TABLE OF CONTENTS



	Cautionary Statement Regarding Forward-Looking Information

PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements

	Duke Energy Corporation Financial Statements	69

	Duke Energy Carolinas, LLC Financial Statements	11

	~~Progress Energy, Inc. Financial Statements~~	15

	~~Duke~~Progress Energy, ~~Progress, LLC~~Inc. Financial Statements	19

	Duke Energy ~~Florida,~~Progress, LLC Financial Statements	23

	Duke Energy ~~Ohio, Inc.~~Florida, LLC Financial Statements	27

	Duke Energy Ohio, Inc. Financial Statements	31

	Duke Energy Indiana, LLC Financial Statements	3135

	Piedmont Natural Gas Company, Inc. Financial Statements	3539

	Combined Notes to Condensed Consolidated Financial Statements
	Note 1 – Organization and Basis of Presentation	3943
	Note 2 – ~~Acquisitions and Dispositions~~Business Segments	4445
	Note 3 – ~~Business Segments~~Regulatory Matters	4647
	Note 4 – ~~Regulatory Matters~~Commitments and Contingencies	4958
	Note 5 – ~~Commitments and Contingencies~~Leases	5762
	Note 6 – Debt and Credit Facilities	6267
	Note 7 – Asset Retirement Obligations	6569
	Note 8 – Goodwill ~~and Intangible Assets~~	6570
	Note 9 – Related Party Transactions	6771
	Note 10 – Derivatives and Hedging	6872
	Note 11 – Investments in Debt and Equity Securities	7477
	Note 12 – Fair Value Measurements	8082
	Note 13 – Variable Interest Entities	8687
	Note 14 – ~~Common Stock~~Revenue	91
	Note 15 – ~~Stock-Based Compensation~~Stockholders' Equity	9196
	Note 16 – Employee Benefit Plans	9297
	Note 17 – Income Taxes	9699
	Note 18 – Subsequent Events	9799

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	98100

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	~~126~~122

Item 4.	Controls and Procedures	~~126~~122

PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	~~128~~124

Item 1A.	Risk Factors	~~128~~124

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	~~128~~124

Item 6.	Exhibits	~~129~~125

	Signatures	~~132~~128



FORWARD LOOKING STATEMENTS

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

This document includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are based on management’s beliefs and assumptions and can often be identified by terms and phrases that include “anticipate,” “believe,” “intend,” “estimate,” “expect,” “continue,” “should,” “could,” “may,” “plan,” “project,” “predict,” “will,” “potential,” “forecast,” “target,” “guidance,” “outlook” or other similar terminology. Various factors may cause actual results to be materially different than the suggested outcomes within forward-looking statements; accordingly, there is no assurance that such results will be realized. These factors include, but are not limited to:

State, federal and foreign legislative and regulatory initiatives, including costs of compliance with existing and future environmental requirements, including those related to climate change, as well as rulings that affect cost and investment recovery or have an impact on rate structures or market prices;

The extent and timing of costs and liabilities to comply with federal and state laws, regulations and legal requirements related to coal ash remediation, including amounts for required closure of certain ash impoundments, are uncertain and difficult to estimate;

The ability to recover eligible costs, including amounts associated with coal ash impoundment retirement obligations and costs related to significant weather events, and to earn an adequate return on investment through rate case proceedings and the regulatory process;

The costs of decommissioning Crystal River Unit 3 and other nuclear facilities could prove to be more extensive than amounts estimated and all costs may not be fully recoverable through the regulatory process;

Costs and effects of legal and administrative proceedings, settlements, investigations and claims;

Industrial, commercial and residential growth or decline in service territories or customer bases resulting from sustained downturns of the economy and the economic health of our service territories or variations in customer usage patterns, including energy efficiency efforts and use of alternative energy sources, such as self-generation and distributed generation technologies;

Federal and state regulations, laws and other efforts designed to promote and expand the use of energy efficiency measures and distributed generation technologies, such as private solar and battery storage, in Duke Energy service territories could result in customers leaving the electric distribution system, excess generation resources as well as stranded costs;

Advancements in technology;

Additional competition in electric and natural gas markets and continued industry consolidation;

The influence of weather and other natural phenomena on operations, including the economic, operational and other effects of severe storms, hurricanes, droughts, earthquakes and tornadoes, including extreme weather associated with climate change;

The ability to successfully operate electric generating facilities and deliver electricity to customers including direct or indirect effects to the company resulting from an incident that affects the U.S. electric grid or generating resources;

The ability to obtain the necessary permits and approvals and to complete necessary or desirable pipeline expansion or infrastructure projects in our natural gas business;

Operational interruptions to our natural gas distribution and transmission activities;

The availability of adequate interstate pipeline transportation capacity and natural gas supply;

The impact on facilities and business from a terrorist attack, cybersecurity threats, data security breaches, operational accidents, information technology failures or other catastrophic events, such as fires, explosions, pandemic health events or other similar occurrences;

The inherent risks associated with the operation of nuclear facilities, including environmental, health, safety, regulatory and financial risks, including the financial stability of third-party service providers;

The timing and extent of changes in commodity prices and interest rates and the ability to recover such costs through the regulatory process, where appropriate, and their impact on liquidity positions and the value of underlying assets;

The results of financing efforts, including the ability to obtain financing on favorable terms, which can be affected by various factors, including credit ratings, interest rate fluctuations, compliance with debt covenants and conditions and general market and economic conditions;

Credit ratings of the Duke Energy Registrants may be different from what is expected;

Declines in the market prices of equity and fixed-income securities and resultant cash funding requirements for defined benefit pension plans, other post-retirement benefit plans and nuclear decommissioning trust funds;

Construction and development risks associated with the completion of the Duke Energy Registrants’ capital investment projects, including risks related to financing, obtaining and complying with terms of permits, meeting construction budgets and schedules and satisfying operating and environmental performance standards, as well as the ability to recover costs from customers in a timely manner, or at all;

Changes in rules for regional transmission organizations, including changes in rate designs and new and evolving capacity markets, and risks related to obligations created by the default of other participants;

The ability to control operation and maintenance costs;

The level of creditworthiness of counterparties to transactions;

Employee workforce factors, including the potential inability to attract and retain key personnel;

The ability of subsidiaries to pay dividends or distributions to Duke Energy Corporation holding company (the Parent);



◦FORWARD LOOKING STATEMENTS	State, federal and foreign legislative and regulatory initiatives, including costs of compliance with existing and future environmental requirements, including those related to climate change, as well as rulings that affect cost and investment recovery or have an impact on rate structures or market prices;


◦	The extent and timing of costs and liabilities to comply with federal and state laws, regulations and legal requirements related to coal ash remediation, including amounts for required closure of certain ash impoundments, are uncertain and difficult to estimate;


◦	The ability to recover eligible costs, including amounts associated with coal ash impoundment retirement obligations and costs related to significant weather events, and to earn an adequate return on investment through rate case proceedings and the regulatory process;


◦	The costs of decommissioning Crystal River Unit 3 and other nuclear facilities could prove to be more extensive than amounts estimated and all costs may not be fully recoverable through the regulatory process;


◦	~~Costs and effects of legal and administrative proceedings, settlements, investigations and claims;~~


◦	Industrial, commercial and residential growth or decline in service territories or customer bases resulting from sustained downturns of the economy and the economic health of our service territories or variations in customer usage patterns, including energy efficiency efforts and use of alternative energy sources, such as self-generation and distributed generation technologies;


◦	Federal and state regulations, laws and other efforts designed to promote and expand the use of energy efficiency measures and distributed generation technologies, such as private solar and battery storage, in Duke Energy service territories could result in customers leaving the electric distribution system, excess generation resources as well as stranded costs;


◦	~~Advancements in technology;~~


◦	~~Additional competition in electric and natural gas markets and continued industry consolidation;~~


◦	The influence of weather and other natural phenomena on operations, including the economic, operational and other effects of severe storms, hurricanes, droughts, earthquakes and tornadoes, including extreme weather associated with climate change;


◦	The ability to successfully operate electric generating facilities and deliver electricity to customers including direct or indirect effects to the company resulting from an incident that affects the U.S. electric grid or generating resources;


◦	~~The ability to complete necessary or desirable pipeline expansion or infrastructure projects in our natural gas business;~~


◦	~~Operational interruptions to our natural gas distribution and transmission activities;~~


◦	~~The availability of adequate interstate pipeline transportation capacity and natural gas supply;~~


◦	The impact on facilities and business from a terrorist attack, cybersecurity threats, data security breaches and other catastrophic events, such as fires, explosions, pandemic health events or other similar occurrences;


◦	The inherent risks associated with the operation and potential construction of nuclear facilities, including environmental, health, safety, regulatory and financial risks, including the financial stability of third-party service providers;


◦	The timing and extent of changes in commodity prices and interest rates and the ability to recover such costs through the regulatory process, where appropriate, and their impact on liquidity positions and the value of underlying assets;


◦	The results of financing efforts, including the ability to obtain financing on favorable terms, which can be affected by various factors, including credit ratings, interest rate fluctuations and general economic conditions;


◦	~~Credit ratings of the Duke Energy Registrants may be different from what is expected;~~


◦	Declines in the market prices of equity and fixed-income securities and resultant cash funding requirements for defined benefit pension plans, other post-retirement benefit plans and nuclear decommissioning trust funds;

◦


◦	Changes in rules for regional transmission organizations, including changes in rate designs and new and evolving capacity markets, and risks related to obligations created by the default of other participants;


◦	~~The ability to control operation and maintenance costs;~~


◦	~~The level of creditworthiness of counterparties to transactions;~~


◦	~~Employee workforce factors, including the potential inability to attract and retain key personnel;~~


◦	~~The ability of subsidiaries to pay dividends or distributions to Duke Energy Corporation holding company (the Parent);~~


◦	~~The performance of projects undertaken by our nonregulated businesses and the success of efforts to invest in and develop new opportunities;~~


◦	~~The effect of accounting pronouncements issued periodically by accounting standard-setting bodies;~~


◦	~~Substantial revision to the U.S. tax code, such as changes to the corporate tax rate or material change in the deductibility of interest;~~


◦	~~The impact of potential goodwill impairments;~~


◦	~~The ability to successfully complete future merger, acquisition or divestiture plans;~~


◦	~~The ability to successfully integrate the natural gas businesses following the acquisition of Piedmont Natural Gas Company, Inc. and realize anticipated benefits; and~~


◦	~~The ability to implement our business strategy.~~

The performance of projects undertaken by our nonregulated businesses and the success of efforts to invest in and develop new opportunities;

The effect of accounting pronouncements issued periodically by accounting standard-setting bodies;

The impact of U.S. tax legislation to our financial condition, results of operations or cash flows and our credit ratings;

The impacts from potential impairments of goodwill or equity method investment carrying values; and

The ability to implement our business strategy, including enhancing existing technology systems.

Additional risks and uncertainties are identified and discussed in the Duke Energy Registrants' reports filed with the SEC and available at the SEC's website at ~~www.sec.gov.~~sec.gov. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than described. Forward-looking statements speak only as of the date they are made and the Duke Energy Registrants expressly disclaim an obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

~~PART I. FINANCIAL INFORMATION~~



GLOSSARY OF TERMS

Glossary of Terms

The following terms or acronyms used in this Form 10-Q are defined below:



Term or Acronym	Definition

2013 Settlement	Revised and Restated Stipulation and Settlement Agreement approved in November 2013 among Duke Energy Florida, the Florida OPC and other customer advocates

2017 Settlement	Second Revised and Restated Settlement Agreement in 2017 among Duke Energy Florida, the Florida OPC and other customer advocates, which replaces and supplants the 2013 Settlement

ACP	Atlantic Coast Pipeline, LLC, a limited liability company owned by Dominion, Duke Energy and Southern Company Gas

ACP pipeline	The approximately 600-mile proposed interstate natural gas pipeline

AFS	Available for Sale

AFUDC	Allowance for funds used during construction

the Agents	Wells Fargo Securities, LLC, Citigroup Global Market Inc., J.P. Morgan Securities, LLC

ALJ	Administrative Law Judge

AMI	Advanced Metering Infrastructure

AMT	Alternative Minimum Tax

AOCI	Accumulated Other Comprehensive Income (Loss)

ARO	Asset retirement obligations

ATM	At-the-market

Beckjord	Beckjord Generating Station

Belews Creek	Belews Creek Steam Station

Bison	Bison Insurance Company Limited

Cardinal	Cardinal Pipeline Company, LLC

CC	Combined Cycle

CCR	Coal Combustion Residuals

Citrus County CC	Citrus County Combined Cycle Facility

Coal Ash Act	North Carolina Coal Ash Management Act of 2014

the Company	Duke Energy Corporation and its subsidiaries

Constitution	Constitution Pipeline Company, LLC

CPCN	Certificate of Public Convenience and Necessity

CPRE	Competitive Procurement of Renewable Energy

CRC	Cinergy Receivables Company LLC

Crystal River Unit 3	Crystal River Unit 3 Nuclear Plant

CWA	Clean Water Act

D.C. Circuit Court	U.S. Court of Appeals for the District of Columbia Circuit

DEFPF	Duke Energy Florida Project Finance, LLC

DEFR	Duke Energy Florida Receivables, LLC

DEPR	Duke Energy Progress Receivables, LLC

DERF	Duke Energy Receivables Finance Company, LLC

DRIP	Dividend Reinvestment Program

Duke Energy	Duke Energy Corporation (collectively with its subsidiaries)

Duke Energy Ohio	Duke Energy Ohio, Inc.

Duke Energy Progress	Duke Energy Progress, LLC



GLOSSARY OF TERMS



Duke Energy Carolinas	Duke Energy Carolinas, LLC

Duke Energy Florida	Duke Energy Florida, LLC

Duke Energy Indiana	Duke Energy Indiana, LLC

Duke Energy Kentucky	Duke Energy Kentucky, Inc.

Duke Energy Registrants	Duke Energy, Duke Energy Carolinas, Progress Energy, Duke Energy Progress, Duke Energy Florida, Duke Energy Ohio, Duke Energy Indiana and Piedmont

the EDA	Equity Distribution Agreement

EDIT	Excess deferred income tax

EPA	U.S. Environmental Protection Agency

EPC	Engineering, Procurement and Construction agreement

EPS	Earnings Per Share

ESP	Electric Security Plan

ETR	Effective tax rate

Exchange Act	Securities Exchange Act of 1934

FASB	Financial Accounting Standards Board

FERC	Federal Energy Regulatory Commission

FES	FirstEnergy Solutions Corp.

Fitch	Fitch Ratings, Inc.

Fluor	Fluor Enterprises, Inc.

FPSC	Florida Public Service Commission

FTR	Financial transmission rights

FV-NI	Fair value through net income

GAAP	Generally accepted accounting principles in the U.S.

GAAP Reported Earnings	Net Income Attributable to Duke Energy Corporation

GAAP Reported EPS	Diluted EPS Attributable to Duke Energy Corporation common stockholders

GWh	Gigawatt-hours

Hardy Storage	Hardy Storage Company, LLC

HLBV	Hypothetical Liquidation at Book Value

ICPA	Inter-Company Power Agreement

IGCC	Integrated Gasification Combined Cycle

IMR	Integrity Management Rider

IRP	Integrated Resource Plan

IRS	Internal Revenue Service

Investment Trusts	NDTF investments and grantor trusts of Duke Energy Progress, Duke Energy Florida and Duke Energy Indiana

IURC	Indiana Utility Regulatory Commission

JDA	Joint Dispatch Agreement

KPSC	Kentucky Public Service Commission

Lee Nuclear Station	William States Lee III Nuclear Station

MGP	Manufactured gas plant

MISO	Midcontinent Independent System Operator, Inc.

MMBtu	Million British Thermal Unit

Moody's	Moody's Investors Service, Inc.



GLOSSARY OF TERMS



MW	Megawatt

MWh	Megawatt-hour

NAV	Net asset value

NCDEQ	North Carolina Department of Environmental Quality (formerly the North Carolina Department of Environment and Natural Resources)

NCUC	North Carolina Utilities Commission

NDTF	Nuclear decommissioning trust funds

NMC	National Methanol Company

NPDES	National Pollutant Discharge Elimination System

NPNS	Normal purchase/normal sale

NRC	U.S. Nuclear Regulatory Commission

OPEB	Other Post-Retirement Benefit Obligations

ORS	South Carolina Office of Regulatory Staff

OTTI	Other-than-temporary impairment

OVEC	Ohio Valley Electric Corporation

Piedmont	Piedmont Natural Gas Company, Inc.

