RELATED PARTY TRANSACTIONS

The Subsidiary Registrants engage in related party transactions in accordance with applicable state and federal commission regulations. Refer to the Condensed Consolidated Balance Sheets of the Subsidiary Registrants for balances due to or due from related parties. Material amounts related to transactions with related parties included in the Condensed Consolidated Statements of Operations and Comprehensive Income are presented in the following table.



	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions)	2016		2015		2016		2015
Duke Energy Carolinas
Corporate governance and shared service expenses^(a)	$	204	$	211	$	620	$	632
Indemnification coverages^(b)	5		6		16		18
JDA revenue^(c)	10		7		21		47
JDA expense^(c)	36		48		127		143
Progress Energy
Corporate governance and shared service expenses^(a)	$	182	$	184	$	515	$	523
Indemnification coverages^(b)	9		10		25		29
JDA revenue^(c)	36		48		127		143
JDA expense^(c)	10		7		21		47
Duke Energy Progress
Corporate governance and shared service expenses^(a)	$	103	$	101	$	292	$	296
Indemnification coverages^(b)	4		4		10		12
JDA revenue^(c)	36		48		127		143
JDA expense^(c)	10		7		21		47
Duke Energy Florida
Corporate governance and shared service expenses^(a)	$	79	$	83	$	223	$	227
Indemnification coverages^(b)	5		6		15		17
Duke Energy Ohio
Corporate governance and shared service expenses^(a)	$	89	$	88	$	261	$	276
Indemnification coverages^(b)	1		1		4		5
Duke Energy Indiana
Corporate governance and shared service expenses^(a)	$	96	$	87	$	279	$	259
Indemnification coverages^(b)	2		2		6		6

(a)

The Subsidiary Registrants are charged their proportionate share of corporate governance and other shared services costs, primarily related to human resources and employee benefits, information technology, legal and accounting fees, as well as other third-party costs. These amounts are recorded in Operation, maintenance and other on the Condensed Consolidated Statements of Operations and Comprehensive Income.


(b)	The Subsidiary Registrants incur expenses related to certain indemnification coverages through Bison, Duke Energy’s wholly owned captive insurance subsidiary. These expenses are recorded in Operation, maintenance and other on the Condensed Consolidated Statements of Operations and Comprehensive Income.

(c)

Duke Energy Carolinas and Duke Energy Progress participate in a JDA which allows the collective dispatch of power plants between the service territories to reduce customer rates. Revenues from the sale of power under the JDA are recorded in Operating Revenues on the Condensed Consolidated Statements of Operations and Comprehensive Income. Expenses from the purchase of power under the JDA are recorded in Fuel used in electric generation and purchased power on the Condensed Consolidated Statements of Operations and Comprehensive Income.

In addition to the amounts presented above, the Subsidiary Registrants record the impact on net income of other affiliate transactions, including rental of office space, participation in a money pool arrangement, other operational transactions and their proportionate share of certain charged expenses. See Note 6 to the Consolidated Financial Statements in the Annual Report on Form 10-K for more information regarding money pool. The net impact of these transactions was not material for the three and nine months ended September 30, 2016 and 2015 for the Subsidiary Registrants.

As discussed in Note 13, certain trade receivables have been sold by Duke Energy Ohio and Duke Energy Indiana to CRC, an affiliate formed by a subsidiary of Duke Energy. The proceeds obtained from the sales of receivables are largely cash but also include a subordinated note from the affiliate for a portion of the purchase price.

Duke Energy Ohio's nonregulated indirect subsidiary, Duke Energy Commercial Asset Management (DECAM), owned generating plants included in the Midwest Generation Disposal Group sold to Dynegy on April 2, 2015. On April 1, 2015, Duke Energy Ohio distributed its indirect ownership interest in DECAM to a Duke Energy subsidiary and non-cash settled DECAM's intercompany loan payable of $294 million. Refer to Note 2 for further information on the sale of the Midwest Generation Disposal Group.

Intercompany Income Taxes

Duke Energy and the Subsidiary Registrants file a consolidated federal income tax return and other state and jurisdictional returns. The Subsidiary Registrants have a tax sharing agreement with Duke Energy for the allocation of consolidated tax liabilities and benefits. Income taxes recorded represent amounts the Subsidiary Registrants would incur as separate C-Corporations. The following table includes the balance of intercompany income tax receivables and payables for the Subsidiary Registrants.



	Duke				Duke		Duke		Duke		Duke
	Energy		Progress		Energy		Energy		Energy		Energy
(in millions)	Carolinas		Energy		Progress		Florida		Ohio		Indiana
September 30, 2016
Intercompany income tax receivable	$	—	$	113	$	56	$	—	$	—	$	67
Intercompany income tax payable	64		—		—		65		27		—

December 31, 2015
Intercompany income tax receivable	$	122	$	120	$	104	$	—	$	54	$	—
Intercompany income tax payable	—		—		—		96		—		47