		0
Duke Energy Ohio [Member] | Corporate governance and shared service expenses [Member]
Related Party Transaction, Expenses from Transactions with Related Party	86	[5]	91	[5]	176	[5]	186	[5]
Duke Energy Ohio [Member] | Indemnification Coverages [Member]
Related Party Transaction, Expenses from Transactions with Related Party	3	[6]	4	[6]	7	[6]	8	[6]
Duke Energy Ohio [Member] | Rental Income and Other Charged Expenses, net [ Member]
Related Party Transaction, Other Revenues from Transactions with Related Party	0	[7]	0	[7]	(1)	[7]	0	[7]
Duke Energy Ohio [Member] | Interest Expense on Money Pool [Member]
Interest Expense, Money Pool	0		0		0		0
Duke Energy Ohio [Member] | Interest Income on Money Pool [Member]
Related Party Transaction, Other Revenues from Transactions with Related Party	0		0		0		0
Duke Energy Ohio [Member] | CRC Interest Income [Member]
Related Party Transaction, Other Revenues from Transactions with Related Party	1	[8]	3	[8]	3	[8]	7	[8]
Duke Energy Indiana [Member] | Corporate governance and shared service expenses [Member]
Related Party Transaction, Expenses from Transactions with Related Party	98	[9]	99	[9]	199	[9]	206	[9]
Duke Energy Indiana [Member] | Indemnification Coverages [Member]
Related Party Transaction, Expenses from Transactions with Related Party	2	[10]	2	[10]	4	[10]	4	[10]
Duke Energy Indiana [Member] | Rental Income and Other Charged Expenses, net [ Member]
Related Party Transaction, Other Revenues from Transactions with Related Party	0	[11]	2	[11]	(1)	[11]	3	[11]
Duke Energy Indiana [Member] | Interest Expense on Money Pool [Member]
Interest Expense, Money Pool	1	[4]	0	[4]	1	[4]	0	[4]
Duke Energy Indiana [Member] | Interest Income on Money Pool [Member]
Related Party Transaction, Other Revenues from Transactions with Related Party	0		0		0		0
Duke Energy Indiana [Member] | CRC Interest Income [Member]
Related Party Transaction, Other Revenues from Transactions with Related Party	$ 1	[12]	$ 3	[12]	$ 3	[12]	$ 7	[12]

[1] Duke Energy Carolinas is charged its proportionate share of corporate governance and other costs by an unconsolidated affiliate that is a consolidated affiliate of Duke Energy. Corporate governance and other shared services costs are primarily related to human resources, employee benefits, legal and accounting fees, as well as other third party costs. These amounts are recorded in Operation, Maintenance and Other within Operating Expenses on the Condensed Consolidated Statements of Operations and Comprehensive Income.

[2] Duke Energy Carolinas incurs expenses related to certain indemnification coverages through Bison, Duke Energy’s wholly owned captive insurance subsidiary. These expenses are recorded in Operation, Maintenance and Other within Operating Expenses on the Condensed Consolidated Statements of Operations and Comprehensive Income.

[3] Duke Energy Carolinas records income associated with the rental of office space to a consolidated affiliate of Duke Energy, as well as its proportionate share of certain charged expenses from affiliates of Duke Energy.

[4] Recorded in Interest Expense on the Condensed Consolidated Statements of Operations and Comprehensive Income. See Note ##DCF for additional information related to money pool.

[5] Duke Energy Ohio is charged its proportionate share of corporate governance and other costs by an unconsolidated affiliate that is a consolidated affiliate of Duke Energy. Corporate governance and other shared services costs are primarily related to human resources, employee benefits, legal and accounting fees, as well as other third party costs. These amounts are recorded in Operation, Maintenance and Other within Operating Expenses on the Condensed Consolidated Statements of Operations and Comprehensive Income.

[6] Duke Energy Ohio incurs expenses related to certain indemnification coverages through Bison, Duke Energy’s wholly owned captive insurance subsidiary. These expenses are recorded in Operation, Maintenance and Other within Operating Expenses on the Condensed Consolidated Statements of Operations and Comprehensive Income.

[7] Duke Energy Ohio records income associated with the rental of office space to a consolidated affiliate of Duke Energy, as well as its proportionate share of certain charged expenses from affiliates of Duke Energy.

[8] As discussed in Note ##VIE, certain trade receivables have been sold by Duke Energy Ohio to CRC, an unconsolidated entity formed by a subsidiary of Duke Energy. The proceeds obtained from the sales of receivables are largely cash but do include a subordinated note from CRC for a portion of the purchase price. The interest income associated with the subordinated note is recorded in Other Income and Expenses, net on the Condensed Consolidated Statements of Operations and Comprehensive Income.

[9] Duke Energy Indiana is charged its proportionate share of corporate governance and other costs by an unconsolidated affiliate that is a consolidated affiliate of Duke Energy. Corporate governance and other shared services costs are primarily related to human resources, employee benefits, legal and accounting fees, as well as other third party costs. These amounts are recorded in Operation, Maintenance and Other within Operating Expenses on the Condensed Consolidated Statements of Operations and Comprehensive Income.

[10] Duke Energy Indiana incurs expenses related to certain indemnification coverages through Bison, Duke Energy’s wholly-owned captive insurance subsidiary. These expenses are recorded in Operation, Maintenance and Other within Operating Expenses on the Condensed Consolidated Statements of Operations and Comprehensive Income.

[11] Duke Energy Indiana records income associated with the rental of office space to a consolidated affiliate of Duke Energy, as well as its proportionate share of certain charged expenses from affiliates of Duke Energy.

[12] As discussed in Note ##VIE, certain trade receivables have been sold by Duke Energy Indiana to CRC, an unconsolidated entity formed by a subsidiary of Duke Energy. The proceeds obtained from the sales of receivables are largely cash but do include a subordinated note from CRC for a portion of the purchase price. The interest income associated with the subordinated note is recorded in Other Income and Expenses, net on the Condensed Consolidated Statements of Operations and Comprehensive Income.

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Business Segments (Narrative) (Details) (USD $) In Millions, unless otherwise specified					3 Months Ended
	Jun. 30, 2012 International Energy Interest In National Methanol [Member]	Jun. 30, 2012 Duke Energy Interest In DukeNet [Member]	Jun. 30, 2012 Exxon Mobil Interest In DETM [Member]	Jun. 30, 2012 Duke Energy Interest In DETM [Member]	Mar. 31, 2012 Edwardsport IGCC Plant [Member]
Equity ownership interest rate	25.00%	50.00%	40.00%	60.00%
Asset Impairment Charges Edwardsport					$ 420

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Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2012

Earnings Per Share [Abstract]

Schedule Of Earnings Per Share

			Average
(in millions, except per-share amounts)	Income		Shares			EPS
Three Months Ended June 30, 2012
Income from continuing operations attributable to Duke Energy common shareholders, as adjusted for participating securities — basic	$	444		446	$	0.99
Effect of dilutive securities:
Stock options, performance and restricted stock				―
Income from continuing operations attributable to Duke Energy common shareholders, as adjusted for participating securities — diluted	$	444		446	$	0.99
Three Months Ended June 30, 2011
Income from continuing operations attributable to Duke Energy common shareholders, as adjusted for participating securities — basic	$	434		444	$	0.98
Effect of dilutive securities:
Stock options, performance and restricted stock				―
Income from continuing operations attributable to Duke Energy common shareholders, as adjusted for participating securities — diluted	$	434		444	$	0.98

			Average
(In millions, except per-share amounts)	Income		Shares		EPS
Six Months Ended June 30, 2012
Income from continuing operations attributable to Duke Energy common shareholders, as adjusted for participating securities — basic	$	736		446	$	1.65
Effect of dilutive securities:
Stock options, performance and restricted stock				―
Income from continuing operations attributable to Duke Energy common shareholders, as adjusted for participating securities — diluted	$	736		446	$	1.65
Six Months Ended June 30, 2011
Income from continuing operations attributable to Duke Energy common shareholders, as adjusted for participating securities — basic	$	944		444	$	2.13
Effect of dilutive securities:
Stock options, performance and restricted stock				―
Income from continuing operations attributable to Duke Energy common shareholders, as adjusted for participating securities — diluted	$	944		444	$	2.13

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New Accounting Standards

6 Months Ended

Jun. 30, 2012

New Accounting Standards

18. New Accounting Standards

The following new accounting standards were adopted by the Duke Energy Registrants subsequent to June 30,2011 and the impact of such adoption, if applicable, has been presented in the respective Condensed Consolidated Financial Statements of the Duke Energy Registrants:

ASC 220 — Comprehensive Income. In June 2011, the FASB amended the existing requirements for presenting comprehensive income in financial statements primarily to increase the prominence of items reported in other comprehensive income (OCI) and to facilitate the convergence of U.S. GAAP and IFRS. Specifically, the revised guidance eliminates the option previously provided to present components of OCI as part of the statement of changes in stockholders' equity. Accordingly, all non-owner changes in stockholders' equity are required to be presented either in a single continuous statement of comprehensive income or in two separate but consecutive financial statements. For the Duke Energy Registrants, this revised guidance was effective on a retrospective basis for interim and annual periods beginning January 1, 2012. The adoption of this standard changed the presentation of the Duke Energy Registrants' financial statements but did not affect the calculation of net income, comprehensive income or earnings per share.

ASC 820 — Fair Value Measurements and Disclosures. In May 2011, the FASB amended existing requirements for measuring fair value and for disclosing information about fair value measurements. This revised guidance results in a consistent definition of fair value, as well as common requirements for measurement and disclosure of fair value information between U.S. GAAP and International Financial Reporting Standards (IFRS). In addition, the amendments set forth enhanced disclosure requirements with respect to recurring Level 3 measurements, nonfinancial assets measured or disclosed at fair value, transfers between levels in the fair value hierarchy, and assets and liabilities disclosed but not recorded at fair value. For the Duke Energy Registrants, the revised fair value measurement guidance was effective on a prospective basis for interim and annual periods beginning January 1, 2012. The adoption of this new guidance did not have a significant impact on the Duke Energy Registrants disclosures or their consolidated results of operations, cash flows, or financial position.

ASC 350 — Intangibles–Goodwill and Other. In September 2011, the FASB amended existing goodwill impairment testing accounting guidance to provide an entity testing goodwill for impairment with the option of performing a qualitative assessment prior to calculating the fair value of a reporting unit in step one of a goodwill impairment test. Under this revised guidance, a qualitative assessment would require an evaluation of economic, industry, and company-specific considerations. If an entity determines, on a basis of such qualitative factors, that the fair value of a reporting unit is more likely than not less than the carrying value of a reporting unit, then step one and if necessary, step two of the impairment test must be performed. Otherwise, no further impairment testing would be required. The revised goodwill impairment testing accounting guidance is effective for the Duke Energy Registrants' annual and interim goodwill impairment tests performed for fiscal years beginning January 1, 2012, with early adoption of this revised guidance permitted for annual and interim goodwill impairment tests performed as of a date before September 15, 2011. Since annual goodwill impairment tests are performed by Duke Energy as of August 31, the Duke Energy Registrants early adopted this revised accounting guidance during the third quarter of 2011 and applied that guidance to their annual goodwill impairment tests for 2011.

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Subsequent Events

6 Months Ended

Jun. 30, 2012

Subsequent Events

19. Subsequent Events

For information on subsequent events related to acquisitions and sales of other assets, regulatory matters, commitments and contingencies, and earnings per share see Notes 2, 4,5 and 12, respectively.

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Condensed Consolidated Statements Of Cash Flows (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$ 747	$ 954
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization (including amortization of nuclear fuel)	1,077	991
Equity component of AFUDC	(116)	(123)
Gains on sales of other assets	(7)	(27)
Impairment of other long-lived assets	408	9
Deferred income taxes	230	461
Voluntary opportunity cost deferral	(101)	0
Equity in earnings of unconsolidated affiliates	(85)	(80)
Accrued pension and other post-retirement benefit costs	57	52
(Increase) decrease in
Net realized and unrealized mark-to-market and hedging transactions	(10)	13
Receivables	61	166
Inventory	(165)	(85)
Other current assets	105	128
Increase (decrease) in
Accounts payable	(102)	(338)
Taxes accrued	(67)	(99)
Other current liabilities	34	(179)
Other assets	22	81
Other liabilities	(86)	(207)
Net cash provided by operating activities	2,002	1,717
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(2,252)	(1,938)
Investment expenditures	(9)	(49)
Acquisitions	(36)	(4)
Purchases of available-for-sale securities	(1,240)	(1,266)
Proceeds from sales and maturities of available-for-sale securities	1,155	1,281
Net proceeds from the sales of other assets, and sales of and collections on notes receivable	23	109
Change in restricted cash	(51)	24
Other	19	5
Net cash used in investing activities	(2,391)	(1,838)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt	721	499
Proceeds from the issuance of common stock related to employee benefit plans	14	10
Payments for the redemption of long-term debt	(878)	(82)
Notes payable and commercial paper	631	63
Distributions to noncontrolling interests	(5)	(18)
Dividends paid	(670)	(657)
Other	(8)	(2)
Net cash used in financing activities	(195)	(187)
Net increase in cash and cash equivalents	(584)	(308)
Cash and cash equivalents at beginning of period	2,110	1,670
Cash and cash equivalents at end of period	1,526	1,362
Supplemental Disclosures
Accrued capital expenditures	216	317
Dividends declared but not paid	344	337
Extinguishment of debt related to investment in Attiki Gas Supply, S.A.	66	0
Duke Energy Carolinas [Member]
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	477	398
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization (including amortization of nuclear fuel)	569	486
Equity component of AFUDC	(74)	(82)
Gains on sales of other assets	(6)	(1)
Deferred income taxes	275	311
Voluntary opportunity cost deferral	(101)	0
Accrued pension and other post-retirement benefit costs	21	17
(Increase) decrease in
Net realized and unrealized mark-to-market and hedging transactions	1	2
Receivables	53	143
Inventory	(99)	(43)
Other current assets	8	141
Increase (decrease) in
Accounts payable	(244)	(322)
Taxes accrued	(17)	(29)
Other current liabilities	76	(57)
Other assets	(40)	(18)
Other liabilities	(74)	(143)
Net cash provided by operating activities	825	803
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(1,006)	(1,070)
Purchases of available-for-sale securities	(607)	(767)
Proceeds from sales and maturities of available-for-sale securities	591	743
Notes due from affiliate	679	(211)
Change in restricted cash	0	2
Other	(1)	(6)
Net cash used in investing activities	(344)	(1,309)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt	0	499
Payments for the redemption of long-term debt	(751)	(1)
Other	(1)	(2)
Net cash used in financing activities	(752)	496
Net increase in cash and cash equivalents	(271)	(10)
Cash and cash equivalents at beginning of period	289	153
Cash and cash equivalents at end of period	18	143
Supplemental Disclosures
Accrued capital expenditures	104	140
Duke Energy Ohio [Member]
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	119	106
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization (including amortization of nuclear fuel)	165	177
Gains on sales of other assets	(2)	(2)
Impairment of other long-lived assets	0	9
Deferred income taxes	69	85
Accrued pension and other post-retirement benefit costs	6	6
(Increase) decrease in
Net realized and unrealized mark-to-market and hedging transactions	(11)	12
Receivables	51	124
Inventory	(20)	(4)
Other current assets	29	15
Increase (decrease) in
Accounts payable	(33)	(79)
Taxes accrued	(22)	(55)
Other current liabilities	(14)	(6)
Other assets	(11)	23
Other liabilities	(75)	(45)
Net cash provided by operating activities	251	366
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(252)	(230)
Net proceeds from the sales of other assets, and sales of and collections on notes receivable	82	0
Notes due from affiliate	(130)	86
Change in restricted cash	(25)	4
Other	1	0
Net cash used in investing activities	(324)	(140)
CASH FLOWS FROM FINANCING ACTIVITIES
Payments for the redemption of long-term debt	(4)	(4)
Dividend to parent	0	(285)
Net cash used in financing activities	(4)	(289)
Net increase in cash and cash equivalents	(77)	(63)
Cash and cash equivalents at beginning of period	99	228
Cash and cash equivalents at end of period	22	165
Supplemental Disclosures
Accrued capital expenditures	37	25
Transfer of Vermillion Generating Station	(28)
Duke Energy Indiana [Member]
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	(90)	144
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization (including amortization of nuclear fuel)	195	200
Equity component of AFUDC	(39)	(39)
Impairment of other long-lived assets	400	0
Deferred income taxes	(73)	39
Accrued pension and other post-retirement benefit costs	8	11
(Increase) decrease in
Receivables	8	89
Inventory	(28)	(31)
Other current assets	19	6
Increase (decrease) in
Accounts payable	0	(9)
Taxes accrued	(25)	0
Other current liabilities	17	(4)
Other assets	26	15
Other liabilities	(35)	(27)
Net cash provided by operating activities	383	394
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(439)	(512)
Purchases of available-for-sale securities	(8)	(2)
Proceeds from sales and maturities of available-for-sale securities	10	1
Notes due from affiliate	0	85
Change in restricted cash	0	4
Other	(2)	(3)
Net cash used in investing activities	(439)	(427)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt	250	0
Payments for the redemption of long-term debt	(2)	(2)
Notes payable to affiliate	(187)	0
Other	(2)	0
Net cash used in financing activities	59	(2)
Net increase in cash and cash equivalents	3	(35)
Cash and cash equivalents at beginning of period	16	54
Cash and cash equivalents at end of period	19	19
Supplemental Disclosures
Accrued capital expenditures	46	143
Transfer of Vermillion Generating Station	$ 26	$ 0

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Organization And Basis of Presentation (Policy)

6 Months Ended

Jun. 30, 2012

Organization

Organization. Duke Energy Corporation (collectively with its subsidiaries, Duke Energy) is an energy company headquartered in Charlotte, North Carolina. Duke Energy operates in the United States (U.S.) primarily through its direct and indirect wholly owned subsidiaries, Duke Energy Carolinas, LLC (Duke Energy Carolinas), Duke Energy Ohio, Inc. (Duke Energy Ohio), which includes Duke Energy Kentucky, Inc. (Duke Energy Kentucky), and Duke Energy Indiana, Inc. (Duke Energy Indiana), as well as in Latin America through International Energy. When discussing Duke Energy's condensed consolidated financial information, it necessarily includes the results of its three separate subsidiary registrants, Duke Energy Carolinas, Duke Energy Ohio and Duke Energy Indiana (collectively referred to as the Subsidiary Registrants), which, along with Duke Energy, are collectively referred to as the Duke Energy Registrants.The information in these combined notes relates to each of the Duke Energy Registrants as noted in the Index to the Combined Notes. However, none of the registrants makes any representation as to information related solely to Duke Energy or the subsidiaries of Duke Energy other than itself. As discussed further in Note 3, Duke Energy operates in three reportable business segments: U.S. Franchised Electric and Gas, Commercial Power and International Energy. The remainder of Duke Energy's operations is presented as Other.

These Unaudited Condensed Consolidated Financial Statements include, after eliminating intercompany transactions and balances, the accounts of the Duke Energy Registrants and all majority-owned subsidiaries where the respective Duke Energy Registrants have control and those variable interest entities (VIEs) where the respective Duke Energy Registrants are the primary beneficiary. These Unaudited Condensed Consolidated Financial Statements also reflect Duke Energy Carolinas' approximate 19.25% proportionate share of the Catawba Nuclear Station, as well as Duke Energy Ohio's proportionate share of certain generation and transmission facilities in Ohio, Indiana and Kentucky and Duke Energy Indiana's proportionate share of certain generation and transmission facilities. In January 2012, Duke Energy Ohio completed the sale of its 75% ownership of the Vermillion Generating Station; upon the close, Duke Energy Indiana purchased a 62.5% interest in the station. See Note2 for further discussion.

Duke Energy Carolinas, a wholly owned subsidiary of Duke Energy, is an electric utility company that generates, transmits, distributes and sells electricity in North Carolina and South Carolina. Duke Energy Carolinas is subject to the regulatory provisions of the North Carolina Utilities Commission (NCUC), the Public Service Commission of South Carolina (PSCSC), the U.S. Nuclear Regulatory Commission (NRC) and the Federal Energy Regulatory Commission (FERC). Substantially all of Duke Energy Carolinas' operations are regulated and qualify for regulatory accounting treatment. As discussed further in Note 3, Duke Energy Carolinas' operations include one reportable business segment, Franchised Electric.

Duke Energy Ohio is an indirect wholly owned subsidiary of Duke Energy. Duke Energy Ohio is a combination electric and gas public utility that provides service in the southwestern portion of Ohio and in northern Kentucky through its wholly owned subsidiary Duke Energy Kentucky, as well as electric generation in parts of Ohio, Illinois and Pennsylvania. Duke Energy Ohio's principal lines of business include generation, transmission and distribution of electricity, the sale of and/or transportation of natural gas, and energy marketing. Duke Energy Ohio conducts competitive auctions for retail electricity supply in Ohio whereby the energy price is recovered from retail customers. Duke Energy Kentucky's principal lines of business include generation, transmission and distribution of electricity, as well as the sale of and/or transportation of natural gas. Duke Energy Ohio is subject to the regulatory provisions of the Public Utilities Commission of Ohio (PUCO), the Kentucky Public Service Commission (KPSC) and the FERC. Duke Energy Ohio applies regulatory accounting treatment to substantially all of the operations of its Franchised Electric and Gas operating segment. Through November 2011, Duke Energy Ohio applied regulatory accounting treatment to certain rate riders associated with retail generation of its Commercial Power operating segment. See Note 3 for information about business segments.

Duke Energy Indiana is an indirect wholly owned subsidiary of Duke Energy. Duke Energy Indiana is an electric utility that provides service in north central, central, and southern Indiana. Its primary line of business is generation, transmission and distribution of electricity. Duke Energy Indiana is subject to the regulatory provisions of the Indiana Utility Regulatory Commission (IURC) and the FERC. The substantial majority of Duke Energy Indiana's operations are regulated and qualify for regulatory accounting treatment. As discussed further in Note 3, Duke Energy Indiana's operations include one reportable business segment, Franchised Electric.

See Note 2 for information regarding Duke Energy's merger with Progress Energy, Inc. (Progress Energy) that closed on July 2, 2012.For the periods presented, Duke Energy's condensed consolidated financial information does not include the results of Progress Energy and its registrants. Also, the Duke Energy Registrants, as defined above, does not include Progress Energy, Inc., Progress Energy Carolinas or Progress Energy Florida, unless otherwise noted.

Use Of Estimates

Use of Estimates. To conform to GAAP in the U.S., management makes estimates and assumptions that affect the amounts reported in the Unaudited Condensed Consolidated Financial Statements and Notes. Although these estimates are based on management's best available information at the time, actual results could differ.

Unbilled Revenue

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 applying average revenue per kilowatt-hour or per thousand cubic feet (Mcf) for all customer classes to the number of estimated kilowatt-hours or Mcfs delivered but not billed. Unbilled wholesale energy revenues are calculated by applying the contractual rate per megawatt-hour (MWh) to the number of estimated MWh delivered but not yet billed. Unbilled wholesale demand revenues are calculated by applying the contractual rate per megawatt (MW) to the MW volume delivered but not yet billed. The amount of unbilled revenues can vary significantly from period to period as a result of numerous factors, including seasonality, weather, customer usage patterns and customer mix.

Basis Of Presentation

Basis of Presentation. These Unaudited Condensed Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles (GAAP) in the U.S. for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, these Unaudited Condensed 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 Condensed 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 Condensed Consolidated Financial Statements and other information included in this quarterly report should be read in conjunction with the respective Consolidated Financial Statements and Notes in the Duke Energy Registrants combined Form 10-K for the year ended December 31, 2011.

These Unaudited Condensed Consolidated Financial Statements reflect all normal recurring adjustments that are, in the opinion of the respective companies' management, necessary to fairly present the financial position and results of operations of each Duke Energy Registrant. Amounts reported in Duke Energy's interim Unaudited Condensed Consolidated Statements of Operations and each of the Subsidiary Registrants' interim Unaudited Condensed Consolidated Statements of Income and Comprehensive Income 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.

Duke Energy Ohio and Duke Energy Indiana sellpower to and purchase power from PJM Interconnection, LLC (PJM) and Midwest Independent Transmission System Operator, Inc. (MISO), respectively. Duke EnergyOhio and Duke Energy Indiana account for these transactions on a net hourly basis as the transactions are settled on a net hourly basis.

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Investments In Debt And Equity Securities (Maturities) (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2012
1 year	$ 164
1 through 5 years	345
6 to 10 years	212
Thereafter	471
Duke Energy Carolinas [Member]
1 year	45
1 through 5 years	146
6 to 10 years	174
Thereafter	369
Duke Energy Indiana [Member]
1 year	0
1 through 5 years	21
6 to 10 years	5
Thereafter	$ 2

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Risk Management, Derivative Instruments And Hedging Activities (Tables)

6 Months Ended

Jun. 30, 2012

Notional Amounts Of Derivative Instruments Related To Interest Rate Risk

Notional Amounts of Derivative Instruments Related to Interest Rate
		Duke Energy		Duke Energy Carolinas		Duke Energy Ohio		Duke Energy Indiana
(in millions)		June 30, 2012
Cash Flow Hedges(a)		$	1,130	$	―	$	―	$	―
Undesignated Contracts			243		―		27		200
Fair Value Hedges			275		25		250		―
	Total Notional Amount	$	1,648	$	25	$	277	$	200
(in millions)		December 31, 2011
Cash Flow Hedges(a)		$	841	$	―	$	―	$	―
Undesignated Contracts			247		―		27		200
Fair Value Hedges			275		25		250		―
	Total Notional Amount	$	1,363	$	25	$	277	$	200
(a)	Includes amounts related to non-recourse variable rate long-term debt of VIEs of $755 million at June 30, 2012 and $466 million at December 31, 2011.

Underlying Notional Amounts For Derivative Instruments Accounted For At Fair Value

Underlying Notional Amounts for Commodity Derivative Instruments Accounted for At Fair Value
		Duke Energy		Duke Energy Ohio
		June 30, 2012
Commodity contracts
Electricity-energy (Gigawatt-hours)(a)			10,751		6,773
Emission allowances NOX (thousands of tons)			3		3
Natural gas (millions of decatherms)			30		21
		December 31, 2011
Commodity contracts
Electricity-energy (Gigawatt-hours)(a)			14,118		14,655
Emission allowances NOX (thousands of tons)			9		9
Natural gas (millions of decatherms)			40		2
(a)	Amounts at Duke Energy Ohio include intercompany positions that are eliminated at Duke Energy.

Location And Fair Value Amounts Of Derivatives Reflected In The Condensed Consolidated Balance Sheets

	The following tables show fair value amounts of derivative contracts, and the line item(s) in the Condensed Consolidated Balance Sheets
in which such amounts are included. The fair values of derivative contracts are presented on a gross basis, even when the derivative instruments are subject to master netting arrangements where Duke Energy nets the fair value of derivative contracts subject to master netting arrangements with the same counterparty on the Condensed Consolidated Balance Sheets. Cash collateral payables and receivables associated with the derivative contracts have not been netted against the fair value amounts.
Location and Fair Value Amounts of Derivatives Reflected in the Condensed Consolidated Balance Sheets
		Duke Energy				Duke Energy Ohio
		June 30, 2012
(in millions)		Asset		Liability		Asset		Liability
Derivatives Designated as Hedging Instruments
Interest rate contracts
Current Assets: Other		$	4	$	―	$	4	$	―
Current Liabilities: Other			―		14		―		―
Deferred Credits and Other Liabilities: Other			―		99		―		―
Total Derivatives Designated as Hedging Instruments		$	4	$	113	$	4	$	―
Derivatives Not Designated as Hedging Instruments
Commodity contracts
Current Assets: Other(a)		$	192	$	124	$	184	$	131
Investments and Other Assets: Other			17		―		18		1
Current Liabilities: Other			4		49		3		12
Deferred Credits and Other Liabilities: Other			49		103		47		59
Interest rate contracts
Current Liabilities: Other			―		2		―		1
Deferred Credits and Other Liabilities: Other(b)			―		84		―		8
Total Derivatives Not Designated as Hedging Instruments		$	262	$	362	$	252	$	212
Total Derivatives		$	266	$	475	$	256	$	212
(a)	Amount at Duke Energy includes $23 million related to commodity contracts at Duke Energy Indiana which receive regulatory accounting treatment.
(b)	Amount at Duke Energy includes $76 million related to interest rate swaps at Duke Energy Indiana which receive regulatory accounting treatment.

		Duke Energy				Duke Energy Ohio
		December 31, 2011
(in millions)		Asset		Liability		Asset		Liability
Derivatives Designated as Hedging Instruments
Interest rate contracts
Current Assets: Other		$	4	$	―	$	3	$	―
Investments and Other Assets: Other			2		―		2		―
Current Liabilities: Other			―		11		―		―
Deferred Credits and Other Liabilities: Other			―		76		―		―
Total Derivatives Designated as Hedging Instruments		$	6	$	87	$	5	$	―
Derivatives Not Designated as Hedging Instruments
Commodity contracts
Current Assets: Other		$	81	$	31	$	79	$	39
Investments and Other Assets: Other			35		17		29		18
Current Liabilities: Other			136		168		136		146
Deferred Credits and Other Liabilities: Other			25		93		22		33
Interest rate contracts
Current Liabilities: Other			―		2		―		1
Deferred Credits and Other Liabilities: Other(a)			―		75		―		8
Total Derivatives Not Designated as Hedging Instruments		$	277	$	386	$	266	$	245
Total Derivatives		$	283	$	473	$	271	$	245
(a)	Amounts at Duke Energy include $67 million related to interest rate swaps at Duke Energy Indiana which receive regulatory accounting treatment.

Cash Flow Hedges-Location And Amount Of Pre-Tax (Losses) Recognized In Comprehensive Income

	The following table shows the amount of the gains and losses recognized on derivative instruments designated and qualifying as
cash flow hedges by type of derivative contract, and the Condensed Consolidated Statements of Operations line items in which such gains and losses are included for Duke Energy.
Cash Flow Hedges—Location and Amount of Pre-Tax Gains (Losses) Recognized in Comprehensive Income
		Three Months Ended
		June 30,
(in millions)		2012		2011
Pre-tax Gains (Losses) Recorded in AOCI
Interest rate contracts		$	(44)	$	(10)
Total Pre-tax Gains (Losses) Recorded in AOCI		$	(44)	$	(10)
Location of Pre-tax Gains (Losses) Reclassified from AOCI into Earnings(a)
Interest rate contracts
Interest expense		$	(1)	$	(2)
Total Pre-tax Gains (Losses) Reclassified from AOCI into Earnings		$	(1)	$	(2)
(a)	Represents the gains and losses on cash flow hedges previously recorded in AOCI during the term of the hedging relationship and reclassified into earnings during the current period.

		Six Months Ended
		June 30,
(in millions)		2012		2011
Pre-tax Gains (Losses) Recorded in AOCI
Interest rate contracts		$	(26)	$	(7)
Total Pre-tax Gains (Losses) Recorded in AOCI		$	(26)	$	(7)
Location of Pre-tax Gains and (Losses) Reclassified from AOCI into Earnings(a)
Interest rate contracts
Interest expense		$	(2)	$	(3)
Total Pre-tax Gains (Losses) Reclassified from AOCI into Earnings		$	(2)	$	(3)
(a)	Represents the gains and losses on cash flow hedges previously recorded in AOCI during the term of the hedging relationship and reclassified into earnings during the current period.

Undesignated Contracts - Location And Amount Of Pre-Tax Gains And (Losses) Recognized In Income Or As Regulatory Assets Or Liabilities

	The following tables show the amount of the pre-tax gains and losses recognized on undesignated contracts by type of derivative
instrument, and the line item(s) in the Condensed Consolidated Statements of Comprehensive Income in which such gains and losses are included or deferred on the Condensed Consolidated Balance Sheets as regulatory assets or liabilities.
Undesignated Contracts—Location and Amount of Pre-Tax Gains and (Losses) Recognized in Income or as Regulatory Assets
or Liabilities
		Duke Energy				Duke Energy Ohio
		Three Months Ended June 30,
(in millions)		2012		2011		2012		2011
Location of Pre-tax Gains and (Losses) Recognized in Earnings
Commodity contracts
Revenue, non-regulated electric, natural gas and other			―		(12)		4		(16)
Interest rate contracts
Interest expense			―		―		(1)		(1)
Total Pre-tax (Losses) Gains Recognized in Earnings(a)		$	―	$	(12)	$	3	$	(17)
Location of Pre-tax Gains and (Losses) Recognized as Regulatory Assets or Liabilities
Commodity contracts
Regulatory Asset		$	1	$	(1)	$	―	$	―
Regulatory Liability			17		11		―		(1)
Interest rate contracts
Regulatory Asset			(32)		(21)		(1)		―
Total Pre-tax Gains (Losses) Recognized as Regulatory Assets or Liabilities		$	(14)	$	(11)	$	(1)	$	(1)
(a)	Amounts include Duke Energy Ohio intercompany positions that are eliminated at Duke Energy.

		Duke Energy				Duke Energy Ohio
		Six Months Ended June 30,
(in millions)		2012		2011		2012		2011
Location of Pre-tax Gains and (Losses) Recognized in Earnings
Commodity contracts
Revenue, non-regulated electric, natural gas and other			36		(25)		75		(22)
Fuel used in electric generation and purchased power - non-regulated			―		(1)		―		(1)
Interest rate contracts
Interest expense			―		―		(1)		(1)
Total Pre-tax (Losses) Gains Recognized in Earnings(a)		$	36	$	(26)	$	74	$	(24)
Location of Pre-tax Gains and (Losses) Recognized as Regulatory Assets or Liabilities
Commodity contracts
Regulatory Asset		$	―	$	(1)	$	(2)	$	(1)
Regulatory Liability			22		10		1		―
Interest rate contracts
Regulatory Asset			(10)		(9)		―		―
Total Pre-tax Gains (Losses) Recognized as Regulatory Assets of Liabilities		$	12	$	―	$	(1)	$	(1)
(a)	Amounts include Duke Energy Ohio intercompany positions that are eliminated at Duke Energy.

Schedule Of Information Regarding Derivative Instruments That Contain Credit-Risk Related Contingent Features

Information Regarding Derivative Instruments that Contain Credit-risk Related Contingent Features
	Duke Energy		Duke Energy Ohio
(in millions)	June 30, 2012
Aggregate Fair Value Amounts of Derivative Instruments in a Net Liability Position	$	193	$	189
Collateral Already Posted	$	67	$	44
Additional Cash Collateral or Letters of Credit in the Event Credit-risk-related Contingent Features were Triggered at the End of the Reporting Period	$	6	$	4
(in millions)	December 31, 2011
Aggregate Fair Value Amounts of Derivative Instruments in a Net Liability Position	$	96	$	94
Collateral Already Posted	$	36	$	35
Additional Cash Collateral or Letters of Credit in the Event Credit-risk-related Contingent Features were Triggered at the End of the Reporting Period	$	5	$	5

Schedule Of Derivatives In Net Liability Position

Information Regarding Cash Collateral under Master Netting Arrangements
	Duke Energy				Duke Energy Ohio
	June 30, 2012
(in millions)	Receivables		Payable		Receivables		Payable
Amounts offset against net derivative positions	$	―	$	1	$	―	$	―
Amounts not offset against net derivative positions	$	73	$	―	$	49	$	―
	December 31, 2011
(in millions)	Receivables		Payable		Receivables		Payable
Amounts offset against net derivative positions	$	10	$	―	$	9	$	―
Amounts not offset against net derivative positions	$	30	$	―	$	28	$	―

Duke Energy Ohio [Member]

Underlying Notional Amounts For Derivative Instruments Accounted For At Fair Value

Underlying Notional Amounts for Commodity Derivative Instruments Accounted for At Fair Value
		Duke Energy		Duke Energy Ohio
		June 30, 2012
Commodity contracts
Electricity-energy (Gigawatt-hours)(a)			10,751		6,773
Emission allowances NOX (thousands of tons)			3		3
Natural gas (millions of decatherms)			30		21
		December 31, 2011
Commodity contracts
Electricity-energy (Gigawatt-hours)(a)			14,118		14,655
Emission allowances NOX (thousands of tons)			9		9
Natural gas (millions of decatherms)			40		2
(a)	Amounts at Duke Energy Ohio include intercompany positions that are eliminated at Duke Energy.

Undesignated Contracts - Location And Amount Of Pre-Tax Gains And (Losses) Recognized In Income Or As Regulatory Assets Or Liabilities

	The following tables show the amount of the pre-tax gains and losses recognized on undesignated contracts by type of derivative
instrument, and the line item(s) in the Condensed Consolidated Statements of Comprehensive Income in which such gains and losses are included or deferred on the Condensed Consolidated Balance Sheets as regulatory assets or liabilities.
Undesignated Contracts—Location and Amount of Pre-Tax Gains and (Losses) Recognized in Income or as Regulatory Assets
or Liabilities
		Duke Energy				Duke Energy Ohio
		Three Months Ended June 30,
(in millions)		2012		2011		2012		2011
Location of Pre-tax Gains and (Losses) Recognized in Earnings
Commodity contracts
Revenue, non-regulated electric, natural gas and other			―		(12)		4		(16)
Interest rate contracts
Interest expense			―		―		(1)		(1)
Total Pre-tax (Losses) Gains Recognized in Earnings(a)		$	―	$	(12)	$	3	$	(17)
Location of Pre-tax Gains and (Losses) Recognized as Regulatory Assets or Liabilities
Commodity contracts
Regulatory Asset		$	1	$	(1)	$	―	$	―
Regulatory Liability			17		11		―		(1)
Interest rate contracts
Regulatory Asset			(32)		(21)		(1)		―
Total Pre-tax Gains (Losses) Recognized as Regulatory Assets or Liabilities		$	(14)	$	(11)	$	(1)	$	(1)
(a)	Amounts include Duke Energy Ohio intercompany positions that are eliminated at Duke Energy.

		Duke Energy				Duke Energy Ohio
		Six Months Ended June 30,
(in millions)		2012		2011		2012		2011
Location of Pre-tax Gains and (Losses) Recognized in Earnings
Commodity contracts
Revenue, non-regulated electric, natural gas and other			36		(25)		75		(22)
Fuel used in electric generation and purchased power - non-regulated			―		(1)		―		(1)
Interest rate contracts
Interest expense			―		―		(1)		(1)
Total Pre-tax (Losses) Gains Recognized in Earnings(a)		$	36	$	(26)	$	74	$	(24)
Location of Pre-tax Gains and (Losses) Recognized as Regulatory Assets or Liabilities
Commodity contracts
Regulatory Asset		$	―	$	(1)	$	(2)	$	(1)
Regulatory Liability			22		10		1		―
Interest rate contracts
Regulatory Asset			(10)		(9)		―		―
Total Pre-tax Gains (Losses) Recognized as Regulatory Assets of Liabilities		$	12	$	―	$	(1)	$	(1)
(a)	Amounts include Duke Energy Ohio intercompany positions that are eliminated at Duke Energy.

