BUSINESS SEGMENTS

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, as discussed below, includes intercompany revenues and expenses that are eliminated in the Consolidated Financial Statements. Certain governance costs are allocated to each segment. In addition, direct interest expense and income taxes are included in segment income.

Operating segments are determined based on information used by the chief operating decision maker in deciding how to allocate resources and evaluate the performance.

Products and services are sold between affiliate companies and reportable segments of Duke Energy at cost. Segment assets as presented in the tables that follow exclude all intercompany assets.

Duke Energy

Duke Energy has the following reportable operating segments: Regulated Utilities, International Energy and Commercial Power.

Regulated Utilities conducts operations primarily through Duke Energy Carolinas, Duke Energy Progress, Duke Energy Florida, Duke Energy Indiana, and the regulated transmission and distribution operations of Duke Energy Ohio. These electric and natural gas operations are subject to the rules and regulations of the FERC, NCUC, PSCSC, FPSC, PUCO, IURC and KPSC. Substantially all of Regulated Utilities’ operations are regulated and, accordingly, these operations qualify for regulatory accounting treatment.

International Energy principally operates and manages power generation facilities and engages in sales and marketing of electric power, natural gas and natural gas liquids outside the U.S. Its activities principally target power generation in Latin America. Additionally, International Energy owns a 25 percent interest in National Methanol Company (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.

Commercial Power builds, develops and operates renewable generation and energy transmission projects throughout the continental U.S. As discussed in Note 2, Duke Energy entered into an agreement to sell Commercial Power's nonregulated Midwest generation business to Dynegy in a transaction that is expected to close during the second quarter of 2015. As a result of this divestiture, the results of operations of the nonregulated Midwest generation business have been reclassified to Discontinued Operations on the Consolidated Statements of Operations. Certain costs such as interest and general and administrative expenses previously allocated to the Disposal Group were not reclassified to discontinued operations.

The remainder of Duke Energy’s operations is presented as Other. While it is not an operating segment, Other primarily includes unallocated corporate interest expense, certain unallocated corporate costs, Bison Insurance Company Limited (Bison), Duke Energy’s wholly owned, captive insurance subsidiary, and contributions to the Duke Energy Foundation. On December 31, 2013, Duke Energy sold its interest in DukeNet Communications Holdings, LLC (DukeNet) to Time Warner Cable, Inc.



	Year Ended December 31, 2014
(in millions)	Regulated Utilities			International Energy		Commercial Power			Total Reportable Segments		Other			Eliminations			Total
Unaffiliated Revenues	$	22,228		$	1,417	$	255		$	23,900	$	25		$	—		$	23,925
Intersegment Revenues	43			—		—			43		80			(123		)	—
Total Revenues	$	22,271		$	1,417	$	255		$	23,943	$	105		$	(123	)	$	23,925
Interest Expense	$	1,093		$	93	$	58		$	1,244	$	400		$	(22	)	$	1,622
Depreciation and amortization	2,759			97		92			2,948		118			—			3,066
Equity in earnings of unconsolidated affiliates	(3		)	120		10			127		3			—			130
Income tax expense (benefit)^(a)	1,628			449		(171		)	1,906		(237		)	—			1,669
Segment income^(b)(c)(d)	2,795			55		(55		)	2,795		(334		)	(10		)	2,451
Add back noncontrolling interest component																	14
Loss from discontinued operations, net of tax																	(576		)
Net income																	$	1,889
Capital investments expenditures and acquisitions	$	4,744		$	67	$	555		$	5,366	$	162		$	—		$	5,528
Segment Assets	106,657			5,132		6,278			118,067		2,453			189			120,709


(a)	International Energy includes a tax adjustment of $373 million related to deferred tax impact resulting from the decision to repatriate all cumulative historical undistributed foreign earnings. See Note 22 for additional information.


(b)	Commercial Power recorded a pretax impairment charge of $94 million related to OVEC. See Note 11 for additional information.


