Duke Energy Carolinas 10Q 2023 Q3 Quarterly report

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)


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

For the quarterly period ended September 30, 2023


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

For the transition period from _________to_________


Commission File Number	Registrant, State of Incorporation or Organization, Address of Principal Executive Offices, Zip Code and Telephone Number	IRS Employer Identification No.

1-32853	DUKE ENERGY CORPORATION	20-2777218

(a Delaware corporation)

526 South Church Street

Charlotte, North Carolina 28202-1803

704-382-3853


1-4928			DUKE ENERGY CAROLINAS, LLC						56-0205520

(a North Carolina limited liability company)

526 South Church Street

Charlotte, North Carolina 28202-1803

704-382-3853


1-15929			PROGRESS ENERGY, INC.						56-2155481

(a North Carolina corporation)

410 South Wilmington Street

Raleigh, North Carolina 27601-1748

704-382-3853


1-3382			DUKE ENERGY PROGRESS, LLC						56-0165465

(a North Carolina limited liability company)

410 South Wilmington Street

Raleigh, North Carolina 27601-1748

704-382-3853


1-3274			DUKE ENERGY FLORIDA, LLC						59-0247770

(a Florida limited liability company)

299 First Avenue North

St. Petersburg, Florida 33701

704-382-3853


1-1232			DUKE ENERGY OHIO, INC.						31-0240030

(an Ohio corporation)

139 East Fourth Street

Cincinnati, Ohio 45202

704-382-3853


1-3543			DUKE ENERGY INDIANA, LLC						35-0594457

(an Indiana limited liability company)

1000 East Main Street

Plainfield, Indiana 46168

704-382-3853


1-6196			PIEDMONT NATURAL GAS COMPANY, INC.						56-0556998

(a North Carolina corporation)

4720 Piedmont Row Drive

Charlotte, North Carolina 28210

704-364-3120

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

Name of each exchange on

Registrant Title of each class Trading symbols which registered

Duke Energy Common Stock, $0.001 par value DUK New York Stock Exchange LLC

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

September 15, 2078

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

interest in a share of 5.75% Series A Cumulative

Redeemable Perpetual Preferred Stock, par value

$0.001 per share

Duke Energy 3.10% Senior Notes due 2028 DUK 28A New York Stock Exchange LLC

Duke Energy 3.85% Senior Notes due 2034 DUK 34 New York Stock Exchange LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Duke Energy Corporation (Duke Energy)

Yes

☒

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Duke Energy Florida, LLC (Duke Energy Florida)

Yes

☒

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Duke Energy Carolinas, LLC (Duke Energy Carolinas)

Yes

☒

☐

Duke Energy Ohio, Inc. (Duke Energy Ohio)

Yes

☒

☐

Progress Energy, Inc. (Progress Energy)

Yes

☒

☐

Duke Energy Indiana, LLC (Duke Energy Indiana)

Yes

☒

☐

Duke Energy Progress, LLC (Duke Energy Progress)

Yes

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☐

Piedmont Natural Gas Company, Inc. (Piedmont)

Yes

☒

☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Duke Energy

Yes

☒

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Duke Energy Florida

Yes

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Duke Energy Carolinas

Yes

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Duke Energy Ohio

Yes

☒

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Progress Energy

Yes

☒

☐

Duke Energy Indiana

Yes

☒

☐

Duke Energy Progress

Yes

☒

☐

Piedmont

Yes

☒

☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Duke Energy

Large Accelerated Filer

☒

Accelerated filer

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Non-accelerated Filer

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Smaller reporting company

☐

Emerging growth company

☐

Duke Energy Carolinas

Large Accelerated Filer

☐

Accelerated filer

☐

Non-accelerated Filer

☒

Smaller reporting company

☐

Emerging growth company

☐

Progress Energy

Large Accelerated Filer

☐

Accelerated filer

☐

Non-accelerated Filer

☒

Smaller reporting company

☐

Emerging growth company

☐

Duke Energy Progress

Large Accelerated Filer

☐

Accelerated filer

☐

Non-accelerated Filer

☒

Smaller reporting company

☐

Emerging growth company

☐

Duke Energy Florida

Large Accelerated Filer

☐

Accelerated filer

☐

Non-accelerated Filer

☒

Smaller reporting company

☐

Emerging growth company

☐

Duke Energy Ohio

Large Accelerated Filer

☐

Accelerated filer

☐

Non-accelerated Filer

☒

Smaller reporting company

☐

Emerging growth company

☐

Duke Energy Indiana

Large Accelerated Filer

☐

Accelerated filer

☐

Non-accelerated Filer

☒

Smaller reporting company

☐

Emerging growth company

☐

Piedmont

Large Accelerated Filer

☐

Accelerated filer

☐

Non-accelerated Filer

☒

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Duke Energy

Yes

☐

☒

Duke Energy Florida

Yes

☐

☒

Duke Energy Carolinas

Yes

☐

☒

Duke Energy Ohio

Yes

☐

☒

Progress Energy

Yes

☐

☒

Duke Energy Indiana

Yes

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Duke Energy Progress

Yes

☐

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Piedmont

Yes

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Number of shares of common stock outstanding at October 31, 2023:


Registrant	Description	Shares
Duke Energy	Common stock, $0.001 par value	770,711,728
Duke Energy Carolinas	All of the registrant's limited liability company member interests are directly owned by Duke Energy.	N/A
Progress Energy	All of the registrant's common stock is directly owned by Duke Energy.	100
Duke Energy Progress	All of the registrant's limited liability company member interests are indirectly owned by Duke Energy.	N/A
Duke Energy Florida	All of the registrant's limited liability company member interests are indirectly owned by Duke Energy.	N/A
Duke Energy Ohio	All of the registrant's common stock is indirectly owned by Duke Energy.	89,663,086
Duke Energy Indiana	All of the registrant's limited liability company member interests are owned by a Duke Energy subsidiary that is 80.1% indirectly owned by Duke Energy.	N/A
Piedmont	All of the registrant's common stock is directly owned by Duke Energy.	100

This combined Form 10-Q is filed separately by eight registrants: Duke Energy, Duke Energy Carolinas, Progress Energy, Duke Energy Progress, Duke Energy Florida, Duke Energy Ohio, Duke Energy Indiana and Piedmont (collectively the Duke Energy Registrants). Information contained herein relating to any individual registrant is filed by such registrant solely on its own behalf. Each registrant makes no representation as to information relating exclusively to the other registrants.

Duke Energy Carolinas, Progress Energy, Duke Energy Progress, Duke Energy Florida, Duke Energy Ohio, Duke Energy Indiana and Piedmont meet the conditions set forth in General Instructions H(1)(a) and (b) of Form 10-Q and are therefore filing this form with the reduced disclosure format specified in General Instructions H(2) of Form 10-Q.

TABLE OF CONTENTS


	Cautionary Statement Regarding Forward-Looking Information

PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements

	Duke Energy Corporation Financial Statements	9

	Duke Energy Carolinas, LLC Financial Statements	15

	Progress Energy, Inc. Financial Statements	19

	Duke Energy Progress, LLC Financial Statements	23

	Duke Energy Florida, LLC Financial Statements	27

	Duke Energy Ohio, Inc. Financial Statements	31

	Duke Energy Indiana, LLC Financial Statements	35

	Piedmont Natural Gas Company, Inc. Financial Statements	39

	Combined Notes to Condensed Consolidated Financial Statements
	Note 1 – Organization and Basis of Presentation	43
	Note 2 – Dispositions	45
	Note 3 – Business Segments	47
	Note 4 – Regulatory Matters	49
	Note 5 – Commitments and Contingencies	55

	Note 6 – Debt and Credit Facilities	57
	Note 7 – Asset Retirement Obligations	60
	Note 8 – Goodwill	61
	Note 9 – Related Party Transactions	62
	Note 10 – Derivatives and Hedging	63
	Note 11 – Investments in Debt and Equity Securities	69
	Note 12 – Fair Value Measurements	73
	Note 13 – Variable Interest Entities	78
	Note 14 – Revenue	81
	Note 15 – Stockholders' Equity	87
	Note 16 – Employee Benefit Plans	88
	Note 17 – Income Taxes	90
	Note 18 – Subsequent Events	90

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	91

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	109

Item 4.	Controls and Procedures	109

PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	110

Item 1A.	Risk Factors	110

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	110

Item 5.	Other Information	110

Item 6.	Exhibits	111

	Signatures	114


GLOSSARY OF TERMS

Glossary of Terms

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


Term or Acronym			Definition

2021 Settlement			Settlement Agreement in 2021 among Duke Energy Florida, the Florida Office of Public Counsel, the Florida Industrial Power Users Group, White Springs Agricultural Chemicals, Inc. d/b/a PSC Phosphate and NUCOR Steel Florida, Inc.

AFUDC			Allowance for funds used during construction

ArcLight			ArcLight Capital Partners, LLC

ARM			Annual Review Mechanism

ARO			Asset retirement obligations

Bison			Bison Insurance Company Limited

Brookfield			Brookfield Renewable Partners L.P.

CEP			Capital Expenditure Program

the Company			Duke Energy Corporation and its subsidiaries

Commercial Renewables Disposal Groups			Commercial Renewables business segment, excluding the offshore wind contract for Carolina Long Bay, separated into the utility-scale solar and wind group, the distributed generation group and the remaining assets

COVID-19			Coronavirus Disease 2019

CRC			Cinergy Receivables Company, LLC

Crystal River Unit 3			Crystal River Unit 3 Nuclear Plant

DEFR			Duke Energy Florida Receivables, LLC

DEPR			Duke Energy Progress Receivables, LLC

DERF			Duke Energy Receivables Finance Company, LLC

Duke Energy			Duke Energy Corporation (collectively with its subsidiaries)

Duke Energy Ohio			Duke Energy Ohio, Inc.

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

EDIT			Excess deferred income tax

EPA			United States Environmental Protection Agency

EPS			Earnings (Loss) Per Share

ERCOT			Electric Reliability Council of Texas

ETR			Effective tax rate

EU&I			Electric Utilities and Infrastructure

Exchange Act			Securities Exchange Act of 1934

FERC			Federal Energy Regulatory Commission

FPSC			Florida Public Service Commission

FTR			Financial transmission rights

GAAP			Generally accepted accounting principles in the U.S.

GAAP Reported Earnings			Net Income Available to Duke Energy Corporation Common Stockholders

GAAP Reported EPS			Basic Earnings Per Share Available to Duke Energy Corporation common stockholders

GIC			GIC Private Limited, Singapore's sovereign wealth fund and an experienced investor in U.S. infrastructure

GU&I			Gas Utilities and Infrastructure


GLOSSARY OF TERMS


GWh			Gigawatt-hours

HB 951			The Energy Solutions for North Carolina, or House Bill 951, passed in October 2021

IMR			Integrity Management Rider

IRA			Inflation Reduction Act

IRS			Internal Revenue Service

IURC			Indiana Utility Regulatory Commission

KPSC			Kentucky Public Service Commission

LLC			Limited Liability Company

MGP			Manufactured gas plant

MGP Settlement			Stipulation and Recommendation filed jointly by Duke Energy Ohio the staff of the PUCO, the Office of the Ohio Consumers' Counsel and the Ohio Energy Group on August 31, 2021

MW			Megawatt

MWh			Megawatt-hour

MYRP			Multiyear rate plan

NCUC			North Carolina Utilities Commission

NDTF			Nuclear decommissioning trust funds

NPNS			Normal purchase/normal sale

NYSE			The New York Stock Exchange

OCC			Ohio Consumers' Counsel

OPEB			Other Post-Retirement Benefit Obligations

the Parent			Duke Energy Corporation holding company

PBR			Performance-based regulation

Piedmont			Piedmont Natural Gas Company, Inc.

Progress Energy			Progress Energy, Inc.

PSCSC			Public Service Commission of South Carolina

PUCO			Public Utilities Commission of Ohio

RTO			Regional Transmission Organization

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

TPUC			Tennessee Public Utility Commission

U.S.			United States

VIE			Variable Interest Entity


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:

◦The ability to implement our business strategy, including our carbon emission reduction goals;

◦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, asset retirement and construction costs related to carbon emissions reductions, 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 nuclear facilities could prove to be more extensive than amounts estimated and all costs may not be fully recoverable through the regulatory process;

◦The impact of extraordinary external events, such as the pandemic health event resulting from COVID-19, and their collateral consequences, including the disruption of global supply chains or the economic activity in our service territories;

◦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, reduced customer usage due to cost pressures from inflation or fuel costs, and the economic health of our service territories or variations in customer usage patterns, including energy efficiency efforts, natural gas building and appliance electrification, 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, natural gas electrification, and distributed generation technologies, such as private solar and battery storage, in Duke Energy service territories could result in a reduced number of customers, 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;

◦Changing investor, customer and other stakeholder expectations and demands including heightened emphasis on environmental, social and governance concerns and costs related thereto;

◦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 United States electric grid or generating resources;

◦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 or other attack, war, vandalism, cybersecurity threats, data security breaches, operational events, 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, an individual utility’s generation mix, 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;


FORWARD-LOOKING STATEMENTS

◦Construction and development risks associated with the completion of the Duke Energy Registrants’ capital investment projects, including risks related to financing, timing and receipt of necessary regulatory approvals, 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;

◦The ability to obtain adequate insurance at acceptable costs;

◦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, as well as the successful sale of the Commercial Renewables Disposal Groups;

◦The effect of accounting and reporting pronouncements issued periodically by accounting standard-setting bodies and the SEC;

◦The impact of United States 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;

◦Asset or business acquisitions and dispositions may not yield the anticipated benefits; and

◦The actions of activist shareholders could disrupt our operations, impact our ability to execute on our business strategy, or cause fluctuations in the trading price of our common stock.

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 any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.


FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS

DUKE ENERGY CORPORATION

Condensed Consolidated Statements of Operations

(Unaudited)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in millions, except per share amounts)	2023		2022		2023		2022
Operating Revenues
Regulated electric	$	7,640	$	7,373	$	20,140	$	19,381
Regulated natural gas	284		397		1,497		1,824
Nonregulated electric and other	70		72		211		212
Total operating revenues	7,994		7,842		21,848		21,417
Operating Expenses
Fuel used in electric generation and purchased power	2,571		2,632		6,987		6,421
Cost of natural gas	57		189		434		859
Operation, maintenance and other	1,428		1,308		4,113		4,223
Depreciation and amortization	1,353		1,299		3,913		3,793
Property and other taxes	394		368		1,136		1,118
Impairment of assets and other charges	88		(4)		96		202
Total operating expenses	5,891		5,792		16,679		16,616
Gains on Sales of Other Assets and Other, net	8		6		46		17
Operating Income	2,111		2,056		5,215		4,818
Other Income and Expenses
Equity in earnings of unconsolidated affiliates	45		28		85		92
Other income and expenses, net	133		87		431		290
Total other income and expenses	178		115		516		382
Interest Expense	774		603		2,221		1,760
Income From Continuing Operations Before Income Taxes	1,515		1,568		3,510		3,440
Income Tax Expense From Continuing Operations	42		158		316		297
Income From Continuing Operations	1,473		1,410		3,194		3,143
(Loss) Income From Discontinued Operations, net of tax	(152)		3		(1,316)		(30)
Net Income	1,321		1,413		1,878		3,113
Add: Net (Income) Loss Attributable to Noncontrolling Interests	(69)		9		(42)		73
Net Income Attributable to Duke Energy Corporation	1,252		1,422		1,836		3,186
Less: Preferred Dividends	39		39		92		92
Net Income Available to Duke Energy Corporation Common Stockholders	$	1,213	$	1,383	$	1,744	$	3,094

Earnings Per Share – Basic and Diluted
Income from continuing operations available to Duke Energy Corporation common stockholders
Basic and Diluted	$	1.83	$	1.78	$	3.94	$	3.95

(Loss) Income from discontinued operations attributable to Duke Energy Corporation common stockholders
Basic and Diluted	$	(0.24)	$	0.03	$	(1.67)	$	0.08

Net income available to Duke Energy Corporation common stockholders
Basic and Diluted	$	1.59	$	1.81	$	2.27	$	4.03

Weighted Average Shares Outstanding
Basic and Diluted	771		770		771		770

See Notes to Condensed Consolidated Financial Statements


FINANCIAL STATEMENTS

DUKE ENERGY CORPORATION

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in millions)	2023		2022		2023		2022
Net Income	$	1,321	$	1,413	$	1,878	$	3,113
Other Comprehensive Income, net of tax(a)

Pension and OPEB adjustments	(1)		(7)		(1)		(3)
Net unrealized gains on cash flow hedges	200		14		206		276
Reclassification into earnings from cash flow hedges	24		—		28		9

Net unrealized gains (losses) on fair value hedges	15		(8)		30		(20)
Unrealized (losses) gains on available-for-sale securities	(6)		1		(2)		(20)

Other Comprehensive Income, net of tax	232		—		261		242
Comprehensive Income	1,553		1,413		2,139		3,355
Add: Comprehensive (Income) Loss Attributable to Noncontrolling Interests	(69)		4		(42)		56
Comprehensive Income Attributable to Duke Energy	1,484		1,417		2,097		3,411
Less: Preferred Dividends	39		39		92		92
Comprehensive Income Available to Duke Energy Corporation Common Stockholders	$	1,445	$	1,378	$	2,005	$	3,319

(a)Net of income tax expense of approximately $69 million for the three months ended September 30, 2023, and approximately $78 million and $72 million for the nine months ended September 30, 2023, and 2022, respectively. All other periods presented include immaterial income tax impacts.

See Notes to Condensed Consolidated Financial Statements


FINANCIAL STATEMENTS

DUKE ENERGY CORPORATION

Condensed Consolidated Balance Sheets

(Unaudited)


(in millions)	September 30, 2023		December 31, 2022
ASSETS
Current Assets
Cash and cash equivalents	$	324	$	409

Receivables (net of allowance for doubtful accounts of $49 at 2023 and $40 at 2022)	831		1,309
Receivables of VIEs (net of allowance for doubtful accounts of $154 at 2023 and $176 at 2022)	3,244		3,106
Inventory	4,118		3,584
Regulatory assets (includes $109 at 2023 and $106 at 2022 related to VIEs)	3,489		3,485
Assets held for sale	440		356
Other (includes $56 at 2023 and $116 at 2022 related to VIEs)	602		973
Total current assets	13,048		13,222
Property, Plant and Equipment
Cost	170,941		163,839
Accumulated depreciation and amortization	(54,994)		(52,100)
Facilities to be retired, net	—		9
Net property, plant and equipment	115,947		111,748
Other Noncurrent Assets
Goodwill	19,303		19,303
Regulatory assets (includes $1,668 at 2023 and $1,715 at 2022 related to VIEs)	13,745		14,645
Nuclear decommissioning trust funds	9,245		8,637
Operating lease right-of-use assets, net	1,073		1,042
Investments in equity method unconsolidated affiliates	505		455
Assets held for sale	4,596		5,634
Other (includes $43 at 2023 and $52 at 2022 related to VIEs)	3,698		3,400
Total other noncurrent assets	52,165		53,116
Total Assets	$	181,160	$	178,086
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable	$	3,539	$	4,754
Notes payable and commercial paper	3,154		3,952
Taxes accrued	991		722
Interest accrued	750		626
Current maturities of long-term debt (includes $428 at 2023 and $350 at 2022 related to VIEs)	4,034		3,878
Asset retirement obligations	620		773
Regulatory liabilities	1,396		1,466
Liabilities associated with assets held for sale	589		535
Other	2,087		2,167
Total current liabilities	17,160		18,873
Long-Term Debt (includes $3,025 at 2023 and $3,108 at 2022 related to VIEs)	71,353		65,873
Other Noncurrent Liabilities
Deferred income taxes	10,438		9,964
Asset retirement obligations	11,613		11,955
Regulatory liabilities	13,396		13,582
Operating lease liabilities	897		876
Accrued pension and other post-retirement benefit costs	662		832
Investment tax credits	856		849
Liabilities associated with assets held for sale	1,634		1,927
Other (includes $54 at 2023 related to VIEs)	1,325		1,502
Total other noncurrent liabilities	40,821		41,487
Commitments and Contingencies
Equity
Preferred stock, Series A, $0.001 par value, 40 million depositary shares authorized and outstanding at 2023 and 2022	973		973
Preferred stock, Series B, $0.001 par value, 1 million shares authorized and outstanding at 2023 and 2022	989		989
Common stock, $0.001 par value, 2 billion shares authorized; 771 million and 770 million shares outstanding at 2023 and 2022	1		1
Additional paid-in capital	44,886		44,862
Retained earnings	2,036		2,637
Accumulated other comprehensive loss	121		(140)
Total Duke Energy Corporation stockholders' equity	49,006		49,322
Noncontrolling interests	2,820		2,531
Total equity	51,826		51,853
Total Liabilities and Equity	$	181,160	$	178,086

See Notes to Condensed Consolidated Financial Statements


FINANCIAL STATEMENTS

DUKE ENERGY CORPORATION

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Nine Months Ended
	September 30,
(in millions)	2023		2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	1,878	$	3,113
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and accretion (including amortization of nuclear fuel)	4,538		4,414
Equity component of AFUDC	(146)		(151)
Gains on sales of other assets	(46)		(16)
Impairment of assets and other charges	1,699		202
Deferred income taxes	(29)		209
Equity in earnings of unconsolidated affiliates	(70)		(87)

Contributions to qualified pension plans	(100)		(58)
Payments for asset retirement obligations	(423)		(418)
Provision for rate refunds	(59)		(97)
(Increase) decrease in
Net realized and unrealized mark-to-market and hedging transactions	29		33
Receivables	481		(356)

Inventory	(531)		(290)
Other current assets	40		(2,403)
Increase (decrease) in
Accounts payable	(972)		504

Taxes accrued	277		206
Other current liabilities	(116)		263
Other assets	491		(68)
Other liabilities	368		188
Net cash provided by operating activities	7,309		5,188
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(9,310)		(8,148)
Contributions to equity method investments	(30)		(37)


Purchases of debt and equity securities	(2,811)		(3,619)
Proceeds from sales and maturities of debt and equity securities	2,848		3,691

Net proceeds from the sales of other assets	130		—


Other	(578)		(517)
Net cash used in investing activities	(9,751)		(8,630)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the:
Issuance of long-term debt	8,704		9,466



Payments for the redemption of long-term debt	(3,097)		(3,803)
Proceeds from the issuance of short-term debt with original maturities greater than 90 days	575		80
Payments for the redemption of short-term debt with original maturities greater than 90 days	(110)		(287)
Notes payable and commercial paper	(1,404)		476

Contributions from noncontrolling interests	278		132
Dividends paid	(2,438)		(2,389)

Other	(95)		(124)
Net cash provided by financing activities	2,413		3,551

Net (decrease) increase in cash, cash equivalents and restricted cash	(29)		109
Cash, cash equivalents and restricted cash at beginning of period	603		520
Cash, cash equivalents and restricted cash at end of period	$	574	$	629
Supplemental Disclosures:






Significant non-cash transactions:
Accrued capital expenditures	$	1,528	$	1,387

See Notes to Condensed Consolidated Financial Statements


FINANCIAL STATEMENTS

DUKE ENERGY CORPORATION

Condensed Consolidated Statements of Changes in Equity

(Unaudited)


	Three Months Ended September 30, 2022 and 2023
											Accumulated Other Comprehensive
											(Loss) Income
											Net		Net Unrealized				Total
											Gains		(Losses) Gains				Duke Energy
			Common				Additional				(Losses)		on Available-		Pension and		Corporation		Non-
	Preferred		Stock		Common		Paid-in		Retained		on		for-Sale-		OPEB		Stockholders'		controlling		Total
(in millions)	Stock		Shares		Stock		Capital		Earnings		Hedges(b)		Securities		Adjustments		Equity		Interests		Equity
Balance at June 30, 2022	$	1,962	770		$	1	$	44,373	$	3,457	$	15	$	(23)	$	(65)	$	49,720	$	1,864	$	51,584
Net income (loss)	—		—		—		—		1,383		—		—		—		1,383		(9)		1,374
Other comprehensive income (loss)	—		—		—		—		—		1		1		(7)		(5)		5		—


Common stock issuances, including dividend reinvestment and employee benefits	—		—		—		21		—		—		—		—		21		—		21

Common stock dividends	—		—		—		—		(776)		—		—		—		(776)		—		(776)


Contribution from noncontrolling interests, net of transaction costs(a)	—		—		—		—		—		—		—		—		—		6		6
Distributions to noncontrolling interest in subsidiaries	—		—		—		—		—		—		—		—		—		(42)		(42)
Other	—		—		—		3		(1)		—		—		—		2		—		2
Balance at September 30, 2022	$	1,962	$	770	$	1	$	44,397	$	4,063	$	16	$	(22)	$	(72)	$	50,345	$	1,824	$	52,169

Balance at June 30, 2023	$	1,962	771		$	1	$	44,866	$	1,615	$	(4)	$	(19)	$	(88)	$	48,333	$	2,738	$	51,071
Net income	—		—		—		—		1,213		—		—		—		1,213		69		1,282
Other comprehensive income (loss)	—		—		—		—		—		239		(6)		(1)		232		—		232

Common stock issuances, including dividend reinvestment and employee benefits	—		—		—		22		—		—		—		—		22		—		22

Common stock dividends	—		—		—		—		(793)		—		—		—		(793)		—		(793)

Contribution from noncontrolling interests, net of transaction costs(a)	—		—		—		—		—		—		—		—		—		30		30
Distributions to noncontrolling interest in subsidiaries	—		—		—		—		—		—		—		—		—		(20)		(20)
Other	—		—		—		(2)		1		—		—		—		(1)		3		2
Balance at September 30, 2023	$	1,962	$	771	$	1	$	44,886	$	2,036	$	235	$	(25)	$	(89)	$	49,006	$	2,820	$	51,826

See Notes to Condensed Consolidated Financial Statements


FINANCIAL STATEMENTS

DUKE ENERGY CORPORATION

Condensed Consolidated Statements of Changes in Equity

(Unaudited)


	Nine Months Ended September 30, 2022 and 2023
										Accumulated Other Comprehensive
										(Loss) Income
										Net		Net Unrealized				Total
										Gains		Gains (Losses)				Duke Energy
			Common			Additional				(Losses)		on Available-		Pension and		Corporation		Non-
	Preferred		Stock	Common		Paid-in		Retained		on		for-Sale-		OPEB		Stockholders'		controlling		Total
(in millions)	Stock		Shares	Stock		Capital		Earnings		Hedges(b)		Securities		Adjustments		Equity		Interests		Equity
Balance at December 31, 2021	$	1,962	769	$	1	$	44,371	$	3,265	$	(232)	$	(2)	$	(69)	$	49,296	$	1,840	$	51,136
Net income (loss)	—		—	—		—		3,094		—		—		—		3,094		(73)		3,021
Other comprehensive income (loss)	—		—	—		—		—		248		(20)		(3)		225		17		242


Common stock issuances, including dividend reinvestment and employee benefits	—		1	—		41		—		—		—		—		41		—		41

Common stock dividends	—		—	—		—		(2,297)		—		—		—		(2,297)		—		(2,297)

Sale of noncontrolling interest	—		—	—		(17)		—		—		—		—		(17)		38		21
Contributions from noncontrolling interests, net of transaction costs(a)	—		—	—		—		—		—		—		—		—		94		94
Distributions to noncontrolling interest in subsidiaries	—		—	—		—		—		—		—		—		—		(92)		(92)
Other	—		—	—		2		1		—		—		—		3		—		3
Balance at September 30, 2022	$	1,962	770	$	1	$	44,397	$	4,063	$	16	$	(22)	$	(72)	$	50,345	$	1,824	$	52,169

Balance at December 31, 2022	$	1,962	770	$	1	$	44,862	$	2,637	$	(29)	$	(23)	$	(88)	$	49,322	$	2,531	$	51,853
Net income	—		—	—		—		1,744		—		—		—		1,744		42		1,786
Other comprehensive income (loss)	—		—	—		—		—		264		(2)		(1)		261		—		261


Common stock issuances, including dividend reinvestment and employee benefits	—		1	—		43		—		—		—		—		43		—		43

Common stock dividends	—		—	—		—		(2,346)		—		—		—		(2,346)		—		(2,346)
Sale of noncontrolling interest	—		—	—		(13)		—		—		—		—		(13)		10		(3)
Contributions from noncontrolling interests, net of transaction costs(a)	—		—	—		—		—		—		—		—		—		278		278
Distributions to noncontrolling interest in subsidiaries	—		—	—		—		—		—		—		—		—		(45)		(45)
Other	—		—	—		(6)		1		—		—		—		(5)		4		(1)
Balance at September 30, 2023	$	1,962	771	$	1	$	44,886	$	2,036	$	235	$	(25)	$	(89)	$	49,006	$	2,820	$	51,826

(a)Relates primarily to tax equity financing activity in the Commercial Renewables Disposal Groups.

(b)See Duke Energy Condensed Consolidated Statements of Comprehensive Income for detailed activity related to Cash Flow and Fair Value hedges.

See Notes to Condensed Consolidated Financial Statements


FINANCIAL STATEMENTS

DUKE ENERGY CAROLINAS, LLC

Condensed Consolidated Statements of Operations and Comprehensive Income

(Unaudited)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in millions)	2023		2022		2023		2022
Operating Revenues	$	2,393	$	2,175	$	6,155	$	5,844
Operating Expenses
Fuel used in electric generation and purchased power	690		544		1,823		1,423
Operation, maintenance and other	424		436		1,285		1,410
Depreciation and amortization	407		375		1,186		1,138
Property and other taxes	90		88		276		258
Impairment of assets and other charges	64		6		70		(3)
Total operating expenses	1,675		1,449		4,640		4,226
Gains on Sales of Other Assets and Other, net	—		4		26		4
Operating Income	718		730		1,541		1,622
Other Income and Expenses, net	63		59		181		172
Interest Expense	172		131		504		415
Income Before Income Taxes	609		658		1,218		1,379
Income Tax Expense	30		34		97		87
Net Income and Comprehensive Income	$	579	$	624	$	1,121	$	1,292

See Notes to Condensed Consolidated Financial Statements


FINANCIAL STATEMENTS

DUKE ENERGY CAROLINAS, LLC

Condensed Consolidated Balance Sheets

(Unaudited)


(in millions)	September 30, 2023		December 31, 2022
ASSETS
Current Assets
Cash and cash equivalents	$	19	$	44
Receivables (net of allowance for doubtful accounts of $9 at 2023 and $3 at 2022)	279		338
Receivables of VIEs (net of allowance for doubtful accounts of $47 at 2023 and $65 at 2022)	1,028		928
Receivables from affiliated companies	165		390

Inventory	1,422		1,164
Regulatory assets (includes $12 at 2023 and 2022 related to VIEs)	1,447		1,095
Other (includes $5 at 2023 and $8 at 2022 related to VIEs)	86		216
Total current assets	4,446		4,175
Property, Plant and Equipment
Cost	56,888		54,650
Accumulated depreciation and amortization	(19,668)		(18,669)

Net property, plant and equipment	37,220		35,981
Other Noncurrent Assets
Regulatory assets (includes $199 at 2023 and $208 at 2022 related to VIEs)	4,020		4,293
Nuclear decommissioning trust funds	5,156		4,783
Operating lease right-of-use assets, net	75		78
Other	1,087		1,036
Total other noncurrent assets	10,338		10,190
Total Assets	$	52,004	$	50,346
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable	$	1,015	$	1,472
Accounts payable to affiliated companies	221		209
Notes payable to affiliated companies	331		1,233
Taxes accrued	350		228
Interest accrued	150		120
Current maturities of long-term debt (includes $11 at 2023 and $10 at 2022 related to VIEs)	19		1,018
Asset retirement obligations	238		261
Regulatory liabilities	532		530
Other	597		580
Total current liabilities	3,453		5,651
Long-Term Debt (includes $708 at 2023 and $689 at 2022 related to VIEs)	15,676		12,948
Long-Term Debt Payable to Affiliated Companies	300		300
Other Noncurrent Liabilities
Deferred income taxes	4,369		4,153
Asset retirement obligations	5,030		5,121
Regulatory liabilities	5,614		5,783
Operating lease liabilities	75		83
Accrued pension and other post-retirement benefit costs	60		38
Investment tax credits	302		300
Other	565		527
Total other noncurrent liabilities	16,015		16,005
Commitments and Contingencies
Equity
Member's equity	16,566		15,448
Accumulated other comprehensive loss	(6)		(6)
Total equity	16,560		15,442
Total Liabilities and Equity	$	52,004	$	50,346

See Notes to Condensed Consolidated Financial Statements


FINANCIAL STATEMENTS

DUKE ENERGY CAROLINAS, LLC

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Nine Months Ended
	September 30,
(in millions)	2023		2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	1,121	$	1,292
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization (including amortization of nuclear fuel)	1,380		1,335
Equity component of AFUDC	(69)		(75)
Gains on sales of other assets	(26)		—
Impairment of assets and other charges	70		(3)
Deferred income taxes	(7)		230


Contributions to qualified pension plans	(26)		(15)
Payments for asset retirement obligations	(145)		(137)
Provision for rate refunds	(35)		(55)
(Increase) decrease in

Receivables	(4)		(17)
Receivables from affiliated companies	225		(107)
Inventory	(257)		(86)
Other current assets	(439)		(1,139)
Increase (decrease) in
Accounts payable	(523)		104
Accounts payable to affiliated companies	12		(88)
Taxes accrued	121		(9)
Other current liabilities	(48)		279
Other assets	526		22
Other liabilities	105		(269)
Net cash provided by operating activities	1,981		1,262
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(2,646)		(2,313)


Purchases of debt and equity securities	(1,594)		(2,083)
Proceeds from sales and maturities of debt and equity securities	1,594		2,083
Net proceeds from the sales of other assets	30		—

Other	(215)		(185)
Net cash used in investing activities	(2,831)		(2,498)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt	2,764		1,352
Payments for the redemption of long-term debt	(1,040)		(389)
Notes payable to affiliated companies	(902)		358
Distributions to parent	—		(50)
Other	(1)		(1)
Net cash provided by financing activities	821		1,270
Net (decrease) increase in cash, cash equivalents and restricted cash	(29)		34
Cash, cash equivalents and restricted cash at beginning of period	53		8
Cash, cash equivalents and restricted cash at end of period	$	24	$	42
Supplemental Disclosures:
Significant non-cash transactions:
Accrued capital expenditures	$	534	$	460

See Notes to Condensed Consolidated Financial Statements


FINANCIAL STATEMENTS

DUKE ENERGY CAROLINAS, LLC

Condensed Consolidated Statements of Changes in Equity

(Unaudited)


	Three Months Ended September 30, 2022 and 2023
			Accumulated Other
			Comprehensive
			Loss
	Member's		Net Losses on		Total
(in millions)	Equity		Cash Flow Hedges		Equity
Balance at June 30, 2022	$	14,515	$	(6)	$	14,509
Net income	624		—		624



Balance at September 30, 2022	$	15,139	$	(6)	$	15,133

Balance at June 30, 2023	$	15,990	$	(6)	$	15,984
Net income	579		—		579


Other	(3)		—		(3)
Balance at September 30, 2023	$	16,566	$	(6)	$	16,560

	Nine Months Ended September 30, 2022 and 2023
			Accumulated Other
			Comprehensive
			Loss
	Member's		Net Losses on		Total
(in millions)	Equity		Cash Flow Hedges		Equity
Balance at December 31, 2021	$	13,897	$	(6)	$	13,891
Net income	1,292		—		1,292

Distributions to parent	(50)		—		(50)

Balance at September 30, 2022	$	15,139	$	(6)	$	15,133

Balance at December 31, 2022	$	15,448	$	(6)	$	15,442
Net income	1,121		—		1,121


Other	(3)		—		(3)
Balance at September 30, 2023	$	16,566	$	(6)	$	16,560

See Notes to Condensed Consolidated Financial Statements


FINANCIAL STATEMENTS

PROGRESS ENERGY, INC.

Condensed Consolidated Statements of Operations and Comprehensive Income

(Unaudited)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in millions)	2023		2022		2023		2022
Operating Revenues	$	4,055	$	3,881	$	10,315	$	10,087
Operating Expenses
Fuel used in electric generation and purchased power	1,535		1,605		3,902		3,927
Operation, maintenance and other	711		581		1,963		1,829
Depreciation and amortization	563		562		1,609		1,607
Property and other taxes	205		169		546		472
Impairment of assets and other charges	24		—		29		4
Total operating expenses	3,038		2,917		8,049		7,839
Gains on Sales of Other Assets and Other, net	8		3		20		6
Operating Income	1,025		967		2,286		2,254
Other Income and Expenses, net	49		45		146		150
Interest Expense	241		197		706		616
Income Before Income Taxes	833		815		1,726		1,788
Income Tax Expense	131		129		280		289


Net Income	702		686		1,446		1,499
Less: Net Income Attributable to Noncontrolling Interests	—		—		—		1
Net Income Attributable to Parent	$	702	$	686	$	1,446	$	1,498

Net Income	$	702	$	686	$	1,446	$	1,499
Other Comprehensive Income, net of tax

Net unrealized gains on cash flow hedges	—		—		—		1


Unrealized (losses) gains on available-for-sale securities	—		(1)		2		(4)

Other Comprehensive (Loss) Income, net of tax	—		(1)		2		(3)
Comprehensive Income	$	702	$	685	$	1,448	$	1,496
Less: Comprehensive Income Attributable to Noncontrolling Interests	—		—		—		1
Comprehensive Income Attributable to Parent	$	702	$	685	$	1,448	$	1,495

See Notes to Condensed Consolidated Financial Statements


FINANCIAL STATEMENTS

PROGRESS ENERGY, INC.

