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	4445
	Note 3 – Business Segments	4647
	Note 4 – Regulatory Matters	49
	Note 5 – Commitments and Contingencies	5755

	Note 6 – Debt and Credit Facilities	6257
	Note 7 – Asset Retirement Obligations	6560
	Note 8 – Goodwill ~~and Intangible Assets~~	6561
	Note 9 – Related Party Transactions	6762
	Note 10 – Derivatives and Hedging	6863
	Note 11 – Investments in Debt and Equity Securities	7469
	Note 12 – Fair Value Measurements	8073
	Note 13 – Variable Interest Entities	8678
	Note 14 – ~~Common Stock~~Revenue	9181
	Note 15 – ~~Stock-Based Compensation~~Stockholders' Equity	9187
	Note 16 – Employee Benefit Plans	9288
	Note 17 – Income Taxes	9690
	Note 18 – Subsequent Events	9790

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 5.	Other Information	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.

AFUDC			Allowance for funds used during construction

ArcLight			ArcLight Capital Partners, LLC

ARM			Annual Review Mechanism

ARO			Asset retirement obligations

Bison			Bison Insurance Company Limited

Brookfield			Brookfield Renewable Partners L.P.

CEP			Capital Expenditure Program

the Company			Duke Energy Corporation and its subsidiaries

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

COVID-19			Coronavirus Disease 2019

CRC			Cinergy Receivables Company, LLC

Crystal River Unit 3			Crystal River Unit 3 Nuclear Plant

DEFR			Duke Energy Florida Receivables, LLC

DEPR			Duke Energy Progress Receivables, LLC

DERF			Duke Energy Receivables Finance Company, LLC

Duke Energy			Duke Energy Corporation (collectively with its subsidiaries)

Duke Energy Ohio			Duke Energy Ohio, Inc.

Duke Energy Progress			Duke Energy Progress, LLC

Duke Energy Carolinas			Duke Energy Carolinas, LLC

Duke Energy Florida			Duke Energy Florida, LLC

Duke Energy Indiana			Duke Energy Indiana, LLC

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

EDIT			Excess deferred income tax

EPA			United States Environmental Protection Agency

EPS			Earnings (Loss) Per Share

ERCOT			Electric Reliability Council of Texas

ETR			Effective tax rate

EU&I			Electric Utilities and Infrastructure

Exchange Act			Securities Exchange Act of 1934

FERC			Federal Energy Regulatory Commission

FPSC			Florida Public Service Commission

FTR			Financial transmission rights

GAAP			Generally accepted accounting principles in the U.S.

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

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

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

GU&I			Gas Utilities and Infrastructure


GLOSSARY OF TERMS


GWh			Gigawatt-hours

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

IMR			Integrity Management Rider

IRA			Inflation Reduction Act

IRS			Internal Revenue Service

IURC			Indiana Utility Regulatory Commission

KPSC			Kentucky Public Service Commission

LLC			Limited Liability Company

MGP			Manufactured gas plant

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

MW			Megawatt

MWh			Megawatt-hour

MYRP			Multiyear rate plan

NCUC			North Carolina Utilities Commission

NDTF			Nuclear decommissioning trust funds

NPNS			Normal purchase/normal sale

NYSE			The New York Stock Exchange

OCC			Ohio Consumers' Counsel

OPEB			Other Post-Retirement Benefit Obligations

the Parent			Duke Energy Corporation holding company

PBR			Performance-based regulation

Piedmont			Piedmont Natural Gas Company, Inc.

Progress Energy			Progress Energy, Inc.

PSCSC			Public Service Commission of South Carolina

PUCO			Public Utilities Commission of Ohio

RTO			Regional Transmission Organization

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

TPUC			Tennessee Public Utility Commission

U.S.			United States

VIE			Variable Interest Entity


FORWARD-LOOKING STATEMENTS

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

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

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

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

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

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

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

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

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

◦Industrial, commercial and residential growth or decline in service territories or customer bases resulting from sustained downturns of the economy, reduced customer usage due to cost pressures from inflation or fuel costs, and the economic health of our service territories or variations in customer usage patterns, including energy efficiency efforts, natural gas building and appliance electrification, and use of alternative energy sources, such as self-generation and distributed generation technologies;

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

◦Advancements in technology;

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

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

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

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

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

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

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

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

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

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

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

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


◦			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;~~

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


◦	~~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.~~

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

◦The ability to control operation and maintenance costs;

◦The level of creditworthiness of counterparties to transactions;

◦The ability to obtain adequate insurance at acceptable costs;

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

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

◦The performance of projects undertaken by our nonregulated businesses and the success of efforts to invest in and develop new opportunities, as well as the successful sale of the Commercial Renewables Disposal Groups;

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

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

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

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

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

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

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

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

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

Weighted Average Shares Outstanding
Basic and Diluted	771		770		771		770

See Notes to Condensed Consolidated Financial Statements

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)	2023		2022		2023		2022
Net Income	$	1,321	$	1,413	$	1,878	$	3,113
Other Comprehensive Income, net of tax(a)

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

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

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

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

See Notes to Condensed Consolidated Financial Statements

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, 2023		December 31, 2022
ASSETS
Current Assets
Cash and cash equivalents	$	324	$	409

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

See Notes to Condensed Consolidated Financial Statements

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

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

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

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


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

Net proceeds from the sales of other assets	130		—


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



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

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

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

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






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

See Notes to Condensed Consolidated Financial Statements

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


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

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


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

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

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

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

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

See Notes to Condensed Consolidated Financial Statements

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.~~

DUKE ENERGY CORPORATION

Condensed Consolidated Statements of Changes in Equity

(Unaudited)


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


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

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

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

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


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

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

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

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

See Notes to Condensed Consolidated Financial Statements

~~PART I~~14


FINANCIAL STATEMENTS

DUKE ENERGY CAROLINAS, LLC

Condensed Consolidated Statements of Operations and Comprehensive Income

(Unaudited)


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

See Notes to Condensed Consolidated Financial Statements

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

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

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

See Notes to Condensed Consolidated Financial Statements

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


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

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


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

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

See Notes to Condensed Consolidated Financial Statements

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



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

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


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

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

Distributions to parent	(50)		—		(50)

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

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


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

See Notes to Condensed Consolidated Financial Statements

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


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

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

Net unrealized gains on cash flow hedges	—		—		—		1


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

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

See Notes to Condensed Consolidated Financial Statements

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

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

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


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

See Notes to Condensed Consolidated Financial Statements

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

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


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

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


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



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






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

See Notes to Condensed Consolidated Financial Statements

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
—

~~PART I~~


FINANCIAL STATEMENTS

PROGRESS ENERGY, INC.

Condensed Consolidated Statements of Changes in Equity

(Unaudited)


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

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

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


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

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

	Nine Months Ended September 30, 2022 and 2023
					Accumulated Other Comprehensive Loss
					Net Gains		Net Unrealized				Total Progress
	Additional				on		Gains (Losses) on		Pension and		Energy, Inc.
	Paid-in		Retained		Cash Flow		Available-for-		OPEB		Stockholders'		Noncontrolling		Total
	Capital		Earnings		Hedges		Sale Securities		Adjustments		Equity		Interests		Equity
Balance at December 31, 2021	$	9,149	$	8,007	$	(2)	$	(2)	$	(7)	$	17,145	$	3	$	17,148
Net income	—		1,498		—		—		—		1,498		1		1,499
Other comprehensive income (loss)	—		—		1		(4)		—		(3)		—		(3)

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

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

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

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

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

See Notes to Condensed Consolidated Financial Statements

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

See Notes to Condensed Consolidated Financial Statements

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

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

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


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

See Notes to Condensed Consolidated Financial Statements

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

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


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

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


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

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

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

See Notes to Condensed Consolidated Financial Statements

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, 2022 and 2023

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



Balance at September 30, 2022	$	10,132

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

Distributions to parent	(500)

Balance at September 30, 2023	$	10,486

	Nine Months Ended
	September 30, 2022 and 2023

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


Balance at September 30, 2022	$	10,132

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


Distributions to parent	(500)

Balance at September 30, 2023	$	10,486

See Notes to Condensed Consolidated Financial Statements

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




Other Comprehensive (Loss) Gain, net of tax

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





Comprehensive Income	$	347	$	318	$	812	$	748

See Notes to Condensed Consolidated Financial Statements

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

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

See Notes to Condensed Consolidated Financial Statements

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

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

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

(Increase) decrease in

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


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

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

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

See Notes to Condensed Consolidated Financial Statements

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





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

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

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

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





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

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



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

See Notes to Condensed Consolidated Financial Statements

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)	2023		2022		2023		2022
Operating Revenues
Regulated electric	$	472	$	507	$	1,411	$	1,320
Regulated natural gas	105		121		464		491

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

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


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

See Notes to Condensed Consolidated Financial Statements

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

Inventory	168		144

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

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

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

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

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

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

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

See Notes to Condensed Consolidated Financial Statements

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

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


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

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




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

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

See Notes to Condensed Consolidated Financial Statements

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


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

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



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

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


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

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



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

See Notes to Condensed Consolidated Financial Statements

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

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

See Notes to Condensed Consolidated Financial Statements

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

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

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

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

See Notes to Condensed Consolidated Financial Statements

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

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


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

(Increase) decrease in

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


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

See Notes to Condensed Consolidated Financial Statements

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)


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


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

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

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

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

Distributions to parent	(225)		—		(225)

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

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

Distributions to parent	(146)		—		(146)


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

See Notes to Condensed Consolidated Financial Statements

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)	2023		2022		2023		2022



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



Other Income and Expenses, net	17		13		49		41

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

See Notes to Condensed Consolidated Financial Statements

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, 2023		December 31, 2022
ASSETS
Current Assets

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

Inventory	88		172
Regulatory assets	120		119

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

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

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

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

Retained earnings	2,258		2,037

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

See Notes to Condensed Consolidated Financial Statements

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

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

Contributions to qualified pension plans	(3)		(2)

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

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






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

Notes payable to affiliated companies	(216)		(210)




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


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

See Notes to Condensed Consolidated Financial Statements

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




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

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





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

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







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

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




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

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, 2016.2022.

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

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

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

~~Certain prior year amounts have been reclassified to conform to the current year presentation.~~BASIS OF CONSOLIDATION

~~UNBILLED REVENUE~~

Revenues on sales of electricity 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 period as a result of seasonality, weather, customer usage patterns, customer mix, average price in effect for customer classes, timing 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) on the Condensed Consolidated Balance Sheets as shown in the following table.~~

(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~~These Condensed Consolidated Financial Statements ~~– (Unaudited) – (Continued)~~

~~Additionally,~~include, after eliminating intercompany transactions and balances, the accounts of the Duke Energy ~~Ohio~~Registrants and subsidiaries or VIEs where the respective Duke Energy ~~Indiana sell nearly all of their retail accounts receivable to an affiliate, Cinergy Receivables Company, LLC (CRC),~~Registrants have control. See Note 13 for additional information on ~~a revolving basis.~~VIEs. These ~~transfers of receivables are accounted for as sales and include receivables for unbilled revenues. Accordingly, the receivables sold are not reflected on the~~ Condensed Consolidated ~~Balance Sheets of~~Financial Statements also reflect the Duke Energy ~~Ohio~~Registrants’ proportionate share of certain jointly owned generation and transmission facilities.

Discontinued Operations

Duke Energy ~~Indiana. See Note~~ 13has elected to present cash flows of discontinued operations combined with cash flows of continuing operations. Unless otherwise noted, the notes to these condensed consolidated financial statements exclude amounts related to discontinued operations for ~~further information. These receivables for unbilled revenues are shown in the table below.~~

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

~~AMOUNTS ATTRIBUTABLE TO CONTROLLING INTERESTS~~

all periods presented. For the ~~three and~~ nine months ended September 30, ~~2017,~~2023, and 2022, the Loss ~~from~~(Income) From Discontinued Operations, net of tax on Duke Energy's Condensed Consolidated Statements of Operations includes amounts related to noncontrolling interests. A portion of Noncontrolling interests on Duke Energy's Condensed Consolidated Balance Sheets relates to discontinued operations for the periods presented. See Note 2 for discussion of discontinued operations related to the Commercial Renewables Disposal Groups.

NONCONTROLLING INTEREST

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


FINANCIAL STATEMENTS			ORGANIZATION AND BASIS OF PRESENTATION

CASH, CASH EQUIVALENTS AND RESTRICTED CASH

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


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

(a) Certain prior year balances have been adjusted for ~~continuing operations and discontinued operations~~held for ~~the three and nine months ended September 30, 2016.~~

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
sale presentation. See Note 2 for additional information.

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,~~2023, and December 31, ~~2016.~~2022. 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, 2023
			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	$	3,018	$	1,045	$	1,408	$	920	$	488	$	132	$	381	$	15
Coal	774		251		314		148		166		19		190		—		Coal	758		330		187		110		77		24		217		—
Natural gas, oil and other fuel	374		37		236		115		121		34		2		65		Natural gas, oil and other fuel	342		47		208		111		97		12		2		73
Total inventory	$	3,522	$	1,055	$	1,717	$	1,076	$	641	$	137	$	504	$	66	Total inventory	$	4,118	$	1,422	$	1,803	$	1,141	$	662	$	168	$	600	$	88

~~EXCISE TAXES~~


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

Certain excise taxes levied by state or local governments are required 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

~~NEW ACCOUNTING STANDARDS~~

The 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 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)~~

OTHER NONCURRENT ASSETS

Duke Energy, ~~has identified material revenue streams, which served as~~through a nonregulated subsidiary, was the ~~basis for accounting analysis and documentation~~winner of the ~~impact~~Carolina Long Bay offshore wind auction in May 2022 and recorded an asset of ~~this guidance on revenue recognition.~~$150 million related to the arrangement in Other within Other noncurrent assets. In November 2022, Duke Energy committed to a plan to sell the Commercial Renewables business segment, excluding the offshore wind contract for Carolina Long Bay, which was moved to the Electric Utilities and Infrastructure (EU&I) segment. See Notes 2 and 3 for further information.

ACCOUNTS PAYABLE

Duke Energy maintains a supply chain finance program (the “program”) with a global financial institution. The ~~accounting analysis included reviewing representative contracts~~program is voluntary and ~~tariffs for each material revenue stream. Most of~~allows Duke Energy suppliers, at their sole discretion, to sell their receivables from Duke Energy to the financial institution at a rate that leverages Duke Energy’s ~~revenue is expected~~credit rating and which may result in favorable terms compared to bethe rate available to the supplier on their own credit rating. Suppliers participating in ~~scope of~~ the ~~new guidance. The majority of our sales, including energy provided~~program determine at their sole discretion which invoices they will sell to ~~residential customers, are from tariff offerings that provide natural gas or electricity without a defined contractual term ("at-will"). For such arrangements,~~the financial institution. Duke Energy ~~expects that~~confirms invoices sold by suppliers under the ~~revenue from contracts with customers will be equivalent~~program to the ~~electricity or natural gas supplied~~financial institution and ~~billed~~pays the financial institution based on commercial terms negotiated between Duke Energy and the supplier regardless of program participation. Suppliers’ decisions on which invoices are sold do not impact Duke Energy’s payment terms. The commercial terms negotiated between Duke Energy and its suppliers are consistent regardless of whether the supplier elects to participate in ~~that period (including estimated billings). As such,~~the program. Duke Energy does not ~~expect that there will be a significant shift~~issue any guarantees with respect to the program and does not participate in negotiations between suppliers and 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,financial institution. Duke Energy does not ~~expect material changes~~have an economic interest in the supplier’s decision to participate in the ~~pattern of revenue recognition on the registrants~~. ~~In addition, the power~~program 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 ofreceives no interest, fees or 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 excludedbenefit from the ~~scope of this guidance and, therefore, will be accounted for and evaluated for separate presentation and disclosure under other relevant accounting guidance.~~financial institution based on supplier participation in the program.

~~Duke Energy continues to evaluate what information would be most useful for users of~~


FINANCIAL STATEMENTS			ORGANIZATION AND BASIS OF PRESENTATION

The following table represents 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.

~~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~~confirmed obligations 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~~2023, and 2022.


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

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

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

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

NEW ACCOUNTING STANDARDS

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

2. DISPOSITIONS

Sale of Commercial Renewables Segment

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

~~During~~Assets Held For Sale and Discontinued Operations

The utility-scale solar and wind group, the ~~nine months ended September 30, 2017, Piedmont recorded~~distributed generation group and the remaining assets (collectively, Commercial Renewables Disposal Groups) were classified as held for sale and as discontinued operations in the fourth quarter of 2022. Originally debt and the related restricted cash and interest rate swaps were not expected to transfer to a ~~$7 million software impairment resulting~~buyer but during the marketing process it was determined they would be included with the sale and were classified as held for sale in March 2023. As a result, adjustments were made to the December 31, 2022, Consolidated Balance Sheet to present debt and the related restricted cash and interest rate swaps as held for sale. No adjustments were made to the historical activity within the Consolidated Statements of Comprehensive Income, Consolidated Statements of Cash Flows or the Consolidated Statements of Changes in Equity. Unless otherwise noted, the notes to these consolidated financial statements exclude amounts related to discontinued operations for all periods presented.

No interest from ~~planned accounting system and process integration.~~corporate level debt was allocated to discontinued operations.

~~Pro Forma Financial Information~~


FINANCIAL STATEMENTS			DISPOSITIONS

The following ~~unaudited pro forma financial information reflects~~table presents the ~~combined results~~carrying values of ~~operations~~the major classes of Assets held for sale and Liabilities associated with assets held for sale included in Duke ~~Energy and Piedmont as if the merger had occurred as~~Energy's Consolidated Balance Sheets.


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

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

As of 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,~~2023, and December 31, 2022, the noncontrolling interest balance is $1.8 billion and $1.6 billion, 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~~Commercial Renewables Disposal ~~Group,~~Groups, which are included in (Loss) Income from Discontinued Operations, net of tax in Duke Energy's Consolidated Statements of Operations.


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


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


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

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


FINANCIAL STATEMENTS			DISPOSITIONS

The Commercial Renewables Disposal Groups' held for sale assets reflected pretax impairments of approximately $1.7 billion as of December 31, 2022, and an incremental pretax impairment of $220 million as of March 31, 2023. The final purchase and sale agreements were signed with Brookfield in June 2023 for the utility-scale solar and wind group and with ArcLight in July 2023 for the distributed generation group, and accordingly, in the second quarter of 2023, pretax impairments of approximately $1.2 billion were recorded to write-down the carrying amount of property, plant and equipment assets to the estimated fair value of the business, based on the expected selling price less estimated costs to sell. Pretax impairments of $169 million were recorded in the third quarter of 2023 reflecting closing-related adjustments for the transactions that closed and ongoing assessment of the estimated fair values of the remaining assets held for sale. The impairments were included in (Loss) Income from Discontinued Operations, net of tax, in Duke Energy's Condensed Consolidated Statements of ~~Operations. Interest expense directly associated with~~Operations and Comprehensive Income for the ~~International Disposal Group~~periods presented. The fair value was ~~allocated to discontinued operations. No interest~~primarily determined from ~~corporate level debt was allocated to discontinued operations.~~

purchase and sale agreements for the utility scale and distributed generation groups and discounted cash flow analysis for the remainder of the assets. The discounted cash flow model utilized Level 2 and Level 3 inputs. The fair value hierarchy levels are further discussed in Note 12. The impairments for the utility-scale and distributed generation assets were updated based on customary adjustments at closing, and will be updated, if necessary, for any post-closing adjustments. The carrying amounts for the remaining assets will be updated, if necessary, based on final disposition amounts.

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~~Duke Energy's Consolidated Statements of Cash Flows. The following table summarizes Duke Energy's cash flows from discontinued operations related to the ~~International~~Commercial Renewables Disposal ~~Group.~~

Groups.


					Nine Months Ended
	Nine Months Ended				September 30,
(in millions)	September 30, 2016			(in millions)	2023		2022
Cash flows provided by (used in):				Cash flows provided by (used in):
Operating activities	$	201		Operating activities	$	545	$	485
Investing activities	(35		)	Investing activities	(597)		(223)


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

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

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


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

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)~~	~~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~~


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

(a)EU&I includes $95 million ~~on a wholly owned non-contracted wind project. The impairment was~~ recorded within Impairment of assets and other charges and $16 million within Operations, maintenance and other on Duke ~~Energy’s~~Energy Carolinas' and Duke Energy Progress' Condensed Consolidated Statement of Operations related primarily to Duke Energy Carolinas' North Carolina rate case settlement and Duke Energy Progress' North Carolina rate case order. See Note 4 for additional information.

