TABLE OF CONTENTS



	Cautionary Statement Regarding Forward-Looking Information

PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements

	Duke Energy Corporation Financial Statements	610

	Duke Energy Carolinas, LLC Financial Statements	1116

	Progress Energy, Inc. Financial Statements	1520

	Duke Energy Progress, LLC Financial Statements	1924

	Duke Energy Florida, LLC Financial Statements	2328

	Duke Energy Ohio, Inc. Financial Statements	2732

	Duke Energy Indiana, LLC Financial Statements	3136

	Piedmont Natural Gas Company, Inc. Financial Statements	3540

	Combined Notes to Condensed Consolidated Financial Statements
	Note 1 – Organization and Basis of Presentation	3944
	Note 2 – Business Segments	4346
	Note 3 – Regulatory Matters	4749
	Note 4 – Commitments and Contingencies	5962
	Note 5 – ~~Debt and Credit Facilities~~Leases	6465
	Note 6 – ~~Asset Retirement Obligations~~Debt and Credit Facilities	6670
	Note 7 – ~~Goodwill~~Asset Retirement Obligations	6772
	Note 8 – ~~Related Party Transactions~~Goodwill	6873
	Note 9 – ~~Derivatives and Hedging~~Related Party Transactions	6974
	Note 10 – ~~Investments in Debt~~Derivatives and ~~Equity Securities~~Hedging	75
	Note 11 – ~~Fair Value Measurements~~Investments in Debt and Equity Securities	8180
	Note 12 – ~~Variable Interest Entities~~Fair Value Measurements	8985
	Note 13 – ~~Revenue~~Variable Interest Entities	9390
	Note 14 – ~~Common Stock~~Revenue	9894
	Note 15 – ~~Stock-Based Compensation~~Stockholders' Equity	~~100~~99
	Note 16 – Employee Benefit Plans	~~100~~101
	Note 17 – Income Taxes	~~104~~103
	Note 18 – Subsequent Events	~~105~~103

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	~~106~~104

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	~~136~~126

Item 4.	Controls and Procedures	~~136~~126

PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	~~137~~128

Item 1A.	Risk Factors	~~137~~128

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	~~137~~128

Item 6.	Exhibits	~~138~~129

	Signatures	~~141~~132



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 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 and 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;

◦


◦	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;~~


◦	~~The impact of new 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.~~

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 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 representatives

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

ACP	Atlantic Coast Pipeline, LLC, a limited liability company owned by Dominion Energy, Inc., 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

CECL	Current expected credit loss

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.



GLOSSARY OF TERMS



Duke Energy Progress	Duke Energy Progress, LLC

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

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



GLOSSARY OF TERMS



Moody's	Moody's Investors Service, Inc.

MW	Megawatt

MWh	Megawatt-hour

NAV	Net asset value

NCDEQ	North Carolina Department of Environmental Quality

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

PPA	Purchase Power Agreement

Progress Energy	Progress Energy, Inc.

PSCSC	Public Service Commission of South Carolina

PUCO	Public Utilities Commission of Ohio

REC	Renewable Energy Certificate

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						Nine Months Ended
	September 30,						September 30,						September 30,						September 30,
(in millions, except per-share amounts)	2018			2017			2018			2017			2019			2018			2019			2018
Operating Revenues
Regulated electric	$	6,216		$	6,091		$	16,678		$	16,122		$	6,515		$	6,216		$	17,223		$	16,678
Regulated natural gas	230			247			1,221			1,168			223			230			1,231			1,221
Nonregulated electric and other	182			144			507			476			202			182			522			507
Total operating revenues	6,628			6,482			18,406			17,766			6,940			6,628			18,976			18,406
Operating Expenses
Fuel used in electric generation and purchased power	1,931			1,863			5,181			4,853			1,978			1,931			5,228			5,181
Cost of natural gas	58			68			460			402			48			58			451			460
Operation, maintenance and other	1,584			1,476			4,592			4,385			1,484			1,584			4,337			4,592
Depreciation and amortization	1,039			900			2,979			2,594			1,186			1,039			3,364			2,979
Property and other taxes	323			313			954			924			335			323			1,012			954
Impairment charges	124			207			339			216			(20		)	124			(16		)	339
Total operating expenses	5,059			4,827			14,505			13,374			5,011			5,059			14,376			14,505
Gains (Losses) on Sales of Other Assets and Other, net	10			6			(87		)	24			—			10			—			(87		)
Operating Income	1,579			1,661			3,814			4,416			1,929			1,579			4,600			3,814
Other Income and Expenses
Equity in earnings of unconsolidated affiliates	37			36			49			101			50			37			137			49
Other income and expenses, net	131			122			327			358			104			131			308			327
Total other income and expenses	168			158			376			459			154			168			445			376
Interest Expense	517			498			1,550			1,475			572			517			1,657			1,550
Income From Continuing Operations Before Income Taxes	1,230			1,321			2,640			3,400			1,511			1,230			3,388			2,640
Income Tax Expense From Continuing Operations	168			364			449			1,035			188			168			424			449
Income From Continuing Operations	1,062			957			2,191			2,365			1,323			1,062			2,964			2,191
Income (Loss) From Discontinued Operations, net of tax	4			(2		)	(1		)	(4		)	—			4			—			(1		)
Net Income	1,066			955			2,190			2,361			1,323			1,066			2,964			2,190
Less: Net (Loss) Income Attributable to Noncontrolling Interests	(16		)	1			(12		)	5
Less: Net Loss Attributable to Noncontrolling Interests													(19		)	(16		)	(110		)	(12		)
Less: Preferred Dividends													15			—			27			—
Net Income Attributable to Duke Energy Corporation	$	1,082		$	954		$	2,202		$	2,356		$	1,327		$	1,082		$	3,047		$	2,202

Earnings Per Share – Basic and Diluted
Income from continuing operations attributable to Duke Energy Corporation common stockholders
Basic	$	1.51		$	1.36		$	3.12		$	3.37		$	1.82		$	1.51		$	4.18		$	3.12
Diluted	$	1.51		$	1.36		$	3.11		$	3.37		$	1.82		$	1.51		$	4.18		$	3.11
Loss from discontinued operations attributable to Duke Energy Corporation common stockholders
Basic	$	—		$	—		$	—		$	(0.01	)
Diluted	$	—		$	—		$	—		$	(0.01	)
Income (Loss) from discontinued operations attributable to Duke Energy Corporation common stockholders
Basic and Diluted													$	—		$	—		$	—		$	—
Net income attributable to Duke Energy Corporation common stockholders
Basic	$	1.51		$	1.36		$	3.12		$	3.36		$	1.82		$	1.51		$	4.18		$	3.12
Diluted	$	1.51		$	1.36		$	3.11		$	3.36		$	1.82		$	1.51		$	4.18		$	3.11
Weighted average shares outstanding
Basic	713			700			705			700			729			713			728			705
Diluted	714			700			706			700			729			714			728			706

~~PART I~~



FINANCIAL STATEMENTS

DUKE ENERGY CORPORATION

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)



	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(in millions)	2019			2018			2019			2018
Net Income	$	1,323		$	1,066		$	2,964		$	2,190
Other Comprehensive (Loss) Income, net of tax
Pension and OPEB adjustments	(2		)	1			1			3
Net unrealized (losses) gains on cash flow hedges	(16		)	(3		)	(62		)	10
Reclassification into earnings from cash flow hedges	1			6			4			5
Unrealized gains (losses) on available-for-sale securities	2			—			10			(5		)
Other Comprehensive (Loss) Income, net of tax	(15		)	4			(47		)	13
Comprehensive Income	1,308			1,070			2,917			2,203
Less: Comprehensive Loss Attributable to Noncontrolling Interests	(19		)	(16		)	(110		)	(12		)
Less: Preferred Dividends	15			—			27			—
Comprehensive Income Attributable to Duke Energy Corporation	$	1,312		$	1,086		$	3,000		$	2,215



FINANCIAL STATEMENTS

Three Months Ended Nine Months Ended
September 30, September 30,
(in millions) 2018
2017
2018
2017
Net Income $ 1,066
$ 955
$ 2,190
$ 2,361
Other Comprehensive Income, net of tax
Pension and OPEB adjustments 1
—
3
2
Net unrealized (losses) gains on cash flow hedges (3 ) 2
10
(2 )
Reclassification into earnings from cash flow hedges 6
(2 ) 5
3
Unrealized (losses) gains on available-for-sale securities —
2
(5 ) 10
Other Comprehensive Income, net of tax 4
2
13
13
Comprehensive Income 1,070
957
2,203
2,374
Less: Comprehensive (Loss) Income Attributable to Noncontrolling Interests (16 ) 1
(12 ) 5
Comprehensive Income Attributable to Duke Energy Corporation $ 1,086
$ 956
$ 2,215
$ 2,369

~~PART I~~

DUKE ENERGY CORPORATION

Condensed Consolidated Balance Sheets

(Unaudited)


(in millions)	September 30, 2018			December 31, 2017			September 30, 2019			December 31, 2018
ASSETS
Current Assets
Cash and cash equivalents	$	303		$	358		$	379		$	442
Receivables (net of allowance for doubtful accounts of $17 at 2018 and $14 at 2017)	682			779
Receivables of VIEs (net of allowance for doubtful accounts of $55 at 2018 and $54 at 2017)	2,397			1,995
Receivables (net of allowance for doubtful accounts of $20 at 2019 and $16 at 2018)							755			962
Receivables of VIEs (net of allowance for doubtful accounts of $53 at 2019 and $55 at 2018)							2,322			2,172
Inventory	3,140			3,250			3,107			3,084
Regulatory assets (includes $52 at 2018 and $51 at 2017 related to VIEs)	1,906			1,437
Other	1,092			634
Regulatory assets (includes $52 at 2019 and 2018 related to VIEs)							1,723			2,005
Other (includes $188 at 2019 and $162 at 2018 related to VIEs)							1,333			1,049
Total current assets	9,520			8,453			9,619			9,714
Property, Plant and Equipment
Cost	132,677			127,507			143,794			134,458
Accumulated depreciation and amortization	(43,200		)	(41,537		)	(45,149		)	(43,126		)
Generation facilities to be retired, net	388			421			267			362
Net property, plant and equipment	89,865			86,391			98,912			91,694
Other Noncurrent Assets
Goodwill	19,303			19,396			19,303			19,303
Regulatory assets (includes $1,055 at 2018 and $1,091 at 2017 related to VIEs)	12,616			12,442
Regulatory assets (includes $1,002 at 2019 and $1,041 at 2018 related to VIEs)							13,916			13,617
Nuclear decommissioning trust funds	7,421			7,097			7,695			6,720
Operating lease right-of-use assets, net							1,703			—
Investments in equity method unconsolidated affiliates	1,328			1,175			1,864			1,409
Other	3,112			2,960
Other (includes $63 at 2019 and $261 at 2018 related to VIEs)							2,905			2,935
Total other noncurrent assets	43,780			43,070			47,386			43,984
Total Assets	$	143,165		$	137,914		$	155,917		$	145,392
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable	$	3,234		$	3,043		$	2,946		$	3,487
Notes payable and commercial paper	2,891			2,163			2,469			3,410
Taxes accrued	674			551			712			577
Interest accrued	557			525			559			559
Current maturities of long-term debt (includes $228 at 2018 and $225 at 2017 related to VIEs)	3,455			3,244
Current maturities of long-term debt (includes $231 at 2019 and $227 at 2018 related to VIEs)							3,096			3,406
Asset retirement obligations	902			689			861			919
Regulatory liabilities	506			402			673			598
Other	1,703			1,865			2,074			2,085
Total current liabilities	13,922			12,482			13,390			15,041
Long-Term Debt (includes $4,015 at 2018 and $4,306 at 2017 related to VIEs)	50,507			49,035
Long-Term Debt (includes $4,060 at 2019 and $3,998 at 2018 related to VIEs)							54,818			51,123
Other Noncurrent Liabilities
Deferred income taxes	7,765			6,621			8,776			7,806
Asset retirement obligations	9,354			9,486			11,740			9,548
Regulatory liabilities	15,587			15,330			15,202			14,834
Operating lease liabilities							1,456			—
Accrued pension and other post-retirement benefit costs	1,001			1,103			900			988
Investment tax credits	539			539			579			568
Other	1,477			1,581
Other (includes $218 at 2019 and $212 at 2018 related to VIEs)							1,649			1,650
Total other noncurrent liabilities	35,723			34,660			40,302			35,394
Commitments and Contingencies
Equity
Common stock, $0.001 par value, 2 billion shares authorized; 713 million shares outstanding at 2018 and 700 million shares outstanding at 2017	1			1
Preferred stock, Series A, $0.001 par value, 40 million depositary shares authorized and outstanding at 2019							973			—
Preferred stock, Series B, $0.001 par value, 1 million shares authorized and outstanding at 2019							990			—
Common stock, $0.001 par value, 2 billion shares authorized; 729 million shares outstanding at 2019 and 727 million shares outstanding at 2018							1			1
Additional paid-in capital	39,747			38,792			40,488			40,795
Retained earnings	3,313			3,013			4,139			3,113
Accumulated other comprehensive loss	(66		)	(67		)	(153		)	(92		)
Total Duke Energy Corporation stockholders' equity	42,995			41,739			46,438			43,817
Noncontrolling interests	18			(2		)	969			17
Total equity	43,013			41,737			47,407			43,834
Total Liabilities and Equity	$	143,165		$	137,914		$	155,917		$	145,392

