TABLE OF CONTENTS


			Cautionary Statement Regarding Forward-Looking Information

					~~Cautionary Statement Regarding Forward-Looking Information~~

PART I. FINANCIAL INFORMATION
Item 1.			Financial Statements

			Duke Energy Corporation Financial Statements	69

			Duke Energy Carolinas, LLC Financial Statements	1115

			Progress Energy, Inc. Financial Statements	1519

			Duke Energy Progress, LLC Financial Statements	1923

			Duke Energy Florida, LLC Financial Statements	2327

			Duke Energy Ohio, Inc. Financial Statements	2731

			Duke Energy Indiana, LLC Financial Statements	3135

			Piedmont Natural Gas Company, Inc. Financial Statements	3539

			Combined Notes to Condensed Consolidated Financial Statements
			Note 1 – Organization and Basis of Presentation	3943

			Note 2 – ~~Acquisitions and Dispositions~~Business Segments	4445
			Note 3 – ~~Business Segments~~Regulatory Matters	4647
			Note 4 ~~– Regulatory Matters~~	49
	~~Note 5~~ – Commitments and Contingencies	5754

			Note 65 – Debt and Credit Facilities	6257
			Note 76 – Asset Retirement Obligations	6559
			Note 87 – Goodwill ~~and Intangible Assets~~	6560
			Note 98 – Related Party Transactions	6761
			Note 109 – Derivatives and Hedging	6862
			Note 1110 – Investments in Debt and Equity Securities	7468
			Note 1211 – Fair Value Measurements	8072
			Note 1312 – Variable Interest Entities	8677
			Note 13 – Revenue	81
			Note 14 – ~~Common Stock~~Stockholders' Equity	9187
			Note 15 ~~– Stock-Based Compensation~~	91
	~~Note 16~~ – Employee Benefit Plans	9288
			Note 16 – Income Taxes	89
			Note 17 – ~~Income Taxes~~Subsequent Events	9690
			~~Note 18 – Subsequent Events~~	97

Item 2.			Management's Discussion and Analysis of Financial Condition and Results of Operations	9891

Item 3.			Quantitative and Qualitative Disclosures About Market Risk	~~126~~109

Item 4.			Controls and Procedures	~~126~~109

PART II. OTHER INFORMATION
Item 1.			Legal Proceedings	~~128~~110

Item 1A.			Risk Factors	~~128~~110

Item 2.			Unregistered Sales of Equity Securities and Use of Proceeds	~~128~~110

Item 6.			Exhibits	~~129~~111

			Signatures	~~132~~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.

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

AFUDC			Allowance for funds used during construction

ARO			Asset retirement obligations

Bison			Bison Insurance Company Limited

Board of Directors			Duke Energy Board of Directors

CCR			Coal Combustion Residuals

the company			Duke Energy Corporation and its subsidiaries

COVID-19			Coronavirus Disease 2019

CRC			Cinergy Receivables Company, LLC

Crystal River Unit 3			Crystal River Unit 3 Nuclear Plant

DEFPF			Duke Energy Florida Project Finance, LLC

DEFR			Duke Energy Florida Receivables, LLC

DEPR			Duke Energy Progress Receivables, LLC

DERF			Duke Energy Receivables Finance Company, LLC

DOE			Department of Energy

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

EPS			Earnings Per Share

ERCOT			Electric Reliability Council of Texas

ETR			Effective tax rate

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

GWh			Gigawatt-hours

IRA			Inflation Reduction Act

IRS			Internal Revenue Service

IURC			Indiana Utility Regulatory Commission


GLOSSARY OF TERMS



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

NCUC			North Carolina Utilities Commission

NDTF			Nuclear decommissioning trust funds

NPNS			Normal purchase/normal sale

OPEB			Other Post-Retirement Benefit Obligations

OVEC			Ohio Valley Electric Corporation

Piedmont			Piedmont Natural Gas Company, Inc.

PJM			Pennsylvania-New Jersey-Maryland Interconnection

PPA			Purchase Power Agreement

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 impact of the COVID-19 pandemic;

◦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;

◦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;

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

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

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

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

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

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

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

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

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


◦			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;

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


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


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


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


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


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


◦	~~Advancements in technology;~~


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


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


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


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


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


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


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


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


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


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


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


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

◦

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


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


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


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


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


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


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


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


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


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


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


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


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

◦The 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;

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

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

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

◦Asset or business acquisitions and dispositions, including our ability to successfully consummate the second closing of the minority investment in Duke Energy Indiana, may not yield the anticipated benefits;

◦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; and

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

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

~~PART I. FINANCIAL INFORMATION~~


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)	2022		2021		2022		2021
Operating Revenues
Regulated electric	$	7,374	$	6,495	$	19,381	$	16,972
Regulated natural gas	397		263		1,824		1,314
Nonregulated electric and other	197		193		580		573
Total operating revenues	7,968		6,951		21,785		18,859
Operating Expenses
Fuel used in electric generation and purchased power	2,629		1,844		6,418		4,702
Cost of natural gas	189		75		859		430
Operation, maintenance and other	1,394		1,507		4,471		4,319
Depreciation and amortization	1,364		1,265		3,986		3,698
Property and other taxes	378		371		1,149		1,073
Impairment of assets and other charges	(4)		211		202		342
Total operating expenses	5,950		5,273		17,085		14,564
Gains on Sales of Other Assets and Other, net	6		9		16		11
Operating Income	2,024		1,687		4,716		4,306
Other Income and Expenses
Equity in earnings of unconsolidated affiliates	26		22		87		14
Other income and expenses, net	89		238		293		493
Total other income and expenses	115		260		380		507
Interest Expense	621		581		1,815		1,688
Income From Continuing Operations Before Income Taxes	1,518		1,366		3,281		3,125
Income Tax Expense From Continuing Operations	128		90		191		210
Income From Continuing Operations	1,390		1,276		3,090		2,915
Income From Discontinued Operations, net of tax	23		—		23		—
Net Income	1,413		1,276		3,113		2,915
Add: Net Loss Attributable to Noncontrolling Interests	9		129		73		247
Net Income Attributable to Duke Energy Corporation	1,422		1,405		3,186		3,162
Less: Preferred Dividends	39		39		92		92
Net Income Available to Duke Energy Corporation Common Stockholders	$	1,383	$	1,366	$	3,094	$	3,070

Earnings Per Share – Basic and Diluted
Income from continuing operations available to Duke Energy Corporation common stockholders
Basic and Diluted	$	1.78	$	1.79	$	4.00	$	4.00

Income from discontinued operations attributable to Duke Energy Corporation common stockholders
Basic and Diluted	$	0.03	$	—	$	0.03	$	—

Net income available to Duke Energy Corporation common stockholders
Basic and Diluted	$	1.81	$	1.79	$	4.03	$	4.00

Weighted Average Shares Outstanding
Basic and Diluted	770		769		770		769

See Notes to Condensed Consolidated Financial Statements

Three Months Ended Nine Months Ended
September 30, September 30,
(in millions, except per-share amounts) 2017
2016
2017
2016
Operating Revenues
Regulated electric $ 6,091
$ 6,303
$ 16,122
$ 16,321
Regulated natural gas 247
89
1,168
355
Nonregulated electric and other 144
184
476
490
Total operating revenues 6,482
6,576
17,766
17,166
Operating Expenses

Fuel used in electric generation and purchased power 1,863
2,031
4,853
5,140
Cost of natural gas 68
6
402
64
Operation, maintenance and other 1,442
1,460
4,282
4,227
Depreciation and amortization 900
819
2,594
2,402
Property and other taxes 313
302
924
887
Impairment charges 207
10
216
14
Total operating expenses 4,793
4,628
13,271
12,734
Gains on Sales of Other Assets and Other, net 6
6
24
21
Operating Income 1,695
1,954
4,519
4,453
Other Income and Expenses

Equity in earnings (losses) of unconsolidated affiliates 36
(60 ) 101
(37 )
Other income and expenses, net 88
86
255
237
Total other income and expenses 124
26
356
200
Interest Expense 498
464
1,475
1,431
Income From Continuing Operations Before Income Taxes 1,321
1,516
3,400
3,222
Income Tax Expense from Continuing Operations 364
515
1,035
1,020
Income From Continuing Operations 957
1,001
2,365
2,202
(Loss) Income From Discontinued Operations, net of tax (2 ) 180
(4 ) 190
Net Income 955
1,181
2,361
2,392
Less: Net Income Attributable to Noncontrolling Interests 1
5
5
13
Net Income Attributable to Duke Energy Corporation $ 954
$ 1,176
$ 2,356
$ 2,379

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

~~PART I~~


FINANCIAL STATEMENTS

DUKE ENERGY CORPORATION

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in millions)	2022		2021		2022		2021
Net Income	$	1,413	$	1,276	$	3,113	$	2,915
Other Comprehensive Income (Loss), net of tax(a)

Pension and OPEB adjustments	(7)		1		(3)		3
Net unrealized gains (losses) on cash flow hedges	14		9		276		(59)
Reclassification into earnings from cash flow hedges	—		2		9		9

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

Other Comprehensive Income (Loss), net of tax	—		10		242		(53)
Comprehensive Income	1,413		1,286		3,355		2,862
Add: Comprehensive Loss Attributable to Noncontrolling Interests	4		128		56		240
Comprehensive Income Attributable to Duke Energy	1,417		1,414		3,411		3,102
Less: Preferred Dividends	39		39		92		92
Comprehensive Income Available to Duke Energy Corporation Common Stockholders	$	1,378	$	1,375	$	3,319	$	3,010

(a)Net of income tax expense of approximately $72 million for the nine months ended September, 30, 2022 and income tax benefit of $16 million for the nine months ended September 30, 2021. All other periods presented include immaterial income tax impacts.

See Notes to Condensed Consolidated Financial Statements

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

~~PART I~~


FINANCIAL STATEMENTS

DUKE ENERGY CORPORATION

Condensed Consolidated Balance Sheets

(Unaudited)


(in millions)	September 30, 2022		December 31, 2021
ASSETS
Current Assets
Cash and cash equivalents	$	453	$	343

Receivables (net of allowance for doubtful accounts of $38 at 2022 and $46 at 2021)	1,092		1,173
Receivables of VIEs (net of allowance for doubtful accounts of $136 at 2022 and $76 at 2021)	3,120		2,437
Inventory	3,487		3,199

Regulatory assets (includes $105 at 2022 and 2021 related to VIEs)	3,576		2,150
Other (includes $243 at 2022 and $256 at 2021 related to VIEs)	1,244		638
Total current assets	12,972		9,940
Property, Plant and Equipment
Cost	169,053		161,819
Accumulated depreciation and amortization	(53,241)		(50,555)
Facilities to be retired, net	95		144
Net property, plant and equipment	115,907		111,408
Other Noncurrent Assets
Goodwill	19,303		19,303
Regulatory assets (includes $1,742 at 2022 and $1,823 at 2021 related to VIEs)	13,835		12,487
Nuclear decommissioning trust funds	8,123		10,401
Operating lease right-of-use assets, net	1,199		1,266
Investments in equity method unconsolidated affiliates	951		970

Other (includes $164 at 2022 and $92 at 2021 related to VIEs)	4,050		3,812
Total other noncurrent assets	47,461		48,239
Total Assets	$	176,340	$	169,587
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable	$	4,175	$	3,629
Notes payable and commercial paper	3,606		3,304
Taxes accrued	946		749
Interest accrued	596		533
Current maturities of long-term debt (includes $635 at 2022 and $243 at 2021 related to VIEs)	3,249		3,387

Asset retirement obligations	798		647
Regulatory liabilities	1,338		1,211
Other	2,204		2,471
Total current liabilities	16,912		15,931
Long-Term Debt (includes $4,387 at 2022 and $4,854 at 2021 related to VIEs)	66,060		60,448
Other Noncurrent Liabilities
Deferred income taxes	10,244		9,379
Asset retirement obligations	12,152		12,129
Regulatory liabilities	14,017		16,152
Operating lease liabilities	1,004		1,074
Accrued pension and other post-retirement benefit costs	995		855
Investment tax credits	851		833

Other (includes $202 at 2022 and $319 at 2021 related to VIEs)	1,936		1,650
Total other noncurrent liabilities	41,199		42,072
Commitments and Contingencies
Equity
Preferred stock, Series A, $0.001 par value, 40 million depositary shares authorized and outstanding at 2022 and 2021	973		973
Preferred stock, Series B, $0.001 par value, 1 million shares authorized and outstanding at 2022 and 2021	989		989
Common stock, $0.001 par value, 2 billion shares authorized; 770 million shares outstanding at 2022 and 769 million shares outstanding at 2021	1		1
Additional paid-in capital	44,397		44,371
Retained earnings	4,063		3,265
Accumulated other comprehensive loss	(78)		(303)
Total Duke Energy Corporation stockholders' equity	50,345		49,296
Noncontrolling interests	1,824		1,840
Total equity	52,169		51,136
Total Liabilities and Equity	$	176,340	$	169,587

See Notes to Condensed Consolidated Financial Statements

(in millions) September 30, 2017 December 31, 2016
ASSETS
Current Assets
Cash and cash equivalents $ 282
$ 392
Receivables (net of allowance for doubtful accounts of $13 at 2017 and $14 at 2016) 528
751
Receivables of VIEs (net of allowance for doubtful accounts of $54 at 2017 and 2016) 2,089
1,893
Inventory 3,265
3,522
Regulatory assets (includes $51 at 2017 and $50 at 2016 related to VIEs) 1,109
1,023
Other 433
458
Total current assets 7,706
8,039
Property, Plant and Equipment
Cost 125,582
121,397
Accumulated depreciation and amortization (41,161 ) (39,406 )
Generation facilities to be retired, net 441
529
Net property, plant and equipment 84,862
82,520
Other Noncurrent Assets
Goodwill 19,418
19,425
Regulatory assets (includes $1,101 at 2017 and $1,142 at 2016 related to VIEs) 13,367
12,878
Nuclear decommissioning trust funds 6,814
6,205
Investments in equity method unconsolidated affiliates 1,366
925
Other 2,792
2,769
Total other noncurrent assets 43,757
42,202
Total Assets $ 136,325
$ 132,761
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable $ 2,645
$ 2,994
Notes payable and commercial paper 1,899
2,487
Taxes accrued 627
384
Interest accrued 538
503
Current maturities of long-term debt (includes $215 at 2017 and $260 at 2016 related to VIEs) 2,485
2,319
Asset retirement obligations 619
411
Regulatory liabilities 273
409
Other 1,734
2,044
Total current liabilities 10,820
11,551
Long-Term Debt (includes $4,219 at 2017 and $3,587 at 2016 related to VIEs) 48,929
45,576
Other Noncurrent Liabilities
Deferred income taxes 15,058
14,155
Asset retirement obligations 9,586
10,200
Regulatory liabilities 7,027
6,881
Accrued pension and other post-retirement benefit costs 1,105
1,111
Investment tax credits 534
493
Other 1,624
1,753
Total other noncurrent liabilities 34,934
34,593
Commitments and Contingencies

Equity
Common stock, $0.001 par value, 2 billion shares authorized; 700 million shares outstanding at 2017 and 2016 1
1
Additional paid-in capital 38,774
38,741
Retained earnings 2,936
2,384
Accumulated other comprehensive loss (80 ) (93 )
Total Duke Energy Corporation stockholders' equity 41,631
41,033
Noncontrolling interests 11
8
Total equity 41,642
41,041
Total Liabilities and Equity $ 136,325
$ 132,761

~~PART I~~


FINANCIAL STATEMENTS

DUKE ENERGY CORPORATION

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Nine Months Ended
	September 30,
(in millions)	2022		2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	3,113	$	2,915
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and accretion (including amortization of nuclear fuel)	4,414		4,189
Equity component of AFUDC	(151)		(126)

Impairment of assets and other charges	202		342
Deferred income taxes	209		206
Equity in earnings of unconsolidated affiliates	(87)		(14)

Contributions to qualified pension plans	(58)		—
Payments for asset retirement obligations	(418)		(389)
Provision for rate refunds	(97)		(41)
(Increase) decrease in
Net realized and unrealized mark-to-market and hedging transactions	33		116
Receivables	(356)		(167)

Inventory	(290)		268
Other current assets(a)	(2,403)		(643)
Increase (decrease) in
Accounts payable	504		(146)

Taxes accrued	206		431
Other current liabilities	263		10
Other assets	(84)		199
Other liabilities	188		77
Net cash provided by operating activities	5,188		7,227
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(8,148)		(7,089)
Contributions to equity method investments	(37)		(30)


Purchases of debt and equity securities	(3,619)		(4,292)
Proceeds from sales and maturities of debt and equity securities	3,691		4,335


Disbursements to canceled equity method investments	—		(855)

Other	(517)		(269)
Net cash used in investing activities	(8,630)		(8,200)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the:
Issuance of long-term debt	9,466		6,379

Issuance of common stock	—		5

Payments for the redemption of long-term debt	(3,803)		(3,696)
Proceeds from the issuance of short-term debt with original maturities greater than 90 days	80		109
Payments for the redemption of short-term debt with original maturities greater than 90 days	(287)		(997)
Notes payable and commercial paper	476		165

Contributions from noncontrolling interests	132		1,556
Dividends paid	(2,389)		(2,340)

Other	(124)		(21)
Net cash provided by financing activities	3,551		1,160

Net increase in cash, cash equivalents and restricted cash	109		187
Cash, cash equivalents and restricted cash at beginning of period	520		556
Cash, cash equivalents and restricted cash at end of period	$	629	$	743
Supplemental Disclosures:






Significant non-cash transactions:
Accrued capital expenditures	$	1,387	$	998

(a) Includes approximately $2.2 billion of under-collected deferred fuel regulatory assets for the nine months ended September 30, 2022

See Notes to Condensed Consolidated Financial Statements

Nine Months Ended
September 30,
(in millions) 2017
2016
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 2,361
$ 2,392
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and accretion (including amortization of nuclear fuel) 2,990
2,847
Equity component of AFUDC (175 ) (140 )
Gains on sales of other assets (28 ) (27 )
Impairment charges 216
279
Deferred income taxes 1,016
648
Equity in earnings of unconsolidated affiliates (101 ) (34 )
Accrued pension and other post-retirement benefit costs 19
12
Contributions to qualified pension plans (8 ) —
Payments for asset retirement obligations (420 ) (443 )
(Increase) decrease in
Net realized and unrealized mark-to-market and hedging transactions 4
36
Receivables 80
(276 )
Inventory 248
455
Other current assets (176 ) (163 )
Increase (decrease) in
Accounts payable (554 ) (207 )
Taxes accrued 233
417
Other current liabilities (532 ) (157 )
Other assets (160 ) (64 )
Other liabilities (2 ) 36
Net cash provided by operating activities 5,011
5,611
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (5,841 ) (5,252 )
Contributions to equity method investments (370 ) (198 )
Purchases of available-for-sale securities (3,170 ) (4,048 )
Proceeds from sales and maturities of available-for-sale securities 3,199
4,107
Change in restricted cash (29 ) (34 )
Other (149 ) (130 )
Net cash used in investing activities (6,360 ) (5,555 )
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the:
Issuance of long-term debt 5,710
8,647
Issuance of common stock related to employee benefit plans —
7
Payments for the redemption of long-term debt (2,035 ) (988 )
Proceeds from the issuance of short-term debt with original maturities greater than 90 days 265
1,424
Payments for the redemption of short-term debt with original maturities greater than 90 days (237 ) (492 )
Notes payable and commercial paper (647 ) (1,579 )
Dividends paid (1,825 ) (1,731 )
Other 8
(22 )
Net cash provided by financing activities 1,239
5,266
Changes in cash and cash equivalents associated with assets held for sale —
11
Net (decrease) increase in cash and cash equivalents (110 ) 5,333
Cash and cash equivalents at beginning of period 392
383
Cash and cash equivalents at end of period $ 282
$ 5,716
Supplemental Disclosures:
Significant non-cash transactions:
Accrued capital expenditures $ 740
$ 631

~~PART I~~


FINANCIAL STATEMENTS

DUKE ENERGY CORPORATION

Condensed Consolidated Statements of Changes in Equity

(Unaudited)


	Three Months Ended September 30, 2021 and 2022
											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(c)		Securities		Adjustments		Equity		Interests		Equity
Balance at June 30, 2021	$	1,962	769		$	1	$	43,788	$	2,687	$	(234)	$	2	$	(74)	$	48,132	$	1,413	$	49,545
Net income (loss)	—		—		—		—		1,366		—		—		—		1,366		(129)		1,237
Other comprehensive income (loss)	—		—		—		—		—		10		(2)		1		9		1		10


Common stock issuances, including dividend reinvestment and employee benefits	—		—		—		20		—		—		—		—		20		—		20

Common stock dividends	—		—		—		—		(760)		—		—		—		(760)		—		(760)

Sale of noncontrolling interest(a)	—		—		—		545		—		—		—		—		545		454		999
Contribution from noncontrolling interests, net of transaction costs(b)	—		—		—		(3)		—		—		—		—		(3)		213		210
Distributions to noncontrolling interest in subsidiaries	—		—		—		—		—		—		—		—		—		(22)		(22)
Other	—		—		—		(2)		—		—		—		—		(2)		3		1
Balance at September 30, 2021	$	1,962	$	769	$	1	$	44,348	$	3,293	$	(224)	$	—	$	(73)	$	49,307	$	1,933	$	51,240

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(b)	—		—		—		—		—		—		—		—		—		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

See Notes to Condensed Consolidated Financial Statements

Accumulated Other Comprehensive Loss
Net Unrealized
Total

Foreign
Net
(Losses) Gains
Duke Energy

Common
Additional
Currency
Losses on
on Available-
Pension and
Corporation

Stock
Common
Paid-in
Retained
Translation
Cash Flow
for-Sale-
OPEB
Stockholders'
Noncontrolling
Total
(in millions) Shares
Stock
Capital
Earnings
Adjustments
Hedges
Securities
Adjustments
Equity
Interests
Equity
Balance at December 31, 2015 688
$ 1
$ 37,968
$ 2,564
$ (692 ) $ (50 ) $ (3 ) $ (61 ) $ 39,727
$ 44
$ 39,771
Net income —
—
—
2,379
—
—
—
—
2,379
13
2,392
Other comprehensive income (loss) —
—
—
—
92
(16 ) 7
2
85
3
88
Common stock issuances, including dividend reinvestment and employee benefits 1
—
29
—
—
—
—
—
29
—
29
Common stock dividends —
—
—
(1,731 ) —
—
—
—
(1,731 ) —
(1,731 )
Distributions to noncontrolling interest in subsidiaries —
—
—
—
—
—
—
—
—
(3 ) (3 )
Balance at September 30, 2016 689
$ 1

$ 37,997

$ 3,212

$ (600 )
$ (66 )
$ 4

$ (59 )
$ 40,489

$ 57

$ 40,546

Balance at December 31, 2016 700
$ 1
$ 38,741
$ 2,384
$ —
$ (20 ) $ (1 ) $ (72 ) $ 41,033
$ 8
$ 41,041
Net income —
—
—
2,356
—
—
—
—
2,356
5
2,361
Other comprehensive income —
—
—
—
—
1
10
2
13
—
13
Common stock issuances, including dividend reinvestment and employee benefits —
—
33
—
—
—
—
—
33
—
33
Common stock dividends —
—
—
(1,825 ) —
—
—
—
(1,825 ) —
(1,825 )
Distributions to noncontrolling interest in subsidiaries —
—
—
—
—
—
—
—
—
(2 ) (2 )
Other^(a)
—
—
—
21
—
—
—
—
21
—
21
Balance at September 30, 2017 700

$ 1

$ 38,774

$ 2,936

$ —

$ (19 )
$ 9

$ (70 )
$ 41,631

$ 11

$ 41,642


~~(a)~~FINANCIAL STATEMENTS			~~Cumulative-effect adjustment due to implementation of a new accounting standard related to stock-based compensation and the associated income taxes. See Note 1 for more information.~~

~~PART I~~

DUKE ENERGY CORPORATION

Condensed Consolidated Statements of Changes in Equity

(Unaudited)


	Nine Months Ended September 30, 2021 and 2022
										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(c)		Securities		Adjustments		Equity		Interests		Equity
Balance at December 31, 2020	$	1,962	769	$	1	$	43,767	$	2,471	$	(167)	$	6	$	(76)	$	47,964	$	1,220	$	49,184
Net income (loss)	—		—	—		—		3,070		—		—		—		3,070		(247)		2,823
Other comprehensive (loss) income	—		—	—		—		—		(57)		(6)		3		(60)		7		(53)


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

Common stock dividends	—		—	—		—		(2,248)		—		—		—		(2,248)		—		(2,248)

Sale of noncontrolling interest(a)	—		—	—		545		—		—		—		—		545		454		999
Contributions from noncontrolling interests, net of transaction costs(b)	—		—	—		(6)		—		—		—		—		(6)		531		525
Distributions to noncontrolling interest in subsidiaries	—		—	—		—		—		—		—		—		—		(34)		(34)
Other	—		—	—		(1)		—		—		—		—		(1)		2		1
Balance at September 30, 2021	$	1,962	769	$	1	$	44,348	$	3,293	$	(224)	$	—	$	(73)	$	49,307	$	1,933	$	51,240

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(b)	—		—	—		—		—		—		—		—		—		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

(a)Relates to the sale of a noncontrolling interest in Duke Energy Indiana. See Note 2 for additional discussion.

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

(c)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)	2022		2021		2022		2021
Operating Revenues	$	2,175	$	2,104	$	5,844	$	5,430
Operating Expenses
Fuel used in electric generation and purchased power	544		452		1,423		1,218
Operation, maintenance and other	436		471		1,410		1,347
Depreciation and amortization	375		366		1,138		1,088
Property and other taxes	88		91		258		248
Impairment of assets and other charges	6		163		(3)		238
Total operating expenses	1,449		1,543		4,226		4,139
Gains (Losses) on Sales of Other Assets and Other, net	4		(1)		4		1
Operating Income	730		560		1,622		1,292
Other Income and Expenses, net	59		126		172		218
Interest Expense	131		137		415		400
Income Before Income Taxes	658		549		1,379		1,110
Income Tax Expense	34		16		87		40
Net Income and Comprehensive Income	$	624	$	533	$	1,292	$	1,070

See Notes to Condensed Consolidated Financial Statements

Three Months Ended Nine Months Ended
September 30, September 30,
(in millions) 2017
2016
2017
2016
Operating Revenues $ 2,136
$ 2,226
$ 5,581
$ 5,641
Operating Expenses
Fuel used in electric generation and purchased power 531
581
1,394
1,391
Operation, maintenance and other 480
493
1,431
1,481
Depreciation and amortization 281
268
804
802
Property and other taxes 67
68
206
206
Total operating expenses 1,359
1,410
3,835
3,880
Loss on Sales of Other Assets and Other, net —
(1 ) —
(1 )
Operating Income 777
815
1,746
1,760
Other Income and Expenses, net 26
39
99
121
Interest Expense 108
102
314
316
Income Before Income Taxes 695
752
1,531
1,565
Income Tax Expense 229
258
522
539
Net Income $ 466
$ 494
$ 1,009
$ 1,026
Other Comprehensive Income, net of tax
Reclassification into earnings from cash flow hedges —
—
1
1
Comprehensive Income $ 466
$ 494
$ 1,010
$ 1,027

~~PART I~~


FINANCIAL STATEMENTS

DUKE ENERGY CAROLINAS, LLC

Condensed Consolidated Balance Sheets

(Unaudited)


(in millions)	September 30, 2022		December 31, 2021
ASSETS
Current Assets
Cash and cash equivalents	$	36	$	7
Receivables (net of allowance for doubtful accounts of $2 at 2022 and $1 at 2021)	318		300
Receivables of VIEs (net of allowance for doubtful accounts of $60 at 2022 and $41 at 2021)	932		844
Receivables from affiliated companies	297		190

Inventory	1,112		1,026
Regulatory assets (includes $12 at 2022 and 2021 related to VIEs)	995		544
Other (includes $5 at 2022 and $0 at 2021 related to VIEs)	267		95
Total current assets	3,957		3,006
Property, Plant and Equipment
Cost	53,878		51,874
Accumulated depreciation and amortization	(18,504)		(17,854)
Facilities to be retired, net	86		102
Net property, plant and equipment	35,460		34,122
Other Noncurrent Assets
Regulatory assets (includes $211 at 2022 and $220 at 2021 related to VIEs)	3,969		2,935
Nuclear decommissioning trust funds	4,481		5,759
Operating lease right-of-use assets, net	87		92
Other	1,179		1,248
Total other noncurrent assets	9,716		10,034
Total Assets	$	49,133	$	47,162
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable	$	1,184	$	988
Accounts payable to affiliated companies	196		266
Notes payable to affiliated companies	584		226
Taxes accrued	265		274
Interest accrued	118		125
Current maturities of long-term debt (includes $10 at 2022 and $5 at 2021 related to VIEs)	1,019		362
Asset retirement obligations	278		249
Regulatory liabilities	442		487
Other	565		546
Total current liabilities	4,651		3,523
Long-Term Debt (includes $718 at 2022 and $703 at 2021 related to VIEs)	12,903		12,595
Long-Term Debt Payable to Affiliated Companies	300		318
Other Noncurrent Liabilities
Deferred income taxes	4,107		3,634
Asset retirement obligations	5,115		5,052
Regulatory liabilities	5,974		7,198
Operating lease liabilities	73		78
Accrued pension and other post-retirement benefit costs	39		50
Investment tax credits	301		287
Other	537		536
Total other noncurrent liabilities	16,146		16,835
Commitments and Contingencies
Equity
Member's equity	15,139		13,897
Accumulated other comprehensive loss	(6)		(6)
Total equity	15,133		13,891
Total Liabilities and Equity	$	49,133	$	47,162

See Notes to Condensed Consolidated Financial Statements

(in millions) September 30, 2017
December 31, 2016
ASSETS
Current Assets
Cash and cash equivalents $ 18
$ 14
Receivables (net of allowance for doubtful accounts of $2 at 2017 and 2016) 180
160
Receivables of VIEs (net of allowance for doubtful accounts of $7 at 2017 and 2016) 691
645
Receivables from affiliated companies 146
163
Notes receivable from affiliated companies —
66
Inventory 1,000
1,055
Regulatory assets 237
238
Other 27
37
Total current assets 2,299
2,378
Property, Plant and Equipment
Cost 42,321
41,127
Accumulated depreciation and amortization (14,969 ) (14,365 )
Net property, plant and equipment 27,352
26,762
Other Noncurrent Assets
Regulatory assets 3,077
3,159
Nuclear decommissioning trust funds 3,621
3,273
Other 910
943
Total other noncurrent assets 7,608
7,375
Total Assets $ 37,259
$ 36,515
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable $ 726
$ 833
Accounts payable to affiliated companies 159
247
Notes payable to affiliated companies 468
—
Taxes accrued 368
143
Interest accrued 135
102
Current maturities of long-term debt 705
116
Asset retirement obligations 304
222
Regulatory liabilities 105
161
Other 435
468
Total current liabilities 3,405

2,292
Long-Term Debt 8,520
9,187
Long-Term Debt Payable to Affiliated Companies 300
300
Other Noncurrent Liabilities
Deferred income taxes 6,796
6,544
Asset retirement obligations 3,297
3,673
Regulatory liabilities 2,884
2,840
Accrued pension and other post-retirement benefit costs 108
97
Investment tax credits 234
203
Other 559
607
Total other noncurrent liabilities 13,878
13,964
Commitments and Contingencies

Equity
Member's equity 11,164
10,781
Accumulated other comprehensive loss (8 ) (9 )
Total equity 11,156
10,772
Total Liabilities and Equity $ 37,259
$ 36,515

~~PART I~~


FINANCIAL STATEMENTS

DUKE ENERGY CAROLINAS, LLC

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Nine Months Ended
	September 30,
(in millions)	2022		2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	1,292	$	1,070
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization (including amortization of nuclear fuel)	1,335		1,295
Equity component of AFUDC	(75)		(46)
Gains on sales of other assets	—		(1)
Impairment of assets and other charges	(3)		238
Deferred income taxes	230		(146)


Contributions to qualified pension plans	(15)		—
Payments for asset retirement obligations	(137)		(132)
Provision for rate refunds	(55)		(29)
(Increase) decrease in
Net realized and unrealized mark-to-market and hedging transactions	—		(1)
Receivables	(17)		(172)
Receivables from affiliated companies	(107)		39
Inventory	(86)		41
Other current assets(a)	(1,139)		(153)
Increase (decrease) in
Accounts payable	104		(254)
Accounts payable to affiliated companies	(88)		(15)
Taxes accrued	(9)		315
Other current liabilities	279		72
Other assets	22		52
Other liabilities	(269)		167
Net cash provided by operating activities	1,262		2,340
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(2,313)		(1,947)


Purchases of debt and equity securities	(2,083)		(2,465)
Proceeds from sales and maturities of debt and equity securities	2,083		2,465

Other	(185)		(122)
Net cash used in investing activities	(2,498)		(2,069)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt	1,352		1,367
Payments for the redemption of long-term debt	(389)		(616)
Notes payable to affiliated companies	358		(421)
Distributions to parent	(50)		(600)
Other	(1)		(1)
Net cash provided by (used in) financing activities	1,270		(271)
Net increase in cash, cash equivalents and restricted cash	34		—
Cash, cash equivalents and restricted cash at beginning of period	8		21
Cash, cash equivalents and restricted cash at end of period	$	42	$	21
Supplemental Disclosures:
Significant non-cash transactions:
Accrued capital expenditures	$	460	$	308

(a) Includes approximately $1.1 billion of under-collected deferred fuel regulatory assets for the nine months ended September 30, 2022

See Notes to Condensed Consolidated Financial Statements

Nine Months Ended
September 30,
(in millions) 2017
2016
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 1,009
$ 1,026
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization (including amortization of nuclear fuel) 1,051
1,020
Equity component of AFUDC (79 ) (75 )
Losses on sales of other assets and other, net —
1
Deferred income taxes 330
382
Accrued pension and other post-retirement benefit costs —
3
Payments for asset retirement obligations (201 ) (204 )
(Increase) decrease in
Net realized and unrealized mark-to-market and hedging transactions 1
4
Receivables (40 ) (191 )
Receivables from affiliated companies 17
19
Inventory 50
217
Other current assets 8
81
Increase (decrease) in
Accounts payable (78 ) (179 )
Accounts payable to affiliated companies (88 ) (100 )
Taxes accrued 225
248
Other current liabilities (149 ) 51
Other assets (18 ) 57
Other liabilities (26 ) (15 )
Net cash provided by operating activities 2,012
2,345
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (1,747 ) (1,531 )
Purchases of available-for-sale securities (1,660 ) (2,070 )
Proceeds from sales and maturities of available-for-sale securities 1,664
2,070
Notes receivable from affiliated companies 66
131
Other (58 ) (65 )
Net cash used in investing activities (1,735 ) (1,465 )
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt —
992
Payments for the redemption of long-term debt (115 ) (3 )
Notes payable to affiliated companies 468
—
Distributions to parent (625 ) (1,800 )
Other (1 ) —
Net cash used in financing activities (273 ) (811 )
Net increase in cash and cash equivalents 4
69
Cash and cash equivalents at beginning of period 14
13
Cash and cash equivalents at end of period $ 18
$ 82
Supplemental Disclosures:
Significant non-cash transactions:
Accrued capital expenditures $ 292
$ 228

~~PART I~~


FINANCIAL STATEMENTS

DUKE ENERGY CAROLINAS, LLC

Condensed Consolidated Statements of Changes in Equity

(Unaudited)


	Three Months Ended September 30, 2021 and 2022
			Accumulated Other
			Comprehensive
			Loss
	Member's		Net Losses on		Total
(in millions)	Equity		Cash Flow Hedges		Equity
Balance at June 30, 2021	$	13,399	$	(7)	$	13,392
Net income	533		—		533

Distributions to parent	(300)		—		(300)
Other	(1)		—		(1)
Balance at September 30, 2021	$	13,631	$	(7)	$	13,624

Balance at June 30, 2022	$	14,515	$	(6)	$	14,509
Net income	624		—		624



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

	Nine Months Ended September 30, 2021 and 2022
			Accumulated Other
			Comprehensive
			Loss
	Member's		Net Losses on		Total
(in millions)	Equity		Cash Flow Hedges		Equity
Balance at December 31, 2020	$	13,161	$	(7)	$	13,154
Net income	1,070		—		1,070

Distributions to parent	(600)		—		(600)

Balance at September 30, 2021	$	13,631	$	(7)	$	13,624

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

See Notes to Condensed Consolidated Financial Statements

Accumulated Other
Comprehensive
Loss
Net Losses on

Member's
Cash Flow
Total
(in millions) Equity
Hedges
Equity
Balance at December 31, 2015 $ 11,617
$ (11 ) $ 11,606
Net income 1,026
—
1,026
Other comprehensive income —
1
1
Distributions to parent (1,800 ) —
(1,800 )
Other (3 ) —
(3 )
Balance at September 30, 2016 $ 10,840
$ (10 ) $ 10,830

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


FINANCIAL STATEMENTS

~~PART I~~

PROGRESS ENERGY, INC.

Condensed Consolidated Statements of Operations and Comprehensive Income

(Unaudited)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in millions)	2022		2021		2022		2021
Operating Revenues	$	3,881	$	3,233	$	10,087	$	8,417
Operating Expenses
Fuel used in electric generation and purchased power	1,605		1,074		3,927		2,702
Operation, maintenance and other	581		636		1,829		1,863
Depreciation and amortization	562		504		1,607		1,430
Property and other taxes	169		144		472		419
Impairment of assets and other charges	—		42		4		79
Total operating expenses	2,917		2,400		7,839		6,493
Gains on Sales of Other Assets and Other, net	3		8		6		9
Operating Income	967		841		2,254		1,933
Other Income and Expenses, net	45		86		150		167
Interest Expense	197		200		616		592
Income Before Income Taxes	815		727		1,788		1,508
Income Tax Expense	129		94		289		174


Net Income	686		633		1,499		1,334
Less: Net Income Attributable to Noncontrolling Interests	—		1		1		1
Net Income Attributable to Parent	$	686	$	632	$	1,498	$	1,333

Net Income	$	686	$	633	$	1,499	$	1,334
Other Comprehensive Income, net of tax
Pension and OPEB adjustments	—		(1)		—		—
Net unrealized gains on cash flow hedges	—		1		1		2


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

Other Comprehensive (Loss) Income, net of tax	(1)		—		(3)		2
Comprehensive Income	$	685	$	633	$	1,496	$	1,336
Less: Comprehensive Income Attributable to Noncontrolling Interests	—		1		1		1
Comprehensive Income Attributable to Parent	$	685	$	632	$	1,495	$	1,335

See Notes to Condensed Consolidated Financial Statements

Three Months Ended Nine Months Ended
September 30, September 30,
(in millions) 2017
2016
2017
2016
Operating Revenues $ 2,864
$ 2,965
$ 7,435
$ 7,645
Operating Expenses
Fuel used in electric generation and purchased power 1,031
1,120
2,588
2,832
Operation, maintenance and other 572
582
1,650
1,699
Depreciation and amortization 334
318
958
904
Property and other taxes 140
136
386
375
Impairment charges 135
1
137
4
Total operating expenses 2,212
2,157
5,719
5,814
Gains on Sales of Other Assets and Other, net 5
6
19
18
Operating Income 657
814
1,735
1,849
Other Income and Expenses, net 20
31
65
79
Interest Expense 193
177
595
497
Income Before Income Taxes 484
668
1,205
1,431
Income Tax Expense 141
219
384
496
Net Income 343
449
821
935
Less: Net Income Attributable to Noncontrolling Interests 2
3
7
8
Net Income Attributable to Parent $ 341
$ 446
$ 814
$ 927

Net Income $ 343
$ 449
$ 821
$ 935
Other Comprehensive Income, net of tax
Pension and OPEB adjustments 3
—
5
2
Net unrealized (loss) gain on cash flow hedges (2 ) —
4
—
Reclassification into earnings from cash flow hedges —
1
—
4
Unrealized gains on available-for-sale securities 1
1
3
2
Other Comprehensive Income, net of tax 2

2

12

8
Comprehensive Income 345
451
833
943
Less: Comprehensive Income Attributable to Noncontrolling Interests 2
3
7
8
Comprehensive Income Attributable to Parent $ 343

$ 448

$ 826

$ 935

~~PART I~~


FINANCIAL STATEMENTS

PROGRESS ENERGY, INC.

