Investments in Debt and Equity Securities

12 Months Ended

Dec. 31, 2019

Investments, Debt and Equity Securities [Abstract]

Investments in Debt and Equity Securities

INVESTMENTS IN DEBT AND EQUITY SECURITIES

Duke Energy's investments in debt and equity securities are primarily comprised of investments held in (i) the NDTF at Duke Energy Carolinas, Duke Energy Progress and Duke Energy Florida, (ii) the grantor trusts at Duke Energy Progress, Duke Energy Florida and Duke Energy Indiana related to OPEB plans and (iii) Bison. The Duke Energy Registrants classify investments in debt securities as AFS and investments in equity securities as FV-NI.

For investments in debt securities classified as AFS, the unrealized gains and losses are included in other comprehensive income until realized, at which time, they are reported though net income. For investments in equity securities classified as FV-NI, both realized and unrealized gains and losses are reported through net income. Substantially all of Duke Energy's investments in debt and equity securities qualify for regulatory accounting, and accordingly, all associated realized and unrealized gains and losses on these investments are deferred as a regulatory asset or liability.

Duke Energy classifies the majority of investments in debt and equity securities as long term, unless otherwise noted.

Investment Trusts

The investments within the 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 securities within the Investment Trusts are considered OTTIs and are recognized immediately and deferred to regulatory accounts where appropriate.

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 December 31, 2019, and 2018.

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

DUKE ENERGY

The following table presents the estimated fair value of investments in debt and equity securities; equity investments are classified as FV-NI and debt investments are classified as AFS.

	December 31, 2019						December 31, 2018
	Gross		Gross				Gross		Gross
	Unrealized		Unrealized				Unrealized		Unrealized
	Holding		Holding		Estimated		Holding		Holding		Estimated
(in millions)	Gains		Losses		Fair Value		Gains		Losses		Fair Value
NDTF
Cash and cash equivalents	$	—	$	—	$	101	$	—	$	—	$	88
Equity securities	3,523		55		5,661		2,402		95		4,475
Corporate debt securities	37		1		603		4		13		566
Municipal bonds	13		—		368		1		4		353
U.S. government bonds	33		1		1,256		14		12		1,076
Other debt securities	3		—		141		—		2		148
Total NDTF Investments	$	3,609	$	57	$	8,130	$	2,421	$	126	$	6,706
Other Investments
Cash and cash equivalents	$	—	$	—	$	52	$	—	$	—	$	22
Equity securities	57		—		122		36		1		99
Corporate debt securities	3		—		67		—		2		60
Municipal bonds	4		—		94		—		1		85
U.S. government bonds	2		—		41		1		—		45
Other debt securities	—		—		56		—		1		58
Total Other Investments	$	66	$	—	$	432	$	37	$	5	$	369
Total Investments	$	3,675	$	57	$	8,562	$	2,458	$	131	$	7,075

The table below summarizes the maturity date for debt securities.

(in millions)	December 31, 2019
Due in one year or less	$	372
Due after one through five years	550
Due after five through 10 years	452
Due after 10 years	1,252
Total	$	2,626

Realized gains and losses, which were determined on a specific identification basis, from sales of FV-NI and AFS securities for the years ended December 31, 2019, and 2018, and from sales of AFS securities for the year ended December 31, 2017, were as follows.

	Years Ended December 31,
(in millions)	2019		2018
FV-NI:
Realized gains	$	172	$	168
Realized losses	151		126
AFS:
Realized gains	94		22
Realized losses	67		51

	Year Ended December 31,
(in millions)	2017
Realized gains	$	202
Realized losses	160

DUKE ENERGY CAROLINAS

The following table presents the estimated fair value of investments in debt and equity securities; equity investments are classified as FV-NI and debt investments are classified as AFS.

	December 31, 2019						December 31, 2018
	Gross		Gross				Gross		Gross
	Unrealized		Unrealized				Unrealized		Unrealized
	Holding		Holding		Estimated		Holding		Holding		Estimated
(in millions)	Gains		Losses		Fair Value		Gains		Losses		Fair Value
NDTF
Cash and cash equivalents	$	—	$	—	$	21	$	—	$	—	$	29
Equity securities	1,914		8		3,154		1,309		54		2,484
Corporate debt securities	21		1		361		2		9		341
Municipal bonds	3		—		96		—		1		81
U.S. government bonds	16		1		578		5		8		475
Other debt securities	3		—		137		—		2		143
Total NDTF Investments	$	1,957	$	10	$	4,347	$	1,316	$	74	$	3,553

The table below summarizes the maturity date for debt securities.

