XML 68 R12.htm IDEA: XBRL DOCUMENT
v3.22.4

Dispositions | 12 Months Ended
--- | ---
Dec. 31, 2022
Discontinued Operations and Disposal Groups [Abstract] |
Dispositions | DISPOSITIONS The following table summarizes the Loss from Discontinued Operations, net of tax recorded on Duke Energy's Consolidated Statements of Operations:
|  | Years Ended December 31,
(in millions) |  | 2022 | 2021 | 2020
Commercial Renewables Disposal Groups |  | $ | (1,349) |  | $ | (151) |  | $ | (14) |
Other(a) |  | 26 |  | 7 |  | 7 |
Loss from Discontinued Operations, net of tax |  | $ | (1,323) |  | $ | (144) |  | $ | (7) |
(a) Amount represents an income tax benefit resulting from tax adjustments for previously sold businesses not related to the Commercial Renewables Disposal Groups. Sale of Commercial Renewables Segment In August 2022, Duke Energy announced a strategic review of its commercial renewables business. Since 2007, Duke Energy has built a portfolio of commercial wind, solar and battery projects across the U.S., and established a development pipeline. Duke Energy has developed a strategy to focus on renewables, grid and other investment opportunities within its regulated operations. In November 2022, Duke Energy committed to a plan to sell the Commercial Renewables business segment, excluding the offshore wind contract for Carolina Long Bay, which was moved to the Electric Utilities and Infrastructure (EU&I) segment. Duke Energy is actively marketing the business as two separate disposal groups, the utility-scale solar and wind group and the distributed generation group (collectively, Commercial Renewables Disposal Groups). The sales processes for both Disposal Groups are ongoing and Duke Energy expects to dispose of these groups in the second half of 2023. Assets Held For Sale and Discontinued Operations The Commercial Renewables Disposal Groups were classified as held for sale and as discontinued operations in the fourth quarter of 2022. No adjustments were made to the historical activity within the Consolidated Statements of Comprehensive Income, Consolidated Statements of Cash Flows or the Consolidated Statements of Changes in Equity. Unless otherwise noted, the notes to these consolidated financial statements exclude amounts related to discontinued operations for all periods presented. The following table presents the carrying values of the major classes of Assets held for sale and Liabilities associated with assets held for sale included in Duke Energy's Consolidated Balance Sheets.
|  | December 31, |
(in millions) |  | 2022 |  | 2021 |
Current Assets Held for Sale |  |  |  |  |
Cash and cash equivalents |  | $ | 10 |  |  | $ | 3 |  |
Receivables, net |  | 107 |  |  | 87 |  |
Inventory |  | 88 |  |  | 86 |  |
Other |  | 57 |  |  | 56 |  |
Total current assets held for sale |  | 262 |  |  | 232 |  |
Noncurrent Assets Held for Sale |  |  |  |  |
Property, Plant and Equipment |  |  |  |  |
Cost |  | 6,444 |  |  | 7,323 |  |
Accumulated depreciation and amortization |  | (1,651) |  |  | (1,452) |  |
Net property, plant and equipment |  | 4,793 |  |  | 5,871 |  |
Operating lease right-of-use assets, net |  | 140 |  |  | 130 |  |
Investments in equity method unconsolidated affiliates |  | 522 |  |  | 513 |  |
Other |  | 179 |  |  | 181 |  |
Total other noncurrent assets held for sale |  | 841 |  |  | 824 |  |
Total Assets Held for Sale |  | $ | 5,896 |  |  | $ | 6,927 |  |
Current Liabilities Associated with Assets Held for Sale |  |  |  |  |
Accounts payable |  | $ | 122 |  |  | $ | 98 |  |
Taxes accrued |  | 17 |  |  | 18 |  |
Other |  | 120 |  |  | 51 |  |
Total current liabilities associated with assets held for sale |  | 259 |  |  | 167 |  |
Noncurrent Liabilities Associated with Assets Held for Sale |  |  |  |  |
Operating lease liabilities |  | 150 |  |  | 134 |  |
Asset retirement obligations |  | 190 |  |  | 175 |  |
Other |  | 399 |  |  | 303 |  |
Total other noncurrent liabilities associated with assets held for sale |  | 739 |  |  | 612 |  |
Total Liabilities Associated with Assets Held for Sale |  | $ | 998 |  |  | $ | 779 |  |
As of December 31, 2022, the noncontrolling interest balance is $1.6 billion. The following table presents the results of the Commercial Renewables Disposal Groups, which are included in Loss from Discontinued Operations, net of tax in Duke Energy's Consolidated Statements of Operations.
