0001326160 duk:~~PiedmontNaturalGasMember~~September2020DebtIssuance2.450CouponDue2030Member us-gaap:~~OtherNoncurrentLiabilitiesMember 2019-12-31~~UnsecuredDebtMember 2020-09-30 0001326160 duk:ProgressEnergyMember duk:GeneralMember us-gaap:ElectricityUsRegulatedMember duk:ElectricUtilitiesandInfrastructureMember 2019-07-01 2019-09-30

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)



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

For the quarterly period ended ~~March 31,~~September 30, 2020



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

For the transition period from _________to_________



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

1-32853	DUKE ENERGY CORPORATION	20-2777218

(a Delaware corporation)

550 South Tryon Street

Charlotte, North Carolina 28202-1803

704-382-3853



1-4928	DUKE ENERGY CAROLINAS, LLC	56-0205520

(a North Carolina limited liability company)

526 South Church Street

Charlotte, North Carolina 28202-1803

704-382-3853



1-15929	PROGRESS ENERGY, INC.	56-2155481

(a North Carolina corporation)

410 South Wilmington Street

Raleigh, North Carolina 27601-1748

704-382-3853



1-3382	DUKE ENERGY PROGRESS, LLC	56-0165465

(a North Carolina limited liability company)

410 South Wilmington Street

Raleigh, North Carolina 27601-1748

704-382-3853



1-3274	DUKE ENERGY FLORIDA, LLC	59-0247770

(a Florida limited liability company)

299 First Avenue North

St. Petersburg, Florida 33701

704-382-3853



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

(an Ohio corporation)

139 East Fourth Street

Cincinnati, Ohio 45202

704-382-3853



1-3543	DUKE ENERGY INDIANA, LLC	35-0594457

(an Indiana limited liability company)

1000 East Main Street

Plainfield, Indiana 46168

704-382-3853



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

(a North Carolina corporation)

4720 Piedmont Row Drive

Charlotte, North Carolina 28210

704-364-3120

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

Name of each exchange on


Registrant	Title of each class Trading symbols which registered


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


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

January 15, 2073


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

September 15, 2078


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

interest in a share of 5.75% Series A Cumulative

Redeemable Perpetual Preferred Stock, par value

$0.001 per share

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



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

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



Duke Energy	Yes	☒	No	☐	Duke Energy Florida	Yes	☒	No	☐
Duke Energy Carolinas	Yes	☒	No	☐	Duke Energy Ohio	Yes	☒	No	☐
Progress Energy	Yes	☒	No	☐	Duke Energy Indiana	Yes	☒	No	☐
Duke Energy Progress	Yes	☒	No	☐	Piedmont	Yes	☒	No	☐

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



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

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

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



Duke Energy	Yes	☐	No	☒	Duke Energy Florida	Yes	☐	No	☒
Duke Energy Carolinas	Yes	☐	No	☒	Duke Energy Ohio	Yes	☐	No	☒
Progress Energy	Yes	☐	No	☒	Duke Energy Indiana	Yes	☐	No	☒
Duke Energy Progress	Yes	☐	No	☒	Piedmont	Yes	☐	No	☒

Number of shares of common stock outstanding at ~~April 30,~~October 31, 2020:



Registrant	Description	Shares
Duke Energy	Common stock, $0.001 par value	~~734,852,539~~735,958,560

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

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

TABLE OF CONTENTS



	Cautionary Statement Regarding Forward-Looking Information

PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements

	Duke Energy Corporation Financial Statements	9

	Duke Energy Carolinas, LLC Financial Statements	1415

	Progress Energy, Inc. Financial Statements	1819

	Duke Energy Progress, LLC Financial Statements	2223

	Duke Energy Florida, LLC Financial Statements	2627

	Duke Energy Ohio, Inc. Financial Statements	3031

	Duke Energy Indiana, LLC Financial Statements	3435

	Piedmont Natural Gas Company, Inc. Financial Statements	3839

	Combined Notes to Condensed Consolidated Financial Statements
	Note 1 – Organization and Basis of Presentation	4243
	Note 2 – Business Segments	4446
	Note 3 – Regulatory Matters	4548
	Note 4 – Commitments and Contingencies	5860
	Note 5 – Debt and Credit Facilities	6164
	Note 6 – ~~Goodwill~~Asset Retirement Obligations	6265
	Note 7 – ~~Related Party Transactions~~Goodwill	6366
	Note 8 – ~~Derivatives and Hedging~~Related Party Transactions	6467
	Note 9 – Derivatives and Hedging	68
	Note 10 – Investments in Debt and Equity Securities	70
	~~Note 10 – Fair Value Measurements~~	7574
	Note 11 – ~~Variable Interest Entities~~Fair Value Measurements	8079
	Note 12 – ~~Revenue~~Variable Interest Entities	8485
	Note 13 – ~~Stockholders' Equity~~	87
	~~Note 14 – Employee Benefit Plans~~	88
	~~Note 15 – Income Taxes~~Revenue	89
	Note 14 – Stockholders' Equity	95
	Note 15 – Employee Benefit Plans	96
	Note 16 – Income Taxes	97
	Note 17 – Subsequent Events	9098

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	9199

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	~~109~~119

Item 4.	Controls and Procedures	~~109~~119

PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	~~111~~120

Item 1A.	Risk Factors	~~111~~120

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	~~111~~120

Item 6.	Exhibits	~~112~~121

	Signatures	~~115~~124



FORWARD-LOOKING STATEMENTS

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

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


◦	The impact of the COVID-19 pandemic;


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


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


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


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


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


◦	Industrial, commercial and residential growth or decline in service territories or customer bases resulting from sustained downturns of the economy 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 United States electric grid or generating resources;


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


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


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


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


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


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


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


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


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

◦

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


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


◦	The ability to control operation and maintenance costs;


◦	The level of creditworthiness of counterparties to transactions;


◦	The ability to obtain adequate insurance at acceptable costs;


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



FORWARD-LOOKING STATEMENTS


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


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


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


◦	The impact of 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; and


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

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



GLOSSARY OF TERMS

Glossary of Terms

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



Term or Acronym	Definition

2013 Settlement	Revised and Restated Stipulation and Settlement Agreement approved in November 2013 among Duke Energy Florida, the Florida ~~OPC~~Office of Public Counsel and other customer representatives

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

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

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

AFS	Available for Sale

AFUDC	Allowance for funds used during construction

~~AMI~~	~~Advanced Metering Infrastructure~~

AMT	Alternative Minimum Tax

ARO	Asset retirement obligations

Bison	Bison Insurance Company Limited

CC	Combined Cycle

CCR	Coal Combustion Residuals

CARES Act	Coronavirus Aid, Relief and Economic Security Act

~~Citrus County CC~~	~~Citrus County Combined Cycle Facility~~

Coal Ash Act	North Carolina Coal Ash Management Act of 2014

the ~~Company~~company	Duke Energy Corporation and its subsidiaries

Constitution	Constitution Pipeline Company, LLC

COVID-19	Coronavirus Disease 2019

CRC	Cinergy Receivables Company, LLC

Crystal River Unit 3	Crystal River Unit 3 Nuclear Plant

DEFPF	Duke Energy Florida Project Finance, LLC

DEFR	Duke Energy Florida Receivables, LLC

DEPR	Duke Energy Progress Receivables, LLC

DERF	Duke Energy Receivables Finance Company, LLC

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 Kentucky	Duke Energy Kentucky, Inc.

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

EDIT	Excess deferred income tax

EPA	U.S. Environmental Protection Agency

EPS	Earnings Per Share

ESP	Electric Security Plan

ETR	Effective tax rate

Exchange Act	Securities Exchange Act of 1934



GLOSSARY OF TERMS




~~Exchange Act~~	~~Securities Exchange Act of 1934~~

~~FASB~~	~~Financial Accounting Standards Board~~

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 ~~EPS~~Earnings Per Share Available to Duke Energy Corporation common stockholders

GWh	Gigawatt-hours

IGCC	Integrated Gasification Combined Cycle

IMR	Integrity Management Rider

~~IRP~~	~~Integrated Resource Plan~~

IRS	Internal Revenue Service

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

IURC	Indiana Utility Regulatory Commission

KPSC	Kentucky Public Service Commission

LLC	Limited Liability Company

MGP	Manufactured gas plant

MMBtu	Million British Thermal Unit

MW	Megawatt

MWh	Megawatt-hour

~~NCDEQ~~	~~North Carolina Department of Environmental Quality~~

NCUC	North Carolina Utilities Commission

NDTF	Nuclear decommissioning trust funds

NPNS	Normal purchase/normal sale

OPEB	Other Post-Retirement Benefit Obligations

ORS	South Carolina Office of Regulatory Staff

~~OTTI~~	~~Other-than-temporary impairment~~

OVEC	Ohio Valley Electric Corporation

Piedmont	Piedmont Natural Gas Company, Inc.

PPA	Purchase Power Agreement

Progress Energy	Progress Energy, Inc.

PSCSC	Public Service Commission of South Carolina

PUCO	Public Utilities Commission of Ohio

~~ROU assets~~	~~Right-of-use assets~~

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

the Tax Act	Tax Cuts and Jobs Act

TPUC	Tennessee Public Utility Commission

U.S.	United States

VIE	Variable Interest Entity

WACC	Weighted Average Cost of Capital



FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS

DUKE ENERGY CORPORATION

Condensed Consolidated Statements of Operations

(Unaudited)


	Three Months Ended						Three Months Ended						Nine Months Ended
	March 31,						September 30,						September 30,
(in millions, except per share amounts)	2020			2019			2020			2019			2020			2019
Operating Revenues
Regulated electric	$	5,124		$	5,285		$	6,315		$	6,515		$	16,402		$	17,223
Regulated natural gas	638			728			214			223			1,115			1,231
Nonregulated electric and other	187			150			192			202			574			522
Total operating revenues	5,949			6,163			6,721			6,940			18,091			18,976
Operating Expenses
Fuel used in electric generation and purchased power	1,447			1,609			1,849			1,978			4,645			5,228
Cost of natural gas	199			327			41			48			299			451
Operation, maintenance and other	1,339			1,419			1,450			1,484			4,142			4,337
Depreciation and amortization	1,130			1,089			1,217			1,186			3,497			3,364
Property and other taxes	345			343			324			335			1,003			1,012
Impairment charges	2			—			28			(20		)	36			(16		)
Total operating expenses	4,462			4,787			4,909			5,011			13,622			14,376
Gains (Losses) on Sales of Other Assets and Other, net	1			(3		)
Gains on Sales of Other Assets and Other, net							2			—			10			—
Operating Income	1,488			1,373			1,814			1,929			4,479			4,600
Other Income and Expenses
Equity in earnings of unconsolidated affiliates	44			43
Equity in (losses) earnings of unconsolidated affiliates							(80		)	50			(2,004		)	137
Other income and expenses, net	46			115			127			104			310			308
Total other income and expenses	90			158			47			154			(1,694		)	445
Interest Expense	551			543			522			572			1,627			1,657
Income Before Income Taxes	1,027			988			1,339			1,511			1,158			3,388
Income Tax Expense	137			95
Income Tax Expense (Benefit)							105			188			(74		)	424
Net Income	890			893			1,234			1,323			1,232			2,964
Less: Net Loss Attributable to Noncontrolling Interests	(48		)	(7		)
Add: Net Loss Attributable to Noncontrolling Interests							70			19			208			110
Net Income Attributable to Duke Energy Corporation	938			900			1,304			1,342			1,440			3,074
Less: Preferred Dividends	39			—			39			15			93			27
Net Income Available to Duke Energy Corporation Common Stockholders	$	899		$	900		$	1,265		$	1,327		$	1,347		$	3,047

