| Investments In Debt And Equity Securities |
INVESTMENTS IN DEBT AND EQUITY SECURITIES The Duke Energy Registrants classify their investments in debt and equity securities as either trading or 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. These investments were sold prior to September 30, 2015. The fair value of these investments was $7 million at December 31, 2014. AVAILABLE-FOR-SALE SECURITIES All other investments in debt and equity securities are classified as available-for-sale securities. Duke Energy’s available-for-sale securities are primarily comprised of investments held in (i) the Nuclear Decommissioning Trust Fund (NDTF) at Duke Energy Carolinas, Duke Energy Progress and Duke Energy Florida, (ii) grantor trusts at Duke Energy Progress, Duke Energy Florida and Duke Energy Indiana related to other post-retirement benefit obligations (OPEB) plans and deferred compensation plans, (iii) Duke Energy’s captive insurance investment portfolio and (iv) Duke Energy’s foreign operations investment portfolio. Duke Energy classifies all other investments in debt and equity securities as long term, unless otherwise noted. Investment Trusts The investments within the NDTF at Duke Energy Carolinas, Duke Energy Progress and Duke Energy Florida and the Duke Energy Progress, Duke Energy Florida and Duke Energy Indiana grantor trusts (Investment Trusts) are managed by independent investment managers with discretion to buy, sell and invest pursuant to the objectives set forth by the trust agreements. The Duke Energy Registrants have limited oversight of the day-to-day management of these investments. As a result, the ability to hold investments in unrealized loss positions is outside the control of the Duke Energy Registrants. Accordingly, all unrealized losses associated with debt and equity securities within the Investment Trusts are considered other-than-temporary impairments and are recognized immediately. Pursuant to regulatory accounting, substantially all realized and unrealized gains and losses associated with investments within the Investment Trusts are deferred as a regulatory asset or liability. As a result, there is no immediate impact on earnings of the Duke Energy Registrants. Other Available-for-Sale Securities Unrealized gains and losses on all other available-for-sale securities are included in other comprehensive income until realized, unless it is determined the carrying value of an investment is other-than-temporarily impaired. If an other-than-temporary impairment exists, the unrealized loss is included in earnings based on the criteria discussed below. The Duke Energy Registrants analyze 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, (i) the length of time over which the market value has been lower than the cost basis of the investment, (ii) the percentage decline compared to the cost of the investment and (iii) management’s intent and ability to retain its investment 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. If the entity does not have an intent to sell a debt security and it is not more likely than not 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 a credit loss exists. In determining whether a credit loss exists, management considers, among other things, (i) the length of time and the extent to which the fair value has been less than the amortized cost basis, (ii) 