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Acquisitions and Sales of Other Assets (Purchase Price Calculation) (Details) (USD $) In Millions, except Share data in Thousands, unless otherwise specified	0 Months Ended
	Jul. 02, 2012	Jun. 30, 2012	Dec. 31, 2011	Jun. 30, 2011	Dec. 31, 2010
Progress Energy common shares outstanding		446,000	445,000	444,000	443,000
Exchange ratio	0.87083
Duke Energy common shares issued for Progress Energy common shares outstanding	257,867
Closing price of Duke Energy common shares	$ 69.84
Purchase price for common shares	$ 18,009
Fair value of outstanding earned stock compensation awards	62
Total estimated purchase price	$ 18,071
Progress Energy [Member]
Progress Energy common shares outstanding	296,116

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Risk Management, Derivative Instruments And Hedging Activities (Cash Flow Hedges - Location And Amount Of Pre-Tax Recognized In Comprehensive Income) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Amount of pre-tax gains (losses) recorded in AOCI	$ (44)	$ (10)	$ (26)	$ (7)
Total Pre-tax Gains and (Losses) Reclassified from AOCI into Earnings	(1)	(2)	(2)	(3)
Interest Rate Contracts [Member]
Amount of pre-tax gains (losses) recorded in AOCI	(44)	(10)	(26)	(7)
Total Pre-tax Gains and (Losses) Reclassified from AOCI into Earnings	$ (1)	$ (2)	$ (2)	$ (3)

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Condensed Consolidated Statements Of Operations (USD $) In Millions, except Share data, unless otherwise specified	3 Months Ended				6 Months Ended
	Jun. 30, 2012		Jun. 30, 2011		Jun. 30, 2012		Jun. 30, 2011
Operating Revenues
Regulated electric	$ 2,628		$ 2,576		$ 5,129		$ 5,149
Non-regulated electric, natural gas, and other	868		864		1,826		1,719
Regulated natural gas	81		94		252		329
Total operating revenues	3,577		3,534		7,207		7,197
Operating Expenses
Fuel used in electric generation and purchased power - regulated	849		834		1,626		1,646
Fuel used in electric generation and purchased power - non-regulated	396		388		844		764
Cost of natural gas and coal sold	42		63		144		214
Operation, maintenance and other	862		959		1,608		1,839
Depreciation and amortization	475		437		954		891
Property and other taxes	171		169		355		355
Impairment charges	0		9		402		9
Total operating expenses	2,795		2,859		5,933		5,718
Gains on Sales of Other Assets and Other, net	4		4		7		14
Operating Income	786		679		1,281		1,493
Other Income and Expenses
Equity in earnings of unconsolidated affiliates	40		48		85		80
Impairments and gains on sales of unconsolidated affiliates	(1)		12		(6)		14
Other income and expenses, net	70		97		159		214
Total other income and expenses	109		157		238		308
Interest Expense	232		203		456		422
Income From Continuing Operations Before Income Taxes	663		633		1,063		1,379
Income Tax Expense from Continuing Operations	214		192		317		425
Income From Continuing Operations	449		441		746		954
Income From Discontinued Operations, net of tax	(1)		0		1		0
Net Income	448		441		747		954
Less: Net Income Attributable to Noncontrolling Interests	4		6		8		8
Net Income Attributable to Duke Energy Corporation	444		435		739		946
Other comprehensive income(loss), net of tax
Pension and OPEB related adjustments to AOCI	2	[1]	2	[1]	6	[1]	(7)	[1]
Reclassification into earnings from cash flow hedges	(3)	[2]	(1)	[2]	(2)	[2]	(2)	[2]
Comprehensive income	298		494		653		1,033
Income from continuing operations attributable to Duke Energy Corporation common shareholders
Basic	$ 0.99		$ 0.98		$ 1.65		$ 2.13
Diluted	$ 0.99		$ 0.98		$ 1.65		$ 2.13
Net income attributable to Duke Energy Corporation common stockholders
Basic	$ 0.99		$ 0.98		$ 1.65		$ 2.13
Diluted	$ 0.99		$ 0.98		$ 1.65		$ 2.13
Dividends declared per share	$ 1.515		$ 1.485		$ 2.265		$ 2.22
Weighted-average shares outstanding
Basic	446,000,000		444,000,000		446,000,000		444,000,000
Diluted	446,000,000		444,000,000		446,000,000		444,000,000
Duke Energy Carolinas [Member]
Operating Revenues
Total operating revenues	1,616		1,607		3,117		3,159
Operating Expenses
Fuel used in electric generation and purchased power - regulated	442		511		822		980
Operation, maintenance and other	476		495		807		930
Depreciation and amortization	226		190		454		391
Property and other taxes	89		81		179		165
Total operating expenses	1,233		1,277		2,262		2,466
Gains on Sales of Other Assets and Other, net	3		1		6		1
Operating Income	386		331		861		694
Other Income and Expenses
Total other income and expenses	43		50		82		92
Interest Expense	93		82		190		171
Income From Continuing Operations Before Income Taxes	336		299		753		615
Income Tax Expense from Continuing Operations	125		106		276		217
Net Income	211		193		477		398
Other comprehensive income(loss), net of tax
Reclassification into earnings from cash flow hedges	2	[3]	1	[3]	2	[3]	1	[3]
Comprehensive income	213		194		479		399
Duke Energy Ohio [Member]
Operating Revenues
Regulated electric	336		361		660		733
Non-regulated electric, natural gas, and other	299		239		716		510
Regulated natural gas	82		94		253		330
Total operating revenues	717		694		1,629		1,573
Operating Expenses
Fuel used in electric generation and purchased power - regulated	120		91		234		188
Fuel used in electric generation and purchased power - non-regulated	176		147		415		311
Cost of natural gas and coal sold	12		22		87		141
Operation, maintenance and other	175		215		371		420
Depreciation and amortization	80		88		163		176
Property and other taxes	60		63		128		136
Impairment charges	0		9		0		9
Total operating expenses	623		635		1,398		1,381
Gains on Sales of Other Assets and Other, net	1		0		2		2
Operating Income	95		59		233		194
Other Income and Expenses
Total other income and expenses	4		4		8		9
Interest Expense	25		27		49		51
Income From Continuing Operations Before Income Taxes	74		36		192		152
Income Tax Expense from Continuing Operations	29		3		73		46
Net Income	45		33		119		106
Other comprehensive income(loss), net of tax
Pension and OPEB related adjustments to AOCI	0	[4]	1	[4]	1	[4]	1	[4]
Comprehensive income	45		34		120		107
Duke Energy Indiana [Member]
Operating Revenues
Total operating revenues	685		620		1,373		1,279
Operating Expenses
Fuel used in electric generation and purchased power - regulated	287		232		570		478
Operation, maintenance and other	151		163		311		324
Depreciation and amortization	96		97		192		197
Property and other taxes	17		19		38		41
Impairment charges	0		0		400		0
Total operating expenses	551		511		1,511		1,040
Operating Income	134		109		(138)		239
Other Income and Expenses
Total other income and expenses	19		21		42		44
Interest Expense	36		34		70		70
Income From Continuing Operations Before Income Taxes	117		96		(166)		213
Income Tax Expense from Continuing Operations	40		28		(76)		69
Net Income	77		68		(90)		144
Other comprehensive income(loss), net of tax
Reclassification into earnings from cash flow hedges					(1)	[5]
Comprehensive income	$ 77		$ 68		$ (91)		$ 144

[1] Net of $1 million tax expense and $3 million tax expense for the three and six months ended June 30, 2012 and insignificant tax expense and $3 tax benefit for the three and six months ended June 30, 2011.

[2] Net of $2 million tax benefit and insignificant tax expense for the three and six months ended June 30, 2012 and $1 million tax expense for the three and six months ended June 30, 2011, respectively.

[3] Net of $2 million tax expense for the three and six months ended June 30, 2012 and 2011.

[4] Net of insignificant tax expense for the three and six months ended June 30, 2012, and insignificant tax expense and $1 million tax expense for the three and six months ended June 30, 2011.

[5] Net of insignificant tax benefit for the three and six months ended June 30, 2012.

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Stock-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2012

Stock-Based Compensation [Abstract]

Schedule Of Stock-Based Compensation Expense

		Three Months Ended				Six Months Ended
		June 30,				June 30,
(in millions)		2012		2011		2012		2011
Stock Options		$	―	$	―	$	2	$	2
Restricted Stock Unit Awards			6		6		14		14
Performance Awards			5		5		3		11
Total(a)(b)(c)(d)		$	11	$	11	$	19	$	27
(a)	Excludes stock-based compensation cost capitalized of $1 million for each of the three months ended June 30, 2012 and 2011.
(b)	Excludes stock-based compensation cost capitalized of $1 million and $2 million for the six months ended June 30, 2012 and 2011, respectively.
(c)	The tax benefit associated with the recorded expense was $4 million and $5 million for the three months ended June 30, 2012 and 2011, respectively.
(d)	The tax benefit associated with the recorded expense was $7 million and $11 million for the six months ended June 30, 2012 and 2011, respectively.

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Income Taxes And Other Taxes (Schedule Of Effective Tax Rates) (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Effective tax rate	32.20%	30.40%	29.80%	30.80%
Duke Energy Carolinas [Member]
Effective tax rate	37.20%	35.50%	36.70%	35.30%
Duke Energy Ohio [Member]
Effective tax rate	39.90%	9.60%	38.10%	30.40%
Duke Energy Indiana [Member]
Effective tax rate	34.40%	29.30%	45.70%	32.30%

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Condensed Consolidated Balance Sheets (USD $) In Millions, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
ASSETS
Cash and cash equivalents	$ 1,526	$ 2,110
Short-term investments	234	190
Receivables (net of allowance for doubtful accounts)	610	784
Restricted receivables of variable interest entities (net of allowance for doubtful accounts)	1,233	1,157
Inventory	1,762	1,588
Other	1,122	1,051
Total current assets	6,487	6,880
Investments and Other Assets [Abstract]
Investments in equity method unconsolidated affiliates	450	460
Nuclear decommissioning trust funds	2,204	2,060
Goodwill	3,842	3,849
Intangibles, net	357	363
Notes receivable	72	62
Restricted other assets of variable interest entities	133	135
Other	1,894	2,231
Total investments and other assets	8,952	9,160
Property, Plant and Equipment
Cost	61,458	60,377
Cost, variable interest entities	1,357	913
Less: Accumulated depreciation and amortization	(19,101)	(18,709)
Generation facilities to be retired, net	73	80
Net property, plant and equipment	43,787	42,661
Total Regulatory Assets and Deferred Debits [Abstract]
Regulatory assets	3,646	3,672
Other	159	153
Total regulatory assets and deferred debits	3,805	3,825
Total Assets	63,031	62,526
LIABILITIES AND EQUITY
Accounts payable	1,160	1,433
Notes payable and commercial paper	793	154
Non-recourse notes payable of variable interest entities	269	273
Taxes accrued	359	431
Interest accrued	254	252
Current maturities of long-term debt	1,870	1,894
Other	1,434	1,091
Total current liabilities	6,139	5,528
Long-term Debt	17,539	17,730
Non-recourse Long-term Debt of Variable Interest Entities	915	949
Other Liabilities, Noncurrent [Abstract]
Deferred income taxes	7,914	7,581
Investment tax credits	379	384
Accrued pension and other post-retirement benefit costs	829	856
Asset retirement obligations	1,999	1,936
Regulatory liabilities	2,981	2,919
Other Liabilities	1,820	1,778
Total deferred credits and other liabilities	15,922	15,454
Equity
Common Stock	1	1
Additional paid-in capital	21,140	21,132
Retained earnings	1,598	1,873
Accumulated other comprehensive loss	(320)	(234)
Net Duke Energy Corporation Shareholders' Equity	22,419	22,772
Noncontrolling interests	97	93
Total equity	22,516	22,865
Total Liabilities and Equity	63,031	62,526
Duke Energy Carolinas [Member]
ASSETS
Cash and cash equivalents	18	289
Receivables (net of allowance for doubtful accounts)	351	1,187
Restricted receivables of variable interest entities (net of allowance for doubtful accounts)	680	581
Inventory	1,024	917
Other	327	278
Total current assets	2,400	3,252
Investments and Other Assets [Abstract]
Nuclear decommissioning trust funds	2,204	2,060
Other	971	968
Total investments and other assets	3,175	3,028
Property, Plant and Equipment
Cost	33,505	32,840
Less: Accumulated depreciation and amortization	(11,374)	(11,269)
Generation facilities to be retired, net	73	80
Net property, plant and equipment	22,204	21,651
Total Regulatory Assets and Deferred Debits [Abstract]
Regulatory assets	1,891	1,894
Other	68	71
Total regulatory assets and deferred debits	1,959	1,965
Total Assets	29,738	29,896
LIABILITIES AND EQUITY
Accounts payable	448	793
Taxes accrued	109	126
Interest accrued	95	115
Current maturities of long-term debt	427	1,178
Other	481	398
Total current liabilities	1,560	2,610
Long-term Debt	7,795	7,796
Non-recourse Long-term Debt of Variable Interest Entities	300	300
Other Liabilities, Noncurrent [Abstract]
Deferred income taxes	4,891	4,555
Investment tax credits	230	233
Accrued pension and other post-retirement benefit costs	232	248
Asset retirement obligations	1,904	1,846
Regulatory liabilities	1,993	1,928
Other Liabilities	900	926
Total deferred credits and other liabilities	10,150	9,736
Equity
Member's Equity	9,950	9,473
Accumulated other comprehensive loss	(17)	(19)
Total member's equity	9,933	9,454
Total Liabilities and Member's Equity	29,738	29,896
Duke Energy Ohio [Member]
ASSETS
Cash and cash equivalents	22	99
Receivables (net of allowance for doubtful accounts)	760	681
Inventory	262	243
Other	258	220
Total current assets	1,302	1,243
Investments and Other Assets [Abstract]
Goodwill	921	921
Intangibles, net	136	143
Other	63	58
Total investments and other assets	1,120	1,122
Property, Plant and Equipment
Cost	10,612	10,632
Less: Accumulated depreciation and amortization	(2,600)	(2,594)
Net property, plant and equipment	8,012	8,038
Total Regulatory Assets and Deferred Debits [Abstract]
Regulatory assets	529	520
Other	15	16
Total regulatory assets and deferred debits	544	536
Total Assets	10,978	10,939
LIABILITIES AND EQUITY
Accounts payable	363	402
Taxes accrued	158	180
Interest accrued	23	23
Current maturities of long-term debt	757	507
Other	117	122
Total current liabilities	1,418	1,234
Long-term Debt	1,794	2,048
Other Liabilities, Noncurrent [Abstract]
Deferred income taxes	1,882	1,853
Investment tax credits	7	8
Accrued pension and other post-retirement benefit costs	142	147
Asset retirement obligations	28	27
Regulatory liabilities	261	273
Other Liabilities	187	182
Total deferred credits and other liabilities	2,507	2,490
Equity
Common Stock	762	762
Additional paid-in capital	5,057	5,085
Retained earnings	(533)	(652)
Accumulated other comprehensive loss	(27)	(28)
Net Duke Energy Corporation Shareholders' Equity	5,259	5,167
Total equity	5,259	5,167
Total Liabilities and Equity	10,978	10,939
Duke Energy Indiana [Member]
ASSETS
Cash and cash equivalents	19	16
Receivables (net of allowance for doubtful accounts)	190	198
Inventory	358	330
Other	107	135
Total current assets	674	679
Investments and Other Assets [Abstract]
Intangibles, net	44	50
Other	111	113
Total investments and other assets	155	163
Property, Plant and Equipment
Cost	11,880	11,791
Less: Accumulated depreciation and amortization	(3,575)	(3,393)
Net property, plant and equipment	8,305	8,398
Total Regulatory Assets and Deferred Debits [Abstract]
Regulatory assets	781	798
Other	24	24
Total regulatory assets and deferred debits	805	822
Total Assets	9,939	10,062
LIABILITIES AND EQUITY
Accounts payable	209	273
Notes payable and commercial paper	113	300
Taxes accrued	50	74
Interest accrued	55	50
Current maturities of long-term debt	5	6
Other	132	93
Total current liabilities	564	796
Long-term Debt	3,702	3,453
Other Liabilities, Noncurrent [Abstract]
Deferred income taxes	835	927
Investment tax credits	142	143
Accrued pension and other post-retirement benefit costs	154	161
Asset retirement obligations	44	43
Regulatory liabilities	695	683
Other Liabilities	134	122
Total deferred credits and other liabilities	2,004	2,079
Equity
Common Stock	1	1
Additional paid-in capital	1,384	1,358
Retained earnings	2,278	2,368
Accumulated other comprehensive loss	6	7
Net Duke Energy Corporation Shareholders' Equity	3,669	3,734
Total equity	3,669	3,734
Total Liabilities and Equity	$ 9,939	$ 10,062

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Severance (Narrative)(Details) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2012 Employees
Number of employees accepted the Voluntary program	1,100
Minimum [Member]
Severance costs	225
Maximum [Member]
Severance costs	275

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Regulatory Matters (Narrative) (Details) (USD $)	3 Months Ended		6 Months Ended			3 Months Ended		6 Months Ended		3 Months Ended		6 Months Ended		12 Months Ended			6 Months Ended								6 Months Ended				3 Months Ended	6 Months Ended			3 Months Ended	6 Months Ended	3 Months Ended			6 Months Ended		12 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Dec. 31, 2011	Jun. 30, 2012 Duke Energy Indiana [Member]	Jun. 30, 2011 Duke Energy Indiana [Member]	Jun. 30, 2012 Duke Energy Indiana [Member]	Jun. 30, 2011 Duke Energy Indiana [Member]	Jun. 30, 2012 Duke Energy Ohio [Member]	Jun. 30, 2011 Duke Energy Ohio [Member]	Jun. 30, 2012 Duke Energy Ohio [Member]	Jun. 30, 2011 Duke Energy Ohio [Member]	Dec. 31, 2014 Duke Energy Ohio [Member]	Dec. 31, 2013 Duke Energy Ohio [Member]	Dec. 31, 2012 Duke Energy Ohio [Member]	Jun. 30, 2012 Duke Energy Ohio [Member] Ohio Electric Rate Case [Member]	Jun. 30, 2012 Duke Energy Ohio [Member] Ohio Natural Gas Rate Case [Member]	Jun. 30, 2012 Duke Energy Carolinas [Member]	Jun. 30, 2012 Duke Energy Carolinas [Member] Minimum [Member]	Jun. 30, 2012 Duke Energy Carolinas [Member] Maximum [Member]	Jun. 30, 2012 Duke Energy Carolinas [Member] North Carolina Rate Case [Member]	Jun. 30, 2012 Duke Energy Carolinas [Member] South Carolina Rate Case [Member]	Nov. 30, 2009 Edwardsport IGCC Plant [Member] Duke Energy Indiana [Member]	Jun. 30, 2012 Edwardsport IGCC Plant [Member] Duke Energy Indiana [Member] September 7, 2006 [Member]	Jun. 30, 2012 Edwardsport IGCC Plant [Member] Duke Energy Indiana [Member] May 1, 2008 [Member]	Jun. 30, 2012 Edwardsport IGCC Plant [Member] Duke Energy Indiana [Member] November 24, 2009 [Member]	Jun. 30, 2012 Edwardsport IGCC Plant [Member] Duke Energy Indiana [Member] April 16, 2010 [Member]	Sep. 30, 2010 Edwardsport IGCC Plant [Member] Duke Energy Indiana [Member] September 17, 2010 - Settlement Agreement [Member]	Jun. 30, 2012 Edwardsport IGCC Plant [Member] Duke Energy Indiana [Member] September 17, 2010 - Settlement Agreement [Member] basispoints	Jun. 30, 2012 Edwardsport IGCC Plant [Member] Duke Energy Indiana [Member] March 10, 2010 [Member]	Jun. 30, 2012 Edwardsport IGCC Plant [Member] Duke Energy Indiana [Member] June 27, 2011 [Member]	Sep. 30, 2011 Edwardsport IGCC Plant [Member] Duke Energy Indiana [Member] October 19, 2011 [Member]	Jun. 30, 2012 Edwardsport IGCC Plant [Member] Duke Energy Indiana [Member] October 19, 2011 [Member]	Mar. 31, 2012 Edwardsport IGCC Plant [Member] Duke Energy Indiana [Member] April 30, 2012 Settlement Agreement [Member]	Jun. 30, 2012 Edwardsport IGCC Plant [Member] Duke Energy Indiana [Member] April 30, 2012 Settlement Agreement [Member]	Jun. 30, 2012 Dan River Facility [Member] Duke Energy Carolinas [Member]	Jun. 30, 2012 Cliffside Unit 6 [Member] Duke Energy Carolinas [Member] MWh	Jun. 30, 2012 William State Lee III Nuclear Station [Member] Duke Energy Carolinas [Member] MWh	Dec. 31, 2011 Regional Transmission Organization Realignment [Member] Duke Energy Ohio [Member]	Jun. 30, 2012 Regional Transmission Organization Realignment [Member] Duke Energy Ohio [Member]
Ohio ESP non-bypassable stability charge														$ 110,000,000	$ 110,000,000	$ 110,000,000
Approved Rate Increase Amount by State Commission																						309,000,000	93,000,000
Average increase in retail revenues, percentage																	5.10%	6.60%				7.20%	5.98%
Requested Rate Increase Amount to State Commission																	87,000,000	45,000,000
Rate Increase Begin Date																	2013	2013				February 2012	February 6, 2012
Return on equity percentage																						10.50%	10.50%
Capital structure, Equity percentage																						53.00%	53.00%
Capital structure, Long-term debt percentage																						47.00%	47.00%
Required shareholder contribution to low income customers or agencies.																						11,000,000	4,000,000
Estimated capital cost of new utility plant, excluding AFUDC																																						1,800,000,000
Estimated capital cost of new utility plant, including AFUDC																																					710,000,000
Plant capacity, MW																																						825	1,117
Estimated AFUDC on Capital Project																									120,000,000	125,000,000		160,000,000										600,000,000
Revised Afudc Financing Costs																																						400,000,000
Federal Clean Coal Tax Credits								134,000,000											125,000,000																			125,000,000
Edwardsport IGCC original estimated and approved capital cost, including AFUDC																									1,985,000,000
Edwardsport IGCC revised estimated capital cost, including AFUDC																										2,350,000,000		2,880,000,000		2,760,000,000
Edwardsport IGCC estimated additional capital cost																											150,000,000	530,000,000
Edwardsport IGCC - Cost Cap for Customers																														2,975,000,000						2,595,000,000
Edwardsport IGCC basis point reduction in the equity return for project construction costs																														150
Edwardsport IGCC committed costs, as claimed by intervenors																								1,600,000,000
Edwardsport IGCC Impairment charges	0	9,000,000	402,000,000	9,000,000		0	0	400,000,000	0	0	9,000,000	0	9,000,000																44,000,000				222,000,000		400,000,000
Edwardsport IGCC impairment and other charges																																			420,000,000
Edwarsport IGCC original customer rate increase																															19.00%
Edwardsport IGCC revised customer rate increase																															16.00%
Edwardsport IGCC revised estimated capital costs, excluding AFUDC																															2,720,000,000	2,820,000,000		2,980,000,000
Edwardsport IGCC legal fee charges from settlement																																			20,000,000
MVP project costs approved by MISO																																								5,200,000,000
MISO exit fees not eligible for recovery																																								121,000,000
MISO Exit Liability	23,000,000		23,000,000		32,000,000																																			110,000,000	97,000,000
MISO exit recorded to regulatory assets																																								74,000,000
MISO exit fees recorded to expense																																								36,000,000
Indiana Carbon Sequestration requested amount of environmental cost recovery								121,000,000
Indiana Carbon Sequestration recommended approval amount of environmental cost recovery								33,000,000
Amended deferral amount to cover environmental cost								42,000,000
VC Summer Ownership Percentage																				5.00%	10.00%
EPA Compliance Capital Costs								$ 450,000,000

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Related Party Transactions (Pension)(Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Duke Energy Carolinas [Member]
Other current liabilities	$ 8	$ 8
Accrued pension and other post-retirement benefit costs	232	248
Total allocated accrued pension and other post-retirement benefit obligations	240	256
Duke Energy Ohio [Member]
Other current liabilities	4	4
Accrued pension and other post-retirement benefit costs	160	166
Total allocated accrued pension and other post-retirement benefit obligations	164	170
Duke Energy Indiana [Member]
Other current liabilities	2	2
Accrued pension and other post-retirement benefit costs	222	231
Total allocated accrued pension and other post-retirement benefit obligations	$ 224	$ 233

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Business Segments (Tables)

6 Months Ended

Jun. 30, 2012

Business Segment Data

Business Segment Data
								Segment Income/
		Unaffiliated		Intersegment		Total		Consolidated
(in millions)		Revenues		Revenues		Revenues		Net Income(a)
Three Months Ended June 30, 2012
USFE&G		$	2,688	$	9	$	2,697	$	337
Commercial Power			488		14		502		28
International Energy			397		―		397		105
	Total reportable segments		3,573		23		3,596		470
Other			4		12		16		(25)
Eliminations			―		(35)		(35)		―
Add back of noncontrolling interest component			―		―		―		4
Income from Discontinued Operations, net of tax			―		―		―		(1)
	Total consolidated	$	3,577	$	―	$	3,577	$	448
Three Months Ended June 30, 2011
USFE&G		$	2,540	$	9	$	2,549	$	297
Commercial Power			592		3		595		30
International Energy			406		―		406		127
	Total reportable segments		3,538		12		3,550		454
Other			(4)		13		9		(19)
Eliminations			―		(25)		(25)		―
Add back of noncontrolling interest component			―		―		―		6
	Total consolidated	$	3,534	$	―	$	3,534	$	441

								Segment Income/
		Unaffiliated		Intersegment		Total		Consolidated
(in millions)		Revenues		Revenues		Revenues		Net Income(a)
Six Months Ended June 30, 2012
USFE&G(b)		$	5,348	$	17	$	5,365	$	473
Commercial Power			1,052		30		1,082		59
International Energy			799		―		799		247
	Total reportable segments		7,199		47		7,246		779
Other			8		23		31		(41)
Eliminations			―		(70)		(70)		―
Add back of noncontrolling interest component			―		―		―		8
Income from Discontinued Operations, net of tax			―		―		―		1
	Total consolidated	$	7,207	$	―	$	7,207	$	747
Six Months Ended June 30, 2011
USFE&G		$	5,214	$	18	$	5,232	$	638
Commercial Power			1,234		5		1,239		79
International Energy			754		―		754		255
	Total reportable segments		7,202		23		7,225		972
Other			(5)		25		20		(26)
Eliminations			―		(48)		(48)		―
Add back of noncontrolling interest component			―		―		―		8
	Total consolidated	$	7,197	$	―	$	7,197	$	954
(a)	Segment results exclude noncontrolling interests and results of entities classified as discontinued operations.
(b)	As discussed further in Note ##REGMAT, Duke Energy recorded pre-tax impairment and other charges of $420 million in the first quarter of 2012 related to the Edwardsport IGCC project.

Business Segment Data
				Segment Income/
		Unaffiliated		Consolidated
(in millions)		Revenues(a)		Net Income
Three Months Ended June 30, 2012
Franchised Electric and Gas		$	387	$	30
Commercial Power			342		17
	Total reportable segments		729		47
Other			―		(2)
Eliminations			(12)		―
	Total consolidated	$	717	$	45
Three Months Ended June 30, 2011
Franchised Electric and Gas		$	315	$	29
Commercial Power			379		6
	Total reportable segments		694		35
Other			―		(2)
	Total consolidated	$	694	$	33

				Segment Income/
		Unaffiliated		Consolidated
(in millions)		Revenues(a)		Net Income
Six Months Ended June 30, 2012
Franchised Electric and Gas		$	860	$	64
Commercial Power			796		61
	Total reportable segments		1,656		125
Other			―		(6)
Eliminations			(27)		―
	Total consolidated	$	1,629	$	119
Six Months Ended June 30, 2011
Franchised Electric and Gas		$	779	$	77
Commercial Power			794		34
	Total reportable segments		1,573		111
Other			―		(5)
	Total consolidated	$	1,573	$	106
(a)	There was an insignificant amount of intersegment revenues for the three and six months ended June 30, 2011.

Segment Assets

Segment Assets
	Segment assets in the following table exclude all intercompany assets.
(in millions)		June 30, 2012		December 31, 2011
USFE&G		$	48,451	$	47,977
Commercial Power			7,268		6,939
International Energy			4,678		4,539
	Total reportable segments		60,397		59,455
Other			2,593		2,961
Reclassifications(a)			41		110
	Total consolidated assets	$	63,031	$	62,526
(a)	Primarily represents reclassification of federal tax balances in consolidation.

Segment Assets
	Segment assets in the following table exclude all intercompany assets.
(in millions)		June 30, 2012		December 31, 2011
Franchised Electric and Gas		$	6,559	$	6,293
Commercial Power			4,742		4,740
	Total reportable segments		11,301		11,033
Other			142		259
Reclassifications(a)			(465)		(353)
	Total consolidated assets	$	10,978	$	10,939
(a)	Primarily represents reclassification of federal tax balances in consolidation.

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Debt And Credit Facilities (Schedule Of Money Pool Balances) (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Duke Energy Carolinas [Member]
Money Pool Receivables	$ 244	$ 923
Money Pool Long Term Debt	300	300
Duke Energy Ohio [Member]
Money Pool Receivables	181	311
Duke Energy Indiana [Member]
Money Pool Notes Payable	113	300
Money Pool Long Term Debt	$ 150	$ 150

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Investments In Debt And Equity Securities

6 Months Ended

Jun. 30, 2012

Investments In Debt And Equity Securities

10. Investments in Debt and Equity Securities

The Duke Energy Registrants classify their investments in debt and equity securities into two categories – trading and available-for-sale.

Trading Securities.Investments in debt and equity securities held in grantor trusts associated with certain deferred compensation plans and certain other investments are classified as trading securities and are reported at fair value in the Condensed Consolidated Balance Sheets with net realized and unrealized gains and losses included in earnings each period. At June 30,2012 and December 31, 2011, the fair value of these investments was $31 million and $32 million, respectively.

Available for Sale Securities.All other investments in debt and equity securities are classified as available-for-sale securities, which are also reported at fair value on the Condensed 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 Energy's available-for-sale securities are primarily comprised of investments held in the NDTF at Duke Energy Carolinas, investments in a grantor trust at Duke Energy Indiana related to other post-retirement benefit plans as required by the IURC, Duke Energy captive insurance investment portfolio, Duke Energy's foreign operations investment portfolio and investments of Duke Energy and Duke Energy Carolinas in auction rate debt securities.

The investments within the Duke Energy Carolinas NDTF and the Duke Energy Indiana 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 Carolinas and Duke Energy Indiana have 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 Carolinas and Duke Energy Indiana. Accordingly, all unrealized gains and losses associated with equity securities within the Duke Energy Carolinas NDTF and the Duke Energy Indiana 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. Pursuant to regulatory accounting, substantially all unrealized losses associated with investments in debt and equity securities within the Duke Energy Carolinas NDTF and the Duke Energy Indiana grantor trust are deferred as a regulatory asset or liability. As a result there is no immediate impact on the earnings of Duke Energy Carolinas and Duke Energy Indiana.

For investments in debt and equity securities held in the captive insurance investment portfolio, Duke Energy's foreign operations investment portfolio and investments in auction rate debt 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. If so, the write-down to fair value may be included in earnings based on the criteria discussed below.

For available-for-sale securities outside of the Duke Energy Carolinas NDTF and the Duke Energy Indiana grantor trust, which are discussed separately above, Duke Energy analyzes all investment holdings each reporting period to determine whether a decline in fair value should be considered other-than-temporary. Criteria used to evaluate whether an impairment associated with equity securities is other-than-temporary includes, but is not limited to, the length of time over which the market value has been lower than the cost basis of the investment, the percentage decline compared to the cost of the investment and management's intent and ability to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in market value. If a decline in fair value is determined to be other-than-temporary, the investment is written down to its fair value through a charge to earnings.

With respect to investments in debt securities, under the accounting guidance for other-than-temporary impairment, if the entity does not have an intent to sell the security and it is not more likely than not that management will be required to sell the debt security before the recovery of its cost basis, the impairment write-down to fair value would be recorded as a component of other comprehensive income, except for when it is determined that a credit loss exists. In determining whether a credit loss exists, management considers, among other things, the length of time and the extent to which the fair value has been less than the amortized cost basis, changes in the financial condition of the issuer of the security, or in the case of an asset backed security, the financial condition of the underlying loan obligors, consideration of underlying collateral and guarantees of amounts by government entities, ability of the issuer of the security to make scheduled interest or principal payments and any changes to the rating of the security by rating agencies. If it is determined that a credit loss exists, the amount of impairment write-down to fair value would be split between the credit loss, which would be recognized in earnings, and the amount attributable to all other factors, which would be recognized in other comprehensive income. Management believes, based on consideration of the criteria above, that no credit loss exists as of June 30, 2012 and December 31, 2011. Management does not have the intent to sell such investments in auction rate debt securities and the investments in debt securities within its captive insurance investment portfolio and foreign operations investment portfolio, and it is not more likely than not that management will be required to sell these securities before the anticipated recovery of their cost basis. Management has concluded that there were no other-than-temporary impairments for debt or equity securities necessary as ofJune 30, 2012 and December 31, 2011.Accordingly, all changes in the market value of investments other than the Duke Energy Carolinas NDTF and the Duke Energy Indiana Grantor Trust were reflected as a component of other comprehensive income in2012 and 2011.

See Note 9 for additional information related to fair value measurements for investments in auction rate debt securities.

Short-term and Long-term investments. Investments in debt and equity securities are classified as either short-term investments or long-term investments based on management's intent and ability to sell these securities, taking into consideration illiquidity factors in the current markets.

Duke Energy holds corporate debt securities which were purchased using excess cash from its foreign operations. These investments are classified as Short-term Investments on the balance sheet and are available for current operations of Duke Energy's foreign business. Duke Energy held short-term investments with a fair value of $234 million as of June 30, 2012 and $190 million as of December 31, 2011.

Duke Energy classifies its investments in debt and equity securities held in the Duke Energy Carolinas NDTF (see Note 9 for further information), the Duke Energy Indiana grantor trust and the captive insurance investment portfolio as long-term. Additionally, Duke Energy has classified $41 million carrying value ($50 million par value) and $71 million carrying value ($89 million par value) of investments in auction rate debt securities as long-term at June 30, 2012 and December 31, 2011, respectively, due to market illiquidity factors as a result of continued failed auctions. All of these investments are classified as available-for-sale and, therefore, are reflected on the Condensed Consolidated Balance Sheets at estimated fair value based on either quoted market prices or management's best estimate of fair value based on expected future cash flow using appropriate risk-adjusted discount rates. Since management does not intend to use these investments in current operations, these investments are classified as long-term.

	The estimated fair values of short-term and long-term investments for Duke Energy, Duke Energy Carolinas and Duke Energy
Indiana are as follows (in millions):
		June 30, 2012						December 31, 2011
(in millions)		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses		Estimated Fair Value		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses		Estimated Fair Value
Duke Energy Carolinas NDTF
Equity Securities		$	522	$	17	$	1,470	$	443	$	16	$	1,337
Corporate Debt Securities			10		2		221		8		2		205
Municipal Bonds			2		―		73		2		―		51
U.S. Government Bonds			12		―		277		16		―		306
Other			4		1		163		4		4		161
Total Duke Energy Carolinas NDTF(a)		$	550	$	20	$	2,204	$	473	$	22	$	2,060
Duke Energy Indiana Grantor Trust
Equity Securities		$	7	$	1	$	46	$	5	$	1	$	46
Municipal Bonds			1		―		28		1		―		28
Total Duke Energy Indiana Grantor Trust(a)		$	8	$	1	$	74	$	6	$	1	$	74
Other Investments
Equity Securities		$	1	$	1	$	20	$	―	$	1	$	14
Corporate Debt Securities			2		―		295		1		1		241
Municipal Bonds			―		―		1		―		―		―
U.S. Government Bonds			―		―		28		1		―		21
Other			1		―		107		2		―		68
Auction Rate Securities(b)			―		9		41		―		17		71
Total Other Investments		$	4	$	10	$	492	$	4	$	19	$	415
Total Duke Energy Investments		$	562	$	31	$	2,770	$	483	$	42	$	2,549
(a)	Unrealized losses on investments within the Duke Energy Carolinas NDTF and Duke Energy Indiana grantor trust are deferred as regulatory assets pursuant to regulatory accounting treatment.
(b)	At June 30, 2012 and December 31, 2011, $6 million and $12 million of these securities were held by Duke Energy Carolinas, respectively. Gross unrealized holding gains on these securities held by Duke Energy Carolinas were insignificant at both June 30, 2012 and December 31, 2011. Gross unrealized holding losses on these securities held by Duke Energy Carolinas were $1 million at June 30, 2012 and $3 million at December 31, 2011.

	The table below summarizes the maturity date for debt securities held by Duke Energy, Duke Energy Carolinas, and Duke Energy Indiana.
(in millions)		< 1 Year		1-5 Years		6-10 Years		Thereafter
Duke Energy(a)		$	164	$	345	$	212	$	471
Duke Energy Carolinas(a)		$	45	$	146	$	174	$	369
Duke Energy Indiana		$	―	$	21	$	5	$	2
(a)	Excludes auction rate securities based on the stated maturity date. See Note ##FVFAL for information about fair value measurements related to investments in auction rate debt securities.

The fair values and gross unrealized losses of available-for-sale debt and equity securities which are in an unrealized loss position for which other-than-temporary impairment losses have not been recorded, summarized by investment type and length of time that the securities have been in a continuous loss position, are presented in the table below for Duke Energy, Duke Energy Carolinas, and Duke Energy Indiana.

		June 30, 2012						December 31, 2011
				Unrealized		Unrealized				Unrealized		Unrealized
				Loss		Loss				Loss		Loss
				Position		Position				Position		Position
(in millions)		Fair Value		>12 months		<12 months		Fair Value		>12 months		<12 months
Duke Energy Carolinas NDTF
Equity Securities		$	117	$	7	$	11	$	111	$	4	$	12
Corporate Debt Securities			29		―		1		57		1		1
Municipal Bonds			21		―		―		―		―		―
U.S. Government Bonds			27		―		―		8		―		―
Other			78		―		1		113		1		3
Total Duke Energy Carolinas NDTF(a)		$	272	$	7	$	13	$	289	$	6	$	16
Duke Energy Indiana Grantor Trust
Equity Securities		$	8	$	―	$	1	$	8	$	―	$	1
Municipal Bonds			10		―		―		3		―		―
Total Duke Energy Indiana Grantor Trust(a)		$	18	$	―	$	1	$	11	$	―	$	1
Other Investments
Equity Securities		$	6	$	1	$	―	$	4	$	1	$	―
Corporate Debt Securities			243		―		―		201		1		―
Municipal Bonds			1		―		―		―		―		―
U.S. Government Bonds			12		―		―		―		―		―
Other			11		―		―		8		―		―
Auction Rate Securities(b)			41		9		―		71		17		―
Total Other Investments		$	314	$	10	$	―	$	284	$	19	$	―
Total Duke Energy Investments		$	604	$	17	$	14	$	584	$	25	$	17
(a)	Unrealized losses on investments within the Duke Energy Carolinas NDTF and Duke Energy Indiana grantor trust are deferred as regulatory assets pursuant to regulatory accounting treatment.
(b)	At June 30, 2012 and December 31, 2011, $6 million and $12 million of these securities, respectively, were held by Duke Energy
	Carolinas. The gross unrealized losses on these securities held by Duke Energy Carolinas which were in an unrealized loss position greater than 12 months were $1 million at June 30, 2012 and $3 million at December 31, 2011.

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Regulatory Matters (Tables)

6 Months Ended

Jun. 30, 2012

Schedule of Potential Plant Retirements

		June 30, 2012
		Duke Energy		Duke Energy Carolinas(b)(c)		Duke Energy Ohio(d)		Duke Energy Indiana(e)
Capacity (in MW)			2,773		1,080		1,025		668
Remaining net book value (in millions)(a)		$	327	$	176	$	13	$	138
(a)	Included in Property, plant and equipment, net as of June 30, 2012, on the Condensed Consolidated Balance Sheets, unless otherwise noted.
(b)	Includes Riverbend Units 4 through 7, Lee Units 1 through 3 and Buck Units 5 and 6. Duke Energy Carolinas has committed to retire 1,667 MW in conjunction with a Cliffside air permit settlement, of which 587 MW have already been retired as of June 30, 2012.
(c)	Net book value of Buck Units 5 and 6 of $73 million is included in Generation facilities to be retired, net, on the Condensed Consolidated Balance Sheets at June 30, 2012.
(d)	Includes Beckjord Station and Miami Fort Unit 6. Beckjord has no remaining book value.
(e)	Includes Wabash River Units 2 through 6.
Duke Energy continues to evaluate the potential need to retire these coal-fired generating facilities earlier than the current estimated useful lives, and plans to seek regulatory recovery for amounts that would not be otherwise recovered when any of these assets are retired.

Schedule of MISO Exit Fee Obligations

	Balance at		Provision /		Cash		Balance at
(in millions)	December 31, 2011		Adjustments		Reductions		June 30, 2012
Duke Energy Ohio	$	110	$	2	$	(15)	$	97

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Related Party Transactions(AssetsLiabilities)(Details) (USD $) In Millions, unless otherwise specified	6 Months Ended	12 Months Ended
	Jun. 30, 2012	Dec. 31, 2011
Duke Energy Carolinas [Member]
Receivables	$ 0	$ 2
Accounts payable	(97)	(157)
Noncurent assets	111	111
Noncurrent liabilities	(64)	(64)
Deferred income taxes	(4,891)	(4,555)
Accrued taxes	(10)	(14)
Other current assets	95	95
Duke Energy Ohio [Member]
Receivables	7	15
Accounts payable	(73)	(84)
Noncurent assets	28	22
Noncurrent liabilities	(34)	0
Deferred income taxes	(1,882)	(1,798)
Accrued taxes	(4)
Other current assets	98	76
Duke Energy Indiana [Member]
Receivables	16	18
Accounts payable	(38)	(72)
Noncurent assets	2	2
Noncurrent liabilities	(22)	(22)
Deferred income taxes	(835)	(927)
Accrued taxes	0	(25)
Other current assets	7	13
Other current liabilities	$ (8)

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Earnings Per Share

6 Months Ended

Jun. 30, 2012

Jun. 30, 2011

Earnings Per Share [Abstract]

Earnings Per Share

12. Earnings Per Common Share (EPS)

Basic Earnings Per Share (EPS) is computed by dividing net income attributable to Duke Energy common shareholders, adjusted for distributed and undistributed earnings allocated to participating securities, by the weighted-average number of common shares outstanding during the period. Diluted EPS is computed by dividing net income attributable to Duke Energy common shareholders, as adjusted for distributed and undistributed earnings allocated to participating securities, 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.

On July 2, 2012, just prior to the close of the merger with Progress Energy, Duke Energy executed a one-for-three reverse stock split. All earnings per share amounts included in this 10-Q are presented as if the one-for-three reverse stock split had been effective January 1, 2011. The following table, which includes the effects of the reverse stock split, illustrates Duke Energy's 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:

			Average
(In millions, except per-share amounts)	Income		Shares		EPS
Six Months Ended June 30, 2012
Income from continuing operations attributable to Duke Energy common shareholders, as adjusted for participating securities — basic	$	736		446	$	1.65
Effect of dilutive securities:
Stock options, performance and restricted stock				―
Income from continuing operations attributable to Duke Energy common shareholders, as adjusted for participating securities — diluted	$	736		446	$	1.65
Six Months Ended June 30, 2011
Income from continuing operations attributable to Duke Energy common shareholders, as adjusted for participating securities — basic	$	944		444	$	2.13
Effect of dilutive securities:
Stock options, performance and restricted stock				―
Income from continuing operations attributable to Duke Energy common shareholders, as adjusted for participating securities — diluted	$	944		444	$	2.13

As of June 30, 2012 and 2011, 4 million and 2 million, respectively, of stock options and performance and unvested stock awards were not included in the “effect of dilutive securities” in the above table because either the option exercise prices were greater than the average market price of the common shares during those periods, or performance measures related to the awards had not yet been met.