Earnings Per Share – Basic and Diluted
Net income available to Duke Energy Corporation common stockholders
Basic and Diluted	$	1.24		$	1.24		$	1.74		$	1.82		$	1.85		$	4.18
Weighted average shares outstanding
Basic	734			727
Diluted	736			727
Weighted Average Shares Outstanding
Basic and Diluted							735			729			735			728

See Notes to Condensed Consolidated Financial Statements



FINANCIAL STATEMENTS

DUKE ENERGY CORPORATION

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)


	Three Months Ended						Three Months Ended						Nine Months Ended
	March 31,						September 30,						September 30,
(in millions)	2020			2019			2020			2019			2020			2019
Net Income	$	890		$	893		$	1,234		$	1,323		$	1,232		$	2,964
Other Comprehensive Loss, net of tax^(a)
Pension and OPEB adjustments	1			—			1			(2		)	1			1
Net unrealized losses on cash flow hedges	(81		)	(17		)	(83		)	(16		)	(159		)	(62		)
Reclassification into earnings from cash flow hedges	2			1			4			1			8			4
Unrealized gains on available-for-sale securities	1			4
Unrealized (losses) gains on available-for-sale securities							(2		)	2			5			10
Other Comprehensive Loss, net of tax	(77		)	(12		)	(80		)	(15		)	(145		)	(47		)
Comprehensive Income	813			881			1,154			1,308			1,087			2,917
Less: Comprehensive Loss Attributable to Noncontrolling Interests	(62		)	(7		)
Add: Comprehensive Loss Attributable to Noncontrolling Interests							70			19			220			110
Comprehensive Income Attributable to Duke Energy	875			888			1,224			1,327			1,307			3,027
Less: Preferred Dividends	39			—			39			15			93			27
Comprehensive Income Available to Duke Energy Corporation Common Stockholders	$	836		$	888		$	1,185		$	1,312		$	1,214		$	3,000


(a)	Net of income tax ~~impact~~impacts of approximately ~~$23~~$24 million infor the ~~first quarter of~~three months ended September 30, 2020, and $43 million and $14 million for the nine months ended September 30, 2020, and 2019, respectively. All other periods presented include immaterial income tax ~~impact in the first quarter of 2019.~~impacts.

See Notes to Condensed Consolidated Financial Statements



FINANCIAL STATEMENTS

DUKE ENERGY CORPORATION

Condensed Consolidated Balance Sheets

(Unaudited)


(in millions)	March 31, 2020			December 31, 2019			September 30, 2020			December 31, 2019
ASSETS
Current Assets
Cash and cash equivalents	$	1,450		$	311		$	308		$	311
Receivables (net of allowance for doubtful accounts of $28 at 2020 and $22 at 2019)	809			1,066
Receivables of VIEs (net of allowance for doubtful accounts of $61 at 2020 and $54 at 2019)	1,828			1,994
Receivables (net of allowance for doubtful accounts of $27 at 2020 and $22 at 2019)							719			1,066
Receivables of VIEs (net of allowance for doubtful accounts of $106 at 2020 and $54 at 2019)							2,320			1,994
Inventory	3,324			3,232			3,190			3,232
Regulatory assets (includes $53 at 2020 and $52 at 2019 related to VIEs)	1,770			1,796			1,637			1,796
Other (includes $300 at 2020 and $242 at 2019 related to VIEs)	1,000			764
Other (includes $335 at 2020 and $242 at 2019 related to VIEs)							505			764
Total current assets	10,181			9,163			8,679			9,163
Property, Plant and Equipment
Cost	149,676			147,654			153,916			147,654
Accumulated depreciation and amortization	(46,599		)	(45,773		)	(48,185		)	(45,773		)
Generation facilities to be retired, net	31			246			29			246
Net property, plant and equipment	103,108			102,127			105,760			102,127
Other Noncurrent Assets
Goodwill	19,303			19,303			19,303			19,303
Regulatory assets (includes $980 at 2020 and $989 at 2019 related to VIEs)	13,413			13,222
Regulatory assets (includes $951 at 2020 and $989 at 2019 related to VIEs)							13,264			13,222
Nuclear decommissioning trust funds	7,052			8,140			8,363			8,140
Operating lease right-of-use assets, net	1,633			1,658			1,577			1,658
Investments in equity method unconsolidated affiliates	2,067			1,936			924			1,936
Other (includes $87 at 2020 and $110 at 2019 related to VIEs)	3,315			3,289
Other (includes $90 at 2020 and $110 at 2019 related to VIEs)							3,539			3,289
Total other noncurrent assets	46,783			47,548			46,970			47,548
Total Assets	$	160,072		$	158,838		$	161,409		$	158,838
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable	$	2,364		$	3,487		$	2,486		$	3,487
Notes payable and commercial paper	3,033			3,135			3,425			3,135
Taxes accrued	493			392			768			392
Interest accrued	571			565			556			565
Current maturities of long-term debt (includes $216 at 2020 and 2019 related to VIEs)	5,077			3,141
Current maturities of long-term debt (includes $466 at 2020 and $216 at 2019 related to VIEs)							4,669			3,141
Asset retirement obligations	802			881			742			881
Regulatory liabilities	826			784			1,218			784
Other	2,004			2,367			2,829			2,367
Total current liabilities	15,170			14,752			16,693			14,752
Long-Term Debt (includes $3,966 at 2020 and $3,997 at 2019 related to VIEs)	56,311			54,985
Long-Term Debt (includes $3,628 at 2020 and $3,997 at 2019 related to VIEs)							56,049			54,985
Other Noncurrent Liabilities
Deferred income taxes	9,321			8,878			9,170			8,878
Asset retirement obligations	12,497			12,437			12,912			12,437
Regulatory liabilities	14,029			15,264			14,546			15,264
Operating lease liabilities	1,414			1,432			1,379			1,432
Accrued pension and other post-retirement benefit costs	919			934			903			934
Investment tax credits	659			624			689			624
Other (includes $258 at 2020 and $228 at 2019 related to VIEs)	1,669			1,581
Other (includes $342 at 2020 and $228 at 2019 related to VIEs)							1,773			1,581
Total other noncurrent liabilities	40,508			41,150			41,372			41,150
Commitments and Contingencies
Equity
Preferred stock, Series A, $0.001 par value, 40 million depositary shares authorized and outstanding at 2020 and 2019	973			973			973			973
Preferred stock, Series B, $0.001 par value, 1 million shares authorized and outstanding at 2020 and 2019	989			989			989			989
Common stock, $0.001 par value, 2 billion shares authorized; 735 million shares outstanding at 2020 and 733 million shares outstanding at 2019	1			1
Common stock, $0.001 par value, 2 billion shares authorized; 736 million shares outstanding at 2020 and 733 million shares outstanding at 2019							1			1
Additional paid-in capital	40,930			40,881			41,046			40,881
Retained earnings	4,221			4,108			3,260			4,108
Accumulated other comprehensive loss	(193		)	(130		)	(263		)	(130		)
Total Duke Energy Corporation stockholders' equity	46,921			46,822			46,006			46,822
Noncontrolling interests	1,162			1,129			1,289			1,129
Total equity	48,083			47,951			47,295			47,951
Total Liabilities and Equity	$	160,072		$	158,838		$	161,409		$	158,838

See Notes to Condensed Consolidated Financial Statements



FINANCIAL STATEMENTS

DUKE ENERGY CORPORATION

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Three Months Ended						Nine Months Ended
	March 31,						September 30,
(in millions)	2020			2019			2020			2019
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	890		$	893
Adjustments to reconcile net income to net cash provided by operating activities:
Net (loss) income							$	1,232		$	2,964
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation, amortization and accretion (including amortization of nuclear fuel)	1,301			1,238			4,081			3,831
Equity in losses (earnings) of unconsolidated affiliates							2,004			(137		)
Equity component of AFUDC	(40		)	(31		)	(112		)	(99		)
(Gains) Losses on sales of other assets	(1		)	3
Gains on sales of other assets							(10		)	—
Impairment charges	2			—			36			(16		)
Deferred income taxes	422			97			210			736
Equity in earnings of unconsolidated affiliates	(44		)	(43		)
Contributions to qualified pension plans							—			(77		)
Payments for asset retirement obligations	(132		)	(152		)	(463		)	(582		)
Provision for rate refunds	(13		)	35			(15		)	61
Refund of AMT credit carryforwards							572			—
(Increase) decrease in
Net realized and unrealized mark-to-market and hedging transactions	—			10			87			(4		)
Receivables	466			388			58			62
Inventory	(92		)	(31		)	43			(3		)
Other current assets	(131		)	98			199			(134		)
Increase (decrease) in
Accounts payable	(657		)	(636		)	(563		)	(538		)
Taxes accrued	113			(107		)	386			125
Other current liabilities	(455		)	(407		)	(284		)	(198		)
Other assets	(25		)	(162		)	(328		)	(279		)
Other liabilities	(50		)	46			(367		)	(75		)
Net cash provided by operating activities	1,554			1,239			6,766			5,637
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(2,832		)	(2,536		)	(7,408		)	(8,084		)
Contributions to equity method investments	(77		)	(94		)	(276		)	(264		)
Purchases of debt and equity securities	(1,392		)	(860		)	(6,160		)	(3,105		)
Proceeds from sales and maturities of debt and equity securities	1,347			851			6,087			3,092
Other	(68		)	(74		)	(207		)	(272		)
Net cash used in investing activities	(3,022		)	(2,713		)	(7,964		)	(8,633		)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the:
Issuance of long-term debt	1,954			2,737			6,162			6,131
Issuance of preferred stock	—			974			—			1,963
Issuance of common stock	40			13			75			41
Payments for the redemption of long-term debt	(292		)	(1,201		)	(3,468		)	(2,737		)
Proceeds from the issuance of short-term debt with original maturities greater than 90 days	1,784			135			2,372			339
Payments for the redemption of short-term debt with original maturities greater than 90 days	(17		)	(239		)	(1,143		)	(479		)
Notes payable and commercial paper	(198		)	(304		)	(969		)	(879		)
Contributions from noncontrolling interests	103			6			402			615
Dividends paid	(707		)	(649		)	(2,113		)	(1,990		)
Other	(74		)	(39		)	(93		)	(17		)
Net cash provided by financing activities	2,593			1,433			1,225			2,987
Net increase (decrease) in cash, cash equivalents and restricted cash	1,125			(41		)	27			(9		)
Cash, cash equivalents and restricted cash at beginning of period	573			591			573			591
Cash, cash equivalents and restricted cash at end of period	$	1,698		$	550		$	600		$	582
Supplemental Disclosures:
Significant non-cash transactions:
Accrued capital expenditures	$	934		$	811		$	992		$	1,073
Non-cash dividends	27			27			82			81

See Notes to Condensed Consolidated Financial Statements



FINANCIAL STATEMENTS

DUKE ENERGY CORPORATION

Condensed Consolidated Statements of Changes in Equity

(Unaudited)



	Three Months Ended September 30, 2019 and 2020
												Accumulated Other Comprehensive
												(Loss) Income
															Net Unrealized						Total
												Net Gains			(Losses) Gains						Duke Energy
			Common			Additional						(Losses) on			on Available-			Pension and			Corporation
	Preferred		Stock	Common		Paid-in			Retained			Cash Flow			for-Sale-			OPEB			Stockholders'			Noncontrolling			Total
(in millions)	Stock		Shares	Stock		Capital			Earnings			Hedges			Securities			Adjustments			Equity			Interests			Equity
Balance at June 30, 2019	$	973	728	$	1	$	40,885		$	3,502		$	(63	)	$	4		$	(89	)	$	45,213		$	119		$	45,332
Net income (loss)	—		—	—		—			1,327			—			—			—			1,327			(19		)	1,308
Other comprehensive (loss) income	—		—	—		—			—			(15		)	2			(2		)	(15		)	—			(15		)
Preferred stock, Series B, issuances, net of issuance costs^(a)	990		—	—		—			—			—			—			—			990			—			990
Common stock issuances, including dividend reinvestment and employee benefits	—		1	—		69			—			—			—			—			69			—			69
Common stock dividends	—		—	—		—			(690		)	—			—			—			(690		)	—			(690		)
Sale of noncontrolling interest^(b)	—		—	—		(465		)	—			10			—			—			(455		)	863			408
Contribution from noncontrolling interests, net of transaction costs	—		—	—		—			—			—			—			—			—			7			7
Other	—		—	—		(1		)	—			—			—			—			(1		)	(1		)	(2		)
Balance at September 30, 2019	$	1,963	729	$	1	$	40,488		$	4,139		$	(68	)	$	6		$	(91	)	$	46,438		$	969		$	47,407

