BUSINESS SEGMENTS

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

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's segment structure includes the following segments: Electric Utilities and Infrastructure, Gas Utilities and Infrastructure and Commercial Renewables.

The Electric Utilities and Infrastructure segment includes Duke Energy's regulated electric utilities in the Carolinas, Florida and the Midwest. The regulated electric utilities conduct operations through the Subsidiary Registrants that are substantially all regulated and, accordingly, qualify for regulatory accounting treatment. Electric Utilities and Infrastructure also includes Duke Energy's commercial electric transmission infrastructure investments.

The Gas Utilities and Infrastructure segment includes Piedmont, Duke Energy's natural gas local distribution companies in Ohio and Kentucky, and Duke Energy's natural gas storage and midstream pipeline investments. Gas Utilities and Infrastructure's operations are substantially all regulated and, accordingly, qualify for regulatory accounting treatment.

The Commercial Renewables segment is primarily comprised of nonregulated utility scale wind and solar generation assets located throughout the U.S.

The remainder of Duke Energy’s operations is presented as Other, which is primarily comprised of corporate interest expense, unallocated corporate costs, contributions to the Duke Energy Foundation and the operations of Duke Energy’s wholly owned captive insurance subsidiary, Bison Insurance Company Limited (Bison). Other also includes Duke Energy's interest in NMC. See Note 12 for additional information on the investment in NMC.

Business segment information is presented in the following tables. Segment assets presented exclude intercompany assets.



	Year Ended December 31, 2017
	Electric		Gas					Total
	Utilities and		Utilities and		Commercial			Reportable
(in millions)	Infrastructure		Infrastructure		Renewables			Segments		Other			Eliminations			Total
Unaffiliated Revenues	$	21,300	$	1,743	$	460		$	23,503	$	62		$	—		$	23,565
Intersegment Revenues	31		93		—			124		76			(200		)	—
Total Revenues	$	21,331	$	1,836	$	460		$	23,627	$	138		$	(200	)	$	23,565
Interest Expense	$	1,240	$	105	$	87		$	1,432	$	574		$	(20	)	$	1,986
Depreciation and amortization	3,010		231		155			3,396		131			—			3,527
Equity in earnings (losses) of unconsolidated affiliates	5		62		(5		)	62		57			—			119
Income tax expense (benefit)^(a)	1,355		116		(628		)	843		353			—			1,196
Segment income (loss)^(b)(c)(d)	3,210		319		441			3,970		(905		)	—			3,065
Add back noncontrolling interest component																5
Loss from discontinued operations, net of tax																(6		)
Net income																$	3,064
Capital investments expenditures and acquisitions	$	7,024	$	907	$	92		$	8,023	$	175		$	—		$	8,198
Segment assets	119,423		11,462		4,156			135,041		2,685			188			137,914


(a)	All segments include impacts of the Tax Cuts and Jobs Act (the Tax Act). Electric Utilities and Infrastructure includes a $231 million benefit, Gas Utilities and Infrastructure includes a $26 million benefit, Commercial Renewables includes a $442 million benefit and Other includes charges of $597 million.


(b)	Electric Utilities and Infrastructure includes after-tax regulatory settlement charges of $98 million. See Note 4 for additional information.


(c)	Commercial Renewables includes after-tax impairment charges of $74 million related to certain wind projects and the Energy Management Solutions reporting unit. See Notes 10 and 11 for additional information.


(d)	Other includes $64 million of after-tax costs to achieve the Piedmont merger. See Note 2 for additional information.