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Risk Management, Derivative Instruments And Hedging Activities (Narrative) (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2012
Pre-tax deferred net losses on derivative instruments in AOCI	$ 129
Gain expected to be recognized in earnings during the next 12 months	$ 10

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Condensed Consolidated Balance Sheets (Parenthetical) In Millions, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011	Jun. 30, 2011	Dec. 31, 2010
Common stock, shares outstanding	446	445	444	443

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Condensed Consolidated Statement of Operations (Parenthetical) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Pension and OPEB related adjustments to AOCI, tax	$ 1	$ 0	$ 3	$ (3)
Net unrealized gains (losses) on cash flow hedges, tax	(14)	(3)	(9)	(2)
Reclassification into earnings from cash flow hedges, tax	(2)	1	0	1
Duke Energy Carolinas [Member]
Reclassification into earnings from cash flow hedges, tax	2	2	2	2
Duke Energy Ohio [Member]
Pension and OPEB related adjustments to AOCI, tax	$ 0	$ 0	$ 0	$ 1

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Commitments And Contingencies

6 Months Ended

Jun. 30, 2012

Commitments And Contingencies

5. 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. Duke Energy Carolinas, Duke Energy Ohio and Duke Energy Indiana are subject to 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 the Duke Energy Registrants.

The following environmental matters impact all of the Duke Energy Registrants.

Remediation Activities. The Duke Energy Registrants are responsible for environmental remediation at various contaminated sites. These include some properties that are part of ongoing operations and sites formerly owned or used by Duke Energy entities. In some cases, Duke Energy no longer owns the property. Managed in conjunction with relevant federal, state and local agencies, activities vary with site conditions and locations, remediation requirements, complexity and sharing of responsibility. If remediation activities involve statutory joint and several liability provisions, strict liability, or cost recovery or contribution actions, the Duke Energy Registrants could potentially be held responsible for contamination caused by other parties. In some instances, the Duke Energy Registrants 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. Reserves associated with remediation activities at certain sites have been recorded and it is anticipated that additional costs associated with remediation activities at certain sites will be incurred in the future. All of these sites generally are managed in the normal course of business or affiliate operations. The Duke Energy Registrants have accrued 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 environmentally related contingencies and records liabilities when losses become probable and are reasonably estimable. Costs associated with remediation activities within the Duke Energy Registrants' operations are typically expensed unless regulatory recovery of the costs is deemed probable.

As of June 30,2012, Duke Energy Ohio had a total reserve of $22 million, related to remediation work at certain former manufactured gas plant (MGP) sites. Duke Energy Ohio has received an order from the PUCO to defer the costs incurred. As of June 30,2012, Duke Energy Ohio has incurred and deferred $75 million of costs related to the MGP sites. The PUCO will rule on the recovery of these costs at a future proceeding. Management believes it is probable that additional liabilities will be incurred as work progresses at Ohio MGP sites; however, costs associated with future remediation cannot currently be reasonably estimated.

Clean Water Act 316(b). The EPA published its proposed cooling water intake structures rule on April 20, 2011. Duke Energy submitted comments on the proposed rule on August 16, 2011. The proposed rule advances one main approach and three alternatives. The main approach establishes aquatic protection requirements for existing facilities and new on-site facility additions that withdraw 2 million gallons or more of water per day from rivers, streams, lakes, reservoirs, estuaries, oceans, or other U.S. waters for cooling purposes. Based on the main approach proposed, most, if not all of the 22 coal and nuclear-fueled generating facilities in which the Duke Energy Registrants are either a whole or partial owner are likely affected sources. Additional sources, including some combined-cycle combustion turbine facilities, may also be impacted, at least for intake modifications.

The EPA recently modified a previous settlement agreement that now calls for the EPA to finalize the 316(b) rule byJune2013. Compliance with portions of the rule could begin as early as 2016. Because of the wide range of potential outcomes, including the other three alternative proposals, the Duke Energy Registrants are unable to estimate its costs to comply at this time.

Cross-State Air Pollution Rule (CSAPR). On August 8, 2011, the final Cross-State Air Pollution Rule (CSAPR) was published in the Federal Register. The CSAPR established state-level annual SO2 and NOx budgets that were to take effect on January 1, 2012, and state-level ozone-season NOx budgets that were to take effect on May 1, 2012, allocating emission allowances to affected sources in each state equal to the state budget less an allowance set-aside for new sources. The budget levels were set to decline in 2014 for many states, including each state that the Duke Energy Registrants operate in, except for South Carolina where the budget levels were to remain constant. The rule allowed both intrastate and interstate allowance trading.

Numerous petitions for review of the CSAPR and motions for stay of the CSAPR were filed with the United States Court of Appeals for the District of Columbia. On December 30, 2011, the court ordered a stay of the CSAPR pending the court's resolution of the various petitions for review. Based on the court's order, the EPA continues to administer the Clean Air Interstate Rule that the Duke Energy Registrants have been complying with since 2009 and which was to be replaced by the CSAPR beginning in 2012. Oral arguments in the case were held on April 13, 2012. A decision is expected in the third quarter of 2012.

The stringency of the 2012 and 2014 CSAPR requirements varied among the Duke Energy Registrants. Where the CSAPR requirements were to be constraining, activities to meet the requirements could include purchasing emission allowances, power purchases, curtailing generation and utilizing low sulfur fuel. The CSAPR was not expected to result in Duke Energy Registrants adding new emission controls. Technical adjustments to the CSAPR recently finalized by the EPA will not materially impact the Duke Energy Registrants. The Duke Energy Registrants cannot predict the outcome of the litigation or how it might affect the CSAPR requirements as they apply to the Duke Energy Registrants.

Coal Combustion Product (CCP) Management. Duke Energy currently estimates that it will spend $259million ($78 million at Duke Energy Carolinas, $63 million at Duke Energy Ohio and $118 million at Duke Energy Indiana) over the period 2012-2016 to install synthetic caps and liners at existing and new CCP landfills and to convert some of its CCP handling systems from wet to dry systems to comply with current regulations. A significant portion of the estimated spending will be capitalized as property, plant and equipment, while certain of the costs are the result of a legal obligation as defined by accounting guidance applicable to asset retirement obligations. The Duke Energy Registrants expect to recover the costs associated with regulated operations through routine regulatory rate proceedings. The EPA and a number of states are considering additional regulatory measures that will contain specific and more detailed requirements for the management and disposal of CCPs, primarily ash, which will also impact the Duke Energy Registrants' coal-fired power plants.

On June21, 2010, the EPA issued a proposal to regulate, under the Resource Conservation and Recovery Act, coal combustion residuals (CCR), a term the EPA uses to describe the CCPs associated with the generation of electricity. The EPA proposal contains two regulatory options whereby CCRs not employed in approved beneficial use applications would either be regulated as hazardous waste or would continue to be regulated as non-hazardous waste. Duke Energy cannot predict the outcome of this rulemaking. However, based on the proposal, the cost of complying with the final regulation will be material. The timing of a final rule is uncertain, but is not expected before sometime in 2013 at the earliest. A lawsuit has been filed in federal court seeking an unspecified legal deadline for the EPA to issue a final rule. The EPA is opposing the imposition of a legal deadline.

Mercury and Air Toxics Standards (MATS). The final Mercury and Air Toxics Standards rule (previously referred to as the Utility MACT Rule) was published in the Federal Register on February 16, 2012. The final rule establishes emission limits for hazardous air pollutants, including mercury from new and existing coal-fired electric generating units. The rule requires sources to comply with the emission limits by April 16, 2015. Under the Clean Air Act, permitting authorities have the discretion to grant up to a 1-year compliance extension, on a case-by-case basis, to sources that are unable to complete the installation of emission controls before the compliance deadline. The Duke Energy Registrants are evaluating the requirements of the rule and developing strategies for complying with the rule's requirements. Strategies to achieve compliance with the final MATS rules are likely to include installing new or upgrading existing air emission control equipment, developing monitoring processes and accelerating retirement of some coal-fired electric-generating units. For additional information, refer to Note 4, Regulatory Matters, regarding potential plant retirements.

Numerous petitions for review of the final MATS rule have been filed with the United States Court of Appeals for the District of Columbia. The court has not established a schedule for the litigation. The Duke Energy Registrants cannot predict the outcome of the litigation or how it might affect the MATS requirements as they apply to the Duke Energy Registrants.

As finalized, the cost to the Duke Energy Registrants to comply with the regulation will be material.

EPA Greenhouse Gas New Source Performance Standards (NSPS). On April 13, 2012, the EPA published in the Federal Register its proposed rule to establish carbon dioxide (CO2) emissions standards for pulverized coal, IGCC, and natural gas combined cycle electric generating units that are permitted and constructed in the future. The proposal would not apply to any of the Duke Energy Registrants' coal (which includes IGCC) and natural gas generation plants that are currently under construction or in operation. Any future pulverized coal and IGCC units will have to employ carbon capture and storage (CCS) technology to meet the CO2 emission standard the EPA has proposed. The proposed standard will not require new natural gas combined cycle facilities to install CCS technology.

Management does not expect any material impact on the Duke Energy Registrants' future results of operations or cash flows based on the EPA's proposal. The final rule, however, could be significantly different from the proposal. It is not known when the EPA might finalize the rule.

Estimated Cost and Impacts of EPA Rulemakings. While the ultimate compliance requirements for the Duke Energy Registrants for MATS, Clean Water Act 316(b), CSAPR and CCRs will not be known until all the rules have been finalized, for planning purposes, the Duke Energy Registrants currently estimate that the cost of new control equipment that may need to be installed on existing power plants to comply with this group of rules could total $4.5 billion to $5 billion, excluding AFUDC, over the next 10 years. The Duke Energy Registrants also expect to incur increased fuel, purchased power, operation and maintenance, and other expenses in conjunction with these EPA regulations, and also expect to incur costs for replacement generation for potential coal plant retirements.Until the final regulatory requirements of the group of EPA regulations are known and can be fully evaluated, the potential compliance costs associated with these EPA regulatory actions are subject to considerable uncertainty. Therefore, the actual compliance costs incurred may be materially different from these estimates based on the timing and requirements of the final EPA regulations.

The Duke Energy Registrants intend to seek regulatory recovery of amounts incurred associated with regulated operations in complying with these regulations. Refer to Note 4 for further information regarding potential plant retirements and regulatory filings related to the Duke Energy Registrants.

Litigation.

Duke Energy

Progress Energy Merger Shareholder Litigation. On July 20, 2012, Duke Energy was served with a shareholder Derivative Complaint filed in the Delaware Chancery Court (Rupp v. Rogers, et al).The lawsuit names as defendants Jim Rogers and the ten other members of the Duke Energy board of directors who were also members of the pre-merger Duke Energy board of directors (Legacy Duke Directors).  Duke Energy is named as a nominal defendant.  The lawsuit alleges claims for breach of fiduciary duties of loyalty and care by the defendants in connection with the post-merger change in CEO, as discussed in Note 4.

On August 3, 2012, Duke Energy was served with a second shareholder Derivative Complaint, which has been transferred to the North Carolina Business Court (Krieger v. Johnson, et al). The lawsuit names as defendants,William D. Johnson, James E. Rogers and the Legacy Duke Directors.  Duke Energy is named as a nominal defendant.  The lawsuit alleges claims for breach of fiduciary duty in granting excessive compensation to Mr. Johnson.

Duke Energy has also received three purported securities class action lawsuits.  The first case (Craig v. Duke Energy Corporation, et al,) was filed on July 24, 2012, in the United States District Court for the Eastern District of North Carolina, Western Division and is brought on behalf of all persons who purchased Duke Energy stock between June 28, 2012 and July 9, 2012.  The second case (Nieman v. Duke Energy Corporation, et al,)was filed on July 24, 2012, in the United States District Court for the Western District of North Carolina on behalf of all persons who exchanged shares of Progress Energy common stock for shares of Duke Energy common stock in connection with the merger.  The third case (Sunner v. Duke Energy Corporation, et al,) was filed on July 30, 2012, in the United States District Court for the Western District of North Carolina on behalf of all persons who purchased stock of Duke Energy between June 11, 2012 and July 9, 2012  All three of these lawsuits name as defendants the Legacy Duke Directors. The Craig and Nieman cases also name certain officers of the company.  

It is not possible to predict whether Duke Energy will incur any liability or to estimate the damages, if any, that Duke Energy might incur in connection with these lawsuits. Additional lawsuits may be filed.

Alaskan Global Warming Lawsuit. On February 26, 2008, plaintiffs, the governing bodies of an Inupiat village in Alaska, filed suit in the U.S. Federal Court for the Northern District of California against Peabody Coal and various oil and power company defendants, including Duke Energy and certain of its subsidiaries. Plaintiffs brought the action on their own behalf and on behalf of the village's 400 residents. The lawsuit alleges that defendants' emissions of CO2 contributed to global warming and constitute a private and public nuisance. Plaintiffs also allege that certain defendants, including Duke Energy, conspired to mislead the public with respect to global warming. The plaintiffs in the case have requested damages in the range of $95 million to $400 million related to the cost of relocating the Village of Kivalina. On June 30, 2008, the defendants filed a motion to dismiss on jurisdictional grounds, together with a motion to dismiss the conspiracy claims. On October 15, 2009, the District Court granted defendants motion to dismiss. The plaintiffs filed a notice of appeal and the Ninth Circuit Court of Appeals held argument in the case on November 28, 2011. Although Duke Energy believes the likelihood of loss is remote based on current case law, it is not possible to predict the ultimate outcome of this matter.

Price Reporting Cases. A total of five lawsuits were filed against Duke Energy affiliates and other energy companies and remain pending in a consolidated, single federal court proceeding in Nevada.

In November 2009, the judge granted defendants' motion for reconsideration of the denial of defendants' summary judgment motion in two of the remaining five cases to which Duke Energy affiliates are a party. A hearing on that motion occurred on July 15, 2011, and on July 19, 2011, the judge granted the motion for summary judgment. Plaintiffs have filed a notice of appeal to the U.S. Court of Appeals for the Ninth Circuit.

Each of these cases contains similar claims, that the respective plaintiffs, and the classes they claim to represent, were harmed by the defendants' alleged manipulation of the natural gas markets by various means, including providing false information to natural gas trade publications and entering into unlawful arrangements and agreements in violation of the antitrust laws of the respective states. Plaintiffs seek damages in unspecified amounts. It is not possible to predict whether Duke Energy will incur any liability or to estimate the damages, if any, that Duke Energy might incur in connection with the remaining matters. However, based on Duke Energy's past experiences with similar cases of this nature, it does not believe its exposure under these remaining matters is material.

Duke Energy International Paranapanema Lawsuit. On July 16, 2008, Duke Energy International Geracao Paranapanema S.A. (DEIGP) filed a lawsuit in the Brazilian federal court challenging transmission fee assessments imposed under two new resolutions promulgated by the Brazilian Electricity Regulatory Agency (ANEEL) (collectively, the Resolutions). The Resolutions purport to impose additional transmission fees (retroactive to July 1, 2004 and effective through June 30, 2009) on generation companies located in the State of São Paulo for utilization of the electric transmission system. The new charges are based upon a flat-fee that fails to take into account the locational usage by each generator. DEIGP's additional assessment under these Resolutions amounts to approximately $59 million, inclusive of interest, through June 2012. Based on DEIGP's continuing refusal to tender payment of the disputed sums, on April 1, 2009, ANEEL imposed an additional fine against DEIGP in the amount of $9 million. DEIGP filed a request to enjoin payment of the fine and for an expedited decision on the merits or, alternatively, an order requiring that all disputed sums be deposited in the court's registry in lieu of direct payment to the distribution companies.

On June 30, 2009, the court issued a ruling in which it granted DEIGP's request for injunction regarding the additional fine, but denied DEIGP's request for an expedited decision on the original assessment or payment into the court registry. Under the court's order, DEIGP was required to make installment payments on the original assessment directly to the distribution companies pending resolution on the merits. DEIGP filed an appeal and on August 28, 2009, the order was modified to allow DEIGP to deposit the disputed portion of each installment, which was most of the assessed amount, into an escrow account pending resolution on the merits. In the second quarter of 2009, Duke Energy recorded a pre-tax charge of $33 million associated with this matter.

Brazil Expansion Lawsuit. On August 9, 2011, the State of São Paulo filed a lawsuit in Brazilian state court against DEIGP based upon a claim that DEIGP is under a continuing obligation to expand installed generation capacity by 15% pursuant to a stock purchase agreement under which DEIGP purchased generation assets from the state. On August 10, 2011, a judge granted an ex parte injunction ordering DEIGP to presenta detailed expansion plan in satisfaction of the 15% obligation.  DEIGP has previously taken a position that the 15% expansion obligation is no longer viable given the changes that have occurred in the electric energy sector since privatization of that sector. After filing various objections, defenses and appeals regarding the referenced order, DEIGP submitted its proposed expansion plan on November 11, 2011, but reserved its objections regarding enforceability. The parties will in due course present evidence to the court regarding their respective positions. No trial date has been set.

Crescent Litigation. On September 3, 2010, the Crescent Resources Litigation Trust filed suit against Duke Energy along with various affiliates and several individuals, including current and former employees of Duke Energy, in the U.S. Bankruptcy Court for the Western District of Texas. The Crescent Resources Litigation Trust was established in May 2010 pursuant to the plan of reorganization approved in the Crescent bankruptcy proceedings in the same court. The complaint alleges that in 2006 the defendants caused Crescent to borrow approximately $1.2 billion from a consortium of banks and immediately thereafter distribute most of the loan proceeds to Crescent's parent company without benefit to Crescent. The complaint further alleges that Crescent was rendered insolvent by the transactions, and that the distribution is subject to recovery by the Crescent bankruptcy estate as an alleged fraudulent transfer. The plaintiff requests return of the funds as well as other statutory and equitable relief, punitive damages and attorneys' fees. Duke Energy and its affiliated defendants believe that the referenced 2006 transactions were legitimate and did not violate any state or federal law. Defendants filed a motion to dismiss in December 2010. On March 21, 2011, the plaintiff filed a response to the defendant's motion to dismiss and a motion for leave to file an amended complaint, which was granted. The Defendants filed a second motion to dismiss in response to plaintiffs' amended complaint.

The plaintiffs filed a demand for a jury trial, a motion to transfer the case to the federal district court, and a motion to consolidate the case with a separate action filed by the plaintiffs against Duke Energy's legal counsel. On March 22, 2012, the federal District Court issued an order denying the defendant's motion to dismiss and granting the plaintiffs' motions for transfer and consolidation. The court has not yet made a final ruling on whether the plaintiffs are entitled to a jury trial. Trial on this matter has been set to commence in January 2014. Duke Energy has agreed to participate in a mediation of this matter, currently scheduled for August 21 and 22, 2012.

It is not possible to predict whether Duke Energy will incur any liability or to estimate the damages, if any, that Duke Energy might incur in connection with this lawsuit.

Federal Advanced Clean Coal Tax Credits. Duke Energy Carolinas has been awarded $125 million of federal advanced clean coal tax credits associated with its construction of Cliffside Unit 6 and Duke Energy Indiana has been awarded $134 million of federal advanced clean coal tax credits associated with its construction of the Edwardsport IGCC plant. In March2008, two environmental groups, Appalachian Voices and the Canary Coalition, filed suit against the Federal government challenging the tax credits awarded to incentivize certain clean coal projects. Although Duke Energy was not a party to the case, the allegations center on the tax incentives provided for the Cliffside and Edwardsport projects. The initial complaint alleged a failure to comply with the National Environmental Policy Act. The first amended complaint, filed in August 2008, added an Endangered Species Act claim and also sought declaratory and injunctive relief against the DOE and the U.S. Department of the Treasury. In 2008, the District Court dismissed the case. On September 23, 2009, the District Court issued an order granting plaintiffs' motion to amend their complaint and denying, as moot, the motion for reconsideration. Plaintiffs have filed their second amended complaint. The Federal government has moved to dismiss the second amended complaint; the motion is pending. On July 26, 2010, the District Court denied plaintiffs' motion for preliminary injunction seeking to halt the issuance of the tax credits.

Duke Energy Carolinas

New Source Review (NSR). In 1999-2000, the DOJ, acting on behalf of the EPA and joined by various citizen groups and states, filed a number of complaints and notices of violation against multiple utilities across the country for alleged violations of the NSR provisions of the CAA. Generally, the government alleges that projects performed at various coal-fired units were major modifications, as defined in the CAA, and that the utilities violated the CAA when they undertook those projects without obtaining permits and installing the best available emission controls for SO2, NOx and particulate matter. The complaints seek injunctive relief to require installation of pollution control technology on various generating units that allegedly violated the CAA, and unspecified civil penalties in amounts of up to $32,500 per day for each violation. A number of Duke Energy Carolinas' plants have been subject to these allegations. Duke Energy Carolinas asserts that there were no CAA violations because the applicable regulations do not require permitting in cases where the projects undertaken are “routine” or otherwise do not result in a net increase in emissions.

In 2000, the government brought a lawsuit against Duke Energy Carolinas in the U.S. District Court in Greensboro, North Carolina. The EPA claims that 29 projects performed at 25 of Duke Energy Carolinas' coal-fired units violate these NSR provisions. Three environmental groups have intervened in the case. In August 2003, the trial court issued a summary judgment opinion adopting Duke Energy Carolinas' legal positions on the standard to be used for measuring an increase in emissions, and granted judgment in favor of Duke Energy Carolinas. The trial court's decision was appealed and ultimately reversed and remanded for trial by the U.S. Supreme Court. At trial, Duke Energy Carolinas will continue to assert that the projects were routine or not projected to increase emissions. On February 11, 2011, the trial judge held an initial status conference and on March 22, 2011, the judge entered an interim scheduling order. The parties have filed a stipulation in which the United States and Plaintiff-Intervenors have dismissed with prejudice 16 claims. In exchange, Duke Energy Carolinas dismissed certain affirmative defenses. The parties have filed motions for summary judgment on the remaining claims. No trial date has been set, but a trial is not expected until the second half of 2012, at the earliest.

It is not possible to estimate the damages, if any, that might be incurred in connection with the unresolved matters related to Duke Energy Carolinas discussed above. Ultimate resolution of these matters could have a material effect on the consolidated results of operations, cash flows or financial position of Duke Energy Carolinas. However, the appropriate regulatory treatment will be pursued for any costs incurred in connection with such resolution.

Asbestos-related Injuries and Damages Claims. Duke Energy Carolinas has experienced numerous claims for indemnification and medical cost reimbursement relating to damages for bodily injuries alleged to have arisen from the exposure to or use of asbestos in connection with construction and maintenance activities conducted on its electric generation plants prior to 1985. As of June 30, 2012, there were 188 asserted claims for non-malignant cases with the cumulative relief sought of up to $47 million, and 58 asserted claims for malignant cases with the cumulative relief sought of up to $21 million. Based on Duke Energy Carolinas' experience, it is expected that the ultimate resolution of most of these claims likely will be less than the amount claimed.

Amounts recognized as asbestos-related reserves related to Duke Energy Carolinas in the respective Condensed Consolidated Balance Sheets totaled $776 million and $801 million as of June 30, 2012 and December 31, 2011, respectively, and are classified in Other within Deferred Credits and Other Liabilities and Other within Current Liabilities. These reserves are based upon the minimum amount in Duke Energy Carolinas' best estimate of the range of loss for current and future asbestos claims through 2030. Management believes that it is possible there will be additional claims filed against Duke Energy Carolinas after 2030. In light of the uncertainties inherent in a longer-term forecast, management does not believe that they can reasonably estimate the indemnity and medical costs that might be incurred after 2030 related to such potential claims. Asbestos-related loss estimates incorporate anticipated inflation, if applicable, and are recorded on an undiscounted basis. These reserves are based upon current estimates and are subject to greater uncertainty as the projection period lengthens. A significant upward or downward trend in the number of claims filed, the nature of the alleged injury, and the average cost of resolving each such claim could change our estimated liability, as could any substantial or favorable verdict at trial. A federal legislative solution, further state tort reform or structured settlement transactions could also change the estimated liability. Given the uncertainties associated with projecting matters into the future and numerous other factors outside our control, management believes that it is possible Duke Energy Carolinas may incur asbestos liabilities in excess of the recorded reserves.

Duke Energy Carolinas has a third-party insurance policy to cover certain losses related to asbestos-related injuries and damages above an aggregate self insured retention of $476 million. Duke Energy Carolinas' cumulative payments began to exceed the self insurance retention on its insurance policy in 2008. Future payments up to the policy limit will be reimbursed by Duke Energy Carolinas' third party insurance carrier. The insurance policy limit for potential future insurance recoveries for indemnification and medical cost claim payments is $968 million in excess of the self insured retention. Insurance recoveries of $813 million related to this policy are classified in the respective Condensed Consolidated Balance Sheets in Other within Investments and Other Assets and Receivables as of both June 30, 2012 and December 31, 2011, respectively. Duke Energy Carolinas is not aware of any uncertainties regarding the legal sufficiency of insurance claims. Management believes the insurance recovery asset is probable of recovery as the insurance carrier continues to have a strong financial strength rating.

Duke Energy Ohio

Antitrust Lawsuit. In January 2008, four plaintiffs, including individual, industrial and nonprofit customers, filed a lawsuit against Duke Energy Ohio in federal court in the Southern District of Ohio. Plaintiffs alleged that Duke Energy Ohio (then The Cincinnati Gas & Electric Company), conspired to provide inequitable and unfair price advantages for certain large business consumers by entering into non-public option agreements with such consumers in exchange for their withdrawal of challenges to Duke Energy Ohio's pending Rate Stabilization Plan (RSP), which was implemented in early 2005. On March 31, 2009, the District Court granted Duke Energy Ohio's motion to dismiss. Plaintiffs filed a motion to alter or set aside the judgment, which was denied by an order dated March 31, 2010. In April 2010, the plaintiffs filed their appeal of that order with the U.S. Court of Appeals for the Sixth Circuit, which heard argument on that appeal on January 11, 2012. On June 4, 2012, the Sixth Circuit Court of Appeals reversed the district court's decision and remanded the matter on all claims for trial on the merits and on July 25, 2012, the Court denied Duke Energy Ohio's petition for an en banc review of the case. It is not possible to predict at this time whether Duke Energy Ohio will incur any liability or to estimate the damages, if any, that Duke Energy Ohio might incur in connection with this lawsuit.

Asbestos-related Injuries and Damages Claims. Duke Energy Ohio has been named as a defendant or co-defendant in lawsuits related to asbestos at its electric generating stations. The impact on Duke Energy Ohio's consolidated results of operations, cash flows or financial position of these cases to date has not been material. Based on estimates under varying assumptions concerning uncertainties, such as, among others: (i) the number of contractors potentially exposed to asbestos during construction or maintenance of Duke Energy Ohio generating plants; (ii) the possible incidence of various illnesses among exposed workers, and (iii) the potential settlement costs without federal or other legislation that addresses asbestos tort actions, Duke Energy Ohio estimates that the range of reasonably possible exposure in existing and future suits over the foreseeable future is not material. This estimated range of exposure may change as additional settlements occur and claims are made and more case law is established.

Other Litigation and Legal Proceedings.

The Duke Energy Registrants are involved in other legal, tax and regulatory proceedings arising in the ordinary course of business, some of which involve substantial amounts. Management believes that the final disposition of these proceedings will not have a material effect on its consolidated results of operations, cash flows or financial position.

The Duke Energy Registrants expense legal costs related to the defense of loss contingencies as incurred.

The Duke Energy Registrants have exposure to certain legal matters that are described herein. The Duke Energy Registrants have recorded reserves for these proceedings and exposures as presented in the table below. These reserves represent management's best estimate of probable loss as defined in the accounting guidance for contingencies. The estimated reasonably possible range of loss for non-asbestos related matters in excess of the recorded reserves is not material. Duke Energy has insurance coverage for certain of these losses incurred as presented in the table below.

(in millions)		June 30, 2012		December 31, 2011
Reserves for Legal Matters(a)
Duke Energy(b)		$	792	$	810
Duke Energy Carolinas(b)			776		801
Duke Energy Indiana			8		4
Probable Insurance Recoveries(c)
Duke Energy(d)		$	813	$	813
Duke Energy Carolinas(d)			813		813
(a)	Reserves are classified in the respective Condensed Consolidated Balance Sheets in Other within Deferred Credits and Other Liabilities and Other within Current Liabilities.
(b)	Includes reserves for aforementioned asbestos-related injuries and damages claims.
(c)	Insurance recoveries are classified in the respective Condensed Consolidated Balance Sheets in Other within Investments and Other Assets and Receivables.
(d)	Relates to recoveries associated with aforementioned asbestos-related injuries and damages claims.

Other Commitments and Contingencies

General.

As part of its normal business, the Duke Energy Registrants are a party to various financial guarantees, performance guarantees and other contractual commitments to extend guarantees of credit and other assistance to various subsidiaries, investees and other third parties. To varying degrees, these guarantees involve elements of performance and credit risk, which are not included on the respective Condensed Consolidated Balance Sheets. The possibility of any of the Duke Energy Registrants having to honor their contingencies is largely dependent upon future operations of various subsidiaries, investees and other third parties, or the occurrence of certain future events.

In addition, the Duke Energy Registrants enter into various fixed-price, non-cancelable commitments to purchase or sell power (tolling arrangements or power purchase contracts), take-or-pay arrangements, transportation or throughput agreements and other contracts that may or may not be recognized on the respective Condensed Consolidated Balance Sheets. Some of these arrangements may be recognized at fair value on the respective Condensed Consolidated Balance Sheets if such contracts meet the definition of a derivative and the normal purchase normal sale (NPNS) exception does not apply.

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Severance Rollforward (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2012
Restructuring Liability, beginning balance	$ 32
Provision/Adjustments	(1)
Cash Reductions	(8)
Restructuring Liability, ending balance	$ 23

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Stock-Based Compensation (Schedule Of Stock-Based Compensation Expense) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended				6 Months Ended
	Jun. 30, 2012		Jun. 30, 2011		Jun. 30, 2012		Jun. 30, 2011
Pre-tax stock-based compensation	$ 11	[1],[2]	$ 11	[1],[2]	$ 19	[3],[4]	$ 27	[3],[4]
Tax benefit associated with stock-based compensation	4		5		7		11
Stock-based compensation cost capitalized	1		1		1		2
Stock Options [Member]
Pre-tax stock-based compensation	0		0		2		2
Restricted Stock Units Awards [Member]
Pre-tax stock-based compensation	6		6		14		14
Performance Awards [Member]
Pre-tax stock-based compensation	$ 5		$ 5		$ 3		$ 11

[1] Excludes stock-based compensation cost capitalized of $1 million for each of the three months ended June 30, 2012 and 2011.

[2] The tax benefit associated with the recorded expense was $4 million and $5 million for the three months ended June 30, 2012 and 2011, respectively.

[3] Excludes stock-based compensation cost capitalized of $1 million and $2 million for the six months ended June 30, 2012 and 2011, respectively.

[4] The tax benefit associated with the recorded expense was $7 million and $11 million for the six months ended June 30, 2012 and 2011, respectively.

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Document And Entity Information	6 Months Ended
	Jun. 30, 2012	Apr. 30, 2012
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2012
Entity Registrant Name	Duke Energy Corporation
Entity Central Index Key	0001326160
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		704,125,200
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q2
Duke Energy Carolinas [Member]
Entity Registrant Name	Duke Energy Carolinas, LLC
Entity Central Index Key	0000030371
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Duke Energy Ohio [Member]
Entity Registrant Name	Duke Energy Ohio, Inc.
Entity Central Index Key	0000020290
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Duke Energy Indiana [Member]
Entity Registrant Name	Duke Energy Indiana, Inc.
Entity Central Index Key	0000081020
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer

XML

Debt And Credit Facilities

6 Months Ended

Jun. 30, 2012

Debt And Credit Facilities

6. Debt and Credit Facilities

Significant changes to the Duke Energy Registrants' debt and credit facilities since December 31, 2011 are as follows:

First Mortgage Bonds. In March 2012, Duke Energy Indiana issued $250 million principal amount of first mortgage bonds, which carry a fixed interest rate of 4.20% and mature March 15, 2042. Proceeds from the issuances were used to repay a portion of Duke Energy Indiana's outstanding short-term debt.

Other Debt.DS Cornerstone, LLC, a 50/50 joint venture entity with a third-party joint venture partner, owns two wind generation projects and has executed a third party financing against the two wind generation projects. In April 2012, Duke Energy and SCOA negotiated a $330 million, Construction and 12-year amortizing Term Loan Facility, on behalf of the borrower, a wholly owned subsidiary of the joint venture. The loan agreement is non-recourse to Duke Energy. Duke Energy received proceeds of $319 million upon execution of the loan agreement. This amount represents reimbursement of a significant portion of Duke Energy's construction costs incurred as of the date of the agreement.

In January 2012, Duke Energy Carolinas used proceeds from its December 2011 $1 billion issuance of principal amount of first mortgage bonds to repay $750 million 6.25% senior unsecured notes that matured January 15, 2012.

In the first quarter of 2012, Duke Energy completed the previously announced sale of International Energy's indirect 25% ownership interest in Attiki Gas Supply, S.A (Attiki), a Greek corporation, to an existing equity owner in a series of transactions that resulted in the full discharge of the related debt obligation. No gain or loss was recognized on these transactions. As of December 31, 2011, Duke Energy's investment balance was $64 million and the related debt obligation of $64 million was reflected in Current Maturities of Long-Term Debt on Duke Energy's Condensed Consolidated Balance Sheets.

On April 4, 2011, Duke Energy filed a registration statement (Form S-3) with the SEC to sell up to $1 billion of variable denomination floating rate demand notes, called PremierNotes. The Form S-3 states that no more than $500 million of the notes will be outstanding at any particular time. The notes are offered on a continuous basis and bear interest at a floating rate per annum determined by the Duke Energy PremierNotes Committee, or its designee, on a weekly basis. The interest rate payable on notes held by an investor may vary based on the principal amount of the investment. The notes have no stated maturity date, but may be redeemed in whole or in part by Duke Energy at any time. The notes are non-transferable and may be redeemed in whole or in part at the investor's option. Proceeds from the sale of the notes will be used for general corporate purposes. The balance as of June 30, 2012 and December 31, 2011, is $209 million and $79 million, respectively. The notes reflect a short-term debt obligation of Duke Energy and are reflected as Notes payable and commercial paper on Duke Energy's Condensed Consolidated Balance Sheets.

At June 30, 2012 Duke Energy had $250million principal amount of 5.65% senior notes due June 2013 classified as Current maturities of long-term debt on Duke Energy's Condensed Consolidated Balance Sheets. At December 31, 2011, these notes were classified as Long-term Debt on Duke Energy's Condensed Consolidated Balance Sheets. Duke Energy currently anticipates satisfying this obligation with proceeds from additional borrowings.

At June 30, 2012 and December 31, 2011, Duke Energy Carolinas had $400million principal amount of 5.625% senior unsecured notes due November 2012 classified as Current maturities of long-term debt on its Condensed Consolidated Balance Sheets. Duke Energy Carolinas currently anticipates satisfying this obligation with proceeds from additional borrowings.

At June 30, 2012 and December 31, 2011, Duke Energy Ohio had $500million principal amount of 5.70% debentures due September 2012 classified as Current maturities of long-term debt on its Condensed Consolidated Balance Sheets. Duke Energy currently anticipates satisfying this obligation with proceeds from additional borrowings, in connection with the Duke Energy Ohio generation asset transfer, as discussed in Note 4.

At June 30, 2012 Duke Energy Ohio had $250million principal amount of 2.10% first mortgage bonds due June 2013classified as Current maturities of long-term debt on Duke Energy Ohio's Condensed Consolidated Balance Sheets. At December 31, 2011, these notes were classified as Long-term Debt on Duke Energy Ohio's Condensed Consolidated Balance Sheets. Duke Energy Ohio currently anticipates satisfying this obligation with proceeds from additional borrowings.

Non-Recourse Notes Payable of VIEs. To fund the purchase of receivables, CRC borrows from third parties and such borrowings fluctuate based on the amount of receivables sold to CRC. The borrowings are secured by the assets of CRC and are non-recourse to Duke Energy. The debt is short-term because the facility has an expiration date of October 2012. At June 30, 2012 and December 31, 2011, CRC borrowings were $269million and $273 million, respectively, and are reflected as Non-recourse notes payable of VIEs on Duke Energy's Condensed Consolidated Balance Sheets.

Money Pool. The Subsidiary Registrants receive support for their short-term borrowing needs through participation with Duke Energy and certain of its subsidiaries in a money pool arrangement. Under this arrangement, those companies with short-term funds may provide short-term loans to affiliates participating under this arrangement. The money pool is structured such that the Subsidiary Registrants separately manage their cash needs and working capital requirements. Accordingly, there is no net settlement of receivables and payables between the money pool participants. Per the terms of the money pool arrangement, the parent company, Duke Energy may loan funds to its participating subsidiaries, but may not borrow funds through the money pool. Accordingly, as the money pool activity is between Duke Energy and its wholly owned subsidiaries, all money pool balances are eliminated within Duke Energy's Condensed Consolidated Balance Sheets. The following table shows the Subsidiary Registrants' money pool balances and classification within their respective Condensed Consolidated Balance Sheets:

	June 30, 2012						December 31, 2011
(in millions)	Receivables		Notes Payable		Long-term Debt		Receivables		Notes Payable		Long-term Debt
Duke Energy Carolinas	$	244	$	―	$	300	$	923	$	―	$	300
Duke Energy Ohio		181		―		―		311		―		―
Duke Energy Indiana		―		113		150		―		300		150

Increases or decreases in money pool receivables are reflected within investing activities on the respective Subsidiary Registrants' Condensed Consolidated Statements of Cash Flows, while increases or decreases in money pool borrowings are reflected within financing activities on the respective Subsidiary Registrants Condensed Consolidated Statements of Cash Flows.

Available Credit Facilities. In November 2011, Duke Energy entered into a new $6 billion, five-year master credit facility, with $4 billion available at closing and the remaining $2 billion became effective July 2, 2012, following the closing of the merger with Progress Energy. The Duke Energy Registrants each have borrowing capacity under the master credit facility up to specified sublimits for each borrower. However, Duke Energy has the unilateral ability at any time to increase or decrease the borrowing sublimits of each borrower, subject to a maximum sublimit for each borrower. See the table below for the borrowing sublimits for each of the borrowers as of June 30, 2012. The amount available under the master credit facility has been reduced, as indicated in the table below, by the use of the master credit facility to backstop the issuances of commercial paper, letters of credit and certain tax-exempt bonds. As indicated, borrowing sub limits for the Subsidiary Registrants are also reduced for certain amounts outstanding under the money pool arrangement.

This summary only includes Duke Energy's master credit facility and, accordingly excludes certain demand facilities and committed facilities that are immaterial in size or which generally support very specific requirements, which primarily include facilities that backstop various outstanding tax-exempt bonds. These facilities that backstop various outstanding tax-exempt bonds generally have non-cancelable terms in excess of one year from the balance sheet date, such that the Duke Energy Registrants have the ability to refinance such borrowingson a long-term basis. Accordingly, such borrowings are reflected as Long-term Debt on the Condensed Consolidated Balance Sheets of the respective Duke Energy Registrant.

		June 30, 2012
(in millions)		Duke Energy (Parent)		Duke Energy Carolinas		Duke Energy Ohio		Duke Energy Indiana		Total Duke Energy
Facility Size		$	1,250	$	1,250	$	750	$	750	$	4,000
	Notes Payable and Commercial Paper		(518)		(300)		―		(216)		(1,034)
	Outstanding Letters of Credit		(20)		(7)		―		―		(27)
	Tax-Exempt Bonds		―		(95)		(84)		(81)		(260)
Available Capacity		$	712	$	848	$	666	$	453	$	2,679

Restrictive Debt Covenants. The Duke Energy Registrants' debt and credit agreements contain various financial and other covenants. The master credit facility contains a covenant requiring the debt-to-total capitalization ratio to not exceed 65% for each borrower. Failure to meet those covenants beyond applicable grace periods could result in accelerated due dates and/or termination of the agreements. As of June 30, 2012, each of the Duke Energy Registrants were in compliance with all covenants related to its significant debt agreements. In addition, some credit agreements may allow for acceleration of payments or termination of the agreements due to nonpayment, or the acceleration of other significant indebtedness of the borrower or some of its subsidiaries. None of the significant debt or credit agreements contain material adverse change clauses.

