GOODWILL AND INTANGIBLE ASSETS

Goodwill

Duke Energy

The following table presents goodwill by reportable operating segment for Duke Energy included on Duke Energy's Consolidated Balance Sheets at December 31, 2017, and 2016.



	Electric Utilities		Gas Utilities		Commercial
(in millions)	and Infrastructure		and Infrastructure		Renewables			Total
Goodwill Balance at December 31, 2016	$	17,379	$	1,924	$	122		$	19,425
Accumulated impairment charges^(a)	—		—		(29		)	(29		)
Goodwill at December 31, 2017	$	17,379	$	1,924	$	93		$	19,396


(a)	Duke Energy evaluated the recoverability of goodwill during 2017 and recorded impairment charges of $29 million related to the Energy Management Solutions reporting unit within the Commercial Renewables segment. The fair value of the reporting unit was determined based on the market approach.

Duke Energy Ohio

Duke Energy Ohio's Goodwill balance of $920 million, allocated $596 million to Electric Utilities and Infrastructure and $324 million to Gas Utilities and Infrastructure, is presented net of accumulated impairment charges of $216 million on the Consolidated Balance Sheets at December 31, 2017, and 2016.

Progress Energy

Progress Energy's Goodwill is included in the Electric Utilities and Infrastructure operating segment and there are no accumulated impairment charges.

Piedmont

Piedmont's Goodwill is included in the Gas Utilities and Infrastructure operating segment and there are no accumulated impairment charges. Effective with Piedmont's fiscal year being changed to December 31, as discussed in Note 1, Piedmont changed the date of its annual impairment testing of goodwill from October 31 to August 31 to align with the other Duke Energy Registrants.

Impairment Testing

Duke Energy, Progress Energy, Duke Energy Ohio and Piedmont are required to perform an annual goodwill impairment test as of the same date each year and, accordingly, perform their annual impairment testing of goodwill as of August 31. Duke Energy, Progress Energy, Duke Energy Ohio and Piedmont update their test between annual tests if events or circumstances occur that would more likely than not reduce the fair value of a reporting unit below its carrying value. Except for the Energy Management Solutions reporting unit, the fair value of all other reporting units for Duke Energy, Progress Energy, Duke Energy Ohio and Piedmont exceeded their respective carrying values at the date of the annual impairment analysis.

Intangible Assets

The following tables show the carrying amount and accumulated amortization of intangible assets included in Other within Other Noncurrent Assets on the Consolidated Balance Sheets of the Duke Energy Registrants at December 31, 2017 and 2016.



	December 31, 2017
				Duke				Duke		Duke		Duke		Duke
	Duke			Energy		Progress		Energy		Energy		Energy		Energy
(in millions)	Energy			Carolinas		Energy		Progress		Florida		Ohio		Indiana			Piedmont
Emission allowances	$	19		$	1	$	5	$	2	$	3	$	—	$	13		$	—
Renewable energy certificates	148			38		107		107		—		3		—			—
Natural gas, coal and power contracts	24			—		—		—		—		—		24			—
Renewable operating and development projects	79			—		—		—		—		—		—			—
Other	6			—		—		—		—		—		—			3
Total gross carrying amounts	276			39		112		109		3		3		37			3
Accumulated amortization – natural gas, coal and power contracts	(19		)	—		—		—		—		—		(19		)	—
Accumulated amortization – renewable operating and development projects	(22		)	—		—		—		—		—		—			—
Accumulated amortization – other	(5		)	—		—		—		—		—		—			(3		)
Total accumulated amortization	(46		)	—		—		—		—		—		(19		)	(3		)
Total intangible assets, net	$	230		$	39	$	112	$	109	$	3	$	3	$	18		$	—



	December 31, 2016
				Duke				Duke		Duke		Duke		Duke
	Duke			Energy		Progress		Energy		Energy		Energy		Energy
(in millions)	Energy			Carolinas		Energy		Progress		Florida		Ohio		Indiana			Piedmont
Emission allowances	$	19		$	1	$	6	$	2	$	4	$	—	$	13		$	—
Renewable energy certificates	125			36		84		84		—		4		—			—
Natural gas, coal and power contracts	24			—		—		—		—		—		24			—
Renewable operating and development projects	97			—		—		—		—		—		—			—
Other	6			—		—		—		—		—		—			3
Total gross carrying amounts	271			37		90		86		4		4		37			3
Accumulated amortization – natural gas, coal and power contracts	(17		)	—		—		—		—		—		(17		)	—
Accumulated amortization – renewable operating and development projects	(23		)	—		—		—		—		—		—			—
Accumulated amortization – other	(5		)	—		—		—		—		—		—			(3		)
Total accumulated amortization	(45		)	—		—		—		—		—		(17		)	(3		)
Total intangible assets, net	$	226		$	37	$	90	$	86	$	4	$	4	$	20		$	—

During the year ended December 31, 2017, Duke Energy recorded a pretax impairment charge of $69 million on a wholly owned non-contracted wind project. The impairment was recorded within Impairment charges on Duke Energy’s Consolidated Statements of Operations. $58 million of the impairment related to property, plant and equipment and $11 million of the impairment related to a net intangible asset that was recorded in 2007 when the project was acquired. Prior to the impairment, the gross amount of the intangible asset was $18 million and the accumulated amortization was $7 million. The intangible asset was fully impaired. See Note 10 for additional information.

Amortization Expense

The following table presents amortization expense for natural gas, coal and power contracts, renewable operating projects and other intangible assets.



	December 31,
(in millions)	2017		2016		2015
Duke Energy	$	7	$	6	$	5
Duke Energy Indiana	1		1		1

The table below shows the expected amortization expense for the next five years for intangible assets as of December 31, 2017. The expected amortization expense includes estimates of emission allowances consumption and estimates of consumption of commodities such as natural gas and coal under existing contracts, as well as estimated amortization related to renewable operating projects. The amortization amounts discussed below are estimates and actual amounts may differ from these estimates due to such factors as changes in consumption patterns, sales or impairments of emission allowances or other intangible assets, delays in the in-service dates of renewable assets, additional intangible acquisitions and other events.



(in millions)	2018		2019		2020		2021		2022
Duke Energy	$	3	$	2	$	2	$	2	$	2
Duke Energy Indiana	1		—		—		—		—