Condensed Consolidated Balance Sheets

(Unaudited)


(in millions)	September 30, 2022		December 31, 2021
ASSETS
Current Assets
Cash and cash equivalents	$	101	$	70
Receivables (net of allowance for doubtful accounts of $12 at 2022 and $11 at 2021)	292		247
Receivables of VIEs (net of allowance for doubtful accounts of $55 at 2022 and $25 at 2021)	1,344		1,006
Receivables from affiliated companies	29		121
Notes receivable from affiliated companies	232		—
Inventory	1,549		1,398
Regulatory assets (includes $93 at 2022 and 2021 related to VIEs)	1,871		1,030
Other (includes $34 at 2022 and $39 at 2021 related to VIEs)	365		125
Total current assets	5,783		3,997
Property, Plant and Equipment
Cost	63,753		60,894
Accumulated depreciation and amortization	(20,475)		(19,214)
Facilities to be retired, net	—		26
Net property, plant and equipment	43,278		41,706
Other Noncurrent Assets
Goodwill	3,655		3,655
Regulatory assets (includes $1,531 at 2022 and $1,603 at 2021 related to VIEs)	6,520		5,909
Nuclear decommissioning trust funds	3,642		4,642
Operating lease right-of-use assets, net	653		691
Other	1,227		1,242
Total other noncurrent assets	15,697		16,139
Total Assets	$	64,758	$	61,842
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable	$	1,431	$	1,099
Accounts payable to affiliated companies	475		506
Notes payable to affiliated companies	887		2,809
Taxes accrued	301		128
Interest accrued	183		192
Current maturities of long-term debt (includes $340 at 2022 and $71 at 2021 related to VIEs)	696		1,082
Asset retirement obligations	311		275
Regulatory liabilities	586		478
Other	725		868
Total current liabilities	5,595		7,437
Long-Term Debt (includes $2,004 at 2022 and $2,293 at 2021 related to VIEs)	20,303		19,591
Long-Term Debt Payable to Affiliated Companies	150		150
Other Noncurrent Liabilities
Deferred income taxes	5,015		4,564
Asset retirement obligations	5,892		5,837
Regulatory liabilities	4,949		5,566
Operating lease liabilities	563		606
Accrued pension and other post-retirement benefit costs	397		417
Other	625		526
Total other noncurrent liabilities	17,441		17,516
Commitments and Contingencies
Equity
Common Stock, $0.01 par value, 100 shares authorized and outstanding at 2022 and 2021	—		—
Additional paid-in capital	9,626		9,149
Retained earnings	11,687		8,007
Accumulated other comprehensive loss	(14)		(11)
Total Progress Energy, Inc. stockholders' equity	21,299		17,145
Noncontrolling interests	(30)		3
Total equity	21,269		17,148
Total Liabilities and Equity	$	64,758	$	61,842

See Notes to Condensed Consolidated Financial Statements

(in millions) September 30, 2017
December 31, 2016
ASSETS
Current Assets
Cash and cash equivalents $ 30
$ 46
Receivables (net of allowance for doubtful accounts of $4 at 2017 and $6 at 2016) 93
114
Receivables of VIEs (net of allowance for doubtful accounts of $7 at 2017 and 2016) 900
692
Receivables from affiliated companies —
106
Notes receivable from affiliated companies 170
80
Inventory 1,584
1,717
Regulatory assets (includes $51 at 2017 and $50 at 2016 related to VIEs) 440
401
Other 243
148
Total current assets 3,460
3,304
Property, Plant and Equipment
Cost 46,659
44,864
Accumulated depreciation and amortization (15,760 ) (15,212 )
Generation facilities to be retired, net 441
529
Net property, plant and equipment 31,340
30,181
Other Noncurrent Assets
Goodwill 3,655
3,655
Regulatory assets (includes $1,101 at 2017 and $1,142 at 2016 related to VIEs) 6,438
5,722
Nuclear decommissioning trust funds 3,194
2,932
Other 909
856
Total other noncurrent assets 14,196
13,165
Total Assets $ 48,996
$ 46,650
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable $ 1,015
$ 1,003
Accounts payable to affiliated companies 289
348
Notes payable to affiliated companies 576
729
Taxes accrued 227
83
Interest accrued 216
201
Current maturities of long-term debt (includes $53 at 2017 and $62 at 2016 related to VIEs) 770
778
Asset retirement obligations 250
189
Regulatory liabilities 121
189
Other 652
745
Total current liabilities 4,116
4,265
Long-Term Debt (includes $1,689 at 2017 and $1,741 at 2016 related to VIEs) 16,717
15,590
Long-Term Debt Payable to Affiliated Companies 150
1,173
Other Noncurrent Liabilities
Deferred income taxes 6,463
5,246
Asset retirement obligations 5,189
5,286
Regulatory liabilities 2,511
2,395
Accrued pension and other post-retirement benefit costs 535
547
Other 298
341
Total other noncurrent liabilities 14,996
13,815
Commitments and Contingencies

Equity
Common stock, $0.01 par value, 100 shares authorized and outstanding at 2017 and 2016 —
—
Additional paid-in capital 9,143
8,094
Retained earnings 3,906
3,764
Accumulated other comprehensive loss (26 ) (38 )
Total Progress Energy, Inc. stockholders' equity 13,023
11,820
Noncontrolling interests (6 ) (13 )
Total equity 13,017
11,807
Total Liabilities and Equity $ 48,996
$ 46,650

~~PART I~~


FINANCIAL STATEMENTS

PROGRESS ENERGY, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Nine Months Ended
	September 30,
(in millions)	2022		2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	1,499	$	1,334
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and accretion (including amortization of nuclear fuel)	1,826		1,707
Equity component of AFUDC	(50)		(37)

Impairment of assets and other charges	4		79
Deferred income taxes	284		235


Contributions to qualified pension plans	(13)		—
Payments for asset retirement obligations	(207)		(206)
Provision for rate refunds	(44)		(22)
(Increase) decrease in
Net realized and unrealized mark-to-market and hedging transactions	—		117
Receivables	(314)		(123)
Receivables from affiliated companies	110		96
Inventory	(154)		120
Other current assets(a)	(1,133)		(347)
Increase (decrease) in
Accounts payable	360		79
Accounts payable to affiliated companies	(31)		(68)
Taxes accrued	173		161
Other current liabilities	216		(36)
Other assets	(262)		(3)
Other liabilities	615		(139)
Net cash provided by operating activities	2,879		2,947
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(3,130)		(2,628)


Purchases of debt and equity securities	(1,301)		(1,583)
Proceeds from sales and maturities of debt and equity securities	1,357		1,649
Notes receivable from affiliated companies	(232)		—
Other	(88)		(131)
Net cash used in investing activities	(3,394)		(2,693)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt	1,452		1,190
Payments for the redemption of long-term debt	(1,136)		(977)
Notes payable to affiliated companies	509		154



Dividends to parent	(250)		(700)
Other	(36)		(2)
Net cash provided by (used in) financing activities	539		(335)
Net increase (decrease) in cash, cash equivalents and restricted cash	24		(81)
Cash, cash equivalents and restricted cash at beginning of period	113		200
Cash, cash equivalents and restricted cash at end of period	$	137	$	119
Supplemental Disclosures:






Significant non-cash transactions:
Accrued capital expenditures	$	472	$	290

(a) Includes approximately $1 billion of under-collected deferred fuel regulatory assets for the nine months ended September 30, 2022

See Notes to Condensed Consolidated Financial Statements

Nine Months Ended
September 30,
(in millions) 2017
2016
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 821
$ 935
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and accretion (including amortization of nuclear fuel) 1,130
1,071
Equity component of AFUDC (68 ) (51 )
Gains on sales of other assets (20 ) (23 )
Impairment charges 137
4
Deferred income taxes 651
425
Accrued pension and other post-retirement benefit costs (9 ) (19 )
Payments for asset retirement obligations (190 ) (203 )
(Increase) decrease in
Net realized and unrealized mark-to-market and hedging transactions 1
33
Receivables (182 ) (155 )
Receivables from affiliated companies 102
329
Inventory 126
99
Other current assets (279 ) (30 )
Increase (decrease) in
Accounts payable (281 ) (24 )
Accounts payable to affiliated companies (59 ) (109 )
Taxes accrued 143
159
Other current liabilities (184 ) (156 )
Other assets (100 ) (90 )
Other liabilities (85 ) (4 )
Net cash provided by operating activities 1,654
2,191
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (2,419 ) (2,286 )
Purchases of available-for-sale securities (1,393 ) (1,849 )
Proceeds from sales and maturities of available-for-sale securities 1,411
1,899
Proceeds from insurance 4
58
Notes receivable from affiliated companies (90 ) (43 )
Change in restricted cash 5
(6 )
Other (40 ) (17 )
Net cash used in investing activities (2,522 ) (2,244 )
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt 1,720
2,375
Payments for the redemption of long-term debt (611 ) (327 )
Notes payable to affiliated companies (129 ) (798 )
Dividends to parent (125 ) (1,075 )
Other (3 ) (1 )
Net cash provided by financing activities 852
174
Net (decrease) increase in cash and cash equivalents (16 ) 121
Cash and cash equivalents at beginning of period 46
44
Cash and cash equivalents at end of period $ 30
$ 165
Supplemental Disclosures:
Significant non-cash transactions:
Accrued capital expenditures $ 174
$ 228
Equitization of certain notes payable to affiliates 1,047
—
Dividend to parent related to a legal entity restructuring 547
—


FINANCIAL STATEMENTS

~~PART I~~

PROGRESS ENERGY, INC.

Condensed Consolidated Statements of Changes in Equity

(Unaudited)


	Three Months Ended September 30, 2021 and 2022
					Accumulated Other Comprehensive Loss
					Net Gains		Net Unrealized				Total Progress
	Additional				(Losses) 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, 2021	$	9,143	$	7,809	$	(4)	$	(2)	$	(7)	$	16,939	$	3	$	16,942
Net income	—		632		—		—		—		632		1		633
Other comprehensive income (loss)	—		—		1		—		(1)		—		—		—

Dividends to parent	—		(700)		—		—		—		(700)		—		(700)
Other	6		2		—		—		—		8		(1)		7
Balance at September 30, 2021	$	9,149	$	7,743	$	(3)	$	(2)	$	(8)	$	16,879	$	3	$	16,882

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

	Nine Months Ended September 30, 2021 and 2022
					Accumulated Other Comprehensive Loss
					Net Gains		Net Unrealized				Total Progress
	Additional				(Losses) on		Gains (Losses) on		Pension and		Energy, Inc.
	Paid-in		Retained		Cash Flow		Available-for-		OPEB		Stockholders'		Noncontrolling		Total
	Capital		Earnings		Hedges		Sale Securities		Adjustments		Equity		Interests		Equity
Balance at December 31, 2020	$	9,143	$	7,109	$	(5)	$	(2)	$	(8)	$	16,237	$	4	$	16,241
Net income	—		1,333		—		—		—		1,333		1		1,334
Other comprehensive income	—		—		2		—		—		2		—		2

Distributions to noncontrolling interests	—		—		—		—		—		—		(1)		(1)
Dividends to parent	—		(700)		—		—		—		(700)		—		(700)


Other	6		1		—		—		—		7		(1)		6
Balance at September 30, 2021	$	9,149	$	7,743	$	(3)	$	(2)	$	(8)	$	16,879	$	3	$	16,882

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

See Notes to Condensed Consolidated Financial Statements

Accumulated Other Comprehensive Loss
Net Unrealized
Total Progress

Additional
Net Losses on
Gains 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 December 31, 2015 $ 8,092
$ 4,831
$ (31 ) $ —
$ (17 ) $ 12,875
$ (22 ) $ 12,853
Net income —
927
—
—
—
927
8
935
Other comprehensive income —
—
4
2
2
8
—
8
Distributions to noncontrolling interests —
—
—
—
—
—
(1 ) (1 )
Dividends to parent —
(1,075 ) —
—
—
(1,075 ) —
(1,075 )
Other 4
—
—
—
—
4
(1 ) 3
Balance at September 30, 2016 $ 8,096

$ 4,683

$ (27 )
$ 2

$ (15 )
$ 12,739

$ (16 )
$ 12,723

Balance at December 31, 2016 $ 8,094
$ 3,764
$ (23 ) $ 1
$ (16 ) $ 11,820
$ (13 ) $ 11,807
Net income —
814
—
—
—
814
7
821
Other comprehensive income —
—
4
3
5
12
—
12
Dividends to parent^(a)
—
(672 ) —
—
—
(672 ) —
(672 )
Equitization of certain notes payable to affiliates 1,047
—
—
—
—
1,047
—
1,047
Other 2
—
—
—
—
2
—
2
Balance at September 30, 2017 $ 9,143

$ 3,906

$ (19 )
$ 4

$ (11 )
$ 13,023

$ (6 )
$ 13,017


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

~~PART I~~

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)	2022		2021		2022		2021
Operating Revenues	$	1,969	$	1,667	$	5,182	$	4,417
Operating Expenses
Fuel used in electric generation and purchased power	749		523		1,916		1,368
Operation, maintenance and other	350		368		1,101		1,092
Depreciation and amortization	313		290		890		811
Property and other taxes	46		39		136		129
Impairment of assets and other charges	—		42		4		60
Total operating expenses	1,458		1,262		4,047		3,460
Gains on Sales of Other Assets and Other, net	1		7		2		8
Operating Income	512		412		1,137		965
Other Income and Expenses, net	29		67		83		111
Interest Expense	85		79		260		226
Income Before Income Taxes	456		400		960		850
Income Tax Expense	59		25		129		50
Net Income and Comprehensive Income	$	397	$	375	$	831	$	800

See Notes to Condensed Consolidated Financial Statements

Three Months Ended Nine Months Ended
September 30, September 30,
(in millions) 2017
2016
2017
2016
Operating Revenues $ 1,460
$ 1,583
$ 3,878
$ 4,103
Operating Expenses
Fuel used in electric generation and purchased power 475
569
1,214
1,441
Operation, maintenance and other 352
360
1,032
1,067
Depreciation and amortization 182
176
536
526
Property and other taxes 40
40
120
119
Impairment charges —
1
—
1
Total operating expenses 1,049
1,146
2,902
3,154
Gains on Sales of Other Assets and Other, net —
1
3
2
Operating Income 411
438
979
951
Other Income and Expenses, net 14
18
47
47
Interest Expense 65
61
217
188
Income Before Income Taxes 360
395
809
810
Income Tax Expense 114
124
262
271
Net Income and Comprehensive Income $ 246
$ 271
$ 547
$ 539

~~PART I~~


FINANCIAL STATEMENTS

DUKE ENERGY PROGRESS, LLC

Condensed Consolidated Balance Sheets

(Unaudited)


(in millions)	September 30, 2022		December 31, 2021
ASSETS
Current Assets
Cash and cash equivalents	$	58	$	35
Receivables (net of allowance for doubtful accounts of $4 at 2022 and 2021)	130		127
Receivables of VIEs (net of allowance for doubtful accounts of $37 at 2022 and $17 at 2021)	733		574
Receivables from affiliated companies	19		65
Notes receivable from affiliated companies	329		—
Inventory	980		921
Regulatory assets (includes $39 at 2022 and 2021 related to VIEs)	658		533
Other (includes $17 at 2022 and $0 at 2021 related to VIEs)	189		83
Total current assets	3,096		2,338
Property, Plant and Equipment
Cost	38,503		37,018
Accumulated depreciation and amortization	(14,224)		(13,387)
Facilities to be retired, net	—		26
Net property, plant and equipment	24,279		23,657
Other Noncurrent Assets
Regulatory assets (includes $691 at 2022 and $720 at 2021 related to VIEs)	4,482		4,118
Nuclear decommissioning trust funds	3,204		4,089
Operating lease right-of-use assets, net	383		389
Other	749		792
Total other noncurrent assets	8,818		9,388
Total Assets	$	36,193	$	35,383
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable	$	504	$	476
Accounts payable to affiliated companies	368		310
Notes payable to affiliated companies	—		172
Taxes accrued	161		163
Interest accrued	73		96
Current maturities of long-term debt (includes $34 at 2022 and $15 at 2021 related to VIEs)	368		556
Asset retirement obligations	310		274
Regulatory liabilities	336		381
Other	356		448
Total current liabilities	2,476		2,876
Long-Term Debt (includes $1,114 at 2022 and $1,097 at 2021 related to VIEs)	10,572		9,543
Long-Term Debt Payable to Affiliated Companies	150		150
Other Noncurrent Liabilities
Deferred income taxes	2,388		2,208
Asset retirement obligations	5,529		5,401
Regulatory liabilities	4,179		4,868
Operating lease liabilities	344		350
Accrued pension and other post-retirement benefit costs	212		221
Investment tax credits	125		128
Other	86		87
Total other noncurrent liabilities	12,863		13,263
Commitments and Contingencies
Equity
Member's Equity	10,132		9,551


Total Liabilities and Equity	$	36,193	$	35,383

See Notes to Condensed Consolidated Financial Statements

(in millions) September 30, 2017
December 31, 2016
ASSETS
Current Assets
Cash and cash equivalents $ 15
$ 11
Receivables (net of allowance for doubtful accounts of $1 at 2017 and $4 at 2016) 29
51
Receivables of VIEs (net of allowance for doubtful accounts of $5 at 2017 and 2016) 472
404
Receivables from affiliated companies 8
5
Notes receivable from affiliated companies 101
165
Inventory 1,018
1,076
Regulatory assets 230
188
Other 40
57
Total current assets 1,913
1,957
Property, Plant and Equipment
Cost 29,104
28,419
Accumulated depreciation and amortization (10,793 ) (10,561 )
Generation facilities to be retired, net 441
529
Net property, plant and equipment 18,752
18,387
Other Noncurrent Assets
Regulatory assets 3,588
3,243
Nuclear decommissioning trust funds 2,463
2,217
Other 565
525
Total other noncurrent assets 6,616
5,985
Total Assets $ 27,281
$ 26,329
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable $ 271
$ 589
Accounts payable to affiliated companies 207
227
Taxes accrued 137
104
Interest accrued 91
102
Current maturities of long-term debt 203
452
Asset retirement obligations 250
189
Regulatory liabilities 107
158
Other 318
365
Total current liabilities 1,584
2,186
Long-Term Debt 7,204
6,409
Long-Term Debt Payable to Affiliated Companies 150
150
Other Noncurrent Liabilities
Deferred income taxes 3,606
3,323
Asset retirement obligations 4,426
4,508
Regulatory liabilities 2,097
1,946
Accrued pension and other post-retirement benefit costs 246
252
Investment tax credits 144
146
Other 44
51
Total other noncurrent liabilities 10,563
10,226
Commitments and Contingencies

Equity
Member's Equity 7,780
7,358
Total Liabilities and Equity $ 27,281
$ 26,329

~~PART I~~


FINANCIAL STATEMENTS

DUKE ENERGY PROGRESS, LLC

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Nine Months Ended
	September 30,
(in millions)	2022		2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	831	$	800
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization (including amortization of nuclear fuel)	1,034		951
Equity component of AFUDC	(37)		(25)

Impairment of assets and other charges	4		60
Deferred income taxes	66		22


Contributions to qualified pension plans	(8)		—
Payments for asset retirement obligations	(133)		(129)
Provision for rate refunds	(44)		(22)
(Increase) decrease in
Net realized and unrealized mark-to-market and hedging transactions	—		108
Receivables	(95)		(66)
Receivables from affiliated companies	64		(18)
Inventory	(58)		95
Other current assets	(266)		(79)
Increase (decrease) in
Accounts payable	7		20
Accounts payable to affiliated companies	58		(102)
Taxes accrued	(1)		75
Other current liabilities	122		(36)
Other assets	(105)		48
Other liabilities	39		(32)
Net cash provided by operating activities	1,478		1,670
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(1,506)		(1,313)


Purchases of debt and equity securities	(1,148)		(1,306)
Proceeds from sales and maturities of debt and equity securities	1,141		1,291
Notes receivable from affiliated companies	(329)		—
Other	(11)		(36)
Net cash used in investing activities	(1,853)		(1,364)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt	1,448		1,190

Payments for the redemption of long-term debt	(612)		(605)
Notes payable to affiliated companies	(172)		(178)

Distributions to parent	(250)		(700)
Other	(1)		(1)
Net cash provided by (used in) financing activities	413		(294)
Net increase in cash, cash equivalents and restricted cash	38		12
Cash, cash equivalents and restricted cash at beginning of period	39		39
Cash, cash equivalents and restricted cash at end of period	$	77	$	51
Supplemental Disclosures:
Significant non-cash transactions:
Accrued capital expenditures	$	184	$	82

See Notes to Condensed Consolidated Financial Statements

Nine Months Ended
September 30,
(in millions) 2017
2016
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 547
$ 539
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization (including amortization of nuclear fuel) 691
679
Equity component of AFUDC (35 ) (34 )
Gains on sales of other assets (4 ) (4 )
Impairment charges —
1
Deferred income taxes 287
325
Accrued pension and other post-retirement benefit costs (15 ) (24 )
Payments for asset retirement obligations (149 ) (163 )
(Increase) decrease in
Net realized and unrealized mark-to-market and hedging transactions (2 ) —
Receivables (47 ) (78 )
Receivables from affiliated companies (3 ) 11
Inventory 52
91
Other current assets (34 ) 37
Increase (decrease) in
Accounts payable (286 ) (44 )
Accounts payable to affiliated companies (20 ) (47 )
Taxes accrued 33
76
Other current liabilities (139 ) 37
Other assets (49 ) (32 )
Other liabilities (9 ) (10 )
Net cash provided by operating activities 818
1,360
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (1,247 ) (1,106 )
Purchases of available-for-sale securities (995 ) (1,470 )
Proceeds from sales and maturities of available-for-sale securities 974
1,448
Notes receivable from affiliated companies 64
(65 )
Other (26 ) (27 )
Net cash used in investing activities (1,230 ) (1,220 )
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt 812
505
Payments for the redemption of long-term debt (270 ) (15 )
Notes payable to affiliated companies —
(209 )
Distributions to parent (125 ) (301 )
Other (1 ) 1
Net cash provided by (used in) financing activities 416
(19 )
Net increase in cash and cash equivalents 4
121
Cash and cash equivalents at beginning of period 11
15
Cash and cash equivalents at end of period $ 15
$ 136
Supplemental Disclosures:
Significant non-cash transactions:
Accrued capital expenditures $ 116
$ 66

~~PART I~~


FINANCIAL STATEMENTS

DUKE ENERGY PROGRESS, LLC

Condensed Consolidated Statements of Changes in Equity

(Unaudited)


	Three Months Ended
	September 30, 2021 and 2022

(in millions)	Member's Equity
Balance at June 30, 2021	$	9,685
Net income	375
Distributions to parent	(700)


Balance at September 30, 2021	$	9,360

Balance at June 30, 2022	$	9,735
Net income	397



Balance at September 30, 2022	$	10,132

	Nine Months Ended
	September 30, 2021 and 2022

(in millions)	Member's Equity
Balance at December 31, 2020	$	9,260
Net income	800
Distributions to parent	(700)


Balance at September 30, 2021	$	9,360

Balance at December 31, 2021	$	9,551
Net income	831


Distributions to parent	(250)

Balance at September 30, 2022	$	10,132

See Notes to Condensed Consolidated Financial Statements

Member's
(in millions) Equity
Balance at December 31, 2015 $ 7,059
Net income 539
Distributions to parent (301 )
Balance at September 30, 2016 $ 7,297

Balance at December 31, 2016 $ 7,358
Net income 547
Distributions to parent (125 )
Balance at September 30, 2017 $ 7,780


FINANCIAL STATEMENTS

~~PART I~~

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)	2022		2021		2022		2021
Operating Revenues	$	1,907	$	1,561	$	4,890	$	3,987
Operating Expenses
Fuel used in electric generation and purchased power	856		552		2,011		1,335
Operation, maintenance and other	226		263		716		760
Depreciation and amortization	249		214		717		619
Property and other taxes	123		105		335		290
Impairment of assets and other charges	—		—		—		19
Total operating expenses	1,454		1,134		3,779		3,023
Gains on Sales of Other Assets and Other, net	3		1		5		1
Operating Income	456		428		1,116		965
Other Income and Expenses, net	19		18		74		54
Interest Expense	84		79		258		239
Income Before Income Taxes	391		367		932		780
Income Tax Expense	72		70		181		149
Net Income	$	319	$	297	$	751	$	631




Other Comprehensive Loss, net of tax

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





Comprehensive Income	$	318	$	297	$	748	$	631

See Notes to Condensed Consolidated Financial Statements

Three Months Ended Nine Months Ended
September 30, September 30,
(in millions) 2017
2016
2017
2016
Operating Revenues $ 1,401
$ 1,381
$ 3,551
$ 3,538
Operating Expenses
Fuel used in electric generation and purchased power 557
550
1,374
1,391
Operation, maintenance and other 216
219
610
623
Depreciation and amortization 154
142
423
378
Property and other taxes 99
96
265
256
Impairment charges 135
1
137
4
Total operating expenses 1,161
1,008
2,809
2,652
Operating Income 240
373
742
886
Other Income and Expenses, net 15
11
45
30
Interest Expense 71
62
211
143
Income Before Income Taxes 184
322
576
773
Income Tax Expense 64
116
208
286
Net Income $ 120
$ 206
$ 368
$ 487
Other Comprehensive Income, net of tax

Unrealized gains on available-for-sale securities 1
1
3
2
Comprehensive Income $ 121
$ 207
$ 371

$ 489

~~PART I~~


FINANCIAL STATEMENTS

DUKE ENERGY FLORIDA, LLC

Condensed Consolidated Balance Sheets

(Unaudited)


(in millions)	September 30, 2022		December 31, 2021
ASSETS
Current Assets
Cash and cash equivalents	$	25	$	23
Receivables (net of allowance for doubtful accounts of $8 at 2022 and 2021)	159		117
Receivables of VIEs (net of allowance for doubtful accounts of $18 at 2022 and $8 at 2021)	611		432
Receivables from affiliated companies	6		16

Inventory	569		477
Regulatory assets (includes $54 at 2022 and $54 at 2021 related to VIEs)	1,212		497
Other (includes $17 at 2022 and $39 at 2021 related to VIEs)	162		80
Total current assets	2,744		1,642
Property, Plant and Equipment
Cost	25,243		23,865
Accumulated depreciation and amortization	(6,244)		(5,819)
Net property, plant and equipment	18,999		18,046
Other Noncurrent Assets
Regulatory assets (includes $840 at 2022 and $883 at 2021 related to VIEs)	2,038		1,791
Nuclear decommissioning trust funds	438		553
Operating lease right-of-use assets, net	269		302
Other	431		399
Total other noncurrent assets	3,176		3,045
Total Assets	$	24,919	$	22,733
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable	$	926	$	623
Accounts payable to affiliated companies	119		209
Notes payable to affiliated companies	983		199
Taxes accrued	174		51
Interest accrued	82		68
Current maturities of long-term debt (includes $306 at 2022 and $56 at 2021 related to VIEs)	328		76
Asset retirement obligations	1		1
Regulatory liabilities	250		98
Other	338		408
Total current liabilities	3,201		1,733
Long-Term Debt (includes $890 at 2022 and $1,196 at 2021 related to VIEs)	8,089		8,406
Other Noncurrent Liabilities
Deferred income taxes	2,723		2,434
Asset retirement obligations	363		436
Regulatory liabilities	770		698
Operating lease liabilities	219		256
Accrued pension and other post-retirement benefit costs	156		166
Other	355		309
Total other noncurrent liabilities	4,586		4,299
Commitments and Contingencies
Equity
Member's equity	9,049		8,298
Accumulated other comprehensive loss	(6)		(3)
Total equity	9,043		8,295
Total Liabilities and Equity	$	24,919	$	22,733

See Notes to Condensed Consolidated Financial Statements

(in millions) September 30, 2017
December 31, 2016
ASSETS
Current Assets
Cash and cash equivalents $ 8
$ 16
Receivables (net of allowance for doubtful accounts of $3 at 2017 and $2 at 2016) 61
61
Receivables of VIEs (net of allowance for doubtful accounts of $2 at 2017 and 2016) 428
288
Receivables from affiliated companies —
5
Notes receivable from affiliated companies 70
—
Inventory 566
641
Regulatory assets (includes $51 at 2017 and $50 at 2016 related to VIEs) 211
213
Other (includes $20 at 2017 and $53 at 2016 related to VIEs) 154
125
Total current assets 1,498
1,349
Property, Plant and Equipment
Cost 17,546
16,434
Accumulated depreciation and amortization (4,960 ) (4,644 )
Net property, plant and equipment 12,586
11,790
Other Noncurrent Assets
Regulatory assets (includes $1,101 at 2017 and $1,142 at 2016 related to VIEs) 2,850
2,480
Nuclear decommissioning trust funds 731
715
Other 293
278
Total other noncurrent assets 3,874
3,473
Total Assets $ 17,958
$ 16,612
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable $ 744
$ 413
Accounts payable to affiliated companies 90
125
Notes payable to affiliated companies —
297
Taxes accrued 143
33
Interest accrued 71
49
Current maturities of long-term debt (includes $53 at 2017 and $62 at 2016 related to VIEs) 567
326
Regulatory liabilities 14
31
Other 310
352
Total current liabilities 1,939
1,626
Long-Term Debt (includes $1,389 at 2017 and $1,442 at 2016 related to VIEs) 6,129
5,799
Other Noncurrent Liabilities
Deferred income taxes 3,076
2,694
Asset retirement obligations 763
778
Regulatory liabilities 414
448
Accrued pension and other post-retirement benefit costs 257
262
Other 106
105
Total other noncurrent liabilities 4,616
4,287
Commitments and Contingencies

Equity
Member's equity 5,270
4,899
Accumulated other comprehensive income 4
1
Total equity 5,274
4,900
Total Liabilities and Equity $ 17,958
$ 16,612

~~PART I~~


FINANCIAL STATEMENTS

DUKE ENERGY FLORIDA, LLC

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Nine Months Ended
	September 30,
(in millions)	2022		2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	751	$	631
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and accretion	790		752
Equity component of AFUDC	(13)		(12)

Impairment of assets and other charges	—		19
Deferred income taxes	237		207


Contributions to qualified pension plans	(5)		—
Payments for asset retirement obligations	(73)		(77)

(Increase) decrease in
Net realized and unrealized mark-to-market and hedging transactions	—		7
Receivables	(218)		(57)
Receivables from affiliated companies	10		—
Inventory	(95)		25
Other current assets(a)	(814)		(247)
Increase (decrease) in
Accounts payable	354		59
Accounts payable to affiliated companies	(90)		44
Taxes accrued	123		95
Other current liabilities	72		(5)
Other assets	(162)		(46)
Other liabilities	37		(94)
Net cash provided by operating activities	904		1,301
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(1,624)		(1,316)


Purchases of debt and equity securities	(153)		(277)
Proceeds from sales and maturities of debt and equity securities	216		358

Other	(76)		(95)
Net cash used in investing activities	(1,637)		(1,330)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt	4		—
Payments for the redemption of long-term debt	(74)		(372)
Notes payable to affiliated companies	784		408

Other	(1)		—
Net cash provided by financing activities	713		36
Net (decrease) increase in cash, cash equivalents and restricted cash	(20)		7
Cash, cash equivalents and restricted cash at beginning of period	62		50
Cash, cash equivalents and restricted cash at end of period	$	42	$	57
Supplemental Disclosures:
Significant non-cash transactions:
Accrued capital expenditures	$	288	$	208

(a) Includes approximately $746 million of under-collected deferred fuel regulatory assets for the nine months ended September 30, 2022

See Notes to Condensed Consolidated Financial Statements

Nine Months Ended
September 30,
(in millions) 2017
2016
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 368
$ 487
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and accretion 431
383
Equity component of AFUDC (33 ) (16 )
Impairment charges 137
4
Deferred income taxes 366
136
Accrued pension and other post-retirement benefit costs 3
2
Payments for asset retirement obligations (41 ) (41 )
(Increase) decrease in
Net realized and unrealized mark-to-market and hedging transactions 3
34
Receivables (140 ) (78 )
Receivables from affiliated companies 1
41
Inventory 74
8
Other current assets (162 ) (32 )
Increase (decrease) in
Accounts payable 6
20
Accounts payable to affiliated companies (35 ) (55 )
Taxes accrued 109
61
Other current liabilities (45 ) (183 )
Other assets (35 ) (56 )
Other liabilities (71 ) 1
Net cash provided by operating activities 936
716
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (1,172 ) (1,179 )
Purchases of available-for-sale securities (398 ) (379 )
Proceeds from sales and maturities of available-for-sale securities 437
450
Proceeds from insurance 4
58
Notes receivable from affiliated companies (70 ) —
Change in restricted cash —
(6 )
Other (14 ) 10
Net cash used in investing activities (1,213 ) (1,046 )
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt 908
1,870
Payments for the redemption of long-term debt (341 ) (12 )
Notes payable to affiliated companies (297 ) (750 )
Distributions to parent —
(774 )
Other (1 ) (2 )
Net cash provided by financing activities 269
332
Net (decrease) increase in cash and cash equivalents (8 ) 2
Cash and cash equivalents at beginning of period 16
8
Cash and cash equivalents at end of period $ 8
$ 10
Supplemental Disclosures:
Significant non-cash transactions:
Accrued capital expenditures $ 102
$ 162

~~PART I~~


FINANCIAL STATEMENTS

DUKE ENERGY FLORIDA, LLC

Condensed Consolidated Statements of Changes in Equity

(Unaudited)


	Three Months Ended September 30, 2021 and 2022
			Accumulated
			Other
			Comprehensive
			Loss
			Net Unrealized
			Losses on
	Member's		Available-for-Sale		Total
(in millions)	Equity		Securities		Equity
Balance at June 30, 2021	$	7,893	$	(2)	$	7,891
Net income	297		—		297






Balance at September 30, 2021	$	8,190	$	(2)	$	8,188

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

	Nine Months Ended September 30, 2021 and 2022
			Accumulated
			Other
			Comprehensive
			Loss
			Net Unrealized
			Losses on
	Member's		Available-for-Sale		Total
(in millions)	Equity		Securities		Equity
Balance at December 31, 2020	$	7,560	$	(2)	$	7,558
Net income	631		—		631





Other	(1)		—		(1)
Balance at September 30, 2021	$	8,190	$	(2)	$	8,188

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

See Notes to Condensed Consolidated Financial Statements

Accumulated
Other
Comprehensive
Income
Net Unrealized

Gains on

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

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


FINANCIAL STATEMENTS

~~PART I~~

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)	2022		2021		2022		2021
Operating Revenues
Regulated electric	$	507	$	413	$	1,320	$	1,119
Regulated natural gas	121		93		491		375

Total operating revenues	628		506		1,811		1,494
Operating Expenses
Fuel used in electric generation and purchased power	185		119		439		294

Cost of natural gas	21		9		174		76
Operation, maintenance and other	121		116		408		335
Depreciation and amortization	84		79		247		228
Property and other taxes	79		91		272		266
Impairment of assets and other charges	(11)		—		(11)		5
Total operating expenses	479		414		1,529		1,204
Losses on Sales of Other Assets and Other, net	(1)		—		—		—
Operating Income	148		92		282		290
Other Income and Expenses, net	4		4		16		14
Interest Expense	32		29		92		82
Income Before Income Taxes	120		67		206		222
Income Tax Expense (Benefit)	17		9		(30)		34


Net Income and Comprehensive Income	$	103	$	58	$	236	$	188

See Notes to Condensed Consolidated Financial Statements

Three Months Ended Nine Months Ended
September 30, September 30,
(in millions) 2017
2016
2017

2016
Operating Revenues
Regulated electric $ 371
$ 390
$ 1,036
$ 1,053
Regulated natural gas 90
89
360
358
Nonregulated electric and other 10
10
30
22
Total operating revenues 471
489
1,426
1,433
Operating Expenses
Fuel used in electric generation and purchased power – regulated 100
129
283
340
Fuel used in electric generation and purchased power – nonregulated 13
14
42
37
Cost of natural gas 5
6
69
64
Operation, maintenance and other 124
126
385
367
Depreciation and amortization 63
50
193
175
Property and other taxes 65
59
204
195
Impairment charges —
—
1
—
Total operating expenses 370
384
1,177
1,178
Gains on Sales of Other Assets and Other, net 1
1
1
2
Operating Income 102
106
250
257
Other Income and Expenses, net 4
3
12
6
Interest Expense 22
22
67
63
Income From Continuing Operations Before Income Taxes 84
87
195
200
Income Tax Expense From Continuing Operations 28
32
67
65
Income From Continuing Operations 56
55
128
135
(Loss) Income From Discontinued Operations, net of tax (1 ) 34
(1 ) 36
Net Income and Comprehensive Income $ 55
$ 89
$ 127
$ 171

~~PART I~~


FINANCIAL STATEMENTS

DUKE ENERGY OHIO, INC.

Condensed Consolidated Balance Sheets

(Unaudited)


(in millions)	September 30, 2022		December 31, 2021
ASSETS
Current Assets
Cash and cash equivalents	$	9	$	13
Receivables (net of allowance for doubtful accounts of $6 at 2022 and $4 at 2021)	88		96
Receivables from affiliated companies	211		122
Notes receivable from affiliated companies	—		15
Inventory	118		116

Regulatory assets	81		72
Other	115		57
Total current assets	622		491
Property, Plant and Equipment
Cost	12,283		11,725
Accumulated depreciation and amortization	(3,203)		(3,106)
Generation facilities to be retired, net	—		6
Net property, plant and equipment	9,080		8,625
Other Noncurrent Assets
Goodwill	920		920
Regulatory assets	584		635

Operating lease right-of-use assets, net	18		19

Other	91		84
Total other noncurrent assets	1,613		1,658
Total Assets	$	11,315	$	10,774
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable	$	327	$	348
Accounts payable to affiliated companies	60		64
Notes payable to affiliated companies	501		103
Taxes accrued	231		275
Interest accrued	33		30
Current maturities of long-term debt	300		—

Asset retirement obligations	23		13
Regulatory liabilities	71		62
Other	86		82
Total current liabilities	1,632		977
Long-Term Debt	2,919		3,168
Long-Term Debt Payable to Affiliated Companies	25		25
Other Noncurrent Liabilities
Deferred income taxes	1,133		1,050
Asset retirement obligations	132		123
Regulatory liabilities	572		739
Operating lease liabilities	18		18
Accrued pension and other post-retirement benefit costs	86		109

Other	97		101
Total other noncurrent liabilities	2,038		2,140
Commitments and Contingencies
Equity
Common Stock, $8.50 par value, 120 million shares authorized; 90 million shares outstanding at 2022 and 2021	762		762
Additional paid-in capital	3,100		3,100
Retained earnings	839		602

Total equity	4,701		4,464
Total Liabilities and Equity	$	11,315	$	10,774

See Notes to Condensed Consolidated Financial Statements

(in millions) September 30, 2017
December 31, 2016
ASSETS
Current Assets
Cash and cash equivalents $ 7
$ 13
Receivables (net of allowance for doubtful accounts of $2 at 2017 and 2016) 68
71
Receivables from affiliated companies 81
129
Notes receivable from affiliated companies 87
94
Inventory 139
137
Regulatory assets 57
37
Other 18
37
Total current assets 457
518
Property, Plant and Equipment
Cost 8,509
8,126
Accumulated depreciation and amortization (2,658 ) (2,579 )
Net property, plant and equipment 5,851
5,547
Other Noncurrent Assets
Goodwill 920
920
Regulatory assets 510
520
Other 27
23
Total other noncurrent assets 1,457
1,463
Total Assets $ 7,765
$ 7,528
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable $ 251
$ 282
Accounts payable to affiliated companies 59
63
Notes payable to affiliated companies —
16
Taxes accrued 157
178
Interest accrued 33
19
Current maturities of long-term debt —
1
Asset retirement obligations 6
—
Regulatory liabilities 15
21
Other 74
91
Total current liabilities 595
671
Long-Term Debt 2,042
1,858
Long-Term Debt Payable to Affiliated Companies 25
25
Other Noncurrent Liabilities
Deferred income taxes 1,512
1,443
Asset retirement obligations 75
77
Regulatory liabilities 232
236
Accrued pension and other post-retirement benefit costs 52
56
Other 134
166
Total other noncurrent liabilities 2,005
1,978
Commitments and Contingencies

Equity
Common stock, $8.50 par value, 120 million shares authorized; 90 million shares outstanding at 2017 and 2016 762
762
Additional paid-in capital 2,670
2,695
Accumulated deficit (334 ) (461 )
Total equity 3,098
2,996
Total Liabilities and Equity $ 7,765
$ 7,528

~~PART I~~


FINANCIAL STATEMENTS

DUKE ENERGY OHIO, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Nine Months Ended
	September 30,
(in millions)	2022		2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	236	$	188
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	251		231
Equity component of AFUDC	(7)		(5)

Impairment of assets and other charges	(11)		5
Deferred income taxes	(13)		27


Contributions to qualified pension plans	(3)		—
Payments for asset retirement obligations	(7)		(1)
Provision for rate refunds	5		12
(Increase) decrease in

Receivables	8		(9)
Receivables from affiliated companies	11		(11)
Inventory	(2)		(4)
Other current assets	(60)		(34)
Increase (decrease) in
Accounts payable	(6)		27
Accounts payable to affiliated companies	(4)		(9)
Taxes accrued	(44)		(37)
Other current liabilities	(76)		(12)
Other assets	(54)		(35)
Other liabilities	80		8
Net cash provided by operating activities	304		341
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(623)		(615)




Notes receivable from affiliated companies	(85)		36
Other	(47)		(42)
Net cash used in investing activities	(755)		(621)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt	50		—

Notes payable to affiliated companies	399		282

Other	(2)		—
Net cash provided by financing activities	447		282
Net (decrease) increase in cash and cash equivalents	(4)		2
Cash and cash equivalents at beginning of period	13		14
Cash and cash equivalents at end of period	$	9	$	16
Supplemental Disclosures:
Significant non-cash transactions:
Accrued capital expenditures	$	119	$	103

See Notes to Condensed Consolidated Financial Statements

Nine Months Ended
September 30,
(in millions) 2017
2016
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 127
$ 171
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 196
178
Equity component of AFUDC (8 ) (4 )
Gains on sales of other assets (1 ) (2 )
Impairment charges 1
—
Deferred income taxes 70
36
Accrued pension and other post-retirement benefit costs 3
4
Contributions to qualified pension plans (4 ) —
Payments for asset retirement obligations (4 ) (4 )
(Increase) decrease in
Net realized and unrealized mark-to-market and hedging transactions 1
—
Receivables 3
(1 )
Receivables from affiliated companies 48
(3 )
Inventory 1
(5 )
Other current assets (8 ) 50
Increase (decrease) in
Accounts payable (48 ) 13
Accounts payable to affiliated companies (4 ) (4 )
Taxes accrued (21 ) (13 )
Other current liabilities (6 ) (53 )
Other assets (13 ) (8 )
Other liabilities (2 ) (28 )
Net cash provided by operating activities 331
327
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (457 ) (334 )
Notes receivable from affiliated companies 7
(47 )
Other (25 ) (21 )
Net cash used in investing activities (475 ) (402 )
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt 182
341
Payments for the redemption of long-term debt (2 ) (53 )
Notes payable to affiliated companies (16 ) (103 )
Dividends to parent (25 ) (25 )
Other (1 ) —
Net cash provided by financing activities 138
160
Net (decrease) increase in cash and cash equivalents (6 ) 85
Cash and cash equivalents at beginning of period 13
14
Cash and cash equivalents at end of period $ 7
$ 99
Supplemental Disclosures:
Significant non-cash transactions:
Accrued capital expenditures $ 65
$ 56

~~PART I~~


FINANCIAL STATEMENTS

DUKE ENERGY OHIO, INC.