~~PART I~~



FINANCIAL STATEMENTS

DUKE ENERGY CORPORATION

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Nine Months Ended						Nine Months Ended
	September 30,						September 30,
(in millions)	2018			2017			2019			2018
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	2,190		$	2,361		$	2,964		$	2,190
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and accretion (including amortization of nuclear fuel)	3,447			2,990			3,831			3,447
Equity component of AFUDC	(175		)	(175		)	(99		)	(175		)
Losses (gains) on sales of other assets	87			(28		)
Losses on sales of other assets							—			87
Impairment charges	339			216			(16		)	339
Deferred income taxes	1,099			1,016			736			1,099
Equity in earnings of unconsolidated affiliates	(49		)	(101		)	(137		)	(49		)
Accrued pension and other post-retirement benefit costs	46			19			13			46
Contributions to qualified pension plans	(141		)	(8		)	(77		)	(141		)
Payments for asset retirement obligations	(389		)	(420		)	(582		)	(389		)
Payment for disposal of other assets	(105		)	—			—			(105		)
Other rate case adjustments	37			—			—			37
Provision for rate refunds	375			—			61			375
(Increase) decrease in
Net realized and unrealized mark-to-market and hedging transactions	15			4			(4		)	15
Receivables	(288		)	80			62			(288		)
Inventory	104			248			(3		)	104
Other current assets	(648		)	(210		)	(134		)	(648		)
Increase (decrease) in
Accounts payable	389			(554		)	(538		)	389
Taxes accrued	122			233			125			122
Other current liabilities	(180		)	(532		)	(198		)	(180		)
Other assets	(585		)	(159		)	(264		)	(585		)
Other liabilities	(23		)	(2		)	(103		)	(23		)
Net cash provided by operating activities	5,667			4,978			5,637			5,667
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(6,752		)	(5,841		)	(8,084		)	(6,752		)
Contributions to equity method investments	(298		)	(370		)	(264		)	(298		)
Purchases of debt and equity securities	(2,763		)	(3,170		)	(3,105		)	(2,763		)
Proceeds from sales and maturities of debt and equity securities	2,718			3,199			3,092			2,718
Other	(175		)	(149		)	(272		)	(175		)
Net cash used in investing activities	(7,270		)	(6,331		)	(8,633		)	(7,270		)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the:
Issuance of long-term debt	4,110			5,710			6,131			4,110
Issuance of preferred stock							1,963			—
Issuance of common stock	834			—			41			834
Payments for the redemption of long-term debt	(2,278		)	(2,035		)	(2,737		)	(2,278		)
Proceeds from the issuance of short-term debt with original maturities greater than 90 days	243			265			339			243
Payments for the redemption of short-term debt with original maturities greater than 90 days	(207		)	(237		)	(479		)	(207		)
Notes payable and commercial paper	638			(647		)	(879		)	638
Contributions from noncontrolling interests							615			—
Dividends paid	(1,835		)	(1,825		)	(1,990		)	(1,835		)
Other	42			8			(17		)	42
Net cash provided by financing activities	1,547			1,239			2,987			1,547
Net decrease in cash, cash equivalents and restricted cash	(56		)	(114		)	(9		)	(56		)
Cash, cash equivalents and restricted cash at beginning of period	505			541			591			505
Cash, cash equivalents and restricted cash at end of period	$	449		$	427		$	582		$	449
Supplemental Disclosures:
Significant non-cash transactions:
Accrued capital expenditures	$	1,016		$	740		$	1,073		$	1,016
Non-cash dividends	79			—			81			79

~~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)~~

3. REGULATORY MATTERS

RATE-RELATED INFORMATION

The NCUC, PSCSC, FPSC, IURC, PUCO, TPUC and KPSC approve rates for retail electric and natural gas services within their states. The FERC approves rates for electric sales to wholesale customers served under cost-based rates (excluding Ohio and Indiana), as well as sales of transmission service. The FERC also regulates certification and siting of new interstate natural gas pipeline projects.

Duke Energy Carolinas and Duke Energy Progress

~~Grid Improvement – South Carolina~~Hurricane Florence, Hurricane Michael and Winter Storm Diego Deferral Filings

On ~~June 22,~~December 21, 2018, Duke Energy Carolinas and Duke Energy Progress filed ~~a joint petition~~ with the ~~PSCSC seeking an accounting order authorizing deferral of certain~~NCUC petitions for approval to defer the incremental costs incurred in connection with ~~grid reliability, resiliency and modernization work that is being performed under~~ the ~~companies’ grid improvement initiative. On October 3, 2018, the PSCSC granted Duke Energy Carolinas' and Duke Energy Progress' joint petition.~~

response to Hurricane Florence, Hurricane Michael and Winter Storm ~~Damage~~

In September 2018, Hurricane Florence made landfall and inflicted severe damage to the Duke Energy Carolinas and Duke Energy Progress territories in North Carolina and South Carolina. Approximately 1.8 million customers were impacted. The companies incurred approximately $455 million in operation and maintenance expenses ($35 million and $420 million for Duke Energy Carolinas and Duke Energy Progress, respectively,) and approximately $85 million in capital costs ($10 million and $75 million for Duke Energy Carolinas and Duke Energy Progress, respectively,) which are included in Net property, plant and equipment on the Condensed Consolidated Balance Sheets as of September 30, 2018, resulting from the hurricane restoration efforts. Most of the operation and maintenance expenses are deferred in Regulatory assets within Other Noncurrent Assets on the Condensed Consolidated Balance Sheets as of September 30, 2018. The balance of operation and maintenance expenses are included in Operation, maintenance and other on the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2018.

~~Given the magnitude of the storm, Duke Energy Progress intends to request approval in North Carolina and South Carolina to defer the incremental costs incurred~~Diego to a regulatory asset for recovery in the next base rate case. ~~These requests are expected~~The NCUC issued an order requesting comments on the deferral positions. On March 5, 2019, the North Carolina Public Staff (Public Staff) filed comments. On April 2, 2019, Duke Energy Carolinas and Duke Energy Progress filed reply comments, which included revised estimates of approximately $553 million in incremental operation and maintenance expenses ($171 million and $382 million for Duke Energy Carolinas and Duke Energy Progress, respectively) and approximately $96 million in capital costs ($20 million and $76 million for Duke Energy Carolinas and Duke Energy Progress, respectively). On September 30, 2019, Duke Energy Carolinas requested that the NCUC consolidate its pending deferral request with its general rate case filed on that date. On October 30, 2019, Duke Energy Progress requested that the NCUC consolidate its pending deferral request with its general rate case filed on that date. Duke Energy Carolinas and Duke Energy Progress cannot predict the outcome of these matters. Duke Energy Progress filed a deferral request for these storms with the PSCSC on January 11, 2019, which also included a request for the continuation of prior deferrals requested for ice storms and Hurricane Matthew, and on January 30, 2019, the PSCSC issued a directive approving the deferral request, followed by an order issued on February 21, 2019. On March 15, 2019, Duke Energy Progress filed a request with FERC requesting permission to defer transmission-related storm costs that would be ~~filed during~~charged to wholesale transmission customers through Duke Energy Progress' Open Access Transmission Tariff (OATT) and to recover those costs from wholesale transmission customers over a three-year recovery period. FERC accepted the ~~fourth quarter of 2018.~~filing on May 14, 2019, which allows Duke Energy Progress to proceed with the proposed cost deferral and recovery.

Duke Energy Carolinas

2017 North Carolina Rate Case

On August 25, 2017, Duke Energy Carolinas filed an application with the NCUC for a rate increase for retail customers of approximately $647 million, which represented an approximate ~~13.6 percent~~13.6% increase in annual base revenues. The request for rate increase was driven by capital investments subsequent to the previous base rate case, including the ~~William States~~W.S. Lee ~~Combined Cycle Facility discussed below,~~CC, grid improvement projects, ~~advanced metering infrastructure (AMI),~~AMI, investments in customer service technologies, costs of complying with ~~coal combustion residuals (CCR)~~CCR regulations and the ~~North Carolina~~ Coal Ash ~~Management~~ Act ~~of 2014 (Coal Ash Act)~~ and recovery of costs related to licensing and development of the ~~William States~~ Lee ~~III~~ Nuclear ~~Station (Lee Nuclear Station) discussed below.~~Station.

On February 28, 2018, Duke Energy Carolinas and the ~~North Carolina~~ Public Staff ~~(Public Staff)~~ filed an Agreement and Stipulation of Partial Settlement resolving certain portions of the proceeding. Terms of the settlement included a return on equity of ~~9.9 percent~~9.9% and a capital structure of ~~52 percent~~52% equity and ~~48 percent~~48% debt. As a result of the settlement, Duke Energy Carolinas recorded a pretax charge of approximately $4 million in the first quarter of 2018 to Operation, maintenance and other on the Condensed Consolidated Statements of Operations.

On June 1, 2018, Duke Energy Carolinas and certain intervenors filed a Pilot Grid Rider Agreement and Stipulation (Grid Rider Stipulation) in which the parties agreed to the proposal Duke Energy Carolinas introduced in a post-hearing brief on April 27, 2018, along with additional commitments by Duke Energy Carolinas. Also on June 1, 2018, Duke Energy Carolinas and the Commercial Group filed a Partial Stipulation and Settlement Agreement to be considered in conjunction with the Stipulation.

~~Components of the Grid Rider Stipulation included:~~

Duke Energy Carolinas would recover grid improvement costs through a pilot, three-year Grid Rider except for costs related to targeted undergrounding of power lines, cable and conduit replacement, and power pole replacement;

~~Excluded costs were to be deferred with a return until Duke Energy Carolinas’ next base rate case proceeding; and~~

~~Costs incurred during the three-year pilot, both rider recoverable and deferred, were subject to a 4.5 percent cumulative cap of total annual electric service revenue.~~

~~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)~~

On June 22, 2018, the NCUC issued an order approving the Stipulation of Partial Settlement and requiring a revenue reduction. ~~The order also included the following material components not covered in the Stipulation:~~

~~Recovery of $554 million of deferred coal ash basin closure costs over a five-year period with a return at Duke Energy Carolinas' weighted average cost of capital (WACC);~~

~~Assessment of a $70 million management penalty ratably over a five-year period by reducing the annual recovery of the deferred coal ash costs;~~

Denial of Duke Energy Carolinas' request for recovery of future estimated ongoing annual coal ash costs of $201 million with approval to defer such costs with a return at Duke Energy Carolinas' WACC, to be considered for recovery in the next rate case;

~~Inclusion in rates of costs related to the Lee Combined Cycle Facility, two new solar facilities, and AMI deployment as requested;~~

~~Recovery of Lee Nuclear Station licensing and development cost of $347 million over a 12-year period, but denial of a return on the deferred balance of costs;~~

Reduction in revenue related to lower income tax expense resulting from the Federal Tax Cuts and Jobs Act (Tax Act), and a requirement to maintain all excess deferred income tax (EDIT) resulting from the Tax Act in a regulatory liability account pending flow back to customers as approved by the commission at the earlier of three years or Duke Energy Carolinas’ next general rate case proceeding; and

Denial of the proposed Grid Rider Stipulation related to grid improvement costs and denial of deferral accounting treatment of the costs at this time. Duke Energy Carolinas may petition for deferral of grid modernization costs outside of a general rate case proceeding if it can show financial hardship or a stipulation that includes greater consensus among intervening parties on costs being classified as grid modernization.

As a result of the ~~Order,~~order, Duke Energy Carolinas recorded a pretax charge of approximately $150 million to Impairment charges and Operation, maintenance and other on the Condensed Consolidated Statements of Operations. The charge iswas primarily related to the denial of a return on the Lee Nuclear Project and ~~for previously recognized return impacted~~the assessment of a $70 million management penalty by reducing the annual recovery of deferred coal ash ~~management penalty described above.~~costs by $14 million per year over a five-year recovery period. On July 27, 2018, NCUC approved Duke Energy Carolinas' compliance filing. As a result, revised customer rates were effective on August 1, 2018.



FINANCIAL STATEMENTS	REGULATORY MATTERS

On July 20, 2018, the North Carolina Attorney General filed a Notice of Appeal to the North Carolina Supreme Court from the June 22, 2018, Order Accepting Stipulation, Deciding Contested Issues and Requiring Revenue Reduction issued by the NCUC. The Attorney General contends the commission’s order should be reversed and remanded, as it is in excess of the commission’s statutory authority; affected by errors of law; unsupported by competent, material and substantial evidence in view of the entire record as submitted; and arbitrary or capricious. The Sierra Club, North Carolina Sustainable Energy Association, North Carolina Justice Center, North Carolina Housing Coalition, Natural Resource Defense Council and Southern Alliance for Clean Energy ~~have~~ also filed Notices of Appeal to the North Carolina Supreme ~~Court from the June 22, 2018, Order Accepting Stipulation, Deciding Contested Issues and Requiring Revenue Reduction.~~Court. On August 8, 2018, the Public Staff filed a Notice of Cross Appeal to the North Carolina Supreme Court, ~~from~~which contends the commission’s June 22, 2018, ~~Order Accepting Stipulation, Deciding Contested Issues and Requiring Revenue Reduction issued by the NCUC. The Public Staff contends the commission’s~~ order should be reversed and remanded, as it is affected by errors of law, and is unsupported by substantial evidence with regard to the commission’s failure to consider substantial evidence of coal ash related environmental violations. On November 29, 2018, the North Carolina Attorney General's Office filed a motion with the North Carolina Supreme Court requesting the court consolidate the Duke Energy Carolinas and Duke Energy Progress appeals and enter an order adopting the parties’ proposed briefing schedule as set out in the filing. On November 29, 2018, the North Carolina Supreme Court adopted a schedule for briefing set forth in the motion to consolidate the Duke Energy Carolinas and Duke Energy Progress appeals. Appellant’s brief was filed on April 26, 2019. The ~~briefing will likely~~Appellee response briefs were filed on September 25, 2019. Duke Energy Carolinas cannot predict the outcome of this matter.

