DEBT AND CREDIT FACILITIES

Summary of Debt and Related Terms

The following tables summarize outstanding debt.



	December 31, 2015
	Weighted
	Average					Duke						Duke			Duke			Duke			Duke
	Interest		Duke			Energy			Progress			Energy			Energy			Energy			Energy
(in millions)	Rate		Energy			Carolinas			Energy			Progress			Florida			Ohio			Indiana
Unsecured debt, maturing 2016 - 2073	4.99	%	$	13,392		$	1,152		$	3,850		$	—		$	150		$	765		$	740
Secured debt, maturing 2016 - 2037	2.57	%	2,635			425			479			254			225			—			—
First mortgage bonds, maturing 2016 - 2045^(a)	4.74	%	18,980			6,161			9,750			5,975			3,775			750			2,319
Capital leases, maturing 2016 - 2051^(b)	5.38	%	1,336			24			300			144			156			13			14
Tax-exempt bonds, maturing 2017 - 2041^(c)	2.59	%	1,053			355			48			48			—			77			572
Notes payable and commercial paper^(d)	0.88	%	4,258			—			—			—			—			—			—
Money pool/intercompany borrowings			—			300			1,458			359			813			128			150
Fair value hedge carrying value adjustment			6			6			—			—			—			—			—
Unamortized debt discount and premium, net^(e)			1,712			(17		)	(28		)	(16		)	(8		)	(28		)	(8		)
Unamortized debt issuance costs^(f)			(170		)	(39		)	(85		)	(37		)	(32		)	(4		)	(19		)
Total debt	4.25	%	$	43,202		$	8,367		$	15,772		$	6,727		$	5,079		$	1,701		$	3,768
Short-term notes payable and commercial paper			(3,633		)	—			—			—			—			—			—
Short-term money pool/intercompany borrowings			—			—			(1,308		)	(209		)	(813		)	(103		)	—
Current maturities of long-term debt^(g)			(2,074		)	(356		)	(315		)	(2		)	(13		)	(106		)	(547		)
Total long-term debt^(g)			$	37,495		$	8,011		$	14,149		$	6,516		$	4,253		$	1,492		$	3,221


(a)	Substantially all electric utility property is mortgaged under mortgage bond indentures.


(b)	Duke Energy includes $114 million and $731 million of capital lease purchase accounting adjustments related to Duke Energy Progress and Duke Energy Florida, respectively, related to power purchase agreements that are not accounted for as capital leases in their respective financial statements because of grandfathering provisions in GAAP.


(c)	Substantially all tax-exempt bonds are secured by first mortgage bonds or letters of credit.


(d)	Includes $625 million that was classified as Long-Term Debt on the Consolidated Balance Sheets due to the existence of long-term credit facilities that back-stop these commercial paper balances, along with Duke Energy’s ability and intent to refinance these balances on a long-term basis. The weighted average days to maturity for commercial paper was 15 days.


(e)	Duke Energy includes $1,798 million in purchase accounting adjustments related to the merger with Progress Energy.


(f)	Duke Energy includes $59 million in purchase accounting adjustments primarily related to the merger with Progress Energy.


(g)	Refer to Note 17 for additional information on amounts from consolidated VIEs.



	December 31, 2014
	Weighted
	Average					Duke						Duke			Duke			Duke			Duke
	Interest		Duke			Energy			Progress			Energy			Energy			Energy			Energy
(in millions)	Rate		Energy			Carolinas			Energy			Progress			Florida			Ohio			Indiana
Unsecured debt, maturing 2015 - 2073	4.92	%	$	12,937		$	1,155		$	3,850		$	—		$	150		$	773		$	742
Secured debt, maturing 2016 - 2037	2.50	%	2,806			400			525			300			225			—			—
First mortgage bonds, maturing 2015 - 2044^(a)	4.76	%	19,180			6,161			9,800			5,475			4,325			900			2,319
Capital leases, maturing 2015 - 2051^(b)	5.30	%	1,428			27			314			146			168			20			16
Tax-exempt bonds, maturing 2015 - 2041^(c)	2.13	%	1,296			355			291			291			—			77			573
Notes payable and commercial paper^(d)	0.70	%	2,989			—			—			—			—			—			—
Money pool/intercompany borrowings			—			300			835			—			84			516			221
Fair value hedge carrying value adjustment			8			8			—			—			—			—			—
Unamortized debt discount and premium, net^(e)			1,890			(15		)	(26		)	(11		)	(8		)	(29		)	(9		)
Unamortized debt issuance costs			(152		)	(38		)	(86		)	(31		)	(37		)	(6		)	(22		)
Total debt	4.29	%	$	42,382		$	8,353		$	15,503		$	6,170		$	4,907		$	2,251		$	3,840
Short-term notes payable and commercial paper			(2,514		)	—			—			—			—			—			—
Short-term money pool/intercompany borrowings			—			—			(835		)	—			(84		)	(491		)	(71		)
Current maturities of long-term debt^(f)			(2,807		)	(507		)	(1,507		)	(945		)	(562		)	(157		)	(5		)
Total long-term debt^(f)			$	37,061		$	7,846		$	13,161		$	5,225		$	4,261		$	1,603		$	3,764


