Investments in Debt and Equity Securities

12 Months Ended

Dec. 31, 2018

Investments, Debt and Equity Securities [Abstract]

Investments in Debt and Equity Securities

INVESTMENTS IN DEBT AND EQUITY SECURITIES

Duke Energy's investments in debt and equity securities are primarily comprised of investments held in (i) the NDTF at Duke Energy Carolinas, Duke Energy Progress and Duke Energy Florida, (ii) the grantor trusts at Duke Energy Progress, Duke Energy Florida and Duke Energy Indiana related to OPEB plans and (iii) Bison. The Duke Energy Registrants classify investments in debt securities as AFS and investments in equity securities as FV-NI.

For investments in debt securities classified as AFS, the unrealized gains and losses are included in other comprehensive income until realized, at which time, they are reported though net income. For investments in equity securities classified as FV-NI, both realized and unrealized gains and losses are reported through net income. Substantially all of Duke Energy's investments in debt and equity securities qualify for regulatory accounting, and accordingly, all associated realized and unrealized gains and losses on these investments are deferred as a regulatory asset or liability.

Duke Energy classifies the majority of investments in debt and equity securities as long term, unless otherwise noted.

Investment Trusts

The investments within the NDTF and the 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 securities within the Investment Trusts are considered OTTIs and are recognized immediately and deferred to regulatory accounts where appropriate.

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. 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 December 31, 2018, and 2017.

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 debt and equity securities; equity investments are classified as FV-NI and debt investments are classified as AFS.

	December 31, 2018						December 31, 2017
	Gross		Gross				Gross		Gross
	Unrealized		Unrealized				Unrealized		Unrealized
	Holding		Holding		Estimated		Holding		Holding		Estimated
(in millions)	Gains		Losses		Fair Value		Gains		Losses		Fair Value
NDTF
Cash and cash equivalents	$	—	$	—	$	88	$	—	$	—	$	115
Equity securities	2,402		95		4,475		2,805		27		4,914
Corporate debt securities	4		13		566		17		2		570
Municipal bonds	1		4		353		4		3		344
U.S. government bonds	14		12		1,076		11		7		1,027
Other debt securities	—		2		148		—		1		118
Total NDTF Investments	$	2,421	$	126	$	6,706	$	2,837	$	40	$	7,088
Other Investments
Cash and cash equivalents	$	—	$	—	$	22	$	—	$	—	$	15
Equity securities	36		1		99		59		—		123
Corporate debt securities	—		2		60		1		—		57
Municipal bonds	—		1		85		2		1		83
U.S. government bonds	1		—		45		—		—		41
Other debt securities	—		1		58		—		1		44
Total Other Investments	$	37	$	5	$	369	$	62	$	2	$	363
Total Investments	$	2,458	$	131	$	7,075	$	2,899	$	42	$	7,451

The table below summarizes the maturity date for debt securities.

(in millions)	December 31, 2018
Due in one year or less	$	98
Due after one through five years	501
Due after five through 10 years	570
Due after 10 years	1,222
Total	$	2,391

Realized gains and losses, which were determined on a specific identification basis, from sales of FV-NI and AFS securities for the year ended December 31, 2018, and from sales of AFS securities for the years ended December 31, 2017, and 2016, were as follows.

	Year Ended December 31,
(in millions)	2018
FV-NI:
Realized gains	$	168
Realized losses	126
AFS:
Realized gains	22
Realized losses	51

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

DUKE ENERGY CAROLINAS

The following table presents the estimated fair value of investments in debt and equity securities; equity investments are classified as FV-NI and debt investments are classified as AFS.

	December 31, 2018						December 31, 2017
	Gross		Gross				Gross		Gross
	Unrealized		Unrealized				Unrealized		Unrealized
	Holding		Holding		Estimated		Holding		Holding		Estimated
(in millions)	Gains		Losses		Fair Value		Gains		Losses		Fair Value
NDTF
Cash and cash equivalents	$	—	$	—	$	29	$	—	$	—	$	32
Equity securities	1,309		54		2,484		1,531		12		2,692
Corporate debt securities	2		9		341		9		2		359
Municipal bonds	—		1		81		—		1		60
U.S. government bonds	5		8		475		3		4		503
Other debt securities	—		2		143		—		1		112
Total NDTF Investments	$	1,316	$	74	$	3,553	$	1,543	$	20	$	3,758

The table below summarizes the maturity date for debt securities.

(in millions)	December 31, 2018
Due in one year or less	$	6
Due after one through five years	142
Due after five through 10 years	303
Due after 10 years	589
Total	$	1,040

Realized gains and losses, which were determined on a specific identification basis, from sales of FV-NI and AFS securities for the year ended December 31, 2018, and from sales of AFS securities for the years ended December 31, 2017, and 2016, were as follows.

	Year Ended December 31,
(in millions)	2018
FV-NI:
Realized gains	$	89
Realized losses	73
AFS:
Realized gains	19
Realized losses	35

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

PROGRESS ENERGY

The following table presents the estimated fair value of investments in debt and equity securities; equity investments are classified as FV-NI and debt investments are classified as AFS.

	December 31, 2018						December 31, 2017
	Gross		Gross				Gross		Gross
	Unrealized		Unrealized				Unrealized		Unrealized
	Holding		Holding		Estimated		Holding		Holding		Estimated
(in millions)	Gains		Losses		Fair Value		Gains		Losses		Fair Value
NDTF
Cash and cash equivalents	$	—	$	—	$	59	$	—	$	—	$	83
Equity securities	1,093		41		1,991		1,274		15		2,222
Corporate debt securities	2		4		225		8		—		211
Municipal bonds	1		3		272		4		2		284
U.S. government bonds	9		4		601		8		3		524
Other debt securities	—		—		5		—		—		6
Total NDTF Investments	$	1,105	$	52	$	3,153	$	1,294	$	20	$	3,330
Other Investments
Cash and cash equivalents	$	—	$	—	$	17	$	—	$	—	$	12
Municipal bonds	—		—		47		2		—		47
Total Other Investments	$	—	$	—	$	64	$	2	$	—	$	59
Total Investments	$	1,105	$	52	$	3,217	$	1,296	$	20	$	3,389

The table below summarizes the maturity date for debt securities.