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Investments In Debt And Equity Securities (Narrative) (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Short-term investments	$ 234	$ 190
Trading Securities	31	32
Auction Rate Securities [Member]
Long-term investments, carrying value	41	71
Long-term investments, par value	$ 50	$ 89

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Earnings Per Share (Details) (USD $) In Millions, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Stock options, performance and restricted stock			0
Income from continuing operations attributable to Duke Energy common stockholders, as adjusted for participating securities - diluted	$ 444
Average shares, basic	446,000,000	444,000,000	446,000,000	444,000,000
Average shares, diluted	446,000,000	444,000,000	446,000,000	444,000,000
EPS, basic	$ 0.99	$ 0.98	$ 1.65	$ 2.13
EPS, diluted	$ 0.99	$ 0.98	$ 1.65	$ 2.13
Value of stock options, performance and unvested stock awards not included in the effect of dilutive securities			4,000,000	2,000,000
Income [Member]
Income from continuing operations attributable to Duke Energy common stockholders, as adjusted for participating securities - basic and diluted		434
Income from continuing operations attributable to Duke Energy common stockholders, as adjusted for participating securities - basic	444		736	944
Income from continuing operations attributable to Duke Energy common stockholders, as adjusted for participating securities - diluted		$ 434	$ 736	$ 944
Average Shares [Member]
Stock options, performance and restricted stock	0	0		0
Average shares, basic	446,000,000	444,000,000	446	444,000,000
Average shares, diluted	446,000,000	444,000,000	446,000,000	444,000,000
EPS [Member]
EPS, basic	$ 0.99	$ 0.98	$ 1.65	$ 2.13
EPS, diluted	$ 0.99	$ 0.98	$ 1.65	$ 2.13

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Condensed Consolidated Statements Of Comprehensive Income (USD $) In Millions, unless otherwise specified	3 Months Ended				6 Months Ended
	Jun. 30, 2012		Jun. 30, 2011		Jun. 30, 2012		Jun. 30, 2011
Net income	$ 448		$ 441		$ 747		$ 954
Other comprehensive income(loss), net of tax
Foreign currency translation adjustments	(131)		65		(87)		96
Pension and OPEB related adjustments to AOCI	2	[1]	2	[1]	6	[1]	(7)	[1]
Net unrealized gain on cash flow hedges	(30)	[2]	(7)	[2]	(17)	[2]	(5)	[2]
Reclassification into earnings from cash flow hedges	3	[3]	1	[3]	2	[3]	2	[3]
Unrealized gain (loss) on investments in auction rate securities	6	[4]	1	[4]	6	[4]	4	[4]
Unrealized gain on investments in auction rate securities and other available for sale securities	2	[5]	0	[5]	3	[5]	0	[5]
Reclassification into earnings from available for sale securities	(2)	[6]	0	[6]	(3)	[6]	0	[6]
Other comprehensive income, net of tax	(150)		62		(90)		90
Comprehensive income	298		503		657		1,044
Comprehensive Income attributable to noncontrolling interests	0		9		4		11
Comprehensive income attributable to Duke Energy Corporation	298		494		653		1,033
Duke Energy Carolinas [Member]
Net income	211		193		477		398
Other comprehensive income(loss), net of tax
Reclassification into earnings from cash flow hedges	(2)	[7]	(1)	[7]	(2)	[7]	(1)	[7]
Other comprehensive income, net of tax					2		1
Comprehensive income attributable to Duke Energy Corporation	213		194		479		399
Duke Energy Ohio [Member]
Net income	45		33		119		106
Other comprehensive income(loss), net of tax
Pension and OPEB related adjustments to AOCI	0	[8]	1	[8]	1	[8]	1	[8]
Other comprehensive income, net of tax					1		1
Comprehensive income attributable to Duke Energy Corporation	45		34		120		107
Duke Energy Indiana [Member]
Net income	77		68		(90)		144
Other comprehensive income(loss), net of tax
Reclassification into earnings from cash flow hedges					1	[6]
Other comprehensive income, net of tax					(1)
Comprehensive income attributable to Duke Energy Corporation	$ 77		$ 68		$ (91)		$ 144

[1] Net of $1 million tax expense and $3 million tax expense for the three and six months ended June 30, 2012 and insignificant tax expense and $3 tax benefit for the three and six months ended June 30, 2011.

[2] Net of $14 million tax benefit and $9 million tax benefit for the three and six months ended June 30, 2012 and $3 million tax benefit and $2 million tax benefit for the three and six months ended June 30, 2011.

[3] Net of $2 million tax benefit and insignificant tax expense for the three and six months ended June 30, 2012 and $1 million tax expense for the three and six months ended June 30, 2011, respectively.

[4] Net of $2 million tax expense and $3 million tax expense for the three and six months ended June 30, 2012 and $2 million tax benefit and $1 million tax expense for the three and six months ended June 30, 2011.

[5] Net of insignificant tax expense for the three and six months ended June 30, 2012.

[6] Net of insignificant tax benefit for the three and six months ended June 30, 2012.

[7] Net of $2 million tax expense for the three and six months ended June 30, 2012 and 2011.

[8] Net of insignificant tax expense for the three and six months ended June 30, 2012, and insignificant tax expense and $1 million tax expense for the three and six months ended June 30, 2011.

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Condensed Consolidated Statements Of Common Stockholder's Equity - Indiana (USD $) In Millions	Total	Retained Earnings [Member]	Net Gains (Losses) on Cash Flow Hedges [Member]	Pension And OPEB Related Adjustments To AOCI [Member]	Duke Energy Indiana [Member]	Duke Energy Indiana [Member] Common Stock [Member]	Duke Energy Indiana [Member] Additional Paid In Capital [Member]	Duke Energy Indiana [Member] Retained Earnings [Member]	Duke Energy Indiana [Member] Net Gains (Losses) on Cash Flow Hedges [Member]
Balance at Dec. 31, 2010			$ 8		$ 3,567	$ 1	$ 1,358	$ 2,200
Net income	954	946			144			144
Other comprehensive income, net of tax	90		(3)	(7)
Transfer of Vermillion Generating Station					0
Balance at Jun. 30, 2011					3,711	1	1,358	2,344	8
Balance at Mar. 31, 2011
Net income	441				68
Other comprehensive income, net of tax	62
Balance at Jun. 30, 2011					3,711	1	1,358		8
Balance at Dec. 31, 2011	22,772				3,734	1	1,358	2,368	7
Net income	747	739			(90)			(90)
Other comprehensive income, net of tax	(90)		(15)	6	(1)				(1)
Transfer of Vermillion Generating Station					26
Balance at Jun. 30, 2012	22,419				3,669	1	1,384	2,278	6
Balance at Mar. 31, 2012
Net income	448				77
Other comprehensive income, net of tax	(150)
Balance at Jun. 30, 2012	$ 22,419				$ 3,669	$ 1	$ 1,384

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Condensed Consolidated Statements Of Common Stockholder's Equity - Ohio (USD $) In Millions	Total	Retained Earnings [Member]	Net Gains (Losses) on Cash Flow Hedges [Member]	Pension And OPEB Related Adjustments To AOCI [Member]	Duke Energy Ohio [Member]	Duke Energy Ohio [Member] Common Stock [Member]	Duke Energy Ohio [Member] Additional Paid In Capital [Member]	Duke Energy Ohio [Member] Retained Earnings [Member]	Duke Energy Ohio [Member] Pension And OPEB Related Adjustments To AOCI [Member]
Balance at Dec. 31, 2010					$ 5,464	$ 762
Dividend to parent					285
Balance at Mar. 31, 2011
Balance at Dec. 31, 2010			8		5,464	762	5,570	(846)	(22)
Net income	954	946			106			106
Other comprehensive income, net of tax	90		(3)	(7)	1				1
Dividend to parent					(285)		(285)
Balance at Jun. 30, 2011					5,286	762	5,285	(740)	(21)
Balance at Mar. 31, 2011
Net income	441				33
Other comprehensive income, net of tax	62
Balance at Jun. 30, 2011					5,286	762
Balance at Dec. 31, 2011	22,772				5,167	762	5,085	(652)	(28)
Net income	747	739			119			119
Other comprehensive income, net of tax	(90)		(15)	6	1				1
Dividend to parent					0
Transfer of Vermillion Generating Station					(28)		(28)
Balance at Jun. 30, 2012	22,419				5,259	762	5,057	(533)	(27)
Balance at Mar. 31, 2012
Net income	448				45
Other comprehensive income, net of tax	(150)
Balance at Jun. 30, 2012	$ 22,419				$ 5,259	$ 762

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Variable Interest Entities

6 Months Ended

Jun. 30, 2012

Variable Interest Entities

11. Variable Interest Entities

A VIE is an entity that is evaluated for consolidation using more than a simple analysis of voting control. The analysis to determine whether an entity is a VIE considers contracts with an entity, credit support for an entity, the adequacy of the equity investment of an entity and the relationship of voting power to the amount of equity invested in an entity. This analysis is performed either upon the creation of a legal entity or upon the occurrence of an event requiring reevaluation, such as a significant change in an entity's assets or activities. If an entity is determined to be a VIE, a qualitative analysis of control determines the party that consolidates a VIE based on what party has the power to direct the most significant activities of the VIE that impact its economic performance as well as what party has rights to receive benefits or is obligated to absorb losses that are significant to the VIE. The analysis of the party that consolidates a VIE is a continual reassessment.

CONSOLIDATED VIEs

The table below shows the VIEs that Duke Energy and Duke Energy Carolinas consolidate and how these entities impact Duke Energy's and Duke Energy Carolinas' respective Condensed Consolidated Balance Sheets. None of these entities are consolidated by Duke Energy Ohio or Duke Energy Indiana.

Other than the discussion below related to CRC, no financial support was provided to any of the consolidated VIEs during the six months ended June 30, 2012 and the year ended December 31, 2011, or is expected to be provided in the future, that was not previouslycontractually required.

		December 31, 2011
		Duke Energy
		Receivables
		Financing
(in millions)		LLC (DERF)(a)		CRC		CinCapV		Renewables		Other		Total
Restricted Receivables of VIEs		$	581	$	547	$	13	$	13	$	3	$	1,157
Other Current Assets			―		―		2		124		8		134
Intangibles, net			―		―		―		12		―		12
Restricted Other Assets of VIEs			―		―		65		10		60		135
Other Assets			―		―		14		36		―		50
Property, Plant and Equipment, Cost			―		―		―		913		―		913
Accumulated Depreciation and Amortization			―		―		―		(62)		―		(62)
Other Deferred Debits			―		―		―		24		2		26
	Total Assets		581		547		94		1,070		73		2,365
Accounts Payable			―		―		―		1		1		2
Non-Recourse Notes Payable			―		273		―		―		―		273
Taxes Accrued			―		―		―		3		―		3
Current Maturities of Long-Term Debt			―		―		11		49		5		65
Other Current Liabilities			―		―		3		59		―		62
Non-Recourse Long-Term Debt			300		―		60		528		61		949
Deferred Income Taxes			―		―		―		160		―		160
Asset Retirement Obligation			―		―		―		13		―		13
Other Liabilities			―		―		13		37		―		50
	Total Liabilities		300		273		87		850		67		1,577
Noncontrolling Interests			―		―		―		―		1		1
Net Assets of Consolidated VIEs		$	281	$	274	$	7	$	220	$	5	$	787
(a)	DERF is a wholly owned limited liability company of Duke Energy Carolinas.

DERF. Duke Energy Carolinas securitizes certain accounts receivable through DERF, a bankruptcy remote, special purpose subsidiary. DERF is a wholly owned limited liability company of Duke Energy Carolinas with a separate legal existence from its parent, and its assets are not intended to be generally available to creditors of Duke Energy Carolinas. As a result of the securitization, on a daily basis Duke Energy Carolinas sells certain accounts receivable, arising from the sale of electricity and/or related services as part of Duke Energy Carolinas' franchised electric business, to DERF. In order to fund its purchases of accounts receivable, DERF has a $300 million secured credit facility with a commercial paper conduit, which expires in August 2013. Duke Energy Carolinas provides the servicing for the receivables (collecting and applying the cash to the appropriate receivables). Duke Energy Carolinas' borrowing under the credit facility is limited to the amount of qualified receivables sold, which has been and is expected to be in excess of the amount borrowed, which is maintained at $300 million. The debt is classified as long-term since the facility has an expiration date of greater than one year from the balance sheet date.

The obligations of DERF under the facility are non-recourse to Duke Energy Carolinas. Duke Energy and its subsidiaries have no requirement to provide liquidity, purchase assets of DERF or guarantee performance. DERF is considered a VIE because the equity capitalization is insufficient to support its operations. If deficiencies in the net worth of DERF were to occur, those deficiencies would be cured through funding from Duke Energy Carolinas. In addition, the most significant activity of DERF relates to the decisions made with respect to the management of delinquent receivables. Since those decisions are made by Duke Energy Carolinas and any net worth deficiencies of DERF would be cured through funding from Duke Energy Carolinas, Duke Energy Carolinas consolidates DERF.

CRC. CRC was formed in order to secure low cost financing for Duke Energy Ohio, including Duke Energy Kentucky, and Duke Energy Indiana. Duke Energy Ohio and Duke Energy Indiana sell on a revolving basis at a discount, nearly all of their customer accounts receivable and related collections to CRC. The receivables which are sold are selected in order to avoid any significant concentration of credit risk and exclude delinquent receivables. The receivables sold are securitized by CRC through a facility managed by two unrelated third parties and the receivables are used as collateral for commercial paper issued by the unrelated third parties. These loans provide the cash portion of the proceeds paid by CRC to Duke Energy Ohio and Duke Energy Indiana. The proceeds obtained by Duke Energy Ohio and Duke Energy Indiana from the sales of receivables are cash and a subordinated note from CRC (subordinated retained interest in the sold receivables) for a portion of the purchase price (typically approximates 25% of the total proceeds). The amount borrowed by CRC against these receivables is non-recourse to the general credit of Duke Energy, and the associated cash collections from the accounts receivable sold is the sole source of funds to satisfy the related debt obligation. Borrowing is limited to approximately 75% of the transferred receivables. Losses on collection in excess of the discount are first absorbed by the equity of CRC and next by the subordinated retained interests held by Duke Energy Ohio and Duke Energy Indiana. The discount on the receivables reflects interest expense plus an allowance for bad debts net of a servicing fee charged by Duke Energy Ohio and Duke Energy Indiana. Duke Energy Ohio and Duke Energy Indiana are responsible for the servicing of the receivables (collecting and applying the cash to the appropriate receivables). Depending on the experience with collections, additional equity infusions to CRC may be required to be made by Duke Energy in order to maintain a minimum equity balance of $3 million. There were no equity infusions to CRC during the six months ended June 30, 2012. During the six months ended June 30,2011, Duke Energy infused $6 million of equity to Cinergy receivables to remedy net worth deficiencies. The amount borrowed fluctuates based on the amount of receivables sold. The debt is short term because the facility has an expiration date of less than one year from the balance sheet date. The current expiration date is October 2012. CRC is considered a VIE because the equity capitalization is insufficient to support its operations, the power to direct the most significant activities of the entity are not performed by the equity holder, Cinergy, and deficiencies in the net worth of CRC are not funded by Cinergy, but by Duke Energy. The most significant activity of CRC relates to the decisions made with respect to the management of delinquent receivables. These decisions, as well as the requirement to make up deficiencies in net worth, are made by Duke Energy and not by Duke Energy Ohio, Duke Energy Kentucky or Duke Energy Indiana. Thus, Duke Energy consolidates CRC. Duke Energy Ohio and Duke Energy Indiana do not consolidate CRC.

CinCap V. CinCap V was created to finance and execute a power sale agreement with Central Maine Power Company for approximately 35 MW of capacity and energy. This agreement expires in 2016. CinCap V is considered a VIE because the equity capitalization is insufficient to support its operations. As Duke Energy has the power to direct the most significant activities of the entity, which are the decisions to hedge and finance the power sales agreement, CinCap V is consolidated by Duke Energy.

Renewables. Duke Energy's renewable energy facilities include Green Frontier Windpower, LLC, Top of The World Wind Energy LLC,DS Cornerstone LLC, and various solar projects, all subsidiaries of DEGS, an indirect wholly owned subsidiary of Duke Energy.

Green Frontier Windpower, LLC, Top of the World Wind Energy, LLC and the various solar projects are VIEs due to power purchase agreements with terms that approximate the expected life of the projects. These fixed price agreements effectively transfer the commodity price risk to the buyer of the power. Duke Energy has consolidated these entities since inception because the most significant activities that impact the economic performance of these renewable energy facilities were the decisions associated with the siting, negotiation of the purchase power agreement, engineering, procurement and construction, and decisions associated with ongoing operations and maintenance related activities, all of which were made solely by Duke Energy.

DS Cornerstone, LLC, a 50/50 joint venture entity with a third-party joint venture partner, owns two windpower projects and has executed a third party financing against the two windpower projects.  DS Cornerstone is currently a VIE as the members equity is not sufficient as of the June 30, 2012 to support the operations of the joint venture as demonstrated by the third party financing.  Duke Energy provided a Production Tax Credit (PTC) Remedy Agreement to the joint venture partner whereby Duke Energy has guaranteed the two windpower projects will achieve commercial operation in 2012 and an agreed to number of wind turbines will qualify for production tax credits. In the event the agreed to number of wind turbines of the two wind generating facilities fail to qualify, the joint venture partner has the option to put its equity ownership interest back to Duke Energy. The PTC Remedy Agreement results in greater loss exposure to Duke Energy and, as a result, Duke Energy will consolidate DS Cornerstone, LLC until both projects reach commercial operation in 2012 and the appropriate number of wind turbines qualify for PTC.

The debt held by these renewable energy facilities is non-recourse to the general credit of Duke Energy. Duke Energy and its subsidiaries have no requirement to provide liquidity or purchase the assets of these renewable energy facilities. Duke Energy does not guarantee performance except for the production tax credit guarantee mentioned above, an immaterial multi-purpose letter of credit and various immaterial debt service reserve and operations and maintenance reserve guarantees. The assets are restricted and they cannot be pledged as collateral or sold to third parties without the prior approval of the debt holders.

Other. Duke Energy has other VIEs with restricted assets and non-recourse debt. These VIEs include certain on-site power generation facilities. Duke Energy consolidates these particular on-site power generation entities because Duke Energy has the power to direct the majority of the most significant activities, which, most notably involve the oversight of operation and maintenance related activities that impact the economic performance of these entities.

NON-CONSOLIDATED VIEs

The tables below show the VIEs that the Duke Energy Registrants do not consolidate and how these entities impact the Duke Energy Registrants respective Condensed Consolidated Balance Sheets. As discussed above, while Duke Energy consolidated CRC, Duke Energy Ohio and Duke Energy Indiana do not consolidate CRC as they are not the primary beneficiary.

No financial support that was not previously contractually required was provided to any of the unconsolidated VIEs during the six months ended June 30, 2012 and 2011, respectively, or is expected to be provided in the future.

With the exception of the power purchase agreement with the Ohio Valley Electric Corporation (OVEC), which is discussed below, and various guarantees, reflected in the table above as “Deferred Credits and Other Liabilities”, the Duke Energy Registrants are not aware of any situations where the maximum exposure to loss significantly exceeds the carrying values shown above.

CRC. As discussed above, CRC is consolidated only by Duke Energy. Accordingly, the retained interest in the sold receivables recorded on the Condensed Consolidated Balance Sheets of Duke Energy Ohio and Duke Energy Indiana are eliminated in consolidation at Duke Energy.

The proceeds obtained from the sales of receivables are largely cash but do include a subordinated note from CRC for a portion of the purchase price (typically approximates 25% of the total proceeds). The subordinated note is a retained interest (right to receive a specified portion of cash flows from the sold assets) and is classified within Receivables in Duke Energy Ohio's and Duke Energy Indiana's Condensed Consolidated Balance Sheets. The retained interests reflected on the Condensed Consolidated Balance Sheets of Duke Energy Ohio and Duke Energy Indiana approximate fair value.

The carrying values of the retained interests are determined by allocating the carrying value of the receivables between the assets sold and the interests retained based on relative fair value. Because the receivables generally turnover in less than two months, credit losses are reasonably predictable due to the broad customer base and lack of significant concentration, and the purchased beneficial interest (equity in CRC) is subordinate to all retained interests and thus would absorb losses first, the allocated basis of the subordinated notes are not materially different than their face value. The hypothetical effect on the fair value of the retained interests assuming both a 10% and a 20% unfavorable variation in credit losses or discount rates is not material due to the short turnover of receivables and historically low credit loss history. Interest accrues to Duke Energy Ohio, Duke Energy Indiana and Duke Energy Kentucky on the retained interests using the accretable yield method, which generally approximates the stated rate on the notes since the allocated basis and the face value are nearly equivalent. An impairment charge is recorded against the carrying value of both the retained interests and purchased beneficial interest whenever it is determined that an other-than-temporary impairment has occurred. The key assumptions used in estimating the fair value in 2012 and 2011 is detailed in the following table:

	Duke Energy Ohio				Duke Energy Indiana
	2012		2011		2012		2011
Anticipated credit loss ratio	0.8	%	0.8	%	0.4	%	0.4	%
Discount rate	1.3	%	2.6	%	1.3	%	2.6	%
Receivable turnover rate	12.7	%	12.7	%	10.2	%	10.2	%

	The following table shows the gross and net receivables sold:
		Duke Energy Ohio				Duke Energy Indiana
(in millions)		June 30, 2012		December 31, 2011		June 30, 2012		December 31, 2011
Receivables sold		$	251	$	302	$	307	$	279
Less: Retained interests			102		129		143		139
Net receivables sold		$	149	$	173	$	164	$	140

	The following tables show the retained interests, sales, and cash flows related to receivables sold:
		Duke Energy Ohio				Duke Energy Indiana
		Three Months Ended June 30,				Three Months Ended June 30,
(in millions)		2012		2011		2012		2011
Sales
Receivables sold		$	490	$	521	$	701	$	630
Loss recognized on sale		$	3	$	5	$	3	$	4
Cash flows
Cash proceeds from receivables sold		$	484	$	560	$	673	$	646
Collection fees received		$	1	$	―	$	1	$	―
Return received on retained interests		$	1	$	3	$	1	$	3

	Duke Energy Ohio				Duke Energy Indiana
	Six Months Ended June 30,				Six Months Ended June 30,
(in millions)	2012		2011		2012		2011
Sales
Receivables sold	$	1,100	$	1,240	$	1,407	$	1,298
Loss recognized on sale	$	7	$	11	$	6	$	8
Cash flows
Cash proceeds from receivables sold	$	1,120	$	1,337	$	1,397	$	1,355
Collection fees received	$	1	$	-	$	1	$	―
Return received on retained interests	$	3	$	7	$	3	$	7

Cash flows from the sale of receivables are reflected within Operating Activities on Duke Energy Ohio's and Duke Energy Indiana's Consolidated Statements of Cash Flows.

Collection fees received in connection with the servicing of transferred accounts receivable are included in Operation, Maintenance and Other on Duke Energy Ohio's and Duke Energy Indiana's Consolidated Statements of Operations. The loss recognized on the sale of receivables is calculated monthly by multiplying the receivables sold during the month by the required discount which is derived monthly utilizing a three year weighted average formula that considers charge-off history, late charge history, and turnover history on the sold receivables, as well as a component for the time value of money. The discount rate, or component for the time value of money, is calculated monthly by summing the prior month-end LIBOR plus a fixed rate of 1.00% as of June 30, 2012, as compared to prior month-end LIBOR plus 2.39% as of June 30, 2011.

DukeNet. In 2010, Duke Energy sold a 50% ownership interest in DukeNet to Alinda. The sale resulted in DukeNet becoming a joint venture with Duke Energy and Alinda each owning a 50% interest. In connection with the formation of the new DukeNet joint venture, a five-year, $150 million senior secured credit facility was executed with a syndicate of ten external financial institutions. This credit facility is non-recourse to Duke Energy. DukeNet is considered a VIE because it has entered into certain contractual arrangements that provide DukeNet with additional forms of subordinated financial support. The most significant activities that impact DukeNet's economic performance relate to its business development and fiber optic capacity marketing and management activities. The power to direct these activities is jointly and equally shared by Duke Energy and Alinda. As a result, Duke Energy does not consolidate the DukeNet joint venture. Accordingly, DukeNet is a non-consolidated VIE that is reported as an equity method investment.

Unless consent by Duke Energy is given otherwise, Duke Energy and its subsidiaries have no requirement to provide liquidity, purchase the assets of DukeNet, or guarantee performance.  

Renewables. Duke Energy has investments in various entities that generate electricity through the use of renewable energy technology. Some of these entities, which were part of the Catamount acquisition, are VIEs which are not consolidated due to the joint ownership of the entities when they were created and the power to direct and control key activities is shared jointly Instead, Duke Energy's investment is recorded under the equity method of accounting. These entities are VIEs due to power purchase agreements with terms that approximate the expected life of the project. These fixed price agreements effectively transfer the commodity price risk to the buyer of the power.

Other. Duke Energy has investments in various other entities that are VIEs which are not consolidated. The most significant of these investments is Duke Energy Ohio's 9% ownership interest in OVEC. Through its ownership interest in OVEC, Duke Energy Ohio has a contractual arrangement through June 2040 to buy power from OVEC's power plants. The proceeds from the sale of power by OVEC to its power purchase agreement counterparties, including Duke Energy Ohio, are designed to be sufficient for OVEC to meet its operating expenses, fixed costs, debt amortization and interest expense, as well as earn a return on equity. Accordingly, the value of this contract is subject to variability due to fluctuations in power prices and changes in OVEC's costs of business, including costs associated with its 2,256 megawatts of coal-fired generation capacity. As discussed in Note 5, the proposed rulemaking on cooling water intake structures, MATS, CSAPR and CCP's could increase the costs of OVEC which would be passed through to Duke Energy Ohio. The initial carrying value of this contract was recorded as an intangible asset when Duke Energy acquired Cinergy in April 2006.

In addition, the company has guaranteed the performance of certain entities in which the company no longer has an equity interest. As a result, the company has a variable interest in certain other VIEs that are non-consolidated.

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Goodwill

6 Months Ended

Jun. 30, 2012

Goodwill

7. Goodwill

On July 2, 2012, Duke Energy completed the previously announced merger with Progress Energy, which will result in incremental goodwill to Duke Energy in the third quarter of 2012. See Note 2for additional information.

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Variable Interest Entities (Narrative) (Details) (USD $) In Millions, unless otherwise specified			6 Months Ended
	Dec. 31, 2010 DukeNet And Alinda Capital Partners LLC Ownership In The New Joint Venture [Member] Non-Consolidated VIEs [Member]	Jun. 30, 2012 DukeNet [Member] Non-Consolidated VIEs [Member]	Jun. 30, 2012 Cinergy Receivables [Member] Variable Interest Entity [Member]	Jun. 30, 2012 Cincap V [Member] Variable Interest Entity [Member]	Jun. 30, 2012 Duke Energy Carolinas [Member] DERF [Member] Variable Interest Entity [Member]	Jun. 30, 2011 Duke Energy Ohio [Member]	Jun. 30, 2012 Duke Energy Ohio [Member] Non-Consolidated VIEs [Member]	Jun. 30, 2012 Duke Energy Ohio [Member] Cinergy Receivables [Member] Non-Consolidated VIEs [Member]	Jun. 30, 2012 Duke Energy Ohio [Member] Other VIEs [Member] Non-Consolidated VIEs [Member]	Jun. 30, 2011 Duke Energy Indiana [Member]	Jun. 30, 2012 Duke Energy Indiana [Member] Non-Consolidated VIEs [Member]	Jun. 30, 2012 Duke Energy Indiana [Member] Cinergy Receivables [Member] Non-Consolidated VIEs [Member]
Borrowing limitation for CRC			75.00%
Minimum Equity Balance required by Cinergy Receivables			$ 3
Subordinated retained interest limitation of the total proceeds			25.00%					25.00%				25.00%
Secured credit facility of variable interest entities					300
Fixed rate used when selling receivables						2.39%	1.00%			2.39%	1.00%
Equity ownership interest rate	50.00%								9.00%
Senior secured credit facility		$ 150
Line of Credit Facility, Expiration Date			October 2012		August 2013
OVEC Purchased Power Contract Expiration									June 2040
CinCap purchased power contract expiration				2016

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Business Segments

6 Months Ended

Jun. 30, 2012

Business Segments

3. Business Segments

Effective with the first quarter of 2012, management began evaluating segment performance based on Segment Income. Segment Income is defined as income from continuing operations net of income attributable to noncontrolling interests. Segment Income, as discussed below, includes intercompany revenues and expenses that are eliminated in the Condensed Consolidated Financial Statements. In conjunction with management's use of the new reporting measure, certain governance costs that were previously unallocated have now been allocated to each of the segments. In addition, direct interest expense and income taxes are included in segment income. Prior year segment profitability information has been recast to conform to the current year presentation.None of these changes impacts the reportable operating segments or the Duke Energy Registrants' previously reported consolidatedrevenues, net income or earnings-per-share.

Duke Energy

Duke Energy has the following reportable operating segments: U.S. Franchised Electric and Gas (USFE&G), Commercial Power and International Energy.

USFE&G generates, transmits, distributes and sells electricity in central and western North Carolina, western South Carolina, central, north central and southern Indiana, and northern Kentucky. USFE&G also transmits and distributes electricity in southwestern Ohio. Additionally, USFE&G transports and sells natural gas in southwestern Ohio and northern Kentucky. It conducts operations primarily through Duke Energy Carolinas, regulated portions of Duke Energy Ohio including Duke Energy Kentucky, and Duke Energy Indiana.

Commercial Power owns, operates and manages power plants and engages in the wholesale marketing and procurement of electric power, fuel and emission allowances related to these plants, as well as other contractual positions. Commercial Power also has a retail sales subsidiary, Duke Energy Retail Sales, LLC (Duke Energy Retail), which is certified by the PUCO as a Competitive Retail Electric Service provider in Ohio. Through Duke Energy Generation Services, Inc. and its affiliates (DEGS), Commercial Power engages in the development, construction and operation of renewable energy projects. In addition, DEGS develops commercial transmission projects. DEGS also owns and operates electric generation for large energy consumers, municipalities, utilities and industrial facilities.

International Energy principally operates and manages power generation facilities and engages in sales and marketing of electric power and natural gas outside the U.S. It conducts operations primarily through Duke Energy International, LLC and its affiliates and its activities principally target power generation in Latin America. Additionally, International Energy owns a 25% interest in National Methanol Company, located in Saudi Arabia, which is a large regional producer of methanol and methyl tertiary butyl ether.

The remainder of Duke Energy's operations is presented as Other. While it is not considered an operating segment, Other primarily includes unallocated corporate costs, which include costs not allocable to Duke Energy's reportable business segments, primarily governance, costs to achieve mergers and divestitures, and costs associated with certain corporate severance programs. It also includes, Bison Insurance Company Limited (Bison), Duke Energy's wholly owned, captive insurance subsidiary, Duke Energy's 50% interest in DukeNet Communications, LLC (DukeNet) and related telecommunications businesses, and Duke Energy Trading and Marketing, LLC, which is 40% owned by Exxon Mobil Corporation and 60% owned by Duke Energy.

Business Segment Data
								Segment Income/
		Unaffiliated		Intersegment		Total		Consolidated
(in millions)		Revenues		Revenues		Revenues		Net Income(a)
Three Months Ended June 30, 2012
USFE&G		$	2,688	$	9	$	2,697	$	337
Commercial Power			488		14		502		28
International Energy			397		―		397		105
	Total reportable segments		3,573		23		3,596		470
Other			4		12		16		(25)
Eliminations			―		(35)		(35)		―
Add back of noncontrolling interest component			―		―		―		4
Income from Discontinued Operations, net of tax			―		―		―		(1)
	Total consolidated	$	3,577	$	―	$	3,577	$	448
Three Months Ended June 30, 2011
USFE&G		$	2,540	$	9	$	2,549	$	297
Commercial Power			592		3		595		30
International Energy			406		―		406		127
	Total reportable segments		3,538		12		3,550		454
Other			(4)		13		9		(19)
Eliminations			―		(25)		(25)		―
Add back of noncontrolling interest component			―		―		―		6
	Total consolidated	$	3,534	$	―	$	3,534	$	441

								Segment Income/
		Unaffiliated		Intersegment		Total		Consolidated
(in millions)		Revenues		Revenues		Revenues		Net Income(a)
Six Months Ended June 30, 2012
USFE&G(b)		$	5,348	$	17	$	5,365	$	473
Commercial Power			1,052		30		1,082		59
International Energy			799		―		799		247
	Total reportable segments		7,199		47		7,246		779
Other			8		23		31		(41)
Eliminations			―		(70)		(70)		―
Add back of noncontrolling interest component			―		―		―		8
Income from Discontinued Operations, net of tax			―		―		―		1
	Total consolidated	$	7,207	$	―	$	7,207	$	747
Six Months Ended June 30, 2011
USFE&G		$	5,214	$	18	$	5,232	$	638
Commercial Power			1,234		5		1,239		79
International Energy			754		―		754		255
	Total reportable segments		7,202		23		7,225		972
Other			(5)		25		20		(26)
Eliminations			―		(48)		(48)		―
Add back of noncontrolling interest component			―		―		―		8
	Total consolidated	$	7,197	$	―	$	7,197	$	954
(a)	Segment results exclude noncontrolling interests and results of entities classified as discontinued operations.
(b)	As discussed further in Note ##REGMAT, Duke Energy recorded pre-tax impairment and other charges of $420 million in the first quarter of 2012 related to the Edwardsport IGCC project.

Segment Assets
	Segment assets in the following table exclude all intercompany assets.
(in millions)		June 30, 2012		December 31, 2011
USFE&G		$	48,451	$	47,977
Commercial Power			7,268		6,939
International Energy			4,678		4,539
	Total reportable segments		60,397		59,455
Other			2,593		2,961
Reclassifications(a)			41		110
	Total consolidated assets	$	63,031	$	62,526
(a)	Primarily represents reclassification of federal tax balances in consolidation.

Duke Energy Ohio

Duke Energy Ohio has two reportable operating segments, Franchised Electric and Gas and Commercial Power.

Franchised Electric and Gas transmits and distributes electricity in southwestern Ohio and generates, transmits, distributes and sells electricity in northern Kentucky. Franchised Electric and Gas also transports and sells natural gas in southwestern Ohio and northern Kentucky. It conducts operations primarily through Duke Energy Ohio and its wholly owned subsidiary Duke Energy Kentucky.

Commercial Power owns, operates and manages power plants and engages in the wholesale marketing and procurement of electric power, fuel and emission allowances related to these plants, as well as other contractual positions. Duke Energy Ohio's Commercial Power reportable operating segment does not include the operations of DEGS or Duke Energy Retail, which is included in the Commercial Power reportable operating segment at Duke Energy.

The remainder of Duke Energy Ohio's operations is presented as Other. While it is not considered an operating segment, Other primarily includes certain governance costs allocated by its parent, Duke Energy (see Note 17).

Business Segment Data
				Segment Income/
		Unaffiliated		Consolidated
(in millions)		Revenues(a)		Net Income
Three Months Ended June 30, 2012
Franchised Electric and Gas		$	387	$	30
Commercial Power			342		17
	Total reportable segments		729		47
Other			―		(2)
Eliminations			(12)		―
	Total consolidated	$	717	$	45
Three Months Ended June 30, 2011
Franchised Electric and Gas		$	315	$	29
Commercial Power			379		6
	Total reportable segments		694		35
Other			―		(2)
	Total consolidated	$	694	$	33

				Segment Income/
		Unaffiliated		Consolidated
(in millions)		Revenues(a)		Net Income
Six Months Ended June 30, 2012
Franchised Electric and Gas		$	860	$	64
Commercial Power			796		61
	Total reportable segments		1,656		125
Other			―		(6)
Eliminations			(27)		―
	Total consolidated	$	1,629	$	119
Six Months Ended June 30, 2011
Franchised Electric and Gas		$	779	$	77
Commercial Power			794		34
	Total reportable segments		1,573		111
Other			―		(5)
	Total consolidated	$	1,573	$	106
(a)	There was an insignificant amount of intersegment revenues for the three and six months ended June 30, 2011.

Segment Assets
	Segment assets in the following table exclude all intercompany assets.
(in millions)		June 30, 2012		December 31, 2011
Franchised Electric and Gas		$	6,559	$	6,293
Commercial Power			4,742		4,740
	Total reportable segments		11,301		11,033
Other			142		259
Reclassifications(a)			(465)		(353)
	Total consolidated assets	$	10,978	$	10,939
(a)	Primarily represents reclassification of federal tax balances in consolidation.

Duke Energy Carolinas and Duke Energy Indiana

Duke Energy Carolinas and Duke Energy Indiana each have one reportable operating segment, Franchised Electric, which generates, transmits, distributes and sells electricity in central and western North Carolina and western South Carolina, and north central, central and southern Indiana, respectively.

The remainder of Duke Energy Carolinas' and Duke Energy Indiana's operations are presented as Other. While it is not considered an operating segment, Other primarily includes costs to achieve certain mergers and divestitures, certain corporate severance programs, andcertain costs for use of corporate assets as allocated to Duke Energy Carolinas or Duke Energy Indiana.

At June 30, 2012 and December 31, 2011 all of Duke Energy Carolinas' and Duke Energy Indiana's assets are each owned by the Franchised Electric operating segment. For the three andsix months ended June 30, 2012 and 2011, substantially all revenues and expenses are from the Franchised Electric operating segment of each registrant.

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Regulatory Matters (Schedule Of Net Carrying Value Of Facilities As Well As The Remaining Non-current Regulatory Assets) (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2012 MWh		Dec. 31, 2011
Megawatt hours of potential plants to be retired	2,773
Remaining net book value of potential plants to be retired	$ 327	[1]
Generation facilities to be retired, net	73		80
Duke Energy Carolinas [Member]
Megawatt hours of potential plants to be retired	1,080	[2],[3]
Remaining net book value of potential plants to be retired	176	[2],[3]
Generation facilities to be retired, net	73		80
Retired MW	587
Committed to retire	1,667
Duke Energy Indiana [Member]
Megawatt hours of potential plants to be retired	668	[4]
Remaining net book value of potential plants to be retired	138	[4]
Duke Energy Ohio [Member]
Megawatt hours of potential plants to be retired	1,025	[5]
Remaining net book value of potential plants to be retired	$ 13	[5]

[1] Included in Property, plant and equipment, net as of June 30, 2012, on the Condensed Consolidated Balance Sheets, unless otherwise noted.

[2] Includes Riverbend Units 4 through 7, Lee Units 1 through 3 and Buck Units 5 and 6. Duke Energy Carolinas has committed to retire 1,667 MW in conjunction with a Cliffside air permit settlement, of which 587 MW have already been retired as of June 30, 2012.

[3] Net book value of Buck Units 5 and 6 of $73 million is included in Generation facilities to be retired, net, on the Condensed Consolidated Balance Sheets at June 30, 2012.

[4] Includes Wabash River Units 2 through 6.

[5] Includes Beckjord Station and Miami Fort Unit 6. Beckjord has no remaining book value.

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Organization And Basis of Presentation

6 Months Ended

Jun. 30, 2012

Organization and Basis of Presentation

Index to Combined Notes To Unaudited Condensed Consolidated Financial Statements

The unaudited notes to the condensed consolidated financial statements that follow are a combined presentation. The following

list indicates the registrants to which the footnotes apply:

Applicable Notes

Registrant

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6

7

8

9

10

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15

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19

Duke Energy Corporation

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Duke Energy Carolinas, LLC

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Duke Energy Ohio, Inc.

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1. Organization and Basis of Presentation

Organization. Duke Energy Corporation (collectively with its subsidiaries, Duke Energy) is an energy company headquartered in Charlotte, North Carolina. Duke Energy operates in the United States (U.S.) primarily through its direct and indirect wholly owned subsidiaries, Duke Energy Carolinas, LLC (Duke Energy Carolinas), Duke Energy Ohio, Inc. (Duke Energy Ohio), which includes Duke Energy Kentucky, Inc. (Duke Energy Kentucky), and Duke Energy Indiana, Inc. (Duke Energy Indiana), as well as in Latin America through International Energy. When discussing Duke Energy's condensed consolidated financial information, it necessarily includes the results of its three separate subsidiary registrants, Duke Energy Carolinas, Duke Energy Ohio and Duke Energy Indiana (collectively referred to as the Subsidiary Registrants), which, along with Duke Energy, are collectively referred to as the Duke Energy Registrants.The information in these combined notes relates to each of the Duke Energy Registrants as noted in the Index to the Combined Notes. However, none of the registrants makes any representation as to information related solely to Duke Energy or the subsidiaries of Duke Energy other than itself. As discussed further in Note 3, Duke Energy operates in three reportable business segments: U.S. Franchised Electric and Gas, Commercial Power and International Energy. The remainder of Duke Energy's operations is presented as Other.

These Unaudited Condensed Consolidated Financial Statements include, after eliminating intercompany transactions and balances, the accounts of the Duke Energy Registrants and all majority-owned subsidiaries where the respective Duke Energy Registrants have control and those variable interest entities (VIEs) where the respective Duke Energy Registrants are the primary beneficiary. These Unaudited Condensed Consolidated Financial Statements also reflect Duke Energy Carolinas' approximate 19.25% proportionate share of the Catawba Nuclear Station, as well as Duke Energy Ohio's proportionate share of certain generation and transmission facilities in Ohio, Indiana and Kentucky and Duke Energy Indiana's proportionate share of certain generation and transmission facilities. In January 2012, Duke Energy Ohio completed the sale of its 75% ownership of the Vermillion Generating Station; upon the close, Duke Energy Indiana purchased a 62.5% interest in the station. See Note2 for further discussion.

Duke Energy Carolinas, a wholly owned subsidiary of Duke Energy, is an electric utility company that generates, transmits, distributes and sells electricity in North Carolina and South Carolina. Duke Energy Carolinas is subject to the regulatory provisions of the North Carolina Utilities Commission (NCUC), the Public Service Commission of South Carolina (PSCSC), the U.S. Nuclear Regulatory Commission (NRC) and the Federal Energy Regulatory Commission (FERC). Substantially all of Duke Energy Carolinas' operations are regulated and qualify for regulatory accounting treatment. As discussed further in Note 3, Duke Energy Carolinas' operations include one reportable business segment, Franchised Electric.

