INVESTMENTS IN DEBT AND EQUITY SECURITIES

The Duke Energy Registrants classify their investments in debt and equity securities as either trading or available-for-sale.

TRADING SECURITIES

Piedmont's investments in debt and equity securities held in rabbi trusts associated with certain deferred compensation plans are classified as trading securities. The fair value of these investments was $1 million and $5 million as of September 30, 2017, and December 31, 2016, respectively.

AVAILABLE-FOR-SALE (AFS) SECURITIES

All other investments in debt and equity securities are classified as AFS.

Duke Energy’s available-for-sale securities are primarily comprised of investments held in (i) the nuclear decommissioning trust fund (NDTF) at Duke Energy Carolinas, Duke Energy Progress and Duke Energy Florida, (ii) grantor trusts at Duke Energy Progress, Duke Energy Florida and Duke Energy Indiana related to Other Post-Retirement Benefit Obligations (OPEB) plans and (iii) Bison.

Duke Energy classifies all other investments in debt and equity securities as long term, unless otherwise noted.

Investment Trusts

The investments within the NDTF investments and the Duke Energy Progress, Duke Energy Florida and Duke Energy Indiana grantor trusts (Investment Trusts) are managed by independent investment managers with discretion to buy, sell and invest pursuant to the objectives set forth by the trust agreements. The Duke Energy Registrants have limited oversight of the day-to-day management of these investments. As a result, the ability to hold investments in unrealized loss positions is outside the control of the Duke Energy Registrants. Accordingly, all unrealized losses associated with debt and equity securities within the Investment Trusts are considered other-than-temporary impairments (OTTIs) and are recognized immediately.

Investments within the Investment Trusts generally qualify for regulatory accounting, and accordingly realized and unrealized gains and losses are deferred as a regulatory asset or liability.

Substantially all amounts of the Duke Energy Registrants' gross unrealized holding losses as of September 30, 2017, and December 31, 2016, are considered OTTIs on investments within Investment Trusts that have been recognized immediately as a regulatory asset.

Other AFS Securities

Unrealized gains and losses on all other AFS securities are included in other comprehensive income until realized, unless it is determined the carrying value of an investment is other-than-temporarily impaired. The Duke Energy Registrants analyze all investment holdings each reporting period to determine whether a decline in fair value should be considered other-than-temporary. If an OTTI exists, the unrealized credit loss is included in earnings. There were no material credit losses as of September 30, 2017, and December 31, 2016.

Other Investments amounts are recorded in Other within Other Noncurrent Assets on the Condensed Consolidated Balance Sheets.

DUKE ENERGY

The following table presents the estimated fair value of investments in AFS securities.



	September 30, 2017						December 31, 2016
	Gross		Gross				Gross		Gross
	Unrealized		Unrealized		Estimated		Unrealized		Unrealized		Estimated
	Holding		Holding		Fair		Holding		Holding		Fair
(in millions)	Gains		Losses		Value		Gains		Losses		Value
NDTF
Cash and cash equivalents	$	—	$	—	$	129	$	—	$	—	$	111
Equity securities	2,549		28		4,627		2,092		54		4,106
Corporate debt securities	16		2		600		10		8		528
Municipal bonds	5		2		334		3		10		331
U.S. government bonds	10		4		984		10		8		984
Other debt securities	—		1		120		—		3		124
Total NDTF	$	2,580	$	37	$	6,794	$	2,115	$	83	$	6,184
Other Investments
Cash and cash equivalents	$	—	$	—	$	15	$	—	$	—	$	25
Equity securities	52		—		115		38		—		104
Corporate debt securities	1		—		64		1		1		66
Municipal bonds	3		1		83		2		1		82
U.S. government bonds	—		—		44		—		1		51
Other debt securities	—		—		37		—		2		42
Total Other Investments	$	56	$	1	$	358	$	41	$	5	$	370
Total Investments	$	2,636	$	38	$	7,152	$	2,156	$	88	$	6,554

The table below summarizes the maturity date for debt securities.



