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 December 31, 2017, and 2016, respectively.

AVAILABLE-FOR-SALE (AFS) SECURITIES

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

Duke Energy’s AFS securities are primarily comprised of investments held in (i) the nuclear decommissioning trust funds (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 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 OTTIs and are recognized immediately.

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

Substantially all amounts of the Duke Energy Registrants' gross unrealized holding losses as of December 31, 2017, and 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. If an OTTI exists, the unrealized loss is included in earnings based on the criteria discussed below.

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. Criteria used to evaluate whether an impairment associated with equity securities is other-than-temporary includes, but is not limited to, (i) the length of time over which the market value has been lower than the cost basis of the investment, (ii) the percentage decline compared to the cost of the investment and (iii) management’s intent and ability to retain its investment for a period of time sufficient to allow for any anticipated recovery in market value. If a decline in fair value is determined to be other-than-temporary, the investment is written down to its fair value through a charge to earnings.

If the entity does not have an intent to sell a debt security and it is not more likely than not management will be required to sell the debt security before the recovery of its cost basis, the impairment write-down to fair value would be recorded as a component of other comprehensive income, except for when it is determined a credit loss exists. In determining whether a credit loss exists, management considers, among other things, (i) the length of time and the extent to which the fair value has been less than the amortized cost basis, (ii) changes in the financial condition of the issuer of the security, or in the case of an asset backed security, the financial condition of the underlying loan obligors, (iii) consideration of underlying collateral and guarantees of amounts by government entities, (iv) ability of the issuer of the security to make scheduled interest or principal payments and (v) any changes to the rating of the security by rating agencies. If a credit loss exists, the amount of impairment write-down to fair value is split between credit loss and other factors. The amount related to credit loss is recognized in earnings. The amount related to other factors is recognized in other comprehensive income. There were no material credit losses as of December 31, 2017, and 2016.

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 AFS securities.



	December 31, 2017						December 31, 2016
	Gross		Gross				Gross		Gross
	Unrealized		Unrealized				Unrealized		Unrealized
	Holding		Holding		Estimated		Holding		Holding		Estimated
(in millions)	Gains		Losses		Fair Value		Gains		Losses_(a)		Fair Value
NDTF
Cash and cash equivalents	$	—	$	—	$	115	$	—	$	—	$	111
Equity securities	2,805		27		4,914		2,092		54		4,106
Corporate debt securities	17		2		570		10		8		528
Municipal bonds	4		3		344		3		10		331
U.S. government bonds	11		7		1,027		10		8		984
Other debt securities	—		1		118		—		3		124
Total NDTF	$	2,837	$	40	$	7,088	$	2,115	$	83	$	6,184
Other Investments
Cash and cash equivalents	$	—	$	—	$	15	$	—	$	—	$	25
Equity securities	59		—		123		38		—		104
Corporate debt securities	1		—		57		1		1		66
Municipal bonds	2		1		83		2		1		82
U.S. government bonds	—		—		41		—		1		51
Other debt securities	—		1		44		—		2		42
Total Other Investments	$	62	$	2	$	363	$	41	$	5	$	370
Total Investments	$	2,899	$	42	$	7,451	$	2,156	$	88	$	6,554

The table below summarizes the maturity date for debt securities.



(in millions)	December 31, 2017
Due in one year or less	$	117
Due after one through five years	552
Due after five through 10 years	554
Due after 10 years	1,061
Total	$	2,284

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



	Years Ended December 31,
(in millions)	2017		2016		2015
Realized gains	$	202	$	246	$	193
Realized losses	160		187		98

DUKE ENERGY CAROLINAS

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



	December 31, 2017						December 31, 2016
	Gross		Gross				Gross		Gross
	Unrealized		Unrealized				Unrealized		Unrealized
	Holding		Holding		Estimated		Holding		Holding		Estimated
(in millions)	Gains		Losses		Fair Value		Gains		Losses_(a)		Fair Value
NDTF
Cash and cash equivalents	$	—	$	—	$	32	$	—	$	—	$	18
Equity securities	1,531		12		2,692		1,157		28		2,245
Corporate debt securities	9		2		359		5		6		354
Municipal bonds	—		1		60		1		2		67
U.S. government bonds	3		4		503		2		5		458
Other debt securities	—		1		112		—		3		116
Total NDTF	$	1,543	$	20	$	3,758	$	1,165	$	44	$	3,258
Other Investments
Other debt securities	$	—	$	—	$	—	$	—	$	1	$	3
Total Other Investments	$	—	$	—	$	—	$	—	$	1	$	3
Total Investments	$	1,543	$	20	$	3,758	$	1,165	$	45	$	3,261

The table below summarizes the maturity date for debt securities.