Duke Energy Ohio is an indirect wholly owned subsidiary of Duke Energy. Duke Energy Ohio is a combination electric and gas public utility that provides service in the southwestern portion of Ohio and in northern Kentucky through its wholly owned subsidiary Duke Energy Kentucky, as well as electric generation in parts of Ohio, Illinois and Pennsylvania. Duke Energy Ohio's principal lines of business include generation, transmission and distribution of electricity, the sale of and/or transportation of natural gas, and energy marketing. Duke Energy Ohio conducts competitive auctions for retail electricity supply in Ohio whereby the energy price is recovered from retail customers. Duke Energy Kentucky's principal lines of business include generation, transmission and distribution of electricity, as well as the sale of and/or transportation of natural gas. Duke Energy Ohio is subject to the regulatory provisions of the Public Utilities Commission of Ohio (PUCO), the Kentucky Public Service Commission (KPSC) and the FERC. Duke Energy Ohio applies regulatory accounting treatment to substantially all of the operations of its Franchised Electric and Gas operating segment. Through November 2011, Duke Energy Ohio applied regulatory accounting treatment to certain rate riders associated with retail generation of its Commercial Power operating segment. See Note 3 for information about business segments.

Duke Energy Indiana is an indirect wholly owned subsidiary of Duke Energy. Duke Energy Indiana is an electric utility that provides service in north central, central, and southern Indiana. Its primary line of business is generation, transmission and distribution of electricity. Duke Energy Indiana is subject to the regulatory provisions of the Indiana Utility Regulatory Commission (IURC) and the FERC. The substantial majority of Duke Energy Indiana's operations are regulated and qualify for regulatory accounting treatment. As discussed further in Note 3, Duke Energy Indiana's operations include one reportable business segment, Franchised Electric.

See Note 2 for information regarding Duke Energy's merger with Progress Energy, Inc. (Progress Energy) that closed on July 2, 2012.For the periods presented, Duke Energy's condensed consolidated financial information does not include the results of Progress Energy and its registrants. Also, the Duke Energy Registrants, as defined above, does not include Progress Energy, Inc., Progress Energy Carolinas or Progress Energy Florida, unless otherwise noted.

Basis of Presentation. These Unaudited Condensed Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles (GAAP) in the U.S. for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, these Unaudited Condensed 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 Condensed 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 Condensed Consolidated Financial Statements and other information included in this quarterly report should be read in conjunction with the respective Consolidated Financial Statements and Notes in the Duke Energy Registrants combined Form 10-K for the year ended December 31, 2011.

These Unaudited Condensed Consolidated Financial Statements reflect all normal recurring adjustments that are, in the opinion of the respective companies' management, necessary to fairly present the financial position and results of operations of each Duke Energy Registrant. Amounts reported in Duke Energy's interim Unaudited Condensed Consolidated Statements of Operations and each of the Subsidiary Registrants' interim Unaudited Condensed Consolidated Statements of Income and Comprehensive Income 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.

Duke Energy Ohio and Duke Energy Indiana sellpower to and purchase power from PJM Interconnection, LLC (PJM) and Midwest Independent Transmission System Operator, Inc. (MISO), respectively. Duke EnergyOhio and Duke Energy Indiana account for these transactions on a net hourly basis as the transactions are settled on a net hourly basis.

Use of Estimates. To conform to GAAP in the U.S., management makes estimates and assumptions that affect the amounts reported in the Unaudited Condensed Consolidated Financial Statements and Notes. Although these estimates are based on management's best available information at the time, actual results could differ.

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 applying average revenue per kilowatt-hour or per thousand cubic feet (Mcf) for all customer classes to the number of estimated kilowatt-hours or Mcfs delivered but not billed. Unbilled wholesale energy revenues are calculated by applying the contractual rate per megawatt-hour (MWh) to the number of estimated MWh delivered but not yet billed. Unbilled wholesale demand revenues are calculated by applying the contractual rate per megawatt (MW) to the MW volume delivered but not yet billed. The amount of unbilled revenues can vary significantly from period to period as a result of numerous factors, including seasonality, weather, customer usage patterns and customer mix.

Duke Energy, Duke Energy Carolinas and Duke Energy Ohio had unbilled revenues within Restricted Receivables of Variable Interest Entities and Receivables on their respective Condensed Consolidated Balance Sheets as follows:

(in millions)	June 30, 2012		December 31, 2011
Duke Energy	$	769	$	674
Duke Energy Carolinas	$	335	$	293
Duke Energy Ohio	$	51	$	50
Duke Energy Indiana	$	8	$	2

Additionally, Duke Energy Ohio and Duke Energy Indiana sell, on a revolving basis, nearly all of their retail and wholesale accounts receivable to Cinergy Receivables Company, LLC (CRC). These transfers meet sales/derecognition criteria and therefore, Duke Energy Ohio and Duke Energy Indiana, account for the transfers of receivables to Cinergy Receivables as sales, and accordingly the receivables sold are not reflected on the Condensed Consolidated Balance Sheets of Duke Energy Ohio and Duke Energy Indiana. Receivables for unbilled revenues related to retail and wholesale accounts receivable at Duke Energy Ohio and Duke Energy Indiana included in the sales of accounts receivable to CRC were as follows:

(in millions)		June 30, 2012		December 31, 2011
Duke Energy Ohio		$	80	$	89
Duke Energy Indiana		$	140	$	115
	See Note ##VIE for additional information.

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Acquisitions And Sales Of Other Assets

6 Months Ended

Jun. 30, 2012

Acquisitions And Sales Of Other Assets

2. Acquisitions and Sales of Other Assets

Acquisitions.

The Duke Energy Registrants consolidate assets and liabilities from acquisitions as of the purchase date, and include earnings from acquisitions in consolidated earnings after the purchase date.

Merger with Progress Energy

Description of Transaction

On July 2, 2012, Duke Energy completed the merger contemplated by the Agreement and Plan of Merger (Merger Agreement), among Diamond Acquisition Corporation, a North Carolina corporation and Duke Energy's wholly owned subsidiary (Merger Sub) and Progress Energy, a North Carolina corporation engaged in the regulated utility business of generation, transmission and distribution and sale of electricity in portions of North Carolina, South Carolina and Florida. As a result of the merger, Merger Sub was merged into Progress Energy and Progress Energy became a wholly owned subsidiary of Duke Energy.

The merger between Duke Energy and Progress Energy provides increased scale and diversity with potentially enhanced access to capital over the long-term and a greater ability to undertake the significant construction programs necessary to respond to increasing environmental regulation, plant retirements and customer demand growth. Duke Energy's business risk profile is expected to improve over-time due to the increased proportion of the business that is regulated. Additionally, cost savings, efficiencies and other benefits are expected from the combined operations.

Immediately preceding the merger, Duke Energy completed a one-for-three reverse stock split with respect to the issued and outstanding shares of Duke Energy common stock. The shareholders of Duke Energy approved the reverse stock split at Duke Energy's special meeting of shareholders held on August 23, 2011. All share and per share amounts presented throughout these financial statements reflect the impact of the one-for-three reverse stock split.

Progress Energy's shareholders received 0.87083 shares of Duke Energy common stock in exchange for each share of Progress Energy common stock outstanding as of July 2, 2012. Generally, all outstanding Progress Energy equity-based compensation awards were converted into Duke Energy equity-based compensation awards using the same ratio. The merger was structured as a tax-free exchange of shares.

Merger Related Regulatory Matters

Federal Energy Regulatory Commission. On June 8, 2012, the FERC conditionally approved the merger including Duke Energy and Progress Energy's revised market power mitigation plan, the Joint Dispatch Agreement (JDA) and the joint Open Access Transmission Tariff (OATT). The revised market power mitigation plan provides for the construction of seven transmission projects (Long-term FERC Mitigation) and interim firm power sale agreements during the construction of the transmission projects (Interim FERC Mitigation). The Long-term FERC Mitigation is estimated to cost approximately $110 million. The Long-term FERC Mitigation plan will increase power imported into the Duke Energy Carolinas and Progress Energy Carolinas service areas and enhance competitive power supply options in the service areas. The construction of these projects will occur over the next two to three years. In conjunction with the Interim FERC Mitigation plan, Duke Energy Carolinas and Progress Energy Carolinas entered into power sale agreements that were effective with the consummation of the merger.These agreements, or similar power sale agreements, will be in place until the Long-term FERC Mitigation is operational. The agreements are for around-the-clock delivery of power during the winter and summer in quantities that vary by season and by peak period. The following table summarizes the amount of megawatts per hourcontracted to be sold under the Interim FERC Mitigation agreements.

The FERC order requires an independent party to monitor whether the power sale agreements remain in effect during construction of the transmission projects and provide quarterly reports to the FERC regarding the status of construction of the transmission projects.

• On June 25, 2012, Duke Energy and Progress Energy accepted the conditions imposed by the FERC.
• On July 10, 2012, certain intervenors requested a rehearing seeking to overturn the June 8, 2012 order by the FERC.

  North Carolina Utilities Commission and Public Service Commission of South Carolina. In September 2011, Duke Energy and Progress Energy reached settlements with the Public Staff of the North Carolina Utilities Commission (NC Public Staff) and the South Carolina Office of Regulatory Staff (ORS) and certain other interested parties in connection with the regulatory proceedings related to the merger, the JDA and the OATT that were pending before the NCUC and PSCSC. These settlements were updated in May 2012 to reflect the results of ongoing merger related applications pending before the FERC. As part of these settlements and the application for approval of the merger by the NCUC and PSCSC, Duke Energy Carolinas and Progress Energy Carolinas agreed to the conditions and obligations listed below.

• Guarantee of $650 million in system fuel and fuel-related savings over 60 to 78 months for North Carolina and South Carolina retail customers. The savings are expected to be achieved through coal blending,coal commodity and transportation savings, gas transportation savings, and the joint dispatch of Duke Energy Carolinas and Progress Energy Carolinas generation fleets.
• Duke Energy Carolinas and Progress Energy Carolinas will not seek recovery from retail customers for the cost of the Long-term FERC Mitigation for five years following merger consummation. After five years, Duke Energy Carolinas and Progress Energy Carolinas may seek to recover the costs of the Long-term FERC Mitigation, but must show that the projects are needed to provide adequate and reliable retail service regardless of the merger.
• A $65 million rate reduction over the term of the Interim FERC Mitigation to reflect the cost of capacity not available to Duke Energy Carolinas and Progress Energy Carolinas retail customers during the Interim FERC Mitigation. The rate reduction will be achieved through a rider and will be apportioned between Duke Energy Carolinas and Progress Energy Carolinas retail customers.
• Duke Energy Carolinas and Progress Energy Carolinas will not seek recovery from retail customers for any revenue shortfalls or fuel-related costs associated with the Interim FERC Mitigation. The Interim FERC Mitigation agreements were in a loss position for Duke Energy as of the date of the merger consummation.
• Duke Energy Carolinas and Progress Energy Carolinas will not seek recovery from retail customers for any of their allocable share of merger related severance costs.
• Duke Energy Carolinas and Progress Energy Carolinas will provide community support through charitable contributions for four years, workforce development, low income energy assistance, and green energy assistance at a total cost of approximately $100 million, which cannot be recovered from retail customers.
• Duke Energy Carolinas and Progress Energy Carolinas will abide by revised North Carolina Regulatory Conditions and Code of Conduct governing their operations.

On June 29, 2012, the NCUC approved the merger application and the JDAapplication with conditions that were reflective of the settlement agreements described above. On July 2, 2012, the PSCSC approved the JDA application subject to Duke Energy Carolinas and Progress Energy Carolinas providing their South Carolina retail customers pro rata benefits equivalent to those approved by the NCUC in its merger approval order.

On July 6, 2012, the NCUC issued an order initiating investigation and scheduling hearings on the Duke Energy board of directors' decision on July 2, 2012, to replace William D. Johnson with James E. Rogers as President and CEO of Duke Energy subsequent to the merger close, as well as other related matters. See Note 4 for further information.

Kentucky Public Service Commission. On June 24, 2011, Duke Energy and Progress Energy filed a settlement agreement with the Kentucky Attorney General. On August 2, 2011, the KPSC issued an order conditionally approving the merger and required Duke Energy and Progress Energy to accept all conditions contained in the order. Duke Energy and Progress Energy requested and were granted rehearing on the limited issue of the wording of one condition relating to the composition of Duke Energy's post-merger board of directors. On October 28, 2011, the KPSC issued its order approving a settlement with the Kentucky Attorney General on the revised conditionrelating to the composition of the post-merger Duke Energy board. Duke Energy and Progress Energy filed their acceptance of the condition on November 2, 2011. Duke Energy Kentucky agreed to (i) not file new gas or electric base rate applications for two years from the date of the KPSC's final order in the merger proceedings, (ii) make five annual shareholder contributions of $165,000 each to support low-income weatherization efforts and economic development within Duke Energy Kentucky's service territory and (iii) not seek recovery from retail customers for any of their allocable share of merger related costs.

Accounting Charges to be Recognized Related to the Merger Consummation

Duke Energy anticipates recording charges of approximately $450 million to $550 million in the second half of 2012 associated with the merger. This estimate includes the costs of Long-term FERC Mitigation, Interim FERC Mitigation, the retail rate reduction associated with Interim FERC Mitigation, employee severance, obligations to provide community support and merger transaction expenses. The allocation of these charges to individual subsidiaries will be determined in the third quarter. The majority of these charges will be recognized by Duke Energy Carolinas and Progress Energy Carolinas.See Note15for further information related to employee severance expenses.

Duke Energy also expects to incur significant system integration and other merger-related transition costs primarily through 2014 that are necessary in order to achieve certain cost savings, efficiencies and other benefits anticipated to result from the merger with Progress Energy.

Purchase Price

Pursuant to the merger, all Progress Energy common shares were exchanged at the fixed exchange ratio of 0.87083 common shares of Duke Energy for each Progress Energy common share. The total consideration transferred in the merger was based on the closing price of Duke Energy common shares on July 2, 2012, and was calculated as follows:

Progress Energy's stock-based compensation awards, including performance shares and restricted stock, were replaced with Duke Energy awards upon consummation of the merger. In accordance with accounting guidance for business combinations, a portion of the fair value of these awards is included in the purchase price as it represents consideration transferred in the merger.

Purchase Price Allocation

The fair value of Progress Energy's assets acquired and liabilities assumed was determined based on significant estimates and assumptions that are judgmental in nature, including projected future cash flows (including timing); discount rates reflecting risk inherent in the future cash flows and market prices of long-term debt. The fair value of Progress Energy's asset acquired and liabilities assumed utilized for purchase price allocation are considered preliminary as a result of the short time period between the consummation of the merger and the filing of this Form 10-Q.

The majority of Progress Energy's operations are subject to the rate-setting authority of the FERC, the NCUC, the PSCSC, and the Florida Public Service Commission (FPSC) and are accounted for pursuant to U.S. generally accepted accounting principles, including the accounting guidance for regulated operations. The rate-setting and cost recovery provisions currently in place for Progress Energy's regulated operations provide revenues derived from costs, including a return on investment of assets and liabilities included in rate base. Thus, the fair values of Progress Energy's tangible and intangible assets and liabilities subject to these rate-setting provisions approximate their carrying values, and the assets and liabilities acquired and pro forma financial information do not reflect any net adjustments related to these amounts.

The significant assets and liabilities for which preliminary valuation amounts are reflected as of the filing of this Form 10-Q include the fair value of the acquired pension and other post-retirement benefit (OPEB) plans, asset retirement obligations and long-term debt. The preliminary fair value of the outstanding stock compensation awards is included in the purchase price as consideration transferred.The preliminary amounts recognized are subject to revision until the valuations are completed and to the extent that additional information is obtained about the facts and circumstances that existed as of the acquisition date.

The excess of the purchase price over the estimated fair values of the assets acquired and liabilities assumed will be recognized as goodwill in the third quarter of 2012.The goodwill reflects the value paid primarily for the long-term potential for enhanced access to capital as a result of the company's increased scale and diversity, opportunities for synergies, and an improved risk profile.The allocation of goodwill to Duke Energy's reporting units has not yet been completed as a result of the short time period between the closing of the merger and the filing of this Form 10-Q. None of the goodwill recognized is deductible for income tax purposes, and as such, no deferred taxes will be recorded related to goodwill.

The preliminary purchase price allocation of the merger was as follows:

Current Quarter Impact of Merger

Duke Energy incurred pre-tax transaction and integration related costs of $7 million and $15 million, for the three and six months ended June 30, 2012, respectively, and $5 millionand $16 million, for the three and six months ended June 30, 2011, respectively, substantially all of which were recorded within Operation, maintenance and other in Duke Energy's Condensed Consolidated Statements of Operations.

Pro Forma Financial Information

The following unaudited pro forma financial information reflects the consolidated results of operations of Duke Energy and reflects the amortization of purchase price adjustments assuming the merger had taken place on January 1, 2011. The unaudited pro forma financial information has been presented for illustrative purposes only and is not necessarily indicative of the consolidated results of operations that would have been achieved or the future consolidated results of operations of Duke Energy. This information is preliminary in nature and subject to change based on final purchase price adjustments.

The pro forma financial information does not include potential cost savings or non-recurring adjustments that will be recorded in the third quarter in connection with the merger or non-recurring costs directly related to the merger. Non-recurring transaction and integration costs incurred by both Duke Energy and Progress Energy have also been excluded from the pro forma earnings presented below. After-tax non-recurring transaction and integration costs incurred were $12 million and $18 million, respectively, for the three and six months ended June 30, 2012, and$4 million and $20 million, respectively, for the three and six months ended June 30, 2011.

Refer to Note 5 for information regarding Progress Energy merger shareholder litigation.

Vermillion Generating Station.

On January 12, 2012, after receiving approvals from the FERC and the IURC on August 12, 2011 and December 28, 2011, respectively, Duke Energy Vermillion II, LLC (Duke Energy Vermillion), an indirect wholly owned subsidiary of Duke Energy Ohio, completed the sale of its 75% undivided ownership interest in the Vermillion Generating Station (Vermillion) to Duke Energy Indiana and Wabash Valley Power Association (WVPA). Upon the closing of the sale, Duke Energy Indiana and WVPA held 62.5% and 37.5% interests in Vermillion, respectively. Duke Energy Ohio received net proceeds of $82 million, consisting of $68 million and $14 million from Duke Energy Indiana and WVPA, respectively. Following the transaction, Duke Energy Indiana retired Gallagher Units 1 and 3 effective February 1, 2012.

As Duke Energy Indiana is an affiliate of Duke Energy Vermillion the transaction has been accounted for as a transfer between entities under common control with no gain or loss recorded and did not have a significant impact to Duke Energy Ohio or Duke Energy Indiana's results of operations. The proceeds received from Duke Energy Indiana are included in Net proceeds from the sales of other assets on Duke Energy Ohio's Condensed Consolidated Statements of Cash Flows. The cash paid to Duke Energy Ohio is included in Capital expenditures on Duke Energy Indiana's Condensed Consolidated Statements of Cash Flows. Duke Energy Ohio and Duke Energy Indiana recognized non-cash equity transfers of $28 million and $26 million, respectively, in their Condensed Consolidated Statements of Common Stockholder's Equity on the transaction representing the difference between cash exchanged and the net book value of Vermillion. These amounts are not reflected in Duke Energy's Condensed Consolidated Statements of Cash Flows or Condensed Consolidated Statements of Equity as the transaction is eliminated in consolidation.

The proceeds from WVPA are included in Net proceeds from the sales of other assets, and sale of and collections on notes receivable on Duke Energy and Duke Energy Ohio's Condensed Consolidated Statements of Cash Flows. In the second quarter of 2011, Duke Energy Ohio recorded a pre-tax impairment charge of $9 million to adjust the carrying value of the proportionate share of Vermillion to be sold to WVPA to the proceeds to be received from WVPA less costs to sell. The sale of the proportionate share of Vermillion to WVPA did not result in a significant additional gain or loss upon close of the transaction.

Wind Projects Joint Venture.

In April 2012, Duke Energy executed a joint venture agreement with Sumitomo Corporation of America (SCOA). Under the terms of the agreement, Duke Energy and SCOA will each own a 50% interest in the joint venture (DS Cornerstone, LLC), which owns two wind generation projects. One of the facilities began commercial operations in June 2012 and the other facility is under construction. Duke Energy and SCOA also negotiated a $330 million, Construction and 12-year amortizing Term Loan Facility, on behalf of the borrower, a wholly owned subsidiary of the joint venture. The loan agreement is non-recourse to Duke Energy. Duke Energy received proceeds of $319 million upon execution of the loan agreement. This amount represents reimbursement of a significant portion of Duke Energy's construction costs incurred as of the date of the agreement. Beginning in April 2012, and through completion of the projects, Duke Energy and SCOA will each fund 50% of the remaining construction cost of the projects through contributions to the joint venture. Duke Energy will consolidate the joint venture until the project under construction reaches commercial operations later in 2012. This transaction is expected to result in an insignificant gain to Duke Energy at the time construction is complete, where upon Duke Energy will no longer consolidate the joint venture. See Note 11 for further information.

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Regulatory Matters

6 Months Ended

Jun. 30, 2012

Regulatory Matters

4. Regulatory Matters

Rate Related Information.

The NCUC, PSCSC, IURC, PUCO and KPSC approve rates for retail electric and gas services within their states. Non-regulated sellers of gas and electric generation are also allowed to operate in Ohio once certified by the PUCO. The FERC approves rates for electric sales to wholesale customers served under cost-based rates, as well as sales of transmission service.

Duke Energy Ohio Standard Service Offer (SSO). The PUCO approved Duke Energy Ohio's current ESP on November 22, 2011. The ESP effectively separates the generation of electricity from Duke Energy Ohio's retail load obligation and requires Duke Energy Ohio to transfer its generation assets to a non-regulated affiliate on or before December 31, 2014. The ESP includes competitive auctions for electricity supply whereby the energy price is recovered from retail customers. As a result, Duke Energy Ohio now earns retail margin on the transmission and distribution of electricity only and not on the cost of the underlying energy. New rates for Duke Energy Ohio went into effect for SSO customers on January 1, 2012. The ESP also includes a provision for a non-bypassable stability charge of $110 million per year to be collected from January 1, 2012 through December 31, 2014.

On January 18, 2012, the PUCO denied a request for rehearing of its decision on Duke Energy Ohio's ESP filed by Columbus Southern Power and Ohio Power Company.

Duke Energy Ohio Generation Asset Transfer. On April 2, 2012, Duke Energy Ohio and various affiliated entities filed an Application for Authorization for Disposition of Jurisdictional Facilities with FERC. The application seeks to transfer, from Duke Energy Ohio's rate-regulated Ohio utility company, the legacy coal-fired and combustion gas turbine assets to a non-regulated affiliate, consistent with ESP stipulation approved on November 22, 2011. The application outlines a potential additional step in the reorganization that would result in a transfer of all of Duke Energy Ohio's Commercial Power business to an indirect wholly owned subsidiary of Duke Energy as early as October 2012. The process of determining the optimal corporate structure is an ongoing evaluation of factors, such as tax considerations, that may change between now and the transfer date. In conjunction with the transfer, Duke Energy Ohio's capital structure will be restructured to reflect appropriate debt and equity ratios for its regulated Franchised Electric and Gas operations. The transfer could instead be accomplished within a wholly owned non-regulated subsidiary of Duke Energy Ohio depending on final tax structuring analysis. Duke Energy Ohio requested the FERC to rule on the application within 90 days.On June 22, 2012, Duke Energy Ohio amended its Application to include several small additional generation units to be transferred. Duke Energy Ohio requested FERC to rule on its amended Application by August 1, 2012.

Duke Energy Ohio Electric Rate Case. On July 9, 2012, Duke Energy Ohio filed an application with the PUCO for an increase in electric distribution rates of approximately $87 million. On average, total electric rates would increase approximately 5.1% under the filing. The rate increase is designed to recover the cost of investments in projects to improve reliability for customers and upgrades to the distribution system. Pursuant to a stipulation in another case, Duke Energy Ohio will continue recovering its costs associated with grid modernization in a separate rider.

Duke Energy Ohio expects revised rates would likely go into effect in early 2013.

Duke Energy Ohio Natural Gas Rate Case. On July 9, 2012, Duke Energy Ohio filed an application with the PUCO for an increase in natural gas distribution rates of approximately $45 million. On average, total natural gas rates would increase approximately 6.6% under the filing. The rate increase is designed to recover the cost of upgrades to the distribution system, as well as environmental cleanup of manufactured gas plant sites. In addition to the recovery of costs associated with the manufactured gas plants, the rate request includes a proposal for an accelerated service line replacement program that would allow smaller annual increases to reflect increased investment in the distribution system. The filing also requests that the PUCO renew the rider recovery of Duke Energy Ohio's accelerated main replacement program and grid modernization program.

Duke Energy Ohio expects revised rates would likely go into effect in early 2013.

Duke Energy Carolinas North Carolina Rate Case. On January 27, 2012, the NCUC approved a settlement agreement between Duke Energy Carolinas and the North Carolina Utilities Public Staff (Public Staff). The terms of the agreement include an average 7.2% increase in retail revenues, or approximately $309 million annually beginning in February 2012. The agreement includes a 10.5% return on equity and a capital structure of 53% equity and 47% long-term debt. In order to mitigate the impact of the increase on customers, the agreement provides for (i) Duke Energy to waive its right to increase the amount of construction work in progress in rate base for any expenditures associated with Cliffside Unit 6 above the North Carolina retail portion included in the 2009 North Carolina Rate Case, (ii) the accelerated return of certain regulatory liabilities, related to accumulated EPA sulfur dioxide auction proceeds, to customers, which lowered the total impact to customer bills to an increase of approximately 7.2% in the near-term; and (iii) an $11 million shareholder contribution to agencies that provide energy assistance to low income customers. In exchange for waiving the right to increase the amount of construction work in process for Cliffside Unit 6, Duke Energy will continue to capitalize AFUDC on all expenditures associated with Cliffside Unit 6 not included in rate base as a result of the 2009 North Carolina Rate Case.

On March 28, 2012, the North Carolina Attorney General filed a notice of appeal with the NCUC challenging the rate of return approved in the agreement. On April 17, 2012, the NCUC denied Duke Energy Carolinas' request to dismiss the notice of appeal. The North Carolina Supreme Court, which is hearing the appeal, recently docketed the appeal with briefs due August 22, 2012. Reply briefs are due 30 days later. The court is expected to set a hearing date in late fall.

Duke Energy Carolinas South Carolina Rate Case. On January 25, 2012, the PSCSC approved a settlement agreement between Duke Energy Carolinas and the Office of Regulatory Staff (ORS), Wal-Mart Stores East, LP (Wal-Mart), and Sam's East, Inc (Sam's). The Commission of Public Works for the city of Spartanburg, South Carolina and the Spartanburg Sanitary Sewer District were not parties to the agreement; however, they did not object to the agreement. The terms of the agreement include an average 5.98% increase in retail and commercial revenues, or approximately $93 million annually beginning February 6, 2012. The agreement includes a 10.5% return on equity, a capital structure of 53% equity and 47% long-term debt, and a contribution of $4 million to AdvanceSC.

Capital Expansion Projects.

Duke Energy Carolinas Cliffside Unit 6. On March 21, 2007, the NCUC issued an order allowing Duke Energy Carolinas to build an 800 MW coal-fired unit. Following final equipment selection and the completion of detailed engineering, Cliffside Unit 6 is expected to have a net output of 825 MW. On January 31, 2008, Duke Energy Carolinas filed its updated cost estimate of $1.8 billion (excluding AFUDC of $600 million) for Cliffside Unit 6. In March 2010, Duke Energy Carolinas filed an update to the cost estimate of $1.8 billion (excluding AFUDC) with the NCUC where it reduced the estimated AFUDC financing costs to $400 million as a result of the December 2009 rate case settlement with the NCUC that allowed the inclusion of construction work in progress in rate base prospectively. Duke Energy Carolinas believes that the overall cost of Cliffside Unit 6 will be reduced by $125 million in federal advanced clean coal tax credits, as discussed in Note 5. Cliffside Unit 6 is expected to begin commercial operation in the fall of 2012.

Duke Energy Carolinas Dan River Combined Cycle Facility. In June 2008, the NCUC issued its order approving the Certificate of Public Convenience and Necessity (CPCN) applications to construct a 620 MW combined cycle natural gas fired generating facility at Duke Energy Carolinas' existing Dan River Steam Station. The Division of Air Quality (DAQ) issued a final air permit authorizing construction of the Dan River combined cycle natural gas-fired generating unit in August 2009.

The Dan River project is expected to begin operation by the end of 2012. Based on the most updated cost estimates, total costs (including AFUDC) for the Dan River project are $710 million.

Duke Energy Indiana Edwardsport IGCC Plant. On September 7, 2006, Duke Energy Indiana and Southern Indiana Gas and Electric Company d/b/a Vectren Energy Delivery of Indiana (Vectren) filed a joint petition with the IURC seeking a CPCN for the construction of a 618 MW IGCC power plant at Duke Energy Indiana's Edwardsport Generating Station in Knox County, Indiana. The facility was initially estimated to cost approximately $1.985 billion (including $120 million of AFUDC). In August 2007, Vectren formally withdrew its participation in the IGCC plant and a hearing was conducted on the CPCN petition based on Duke Energy Indiana owning 100% of the project. On November 20, 2007, the IURC issued an order granting Duke Energy Indiana a CPCN for the proposed IGCC project, approved the cost estimate of $1.985 billion and approved the timely recovery of costs related to the project. On January 25, 2008, Duke Energy Indiana received the final air permit from the Indiana Department of Environmental Management. The Citizens Action Coalition of Indiana, Inc. (CAC), Sierra Club, Inc., Save the Valley, Inc., and Valley Watch, Inc., all intervenors in the CPCN proceeding, have appealed the air permit.

On May 1, 2008, Duke Energy Indiana filed its first semi-annual IGCC rider and ongoing review proceeding with the IURC as required under the CPCN order issued by the IURC. In its filing, Duke Energy Indiana requested approval of a new cost estimate for the IGCC project of $2.35 billion (including $125 million of AFUDC) and for approval of plans to study carbon capture as required by the IURC's CPCN order. On January 7, 2009, the IURC approved Duke Energy Indiana's request, including the new cost estimate of $2.35 billion, and cost recovery associated with a study on carbon capture. On November 3, 2008 and May 1, 2009, Duke Energy Indiana filed its second and third semi-annual IGCC riders, respectively, both of which were approved by the IURC in full.

On November 24, 2009, Duke Energy Indiana filed a petition for its fourth semi-annual IGCC rider and ongoing review proceeding with the IURC. As Duke Energy Indiana experienced design modifications, quantity increases and scope growth above what was anticipated from the preliminary engineering design, capital costs to the IGCC project were anticipated to increase. Duke Energy Indiana forecasted that the additional capital cost items would use the remaining contingency and escalation amounts in the current $2.35 billion cost estimate and add $150 million, excluding the impact associated with the need to add more contingency. Duke Energy Indiana did not request approval of an increased cost estimate in the fourth semi-annual update proceeding; rather, Duke Energy Indiana requested, and the IURC approved, a subdocket proceeding in which Duke Energy Indiana would present additional evidence regarding an updated estimated cost for the IGCC project and in which a more comprehensive review of the IGCC project could occur. The evidentiary hearing for the fourth semi-annual update proceeding was held April 6, 2010, and an interim order was received on July 28, 2010. The order approves the implementation of an updated IGCC rider to recover costs incurred through September 30, 2009, effective immediately. The approvals are on an interim basis pending the outcome of the sub-docket proceeding involving the revised cost estimate as discussed further below.

On April 16, 2010, Duke Energy Indiana filed a revised cost estimate for the IGCC project reflecting an estimated cost increase of $530 million. Duke Energy Indiana requested approval of the revised cost estimate of $2.88 billion (including $160 million of AFUDC), and for continuation of the existing cost recovery treatment. A major driver of the cost increase included quantity increases and design changes, which impacted the scope, productivity and schedule of the IGCC project. On September 17, 2010, an agreement was reached with the OUCC, Duke Energy Indiana Industrial Group and Nucor Steel — Indiana to increase the authorized cost estimate of $2.35 billion to $2.76 billion, and to cap the project's costs that could be passed on to customers at $2.975 billion. Any construction cost amounts above $2.76 billion would be subject to a prudence review similar to most other rate base investments in Duke Energy Indiana's next general rate increase request before the IURC. Duke Energy Indiana agreed to accept a 150 basis point reduction in the equity return for any project construction costs greater than $2.35 billion. Additionally, Duke Energy Indiana agreed not to file for a general rate case increase before March 2012. Duke Energy Indiana also agreed to reduce depreciation rates earlier than would otherwise be required and to forego a deferred tax incentive related to the IGCC project. As a result of the settlement, Duke Energy Indiana recorded a pre-tax charge to earnings of approximately $44 million in the third quarter of 2010 to reflect the impact of the reduction in the return on equity. Due to the IURC investigation discussed below, the IURC convened a technical conference on November 3, 2010, related to the continuing need for the Edwardsport IGCC facility. On December 9, 2010, the parties to the settlement withdrew the settlement agreement to provide an opportunity to assess whether and to what extent the settlement agreement remained a reasonable allocation of risks and rewards and whether modifications to the settlement agreement were appropriate. Management determined that the approximate $44 million charge discussed above was not impacted by the withdrawal of the settlement agreement.

During 2010, Duke Energy Indiana filed petitions for its fifth and sixth semi-annual IGCC riders. Evidentiary hearings were held on April 24, 2012 and April 25, 2012.

The CAC, Sierra Club, Inc., Save the Valley, Inc., and Valley Watch, Inc. filed motions for two subdocket proceedings alleging improper communications, undue influence, fraud, concealment and gross mismanagement, and a request for field hearing in this proceeding. Duke Energy Indiana opposed the requests. On February 25, 2011, the IURC issued an order which denied the request for a subdocket to investigate the allegations of improper communications and undue influence at this time, finding there were other agencies better suited for such investigation. The IURC also found that allegations of fraud, concealment and gross mismanagement related to the IGCC project should be heard in a Phase II proceeding of the cost estimate subdocket and set evidentiary hearings on both Phase I (cost estimate increase) and Phase II beginning in August 2011. After procedural delays, hearings were held on Phase I on October 26, 2011 and on Phase II on November 21, 2011.

On March 10, 2011, Duke Energy Indiana filed testimony with the IURC proposing a framework designed to mitigate customer rate impacts associated with the Edwardsport IGCC project. Duke Energy Indiana's filing proposed a cap on the project's construction costs, (excluding financing costs), which can be recovered through rates at $2.72 billion. It also proposed rate-related adjustments that will lower the overall customer rate increase related to the project from an average of 19% to approximately 16%.

On June 27, 2011, Duke Energy Indiana filed testimony with the IURC in connection with its seventh semi-annual rider request which included an update on the current cost forecast of the Edwardsport IGCC project. The updated forecast excluding AFUDC increased from $2.72 billion to $2.82 billion, not including any contingency for unexpected start-up events. On June 30, 2011, the OUCC and intervenors filed testimony in Phase I recommending that Duke Energy Indiana be disallowed cost recovery of any of the additional cost estimate increase above the previously approved cost estimate of $2.35 billion. Duke Energy Indiana filed rebuttal testimony on August 3, 2011.

On November 30, 2011, Duke Energy Indiana filed a petition with the IURC in connection with its eighth semi-annual rider request for the Edwardsport IGCC project. Evidentiary hearings for the seventh and eighth semi-annual rider requests are scheduled for August 6, 2012 and August 7, 2012.

In the subdocket proceeding, on July 14, 2011, the OUCC and certain intervenors filed testimony in Phase II alleging that Duke Energy Indiana concealed information and grossly mismanaged the project, and therefore Duke Energy Indiana should only be permitted to recover from customers $1.985 billion, the original IGCC project cost estimate approved by the IURC. Other intervenors recommended that Duke Energy Indiana not be able to rely on any cost recovery granted under the CPCN or the first cost increase order. Duke Energy Indiana believes it has diligently and prudently managed the project. On September 9, 2011, Duke Energy defended against the allegations in its responsive testimony. The OUCC and intervenors filed their final rebuttal testimony in Phase II on or before October 7, 2011, making similar claims of fraud, concealment and gross mismanagement and recommending the same outcome of limiting Duke Energy Indiana's recovery to the $1.985 billion initial cost estimate. Additionally, the CAC recommended that recovery be limited to the costs incurred on the IGCC project as of November 30, 2009 (Duke Energy Indiana estimates it had committed costs of $1.6billion), with further IURC proceedings to be held to determine the financial consequences of this recommendation.

On October 19, 2011, Duke Energy Indiana revised its project cost estimate from approximately $2.82 billion, excluding financing costs, to approximately $2.98 billion, excluding financing costs. The revised estimate reflects additional cost pressures resulting from quantity increases and the resulting impact on the scope, productivity and schedule of the IGCC project. Duke Energy Indiana previously proposed to the IURC a cost cap of approximately $2.72 billion, plus the actual AFUDC that accrues on that amount. As a result, Duke Energy Indiana recorded a pre-tax impairment charge of approximately $222 million in the third quarter of 2011 related to costs expected to be incurred above the cost cap. This charge is in addition to a pre-tax impairment charge of approximately $44 million recorded in the third quarter of 2010 as discussed above. The cost cap, if approved by the IURC, limits the amount of project construction costs that may be incorporated into customer rates in Indiana. As a result of the proposed cost cap, recovery of these cost increases is not considered probable. Additional updates to the cost estimate could occur through the completion of the plant in 2012.

Phase I and Phase II hearings concluded on January 24, 2012. The CAC has filed repeated requests for the IURC to consider issues of ethics, undue influence, due process violations and appearance of impropriety. The IURC denied the most recent motion in March 2012. In April 2012, the CAC filed a motion requesting the IURC to certify questions of law for appeal regarding allegations of fraud on the commission and due process violations. This motion was denied.

On April 30, 2012, Duke Energy Indiana entered into a settlement agreement with the OUCC, the Duke Energy Indiana Industrial Group and Nucor Steel-Indiana on the cost increase for construction of the Edwardsport IGCC plant, including both Phase I and Phase II of the sub docket. Pursuant to the agreement, there would be a cap on costs to be reflected in customer rates of $2.595 billion, including estimated financing costs through June 30, 2012. Pursuant to the agreement, Duke Energy Indiana wouldbe able to recover additional financing costs until customer rates are revised. Duke Energy Indiana also agrees not to request a retail electric base rate increase prior to March 2013, with rates in effect no earlier than April 1, 2014. The agreement is subject to approval by the IURC, and the settling parties have requested that schedule be set to hear evidence in support of the settlement agreement, which could allow for an IURC order as early as the summer of 2012. As a result of the agreement, Duke Energy Indiana recorded pre-tax impairment and other charges of approximately $420 million in the first quarter of 2012. Approximately $400 million is recorded in Impairment charges and the remaining approximately $20 million is recorded in Operation, maintenance and other on Duke Energy's Condensed Consolidated Statement of Operations and in Duke Energy Indiana's Condensed Consolidated Statements of Operations and Comprehensive Income. The $20 million recorded in Operation, maintenance and other, is attributed to legal fees Duke Energy Indiana will be responsible for on behalf of certain intervenors, as well as funding for low income energy assistance, as required by the settlement agreement. These charges are in addition to pre-tax impairment charges of approximately $222 million in the third quarter of 2011 and $44 million recorded in the third quarter of 2010, as discussed above.

The CAC, Sierra Club Indiana chapter, Save the Valley and Valley Watch, filed testimony in opposition to the April 30, 2012settlement agreement contending the agreement should not be approved, and that the amount of costs recovered from customers should be less than what the settlement agreement provides, potentially even zero. In addition to reiterating their prior concerns with the Edwardsport IGCC project, the intervenors noted above also contend new settlement terms should be added to mitigate carbon emissions, conditions should be added prior to the plant being declared in-service and the IURC should consider their allegations of undue influence. Duke Energy Indiana, the Industrial Group and the OUCC, filed rebuttal testimony supporting the settlement as reasonable and in the public interest. An evidentiary hearing on the settlement agreement concluded on July 19, 2012.Duke Energy Indiana, the Industrial Group and the OUCC will file a proposed order by August 17, 2012. A final order is expected by the end of the year.

On June 8, 2012, Duke Energy Indiana filed a petition with the IURC in connection with its ninth semi-annual rider request for the Edwardsport IGCC project. Evidentiary hearings for the ninth semi-annual rider requests are scheduled for January 14, 2013 and January 15, 2013.

Duke Energy is unable to predict the ultimate outcome of these proceedings. In the event the IURC disallows a portion of the remaining plant costs, including financing costs, or if cost estimates for the plant increase, additional charges to expense, which could be material, could occur. Construction of the Edwardsport IGCC plant is ongoing and the expected in-service date for the plant has been delayed from the fourth quarter of 2012 to the first quarter of 2013. The impact of this delay on the cost of the plant is currently being analyzed but cannot be determined at this time.

Duke Energy Carolinas William States Lee III Nuclear Station. In December 2007, Duke Energy Carolinas filed an application with the NRC, which has been docketed for review, for a combined Construction and Operating License (COL) for two Westinghouse AP1000 (advanced passive) reactors for the proposed William States Lee III Nuclear Station (Lee Nuclear Station) at a site in Cherokee County, South Carolina. Each reactor is capable of producing 1,117 MW. Submitting the COL application does not commit Duke Energy Carolinas to build nuclear units. Through several separate orders, the NCUC and PSCSC have concurred with the prudency ofDuke Energy incurring project development and pre-construction costs.

Duke Energy Carolinas V.C. Summer Nuclear Station Letter of Intent. In July 2011, Duke Energy Carolinas signed a letter of intent with Santee Cooper related to the potential acquisition by Duke Energy Carolinas of a 5% to 10% ownership interest in the V.C. Summer Nuclear Station being developed by Santee Cooper and SCE&G near Jenkinsville, South Carolina. The letter of intent provides a path for Duke Energy Carolinas to conduct the necessary due diligence to determine if future participation in this project is beneficial for its customers.

