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 $5 million as of March 31, 2017 and December 31, 2016.

AVAILABLE-FOR-SALE SECURITIES

All other investments in debt and equity securities are classified as available-for-sale.

Duke Energy’s available-for-sale securities are primarily comprised of investments held in (i) the nuclear decommissioning fund (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 Other Post-Retirement Benefit Obligations (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 deferred as a regulatory asset or liability.

Other Available-for-Sale Securities

Unrealized gains and losses on all other available-for-sale securities are included in other comprehensive income until realized, unless it is determined the carrying value of an investment is other-than-temporarily impaired. 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. If an OTTI exists, the unrealized credit loss is included in earnings. There were no material credit losses as of March 31, 2017 and December 31, 2016.

DUKE ENERGY

The following table presents the estimated fair value of investments in available-for-sale securities.



	March 31, 2017						December 31, 2016
	Gross		Gross				Gross		Gross
	Unrealized		Unrealized		Estimated		Unrealized		Unrealized		Estimated
	Holding		Holding		Fair		Holding		Holding		Fair
(in millions)	Gains		Losses_(a)		Value		Gains		Losses_(a)		Value
NDTF
Cash and cash equivalents	$	—	$	—	$	114	$	—	$	—	$	111
Equity securities	2,250		32		4,284		2,092		54		4,106
Corporate debt securities	10		5		576		10		8		528
Municipal bonds	3		6		336		3		10		331
U.S. government bonds	10		8		949		10		8		984
Other debt securities	—		3		132		—		3		124
Total NDTF	$	2,273	$	54	$	6,391	$	2,115	$	83	$	6,184
Other Investments
Cash and cash equivalents	$	—	$	—	$	18	$	—	$	—	$	25
Equity securities	44		—		106		38		—		104
Corporate debt securities	1		—		60		1		1		66
Municipal bonds	2		1		84		2		1		82
U.S. government bonds	—		—		43		—		1		51
Other debt securities	—		2		42		—		2		42
Total Other Investments^(b)	$	47	$	3	$	353	$	41	$	5	$	370
Total Investments	$	2,320	$	57	$	6,744	$	2,156	$	88	$	6,554


(a)	Substantially all amounts are considered OTTIs on investments within Investment Trusts that have been recognized immediately as a regulatory asset.


(b)	These amounts are recorded in Other within Other Noncurrent Assets on the Condensed Consolidated Balance Sheets.

The table below summarizes the maturity date for debt securities.



(in millions)	March 31, 2017
Due in one year or less	$	82
Due after one through five years	640
Due after five through 10 years	514
Due after 10 years	986
Total	$	2,222

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



	Three Months Ended
	March 31,
(in millions)	2017		2016
Realized gains	$	93	$	54
Realized losses	62		50

DUKE ENERGY CAROLINAS

The following table presents the estimated fair value of investments in available-for-sale securities.



	March 31, 2017						December 31, 2016
	Gross		Gross				Gross		Gross
	Unrealized		Unrealized		Estimated		Unrealized		Unrealized		Estimated
	Holding		Holding		Fair		Holding		Holding		Fair
(in millions)	Gains		Losses_(a)		Value		Gains		Losses_(a)		Value
NDTF
Cash and cash equivalents	$	—	$	—	$	20	$	—	$	—	$	18
Equity securities	1,229		15		2,366		1,157		28		2,245
Corporate debt securities	5		4		388		5		6		354
Municipal bonds	1		1		67		1		2		67
U.S. government bonds	3		5		431		2		5		458
Other debt securities	—		3		120		—		3		116
Total NDTF	$	1,238	$	28	$	3,392	$	1,165	$	44	$	3,258
Other Investments
Other debt securities	$	—	$	1	$	3	$	—	$	1	$	3
Total Other Investments^(b)	$	—	$	1	$	3	$	—	$	1	$	3
Total Investments	$	1,238	$	29	$	3,395	$	1,165	$	45	$	3,261


(a)	Substantially all amounts are considered OTTIs on investments within Investment Trusts that have been recognized immediately as a regulatory asset.


(b)	These amounts are recorded in Other within Other Noncurrent Assets on the Condensed Consolidated Balance Sheets.

The table below summarizes the maturity date for debt securities.



(in millions)	March 31, 2017
Due in one year or less	$	2
Due after one through five years	221
Due after five through 10 years	269
Due after 10 years	517
Total	$	1,009

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



	Three Months Ended
	March 31,
(in millions)	2017		2016
Realized gains	$	66	$	34
Realized losses	40		37

PROGRESS ENERGY

The following table presents the estimated fair value of investments in available-for-sale securities.



	March 31, 2017						December 31, 2016
	Gross		Gross				Gross		Gross
	Unrealized		Unrealized		Estimated		Unrealized		Unrealized		Estimated
	Holding		Holding		Fair		Holding		Holding		Fair
(in millions)	Gains		Losses_(a)		Value		Gains		Losses_(a)		Value
NDTF
Cash and cash equivalents	$	—	$	—	$	94	$	—	$	—	$	93
Equity securities	1,021		17		1,918		935		26		1,861
Corporate debt securities	5		1		188		5		2		174
Municipal bonds	2		5		269		2		8		264
U.S. government bonds	7		3		518		8		3		526
Other debt securities	—		—		12		—		—		8
Total NDTF	$	1,035	$	26	$	2,999	$	950	$	39	$	2,926
Other Investments
Cash and cash equivalents	$	—	$	—	$	12	$	—	$	—	$	21
Municipal bonds	2		—		46		2		—		44
Total Other Investments^(b)	$	2	$	—	$	58	$	2	$	—	$	65
Total Investments	$	1,037	$	26	$	3,057	$	952	$	39	$	2,991


(a)	Substantially all amounts are considered OTTIs on investments within Investment Trusts that have been recognized immediately as a regulatory asset.