Condensed Consolidated Balance Sheets

(Unaudited)


(in millions)	September 30, 2023		December 31, 2022
ASSETS
Current Assets
Cash and cash equivalents	$	87	$	108
Receivables (net of allowance for doubtful accounts of $16 at 2023 and $13 at 2022)	212		318
Receivables of VIEs (net of allowance for doubtful accounts of $61 at 2023 and $68 at 2022)	1,597		1,289
Receivables from affiliated companies	20		22

Inventory	1,803		1,579
Regulatory assets (includes $97 at 2023 and $94 at 2022 related to VIEs)	1,696		1,833
Other (includes $42 at 2023 and $88 at 2022 related to VIEs)	164		342
Total current assets	5,579		5,491
Property, Plant and Equipment
Cost	67,872		64,822
Accumulated depreciation and amortization	(21,772)		(20,584)

Net property, plant and equipment	46,100		44,238
Other Noncurrent Assets
Goodwill	3,655		3,655
Regulatory assets (includes $1,469 at 2023 and $1,507 at 2022 related to VIEs)	6,448		7,146
Nuclear decommissioning trust funds	4,089		3,855
Operating lease right-of-use assets, net	631		628
Other	1,203		1,066
Total other noncurrent assets	16,026		16,350
Total Assets	$	67,705	$	66,079
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable	$	1,201	$	1,481
Accounts payable to affiliated companies	506		712
Notes payable to affiliated companies	983		843
Taxes accrued	492		135
Interest accrued	217		206
Current maturities of long-term debt (includes $417 at 2023 and $340 at 2022 related to VIEs)	1,265		697
Asset retirement obligations	261		289
Regulatory liabilities	515		576
Other	838		782
Total current liabilities	6,278		5,721
Long-Term Debt (includes $1,911 at 2023 and $2,003 at 2022 related to VIEs)	21,866		21,592
Long-Term Debt Payable to Affiliated Companies	150		150
Other Noncurrent Liabilities
Deferred income taxes	5,228		5,147
Asset retirement obligations	5,669		5,892
Regulatory liabilities	4,784		4,753
Operating lease liabilities	548		546
Accrued pension and other post-retirement benefit costs	270		292
Investment tax credits	363		358
Other (includes $30 at 2023 related to VIEs)	198		222
Total other noncurrent liabilities	17,060		17,210
Commitments and Contingencies
Equity
Common Stock, $0.01 par value, 100 shares authorized and outstanding at 2023 and 2022	—		—
Additional paid-in capital	11,830		11,832
Retained earnings	10,530		9,585
Accumulated other comprehensive loss	(9)		(11)


Total equity	22,351		21,406
Total Liabilities and Equity	$	67,705	$	66,079

See Notes to Condensed Consolidated Financial Statements


FINANCIAL STATEMENTS

PROGRESS ENERGY, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Nine Months Ended
	September 30,
(in millions)	2023		2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	1,446	$	1,499
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and accretion (including amortization of nuclear fuel)	2,021		1,826
Equity component of AFUDC	(49)		(50)

Impairment of assets and other charges	29		4
Deferred income taxes	(38)		284


Contributions to qualified pension plans	(22)		(13)
Payments for asset retirement obligations	(212)		(207)
Provision for rate refunds	(24)		(44)
(Increase) decrease in

Receivables	(198)		(314)
Receivables from affiliated companies	2		110
Inventory	(224)		(154)
Other current assets	399		(1,133)
Increase (decrease) in
Accounts payable	(177)		360
Accounts payable to affiliated companies	(206)		(31)
Taxes accrued	357		173
Other current liabilities	4		216
Other assets	183		(262)
Other liabilities	(10)		615
Net cash provided by operating activities	3,281		2,879
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(3,607)		(3,130)


Purchases of debt and equity securities	(1,108)		(1,301)
Proceeds from sales and maturities of debt and equity securities	1,151		1,357
Notes receivable from affiliated companies	—		(232)
Other	(239)		(88)
Net cash used in investing activities	(3,803)		(3,394)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt	1,272		1,452
Payments for the redemption of long-term debt	(440)		(1,136)
Notes payable to affiliated companies	140		509



Dividends to parent	(500)		(250)
Other	(1)		(36)
Net cash provided by financing activities	471		539
Net (decrease) increase in cash, cash equivalents and restricted cash	(51)		24
Cash, cash equivalents and restricted cash at beginning of period	184		113
Cash, cash equivalents and restricted cash at end of period	$	133	$	137
Supplemental Disclosures:






Significant non-cash transactions:
Accrued capital expenditures	$	558	$	472

See Notes to Condensed Consolidated Financial Statements


FINANCIAL STATEMENTS

PROGRESS ENERGY, INC.

Condensed Consolidated Statements of Changes in Equity

(Unaudited)


	Three Months Ended September 30, 2022 and 2023
					Accumulated Other Comprehensive Loss
					Net Gains		Net Unrealized				Total Progress
	Additional				on		Losses on		Pension and		Energy, Inc.
	Paid-in		Retained		Cash Flow		Available-for-		OPEB		Stockholders'		Noncontrolling		Total
(in millions)	Capital		Earnings		Hedges		Sale Securities		Adjustments		Equity		Interests		Equity
Balance at June 30, 2022	$	9,149	$	11,001	$	(1)	$	(5)	$	(7)	$	20,137	$	3	$	20,140
Net income	—		686		—		—		—		686		—		686
Other comprehensive loss	—		—		—		(1)		—		(1)		—		(1)
Distributions to noncontrolling interests	—		—		—		—		—		—		(33)		(33)

Equitization of certain notes payable to affiliates	475		—		—		—		—		475		—		475
Other	2		—		—		—		—		2		—		2
Balance at September 30, 2022	$	9,626	$	11,687	$	(1)	$	(6)	$	(7)	$	21,299	$	(30)	$	21,269

Balance at June 30, 2023	$	11,830	$	10,329	$	(1)	$	(6)	$	(2)	$	22,150	$	—	$	22,150
Net income	—		702		—		—		—		702		—		702


Dividends to parent	—		(500)		—		—		—		(500)		—		(500)

Other	—		(1)		—		—		—		(1)		—		(1)
Balance at September 30, 2023	$	11,830	$	10,530	$	(1)	$	(6)	$	(2)	$	22,351	$	—	$	22,351

	Nine Months Ended September 30, 2022 and 2023
					Accumulated Other Comprehensive Loss
					Net Gains		Net Unrealized				Total Progress
	Additional				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, 2021	$	9,149	$	8,007	$	(2)	$	(2)	$	(7)	$	17,145	$	3	$	17,148
Net income	—		1,498		—		—		—		1,498		1		1,499
Other comprehensive income (loss)	—		—		1		(4)		—		(3)		—		(3)

Distributions to noncontrolling interests	—		—		—		—		—		—		(34)		(34)
Dividends to parent	—		(250)		—		—		—		(250)		—		(250)
Equitization of certain notes payable to affiliates	475		2,431		—		—		—		2,906		—		2,906

Other	2		1		—		—		—		3		—		3
Balance at September 30, 2022	$	9,626	$	11,687	$	(1)	$	(6)	$	(7)	$	21,299	$	(30)	$	21,269

Balance at December 31, 2022	$	11,832	$	9,585	$	(1)	$	(8)	$	(2)	$	21,406	$	—	$	21,406
Net income	—		1,446		—		—		—		1,446		—		1,446
Other comprehensive income	—		—		—		2		—		2		—		2

Dividends to parent	—		(500)		—		—		—		(500)		—		(500)

Other	(2)		(1)		—		—		—		(3)		—		(3)
Balance at September 30, 2023	$	11,830	$	10,530	$	(1)	$	(6)	$	(2)	$	22,351	$	—	$	22,351

See Notes to Condensed Consolidated Financial Statements


FINANCIAL STATEMENTS

DUKE ENERGY PROGRESS, LLC

Condensed Consolidated Statements of Operations and Comprehensive Income

(Unaudited)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in millions)	2023		2022		2023		2022
Operating Revenues	$	1,886	$	1,969	$	4,844	$	5,182
Operating Expenses
Fuel used in electric generation and purchased power	651		749		1,685		1,916
Operation, maintenance and other	345		350		1,051		1,101
Depreciation and amortization	324		313		935		890
Property and other taxes	48		46		143		136
Impairment of assets and other charges	24		—		31		4
Total operating expenses	1,392		1,458		3,845		4,047
Gains on Sales of Other Assets and Other, net	1		1		2		2
Operating Income	495		512		1,001		1,137
Other Income and Expenses, net	31		29		92		83
Interest Expense	109		85		315		260
Income Before Income Taxes	417		456		778		960
Income Tax Expense	49		59		101		129
Net Income and Comprehensive Income	$	368	$	397	$	677	$	831

See Notes to Condensed Consolidated Financial Statements


FINANCIAL STATEMENTS

DUKE ENERGY PROGRESS, LLC

Condensed Consolidated Balance Sheets

(Unaudited)


(in millions)	September 30, 2023		December 31, 2022
ASSETS
Current Assets
Cash and cash equivalents	$	27	$	49
Receivables (net of allowance for doubtful accounts of $7 at 2023 and $4 at 2022)	129		167
Receivables of VIEs (net of allowance for doubtful accounts of $37 at 2023 and $40 at 2022)	831		793
Receivables from affiliated companies	32		25

Inventory	1,141		1,006
Regulatory assets (includes $39 at 2023 and 2022 related to VIEs)	946		690
Other (includes $18 at 2023 and $42 at 2022 related to VIEs)	49		174
Total current assets	3,155		2,904
Property, Plant and Equipment
Cost	40,283		38,875
Accumulated depreciation and amortization	(14,869)		(14,201)

Net property, plant and equipment	25,414		24,674
Other Noncurrent Assets
Regulatory assets (includes $653 at 2023 and $681 at 2022 related to VIEs)	4,406		4,724
Nuclear decommissioning trust funds	3,697		3,430
Operating lease right-of-use assets, net	329		370
Other	693		650
Total other noncurrent assets	9,125		9,174
Total Assets	$	37,694	$	36,752
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable	$	502	$	601
Accounts payable to affiliated companies	252		508
Notes payable to affiliated companies	691		238
Taxes accrued	255		77
Interest accrued	86		101
Current maturities of long-term debt (includes $34 at 2023 and 2022 related to VIEs)	71		369
Asset retirement obligations	260		288
Regulatory liabilities	290		332
Other	452		384
Total current liabilities	2,859		2,898
Long-Term Debt (includes $1,079 at 2023 and $1,114 at 2022 related to VIEs)	11,497		10,568
Long-Term Debt Payable to Affiliated Companies	150		150
Other Noncurrent Liabilities
Deferred income taxes	2,558		2,477
Asset retirement obligations	5,362		5,535
Regulatory liabilities	4,120		4,120
Operating lease liabilities	298		335
Accrued pension and other post-retirement benefit costs	150		160
Investment tax credits	130		124
Other (includes $19 at 2023 related to VIEs)	84		76
Total other noncurrent liabilities	12,702		12,827
Commitments and Contingencies
Equity
Member's Equity	10,486		10,309


Total Liabilities and Equity	$	37,694	$	36,752

See Notes to Condensed Consolidated Financial Statements


FINANCIAL STATEMENTS

DUKE ENERGY PROGRESS, LLC

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Nine Months Ended
	September 30,
(in millions)	2023		2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	677	$	831
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization (including amortization of nuclear fuel)	1,077		1,034
Equity component of AFUDC	(38)		(37)

Impairment of assets and other charges	31		4
Deferred income taxes	(12)		66


Contributions to qualified pension plans	(13)		(8)
Payments for asset retirement obligations	(166)		(133)
Provision for rate refunds	(24)		(44)
(Increase) decrease in

Receivables	5		(95)
Receivables from affiliated companies	(7)		64
Inventory	(135)		(58)
Other current assets	(189)		(266)
Increase (decrease) in
Accounts payable	(38)		7
Accounts payable to affiliated companies	(256)		58
Taxes accrued	178		(1)
Other current liabilities	(25)		122
Other assets	175		(105)
Other liabilities	23		39
Net cash provided by operating activities	1,263		1,478
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(1,756)		(1,506)


Purchases of debt and equity securities	(973)		(1,148)
Proceeds from sales and maturities of debt and equity securities	969		1,141
Notes receivable from affiliated companies	—		(329)
Other	(114)		(11)
Net cash used in investing activities	(1,874)		(1,853)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt	991		1,448

Payments for the redemption of long-term debt	(364)		(612)
Notes payable to affiliated companies	452		(172)

Distributions to parent	(500)		(250)
Other	(1)		(1)
Net cash provided by financing activities	578		413
Net (decrease) increase in cash, cash equivalents and restricted cash	(33)		38
Cash, cash equivalents and restricted cash at beginning of period	79		39
Cash, cash equivalents and restricted cash at end of period	$	46	$	77
Supplemental Disclosures:
Significant non-cash transactions:
Accrued capital expenditures	$	206	$	184

See Notes to Condensed Consolidated Financial Statements


FINANCIAL STATEMENTS

DUKE ENERGY PROGRESS, LLC

Condensed Consolidated Statements of Changes in Equity

(Unaudited)


	Three Months Ended
	September 30, 2022 and 2023

(in millions)	Member's Equity
Balance at June 30, 2022	$	9,735
Net income	397



Balance at September 30, 2022	$	10,132

Balance at June 30, 2023	$	10,618
Net income	368

Distributions to parent	(500)

Balance at September 30, 2023	$	10,486

	Nine Months Ended
	September 30, 2022 and 2023

(in millions)	Member's Equity
Balance at December 31, 2021	$	9,551
Net income	831
Distributions to parent	(250)


Balance at September 30, 2022	$	10,132

Balance at December 31, 2022	$	10,309
Net income	677


Distributions to parent	(500)

Balance at September 30, 2023	$	10,486

See Notes to Condensed Consolidated Financial Statements


FINANCIAL STATEMENTS

DUKE ENERGY FLORIDA, LLC

Condensed Consolidated Statements of Operations and Comprehensive Income

(Unaudited)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in millions)	2023		2022		2023		2022
Operating Revenues	$	2,164	$	1,907	$	5,456	$	4,890
Operating Expenses
Fuel used in electric generation and purchased power	885		856		2,218		2,011
Operation, maintenance and other	361		226		898		716
Depreciation and amortization	239		249		674		717
Property and other taxes	157		123		403		335
Impairment of assets and other charges	—		—		(1)		—
Total operating expenses	1,642		1,454		4,192		3,779
Gains on Sales of Other Assets and Other, net	—		3		1		5
Operating Income	522		456		1,265		1,116
Other Income and Expenses, net	19		19		56		74
Interest Expense	103		84		305		258
Income Before Income Taxes	438		391		1,016		932
Income Tax Expense	91		72		206		181
Net Income	$	347	$	319	$	810	$	751




Other Comprehensive (Loss) Gain, net of tax

Unrealized (losses) gains on available-for-sale securities	—		(1)		2		(3)





Comprehensive Income	$	347	$	318	$	812	$	748

See Notes to Condensed Consolidated Financial Statements


FINANCIAL STATEMENTS

DUKE ENERGY FLORIDA, LLC

Condensed Consolidated Balance Sheets

(Unaudited)


(in millions)	September 30, 2023		December 31, 2022
ASSETS
Current Assets
Cash and cash equivalents	$	41	$	45
Receivables (net of allowance for doubtful accounts of $10 at 2023 and $8 at 2022)	80		148
Receivables of VIEs (net of allowance for doubtful accounts of $24 at 2023 and $28 at 2022)	766		496
Receivables from affiliated companies	3		2

Inventory	662		573
Regulatory assets (includes $58 at 2023 and $55 at 2022 related to VIEs)	749		1,143
Other (includes $24 at 2023 and $46 at 2022 related to VIEs)	129		108
Total current assets	2,430		2,515
Property, Plant and Equipment
Cost	27,581		25,940
Accumulated depreciation and amortization	(6,896)		(6,377)
Net property, plant and equipment	20,685		19,563
Other Noncurrent Assets
Regulatory assets (includes $816 at 2023 and $826 at 2022 related to VIEs)	2,042		2,422
Nuclear decommissioning trust funds	393		424
Operating lease right-of-use assets, net	302		258
Other	463		372
Total other noncurrent assets	3,200		3,476
Total Assets	$	26,315	$	25,554
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable	$	698	$	880
Accounts payable to affiliated companies	154		177
Notes payable to affiliated companies	292		605
Taxes accrued	342		53
Interest accrued	104		80
Current maturities of long-term debt (includes $383 at 2023 and $306 at 2022 related to VIEs)	1,194		328
Asset retirement obligations	1		1
Regulatory liabilities	224		244
Other	349		363
Total current liabilities	3,358		2,731
Long-Term Debt (includes $832 at 2023 and $890 at 2022 related to VIEs)	8,726		9,381
Other Noncurrent Liabilities
Deferred income taxes	2,771		2,789
Asset retirement obligations	307		357
Regulatory liabilities	664		633
Operating lease liabilities	250		211
Accrued pension and other post-retirement benefit costs	100		111
Investment tax credits	233		234
Other (includes $11 at 2023 related to VIEs)	70		84
Total other noncurrent liabilities	4,395		4,419
Commitments and Contingencies
Equity
Member's equity	9,842		9,031
Accumulated other comprehensive loss	(6)		(8)
Total equity	9,836		9,023
Total Liabilities and Equity	$	26,315	$	25,554

See Notes to Condensed Consolidated Financial Statements


FINANCIAL STATEMENTS

DUKE ENERGY FLORIDA, LLC

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Nine Months Ended
	September 30,
(in millions)	2023		2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	810	$	751
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and accretion	943		790
Equity component of AFUDC	(10)		(13)

Impairment of assets and other charges	(1)		—
Deferred income taxes	(42)		237
Equity in (earnings) losses of unconsolidated affiliates	1		—

Contributions to qualified pension plans	(9)		(5)
Payments for asset retirement obligations	(46)		(73)

(Increase) decrease in

Receivables	(203)		(218)
Receivables from affiliated companies	(1)		10
Inventory	(89)		(95)
Other current assets	516		(814)
Increase (decrease) in
Accounts payable	(140)		354
Accounts payable to affiliated companies	(23)		(90)
Taxes accrued	289		123
Other current liabilities	23		72
Other assets	12		(162)
Other liabilities	(14)		37
Net cash provided by operating activities	2,016		904
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(1,851)		(1,624)


Purchases of debt and equity securities	(135)		(153)
Proceeds from sales and maturities of debt and equity securities	182		216

Other	(125)		(76)
Net cash used in investing activities	(1,929)		(1,637)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt	281		4
Payments for the redemption of long-term debt	(76)		(74)
Notes payable to affiliated companies	(313)		784

Other	(1)		(1)
Net cash (used in) provided by financing activities	(109)		713
Net decrease in cash, cash equivalents and restricted cash	(22)		(20)
Cash, cash equivalents and restricted cash at beginning of period	86		62
Cash, cash equivalents and restricted cash at end of period	$	64	$	42
Supplemental Disclosures:
Significant non-cash transactions:
Accrued capital expenditures	$	352	$	288

See Notes to Condensed Consolidated Financial Statements


FINANCIAL STATEMENTS

DUKE ENERGY FLORIDA, LLC

Condensed Consolidated Statements of Changes in Equity

(Unaudited)


	Three Months Ended September 30, 2022 and 2023
			Accumulated
			Other
			Comprehensive
			Loss
			Net Unrealized
			Losses on
	Member's		Available-for-Sale		Total
(in millions)	Equity		Securities		Equity
Balance at June 30, 2022	$	8,730	$	(5)	$	8,725
Net income	319		—		319
Other comprehensive loss	—		(1)		(1)





Balance at September 30, 2022	$	9,049	$	(6)	$	9,043

Balance at June 30, 2023	$	9,494	$	(6)	$	9,488
Net income	347		—		347

Other	1		—		1
Balance at September 30, 2023	$	9,842	$	(6)	$	9,836

	Nine Months Ended September 30, 2022 and 2023
			Accumulated
			Other
			Comprehensive
			Loss
			Net Unrealized
			Gains (Losses) on
	Member's		Available-for-Sale		Total
(in millions)	Equity		Securities		Equity
Balance at December 31, 2021	$	8,298	$	(3)	$	8,295
Net income	751		—		751
Other comprehensive loss	—		(3)		(3)





Balance at September 30, 2022	$	9,049	$	(6)	$	9,043

Balance at December 31, 2022	$	9,031	$	(8)	$	9,023
Net income	810		—		810
Other comprehensive income	—		2		2



Other	1		—		1
Balance at September 30, 2023	$	9,842	$	(6)	$	9,836

See Notes to Condensed Consolidated Financial Statements


FINANCIAL STATEMENTS

DUKE ENERGY OHIO, INC.

Condensed Consolidated Statements of Operations and Comprehensive Income

(Unaudited)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in millions)	2023		2022		2023		2022
Operating Revenues
Regulated electric	$	472	$	507	$	1,411	$	1,320
Regulated natural gas	105		121		464		491

Total operating revenues	577		628		1,875		1,811
Operating Expenses
Fuel used in electric generation and purchased power	145		185		485		439

Cost of natural gas	6		21		118		174
Operation, maintenance and other	114		121		358		408
Depreciation and amortization	90		84		266		247
Property and other taxes	94		79		258		272
Impairment of assets and other charges	—		(11)		—		(11)
Total operating expenses	449		479		1,485		1,529
Losses on Sales of Other Assets and Other, net	—		(1)		—		—
Operating Income	128		148		390		282
Other Income and Expenses, net	12		4		33		16
Interest Expense	46		32		125		92
Income Before Income Taxes	94		120		298		206
Income Tax Expense (Benefit)	14		17		47		(30)


Net Income and Comprehensive Income	$	80	$	103	$	251	$	236

See Notes to Condensed Consolidated Financial Statements


FINANCIAL STATEMENTS

DUKE ENERGY OHIO, INC.

Condensed Consolidated Balance Sheets

(Unaudited)


(in millions)	September 30, 2023		December 31, 2022
ASSETS
Current Assets
Cash and cash equivalents	$	20	$	16
Receivables (net of allowance for doubtful accounts of $8 at 2023 and $6 at 2022)	97		73
Receivables from affiliated companies	155		247

Inventory	168		144

Regulatory assets	48		103
Other	47		86
Total current assets	535		669
Property, Plant and Equipment
Cost	12,976		12,497
Accumulated depreciation and amortization	(3,385)		(3,250)

Net property, plant and equipment	9,591		9,247
Other Noncurrent Assets
Goodwill	920		920
Regulatory assets	655		581

Operating lease right-of-use assets, net	17		18

Other	76		71
Total other noncurrent assets	1,668		1,590
Total Assets	$	11,794	$	11,506
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable	$	322	$	380
Accounts payable to affiliated companies	71		72
Notes payable to affiliated companies	273		497
Taxes accrued	247		317
Interest accrued	51		29
Current maturities of long-term debt	175		475

Asset retirement obligations	8		17
Regulatory liabilities	46		99
Other	72		74
Total current liabilities	1,265		1,960
Long-Term Debt	3,492		2,745
Long-Term Debt Payable to Affiliated Companies	25		25
Other Noncurrent Liabilities
Deferred income taxes	1,169		1,136
Asset retirement obligations	130		137
Regulatory liabilities	498		534
Operating lease liabilities	17		17
Accrued pension and other post-retirement benefit costs	91		90

Other	90		96
Total other noncurrent liabilities	1,995		2,010
Commitments and Contingencies
Equity
Common Stock, $8.50 par value, 120 million shares authorized; 90 million shares outstanding at 2023 and 2022	762		762
Additional paid-in capital	3,100		3,100
Retained earnings	1,155		904

Total equity	5,017		4,766
Total Liabilities and Equity	$	11,794	$	11,506

See Notes to Condensed Consolidated Financial Statements


FINANCIAL STATEMENTS

DUKE ENERGY OHIO, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Nine Months Ended
	September 30,
(in millions)	2023		2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	251	$	236
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	269		251
Equity component of AFUDC	(7)		(7)

Impairment of assets and other charges	—		(11)
Deferred income taxes	7		(13)


Contributions to qualified pension plans	(5)		(3)
Payments for asset retirement obligations	(9)		(7)
Provision for rate refunds	—		5
(Increase) decrease in

Receivables	(23)		8
Receivables from affiliated companies	103		11
Inventory	(24)		(2)
Other current assets	103		(60)
Increase (decrease) in
Accounts payable	(69)		(6)
Accounts payable to affiliated companies	(1)		(4)
Taxes accrued	(70)		(44)
Other current liabilities	(29)		(76)
Other assets	(39)		(54)
Other liabilities	(8)		80
Net cash provided by operating activities	449		304
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(676)		(623)




Net proceeds from the sales of other assets	75		—
Notes receivable from affiliated companies	(11)		(85)
Other	(53)		(47)
Net cash used in investing activities	(665)		(755)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt	749		50
Payments for the redemption of long-term debt	(300)		—
Notes payable to affiliated companies	(224)		399

Other	(5)		(2)
Net cash provided by financing activities	220		447
Net increase (decrease) in cash and cash equivalents	4		(4)
Cash and cash equivalents at beginning of period	16		13
Cash and cash equivalents at end of period	$	20	$	9
Supplemental Disclosures:
Significant non-cash transactions:
Accrued capital expenditures	$	134	$	119

See Notes to Condensed Consolidated Financial Statements


FINANCIAL STATEMENTS

DUKE ENERGY OHIO, INC.

Condensed Consolidated Statements of Changes in Equity

(Unaudited)


	Three Months Ended September 30, 2022 and 2023
			Additional
	Common		Paid-in		Retained		Total
(in millions)	Stock		Capital		Earnings		Equity
Balance at June 30, 2022	$	762	$	3,100	$	735	$	4,597
Net income	—		—		103		103


Other	—		—		1		1
Balance at September 30, 2022	$	762	$	3,100	$	839	$	4,701

Balance at June 30, 2023	$	762	$	3,100	$	1,075	$	4,937
Net income	—		—		80		80



Balance at September 30, 2023	$	762	$	3,100	$	1,155	$	5,017

	Nine Months Ended September 30, 2022 and 2023
			Additional
	Common		Paid-in		Retained		Total
(in millions)	Stock		Capital		Earnings		Equity
Balance at December 31, 2021	$	762	$	3,100	$	602	$	4,464
Net income	—		—		236		236


Other	—		—		1		1
Balance at September 30, 2022	$	762	$	3,100	$	839	$	4,701

Balance at December 31, 2022	$	762	$	3,100	$	904	$	4,766
Net income	—		—		251		251



Balance at September 30, 2023	$	762	$	3,100	$	1,155	$	5,017

See Notes to Condensed Consolidated Financial Statements


FINANCIAL STATEMENTS

DUKE ENERGY INDIANA, LLC

Condensed Consolidated Statements of Operations and Comprehensive Income

(Unaudited)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in millions)	2023		2022		2023		2022
Operating Revenues	$	851	$	1,095	$	2,606	$	2,835
Operating Expenses
Fuel used in electric generation and purchased power	283		556		980		1,234
Operation, maintenance and other	160		177		524		551
Depreciation and amortization	173		167		500		478
Property and other taxes	17		13		42		60
Impairment of assets and other charges	—		—		—		211
Total operating expenses	633		913		2,046		2,534

Operating Income	218		182		560		301
Other Income and Expenses, net	30		9		58		27
Interest Expense	53		48		157		138
Income Before Income Taxes	195		143		461		190
Income Tax Expense	36		24		82		1
Net Income and Comprehensive Income	$	159	$	119	$	379	$	189

See Notes to Condensed Consolidated Financial Statements


FINANCIAL STATEMENTS

DUKE ENERGY INDIANA, LLC

Condensed Consolidated Balance Sheets

(Unaudited)


(in millions)	September 30, 2023		December 31, 2022
ASSETS
Current Assets
Cash and cash equivalents	$	14	$	31
Receivables (net of allowance for doubtful accounts of $5 at 2023 and $4 at 2022)	117		112
Receivables from affiliated companies	154		298

Inventory	600		489
Regulatory assets	93		249
Other	59		197
Total current assets	1,037		1,376
Property, Plant and Equipment
Cost	18,638		18,121
Accumulated depreciation and amortization	(6,359)		(6,021)

Net property, plant and equipment	12,279		12,100
Other Noncurrent Assets
Regulatory assets	899		875

Operating lease right-of-use assets, net	47		49
Other	323		254
Total other noncurrent assets	1,269		1,178
Total Assets	$	14,585	$	14,654
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable	$	277	$	391
Accounts payable to affiliated companies	111		206
Notes payable to affiliated companies	200		435
Taxes accrued	88		92
Interest accrued	74		48
Current maturities of long-term debt	3		303
Asset retirement obligations	114		207
Regulatory liabilities	205		187
Other	157		161
Total current liabilities	1,229		2,030
Long-Term Debt	4,351		3,854
Long-Term Debt Payable to Affiliated Companies	150		150
Other Noncurrent Liabilities
Deferred income taxes	1,352		1,299
Asset retirement obligations	728		744
Regulatory liabilities	1,478		1,454
Operating lease liabilities	45		47
Accrued pension and other post-retirement benefit costs	116		122
Investment tax credits	186		186
Other	14		65
Total other noncurrent liabilities	3,919		3,917
Commitments and Contingencies
Equity
Member's equity	4,935		4,702
Accumulated other comprehensive income	1		1
Total equity	4,936		4,703
Total Liabilities and Equity	$	14,585	$	14,654

See Notes to Condensed Consolidated Financial Statements


FINANCIAL STATEMENTS

DUKE ENERGY INDIANA, LLC

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Nine Months Ended
	September 30,
(in millions)	2023		2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	379	$	189
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and accretion	503		481
Equity component of AFUDC	(7)		(12)

Impairment of assets and other charges	—		211
Deferred income taxes	15		(26)


Contributions to qualified pension plans	(8)		(5)
Payments for asset retirement obligations	(57)		(67)

(Increase) decrease in

Receivables	(23)		(1)
Receivables from affiliated companies	(12)		17
Inventory	(112)		(34)
Other current assets	209		(181)
Increase (decrease) in
Accounts payable	(86)		44
Accounts payable to affiliated companies	(32)		(24)
Taxes accrued	(4)		5
Other current liabilities	107		18
Other assets	(62)		8
Other liabilities	26		9
Net cash provided by operating activities	836		632
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(699)		(643)


Purchases of debt and equity securities	(53)		(43)
Proceeds from sales and maturities of debt and equity securities	42		32
Notes receivable from affiliated companies	156		(32)
Other	(50)		(38)
Net cash used in investing activities	(604)		(724)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt	495		67
Payments for the redemption of long-term debt	(300)		(81)
Notes payable to affiliated companies	(234)		483
Distributions to parent	(209)		(350)
Other	(1)		(1)
Net cash (used in) provided by financing activities	(249)		118
Net (decrease) increase in cash and cash equivalents	(17)		26
Cash and cash equivalents at beginning of period	31		6
Cash and cash equivalents at end of period	$	14	$	32
Supplemental Disclosures:
Significant non-cash transactions:
Accrued capital expenditures	$	94	$	102

See Notes to Condensed Consolidated Financial Statements


FINANCIAL STATEMENTS

DUKE ENERGY INDIANA, LLC

Condensed Consolidated Statements of Changes in Equity

(Unaudited)


			Accumulated Other
			Comprehensive Income
	Member's		Pension and		Total
(in millions)	Equity		OPEB Adjustments		Equity
Balance at June 30, 2022	$	4,861	$	—	$	4,861
Net income	119		—		119


Other	(1)		—		(1)
Balance at September 30, 2022	$	4,979	$	—	$	4,979

Balance at June 30, 2023	$	4,826	$	1	$	4,827
Net income	159		—		159
Distributions to parent	(50)		—		(50)

Balance at September 30, 2023	$	4,935	$	1	$	4,936

			Accumulated Other
			Comprehensive Income
	Member's		Pension and		Total
(in millions)	Equity		OPEB Adjustments		Equity
Balance at December 31, 2021	$	5,015	$	—	$	5,015
Net income	189		—		189

Distributions to parent	(225)		—		(225)

Balance at September 30, 2022	$	4,979	$	—	$	4,979

Balance at December 31, 2022	$	4,702	$	1	$	4,703
Net income	379		—		379

Distributions to parent	(146)		—		(146)


Balance at September 30, 2023	$	4,935	$	1	$	4,936

See Notes to Condensed Consolidated Financial Statements


FINANCIAL STATEMENTS

PIEDMONT NATURAL GAS COMPANY, INC.

Condensed Consolidated Statements of Operations and Comprehensive Income

(Unaudited)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in millions)	2023		2022		2023		2022



Operating Revenues	$	208	$	306	$	1,119	$	1,421
Operating Expenses
Cost of natural gas	51		168		316		685
Operation, maintenance and other	77		87		248		270
Depreciation and amortization	59		56		175		166
Property and other taxes	16		13		46		44
Impairment of assets and other charges	—		1		(4)		1
Total operating expenses	203		325		781		1,166
Gains on Sales of Other Assets and Other, net	—		—		—		4
Operating Income (Loss)	5		(19)		338		259



Other Income and Expenses, net	17		13		49		41

Interest Expense	41		36		120		102
(Loss) Income Before Income Taxes	(19)		(42)		267		198
Income Tax (Benefit) Expense	(5)		(9)		46		18
Net (Loss) Income and Comprehensive (Loss) Income	$	(14)	$	(33)	$	221	$	180

See Notes to Condensed Consolidated Financial Statements


FINANCIAL STATEMENTS

PIEDMONT NATURAL GAS COMPANY, INC.

Condensed Consolidated Balance Sheets

(Unaudited)


(in millions)	September 30, 2023		December 31, 2022
ASSETS
Current Assets

Receivables (net of allowance for doubtful accounts of $10 at 2023 and $14 at 2022)	$	99	$	436
Receivables from affiliated companies	12		11

Inventory	88		172
Regulatory assets	120		119

Other	63		4
Total current assets	382		742
Property, Plant and Equipment
Cost	11,595		10,869
Accumulated depreciation and amortization	(2,230)		(2,081)
Facilities to be retired, net	—		9
Net property, plant and equipment	9,365		8,797
Other Noncurrent Assets
Goodwill	49		49
Regulatory assets	415		392
Operating lease right-of-use assets, net	3		4
Investments in equity method unconsolidated affiliates	78		79
Other	288		272
Total other noncurrent assets	833		796
Total Assets	$	10,580	$	10,335
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable	$	209	$	345
Accounts payable to affiliated companies	48		51

Notes payable to affiliated companies	297		514
Taxes accrued	44		74
Interest accrued	49		40
Current maturities of long-term debt	85		45
Regulatory liabilities	98		74
Other	66		81
Total current liabilities	896		1,224
Long-Term Debt	3,628		3,318

Other Noncurrent Liabilities
Deferred income taxes	948		870
Asset retirement obligations	28		26
Regulatory liabilities	993		1,024
Operating lease liabilities	10		13
Accrued pension and other post-retirement benefit costs	7		7

Other	176		180
Total other noncurrent liabilities	2,162		2,120
Commitments and Contingencies
Equity
Common stock, no par value: 100 shares authorized and outstanding at 2023 and 2022	1,635		1,635

Retained earnings	2,258		2,037

Total Piedmont Natural Gas Company, Inc. stockholder's equity	3,893		3,672
Noncontrolling interests	1		1
Total equity	3,894		3,673
Total Liabilities and Equity	$	10,580	$	10,335

See Notes to Condensed Consolidated Financial Statements


FINANCIAL STATEMENTS

PIEDMONT NATURAL GAS COMPANY, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Nine Months Ended
	September 30,
(in millions)	2023		2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	221	$	180
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	177		168
Equity component of AFUDC	(15)		(7)

Impairment of assets and other charges	(4)		1
Deferred income taxes	52		13
Equity in earnings from unconsolidated affiliates	(6)		(5)

Contributions to qualified pension plans	(3)		(2)

Provision for rate refunds	—		(3)
(Increase) decrease in

Receivables	335		198
Receivables from affiliated companies	(1)		1
Inventory	83		(26)
Other current assets	(63)		(91)
Increase (decrease) in
Accounts payable	(78)		24
Accounts payable to affiliated companies	(3)		(5)
Taxes accrued	(30)		(18)
Other current liabilities	25		23
Other assets	(23)		(8)
Other liabilities	7		(3)
Net cash provided by operating activities	674		440
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(774)		(598)
Contributions to equity method investments	—		(8)






Other	(32)		(17)
Net cash used in investing activities	(806)		(623)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt	348		394

Notes payable to affiliated companies	(216)		(210)




Other	—		(1)
Net cash provided by financing activities	132		183
Net increase in cash and cash equivalents	—		—
Cash and cash equivalents at beginning of period	—		—
Cash and cash equivalents at end of period	$	—	$	—
Supplemental Disclosures:


Significant non-cash transactions:
Accrued capital expenditures	$	149	$	163

See Notes to Condensed Consolidated Financial Statements


FINANCIAL STATEMENTS

PIEDMONT NATURAL GAS COMPANY, INC.

Condensed Consolidated Statements of Changes in Equity

(Unaudited)


	Three Months Ended September 30, 2022 and 2023
					Total
					Piedmont
					Natural Gas
	Common		Retained		Company, Inc.		Noncontrolling		Total
(in millions)	Stock		Earnings		Equity		Interests		Equity
Balance at June 30, 2022	$	1,635	$	1,927	$	3,562	$	—	$	3,562
Net loss	—		(33)		(33)		—		(33)




Balance at September 30, 2022	$	1,635	$	1,894	$	3,529	$	—	$	3,529

Balance at June 30, 2023	$	1,635	$	2,272	$	3,907	$	1	$	3,908
Net loss	—		(14)		(14)		—		(14)





Balance at September 30, 2023	$	1,635	$	2,258	$	3,893	$	1	$	3,894

	Nine Months Ended September 30, 2022 and 2023
					Total
					Piedmont
					Natural Gas
	Common		Retained		Company, Inc.		Noncontrolling		Total
(in millions)	Stock		Earnings		Equity		Interests		Equity
Balance at December 31, 2021	$	1,635	$	1,714	$	3,349	$	—	$	3,349
Net income	—		180		180		—		180







Balance at September 30, 2022	$	1,635	$	1,894	$	3,529	$	—	$	3,529

Balance at December 31, 2022	$	1,635	$	2,037	$	3,672	$	1	$	3,673
Net income	—		221		221		—		221




Balance at September 30, 2023	$	1,635	$	2,258	$	3,893	$	1	$	3,894

See Notes to Condensed Consolidated Financial Statements


FINANCIAL STATEMENTS			ORGANIZATION AND BASIS OF PRESENTATION

Index to Combined Notes to Condensed Consolidated Financial Statements

The unaudited notes to the Condensed Consolidated Financial Statements that follow are a combined presentation. The following list indicates the registrants to which the footnotes apply.