2019 North Carolina Rate Case

On September 30, 2019, Duke Energy Carolinas filed an application with the NCUC for a net rate increase for retail customers of approximately $291 million, which represents an approximate 6% increase in annual base revenues. The gross rate case revenue increase request is $445 million, which is offset by an EDIT rider of $154 million to return to customers North Carolina and federal EDIT resulting from recent reductions in corporate tax rates. The request for rate increase is driven by major capital investments subsequent to the previous base rate case, coal ash pond closure costs, accelerated coal plant depreciation and deferred 2018 storm costs. Duke Energy Carolinas requests rates be ~~delayed until the second quarter of 2019.~~effective no later than August 1, 2020. Duke Energy Carolinas cannot predict the outcome of this matter.

2018 South Carolina Rate Case

On ~~October~~November 8, 2018, Duke Energy Carolinas filed ~~a notice~~an application with the PSCSC for a rate increase for retail customers of approximately $168 million, which represents an approximate 10% increase in retail revenues. The request for rate increase was driven by capital investments and environmental compliance progress made by Duke Energy Carolinas since its previous rate case, including the further implementation of Duke Energy Carolinas’ generation modernization program, which consists of retiring, replacing and upgrading generation plants, investments in customer service technologies and continued investments in base work to maintain its transmission and distribution systems. The request included net tax benefits resulting from the Tax Act of $66 million to reflect the change in ongoing tax expense, primarily from the reduction in the federal income tax rate from 35% to 21%. The request also included $46 million to return EDIT resulting from the federal tax rate change and deferred revenues since January 2018 related to the change and benefits of $17 million from a reduction in North Carolina state income taxes allocable to South Carolina (EDIT Rider).

Duke Energy Carolinas also requested approval of its proposed Grid Improvement Plan (GIP), adjustments to its Prepaid Advantage Program and a variety of accounting orders related to ongoing costs for environmental compliance, including recovery over a five-year period of $242 million of deferred coal ash related compliance costs, grid investments between rate changes, incremental depreciation expense, a result of new depreciation rates from the depreciation study approved in the 2017 North Carolina Rate Case above, and the balance of development costs associated with the cancellation of the ~~company’s intent~~Lee Nuclear Project. Finally, Duke Energy Carolinas sought approval to establish a reserve and accrual for end-of-life nuclear costs for nuclear fuel and materials and supplies. On March 8, 2019, the ORS moved to establish a new and separate hearing docket to review and consider the GIP proposed by Duke Energy Carolinas. Subsequently, on March 12, 2019, the ORS and Duke Energy Carolinas executed a Stipulation resolving the ORS’s motion. The Stipulation provided that costs incurred for the GIP after January 1, 2019, will be deferred with a return, subject to evaluation in a future rate proceeding, and that Duke Energy Carolinas will refile for consideration of the GIP in a new docket for resolution by January 1, 2020. The Stipulation was approved by the PSCSC on June 19, 2019.

After hearings in March 2019, the PSCSC issued an order on May 21, 2019, which included a return on equity of 9.5% and a capital structure of 53% equity and 47% debt. The order also included the following material components:

Approval of cancellation of the Lee Nuclear Project, with Duke Energy Carolinas maintaining the Combined Operating License;

Approval of recovery of $125 million (South Carolina retail portion) of Lee Nuclear Project development costs (including AFUDC through December 2017) over a 12-year period, but denial of a return on the deferred balance of costs;

Approval of recovery of $96 million of coal ash costs over a five-year period with a return at Duke Energy Carolinas' WACC;

Denial of recovery of $115 million of certain coal ash costs deemed to be related to the Coal Ash Act and incremental to the federal CCR rule;

Approval of a $66 million decrease to base rates to reflect the change in ongoing tax expense, primarily the reduction in the federal income tax rate from 35% to 21%;

Approval of a $45 million decrease through the EDIT Rider to return EDIT resulting from the federal tax rate change and deferred revenues since January 2018 related to the change, to be returned in accordance with the Average Rate Assumption Method (ARAM) for protected EDIT, over a 20-year period for unprotected EDIT associated with Property, Plant and Equipment, over a five-year period for unprotected EDIT not associated with Property, Plant and Equipment and over a five-year period for the deferred revenues; and

Approval of a $17 million decrease through the EDIT Rider related to reductions in the North Carolina state income tax rate from 6.9% to 2.5% to be returned over a five-year period.



FINANCIAL STATEMENTS	REGULATORY MATTERS

As a result of the order, revised customer rates were effective June 1, 2019. On May 31, 2019, Duke Energy Carolinas filed a Petition for Rehearing or Reconsideration of that order contending substantial rights of Duke Energy Carolinas were prejudiced by unlawful, arbitrary and capricious rulings by the commission on certain issues presented in the proceeding. On June 19, 2019, the PSCSC issued a Directive denying Duke Energy Carolinas' request to rehear or reconsider the commission's rulings on certain issues presented in the proceeding including coal ash remediation and disposal costs, return on equity and the recovery of a return on deferred operation and maintenance expenses. An order detailing the commission's decision in the Directive was issued on October 18, 2019. Duke Energy Carolinas intends to file a ~~base rate adjustment application no earlier than~~notice of appeal within 30 days ~~from~~of the ~~notice submittal date.~~date of the order with the South Carolina Supreme Court. Based on legal analysis and Duke Energy Carolinas' intention to file such an appeal, Duke Energy Carolinas has not recorded an adjustment for its deferred coal ash costs. Duke Energy Carolinas cannot predict the outcome of this matter.

FERC Formula Rate Matter

On July 31, 2017, ~~Piedmont Municipal Power Agency (PMPA)~~PMPA filed a complaint with FERC ~~against Duke Energy Carolinas~~ alleging that Duke Energy Carolinas misapplied the formula rate under the PPA between the parties by including in its rates amortization expense associated with regulatory assets and recorded in a certain account without FERC approval. On February 15, 2018, FERC issued an order ruling in favor of PMPA and ordered Duke Energy Carolinas to refund to PMPA all amounts improperly collected under the PPA. Duke Energy Carolinas has issued to PMPA and similarly situated wholesale customers refunds of approximately $25 million. FERC also set the matter for settlement and hearing. PMPA and other customers filed a protest to Duke Energy Carolinas' refund report claiming that the refunds are inadequate in that (1) Duke Energy Carolinas invoked the limitations periods in the contracts to limit the time period for which the refunds were paid and the customers disagree that this limitation applies, and (2) Duke Energy Carolinas refunded only amounts recovered through a certain account and the customers have asserted that the order applies to all regulatory assets. On July 3, 2018, FERC issued an order accepting Duke Energy Carolinas' refund report and ruling that these two claims are outside the scope of FERC's February order. The settlement agreements and revised formula rates for all parties to the proceeding were filed on December 28, 2018. On April 2, 2019, FERC issued an order approving the settlement agreement as filed. Since then, Duke Energy Carolinas ~~will file revised formula~~has implemented the terms of the settlement in rates ~~as well as settlement agreements which are subject to FERC approval.~~with all wholesale customers, including non-intervening customers. On July 25, 2019, Duke Energy Carolinas ~~cannot predict the outcome of this matter.~~

~~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)~~

~~William States Lee Combined Cycle Facility~~

~~On April 9, 2014, the PSCSC granted Duke Energy Carolinas and North Carolina Electric Membership Corporation (NCEMC) a Certificate of Environmental Compatibility and Public Convenience and Necessity~~received FERC approval for the construction and operation of a 750-megawatt (MW) combined-cycle natural gas-fired generating plant at Duke Energy Carolinas' existing William States Lee Generating Station in Anderson, South Carolina. Duke Energy Carolinas began construction in July 2015 and its share of the cost to build the facility was approximately $650 million, including allowanceaccounting treatment requested for ~~funds used during construction (AFUDC). Approximately $600 million is being recovered through base rate or deferral filings in North Carolina and South Carolina. The remaining amount will be~~certain assets included in ~~future rate filings. The project commenced commercial operation on April 5, 2018. NCEMC owns approximately 13 percent of~~ the ~~project.~~

~~Lee Nuclear Station~~

~~In December 2007, Duke Energy Carolinas applied to~~settlement agreements. This is the NRC for combined operating licenses (COLs) for two Westinghouse Electric Company (Westinghouse) AP1000 reactors for the proposed William States Lee III Nuclear Station to be located at a site in Cherokee County, South Carolina. The NCUCfinal approval needed from FERC and PSCSC concurred with the prudency of Duke Energy Carolinas incurring certain project development and preconstruction costs through several separately issued orders, although full cost recovery is not guaranteed. In December 2016, the NRC issued a COL for each reactor. Duke Energy Carolinas is not required to build the nuclear reactors as a result of the COLs being issued.

The Duke Energy Carolinas rate case filing discussed above included a request to cancel the development of the Lee Nuclear Station project, recover incurred licensing and development costs and maintain the license issued by the NRC as an option for potential future development. The cancellation request was due to the Westinghouse bankruptcy filing and other market activity. The NCUC Order issued on June 22, 2018, approved the cancellation of the Lee Nuclear Project, allowed Duke Energy Carolinas to continue to maintain the COLs, provided for recovery of the North Carolina retail allocation of project development costs, including AFUDC accrued through December 31, 2017, over 12 years and disallowed any return on the unamortized balance during the 12-year recovery period.

Given the recent repeal of certain sections of the Base Load Review Act in South Carolina combined with the cancellation of the project, Duke Energy Carolinas determined that it was no longer probable it would be allowed a return on its share of project development costs attributable to South Carolina. As a result, Duke Energy Carolinas recorded a pretax impairment in the second quarter of $29 million within Impairment charges on the Condensed Consolidated Statements of Operations and Comprehensive Income.

~~South Carolina Petition~~

On June 22, 2018, Duke Energy Carolinas filed a petition with the PSCSC requesting an accounting order to defer certain costs incurred in connection with the addition of the William States Lee Combined Cycle Facility, the ongoing deployment of Duke Energy Carolinas new billing and Customer Information System and the addition of the Carolinas West Primary Distribution Control Center. This request totaling approximately $33 million was approved on July 25, 2018.concludes this proceeding.

Sale of Hydroelectric (Hydro) Plants

In May 2018, Duke Energy Carolinas entered an agreement for the sale of five hydro plants with a combined 18.7-MW generation capacity in the Western Carolinas region to Northbrook Energy. The completion of the transaction iswas subject to approval from FERC for the four FERC-licensed plants, as well as other state regulatory agencies and iswas contingent upon regulatory approval from the NCUC and PSCSC to defer the total estimated loss on the sale of approximately $40 million. On July 5, 2018, Duke Energy Carolinas filed with NCUC for approval of the sale of the five hydro plants to Northbrook, to transfer the ~~Certificates of Public Convenience and Necessity (CPCN)~~CPCNs for the four North Carolina hydro plants and to establish a regulatory asset for the North Carolina retail portion of the difference between sales proceeds and net book value. On ~~September 4, 2018,~~June 5, 2019, the ~~Public Staff filed comments supporting~~NCUC issued an order approving the ~~CPCN~~ transfer ~~with conditions, specifically that~~of the ~~commission direct~~hydro plants from Duke Energy Carolinas to Northbrook, granting deferral accounting and denying the Public ~~Staff to further evaluate the reasonableness of Duke Energy Carolinas' expenditures at the facilities in the 36 months leading up to the agreement~~Staff's motion for the sale for consideration in the next rate case. On September 18, 2018, Duke Energy Carolinas filed reply comments opposing this condition. The Public Staff also recommended that the amortization period for the regulatory asset start in the month in which the asset transfer is completed, rather than be delayed until the next rate case. reconsideration.

On August 28, 2018, Duke Energy Carolinas filed with PSCSC ~~its~~an Application for Approval of Transfer and Sale of Hydroelectric Generation Facilities, Acceptance for Filing of a Power Purchase Agreement and an Accounting Order to Establish a Regulatory Asset. On September 10, 2018, the ~~South Carolina Office of Regulatory Staff (ORS)~~ORS provided a letter to the commission stating its position on the application and on September 18, 2018, Duke Energy Carolinas requested this matter be carried over to allow Duke Energy Carolinas time to discuss certain accounting issues with the ORS. At their June 26, 2019, agenda meeting, the PSCSC voted to approve the transfer and sale subject to the recommendation of the ORS that the issuance of an Accounting Order will not preclude the ORS, the commission or any other party from addressing the reasonableness of these costs, any return sought and including any carrying costs in the next rate case.