	Year Ended December 31, 2016
	Electric		Gas					Total
	Utilities and		Utilities and		Commercial			Reportable
(in millions)	Infrastructure		Infrastructure		Renewables			Segments			Other			Eliminations			Total
Unaffiliated Revenues	$	21,336	$	875	$	484		$	22,695		$	48		$	—		$	22,743
Intersegment Revenues	30		26		—			56			69			(125		)	—
Total Revenues	$	21,366	$	901	$	484		$	22,751		$	117		$	(125	)	$	22,743
Interest Expense	$	1,136	$	46	$	53		$	1,235		$	693		$	(12	)	$	1,916
Depreciation and amortization	2,897		115		130			3,142			152			—			3,294
Equity in earnings (losses) of unconsolidated affiliates^(a)	5		19		(82		)	(58		)	43			—			(15		)
Income tax expense (benefit)	1,672		90		(160		)	1,602			(446		)	—			1,156
Segment income (loss)^(b)(c)	3,040		152		23			3,215			(645		)	1			2,571
Add back noncontrolling interest component																	7
Loss from discontinued operations, net of tax^(d)																	(408		)
Net income																	$	2,170
Capital investments expenditures and acquisitions^(e)	$	6,649	$	5,519	$	857		$	13,025		$	190		$	—		$	13,215
Segment assets	114,993		10,760		4,377			130,130			2,443			188			132,761

(a) Commercial Renewables includes a pretax impairment charge of $71 million. See Note 12 for additional information.


(b)	Other includes $329 million of after-tax costs to achieve mergers. Refer to Note 2 for additional information on costs related to the Piedmont merger.


(c)	Other includes after-tax charges of $57 million related to cost savings initiatives. Refer to Note 19 for further information.


(d)	Includes a loss on sale of the International Disposal Group. Refer to Note 2 for further information.


(e)	Other includes $26 million of capital investments expenditures related to the International Disposal Group. Gas Utilities and Infrastructure includes the Piedmont acquisition of $5 billion. Refer to Note 2 for more information on the Piedmont acquisition.



	Year Ended December 31, 2015
	Electric			Gas					Total
	Utilities and			Utilities and		Commercial			Reportable
(in millions)	Infrastructure			Infrastructure		Renewables			Segments			Other			Eliminations			Total
Unaffiliated Revenues	$	21,489		$	536	$	286		$	22,311		$	60		$	—		$	22,371
Intersegment Revenues	32			5		—			37			75			(112		)	—
Total Revenues	$	21,521		$	541	$	286		$	22,348		$	135		$	(112	)	$	22,371
Interest Expense	$	1,074		$	25	$	44		$	1,143		$	393		$	(9	)	$	1,527
Depreciation and amortization	2,735			79		104			2,918			135			—			3,053
Equity in (losses) earnings of unconsolidated affiliates	(2		)	1		(6		)	(7		)	76			—			69
Income tax expense (benefit)	1,602			44		(128		)	1,518			(262		)	—			1,256
Segment income (loss)^(a)(b)(c)	2,819			73		52			2,944			(299		)	—			2,645
Add back noncontrolling interest component																		9
Income from discontinued operations, net of tax^(d)																		177
Net income																		$	2,831
Capital investments expenditures and acquisitions^(e)	$	6,852		$	234	$	1,019		$	8,105		$	258		$	—		$	8,363
Segment assets^(f)	109,097			2,637		3,861			115,595			5,373			188			121,156


(a)	Electric Utilities and Infrastructure includes an after-tax charge of $58 million related to the Edwardsport settlement. Refer to Note 4 for further information.


(b)	Other includes $60 million of after-tax costs to achieve mergers.


(c)	Other includes after-tax charges of $77 million related to cost savings initiatives. Refer to Note 19 for further information.


(d)	Includes the impact of a settlement agreement reached in a lawsuit related to the Midwest Generation Disposal Group. Refer to Note 5 for further information related to the lawsuit and Note 2 for further information on discontinued operations.


(e)	Other includes capital investment expenditures of $45 million related to the International Disposal Group.


(f)	Other includes Assets Held for Sale balances related to the International Disposal Group. Refer to Note 2 for further information.

Geographical Information

For the years ended December 31, 2017, 2016 and 2015, all assets and revenues from continuing operations are within the U.S.

Major Customers

For the year ended December 31, 2017, revenues from one customer of Duke Energy Progress are $521 million. Duke Energy Progress has one reportable segment, Electric Utilities and Infrastructure. No other subsidiary registrant has an individual customer representing more than 10 percent of its revenues.

Products and Services

The following table summarizes revenues of the reportable segments by type.