Potential Plant Retirements.

The Subsidiary Registrants periodically file Integrated Resource Plans (IRP) with their state regulatory commissions. The IRPs provide a view of forecasted energy needs over a long term (15-20 years), and options being considered to meet those needs. The IRP's filed by the Subsidiary Registrants in 2011 and 2010 included planning assumptions to potentially retire by 2015, certain coal-fired generating facilities in North Carolina, South Carolina, Indiana and Ohio that do not have the requisite emission control equipment, primarily to meet EPA regulations that are not yet effective.

Duke Energy classifies generating facilities that are still operating but are expected to be retired significantly before the end of their previously estimated useful lives as Generation facilities to be retired, net, on the Condensed Consolidated Balance Sheets. Amounts are reclassified from the cost and accumulated depreciation of Property, plant and equipment when it becomes probable the plant will be retired. Duke Energy continues to depreciate these generating facilities based on current depreciable lives. When such facilities are removed from service, the remaining net carrying value, if any, is then reclassified to regulatory assets, in accordance with the expected ratemaking treatment.

The table below containsthe net carrying value of generating facilities being evaluated for potential retirement included in the Condensed Consolidated Balance Sheets.

		June 30, 2012
		Duke Energy		Duke Energy Carolinas(b)(c)		Duke Energy Ohio(d)		Duke Energy Indiana(e)
Capacity (in MW)			2,773		1,080		1,025		668
Remaining net book value (in millions)(a)		$	327	$	176	$	13	$	138
(a)	Included in Property, plant and equipment, net as of June 30, 2012, on the Condensed Consolidated Balance Sheets, unless otherwise noted.
(b)	Includes Riverbend Units 4 through 7, Lee Units 1 through 3 and Buck Units 5 and 6. Duke Energy Carolinas has committed to retire 1,667 MW in conjunction with a Cliffside air permit settlement, of which 587 MW have already been retired as of June 30, 2012.
(c)	Net book value of Buck Units 5 and 6 of $73 million is included in Generation facilities to be retired, net, on the Condensed Consolidated Balance Sheets at June 30, 2012.
(d)	Includes Beckjord Station and Miami Fort Unit 6. Beckjord has no remaining book value.
(e)	Includes Wabash River Units 2 through 6.
Duke Energy continues to evaluate the potential need to retire these coal-fired generating facilities earlier than the current estimated useful lives, and plans to seek regulatory recovery for amounts that would not be otherwise recovered when any of these assets are retired.

Other Matters.

Progress Energy Merger NCUC and North Carolina Department of Justice (NCDOJ) Investigations. On July 6, 2012, the NCUC issued an order initiating investigation and scheduling hearings addressing the timing of the Duke Energy board of directors' decision on July 2, 2012, to replace William D. Johnson with James E. Rogers as President and Chief Executive Officer (CEO) of Duke Energy, as well as other related matters.

Pursuant to the merger agreement, William D. Johnson, Chairman, President and CEO of Progress Energy became President and CEO of Duke Energy and James E. Rogers, Chairman, President and CEO of Duke Energy became Executive Chairman of Duke Energy upon close of the merger. Mr. Johnson subsequently resigned as the President and CEO of Duke Energy, effective July 3, 2012.

Pursuant to the NCUC's July 6, 2012 order, Mr. Rogers appeared before the NCUC on July 10, 2012, and provided testimony regarding the approval and closing of the merger and his replacement of Mr. Johnson as the President and CEO of Duke Energy. On July 19, 2012, Mr. Johnson, as well as E. Marie McKee and James B. Hyler, Jr., both former members of the Progress Energy board of directors and current members of the post-merger Duke Energy board of directors, appeared before the NCUC. Ann M. Gray and Michael G. Browning, both members of the pre-merger and post-merger Duke Energy board of directors, appeared before the NCUC on July 20, 2012. All provided testimony on the timing of the decision to replace Mr. Johnson with Mr. Rogers, as well as other related matters.

The NCUC's order also requests that Duke Energy provide certain documents related to the issue for its review.Duke Energy also received an Investigative Demand issued by the NCDOJ on July 6, 2012, requesting the production of certain documents related to the issues which are also the subject of the NCUC Investigation.Duke Energy's responses to these requests were submitted on August 7, 2012. Duke Energy is unable to predict the ultimate outcome of these proceedings.

Refer to Note 5 for information regarding Progress Energy merger shareholder litigation.

Duke Energy Ohio and Duke Energy Kentucky Regional Transmission Organization Realignment. Duke Energy Ohio, which includes its wholly owned subsidiary Duke Energy Kentucky, transferred control of its transmission assets to effect a Regional Transmission Organization (RTO) realignment from MISO to PJM, effective December 31, 2011.

On December 16, 2010, the FERC issued an order related to MISO's cost allocation methodology surrounding Multi-Value Projects (MVP), a type of MISO Transmission Expansion Planning (MTEP) project cost. MISO expects that MVP will fund the costs of large transmission projects designed to bring renewable generation from the upper Midwest to load centers in the eastern portion of the MISO footprint. MISO approved MVP proposals with estimated project costs of approximately $5.2 billion prior to the date of Duke Energy Ohio's exit from MISO on December 31, 2011. These projects are expected to be undertaken by the constructing transmission owners from 2012 through 2020 with costs recovered through MISO over the useful life of the projects. The FERC order did not clearly and expressly approve MISO's apparent interpretation that a withdrawing transmission owner is obligated to pay its share of costs of all MVP projects approved by MISO up to the date of the withdrawing transmission owners' exit from MISO. Duke Energy Ohio, including Duke Energy Kentucky, has historically represented approximately five-percent of the MISO system. The impact of this order is not fully known, but could result in a substantial increase in MISO transmission expansion costs allocated to Duke Energy Ohio and Duke Energy Kentucky subsequent to a withdrawal from MISO. Duke Energy Ohio and Duke Energy Kentucky, among other parties, sought rehearing of the FERC MVP order. On October 21, 2011, the FERC issued an order on rehearing in this matter largely affirming its original MVP order and conditionally accepting MISO's compliance filing as well as determining that the MVP allocation methodology is consistent with cost causation principles and FERC precedent. The FERC also reiterated that it will not prejudge any settlement agreement between an RTO and a withdrawing transmission owner for fees that a withdrawing transmission owner owes to the RTO. The order further states that any such fees that a withdrawing transmission owner owes to an RTO are a matter for those parties to negotiate, subject to review by the FERC. The FERC also ruled that Duke Energy Ohio and Duke Energy Kentucky's challenge of MISO's ability to allocate MVP costs to a withdrawing transmission owner is beyond the scope of the proceeding. The order further stated that MISO's tariff withdrawal language establishes that once cost responsibility for transmission upgrades is determined, withdrawing transmission owners retain any costs incurred prior to the withdrawal date. In order to preserve their rights, Duke Energy Ohio and Duke Energy Kentucky filed an appeal of the FERC order in the D.C. Circuit Court of Appeals. The case was consolidated with appeals of the FERC order by other parties in the Seventh Circuit Court of Appeals.

Duke Energy Ohio and Duke Energy Kentucky have entered into settlements or have received state regulatory approvals associated with the RTO realignment. On December 22, 2010, the KPSC issued an order granting approval of Duke Energy Kentucky's request to effect the RTO realignment, subject to several conditions. The conditions accepted by Duke Energy Kentucky include a commitment to not seek to double-recover in a future rate case the transmission expansion fees that may be charged by MISO and PJM in the same period or overlapping periods. On January 25, 2011, the KPSC issued an order stating that the order had been satisfied and is now unconditional.

On April 26, 2011, Duke Energy Ohio, Ohio Energy Group, The Office of Ohio Consumers' Counsel and the Commission Staff filed an Application and a Stipulation with the PUCO regarding Duke Energy Ohio's recovery via a non-bypassable rider of certain costs related to its proposed RTO realignment. Under the Stipulation, Duke Energy Ohio would recover all MTEP costs, including but not limited to MVP costs, directly or indirectly charged to Duke Energy Ohio retail customers. Duke Energy Ohio would not seek to recover any portion of the MISO exit obligation, PJM integration fees, or internal costs associated with the RTO realignment and the first $121 million of PJM transmission expansion costs from Ohio retail customers. Duke Energy Ohio also agreed to vigorously defend against any charges for MVP projects from MISO. On May 25, 2011, the Stipulation was approved by the PUCO. An application for rehearing filed by Ohio Partners for Affordable Energy was denied by the PUCO on July 15, 2011.

On October 14, 2011, Duke Energy Ohio and Duke Energy Kentucky filed an application with the FERC to establish new wholesale customer rates for transmission service under PJM's Open Access Transmission Tariff. In this filing, Duke Energy Ohio and Duke Energy Kentucky sought recovery of their legacy MTEP costs, including MVP costs, and submitted an analysis showing that the benefits of the RTO realignment outweigh the costs to the customers. The new rates went into effect, subject to refund, on January 1, 2012. Protests were filed by certain transmission customers. On April 24, 2012, FERC issued an order in which it, among other things, denied recovery of legacy MTEP costs without prejudice to the right of Duke Energy Ohio and Duke Energy Kentucky to make another filing including a more comprehensive cost-benefit analysis to support such recovery. Settlement discussions are underway with the relevant intervening parties that address matters raised in the initial October 14, 2011 filing.

On November 2, 2011, MISO, the MISO Transmission Owners, Duke Energy Ohio and Duke Energy Kentucky jointly submitted to the FERC a filing that addresses the treatment of MTEP costs, excluding MVP costs. The November 2, 2011 filing, which was accepted by the FERC on December 30, 2011, provides that the MISO Transmission Owners will continue to be obligated to construct the non-MVP MTEP projects, for which Duke Energy Ohio and Duke Energy Kentucky will continue to be obligated to pay a portion of the costs. Likewise, transmission customers serving load in MISO will continue to be obligated to pay a portion of the costs of a previously identified non-MVP MTEP project that Duke Energy Ohio has constructed.

On December 29, 2011, MISO filed with FERC a Schedule 39 to MISO's tariff. Schedule 39 provides for the allocation of MVP costs to a withdrawing owner based on the owner's actual transmission load after the owner's withdrawal from MISO, or, if the owner fails to report such load, based on the owner's historical usage in MISO assuming annual load growth. On January 19, 2012, Duke Energy Ohio and Duke Energy Kentucky filed with FERC a protest of the allocation of MVP costs to them under Schedule 39. On February 27, 2012, the FERC accepted Schedule 39 as a just and reasonable basis for MISO to charge for MVP costs, a transmission owner that withdraws from MISO after January 1, 2012. The FERC set for hearing whether MISO's proposal to use the methodology in Schedule 39 to calculate the obligation of transmission owners who withdrew from MISO prior to January 1, 2012 (such as Duke Energy Ohio and Duke Energy Kentucky) to pay for MVP costs is consistent with the MVP-related withdrawal obligations in the tariff at the time that they withdrew from MISO, and, if not, what amount of, and methodology for calculating, any MVP cost responsibility should be. On March 28, 2012, Duke Energy Ohio and Duke Energy Kentucky filed a request for rehearing of FERC's order on MISO's Schedule 39. This hearing is expected to be scheduled for the first quarter of 2013.

On December 31, 2011, Duke Energy Ohio recorded a liability for its MISO exit obligation and share of MTEP costs, excluding MVP, of approximately $110 million. This liability was recorded within Other in Current liabilities and Other in Deferred credits and other liabilities on Duke Energy Ohio's Condensed Consolidated Balance Sheets upon exit from MISO on December 31, 2011. Approximately $74 million of this amount was recorded as a regulatory asset while $36 million was recorded to Operation, maintenance and other in Duke Energy Ohio's Condensed Consolidated Statements of Operations and Comprehensive Income. In addition to the above amounts, Duke Energy Ohio may also be responsible for costs associated with MISO MVP projects. Duke Energy Ohio is contesting its obligation to pay for such costs. However, depending on the final outcome of this matter, Duke Energy Ohio could incur material costs associated with MVP projects, which are not reasonably estimable at this time. Regulatory accounting treatment will be pursued for any costs incurred in connection with the resolution of this matter.

The following table provides a reconciliation of the beginning and ending balance of Duke Energy Ohio's recorded obligations related to its withdrawal from MISO:

	Balance at		Provision /		Cash		Balance at
(in millions)	December 31, 2011		Adjustments		Reductions		June 30, 2012
Duke Energy Ohio	$	110	$	2	$	(15)	$	97

Duke Energy Indiana Phase 2 Environmental Compliance Proceeding. On June 28, 2012, Duke Energy Indiana filed with the IURC a plan for the addition of certain environmental pollution control projects on several of its coal-fired generating units in order to comply with existing and proposed environmental rules and regulations. The plan calls for a combination of selective catalytic reduction systems, dry sorbent injection systems for SO3 mitigation, activated carbon injection systems and/or mercury re-emission chemical injection systems. The capital costs are estimated at $450 million (excluding AFUDC). Duke Energy Indiana also indicated that it preliminarily anticipates the retirement of Wabash River Units 2 through 5 in 2015 and is still evaluating future equipment additions or retirement of Wabash River Unit 6. A procedural schedule for the IURC proceeding has not been established.

Duke Energy Indiana Carbon Sequestration. Duke Energy Indiana filed a petition with the IURC requesting approval of its plans for studying carbon storage, sequestration and/or enhanced oil recovery for the carbon dioxide (CO2) from the Edwardsport IGCC facility on March 6, 2009. On July 7, 2009, Duke Energy Indiana filed its case-in-chief testimony requesting approval for cost recovery of a $121 million site assessment and characterization plan for CO2 sequestration options including deep saline sequestration, depleted oil and gas sequestration and enhanced oil recovery for the CO2 from the Edwardsport IGCC facility. The OUCC filed testimony supportive of the continuing study of carbon storage, but recommended that Duke Energy Indiana break its plan into phases, recommending approval of only $33 million in expenditures at this time and deferral of expenditures rather than cost recovery through a tracking mechanism as proposed by Duke Energy Indiana. The CAC, an intervenor, recommended against approval of the carbon storage plan stating customers should not be required to pay for research and development costs. Duke Energy Indiana's rebuttal testimony was filed October 30, 2009, wherein it amended its request to seek deferral of $42 million to cover the carbon storage site assessment and characterization activities scheduled to occur through the end of 2010, with further required study expenditures subject to future IURC proceedings. An evidentiary hearing was held on November 9, 2009.

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Debt And Credit Facilities (Narrative) (Details) (USD $)	6 Months Ended	12 Months Ended
	Jun. 30, 2012	Dec. 31, 2011
Credit facility, outstanding balance	$ 6,000,000,000
Debt to total capitalization percentage, for each borrower	65
Current maturities of long-term debt	1,870,000,000	1,894,000,000
Duke Energy Corp [Member]
Notes fixed interest rate	5.65%
Demand notes, maximum amount available for sale	500,000,000
Equity method investment, ownership percentage sale		25.00%
Investment balance		64,000,000
Investment balance, debt obligations		64,000,000
Proceeds from sales of notes	209,000,000	79,000,000
Current maturities of long-term debt	250,000,000
Debt Instrument, Maturity Date	Jun. 01, 2013
Duke Energy Indiana [Member]
Debt to total capitalization percentage, for each borrower	65
Current maturities of long-term debt	5,000,000	6,000,000
Duke Energy Ohio [Member]
Debt to total capitalization percentage, for each borrower	65
Current maturities of long-term debt	757,000,000	507,000,000
Duke Energy Carolinas [Member]
Debt to total capitalization percentage, for each borrower	65
Current maturities of long-term debt	427,000,000	1,178,000,000
Duke Energy Master Credit Facility expiring in November 2016 [Member]
Available Capacity	4,000,000,000
Conditional capacity	2,000,000,000
First Mortgage Bonds [Member] | Duke Energy Indiana [Member]
Notes fixed interest rate	4.20%
Debt Instrument, Maturity Date	Mar. 15, 2042
Debt Instrument, Issuance Date	March 2012
Debt Instrument, Face Amount	250,000,000
First Mortgage Bonds [Member] | Duke Energy Ohio [Member]
Notes fixed interest rate	2.10%
Current maturities of long-term debt	250,000,000
Debt Instrument, Maturity Date	Jun. 01, 2013
First Mortgage Bonds [Member] | Duke Energy Carolinas [Member]
Debt Instrument, Issuance Date	December 2011
Debt Instrument, Face Amount	1,000,000,000
Unsecured Notes [Member] | Duke Energy Ohio [Member]
Notes fixed interest rate	5.70%
Current maturities of long-term debt	500,000,000	500,000,000
Debt Instrument, Maturity Date	Sep. 01, 2012
Unsecured Notes [Member] | Duke Energy Carolinas [Member]
Notes fixed interest rate	6.25%	5.625%
Current maturities of long-term debt	400,000,000	400,000,000
Debt Instrument, Maturity Date	Jan. 15, 2012	Nov. 01, 2012
Debt Instrument, Face Amount	750,000,000
CRC Credit Facility [Member]
Credit facility, outstanding balance	$ 269,000,000	$ 273,000,000
Line of Credit Facility, Expiration Date	October 2012

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Variable Interest Entities (Consolidated VIEs) (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011	Jun. 30, 2011	Dec. 31, 2010
Cash and cash equivalents	$ 1,526	$ 2,110	$ 1,362	$ 1,670
Restricted Receivables of VIEs	1,233	1,157
Other Current Assets	1,122	1,051
Intangibles, net	357	363
Restricted Other Assets of VIEs	133	135
Other Assets	1,894	2,231
Property, Plant and Equipment Cost, VIEs	1,357	913
Less: Accumulated depreciation and amortization	(19,101)	(18,709)
Other Deferred Debits	159	153
Accounts payable	1,160	1,433
Non-Recourse Notes Payable	269	273
Taxes accrued	359	431
Current Maturities of Long-Term Debt	1,870	1,894
Other Current Liabilities	1,434	1,091
Non-Recourse Long-Term Debt	915	949
Deferred income taxes	7,914	7,581
Asset Retirement Obligation	1,999	1,936
Other Liabilities	1,820	1,778
Noncontrolling interests	97	93
Duke Energy Carolinas [Member]
Cash and cash equivalents	18	289	143	153
Restricted Receivables of VIEs	680	581
Other Current Assets	327	278
Other Assets	971	968
Less: Accumulated depreciation and amortization	(11,374)	(11,269)
Other Deferred Debits	68	71
Accounts payable	448	793
Taxes accrued	109	126
Current Maturities of Long-Term Debt	427	1,178
Other Current Liabilities	481	398
Non-Recourse Long-Term Debt	300	300
Deferred income taxes	4,891	4,555
Asset Retirement Obligation	1,904	1,846
Other Liabilities	900	926
Duke Energy Corp [Member]
Current Maturities of Long-Term Debt	250
Variable Interest Entity [Member] | Cinergy Receivables [Member]
Restricted Receivables of VIEs	522	547
Total Assets	522	547
Non-Recourse Notes Payable	269	273
Total Liabilities	269	273
Net Assets of Consolidated VIEs	253	274
Variable Interest Entity [Member] | CinCap V [Member]
Restricted Receivables of VIEs	14	13
Other Current Assets	2	2
Restricted Other Assets of VIEs	58	65
Other Assets	11	14
Total Assets	85	94
Current Maturities of Long-Term Debt	12	11
Other Current Liabilities	2	3
Non-Recourse Long-Term Debt	55	60
Other Liabilities	9	13
Total Liabilities	78	87
Net Assets of Consolidated VIEs	7	7
Variable Interest Entity [Member] | Renewables [Member]
Restricted Receivables of VIEs	14	13
Other Current Assets	118	124
Intangibles, net	34	12
Restricted Other Assets of VIEs	17	10
Other Assets	2	36
Property, Plant and Equipment Cost, VIEs	1,357	913
Less: Accumulated depreciation and amortization	(83)	(62)
Other Deferred Debits	34	24
Total Assets	1,493	1,070
Accounts payable	7	1
Taxes accrued	3	3
Current Maturities of Long-Term Debt	361	49
Other Current Liabilities	20	59
Non-Recourse Long-Term Debt	502	528
Deferred income taxes	155	160
Asset Retirement Obligation	18	13
Other Liabilities	42	37
Total Liabilities	1,108	850
Net Assets of Consolidated VIEs	385	220
Variable Interest Entity [Member] | Other VIEs [Member]
Restricted Receivables of VIEs	3	3
Other Current Assets	7	8
Restricted Other Assets of VIEs	58	60
Other Deferred Debits	1	2
Total Assets	69	73
Accounts payable	2	1
Current Maturities of Long-Term Debt	4	5
Other Current Liabilities	1
Non-Recourse Long-Term Debt	58	61
Total Liabilities	65	67
Noncontrolling interests	2	1
Net Assets of Consolidated VIEs	2	5
Variable Interest Entity [Member] | Total Consolidated VIE {Member]
Restricted Receivables of VIEs	1,233	1,157
Other Current Assets	127	134
Intangibles, net	34	12
Restricted Other Assets of VIEs	133	135
Other Assets	13	50
Property, Plant and Equipment Cost, VIEs	1,357	913
Less: Accumulated depreciation and amortization	(83)	(62)
Other Deferred Debits	35	26
Total Assets	2,849	2,365
Accounts payable	9	2
Non-Recourse Notes Payable	269	273
Taxes accrued	3	3
Current Maturities of Long-Term Debt	377	65
Other Current Liabilities	23	62
Non-Recourse Long-Term Debt	915	949
Deferred income taxes	155	160
Asset Retirement Obligation	18	13
Other Liabilities	51	50
Total Liabilities	1,820	1,577
Noncontrolling interests	2	1
Net Assets of Consolidated VIEs	1,027	787
Variable Interest Entity [Member] | Duke Energy Carolinas [Member] | DERF [Member]
Restricted Receivables of VIEs	680	581
Total Assets	680	581
Non-Recourse Long-Term Debt	300	300
Total Liabilities	300	300
Net Assets of Consolidated VIEs	$ 380	$ 281

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Debt And Credit Facilities (Schedule Of Line Of Credit Facilities) (Details) (Master Credit Facility [Member], USD $) In Millions, unless otherwise specified	Jun. 30, 2012
Facility Size	$ 4,000
Outstanding Letters of Credit	(27)
Notes Payable and Commercial Paper	(1,034)
Tax Exempt Bonds	(260)
Available Capacity	2,679
Duke Energy Corp [Member]
Facility Size	1,250
Outstanding Letters of Credit	(20)
Notes Payable and Commercial Paper	(518)
Tax Exempt Bonds	0
Available Capacity	712
Duke Energy Carolinas [Member]
Facility Size	1,250
Outstanding Letters of Credit	(7)
Notes Payable and Commercial Paper	(300)
Tax Exempt Bonds	(95)
Available Capacity	848
Duke Energy Ohio [Member]
Facility Size	750
Outstanding Letters of Credit	0
Notes Payable and Commercial Paper	0
Tax Exempt Bonds	(84)
Available Capacity	666
Duke Energy Indiana [Member]
Facility Size	750
Outstanding Letters of Credit	0
Notes Payable and Commercial Paper	(216)
Tax Exempt Bonds	(81)
Available Capacity	$ 453

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Committments and Contingencies (Schedule of Reserves and Insurance Recoveries) (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2012		Dec. 31, 2011
Reserves for legal matters	$ 792	[1],[2]	$ 810	[1],[2]
Probable insurance recoveries	813	[3],[4]	813	[3],[4]
Duke Energy Carolinas [Member]
Reserves for legal matters	776	[1],[2]	801	[1],[2]
Probable insurance recoveries	813	[3],[4]	813	[3],[4]
Duke Energy Indiana [Member]
Reserves for legal matters	$ 8	[1]	$ 4	[1]

[1] Reserves are classified in the respective Condensed Consolidated Balance Sheets in Other within Deferred Credits and Other Liabilities and Other within Current Liabilities.

[2] Includes reserves for aforementioned asbestos-related injuries and damages claims.

[3] Insurance recoveries are classified in the respective Condensed Consolidated Balance Sheets in Other within Investments and Other Assets and Receivables.

[4] Relates to recoveries associated with aforementioned asbestos-related injuries and damages claims.

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Employee Benefit Plans (Components Of Net Periodic Pension Costs) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended				6 Months Ended
	Jun. 30, 2012		Jun. 30, 2011		Jun. 30, 2012		Jun. 30, 2011
Defined Contribution Plan, Cost Recognized	$ 19				$ 47		$ 50
Duke Energy Carolinas [Member]
Defined Contribution Plan, Cost Recognized	9		8		20		20
Duke Energy Ohio [Member]
Defined Contribution Plan, Cost Recognized	1		1		2		2
Duke Energy Indiana [Member]
Defined Contribution Plan, Cost Recognized	1		2		3		5
Qualified Pension Plans [Member]
Service cost	22		24		45		48
Interest cost on benefit obligation	59		58		120		116
Expected return on plan assets	(94)		(96)		(188)		(192)
Amortization of prior service cost (credit)	2		1		3		3
Amortization of net transition liability	0		0		0		0
Amortization of loss (gain)	25		19		49		38
Other	1		5		2		9
Net periodic costs	15	[1]	11	[1]	31	[2]	22	[2]
Regulatory asset amortization	4		3		7		7
Qualified Pension Plans [Member] | Duke Energy Carolinas [Member]
Service cost	8		10		17		19
Interest cost on benefit obligation	22		22		45		43
Expected return on plan assets	(37)		(38)		(73)		(75)
Amortization of prior service cost (credit)	1		0		1		0
Amortization of net transition liability	0		0		0		0
Amortization of loss (gain)	12		9		23		18
Other	1		2		1		4
Net periodic costs	7		5		14		9
Qualified Pension Plans [Member] | Duke Energy Ohio [Member]
Service cost	1		1		3		3
Interest cost on benefit obligation	8		8		16		16
Expected return on plan assets	(11)		(11)		(22)		(22)
Amortization of prior service cost (credit)					5		4
Amortization of loss (gain)	3		2
Other	0		1		0		1
Net periodic costs	1	[3]	1	[3]	2	[4]	2	[4]
Regulatory asset amortization	1		1		3		3
Qualified Pension Plans [Member] | Duke Energy Indiana [Member]
Service cost	3		2		5		5
Interest cost on benefit obligation	7		8		15		15
Expected return on plan assets	(11)		(11)		(23)		(22)
Amortization of prior service cost (credit)	0		1		1		1
Amortization of loss (gain)	4		3		7		7
Other	0		1		0		1
Net periodic costs	3		4		5		7
Non-Qualified Pension Plans [Member]
Service cost	0		1		1		1
Interest cost on benefit obligation	1		2		3		4
Expected return on plan assets	0		0		0		0
Amortization of prior service cost (credit)	1		0		1		1
Amortization of net transition liability	0		0		0		0
Amortization of loss (gain)	1		0		1		0
Other	0		0		0		0
Net periodic costs	3		3		6		6
Non-Qualified Pension Plans [Member] | Duke Energy Carolinas [Member]
Service cost					0		0
Interest cost on benefit obligation					1		1
Expected return on plan assets					0		0
Amortization of prior service cost (credit)					0		0
Amortization of net transition liability					0		0
Amortization of loss (gain)					0		0
Other					0		0
Net periodic costs					1		1
Other Post-Retirement Benefit plans [Member]
Service cost	1		3		3		4
Interest cost on benefit obligation	9		9		17		18
Expected return on plan assets	(4)		(4)		(8)		(8)
Amortization of prior service cost (credit)	(2)		(2)		(4)		(4)
Amortization of net transition liability	2		2		4		5
Amortization of loss (gain)	(1)		(1)		(3)		(2)
Other	0		0		0		0
Net periodic costs	5	[5]	7	[5]	9	[6]	13	[6]
Regulatory asset amortization	2		2		4		4
Other Post-Retirement Benefit plans [Member] | Duke Energy Carolinas [Member]
Service cost	0		1		1		1
Interest cost on benefit obligation	4		4		8		8
Expected return on plan assets	(2)		(3)		(5)		(5)
Amortization of prior service cost (credit)	(1)		(2)		(2)		(3)
Amortization of net transition liability	2		3		3		5
Amortization of loss (gain)	0		0		1		1
Other	0		0		0		0
Net periodic costs	3		3		6		7
Other Post-Retirement Benefit plans [Member] | Duke Energy Ohio [Member]
Service cost					0		0
Interest cost on benefit obligation					1		1
Expected return on plan assets					0		0
Amortization of prior service cost (credit)					(1)		(1)
Other					0		0
Net periodic costs					0	[7]	0	[7]
Regulatory asset amortization					1		1
Other Post-Retirement Benefit plans [Member] | Duke Energy Indiana [Member]
Service cost	0		0		0		0
Interest cost on benefit obligation	2		2		4		4
Expected return on plan assets	(1)		(1)		(1)		(1)
Amortization of prior service cost (credit)	1		0		1		0
Amortization of loss (gain)	(1)		1		(1)		1
Other	0		0		0		0
Net periodic costs	$ 1		$ 2		$ 3		$ 4

[1] Excludes regulatory asset amortization of $4 million and $3 million for each of the three months ended June 30, 2012 and 2011, respectively, resulting from purchase accounting adjustments associated with Duke Energy’s merger with Cinergy in April 2006.

[2] Excludes regulatory asset amortization of $7 million for each of the six months ended June 30, 2012 and 2011, resulting from purchase accounting adjustments associated with Duke Energy’s merger with Cinergy in April 2006.

[3] Excludes regulatory asset amortization of $1 million for each of the three months ended June 30, 2012 and 2011, resulting from purchase accounting adjustments associated with Duke Energy’s merger with Cinergy in April 2006.

[4] Excludes regulatory asset amortization of $3 million for each of the six months ended June 30, 2012 and 2011, resulting from purchase accounting adjustments associated with Duke Energy’s merger with Cinergy in April 2006.

[5] Excludes regulatory asset amortization of $2 million for each of the three months ended June 30, 2012 and 2011, resulting from purchase accounting adjustments associated with Duke Energy’s merger with Cinergy in April 2006.

[6] Excludes regulatory asset amortization of $4 million for each of the six months ended June 30, 2012 and 2011, resulting from purchase accounting adjustments associated with Duke Energy’s merger with Cinergy in April 2006.

[7] Excludes regulatory asset amortization of $1 million for each of the six months ended June 30, 2012 and 2011, resulting from purchase accounting adjustments associated with Duke Energy’s merger with Cinergy in April 2006.

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Acquisitions and Sales of Other Assets (Tables)

6 Months Ended

Jun. 30, 2012

Megawatts per hour sold under the Interim Mitigation Agreement

Megawatts per hour	Duke Energy Carolinas	Progress Energy Carolinas	Duke Energy
Summer off-peak	300	500	800
Summer on-peak	150	325	475
Winter off-peak	225	―	225
Winter on-peak	25	―	25

Schedule of Purchase Price Calculation

(dollars in millions, except per share amounts; shares in thousands)
Progress Energy common shares outstanding at July 2, 2012		296,116
Exchange ratio		0.87083
Duke Energy common shares issued for Progress Energy common shares outstanding		257,867
Closing price of Duke Energy common shares on July 2, 2012	$	69.84
Purchase price for common stock	$	18,009
Fair value of outstanding earned stock compensation awards		62
Total estimated purchase price	$	18,071

Schedule of Purchase Price Allocation

(in millions)
Current assets	$	3,266
Property, plant and equipment		23,808
Goodwill		12,287
Other long-term assets, excluding goodwill		8,138
Total assets		47,499
Current liabilities, including current maturities of long-term debt		3,536
Long-term liabilities, preferred stock and noncontrolling interests		10,211
Long-term debt		15,681
Total liabilities and preferred stock		29,428
Total estimated purchase price	$	18,071

Pro Forma Information

	Three Months Ended June 30,				Six Months Ended June 30,
(in millions, except per share amounts)	2012		2011		2012		2011
Revenues	$	5,843	$	5,789	$	11,557	$	11,613
Net Income Attributable to Duke Energy Corporation		527		621		984		1,338
Basic and Diluted Earnings Per Share	$	0.75	$	0.89	$	1.40	$	1.91

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Acquisitions and Sales of Other Assets (Narrative) (Details) (USD $) Share data in Thousands, unless otherwise specified	0 Months Ended	3 Months Ended		6 Months Ended		8 Months Ended			6 Months Ended			0 Months Ended	6 Months Ended					6 Months Ended
	Jul. 02, 2012	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Sep. 02, 2011	Jun. 30, 2012 Sumitomo Corporation of America [Member]	Jan. 12, 2012 Wabash Valley Power Association [Member]	Jun. 30, 2012 NCUC and PSCSC [Member]	Jun. 30, 2012 Kentucky Public Service Commission [Member]	Jun. 30, 2012 Duke Energy Corp [Member] Sumitomo Corporation of America [Member]	Jan. 12, 2012 Duke Energy Ohio [Member]	Jun. 30, 2012 Duke Energy Ohio [Member]	Jun. 30, 2011 Duke Energy Ohio [Member]	Jun. 30, 2012 Duke Energy Indiana [Member]	Jun. 30, 2011 Duke Energy Indiana [Member]	Jan. 12, 2012 Duke Energy Indiana [Member]	Jun. 30, 2012 Maximum [Member]	Jun. 30, 2012 Minimum [Member]
Adjusted conversion ratio, after reverse stock split adjustment	0.87083
Number of shares to be issued by Duke to acquire Progress, after reverse stock split adjustment	257,867
Goodwill	$ 12,287,000,000
Debt assumed by Duke as a result of the merger	15,681,000,000
Settlement agreement, customer guaranteed savings						650,000,000
Interim FERC Mitigation Rate Reduction				65,000,000
Transaction costs		7,000,000	5,000,000	15,000,000	16,000,000
Accruals for commitments from merger																		550,000,000	450,000,000
Estimated upgrade costs				110,000,000
Impairment of other long-lived assets				408,000,000	9,000,000								0	9,000,000	400,000,000	0
Transfer of Other Real Estate													(28,000,000)		26,000,000	0
Proceeds from Divestiture of Interest in Joint Venture												82,000,000
Sale of Ownership Interest in Vermillion Generating Station												75.00%
Equity Method Investment, Ownership Percentage							50.00%
Ownership Interest in Vermillion Generation Station								37.50%									62.50%
Community support and charitable contributions									100,000,000	165,000
Construction and 12-year amortizing Term Loan Facility											330,000,000
Proceeds from Issuance of Other Long-term Debt											319,000,000
After Tax Transaction costs		$ 12,000,000	$ 4,000,000	$ 18,000,000	$ 20,000,000

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Fair Value Of Financial Assets And Liabilities

6 Months Ended

Jun. 30, 2012

Fair Value Of Financial Assets And Liabilities

9. Fair Value of Financial Assets and Liabilities

Under existing accounting guidance, 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 focuses on an exit price, which is the price that would be received 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.

The Duke Energy Registrants classify recurring and non-recurring fair value measurements based on the following fair value hierarchy, as prescribed by the accounting guidance for fair value, which prioritizes the inputs to valuation techniques used to measure fair value into three levels:

Level 1—unadjusted 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 for any blockage factor.

Level 2—a fair value measurement utilizing inputs other than a quoted market price 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. A Level 2 measurement cannot have more than an insignificant portion of the valuation based on unobservable inputs.

Level 3—any fair value measurements which include unobservable inputs for the asset or liability for more than an insignificant portion of the valuation. A level 3 measurement may be based primarily on Level 2 inputs.

The fair value accounting guidance for financial instruments permits entities to elect to measure many financial instruments and certain other items at fair value that are not required to be accounted for at fair value under other GAAP. There are no financial assets or financial liabilities that are not required to be accounted for at fair value under GAAP for which the option to record at fair value has been elected by the Duke Energy Registrants. However, in the future, the Duke Energy Registrants may elect to measure certain financial instruments at fair value in accordance with this accounting guidance.

The Duke Energy Registrant's Policy for the recognition of transfers between levels of the fair value hierarchy is to recognize the transfer at the end of the period.

Valuation methods of the primary fair value measurements disclosed below 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 quarter. 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 for after-hours market activity. The majority of investments in equity securities are valued using Level 1 measurements.

Investments in available-for-sale auction rate securities. Duke Energy holds auction rate securities for which an active market does not currently exist. During the three and six months ended June 30, 2012, $39 million of these investments in auction rate securities were redeemed at full par value plus accrued interest. Auction rate securities held are student loan securities for which approximately 90% is ultimately backed by the U.S. government. Approximately 25% of these securities are AAA rated. As of June 30, 2012 and December 31, 2011 all of these auction rate securities are classified as long-term investments and are valued using Level 3 measurements. The methods and significant assumptions used to determine the fair values of the investment in auction rate debt securities represent estimations of fair value using internal discounted cash flow models which incorporate primarily management's own assumptions as to the term over which such investments will be recovered at par (ranging from zero to 17 years), the current level of interest rates (less than 0.5%), and the appropriate risk-adjusted discount rates (up to 5.3% reflecting a tenor of up to 17 years). In preparing the valuations, all significant value drivers were considered, including the underlying collateral (primarily evaluated on the basis of credit ratings, parity ratios and the percentage of loans backed by the U.S. government). Auction rate securities which are classified as Short-term investments are valued using Level 2 measurements, as they are valued at par based on a commitment by the issuer to redeem at par value. There were no auction rate securities classified as Short-term investments as of June 30, 2012 or December 31, 2011.

There were no other-than-temporary impairments associated with investments in auction rate debt securities during the three months ended and six months ended June 30, 2012 or 2011.

Investments in debt securities. Most debt investments (including those held in the Nuclear Decommissioning Trust Funds (NDTF)) 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 a Level 3 measurement. U.S. Treasury debt is typically a Level 1 measurement. For certain investments that are valued on a net asset value per share (or its equivalent), or the net asset value basis, when Duke Energy does not have the ability to redeem the investment in the near term at net asset value per share (or its equivalent), or the net asset value is not available as of the measurement date, the fair value measurement of the investment is categorized as Level 3.

Commodity derivatives. The pricing for commodity derivatives is primarily a calculated value which incorporates the forward price and is adjusted for liquidity (bid-ask spread), credit or non-performance risk (after reflecting credit enhancements such as collateral) and discounted to present value. The primary difference between a Level 2 and a Level 3 measurement has to do with the level of activity in forward markets for the commodity. If the market is relatively inactive, the measurement is deemed to be a Level 3 measurement. Commodity derivativeswith clearinghouses are classified as Level 1 measurements.

Duke Energy
	The following tables provide the fair value measurement amounts for assets and liabilities recorded on Duke Energy's Condensed
Consolidated Balance Sheets. Derivative amounts in the table below exclude cash collateral amounts which are disclosed in Note ##RMDIHA. See Note ##INV for additional information related to investments by major security type.
		Total Fair Value Amounts at
(in millions)		June 30, 2012		Level 1		Level 2		Level 3
Investments in available-for-sale auction rate securities(a)		$	41	$	―	$	―	$	41
Nuclear decommissioning trust fund equity securities			1,470		1,406		46		18
Nuclear decommissioning trust fund debt securities			734		78		610		46
Other long-term trading and available-for-sale equity securities(b)			74		66		8		―
Other trading and available-for-sale debt securities(c)			481		28		453		―
Derivative assets(b)			89		16		9		64
	Total Assets		2,889		1,594		1,126		169
Derivative liabilities(d)			(298)		(12)		(203)		(83)
	Net Assets	$	2,591	$	1,582	$	923	$	86

		Total Fair Value Amounts at
(in millions)		December 31, 2011		Level 1		Level 2		Level 3
Investments in available-for-sale auction rate securities(a)		$	71	$	―	$	―	$	71
Nuclear decommissioning trust fund equity securities			1,337		1,285		46		6
Nuclear decommissioning trust fund debt securities			723		109		567		47
Other long-term trading and available-for-sale equity securities(b)			68		61		7		―
Other trading and available-for-sale debt securities(c)			382		22		360		―
Derivative assets(b)			74		43		6		25
	Total Assets		2,655		1,520		986		149
Derivative liabilities(d)			(264)		(36)		(164)		(64)
	Net Assets	$	2,391	$	1,484	$	822	$	85
(a)	Included in Other within Investments and Other Assets on the Condensed Consolidated Balance Sheets.
(b)	Included in Other within Current Assets and Other within Investments and Other Assets on the Condensed Consolidated Balance Sheet.
(c)	Included in Other within Investments and Other Assets and Short-term Investments on the Condensed Consolidated Balance Sheets.
(d)	Included in Other within Current Liabilities and Other within Deferred Credits and Other Liabilities on the Condensed Consolidated Balance Sheets.