Balance at June 30, 2020	$	1,962	735	$	1	$	40,997		$	2,707		$	(111	)	$	10		$	(82	)	$	45,484		$	1,127		$	46,611
Net income (loss)	—		—	—		—			1,265			—			—			—			1,265			(70		)	1,195
Other comprehensive (loss) income	—		—	—		—			—			(79		)	(2		)	1			(80		)	—			(80		)
Common stock issuances, including dividend reinvestment and employee benefits	—		1	—		65			—			—			—			—			65			—			65
Common stock dividends	—		—	—		—			(712		)	—			—			—			(712		)	—			(712		)
Contribution from noncontrolling interests, net of transaction costs^(d)	—		—	—		(17		)	—			—			—			—			(17		)	239			222
Distributions to noncontrolling interest in subsidiaries	—		—	—		—			—			—			—			—			—			(8		)	(8		)
Other	—		—	—		1			—			—			—			—			1			1			2
Balance at September 30, 2020	$	1,962	736	$	1	$	41,046		$	3,260		$	(190	)	$	8		$	(81	)	$	46,006		$	1,289		$	47,295

See Notes to Condensed Consolidated Financial Statements



										FINANCIAL STATEMENTS

Accumulated Other Comprehensive
(Loss) Income
Net Unrealized
Total

Net
(Losses) Gains
Duke Energy

Common
Additional
Losses on
on Available-
Pension and
Corporation

Preferred
Stock
Common
Paid-in
Retained
Cash Flow
for-Sale-
OPEB
Stockholders'
Noncontrolling
Total
(in millions) Stock
Shares
Stock
Capital
Earnings
Hedges
Securities
Adjustments
Equity
Interests
Equity
Balance at December 31, 2018 $ —
727
$ 1
$ 40,795
$ 3,113
$ (14 ) $ (3 ) $ (75 ) $ 43,817
$ 17
$ 43,834
Net income (loss) —
—
—
—
900
—
—
—
900
(7 ) 893
Other comprehensive (loss) income —
—
—
—
—
(16 ) 4
—
(12 ) —
(12 )
Preferred stock, Series A, issuances, net of issuance costs^(a)
974
—
—
—
—
—
—
—
974
—
974
Common stock issuances, including dividend reinvestment and employee benefits —
1
—
28
—
—
—
—
28
—
28
Common stock dividends —
—
—
—
(676 ) —
—
—
(676 ) —
(676 )
Other^(b)
—
—
—
—
23
(6 ) (1 ) (17 ) (1 ) 5
4
Balance at March 31, 2019 $ 974
728
$ 1
$ 40,823
$ 3,360
$ (36 ) $ —
$ (92 ) $ 45,030
$ 15
$ 45,045

Balance at December 31, 2019 $ 1,962
733
$ 1
$ 40,881
$ 4,108
$ (51 ) $ 3
$ (82 ) $ 46,822
$ 1,129
$ 47,951
Net income (loss) —
—
—
—
899
—
—
—
899
(48 ) 851
Other comprehensive (loss) income —
—
—
—
—
(65 ) 1
1
(63 ) (14 ) (77 )
Common stock issuances, including dividend reinvestment and employee benefits —
2
—
50
—
—
—
—
50
—
50
Common stock dividends —
—
—
—
(695 ) —
—
—
(695 ) —
(695 )
Contributions from noncontrolling interest in subsidiaries —
—
—
—
—
—
—
—
—
103
103
Distributions to noncontrolling interest in subsidiaries —
—
—
—
—
—
—
—
—
(7 ) (7 )
Other^(c)
—
—
—
(1 ) (91 ) —
—
—
(92 ) (1 ) (93 )
Balance at March 31, 2020 $ 1,962
735
$ 1
$ 40,930
$ 4,221
$ (116 ) $ 4
$ (81 ) $ 46,921
$ 1,162
$ 48,083



	Nine Months Ended September 30, 2019 and 2020
												Accumulated Other Comprehensive
												(Loss) Income
															Net Unrealized						Total
												Net			(Losses) Gains						Duke Energy
			Common			Additional						Losses on			on Available-			Pension and			Corporation
	Preferred		Stock	Common		Paid-in			Retained			Cash Flow			for-Sale-			OPEB			Stockholders'			Noncontrolling			Total
(in millions)	Stock		Shares	Stock		Capital			Earnings			Hedges			Securities			Adjustments			Equity			Interests			Equity
Balance at December 31, 2018	$	—	727	$	1	$	40,795		$	3,113		$	(14	)	$	(3	)	$	(75	)	$	43,817		$	17		$	43,834
Net income (loss)	—		—	—		—			3,047			—			—			—			3,047			(110		)	2,937
Other comprehensive (loss) income	—		—	—		—			—			(58		)	10			1			(47		)	—			(47		)
Preferred stock, Series A, issuances, net of issuance costs^(c)	973		—	—		—			—			—			—			—			973			—			973
Preferred stock, Series B, issuances, net of issuance costs^(a)	990		—	—		—			—			—			—			—			990			—			990
Common stock issuances, including dividend reinvestment and employee benefits	—		2	—		158			—			—			—			—			158			—			158
Common stock dividends	—		—	—		—			(2,044		)	—			—			—			(2,044		)	—			(2,044		)
Sale of noncontrolling interest^(b)	—		—	—		(465		)	—			10			—			—			(455		)	863			408
Contributions from noncontrolling interests, net of transaction costs^(d)	—		—	—		—			—			—			—			—			—			200			200
Distributions to noncontrolling interest in subsidiaries	—		—	—		—			—			—			—			—			—			(1		)	(1		)
Other^(e)	—		—	—		—			23			(6		)	(1		)	(17		)	(1		)	—			(1		)
Balance at September 30, 2019	$	1,963	729	$	1	$	40,488		$	4,139		$	(68	)	$	6		$	(91	)	$	46,438		$	969		$	47,407

Balance at December 31, 2019	$	1,962	733	$	1	$	40,881		$	4,108		$	(51	)	$	3		$	(82	)	$	46,822		$	1,129		$	47,951
Net income (loss)	—		—	—		—			1,347			—			—			—			1,347			(208		)	1,139
Other comprehensive (loss) income	—		—	—		—			—			(139		)	5			1			(133		)	(12		)	(145		)
Common stock issuances, including dividend reinvestment and employee benefits	—		3	—		181			—			—			—			—			181			—			181
Common stock dividends	—		—	—		—			(2,103		)	—			—			—			(2,103		)	—			(2,103		)
Contributions from noncontrolling interests, net of transaction costs^(d)	—		—	—		(17		)	—			—			—			—			(17		)	402			385
Distributions to noncontrolling interest in subsidiaries	—		—	—		—			—			—			—			—			—			(22		)	(22		)
Other^(f)	—		—	—		1			(92		)	—			—			—			(91		)	—			(91		)
Balance at September 30, 2020	$	1,962	736	$	1	$	41,046		$	3,260		$	(190	)	$	8		$	(81	)	$	46,006		$	1,289		$	47,295


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


(b)	See Note 2 for additional discussion of the transaction.


(c)	Duke Energy issued 40 million depositary shares of preferred stock, Series A.


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


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


~~(c)~~(f)	Amounts in Retained earnings primarily represent impacts due to implementation of a new accounting standard related to Current Estimated Credit Losses. See Note 1 for additional discussion.

See Notes to Condensed Consolidated Financial Statements



FINANCIAL STATEMENTS

DUKE ENERGY CAROLINAS, LLC

Condensed Consolidated Statements of Operations and Comprehensive Income

(Unaudited)


	Three Months Ended				Three Months Ended				Nine Months Ended
	March 31,				September 30,				September 30,
(in millions)	2020		2019		2020		2019		2020		2019
Operating Revenues	$	1,748	$	1,744	$	2,058	$	2,162	$	5,416	$	5,619
Operating Expenses
Fuel used in electric generation and purchased power	453		472		497		504		1,326		1,371
Operation, maintenance and other	386		440		402		443		1,218		1,324
Depreciation and amortization	343		317		372		350		1,090		1,013
Property and other taxes	81		80		57		66		213		221
Impairment charges	2		—		20		6		22		11
Total operating expenses	1,265		1,309		1,348		1,369		3,869		3,940
Gains on Sales of Other Assets and Other, net	1		—		1		—		1		—
Operating Income	484		435		711		793		1,548		1,679
Other Income and Expenses, net	43		31		42		34		128		106
Interest Expense	123		110		122		119		370		346
Income Before Income Taxes	404		356		631		708		1,306		1,439
Income Tax Expense	65		63		76		118		178		255
Net Income and Comprehensive Income	$	339	$	293	$	555	$	590	$	1,128	$	1,184

See Notes to Condensed Consolidated Financial Statements



FINANCIAL STATEMENTS

DUKE ENERGY CAROLINAS, LLC

Condensed Consolidated Balance Sheets

(Unaudited)


(in millions)	March 31, 2020			December 31, 2019			September 30, 2020			December 31, 2019
ASSETS
Current Assets
Cash and cash equivalents	$	16		$	18		$	23		$	18
Receivables (net of allowance for doubtful accounts of $3 at 2020 and 2019)	212			324
Receivables of VIEs (net of allowance for doubtful accounts of $8 at 2020 and $7 at 2019)	616			642
Receivables (net of allowance for doubtful accounts of $1 at 2020 and $3 at 2019)							177			324
Receivables of VIEs (net of allowance for doubtful accounts of $21 at 2020 and $7 at 2019)							770			642
Receivables from affiliated companies	87			114			64			114
Notes receivable from affiliated companies	436			—			65			—
Inventory	1,067			996			992			996
Regulatory assets	524			550			495			550
Other	31			21			44			21
Total current assets	2,989			2,665			2,630			2,665
Property, Plant and Equipment
Cost	49,534			48,922			50,622			48,922
Accumulated depreciation and amortization	(16,884		)	(16,525		)	(17,406		)	(16,525		)
Net property, plant and equipment	32,650			32,397			33,216			32,397
Other Noncurrent Assets
Regulatory assets	3,427			3,360			3,400			3,360
Nuclear decommissioning trust funds	3,717			4,359			4,506			4,359
Operating lease right-of-use assets, net	132			123			117			123
Other	1,136			1,149			1,179			1,149
Total other noncurrent assets	8,412			8,991			9,202			8,991
Total Assets	$	44,051		$	44,053		$	45,048		$	44,053
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable	$	605		$	954		$	583		$	954
Accounts payable to affiliated companies	225			210			155			210
Notes payable to affiliated companies	—			29			—			29
Taxes accrued	132			46			398			46
Interest accrued	144			115			130			115
Current maturities of long-term debt	457			458			751			458
Asset retirement obligations	197			206			267			206
Regulatory liabilities	275			255			430			255
Other	479			611			487			611
Total current liabilities	2,514			2,884			3,201			2,884
Long-Term Debt	12,050			11,142			11,497			11,142
Long-Term Debt Payable to Affiliated Companies	300			300			300			300
Other Noncurrent Liabilities
Deferred income taxes	3,968			3,921			3,915			3,921
Asset retirement obligations	5,552			5,528			5,507			5,528
Regulatory liabilities	5,766			6,423			6,243			6,423
Operating lease liabilities	112			102			102			102
Accrued pension and other post-retirement benefit costs	82			84			76			84
Investment tax credits	230			231			237			231
Other	640			627			644			627
Total other noncurrent liabilities	16,350			16,916			16,724			16,916
Commitments and Contingencies
Equity
Member's equity	12,844			12,818			13,333			12,818
Accumulated other comprehensive loss	(7		)	(7		)	(7		)	(7		)
Total equity	12,837			12,811			13,326			12,811
Total Liabilities and Equity	$	44,051		$	44,053		$	45,048		$	44,053