(in millions)	December 31, 2018
Due in one year or less	$	87
Due after one through five years	306
Due after five through 10 years	216
Due after 10 years	541
Total	$	1,150

Realized gains and losses, which were determined on a specific identification basis, from sales of FV-NI and AFS securities for the year ended December 31, 2018, and from sales of AFS securities for the years ended December 31, 2017, and 2016, were as follows.

	Year Ended December 31,
(in millions)	2018
FV-NI:
Realized gains	$	79
Realized losses	53
AFS:
Realized gains	3
Realized losses	15

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

DUKE ENERGY PROGRESS

The following table presents the estimated fair value of investments in debt and equity securities; equity investments are classified as FV-NI and debt investments are classified as AFS.

	December 31, 2018						December 31, 2017
	Gross		Gross				Gross		Gross
	Unrealized		Unrealized				Unrealized		Unrealized
	Holding		Holding		Estimated		Holding		Holding		Estimated
(in millions)	Gains		Losses		Fair Value		Gains		Losses		Fair Value
NDTF
Cash and cash equivalents	$	—	$	—	$	46	$	—	$	—	$	50
Equity securities	833		30		1,588		980		12		1,795
Corporate debt securities	2		3		171		6		—		149
Municipal bonds	1		3		271		4		2		283
U.S. government bonds	6		3		415		5		2		310
Other debt securities	—		—		3		—		—		4
Total NDTF Investments	$	842	$	39	$	2,494	$	995	$	16	$	2,591
Other Investments
Cash and cash equivalents	$	—	$	—	$	6	$	—	$	—	$	1
Total Other Investments	$	—	$	—	$	6	$	—	$	—	$	1
Total Investments	$	842	$	39	$	2,500	$	995	$	16	$	2,592

The table below summarizes the maturity date for debt securities.

(in millions)	December 31, 2018
Due in one year or less	$	49
Due after one through five years	231
Due after five through 10 years	161
Due after 10 years	419
Total	$	860

Realized gains and losses, which were determined on a specific identification basis, from sales of FV-NI and AFS securities for the year ended December 31, 2018, and from sales of AFS securities for the years ended December 31, 2017, and 2016, were as follows.

	Year Ended December 31,
(in millions)	2018
FV-NI:
Realized gains	$	68
Realized losses	48
AFS:
Realized gains	$	2
Realized losses	10

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

DUKE ENERGY FLORIDA

The following table presents the estimated fair value of investments in debt and equity securities; equity investments are classified as FV-NI and debt investments are classified as AFS.

	December 31, 2018						December 31, 2017
	Gross		Gross				Gross		Gross
	Unrealized		Unrealized				Unrealized		Unrealized
	Holding		Holding		Estimated		Holding		Holding		Estimated
(in millions)	Gains		Losses		Fair Value		Gains		Losses		Fair Value
NDTF
Cash and cash equivalents	$	—	$	—	$	13	$	—	$	—	$	33
Equity securities	260		11		403		294		3		427
Corporate debt securities	—		1		54		2		—		62
Municipal bonds	—		—		1		—		—		1
U.S. government bonds	3		1		186		3		1		214
Other debt securities	—		—		2		—		—		2
Total NDTF Investments(a)	$	263	$	13	$	659	$	299	$	4	$	739
Other Investments
Cash and cash equivalents	$	—	$	—	$	1	$	—	$	—	$	1
Municipal bonds	—		—		47		2		—		47
Total Other Investments	$	—	$	—	$	48	$	2	$	—	$	48
Total Investments	$	263	$	13	$	707	$	301	$	4	$	787

(a) During the year ended December 31, 2018, 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, 2018
Due in one year or less	$	38
Due after one through five years	75
Due after five through 10 years	55
Due after 10 years	122
Total	$	290

Realized gains and losses, which were determined on a specific identification basis, from sales of FV-NI and AFS securities for the year ended December 31, 2018, and from sales of AFS securities for the years ended December 31, 2017, and 2016, were as follows.

	Year Ended December 31,
(in millions)	2018
FV-NI:
Realized gains	$	11
Realized losses	5
AFS:
Realized gains	1
Realized losses	5

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

DUKE ENERGY INDIANA

The following table presents the estimated fair value of investments in debt and equity securities; equity investments are measured at FV-NI and debt investments are classified as AFS.

	December 31, 2018						December 31, 2017
	Gross		Gross				Gross		Gross
	Unrealized		Unrealized				Unrealized		Unrealized
	Holding		Holding		Estimated		Holding		Holding		Estimated
(in millions)	Gains		Losses		Fair Value		Gains		Losses		Fair Value
Investments
Equity securities	$	29	$	—	$	67	$	49	$	—	$	97
Corporate debt securities	—		—		8		—		—		3
Municipal bonds	—		1		33		—		1		28
Total Investments	$	29	$	1	$	108	$	49	$	1	$	128

The table below summarizes the maturity date for debt securities.

(in millions)	December 31, 2018
Due in one year or less	$	3
Due after one through five years	20
Due after five through 10 years	4
Due after 10 years	14
Total	$	41

Realized gains and losses, which were determined on a specific identification basis, from sales of FV-NI and AFS securities for the year ended December 31, 2018, and from sales of AFS securities for the years ended December 31, 2017, and 2016, were insignificant.