Applicable Notes

Registrant

Duke Energy

•

Duke Energy Carolinas

•

Progress Energy

•

Duke Energy Progress

•

Duke Energy Florida

•

Duke Energy Ohio

•

Duke Energy Indiana

•

Piedmont

•

Tables within the notes may not sum across due to (i) Progress Energy's consolidation of Duke Energy Progress, Duke Energy Florida and other subsidiaries that are not registrants and (ii) subsidiaries that are not registrants but included in the consolidated Duke Energy balances.

1. ORGANIZATION AND BASIS OF PRESENTATION

BASIS OF PRESENTATION

These Condensed Consolidated Financial Statements have been prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, these Condensed Consolidated Financial Statements do not include all information and notes required by GAAP for annual financial statements and should be read in conjunction with the Consolidated Financial Statements in the Duke Energy's Annual Report on Form 10-K for the year ended December 31, 2022.

The information in these combined notes relates to each of the Duke Energy Registrants as noted in the Index to Combined Notes to Condensed Consolidated Financial Statements. However, none of the registrants make any representations as to information related solely to Duke Energy or the subsidiaries of Duke Energy other than itself.

These Condensed Consolidated Financial Statements, in the opinion of the respective companies’ management, reflect all normal recurring adjustments necessary to fairly present the financial position and results of operations of each of the Duke Energy Registrants. Amounts reported in Duke Energy’s interim Condensed Consolidated Statements of Operations and each of the Subsidiary Registrants’ interim Condensed Consolidated Statements of Operations and Comprehensive Income are not necessarily indicative of amounts expected for the respective annual periods due to effects of seasonal temperature variations on energy consumption, regulatory rulings, timing of maintenance on electric generating units, changes in mark-to-market valuations, changing commodity prices and other factors.

In preparing financial statements that conform to GAAP, management must make estimates and assumptions that affect the reported amounts of assets and liabilities, the reported amounts of revenues and expenses and the disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates.

BASIS OF CONSOLIDATION

These Condensed Consolidated Financial Statements include, after eliminating intercompany transactions and balances, the accounts of the Duke Energy Registrants and subsidiaries or VIEs where the respective Duke Energy Registrants have control. See Note 13 for additional information on VIEs. These Condensed Consolidated Financial Statements also reflect the Duke Energy Registrants’ proportionate share of certain jointly owned generation and transmission facilities.

Discontinued Operations

Duke Energy has elected to present cash flows of discontinued operations combined with cash flows of continuing operations. Unless otherwise noted, the notes to these condensed consolidated financial statements exclude amounts related to discontinued operations for all periods presented. For the nine months ended September 30, 2023, and 2022, the Loss (Income) From Discontinued Operations, net of tax on Duke Energy's Condensed Consolidated Statements of Operations includes amounts related to noncontrolling interests. A portion of Noncontrolling interests on Duke Energy's Condensed Consolidated Balance Sheets relates to discontinued operations for the periods presented. See Note 2 for discussion of discontinued operations related to the Commercial Renewables Disposal Groups.

NONCONTROLLING INTEREST

Duke Energy maintains a controlling financial interest in certain less than wholly owned subsidiaries. As a result, Duke Energy consolidates these subsidiaries and presents the third-party investors' portion of Duke Energy's net income (loss), net assets and comprehensive income (loss) as noncontrolling interest. Noncontrolling interest is included as a component of equity on the Condensed Consolidated Balance Sheets. Operating agreements of Duke Energy's subsidiaries with noncontrolling interest allocate profit and loss based on their pro rata shares of the ownership interest in the respective subsidiary. Therefore, Duke Energy allocates net income or loss and other comprehensive income or loss of these subsidiaries to the owners based on their pro rata shares.


FINANCIAL STATEMENTS			ORGANIZATION AND BASIS OF PRESENTATION

CASH, CASH EQUIVALENTS AND RESTRICTED CASH

Duke Energy, Duke Energy Carolinas, Progress Energy, Duke Energy Progress and Duke Energy Florida have restricted cash balances related primarily to collateral assets, escrow deposits and VIEs. See Notes 11 and 13 for additional information. Restricted cash amounts are included in Other within Current Assets and Other Noncurrent Assets on the Condensed Consolidated Balance Sheets. The following table presents the components of cash, cash equivalents and restricted cash included in the Condensed Consolidated Balance Sheets.


	September 30, 2023										December 31, 2022
			Duke				Duke		Duke				Duke				Duke		Duke
	Duke		Energy		Progress		Energy		Energy		Duke		Energy		Progress		Energy		Energy
	Energy		Carolinas		Energy		Progress		Florida		Energy(a)		Carolinas		Energy		Progress		Florida
Current Assets
Cash and cash equivalents	$	324	$	19	$	87	$	27	$	41	$	409	$	44	$	108	$	49	$	45
Other	49		4		44		17		23		82		8		74		28		41
Other Noncurrent Assets
Other	9		1		2		2		—		11		1		2		2		—
Total cash, cash equivalents and restricted cash	$	382	$	24	$	133	$	46	$	64	$	502	$	53	$	184	$	79	$	86

(a) Certain prior year balances have been adjusted for held for sale presentation. See Note 2 for additional information.

INVENTORY

Provisions for inventory write-offs were not material at September 30, 2023, and December 31, 2022. The components of inventory are presented in the tables below.


	September 30, 2023
			Duke				Duke		Duke		Duke		Duke
	Duke		Energy		Progress		Energy		Energy		Energy		Energy
(in millions)	Energy		Carolinas		Energy		Progress		Florida		Ohio		Indiana		Piedmont
Materials and supplies	$	3,018	$	1,045	$	1,408	$	920	$	488	$	132	$	381	$	15
Coal	758		330		187		110		77		24		217		—
Natural gas, oil and other fuel	342		47		208		111		97		12		2		73
Total inventory	$	4,118	$	1,422	$	1,803	$	1,141	$	662	$	168	$	600	$	88


	December 31, 2022
			Duke				Duke		Duke		Duke		Duke
	Duke		Energy		Progress		Energy		Energy		Energy		Energy
(in millions)	Energy		Carolinas		Energy		Progress		Florida		Ohio		Indiana		Piedmont
Materials and supplies	$	2,604	$	876	$	1,232	$	819	$	413	$	105	$	342	$	12
Coal	620		253		190		99		91		34		144		—
Natural gas, oil and other fuel	360		35		157		88		69		5		3		160
Total inventory	$	3,584	$	1,164	$	1,579	$	1,006	$	573	$	144	$	489	$	172

OTHER NONCURRENT ASSETS

Duke Energy, through a nonregulated subsidiary, was the winner of the Carolina Long Bay offshore wind auction in May 2022 and recorded an asset of $150 million related to the arrangement in Other within Other noncurrent assets. In November 2022, Duke Energy committed to a plan to sell the Commercial Renewables business segment, excluding the offshore wind contract for Carolina Long Bay, which was moved to the Electric Utilities and Infrastructure (EU&I) segment. See Notes 2 and 3 for further information.

ACCOUNTS PAYABLE

Duke Energy maintains a supply chain finance program (the “program”) with a global financial institution. The program is voluntary and allows Duke Energy suppliers, at their sole discretion, to sell their receivables from Duke Energy to the financial institution at a rate that leverages Duke Energy’s credit rating and which may result in favorable terms compared to the rate available to the supplier on their own credit rating. Suppliers participating in the program determine at their sole discretion which invoices they will sell to the financial institution. Duke Energy confirms invoices sold by suppliers under the program to the financial institution and pays the financial institution based on commercial terms negotiated between Duke Energy and the supplier regardless of program participation. Suppliers’ decisions on which invoices are sold do not impact Duke Energy’s payment terms. The commercial terms negotiated between Duke Energy and its suppliers are consistent regardless of whether the supplier elects to participate in the program. Duke Energy does not issue any guarantees with respect to the program and does not participate in negotiations between suppliers and the financial institution. Duke Energy does not have an economic interest in the supplier’s decision to participate in the program and receives no interest, fees or other benefit from the financial institution based on supplier participation in the program.


FINANCIAL STATEMENTS			ORGANIZATION AND BASIS OF PRESENTATION

The following table represents the changes in confirmed obligations outstanding for the three and nine months ended September 30, 2023, and 2022.


	Three months ended September 30, 2022 and 2023
			Duke				Duke		Duke		Duke		Duke
	Duke		Energy		Progress		Energy		Energy		Energy		Energy
(in millions)	Energy		Carolinas		Energy		Progress		Florida		Ohio		Indiana		Piedmont
Confirmed obligations outstanding at the June 30, 2022	$	46	$	9	$	11	$	3	$	8	$	9	$	—	$	17
Invoices confirmed during the period	86		6		21		7		14		12		—		47
Confirmed invoices paid during the period	(58)		(12)		(15)		(5)		(10)		(9)		—		(22)
Confirmed obligations outstanding at September 30, 2022	$	74	$	3	$	17	$	5	$	12	$	12	$	—	$	42

Confirmed obligations outstanding at the June 30, 2023	$	40	$	5	$	14	$	12	$	2	$	2	$	—	$	19
Invoices confirmed during the period	47		2		11		2		9		4		—		30
Confirmed invoices paid during the period	(18)		(4)		(8)		(3)		(5)		—		—		(6)
Confirmed obligations outstanding at September 30, 2023	$	69	$	3	$	17	$	11	$	6	$	6	$	—	$	43

	Nine months ended September 30, 2022 and 2023
			Duke				Duke		Duke		Duke		Duke
	Duke		Energy		Progress		Energy		Energy		Energy		Energy
(in millions)	Energy		Carolinas		Energy		Progress		Florida		Ohio		Indiana		Piedmont
Confirmed obligations outstanding at the December 31, 2021	$	19	$	—	$	9	$	—	$	9	$	6	$	—	$	4
Invoices confirmed during the period	181		20		52		17		35		27		1		81
Confirmed invoices paid during the period	(126)		(17)		(44)		(12)		(32)		(21)		(1)		(43)
Confirmed obligations outstanding at September 30, 2022	$	74	$	3	$	17	$	5	$	12	$	12	$	—	$	42

Confirmed obligations outstanding at the December 31, 2022	$	87	$	6	$	19	$	8	$	11	$	5	$	—	$	57
Invoices confirmed during the period	161		22		53		25		28		7		—		79
Confirmed invoices paid during the period	(179)		(25)		(55)		(22)		(33)		(6)		—		(93)
Confirmed obligations outstanding at September 30, 2023	$	69	$	3	$	17	$	11	$	6	$	6	$	—	$	43

NEW ACCOUNTING STANDARDS

No new accounting standards were adopted by the Duke Energy Registrants in 2023.

2. DISPOSITIONS

Sale of Commercial Renewables Segment

In August 2022, Duke Energy announced a strategic review of its commercial renewables business. Since 2007, Duke Energy has built a portfolio of commercial wind, solar and battery projects across the U.S., and established a development pipeline. Duke Energy has developed a strategy to focus on renewables, grid and other investment opportunities within its regulated operations. In November 2022, Duke Energy committed to a plan to sell the Commercial Renewables business segment, excluding the offshore wind contract for Carolina Long Bay, which was moved to the EU&I segment. In June 2023, Duke Energy announced that it had entered into a purchase and sale agreement with affiliates of Brookfield for the sale of the utility-scale solar and wind group. Duke Energy closed on this transaction on October 25, 2023, for proceeds of $1.1 billion, with approximately half of the proceeds received at closing and the remainder due 18 months after closing. In July 2023, Duke Energy announced that it had entered into a purchase and sale agreement with affiliates of ArcLight for the distributed generation group. Duke Energy closed on this transaction on October 4, 2023, and received proceeds of $243 million. In March 2023, assets for certain projects were removed from the utility-scale solar and wind group and placed in a separate disposal group. The disposal process for the remaining assets is expected to be completed by early 2024, with net proceeds from the dispositions not anticipated to be material.

Assets Held For Sale and Discontinued Operations

The utility-scale solar and wind group, the distributed generation group and the remaining assets (collectively, Commercial Renewables Disposal Groups) were classified as held for sale and as discontinued operations in the fourth quarter of 2022. Originally debt and the related restricted cash and interest rate swaps were not expected to transfer to a buyer but during the marketing process it was determined they would be included with the sale and were classified as held for sale in March 2023. As a result, adjustments were made to the December 31, 2022, Consolidated Balance Sheet to present debt and the related restricted cash and interest rate swaps as held for sale. No adjustments were made to the historical activity within the Consolidated Statements of Comprehensive Income, Consolidated Statements of Cash Flows or the Consolidated Statements of Changes in Equity. Unless otherwise noted, the notes to these consolidated financial statements exclude amounts related to discontinued operations for all periods presented.

No interest from corporate level debt was allocated to discontinued operations.


FINANCIAL STATEMENTS			DISPOSITIONS

The following table presents the carrying values of the major classes of Assets held for sale and Liabilities associated with assets held for sale included in Duke Energy's Consolidated Balance Sheets.


(in millions)	September 30, 2023		December 31, 2022
Current Assets Held for Sale
Cash and cash equivalents	$	70	$	10
Receivables, net	107		107
Inventory	84		88
Other	179		151
Total current assets held for sale	440		356
Noncurrent Assets Held for Sale
Property, Plant and Equipment
Cost	5,387		6,444
Accumulated depreciation and amortization	(1,651)		(1,651)
Net property, plant and equipment	3,736		4,793
Operating lease right-of-use assets, net	144		140
Investments in equity method unconsolidated affiliates	504		522
Other	212		179
Total other noncurrent assets held for sale	860		841
Total Assets Held for Sale	$	5,036	$	5,990
Current Liabilities Associated with Assets Held for Sale
Accounts payable	$	124	$	122
Taxes accrued	22		17
Current maturities of long-term debt	268		276
Other	175		120
Total current liabilities associated with assets held for sale	589		535
Noncurrent Liabilities Associated with Assets Held for Sale
Long-Term debt	1,047		1,188

Operating lease liabilities	154		150
Asset retirement obligations	201		190
Other	232		399
Total other noncurrent liabilities associated with assets held for sale	1,634		1,927
Total Liabilities Associated with Assets Held for Sale	$	2,223	$	2,462

As of September 30, 2023, and December 31, 2022, the noncontrolling interest balance is $1.8 billion and $1.6 billion, respectively.

The following table presents the results of the Commercial Renewables Disposal Groups, which are included in (Loss) Income from Discontinued Operations, net of tax in Duke Energy's Consolidated Statements of Operations.


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in millions)	2023		2022		2023		2022
Operating revenues	$	103	$	129	$	293	$	372


Operation, maintenance and other	93		85		270		248
Depreciation and amortization(a)	—		65		—		193
Property and other taxes	8		10		27		31


Other income and expenses, net	(2)		(1)		(9)		(4)
Interest expense	10		18		53		55
Loss on disposal	169		—		1,603		—
Loss before income taxes	(179)		(50)		(1,669)		(159)
Income tax benefit	(27)		(30)		(353)		(106)
Loss from discontinued operations	$	(152)	$	(20)	$	(1,316)	$	(53)
Add: Net (income) loss attributable to noncontrolling interest included in discontinued operations	(38)		20		33		92
Net (loss) income from discontinued operations attributable to Duke Energy Corporation	$	(190)	$	—	$	(1,283)	$	39

(a) Upon meeting the criteria for assets held for sale, beginning in November 2022 depreciation and amortization expense were ceased.


FINANCIAL STATEMENTS			DISPOSITIONS

The Commercial Renewables Disposal Groups' held for sale assets reflected pretax impairments of approximately $1.7 billion as of December 31, 2022, and an incremental pretax impairment of $220 million as of March 31, 2023. The final purchase and sale agreements were signed with Brookfield in June 2023 for the utility-scale solar and wind group and with ArcLight in July 2023 for the distributed generation group, and accordingly, in the second quarter of 2023, pretax impairments of approximately $1.2 billion were recorded to write-down the carrying amount of property, plant and equipment assets to the estimated fair value of the business, based on the expected selling price less estimated costs to sell. Pretax impairments of $169 million were recorded in the third quarter of 2023 reflecting closing-related adjustments for the transactions that closed and ongoing assessment of the estimated fair values of the remaining assets held for sale. The impairments were included in (Loss) Income from Discontinued Operations, net of tax, in Duke Energy's Condensed Consolidated Statements of Operations and Comprehensive Income for the periods presented. The fair value was primarily determined from purchase and sale agreements for the utility scale and distributed generation groups and discounted cash flow analysis for the remainder of the assets. The discounted cash flow model utilized Level 2 and Level 3 inputs. The fair value hierarchy levels are further discussed in Note 12. The impairments for the utility-scale and distributed generation assets were updated based on customary adjustments at closing, and will be updated, if necessary, for any post-closing adjustments. The carrying amounts for the remaining assets will be updated, if necessary, based on final disposition amounts.

Duke Energy has elected not to separately disclose discontinued operations on Duke Energy's Consolidated Statements of Cash Flows. The following table summarizes Duke Energy's cash flows from discontinued operations related to the Commercial Renewables Disposal Groups.


	Nine Months Ended
	September 30,
(in millions)	2023		2022
Cash flows provided by (used in):
Operating activities	$	545	$	485
Investing activities	(597)		(223)

Other Sale-Related Matters

Duke Energy (Parent) and several Duke Energy renewables project companies, located in the ERCOT market, were named in several lawsuits arising out of Texas Storm Uri, which occurred in February 2021. The legal actions related to project companies in this matter transferred to affiliates of Brookfield in conjunction with the transaction closing in October 2023. The plaintiffs have begun to dismiss Duke Energy (parent) from these lawsuits and have represented to the court that they will dismiss Duke Energy (Parent) from all such cases. See Note 5 for more information.

As part of the purchase and sale agreement for the distributed generation group, Duke Energy has agreed to retain certain guarantees, with expiration dates between 2029 through 2034, related to tax equity partners' assets and operations that will be disposed of via sale. Duke Energy has obtained certain guarantees from the buyers in regards to future performance obligations to assist in limiting Duke Energy's exposure under the retained guarantees. The fair value of the guarantees is immaterial as Duke Energy does not believe conditions are likely for performance under these guarantees.

3. BUSINESS SEGMENTS

Duke Energy

Due to Duke Energy's commitment in the fourth quarter of 2022 to sell the Commercial Renewables business segment, Duke Energy's segment structure now includes the following two segments: EU&I and GU&I. Prior period information has been recast to conform to the current segment structure. See Note 2 for further information on the Commercial Renewables Disposal Groups.

The EU&I segment primarily includes Duke Energy's regulated electric utilities in the Carolinas, Florida and the Midwest. EU&I also includes Duke Energy's electric transmission infrastructure investments and the offshore wind contract for Carolina Long Bay. Refer to Note 2 for further information.

The GU&I segment includes Piedmont, Duke Energy's natural gas local distribution companies in Ohio and Kentucky and Duke Energy's natural gas storage, midstream pipeline and renewable natural gas investments.

The remainder of Duke Energy’s operations is presented as Other, which is primarily comprised of interest expense on holding company debt, unallocated corporate costs, Duke Energy’s wholly owned captive insurance company, Bison, and Duke Energy's ownership interest in National Methanol Company.


FINANCIAL STATEMENTS			BUSINESS SEGMENTS

Business segment information is presented in the following tables. Segment assets presented exclude intercompany assets.


	Three Months Ended September 30, 2023
	Electric		Gas		Total
	Utilities and		Utilities and		Reportable
(in millions)	Infrastructure		Infrastructure		Segments		Other		Eliminations		Total
Unaffiliated revenues	$	7,695	$	291	$	7,986	$	8	$	—	$	7,994
Intersegment revenues	20		22		42		25		(67)		—
Total revenues	$	7,715	$	313	$	8,028	$	33	$	(67)	$	7,994
Segment income (loss)(a)	$	1,447	$	15	$	1,462	$	(59)	$	—	$	1,403
Less: Noncontrolling interests											(69)
Add: Preferred stock dividend											39
Discontinued operations											(190)
Net Income											$	1,321
Segment assets(b)	$	155,588	$	16,724	$	172,312	$	8,848	$	—	$	181,160


	Three Months Ended September 30, 2022
	Electric		Gas		Total
	Utilities and		Utilities and		Reportable
(in millions)	Infrastructure		Infrastructure		Segments		Other		Eliminations		Total
Unaffiliated revenues	$	7,431	$	404	$	7,835	$	7	$	—	$	7,842
Intersegment revenues	8		23		31		23		(54)		—
Total revenues	$	7,439	$	427	$	7,866	$	30	$	(54)	$	7,842
Segment income (loss)	$	1,540	$	4	$	1,544	$	(183)	$	(1)	$	1,360
Less: Noncontrolling interests											9
Add: Preferred stock dividend											39
Discontinued operations											23
Net Income											$	1,413

(a)EU&I includes $95 million recorded within Impairment of assets and other charges and $16 million within Operations, maintenance and other on Duke Energy Carolinas' and Duke Energy Progress' Condensed Consolidated Statement of Operations related primarily to Duke Energy Carolinas' North Carolina rate case settlement and Duke Energy Progress' North Carolina rate case order. See Note 4 for additional information.

(b)Other includes Assets Held for Sale balances related to the Commercial Renewables Disposal Groups. Refer to Note 2 for further information.


	Nine Months Ended September 30, 2023
	Electric		Gas		Total
	Utilities and		Utilities and		Reportable
(in millions)	Infrastructure		Infrastructure		Segments		Other		Eliminations		Total
Unaffiliated revenues	$	20,308	$	1,516	$	21,824	$	24	$	—	$	21,848
Intersegment revenues	55		67		122		74		(196)		—
Total revenues	$	20,363	$	1,583	$	21,946	$	98	$	(196)	$	21,848
Segment income (loss)(a)	$	3,088	$	327	$	3,415	$	(388)	$	—	$	3,027
Less: Noncontrolling interests											(42)
Add: Preferred stock dividend											92
Discontinued operations											(1,283)
Net Income											$	1,878


FINANCIAL STATEMENTS			BUSINESS SEGMENTS


	Nine Months Ended September 30, 2022
	Electric		Gas		Total
	Utilities and		Utilities and		Reportable
(in millions)	Infrastructure		Infrastructure		Segments		Other		Eliminations		Total
Unaffiliated revenues	$	19,552	$	1,843	$	21,395	$	22	$	—	$	21,417
Intersegment revenues	24		69		93		69		(162)		—
Total revenues	$	19,576	$	1,912	$	21,488	$	91	$	(162)	$	21,417
Segment income (loss)(b)	$	3,237	$	277	$	3,514	$	(480)	$	(2)	$	3,032
Less: Noncontrolling interests											73
Add: Preferred stock dividend											92
Discontinued operations											62
Net Income											$	3,113

(b)EU&I includes $211 million recorded within Impairment of assets and other charges, $46 million within Operating revenues and $20 million within Noncontrolling Interests on the Condensed Consolidated Statements of Operations related to a Duke Energy Indiana Supreme Court ruling. See Note 4 for additional information.

Duke Energy Ohio

Duke Energy Ohio has two reportable segments, EU&I and GU&I. The remainder of Duke Energy Ohio's operations is presented as Other.


	Three Months Ended September 30, 2023
	Electric		Gas		Total
	Utilities and		Utilities and		Reportable
(in millions)	Infrastructure		Infrastructure		Segments		Other		Eliminations		Total


Total revenues	$	472	$	105	$	577	$	—	$	—	$	577
Segment income (loss)/Net income	$	65	$	17	$	82	$	(2)	$	—	$	80

Segment assets	$	7,745	$	4,218	$	11,963	$	10	$	(179)	$	11,794


	Three Months Ended September 30, 2022
	Electric		Gas		Total
	Utilities and		Utilities and		Reportable
(in millions)	Infrastructure		Infrastructure		Segments		Other		Total


Total revenues	$	507	$	121	$	628	$	—	$	628
Segment income (loss)/Net income	$	74	$	30	$	104	$	(1)	$	103


	Nine Months Ended September 30, 2023
	Electric		Gas		Total
	Utilities and		Utilities and		Reportable
(in millions)	Infrastructure		Infrastructure		Segments		Other		Total


Total revenues	$	1,411	$	464	$	1,875	$	—	$	1,875
Segment income (loss)/Net income	$	168	$	87	$	255	$	(4)	$	251


	Nine Months Ended September 30, 2022
	Electric		Gas		Total
	Utilities and		Utilities and		Reportable
(in millions)	Infrastructure		Infrastructure		Segments		Other		Total


Total revenues	$	1,320	$	491	$	1,811	$	—	$	1,811
Segment income (loss)/Net income	$	152	$	87	$	239	$	(3)	$	236

4. 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.


FINANCIAL STATEMENTS			REGULATORY MATTERS

Duke Energy Carolinas and Duke Energy Progress

Nuclear Station Subsequent License Renewal

On June 7, 2021, Duke Energy Carolinas filed a subsequent license renewal (SLR) application for the Oconee Nuclear Station (ONS) with the U.S. Nuclear Regulatory Commission (NRC) to renew ONS’s operating license for an additional 20 years. The SLR would extend operations of the facility from 60 to 80 years. The current licenses for units 1 and 2 expire in 2033 and the license for unit 3 expires in 2034. By a Federal Register Notice dated July 28, 2021, the NRC provided a 60-day comment period for persons whose interest may be affected by the issuance of a subsequent renewed license for ONS to file a request for a hearing and a petition for leave to intervene. On September 27, 2021, Beyond Nuclear and Sierra Club (Petitioners) filed a Hearing Request and Petition to Intervene (Hearing Request) and a Petition for Waiver. The Hearing Request proposed three contentions and claimed that Duke Energy Carolinas did not satisfy the National Environmental Policy Act (NEPA) of 1969, as amended, or the NRC’s NEPA-implementing regulations. Following Duke Energy Carolinas' answer and the Petitioners' reply, on February 11, 2022, the Atomic Safety and Licensing Board (ASLB) issued its decision on the Hearing Request and found that the Petitioners failed to establish that the proposed contentions are litigable. The ASLB also denied the Petitioners' Petition for Waiver and terminated the proceeding.

On February 24, 2022, the NRC issued a decision in the SLR appeal related to Florida Power and Light's Turkey Point nuclear generating station in Florida. The NRC ruled that the NRC’s license renewal Generic Environmental Impact Statement (GEIS) does not apply to SLR because the GEIS does not address SLR. The decision overturned a 2020 NRC decision that found the GEIS applies to SLR. Although Turkey Point is not owned or operated by a Duke Energy Registrant, the NRC’s order applies to all SLR applicants, including ONS. The NRC order also indicated no subsequent renewed licenses will be issued until the NRC staff has completed an adequate NEPA review for each application. On April 5, 2022, the NRC approved a 24-month rulemaking plan that will enable the NRC staff to complete an adequate NEPA review. Although an SLR applicant may wait until the rulemaking is completed, the NRC also noted that an applicant may submit a supplement to its environmental report providing information on environmental impacts during the SLR period prior to the rulemaking being completed. On November 7, 2022, Duke Energy Carolinas submitted a supplement to its environmental report addressing environmental impacts during the SLR period. On September 14, 2023, the NRC posted on its website that the issuance of the GEIS will now be issued in August 2024 instead of May 2024 due to the volume and technical complexity of the comments received.

On December 19, 2022, the NRC published a notice in the Federal Register that the NRC will conduct a limited scoping process to gather additional information necessary to prepare an environmental impact statement (EIS) to evaluate the environmental impacts at ONS during the SLR period. The NRC received comments from the EPA and the Petitioners and these comments identify 18 potential impacts that should be considered by the NRC in the EIS, which include, but are not limited to, climate change and flooding, environmental justice, severe accidents, and external events. The NRC has notified Duke Energy Carolinas that the draft EIS will now be issued in January 2024.

On December 19, 2022, the NRC issued the Safety Evaluation Report (SER) for the safety portion of the SLR application. The NRC determined Duke Energy Carolinas met the requirements of the applicable regulations and identified actions that have been taken or will be taken to manage the effects of aging and address time-limited analyses. Duke Energy Carolinas and the NRC met with the Advisory Committee on Reactor Safeguards (ACRS) on February 2, 2023, to discuss issues regarding the SER and SLR application. On February 25, 2023, the ACRS issued a report to the NRC on the safety aspects of the ONS SLR application, which concluded that the established programs and commitments made by Duke Energy Carolinas to manage age-related degradation provide confidence that ONS can be operated in accordance with its current licensing basis for the subsequent period of extended operation without undue risk to the health and safety of the public and the SLR application for ONS should be approved.

Although the NRC’s GEIS applicability decision will delay completion of the SLR proceeding, Duke Energy Carolinas does not believe it changes the probability that the ONS subsequent renewed licenses will ultimately be issued, although Duke Energy Carolinas cannot guarantee the outcome of the license application process.

Duke Energy Carolinas and Duke Energy Progress intend to seek renewal of operating licenses and 20-year license extensions for all of their nuclear stations. New depreciation rates were implemented for all of the nuclear facilities during the second quarter of 2021. Duke Energy Carolinas and Duke Energy Progress cannot predict the outcome of these additional relicensing proceedings.

Duke Energy Carolinas

2023 North Carolina Rate Case

On January 19, 2023, Duke Energy Carolinas filed a PBR application with the NCUC to request an increase in base rate retail revenues. The PBR Application included an MYRP to recover projected capital investments during the three-year MYRP period. In addition to the MYRP, the PBR Application included an Earnings Sharing Mechanism, Residential Decoupling Mechanism and Performance Incentive Mechanisms (PIMS) as required by HB 951. The application as originally filed requested an overall retail revenue increase of $501 million in Year 1, $172 million in Year 2 and $150 million in Year 3, for a combined total of $823 million, or 15.7%, by early 2026. The rate increase is driven primarily by major transmission and distribution investments since the last rate case and projected in the MYRP, as well as investments in energy storage and solar assets included in the MYRP consistent with the Carolinas Carbon Plan (Carbon Plan). The Public Staff – North Carolina Utilities Commission (Public Staff) and intervenor testimony was filed on July 19, 2023, and Duke Energy Carolinas' rebuttal testimony was filed on August 4, 2023.

On August 22, 2023, Duke Energy Carolinas filed with the NCUC a partial settlement with the Public Staff in connection with its PBR application. The partial settlement includes, among other things, agreement on a substantial portion of the North Carolina retail rate base for the historic base case of approximately $19.5 billion and all of the capital projects and related costs to be included in the three-year MYRP, including $4.6 billion (North Carolina retail allocation) projected to go in service over the MYRP period. Additionally, the partial settlement includes agreement, with certain adjustments, on depreciation rates, the recovery of grid improvement plan costs and PIMs, Tracking Metrics and the Residential Decoupling Mechanism under the PBR application. On August 28, 2023, Duke Energy Carolinas filed with the NCUC a second partial settlement with the Public Staff resolving additional issues, including the future treatment of nuclear production tax credits related to the Inflation Reduction Act, through a stand-alone rider that will provide the benefits to customers beginning January 1, 2025. As a result of the partial settlements, Duke Energy Carolinas recognized pretax charges of $59 million within Impairment of assets and other charges, which primarily related to certain COVID-19 deferred costs, and $8 million within Operations, maintenance and other, for the three and nine months ended September 30, 2023, on the Condensed Consolidated Statements of Operations. These partial settlements are subject to the review and approval of the NCUC.


FINANCIAL STATEMENTS			REGULATORY MATTERS

Remaining items litigated at the evidentiary hearing, which occurred August 28 to September 5, 2023, include ROE, capital structure, and recovery of the remaining COVID-19 deferred costs. Duke Energy Carolinas implemented interim rates, subject to refund, on September 1, 2023, and has requested permanent rates be effective by January 1, 2024. On October 13, 2023, the Public Staff filed supplemental testimony, and on October 23, 2023, the NCUC ordered the hearing to reconvene on October 30, 2023. Duke Energy Carolinas expects a decision on its application in this case in the fourth quarter of this year. Duke Energy Carolinas cannot predict the outcome of this matter.

Duke Energy Progress

2022 North Carolina Rate Case

On October 6, 2022, Duke Energy Progress filed a PBR application with the NCUC to request an increase in base rate retail revenues. The rate request before the NCUC included an MYRP to recover projected capital investments during the three-year MYRP period. In addition to the MYRP, the PBR Application included an Earnings Sharing Mechanism, Residential Decoupling Mechanism and PIMs as required by HB 951. The overall retail revenue increase as originally filed would have been $326 million in Year 1, $151 million in Year 2 and $138 million in Year 3, for a combined total of $615 million, by late 2025. The rate increase is driven primarily by major transmission and distribution investments since the last rate case and as projected in the MYRP, as well as investments in energy storage and solar assets included in the MYRP consistent with the Carbon Plan.

On April 26, 2023, Duke Energy Progress filed with the NCUC a partial settlement with Public Staff, which included agreement on many aspects of Duke Energy Progress' three-year MYRP proposal. In May 2023, the Carolina Industrial Group for Fair Utility Rates II (CIGFUR) joined this partial settlement and Public Staff and CIGFUR filed a separate settlement reaching agreement on PIMs, Tracking Metrics and the Residential Decoupling Mechanism under the PBR application.

On August 18, 2023, the NCUC issued an order approving Duke Energy Progress' PBR Application, as modified by the partial settlements and the order, approving of an overall retail revenue increase of $233 million in Year 1, $126 million in Year 2 and $135 million in Year 3, for a combined total of $494 million. Key aspects of the order include the approval of North Carolina retail rate base for the historic base case of approximately $12.2 billion and capital projects and related costs to be included in the three-year MYRP, including $3.5 billion (North Carolina retail allocation) projected to go in service over the MYRP period. The order established an ROE of 9.8% based upon a capital structure of 53% equity and 47% debt and approved, with certain adjustments, depreciation rates and the recovery of grid improvement plan costs and certain deferred COVID-related costs. Additionally, the Residential Decoupling Mechanism and PIMs were approved as requested under the PBR Application and revised by the partial settlements. As a result of the order, Duke Energy Progress recognized pretax charges of $28 million within Impairment of assets and other charges, which primarily related to certain COVID-19 deferred costs, and $8 million within Operations, maintenance and other, for the three and nine months ended September 30, 2023, on the Condensed Consolidated Statements of Operations. Duke Energy Progress implemented interim rates, subject to refund, on June 1, 2023, and implemented revised Year 1 rates and the residential decoupling on October 1, 2023.

On October 17, 2023, CIGFUR and Haywood Electric Membership Corporation each filed a Notice of Appeal and Exceptions to the Supreme Court of North Carolina. Both parties are appealing certain matters that do not impact the overall revenue requirement in the rate case. Specifically, they are appealing the class subsidy reduction percentage, and CIGFUR is also appealing the Customer Assistance Program and the fuel cost allocation methodology. CIGFUR also filed with the NCUC a Motion for Reconsideration and Motion for Stay with respect to those issues during the pendency of the appeal. Duke Energy Progress cannot predict the outcome of this matter.

2023 South Carolina Storm Securitization

On May 31, 2023, Duke Energy Progress filed a petition with the PSCSC requesting authorization for the financing of Duke Energy Progress' storm recovery costs in the amount of approximately $171 million, through securitization, due to storm recovery activities required as a result of the following storms: Pax, Ulysses, Matthew, Florence, Michael, Dorian, Izzy and Jasper. On September 8, 2023, Duke Energy Progress filed a comprehensive settlement agreement with all parties on all cost recovery issues raised in the storm securitization proceeding.

The evidentiary hearing occurred in early September 2023. On September 20, 2023, the PSCSC approved the comprehensive settlement agreement and on October 13, 2023, the PSCSC issued its financing order. Duke Energy Progress will proceed with structuring, marketing and pricing the storm recovery bonds and then seek PSCSC authorization to issue the bonds in the first half of 2024. Duke Energy Progress cannot predict the outcome of this matter.

2022 South Carolina Rate Case

On September 1, 2022, Duke Energy Progress filed an application with the PSCSC to request an increase in base rate retail revenues. On January 12, 2023, Duke Energy Progress and the ORS, as well as other consumer, environmental, and industrial intervening parties, filed a comprehensive Agreement and Stipulation of Settlement resolving all issues in the base rate proceeding. The major components of the stipulation include:

•A $52 million annual customer rate increase prior to the reduction from the accelerated return to customers of federal unprotected Property, Plant and Equipment related EDIT. After extending the remaining EDIT giveback to customers to 33 months, the net annual retail rate increase is approximately $36 million.

•ROE of 9.6% based on a capital structure of 52.43% equity and 47.57% debt.

•Continuation of deferral treatment of coal ash basin closure costs. Supports an amortization period for remaining coal ash closure costs in this rate case of seven years. Duke Energy Progress agreed not to seek recovery of approximately $50 million of deferred coal ash expenditures related to retired sites in this rate case (South Carolina retail allocation).

•Acceptance of the 2021 Depreciation Study as proposed in this case, as adjusted for certain recommendations from ORS and includes accelerated retirement dates for certain coal units as originally proposed.

•Establishment of a storm reserve to help offset the costs of major storms.


FINANCIAL STATEMENTS			REGULATORY MATTERS

The PSCSC held a hearing on January 17, 2023, to consider evidence supporting the stipulation and unanimously voted to approve the comprehensive agreement on February 9, 2023. A final written order was issued on March 8, 2023. New rates went into effect April 1, 2023.