	The following tables provide a reconciliation of beginning and ending balances of assets and liabilities measured at fair value on a
recurring basis where the determination of fair value includes significant unobservable inputs (Level 3):
(in millions)			Available-for-Sale Auction Rate Securities		Available-for-Sale NDTF Investments		Derivatives (net)		Total
Three Months Ended June 30, 2012
Balance at March 31, 2012			$	72	$	56	$	(42)	$	86
	Total pre-tax realized or unrealized losses included in earnings:
		Regulated electric		―		―		17		17
		Revenue, non-regulated electric, natural gas, and other		―		―		(1)		(1)
	Total pre-tax gains included in other comprehensive income:
		Gains on available for sale securities and other		8		―		―		8
	Purchases, sales, issuances and settlements:
		Purchases		―		7		22		29
		Settlements		(39)		―		(15)		(54)
	Total gains included on the Condensed Consolidated Balance Sheet as regulatory asset or liability			―		1		―		1
Balance at June 30, 2012			$	41	$	64	$	(19)	$	86
Three Months Ended June 30, 2011
Balance at March 31, 2011			$	122	$	48	$	(24)	$	146
	Total pre-tax realized or unrealized gains (losses) included in earnings:
		Revenue, non-regulated electric, natural gas, and other		―		―		(11)		(11)
	Total pre-tax losses included in other comprehensive income:
		Losses on available for sale securities and other		(1)		―		―		(1)
	Purchases, sales, issuances and settlements:
		Purchases		―		6		―		6
		Sales		―		(1)		―		(1)
		Settlements		(22)		―		(6)		(28)
	Total gains included on the Condensed Consolidated Balance Sheet as regulatory asset or liability			―		―		19		19
	Transfers out of Level 3			(9)		―		―		(9)
Balance at June 30, 2011			$	90	$	53	$	(22)	$	121

(in millions)			Available-for-Sale Auction Rate Securities		Available-for-Sale NDTF Investments		Derivatives (net)		Total
Six Months Ended June 30, 2012
Balance at December 31, 2011			$	71	$	53	$	(39)	$	85
	Total pre-tax realized or unrealized losses included in earnings:
		Regulated electric		―		―		25		25
		Revenue, non-regulated electric, natural gas, and other		―		―		(3)		(3)
	Total pre-tax gains included in other comprehensive income:
		Gains on available for sale securities and other		9		―		―		9
	Purchases, sales, issuances and settlements:
		Purchases		―		9		22		31
		Settlements		(39)		―		(24)		(63)
	Total gains included on the Condensed Consolidated Balance Sheet as regulatory asset or liability			―		2		―		2
Balance at June 30, 2012			$	41	$	64	$	(19)	$	86
Pre-tax amounts included in the Condensed Consolidated Statements of Comprehensive Income related to Level 3 measurements outstanding at June 30, 2012
		Revenue, non-regulated electric, natural gas, and other		―		―		3		3
Total			$	―	$	―	$	3	$	3
Six Months Ended June 30, 2011
Balance at December 31, 2010			$	118	$	47	$	(19)	$	146
	Total pre-tax realized or unrealized gains (losses) included in earnings:
		Revenue, non-regulated electric, natural gas, and other		―		―		(19)		(19)
	Total pre-tax gains included in other comprehensive income:
		Gains on available for sale securities and other		5		―		―		5
	Purchases, sales, issuances and settlements:
		Purchases		―		7		―		7
		Sales		―		(3)		―		(3)
		Settlements		(24)		―		(3)		(27)
	Total gains included on the Condensed Consolidated Balance Sheet as regulatory asset or liability			―		2		19		21
	Transfers out of Level 3			(9)		―		―		(9)
Balance at June 30, 2011			$	90	$	53	$	(22)	$	121
Pre-tax amounts included in the Condensed Consolidated Statements of Comprehensive Income related to Level 3 measurements outstanding at June 30, 2012
		Revenue, non-regulated electric, natural gas, and other		―		―		(10)		(10)
Total			$	―	$	―	$	(10)	$	(10)

Duke Energy Carolinas
	The following tables provide the fair value measurement amounts for assets and liabilities recorded on Duke Energy Carolinas’
Condensed Consolidated Balance Sheets at fair value. Derivative amounts in the table below exclude cash collateral amounts which are disclosed in Note ##RMDIHA. See Note ##INV for additional information related to investments by major security type.
			Total Fair Value Amounts at
(in millions)			June 30, 2012	Level 1		Level 2		Level 3
Investments in available-for-sale auction rate securities(a)		$	6	$	―	$	―	$	6
Nuclear decommissioning trust fund equity securities			1,470		1,406		46		18
Nuclear decommissioning trust fund debt securities			734		78		610		46
Derivative assets(b)			1		―		1		―
	Total Assets	$	2,211	$	1,484	$	657	$	70

		Total Fair Value Amounts at
(in millions)		December 31, 2011		Level 1		Level 2		Level 3
Investments in available-for-sale auction rate securities(a)		$	12	$	―	$	―	$	12
Nuclear decommissioning trust fund equity securities			1,337		1,285		46		6
Nuclear decommissioning trust fund debt securities			723		109		567		47
Derivative assets(b)			1		―		1		―
	Total Assets	$	2,073	$	1,394	$	614	$	65
(a)	Included in Other within Investments and Other Assets on the Condensed Consolidated Balance Sheets.
(b)	Included in Other within Current Assets and Other within Investments and Other Assets on the Condensed Consolidated Balance Sheets.

	The following tables provide a reconciliation of beginning and ending balances of assets and liabilities measured at fair value
on a recurring basis where the determination of fair value includes significant unobservable inputs (Level 3):
(in millions)			Available-for-Sale Auction Rate Securities		Available-for-Sale NDTF Investments		Total
Three Months Ended June 30, 2012
Balance at March 31, 2012			$	12	$	56	$	68
	Total pre-tax gains included in other comprehensive income:
		Gains on available for sale securities and other		2		―		2
	Purchases, sales, issuances and settlements:
		Purchases		―		7		7
		Settlements		(8)		―		(8)
	Total gains included on the Condensed Consolidated Balance Sheet as regulatory asset or liability			―		1		1
Balance at June 30, 2012				6	$	64	$	70
Three Months Ended June 30, 2011
Balance at March 31, 2011			$	12	$	48	$	60
	Purchases, sales, issuances and settlements:
		Purchases		―		6		6
		Sales		―		(1)		(1)
Balance at June 30, 2011			$	12	$	53	$	65

			Available-for-Sale Auction Rate Securities		Available-for-Sale NDTF Investments		Total
Six Months Ended June 30, 2012
Balance at December 31, 2011			$	12	$	53	$	65
	Total pre-tax gains included in other comprehensive income:
		Gains on available for sale securities and other		2		―		2
	Purchases, sales, issuances and settlements:
		Purchases		―		9		9
		Settlements		(8)		―		(8)
	Total gains included on the Condensed Consolidated Balance Sheet as regulatory asset or liability			―		2		2
Balance at June 30, 2012			$	6	$	64	$	70
Six Months Ended June 30, 2011
Balance at December 31, 2010			$	12	$	47	$	59
	Purchases, sales, issuances and settlements:
		Purchases		―		7		7
		Sales		―		(3)		(3)
	Total gains included on the Condensed Consolidated Balance Sheet as regulatory asset or liability			―		2		2
Balance at June 30, 2011			$	12	$	53	$	65

Duke Energy Ohio
	The following tables provide the fair value measurement amounts for assets and liabilities recorded on Duke Energy Ohio’s
Condensed Consolidated Balance Sheets. Derivative amounts in the table below exclude cash collateral amounts which are disclosed in Note ##RMDIHA.
		Total Fair Value Amounts at
(in millions)		June 30, 2012		Level 1		Level 2		Level 3
Derivative assets(a)		$	74	$	62	$	4	$	8
Derivative liabilities(b)			(30)		(11)		(9)		(10)
	Net Assets (Liabilities)	$	44	$	51	$	(5)	$	(2)

		Total Fair Value Amounts at
(in millions)		December 31, 2011		Level 1		Level 2		Level 3
Derivative assets(a)		$	56	$	42	$	5	$	9
Derivative liabilities(b)			(30)		(10)		(8)		(12)
	Net Assets (Liabilities)	$	26	$	32	$	(3)	$	(3)
(a)	Included in Other within Current Assets and Other within Investments and Other Assets on the Condensed Consolidated Balance Sheets.
(b)	Included in Other within Current Liabilities and Other within Deferred Credits and Other Liabilities on the Condensed Consolidated Balance Sheets.

	The following tables provide a reconciliation of beginning and ending balances of assets and liabilities measured at fair value on a
recurring basis where the determination of fair value includes significant unobservable inputs (Level 3):
(in millions)			Derivatives (net)
Three Months Ended June 30, 2012
Balance at March 31, 2012			$	(4)
	Total pre-tax realized or unrealized gains (losses) included in earnings:
		Revenue, non-regulated electric, natural gas, and other		1
	Purchases, sales, issuances and settlements:
		Settlements		2
	Total gains included on the Condensed Consolidated Balance Sheet as regulatory asset or liability			(1)
Balance at June 30, 2012			$	(2)
Three Months Ended June 30, 2011
Balance at March 31, 2011			$	17
	Total pre-tax realized or unrealized gains (losses) included in earnings:
		Revenue, non-regulated electric, natural gas, and other		(10)
Balance at June 30, 2011			$	7

(in millions)			Derivatives (net)
Six Months Ended June 30, 2012
Balance at December 31, 2011			$	(3)
	Total pre-tax realized or unrealized gains (losses) included in earnings:
		Revenue, non-regulated electric, natural gas, and other		1
	Purchases, sales, issuances and settlements:
		Settlements		2
	Total gains included on the Condensed Consolidated Balance Sheet as regulatory asset or liability			(2)
Balance at June 30, 2012			$	(2)
Pre-tax amounts included in the Condensed Consolidated Statements of Comprehensive Income related to Level 3 measurements outstanding at June 30, 2012:
		Revenue, non-regulated electric and other	$	1
Total			$	1
Six Months Ended June 30, 2011
Balance at December 31, 2010			$	13
	Total pre-tax realized or unrealized gains (losses) included in earnings:
		Revenue, non-regulated electric, natural gas, and other		(6)
	Purchases, sales, issuances and settlements:
		Settlements		(1)
	Total gains included on the Condensed Consolidated Balance Sheet as regulatory asset or liability			1
Balance at June 30, 2011			$	7
Pre-tax amounts included in the Condensed Consolidated Statements of Comprehensive Income related to Level 3 measurements outstanding at June 30, 2011:
		Revenue, non-regulated electric and other	$	1
Total			$	1

Duke Energy Indiana
The following tables provide the fair value measurement amounts for assets and liabilities recorded on Duke Energy Indiana’s
Condensed Consolidated Balance Sheets. Derivative amounts in the table below exclude cash collateral amounts which are disclosed in Note ##RMDIHA. See Note ##INV for additional information related to investments by major security type.
		Total Fair Value Amounts at
(in millions)		June 30, 2012		Level 1		Level 2		Level 3
Available-for-sale equity securities(a)		$	46	$	46	$	―	$	―
Available-for-sale debt securities(a)			29		―		29		―
Derivative assets(b)			23		1		―		22
	Total Assets		98		47		29	$	22
Derivative liabilities(c)			(76)		―		(76)		―
	Net Assets (Liabilities)	$	22	$	47	$	(47)	$	22

		Total Fair Value Amounts at
(in millions)		December 31, 2011		Level 1		Level 2		Level 3
Available-for-sale equity securities(a)		$	46	$	46	$	―	$	―
Available-for-sale debt securities(a)			28		―		28		―
Derivative assets(b)			4		―		―		4
	Total Assets		78		46		28	$	4
Derivative liabilities(c)			(69)		(1)		(68)		―
	Net Assets (Liabilities)	$	9	$	45	$	(40)	$	4
(a)	Included in Other within Investments and Other Assets on the Condensed Consolidated Balance Sheets.
(b)	Included in Other within Current Assets on the Condensed Consolidated Balance Sheets.
(c)	Included in Other within Current Liabilities and Other within Deferred Credits and Other Liabilities on the Condensed Consolidated Balance Sheets.

	The following tables provide a reconciliation of beginning and ending balances of assets and liabilities measured at fair value
on a recurring basis where the determination of fair value includes significant unobservable inputs (Level 3):
			Derivatives
(in millions)			(net)
Three Months Ended June 30, 2012
Balance at March 31, 2012			$	3
	Total pre-tax realized or unrealized gains (losses) included in earnings:
		Regulated electric		16
	Purchases, sales, issuances and settlements:
		Sales		22
		Settlements		(19)
Balance at June 30, 2012			$	22
Three Months Ended June 30, 2011
Balance at March 31, 2011			$	1
	Purchases, sales, issuances and settlements:
		Settlements		(10)
	Total gains included on the Condensed Consolidated Balance Sheet as regulatory asset or liability			19
Balance at June 30, 2011			$	10

			Derivatives
(in millions)			(net)
Six Months Ended June 30, 2012
Balance at December 31, 2011			$	4
	Total pre-tax realized or unrealized gains (losses) included in earnings:
		Regulated electric		24
	Purchases, sales, issuances and settlements:
		Sales		22
		Settlements		(29)
	Total gains included on the Condensed Consolidated Balance Sheet as regulatory asset or liability			1
Balance at June 30, 2012			$	22
Six Months Ended June 30, 2011
Balance at December 31, 2010			$	4
	Purchases, sales, issuances and settlements:
		Settlements		(12)
	Total gains included on the Condensed Consolidated Balance Sheet as regulatory asset or liability			18
Balance at June 30, 2011			$	10

Additional Fair Value Disclosures—Long-term debt, including current maturities:
The fair value of long-term debt is summarized in the following table. Judgment is required in interpreting market data to develop the estimates of fair value. Accordingly, the estimates determined are not necessarily indicative of the amounts the Duke Energy Registrants could have settled in current markets. The fair value of the long-term debt is determined using Level 2 measurements.
		As of June 30, 2012				As of December 31, 2011
(in millions)		Book Value		Fair Value		Book Value		Fair Value
Duke Energy (a)		$	20,324	$	23,028	$	20,573	$	23,053
Duke Energy Carolinas(b)		$	8,522	$	9,996	$	9,274	$	10,629
Duke Energy Ohio		$	2,551	$	2,684	$	2,555	$	2,688
Duke Energy Indiana		$	3,707	$	4,346	$	3,459	$	4,048
(a)	Includes book value of Non-recourse long-term debt of variable interest entities of $915 million and $949 million June 30, 2012 and December 31, 2011, respectively.
(b)	Includes book value of Non-recourse long-term debt of variable interest entities of $300 million at both June 30, 2012 and December 31, 2011, respectively.

At both June 30, 2012 and December 31, 2011, the fair value of cash and cash equivalents, accounts and notes receivable, accounts payable, notes payable and commercial paper and non-recourse notes payable of variable interest entities are not materially different from their carrying amounts because of the short-term nature of these instruments and/or because the stated rates approximate market rates.

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Employee Benefit Obligations

6 Months Ended

Jun. 30, 2012

Employee Benefit Obligations

14. Employee Benefit Obligations

Net periodic benefit costs disclosed in the tables below for the qualifiedpension, non-qualified pension and other post-retirement benefit plans represent the cost of the respective benefit plan to the Duke Energy Registrants 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.

Each of the Subsidiary Registrants participate in qualified pension plans, non-qualified pension plans and other post-retirement benefit plans sponsored by Duke Energy. The net periodic benefit costs shown in the tables below represent the allocated cost of the respective benefit plan for the periods presented. Additionally, the Subsidiary Registrants are allocated their proportionate share of pension and other post-retirement benefit cost for employees of Duke Energy's shared services affiliate that provide support to the respective Subsidiary Registrant. These allocated amounts are included in the governance and shared services costs for each Subsidiary Registrant discussed in Note 17.

Duke Energy

The following table shows the components of the net periodic benefit costs for the Duke Energy U.S. qualified pension, non-qualified pension and other post-retirement benefit plans.

		Three Months Ended						Three Months Ended
		June 30, 2012						June 30, 2011
(in millions)		Qualified Pension Plans(a)		Non-Qualified Pension Plans		Other Post-Retirement Benefit Plans(b)		Qualified Pension Plans(a)		Non-Qualified Pension Plans		Other Post-Retirement Benefit Plans(b)
Service cost		$	22	$	―	$	1	$	24	$	1	$	3
Interest cost on projected benefit obligation			59		1		9		58		2		9
Expected return on plan assets			(94)		―		(4)		(96)		―		(4)
Amortization of prior service cost (credit)			2		1		(2)		1		―		(2)
Amortization of net transition liability			―		―		2		―		―		2
Amortization of loss (gain)			25		1		(1)		19		―		(1)
Other			1		―		―		5		―		―
Net periodic costs		$	15	$	3	$	5	$	11	$	3	$	7
(a)	Excludes regulatory asset amortization of $4 million and $3 million for each of the three months ended June 30, 2012 and 2011, respectively, resulting from purchase accounting adjustments associated with Duke Energy’s merger with Cinergy in April 2006.
(b)	Excludes regulatory asset amortization of $2 million for each of the three months ended June 30, 2012 and 2011, resulting from purchase accounting adjustments associated with Duke Energy’s merger with Cinergy in April 2006.

		Six Months Ended						Six Months Ended
		June 30, 2012						June 30, 2011
(in millions)		Qualified Pension Plans(a)		Non-Qualified Pension Plans		Other Post-Retirements Benefit Plans(b)		Qualified Pension Plans(a)		Non-Qualified Pension Plans		Other Post-Retirements Benefit Plans(b)
Service cost		$	45	$	1	$	3	$	48	$	1	$	4
Interest cost on projected benefit obligation			120		3		17		116		4		18
Expected return on plan assets			(188)		―		(8)		(192)		―		(8)
Amortization of prior service cost (credit)			3		1		(4)		3		1		(4)
Amortization of net transition liability			―		―		4		―		―		5
Amortization of loss (gain)			49		1		(3)		38		―		(2)
Other			2		―		―		9		―		―
Net periodic costs		$	31	$	6	$	9	$	22	$	6	$	13
(a)	Excludes regulatory asset amortization of $7 million for each of the six months ended June 30, 2012 and 2011, resulting from purchase accounting adjustments associated with Duke Energy’s merger with Cinergy in April 2006.
(b)	Excludes regulatory asset amortization of $4 million for each of the six months ended June 30, 2012 and 2011, resulting from purchase accounting adjustments associated with Duke Energy’s merger with Cinergy in April 2006.

Duke Energy Carolinas
	Three Months Ended						Three Months Ended
	June 30, 2012						June 30, 2011
(in millions)		Qualified Pension Plans		Non-Qualified Pension Plans		Other Post-Retirement Benefit Plans		Qualified Pension Plans		Non-Qualified Pension Plans		Other Post-Retirement Benefit Plans
Service cost	$	8	$	―	$	―	$	10	$	―	$	1
Interest cost on projected benefit obligation		22		1		4		22		1		4
Expected return on plan assets		(37)		―		(2)		(38)		―		(3)
Amortization of prior service cost (credit)		1		―		(1)		―		―		(2)
Amortization of net transition liability		―		―		2		―		―		3
Amortization of loss		12		―		―		9		―		―
Other		1		―		―		2		―		―
Net periodic costs	$	7	$	1	$	3	$	5	$	1	$	3

	Six Months Ended						Six Months Ended
	June 30, 2012						June 30, 2011
(in millions)		Qualified Pension Plans		Non-Qualified Pension Plans		Other Post-Retirement Benefit Plans		Qualified Pension Plans		Non-Qualified Pension Plans		Other Post-Retirement Benefit Plans
Service cost	$	17	$	―	$	1	$	19	$	―	$	1
Interest cost on projected benefit obligation		45		1		8		43		1		8
Expected return on plan assets		(73)		―		(5)		(75)		―		(5)
Amortization of prior service cost (credit)		1		―		(2)		―		―		(3)
Amortization of net transition liability		―		―		3		―		―		5
Amortization of loss		23		―		1		18		―		1
Other		1		―		―		4		―		―
Net periodic costs	$	14	$	1	$	6	$	9	$	1	$	7

Duke Energy Ohio
		Three Months Ended				Three Months Ended
		June 30, 2012				June 30, 2011
(in millions)			Qualified Pension Plans(a)		Qualified Pension Plans(a)
Service cost		$	1	$	1
Interest cost on projected benefit obligation			8		8
Expected return on plan assets			(11)		(11)
Amortization of loss			3		2
Other			―		1
Net periodic costs(b)		$	1	$	1
(a)	Excludes regulatory asset amortization of $1 million for each of the three months ended June 30, 2012 and 2011, resulting from purchase accounting adjustments associated with Duke Energy’s merger with Cinergy in April 2006.
(b)	Components of net periodic costs for Duke Energy Ohio's other post-retirement benefit plans and non-qualified pension plans were an insignificant amount for each of the three months ended June 30, 2012 and 2011.

		Six Months Ended				Six Months Ended
		June 30, 2012				June 30, 2011
(in millions)			Qualified Pension Plans(a)		Other Post-Retirement Benefit Plans(b)		Qualified Pension Plans(a)		Other Post-Retirement Benefit Plans(b)
Service cost		$	3	$	―	$	3	$	―
Interest cost on projected benefit obligation			16		1		16		1
Expected return on plan assets			(22)		―		(22)		―
Amortization of loss (gain)			5		(1)		4		(1)
Other			―		―		1		―
Net periodic costs(c)		$	2	$	―	$	2	$	―
(a)	Excludes regulatory asset amortization of $3 million for each of the six months ended June 30, 2012 and 2011, resulting from purchase accounting adjustments associated with Duke Energy’s merger with Cinergy in April 2006.
(b)	Excludes regulatory asset amortization of $1 million for each of the six months ended June 30, 2012 and 2011, resulting from purchase accounting adjustments associated with Duke Energy’s merger with Cinergy in April 2006.
(c)	Components of net periodic costs for Duke Energy Ohio's non-qualified pension plans were an insignificant amount for each of the six months ended June 30, 2012 and 2011.

Duke Energy Indiana
		Three Months Ended				Three Months Ended
		June 30, 2012				June 30, 2011
(in millions)			Qualified Pension Plans		Other Post-Retirement Benefit Plans		Qualified Pension Plans		Other Post-Retirement Benefit Plans
Service cost		$	3	$	―	$	2	$	―
Interest cost on projected benefit obligation			7		2		8		2
Expected return on plan assets			(11)		(1)		(11)		(1)
Amortization of prior service cost			―		1		1		―
Amortization of loss (gain)			4		(1)		3		1
Other			―		―		1		―
Net periodic costs(a)		$	3	$	1	$	4	$	2
(a)	Components of net periodic costs for Duke Energy Indiana's non-qualified pension plans were an insignificant amount for each of the three months ended June 30, 2012 and 2011.

		Six Months Ended				Six Months Ended
		June 30, 2012				June 30, 2011
(in millions)			Qualified Pension Plans		Other Post-Retirement Benefit Plans		Qualified Pension Plans		Other Post-Retirement Benefit Plans
Service cost		$	5	$	―	$	5	$	―
Interest cost on projected benefit obligation			15		4		15		4
Expected return on plan assets			(23)		(1)		(22)		(1)
Amortization of prior service cost			1		1		1		―
Amortization of loss (gain)			7		(1)		7		1
Other			―		―		1		―
Net periodic costs(a)		$	5	$	3	$	7	$	4
(a)	Components of net periodic costs for Duke Energy Indiana's non-qualified pension plans were an insignificant amount for each of the six months ended June 30, 2012 and 2011.

Employee Savings Plan

Duke Energy sponsors employee savings plans that cover substantially all U.S. employees. Duke Energy made pre-tax employer contributions of $19million for each ofthe three months ended June 30, 2012 and 2011, respectively. Duke Energy made pre-tax employer contributions of $47million and $50 million for the six months ended June 30, 2012 and 2011, respectively.

The Subsidiary Registrants participate in Duke Energy sponsored employee savings plans. The following table shows the respective Subsidiary Registrants' expense related to its proportionate share of pre-tax employer contributions.

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in millions)		2012		2011		2012		2011
Duke Energy Carolinas	$	9	$	8	$	20	$	20
Duke Energy Ohio		1		1		2		2
Duke Energy Indiana		1		2		3		5

XML

Severance VOP Deferral (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Voluntary opportunity cost deferral	$ (101)	$ 0
Duke Energy Carolinas [Member]
Voluntary opportunity cost deferral	$ (101)	$ 0

XML

Related Party Transactions (Tables)

6 Months Ended

Jun. 30, 2012

Duke Energy Carolinas [Member]

Related Party Transactions, Assets and Liabilities

Duke Energy Carolinas
	Balances due to and due from related parties included on the Condensed Consolidated Balance Sheets, which exclude
assets or liabilities associated with accrued pension and other post-retirement benefits and money pool arrangements, are
presented in the following table:
(in millions)		June 30, 2012		December 31, 2011
Current assets
	Receivables	$	―	$	2
	Other	$	95	$	95
Non-current assets
	Other	$	111	$	111
Current liabilities
	Accounts payable	$	(97)	$	(157)
	Taxes Accrued	$	(10)	$	(14)
Non-current liabilities
	Deferred income taxes	$	(4,891)	$	(4,555)
	Other	$	(64)	$	(64)

Related Party Transactions, Pension

	As discussed further in Note ##EBO, Duke Energy Carolinas participates in Duke Energy's qualified pension, non-qualified pension
and other post-retirement benefit plans and is allocated its proportionate share of expenses associated with these plans. Additionally, Duke Energy Carolinas has been allocated accrued pension and other post-retirement benefit obligations as shown in the following table:
(in millions)		June 30, 2012		December 31, 2011
Other current liabilities		$	8	$	8
Accrued pension and other post-retirement benefit obligations			232		248
Total allocated accrued pension and other post-retirement benefit obligations		$	240	$	256

Related Party Transactions, Other Revenue and Expense

	Amounts related to transactions with related parties included in the Condensed Consolidated Statements of Operations
and Comprehensive Income are presented in the following table:
		Three Months Ended				Six Months Ended
(in millions)		June 30, 2012		June 30, 2011		June 30, 2012		June 30, 2011
Corporate governance and shared service expenses(a)		$	254	$	251	$	489	$	504
Indemnification coverages(b)		$	6	$	5	$	11	$	10
Rental income and other charged expenses, net(c)		$	(5)	$	(2)	$	(7)	$	(4)
Interest expense on money pool(d)		$	1	$	―	$	1	$	―
(a)	Duke Energy Carolinas is charged its proportionate share of corporate governance and other costs by an unconsolidated affiliate that is a consolidated affiliate of Duke Energy. Corporate governance and other shared services costs are primarily related to human resources, employee benefits, legal and accounting fees, as well as other third party costs. These amounts are recorded in Operation, Maintenance and Other within Operating Expenses on the Condensed Consolidated Statements of Operations and Comprehensive Income.
(b)	Duke Energy Carolinas incurs expenses related to certain indemnification coverages through Bison, Duke Energy’s wholly owned captive insurance subsidiary. These expenses are recorded in Operation, Maintenance and Other within Operating Expenses on the Condensed Consolidated Statements of Operations and Comprehensive Income.
(c)	Duke Energy Carolinas records income associated with the rental of office space to a consolidated affiliate of Duke Energy, as well as its proportionate share of certain charged expenses from affiliates of Duke Energy.
(d)	Recorded in Interest Expense on the Condensed Consolidated Statements of Operations and Comprehensive Income. See Note ##DCF for additional information related to money pool.

Duke Energy Ohio [Member]

Related Party Transactions, Assets and Liabilities

Duke Energy Ohio
	Balances due to and due from related parties included in the Condensed Consolidated Balance Sheets, which exclude
assets or liabilities associated with accrued pension and other post-retirement benefits, CRC and money pool arrangements, are presented in the following table:
(in millions)		June 30, 2012		December 31, 2011
Current assets
	Receivables	$	7	$	15
	Other	$	98	$	76
Non-current assets
	Other	$	28	$	22
Current liabilities
	Accounts payable	$	(73)	$	(84)
	Taxes Accrued	$	(4)	$	―
Non-current liabilities
	Deferred income taxes	$	(1,882)	$	(1,798)
	Other	$	(34)	$	―

Related Party Transactions, Pension

	As discussed further in Note ##EBO, Duke Energy Ohio participates in Duke Energy’s qualified pension, non-qualified
pension and other post-retirement benefit plans and is allocated its proportionate share of expenses associated with these plans. Additionally, Duke Energy Ohio has been allocated accrued pension and other post-retirement benefit obligations as shown in the following table:
(in millions)		June 30, 2012		December 31, 2011
Other current liabilities		$	4	$	4
Accrued pension and other post-retirement benefit obligations			160		166
Total allocated accrued pension and other post-retirement benefit obligations		$	164	$	170

Related Party Transactions, Other Revenue and Expense

	Amounts related to transactions with related parties included in the Condensed Consolidated Statements of Operations and
Comprehensive Income are presented in the following table:
		Three Months Ended
(in millions)		June 30, 2012		June 30, 2011
Corporate governance and shared service expenses(a)		$	90	$	95
Indemnification coverages(b)		$	4	$	4
Rental income and other charged expenses, net(c)		$	(1)	$	―
Interest expense on money pool(d)		$	―	$	―
Interest income on money pool(e)		$	―	$	―
CRC interest income(f)		$	2	$	4
(a)	Duke Energy Ohio is charged its proportionate share of corporate governance and other costs by an unconsolidated affiliate that is a consolidated affiliate of Duke Energy. Corporate governance and other shared services costs are primarily related to human resources, employee benefits, legal and accounting fees, as well as other third party costs. These amounts are recorded in Operation, Maintenance and Other within Operating Expenses on the Condensed Consolidated Statements of Operations and Comprehensive Income.
(b)	Duke Energy Ohio incurs expenses related to certain indemnification coverages through Bison, Duke Energy’s wholly-owned captive insurance subsidiary. These expenses are recorded in Operation, Maintenance and Other within Operating Expenses on the Condensed Consolidated Statements of Operations and Comprehensive Income.
(c)	Duke Energy Ohio records income associated with the rental of office space to a consolidated affiliate of Duke Energy, as well as its proportionate share of certain charged expenses from affiliates of Duke Energy.
(d)	Recorded in Interest Expense on the Condensed Consolidated Statements of Operations and Comprehensive Income. See Note ##DCF for additional information related to money pool.
(e)	Recorded in Other Income and Expenses, net on the Condensed Consolidated Statements of Operations and Comprehensive Income. See Note ##DCF for additional information related to money pool.
(f)	As discussed in Note ##VIE, certain trade receivables have been sold by Duke Energy Ohio to CRC, an unconsolidated entity formed by a subsidiary of Duke Energy. The proceeds obtained from the sales of receivables are largely cash but do include a subordinated note from CRC for a portion of the purchase price. The interest income associated with the subordinated note is recorded in Other Income and Expenses, net on the Condensed Consolidated Statements of Operations and Comprehensive Income.

	Amounts related to transactions with related parties included in the Condensed Consolidated Statements of Operations and
Comprehensive Income are presented in the following table:
		Three Months Ended				Six Months Ended
(in millions)		June 30, 2012		June 30, 2011		June 30, 2012		June 30, 2011
Corporate governance and shared service expenses(a)		$	86	$	91	$	176	$	186
Indemnification coverages(b)		$	3	$	4	$	7	$	8
Rental income and other charged expenses, net(c)		$	―	$	―	$	(1)	$	―
CRC interest income(d)		$	1	$	3	$	3	$	7
(a)	Duke Energy Ohio is charged its proportionate share of corporate governance and other costs by an unconsolidated affiliate that is a consolidated affiliate of Duke Energy. Corporate governance and other shared services costs are primarily related to human resources, employee benefits, legal and accounting fees, as well as other third party costs. These amounts are recorded in Operation, Maintenance and Other within Operating Expenses on the Condensed Consolidated Statements of Operations and Comprehensive Income.
(b)	Duke Energy Ohio incurs expenses related to certain indemnification coverages through Bison, Duke Energy’s wholly owned captive insurance subsidiary. These expenses are recorded in Operation, Maintenance and Other within Operating Expenses on the Condensed Consolidated Statements of Operations and Comprehensive Income.
(c)	Duke Energy Ohio records income associated with the rental of office space to a consolidated affiliate of Duke Energy, as well as its proportionate share of certain charged expenses from affiliates of Duke Energy.
(d)	As discussed in Note ##VIE, certain trade receivables have been sold by Duke Energy Ohio to CRC, an unconsolidated entity formed by a subsidiary of Duke Energy. The proceeds obtained from the sales of receivables are largely cash but do include a subordinated note from CRC for a portion of the purchase price. The interest income associated with the subordinated note is recorded in Other Income and Expenses, net on the Condensed Consolidated Statements of Operations and Comprehensive Income.

Duke Energy Indiana [Member]

Related Party Transactions, Assets and Liabilities

Duke Energy Indiana
	Balances due to and due from related parties included in the Condensed Consolidated Balance Sheets, which exclude assets or
liabilities associated with accrued pension and other post-retirement benefits, CRC and money pool arrangements, are presented in the following table.
(in millions)		June 30, 2012		December 31, 2011
Current assets
	Receivables	$	16	$	18
	Other	$	7	$	13
Non-current assets
	Other	$	2	$	2
Current liabilities
	Accounts payable	$	(38)	$	(72)
	Taxes accrued	$	―	$	(25)
	Other	$	(8)	$	―
Non-current liabilities
	Deferred income taxes	$	(835)	$	(927)
	Other	$	(22)	$	(22)

Related Party Transactions, Pension

	As discussed further in Note ##EBO, Duke Energy Indiana participates in Duke Energy’s qualified pension, non-qualified pension
and other post-retirement benefit plans and is allocated its proportionate share of expenses associated with these plans. Additionally, Duke Energy Indiana has been allocated accrued pension and other post-retirement benefit obligations as shown in the following table:
(in millions)		June 30, 2012		December 31, 2011
Other current liabilities		$	2	$	2
Accrued pension and other post-retirement benefit obligations			222		231
Total allocated accrued pension and other post-retirement benefit obligations		$	224	$	233

Related Party Transactions, Other Revenue and Expense

	Amounts related to transactions with related parties included in the Condensed Consolidated Statements of Operations and
Comprehensive Income are presented in the following table:
		Three Months Ended				Six Months Ended
(in millions)		June 30, 2012		June 30, 2011		June 30, 2012		June 30, 2011
Corporate governance and shared service expenses(a)		$	98	$	99	$	199	$	206
Indemnification coverages(b)		$	2	$	2	$	4	$	4
Rental income and other charged expenses, net(c)		$	―	$	2	$	(1)	$	3
Interest expense on money pool(d)		$	1	$	―	$	1	$	―
CRC interest income(e)		$	1	$	3	$	3	$	7
(a)	Duke Energy Indiana is charged its proportionate share of corporate governance and other costs by an unconsolidated affiliate that is a consolidated affiliate of Duke Energy. Corporate governance and other shared services costs are primarily related to human resources, employee benefits, legal and accounting fees, as well as other third party costs. These amounts are recorded in Operation, Maintenance and Other within Operating Expenses on the Condensed Consolidated Statements of Operations and Comprehensive Income.
(b)	Duke Energy Indiana incurs expenses related to certain indemnification coverages through Bison, Duke Energy’s wholly-owned captive insurance subsidiary. These expenses are recorded in Operation, Maintenance and Other within Operating Expenses on the Condensed Consolidated Statements of Operations and Comprehensive Income.
(c)	Duke Energy Indiana records income associated with the rental of office space to a consolidated affiliate of Duke Energy, as well as its proportionate share of certain charged expenses from affiliates of Duke Energy.
(d)	Recorded in Interest Expense on the Condensed Consolidated Statements of Operations and Comprehensive Income. See Note ##DCF for additional information related to money pool.
(e)	As discussed in Note ##VIE, certain trade receivables have been sold by Duke Energy Indiana to CRC, an unconsolidated entity formed by a subsidiary of Duke Energy. The proceeds obtained from the sales of receivables are largely cash but do include a subordinated note from CRC for a portion of the purchase price. The interest income associated with the subordinated note is recorded in Other Income and Expenses, net on the Condensed Consolidated Statements of Operations and Comprehensive Income.

XML

Fair Value of Financial Assets and Liabilities (Tables)

6 Months Ended

Jun. 30, 2012

Fair Value Measurement Amounts For Assets And Liabilities

Duke Energy
	The following tables provide the fair value measurement amounts for assets and liabilities recorded on Duke Energy's Condensed
Consolidated Balance Sheets. Derivative amounts in the table below exclude cash collateral amounts which are disclosed in Note ##RMDIHA. See Note ##INV for additional information related to investments by major security type.
		Total Fair Value Amounts at
(in millions)		June 30, 2012		Level 1		Level 2		Level 3
Investments in available-for-sale auction rate securities(a)		$	41	$	―	$	―	$	41
Nuclear decommissioning trust fund equity securities			1,470		1,406		46		18
Nuclear decommissioning trust fund debt securities			734		78		610		46
Other long-term trading and available-for-sale equity securities(b)			74		66		8		―
Other trading and available-for-sale debt securities(c)			481		28		453		―
Derivative assets(b)			89		16		9		64
	Total Assets		2,889		1,594		1,126		169
Derivative liabilities(d)			(298)		(12)		(203)		(83)
	Net Assets	$	2,591	$	1,582	$	923	$	86

		Total Fair Value Amounts at
(in millions)		December 31, 2011		Level 1		Level 2		Level 3
Investments in available-for-sale auction rate securities(a)		$	71	$	―	$	―	$	71
Nuclear decommissioning trust fund equity securities			1,337		1,285		46		6
Nuclear decommissioning trust fund debt securities			723		109		567		47
Other long-term trading and available-for-sale equity securities(b)			68		61		7		―
Other trading and available-for-sale debt securities(c)			382		22		360		―
Derivative assets(b)			74		43		6		25
	Total Assets		2,655		1,520		986		149
Derivative liabilities(d)			(264)		(36)		(164)		(64)
	Net Assets	$	2,391	$	1,484	$	822	$	85
(a)	Included in Other within Investments and Other Assets on the Condensed Consolidated Balance Sheets.
(b)	Included in Other within Current Assets and Other within Investments and Other Assets on the Condensed Consolidated Balance Sheet.
(c)	Included in Other within Investments and Other Assets and Short-term Investments on the Condensed Consolidated Balance Sheets.
(d)	Included in Other within Current Liabilities and Other within Deferred Credits and Other Liabilities on the Condensed Consolidated Balance Sheets.

Duke Energy Carolinas
	The following tables provide the fair value measurement amounts for assets and liabilities recorded on Duke Energy Carolinas’
Condensed Consolidated Balance Sheets at fair value. Derivative amounts in the table below exclude cash collateral amounts which are disclosed in Note ##RMDIHA. See Note ##INV for additional information related to investments by major security type.
			Total Fair Value Amounts at
(in millions)			June 30, 2012	Level 1		Level 2		Level 3
Investments in available-for-sale auction rate securities(a)		$	6	$	―	$	―	$	6
Nuclear decommissioning trust fund equity securities			1,470		1,406		46		18
Nuclear decommissioning trust fund debt securities			734		78		610		46
Derivative assets(b)			1		―		1		―
	Total Assets	$	2,211	$	1,484	$	657	$	70

		Total Fair Value Amounts at
(in millions)		December 31, 2011		Level 1		Level 2		Level 3
Investments in available-for-sale auction rate securities(a)		$	12	$	―	$	―	$	12
Nuclear decommissioning trust fund equity securities			1,337		1,285		46		6
Nuclear decommissioning trust fund debt securities			723		109		567		47
Derivative assets(b)			1		―		1		―
	Total Assets	$	2,073	$	1,394	$	614	$	65
(a)	Included in Other within Investments and Other Assets on the Condensed Consolidated Balance Sheets.
(b)	Included in Other within Current Assets and Other within Investments and Other Assets on the Condensed Consolidated Balance Sheets.

Duke Energy Ohio
	The following tables provide the fair value measurement amounts for assets and liabilities recorded on Duke Energy Ohio’s
Condensed Consolidated Balance Sheets. Derivative amounts in the table below exclude cash collateral amounts which are disclosed in Note ##RMDIHA.
		Total Fair Value Amounts at
(in millions)		June 30, 2012		Level 1		Level 2		Level 3
Derivative assets(a)		$	74	$	62	$	4	$	8
Derivative liabilities(b)			(30)		(11)		(9)		(10)
	Net Assets (Liabilities)	$	44	$	51	$	(5)	$	(2)

		Total Fair Value Amounts at
(in millions)		December 31, 2011		Level 1		Level 2		Level 3
Derivative assets(a)		$	56	$	42	$	5	$	9
Derivative liabilities(b)			(30)		(10)		(8)		(12)
	Net Assets (Liabilities)	$	26	$	32	$	(3)	$	(3)
(a)	Included in Other within Current Assets and Other within Investments and Other Assets on the Condensed Consolidated Balance Sheets.
(b)	Included in Other within Current Liabilities and Other within Deferred Credits and Other Liabilities on the Condensed Consolidated Balance Sheets.

Duke Energy Indiana
The following tables provide the fair value measurement amounts for assets and liabilities recorded on Duke Energy Indiana’s
Condensed Consolidated Balance Sheets. Derivative amounts in the table below exclude cash collateral amounts which are disclosed in Note ##RMDIHA. See Note ##INV for additional information related to investments by major security type.
		Total Fair Value Amounts at
(in millions)		June 30, 2012		Level 1		Level 2		Level 3
Available-for-sale equity securities(a)		$	46	$	46	$	―	$	―
Available-for-sale debt securities(a)			29		―		29		―
Derivative assets(b)			23		1		―		22
	Total Assets		98		47		29	$	22
Derivative liabilities(c)			(76)		―		(76)		―
	Net Assets (Liabilities)	$	22	$	47	$	(47)	$	22

		Total Fair Value Amounts at
(in millions)		December 31, 2011		Level 1		Level 2		Level 3
Available-for-sale equity securities(a)		$	46	$	46	$	―	$	―
Available-for-sale debt securities(a)			28		―		28		―
Derivative assets(b)			4		―		―		4
	Total Assets		78		46		28	$	4
Derivative liabilities(c)			(69)		(1)		(68)		―
	Net Assets (Liabilities)	$	9	$	45	$	(40)	$	4
(a)	Included in Other within Investments and Other Assets on the Condensed Consolidated Balance Sheets.
(b)	Included in Other within Current Assets on the Condensed Consolidated Balance Sheets.
(c)	Included in Other within Current Liabilities and Other within Deferred Credits and Other Liabilities on the Condensed Consolidated Balance Sheets.