(a)	Substantially all electric utility property is mortgaged under mortgage bond indentures.


(b)	Duke Energy includes $129 million and $787 million of capital lease purchase accounting adjustments related to Duke Energy Progress and Duke Energy Florida, respectively, related to power purchase agreements that are not accounted for as capital leases in their respective financial statements because of grandfathering provisions in GAAP.


(c)	Substantially all tax-exempt bonds are secured by first mortgage bonds or letters of credit.


(d)	Includes $475 million that was classified as Long-Term Debt on the Consolidated Balance Sheets due to the existence of long-term credit facilities that back-stop these commercial paper balances, along with Duke Energy’s ability and intent to refinance these balances on a long-term basis. The weighted average days to maturity for commercial paper was 27 days.


(e)	Duke Energy includes $1,975 million in purchase accounting adjustments related to the merger with Progress Energy.


(f)	Refer to Note 17 for additional information on amounts from consolidated VIEs.

Current Maturities of Long-Term Debt

The following table shows the significant components of Current maturities of long-term debt on the Consolidated Balance Sheets. The Duke Energy Registrants currently anticipate satisfying these obligations with cash on hand and proceeds from additional borrowings.



(in millions)	Maturity Date	Interest Rate		December 31, 2015
Unsecured Debt
Progress Energy (Parent)	January 2016	5.625	%	$	300
Duke Energy Indiana	June 2016	6.05	%	325
Duke Energy (Parent)	November 2016	2.150	%	500
First Mortgage Bonds
Duke Energy Indiana	July 2016	0.670	%	150
Duke Energy Carolinas	December 2016	1.750	%	350
Other				449
Current maturities of long-term debt				$	2,074

Maturities and Call Options

The following table shows the annual maturities of long-term debt for the next five years and thereafter. Amounts presented exclude short-term notes payable and commercial paper and money pool borrowings for the Subsidiary Registrants.



	December 31, 2015
			Duke				Duke		Duke		Duke		Duke
	Duke		Energy		Progress		Energy		Energy		Energy		Energy
(in millions)	Energy^(a)		Carolinas		Energy		Progress		Florida		Ohio		Indiana
2016	$	2,074	$	356	$	315	$	2	$	13	$	106	$	547
2017	2,468		115		923		446		482		1		2
2018	3,441		1,629		510		—		512		5		3
2019	3,022		5		1,667		855		14		552		63
2020	2,091		755		415		152		265		25		653
Thereafter	24,616		5,507		10,634		5,063		2,980		909		2,500
Total long-term debt, including current maturities	$	37,712	$	8,367	$	14,464	$	6,518	$	4,266	$	1,598	$	3,768


(a)	Excludes $1,857 million in purchase accounting adjustments related to the merger with Progress Energy.

The Duke Energy Registrants have the ability under certain debt facilities to call and repay the obligation prior to its scheduled maturity. Therefore, the actual timing of future cash repayments could be materially different than as presented above.