Duke Energy Florida

2021 Settlement Agreement

On January 14, 2021, Duke Energy Florida filed a Settlement Agreement (the “2021 Settlement”) with the FPSC. The parties to the 2021 Settlement include Duke Energy Florida, the Office of Public Counsel (OPC), the Florida Industrial Power Users Group, White Springs Agricultural Chemicals, Inc. d/b/a PCS Phosphate and NUCOR Steel Florida, Inc. (collectively, the “Parties”).

Pursuant to the 2021 Settlement, the Parties agreed to a base rate stay-out provision that expires year-end 2024; however, Duke Energy Florida is allowed an increase to its base rates of an incremental $67 million in 2022, $49 million in 2023 and $79 million in 2024, subject to adjustment in the event of tax reform during the years 2021, 2022 and 2023. The Parties also agreed to an ROE band of 8.85% to 10.85% with a midpoint of 9.85% based on a capital structure of 53% equity and 47% debt. The ROE band can be increased by 25 basis points if the average 30-year U.S. Treasury rate increases 50 basis points or more over a six-month period in which case the midpoint ROE would rise from 9.85% to 10.10%. On July 25, 2022, this provision was triggered. Duke Energy Florida filed a petition with the FPSC on August 12, 2022, to increase the ROE effective August 2022 with a base rate increase effective January 1, 2023. The FPSC approved this request on October 4, 2022. The 2021 Settlement Agreement also provided that Duke Energy Florida will be able to retain $173 million of the expected Department of Energy (DOE) award from its lawsuit to recover spent nuclear fuel to mitigate customer rates over the term of the 2021 Settlement. Duke Energy Florida is permitted to recognize the $173 million into earnings through the approved settlement period. Duke Energy Florida settled the DOE lawsuit and received payment of approximately $180 million on June 15, 2022, of which the retail portion was approximately $154 million. The 2021 Settlement authorizes Duke Energy Florida to collect the difference between $173 million and the $154 million retail portion of the amount received through the capacity cost recovery clause. As of September 30, 2023, Duke Energy Florida has recognized $94 million into earnings. The remaining $79 million is expected to be recognized over the remainder of 2023 and 2024, while also remaining within the approved return on equity band.

The 2021 Settlement also contained a provision to recover or flow back the effects of tax law changes. As a result of the IRA enacted on August 16, 2022, Duke Energy Florida is eligible for Production Tax Credits (PTCs) associated with solar facilities placed in service beginning in January 2022. Duke Energy Florida filed a petition with the FPSC on October 17, 2022, to reduce base rates effective January 1, 2023, by $56 million to flow back the expected 2023 PTCs and to flow back the expected 2022 PTCs via an adjustment to the capacity cost recovery clause. On December 14, 2022, the FPSC issued an order approving Duke Energy Florida's petition.

In addition to these terms, the 2021 Settlement contained provisions related to the accelerated depreciation of Crystal River Units 4-5, the approval of approximately $1 billion in future investments in new cost-effective solar power, the implementation of a new Electric Vehicle Charging Station Program and the deferral and recovery of costs in connection with the implementation of Duke Energy Florida’s Vision Florida program, which explores various emerging non-carbon emitting generation technology, distributed technologies and resiliency projects, among other things. The 2021 Settlement also resolved remaining unrecovered storm costs for Hurricane Michael and Hurricane Dorian.

The FPSC approved the 2021 Settlement on May 4, 2021, issuing an order on June 4, 2021. Revised customer rates became effective January 1, 2022, with subsequent base rate increases effective January 1, 2023, and January 1, 2024.

Clean Energy Connection

On July 1, 2020, Duke Energy Florida petitioned the FPSC for approval of a voluntary solar program. The program consists of 10 new solar generating facilities with combined capacity of approximately 750 MW. The program allows participants to support cost-effective solar development in Florida by paying a subscription fee based on per kilowatt subscriptions and receiving a credit on their bill based on the actual generation associated with their portion of the solar portfolio. The estimated cost of the 10 new solar generation facilities is approximately $1 billion and the projects are expected to be completed by the end of 2024. This investment will be included in base rates offset by the revenue from the subscription fees and the credits will be included for recovery in the fuel cost recovery clause. The FPSC approved the program in January 2021.

On February 24, 2021, the League of United Latin American Citizens (LULAC) filed a notice of appeal of the FPSC’s order approving the Clean Energy Connection to the Supreme Court of Florida. The Supreme Court of Florida heard oral arguments in the appeal on February 9, 2022. On May 27, 2022, the Supreme Court of Florida issued an order remanding the case to the FPSC so that the FPSC can amend its order to better address some of the arguments raised by LULAC. On September 23, 2022, the FPSC issued a revised order and submitted it on September 26, 2022, to the Supreme Court of Florida. The Supreme Court of Florida requested that the parties file supplemental briefs regarding the revised order, which were filed February 6, 2023. LULAC has filed a request for Oral Argument on the issues discussed in the supplemental briefs, but the Court has yet to rule on that request. The FPSC approval order remains in effect pending the outcome of the appeal. Duke Energy Florida cannot predict the outcome of this matter.

Storm Protection Plan

On April 11, 2022, Duke Energy Florida filed a Storm Protection Plan for approval with the FPSC. The plan, which covers investments for the 2023-2032 time frame, reflects approximately $7 billion of capital investment in transmission and distribution meant to strengthen its infrastructure, reduce outage times associated with extreme weather events, reduce restoration costs and improve overall service reliability. The evidentiary hearing began on August 2, 2022. On October 4, 2022, the FPSC voted to approve Duke Energy Florida’s plan with one modification to remove the transmission loop radially fed program, representing a reduction of approximately $80 million over the 10-year period starting in 2025. On December 9, 2022, the OPC filed a notice of appeal of this order to the Florida Supreme Court. The OPC's initial brief was filed on April 18, 2023. Duke Energy Florida filed its brief on July 17, 2023. The OPC's reply brief was filed on October 16, 2023. The OPC has filed a request for oral argument, but the Florida Supreme Court has yet to rule on that request. Duke Energy Florida cannot predict the outcome of this matter.


FINANCIAL STATEMENTS			REGULATORY MATTERS

Hurricanes Ian and Idalia

On September 28, 2022, much of Duke Energy Florida’s service territory was impacted by Hurricane Ian, which caused significant damage resulting in more than 1.1 million outages. Duke Energy Florida's September 30, 2023, Condensed Consolidated Balance Sheets includes an estimate of approximately $357 million in regulatory assets related to deferred Hurricane Ian storm costs consistent with the FPSC's storm rule. After depleting any existing storm reserves, which were approximately $107 million before Hurricane Ian, Duke Energy Florida is permitted to petition the FPSC for recovery of additional incremental operation and maintenance costs resulting from the storm and to replenish the retail customer storm reserve to approximately $132 million. Duke Energy Florida filed its petition for cost recovery of various storms, including Hurricane Ian, and replenishment of the storm reserve on January 23, 2023, seeking recovery of $442 million, for recovery over 12 months beginning with the first billing cycle in April 2023. On March 7, 2023, the FPSC approved this request for interim recovery, subject to refund, and ordered Duke Energy Florida to file documentation of the total actual storm costs, once known. Duke Energy Florida filed documentation evidencing its total actual storm costs of $431 million on September 29, 2023.

On August 30, 2023, Hurricane Idalia made landfall on Florida’s gulf coast, causing damage and impacting more than 200,000 customers across Duke Energy Florida's service territory. Duke Energy Florida's September 30, 2023, Condensed Consolidated Balance Sheets includes an estimate of approximately $96 million in regulatory assets related to deferred Hurricane Idalia storm costs consistent with the FPSC's storm rule. On October 16, 2023, Duke Energy Florida requested to combine the $92 million retail portion of the deferred estimated Hurricane Idalia costs with $74 million of costs projected to be collected after December 31, 2023, under the existing approved storm cost recovery and storm surcharge. This $74 million of costs relates primarily to the approved ongoing replenishment of the storm reserves. Duke Energy Florida is seeking recovery of the total $166 million over 12 months beginning with its first billing cycle in January 2024, replacing the previously approved storm cost recovery and storm surcharge. Duke Energy Florida cannot predict the outcome of these matters.

Duke Energy Ohio

Duke Energy Ohio Electric Base Rate Case

Duke Energy Ohio filed with the PUCO an electric distribution base rate case application on October 1, 2021, with supporting testimony filed on October 15, 2021, requesting an increase in electric distribution base rates of approximately $55 million and an ROE of 10.3%. On September 19, 2022, Duke Energy Ohio filed a Stipulation and Recommendation with the PUCO, which includes an increase in overall electric distribution base rates of approximately $23 million and an ROE of 9.5%. The stipulation is among all but one party to the proceeding. The PUCO issued an order on December 14, 2022, approving the Stipulation without material modification. Rates went into effect on January 3, 2023. The OCC filed an application for rehearing on January 13, 2023, arguing the Stipulation was unreasonable, discriminatory, and denied OCC due process. On February 8, 2023, the PUCO granted the OCC's application for rehearing for further consideration. Duke Energy Ohio cannot predict the outcome of this matter.

Energy Efficiency Cost Recovery

In response to changes in Ohio law that eliminated Ohio's energy efficiency mandates, the PUCO issued an order on February 26, 2020, directing utilities to wind down their demand-side management programs by September 30, 2020, and to terminate the programs by December 31, 2020. Duke Energy Ohio took the following actions:

•On March 27, 2020, Duke Energy Ohio filed an application for rehearing seeking clarification on the final true up and reconciliation process after 2020. On November 18, 2020, the PUCO issued an order replacing the cost cap previously imposed upon Duke Energy Ohio with a cap on shared savings recovery. On December 18, 2020, Duke Energy Ohio filed an additional application for rehearing challenging, among other things, the imposition of the cap on shared savings. On January 13, 2021, the application for rehearing was granted for further consideration.

•On October 9, 2020, Duke Energy Ohio filed an application to implement a voluntary energy efficiency program portfolio to commence on January 1, 2021. The application proposed a mechanism for recovery of program costs and a benefit associated with avoided transmission and distribution costs.

•On November 18, 2020, the PUCO issued an order directing all utilities to set their energy efficiency riders to zero effective January 1, 2021, and to file a separate application for final reconciliation of all energy efficiency costs prior to December 31, 2020. Effective January 1, 2021, Duke Energy Ohio suspended its energy efficiency programs.

•On June 14, 2021, the PUCO requested each utility to file by July 15, 2021, a proposal to reestablish low-income programs through December 31, 2021. Duke Energy Ohio filed its application on July 14, 2021.

•On February 23, 2022, the PUCO issued its Fifth Entry on Rehearing that 1) affirmed its reduction in Duke Energy Ohio's shared savings cap; 2) denied rehearing/clarification regarding lost distribution revenues and shared savings recovery for periods after December 31, 2020; and 3) directed Duke Energy Ohio to submit an updated application with exhibits. On March 25, 2022, Duke Energy Ohio filed its Amended Application consistent with the PUCO's order.

•On March 17, 2023, the Staff of the PUCO submitted its Staff Review and Recommendation. This Staff Report, like prior such reports, recommends certain disallowances related to incentives.

•On March 27, 2023, the PUCO established a procedural schedule. Intervention/comments were filed on April 26, 2023, and Duke Energy Ohio filed reply comments on May 11, 2023.

On August 9, 2023, the PUCO issued its decision approving the Company’s request for recovery and final true up of energy efficiency program costs, lost distribution revenues and performance incentives from calendar years 2018 through 2020, resulting in $14 million of Regulated electric revenue on the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2023, and resolving all outstanding issues in these proceedings. Rates were revised effective September 1, 2023.


FINANCIAL STATEMENTS			REGULATORY MATTERS

Duke Energy Ohio Natural Gas Base Rate Case

Duke Energy Ohio filed with the PUCO a natural gas base rate case application on June 30, 2022, with supporting testimony filed on July 14, 2022, requesting an increase in natural gas base rates of approximately $49 million and an ROE of 10.3%. This is an approximate 5.6% average increase in the customer's total bill across all customer classes. The drivers for this case are capital invested since Duke Energy Ohio's last natural gas base rate case in 2012. Duke Energy Ohio is also seeking to adjust the caps on its CEP rider. The report of the Staff of the PUCO was issued on December 21, 2022, recommending an increase in natural gas base rates of $24 million to $36 million, with an equity ratio of 52.32% and an ROE range of 9.03% to 10.04%. On April 28, 2023, Duke Energy Ohio filed a stipulation with all parties to the case except the OCC. In the stipulation, the parties agreed to approximately $32 million in revenue increases with an equity ratio of 52.32% and an ROE of 9.6%, and adjustments to the CEP Rider caps. The stipulation was opposed by the OCC at an evidentiary hearing that concluded on May 24, 2023. Initial briefs were filed June 16, 2023, and reply briefs were filed on July 14, 2023. On November 1, 2023, PUCO issued an order approving the stipulation as filed. New rates went into effect November 1, 2023. Duke Energy Ohio cannot predict the outcome of this matter.

Duke Energy Kentucky Electric Base Rate Case

On December 1, 2022, Duke Energy Kentucky filed a rate case with the KPSC requesting an annualized increase in electric base rates of approximately $75 million and an ROE of 10.35%. This is an overall increase in rates of approximately 17.8%. The request for rate increase is driven by capital investments to strengthen the electricity generation and delivery systems along with adjusted depreciation rates for the East Bend and Woodsdale Combustion Turbine (CT) generation stations. Duke Energy Kentucky is also requesting approval for new programs for the benefit of customers and tariff updates, including a voluntary community-based renewable subscription program and two electric vehicle charging programs. Intervenor testimony was filed March 10, 2023, and rebuttal testimony was filed April 14, 2023. The Kentucky Attorney General recommended an increase of $31 million and an ROE of 9.55%. An evidentiary hearing concluded on May 11, 2023, with simultaneous briefs filed June 9, 2023, and replies filed on June 19, 2023. The KPSC issued an order on October 12, 2023, including a $48 million increase in base revenues, an ROE of 9.75% for electric base rates and 9.65% for electric riders and an equity ratio of 52.145%. The Company's request to align the depreciation rates of East Bend with a 2035 retirement date was denied and the KPSC ordered depreciation rates with a 2041 retirement date for the unit. The KPSC did approve the request to align the depreciation rates of Woodsdale CT with a 2040 retirement date and denied the voluntary community-based renewable subscription program and the two electric vehicle charging programs. On November 1, 2023, Duke Energy Kentucky filed for rehearing requesting certain matters be reconsidered by the KPSC. Duke Energy Kentucky cannot predict the outcome of this matter.

Duke Energy Indiana

2019 Indiana Rate Case

On July 2, 2019, Duke Energy Indiana filed a general rate case with the IURC for a rate increase for retail customers of approximately $395 million. The rebuttal case, filed on December 4, 2019, updated the requested revenue requirement to result in a 15.6%, or $396 million, average retail rate increase, including the impacts of the utility receipts tax. On June 29, 2020, the IURC issued an order in the rate case approving a revenue increase of $146 million before certain adjustments and ratemaking refinements. The order approved Duke Energy Indiana’s requested forecasted rate base of $10.2 billion as of December 31, 2020, including the Edwardsport Integrated Gasification Combined Cycle (IGCC) Plant. The IURC reduced Duke Energy Indiana’s request by slightly more than $200 million, when accounting for the utility receipts tax and other adjustments. Approximately 50% of the reduction was due to a prospective change in depreciation and use of regulatory asset for the end-of-life inventory at retired generating plants, approximately 20% was due to the approved ROE of 9.7% versus the requested ROE of 10.4% and approximately 20% was related to miscellaneous earnings neutral adjustments. Step one rates were estimated to be approximately 75% of the total and became effective on July 30, 2020. Step two rates estimated to be the remaining 25% of the total rate increase were approved on July 28, 2021, and implemented in August 2021.

Several groups appealed the IURC order to the Indiana Court of Appeals. The Indiana Court of Appeals affirmed the IURC decision on May 13, 2021. However, upon appeal by the Indiana Office of Utility Consumer Counselor (OUCC) and the Duke Industrial Group on March 10, 2022, the Indiana Supreme Court found that the IURC erred in allowing Duke Energy Indiana to recover coal ash costs incurred before the IURC’s rate case order in June 2020. The Indiana Supreme Court found that allowing Duke Energy Indiana to recover coal ash costs incurred between rate cases that exceeded the amount built into base rates violated the prohibition against retroactive ratemaking. The IURC’s order has been remanded to the IURC for additional proceedings consistent with the Indiana Supreme Court’s opinion. As a result of the court's opinion, Duke Energy Indiana recognized pretax charges of approximately $211 million to Impairment of assets and other charges and $46 million to Operating revenues in the Condensed Consolidated Statements of Operations for the three months ended March 31, 2022. Duke Energy Indiana filed a request for rehearing with the Supreme Court on April 11, 2022, which the court denied on May 26, 2022. Duke Energy Indiana filed its testimony in the remand proceeding on August 18, 2022. On February 3, 2023, Duke Energy Indiana filed a settlement agreement reached with the OUCC and Duke Industrial Group, which includes an agreed amount of approximately $70 million of refunds to be paid to customers. The IURC approved this settlement agreement in its entirety on April 12, 2023. In June of 2023, Duke Energy Indiana commenced refunding the approximate $70 million to customers in accordance with the settlement agreement.


FINANCIAL STATEMENTS			REGULATORY MATTERS

Indiana Coal Ash Recovery Cases

In Duke Energy Indiana’s 2019 rate case, the IURC also opened a subdocket for post-2018 coal ash related expenditures. Duke Energy Indiana filed testimony on April 15, 2020, in the coal ash subdocket requesting recovery for the post-2018 coal ash basin closure costs for plans that have been approved by the Indiana Department of Environmental Management (IDEM) as well as continuing deferral, with carrying costs, on the balance. An evidentiary hearing was held on September 14, 2020. Briefing was completed by mid-September 2021. On November 3, 2021, the IURC issued an order allowing recovery for post-2018 coal ash basin closure costs for the plans that have been approved by IDEM, as well as continuing deferral, with carrying costs, on the balance. The OUCC and the Duke Industrial Group appealed. The Indiana Court of Appeals issued its opinion on February 21, 2023, reversing the IURC's order to the extent that it allowed Duke Energy Indiana to recover federally mandated costs incurred prior to the IURC's November 3, 2021, order. In addition, the court found that any costs incurred pre-petition to determine federally mandated compliance options were not specifically authorized by the statute and should also be disallowed. As a result of the Court's opinion, Duke Energy Indiana recognized a pretax charge of approximately $175 million to Impairment of assets and other charges for the year ended December 31, 2022. Duke Energy Indiana filed its proposal to remove from rates certain costs incurred prior to the IURC's November 3, 2021, order date. On September 20, 2023, the commission approved the Company's proposal to remove the costs from its rates and assessed simple interest of the refunds of 4.71%, beginning from when the costs were initially recovered from customers. Duke Energy Indiana also filed a new petition under the amended version of the federal mandate statute for additional post-2018 coal ash closure costs for the remaining basins not included in the 2020 Indiana Coal Ash Recovery Case. An evidentiary hearing has been scheduled for January 25, 2024. Duke Energy Indiana cannot predict the outcome of this matter.

TDSIC 2.0

On November 23, 2021, Duke Energy Indiana filed for approval of the Transmission, Distribution, Storage Improvement Charge 2.0 investment plan for 2023-2028 (TDSIC 2.0). On June 15, 2022, the IURC approved, without modification, TDSIC 2.0, which includes approximately $2 billion in transmission and distribution investments selected to improve customer reliability, harden and improve resiliency of the grid, enable expansion of renewable and distributed energy projects and encourage economic development. In addition, the IURC set up a subdocket to consider the targeted economic development project, which the IURC approved on March 2, 2022. On July 15, 2022, the OUCC filed a notice of appeal to the Indiana Court of Appeals in Duke Energy Indiana’s TDSIC 2.0 proceeding. An appellant brief was filed on October 28, 2022, and Duke Energy Indiana filed its responsive brief on December 28, 2022. The Indiana Court of Appeals issued its opinion on March 9, 2023, affirming the IURC’s order in its entirety. The Duke Industrial Group filed a petition to transfer to the Indiana Supreme Court. The Indiana Supreme Court granted transfer and held an oral argument on September 28, 2023. Duke Energy Indiana cannot predict the outcome of this matter.

Piedmont

Tennessee Annual Review Mechanism

On October 10, 2022, the TPUC approved Piedmont’s petition to adopt an ARM as allowed by Tennessee law. Under the ARM, Piedmont will adjust rates annually to achieve its allowed 9.80% ROE over the upcoming year and to true up any variance between its allowed ROE and actual ROE from the prior calendar year. The initial year subject to the true up is 2022, and Piedmont filed the initial rate adjustments request on May 19, 2023, for a total increase of approximately $42 million and for rates to become effective October 1, 2023. On September 11, 2023, the TPUC approved a settlement between Piedmont and the Consumer Advocate Division of the Tennessee Attorney General's Office, which provided for recovery of the Historic Base Period Reconciliation cost of service of $11 million through rider rates and an increase in Piedmont's base rates of $29 million for the Annual Base Rate Reset component of the ARM. These amounts result in a total increase of $40 million with adjusted rates effective October 1, 2023.

5. COMMITMENTS AND CONTINGENCIES

ENVIRONMENTAL

Remediation Activities

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


FINANCIAL STATEMENTS			COMMITMENTS AND CONTINGENCIES

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


(in millions)	September 30, 2023		December 31, 2022
Reserves for Environmental Remediation
Duke Energy	$	90	$	84
Duke Energy Carolinas	24		22
Progress Energy	20		19
Duke Energy Progress	10		8
Duke Energy Florida	10		11
Duke Energy Ohio	36		33
Duke Energy Indiana	2		3
Piedmont	7		7

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

LITIGATION

Duke Energy

Texas Storm Uri Tort Litigation

Duke Energy (Parent), several Duke Energy renewables project companies, and others in the ERCOT market were named in multiple lawsuits arising out of Texas Storm Uri, which occurred in February 2021. These lawsuits seek recovery for property damages, personal injury and wrongful death allegedly caused by the power outages that plaintiffs claim were the collective failure of generators, transmission and distribution operators (TDUs), retail energy providers, and all others, including ERCOT. The cases were consolidated into a Texas state court multidistrict litigation (MDL) proceeding for discovery and pre-trial motions. Five MDL cases were designated as lead cases in which motions to dismiss were filed and all other cases were stayed. On January 28, 2023, the Court denied certain motions including those by the generator defendants and TDUs and granted others. The generators and TDUs filed petitions for Writ of Mandamus to the Texas Court of Appeals seeking to overturn the denials. The TDUs' petition, filed first, was accepted and oral argument was held on October 23, 2023. The parties await a ruling from the court. The generators’ petition has not yet been set for argument. After the rulings on the motions to dismiss, plaintiffs filed new lawsuits against Duke Energy (Parent), Duke Energy Renewables, LLC, and several Duke Energy renewable entities, which are included in the MDL proceeding and are currently stayed. The plaintiffs have begun to dismiss Duke Energy (Parent) from these lawsuits and have represented to the court that they will dismiss Duke Energy (Parent) from all such cases. Duke Energy cannot predict the outcome of this matter. See Note 2 for more information related to the sale of the Commercial Renewables Disposal Groups.

Duke Energy Carolinas

Ruben Villano, et al. v. Duke Energy Carolinas, LLC

On June 16, 2021, a group of nine individuals went over a low-head dam adjacent to the Dan River Steam Station in Eden, North Carolina, while water tubing. Emergency personnel rescued four people and five others were confirmed deceased. On August 11, 2021, Duke Energy Carolinas was served with the complaint filed in Durham County Superior Court on behalf of four survivors, which was later amended to include all the decedents along with the survivors. The lawsuit alleges that Duke Energy Carolinas knew that the river was used for recreational purposes, did not adequately warn about the dam, and created a dangerous and hidden hazard on the Dan River by building and maintaining the low-head dam. Duke Energy Carolinas reached an agreement that resolved this matter. The resolution, which did not have a material financial impact, was approved by the Durham County Superior Court. The case was dismissed on June 6, 2023.

NTE Carolinas II, LLC Litigation

In November 2017, Duke Energy Carolinas entered into a standard FERC large generator interconnection agreement (LGIA) with NTE Carolinas II, LLC (NTE), a company that proposed to build a combined-cycle natural gas plant in Rockingham County, North Carolina. On September 6, 2019, Duke Energy Carolinas filed a lawsuit in Mecklenburg County Superior Court against NTE for breach of contract, alleging that NTE's failure to pay benchmark payments for Duke Energy Carolinas' transmission system upgrades required under the interconnection agreement constituted a termination of the interconnection agreement. Duke Energy Carolinas sought a monetary judgment against NTE because NTE failed to make multiple milestone payments. The lawsuit was moved to federal court in North Carolina. NTE filed a motion to dismiss Duke Energy Carolinas’ complaint and brought counterclaims alleging anti-competitive conduct and violations of state and federal statutes. Duke Energy Carolinas filed a motion to dismiss NTE's counterclaims. Both NTE's and Duke Energy Carolinas' motions to dismiss were subsequently denied by the court.

On May 21, 2020, in response to a NTE petition challenging Duke Energy Carolinas' termination of the LGIA, FERC issued a ruling that 1) it has exclusive jurisdiction to determine whether a transmission provider may terminate a LGIA; 2) FERC approval is required to terminate a conforming LGIA if objected to by the interconnection customer; and 3) Duke Energy may not announce the termination of a conforming LGIA unless FERC has approved the termination. FERC's Office of Enforcement also initiated an investigation of Duke Energy Carolinas into matters pertaining to the LGIA. On April 6, 2023, Duke Energy Carolinas received notice from the FERC Office of Enforcement that they have closed their non-public investigation with no further action recommended.


FINANCIAL STATEMENTS			COMMITMENTS AND CONTINGENCIES

Following completion of discovery, Duke Energy Carolinas filed a motion for summary judgment seeking a ruling in its favor as to some of its affirmative claims against NTE and to all of NTE’s counterclaims. On June 24, 2022, the court issued an order partially granting Duke Energy Carolinas' motion by dismissing NTE's counterclaims that Duke Energy Carolinas engaged in anti-competitive behavior in violation of state and federal statutes. On October 12, 2022, the parties executed a settlement agreement with respect to the remaining breach of contract claims in the litigation and a Stipulation of Dismissal was filed with the court on October 13, 2022. On November 11, 2022, NTE filed its Notice of Appeal to the U.S. Court of Appeals for the Fourth Circuit as to the District Court's summary judgment ruling in Duke Energy Carolinas' favor on NTE's antitrust and unfair competition claims. Briefing on NTE's appeal was completed on June 30, 2023. The oral argument has been scheduled for t December 7, 2023. Duke Energy Carolinas cannot predict the outcome of this matter.

Asbestos-related Injuries and Damages Claims

Duke Energy Carolinas has experienced numerous claims for indemnification and medical cost reimbursement related to asbestos exposure. These claims relate to damages for bodily injuries alleged to have arisen from exposure to or use of asbestos in connection with construction and maintenance activities conducted on its electric generation plants prior to 1985.

Duke Energy Carolinas has recognized asbestos-related reserves of $436 million at September 30, 2023, and $457 million at December 31, 2022. These reserves are classified in Other within Other Noncurrent Liabilities and Other within Current Liabilities on the Condensed Consolidated Balance Sheets. These reserves are based on Duke Energy Carolinas' best estimate for current and future asbestos claims through 2043 and are recorded on an undiscounted basis. In light of the uncertainties inherent in a longer-term forecast, management does not believe they can reasonably estimate the indemnity and medical costs that might be incurred after 2043 related to such potential claims. It is possible Duke Energy Carolinas may incur asbestos liabilities in excess of the recorded reserves.

Duke Energy Carolinas has third-party insurance to cover certain losses related to asbestos-related injuries and damages above an aggregate self-insured retention. Receivables for insurance recoveries were $572 million at September 30, 2023, and $595 million at December 31, 2022. These amounts are classified in Other within Other Noncurrent Assets and Receivables within Current Assets on the Condensed Consolidated Balance Sheets. Any future payments up to the policy limit will be reimbursed by the third-party insurance carrier. Duke Energy Carolinas is not aware of any uncertainties regarding the legal sufficiency of insurance claims. Duke Energy Carolinas believes the insurance recovery asset is probable of recovery as the insurance carrier continues to have a strong financial strength rating.

The reserve for credit losses for insurance receivables is $9 million and $12 million for Duke Energy and Duke Energy Carolinas as of September 30, 2023, and December 31, 2022, respectively. The insurance receivable is evaluated based on the risk of default and the historical losses, current conditions and expected conditions around collectability. Management evaluates the risk of default annually based on payment history, credit rating and changes in the risk of default from credit agencies.

Duke Energy Indiana

Coal Ash Insurance Coverage Litigation

In June 2022, Duke Energy Indiana filed a civil action in Indiana Superior Court against various insurance companies seeking declaratory relief with respect to insurance coverage for coal combustion residuals-related expenses and liabilities covered by third-party liability insurance policies. The insurance policies cover the 1969-1972 and 1984-1985 periods and provide third-party liability insurance for claims and suits alleging property damage, bodily injury and personal injury (or a combination thereof). A trial date has not yet been set. On June 30, 2023, Duke Energy Indiana and Associated Electric and Gas Insurance Services (AEGIS) reached a confidential settlement, the results of which were not material, and as a result, AEGIS was dismissed from the litigation on July 13, 2023. The lawsuit remains pending as to the other insurers, but is stayed until December 31, 2023, to allow for further settlement negotiations. Duke Energy Indiana cannot predict the outcome of this matter.

Other Litigation and Legal Proceedings

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

OTHER COMMITMENTS AND CONTINGENCIES

General

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

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

6. DEBT AND CREDIT FACILITIES

Debt related to the Commercial Renewables Disposal Groups is now classified as held for sale and is excluded from the following disclosures. See Note 2 for further information.


FINANCIAL STATEMENTS			DEBT AND CREDIT FACILITIES

SUMMARY OF SIGNIFICANT DEBT ISSUANCES

The following table summarizes significant debt issuances (in millions).


				Nine Months Ended September 30, 2023
						Duke		Duke		Duke		Duke		Duke		Duke
	Maturity	Interest		Duke		Energy		Energy		Energy		Energy		Energy		Energy
Issuance Date	Date	Rate		Energy		(Parent)		Carolinas		Progress		Florida		Ohio		Indiana		Piedmont
Unsecured Debt
April 2023(a)	April 2026	4.125	%	$	1,725	$	1,725	$	—	$	—	$	—	$	—	$	—	$	—
June 2023(b)	June 2033	5.400	%	350		—		—		—		—		—		—		350
September 2023(c)	September 2033	5.750	%	600		600		—		—		—		—		—		—
September 2023(c)	September 2053	6.100	%	750		750		—		—		—		—		—		—



First Mortgage Bonds




January 2023(d)	January 2033	4.950	%	900		—		900		—		—		—		—		—
January 2023(d)	January 2053	5.350	%	900		—		900		—		—		—		—		—
March 2023(e)	March 2033	5.250	%	500		—		—		500		—		—		—		—
March 2023(e)	March 2053	5.350	%	500		—		—		500		—		—		—		—
March 2023(f)	April 2033	5.250	%	375		—		—		—		—		375		—		—
March 2023(f)	April 2053	5.650	%	375		—		—		—		—		375		—		—
March 2023(g)	April 2053	5.400	%	500		—		—		—		—		—		500		—
June 2023(h)	January 2033	4.950	%	350		—		350		—		—		—		—		—
June 2023(h)	January 2054	5.400	%	500		—		500		—		—		—		—		—
September 2023(i)	October 2073	4.960	%	200		—		—		—		200		—		—		—







Total issuances				$	8,525	$	3,075	$	2,650	$	1,000	$	200	$	750	$	500	$	350

(a)See "Duke Energy (Parent) Convertible Senior Notes" below for additional information.

(b)Proceeds will be used to repay $45 million of maturities due October 2023, to pay down a portion of short-term debt and for general corporate purposes.

(c)Proceeds were primarily used to repay $400 million of maturities due October 2023, to pay down a portion of short-term debt and for general corporate purposes.

(d)Proceeds were used to repay $1 billion of maturities due March 2023, to pay down a portion of short-term debt and for general company purposes.

(e)Proceeds will be used to repay $300 million of maturities due September 2023, to pay down a portion of short-term debt and for general company purposes.

(f)Proceeds will be used to repay $300 million of maturities due September 2023 and a portion of the $100 million term loan due October 2023. Remaining proceeds will be used to repay a portion of short-term debt and for general corporate purposes.

(g)Proceeds were used to repay the $300 million term loan due October 2023. Remaining proceeds will be used to repay a portion of short-term debt and for general company purposes.

(h)Proceeds were used to pay down a portion of short-term debt and for general company purposes.

(i)Proceeds were used to pay down a portion of short-term debt and for general company purposes.

Duke Energy (Parent) Convertible Senior Notes

In April 2023, Duke Energy (Parent) completed the sale of $1.7 billion 4.125% Convertible Senior Notes due April 2026 (convertible notes). The convertible notes are senior unsecured obligations of Duke Energy, and will mature on April 15, 2026, unless earlier converted or repurchased in accordance with their terms. The convertible notes bear interest at a fixed rate of 4.125% per year, payable semiannually in arrears on April 15 and October 15 of each year, beginning on October 15, 2023. Proceeds were used to repay a portion of outstanding commercial paper and for general corporate purposes.

Prior to the close of business on the business day immediately preceding January 15, 2026, the convertible notes will be convertible at the option of the holders when the following conditions are met:

•during any calendar quarter commencing after the calendar quarter ending on June 30, 2023, (and only during such calendar quarter) if the last reported sale price of Duke Energy common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day;

•during the five consecutive business day period after any 10 consecutive trading day period (the measurement period) in which the trading price, as defined, per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of Duke Energy common stock and the conversion rate on each such trading day; or

•upon the occurrence of specified corporate events described in the indenture agreement.


FINANCIAL STATEMENTS			DEBT AND CREDIT FACILITIES

On or after January 15, 2026, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders of the convertible notes may convert all or any portion of their convertible notes at their option at any time at the conversion rate then in effect, irrespective of these conditions. Duke Energy will settle conversions of the convertible notes by paying cash up to the aggregate principal amount of the convertible notes to be converted and paying or delivering, as the case may be, cash, shares of Duke Energy's common stock, $0.001 par value per share, or a combination of cash and shares of its common stock, at its election, in respect of the remainder, if any, of its conversion obligation in excess of the aggregate principal amount of the convertible notes being converted.

The conversion rate for the convertible notes is initially 8.4131 shares of Duke Energy's common stock per $1,000 principal amount of convertible notes. The initial conversion price of the convertible notes represents a premium of approximately 25% over the last reported sale price of Duke Energy’s common stock on the NYSE on April 3, 2023. The conversion rate and the corresponding conversion price will not be adjusted for any accrued and unpaid interest but will be subject to adjustment in some instances, such as stock splits or share combinations, certain distributions to common stockholders, or tender offers at off-market rates. The changes in the conversion rates are intended to make convertible note holders whole for changes in the fair value of Duke Energy common stock resulting from such events. Duke Energy may not redeem the convertible notes prior to the maturity date.

Duke Energy issued the convertible notes pursuant to an indenture, dated as of April 6, 2023, by and between Duke Energy and The Bank of New York Mellon Trust Company, N.A., as trustee. The terms of the convertible notes include customary fundamental change provisions that require repayment of the notes with interest upon certain events, such as a stockholder approved plan of liquidation or if Duke Energy's common stock ceases to be listed on the NYSE.

CURRENT MATURITIES OF LONG-TERM DEBT

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


(in millions)	Maturity Date	Interest Rate		September 30, 2023
Unsecured Debt
Duke Energy Ohio(a)	October 2023	5.813	%	$	150
Duke Energy (Parent)	October 2023	3.950	%	400
Duke Energy (Parent) Term Loan Facility(a)	March 2024	6.048	%	1,000
Duke Energy (Parent)	April 2024	3.750	%	1,000
Duke Energy Florida(a)	April 2024	6.196	%	800






Other(b)				684
Current maturities of long-term debt				$	4,034

(a)Debt has a floating interest rate. In October 2023, Duke Energy Kentucky's $50 million two-year term loan facility was increased to $75 million and it's maturity was extended to April 2024. The term loan was fully drawn at the time of closing with incremental borrowings under the facility used to pay down short-term debt and for general corporate purposes.

(b)Includes finance lease obligations, amortizing debt, tax-exempt bonds with mandatory put options and small bullet maturities.

AVAILABLE CREDIT FACILITIES

Master Credit Facility

In March 2023, Duke Energy amended its existing Master Credit Facility of $9 billion to extend the termination date to March 2028. The Duke Energy Registrants, excluding Progress Energy, have borrowing capacity under the Master Credit Facility up to a specified sublimit for each borrower. Duke Energy has the unilateral ability at any time to increase or decrease the borrowing sublimits of each borrower, subject to a maximum sublimit for each borrower. The amount available under the Master Credit Facility has been reduced to backstop issuances of commercial paper, certain letters of credit and variable-rate demand tax-exempt bonds that may be put to the Duke Energy Registrants at the option of the holder. An amendment in conjunction with the issuance of the Convertible Senior Notes due April 2026 clarifies that payments due as a result of a conversion of a convertible note would not constitute an event of default.


FINANCIAL STATEMENTS			DEBT AND CREDIT FACILITIES

The table below includes the current borrowing sublimits and available capacity under these credit facilities.


	September 30, 2023
			Duke		Duke		Duke		Duke		Duke		Duke
	Duke		Energy		Energy		Energy		Energy		Energy		Energy
(in millions)	Energy		(Parent)		Carolinas		Progress		Florida		Ohio		Indiana		Piedmont
Facility size(a)	$	9,000	$	2,275	$	1,575	$	1,400	$	1,250	$	750	$	950	$	800
Reduction to backstop issuances
Commercial paper(b)	(2,815)		(106)		(631)		(841)		(292)		(298)		(350)		(297)
Outstanding letters of credit	(39)		(27)		(4)		(1)		(7)		—		—		—
Tax-exempt bonds	(81)		—		—		—		—		—		(81)		—

Available capacity under the Master Credit Facility	$	6,065	$	2,142	$	940	$	558	$	951	$	452	$	519	$	503

(a)Represents the sublimit of each borrower.