(in millions)	December 31, 2019
Due in one year or less	$	51
Due after one through five years	253
Due after five through 10 years	181
Due after 10 years	687
Total	$	1,172

Realized gains and losses, which were determined on a specific identification basis, from sales of FV-NI and AFS securities for the years ended December 31, 2019, and 2018, and from sales of AFS securities for the year ended December 31, 2017, were as follows.

	Years Ended December 31,
(in millions)	2019		2018
FV-NI:
Realized gains	$	113	$	89
Realized losses	107		73
AFS:
Realized gains	55		19
Realized losses	38		35

	Year Ended December 31,
(in millions)	2017
Realized gains	$	135
Realized losses	103

PROGRESS ENERGY

The following table presents the estimated fair value of investments in debt and equity securities; equity investments are classified as FV-NI and debt investments are classified as AFS.

	December 31, 2019						December 31, 2018
	Gross		Gross				Gross		Gross
	Unrealized		Unrealized				Unrealized		Unrealized
	Holding		Holding		Estimated		Holding		Holding		Estimated
(in millions)	Gains		Losses		Fair Value		Gains		Losses		Fair Value
NDTF
Cash and cash equivalents	$	—	$	—	$	80	$	—	$	—	$	59
Equity securities	1,609		47		2,507		1,093		41		1,991
Corporate debt securities	16		—		242		2		4		225
Municipal bonds	10		—		272		1		3		272
U.S. government bonds	17		—		678		9		4		601
Other debt securities	—		—		4		—		—		5
Total NDTF Investments	$	1,652	$	47	$	3,783	$	1,105	$	52	$	3,153
Other Investments
Cash and cash equivalents	$	—	$	—	$	49	$	—	$	—	$	17
Municipal bonds	3		—		51		—		—		47
Total Other Investments	$	3	$	—	$	100	$	—	$	—	$	64
Total Investments	$	1,655	$	47	$	3,883	$	1,105	$	52	$	3,217

The table below summarizes the maturity date for debt securities.

(in millions)	December 31, 2019
Due in one year or less	$	311
Due after one through five years	256
Due after five through 10 years	211
Due after 10 years	469
Total	$	1,247

Realized gains and losses, which were determined on a specific identification basis, from sales of FV-NI and AFS securities for the years ended December 31, 2019, and 2018, and from sales of AFS securities for the year ended December 31, 2017, were as follows.

	Years Ended December 31,
(in millions)	2019		2018
FV-NI:
Realized gains	$	59	$	79
Realized losses	44		53
AFS:
Realized gains	36		3
Realized losses	29		15

	Year Ended December 31,
(in millions)	2017
Realized gains	$	65
Realized losses	56

DUKE ENERGY PROGRESS

The following table presents the estimated fair value of investments in debt and equity securities; equity investments are classified as FV-NI and debt investments are classified as AFS.

	December 31, 2019						December 31, 2018
	Gross		Gross				Gross		Gross
	Unrealized		Unrealized				Unrealized		Unrealized
	Holding		Holding		Estimated		Holding		Holding		Estimated
(in millions)	Gains		Losses		Fair Value		Gains		Losses		Fair Value
NDTF
Cash and cash equivalents	$	—	$	—	$	53	$	—	$	—	$	46
Equity securities	1,258		21		2,077		833		30		1,588
Corporate debt securities	16		—		242		2		3		171
Municipal bonds	10		—		272		1		3		271
U.S. government bonds	16		—		403		6		3		415
Other debt securities	—		—		4		—		—		3
Total NDTF Investments	$	1,300	$	21	$	3,051	$	842	$	39	$	2,494
Other Investments
Cash and cash equivalents	$	—	$	—	$	2	$	—	$	—	$	6
Total Other Investments	$	—	$	—	$	2	$	—	$	—	$	6
Total Investments	$	1,300	$	21	$	3,053	$	842	$	39	$	2,500

The table below summarizes the maturity date for debt securities.

