BUSINESS SEGMENTS

Reportable 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 interest expense on holding company debt, unallocated corporate costs and Duke Energy’s wholly owned captive insurance company, 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, 2018
	Electric		Gas					Total
	Utilities and		Utilities and		Commercial			Reportable
(in millions)	Infrastructure		Infrastructure		Renewables			Segments		Other			Eliminations			Total
Unaffiliated Revenues	$	22,242	$	1,783	$	477		$	24,502	$	19		$	—		$	24,521
Intersegment Revenues	31		98		—			129		70			(199		)	—
Total Revenues	$	22,273	$	1,881	$	477		$	24,631	$	89		$	(199	)	$	24,521
Interest Expense	$	1,288	$	106	$	88		$	1,482	$	657		$	(45	)	$	2,094
Depreciation and amortization	3,523		245		155			3,923		152			(1		)	4,074
Equity in earnings (losses) of unconsolidated affiliates	5		27		(1		)	31		52			—			83
Income tax expense (benefit)^(a)	799		78		(147		)	730		(282		)	—			448
Segment income (loss)^(b)(c)(d)(e)	3,058		274		9			3,341		(694		)	—			2,647
Add back noncontrolling interest component																(22		)
Income from discontinued operations, net of tax																19
Net income																$	2,644
Capital investments expenditures and acquisitions	$	8,086	$	1,133	$	193		$	9,412	$	256		$	—		$	9,668
Segment assets	125,364		12,361		4,204			141,929		3,275			188			145,392


(a)	All segments include adjustments to the December 31, 2017 estimate of the income tax effects of the Tax Act. Electric Utilities and Infrastructure includes a $24 million expense, Gas Utilities and Infrastructure includes a $1 million expense, Commercial Renewables includes a $3 million benefit and Other includes a $2 million benefit. See Note 23 for additional information.


(b)	Electric Utilities and Infrastructure includes after-tax regulatory and legislative impairment charges of $202 million related to rate case orders, settlements or other actions of regulators or legislative bodies and an after-tax impairment charge of $46 million related to the Citrus County CC at Duke Energy Florida. See Note 4 for additional information.


(c)	Gas Utilities and Infrastructure includes an after-tax impairment charge of $42 million for the investment in Constitution. See Note 12 for additional information.


(d)	Commercial Renewables includes an impairment charge of $91 million, net of $2 million Noncontrolling interests, related to goodwill. See Note 11 for additional information.


(e)	Other includes $65 million of after-tax costs to achieve the Piedmont merger, $144 million of after-tax severance charges related to a companywide initiative and an $82 million after-tax loss on the sale of the retired Beckjord Generating Station described below. For additional information, see Note 2 for the Piedmont Merger and Note 20 for severance charges.

In February 2018, Duke Energy sold Beckjord, a nonregulated facility retired during 2014, and recorded a pretax loss of $106 million within (Losses) Gains on Sales of Other Assets and Other, net and $1 million within Operation, maintenance and other on Duke Energy's Consolidated Statements of Operations for the year ended December 31, 2018. The sale included the transfer of coal ash basins and other real property and indemnification from any and all potential future claims related to the property, whether arising under environmental laws or otherwise.



	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 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. See 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. See Note 20 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 investment expenditures related to the International Disposal Group. Gas Utilities and Infrastructure includes the Piedmont acquisition of $5 billion. See Note 2 for more information on the Piedmont acquisition.

Geographical Information

All assets and revenues from continuing operations are within the U.S.

Major Customers

For the year ended December 31, 2018, revenues from one customer of Duke Energy Progress are $633 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
2018
Electric Utilities and Infrastructure	$	19,013	$	2,345	$	—	$	915	$	22,273
Gas Utilities and Infrastructure	—		—		1,817		64		1,881
Commercial Renewables	—		375		—		102		477
Total Reportable Segments	$	19,013	$	2,720	$	1,817	$	1,081	$	24,631
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

Duke Energy Ohio

Duke Energy Ohio has two reportable 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. Both reportable segments conduct 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. In December 2018, the PUCO approved an order which allows the recovery or credit of revenues and expenses related to Duke Energy Ohio's contractual arrangement to buy power from OVEC power plants. Due to the change in regulatory treatment of these amounts, OVEC revenues and expenses are now reflected in the Electric Utilities and Infrastructure segment. Previously, OVEC revenues and expense were included in Other. These amounts are deemed immaterial for Duke Energy Ohio. Therefore, no prior period amounts were restated. See Note 4 for additional information on the PUCO order.

All Duke Energy Ohio assets and revenues from continuing operations are within the U.S.



	Year Ended December 31, 2018
	Electric		Gas		Total
	Utilities and		Utilities and		Reportable
(in millions)	Infrastructure		Infrastructure		Segments		Other			Total
Total revenues	$	1,450	$	506	$	1,956	$	1		$	1,957
Interest expense	$	67	$	24	$	91	$	1		$	92
Depreciation and amortization	183		85		268		—			268
Income tax expense (benefit)	47		24		71		(28		)	43
Segment income (loss)/Net income^(a)	186		93		279		(103		)	176
Capital expenditures	$	655	$	172	$	827	$	—		$	827
Segment assets	5,643		2,874		8,517		38			8,555

(a) Other includes the loss on the sale of Beckjord, see discussion above.



	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