(c)	Other includes costs to achieve the Progress Energy merger. See Notes 2 and 25 for additional information about the merger and related costs.


(d)	Regulated Utilities includes an increase in the litigation reserve related to the criminal investigation of the Dan River coal ash spill. See Note 5 for additional information.



	Year Ended December 31, 2013
(in millions)	Regulated Utilities			International Energy		Commercial Power			Total Reportable Segments		Other			Eliminations			Total
Unaffiliated Revenues^(a)(b)(c)	$	20,871		$	1,546	$	254		$	22,671	$	85		$	—		$	22,756
Intersegment Revenues	39			—		6			45		90			(135		)	—
Total Revenues	$	20,910		$	1,546	$	260		$	22,716	$	175		$	(135	)	$	22,756
Interest Expense	$	986		$	86	$	61		$	1,133	$	416		$	(6	)	$	1,543
Depreciation and amortization	2,323			100		110			2,533		135			—			2,668
Equity in earnings of unconsolidated affiliates	(1		)	110		7			116		6			—			122
Income tax expense (benefit)	1,522			166		(148		)	1,540		(335		)	—			1,205
Segment income ^{(a)(b)(c)(d)(e)(f)(g)}	2,504			408		(88		)	2,824		(238		)	(12		)	2,574
Add back noncontrolling interest component																	16
Income from discontinued operations, net of tax																	86
Net income																	$	2,676
Capital investments expenditures and acquisitions	$	5,049		$	67	$	268		$	5,384	$	223		$	—		$	5,607
Segment Assets	99,884			4,998		6,955			111,837		2,754			188			114,779


(a)	In May 2013, the PUCO approved a Duke Energy Ohio settlement agreement that provides for a net annual increase in electric distribution revenues beginning in May 2013. This rate increase impacts Regulated Utilities. See Note 4 for additional information.


(b)	In June 2013, NCUC approved a Duke Energy Progress settlement agreement that included an increase in rates in the first year beginning in June 2013. This rate increase impacts Regulated Utilities. See Note 4 for additional information.


(c)	In September 2013, Duke Energy Carolinas implemented revised customer rates approved by the NCUC and the PSCSC. These rate increases impact Regulated Utilities. See Note 4 for additional information.


(d)	Regulated Utilities recorded an impairment charge related to Duke Energy Florida's Crystal River Unit 3. See Note 4 for additional information.

(e)

Regulated Utilities recorded an impairment charge related to the letter Duke Energy Progress filed with the NRC requesting the NRC to suspend its review activities associated with the combined construction and operating license (COL) at the Harris site. Regulated Utilities also recorded an impairment charge related to the write-off of the wholesale portion of the Levy investments at Duke Energy Florida in accordance with the 2013 Settlement. See Note 4 for additional information.


(f)	Other includes costs to achieve the Progress Energy merger. See Notes 2 and 25 for additional information about the merger and related costs.


(g)	Other includes gain from the sale of Duke Energy's ownership interest in DukeNet. See Note 12 for additional information on the sale of DukeNet.



	Year Ended December 31, 2012
(in millions)	Regulated Utilities			International Energy		Commercial Power			Reportable Segments		Other			Eliminations			Total
Unaffiliated Revenues	$	16,042		$	1,549	$	299		$	17,890	$	22		$	—		$	17,912
Intersegment Revenues	38			—		8			46		62			(108		)	—
Total Revenues	$	16,080		$	1,549	$	307		$	17,936	$	84		$	(108	)	$	17,912
Interest Expense	$	806		$	77	$	63		$	946	$	298		$	—		$	1,244
Depreciation and amortization	1,827			99		85			2,011		134			—			2,145
Equity in earnings of unconsolidated affiliates	(5		)	134		14			143		5			—			148
Income tax expense (benefit)	942			149		(82		)	1,009		(386		)	—			623
Segment income ^(a)(b)	1,744			439		(59		)	2,124		(523		)	(8		)	1,593
Add back noncontrolling interest component																	18
Income from discontinued operations, net of tax																	171
Net income																	$	1,782
Capital investments expenditures and acquisitions	$	4,220		$	551	$	1,038		$	5,809	$	149		$	—		$	5,958
Segment Assets	98,162			5,406		6,992			110,560		3,126			170			113,856