(b)Duke Energy issued $625 million of commercial paper and loaned the proceeds through the money pool to Duke Energy Carolinas, Duke Energy Progress, Duke Energy Ohio and Duke Energy Indiana. The balances are classified as Long-Term Debt Payable to Affiliated Companies on the Condensed Consolidated Balance Sheets.

Other Credit Facilities

Duke Energy (Parent) Term Loan Facility

In March 2022, Duke Energy (Parent) entered into a Term Loan Credit Agreement (Credit Agreement) with commitments totaling $1.4 billion maturing March 2024. The maturity date of the Credit Agreement may be extended for up to two years by request of Duke Energy (Parent), upon satisfaction of certain conditions contained in the Credit Agreement. Borrowings under the facility were used to repay amounts drawn under the Three-Year Revolving Credit Facility and for general corporate purposes, including repayment of a portion of Duke Energy's outstanding commercial paper. The balance is classified as Current maturities of long-term debt on Duke Energy's Condensed Consolidated Balance Sheets.

In March 2023, Duke Energy amended its existing Credit Agreement in conjunction with the issuance of the Convertible Senior Notes due April 2026 to clarify that payments due as a result of a conversion of a convertible note would not constitute an event of default.

7. ASSET RETIREMENT OBLIGATIONS

The Duke Energy Registrants record AROs when there is a legal obligation to incur retirement costs associated with the retirement of a long-lived asset and the obligation can be reasonably estimated. Actual costs incurred could be materially different from current estimates that form the basis of the recorded AROs.

The following table presents the AROs recorded on the Condensed Consolidated Balance Sheets.


	September 30, 2023
			Duke				Duke		Duke		Duke		Duke
	Duke		Energy		Progress		Energy		Energy		Energy		Energy
(in millions)	Energy		Carolinas		Energy		Progress		Florida		Ohio		Indiana		Piedmont
Decommissioning of nuclear power facilities(a)	$	7,459	$	3,136	$	4,295	$	4,069	$	226	$	—	$	—	$	—
Closure of ash impoundments	4,474		2,065		1,530		1,509		21		77		801		—
Other	300		67		105		44		61		61		41		28
Total ARO	$	12,233	$	5,268	$	5,930	$	5,622	$	308	$	138	$	842	$	28
Less: Current portion	620		238		261		260		1		8		114		—
Total noncurrent ARO	$	11,613	$	5,030	$	5,669	$	5,362	$	307	$	130	$	728	$	28

(a)Duke Energy amount includes purchase accounting adjustments related to the merger with Progress Energy.

ARO Liability Rollforward

The following table presents the change in liability associated with AROs for the Duke Energy Registrants.


			Duke				Duke		Duke		Duke		Duke
	Duke		Energy		Progress		Energy		Energy		Energy		Energy
(in millions)	Energy		Carolinas		Energy		Progress		Florida		Ohio		Indiana		Piedmont
Balance at December 31, 2022(a)	$	12,728	$	5,382	$	6,181	$	5,823	$	358	$	154	$	951	$	26

Accretion expense(b)	391		189		178		169		9		5		24		2
Liabilities settled(c)	(494)		(171)		(247)		(196)		(51)		(11)		(66)		—

Revisions in estimates of cash flows(d)	(392)		(132)		(182)		(174)		(8)		(10)		(67)		—
Balance at September 30, 2023	$	12,233	$	5,268	$	5,930	$	5,622	$	308	$	138	$	842	$	28


FINANCIAL STATEMENTS			ASSET RETIREMENT OBLIGATIONS

(a)Primarily relates to decommissioning nuclear power facilities, closure of ash impoundments, asbestos removal, closure of landfills at fossil generation facilities, retirement of natural gas mains and removal of renewable energy generation assets.

(b)For the nine months ended September 30, 2023, substantially all accretion expense relates to Duke Energy's regulated operations and has been deferred in accordance with regulatory accounting treatment.

(c)Primarily relates to ash impoundment closures and nuclear decommissioning.

(d)The amounts recorded represent the discounted cash flows for estimated closure costs as evaluated on a site-by-site basis. The decreases primarily relate to lower unit costs associated with basin closure, routine maintenance and beneficiation activities, as well as a reduction in monitoring wells needed.

Asset retirement costs associated with the AROs for operating plants and retired plants are included in Net property, plant and equipment and Regulatory assets within Other Noncurrent Assets, respectively, on the Condensed Consolidated Balance Sheets.

8. GOODWILL

Duke Energy

Duke Energy's Goodwill balance of $19.3 billion is allocated $17.4 billion to EU&I and $1.9 billion to GU&I on Duke Energy's Condensed Consolidated Balance Sheets at September 30, 2023, and December 31, 2022. There are no accumulated impairment charges.

Duke Energy Ohio

Duke Energy Ohio's Goodwill balance of $920 million, allocated $596 million to EU&I and $324 million to GU&I, is presented net of accumulated impairment charges of $216 million on the Condensed Consolidated Balance Sheets at September 30, 2023, and December 31, 2022.

Progress Energy

Progress Energy's Goodwill is included in the EU&I segment and there are no accumulated impairment charges.

Piedmont

Piedmont's Goodwill is included in the GU&I segment and there are no accumulated impairment charges.

Impairment Testing

Duke Energy, Progress Energy, Duke Energy Ohio and Piedmont are required to perform an annual goodwill impairment test as of the same date each year and, accordingly, perform their annual impairment testing of goodwill as of August 31. Duke Energy, Progress Energy, Duke Energy Ohio and Piedmont update their test between annual tests if events or circumstances occur that would more likely than not reduce the fair value of a reporting unit below its carrying value. As the fair value for Duke Energy, Progress Energy, Duke Energy Ohio and Piedmont exceeded their respective carrying values at the date of the annual impairment analysis, no goodwill impairment charges were recorded in the third quarter of 2023.


FINANCIAL STATEMENTS			RELATED PARTY TRANSACTIONS

9. RELATED PARTY TRANSACTIONS

The Subsidiary Registrants engage in related party transactions in accordance with applicable state and federal commission regulations. Refer to the Condensed Consolidated Balance Sheets of the Subsidiary Registrants for balances due to or due from related parties. Material amounts related to transactions with related parties included on the Condensed Consolidated Statements of Operations and Comprehensive Income are presented in the following table.


	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions)	2023		2022		2023		2022
Duke Energy Carolinas
Corporate governance and shared service expenses(a)	$	198	$	193	$	586	$	590
Indemnification coverages(b)	9		7		26		21
Joint Dispatch Agreement (JDA) revenue(c)	5		16		26		54
JDA expense(c)	58		210		121		477
Intercompany natural gas purchases(d)	5		5		14		14
Progress Energy
Corporate governance and shared service expenses(a)	$	172	$	188	$	522	$	568
Indemnification coverages(b)	11		10		35		32
JDA revenue(c)	58		210		121		477
JDA expense(c)	5		16		26		54
Intercompany natural gas purchases(d)	19		19		56		57
Duke Energy Progress
Corporate governance and shared service expenses(a)	$	103	$	111	$	314	$	338
Indemnification coverages(b)	5		5		15		15
JDA revenue(c)	58		210		121		477
JDA expense(c)	5		16		26		54
Intercompany natural gas purchases(d)	19		19		56		57
Duke Energy Florida
Corporate governance and shared service expenses(a)	$	69	$	77	$	208	$	230
Indemnification coverages(b)	6		5		20		17
Duke Energy Ohio
Corporate governance and shared service expenses(a)	$	73	$	87	$	222	$	251
Indemnification coverages(b)	1		2		4		4
Duke Energy Indiana
Corporate governance and shared service expenses(a)	$	92	$	115	$	275	$	330
Indemnification coverages(b)	2		2		6		6
Piedmont
Corporate governance and shared service expenses(a)	$	32	$	37	$	107	$	109
Indemnification coverages(b)	1		1		3		2
Intercompany natural gas sales(d)	24		24		70		71
Natural gas storage and transportation costs(e)	6		6		18		17

(a)The Subsidiary Registrants are charged their proportionate share of corporate governance and other shared services costs, primarily related to human resources, employee benefits, information technology, legal and accounting fees, as well as other third-party costs. These amounts are primarily recorded in Operation, maintenance and other and Impairment of assets and other charges on the Condensed Consolidated Statements of Operations and Comprehensive Income.

(b)The Subsidiary Registrants incur expenses related to certain indemnification coverages through Bison, Duke Energy’s wholly owned captive insurance subsidiary. These expenses are recorded in Operation, maintenance and other on the Condensed Consolidated Statements of Operations and Comprehensive Income.

(c)Duke Energy Carolinas and Duke Energy Progress participate in a JDA, which allows the collective dispatch of power plants between the service territories to reduce customer rates. Revenues from the sale of power and expenses from the purchase of power pursuant to the JDA are recorded in Operating Revenues and Fuel used in electric generation and purchased power, respectively, on the Condensed Consolidated Statements of Operations and Comprehensive Income.

(d)Piedmont provides long-term natural gas delivery service to certain Duke Energy Carolinas and Duke Energy Progress natural gas-fired generation facilities. Piedmont records the sales in Operating Revenues, and Duke Energy Carolinas and Duke Energy Progress record the related purchases as a component of Fuel used in electric generation and purchased power on their respective Condensed Consolidated Statements of Operations and Comprehensive Income.

(e)Piedmont has related party transactions as a customer of its equity method investments in Pine Needle LNG Company, LLC, Hardy Storage Company, LLC and Cardinal Pipeline Company, LLC natural gas storage and transportation facilities. These expenses are included in Cost of natural gas on Piedmont's Condensed Consolidated Statements of Operations and Comprehensive Income.


FINANCIAL STATEMENTS			RELATED PARTY TRANSACTIONS

In addition to the amounts presented above, the Subsidiary Registrants have other affiliate transactions, including rental of office space, participation in a money pool arrangement, other operational transactions, such as pipeline lease arrangements, and their proportionate share of certain charged expenses. These transactions of the Subsidiary Registrants are incurred in the ordinary course of business and are eliminated in consolidation.

As discussed in Note 13, certain trade receivables have been sold by Duke Energy Ohio and Duke Energy Indiana to CRC, an affiliate formed by a subsidiary of Duke Energy. The proceeds obtained from the sales of receivables are largely cash but do include a subordinated note from CRC for a portion of the purchase price.

Intercompany Income Taxes

Duke Energy and the Subsidiary Registrants file a consolidated federal income tax return and other state and jurisdictional returns. The Subsidiary Registrants have a tax sharing agreement with Duke Energy for the allocation of consolidated tax liabilities and benefits. Income taxes recorded represent amounts the Subsidiary Registrants would incur as separate C-Corporations. The following table includes the balance of intercompany income tax receivables and payables for the Subsidiary Registrants.


	Duke				Duke		Duke		Duke		Duke
	Energy		Progress		Energy		Energy		Energy		Energy
(in millions)	Carolinas		Energy		Progress		Florida		Ohio		Indiana		Piedmont
September 30, 2023
Intercompany income tax receivable	$	—	$	—	$	—	$	—	$	—	$	—	$	24
Intercompany income tax payable	72		138		114		110		18		20		—

December 31, 2022
Intercompany income tax receivable	$	—	$	95	$	36	$	17	$	—	$	—	$	—
Intercompany income tax payable	37		—		—		—		17		18		38

10. DERIVATIVES AND HEDGING

The Duke Energy Registrants use commodity, interest rate and foreign currency contracts to manage commodity price risk, interest rate risk and foreign currency exchange rate risk. The primary use of commodity derivatives is to hedge the generation portfolio against changes in the prices of electricity and natural gas. Piedmont enters into natural gas supply contracts to provide diversification, reliability and natural gas cost benefits to its customers. Interest rate derivatives are used to manage interest rate risk associated with borrowings. Foreign currency derivatives are used to manage risk related to foreign currency exchange rates on certain issuances of debt. Derivatives related to interest rate risk for the Commercial Renewables Disposal Groups are now classified as held for sale and are excluded from the following disclosures. See Note 2 for further information.

All derivative instruments not identified as NPNS are recorded at fair value as assets or liabilities on the Condensed Consolidated Balance Sheets. Cash collateral related to derivative instruments executed under master netting arrangements is offset against the collateralized derivatives on the Condensed Consolidated Balance Sheets. The cash impacts of settled derivatives are recorded as operating activities or financing activities on the Condensed Consolidated Statements of Cash Flows consistent with the classification of the hedged transaction.

INTEREST RATE RISK

The Duke Energy Registrants are exposed to changes in interest rates as a result of their issuance or anticipated issuance of variable-rate and fixed-rate debt and commercial paper. Interest rate risk is managed by limiting variable-rate exposures to a percentage of total debt and by monitoring changes in interest rates. To manage risk associated with changes in interest rates, the Duke Energy Registrants may enter into interest rate swaps, U.S. Treasury lock agreements and other financial contracts. In anticipation of certain fixed-rate debt issuances, a series of forward-starting interest rate swaps or Treasury locks may be executed to lock in components of current market interest rates. These instruments are later terminated prior to or upon the issuance of the corresponding debt.

Cash Flow Hedges

For a derivative designated as hedging the exposure to variable cash flows of a future transaction, referred to as a cash flow hedge, the effective portion of the derivative's gain or loss is initially reported as a component of other comprehensive income and subsequently reclassified into earnings once the future transaction impacts earnings. Amounts for interest rate contracts are reclassified to earnings as interest expense over the term of the related debt. Gains and losses reclassified out of accumulated other comprehensive income (loss) for the three and nine months ended September 30, 2023, and 2022, were not material. Duke Energy's interest rate derivatives designated as hedges include forward-starting interest rate swaps not accounted for under regulatory accounting.

Undesignated Contracts

Undesignated contracts primarily include contracts not designated as a hedge because they are accounted for under regulatory accounting or contracts that do not qualify for hedge accounting.

Duke Energy’s interest rate swaps for its regulated operations employ regulatory accounting. With regulatory accounting, the mark-to-market gains or losses on the swaps are deferred as regulatory liabilities or regulatory assets, respectively. Regulatory assets and liabilities are amortized consistent with the treatment of the related costs in the ratemaking process. The accrual of interest on the swaps is recorded as Interest Expense on the Duke Energy Registrant's Condensed Consolidated Statements of Operations and Comprehensive Income.


FINANCIAL STATEMENTS			DERIVATIVES AND HEDGING

The following tables show notional amounts of outstanding derivatives related to interest rate risk.


	September 30, 2023
			Duke				Duke		Duke		Duke		Duke
	Duke		Energy		Progress		Energy		Energy		Energy		Energy
(in millions)	Energy		Carolinas		Energy		Progress		Florida		Indiana		Ohio
Cash flow hedges	$	1,875	$	—	$	—	$	—	$	—	$	—	$	—
Undesignated contracts	2,477		650		1,500		500		1,000		300		27
Total notional amount	$	4,352	$	650	$	1,500	$	500	$	1,000	$	300	$	27


	December 31, 2022
			Duke				Duke		Duke		Duke		Duke
	Duke		Energy		Progress		Energy		Energy		Energy		Energy
(in millions)	Energy		Carolinas		Energy		Progress		Florida		Indiana		Ohio
Cash flow hedges	$	500	$	—	$	—	$	—	$	—	$	—	$	—
Undesignated contracts	2,377		1,250		800		500		300		300		27
Total notional amount	$	2,877	$	1,250	$	800	$	500	$	300	$	300	$	27

COMMODITY PRICE RISK

The Duke Energy Registrants are exposed to the impact of changes in the prices of electricity purchased and sold in bulk power markets and natural gas purchases, including Piedmont's natural gas supply contracts. Exposure to commodity price risk is influenced by a number of factors including the term of contracts, the liquidity of markets and delivery locations. To manage risk associated with commodity prices, the Duke Energy Registrants may enter into long-term power purchase or sales contracts and long-term natural gas supply agreements.

Undesignated Contracts

Undesignated contracts primarily include contracts not designated as a hedge because they are accounted for under regulatory accounting or contracts that do not qualify for hedge accounting.

For the Subsidiary Registrants, bulk power electricity and natural gas purchases flow through fuel adjustment clauses, formula-based contracts or other cost-sharing mechanisms. Differences between the costs included in rates and the incurred costs, including undesignated derivative contracts, are largely deferred as regulatory assets or regulatory liabilities. Piedmont policies allow for the use of financial instruments to hedge commodity price risks. The strategy and objective of these hedging programs are to use the financial instruments to reduce natural gas cost volatility for customers.

Volumes

The tables below include volumes of outstanding commodity derivatives. Amounts disclosed represent the absolute value of notional volumes of commodity contracts excluding NPNS. The Duke Energy Registrants have netted contractual amounts where offsetting purchase and sale contracts exist with identical delivery locations and times of delivery. Where all commodity positions are perfectly offset, no quantities are shown.


	September 30, 2023
		Duke		Duke	Duke	Duke
	Duke	Energy	Progress	Energy	Energy	Energy
	Energy	Carolinas	Energy	Progress	Ohio	Indiana	Piedmont
Electricity (GWh)	20,961	—	—	—	2,550	18,411	—
Natural gas (millions of dekatherms)	841	276	272	272	—	21	272


	December 31, 2022
		Duke		Duke	Duke	Duke
	Duke	Energy	Progress	Energy	Energy	Energy
	Energy	Carolinas	Energy	Progress	Ohio	Indiana	Piedmont
Electricity (GWh)	14,086	—	—	—	1,820	12,266	—
Natural gas (millions of dekatherms)	909	307	292	292	—	11	299

FOREIGN CURRENCY RISK

Duke Energy may enter into foreign currency derivatives to hedge exposure to changes in foreign currency exchange rates, such as that arising from the issuance of debt denominated in a currency other than U.S. dollars.


FINANCIAL STATEMENTS			DERIVATIVES AND HEDGING

Fair Value Hedges

Derivatives related to existing fixed-rate securities are accounted for as fair value hedges, where the derivatives’ fair value gains or losses and hedged items’ fair value gains or losses are both recorded directly to earnings on the same income statement line item, including foreign currency gains or losses arising from changes in the U.S. currency exchange rates. Duke Energy has elected to exclude the cross-currency basis spread from the assessment of effectiveness in the fair value hedges of its foreign currency risk and record any difference between the change in the fair value of the excluded components and the amounts recognized in earnings as a component of other comprehensive income or loss.

The following table shows Duke Energy's outstanding derivatives related to foreign currency risk at September 30, 2023.


										Fair Value Loss(a)
										(in millions)
	Pay Notional				Receive Notional		Receive		Hedge	Three Months Ended September 30,				Nine Months Ended September 30,
	(in millions)		Pay Rate		(in millions)		Rate		Maturity Date	2023		2022		2023		2022
Fair value hedges
	$	645	4.75	%	600	euros	3.10	%	June 2028	$	(20)	$	(41)	$	(10)	$	(57)
	537		5.31	%	500	euros	3.85	%	June 2034	(17)		(34)		(9)		(47)
Total notional amount	$	1,182			1,100	euros				$	(37)	$	(75)	$	(19)	$	(104)

(a) Amounts are recorded in Other Income and expenses, net on the Condensed Consolidated Statement of Operations, which offsets an equal translation adjustment of the foreign denominated debt. See the Condensed Consolidated Statements of Comprehensive Income for amounts excluded from the assessment of effectiveness for which the difference between changes in fair value and periodic amortization is recorded.

LOCATION AND FAIR VALUE OF DERIVATIVE ASSETS AND LIABILITIES RECOGNIZED IN THE CONDENSED CONSOLIDATED BALANCE SHEETS

The following tables show the fair value and balance sheet location of derivative instruments. Although derivatives subject to master netting arrangements are netted on the Condensed Consolidated Balance Sheets, the fair values presented below are shown gross and cash collateral on the derivatives has not been netted against the fair values shown.


Derivative Assets	September 30, 2023
			Duke				Duke		Duke		Duke		Duke
	Duke		Energy		Progress		Energy		Energy		Energy		Energy
(in millions)	Energy		Carolinas		Energy		Progress		Florida		Ohio		Indiana		Piedmont
Commodity Contracts



Not Designated as Hedging Instruments
Current	$	57	$	11	$	14	$	9	$	5	$	2	$	28	$	1
Noncurrent	86		40		46		46		—		—		—		—
Total Derivative Assets – Commodity Contracts	$	143	$	51	$	60	$	55	$	5	$	2	$	28	$	1
Interest Rate Contracts
Designated as Hedging Instruments

Noncurrent	177		—		—		—		—		—		—		—
Not Designated as Hedging Instruments
Current	104		26		78		—		78		—		—		—
Noncurrent	101		16		58		24		34		—		27		—
Total Derivative Assets – Interest Rate Contracts	$	382	$	42	$	136	$	24	$	112	$	—	$	27	$	—








Total Derivative Assets	$	525	$	93	$	196	$	79	$	117	$	2	$	55	$	1


FINANCIAL STATEMENTS			DERIVATIVES AND HEDGING


Derivative Liabilities	September 30, 2023
			Duke				Duke		Duke		Duke		Duke
	Duke		Energy		Progress		Energy		Energy		Energy		Energy
(in millions)	Energy		Carolinas		Energy		Progress		Florida		Ohio		Indiana		Piedmont
Commodity Contracts



Not Designated as Hedging Instruments
Current	$	275	$	156	$	97	$	97	$	—	$	—	$	4	$	18
Noncurrent	215		48		40		40		—		—		—		127
Total Derivative Liabilities – Commodity Contracts	$	490	$	204	$	137	$	137	$	—	$	—	$	4	$	145
Interest Rate Contracts



Not Designated as Hedging Instruments

Noncurrent	1		—		—		—		—		1		—		—
Total Derivative Liabilities – Interest Rate Contracts	$	1	$	—	$	—	$	—	$	—	$	1	$	—	$	—
Foreign Currency Contracts
Designated as Hedging Instruments
Current	$	18	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Noncurrent	11		—		—		—		—		—		—		—



Total Derivative Liabilities – Foreign Currency Contracts	$	29	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Total Derivative Liabilities	$	520	$	204	$	137	$	137	$	—	$	1	$	4	$	145


Derivative Assets	December 31, 2022
			Duke				Duke		Duke		Duke		Duke
	Duke		Energy		Progress		Energy		Energy		Energy		Energy
(in millions)	Energy		Carolinas		Energy		Progress		Florida		Ohio		Indiana		Piedmont
Commodity Contracts



Not Designated as Hedging Instruments
Current	$	265	$	132	$	99	$	99	$	—	$	5	$	29	$	—
Noncurrent	213		104		108		108		—		—		—		—
Total Derivative Assets – Commodity Contracts	$	478	$	236	$	207	$	207	$	—	$	5	$	29	$	—
Interest Rate Contracts
Designated as Hedging Instruments
Current	$	101	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Not Designated as Hedging Instruments
Current	$	216	$	94	$	41	$	23	$	17	$	—	$	81	$	—

Total Derivative Assets – Interest Rate Contracts	$	317	$	94	$	41	$	23	$	17	$	—	$	81	$	—








Total Derivative Assets	$	795	$	330	$	248	$	230	$	17	$	5	$	110	$	—


FINANCIAL STATEMENTS			DERIVATIVES AND HEDGING


Derivative Liabilities	December 31, 2022
			Duke				Duke		Duke		Duke		Duke
	Duke		Energy		Progress		Energy		Energy		Energy		Energy
(in millions)	Energy		Carolinas		Energy		Progress		Florida		Ohio		Indiana		Piedmont
Commodity Contracts



Not Designated as Hedging Instruments
Current	$	175	$	96	$	36	$	18	$	19	$	—	$	16	$	27
Noncurrent	202		31		30		30		—		—		—		141
Total Derivative Liabilities – Commodity Contracts	$	377	$	127	$	66	$	48	$	19	$	—	$	16	$	168
Interest Rate Contracts



Not Designated as Hedging Instruments

Noncurrent	$	2	$	—	$	—	$	—	$	—	$	2	$	—	$	—
Total Derivative Liabilities – Interest Rate Contracts	$	2	$	—	$	—	$	—	$	—	$	2	$	—	$	—
Foreign Currency Contracts
Designated as Hedging Instruments
Current	$	18	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Noncurrent	40		—		—		—		—		—		—		—



Total Derivative Liabilities – Equity Securities Contracts	$	58	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Total Derivative Liabilities	$	437	$	127	$	66	$	48	$	19	$	2	$	16	$	168

OFFSETTING ASSETS AND LIABILITIES

The following tables present the line items on the Condensed Consolidated Balance Sheets where derivatives are reported. Substantially all of Duke Energy's outstanding derivative contracts are subject to enforceable master netting arrangements. The amounts shown are calculated by counterparty. Accounts receivable or accounts payable may also be available to offset exposures in the event of bankruptcy. These amounts are not included in the tables below.


Derivative Assets	September 30, 2023
			Duke				Duke		Duke		Duke		Duke
	Duke		Energy		Progress		Energy		Energy		Energy		Energy
(in millions)	Energy		Carolinas		Energy		Progress		Florida		Ohio		Indiana		Piedmont
Current
Gross amounts recognized	$	161	$	37	$	92	$	9	$	83	$	2	$	28	$	1
Offset	(17)		(9)		(8)		(8)		—		—		—		—

Net amounts presented in Current Assets: Other	$	144	$	28	$	84	$	1	$	83	$	2	$	28	$	1
Noncurrent
Gross amounts recognized	$	364	$	56	$	104	$	70	$	34	$	—	$	27	$	—
Offset	(60)		(32)		(28)		(28)		—		—		—		—

Net amounts presented in Other Noncurrent Assets: Other	$	304	$	24	$	76	$	42	$	34	$	—	$	27	$	—


FINANCIAL STATEMENTS			DERIVATIVES AND HEDGING


Derivative Liabilities	September 30, 2023
			Duke				Duke		Duke		Duke		Duke
	Duke		Energy		Progress		Energy		Energy		Energy		Energy
(in millions)	Energy		Carolinas		Energy		Progress		Florida		Ohio		Indiana		Piedmont
Current
Gross amounts recognized	$	293	$	156	$	97	$	97	$	—	$	—	$	4	$	18
Offset	(17)		(9)		(8)		(8)		—		—		—		—
Cash collateral posted	(16)		(12)		(1)		(1)		—		—		(4)		—
Net amounts presented in Current Liabilities: Other	$	260	$	135	$	88	$	88	$	—	$	—	$	—	$	18
Noncurrent
Gross amounts recognized	$	227	$	48	$	40	$	40	$	—	$	1	$	—	$	127
Offset	(60)		(33)		(28)		(28)		—		—		—		—
Cash collateral posted	$	(8)	$	(7)	$	(1)	$	(1)	$	—	$	—	$	—	$	—
Net amounts presented in Other Noncurrent Liabilities: Other	$	159	$	8	$	11	$	11	$	—	$	1	$	—	$	127


Derivative Assets	December 31, 2022
			Duke				Duke		Duke		Duke		Duke
	Duke		Energy		Progress		Energy		Energy		Energy		Energy
(in millions)	Energy		Carolinas		Energy		Progress		Florida		Ohio		Indiana		Piedmont
Current
Gross amounts recognized	$	582	$	226	$	140	$	122	$	17	$	5	$	110	$	—
Offset	(33)		(15)		(18)		(18)		—		—		—		—
Cash collateral received	(31)		(18)		(12)		(12)		—		—		—		—
Net amounts presented in Current Assets: Other	$	518	$	193	$	110	$	92	$	17	$	5	$	110	$	—
Noncurrent
Gross amounts recognized	$	213	$	104	$	108	$	108	$	—	$	—	$	—	$	—
Offset	(59)		(29)		(30)		(30)		—		—		—		—
Cash collateral received	(38)		(11)		(27)		(27)		—		—		—		—
Net amounts presented in Other Noncurrent Assets: Other	$	116	$	64	$	51	$	51	$	—	$	—	$	—	$	—


Derivative Liabilities	December 31, 2022
			Duke				Duke		Duke		Duke		Duke
	Duke		Energy		Progress		Energy		Energy		Energy		Energy
(in millions)	Energy		Carolinas		Energy		Progress		Florida		Ohio		Indiana		Piedmont
Current
Gross amounts recognized	$	193	$	96	$	36	$	18	$	19	$	—	$	16	$	27
Offset	(33)		(15)		(18)		(18)		—		—		—		—
Cash collateral posted	(16)		—		—		—		—		—		(16)		—
Net amounts presented in Current Liabilities: Other	$	144	$	81	$	18	$	—	$	19	$	—	$	—	$	27
Noncurrent
Gross amounts recognized	$	244	$	31	$	30	$	30	$	—	$	2	$	—	$	141
Offset	(59)		(29)		(30)		(30)		—		—		—		—

Net amounts presented in Other Noncurrent Liabilities: Other	$	185	$	2	$	—	$	—	$	—	$	2	$	—	$	141


FINANCIAL STATEMENTS			DERIVATIVES AND HEDGING

OBJECTIVE CREDIT CONTINGENT FEATURES

Certain derivative contracts contain objective credit contingent features. These features include the requirement to post cash collateral or letters of credit if specific events occur, such as a credit rating downgrade below investment grade. The following tables show information with respect to derivative contracts that are in a net liability position and contain objective credit risk-related payment provisions.


	September 30, 2023
			Duke				Duke
	Duke		Energy		Progress		Energy
(in millions)	Energy		Carolinas		Energy		Progress
Aggregate fair value of derivatives in a net liability position	$	312	$	175	$	138	$	138
Fair value of collateral already posted	21		19		2		2
Additional cash collateral or letters of credit in the event credit risk-related contingent features were triggered	$	291	$	156	$	136	$	136


	December 31, 2022
			Duke				Duke		Duke
	Duke		Energy		Progress		Energy		Energy
(in millions)	Energy		Carolinas		Energy		Progress		Florida
Aggregate fair value of derivatives in a net liability position	$	141	$	86	$	55	$	48	$	7
Fair value of collateral already posted	—		—		—		—		—
Additional cash collateral or letters of credit in the event credit risk-related contingent features were triggered	$	141	$	86	$	55	$	48	$	7

The Duke Energy Registrants have elected to offset cash collateral and fair values of derivatives. For amounts to be netted, the derivative and cash collateral must be executed with the same counterparty under the same master netting arrangement.

11. INVESTMENTS IN DEBT AND EQUITY SECURITIES

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

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

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

Investment Trusts

The investments within the Investment Trusts are managed by independent investment managers with discretion to buy, sell and invest pursuant to the guidelines set forth by the investment manager agreements and trust agreements. The Duke Energy Registrants have limited oversight of the day-to-day management of these investments. As a result, the ability to hold investments in unrealized loss positions is outside the control of the Duke Energy Registrants. Accordingly, all unrealized losses associated with debt securities within the Investment Trusts are recognized immediately and deferred to regulatory accounts where appropriate.

Other AFS Securities

Unrealized gains and losses on all other AFS securities are included in other comprehensive income until realized, unless it is determined the carrying value of an investment has a credit loss. The Duke Energy Registrants analyze all investment holdings each reporting period to determine whether a decline in fair value is related to a credit loss. If a credit loss exists, the unrealized credit loss is included in earnings. There were no material credit losses as of September 30, 2023, and December 31, 2022.

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


FINANCIAL STATEMENTS			INVESTMENTS IN DEBT AND EQUITY SECURITIES

DUKE ENERGY

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


	September 30, 2023						December 31, 2022
	Gross		Gross				Gross		Gross
	Unrealized		Unrealized		Estimated		Unrealized		Unrealized		Estimated
	Holding		Holding		Fair		Holding		Holding		Fair
(in millions)	Gains		Losses		Value		Gains		Losses		Value
NDTF
Cash and cash equivalents	$	—	$	—	$	160	$	—	$	—	$	215
Equity securities	4,218		44		6,530		3,658		105		5,871
Corporate debt securities	—		80		612		1		85		641
Municipal bonds	—		41		318		—		39		330
U.S. government bonds	—		136		1,470		2		112		1,423

Other debt securities	—		18		169		—		18		156
Total NDTF Investments	$	4,218	$	319	$	9,259	$	3,661	$	359	$	8,636
Other Investments
Cash and cash equivalents	$	—	$	—	$	36	$	—	$	—	$	22
Equity securities	26		9		141		21		16		128
Corporate debt securities	—		10		83		—		12		84
Municipal bonds	—		3		74		—		3		78
U.S. government bonds	—		5		46		—		2		62
Other debt securities	—		5		52		—		3		41
Total Other Investments	$	26	$	32	$	432	$	21	$	36	$	415
Total Investments	$	4,244	$	351	$	9,691	$	3,682	$	395	$	9,051

Realized gains and losses, which were determined on a specific identification basis, from sales of FV-NI and AFS securities for the three and nine months ended September 30, 2023, and 2022, were as follows.


	Three Months Ended				Nine Months Ended
(in millions)	September 30, 2023		September 30, 2022		September 30, 2023		September 30, 2022
FV-NI:
Realized gains	$	61	$	25	$	107	$	170
Realized losses	35		61		117		247
AFS:
Realized gains	16		7		37		22
Realized losses	45		40		104		105

DUKE ENERGY CAROLINAS

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


	September 30, 2023						December 31, 2022
	Gross		Gross				Gross		Gross
	Unrealized		Unrealized		Estimated		Unrealized		Unrealized		Estimated
	Holding		Holding		Fair		Holding		Holding		Fair
(in millions)	Gains		Losses		Value		Gains		Losses		Value
NDTF
Cash and cash equivalents	$	—	$	—	$	59	$	—	$	—	$	117
Equity securities	2,468		25		3,767		2,147		51		3,367
Corporate debt securities	—		60		376		1		62		401
Municipal bonds	—		9		45		—		10		64
U.S. government bonds	—		73		745		1		51		685
Other debt securities	—		18		163		—		18		148
Total NDTF Investments	$	2,468	$	185	$	5,155	$	2,149	$	192	$	4,782


FINANCIAL STATEMENTS			INVESTMENTS IN DEBT AND EQUITY SECURITIES


	Three Months Ended				Nine Months Ended
(in millions)	September 30, 2023		September 30, 2022		September 30, 2023		September 30, 2022
FV-NI:
Realized gains	$	43	$	16	$	70	$	109
Realized losses	17		39		64		143
AFS:
Realized gains	12		7		21		19
Realized losses	26		20		54		57

PROGRESS ENERGY

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


	September 30, 2023						December 31, 2022
	Gross		Gross				Gross		Gross
	Unrealized		Unrealized		Estimated		Unrealized		Unrealized		Estimated
	Holding		Holding		Fair		Holding		Holding		Fair
(in millions)	Gains		Losses		Value		Gains		Losses		Value
NDTF
Cash and cash equivalents	$	—	$	—	$	101	$	—	$	—	$	98
Equity securities	1,750		19		2,763		1,511		54		2,504
Corporate debt securities	—		20		236		—		23		240
Municipal bonds	—		32		273		—		29		266
U.S. government bonds	—		63		725		1		61		738

Other debt securities	—		—		6		—		—		8
Total NDTF Investments	$	1,750	$	134	$	4,104	$	1,512	$	167	$	3,854
Other Investments
Cash and cash equivalents	$	—	$	—	$	8	$	—	$	—	$	11

Municipal bonds	—		—		23		—		—		25
Total Other Investments	$	—	$	—	$	31	$	—	$	—	$	36
Total Investments	$	1,750	$	134	$	4,135	$	1,512	$	167	$	3,890


	Three Months Ended				Nine Months Ended
(in millions)	September 30, 2023		September 30, 2022		September 30, 2023		September 30, 2022
FV-NI:
Realized gains	$	18	$	9	$	37	$	61
Realized losses	18		22		53		104
AFS:
Realized gains	4		—		16		3
Realized losses	19		9		50		32


FINANCIAL STATEMENTS			INVESTMENTS IN DEBT AND EQUITY SECURITIES

DUKE ENERGY PROGRESS

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


	September 30, 2023						December 31, 2022
	Gross		Gross				Gross		Gross
	Unrealized		Unrealized		Estimated		Unrealized		Unrealized		Estimated
	Holding		Holding		Fair		Holding		Holding		Fair
(in millions)	Gains		Losses		Value		Gains		Losses		Value
NDTF
Cash and cash equivalents	$	—	$	—	$	62	$	—	$	—	$	56
Equity securities	1,661		19		2,663		1,431		54		2,411
Corporate debt securities	—		19		224		—		22		230
Municipal bonds	—		32		273		—		29		266
U.S. government bonds	—		43		469		1		37		460
Other debt securities	—		—		5		—		—		7
Total NDTF Investments	$	1,661	$	113	$	3,696	$	1,432	$	142	$	3,430
Other Investments
Cash and cash equivalents	$	—	$	—	$	4	$	—	$	—	$	9
Total Other Investments	$	—	$	—	$	4	$	—	$	—	$	9
Total Investments	$	1,661	$	113	$	3,700	$	1,432	$	142	$	3,439


	Three Months Ended				Nine Months Ended
(in millions)	September 30, 2023		September 30, 2022		September 30, 2023		September 30, 2022
FV-NI:
Realized gains	$	15	$	9	$	34	$	60
Realized losses	18		21		52		101
AFS:
Realized gains	4		—		15		3
Realized losses	18		9		47		29

DUKE ENERGY FLORIDA

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


	September 30, 2023						December 31, 2022
	Gross		Gross				Gross		Gross
	Unrealized		Unrealized		Estimated		Unrealized		Unrealized		Estimated
	Holding		Holding		Fair		Holding		Holding		Fair
(in millions)	Gains		Losses		Value		Gains		Losses		Value
NDTF
Cash and cash equivalents	$	—	$	—	$	39	$	—	$	—	$	42
Equity securities	89		—		100		80		—		93
Corporate debt securities	—		1		12		—		1		10

U.S. government bonds	—		20		256		—		24		278

Other debt securities	—		—		1		—		—		1
Total NDTF Investments(a)	$	89	$	21	$	408	$	80	$	25	$	424
Other Investments
Cash and cash equivalents	$	—	$	—	$	1	$	—	$	—	$	1

Municipal bonds	—		—		23		—		—		25
Total Other Investments	$	—	$	—	$	24	$	—	$	—	$	26
Total Investments	$	89	$	21	$	432	$	80	$	25	$	450

(a)During the nine months ended September 30, 2023, and the year ended December 31, 2022, Duke Energy Florida received reimbursements from the NDTF for costs related to ongoing decommissioning activity of Crystal River Unit 3.