Piedmont Term Loan	Term loan facility with commitments totaling $350M entered in June 2017

Pine Needle	Pine Needle LNG Company, LLC

Pioneer	Pioneer Transmission, LLC

PJM	PJM Interconnection, LLC

PMPA	Piedmont Municipal Power Agency

PPAs	Purchase Power Agreements

Progress Energy	Progress Energy, Inc.

PSCSC	Public Service Commission of South Carolina

PUCO	Public Utilities Commission of Ohio

REC	Renewable Energy Certificate

REC Solar	REC Solar Corp.

ROU assets	Right-of-use assets

RRBA	Roanoke River Basin Association

SELC	Southern Environmental Law Center

S&P	Standard & Poor's Rating Services

Subsidiary Registrants	Duke Energy Carolinas, Progress Energy, Duke Energy Progress, Duke Energy Florida, Duke Energy Ohio, Duke Energy Indiana and Piedmont

the Tax Act	Tax Cuts and Jobs Act

TPUC	Tennessee Public Utility Commission

U.S.	United States

VIE	Variable Interest Entity

WACC	Weighted Average Cost of Capital

WNA	Weather normalization adjustment

W.S. Lee CC	William States Lee Combined Cycle Facility



FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS

DUKE ENERGY CORPORATION

Condensed Consolidated Statements of Operations

(Unaudited)


	Three Months Ended						Nine Months Ended						Three Months Ended						Six Months Ended
	September 30,						September 30,						June 30,						June 30,
(in millions, except per-share amounts)	2017			2016			2017			2016			2019			2018			2019			2018
Operating Revenues
Regulated electric	$	6,091		$	6,303		$	16,122		$	16,321		$	5,423		$	5,178		$	10,708		$	10,462
Regulated natural gas	247			89			1,168			355			280			291			1,008			991
Nonregulated electric and other	144			184			476			490			170			174			320			325
Total operating revenues	6,482			6,576			17,766			17,166			5,873			5,643			12,036			11,778
Operating Expenses
Fuel used in electric generation and purchased power	1,863			2,031			4,853			5,140			1,641			1,574			3,250			3,250
Cost of natural gas	68			6			402			64			76			89			403			402
Operation, maintenance and other	1,442			1,460			4,282			4,227			1,434			1,544			2,853			3,008
Depreciation and amortization	900			819			2,594			2,402			1,089			973			2,178			1,940
Property and other taxes	313			302			924			887			334			315			677			631
Impairment charges	207			10			216			14			4			172			4			215
Total operating expenses	4,793			4,628			13,271			12,734			4,578			4,667			9,365			9,446
Gains on Sales of Other Assets and Other, net	6			6			24			21
Gains (Losses) on Sales of Other Assets and Other, net													3			3			—			(97		)
Operating Income	1,695			1,954			4,519			4,453			1,298			979			2,671			2,235
Other Income and Expenses
Equity in earnings (losses) of unconsolidated affiliates	36			(60		)	101			(37		)
Equity in earnings of unconsolidated affiliates													44			36			87			12
Other income and expenses, net	88			86			255			237			89			110			204			196
Total other income and expenses	124			26			356			200			133			146			291			208
Interest Expense	498			464			1,475			1,431			542			518			1,085			1,033
Income From Continuing Operations Before Income Taxes	1,321			1,516			3,400			3,222			889			607			1,877			1,410
Income Tax Expense from Continuing Operations	364			515			1,035			1,020
Income Tax Expense From Continuing Operations													141			100			236			281
Income From Continuing Operations	957			1,001			2,365			2,202			748			507			1,641			1,129
(Loss) Income From Discontinued Operations, net of tax	(2		)	180			(4		)	190
Loss From Discontinued Operations, net of tax													—			(5		)	—			(5		)
Net Income	955			1,181			2,361			2,392			748			502			1,641			1,124
Less: Net Income Attributable to Noncontrolling Interests	1			5			5			13
Less: Net (Loss) Income Attributable to Noncontrolling Interests													(84		)	2			(91		)	4
Less: Preferred Dividends													12			—			12			—
Net Income Attributable to Duke Energy Corporation	$	954		$	1,176		$	2,356		$	2,379		$	820		$	500		$	1,720		$	1,120

Earnings Per Share – Basic and Diluted
Income from continuing operations attributable to Duke Energy Corporation common stockholders
Basic	$	1.36		$	1.44		$	3.37		$	3.19
Diluted	$	1.36		$	1.44		$	3.37		$	3.18
Income (Loss) from discontinued operations attributable to Duke Energy Corporation common stockholders
Basic	$	—		$	0.26		$	(0.01	)	$	0.26
Diluted	$	—		$	0.26		$	(0.01	)	$	0.26
Basic and Diluted													$	1.12		$	0.72		$	2.36		$	1.60
Loss from discontinued operations attributable to Duke Energy Corporation common stockholders
Basic and Diluted													$	—		$	(0.01	)	$	—		$	(0.01	)
Net income attributable to Duke Energy Corporation common stockholders
Basic	$	1.36		$	1.70		$	3.36		$	3.45
Diluted	$	1.36		$	1.70		$	3.36		$	3.44
Basic and Diluted													$	1.12		$	0.71		$	2.36		$	1.59
Weighted average shares outstanding
Basic	700			689			700			689			728			703			728			702
Diluted	700			691			700			690			728			704			728			702

See Notes to Condensed Consolidated Financial Statements

~~PART I~~



FINANCIAL STATEMENTS

DUKE ENERGY CORPORATION

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)



	Three Months Ended						Six Months Ended
	June 30,						June 30,
(in millions)	2019			2018			2019			2018
Net Income	$	748		$	502		$	1,641		$	1,124
Other Comprehensive (Loss) Income, net of tax
Pension and OPEB adjustments	3			1			3			2
Net unrealized (losses) gains on cash flow hedges	(29		)	1			(46		)	13
Reclassification into earnings from cash flow hedges	2			(2		)	3			(1		)
Unrealized gains (losses) on available-for-sale securities	4			(2		)	8			(5		)
Other Comprehensive (Loss) Income, net of tax	(20		)	(2		)	(32		)	9
Comprehensive Income	728			500			1,609			1,133
Less: Comprehensive (Loss) Income Attributable to Noncontrolling Interests	(84		)	2			(91		)	4
Less: Preferred Dividends	12			—			12			—
Comprehensive Income Attributable to Duke Energy Corporation	$	800		$	498		$	1,688		$	1,129

See Notes to Condensed Consolidated Financial Statements



FINANCIAL STATEMENTS

Three Months Ended Nine Months Ended
September 30, September 30,
(in millions) 2017
2016
2017
2016
Net Income $ 955
$ 1,181
$ 2,361
$ 2,392
Other Comprehensive Income, net of tax
Foreign currency translation adjustments —
(12 ) —
95
Pension and OPEB adjustments —
—
2
2
Net unrealized gains (losses) on cash flow hedges 2
6
(2 ) (19 )
Reclassification into earnings from cash flow hedges (2 ) 1
3
3
Unrealized gains on available-for-sale securities 2
—
10
7
Other Comprehensive Income (Loss), net of tax 2
(5 ) 13
88
Comprehensive Income 957
1,176
2,374
2,480
Less: Comprehensive Income Attributable to Noncontrolling Interests 1
4
5
16
Comprehensive Income Attributable to Duke Energy Corporation $ 956
$ 1,172
$ 2,369
$ 2,464

~~PART I~~

DUKE ENERGY CORPORATION

Condensed Consolidated Balance Sheets

(Unaudited)


(in millions)	September 30, 2017			December 31, 2016			June 30, 2019			December 31, 2018
ASSETS
Current Assets
Cash and cash equivalents	$	282		$	392		$	336		$	442
Receivables (net of allowance for doubtful accounts of $13 at 2017 and $14 at 2016)	528			751
Receivables of VIEs (net of allowance for doubtful accounts of $54 at 2017 and 2016)	2,089			1,893
Receivables (net of allowance for doubtful accounts of $16 at 2019 and 2018)							646			962
Receivables of VIEs (net of allowance for doubtful accounts of $55 at 2019 and 2018)							2,153			2,172
Inventory	3,265			3,522			3,189			3,084
Regulatory assets (includes $51 at 2017 and $50 at 2016 related to VIEs)	1,109			1,023
Other	433			458
Regulatory assets (includes $52 at 2019 and 2018 related to VIEs)							1,918			2,005
Other (includes $140 at 2019 and $162 at 2018 related to VIEs)							1,267			1,049
Total current assets	7,706			8,039			9,509			9,714
Property, Plant and Equipment
Cost	125,582			121,397			141,363			134,458
Accumulated depreciation and amortization	(41,161		)	(39,406		)	(44,482		)	(43,126		)
Generation facilities to be retired, net	441			529			317			362
Net property, plant and equipment	84,862			82,520			97,198			91,694
Other Noncurrent Assets
Goodwill	19,418			19,425			19,303			19,303
Regulatory assets (includes $1,101 at 2017 and $1,142 at 2016 related to VIEs)	13,367			12,878
Regulatory assets (includes $1,019 at 2019 and $1,041 at 2018 related to VIEs)							13,393			13,617
Nuclear decommissioning trust funds	6,814			6,205			7,621			6,720
Operating lease right-of-use assets, net							1,735			—
Investments in equity method unconsolidated affiliates	1,366			925			1,715			1,409
Other	2,792			2,769
Other (includes $289 at 2019 and $261 at 2018 related to VIEs)							2,975			2,935
Total other noncurrent assets	43,757			42,202			46,742			43,984
Total Assets	$	136,325		$	132,761		$	153,449		$	145,392
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable	$	2,645		$	2,994		$	2,512		$	3,487
Notes payable and commercial paper	1,899			2,487			3,793			3,410
Taxes accrued	627			384			521			577
Interest accrued	538			503			564			559
Current maturities of long-term debt (includes $215 at 2017 and $260 at 2016 related to VIEs)	2,485			2,319
Current maturities of long-term debt (includes $232 at 2019 and $227 at 2018 related to VIEs)							2,698			3,406
Asset retirement obligations	619			411			739			919
Regulatory liabilities	273			409			600			598
Other	1,734			2,044			2,020			2,085
Total current liabilities	10,820			11,551			13,447			15,041
Long-Term Debt (includes $4,219 at 2017 and $3,587 at 2016 related to VIEs)	48,929			45,576
Long-Term Debt (includes $4,070 at 2019 and $3,998 at 2018 related to VIEs)							54,342			51,123
Other Noncurrent Liabilities
Deferred income taxes	15,058			14,155			8,532			7,806
Asset retirement obligations	9,586			10,200			11,889			9,548
Regulatory liabilities	7,027			6,881			15,294			14,834
Operating lease liabilities							1,502			—
Accrued pension and other post-retirement benefit costs	1,105			1,111			959			988
Investment tax credits	534			493			569			568
Other	1,624			1,753
Other (includes $222 at 2019 and $212 at 2018 related to VIEs)							1,583			1,650
Total other noncurrent liabilities	34,934			34,593			40,328			35,394
Commitments and Contingencies
Equity
Common stock, $0.001 par value, 2 billion shares authorized; 700 million shares outstanding at 2017 and 2016	1			1
Preferred stock, $0.001 par value, 40 million depositary shares authorized and outstanding at 2019							973			—
Common stock, $0.001 par value, 2 billion shares authorized; 728 million shares outstanding at 2019 and 727 million shares outstanding at 2018							1			1
Additional paid-in capital	38,774			38,741			40,885			40,795
Retained earnings	2,936			2,384			3,502			3,113
Accumulated other comprehensive loss	(80		)	(93		)	(148		)	(92		)
Total Duke Energy Corporation stockholders' equity	41,631			41,033			45,213			43,817
Noncontrolling interests	11			8			119			17
Total equity	41,642			41,041			45,332			43,834
Total Liabilities and Equity	$	136,325		$	132,761		$	153,449		$	145,392

See Notes to Condensed Consolidated Financial Statements

~~PART I~~



FINANCIAL STATEMENTS

DUKE ENERGY CORPORATION

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Nine Months Ended						Six Months Ended
	September 30,						June 30,
(in millions)	2017			2016			2019			2018
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	2,361		$	2,392		$	1,641		$	1,124
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and accretion (including amortization of nuclear fuel)	2,990			2,847			2,483			2,250
Equity component of AFUDC	(175		)	(140		)	(67		)	(106		)
Gains on sales of other assets	(28		)	(27		)
Losses on sales of other assets							—			97
Impairment charges	216			279			4			215
Deferred income taxes	1,016			648			527			289
Equity in earnings of unconsolidated affiliates	(101		)	(34		)	(87		)	(12		)
Accrued pension and other post-retirement benefit costs	19			12			4			31
Contributions to qualified pension plans	(8		)	—			—			(141		)
Payments for asset retirement obligations	(420		)	(443		)	(336		)	(245		)
Payment for disposal of other assets							—			(105		)
Other rate case adjustments							—			37
Provision for rate refunds							57			281
(Increase) decrease in
Net realized and unrealized mark-to-market and hedging transactions	4			36			(11		)	7
Receivables	80			(276		)	304			(27		)
Inventory	248			455			(110		)	70
Other current assets	(176		)	(163		)	(265		)	21
Increase (decrease) in
Accounts payable	(554		)	(207		)	(700		)	(142		)
Taxes accrued	233			417			(56		)	(58		)
Other current liabilities	(532		)	(157		)	(378		)	(214		)
Other assets	(160		)	(64		)	7			(112		)
Other liabilities	(2		)	36			39			42
Net cash provided by operating activities	5,011			5,611			3,056			3,302
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(5,841		)	(5,252		)	(5,465		)	(4,375		)
Contributions to equity method investments	(370		)	(198		)	(162		)	(140		)
Purchases of available-for-sale securities	(3,170		)	(4,048		)
Proceeds from sales and maturities of available-for-sale securities	3,199			4,107
Change in restricted cash	(29		)	(34		)
Purchases of debt and equity securities							(2,316		)	(1,908		)
Proceeds from sales and maturities of debt and equity securities							2,302			1,866
Other	(149		)	(130		)	(147		)	(88		)
Net cash used in investing activities	(6,360		)	(5,555		)	(5,788		)	(4,645		)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the:
Issuance of long-term debt	5,710			8,647			4,622			2,727
Issuance of common stock related to employee benefit plans	—			7
Issuance of preferred stock							973			—
Issuance of common stock							27			820
Payments for the redemption of long-term debt	(2,035		)	(988		)	(2,155		)	(2,190		)
Proceeds from the issuance of short-term debt with original maturities greater than 90 days	265			1,424			240			201
Payments for the redemption of short-term debt with original maturities greater than 90 days	(237		)	(492		)	(299		)	(160		)
Notes payable and commercial paper	(647		)	(1,579		)	383			1,090
Dividends paid	(1,825		)	(1,731		)	(1,312		)	(1,199		)
Other	8			(22		)	143			(24		)
Net cash provided by financing activities	1,239			5,266			2,622			1,265
Changes in cash and cash equivalents associated with assets held for sale	—			11
Net (decrease) increase in cash and cash equivalents	(110		)	5,333
Cash and cash equivalents at beginning of period	392			383
Cash and cash equivalents at end of period	$	282		$	5,716
Net decrease in cash, cash equivalents and restricted cash							(110		)	(78		)
Cash, cash equivalents and restricted cash at beginning of period							591			505
Cash, cash equivalents and restricted cash at end of period							$	481		$	427
Supplemental Disclosures:
Significant non-cash transactions:
Accrued capital expenditures	$	740		$	631		$	917		$	978
Non-cash dividends							54			52

~~PART I~~

~~DUKE ENERGY CORPORATION – DUKE ENERGY CAROLINAS, LLC – PROGRESS ENERGY, INC. –~~

~~DUKE ENERGY PROGRESS, LLC – DUKE ENERGY FLORIDA, LLC – DUKE ENERGY OHIO, INC. – DUKE ENERGY INDIANA, LLC – PIEDMONT NATURAL GAS COMPANY, INC.~~

~~Combined Notes to Condensed Consolidated Financial Statements – (Unaudited) – (Continued)~~

5.4. COMMITMENTS AND CONTINGENCIES

ENVIRONMENTAL

The Duke Energy Registrants are subject to federal, state and local regulations regarding air and water quality, hazardous and solid waste disposal, coal ash and other environmental matters. These regulations can be changed from time to time, imposing new obligations on the Duke Energy Registrants. The following environmental matters impact all ~~of the~~ Duke Energy Registrants.