(a)	Regulated Utilities recorded charges related to Duke Energy Indiana's Integrated Gasification Combined Cycle

(IGCC) project. See Note 4 for additional information about these charges. Regulated Utilities also recorded the reversal of expenses of $60 million, net of tax, related to a prior year Voluntary Opportunity Plan in accordance with Duke Energy Carolinas' 2011 rate case. See Note 19 for additional information about these expenses.


(b)	Other includes costs to achieve the Progress Energy merger. See Notes 2 and 25 for additional information about the merger and related costs.

Geographical Information



(in millions)	U.S.		Latin America^(a)		Consolidated
2014
Consolidated revenues	$	22,508	$	1,417	$	23,925
Consolidated long-lived assets	80,709		2,458		83,167
2013
Consolidated revenues	$	21,211	$	1,545	$	22,756
Consolidated long-lived assets	78,581		2,781		81,362
2012
Consolidated revenues	$	16,366	$	1,546	$	17,912
Consolidated long-lived assets	79,144		2,467		81,611


(a)	Change in amounts of long-lived assets in Latin America includes foreign currency translation adjustments on property, plant and equipment and other long-lived asset balances.

Products and Services



(in millions)	Retail Electric		Wholesale Electric		Retail Natural Gas		Wholesale Natural Gas		Other		Total Revenues
2014
Regulated Utilities	$	19,007	$	1,879	$	571	$	—	$	814	$	22,271
International Energy	—		1,326		—		91		—		1,417
Commercial Power	—		255		—		—		—		255
Total Reportable Segments	$	19,007	$	3,460	$	571	$	91	$	814	$	23,943
2013
Regulated Utilities	$	17,837	$	1,720	$	506	$	—	$	847	$	20,910
International Energy	—		1,447		—		99		—		1,546
Commercial Power	—		260		—		—		—		260
Total Reportable Segments	$	17,837	$	3,427	$	506	$	99	$	847	$	22,716
2012
Regulated Utilities	$	13,773	$	1,120	$	470	$	—	$	717	$	16,080
International Energy	—		1,444		—		105		—		1,549
Commercial Power	—		307		—		—		—		307
Total Reportable Segments	$	13,773	$	2,871	$	470	$	105	$	717	$	17,936

Duke Energy Ohio

Duke Energy Ohio has two reportable operating segments, Regulated Utilities and Commercial Power.

Regulated Utilities transmits and distributes electricity in portions of Ohio and generates, distributes and sells electricity in portions of Kentucky. Regulated Utilities also 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.

As discussed in Note 2, Duke Energy entered into an agreement to sell Commercial Power's nonregulated Midwest generation business to Dynegy in a transaction that is expected to close in the second quarter of 2015. As a result of this divestiture, the results of operations of the nonregulated Midwest generation business have been reclassified to Discontinued Operations on the Consolidated Statements of Operations and Comprehensive Income. Amounts remaining in Commercial Power relate to assets not included in the Disposal Group. Certain costs such as interest and general and administrative expenses previously allocated to the Disposal Group were not reclassified to discontinued operations.

The remainder of Duke Energy Ohio’s operations is presented as Other. While it is not considered an operating segment, Other primarily includes certain governance costs allocated by its parent, Duke Energy. See Note 13 for additional information. All of Duke Energy Ohio’s revenues are generated domestically and its long-lived assets are all in the U.S.