Condensed Consolidated Statements of Changes in Equity

(Unaudited)


	Three Months Ended September 30, 2021 and 2022
			Additional
	Common		Paid-in		Retained		Total
(in millions)	Stock		Capital		Earnings		Equity
Balance at June 30, 2021	$	762	$	2,776	$	527	$	4,065
Net income	—		—		58		58


Balance at September 30, 2021	$	762	$	2,776	$	585	$	4,123

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

	Nine Months Ended September 30, 2021 and 2022
			Additional
	Common		Paid-in		Retained		Total
(in millions)	Stock		Capital		Earnings		Equity
Balance at December 31, 2020	$	762	$	2,776	$	397	$	3,935
Net income	—		—		188		188


Balance at September 30, 2021	$	762	$	2,776	$	585	$	4,123

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

See Notes to Condensed Consolidated Financial Statements

Additional

Common
Paid-in
Accumulated
Total
(in millions) Stock
Capital
Deficit
Equity
Balance at December 31, 2015 $ 762
$ 2,720
$ (698 ) $ 2,784
Net income —
—
171
171
Dividends to parent —
(25 ) —
(25 )
Contribution from parent —
—
9
9
Balance at September 30, 2016 $ 762
$ 2,695
$ (518 ) $ 2,939

Balance at December 31, 2016 $ 762
$ 2,695
$ (461 ) $ 2,996
Net income —
—
127
127
Dividends to parent —
(25 ) —
(25 )
Balance at September 30, 2017 $ 762

$ 2,670

$ (334 )
$ 3,098


FINANCIAL STATEMENTS

~~PART I~~

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)	2022		2021		2022		2021
Operating Revenues	$	1,095	$	886	$	2,835	$	2,366
Operating Expenses
Fuel used in electric generation and purchased power	556		292		1,234		710
Operation, maintenance and other	177		173		551		543
Depreciation and amortization	167		154		478		458
Property and other taxes	13		16		60		57
Impairment of assets and other charges	—		—		211		8
Total operating expenses	913		635		2,534		1,776
Gains on Sales of Other Assets and Other, net	—		1		—		—
Operating Income	182		252		301		590
Other Income and Expenses, net	9		12		27		31
Interest Expense	48		49		138		148
Income Before Income Taxes	143		215		190		473
Income Tax Expense	24		34		1		77
Net Income and Comprehensive Income	$	119	$	181	$	189	$	396

See Notes to Condensed Consolidated Financial Statements

Three Months Ended Nine Months Ended
September 30, September 30,
(in millions) 2017
2016
2017
2016
Operating Revenues $ 802
$ 809
$ 2,302
$ 2,225
Operating Expenses
Fuel used in electric generation and purchased power 259
242
744
690
Operation, maintenance and other 175
175
541
526
Depreciation and amortization 120
123
336
345
Property and other taxes 19
22
56
67
Impairment charges —
8
—
8
Total operating expenses 573
570
1,677
1,636
Gain on Sale of Other Assets and Other, net 1

—
1
—
Operating Income 230
239

626

589
Other Income and Expenses, net 10
5
27
15
Interest Expense 44
45
132
136
Income Before Income Taxes 196
199

521

468
Income Tax Expense 75
70
203
159
Net Income $ 121
$ 129

$ 318

$ 309
Other Comprehensive Loss, net of tax
Reclassification into earnings from cash flow hedges —
—
—
(1 )
Comprehensive Income $ 121
$ 129

$ 318

$ 308

~~PART I~~


FINANCIAL STATEMENTS

DUKE ENERGY INDIANA, LLC

Condensed Consolidated Balance Sheets

(Unaudited)


(in millions)	September 30, 2022		December 31, 2021
ASSETS
Current Assets
Cash and cash equivalents	$	32	$	6
Receivables (net of allowance for doubtful accounts of $4 at 2022 and $3 at 2021)	106		100
Receivables from affiliated companies	247		98
Notes receivable from affiliated companies	—		134
Inventory	452		418
Regulatory assets	384		277
Other	245		68
Total current assets	1,466		1,101
Property, Plant and Equipment
Cost	17,916		17,343
Accumulated depreciation and amortization	(5,920)		(5,583)

Net property, plant and equipment	11,996		11,760
Other Noncurrent Assets
Regulatory assets	1,030		1,278

Operating lease right-of-use assets, net	49		53
Other	275		296
Total other noncurrent assets	1,354		1,627
Total Assets	$	14,816	$	14,488
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable	$	310	$	282
Accounts payable to affiliated companies	72		221
Notes payable to affiliated companies	483		—
Taxes accrued	74		73
Interest accrued	59		49
Current maturities of long-term debt	3		84
Asset retirement obligations	185		110
Regulatory liabilities	175		127
Other	178		105
Total current liabilities	1,539		1,051
Long-Term Debt	4,157		4,089
Long-Term Debt Payable to Affiliated Companies	150		150
Other Noncurrent Liabilities
Deferred income taxes	1,323		1,303
Asset retirement obligations	773		877
Regulatory liabilities	1,468		1,565
Operating lease liabilities	47		50
Accrued pension and other post-retirement benefit costs	135		167
Investment tax credits	186		177
Other	59		44
Total other noncurrent liabilities	3,991		4,183
Commitments and Contingencies
Equity
Member's Equity	4,979		5,015
Total Liabilities and Equity	$	14,816	$	14,488

See Notes to Condensed Consolidated Financial Statements

(in millions) September 30, 2017
December 31, 2016
ASSETS
Current Assets
Cash and cash equivalents $ 22
$ 17
Receivables (net of allowance for doubtful accounts of $1 at 2017 and 2016) 74
105
Receivables from affiliated companies 83
114
Notes receivable from affiliated companies 29
86
Inventory 450
504
Regulatory assets 158
149
Other 34
45
Total current assets 850
1,020
Property, Plant and Equipment
Cost 14,716
14,241
Accumulated depreciation and amortization (4,592 ) (4,317 )
Net property, plant and equipment 10,124
9,924
Other Noncurrent Assets
Regulatory assets 1,123
1,073
Other 170
147
Total other noncurrent assets 1,293
1,220
Total Assets $ 12,267
$ 12,164
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable $ 188
$ 263
Accounts payable to affiliated companies 73
74
Taxes accrued 146
31
Interest accrued 54
61
Current maturities of long-term debt 3
3
Asset retirement obligations 58
—
Regulatory liabilities 28
40
Other 111
93
Total current liabilities 661
565
Long-Term Debt 3,632
3,633
Long-Term Debt Payable to Affiliated Companies 150
150
Other Noncurrent Liabilities
Deferred income taxes 1,979
1,900
Asset retirement obligations 735
866
Regulatory liabilities 735
748
Accrued pension and other post-retirement benefit costs 78
71
Investment tax credits 147
137
Other 65
27
Total other noncurrent liabilities 3,739
3,749
Commitments and Contingencies

Equity
Member's Equity 4,085
4,067
Total Liabilities and Equity $ 12,267
$ 12,164

~~PART I~~


FINANCIAL STATEMENTS

DUKE ENERGY INDIANA, LLC

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Nine Months Ended
	September 30,
(in millions)	2022		2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	189	$	396
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and accretion	481		460
Equity component of AFUDC	(12)		(19)

Impairment of assets and other charges	211		8
Deferred income taxes	(26)		19


Contributions to qualified pension plans	(5)		—
Payments for asset retirement obligations	(67)		(49)

(Increase) decrease in

Receivables	(1)		(7)
Receivables from affiliated companies	17		17
Inventory	(34)		106
Other current assets	(181)		(58)
Increase (decrease) in
Accounts payable	44		46
Accounts payable to affiliated companies	(24)		(15)
Taxes accrued	5		25
Other current liabilities	18		23
Other assets	8		11
Other liabilities	9		3
Net cash provided by operating activities	632		966
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(643)		(584)


Purchases of debt and equity securities	(43)		(34)
Proceeds from sales and maturities of debt and equity securities	32		16
Notes receivable from affiliated companies	(32)		(218)
Other	(38)		(8)
Net cash used in investing activities	(724)		(828)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt	67		—
Payments for the redemption of long-term debt	(81)		—
Notes payable to affiliated companies	483		(131)
Distributions to parent	(350)		—
Other	(1)		—
Net cash provided by (used in) financing activities	118		(131)
Net increase in cash and cash equivalents	26		7
Cash and cash equivalents at beginning of period	6		7
Cash and cash equivalents at end of period	$	32	$	14
Supplemental Disclosures:
Significant non-cash transactions:
Accrued capital expenditures	$	102	$	105

See Notes to Condensed Consolidated Financial Statements

Nine Months Ended
September 30,
(in millions) 2017
2016
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 318
$ 309
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and accretion 339
347
Equity component of AFUDC (20 ) (11 )
Gain on sale of other assets and other, net (1 ) —
Impairment charges —
8
Deferred income taxes 101
122
Accrued pension and other post-retirement benefit costs 4
6
Payments for asset retirement obligations (26 ) (31 )
(Increase) decrease in
Receivables 53
16
Receivables from affiliated companies 31
(3 )
Inventory 54
146
Other current assets 18
(105 )
Increase (decrease) in
Accounts payable (71 ) (14 )
Accounts payable to affiliated companies (1 ) (1 )
Taxes accrued 115
12
Other current liabilities (18 ) (85 )
Other assets (24 ) (38 )
Other liabilities 32
64
Net cash provided by operating activities 904
742
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (603 ) (540 )
Purchases of available-for-sale securities (15 ) (12 )
Proceeds from sales and maturities of available-for-sale securities 6
9
Notes receivable from affiliated companies 57
45
Other (40 ) (28 )
Net cash used in investing activities (595 ) (526 )
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt —
495
Payments for the redemption of long-term debt (3 ) (476 )
Distributions to parent (300 ) (149 )
Other (1 ) (1 )
Net cash used in financing activities (304 ) (131 )
Net increase in cash and cash equivalents 5

85
Cash and cash equivalents at beginning of period 17
9
Cash and cash equivalents at end of period $ 22
$ 94
Supplemental Disclosures:
Significant non-cash transactions:
Accrued capital expenditures $ 101
$ 56

~~PART I~~


FINANCIAL STATEMENTS

DUKE ENERGY INDIANA, LLC

Condensed Consolidated Statements of Changes in Equity

(Unaudited)


	Three Months Ended
	September 30, 2021 and 2022

(in millions)	Member's Equity
Balance at June 30, 2021	$	4,999
Net income	181

Distributions to parent	(125)
Balance at September 30, 2021	$	5,055

Balance at June 30, 2022	$	4,861
Net income	119

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

	Nine Months Ended
	September 30, 2021 and 2022

(in millions)	Member's Equity
Balance at December 31, 2020	$	4,783
Net income	396

Distributions to parent	(125)
Other	1
Balance at September 30, 2021	$	5,055

Balance at December 31, 2021	$	5,015
Net income	189

Distributions to parent	(225)


Balance at September 30, 2022	$	4,979

See Notes to Condensed Consolidated Financial Statements

Accumulated
Other
Comprehensive
Income
Additional
Net Gains on

Common
Paid-in
Retained
Member's
Cash Flow
Total
(in millions) Stock
Capital
Earnings
Equity
Hedges
Equity
Balance at December 31, 2015 $ 1
$ 1,384
$ 2,450
$ —
$ 1
$ 3,836
Net income —
—
—
309
—
309
Other comprehensive loss —
—
—
—
(1 ) (1 )
Distributions to parent —
—
—
(149 ) —
(149 )
Transfer to Member's Equity (1 ) (1,384 ) (2,450 ) 3,835
—
—
Balance at September 30, 2016 $ —
$ —
$ —

$ 3,995
$ —
$ 3,995

Balance at December 31, 2016 $ —
$ —
$ —
$ 4,067
$ —
$ 4,067
Net income —
—
—
318
—
318
Distributions to parent —
—
—
(300 ) —
(300 )
Balance at September 30, 2017 $ —
$ —
$ —

$ 4,085
$ —
$ 4,085


FINANCIAL STATEMENTS

~~PART I~~

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)	2022		2021		2022		2021



Operating Revenues	$	306	$	195	$	1,421	$	1,016
Operating Expenses
Cost of natural gas	168		66		685		354
Operation, maintenance and other	87		77		270		231
Depreciation and amortization	56		51		166		150
Property and other taxes	13		16		44		44
Impairment of assets and other charges	1		4		1		9
Total operating expenses	325		214		1,166		788
Gains on Sales of Other Assets and Other, net	—		—		4		—
Operating (Loss) Income	(19)		(19)		259		228



Other Income and Expenses, net	13		16		41		51

Interest Expense	36		29		102		88
(Loss) Income Before Income Taxes	(42)		(32)		198		191
Income Tax (Benefit) Expense	(9)		(8)		18		16
Net (Loss) Income and Comprehensive (Loss) Income	$	(33)	$	(24)	$	180	$	175

See Notes to Condensed Consolidated Financial Statements

Three Months Ended Nine Months Ended
September 30, September 30,
2017
2016
2017
2016
Operating Revenues
Regulated natural gas $ 181
$ 155
$ 877
$ 815
Nonregulated natural gas and other 2
3
7
8
Total operating revenues 183
158
884
823
Operating Expenses
Cost of natural gas 63
42
333
289
Operation, maintenance and other 73
74
226
221
Depreciation and amortization 38
35
109
103
Property and other taxes 13
11
38
33
Impairment charges —
—
7
—
Total operating expenses 187
162
713
646
Operating (Loss) Income (4 ) (4 ) 171
177
Equity in earnings of unconsolidated affiliates 3
2
8
25
Other income and expenses, net —
(1 ) (1 ) (1 )
Total other income and expenses 3
1
7
24
Interest Expense 20
17
59
50
(Loss) Income Before Income Taxes (21 ) (20 ) 119
151
Income Tax (Benefit) Expense (10 ) (8 ) 43
57
Net (Loss) Income $ (11 ) $ (12 ) $ 76
$ 94
Other Comprehensive Income, net of tax
Reclassification into earnings from hedging activities of equity method investments —
1
—
1
Comprehensive (Loss) Income $ (11 ) $ (11 ) $ 76
$ 95

~~PART I~~


FINANCIAL STATEMENTS

PIEDMONT NATURAL GAS COMPANY, INC.

Condensed Consolidated Balance Sheets

(Unaudited)


(in millions)	September 30, 2022		December 31, 2021
ASSETS
Current Assets

Receivables (net of allowance for doubtful accounts of $14 at 2022 and $15 at 2021)	$	116	$	318
Receivables from affiliated companies	10		11

Inventory	135		109
Regulatory assets	161		141

Other	90		9
Total current assets	512		588
Property, Plant and Equipment
Cost	10,561		9,918
Accumulated depreciation and amortization	(2,028)		(1,899)
Facilities to be retired, net	9		11
Net property, plant and equipment	8,542		8,030
Other Noncurrent Assets
Goodwill	49		49
Regulatory assets	379		316
Operating lease right-of-use assets, net	13		16
Investments in equity method unconsolidated affiliates	79		95
Other	299		288
Total other noncurrent assets	819		764
Total Assets	$	9,873	$	9,382
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable	$	284	$	196
Accounts payable to affiliated companies	35		40

Notes payable to affiliated companies	308		518
Taxes accrued	45		63
Interest accrued	43		37

Regulatory liabilities	65		56
Other	84		81
Total current liabilities	864		991
Long-Term Debt	3,363		2,968

Other Noncurrent Liabilities
Deferred income taxes	870		815
Asset retirement obligations	23		22
Regulatory liabilities	1,032		1,058
Operating lease liabilities	11		14
Accrued pension and other post-retirement benefit costs	7		7

Other	174		158
Total other noncurrent liabilities	2,117		2,074
Commitments and Contingencies
Equity
Common stock, no par value: 100 shares authorized and outstanding at 2022 and 2021	1,635		1,635

Retained earnings	1,894		1,714

Total equity	3,529		3,349
Total Liabilities and Equity	$	9,873	$	9,382

See Notes to Condensed Consolidated Financial Statements

(in millions) September 30, 2017
December 31, 2016
ASSETS
Current Assets
Cash and cash equivalents $ 12
$ 25
Receivables (net of allowance for doubtful accounts of $2 at 2017 and $3 at 2016) 77
232
Receivables from affiliated companies 8
7
Inventory 53
66
Regulatory assets 133
124
Income taxes receivable 99
9
Other 31
12
Total current assets 413
475
Property, Plant and Equipment
Cost 6,579
6,174
Accumulated depreciation and amortization (1,454 ) (1,360 )
Net property, plant and equipment 5,125
4,814
Other Noncurrent Assets
Goodwill 49
49
Regulatory assets 322
373
Investments in equity method unconsolidated affiliates 76
212
Other 11
21
Total other noncurrent assets 458
655
Total Assets $ 5,996
$ 5,944
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable $ 98
$ 155
Accounts payable to affiliated companies 7
8
Notes payable and commercial paper —
330
Notes payable to affiliated companies 284
—
Taxes accrued 30
67
Interest accrued 24
33
Current maturities of long-term debt —
35
Regulatory liabilities 3
—
Other 72
102
Total current liabilities 518
730
Long-Term Debt 2,036
1,786
Other Noncurrent Liabilities
Deferred income taxes 1,046
931
Asset retirement obligations 15
14
Regulatory liabilities 627
608
Accrued pension and other post-retirement benefit costs 14
14
Other 141
189
Total other noncurrent liabilities 1,843
1,756
Commitments and Contingencies

Equity
Common stock, no par value: 100 shares authorized and outstanding at 2017 and 2016 860
860
Retained earnings 739
812
Total equity 1,599
1,672
Total Liabilities and Equity $ 5,996
$ 5,944

~~PART I~~


FINANCIAL STATEMENTS

PIEDMONT NATURAL GAS COMPANY, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Nine Months Ended
	September 30,
(in millions)	2022		2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	180	$	175
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	168		152
Equity component of AFUDC	(7)		(19)

Impairment of assets and other charges	1		10
Deferred income taxes	13		10
Equity in earnings from unconsolidated affiliates	(5)		(7)

Contributions to qualified pension plans	(2)		—

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

Receivables	198		151
Receivables from affiliated companies	1		(1)
Inventory	(26)		—
Other current assets	(91)		7
Increase (decrease) in
Accounts payable	24		(55)
Accounts payable to affiliated companies	(5)		(48)
Taxes accrued	(18)		17
Other current liabilities	23		(32)
Other assets	(8)		3
Other liabilities	(3)		2
Net cash provided by operating activities	440		362
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(598)		(628)
Contributions to equity method investments	(8)		(9)
Return of investment capital	—		1





Other	(17)		(23)
Net cash used in investing activities	(623)		(659)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt	394		347
Payments for the redemption of long-term debt	—		(160)
Notes payable to affiliated companies	(210)		(215)


Capital contributions from parent	—		325

Other	(1)		—
Net cash provided by financing activities	183		297
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	$	163	$	115

See Notes to Condensed Consolidated Financial Statements

Nine Months Ended
September 30,
(in millions) 2017
2016
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 76
$ 94
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 112
111
Impairment charges 7
—
Deferred income taxes 127
50
Equity in earnings from unconsolidated affiliates (8 ) (25 )
Accrued pension and other post-retirement benefit costs 9
2
Contributions to qualified pension plans —
(1 )
Payments for asset retirement obligations —
(5 )
(Increase) decrease in
Receivables 157
88
Receivables from affiliated companies (1 ) —
Inventory 13
33
Other current assets (129 ) (50 )
Increase (decrease) in
Accounts payable (52 ) 11
Accounts payable to affiliated companies (1 ) —
Taxes accrued (37 ) 12
Other current liabilities (21 ) (11 )
Other assets (9 ) 55
Other liabilities (7 ) 17
Net cash provided by operating activities 236
381
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (407 ) (416 )
Contributions to equity method investments (12 ) (40 )
Other 2
(2 )
Net cash used in investing activities (417 ) (458 )
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the:
Issuance of long-term debt 250
296
Issuance of common stock —
121
Payments for the redemption of long-term debt (35 ) (40 )
Notes payable and commercial paper (330 ) (210 )
Notes payable to affiliated companies 284
—
Dividends paid —
(82 )
Other (1 ) —
Net cash provided by financing activities 168
85
Net (decrease) increase in cash and cash equivalents (13 ) 8
Cash and cash equivalents at beginning of period 25
33
Cash and cash equivalents at end of period $ 12
$ 41
Supplemental Disclosures:
Significant non-cash transactions:
Accrued capital expenditures $ 47
$ 30
Transfer of ownership interest of certain equity method investees to parent 149
—

~~PART I~~


FINANCIAL STATEMENTS

PIEDMONT NATURAL GAS COMPANY, INC.

Condensed Consolidated Statements of Changes in Equity

(Unaudited)


	Three Months Ended September 30, 2021 and 2022
	Common		Retained		Total
(in millions)	Stock		Earnings		Equity
Balance at June 30, 2021	$	1,635	$	1,604	$	3,239
Net loss	—		(24)		(24)



Other	—		(1)		(1)
Balance at September 30, 2021	$	1,635	$	1,579	$	3,214

Balance at June 30, 2022	$	1,635	$	1,927	$	3,562
Net loss	—		(33)		(33)





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

	Nine Months Ended September 30, 2021 and 2022
	Common		Retained		Total
(in millions)	Stock		Earnings		Equity
Balance at December 31, 2020	$	1,310	$	1,405	$	2,715
Net income	—		175		175

Contribution from parent	325		—		325




Other	—		(1)		(1)
Balance at September 30, 2021	$	1,635	$	1,579	$	3,214

Balance at December 31, 2021	$	1,635	$	1,714	$	3,349
Net income	—		180		180




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

Accumulated
Other
Comprehensive
Income
Net Loss on

Hedging Activities

Common
Retained
of Unconsolidated
Total
(in millions) Stock
Earnings
Affiliates
Equity
Balance at December 31, 2015 $ 728
$ 731
$ (1 ) $ 1,458
Net income —
94
—
94
Other comprehensive income —
—
1
1
Common stock issuances, including dividend reinvestments and employee benefits 121
—
—
121
Common stock dividends —
(87 ) —
(87 )
Balance at September 30, 2016 $ 849
$ 738
$ —
$ 1,587

Balance at December 31, 2016 $ 860
$ 812
$ —
$ 1,672
Net income —
76
—
76
Transfer of ownership interest of certain equity method investees to parent —
(149 ) —
(149 )
Balance at September 30, 2017 $ 860
$ 739
$ —
$ 1,599

~~PART I~~

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

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

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


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

Applicable Notes
Registrant 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
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. • • • • • • • • • • • • • • • • •

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 and (iii) the Piedmont registrant not included in the consolidated Duke Energy results for the three and nine months ended September 30, 2016, as Piedmont results were not consolidated by Duke Energy until after the acquisition date of October 3, 2016.balances.

1. ORGANIZATION AND BASIS OF PRESENTATION

~~NATURE OF OPERATIONS AND BASIS OF CONSOLIDATION~~

Duke Energy Corporation (collectively with its subsidiaries, Duke Energy) is an energy company headquartered in Charlotte, North Carolina, subject to regulation by the Federal Energy Regulatory Commission (FERC). Duke Energy operates in the United States (U.S.) primarily through its direct and indirect subsidiaries. Certain Duke Energy subsidiaries are also subsidiary registrants, including Duke Energy Carolinas, LLC (Duke Energy Carolinas); Progress Energy, Inc. (Progress Energy); Duke Energy Progress, LLC (Duke Energy Progress); Duke Energy Florida, LLC (Duke Energy Florida); Duke Energy Ohio, Inc. (Duke Energy Ohio), Duke Energy Indiana, LLC (Duke Energy Indiana) and Piedmont Natural Gas Company, Inc. (Piedmont). When discussing Duke Energy’s consolidated financial information, it necessarily includes the results of its separate subsidiary registrants (collectively referred to as the Subsidiary Registrants), which, along with Duke Energy, are collectively referred to as the Duke Energy Registrants.

On October 3, 2016, Duke Energy completed the acquisition of Piedmont. Piedmont's results of operations and cash flows are included in the accompanying condensed consolidated financial statements of Duke Energy for the three and nine months ended September 30, 2017, but not for the three and nine months ended September 30, 2016, as Piedmont's earnings and cash flows are only included in Duke Energy's consolidated results subsequent to the acquisition date. See Note 2 for additional information regarding the acquisition.

In December 2016, Duke Energy completed an exit of the Latin American market to focus on its domestic regulated business, which was further bolstered by the acquisition of Piedmont. The sale of the International Energy business segment, excluding an equity method investment in National Methanol Company (NMC), was completed through two transactions including a sale of assets in Brazil to China Three Gorges (Luxembourg) Energy S.à.r.l. (China Three Gorges) and a sale of Duke Energy's remaining Latin American assets in Peru, Chile, Ecuador, Guatemala, El Salvador and Argentina to ISQ Enerlam Aggregator, L.P. and Enerlam (UK) Holding Ltd. (I Squared Capital) (collectively, the International Disposal Group). See Note 2 for additional information on the sale of International Energy.

The results of operations of the International Disposal Group have been classified as Discontinued Operations on the Condensed Consolidated Statements of 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. See Note 2 ~~for additional information.~~

These Condensed Consolidated Financial Statements include, after eliminating intercompany transactions and balances, the accounts of the Duke Energy Registrants and subsidiaries where the respective Duke Energy Registrants have control. These Condensed Consolidated Financial Statements also reflect the Duke Energy Registrants’ proportionate share of certain jointly owned generation and transmission facilities. Substantially all of the Subsidiary Registrants' operations qualify for regulatory accounting.

Duke Energy Carolinas is a regulated public utility primarily engaged in the generation, transmission, distribution and sale of electricity in portions of North Carolina and South Carolina. Duke Energy Carolinas is subject to the regulatory provisions of the North Carolina Utilities Commission (NCUC), Public Service Commission of South Carolina (PSCSC), U.S. Nuclear Regulatory Commission (NRC) and FERC.

Progress Energy is a public utility holding company headquartered in Raleigh, North Carolina, subject to regulation by FERC. Progress Energy conducts operations through its wholly owned subsidiaries, Duke Energy Progress and Duke Energy Florida.

Duke Energy Progress is a regulated public utility primarily engaged in the generation, transmission, distribution and sale of electricity in portions of North Carolina and South Carolina. Duke Energy Progress is subject to the regulatory provisions of the NCUC, PSCSC, NRC and FERC.

Duke Energy Florida is a regulated public utility primarily engaged in the generation, transmission, distribution and sale of electricity in portions of Florida. Duke Energy Florida is subject to the regulatory provisions of the Florida Public Service Commission (FPSC), NRC and FERC.

~~PART I~~

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

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

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

Duke Energy Ohio is a regulated public utility primarily engaged in the transmission and distribution of electricity in portions of Ohio and Kentucky, the generation and sale of electricity in portions of Kentucky and the transportation and sale of natural gas in portions of Ohio and Kentucky. Duke Energy Ohio conducts competitive auctions for retail electricity supply in Ohio whereby the energy price is recovered from retail customers and recorded in Operating Revenues on the Condensed Consolidated Statements of Operations and Comprehensive Income. Operations in Kentucky are conducted through its wholly owned subsidiary, Duke Energy Kentucky, Inc. (Duke Energy Kentucky). References herein to Duke Energy Ohio collectively include Duke Energy Ohio and its subsidiaries, unless otherwise noted. Duke Energy Ohio is subject to the regulatory provisions of the Public Utilities Commission of Ohio (PUCO), Kentucky Public Service Commission (KPSC) and FERC.

Duke Energy Indiana is a regulated public utility primarily engaged in the generation, transmission, distribution and sale of electricity in portions of Indiana. Duke Energy Indiana is subject to the regulatory provisions of the Indiana Utility Regulatory Commission (IURC) and FERC.

Piedmont is a regulated public utility primarily engaged in the distribution of natural gas in portions of North Carolina, South Carolina and Tennessee. Piedmont is subject to the regulatory provisions of the NCUC, PSCSC, Tennessee Public Utility Commission (formerly the Tennessee Regulatory Authority) (TPUC) and FERC.

BASIS OF PRESENTATION

These Condensed Consolidated Financial Statements have been prepared in accordance with ~~generally accepted accounting principles (GAAP) in the U.S.~~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 ~~in the U.S. for annual financial statements. Since the interim Condensed Consolidated Financial Statements and Notes do not include all information and notes required by GAAP in the U.S.~~ for annual financial statements ~~the Condensed Consolidated Financial Statements~~ and ~~other information included in this quarterly report~~ should be read in conjunction with the Consolidated Financial Statements ~~and Notes~~ in the Duke ~~Energy Registrants’ combined~~Energy's Annual Report on Form 10-K for the year ended December 31, ~~2016, and the Consolidated Financial Statements and Notes in the Piedmont Annual Report on Form 10‑K for the year ended October 31, 2016.~~

Effective November 1, 2016, Piedmont's fiscal year-end was changed from October 31 to December 31, the year-end of Duke Energy. A transition report was filed on Form 10-Q (Form 10-QT) as of December 31, 2016, for the transition period from November 1, 2016, to December 31, 2016.2021.

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.

~~Certain prior year amounts~~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 ~~been reclassified~~control. See Note 12 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.

COMMERCIAL RENEWABLES STRATEGIC REVIEW

On November 1, 2022, the Board of Directors committed to ~~conform~~a plan to sell the ~~current year presentation.~~

~~UNBILLED REVENUE~~

~~Revenues on sales~~Commercial Renewables business segment, excluding the offshore wind lease for Carolina Long Bay. Duke Energy is actively marketing the business as two separate disposal units, the utility scale solar and wind unit and the distributed generation unit. Non-binding offers were received for the utility scale solar and wind unit in late October 2022. We are evaluating the initial offers and expect to receive final offers from select bidders in early 2023. Non-binding offers for the distributed generation unit are also expected in early 2023. Duke Energy expects to dispose of ~~electricity~~both units in mid-2023. In the fourth quarter of 2022, Duke Energy will reclassify the Commercial Renewables business segment to assets held for sale and natural gas are recognized when service is provided or the product is delivered. Unbilled revenues are recognized by applying customer billing rates to the estimated volumes of energy and natural gas delivered but not yet billed. Unbilled revenues can vary significantly from period to periodreport it as a discontinued operation. Duke Energy could record a material impairment loss in the fourth quarter of 2022 if the carrying value of one or both of the units is not expected to be recovered. If the proceeds exceed the carrying value of one or both of the units, a gain would be recognized at the closing of the transaction in mid-2023. Proceeds from a successful sale are expected to be used for debt reduction and avoidance.

NONCONTROLLING INTEREST

Duke Energy maintains a controlling financial interest in certain less than wholly owned nonregulated subsidiaries. As a result, Duke Energy consolidates these subsidiaries and presents the third-party investors' portion of ~~seasonality, weather, customer usage patterns, customer mix, average price in effect for customer classes, timing~~Duke Energy's net income (loss), net assets and comprehensive income (loss) as noncontrolling interest. Noncontrolling interest is included as a component of ~~rendering customer bills, meter reading schedules, and the impact of weather normalization or margin decoupling mechanisms.~~

~~Unbilled revenues are included within Receivables and Receivables of variable interest entities (VIEs)~~equity on the Condensed Consolidated Balance ~~Sheets as shown~~Sheets.


FINANCIAL STATEMENTS			ORGANIZATION AND BASIS OF PRESENTATION

Several operating agreements of Duke Energy's subsidiaries with noncontrolling interest are subject to allocations of earnings, tax attributes and cash flows in accordance with contractual agreements that vary throughout the lives of the subsidiaries. Therefore, Duke Energy and the other investors' (the owners) interests in the ~~following table.~~

subsidiaries are not fixed, and the subsidiaries apply the Hypothetical Liquidation at Book Value (HLBV) method in allocating income or loss and other comprehensive income or loss (all measured on a pretax basis) to the owners. The HLBV method measures the amounts that each owner would hypothetically claim at each balance sheet reporting date, including tax benefits realized by the owners over the IRS recapture period, upon a hypothetical liquidation of the subsidiary at the net book value of its underlying assets. The change in the amount that each owner would hypothetically receive at the reporting date compared to the amount it would have received on the previous reporting date represents the amount of income or loss allocated to each owner for the reporting period.

(in millions) September 30, 2017
December 31, 2016
Duke Energy $ 771
$ 831
Duke Energy Carolinas 307
313
Progress Energy 216
161
Duke Energy Progress 113
102
Duke Energy Florida 103
59
Duke Energy Ohio 2
2
Duke Energy Indiana 29
32
Piedmont 4
77

~~PART I~~

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

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

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

~~Additionally,~~During September 2021, Duke Energy ~~Ohio and~~completed the initial minority interest investment in a portion of Duke Energy Indiana ~~sell nearly all of their retail accounts receivable~~ to an affiliate ~~Cinergy Receivables Company, LLC (CRC), on~~of GIC. GIC's ownership interest in Duke Energy Indiana represents a ~~revolving basis. These transfers of receivables are accounted~~noncontrolling interest. See Note 2 for ~~as sales and include receivables for unbilled revenues. Accordingly, the receivables sold are not reflected~~additional information on the ~~Condensed Consolidated Balance Sheets~~sale.

Other operating agreements of Duke ~~Energy Ohio~~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 ~~Indiana. See Note~~ 13 ~~for further information. These receivables for unbilled revenues are shown in~~allocates net income or loss and other comprehensive income or loss of these subsidiaries to the ~~table below.~~

owners based on their pro rata shares.

(in millions) September 30, 2017
December 31, 2016
Duke Energy Ohio $ 70
$ 97
Duke Energy Indiana 119
123

~~AMOUNTS ATTRIBUTABLE TO CONTROLLING INTERESTS~~

For the three and nine months ended September 30, 2017, the Loss from Discontinued Operations, net of tax on Duke Energy's Condensed Consolidated Statements of Operations is entirely attributable to controlling interests. The following table presents ~~Net Income Attributable~~allocated losses to ~~Duke Energy Corporation for continuing operations and discontinued operations~~noncontrolling interest for the three and nine months ended September 30, ~~2016.~~

2022, and 2021.

Three Months Ended Nine Months Ended
(in millions) September 30, 2016 September 30, 2016
Income from Continuing Operations $ 1,001
$ 2,202
Income from Continuing Operations Attributable to Noncontrolling Interests 2
5
Income from Continuing Operations Attributable to Duke Energy Corporation $ 999
$ 2,197
Income from Discontinued Operations, net of tax $ 180
$ 190
Income from Discontinued Operations Attributable to Noncontrolling Interests, net of tax 3
8
Income from Discontinued Operations Attributable to Duke Energy Corporation, net of tax $ 177
$ 182
Net Income $ 1,181
$ 2,392
Net Income Attributable to Noncontrolling Interests 5
13
Net Income Attributable to Duke Energy Corporation $ 1,176
$ 2,379


	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions)	2022		2021		2022		2021




Noncontrolling Interest Allocation of Income
Allocated losses to noncontrolling tax equity members utilizing the HLBV method	$	11	$	119	$	78	$	217
Allocated (income) losses to noncontrolling members based on pro rata shares of ownership	(2)		10		(5)		30
Total Noncontrolling Interest Allocated Losses	$	9	$	129	$	73	$	247

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 10 and 12 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, 2022										December 31, 2021
			Duke				Duke		Duke				Duke				Duke		Duke
	Duke		Energy		Progress		Energy		Energy		Duke		Energy		Progress		Energy		Energy
	Energy		Carolinas		Energy		Progress		Florida		Energy		Carolinas		Energy		Progress		Florida
Current Assets
Cash and cash equivalents	$	453	$	36	$	101	$	58	$	25	$	343	$	7	$	70	$	35	$	23
Other	164		5		34		17		17		170		—		39		—		39
Other Noncurrent Assets
Other	12		1		2		2		—		7		1		4		4		—
Total cash, cash equivalents and restricted cash	$	629	$	42	$	137	$	77	$	42	$	520	$	8	$	113	$	39	$	62

INVENTORY

Inventory is used for operations and is recorded primarily using the average cost method. Inventory related to regulated operations is valued at historical cost. Inventory related to nonregulated operations is valued at the lower of cost or market. Materials and supplies are recorded as inventory when purchased and subsequently charged to expense or capitalized to property, plant and equipment when installed. Inventory, including excess or obsolete inventory, is written-down to the lower of cost or market value. Once inventory has been written-down, it creates a new cost basis for the inventory that is not subsequently written-up. Provisions for inventory write-offs were not material at September 30, ~~2017,~~2022, and December 31, ~~2016.~~2021. The components of inventory are presented in the tables below.