Short-Term Obligations Classified as Long-Term Debt

Tax-exempt bonds that may be put to the Duke Energy Registrants at the option of the holder and certain commercial paper issuances and money pool borrowings are classified as Long-Term Debt on the Consolidated Balance Sheets. These tax-exempt bonds, commercial paper issuances and money pool borrowings, which are short-term obligations by nature, are classified as long term due to Duke Energy’s intent and ability to utilize such borrowings as long-term financing. As Duke Energy’s Master Credit Facility and other bilateral letter of credit agreements have non-cancelable terms in excess of one year as of the balance sheet date, Duke Energy has the ability to refinance these short-term obligations on a long-term basis. The following tables show short-term obligations classified as long-term debt.



	December 31, 2015
			Duke		Duke		Duke		Duke
	Duke		Energy		Energy		Energy		Energy
(in millions)	Energy		Carolinas		Progress		Ohio		Indiana
Tax-exempt bonds	$	347	$	35	$	—	$	27	$	285
Commercial paper^(a)	625		300		150		25		150
Total	$	972	$	335	$	150	$	52	$	435



	December 31, 2014
			Duke		Duke		Duke
	Duke		Energy		Energy		Energy
(in millions)	Energy		Carolinas		Ohio		Indiana
Tax-exempt bonds	$	347	$	35	$	27	$	285
Commercial paper	475		300		25		150
Secured debt^(b)	200		—		—		—
Total	$	1,022	$	335	$	52	$	435


(a)	Progress Energy amounts are equal to Duke Energy Progress amounts.


(b)	In December 2015, Duke Energy used cash held by the lender to repay debt. Instrument had a term of less than one year with the right to extend the maturity date for additional one-year periods with a final maturity date no later than December 2026.

Summary of Significant Debt Issuances

In January 2016, Duke Energy Kentucky issued $95 million of unsecured debentures, of which $45 million carry a fixed interest rate of 3.42 percent and mature January 15, 2026 and $50 million carry a fixed interest rate of 4.45 percent and mature January 15, 2046. Proceeds will primarily be used to refinance existing debt, including money pool borrowings, capital expenditures and for general corporate purposes.

The following tables summarize significant debt issuances (in millions).



				Year Ended December 31, 2015
						Duke		Duke		Duke
	Maturity	Interest		Duke		Energy		Energy		Energy
Issuance Date	Date	Rate		Energy		(Parent)		Carolinas		Progress
Unsecured Debt
November 2015^(a)(b)	April 2024	3.750	%	$	400	$	400	$	—	$	—
November 2015^(a)(b)	December 2045	4.800	%	600		600		—		—
First Mortgage Bonds
March 2015^(c)	June 2045	3.750	%	500		—		500		—
August 2015^(a)(d)	August 2025	3.250	%	500		—		—		500
August 2015^(a)(d)	August 2045	4.200	%	700		—		—		700
Total issuances				$	2,700	$	1,000	$	500	$	1,200


(a)	Proceeds were used to repay short-term money pool and commercial paper borrowing issued to fund a portion of the NCEMPA acquisition, see Note 2 for further information.


(b)	Proceeds were used to refinance at maturity $300 million of unsecured notes at Progress Energy due January 2016.


(c)	Proceeds were used to redeem at maturity $500 million of first mortgage bonds due October 2015.


(d)	Proceeds were used to refinance at maturity $400 million of first mortgage bonds due December 2015.



				Year Ended December 31, 2014
						Duke		Duke		Duke
	Maturity	Interest		Duke		Energy		Energy		Energy
Issuance Date	Date	Rate		Energy		(Parent)		Progress		Florida
Unsecured Debt
April 2014^(a)	April 2024	3.750	%	$	600	$	600	$	—	$	—
April 2014^(a)(b)	April 2017	0.613	%	400		400		—		—
June 2014^(c)	May 2019	11.970	%	108		—		—		—
June 2014^(c)	May 2021	13.680	%	110		—		—		—
Secured Debt
March 2014^(d)	March 2017	0.863	%	225		—		—		225
July 2014^(e)	July 2036	5.340	%	129		—		—		—
First Mortgage Bonds
March 2014^(f)	March 2044	4.375	%	400		—		400		—
March 2014^(f)(g)	March 2017	0.435	%	250		—		250		—
November 2014^(h)	December 2044	4.150	%	500		—		500		—
November 2014^(g)(h)	November 2017	0.432	%	200		—		200		—
Total issuances				$	2,922	$	1,000	$	1,350	$	225


(a)	Proceeds were used to redeem $402 million of tax-exempt bonds at Duke Energy Ohio, the repayment of outstanding commercial paper and for general corporate purposes. See Note 13 for additional information related to the redemption of Duke Energy Ohio's tax-exempt bonds.