	Year Ended December 31, 2014
(in millions)	Regulated Utilities		Commercial Power			Total Reportable Segments		Other			Eliminations			Total
Unaffiliated revenues	$	1,894	$	19		$	1,913	$	—		$	—		$	1,913
Intersegment revenues	1		—			1		—			(1		)	—
Total revenues	$	1,895	$	19		$	1,914	$	—		$	(1	)	$	1,913
Interest expense	$	81	$	5		$	86	$	—		$	—		$	86
Depreciation and amortization	211		2			213		1			—			214
Income tax expense (benefit)	117		(67		)	50		(7		)	—			43
Segment income (loss)^(a)	202		(121		)	81		(13		)	—			68
Income from discontinued operations, net of tax														(563		)
Net loss														$	(495	)
Capital expenditures	$	300	$	22		$	322	$	—		$	—		$	322
Segment assets	6,908		3,187			10,095		134			(230		)	9,999


(a)	Commercial Power recorded a pretax impairment charge of $94 million related to OVEC. See Note 11 for additional information.



	Year Ended December 31, 2013
(in millions)	Regulated Utilities		Commercial Power			Total Reportable Segments		Other			Eliminations			Total
Unaffiliated revenues	$	1,765	$	40		$	1,805	$	—		$	—		$	1,805
Total revenues	$	1,765	$	40		$	1,805	$	—		$	—		$	1,805
Interest expense	$	74	$	—		$	74	$	—		$	—		$	74
Depreciation and amortization	200		13			213		—			—			213
Income tax expense (benefit)	91		(36		)	55		(12		)	—			43
Segment income (loss)	151		(65		)	86		(19		)	—			67
Income from discontinued operations, net of tax														35
Net income														$	102
Capital expenditures	$	375	$	58		$	433	$	—		$	—		$	433
Segment assets	6,649		4,170			10,819		99			(155		)	10,763



	Year Ended December 31, 2012
(in millions)	Regulated Utilities		Commercial Power			Total Reportable Segments		Other			Eliminations			Total
Unaffiliated revenues	$	1,745	$	75		$	1,820	$	—		$	—		$	1,820
Intersegment revenues	1		1			2		—			(2		)	—
Total revenues	$	1,746	$	76		$	1,822	$	—		$	(2	)	$	1,820
Interest expense	$	61	$	28		$	89	$	—		$	—		$	89
Depreciation and amortization	179		16			195		—			—			195
Income tax expense (benefit)	91		(40		)	51		(18		)	—			33
Segment income (loss)	159		(80		)	79		(34		)	—			45
Income from discontinued operations, net of tax														130
Net income														$	175
Capital expenditures	$	427	$	87		$	514	$	—		$	—		$	514
Segment assets	6,434		4,175			10,609		117			(166		)	10,560

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

Duke Energy Carolinas, Progress Energy, Duke Energy Progress, Duke Energy Florida and Duke Energy Indiana each have one reportable operating segment, Regulated Utility, 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 $241 million, $300 million and $304 million for the years ended December 31, 2014, 2013 and 2012. The following table summarizes the net loss for Other for each of these entities.



	Years Ended December 31,
(in millions)	2014			2013			2012
Duke Energy Carolinas	$	(79	)	$	(97	)	$	(169	)
Progress Energy	(190		)	(241		)	(379		)
Duke Energy Progress	(31		)	(46		)	(139		)
Duke Energy Florida	(19		)	(24		)	(58		)
Duke Energy Indiana	(11		)	(16		)	(27		)

Duke Energy Progress earned approximately 11 percent of its consolidated operating revenues from North Carolina Electric Membership Corporation (NCEMC) in 2014. These revenues relate to wholesale contracts and transmission revenues. The respective Regulated Utility and Regulated Utilities operating segments own substantially all of Duke Energy Carolinas’, Progress Energy’s, Duke Energy Progress’, Duke Energy Florida’s and Duke Energy Indiana’s assets at December 31, 2014, 2013 and 2012.