September 30, 2017
Duke
Duke
Duke
Duke
Duke

Duke
Energy
Progress
Energy
Energy
Energy
Energy

(in millions) Energy
Carolinas
Energy
Progress
Florida
Ohio
Indiana
Piedmont
Materials and supplies $ 2,335
$ 767
$ 1,132
$ 780
$ 351
$ 83
$ 312
$ 2
Coal 581
197
231
130
101
17
136
—
Natural gas, oil and other fuel 349
36
221
108
114
39
2
51
Total inventory $ 3,265
$ 1,000
$ 1,584
$ 1,018
$ 566
$ 139
$ 450
$ 53


	December 31, 2016																	September 30, 2022
			Duke				Duke		Duke		Duke		Duke							Duke				Duke		Duke		Duke		Duke
	Duke		Energy		Progress		Energy		Energy		Energy		Energy					Duke		Energy		Progress		Energy		Energy		Energy		Energy
(in millions)	Energy		Carolinas		Energy		Progress		Florida		Ohio		Indiana		Piedmont		(in millions)	Energy		Carolinas		Energy		Progress		Florida		Ohio		Indiana		Piedmont
Materials and supplies	$	2,374	$	767	$	1,167	$	813	$	354	$	84	$	312	$	1	Materials and supplies	$	2,583	$	863	$	1,167	$	786	$	381	$	91	$	329	$	13
Coal	774		251		314		148		166		19		190		—		Coal	556		215		202		87		115		18		121		—
Natural gas, oil and other fuel	374		37		236		115		121		34		2		65		Natural gas, oil and other fuel	348		34		180		107		73		9		2		122
Total inventory	$	3,522	$	1,055	$	1,717	$	1,076	$	641	$	137	$	504	$	66	Total inventory	$	3,487	$	1,112	$	1,549	$	980	$	569	$	118	$	452	$	135


FINANCIAL STATEMENTS			ORGANIZATION AND BASIS OF PRESENTATION

~~EXCISE TAXES~~


	December 31, 2021
			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	$	2,397	$	793	$	1,067	$	729	$	338	$	80	$	311	$	14
Coal	486		195		167		94		73		19		105		—
Natural gas, oil and other fuel	316		38		164		98		66		17		2		95
Total inventory	$	3,199	$	1,026	$	1,398	$	921	$	477	$	116	$	418	$	109

~~Certain excise taxes levied by state or local governments are required~~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 ~~be paid even if not collected from~~ the ~~customer. These taxes are recognized on a gross basis. Otherwise, excise taxes are accounted for on a net basis.~~

~~PART I~~

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

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

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

~~Excise taxes accounted for on a gross basis as both operating revenues and property and other taxes on the Condensed Consolidated Statements of Operations were as follows.~~

Three Months Ended September 30, Nine Months Ended September 30,
(in millions) 2017
2016
2017
2016
Duke Energy $ 107

$ 107

$ 289

$ 285
Duke Energy Carolinas 9
6
27
21
Progress Energy 67
65
168
161
Duke Energy Progress 5
4
14
13
Duke Energy Florida 62
61
154
148
Duke Energy Ohio 24
26
75
77
Duke Energy Indiana 6
10
16
26
Piedmont 1
1
3
2
arrangement in Other within Other noncurrent assets.

NEW ACCOUNTING STANDARDS

~~The~~No new accounting standards adopted for 2017 and 2016 had no material impact on the presentation or results of operations, cash flows or financial position of the Duke Energy Registrants. While immaterial, adoption of the following accounting standards had the most significant impact on the Duke Energy results of operations, cash flows and financial position for the nine months ended September 30, 2017.

~~Stock-Based Compensation and Income Taxes.~~ In first quarter 2017, Duke Energy adopted Financial Accounting Standards Board (FASB) guidance, which revised the accounting for stock-based compensation and the associated income taxes. The adopted guidance changes certain aspects of accounting for stock-based payment awards to employees including the accounting for income taxes and classification on the Condensed Consolidated Statements of Cash Flows. The primary impact to Duke Energy as a result of implementing this guidance was a cumulative-effect adjustment to retained earnings for tax benefits not previously recognized and additional income tax expense for the nine months ended September 30, 2017. See the Duke Energy Condensed Consolidated Statements of Changes in Equity for further information.

~~Goodwill Impairment.~~ In January 2017, the FASB issued revised guidance for the subsequent measurement of goodwill. Under the guidance, a company will recognize an impairment to goodwill for the amount by which a reporting unit's carrying value exceeds the reporting unit's fair value, not to exceed the amount of goodwill allocated to that reporting unit. Duke Energy early adopted this guidance for the 2017 annual goodwill impairment test.

~~The following new Accounting Standards Updates (ASUs) have been issued, but have not yet been~~were adopted by ~~Duke Energy, as of September 30, 2017.~~

~~Retirement Benefits.~~ In March 2017, the FASB issued revised accounting guidance for the presentation of net periodic costs related to benefit plans. Current GAAP permits the aggregation of all the components of net periodic costs on the income statement and does not require the disclosure of the location of net periodic costs on the Condensed Consolidated Statement of Operations. Under the amended guidance, the service cost component of net periodic costs must be included within Operating income within the same line as other compensation expenses. All other components of net periodic costs must be outside of Operating income. In addition, the updated guidance permits only the service cost component of net periodic costs to be capitalized to Inventory or Property, Plant and Equipment. This represents a change from current GAAP, which permits all components of net periodic costs to be capitalized. These amendments should be applied retrospectively for the presentation of the various components of net periodic costs and prospectively for the change in eligible costs to be capitalized. The guidance allows for a practical expedient that permits a company to use amounts disclosed in prior-period financial statements as the estimation basis for applying the retrospective presentation requirements.

For Duke Energy, this guidance is effective for interim and annual periods beginning January 1, 2018. Duke Energy currently presents the total non-capitalized net periodic costs within Operation, maintenance and other on the Condensed Consolidated Statement of Operations. The adoption of this guidance will result in a retrospective change to reclassify the presentation of the non-service cost (benefit) components of net periodic costs to Other income and expenses. Duke Energy intends to utilize the practical expedient for retrospective presentation. The change in net periodic costs eligible for capitalization is applicable prospectively. Since Duke Energy’s service cost component is expected to be greater than the total net periodic costs, the change will result in increased capitalization of net periodic costs, higher Operation, maintenance and other and higher Other income and expenses. The resulting impact to Duke Energy is expected to be an immaterial increase in net income resulting from the limitation of eligible capitalization of net periodic costs to the service cost component, which is larger than the total net periodic costs.

~~Revenue from Contracts with Customers~~. In May 2014, the FASB issued revised accounting guidance for revenue recognition from contracts with customers. The core principle of this guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The amendments in this update also require disclosure of sufficient information to allow users to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers.

~~PART I~~

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

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

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

Duke Energy has identified material revenue streams, which served as the basis for accounting analysis and documentation of the impact of this guidance on revenue recognition. The accounting analysis included reviewing representative contracts and tariffs for each material revenue stream. Most of Duke Energy’s revenue is expected to be in scope of the new guidance. The majority of our sales, including energy provided to residential customers, are from tariff offerings that provide natural gas or electricity without a defined contractual term ("at-will"). For such arrangements, Duke Energy expects that the revenue from contracts with customers will be equivalent to the electricity or natural gas supplied and billed in that period (including estimated billings). As such, Duke Energy does not expect that there will be a significant shift in the timing or pattern of revenue recognition for such sales.

Also included in the accounting analysis was the evaluation of certain long-term revenue streams including electric wholesale contracts and renewables power purchase agreements (PPAs) under this guidance. For such arrangements, Duke Energy does not expect material changes to the pattern of revenue recognition on the registrants. In addition, the power and utilities industry revenue recognition task force released several draft positions on specific industry issues in October 2017 for public comment. Duke Energy has been working closely with the industry task force and will be reviewing these updated positions to evaluate the impact, if any, on Duke Energy’s specific contracts and preliminary conclusions to date. The evaluation of other revenue streams is ongoing along with consideration of potential revisions to processes, policies and controls, primarily related to evaluating supplemental disclosures required as a result of adopting this guidance. Some revenue arrangements, such as alternative revenue programs and certain PPAs accounted for as leases, are excluded from the scope of this guidance and, therefore, will be accounted for and evaluated for separate presentation and disclosure under other relevant accounting guidance.

Duke Energy continues to evaluate what information would be most useful for users of the financial statements, including information already provided in disclosures outside of the financial statement footnotes. These additional disclosures could include the disaggregation of revenues by geographic location, type of service, customer class or by duration of contract ("at-will" versus contracted revenue).

Duke Energy intends to use the modified retrospective method of adoption effective January 1, 2018. Under the modified retrospective method of adoption, prior year reported results are not restated and a cumulative-effect adjustment, if applicable, is recorded to retained earnings at January 1, 2018, as if the standard had always been in effect. In addition, disclosures, if applicable, include a comparison to what would have been reported for 2018 under the previous revenue recognition rules to assist financial statement users in understanding how revenue recognition has changed as a result of this standard and to facilitate comparability with prior year reported results, which are not restated under the modified retrospective approach as described above. Duke Energy also plans to utilize certain practical expedients including applying this guidance to open contracts at the date of adoption and recognizing revenues for certain contracts under the invoice practical expedient, which allows revenue recognition to be consistent with invoiced amounts (including estimated billings) provided certain criteria are met, including consideration of whether the invoiced amounts reasonably represent the value provided to customers. While the adoption of this guidance, including the cumulative-effect adjustment, is not expected to have a material impact on either the timing or amount of revenues recognized in Duke Energy's financial statements, Duke Energy anticipates additional disclosures around the nature, amount, timing and uncertainty of our revenues and cash flows arising from contracts with customers and will continue to evaluate the requirements, as well as any additional clarifying guidance that may be issued.

~~Leases.~~ In February 2016, the FASB issued revised accounting guidance for leases. The core principle of this guidance is that a lessee should recognize the assets and liabilities that arise from leases on the balance sheet.

For Duke Energy, this guidance is effective for interim and annual periods beginning January 1, 2019, although it can be early adopted. The guidance is applied using a modified retrospective approach. Duke Energy is currently evaluating the financial statement impact of adopting this standard and is continuing to monitor industry implementation issues, including easements, pole attachments and renewable PPAs. Other than an expected increase in assets and liabilities, the ultimate impact of the new standard has not yet been determined. Significant system enhancements, including additional processes and controls, may be required to facilitate the identification, tracking and reporting of potential leases based upon requirements of the new lease standard.

~~Statement of Cash Flows.~~ In November 2016, the FASB issued revised accounting guidance to reduce diversity in practice for the presentation and classification of restricted cash on the statement of cash flows. Under the updated guidance, restricted cash and restricted cash equivalents will be included within beginning-of-period and end-of-period cash and cash equivalents on the statement of cash flows.

For Duke Energy, this guidance is effective for the interim and annual periods beginning January 1, 2018. The guidance will be applied using a retrospective transition method to each period presented. Upon adoption by Duke Energy, the revised guidance will result in a change to the amount of cash and cash equivalents and restricted cash explained when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. Prior to adoption, the Duke Energy Registrants ~~reflect changes~~ in non-current restricted cash within Cash Flows from Investing Activities and changes in current restricted cash within Cash Flows from Operating Activities on the Condensed Consolidated Statement of Cash Flows.2022.

~~Financial Instruments Classification and Measurement.~~ In January 2016, the FASB issued revised accounting guidance for the classification and measurement of financial instruments. Changes in the fair value of all equity securities will be required to be recorded in net income. Current GAAP allows some changes in fair value for available-for-sale equity securities to be recorded in Accumulated other comprehensive income (AOCI). Additional disclosures will be required to present separately the financial assets and financial liabilities by measurement category and form of financial asset. An entity's equity investments that are accounted for under the equity method of accounting are not included within the scope of the new guidance.

For Duke Energy, the revised accounting guidance is effective for interim and annual periods beginning January 1, 2018, by recording a cumulative-effect adjustment to retained earnings as of January 1, 2018. This guidance is expected to have minimal impact on the Duke Energy Registrant's Condensed Consolidated Statements of Operations and Comprehensive Income as changes in the fair value of most of the Duke Energy Registrants' available-for-sale equity securities are deferred as regulatory assets or liabilities pursuant to accounting guidance for regulated operations.

~~PART I~~

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

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

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

2. ~~ACQUISITIONS AND DISPOSITIONS~~

~~ACQUISITIONS~~

~~The Duke Energy Registrants consolidate assets and liabilities from acquisitions as of the purchase date and include earnings from acquisitions in consolidated earnings after the purchase date.~~

~~2016 Acquisition of Piedmont Natural Gas~~

On October 3, 2016, Duke Energy acquired all outstanding common stock of Piedmont for a total cash purchase price of $5.0 billion and assumed Piedmont's existing long-term debt, which had a fair value of approximately $2.0 billion at the time of the acquisition. The acquisition provides a foundation for Duke Energy to establish a broader, long-term strategic natural gas infrastructure platform to complement its existing natural gas pipeline investments and regulated natural gas business in the Midwest. In connection with the closing of the acquisition, Piedmont became a wholly owned subsidiary of Duke Energy.

~~Purchase Price Allocation~~

~~The purchase price allocation of the Piedmont acquisition is as follows:~~

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

The fair value of Piedmont's assets and liabilities was determined based on significant estimates and assumptions that are judgmental in nature, including the amount and timing of projected future cash flows, discount rates reflecting risk inherent in the future cash flows and market prices of long-term debt.

The majority of Piedmont’s operations are subject to the rate-setting authority of the NCUC, the PSCSC and the TPUC and are accounted for pursuant to accounting guidance for regulated operations. The rate-setting and cost recovery provisions currently in place for Piedmont’s regulated operations provide revenues derived from costs, including a return on investment of assets and liabilities included in rate base. Thus, the fair value of Piedmont's assets and liabilities subject to these rate-setting provisions approximates the pre-acquisition carrying value and does not reflect any net valuation adjustments.

The significant assets and liabilities for which valuation adjustments were reflected within the purchase price allocation include the acquired equity method investments and long-term debt. The difference between the fair value and the pre-acquisition carrying value of long-term debt for regulated operations was recorded as a regulatory asset.

The excess of the purchase price over the fair value of Piedmont's assets and liabilities on the acquisition date was recorded as goodwill. The goodwill reflects the value paid by Duke Energy primarily for establishing a broader, long-term strategic natural gas infrastructure growth platform, an improved risk profile and expected synergies resulting from the combined entities.

~~Under Securities and Exchange Commission (SEC) regulations, Duke Energy elected not to apply push down accounting to the stand-alone Piedmont financial statements.~~

~~Other Acquisition-Related Matters~~

Duke Energy recorded realized losses on forward-starting interest rate swaps related to the acquisition financing of $22 million and $190 million for the three and nine months ended September 30, 2016, respectively. See Note 10 for additional information.

~~During the nine months ended September 30, 2017, Piedmont recorded a $7 million software impairment resulting from planned accounting system and process integration.~~

~~Pro Forma Financial Information~~

The following unaudited pro forma financial information reflects the combined results of operations of Duke Energy and Piedmont as if the merger had occurred as of January 1, 2016. The pro forma financial information excludes potential cost savings, intercompany revenues, Piedmont’s earnings from the equity method investment in SouthStar Energy Services, LLC (SouthStar) sold immediately prior to the merger, and after-tax nonrecurring transaction and integration costs incurred by Duke Energy and Piedmont of $41 million and $161 million for the three and nine months ended September 30, 2016, respectively. See Note 3 for additional information on Piedmont's sale of SouthStar.

~~PART I~~

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

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

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

This information has been presented for illustrative purposes only and is not necessarily indicative of the consolidated results of operations that would have been achieved or the future consolidated results of operations of Duke Energy.

Three Months Ended Nine Months Ended
(in millions) September 30, 2016 September 30, 2016
Operating Revenues $ 6,713
$ 17,927
Net Income Attributable to Duke Energy Corporation 1,180
2,552

~~DISPOSITIONS~~

~~2016 Sale of International Energy~~

In December 2016, Duke Energy sold its International Energy businesses, excluding the equity method investment in NMC (the International Disposal Group), in two separate transactions. Duke Energy sold its Brazilian business to China Three Gorges for approximately $1.2 billion, including the assumption of debt, and its remaining Central and South American businesses to I Squared Capital in a deal also valued at approximately $1.2 billion, including the assumption of debt. The transactions generated cash proceeds of ~~$1.9 billion, excluding transaction costs, which were primarily used to reduce Duke Energy holding company debt.~~

The following table presents the results of the International Disposal Group, which are included in (Loss) Income from Discontinued Operations, net of tax in Duke Energy's Condensed Consolidated Statements of Operations. Interest expense directly associated with the International Disposal Group was allocated to discontinued operations. No interest from corporate level debt was allocated to discontinued operations.

Three Months Ended Nine Months Ended
(in millions) September 30, 2016 September 30, 2016
Operating Revenues $ 245
$ 761
Fuel used in electric generation and purchased power 60
177
Cost of natural gas 11
34
Operation, maintenance and other 85
240
Depreciation and amortization 18
62
Property and other taxes 1
6
Impairment charges^(a)
—
194
Loss on Sales of Other Assets and Other, net (3 ) (2 )
Other Income and Expenses, net 14
35
Interest Expense 19
63
Income before income taxes 62
18
Income tax expense (benefit) ^(b)
4
(48 )
Income from discontinued operations of the International Disposal Group 58
66
Income from discontinued operations of other businesses^(c)
122
124
Income from Discontinued Operations, net of tax $ 180
$ 190

~~(a)~~

In conjunction with the advancements of marketing efforts during 2016, Duke Energy performed recoverability tests of the long-lived asset groups of International Energy. As a result, Duke Energy determined the carrying value of certain assets in Central America was not fully recoverable and recorded a pretax impairment charge of $194 million. The charge represents the excess carrying value over the estimated fair value of the assets, which was based on a Level 3 Fair Value measurement that was primarily determined from the income approach using discounted cash flows but also considered market information obtained in 2016.


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


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

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

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

~~PART I~~

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

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

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

~~Other Sale-Related Matters~~

During 2017, Duke Energy provided certain transition services to China Three Gorges and I Squared Capital. Cash flows related to providing the transition services were not material and as of September 30, 2017, all transition services related to the International Disposal Group ended. Additionally, Duke Energy will reimburse China Three Gorges and I Squared Capital for all tax obligations arising from the period preceding consummation on the transactions, totaling approximately $78 million. Duke Energy has not recorded any other liabilities, contingent liabilities or indemnifications related to the International Disposal Group.

3. BUSINESS SEGMENTS

Operating segments are determined based on information used by the chief operating decision-maker in deciding how to allocate resources and evaluate the performance of the business. Duke Energy evaluates segment performance based on segment income. Segment income is defined as income from continuing operations net of income attributable to noncontrolling interests. Segment income includes intercompany revenues and expenses that are eliminated on the Condensed Consolidated Financial Statements.

Duke Energy

~~Due to the Piedmont acquisition and the sale of International Energy in the fourth quarter of 2016,~~ Duke Energy's segment structure ~~was realigned to include~~includes the following segments: Electric Utilities and Infrastructure, Gas Utilities and Infrastructure and Commercial Renewables. ~~Prior period information has been recast to conform to the current segment structure. See Note 2 for further information on the Piedmont and International Energy transactions.~~

The Electric Utilities and Infrastructure segment primarily includes Duke Energy's regulated electric utilities in the Carolinas, Florida and the Midwest. On January 28, 2021, Duke Energy executed an agreement providing for an investment by an affiliate of GIC in Duke Energy Indiana in exchange for a 19.9% minority interest issued by Duke Energy Indiana Holdco, LLC, the holding company for Duke Energy Indiana. The ~~regulated electric utilities conduct operations through~~transaction will be completed following two closings for an aggregate purchase price of approximately $2 billion. The first closing, which occurred on September 8, 2021, resulted in Duke Energy Indiana Holdco, LLC issuing 11.05% of its membership interests in exchange for approximately $1,025 million or 50% of the ~~Subsidiary Registrants~~purchase price. Duke Energy retained indirect control of these assets, and, therefore, no gain or loss was recognized on the Condensed Consolidated Statements of Operations. Duke Energy has the discretion to determine the timing of the second closing, but it will occur no later than January 2023. At the second closing, Duke Energy will issue and sell additional membership interests such that ~~are substantially all regulated and, accordingly, qualify~~GIC will own 19.9% of the membership interests for ~~regulatory accounting treatment. Electric Utilities and Infrastructure also includes Duke Energy's electric transmission infrastructure investments.~~the remaining 50% of the purchase price.

The Gas Utilities and Infrastructure segment includes Piedmont, Duke Energy's natural gas local distribution companies in Ohio and Kentucky and Duke Energy's natural gas storage, ~~and~~ midstream pipeline ~~investments. Gas Utilities~~ and ~~Infrastructure's operations are substantially all regulated and, accordingly, qualify for regulatory accounting treatment.~~renewable natural gas investments.

The Commercial Renewables segment is primarily comprised of nonregulated ~~utility scale~~utility-scale wind and solar generation assets located throughout the U.S. See Note 1 for information on the strategic review of the Commercial Renewables business segment. Duke Energy continued to monitor recoverability of its renewable merchant plants located in the ERCOT West market and in the PJM West market during the third quarter of 2022 due to fluctuating market pricing and long-term forecasted energy prices. The assets were not impaired as of September 30, 2022, because the carrying value of approximately $192 million continued to be supported by the expected cash flows. Duke Energy has a 51% ownership interest in these assets.

The remainder of Duke Energy’s operations is presented as Other, which is primarily comprised of ~~corporate~~ interest expense on holding company debt, unallocated corporate costs, ~~contributions to the Duke Energy Foundation and the operations of~~ Duke Energy’s wholly owned captive insurance ~~subsidiary,~~company, Bison, ~~Insurance Company Limited (Bison). Other also includes~~and Duke Energy's ~~25 percent interest in NMC, a large regional producer of methyl tertiary butyl ether (MTBE) located in Saudi Arabia. In October 2017, Duke Energy's economic~~ ownership interest in ~~NMC decreased from 25 percent to 17.5 percent. The investment in NMC is accounted for under the equity method of accounting.~~National Methanol Company.

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


	Three Months Ended September 30, 2017																			Three Months Ended September 30, 2022
	Electric		Gas					Total												Electric		Gas				Total
	Utilities and		Utilities and		Commercial			Reportable												Utilities and		Utilities and		Commercial		Reportable
(in millions)	Infrastructure		Infrastructure		Renewables			Segments		Other			Eliminations			Consolidated			(in millions)	Infrastructure		Infrastructure		Renewables		Segments		Other		Eliminations		Total
Unaffiliated revenues	$	6,122	$	249	$	95		$	6,466	$	16		$	—		$	6,482		Unaffiliated revenues	$	7,431	$	404	$	127	$	7,962	$	6	$	—	$	7,968
Intersegment revenues	7		23		—			30		19			(49		)	—			Intersegment revenues	8		23		3		34		23		(57)		—
Total revenues	$	6,129	$	272	$	95		$	6,496	$	35		$	(49	)	$	6,482		Total revenues	$	7,439	$	427	$	130	$	7,996	$	29	$	(57)	$	7,968
Segment income (loss)^(a)(b)(c)	$	1,020	$	19	$	(49	)	$	990	$	(34	)	$	—		$	956
Add back noncontrolling interests																1
Loss from discontinued operations, net of tax																(2		)
Net income																$	955
Segment income (loss)(a)																			Segment income (loss)(a)	$	1,540	$	4	$	2	$	1,546	$	(186)	$	—	$	1,360
Less: Noncontrolling interests																			Less: Noncontrolling interests													9
Add: Preferred stock dividend																			Add: Preferred stock dividend													39
Income from discontinued operations, net of tax(b)																			Income from discontinued operations, net of tax(b)													23
Net Income																			Net Income													$	1,413
Segment assets	$	118,323	$	11,361	$	4,216		$	133,900	$	2,240		$	185		$	136,325		Segment assets	$	149,518	$	15,800	$	7,507	$	172,825	$	3,519	$	(4)	$	176,340

~~PART I~~

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

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

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

Three Months Ended September 30, 2016
Electric
Gas
Total

Utilities and
Utilities and
Commercial
Reportable

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

Nine Months Ended September 30, 2017
Electric
Gas
Total

Utilities and
Utilities and
Commercial
Reportable

(in millions) Infrastructure
Infrastructure
Renewables
Segments
Other
Eliminations
Consolidated
Unaffiliated revenues $ 16,211
$ 1,175
$ 333
$ 17,719
$ 47
$ —
$ 17,766
Intersegment revenues 23
68
—
91
56
(147 ) —
Total revenues $ 16,234
$ 1,243
$ 333
$ 17,810
$ 103
$ (147 ) $ 17,766
Segment income (loss)^(a)(b)(c)
$ 2,384
$ 179
$ 2
$ 2,565
$ (205 ) $ —
$ 2,360
Add back noncontrolling interests 5
Loss from discontinued operations, net of tax (4 )
Net income $ 2,361

Nine Months Ended September 30, 2016
Electric
Gas
Total

Utilities and
Utilities and
Commercial
Reportable

(in millions) Infrastructure
Infrastructure
Renewables
Segments
Other
Eliminations
Consolidated
Unaffiliated revenues $ 16,406
$ 355
$ 365
$ 17,126
$ 40
$ —
$ 17,166
Intersegment revenues 24
3
—
27
51
(78 ) —
Total revenues $ 16,430
$ 358
$ 365
$ 17,153
$ 91
$ (78 ) $ 17,166
Segment income (loss)^(a)(c)
$ 2,557
$ 63
$ 13
$ 2,633
$ (436 ) $ —
$ 2,197
Add back noncontrolling interests 5
Income from discontinued operations, net of tax^(d)
190
Net income $ 2,392


~~(a)~~FINANCIAL STATEMENTS			~~Other includes costs to achieve the Piedmont acquisition. See Notes 2 and 10 for additional information.~~BUSINESS SEGMENTS


~~(b)~~	For the three and nine months ended September 30, 2017, Electric Utilities and Infrastructure includes an impairment charge related to the Florida settlement agreement. See Note 4 for additional information.

~~(c)~~


	Three Months Ended September 30, 2021
	Electric		Gas				Total
	Utilities and		Utilities and		Commercial		Reportable
(in millions)	Infrastructure		Infrastructure		Renewables		Segments		Other		Eliminations		Total
Unaffiliated revenues	$	6,560	$	266	$	117	$	6,943	$	8	$	—	$	6,951
Intersegment revenues	9		23		—		32		20		(52)		—
Total revenues	$	6,569	$	289	$	117	$	6,975	$	28	$	(52)	$	6,951
Segment income (loss)(c)(d)	$	1,425	$	(3)	$	78	$	1,500	$	(134)	$	—	$	1,366
Less: Noncontrolling interests													129
Add: Preferred stock dividend													39

Net Income													$	1,276

(a)Commercial Renewables includes ~~impairment charges related to certain wind projects. See discussion below.~~


~~(d)~~	For the three and nine months ended September 30, 2016, Income from Discontinued Operations includes an income tax benefit resulting from immaterial out of period deferred tax liability adjustments. See Note 2 for additional information.

~~During the three and nine months ended September 30, 2017, Duke Energy recorded~~ a ~~pretax impairment charge of $69~~$6 million ~~on a wholly owned non-contracted wind project. The impairment was~~gain recorded within ~~Impairment charges~~Nonregulated electric and other revenues related to mark-to-market derivative contracts on ~~Duke Energy’s~~the Condensed Consolidated Statements of Operations. ~~The charge represents the excess carrying value over the estimated fair value~~

(b)Discontinued operations includes a reduction to a previously accrued liability as a result of the ~~project, which was based on a Level 3 Fair Value measurement that was determined from the income approach using discounted cash flows. The impairment was primarily due~~expiration of tax statutes related to the ~~non-contracted wind project being located in a market that has experienced declining market pricing during 2017~~International Disposal Group.

(c)Electric Utilities and ~~declining long-term forecasted energy~~Infrastructure includes $160 million recorded within Impairment of assets and ~~capacity prices, driven by low natural gas prices, additional renewable generation placed in service~~other charges, $77 million within Other Income and ~~lack of significant load growth.~~

~~During~~expenses, $5 million within Operations, maintenance and other, $13 million within Regulated electric operating revenues and $3 million within Interest expense on the ~~three and nine months ended September 30, 2016,~~ Duke Energy Carolinas' Condensed Consolidated Statement of Operations related to the 2018 South Carolina rate cases and the CCR settlement and insurance proceeds distributed in accordance with that agreement; it also includes $42 million recorded anwithin Impairment of assets and other ~~than temporary impairment (OTTI)~~charges, $34 million within Other Income and expenses, $7 million within Operations, maintenance, and other, $15 million within Regulated electric operating revenues and $5 million within Interest expense on the Duke Energy Progress' Condensed Consolidated Statement of ~~certain~~ Operations.

(d)Other includes $8 million recorded within Impairment of assets and other charges, $1 million within Operations, maintenance and other on the Condensed Consolidated Statements of Operations, related to the workplace and workforce realignment.


	Nine Months Ended September 30, 2022
	Electric		Gas				Total
	Utilities and		Utilities and		Commercial		Reportable
(in millions)	Infrastructure		Infrastructure		Renewables		Segments		Other		Eliminations		Total
Unaffiliated revenues	$	19,552	$	1,843	$	369	$	21,764	$	21	$	—	$	21,785
Intersegment revenues	24		69		3		96		68		(164)		—
Total revenues	$	19,576	$	1,912	$	372	$	21,860	$	89	$	(164)	$	21,785
Segment income (loss)(a)(b)	$	3,237	$	277	$	43	$	3,557	$	(486)	$	—	$	3,071
Less: Noncontrolling interests													73
Add: Preferred stock dividend													92
Income from discontinued operations, net of tax(c)													23
Net Income													$	3,113


	Nine Months Ended September 30, 2021
	Electric		Gas				Total
	Utilities and		Utilities and		Commercial		Reportable
(in millions)	Infrastructure		Infrastructure		Renewables		Segments		Other		Eliminations		Total
Unaffiliated revenues	$	17,161	$	1,323	$	355	$	18,839	$	20	$	—	$	18,859
Intersegment revenues	24		68		—		92		61		(153)		—
Total revenues	$	17,185	$	1,391	$	355	$	18,931	$	81	$	(153)	$	18,859
Segment income (loss)(d)(e)(f)(g)	$	3,180	$	259	$	152	$	3,591	$	(521)	$	—	$	3,070
Less: Noncontrolling interests													247
Add: Preferred stock dividend													92

Net Income													$	2,915


FINANCIAL STATEMENTS			BUSINESS SEGMENTS

(a)Electric Utilities and Infrastructure includes $211 million recorded within Impairment of assets and other charges, $46 million within Regulated electric revenues and $20 million within Noncontrolling Interests related to the Duke Energy Indiana Supreme Court ruling on the Condensed Consolidated Statements of Operations. See Note 3 for additional information.

(b)Commercial Renewables ~~wind project investments accounted for under~~includes a $15 million loss recorded within Nonregulated electric and other revenues related to mark-to-market derivative contracts on the ~~equity method. The $71~~Condensed Consolidated Statements of Operations.

(c)Discontinued operations includes a reduction to a previously accrued liability as a result of the expiration of tax statutes related to the International Disposal Group.

(d)Electric Utilities and Infrastructure includes $160 million ~~pretax impairment was~~recorded within Impairment of assets and other charges, $77 million within Other Income and expenses, $5 million within Operations, maintenance and other, $13 million within regulated operating revenues and $3 million within interest expense on the Duke Energy Carolinas' Condensed Consolidated Statement of Operations related to the 2018 South Carolina rate cases and the CCR settlement and insurance proceeds distributed in accordance with that agreement; it also includes $42 million recorded within Impairment of assets and other charges, $34 million within Other Income and expenses, $7 million within Operations, maintenance, and other, $15 million within Regulated electric operating revenues and $5 million within interest expense on the Duke Energy Progress' Condensed Consolidated Statement of Operations.

(e)Gas Utilities and Infrastructure includes $19 million, recorded within Equity in earnings ~~(losses)~~ of unconsolidated affiliates on ~~Duke Energy's~~the Condensed Consolidated Statements of Operations, related to gas pipeline investments.

(f)Commercial Renewables includes a $35 million loss related to Texas Storm Uri, of which ($8 million) is recorded within Nonregulated electric and other revenues, $2 million within Operations, maintenance and other, $29 million within Equity in earnings of unconsolidated affiliates and $12 million within Loss Attributable to Noncontrolling Interests on the Condensed Consolidated Statements of Operations. ~~The~~

(g)Other includes $139 million recorded within Impairment of assets and other ~~than temporary decline in value~~charges, $28 million within Operations, maintenance and other, and $17 million within Depreciation and amortization on the Condensed Consolidated Statements of these investments was primarily attributable to a sustained decline in market pricing where the wind investments are located, the continued projected net losses for the projects and a reduction in the projected cash distributionsOperations, related to the ~~class of investment owned by Duke Energy.~~workplace and workplace realignment.

~~PART I~~

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

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

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

Duke Energy Ohio

Duke Energy Ohio has two reportable ~~operating~~ segments, Electric Utilities and Infrastructure and Gas Utilities and Infrastructure.

Electric Utilities and Infrastructure transmits and distributes electricity in portions of Ohio and generates, distributes and sells electricity in portions of Northern Kentucky. Gas Utilities and Infrastructure transports and sells natural gas in portions of Ohio and Northern Kentucky. It conducts operations primarily through Duke Energy Ohio and its wholly owned subsidiary, Duke Energy Kentucky.

The remainder of Duke Energy Ohio's operations is presented as Other, which is primarily comprised of governance costs allocated by its parent, Duke Energy, and revenues and expenses related to Duke Energy Ohio's contractual arrangement to buy power from the Ohio Valley Electric Corporation's (OVEC) power plants. See Note 9 for additional information on related party transactions.

Three Months Ended September 30, 2017
Electric
Gas
Total

Utilities and
Utilities and
Reportable

(in millions) Infrastructure
Infrastructure
Segments
Other
Consolidated
Total revenues $ 371
$ 90
$ 461
$ 10
$ 471
Segment income (loss) 50
14
64
(8 ) 56
Loss from discontinued operations, net of tax (1 )
Net income 55
Segment assets $ 5,006
$ 2,708
$ 7,714
$ 51
$ 7,765
Other.

Three Months Ended September 30, 2016
Electric
Gas
Total

Utilities and
Utilities and
Reportable

(in millions) Infrastructure
Infrastructure
Segments
Other
Consolidated
Total revenues $ 390
$ 89
$ 479
$ 10
$ 489
Segment income (loss) 52
12
64
(9 ) 55
Income from discontinued operations, net of tax^(a)
34
Net income $ 89


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


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

Segment assets	$	7,400	$	4,023	$	11,423	$	14	$	(122)	$	11,315

Nine Months Ended September 30, 2017
Electric
Gas
Total

Utilities and
Utilities and
Reportable

(in millions) Infrastructure
Infrastructure
Segments
Other
Consolidated
Total revenues $ 1,036
$ 360
$ 1,396
$ 30
$ 1,426
Segment income (loss) 96
56
152
(24 ) 128
Loss from discontinued operations, net of tax (1 )
Net income $ 127


	Three Months Ended September 30, 2021
	Electric		Gas		Total
	Utilities and		Utilities and		Reportable
(in millions)	Infrastructure		Infrastructure		Segments		Other		Total


Total revenues	$	413	$	93	$	506	$	—	$	506
Segment income (loss)/Net income	$	48	$	11	$	59	$	(1)	$	58

Nine Months Ended September 30, 2016
Electric
Gas
Total

Utilities and
Utilities and
Reportable

(in millions) Infrastructure
Infrastructure
Segments
Other
Consolidated
Total revenues $ 1,053
$ 358
$ 1,411
$ 22
$ 1,433
Segment income (loss) 107
57
164
(29 ) 135
Income from discontinued operations, net of tax^(a)
36
Net income $ 171


~~(a)~~	For the three and nine months ended September 30, 2016, Income from Discontinued Operations includes an income tax benefit resulting from immaterial out of period deferred tax liability adjustments. See Note 2 for additional information.

~~DUKE ENERGY CAROLINAS, PROGRESS ENERGY, DUKE ENERGY PROGRESS, DUKE ENERGY FLORIDA, DUKE ENERGY INDIANA AND PIEDMONT~~

Piedmont has one reportable segment, Gas Utilities and Infrastructure, which transports and sells natural gas. The remainder of Piedmont's operations is presented as Other, which is comprised of certain unallocated corporate costs, including acquisition-related expenses, and earnings from Piedmont's equity method investment in SouthStar prior to its sale. Piedmont sold its 15 percent membership interest in SouthStar on October 3, 2016. Piedmont's income, net of tax, from SouthStar for the three and nine months ended September 30, 2016, was $2 million and $12 million, respectively.


	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


	Nine Months Ended September 30, 2021
	Electric		Gas		Total
	Utilities and		Utilities and		Reportable
(in millions)	Infrastructure		Infrastructure		Segments		Other		Total


Total revenues	$	1,119	$	375	$	1,494	$	—	$	1,494
Segment income (loss)/Net income	$	122	$	77	$	199	$	(11)	$	188

~~PART I~~

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

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

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

The remaining Subsidiary Registrants each have one reportable operating segment, Electric Utilities and Infrastructure, which generates, transmits, distributes and sells electricity. The remainder of each company's operations is presented as Other, which is comprised of certain unallocated corporate costs. Other for Progress Energy also includes interest expense on corporate debt instruments of $56 million and $167 million for the three and nine months ended September 30, 2017, respectively, and $55 million and $166 million for the three and nine months ended September 30, 2016, respectively. The following table summarizes the net (loss) income of Other for each of these entities.

Three Months Ended Nine Months Ended
September 30, September 30,
(in millions) 2017
2016
2017
2016
Duke Energy Carolinas $ (6 ) $ (16 ) $ (18 ) $ (50 )
Progress Energy (32 ) (45 ) (120 ) (139 )
Duke Energy Progress (4 ) (10 ) (11 ) (26 )
Duke Energy Florida (2 ) (5 ) (7 ) (14 )
Duke Energy Indiana (2 ) (3 ) (5 ) (10 )
Piedmont (5 ) —
(18 ) 7

The assets at Duke Energy Carolinas, Progress Energy, Duke Energy Progress, Duke Energy Florida and Duke Energy Indiana are substantially all included within the Electric Utilities and Infrastructure segment at September 30, 2017. The assets at Piedmont are substantially all included within the Gas Utilities and Infrastructure segment at September 30, 2017.

4.3. REGULATORY MATTERS

RATE-RELATED INFORMATION

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


FINANCIAL STATEMENTS			REGULATORY MATTERS

Duke Energy Carolinas and Duke Energy Progress

~~Ash Basin Closure Costs Deferral~~Hurricane Ian

OnIn late September and early October 2022, Hurricane Ian inflicted severe damage to the Duke Energy Carolinas and Duke Energy Progress territories in North Carolina and South Carolina. Approximately 950,000 customers were impacted. Total storm restoration costs, including capital, are currently expected to be in the range of $100 million to $125 million and most of the costs were incurred in October 2022. Duke Energy Carolinas and Duke Energy Progress have regulatory tools to recover storm costs including deferral and securitization. Duke Energy Carolinas and Duke Energy Progress are estimating recovery of the majority of the incremental operation and maintenance costs through one or more of these mechanisms. These estimates will change as Duke Energy Carolinas and Duke Energy Progress receive additional information on actual costs.

Carbon Plan Proceeding

The NCUC is required by North Carolina Session Law 2021-165 (HB 951) to adopt an initial Carbon Plan on or before December ~~30, 2016,~~31, 2022. Duke Energy Carolinas and Duke Energy Progress filed ~~a joint petition with the~~their proposed Carbon Plan on May 16, 2022. The NCUC ~~seeking an accounting order authorizing deferral of certain costs incurred in connection with federal and state environmental remediation requirements related to the permanent closure of ash basins~~Public Staff and other ~~ash storage units at coal-fired generating facilities that have provided or are providing generation to customers located~~parties filed their reply comments on July 15, 2022, including alternative Carbon Plans filed by some of the other parties. The NCUC conducted public hearings across North Carolina in ~~North Carolina. Initial comments were received~~July 2022 and August 2022 and held an evidentiary hearing in ~~March 2017,~~September 2022. Proposed orders and ~~reply comments~~briefs were filed on ~~April 19, 2017. The NCUC has consolidated Duke Energy Carolinas'~~October 24, 2022, and ~~Duke Energy Progress’ coal ash deferral requests into their respective general rate case dockets for decision. See "2017 North Carolina Rate Case" sections below for additional discussion.~~a final order is expected by the end of 2022. Duke Energy Carolinas and Duke Energy Progress cannot predict the outcome of this matter.

~~Duke Energy Carolinas~~Storm Cost Securitization Legislation

~~2017 North~~On June 15, 2022, the South Carolina ~~Rate Case~~General Assembly unanimously adopted S. 1077 (Act 227) in both the House and Senate and the bill was signed into law on June 17, 2022. The legislation enables the PSCSC to permit the issuance of bonds for the payment of storm costs and the creation of a storm charge for repayment.