On ~~October~~August 9, 2018, Duke Energy Carolinas and Northbrook filed a ~~Notice of~~joint Application for Transfer of Licenses with the FERC. On December 27, 2018, the FERC ~~which provides 30 days to file comments and motions to intervene.~~

~~If commission approvals are not received,~~issued its Order Approving Transfer of Licenses (“Order”) for the four FERC-licensed hydro plants. On January 18, 2019, Duke Energy Carolinas ~~can cancel~~and Northbrook Carolina Hydro II, LLC requested a six-month extension of time to comply with the ~~sales agreement~~requirement of the Order that Northbrook submit to FERC certified copies of all instruments of conveyance and ~~retain~~signed acceptance sheets within 60 days of the ~~hydro facilities. If commission approvals are received,~~date of the Order. On February 14, 2019, FERC issued an order granting extensions until August 26, 2019, to comply with the requirements of the December 27, 2018, Order.

The closing ~~is expected~~occurred on August 16, 2019. A regulatory asset was established for approximately $32 million, which represents the total deferral amount for North Carolina and South Carolina retail. The North Carolina retail portion will be amortized pursuant to ~~occur during~~an order from the ~~first quarter of 2019. After closing,~~NCUC. Duke Energy Carolinas will purchase all the capacity and energy generated by these facilities at the avoided cost for five years through power purchase agreements. ~~Duke Energy Carolinas cannot predict the outcome of this matter.~~

~~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)~~

Duke Energy Progress

2017 North Carolina Rate Case

On June 1, 2017, Duke Energy Progress filed an application with the NCUC for a rate increase for retail customers of approximately $477 million, which represented an approximate ~~14.9 percent~~14.9% increase in annual base revenues. Subsequent to the filing, Duke Energy Progress adjusted the requested amount to $420 million, representing an approximate ~~13 percent~~13% increase. The request for rate increase iswas driven by capital investments subsequent to the previous base rate case, costs of complying with CCR regulations and the Coal Ash Act, costs relating to storm recovery, investments in customer service technologies and recovery of costs associated with renewable purchased power.

On December 16, 2016, Duke Energy Progress filed a petition with the NCUC requesting an accounting order to defer certain costs incurred in connection with response to Hurricane Matthew and other significant storms in 2016. The final estimate of incremental operation and maintenance and capital costs of $116 million was filed with the NCUC in September 2017. On July 10, 2017, the NCUC consolidated Duke Energy Progress' storm deferral request into the Duke Energy Progress rate case docket for decision.

On November 22, 2017, Duke Energy Progress and the Public Staff filed an Agreement and Stipulation of Partial Settlement resolving certain portions of the proceeding. Terms of the settlement included a return on equity of ~~9.9 percent~~9.9% and a capital structure of ~~52 percent~~52% equity and ~~48 percent~~48% debt. As a result of the settlement, in 2017 Duke Energy Progress recorded pretax charges totaling approximately $25 million to Impairment charges and Operation, maintenance and other on the Condensed Consolidated Statements of Operations, principally related to disallowances from rate base of certain projects at the Mayo and Sutton plants. On February 23, 2018, the NCUC issued an order approving the stipulation. ~~The order also included the following material components not covered in the stipulation:~~

Recovery of the remaining $234 million of deferred coal ash basin closure costs over a five-year period with a return at Duke Energy Progress' WACC, excluding $9.5 million of retail deferred coal ash basin costs related to ash hauling at Duke Energy Progress' Asheville Plant;

~~Assessment of a $30 million management penalty ratably over a five-year period by reducing the annual recovery of the deferred coal ash costs;~~

Denial of Duke Energy Progress' request for recovery of future estimated ongoing annual coal ash costs of $129 million with approval to defer such costs with a return at Duke Energy Progress' WACC, to be considered for recovery in the next rate case; and

Approval to recover $51 million of the approximately $80 million deferred storm costs over a five-year period with amortization beginning in October 2016. The order did not allow the deferral of the associated capital costs or a return on the deferred balance during the deferral period.



FINANCIAL STATEMENTS	REGULATORY MATTERS

The order also impacted certain amounts that were similarly recorded on Duke Energy Carolinas' Condensed Consolidated Balance Sheets. As a result of the order, Duke Energy Progress and Duke Energy Carolinas recorded pretax charges of $68 million and $14 million, respectively, in the first quarter of 2018 to Impairment charges, Operation, maintenance and other and Interest Expense on the Condensed Consolidated Statements of Operations. ~~These charges primarily related to the coal ash basin disallowance and previously recognized return impacted by the coal ash management penalty and deferred storm cost adjustments.~~ Revised customer rates became effective on March 16, 2018.

On May 15, 2018, the Public Staff filed a Notice of Cross Appeal to the North Carolina Supreme Court from the NCUC's February 23, 2018, ~~Order Accepting Stipulation, Deciding Contested Issues and Granting Partial Rate Increase issued by the NCUC.~~Order. The Public Staff ~~contend~~contends the ~~commission’s~~NCUC’s order should be reversed and remanded, as it is affected by errors of law, and is unsupported by competent, material and substantial evidence in view of the entire record as submitted. The North Carolina Attorney General and Sierra Club ~~have~~ also filed Notices of Appeal to the North Carolina Supreme Court from the February 23, 2018, ~~Order Accepting Stipulation, Deciding Contested Issues~~Order. On November 29, 2018, the North Carolina Attorney General's Office filed a motion with the North Carolina Supreme Court requesting the court consolidate the Duke Energy Progress and ~~Granting Partial Rate Increase.~~Duke Energy Carolinas appeals and enter an order adopting the parties’ proposed briefing schedule as set out in the filing. Appellant’s brief was filed on April 26, 2019. The ~~briefing will likely be delayed until the second quarter of~~Appellee response briefs were filed on September 25, 2019. Duke Energy Progress cannot predict the outcome of this matter.

~~2016 South~~2019 North Carolina Rate Case

In December 2016, the PSCSC approved a rate case settlement agreement among the ORS, intervenors and Duke Energy Progress. Terms of the settlement agreement included an approximate $56 million increase in revenues over a two-year period. An increase of approximately $38 million in revenues was effective January 1, 2017, and an additional increase of approximately $18.5 million in revenues was effective January 1, 2018.On October 30, 2019, Duke Energy Progress ~~amortized~~filed an application with the NCUC for a net rate increase for retail customers of approximately ~~$18.5~~$464 million, which represents an approximate 12.3% increase in annual base revenues. The gross rate case revenue increase request is $586 million, which is offset by riders of $122 million, primarily an EDIT rider of $120 million to return to customers North Carolina and federal EDIT resulting from recent reductions in corporate tax rates. The request for rate increase is driven by major capital investments subsequent to the ~~cost of removal reserve in 2017. Other settlement terms included a~~previous base rate ~~of return on equity of 10.1 percent, recovery of~~case, coal ash ~~costs incurred from January 1, 2015, through June 30, 2016, over a 15~~‑~~year period and ongoing deferral of allocated ash basin~~pond closure costs, ~~from July 1, 2016, until the next base rate case. The settlement also provides that~~accelerated coal plant depreciation and deferred 2018 storm costs. Duke Energy Progress ~~will not seek an increase~~seeks to defer and recover incremental Hurricane Dorian storm costs in this proceeding and requests rates be effective no later than September 1, 2020. Duke Energy Progress cannot predict the outcome of this matter.

Hurricane Dorian

Hurricane Dorian reached the Carolinas in September 2019 as a Category 2 hurricane making landfall within Duke Energy Progress’ service territory. Approximately 270,000 North Carolina customers and 30,000 South Carolina customers were impacted by the slow-moving storm that brought high winds, tornadoes and heavy rain. With storm-response mobilization occurring in preparation for the storm and the assistance of mutual aid partners, full restoration was accomplished within four days for all customers able to ~~occur prior~~receive service. Total estimated incremental operation and maintenance expenses incurred to ~~2019,~~repair and restore the system are approximately $208 million with ~~limited exceptions.~~an additional $10 million in capital investments made for restoration efforts. Approximately $182 million of the operation and maintenance expenses are deferred in Regulatory assets within Other Noncurrent Assets on the Condensed Consolidated Balance Sheets as of September 30, 2019. The balance of operation and maintenance expenses are included in Operation, maintenance and other on the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2019.

2018 South Carolina Rate Case

On ~~October~~November 8, 2018, Duke Energy Progress filed ~~a notice~~an application with the PSCSC for a rate increase for retail customers of approximately $59 million, which represents an approximate 10.3% increase in annual base revenues. The request for rate increase was driven by capital investments and environmental compliance progress made by Duke Energy Progress since its previous rate case, including the further implementation of Duke Energy Progress’ generation modernization program, which consists of retiring, replacing and upgrading generation plants, investments in customer service technologies and continued investments in base work to maintain its transmission and distribution systems. The request included a decrease resulting from the Tax Act of $17 million to reflect the change in ongoing tax expense, primarily the reduction in the federal income tax rate from 35% to 21%. The request also included $10 million to return EDIT resulting from the federal tax rate change and deferred revenues since January 2018 related to the change (EDIT Rider) and a $12 million increase due to the expiration of EDITs related to reductions in North Carolina state income taxes allocable to South Carolina.

Duke Energy Progress also requested approval of its proposed GIP, approval of a Prepaid Advantage Program and a variety of accounting orders related to ongoing costs for environmental compliance, including recovery over a five-year period of $51 million of deferred coal ash related compliance costs, AMI deployment, grid investments between rate changes and regulatory asset treatment related to the retirement of a generating plant located in Asheville, North Carolina. Finally, Duke Energy Progress sought approval to establish a reserve and accrual for end-of-life nuclear costs for materials and supplies and nuclear fuel. On March 8, 2019, the ORS moved to establish a new and separate hearing docket to review and consider the GIP proposed by Duke Energy Progress. Subsequently, on March 12, 2019, the ORS and Duke Energy Carolinas executed a Stipulation resolving the ORS’s motion, and Duke Energy Progress agreed to the Stipulation, as did other parties in the rate case. The Stipulation provides that costs incurred for the GIP after January 1, 2019, will be deferred with a return, with all costs subject to evaluation in a future rate proceeding, and that Duke Energy Progress will refile for consideration of the ~~company’s intent~~GIP in a new docket for resolution by January 1, 2020. The Stipulation was approved by the PSCSC on June 19, 2019.

After hearings in April 2019, the PSCSC issued an order on May 21, 2019, which included a return on equity of 9.5% and a capital structure of 53% equity and 47% debt. The order also included the following material components:

Approval of recovery of $4 million of coal ash costs over a five-year period with a return at Duke Energy Progress' WACC;

Denial of recovery of $65 million of certain coal ash costs deemed to be related to the Coal Ash Act and incremental to the federal CCR rule;

Approval of a $17 million decrease to base rates to reflect the change in ongoing tax expense, primarily the reduction in the federal income tax rate from 35% to 21%;



FINANCIAL STATEMENTS	REGULATORY MATTERS

Approval of a $12 million decrease through the EDIT Tax Savings Rider resulting from the federal tax rate change and deferred revenues since January 2018 related to the change, to be returned in accordance with ARAM for protected EDIT, over a 20-year period for unprotected EDIT associated with Property, Plant and Equipment, over a five-year period for unprotected EDIT not associated with Property, Plant and Equipment and over a three-year period for the deferred revenues; and

Approval of a $12 million increase due to the expiration of EDIT related to reductions in the North Carolina state income tax rate from 6.9% to 2.5%.

As a result of the order, revised customer rates were effective June 1, 2019. On May 31, 2019, Duke Energy Progress filed a Petition for Rehearing or Reconsideration of that order contending substantial rights of Duke Energy Progress were prejudiced by unlawful, arbitrary and capricious rulings by the commission on certain issues presented in the proceeding. On June 19, 2019, the PSCSC issued a Directive denying Duke Energy Progress' request to rehear or reconsider the commission's rulings on certain issues presented in the proceeding including coal ash remediation and disposal costs, return on equity and the recovery of a return on deferred operation and maintenance expenses, but allowing additional litigation-related costs. As a result of the Directive allowing litigation-related costs, customer rates were revised effective July 1, 2019. An order detailing the commission's decision in the Directive was issued on October 18, 2019. Duke Energy Progress intends to file a ~~base rate adjustment application no earlier than~~notice of appeal within 30 days ~~from~~of the ~~notice submittal date.~~

~~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~~date of the order with the South Carolina Supreme Court. Based on legal analysis and Duke Energy Progress' intention to ~~Condensed Consolidated Financial Statements – (Unaudited) – (Continued)~~file such an appeal, Duke Energy Progress has not recorded an adjustment for its deferred coal ash costs. Duke Energy Progress cannot predict the outcome of this matter.

Western Carolinas Modernization Plan

On November 4, 2015, Duke Energy Progress announced a Western Carolinas Modernization Plan, which included retirement of the existing Asheville coal-fired plant, the construction of two 280‑MW combined-cycle natural gas plants having dual-fuel capability, with the option to build a third natural gas simple cycle unit in 2023 based upon the outcome of initiatives to reduce the region's power demand. The plan also included upgrades to existing transmission lines and substations, installation of solar generation and a pilot battery storage project. These investments will be made within the next seven years. Duke Energy Progress ~~is also working~~worked with the local natural gas distribution company to upgrade and lease an existing natural gas pipeline to serve the natural gas plant. The lease for the new pipeline became effective on March 2, 2019.