See Notes to Condensed Consolidated Financial Statements



FINANCIAL STATEMENTS

DUKE ENERGY CAROLINAS, LLC

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Three Months Ended						Nine Months Ended
	March 31,						September 30,
(in millions)	2020			2019			2020			2019
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	339		$	293		$	1,128		$	1,184
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization (including amortization of nuclear fuel)	414			388			1,295			1,227
Equity component of AFUDC	(14		)	(9		)	(46		)	(29		)
Gains on sales of other assets	(1		)	—			(1		)	—
Impairment charges	2			—			22			11
Deferred income taxes	22			64			(103		)	96
Contributions to qualified pension plans							—			(7		)
Payments for asset retirement obligations	(41		)	(65		)	(127		)	(234		)
Provision for rate refunds	—			19			(1		)	34
(Increase) decrease in
Net realized and unrealized mark-to-market and hedging transactions	—			1			—			(7		)
Receivables	156			124			41			(80		)
Receivables from affiliated companies	27			94			50			74
Inventory	(72		)	(59		)	4			5
Other current assets	96			(35		)	197			(117		)
Increase (decrease) in
Accounts payable	(253		)	(266		)	(313		)	(284		)
Accounts payable to affiliated companies	15			18			(55		)	(56		)
Taxes accrued	87			(91		)	352			91
Other current liabilities	(108		)	(70		)	(121		)	44
Other assets	(60		)	(31		)	(71		)	(2		)
Other liabilities	(11		)	(7		)	(23		)	(44		)
Net cash provided by operating activities	598			368			2,228			1,906
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(724		)	(721		)	(1,931		)	(1,984		)
Purchases of debt and equity securities	(607		)	(405		)	(1,313		)	(1,658		)
Proceeds from sales and maturities of debt and equity securities	607			405			1,313			1,658
Notes receivable from affiliated companies	(436		)	—			(65		)	—
Other	(18		)	(9		)	(105		)	(80		)
Net cash used in investing activities	(1,178		)	(730		)	(2,101		)	(2,064		)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt	910			25			965			819
Payments for the redemption of long-term debt	(2		)	(1		)	(457		)	(5		)
Notes payable to affiliated companies	(29		)	306			(29		)	(390		)
Distributions to parent	(300		)	—			(600		)	(275		)
Other	(1		)	(1		)	(1		)	(1		)
Net cash provided by financing activities	578			329
Net decrease in cash and cash equivalents	(2		)	(33		)
Net cash (used in) provided by financing activities							(122		)	148
Net increase (decrease) in cash and cash equivalents							5			(10		)
Cash and cash equivalents at beginning of period	18			33			18			33
Cash and cash equivalents at end of period	$	16		$	—		$	23		$	23
Supplemental Disclosures:
Significant non-cash transactions:
Accrued capital expenditures	$	254		$	221		$	295		$	261

See Notes to Condensed Consolidated Financial Statements



FINANCIAL STATEMENTS

DUKE ENERGY CAROLINAS, LLC

Condensed Consolidated Statements of Changes in Equity

(Unaudited)


										Three Months Ended September 30, 2019 and 2020
													Accumulated Other
													Comprehensive
													Loss
										Member's			Net Losses on			Total
(in millions)										Equity			Cash Flow Hedges			Equity
Balance at June 30, 2019										$	12,283		$	(7	)	$	12,276
Net income										590			—			590
Distributions to parent										(275		)	—			(275		)
Balance at September 30, 2019										$	12,598		$	(7	)	$	12,591

Balance at June 30, 2020										$	13,079		$	(7	)	$	13,072
Net income										555			—			555
Distributions to parent										(300		)	—			(300		)
Other										(1		)	—			(1		)
Balance at September 30, 2020										$	13,333		$	(7	)	$	13,326

										Nine Months Ended September 30, 2019 and 2020
				Accumulated Other									Accumulated Other
				Comprehensive									Comprehensive
				Loss									Loss
	Member's			Net Losses on			Total			Member's			Net Losses on			Total
(in millions)	Equity			Cash Flow Hedges			Equity			Equity			Cash Flow Hedges			Equity
Balance at December 31, 2018	$	11,689		$	(6	)	$	11,683		$	11,689		$	(6	)	$	11,683
Net income	293			—			293			1,184			—			1,184
Distributions to parent										(275		)	—			(275		)
Other	—			(1		)	(1		)	—			(1		)	(1		)
Balance at March 31, 2019	$	11,982		$	(7	)	$	11,975
Balance at September 30, 2019										$	12,598		$	(7	)	$	12,591

Balance at December 31, 2019	$	12,818		$	(7	)	$	12,811		$	12,818		$	(7	)	$	12,811
Net income	339			—			339			1,128			—			1,128
Distributions to parent	(300		)	—			(300		)	(600		)	—			(600		)
Other^(a)	(13		)	—			(13		)	(13		)	—			(13		)
Balance at March 31, 2020	$	12,844		$	(7	)	$	12,837
Balance at September 30, 2020										$	13,333		$	(7	)	$	13,326


(a)	Amounts primarily represent impacts due to implementation of a new accounting standard related to Current Estimated Credit Losses. See Note 1 for additional discussion.

See Notes to Condensed Consolidated Financial Statements



FINANCIAL STATEMENTS

PROGRESS ENERGY, INC.

Condensed Consolidated Statements of Operations and Comprehensive Income

(Unaudited)


	Three Months Ended						Three Months Ended					Nine Months Ended
	March 31,						September 30,					September 30,
(in millions)	2020			2019			2020		2019			2020		2019
Operating Revenues	$	2,422		$	2,572		$	3,197	$	3,242		$	8,117	$	8,558
Operating Expenses
Fuel used in electric generation and purchased power	763			925			1,088		1,187			2,628		3,100
Operation, maintenance and other	554			567			646		640			1,789		1,813
Depreciation and amortization	452			455			472		496			1,356		1,377
Property and other taxes	135			137			147		159			419		439
Impairment charges							1		(25		)	1		(25		)
Total operating expenses	1,904			2,084			2,354		2,457			6,193		6,704
Losses on Sales of Other Assets and Other, net	(1		)	—
Gains on Sales of Other Assets and Other, net							3		1			9		—
Operating Income	517			488			846		786			1,933		1,854
Other Income and Expenses, net	32			31			24		41			89		106
Interest Expense	206			219			194		212			599		650
Income Before Income Taxes	343			300			676		615			1,423		1,310
Income Tax Expense	60			52			70		94			190		212
Net Income	283			248			606		521			1,233		1,098
Less: Net Loss Attributable to Noncontrolling Interests	—			(1		)
Less: Net Income Attributable to Noncontrolling Interests							1		0			1		0
Net Income Attributable to Parent	$	283		$	249		$	605	$	521		$	1,232	$	1,098

Net Income	$	283		$	248		$	606	$	521		$	1,233	$	1,098
Other Comprehensive Income, net of tax
Pension and OPEB adjustments	—			1			—		—			1		2
Net unrealized gains on cash flow hedges	1			2			1		1			3		4
Unrealized gains on available-for-sale securities	1			—			1		1			1		2
Other Comprehensive Income, net of tax	2			3			2		2			5		8
Comprehensive Income	285			251			608		523			1,238		1,106
Less: Comprehensive Loss Attributable to Noncontrolling Interests	—			(1		)
Less: Comprehensive Income Attributable to Noncontrolling Interests							1		—			1		0
Comprehensive Income Attributable to Parent	$	285		$	252		$	607	$	523		$	1,237	$	1,106

See Notes to Condensed Consolidated Financial Statements



FINANCIAL STATEMENTS

PROGRESS ENERGY, INC.

Condensed Consolidated Balance Sheets

(Unaudited)


(in millions)	March 31, 2020			December 31, 2019			September 30, 2020			December 31, 2019
ASSETS
Current Assets
Cash and cash equivalents	$	52		$	48		$	70		$	48
Receivables (net of allowance for doubtful accounts of $8 at 2020 and $7 at 2019)	159			220
Receivables of VIEs (net of allowance for doubtful accounts of $12 at 2020 and $9 at 2019)	745			830
Receivables (net of allowance for doubtful accounts of $9 at 2020 and $7 at 2019)							196			220
Receivables of VIEs (net of allowance for doubtful accounts of $28 at 2020 and $9 at 2019)							1,071			830
Receivables from affiliated companies	49			76			44			76
Notes receivable from affiliated companies	—			164			—			164
Inventory	1,463			1,423			1,378			1,423
Regulatory assets (includes $53 at 2020 and $52 at 2019 related to VIEs)	954			946			775			946
Other (includes $13 at 2020 and $39 at 2019 related to VIEs)	196			210
Other (includes $16 at 2020 and $39 at 2019 related to VIEs)							81			210
Total current assets	3,618			3,917			3,615			3,917
Property, Plant and Equipment
Cost	55,788			55,070			57,152			55,070
Accumulated depreciation and amortization	(17,461		)	(17,159		)	(18,008		)	(17,159		)
Generation facilities to be retired, net	31			246			29			246
Net property, plant and equipment	38,358			38,157			39,173			38,157
Other Noncurrent Assets
Goodwill	3,655			3,655			3,655			3,655
Regulatory assets (includes $980 at 2020 and $989 at 2019 related to VIEs)	6,489			6,346
Regulatory assets (includes $951 at 2020 and $989 at 2019 related to VIEs)							6,270			6,346
Nuclear decommissioning trust funds	3,335			3,782			3,857			3,782
Operating lease right-of-use assets, net	762			788			710			788
Other	1,121			1,049			1,212			1,049
Total other noncurrent assets	15,362			15,620			15,704			15,620
Total Assets	$	57,338		$	57,694		$	58,492		$	57,694
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable	$	730		$	1,104		$	795		$	1,104
Accounts payable to affiliated companies	329			310			208			310
Notes payable to affiliated companies	2,300			1,821			2,159			1,821
Taxes accrued	117			46			310			46
Interest accrued	214			228			199			228
Current maturities of long-term debt (includes $54 at 2020 and 2019 related to VIEs)	1,828			1,577
Current maturities of long-term debt (includes $305 at 2020 and $54 at 2019 related to VIEs)							1,726			1,577
Asset retirement obligations	421			485			297			485
Regulatory liabilities	347			330			545			330
Other	821			902			756			902
Total current liabilities	7,107			6,803			6,995			6,803
Long-Term Debt (includes $1,603 at 2020 and $1,632 at 2019 related to VIEs)	17,377			17,907
Long-Term Debt (includes $1,351 at 2020 and $1,632 at 2019 related to VIEs)							17,989			17,907
Long-Term Debt Payable to Affiliated Companies	150			150			150			150
Other Noncurrent Liabilities
Deferred income taxes	4,537			4,462			4,508			4,462
Asset retirement obligations	6,020			5,986			6,058			5,986
Regulatory liabilities	4,708			5,225			4,809			5,225
Operating lease liabilities	678			697			637			697
Accrued pension and other post-retirement benefit costs	480			488			474			488
Other	404			383			443			383
Total other noncurrent liabilities	16,827			17,241			16,929			17,241
Commitments and Contingencies
Equity
Common Stock, $0.01 par value, 100 shares authorized and outstanding at 2020 and 2019	—			—			—			—
Additional paid-in capital	9,143			9,143			9,143			9,143
Retained earnings	6,747			6,465			7,296			6,465
Accumulated other comprehensive loss	(16		)	(18		)	(13		)	(18		)
Total Progress Energy, Inc. stockholders' equity	15,874			15,590			16,426			15,590
Noncontrolling interests	3			3			3			3
Total equity	15,877			15,593			16,429			15,593
Total Liabilities and Equity	$	57,338		$	57,694		$	58,492		$	57,694