On August 25, 2017, Duke Energy Carolinas filed an application with the NCUC for a rate increase for retail customers of approximately $647 million, which represents an approximate 13.6 percent increase in annual base revenues. The rate increase is driven by capital investments subsequent to the previous base rate case, including grid improvement projects, investments in customer service technologies, costs of complying with coal combustion residuals (CCR) regulations and the North Carolina Coal Ash Management Act of 2014 (Coal Ash Act) and recovery of costs related to licensing and development of the William States Lee III Nuclear Station (Lee Nuclear Station) discussed below. An evidentiary hearing is scheduled to begin on February 19, 2018. Duke Energy Carolinas cannot predict the outcome of this matter.

~~Lincoln County Combustion Turbine Addition~~

On June 12, 2017, Duke Energy Carolinas filed an application with the NCUC for a Certificate of Public Convenience and Necessity (CPCN) to construct and operate a new 402-megawatt (MW) simple cycle advanced combustion turbine natural gas-fueled electric generating unit at its existing Lincoln County site. The request also included construction of related transmission and natural gas pipeline interconnection facilities. If approved, construction would begin in 2018 with an extended commissioning and validation period from 2020-2024 and an estimated commercial operation date in 2024. An evidentiary hearing was held in August 2017. Briefs and proposed orders were filed on October 9, 2017. A decision is expected by the end of 2017. Duke Energy Carolinas cannot predict the outcome of this matter.

~~PART I~~

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

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

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

~~William States Lee Combined Cycle Facility~~

On April 9, 2014, the PSCSC granted Duke Energy Carolinas and North Carolina Electric Membership Corporation (NCEMC) a Certificate of Environmental Compatibility and Public Convenience and Necessity (CECPCN) for the construction and operation of a 750-MW combined-cycle natural gas-fired generating plant at Duke Energy Carolinas' existing William States Lee Generating Station in Anderson, South Carolina. Duke Energy Carolinas began construction in July 2015 and estimates a cost to build of $600 million for its share of the facility, including allowance for funds used during construction (AFUDC). The project is expected to be commercially available in late 2017. NCEMC will own approximately 13 percent of the project. On July 3, 2014, the South Carolina Coastal Conservation League (SCCL) and Southern Alliance for Clean Energy (SACE) jointly filed a Notice of Appeal with the Court of Appeals of South Carolina (S.C. Court of Appeals) seeking the court's review of the PSCSC's decision, claiming the PSCSC did not properly consider a request related to a proposed solar facility prior to granting approval of the CECPCN. The S.C. Court of Appeals affirmed the PSCSC's decision on February 10, 2016, and on March 24, 2016, denied a request for rehearing filed by SCCL and SACE. On April 21, 2016, SCCL and SACE petitioned the South Carolina Supreme Court for review of the S.C. Court of Appeals decision. On March 24, 2017, the South Carolina Supreme Court denied the request for review, thus concluding the matter.

~~Lee Nuclear Station~~

In December 2007, Duke Energy Carolinas applied to the NRC for combined operating licenses (COLs) for two Westinghouse Electric Company (Westinghouse) AP1000 reactors for the proposed Lee Nuclear Station to be located at a site in Cherokee County, South Carolina. The NCUC and PSCSC concurred with the prudency of Duke Energy Carolinas decisions to incur certain project development and preconstruction costs through several separately issued orders through 2011, although full cost recovery is not guaranteed. In December 2016, the NRC issued a COL for each reactor. Duke Energy Carolinas is not required to build the nuclear reactors as a result of the COLs being issued.

On March 29, 2017, Westinghouse filed for voluntary Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Southern District of New York. On May 15, 2017, the NCUC issued an order requiring Duke Energy Carolinas to provide information regarding potential impacts of the Westinghouse bankruptcy on the Lee Nuclear Station, as well as Duke Energy Carolinas' plans for cost recovery and additional financial information regarding the project. As part of its 2017 North Carolina Rate Case discussed above, Duke Energy Carolinas is seeking NCUC approval to cancel the development of the Lee Nuclear Station project due to the Westinghouse bankruptcy filing and other market activity and is requesting recovery of incurred licensing and development costs. Duke Energy Carolinas will maintain the license issued by the NRC in December 2016. Duke Energy Carolinas cannot predict the outcome of this matter.

~~Duke Energy Progress~~

~~2017 North Carolina Rate Case~~

~~On June 1, 2017,~~5, 2022, Duke Energy Progress filed ~~an application~~a petition with the ~~NCUC~~PSCSC for ~~a rate increase for retail customers~~review and approval of deferred storm costs to be securitized of approximately ~~$477 million, which represents~~$223 million. On September 1, 2022, the PSCSC approved a procedural schedule and scheduled an approximate 14.9 percent increase in annual base revenues. The rate increase is driven by capital investments subsequent to the previous base rate case, costs of complying with CCR regulations and the Coal Ash Act, costs relating to storm recovery, investments in customer service technologies and recovery of costs associated with renewable purchased power. Intervenors in the case filed testimony in October 2017 and Duke Energy Progress' responses are due November 6, 2017. An evidentiary hearing ~~is scheduled to begin November 20, 2017.~~for February 1, 2023. Duke Energy Progress cannot predict the outcome of this matter.

~~Storm Cost Deferral Filing~~

Duke Energy Carolinas

2023 North Carolina Rate Case

On ~~December 16, 2016,~~September 8, 2022, Duke Energy Carolinas requested initiation of the process necessary to file a performance-based regulation application (PBR Application). The request notified the NCUC that such PBR Application would be targeted for filing no earlier than January 6, 2023. In addition, the NCUC held a technical conference on November 2, 2022, in which Duke Energy Carolinas presented information on approximately $4 billion of planned transmission and distribution capital spending projects that it intends to include in the Multiyear Rate Plan (MYRP) portion of its PBR Application.

Oconee 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 purporting to challenge Duke Energy Carolinas’ environmental report (ER). In general, the proposed contentions claimed that the ER did not consider certain information regarding the environmental aspects of severe accidents caused by a hypothetical failure of the Jocassee Dam in South Carolina and, therefore, did not satisfy the National Environmental Policy Act (NEPA) of 1969, as amended, or the NRC’s NEPA-implementing regulations. Duke Energy Carolinas filed its answer to the proposed contentions on October 22, 2021, and the Petitioners filed their reply to Duke Energy Carolinas’ answer on November 5, 2021. 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 the Turkey Point nuclear generating station in Florida and 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. While 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 ER providing information on environmental impacts during the SLR period prior to the rulemaking being completed. Duke Energy is evaluating the two options to determine which is preferable for ONS.Although the NRC’s 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.


FINANCIAL STATEMENTS			REGULATORY MATTERS

Duke Energy Progress

2022 North Carolina Rate Case

On October 6, 2022, Duke Energy Progress filed ~~a petition~~an application with the NCUC ~~requesting~~to request an ~~accounting order~~increase in base rate retail revenues. The rate request before the NCUC includes a PBR Application, which includes a MYRP and proposes rates for three years within the MYRP period. In addition to ~~defer certain costs incurred~~the MYRP, the PBR Application includes an Earnings Sharing Mechanism, Residential Decoupling Mechanism and Performance Incentive Mechanisms as required by HB 951. If approved, the overall retail revenue increase would be $326 million in ~~connection with response to Hurricane Matthew~~Year 1, $151 million in Year 2 and ~~other significant storms~~$138 million in ~~2016.~~Year 3, for a combined total of $615 million or 16% by late 2025. The ~~final estimate of incremental operation~~rate increase is driven primarily by major transmission and ~~maintenance~~distribution investments since the last rate case and ~~capital costs of $116 million was filed~~projected in the MYRP, as well as investments in energy storage and solar assets included in the MYRP consistent with the ~~NCUC in September 2017. On March 15, 2017, the NCUC Public Staff filed comments supporting deferral of a portion of Duke Energy Progress’ requested amount.~~ Carbon Plan filing. Duke Energy Progress ~~filed reply comments~~plans to implement temporary rates, subject to refund, on April 12, 2017. On July 10, 2017, the NCUC consolidated Duke Energy Progress' storm deferral request into the Duke Energy Progress rate case docket for decision. See "2017 North Carolina Rate Case" for additional discussion.June 1, 2023, and has requested permanent rates be effective by October 1, 2023. Duke Energy Progress cannot predict the outcome of this matter.

~~Western Carolinas Modernization Plan~~2022 South Carolina Rate Case

On ~~November 4, 2015,~~September 1, 2022, Duke Energy Progress filed an application with the PSCSC to request an increase in base rate retail revenues. Duke Energy ~~Progress announced~~Progress' rate request proposes a ~~Western Carolinas Modernization Plan, which included retirement~~step in of the ~~existing Asheville coal-fired plant,~~proposed rate increase over two years. If approved, the ~~construction~~overall retail revenue increase in Year 1 would be approximately $53 million or 8.6%. In Year 2, the remaining portion of the request would take effect for a net cumulative increase in retail revenues of approximately $68 million or 11%. The rate increase is driven by major capital investments, including grid improvements and advanced metering infrastructure, the addition of two ~~280‑MW~~new combined-cycle ~~natural gas plants having dual fuel capability, with the option to build~~units located in Asheville, North Carolina, and environmental compliance costs, including recovery over a ~~third natural gas simple cycle unit in 2023 based upon the outcome~~seven-year period of ~~initiatives to reduce the region's power demand. The plan also included upgrades to existing transmission lines and substations, installation~~$108 million of ~~solar generation and a pilot battery storage project. These investments will be made within the next seven years.~~deferred coal ash related compliance costs. Duke Energy Progress is ~~also working~~proposing to accelerate flow back of the remaining portion of the federal unprotected EDIT associated with Property, Plant and Equipment over 26 months compared to the ~~local natural gas distribution company to upgrade an existing natural gas pipeline to serve~~amortization over 20 years that was approved in the ~~natural gas plant.~~

~~On March 28, 2016, the NCUC issued an order approving a CPCN for the new combined-cycle natural gas plants, but denying the CPCN for the contingent simple cycle unit without prejudice to~~last base rate case. Duke Energy Progress also requested approval to ~~refile~~establish a storm reserve for approval in the future. On March 28, 2017, Duke Energy Progress filed an annual progress report for the construction of the combined-cycle plants with the NCUC, with an estimated cost of $893 million. Site preparation activities for the combined-cycle plantsfuture incremental storm costs. Hearings are ~~underway and construction of these plants is~~ scheduled to begin in ~~2017, with an expected in-service date in late 2019.~~January 2023, and Duke Energy Progress ~~plans~~has requested to ~~file for future approvals related~~implement new customer rates by April 1, 2023. Duke Energy Progress cannot predict the outcome of this matter.

FERC Return on Equity Complaint

On October 16, 2020, North Carolina Electric Membership Corporation (NCEMC) filed a complaint at the FERC against Duke Energy Progress pursuant to Section 206 of the Federal Power Act (FPA), alleging that the 11% stated return on equity (ROE) component in the demand formula rate in the Power Supply and Coordination Agreement between NCEMC and Duke Energy Progress is unjust and unreasonable. On June 16, 2022, Duke Energy Progress submitted to the ~~proposed solar generation~~FERC an Offer of Settlement and ~~pilot battery storage project.~~

Settlement Agreement (Settlement Agreement) between NCEMC and Duke Energy Progress. The ~~carrying value~~Settlement Agreement provides for an ROE of 10%, effective January 1, 2022, among other contract modifications. On July 5, 2022, NCEMC filed comments in support of the ~~376-MW Asheville coal-fired plant, including associated ash basin closure costs,~~Settlement Agreement. The parties are awaiting FERC approval of ~~$405 million and $492 million~~the Settlement Agreement. The final disposition of these proceedings is ~~included in Generation facilities~~not expected to ~~be retired, net~~have a material effect on the results of operations, cash flows or financial position of Duke Energy ~~Progress' Condensed Consolidated Balance Sheets as of September 30, 2017, and December 31, 2016, respectively.~~Progress.

~~PART I~~

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

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

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

Duke Energy Florida

~~Hurricane Irma Storm Damage~~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 the $173 million retail portion of the expected DOE award from its lawsuit to recover spent nuclear fuel to mitigate customer rates over the term of the 2021 Settlement. In return, Duke Energy Florida will be able to recognize the $173 million into earnings from 2022 through 2024. 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.

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 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 production tax credits and to flow back the expected 2022 production tax credits via an adjustment to the capacity cost recovery clause. Duke Energy Florida cannot predict the outcome of this matter. See Note 16 for additional information on the IRA.

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.


FINANCIAL STATEMENTS			REGULATORY MATTERS

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 the oral argument on February 9, 2022. On May 27, 2022, the Supreme Court of Florida issued an order remanding the case back to the FPSC so that the FPSC can amend its order to better address some of the arguments raised by LULAC. On September ~~2017, all~~23, 2022, the FPSC issued a revised order and submitted it on September 26, 2022, to the Supreme Court of Florida. 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.

Hurricane Ian

On September 28, 2022, much of Duke Energy Florida’s service territory was impacted by Hurricane ~~Irma,~~Ian, which caused significant damage resulting in more than 1.1 million outages. Duke Energy Florida's September 30, 2022 Condensed Consolidated Balance Sheets included an estimate of approximately ~~1.3~~$162 million ~~customers experiencing outages.~~related to deferred Hurricane Ian storm costs incurred through September 30, 2022, consistent with the FPSC's storm rule, in Regulatory assets within Other Noncurrent Assets. Total storm restoration costs, including capital, are ~~currently~~ estimated ~~at approximately $500 million. These estimates could~~to be in the range of $325 million to $375 million by the end of the year. The estimate will change as Duke Energy Florida receives additional information on actual costs. After depleting any existing storm reserves, which were approximately ~~$60~~$107 million before Hurricane ~~Irma,~~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 for retail customers.~~million. Duke Energy Florida plans to make this petition ~~by the end of 2017. At September 30, 2017, Duke Energy Florida's Condensed Consolidated Balance Sheets included approximately $400 million of recoverable costs under the FPSC's storm rule~~ in Regulatory assets within Other Noncurrent Assets related to deferred Hurricane Irma storm costs. This amount is in addition to the storm reserve replenishment discussed above as part of Duke Energy Florida's petition to the FPSC.late 2022 or early 2023.

~~2017 Second Revised and Restated Settlement Agreement~~

On October 25, 2017, the FPSC approved a 2017 Second Revised and Restated Settlement Agreement (2017 Settlement) filed by Duke Energy Florida. The 2017 Settlement replaces and supplants the Revised and Restated Stipulation and Settlement Agreement approved in November 2013 (2013 Settlement). The 2017 Settlement extends the base rate case stay-out provision from the 2013 Settlement through the end of 2021 unless actual or projected return on equity falls below 9.5 percent; however, Duke Energy Florida is allowed a multiyear increase to its base rates of $67 million per year in 2019, 2020 and 2021, as well as base rate increases for solar generation. In addition to carrying forward the provisions contained in the 2013 Settlement related to the Crystal River 1 and 2 coal units and future generation needs in Florida, the 2017 Settlement contains provisions related to future investments in solar and renewable energy technology, future investments in AMI technology as well as recovery of existing meters, impacts of potential tax reform, an electric vehicle charging station pilot program, as well as the termination of the proposed Levy Nuclear Project discussed below. As part of the 2017 Settlement, Duke Energy Florida will not move forward with building the Levy nuclear plant and recorded an pretax impairment charge of approximately $135 million in third quarter 2017 to write off all unrecovered Levy Nuclear Project costs, including the COL.

The 2017 Settlement includes provisions to recover 2017 under-recovered fuel costs of approximately $196 million over a 24-month period beginning in January 2018. On September 1, 2017, Duke Energy Florida submitted Alternate 2018 Fuel and Capacity clause projection filings consistent with the terms of the 2017 Settlement. The updated capacity filing reflects the removal of all Levy costs. The FPSC approved Duke Energy Florida's 2018 Alternate projection filings on October 25, 2017. A final order is expected by the end of 2017.

~~Levy Nuclear Project~~

On July 28, 2008, Duke Energy Florida applied to the NRC for COLs for two Westinghouse AP1000 reactors at Levy (Levy Nuclear Project). In 2008, the FPSC granted Duke Energy Florida’s petition for an affirmative Determination of Need and related orders requesting cost recovery under Florida’s nuclear cost-recovery rule, together with the associated facilities, including transmission lines and substation facilities. In October 2016, the NRC issued COLs for the proposed Levy Nuclear Plant Units 1 and 2. Duke Energy Florida is not required to build the nuclear reactors as a result of the COLs being issued.

On January 28, 2014, Duke Energy Florida terminated the Levy engineering, procurement and construction agreement (EPC). Duke Energy Florida may be required to pay for work performed under the EPC. Duke Energy Florida recorded an exit obligation in 2014 for the termination of the EPC. This liability was recorded within Other in Other Noncurrent Liabilities with an offset primarily to Regulatory assets on the Condensed Consolidated Balance Sheets. Duke Energy Florida is allowed to recover reasonable and prudent EPC cancellation costs from its retail customers. On May 1, 2017, Duke Energy Florida filed a request with the FPSC to recover approximately $82 million of Levy Nuclear Project costs from retail customers in 2018. As part of the 2017 Settlement discussed above, Duke Energy Florida is no longer seeking recovery of costs related to the Levy Nuclear Project and the ongoing Westinghouse litigation discussed in Note 5. All remaining Levy Nuclear Project issues have been resolved.

~~Hines Chiller Uprate Project~~

On February 2, 2017, Duke Energy Florida filed a petition seeking approval to include in base rates the revenue requirement for a Chiller Uprate Project (Uprate Project) at the Hines Energy Complex. The Uprate Project was placed into service in March 2017 at a cost of approximately $150 million. The annual retail revenue requirement is approximately $19 million. On March 28, 2017, the FPSC issued an order approving the revenue requirement, which was included in base rates for the first billing cycle of April 2017.

Duke Energy Ohio

Duke Energy ~~Kentucky Rate Case~~

On September 1, 2017, Duke Energy Kentucky filed a rate case with the KPSC requesting an increase in electric base rates of approximately $49 million, which represents an approximate 15 percent increase on the average customer bill. The rate increase is driven by increased investment in utility plant, increased operations and maintenance expenses, and recovery of regulatory assets. The application also includes implementation of the Environmental Surcharge Mechanism to recover environmental costs not recovered in base rates, requests to establish a Distribution Capital Investment Rider to recover incremental costs of specific programs, requests to establish a FERC Transmission Cost Reconciliation Rider to recover escalating transmission costs and modification to the Profit Sharing Mechanism to increase customers' share of proceeds from the benefits of owning generation and to mitigate shareholder risks associated with that generation. The KPSC set filing deadlines of December 29, 2017, and February 14, 2018, for intervenor testimony and rebuttal testimony, respectively. An evidentiary hearing has not been scheduled.~~Duke Energy Kentucky anticipates that rates will go into effect in mid-April 2018. Duke Energy Kentucky cannot predict the outcome of this matter.~~

~~PART I~~

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

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

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

Ohio Electric ~~Security Plan Filing~~

On June 1, 2017, Duke Energy Ohio filed with the PUCO a request for a standard service offer in the form of an electric security plan (ESP). If approved by the PUCO, the term of the ESP would be from June 1, 2018, to May 31, 2024. Terms of the ESP include continuation of market-based customer rates through competitive procurement processes for generation, continuation and expansion of existing rider mechanisms and proposed new rider mechanisms relating to regulatory mandates, costs incurred to enhance the customer experience and transform the grid and a service reliability rider for vegetation management. Public hearings were held in October 2017 and an evidentiary hearing scheduled to begin on November 13, 2017, has been continued to November 28, 2017. Duke Energy Ohio cannot predict the outcome of this matter.

~~Woodsdale Station Fuel System Filing~~

On June 9, 2015, the FERC ruled in favor of PJM Interconnection, LLC (PJM) on a revised Tariff and Reliability Assurance Agreement including implementation of a Capacity Performance (CP) proposal and to amend sections of the Operating Agreement related to generation non-performance. The CP proposal includes performance-based penalties for non-compliance. Duke Energy Kentucky is a Fixed Resource Requirement (FRR) entity, and therefore is subject to the compliance standards through its FRR plans. A partial CP obligation will apply to Duke Energy Kentucky in the delivery year beginning June 1, 2019, with full compliance beginning June 1, 2020. Duke Energy Kentucky has developed strategies for CP compliance investments. On May 31, 2017, Duke Energy Kentucky filed an application with the KPSC requesting authority to construct an ultra-low sulfur diesel backup fuel system for the Woodsdale Station. The back-up fuel system is projected to cost approximately $55 million and, if approved, is anticipated to be in service prior to the CP compliance deadline of April 2019. Duke Energy Kentucky cannot predict the outcome of this matter.

~~Ohio Valley Electric Corporation~~

On March 31, 2017, Duke Energy Ohio filed for approval to adjust its existing price stabilization rider (Rider PSR), which is currently set at zero dollars, to pass through net costs related to its contractual entitlement to capacity and energy from the generating assets owned by OVEC. The filing seeks to adjust Rider PSR for OVEC costs subsequent to April 1, 2017. Duke Energy Ohio is seeking deferral authority for net costs incurred from April 1, 2017, until the new rates under Rider PSR are put into effect. Various intervenors have filed motions to dismiss or stay the proceeding and Duke Energy Ohio has opposed these filings. See Note 13 for additional discussion of Duke Energy Ohio's ownership interest in OVEC. Duke Energy Ohio cannot predict the outcome of this matter.

~~East Bend Coal Ash Basin Filing~~

On December 2, 2016, Duke Energy Kentucky filed with the KPSC a request for a CPCN for construction projects necessary to close and repurpose an ash basin at the East Bend facility as a result of current and proposed U.S. Environmental Protection Agency (EPA) regulations. Duke Energy Kentucky estimated a total cost of approximately $93 million in the filing and expects in-service date in the fourth quarter of 2018. On June 6, 2017, the KPSC approved the CPCN request.

Base Rate Case

Duke Energy Ohio filed with the PUCO an electric distribution base rate case application ~~and~~on October 1, 2021, with supporting testimony filed on October 15, 2021, requesting an increase in ~~March~~electric distribution base rates of approximately $55 million and an ROE of 10.3%. This is an approximate 3.3% 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 electric distribution base rate case in 2017. Duke Energy Ohio ~~has requested~~is also seeking to adjust the caps on its Distribution Capital Investment Rider (DCI Rider). The Staff of the PUCO (Staff) report was issued on May 19, 2022, recommending an ~~estimated annual~~ increase in electric distribution base rates of $2 million to $15 million with an ROE range of 8.84% to 9.85%. 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 ~~$15~~$23 million and ~~a return on equity~~an ROE of ~~10.4 percent.~~9.5%. The application also includes requests to continue certain current riders and establish new riders related to LED Outdoor Lighting Service and regulatory mandates. On September 26, 2017, the PUCO staff filed a report recommending a revenue decrease between approximately $18 million and $29 million and a return on equity between 9.22 percent and 10.24 percent. Objectionsstipulation is among all but one party to the ~~staff report~~proceeding. The four-day hearing ended on October 11, 2022. Initial briefs were filed on October 31, 2022, and reply briefs are due by November ~~9, 2017. Public hearings were held in late October and early November. An evidentiary hearing is scheduled to begin on December 11, 2017.~~14, 2022. 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. The application remains under review.

•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.


FINANCIAL STATEMENTS			REGULATORY MATTERS

•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.

Duke Energy Ohio cannot predict the outcome of this matter.

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 Capital Expenditure Program Rider (CEP Rider). Duke Energy Ohio cannot predict the outcome of this matter.

Natural Gas Pipeline Extension

Duke Energy Ohio ~~is proposing to install~~installed a new natural gas pipeline (the Central Corridor Project) in its Ohio service territory to increase system reliability and enable the retirement of older infrastructure. ~~On January 20, 2017,~~Construction of the pipeline extension was completed and placed in service on March 14, 2022, with a total cost of approximately $170 million (excluding overheads and AFUDC).

MGP Cost Recovery

In an order issued in 2013, the PUCO approved Duke Energy Ohio's deferral and recovery of costs related to environmental remediation at two sites (East End and West End) that housed former MGP operations. Duke Energy Ohio made annual applications with the PUCO to recover its incremental remediation costs consistent with the PUCO’s directive in Duke Energy Ohio’s 2012 natural gas base rate case. The Staff issued reports recommending a disallowance of MGP remediation costs incurred that the Staff believes are not eligible for recovery. The Staff interprets the PUCO’s 2013 order granting Duke Energy Ohio recovery of MGP remediation as limiting the recovery to work directly on the East End and West End sites. Duke Energy Ohio filed an amended application with the Ohio Power Siting Board for approval of one of two proposed routes. A public hearing was held on June 15, 2017, and an adjudicatory hearing was scheduled to begin September 11, 2017. On August 24, 2017, an administrative law judge (ALJ) granted a request made by Duke Energy Ohio to delay the procedural schedule while it works through various issues relatedreply comments objecting to the ~~pipeline route. If approved, construction of~~Staff’s recommendations and explaining, among other things, the pipeline extension is expected to be completed before the 2020/2021 winter season. The proposed project involves the installation of a natural gas line and is estimated to cost approximately $110 million, excluding AFUDC.

~~Advanced Metering Infrastructure~~

On April 25, 2016, Duke Energy Kentucky filed with the KPSC an application for approval of a CPCN for the construction of advanced metering infrastructure. Duke Energy Kentucky estimates the $49 million project will take two years to complete. Duke Energy Kentucky also requested approval to establish a regulatory asset for the remaining book value of existing meter equipment and inventory to be replaced. Duke Energy Kentucky and the Kentucky attorney general entered into a stipulation to settle matters related to the application. On May 25, 2017, the KPSC issued an order to approve the stipulation with certain modifications. On June 1, 2017, Duke Energy Kentucky filed its acceptance of the modifications.obligation Duke Energy Ohio has ~~approximately $7 million included in Regulatory assets~~under Ohio law to remediate all areas impacted by the former MGPs and not just physical property that housed the former plants and equipment. Additionally, the Staff recommended that any discussion pertaining to Duke Energy Ohio's recovery of ongoing MGP costs should be directly tied to or netted against insurance proceeds collected by Duke Energy Ohio. An evidentiary hearing concluded on ~~its Condensed Consolidated Balance Sheets at September 30, 2017,~~November 21, 2019. Initial briefs were filed on January 17, 2020, and reply briefs were filed on February 14, 2020.

The 2013 PUCO order also contained conditional deadlines for completing the ~~book value~~MGP environmental remediation and the deferral of ~~existing meter equipment.~~

~~PART I~~

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

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

~~Combined Notes~~related remediation costs. Subsequent to ~~Condensed Consolidated Financial Statements – (Unaudited) – (Continued)~~

~~Accelerated Natural Gas Service Line Replacement Rider~~

the order, the deadline was extended to December 31, 2019. On ~~January 20, 2015,~~May 10, 2019, Duke Energy Ohio filed an application requesting a continuation of its existing deferral authority for ~~approval of an accelerated natural gas service line replacement program (ASRP). Under~~MGP remediation that must occur after December 31, 2019. On July 12, 2019, the ASRP, Duke Energy Ohio proposed to replace certain natural gas service lines on an accelerated basis over a 10-year period. Duke Energy Ohio also proposed to complete preliminary survey and investigation work related to natural gas service lines that are customer owned and for which it does not have valid records and, further, to relocate interior natural gas meters to suitable exterior locations where such relocation can be accomplished.Staff recommended the commission deny the deferral authority request. On September 13, 2019, intervenor comments were filed opposing Duke Energy Ohio's ~~projected total capital~~request for continuation of existing deferral authority and operations and maintenance expenditures under the ASRP were approximately $240 million. The filing also sought approval of a rider mechanism (Rider ASRP) to recover related expenditures. Duke Energy Ohio proposed to update Rider ASRP on ~~an annual basis. Intervenors opposed the ASRP, primarily because they believe the program is neither required nor necessary under federal pipeline regulation. On~~ October ~~26, 2016, the PUCO issued an order denying the proposed ASRP. Duke Energy Ohio's application for rehearing of the PUCO decision was denied on May 17, 2017.~~

~~Energy Efficiency Cost Recovery~~

~~On March 28, 2014,~~2, 2019, Duke Energy Ohio filed ~~an application for recovery of program costs, lost distribution revenue~~reply comments.

A Stipulation and performance incentives related to its energy efficiency and peak demand reduction programs. These programs are undertaken to comply with environmental mandates set forth in Ohio law. The PUCO approved Duke Energy Ohio’s application but found that Duke Energy OhioRecommendation was not permitted to use banked energy savings from previous years in order to calculate the amount of allowed incentive. This conclusion represented a change to the cost recovery mechanism that had been agreed upon by intervenors and approved by the PUCO in previous cases. The PUCO granted the applications for rehearing filed jointly by Duke Energy Ohio, the Staff, the Office of the Ohio Consumers' Counsel and ~~an intervenor. On January 6, 2016,~~the Ohio Energy Group on August 31, 2021, which was approved without modification by the PUCO on April 20, 2022. The Stipulation and Recommendation resolved all open issues regarding MGP remediation costs incurred between 2013 and 2019, Duke Energy Ohio’s request for additional deferral authority beyond 2019 and the pending issues related to the Tax Cuts and Jobs Act (the Tax Act) described below as it related to Duke Energy Ohio’s natural gas operations. As a result of the approval of the Stipulation and Recommendation, Duke Energy Ohio recognized pretax charges of approximately $15 million to Operating revenues, regulated natural gas and $58 million to Operation, maintenance and other and a tax benefit of $72 million to Income Tax (Benefit) Expense in the ~~PUCO Staff entered into~~Condensed Consolidated Statements of Operations for the nine months ended September 30, 2022. The Stipulation and Recommendation further acknowledged Duke Energy Ohio’s ability to file a ~~stipulation, pending~~request for additional deferral authority in the ~~PUCO's approval, to resolve issues~~future related to ~~performance incentives and~~environmental remediation of any MGP impacts in the ~~PUCO Staff audit of 2013 costs, among other issues. In December 2015, based upon the stipulation, Duke Energy~~ Ohio ~~re-established approximately $20 million of the revenues that had been previously reversed.~~River, if necessary, subject to specific conditions. On ~~October 26, 2016, the PUCO issued an order approving the stipulation without modification. Intervenors requested a rehearing of the PUCO decision. In December 2016,~~June 15, 2022, the PUCO granted athe rehearing requests of Interstate Gas Supply, Inc. (IGS) and The Retail Energy Supply Association (RESA), which were filed on May 20, 2022, for ~~the purpose of~~ further ~~review.~~ consideration. Duke Energy Ohio cannot predict the outcome of this matter.

Tax Act – Ohio

On ~~June 15, 2016,~~December 21, 2018, Duke Energy Ohio filed an application to change its base rate tariffs and establish a new rider to implement the benefits of the Tax Act for ~~approval~~natural gas customers. The new rider would flow through to customers the benefit of the reduction in the statutory federal tax rate from 35% to 21% since January 1, 2018, all future benefits of the lower tax rates and a ~~three-year energy efficiency~~full refund of deferred income taxes collected at the higher tax rates in prior years. Deferred income taxes subject to normalization rules would be refunded consistent with federal law and ~~peak demand reduction portfolio of programs. A stipulation~~deferred income taxes not subject to normalization rules will be refunded over a 10-year period. An evidentiary hearing occurred on August 7, 2019. The Stipulation and ~~modified stipulation were~~Recommendation filed on ~~December 22, 2016,~~August 31, 2021, and approved on April 20, 2022, disclosed in the MGP Cost Recovery matter above, resolves the outstanding issues in this proceeding by providing customers a one-time bill credit for the reduction in the statutory federal tax rate from 35% to 21% since January ~~27, 2017, respectively. Under~~1, 2018, through June 1, 2022, and reducing base rates going forward. Deferred income taxes subject to normalization rules will be refunded consistent with federal law through a new rider. Deferred income taxes not subject to normalization rules were written off. The commission granted the ~~terms~~rehearing requests of ~~the stipulations, which included support~~IGS and RESA for deferral authority of all costs and a cap on shared savings incentives, Duke Energy Ohio has offered its energy efficiency and peak demand reduction programs throughout 2017. On February 3, 2017, Duke Energy Ohio filed for deferral authority of its costs incurred in 2017 in respect of its proposed energy efficiency and peak demand reduction portfolio. The PUCO staff and one intervenor have proposed a cap on both program costs and shared savings. On September 27, 2017, the PUCO issued an order approving a modified stipulation. The modifications impose an annual cap of approximately $38 million on program costs and shared savings incentives combined, but allowed for Duke Energy Ohio to file for a waiver of costs in excess of the cap in 2017. On October 12, 2017, Duke Energy Ohio filed a motion for a waiver for recovery of costs incurred in 2017 above the annual cap. further consideration. Duke Energy Ohio cannot predict the outcome of this matter.

~~2012 Natural Gas Rate Case/Manufactured Gas Plant Cost Recovery~~


FINANCIAL STATEMENTS			REGULATORY MATTERS

Midwest Propane Caverns

Duke Energy Ohio used propane stored in caverns to meet peak demand during winter for several decades. Once the Central Corridor Project was complete and placed in service, the propane peaking facilities were no longer necessary and were retired. On ~~November 13, 2013,~~October 7, 2021, Duke Energy Ohio requested deferral treatment of the property, plant and equipment as well as costs related to propane inventory and decommissioning costs. On January 6, 2022, the Staff issued a report recommending deferral authority for costs related to propane inventory and decommissioning costs, but not for the net book value of the remaining plant assets. As a result of the Staff's report, Duke Energy Ohio recorded a $19 million charge to Impairment of assets and other charges on the Condensed Consolidated Statements of Operations and Comprehensive Income in the fourth quarter of 2021. A Stipulation and Recommendation was filed jointly by Duke Energy Ohio and the Staff on April 27, 2022, recommending, among other things, approval of deferral treatment of a portion of the net book value of the property, plant and equipment prior to the 2021 impairment at the time of the next natural gas base rate case, excluding operations and maintenance savings, decommissioning costs not to exceed $7 million and costs related to propane inventory. The Stipulation and Recommendation states that Duke Energy Ohio will seek recovery of the deferral through its next natural gas base rate case proceeding with a proposed amortization period of at least 10 years and include an independent engineering study analyzing the necessity and prudency of the incremental investments made at the facilities since March 31, 2012. Duke Energy Ohio will not seek a return on the deferred amounts. An evidentiary hearing was held on September 8, 2022. On October 5, 2022, the PUCO issued an order approving the Stipulation and Recommendation as filed. As a ~~settlement~~result of ~~Duke Energy Ohio’s natural gas base rate case and authorizing~~ the ~~recovery of costs incurred between 2008 and 2012 for environmental investigation and remediation of two former manufactured gas plant (MGP) sites. The PUCO~~ order, ~~also authorized~~ Duke Energy Ohio recorded a reversal of $12 million to ~~continue deferring MGP environmental investigation~~Impairment of assets and ~~remediation costs incurred subsequent~~other charges on the Condensed Consolidated Statements of Operations and Comprehensive Income for the three months and nine months ended September 30, 2022.

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 ~~2012~~result in a 15.6% or $396 million average retail rate increase, including the impacts of the Utility Receipts Tax. Hearings concluded on February 7, 2020. 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 ~~submit annual filings to adjust~~a prospective change in depreciation and use of regulatory asset for the ~~MGP rider for future costs. Intervening parties appealed this decision~~end-of-life inventory at retired generating plants, approximately 20% was due to the ~~Ohio~~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. Appellate briefs were filed on October 14, 2020, focusing on three issues: wholesale sales allocations, coal ash basin cost recovery and the Edwardsport IGCC operating and maintenance expense level approved. The Indiana Court of Appeals affirmed the IURC decision on May 13, 2021. The Indiana Office of Utility Consumer Counselor (OUCC) and the Duke Industrial Group filed a joint petition to transfer the rate case appeal to the Indiana Supreme Court ~~and~~ on June ~~29, 2017, the Ohio~~28, 2021. The Indiana Supreme Court issued its ~~decision affirming~~opinion on March 10, 2022, finding that the ~~PUCO order. Appellants~~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 nine months ended September 30, 2022. Duke Energy Indiana filed a request for ~~reconsideration, which was denied on September 27, 2017. This matter is now final.~~

The PUCO order also contained deadlines for completing the MGP environmental investigation and remediation costs at the MGP sites. For the property known as the East End site, the PUCO order established a deadline of December 31, 2016, which was subsequently extended to December 31, 2019. In January 2017, intervening parties filed for rehearing of the PUCO's decision. On February 8, 2017, the PUCO denied the rehearing request. As of September 30, 2017, Duke Energy Ohio had approximately $36 million included in Regulatory assets on the Condensed Consolidated Balance Sheets for future remediation costs expected to be incurred at the East End site.

~~Regional Transmission Organization Realignment~~

Duke Energy Ohio, including Duke Energy Kentucky, transferred control of its transmission assets from Midcontinent Independent System Operator, Inc. (MISO) to PJM, effective December 31, 2011. The PUCO approved a settlement related to Duke Energy Ohio’s recovery of certain costs of the Regional Transmission Organization (RTO) realignment via a non-bypassable rider. Duke Energy Ohio is allowed to recover all MISO Transmission Expansion Planning (MTEP) costs, including but not limited to Multi Value Project (MVP) costs, directly or indirectly charged to Ohio customers. Duke Energy Ohio also agreed to vigorously defend against any charges for MVP projects from MISO. The KPSC also approved a request to effect the RTO realignment, subject to a commitment not to seek double recovery in a future rate case of the transmission expansion fees that may be charged by MISO and PJM in the same period or overlapping periods.

Duke Energy Ohio had a recorded liability for its exit obligation and share of MTEP costs, excluding MVP, of $90 million at September 30, 2017, and December 31, 2016, recorded within Other in Current liabilities and Other in Other Noncurrent Liabilities on the Condensed Consolidated Balance Sheets. The retail portions of MTEP costs billed by MISO are recovered by Duke Energy Ohio through a non-bypassable rider. As of September 30, 2017, and December 31, 2016, Duke Energy Ohio had $71 million recorded in Regulatory assets on the Condensed Consolidated Balance Sheets.

~~MVP.~~ MISO approved 17 MVP proposals prior to Duke Energy Ohio’s exit from MISO on December 31, 2011. Construction of these projects is expected to continue through 2020. Costs of these projects, including operating and maintenance costs, property and income taxes, depreciation and an allowed return, are allocated and billed to MISO transmission owners.

~~PART I~~

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

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

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

~~On December 29, 2011, MISO filed a tariff~~ with the ~~FERC providing for~~Supreme Court on April 11, 2022, which the ~~allocation of MVP costs to a withdrawing owner based~~court denied on monthly energy usage. The FERC set for hearing (i) whether MISO’s proposed cost allocation methodology to transmission owners who withdrew from MISO prior to January 1, 2012, is consistent with the tariff at the time of their withdrawal from MISO and, (ii) if not, what the amount of and methodology for calculating any MVP cost responsibility should be. In 2012, MISO estimated Duke Energy Ohio’s MVP obligation over the period from 2012 to 2071 at $2.7 billion, on an undiscounted basis. On July 16, 2013, a FERC ALJ issued an initial decision. Under this Initial Decision, Duke Energy Ohio would be liable for MVP costs. Duke Energy Ohio filed exceptions to the initial decision, requesting FERC to overturn the ALJ’s decision.

On October 29, 2015, the FERC issued an order reversing the ALJ's decision. The FERC ruled the cost allocation methodology is not consistent with the MISO tariff and that Duke Energy Ohio has no liability for MVP costs after its withdrawal from MISO. On May 19, 2016, the FERC denied the request for rehearing filed by MISO and the MISO Transmission Owners. On July 15, 2016, the MISO Transmission Owners filed a petition for review with the U.S. Court of Appeals for the Sixth Circuit. On June 21, 2017, a three-judge panel affirmed FERC's 2015 decision holding that Duke Energy Ohio has no liability for the cost of the MVP projects constructed after Duke Energy Ohio's withdrawal from MISO. MISO did not file further petitions for review and this matter is now final.

~~Duke Energy Indiana~~

~~Coal Combustion Residual Plan~~

~~On March 17, 2016,~~26, 2022. Duke Energy Indiana filed ~~with~~its testimony in the ~~IURC a request for approval of its first group of federally mandated CCR rule compliance projects (Phase I CCR Compliance Projects)~~remand proceeding on August 18, 2022. An evidentiary hearing is scheduled to comply with the EPA's CCR rule. The projects in this Phase I filing are CCR compliance projects, including the conversion of Cayuga and Gibson stations to dry bottom ash handling and related water treatment.begin January 20, 2023. Duke Energy Indiana ~~has requested timely~~cannot predict the outcome of this matter.