(b)	The debt is floating rate based on three-month London Interbank Offered Rate (LIBOR) plus a fixed credit spread of 38 basis points.


(c)	Proceeds were used to repay $196 million of debt for International Energy and for general corporate purposes. The interest rates include country specific risk premiums.


(d)	Relates to the securitization of accounts receivable at a subsidiary of Duke Energy Florida. Proceeds were used to repay short-term borrowings under the intercompany money pool borrowing arrangement and for general corporate purposes. See Note 17 for further details.


(e)	Proceeds were used to fund a portion of Duke Energy's prior investment in the existing Wind Star renewables portfolio.


(f)	Proceeds were used to repay short-term borrowings under the intercompany money pool borrowing arrangement and for general corporate purposes.


(g)	The debt is floating rate based on three-month LIBOR plus a fixed credit spread of 20 basis points.


(h)	Proceeds were used to redeem $450 million of tax-exempt bonds, repay short-term borrowings under the intercompany money pool borrowing arrangement and for general corporate purposes.

Available Credit Facilities

Duke Energy has a Master Credit Facility with a capacity of $7.5 billion through January 2020. The Duke Energy Registrants, excluding Progress Energy (Parent), have borrowing capacity under the Master Credit Facility up to specified sublimits for each borrower. Duke Energy has the unilateral ability at any time to increase or decrease the borrowing sublimits of each borrower, subject to a maximum sublimit for each borrower. The amount available under the Master Credit Facility has been reduced to backstop the issuances of commercial paper, certain letters of credit and variable-rate demand tax-exempt bonds that may be put to the Duke Energy Registrants at the option of the holder and as security to meet obligations under the Plea Agreements. The table below includes the current borrowing sublimits and available capacity under the Master Credit Facility.



	December 31, 2015
				Duke			Duke			Duke			Duke			Duke			Duke
	Duke			Energy			Energy			Energy			Energy			Energy			Energy
(in millions)	Energy			(Parent)			Carolinas			Progress			Florida			Ohio			Indiana
Facility size^(a)	$	7,500		$	3,475		$	800		$	1,000		$	1,200		$	425		$	600
Reduction to backstop issuances
Commercial paper^(b)	(3,138		)	(1,531		)	(300		)	(333		)	(709		)	(115		)	(150		)
Outstanding letters of credit	(72		)	(65		)	(4		)	(2		)	(1		)	—			—
Tax-exempt bonds	(116		)	—			(35		)	—			—			—			(81		)
Coal ash set-aside^(c)	(500		)	—			(250		)	(250		)	—			—			—
Available capacity	$	3,674		$	1,879		$	211		$	415		$	490		$	310		$	369


(a)	Represents the sublimit of each borrower.


(b)	Duke Energy issued $625 million of commercial paper and loaned the proceeds through the money pool to Duke Energy Carolinas, Duke Energy Progress, Duke Energy Ohio and Duke Energy Indiana. The balances are classified as Long-Term Debt Payable to Affiliated Companies in the Consolidated Balance Sheets.

(c)

On May 14, 2015, the United States District Court for the Eastern District of North Carolina approved the separate Plea Agreements entered into by Duke Energy Carolinas, Duke Energy Progress and DEBS, a wholly owned subsidiary of Duke Energy, in connection with the investigation initiated by the USDOJ. Duke Energy Carolinas and Duke Energy Progress are required to each maintain $250 million of available capacity under the Master Credit Facility as security to meet their obligations under the Plea Agreements, in addition to certain other conditions. See Note 5 for further details.

In connection with the Merger Agreement with Piedmont, Duke Energy entered into a $4.9 billion senior unsecured bridge financing facility (Bridge Facility) with Barclays Capital, Inc. (Barclays). The Bridge Facility, if drawn upon, may be used (i) to fund the cash consideration for the transaction and (ii) to pay certain fees and expenses in connection with the transaction. In November 2015, Barclays syndicated its commitment under the Bridge Facility to a broader group of lenders. Duke Energy intends to finance the transaction with proceeds raised through the issuance of debt, equity, and other sources and, therefore, does not expect to draw upon the Bridge Facility. See Note 2 for further details.