Remediation Activities

In addition to ~~asset retirement obligations (ARO)~~AROs recorded as a result of various environmental regulations, the Duke Energy Registrants are responsible for environmental remediation at various sites. These include certain properties that are part of ongoing operations and sites formerly owned or used by Duke Energy entities. These sites are in various stages of investigation, remediation and monitoring. Managed in conjunction with relevant federal, state and local agencies, remediation activities vary based upon site conditions and location, remediation requirements, complexity and sharing of responsibility. If remediation activities involve joint and several liability provisions, strict liability, or cost recovery or contribution actions, the Duke Energy Registrants could potentially be held responsible for environmental impacts caused by other potentially responsible parties and may also benefit from insurance policies or contractual indemnities that cover some or all cleanup costs. Liabilities are recorded when losses become probable and are reasonably estimable. The total costs that may be incurred cannot be estimated because the extent of environmental impact, allocation among potentially responsible parties, remediation alternatives and/or regulatory decisions have not yet been determined at all sites. Additional costs associated with remediation activities are likely to be incurred in the future and could be significant. Costs are typically expensed as Operation, maintenance and other on the Condensed Consolidated Statements of Operations unless regulatory recovery of the costs is deemed probable.



FINANCIAL STATEMENTS	COMMITMENTS AND CONTINGENCIES

The following tables contain information regarding reserves for probable and estimable costs related to the various environmental sites. These reserves are recorded in Accounts Payable within Current Liabilities and Other within Other Noncurrent Liabilities on the Condensed Consolidated Balance Sheets.

Nine Months Ended September 30, 2017
Duke
Duke
Duke
Duke
Duke

Duke
Energy
Progress
Energy
Energy
Energy
Energy

(in millions) Energy
Carolinas
Energy
Progress
Florida
Ohio
Indiana
Piedmont
Balance at beginning of period $ 98
$ 10
$ 18
$ 3
$ 14
$ 59
$ 10
$ 1
Provisions/adjustments (1 ) 2
1
—
1
(3 ) (2 ) 1
Cash reductions (13 ) (2 ) (3 ) —
(3 ) (7 ) (1 ) —
Balance at end of period $ 84
$ 10
$ 16
$ 3
$ 12
$ 49
$ 7
$ 2

Nine Months Ended September 30, 2016
Duke
Duke
Duke
Duke
Duke

Duke
Energy
Progress
Energy
Energy
Energy
Energy

(in millions) Energy
Carolinas
Energy
Progress
Florida
Ohio
Indiana
Piedmont
Balance at beginning of period $ 94
$ 10
$ 17
$ 3
$ 14
$ 54
$ 12
$ 1
Provisions/adjustments 34
5
5
2
3
6
20
—
Cash reductions (12 ) (4 ) (6 ) (2 ) (4 ) (1 ) (2 ) —
Balance at end of period $ 116
$ 11
$ 16
$ 3
$ 13
$ 59
$ 30
$ 1



	Six Months Ended June 30, 2019
				Duke						Duke			Duke		Duke			Duke
	Duke			Energy			Progress			Energy			Energy		Energy			Energy
(in millions)	Energy			Carolinas			Energy			Progress			Florida		Ohio			Indiana		Piedmont
Balance at beginning of period	$	77		$	11		$	11		$	4		$	6	$	48		$	5	$	2
Provisions/adjustments	9			4			3			2			1		2			—		—
Cash reductions	(22		)	(3		)	(1		)	(1		)	—		(18		)	—		—
Balance at end of period	$	64		$	12		$	13		$	5		$	7	$	32		$	5	$	2



	Six Months Ended June 30, 2018
				Duke						Duke			Duke			Duke			Duke
	Duke			Energy			Progress			Energy			Energy			Energy			Energy
(in millions)	Energy			Carolinas			Energy			Progress			Florida			Ohio			Indiana			Piedmont
Balance at beginning of period	$	81		$	10		$	15		$	3		$	12		$	47		$	5		$	2
Provisions/adjustments	1			2			2			2			(1		)	(3		)	1			—
Cash reductions	(14		)	(1		)	(2		)	(1		)	(1		)	(9		)	(1		)	—
Balance at end of period	$	68		$	11		$	15		$	4		$	10		$	35		$	5		$	2

Additional losses in excess of recorded reserves that could be incurred for the stages of investigation, remediation and monitoring for environmental sites that have been evaluated at this time are not material except as presented in the table below.



(in millions)
Duke Energy	$	51
Duke Energy Carolinas	12
Duke Energy Ohio	29
Piedmont	2

(in millions)
Duke Energy $ 58
Duke Energy Carolinas 20
Duke Energy Ohio 30
Duke Energy Indiana 3
Piedmont 2

~~North Carolina and South Carolina Ash Basins~~

In February 2014, a break in a stormwater pipe beneath an ash basin at Duke Energy Carolinas’ retired Dan River Steam Station caused a release of ash basin water and ash into the Dan River. Duke Energy Carolinas estimates 30,000 to 39,000 tons of ash and 24 million to 27 million gallons of basin water were released into the river. In July 2014, Duke Energy completed remediation work identified by the EPA. Future costs related to the Dan River release, including future civil enforcement, future regulatory directives, natural resources damages, future claims or litigation and long-term environmental impact costs, cannot be reasonably estimated at this time.

~~PART I~~

~~DUKE ENERGY CORPORATION – DUKE ENERGY CAROLINAS, LLC – PROGRESS ENERGY, INC. –~~

~~DUKE ENERGY PROGRESS, LLC – DUKE ENERGY FLORIDA, LLC – DUKE ENERGY OHIO, INC. – DUKE ENERGY INDIANA, LLC – PIEDMONT NATURAL GAS COMPANY, INC.~~

~~Combined Notes to Condensed Consolidated Financial Statements – (Unaudited) – (Continued)~~

The North Carolina Department of Environmental Quality (NCDEQ) has historically assessed Duke Energy Carolinas and Duke Energy Progress with Notices of Violations (NOV) for violations that were most often resolved through satisfactory corrective actions and minor, if any, fines or penalties. Subsequent to the Dan River ash release, Duke Energy Carolinas and Duke Energy Progress have been served with a higher level of NOVs, including assessed penalties for violations at L.V. Sutton Combined Cycle Plant (Sutton) and Dan River Steam Station. Duke Energy Carolinas and Duke Energy Progress cannot predict whether the NCDEQ will assess future penalties related to existing unresolved NOVs and if such penalties would be material. See "NCDEQ Notices of Violation" section below for additional discussion.

LITIGATION

~~Duke Energy~~

Duke Energy no longer has exposure to litigation matters related to the International Disposal Group as a result of the divestiture of the business in December 2016. See Note 2 for additional information related to the sale of International Energy.

~~Ash Basin Shareholder Derivative Litigation~~

Five shareholder derivative lawsuits were filed in Delaware Chancery Court related to the release at Dan River and to the management of Duke Energy’s ash basins. On October 31, 2014, the five lawsuits were consolidated in a single proceeding titled ~~In Re Duke Energy Corporation Coal Ash Derivative Litigation~~. On December 2, 2014, plaintiffs filed a Corrected Verified Consolidated Shareholder Derivative Complaint (Consolidated Complaint). The Consolidated Complaint names as defendants several current and former Duke Energy officers and directors (collectively, the Duke Energy Defendants). Duke Energy is named as a nominal defendant.

The Consolidated Complaint alleges the Duke Energy Defendants breached their fiduciary duties by failing to adequately oversee Duke Energy’s ash basins and that these breaches of fiduciary duty may have contributed to the incident at Dan River and continued thereafter. The lawsuit also asserts claims against the Duke Energy Defendants for corporate waste (relating to the money Duke Energy has spent and will spend as a result of the fines, penalties and coal ash removal) and unjust enrichment (relating to the compensation and director remuneration that was received despite these alleged breaches of fiduciary duty). The lawsuit seeks both injunctive relief against Duke Energy and restitution from the Duke Energy Defendants. On April 22, 2016, plaintiffs filed an Amended Verified Consolidated Shareholder Derivative Complaint (Amended Complaint) making the same allegations as in the Consolidated Complaint. The Duke Energy Defendants filed a motion to dismiss the Amended Complaint on June 21, 2016. On December 14, 2016, the Delaware Chancery Court entered an order dismissing the Amended Complaint. Plaintiffs filed an appeal to the Delaware Supreme Court on January 9, 2017. Oral argument was held on September 27, 2017, and a decision is pending.

On October 30, 2015, shareholder Saul Bresalier filed a shareholder derivative complaint (Bresalier Complaint) in the U.S. District Court for the District of Delaware. The lawsuit alleges that several current and former Duke Energy officers and directors (Bresalier Defendants) breached their fiduciary duties in connection with coal ash environmental issues, the post-merger change in Chief Executive Officer (CEO) and oversight of political contributions. Duke Energy is named as a nominal defendant. The Bresalier Complaint contends that the appointed Demand Review Committee failed to appropriately consider the shareholder’s earlier demand for litigation and improperly decided not to pursue claims against the Bresalier Defendants. On March 30, 2017, the court granted Defendants’ Motion to Dismiss on the claims relating to coal ash environmental issues and political contributions. As discussed below, a settlement agreement was approved for the merger-related claims in the Bresalier Complaint, and those claims were dismissed. On September 8, 2017, Bresalier filed a notice of appeal to the U.S. Court of Appeals for the Third Circuit (Third Circuit Court) challenging the dismissal of his coal ash and political contribution claims. Pursuant to a scheduling order issued by the Third Circuit Court, briefing will be complete on December 20, 2017.

~~It is not possible to predict whether Duke Energy will incur any liability or to estimate the damages, if any, it might incur in connection with these matters.~~

~~Progress Energy Merger Shareholder Litigation~~

On May 31, 2013, the Delaware Chancery Court consolidated four shareholder derivative lawsuits filed in 2012. The Court also appointed a lead plaintiff and counsel for plaintiffs and designated the case as ~~In Re Duke Energy Corporation Derivative Litigation~~ (Merger Chancery Litigation). The lawsuit names as defendants the Legacy Duke Energy Directors. Duke Energy is named as a nominal defendant. The case alleges claims for breach of fiduciary duties of loyalty and care in connection with the post-merger change in CEO.

~~Two shareholder Derivative Complaints, filed in 2012 in federal district court in Delaware, were consolidated as~~ ~~Tansey v. Rogers, et al.~~ The case alleges claims against the Legacy Duke Energy Directors for breach of fiduciary duty and waste of corporate assets, as well as claims under Section 14(a) and 20(a) of the Exchange Act. Duke Energy is named as a nominal defendant. On December 21, 2015, Plaintiff filed a Consolidated Amended Complaint asserting the same claims contained in the original complaints.

~~The Legacy Duke Energy Directors reached an agreement-in-principle to settle the Merger Chancery Litigation, conditioned on dismissal as well, of the~~ ~~Tansey v. Rogers, et al~~ case and the merger-related claims in the Bresalier Complaint discussed above, which was approved by the Delaware Chancery Court on July 13, 2017. The entire settlement amount was funded by insurance. The settlement amount, less court-approved attorney fees, totaled $20 million and was paid to Duke Energy in third quarter 2017.

~~PART I~~

~~DUKE ENERGY CORPORATION – DUKE ENERGY CAROLINAS, LLC – PROGRESS ENERGY, INC. –~~

~~DUKE ENERGY PROGRESS, LLC – DUKE ENERGY FLORIDA, LLC – DUKE ENERGY OHIO, INC. – DUKE ENERGY INDIANA, LLC – PIEDMONT NATURAL GAS COMPANY, INC.~~

~~Combined Notes to Condensed Consolidated Financial Statements – (Unaudited) – (Continued)~~

~~Price Reporting Cases~~

Duke Energy Trading and Marketing, LLC (DETM), a non-operating Duke Energy affiliate, was a defendant, along with numerous other energy companies, in four class-action lawsuits and a fifth single-plaintiff lawsuit in a consolidated federal court proceeding in Nevada. Each of these lawsuits contained similar claims that defendants allegedly manipulated natural gas markets by various means, including providing false information to natural gas trade publications and entering into unlawful arrangements and agreements in violation of the antitrust laws of the respective states. Plaintiffs sought damages in unspecified amounts. In February 2016, DETM reached agreements in principle to settle all of the pending lawsuits. Settlement of the single-plaintiff settlement was finalized and paid in March 2016. The proposed settlement of the class action lawsuits was approved by the Court and all settlement amounts, which are not material to Duke Energy, have been paid.

Duke Energy Carolinas and Duke Energy Progress

NCDEQ Closure Litigation

The Coal Ash Act requires CCR surface impoundments in North Carolina to be closed, with the closure method and timing based on a risk ranking classification determined by legislation or state regulators. The NCDEQ previously classified the impoundments at Allen, Belews Creek, Rogers, Marshall, Mayo and Roxboro as low risk and Duke Energy expected to close those sites through a combination of a cap system and a groundwater monitoring system. However, on April 1, 2019, NCDEQ issued a closure determination (NCDEQ's April 1 Order) requiring Duke Energy Carolinas and Duke Energy Progress to excavate all remaining coal ash impoundments at these facilities. On April 26, 2019, Duke Energy Carolinas and Duke Energy Progress filed Petitions for Contested Case Hearings in the Office of Administrative Hearings to challenge NCDEQ's April 1 Order. On May 9, 2019, NCDEQ issued a supplemental order requiring that closure plans be submitted on December 31, 2019, but providing that the corrective action plans are not due until March 31, 2020. Duke Energy Carolinas and Duke Energy Progress filed amended petitions on May 24, 2019, incorporating the May 9, 2019 order.

On June 14, 2019, NCDEQ filed a motion to dismiss several claims in Duke Energy Carolinas' and Duke Energy Progress' appeals. On August 2, 2019, the court entered an order granting NCDEQ's motion to dismiss several of the claims. The lawsuit will proceed on the remaining issues, including whether the NCDEQ's decision was arbitrary and capricious. Duke Energy Carolinas and Duke Energy Progress cannot predict the outcome of this matter.

Coal Ash Insurance Coverage Litigation

In March 2017, Duke Energy Carolinas and Duke Energy Progress filed a civil action in North Carolina Superior Court against various insurance providers. The lawsuit seeks payment for coal ash-related liabilities covered by third-party liability insurance policies. The insurance policies were issued between 1971 and 1986 and provide third-party liability insurance for property damage. The civil action seeks damages for breach of contract and indemnification for costs arising from the Coal Ash Act and the EPA CCR rule at 15 coal-fired plants in North Carolina and South Carolina. On May 14, 2019, the court granted an extension of stay, until September 15, 2019, to allow the parties to discuss potential resolution. If the case is not fully resolved at that time, litigation will resume. The trial is now scheduled for February 2021. Duke Energy Carolinas and Duke Energy Progress cannot predict the outcome of this matter.



FINANCIAL STATEMENTS	COMMITMENTS AND CONTINGENCIES

NCDEQ State Enforcement Actions

In the first quarter of 2013, the ~~Southern Environmental Law Center (SELC)~~SELC sent notices of intent to sue Duke Energy Carolinas and Duke Energy Progress related to alleged ~~Clean Water Act (CWA)~~CWA violations from coal ash basins at two of their coal-fired power plants in North Carolina. The NCDEQ filed enforcement actions against Duke Energy Carolinas and Duke Energy Progress alleging violations of water discharge permits and North Carolina groundwater standards. The cases have been consolidated and are being heard before a single judge in the North Carolina Superior Court.

On August 16, 2013, the NCDEQ filed an enforcement action against Duke Energy Carolinas and Duke Energy Progress related to their remaining plants in North Carolina, alleging violations of the CWA and violations of the North Carolina groundwater standards. Both of these cases have been assigned to the judge handling the enforcement actions discussed above. SELC is representing several environmental groups who have been permitted to intervene in these cases.

The court issued orders in 2016 granting Motions for Partial Summary Judgment for seven of the 14 North Carolina plants named in the enforcement actions. ~~The litigation is concluded for these seven plants. Litigation continues for the remaining seven plants.~~ On February 13, 2017, the court issued an order denying motions for partial summary judgment brought by both the environmental groups and Duke Energy Carolinas and Duke Energy ~~Progress.~~Progress for the remaining seven plants. On March 15, 2017, Duke Energy Carolinas and Duke Energy Progress filed a Notice of Appeal with the North Carolina Court of Appeals to challenge the trial court’s order. The parties were unable to reach an agreement at mediation in April ~~2017. The parties~~2017 and submitted briefs to the trial court on remaining issues to be ~~tried and a ruling is pending.~~tried. On August ~~22, 2017,~~1, 2018, the Court of Appeals dismissed the appeal and the matter is proceeding before the trial court. In light of the NCDEQ's April 1 Order, on April 29, 2019, the court decided to stay any activity in the case until August 2019, at which time the court will hold another status conference. Duke Energy Carolinas and Duke Energy Progress ~~filed a Petition for Discretionary Review, requesting~~cannot predict the North Carolina Supreme Court to accept the appeal. On August 24, 2017, SELC filed a motion to dismiss the appeal. Duke Energy Carolinas' and Duke Energy Progress’ opening appellate briefs were filed on October 12, 2017.outcome of this matter.