(b)EU&I includes $211 million recorded within Impairment of assets and other charges, $46 million within Operating revenues and $20 million within Noncontrolling Interests on the Condensed Consolidated Statements of ~~Operations. The charge represents the excess carrying value over the estimated fair value of the project, which was based on~~Operations related to a Level 3 Fair Value measurement that was determined from the income approach using discounted cash flows. The impairment was primarily due to the non-contracted wind project being located in a market that has experienced declining market pricing during 2017 and declining long-term forecasted energy and capacity prices, driven by low natural gas prices, additional renewable generation placed in service and lack of significant load growth.

~~During the three and nine months ended September 30, 2016,~~ Duke Energy ~~recorded an other than temporary impairment (OTTI) of certain Commercial Renewables wind project investments accounted~~Indiana Supreme Court ruling. See Note 4 for under the equity method. The $71 million pretax impairment was recorded within Equity in earnings (losses) of unconsolidated affiliates on Duke Energy's Condensed Consolidated Statements of Operations. The other than temporary decline in value 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 distributions to the class of investment owned by Duke Energy.additional information.

~~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~~EU&I 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.

GU&I. 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, 2023
	Electric		Gas		Total
	Utilities and		Utilities and		Reportable
(in millions)	Infrastructure		Infrastructure		Segments		Other		Eliminations		Total


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

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

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, 2022
	Electric		Gas		Total
	Utilities and		Utilities and		Reportable
(in millions)	Infrastructure		Infrastructure		Segments		Other		Total


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

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


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


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


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

~~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. 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~~Nuclear Station Subsequent License Renewal

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

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

On December ~~30, 2016,~~ 19, 2022, the NRC published a notice in the Federal Register that the NRC will conduct a limited scoping process to gather additional information necessary to prepare an environmental impact statement (EIS) to evaluate the environmental impacts at ONS during the SLR period. The NRC received comments from the EPA and the Petitioners and these comments identify 18 potential impacts that should be considered by the NRC in the EIS, which include, but are not limited to, climate change and flooding, environmental justice, severe accidents, and external events. The NRC has notified Duke Energy Carolinas that the draft EIS will now be issued in January 2024.

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

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

Duke Energy Carolinas and Duke Energy Progress ~~filed a joint petition with~~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 ~~NCUC seeking an accounting order authorizing deferral~~nuclear facilities during the second quarter of certain costs incurred in connection with federal and state environmental remediation requirements related to the permanent closure of ash basins and other ash storage units at coal-fired generating facilities that have provided or are providing generation to customers located in North Carolina. Initial comments were received in March 2017, and reply comments were filed on April 19, 2017. The NCUC has consolidated Duke Energy Carolinas' 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.2021. Duke Energy Carolinas and Duke Energy Progress cannot predict the outcome of ~~this matter.~~these additional relicensing proceedings.

Duke Energy Carolinas

~~2017~~2023 North Carolina Rate Case

On ~~August 25, 2017,~~January 19, 2023, Duke Energy Carolinas filed ana PBR application with the NCUC to request an increase in base rate retail revenues. The PBR Application included an MYRP to recover projected capital investments during the three-year MYRP period. In addition to the MYRP, the PBR Application included an Earnings Sharing Mechanism, Residential Decoupling Mechanism and Performance Incentive Mechanisms (PIMS) as required by HB 951. The application as originally filed requested an overall retail revenue increase of $501 million in Year 1, $172 million in Year 2 and $150 million in Year 3, for a ~~rate increase for retail customers~~combined total of ~~approximately $647~~$823 million, ~~which represents an approximate 13.6 percent increase in annual base revenues. The~~or 15.7%, by early 2026. The rate increase is driven primarily by ~~capital~~major transmission and distribution investments ~~subsequent to~~since the ~~previous base~~last rate case ~~including grid improvement projects,~~and projected in the MYRP, as well as investments in ~~customer service technologies, costs~~energy storage and solar assets included in the MYRP consistent with the Carolinas Carbon Plan (Carbon Plan). The Public Staff – North Carolina Utilities Commission (Public Staff) and intervenor testimony was filed on July 19, 2023, and Duke Energy Carolinas' rebuttal testimony was filed on August 4, 2023.

On August 22, 2023, Duke Energy Carolinas filed with the NCUC a partial settlement with the Public Staff in connection with its PBR application. The partial settlement includes, among other things, agreement on a substantial portion of ~~complying with coal combustion residuals (CCR) regulations and~~ the North Carolina ~~Coal Ash Management~~retail rate base for the historic base case of approximately $19.5 billion and all of the capital projects and related costs to be included in the three-year MYRP, including $4.6 billion (North Carolina retail allocation) projected to go in service over the MYRP period. Additionally, the partial settlement includes agreement, with certain adjustments, on depreciation rates, the recovery of grid improvement plan costs and PIMs, Tracking Metrics and the Residential Decoupling Mechanism under the PBR application. On August 28, 2023, Duke Energy Carolinas filed with the NCUC a second partial settlement with the Public Staff resolving additional issues, including the future treatment of nuclear production tax credits related to the Inflation Reduction Act, through a stand-alone rider that will provide the benefits to customers beginning January 1, 2025. As a result of ~~2014 (Coal Ash Act)~~the partial settlements, Duke Energy Carolinas recognized pretax charges of $59 million within Impairment of assets and other charges, which primarily related to certain COVID-19 deferred costs, and $8 million within Operations, maintenance and other, for the three and nine months ended September 30, 2023, on the Condensed Consolidated Statements of Operations. These partial settlements are subject to the review and approval of the NCUC.


FINANCIAL STATEMENTS			REGULATORY MATTERS

Remaining items litigated at the evidentiary hearing, which occurred August 28 to September 5, 2023, include ROE, capital structure, and recovery of ~~costs related~~the remaining COVID-19 deferred costs. Duke Energy Carolinas implemented interim rates, subject to ~~licensing~~refund, on September 1, 2023, and ~~development~~has requested permanent rates be effective by January 1, 2024. On October 13, 2023, the Public Staff filed supplemental testimony, and on October 23, 2023, the NCUC ordered the hearing to reconvene on October 30, 2023. Duke Energy Carolinas expects a decision on its application in this case in the fourth quarter of ~~the William States Lee III Nuclear Station (Lee Nuclear Station) discussed below. An evidentiary hearing is scheduled to begin on February 19, 2018.~~ this year. Duke Energy Carolinas cannot predict the outcome of this matter.

~~Lincoln County Combustion Turbine Addition~~

~~On June 12, 2017,~~ Duke Energy ~~Carolinas~~Progress

2022 North Carolina Rate Case

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

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

On August 18, 2023, the NCUC issued an order approving Duke Energy Progress' PBR Application, as modified by the partial settlements and the order, approving of an overall retail revenue increase of $233 million in Year 1, $126 million in Year 2 and $135 million in Year 3, for a combined total of $494 million. Key aspects of the order include the approval of North Carolina retail rate base for the historic base case of approximately $12.2 billion and capital projects and related costs to be included in the three-year MYRP, including $3.5 billion (North Carolina retail allocation) projected to go in service over the MYRP period. The order established an ROE of 9.8% based upon a capital structure of 53% equity and 47% debt and approved, ~~construction would begin in 2018~~ with ~~an extended commissioning~~certain adjustments, depreciation rates and ~~validation period from 2020-2024~~the recovery of grid improvement plan costs and ~~an estimated commercial operation date in 2024. An evidentiary hearing was held in August 2017. Briefs~~certain deferred COVID-related costs. Additionally, the Residential Decoupling Mechanism and ~~proposed orders~~PIMs were ~~filed~~approved as requested under the PBR Application and revised by the partial settlements. As a result of the order, Duke Energy Progress recognized pretax charges of $28 million within Impairment of assets and other charges, which primarily related to certain COVID-19 deferred costs, and $8 million within Operations, maintenance and other, for the three and nine months ended September 30, 2023, on the Condensed Consolidated Statements of Operations. Duke Energy Progress implemented interim rates, subject to refund, on June 1, 2023, and implemented revised Year 1 rates and the residential decoupling on October ~~9, 2017. A decision is expected by the end of 2017. Duke Energy Carolinas cannot predict the outcome of this matter.~~1, 2023.

~~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~~October 17, 2023, CIGFUR and ~~North Carolina~~Haywood 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) jointlyeach filed a Notice of Appeal ~~with~~and Exceptions to the Supreme Court of ~~Appeals of South Carolina (S.C. Court of Appeals) seeking~~North Carolina. Both parties are appealing certain matters that do not impact 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~~overall revenue requirement in the ~~U.S. Bankruptcy Court for~~rate case. Specifically, they are appealing the ~~Southern District of New York. On May 15, 2017,~~class subsidy reduction percentage, and CIGFUR is also appealing the ~~NCUC issued an order requiring Duke Energy Carolinas to provide information regarding potential impacts of~~Customer Assistance Program and the ~~Westinghouse bankruptcy on the Lee Nuclear Station, as well as Duke Energy Carolinas' plans for~~fuel 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, Duke Energy Progress~~allocation methodology. CIGFUR also filed ~~an application~~ with the NCUC a Motion for ~~a rate increase~~Reconsideration and Motion for ~~retail customers~~Stay with respect to those issues during the pendency of ~~approximately $477 million, which represents 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. appeal. Duke Energy Progress cannot predict the outcome of this matter.

2023 South Carolina Storm ~~Cost Deferral Filing~~Securitization

On ~~December 16, 2016,~~May 31, 2023, Duke Energy Progress filed a petition with the ~~NCUC~~PSCSC requesting an accounting order to defer certain costs incurred in connection with response to Hurricane Matthew and other significant storms in 2016. The final estimate of incremental operation and maintenance and capital costs of $116 million was filed withauthorization for the ~~NCUC in September 2017. On March 15, 2017, the NCUC Public Staff filed comments supporting deferral of a portion~~financing of Duke Energy ~~Progress’ requested amount.~~Progress' storm recovery costs in the amount of approximately $171 million, through securitization, due to storm recovery activities required as a result of the following storms: Pax, Ulysses, Matthew, Florence, Michael, Dorian, Izzy and Jasper. On September 8, 2023, Duke Energy Progress filed ~~reply comments~~a comprehensive settlement agreement with all parties on ~~April 12, 2017.~~all cost recovery issues raised in the storm securitization proceeding.

The evidentiary hearing occurred in early September 2023. On ~~July 10, 2017,~~September 20, 2023, the ~~NCUC consolidated Duke Energy Progress' storm deferral request into~~PSCSC approved the comprehensive settlement agreement and on October 13, 2023, the PSCSC issued its financing order. Duke Energy Progress ~~rate case docket for decision. See "2017 North Carolina Rate Case" for additional discussion.~~will proceed with structuring, marketing and pricing the storm recovery bonds and then seek PSCSC authorization to issue the bonds in the first half of 2024. Duke Energy Progress cannot predict the outcome of this matter.

~~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. On January 12, 2023, Duke Energy Progress ~~announced~~and the ORS, as well as other consumer, environmental, and industrial intervening parties, filed a ~~Western Carolinas Modernization Plan, which included retirement~~comprehensive Agreement and Stipulation of Settlement resolving all issues in the base rate proceeding. The major components of the ~~existing Asheville coal-fired plant,~~stipulation include:

•A $52 million annual customer rate increase prior to the ~~construction~~reduction from the accelerated return to customers of ~~two 280‑MW combined-cycle natural gas plants having dual fuel capability, with~~federal unprotected Property, Plant and Equipment related EDIT. After extending the ~~option~~remaining EDIT giveback to ~~build~~customers to 33 months, the net annual retail rate increase is approximately $36 million.

•ROE of 9.6% based on a ~~third natural gas simple cycle unit~~capital structure of 52.43% equity and 47.57% debt.

•Continuation of deferral treatment of coal ash basin closure costs. Supports an amortization period for remaining coal ash closure costs in ~~2023 based upon the outcome~~this rate case of initiatives to reduce the region's power demand. The plan also included upgrades to existing transmission lines and substations, installation of solar generation and a pilot battery storage project. These investments will be made within the next seven years. Duke Energy Progress ~~is also working~~agreed not to seek recovery of approximately $50 million of deferred coal ash expenditures related to retired sites in this rate case (South Carolina retail allocation).

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

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


FINANCIAL STATEMENTS			REGULATORY MATTERS

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

Duke Energy Florida

2021 Settlement Agreement

On January 14, 2021, Duke Energy Florida filed a Settlement Agreement (the “2021 Settlement”) with the ~~local natural gas distribution company~~FPSC. The parties to ~~upgrade~~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 ~~existing natural gas pipeline~~increase to ~~serve~~its base rates of an incremental $67 million in 2022, $49 million in 2023 and $79 million in 2024, subject to adjustment in the ~~natural gas plant.~~event of tax reform during the years 2021, 2022 and 2023. The Parties also agreed to an ROE band of 8.85% to 10.85% with a midpoint of 9.85% based on a capital structure of 53% equity and 47% debt. The ROE band can be increased by 25 basis points if the average 30-year U.S. Treasury rate increases 50 basis points or more over a six-month period in which case the midpoint ROE would rise from 9.85% to 10.10%. On July 25, 2022, this provision was triggered. Duke Energy Florida filed a petition with the FPSC on August 12, 2022, to increase the ROE effective August 2022 with a base rate increase effective January 1, 2023. The FPSC approved this request on October 4, 2022. The 2021 Settlement Agreement also provided that Duke Energy Florida will be able to retain $173 million of the expected Department of Energy (DOE) award from its lawsuit to recover spent nuclear fuel to mitigate customer rates over the term of the 2021 Settlement. Duke Energy Florida is permitted to recognize the $173 million into earnings through the approved settlement period. Duke Energy Florida settled the DOE lawsuit and received payment of approximately $180 million on June 15, 2022, of which the retail portion was approximately $154 million. The 2021 Settlement authorizes Duke Energy Florida to collect the difference between $173 million and the $154 million retail portion of the amount received through the capacity cost recovery clause. As of September 30, 2023, Duke Energy Florida has recognized $94 million into earnings. The remaining $79 million is expected to be recognized over the remainder of 2023 and 2024, while also remaining within the approved return on equity band.

The 2021 Settlement also contained a provision to recover or flow back the effects of tax law changes. As a result of the IRA enacted on August 16, 2022, Duke Energy Florida is eligible for Production Tax Credits (PTCs) associated with solar facilities placed in service beginning in January 2022. Duke Energy Florida filed a petition with the FPSC on October 17, 2022, to reduce base rates effective January 1, 2023, by $56 million to flow back the expected 2023 PTCs and to flow back the expected 2022 PTCs via an adjustment to the capacity cost recovery clause. On ~~March 28, 2016,~~December 14, 2022, the ~~NCUC~~FPSC 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~~ Duke Energy ~~Progress~~Florida's petition.

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

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

Clean Energy Connection

On July 1, 2020, Duke Energy Florida petitioned the FPSC for approval of a voluntary solar program. The program consists of 10 new solar generating facilities with combined capacity of approximately 750 MW. The program allows participants to support cost-effective solar development in Florida by paying a subscription fee based on per kilowatt subscriptions and receiving a credit on their bill based on the ~~future. On March 28, 2017, Duke Energy Progress filed an annual progress report for the construction~~actual generation associated with their portion of the ~~combined-cycle plants with the NCUC, with an~~solar portfolio. The estimated cost of ~~$893 million. Site preparation activities~~the 10 new solar generation facilities is approximately $1 billion and the projects are expected to be completed by the end of 2024. This investment will be included in base rates offset by the revenue from the subscription fees and the credits will be included for recovery in the fuel cost recovery clause. The FPSC approved the program in January 2021.

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

Storm Protection Plan

On April 11, 2022, Duke Energy Florida filed a Storm Protection Plan for approval with the FPSC. The plan, which covers investments for the ~~combined-cycle plants are underway~~2023-2032 time frame, reflects approximately $7 billion of capital investment in transmission and ~~construction of these plants is scheduled~~distribution meant to ~~begin in 2017,~~strengthen its infrastructure, reduce outage times associated with ~~an expected in-service date in late 2019.~~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 ~~Progress plans~~Florida’s plan with one modification to ~~file for future approvals related~~remove the transmission loop radially fed program, representing a reduction of approximately $80 million over the 10-year period starting in 2025. On December 9, 2022, the OPC filed a notice of appeal of this order to the ~~proposed solar generation and pilot battery storage project.~~

Florida Supreme Court. The ~~carrying value of the 376-MW Asheville coal-fired plant, including associated ash basin closure costs, of $405 million and $492 million is included in Generation facilities to be retired, net~~OPC's initial brief was filed on April 18, 2023. Duke Energy ~~Progress' Condensed Consolidated Balance Sheets as of September 30, 2017, and December 31, 2016, respectively.~~

~~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~~Florida filed its brief on July 17, 2023. The OPC's reply brief was filed on October 16, 2023. The OPC has filed a request for oral argument, but the Florida Supreme Court has yet to ~~Condensed Consolidated Financial Statements – (Unaudited) – (Continued)~~

rule on that request. Duke Energy Florida cannot predict the outcome of this matter.

~~Hurricane Irma Storm Damage~~


FINANCIAL STATEMENTS			REGULATORY MATTERS

Hurricanes Ian and Idalia

On September ~~2017, all~~28, 2022, much of Duke Energy Florida’s service territory was impacted by Hurricane ~~Irma,~~Ian, which caused significant damage resulting in ~~approximately 1.3~~more than 1.1 million ~~customers experiencing~~ outages. ~~Total storm restoration costs, including capital, are currently estimated at approximately $500 million. These estimates could change as~~ Duke Energy ~~Florida receives additional information on actual costs.~~Florida's September 30, 2023, Condensed Consolidated Balance Sheets includes an estimate of approximately $357 million in regulatory assets related to deferred Hurricane Ian storm costs consistent with the FPSC's storm rule. After depleting any existing storm reserves, which were approximately ~~$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~~filed its petition for cost recovery of various storms, including Hurricane Ian, and replenishment of the storm reserve on January 23, 2023, seeking recovery of $442 million, for recovery over 12 months beginning with the first billing cycle in April 2023. On March 7, 2023, the FPSC approved this request for interim recovery, subject to ~~make this petition by~~refund, and ordered Duke Energy Florida to file documentation of the ~~end~~total actual storm costs, once known. Duke Energy Florida filed documentation evidencing its total actual storm costs of ~~2017. At~~$431 million on September 29, 2023.

On August 30, 2023, Hurricane Idalia made landfall on Florida’s gulf coast, causing damage and impacting more than 200,000 customers across Duke Energy Florida's service territory. Duke Energy Florida's September 30, ~~2017, Duke Energy Florida's~~2023, Condensed Consolidated Balance Sheets ~~included~~includes an estimate of approximately ~~$400~~$96 million ~~of recoverable costs under the FPSC's storm rule~~ in ~~Regulatory~~regulatory assets ~~within Other Noncurrent Assets~~ related to deferred Hurricane ~~Irma~~Idalia storm ~~costs.~~costs consistent with the FPSC's storm rule. On October 16, 2023, Duke Energy Florida requested to combine the $92 million retail portion of the deferred estimated Hurricane Idalia costs with $74 million of costs projected to be collected after December 31, 2023, under the existing approved storm cost recovery and storm surcharge. This ~~amount is in addition~~$74 million of costs relates primarily to the approved ongoing replenishment of the storm ~~reserve replenishment discussed above as part of Duke Energy Florida's petition to the FPSC.~~

~~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,reserves. 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 asseeking recovery of ~~existing meters, impacts of potential tax reform, an electric vehicle charging station pilot program, as well as~~ the ~~termination of~~total $166 million over 12 months beginning with its first billing cycle in January 2024, replacing the ~~proposed Levy Nuclear Project discussed below. As part of the 2017 Settlement,~~previously approved storm cost recovery and storm surcharge. Duke Energy Florida ~~will not move forward with building~~cannot predict the ~~Levy nuclear plant and recorded an pretax impairment charge~~outcome of ~~approximately $135 million in third quarter 2017 to write off all unrecovered Levy Nuclear Project costs, including the COL.~~these matters.

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 2017.~~electric distribution base rates of approximately $55 million and an ROE of 10.3%. On September 19, 2022, Duke Energy Ohio ~~has requested~~filed a Stipulation and Recommendation with the PUCO, which includes an ~~estimated annual~~ increase in overall electric distribution base rates of approximately ~~$15~~$23 million and ~~a return~~an ROE of 9.5%. The stipulation is among all but one party to the proceeding. The PUCO issued an order on ~~equity of 10.4 percent.~~December 14, 2022, approving the Stipulation without material modification. Rates went into effect on January 3, 2023. The OCC filed an application ~~also includes requests to continue certain current riders~~for rehearing on January 13, 2023, arguing the Stipulation was unreasonable, discriminatory, and ~~establish new riders related to LED Outdoor Lighting Service and regulatory mandates.~~denied OCC due process. On ~~September 26, 2017,~~February 8, 2023, 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. Objections to~~granted the ~~staff report 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.~~OCC's application for rehearing for further consideration. Duke Energy Ohio cannot predict the outcome of this matter.