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, (iii) consideration of underlying collateral and guarantees of amounts by government entities, (iv) ability of the issuer of the security to make scheduled interest or principal payments and (v) any changes to the rating of the security by rating agencies. If a credit loss exists, the amount of impairment write-down to fair value is split between credit loss and other factors. The amount related to credit loss is recognized in earnings. The amount related to other factors is recognized in other comprehensive income. There were no credit losses as of September 30, 2015 and December 31, 2014. DUKE ENERGY The following table presents the estimated fair value of investments in available-for-sale securities. | | | | | | | | | | | | | | | | | | | | | | | | | | September 30, 2015 | | December 31, 2014 | | Gross |
| | Gross |
| | | | Gross |
| | Gross |
| | | | Unrealized |
| | Unrealized |
| | Estimated |
| | Unrealized |
| | Unrealized |
| | Estimated |
| | Holding |
| | Holding |
| | Fair |
| | Holding |
| | Holding |
| | Fair |
| (in millions) | Gains |
| | Losses(b) |
| | Value |
| | Gains |
| | Losses(b) |
| | Value |
| NDTF | | | | | | | | | | | | Cash and cash equivalents | $ | — |
| | $ | — |
| | $ | 156 |
| | $ | — |
| | $ | — |
| | $ | 136 |
| Equity securities | 1,655 |
| | 71 |
| | 3,396 |
| | 1,926 |
| | 29 |
| | 3,650 |
| Corporate debt securities | 9 |
| | 7 |
| | 500 |
| | 14 |
| | 2 |
| | 454 |
| Municipal bonds | 4 |
| | 2 |
| | 207 |
| | 5 |
| | — |
| | 184 |
| U.S. government bonds | 23 |
| | 1 |
| | 1,131 |
| | 19 |
| | 2 |
| | 978 |
| Other debt securities | 1 |
| | 3 |
| | 172 |
| | 1 |
| | 2 |
| | 147 |
| Total NDTF(c) | $ | 1,692 |
| | $ | 84 |
| | $ | 5,562 |
| | $ | 1,965 |
| | $ | 35 |
| | $ | 5,549 |
| Other Investments | | | | | | | |
| | |
| | |
| Cash and cash equivalents | $ | — |
| | $ | — |
| | $ | 32 |
| | $ | — |
| | $ | — |
| | $ | 15 |
| Equity securities | 27 |
| | 1 |
| | 90 |
| | 34 |
| | — |
| | 96 |
| Corporate debt securities | 1 |
| | 2 |
| | 98 |
| | 1 |
| | 1 |
| | 58 |
| Municipal bonds | 3 |
| | 1 |
| | 73 |
| | 3 |
| | 1 |
| | 76 |
| U.S. government bonds | 1 |
| | — |
| | 52 |
| | — |
| | — |
| | 27 |
| Other debt securities | — |
| | 1 |
| | 69 |
| | 1 |
| | 1 |
| | 80 |
| Total Other Investments(a) | $ | 32 |
| | $ | 5 |
| | $ | 414 |
| | $ | 39 |
| | $ | 3 |
| | $ | 352 |
| Total Investments | $ | 1,724 |
| | $ | 89 |
| | $ | 5,976 |
| | $ | 2,004 |
| | $ | 38 |
| | $ | 5,901 |
|
(a) These amounts are recorded in Other with Investments and Other Assets on the Condensed Consolidated Balance Sheets. | | (b) | Substantially all these amounts are considered other-than-temporary impairments on investments within Investment Trusts that have been recognized immediately as a regulatory asset. |
| | (c) | As of September 30, 2015, the estimated fair value of the NDTF includes NDTF assets acquired with the purchase of NCEMPA's ownership interest in certain generating assets. Refer to Note 2 for further information. This increase in estimated fair value compared to December 31, 2014, is partially offset due to reimbursements from the NDTF for Duke Energy Florida's costs related to ongoing decommissioning activity of the Crystal River Unit 3 Nuclear Plant. |
The table below summarizes the maturity date for debt securities. | | | | | (in millions) | September 30, 2015 |