See Notes to Condensed Consolidated Financial Statements



FINANCIAL STATEMENTS

PROGRESS ENERGY, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Three Months Ended						Nine Months Ended
	March 31,						September 30,
(in millions)	2020			2019			2020			2019
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	283		$	248		$	1,233		$	1,098
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and accretion (including amortization of nuclear fuel)	552			546			1,734			1,649
Equity component of AFUDC	(14		)	(15		)	(30		)	(48		)
Losses on sales of other assets	1			—
(Gains) Losses on sales of other assets							(9		)	—
Impairment charges							1			(25		)
Deferred income taxes	80			82			(3		)	342
Contributions to qualified pension plans							—			(57		)
Payments for asset retirement obligations	(79		)	(75		)	(287		)	(309		)
Provision for rate refunds	2			6			4			13
(Increase) decrease in
Net realized and unrealized mark-to-market and hedging transactions	1			1			(13		)	9
Receivables	149			187			(207		)	(128		)
Receivables from affiliated companies	27			122			32			135
Inventory	(40		)	(18		)	46			45
Other current assets	43			35			214			79
Increase (decrease) in
Accounts payable	(211		)	(196		)	(124		)	(64		)
Accounts payable to affiliated companies	19			(94		)	(102		)	(6		)
Taxes accrued	71			26			263			150
Other current liabilities	(128		)	(196		)	(41		)	(96		)
Other assets	(41		)	(111		)	(145		)	(282		)
Other liabilities	(56		)	(7		)	(102		)	(75		)
Net cash provided by operating activities	659			541			2,464			2,430
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(972		)	(1,012		)	(2,602		)	(2,866		)
Purchases of debt and equity securities	(651		)	(409		)	(4,554		)	(1,304		)
Proceeds from sales and maturities of debt and equity securities	643			405			4,543			1,300
Notes receivable from affiliated companies	164			(31		)	164			—
Other	(39		)	(45		)	(114		)	(130		)
Net cash used in investing activities	(855		)	(1,092		)	(2,563		)	(3,000		)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt	—			1,295			1,791			1,295
Payments for the redemption of long-term debt	(283		)	(1,132		)	(1,555		)	(1,263		)
Notes payable to affiliated companies	479			370			338			554
Dividends to parent							(400		)	—
Other	(1		)	1			(13		)	8
Net cash provided by financing activities	195			534			161			594
Net decrease in cash, cash equivalents and restricted cash	(1		)	(17		)
Net increase in cash, cash equivalents and restricted cash							62			24
Cash, cash equivalents and restricted cash at beginning of period	126			112			126			112
Cash, cash equivalents and restricted cash at end of period	$	125		$	95		$	188		$	136
Supplemental Disclosures:
Significant non-cash transactions:
Accrued capital expenditures	$	310		$	310		$	311		$	400

See Notes to Condensed Consolidated Financial Statements



FINANCIAL STATEMENTS

PROGRESS ENERGY, INC.

Condensed Consolidated Statements of Changes in Equity

(Unaudited)



	Three Months Ended September 30, 2019 and 2020
						Accumulated Other Comprehensive Loss
						Net Gains			Net Unrealized						Total Progress
	Additional					(Losses) on			Gains (Losses) on			Pension and			Energy, Inc.
	Paid-in		Retained			Cash Flow			Available-for-			OPEB			Stockholders'			Noncontrolling			Total
(in millions)	Capital		Earnings			Hedges			Sale Securities			Adjustments			Equity			Interests			Equity
Balance at June 30, 2019	$	9,143	$	5,715		$	(13	)	$	—		$	(8	)	$	14,837		$	2		$	14,839
Net income	—		521			—			—			—			521			—			521
Other comprehensive income	—		—			1			1			—			2			—			2
Other	—		—			—			(1		)	1			—			1			1
Balance at September 30, 2019	$	9,143	$	6,236		$	(12	)	$	—		$	(7	)	$	15,360		$	3		$	15,363

Balance at June 30, 2020	$	9,143	$	7,090		$	(8	)	$	(1	)	$	(6	)	$	16,218		$	3		$	16,221
Net income	—		605			—			—			—			605			1			606
Other comprehensive income	—		—			1			1			—			2			—			2
Dividends to parent	—		(400		)	—			—			—			(400		)	—			(400		)
Other	—		1			—			—			—			1			(1		)	—
Balance at September 30, 2020	$	9,143	$	7,296		$	(7	)	$	—		$	(6	)	$	16,426		$	3		$	16,429

	Nine Months Ended September 30, 2019 and 2020
						Accumulated Other Comprehensive Loss
						Net Gains			Net Unrealized						Total Progress
	Additional					(Losses) on			Gains (Losses) on			Pension and			Energy, Inc.
	Paid-in		Retained			Cash Flow			Available-for-			OPEB			Stockholders'			Noncontrolling			Total
	Capital		Earnings			Hedges			Sale Securities			Adjustments			Equity			Interests			Equity
Balance at December 31, 2018	$	9,143	$	5,131		$	(12	)	$	(1	)	$	(7	)	$	14,254		$	3		$	14,257
Net income	—		1,098			—			—			—			1,098			—			1,098
Other comprehensive income	—		—			4			2			2			8			—			8
Other^(a)	—		7			(4		)	(1		)	(2		)	—			—			—
Balance at September 30, 2019	$	9,143	$	6,236		$	(12	)	$	—		$	(7	)	$	15,360		$	3		$	15,363

Balance at December 31, 2019	$	9,143	$	6,465		$	(10	)	$	(1	)	$	(7	)	$	15,590		$	3		$	15,593
Net income	—		1,232			—			—			—			1,232			1			1,233
Other comprehensive income	—		—			3			1			1			5			—			5
Distributions to noncontrolling interests	—		—			—			—			—			—			(1		)	(1		)
Dividends to parent	—		(400		)	—			—			—			(400		)	—			(400		)
Other	—		(1		)	—			—			—			(1		)	—			(1		)
Balance at September 30, 2020	$	9,143	$	7,296		$	(7	)	$	—		$	(6	)	$	16,426		$	3		$	16,429

Accumulated Other Comprehensive Loss
Net
Net Unrealized
Total Progress

Additional
Losses on
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, 2018 $ 9,143
$ 5,131
$ (12 ) $ (1 ) $ (7 ) $ 14,254
$ 3
$ 14,257
Net income (loss) —
249
—
—
—
249
(1 ) 248
Other comprehensive income —
—
2
—
1
3
—
3
Other^(a)
—
6
(4 ) —
(2 ) —
—
—
Balance at March 31, 2019 $ 9,143

$ 5,386

$ (14 )
$ (1 )
$ (8 ) $ 14,506

$ 2

$ 14,508

Balance at December 31, 2019 $ 9,143
$ 6,465
$ (10 ) $ (1 ) $ (7 ) $ 15,590
$ 3
$ 15,593
Net income —
283
—
—
—
283
—
283
Other comprehensive income —
—
1
1
—
2
—
2
Other —
(1 ) —
—
—
(1 ) —
(1 )
Balance at March 31, 2020 $ 9,143

$ 6,747

$ (9 )
$ —

$ (7 ) $ 15,874

$ 3

$ 15,877


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

See Notes to Condensed Consolidated Financial Statements



FINANCIAL STATEMENTS

DUKE ENERGY PROGRESS, LLC

Condensed Consolidated Statements of Operations and Comprehensive Income

(Unaudited)


	Three Months Ended					Three Months Ended				Nine Months Ended
	March 31,					September 30,				September 30,
(in millions)	2020			2019		2020		2019		2020		2019
Operating Revenues	$	1,338		$	1,484	$	1,626	$	1,688	$	4,207	$	4,559
Operating Expenses
Fuel used in electric generation and purchased power	405			515		537		577		1,337		1,571
Operation, maintenance and other	305			335		348		378		970		1,070
Depreciation and amortization	287			290		289		314		833		855
Property and other taxes	47			44		38		46		129		131
Impairment charges						5		—		5		—
Total operating expenses	1,044			1,184		1,217		1,315		3,274		3,627
Losses on Sales of Other Assets and Other, net	(1		)	—
Gains on Sales of Other Assets and Other, net						3		—		8		—
Operating Income	293			300		412		373		941		932
Other Income and Expenses, net	22			24		11		27		52		75
Interest Expense	69			77		66		74		203		232
Income Before Income Taxes	246			247		357		326		790		775
Income Tax Expense	42			44		11		48		79		125
Net Income and Comprehensive Income	$	204		$	203	$	346	$	278	$	711	$	650

See Notes to Condensed Consolidated Financial Statements



FINANCIAL STATEMENTS

DUKE ENERGY PROGRESS, LLC

Condensed Consolidated Balance Sheets

(Unaudited)


(in millions)	March 31, 2020			December 31, 2019			September 30, 2020			December 31, 2019
ASSETS
Current Assets
Cash and cash equivalents	$	32		$	22		$	43		$	22
Receivables (net of allowance for doubtful accounts of $2 at 2020 and $3 at 2019)	77			123
Receivables of VIEs (net of allowance for doubtful accounts of $7 at 2020 and $5 at 2019)	410			489
Receivables (net of allowance for doubtful accounts of $4 at 2020 and $3 at 2019)							103			123
Receivables of VIEs (net of allowance for doubtful accounts of $17 at 2020 and $5 at 2019)							559			489
Receivables from affiliated companies	50			52			45			52
Inventory	956			934			910			934
Regulatory assets	503			526			472			526
Other	48			60			54			60
Total current assets	2,076			2,206			2,186			2,206
Property, Plant and Equipment
Cost	34,898			34,603			35,479			34,603
Accumulated depreciation and amortization	(12,114		)	(11,915		)	(12,548		)	(11,915		)
Generation facilities to be retired, net	31			246			29			246
Net property, plant and equipment	22,815			22,934			22,960			22,934
Other Noncurrent Assets
Regulatory assets	4,392			4,152			4,449			4,152
Nuclear decommissioning trust funds	2,644			3,047			3,189			3,047
Operating lease right-of-use assets, net	377			387			357			387
Other	682			651			720			651
Total other noncurrent assets	8,095			8,237			8,715			8,237
Total Assets	$	32,986		$	33,377		$	33,861		$	33,377
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable	$	319		$	629		$	372		$	629
Accounts payable to affiliated companies	208			203			144			203
Notes payable to affiliated companies	229			66			167			66
Taxes accrued	43			17			207			17
Interest accrued	90			110			80			110
Current maturities of long-term debt	1,006			1,006			603			1,006
Asset retirement obligations	421			485			297			485
Regulatory liabilities	263			236			436			236
Other	429			478			389			478
Total current liabilities	3,008			3,230			2,695			3,230
Long-Term Debt	7,903			7,902			8,605			7,902
Long-Term Debt Payable to Affiliated Companies	150			150			150			150
Other Noncurrent Liabilities
Deferred income taxes	2,446			2,388			2,426			2,388
Asset retirement obligations	5,442			5,408			5,503			5,408
Regulatory liabilities	3,790			4,232			4,140			4,232
Operating lease liabilities	344			354			329			354
Accrued pension and other post-retirement benefit costs	235			238			236			238
Investment tax credits	135			137			133			137
Other	83			92			88			92
Total other noncurrent liabilities	12,475			12,849			12,855			12,849
Commitments and Contingencies
Equity
Member's Equity	9,450			9,246			9,556			9,246
Total Liabilities and Equity	$	32,986		$	33,377		$	33,861		$	33,377