~~Natural Gas Pipeline Extension~~

Duke Energy Ohio is proposing to install a new natural gas pipeline in its Ohio service territory to increase system reliability and enable the retirement of older infrastructure. On January 20, 2017, 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 related to the pipeline route. If approved, construction of 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. Duke Energy Ohio has approximately $7 million included in Regulatory assets on its Condensed Consolidated Balance Sheets at September 30, 2017, for the book value 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 to Condensed Consolidated Financial Statements – (Unaudited) – (Continued)~~

~~Accelerated Natural Gas Service Line Replacement Rider~~

On January 20, 2015, Duke Energy Ohio filed an application for approval of an accelerated natural gas service line replacement program (ASRP). Under 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. Duke Energy Ohio's projected total capital 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

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 ~~28, 2014,~~27, 2020, Duke Energy Ohio filed an application for rehearing seeking clarification on the final true up and reconciliation process after 2020. On November 18, 2020, the PUCO issued an order replacing the cost cap previously imposed upon Duke Energy Ohio with a cap on shared savings recovery. On December 18, 2020, Duke Energy Ohio filed an additional application for rehearing challenging, among other things, the imposition of the cap on shared savings. On January 13, 2021, the application for rehearing was granted for further consideration.

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

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

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

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

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

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

On August 9, 2023, the PUCO issued its decision approving the Company’s request for recovery and final true up of energy efficiency program costs, lost distribution revenues and performance incentives ~~related to its energy efficiency~~from calendar years 2018 through 2020, resulting in $14 million of Regulated electric revenue on the Condensed Consolidated Statements of Operations for the three and ~~peak demand reduction programs. These programs are undertaken to comply with environmental mandates set forth~~nine months ended September 30, 2023, and resolving all outstanding issues in ~~Ohio law. The PUCO approved Duke Energy Ohio’s application but found that~~ these proceedings. Rates were revised effective September 1, 2023.


FINANCIAL STATEMENTS			REGULATORY MATTERS

Duke Energy Ohio 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 by 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 ~~intervenor. On January 6, 2016,~~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 ~~and~~is also seeking to adjust the caps on its CEP rider. The report of the Staff of the PUCO ~~Staff entered into a stipulation, pending the PUCO's approval,~~was issued on December 21, 2022, recommending an increase in natural gas base rates of $24 million to ~~resolve issues related~~$36 million, with an equity ratio of 52.32% and an ROE range of 9.03% to ~~performance incentives and the PUCO Staff audit of 2013 costs, among other issues. In December 2015, based upon the stipulation,~~10.04%. On April 28, 2023, Duke Energy Ohio ~~re-established~~filed a stipulation with all parties to the case except the OCC. In the stipulation, the parties agreed to approximately ~~$20~~$32 million in revenue increases with an equity ratio of 52.32% and an ROE of 9.6%, and adjustments to the ~~revenues~~CEP Rider caps. The stipulation was opposed by the OCC at an evidentiary hearing that ~~had been previously reversed.~~concluded on May 24, 2023. Initial briefs were filed June 16, 2023, and reply briefs were filed on July 14, 2023. On ~~October 26, 2016, the~~November 1, 2023, PUCO issued an order approving the stipulation ~~without modification. Intervenors requested a rehearing of the PUCO decision. In December 2016, the PUCO granted a rehearing for the purpose of further review.~~as filed. New rates went into effect November 1, 2023. Duke Energy Ohio cannot predict the outcome of this matter.

Duke Energy Kentucky Electric Base Rate Case

On ~~June 15, 2016,~~December 1, 2022, Duke Energy ~~Ohio~~Kentucky filed a rate case with the KPSC requesting an ~~application~~annualized increase in electric base rates of approximately $75 million and an ROE of 10.35%. This is an overall increase in rates of approximately 17.8%. The request for rate increase is driven by capital investments to strengthen the electricity generation and delivery systems along with adjusted depreciation rates for the East Bend and Woodsdale Combustion Turbine (CT) generation stations. Duke Energy Kentucky is also requesting approval for new programs for the benefit of customers and tariff updates, including a ~~three-year energy efficiency~~voluntary community-based renewable subscription program and ~~peak demand reduction portfolio~~two electric vehicle charging programs. Intervenor testimony was filed March 10, 2023, and rebuttal testimony was filed April 14, 2023. The Kentucky Attorney General recommended an increase of ~~programs. A stipulation~~$31 million and ~~modified stipulation were~~an ROE of 9.55%. An evidentiary hearing concluded on May 11, 2023, with simultaneous briefs filed June 9, 2023, and replies filed on December 22, 2016, and January 27, 2017, respectively. Under the terms of the stipulations, which included support 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.June 19, 2023. The ~~PUCO staff and one intervenor have proposed a cap on both program costs and shared savings. On September 27, 2017, the PUCO~~KPSC issued an order ~~approving~~on October 12, 2023, including a ~~modified stipulation.~~$48 million increase in base revenues, an ROE of 9.75% for electric base rates and 9.65% for electric riders and an equity ratio of 52.145%. The ~~modifications impose an annual cap~~Company's request to align the depreciation rates of ~~approximately $38 million on~~East Bend with a 2035 retirement date was denied and the KPSC ordered depreciation rates with a 2041 retirement date for the unit. The KPSC did approve the request to align the depreciation rates of Woodsdale CT with a 2040 retirement date and denied the voluntary community-based renewable subscription program ~~costs~~ and ~~shared savings incentives combined, but allowed for~~the two electric vehicle charging programs. On November 1, 2023, Duke Energy ~~Ohio to file~~Kentucky filed for ~~a waiver of costs in excess of~~rehearing requesting certain matters be reconsidered by the ~~cap in 2017. On October 12, 2017,~~KPSC. Duke Energy ~~Ohio filed a motion for a waiver for recovery of costs incurred in 2017 above the annual cap. Duke Energy Ohio~~Kentucky cannot predict the outcome of this matter.

~~2012 Natural Gas~~

Duke Energy Indiana

2019 Indiana Rate ~~Case/Manufactured Gas Plant Cost Recovery~~Case

On ~~November 13, 2013,~~July 2, 2019, Duke Energy Indiana filed a general rate case with the ~~PUCO~~IURC for a rate increase for retail customers of approximately $395 million. The rebuttal case, filed on December 4, 2019, updated the requested revenue requirement to result in a 15.6%, or $396 million, average retail rate increase, including the impacts of the utility receipts tax. On June 29, 2020, the IURC issued an order in the rate case approving a ~~settlement~~revenue increase of $146 million before certain adjustments and ratemaking refinements. The order approved Duke Energy ~~Ohio’s natural gas~~Indiana’s requested forecasted rate base of $10.2 billion as of December 31, 2020, including the Edwardsport Integrated Gasification Combined Cycle (IGCC) Plant. The IURC reduced Duke Energy Indiana’s request by slightly more than $200 million, when accounting for the utility receipts tax and other adjustments. Approximately 50% of the reduction was due to a prospective change in depreciation and use of regulatory asset for the end-of-life inventory at retired generating plants, approximately 20% was due to the approved ROE of 9.7% versus the requested ROE of 10.4% and approximately 20% was related to miscellaneous earnings neutral adjustments. Step one rates were estimated to be approximately 75% of the total and became effective on July 30, 2020. Step two rates estimated to be the remaining 25% of the total rate increase were approved on July 28, 2021, and implemented in August 2021.

Several groups appealed the IURC order to the Indiana Court of Appeals. The Indiana Court of Appeals affirmed the IURC decision on May 13, 2021. However, upon appeal by the Indiana Office of Utility Consumer Counselor (OUCC) and the Duke Industrial Group on March 10, 2022, the Indiana Supreme Court found that the IURC erred in allowing Duke Energy Indiana to recover coal ash costs incurred before the IURC’s rate case ~~and authorizing the recovery of~~order in June 2020. The Indiana Supreme Court found that allowing Duke Energy Indiana to recover coal ash costs incurred between ~~2008 and 2012~~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 ~~environmental investigation and remediation~~additional proceedings consistent with the Indiana Supreme Court’s opinion. As a result of ~~two former manufactured gas plant (MGP) sites. The PUCO order also authorized~~the court's opinion, Duke Energy ~~Ohio~~Indiana recognized pretax charges of approximately $211 million to ~~continue deferring MGP environmental investigation~~Impairment of assets and ~~remediation costs incurred subsequent~~other charges and $46 million to ~~2012 and to submit annual filings to adjust~~Operating revenues in the ~~MGP rider~~Condensed Consolidated Statements of Operations for ~~future costs. Intervening parties appealed this decision to~~ the ~~Ohio Supreme Court and on June 29, 2017, the Ohio Supreme Court issued its decision affirming the PUCO order. Appellants~~three months ended March 31, 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) 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.remand proceeding on August 18, 2022. On February 3, 2023, Duke Energy Indiana ~~has requested timely recovery~~filed a settlement agreement reached with the OUCC and Duke Industrial Group, which includes an agreed amount of approximately ~~$380~~$70 million of refunds to be paid to customers. The IURC approved this settlement agreement in ~~retail capital~~its entirety on April 12, 2023. In June of 2023, Duke Energy Indiana commenced refunding the approximate $70 million to customers in accordance with the settlement agreement.


FINANCIAL STATEMENTS			REGULATORY MATTERS

Indiana Coal Ash Recovery Cases

In Duke Energy Indiana’s 2019 rate case, the IURC also opened a subdocket for post-2018 coal ash related expenditures. Duke Energy Indiana filed testimony on April 15, 2020, in the coal ash subdocket requesting recovery for the post-2018 coal ash basin closure costs ~~including AFUDC, and recovery~~for plans that have been approved by the Indiana Department of ~~incremental operating and maintenance costs under a federal mandate tracker that provides for timely recovery of 80 percent of such costs and~~Environmental 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~~allowing recovery for post-2018 coal ash basin closure costs for the plans that have been approved by IDEM, as well as continuing deferral, with carrying costs, on the balance. The OUCC and the Duke Industrial Group appealed. The Indiana Court of Appeals issued its opinion on February 21, 2023, reversing the IURC's order to the extent that it allowed Duke Energy Indiana to recover federally mandated costs incurred prior to the IURC's November 3, 2021, order. In addition, the court found that any costs incurred pre-petition to determine federally mandated compliance options were not specifically authorized by the statute and ~~certain parties related to~~should also be disallowed. As a ~~proposed grid infrastructure improvement plan. The settlement agreement included~~result of the ~~removal of an AMI project and also provided for deferral accounting for depreciation and post-in-service carrying costs for AMI projects outside the plan.~~Court's opinion, Duke Energy Indiana ~~withdrew~~recognized a pretax charge of approximately $175 million to Impairment of assets and other charges for the year ended December 31, 2022. Duke Energy Indiana filed its ~~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~~proposal to ~~be filed~~remove from rates certain costs incurred prior to the ~~end~~IURC's November 3, 2021, order date. On September 20, 2023, the commission approved the Company's proposal to remove the costs from its rates and assessed simple interest of the ~~plan. During~~refunds of 4.71%, beginning from when the ~~third quarter of 2016,~~costs were initially recovered from customers. Duke Energy Indiana ~~decided to implement~~also filed a new petition under the ~~AMI project. This decision resulted in a pretax impairment charge related to existing or non-AMI meters~~amended version of ~~approximately $8 million~~the federal mandate statute for additional post-2018 coal ash closure costs 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) 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 isbasins 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 District 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~~2020 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 orderCoal Ash Recovery Case. An evidentiary hearing has been ~~appealed to the Indiana Court of Appeals.~~scheduled for January 25, 2024. Duke Energy Indiana cannot predict the outcome of this matter.

~~Piedmont~~TDSIC 2.0

~~South Carolina Rate Stabilization Adjustment Filing~~

On November 23, 2021, Duke Energy Indiana filed for approval of the Transmission, Distribution, Storage Improvement Charge 2.0 investment plan for 2023-2028 (TDSIC 2.0). On June 15, 2022, the IURC approved, without modification, TDSIC 2.0, which includes approximately $2 billion in transmission and distribution investments selected to improve customer reliability, harden and improve resiliency of the grid, enable expansion of renewable and distributed energy projects and encourage economic development. In ~~June 2017, Piedmont~~addition, the IURC set up a subdocket to consider the targeted economic development project, which the IURC approved on March 2, 2022. On July 15, 2022, the OUCC filed ~~with~~a notice of appeal to the ~~PSCSC under~~Indiana Court of Appeals in Duke Energy Indiana’s TDSIC 2.0 proceeding. An appellant brief was filed on October 28, 2022, and Duke Energy Indiana filed its responsive brief on December 28, 2022. The Indiana Court of Appeals issued its opinion on March 9, 2023, affirming the ~~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~~IURC’s 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. Terms of the settlement included implementation of rates for the 12-month period beginning November 2017 with a return on equity of 10.2 percent.

~~North Carolina Integrity Management Rider Filings~~

~~In October 2017, Piedmont~~entirety. The Duke Industrial Group filed a petition ~~under~~to transfer to the ~~Integrity Management Rider (IMR) mechanism to collect~~Indiana Supreme Court. The Indiana Supreme Court granted transfer and held an ~~additional $8.9 million in annual revenues, effective December 2017, based~~oral argument on ~~the eligible capital investments closed to integrity and safety projects over the six-month period ending~~ September ~~30, 2017. Piedmont~~28, 2023. Duke Energy Indiana cannot predict the outcome of this matter.

~~In May 2017,~~

Piedmont

Tennessee Annual Review Mechanism

On October 10, 2022, the TPUC approved Piedmont’s petition to adopt an ARM as allowed by Tennessee law. Under the ARM, Piedmont will adjust rates annually to achieve its allowed 9.80% ROE over the upcoming year and to true up any variance between its allowed ROE and actual ROE from the prior calendar year. The initial year subject to the true up is 2022, and Piedmont filed the initial rate adjustments request on May 19, 2023, for a total increase of approximately $42 million and for rates to become effective October 1, 2023. On September 11, 2023, the TPUC approved a settlement between Piedmont and the NCUC approved, a petition under the IMR mechanism 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 over the six-month period ending March 31, 2017.

~~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~~Consumer Advocate Division 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 requestTennessee Attorney General's Office, which provided 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 customersrecovery of the ~~Sabal Trail pipeline, Duke Energy Florida~~Historic Base Period Reconciliation cost of service of $11 million through rider rates 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~~increase in Piedmont's base rates of ~~FERC's CPCN orders to the U.S. Court of Appeals~~$29 million 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~~Annual Base Rate Reset component of the ~~Constitution pipeline. Constitution filed legal actions~~ARM. These amounts result in ~~the U.S. Court~~a total increase 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$40 million with adjusted rates effective October 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.2023.

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) 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 primarily because facilities do not have the requisite emission control equipment to meet EPA regulations recently approved or proposed.

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, and exclude capitalized asset retirement costs.

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)~~	~~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.~~


~~(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. 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~~on site conditions and location, remediation requirements, complexity and sharing of responsibility. If remediation activities involve joint and several liability provisions, strict liability, or cost recovery or contribution actions, the Duke Energy Registrants could potentially be held responsible for environmental impacts caused by other potentially responsible parties and may also benefit from insurance policies or contractual indemnities that cover some or all cleanup costs. Liabilities are recorded when losses become probable and are reasonably estimable. The total costs that may be incurred cannot be estimated because the extent of environmental impact, allocation among potentially responsible parties, remediation alternatives and/or regulatory decisions have not yet been determined at all sites. Additional costs associated with remediation activities are likely to be incurred in the future and could be significant. Costs are typically expensed as Operation, maintenance and other on the Condensed Consolidated Statements of Operations unless regulatory recovery of the costs is deemed probable.


FINANCIAL STATEMENTS			COMMITMENTS AND CONTINGENCIES

The following ~~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, 2023		December 31, 2022
Reserves for Environmental Remediation
Duke Energy	$	90	$	84
Duke Energy Carolinas	24		22
Progress Energy	20		19
Duke Energy Progress	10		8
Duke Energy Florida	10		11
Duke Energy Ohio	36		33
Duke Energy Indiana	2		3
Piedmont	7		7

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

Texas Storm Uri Tort Litigation

Duke Energy ~~no longer has exposure~~(Parent), several Duke Energy renewables project companies, and others in the ERCOT market were named in multiple lawsuits arising out of Texas Storm Uri, which occurred in February 2021. These lawsuits seek recovery for property damages, personal injury and wrongful death allegedly caused by the power outages that plaintiffs claim were the collective failure of generators, transmission and distribution operators (TDUs), retail energy providers, and all others, including ERCOT. The cases were consolidated into a Texas state court multidistrict litigation (MDL) proceeding for discovery and pre-trial motions. Five MDL cases were designated as lead cases in which motions to ~~litigation matters related~~dismiss were filed and all other cases were stayed. On January 28, 2023, the Court denied certain motions including those by the generator defendants and TDUs and granted others. The generators and TDUs filed petitions for Writ of Mandamus to the ~~International Disposal Group as~~Texas Court of Appeals seeking to overturn the denials. The TDUs' petition, filed first, was accepted and oral argument was held on October 23, 2023. The parties await a ~~result~~ruling from the court. The generators’ petition has not yet been set for argument. After the rulings on the motions to dismiss, plaintiffs filed new lawsuits against Duke Energy (Parent), Duke Energy Renewables, LLC, and several Duke Energy renewable entities, which are included in the MDL proceeding and are currently stayed. The plaintiffs have begun to dismiss Duke Energy (Parent) from these lawsuits and have represented to the court that they will dismiss Duke Energy (Parent) from all such cases. Duke Energy cannot predict the outcome of ~~the divestiture of the business in December 2016.~~this matter. See Note 2 for ~~additional~~more information related to the sale of ~~International Energy.~~the Commercial Renewables Disposal Groups.

~~Ash Basin Shareholder Derivative~~Duke Energy Carolinas

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

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

NTE Carolinas II, LLC Litigation

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 ReNovember 2017, Duke Energy ~~Corporation Coal Ash Derivative Litigation~~.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 ~~December 2, 2014, plaintiffs~~September 6, 2019, Duke Energy Carolinas filed a ~~Corrected Verified Consolidated Shareholder Derivative Complaint (Consolidated Complaint). The Consolidated Complaint names as defendants several current and former~~lawsuit in Mecklenburg County Superior Court against NTE for breach of contract, alleging that NTE's failure to pay benchmark payments for Duke Energy ~~officers and directors (collectively,~~Carolinas' transmission system upgrades required under the interconnection agreement constituted a termination of the interconnection agreement. Duke Energy ~~Defendants). Duke Energy is named as~~Carolinas sought a ~~nominal defendant.~~

~~The Consolidated Complaint alleges the Duke Energy Defendants breached their fiduciary duties by failing~~monetary judgment against NTE because NTE failed to ~~adequately oversee Duke Energy’s ash basins and that these breaches of fiduciary duty may have contributed to the incident at Dan River and continued thereafter.~~make multiple milestone payments. The lawsuit ~~also asserts claims against the Duke Energy Defendants for corporate waste (relating~~was moved to the money Duke Energy has spent and will spend as a result of the fines, penalties and coal ash removal) and unjust enrichment (relating to the compensation and director remuneration that was received despite these alleged breaches of fiduciary duty). The lawsuit seeks both injunctive relief against Duke Energy and restitution from the Duke Energy Defendants. On April 22, 2016, plaintiffs filed an Amended Verified Consolidated Shareholder Derivative Complaint (Amended Complaint) making the same allegations asfederal court in ~~the Consolidated Complaint. The Duke Energy Defendants~~North Carolina. NTE filed a motion to dismiss Duke Energy Carolinas’ complaint and brought counterclaims alleging anti-competitive conduct and violations of state and federal statutes. Duke Energy Carolinas filed a motion to dismiss NTE's counterclaims. Both NTE's and Duke Energy Carolinas' motions to dismiss were subsequently denied by the ~~Amended Complaint on~~court.

