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 through 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 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 March 31, 2019, and December 31, 2018.

Other Investments amounts are recorded in Other within Other Noncurrent Assets on the Condensed 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.



	March 31, 2019						December 31, 2018
	Gross		Gross				Gross		Gross
	Unrealized		Unrealized		Estimated		Unrealized		Unrealized		Estimated
	Holding		Holding		Fair		Holding		Holding		Fair
(in millions)	Gains		Losses		Value		Gains		Losses		Value
NDTF
Cash and cash equivalents	$	—	$	—	$	114	$	—	$	—	$	88
Equity securities	2,923		65		5,061		2,402		95		4,475
Corporate debt securities	17		2		624		4		13		566
Municipal bonds	5		1		317		1		4		353
U.S. government bonds	25		5		1,102		14		12		1,076
Other debt securities	1		1		145		—		2		148
Total NDTF Investments	$	2,971	$	74	$	7,363	$	2,421	$	126	$	6,706
Other Investments
Cash and cash equivalents	$	—	$	—	$	51	$	—	$	—	$	22
Equity securities	47		—		112		36		1		99
Corporate debt securities	1		—		57		—		2		60
Municipal bonds	2		1		89		—		1		85
U.S. government bonds	1		—		52		1		—		45
Other debt securities	—		1		61		—		1		58
Total Other Investments	$	51	$	2	$	422	$	37	$	5	$	369
Total Investments	$	3,022	$	76	$	7,785	$	2,458	$	131	$	7,075

Realized gains and losses, which were determined on a specific identification basis, from sales of FV-NI and AFS securities for the three months ended March 31, 2019, and 2018, were as follows.



	Three Months Ended
(in millions)	March 31, 2019		March 31, 2018
FV-NI:
Realized gains	$	35	$	19
Realized losses	30		13
AFS:
Realized gains	10		5
Realized losses	11		13

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.



	March 31, 2019						December 31, 2018
	Gross		Gross				Gross		Gross
	Unrealized		Unrealized		Estimated		Unrealized		Unrealized		Estimated
	Holding		Holding		Fair		Holding		Holding		Fair
(in millions)	Gains		Losses		Value		Gains		Losses		Value
NDTF
Cash and cash equivalents	$	—	$	—	$	57	$	—	$	—	$	29
Equity securities	1,593		37		2,791		1,309		54		2,484
Corporate debt securities	9		2		354		2		9		341
Municipal bonds	1		—		62		—		1		81
U.S. government bonds	11		3		509		5		8		475
Other debt securities	1		1		140		—		2		143
Total NDTF Investments	$	1,615	$	43	$	3,913	$	1,316	$	74	$	3,553

Realized gains and losses, which were determined on a specific identification basis, from sales of FV-NI and AFS securities for the three months ended March 31, 2019, and 2018, were as follows.



	Three Months Ended
(in millions)	March 31, 2019		March 31, 2018
FV-NI:
Realized gains	$	23	$	10
Realized losses	21		5
AFS:
Realized gains	9		5
Realized losses	10		10

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.



	March 31, 2019						December 31, 2018
	Gross		Gross				Gross		Gross
	Unrealized		Unrealized		Estimated		Unrealized		Unrealized		Estimated
	Holding		Holding		Fair		Holding		Holding		Fair
(in millions)	Gains		Losses		Value		Gains		Losses		Value
NDTF
Cash and cash equivalents	$	—	$	—	$	57	$	—	$	—	$	59
Equity securities	1,330		28		2,270		1,093		41		1,991
Corporate debt securities	8		—		270		2		4		225
Municipal bonds	4		1		255		1		3		272
U.S. government bonds	14		2		593		9		4		601
Other debt securities	—		—		5		—		—		5
Total NDTF Investments	$	1,356	$	31	$	3,450	$	1,105	$	52	$	3,153
Other Investments
Cash and cash equivalents	$	—	$	—	$	47	$	—	$	—	$	17
Municipal bonds	2		—		49		—		—		47
Total Other Investments	$	2	$	—	$	96	$	—	$	—	$	64
Total Investments	$	1,358	$	31	$	3,546	$	1,105	$	52	$	3,217

Realized gains and losses, which were determined on a specific identification basis, from sales of FV-NI and AFS securities for the three months ended March 31, 2019, and 2018, were as follows.



	Three Months Ended
(in millions)	March 31, 2019		March 31, 2018
FV-NI:
Realized gains	$	12	$	9
Realized losses	9		8
AFS:
Realized gains	1		—
Realized losses	1		3

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.