~~It is not possible to predict any liability or estimate any damages Duke Energy Carolinas or Duke Energy Progress might incur in connection with these matters.~~

Federal Citizens Suits

On June 13, 2016, the ~~Roanoke River Basin Association (RRBA)~~RRBA filed a federal citizen suit in the Middle District of North Carolina alleging unpermitted discharges to surface water and groundwater violations at the Mayo Plant. On August 19, 2016, Duke Energy Progress filed a Motion to Dismiss. On April 26, 2017, the court entered an order dismissing four of the claims in the federal citizen suit. Two claims relating to alleged violations of ~~National Pollutant Discharge Elimination System (NPDES)~~NPDES permit provisions survived the motion to dismiss, and Duke Energy Progress filed its response on May 10, 2017. ~~The parties are engaged in pre-trial discovery. Trial has been scheduled for July 9, 2018.~~

~~On March 16, 2017, RRBA served~~ Duke Energy Progress ~~with a Notice of Intent to Sue under the CWA~~and RRBA each filed motions for alleged violations of effluent standards and limitations at the Roxboro Plant. In anticipation of litigation, Duke Energy Progress filed a Complaint for Declaratory Relief in the U.S. District Court for the Western District of Virginiasummary judgment on ~~May 11, 2017, which was subsequently dismissed.~~ March 23, 2018. The court has not yet ruled on these motions.

On May 16, 2017, RRBA filed a federal citizen suit in the U.S. District Court for the Middle District of North Carolina, which asserts two claims relating to alleged violations of NPDES permit provisions at the Roxboro Plant and one claim relating to the use of nearby water bodies. Duke Energy Progress and RRBA each filed motions for summary judgment on April 17, 2018, and the court has not yet ruled on these motions.

On ~~June 20,~~May 8, 2018, on motion from Duke Energy Progress, the court ordered trial in both of the above matters to be consolidated. On April 5, 2019, Duke Energy Progress filed a motion to stay the case following the NCDEQ’s April 1 Order. On August 2, 2019, the court ordered that this case is stayed and shall remain stayed pending further order from the court.

On December 5, 2017, ~~RRBA~~various parties filed a federal citizen suit in the U.S. District Court for the Middle District of North Carolina ~~challenging the closure plans at the Mayo Plant under the EPA CCR Rule. Duke Energy Progress filed a motion to dismiss on August 21, 2017.~~

On August 2, 2017, RRBA filed a federal citizen suit in the U.S. District Court for the Middle District of North Carolina challenging the closure plans at the Roxboro Plant under the EPA CCR Rule. Duke Energy Progress filed a motion to dismiss on October 2, 2017.

~~On October 3, 2017, various parties served Duke Energy Carolinas with a Notice of Intent to Sue under the CWA~~ for alleged violations at Duke Energy Carolinas' Belews Creek ~~Steam Station (Belews Creek). A lawsuit may be~~under the CWA. Duke Energy Carolinas' answer to the complaint was filed ~~sixty days after service of notice.~~

~~It is not possible to predict whether~~on August 27, 2018. On October 10, 2018, Duke Energy Carolinas orfiled Motions to Dismiss for lack of standing, Motion for Judgment on the Pleadings and Motion to Stay Discovery. On January 9, 2019, the court entered an order denying Duke Energy ~~Progress will incur any liability or~~Carolinas' motion to ~~estimate~~stay discovery. There has been no ruling on the ~~damages, if any, they might incur in connection with these matters.~~

~~Five previously~~other pending motions. On April 5, 2019, Duke Energy Carolinas filed ~~cases involving~~a motion to stay the ~~Riverbend, Cape Fear, H.F. Lee, Sutton~~case following the NCDEQ’s April 1 Order. On August 2, 2019, the court ordered that this case is stayed and ~~Buck plants were dismissed or settled in 2016.~~

~~PART I~~

~~DUKE ENERGY CORPORATION – DUKE ENERGY CAROLINAS, LLC – PROGRESS ENERGY, INC. –~~

~~DUKE ENERGY PROGRESS, LLC – DUKE ENERGY FLORIDA, LLC – DUKE ENERGY OHIO, INC. – DUKE ENERGY INDIANA, LLC – PIEDMONT NATURAL GAS COMPANY, INC.~~

~~Combined Notes to Condensed Consolidated Financial Statements – (Unaudited) – (Continued)~~

~~Groundwater Contamination Claims~~

~~Beginning in May 2015, a number of residents living in the vicinity of the North Carolina facilities with ash basins received letters~~shall remain stayed pending further order from the NCDEQ advising them not to drink water from the private wells on their land tested by the NCDEQ as the samples were found to have certain substances at levels higher than the criteria set by the North Carolina Department of Health and Human Services (DHHS). Results of Comprehensive Site Assessments (CSAs) testing performed by Duke Energy under the Coal Ash Act have been consistent with historical data provided to state regulators over many years. The DHHS and NCDEQ sent follow-up letters on October 15, 2015, to residents near coal ash basins who had their wells tested, stating that private well samplings at a considerable distance from coal ash basins, as well as some municipal water supplies, contain similar levels of vanadium and hexavalent chromium, which led investigators to believe these constituents are naturally occurring. In March 2016, DHHS rescinded the advisories.court.

Duke Energy Carolinas and Duke Energy Progress have received formal demand letters from residents near Duke Energy Carolinas' and Duke Energy Progress' coal ash basins. The residents claim damages for nuisance and diminution in property value, among other things. The parties held three dayscannot predict the outcome of mediation discussions that ended at an impasse. On January 6, 2017, Duke Energy Carolinas and Duke Energy Progress received the plaintiffs' notice of their intent to file suits should the matter not settle. The NCDEQ preliminarily approved Duke Energy’s permanent water solution plans on January 13, 2017, and as a result shortly thereafter, Duke Energy issued a press release, providing additional details regarding the homeowner compensation package. This package consists of three components: (i) a $5,000 goodwill payment to each eligible well owner to support the transition to a new water supply, (ii) where a public water supply is available and selected by the eligible well owner, a stipend to cover 25 years of water bills and (iii) the Property Value Protection Plan. The Property Value Protection Plan is a program offered by Duke Energy designed to guarantee eligible plant neighbors the fair market value of their residential property should they decide to sell their property during the time that the plan is offered. Duke Energy Carolinas and Duke Energy Progress have recognized reserves of $19 million and $4 million, respectively. On August 23, 2017, a class action suit was filed in Wake County Superior Court, North Carolina, against Duke Energy Carolinas and Duke Energy Progress on behalf of certain property owners living near coal ash impoundments at Allen, Asheville, Belews Creek, Buck, Cliffside, Lee, Marshall, Mayo and Roxboro. The class is defined as those who are “well-eligible” under the Coal Ash Act or those to whom Duke Energy has promised a permanent replacement water supply and seeks declaratory and injunctive relief, along with compensatory damages. Plaintiffs allege that Duke Energy’s improper maintenance of coal ash impoundments caused harm, particularly through groundwater contamination. Despite NCDEQ’s preliminary approval, Plaintiffs contend that Duke Energy’s proposed permanent water solutions plan fails to comply with the Coal Ash Act. On September 28, 2017, Duke Energy Carolinas and Duke Energy Progress filed a Motion to Dismiss and Motion to Strike the class designation.

On September 14, 2017, a complaint was filed against Duke Energy Progress in New Hanover County Superior Court by a group of homeowners residing approximately one mile from Duke Energy Progress' Sutton Steam Plant (Sutton). The homeowners allege that coal ash constituents have been migrating from ash impoundments at Sutton into their groundwater for decades and that in 2015, Duke Energy Progress discovered these releases of coal ash, but failed to notify any officials or neighbors and failed to take remedial action. The homeowners claim unspecified physical and mental injuries as a result of consuming their well water and seek actual damages for personal injury, medical monitoring and punitive damages.

~~It is not possible to estimate the maximum exposure of loss, if any, that may occur in connection with current claims or future claims, which might be made by these residents.~~matters.

Asbestos-related Injuries and Damages Claims

Duke Energy Carolinas has experienced numerous claims for indemnification and medical cost reimbursement related to asbestos exposure. These claims relate to damages for bodily injuries alleged to have arisen from exposure to or use of asbestos in connection with construction and maintenance activities conducted on its electric generation plants prior to 1985. As of ~~September~~June 30, ~~2017,~~2019, there were ~~120~~145 asserted claims for non-malignant cases with cumulative relief sought of up to ~~$29~~$38 million, and 5750 asserted claims for malignant cases with cumulative relief sought of up to $16 million. Based on Duke Energy Carolinas’ experience, it is expected that the ultimate resolution of most of these claims likely will be less than the amount claimed.

Duke Energy Carolinas has recognized asbestos-related reserves of ~~$486~~$607 million at ~~September~~June 30, ~~2017,~~2019, and ~~$512~~$630 million at December 31, ~~2016.~~2018. These reserves are classified in Other within Other Noncurrent Liabilities and Other within Current Liabilities on the Condensed Consolidated Balance Sheets. These reserves are based upon ~~the minimum amount of the range of loss~~Duke Energy Carolinas' best estimate for current and future asbestos claims through ~~2036,~~2038 and are recorded on an undiscounted ~~basis and incorporate anticipated inflation.~~basis. In light of the uncertainties inherent in a longer-term forecast, management does not believe they can reasonably estimate the indemnity and medical costs that might be incurred after ~~2036~~2038 related to such potential claims. It is possible Duke Energy Carolinas may incur asbestos liabilities in excess of the recorded reserves.

Duke Energy Carolinas has third-party insurance to cover certain losses related to asbestos-related injuries and damages above an aggregate self-insured retention. Duke Energy Carolinas’ cumulative payments began to exceed the ~~self-insurance~~self-insured retention in 2008. Future payments up to the policy limit will be reimbursed by the third-party insurance carrier. The insurance policy limit for potential future insurance recoveries indemnification and medical cost claim payments is ~~$797~~$764 million in excess of the self-insured retention. Receivables for insurance recoveries were ~~$570~~$739 million at ~~September~~June 30, ~~2017,~~2019, and ~~$587 million at~~ December 31, ~~2016.~~2018. These amounts are classified in Other within Other Noncurrent Assets and Receivables within Current Assets on the Condensed Consolidated Balance Sheets. Duke Energy Carolinas is not aware of any uncertainties regarding the legal sufficiency of insurance claims. Duke Energy Carolinas believes the insurance recovery asset is probable of recovery as the insurance carrier continues to have a strong financial strength rating.

~~PART I~~

~~DUKE ENERGY CORPORATION – DUKE ENERGY CAROLINAS, LLC – PROGRESS ENERGY, INC. –~~

~~DUKE ENERGY PROGRESS, LLC – DUKE ENERGY FLORIDA, LLC – DUKE ENERGY OHIO, INC. – DUKE ENERGY INDIANA, LLC – PIEDMONT NATURAL GAS COMPANY, INC.~~

~~Combined Notes to Condensed Consolidated Financial Statements – (Unaudited) – (Continued)~~



FINANCIAL STATEMENTS	COMMITMENTS AND CONTINGENCIES

Duke Energy Progress and Duke Energy Florida

Spent Nuclear Fuel Matters

On June 18, 2018, Duke Energy Progress and Duke Energy Florida sued the U.S. in the U.S. Court of Federal Claims for damages incurred for the period 2014 through 2018. The lawsuit claimed the Department of Energy breached a contract in failing to accept spent nuclear fuel under the Nuclear Waste Policy Act of 1982 and asserted damages for the cost of on-site storage in the amount of $100 million and $203 million for Duke Energy Progress and Duke Energy Florida, respectively. Discovery is ongoing and a trial is expected to occur in 2020.

Duke Energy Florida

~~Class Action Lawsuit~~Fluor Contract Litigation

On ~~February 22, 2016,~~January 29, 2019, Fluor filed a breach of contract lawsuit ~~was filed~~ in the U.S. District Court for the ~~Southern~~Middle District of Florida on behalf of a putative class of Duke Energy Florida and FP&L’s customers in Florida. The suit alleges the State of Florida’s nuclear power plant cost recovery statutes (NCRS) are unconstitutional and pre-empted by federal law. Plaintiffs claim they are entitled to repayment of all money paid by customers of Duke Energy Florida and FP&L as a result of the NCRS, as well as an injunction against any future charges under those statutes. The constitutionality of the NCRS has been challenged unsuccessfully in a number of prior cases on alternative grounds. Duke Energy Florida and FP&L filed motions to dismiss the complaint on May 5, 2016. On September 21, 2016, the Court granted the motions to dismiss with prejudice. Plaintiffs filed a motion for reconsideration, which was denied. On January 4, 2017, plaintiffs filed a notice of appeal to the Eleventh Circuit U.S. Court of Appeals. The appeal, which has been fully briefed, was heard on August 22, 2017, and a decision is pending. Duke Energy Florida cannot predict the outcome of this appeal.

~~Westinghouse Contract Litigation~~

On March 28, 2014, Duke Energy Florida filed a lawsuit against Westinghouse in the U.S. District Court for the Western District of North Carolina. The lawsuit seeks recovery of $54 million in milestone payments in excess of work performed under an EPC for Levy as well as a determination by the court of the amounts due to Westinghouse as a result of the termination of the EPC. Duke Energy Florida recognized an exit obligation as a result of the termination of the EPC.

~~On March 31, 2014, Westinghouse filed a lawsuit~~ against Duke Energy Florida ~~in U.S. District Court~~related to an EPC agreement for the ~~Western District~~combined-cycle natural gas plant in Citrus County, Florida. Fluor filed an amended complaint on February 13, 2019. Fluor’s multicount complaint seeks civil, statutory and contractual remedies related to Duke Energy Florida’s $67 million draw in early 2019, on Fluor’s letter of ~~Pennsylvania. The Pennsylvania lawsuit alleged damages under the EPC in excess~~credit and offset of ~~$510 million for engineering and design work, costs to end supplier contracts and an alleged termination fee.~~

~~On June 9, 2014, the judge in the North Carolina case ruled that the litigation will proceed in the Western District of North Carolina. On July 11, 2016,~~invoiced amounts. Duke Energy Florida moved to dismiss all counts of Fluor's amended complaint, and ~~Westinghouse filed separate Motions for Summary Judgment. On September 29, 2016,~~on April 16, 2019, the court ~~issued its ruling on the parties' respective Motions for Summary Judgment, ruling in favor of Westinghouse on~~dismissed Fluor's complaint without prejudice. On April 26, 2019, Fluor filed a ~~$30 million termination fee claim and dismissing Duke Energy Florida's $54 million refund claim, but stating that~~second amended complaint. Duke Energy Florida could use the refund claim to offset any damages for termination costs. Westinghouse's claim for termination costs was unaffected by this ruling and continued to trial. At trial, Westinghouse reduced its claim for termination costs from $482 million to $424 million. Following a trial on the matter, the court issued its final order in December 2016 denying Westinghouse’s claim for termination costs and re-affirming its earlier ruling in favor of Westinghouse on the $30 million termination fee and Duke Energy Florida’s refund claim. Judgment was entered against Duke Energy Florida in the amount of approximately $34 million, which includes prejudgment interest. Westinghouse has appealed the trial court's order to the U.S. Court of Appeals for the Fourth Circuit (Fourth Circuit Court) and Duke Energy Florida has cross-appealed. Duke Energy Florida cannot predict the ultimate outcome of the appeal of the trial court's order.

On March 29, 2017, Westinghouse filed Chapter 11 bankruptcy in the Southern District of New York, which automatically stayed the appeal. On May 23, 2017, the bankruptcy court entered an order lifting the stay with respect to the appeal. Briefing of the appeal concluded on October 20, 2017, and the parties await a decision form the Fourth Circuit Court on whether it will allow oral argument of the appeal.

Ultimate resolution of these matters could have a material effect on the results of operations, financial position or cash flows of Duke Energy Florida. See discussion of the 2017 Settlement and the Levy Nuclear Project in Note 4 for additional information regarding recovery of costs related to Westinghouse.

~~MGP Cost Recovery Action~~

~~On December 30, 2011, Duke Energy Florida filed a lawsuit against FirstEnergy Corp. (FirstEnergy)~~is attempting to recover ~~investigation and remediation~~from Fluor $110 million in additional costs incurred by Duke Energy ~~Florida in connection with the restoration of two former MGP sites in~~ Florida.