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


FINANCIAL STATEMENTS			COMMITMENTS AND CONTINGENCIES

Following completion of discovery, Duke Energy Carolinas filed a motion for summary judgment seeking a ruling in its favor as to some of its affirmative claims against NTE and to all of NTE’s counterclaims. On June ~~21, 2016. On December 14, 2016,~~24, 2022, the ~~Delaware Chancery Court entered~~court issued an order partially granting Duke Energy Carolinas' motion by dismissing ~~the Amended Complaint. Plaintiffs filed an appeal to the Delaware Supreme Court on January 9, 2017. Oral argument was held on September 27, 2017,~~NTE's counterclaims that Duke Energy Carolinas engaged in anti-competitive behavior in violation of state and ~~a decision is pending.~~

federal statutes. On October ~~30, 2015, shareholder Saul Bresalier filed a shareholder derivative complaint (Bresalier Complaint) in~~12, 2022, the U.S. District Court for the District of Delaware. The lawsuit alleges that several current and former Duke Energy officers and directors (Bresalier Defendants) breached their fiduciary duties in connection with coal ash environmental issues, the post-merger change in Chief Executive Officer (CEO) and oversight of political contributions. Duke Energy is named as a nominal defendant. The Bresalier Complaint contends that the appointed Demand Review Committee failed to appropriately consider the shareholder’s earlier demand for litigation and improperly decided not to pursue claims against the Bresalier Defendants. On March 30, 2017, the court granted Defendants’ Motion to Dismiss on the claims relating to coal ash environmental issues and political contributions. As discussed below,parties executed a settlement agreement ~~was approved for~~with respect to the ~~merger-related~~remaining breach of contract claims in the ~~Bresalier Complaint,~~litigation and ~~those claims were dismissed.~~a Stipulation of Dismissal was filed with the court on October 13, 2022. On ~~September 8, 2017, Bresalier~~November 11, 2022, NTE filed ~~a notice~~its Notice of ~~appeal~~Appeal to the U.S. Court of Appeals for the ~~Third~~Fourth Circuit ~~(Third Circuit Court) challenging~~as to 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~~District Court's summary judgment ruling in 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.~~Carolinas' favor on NTE's antitrust and unfair competition claims. Briefing on NTE's appeal was completed on June 30, 2023. The ~~Court also appointed a lead plaintiff and counsel~~oral argument has been scheduled for ~~plaintiffs and designated the case as~~ ~~In Re~~t December 7, 2023. Duke Energy ~~Corporation Derivative Litigation~~ (Merger Chancery Litigation). The lawsuit names as defendants the Legacy Duke Energy Directors. Duke Energy is named as a nominal defendant. The case alleges claims for breach of fiduciary duties of loyalty and care in connection with the post-merger change in CEO.

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

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

~~PART I~~

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

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

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

~~Price Reporting Cases~~

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

~~Duke Energy~~ Carolinas ~~and Duke Energy Progress~~

~~Coal Ash Insurance Coverage Litigation~~

In March 2017, Duke Energy Carolinas and Duke Energy Progress filed a civil action in North Carolina Superior Court against various insurance providers. The lawsuit seeks payment for coal ash-related liabilities covered by third-party liability insurance policies. The insurance policies were issued between 1971 and 1986 and provide third-party liability insurance for property damage. The civil action seeks damages for breach of contract and indemnification for costs arising from the Coal Ash Act and the EPA CCR rule at 15 coal-fired plants in North Carolina and South Carolina. Duke Energy Carolinas and Duke Energy Progress cannot predict the outcome of this matter.

~~NCDEQ State Enforcement Actions~~

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

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

The court issued orders in 2016 granting Motions for Partial Summary Judgment for seven of the 14 North Carolina plants named in the enforcement actions. The litigation is concluded for these seven plants. Litigation continues for the remaining seven plants. On February 13, 2017, the court issued an order denying motions for partial summary judgment brought by both the environmental groups and Duke Energy Carolinas and Duke Energy Progress. On March 15, 2017, Duke Energy Carolinas and Duke Energy Progress filed a Notice 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.

~~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~~$436 million at September 30, ~~2017,~~2023, and ~~$512~~$457 million at December 31, ~~2016.~~2022. These reserves are classified in Other within Other Noncurrent Liabilities and Other within Current Liabilities on the Condensed Consolidated Balance Sheets. These reserves are based ~~upon the minimum amount of the range of loss~~on Duke Energy Carolinas' best estimate for current and future asbestos claims through ~~2036,~~2043 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~~2043 related to such potential claims. It is possible Duke Energy Carolinas may incur asbestos liabilities in excess of the recorded reserves.

Duke Energy Carolinas has third-party insurance to cover certain losses related to asbestos-related injuries and damages above an aggregate self-insured retention. 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~~$572 million at September 30, ~~2017, and $587~~2023, and $595 million at December 31, ~~2016.~~2022. These amounts are classified in Other within Other Noncurrent Assets and Receivables within Current Assets on the Condensed Consolidated Balance Sheets. Any future payments up to the policy limit will be reimbursed by the third-party insurance carrier. Duke Energy Carolinas is not aware of any uncertainties regarding the legal sufficiency of insurance claims. Duke Energy Carolinas believes the insurance recovery asset is probable of recovery as the insurance carrier continues to have a strong financial strength rating.

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

Duke Energy ~~Florida~~Indiana

~~Class Action Lawsuit~~Coal Ash Insurance Coverage Litigation

~~On February 22, 2016, a lawsuit was filed in the U.S. District Court for the Southern District of Florida on behalf of a putative class of~~In June 2022, Duke Energy ~~Florida~~Indiana filed a civil action in Indiana Superior Court against various insurance companies seeking declaratory relief with respect to insurance coverage for coal combustion residuals-related expenses and ~~FP&L’s customers in Florida.~~liabilities covered by third-party liability insurance policies. The ~~suit alleges~~insurance policies cover the ~~State of Florida’s nuclear power plant cost recovery statutes (NCRS) are unconstitutional~~1969-1972 and ~~pre-empted by federal law. Plaintiffs claim they are entitled to repayment of all money paid by customers of~~1984-1985 periods and provide third-party liability insurance for claims and suits alleging property damage, bodily injury and personal injury (or a combination thereof). A trial date has not yet been set. On June 30, 2023, Duke Energy ~~Florida~~Indiana and ~~FP&L~~Associated Electric and Gas Insurance Services (AEGIS) reached a confidential settlement, the results of which were not material, and as a result, ofAEGIS was dismissed from the ~~NCRS,~~litigation on July 13, 2023. The lawsuit remains pending as ~~well as an injunction against any future charges under those statutes. The constitutionality of~~to the ~~NCRS has been challenged unsuccessfully in a number of prior cases on alternative grounds.~~other insurers, but is stayed until December 31, 2023, to allow for further settlement negotiations. Duke Energy Florida and FP&L filed motions to dismiss the complaint on May 5, 2016. On September 21, 2016, the Court granted the motions to dismiss with prejudice. Plaintiffs filed a motion for reconsideration, which was denied. On January 4, 2017, plaintiffs filed a notice of appeal to the Eleventh Circuit U.S. Court of Appeals. The appeal, which has been fully briefed, was heard on August 22, 2017, and a decision is pending. Duke Energy FloridaIndiana 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.

6. DEBT AND CREDIT FACILITIES

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


FINANCIAL STATEMENTS			DEBT AND CREDIT FACILITIES

SUMMARY OF SIGNIFICANT DEBT ISSUANCES

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


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



First Mortgage Bonds




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







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

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

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

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

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

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

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

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

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

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

Duke Energy (Parent) Convertible Senior Notes

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

Prior to the ~~"Available Credit Facilities" section below regarding amounts issued under~~close of business on the ~~Three Year Revolver~~business day immediately preceding January 15, 2026, the convertible notes will be convertible at the option of the holders when the following conditions are met:

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

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

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

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

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

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

$ 800
$ 900

$ 100

~~PART I~~

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

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

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


~~(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.

~~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 following tables include the components of net periodic other post-retirement benefit costs.~~

Three 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
Service cost $ 1
$ —
$ —
$ —
$ —
$ —
$ —
$ —
Interest cost on accumulated post-retirement benefit obligation 9
2
4
2
2
—
1
—
Expected return on plan assets (3 ) (2 ) —
—
—
—
—
—
Amortization of actuarial loss 2
—
5
3
2
—
—
—
Amortization of prior service credit (29 ) (2 ) (21 ) (14 ) (8 ) —
—
—
Net periodic other post-retirement benefit costs $ (20 ) $ (2 ) $ (12 ) $ (9 ) $ (4 ) $ —
$ 1
$ —

Three 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
Service cost $ —
$ —
$ 1
$ —
$ —
$ —
$ —
$ 1
Interest cost on accumulated post-retirement benefit obligation 9
2
4
2
3
—
1
—
Expected return on plan assets (2 ) (2 ) (1 ) —
—
—
—
—
Amortization of actuarial loss (gain) 2
—
5
3
2
(1 ) —
—
Amortization of prior service credit (35 ) (4 ) (26 ) (16 ) (8 ) —
(1 ) —
Net periodic other post-retirement benefit costs $ (26 ) $ (4 ) $ (17 ) $ (11 ) $ (3 ) $ (1 ) $ —
$ 1

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
Service cost $ 3
$ —
$ —
$ —
$ —
$ —
$ —
$ —
Interest cost on accumulated post-retirement benefit obligation 27
6
11
6
6
—
1
—
Expected return on plan assets (10 ) (6 ) —
—
—
—
—
—
Amortization of actuarial loss (gain) 6
(2 ) 15
9
6
(1 ) —
—
Amortization of prior service credit (87 ) (6 ) (63 ) (41 ) (23 ) —
—
—
Net periodic other post-retirement benefit costs $ (61 ) $ (8 ) $ (37 ) $ (26 ) $ (11 ) $ (1 ) $ 1
$ —

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
Service cost $ 2
$ —
$ 1
$ —
$ —
$ —
$ —
$ 1
Interest cost on accumulated post-retirement benefit obligation 26
6
11
6
6
1
3
1
Expected return on plan assets (9 ) (6 ) (1 ) —
—
—
(1 ) (1 )
Amortization of actuarial loss (gain) 5
(2 ) 16
9
7
(2 ) (1 ) —
Amortization of prior service credit (106 ) (10 ) (77 ) (50 ) (26 ) —
(1 ) —
Net periodic other post-retirement benefit costs $ (82 ) $ (12 ) $ (50 ) $ (35 ) $ (13 ) $ (1 ) $ —
$ 1

~~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)~~

~~DEFINED CONTRIBUTION RETIREMENT PLANS~~

~~EMPLOYEE SAVINGS PLANS~~

Duke Energy sponsors, and the Subsidiary Registrants participate in, employee savings plans that cover substantially all U.S. employees. The following table presents employer contributions made by Duke Energy and expensed by the Subsidiary Registrants.

Duke
Duke
Duke
Duke
Duke

Duke
Energy
Progress
Energy
Energy
Energy
Energy

(in millions) Energy
Carolinas
Energy
Progress
Florida
Ohio
Indiana
Piedmont
Three Months Ended September 30,
2017 $ 43
$ 14
$ 12
$ 9
$ 4
$ 1
$ 2
$ 2
2016 39
13
12
8
3
1
2
2
Nine Months Ended September 30,
2017 $ 147
$ 49
$ 42
$ 30
$ 13
$ 3
$ 7
$ 5
2016 130
44
39
27
11
3
6
5

~~MONEY PURCHASE PENSION PLAN~~

Duke Energy provides, and Piedmont participates in, the Money Purchase Pension (MPP) plan, which is a defined contribution pension plan that allows certain employees to direct investments and assume risk of investment returns. In January 2017, a $2 million contribution was made to the MPP plan.


FINANCIAL STATEMENTS			INCOME TAXES

17. INCOME TAXES

EFFECTIVE TAX RATES

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

Three Months Ended Nine Months Ended
September 30, September 30,
2017
2016
2017
2016
Duke Energy 27.6 % 34.0 % 30.4 % 31.7 %
Duke Energy Carolinas 32.9 % 34.3 % 34.1 % 34.4 %
Progress Energy 29.1 % 32.8 % 31.9 % 34.7 %
Duke Energy Progress 31.7 % 31.4 % 32.4 % 33.5 %
Duke Energy Florida 34.8 % 36.0 % 36.1 % 37.0 %
Duke Energy Ohio 33.3 % 36.8 % 34.4 % 32.5 %
Duke Energy Indiana 38.3 % 35.2 % 39.0 % 34.0 %
Piedmont^(a)
47.6 % 40.0 % 36.1 % 37.7 %

~~(a) Piedmont is in a net loss position for the three months ended September 30, 2017, and 2016.~~


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

The decrease in the ~~effective tax rate (ETR)~~ETR for Duke Energy for the three months ended September 30, ~~2017, is~~2023, was primarily due to ~~higher research credits,~~benefits associated with ongoing tax ~~benefits of legal entity restructuring and prior year unfavorable impacts of finalizing federal tax audits. The~~efficiency efforts, partially offset by a decrease in the ~~ETR for Duke Energy for~~amortization of excess deferred taxes. During the ~~nine months ended September 30, 2017, is primarily due to higher research credits, tax benefits~~third quarter of ~~legal entity restructuring and higher production tax credits~~2023, the Company evaluated the deductibility of certain items spanning periods currently open under federal statute, including items related to ~~wind projects placed in service; partially offset by lower investment tax credits due to lower solar investments.~~interest on company-owned life insurance. As a result of this analysis, the Company recorded a favorable adjustment of approximately $120 million.

The ~~decrease~~increase in the ETR for Duke Energy Carolinas for the ~~three months ended September 30, 2017, is primarily due to the favorable impact of research credits, provision to return true ups, and lower North Carolina corporate tax rates.~~

~~The decrease in the ETR for Progress Energy for the three and~~ nine months ended September 30, ~~2017, is~~2023, was primarily due to a decrease in the ~~favorable impact~~amortization of ~~research credits and lower North Carolina corporate tax rates.~~excess deferred taxes.

The decrease in the ETR for Duke Energy Progress for the ~~nine~~three months ~~ended~~ending September 30, ~~2017, is~~2023, was primarily due to the ~~favorable impact~~amortization of ~~research credits and~~excess deferred taxes in relation to lower ~~North Carolina corporate tax rates.~~pretax income.

The ~~decrease~~increase in the ETR for Duke Energy Florida for the three months ~~ended~~ending September 30, ~~2017, is~~2023, was primarily due to ~~the favorable impact of research credits.~~

~~The~~a decrease in the ~~ETR for Duke Energy Ohio for the three months ended September 30, 2017, is primarily due to the favorable impact~~amortization of ~~research~~excess deferred taxes, partially offset by an increase in production tax credits.

The increase in the ETR for Duke Energy Ohio for the nine months ended September 30, ~~2017, is~~2023, was primarily due to ~~an immaterial out~~a decrease in the amortization of ~~period adjustment~~excess deferred taxes related to the MGP Settlement recorded in the prior ~~year related to deferred tax balances associated with property, plant and equipment.~~year.

~~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 increase in the ETR for Duke Energy Indiana for the three months ended September 30, ~~2017, is~~2023, was primarily ~~due~~due to ~~state tax credits recorded~~the amortization of excess deferred taxes in ~~the prior year.~~ relation to higher pretax income.

The increase in the ETR for Duke Energy Indiana for the nine months ended September 30, ~~2017, is~~2023, was primarily due to ~~an immaterial out~~the coal ash impairment based on the Indiana Supreme Court Opinion and the associated amortization of ~~period adjustment~~excess deferred taxes recorded in the prior ~~year related to deferred tax balances associated with property, plant and equipment.~~year.

The increase in the ETR for Piedmont for the three months ended September 30, ~~2017, is~~2023, was primarily due to ~~favorable tax return true ups and lower North Carolina corporate tax rates~~the amortization of excess deferred taxes in relation to lower pretax losses.

The ~~decrease~~increase in the ETR for Piedmont for the nine months ended September 30, ~~2017, is~~2023, was primarily due to ~~favorable tax return true ups and lower North Carolina corporate tax rates.~~

~~TAXES ON FOREIGN EARNINGS~~

As of December 31, 2015, Duke Energy's intention was to indefinitely reinvest any future undistributed foreign earnings earned after December 31, 2014. In February 2016, Duke Energy announced it had initiated a ~~process to divest the International Disposal Group and, accordingly, no longer intended to indefinitely reinvest post-2014 undistributed foreign earnings. This change~~decrease in the ~~company's intent, combined with the extension~~amortization of ~~bonus depreciation by Congress in late 2015, allowed Duke Energy to more efficiently utilize foreign tax credits and reduce U.S.~~excess deferred tax liabilities associated with historical unremitted foreign earnings by approximately $95 million for the nine months ended September 30, 2016. Due to the classification of the International Disposal Group as discontinued operations, income tax amounts related to the International Disposal Group's foreign earnings are presented within (Loss) Income from Discontinued Operations, net of tax on the Condensed Consolidated Statements of Operations. See Note 2 for additional information related to the sale of the International Disposal Group.taxes.

18. SUBSEQUENT EVENTS

For information on ~~additional~~ subsequent events related to ~~business segments,~~dispositions, regulatory matters, commitments and contingencies, and ~~VIEs,~~debt and credit facilities, see Notes 3,2, 4, 5 and ~~13.~~6, respectively.

~~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,~~2023, 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, 2016.2022.

Executive Overview

~~Hurricane Irma~~Advancing Our Clean Energy Transformation

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

•In ~~September 2017, Hurricane Irma caused widespread damage~~November 2022, the Duke Energy Board of Directors approved pursuing the sale of the Commercial Renewables business, excluding the offshore wind contract for Carolina Long Bay. We entered into purchase and sale agreements with affiliates of Brookfield for the sale of the utility-scale solar and wind group in June 2023 and with affiliates of ArcLight for the distributed generation group in July 2023. Both transactions closed in October 2023. See Note 2 to the Condensed Consolidated Financial Statements, "Dispositions," for additional information.

•Renewable energy remains a critical component of our generation mix and we've continued to actively expand the use of these assets across our service territories. In June 2023, we announced an agreement with Ranger Power for up to 199 MW of solar power in Indiana. Pending regulatory approval, energy generated from this facility will be sold to Duke Energy Indiana and serve the ~~Southeast region, at its peak leaving approximately 1.3 million~~equivalent of roughly 35,000 homes. In July 2023, we announced a new utility-scale solar panel installation in Kentucky. Located on the rooftop of a facility owned by Amazon, the site complements our emerging solar portfolio in the state and demonstrates our commitment to furthering the clean energy goals of both the Company and our customers.

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

•In March 2023, Duke Energy Florida ~~customers without power.~~announced two new solar projects as part of Clean Energy Connection, the Company's community solar program. Once complete, each 74.9-MW solar facility will generate enough carbon-free electricity to power what would be the equivalent to around 23,000 homes. Additionally, in March 2023, Duke ~~Energy's restoration efforts in response to this devastating storm utilized a team~~Energy Florida announced its first floating solar array pilot. The project will feature more than 1,800 floating solar modules and occupy approximately 2 acres of ~~over 12,000 line and service crews and hundreds of employee volunteers. Storm restoration costs (including capital) for~~water surface on an existing cooling pond at the Duke Energy Hines Energy Complex in Bartow. The pilot is part of Duke Energy's Vision Florida ~~service territory are currently estimated at approximately $500 million. The vast majority~~program, which is designed to test innovative projects such as microgrids and battery energy storage, among others, to prepare the power grid for a clean energy future. We now operate 1,200 MW of ~~these costs have been deferred to the balance sheet for future recovery from customers~~solar in Florida, ~~per existing state statute. Lost revenues associated~~ with ~~Hurricane Irma were~~plans to continue adding approximately ~~$20~~300 MW a year going forward.

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


MD&A			DUKE ENERGY

Regulatory Activity. During the ~~third quarter of 2017.~~nine months ended September 30, 2023, we continued to monitor developments while moving our regulatory strategy forward. See Note 4 to the Condensed Consolidated Financial Statements, "Regulatory ~~Matters"~~Matters," for additional information.

~~Regulatory Activity~~

In•HB 951 provides the ~~third quarter~~framework for many of ~~2017,~~the benefits of modernized regulatory constructs in North Carolina under the direction of the NCUC including PBR and MYRP. Duke Energy ~~advanced regulatory activity underway~~Progress filed its first rate case utilizing these benefits, including both PBR and MYRP, in ~~multiple jurisdictions, achieving several~~North Carolina in October 2022, and reached partial settlements on key ~~milestones.~~matters in April and May 2023. In August 2023, the NCUC issued a constructive order approving these partial settlements and Duke Energy Progress' PBR Application with certain modifications, marking the first implementation of an MYRP under the performance-based regulations authorized by HB 951 in North Carolina. Duke Energy Progress implemented revised Year 1 rates and residential decoupling on October 1, 2023.