On March 28, 2016, the NCUC issued an order approving a CPCN for the new combined-cycle natural gas plants, but ~~denying the CPCN for the contingent simple cycle unit without prejudice to~~is requiring Duke Energy Progress to refile for CPCN approval infor the ~~future.~~contingent simple cycle unit. On March 28, ~~2018,~~2019, Duke Energy Progress filed an annual progress report for the construction of the combined-cycle plants with the NCUC, with an estimated cost of $893 million. Site preparation activities for the combined-cycle plants are complete and construction of these plants began in 2017, with an expected in-service date in late 2019.

On October 8, 2018, Duke Energy Progress ~~plans~~filed an application with the NCUC for a CPCN to ~~file for future approvals related to~~construct the ~~proposed solar generation~~Hot Springs Microgrid Solar and ~~pilot battery storage project.~~Battery Storage Facility. On March 22, 2019, Duke Energy Progress and the Public Staff filed a Joint Proposed Order. On May 10, 2019, the NCUC issued an Order Granting Certificate of Public Convenience and Necessity with Conditions.

The carrying value of the 376-MW Asheville coal-fired plant, including associated ash basin closure costs, of ~~$352~~$234 million and ~~$385~~$327 million is included in Generation facilities to be retired, net on Duke Energy Progress' Condensed Consolidated Balance Sheets as of September 30, ~~2018,~~2019, and December 31, ~~2017,~~2018, respectively. Duke Energy Progress' request for a regulatory asset at the time of retirement with amortization over a 10-year period was approved by the NCUC on February 23, 2018.

~~Shearon Harris Nuclear Plant Expansion~~FERC Return on Equity Complaint

~~In 2006,~~On October 11, 2019, North Carolina Eastern Municipal Power Agency (Power Agency) filed a complaint at FERC against Duke Energy Progress ~~selected~~pursuant to Section 206 of the Federal Power Act (FPA). The complaint alleges that the return on equity component in the formula rate contained within the Full Requirements Power Purchase Agreement (FRPPA) is unjust and unreasonable. The FRPPA’s return on equity is 11% as applied to the Production Capacity Rate for the full requirements service provided by Duke Energy Progress. The complaint does not definitively propose a ~~site at Harris to evaluate for possible future nuclear expansion. On February 19, 2008,~~replacement return on equity. Under FPA Section 206, the earliest refund effective date that FERC can establish is the date of the filing of the complaint. The complaint could raise risks across the Duke Energy Progress ~~filed its COL application~~wholesale business because, depending on how FERC treats Power Agency’s complaint, other parties may come forward with the NRC for two Westinghouse AP1000 reactors at Harris, which the NRC docketed for review. On May 2, 2013, Duke Energy Progress filed a letter with the NRC requesting the NRC to suspend its review activities associated with the COL at the Harris site. The NCUC and PSCSC approved deferral of retail costs. Total deferred costs were approximately $47 million as of December 31, 2017, and are recorded in Regulatory assets on Duke Energy Progress’ Condensed Consolidated Balance Sheets. On November 17, 2016, the FERC approved Duke Energy Progress’ rate recovery request filing for the wholesale ratepayers’ share of the abandonment costs, including a debt-only return to be recovered through revised formula rates and amortized over a 15-year period beginning May 1, 2014. As part of the settlement agreement for the 2017 North Carolina Rate Case discussed above, Duke Energy Progress will amortize the regulatory asset over an eight-year period. NCUC approved the settlement on February 23, 2018.

~~South Carolina Petitions~~

On June 22, 2018, Duke Energy Progress filed a petition with the PSCSC seeking an accounting order authorizing Duke Energy Progress to adopt new depreciation rates, effective March 16, 2018, that reflect the results of Duke Energy Progress’ most recent depreciation study. Also on June 22, 2018, Duke Energy Progress filed a petition with the PSCSC requesting an accounting order to defer certain costs incurred in connection with the deployment of AMI, the ongoing deployment of Duke Energy Progress' new billing and Customer Information System, new depreciation rates and costs incurred in connection with the return of certain excess deferred state income taxes from North Carolina. These requests totaling approximately $20 million were approved on July 25, 2018.

~~FERC Form 1 Reporting Matter~~

On October 18, 2017, Fayetteville Public Works Commission (FPWC) filed with FERC a complaint against Duke Energy Progress. In the complaint, FPWC alleges that Duke Energy Progress’ change in its method of reporting materials and supplies inventory on FERC Form 1 for 2015 constituted a change in accounting practice that Duke Energy Progress was not permitted to implement without first obtaining FERC approval. On April 23, 2018, FERC issued an order finding that Duke Energy Progress’ new reporting methodology was not proper and required Duke Energy Progress to revise its FERC Form 1s beginning in 2014 and to issue refunds to formula rate customers. Duke Energy Progress estimates that these refunds will total approximately $14 million. On May 23, 2018, Duke Energy Progress filed a request for rehearing alleging that FERC’s order is incorrect. Duke Energy Progress revised its FERC Form 1 filings in June 2018. On August 31, 2018, Duke Energy Progress filed with FERC a refund report memorializing its payment of refunds to FPWC.similar complaints. Duke Energy Progress cannot predict the outcome of this matter.

~~Tax Act~~

As ordered by the NCUC on October 5, 2018, Duke Energy Progress filed a proposal on October 25, 2018, to adjust rates to reflect the reduction in federal corporate income tax rate from 35 to 21 percent for taxable years beginning after December 31, 2017, as outlined in the Tax Act. Duke Energy Progress proposes that this rate decrement be effective for service rendered on and after December 1, 2018. The Public Staff is requested to file comments on the proposal no later than November 14, 2018, and other parties may also file comments on the proposals no later than November 14, 2018. Duke Energy Progress cannot predict the outcome of this matter.

~~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	REGULATORY MATTERS

~~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)~~

~~12.~~13. VARIABLE INTEREST ENTITIES

A VIE is an entity that is evaluated for consolidation using more than a simple analysis of voting control. The analysis to determine whether an entity is a VIE considers contracts with an entity, credit support for an entity, the adequacy of the equity investment of an entity and the relationship of voting power to the amount of equity invested in an entity. This analysis is performed either upon the creation of a legal entity or upon the occurrence of an event requiring re-evaluation, such as a significant change in an entity’s assets or activities. A qualitative analysis of control determines the party that consolidates a VIE. This assessment is based on (i) what party has the power to direct the activities of the VIE that most significantly impact its economic performance and (ii) what party has rights to receive benefits or is obligated to absorb losses that could potentially be significant to the VIE. The analysis of the party that consolidates a VIE is a continual reassessment.

CONSOLIDATED VIEs

The obligations of the consolidated VIEs discussed in the following paragraphs are nonrecourse to the Duke Energy registrants. The registrants have no requirement to provide liquidity to, purchase assets of or guarantee performance of these VIEs unless noted in the following paragraphs.

NoNaN financial support was provided to any of the consolidated VIEs during the nine months ended September 30, ~~2018,~~2019, and the year ended December 31, ~~2017,~~2018, or is expected to be provided in the future that was not previously contractually required.

Receivables Financing – DERF / DEPR / DEFR

~~Duke Energy Receivables Finance Company, LLC (DERF), Duke Energy Progress Receivables, LLC (DEPR)~~DERF, DEPR and ~~Duke Energy Florida Receivables, LLC (DEFR)~~DEFR are bankruptcy remote, special purpose subsidiaries of Duke Energy Carolinas, Duke Energy Progress and Duke Energy Florida, respectively. DERF, DEPR and DEFR are wholly owned limited liability companies with separate legal existence from their parent companies, and their assets are not generally available to creditors of their parent companies. On a revolving basis, DERF, DEPR and DEFR buy certain accounts receivable arising from the sale of electricity and related services from their parent companies.

DERF, DEPR and DEFR borrow amounts under credit facilities to buy these receivables. Borrowing availability from the credit facilities is limited to the amount of qualified receivables purchased. The sole source of funds to satisfy the related debt obligations is cash collections from the receivables. Amounts borrowed under the credit facilities are reflected on the Condensed Consolidated Balance Sheets as Long-Term Debt.

The most significant activity that impacts the economic performance of DERF, DEPR and DEFR are the decisions made to manage delinquent receivables. Duke Energy Carolinas, Duke Energy Progress and Duke Energy Florida are considered primary beneficiaries and consolidate DERF, DEPR and DEFR, respectively, as they make those decisions.

Receivables Financing – CRC

CRC is a bankruptcy remote, special purpose entity indirectly owned by Duke Energy. On a revolving basis, CRC buys certain accounts receivable arising from the sale of electricity, natural gas and related services from Duke Energy Ohio and Duke Energy Indiana. CRC borrows amounts under a credit facility to buy the receivables from Duke Energy Ohio and Duke Energy Indiana. Borrowing availability from the credit facility is limited to the amount of qualified receivables sold to CRC. The sole source of funds to satisfy the related debt obligation is cash collections from the receivables. Amounts borrowed under the credit facility are reflected on Duke Energy's Condensed Consolidated Balance Sheets as Long-Term Debt.

The proceeds Duke Energy Ohio and Duke Energy Indiana receive from the sale of receivables to CRC are ~~typically 75 percent~~approximately 75% cash and ~~25 percent~~25% in the form of a subordinated note from CRC. The subordinated note is a retained interest in the receivables sold. Depending on collection experience, additional equity infusions to CRC may be required by Duke Energy to maintain a minimum equity balance of $3 million.

CRC is considered a VIE because (i) equity capitalization is insufficient to support its operations, (ii) power to direct the activities that most significantly impact the economic performance of the entity are not performed by the equity holder and (iii) deficiencies in net worth of CRC are funded by Duke Energy. The most significant activities that impact the economic performance of CRC are decisions made to manage delinquent receivables. Duke Energy is considered the primary beneficiary and consolidates CRC as it makes these decisions. Neither Duke Energy Ohio nor Duke Energy Indiana consolidate CRC.



FINANCIAL STATEMENTS	VARIABLE INTEREST ENTITIES

Receivables Financing – Credit Facilities

The following table summarizes the amounts and expiration dates of the credit facilities and associated restricted receivables described above.



	Duke Energy
			Duke Energy		Duke Energy		Duke Energy
			Carolinas		Progress		Florida
(in millions)	CRC		DERF		DEPR		DEFR
Expiration date	December 2020		December 2020		February 2021		April 2021
Credit facility amount	$	350	$	475	$	325	$	250
Amounts borrowed at September 30, 2019	350		475		325		250
Amounts borrowed at December 31, 2018	325		450		300		225
Restricted Receivables at September 30, 2019	505		775		564		471
Restricted Receivables at December 31, 2018	564		699		547		357

Duke Energy
Duke Energy
Duke Energy
Duke Energy
Carolinas
Progress
Florida
(in millions) CRC
DERF
DEPR
DEFR
Expiration date December 2020
December 2020
February 2021
April 2021
Credit facility amount $ 325
$ 450
$ 300
$ 225
Amounts borrowed at September 30, 2018 325
450
300
225
Amounts borrowed at December 31, 2017 325
450
300
225
Restricted Receivables at September 30, 2018 504
795
635
456
Restricted Receivables at December 31, 2017 545
640
459
317

~~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)~~

Nuclear Asset-Recovery Bonds – DEFPF

~~Duke Energy Florida Project Finance, LLC (DEFPF)~~DEFPF is a bankruptcy remote, wholly owned special purpose subsidiary of Duke Energy Florida. DEFPF was formed in 2016 for the sole purpose of issuing nuclear asset-recovery bonds to finance Duke Energy Florida's unrecovered regulatory asset related to Crystal River Unit 3.

In June 2016, DEFPF issued senior secured bonds and used the proceeds to acquire nuclear asset-recovery property from Duke Energy Florida. The nuclear asset-recovery property acquired includes the right to impose, bill, collect and adjust a non-bypassable nuclear asset-recovery charge from all Duke Energy Florida retail customers until the bonds are paid in full and all financing costs have been recovered. The nuclear asset-recovery bonds are secured by the nuclear asset-recovery property, and cash collections from the nuclear asset-recovery charges are the sole source of funds to satisfy the debt obligation. The bondholders have no recourse to Duke Energy Florida.

DEFPF is considered a VIE primarily because the equity capitalization is insufficient to support its operations. Duke Energy Florida has the power to direct the significant activities of the VIE as described above, and therefore Duke Energy Florida is considered the primary beneficiary and consolidates DEFPF.

The following table summarizes the impact of DEFPF on Duke Energy Florida's Condensed Consolidated Balance Sheets.



