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Dispositions | 9 Months Ended
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Sep. 30, 2023
Discontinued Operations and Disposal Groups [Abstract] |
Dispositions | DISPOSITIONS 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 EU&I segment. In June 2023, Duke Energy announced that it had entered into a purchase and sale agreement with affiliates of Brookfield for the sale of the utility-scale solar and wind grou p. Duke Energy closed on this transaction on October 25, 2023, for proceeds of $1.1 billion, with approximately half of the proceeds received at closing and th e remainder due 18 months after closing. In July 2023, Duke Energy announced that it had entered into a purchase and sale agreement with affiliates of ArcLight for the distributed generation group. Duke Energy closed on this transaction on October 4, 2023, and received proceeds of $243 million. In March 2023, assets for certain projects were removed from the utility-scale solar and wind group and placed in a separate disposal group. The disposal process for the remaining assets is expected to be completed by early 2024, with net proceeds from the dispositions not anticipated to be material. Assets Held For Sale and Discontinued Operations The utility-scale solar and wind group, the distributed generation group and the remaining assets (collectively, Commercial Renewables Disposal Groups) were classified as held for sale and as discontinued operations in the fourth quarter of 2022. Originally debt and the related restricted cash and interest rate swaps were not expected to transfer to a buyer but during the marketing process it was determined they would be included with the sale and were classified as held for sale in March 2023. As a result, adjustments were made to the December 31, 2022, Consolidated Balance Sheet to present debt and the related restricted cash and interest rate swaps as held for sale. 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. No interest from corporate level debt was allocated to discontinued operations. 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.
(in millions) | September 30, 2023 |  | December 31, 2022 |
Current Assets Held for Sale |  |  |  |
Cash and cash equivalents | $ | 70 |  |  | $ | 10 |  |
Receivables, net | 107 |  |  | 107 |  |
Inventory | 84 |  |  | 88 |  |
Other | 179 |  |  | 151 |  |
Total current assets held for sale | 440 |  |  | 356 |  |
Noncurrent Assets Held for Sale |  |  |  |
Property, Plant and Equipment |  |  |  |
Cost | 5,387 |  |  | 6,444 |  |
Accumulated depreciation and amortization | (1,651) |  |  | (1,651) |  |
Net property, plant and equipment | 3,736 |  |  | 4,793 |  |
Operating lease right-of-use assets, net | 144 |  |  | 140 |  |
Investments in equity method unconsolidated affiliates | 504 |  |  | 522 |  |
Other | 212 |  |  | 179 |  |
Total other noncurrent assets held for sale | 860 |  |  | 841 |  |
Total Assets Held for Sale | $ | 5,036 |  |  | $ | 5,990 |  |
Current Liabilities Associated with Assets Held for Sale |  |  |  |
Accounts payable | $ | 124 |  |  | $ | 122 |  |
Taxes accrued | 22 |  |  | 17 |  |
Current maturities of long-term debt | 268 |  |  | 276 |  |
Other | 175 |  |  | 120 |  |
Total current liabilities associated with assets held for sale | 589 |  |  | 535 |  |
Noncurrent Liabilities Associated with Assets Held for Sale |  |  |  |
Long-Term debt | 1,047 |  |  | 1,188 |  |
Operating lease liabilities | 154 |  |  | 150 |  |
Asset retirement obligations | 201 |  |  | 190 |  |
Other | 232 |  |  | 399 |  |
Total other noncurrent liabilities associated with assets held for sale | 1,634 |  |  | 1,927 |  |
Total Liabilities Associated with Assets Held for Sale | $ | 2,223 |  |  | $ | 2,462 |  |
As of September 30, 2023, and December 31, 2022, the noncontrolling interest balance is $1.8 billion and $1.6 billion, respectively. The following table presents the results of the Commercial Renewables Disposal Groups, which are included in (Loss) Income from Discontinued Operations, net of tax in Duke Energy's Consolidated Statements of Operations.