| Years Ended December 31,
(in millions) | 2022 |  | 2021 |  | 2020
Operating revenues | $ | 465 |  |  | $ | 476 |  |  | $ | 502 |
Operation, maintenance and other | 337 |  | 343 |  | 292
Depreciation and amortization(a) | 201 |  | 227 |  | 200
Property and other taxes | 36 |  | 34 |  | 26
Other income and expenses, net | 2 |  |  | (27) |  |  | 1
Interest expense | 10 |  | 72 |  | 66
Loss on disposal | 1,748 |  |  | — |  |  | — |
Loss before income taxes | (1,865) |  |  | (227) |  |  | (81) |
Income tax benefit | (516) |  |  | (76) |  |  | (67) |
Loss from discontinued operations | $ | (1,349) |  |  | $ | (151) |  |  | $ | (14) |
Add: Net loss attributable to noncontrolling interest included in discontinued operations | 108 |  |  | 344 |  |  | 296 |
Net income from discontinued operations attributable to Duke Energy Corporation | $ | (1,241) |  |  | $ | 193 |  |  | $ | 282 |
(a) Upon meeting the criteria for assets held for sale, beginning in November 2022 depreciation and amortization expense were ceased. The Commercial Renewables Disposal Groups' held for sale assets included pretax impairments of approximately $1.7 billion for the year ended December 31, 2022. The impairment was recorded to write-down the carrying amount of the property, plant and equipment assets to the estimated fair value of the business, based on the expected selling price less estimated cost to sell. These losses were included in Loss from Discontinued Operations, net of tax in Duke Energy's Consolidated Statements of Operations and Comprehensive Income. The fair value was primarily determined from the income approach using discounted cash flows but also considered market information obtained through the bidding process. The discounted cash flow model utilized Level 2 and Level 3 inputs. The fair value hierarchy levels are further discussed in Note 17. The impairment will be updated, if necessary, based on the final sales price, after any adjustments at closing for working capital and capital expenditures. Duke Energy has elected not to separately disclose discontinued operations on Duke Energy's Consolidated Statements of Cash Flows. The following table summarizes Duke Energy's cash flows from discontinued operations related to the Commercial Renewables Disposal Groups.
| Years Ended December 31,
(in millions) | 2022 |  | 2021 |  | 2020
Cash flows provided by (used in): |  |  |  |  |
Operating activities | $ | 213 |  |  | $ | 62 |  |  | $ | 466 |
Investing activities | (802) |  |  | (542) |  |  | (1,102) |
Other Sale Related Matters Several Duke Energy renewables project companies, located in the Electric Reliability Council of Texas (ERCOT) market, were named in several lawsuits arising out of Texas Storm Uri, which occurred in February 2021. The legal actions related to these lawsuits will remain with Duke Energy and any future activity related to the matters will be presented in discontinued operations. See Note 5 for more information. The Commercial Renewables Disposal Groups' debt and related interest rate swaps have not been classified as held for sale as they are not currently expected transfer to the buyer, but would be required to be extinguished as a result of the disposition. As of December 31, 2022, the balance of long-term debt including current maturities is $1.5 billion. If the debt and related interest rate swaps do not transfer to the buyer and are terminated early, the expected total loss on extinguishment is approximately $100 million, of which approximately $55 million is expected to be attributable to Duke Energy. The loss would be recorded in discontinued operations when the debt and swaps are terminated. Hedge accounting was discontinued on the related interest rate swaps when the Commercial Renewables Disposal Groups were classified as held for sale as the forecasted transactions being hedged are no longer probable. As a result, a gain of $72 million was recorded in Loss from Discontinued Operations, net of tax in Duke Energy's Consolidated Statements of Operations as of December 31, 2022, of which $54 million is attributable to Duke Energy. Interest expense and debt issuance costs directly associated with the Commercial Renewables Disposal Groups was allocated to discontinued operations. No interest from corporate level debt was allocated to discontinued operations. The Commercial Renewables Disposal Groups have entered into negotiations to modify or terminate certain PPAs under which the Commercial Renewables Disposal Groups sell power and RECs from renewable projects to offtakers. Duke Energy expects to pay offtakers approximately $95 million to modify the agreements. Charges related to the modifications will be reflected within Loss From Discontinued Operations in Duke Energy's Consolidated Statements of Operations. Sale of Minority Interest in Duke Energy Indiana Holdco, LLC On January 28, 2021, Duke Energy executed an agreement providing for an investment by an affiliate of GIC in Duke Energy Indiana in exchange for a 19.9% minority interest issued by Duke Energy Indiana Holdco, LLC, the holding company for Duke Energy Indiana. The transaction was completed following two closings for an aggregate purchase price of approximately $2.05 billion. The first closing, which occurred on September 8, 2021, resulted in Duke Energy Indiana Holdco, LLC issuing 11.05% of its membership interests in exchange for approximately $1.03 billion or 50% of the purchase price. The difference between the cash consideration received, net of transaction costs of approximately $27 million, and the carrying value of the noncontrolling interest is $545 million and was recorded as an increase to equity. The second closing was completed in December 2022 and resulted in Duke Energy Indiana Holdco, LLC issuing an additional 8.85% of its membership interests in exchange for approximately $1.03 billion. The difference between the cash consideration received, net of transaction costs of approximately $6 million, and the carrying value of the noncontrolling interest is $492 million and was recorded as an increase to equity. Duke Energy retained indirect control of these assets, and, therefore, no gain or loss was recognized on the Consolidated Statements of Operations for either transaction.

X
- References No definition available. + Details
Name: | us-gaap_DiscontinuedOperationsAndDisposalGroupsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -URI https://asc.fasb.org/topic&trid=2155823 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI https://asc.fasb.org/subtopic&trid=2122178 + Details
Name: | us-gaap_DisposalGroupsIncludingDiscontinuedOperationsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration