BUSINESS SEGMENTS

Operating segments are determined based on information used by the chief operating decision-maker in deciding how to allocate resources and evaluate the performance of the business. Duke Energy evaluates segment performance based on segment income. Segment income is defined as income from continuing operations net of income attributable to noncontrolling interests. Segment income includes intercompany revenues and expenses that are eliminated in the Condensed Consolidated Financial Statements. Products and services are sold between affiliate companies and reportable segments of Duke Energy at cost.

Duke Energy

Due to the Piedmont acquisition and the sale of International Energy in the fourth quarter of 2016, Duke Energy's segment structure has been realigned to include the following segments: Electric Utilities and Infrastructure, Gas Utilities and Infrastructure and Commercial Renewables. Prior period information has been recast to conform to the current segment structure. See Note 2 for further information on the Piedmont and International Energy transactions.

The Electric Utilities and Infrastructure segment includes Duke Energy's regulated electric utilities in the Carolinas, Florida and the Midwest. The regulated electric utilities conduct operations through the Subsidiary Registrants that are substantially all regulated and, accordingly, qualify for regulatory accounting treatment. Electric Utilities and Infrastructure also includes Duke Energy's electric transmission infrastructure investments.

The Gas Utilities and Infrastructure segment includes Piedmont, Duke Energy's natural gas local distribution companies in Ohio and Kentucky, and Duke Energy's natural gas storage and mid-stream pipeline investments. Gas Utilities and Infrastructure's operations are substantially all regulated and, accordingly, qualify for regulatory accounting treatment.

Commercial Renewables is primarily comprised of nonregulated utility scale wind and solar generation assets located throughout the U.S.

The remainder of Duke Energy’s operations is presented as Other, which is primarily comprised of unallocated corporate interest expense, unallocated corporate costs, contributions to the Duke Energy Foundation and the operations of Duke Energy’s wholly owned captive insurance subsidiary, Bison Insurance Company Limited (Bison). Other also includes Duke Energy's 25 percent interest in NMC, a large regional producer of methyl tertiary butyl ether (MTBE) located in Saudi Arabia. The investment in NMC is accounted for under the equity method of accounting.

Business segment information is presented in the following tables. Segment assets presented exclude intercompany assets.



	Three Months Ended March 31, 2017
	Electric		Gas				Total
	Utilities and		Utilities and		Commercial		Reportable
(in millions)	Infrastructure		Infrastructure		Renewables		Segments		Other			Eliminations			Consolidated
Unaffiliated revenues	$	4,939	$	648	$	128	$	5,715	$	14		$	—		$	5,729
Intersegment revenues	8		22		—		30		19			(49		)	—
Total revenues	$	4,947	$	670	$	128	$	5,745	$	33		$	(49	)	$	5,729
Segment income (loss)	$	635	$	133	$	25	$	793	$	(77	)	$	—		$	716
Add back noncontrolling interests															1
Net income															$	717
Segment assets	$	115,766	$	10,866	$	4,400	$	131,032	$	2,898		$	178		$	134,108



	Three Months Ended March 31, 2016
	Electric		Gas				Total
	Utilities and		Utilities and		Commercial		Reportable
(in millions)	Infrastructure		Infrastructure		Renewables		Segments		Other			Eliminations			Consolidated
Unaffiliated revenues	$	5,081	$	169	$	114	$	5,364	$	13		$	—		$	5,377
Intersegment revenues	8		1		—		9		16			(25		)	—
Total revenues	$	5,089	$	170	$	114	$	5,373	$	29		$	(25	)	$	5,377
Segment income (loss)^(a)	$	664	$	32	$	26	$	722	$	(148	)	$	—		$	574
Add back noncontrolling interests															3
Income from discontinued operations, net of tax															122
Net income															$	699


(a)	Other includes $74 million of after-tax costs to achieve mergers, including losses on forward-starting interest rate swaps related to the Piedmont acquisition financing. See Note 9 for additional information.

Duke Energy Ohio

Duke Energy Ohio has two reportable operating segments, Electric Utilities and Infrastructure and Gas Utilities and Infrastructure.

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

Other is primarily comprised of governance costs allocated by its parent, Duke Energy, and revenues and expenses related to Duke Energy Ohio's contractual arrangement to buy power from the Ohio Valley Electric Corporation's (OVEC) power plants. See Note 8 for additional information on related party transactions.



	Three Months Ended March 31, 2017
	Electric		Gas		Total
	Utilities and		Utilities and		Reportable
(in millions)	Infrastructure		Infrastructure		Segments		Other			Eliminations			Consolidated
Total revenues	$	337	$	170	$	507	$	11		$	—		$	518
Segment income (loss)/Net Income	24		26		50		(8		)	—			42
Segment assets	4,856		2,696		7,552		71			(14		)	7,609



	Three Months Ended March 31, 2016
	Electric		Gas		Total
	Utilities and		Utilities and		Reportable
(in millions)	Infrastructure		Infrastructure		Segments		Other			Eliminations			Consolidated
Total revenues	$	340	$	170	$	510	$	6		$	—		$	516
Segment income (loss)	$	36	$	31	$	67	$	(9	)	$	(1	)	$	57
Income from discontinued operations, net of tax													2
Net income													$	59

DUKE ENERGY CAROLINAS, PROGRESS ENERGY, DUKE ENERGY PROGRESS, DUKE ENERGY FLORIDA, DUKE ENERGY INDIANA AND PIEDMONT

Piedmont has one reportable segment, Gas Utilities and Infrastructure, which transports and sells natural gas. The remainder of Piedmont's operations is classified as Other. While not considered a reportable segment, Other primarily consists of certain unallocated corporate costs, including acquisition-related expenses, and Piedmont's equity method investment in SouthStar Energy Services, LLC (SouthStar) prior to its sale. Piedmont sold its 15 percent membership interest in SouthStar on October 3, 2016. Piedmont's income, net of tax, from SouthStar for the three months ended March 31, 2016 was $7 million.

The remaining Subsidiary Registrants each have one reportable operating segment, Electric Utilities and Infrastructure, which generates, transmits, distributes and sells electricity. The remainder of each company's operations is classified as Other. While not considered a reportable segment for any of these companies, Other consists of certain unallocated corporate costs. Other for Progress Energy also includes interest expense on corporate debt instruments of $55 million and $56 million for the three months ended March 31, 2017 and 2016, respectively. The following table summarizes the net loss of Other for each of these entities.



	Three Months Ended
	March 31,
(in millions)	2017			2016
Duke Energy Carolinas	$	(6	)	$	(17	)
Progress Energy	(43		)	(49		)
Duke Energy Progress	(3		)	(8		)
Duke Energy Florida	(2		)	(4		)
Duke Energy Indiana	(2		)	(2		)
Piedmont	(4		)	6

The assets at Duke Energy Carolinas, Progress Energy, Duke Energy Progress, Duke Energy Florida and Duke Energy Indiana are substantially all included within the Electric Utilities and Infrastructure segment at March 31, 2017. The assets at Piedmont are substantially all included within the Gas Utilities and Infrastructure segment at March 31, 2017.