•In ~~August 2017,~~January 2023, Duke Energy Carolinas filed a rate case in North Carolina that also incorporated elements of PBR and MYRP as allowed under HB 951. In August 2023, we reached partial settlements on key matters with the Public Staff, subject to the approval of the NCUC. We expect an order from the NCUC on the Duke Energy Carolinas rate case in the fourth quarter of this year.

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

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

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

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

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

Matters Impacting Future Results

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

Regulatory Matters

Coal Ash Costs

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

Duke Energy Indiana has interpreted the Coal Combustion Residuals (CCR) rule to identify the coal ash basin sites impacted and has assessed the amounts of coal ash subject to the rule and a method of compliance. Interpretation of the requirements of the CCR rule is subject to further legal challenges and regulatory approvals, which could result in ~~new, highly efficient natural gas combined-cycle plants and other plant upgrades,~~additional coal ash basin closure ~~activities~~requirements, higher costs of compliance and ~~grid improvement projects. Hearings are scheduled to commence in February 2018.~~

~~In Florida,~~greater AROs. Additionally, Duke Energy ~~worked closely with stakeholders~~Indiana has retired facilities that are not subject to ~~build upon and extend~~ the ~~existing settlement agreement from 2013. In late August,~~CCR rule. Duke Energy ~~Florida reached a favorable agreement~~Indiana may incur costs at these facilities to comply 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,~~environmental regulations or to mitigate risks associated with on-site storage of coal ash. In January 2022, Duke Energy ~~Florida agreed~~Indiana received a letter from the EPA regarding application and interpretation of the CCR rule for some of the ash basins at its Gallagher Station. In response to ~~no longer recover any remaining costs associated with~~ the ~~canceled Levy Nuclear Project and as a result incurred a pretax impairment charge~~letter, Duke Energy Indiana has submitted revised closure plans for those basins to the Indiana Department of ~~$135 million during the third quarter.~~

~~See~~Environmental Management (IDEM). Those closure plans are pending review by IDEM. For more information, see Note 4 to the Condensed Consolidated Financial Statements, "Regulatory ~~Matters" for additional information.~~Matters."

~~2016 Acquisition~~Fuel Cost Recovery

As a result of ~~Piedmont Natural Gas~~

~~On October 3, 2016,~~rapidly rising commodity costs during 2022, including natural gas, fuel and purchased power prices in excess of amounts included in fuel-related revenues led to an increase in the under collection of fuel costs from customers in jurisdictions including Duke Energy ~~completed~~Carolinas, Duke Energy Progress and Duke Energy Florida. These amounts have been deferred in regulatory assets and have impacted 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~~flows of the ~~acquisition. The acquisition provides a foundation for~~registrants, including increased borrowings to temporarily finance related expenditures until recovery. Natural gas costs have stabilized in 2023 and the Duke Energy Registrants are making progress collecting deferred fuel balances. Regulatory filings have now been made for recovery of all remaining uncollected 2022 fuel costs. Across all jurisdictions, Duke Energy is currently on pace to ~~establish~~recover $1.7 billion of deferred fuel costs in 2023, and expects deferred fuel balances to be back in line with historical norms by the end of 2024.

Commercial Renewables

In November 2022, Duke Energy committed to a ~~broader, long-term strategic natural gas infrastructure growth platform~~plan to ~~complement~~sell the ~~existing natural gas pipeline investments~~Commercial Renewables Disposal Groups. The Commercial Renewables Disposal Groups were classified as held for sale and ~~regulated natural gas business~~as discontinued operations in the ~~Midwest.~~

fourth quarter of 2022. Duke Energy ~~incurred pretax nonrecurring transaction~~entered into purchase and ~~integration costs associated~~sale agreements with ~~the acquisition~~affiliates of ~~$23 million and $69 million~~Brookfield in June 2023 for the ~~three~~sale of the utility-scale solar and ~~nine months ended September 30, 2017, respectively,~~wind group and ~~$65 million and $256 million~~with affiliates of ArcLight in July 2023 for the ~~three~~distributed generation group. Both transactions closed in October 2023 and ~~nine months ended September 30, 2016, respectively. Acquisition-related costs in~~proceeds from the ~~prior year were principally due~~sales are expected to ~~losses on forward-starting interest rate swaps related to the acquisition financing of $22 million and $190 million~~be used for ~~the three 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."~~

debt avoidance. Duke Energy expects to ~~incur system integration and other acquisition-related transition costs, primarily through 2018, that are necessary to achieve certain anticipated cost savings, efficiencies and other benefits. See~~complete the disposition of the remaining assets by early 2024. For more information, see Note 2 to the Condensed Consolidated Financial Statements, ~~"Acquisitions and Dispositions,~~"Dispositions." ~~for additional information regarding the transaction.~~

~~PART I~~

~~2016 Sale of International Energy~~


MD&A			MATTERS IMPACTING FUTURE RESULTS

In ~~December 2016,~~February 2021, a severe winter storm impacted certain Commercial Renewables assets in Texas. Extreme weather conditions limited the ability for these solar and wind facilities to generate and sell electricity into the ERCOT market. Originally, Duke Energy ~~sold its Latin American generation businesses (International Disposal Group)~~(Parent) was named in ~~two separate transactions for a combined enterprise value~~multiple lawsuits arising out of ~~$2.4 billion. The transactions generated cash proceeds of $1.9 billion, excluding transaction costs, which were primarily used~~this winter storm, but the plaintiffs have begun to ~~reduce~~dismiss Duke Energy ~~holding company debt. Due~~(parent) from these lawsuits and have represented to the ~~transactions, results~~court that they will dismiss Duke Energy (Parent) from all such cases. The legal actions related to project companies in this matter transferred to affiliates of Brookfield in conjunction with the ~~International Disposal Group are classified as discontinued operations. See~~transaction closing in October 2023. For more information, see Note 25 to the Condensed Consolidated Financial Statements, ~~"Acquisitions~~"Commitments and ~~Dispositions"~~Contingencies."

Supply Chain

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

Goodwill

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

Other

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

Results of Operations

Non-GAAP Measures

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

Management evaluates financial performance in part based on non-GAAP financial measures, including adjusted earnings and adjusted ~~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~~ •For 2022, Regulatory Matters represents the net impact of charges related to ~~companywide initiatives, excluding merger integration,~~the 2022 Indiana Supreme Court ruling on coal ash, and for 2023, it primarily represents impairment charges related to ~~standardize processes~~Duke Energy Carolinas' North Carolina rate case settlement and ~~systems, leverage technology and workforce optimization.~~Duke Energy Progress' North Carolina rate case order.

Discontinued operations primarily includes the impairments on the sale of the Commercial Renewables ~~Impairments represents other-than-temporary~~business in the current year and ~~asset impairments.~~

~~Florida Settlement represents an impairment charge related to the Levy nuclear project based on a settlement agreement approved by regulators.~~

~~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 offrom Duke Energy's ~~financial performance during the period.~~Commercial Renewables Disposal Groups.

Three Months Ended September 30, ~~2017,~~2023, as compared to September 30, ~~2016~~2022

GAAP ~~Reported~~reported EPS was ~~$1.36~~$1.59 for the third quarter of ~~2017~~2023 compared to ~~$1.70 for~~$1.81 in the third quarter of ~~2016. The decrease in~~2022. In addition to the drivers below, GAAP ~~Reported~~reported EPS ~~was~~decreased primarily due to less favorable weather, an impairment at Duke Energy Florida and prior year income from discontinued operations including International Energy which was sold in 2016; partially offset by a lower effective tax rate, lower costs associated withimpairments on the ~~Piedmont acquisition and growth from investments.~~sale of the Commercial Renewables business.

As discussed above, management also evaluates financial performance based on adjusted ~~diluted~~ EPS. Duke Energy’s third quarter ~~2017~~2023 adjusted ~~diluted~~ EPS was ~~$1.59~~$1.94 compared to ~~$1.68~~$1.78 for the third quarter of ~~2016.~~ 2022. The increase in adjusted EPS was primarily due to ongoing tax efficiency efforts, growth from riders and other margin, rate case impacts and favorable weather, partially offset by higher interest expense and lower volumes.


MD&A			DUKE ENERGY

The following table reconciles non-GAAP measures, including adjusted ~~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,
	2023				2022
(in millions, except per share amounts)	Earnings		EPS		Earnings		EPS

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



Regulatory Matters(a)	84		0.11		—		—

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

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

~~PART I~~

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


~~(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 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~~

~~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,~~2023, as compared to September 30, ~~2016~~2022

~~Duke Energy's~~ GAAP Reported EPS was ~~$3.36~~$2.27 for the nine months ended September 30, ~~2017,~~2023, compared to ~~$3.44~~$4.03 for the nine months ended September 30, ~~2016. The decrease in GAAP Reported EPS was driven by less favorable weather compared~~2022. In addition to 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 lower costs associated withdrivers below, GAAP reported EPS decreased primarily due to impairments on the ~~Piedmont acquisition, lower severance charges, effective cost control and growth from investments.~~sale of the Commercial Renewables business.

As discussed above, management also evaluates financial performance based on adjusted ~~diluted~~ EPS. Duke Energy’s adjusted ~~diluted~~ EPS was $4.05 for the nine months ended September 30, ~~2017, was $3.63~~2023, compared to ~~$3.88~~$4.16 for the nine months ended September 30, ~~2016.~~ 2022. The decrease in adjusted EPS was primarily due to higher interest expense, unfavorable weather and lower volumes, partially offset by growth from riders and other margin, rate case impacts, lower operations and maintenance expense and ongoing tax efficiency efforts.

The following table reconciles non-GAAP measures, including adjusted ~~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


~~(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 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:~~


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




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

~~Lower regulated electric revenues due to unfavorable weather compared to the prior year;~~(a)In 2023, net of $27 million tax benefit. $95 within Impairment of assets 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.

~~Partially offset by:~~

~~Higher regulated electric revenues from increased pricing~~ other charges 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,~~$16 million within Operations, maintenance and ~~other expense,~~ other. In 2022, net of ~~amounts recoverable~~$80 million tax benefit. $211 million recorded within Impairment of assets and other charges, $46 million within Regulated electric (Operating revenues) and $20 million within Noncontrolling Interests.

(b)Recorded in ~~rates, at Electric Utilities~~(Loss) Income from Discontinued Operations, net of tax, and ~~Infrastructure resulting from ongoing cost efficiency efforts and lower year-to-date storm costs than the prior year;~~Net (Income) Loss Attributable to Noncontrolling Interests.

~~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~~be 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~~next 10 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.15 years.

Duke Energy is a party to multiple lawsuits and could be subject to fines and other penalties related to operations at certain North Carolina facilities with ash basins. The outcome 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 toIndiana has interpreted 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 portion of the incremental storm restoration costs incurred could result in an adverse impact on Electric Utilities and Infrastructure's financial position, results of operations and cash flows. See Note 4 to the Condensed Consolidated Financial Statements, “Regulatory Matters,” for additional information.

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 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~~rule to identify the coal ash basin sites impacted and has assessed the ~~Coal Ash Act, as well as~~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 ~~capital investments in generation, transmission~~compliance and ~~distribution systems and any increase in expenditures subsequent to previous rate cases. In March 2017,~~greater AROs. Additionally, Duke Energy ~~Ohio filed an electric distribution base rate case~~Indiana has retired facilities that are not subject to the CCR rule. Duke Energy Indiana may incur costs at these facilities to comply with environmental regulations or to mitigate risks associated with on-site storage of coal ash. In January 2022, Duke Energy Indiana received a letter from the EPA regarding application and ~~supporting testimony with~~interpretation of the ~~Public Utility Commission~~CCR rule for some of ~~Ohio (PUCO)~~the ash basins at its Gallagher Station. In response to the letter, Duke Energy Indiana has submitted revised closure plans for those basins to the Indiana Department of Environmental Management (IDEM). ~~Electric Utilities and Infrastructure's earnings could be impacted adversely if these rate increases~~Those closure plans are ~~delayed or denied~~pending review by ~~the KPSC, NCUC or PUCO. See~~IDEM. For more information, see Note 4 to the Condensed Consolidated Financial Statements, "Regulatory ~~Matters,~~Matters." ~~for additional information.~~

~~On August 29, 2017,~~Fuel Cost Recovery

As a result of rapidly rising commodity costs during 2022, including natural gas, fuel and purchased power prices in excess of amounts included in fuel-related revenues led to an increase in the under collection of fuel costs from customers in jurisdictions including Duke Energy ~~Florida filed a 2017 Second Revised~~Carolinas, Duke Energy Progress and ~~Restated Settlement Agreement (2017 Settlement)~~Duke Energy Florida. These amounts have been deferred in regulatory assets and have impacted the cash flows of the registrants, including increased borrowings to temporarily finance related expenditures until recovery. Natural gas costs have stabilized in 2023 and the Duke Energy Registrants are making progress collecting deferred fuel balances. Regulatory filings have now been made for recovery of all remaining uncollected 2022 fuel costs. Across all jurisdictions, Duke Energy is currently on pace to recover $1.7 billion of deferred fuel costs in 2023, and expects deferred fuel balances to be back in line with ~~the FPSC. The 2017 Settlement was approved~~historical norms by the ~~FPSC on~~end of 2024.

Commercial Renewables

In November 2022, Duke Energy committed to a plan to sell the Commercial Renewables Disposal Groups. The Commercial Renewables Disposal Groups were classified as held for sale and as discontinued operations in the fourth quarter of 2022. Duke Energy entered into purchase and sale agreements with affiliates of Brookfield in June 2023 for the sale of the utility-scale solar and wind group and with affiliates of ArcLight in July 2023 for the distributed generation group. Both transactions closed in October ~~25, 2017. See~~2023 and proceeds from the sales are expected to be used for debt avoidance. Duke Energy expects to complete the disposition of the remaining assets by early 2024. For more information, see Note 42 to the Condensed Consolidated Financial Statements, ~~“Regulatory Matters,”~~"Dispositions."


MD&A			MATTERS IMPACTING FUTURE RESULTS

In February 2021, a severe winter storm impacted certain Commercial Renewables assets in Texas. Extreme weather conditions limited the ability for ~~additional information about~~these solar and wind facilities to generate and sell electricity into the ~~2017 Settlement. In accordance~~ERCOT market. Originally, Duke Energy (Parent) was named in multiple lawsuits arising out of this winter storm, but the plaintiffs have begun to dismiss Duke Energy (parent) from these lawsuits and have represented to the court that they will dismiss Duke Energy (Parent) from all such cases. The legal actions related to project companies in this matter transferred to affiliates of Brookfield in conjunction with the ~~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~~transaction closing in October 2023. For more information, see Note 5 to the Condensed Consolidated Financial Statements, ~~“Commitments~~"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. Contingencies."

Supply Chain

In ~~September 2017, Hurricane Irma caused extensive damage and widespread power outages within the~~2023, Duke Energy ~~Florida service territory.~~has experienced modest improvement in the stability of the markets for key materials purchased and used by the Company. The Company continues to monitor developments, including proposed federal regulations, that could disrupt or impact the Company's supply chain and, as a result, may impact Duke Energy's future financial results or the achievement of its clean energy goals.

Goodwill

The Duke Energy ~~Florida has not completed the final accumulation~~Registrants performed their annual goodwill impairment tests as 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 classifiedAugust 31, 2023, 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. Seedescribed in Note ~~4, "Regulatory Matters,"~~8 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~~"Goodwill." As 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 resultAugust 31, 2023, all of Duke ~~Energy's acquisition of Piedmont on October 3, 2016,~~Energy Registrants' reporting units' estimated fair values materially exceeded the carrying values except for the ~~following:~~

~~Other Income and Expenses.~~ ~~The variance was driven primarily by increased investments~~GU&I reporting unit of Duke Energy Ohio. While no goodwill impairment charges were recorded 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~~third quarter 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~~2023, continued rising interest rates, and the related impact on the weighted average cost of capital, without timely or adequate updates to the regulated allowed return on equity or ~~failure to achieve the anticipated benefits~~deteriorating economic conditions impacting GU&I's future cash flows or equity valuations of ~~the Piedmont merger, including cost savings and growth targets,~~peer companies could ~~significantly~~ impact the estimated fair value of ~~reporting units in Gas Utilities~~GU&I, and ~~Infrastructure. In the event of a significant decline in the estimated fair value of the reporting units,~~ goodwill impairment charges could be ~~recorded.~~recorded in the future. The carrying value of goodwill within ~~Gas Utilities and Infrastructure~~GU&I for Duke Energy Ohio was approximately ~~$1,924~~$324 million atas of September 30, ~~2017.~~2023.

Other

Results of Operations

Non-GAAP Measures

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

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

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

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

Discontinued operations primarily includes the impairments on the sale of the Commercial Renewables

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
business in the current year and results from Duke Energy's Commercial Renewables Disposal Groups.

Three Months Ended September 30, ~~2017,~~2023, as ~~Compared~~compared to September 30, ~~2016~~2022

~~Commercial Renewables' results were impacted by lower investment tax credits (ITCs), higher interest expense~~GAAP reported EPS was $1.59 for the third quarter of 2023 compared to $1.81 in the third quarter of 2022. In addition to the drivers below, GAAP reported EPS decreased primarily due to impairments on ~~new debt financings and higher losses from Duke Energy's REC Solar investment. The following is a detailed discussion~~the sale of the ~~variance drivers by line item.~~Commercial Renewables business.

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

volumes.

~~PART I~~


MD&A			DUKE ENERGY

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


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

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



Regulatory Matters(a)	84		0.11		—		—

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

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

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

Nine Months Ended September 30, ~~2017,~~2023, as ~~Compared~~compared to September 30, ~~2016~~2022

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~~GAAP Reported EPS 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.”

The retired Beckjord generating station (Beckjord), a nonregulated facility retired during 2014, is not subject to the U.S. Environmental Protection Agency (EPA) rule related to the disposal of CCR from electric utilities. However, if costs are incurred as a result of environmental regulations or to mitigate risk associated with on-site storage of coal ash, the costs could have an adverse impact on Other's financial position, results of operations and cash flows.

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 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 )

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

The variance 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 earnings from 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."

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

The variance 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~~$2.27 for the nine months ended September 30, ~~2017, and 2016 and the Annual Report on Form 10-K for the year 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 sales2023, compared 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 to September 30, 2016~~

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

~~a $213 million decrease in retail sales, net of fuel revenues, due to less 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~~$4.03 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 42022. In addition to the ~~Condensed Consolidated Financial Statements, “Regulatory Matters” and Note 9 in~~drivers below, GAAP reported EPS decreased primarily due to impairments on the sale of the Commercial Renewables business.

As discussed above, management also evaluates financial performance based on adjusted EPS. Duke ~~Energy's Annual Report on Form 10-K for the year ended December 31, 2016, "Asset Retirement Obligations," for additional information.~~

~~PART I~~

On May 18, 2016, the 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 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. Duke Energy Carolinas' estimated 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 action methods are determined, the complexity of work and the amount of coal combustion material could be different than originally estimated and, therefore, could materially impact Duke Energy Carolinas' 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.

Duke Energy Carolinas is a party to multiple lawsuits and subject to fines and other penalties related to operations at certain North Carolina facilities with ash basins. The outcome of these lawsuits, fines and penalties could have an adverse impact on Duke Energy Carolinas’ financial position, results of operations and cash flows. See Note 5 to the Condensed Consolidated Financial Statements, “Commitments and Contingencies,” for additional information.

Duke Energy Carolinas filed a general rate case on August 25, 2017, to recover costs of complying with 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. Duke Energy Carolinas' earnings could be adversely impacted if the rate increase is delayed or denied by the NCUC.

~~PART I~~

~~PROGRESS ENERGY~~

~~Management’s Discussion and Analysis should be read in conjunction with the accompanying Condensed Consolidated Financial Statements and Notes~~Energy’s adjusted EPS was $4.05 for the nine months ended September 30, ~~2017, and 2016 and the Annual Report on Form 10-K for the year ended December 31, 2016.~~

~~Results of Operations~~

Nine Months Ended September 30,
(in millions) 2017
2016
Variance
Operating Revenues $ 7,435
$ 7,645
$ (210 )
Operating Expenses
Fuel used in electric generation and purchased power 2,588
2,832
(244 )
Operation, maintenance and other 1,650
1,699
(49 )
Depreciation and amortization 958
904
54
Property and other taxes 386
375
11
Impairment charges 137
4
133
Total operating expenses 5,719
5,814
(95 )
Gains on Sales of Other Assets and Other, net 19
18
1
Operating Income 1,735
1,849
(114 )
Other Income and Expenses 65
79
(14 )
Interest Expense 595
497
98
Income Before Income Taxes 1,205
1,431
(226 )
Income Tax Expense 384
496
(112 )
Net Income 821
935
(114 )
Less: Net Income Attributable to Noncontrolling Interests 7
8
(1 )
Net Income Attributable to Parent $ 814
$ 927
$ (113 )

~~Nine Months Ended September 30, 2017, as Compared~~2023, compared to ~~September 30, 2016~~

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

a $256 million decrease in fuel revenues due to lower retail sales and changes in generation mix at Duke Energy Progress, as well as decreased capacity rates to retail customers at Duke Energy Florida, partially offset by an increase in fuel rates to retail customers; and

~~a $132 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 at Duke Energy Florida.~~

~~Partially offset by:~~

an $81 million increase in retail pricing due to the base rate adjustment for the Osprey acquisition and the completion of the Hines Energy Complex Chiller Uprate Project, as well as the Duke Energy Progress South Carolina rate case; and

a $79 million increase in rider revenues related to energy efficiency programs at Duke Energy Progress, as well as nuclear asset securitization beginning in July 2016 and extended uprate project revenues beginning in 2017 at Duke Energy Florida.