| Due in one year or less | $ | 74 |
| Due after one through five years | 781 |
| Due after five through 10 years | 635 |
| Due after 10 years | 812 |
| Total | $ | 2,302 |
|
Realized gains and losses, which were determined on a specific identification basis, from sales of available-for-sale securities were as follows. | | | | | | | | | | | | | | | | | | Three Months Ended | | Nine Months Ended | | September 30, | | September 30, | (in millions) | 2015 |
| | 2014 |
| | 2015 |
| | 2014 |
| Realized gains | $ | 30 |
| | $ | 28 |
| | $ | 160 |
| | $ | 90 |
| Realized losses | 28 |
| | 51 |
| | 59 |
| | 57 |
|
DUKE ENERGY CAROLINAS The following table presents the estimated fair value of investments in available-for-sale securities. | | | | | | | | | | | | | | | | | | | | | | | | | | September 30, 2015 | | December 31, 2014 | | Gross |
| | Gross |
| | | | Gross |
| | Gross |
| | | | Unrealized |
| | Unrealized |
| | Estimated |
| | Unrealized |
| | Unrealized |
| | Estimated |
| | Holding |
| | Holding |
| | Fair |
| | Holding |
| | Holding |
| | Fair |
| (in millions) | Gains |
| | Losses(b) |
| | Value |
| | Gains |
| | Losses(b) |
| | Value |
| NDTF | | | | | | | | | | | | Cash and cash equivalents | $ | — |
| | $ | — |
| | $ | 25 |
| | $ | — |
| | $ | — |
| | $ | 51 |
| Equity securities | 930 |
| | 42 |
| | 1,990 |
| | 1,102 |
| | 17 |
| | 2,162 |
| Corporate debt securities | 5 |
| | 6 |
| | 342 |
| | 8 |
| | 2 |
| | 316 |
| Municipal bonds | 1 |
| | 1 |
| | 69 |
| | 1 |
| | — |
| | 62 |
| U.S. government bonds | 6 |
| | 1 |
| | 383 |
| | 7 |
| | 1 |
| | 308 |
| Other debt securities | 1 |
| | 3 |
| | 141 |
| | 1 |
| | 2 |
| | 133 |
| Total NDTF | $ | 943 |
| | $ | 53 |
|
| $ | 2,950 |
| | $ | 1,119 |
| | $ | 22 |
| | $ | 3,032 |
| Other Investments | | | | | | | | | | | | Other debt securities | $ | — |
| | $ | 1 |
| | $ | 3 |
| | $ | — |
| | $ | 1 |
| | $ | 3 |
| Total Other Investments(a) | $ | — |
| | $ | 1 |
| | $ | 3 |
| | $ | — |
| | $ | 1 |
| | $ | 3 |
| Total Investments | $ | 943 |
| | $ | 54 |
| | $ | 2,953 |
| | $ | 1,119 |
| | $ | 23 |
| | $ | 3,035 |
|
| | (a) | These amounts are recorded in Other within Investments and Other Assets on the Condensed Consolidated Balance Sheets. |
| | (b) | Substantially all these amounts represent other-than-temporary impairments on investments within Investment Trusts that have been recognized immediately as a regulatory asset. |
The table below summarizes the maturity date for debt securities. | | | | | (in millions) | September 30, 2015 |
| Due in one year or less | $ | 13 |
| Due after one through five years | 209 |
| Due after five through 10 years | 293 |
| Due after 10 years | 423 |
| Total | $ | 938 |
|
Realized gains and losses, which were determined on a specific identification basis, from sales of available-for-sale securities were as follows. | | | | | | | | | | | | | | | | | | Three Months Ended | | Nine Months Ended | | September 30, | | September 30, | (in millions) | 2015 |
| | 2014 |
| | 2015 |
| | 2014 |
| Realized gains | $ | 25 |
| | $ | 20 |
| | $ | 132 |
| | $ | 72 |
| Realized losses | 24 |
| | 48 |
| | 47 |
| | 50 |
|
PROGRESS ENERGY The following table presents the estimated fair value investments in available-for-sale securities. | | | | | | | | | | | | | | | | | | | | | | | | | | September 30, 2015 | | December 31, 2014 | | Gross |
| | Gross |
| | | | Gross |