	March 31, 2019						December 31, 2018
	Gross		Gross				Gross		Gross
	Unrealized		Unrealized		Estimated		Unrealized		Unrealized		Estimated
	Holding		Holding		Fair		Holding		Holding		Fair
(in millions)	Gains		Losses		Value		Gains		Losses		Value
NDTF
Cash and cash equivalents	$	—	$	—	$	43	$	—	$	—	$	46
Equity securities	1,022		20		1,812		833		30		1,588
Corporate debt securities	6		—		204		2		3		171
Municipal bonds	4		1		254		1		3		271
U.S. government bonds	10		1		422		6		3		415
Other debt securities	—		—		3		—		—		3
Total NDTF Investments	$	1,042	$	22	$	2,738	$	842	$	39	$	2,494
Other Investments
Cash and cash equivalents	$	—	$	—	$	3	$	—	$	—	$	6
Total Other Investments	$	—	$	—	$	3	$	—	$	—	$	6
Total Investments	$	1,042	$	22	$	2,741	$	842	$	39	$	2,500

Realized gains and losses, which were determined on a specific identification basis, from sales of FV-NI and AFS securities for the three months ended March 31, 2019, and 2018, were as follows.



	Three Months Ended
(in millions)	March 31, 2019		March 31, 2018
FV-NI:
Realized gains	$	10	$	8
Realized losses	8		8
AFS:
Realized gains	1		—
Realized losses	1		2

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.



	March 31, 2019						December 31, 2018
	Gross		Gross				Gross		Gross
	Unrealized		Unrealized		Estimated		Unrealized		Unrealized		Estimated
	Holding		Holding		Fair		Holding		Holding		Fair
(in millions)	Gains		Losses		Value		Gains		Losses		Value
NDTF
Cash and cash equivalents	$	—	$	—	$	14	$	—	$	—	$	13
Equity securities	308		8		458		260		11		403
Corporate debt securities	2		—		66		—		1		54
Municipal bonds	—		—		1		—		—		1
U.S. government bonds	4		1		171		3		1		186
Other debt securities	—		—		2		—		—		2
Total NDTF Investments^(a)	$	314	$	9	$	712	$	263	$	13	$	659
Other Investments
Cash and cash equivalents	$	—	$	—	$	1	$	—	$	—	$	1
Municipal bonds	2		—		49		—		—		47
Total Other Investments	$	2	$	—	$	50	$	—	$	—	$	48
Total Investments	$	316	$	9	$	762	$	263	$	13	$	707


(a)	During the three months ended March 31, 2019, 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.

Realized gains and losses, which were determined on a specific identification basis, from sales of FV-NI and AFS securities for the three months ended March 31, 2019, and 2018, were as follows.



	Three Months Ended
(in millions)	March 31, 2019		March 31, 2018
FV-NI:
Realized gains	$	2	$	1
Realized losses	1		—
AFS:
Realized losses	—		1

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.



	March 31, 2019						December 31, 2018
	Gross		Gross				Gross		Gross
	Unrealized		Unrealized		Estimated		Unrealized		Unrealized		Estimated
	Holding		Holding		Fair		Holding		Holding		Fair
(in millions)	Gains		Losses		Value		Gains		Losses		Value
Investments
Equity securities	$	37	$	—	$	76	$	29	$	—	$	67
Corporate debt securities	—		—		7		—		—		8
Municipal bonds	—		1		34		—		1		33
U.S. government bonds	—		—		1		—		—		—
Total Investments	$	37	$	1	$	118	$	29	$	1	$	108

Realized gains and losses, which were determined on a specific identification basis, from sales of FV-NI and AFS securities for the three months ended March 31, 2019, and 2018, were insignificant.

DEBT SECURITY MATURITIES

The table below summarizes the maturity date for debt securities.



	March 31, 2019
			Duke				Duke		Duke		Duke
	Duke		Energy		Progress		Energy		Energy		Energy
(in millions)	Energy		Carolinas		Energy		Progress		Florida		Indiana
Due in one year or less	$	74	$	9	$	41	$	21	$	20	$	4
Due after one through five years	537		153		341		251		90		17
Due after five through 10 years	577		287		245		196		49		4
Due after 10 years	1,259		616		545		415		130		17
Total	$	2,447	$	1,065	$	1,172	$	883	$	289	$	42