FINANCIAL STATEMENTS			INVESTMENTS IN DEBT AND EQUITY SECURITIES

DUKE ENERGY INDIANA

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


	September 30, 2023						December 31, 2022
	Gross		Gross				Gross		Gross
	Unrealized		Unrealized		Estimated		Unrealized		Unrealized		Estimated
	Holding		Holding		Fair		Holding		Holding		Fair
(in millions)	Gains		Losses		Value		Gains		Losses		Value
Investments
Cash and cash equivalents	$	—	$	—	$	3	$	—	$	—	$	1
Equity securities	3		9		88		2		16		79
Corporate debt securities	—		—		9		—		1		8
Municipal bonds	—		3		44		—		3		45
U.S. government bonds	—		—		6		—		—		7

Total Investments	$	3	$	12	$	150	$	2	$	20	$	140

DEBT SECURITY MATURITIES

The table below summarizes the maturity date for debt securities.


	September 30, 2023
			Duke				Duke		Duke		Duke
	Duke		Energy		Progress		Energy		Energy		Energy
(in millions)	Energy		Carolinas		Energy		Progress		Florida		Indiana
Due in one year or less	$	137	$	7	$	109	$	21	$	88	$	7
Due after one through five years	671		209		388		235		153		19
Due after five through 10 years	545		311		197		184		13		10
Due after 10 years	1,471		802		569		531		38		23
Total	$	2,824	$	1,329	$	1,263	$	971	$	292	$	59

12. FAIR VALUE MEASUREMENTS

Fair value is the exchange price to sell an asset or transfer a liability in an orderly transaction between market participants at the measurement date. The fair value definition focuses on an exit price versus the acquisition cost. Fair value measurements use market data or assumptions market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs may be readily observable, corroborated by market data or generally unobservable. Valuation techniques maximize the use of observable inputs and minimize the use of unobservable inputs. A midmarket pricing convention (the midpoint price between bid and ask prices) is permitted for use as a practical expedient.

Fair value measurements are classified in three levels based on the fair value hierarchy as defined by GAAP. Certain investments are not categorized within the fair value hierarchy. These investments are measured at fair value using the net asset value per share practical expedient. The net asset value is derived based on the investment cost, less any impairment, plus or minus changes resulting from observable price changes for an identical or similar investment of the same issuer.

Fair value accounting guidance permits entities to elect to measure certain financial instruments that are not required to be accounted for at fair value, such as equity method investments or the Company’s own debt, at fair value. The Duke Energy Registrants have not elected to record any of these items at fair value.

Valuation methods of the primary fair value measurements disclosed below are as follows.

Investments in equity securities

The majority of investments in equity securities are valued using Level 1 measurements. Investments in equity securities are typically valued at the closing price in the principal active market as of the last business day of the quarter. Principal active markets for equity prices include published exchanges such as the NYSE and Nasdaq Stock Market. Foreign equity prices are translated from their trading currency using the currency exchange rate in effect at the close of the principal active market. There was no after-hours market activity that was required to be reflected in the reported fair value measurements.


FINANCIAL STATEMENTS			FAIR VALUE MEASUREMENTS

Investments in debt securities

Most investments in debt securities are valued using Level 2 measurements because the valuations use interest rate curves and credit spreads applied to the terms of the debt instrument (maturity and coupon interest rate) and consider the counterparty credit rating. If the market for a particular fixed-income security is relatively inactive or illiquid, the measurement is Level 3.

Commodity derivatives

Commodity derivatives with clearinghouses are classified as Level 1. Commodity derivatives with observable forward curves are classified as Level 2. If forward price curves are not observable for the full term of the contract and the unobservable period had more than an insignificant impact on the valuation, the commodity derivative is classified as Level 3. In isolation, increases (decreases) in natural gas forward prices result in favorable (unfavorable) fair value adjustments for natural gas purchase contracts; and increases (decreases) in electricity forward prices result in unfavorable (favorable) fair value adjustments for electricity sales contracts. Duke Energy regularly evaluates and validates pricing inputs used to estimate the fair value of certain commodity contracts by a market participant price verification procedure. This procedure provides a comparison of internal forward commodity curves to market participant generated curves.

Interest rate derivatives

Most over-the-counter interest rate contract derivatives are valued using financial models that utilize observable inputs for similar instruments and are classified as Level 2. Inputs include forward interest rate curves, notional amounts, interest rates and credit quality of the counterparties. Derivatives related to interest rate risk for the Commercial Renewables Disposal Groups are now classified as held for sale and are excluded from the following disclosures. See Note 2 for further information.

Foreign currency derivatives

Most over-the-counter foreign currency derivatives are valued using financial models that utilize observable inputs for similar instruments and are classified as Level 2. Inputs include forward foreign currency rate curves, notional amounts, foreign currency rates and credit quality of the counterparties.

Other fair value considerations

See Note 12 in Duke Energy's Annual Report on Form 10-K for the year ended December 31, 2022, for a discussion of the valuation of goodwill and intangible assets. Also, see Note 8 for further information on the annual impairment test as of August 31, 2023.

DUKE ENERGY

The following tables provide recorded balances for assets and liabilities measured at fair value on a recurring basis on the Condensed Consolidated Balance Sheets. Derivative amounts in the tables below for all Duke Energy Registrants exclude cash collateral, which is disclosed in Note 10. See Note 11 for additional information related to investments by major security type for the Duke Energy Registrants.


	September 30, 2023
(in millions)	Total Fair Value		Level 1		Level 2		Level 3		Not Categorized
NDTF cash and cash equivalents	$	160	$	160	$	—	$	—	$	—
NDTF equity securities	6,530		6,491		—		—		39
NDTF debt securities	2,569		755		1,814		—		—
Other equity securities	141		141		—		—		—
Other debt securities	255		40		215		—		—
Other cash and cash equivalents	36		36		—		—		—

Derivative assets	525		2		493		30		—
Total assets	10,216		7,625		2,522		30		39

Derivative liabilities	(520)		(4)		(516)		—		—
Net assets	$	9,696	$	7,621	$	2,006	$	30	$	39


	December 31, 2022
(in millions)	Total Fair Value		Level 1		Level 2		Level 3		Not Categorized
NDTF cash and cash equivalents	$	215	$	215	$	—	$	—	$	—
NDTF equity securities	5,871		5,829		—		—		42
NDTF debt securities	2,550		780		1,770		—		—
Other equity securities	128		128		—		—		—
Other debt securities	265		55		210		—		—
Other cash and cash equivalents	22		22		—		—		—
Derivative assets	795		1		760		34		—
Total assets	9,846		7,030		2,740		34		42

Derivative liabilities	(437)		(16)		(421)		—		—
Net assets	$	9,409	$	7,014	$	2,319	$	34	$	42


FINANCIAL STATEMENTS			FAIR VALUE MEASUREMENTS

The following table provides reconciliations of beginning and ending balances of assets and liabilities measured at fair value using Level 3 measurements.


	Derivatives (net)
	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions)	2023		2022		2023		2022
Balance at beginning of period	$	41	$	89	$	34	$	24


Purchases, sales, issuances and settlements:
Purchases	3		—		50		77


Settlements	(18)		(21)		(76)		(13)

Total gains (losses) included on the Condensed Consolidated Balance Sheet	4		(8)		22		(28)
Balance at end of period	$	30	$	60	$	30	$	60

DUKE ENERGY CAROLINAS

The following tables provide recorded balances for assets and liabilities measured at fair value on a recurring basis on the Condensed Consolidated Balance Sheets.


	September 30, 2023
(in millions)	Total Fair Value		Level 1		Level 2		Not Categorized
NDTF cash and cash equivalents	$	59	$	59	$	—	$	—
NDTF equity securities	3,767		3,728		—		39
NDTF debt securities	1,329		320		1,009		—

Derivative assets	93		—		93		—
Total assets	5,248		4,107		1,102		39
Derivative liabilities	(204)		—		(204)		—
Net assets	$	5,044	$	4,107	$	898	$	39


	December 31, 2022
(in millions)	Total Fair Value		Level 1		Level 2		Not Categorized
NDTF cash and cash equivalents	$	117	$	117	$	—	$	—
NDTF equity securities	3,367		3,325		—		42
NDTF debt securities	1,298		323		975		—

Derivative assets	330		—		330		—
Total assets	5,112		3,765		1,305		42
Derivative liabilities	(127)		—		(127)		—
Net assets	$	4,985	$	3,765	$	1,178	$	42

PROGRESS ENERGY

The following table provides recorded balances for assets and liabilities measured at fair value on a recurring basis on the Condensed Consolidated Balance Sheets.


	September 30, 2023						December 31, 2022
(in millions)	Total Fair Value		Level 1		Level 2		Total Fair Value		Level 1		Level 2
NDTF cash and cash equivalents	$	101	$	101	$	—	$	98	$	98	$	—
NDTF equity securities	2,763		2,763		—		2,504		2,504		—
NDTF debt securities	1,240		435		805		1,252		457		795
Other debt securities	23		—		23		25		—		25
Other cash and cash equivalents	8		8		—		11		11		—
Derivative assets	196		—		196		248		—		248
Total assets	4,331		3,307		1,024		4,138		3,070		1,068

Derivative liabilities	(137)		—		(137)		(66)		—		(66)
Net assets	$	4,194	$	3,307	$	887	$	4,072	$	3,070	$	1,002


FINANCIAL STATEMENTS			FAIR VALUE MEASUREMENTS

DUKE ENERGY PROGRESS

The following table provides recorded balances for assets and liabilities measured at fair value on a recurring basis on the Condensed Consolidated Balance Sheets.


	September 30, 2023						December 31, 2022
(in millions)	Total Fair Value		Level 1		Level 2		Total Fair Value		Level 1		Level 2
NDTF cash and cash equivalents	$	62	$	62	$	—	$	56	$	56	$	—
NDTF equity securities	2,663		2,663		—		2,411		2,411		—
NDTF debt securities	971		226		745		963		225		738

Other cash and cash equivalents	4		4		—		9		9		—
Derivative assets	79		—		79		230		—		230
Total assets	3,779		2,955		824		3,669		2,701		968
Derivative liabilities	(137)		—		(137)		(48)		—		(48)
Net assets	$	3,642	$	2,955	$	687	$	3,621	$	2,701	$	920

DUKE ENERGY FLORIDA

The following table provides recorded balances for assets and liabilities measured at fair value on a recurring basis on the Condensed Consolidated Balance Sheets.


	September 30, 2023						December 31, 2022
(in millions)	Total Fair Value		Level 1		Level 2		Total Fair Value		Level 1		Level 2
NDTF cash and cash equivalents	$	39	$	39	$	—	$	42	$	42	$	—
NDTF equity securities	100		100		—		93		93		—
NDTF debt securities	269		209		60		289		232		57
Other debt securities	23		—		23		25		—		25
Other cash and cash equivalents	1		1		—		1		1		—
Derivative assets	117		—		117		17		—		17
Total assets	549		349		200		467		368		99

Derivative liabilities	—		—		—		(19)		—		(19)
Net assets	$	549	$	349	$	200	$	448	$	368	$	80

DUKE ENERGY OHIO

The recorded balances for assets and liabilities measured at fair value on a recurring basis on the Condensed Consolidated Balance Sheets were not material at September 30, 2023, and December 31, 2022.

DUKE ENERGY INDIANA

The following table provides recorded balances for assets and liabilities measured at fair value on a recurring basis on the Condensed Consolidated Balance Sheets.


	September 30, 2023								December 31, 2022
(in millions)	Total Fair Value		Level 1		Level 2		Level 3		Total Fair Value		Level 1		Level 2		Level 3
Other equity securities	$	88	$	88	$	—	$	—	$	79	$	79	$	—	$	—
Other debt securities	59		—		59		—		60		—		60		—
Other cash and cash equivalents	3		3		—		—		1		1		—		—
Derivative assets	55		1		27		27		110		—		81		29
Total assets	205		92		86		27		250		80		141		29
Derivative liabilities	(4)		(4)		—		—		(16)		(16)		—		—
Net assets	$	201	$	88	$	86	$	27	$	234	$	64	$	141	$	29


FINANCIAL STATEMENTS			FAIR VALUE MEASUREMENTS

The following table provides a reconciliation of beginning and ending balances of assets and liabilities measured at fair value using Level 3 measurements.


	Derivatives (net)
	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions)	2023		2022		2023		2022
Balance at beginning of period	$	37	$	84	$	29	$	22


Purchases, sales, issuances and settlements:
Purchases	—		—		42		74


Settlements	(14)		(20)		(70)		(10)

Total gains (losses) included on the Condensed Consolidated Balance Sheet	4		(8)		26		(30)
Balance at end of period	$	27	$	56	$	27	$	56

PIEDMONT

The following table provides recorded balances for assets and liabilities measured at fair value on a recurring basis on the Condensed Consolidated Balance Sheets.


	September 30, 2023						December 31, 2022
(in millions)	Total Fair Value		Level 1		Level 2			Total Fair Value		Level 1		Level 2


Derivative assets	$	1	$	1	$	—		$	—	$	—	$	—

Derivative liabilities	(145)		—		(145)			(168)		—		(168)
Net (liabilities) assets	$	(144)	$	1	$	(145)		$	(168)	$	—	$	(168)

QUANTITATIVE INFORMATION ABOUT UNOBSERVABLE INPUTS

The following tables include quantitative information about the Duke Energy Registrants' derivatives classified as Level 3.


	September 30, 2023
										Weighted
	Fair Value									Average
Investment Type	(in millions)		Valuation Technique	Unobservable Input	Range					Range


Duke Energy Ohio
FTRs	$	3	RTO auction pricing	FTR price – per MWh	$	0.43	-	$	2.07	$	0.77
Duke Energy Indiana
FTRs	27		RTO auction pricing	FTR price – per MWh	(1.64)		-	12.51		1.90


Duke Energy
Total Level 3 derivatives	$	30


	December 31, 2022
										Weighted
	Fair Value									Average
Investment Type	(in millions)		Valuation Technique	Unobservable Input	Range					Range






















Duke Energy Ohio


FTRs	$	5	RTO auction pricing	FTR price – per MWh	$	0.89	-	$	6.25	$	3.35

Duke Energy Indiana
FTRs	29		RTO auction pricing	FTR price – per MWh	0.09		-	21.79		2.74


Duke Energy
Total Level 3 derivatives	$	34


FINANCIAL STATEMENTS			FAIR VALUE MEASUREMENTS

OTHER FAIR VALUE DISCLOSURES

The fair value and book value of long-term debt, including current maturities, is summarized in the following table. Debt related to the Commercial Renewables Disposal Groups is now classified as held for sale and is excluded from the following disclosures. See Note 2 for further information. Estimates determined are not necessarily indicative of amounts that could have been settled in current markets. Fair value of long-term debt uses Level 2 measurements.


	September 30, 2023				December 31, 2022
(in millions)	Book Value		Fair Value		Book Value		Fair Value
Duke Energy(a)	$	75,387	$	65,070	$	69,751	$	61,986
Duke Energy Carolinas	15,995		13,973		14,266		12,943
Progress Energy	23,281		20,417		22,439		20,467
Duke Energy Progress	11,718		9,808		11,087		9,689
Duke Energy Florida	9,920		8,892		9,709		8,991
Duke Energy Ohio	3,692		3,264		3,245		2,927
Duke Energy Indiana	4,504		3,874		4,307		3,913
Piedmont	3,713		3,123		3,363		2,940

(a)Book value of long-term debt includes $1.1 billion and $1.2 billion at September 30, 2023, and December 31, 2022, respectively, of net unamortized debt discount and premium of purchase accounting adjustments related to the mergers with Progress Energy and Piedmont that are excluded from fair value of long-term debt.

At both September 30, 2023, and December 31, 2022, fair value of cash and cash equivalents, accounts and notes receivable, accounts payable, notes payable and commercial paper and nonrecourse notes payable of VIEs are not materially different from their carrying amounts because of the short-term nature of these instruments and/or because the stated rates approximate market rates.

13. VARIABLE INTEREST ENTITIES

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.

No financial support was provided to any of the consolidated VIEs during the nine months ended September 30, 2023, and the year ended December 31, 2022, or is expected to be provided in the future that was not previously contractually required.

Receivables Financing – DERF/DEPR/DEFR

DERF, DEPR and 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 LLCs 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, which generally exclude receivables past due more than a predetermined number of days and reserves for expected past-due balances. The sole source of funds to satisfy the related debt obligations is cash collections from the receivables. Amounts borrowed under the DERF and DEPR credit facilities are reflected on the Condensed Consolidated Balance Sheets as Long-Term Debt. Amounts borrowed under the DEFR credit facility are reflected on the Condensed Consolidated Balance Sheets as Current maturities of 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 the 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, which generally exclude receivables past due more than a predetermined number of days and reserves for expected past-due balances. 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 approximately 75% cash and 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.


FINANCIAL STATEMENTS			VARIABLE INTEREST ENTITIES

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 is not held 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.

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	February 2025		January 2025		April 2025		April 2024
Credit facility amount	$	350	$	500	$	400	$	325
Amounts borrowed at September 30, 2023	336		500		400		325
Amounts borrowed at December 31, 2022	350		471		400		250
Restricted Receivables at September 30, 2023	619		1,028		831		758
Restricted Receivables at December 31, 2022	917		928		793		490

Nuclear Asset-Recovery Bonds – Duke Energy Florida Project Finance

Duke Energy Florida Project Finance, LLC (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 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, 2023		December 31, 2022
Receivables of VIEs	$	8	$	6
Regulatory Assets: Current	58		55
Current Assets: Other	24		41
Other Noncurrent Assets: Regulatory assets	816		826
Current Liabilities: Other	2		9
Current maturities of long-term debt	58		56
Long-Term Debt	832		890

Storm Recovery Bonds – Duke Energy Carolinas NC Storm Funding and Duke Energy Progress NC Storm Funding

Duke Energy Carolinas NC Storm Funding, LLC (DECNCSF) and Duke Energy Progress NC Storm Funding, LLC (DEPNCSF) are bankruptcy remote, wholly owned special purpose subsidiaries of Duke Energy Carolinas and Duke Energy Progress, respectively. These entities were formed in 2021 for the sole purpose of issuing storm recovery bonds to finance certain of Duke Energy Carolinas’ and Duke Energy Progress’ unrecovered regulatory assets related to storm costs.

In November 2021, DECNCSF and DEPNCSF issued $237 million and $770 million of senior secured bonds, respectively and used the proceeds to acquire storm recovery property from Duke Energy Carolinas and Duke Energy Progress. The storm recovery property was created by state legislation and NCUC financing orders for the purpose of financing storm costs incurred in 2018 and 2019. The storm recovery property acquired includes the right to impose, bill, collect and adjust a non-bypassable charge from all Duke Energy Carolinas’ and Duke Energy Progress’ retail customers until the bonds are paid in full and all financing costs have been recovered. The storm recovery bonds are secured by the storm recovery property and cash collections from the storm recovery charges are the sole source of funds to satisfy the debt obligation. The bondholders have no recourse to Duke Energy Carolinas or Duke Energy Progress.

DECNCSF and DEPNCSF are considered VIEs primarily because the equity capitalization is insufficient to support their operations. Duke Energy Carolinas and Duke Energy Progress have the power to direct the significant activities of the VIEs as described above and therefore Duke Energy Carolinas and Duke Energy Progress are considered the primary beneficiaries and consolidate DECNCSF and DEPNCSF, respectively.


FINANCIAL STATEMENTS			VARIABLE INTEREST ENTITIES

The following table summarizes the impact of these VIEs on Duke Energy Carolinas’ and Duke Energy Progress’ Consolidated Balance Sheets.


	September 30, 2023				December 31, 2022
	Duke Energy		Duke Energy		Duke Energy		Duke Energy
(in millions)	Carolinas		Progress		Carolinas		Progress
Regulatory Assets: Current	$	12	$	39	$	12	$	39
Current Assets: Other	5		16		8		29
Other Noncurrent Assets: Regulatory assets	199		653		208		681
Other Noncurrent Assets: Other	1		2		1		2

Current Liabilities: Other	1		4		3		8
Current maturities of long-term debt	11		34		10		34
Long-Term Debt	208		680		219		714

NON-CONSOLIDATED VIEs

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


	September 30, 2023
	Duke Energy		Duke		Duke
	Natural Gas		Energy		Energy
(in millions)	Investments		Ohio		Indiana
Receivables from affiliated companies	$	—	$	122	$	161

Investments in equity method unconsolidated affiliates	61		—		—
Other noncurrent assets	43		—		—
Total assets	$	104	$	122	$	161

Other current liabilities	18		—		—

Other noncurrent liabilities	12		—		—
Total liabilities	$	30	$	—	$	—
Net assets	$	74	$	122	$	161


	December 31, 2022
	Duke Energy		Duke		Duke
	Natural Gas		Energy		Energy
(in millions)	Investments		Ohio		Indiana
Receivables from affiliated companies	$	—	$	198	$	317

Investments in equity method unconsolidated affiliates	43		—		—
Other noncurrent assets	45		—		—
Total assets	$	88	$	198	$	317

Other current liabilities	59		—		—

Other noncurrent liabilities	47		—		—
Total liabilities	$	106	$	—	$	—
Net (liabilities) assets	$	(18)	$	198	$	317

The Duke Energy Registrants are not aware of any situations where the maximum exposure to loss significantly exceeds the carrying values shown above.

Natural Gas Investments

Duke Energy has investments in various joint ventures including pipeline and renewable natural gas projects. 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.

CRC

See discussion under Consolidated VIEs for additional information related to CRC.

Amounts included in Receivables from affiliated companies in the above table for Duke Energy Ohio and Duke Energy Indiana reflect their retained interest in receivables sold to CRC. These subordinated notes held by Duke Energy Ohio and Duke Energy Indiana are stated at fair value.


FINANCIAL STATEMENTS			VARIABLE INTEREST ENTITIES

The following table shows the gross and net receivables sold.


	Duke Energy Ohio				Duke Energy Indiana
(in millions)	September 30, 2023		December 31, 2022		September 30, 2023		December 31, 2022
Receivables sold	$	334	$	423	$	330	$	508
Less: Retained interests	122		198		161		317
Net receivables sold	$	212	$	225	$	169	$	191

The following table shows sales and cash flows related to receivables sold.


		Duke Energy Ohio						Duke Energy Indiana
	Nine Months Ended						Nine Months Ended
	September 30,						September 30,
(in millions)			2023		2022				2023		2022
Sales
Receivables sold			$	1,973	$	1,869			$	2,453	$	2,646
Loss recognized on sale			25		11				29		15
Cash flows
Cash proceeds from receivables sold			$	2,024	$	1,757			$	2,580	$	2,465
Collection fees received			1		1				1		1
Return received on retained interests			15		6				19		9

Cash flows from sales of receivables are reflected within Cash Flows From Operating Activities and Cash Flows from Investing Activities on Duke Energy Ohio’s and Duke Energy Indiana’s Condensed Consolidated Statements of Cash Flows.

14. REVENUE

Duke Energy earns substantially all of its revenues through its reportable segments, EU&I and GU&I.

Electric Utilities and Infrastructure

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

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


	Remaining Performance Obligations
(in millions)	2023		2024		2025		2026		2027		Thereafter		Total

Progress Energy	$	15	$	70	$	7	$	7	$	7	$	36	$	142
Duke Energy Progress	2		8		—		—		—		—		10
Duke Energy Florida	13		62		7		7		7		36		132

Duke Energy Indiana	4		16		17		15		7		5		64

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

Gas Utilities and Infrastructure

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

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


	Remaining Performance Obligations
(in millions)	2023		2024		2025		2026		2027		Thereafter		Total

Piedmont	$	17	$	62	$	61	$	51	$	49	$	241	$	481


FINANCIAL STATEMENTS			REVENUE

Other

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

Disaggregated Revenues

Disaggregated revenues are presented as follows:


	Three Months Ended September 30, 2023
			Duke				Duke		Duke		Duke		Duke
(in millions)	Duke		Energy		Progress		Energy		Energy		Energy		Energy
By market or type of customer	Energy		Carolinas		Energy		Progress		Florida		Ohio		Indiana		Piedmont
Electric Utilities and Infrastructure
Residential	$	3,602	$	988	$	2,043	$	756	$	1,287	$	268	$	303	$	—
General	2,229		779		1,089		467		622		135		224		—
Industrial	912		395		298		203		95		28		190		—
Wholesale	647		141		422		364		58		12		71		—
Other revenues	285		75		175		100		75		24		56		—
Total Electric Utilities and Infrastructure revenue from contracts with customers	$	7,675	$	2,378	$	4,027	$	1,890	$	2,137	$	467	$	844	$	—

Gas Utilities and Infrastructure
Residential	$	152	$	—	$	—	$	—	$	—	$	73	$	—	$	80
Commercial	88		—		—		—		—		24		—		65
Industrial	26		—		—		—		—		4		—		23
Power Generation	—		—		—		—		—		—		—		23
Other revenues	28		—		—		—		—		4		—		8
Total Gas Utilities and Infrastructure revenue from contracts with customers	$	294	$	—	$	—	$	—	$	—	$	105	$	—	$	199

Other
Revenue from contracts with customers	$	8	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Total revenue from contracts with customers	$	7,977	$	2,378	$	4,027	$	1,890	$	2,137	$	572	$	844	$	199

Other revenue sources(a)	$	17	$	15	$	28	$	(4)	$	27	$	5	$	7	$	9
Total revenues	$	7,994	$	2,393	$	4,055	$	1,886	$	2,164	$	577	$	851	$	208


FINANCIAL STATEMENTS			REVENUE


	Three Months Ended September 30, 2022
			Duke				Duke		Duke		Duke		Duke
(in millions)	Duke		Energy		Progress		Energy		Energy		Energy		Energy
By market or type of customer	Energy		Carolinas		Energy		Progress		Florida		Ohio		Indiana		Piedmont
Electric Utilities and Infrastructure
Residential	$	3,250	$	887	$	1,719	$	670	$	1,049	$	249	$	396	$	—
General	2,077		686		947		419		528		150		291		—
Industrial	986		366		298		216		82		62		260		—
Wholesale	874		140		588		403		185		32		115		—
Other revenues	248		105		317		259		58		15		19		—
Total Electric Utilities and Infrastructure revenue from contracts with customers	$	7,435	$	2,184	$	3,869	$	1,967	$	1,902	$	508	$	1,081	$	—

Gas Utilities and Infrastructure
Residential	$	167	$	—	$	—	$	—	$	—	$	88	$	—	$	79
Commercial	108		—		—		—		—		26		—		82
Industrial	34		—		—		—		—		4		—		30
Power Generation	—		—		—		—		—		—		—		24
Other revenues	103		—		—		—		—		4		—		83
Total Gas Utilities and Infrastructure revenue from contracts with customers	$	412	$	—	$	—	$	—	$	—	$	122	$	—	$	298

Other
Revenue from contracts with customers	$	6	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Total revenue from contracts with customers	$	7,853	$	2,184	$	3,869	$	1,967	$	1,902	$	630	$	1,081	$	298

Other revenue sources(a)	$	(11)	$	(9)	$	12	$	2	$	5	$	(2)	$	14	$	8
Total revenues	$	7,842	$	2,175	$	3,881	$	1,969	$	1,907	$	628	$	1,095	$	306

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


FINANCIAL STATEMENTS			REVENUE


	Nine Months Ended September 30, 2023
			Duke				Duke		Duke		Duke		Duke
(in millions)	Duke		Energy		Progress		Energy		Energy		Energy		Energy
By market or type of customer	Energy		Carolinas		Energy		Progress		Florida		Ohio		Indiana		Piedmont
Electric Utilities and Infrastructure
Residential	$	9,193	$	2,527	$	5,019	$	1,902	$	3,117	$	710	$	937	$	—
General	5,936		1,974		2,844		1,194		1,650		411		706		—
Industrial	2,630		1,011		844		560		284		155		618		—
Wholesale	1,695		402		1,064		942		122		33		195		—
Other revenues	618		202		440		238		202		73		103		—
Total Electric Utilities and Infrastructure revenue from contracts with customers	$	20,072	$	6,116	$	10,211	$	4,836	$	5,375	$	1,382	$	2,559	$	—

Gas Utilities and Infrastructure
Residential	$	838	$	—	$	—	$	—	$	—	$	317	$	—	$	522
Commercial	421		—		—		—		—		113		—		309
Industrial	103		—		—		—		—		19		—		84
Power Generation	—		—		—		—		—		—		—		69
Other revenues	93		—		—		—		—		15		—		32
Total Gas Utilities and Infrastructure revenue from contracts with customers	$	1,455	$	—	$	—	$	—	$	—	$	464	$	—	$	1,016

Other
Revenue from contracts with customers	$	24	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Total Revenue from contracts with customers	$	21,551	$	6,116	$	10,211	$	4,836	$	5,375	$	1,846	$	2,559	$	1,016

Other revenue sources(a)	$	297	$	39	$	104	$	8	$	81	$	29	$	47	$	103
Total revenues	$	21,848	$	6,155	$	10,315	$	4,844	$	5,456	$	1,875	$	2,606	$	1,119


FINANCIAL STATEMENTS			REVENUE


	Nine Months Ended September 30, 2022
			Duke				Duke		Duke		Duke		Duke
(in millions)	Duke		Energy		Progress		Energy		Energy		Energy		Energy
By market or type of customer	Energy		Carolinas		Energy		Progress		Florida		Ohio		Indiana		Piedmont
Electric Utilities and Infrastructure
Residential	$	8,642	$	2,454	$	4,487	$	1,824	$	2,663	$	656	$	1,046	$	—
General	5,498		1,796		2,562		1,114		1,448		377		760		—
Industrial	2,582		938		842		594		248		130		672		—
Wholesale	2,129		356		1,388		1,033		355		90		296		—
Other revenues	652		308		775		608		167		56		6		—
Total Electric Utilities and Infrastructure revenue from contracts with customers	$	19,503	$	5,852	$	10,054	$	5,173	$	4,881	$	1,309	$	2,780	$	—

Gas Utilities and Infrastructure
Residential	$	936	$	—	$	—	$	—	$	—	$	331	$	—	$	605
Commercial	504		—		—		—		—		128		—		376
Industrial	125		—		—		—		—		17		—		108
Power Generation	—		—		—		—		—		—		—		71
Other revenues	284		—		—		—		—		16		—		220
Total Gas Utilities and Infrastructure revenue from contracts with customers	$	1,849	$	—	$	—	$	—	$	—	$	492	$	—	$	1,380

Other
Revenue from contracts with customers	$	21	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Total Revenue from contracts with customers	$	21,373	$	5,852	$	10,054	$	5,173	$	4,881	$	1,801	$	2,780	$	1,380

Other revenue sources(a)	$	44	$	(8)	$	33	$	9	$	9	$	10	$	55	$	41
Total revenues	$	21,417	$	5,844	$	10,087	$	5,182	$	4,890	$	1,811	$	2,835	$	1,421


FINANCIAL STATEMENTS			REVENUE

The following table presents the reserve for credit losses for trade and other receivables.


	Three Months Ended September 30, 2022 and 2023
			Duke				Duke		Duke		Duke		Duke
	Duke		Energy		Progress		Energy		Energy		Energy		Energy
(in millions)	Energy		Carolinas		Energy		Progress		Florida		Ohio		Indiana		Piedmont
Balance at June 30, 2022	$	135	$	52	$	52	$	31	$	21	$	4	$	3	$	15
Write-Offs	(49)		(19)		(26)		(11)		(15)		—		—		(4)
Credit Loss Expense	37		10		20		5		15		2		1		3
Other Adjustments	51		19		21		16		5		—		—		—
Balance at September 30, 2022	$	174	$	62	$	67	$	41	$	26	$	6	$	4	$	14

Balance at June 30, 2023	$	199	$	57	$	73	$	43	$	30	$	8	$	4	$	13
Write-Offs	(36)		(14)		(20)		(11)		(8)		—		—		(5)
Credit Loss Expense	23		5		15		2		13		—		1		2
Other Adjustments	17		8		9		10		(1)		—		—		—
Balance at September 30, 2023	$	203	$	56	$	77	$	44	$	34	$	8	$	5	$	10

	Nine Months Ended September 30, 2022 and 2023
			Duke				Duke		Duke		Duke		Duke
	Duke		Energy		Progress		Energy		Energy		Energy		Energy
(in millions)	Energy		Carolinas		Energy		Progress		Florida		Ohio		Indiana		Piedmont
Balance at December 31, 2021	$	121	$	42	$	36	$	21	$	16	$	4	$	3	$	15

Write-Offs	(103)		(44)		(45)		(18)		(28)		—		—		(10)
Credit Loss Expense	81		23		39		11		28		2		1		9
Other Adjustments	75		41		37		27		10		—		—		—
Balance at September 30, 2022	$	174	$	62	$	67	$	41	$	26	$	6	$	4	$	14

Balance at December 31, 2022	$	216	$	68	$	81	$	44	$	36	$	6	$	4	$	14
Write-Offs	(121)		(54)		(60)		(30)		(28)		—		—		(11)
Credit Loss Expense	62		18		33		7		26		2		1		7
Other Adjustments	46		24		23		23		—		—		—		—
Balance at September 30, 2023	$	203	$	56	$	77	$	44	$	34	$	8	$	5	$	10

Trade and other receivables are evaluated based on an estimate of the risk of loss over the life of the receivable and current and historical conditions using supportable assumptions. Management evaluates the risk of loss for trade and other receivables by comparing the historical write-off amounts to total revenue over a specified period. Historical loss rates are adjusted due to the impact of current conditions, as well as forecasted conditions over a reasonable time period. The calculated write-off rate can be applied to the receivable balance for which an established reserve does not already exist. Management reviews the assumptions and risk of loss periodically for trade and other receivables.

The aging of trade receivables is presented in the table below.


	September 30, 2023
			Duke				Duke		Duke		Duke		Duke
	Duke		Energy		Progress		Energy		Energy		Energy		Energy
(in millions)	Energy		Carolinas		Energy		Progress		Florida		Ohio		Indiana		Piedmont
Unbilled Revenue(a)(b)	$	977	$	356	$	333	$	206	$	127	$	2	$	27	$	8
Current	2,538		795		1,233		658		573		55		54		83
1-31 days past due	258		71		121		44		77		5		10		5
31-61 days past due	114		31		57		38		19		2		5		5
61-91 days past due	53		19		21		7		14		1		2		3
91+ days past due	234		60		71		24		47		37		24		5
Deferred Payment Arrangements(c)	104		31		50		27		23		3		—		—
Trade and Other Receivables	$	4,278	$	1,363	$	1,886	$	1,004	$	880	$	105	$	122	$	109


FINANCIAL STATEMENTS			REVENUE


	December 31, 2022
			Duke				Duke		Duke		Duke		Duke
	Duke		Energy		Progress		Energy		Energy		Energy		Energy
(in millions)	Energy		Carolinas		Energy		Progress		Florida		Ohio		Indiana		Piedmont
Unbilled Revenue(a)(b)	$	1,457	$	486	$	355	$	232	$	123	$	20	$	28	$	160
Current	2,347		577		1,059		637		417		15		52		265
1-31 days past due	261		96		60		15		45		5		17		15
31-61 days past due	123		23		61		49		12		6		2		3
61-91 days past due	74		25		18		9		9		3		11		2
91+ days past due	209		70		74		27		47		26		6		4
Deferred Payment Arrangements(c)	160		57		62		35		27		4		—		1
Trade and Other Receivables	$	4,631	$	1,334	$	1,689	$	1,004	$	680	$	79	$	116	$	450

(a)Unbilled revenues are recognized by applying customer billing rates to the estimated volumes of energy or natural gas delivered but not yet billed and are included within Receivables and Receivables of VIEs on the Condensed Consolidated Balance Sheets.

(b)Duke Energy Ohio and Duke Energy Indiana sell, on a revolving basis, nearly all of their retail accounts receivable, including receivables for unbilled revenues, to an affiliate, CRC, and account for the transfers of receivables as sales. Accordingly, the receivables sold are not reflected on the Condensed Consolidated Balance Sheets of Duke Energy Ohio and Duke Energy Indiana. See Note 13 for further information. These receivables for unbilled revenues are $95 million and $156 million for Duke Energy Ohio and Duke Energy Indiana, respectively, as of September 30, 2023, and $148 million and $260 million for Duke Energy Ohio and Duke Energy Indiana, respectively, as of December 31, 2022.

(c)Due to ongoing financial hardships impacting customers, Duke Energy has permitted customers to defer payment of past-due amounts through installment payment plans.

15. STOCKHOLDERS' EQUITY

Basic EPS is computed by dividing net income available to Duke Energy common stockholders, as adjusted for distributed and undistributed earnings allocated to participating securities and accumulated preferred dividends, by the weighted average number of common shares outstanding during the period. Diluted EPS is computed by dividing net income available to Duke Energy common stockholders, as adjusted for distributed and undistributed earnings allocated to participating securities and accumulated preferred dividends, by the diluted weighted average number of common shares outstanding during the period. Diluted EPS reflects the potential dilution that could occur if securities or other agreements to issue common stock, such as equity forward sale agreements or convertible debt, were exercised or settled. Duke Energy applies the if-converted method for calculating any potential dilutive effect of the conversion of the outstanding convertible notes on diluted EPS, if applicable. Duke Energy’s participating securities are restricted stock units that are entitled to dividends declared on Duke Energy common stock during the restricted stock unit’s vesting periods. Dividends declared on preferred stock are recorded on the Condensed Consolidated Statements of Operations as a reduction of net income to arrive at net income available to Duke Energy common stockholders. Dividends accumulated on preferred stock are an adjustment to net income used in the calculation of basic and diluted EPS.