On August 1, 2019, Duke Energy Florida ~~alleged that FirstEnergy, as~~and Fluor reached a settlement to resolve the ~~successor~~pending litigation and other outstanding issues related to ~~Associated Gas & Electric Co., owes past and future contribution and response costs~~completing the Citrus County combined-cycle plant. The terms of ~~up to $43 million for~~ the ~~investigation and remediation of MGP sites. On December 6, 2016, the trial court entered judgment against~~settlement will not have a material impact on Duke Energy ~~Florida in the case. In January 2017, Duke Energy Florida appealed the decision to the U.S. Court~~Florida's results of ~~Appeals for the 6th Circuit and briefing has been completed. Duke Energy Florida cannot predict the outcome of this appeal.~~operations, cash flows or financial position.

Other Litigation and Legal Proceedings

The Duke Energy Registrants are involved in other legal, tax and regulatory proceedings arising in the ordinary course of business, some of which involve significant amounts. The Duke Energy Registrants believe the final disposition of these proceedings will not have a material effect on their results of operations, cash flows or financial position.

~~PART I~~

~~DUKE ENERGY CORPORATION – DUKE ENERGY CAROLINAS, LLC – PROGRESS ENERGY, INC. –~~

~~DUKE ENERGY PROGRESS, LLC – DUKE ENERGY FLORIDA, LLC – DUKE ENERGY OHIO, INC. – DUKE ENERGY INDIANA, LLC – PIEDMONT NATURAL GAS COMPANY, INC.~~

~~Combined Notes to Condensed Consolidated Financial Statements – (Unaudited) – (Continued)~~

The table below presents recorded reserves based on management’s best estimate of probable loss for legal matters, excluding asbestos-related reserves ~~and the exit obligation~~ discussed ~~above related to the termination of an EPC contract.~~above. Reserves are classified on the Condensed Consolidated Balance Sheets in Other within Other Noncurrent Liabilities ~~and Accounts payable~~ and Other within Current Liabilities. The reasonably possible range of loss in excess of recorded reserves is not material, other than as described above.



(in millions)	June 30, 2019		December 31, 2018
Reserves for Legal Matters
Duke Energy	$	64	$	65
Duke Energy Carolinas	7		9
Progress Energy	55		54
Duke Energy Progress	14		12
Duke Energy Florida	24		24
Piedmont	1		1

(in millions) September 30, 2017
December 31, 2016
Reserves for Legal Matters
Duke Energy $ 83
$ 98
Duke Energy Carolinas 23
23
Progress Energy 56
59
Duke Energy Progress 13
14
Duke Energy Florida 28
28
Duke Energy Ohio —
4
Piedmont 2
2

OTHER COMMITMENTS AND CONTINGENCIES

General

As part of their normal business, the Duke Energy Registrants are party to various financial guarantees, performance guarantees and other contractual commitments to extend guarantees of credit and other assistance to various subsidiaries, investees and other third parties. These guarantees involve elements of performance and credit risk, which are not fully recognized on the Condensed Consolidated Balance Sheets and have unlimited maximum potential payments. However, the Duke Energy Registrants do not believe these guarantees will have a material effect on their results of operations, cash flows or financial position.

In addition, the Duke Energy Registrants enter into various fixed-price, noncancelable commitments to purchase or sell power or natural gas, take-or-pay arrangements, transportation, or throughput agreements and other contracts that may or may not be recognized on their respective Condensed Consolidated Balance Sheets. Some of these arrangements may be recognized at fair value on their respective Condensed Consolidated Balance Sheets if such contracts meet the definition of a derivative and the ~~normal purchase/normal sale (NPNS)~~NPNS exception does not apply. In most cases, the Duke Energy Registrants’ purchase obligation contracts contain provisions for price adjustments, minimum purchase levels and other financial commitments.



FINANCIAL STATEMENTS	LEASES

5. LEASES

As described in Note 1, Duke Energy adopted the revised accounting guidance for Leaseseffective January 1, 2019, using the modified retrospective method of adoption, which does not require restatement of prior year reported results. Adoption of the new standard resulted in the recording of ROU assets and operating lease liabilities as follows:



	As of January 1, 2019
			Duke				Duke		Duke		Duke		Duke
	Duke		Energy		Progress		Energy		Energy		Energy		Energy
(in millions)	Energy		Carolinas		Energy		Progress		Florida		Ohio		Indiana		Piedmont
ROU assets	$	1,750	$	153	$	863	$	407	$	456	$	23	$	61	$	26
Operating lease liabilities – current	205		28		96		35		61		1		4		4
Operating lease liabilities – noncurrent	1,504		127		766		371		395		22		58		25

As part of its operations, Duke Energy leases certain aircraft, space on communication towers, industrial equipment, fleet vehicles, fuel transportation (barges and railcars), land and office space under various terms and expiration dates. Additionally, Duke Energy Carolinas, Duke Energy Progress and Duke Energy Indiana have finance leases related to firm natural gas pipeline transportation capacity. Duke Energy Progress and Duke Energy Florida have entered into certain PPAs, which are classified as finance and operating leases.

Duke Energy has certain lease agreements, which include variable lease payments that are based on the usage of an asset. These variable lease payments are not included in the measurement of the ROU assets or operating lease liabilities on the Condensed Consolidated Financial Statements.

Certain Duke Energy lease agreements include options for renewal and early termination. The intent to renew a lease varies depending on the lease type and asset. Renewal options that are reasonably certain to be exercised are included in the lease measurements. The decision to terminate a lease early is dependent on various economic factors. No termination options have been included in any of the lease measurements.

Duke Energy operates various renewable energy projects and sells the generated output to utilities, electric cooperatives, municipalities and commercial and industrial customers through long-term PPAs. In certain situations, these PPAs and the associated renewable energy projects qualify as operating leases. Rental income from these leases is accounted for as Nonregulated electric and other revenues in the Condensed Consolidated Statements of Operations. There are no minimum lease payments as all payments are contingent based on actual electricity generated by the renewable energy projects. Contingent lease payments were $72 million and $136 million for the three and six months ended June 30, 2019, respectively. As of June 30, 2019, renewable energy projects owned by Duke Energy and accounted for as operating leases had a cost basis of $3,344 million and accumulated depreciation of $661 million. These assets are principally classified as nonregulated electric generation and transmission assets.



FINANCIAL STATEMENTS	LEASES

The following table presents the components of lease expense.



	Three Months Ended June 30, 2019
			Duke				Duke		Duke		Duke		Duke
	Duke		Energy		Progress		Energy		Energy		Energy		Energy
(in millions)	Energy		Carolinas		Energy		Progress		Florida		Ohio		Indiana		Piedmont
Operating lease expense^(a)	$	73	$	11	$	40	$	17	$	23	$	3	$	5	$	2
Short-term lease expense^(a)	6		2		4		2		2		1		—		—
Variable lease expense^(a)	10		4		5		2		3		—		—		—
Finance lease expense
Amortization of leased assets^(b)	29		1		5		1		4		1		—		—
Interest on lease liabilities^(c)	20		3		13		10		3		—		1		—
Total finance lease expense	49		4		18		11		7		1		1		—
Total lease expense	$	138	$	21	$	67	$	32	$	35	$	5	$	6	$	2



	Six Months Ended June 30, 2019
			Duke				Duke		Duke		Duke		Duke
	Duke		Energy		Progress		Energy		Energy		Energy		Energy
(in millions)	Energy		Carolinas		Energy		Progress		Florida		Ohio		Indiana		Piedmont
Operating lease expense^(a)	$	145	$	23	$	82	$	36	$	46	$	6	$	10	$	3
Short-term lease expense^(a)	13		4		7		3		4		1		1		—
Variable lease expense^(a)	21		12		7		3		4		—		—		—
Finance lease expense
Amortization of leased assets^(b)	56		2		8		2		6		1		—		—
Interest on lease liabilities^(c)	37		7		19		14		5		—		1		—
Total finance lease expense	93		9		27		16		11		1		1		—
Total lease expense	$	272	$	48	$	123	$	58	$	65	$	8	$	12	$	3


(a)	Included in Operations, maintenance and other or, for barges and railcars, Fuel used in electric generation and purchased power on the Condensed Consolidated Statements of Operations.


(b)	Included in Depreciation and amortization on the Condensed Consolidated Statements of Operations.


(c)	Included in Interest Expense on the Condensed Consolidated Statements of Operations.

The following table presents rental expense for operating leases, as reported under the old lease standard. These amounts are included in Operation, maintenance and other and Fuel used in electric generation and purchased power on the Condensed Consolidated Statements of Operations.



(in millions)	Year Ended December 31, 2018
Duke Energy	$	268
Duke Energy Carolinas	49
Progress Energy	143
Duke Energy Progress	75
Duke Energy Florida	68
Duke Energy Ohio	13
Duke Energy Indiana	21
Piedmont	11



FINANCIAL STATEMENTS	LEASES

The following table presents operating lease maturities and a reconciliation of the undiscounted cash flows to operating lease liabilities.



	Twelve Months Ended June 30,
				Duke						Duke			Duke			Duke			Duke
	Duke			Energy			Progress			Energy			Energy			Energy			Energy
(in millions)	Energy			Carolinas			Energy			Progress			Florida			Ohio			Indiana			Piedmont
2020	$	279		$	33		$	129		$	51		$	78		$	2		$	6		$	5
2021	239			28			112			52			60			2			5			5
2022	199			19			94			40			54			2			4			5
2023	190			18			95			40			55			2			4			5
2024	178			15			96			41			55			2			4			5
Thereafter	1,055			61			513			306			207			22			65			7
Total operating lease payments	2,140			174			1,039			530			509			32			88			32
Less: present value discount	(425		)	(30		)	(192		)	(117		)	(75		)	(10		)	(28		)	(3		)
Total operating lease liabilities^(a)	$	1,715		$	144		$	847		$	413		$	434		$	22		$	60		$	29


(a)	Certain operating lease payments include renewal options that are reasonably certain to be exercised.

The following table presents future minimum lease payments under operating leases, which at inception had a non-cancelable term of more than one year, as reported under the old lease standard.



	December 31, 2018
			Duke				Duke		Duke		Duke		Duke
	Duke		Energy		Progress		Energy		Energy		Energy		Energy
(in millions)	Energy		Carolinas		Energy		Progress		Florida		Ohio		Indiana		Piedmont
2019	$	239	$	33	$	97	$	49	$	48	$	2	$	6	$	5
2020	219		29		90		46		44		2		5		5
2021	186		19		79		37		42		2		4		5
2022	170		19		76		34		42		2		4		5
2023	160		17		77		35		42		2		5		6
Thereafter	1,017		68		455		314		141		23		66		11
Total	$	1,991	$	185	$	874	$	515	$	359	$	33	$	90	$	37

The following table presents finance lease maturities and a reconciliation of the undiscounted cash flows to finance lease liabilities.



	Twelve Months Ended June 30,
				Duke						Duke			Duke			Duke
	Duke			Energy			Progress			Energy			Energy			Energy
(in millions)	Energy			Carolinas			Energy			Progress			Florida			Indiana
2020	$	177		$	19		$	69		$	44		$	25		$	1
2021	183			17			69			44			25			1
2022	180			14			69			44			25			1
2023	171			14			69			44			25			1
2024	172			14			64			44			20			1
Thereafter	847			191			560			547			13			28
Total finance lease payments	1,730			269			900			767			133			33
Less: amounts representing interest	(708		)	(162		)	(483		)	(457		)	(26		)	(23		)
Total finance lease liabilities	$	1,022		$	107		$	417		$	310		$	107		$	10



FINANCIAL STATEMENTS	LEASES

The following table presents future minimum lease payments under finance leases, as reported under the old lease standard.



	December 31, 2018
				Duke						Duke			Duke			Duke		Duke
	Duke			Energy			Progress			Energy			Energy			Energy		Energy
(in millions)	Energy			Carolinas			Energy			Progress			Florida			Ohio		Indiana
2019	$	170		$	20		$	45		$	20		$	25		$	2	$	1
2020	174			20			46			21			25			—		1
2021	177			15			45			20			25			—		1
2022	165			15			45			21			24			—		1
2023	165			15			45			21			24			—		1
Thereafter	577			204			230			209			21			—		27
Minimum annual payments	1,428			289			456			312			144			2		32
Less: amount representing interest	(487		)	(180		)	(205		)	(175		)	(30		)	—		(22		)
Total	$	941		$	109		$	251		$	137		$	114		$	2	$	10

The following tables contain additional information related to leases.



		June 30, 2019

				Duke				Duke		Duke		Duke		Duke
		Duke		Energy		Progress		Energy		Energy		Energy		Energy
(in millions)	Classification	Energy		Carolinas		Energy		Progress		Florida		Ohio		Indiana		Piedmont
Assets
Operating	Operating lease ROU assets, net	$	1,735	$	141	$	839	$	407	$	432	$	22	$	60	$	26
Finance	Net property, plant and equipment	1,013		122		423		309		114		—		10		—
Total lease assets		$	2,748	$	263	$	1,262	$	716	$	546	$	22	$	70	$	26
Liabilities
Current
Operating	Other current liabilities	$	213	$	27	$	100	$	36	$	64	$	1	$	4	$	4
Finance	Current maturities of long-term debt	115		6		23		6		17		—		—		—
Noncurrent
Operating	Operating lease liabilities	1,502		117		747		377		370		21		56		25
Finance	Long-Term Debt	907		101		394		304		90		—		10		—
Total lease liabilities		$	2,737	$	251	$	1,264	$	723	$	541	$	22	$	70	$	29



FINANCIAL STATEMENTS	LEASES



	Six Months Ended June 30, 2019

			Duke				Duke		Duke		Duke		Duke
	Duke		Energy		Progress		Energy		Energy		Energy		Energy
(in millions)	Energy		Carolinas		Energy		Progress		Florida		Ohio		Indiana		Piedmont
Cash paid for amounts included in the measurement of lease liabilities^(a)
Operating cash flows from operating leases	$	136	$	15	$	60	$	23	$	37	$	1	$	3	$	5
Operating cash flows from finance leases	37		7		19		14		5		—		1		—
Financing cash flows from finance leases	56		2		8		2		6		1		—		—

Lease assets obtained in exchange for new lease liabilities (non-cash)
Operating^(b)	$	78	$	2	$	30	$	30	$	—	$	—	$	—	$	1
Finance	175		—		175		175		—		—		—		—


(a)	No amounts were classified as investing cash flows from operating leases for the six months ended June 30, 2019.


(b)	Does not include ROU assets recorded as a result of the adoption of the new lease standard.



	June 30, 2019

			Duke				Duke		Duke		Duke		Duke
	Duke		Energy		Progress		Energy		Energy		Energy		Energy
	Energy		Carolinas		Energy		Progress		Florida		Ohio		Indiana		Piedmont
Weighted-average remaining lease term (years)
Operating leases	11		9		10		12		9		18		19		6
Finance leases	16		19		17		18		12		—		27		—
Weighted-average discount rate^(a)
Operating leases	3.9	%	3.7	%	3.8	%	3.8	%	3.7	%	4.2	%	4.1	%	3.6	%
Finance leases	7.9	%	12.9	%	11.8	%	12.4	%	8.3	%	—	%	11.9	%	—	%

(a)

The discount rate is calculated using the rate implicit in a lease if it is readily determinable. Generally, the rate used by the lessor is not provided to Duke Energy and in these cases the incremental borrowing rate is used. Duke Energy will typically use its fully collateralized incremental borrowing rate as of the commencement date to calculate and record the lease. The incremental borrowing rate is influenced by the lessee’s credit rating and lease term and as such may differ for individual leases, embedded leases or portfolios of leased assets.