| | Gross |
| | | | Unrealized |
| | Unrealized |
| | Estimated |
| | Unrealized |
| | Unrealized |
| | Estimated |
| | Holding |
| | Holding |
| | Fair |
| | Holding |
| | Holding |
| | Fair |
| (in millions) | Gains |
| | Losses(b) |
| | Value |
| | Gains |
| | Losses(b) |
| | Value |
| NDTF | | | | | | | | | | | | Cash and cash equivalents | $ | — |
| | $ | — |
| | $ | 131 |
| | $ | — |
| | $ | — |
| | $ | 85 |
| Equity securities | 725 |
| | 29 |
| | 1,406 |
| | 824 |
| | 12 |
| | 1,488 |
| Corporate debt securities | 4 |
| | 1 |
| | 158 |
| | 6 |
| | — |
| | 138 |
| Municipal bonds | 3 |
| | 1 |
| | 138 |
| | 4 |
| | — |
| | 122 |
| U.S. government bonds | 17 |
| | — |
| | 748 |
| | 12 |
| | 1 |
| | 670 |
| Other debt securities | — |
| | — |
| | 31 |
| | — |
| | — |
| | 14 |
| Total NDTF(c) | $ | 749 |
| | $ | 31 |
| | $ | 2,612 |
| | $ | 846 |
| | $ | 13 |
| | $ | 2,517 |
| Other Investments | | | | | | | | | | | | Cash and cash equivalents | $ | — |
| | $ | — |
| | $ | 23 |
| | $ | — |
| | $ | — |
| | $ | 15 |
| Municipal bonds | 3 |
| | — |
| | 43 |
| | 3 |
| | — |
| | 43 |
| Total Other Investments(a) | $ | 3 |
| | $ | — |
| | $ | 66 |
| | $ | 3 |
| | $ | — |
| | $ | 58 |
| Total Investments | $ | 752 |
| | $ | 31 |
| | $ | 2,678 |
| | $ | 849 |
| | $ | 13 |
| | $ | 2,575 |
|
(a) These amounts are recorded in Other within Investments and Other Assets on the Condensed Consolidated Balance Sheets. | | (b) | Substantially all these amounts represent other-than-temporary impairments on investments within Investment Trusts that have been recognized immediately as a regulatory asset. |
| | (c) | As of September 30, 2015, the estimated fair value of the NDTF includes NDTF assets acquired with the purchase of NCEMPA's ownership interest in certain generating assets. Refer to Note 2 for further information. This increase in estimated fair value compared to December 31, 2014, is partially offset due to reimbursements from the NDTF for Duke Energy Florida's costs related to ongoing decommissioning activity of the Crystal River Unit 3 Nuclear Plant. |
The table below summarizes the maturity date for debt securities. | | | | | (in millions) | September 30, 2015 |
| Due in one year or less | $ | 38 |
| Due after one through five years | 476 |
| Due after five through 10 years | 271 |
| Due after 10 years | 333 |
| Total | $ | 1,118 |
|
Realized gains and losses, which were determined on a specific identification basis, from sales of available-for-sale securities were as follows. | | | | | | | | | | | | | | | | | | Three Months Ended | | Nine Months Ended | | September 30, | | September 30, | (in millions) | 2015 |
| | 2014 |
| | 2015 |
| | 2014 |
| Realized gains | $ | 5 |
| | $ | 8 |
| | $ | 26 |
| | $ | 17 |
| Realized losses | 4 |
| | 3 |
| | 10 |
| | 6 |
|
DUKE ENERGY PROGRESS The following table presents the estimated fair value of investments in available-for-sale securities. | | | | | | | | | | | | | | | | | | | | | | | | | | September 30, 2015 | | December 31, 2014 | | Gross |
| | Gross |
| | | | Gross |
| | Gross |
| | | | Unrealized |
| | Unrealized |
| | Estimated |
| | Unrealized |
| | Unrealized |
| | Estimated |
| | Holding |
| | Holding |
| | Fair |
| | Holding |
| | Holding |
| | Fair |
| (in millions) | Gains |
| | Losses(b) |
| | Value |
| | Gains |
| | Losses(b) |
| | Value |
| NDTF | | | | | | | | | | | | Cash and cash equivalents | $ | — |
