BUSINESS SEGMENTS

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 in 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.

Operating 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.

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

Due to the Piedmont acquisition and the sale of International Energy in the fourth quarter of 2016, Duke Energy's segment structure has been realigned to include the following segments: Electric Utilities and Infrastructure, Gas Utilities and Infrastructure and Commercial Renewables. Prior period information has been recast to conform to the current segment structure. See Note 2 for further information on the Piedmont and International Energy transactions.

Electric Utilities and Infrastructure 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.

Gas Utilities and Infrastructure contains Piedmont, Duke Energy's natural gas local distribution companies in Ohio and Kentucky, and Duke Energy's natural gas storage and pipeline investments. Gas Utilities and Infrastructure's operations are substantially all regulated and, accordingly, qualify for regulatory accounting treatment.

Commercial Renewables is primarily comprised of nonregulated utility scale wind and solar generation assets located throughout the U.S.

In December 2016, Duke Energy closed on the sale of the International Disposal Group, which includes the former International Energy business segment, excluding the equity method investment in NMC. Results of the International Disposal Group are presented within Discontinued Operations for all periods and results of NMC are presented within Other for all periods, as described below. See Note 2, "Acquisitions and Dispositions" for additional information related to the sale.

The remainder of Duke Energy’s operations is presented as Other, which is primarily comprised of unallocated corporate interest expense, unallocated corporate costs, contributions to the Duke Energy Foundation and the operations of Duke Energy’s wholly owned captive insurance subsidiary, Bison Insurance Company Limited (Bison). As discussed above, Other also includes Duke Energy's 25 percent interest in NMC, a large regional producer of methyl tertiary butyl ether (MTBE) located in Saudi Arabia. The investment in NMC is accounted for under the equity method of accounting.



	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. Refer to 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. Refer to Note 19 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 investments expenditures related to the International Disposal Group. Gas Utilities and Infrastructure includes the Piedmont acquisition of $5 billion. Refer to Note 2 for more information on the Piedmont acquisition.



	Year Ended December 31, 2015
	Electric			Gas					Total
	Utilities and			Utilities and		Commercial			Reportable
(in millions)	Infrastructure			Infrastructure		Renewables			Segments			Other			Eliminations			Total
Unaffiliated Revenues	$	21,489		$	536	$	286		$	22,311		$	60		$	—		$	22,371
Intersegment Revenues	32			5		—			37			75			(112		)	—
Total Revenues	$	21,521		$	541	$	286		$	22,348		$	135		$	(112	)	$	22,371
Interest Expense	$	1,074		$	25	$	44		$	1,143		$	393		$	(9	)	$	1,527
Depreciation and amortization	2,735			79		104			2,918			135			—			3,053
Equity in earnings (losses) of unconsolidated affiliates	(2		)	1		(6		)	(7		)	76			—			69
Income tax expense (benefit)	1,602			44		(128		)	1,518			(262		)	—			1,256
Segment income (loss)^(a)(b)(c)	2,819			73		52			2,944			(299		)	—			2,645
Add back noncontrolling interest component																		9
Income from discontinued operations, net of tax^(d)																		177
Net income																		$	2,831
Capital investments expenditures and acquisitions^(e)	$	6,852		$	234	$	1,019		$	8,105		$	258		$	—		$	8,363
Segment assets^(f)	109,097			2,637		3,861			115,595			5,373			188			121,156


(a)	Electric Utilities and Infrastructure includes an after-tax charge of $58 million related to the Edwardsport settlement. Refer to Note 4 for further information.

(b) Other includes $60 million of after-tax costs to achieve mergers.


(c)	Other includes after-tax charges of $77 million related to cost savings initiatives. Refer to Note 19 for further information.


(d)	Includes the impact of a settlement agreement reached in a lawsuit related to the Midwest Generation Disposal Group. Refer to Note 5 for further information related to the lawsuit and Note 2 for further information on discontinued operations.


(e)	Other includes capital investment expenditures of $45 million related to the International Disposal Group.


(f)	Other includes Assets Held for Sale balances related to the International Disposal Group. Refer to Note 2 for further information.



	Year Ended December 31, 2014
	Electric			Gas					Total
	Utilities and			Utilities and		Commercial			Reportable
(in millions)	Infrastructure			Infrastructure		Renewables			Segments		Other			Eliminations			Total
Unaffiliated Revenues	$	21,655		$	573	$	235		$	22,463	$	46		$	—		$	22,509
Intersegment Revenues	36			5		1			42		70			(112		)	—
Total Revenues	$	21,691		$	578	$	236		$	22,505	$	116		$	(112	)	$	22,509
Interest Expense	$	1,057		$	37	$	50		$	1,144	$	409		$	(24	)	$	1,529
Depreciation and amortization	2,686			73		90			2,849		120			—			2,969
Equity in earnings (losses) of unconsolidated affiliates	(1		)	—		8			7		123			—			130
Income tax expense (benefit)	1,582			45		(88		)	1,539		(314		)	—			1,225
Segment income (loss)^(a)(b)	2,714			80		53			2,847		(332		)	18			2,533
Add back noncontrolling interest component																	5
Loss from discontinued operations, net of tax^(c)																	(649		)
Net income																	$	1,889
Capital investments expenditures and acquisitions^(d)	$	4,642		$	121	$	514		$	5,277	$	251		$	—		$	5,528
Segment assets^(e)	104,119			2,512		2,981			109,612		10,755			190			120,557


(a)	Other includes a $94 million pretax impairment charge related to Ohio Valley Electric Corporation (OVEC) and costs to achieve mergers.