(in millions)	December 31, 2017
Due in one year or less	$	9
Due after one through five years	204
Due after five through 10 years	300
Due after 10 years	521
Total	$	1,034

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



	Years Ended December 31,
(in millions)	2017		2016		2015
Realized gains	$	135	$	157	$	158
Realized losses	103		121		83

PROGRESS ENERGY

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



	December 31, 2017						December 31, 2016
	Gross		Gross				Gross		Gross
	Unrealized		Unrealized				Unrealized		Unrealized
	Holding		Holding		Estimated		Holding		Holding		Estimated
(in millions)	Gains		Losses		Fair Value		Gains		Losses_(a)		Fair Value
NDTF
Cash and cash equivalents	$	—	$	—	$	83	$	—	$	—	$	93
Equity securities	1,274		15		2,222		935		26		1,861
Corporate debt securities	8		—		211		5		2		174
Municipal bonds	4		2		284		2		8		264
U.S. government bonds	8		3		524		8		3		526
Other debt securities	—		—		6		—		—		8
Total NDTF	$	1,294	$	20	$	3,330	$	950	$	39	$	2,926
Other Investments
Cash and cash equivalents	$	—	$	—	$	12	$	—	$	—	$	21
Municipal bonds	2		—		47		2		—		44
Total Other Investments	$	2	$	—	$	59	$	2	$	—	$	65
Total Investments	$	1,296	$	20	$	3,389	$	952	$	39	$	2,991

The table below summarizes the maturity date for debt securities.



(in millions)	December 31, 2017
Due in one year or less	$	94
Due after one through five years	301
Due after five through 10 years	203
Due after 10 years	474
Total	$	1,072

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



	Years Ended December 31,
(in millions)	2017		2016		2015
Realized gains	$	65	$	84	$	33
Realized losses	56		64		13

DUKE ENERGY PROGRESS

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



	December 31, 2017						December 31, 2016
	Gross		Gross				Gross		Gross
	Unrealized		Unrealized				Unrealized		Unrealized
	Holding		Holding		Estimated		Holding		Holding		Estimated
(in millions)	Gains		Losses		Fair Value		Gains		Losses_(a)		Fair Value
NDTF
Cash and cash equivalents	$	—	$	—	$	50	$	—	$	—	$	45
Equity securities	980		12		1,795		704		21		1,505
Corporate debt securities	6				149		4		1		120
Municipal bonds	4		2		283		2		8		263
U.S. government bonds	5		2		310		5		2		275
Other debt securities	—		—		4		—		—		5
Total NDTF	$	995	$	16	$	2,591	$	715	$	32	$	2,213
Other Investments
Cash and cash equivalents	$	—	$	—	$	1	$	—	$	—	$	1
Total Other Investments	$	—	$	—	$	1	$	—	$	—	$	1
Total Investments	$	995	$	16	$	2,592	$	715	$	32	$	2,214

The table below summarizes the maturity date for debt securities.



(in millions)	December 31, 2017
Due in one year or less	$	21
Due after one through five years	219
Due after five through 10 years	146
Due after 10 years	360
Total	$	746

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



	Years Ended December 31,
(in millions)	2017		2016		2015
Realized gains	$	54	$	71	$	26
Realized losses	48		55		11

DUKE ENERGY FLORIDA

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



	December 31, 2017						December 31, 2016
	Gross		Gross				Gross		Gross
	Unrealized		Unrealized				Unrealized		Unrealized
	Holding		Holding		Estimated		Holding		Holding		Estimated
(in millions)	Gains		Losses		Fair Value		Gains		Losses_(a)		Fair Value
NDTF
Cash and cash equivalents	$	—	$	—	$	33	$	—	$	—	$	48
Equity securities	294		3		427		231		5		356
Corporate debt securities	2		—		62		1		1		54
Municipal bonds	—		—		1		—		—		1
U.S. government bonds	3		1		214		3		1		251
Other debt securities	—		—		2		—		—		3
Total NDTF^(a)	$	299	$	4	$	739	$	235	$	7	$	713
Other Investments
Cash and cash equivalents	$	—	$	—	$	1	$	—	$	—	$	4
Municipal bonds	2		—		47		2		—		44
Total Other Investments	$	2	$	—	$	48	$	2	$	—	$	48
Total Investments	$	301	$	4	$	787	$	237	$	7	$	761


(a)	During the year ended December 31, 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)	December 31, 2017
Due in one year or less	$	73
Due after one through five years	82
Due after five through 10 years	57
Due after 10 years	114
Total	$	326

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



	Years Ended December 31,
(in millions)	2017		2016		2015
Realized gains	$	11	$	13	$	7
Realized losses	8		9		2

DUKE ENERGY INDIANA

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



	December 31, 2017						December 31, 2016
	Gross		Gross				Gross		Gross
	Unrealized		Unrealized				Unrealized		Unrealized
	Holding		Holding		Estimated		Holding		Holding		Estimated
(in millions)	Gains		Losses		Fair Value		Gains		Losses_(a)		Fair Value
Other Investments
Equity securities	$	49	$	—	$	97	$	33	$	—	$	79
Corporate debt securities	—		—		3		—		—		2
Municipal bonds	—		1		28		—		1		28
U.S. government bonds	—		—		—		—		—		1
Total Other Investments	$	49	$	1	$	128	$	33	$	1	$	110
Total Investments	$	49	$	1	$	128	$	33	$	1	$	110

The table below summarizes the maturity date for debt securities.



(in millions)	December 31, 2017
Due in one year or less	$	5
Due after one through five years	12
Due after five through 10 years	7
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 years ended December 31, 2017, 2016 and 2015.