2020 Indiana Coal Ash Recovery Case

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 approximately $380 million in retail capital costs, including AFUDC, and recovery of incremental operating and maintenance costs under a federal mandate tracker that provides for timely recovery of 80 percent of such costs andEnvironmental Management (IDEM) as well as continuing deferral, with carrying costs, ~~of 20 percent of such costs for recovery in a subsequent retail base rate case. On January 24, 2017, Duke Energy Indiana and various intervenors filed a settlement agreement with~~on the IURC. Terms of the settlement include recovery of 60 percent of the estimated CCR compliance construction project capital costs through existing rider mechanisms and deferral of 40 percent of these costs until Duke Energy Indiana's next general retail rate case. The deferred costs will earn a return based on Duke Energy Indiana's long-term debt rate of 4.73 percent until costs are included in retail rates, at which time the deferred costs will earn a full return. Costs are to be capped at $365 million, plus actual AFUDC. Costs above the cap would be considered for recovery in the next rate case. Terms of the settlement agreement also require Duke Energy Indiana to perform certain reporting and groundwater monitoring.balance. An evidentiary hearing was held on ~~February 23, 2017, and Duke Energy Indiana filed a proposed order with the IURC on March 30, 2017.~~September 14, 2020. Briefing was completed by mid-September 2021. On ~~May 24, 2017, the IURC approved the settlement agreement.~~

~~FERC Transmission Return on Equity Complaints~~

Customer groups have filed with the FERC complaints against MISO and its transmission-owning members, including Duke Energy Indiana, alleging, among other things, that the current base rate of return on equity earned by MISO transmission owners of 12.38 percent is unjust and unreasonable. The complaints, among other things, claim that the current base rate of return on equity earned by MISO transmission owners should be reduced to 8.67 percent. On January 5, 2015, the FERC issued an order accepting the MISO transmission owners' adder of 0.50 percent to the base rate of return on equity based on participation in an RTO subject to it being applied to a return on equity that is shown to be just and reasonable in the pending return on equity complaints. On December 22, 2015, the presiding FERC ALJ in the first complaint issued an Initial Decision in which the base rate of return on equity was set at 10.32 percent. On September 28, 2016, the Initial Decision in the first complaint was affirmed by FERC, but is subject to rehearing requests. On June 30, 2016, the presiding FERC ALJ in the second complaint issued an Initial Decision setting the base rate of return on equity at 9.70 percent. The Initial Decision in the second complaint is pending FERC review. On April 14, 2017, the U.S. Court of Appeals for the District of Columbia Circuit, in ~~Emera Maine v. FERC~~, reversed and remanded certain aspects of the methodology employed by FERC to establish rates of return on equity. This decision may affect the outcome of the complaints against Duke Energy Indiana. Duke Energy Indiana currently believes these matters will not have a material impact on its results of operations, cash flows and financial position.

~~Grid Infrastructure Improvement Plan~~

~~In June 2016,~~November 3, 2021, the IURC issued an order ~~approving a settlement agreement among Duke Energy Indiana and certain parties related to a proposed grid infrastructure improvement plan. The settlement agreement included~~allowing recovery for post-2018 coal ash basin closure costs for the ~~removal of an AMI project and also provided for~~plans that have been approved by IDEM, as well as continuing deferral, ~~accounting for depreciation and post-in-service~~with carrying costs, for AMI projects outside the plan. Duke Energy Indiana withdrew its request for a regulatory asset for current meters and will retain any savings associated with future AMI installation until the next retail base rate case, which is required to be filed prior to the end of the plan. During the third quarter of 2016, Duke Energy Indiana decided to implement the AMI project. This decision resulted in a pretax impairment charge related to existing or non-AMI meters of approximately $8 million for the three and nine months ended September 30, 2016, based in part on the requirement to file a base rate case in 2022 under the approved plan. As of September 30, 2017, Duke Energy Indiana's remaining net book value of non-AMI meters is approximately $43 million and will be depreciated through 2022. In the event that Duke Energy Indiana were to file a base rate case earlier than 2022, it would result in additional impairment charges.

~~PART I~~

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

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

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

~~Benton County Wind Farm Dispute~~

~~On December 16, 2013, Benton County Wind Farm LLC (BCWF)~~balance. The OUCC filed a lawsuit against Duke Energy Indiana seeking damages for past generation losses totaling approximately $16 million alleging Duke Energy Indiana violated its obligations under a 2006 PPA by refusing to offer electricity to the market at negative prices. Damage claims continue to increase during times that BCWF is not dispatched. Under 2013 revised MISO market rules, Duke Energy Indiana is required to make a price offer to MISO for the power it proposes to sell into MISO markets and MISO determines whether BCWF is dispatched. Because market prices would have been negative due to increased market participation, Duke Energy Indiana determined it would not bid at negative prices in order to balance customer needs against BCWF's need to run. BCWF contends Duke Energy Indiana must bid at the lowest negative price to ensure dispatch, while Duke Energy Indiana contends it is not obligated to bid at any particular price, that it cannot ensure dispatch with any bid and that it has reasonably balanced the parties' interests. On July 6, 2015, the U.S. District Court for the Southern Districtnotice of Indiana entered judgment against BCWF on all claims. BCWF appealed the decision and on December 9, 2016, the appeals court ruled in favor of BCWF. On June 30, 2017, the parties finalized a settlement agreement. Terms of the settlement included Duke Energy Indiana paying $29 million for back damages. Additionally, the parties agreed on the method by which the contract will be bid into the market in the future. Duke Energy Indiana recorded an obligation and a regulatory asset related to the settlement amount in fourth quarter 2016. The settlement amount was paid in June 2017. The IURC issued an order on September 27, 2017, approving recovery of the settlement amount through Duke Energy Indiana's fuel clause. The IURC order has been appealedappeal to the Indiana Court of ~~Appeals.~~Appeals on December 3, 2021. The OUCC's opening brief was filed on October 12, 2022. Duke Energy Indiana cannot predict the outcome of this matter.

~~Piedmont~~TDSIC 2.0

~~South Carolina Rate Stabilization Adjustment Filing~~

~~In June 2017, Piedmont~~On November 23, 2021, Duke Energy Indiana filed ~~with the PSCSC under the South Carolina Rate Stabilization Act its quarterly monitoring report~~ for the 12-month period ending March 31, 2017. The filing included a revenue deficiency calculation and tariff rates in order to permit Piedmont the opportunity to earn the rate of return on equity of 12.6 percent established in its last general rate case. On October 4, 2017, the PSCSC approved a settlement agreement between Piedmont and the PSCSC Office of Regulatory Staff. Termsapproval of the ~~settlement included implementation~~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 reliability to our customers, harden and improve resiliency of ~~rates for~~ the ~~12-month period beginning November 2017 with~~grid, enable expansion of renewable and distributed energy projects and encourage economic development. In addition, the IURC set up a ~~return~~subdocket to consider the targeted economic development project, which the IURC approved on ~~equity of 10.2 percent.~~

~~North Carolina Integrity Management Rider Filings~~

~~In October 2017, Piedmont~~March 2, 2022. On July 15, 2022, the OUCC filed a ~~petition under~~notice of appeal to the ~~Integrity Management Rider (IMR) mechanism to collect an additional $8.9 million~~Indiana Court of Appeals in ~~annual revenues, effective December 2017, based~~Duke Energy Indiana’s TDSIC 2.0 proceeding. An appellant brief was filed on ~~the eligible capital investments closed to integrity and safety projects over the six-month period ending September 30, 2017. Piedmont~~October 28, 2022. Duke Energy Indiana cannot predict the outcome of this matter.

~~In May 2017,~~


FINANCIAL STATEMENTS			REGULATORY MATTERS

Piedmont

2022 South Carolina Rate Case

On April 1, 2022, Piedmont filed an application with the PSCSC for a rate increase for retail customers of approximately $7 million, which represents an approximate 3.4% increase in retail revenues. The rate increase is driven by customer growth and infrastructure upgrade investments (plant additions) since Piedmont’s last proceeding in 2021 under South Carolina’s Rate Stabilization Act. In addition, Piedmont agreed with the South Carolina Office of Regulatory Staff (ORS) in 2019 to file a general rate case no later than April 1, 2022, to conduct a more comprehensive review of rates including the allocation of costs to residential, commercial and industrial customers. In addition to the ORS, the South Carolina Department of Consumer Affairs (DCA) and the ~~NCUC~~South Carolina Energy Users Committee (SCEUC) intervened in the case and filed testimony on July 12, 2022, each recommending downward adjustments relating to several issues, including ROE, capital structure, depreciation and employee compensation. Prior to hearing, Piedmont entered into a comprehensive settlement with the ORS and the SCEUC, which included a stipulated ROE of 9.49% and capital structure of 53.5% equity. The DCA stipulated to all terms with the exception of ROE and capital structure. An evidentiary hearing was held on August 15, 2022. On September 15, 2022, the PSCSC delivered its decision, which included an ROE of 9.3% and a capital structure of 52.2% equity and 47.8% debt and issued its final order on October 6, 2022. Revised customer rates became effective in October 2022 and resulted in a rate decrease for retail customers of approximately $1 million.

Tennessee Annual Review Mechanism

On October 10, 2022, the TPUC approved aPiedmont’s petition ~~under~~to adopt an Annual Review Mechanism (ARM) as allowed by Tennessee law. Under the ~~IMR mechanism~~ARM, Piedmont will adjust rates annually to ~~collect an additional $11.6 million in annual revenues, effective June 2017, based on the eligible capital investments closed to integrity and safety projects~~achieve its allowed 9.80% ROE over the ~~six-month period ending March 31, 2017.~~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 the initial rate adjustments request will be filed in May 2023 for rates effective October 1, 2023.

OTHER REGULATORY MATTERS

~~Atlantic Coast Pipeline, LLC~~

On September 2, 2014, Duke Energy, Dominion Resources (Dominion), Piedmont and Southern Company Gas announced the formation of Atlantic Coast Pipeline, LLC (ACP) to build and own the proposed Atlantic Coast Pipeline (ACP pipeline), an approximately 600-mile interstate natural gas pipeline running from West Virginia to North Carolina. The ACP pipeline is designed to meet the needs identified by Duke Energy Carolinas, Duke Energy Progress and Piedmont. The ACP pipeline development costs are estimated between $5.0 billion to $5.5 billion, excluding financing costs. Dominion will build and operate the ACP pipeline and holds a leading ownership percentage in ACP of 48 percent. Duke Energy owns a 47 percent interest through its Gas Utilities and Infrastructure segment. Southern Company Gas maintains a 5 percent interest. See Note 13 for additional information related to Duke Energy's ownership interest.

Duke Energy Carolinas, Duke Energy Progress and Piedmont, among others, will be customers of the pipeline. Purchases will be made under several 20-year supply contracts, subject to state regulatory approval. On September 18, 2015, ACP filed an application with the FERC requesting a CPCN authorizing ACP to construct the pipeline. ACP executed a construction agreement in September 2016. ACP also requested approval of an open access tariff and the precedent agreements it entered into with future pipeline customers. In December 2016, FERC issued a draft Environmental Impact Statement (EIS) indicating that the proposed pipeline would not cause significant harm to the environment or protected populations. The FERC issued the final EIS in July 2017. On October 13, 2017, FERC issued an order approving the CPCN, subject to conditions. On October 16, 2017, ACP accepted the FERC order subject to reserving its right to file a request for rehearing or clarification on a timely basis. Construction is projected to begin in the fourth quarter of 2017, with a targeted in-service date in late 2019. The project remains subject to other pending federal and state approvals.

~~Sabal Trail Transmission, LLC~~

On May 4, 2015, Duke Energy acquired a 7.5 percent ownership interest in Sabal Trail Transmission, LLC (Sabal Trail) from Spectra Energy Partners, LP, a master limited partnership, formed by Enbridge Inc. (formerly Spectra Energy Corp.). Spectra Energy Partners, LP holds a 50 percent ownership interest in Sabal Trail and NextEra Energy has a 42.5 percent ownership interest. Sabal Trail is a joint venture to construct a 515-mile natural gas pipeline (Sabal Trail pipeline) to transport natural gas to Florida. Total estimated project costs are approximately $3.2 billion. The Sabal Trail pipeline traverses Alabama, Georgia and Florida. The primary customers of the Sabal Trail pipeline, Duke Energy Florida and Florida Power & Light Company (FP&L), have each contracted to buy pipeline capacity for 25-year initial terms. See Note 13 for additional information related to Duke Energy's ownership interest.

~~PART I~~

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

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

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

On February 3, 2016, the FERC issued an order granting the request for a CPCN to construct and operate the pipeline. On September 7, 2016, FERC denied the intervenors' rehearing requests. On September 21, 2016, intervenors filed an appeal of FERC's CPCN orders to the U.S. Court of Appeals for the District of Columbia Circuit. On August 22, 2017, the appeals court ruled against FERC in the case for failing to include enough information on the impact of greenhouse-gas emissions carried by the pipeline and vacated the CPCN order. In response to the August 2017 court decision, the FERC issued a draft Supplemental Environmental Impact Statement (SEIS) on September 27, 2017. Comments on the SEIS are due by November 20, 2017. On October 6, 2017, FERC filed a petition with the D.C. Circuit Court of Appeals requesting a rehearing regarding the court's decision to vacate the CPCN order. On October 6, 2017, Sabal Trail and other natural gas shippers, including Duke Energy Florida, also filed a rehearing request with the D.C. Circuit Court of Appeals regarding the decision to vacate the CPCN order. It is unclear how this matter will impact the project going forward. The Sabal Trail pipeline has received other required regulatory approvals and the phase one mainline was placed in service in July 2017. On October 12, 2017, Sabal Trail filed a request with FERC to place in-service a lateral line to Duke Energy Florida's Citrus County Combined Cycle facility.

~~Constitution Pipeline Company, LLC~~

Duke Energy has a 24 percent ownership interest in Constitution Pipeline Company, LLC (Constitution). Constitution is a natural gas pipeline project slated to transport natural gas supplies from the Marcellus supply region in northern Pennsylvania to major northeastern markets. The pipeline will be constructed and operated by Williams Partners L.P., which has a 41 percent ownership share. The remaining interest is held by Cabot Oil and Gas Corporation and WGL Holdings, Inc. Duke Energy's total anticipated contributions are approximately $229 million.

On April 22, 2016, the New York State Department of Environmental Conservation (NYSDEC) denied Constitution’s application for a necessary water quality certification for the New York portion of the Constitution pipeline. Constitution filed legal actions in the U.S. Court of Appeals for the Second Circuit (U.S. Court of Appeals) challenging the legality and appropriateness of the NYSDEC’s decision and on August 18, 2017, the petition was denied in part and dismissed in part. On September 1, 2017, Constitution filed a petition for a rehearing of portions of the decision unrelated to the water quality certification, which was denied by the U.S. Court of Appeals. On October 11, 2017, Constitution filed a petition for declaratory order with the FERC requesting FERC to issue an order finding the NYSDEC waived its rights to issue a water quality certification by not acting on Constitution's application within the time frame required by statute, which would allow the project to proceed. Constitution has revised the target in-service date to as early as the first half of 2019 due to the NYDSEC's denial of the water quality certification and the legal actions being taken to challenge the decision, assuming the timely receipt of a Notice to Proceed from the FERC. Duke Energy cannot predict the outcome of this matter.

Since April 2016, with the actions of the NYSDEC, Constitution stopped construction and discontinued capitalization of future development costs until the project's uncertainty is resolved. To the extent the legal and regulatory proceedings have unfavorable outcomes, or if Constitution concludes that the project is not viable or does not go forward, an impairment charge of up to the recorded investment in the project, net of any cash and working capital returned, may be recorded.

~~See Note 13 for additional information related to ownership interest and carrying value of the investment.~~

Potential Coal Plant Retirements

The Subsidiary Registrants periodically file ~~Integrated Resource Plans (IRP)~~integrated resource plans (IRPs) with their state regulatory commissions. The IRPs provide a view of forecasted energy needs over a long term (10 to 20 years) and options being considered to meet those needs. ~~Recent~~ IRPs filed by the Subsidiary Registrants included planning assumptions to potentially retire certain coal-fired generating facilities in North Carolina ~~Florida~~ and Indiana earlier than their current estimated useful lives. Duke Energy continues to evaluate the potential need to retire these coal-fired generating facilities earlier than the current estimated useful lives ~~primarily because facilities do~~and plans to seek regulatory recovery for amounts that would not ~~have the requisite emission control equipment to meet EPA regulations recently approved or proposed.~~be otherwise recovered when any of these assets are retired.

The table below contains the net carrying value of generating facilities planned for retirement or included in recent IRPs as evaluated for potential retirement. Dollar amounts in the table below are included in Net property, plant and equipment on the Condensed Consolidated Balance Sheets as of September 30, ~~2017,~~2022, and exclude capitalized asset retirement costs.








		Remaining Net
	Capacity	Book Value
	(in MW)	(in millions)
Duke Energy Carolinas
Allen Steam Station Unit 1(a)	167	$	11
Allen Steam Station Unit 5(b)	259	243
Cliffside Unit 5(b)	546	351
Duke Energy Progress
Mayo Unit 1(b)	713	623
Roxboro Units 3-4(b)	1,409	433
Duke Energy Florida
Crystal River Units 4-5(c)	1,442	1,578
Duke Energy Indiana
Gibson Units 1-5(d)	2,845	2,019
Cayuga Units 1-2(d)	1,005	644
Total Duke Energy	8,386	$	5,902

(a)As part of the 2015 resolution of a lawsuit involving alleged New Source Review violations, Duke Energy Carolinas must retire Allen Steam Station Unit 1 by December 31, 2024. The long-term energy options considered in the IRP could result in retirement of this unit earlier than its current estimated useful life.

(b)These units were included in the IRP filed by Duke Energy Carolinas and Duke Energy Progress in North Carolina and South Carolina on September 1, 2020. The long-term energy options considered in the IRP could result in retirement of these units earlier than their current estimated useful lives.

(c)On January 14, 2021, Duke Energy Florida filed the 2021 Settlement agreement with the FPSC, which proposed depreciation rates reflecting retirement dates for Duke Energy Florida's last two coal-fired generating facilities, Crystal River Units 4-5, eight years ahead of schedule in 2034 rather than in 2042. The FPSC approved the 2021 Settlement on May 4, 2021. The remaining net book value reflected in the table above excludes $200 million of accelerated deprecation collected from retail customers pursuant to Duke Energy Florida's 2017 Settlement.

(d)The rate case filed July 2, 2019, included proposed depreciation rates reflecting retirement dates from 2026 to 2038. The depreciation rates reflecting these updated retirement dates were approved by the IURC as part of the rate case order issued on June 29, 2020.

Remaining Net
Capacity
Book Value
(in MW)
(in millions)
Duke Energy Carolinas
Allen Steam Station Units 1-3^(a)
585
$ 164
Progress Energy and Duke Energy Florida
Crystal River Units 1 and 2^(b)
873
111
Duke Energy Indiana
Gallagher Units 2 and 4^(c)
280
130
Total Duke Energy 1,738
$ 405


~~(a)~~FINANCIAL STATEMENTS			~~Duke Energy Carolinas will retire Allen Steam Station Units 1 through 3 by December 31, 2024, as part of the resolution of a lawsuit involving alleged New Source Review violations.~~COMMITMENTS AND CONTINGENCIES


~~(b)~~	~~Duke Energy Florida will likely retire these coal units by 2018 to comply with environmental regulations.~~


~~(c)~~	~~Duke Energy Indiana committed to either retire or stop burning coal at Gallagher Units 2 and 4 by December 31, 2022, as part of the settlement of Edwardsport IGCC matters.~~

~~Refer to the "Western Carolinas Modernization Plan" discussion above for details of Duke Energy Progress' planned retirements.~~

~~PART I~~

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

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

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

5.4. COMMITMENTS AND CONTINGENCIES

ENVIRONMENTAL

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

Remediation Activities

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

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

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

Duke
Energy
Progress
Energy
Energy
Energy
Energy

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

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

Duke
Energy
Progress
Energy
Energy
Energy
Energy

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


(in millions)	September 30, 2022		December 31, 2021
Reserves for Environmental Remediation
Duke Energy	$	89	$	88
Duke Energy Carolinas	23		19
Progress Energy	24		23
Duke Energy Progress	12		11
Duke Energy Florida	11		11
Duke Energy Ohio	32		34
Duke Energy Indiana	3		4
Piedmont	7		9

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

material.

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

~~North Carolina and South Carolina Ash Basins~~

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

~~PART I~~

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

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

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

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

LITIGATION

~~Duke~~Duke Energy

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

~~Ash Basin Shareholder Derivative Litigation~~

Five shareholder derivative lawsuits were filed in Delaware Chancery Court related to the release at Dan River and to the management of Duke Energy’s ash basins. On October 31, 2014, the five lawsuits were consolidated in a single proceeding titled ~~In Re~~Michael Johnson et al. v. Duke Energy Corporation ~~Coal Ash Derivative Litigation~~. et al.

On ~~December 2, 2014, plaintiffs filed~~September 23, 2020, plaintiff Michael Johnson, a ~~Corrected Verified Consolidated Shareholder Derivative Complaint (Consolidated Complaint). The Consolidated Complaint names as defendants several current and~~ former Duke Energy ~~officers~~employee and ~~directors (collectively,~~participant in the Duke Energy ~~Defendants).~~Retirement Savings Plan (Plan) brought suit on his own behalf and on behalf of other participants and beneficiaries similarly situated against Duke Energy ~~is named as a nominal defendant.~~

~~The Consolidated Complaint alleges~~Corporation, the Duke Energy ~~Defendants~~Benefits Committee, and other unnamed individual defendants. The complaint, which was subsequently amended to add a current participant as a plaintiff on November 23, 2020, alleges that the defendants breached their fiduciary duties ~~by failing~~with respect to ~~adequately oversee Duke Energy’s ash basins and that these breaches of fiduciary duty may have contributed to~~certain fees associated with the incident at Dan River and continued thereafter. The lawsuit also asserts claims against the Duke Energy Defendants for corporate waste (relating to the money Duke Energy has spent and will spend as a resultPlan in violation of the ~~fines, penalties~~Employee Retirement Income Security Act of 1974 and ~~coal ash removal) and unjust enrichment (relating to~~seeks certification of a class of all individuals who were participants or beneficiaries of the ~~compensation and director remuneration that was received despite these alleged breaches of fiduciary duty).~~Plan at any time on or after September 23, 2014. The lawsuit seeks both injunctive relief against Duke Energy and restitution from the Duke Energy Defendants. On April 22, 2016, plaintiffs filed an Amended Verified Consolidated Shareholder Derivative Complaint (Amended Complaint) making the same allegations as in the Consolidated Complaint. The Duke Energy Defendantsdefendants filed a motion to dismiss the ~~Amended Complaint~~plaintiffs’ amended complaint on ~~June 21, 2016.~~December 18, 2020. On ~~December 14, 2016,~~January 31, 2022, the ~~Delaware Chancery Court entered an order dismissing~~court denied the ~~Amended Complaint.~~defendants' motion to dismiss. On February 28, 2022, Duke Energy responded to the amended complaint. Discovery commenced and the parties exchanged preliminary disclosures. After review of these disclosures, the plaintiff agreed to voluntarily dismiss its suit and the parties subsequently filed a joint stipulation of voluntary dismissal with prejudice on April 29, 2022, ending this litigation.

Texas Storm Uri Tort Litigation

Several Duke Energy renewables project companies, located in the ERCOT market, were named in lawsuits arising out of Texas Storm Uri in mid-February 2021. Duke Energy Corporation, which had originally been named in several suits, was dismissed from the lawsuits. The lawsuits against the Duke Energy renewables project companies seek recovery for property damages, personal injury and for wrongful death allegedly caused by the power outages, which the plaintiffs claim was the result of collective failures of generators, transmission and distribution operators, retail energy providers and others, including ERCOT. The cases have been consolidated into a Texas state court multidistrict litigation (MDL) proceeding for discovery and pre-litigation purposes. Five MDL cases have been designated for motions to dismiss while all other cases are stayed. Duke Energy renewables projects are named as defendants in three of these five cases. Plaintiffs in these five cases have filed amended petitions, which are subject to renewed omnibus motions to dismiss focusing on lack of duty, tariff defenses and sovereign immunity. The motions were heard by the court on October 11 and 12, 2022. The court is expected to make a decision on all motions within two months. Thereafter, the parties expect an appeal which may have the effect of staying all or some of the litigation. Duke Energy cannot predict the outcomes of these matters.


FINANCIAL STATEMENTS			COMMITMENTS AND CONTINGENCIES

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 ~~Delaware Supreme~~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 ~~January 9, 2017. Oral argument~~behalf of four survivors, which was ~~held on September 27, 2017, and a decision is pending.~~

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

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

~~Progress Energy Merger Shareholder Litigation~~

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

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

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

~~PART I~~

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

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

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

~~Price Reporting Cases~~

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

Duke Energy Carolinas knew that the river was used for recreational purposes and that Duke Energy ~~Progress~~

~~Coal Ash Insurance Coverage Litigation~~

~~In March 2017,~~did not adequately warn about the dam, and that Duke Energy Carolinas created a dangerous and ~~Duke Energy Progress filed a civil action~~hidden hazard on the Dan River in North Carolina Superior Court against various insurance providers. The lawsuit seeks payment for coal ash-related liabilities covered by third-party liability insurance policies. The insurance policies were issued between 1971building and ~~1986 and provide third-party liability insurance for property damage. The civil action seeks damages for breach of contract and indemnification for costs arising from~~maintaining the ~~Coal Ash Act and the EPA CCR rule at 15 coal-fired plants in North Carolina and South Carolina.~~low head dam. On September 30, 2021, Duke Energy Carolinas filed its motion to dismiss and motion for transfer of venue from Durham County to Rockingham County, both of which were denied on November 15, 2021. On November 15, 2021, Duke Energy ~~Progress~~Carolinas was also served with Plaintiffs Second Amended Complaint, which added the final minor plaintiff and consolidated all the actions into one lawsuit. Duke Energy Carolinas has filed its Answer and Affirmative Defenses to the Second Amended Complaint. Discovery has commenced and is scheduled to be completed on or before April 28, 2023. The parties are preparing for mediation in December 2022. If the case is not resolved, dispositive motions are due to be filed by September 6, 2023. The case is scheduled to be trial-ready by October 2, 2023. Duke Energy Carolinas cannot predict the outcome of this matter.

~~NCDEQ State Enforcement Actions~~NTE Carolinas II, LLC Litigation

In ~~the first quarter of 2013, the Southern Environmental Law Center (SELC) sent notices of intent to sue~~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.

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. Duke Energy Carolinas is cooperating with the Office of Enforcement but cannot predict the outcome of this investigation.

On August 17, 2020, the court denied both NTE’s and Duke Energy ~~Progress related~~Carolinas’ motions to ~~alleged Clean Water Act (CWA) violations from coal ash basins at two of their coal-fired power plants~~dismiss. In October 2021, NTE filed a Second Amended Counterclaim and Complaint, and in ~~North Carolina. The NCDEQ~~January 2022, NTE filed ~~enforcement actions against~~a Third Amended Counterclaim and Complaint. Duke Energy Carolinas and Duke Energy Progress alleging violations of water discharge permits and North Carolina groundwater standards. The cases have been consolidated and are being heard before a single judge in the North Carolina Superior Court.

has responded to these pleadings. On ~~August 16, 2013, the NCDEQ filed an enforcement action against~~December 6, 2021, Duke Energy Carolinas ~~and~~filed an Amended Complaint. Following completion of discovery, Duke Energy ~~Progress related~~Carolinas filed a motion for summary judgment seeking a ruling in its favor as to ~~their remaining plants in North Carolina, alleging violations~~some of ~~the CWA~~its affirmative claims against NTE and ~~violations~~to all of the North Carolina groundwater standards. Both of these cases have been assigned to the judge handling the enforcement actions discussed above. SELC is representing several environmental groups who have been permitted to intervene in these cases.

The court issued orders in 2016 granting Motions for Partial Summary Judgment for seven of the 14 North Carolina plants named in the enforcement actions. The litigation is concluded for these seven plants. Litigation continues for the remaining seven plants.NTE’s counterclaims. On ~~February 13, 2017,~~June 24, 2022, the court issued an order ~~denying motions for partial summary judgment brought~~partially granting Duke Energy Carolinas' motion by ~~both the environmental groups and~~dismissing NTE's counterclaims that Duke Energy Carolinas engaged in anti-competitive behavior that violated various federal and state antitrust and deceptive trade practices 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. NTE has until November 14, 2022 to appeal the District Court's summary judgment ruling in Duke Energy ~~Progress. On March 15, 2017,~~Carolinas' favor on NTE's antitrust and unfair competition claims. Duke Energy Carolinas ~~and Duke Energy Progress filed a Notice~~cannot predict the outcome of Appeal to challenge the trial court’s order. The parties were unable to reach an agreement at mediation in April 2017. The parties submitted briefs to the court on remaining issues to be tried and a ruling is pending. On August 22, 2017, Duke Energy Carolinas and Duke Energy Progress filed a Petition for Discretionary Review, requesting the North Carolina Supreme Court to accept the appeal. On August 24, 2017, SELC filed a motion to dismiss the appeal. Duke Energy Carolinas' and Duke Energy Progress’ opening appellate briefs were filed on October 12, 2017.this matter.

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

~~Federal Citizens Suits~~

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

On March 16, 2017, RRBA served Duke Energy Progress with a Notice of Intent to Sue under the CWA for alleged violations of effluent standards and limitations at the Roxboro Plant. In anticipation of litigation, Duke Energy Progress filed a Complaint for Declaratory Relief in the U.S. District Court for the Western District of Virginia on May 11, 2017, which was subsequently dismissed. On May 16, 2017, RRBA filed a federal citizen suit in the U.S. District Court for the Middle District of North Carolina which asserts two claims relating to alleged violations of NPDES permit provisions and one claim relating to the use of nearby water bodies.

On June 20, 2017, RRBA filed a federal citizen suit in the U.S. District Court for the Middle District of North Carolina challenging the closure plans at the Mayo Plant under the EPA CCR Rule. Duke Energy Progress filed a motion to dismiss on August 21, 2017.

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

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

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

~~Five previously filed cases involving the Riverbend, Cape Fear, H.F. Lee, Sutton and Buck plants were dismissed or settled in 2016.~~

~~PART I~~

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

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

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

~~Groundwater Contamination Claims~~

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

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

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

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

Asbestos-related Injuries and Damages Claims

Duke Energy Carolinas has experienced numerous claims for indemnification and medical cost reimbursement related to asbestos exposure. These claims relate to damages for bodily injuries alleged to have arisen from exposure to or use of asbestos in connection with construction and maintenance activities conducted on its electric generation plants prior to 1985. As of September 30, 2017, there were 120 asserted claims for non-malignant cases with cumulative relief sought of up to $29 million, and 57 asserted claims for malignant cases with cumulative relief sought of up to $16 million. Based on

Duke Energy ~~Carolinas’ experience, it is expected that the ultimate resolution of most of these claims likely will be less than the amount claimed.~~

~~Duke Energy Carolinas~~Carolinas has recognized asbestos-related reserves of ~~$486~~$467 million at September 30, ~~2017,~~2022, and ~~$512~~$501 million at December 31, ~~2016.~~2021. These reserves are classified in Other within Other Noncurrent Liabilities and Other within Current Liabilities on the Condensed Consolidated Balance Sheets. These reserves are based upon ~~the minimum amount of the range of loss~~Duke Energy Carolinas' best estimate for current and future asbestos claims through ~~2036,~~2041 and are recorded on an undiscounted ~~basis and incorporate anticipated inflation.~~basis. In light of the uncertainties inherent in a longer-term forecast, management does not believe they can reasonably estimate the indemnity and medical costs that might be incurred after ~~2036~~2041 related to such potential claims. It is possible Duke Energy Carolinas may incur asbestos liabilities in excess of the recorded reserves.

Duke Energy Carolinas has third-party insurance to cover certain losses related to asbestos-related injuries and damages above an aggregate self-insured retention. Duke Energy Carolinas’ cumulative payments began to exceed the self-insurance retention in 2008. Future payments up to the policy limit will be reimbursed by the third-party insurance carrier. The insurance policy limit for potential future insurance recoveries indemnification and medical cost claim payments is $797 million in excess of the self-insured retention. Receivables for insurance recoveries were ~~$570~~$595 million at September 30, ~~2017,~~2022, and ~~$587~~$644 million at December 31, ~~2016.~~2021. 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 $12 million for Duke Energy and Duke Energy Carolinas as of September 30, 2022, and December 31, 2021. 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.


FINANCIAL STATEMENTS			COMMITMENTS AND CONTINGENCIES

~~PART I~~

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

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

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

Duke Energy Progress and Duke Energy Florida

~~Class Action Lawsuit~~Spent Nuclear Fuel Matters

On ~~February 22, 2016, a lawsuit was filed~~June 18, 2018, Duke Energy Progress and Duke Energy Florida sued the U.S. in the U.S. ~~District~~ Court of Federal Claims for damages incurred for the ~~Southern District~~period 2014 through 2018. The lawsuit claimed the DOE breached a contract in failing to accept spent nuclear fuel under the Nuclear Waste Policy Act of 1982 and asserted damages for the cost of on-site storage in the amount of $100 million and $200 million for Duke Energy Progress and Duke Energy Florida, respectively.

On March 30, 2022, the DOE and Duke Energy Progress executed a settlement agreement, pursuant to which Duke Energy Progress will receive damages for costs incurred between 2014 and 2018, and will be able to submit future costs on ~~behalf~~a defined schedule. In April 2022, Duke Energy Progress received $87 million in proceeds that related to damages incurred in 2014 through 2018.

On May 2, 2022, the DOE and Duke Energy Florida executed a settlement agreement, pursuant to which Duke Energy Florida will receive damages for costs incurred between 2014 and 2018, and will be able to submit costs incurred in 2019 and 2020 pursuant to an audit process. In June 2022, Duke Energy Florida received $180 million in proceeds that related to damages incurred in 2014 through 2018.

Duke Energy Indiana

Coal Ash Basin Closure Plan Appeal

On January 27, 2020, Hoosier Environmental Council (HEC) filed a Petition for Administrative Review with the Indiana Office of ~~a putative class~~Environmental Adjudication challenging the Indiana Department of Environmental Management’s (IDEM's) December 10, 2019, partial approval of Duke Energy ~~Florida~~Indiana’s ash pond closure plan at Duke Energy's Gallagher power station. After hearing oral arguments in early April 2021 on Duke Energy Indiana's and ~~FP&L’s customers~~HEC's competing Motions for Summary Judgment, on May 4, 2021, the administrative court rejected all of HEC’s claims and issued a ruling in Florida. The suit alleges the State of Florida’s nuclear power plant cost recovery statutes (NCRS) are unconstitutional and pre-empted by federal law. Plaintiffs claim they are entitled to repayment of all money paid by customersfavor of Duke Energy ~~Florida~~Indiana. On June 3, 2021, HEC filed an appeal in Superior Court to seek judicial review of the order. On June 25, 2021, Duke Energy Indiana filed its response to the Petition to Review. On August 30, 2021, HEC served Duke Energy Indiana with its Brief in Support of Petition for Judicial Review. On October 29, 2021, Duke Energy Indiana and ~~FP&L as~~IDEM filed their response briefs. On December 13, 2021, HEC filed and served its Reply Brief.

On January 11, 2022, Duke Energy Indiana received a compliance obligation letter from the Environmental Protection Agency (EPA) notifying the company that the two basins at issue in the litigation are subject to requirements of the CCR Rule. The letter does not provide a deadline for compliance. Duke Energy Indiana is evaluating the EPA letter, its potential impacts on the litigation and the extent to which this letter could apply to CCR surface impoundments at its other Indiana sites.

Following the January 11, 2022 EPA notice of compliance letter, the parties filed a joint motion to stay the litigation for 45 days, which was approved by the court. As a result, the oral argument scheduled for February 1, 2022, was postponed. Duke Energy Indiana and HEC engaged in settlement discussions, but the parties were unable to reach resolution. On April 21, 2022, HEC filed a Motion to Lift Stay and Motion for Judicial Notice. HEC also requested that the court hold a hearing within 45 days and also take judicial notice of the ~~NCRS, as well as an injunction against any future charges under those statutes. The constitutionality of the NCRS has been challenged unsuccessfully in a number of prior cases on alternative grounds.~~EPA's January 11, 2022 letter. On April 22, 2022, Duke Energy ~~Florida~~Indiana sent IDEM a letter withdrawing the closure plans for the Gallagher North Ash Pond and ~~FP&L~~Primary Pond Ash Fill. After acknowledgment by IDEM of withdrawal of these closure plans, Duke Energy Indiana filed ~~motions~~a Motion to ~~dismiss~~Dismiss the ~~complaint~~litigation as moot on ~~May 5, 2016. On September 21, 2016,~~April 28, 2022, which IDEM supported, and the ~~Court~~court granted the ~~motions~~Motion to ~~dismiss with prejudice. Plaintiffs~~Dismiss on July 8, 2022.

Coal Ash Insurance Coverage Litigation

In June 2022, Duke Energy Indiana filed a ~~motion~~civil action in Indiana Superior Court against various insurance companies seeking declaratory relief with respect to insurance coverage for ~~reconsideration, which was denied. On January 4, 2017, plaintiffs filed~~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 ~~notice of appeal to the Eleventh Circuit U.S. Court of Appeals. The appeal, which~~combination thereof). A case schedule has not yet been ~~fully briefed, was heard on August 22, 2017, and a decision is pending.~~set. Duke Energy ~~Florida~~Indiana cannot predict the outcome of this ~~appeal.~~

~~Westinghouse Contract Litigation~~

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

On March 31, 2014, Westinghouse filed a lawsuit against Duke Energy Florida in U.S. District Court for the Western District of Pennsylvania. The Pennsylvania lawsuit alleged damages under the EPC in excess of $510 million for engineering and design work, costs to end supplier contracts and an alleged termination fee.

On June 9, 2014, the judge in the North Carolina case ruled that the litigation will proceed in the Western District of North Carolina. On July 11, 2016, Duke Energy Florida and Westinghouse filed separate Motions for Summary Judgment. On September 29, 2016, the court issued its ruling on the parties' respective Motions for Summary Judgment, ruling in favor of Westinghouse on a $30 million termination fee claim and dismissing Duke Energy Florida's $54 million refund claim, but stating that Duke Energy Florida could use the refund claim to offset any damages for termination costs. Westinghouse's claim for termination costs was unaffected by this ruling and continued to trial. At trial, Westinghouse reduced its claim for termination costs from $482 million to $424 million. Following a trial on the matter, the court issued its final order in December 2016 denying Westinghouse’s claim for termination costs and re-affirming its earlier ruling in favor of Westinghouse on the $30 million termination fee and Duke Energy Florida’s refund claim. Judgment was entered against Duke Energy Florida in the amount of approximately $34 million, which includes prejudgment interest. Westinghouse has appealed the trial court's order to the U.S. Court of Appeals for the Fourth Circuit (Fourth Circuit Court) and Duke Energy Florida has cross-appealed. Duke Energy Florida cannot predict the ultimate outcome of the appeal of the trial court's order.

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

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

~~MGP Cost Recovery Action~~

On December 30, 2011, Duke Energy Florida filed a lawsuit against FirstEnergy Corp. (FirstEnergy) to recover investigation and remediation costs incurred by Duke Energy Florida in connection with the restoration of two former MGP sites in Florida. Duke Energy Florida alleged that FirstEnergy, as the successor to Associated Gas & Electric Co., owes past and future contribution and response costs of up to $43 million for the investigation and remediation of MGP sites. On December 6, 2016, the trial court entered judgment against Duke Energy Florida in the case. In January 2017, Duke Energy Florida appealed the decision to the U.S. Court of Appeals for the 6th Circuit and briefing has been completed. Duke Energy Florida cannot predict the outcome of this appeal.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.