(in millions)	September 30, 2019		December 31, 2018
Receivables of VIEs	$	7	$	5
Regulatory Assets: Current	52		52
Current Assets: Other	16		39
Other Noncurrent Assets: Regulatory assets	1,002		1,041
Current Liabilities: Other	2		10
Current maturities of long-term debt	54		53
Long-Term Debt	1,056		1,111

(in millions) September 30, 2018
December 31, 2017
Receivables of VIEs $ 7
$ 4
Regulatory Assets: Current 52
51
Current Assets: Other 14
40
Other Noncurrent Assets: Regulatory assets 1,055
1,091
Current Liabilities: Other 3
10
Current maturities of long-term debt 53
53
Long-Term Debt 1,111
1,164

Commercial Renewables

Certain of Duke Energy’s renewable energy facilities are VIEs due to Duke Energy issuing guarantees for debt service and operations and maintenance reserves in support of debt financings. Assets are restricted and cannot be pledged as collateral or sold to third parties without prior approval of debt holders. Additionally, Duke Energy has VIEs associated with tax equity arrangements entered into with third-party investors in order to finance the cost of solar energy systems eligible for tax credits. The activities that most significantly ~~impact~~impacted the economic performance of these renewable energy facilities were decisions associated with siting, negotiating PPAs ~~engineering, procurement~~ and ~~construction~~EPC agreements, and decisions associated with ongoing operations and maintenance-related activities. Duke Energy is considered the primary beneficiary and consolidates the entities as it is responsible for all of these decisions.

The table below presents material balances reported on Duke Energy's Condensed Consolidated Balance Sheets related to ~~renewables~~Commercial Renewables VIEs.



(in millions)	September 30, 2019			December 31, 2018
Current Assets: Other	$	172		$	123
Property, Plant and Equipment: Cost	5,160			4,007
Accumulated depreciation and amortization	(996		)	(698		)
Other Noncurrent Assets: Other	63			261
Current maturities of long-term debt	177			174
Long-Term Debt	1,604			1,587
Other Noncurrent Liabilities: Asset retirement obligations	125			106
Other Noncurrent Liabilities: Other	218			212

(in millions) September 30, 2018
December 31, 2017
Current Assets: Other $ 203
$ 174
Property, plant and equipment, cost 4,025
3,923
Accumulated depreciation and amortization (695 ) (591 )
Other Noncurrent Assets: Other 268
50
Current maturities of long-term debt 175
170
Long-Term Debt 1,604
1,700
Other Noncurrent Liabilities: Deferred income taxes —
(148 )
Other Noncurrent Liabilities: Other 225
241



FINANCIAL STATEMENTS	VARIABLE INTEREST ENTITIES

~~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)~~

NON-CONSOLIDATED VIEs

The following tables summarize the impact of non-consolidated VIEs on the Condensed Consolidated Balance Sheets.



	September 30, 2019
	Duke Energy										Duke		Duke
	Pipeline			Commercial		Other					Energy		Energy
(in millions)	Investments			Renewables		VIEs		Total			Ohio		Indiana
Receivables from affiliated companies	$	—		$	—	$	—	$	—		$	48	$	76
Investments in equity method unconsolidated affiliates	1,152			235		55		1,442			—		—
Total assets	$	1,152		$	235	$	55	$	1,442		$	48	$	76
Taxes accrued	(2		)	—		—		(2		)	—		—
Other current liabilities	—			—		3		3			—		—
Deferred income taxes	57			—		—		57			—		—
Other noncurrent liabilities	—			—		11		11			—		—
Total liabilities	$	55		$	—	$	14	$	69		$	—	$	—
Net assets	$	1,097		$	235	$	41	$	1,373		$	48	$	76


	September 30, 2018												December 31, 2018
	Duke Energy								Duke		Duke		Duke Energy										Duke		Duke
	Pipeline		Commercial		Other				Energy		Energy		Pipeline			Commercial		Other					Energy		Energy
(in millions)	Investments^(a)		Renewables		VIEs		Total		Ohio		Indiana		Investments			Renewables		VIEs		Total			Ohio		Indiana
Receivables from affiliated companies	$	—	$	—	$	—	$	—	$	56	$	94	$	—		$	—	$	—	$	—		$	93	$	118
Investments in equity method unconsolidated affiliates	729		190		47		966		—		—		822			190		48		1,060			—		—
Total assets	$	729	$	190	$	47	$	966	$	56	$	94	$	822		$	190	$	48	$	1,060		$	93	$	118
Taxes accrued													(1		)	—		—		(1		)	—		—
Other current liabilities	—		—		3		3		—		—		—			—		4		4			—		—
Deferred income taxes	14		—		—		14		—		—		21			—		—		21			—		—
Other noncurrent liabilities	—		—		11		11		—		—		—			—		12		12			—		—
Total liabilities	$	14	$	—	$	14	$	28	$	—	$	—	$	20		$	—	$	16	$	36		$	—	$	—
Net assets	$	715	$	190	$	33	$	938	$	56	$	94	$	802		$	190	$	32	$	1,024		$	93	$	118


~~(a)~~	~~See Pipeline Investments table below for further details regarding Investments in equity method unconsolidated affiliates.~~

December 31, 2017
Duke Energy Duke
Duke
Pipeline
Commercial
Other
Energy
Energy
(in millions) Investments
Renewables
VIEs
Total
Ohio
Indiana
Receivables from affiliated companies $ —
$ —
$ —
$ —
$ 87
$ 106
Investments in equity method unconsolidated affiliates 697
180
42
919
—
—
Other noncurrent assets 17
—
—
17
—
—
Total assets $ 714
$ 180
$ 42
$ 936
$ 87
$ 106
Taxes accrued (29 ) —
—
(29 ) —
—
Other current liabilities —
—
4
4
—
—
Deferred income taxes 42
—
—
42
—
—
Other noncurrent liabilities —
—
12
12
—
—
Total liabilities $ 13

$ —

$ 16

$ 29

$ —

$ —
Net assets $ 701
$ 180
$ 26
$ 907
$ 87
$ 106

The Duke Energy Registrants are not aware of any situations where the maximum exposure to loss significantly exceeds the carrying values shown above except for the ~~power purchase agreement~~PPA with OVEC, which is discussed below, and various guarantees, ~~some~~including Duke Energy's guarantee agreement to support its share of the ACP revolving credit facility. Duke Energy's maximum exposure to loss under the terms of the guarantee is $802 million, which ~~are reflected in~~represents 47% of the ~~table above~~outstanding borrowings under the credit facility as ~~Other noncurrent liabilities.~~of September 30, 2019. For more information on various guarantees, refer to Note 4.

Pipeline Investments

Duke Energy has investments in various joint ventures with pipeline projects currently under construction. These entities are considered VIEs due to having insufficient equity to finance their own activities without subordinated financial support. Duke Energy does not have the power to direct the activities that most significantly impact the economic performance, the obligation to absorb losses or the right to receive benefits of these VIEs and therefore does not consolidate these entities.

The table below presents Duke Energy's ownership interest and investment balances in these joint ventures.



			VIE Investment Amount (in millions)
	Ownership		September 30,		December 31,
Entity Name	Interest		2019		2018
ACP^(a)	47	%	$	1,127	$	797
Constitution	24	%	25		25
Total			$	1,152	$	822

VIE Investment Amount (in millions)
Ownership September 30, December 31,
Entity Name Interest 2018 2017
ACP 47 % $ 704
$ 397
Sabal Trail^(a)
7.5 % —
219
Constitution^(b)
24 % 25
81
Total $ 729
$ 697

(a)

AtDuke Energy evaluated this investment for impairment as of September 30, 2019, and December 31, 2017, Sabal Trail was considered a VIE due to having insufficient equity to finance their own activities without subordinated financial support. However, Sabal Trail is now a fully operational, well capitalized entity. As a result, Sabal Trail has sufficient equity to finance its own activities,2018, and determined that fair value approximated carrying value and therefore is no ~~longer considered a VIE. Duke Energy's investment in Sabal Trail~~impairment was ~~$112 million at September 30, 2018.~~necessary.

~~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)~~



~~(b)~~FINANCIAL STATEMENTS	During the nine months ended September 30, 2018, Duke Energy recorded an OTTI of $55 million related to Constitution within Equity in earnings of unconsolidated affiliates on Duke Energy's Condensed Consolidated Statements of Income. See Note 3 for additional information.VARIABLE INTEREST ENTITIES

In 2017, ACP executed a $3.4 billion revolving credit facility with a stated maturity date of October 2021. Duke Energy entered into a guarantee agreement to support its share of the ACP revolving credit facility. Duke Energy's maximum exposure to loss under the terms of the guarantee is $486 million, which represents 47 percent of the outstanding borrowings under the credit facility as of September 30, 2018.

~~PART I~~

Matters Impacting Future Electric Utilities and Infrastructure Results

On May ~~18, 2016,~~21, 2019, Duke Energy Carolinas and Duke Energy Progress received orders from the ~~North Carolina Department~~PSCSC granting the companies’ requests for retail rate increases but denying recovery of ~~Environmental Quality (NCDEQ) issued proposed risk classifications for all~~certain coal ash ~~surface impoundments in North Carolina. All ash impoundments not previously designated as high priority by~~costs. Duke Energy Carolinas and Duke Energy Progress intend to file notices of appeals with the ~~North~~South Carolina ~~Coal Ash Management Act~~Supreme Court within 30 days of ~~2014 (Coal Ash Act) were designated as intermediate risk. Certain impoundments classified as intermediate risk, however, may be reassessed in~~ the ~~future as low risk pursuant to legislation enacted~~order that was received on ~~July 14, 2016.~~October 18, 2019. Electric Utilities and Infrastructure's ~~estimated asset retirement obligations (AROs) related~~results of operations, financial position and cash flows could be adversely impacted if coal ash costs are not ultimately approved for recovery. See Note 3 to the Condensed Consolidated Financial Statements, "Regulatory Matters," for additional information.

On April 1, 2019, NCDEQ issued a closure ~~of North Carolina~~determination requiring Duke Energy Carolinas and Duke Energy Progress to excavate all remaining coal ash impoundments are based upon the mandated closure method or a probability weighting of potential closure methods for the impoundments that may be reassessed to low risk. On October 12, 2018, NCDEQ announced that Duke Energy had satisfied the permanent replacement water supply requirements by the October 15, 2018, deadline set out in the Coal Ash Management Act. However, NCDEQ has not yet issued final classifications for these impoundments. As the final risk ranking classifications in North Carolina, ~~are delineated,~~even though they had been deemed low risk by NCDEQ on November 14, 2018. On April 26, 2019, Duke Energy Carolinas and Duke Energy Progress filed a Petition for Contested Case Hearings in the Office of Administrative Hearings to challenge NCDEQ's April 1 Order. Duke Energy Carolinas and Duke Energy Progress intend to seek recovery of all costs through the ratemaking process consistent with previous proceedings. As the final closure plans and corrective action measures are developed and approved for each site, the closure work progresses and the closure method scope and remedial action methods are determined, the complexity of work and the amount of coal combustion material could be different than originally estimated and, therefore, could materially impact Electric Utilities and Infrastructure's results of operations, financial position and cash flows. See Note 4 to the Condensed Consolidated Financial Statements, "Commitments and Contingencies," for additional information.

Duke Energy is a party to multiple lawsuits and could be subject to fines and other penalties related to operations at certain North Carolina facilities with ash basins. In addition, the orders issued in the Duke Energy Carolinas and Duke Energy Progress North ~~Carolinas~~Carolina rate cases supporting recovery of past coal ash remediation costs have been appealed by various parties. The outcome of these appeals, lawsuits and potential fines and penalties could have an adverse impact on Electric Utilities and Infrastructure's results of operations, financial position and cash flows. See Notes 3 and 4 to the Condensed Consolidated Financial Statements, "Regulatory Matters" and “Commitments and Contingencies,” respectively, for additional information.

On June 22, 2018, Duke Energy Carolinas received an order from the NCUC, which denied the Grid Rider Stipulation and deferral treatment of grid improvement costs. Duke Energy Carolinas ~~may petition~~and Duke Energy Progress have petitioned for deferral of future grid modernization costs outside of a general rate case proceeding if it can show financial hardship or a stipulation that includes greater consensus among intervening parties on costs being classified as grid modernization. While Duke Energy Progress did not request recovery of theseimprovement costs in ~~its most recent case with the NCUC, Duke Energy Progress may request recovery of certain grid modernization costs in future regulatory proceedings.~~their 2019 rate cases. Electric Utilities and Infrastructure's results of operations, financial position and cash flows could be adversely impacted if grid ~~modernization~~improvement costs are not ultimately approved for recovery and/or deferral treatment. ~~See Note 3 to~~

During the ~~Condensed Consolidated Financial Statements, “Regulatory Matters,” for additional information.~~

~~On June 30, 2017, CertainTeed Gypsum NC, Inc. (CertainTeed) filed a declaratory judgment action against~~last half of 2018, Duke Energy Carolinas, Duke Energy Progress in the North Carolina Business Court relating to a gypsum supply agreement. In its complaint, CertainTeed sought an order from the court declaring that the minimum amount of gypsum Duke Energy Progress must provide to CertainTeed under the supply agreement is 50,000 tons per month through 2029. The trial for this matter concluded on July 16, 2018. On August 29, 2018, the court issued an order and opinion finding that Duke Energy Progress is required to supply 50,000 tons of gypsum per month, but that CertainTeed's sole remedy for Duke Energy Progress' long-term discontinuance under the agreement is liquidated damages. The estimated maximum amount that would be owed under the liquidated damages provision is approximately $90 million. Both CertainTeed and Duke Energy Progress have filed cross-appeals. The outcome of the cross-appeals could have an adverse impact on Electric Utilities and Infrastructure's results of operations, financial position and cash flows. See Note 4 to the Condensed Consolidated Financial Statements, “Commitments and Contingencies,” for additional information.