On February 22, 2016, Duke Energy entered into a six months term loan facility (Term Loan) with commitments totaling $1 billion to provide additional flexibility in managing short-term liquidity. The Term Loan can be drawn upon in a single borrowing of up to $1 billion, which must occur no later than 45 calendar days following February 22, 2016. As of February 24, 2016, no amounts have been drawn under the Term Loan. Amounts drawn under this facility, if any, will be due on August 19, 2016. The terms and conditions of this Term Loan are generally consistent with those governing the Master Credit Facility discussed above.

Other Debt Matters

Duke Energy Florida expects to issue $1.3 billion of securitization bonds related to Crystal River Unit 3 in the first half of 2016. See Note 4 for additional details.

In September 2013, Duke Energy filed a registration statement (Form S-3) with the Securities and Exchange Commission (SEC). Under this Form S-3, which is uncapped, the Duke Energy Registrants, excluding Progress Energy, may issue debt and other securities in the future at amounts, prices and with terms to be determined at the time of future offerings. The registration statement also allows for the issuance of common stock by Duke Energy.

Duke Energy has an effective Form S-3 with the SEC to sell up to $3 billion of variable denomination floating-rate demand notes, called PremierNotes. The Form S-3 states that no more than $1.5 billion of the notes will be outstanding at any particular time. The notes are offered on a continuous basis and bear interest at a floating rate per annum determined by the Duke Energy PremierNotes Committee, or its designee, on a weekly basis. The interest rate payable on notes held by an investor may vary based on the principal amount of the investment. The notes have no stated maturity date, are non-transferable and may be redeemed in whole or in part by Duke Energy or at the investor’s option at any time. The balance as of December 31, 2015 and 2014 was $1,121 million and $968 million, respectively. The notes are short-term debt obligations of Duke Energy and are reflected as Notes payable and commercial paper on Duke Energy’s Consolidated Balance Sheets.

At December 31, 2015 and 2014, $767 million of debt issued by Duke Energy Carolinas was guaranteed by Duke Energy.

Money Pool

The Subsidiary Registrants, excluding Progress Energy, receive support for their short-term borrowing needs through participation with Duke Energy and certain of its subsidiaries in a money pool arrangement. Under this arrangement, those companies with short-term funds may provide short-term loans to affiliates participating in this arrangement. The money pool is structured such that the Subsidiary Registrants, excluding Progress Energy, separately manage their cash needs and working capital requirements. Accordingly, there is no net settlement of receivables and payables between money pool participants. Duke Energy (Parent), may loan funds to its participating subsidiaries, but may not borrow funds through the money pool. Accordingly, as the money pool activity is between Duke Energy and its wholly owned subsidiaries, all money pool balances are eliminated within Duke Energy’s Consolidated Balance Sheets.

Money pool receivable balances are reflected within Notes receivable from affiliated companies on the Subsidiary Registrants’ Consolidated Balance Sheets. Money pool payable balances are reflected within either Notes payable to affiliated companies or Long-Term Debt Payable to Affiliated Companies on the Subsidiary Registrants’ Consolidated Balance Sheets.

Restrictive Debt Covenants

The Duke Energy Registrants’ debt and credit agreements contain various financial and other covenants. The Master Credit Facility contains a covenant requiring the debt-to-total capitalization ratio not exceed 65 percent for each borrower. Failure to meet those covenants beyond applicable grace periods could result in accelerated due dates and/or termination of the agreements. As of December 31, 2015, each of the Duke Energy Registrants were in compliance with all covenants related to their debt agreements. In addition, some credit agreements may allow for acceleration of payments or termination of the agreements due to nonpayment, or acceleration of other significant indebtedness of the borrower or some of its subsidiaries. None of the debt or credit agreements contain material adverse change clauses.

Other Loans

As of December 31, 2015 and 2014, Duke Energy had loans outstanding of $629 million, including $41 million at Duke Energy Progress and $603 million, including $44 million at Duke Energy Progress, respectively, against the cash surrender value of life insurance policies it owns on the lives of its executives. The amounts outstanding were carried as a reduction of the related cash surrender value that is included in Other within Investments and Other Assets on the Consolidated Balance Sheets.