(b)	Electric Utilities and Infrastructure includes pretax charges of $102 million related to the criminal investigation of the Dan River coal ash spill. See Note 5 for additional information.


(c)	Includes an impairment of the Midwest Generation Disposal Group. Refer to Note 2 for further information.


(d)	Other includes $67 million of capital investments expenditures and acquisitions of the International Disposal Group.


(e)	Other includes Assets Held for Sale balances related to the International Disposal Group and Midwest Generation Disposal Group. Refer to Note 2 for further information.

Geographical Information

For the years ended December 31, 2016, 2015 and 2014, all assets and revenues are within the U.S.

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
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
2015
Electric Utilities and Infrastructure	$	18,695	$	2,014	$	—	$	812		$	21,521
Gas Utilities and Infrastructure	—		—		546		(5		)	541
Commercial Renewables	—		245		—		41			286
Total Reportable Segments	$	18,695	$	2,259	$	546	$	848		$	22,348
2014
Electric Utilities and Infrastructure	$	19,007	$	1,879	$	—	$	805		$	21,691
Gas Utilities and Infrastructure	—		—		571		7			578
Commercial Renewables	—		236		—		—			236
Total Reportable Segments	$	19,007	$	2,115	$	571	$	812		$	22,505

Duke Energy Ohio

Duke Energy Ohio has two reportable operating 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 Kentucky. Gas Utilities and Infrastructure transports and sells natural gas in portions of Ohio and northern Kentucky. It conducts operations primarily through Duke Energy Ohio and its wholly owned subsidiary, Duke Energy Kentucky.

Other is primarily comprised of governance costs allocated by its parent, Duke Energy, and revenues and expenses related to Duke Energy Ohio's contractual arrangement to buy power from OVEC's power plants. For additional information on related party transactions refer to Note 13. All of Duke Energy Ohio’s revenues are generated domestically and its long-lived assets are all in the U.S.



	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



	Year Ended December 31, 2015
	Electric		Gas		Total
	Utilities and		Utilities and		Reportable
(in millions)	Infrastructure		Infrastructure		Segments		Other			Eliminations			Total
Total revenues	$	1,331	$	541	$	1,872	$	33		$	—		$	1,905
Interest expense	$	53	$	25	$	78	$	1		$	—		$	79
Depreciation and amortization	147		79		226		1			—			227
Income tax expense (benefit)	59		45		104		(23		)	—			81
Segment income (loss)	118		73		191		(41		)	(1		)	149
Income from discontinued operations, net of tax													23
Net income													$	172
Capital expenditures	$	264	$	135	$	399	$	—		$	—		$	399
Segment assets	4,534		2,516		7,050		56			(9		)	7,097



	Year Ended December 31, 2014
	Electric		Gas		Total
	Utilities and		Utilities and		Reportable
(in millions)	Infrastructure		Infrastructure		Segments		Other			Eliminations			Total
Total revenues	$	1,317	$	578	$	1,895	$	19		$	(1	)	$	1,913
Interest expense	$	43	$	37	$	80	$	5		$	1		$	86
Depreciation and amortization	138		73		211		3			—			214
Income tax expense (benefit)	71		45		116		(73		)	—			43
Segment income (loss)^(a)	122		80		202		(133		)	(1		)	68
Loss from discontinued operations, net of tax^(b)													(563		)
Net loss													$	(495	)
Capital expenditures	$	193	$	107	$	300	$	22		$	—		$	322
Segment assets^(c)	4,428		2,487		6,915		3,321			(243		)	9,993


(a)	Other includes a $94 million pretax impairment charge related to OVEC.


(b)	Includes an impairment of the Midwest Generation Disposal Group. Refer to Note 2 for further information.


(c)	Other includes Assets Held for Sale balances related to the Midwest Generation Disposal Group. Refer to Note 2 for further information.

DUKE ENERGY CAROLINAS, PROGRESS ENERGY, DUKE ENERGY PROGRESS, DUKE ENERGY FLORIDA AND DUKE ENERGY INDIANA

The remaining Subsidiary Registrants each have one reportable operating segment, Electric Utilities and Infrastructure, which generates, transmits, distributes and sells electricity. The remainder of each company’s operations is classified as Other. While not considered a reportable segment for any of these companies, Other consists of certain unallocated corporate costs. Other for Progress Energy also includes interest expense on corporate debt instruments of $221 million, $240 million and $241 million for the years ended December 31, 2016, 2015 and 2014. The following table summarizes the net loss for Other for each of these entities.



	Years Ended December 31,
(in millions)	2016			2015			2014
Duke Energy Carolinas	$	(104	)	$	(95	)	$	(79	)
Progress Energy	(200		)	(159		)	(190		)
Duke Energy Progress	(56		)	(32		)	(31		)
Duke Energy Florida	(23		)	(16		)	(19		)
Duke Energy Indiana	(13		)	(10		)	(11		)

The assets of Duke Energy Carolinas, Progress Energy, Duke Energy Progress, Duke Energy Florida and Duke Energy Indiana are substantially all included within the Electric Utilities and Infrastructure segment at December 31, 2016, 2015 and 2014.