(in millions)	September 30, 2017
Due in one year or less	$	92
Due after one through five years	584
Due after five through 10 years	514
Due after 10 years	1,076
Total	$	2,266

Realized gains and losses, which were determined on a specific identification basis, from sales of AFS securities were as follows.



	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in millions)	2017		2016		2017		2016
Realized gains	$	37	$	82	$	170	$	200
Realized losses	25		42		124		134

DUKE ENERGY CAROLINAS

The following table presents the estimated fair value of investments in AFS securities.



	September 30, 2017						December 31, 2016
	Gross		Gross				Gross		Gross
	Unrealized		Unrealized		Estimated		Unrealized		Unrealized		Estimated
	Holding		Holding		Fair		Holding		Holding		Fair
(in millions)	Gains		Losses		Value		Gains		Losses		Value
NDTF
Cash and cash equivalents	$	—	$	—	$	34	$	—	$	—	$	18
Equity securities	1,395		14		2,553		1,157		28		2,245
Corporate debt securities	9		2		395		5		6		354
Municipal bonds	1		—		52		1		2		67
U.S. government bonds	3		3		466		2		5		458
Other debt securities	—		1		113		—		3		116
Total NDTF	$	1,408	$	20	$	3,613	$	1,165	$	44	$	3,258
Other Investments
Other debt securities	—		—		—		—		1		3
Total Investments	$	1,408	$	20	$	3,613	$	1,165	$	45	$	3,261

The table below summarizes the maturity date for debt securities.



(in millions)	September 30, 2017
Due in one year or less	$	5
Due after one through five years	218
Due after five through 10 years	264
Due after 10 years	539
Total	$	1,026

Realized gains and losses, which were determined on a specific identification basis, from sales of AFS securities were as follows.



	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in millions)	2017		2016		2017		2016
Realized gains	$	20	$	58	$	110	$	125
Realized losses	13		28		76		84

PROGRESS ENERGY

The following table presents the estimated fair value of investments in AFS securities.



	September 30, 2017						December 31, 2016
	Gross		Gross				Gross		Gross
	Unrealized		Unrealized		Estimated		Unrealized		Unrealized		Estimated
	Holding		Holding		Fair		Holding		Holding		Fair
(in millions)	Gains		Losses		Value		Gains		Losses		Value
NDTF
Cash and cash equivalents	$	—	$	—	$	95	$	—	$	—	$	93
Equity securities	1,154		14		2,074		935		26		1,861
Corporate debt securities	7		—		205		5		2		174
Municipal bonds	4		2		282		2		8		264
U.S. government bonds	7		1		518		8		3		526
Other debt securities	—		—		7		—		—		8
Total NDTF	$	1,172	$	17	$	3,181	$	950	$	39	$	2,926
Other Investments
Cash and cash equivalents	$	—	$	—	$	11	$	—	$	—	$	21
Municipal bonds	3		—		47		2		—		44
Total Other Investments	$	3	$	—	$	58	$	2	$	—	$	65
Total Investments	$	1,175	$	17	$	3,239	$	952	$	39	$	2,991

The table below summarizes the maturity date for debt securities.



(in millions)	September 30, 2017
Due in one year or less	$	74
Due after one through five years	309
Due after five through 10 years	194
Due after 10 years	482
Total	$	1,059

Realized gains and losses, which were determined on a specific identification basis, from sales of AFS securities were as follows.



	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in millions)	2017		2016		2017		2016
Realized gains	$	16	$	21	$	58	$	71
Realized losses	12		13		47		49

DUKE ENERGY PROGRESS

The following table presents the estimated fair value of investments in AFS securities.