(in millions)	December 31, 2019
Due in one year or less	$	34
Due after one through five years	247
Due after five through 10 years	204
Due after 10 years	436
Total	$	921

Realized gains and losses, which were determined on a specific identification basis, from sales of FV-NI and AFS securities for the years ended December 31, 2019, and 2018, and from sales of AFS securities for the year ended December 31, 2017, were as follows.

	Years Ended December 31,
(in millions)	2019		2018
FV-NI:
Realized gains	$	38	$	68
Realized losses	33		48
AFS:
Realized gains	7		2
Realized losses	5		10

	Year Ended December 31,
(in millions)	2017
Realized gains	$	54
Realized losses	48

DUKE ENERGY FLORIDA

The following table presents the estimated fair value of investments in debt and equity securities; equity investments are classified as FV-NI and debt investments are classified as AFS.

	December 31, 2019						December 31, 2018
	Gross		Gross				Gross		Gross
	Unrealized		Unrealized				Unrealized		Unrealized
	Holding		Holding		Estimated		Holding		Holding		Estimated
(in millions)	Gains		Losses		Fair Value		Gains		Losses		Fair Value
NDTF
Cash and cash equivalents	$	—	$	—	$	27	$	—	$	—	$	13
Equity securities	351		26		430		260		11		403
Corporate debt securities	—		—		—		—		1		54
Municipal bonds	—		—		—		—		—		1
U.S. government bonds	1		—		275		3		1		186
Other debt securities	—		—		—		—		—		2
Total NDTF Investments(a)	$	352	$	26	$	732	$	263	$	13	$	659
Other Investments
Cash and cash equivalents	$	—	$	—	$	4	$	—	$	—	$	1
Municipal bonds	3		—		51		—		—		47
Total Other Investments	$	3	$	—	$	55	$	—	$	—	$	48
Total Investments	$	355	$	26	$	787	$	263	$	13	$	707

(a) During the year ended December 31, 2019, Duke Energy Florida continued to receive reimbursements from the NDTF for costs related to ongoing decommissioning activity of the Crystal River Unit 3.

The table below summarizes the maturity date for debt securities.

(in millions)	December 31, 2019
Due in one year or less	$	277
Due after one through five years	9
Due after five through 10 years	7
Due after 10 years	33
Total	$	326

Realized gains and losses, which were determined on a specific identification basis, from sales of FV-NI and AFS securities for the years ended December 31, 2019, and 2018, and from sales of AFS securities for the year ended December 31, 2017, were as follows.

	Years Ended December 31,
(in millions)	2019		2018
FV-NI:
Realized gains	$	21	$	11
Realized losses	11		5
AFS:
Realized gains	29		1
Realized losses	24		5

	Year Ended December 31,
(in millions)	2017
Realized gains	$	11
Realized losses	8

DUKE ENERGY INDIANA

The following table presents the estimated fair value of investments in debt and equity securities; equity investments are measured at FV-NI and debt investments are classified as AFS.

	December 31, 2019						December 31, 2018
	Gross		Gross				Gross		Gross
	Unrealized		Unrealized				Unrealized		Unrealized
	Holding		Holding		Estimated		Holding		Holding		Estimated
(in millions)	Gains		Losses		Fair Value		Gains		Losses		Fair Value
Investments
Equity securities	$	43	$	—	$	81	$	29	$	—	$	67
Corporate debt securities	—		—		6		—		—		8
Municipal bonds	1		—		36		—		1		33
U.S. government bonds	—		—		2		—		—		—
Total Investments	$	44	$	—	$	125	$	29	$	1	$	108

The table below summarizes the maturity date for debt securities.

(in millions)	December 31, 2019
Due in one year or less	$	4
Due after one through five years	16
Due after five through 10 years	7
Due after 10 years	17
Total	$	44

Realized gains and losses, which were determined on a specific identification basis, from sales of FV-NI and AFS securities for the year ended December 31, 2019, and 2018, and from sales of AFS securities for the year ended December 31, 2017, were insignificant.