(b)	These amounts are recorded in Other within Other Noncurrent Assets on the Condensed Consolidated Balance Sheets.

The table below summarizes the maturity date for debt securities.



(in millions)	March 31, 2017
Due in one year or less	$	72
Due after one through five years	355
Due after five through 10 years	189
Due after 10 years	417
Total	$	1,033

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



	Three Months Ended
	March 31,
(in millions)	2017		2016
Realized gains	$	27	$	19
Realized losses	21		13

DUKE ENERGY PROGRESS

The following table presents the estimated fair value of investments in available-for-sale securities.



	March 31, 2017						December 31, 2016
	Gross		Gross				Gross		Gross
	Unrealized		Unrealized		Estimated		Unrealized		Unrealized		Estimated
	Holding		Holding		Fair		Holding		Holding		Fair
(in millions)	Gains		Losses_(a)		Value		Gains		Losses_(a)		Value
NDTF
Cash and cash equivalents	$	—	$	—	$	43	$	—	$	—	$	45
Equity securities	772		13		1,541		704		21		1,505
Corporate debt securities	4		1		131		4		1		120
Municipal bonds	2		5		268		2		8		263
U.S. government bonds	5		2		284		5		2		275
Other debt securities	—		—		7		—		—		5
Total NDTF	$	783	$	21	$	2,274	$	715	$	32	$	2,213
Other Investments
Cash and cash equivalents	$	—	$	—	$	1	$	—	$	—	$	1
Total Other Investments^(b)	$	—	$	—	$	1	$	—	$	—	$	1
Total Investments	$	783	$	21	$	2,275	$	715	$	32	$	2,214


(a)	Substantially all amounts are considered OTTIs on investments within Investment Trusts that have been recognized immediately as a regulatory asset.


(b)	These amounts are recorded in Other within Other Noncurrent Assets on the Condensed Consolidated Balance Sheets.

The table below summarizes the maturity date for debt securities.



(in millions)	March 31, 2017
Due in one year or less	$	17
Due after one through five years	215
Due after five through 10 years	142
Due after 10 years	316
Total	$	690

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



	Three Months Ended
	March 31,
(in millions)	2017		2016
Realized gains	$	24	$	15
Realized losses	19		11

DUKE ENERGY FLORIDA

The following table presents the estimated fair value of investments in available-for-sale securities.



	March 31, 2017						December 31, 2016
	Gross		Gross				Gross		Gross
	Unrealized		Unrealized		Estimated		Unrealized		Unrealized		Estimated
	Holding		Holding		Fair		Holding		Holding		Fair
(in millions)	Gains		Losses_(a)		Value		Gains		Losses_(a)		Value
NDTF
Cash and cash equivalents	$	—	$	—	$	51	$	—	$	—	$	48
Equity securities	249		4		377		231		5		356
Corporate debt securities	1		—		57		1		1		54
Municipal bonds	—		—		1		—		—		1
U.S. government bonds	2		1		234		3		1		251
Other debt securities	—		—		5		—		—		3
Total NDTF^(b)	$	252	$	5	$	725	$	235	$	7	$	713
Other Investments
Cash and cash equivalents	$	—	$	—	$	1	$	—	$	—	$	4
Municipal bonds	2		—		46		2		—		44
Total Other Investments^(c)	$	2	$	—	$	47	$	2	$	—	$	48
Total Investments	$	254	$	5	$	772	$	237	$	7	$	761


(a)	Substantially all amounts are considered OTTIs on investments within Investment Trusts that have been recognized immediately as a regulatory asset.


(b)	During the three months ended March 31, 2017, Duke Energy Florida continued to receive reimbursements from the NDTF for costs related to ongoing commissioning activity of the Crystal River Unit 3 nuclear plant.


(c)	These amounts are recorded in Other within Other Noncurrent Assets on the Condensed Consolidated Balance Sheets.

The table below summarizes the maturity date for debt securities.



(in millions)	March 31, 2017
Due in one year or less	$	55
Due after one through five years	140
Due after five through 10 years	47
Due after 10 years	101
Total	$	343

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



	Three Months Ended
	March 31,
(in millions)	2017		2016
Realized gains	$	3	$	4
Realized losses	2		2

DUKE ENERGY INDIANA

The following table presents the estimated fair value of investments in available-for-sale securities.



	March 31, 2017						December 31, 2016
	Gross		Gross				Gross		Gross
	Unrealized		Unrealized		Estimated		Unrealized		Unrealized		Estimated
	Holding		Holding		Fair		Holding		Holding		Fair
(in millions)	Gains		Losses_(a)		Value		Gains		Losses_(a)		Value
Other Investments
Equity securities	$	38	$	—	$	84	$	33	$	—	$	79
Corporate debt securities	—		—		2		—		—		2
Municipal bonds	—		1		28		—		1		28
U.S. government bonds	—		—		1		—		—		1
Total Other Investments^(b)	$	38	$	1	$	115	$	33	$	1	$	110
Total Investments	$	38	$	1	$	115	$	33	$	1	$	110


(a)	Substantially all amounts are considered OTTIs on investments within Investment Trusts that have been recognized immediately as a regulatory asset.


(b)	These amounts are recorded in Other within Other Noncurrent Assets on the Condensed Consolidated Balance Sheets.

The table below summarizes the maturity date for debt securities.



(in millions)	March 31, 2017
Due in one year or less	$	2
Due after one through five years	15
Due after five through 10 years	9
Due after 10 years	5
Total	$	31

Realized gains and losses, which were determined on a specific identification basis, from sales of available-for-sale securities were insignificant for the three months ended March 31, 2017 and 2016.