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

a $244 million decrease in fuel expense primarily due to lower retail sales and changes in generation mix at Duke Energy Progress, as well as decreased purchased power and lower capacity costs, partially offset by higher generation and deferred fuel costs at Duke Energy Florida; and

a $49 million decrease in operation, maintenance and other expense due to lower storm restoration costs at Duke Energy Progress, lower planned outage costs and lower severance expenses, partially offset by higher storm restoration costs at Duke Energy Florida.

~~Partially offset by:~~

~~a $133 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~~

~~a $54 million increase in depreciation and amortization expense primarily due to nuclear regulatory asset amortization, as well as additional plant in service at Duke Energy Florida.~~

~~Interest Expense.~~ The variance was primarily due to higher debt outstanding, as well as interest charges on North Carolina fuel overcollections at Duke Energy Progress and lower debt returns driven by the CR3 regulatory asset debt return ending in June 2016 upon securitization at Duke Energy Florida.

~~PART I~~

~~Income Tax Expense.~~ ~~The variance was primarily due to a decrease in pretax income. The effective tax rates~~$4.16 for the nine months ended September 30, ~~2017, and 2016 were 31.9 percent and 34.7 percent, respectively.~~2022. The decrease in ~~the effective tax rate was primarily due to the favorable impact of research credits and lower North Carolina corporate tax rates.~~

~~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 Progress Energy’s 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.

On May 18, 2016, the 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 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. Progress Energy's estimated 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 action methods are determined, the complexity of work and the amount of coal combustion material could be different than originally estimated and, therefore, could materially impact Progress Energy'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.

Duke Energy Progress is a party to multiple lawsuits and subject to fines and other penalties related to operations at certain North Carolina facilities with ash basins. The outcome of these lawsuits, fines and penalties could have an adverse impact on Progress Energy’s financial position, results of operations and cash flows. See Note 5 to the Condensed Consolidated Financial Statements, “Commitments and Contingencies,” for additional information.

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 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 portion of the incremental storm restoration costs incurred could result in an adverse impact on Progress Energy's financial position, results of operations and cash flows.

Duke Energy Progress filed a general rate case with the NCUC on June 1, 2017. Duke Energy Progress will seek to recover costs of complying with 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. Progress Energy's earnings could be adversely impacted if the rate increase is delayed or denied by the NCUC.

On August 29, 2017, Duke Energy Florida filed the 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 additional 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 Duke Energy Florida’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.

~~PART I~~

~~DUKE ENERGY PROGRESS~~

Management’s Discussion and Analysis should be read in conjunction with the accompanying Condensed Consolidated Financial Statements and Notes for the nine months ended September 30, 2017, and 2016 and the Annual Report on Form 10-K for the year ended December 31, 2016.

~~Results of Operations~~

Nine Months Ended September 30,
(in millions) 2017
2016
Variance
Operating Revenues $ 3,878
$ 4,103
$ (225 )
Operating Expenses
Fuel used in electric generation and purchased power 1,214
1,441
(227 )
Operation, maintenance and other 1,032
1,067
(35 )
Depreciation and amortization 536
526
10
Property and other taxes 120
119
1
Impairment charges —
1
(1 )
Total operating expenses 2,902
3,154
(252 )
Gains on Sales of Other Assets and Other, net 3
2
1
Operating Income 979
951
28
Other Income and Expenses 47
47
—
Interest Expense 217
188
29
Income Before Income Taxes 809
810
(1 )
Income Tax Expense 262
271
(9 )
Net Income $ 547
$ 539
$ 8

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 period~~	~~2017~~
~~Residential sales~~	~~(4.6~~	)%
~~General service sales~~	~~(2.0~~	)%
~~Industrial sales~~	~~0.5~~	%
~~Wholesale power sales~~	~~(5.6~~	)%
~~Joint dispatch sales~~	~~(35.3~~	)%
~~Total sales~~	~~(7.4~~	)%
~~Average number of customers~~	~~1.3~~	%

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

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

~~a $242 million decrease in fuel revenues due to lower retail sales and changes in generation mix; and~~

~~a $73 million decrease in retail sales, net of fuel revenues, due to less favorable weather in the current year.~~

~~Partially offset by:~~

~~a $41 million increase in rider revenues primarily due to energy efficiency programs;~~

~~a $29 million increase in retail pricing due to the Duke Energy Progress South Carolina rate case;~~

~~a $21 million increase in wholesale power revenues, net of fuel, primarily due to higher peak demand.~~

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

~~a $227 million decrease in fuel expense primarily due to lower retail sales and changes in generation mix; and~~

~~a $35 million decrease in operation, maintenance and other expense primarily due to lower storm restoration costs.~~

~~Interest Expense.~~ ~~The increase~~adjusted EPS was primarily due to higher ~~debt outstanding, as well as~~ interest ~~charges on North Carolina fuel overcollections.~~

~~Income Tax Expense.~~ ~~The variance was primarily due to the favorable impact of research credits~~expense, unfavorable weather and lower ~~North Carolina corporate tax rates~~. The effective tax rates for the nine months ended September 30, 2017, and 2016 were 32.4 percent and 33.5 percent, respectively. The decrease in the effective tax rate was primarily due to the favorable impact of research credits and lower North Carolina corporate tax rates.

~~PART I~~

~~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 Progress’ 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.

On May 18, 2016, the 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 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. Duke Energy Progress' estimated 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 action methods are determined, the complexity of work and the amount of coal combustion material could be different than originally estimated and, therefore, could materially impact Duke Energy Progress' 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.

Duke Energy Progress is a party to multiple lawsuits and subject to fines and other penalties related to operations at certain North Carolina facilities with ash basins. The outcome of these lawsuits, fines and penalties could have an adverse impact on Duke Energy Progress’ financial position, results of operations and cash flows. See Note 5 to the Condensed Consolidated Financial Statements, “Commitments and Contingencies,” for additional information.

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 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 portion of the incremental storm restoration costs incurred could result in an adverse impact on Duke Energy Progress' financial position, results of operations and cash flows.

Duke Energy Progress filed a general rate case with the NCUC on June 1, 2017. Duke Energy Progress will seek to recover costs of complying with 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. Duke Energy Progress' earnings could be adversely impacted if the rate increase is delayed or denied by the NCUC.

~~PART I~~

~~DUKE ENERGY FLORIDA~~

~~Results of Operations~~

Nine Months Ended September 30,
(in millions) 2017
2016
Variance
Operating Revenues $ 3,551
$ 3,538
$ 13
Operating Expenses
Fuel used in electric generation and purchased power 1,374
1,391
(17 )
Operation, maintenance and other 610
623
(13 )
Depreciation and amortization 423
378
45
Property and other taxes 265
256
9
Impairment charges 137
4
133
Total operating expenses 2,809
2,652
157
Operating Income 742
886
(144 )
Other Income and Expenses 45
30
15
Interest Expense 211
143
68
Income Before Income Taxes 576
773
(197 )
Income Tax Expense 208
286
(78 )
Net Income $ 368
$ 487
$ (119 )

The following table shows the percent changes in GWh sales and average number of customers. The percentages for retail customer classes represent billed sales only. Wholesale power sales include both billed and unbilled sales. Total sales includes billed and unbilled retail sales, and wholesale sales to incorporated municipalities, public and private utilities and power marketers. Amounts are not weather-normalized.



~~Increase (Decrease) over prior period~~	~~2017~~
~~Residential sales~~	~~(3.6~~	)%
~~General service sales~~	~~(1.3~~	)%
~~Industrial sales~~	~~(1.4~~	)%
~~Wholesale and other~~	~~18.5~~	%
~~Total sales~~	~~(1.2~~	)%
~~Average number of customers~~	~~1.5~~	%

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

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

~~a $52 million increase in retail pricing primarily due to the base rate adjustment for the Osprey acquisition and the completion of the Hines Energy Complex Chiller Uprate Project;~~

~~a $38 million increase in rider revenues primarily due to nuclear asset securitization beginning in July 2016 and extended power uprate project revenues beginning in 2017; and~~

~~a $30 million increase in weather-normal sales volumes to retail customers in the current year.~~

~~Partially offset by:~~

~~a $59 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;~~

~~a $31 million decrease in wholesale power revenues primarily due to contracts that expired in the prior year; and~~

~~a $14 million decrease in fuel and capacity revenues primarily due to a decrease in capacity rates to retail customers, partially offset by an increase in fuel rates to retail customers.~~

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

~~a $133 million increase in impairment charges primarily due to the write-off of remaining unrecovered Levy Nuclear Project costs in the current year; and~~

~~a $45 million increase in depreciation and amortization expense primarily due to nuclear regulatory asset amortization, as well as additional plant in service.~~

~~PART I~~

~~Partially offset by:~~

~~a $17 million decrease in fuel expense primarily due to decreased purchased power and lower capacity costs, partially offset by higher generation and deferred fuel costs; and~~

a $13 million decrease in operation, maintenance and other expense primarily due to lower planned outage costs and lower severance expenses, partially offset by higher storm restoration costs in the current year.

~~Other Income and Expenses.~~ ~~The variance was driven by higher AFUDC equity.~~

~~Interest Expense.~~ ~~The variance was primarily due to higher debt outstanding and lower debt returns driven by the 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. The effective tax rates for the nine months ended September 30, 2017, and 2016 were 36.1 percent and 37.0 percent, respectively.~~

~~Matters Impacting Future Results~~

~~PART I~~

~~DUKE ENERGY OHIO~~

~~Results of Operations~~

Nine Months Ended September 30,
(in millions) 2017
2016
Variance
Operating Revenues
Regulated electric $ 1,036
$ 1,053
$ (17 )
Regulated natural gas 360
358
2
Nonregulated electric and other 30
22
8
Total operating revenues 1,426
1,433
(7 )
Operating Expenses
Fuel used in electric generation and purchased power – regulated 283
340
(57 )
Fuel used in electric generation and purchased power – nonregulated 42
37
5
Cost of natural gas 69
64
5
Operation, maintenance and other 385
367
18
Depreciation and amortization 193
175
18
Property and other taxes 204
195
9
Impairment charges 1
—
1
Total operating expenses 1,177
1,178
(1 )
Gains on Sales of Other Assets and Other, net 1
2
(1 )
Operating Income 250
257
(7 )
Other Income and Expenses 12
6
6
Interest Expense 67
63
4
Income from Continuing Operations Before Income Taxes 195
200
(5 )
Income Tax Expense from Continuing Operations 67
65
2
Income from Continuing Operations 128
135
(7 )
(Loss) Income from Discontinued Operations, net of tax (1 ) 36
(37 )
Net Income $ 127
$ 171
$ (44 )

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~~	~~(5.8~~	)%
~~General service sales~~	~~(3.2~~	)%
~~Industrial sales~~	~~(1.3~~	)%
~~Wholesale power sales~~	~~127.3~~	%
~~Total sales~~	~~(2.5~~	)%
~~Average number of customers~~	~~0.8~~	%

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

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

~~a $59 million decrease in fuel revenues primarily due to lower electric fuel prices and sales~~ volumes, partially offset by ~~higher costs passed through to natural gas customers due to higher natural gas prices; and~~

~~a $16 million decrease in electric retail sales, net of fuel revenues, due to less favorable weather in the current year.~~

~~Partially offset by:~~

a $40 million increase in rider revenues primarily due to energy efficiency programs and a rate increase for the distribution capital investment rider, partially offset by a decrease in the percentage of income payment plan rider due to a rate decrease;

~~a $17 million increase in PJM Interconnection, LLC (PJM) transmission revenues; and~~

~~a $9 million increase in other revenues related to OVEC.~~

~~PART I~~

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

~~an $18 million increase in operation, maintenance~~growth from riders and other ~~expense due to higher energy efficiency program costs and higher transmission and distribution operations costs;~~

~~an $18 million increase in depreciation and amortization expense due to additional plant in service and a true up related to Smart Grid assets in the prior year;~~

~~a $9 million increase in property and other taxes primarily due to higher property taxes;~~

~~a $5 million increase in nonregulated fuel expenses related to OVEC; and~~

~~a $5 million increase in natural gas costs due to higher natural gas prices.~~

~~Partially offset by:~~

~~a $57 million decrease in fuel expense driven by~~margin, rate case impacts, lower ~~sales volumes and lower electric fuel costs.~~

~~Other Income and Expenses.~~ ~~The increase was primarily driven by higher AFUDC equity.~~

~~Interest Expense.~~ ~~The increase was primarily driven by interest related to new debt issued in June 2016.~~

~~Discontinued Operations, Net of Tax.~~ ~~The variance was driven by a prior year income tax benefit resulting from immaterial out of period deferred tax liability adjustments related to the Midwest Generation Disposal Group.~~

~~Matters Impacting Future Results~~

~~An order from regulatory authorities disallowing recovery of costs related to closure of ash basins could have an adverse impact on Duke Energy Ohio's financial position, results of~~ operations and ~~cash flows. See Note 4 to the Condensed Consolidated Financial Statements, “Regulatory Matters”~~maintenance expense 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.~~ongoing tax efficiency efforts.

Duke Energy Ohio’s nonregulated Beckjord station, a facility retired during 2014, is not subject to the EPA rule related to the disposal of CCR from electric utilities. However, if costs are incurred as a result of environmental regulations or to mitigate risk associated with on-site storage of coal ash at the facility, the costs could have an adverse impact on Duke Energy Ohio's financial position, results of operations and cash flows.

Duke Energy Ohio has a 9 percent ownership interest in OVEC, which owns 2,256 MW of coal-fired generation capacity. As a counterparty to an 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.

On March 2, 2017, Duke Energy Ohio filed an electric distribution base rate application with the PUCO to address recovery of electric distribution system capital investments and any increase in expenditures subsequent to previous rate cases. The application also includes requests to continue certain current riders and establish new riders related to LED Outdoor Lighting Service and regulatory mandates. Duke Energy Ohio's earnings could be adversely impacted if the rate case and requested riders are delayed or denied by the PUCO. See Note 4 to the Condensed Consolidated Financial Statements, "Regulatory Matters," for additional information.

On September 1, 2017, Duke Energy Kentucky filed a base rate case with the KPSC to recover costs of capital investments in generation, transmission and distribution systems and to recover other incremental expenses since its last rate case filed in 2006. Duke Energy Kentucky’s earnings could be adversely impacted if the rate increase is delayed or denied by the KPSC.

~~PART I~~

~~DUKE ENERGY INDIANA~~

~~Results of Operations~~

Nine Months Ended September 30,
(in millions) 2017
2016
Variance
Operating Revenues $ 2,302
$ 2,225
$ 77
Operating Expenses
Fuel used in electric generation and purchased power 744
690
54
Operation, maintenance and other 541
526
15
Depreciation and amortization 336
345
(9 )
Property and other taxes 56
67
(11 )
Impairment charges —
8
(8 )
Total operating expenses 1,677
1,636
41
Gains on Sales of Other Assets and Other, net 1
—
1
Operating Income 626
589
37
Other Income and Expenses 27
15
12
Interest Expense 132
136
(4 )
Income Before Income Taxes 521
468
53
Income Tax Expense 203
159
44
Net Income $ 318
$ 309
$ 9

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 salesreconciles non-GAAP measures, including adjusted EPS, to ~~incorporated municipalities, public and private utilities and power marketers. Amounts are not weather-normalized.~~

their most directly comparable GAAP measures.



~~Increase (Decrease) over prior year~~	~~2017~~
~~Residential sales~~	~~(5.5~~	)%
~~General service sales~~	~~(2.5~~	)%
~~Industrial sales~~	~~0.1~~	%
~~Wholesale power sales~~	~~(19.8~~	)%
~~Total sales~~	~~(6.2~~	)%
~~Average number of customers~~	~~0.8~~	%


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




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

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

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

~~a $64 million increase in rider revenues related to the Edwardsport IGCC plant and energy efficiency programs; and~~

~~a $47 million increase in fuel revenues primarily due to higher purchased power costs passed through to customers and higher financial transmission right (FTR) revenues.~~

~~Partially offset by:~~

~~an $18 million decrease in retail sales due to less favorable weather in the current year; and~~

~~a $15 million decrease in wholesale power revenues,~~(a)In 2023, net of ~~fuel, primarily due to a decrease in demand rates and contracts that expired in the current year.~~

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

~~a $54~~$27 million ~~increase in fuel and purchased power expense, primarily due to higher purchased power volumes and prices; and~~

~~a $15 million increase in operation, maintenance and other expense due to growth in energy efficiency programs and higher transmission costs.~~

~~Partially offset by:~~

~~an $11 million decrease in property and other taxes primarily due to utilization~~tax benefit. $95 within Impairment of ~~ITCs;~~

a $9 million decrease in depreciation and amortization primarily due to the 2017 deferral of certain asset retirement obligations and the completion of the amortization of a regulated asset for costs associated with the termination of a gasification services agreement in 2000, partially offset by new IGCC rider rates that result in a lower deferral amount and higher depreciation due to additional plant in service; and

~~PART I~~

~~an $8 million decrease in impairments~~assets and other charges ~~primarily due~~and $16 million within Operations, maintenance and other. In 2022, net of $80 million tax benefit. $211 million recorded within Impairment of assets and other charges, $46 million within Regulated electric (Operating revenues) and $20 million within Noncontrolling Interests.

(b)Recorded in (Loss) Income from Discontinued Operations, net of tax, and Net (Income) Loss Attributable to ~~the early retirement of certain metering equipment in the prior year~~.

Noncontrolling Interests.

~~Other Income and Expenses.~~ ~~The increase was primarily driven by higher AFUDC equity.~~

~~Income Tax Expense.~~ The variance was primarily due to an increase in pretax income. The effective tax rates for the nine months ended September 30, 2017, and 2016 were 39.0 percent and 34.0 percent, respectively. The increase in the effective tax rate was primarily due to an immaterial out of period adjustment in the prior year related to deferred tax balances associated with property, plant and equipment.

Matters Impacting Future Results

~~On April 17, 2015,~~The matters discussed herein could materially impact the ~~EPA published~~future operating results, financial condition and cash flows of the Duke Energy Registrants and Business Segments.

Regulatory Matters

Coal Ash Costs

Future spending of coal ash costs, including amounts recorded for depreciation and liability accretion, is expected to be recovered in future rate cases or rider filings. The majority of spend is expected to occur over the ~~Federal Register a rule~~next 10 to ~~regulate the disposal of CCR from electric utilities as solid waste.~~ 15 years.

Duke Energy Indiana has interpreted the Coal Combustion Residuals (CCR) rule to identify the coal ash basin sites impacted and has assessed the amounts of coal ash subject to the rule and a method of compliance. ~~Duke Energy Indiana's interpretation~~Interpretation of the requirements of the CCR rule is subject to ~~potential~~further legal challenges and ~~further~~ 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. ~~An order~~In January 2022, Duke Energy Indiana received a letter from ~~regulatory authorities disallowing recovery~~the EPA regarding application and interpretation of ~~costs related to closure~~the CCR rule for some of the ash basins ~~could have an adverse impact on~~at its Gallagher Station. In response to the letter, Duke Energy ~~Indiana's financial position, results~~Indiana has submitted revised closure plans for those basins to the Indiana Department of ~~operations and cash flows. See~~Environmental Management (IDEM). Those closure plans are pending review by IDEM. For more information, see Note 4 to the Condensed Consolidated Financial Statements, ~~“Regulatory Matters,”~~"Regulatory Matters."

