Investments in Debt and Equity Securities

3 Months Ended

Mar. 31, 2020

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 fair value through net income (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 through 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 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 has a credit loss. The Duke Energy Registrants analyze all investment holdings each reporting period to determine whether a decline in fair value is related to a credit loss. If an credit loss exists, the unrealized credit loss is included in earnings. There were no material credit losses as of March 31, 2020, and December 31, 2019.

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 debt and equity securities; equity investments are classified as FV-NI and debt investments are classified as AFS.

	March 31, 2020						December 31, 2019
	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	$	—	$	—	$	119	$	—	$	—	$	101
Equity securities	2,499		170		4,488		3,523		55		5,661
Corporate debt securities	26		16		642		37		1		603
Municipal bonds	10		2		404		13		—		368
U.S. government bonds	70		—		1,212		33		1		1,256
NDTF equity security contracts	20		—		20		—		—		—
Other debt securities	4		3		163		3		—		141
Total NDTF Investments	$	2,629	$	191	$	7,048	$	3,609	$	57	$	8,130
Other Investments
Cash and cash equivalents	$	—	$	—	$	78	$	—	$	—	$	52
Equity securities	31		1		95		57		—		122
Corporate debt securities	—		—		89		3		—		67
Municipal bonds	6		1		98		4		—		94
U.S. government bonds	5		—		51		2		—		41
Other debt securities	—		—		52		—		—		56
Total Other Investments	$	42	$	2	$	463	$	66	$	—	$	432
Total Investments	$	2,671	$	193	$	7,511	$	3,675	$	57	$	8,562

Realized gains and losses, which were determined on a specific identification basis, from sales of FV-NI and AFS securities for the three months ended March 31, 2020, and 2019, were as follows.

	Three Months Ended
(in millions)	March 31, 2020		March 31, 2019
FV-NI:
Realized gains	$	23	$	35
Realized losses	65		30
AFS:
Realized gains	20		10
Realized losses	6		11

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.

	March 31, 2020						December 31, 2019
	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	$	—	$	—	$	33	$	—	$	—	$	21
Equity securities	1,355		81		2,498		1,914		8		3,154
Corporate debt securities	15		12		392		21		1		361
Municipal bonds	3		1		128		3		—		96
U.S. government bonds	35		—		502		16		1		578
Other debt securities	3		3		159		3		—		137
Total NDTF Investments	$	1,411	$	97	$	3,712	$	1,957	$	10	$	4,347

Realized gains and losses, which were determined on a specific identification basis, from sales of FV-NI and AFS securities for the three months ended March 31, 2020, and 2019, were as follows.

	Three Months Ended
(in millions)	March 31, 2020		March 31, 2019
FV-NI:
Realized gains	$	9	$	23
Realized losses	45		21
AFS:
Realized gains	12		9
Realized losses	5		10

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.

	March 31, 2020						December 31, 2019
	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	$	—	$	—	$	86	$	—	$	—	$	80
Equity securities	1,144		89		1,990		1,609		47		2,507
Corporate debt securities	11		4		250		16		—		242
Municipal bonds	7		1		276		10		—		272
U.S. government bonds	35		—		710		17		—		678
NDTF equity security contracts	20		—		20		—		—		—
Other debt securities	1		—		4		—		—		4
Total NDTF Investments	$	1,218	$	94	$	3,336	$	1,652	$	47	$	3,783
Other Investments
Cash and cash equivalents	$	—	$	—	$	69	$	—	$	—	$	49
Municipal bonds	5		—		53		3		—		51
Total Other Investments	$	5	$	—	$	122	$	3	$	—	$	100
Total Investments	$	1,223	$	94	$	3,458	$	1,655	$	47	$	3,883

Realized gains and losses, which were determined on a specific identification basis, from sales of FV-NI and AFS securities for the three months ended March 31, 2020, and 2019, were as follows.

	Three Months Ended
(in millions)	March 31, 2020		March 31, 2019
FV-NI:
Realized gains	$	14	$	12
Realized losses	20		9
AFS:
Realized gains	5		1
Realized losses	1		1

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.

	March 31, 2020						December 31, 2019
	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	$	—	$	—	$	51	$	—	$	—	$	53
Equity securities	881		79		1,631		1,258		21		2,077
Corporate debt securities	11		4		250		16		—		242
Municipal bonds	7		1		276		10		—		272
U.S. government bonds	34		—		436		16		—		403
Other debt securities	1		—		4		—		—		4
Total NDTF Investments	$	934	$	84	$	2,648	$	1,300	$	21	$	3,051
Other Investments
Cash and cash equivalents	$	—	$	—	$	2	$	—	$	—	$	2
Total Other Investments	$	—	$	—	$	2	$	—	$	—	$	2
Total Investments	$	934	$	84	$	2,650	$	1,300	$	21	$	3,053

Realized gains and losses, which were determined on a specific identification basis, from sales of FV-NI and AFS securities for the three months ended March 31, 2020, and 2019, were as follows.

	Three Months Ended
(in millions)	March 31, 2020		March 31, 2019
FV-NI:
Realized gains	$	14	$	10
Realized losses	20		8
AFS:
Realized gains	5		1
Realized losses	1		1

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.

	March 31, 2020						December 31, 2019
	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	$	—	$	—	$	35	$	—	$	—	$	27
Equity securities	263		10		359		351		26		430
U.S. government bonds	1		—		274		1		—		275
NDTF equity security contracts	20		—		20		—		—		—
Total NDTF Investments(a)	$	284	$	10	$	688	$	352	$	26	$	732
Other Investments
Cash and cash equivalents	$	—	$	—	$	3	$	—	$	—	$	4
Municipal bonds	5		—		53		3		—		51
Total Other Investments	$	5	$	—	$	56	$	3	$	—	$	55
Total Investments	$	289	$	10	$	744	$	355	$	26	$	787

(a) During the three months ended March 31, 2020, Duke Energy Florida continued to receive reimbursements from the NDTF for costs related to ongoing decommissioning activity of Crystal River Unit 3.

Realized gains and losses, which were determined on a specific identification basis, from sales of FV-NI and AFS securities for the three months ended March 31, 2020, and 2019, were immaterial.

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.

	March 31, 2020						December 31, 2019
	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	$	26	$	1	$	63	$	43	$	—	$	81
Corporate debt securities	—		—		4		—		—		6
Municipal bonds	1		1		36		1		—		36
U.S. government bonds	—		—		3		—		—		2
Total Investments	$	27	$	2	$	106	$	44	$	—	$	125

Realized gains and losses, which were determined on a specific identification basis, from sales of FV-NI and AFS securities for the three months ended March 31, 2020, and 2019, were immaterial.

DEBT SECURITY MATURITIES

The table below summarizes the maturity date for debt securities.

	March 31, 2020
			Duke				Duke		Duke		Duke
	Duke		Energy		Progress		Energy		Energy		Energy
(in millions)	Energy		Carolinas		Energy		Progress		Florida		Indiana
Due in one year or less	$	333	$	25	$	302	$	26	$	276	$	3
Due after one through five years	538		234		236		227		9		17
Due after five through 10 years	465		188		214		207		7		7
Due after 10 years	1,375		734		541		506		35		16
Total	$	2,711	$	1,181	$	1,293	$	966	$	327	$	43