See Notes to Condensed Consolidated Financial Statements



FINANCIAL STATEMENTS

DUKE ENERGY PROGRESS, LLC

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Three Months Ended						Nine Months Ended
	March 31,						September 30,
(in millions)	2020			2019			2020			2019
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	204		$	203		$	711		$	650
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization (including amortization of nuclear fuel)	331			336			972			996
Equity component of AFUDC	(10		)	(14		)	(22		)	(44		)
Losses on sales of other assets	1			—
Gains on sales of other assets							(8		)	—
Impairment charges							5			—
Deferred income taxes	43			33			(33		)	144
Contributions to qualified pension plans							—			(4		)
Payments for asset retirement obligations	(75		)	(68		)	(249		)	(288		)
Provision for rate refunds	2			6			4			13
(Increase) decrease in
Net realized and unrealized mark-to-market and hedging transactions	(2		)	(3		)	—			(4		)
Receivables	133			87			(34		)	(9		)
Receivables from affiliated companies	2			(5		)	7			(11		)
Inventory	(22		)	(5		)	24			15
Other current assets	54			96			82			65
Increase (decrease) in
Accounts payable	(220		)	(196		)	(185		)	(54		)
Accounts payable to affiliated companies	5			(57		)	(59		)	(80		)
Taxes accrued	26			(4		)	190			37
Other current liabilities	(73		)	(109		)	(24		)	(17		)
Other assets	(51		)	(47		)	(177		)	(201		)
Other liabilities	(8		)	(7		)	21			39
Net cash provided by operating activities	340			246			1,225			1,247
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(466		)	(548		)	(1,142		)	(1,592		)
Purchases of debt and equity securities	(550		)	(315		)	(1,269		)	(656		)
Proceeds from sales and maturities of debt and equity securities	540			308			1,238			632
Notes receivable from affiliated companies	—			(38		)
Other	(16		)	(20		)	(31		)	(56		)
Net cash used in investing activities	(492		)	(613		)	(1,204		)	(1,672		)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt	—			1,270			1,296			1,270
Payments for the redemption of long-term debt	(1		)	(601		)	(985		)	(603		)
Notes payable to affiliated companies	163			(294		)	101			(215		)
Distributions to parent							(400		)	—
Other	—			(1		)	(12		)	(1		)
Net cash provided by financing activities	162			374			—			451
Net increase in cash and cash equivalents	10			7			21			26
Cash and cash equivalents at beginning of period	22			23			22			23
Cash and cash equivalents at end of period	$	32		$	30		$	43		$	49
Supplemental Disclosures:
Significant non-cash transactions:
Accrued capital expenditures	$	87		$	117		$	124		$	182

See Notes to Condensed Consolidated Financial Statements



FINANCIAL STATEMENTS

DUKE ENERGY PROGRESS, LLC

Condensed Consolidated Statements of Changes in Equity

(Unaudited)


			Three Months Ended
			September 30, 2019 and 2020
			Member's
(in millions)			Equity
Balance at June 30, 2019			$	8,813
Net income			278
Balance at September 30, 2019			$	9,091

Balance at June 30, 2020			$	9,610
Net income			346
Distributions to parent			(400		)
Balance at September 30, 2020			$	9,556

			Nine Months Ended
			September 30, 2019 and 2020
	Member's		Member's
(in millions)	Equity		Equity
Balance at December 31, 2018	$	8,441	$	8,441
Net income	203		650
Balance at March 31, 2019	$	8,644
Balance at September 30, 2019			$	9,091

Balance at December 31, 2019	$	9,246	$	9,246
Net income	204		711
Balance at March 31, 2020	$	9,450
Distributions to parent			(400		)
Other			(1		)
Balance at September 30, 2020			$	9,556

See Notes to Condensed Consolidated Financial Statements



FINANCIAL STATEMENTS

DUKE ENERGY FLORIDA, LLC

Condensed Consolidated Statements of Operations and Comprehensive Income

(Unaudited)


	Three Months Ended				Three Months Ended						Nine Months Ended
	March 31,				September 30,						September 30,
(in millions)	2020		2019		2020			2019			2020			2019
Operating Revenues	$	1,080	$	1,086	$	1,567		$	1,548		$	3,897		$	3,987
Operating Expenses
Fuel used in electric generation and purchased power	358		410		551			610			1,291			1,529
Operation, maintenance and other	245		230		292			256			806			730
Depreciation and amortization	165		165		183			182			523			522
Property and other taxes	88		93		110			113			290			309
Impairment charges					(4		)	(25		)	(4		)	(25		)
Total operating expenses	856		898		1,132			1,136			2,906			3,065
Gains on Sales of Other Assets and Other, net					—			1			—			—
Operating Income	224		188		435			413			991			922
Other Income and Expenses, net	10		13		11			14			36			39
Interest Expense	84		82		81			81			245			246
Income Before Income Taxes	150		119		365			346			782			715
Income Tax Expense	30		23		78			57			159			129
Net Income	$	120	$	96	$	287		$	289		$	623		$	586
Other Comprehensive Income, net of tax
Unrealized gains on available-for-sale securities	1		1		1			1			1			2
Comprehensive Income	$	121	$	97	$	288		$	290		$	624		$	588

See Notes to Condensed Consolidated Financial Statements



FINANCIAL STATEMENTS

DUKE ENERGY FLORIDA, LLC

Condensed Consolidated Balance Sheets

(Unaudited)


(in millions)	March 31, 2020			December 31, 2019			September 30, 2020			December 31, 2019
ASSETS
Current Assets
Cash and cash equivalents	$	12		$	17		$	19		$	17
Receivables (net of allowance for doubtful accounts of $6 at 2020 and $3 at 2019)	80			96
Receivables of VIEs (net of allowance for doubtful accounts of $5 at 2020 and $4 at 2019)	335			341
Receivables (net of allowance for doubtful accounts of $5 at 2020 and $3 at 2019)							91			96
Receivables of VIEs (net of allowance for doubtful accounts of $11 at 2020 and $4 at 2019)							512			341
Receivables from affiliated companies							3			—
Notes receivable from affiliated companies	—			173			—			173
Inventory	508			489			468			489
Regulatory assets (includes $53 at 2020 and $52 at 2019 related to VIEs)	451			419			303			419
Other (includes $13 at 2020 and $39 at 2019 related to VIEs)	37			58
Other (includes $16 at 2020 and $39 at 2019 related to VIEs)							25			58
Total current assets	1,423			1,593			1,421			1,593
Property, Plant and Equipment
Cost	20,880			20,457			21,662			20,457
Accumulated depreciation and amortization	(5,339		)	(5,236		)	(5,452		)	(5,236		)
Net property, plant and equipment	15,541			15,221			16,210			15,221
Other Noncurrent Assets
Regulatory assets (includes $980 at 2020 and $989 at 2019 related to VIEs)	2,097			2,194
Regulatory assets (includes $951 at 2020 and $989 at 2019 related to VIEs)							1,821			2,194
Nuclear decommissioning trust funds	691			734			668			734
Operating lease right-of-use assets, net	386			401			354			401
Other	329			311			341			311
Total other noncurrent assets	3,503			3,640			3,184			3,640
Total Assets	$	20,467		$	20,454		$	20,815		$	20,454
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable	$	411		$	474		$	424		$	474
Accounts payable to affiliated companies	111			131			77			131
Notes payable to affiliated companies	305			—			66			—
Taxes accrued	74			43			260			43
Interest accrued	79			75			73			75
Current maturities of long-term debt (includes $54 at 2020 and 2019 related to VIEs)	322			571
Current maturities of long-term debt (includes $305 at 2020 and $54 at 2019 related to VIEs)							623			571
Regulatory liabilities	84			94			109			94
Other	383			415			359			415
Total current liabilities	1,769			1,803			1,991			1,803
Long-Term Debt (includes $1,278 at 2020 and $1,307 at 2019 related to VIEs)	7,384			7,416
Long-Term Debt (includes $1,001 at 2020 and $1,307 at 2019 related to VIEs)							7,294			7,416
Other Noncurrent Liabilities
Deferred income taxes	2,192			2,179			2,175			2,179
Asset retirement obligations	578			578			555			578
Regulatory liabilities	918			993			669			993
Operating lease liabilities	334			343			308			343
Accrued pension and other post-retirement benefit costs	214			218			207			218
Other	169			136			205			136
Total other noncurrent liabilities	4,405			4,447			4,119			4,447
Commitments and Contingencies
Equity
Member's equity	6,909			6,789			7,411			6,789
Accumulated other comprehensive loss	—			(1		)	—			(1		)
Total equity	6,909			6,788			7,411			6,788
Total Liabilities and Equity	$	20,467		$	20,454		$	20,815		$	20,454

See Notes to Condensed Consolidated Financial Statements



FINANCIAL STATEMENTS

DUKE ENERGY FLORIDA, LLC

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Three Months Ended						Nine Months Ended
	March 31,						September 30,
(in millions)	2020			2019			2020			2019
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	120		$	96		$	623		$	586
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and accretion	219			207			755			647
Equity component of AFUDC	(4		)	(1		)	(8		)	(4		)
Impairment charges							(4		)	(25		)
Deferred income taxes	34			45			19			164
Contributions to qualified pension plans							—			(53		)
Payments for asset retirement obligations	(5		)	(7		)	(38		)	(21		)
(Increase) decrease in
Net realized and unrealized mark-to-market and hedging transactions	3			2			(17		)	9
Receivables	15			55			(172		)	(119		)
Receivables from affiliated companies	—			(6		)	(3		)	27
Inventory	(19		)	(13		)	22			29
Other current assets	7			(35		)	41			100
Increase (decrease) in
Accounts payable	11			—			63			(11		)
Accounts payable to affiliated companies	(20		)	(62		)	(54		)	67
Taxes accrued	31			20			217			101
Other current liabilities	(58		)	(84		)	(20		)	(77		)
Other assets	13			(63		)	48			(77		)
Other liabilities	(46		)	(1		)	(136		)	(123		)
Net cash provided by operating activities	301			153			1,336			1,220
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(506		)	(422		)	(1,460		)	(1,274		)
Purchases of debt and equity securities	(101		)	(95		)	(3,284		)	(648		)
Proceeds from sales and maturities of debt and equity securities	103			97			3,305			668
Notes receivable from affiliated companies	173			—			173			—
Other	(23		)	(25		)	(82		)	(73		)
Net cash used in investing activities	(354		)	(445		)	(1,348		)	(1,327		)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt	—			25			495			25
Payments for the redemption of long-term debt	(282		)	(81		)	(570		)	(210		)
Notes payable to affiliated companies	305			291			66			248
Other	(1		)	2			—			9
Net cash provided by financing activities	22			237
Net cash (used in) provided by financing activities							(9		)	72
Net decrease in cash, cash equivalents and restricted cash	(31		)	(55		)	(21		)	(35		)
Cash, cash equivalents and restricted cash at beginning of period	56			75			56			75
Cash, cash equivalents and restricted cash at end of period	$	25		$	20		$	35		$	40
Supplemental Disclosures:
Significant non-cash transactions:
Accrued capital expenditures	$	223		$	193		$	187		$	218

See Notes to Condensed Consolidated Financial Statements



FINANCIAL STATEMENTS

DUKE ENERGY FLORIDA, LLC

Condensed Consolidated Statements of Changes in Equity

(Unaudited)


								Three Months Ended September 30, 2019 and 2020
											Accumulated
											Other
											Comprehensive
											Income (Loss)
											Net Unrealized
											Gains on
								Member's			Available-for-Sale			Total
(in millions)								Equity			Securities			Equity
Balance at June 30, 2019								$	6,394		$	(1	)	$	6,393
Net income								289			—			289
Other comprehensive income								—			1			1
Balance at September 30, 2019								$	6,683		$	—		$	6,683

Balance at June 30, 2020								$	7,125		$	(1	)	$	7,124
Net income								287			—			287
Other comprehensive income								—			1			1
Other								(1		)	—			(1		)
Balance at September 30, 2020								$	7,411		$	—		$	7,411

								Nine Months Ended September 30, 2019 and 2020
			Accumulated								Accumulated
			Other								Other
			Comprehensive								Comprehensive
			Income (Loss)								Income (Loss)
			Net Unrealized								Net Unrealized
			Gains on								Gains on
	Member's		Available-for-Sale			Total		Member's			Available-for-Sale			Total
(in millions)	Equity		Securities			Equity		Equity			Securities			Equity
Balance at December 31, 2018	$	6,097	$	(2	)	$	6,095	$	6,097		$	(2	)	$	6,095
Net income	96		—			96		586			—			586
Other comprehensive income	—		1			1		—			2			2
Balance at March 31, 2019	$	6,193	$	(1	)	$	6,192
Balance at September 30, 2019								$	6,683		$	—		$	6,683

Balance at December 31, 2019	$	6,789	$	(1	)	$	6,788	$	6,789		$	(1	)	$	6,788
Net income	120		—			120		623			—			623
Other comprehensive income	—		1			1		—			1			1
Balance at March 31, 2020	$	6,909	$	—		$	6,909
Other								(1		)	—			(1		)
Balance at September 30, 2020								$	7,411		$	—		$	7,411

See Notes to Condensed Consolidated Financial Statements



FINANCIAL STATEMENTS

DUKE ENERGY OHIO, INC.