Reconciliation Of Assets And Liabilities Measured At Fair Value On A Recurring Basis Using Unobservable Inputs

	The following tables provide a reconciliation of beginning and ending balances of assets and liabilities measured at fair value on a
recurring basis where the determination of fair value includes significant unobservable inputs (Level 3):
(in millions)			Available-for-Sale Auction Rate Securities		Available-for-Sale NDTF Investments		Derivatives (net)		Total
Three Months Ended June 30, 2012
Balance at March 31, 2012			$	72	$	56	$	(42)	$	86
	Total pre-tax realized or unrealized losses included in earnings:
		Regulated electric		―		―		17		17
		Revenue, non-regulated electric, natural gas, and other		―		―		(1)		(1)
	Total pre-tax gains included in other comprehensive income:
		Gains on available for sale securities and other		8		―		―		8
	Purchases, sales, issuances and settlements:
		Purchases		―		7		22		29
		Settlements		(39)		―		(15)		(54)
	Total gains included on the Condensed Consolidated Balance Sheet as regulatory asset or liability			―		1		―		1
Balance at June 30, 2012			$	41	$	64	$	(19)	$	86
Three Months Ended June 30, 2011
Balance at March 31, 2011			$	122	$	48	$	(24)	$	146
	Total pre-tax realized or unrealized gains (losses) included in earnings:
		Revenue, non-regulated electric, natural gas, and other		―		―		(11)		(11)
	Total pre-tax losses included in other comprehensive income:
		Losses on available for sale securities and other		(1)		―		―		(1)
	Purchases, sales, issuances and settlements:
		Purchases		―		6		―		6
		Sales		―		(1)		―		(1)
		Settlements		(22)		―		(6)		(28)
	Total gains included on the Condensed Consolidated Balance Sheet as regulatory asset or liability			―		―		19		19
	Transfers out of Level 3			(9)		―		―		(9)
Balance at June 30, 2011			$	90	$	53	$	(22)	$	121

(in millions)			Available-for-Sale Auction Rate Securities		Available-for-Sale NDTF Investments		Derivatives (net)		Total
Six Months Ended June 30, 2012
Balance at December 31, 2011			$	71	$	53	$	(39)	$	85
	Total pre-tax realized or unrealized losses included in earnings:
		Regulated electric		―		―		25		25
		Revenue, non-regulated electric, natural gas, and other		―		―		(3)		(3)
	Total pre-tax gains included in other comprehensive income:
		Gains on available for sale securities and other		9		―		―		9
	Purchases, sales, issuances and settlements:
		Purchases		―		9		22		31
		Settlements		(39)		―		(24)		(63)
	Total gains included on the Condensed Consolidated Balance Sheet as regulatory asset or liability			―		2		―		2
Balance at June 30, 2012			$	41	$	64	$	(19)	$	86
Pre-tax amounts included in the Condensed Consolidated Statements of Comprehensive Income related to Level 3 measurements outstanding at June 30, 2012
		Revenue, non-regulated electric, natural gas, and other		―		―		3		3
Total			$	―	$	―	$	3	$	3
Six Months Ended June 30, 2011
Balance at December 31, 2010			$	118	$	47	$	(19)	$	146
	Total pre-tax realized or unrealized gains (losses) included in earnings:
		Revenue, non-regulated electric, natural gas, and other		―		―		(19)		(19)
	Total pre-tax gains included in other comprehensive income:
		Gains on available for sale securities and other		5		―		―		5
	Purchases, sales, issuances and settlements:
		Purchases		―		7		―		7
		Sales		―		(3)		―		(3)
		Settlements		(24)		―		(3)		(27)
	Total gains included on the Condensed Consolidated Balance Sheet as regulatory asset or liability			―		2		19		21
	Transfers out of Level 3			(9)		―		―		(9)
Balance at June 30, 2011			$	90	$	53	$	(22)	$	121
Pre-tax amounts included in the Condensed Consolidated Statements of Comprehensive Income related to Level 3 measurements outstanding at June 30, 2012
		Revenue, non-regulated electric, natural gas, and other		―		―		(10)		(10)
Total			$	―	$	―	$	(10)	$	(10)

	The following tables provide a reconciliation of beginning and ending balances of assets and liabilities measured at fair value
on a recurring basis where the determination of fair value includes significant unobservable inputs (Level 3):
(in millions)			Available-for-Sale Auction Rate Securities		Available-for-Sale NDTF Investments		Total
Three Months Ended June 30, 2012
Balance at March 31, 2012			$	12	$	56	$	68
	Total pre-tax gains included in other comprehensive income:
		Gains on available for sale securities and other		2		―		2
	Purchases, sales, issuances and settlements:
		Purchases		―		7		7
		Settlements		(8)		―		(8)
	Total gains included on the Condensed Consolidated Balance Sheet as regulatory asset or liability			―		1		1
Balance at June 30, 2012				6	$	64	$	70
Three Months Ended June 30, 2011
Balance at March 31, 2011			$	12	$	48	$	60
	Purchases, sales, issuances and settlements:
		Purchases		―		6		6
		Sales		―		(1)		(1)
Balance at June 30, 2011			$	12	$	53	$	65

			Available-for-Sale Auction Rate Securities		Available-for-Sale NDTF Investments		Total
Six Months Ended June 30, 2012
Balance at December 31, 2011			$	12	$	53	$	65
	Total pre-tax gains included in other comprehensive income:
		Gains on available for sale securities and other		2		―		2
	Purchases, sales, issuances and settlements:
		Purchases		―		9		9
		Settlements		(8)		―		(8)
	Total gains included on the Condensed Consolidated Balance Sheet as regulatory asset or liability			―		2		2
Balance at June 30, 2012			$	6	$	64	$	70
Six Months Ended June 30, 2011
Balance at December 31, 2010			$	12	$	47	$	59
	Purchases, sales, issuances and settlements:
		Purchases		―		7		7
		Sales		―		(3)		(3)
	Total gains included on the Condensed Consolidated Balance Sheet as regulatory asset or liability			―		2		2
Balance at June 30, 2011			$	12	$	53	$	65

	The following tables provide a reconciliation of beginning and ending balances of assets and liabilities measured at fair value on a
recurring basis where the determination of fair value includes significant unobservable inputs (Level 3):
(in millions)			Derivatives (net)
Three Months Ended June 30, 2012
Balance at March 31, 2012			$	(4)
	Total pre-tax realized or unrealized gains (losses) included in earnings:
		Revenue, non-regulated electric, natural gas, and other		1
	Purchases, sales, issuances and settlements:
		Settlements		2
	Total gains included on the Condensed Consolidated Balance Sheet as regulatory asset or liability			(1)
Balance at June 30, 2012			$	(2)
Three Months Ended June 30, 2011
Balance at March 31, 2011			$	17
	Total pre-tax realized or unrealized gains (losses) included in earnings:
		Revenue, non-regulated electric, natural gas, and other		(10)
Balance at June 30, 2011			$	7

(in millions)			Derivatives (net)
Six Months Ended June 30, 2012
Balance at December 31, 2011			$	(3)
	Total pre-tax realized or unrealized gains (losses) included in earnings:
		Revenue, non-regulated electric, natural gas, and other		1
	Purchases, sales, issuances and settlements:
		Settlements		2
	Total gains included on the Condensed Consolidated Balance Sheet as regulatory asset or liability			(2)
Balance at June 30, 2012			$	(2)
Pre-tax amounts included in the Condensed Consolidated Statements of Comprehensive Income related to Level 3 measurements outstanding at June 30, 2012:
		Revenue, non-regulated electric and other	$	1
Total			$	1
Six Months Ended June 30, 2011
Balance at December 31, 2010			$	13
	Total pre-tax realized or unrealized gains (losses) included in earnings:
		Revenue, non-regulated electric, natural gas, and other		(6)
	Purchases, sales, issuances and settlements:
		Settlements		(1)
	Total gains included on the Condensed Consolidated Balance Sheet as regulatory asset or liability			1
Balance at June 30, 2011			$	7
Pre-tax amounts included in the Condensed Consolidated Statements of Comprehensive Income related to Level 3 measurements outstanding at June 30, 2011:
		Revenue, non-regulated electric and other	$	1
Total			$	1

	The following tables provide a reconciliation of beginning and ending balances of assets and liabilities measured at fair value
on a recurring basis where the determination of fair value includes significant unobservable inputs (Level 3):
			Derivatives
(in millions)			(net)
Three Months Ended June 30, 2012
Balance at March 31, 2012			$	3
	Total pre-tax realized or unrealized gains (losses) included in earnings:
		Regulated electric		16
	Purchases, sales, issuances and settlements:
		Sales		22
		Settlements		(19)
Balance at June 30, 2012			$	22
Three Months Ended June 30, 2011
Balance at March 31, 2011			$	1
	Purchases, sales, issuances and settlements:
		Settlements		(10)
	Total gains included on the Condensed Consolidated Balance Sheet as regulatory asset or liability			19
Balance at June 30, 2011			$	10

			Derivatives
(in millions)			(net)
Six Months Ended June 30, 2012
Balance at December 31, 2011			$	4
	Total pre-tax realized or unrealized gains (losses) included in earnings:
		Regulated electric		24
	Purchases, sales, issuances and settlements:
		Sales		22
		Settlements		(29)
	Total gains included on the Condensed Consolidated Balance Sheet as regulatory asset or liability			1
Balance at June 30, 2012			$	22
Six Months Ended June 30, 2011
Balance at December 31, 2010			$	4
	Purchases, sales, issuances and settlements:
		Settlements		(12)
	Total gains included on the Condensed Consolidated Balance Sheet as regulatory asset or liability			18
Balance at June 30, 2011			$	10

Schedule of Long-term debt, including current

Additional Fair Value Disclosures—Long-term debt, including current maturities:
The fair value of long-term debt is summarized in the following table. Judgment is required in interpreting market data to develop the estimates of fair value. Accordingly, the estimates determined are not necessarily indicative of the amounts the Duke Energy Registrants could have settled in current markets. The fair value of the long-term debt is determined using Level 2 measurements.
		As of June 30, 2012				As of December 31, 2011
(in millions)		Book Value		Fair Value		Book Value		Fair Value
Duke Energy (a)		$	20,324	$	23,028	$	20,573	$	23,053
Duke Energy Carolinas(b)		$	8,522	$	9,996	$	9,274	$	10,629
Duke Energy Ohio		$	2,551	$	2,684	$	2,555	$	2,688
Duke Energy Indiana		$	3,707	$	4,346	$	3,459	$	4,048
(a)	Includes book value of Non-recourse long-term debt of variable interest entities of $915 million and $949 million June 30, 2012 and December 31, 2011, respectively.
(b)	Includes book value of Non-recourse long-term debt of variable interest entities of $300 million at both June 30, 2012 and December 31, 2011, respectively.

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Condensed Consolidated Statements Of Comprehensive Income (Parenthethical) (USD $) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Pension and OPEB related adjustments to AOCI, tax	$ 1	$ 0	$ 3	$ (3)
Net unrealized gains (losses) on cash flow hedges, tax	(14)	(3)	(9)	(2)
Reclassification into earnings from cash flow hedges, tax	(2)	1	0	1
Unrealized gain on investments in auction rate securities, tax	2	(2)	3	1
Duke Energy Carolinas [Member]
Reclassification into earnings from cash flow hedges, tax	2	2	2	2
Duke Energy Ohio [Member]
Pension and OPEB related adjustments to AOCI, tax	$ 0	$ 0	$ 0	$ 1

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Variable Interest Entities (Receivables Sold)(Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Duke Energy Ohio [Member]
CRC Gross Receivables Sold	$ 251	$ 302
CRC Retained Interests	102	129
CRC Net Receivables Sold	149	173
Duke Energy Indiana [Member]
CRC Gross Receivables Sold	307	279
CRC Retained Interests	143	139
CRC Net Receivables Sold	$ 164	$ 140

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Condensed Consolidated Statements of Equity - Carolinas (USD $) In Millions	Total	Accumulated Net Gain Loss From Designated Or Qualifying Cash Flow Hedges [Member]	Other Equity [Member]	Duke Energy Carolinas [Member]	Duke Energy Carolinas [Member] Members Equity [Member]	Duke Energy Carolinas [Member] Accumulated Net Gain Loss From Designated Or Qualifying Cash Flow Hedges [Member]	Duke Energy Carolinas [Member] Other Equity [Member]
Balance at Dec. 31, 2010				$ 8,916	$ 8,938	$ (20)	$ (2)
Net income	954			398	398
Other comprehensive income, net of tax	90	(3)	4	1		1
Balance at Jun. 30, 2011				9,315	9,336	(19)	(2)
Balance at Mar. 31, 2011
Net income	441			193
Other comprehensive income, net of tax	62
Balance at Jun. 30, 2011				9,315			(2)
Balance at Dec. 31, 2011				9,454	9,473	(17)	(2)
Net income	747			477	477
Other comprehensive income, net of tax	(90)	(15)	6	2		2
Balance at Jun. 30, 2012				9,933	9,950	(15)	(2)
Balance at Mar. 31, 2012
Net income	448			211
Other comprehensive income, net of tax	(150)
Balance at Jun. 30, 2012				$ 9,933			$ (2)

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Business Segments (Segments Assets) (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Segment Assets	$ 63,031	$ 62,526
Duke Energy Ohio [Member]
Segment Assets	10,978	10,939
U.S. Franchised Electric And Gas [Member]
Segment Assets	48,451	47,977
Commercial Power [Member]
Segment Assets	7,268	6,939
International Energy [Member]
Segment Assets	4,678	4,539
Total Reportable Segments [Member]
Segment Assets	60,397	59,455
Total Reportable Segments [Member] | Duke Energy Ohio [Member]
Segment Assets	11,301	11,033
Other [Member]
Segment Assets	2,593	2,961
Other [Member] | Duke Energy Ohio [Member]
Segment Assets	142	259
Reclassifications [Member]
Segment Assets	41	110
Reclassifications [Member] | Duke Energy Ohio [Member]
Segment Assets	(465)	(353)
DEO Commercial Power [Member] | Duke Energy Ohio [Member]
Segment Assets	4,742	4,740
Franchised Electric & Gas [Member] | Duke Energy Ohio [Member]
Segment Assets	$ 6,559	$ 6,293

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Investments In Debt And Equity Securities (Unrealized Losses Of Available-For-Sale Debt And Equity Securities In A Continuous Loss Position) (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2012		Dec. 31, 2011
Fair Value	$ 604		$ 584
Unrealized Loss Position greater than 12 months	17		25
Unrealized Loss Position less than 12 months	14		17
Other Classification [Member]
Fair Value	314		284
Unrealized Loss Position greater than 12 months	10		19
Unrealized Loss Position less than 12 months	0		0
Duke Energy Carolinas [Member] | NDTF [Member]
Fair Value	272	[1]	289	[1]
Unrealized Loss Position greater than 12 months	7	[1]	6	[1]
Unrealized Loss Position less than 12 months	13	[1]	16	[1]
Duke Energy Indiana [Member] | Grantor Trust [Member]
Fair Value	18	[1]	11	[1]
Unrealized Loss Position greater than 12 months	0	[1]	0	[1]
Unrealized Loss Position less than 12 months	1	[1]	1	[1]
Equity Securities [Member] | Other Classification [Member]
Fair Value	6		4
Unrealized Loss Position greater than 12 months	1		1
Unrealized Loss Position less than 12 months	0		0
Equity Securities [Member] | Duke Energy Carolinas [Member] | NDTF [Member]
Fair Value	117		111
Unrealized Loss Position greater than 12 months	7		4
Unrealized Loss Position less than 12 months	11		12
Equity Securities [Member] | Duke Energy Indiana [Member] | Grantor Trust [Member]
Fair Value	8		8
Unrealized Loss Position greater than 12 months	0		0
Unrealized Loss Position less than 12 months	1		1
Corporate Debt Securities [Member] | Other Classification [Member]
Fair Value	243		201
Unrealized Loss Position greater than 12 months	0		1
Unrealized Loss Position less than 12 months	0		0
Corporate Debt Securities [Member] | Duke Energy Carolinas [Member] | NDTF [Member]
Fair Value	29		57
Unrealized Loss Position greater than 12 months	0		1
Unrealized Loss Position less than 12 months	1		1
Municipal Bonds [Member] | Other Classification [Member]
Fair Value	1		0
Unrealized Loss Position greater than 12 months	0		0
Unrealized Loss Position less than 12 months	0		0
Municipal Bonds [Member] | Duke Energy Carolinas [Member] | NDTF [Member]
Fair Value	21		0
Unrealized Loss Position greater than 12 months	0		0
Unrealized Loss Position less than 12 months	0		0
Municipal Bonds [Member] | Duke Energy Indiana [Member] | Grantor Trust [Member]
Fair Value	10		3
Unrealized Loss Position greater than 12 months	0		0
Unrealized Loss Position less than 12 months	0		0
US Treasury and Government [Member] | Other Classification [Member]
Fair Value	12		0
Unrealized Loss Position greater than 12 months	0		0
Unrealized Loss Position less than 12 months	0		0
US Treasury and Government [Member] | Duke Energy Carolinas [Member] | NDTF [Member]
Fair Value	27		8
Unrealized Loss Position greater than 12 months	0		0
Unrealized Loss Position less than 12 months	0		0
Auction Rate Securities [Member] | Other Classification [Member]
Fair Value	35		59
Unrealized Loss Position greater than 12 months	8		14
Unrealized Loss Position less than 12 months	0		0
Auction Rate Securities [Member] | Duke Energy Carolinas [Member] | Other Classification [Member]
Fair Value	6	[2]	12	[2]
Unrealized Loss Position greater than 12 months	1	[2]	3	[2]
Other Debt Obligations [Member] | Other Classification [Member]
Fair Value	11		8
Unrealized Loss Position greater than 12 months	0		0
Unrealized Loss Position less than 12 months	0		0
Other Debt Obligations [Member] | Duke Energy Carolinas [Member] | NDTF [Member]
Fair Value	78		113
Unrealized Loss Position greater than 12 months	0		1
Unrealized Loss Position less than 12 months	$ 1		$ 3

[1] Unrealized losses on investments within the Duke Energy Carolinas NDTF and Duke Energy Indiana grantor trust are deferred as regulatory assets pursuant to regulatory accounting treatment.

[2] At June 30, 2012 and December 31, 2011, $6 million and $12 million of these securities, respectively, were held by Duke Energy Carolinas. The gross unrealized losses on these securities held by Duke Energy Carolinas which were in an unrealized loss position greater than 12 months were $1 million at June 30, 2012 and $3 million at December 31, 2011.

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Risk Management, Derivative Instruments And Hedging Activities (Notional Amounts Of Derivative Instruments Related To Interest Rate Risk) (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2012		Dec. 31, 2011
Cash Flow Hedges	$ 1,130	[1]	$ 841	[1]
Undesignated Contracts	243		247
Fair Value Hedges	275		275
Total Notional Amount	1,648		1,363
Non Recourse Long Term Debt Of Variable Interest Entities	915		949
Cash Flow Hedging [Member]
Non Recourse Long Term Debt Of Variable Interest Entities	755		466
Duke Energy Carolinas [Member]
Cash Flow Hedges	0		0
Undesignated Contracts	0		0
Fair Value Hedges	25		25
Total Notional Amount	25		25
Non Recourse Long Term Debt Of Variable Interest Entities	300		300
Duke Energy Ohio [Member]
Cash Flow Hedges	0		0
Undesignated Contracts	27		27
Fair Value Hedges	250		250
Total Notional Amount	277		277
Duke Energy Indiana [Member]
Cash Flow Hedges	0		0
Undesignated Contracts	200		200
Fair Value Hedges	0		0
Total Notional Amount	$ 200		$ 200

[1] Includes amounts related to non-recourse variable rate long-term debt of VIEs of $755 million at June 30, 2012 and $466 million at December 31, 2011.

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Severance

6 Months Ended

Jun. 30, 2012

Severance

15. Severance

2011 Severance Plan.In conjunction with the merger, in November 2011, Duke Energy and Progress Energy offered a voluntary severance plan to certain eligible employees. Approximately 1,100employees from Duke Energy and Progress Energy accepted the termination benefits during the voluntary window period, which closed on November 30, 2011. The estimated amount of severance payments associated with this voluntary plan and other severance benefits are expected to range from $225 million to $275 million. A significant majority of the severance benefits will be recognized as expense in the second half of 2012 and most of the costs will be charged to Duke Energy Carolinas, Progress Energy Carolinas and Progress Energy Florida.

Other Severance Plans. Amounts included in the table below represent the severance liability for Duke Energy's past and on-going severance plans.

	Balance at		Provision /		Cash		Balance at
(in millions)	December 31, 2011		Adjustments		Reductions		June 30, 2012
Duke Energy	$	32	$	(1)	$	(8)	$	23

As part of Duke Energy Carolinas' 2011 rate case, the NCUC approved the recovery of $101 million of previously recorded expenses related to a prior year Voluntary Opportunity Plan which were recorded in 2012.

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Risk Management, Derivative Instruments And Hedging Activities (Schedule Of Information Regarding Derivative Instruments That Contain Credit-Risk Related Contingent Features) (Details) (USD $) In Millions, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Aggregate Fair Value Amounts of Derivative Instruments in a Net Liability Position	$ 193	$ 96
Collateral Already Posted	67	36
Additional Cash Collateral or Letters of Credit in the Event Credit-risk-related Contingent Features were Triggered at the End of the Reporting Period	6	5
Duke Energy Ohio [Member]
Aggregate Fair Value Amounts of Derivative Instruments in a Net Liability Position	189	94
Collateral Already Posted	44	35
Additional Cash Collateral or Letters of Credit in the Event Credit-risk-related Contingent Features were Triggered at the End of the Reporting Period	$ 4	$ 5

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Debt And Credit Facilities (Tables)

6 Months Ended

Jun. 30, 2012

Schedule Of Line Of Credit Facilities

		June 30, 2012
(in millions)		Duke Energy (Parent)		Duke Energy Carolinas		Duke Energy Ohio		Duke Energy Indiana		Total Duke Energy
Facility Size		$	1,250	$	1,250	$	750	$	750	$	4,000
	Notes Payable and Commercial Paper		(518)		(300)		―		(216)		(1,034)
	Outstanding Letters of Credit		(20)		(7)		―		―		(27)
	Tax-Exempt Bonds		―		(95)		(84)		(81)		(260)
Available Capacity		$	712	$	848	$	666	$	453	$	2,679

Schedule Of Money Pool Balances

	June 30, 2012						December 31, 2011
(in millions)	Receivables		Notes Payable		Long-term Debt		Receivables		Notes Payable		Long-term Debt
Duke Energy Carolinas	$	244	$	―	$	300	$	923	$	―	$	300
Duke Energy Ohio		181		―		―		311		―		―
Duke Energy Indiana		―		113		150		―		300		150

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Risk Management, Derivative Instruments And Hedging Activities

6 Months Ended

Jun. 30, 2012

Risk Management, Derivative Instruments And Hedging Activities

8. Risk Management, Derivative Instruments and Hedging Activities

The Duke Energy Registrants utilize various derivative instruments to manage risks primarily associated with commodity prices and interest rates. The primary use of energy commodity derivatives is to hedge the generation portfolio against exposure to changes in the prices of power and fuel. Interest rate derivatives are entered into to manage interest rate risk associated with variable-rate and fixed-rate borrowings.

Certain derivative instruments qualify for hedge accounting and are designated as either cash flow hedges or fair value hedges, while others either do not qualify as accounting hedges (such as economic hedges) or have not been designated as hedges (hereinafter referred to as undesignated contracts). All derivative instruments not meeting the criteria for the NPNS exception are recognized as either assets or liabilities at fair value in the Condensed Consolidated Balance Sheets. As the regulated operations of the Duke Energy Registrants meet the criteria for regulatory accounting treatment, the majority of the derivative contracts entered into by the regulated operations are not designated as hedges since gains and losses on such contracts are deferred as regulatory liabilities and assets, respectively. Thus there is no immediate earnings impact associated with changes in fair values of such derivative contracts.

For derivative instruments that qualify and are designated 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 qualify and are designated 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. Any gains or losses on the derivative are included in the same line item as the offsetting loss or gain on the hedged item in the Condensed Consolidated Statements of Operations for Duke Energy, or in the Condensed Consolidated Statements of Comprehensive Income for Duke Energy Carolinas, Duke Energy Ohio, and Duke Energy Indiana.

Information presented in the tables below relates to Duke Energy and Duke Energy Ohio. Separate disclosure for Duke Energy Carolinas and Duke Energy Indiana are not always presented as regulatory accounting treatment is applied to substantially all of their derivative instruments.

Commodity Price Risk

The Duke Energy Registrants are exposed to the impact of market changes in the future prices of electricity (energy, capacity and financial transmission rights), coal, natural gas and emission allowances (SO2 , seasonal NOX and annual NOX) as a result of their energy operations such as electricity generation and the transportation and sale of natural gas. With respect to commodity price risks associated with electricity generation, the Duke Energy Registrants are exposed to changes including, but not limited to, the cost of the coal and natural gas used to generate electricity, the prices of electricity in wholesale markets, the cost of capacity and electricity purchased for resale in wholesale markets and the cost of emission allowances primarily at the Duke Energy Registrants' coal fired power plants. Risks associated with commodity price changes on future operations are closely monitored and, where appropriate, various commodity contracts are used to mitigate the effect of such fluctuations on operations. Exposure to commodity price risk is influenced by a number of factors, including, but not limited to, the term of the contract, the liquidity of the market and delivery location.

Commodity Fair Value Hedges.At June 30, 2012, there were no open commodity derivative instruments that were designated as fair value hedges.

Commodity Cash Flow Hedges. At June 30, 2012, there were no open commodity derivative instruments that were designated as cash flow hedges.

Undesignated Contracts. The Duke Energy Registrants use derivative contracts as economic hedges to manage the market risk exposures that arise from providing electricity generation and capacity to large energy customers, energy aggregators, retail customers and other wholesale companies. Undesignated contracts may include contracts not designated as a hedge, contracts that do not qualify for hedge accounting, derivatives that do not or no longer qualify for the NPNS scope exception, and de-designated hedge contracts. Undesignated contracts also include contracts associated with operations that Duke Energy continues to wind down or has included as discontinued operations. As these undesignated contracts expire as late as 2021, Duke Energy has entered into economic hedges that leave it minimally exposed to changes in prices over the duration of these contracts.

Duke Energy Carolinas uses derivative contracts as economic hedges to manage the market risk exposures that arise from electricity generation. As ofJune 30, 2012, Duke Energy Carolinas does not have undesignated commodity derivatives.

Duke Energy Ohio uses derivative contracts as economic hedges to manage the market risk exposures that arise from providing electricity generation and capacity to large energy customers, energy aggregators, retail customers and other wholesale companies. Undesignated contracts at June 30, 2012 are primarily associated with forward sales and purchases of power, coal and emission allowances, for the Commercial Power segment.

Duke Energy Indiana uses derivative contracts as economic hedges to manage the market risk exposures that arise from electricity generation. Undesignated contracts at June 30, 2012 are primarily associated with forward purchases and sales of power, financial transmission rights and emission allowances.

Interest Rate Risk

The Duke Energy Registrants are exposed to risk resulting from changes in interest rates as a result of their issuance or anticipated issuance of variable and fixed-rate debt and commercial paper. Interest rate exposure is managed by limiting variable-rate exposures to a percentage of total debt and by monitoring the effects of market changes in interest rates. To manage risk associated with changes in interest rates, the Duke Energy Registrants may enter into financial contracts; primarily interest rate swaps and U.S. Treasury lock agreements. Additionally, in anticipation of certain fixed-rate debt issuances, a series of forward starting interest rate swaps may be executed to lock in components of the market interest rates at the time and terminated prior to or upon the issuance of the corresponding debt. When these transactions occur within a business that meets the criteria for regulatory accounting treatment, these contracts may be treated as undesignated and any pre-tax gain or loss recognized from inception to termination of the hedges would be recorded as a regulatory liability or asset and amortized as a component of interest expense over the life of the debt. Alternatively, these derivatives may be designated as hedges whereby, any pre-tax gain or loss recognized from inception to termination of the hedges would be recorded in AOCI and amortized as a component of interest expense over the life of the debt.

The following table shows the notional amounts for derivatives related to interest rate risk:

Notional Amounts of Derivative Instruments Related to Interest Rate
		Duke Energy		Duke Energy Carolinas		Duke Energy Ohio		Duke Energy Indiana
(in millions)		June 30, 2012
Cash Flow Hedges(a)		$	1,130	$	―	$	―	$	―
Undesignated Contracts			243		―		27		200
Fair Value Hedges			275		25		250		―
	Total Notional Amount	$	1,648	$	25	$	277	$	200
(in millions)		December 31, 2011
Cash Flow Hedges(a)		$	841	$	―	$	―	$	―
Undesignated Contracts			247		―		27		200
Fair Value Hedges			275		25		250		―
	Total Notional Amount	$	1,363	$	25	$	277	$	200
(a)	Includes amounts related to non-recourse variable rate long-term debt of VIEs of $755 million at June 30, 2012 and $466 million at December 31, 2011.

Volumes

The following tables show information relating to the volume of Duke Energy and Duke Energy Ohio's outstanding commodity derivative activity. Amounts disclosed represent the notional volumes of commodities contracts accounted for at fair value. For option contracts, notional amounts include only the delta-equivalent volumes which represent the notional volumes times the probability of exercising the option based on current price volatility. Volumes associated with contracts qualifying for the NPNS exception have been excluded from the table below. Amounts disclosed represent the absolute value of notional amounts. Duke Energy and Duke Energy Ohio have netted contractual amounts where offsetting purchase and sale contracts exist with identical delivery locations and times of delivery. Where all commodity positions are perfectly offset, no quantities are shown below. For additional information on notional dollar amounts of debt subject to derivative contracts accounted for at fair value, see “Interest Rate Risk” section above.

Underlying Notional Amounts for Commodity Derivative Instruments Accounted for At Fair Value
		Duke Energy		Duke Energy Ohio
		June 30, 2012
Commodity contracts
Electricity-energy (Gigawatt-hours)(a)			10,751		6,773
Emission allowances NOX (thousands of tons)			3		3
Natural gas (millions of decatherms)			30		21
		December 31, 2011
Commodity contracts
Electricity-energy (Gigawatt-hours)(a)			14,118		14,655
Emission allowances NOX (thousands of tons)			9		9
Natural gas (millions of decatherms)			40		2
(a)	Amounts at Duke Energy Ohio include intercompany positions that are eliminated at Duke Energy.

	The following tables show fair value amounts of derivative contracts, and the line item(s) in the Condensed Consolidated Balance Sheets
in which such amounts are included. The fair values of derivative contracts are presented on a gross basis, even when the derivative instruments are subject to master netting arrangements where Duke Energy nets the fair value of derivative contracts subject to master netting arrangements with the same counterparty on the Condensed Consolidated Balance Sheets. Cash collateral payables and receivables associated with the derivative contracts have not been netted against the fair value amounts.
Location and Fair Value Amounts of Derivatives Reflected in the Condensed Consolidated Balance Sheets
		Duke Energy				Duke Energy Ohio
		June 30, 2012
(in millions)		Asset		Liability		Asset		Liability
Derivatives Designated as Hedging Instruments
Interest rate contracts
Current Assets: Other		$	4	$	―	$	4	$	―
Current Liabilities: Other			―		14		―		―
Deferred Credits and Other Liabilities: Other			―		99		―		―
Total Derivatives Designated as Hedging Instruments		$	4	$	113	$	4	$	―
Derivatives Not Designated as Hedging Instruments
Commodity contracts
Current Assets: Other(a)		$	192	$	124	$	184	$	131
Investments and Other Assets: Other			17		―		18		1
Current Liabilities: Other			4		49		3		12
Deferred Credits and Other Liabilities: Other			49		103		47		59
Interest rate contracts
Current Liabilities: Other			―		2		―		1
Deferred Credits and Other Liabilities: Other(b)			―		84		―		8
Total Derivatives Not Designated as Hedging Instruments		$	262	$	362	$	252	$	212
Total Derivatives		$	266	$	475	$	256	$	212
(a)	Amount at Duke Energy includes $23 million related to commodity contracts at Duke Energy Indiana which receive regulatory accounting treatment.
(b)	Amount at Duke Energy includes $76 million related to interest rate swaps at Duke Energy Indiana which receive regulatory accounting treatment.

		Duke Energy				Duke Energy Ohio
		December 31, 2011
(in millions)		Asset		Liability		Asset		Liability
Derivatives Designated as Hedging Instruments
Interest rate contracts
Current Assets: Other		$	4	$	―	$	3	$	―
Investments and Other Assets: Other			2		―		2		―
Current Liabilities: Other			―		11		―		―
Deferred Credits and Other Liabilities: Other			―		76		―		―
Total Derivatives Designated as Hedging Instruments		$	6	$	87	$	5	$	―
Derivatives Not Designated as Hedging Instruments
Commodity contracts
Current Assets: Other		$	81	$	31	$	79	$	39
Investments and Other Assets: Other			35		17		29		18
Current Liabilities: Other			136		168		136		146
Deferred Credits and Other Liabilities: Other			25		93		22		33
Interest rate contracts
Current Liabilities: Other			―		2		―		1
Deferred Credits and Other Liabilities: Other(a)			―		75		―		8
Total Derivatives Not Designated as Hedging Instruments		$	277	$	386	$	266	$	245
Total Derivatives		$	283	$	473	$	271	$	245
(a)	Amounts at Duke Energy include $67 million related to interest rate swaps at Duke Energy Indiana which receive regulatory accounting treatment.

	The following table shows the amount of the gains and losses recognized on derivative instruments designated and qualifying as
cash flow hedges by type of derivative contract, and the Condensed Consolidated Statements of Operations line items in which such gains and losses are included for Duke Energy.
Cash Flow Hedges—Location and Amount of Pre-Tax Gains (Losses) Recognized in Comprehensive Income
		Three Months Ended
		June 30,
(in millions)		2012		2011
Pre-tax Gains (Losses) Recorded in AOCI
Interest rate contracts		$	(44)	$	(10)
Total Pre-tax Gains (Losses) Recorded in AOCI		$	(44)	$	(10)
Location of Pre-tax Gains (Losses) Reclassified from AOCI into Earnings(a)
Interest rate contracts
Interest expense		$	(1)	$	(2)
Total Pre-tax Gains (Losses) Reclassified from AOCI into Earnings		$	(1)	$	(2)
(a)	Represents the gains and losses on cash flow hedges previously recorded in AOCI during the term of the hedging relationship and reclassified into earnings during the current period.

		Six Months Ended
		June 30,
(in millions)		2012		2011
Pre-tax Gains (Losses) Recorded in AOCI
Interest rate contracts		$	(26)	$	(7)
Total Pre-tax Gains (Losses) Recorded in AOCI		$	(26)	$	(7)
Location of Pre-tax Gains and (Losses) Reclassified from AOCI into Earnings(a)
Interest rate contracts
Interest expense		$	(2)	$	(3)
Total Pre-tax Gains (Losses) Reclassified from AOCI into Earnings		$	(2)	$	(3)
(a)	Represents the gains and losses on cash flow hedges previously recorded in AOCI during the term of the hedging relationship and reclassified into earnings during the current period.

There were no gains or losses on cash flow hedges recorded or reclassified at Duke Energy Ohio for the six months ended June 30, 2012 and 2011, respectively. There were no hedge ineffectiveness during the six months ended June 30, 2012 and 2011, and no gains or losses have been excluded from the assessment of hedge effectiveness during the same periods for all Duke Energy Registrants.

Duke Energy. At June 30, 2012, $129 million of pre-tax deferred net losses on derivative instruments related to interest rate cash flow hedges remains in AOCI and a $10 million pre-tax loss is expected to be recognized in earnings during the next 12 months as the hedged transactions occur.

Duke Energy Ohio. At June 30, 2012, there were no pre-tax deferred net gains or losses on derivative instruments related to cash flow hedges remaining in AOCI.

	The following tables show the amount of the pre-tax gains and losses recognized on undesignated contracts by type of derivative
instrument, and the line item(s) in the Condensed Consolidated Statements of Comprehensive Income in which such gains and losses are included or deferred on the Condensed Consolidated Balance Sheets as regulatory assets or liabilities.
Undesignated Contracts—Location and Amount of Pre-Tax Gains and (Losses) Recognized in Income or as Regulatory Assets
or Liabilities
		Duke Energy				Duke Energy Ohio
		Three Months Ended June 30,
(in millions)		2012		2011		2012		2011
Location of Pre-tax Gains and (Losses) Recognized in Earnings
Commodity contracts
Revenue, non-regulated electric, natural gas and other			―		(12)		4		(16)
Interest rate contracts
Interest expense			―		―		(1)		(1)
Total Pre-tax (Losses) Gains Recognized in Earnings(a)		$	―	$	(12)	$	3	$	(17)
Location of Pre-tax Gains and (Losses) Recognized as Regulatory Assets or Liabilities
Commodity contracts
Regulatory Asset		$	1	$	(1)	$	―	$	―
Regulatory Liability			17		11		―		(1)
Interest rate contracts
Regulatory Asset			(32)		(21)		(1)		―
Total Pre-tax Gains (Losses) Recognized as Regulatory Assets or Liabilities		$	(14)	$	(11)	$	(1)	$	(1)
(a)	Amounts include Duke Energy Ohio intercompany positions that are eliminated at Duke Energy.

		Duke Energy				Duke Energy Ohio
		Six Months Ended June 30,
(in millions)		2012		2011		2012		2011
Location of Pre-tax Gains and (Losses) Recognized in Earnings
Commodity contracts
Revenue, non-regulated electric, natural gas and other			36		(25)		75		(22)
Fuel used in electric generation and purchased power - non-regulated			―		(1)		―		(1)
Interest rate contracts
Interest expense			―		―		(1)		(1)
Total Pre-tax (Losses) Gains Recognized in Earnings(a)		$	36	$	(26)	$	74	$	(24)
Location of Pre-tax Gains and (Losses) Recognized as Regulatory Assets or Liabilities
Commodity contracts
Regulatory Asset		$	―	$	(1)	$	(2)	$	(1)
Regulatory Liability			22		10		1		―
Interest rate contracts
Regulatory Asset			(10)		(9)		―		―
Total Pre-tax Gains (Losses) Recognized as Regulatory Assets of Liabilities		$	12	$	―	$	(1)	$	(1)
(a)	Amounts include Duke Energy Ohio intercompany positions that are eliminated at Duke Energy.

Credit Risk

Certain of Duke Energy and Duke Energy Ohio's derivative contracts contain contingent credit features, such as material adverse change clauses or payment acceleration clauses that could result in immediate payments, the posting of letters of credit or the termination of the derivative contract before maturity if specific events occur, such as a downgrade of Duke Energy or Duke Energy Ohio's credit rating below investment grade.

The following table shows information with respect to derivative contracts that are in a net liability position and contain objective credit-risk related payment provisions. The amounts disclosed in the table below represent the aggregate fair value amounts of such derivative instruments at the end of the reporting period, the aggregate fair value of assets that are already posted as collateral under such derivative instruments at the end of the reporting period, and the aggregate fair value of additional assets that would be required to be transferred in the event that credit-risk-related contingent features were triggered.

Information Regarding Derivative Instruments that Contain Credit-risk Related Contingent Features
	Duke Energy		Duke Energy Ohio
(in millions)	June 30, 2012
Aggregate Fair Value Amounts of Derivative Instruments in a Net Liability Position	$	193	$	189
Collateral Already Posted	$	67	$	44
Additional Cash Collateral or Letters of Credit in the Event Credit-risk-related Contingent Features were Triggered at the End of the Reporting Period	$	6	$	4
(in millions)	December 31, 2011
Aggregate Fair Value Amounts of Derivative Instruments in a Net Liability Position	$	96	$	94
Collateral Already Posted	$	36	$	35
Additional Cash Collateral or Letters of Credit in the Event Credit-risk-related Contingent Features were Triggered at the End of the Reporting Period	$	5	$	5

Netting of Cash Collateral and Derivative Assets and Liabilities Under Master Netting Arrangements. In accordance with applicable accounting rules, Duke Energy and Duke Energy Ohio have elected to offset fair value amounts (or amounts that approximate fair value) recognized on their Condensed Consolidated Balance Sheets related to cash collateral amounts receivable or payable against fair value amounts recognized for derivative instruments executed with the same counterparty under the same master netting agreement. The amounts disclosed in the table below represent the receivables related to the right to reclaim cash collateral and payables related to the obligation to return cash collateral under master netting arrangements. See Note 9 for additional information on fair value disclosures related to derivatives.

Information Regarding Cash Collateral under Master Netting Arrangements
	Duke Energy				Duke Energy Ohio
	June 30, 2012
(in millions)	Receivables		Payable		Receivables		Payable
Amounts offset against net derivative positions	$	―	$	1	$	―	$	―
Amounts not offset against net derivative positions	$	73	$	―	$	49	$	―
	December 31, 2011
(in millions)	Receivables		Payable		Receivables		Payable
Amounts offset against net derivative positions	$	10	$	―	$	9	$	―
Amounts not offset against net derivative positions	$	30	$	―	$	28	$	―

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Related Party Transactions (Narrative)(Details) (USD $) In Millions, unless otherwise specified	1 Months Ended	3 Months Ended	6 Months Ended
	Jan. 31, 2012	Mar. 31, 2011	Jun. 30, 2012	Jun. 30, 2011	Dec. 31, 2011
Duke Energy Ohio [Member]
DECAM Intercompany Loan Receivable					$ 90
Dividend to parent		285	0	(285)
Transfer of Vermillion generation station	28
Duke Energy Indiana [Member]
Transfer of Vermillion generation station	$ 26