Fuel Cost Recovery

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

Commercial Renewables

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


MD&A			MATTERS IMPACTING FUTURE RESULTS

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

Supply Chain

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

Goodwill

The ~~Indiana Utility Regulatory Commission (IURC) approved a settlement agreement between~~ Duke Energy ~~Indiana and multiple parties that resolves all disputes, claims and issues from the IURC proceedings related to post-commercial operating performance and recovery~~Registrants performed their annual goodwill impairment tests as of ongoing operating and capital costs at the Edwardsport IGCC generating facility. The settlement agreement imposed a cost cap for retail recoverable operations and maintenance costs through 2017. An inability to manage operating costsAugust 31, 2023, as described in ~~accordance with caps imposed pursuant~~Note 8 to the ~~agreement could have an adverse~~Condensed Consolidated Financial Statements, "Goodwill." As of August 31, 2023, all of Duke Energy Registrants' reporting units' estimated fair values materially exceeded the carrying values except for the GU&I reporting unit of Duke Energy Ohio. While no goodwill impairment charges were recorded in the third quarter of 2023, continued rising interest rates, and the related impact on the weighted average cost of capital, without timely or adequate updates to the regulated allowed return on equity or deteriorating economic conditions impacting GU&I's future cash flows or equity valuations of peer companies could impact the estimated fair value of GU&I, and goodwill impairment charges could be recorded in the future. The carrying value of goodwill within GU&I for Duke Energy ~~Indiana's financial position,~~Ohio was approximately $324 million as of September 30, 2023.

Other

flows in the future.

~~PART I~~

Results of Operations

~~PIEDMONT~~Non-GAAP Measures

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

Management evaluates financial performance in part based on non-GAAP financial measures, including adjusted earnings and ~~Notes~~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:

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

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

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

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


MD&A			DUKE ENERGY

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


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

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



Regulatory Matters(a)	84		0.11		—		—

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

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

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

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

GAAP Reported EPS was $2.27 for the nine months ended September 30, ~~2017, Piedmont's Annual Report on Form 10-K~~2023, compared to $4.03 for the nine months ended September 30, 2022. In addition to the drivers below, GAAP reported EPS decreased primarily due to impairments on the sale of the Commercial Renewables business.

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

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


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




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

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

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

SEGMENT RESULTS

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

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


MD&A			SEGMENT RESULTS — ELECTRIC UTILITIES AND INFRASTRUCTURE

Electric Utilities and Infrastructure


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

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

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

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

Operating Revenues. The variance was driven primarily by:

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

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

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

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

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

Partially offset by:

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

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

Operating Expenses. The variance was driven primarily by:

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

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


MD&A			SEGMENT RESULTS — ELECTRIC UTILITIES AND INFRASTRUCTURE

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

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

Partially offset by:

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

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

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

Income Tax Expense. The increase in tax expense was primarily due to a decrease in the amortization of excess deferred taxes, partially offset by a decrease in pretax income. The ETRs for the three months ended ~~October 31, 2016,~~September 30, 2023, and 2022, were 13.2% and 11.8%, respectively. The increase in the ETR was primarily due to a decrease in the amortization of excess deferred taxes.

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

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

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

Operating Revenues. The variance was driven primarily by:

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

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

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

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

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

Partially offset by:

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

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

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

Operating Expenses. The variance was driven primarily by:

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

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

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

Partially offset by:

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

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

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

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

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


MD&A			SEGMENT RESULTS — GAS UTILITIES AND INFRASTRUCTURE

Gas Utilities and Infrastructure


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



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

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

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

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

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

Operating Revenues.The variance was driven primarily by:

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

Partially offset by:

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

Operating Expenses.The variance was driven primarily by:

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

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

Partially offset by:

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

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

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

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

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

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

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

Operating Revenues.The variance was driven primarily by:

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


MD&A			SEGMENT RESULTS — GAS UTILITIES AND INFRASTRUCTURE

Partially offset by:

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

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

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

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

Operating Expenses.The variance was driven primarily by:

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

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

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

Partially offset by:

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

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

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

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

Other


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






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

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

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

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

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

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

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

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

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


MD&A			SEGMENT RESULTS - OTHER

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

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

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

Income Tax Benefit. The increase in the tax benefit was primarily due to benefits associated with ongoing tax efficiency efforts and an increase in pretax losses. The ETRs for the nine months ended September 30, 2023, and 2022, were 49.1% and 24.1%, respectively. The increase in the ETR was primarily due to benefits associated with ongoing tax efficiency efforts. During the third quarter of 2023, the Company evaluated the deductibility of certain items spanning periods currently open under federal statute, including items related to interest on company-owned life insurance. As a result of this analysis, the Company recorded a favorable adjustment of approximately $120 million.

(LOSS) INCOME FROM DISCONTINUED OPERATIONS, NET OF TAX


	Three Months Ended September 30,						Nine Months Ended September 30,
(in millions)	2023		2022		Variance		2023		2022		Variance
(Loss) Income From Discontinued Operations, net of tax	$	(152)	$	3	$	(155)	$	(1,316)	$	(30)	$	(1,286)

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

The variance was primarily driven by the impairments on the sale of the Commercial Renewables business recorded in 2023.

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

The variance was primarily driven by the impairments on the sale of the Commercial Renewables business recorded in 2023.

DUKE ENERGY CAROLINAS

Results of Operations


	Nine Months Ended September 30,
(in millions)	2023		2022		Variance
Operating Revenues	$	6,155	$	5,844	$	311
Operating Expenses
Fuel used in electric generation and purchased power	1,823		1,423		400
Operation, maintenance and other	1,285		1,410		(125)
Depreciation and amortization	1,186		1,138		48
Property and other taxes	276		258		18
Impairment of assets and other charges	70		(3)		73
Total operating expenses	4,640		4,226		414
Gains on Sales of Other Assets and Other, net	26		4		22
Operating Income	1,541		1,622		(81)
Other Income and Expenses, net	181		172		9
Interest Expense	504		415		89
Income Before Income Taxes	1,218		1,379		(161)
Income Tax Expense	97		87		10
Net Income	$	1,121	$	1,292	$	(171)

The following table shows the percent changes in GWh sales and average number of customers. The percentages for retail customer classes represent billed sales only. Total sales includes billed and unbilled retail sales and wholesale sales to incorporated municipalities, public and private utilities and power marketers. Amounts are not weather-normalized.


Increase (Decrease) over prior year	2023
Residential sales	(4.5)	%
General service sales	(0.7)	%
Industrial sales	(5.1)	%
Wholesale power sales	6.3	%
Joint dispatch sales	28.7	%
Total sales	(4.0)	%
Average number of customers	1.7	%


MD&A			DUKE ENERGY CAROLINAS

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

Operating Revenues.The variance was driven primarily by:

•a $429 million increase in fuel revenues due to higher fuel cost recovery; and

•a $73 million increase in rider revenues primarily due to the decrease in the return of EDIT to customers compared to the prior year and increases in energy efficiency primarily due to program performance.

Partially offset by:

•a $153 million decrease in retail sales due to unfavorable weather compared to prior year; and

•a $71 million decrease in weather-normal retail sales volumes.

Operating Expenses. The variance was driven primarily by:

•a $400 million increase in fuel used in electric generation and purchased power primarily due to changes in the generation mix and higher amortization of deferred fuel, partially offset by lower Joint Dispatch Agreement (JDA) purchased volumes and prices;

•a $73 million increase in impairment of assets and other primarily due to rate case impacts and a prior year adjustment of the South Carolina Supreme Court decision on coal ash; and

•a $48 million increase in depreciation and amortization primarily due to a higher depreciable base, partially offset by a decrease in depreciation and amortization primarily due to the prior year South Carolina Supreme Court decision on coal ash and an increase in Grid Improvement Plan deferrals.

Partially offset by:

•a $125 million decrease in operation, maintenance and other expense primarily due to a decrease in spend on outside services and lower storm restoration costs.

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

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

Income Tax Expense.The increase in tax expense was primarily due to a decrease in the amortization of excess deferred taxes, partially offset by a decrease in pretax income.

PROGRESS ENERGY

Results of Operations


	Nine Months Ended September 30,
(in millions)	2023		2022		Variance
Operating Revenues	$	10,315	$	10,087	$	228
Operating Expenses
Fuel used in electric generation and purchased power	3,902		3,927		(25)
Operation, maintenance and other	1,963		1,829		134
Depreciation and amortization	1,609		1,607		2
Property and other taxes	546		472		74
Impairment of assets and other charges	29		4		25
Total operating expenses	8,049		7,839		210
Gains on Sales of Other Assets and Other, net	20		6		14
Operating Income	2,286		2,254		32
Other Income and Expenses, net	146		150		(4)
Interest Expense	706		616		90
Income Before Income Taxes	1,726		1,788		(62)
Income Tax Expense	280		289		(9)
Net Income	$	1,446	$	1,499	$	(53)


Less: Net Income Attributable to Noncontrolling Interests	—		1		(1)
Net Income Attributable to Parent	$	1,446	$	1,498	$	(52)

100


MD&A			PROGRESS ENERGY

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

Operating Revenues. The variance was driven primarily by:

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

•a $242 million increase in fuel cost recovery at Duke Energy Florida driven by higher fuel rates in the current year, partially offset by a decrease at Duke Energy Progress driven by lower JDA sales volumes at lower prices;

•a $74 million increase due to higher pricing related to rate cases at Duke Energy Progress from interim rates from the North Carolina retail rate case and the ~~Form 10‑QT as~~South Carolina retail rate case, and base rate adjustments related to annual increases from the 2021 Settlement Agreement at Duke Energy Florida;

•a $35 million increase in rider revenues at Duke Energy Florida primarily due to increased Storm Protection Plan rider revenue; and

•a $20 million increase in franchise taxes revenue primarily due to increased revenues over prior year.

Partially offset by:

•a $265 million decrease in wholesale revenues, net of ~~December 31, 2016, for the transition period from November 1, 2016,~~fuel, due to ~~December 31, 2016.~~lower capacity rate and volumes at Duke Energy Progress and lower demand at Duke Energy Florida;

•an $85 million decrease in weather-normal retail sales volumes; and

•a $66 million decrease in retail sales due to unfavorable weather compared to prior year.

Operating Expenses. The variance was driven primarily by:

•a $134 million increase in operation, maintenance and other primarily due to storm amortization at Duke Energy Florida, partially offset by a decrease at Duke Energy Progress due to lower storm costs;

•a $74 million increase in property and other taxes primarily due to franchise taxes driven by higher revenues and property taxes due to higher property tax valuation adjustments at Duke Energy Florida; and

•a $25 million increase in impairment of asset and other charges primarily due to rate case impacts at Duke Energy Progress.

Partially offset by:

•a $25 million decrease in fuel used in electric generation and purchased power primarily due to lower volumes and price at Duke Energy Progress, partially offset by higher amortization of deferred fuel balances at Duke Energy Florida.

Gains on Sales of Other Assets and Other, net. Theincrease was primarily due to sales of cell tower leases.

Interest Expense. The variance was driven primarily by higher outstanding debt balances and interest rates at Duke Energy Florida and Duke Energy Progress.

Income Tax Expense.The decrease in tax expense was primarily due to a decrease in pretax income.

DUKE ENERGY PROGRESS

Results of Operations


	Nine Months Ended September 30,
(in millions)	2023		2022		Variance
Operating Revenues	$	4,844	$	5,182	$	(338)
Operating Expenses
Fuel used in electric generation and purchased power	1,685		1,916		(231)
Operation, maintenance and other	1,051		1,101		(50)
Depreciation and amortization	935		890		45
Property and other taxes	143		136		7
Impairment of assets and other charges	31		4		27
Total operating expenses	3,845		4,047		(202)
Gains on Sales of Other Assets and Other, net	2		2		—
Operating Income	1,001		1,137		(136)
Other Income and Expenses, net	92		83		9
Interest Expense	315		260		55
Income Before Income Taxes	778		960		(182)
Income Tax Expense	101		129		(28)
Net Income	$	677	$	831	$	(154)

101

Nine Months Ended September 30,
(in millions) 2017
2016
Variance
Operating Revenues
Regulated natural gas $ 877
$ 815
$ 62
Nonregulated natural gas and other 7
8
(1 )
Total operating revenues 884
823
61
Operating Expenses
Cost of natural gas 333
289
44
Operation, maintenance and other 226
221
5
Depreciation and amortization 109
103
6
Property and other taxes 38
33
5
Impairment charges 7
—
7
Total operating expenses 713
646
67
Operating Income 171
177
(6 )
Equity in earnings of unconsolidated affiliates 8
25
(17 )
Other income and expenses, net (1 ) (1 ) —
Total other income and expenses 7
24
(17 )
Interest Expense 59
50
9
Income Before Income Taxes 119
151
(32 )
Income Tax Expense 43
57
(14 )
Net Income $ 76
$ 94
$ (18 )


MD&A			DUKE ENERGY PROGRESS

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 period	2023
Residential sales	(5.2)	%
General service sales	(2.7)	%
Industrial sales	(13.6)	%
Wholesale power sales	(4.5)	%
Joint dispatch sales	(14.0)	%
Total sales	(7.3)	%
Average number of customers	1.7	%

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

Operating Revenues. The variance was driven primarily by:

•a $182 million decrease in fuel revenues due to lower JDA sales volumes at lower prices in the current year, partially offset by higher fuel cost recovery;

•a $110 million decrease in retail sales due to unfavorable weather compared to prior year;

•a $69 million decrease in weather-normal retail sales volumes; and

•a $33 million decrease in wholesale revenues, net of fuel, due to lower capacity rates and volumes.

Partially offset by:

•a $60 million increase due to higher pricing from interim rates from the North Carolina retail rate case and the South Carolina retail rate case.

Operating Expenses. The variance was driven primarily by:

•a $231 million decrease in fuel used in electric generation and purchased power primarily due to lower volumes and prices, partially offset by the recovery of fuel expenses; and

•a $50 million decrease in operation, maintenance and other expense primarily due to lower storm costs.

Partially offset by:

•a $45 million increase in depreciation and amortization due to higher depreciable base; and

•a $27 million increase in impairment of assets and other charges primarily due to rate case impacts.

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

Income Tax Expense.The decrease in tax expense was primarily due to a decrease in pretax income, partially offset by a decrease in the amortization of excess deferred taxes.

102


MD&A			DUKE ENERGY FLORIDA

DUKE ENERGY FLORIDA

Results of Operations


	Nine Months Ended September 30,
(in millions)	2023		2022		Variance
Operating Revenues	$	5,456	$	4,890	$	566
Operating Expenses
Fuel used in electric generation and purchased power	2,218		2,011		207
Operation, maintenance and other	898		716		182
Depreciation and amortization	674		717		(43)
Property and other taxes	403		335		68
Impairment of assets and other charges	(1)		—		(1)
Total operating expenses	4,192		3,779		413
Gains on Sales of Other Assets and Other, net	1		5		(4)
Operating Income	1,265		1,116		149
Other Income and Expenses, net	56		74		(18)
Interest Expense	305		258		47
Income Before Income Taxes	1,016		932		84
Income Tax Expense	206		181		25
Net Income	$	810	$	751	$	59

The following table shows the percent changes in GWh sales and average number of customers. The percentages for retail customer classes represent billed sales only. Wholesale power sales include both billed and unbilled sales. Total sales includes billed and unbilled retail sales and wholesale sales to incorporated municipalities, public and private utilities and power marketers. Amounts are not weather-normalized.


Increase (Decrease) over prior period	2023
Residential sales	1.5	%
General service sales	1.1	%
Industrial sales	(5.6)	%
Wholesale and other	(46.7)	%
Total sales	(4.9)	%
Average number of customers	1.7	%

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

Operating Revenues. The variance was driven primarily by:

•a $424 million increase in fuel and capacity revenues primarily due to an increase in fuel and capacity rates billed to retail customers;

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

•a $44 million increase in retail sales due to favorable weather in the current year;

•a $35 million increase in rider revenues primarily due to increased rate of Storm Protection Plan rider; and

•a $20 million increase in franchise taxes revenue primarily due to increased revenues over prior year.

Partially offset by:

•a $232 million decrease in wholesale power revenues, net of fuel, primarily due to decreased demand.

Operating Expenses. The variance was driven primarily by:

•a $207 million increase in fuel used in electric generation and purchased power primarily due to higher amortization of deferred fuel and capacity expense;

•a $182 million increase in operation, maintenance and other primarily due to storm amortization; and

•a $68 million increase in property and other taxes primarily due to franchise taxes driven by higher revenues and property taxes due to higher property tax valuation adjustments.

Partially offset by:

•a $43 million decrease in depreciation and amortization primarily due to the amortization of Department of Energy settlement regulatory liability, partially offset by higher depreciable base.

Other Income and Expenses, net. The decrease is primarily due to the wholesale portion of the Department of Energy settlement for nuclear fuel storage in prior year.

103


MD&A			DUKE ENERGY FLORIDA

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

Income Tax Expense. The increase in tax expense was primarily due to an increase in pretax income and a decrease in the amortization of excess deferred taxes, partially offset by an increase in production tax credits.

DUKE ENERGY OHIO

Results of Operations


	Nine Months Ended September 30,
(in millions)	2023		2022		Variance
Operating Revenues
Regulated electric	$	1,411	$	1,320	$	91
Regulated natural gas	464		491		(27)

Total operating revenues	1,875		1,811		64
Operating Expenses
Fuel used in electric generation and purchased power	485		439		46

Cost of natural gas	118		174		(56)
Operation, maintenance and other	358		408		(50)
Depreciation and amortization	266		247		19
Property and other taxes	258		272		(14)
Impairment of assets and other charges	—		(11)		11
Total operating expenses	1,485		1,529		(44)

Operating Income	390		282		108
Other Income and Expenses, net	33		16		17
Interest Expense	125		92		33
Income Before Income Taxes	298		206		92
Income Tax Expense (Benefit)	47		(30)		77


Net Income	$	251	$	236	$	15

The following table shows the percent changes in GWh sales of electricity, dekatherms of natural gas delivered and average number of electric and natural gas customers. The percentages for retail customer classes represent billed sales only. Total sales includes billed and unbilled retail sales and wholesale sales to incorporated municipalities, public and private utilities and power marketers. Amounts are not weather-normalized.


	Electric		Natural Gas
Increase (Decrease) over prior year	2023		2023
Residential sales	(5.6)	%	(13.4)	%
General service sales	1.8	%	(24.2)	%
Industrial sales	8.7	%	2.7	%
Wholesale electric power sales	(33.8)	%	n/a
Other natural gas sales	n/a		(0.4)	%
Total sales	(5.0)	%	(11.9)	%
Average number of customers	0.9	%	0.5	%

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

Operating Revenues. The variance was driven primarily by:

•a $93 million increase in price due to the 2022 Duke Energy Ohio Electric retail rate case and Ohio tax reform deferrals in prior year;

•a $58 million increase in fuel-related revenues primarily due to higher retail sales volumes and higher fuel cost recovery in the current year; and

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

Partially offset by:

•a $54 million decrease in revenues related to lower Ohio Valley Electric Corporation (OVEC) rider collections and OVEC sales into PJM Interconnection, LLC (PJM);

•a $33 million decrease due to unfavorable weather compared to prior year; and

•a $6 million decrease in retail revenue riders primarily due to the decrease in Distribution Capital Investment Rider (DCI), partially offset by increases in the Ohio CEP rider and Energy Efficiency Rider.

104


MD&A			DUKE ENERGY OHIO

Operating Expenses. The variance was driven primarily by:

•a $50 million decrease in operation, maintenance and other expense primarily due to the MGP Settlement in the prior year;

•a $14 million decrease in property and other taxes primarily due to property tax true ups in Ohio and Kentucky and higher deferrals, partially offset by higher franchise taxes; and

•a $10 million decrease in fuel expense primarily driven by lower retail prices for natural gas and purchased power, partially offset by an increase in purchased power volumes.

Partially offset by:

•a $19 million increase in depreciation and amortization primarily driven by an increase in distribution plant in service and depreciation rates resulting from the 2022 Duke Energy Ohio Electric retail rate case implemented in 2023; and

•an $11 million increase in impairment of assets and other charges primarily due to the reversal in the prior year of the impairment related to the propane caverns in Ohio.

Other Income and Expenses. The increase was primarily due intercompany interest income.

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

Income Tax Expense (Benefit). The increase in tax expense was primarily due to a decrease in the amortization of excess deferred taxes related to the MGP Settlement recorded in the prior year and an increase in pretax income.

DUKE ENERGY INDIANA

Results of Operations


	Nine Months Ended September 30,
(in millions)	2023		2022		Variance
Operating Revenues	$	2,606	$	2,835	$	(229)
Operating Expenses
Fuel used in electric generation and purchased power	980		1,234		(254)
Operation, maintenance and other	524		551		(27)
Depreciation and amortization	500		478		22
Property and other taxes	42		60		(18)
Impairment of assets and other charges	—		211		(211)
Total operating expenses	2,046		2,534		(488)

Operating Income	560		301		259
Other Income and Expenses, net	58		27		31
Interest Expense	157		138		19
Income Before Income Taxes	461		190		271
Income Tax Expense	82		1		81
Net Income	$	379	$	189	$	190

The following table shows the percent changes in GWh sales and average number of customers. The percentages for retail customer classes represent billed sales only. Total sales includes billed and unbilled retail sales and wholesale sales to incorporated municipalities, public and private utilities and power marketers. Amounts are not weather-normalized.


