Duke Energy 2013 Annual Report Download - page 198

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PART II
DUKE ENERGY CORPORATION • DUKE ENERGY CAROLINAS, LLC • PROGRESS ENERGY, INC. •
DUKE ENERGY PROGRESS, INC. • DUKE ENERGY FLORIDA, INC. • DUKE ENERGY OHIO, INC. • DUKE ENERGY INDIANA, INC.
Combined Notes to Consolidated Financial Statements – (Continued)
21. EMPLOYEE BENEFIT PLANS
DEFINED BENEFIT RETIREMENT PLANS
Duke Energy maintains, and the Subsidiary Registrants participate in,
qualified, non-contributory defined benefit retirement plans. The plans cover
most U.S. employees using a cash balance formula. Under a cash balance
formula, a plan participant accumulates a retirement benefit consisting of pay
credits based upon a percentage of current eligible earnings based on age and/
or years of service and interest credits. Certain employees are covered under
plans that use a final average earnings formula. As of January 1, 2014, these
defined benefit plans are closed to new participants. Under these average
earnings formulas, a plan participant accumulates a retirement benefit equal
to the sum of percentages of their (i) highest three-year or four-year average
earnings, (ii) highest three-year or four-year average earnings in excess of
covered compensation per year of participation (maximum of 35 years), and/or
(iii) highest three or four-year average earnings times years of participation in
excess of 35 years. Duke Energy also maintains, and the Subsidiary Registrants
participate in, non-qualified, non-contributory defined benefit retirement plans
which cover certain executives.
Duke Energy uses a December 31 measurement date for its defined
benefit retirement plan assets and obligations.
Net periodic benefit costs disclosed in the tables below represent the cost
of the respective benefit plan for the periods presented. However, portions of the
net periodic benefit costs disclosed in the tables below have been capitalized as
a component of property, plant and equipment. Amounts presented in the tables
below for the Subsidiary Registrants represent the amounts of pension and
other post-retirement benefit cost allocated by Duke Energy for employees of
the Subsidiary Registrants. Additionally, the Subsidiary Registrants are allocated
their proportionate share of pension and post-retirement benefit cost for
employees of Duke Energy’s shared services affiliate that provide support to the
Subsidiary Registrants. These allocated amounts are included in the governance
and shared service costs discussed in Note 13.
Duke Energy’s policy is to fund amounts on an actuarial basis to provide
assets sufficient to meet benefit payments to be paid to plan participants. The
following table includes information related to the Duke Energy Registrants’
contributions to its U.S. qualified defined benefit pension plans.
(in millions)
Duke
Energy
Duke
Energy
Carolinas
Progress
Energy
Duke
Energy
Progress
Duke
Energy
Florida
Duke
Energy
Ohio
Duke
Energy
Indiana
Anticipated Contributions:
2014 $ 143 $ 42 $ 51 $ 21 $ 21 $ 4 $ 9
Contributions Made:
2013 $ 250 $ — $ 250 $ 63 $ 133 $ — $ —
2012 304 — 346 141 128 — —
2011 200 33 334 217 112 48 52
QUALIFIED PENSION PLANS
Components of Net Periodic Pension Costs
Year Ended December 31, 2013
(in millions)
Duke
Energy
Duke
Energy
Carolinas
Progress
Energy
Duke
Energy
Progress
Duke
Energy
Florida
Duke
Energy
Ohio
Duke
Energy
Indiana
Service cost $ 167 $ 49 $ 60 $ 22 $ 30 $ 6 $ 11
Interest cost on projected benefit obligation 320 80 116 50 53 21 28
Expected return on plan assets (549) (148) (199) (94) (87) (31) (46)
Amortization of actuarial loss 244 60 101 46 49 13 24
Amortization of prior service (credit) cost (11) (6) (4) (1) (2) — 1
Other 7 2 2 1 1 — 1
Net periodic pension costs(a)(b) $ 178 $ 37 $ 76 $ 24 $ 44 $ 9 $ 19