	Retail		Wholesale		Retail					Total
(in millions)	Electric		Electric		Natural Gas		Other			Revenues
2017
Electric Utilities and Infrastructure	$	18,177	$	2,104	$	—	$	1,050		$	21,331
Gas Utilities and Infrastructure	—		—		1,732		104			1,836
Commercial Renewables	—		375		—		85			460
Total Reportable Segments	$	18,177	$	2,479	$	1,732	$	1,239		$	23,627
2016
Electric Utilities and Infrastructure	$	18,338	$	2,095	$	—	$	933		$	21,366
Gas Utilities and Infrastructure	—		—		871		30			901
Commercial Renewables	—		303		—		181			484
Total Reportable Segments	$	18,338	$	2,398	$	871	$	1,144		$	22,751
2015
Electric Utilities and Infrastructure	$	18,695	$	2,014	$	—	$	812		$	21,521
Gas Utilities and Infrastructure	—		—		546		(5		)	541
Commercial Renewables	—		245		—		41			286
Total Reportable Segments	$	18,695	$	2,259	$	546	$	848		$	22,348

Duke Energy Ohio

Duke Energy Ohio has two reportable operating segments, Electric Utilities and Infrastructure and Gas Utilities and Infrastructure.

Electric Utilities and Infrastructure transmits and distributes electricity in portions of Ohio and generates, distributes and sells electricity in portions of Northern Kentucky. Gas Utilities and Infrastructure 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.

The remainder of Duke Energy Ohio's operations is presented as Other, which is primarily comprised of governance costs allocated by its parent, Duke Energy, and revenues and expenses related to Duke Energy Ohio's contractual arrangement to buy power from OVEC's (Ohio Valley Electric Corporation) power plants. See Note 13 for additional information on related party transactions. For the years ended December 31, 2017, 2016 and 2015, all Duke Energy Ohio assets and revenues are within the U.S.



	Year Ended December 31, 2017
	Electric		Gas		Total
	Utilities and		Utilities and		Reportable
(in millions)	Infrastructure		Infrastructure		Segments		Other			Eliminations			Total
Total revenues	$	1,373	$	508	$	1,881	$	42		$	—		$	1,923
Interest expense	$	62	$	28	$	90	$	1		$	—		$	91
Depreciation and amortization	178		83		261		$	—		—			261
Income tax expense (benefit)	40		39		79		$	(20	)	—			59
Segment income (loss)	138		85		223		$	(30	)	—			193
Loss from discontinued operations, net of tax													(1		)
Net income													$	192
Capital expenditures	$	491	$	195	$	686	$	—		$	—		$	686
Segment assets	5,066		2,758		7,824		66			(15		)	7,875



	Year Ended December 31, 2016
	Electric		Gas		Total
	Utilities and		Utilities and		Reportable
(in millions)	Infrastructure		Infrastructure		Segments		Other			Eliminations			Total
Total revenues	$	1,410	$	503	$	1,913	$	31		$	—		$	1,944
Interest expense	$	58	$	27	$	85	$	1		$	—		$	86
Depreciation and amortization	151		80		231		2			—			233
Income tax expense (benefit)	55		44		99		(21		)	—			78
Segment income (loss)	154		77		231		(39		)	—			192
Income from discontinued operations, net of tax													36
Net income													$	228
Capital expenditures	$	322	$	154	$	476	$	—		$	—		$	476
Segment assets	4,782		2,696		7,478		62			(12		)	7,528



	Year Ended December 31, 2015
	Electric		Gas		Total
	Utilities and		Utilities and		Reportable
(in millions)	Infrastructure		Infrastructure		Segments		Other			Eliminations			Total
Total revenues	$	1,331	$	541	$	1,872	$	33		$	—		$	1,905
Interest expense	$	53	$	25	$	78	$	1		$	—		$	79
Depreciation and amortization	147		79		226		1			—			227
Income tax expense (benefit)	59		45		104		(23		)	—			81
Segment income (loss)	118		73		191		(41		)	(1		)	149
Income from discontinued operations, net of tax													23
Net income													$	172
Capital expenditures	$	264	$	135	$	399	$	—		$	—		$	399
Segment assets	4,534		2,516		7,050		56			(9		)	7,097