Condensed Consolidated Statements of Operations and Comprehensive Income

(Unaudited)


	Three Months Ended				Three Months Ended				Nine Months Ended
	March 31,				September 30,				September 30,
(in millions)	2020		2019		2020		2019		2020		2019
Operating Revenues
Regulated electric	$	346	$	355	$	394	$	408	$	1,070	$	1,099
Regulated natural gas	152		176		79		81		324		354
Total operating revenues	498		531		473		489		1,394		1,453
Operating Expenses
Fuel used in electric generation and purchased power	87		93		94		114		258		293
Cost of natural gas	37		54		3		4		46		68
Operation, maintenance and other	123		132		115		123		333		378
Depreciation and amortization	68		64		72		69		208		199
Property and other taxes	83		84		83		71		244		229
Total operating expenses	398		427		367		381		1,089		1,167
Operating Income	100		104		106		108		305		286
Other Income and Expenses, net	3		9		4		4		11		19
Interest Expense	24		30		26		27		75		81
Income Before Income Taxes	79		83		84		85		241		224
Income Tax Expense	14		14		14		11		40		34
Net Income and Comprehensive Income	$	65	$	69	$	70	$	74	$	201	$	190

See Notes to Condensed Consolidated Financial Statements



FINANCIAL STATEMENTS

DUKE ENERGY OHIO, INC.

Condensed Consolidated Balance Sheets

(Unaudited)


(in millions)	March 31, 2020			December 31, 2019			September 30, 2020			December 31, 2019
ASSETS
Current Assets
Cash and cash equivalents	$	14		$	17		$	10		$	17
Receivables (net of allowance for doubtful accounts of $5 at 2020 and $4 at 2019)	84			84			90			84
Receivables from affiliated companies	52			92			57			92
Inventory	121			135			130			135
Regulatory assets	33			49			35			49
Other	11			21			13			21
Total current assets	315			398			335			398
Property, Plant and Equipment
Cost	10,401			10,241			10,804			10,241
Accumulated depreciation and amortization	(2,883		)	(2,843		)	(2,989		)	(2,843		)
Net property, plant and equipment	7,518			7,398			7,815			7,398
Other Noncurrent Assets
Goodwill	920			920			920			920
Regulatory assets	567			549			597			549
Operating lease right-of-use assets, net	21			21			20			21
Other	56			52			62			52
Total other noncurrent assets	1,564			1,542			1,599			1,542
Total Assets	$	9,397		$	9,338		$	9,749		$	9,338
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable	$	227		$	288		$	240		$	288
Accounts payable to affiliated companies	68			68			54			68
Notes payable to affiliated companies	399			312			85			312
Taxes accrued	170			219			193			219
Interest accrued	30			30			32			30
Asset retirement obligations	3			1			7			1
Regulatory liabilities	66			64			66			64
Other	68			75			73			75
Total current liabilities	1,031			1,057			750			1,057
Long-Term Debt	2,595			2,594			3,064			2,594
Long-Term Debt Payable to Affiliated Companies	25			25			25			25
Other Noncurrent Liabilities
Deferred income taxes	942			922			965			922
Asset retirement obligations	78			79			84			79
Regulatory liabilities	760			763			753			763
Operating lease liabilities	20			21			20			21
Accrued pension and other post-retirement benefit costs	101			100			104			100
Other	97			94			100			94
Total other noncurrent liabilities	1,998			1,979			2,026			1,979
Commitments and Contingencies
Equity
Common Stock, $8.50 par value, 120 million shares authorized; 90 million shares outstanding at 2020 and 2019	762			762			762			762
Additional paid-in capital	2,776			2,776			2,776			2,776
Retained earnings	210			145			346			145
Total equity	3,748			3,683			3,884			3,683
Total Liabilities and Equity	$	9,397		$	9,338		$	9,749		$	9,338

See Notes to Condensed Consolidated Financial Statements



FINANCIAL STATEMENTS

DUKE ENERGY OHIO, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Three Months Ended						Nine Months Ended
	March 31,						September 30,
(in millions)	2020			2019			2020			2019
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	65		$	69		$	201		$	190
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	69			65			211			202
Equity component of AFUDC	(1		)	(3		)	(4		)	(9		)
Deferred income taxes	14			20			31			68
Contributions to qualified pension plans							—			(2		)
Payments for asset retirement obligations	—			(1		)	(1		)	(7		)
Provision for rate refunds	3			4			10			5
(Increase) decrease in
Receivables	1			5			(5		)	24
Receivables from affiliated companies	40			35			35			51
Inventory	14			15			5			(2		)
Other current assets	8			(6		)	5			(15		)
Increase (decrease) in
Accounts payable	(19		)	(5		)	(28		)	(40		)
Accounts payable to affiliated companies	—			(8		)	(14		)	(9		)
Taxes accrued	(49		)	(45		)	(23		)	(40		)
Other current liabilities	2			14			6			(4		)
Other assets	(2		)	(10		)	(24		)	(12		)
Other liabilities	(8		)	(4		)	(7		)	(22		)
Net cash provided by operating activities	137			145			398			378
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(217		)	(233		)	(611		)	(714		)
Notes receivable from affiliated companies	—			(463		)	—			(74		)
Other	(10		)	(11		)	(34		)	(45		)
Net cash used in investing activities	(227		)	(707		)	(645		)	(833		)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt	—			794			467			1,003
Payments for the redemption of long-term debt							—			(451		)
Notes payable to affiliated companies	87			(236		)	(227		)	(107		)
Net cash provided by financing activities	87			558			240			445
Net decrease in cash and cash equivalents	(3		)	(4		)	(7		)	(10		)
Cash and cash equivalents at beginning of period	17			21			17			21
Cash and cash equivalents at end of period	$	14		$	17		$	10		$	11
Supplemental Disclosures:
Significant non-cash transactions:
Accrued capital expenditures	$	66		$	68		$	92		$	100

See Notes to Condensed Consolidated Financial Statements



FINANCIAL STATEMENTS

DUKE ENERGY OHIO, INC.

Condensed Consolidated Statements of Changes in Equity

(Unaudited)


										Three Months Ended September 30, 2019 and 2020
												Additional		Retained
										Common		Paid-in		Earnings			Total
(in millions)										Stock		Capital		(Deficit)			Equity
Balance at June 30, 2019										$	762	$	2,776	$	23		$	3,561
Net income										—		—		74			74
Balance at September 30, 2019										$	762	$	2,776	$	97		$	3,635

Balance at June 30, 2020										$	762	$	2,776	$	276		$	3,814
Net income										—		—		70			70
Balance at September 30, 2020										$	762	$	2,776	$	346		$	3,884

										Nine Months Ended September 30, 2019 and 2020
			Additional		Retained							Additional		Retained
	Common		Paid-in		Earnings			Total		Common		Paid-in		Earnings			Total
(in millions)	Stock		Capital		(Deficit)			Equity		Stock		Capital		(Deficit)			Equity
Balance at December 31, 2018	$	762	$	2,776	$	(93	)	$	3,445	$	762	$	2,776	$	(93	)	$	3,445
Net income	—		—		69			69		—		—		190			190
Balance at March 31, 2019	$	762	$	2,776	$	(24	)	$	3,514
Balance at September 30, 2019										$	762	$	2,776	$	97		$	3,635

Balance at December 31, 2019	$	762	$	2,776	$	145		$	3,683	$	762	$	2,776	$	145		$	3,683
Net income	—		—		65			65		—		—		201			201
Balance at March 31, 2020	$	762	$	2,776	$	210		$	3,748
Balance at September 30, 2020										$	762	$	2,776	$	346		$	3,884

See Notes to Condensed Consolidated Financial Statements



FINANCIAL STATEMENTS

DUKE ENERGY INDIANA, LLC

Condensed Consolidated Statements of Operations and Comprehensive Income

(Unaudited)


	Three Months Ended					Three Months Ended				Nine Months Ended
	March 31,					September 30,				September 30,
(in millions)	2020		2019			2020		2019		2020		2019
Operating Revenues	$	692	$	768		$	761	$	807	$	2,070	$	2,289
Operating Expenses
Fuel used in electric generation and purchased power	194		257			222		234		577		720
Operation, maintenance and other	186		189			207		192		564		569
Depreciation and amortization	132		131			149		130		415		393
Property and other taxes	22		19			15		16		57		55
Total operating expenses	534		596			593		572		1,613		1,737
Losses on Sales of Other Assets and Other, net	—		(3		)
Operating Income	158		169			168		235		457		552
Other Income and Expenses, net	10		19			9		8		28		35
Interest Expense	43		43			29		40		114		111
Income Before Income Taxes	125		145			148		203		371		476
Income Tax Expense	26		35			29		47		72		113
Net Income and Comprehensive Income	$	99	$	110		$	119	$	156	$	299	$	363

See Notes to Condensed Consolidated Financial Statements



FINANCIAL STATEMENTS

DUKE ENERGY INDIANA, LLC

Condensed Consolidated Balance Sheets

(Unaudited)


(in millions)	March 31, 2020			December 31, 2019			September 30, 2020			December 31, 2019
ASSETS
Current Assets
Cash and cash equivalents	$	15		$	25		$	15		$	25
Receivables (net of allowance for doubtful accounts of $3 at 2020 and 2019)	50			60			48			60
Receivables from affiliated companies	76			79			84			79
Notes receivable from affiliated companies	543			—
Inventory	538			517			507			517
Regulatory assets	78			90			119			90
Other	36			60			30			60
Total current assets	1,336			831			803			831
Property, Plant and Equipment
Cost	16,481			16,305			17,223			16,305
Accumulated depreciation and amortization	(5,349		)	(5,233		)	(5,579		)	(5,233		)
Net property, plant and equipment	11,132			11,072			11,644			11,072
Other Noncurrent Assets
Regulatory assets	1,098			1,082			1,184			1,082
Operating lease right-of-use assets, net	57			57			55			57
Other	214			234			228			234
Total other noncurrent assets	1,369			1,373			1,467			1,373
Total Assets	$	13,837		$	13,276		$	13,914		$	13,276
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable	$	157		$	201		$	172		$	201
Accounts payable to affiliated companies	66			87			65			87
Notes payable to affiliated companies	—			30			83			30
Taxes accrued	81			49			110			49
Interest accrued	60			58			63			58
Current maturities of long-term debt	503			503			13			503
Asset retirement obligations	181			189			170			189
Regulatory liabilities	46			55			76			55
Other	92			112			98			112
Total current liabilities	1,186			1,284			850			1,284
Long-Term Debt	3,950			3,404			3,941			3,404
Long-Term Debt Payable to Affiliated Companies	150			150			150			150
Other Noncurrent Liabilities
Deferred income taxes	1,158			1,150			1,179			1,150
Asset retirement obligations	645			643			1,044			643
Regulatory liabilities	1,672			1,685			1,648			1,685
Operating lease liabilities	54			55			53			55
Accrued pension and other post-retirement benefit costs	148			148			151			148
Investment tax credits	170			164			168			164
Other	30			18			56			18
Total other noncurrent liabilities	3,877			3,863			4,299			3,863
Commitments and Contingencies
Equity
Member's Equity	4,674			4,575			4,674			4,575
Total Liabilities and Equity	$	13,837		$	13,276		$	13,914		$	13,276