FINANCIAL STATEMENTS	DEBT AND CREDIT FACILITIES

6. DEBT AND CREDIT FACILITIES

SUMMARY OF SIGNIFICANT DEBT ISSUANCES

The following table summarizes significant debt issuances (in millions). ~~Refer to the "Available Credit Facilities" section below regarding amounts issued under the Three Year Revolver and the Piedmont Term Loan facilities.~~

Nine Months Ended September 30, 2017
Duke
Duke
Duke
Duke
Maturity Interest
Duke
Energy
Energy
Energy
Energy
Issuance Date Date Rate
Energy
(Parent)
Progress
Florida
Ohio
Unsecured Debt
April 2017^(a)
April 2025 3.364 % $ 420
$ 420
$ —
$ —
$ —
June 2017^(b)
June 2020 2.100 % 330
330
—
—
—
August 2017^(c)
August 2022 2.400 % 500
500
—
—
—
August 2017^(c)
August 2027 3.150 % 750
750
—
—
—
August 2017^(c)
August 2047 3.950 % 500
500
—
—
—
Secured Debt
February 2017^(d)
June 2034 4.120 % 587
—
—
—
—
August 2017^(e)
December 2036 4.110 % 233
—
—
—
—
First Mortgage Bonds
January 2017^(f)
January 2020 1.850 % 250
—
—
250
—
January 2017^(f)
January 2027 3.200 % 650
—
—
650
—
March 2017^(g)
June 2046 3.700 %
100

—
—
—
100
September 2017^(h)
September 2020 1.500 %
⁽ⁱ⁾
300

—
300
—
—
September 2017^(h)
September 2047 3.600 % 500
—
500
—
—
Total issuances $ 5,120
$ 2,500

$ 800
$ 900

$ 100

~~PART I~~

~~DUKE ENERGY CORPORATION – DUKE ENERGY CAROLINAS, LLC – PROGRESS ENERGY, INC. –~~

~~DUKE ENERGY PROGRESS, LLC – DUKE ENERGY FLORIDA, LLC – DUKE ENERGY OHIO, INC. – DUKE ENERGY INDIANA, LLC – PIEDMONT NATURAL GAS COMPANY, INC.~~

~~Combined Notes to Condensed Consolidated Financial Statements – (Unaudited) – (Continued)~~



					Six Months Ended June 30, 2019
							Duke		Duke		Duke
	Maturity	Interest			Duke		Energy		Energy		Energy
Issuance Date	Date	Rate			Energy		(Parent)		Progress		Ohio		Piedmont
Unsecured Debt
March 2019^(a)	March 2022	3.251	%	^(b)	$	300	$	300	$	—	$	—	$	—
March 2019^(a)	March 2022	3.227	%		300		300		—		—		—
May 2019^(e)	June 2029	3.500	%		600		—		—		—		600
June 2019^(a)	June 2029	3.400	%		600		600		—		—		—
June 2019^(a)	June 2049	4.200	%		600		600		—		—		—
First Mortgage Bonds
January 2019^(c)	February 2029	3.650	%		400		—		—		400		—
January 2019^(c)	February 2049	4.300	%		400		—		—		400		—
March 2019^(d)	March 2029	3.450	%		600		—		600		—		—
Total issuances					$	3,800	$	1,800	$	600	$	800	$	600


(a)	~~Proceeds were used~~Debt issued to ~~refinance $400 million of unsecured~~pay down short-term debt ~~at maturity~~ and ~~to repay a portion of outstanding commercial paper.~~for general corporate purposes.


(b)	Debt ~~issued to repay~~issuance has a ~~portion of outstanding commercial paper.~~floating interest rate.


(c)	Debt issued to repay at maturity ~~$700~~$450 million ~~of unsecured~~first mortgage bonds due April 2019, pay down short-term debt ~~to repay outstanding commercial paper~~ and for general corporate purposes.


(d)	~~Portfolio financing of four Texas and Oklahoma wind facilities. Secured by substantially all of~~Debt issued to fund eligible green energy projects in the ~~assets of these wind facilities and nonrecourse to Duke Energy. Proceeds were used to reimburse Duke Energy for a portion of previously funded construction expenditures.~~Carolinas.


(e)	Portfolio financing of eight solar facilities located in California, Colorado and New Mexico. Secured by substantially all of the assets of these solar facilities and nonrecourse to Duke Energy. Proceeds were used to reimburse Duke Energy for a portion of previously funded construction expenditures.


~~(f)~~	~~Debt issued to fund capital expenditures for ongoing construction and capital maintenance, to repay a $250 million aggregate principal amount of bonds at maturity and for general corporate purposes.~~


~~(g)~~	~~Proceeds were used to fund capital expenditures for ongoing construction, capital maintenance and for general corporate purposes.~~


~~(h)~~	Debt issued to repay ~~at maturity a $200~~in full the outstanding $350 million ~~aggregate principal amount of bonds~~ Piedmont unsecured term loan due ~~November 2017,~~September 2019, pay down ~~intercompany~~ short-term debt and for general corporate ~~purposes, including capital expenditures.~~purposes.

~~(i) Debt issuance has~~In June 2019, Duke Energy Kentucky priced $210 million of unsecured debentures of which $95 million carry a ~~floating~~fixed interest ~~rate.~~rate of 3.23 percent and mature October 2025, $75 million carry a fixed interest rate of 3.56 percent and mature October 2029, and $40 million carry a fixed interest rate of 4.32 percent and mature July 2049. The $40 million tranche closed and funded in July 2019, and the remaining tranches are expected to close in September 2019 upon receipt of necessary regulatory approvals. The proceeds will be used to refinance Duke Energy Kentucky's $100 million, 4.65 percent debentures maturing October 2019, to pay down short-term intercompany debt and for general corporate purposes.

CURRENT MATURITIES OF LONG-TERM DEBT

The following table shows the significant components of Current Maturities of Long-Term Debt on the Condensed Consolidated Balance Sheets. The Duke Energy Registrants currently anticipate satisfying these obligations with cash on hand and proceeds from additional borrowings.



(in millions)	Maturity Date	Interest Rate		June 30, 2019
Unsecured Debt
Duke Energy (Parent)	September 2019	5.050	%	$	500
Duke Energy Kentucky	October 2019	4.650	%	100
Progress Energy	December 2019	4.875	%	350
Duke Energy (Parent)	June 2020	2.100	%	330
First Mortgage Bonds
Duke Energy Florida	January 2020	1.850	%	250
Duke Energy Florida	April 2020	4.550	%	250
Duke Energy Carolinas	June 2020	4.300	%	450
Other^(a)				468
Current maturities of long-term debt				$	2,698

(in millions) Maturity Date Interest Rate
September 30, 2017
Unsecured Debt
Duke Energy (Parent) June 2018 6.250 % $ 250
Duke Energy (Parent) June 2018 2.100 % 500
First Mortgage Bonds
Duke Energy Progress November 2017 1.516 %
^(b)
200
Duke Energy Carolinas January 2018 5.250 % 400
Duke Energy Carolinas April 2018 5.100 % 300
Duke Energy Florida June 2018 5.650 % 500
Other^(a)
335
Current maturities of long-term debt $ 2,485

(a) Includes ~~capital~~finance lease obligations, amortizing debt and small bullet maturities.

~~(b) Debt issuance has a floating interest rate.~~

~~PART I~~

~~DUKE ENERGY CORPORATION – DUKE ENERGY CAROLINAS, LLC – PROGRESS ENERGY, INC. –~~

~~DUKE ENERGY PROGRESS, LLC – DUKE ENERGY FLORIDA, LLC – DUKE ENERGY OHIO, INC. – DUKE ENERGY INDIANA, LLC – PIEDMONT NATURAL GAS COMPANY, INC.~~

~~Combined Notes to Condensed Consolidated Financial Statements – (Unaudited) – (Continued)~~



FINANCIAL STATEMENTS	DEBT AND CREDIT FACILITIES

~~PART I~~

~~DUKE ENERGY CORPORATION – DUKE ENERGY CAROLINAS, LLC – PROGRESS ENERGY, INC. –~~

~~DUKE ENERGY PROGRESS, LLC – DUKE ENERGY FLORIDA, LLC – DUKE ENERGY OHIO, INC. – DUKE ENERGY INDIANA, LLC – PIEDMONT NATURAL GAS COMPANY, INC.~~

~~Combined Notes~~



FINANCIAL STATEMENTS	REVENUE

14. REVENUE

Duke Energy earns substantially all of its revenues through its reportable segments, Electric Utilities and Infrastructure, Gas Utilities and Infrastructure and Commercial Renewables.

Electric Utilities and Infrastructure

Electric Utilities and Infrastructure earns the majority of its revenues through retail and wholesale electric service through the generation, transmission, distribution and sale of electricity. Duke Energy generally provides retail and wholesale electric service customers with their full electric load requirements or with supplemental load requirements when the customer has other sources of electricity.

The majority of wholesale revenues are full requirements contracts where the customers purchase the substantial majority of their energy needs and do not have a fixed quantity of contractually required energy or capacity. As such, related forecasted revenues are considered optional purchases. Supplemental requirements contracts that include contracted blocks of energy and capacity at contractually fixed prices have the following estimated remaining performance obligations:



	Remaining Performance Obligations
(in millions)	2019		2020		2021		2022		2023		Thereafter		Total
Progress Energy	$	63	$	121	$	87	$	82	$	39	$	42	$	434
Duke Energy Progress	4		9		9		9		9		9		49
Duke Energy Florida	59		112		78		73		30		33		385
Duke Energy Indiana	5		10		5		—		—		—		20

Revenues for block sales are recognized monthly as energy is delivered and stand-ready service is provided, consistent with invoiced amounts and unbilled estimates.

Gas Utilities and Infrastructure

Gas Utilities and Infrastructure earns its revenues through retail and wholesale natural gas service through the transportation, distribution and sale of natural gas. Duke Energy generally provides retail and wholesale natural gas service customers with all natural gas load requirements. Additionally, while natural gas can be stored, substantially all natural gas provided by Duke Energy is consumed by customers simultaneously with receipt of delivery.

Fixed capacity payments under long-term contracts for the Gas Utilities and Infrastructure segment include minimum margin contracts and supply arrangements with municipalities and power generation facilities. Revenues for related sales are recognized monthly as natural gas is delivered and stand-ready service is provided, consistent with invoiced amounts and unbilled estimates. Estimated remaining performance obligations are as follows:



	Remaining Performance Obligations
(in millions)	2019		2020		2021		2022		2023		Thereafter		Total
Piedmont	$	34	$	69	$	65	$	64	$	61	$	432	$	725

Commercial Renewables

Commercial Renewables earns the majority of its revenues through long-term PPAs and generally sells all of its wind and solar facility output, electricity and RECs to customers. The majority of these PPAs have historically been accounted for as leases. For PPAs that are not accounted for as leases, the delivery of electricity and the delivery of RECs are considered separate performance obligations.

Other

The remainder of Duke Energy’s operations is presented as Other, which does not include material revenues from contracts with customers.



FINANCIAL STATEMENTS	REVENUE

Disaggregated Revenues

Disaggregated revenues are presented as follows:



	Three Months Ended June 30, 2019
			Duke				Duke		Duke		Duke		Duke
(in millions)	Duke		Energy		Progress		Energy		Energy		Energy		Energy
By market or type of customer	Energy		Carolinas		Energy		Progress		Florida		Ohio		Indiana		Piedmont
Electric Utilities and Infrastructure
Residential	$	2,304	$	679	$	1,243	$	496	$	747	$	159	$	225	$	—
General	1,584		531		750		339		411		105		197		—
Industrial	759		289		231		164		67		36		201		—
Wholesale	527		109		351		309		42		9		59		—
Other revenues	187		68		99		44		55		25		27		—
Total Electric Utilities and Infrastructure revenue from contracts with customers	$	5,361	$	1,676	$	2,674	$	1,352	$	1,322	$	334	$	709	$	—

Gas Utilities and Infrastructure
Residential	$	146	$	—	$	—	$	—	$	—	$	64	$	—	$	82
Commercial	85		—		—		—		—		26		—		59
Industrial	29		—		—		—		—		3		—		24
Power Generation	—		—		—		—		—		—		—		13
Other revenues	22		—		—		—		—		2		—		19
Total Gas Utilities and Infrastructure revenue from contracts with customers	$	282	$	—	$	—	$	—	$	—	$	95	$	—	$	197

Commercial Renewables
Revenue from contracts with customers	$	46	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Other
Revenue from contracts with customers	$	6	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Total revenue from contracts with customers	$	5,695	$	1,676	$	2,674	$	1,352	$	1,322	$	429	$	709	$	197

Other revenue sources^(a)	$	178	$	37	$	70	$	35	$	31	$	4	$	5	$	12
Total revenues	$	5,873	$	1,713	$	2,744	$	1,387	$	1,353	$	433	$	714	$	209



FINANCIAL STATEMENTS	REVENUE



	Three Months Ended June 30, 2018
			Duke				Duke		Duke		Duke			Duke
(in millions)	Duke		Energy		Progress		Energy		Energy		Energy			Energy
By market or type of customer	Energy		Carolinas		Energy		Progress		Florida		Ohio			Indiana		Piedmont
Electric Utilities and Infrastructure
Residential	$	2,185	$	659	$	1,099	$	452	$	648	$	181		$	245	$	—
General	1,481		501		678		300		377		110			188		—
Industrial	736		286		224		159		66		33			192		—
Wholesale	515		115		322		287		34		2			77		—
Other revenues	194		85		96		47		50		23			20		—
Total Electric Utilities and Infrastructure revenue from contracts with customers	$	5,111	$	1,646	$	2,419	$	1,245	$	1,175	$	349		$	722	$	—

Gas Utilities and Infrastructure
Residential	$	153	$	—	$	—	$	—	$	—	$	66		$	—	$	87
Commercial	87		—		—		—		—		28			—		59
Industrial	31		—		—		—		—		3			—		28
Power Generation	—		—		—		—		—		—			—		14
Other revenues	23		—		—		—		—		6			—		17
Total Gas Utilities and Infrastructure revenue from contracts with customers	$	294	$	—	$	—	$	—	$	—	$	103		$	—	$	205

Commercial Renewables
Revenue from contracts with customers	$	47	$	—	$	—	$	—	$	—	$	—		$	—	$	—

Other
Revenue from contracts with customers	$	15	$	—	$	—	$	—	$	—	$	10		$	—	$	—
Total revenue from contracts with customers	$	5,467	$	1,646	$	2,419	$	1,245	$	1,175	$	462		$	722	$	205

Other revenue sources^(a)	$	176	$	26	$	79	$	46	$	28	$	(3	)	$	16	$	10
Total revenues	$	5,643	$	1,672	$	2,498	$	1,291	$	1,203	$	459		$	738	$	215


(a)	Other revenue sources include revenues from leases, derivatives and alternative revenue programs that are not considered revenues from contracts with customers. Alternative revenue programs in certain jurisdictions include regulatory mechanisms that periodically adjust for over or under collection of related revenues.



FINANCIAL STATEMENTS	REVENUE



	Six Months Ended June 30, 2019
			Duke				Duke		Duke		Duke		Duke
(in millions)	Duke		Energy		Progress		Energy		Energy		Energy		Energy
By market or type of customer	Energy		Carolinas		Energy		Progress		Florida		Ohio		Indiana		Piedmont
Electric Utilities and Infrastructure
Residential	$	4,674	$	1,439	$	2,357	$	1,032	$	1,325	$	348	$	531	$	—
General	3,011		1,027		1,382		645		737		208		394		—
Industrial	1,470		555		453		325		128		69		391		—
Wholesale	1,068		228		704		624		80		23		113		—
Other revenues	359		146		271		169		102		41		44		—
Total Electric Utilities and Infrastructure revenue from contracts with customers	$	10,582	$	3,395	$	5,167	$	2,795	$	2,372	$	689	$	1,473	$	—

Gas Utilities and Infrastructure
Residential	$	560	$	—	$	—	$	—	$	—	$	176	$	—	$	384
Commercial	291		—		—		—		—		75		—		216
Industrial	77		—		—		—		—		10		—		66
Power Generation	—		—		—		—		—		—		—		26
Other revenues	85		—		—		—		—		10		—		75
Total Gas Utilities and Infrastructure revenue from contracts with customers	$	1,013	$	—	$	—	$	—	$	—	$	271	$	—	$	767

Commercial Renewables
Revenue from contracts with customers	$	88	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Other
Revenue from contracts with customers	$	10	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Total Revenue from contracts with customers	$	11,693	$	3,395	$	5,167	$	2,795	$	2,372	$	960	$	1,473	$	767

Other revenue sources^(a)	$	343	$	62	$	149	$	76	$	67	$	4	$	9	$	21
Total revenues	$	12,036	$	3,457	$	5,316	$	2,871	$	2,439	$	964	$	1,482	$	788



FINANCIAL STATEMENTS	REVENUE



	Six Months Ended June 30, 2018
			Duke				Duke		Duke		Duke		Duke
(in millions)	Duke		Energy		Progress		Energy		Energy		Energy		Energy
By market or type of customer	Energy		Carolinas		Energy		Progress		Florida		Ohio		Indiana		Piedmont
Electric Utilities and Infrastructure
Residential	$	4,535	$	1,440	$	2,211	$	968	$	1,243	$	361	$	523	$	—
General	2,856		973		1,309		599		710		206		366		—
Industrial	1,400		541		432		304		128		63		365		—
Wholesale	1,148		234		768		684		84		2		145		—
Other revenues	333		152		225		132		93		37		37		—
Total Electric Utilities and Infrastructure revenue from contracts with customers	$	10,272	$	3,340	$	4,945	$	2,687	$	2,258	$	669	$	1,436	$	—

Gas Utilities and Infrastructure
Residential	$	566	$	—	$	—	$	—	$	—	$	177	$	—	$	389
Commercial	288		—		—		—		—		77		—		211
Industrial	79		—		—		—		—		10		—		69
Power Generation	—		—		—		—		—		—		—		27
Other revenues	78		—		—		—		—		12		—		66
Total Gas Utilities and Infrastructure revenue from contracts with customers	$	1,011	$	—	$	—	$	—	$	—	$	276	$	—	$	762

Commercial Renewables
Revenue from contracts with customers	$	80	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Other
Revenue from contracts with customers	$	31	$	—	$	—	$	—	$	—	$	24	$	—	$	—
Total Revenue from contracts with customers	$	11,394	$	3,340	$	4,945	$	2,687	$	2,258	$	969	$	1,436	$	762

Other revenue sources^(a)	$	384	$	95	$	129	$	64	$	60	$	14	$	33	$	6
Total revenues	$	11,778	$	3,435	$	5,074	$	2,751	$	2,318	$	983	$	1,469	$	768


(a)	Other revenue sources include revenues from leases, derivatives and alternative revenue programs that are not considered revenues from contracts with customers. Alternative revenue programs in certain jurisdictions include regulatory mechanisms that periodically adjust for over or under collection of related revenues.