Increase (Decrease) over prior year	2023
Residential sales	(7.3)	%
General service sales	(1.3)	%
Industrial sales	7.1	%
Wholesale power sales	(7.9)	%
Total sales	(7.0)	%
Average number of customers	1.1	%

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

Operating Revenues. The variance was driven primarily by:

•a $111 million decrease in retail fuel revenues primarily due to lower fuel cost recovery driven by lower retail sales volumes and fuel prices;

•a $55 million decrease in wholesale revenues, including fuel revenues, driven by lower fuel and purchased power prices;

•a $51 million decrease in weather-normal retail sales volumes primarily due to lower customer demand;

105


MD&A			DUKE ENERGY INDIANA

•a $46 million decrease in retail sales due to unfavorable weather; and

•a $26 million decrease primarily due to the Utility Receipts Tax repeal.

Partially offset by:

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

Operating Expenses. The variance was driven primarily by:

•a $254 million decrease in fuel used in electric generation and purchased power primarily due to lower purchased power expense, natural gas and coal costs, partially offset by higher deferred fuel amortization;

•a $211 million decrease in impairment of assets and other charges primarily due to the Indiana Supreme Court ruling on recovery of certain coal ash costs in the prior year;

•a $27 million decrease in operation, maintenance and other primarily due to lower employee-related expenses and storm contingency costs; and

•an $18 million decrease in property and other taxes primarily due to franchise taxes and property tax true ups for prior periods.

Partially offset by:

•a $22 million increase in depreciation and amortization primarily due to higher depreciable base.

Other Income and Expenses, net. The variance is primarily due to coal ash insurance proceeds and intercompany interest income.

Interest Expense. The variance is primarily due to higher outstanding debt balances and interest rates.

Income Tax Expense. The increase in tax expense was primarily due to an increase in pretax income and a decrease in the amortization of excess deferred income taxes related to the coal ash impairment recorded in the prior year.

PIEDMONT

Results of Operations


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



Operating Revenues	$	1,119	$	1,421	$	(302)
Operating Expenses
Cost of natural gas	316		685		(369)
Operation, maintenance and other	248		270		(22)
Depreciation and amortization	175		166		9
Property and other taxes	46		44		2
Impairment of assets and other charges	(4)		1		(5)
Total operating expenses	781		1,166		(385)
Gains on Sales of Other Assets and Other, net	—		4		(4)
Operating Income	338		259		79
Other Income and Expenses, net	49		41		8
Interest Expense	120		102		18
Income Before Income Taxes	267		198		69
Income Tax Expense	46		18		28
Net Income	$	221	$	180	$	41

The following table shows the percent changes in dekatherms delivered and average number of customers. The percentages for all throughput deliveries represent billed and unbilled sales. Amounts are not weather-normalized.



Increase (Decrease) over prior year	~~2017~~		2023
Residential deliveries	~~(19.2~~(16.3)	)%
Commercial deliveries	~~(11.8~~(10.4)	)%
Industrial deliveries	~~(4.3~~(2.9)	)%
Power generation deliveries	~~(11.0~~(7.7)	)%
For resale	~~(6.9~~(18.1)	)%
Total throughput deliveries	~~(10.5~~(8.0)	)%
Secondary market volumes	~~6.2~~(27.0)	%
Average number of customers	~~1.6~~1.5	%

Piedmont's throughput was 334,781,316 dekatherms and 374,214,204 dekatherms for the nine months ended September 30, 2017, and 2016, respectively. Due to the margin decoupling mechanism in North Carolina and weather normalization adjustment (WNA) mechanisms in South Carolina and Tennessee, changes in throughput deliveries do not have a material impact on Piedmont's revenues or earnings.

106


MD&A			PIEDMONT

The margin decoupling mechanism adjusts for variations in residential and commercial use per customer, including those due to weather and conservation. The ~~WNA~~weather normalization adjustment mechanisms mostly offset the impact of weather on bills rendered, but do not ensure full recovery of approved margin during periods when winter weather is significantly warmer or colder than normal.

Nine Months Ended September 30, ~~2017,~~2023, as ~~Compared~~compared to September 30, ~~2016~~2022

Operating Revenues.The variance was driven primarily by:

•a ~~$44~~$369 million ~~increase~~decrease due to ~~higher~~lower natural gas costs passed through to customers, ~~primarily~~lower volumes, and decreased off-system sales natural gas costs.

Partially offset by:

•an $18 million increase due to ~~higher natural gas prices; and~~secondary marketing sales;

•a ~~$17~~$13 million increase ~~in revenues~~due to ~~residential~~North Carolina IMR;

•an $11 million increase due to customer growth; and ~~commercial customers, net of~~

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

Operating Expenses.The variance was driven primarily by:

•a $369 million decrease due to lower natural gas costs passed through to customers, lower volumes, and decreased off-system sales natural gas costs; and

•a $22 million decrease in operations, maintenance and other primarily due to ~~Integrity Management Rider (IMR) rate adjustments~~lower spend on internal and ~~customer growth, partially~~contract labor costs.

Partially offset ~~by wholesale marketing revenue.~~by:

~~PART I~~

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

•a ~~$44 million increase in costs of natural gas primarily due to higher natural gas prices;~~

~~an $11~~$9 million increase in depreciation ~~expense~~ and ~~property and franchise taxes~~amortization due to additional plant in ~~service;~~service.

Other Income and

~~a $7 million~~ Expenses, net. The increase ~~due to an impairment of software resulting from planned accounting system and process integration in 2018.~~

~~Equity in Earnings of Unconsolidated Affiliates.~~ ~~The decrease~~ was primarily due to higher AFUDC equity ~~earnings from the investment in SouthStar Energy Services, LLC (SouthStar) in the prior year. Piedmont sold its 15 percent membership interest in SouthStar on October 3, 2016.~~income.

~~Income Tax~~Interest Expense. The ~~variance~~increase was primarily due to ~~a decrease~~higher outstanding debt balances and interest rates.

Income Tax Expense. The increase in ~~pretax income. The effective~~ tax ~~rates for the nine months ended September 30, 2017, and 2016 were 36.1 percent and 37.7 percent, respectively. The decrease in the effective tax rate~~expense was primarily due to ~~favorable tax return true ups~~an increase in pretax income and ~~lower North Carolina corporate tax rates.~~

a decrease in the amortization of excess deferred taxes.

~~PART I~~

LIQUIDITY AND CAPITAL RESOURCES

Sources and Uses of Cash

Duke Energy relies primarily upon cash flows from operations, debt and equity issuances and its existing cash and cash equivalents to fund its liquidity and capital requirements. Duke Energy’s capital requirements arise primarily from capital and investment expenditures, repaying long-term debt and paying dividends to shareholders. ~~See~~Additionally, due to its existing tax attributes and projected tax credits to be generated relating to the IRA, Duke Energy does not expect to be a significant federal cash taxpayer until around 2030. Duke Energy’s Annual Report on Form 10-K for the year ended December 31, ~~2016, for~~2022, included a summary and detailed discussion of projected primary sources and uses of cash for ~~2017~~2023 to ~~2019.~~2025.

The Subsidiary Registrants generally maintain minimal cash balances and use short-term borrowings to meet their working capital needs and other cash requirements. The Subsidiary Registrants, excluding Progress Energy (Parent), support their short-term borrowing needs through participation withAs of September 30, 2023, Duke Energy had $324 million of cash on hand and ~~certain of~~$6.1 billion available under its ~~other subsidiaries in a money pool arrangement. The companies with short-term funds may provide short-term loans to affiliates participating under this arrangement.~~

$9 billion Master Credit Facility.Duke Energy expects to have sufficient liquidity in the form of cash on hand, cash from operations and ~~the Subsidiary Registrants, excluding Progress Energy (Parent), may also use short-term debt, including commercial paper and the money pool, as a bridge~~available credit capacity to long-term debt financings. The levels of borrowing may vary significantly over the course of the year due to the timing of long-term debt financings and the impact of fluctuations in cash flows from operations. From time to time, Duke Energy’s current liabilities may exceed current assets resulting from the use of short-term debt as asupport its funding ~~source to meet scheduled maturities of long-term debt, as well as cash needs, which can fluctuate due to the seasonality of its business.~~

~~CREDIT FACILITIES AND REGISTRATION STATEMENTS~~

needs. Refer to Note 6 to the Condensed Consolidated Financial Statements, "Debt and Credit Facilities," for ~~further~~ information regarding Duke Energy's debt issuances and maturities, and available credit facilities including the Master Credit Facility.

~~Shelf Registration~~

In September 2016, Duke Energy filed a registration statement (Form S-3) with the U.S. Securities and Exchange Commission (SEC). Under this Form S-3, which is uncapped, the Duke Energy Registrants, excluding Progress Energy, may issue debt and other securities in the future at amounts, prices and with terms to be determined at the time of future offerings. The registration statement also allows for the issuance of common stock by Duke Energy.

In January 2017, Duke Energy amended its Form S-3 to add Piedmont as a registrant and included in the amendment a prospectus for Piedmont under which it may issue debt securities in the same manner as other Duke Energy Registrants.

~~DEBT MATURITIES~~

~~Refer to~~ Additionally, see Note 62 to the Condensed Consolidated Financial Statements, ~~"Debt and Credit Facilities,~~"Dispositions," for ~~further information regarding significant components of Current Maturities of Long-Term Debt on the Condensed Consolidated Balance Sheets.~~

~~CASH FLOWS FROM OPERATING ACTIVITIES~~

Cash flows from operations of Electric Utilities and Infrastructure and Gas Utilities and Infrastructure are primarily driven by sales of electricity and natural gas, respectively, and costs of operations. These cash flows from operations are relatively stable and comprise a substantial portion of Duke Energy’s operating cash flows. Weather conditions, working capital and commodity price fluctuations, and unanticipated expenses including unplanned plant outages, storms, legal costs and related settlements can affect the timing of proceeds from the sale of certain Commercial Renewables assets to affiliates of Brookfield and ~~level of cash flows from operations. Duke Energy believes it has sufficient liquidity resources through~~ArcLight.

In April 2023, Moody’s Investors Service, Inc. (Moody's) maintained the ~~commercial paper markets,~~credit ratings and ~~ultimately~~affirmed the Master Credit and Revolving Facilities, to support these operations, including Hurricane Irma storm restoration costs. Cash flows from operations are subject to a number of other factors, including but not limited to regulatory constraints, economic trends and market volatility (see “Item 1A. Risk Factors,” in the Duke Energy Registrants’ Annual Reports on Form 10-K for additional information).

~~Restrictive Debt Covenants~~

The Duke Energy Registrants’ debt and credit agreements contain various financial and other covenants. The Master Credit Facility contains a covenant requiring the debt-to-total capitalization ratio not to exceed 65 percentratings outlook for all borrowers except Piedmont. The debt-to-total capitalization ratio for Piedmont is not to exceed 70 percent. Failure to meet those covenants beyond applicable grace periods could result in accelerated due dates and/or termination of the agreements. As of September 30, 2017, each of the Duke Energy Registrants, was in compliance with all covenants related to their debt agreements. In addition, some credit agreements may allow for acceleration of payments or termination of the agreements due to nonpayment or acceleration of other significant indebtedness of the borrower or some of its subsidiaries. None of the debt or credit agreements contain material adverse change clauses.

~~Credit Ratings~~

~~Credit ratings are intended to provide credit lenders a framework for comparing the credit quality of securities and are not a recommendation to buy, sell or hold. The~~including Duke Energy ~~Registrants’ credit ratings~~Ohio. Operations in Kentucky are dependent on the rating agencies’ assessments of their ability to meet their debt principal and interest obligations when they come due. If, as a result of market conditions or other factors, the Duke Energy Registrants are unable to maintain current balance sheet strength or if earnings and cash flow outlook materially deteriorate, credit ratings could be negatively impacted.

The Duke Energy Registrants each hold credit ratings by Moody’s Investors Service, Inc. (Moody’s) and Standard & Poor’s Rating Services (S&P). In April 2017, Fitch Ratings, Inc. (Fitch) withdrew credit ratings of the Subsidiary Registrants, with the exclusion of Piedmont, which was not previously rated by Fitch due to commercial reasons. Fitch will continue to provide credit ratings for Duke Energy Corporation.

In May 2017, Moody’s changed its rating outlook for Duke Energy Corporation to stable from negative and affirmed Duke Energy Corporation's credit ratings. In August 2017, Moody's changed its rating outlook for Duke Energy Ohio to positive from stable and affirmedconducted through Duke Energy Ohio's wholly owned subsidiary, Duke Energy Kentucky. Moody's lowered Duke Energy Kentucky's ratings outlook from stable to negative while maintaining Duke Energy Kentucky's credit ~~ratings.~~rating of Baa1 for senior unsecured debt.

107

~~PART I~~


MD&A			LIQUIDITY AND CAPITAL RESOURCES

Cash Flow Information

The following table summarizes Duke Energy’s cash flows.


	Nine Months Ended							Nine Months Ended
	September 30,							September 30,
(in millions)	2017			2016			(in millions)	2023		2022
Cash flows provided by (used in):							Cash flows provided by (used in):
Operating activities	$	5,011		$	5,611		Operating activities	$	7,309	$	5,188
Investing activities	(6,360		)	(5,555		)	Investing activities	(9,751)		(8,630)
Financing activities	1,239			5,266			Financing activities	2,413		3,551
Changes in cash and cash equivalents included in assets held for sale	—			11
Net (decrease) increase in cash and cash equivalents	(110		)	5,333
Cash and cash equivalents at beginning of period	392			383
Cash and cash equivalents at end of period	$	282		$	5,716

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

OPERATING CASH FLOWS

The following table summarizes key components of Duke Energy’s operating cash flows.


	Nine Months Ended							Nine Months Ended
	September 30,							September 30,
(in millions)	2017			2016			(in millions)	2023		2022		Variance
Net income	$	2,361		$	2,392		Net income	$	1,878	$	3,113	$	(1,235)
Non-cash adjustments to net income	3,937			3,585			Non-cash adjustments to net income	5,887		4,474		1,413
Contributions to qualified pension plans	(8		)	—			Contributions to qualified pension plans	(100)		(58)		(42)
Payments for asset retirement obligations	(420		)	(443		)	Payments for asset retirement obligations	(423)		(418)		(5)
Working capital	(859		)	77			Working capital	(792)		(2,043)		1,251
Other assets and Other liabilities							Other assets and Other liabilities	859		120		739
Net cash provided by operating activities	$	5,011		$	5,611		Net cash provided by operating activities	$	7,309	$	5,188	$	2,121

The variance ~~was~~is primarily ~~due to:~~

~~a $936 million decrease in cash flows from working capital~~ due to the recovery of deferred fuel costs and the timing of ~~the payment of~~ accruals ~~increased taxes accrued resulting from an increased effective tax rate, warmer winter weather~~ and ~~the absence of the International Disposal Group's operating cash flows.~~

~~Partially offset by:~~

~~a $321 million increase~~payments in ~~net income after non-cash adjustments, primarily due to lower operation, maintenance and~~ other ~~expense and the additional Piedmont earnings contribution in the current year.~~working capital accounts.

INVESTING CASH FLOWS

The following table summarizes key components of Duke Energy’s investing cash flows.


	Nine Months Ended							Nine Months Ended
	September 30,							September 30,
(in millions)	2017			2016			(in millions)	2023		2022		Variance
Capital, investment and acquisition expenditures	$	(6,211	)	$	(5,450	)	Capital, investment and acquisition expenditures	$	(9,340)	$	(8,185)	$	(1,155)

Other investing items	(149		)	(105		)	Other investing items	(411)		(445)		34
Net cash used in investing activities	$	(6,360	)	$	(5,555	)	Net cash used in investing activities	$	(9,751)	$	(8,630)	$	(1,121)



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

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

		~~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


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







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



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



(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



(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


	Three Months Ended September 30, 2017																				Three Months Ended September 30, 2023
	Electric		Gas					Total													Electric				Gas				Total
	Utilities and		Utilities and		Commercial			Reportable													Utilities and				Utilities and				Reportable
(in millions)	Infrastructure		Infrastructure		Renewables			Segments		Other			Eliminations			Consolidated			(in millions)		Infrastructure				Infrastructure				Segments				Other				Eliminations				Total
Unaffiliated revenues	$	6,122	$	249	$	95		$	6,466	$	16		$	—		$	6,482		Unaffiliated revenues		$	7,695			$	291			$	7,986			$	8			$	—			$	7,994
Intersegment revenues	7		23		—			30		19			(49		)	—			Intersegment revenues		20				22				42				25				(67)				—
Total revenues	$	6,129	$	272	$	95		$	6,496	$	35		$	(49	)	$	6,482		Total revenues		$	7,715			$	313			$	8,028			$	33			$	(67)			$	7,994
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)		$	1,447			$	15			$	1,462			$	(59)			$	—			$	1,403
Less: Noncontrolling interests																			Less: Noncontrolling interests																						(69)
Add: Preferred stock dividend																			Add: Preferred stock dividend																						39
Discontinued operations																			Discontinued operations																						(190)
Net Income																			Net Income																						$	1,321
Segment assets(b)	$	118,323	$	11,361	$	4,216		$	133,900	$	2,240		$	185		$	136,325		$	155,588			$	16,724			$	172,312			$	8,848			$	—			$	181,160



	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



		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



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


~~(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)~~FINANCIAL STATEMENTS			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.ASSET RETIREMENT OBLIGATIONS


~~(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.~~


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



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, 2023
			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	$	57	$	11	$	14	$	9	$	5	$	2	$	28	$	1
Noncurrent	113		1		7		1		—		—		—		105		Noncurrent	86		40		46		46		—		—		—		—
Total Derivative Liabilities – Commodity Contracts	$	142	$	2	$	18	$	3	$	9	$	—	$	—	$	123
Total Derivative Assets – Commodity Contracts																	Total Derivative Assets – Commodity Contracts	$	143	$	51	$	60	$	55	$	5	$	2	$	28	$	1
Interest Rate Contracts																	Interest Rate Contracts
Designated as Hedging Instruments																	Designated as Hedging Instruments
Current	$	7	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Noncurrent	9		—		—		—		—		—		—		—		Noncurrent	177		—		—		—		—		—		—		—
Not Designated as Hedging Instruments																	Not Designated as Hedging Instruments
Current	24		23		—		—		—		1		—		—		Current	104		26		78		—		78		—		—		—
Noncurrent	9		—		4		4		—		4		—		—		Noncurrent	101		16		58		24		34		—		27		—
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	$	382	$	42	$	136	$	24	$	112	$	—	$	27	$	—

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


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


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

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

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


																				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)	2023		2022		2023		2022
Balance at beginning of period	$	5		$	(166	)	$	(161	)	$	5		$	10		$	15		Balance at beginning of period	$	41	$	89	$	34	$	24
Total pretax realized or unrealized gains included in comprehensive income	1			—			1			—			—			—

Purchases, sales, issuances and settlements:																			Purchases, sales, issuances and settlements:
Purchases	—			55			55			—			34			34			Purchases	3		—		50		77
Sales	(6		)	—			(6		)	(1		)	—			(1		)

Settlements	—			(30		)	(30		)	—			(22		)	(22		)	Settlements	(18)		(21)		(76)		(13)
Total gains included on the Condensed Consolidated Balance Sheet	—			48			48			—			1			1

Total gains (losses) included on the Condensed Consolidated Balance Sheet																			Total gains (losses) included on the Condensed Consolidated Balance Sheet	4		(8)		22		(28)
Balance at end of period	$	—		$	(93	)	$	(93	)	$	4		$	23		$	27		Balance at end of period	$	30	$	60	$	30	$	60



	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, 2023
	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 Ohio												Duke Energy Ohio
FTRs	$	5		RTO auction pricing	FTR price – per MWh	$	0.77		-	$	3.52	FTRs	$	3	RTO auction pricing	FTR price – per MWh	$	0.43	-	$	2.07	$	0.77
Duke Energy Indiana												Duke Energy Indiana
FTRs	16			RTO auction pricing	FTR price – per MWh	(0.83		)	-	9.32		FTRs	27		RTO auction pricing	FTR price – per MWh	(1.64)		-	12.51		1.90
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	$	30


~~(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.~~