| | $ | — |
| | $ | 87 |
| | $ | — |
| | $ | — |
| | $ | 50 |
| Equity securities | 535 |
| | 23 |
| | 1,107 |
| | 612 |
| | 10 |
| | 1,171 |
| Corporate debt securities | 3 |
| | 1 |
| | 109 |
| | 5 |
| | — |
| | 97 |
| Municipal bonds | 3 |
| | 1 |
| | 136 |
| | 4 |
| | — |
| | 120 |
| U.S. government bonds | 12 |
| | — |
| | 485 |
| | 9 |
| | 1 |
| | 265 |
| Other debt securities | — |
| | — |
| | 19 |
| | — |
| | — |
| | 8 |
| Total NDTF (c) | $ | 553 |
| | $ | 25 |
| | $ | 1,943 |
| | $ | 630 |
| | $ | 11 |
| | $ | 1,711 |
| Other Investments | | | | | | | |
| | |
| | |
| Cash and cash equivalents | $ | — |
| | $ | — |
| | $ | 1 |
| | $ | — |
| | $ | — |
| | $ | — |
| Total Other Investments(a) | $ | — |
| | $ | — |
| | $ | 1 |
| | $ | — |
| | $ | — |
| | $ | — |
| Total Investments | $ | 553 |
| | $ | 25 |
| | $ | 1,944 |
| | $ | 630 |
| | $ | 11 |
| | $ | 1,711 |
|
(a) These amounts are recorded in Other with Investments and Other Assets on the Condensed Consolidated Balance Sheets. | | (b) | Substantially all these amounts represent other-than-temporary impairments on investments within Investment Trusts that have been recognized immediately as a regulatory asset. |
| | (c) | As of September 30, 2015, the estimated fair value of the NDTF includes NDTF assets acquired with the purchase of NCEMPA's ownership interest in certain generating assets. Refer to Note 2 for further information. |
The table below summarizes the maturity date for debt securities. | | | | | (in millions) | September 30, 2015 |
| Due in one year or less | $ | 12 |
| Due after one through five years | 278 |
| Due after five through 10 years | 219 |
| Due after 10 years | 240 |
| Total | $ | 749 |
|
Realized gains and losses, which were determined on a specific identification basis, from sales of available-for-sale securities were as follows. | | | | | | | | | | | | | | | | | | Three Months Ended | | Nine Months Ended | | September 30, | | September 30, | (in millions) | 2015 |
| | 2014 |
| | 2015 |
| | 2014 |
| Realized gains | $ | 4 |
| | $ | 4 |
| | $ | 21 |
| | $ | 11 |
| Realized losses | 3 |
| | 2 |
| | 8 |
| | 4 |
|
DUKE ENERGY FLORIDA The following table presents the estimated fair value of investments in available-for-sale securities. | | | | | | | | | | | | | | | | | | | | | | | | | | September 30, 2015 | | December 31, 2014 | | Gross |
| | Gross |
| | | | Gross |
| | Gross |
| | | | Unrealized |
| | Unrealized |
| | Estimated |
| | Unrealized |
| | Unrealized |
| | Estimated |
| | Holding |
| | Holding |
| | Fair |
| | Holding |
| | Holding |
| | Fair |
| (in millions) | Gains |
| | Losses(b) |
| | Value |
| | Gains |
| | Losses(b) |
| | Value |
| NDTF | | | | | | | | | | | | Cash and cash equivalents | $ | — |
| | $ | — |
| | $ | 44 |
| | $ | — |
| | $ | — |
| | $ | 35 |
| Equity securities | 190 |
| | 6 |
| | 299 |
| | 212 |
| | 2 |
| | 317 |
| Corporate debt securities | 1 |
| | — |
| | 49 |
| | 1 |
| | — |
| | 41 |
| Municipal bonds | — |
| | — |
| | 2 |
| | — |
| | — |
| | 2 |
| U.S. government bonds | 5 |
| | — |
| | 263 |
| | 3 |
| | — |
| | 405 |
| Other debt securities | — |
| | — |
| | 12 |
| | — |
| | — |
| | 6 |
| Total NDTF(c) | $ | 196 |
| | $ | 6 |
| | $ | 669 |
| | $ | 216 |
| | $ | 2 |
| | $ | 806 |
| Other Investments | | | | | | | |
| | |
| | |
| Cash and cash equivalents | $ | — |
| | $ | — |
| | $ | 11 |
| | $ | — |