FINANCIAL STATEMENTS			STOCKHOLDERS' EQUITY

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


	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions, except per share amounts)	2023		2022		2023		2022
Net Income available to Duke Energy common stockholders	$	1,213	$	1,383	$	1,744	$	3,094
Less: (Loss) Income from discontinued operations attributable to Duke Energy common stockholders	(190)		23		(1,283)		62
Accumulated preferred stock dividends adjustment	12		12		12		12
Less: Impact of participating securities	2		1		4		2
Income from continuing operations available to Duke Energy common stockholders	$	1,413	$	1,371	$	3,035	$	3,042

(Loss) Income from discontinued operations, net of tax	$	(152)	$	3	$	(1,316)	$	(30)
Add: (Income) Loss attributable to NCI	(38)		20		33		92
(Loss) Income from discontinued operations attributable to Duke Energy common stockholders	$	(190)	$	23	$	(1,283)	$	62

Weighted average common shares outstanding – basic and diluted	771		770		771		770


EPS from continuing operations available to Duke Energy common stockholders
Basic and diluted(a)	$	1.83	$	1.78	$	3.94	$	3.95

(Loss) Earnings Per Share from discontinued operations attributable to Duke Energy common stockholders
Basic and diluted(a)	$	(0.24)	$	0.03	$	(1.67)	$	0.08
Potentially dilutive items excluded from the calculation(b)	2		2		2		2
Dividends declared per common share	$	1.025	$	1.005	$	3.035	$	2.975
Dividends declared on Series A preferred stock per depositary share(c)	$	0.359	$	0.359	$	1.078	$	1.078
Dividends declared on Series B preferred stock per share(d)	$	24.375	$	24.375	$	48.750	$	48.750

(a)For the periods presented subsequent to issuance in April 2023, the convertible notes were excluded from the calculations of diluted EPS because the effect was antidilutive.

(b)Performance stock awards were not included in the dilutive securities calculation because the performance measures related to the awards had not been met.

(c)5.75% Series A Cumulative Redeemable Perpetual Preferred Stock dividends are payable quarterly in arrears on the 16th day of March, June, September and December. The preferred stock has a $25 liquidation preference per depositary share.

(d)4.875% Series B Fixed-Rate Reset Cumulative Redeemable Perpetual Preferred Stock dividends are payable semiannually in arrears on the 16th day of March and September. The preferred stock has a $1,000 liquidation preference per share.

16. EMPLOYEE BENEFIT PLANS

DEFINED BENEFIT RETIREMENT PLANS

Duke Energy and certain subsidiaries maintain, and the Subsidiary Registrants participate in, qualified and non-qualified, non-contributory defined benefit retirement plans. Duke Energy's policy is to fund amounts on an actuarial basis to provide assets sufficient to meet benefit payments to be paid to plan participants.

The following table includes information related to the Duke Energy Registrants' contributions to its qualified defined benefit pension plans.


	Nine Months Ended September 30, 2023 and 2022
			Duke				Duke		Duke		Duke		Duke
	Duke		Energy		Progress		Energy		Energy		Energy		Energy
(in millions)	Energy		Carolinas		Energy		Progress		Florida		Ohio		Indiana		Piedmont
Contributions made:
2023	$	100	$	26	$	22	$	13	$	9	$	5	$	8	$	3
2022	$	58	$	15	$	13	$	8	$	5	$	3	$	5	$	2


FINANCIAL STATEMENTS			EMPLOYEE BENEFIT PLANS

QUALIFIED PENSION PLANS

The following tables include the components of net periodic pension costs for qualified pension plans.


	Three Months Ended September 30, 2023
			Duke				Duke		Duke		Duke		Duke
	Duke		Energy		Progress		Energy		Energy		Energy		Energy
(in millions)	Energy		Carolinas		Energy		Progress		Florida		Ohio		Indiana		Piedmont
Service cost	$	28	$	9	$	9	$	5	$	3	$	1	$	1	$	1
Interest cost on projected benefit obligation	86		21		26		12		14		4		6		2
Expected return on plan assets	(147)		(40)		(50)		(24)		(26)		(6)		(10)		(5)
Amortization of actuarial loss	2		—		1		—		1		—		1		—
Amortization of prior service credit	(3)		—		—		—		—		—		—		(1)
Amortization of settlement charges	5		3		1		1		—		—		—		1
Net periodic pension costs	$	(29)	$	(7)	$	(13)	$	(6)	$	(8)	$	(1)	$	(2)	$	(2)


	Three Months Ended September 30, 2022
			Duke				Duke		Duke		Duke		Duke
	Duke		Energy		Progress		Energy		Energy		Energy		Energy
(in millions)	Energy		Carolinas		Energy		Progress		Florida		Ohio		Indiana		Piedmont
Service cost	$	39	$	12	$	11	$	6	$	4	$	1	$	3	$	1
Interest cost on projected benefit obligation	58		14		19		9		10		3		4		2
Expected return on plan assets	(140)		(38)		(46)		(22)		(24)		(6)		(9)		(6)
Amortization of actuarial loss	24		5		6		3		3		2		3		2
Amortization of prior service credit	(5)		(1)		—		—		—		—		—		(2)
Amortization of settlement charges	14		3		5		4		1		2		1		2
Net periodic pension costs	$	(10)	$	(5)	$	(5)	$	—	$	(6)	$	2	$	2	$	(1)


	Nine Months Ended September 30, 2023
			Duke				Duke		Duke		Duke		Duke
	Duke		Energy		Progress		Energy		Energy		Energy		Energy
(in millions)	Energy		Carolinas		Energy		Progress		Florida		Ohio		Indiana		Piedmont
Service cost	$	87	$	28	$	25	$	15	$	10	$	2	$	4	$	3
Interest cost on projected benefit obligation	258		63		80		37		43		13		20		7
Expected return on plan assets	(441)		(120)		(149)		(70)		(78)		(18)		(30)		(15)
Amortization of actuarial loss	7		1		3		1		2		—		2		—
Amortization of prior service credit	(10)		—		—		—		—		—		(1)		(5)
Amortization of settlement charges	14		7		3		3		1		—		1		3
Net periodic pension costs	$	(85)	$	(21)	$	(38)	$	(14)	$	(22)	$	(3)	$	(4)	$	(7)


	Nine Months Ended September 30, 2022
			Duke				Duke		Duke		Duke		Duke
	Duke		Energy		Progress		Energy		Energy		Energy		Energy
(in millions)	Energy		Carolinas		Energy		Progress		Florida		Ohio		Indiana		Piedmont
Service cost	$	120	$	38	$	34	$	20	$	14	$	3	$	7	$	4
Interest cost on projected benefit obligation	175		41		55		25		30		9		14		6
Expected return on plan assets	(421)		(114)		(139)		(66)		(72)		(17)		(28)		(18)
Amortization of actuarial loss	71		15		19		10		9		4		8		5
Amortization of prior service credit	(14)		(3)		—		—		—		—		(1)		(6)
Amortization of settlement charges	18		6		6		5		1		2		1		2
Net periodic pension costs	$	(51)	$	(17)	$	(25)	$	(6)	$	(18)	$	1	$	1	$	(7)

NON-QUALIFIED PENSION PLANS

Net periodic pension costs for non-qualified pension plans were not material for the three and nine months ended September 30, 2023, and 2022.

OTHER POST-RETIREMENT BENEFIT PLANS

Net periodic costs for OPEB plans were not material for the three and nine months ended September 30, 2023, and 2022.


FINANCIAL STATEMENTS			INCOME TAXES

17. INCOME TAXES

EFFECTIVE TAX RATES

The ETRs from continuing operations for each of the Duke Energy Registrants are included in the following table.


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Duke Energy	2.8	%	10.1	%	9.0	%	8.6	%
Duke Energy Carolinas	4.9	%	5.2	%	8.0	%	6.3	%
Progress Energy	15.7	%	15.8	%	16.2	%	16.2	%
Duke Energy Progress	11.8	%	12.9	%	13.0	%	13.4	%
Duke Energy Florida	20.8	%	18.4	%	20.3	%	19.4	%
Duke Energy Ohio	14.9	%	14.2	%	15.8	%	(14.6)	%
Duke Energy Indiana	18.5	%	16.8	%	17.8	%	0.5	%
Piedmont	26.3	%	21.4	%	17.2	%	9.1	%

The decrease in the ETR for Duke Energy for the three months ended September 30, 2023, was primarily due to benefits associated with ongoing tax efficiency efforts, partially offset by a decrease in the amortization of excess deferred taxes. During the third quarter of 2023, the Company evaluated the deductibility of certain items spanning periods currently open under federal statute, including items related to interest on company-owned life insurance. As a result of this analysis, the Company recorded a favorable adjustment of approximately $120 million.

The increase in the ETR for Duke Energy Carolinas for the nine months ended September 30, 2023, was primarily due to a decrease in the amortization of excess deferred taxes.

The decrease in the ETR for Duke Energy Progress for the three months ending September 30, 2023, was primarily due to the amortization of excess deferred taxes in relation to lower pretax income.

The increase in the ETR for Duke Energy Florida for the three months ending September 30, 2023, was primarily due to a decrease in the amortization of excess deferred taxes, partially offset by an increase in production tax credits.

The increase in the ETR for Duke Energy Ohio for the nine months ended September 30, 2023, was primarily due to a decrease in the amortization of excess deferred taxes related to the MGP Settlement recorded in the prior year.

The increase in the ETR for Duke Energy Indiana for the three months ended September 30, 2023, was primarily due to the amortization of excess deferred taxes in relation to higher pretax income.

The increase in the ETR for Duke Energy Indiana for the nine months ended September 30, 2023, was primarily due to the coal ash impairment based on the Indiana Supreme Court Opinion and the associated amortization of excess deferred taxes recorded in the prior year.

The increase in the ETR for Piedmont for the three months ended September 30, 2023, was primarily due to the amortization of excess deferred taxes in relation to lower pretax losses.

The increase in the ETR for Piedmont for the nine months ended September 30, 2023, was primarily due to a decrease in the amortization of excess deferred taxes.

18. SUBSEQUENT EVENTS

For information on subsequent events related to dispositions, regulatory matters, commitments and contingencies, and debt and credit facilities, see Notes 2, 4, 5 and 6, respectively.


MD&A			DUKE ENERGY

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following combined Management’s Discussion and Analysis of Financial Condition and Results of Operations is separately filed by Duke Energy and Duke Energy Carolinas, Progress Energy, Duke Energy Progress, Duke Energy Florida, Duke Energy Ohio, Duke Energy Indiana and Piedmont. However, none of the registrants make any representation as to information related solely to Duke Energy or the Subsidiary Registrants of Duke Energy other than itself.

DUKE ENERGY

Duke Energy is an energy company headquartered in Charlotte, North Carolina. Duke Energy operates in the U.S. primarily through its subsidiaries, Duke Energy Carolinas, Duke Energy Progress, Duke Energy Florida, Duke Energy Ohio, Duke Energy Indiana and Piedmont. When discussing Duke Energy’s consolidated financial information, it necessarily includes the results of the Subsidiary Registrants, which along with Duke Energy are collectively referred to as the Duke Energy Registrants.

Management’s Discussion and Analysis should be read in conjunction with the Condensed Consolidated Financial Statements and Notes for the nine months ended September 30, 2023, and with Duke Energy’s Annual Report on Form 10-K for the year ended December 31, 2022.

Executive Overview

Advancing Our Clean Energy Transformation

During the nine months ended September 30, 2023, we continued to execute on our clean energy transformation, delivering strong, sustainable value for shareholders, customers, communities and employees.

•In November 2022, the Duke Energy Board of Directors approved pursuing the sale of the Commercial Renewables business, excluding the offshore wind contract for Carolina Long Bay. We entered into purchase and sale agreements with affiliates of Brookfield for the sale of the utility-scale solar and wind group in June 2023 and with affiliates of ArcLight for the distributed generation group in July 2023. Both transactions closed in October 2023. See Note 2 to the Condensed Consolidated Financial Statements, "Dispositions," for additional information.

•Renewable energy remains a critical component of our generation mix and we've continued to actively expand the use of these assets across our service territories. In June 2023, we announced an agreement with Ranger Power for up to 199 MW of solar power in Indiana. Pending regulatory approval, energy generated from this facility will be sold to Duke Energy Indiana and serve the equivalent of roughly 35,000 homes. In July 2023, we announced a new utility-scale solar panel installation in Kentucky. Located on the rooftop of a facility owned by Amazon, the site complements our emerging solar portfolio in the state and demonstrates our commitment to furthering the clean energy goals of both the Company and our customers.

•In March 2023, we began operating the largest battery system in North Carolina, an 11-MW project in Onslow County, which will operate in conjunction with an adjacent 13-MW solar facility located on a leased site within Marine Corps Base (MCB) Camp Lejeune. Both projects are connected to a Duke Energy substation and will be used to serve all Duke Energy Progress customers. As part of an ongoing collaboration with the Department of Defense, further work could enable the solar and battery systems to improve the resiliency of MCB Camp Lejeune against outages.

•In March 2023, Duke Energy Florida announced two new solar projects as part of Clean Energy Connection, the Company's community solar program. Once complete, each 74.9-MW solar facility will generate enough carbon-free electricity to power what would be the equivalent to around 23,000 homes. Additionally, in March 2023, Duke Energy Florida announced its first floating solar array pilot. The project will feature more than 1,800 floating solar modules and occupy approximately 2 acres of water surface on an existing cooling pond at the Duke Energy Hines Energy Complex in Bartow. The pilot is part of Duke Energy's Vision Florida program, which is designed to test innovative projects such as microgrids and battery energy storage, among others, to prepare the power grid for a clean energy future. We now operate 1,200 MW of solar in Florida, with plans to continue adding approximately 300 MW a year going forward.

•While transitioning to cleaner energy resources, affordability continues to be a focus for Duke Energy. Our cost reduction initiatives are grounded in our culture of safety and serving our customers with excellence, while maintaining our assets for the future. We’re leveraging digital innovation, data analytics, and process improvements to increase efficiency, making targeted capital investments to reduce maintenance costs, and reshaping our operations to streamline work and lower costs. Coming into 2023, we implemented a $300 million cost mitigation initiative to address cost pressures, primarily related to rising interest rates. These cost reductions are primarily focused on corporate and support areas, and remain on track.


MD&A			DUKE ENERGY

Regulatory Activity. During the nine months ended September 30, 2023, we continued to monitor developments while moving our regulatory strategy forward. See Note 4 to the Condensed Consolidated Financial Statements, "Regulatory Matters," for additional information.

•HB 951 provides the framework for many of the benefits of modernized regulatory constructs in North Carolina under the direction of the NCUC including PBR and MYRP. Duke Energy Progress filed its first rate case utilizing these benefits, including both PBR and MYRP, in North Carolina in October 2022, and reached partial settlements on key matters in April and May 2023. In August 2023, the NCUC issued a constructive order approving these partial settlements and Duke Energy Progress' PBR Application with certain modifications, marking the first implementation of an MYRP under the performance-based regulations authorized by HB 951 in North Carolina. Duke Energy Progress implemented revised Year 1 rates and residential decoupling on October 1, 2023.

•In January 2023, Duke Energy Carolinas filed a rate case in North Carolina that also incorporated elements of PBR and MYRP as allowed under HB 951. In August 2023, we reached partial settlements on key matters with the Public Staff, subject to the approval of the NCUC. We expect an order from the NCUC on the Duke Energy Carolinas rate case in the fourth quarter of this year.

•In the Midwest, we received a constructive order on our Duke Energy Kentucky electric rate case in October 2023. In August 2023, the PUCO approved recovery and true up of certain historical energy efficiency program costs in Ohio, with new rates effective September 1, 2023.

•In August 2023, we filed new resource plans in North Carolina and South Carolina. Between economic development success, population growth and increased adoption of electric vehicles, energy use by Duke Energy customers in the Carolinas is projected to grow by around 35,000 GWh over the next 15 years – more than the annual electric generation of Delaware, Maine and New Hampshire combined. These plans advance our energy transition while prioritizing reliability and affordability.

•In February 2023, the PSCSC approved a constructive comprehensive settlement with all parties in the Duke Energy Progress South Carolina rate case and Duke Energy Progress implemented new customer rates effective April 1, 2023. We also made progress on our South Carolina storm securitization filings, completing our petition for a financing order with the PSCSC in May 2023. The PSCSC approved a comprehensive settlement in September 2023 and issued its financing order in October 2023.

•In February 2023, the Indiana Court of Appeals issued an opinion finding certain coal ash related expenditures should be disallowed under a statute specific to federally mandated projects and also denied a petition for rehearing on the matter.

•As it relates to our natural gas businesses, in Duke Energy Ohio, we filed a stipulation on key matters in our base rate case with all parties except the OCC in April 2023. We received an order approving the stipulation in November 2023. In September 2023, the TPUC approved a settlement related to our Annual Review Mechanism in Tennessee, with adjusted rates effective October 1, 2023.

Matters Impacting Future Results

The matters discussed herein could materially impact the future operating results, financial condition and cash flows of the Duke Energy Registrants and Business Segments.

Regulatory Matters

Coal Ash Costs

Future spending of coal ash costs, including amounts recorded for depreciation and liability accretion, is expected to be recovered in future rate cases or rider filings. The majority of spend is expected to occur over the next 10 to 15 years.

Duke Energy Indiana has interpreted the Coal Combustion Residuals (CCR) rule to identify the coal ash basin sites impacted and has assessed the amounts of coal ash subject to the rule and a method of compliance. Interpretation of the requirements of the CCR rule is subject to further legal challenges and regulatory approvals, which could result in additional coal ash basin closure requirements, higher costs of compliance and greater AROs. Additionally, Duke Energy Indiana has retired facilities that are not subject to the CCR rule. Duke Energy Indiana may incur costs at these facilities to comply with environmental regulations or to mitigate risks associated with on-site storage of coal ash. In January 2022, Duke Energy Indiana received a letter from the EPA regarding application and interpretation of the CCR rule for some of the ash basins at its Gallagher Station. In response to the letter, Duke Energy Indiana has submitted revised closure plans for those basins to the Indiana Department of Environmental Management (IDEM). Those closure plans are pending review by IDEM. For more information, see Note 4 to the Condensed Consolidated Financial Statements, "Regulatory Matters."

Fuel Cost Recovery

As a result of rapidly rising commodity costs during 2022, including natural gas, fuel and purchased power prices in excess of amounts included in fuel-related revenues led to an increase in the under collection of fuel costs from customers in jurisdictions including Duke Energy Carolinas, Duke Energy Progress and Duke Energy Florida. These amounts have been deferred in regulatory assets and have impacted the cash flows of the registrants, including increased borrowings to temporarily finance related expenditures until recovery. Natural gas costs have stabilized in 2023 and the Duke Energy Registrants are making progress collecting deferred fuel balances. Regulatory filings have now been made for recovery of all remaining uncollected 2022 fuel costs. Across all jurisdictions, Duke Energy is currently on pace to recover $1.7 billion of deferred fuel costs in 2023, and expects deferred fuel balances to be back in line with historical norms by the end of 2024.

Commercial Renewables

In November 2022, Duke Energy committed to a plan to sell the Commercial Renewables Disposal Groups. The Commercial Renewables Disposal Groups were classified as held for sale and as discontinued operations in the fourth quarter of 2022. Duke Energy entered into purchase and sale agreements with affiliates of Brookfield in June 2023 for the sale of the utility-scale solar and wind group and with affiliates of ArcLight in July 2023 for the distributed generation group. Both transactions closed in October 2023 and proceeds from the sales are expected to be used for debt avoidance. Duke Energy expects to complete the disposition of the remaining assets by early 2024. For more information, see Note 2 to the Condensed Consolidated Financial Statements, "Dispositions."


MD&A			MATTERS IMPACTING FUTURE RESULTS

In February 2021, a severe winter storm impacted certain Commercial Renewables assets in Texas. Extreme weather conditions limited the ability for these solar and wind facilities to generate and sell electricity into the ERCOT market. Originally, Duke Energy (Parent) was named in multiple lawsuits arising out of this winter storm, but the plaintiffs have begun to dismiss Duke Energy (parent) from these lawsuits and have represented to the court that they will dismiss Duke Energy (Parent) from all such cases. The legal actions related to project companies in this matter transferred to affiliates of Brookfield in conjunction with the transaction closing in October 2023. For more information, see Note 5 to the Condensed Consolidated Financial Statements, "Commitments and Contingencies."

Supply Chain

In 2023, Duke Energy has experienced modest improvement in the stability of the markets for key materials purchased and used by the Company. The Company continues to monitor developments, including proposed federal regulations, that could disrupt or impact the Company's supply chain and, as a result, may impact Duke Energy's future financial results or the achievement of its clean energy goals.

Goodwill

The Duke Energy Registrants performed their annual goodwill impairment tests as of August 31, 2023, as described in Note 8 to the Condensed Consolidated Financial Statements, "Goodwill." As of August 31, 2023, all of Duke Energy Registrants' reporting units' estimated fair values materially exceeded the carrying values except for the GU&I reporting unit of Duke Energy Ohio. While no goodwill impairment charges were recorded in the third quarter of 2023, continued rising interest rates, and the related impact on the weighted average cost of capital, without timely or adequate updates to the regulated allowed return on equity or deteriorating economic conditions impacting GU&I's future cash flows or equity valuations of peer companies could impact the estimated fair value of GU&I, and goodwill impairment charges could be recorded in the future. The carrying value of goodwill within GU&I for Duke Energy Ohio was approximately $324 million as of September 30, 2023.

Other

Duke Energy is monitoring general market conditions, including the potential for continued rising interest rates, and evaluating the impact to its results of operations, financial position and cash flows in the future.

Results of Operations

Non-GAAP Measures

Management’s Discussion and Analysis includes financial information prepared in accordance with GAAP in the U.S., as well as certain non-GAAP financial measures, adjusted earnings and adjusted EPS, discussed below. Non-GAAP financial measures are numerical measures of financial performance, financial position or cash flows that excludes (or includes) amounts that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP. Non-GAAP financial measures should be viewed as a supplement to, and not a substitute for, financial measures presented in accordance with GAAP. Non-GAAP measures presented may not be comparable to similarly titled measures used by other companies because other companies may not calculate the measures in the same manner.

Management evaluates financial performance in part based on non-GAAP financial measures, including adjusted earnings and adjusted EPS. Adjusted earnings and adjusted EPS represent income from continuing operations available to Duke Energy Corporation common stockholders in dollar and per share amounts, adjusted for the dollar and per share impact of special items. As discussed below, special items represent certain charges and credits, which management believes are not indicative of Duke Energy's ongoing performance. The most directly comparable GAAP measures for adjusted earnings and adjusted EPS are GAAP Reported Earnings (Loss) and GAAP Reported Earnings (Loss) Per Share, respectively.

Special items included in the periods presented below include the following, which management believes do not reflect ongoing costs:

•For 2022, Regulatory Matters represents the net impact of charges related to the 2022 Indiana Supreme Court ruling on coal ash, and for 2023, it primarily represents impairment charges related to Duke Energy Carolinas' North Carolina rate case settlement and Duke Energy Progress' North Carolina rate case order.

Discontinued operations primarily includes the impairments on the sale of the Commercial Renewables business in the current year and results from Duke Energy's Commercial Renewables Disposal Groups.

Three Months Ended September 30, 2023, as compared to September 30, 2022

GAAP reported EPS was $1.59 for the third quarter of 2023 compared to $1.81 in the third quarter of 2022. In addition to the drivers below, GAAP reported EPS decreased primarily due to impairments on the sale of the Commercial Renewables business.

As discussed above, management also evaluates financial performance based on adjusted EPS. Duke Energy’s third quarter 2023 adjusted EPS was $1.94 compared to $1.78 for the third quarter of 2022. The increase in adjusted EPS was primarily due to ongoing tax efficiency efforts, growth from riders and other margin, rate case impacts and favorable weather, partially offset by higher interest expense and lower volumes.


MD&A			DUKE ENERGY

The following table reconciles non-GAAP measures, including adjusted EPS, to their most directly comparable GAAP measures.


	Three Months Ended September 30,
	2023				2022
(in millions, except per share amounts)	Earnings		EPS		Earnings		EPS

GAAP Reported Earnings/GAAP Reported EPS	$	1,213	$	1.59	$	1,383	$	1.81
Adjustments:



Regulatory Matters(a)	84		0.11		—		—

Discontinued Operations(b)	190		0.24		(22)		(0.03)
Adjusted Earnings/Adjusted EPS	$	1,487	$	1.94	$	1,361	$	1.78

(a)Net of $27 million tax benefit. $95 within Impairment of assets and other charges and $16 million within Operations, maintenance and other.

(b)Recorded in (Loss) Income from Discontinued Operations, net of tax, and Net (Income) Loss Attributable to Noncontrolling Interests.

Nine Months Ended September 30, 2023, as compared to September 30, 2022

GAAP Reported EPS was $2.27 for the nine months ended September 30, 2023, compared to $4.03 for the nine months ended September 30, 2022. In addition to the drivers below, GAAP reported EPS decreased primarily due to impairments on the sale of the Commercial Renewables business.

As discussed above, management also evaluates financial performance based on adjusted EPS. Duke Energy’s adjusted EPS was $4.05 for the nine months ended September 30, 2023, compared to $4.16 for the nine months ended September 30, 2022. The decrease in adjusted EPS was primarily due to higher interest expense, unfavorable weather and lower volumes, partially offset by growth from riders and other margin, rate case impacts, lower operations and maintenance expense and ongoing tax efficiency efforts.

The following table reconciles non-GAAP measures, including adjusted EPS, to their most directly comparable GAAP measures.


	Nine Months Ended September 30,
	2023				2022
(in millions, except per share amounts)	Earnings		EPS		Earnings		EPS
GAAP Reported Earnings/GAAP Reported EPS	$	1,744	$	2.27	$	3,094	$	4.03
Adjustments:
Regulatory Matters(a)	84		0.11		157		0.21




Discontinued Operations(b)	1,283		1.67		(60)		(0.08)
Adjusted Earnings/Adjusted EPS	$	3,111	$	4.05	$	3,191	$	4.16

(a)In 2023, net of $27 million tax benefit. $95 within Impairment of assets and other charges and $16 million within Operations, maintenance and other. In 2022, net of $80 million tax benefit. $211 million recorded within Impairment of assets and other charges, $46 million within Regulated electric (Operating revenues) and $20 million within Noncontrolling Interests.

(b)Recorded in (Loss) Income from Discontinued Operations, net of tax, and Net (Income) Loss Attributable to Noncontrolling Interests.

SEGMENT RESULTS

The remaining information presented in this discussion of results of operations is on a GAAP basis. Management evaluates segment performance based on segment income. Segment income is defined as income from continuing operations net of income attributable to noncontrolling interests and preferred stock dividends. Segment income includes intercompany revenues and expenses that are eliminated in the Condensed Consolidated Financial Statements.

Duke Energy's segment structure includes the following segments: EU&I and GU&I. The remainder of Duke Energy’s operations is presented as Other. See Note 3 to the Condensed Consolidated Financial Statements, “Business Segments,” for additional information on Duke Energy’s segment structure.


MD&A			SEGMENT RESULTS — ELECTRIC UTILITIES AND INFRASTRUCTURE

Electric Utilities and Infrastructure


	Three Months Ended September 30,						Nine Months Ended September 30,
(in millions)	2023		2022		Variance		2023		2022		Variance
Operating Revenues	$	7,715	$	7,439	$	276	$	20,363	$	19,576	$	787
Operating Expenses
Fuel used in electric generation and purchased power	2,591		2,653		(62)		7,045		6,481		564
Operation, maintenance and other	1,398		1,257		141		4,008		4,011		(3)
Depreciation and amortization	1,209		1,170		39		3,493		3,411		82
Property and other taxes	392		336		56		1,077		1,004		73
Impairment of assets and other charges	88		8		80		100		214		(114)
Total operating expenses	5,678		5,424		254		15,723		15,121		602
Gains on Sales of Other Assets and Other, net	2		7		(5)		30		12		18
Operating Income	2,039		2,022		17		4,670		4,467		203
Other Income and Expenses, net	131		114		17		388		381		7
Interest Expense	468		377		91		1,364		1,144		220
Income Before Income Taxes	1,702		1,759		(57)		3,694		3,704		(10)
Income Tax Expense	224		207		17		531		448		83
Less: Income Attributable to Noncontrolling Interest	31		12		19		75		19		56
Segment Income	$	1,447	$	1,540	$	(93)	$	3,088	$	3,237	$	(149)

Duke Energy Carolinas GWh sales	24,810		24,554		256		66,367		69,125		(2,758)
Duke Energy Progress GWh sales	19,704		19,608		96		50,503		54,492		(3,989)
Duke Energy Florida GWh sales	13,665		13,555		110		34,055		35,797		(1,742)
Duke Energy Ohio GWh sales	6,356		7,074		(718)		17,694		18,635		(941)
Duke Energy Indiana GWh sales	8,526		8,934		(408)		22,803		24,528		(1,725)
Total Electric Utilities and Infrastructure GWh sales	73,061		73,725		(664)		191,422		202,577		(11,155)
Net proportional MW capacity in operation							49,906		49,520		386

Three Months Ended September 30, 2023, as compared to September 30, 2022

EU&I’s lower segment income is due to higher interest expense and higher depreciation related to higher plant in service. The following is a detailed discussion of the variance drivers by line item.

Operating Revenues. The variance was driven primarily by:

•a $155 million increase in fuel revenues primarily due to higher fuel cost recovery in the current year;

•a $146 million increase in storm revenues at Duke Energy Florida due to hurricanes Ian and Nicole collections;

•a $76 million increase in price due to 2022 Duke Energy Ohio Electric retail rate case and Ohio tax reform deferrals in prior year, higher pricing at Duke Energy Progress from the South Carolina retail rate case and interim rates from the North Carolina retail rate case, and base rate adjustments related to annual increases from the 2021 Settlement Agreement at Duke Energy Florida;

•a $60 million increase in retail sales due to favorable weather compared to prior year; and

•a $42 million increase in rider revenues primarily due to a decrease in the return of EDIT to customers compared to the prior year at Duke Energy Carolinas and increased Storm Protection Plan rider revenue at Duke Energy Florida.

Partially offset by:

•a $141 million decrease in wholesale revenues primarily due to lower capacity volumes at Duke Energy Progress and lower demand at Duke Energy Florida; and

•a $72 million decrease in weather-normal retail sales volumes.

Operating Expenses. The variance was driven primarily by:

•a $141 million increase in operation, maintenance and other primarily driven by higher storm amortization at Duke Energy Florida;

•an $80 million increase in impairment of assets and other charges primarily due to rate case impacts at Duke Energy Carolinas and Duke Energy Progress in the current year;


MD&A			SEGMENT RESULTS — ELECTRIC UTILITIES AND INFRASTRUCTURE

•a $56 million increase in property and other taxes primarily due to franchise taxes and higher property tax valuation adjustments at Duke Energy Florida; and

•a $39 million increase in depreciation and amortization primarily due to higher plant in service.

Partially offset by:

•a $62 million decrease in fuel used in electric generation and purchased power due to lower fuel prices and lower volumes, partially offset by higher amortizations of deferred fuel.

Other Income and Expenses, net. The increase is primarily due to the sale of OPEB liabilities to a third party insurance company.

Interest Expense. The variance was primarily driven by higher interest rates and outstanding debt balances.

Income Tax Expense. The increase in tax expense was primarily due to a decrease in the amortization of excess deferred taxes, partially offset by a decrease in pretax income. The ETRs for the three months ended September 30, 2023, and 2022, were 13.2% and 11.8%, respectively. The increase in the ETR was primarily due to a decrease in the amortization of excess deferred taxes.

Income Attributable to Noncontrolling Interest. The increase is due to the second and final tranche of the GIC minority interest sale.

Nine Months Ended September 30, 2023, as compared to September 30, 2022

EU&I’s lower segment income is due to unfavorable weather, lower weather-normal retail sales volumes and higher interest expense, partially offset by the prior year Indiana Supreme Court ruling on recovery of certain coal ash costs. The following is a detailed discussion of the variance drivers by line item.

Operating Revenues. The variance was driven primarily by:

•a $1,052 million increase in fuel revenues primarily due to higher fuel cost recovery in the current year;

•a $260 million increase in storm revenues at Duke Energy Florida due to hurricanes Ian and Nicole collections;

•a $154 million increase in price due to 2022 Duke Energy Ohio Electric retail rate case, higher pricing at Duke Energy Progress from the South Carolina retail rate case and interim rates from the North Carolina retail rate case and base rate adjustments related to annual increases from the 2021 Settlement Agreement at Duke Energy Florida;

•an $84 million increase in rider revenues primarily due to a decrease in the return of EDIT to customers compared to the prior year at Duke Energy Carolinas and increased Storm Protection Plan rider revenue at Duke Energy Florida; and

•a $71 million increase due to the provision for rate refund recognized in the prior year related to the Indiana Supreme Court ruling on recovery of certain coal ash costs.

Partially offset by:

•a $320 million decrease in wholesale revenues primarily due to lower capacity revenues at Duke Energy Progress and lower demand at Duke Energy Florida;

•a $294 million decrease in retail sales due to unfavorable weather compared to prior year; and

•a $214 million decrease in weather-normal retail sales volumes.

Operating Expenses. The variance was driven primarily by:

•a $564 million increase in fuel used in electric generation and purchased power due to changes in the generation mix at Duke Energy Carolinas and higher amortization of deferred fuel;

•an $82 million increase in depreciation and amortization primarily due to higher plant in service, partially offset by the amortization of the Department of Energy settlement regulatory liability at Duke Energy Florida; and

•a $73 million increase in property and other taxes primarily due to higher property tax valuations at Duke Energy Florida and Duke Energy Carolinas, partially offset by favorable property tax true ups at Duke Energy Indiana.

Partially offset by:

•a $114 million decrease in impairment of assets and other charges primarily due to the Indiana Supreme Court ruling on recovery of certain coal ash costs in the prior year, partially offset by rate case impacts at Duke Energy Carolinas and Duke Energy Progress in the current year.

Gains on Sales of Other Assets and Other, net. The increase was primarily due to the sale of the Mint Street parking deck.

Interest Expense. The variance was primarily driven by higher interest rates and outstanding debt balances.

Income Tax Expense. The increase in tax expense was primarily due to a decrease in the amortization of excess deferred taxes. The ETRs for the nine months ended September 30, 2023, and 2022, were 14.4% and 12.1%, respectively. The increase in the ETR was primarily due to a decrease in the amortization of excess deferred taxes.

Income Attributable to Noncontrolling Interest. The increase is due to the second and final tranche of the GIC minority interest sale.


MD&A			SEGMENT RESULTS — GAS UTILITIES AND INFRASTRUCTURE

Gas Utilities and Infrastructure


	Three Months Ended September 30,						Nine Months Ended September 30,
(in millions)	2023		2022		Variance		2023		2022		Variance
Operating Revenues	$	313	$	427	$	(114)	$	1,583	$	1,912	$	(329)
Operating Expenses
Cost of natural gas	57		189		(132)		434		859		(425)
Operation, maintenance and other	103		115		(12)		332		410		(78)
Depreciation and amortization	88		80		8		257		241		16
Property and other taxes	32		29		3		93		103		(10)
Impairment of assets and other charges	—		(12)		12		(4)		(12)		8
Total operating expenses	280		401		(121)		1,112		1,601		(489)
(Losses) Gains on Sales of Other Assets and Other, net	—		—		—		(1)		4		(5)
Operating Income	33		26		7		470		315		155



Other Income and Expenses, net	39		25		14		86		61		25
Interest Expense	56		45		11		158		127		31
Income Before Income Taxes	16		6		10		398		249		149
Income Tax Expense (Benefit)	1		2		(1)		71		(28)		99

Segment Income	$	15	$	4	$	11	$	327	$	277	$	50

Piedmont LDC throughput (dekatherms)	143,224,608		157,145,659		(13,921,051)		426,926,457		463,863,034		(36,936,577)
Duke Energy Midwest LDC throughput (Mcf)	9,899,743		9,559,214		340,529		55,809,898		63,346,715		(7,536,817)

Three Months Ended September 30, 2023, as compared to September 30, 2022

GU&I’s results were impacted primarily by margin growth, partially offset by higher interest expense. The following is a detailed discussion of the variance drivers by line item.

Operating Revenues. The variance was driven primarily by:

•a $132 million decrease in cost of natural gas due to lower rates, decreased off-system sales natural gas costs and lower volumes.

Partially offset by:

•an $11 million increase due to Tennessee ARM revenue true up.

Operating Expenses. The variance was driven primarily by:

•a $132 million decrease in cost of natural gas due to lower rates, decreased off-system sales natural gas costs and lower volumes; and

•a $12 million decrease in operations, maintenance and other primarily due to lower spend on internal and contract labor costs.

Partially offset by:

•a $12 million increase in impairment in assets and other charges due to the reversal in the prior year of the impairment related to the propane caverns in Ohio; and

•an $8 million increase in depreciation and amortization due to additional plant in service and lower CEP deferrals.

Other Income and Expenses, Net. The increase was primarily due to the revision in the Atlantic Coast Pipeline (ACP) ARO closure cost.

Interest Expense. The increase was primarily due to higher interest rates and outstanding debt balances.

Income Tax Expense (Benefit). The decrease in tax expense was primarily due to an increase in the amortization of excess deferred taxes, partially offset by an increase in pretax income. The ETRs for the three months ended September 30, 2023, and 2022, were 6.3% and 33.3%, respectively. The decrease in the ETR was primarily due to an increase in the amortization of excess deferred taxes.