~~In the third quarter of 2018,~~Florida’s service territories were impacted by several named storms. Hurricane Florence, Hurricane Michael and Winter Storm Diego caused ~~historic~~ flooding, extensive damage and widespread power outages ~~within~~to the service territories of Duke Energy ~~Progress~~Carolinas and Duke Energy Carolinas service territories. Approximately 1.8 million customers were impacted. Current estimated restoration costs are approximately $540 million. Most of the operation and maintenance expenses are deferred as of September 30, 2018. Given the magnitude of the storm,Progress. Duke Energy Progress intends to request approval in North Carolina and South Carolina to defer the incremental costs incurred to a regulatory asset for recovery in the next base rate case. These requests are expected to be filed during the fourth quarter of 2018. An order from regulatory authorities disallowing the deferral and future recovery of storm restoration costs could have an adverse impact on Electric Utilities and Infrastructure’s financial position, results of operations and cash flows. See Note 3 to the Condensed Consolidated Financial Statements, "Regulatory Matters," for additional information.

~~On October 10, 2018,~~Florida’s service territory was also impacted by Hurricane Michael, ~~made landfall on Florida's Panhandle as~~ a Category 45 hurricane and the most powerful storm to hit the Florida Panhandle in recorded history. ~~The storm caused significant damage and more than a million power outages within the service territories of~~In September 2019, Hurricane Dorian impacted Duke Energy ~~Florida, Duke Energy Carolinas~~Progress and Duke Energy ~~Progress. Duke Energy has not completed~~Florida's service territories. A significant portion of the ~~final accumulation of total estimated storm restoration costs incurred; however, the preliminary estimate is approximately $235 million of~~incremental operation and maintenance expenses ~~and approximately $185 million in capital costs. Given the magnitude of the storm, Duke Energy Carolinas and Duke Energy Progress intend~~related to ~~request approval to defer the incremental costs incurred to a regulatory asset for recovery in the next base rate cases, and Duke Energy Florida will recover~~ these ~~storm costs consistent with the provisions in its 2017 Second Revised and Restated Settlement Agreement.~~storms has been deferred. An order from regulatory authorities disallowing the deferral and future recovery of storm restoration costs could have an adverse impact on Electric Utilities and Infrastructure's results of operations, financial position and cash flows. See Note 3 to the Condensed Consolidated Financial Statements, "Regulatory Matters," for additional information.

In 2019, Duke Energy ~~Florida is constructing~~Indiana filed a general rate case with the ~~1,640-MW combined-cycle natural gas plant in Citrus County, Florida,~~IURC, and expects it to be commercially available in 2018. Actual costs are expected to exceed estimated costs by an immaterial amount after recoveries; therefore, an impairment is not expected. Failure to completeDuke Energy Carolinas and Duke Energy Progress filed general rate cases with the ~~construction and achieve commercial operations by the end~~NCUC. The outcome of ~~2018 or failure to obtain recoveries from customers or vendors~~these rate cases could materially impact Electric Utilities and Infrastructure's results of operations, financial position and cash flows. See Note 3 to the Condensed Consolidated Financial Statements, ~~“Regulatory~~"Regulatory Matters,”" for additional information.

On February 6, 2018, the FPSC approved a stipulation that would apply tax savings resulting from the Tax Act toward storm costs effective January 2018 in lieu of implementing a storm surcharge. On May 31, 2018, Duke Energy Florida filed for recovery of the storm costs. Storm costs are currently expected to be fully recovered by approximately mid-2021. The commission has scheduled the hearing to begin on May 21, 2019. An order disallowing recovery of these costs could have an adverse impact on Electric Utilities and Infrastructure's results of operations, financial position and cash flows. See Note 3 to the Condensed Consolidated Financial Statements, “Regulatory Matters,” for additional information.

~~PART I~~

In March 2017, Duke Energy Ohio filed an electric distribution base rate application with the PUCO to address recovery of electric distribution system capital investments and any increase in expenditures subsequent to previous rate cases. On April 13, 2018, Duke Energy Ohio filed a Stipulation with the PUCO to resolve issues in the electric distribution base rate case and other regulatory matters. If approved by PUCO, the Stipulation would allow for Duke Energy Ohio to recover gains and losses incurred on and after January 1, 2018, related to the Ohio Valley Electric Corporation (OVEC), through the Price Stabilization Rider. Hearings concluded on August 6, 2018. Initial briefs were filed on September 11, 2018, and reply briefs on October 2, 2018. Electric Utilities and Infrastructure's results of operations, financial position and cash flows could be adversely impacted if the Stipulation is denied by the PUCO. See Note 3 to the Condensed Consolidated Financial Statements, “Regulatory Matters,” for additional information.

See "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations," in the Duke Energy Registrants' Annual Reports on Form ~~10-K/A~~10-K for the year ended December 31, ~~2017,~~2018, for discussion of risks associated with the Tax Act.



MD&A	SEGMENT RESULTS — GAS UTILITIES AND INFRASTRUCTURE

Gas Utilities and Infrastructure


	Three Months Ended September 30,								Nine Months Ended September 30,							Three Months Ended September 30,									Nine Months Ended September 30,
(in millions)	2018			2017		Variance			2018		2017		Variance			2019			2018			Variance			2019		2018		Variance
Operating Revenues	$	256		$	272	$	(16	)	$	1,301	$	1,243	$	58		$	249		$	256		$	(7	)	$	1,311	$	1,301	$	10
Operating Expenses
Cost of natural gas	58			68		(10		)	460		402		58			48			58			(10		)	451		460		(9		)
Operation, maintenance and other	101			94		7			312		293		19			108			101			7			325		312		13
Depreciation and amortization	61			57		4			182		171		11			64			61			3			192		182		10
Property and other taxes	24			25		(1		)	81		81		—			24			24			—			84		81		3
Total operating expenses	244			244		—			1,035		947		88			244			244			—			1,052		1,035		17
Operating Income	12			28		(16		)	266		296		(30		)	5			12			(7		)	259		266		(7		)
Other Income and Expenses, net	29			23		6			16		62		(46		)	42			29			13			119		16		103
Interest Expense	25			26		(1		)	78		78		—			29			25			4			86		78		8
Income Before Income Taxes	16			25		(9		)	204		280		(76		)	18			16			2			292		204		88
Income Tax (Benefit) Expense	(1		)	6		(7		)	43		101		(58		)	(8		)	(1		)	(7		)	—		43		(43		)
Segment Income	$	17		$	19	$	(2	)	$	161	$	179	$	(18	)	$	26		$	17		$	9		$	292	$	161	$	131

Piedmont local distribution company (LDC) throughput (dekatherms)	135,403,188			107,490,775		27,912,413			407,144,529		334,781,316		72,363,213
Piedmont LDC throughput (dekatherms)																121,378,484			135,403,188			(14,024,704		)	377,729,141		407,144,529		(29,415,388		)
Duke Energy Midwest LDC throughput (Mcf)	9,370,743			9,904,644		(533,901		)	62,111,858		52,940,410		9,171,448			9,997,444			9,370,743			626,701			62,278,623		62,111,858		166,765



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 Identification Number~~
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~~	56-0205520


	~~1-3274~~
1-15929	PROGRESS ENERGY, INC.	56-2155481


~~1-15929~~
1-1232	~~PROGRESS ENERGY, INC.~~ ~~(a North Carolina corporation)~~ ~~410 South Wilmington Street~~ ~~Raleigh, North Carolina 27601-1748~~ ~~704-382-3853~~ ~~56-2155481~~	~~1-1232~~	DUKE ENERGY OHIO, INC.	31-0240030


~~1-3382~~
1-3543	~~DUKE ENERGY PROGRESS, 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	35-0594457



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


Registrant	Title of each classTrading symbolswhich registered


Duke Energy	Common Stock, $0.001 par valueDUKNew York Stock Exchange LLC


Duke Energy	5.125% Junior Subordinated Debentures due DUKHNew York Stock Exchange LLC


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	~~712,877,558~~729,032,868



									Accumulated Other Comprehensive Income (Loss)
												Net Unrealized						Total
									Net Gains			(Losses) Gains						Duke Energy
	Common			Additional					(Losses) on			on Available-			Pension and			Corporation
	Stock	Common		Paid-in		Retained			Cash Flow			for-Sale-			OPEB			Stockholders'			Noncontrolling			Total
(in millions)	Shares	Stock		Capital		Earnings			Hedges			Securities			Adjustments			Equity			Interests			Equity
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
Common stock issuances, including dividend reinvestment and employee benefits	—	—		33		—			—			—			—			33			—			33
Common stock dividends	—	—		—		(1,825		)	—			—			—			(1,825		)	—			(1,825		)
Distributions to noncontrolling interest in subsidiaries	—	—		—		—			—			—			—			—			(2		)	(2		)
Other^(a)	—	—		—		21			—			—			—			21			—			21
Balance at September 30, 2017	700	$	1	$	38,774	$	2,936		$	(19	)	$	9		$	(70	)	$	41,631		$	11		$	41,642

Balance at December 31, 2017	700	$	1	$	38,792	$	3,013		$	(10	)	$	12		$	(69	)	$	41,739		$	(2	)	$	41,737
Net income (loss)	—	—		—		2,202			—			—			—			2,202			(12		)	2,190
Other comprehensive income (loss)	—	—		—		—			15			(5		)	3			13			—			13
Common stock issuances, including dividend reinvestment and employee benefits	13	—		955		—			—			—			—			955			—			955
Common stock dividends	—	—		—		(1,914		)	—			—			—			(1,914		)	—			(1,914		)
Distributions to noncontrolling interest in subsidiaries	—	—		—		—			—			—			—			—			(1		)	(1		)
Other^(b)	—	—		—		12			—			(12		)	—			—			33			33
Balance at September 30, 2018	713	$	1	$	39,747	$	3,313		$	5		$	(5	)	$	(66	)	$	42,995		$	18		$	43,013



	Three Months Ended September 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 June 30, 2018	$	—	712	$	1	$	39,682		$	2,894		$	2		$	(5	)	$	(67	)	$	42,507		$	8		$	42,515
Net income (loss)	—		—	—		—			1,082			—			—			—			1,082			(16		)	1,066
Other comprehensive income	—		—	—		—			—			3			—			1			4			—			4
Common stock issuances, including dividend reinvestment and employee benefits	—		1	—		65			—			—			—			—			65			—			65
Common stock dividends	—		—	—		—			(663		)	—			—			—			(663		)	—			(663		)
Other	—		—	—		—			—			—			—			—			—			26			26
Balance at September 30, 2018	$	—	713	$	1	$	39,747		$	3,313		$	5		$	(5	)	$	(66	)	$	42,995		$	18		$	43,013

Balance at June 30, 2019	$	973	728	$	1	$	40,885		$	3,502		$	(63	)	$	4		$	(89	)	$	45,213		$	119		$	45,332
Net income (loss)	—		—	—		—			1,327			—			—			—			1,327			(19		)	1,308
Other comprehensive (loss) income	—		—	—		—			—			(15		)	2			(2		)	(15		)	—			(15		)
Preferred stock, Series B, issuances, net of issuance costs^(c)	990		—	—		—			—			—			—			—			990			—			990
Common stock issuances, including dividend reinvestment and employee benefits	—		1	—		69			—			—			—			—			69			—			69
Common stock dividends	—		—	—		—			(690		)	—			—			—			(690		)	—			(690		)
Sale of noncontrolling interest^(d)	—		—	—		(465		)	—			10			—			—			(455		)	863			408
Contribution from noncontrolling interest in subsidiaries^(e)	—		—	—		—			—			—			—			—			—			7			7
Other	—		—	—		(1		)	—			—			—			—			(1		)	(1		)	(2		)
Balance at September 30, 2019	$	1,963	729	$	1	$	40,488		$	4,139		$	(68	)	$	6		$	(91	)	$	46,438		$	969		$	47,407



	Nine Months Ended September 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 (loss)	—		—	—		—			2,202			—			—			—			2,202			(12		)	2,190
Other comprehensive income (loss)	—		—	—		—			—			15			(5		)	3			13			—			13
Common stock issuances, including dividend reinvestment and employee benefits	—		13	—		955			—			—			—			—			955			—			955
Common stock dividends	—		—	—		—			(1,914		)	—			—			—			(1,914		)	—			(1,914		)
Distributions to noncontrolling interest in subsidiaries	—		—	—		—			—			—			—			—			—			(1		)	(1		)
Other^(a)	—		—	—		—			12			—			(12		)	—			—			33			33
Balance at September 30, 2018	$	—	713	$	1	$	39,747		$	3,313		$	5		$	(5	)	$	(66	)	$	42,995		$	18		$	43,013

Balance at December 31, 2018	$	—	727	$	1	$	40,795		$	3,113		$	(14	)	$	(3	)	$	(75	)	$	43,817		$	17		$	43,834
Net income (loss)	—		—	—		—			3,047			—			—			—			3,047			(110		)	2,937
Other comprehensive (loss) income	—		—	—		—			—			(58		)	10			1			(47		)	—			(47		)
Preferred stock, Series A, issuances, net of issuance costs^(b)	973		—	—		—			—			—			—			—			973			—			973
Preferred stock, Series B, issuances, net of issuance costs^(c)	990		—	—		—			—			—			—			—			990			—			990
Common stock issuances, including dividend reinvestment and employee benefits	—		2	—		158			—			—			—			—			158			—			158
Common stock dividends	—		—	—		—			(2,044		)	—			—			—			(2,044		)	—			(2,044		)
Sale of noncontrolling interest^(d)	—		—	—		(465		)	—			10			—			—			(455		)	863			408
Contributions from noncontrolling interest in subsidiaries^(e)	—		—	—		—			—			—			—			—			—			200			200
Distributions to noncontrolling interest in subsidiaries	—		—	—		—			—			—			—			—			—			(1		)	(1		)
Other^(f)	—		—	—		—			23			(6		)	(1		)	(17		)	(1		)	—			(1		)
Balance at September 30, 2019	$	1,963	729	$	1	$	40,488		$	4,139		$	(68	)	$	6		$	(91	)	$	46,438		$	969		$	47,407


(a)	~~Cumulative-effect adjustment due to implementation of a new accounting standard related to stock-based compensation and the associated income taxes.~~


~~(b)~~	Amounts in Retained Earnings and Accumulated Other Comprehensive ~~Loss~~(Loss) Income represent a cumulative-effect adjustment due to implementation of a new accounting standard related to Financial Instruments Classification and Measurement.