	September 30, 2017						December 31, 2016
	Gross		Gross				Gross		Gross
	Unrealized		Unrealized		Estimated		Unrealized		Unrealized		Estimated
	Holding		Holding		Fair		Holding		Holding		Fair
(in millions)	Gains		Losses		Value		Gains		Losses		Value
NDTF
Cash and cash equivalents	$	—	$	—	$	46	$	—	$	—	$	45
Equity securities	882		11		1,683		704		21		1,505
Corporate debt securities	5		—		144		4		1		120
Municipal bonds	4		2		281		2		8		263
U.S. government bonds	5		1		303		5		2		275
Other debt securities	—		—		4		—		—		5
Total NDTF	$	896	$	14	$	2,461	$	715	$	32	$	2,213
Other Investments
Cash and cash equivalents	$	—	$	—	$	1	$	—	$	—	$	1
Total Investments	$	896	$	14	$	2,462	$	715	$	32	$	2,214

The table below summarizes the maturity date for debt securities.



(in millions)	September 30, 2017
Due in one year or less	$	16
Due after one through five years	209
Due after five through 10 years	136
Due after 10 years	371
Total	$	732

Realized gains and losses, which were determined on a specific identification basis, from sales of AFS securities were as follows.



	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in millions)	2017		2016		2017		2016
Realized gains	$	14	$	18	$	49	$	60
Realized losses	11		11		41		42

DUKE ENERGY FLORIDA

The following table presents the estimated fair value of investments in AFS securities.



	September 30, 2017						December 31, 2016
	Gross		Gross				Gross		Gross
	Unrealized		Unrealized		Estimated		Unrealized		Unrealized		Estimated
	Holding		Holding		Fair		Holding		Holding		Fair
(in millions)	Gains		Losses		Value		Gains		Losses		Value
NDTF
Cash and cash equivalents	$	—	$	—	$	49	$	—	$	—	$	48
Equity securities	272		3		391		231		5		356
Corporate debt securities	2		—		61		1		1		54
Municipal bonds	—		—		1		—		—		1
U.S. government bonds	2		—		215		3		1		251
Other debt securities	—		—		3		—		—		3
Total NDTF^(a)	$	276	$	3	$	720	$	235	$	7	$	713
Other Investments
Cash and cash equivalents	$	—	$	—	$	—	$	—	$	—	$	4
Municipal bonds	3		—		47		2		—		44
Total Other Investments	$	3	$	—	$	47	$	2	$	—	$	48
Total Investments	$	279	$	3	$	767	$	237	$	7	$	761


(a)	During the nine months ended September 30, 2017, Duke Energy Florida continued to receive reimbursements from the NDTF for costs related to ongoing decommissioning activity of the Crystal River Unit 3 nuclear plant.

The table below summarizes the maturity date for debt securities.



(in millions)	September 30, 2017
Due in one year or less	$	58
Due after one through five years	100
Due after five through 10 years	58
Due after 10 years	111
Total	$	327

Realized gains and losses, which were determined on a specific identification basis, from sales of AFS securities were as follows.



	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in millions)	2017		2016		2017		2016
Realized gains	$	2	$	3	$	9	$	11
Realized losses	1		2		6		7

DUKE ENERGY INDIANA

The following table presents the estimated fair value of investments in AFS securities.



	September 30, 2017						December 31, 2016
	Gross		Gross				Gross		Gross
	Unrealized		Unrealized		Estimated		Unrealized		Unrealized		Estimated
	Holding		Holding		Fair		Holding		Holding		Fair
(in millions)	Gains		Losses		Value		Gains		Losses		Value
Investments
Equity securities	$	44	$	—	$	91	$	33	$	—	$	79
Corporate debt securities	—		—		3		—		—		2
Municipal bonds	—		1		28		—		1		28
U.S. government bonds	—		—		—		—		—		1
Total Investments	$	44	$	1	$	122	$	33	$	1	$	110

The table below summarizes the maturity date for debt securities.



(in millions)	September 30, 2017
Due in one year or less	$	4
Due after one through five years	12
Due after five through 10 years	8
Due after 10 years	7
Total	$	31

Realized gains and losses, which were determined on a specific identification basis, from sales of AFS securities were insignificant for the three and nine months ended September 30, 2017, and 2016.