~~PART I~~

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

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

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

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

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

OTHER COMMITMENTS AND CONTINGENCIES

General

As part of their normal business, the Duke Energy Registrants are party to various financial guarantees, performance guarantees and other contractual commitments to extend guarantees of credit and other assistance to various subsidiaries, investees and other third parties. These guarantees involve elements of performance and credit risk, which are not fully recognized on the Condensed Consolidated Balance Sheets and have ~~unlimited~~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 ~~normal purchase/normal sale (NPNS)~~NPNS exception does not apply. In most cases, the Duke Energy Registrants’ purchase obligation contracts contain provisions for price adjustments, minimum purchase levels and other financial commitments.


FINANCIAL STATEMENTS			DEBT AND CREDIT FACILITIES

5. DEBT AND CREDIT FACILITIES

SUMMARY OF SIGNIFICANT DEBT ISSUANCES

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


				Nine Months Ended September 30, 2022
						Duke		Duke		Duke
	Maturity	Interest		Duke		Energy		Energy		Energy
Issuance Date	Date	Rate		Energy		(Parent)		Carolinas		Progress		Piedmont
Unsecured Debt
May 2022(a)	May 2052	5.050	%	$	400	$	—	$	—	$	—	$	400
June 2022(b)	June 2028	4.750	%	645		645		—		—		—
June 2022(b)	June 2034	5.306	%	537		537		—		—		—
August 2022(c)	March 2028	4.300	%	900		900		—		—		—
August 2022(c)	August 2032	4.500	%	1,150		1,150		—		—		—
August 2022(c)	August 2052	5.000	%	1,150		1,150		—		—		—

First Mortgage Bonds
March 2022(d)	March 2032	2.850	%	500		—		500		—		—
March 2022(d)	March 2052	3.550	%	650		—		650		—		—
March 2022(d)	April 2032	3.400	%	500		—		—		500		—
March 2022(d)	April 2052	4.000	%	400		—		—		400		—
Tax-exempt Bonds
June 2022(e)	September 2030	4.000	%	168		168		—		—		—
June 2022(e)	November 2039	4.250	%	234		234		—		—		—
September 2022(f)	October 2046	3.300	%	200		—		—		200		—
September 2022(g)	October 2046	3.700	%	210		—		—		210		—
September 2022(g)	October 2046	4.000	%	42		—		—		42		—

Total issuances				$	7,686	$	4,784	$	1,150	$	1,352	$	400

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

(b)Duke Energy (Parent) issued 600 million euros aggregate principal amount of 3.10% senior notes due June 2028 and 500 million euros aggregate principal amount of 3.85% senior notes due June 2034. Proceeds were used to repay a $500 million debt maturity, pay down short-term debt and for general corporate purposes. Duke Energy's obligations under its euro-denominated fixed-rate notes were effectively converted to fixed-rate U.S. dollars at issuance through cross-currency swaps, mitigating foreign currency exchange risk associated with the ~~"Available Credit Facilities" section below regarding amounts issued~~interest and principal payments. See Note 9 for additional information.

(c)Proceeds will be used to repay a portion of short-term debt and for general corporate purposes.

(d)Proceeds were used to finance or refinance, in whole or in part, existing or new eligible projects under the ~~Three Year Revolver~~sustainable financing framework.

(e)Proceeds were used to provide funds to refund the prior bonds, which were used to finance or refinance portions of certain solid waste disposal facilities. The mandatory purchase date of these bonds is June 1, 2027.

(f)Proceeds were used to provide funds to refund the prior bonds, which were used to finance or refinance portions of certain air and water pollution control equipment and solid waste disposal equipment. The mandatory purchase date of these bonds is October 1, 2026.

(g)Proceeds were used to provide funds to refund the ~~Piedmont Term Loan facilities.~~

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

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

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

$ 800
$ 900

$ 100
prior bonds, which were used to finance or refinance portions of certain air and water pollution control equipment and solid waste disposal equipment. The mandatory purchase date of these bonds is October 1, 2030.

~~PART I~~

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

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

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


~~(a)~~FINANCIAL STATEMENTS			~~Proceeds were used to refinance $400 million of unsecured debt at maturity and to repay a portion of outstanding commercial paper.~~DEBT AND CREDIT FACILITIES


~~(b)~~	~~Debt issued to repay a portion of outstanding commercial paper.~~


~~(c)~~	~~Debt issued to repay at maturity $700 million of unsecured debt, to repay outstanding commercial paper and for general corporate purposes.~~


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


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


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


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


~~(h)~~	Debt issued to repay at maturity a $200 million aggregate principal amount of bonds due November 2017, pay down intercompany short-term debt and for general corporate purposes, including capital expenditures.

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

CURRENT MATURITIES OF LONG-TERM DEBT

The following table shows the significant components of Current ~~Maturities~~maturities of ~~Long-Term Debt~~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)							(in millions)	Maturity Date		Interest Rate			September 30, 2022
Unsecured Debt(a)							Unsecured Debt(a)
Duke Energy (Parent)							Duke Energy (Parent)	April 2023		2.875	%		$	350
Duke Energy (Parent)(b)							June 2023		2.048	%		500

(in millions)	Maturity Date	Interest Rate			September 30, 2017
Unsecured Debt
Duke Energy (Parent)(b)	June 2018	6.250	%		$	250
Duke Energy (Parent)	June 2018	2.100	%		500
First Mortgage Bonds							First Mortgage Bonds
Duke Energy Progress	November 2017	1.516	%	^(b)	200
Duke Energy Carolinas	January 2018	5.250	%		400		Duke Energy Carolinas	March 2023		2.500	%		500
Duke Energy Carolinas	April 2018	5.100	%		300		Duke Energy Carolinas	March 2023		3.050	%		500
Duke Energy Florida	June 2018	5.650	%		500
Other^(a)					335
Duke Energy Progress							Duke Energy Progress	September 2023		3.375	%		300
Duke Energy Ohio							Duke Energy Ohio	September 2023		3.800	%		300
Other(c)							Other(c)						799
Current maturities of long-term debt					$	2,485	Current maturities of long-term debt						$	3,249

(a)In May 2022, Duke Energy (Parent) early retired $500 million of unsecured debt with an original maturity date of August 2022.

(b)Debt has a floating interest rate.

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

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

~~PART I~~

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

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

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

AVAILABLE CREDIT FACILITIES

Master Credit Facility

In March ~~2017,~~2022, Duke Energy amended its existing Master Credit Facility to increase ~~its capacity~~the amount of the facility from ~~$7.5~~$8 billion to $8$9 billion and to extend the termination date ~~of the facility from January 30, 2020,~~ to March ~~16, 2022.~~2027. The ~~amendment also added Piedmont as a borrower within the Master Credit Facility. Piedmont's separate $850 million credit facility was terminated in connection with the amendment. With the amendment, the~~ Duke Energy Registrants, excluding Progress Energy, ~~(Parent),~~ 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. Duke Energy Carolinas and Duke Energy Progress are also required to each maintain $250 million of available capacity under the Master Credit Facility as security to meet obligations under plea agreements reached with the U.S. Department of Justice in 2015 related to violations at North Carolina facilities with ash basins.

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


	September 30, 2022
			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	$	3,000	$	1,225	$	950	$	1,350	$	775	$	900	$	800
Reduction to backstop issuances
Commercial paper(b)	(3,339)		(135)		(827)		(150)		(887)		(476)		(586)		(278)
Outstanding letters of credit	(38)		(25)		(4)		(2)		(7)		—		—		—
Tax-exempt bonds	(81)		—		—		—		—		—		(81)		—

Available capacity under the Master Credit Facility	$	5,542	$	2,840	$	394	$	798	$	456	$	299	$	233	$	522

(a)Represents the ~~Master~~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 ~~Facility.~~Facilities

September 30, 2017

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)
$ 8,000
$ 2,850
$ 1,350
$ 1,250
$ 1,000
$ 450
$ 600
$ 500
Reduction to backstop issuances
Commercial paper^(b)
(1,569 ) (404 ) (636 ) (150 ) —
(25 ) (150 ) (204 )
Outstanding letters of credit (60 ) (51 ) (4 ) (2 ) (1 ) —
—
(2 )
Tax-exempt bonds (81 ) —
—
—
—
—
(81 ) —
Coal ash set-aside (500 ) —
(250 ) (250 ) —
—
—
—
Available capacity under the Master Credit Facility $ 5,790

$ 2,395

$ 460

$ 848

$ 999

$ 425

$ 369
$ 294

~~PART I~~


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 ~~Corporation (collectively with its subsidiaries, Duke Energy)~~ and Duke Energy Carolinas, ~~LLC (Duke Energy Carolinas),~~ Progress Energy, ~~Inc. (Progress Energy),~~ Duke Energy Progress, ~~LLC (Duke Energy Progress),~~ Duke Energy Florida, ~~LLC (Duke Energy Florida),~~ Duke Energy Ohio, ~~Inc. (Duke Energy Ohio),~~ Duke Energy Indiana ~~LLC (Duke Energy Indiana)~~ and ~~Piedmont Natural Gas Company, Inc. (Piedmont) (collectively referred to as the Subsidiary Registrants).~~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 ~~United States (U.S.)~~U.S. primarily through its ~~wholly owned~~ 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. Piedmont's results of operations are included in Duke Energy's results for the three and nine months ended September 30, 2017, but not for the three and nine months ended September 30, 2016, as Piedmont's earnings are only included in Duke Energy's consolidated results subsequent to the acquisition date. See below for additional information regarding the acquisition.

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, ~~2017,~~2022, and with Duke Energy’s Annual Report on Form 10-K for the year ended December 31, 2016, Piedmont's Annual Report on Form 10-K for the year ended October 31, 2016, and the transition report filed by Piedmont on Form 10-Q (Form 10-QT) as of December 31, 2016, for the transition period from November 1, 2016, to December 31, 2016.2021.

Executive Overview

~~Hurricane Irma~~Advancing Our Clean Energy Transformation

In September 2017, Hurricane Irma caused widespread damage across the Southeast region, at its peak leaving approximately 1.3 million Duke Energy Florida customers without power. Duke Energy's restoration efforts in response to this devastating storm utilized a team of over 12,000 line and service crews and hundreds of employee volunteers. Storm restoration costs (including capital) for the Duke Energy Florida service territory are currently estimated at approximately $500 million. The vast majority of these costs have been deferred to the balance sheet for future recovery from customers in Florida, per existing state statute. Lost revenues associated with Hurricane Irma were approximately $20 million inDuring the third quarter of ~~2017.~~2022, we continued to execute on our clean energy transformation, delivering strong, sustainable value for shareholders, customers, communities and employees.

•In October 2022, we announced an additional interim target to reduce carbon emissions from electric generation by 80% by 2040. We also adopted a goal of reducing Scope 2 and certain Scope 3 emissions, including emissions from upstream purchased power and fossil fuel purchases, as well as downstream customer use of natural gas, by 50% by 2035. Duke Energy is one of the first utilities to address the totality of its impact – 95% of the company's greenhouse gas emissions are now tied to a measurable net-zero goal. Over the next decade, we expect to deploy approximately $145 billion of capital into our regulated businesses, driven by clean energy transition investments.

•In August 2022, we announced a strategic review of our commercial renewables business, which has been an integral part of Duke Energy's renewable energy platform over the past 15 years. Since 2007, we have built a portfolio of approximately 5,000 megawatts of commercial wind, solar and battery projects across the U.S., and established a robust development pipeline. As we look forward to the remainder of this decade and beyond, we have line of sight to significant renewable, grid and other investment opportunities within our faster-growing regulated operations. In November 2022, the Board of Directors committed to a plan to sell the Commercial Renewables business segment, excluding the Offshore Wind lease for Carolina Long Bay. See Note 1 to the Condensed Consolidated Financial Statements, "Organization and Basis of Presentation," for additional information.

•In August 2022, Duke Energy launched the utility industry’s first sustainable commercial paper notes focused on socioeconomic advancement. The company plans to disburse or allocate an amount equal to the net proceeds from the sustainable commercial paper notes to fund expenditures and programs related to enabling opportunities for diverse businesses.

•In August 2022, Duke Energy Carolinas filed for approval of a new demand response pilot program expected to launch in 2023 for customers in the Duke Energy Carolinas (DEC) service area. Pilot incentives will reduce vehicle lease payments for program participants who lease an eligible electric vehicle, including Ford F-150 Lightning trucks. In exchange, customers will allow their electric vehicles to feed energy back to the grid – helping to balance it during peak demand. Also in August 2022, Duke Energy Florida announced a research and development pilot program to test and evaluate the viability of the new Ford F-150 Lightning all-electric truck's high-capacity batteries as a grid edge resource.

Regulatory Activity. During the third quarter of 2022, we continued to monitor developments while moving our regulatory strategy forward. See Note 3 to the Condensed Consolidated Financial Statements, "Regulatory Matters," for additional information.

•In October 2022, Duke Energy Florida received approval from the FPSC for its proposed ten year storm protection plan, with minor modifications. This plan will continue to provide for investments to enhance the integrity and reliability of the state's electric grid. Also in October 2022, as a result of rising interest rates and as allowed under the 2021 Settlement, the FPSC approved an increase in Duke Energy Florida's ROE band, increasing the ROE midpoint effective in January 1, 2023 base rates from 9.85% to 10.1%.

•In October 2022, Duke Energy Progress filed a rate case in North Carolina to request an increase in base rate retail revenues. This proposal is the first by Duke Energy Progress in North Carolina to increase base rates since 2019 and is our first rate case filing in North Carolina to include a Performance Based Regulation Application and a Multiyear Rate Plan as allowed under HB 951. Duke Energy Progress’ rate request before the NCUC proposes a gradual rate increase over three years as the company continues to strengthen the electricity grid, reducing power outages for customers and facilitating the clean energy transition in a manner that supports economic development across the state.

•In September 2022, Duke Energy Progress filed a rate case in South Carolina to request an increase in base rate retail revenues. This proposal is the first by Duke Energy Progress in South Carolina to increase base rates since 2018 and is driven by ongoing investments to improve resiliency, work toward an orderly transition to a secure energy future and improve the customer experience. Duke Energy Progress’ rate request before the PSCSC proposes a step in of the proposed rate increase over two years.

•In September 2022, Duke Energy Ohio reached an electric distribution base rate settlement with the PUCO's technical staff and other parties, subject to review and approval of the PUCO.


MD&A			MATTERS IMPACTING FUTURE RESULTS

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 continue to be deferred and recovered in future rate cases or rider filings. The majority of spend is expected to occur over the next 15-20 years.

Duke Energy Indiana has interpreted the 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 interpretation of the CCR rule. See Note 4 to the Condensed Consolidated Financial Statements, ~~"Regulatory Matters"~~"Commitments and Contingencies" for ~~additional~~more information.

~~Regulatory Activity~~Commercial Renewables

On November 1, 2022, the Board of Directors committed to a plan to sell the Commercial Renewables business segment, excluding the offshore wind lease for Carolina Long Bay. Duke Energy is actively marketing the business as two separate disposal units, the utility scale solar and wind unit and the distributed generation unit. Non-binding offers were received for the utility scale solar and wind unit in late October 2022. We are evaluating the initial offers and expect to receive final offers from select bidders in early 2023. Non-binding offers for the distributed generation unit are also expected in early 2023. Duke Energy expects to dispose of both units in mid-2023. In the ~~third~~fourth quarter of ~~2017,~~2022, Duke Energy ~~advanced regulatory activity underway~~will reclassify the Commercial Renewables business segment to assets held for sale and report it as a discontinued operation. Duke Energy could record a material impairment loss in the fourth quarter of 2022 if the carrying value of one or both of the units is not expected to be recovered. If the proceeds exceed the carrying value of one or both of the units, a gain would be recognized at the closing of the transaction in mid-2023. Proceeds from a successful sale are expected to be used for debt reduction and avoidance.

In August 2017, Duke Energy Carolinas filed a base rate case with the North Carolina Utilities Commission. The rate request was driven by capital investments in new, highly efficient natural gas combined-cycle plants and other plant upgrades, coal ash basin closure activities and grid improvement projects. Hearings are scheduled to commence in February 2018.

In Florida, Duke Energy worked closely with stakeholders to build upon and extend the existing settlement agreement from 2013. In late August, Duke Energy Florida reached a favorable agreement with numerous parties in the state, including the consumer advocate, and that agreement was approved by the Florida Public Service Commission (FPSC) in late October. As outlined in the settlement, Duke Energy Florida agreed to no longer recover any remaining costs associated with the canceled Levy Nuclear Project and as a result incurred a pretax impairment chargelawsuits arising out of ~~$135 million during the third quarter.~~

~~See~~this winter storm. For more information, see Note 4 to the Condensed Consolidated Financial Statements, ~~"Regulatory Matters" for additional information.~~"Commitments and Contingencies."

~~2016 Acquisition of Piedmont Natural Gas~~

On October 3, 2016, Duke Energy completed the acquisition of Piedmont for a total cash purchase price of $5.0 billion and assumed Piedmont's existing long-term debt, which had a fair value of approximately $2.0 billion at the time of the acquisition. The acquisition provides a foundation for Duke Energy to establish a broader, long-term strategic natural gas infrastructure growth platform to complement the existing natural gas pipeline investments and regulated natural gas business in the Midwest.Supply Chain

Duke Energy ~~incurred pretax nonrecurring transaction~~is monitoring supply chain disruptions, which could impact the timing of in-service dates and ~~integration costs associated with~~may result in adverse impacts on operating results. The company is also monitoring the ~~acquisition of $23 million~~potential impacts on future financial results and $69 million for the three and nine months ended September 30, 2017, respectively, and $65 million and $256 million for the three and nine months ended September 30, 2016, respectively. Acquisition-related costs in the prior year were principallyclean energy goals due to ~~losses on forward-starting interest rate swaps related to~~supply chain challenges regarding the ~~acquisition financing~~availability of ~~$22 million~~transformers and ~~$190 million for the three~~renewable components like solar panels and ~~nine months ended September 30, 2016, respectively. For additional information on the swaps see Note 10 to the Condensed Consolidated Financial Statements, "Derivatives and Hedging."~~batteries.

Other

Duke Energy ~~expects~~is monitoring general market conditions, including rising interest rates, and evaluating the impact to ~~incur system integration~~its results of operations, financial position and ~~other acquisition-related transition costs, primarily through 2018, that are necessary to achieve certain anticipated cost savings, efficiencies and other benefits. See Note 2 to~~cash flows in the ~~Condensed Consolidated Financial Statements, "Acquisitions and Dispositions," for additional information regarding the transaction.~~

~~PART I~~

~~2016 Sale of International Energy~~

~~In December 2016,~~future. Duke Energy ~~sold its Latin American generation businesses (International Disposal Group)~~is developing mitigation plans to partially offset the impacts of these general market conditions. These mitigation plans could result in ~~two separate transactions for~~charges related to a ~~combined enterprise value of $2.4 billion. The transactions generated cash proceeds of $1.9 billion, excluding transaction costs, which were~~reduction in workforce, primarily ~~used~~in corporate and operational support roles as work is reassessed, real estate modifications to reduce Duke Energy holding company debt. Due to the transactions, results of the International Disposal Group are classified as discontinued operations. See Note 2 to the Condensed Consolidated Financial Statements, "Acquisitionsleased office space or asset impairments on property, plant and ~~Dispositions" for additional information.~~equipment.

Results of Operations

Non-GAAP Measures

Management’s Discussion and Analysis includes financial information prepared in accordance with ~~generally accepted accounting principles (GAAP)~~GAAP in the U.S., as well as certain non-GAAP financial ~~measures.~~measures such as adjusted earnings and adjusted EPS discussed below. Generally, a non-GAAP financial measure is a numerical measure 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 ~~diluted earnings per share (EPS).~~EPS. Adjusted earnings and adjusted ~~diluted~~ EPS represent income from continuing operations ~~attributable~~available to Duke Energy Corporation common stockholders in dollar and per share amounts, adjusted for the dollar and ~~per-share~~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.

Management believes the presentation of adjusted earnings and adjusted diluted EPS provides useful information to investors, as it provides them with an additional relevant comparison of Duke Energy’s performance across periods. Management uses these non-GAAP financial measures for planning and forecasting and for reporting financial results to the Duke Energy Board of Directors, employees, stockholders, analysts and investors. Adjusted diluted EPS is also used as a basis for employee incentive bonuses. The most directly comparable GAAP measures for adjusted earnings and adjusted ~~diluted~~ EPS are ~~Net Income Attributable to Duke Energy Corporation (GAAP~~GAAP Reported ~~Earnings)~~Earnings (Loss) and ~~Diluted EPS Attributable to Duke Energy Corporation common stockholders (GAAP~~GAAP Reported ~~EPS),~~Earnings (Loss) Per Share, respectively.

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

~~Costs to Achieve Mergers represent charges that result from strategic acquisitions.~~

~~Cost Savings Initiatives represent severance~~ •Regulatory Matters represents the net impact of charges related to ~~companywide initiatives, excluding merger integration,~~the 2022 Indiana Supreme Court ruling on coal ash.

•Mark-to-Market represents the income statement impact of derivative instruments that do not qualify for hedge accounting or regulatory accounting.


MD&A			DUKE ENERGY

•Workplace and Workforce Realignment represents costs attributable to ~~standardize processes and systems, leverage technology~~business transformation, including long-term real estate strategy changes and workforce ~~optimization.~~realignment.

~~Commercial Renewables Impairments represents other-than-temporary and asset impairments.~~

~~Florida Settlement~~•Regulatory Settlements represents an impairment charge related to the ~~Levy nuclear project based~~South Carolina Supreme Court decision on ~~a settlement agreement approved by regulators.~~coal ash, insurance proceeds and the Duke Energy Carolinas and Duke Energy Progress coal ash settlement.

Adjusted earnings also include operating results of the International Disposal Group, which have been classified as discontinued operations. Management believes inclusion of the operating results of the Disposal Group within adjusted earnings and adjusted diluted EPS results in a better reflection of Duke Energy's financial performance during the period.•Gas Pipeline Investments represents additional exit obligations related to ACP.

Three Months Ended September 30, ~~2017,~~2022, as compared to September 30, ~~2016~~2021

GAAP ~~Reported~~reported EPS was ~~$1.36~~$1.81 for the third quarter of ~~2017~~2022 compared to ~~$1.70 for~~$1.79 in the third quarter of ~~2016. The decrease in~~2021. GAAP ~~Reported~~reported EPS ~~was~~increased primarily due to ~~less favorable weather, an impairment at Duke Energy Florida and~~regulatory settlements in the prior year ~~income from discontinued~~and higher volumes and lower operations ~~including International Energy which was sold~~and maintenance expense in ~~2016;~~the current year, partially offset by a lower ~~effective tax rate,~~Commercial Renewables earnings, higher depreciation and interest expense and lower ~~costs associated with the Piedmont acquisition and growth from~~returns on investments..

As discussed above, management also evaluates financial performance based on adjusted ~~diluted~~ EPS. Duke Energy’s third quarter ~~2017~~2022 adjusted ~~diluted~~ EPS was ~~$1.59~~$1.78 compared to ~~$1.68~~$1.88 for the third quarter of ~~2016.~~ 2021. The decrease in adjusted EPS was primarily due to lower Commercial Renewables earnings, higher depreciation and interest expense and lower returns on investments, partially offset by higher volumes and lower operation and maintenance expense.

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

Three Months Ended September 30,
2017 2016
(in millions, except per-share amounts) Earnings EPS Earnings EPS
GAAP Reported Earnings/GAAP Reported EPS $ 954
$ 1.36
$ 1,176
$ 1.70
Adjustments:
Costs to Achieve Mergers^(a)
14
0.03
52
0.07
Cost Savings Initiatives^(b)
—
—
12
0.02
Commercial Renewables Impairments ^(c)
56
0.08
45
0.07
Florida Settlement^(d)
84
0.12
—
—
Discontinued Operations^(e)
2
—
(122 ) (0.18 )
Adjusted Earnings/Adjusted Diluted EPS $ 1,110
$ 1.59
$ 1,163
$ 1.68


	Three Months Ended September 30,
	2022				2021
(in millions, except per share amounts)	Earnings		EPS		Earnings		EPS

GAAP Reported Earnings/GAAP Reported EPS	$	1,383	$	1.81	$	1,366	$	1.79
Adjustments:

Mark-to-Market(a)	(4)		—		—		—
Workplace and Workforce Realignment(b)	—		—		7		—
Regulatory Settlements(c)	—		—		64		0.09
Gas Pipeline Investments(d)	—		—		(2)		—
Discontinued Operations(e)	(23)		(0.03)		—		—
Adjusted Earnings/Adjusted EPS	$	1,356	$	1.78	$	1,435	$	1.88

(a)Net of tax expense of $2 million.

~~PART I~~

(b)Net of tax benefit of $2 million.

(c)Net of tax benefit of $19 million.


~~(a)~~	~~Net of $9 million tax benefit in 2017 and $32 million tax benefit in 2016.~~


~~(b)~~	~~Net of $7 million tax benefit in 2016.~~


~~(c)~~	~~Net of $28 million tax benefit in 2017 and $26 million tax benefit in 2016.~~


~~(d)~~	~~Net of $51 million tax benefit in 2017.~~


~~(e)~~	~~The 2016 amount represents tax adjustments~~ (d)Net of tax expense of $1 million. (e)Represents the net impact of the expiration of statutes related to ~~previously sold businesses not related to the International Disposal Group.~~

~~The decrease in adjusted earnings for the three months ended September 30, 2017, compared to the same period in 2016 was primarily due to:~~

~~Lower regulated electric revenues due to less favorable weather in the current year, including lost revenues related to Hurricane Irma;~~

~~The prior year operating results of~~ the International Disposal ~~Group, which was sold in December 2016; and~~Group.

~~Higher financing costs, primarily due to the Piedmont acquisition.~~

~~Partially offset by:~~

Higher regulated electric revenues from increased pricing and riders driven by new rates in Duke Energy Progress South Carolina, base rate adjustments in Florida, and energy efficiency rider revenues in North Carolina;

~~Additional earnings from incremental investments in the Atlantic Coast Pipeline (ACP) natural gas pipeline; and~~

~~Lower income taxes due to prior year unfavorable tax adjustments and benefits in the current year from legal entity restructuring.~~

Nine Months Ended September 30, ~~2017,~~2022, as compared to September 30, ~~2016~~2021

~~Duke Energy's~~ GAAP Reported EPS was ~~$3.36~~$4.03 for the nine months ended September 30, ~~2017,~~2022, compared to ~~$3.44~~$4.00 for the nine months ended September 30, ~~2016. The decrease in~~2021. In addition to the drivers below, GAAP ~~Reported~~reported EPS ~~was driven by less~~increased due to higher volumes, favorable weather ~~compared to~~and workplace and workforce realignment costs in the prior year, ~~an impairment at Duke Energy Florida and prior year income from discontinued operations including International Energy which was sold in 2016;~~ partially offset by the net impact of charges related to the 2022 Indiana Supreme Court ruling on coal ash, higher operations and maintenance expense, including storm costs, the impact of GIC minority interest sale and lower ~~costs associated with the Piedmont acquisition, lower severance charges, effective cost control and growth from~~returns on investments.

As discussed above, management also evaluates financial performance based on adjusted ~~diluted~~ EPS. Duke Energy’s adjusted ~~diluted~~ EPS was $4.22 for the nine months ended September 30, ~~2017, was $3.63~~2022, compared to ~~$3.88~~$4.30 for the nine months ended September 30, ~~2016.~~ 2021. The decrease in adjusted EPS was primarily due to lower Commercial Renewables earnings and higher operations and maintenance expense, including storm costs,, the impact of the GIC minority interest sale and lower returns on investments, partially offset by higher volumes and favorable weather in the current year.


MD&A			DUKE ENERGY

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

Nine Months Ended September 30,
2017 2016
(in millions, except per-share amounts) Earnings EPS Earnings EPS
GAAP Reported Earnings/GAAP Reported EPS $ 2,356
$ 3.36
$ 2,379
$ 3.44
Adjustments:
Costs to Achieve Mergers^(a)
43
0.06
195
0.28
Cost Savings Initiatives^(b)
—
—
39
0.06
Commercial Renewables Impairments ^(c)
56
0.08
45
0.07
Florida Settlement^(d)
84
0.12
—
—
Discontinued Operations^(e)
4
0.01
21
0.03
Adjusted Earnings/Adjusted Diluted EPS $ 2,543
$ 3.63
$ 2,679
$ 3.88


	Nine Months Ended September 30,
	2022				2021
(in millions, except per share amounts)	Earnings		EPS		Earnings		EPS
GAAP Reported Earnings/GAAP Reported EPS	$	3,094	$	4.03	$	3,070	$	4.00
Adjustments:
Regulatory Matters(a)	157		0.20		—		—
Mark-to-Market(b)	12		0.02		—		—
Workplace and Workforce Realignment(c)	—		—		142		0.19
Regulatory Settlements(d)	—		—		64		0.09
Gas Pipeline Investments(e)	—		—		15		0.02
Discontinued Operations(f)	(23)		(0.03)		—		—
Adjusted Earnings/Adjusted EPS	$	3,240	$	4.22	$	3,291	$	4.30


~~(a)~~	~~Net of $26 million tax benefit in 2017 and $120 million tax benefit in 2016.~~


~~(b)~~	~~Net of $24 million tax benefit in 2016.~~


~~(c)~~	~~Net of $28 million tax benefit in 2017 and $26 million tax benefit in 2016.~~


~~(d)~~	~~Net of $51 million tax benefit in 2017.~~

~~(e)~~

~~The 2016 amount includes an impairment charge~~

(a)Net of tax benefit of $80 million and $20 million in noncontrolling interests.

(b)Net of tax benefit of $3 million.

(c)Net of tax benefit of $42 million.

(d)Net of tax benefit of $19 million.

(e)Net of tax benefit of $4 million.

(f)Represents the net impact of the expiration of statutes related to ~~certain assets in Central America that were sold in 2016, partially offset by a tax benefit related to previously sold businesses not related to the International Disposal Group.~~

~~The decrease in adjusted earnings for the nine months ended September 30, 2017, compared to the same period in 2016 was primarily due to:~~

~~Lower regulated electric revenues due to unfavorable weather compared to the prior year; and~~

~~The prior year operating results of~~ the International Disposal Group, which was sold in December 2016. The 2016 operating results included a benefit from the revaluation of deferred income taxes. See Note 17 to the Condensed Consolidated Financial Statements, "Income Taxes," for additional information.Group.

~~Partially offset by:~~

Higher regulated electric revenues from increased pricing and riders driven by new rates in Duke Energy Progress South Carolina, base rate adjustments in Florida and energy efficiency rider revenues in North Carolina, as well as growth in weather-normal retail volumes;

Lower operations, maintenance and other expense, net of amounts recoverable in rates, at Electric Utilities and Infrastructure resulting from ongoing cost efficiency efforts and lower year-to-date storm costs than the prior year;

~~Higher allowance for funds used during construction (AFUDC) equity due to capital investments at the electric utilities; and~~

~~Additional earnings from incremental investments in the ACP and Sabal Trail natural gas pipelines.~~

~~PART I~~

~~SEGMENT RESULTS~~Matters Impacting Future Results

~~Management evaluates segment performance based on segment income. Segment income is defined as income from continuing operations net~~The matters discussed herein could materially impact the future operating results, financial condition and cash flows of ~~income attributable to noncontrolling interests. Segment income includes intercompany revenues and expenses that are eliminated on the Condensed Consolidated Financial Statements.~~

Due to the Piedmont acquisition and the sale of International Energy in the fourth quarter of 2016, Duke Energy's segment structure was realigned to include the following segments: Electric Utilities and Infrastructure, Gas Utilities and Infrastructure and Commercial Renewables. The remainder of Duke Energy’s operations is presented as Other. Prior period information has been recast to conform to the current segment structure. See Note 2 to the Condensed Consolidated Financial Statements, "Acquisitions and Dispositions," for further information on the Piedmont acquisition and International Energy sale and Note 3, “Business Segments,” for additional information on Duke Energy’s segments.

~~Electric Utilities and Infrastructure~~

Three Months Ended September 30, Nine Months Ended September 30,
(in millions) 2017
2016
Variance
2017
2016
Variance
Operating Revenues $ 6,129
$ 6,340
$ (211 ) $ 16,234
$ 16,430
$ (196 )
Operating Expenses
Fuel used in electric generation and purchased power 1,872
2,016
(144 ) 4,875
5,102
(227 )
Operation, maintenance and other 1,297
1,291
6
3,833
3,819
14
Depreciation and amortization 777
729
48
2,228
2,139
89
Property and other taxes 277
274
3
808
799
9
Impairment charges 132
9
123
134
12
122
Total operating expenses 4,355
4,319
36
11,878
11,871
7
Gains on Sales of Other Assets and Other, net —
1
(1 ) 4
3
1
Operating Income 1,774
2,022
(248 ) 4,360
4,562
(202 )
Other Income and Expenses 67
75
(8 ) 222
215
7
Interest Expense 305
287
18
925
829
96
Income Before Income Taxes 1,536
1,810
(274 ) 3,657
3,948
(291 )
Income Tax Expense 516
621
(105 ) 1,273
1,391
(118 )
Segment Income $ 1,020
$ 1,189
$ (169 ) $ 2,384
$ 2,557
$ (173 )

Duke Energy Carolinas gigawatt-hours (GWh) sales 24,135
25,508
(1,373 ) 66,159
67,890
(1,731 )
Duke Energy Progress GWh sales 18,827
20,033
(1,206 ) 50,026
54,011
(3,985 )
Duke Energy Florida GWh sales 12,132
12,440
(308 ) 31,177
31,542
(365 )
Duke Energy Ohio GWh sales 6,672
7,214
(542 ) 18,632
19,117
(485 )
Duke Energy Indiana GWh sales 8,795
9,073
(278 ) 24,975
26,624
(1,649 )
Total Electric Utilities and Infrastructure GWh sales 70,561
74,268
(3,707 ) 190,969
199,184
(8,215 )
Net proportional megawatt (MW) capacity in operation

48,909
49,411
(502 )

~~Three Months Ended September 30, 2017, as Compared to September 30, 2016~~

Electric Utilities and Infrastructure’s results were impacted by less favorable weather and an impairment at Duke Energy Florida, partially offset by growth from investments. The following is a detailed discussion of the variance drivers by line item.

~~Operating Revenues.~~ ~~The variance was driven primarily by:~~

~~a $163 million decrease in fuel revenues due to lower retail sales volumes; and~~

~~a $160 million decrease in retail sales, net of fuel revenues, due to less favorable weather in the current year, including lost revenues related to Hurricane Irma.~~

~~Partially offset by:~~

~~a $90 million increase in retail pricing due to Duke Energy Florida's base rate adjustments for the Osprey acquisition and Hines Chillers and~~ the Duke Energy ~~Progress South Carolina rate case, as well as increased rider revenues related to energy efficiency programs, Duke Energy Florida's nuclear asset securitization,~~Registrants and ~~Midwest capital investments.~~Business Segments.

~~Operating Expenses.~~ ~~The variance was driven primarily by:~~Regulatory Matters

~~a $123 million increase in impairment charges primarily due to write-off~~Coal Ash Costs

Future spending of ~~remaining unrecovered Levy Nuclear Project~~coal ash costs, ~~at Duke Energy Florida in the current year; and~~

~~a $48 million increase in~~including amounts recorded for depreciation and ~~amortization expense primarily due~~liability accretion, is expected to ~~additional plant~~continue to be deferred and recovered in ~~service.~~

~~PART I~~

~~Partially offset by:~~

~~a $144 million decrease in fuel expense, including purchased power, driven by lower retail sales.~~

~~Interest Expense.~~ future rate cases or rider filings. The ~~increase was primarily due~~majority of spend is expected to ~~higher debt outstanding in~~occur over the ~~current year to fund growth.~~

~~Income Tax Expense.~~ The variance was primarily due to a decrease in pretax income and higher research credits, partially offset by the North Carolina corporate tax rate reduction in the prior year. The effective tax rates for the three months ended September 30, 2017, and 2016 were 33.6 percent and 34.3 percent, respectively.

~~Nine Months Ended September 30, 2017, as Compared to September 30, 2016~~

Electric Utilities and Infrastructure’s results were impacted by less favorable weather compared to the prior year and an impairment at Duke Energy Florida, partially offset by growth from investments and higher weather-normal retail sales volumes. The following is a detailed discussion of the variance drivers by line item.

~~Operating Revenues.~~ ~~The variance was driven primarily by:~~

~~a $380 million decrease in retail sales, net of fuel revenues, due to unfavorable weather compared to the prior year, including lost revenues related to Hurricane Irma; and~~

~~a $256 million decrease in fuel revenues primarily due to lower retail sales volumes.~~

~~Partially offset by:~~

a $346 million increase in rider revenues related to energy efficiency programs, Duke Energy Florida's nuclear asset securitization, Midwest transmission and distribution capital investments, and Duke Energy Indiana's Edwardsport Integrated Gasification Combined Cycle (IGCC) plant, as well as an increase in retail pricing due to Duke Energy Florida's base rate adjustments for the Osprey acquisition and Hines Chillers and the Duke Energy Progress South Carolina rate case; and

~~a $59 million increase in weather-normal sales volumes to retail customers.~~

~~Operating Expenses.~~ ~~The variance was driven primarily by:~~

~~a $122 million increase in impairment charges primarily due to the write-off of remaining unrecovered Levy Nuclear Project costs in the current year at Duke Energy Florida; and~~

~~an $89 million increase in depreciation and amortization expense primarily due to additional plant in service;~~

~~Partially offset by:~~

~~a $227 million decrease in fuel expense, including purchased power, primarily due to lower retail sales and changes in generation mix.~~

~~Interest Expense.~~ ~~The increase was primarily due to higher debt outstanding in the current year and Duke Energy Florida's Crystal River 3 (CR3) regulatory asset debt return ending in June 2016 upon securitization.~~

~~Income Tax Expense.~~ The variance was primarily due to a decrease in pretax income and higher research credits, partially offset by the North Carolina corporate tax rate reduction. The effective tax rates for the nine months ended September 30, 2017, and 2016 were 34.8 percent and 35.2 percent, respectively.

~~Matters Impacting Future Electric Utilities and Infrastructure Results~~

An order from regulatory authorities disallowing recovery of costs related to closure of ash impoundments could have an adverse impact on Electric Utilities and Infrastructure's financial position, results of operations and cash flows. See Note 4 and Note 7 to the Condensed Consolidated Financial Statements, “Regulatory Matters” and "Asset Retirement Obligations," respectively, for additional information.

On May 18, 2016, the North Carolina Department of Environmental Quality (NCDEQ) issued proposed risk classifications for all coal ash surface impoundments in North Carolina. All ash impoundments not previously designated as high priority by the North Carolina Coal Ash Management Act of 2014 (Coal Ash Act) were designated as intermediate risk. Certain impoundments classified as intermediate risk, however, may be reassessed in the future as low risk pursuant to legislation signed by the former North Carolina governor on July 14, 2016. Electric Utilities and Infrastructure's estimated asset retirement obligations (AROs) related to the closure of North Carolina ash impoundments are based upon the mandated closure method or a probability weighting of potential closure methods for the impoundments that may be reassessed to low risk. As the final risk ranking classifications in North Carolina are delineated, final closure plans and corrective action measures are developed and approved for each site, the closure work progresses and the closure method scope and remedial methods are determined, the complexity of work and the amount of coal combustion material could be different than originally estimated and, therefore, could materially impact Electric Utilities and Infrastructure's financial position. See Note 9 in Duke Energy's Annual Report on Form 10-K for the year ended December 31, 2016, "Asset Retirement Obligations," for additional information.next 15-20 years.

Duke Energy ~~is a party~~Indiana has interpreted the CCR rule to ~~multiple lawsuits~~identify the coal ash basin sites impacted and ~~could be~~has assessed the amounts of coal ash subject to ~~fines~~the rule and ~~other penalties related to operations at certain North Carolina facilities with ash basins. The outcome~~a method of these lawsuits and potential fines and penalties could have an adverse impact on Electric Utilities and Infrastructure's financial position, results of operations and cash flows. See Note 5 to the Condensed Consolidated Financial Statements, “Commitments and Contingencies,” for additional information.