Nine Months Ended September 30, 2023, as compared to September 30, 2022

GU&I’s results were impacted primarily by margin growth partially offset by higher interest expense. The following is a detailed discussion of the variance drivers by line item.

Operating Revenues. The variance was driven primarily by:

•a $425 million decrease due to lower natural gas costs passed through to customers, lower volumes, and decreased off-system sales natural gas costs.


MD&A			SEGMENT RESULTS — GAS UTILITIES AND INFRASTRUCTURE

Partially offset by:

•an $18 million increase due to rider revenues related to Ohio CEP;

•an $18 million increase due to secondary marketing sales;

•a $15 million increase due to the MGP Settlement in prior year; and

•a $13 million increase due to North Carolina IMR.

Operating Expenses. The variance was driven primarily by:

•a $425 million decrease in cost of natural gas due to lower natural gas costs passed through to customers, lower volumes, and decreased off-system sales natural gas costs;

•a $78 million decrease in operations, maintenance and other due to Ohio MGP Settlement in prior year and lower spend on internal and contract labor costs; and

•a $10 million decrease in property and other taxes due to Ohio and Kentucky property tax true ups.

Partially offset by:

•a $16 million increase in depreciation and amortization due to additional plant in service and lower CEP deferrals.

Other Income and Expenses, net. The increase was primarily due to revision in ACP ARO closure cost and higher AFUDC equity income.

Interest Expense. The increase was primarily due to higher outstanding debt balances and interest rates.

Income Tax Expense (Benefit). The increase in tax expense was primarily due to a decrease in the amortization of excess deferred taxes related to the Ohio MGP Settlement recorded in the prior year and an increase in pretax income. The ETRs for the nine months ended September 30, 2023, and 2022, were 17.8% and (11.2)%, respectively. The increase in the ETR was primarily due to a decrease in the amortization of excess deferred taxes related to the Ohio MGP Settlement recorded in the prior year.

Other


	Three Months Ended September 30,						Nine Months Ended September 30,
(in millions)	2023		2022		Variance		2023		2022		Variance
Operating Revenues	$	33	$	30	$	3	$	98	$	91	$	7






Operating Expenses	4		27		(23)		53		69		(16)
Gains on Sales of Other Assets and Other, net	5		—		5		16		1		15
Operating Income	34		3		31		61		23		38
Other Income and Expenses, net	47		6		41		168		(5)		173
Interest Expense	283		205		78		810		529		281
Loss Before Income Taxes	(202)		(196)		(6)		(581)		(511)		(70)
Income Tax Benefit	(182)		(51)		(131)		(285)		(123)		(162)
Add: Income Attributable to Noncontrolling Interests	—		1		(1)		—		—		—
Less: Preferred Dividends	39		39		—		92		92		—
Net Loss	$	(59)	$	(183)	$	124	$	(388)	$	(480)	$	92

Three Months Ended September 30, 2023, as compared to September 30, 2022

The lower net loss was driven by an increase in the tax benefit due to a favorable adjustment related to certain allowable tax deductions, lower franchise tax expense and higher returns on investments, partially offset by higher interest expense.

Operating Expenses. The decrease was primarily driven by franchise tax refunds of $38 million in the current year, partially offset by an increase in franchise tax accruals of $6 million.

Other Income and Expenses, net. The variance was primarily due to higher yields on captive insurance investments and higher return on investments that fund certain employee benefit obligations.

Interest Expense. The variance was primarily due to higher interest rates on long-term debt and commercial paper, and higher outstanding long-term debt balances.

Income Tax Benefit. The increase in the tax benefit was primarily due to benefits associated with ongoing tax efficiency efforts. The ETRs for the three months ended September 30, 2023, and 2022, were 90.1% and 26.0%, respectively. The decrease in the ETR was primarily due to benefits associated with ongoing tax efficiency efforts. During the third quarter of 2023, the Company evaluated the deductibility of certain items spanning periods currently open under federal statute, including items related to interest on company-owned life insurance. As a result of this analysis, the Company recorded a favorable adjustment of approximately $120 million.

Nine Months Ended September 30, 2023, as compared to September 30, 2022

The lower net loss was driven by an increase in the tax benefit and higher return on investments, partially offset by higher interest expense.


MD&A			SEGMENT RESULTS - OTHER

Operating Expenses. The decrease was primarily driven by franchise tax refunds of $63 million in the current year, partially offset by an increase in franchise tax accruals of $19 million and $26 million of increased expense on certain employee benefit obligations in the current year.

Other Income and Expenses, net. The variance was primarily due to higher return on investments that fund certain employee benefit obligations and higher yields on captive insurance investments.

Interest Expense. The variance was primarily due to higher interest rates on long-term debt and commercial paper, and higher outstanding long-term debt balances.

Income Tax Benefit. The increase in the tax benefit was primarily due to benefits associated with ongoing tax efficiency efforts and an increase in pretax losses. The ETRs for the nine months ended September 30, 2023, and 2022, were 49.1% and 24.1%, respectively. The increase in the ETR was primarily due to benefits associated with ongoing tax efficiency efforts. During the third quarter of 2023, the Company evaluated the deductibility of certain items spanning periods currently open under federal statute, including items related to interest on company-owned life insurance. As a result of this analysis, the Company recorded a favorable adjustment of approximately $120 million.

(LOSS) INCOME FROM DISCONTINUED OPERATIONS, NET OF TAX


	Three Months Ended September 30,						Nine Months Ended September 30,
(in millions)	2023		2022		Variance		2023		2022		Variance
(Loss) Income From Discontinued Operations, net of tax	$	(152)	$	3	$	(155)	$	(1,316)	$	(30)	$	(1,286)

Three Months Ended September 30, 2023, as compared to September 30, 2022

The variance was primarily driven by the impairments on the sale of the Commercial Renewables business recorded in 2023.

Nine Months Ended September 30, 2023, as compared to September 30, 2022

The variance was primarily driven by the impairments on the sale of the Commercial Renewables business recorded in 2023.

DUKE ENERGY CAROLINAS

Results of Operations


	Nine Months Ended September 30,
(in millions)	2023		2022		Variance
Operating Revenues	$	6,155	$	5,844	$	311
Operating Expenses
Fuel used in electric generation and purchased power	1,823		1,423		400
Operation, maintenance and other	1,285		1,410		(125)
Depreciation and amortization	1,186		1,138		48
Property and other taxes	276		258		18
Impairment of assets and other charges	70		(3)		73
Total operating expenses	4,640		4,226		414
Gains on Sales of Other Assets and Other, net	26		4		22
Operating Income	1,541		1,622		(81)
Other Income and Expenses, net	181		172		9
Interest Expense	504		415		89
Income Before Income Taxes	1,218		1,379		(161)
Income Tax Expense	97		87		10
Net Income	$	1,121	$	1,292	$	(171)

The following table shows the percent changes in GWh sales and average number of customers. The percentages for retail customer classes represent billed sales only. Total sales includes billed and unbilled retail sales and wholesale sales to incorporated municipalities, public and private utilities and power marketers. Amounts are not weather-normalized.


Increase (Decrease) over prior year	2023
Residential sales	(4.5)	%
General service sales	(0.7)	%
Industrial sales	(5.1)	%
Wholesale power sales	6.3	%
Joint dispatch sales	28.7	%
Total sales	(4.0)	%
Average number of customers	1.7	%


MD&A			DUKE ENERGY CAROLINAS

Nine Months Ended September 30, 2023, as compared to September 30, 2022

Operating Revenues. The variance was driven primarily by:

•a $429 million increase in fuel revenues due to higher fuel cost recovery; and

•a $73 million increase in rider revenues primarily due to the decrease in the return of EDIT to customers compared to the prior year and increases in energy efficiency primarily due to program performance.

Partially offset by:

•a $153 million decrease in retail sales due to unfavorable weather compared to prior year; and

•a $71 million decrease in weather-normal retail sales volumes.

Operating Expenses. The variance was driven primarily by:

•a $400 million increase in fuel used in electric generation and purchased power primarily due to changes in the generation mix and higher amortization of deferred fuel, partially offset by lower Joint Dispatch Agreement (JDA) purchased volumes and prices;

•a $73 million increase in impairment of assets and other primarily due to rate case impacts and a prior year adjustment of the South Carolina Supreme Court decision on coal ash; and

•a $48 million increase in depreciation and amortization primarily due to a higher depreciable base, partially offset by a decrease in depreciation and amortization primarily due to the prior year South Carolina Supreme Court decision on coal ash and an increase in Grid Improvement Plan deferrals.

Partially offset by:

•a $125 million decrease in operation, maintenance and other expense primarily due to a decrease in spend on outside services and lower storm restoration costs.

Gains on Sales of Other Assets and Other, net. The increase was primarily due to the sale of the Mint Street parking deck.

Interest Expense. The variance was driven by higher interest rates and outstanding debt balances.

Income Tax Expense. The increase in tax expense was primarily due to a decrease in the amortization of excess deferred taxes, partially offset by a decrease in pretax income.

PROGRESS ENERGY

Results of Operations


	Nine Months Ended September 30,
(in millions)	2023		2022		Variance
Operating Revenues	$	10,315	$	10,087	$	228
Operating Expenses
Fuel used in electric generation and purchased power	3,902		3,927		(25)
Operation, maintenance and other	1,963		1,829		134
Depreciation and amortization	1,609		1,607		2
Property and other taxes	546		472		74
Impairment of assets and other charges	29		4		25
Total operating expenses	8,049		7,839		210
Gains on Sales of Other Assets and Other, net	20		6		14
Operating Income	2,286		2,254		32
Other Income and Expenses, net	146		150		(4)
Interest Expense	706		616		90
Income Before Income Taxes	1,726		1,788		(62)
Income Tax Expense	280		289		(9)
Net Income	$	1,446	$	1,499	$	(53)


Less: Net Income Attributable to Noncontrolling Interests	—		1		(1)
Net Income Attributable to Parent	$	1,446	$	1,498	$	(52)

100


MD&A			PROGRESS ENERGY

Nine Months Ended September 30, 2023, as compared to September 30, 2022

Operating Revenues. The variance was driven primarily by:

•a $260 million increase in storm revenues at Duke Energy Florida due to hurricanes Ian and Nicole collections;

•a $242 million increase in fuel cost recovery at Duke Energy Florida driven by higher fuel rates in the current year, partially offset by a decrease at Duke Energy Progress driven by lower JDA sales volumes at lower prices;

•a $74 million increase due to higher pricing related to rate cases at Duke Energy Progress from interim rates from the North Carolina retail rate case and the South Carolina retail rate case, and base rate adjustments related to annual increases from the 2021 Settlement Agreement at Duke Energy Florida;

•a $35 million increase in rider revenues at Duke Energy Florida primarily due to increased Storm Protection Plan rider revenue; and

•a $20 million increase in franchise taxes revenue primarily due to increased revenues over prior year.

Partially offset by:

•a $265 million decrease in wholesale revenues, net of fuel, due to lower capacity rate and volumes at Duke Energy Progress and lower demand at Duke Energy Florida;

•an $85 million decrease in weather-normal retail sales volumes; and

•a $66 million decrease in retail sales due to unfavorable weather compared to prior year.

Operating Expenses. The variance was driven primarily by:

•a $134 million increase in operation, maintenance and other primarily due to storm amortization at Duke Energy Florida, partially offset by a decrease at Duke Energy Progress due to lower storm costs;

•a $74 million increase in property and other taxes primarily due to franchise taxes driven by higher revenues and property taxes due to higher property tax valuation adjustments at Duke Energy Florida; and

•a $25 million increase in impairment of asset and other charges primarily due to rate case impacts at Duke Energy Progress.

Partially offset by:

•a $25 million decrease in fuel used in electric generation and purchased power primarily due to lower volumes and price at Duke Energy Progress, partially offset by higher amortization of deferred fuel balances at Duke Energy Florida.

Gains on Sales of Other Assets and Other, net. The increase was primarily due to sales of cell tower leases.

Interest Expense. The variance was driven primarily by higher outstanding debt balances and interest rates at Duke Energy Florida and Duke Energy Progress.

Income Tax Expense. The decrease in tax expense was primarily due to a decrease in pretax income.

DUKE ENERGY PROGRESS

Results of Operations


	Nine Months Ended September 30,
(in millions)	2023		2022		Variance
Operating Revenues	$	4,844	$	5,182	$	(338)
Operating Expenses
Fuel used in electric generation and purchased power	1,685		1,916		(231)
Operation, maintenance and other	1,051		1,101		(50)
Depreciation and amortization	935		890		45
Property and other taxes	143		136		7
Impairment of assets and other charges	31		4		27
Total operating expenses	3,845		4,047		(202)
Gains on Sales of Other Assets and Other, net	2		2		—
Operating Income	1,001		1,137		(136)
Other Income and Expenses, net	92		83		9
Interest Expense	315		260		55
Income Before Income Taxes	778		960		(182)
Income Tax Expense	101		129		(28)
Net Income	$	677	$	831	$	(154)

101


MD&A			DUKE ENERGY PROGRESS


Increase (Decrease) over prior period	2023
Residential sales	(5.2)	%
General service sales	(2.7)	%
Industrial sales	(13.6)	%
Wholesale power sales	(4.5)	%
Joint dispatch sales	(14.0)	%
Total sales	(7.3)	%
Average number of customers	1.7	%

Nine Months Ended September 30, 2023, as compared to September 30, 2022

Operating Revenues. The variance was driven primarily by:

•a $182 million decrease in fuel revenues due to lower JDA sales volumes at lower prices in the current year, partially offset by higher fuel cost recovery;

•a $110 million decrease in retail sales due to unfavorable weather compared to prior year;

•a $69 million decrease in weather-normal retail sales volumes; and

•a $33 million decrease in wholesale revenues, net of fuel, due to lower capacity rates and volumes.

Partially offset by:

•a $60 million increase due to higher pricing from interim rates from the North Carolina retail rate case and the South Carolina retail rate case.

Operating Expenses. The variance was driven primarily by:

•a $231 million decrease in fuel used in electric generation and purchased power primarily due to lower volumes and prices, partially offset by the recovery of fuel expenses; and

•a $50 million decrease in operation, maintenance and other expense primarily due to lower storm costs.

Partially offset by:

•a $45 million increase in depreciation and amortization due to higher depreciable base; and

•a $27 million increase in impairment of assets and other charges primarily due to rate case impacts.

Interest Expense. The variance was driven primarily by higher interest rates and outstanding debt balances.

Income Tax Expense. The decrease in tax expense was primarily due to a decrease in pretax income, partially offset by a decrease in the amortization of excess deferred taxes.

102


MD&A			DUKE ENERGY FLORIDA

DUKE ENERGY FLORIDA

Results of Operations


	Nine Months Ended September 30,
(in millions)	2023		2022		Variance
Operating Revenues	$	5,456	$	4,890	$	566
Operating Expenses
Fuel used in electric generation and purchased power	2,218		2,011		207
Operation, maintenance and other	898		716		182
Depreciation and amortization	674		717		(43)
Property and other taxes	403		335		68
Impairment of assets and other charges	(1)		—		(1)
Total operating expenses	4,192		3,779		413
Gains on Sales of Other Assets and Other, net	1		5		(4)
Operating Income	1,265		1,116		149
Other Income and Expenses, net	56		74		(18)
Interest Expense	305		258		47
Income Before Income Taxes	1,016		932		84
Income Tax Expense	206		181		25
Net Income	$	810	$	751	$	59

The following table shows the percent changes in GWh sales and average number of customers. The percentages for retail customer classes represent billed sales only. Wholesale power sales include both billed and unbilled sales. Total sales includes billed and unbilled retail sales and wholesale sales to incorporated municipalities, public and private utilities and power marketers. Amounts are not weather-normalized.


Increase (Decrease) over prior period	2023
Residential sales	1.5	%
General service sales	1.1	%
Industrial sales	(5.6)	%
Wholesale and other	(46.7)	%
Total sales	(4.9)	%
Average number of customers	1.7	%

Nine Months Ended September 30, 2023, as compared to September 30, 2022

Operating Revenues. The variance was driven primarily by:

•a $424 million increase in fuel and capacity revenues primarily due to an increase in fuel and capacity rates billed to retail customers;

•a $260 million increase in storm revenues due to hurricanes Ian and Nicole collections;

•a $44 million increase in retail sales due to favorable weather in the current year;

•a $35 million increase in rider revenues primarily due to increased rate of Storm Protection Plan rider; and

•a $20 million increase in franchise taxes revenue primarily due to increased revenues over prior year.

Partially offset by:

•a $232 million decrease in wholesale power revenues, net of fuel, primarily due to decreased demand.

Operating Expenses. The variance was driven primarily by:

•a $207 million increase in fuel used in electric generation and purchased power primarily due to higher amortization of deferred fuel and capacity expense;

•a $182 million increase in operation, maintenance and other primarily due to storm amortization; and

•a $68 million increase in property and other taxes primarily due to franchise taxes driven by higher revenues and property taxes due to higher property tax valuation adjustments.

Partially offset by:

•a $43 million decrease in depreciation and amortization primarily due to the amortization of Department of Energy settlement regulatory liability, partially offset by higher depreciable base.

Other Income and Expenses, net. The decrease is primarily due to the wholesale portion of the Department of Energy settlement for nuclear fuel storage in prior year.

103


MD&A			DUKE ENERGY FLORIDA

Interest Expense. The increase was primarily due to higher interest rates and outstanding debt balances.

Income Tax Expense. The increase in tax expense was primarily due to an increase in pretax income and a decrease in the amortization of excess deferred taxes, partially offset by an increase in production tax credits.

DUKE ENERGY OHIO

Results of Operations


	Nine Months Ended September 30,
(in millions)	2023		2022		Variance
Operating Revenues
Regulated electric	$	1,411	$	1,320	$	91
Regulated natural gas	464		491		(27)

Total operating revenues	1,875		1,811		64
Operating Expenses
Fuel used in electric generation and purchased power	485		439		46

Cost of natural gas	118		174		(56)
Operation, maintenance and other	358		408		(50)
Depreciation and amortization	266		247		19
Property and other taxes	258		272		(14)
Impairment of assets and other charges	—		(11)		11
Total operating expenses	1,485		1,529		(44)

Operating Income	390		282		108
Other Income and Expenses, net	33		16		17
Interest Expense	125		92		33
Income Before Income Taxes	298		206		92
Income Tax Expense (Benefit)	47		(30)		77


Net Income	$	251	$	236	$	15

The following table shows the percent changes in GWh sales of electricity, dekatherms of natural gas delivered and average number of electric and natural gas customers. The percentages for retail customer classes represent billed sales only. Total sales includes billed and unbilled retail sales and wholesale sales to incorporated municipalities, public and private utilities and power marketers. Amounts are not weather-normalized.


	Electric		Natural Gas
Increase (Decrease) over prior year	2023		2023
Residential sales	(5.6)	%	(13.4)	%
General service sales	1.8	%	(24.2)	%
Industrial sales	8.7	%	2.7	%
Wholesale electric power sales	(33.8)	%	n/a
Other natural gas sales	n/a		(0.4)	%
Total sales	(5.0)	%	(11.9)	%
Average number of customers	0.9	%	0.5	%

Nine Months Ended September 30, 2023, as compared to September 30, 2022

Operating Revenues. The variance was driven primarily by:

•a $93 million increase in price due to the 2022 Duke Energy Ohio Electric retail rate case and Ohio tax reform deferrals in prior year;

•a $58 million increase in fuel-related revenues primarily due to higher retail sales volumes and higher fuel cost recovery in the current year; and

•a $15 million increase due to the MGP Settlement in the prior year.

Partially offset by:

•a $54 million decrease in revenues related to lower Ohio Valley Electric Corporation (OVEC) rider collections and OVEC sales into PJM Interconnection, LLC (PJM);

•a $33 million decrease due to unfavorable weather compared to prior year; and

•a $6 million decrease in retail revenue riders primarily due to the decrease in Distribution Capital Investment Rider (DCI), partially offset by increases in the Ohio CEP rider and Energy Efficiency Rider.

104


MD&A			DUKE ENERGY OHIO

Operating Expenses. The variance was driven primarily by:

•a $50 million decrease in operation, maintenance and other expense primarily due to the MGP Settlement in the prior year;

•a $14 million decrease in property and other taxes primarily due to property tax true ups in Ohio and Kentucky and higher deferrals, partially offset by higher franchise taxes; and

•a $10 million decrease in fuel expense primarily driven by lower retail prices for natural gas and purchased power, partially offset by an increase in purchased power volumes.

Partially offset by:

•a $19 million increase in depreciation and amortization primarily driven by an increase in distribution plant in service and depreciation rates resulting from the 2022 Duke Energy Ohio Electric retail rate case implemented in 2023; and

•an $11 million increase in impairment of assets and other charges primarily due to the reversal in the prior year of the impairment related to the propane caverns in Ohio.

Other Income and Expenses. The increase was primarily due intercompany interest income.

Interest Expense. The increase was primarily due to higher outstanding debt balances and interest rates.

Income Tax Expense (Benefit). The increase in tax expense was primarily due to a decrease in the amortization of excess deferred taxes related to the MGP Settlement recorded in the prior year and an increase in pretax income.

DUKE ENERGY INDIANA

Results of Operations


	Nine Months Ended September 30,
(in millions)	2023		2022		Variance
Operating Revenues	$	2,606	$	2,835	$	(229)
Operating Expenses
Fuel used in electric generation and purchased power	980		1,234		(254)
Operation, maintenance and other	524		551		(27)
Depreciation and amortization	500		478		22
Property and other taxes	42		60		(18)
Impairment of assets and other charges	—		211		(211)
Total operating expenses	2,046		2,534		(488)

Operating Income	560		301		259
Other Income and Expenses, net	58		27		31
Interest Expense	157		138		19
Income Before Income Taxes	461		190		271
Income Tax Expense	82		1		81
Net Income	$	379	$	189	$	190


Increase (Decrease) over prior year	2023
Residential sales	(7.3)	%
General service sales	(1.3)	%
Industrial sales	7.1	%
Wholesale power sales	(7.9)	%
Total sales	(7.0)	%
Average number of customers	1.1	%

Nine Months Ended September 30, 2023, as compared to September 30, 2022

Operating Revenues. The variance was driven primarily by:

•a $111 million decrease in retail fuel revenues primarily due to lower fuel cost recovery driven by lower retail sales volumes and fuel prices;

•a $55 million decrease in wholesale revenues, including fuel revenues, driven by lower fuel and purchased power prices;

•a $51 million decrease in weather-normal retail sales volumes primarily due to lower customer demand;

105


MD&A			DUKE ENERGY INDIANA

•a $46 million decrease in retail sales due to unfavorable weather; and

•a $26 million decrease primarily due to the Utility Receipts Tax repeal.

Partially offset by:

•a $71 million increase primarily due to the net provision for rate refund related to the Indiana Supreme Court ruling on recovery of certain coal ash costs.

Operating Expenses. The variance was driven primarily by:

•a $254 million decrease in fuel used in electric generation and purchased power primarily due to lower purchased power expense, natural gas and coal costs, partially offset by higher deferred fuel amortization;

•a $211 million decrease in impairment of assets and other charges primarily due to the Indiana Supreme Court ruling on recovery of certain coal ash costs in the prior year;

•a $27 million decrease in operation, maintenance and other primarily due to lower employee-related expenses and storm contingency costs; and

•an $18 million decrease in property and other taxes primarily due to franchise taxes and property tax true ups for prior periods.

Partially offset by:

•a $22 million increase in depreciation and amortization primarily due to higher depreciable base.

Other Income and Expenses, net. The variance is primarily due to coal ash insurance proceeds and intercompany interest income.

Interest Expense. The variance is primarily due to higher outstanding debt balances and interest rates.

Income Tax Expense. The increase in tax expense was primarily due to an increase in pretax income and a decrease in the amortization of excess deferred income taxes related to the coal ash impairment recorded in the prior year.

PIEDMONT

Results of Operations


	Nine Months Ended September 30,
(in millions)	2023		2022		Variance



Operating Revenues	$	1,119	$	1,421	$	(302)
Operating Expenses
Cost of natural gas	316		685		(369)
Operation, maintenance and other	248		270		(22)
Depreciation and amortization	175		166		9
Property and other taxes	46		44		2
Impairment of assets and other charges	(4)		1		(5)
Total operating expenses	781		1,166		(385)
Gains on Sales of Other Assets and Other, net	—		4		(4)
Operating Income	338		259		79
Other Income and Expenses, net	49		41		8
Interest Expense	120		102		18
Income Before Income Taxes	267		198		69
Income Tax Expense	46		18		28
Net Income	$	221	$	180	$	41

The following table shows the percent changes in dekatherms delivered and average number of customers. The percentages for all throughput deliveries represent billed and unbilled sales. Amounts are not weather-normalized.


Increase (Decrease) over prior year	2023
Residential deliveries	(16.3)	%
Commercial deliveries	(10.4)	%
Industrial deliveries	(2.9)	%
Power generation deliveries	(7.7)	%
For resale	(18.1)	%
Total throughput deliveries	(8.0)	%
Secondary market volumes	(27.0)	%
Average number of customers	1.5	%

106


MD&A			PIEDMONT

The margin decoupling mechanism adjusts for variations in residential and commercial use per customer, including those due to weather and conservation. The weather normalization adjustment mechanisms mostly offset the impact of weather on bills rendered, but do not ensure full recovery of approved margin during periods when winter weather is significantly warmer or colder than normal.

Nine Months Ended September 30, 2023, as compared to September 30, 2022

Operating Revenues. The variance was driven primarily by:

•a $369 million decrease due to lower natural gas costs passed through to customers, lower volumes, and decreased off-system sales natural gas costs.

Partially offset by:

•an $18 million increase due to secondary marketing sales;

•a $13 million increase due to North Carolina IMR;

•an $11 million increase due to customer growth; and

•an $11 million increase due to Tennessee ARM revenue true up.

Operating Expenses. The variance was driven primarily by:

•a $369 million decrease due to lower natural gas costs passed through to customers, lower volumes, and decreased off-system sales natural gas costs; and

•a $22 million decrease in operations, maintenance and other primarily due to lower spend on internal and contract labor costs.

Partially offset by:

•a $9 million increase in depreciation and amortization due to additional plant in service.

Other Income and Expenses, net. The increase was primarily due to higher AFUDC equity income.

Interest Expense. The increase was primarily due to higher outstanding debt balances and interest rates.

Income Tax Expense. The increase in tax expense was primarily due to an increase in pretax income and a decrease in the amortization of excess deferred taxes.

LIQUIDITY AND CAPITAL RESOURCES

Sources and Uses of Cash

Duke Energy relies primarily upon cash flows from operations, debt and equity issuances and its existing cash and cash equivalents to fund its liquidity and capital requirements. Duke Energy’s capital requirements arise primarily from capital and investment expenditures, repaying long-term debt and paying dividends to shareholders. Additionally, due to its existing tax attributes and projected tax credits to be generated relating to the IRA, Duke Energy does not expect to be a significant federal cash taxpayer until around 2030. Duke Energy’s Annual Report on Form 10-K for the year ended December 31, 2022, included a summary and detailed discussion of projected primary sources and uses of cash for 2023 to 2025.

As of September 30, 2023, Duke Energy had $324 million of cash on hand and $6.1 billion available under its $9 billion Master Credit Facility. Duke Energy expects to have sufficient liquidity in the form of cash on hand, cash from operations and available credit capacity to support its funding needs. Refer to Note 6 to the Condensed Consolidated Financial Statements, "Debt and Credit Facilities," for information regarding Duke Energy's debt issuances and maturities, and available credit facilities including the Master Credit Facility. Additionally, see Note 2 to the Condensed Consolidated Financial Statements, "Dispositions," for the timing of proceeds from the sale of certain Commercial Renewables assets to affiliates of Brookfield and ArcLight.

In April 2023, Moody’s Investors Service, Inc. (Moody's) maintained the credit ratings and affirmed the ratings outlook for all of the Duke Energy Registrants, including Duke Energy Ohio. Operations in Kentucky are conducted through Duke Energy Ohio's wholly owned subsidiary, Duke Energy Kentucky. Moody's lowered Duke Energy Kentucky's ratings outlook from stable to negative while maintaining Duke Energy Kentucky's credit rating of Baa1 for senior unsecured debt.

107


MD&A			LIQUIDITY AND CAPITAL RESOURCES

Cash Flow Information

The following table summarizes Duke Energy’s cash flows.


	Nine Months Ended
	September 30,
(in millions)	2023		2022
Cash flows provided by (used in):
Operating activities	$	7,309	$	5,188
Investing activities	(9,751)		(8,630)
Financing activities	2,413		3,551

Net (decrease) increase in cash, cash equivalents and restricted cash	(29)		109
Cash, cash equivalents and restricted cash at beginning of period	603		520
Cash, cash equivalents and restricted cash at end of period	$	574	$	629

OPERATING CASH FLOWS

The following table summarizes key components of Duke Energy’s operating cash flows.


	Nine Months Ended
	September 30,
(in millions)	2023		2022		Variance
Net income	$	1,878	$	3,113	$	(1,235)
Non-cash adjustments to net income	5,887		4,474		1,413
Contributions to qualified pension plans	(100)		(58)		(42)
Payments for asset retirement obligations	(423)		(418)		(5)
Working capital	(792)		(2,043)		1,251
Other assets and Other liabilities	859		120		739
Net cash provided by operating activities	$	7,309	$	5,188	$	2,121

The variance is primarily due to the recovery of deferred fuel costs and the timing of accruals and payments in other working capital accounts.

INVESTING CASH FLOWS

The following table summarizes key components of Duke Energy’s investing cash flows.


	Nine Months Ended
	September 30,
(in millions)	2023		2022		Variance
Capital, investment and acquisition expenditures	$	(9,340)	$	(8,185)	$	(1,155)

Other investing items	(411)		(445)		34
Net cash used in investing activities	$	(9,751)	$	(8,630)	$	(1,121)

The variance is primarily due to higher overall investments in the EU&I segment.

FINANCING CASH FLOWS

The following table summarizes key components of Duke Energy’s financing cash flows.


	Nine Months Ended
	September 30,
(in millions)	2023		2022		Variance
Issuances of long-term debt, net	$	5,607	$	5,663	$	(56)


Notes payable, commercial paper and other short-term borrowings	(939)		269		(1,208)
Dividends paid	(2,438)		(2,389)		(49)
Contributions from noncontrolling interests	278		132		146

Other financing items	(95)		(124)		29
Net cash provided by financing activities	$	2,413	$	3,551	$	(1,138)

108


MD&A			LIQUIDITY AND CAPITAL RESOURCES

The variance was primarily due to:

•a $1,208 million decrease in net borrowings from notes payable and commercial paper.

Partially offset by:

•a $146 million increase in contributions from noncontrolling interests.

OTHER MATTERS

Environmental Regulations

The Duke Energy Registrants are subject to federal, state and local regulations regarding air and water quality, hazardous and solid waste disposal, coal ash and other environmental matters. These regulations can be changed from time to time and result in new obligations of the Duke Energy Registrants. Refer to Note 4, "Regulatory Matters," in Duke Energy's Annual Report on Form 10-K for the year ended December 31, 2022, for more information regarding potential plant retirements and Note 4, "Regulatory Matters," to the Condensed Consolidated Financial Statements, for further information regarding regulatory filings related to the Duke Energy Registrants.

On May 18, 2023, the EPA published in the Federal Register a proposed rule under the Resource Conservation and Recovery Act, which would establish regulatory requirements for inactive surface impoundments at inactive generating facilities (Legacy CCR Surface Impoundments) and establish groundwater monitoring, corrective action, closure and post-closure care requirements for all CCR management units at facilities otherwise subject to the CCR rule. Duke Energy is reviewing the proposed rule and analyzing the potential impacts it could have on the Company, which could be material.

On May 23, 2023, the EPA published in the Federal Register proposed new source performance standards under Clean Air Act (CAA) section 111(b) that would establish standards of performance for emissions of carbon dioxide for newly constructed, modified, and reconstructed fossil fuel-fired electric utility steam generating units and fossil fuel-fired stationary combustion turbines. On that same day, in a separate rulemaking under CAA section 111(d), the EPA published proposed emission guidelines for states to use in developing plans to limit carbon dioxide emissions from existing fossil fuel-fired electric generating units and certain large existing stationary combustion turbines. Duke Energy is reviewing the proposed rules and analyzing the potential impacts they could have on the Company, which could be material.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

For an in-depth discussion of the Duke Energy Registrants' market risks, see “Quantitative and Qualitative Disclosures about Market Risk” in Item 7 of Duke Energy's Annual Report on Form 10-K for the year ended December 31, 2022.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed by the Duke Energy Registrants in the reports they file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified by the SEC rules and forms.

Disclosure controls and procedures include, without limitation, controls and procedures designed to provide reasonable assurance that information required to be disclosed by the Duke Energy Registrants in the reports they file or submit under the Exchange Act is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, the Duke Energy Registrants have evaluated the effectiveness of their disclosure controls and procedures (as such term is defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of September 30, 2023, and, based on this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that these controls and procedures are effective in providing reasonable assurance of compliance.

Changes in Internal Control over Financial Reporting

Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, the Duke Energy Registrants have evaluated changes in internal control over financial reporting (as such term is defined in Rules 13a-15 and 15d-15 under the Exchange Act) that occurred during the fiscal quarter ended September 30, 2023, and have concluded no change has materially affected, or is reasonably likely to materially affect, internal controls over financial reporting.

109


OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Duke Energy Registrants are, from time to time, parties to various lawsuits and regulatory proceedings in the ordinary course of their business. For information regarding legal proceedings, including regulatory and environmental matters, see Note 4, "Regulatory Matters," and Note 5, "Commitments and Contingencies," to the Condensed Consolidated Financial Statements. For additional information, see Item 3, "Legal Proceedings," in Duke Energy's Annual Report on Form 10-K for the year ended December 31, 2022.

ITEM 1A. RISK FACTORS

In addition to the other information set forth in this report, careful consideration should be given to the factors discussed in Part I, “Item 1A. Risk Factors” in the Duke Energy's Annual Report on Form 10-K for the year ended December 31, 2022, which could materially affect the Duke Energy Registrants’ financial condition or future results.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 5. OTHER INFORMATION

On August 25, 2023, Alex Glenn, Senior Vice President and Chief Executive Officer, Duke Energy Florida and Midwest, adopted a Rule 10b5-1 trading arrangement for the sale of up to 1,000 shares of the Company’s common stock between January 31, 2024, and March 28, 2024, or such earlier date if such plan is terminated sooner pursuant to the terms specified therein. Mr. Glenn's Rule 10b5-1 trading arrangement was entered into during an open insider trading window and is intended to satisfy the affirmative defense of Rule 10b5-1 under the Exchange Act and the Company's policies regarding insider transactions.

110


EXHIBITS

ITEM 6. EXHIBITS

Exhibits filed herein are designated by an asterisk (*). All exhibits not so designated are incorporated by reference to a prior filing, as indicated. Items constituting management contracts or compensatory plans or arrangements are designated by a double asterisk (**). The Company agrees to furnish upon request to the commission a copy of any omitted schedules or exhibits upon request on all items designated by a triple asterisk (***).

Duke

Exhibit

Duke

Energy

Progress

Energy

Number

Energy

Carolinas

Energy

Progress

Florida

Ohio

Indiana

Piedmont

4.1

Thirtieth Supplemental Indenture, dated as of September 8, 2023, to the Indenture, dated as of June 3, 2008, between Duke Energy Corporation and The Bank of New York Mellon Trust Company, N.A., as Trustee, and forms of global notes included therein (incorporated by reference to exhibit 4.1 to registrant's Current Report on Form 8-K filed on September 8, 2023 , File No . 1-32853 ).

4.2

Sixtieth Supplemental Indenture, dated as of September 1, 2023, between Duke Energy Florida, LLC and The Bank of New York Mellon, as successor Trustee and Calculation Agent (incorporated by reference to Exhibit 4.1 to registrant's Current Report on Form 8-K filed on September 29, 2023, Fil e No. 1-3274).

*31.1.1

Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

*31.1.2

Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

*31.1.3

Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

*31.1.4

Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

*31.1.5

Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

*31.1.6

Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

*31.1.7

Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

*31.1.8

Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

*31.2.1

Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

*31.2.2

Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

*31.2.3

Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

*31.2.4

Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

*31.2.5

Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

*31.2.6

Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

111


EXHIBITS

*31.2.7

Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

*31.2.8

Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

*32.1.1

Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

*32.1.2

Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

*32.1.3

Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

*32.1.4

Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

*32.1.5

Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

*32.1.6

Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

*32.1.7

Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

*32.1.8

Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

*32.2.1

Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

*32.2.2

Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

*32.2.3

Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

*32.2.4

Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

*32.2.5

Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

*32.2.6

Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

*32.2.7

Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

*32.2.8

Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

*101.INS

XBRL Instance Document (this does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).

112


EXHIBITS

*101.SCH

XBRL Taxonomy Extension Schema Document.

*101.CAL

XBRL Taxonomy Calculation Linkbase Document.

*101.LAB

XBRL Taxonomy Label Linkbase Document.

*101.PRE

XBRL Taxonomy Presentation Linkbase Document.

*101.DEF

XBRL Taxonomy Definition Linkbase Document.

*104

Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101).

The total amount of securities of the registrant or its subsidiaries authorized under any instrument with respect to long-term debt not filed as an exhibit does not exceed 10% of the total assets of the registrant and its subsidiaries on a consolidated basis. The registrant agrees, upon request of the SEC, to furnish copies of any or all of such instruments to it.

113


SIGNATURES

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned thereunto duly authorized.


		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.

Date:	November 2, 2023	/s/ BRIAN D. SAVOY
		Brian D. Savoy Executive Vice President and Chief Financial Officer (Principal Financial Officer)

Date:	November 2, 2023	/s/ CYNTHIA S. LEE
		Cynthia S. Lee Vice President, Chief Accounting Officer and Controller (Principal Accounting Officer)

114

Positive
Negative
Uncertain
Constraining
Legalese
Litigous
Readability	8th grade Avg

Duke Energy Carolinas 10-Q2023 Q3 Quarterly report

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