UNBILLED REVENUE

Unbilled revenues are recognized by applying customer billing rates to the estimated volumes of energy or natural gas delivered but not yet billed. Unbilled revenues can vary significantly from period to period as a result of seasonality, weather, customer usage patterns, customer mix, average price in effect for customer classes, timing of rendering customer bills and meter reading schedules, and the impact of weather normalization or margin decoupling mechanisms.

Unbilled revenues are included within Receivables and Receivables of VIEs on the Condensed Consolidated ~~Financial Statements – (Unaudited) – (Continued)~~Balance Sheets as shown in the following table.



(in millions)	June 30, 2019		December 31, 2018
Duke Energy	$	790	$	896
Duke Energy Carolinas	288		313
Progress Energy	270		244
Duke Energy Progress	148		148
Duke Energy Florida	122		96
Duke Energy Ohio	1		2
Duke Energy Indiana	14		23
Piedmont	4		73



FINANCIAL STATEMENTS	REVENUE

~~Collection fees received in connection with servicing transferred accounts receivable are included in Operation, maintenance and other on~~

Additionally, Duke Energy ~~Ohio’s~~Ohio and Duke Energy ~~Indiana’s~~Indiana sell, on a revolving basis, nearly all of their retail accounts receivable, including receivables for unbilled revenues, to an affiliate, CRC, and account for the transfers of receivables as sales. Accordingly, the receivables sold are not reflected on the Condensed Consolidated ~~Statements~~Balance Sheets of ~~Operations~~Duke Energy Ohio and ~~Comprehensive Income. The loss recognized on sales of~~Duke Energy Indiana. See Note 13 for further information. These receivables ~~is calculated monthly by multiplying receivables sold during~~for unbilled revenues are shown in the month by the required discount. The required discount is derived monthly utilizing a three-year weighted average formula that considers charge-off history, late charge history and turnover history on the sold receivables, as well as a component for the time value of money. The discount rate, or component for the time value of money, is the prior month-end LIBOR plus a fixed rate of 1.00 percent.table below.



(in millions)	June 30, 2019		December 31, 2018
Duke Energy Ohio	$	65	$	86
Duke Energy Indiana	116		128

~~14. COMMON STOCK~~15. STOCKHOLDERS' EQUITY

Basic ~~Earnings Per Share (EPS)~~EPS is computed by dividing net income attributable to Duke Energy common stockholders, as adjusted for distributed and undistributed earnings allocated to participating securities, by the weighted average number of common shares outstanding during the period. Diluted EPS is computed by dividing net income attributable to Duke Energy common stockholders, as adjusted for distributed and undistributed earnings allocated to participating securities, by the diluted weighted average number of common shares outstanding during the period. Diluted EPS reflects the potential dilution that could occur if securities or other agreements to issue common stock, such as stock options and equity forward sale agreements, were exercised or settled. Duke Energy’s participating securities are restricted stock units that are entitled to dividends declared on Duke Energy common stock during the restricted stock unit’s vesting periods.

The following table presents Duke Energy’s basic and diluted EPS calculations, ~~and reconciles~~ the weighted average number of common shares outstanding ~~to the diluted weighted average number of~~and common ~~shares outstanding.~~and preferred share dividends declared.


	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended June 30,				Six Months Ended June 30,
(in millions, except per-share amounts)	2017		2016		2017		2016		2019		2018		2019		2018
Income from continuing operations attributable to Duke Energy common stockholders excluding impact of participating securities	$	954	$	998	$	2,356	$	2,194	$	819	$	504	$	1,718	$	1,123
Weighted average shares outstanding – basic	700		689		700		689

Weighted average common shares outstanding – basic									728		703		728		702
Equity Forwards	—		2		—		1		—		1		—		—
Weighted average shares outstanding – diluted	700		691		700		690
Earnings per share from continuing operations attributable to Duke Energy common stockholders
Basic	$	1.36	$	1.44	$	3.37	$	3.19
Diluted	$	1.36	$	1.44	$	3.37	$	3.18
Weighted average common shares outstanding – diluted									728		704		728		702
EPS from continuing operations attributable to Duke Energy common stockholders
Basic and Diluted									$	1.12	$	0.72	$	2.36	$	1.60
Potentially dilutive items excluded from the calculation^(a)	2		2		2		2		2		2		2		2
Dividends declared per common share	$	0.89	$	0.855	$	2.60	$	2.505	$	0.928	$	0.89	$	1.855	$	1.78
Dividends declared on preferred stock per depositary share									$	0.307	$	—	$	0.307	$	—



Commission file number	Registrant, State of Incorporation or Organization, Address of Principal Executive Offices and Telephone Number		IRS Employer Identification ~~No.~~Number

~~1-32853~~	~~DUKE ENERGY CORPORATION~~ ~~(a Delaware corporation)~~ ~~550 South Tryon Street~~ ~~Charlotte, North Carolina 28202-1803~~ ~~704-382-3853~~	~~20-2777218~~



Commission ~~file number~~	~~Registrant, State of Incorporation or Organization, Address of Principal Executive Offices, Telephone~~ Number and IRS Employer ~~Identification Number~~	Commission ~~file number~~	~~Registrant, State of Incorporation or Organization, Address of Principal Executive Offices, Telephone~~ Number and IRS Employer

~~1-4928~~	~~DUKE ENERGY CAROLINAS, LLC~~ ~~(a North Carolina limited liability company)~~ ~~526 South Church Street~~ ~~Charlotte, North Carolina 28202-1803~~ ~~704-382-3853~~ ~~56-0205520~~		~~1-3274~~	~~DUKE ENERGY FLORIDA, LLC~~ ~~(a Florida limited liability company)~~ ~~299 First Avenue North~~ ~~St. Petersburg, Florida 33701~~ ~~704-382-3853~~ ~~59-0247770~~
~~1-15929~~Registrant	~~PROGRESS ENERGY, INC.~~ ~~(a North Carolina corporation)~~ ~~410 South Wilmington Street~~ ~~Raleigh, North Carolina 27601-1748~~ ~~704-382-3853~~ ~~56-2155481~~Title of each classTrading symbolswhich registered

	~~1-1232~~	~~DUKE ENERGY OHIO, INC.~~ ~~(an Ohio corporation)~~ ~~139 East Fourth Street~~ ~~Cincinnati, Ohio 45202~~ ~~704-382-3853~~ ~~31-0240030~~
~~1-3382~~Duke Energy	~~DUKE ENERGY PROGRESS,~~Common Stock, $0.001 par valueDUKNew York Stock Exchange LLC ~~(a North Carolina limited liability company)~~ ~~410 South Wilmington Street~~ ~~Raleigh, North Carolina 27601-1748~~ ~~704-382-3853~~ ~~56-0165465~~

	~~1-3543~~	~~DUKE ENERGY INDIANA, LLC~~ ~~(an Indiana limited liability company)~~ ~~1000 East Main Street~~ ~~Plainfield, Indiana 46168~~ ~~704-382-3853~~ ~~35-0594457~~
~~1-6196~~Duke Energy	~~PIEDMONT NATURAL GAS COMPANY, INC.~~5.125% Junior Subordinated Debentures due DUKHNew York Stock Exchange LLC ~~(a North Carolina corporation)~~ ~~4720 Piedmont Row Drive~~ ~~Charlotte, North Carolina 28210~~ ~~704-364-3120~~ ~~56-0556998~~



ý☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



¨☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


file number	Identification Number file number Identification Number


Duke Energy	5.625% Junior Subordinated Debentures due DUKBNew York Stock Exchange LLC


Duke Energy	Depositary Shares, each representing a 1/1,000th DUK PR ANew York Stock Exchange LLC



Duke Energy Corporation (Duke Energy)	Yesx	☒	No¨	☐	Duke Energy Florida, LLC (Duke Energy Florida)	Yesx	☒	No¨	☐
Duke Energy Carolinas, LLC (Duke Energy Carolinas)	Yesx	☒	No¨	☐	Duke Energy Ohio, Inc. (Duke Energy Ohio)	Yesx	☒	No¨	☐
Progress Energy, Inc. (Progress Energy)	Yesx	☒	No¨	☐	Duke Energy Indiana, LLC (Duke Energy Indiana)	Yesx	☒	No¨	☐
Duke Energy Progress, LLC (Duke Energy Progress)	Yesx	☒	No¨	☐	Piedmont Natural Gas Company, Inc. (Piedmont)	Yesx	☒	No¨	☐



Duke Energy	Large accelerated filerx	☒	Accelerated filer¨	☐	Non-accelerated filer¨	☐	Smaller reporting company¨	☐	Emerging ~~Growth Company~~ ¨growth company	☐
Duke Energy Carolinas	Large accelerated filer¨	☐	Accelerated filer¨	☐	Non-accelerated filerx	☒	Smaller reporting company¨	☐	Emerging ~~Growth Company~~ ¨growth company	☐
Progress Energy	Large accelerated filer¨	☐	Accelerated filer¨	☐	Non-accelerated filerx	☒	Smaller reporting company¨	☐	Emerging ~~Growth Company~~ ¨growth company	☐
Duke Energy Progress	Large accelerated filer¨	☐	Accelerated filer¨	☐	Non-accelerated filerx	☒	Smaller reporting company¨	☐	Emerging ~~Growth Company~~ ¨growth company	☐
Duke Energy Florida	Large accelerated filer¨	☐	Accelerated filer¨	☐	Non-accelerated filerx	☒	Smaller reporting company¨	☐	Emerging ~~Growth Company~~ ¨growth company	☐
Duke Energy Ohio	Large accelerated filer¨	☐	Accelerated filer¨	☐	Non-accelerated filerx	☒	Smaller reporting company¨	☐	Emerging ~~Growth Company~~ ¨growth company	☐
Duke Energy Indiana	Large accelerated filer¨	☐	Accelerated filer¨	☐	Non-accelerated filerx	☒	Smaller reporting company¨	☐	Emerging ~~Growth Company~~ ¨growth company	☐
Piedmont	Large accelerated filer¨	☐	Accelerated filer¨	☐	Non-accelerated filerx	☒	Smaller reporting company¨	☐	Emerging ~~Growth Company~~ ¨growth company	☐



Duke Energy	Yes¨	☐	Nox	☒	Duke Energy Florida	Yes¨	☐	Nox	☒
Duke Energy Carolinas	Yes¨	☐	Nox	☒	Duke Energy Ohio	Yes¨	☐	Nox	☒
Progress Energy	Yes¨	☐	Nox	☒	Duke Energy Indiana	Yes¨	☐	Nox	☒
Duke Energy Progress	Yes¨	☐	Nox	☒	Piedmont	Yes¨	☐	Nox	☒



Registrant	Description	Shares
Duke Energy	Common stock, $0.001 par value	~~699,975,614~~728,601,060


																														Three Months Ended June 30, 2018 and 2019
																																									Accumulated Other Comprehensive
									Accumulated Other Comprehensive Loss																																(Loss) Income
															Net Unrealized						Total																							Net Unrealized						Total
									Foreign			Net			(Losses) Gains						Duke Energy																				Net Gains			(Losses) Gains						Duke Energy
	Common			Additional					Currency			Losses on			on Available-			Pension and			Corporation												Common			Additional					(Losses) on			on Available-			Pension and			Corporation
	Stock	Common		Paid-in		Retained			Translation			Cash Flow			for-Sale-			OPEB			Stockholders'			Noncontrolling			Total			Preferred			Stock	Common		Paid-in		Retained			Cash Flow			for-Sale-			OPEB			Stockholders'			Noncontrolling			Total
(in millions)	Shares	Stock		Capital		Earnings			Adjustments			Hedges			Securities			Adjustments			Equity			Interests			Equity			Stock			Shares	Stock		Capital		Earnings			Hedges			Securities			Adjustments			Equity			Interests			Equity
Balance at December 31, 2015	688	$	1	$	37,968	$	2,564		$	(692	)	$	(50	)	$	(3	)	$	(61	)	$	39,727		$	44		$	39,771
Balance at March 31, 2018																														$	—		701	$	1	$	38,839	$	3,021		$	3		$	(4	)	$	(68	)	$	41,792		$	6		$	41,798
Net income	—	—		—		2,379			—			—			—			—			2,379			13			2,392			—			—	—		—		500			—			—			—			500			2			502
Other comprehensive income (loss)	—	—		—		—			92			(16		)	7			2			85			3			88
Other comprehensive (loss) income																														—			—	—		—		—			(1		)	(2		)	1			(2		)	—			(2		)
Common stock issuances, including dividend reinvestment and employee benefits	1	—		29		—			—			—			—			—			29			—			29			—			11	—		843		—			—			—			—			843			—			843
Common stock dividends	—	—		—		(1,731		)	—			—			—			—			(1,731		)	—			(1,731		)	—			—	—		—		(626		)	—			—			—			(626		)	—			(626		)
Distributions to noncontrolling interest in subsidiaries	—	—		—		—			—			—			—			—			—			(3		)	(3		)
Balance at September 30, 2016	689	$	1	$	37,997	$	3,212		$	(600	)	$	(66	)	$	4		$	(59	)	$	40,489		$	57		$	40,546
Other																														—			—	—		—		(1		)	—			1			—			—			—			—
Balance at June 30, 2018																														$	—		712	$	1	$	39,682	$	2,894		$	2		$	(5	)	$	(67	)	$	42,507		$	8		$	42,515

Balance at December 31, 2016	700	$	1	$	38,741	$	2,384		$	—		$	(20	)	$	(1	)	$	(72	)	$	41,033		$	8		$	41,041
Net income	—	—		—		2,356			—			—			—			—			2,356			5			2,361
Other comprehensive income	—	—		—		—			—			1			10			2			13			—			13
Balance at March 31, 2019																														$	974		728	$	1	$	40,823	$	3,360		$	(36	)	$	—		$	(92	)	$	45,030		$	15		$	45,045
Net income (loss)																														—			—	—		—		820			—			—			—			820			(84		)	736
Other comprehensive (loss) income																														—			—	—		—		—			(27		)	4			3			(20		)	—			(20		)
Preferred stock issuances, net of issuance costs																														(1		)	—	—		—		—			—			—			—			(1		)	—			(1		)
Common stock issuances, including dividend reinvestment and employee benefits	—	—		33		—			—			—			—			—			33			—			33			—			—	—		61		—			—			—			—			61			—			61
Common stock dividends	—	—		—		(1,825		)	—			—			—			—			(1,825		)	—			(1,825		)	—			—	—		—		(678		)	—			—			—			(678		)	—			(678		)
Contribution from noncontrolling interest in subsidiaries^(c)																														—			—	—		—		—			—			—			—			—			193			193
Distributions to noncontrolling interest in subsidiaries	—	—		—		—			—			—			—			—			—			(2		)	(2		)	—			—	—		—		—			—			—			—			—			(1		)	(1		)
Other^(a)	—	—		—		21			—			—			—			—			21			—			21
Balance at September 30, 2017	700	$	1	$	38,774	$	2,936		$	—		$	(19	)	$	9		$	(70	)	$	41,631		$	11		$	41,642
Other																														—			—	—		1		—			—			—			—			1			(4		)	(3		)
Balance at June 30, 2019																														$	973		728	$	1	$	40,885	$	3,502		$	(63	)	$	4		$	(89	)	$	45,213		$	119		$	45,332