| Three Months Ended | Nine Months Ended
| September 30, | September 30,
(in millions) | 2023 |  | 2022 | 2023 |  | 2022
Operating revenues | $ | 103 |  |  | $ | 129 |  | $ | 293 |  |  | $ | 372 |
Operation, maintenance and other | 93 |  |  | 85 | 270 |  |  | 248
Depreciation and amortization(a) | — |  |  | 65 | — |  |  | 193
Property and other taxes | 8 |  |  | 10 | 27 |  |  | 31
Other income and expenses, net | (2) |  |  | (1) |  | (9) |  |  | (4) |
Interest expense | 10 |  |  | 18 | 53 |  |  | 55
Loss on disposal | 169 |  |  | — |  | 1,603 |  |  | — |
Loss before income taxes | (179) |  |  | (50) |  | (1,669) |  |  | (159) |
Income tax benefit | (27) |  |  | (30) |  | (353) |  |  | (106) |
Loss from discontinued operations | $ | (152) |  |  | $ | (20) |  | $ | (1,316) |  |  | $ | (53) |
Add: Net (income) loss attributable to noncontrolling interest included in discontinued operations | (38) |  |  | 20 |  | 33 |  |  | 92 |
Net (loss) income from discontinued operations attributable to Duke Energy Corporation | $ | (190) |  |  | $ | — |  | $ | (1,283) |  |  | $ | 39 |
(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 reflected pretax impairments of approximately $1.7 billion as of December 31, 2022, and an incremental pretax impairment of $220 million as of March 31, 2023. The final purchase and sale agreements were signed with Brookfield in June 2023 for the utility-scale solar and wind group and with ArcLight in July 2023 for the distributed generation group, and accordingly, in the second quarter of 2023, pretax impairments of approximately $1.2 billion were recorded to write-down the carrying amount of property, plant and equipment assets to the estimated fair value of the business, based on the expected selling price less estimated costs to sell. Pretax impairments of $169 million were recorded in the third quarter of 2023 reflecting closing-related adjustments for the transactions that closed and ongoing assessment of the estimated fair values of the remaining assets held for sale. The impairments were included in (Loss) Income from Discontinued Operations, net of tax, in Duke Energy's Condensed Consolidated Statements of Operations and Comprehensive Income for the periods presented. The fair value was primarily determined from purchase and sale agreements for the utility scale and distributed generation groups and discounted cash flow analysis for the remainder of the assets. The discounted cash flow model utilized Level 2 and Level 3 inputs. The fair value hierarchy levels are further discussed in Note 12. The impairments for the utility-scale and distributed generation assets were updated based on customary adjustments at closing, and will be updated, if necessary, for any post-closing adjustments. The carrying amounts for the remaining assets will be updated, if necessary, based on final disposition amounts. 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.
| Nine Months Ended
| September 30,
(in millions) | 2023 |  | 2022
Cash flows provided by (used in): |  |  |
Operating activities | $ | 545 |  |  | $ | 485 |
Investing activities | (597) |  |  | (223) |
Other Sale-Related Matters Duke Energy (Parent) and several Duke Energy renewables project companies, located in the ERCOT market, were named in several lawsuits arising out of Texas Storm Uri, which occurred in February 2021. The legal actions related to project companies in this matter transferred to affiliates of Brookfield in conjunction with the transaction closing in October 2023. The plaintiffs have begun to dismiss Duke Energy (parent) from these lawsuits and have represented to the court that they will dismiss Duke Energy (Parent) from all such cases. See Note 5 for more information. As part of the purchase and sale agreement for the distributed generation group, Duke Energy has agreed to retain certain guarantees, with expiration dates between 2029 through 2034, related to tax equity partners' assets and operations that will be disposed of via sale. Duke Energy has obtained certain guarantees from the buyers in regards to future performance obligations to assist in limiting Duke Energy's exposure under the retained guarantees. The fair value of the guarantees is immaterial as Duke Energy does not believe conditions are likely for performance under these guarantees.

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- 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 -Topic 205 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//205-20/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 360 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//360/tableOfContent + Details
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