| | $ | — |
| | $ | 1 |
| Municipal bonds | 3 |
| | — |
| | 43 |
| | 3 |
| | — |
| | 43 |
| Total Other Investments(a) | $ | 3 |
| | $ | — |
| | $ | 54 |
| | $ | 3 |
| | $ | — |
| | $ | 44 |
| Total Investments | $ | 199 |
| | $ | 6 |
| | $ | 723 |
| | $ | 219 |
| | $ | 2 |
| | $ | 850 |
|
(a) These amounts are recorded in Other with Investments and Other Assets on the Condensed Consolidated Balance Sheets. | | (b) | Substantially all these amounts represent other-than-temporary impairments on investments within Investment Trusts that have been recognized immediately as a regulatory asset. |
| | (c) | The estimated fair value at September 30, 2015, compared to the balance at December 31, 2014, is lower due to current year reimbursements from the NDTF for costs related to ongoing decommissioning activity of the Crystal River Unit 3 Nuclear Plant. |
The table below summarizes the maturity date for debt securities. | | | | | (in millions) | September 30, 2015 |
| Due in one year or less | $ | 26 |
| Due after one through five years | 198 |
| Due after five through 10 years | 52 |
| Due after 10 years | 93 |
| Total | $ | 369 |
|
Realized gains and losses, which were determined on a specific identification basis, from sales of available-for-sale securities were as follows. | | | | | | | | | | | | | | | | | | Three Months Ended | | Nine Months Ended | | September 30, | | September 30, | (in millions) | 2015 |
| | 2014 |
| | 2015 |
| | 2014 |
| Realized gains | $ | 1 |
| | $ | 3 |
| | $ | 5 |
| | $ | 5 |
| Realized losses | 1 |
| | 1 |
| | 2 |
| | 2 |
|
DUKE ENERGY INDIANA The following table presents the estimated fair value of investments in available-for-sale securities. | | | | | | | | | | | | | | | | | | | | | | | | | | September 30, 2015 | | December 31, 2014 | | Gross |
| | Gross |
| | | | Gross |
| | Gross |
| | | | Unrealized |
| | Unrealized |
| | Estimated |
| | Unrealized |
| | Unrealized |
| | Estimated |
| | Holding |
| | Holding |
| | Fair |
| | Holding |
| | Holding |
| | Fair |
| (in millions) | Gains |
| | Losses(b) |
| | Value |
| | Gains |
| | Losses(b) |
| | Value |
| Other Investments | | | | | | | | | | | | Equity securities | $ | 23 |
| | $ | — |
| | $ | 67 |
| | $ | 28 |
| | $ | — |
| | $ | 71 |
| Corporate debt securities | — |
| | — |
| | 3 |
| | — |
| | — |
| | — |
| Municipal bonds | — |
| | 1 |
| | 27 |
| | — |
| | 1 |
| | 30 |
| Total Other Investments(a) | $ | 23 |
| | $ | 1 |
|
| $ | 97 |
| | $ | 28 |
| | $ | 1 |
| | $ | 101 |
| Total Investments | $ | 23 |
| | $ | 1 |
| | $ | 97 |
| | $ | 28 |
| | $ | 1 |
| | $ | 101 |
|
(a) These amounts are recorded in Other within Investments and Other Assets on the Condensed Consolidated Balance Sheets. | | (b) | Substantially all these amounts represent other-than-temporary impairments on investments within Investment Trusts that have been recognized immediately as a regulatory asset. |
The table below summarizes the maturity date for debt securities. | | | | | (in millions) | September 30, 2015 |
| Due in one year or less | $ | 2 |
| Due after one through five years | 16 |
| Due after five through 10 years | 8 |
| Due after 10 years | 4 |
| Total | $ | 30 |
|
Realized gains and losses, which were determined on a specific identification basis, from sales of available-for-sale securities were insignificant for the three and nine months ended September 30, 2015 and 2014. |