	Six Months Ended June 30, 2018 and 2019
											Accumulated Other Comprehensive
											(Loss) Income
														Net Unrealized						Total
											Net Gains			(Losses) Gains						Duke Energy
			Common			Additional					(Losses) on			on Available-			Pension and			Corporation
	Preferred		Stock	Common		Paid-in		Retained			Cash Flow			for-Sale-			OPEB			Stockholders'			Noncontrolling			Total
(in millions)	Stock		Shares	Stock		Capital		Earnings			Hedges			Securities			Adjustments			Equity			Interests			Equity
Balance at December 31, 2017	$	—	700	$	1	$	38,792	$	3,013		$	(10	)	$	12		$	(69	)	$	41,739		$	(2	)	$	41,737
Net income	—		—	—		—		1,120			—			—			—			1,120			4			1,124
Other comprehensive income (loss)	—		—	—		—		—			12			(5		)	2			9			—			9
Common stock issuances, including dividend reinvestment and employee benefits	—		12	—		890		—			—			—			—			890			—			890
Common stock dividends	—		—	—		—		(1,251		)	—			—			—			(1,251		)	—			(1,251		)
Distributions to noncontrolling interest in subsidiaries	—		—	—		—		—			—			—			—			—			(1		)	(1		)
Other^(a)	—		—	—		—		12			—			(12		)	—			—			7			7
Balance at June 30, 2018	$	—	712	$	1	$	39,682	$	2,894		$	2		$	(5	)	$	(67	)	$	42,507		$	8		$	42,515

Balance at December 31, 2018	$	—	727	$	1	$	40,795	$	3,113		$	(14	)	$	(3	)	$	(75	)	$	43,817		$	17		$	43,834
Net income (loss)	—		—	—		—		1,720			—			—			—			1,720			(91		)	1,629
Other comprehensive (loss) income	—		—	—		—		—			(43		)	8			3			(32		)	—			(32		)
Preferred stock issuances, net of issuance costs^(b)	973		—	—		—		—			—			—			—			973			—			973
Common stock issuances, including dividend reinvestment and employee benefits	—		1	—		89		—			—			—			—			89			—			89
Common stock dividends	—		—	—		—		(1,354		)	—			—			—			(1,354		)	—			(1,354		)
Contributions from noncontrolling interest in subsidiaries^(c)	—		—	—		—		—			—			—			—			—			193			193
Distributions to noncontrolling interest in subsidiaries	—		—	—		—		—			—			—			—			—			(1		)	(1		)
Other^(d)	—		—	—		1		23			(6		)	(1		)	(17		)	—			1			1
Balance at June 30, 2019	$	973	728	$	1	$	40,885	$	3,502		$	(63	)	$	4		$	(89	)	$	45,213		$	119		$	45,332


(a)	~~Cumulative-effect~~Amounts in Retained Earnings and Accumulated Other Comprehensive (Loss) Income represent a cumulative-effect adjustment due to implementation of a new accounting standard related to ~~stock-based compensation~~Financial Instruments Classification and ~~the associated income taxes. See Note 1 for more information.~~Measurement.


(b)	Duke Energy issued 40 million depositary shares of preferred stock in the first quarter of 2019.


(c)	Relates to tax equity financing activity in the Commercial Renewables segment.


(d)	Amounts in Retained Earnings and Accumulated Other Comprehensive (Loss) Income primarily represent impacts to accumulated other comprehensive income due to implementation of a new accounting standard related to Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.


										Three Months Ended June 30, 2018 and 2019
				Accumulated Other									Accumulated Other
				Comprehensive									Comprehensive
				Loss									Loss
				Net Losses on									Net Losses on
	Member's			Cash Flow			Total			Member's			Cash Flow			Total
(in millions)	Equity			Hedges			Equity			Equity			Hedges			Equity
Balance at December 31, 2015	$	11,617		$	(11	)	$	11,606
Balance at March 31, 2018										$	11,441		$	(6	)	$	11,435
Net income										117			—			117
Distributions to parent										(250		)	—			(250		)
Balance at June 30, 2018										$	11,308		$	(6	)	$	11,302

Balance at March 31, 2019										$	11,982		$	(7	)	$	11,975
Net income										301			—			301
Balance at June 30, 2019										$	12,283		$	(7	)	$	12,276

										Six Months Ended June 30, 2018 and 2019
													Accumulated Other
													Comprehensive
													Loss
													Net Losses on
										Member's			Cash Flow			Total
(in millions)										Equity			Hedges			Equity
Balance at December 31, 2017										$	11,368		$	(7	)	$	11,361
Net income	1,026			—			1,026			440			—			440
Other comprehensive income	—			1			1			—			1			1
Distributions to parent	(1,800		)	—			(1,800		)	(500		)	—			(500		)
Balance at June 30, 2018										$	11,308		$	(6	)	$	11,302

Balance at December 31, 2018										$	11,689		$	(6	)	$	11,683
Net income										594			—			594
Other	(3		)	—			(3		)	—			(1		)	(1		)
Balance at September 30, 2016	$	10,840		$	(10	)	$	10,830

Balance at December 31, 2016	$	10,781		$	(9	)	$	10,772
Net income	1,009			—			1,009
Other comprehensive income	—			1			1
Distributions to parent	(625		)	—			(625		)
Other	(1		)	—			(1		)
Balance at September 30, 2017	$	11,164		$	(8	)	$	11,156
Balance at June 30, 2019										$	12,283		$	(7	)	$	12,276


																							Three Months Ended June 30, 2018 and 2019
						Accumulated Other Comprehensive Loss																						Accumulated Other Comprehensive (Loss) Income
									Net Unrealized					Total Progress																	Net Unrealized						Total Progress
	Additional					Net Losses on			Gains on		Pension and			Energy, Inc.									Additional					Net Losses on			Gains (Losses) on			Pension and			Energy, Inc.
	Paid-in		Retained			Cash Flow			Available-for-		OPEB			Stockholders'			Noncontrolling			Total			Paid-in		Retained			Cash Flow			Available-for-			OPEB			Stockholders'		Noncontrolling			Total
(in millions)	Capital		Earnings			Hedges			Sale Securities		Adjustments			Equity			Interests			Equity			Capital		Earnings			Hedges			Sale Securities			Adjustments			Equity		Interests			Equity
Balance at December 31, 2015	$	8,092	$	4,831		$	(31	)	$	—	$	(17	)	$	12,875		$	(22	)	$	12,853
Balance at March 31, 2018																							$	9,142	$	4,591		$	(16	)	$	(1	)	$	(12	)	$	13,704	$	(1	)	$	13,703
Net income																							—		265			—			—			—			265		2			267
Other comprehensive income (loss)																							—		—			1			(1		)	2			2		—			2
Distributions to noncontrolling interests																							—		—			—			—			—			—		(1		)	(1		)
Other^(a)																							1		(1		)	—			1			—			1		—			1
Balance at June 30, 2018																							$	9,143	$	4,855		$	(15	)	$	(1	)	$	(10	)	$	13,972	$	—		$	13,972

Balance at March 31, 2019																							$	9,143	$	5,386		$	(14	)	$	(1	)	$	(8	)	$	14,506	$	2		$	14,508
Net income	—		927			—			—		—			927			8			935			—		328			—			—			—			328		1			329
Other comprehensive income	—		—			4			2		2			8			—			8			—		—			1			1			1			3		—			3
Other																							—		1			—			—			(1		)	—		(1		)	(1		)
Balance at June 30, 2019																							$	9,143	$	5,715		$	(13	)	$	—		$	(8	)	$	14,837	$	2		$	14,839

																							Six Months Ended June 30, 2018 and 2019
																												Accumulated Other Comprehensive (Loss) Income
																															Net Unrealized						Total Progress
																							Additional					Net Losses on			Gains (Losses) on			Pension and			Energy, Inc.
																							Paid-in		Retained			Cash Flow			Available-for-			OPEB			Stockholders'		Noncontrolling			Total
																							Capital		Earnings			Hedges			Sale Securities			Adjustments			Equity		Interests			Equity
Balance at December 31, 2017																							$	9,143	$	4,350		$	(18	)	$	5		$	(12	)	$	13,468	$	(3	)	$	13,465
Net income																							—		500			—			—			—			500		4			504
Other comprehensive income (loss)																							—		—			3			(1		)	2			4		—			4
Distributions to noncontrolling interests	—		—			—			—		—			—			(1		)	(1		)	—		—			—			—			—			—		(1		)	(1		)
Dividends to parent	—		(1,075		)	—			—		—			(1,075		)	—			(1,075		)
Other	4		—			—			—		—			4			(1		)	3
Balance at September 30, 2016	$	8,096	$	4,683		$	(27	)	$	2	$	(15	)	$	12,739		$	(16	)	$	12,723
Other^(a)																							—		5			—			(5		)	—			—		—			—
Balance at June 30, 2018																							$	9,143	$	4,855		$	(15	)	$	(1	)	$	(10	)	$	13,972	$	—		$	13,972

Balance at December 31, 2016	$	8,094	$	3,764		$	(23	)	$	1	$	(16	)	$	11,820		$	(13	)	$	11,807
Balance at December 31, 2018																							$	9,143	$	5,131		$	(12	)	$	(1	)	$	(7	)	$	14,254	$	3		$	14,257
Net income	—		814			—			—		—			814			7			821			—		577			—			—			—			577		—			577
Other comprehensive income	—		—			4			3		5			12			—			12			—		—			3			1			2			6		—			6
Dividends to parent^(a)	—		(672		)	—			—		—			(672		)	—			(672		)
Equitization of certain notes payable to affiliates	1,047		—			—			—		—			1,047			—			1,047
Other	2		—			—			—		—			2			—			2
Balance at September 30, 2017	$	9,143	$	3,906		$	(19	)	$	4	$	(11	)	$	13,023		$	(6	)	$	13,017
Other^(b)																							—		7			(4		)	—			(3		)	—		(1		)	(1		)
Balance at June 30, 2019																							$	9,143	$	5,715		$	(13	)	$	—		$	(8	)	$	14,837	$	2		$	14,839


(a)	~~Includes~~Amounts in Retained Earnings and Accumulated Other Comprehensive (Loss) Income represent a ~~$547 million non-cash dividend~~cumulative-effect adjustment due to implementation of a new accounting standard related to ~~a legal entity restructuring.~~Financial Instruments Classification and Measurement.



	Three Months Ended
	June 30, 2018 and 2019
	Member's
(in millions)	Equity
Balance at March 31, 2018	$	8,126
Net income	139
Balance at June 30, 2018	$	8,265

Balance at March 31, 2019	$	8,644
Net income	169
Balance at June 30, 2019	$	8,813

	Six Months Ended
	June 30, 2018 and 2019
	Member's
(in millions)	Equity
Balance at December 31, 2017	$	7,949
Net income	316
Balance at June 30, 2018	$	8,265

Balance at December 31, 2018	$	8,441
Net income	372
Balance at June 30, 2019	$	8,813



				Accumulated
				Other
				Comprehensive
				Income
				Net Unrealized
				Gains on
	Member's			Available-for-Sale		Total
(in millions)	Equity			Securities		Equity
Balance at December 31, 2015	$	5,121		$	—	$	5,121
Net income	487			—		487
Other comprehensive income	—			2		2
Distributions to parent	(774		)	—		(774		)
Other	3			—		3
Balance at September 30, 2016	$	4,837		$	2	$	4,839

Balance at December 31, 2016	$	4,899		$	1	$	4,900
Net income	368			—		368
Other comprehensive income	—			3		3
Other	3			—		3
Balance at September 30, 2017	$	5,270		$	4	$	5,274


(a)	Amounts in Member's Equity and Accumulated Other Comprehensive Income (Loss) represent a cumulative-effect adjustment due to implementation of a new accounting standard related to Financial Instruments Classification and Measurement.


(a)	Represents a non-cash settlement through equity of an intercompany payable from Duke Energy Ohio to its parent.



Practical Expedient	Description
Package of transition practical expedients (for leases commenced prior to adoption date and must be adopted as a package)	Do not need to 1) reassess whether any expired or existing contracts are/or contain leases, 2) reassess the lease classification for any expired or existing leases and 3) reassess initial direct costs for any existing leases.
Short-term lease expedient (elect by class of underlying asset)	Elect as an accounting policy to not apply the recognition requirements to short-term leases by asset class.
Lease and non-lease components (elect by class of underlying asset)	Elect as an accounting policy to not separate non-lease components from lease components and instead account for each lease and associated non-lease component as a single lease component by asset class.
Hindsight expedient (when determining lease term)	Elect to use hindsight to determine the lease term.
Existing and expired land easements not previously accounted for as leases	Elect to not evaluate existing or expired easements under the new guidance and carry forward current accounting treatment.
Comparative reporting requirements for initial adoption	Elect to apply transition requirements at adoption date, recognize cumulative effect adjustment to retained earnings in period of adoption and not apply the new requirements to comparative periods, including disclosures.
Lessor expedient (elect by class of underlying asset)	Elect as an accounting policy to aggregate non-lease components with the related lease component when specified conditions are met by asset class. Account for the combined component based on its predominant characteristic (revenue or operating lease).



(in millions)
Current assets	$	497
Property, plant and equipment, net	4,714
Goodwill	3,353
Other long-term assets	804
Total assets	9,368
Current liabilities, including current maturities of long-term debt	576
Long-term liabilities	1,790
Long-term debt	2,002
Total liabilities	4,368
Total purchase price	$	5,000


~~(b)~~	~~Includes an income tax benefit of $95 million for the nine months ended September 30, 2016, related to historical undistributed foreign earnings. See Note 17 for additional information.~~


~~(c)~~	Duke Energy recognized an income tax benefit of $122 million resulting from immaterial out of period deferred tax liability adjustments for the three and nine months ended September 30, 2016. The amount includes $34 million recorded at Duke Energy Ohio.



	Nine Months Ended
(in millions)	September 30, 2016
Cash flows provided by (used in):
Operating activities	$	201
Investing activities	(35		)



	Three Months Ended June 30, 2019
	Electric		Gas				Total
	Utilities and		Utilities and		Commercial		Reportable
(in millions)	Infrastructure		Infrastructure		Renewables		Segments		Other			Eliminations			Total
Unaffiliated revenues	$	5,467	$	282	$	118	$	5,867	$	6		$	—		$	5,873
Intersegment revenues	8		24		—		32		19			(51		)	—
Total revenues	$	5,475	$	306	$	118	$	5,899	$	25		$	(51	)	$	5,873
Segment income (loss)	$	809	$	40	$	86	$	935	$	(115	)	$	—		$	820
Add back noncontrolling interests^(a)															(84		)
Add back preferred stock dividend															12
Net income															$	748
Segment assets	$	131,640	$	12,943	$	4,870	$	149,453	$	3,815		$	181		$	153,449



	Three Months Ended September 30, 2017
	Electric		Gas					Total
	Utilities and		Utilities and		Commercial			Reportable
(in millions)	Infrastructure		Infrastructure		Renewables			Segments		Other			Eliminations			Consolidated
Unaffiliated revenues	$	6,122	$	249	$	95		$	6,466	$	16		$	—		$	6,482
Intersegment revenues	7		23		—			30		19			(49		)	—
Total revenues	$	6,129	$	272	$	95		$	6,496	$	35		$	(49	)	$	6,482
Segment income (loss)^(a)(b)(c)	$	1,020	$	19	$	(49	)	$	990	$	(34	)	$	—		$	956
Add back noncontrolling interests																1
Loss from discontinued operations, net of tax																(2		)
Net income																$	955
Segment assets	$	118,323	$	11,361	$	4,216		$	133,900	$	2,240		$	185		$	136,325



	Three Months Ended September 30, 2016
	Electric		Gas					Total
	Utilities and		Utilities and		Commercial			Reportable
(in millions)	Infrastructure		Infrastructure		Renewables			Segments		Other			Eliminations			Consolidated
Unaffiliated revenues	$	6,332	$	89	$	139		$	6,560	$	16		$	—		$	6,576
Intersegment revenues	8		—		—			8		16			(24		)	—
Total revenues	$	6,340	$	89	$	139		$	6,568	$	32		$	(24	)	$	6,576
Segment income (loss)^(a)(c)	$	1,189	$	15	$	(24	)	$	1,180	$	(181	)	$	—		$	999
Add back noncontrolling interests																2
Income from discontinued operations, net of tax^(d)																180
Net income																$	1,181