~~PART I~~

In the fourth quarter of 2016, Hurricane Matthew caused historic flooding, extensive damage and widespread power outages within the Duke Energy Progress service territory. Duke Energy Progress filed a petition with the North Carolina Utilities Commission (NCUC) requesting an accounting order to defer incremental operation and maintenance and capital costs incurred in response to Hurricane Matthew and other significant 2016 storms. Current estimated incremental costs are approximately $116 million. The NCUC will address this request in Duke Energy Progress' currently pending rate case. A final order from the NCUC that disallows the deferral and future recovery of all or a significant portioncompliance. Interpretation of the ~~incremental storm restoration costs incurred~~requirements of the CCR rule is subject to further legal challenges and regulatory approvals, which could result in ~~an adverse impact on Electric Utilities~~additional coal ash basin closure requirements, higher costs of compliance and ~~Infrastructure's financial position, results~~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 ~~operations and cash flows.~~coal ash. In January 2022, Duke Energy Indiana received a letter from the EPA regarding interpretation of the CCR rule. See Note 4 to the Condensed Consolidated Financial Statements, ~~“Regulatory Matters,”~~"Commitments and Contingencies" for ~~additional~~more information.

Commercial Renewables

On November 1, 2022, the Board of Directors committed to a plan to sell the Commercial Renewables business segment, excluding the offshore wind lease for Carolina Long Bay. Duke Energy is actively marketing the business as two separate disposal units, the utility scale solar and wind unit and the distributed generation unit. Non-binding offers were received for the utility scale solar and wind unit in late October 2022. We are evaluating the initial offers and expect to receive final offers from select bidders in early 2023. Non-binding offers for the distributed generation unit are also expected in early 2023. Duke Energy expects to dispose of both units in mid-2023. In the fourth quarter of 2022, Duke Energy will reclassify the Commercial Renewables business segment to assets held for sale and report it as a discontinued operation. Duke Energy could record a material impairment loss in the fourth quarter of 2022 if the carrying value of one or both of the units is not expected to be recovered. If the proceeds exceed the carrying value of one or both of the units, a gain would be recognized at the closing of the transaction in mid-2023. Proceeds from a successful sale are expected to be used for debt reduction and avoidance.

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. Duke Energy has ~~several rate cases pending. Duke Energy Kentucky filed an electric rate case with the Kentucky Public Service Commission (KPSC) on September 1, 2017, to recover costs~~been named in multiple lawsuits arising out of capital investments in generation, transmission and distribution systems and to recover other incremental expenses since its previous rate case. Duke Energy Carolinas and Duke Energy Progress filed general rate cases with the NCUC on August 25, 2017, and June 1, 2017, respectively, to recover costs of complying with Coal Combustion Residuals (CCR) regulations and the Coal Ash Act, as well as costs of capital investments in generation, transmission and distribution systems and any increase in expenditures subsequent to previous rate cases. In March 2017, Duke Energy Ohio filed an electric distribution base rate case application and supporting testimony with the Public Utility Commission of Ohio (PUCO). Electric Utilities and Infrastructure's earnings could be impacted adversely if these rate increases are delayed or denied by the KPSC, NCUC or PUCO. See Note 4 to the Condensed Consolidated Financial Statements, "Regulatory Matters," for additional information.

On August 29, 2017, Duke Energy Florida filed a 2017 Second Revised and Restated Settlement Agreement (2017 Settlement) with the FPSC. The 2017 Settlement was approved by the FPSC on October 25, 2017. See Note 4 to the Condensed Consolidated Financial Statements, “Regulatory Matters,” for additionalthis winter storm. For more information, about the 2017 Settlement. In accordance with the 2017 Settlement, Duke Energy Florida will not seek recovery of any costs associated with the ongoing Westinghouse contract litigation, which is currently being appealed. See Note 5 to the Condensed Consolidated Financial Statements, “Commitments and Contingencies” for additional information about the litigation. An unfavorable appeals ruling on that matter could have an adverse impact on Electric Utilities and Infrastructure’s financial position, results of operations and cash flows.

In September 2017, Hurricane Irma caused extensive damage and widespread power outages within the Duke Energy Florida service territory. Duke Energy Florida has not completed the final accumulation of storm restoration costs incurred. Total storm restoration costs, including capital, are currently estimated at approximately $500 million. In accordance with a regulatory order with FPSC, certain incremental operation and maintenance storm restoration costs are classified as a regulatory asset recognizing the probable recoverability of these costs under FPSC's storm rule. The Company will make a petition by the end of 2017 to FPSC for recovery of costs. Duke Energy Florida's cash flows could be impacted by the timing of cost recovery. See Note 4, "Regulatory Matters," to the Condensed Consolidated Financial Statements for additional information.

~~Gas Utilities and Infrastructure~~

Three Months Ended September 30, Nine Months Ended September 30,
(in millions) 2017
2016
Variance
2017
2016
Variance
Operating Revenues $ 272
$ 89
$ 183
$ 1,243
$ 358
$ 885
Operating Expenses
Cost of natural gas 68
6
62
402
64
338
Operation, maintenance and other 93
30
63
291
90
201
Depreciation and amortization 57
19
38
171
59
112
Property and other taxes 25
12
13
81
44
37
Total operating expenses 243
67
176
945
257
688
Operating Income 29
22
7
298
101
197
Other Income and Expenses 22
7
15
60
13
47
Interest Expense 26
6
20
78
19
59
Income Before Income Taxes 25
23
2
280
95
185
Income Tax Expense 6
8
(2 ) 101
32
69
Segment Income $ 19
$ 15
$ 4
$ 179
$ 63
$ 116

Piedmont LDC throughput (dekatherms) ^(a)
107,490,775
—
107,490,775
334,781,316
—
334,781,316
Duke Energy Midwest LDC throughput (Mcf) 9,904,644
9,568,340
336,304
52,940,410
57,023,986
(4,083,576 )

~~(a) Includes throughput subsequent to Duke Energy's acquisition of Piedmont on October 3, 2016.~~

~~Three Months Ended September 30, 2017, as Compared to September 30, 2016~~

Gas Utilities and Infrastructure’s higher results were primarily due to increased investments in the ACP pipeline. Piedmont's losses included in Gas Utilities and Infrastructure's results were $5 million for the three months ended September 30, 2017. All variances are related to the inclusion of Piedmont's results of operations as a result of Duke Energy's acquisition of Piedmont on October 3, 2016, except for the following:

~~Other Income and Expenses.~~ ~~The variance was driven primarily by increased investments in the ACP pipeline.~~

~~PART I~~

~~Nine Months Ended September 30, 2017, as Compared to September 30, 2016~~

Gas Utilities and Infrastructure’s higher results were due to the inclusion of Piedmont's earnings in the current year as a result of Duke Energy's acquisition of Piedmont on October 3, 2016, as well as growth from investments in ACP and Sabal Trail pipelines. Piedmont's earnings included in Gas Utilities and Infrastructure's results were $95 million for the nine months ended September 30, 2017. All variances are related to the inclusion of Piedmont's results of operations, except for the following:

~~Other Income and Expenses.~~ ~~The variance was driven primarily by increased investments in the ACP and Sabal Trail pipelines.~~

~~Matters Impacting Future Gas Utilities and Infrastructure Results~~

Gas Utilities and Infrastructure has a 24 percent ownership interest in Constitution Pipeline Company, LLC (Constitution), a natural gas pipeline project slated to transport natural gas supplies to major northeastern markets. On April 22, 2016, the New York State Department of Environmental Conservation denied Constitution’s application for a necessary water quality certification for the New York portion of the Constitution pipeline. Constitution has stopped construction and discontinued capitalization of future development costs until the project's uncertainty is resolved. To the extent the legal and regulatory proceedings have unfavorable outcomes, or if Constitution concludes that the project is not viable or does not go forward, an impairment charge of up to the recorded investment in the project, net of any cash and working capital returned, may be recorded. With the project on hold, funding of project costs has ceased until resolution of legal actions. At September 30, 2017, Duke Energy's investment in Constitution was $82 million.

Rapidly rising interest rates without timely or adequate updates to the regulated allowed return on equity or failure to achieve the anticipated benefits of the Piedmont merger, including cost savings and growth targets, could significantly impact the estimated fair value of reporting units in Gas Utilities and Infrastructure. In the event of a significant decline in the estimated fair value of the reporting units, goodwill impairment charges could be recorded. The carrying value of goodwill within Gas Utilities and Infrastructure was approximately $1,924 million at September 30, 2017.

~~Commercial Renewables~~

Three Months Ended September 30, Nine Months Ended September 30,
(in millions) 2017
2016
Variance
2017
2016
Variance
Operating Revenues $ 95
$ 139
$ (44 ) $ 333
$ 365
$ (32 )
Operating Expenses
Operation, maintenance and other 56
98
(42 ) 191
253
(62 )
Depreciation and amortization 39
34
5
116
96
20
Property and other taxes 9
8
1
26
20
6
Impairment charges 76
—
76
76
—
76
Total operating expenses 180
140
40
409
369
40
Gains on Sales of Other Assets and Other, net 1
2
(1 ) 5
4
1
Operating (Loss) Income (84 ) 1
(85 ) (71 ) —
(71 )
Other Income and Expenses (10 ) (76 ) 66
(12 ) (78 ) 66
Interest Expense 22
15
7
64
38
26
Loss Before Income Taxes (116 ) (90 ) (26 ) (147 ) (116 ) (31 )
Income Tax Benefit (65 ) (65 ) —
(146 ) (127 ) (19 )
Less: Loss Attributable to Noncontrolling Interests (2 ) (1 ) (1 ) (3 ) (2 ) (1 )
Segment (Loss) Income $ (49 )
$ (24 ) $ (25 ) $ 2
$ 13
$ (11 )

Renewable plant production, GWh 1,760
1,801
(41 ) 6,276
5,619
657
Net proportional MW capacity in operation

2,908
2,725
183

~~Three Months Ended September 30, 2017, as Compared to September 30, 2016~~

Commercial Renewables' results were impacted by lower investment tax credits (ITCs), higher interest expense on new debt financings and higher losses from Duke Energy's REC Solar investment. The following is a detailed discussion of the variance drivers by line item.

~~Operating Revenues.~~ ~~The decrease was primarily due to lower engineering, procurement and construction revenues from REC Solar.~~

~~Operating Expenses.~~ The increase was primarily due to a $69 million pretax impairment charge in the current year related to a wholly owned non-contracted wind project, partially offset by lower operations and maintenance expense at REC Solar. For additional information see Note 3 to the Condensed Consolidated Financial Statements, “Business Segments.”

~~Other Income and Expenses.~~ The variance was primarily due to a $71 million pretax impairment charge in the prior year related to certain equity method investments. For additional information see Note 3 to the Condensed Consolidated Financial Statements, “Business Segments.”

~~Interest Expense.~~ ~~The increase was primarily due to new project financings.~~

~~Income Tax Benefit. Lower ITCs due to lower solar investments in the current year were offset by higher production tax credits (PTCs) related to wind projects placed in service.~~

~~PART I~~

~~Nine Months Ended September 30, 2017, as Compared to September 30, 2016~~

Commercial Renewables' results were impacted by lower ITCs, higher interest expense on new debt financings and higher losses from REC Solar, partially offset by increased PTCs. The following is a detailed discussion of the variance drivers by line item.

~~Operating Revenues.~~ ~~The decrease was primarily due to lower engineering, procurement and construction revenues from REC Solar.~~

~~Operating Expenses.~~ The increase was primarily due to a $69 million pretax impairment charge in the current year related to a wholly owned non-contracted wind project and higher operating expenses related to new wind and solar projects placed in service, partially offset by lower operations and maintenance expense at REC Solar. For additional information see Note 3 to the Condensed Consolidated Financial Statements, “Business Segments.”

~~Interest Expense.~~ ~~The variance was primarily due to new project financings and less capitalized interest due to fewer projects under construction.~~

~~Income Tax Benefit.The variance was primarily due to an increase in PTCs related to wind projects placed in service, partially offset by lower ITCs due to lower solar investments in the current year.~~

~~Matters Impacting Future Commercial Renewables Results~~

Changes or variability in assumptions used in calculating the fair value of the Commercial Renewables reporting units for goodwill testing purposes including but not limited to legislative actions related to tax credit extensions, long-term growth rates and discount rates could significantly impact the estimated fair value of the Commercial Renewables reporting units. In the event of a significant decline in the estimated fair value of the Commercial Renewables reporting units, goodwill or other asset impairment charges could be recorded. The carrying value of goodwill within Commercial Renewables was approximately $115 million at September 30, 2017.

Persistently low market pricing for wind resources, primarily in the Electric Reliability Council of Texas West market, and the future expiration of tax incentives including ITCs and PTCs could result in adverse impacts to the future results of Commercial Renewables.

~~Other~~

Three Months Ended September 30, Nine Months Ended September 30,
(in millions) 2017
2016
Variance
2017
2016
Variance
Operating Revenues $ 35
$ 32
$ 3
$ 103
$ 91
$ 12
Operating Expenses
Fuel used in electric generation and purchased power 13
14
(1 ) 42
37
5
Operation, maintenance and other 21
70
(49 ) 47
145
(98 )
Depreciation and amortization 27
37
(10 ) 79
108
(29 )
Property and other taxes 3
8
(5 ) 10
25
(15 )
Impairment charges —
—
—
7
2
5
Total operating expenses 64
129
(65 ) 185
317
(132 )
Gains on Sales of Other Assets and Other, net 4
3
1
15
14
1
Operating Loss (25 ) (94 ) 69
(67 ) (212 ) 145
Other Income and Expenses 51
24
27
100
60
40
Interest Expense 150
157
(7 ) 423
553
(130 )
Loss Before Income Taxes (124 ) (227 ) 103
(390 ) (705 ) 315
Income Tax Benefit (93 ) (49 ) (44 ) (193 ) (276 ) 83
Less: Income Attributable to Noncontrolling Interests 3
3
—
8
7
1
Net Expense $ (34 ) $ (181 ) $ 147
$ (205 ) $ (436 ) $ 231

~~Three Months Ended September 30, 2017, as Compared to September 30, 2016~~

Other's lower net expense was driven by tax benefits, insurance proceeds resulting from settlement of the shareholder litigation related to the Progress Energy merger, prior year donations to the Duke Energy Foundation and lower severance expenses. The following is a detailed discussion of the variance drivers by line item.

~~Operating Expenses.~~ The decrease was primarily due to prior year donations to the Duke Energy Foundation, less captive insurance losses for Bison Insurance Company Limited and prior year severance expense related to cost savings initiatives.

~~Other Income and Expenses.~~ The increase was driven by insurance proceeds resulting from settlement of the shareholder litigation related to the Progress Energy merger and higher earnings from the equity method investment in National Methanol Company (NMC).

~~Interest Expense.~~ The decrease was driven by prior year losses on forward-starting interest rate swaps related to Piedmont pre-acquisition financing, partially offset by additional long-term debt outstanding in the current year. For additional information see Notes 2 ~~and~~ 10 ~~to the Condensed Consolidated Financial Statements, "Acquisitions and Dispositions" and "Derivatives and Hedging," respectively.~~

~~PART I~~

~~Income Tax Benefit.~~ The variance was primarily due to higher tax benefits resulting from legal entity restructuring, the 2016 North Carolina corporate tax rate reduction and prior year unfavorable impacts of finalizing federal tax audits, partially offset by lower pretax losses.

~~Nine Months Ended September 30, 2017, as Compared to September 30, 2016~~

Other's lower net expense was driven by prior year losses on forward-starting interest rate swaps, prior year donations to the Duke Energy Foundation, insurance proceeds resulting from settlement of the shareholder litigation related to the Progress Energy merger and decreased severance expenses. The following is a detailed discussion of the variance drivers by line item.

~~Operating Expenses.~~ The decrease was primarily due to prior year severance expenses related to cost savings initiatives, prior year donations to the Duke Energy Foundation and lower franchise taxes resulting from a North Carolina law change.

~~Interest Expense.~~ The decrease was primarily by prior year losses on forward-starting interest rate swaps related to Piedmont pre-acquisition financing, partially offset by higher interest costs on $3.75 billion of debt issued in August 2016 to fund the acquisition. For additional information see Notes 2 ~~and~~ 10 ~~to the Condensed Consolidated Financial Statements, "Acquisitions and Dispositions" and "Derivatives and Hedging," respectively.~~

~~Income Tax Benefit.~~ The variance was primarily due to a decrease in pretax losses, partially offset by tax benefits resulting from legal entity restructuring and the net impact of North Carolina corporate tax rate reductions in 2017 and 2016.

~~Matters Impacting Future Other Results~~

Included in Other is Duke Energy Ohio's 9 percent ownership interest in the Ohio Valley Electric Corporation (OVEC), which owns 2,256 MW of coal-fired generation capacity. As a counterparty to an inter-company power agreement (ICPA), Duke Energy Ohio has a contractual arrangement to receive entitlements to capacity and energy from OVEC’s power plants through June 2040 commensurate with its power participation ratio, which is equivalent to Duke Energy Ohio's ownership interest. Costs, including fuel, operating expenses, fixed costs, debt amortization and interest expense, are allocated to counterparties to the ICPA, including Duke Energy Ohio, based on their power participation ratio. The value of the ICPA is subject to variability due to fluctuations in power prices and changes in OVEC’s costs of business. Deterioration in the credit quality or bankruptcy of one or more parties to the ICPA could increase the costs of OVEC. In addition, certain proposed environmental rulemaking costs could result in future increased cost allocations. For information on Duke Energy's regulatory filings related to OVEC, see Note 4 to the Condensed Consolidated Financial Statements, ~~“Regulatory Matters.”~~"Commitments and Contingencies."

Supply Chain

Duke Energy is monitoring supply chain disruptions, which could impact the timing of in-service dates and may result in adverse impacts on operating results. The ~~retired Beckjord generating station (Beckjord),~~company is also monitoring the potential impacts on future financial results and clean energy goals due to supply chain challenges regarding the availability of transformers and renewable components like solar panels and batteries.

Other

Duke Energy is monitoring general market conditions, including rising interest rates, and evaluating the impact to its results of operations, financial position and cash flows in the future. Duke Energy is developing mitigation plans to partially offset the impacts of these general market conditions. These mitigation plans could result in charges related to a ~~nonregulated facility retired during 2014,~~reduction in workforce, primarily in corporate and operational support roles as work is ~~not subject~~reassessed, real estate modifications to leased office space or asset impairments on property, plant and equipment.

Results of Operations

Non-GAAP Measures

Management’s Discussion and Analysis includes financial information prepared in accordance with GAAP in the U.S. ~~Environmental Protection Agency (EPA) rule~~, as well as certain non-GAAP financial measures such as adjusted earnings and adjusted EPS discussed below. Generally, a non-GAAP financial measure is a numerical measure 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:

•Regulatory Matters represents the net impact of charges related to the ~~disposal~~2022 Indiana Supreme Court ruling on coal ash.

•Mark-to-Market represents the income statement impact of ~~CCR from electric utilities. However, if~~derivative instruments that do not qualify for hedge accounting or regulatory accounting.


MD&A			DUKE ENERGY

•Workplace and Workforce Realignment represents costs ~~are incurred as a result of environmental regulations or~~attributable to ~~mitigate risk associated with on-site storage of~~business transformation, including long-term real estate strategy changes and workforce realignment.

•Regulatory Settlements represents an impairment charge related to the South Carolina Supreme Court decision on coal ash, insurance proceeds and the ~~costs could have an adverse impact on Other's financial position, results of operations~~Duke Energy Carolinas and ~~cash flows.~~Duke Energy Progress coal ash settlement.

Earnings from an equity method investment in NMC reflect sales of methanol and methyl tertiary butyl ether (MTBE), which generate margins that are directionally correlated with Brent crude oil prices. Weakness in the market price of Brent crude oil and•Gas Pipeline Investments represents additional exit obligations related ~~commodities may result in a decline in earnings. In October 2017, Duke Energy's economic ownership interest in NMC decreased from 25 percent~~ to ~~17.5 percent.~~

On November 2, 2017, the U.S. House of Representatives issued its proposal for comprehensive tax reform. The U.S. Senate has not yet issued its related proposal. There is uncertainty as to whether any form of tax reform will become law and, if so, what provisions may be included in the final tax reform. Any substantial revision to the U.S. tax code, including a loss of the ability to deduct interest expense, could adversely impact Duke Energy's future earnings, cash flows or financial position.

~~(LOSS) INCOME FROM DISCONTINUED OPERATIONS, NET OF TAX~~

Three Months Ended September 30, Nine Months Ended September 30,
(in millions) 2017
2016
Variance
2017
2016
Variance
(Loss) Income From Discontinued Operations, net of tax $ (2 ) $ 180
$ (182 ) $ (4 ) $ 190
$ (194 )
ACP.

Three Months Ended September 30, ~~2017,~~2022, as ~~Compared~~compared to September 30, ~~2016~~2021

~~The variance~~GAAP reported EPS was $1.81 for the third quarter of 2022 compared to $1.79 in the third quarter of 2021. GAAP reported EPS increased primarily ~~driven by a $122 million income tax benefit~~due to regulatory settlements in the prior year ~~resulting from immaterial out~~and higher volumes and lower operations and maintenance expense in the current year, partially offset by lower Commercial Renewables earnings, higher depreciation and interest expense and lower returns on investments..

As discussed above, management also evaluates financial performance based on adjusted EPS. Duke Energy’s third quarter 2022 adjusted EPS was $1.78 compared to $1.88 for the third quarter of ~~period deferred~~2021. The decrease in adjusted EPS was primarily due to lower Commercial Renewables earnings, higher depreciation and interest expense and lower returns on investments, partially offset by higher volumes and lower operation and maintenance expense.

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


	Three Months Ended September 30,
	2022				2021
(in millions, except per share amounts)	Earnings		EPS		Earnings		EPS

GAAP Reported Earnings/GAAP Reported EPS	$	1,383	$	1.81	$	1,366	$	1.79
Adjustments:

Mark-to-Market(a)	(4)		—		—		—
Workplace and Workforce Realignment(b)	—		—		7		—
Regulatory Settlements(c)	—		—		64		0.09
Gas Pipeline Investments(d)	—		—		(2)		—
Discontinued Operations(e)	(23)		(0.03)		—		—
Adjusted Earnings/Adjusted EPS	$	1,356	$	1.78	$	1,435	$	1.88

(a)Net of tax ~~liability adjustments, as well as earnings from~~expense of $2 million.

(b)Net of tax benefit of $2 million.

(c)Net of tax benefit of $19 million.

(d)Net of tax expense of $1 million.

(e)Represents the net impact of the expiration of statutes related to the International Disposal ~~Group, which was sold in December 2016. For additional information see Note 2 to the Condensed Consolidated Financial Statements, "Acquisitions and Dispositions."~~Group.

Nine Months Ended September 30, ~~2017,~~2022, as ~~Compared~~compared to September 30, ~~2016~~2021

~~The variance~~GAAP Reported EPS was primarily driven by a $122 million income tax benefit in the prior year resulting from immaterial out of period deferred tax liability adjustments, as well as operating earnings from the International Disposal Group, partially offset by an impairment charged related to certain assets in Central America that were sold in 2016. For additional information see Note 2 to the Condensed Consolidated Financial Statements, "Acquisitions and Dispositions."

~~PART I~~

~~DUKE ENERGY CAROLINAS~~

~~Management’s Discussion and Analysis should be read in conjunction with the accompanying Condensed Consolidated Financial Statements and Notes~~$4.03 for the nine months ended September 30, ~~2017, and 2016 and the Annual Report on Form 10-K~~2022, compared to $4.00 for the ~~year~~nine months ended ~~December 31, 2016.~~

~~Results of Operations~~

Nine Months Ended September 30,
(in millions) 2017
2016
Variance
Operating Revenues $ 5,581
$ 5,641
$ (60 )
Operating Expenses
Fuel used in electric generation and purchased power 1,394
1,391
3
Operation, maintenance and other 1,431
1,481
(50 )
Depreciation and amortization 804
802
2
Property and other taxes 206
206
—
Total operating expenses 3,835
3,880
(45 )
Losses on Sales of Other Assets and Other, net —
(1 ) 1
Operating Income 1,746
1,760
(14 )
Other Income and Expenses 99
121
(22 )
Interest Expense 314
316
(2 )
Income Before Income Taxes 1,531
1,565
(34 )
Income Tax Expense 522
539
(17 )
Net Income $ 1,009
$ 1,026
$ (17 )

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~~	~~2017~~
~~Residential sales~~	~~(6.7~~	)%
~~General service sales~~	~~(2.1~~	)%
~~Industrial sales~~	~~(0.5~~	)%
~~Wholesale power sales~~	~~3.9~~	%
~~Joint dispatch sales~~	~~87.6~~	%
~~Total sales~~	~~(2.5~~	)%
~~Average number of customers~~	~~1.5~~	%

~~Nine Months Ended~~ September 30, ~~2017, as Compared~~2021. In addition to the drivers below, GAAP reported EPS increased due to higher volumes, favorable weather and workplace and workforce realignment costs in the prior year, partially offset by the net impact of charges related to the 2022 Indiana Supreme Court ruling on coal ash, higher operations and maintenance expense, including storm costs, the impact of GIC minority interest sale and lower returns on investments.

As discussed above, management also evaluates financial performance based on adjusted EPS. Duke Energy’s adjusted EPS was $4.22 for the nine months ended September 30, ~~2016~~

~~Operating Revenues.~~2022, compared to $4.30 for the nine months ended September 30, 2021. The ~~variance was driven primarily by:~~

~~a $213 million~~ decrease in ~~retail sales, net of fuel revenues,~~adjusted EPS was primarily due to ~~less~~lower Commercial Renewables earnings and higher operations and maintenance expense, including storm costs,, the impact of the GIC minority interest sale and lower returns on investments, partially offset by higher volumes and favorable weather in the current year.

~~Partially offset by:~~

~~an $89 million increase in rider revenues and retail pricing primarily related to energy efficiency programs;~~

~~a $30 million increase in weather-normal sales volumes to retail customers, net of fuel revenues;~~

~~a $15 million increase in wholesale power revenues, net of sharing and fuel revenues, primarily due to additional volumes for customers served under long-term contracts; and~~

~~an $8 million increase in fuel revenues primarily due to changes in generation mix.~~

~~Operating Expenses.~~ The variance was primarily due to a $50 million decrease in operation, maintenance and other expense primarily due to lower expenses at generating plants, lower storm restoration costs and lower severance expenses, partially offset by higher energy efficiency program costs and higher distribution maintenance expenses.

~~Other Income and Expenses.~~ ~~The variance was primarily due to a decrease in recognition of post in-service equity returns for projects that had been completed prior to being reflected in customer rates.~~

~~Income Tax Expense.~~ The variance was primarily due to a decrease in pretax income and the favorable impact of research credits. The effective tax rates for the nine months ended September 30, 2017, and 2016 were 34.1 percent and 34.4 percent, respectively.

~~Matters Impacting Future Results~~

An order from regulatory authorities disallowing recovery of costs related to closure of ash impoundments could have an adverse impact on Duke Energy Carolinas' financial position, results of operations and cash flows. See Note 4 to the Condensed Consolidated Financial Statements, “Regulatory Matters” and Note 9 in Duke Energy's Annual Report on Form 10-K for the year ended December 31, 2016, "Asset Retirement Obligations," for additional information.

~~PART I~~93



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

1-32853	DUKE ENERGY CORPORATION ~~(a Delaware corporation)~~ ~~550 South Tryon~~	20-2777218



~~Commission file number~~1-4928			~~Registrant, State of Incorporation or Organization, Address of Principal Executive Offices, Telephone Number and IRS Employer Identification Number~~	~~Commission file number~~	~~Registrant, State of Incorporation or Organization, Address of Principal Executive Offices, Telephone Number and IRS Employer Identification Number~~
~~1-4928~~	DUKE ENERGY CAROLINAS, LLC	56-0205520

		~~1-3274~~	~~DUKE ENERGY FLORIDA, LLC~~ ~~(a Florida limited liability company)~~ ~~299 First Avenue North~~ ~~St. Petersburg, Florida 33701~~ ~~704-382-3853~~ ~~59-0247770~~
1-15929			PROGRESS ENERGY, INC.						56-2155481

		~~1-1232~~	~~DUKE ENERGY OHIO, INC.~~ ~~(an Ohio corporation)~~ ~~139 East Fourth Street~~ ~~Cincinnati, Ohio 45202~~ ~~704-382-3853~~ ~~31-0240030~~
1-3382			DUKE ENERGY PROGRESS, LLC						56-0165465

		~~1-3543~~
1-3274			DUKE ENERGY FLORIDA, LLC						59-0247770



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



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


Registrant			Description	Shares
Duke Energy			Common stock, $0.001 par value	770,062,772







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



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



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



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



	Nine Months Ended September 30, 2017
	Electric		Gas				Total
	Utilities and		Utilities and		Commercial		Reportable
(in millions)	Infrastructure		Infrastructure		Renewables		Segments		Other			Eliminations			Consolidated
Unaffiliated revenues	$	16,211	$	1,175	$	333	$	17,719	$	47		$	—		$	17,766
Intersegment revenues	23		68		—		91		56			(147		)	—
Total revenues	$	16,234	$	1,243	$	333	$	17,810	$	103		$	(147	)	$	17,766
Segment income (loss)^(a)(b)(c)	$	2,384	$	179	$	2	$	2,565	$	(205	)	$	—		$	2,360
Add back noncontrolling interests															5
Loss from discontinued operations, net of tax															(4		)
Net income															$	2,361



	Nine Months Ended September 30, 2016
	Electric		Gas				Total
	Utilities and		Utilities and		Commercial		Reportable
(in millions)	Infrastructure		Infrastructure		Renewables		Segments		Other			Eliminations			Consolidated
Unaffiliated revenues	$	16,406	$	355	$	365	$	17,126	$	40		$	—		$	17,166
Intersegment revenues	24		3		—		27		51			(78		)	—
Total revenues	$	16,430	$	358	$	365	$	17,153	$	91		$	(78	)	$	17,166
Segment income (loss)^(a)(c)	$	2,557	$	63	$	13	$	2,633	$	(436	)	$	—		$	2,197
Add back noncontrolling interests															5
Income from discontinued operations, net of tax^(d)															190
Net income															$	2,392


~~(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.


~~(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, 2017, substantially all accretion expense relates to Duke Energy's regulated electric operations and has been deferred in accordance with regulatory accounting treatment.


~~(c)~~	~~Primarily relates to ash impoundment closures and nuclear decommissioning of Crystal River Unit 3.~~


~~(d)~~	~~Primarily relates to favorable contract prices for closure of ash impoundments compared to original estimates.~~



	Electric Utilities		Gas Utilities		Commercial
(in millions)	and Infrastructure		and Infrastructure		Renewables			Total
Goodwill Balance at December 31, 2016	$	17,379	$	1,924	$	122		$	19,425
Accumulated impairment charges^(a)	—		—		(7		)	(7		)
Goodwill Balance at September 30, 2017	$	17,379	$	1,924	$	115		$	19,418


~~(a)~~FINANCIAL STATEMENTS			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 on the Condensed Consolidated Statements of Operations and Comprehensive Income.RELATED PARTY TRANSACTIONS


~~(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.


~~(a)~~	~~Duke Energy includes amounts related to consolidated VIEs of $703 million and $750 million as of September 30, 2017, and December 31, 2016, respectively.~~


	September 30, 2022
					Receive					Fair Value
	Pay Notional				Notional		Receive		Hedge	Gain (Loss)(a)
	(in millions)		Pay Rate		(in millions)		Rate		Maturity Date	(in millions)
Fair value hedges
	$	645	4.75	%	600	euros	3.10	%	June 2028	$	(57)
	537		5.31	%	500	euros	3.85	%	June 2034	(47)
Total notional amount	$	1,182			1,100	euros				$	(104)



Derivative Assets	September 30, 2017
			Duke				Duke		Duke		Duke		Duke
	Duke		Energy		Progress		Energy		Energy		Energy		Energy
(in millions)	Energy		Carolinas		Energy		Progress		Florida		Ohio		Indiana		Piedmont
Commodity Contracts
Not Designated as Hedging Instruments
Current	$	48	$	6	$	10	$	5	$	4	$	2	$	28	$	2
Noncurrent	6		2		4		3		1		—		—		—
Total Derivative Assets – Commodity Contracts	$	54	$	8	$	14	$	8	$	5	$	2	$	28	$	2
Interest Rate Contracts
Designated as Hedging Instruments
Noncurrent	$	14	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Not Designated as Hedging Instruments
Current	1		—		1		—		1		—		—		—
Total Derivative Assets – Interest Rate Contracts	$	15	$	—	$	1	$	—	$	1	$	—	$	—	$	—
Total Derivative Assets	$	69	$	8	$	15	$	8	$	6	$	2	$	28	$	2


Derivative Liabilities	September 30, 2017
Derivative Assets																	Derivative Assets	September 30, 2022
			Duke				Duke		Duke		Duke		Duke							Duke				Duke		Duke		Duke		Duke
	Duke		Energy		Progress		Energy		Energy		Energy		Energy					Duke		Energy		Progress		Energy		Energy		Energy		Energy
(in millions)	Energy		Carolinas		Energy		Progress		Florida		Ohio		Indiana		Piedmont		(in millions)	Energy		Carolinas		Energy		Progress		Florida		Ohio		Indiana		Piedmont
Commodity Contracts																	Commodity Contracts

Not Designated as Hedging Instruments																	Not Designated as Hedging Instruments
Current	$	29	$	1	$	11	$	2	$	9	$	—	$	—	$	18	Current	$	615	$	282	$	263	$	241	$	22	$	4	$	58	$	—
Noncurrent	113		1		7		1		—		—		—		105		Noncurrent	340		172		162		162		—		—		—		—
Total Derivative Liabilities – Commodity Contracts	$	142	$	2	$	18	$	3	$	9	$	—	$	—	$	123
Total Derivative Assets – Commodity Contracts																	Total Derivative Assets – Commodity Contracts	$	955	$	454	$	425	$	403	$	22	$	4	$	58	$	—
Interest Rate Contracts																	Interest Rate Contracts
Designated as Hedging Instruments																	Designated as Hedging Instruments
Current	$	7	$	—	$	—	$	—	$	—	$	—	$	—	$	—	Current	$	103	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Noncurrent	9		—		—		—		—		—		—		—		Noncurrent	35		—		—		—		—		—		—		—
Not Designated as Hedging Instruments																	Not Designated as Hedging Instruments
Current	24		23		—		—		—		1		—		—		Current	85		—		12		12		—		—		73		—
Noncurrent	9		—		4		4		—		4		—		—		Noncurrent	81		81		—		—		—		—		—		—
Total Derivative Liabilities – Interest Rate Contracts	$	49	$	23	$	4	$	4	$	—	$	5	$	—	$	—
Total Derivative Liabilities	$	191	$	25	$	22	$	7	$	9	$	5	$	—	$	123
Total Derivative Assets – Interest Rate Contracts																	Total Derivative Assets – Interest Rate Contracts	$	304	$	81	$	12	$	12	$	—	$	—	$	73	$	—

Total Derivative Assets																	Total Derivative Assets	$	1,259	$	535	$	437	$	415	$	22	$	4	$	131	$	—


FINANCIAL STATEMENTS			INVESTMENTS IN DEBT AND EQUITY SECURITIES



(in millions)	September 30, 2017
Due in one year or less	$	92
Due after one through five years	584
Due after five through 10 years	514
Due after 10 years	1,076
Total	$	2,266


	September 30, 2022						December 31, 2021
	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	$	—	$	—	$	41	$	—	$	—	$	53
Equity securities	1,903		87		3,154		2,887		19		4,265
Corporate debt securities	—		86		433		24		4		506
Municipal bonds	—		13		57		2		—		48
U.S. government bonds	—		65		637		16		3		712
Other debt securities	—		19		159		3		1		175
Total NDTF Investments	$	1,903	$	270	$	4,481	$	2,932	$	27	$	5,759


~~(a)~~FINANCIAL STATEMENTS			During the nine months ended September 30, 2017, Duke Energy Florida continued to receive reimbursements from the NDTF for costs related to ongoing decommissioning activity of the Crystal River Unit 3 nuclear plant.INVESTMENTS IN DEBT AND EQUITY SECURITIES


	September 30, 2022
(in millions)	Total Fair Value		Level 1		Level 2		Level 3		Not Categorized
NDTF cash and cash equivalents	$	120	$	120	$	—	$	—	$	—
NDTF equity securities	5,447		5,402		—		—		45
NDTF debt securities	2,556		778		1,778		—		—
Other equity securities	116		116		—		—		—
Other debt securities	264		56		208		—		—
Other cash and cash equivalents	37		37		—		—		—

Derivative assets	1,259		3		1,196		60		—
Total assets	9,799		6,512		3,182		60		45

Derivative liabilities	(671)		(18)		(432)		(221)		—
Net assets (liabilities)	$	9,128	$	6,494	$	2,750	$	(161)	$	45


																				Derivatives (net)
	Nine Months Ended September 30, 2017									Nine Months Ended September 30, 2016										Three Months Ended September 30,				Nine Months Ended September 30,
(in millions)	Investments			Derivatives (net)			Total			Investments			Derivatives (net)			Total			(in millions)	2022		2021		2022		2021
Balance at beginning of period	$	5		$	(166	)	$	(161	)	$	5		$	10		$	15		Balance at beginning of period	$	(156)	$	(131)	$	(121)	$	(77)
Total pretax realized or unrealized gains included in comprehensive income	1			—			1			—			—			—
Total pretax realized or unrealized gains included in earnings																			Total pretax realized or unrealized gains included in earnings	15		—		15		—
Total pretax realized or unrealized losses included in comprehensive income																			Total pretax realized or unrealized losses included in comprehensive income	(5)		(11)		(115)		(86)
Purchases, sales, issuances and settlements:																			Purchases, sales, issuances and settlements:
Purchases	—			55			55			—			34			34			Purchases	—		—		77		21
Sales	(6		)	—			(6		)	(1		)	—			(1		)

Settlements	—			(30		)	(30		)	—			(22		)	(22		)	Settlements	(6)		4		12		(4)
Total gains included on the Condensed Consolidated Balance Sheet	—			48			48			—			1			1

Total (losses) gains included on the Condensed Consolidated Balance Sheet																			Total (losses) gains included on the Condensed Consolidated Balance Sheet	(9)		7		(29)		15
Balance at end of period	$	—		$	(93	)	$	(93	)	$	4		$	23		$	27		Balance at end of period	$	(161)	$	(131)	$	(161)	$	(131)



	September 30, 2017
	Fair Value
Investment Type	(in millions)			Valuation Technique	Unobservable Input	Range
Duke Energy Ohio
Financial Transmission Rights (FTRs)	$	2		RTO auction pricing	FTR price – per megawatt-hour (MWh)	$	—		-	$	1.08
Duke Energy Indiana
FTRs	28			RTO auction pricing	FTR price – per MWh	(0.82		)	-	6.19
Piedmont
Natural gas contracts	(123		)	Discounted cash flow	Forward natural gas curves – price per million British thermal unit (MMBtu)	2.12			-	3.36
Duke Energy
Total Level 3 derivatives	$	(93	)


													September 30, 2022
	December 31, 2016																					Weighted
	Fair Value												Fair Value									Average
Investment Type	(in millions)			Valuation Technique	Unobservable Input	Range						Investment Type	(in millions)		Valuation Technique	Unobservable Input	Range					Range
Duke Energy												Duke Energy

Electricity contracts												Electricity contracts	$	(221)	RTO forward pricing	Forward electricity curves – price per MWh	$	24.46	-	$	145.44	$	52.10

Duke Energy Ohio												Duke Energy Ohio

FTRs	$	5		RTO auction pricing	FTR price – per MWh	$	0.77		-	$	3.52	FTRs	4		RTO auction pricing	FTR price – per MWh	—		-	3.00		1.49

Duke Energy Indiana												Duke Energy Indiana
FTRs	16			RTO auction pricing	FTR price – per MWh	(0.83		)	-	9.32		FTRs	56		RTO auction pricing	FTR price – per MWh	(0.64)		-	21.81		3.41
Piedmont
Natural gas contracts	(187		)	Discounted cash flow	Forward natural gas curves – price per MMBtu	2.31			-	4.18

Duke Energy												Duke Energy
Total Level 3 derivatives	$	(166	)									Total Level 3 derivatives	$	(161)


~~(a)~~FINANCIAL STATEMENTS			Duke Energy holds a 50 percent equity interest in Duke-American Transmission Company, LLC (DATC). As of December 31, 2016, DATC was considered a VIE due to having insufficient equity to finance its own activities without subordinated financial support. However, DATC has sufficient equity to finance its own activities as of September 30, 2017, and, therefore, is no longer considered a VIE. Duke Energy's investment in DATC was $45 million at September 30, 2017.VARIABLE INTEREST ENTITIES


~~(a)~~	~~In April 2017, Piedmont transferred its non-consolidated VIE investments to a wholly owned subsidiary of Duke Energy. See "Pipeline Investments" section below for additional detail.~~