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


(c)	Duke Energy issued 1 million shares of preferred stock, series B, in the third quarter of 2019.


(d)	See Note 12 for ~~more information. Amount in Noncontrolling Interests relates~~additional discussion of the transaction.


(e)	Relates to tax equity financing activity in the Commercial Renewables segment. See Note 1 for additional discussion.


				Accumulated Other						Three Months Ended September 30, 2018 and 2019
				Comprehensive									Accumulated Other
				Loss									Comprehensive
				Net Losses on									Loss
	Member's			Cash Flow			Total			Member's			Net Income (Losses) on			Total
(in millions)	Equity			Hedges			Equity			Equity			Cash Flow Hedges			Equity
Balance at December 31, 2016	$	10,781		$	(9	)	$	10,772
Balance at June 30, 2018										$	11,308		$	(6	)	$	11,302
Net income	1,009			—			1,009			496			—			496
Other comprehensive income	—			1			1
Distributions to parent	(625		)	—			(625		)	(250		)	—			(250		)
Other	(1		)	—			(1		)
Balance at September 30, 2017	$	11,164		$	(8	)	$	11,156
Balance at September 30, 2018										$	11,554		$	(6	)	$	11,548

Balance at June 30, 2019										$	12,283		$	(7	)	$	12,276
Net income										590			—			590
Distributions to parent										(275		)	—			(275		)
Balance at September 30, 2019										$	12,598		$	(7	)	$	12,591

										Nine Months Ended September 30, 2018 and 2019
													Accumulated Other
													Comprehensive
													Loss
										Member's			Net Income (Losses) on			Total
(in millions)										Equity			Cash Flow Hedges			Equity
Balance at December 31, 2017	$	11,368		$	(7	)	$	11,361		$	11,368		$	(7	)	$	11,361
Net income	936			—			936			936			—			936
Other comprehensive income	—			1			1			—			1			1
Distributions to parent	(750		)	—			(750		)	(750		)	—			(750		)
Balance at September 30, 2018	$	11,554		$	(6	)	$	11,548		$	11,554		$	(6	)	$	11,548

Balance at December 31, 2018										$	11,689		$	(6	)	$	11,683
Net income										1,184			—			1,184
Distributions to parent										(275		)	—			(275		)
Other										—			(1		)	(1		)
Balance at September 30, 2019										$	12,598		$	(7	)	$	12,591


																								Three Months Ended September 30, 2018 and 2019
						Accumulated Other Comprehensive Income (Loss)																							Accumulated Other Comprehensive (Loss) Income
									Net Unrealized						Total Progress														Net Gains			Net Unrealized						Total Progress
	Additional					Net Losses on			Gains (losses) on			Pension and			Energy, Inc.									Additional					(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, 2016	$	8,094	$	3,764		$	(23	)	$	1		$	(16	)	$	11,820		$	(13	)	$	11,807
Balance at June 30, 2018																								$	9,143	$	4,855		$	(15	)	$	(1	)	$	(10	)	$	13,972		$	—		$	13,972
Net income	—		814			—			—			—			814			7			821			—		404			—			—			—			404			2			406
Other comprehensive income	—		—			4			3			5			12			—			12			—		—			2			—			—			2			—			2
Dividends to parent^(a)	—		(672		)	—			—			—			(672		)	—			(672		)
Equitization of certain notes payable to affiliates	1,047		—			—			—			—			1,047			—			1,047
Dividends to parent																								—		(250		)	—			—			—			(250		)	—			(250		)
Balance at September 30, 2018																								$	9,143	$	5,009		$	(13	)	$	(1	)	$	(10	)	$	14,128		$	2		$	14,130

Balance at June 30, 2019																								$	9,143	$	5,715		$	(13	)	$	—		$	(8	)	$	14,837		$	2		$	14,839
Net income																								—		521			—			—			—			521			—			521
Other comprehensive income																								—		—			1			1			—			2			—			2
Other	2		—			—			—			—			2			—			2			—		—			—			(1		)	1			—			1			1
Balance at September 30, 2017	$	9,143	$	3,906		$	(19	)	$	4		$	(11	)	$	13,023		$	(6	)	$	13,017
Balance at September 30, 2019																								$	9,143	$	6,236		$	(12	)	$	—		$	(7	)	$	15,360		$	3		$	15,363

																								Nine Months Ended September 30, 2018 and 2019
																													Accumulated Other Comprehensive (Loss) Income
																													Net Gains			Net Unrealized						Total Progress
																								Additional					(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		$	9,143	$	4,350		$	(18	)	$	5		$	(12	)	$	13,468		$	(3	)	$	13,465
Net income	—		904			—			—			—			904			6			910			—		904			—			—			—			904			6			910
Other comprehensive income (loss)	—		—			5			(1		)	2			6			—			6			—		—			5			(1		)	2			6			—			6
Distributions to noncontrolling interests	—		—			—			—			—			—			(1		)	(1		)	—		—			—			—			—			—			(1		)	(1		)
Dividends to parent	—		(250		)	—			—			—			(250		)	—			(250		)	—		(250		)	—			—			—			(250		)	—			(250		)
Other^(a)																								—		5			—			(5		)	—			—			—			—
Balance at September 30, 2018																								$	9,143	$	5,009		$	(13	)	$	(1	)	$	(10	)	$	14,128		$	2		$	14,130

Balance at December 31, 2018																								$	9,143	$	5,131		$	(12	)	$	(1	)	$	(7	)	$	14,254		$	3		$	14,257
Net income																								—		1,098			—			—			—			1,098			—			1,098
Other comprehensive income																								—		—			4			2			2			8			—			8
Other^(b)	—		5			—			(5		)	—			—			—			—			—		7			(4		)	(1		)	(2		)	—			—			—
Balance at September 30, 2018	$	9,143	$	5,009		$	(13	)	$	(1	)	$	(10	)	$	14,128		$	2		$	14,130
Balance at September 30, 2019																								$	9,143	$	6,236		$	(12	)	$	—		$	(7	)	$	15,360		$	3		$	15,363


(a)	~~Includes a $547 million non-cash dividend related to a legal entity restructuring.~~


				Three Months Ended
				September 30, 2018 and 2019
	Member's			Member's
(in millions)	Equity			Equity
Balance at December 31, 2016	$	7,358
Balance at June 30, 2018				$	8,265
Net income	547			216
Distributions to parent	(125		)	(175		)
Balance at September 30, 2017	$	7,780
Balance at September 30, 2018				$	8,306

Balance at June 30, 2019				$	8,813
Net income				278
Balance at September 30, 2019				$	9,091

				Nine Months Ended
				September 30, 2018 and 2019
				Member's
(in millions)				Equity
Balance at December 31, 2017	$	7,949		$	7,949
Net income	532			532
Distributions to parent	(175		)	(175		)
Balance at September 30, 2018	$	8,306		$	8,306

Balance at December 31, 2018				$	8,441
Net income				650
Balance at September 30, 2019				$	9,091


										Three Months Ended September 30, 2018 and 2019
				Accumulated									Accumulated
				Other									Other
				Comprehensive									Comprehensive
				Income (Loss)									Income (Loss)
				Net Unrealized									Net Unrealized
				Gains (Losses) on									Gains (Losses) on
	Member's			Available-for-Sale			Total			Member's			Available-for-Sale			Total
(in millions)	Equity			Securities			Equity			Equity			Securities			Equity
Balance at December 31, 2016	$	4,899		$	1		$	4,900
Balance at June 30, 2018										$	5,890		$	(2	)	$	5,888
Net income										243			—			243
Distributions to parent										(75		)	—			(75		)
Balance at September 30, 2018										$	6,058		$	(2	)	$	6,056

Balance at June 30, 2019										$	6,394		$	(1	)	$	6,393
Net income	368			—			368			289			—			289
Other comprehensive income	—			3			3			—			1			1
Other	3			—			3
Balance at September 30, 2017	$	5,270		$	4		$	5,274
Balance at September 30, 2019										$	6,683		$	—		$	6,683

										Nine Months Ended September 30, 2018 and 2019
													Accumulated
													Other
													Comprehensive
													Income (Loss)
													Net Unrealized
													Gains (Losses) on
										Member's			Available-for-Sale			Total
(in millions)										Equity			Securities			Equity
Balance at December 31, 2017	$	5,614		$	4		$	5,618		$	5,614		$	4		$	5,618
Net income	514			—			514			514			—			514
Other comprehensive loss	—			(1		)	(1		)	—			(1		)	(1		)
Distributions to parent	(75		)	—			(75		)	(75		)	—			(75		)
Other^(a)	5			(5		)	—			5			(5		)	—
Balance at September 30, 2018	$	6,058		$	(2	)	$	6,056		$	6,058		$	(2	)	$	6,056

Balance at December 31, 2018										$	6,097		$	(2	)	$	6,095
Net income										586			—			586
Other comprehensive income										—			2			2
Balance at September 30, 2019										$	6,683		$	—		$	6,683


(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. ~~See Note 1 for more information.~~


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



Practical Expedient	Description	~~Election~~
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.	~~Duke Energy plans to elect this practical expedient.~~
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.	~~Duke Energy plans to elect this practical expedient for all asset classes.~~
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.	~~Duke Energy is currently assessing the election of this practical expedient.~~
Hindsight expedient (when determining lease term)	Elect to use hindsight to determine the lease term.	~~Duke Energy plans to elect this practical expedient.~~
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.	~~Duke Energy plans to elect this practical expedient.~~
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 ~~ASC 842~~the new requirements to comparative periods, including disclosures.	~~Duke Energy plans to elect this practical expedient.~~
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).	~~Duke Energy is currently assessing the election of this practical expedient.~~



	Three Months Ended September 30, 2019
	Electric		Gas				Total
	Utilities and		Utilities and		Commercial		Reportable
(in millions)	Infrastructure		Infrastructure		Renewables		Segments		Other			Eliminations			Total
Unaffiliated revenues	$	6,569	$	225	$	138	$	6,932	$	8		$	—		$	6,940
Intersegment revenues	8		24		—		32		17			(49		)	—
Total revenues	$	6,577	$	249	$	138	$	6,964	$	25		$	(49	)	$	6,940
Segment income (loss)^(a)	$	1,385	$	26	$	40	$	1,451	$	(124	)	$	—		$	1,327
Add back noncontrolling interests^(b)															(19		)
Add back preferred stock dividend															15
Net income															$	1,323
Segment assets	$	133,296	$	13,424	$	5,278	$	151,998	$	3,734		$	185		$	155,917


	Three Months Ended September 30, 2018																		Three Months Ended September 30, 2018
	Electric		Gas					Total											Electric		Gas					Total
	Utilities and		Utilities and		Commercial			Reportable											Utilities and		Utilities and		Commercial			Reportable
(in millions)	Infrastructure		Infrastructure		Renewables			Segments		Other			Eliminations			Consolidated			Infrastructure		Infrastructure		Renewables			Segments		Other			Eliminations			Total
Unaffiliated revenues	$	6,253	$	232	$	127		$	6,612	$	16		$	—		$	6,628		$	6,253	$	232	$	127		$	6,612	$	16		$	—		$	6,628
Intersegment revenues	7		24		—			31		18			(49		)	—			7		24		—			31		18			(49		)	—
Total revenues	$	6,260	$	256	$	127		$	6,643	$	34		$	(49	)	$	6,628		$	6,260	$	256	$	127		$	6,643	$	34		$	(49	)	$	6,628
Segment income (loss)^(c)(e)	$	1,167	$	17	$	(62	)	$	1,122	$	(44	)	$	—		$	1,078		$	1,167	$	17	$	(62	)	$	1,122	$	(44	)	$	—		$	1,078
Add back noncontrolling interests																(16		)																(16		)
Income from discontinued operations, net of tax																4
Loss from discontinued operations, net of tax																																		4
Net income																$	1,066																	$	1,066
Segment assets	$	123,847	$	11,806	$	4,212		$	139,865	$	3,115		$	185		$	143,165