See Notes to Condensed Consolidated Financial Statements



FINANCIAL STATEMENTS

DUKE ENERGY INDIANA, LLC

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Three Months Ended						Nine Months Ended
	March 31,						September 30,
(in millions)	2020			2019			2020			2019
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	99		$	110		$	299		$	363
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and accretion	133			132			416			395
Equity component of AFUDC	(6		)	(4		)	(18		)	(13		)
Losses on sale of other assets	—			3
Deferred income taxes	16			28			11			108
Contributions to qualified pension plans							—			(2		)
Payments for asset retirement obligations	(12		)	(11		)	(48		)	(31		)
(Increase) decrease in
Receivables	15			4			15			1
Receivables from affiliated companies	3			20			(5		)	37
Inventory	(21		)	(13		)	10			(56		)
Other current assets	25			19			12			91
Increase (decrease) in
Accounts payable	(13		)	8			(1		)	1
Accounts payable to affiliated companies	(21		)	(11		)	(22		)	(9		)
Taxes accrued	43			20			65			(14		)
Other current liabilities	(27		)	(15		)	(2		)	(12		)
Other assets	(4		)	12			(41		)	(75		)
Other liabilities	8			6			104			67
Net cash provided by operating activities	238			308			795			851
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(210		)	(208		)	(669		)	(663		)
Purchases of debt and equity securities	(5		)	(6		)	(24		)	(19		)
Proceeds from sales and maturities of debt and equity securities	2			4			15			15
Notes receivable from affiliated companies	(543		)	—			—			(213		)
Other	(6		)	(11		)	(24		)	(33		)
Net cash used in investing activities	(762		)	(221		)	(702		)	(913		)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt	544			—			544			485
Payments for the redemption of long-term debt	—			(60		)	(500		)	(60		)
Notes payable to affiliated companies	(30		)	(31		)	53			(167		)
Distributions to parent							(200		)	(200		)
Net cash provided by (used in) financing activities	514			(91		)	(103		)	58
Net decrease in cash and cash equivalents	(10		)	(4		)	(10		)	(4		)
Cash and cash equivalents at beginning of period	25			24			25			24
Cash and cash equivalents at end of period	$	15		$	20		$	15		$	20
Supplemental Disclosures:
Significant non-cash transactions:
Accrued capital expenditures	$	70		$	76		$	73		$	82

See Notes to Condensed Consolidated Financial Statements



FINANCIAL STATEMENTS

DUKE ENERGY INDIANA, LLC

Condensed Consolidated Statements of Changes in Equity

(Unaudited)


			Three Months Ended
			September 30, 2019 and 2020
			Member's
(in millions)			Equity
Balance at June 30, 2019			$	4,546
Net income			156
Distributions to parent			(200		)
Balance at September 30, 2019			$	4,502

Balance at June 30, 2020			$	4,655
Net income			119
Distributions to parent			(100		)
Balance at September 30, 2020			$	4,674

			Nine Months Ended
			September 30, 2019 and 2020
	Member's		Member's
(in millions)	Equity		Equity
Balance at December 31, 2018	$	4,339	$	4,339
Net income	110		363
Balance at March 31, 2019	$	4,449
Distributions to parent			(200		)
Balance at September 30, 2019			$	4,502

Balance at December 31, 2019	$	4,575	$	4,575
Net income	99		299
Balance at March 31, 2020	$	4,674
Distributions to parent			(200		)
Balance at September 30, 2020			$	4,674

See Notes to Condensed Consolidated Financial Statements



FINANCIAL STATEMENTS

PIEDMONT NATURAL GAS COMPANY, INC.

Condensed Consolidated Statements of Operations and Comprehensive Income

(Unaudited)


	Three Months Ended				Three Months Ended						Nine Months Ended
	March 31,				September 30,						September 30,
(in millions)	2020		2019		2020			2019			2020		2019
Operating Revenues	$	512	$	579	$	162		$	168		$	871	$	956
Operating Expenses
Cost of natural gas	162		273		39			46			254		384
Operation, maintenance and other	80		80		75			78			234		241
Depreciation and amortization	45		42		45			43			133		127
Property and other taxes	12		12		13			14			37		39
Impairment charges					7			—			7		—
Total operating expenses	299		407		179			181			665		791
Operating Income	213		172
Operating (Loss) Income					(17		)	(13		)	206		165
Other Income and Expenses, net	12		6		16			7			44		19
Interest Expense	27		22		29			22			89		65
Income Before Income Taxes	198		156
Income Tax Expense	20		34
Net Income and Comprehensive Income	$	178	$	122
(Loss) Income Before Income Taxes					(30		)	(28		)	161		119
Income Tax (Benefit) Expense					(5		)	(10		)	6		22
Net (Loss) Income and Comprehensive (Loss) Income					$	(25	)	$	(18	)	$	155	$	97

See Notes to Condensed Consolidated Financial Statements



FINANCIAL STATEMENTS

PIEDMONT NATURAL GAS COMPANY, INC.

Condensed Consolidated Balance Sheets

(Unaudited)


(in millions)	March 31, 2020			December 31, 2019			September 30, 2020			December 31, 2019
ASSETS
Current Assets
Cash and cash equivalents	$	4		$	—
Receivables (net of allowance for doubtful accounts of $9 at 2020 and $6 at 2019)	191			241			$	93		$	241
Receivables from affiliated companies	13			10			11			10
Inventory	39			72			47			72
Regulatory assets	96			73			119			73
Other	13			28			51			28
Total current assets	356			424			321			424
Property, Plant and Equipment
Cost	8,653			8,446			8,882			8,446
Accumulated depreciation and amortization	(1,703		)	(1,681		)	(1,713		)	(1,681		)
Net property, plant and equipment	6,950			6,765			7,169			6,765
Other Noncurrent Assets
Goodwill	49			49			49			49
Regulatory assets	263			290			287			290
Operating lease right-of-use assets, net	23			24			21			24
Investments in equity method unconsolidated affiliates	84			83			86			83
Other	132			121			279			121
Total other noncurrent assets	551			567			722			567
Total Assets	$	7,857		$	7,756		$	8,212		$	7,756
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable	$	145		$	215		$	177		$	215
Accounts payable to affiliated companies	12			3			63			3
Notes payable to affiliated companies	486			476			327			476
Taxes accrued	36			24			36			24
Interest accrued	32			33			37			33
Current maturities of long-term debt							160			—
Regulatory liabilities	91			81			101			81
Other	54			67			59			67
Total current liabilities	856			899			960			899
Long-Term Debt	2,385			2,384			2,620			2,384
Other Noncurrent Liabilities
Deferred income taxes	742			708			775			708
Asset retirement obligations	17			17			17			17
Regulatory liabilities	1,087			1,131			1,070			1,131
Operating lease liabilities	22			23			20			23
Accrued pension and other post-retirement benefit costs	7			3			7			3
Other	121			148			146			148
Total other noncurrent liabilities	1,996			2,030			2,035			2,030
Commitments and Contingencies
Equity
Common stock, no par value: 100 shares authorized and outstanding at 2020 and 2019	1,310			1,310			1,310			1,310
Retained earnings	1,310			1,133			1,287			1,133
Total equity	2,620			2,443			2,597			2,443
Total Liabilities and Equity	$	7,857		$	7,756		$	8,212		$	7,756

See Notes to Condensed Consolidated Financial Statements



FINANCIAL STATEMENTS

PIEDMONT NATURAL GAS COMPANY, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Three Months Ended						Nine Months Ended
	March 31,						September 30,
(in millions)	2020			2019			2020			2019
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	178		$	122		$	155		$	97
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	46			42			135			129
Equity component of AFUDC	(5		)	—			(14		)	—
Impairment charges							7			—
Deferred income taxes	12			23			24			110
Equity in earnings from unconsolidated affiliates	(2		)	(2		)	(7		)	(6		)
Contributions to qualified pension plans							—			(1		)
Provision for rate refunds	(18		)	7			(27		)	9
(Increase) decrease in
Receivables	65			27			164			192
Receivables from affiliated companies	(3		)	12			(1		)	12
Inventory	33			45			25			23
Other current assets	(9		)	22			(59		)	(95		)
Increase (decrease) in
Accounts payable	(76		)	(44		)	(53		)	(93		)
Accounts payable to affiliated companies	9			(4		)	60			12
Taxes accrued	12			(49		)	16			(51		)
Other current liabilities	(12		)	15			(4		)	(6		)
Other assets	1			(3		)	(14		)	(10		)
Other liabilities	(1		)	(5		)	7			(5		)
Net cash provided by operating activities	230			208			414			317
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(231		)	(209		)	(641		)	(751		)
Contributions to equity method investments							—			(16		)
Other	(5		)	(2		)	(18		)	(10		)
Net cash used in investing activities	(236		)	(211		)	(659		)	(777		)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt							394			596
Payments for the redemption of long-term debt							—			(350		)
Notes payable to affiliated companies	10			3			(149		)	64
Capital contributions from parent							—			150
Net cash provided by financing activities	10			3			245			460
Net increase in cash and cash equivalents	4			—			—			—
Cash and cash equivalents at beginning of period	—			—			—			—
Cash and cash equivalents at end of period	$	4		$	—		$	—		$	—
Supplemental Disclosures:
Significant non-cash transactions:
Accrued capital expenditures	$	114		$	92		$	123		$	121

See Notes to Condensed Consolidated Financial Statements



FINANCIAL STATEMENTS

PIEDMONT NATURAL GAS COMPANY, INC.

Condensed Consolidated Statements of Changes in Equity

(Unaudited)


									Three Months Ended September 30, 2019 and 2020
									Common		Retained			Total
(in millions)									Stock		Earnings			Equity
Balance at June 30, 2019									$	1,310	$	1,046		$	2,356
Net loss									—		(18		)	(18		)
Balance at September 30, 2019									$	1,310	$	1,028		$	2,338

Balance at June 30, 2020									$	1,310	$	1,312		$	2,622
Net loss									—		(25		)	(25		)
Balance at September 30, 2020									$	1,310	$	1,287		$	2,597

									Nine Months Ended September 30, 2019 and 2020
	Common		Retained			Total			Common		Retained			Total
(in millions)	Stock		Earnings			Equity			Stock		Earnings			Equity
Balance at December 31, 2018	$	1,160	$	931		$	2,091		$	1,160	$	931		$	2,091
Net income	—		122			122			—		97			97
Balance at March 31, 2019	$	1,160	$	1,053		$	2,213
Contribution from parent									150		—			150
Balance at September 30, 2019									$	1,310	$	1,028		$	2,338

Balance at December 31, 2019	$	1,310	$	1,133		$	2,443		$	1,310	$	1,133		$	2,443
Net income	—		178			178			—		155			155
Other	—		(1		)	(1		)	—		(1		)	(1		)
Balance at March 31, 2020	$	1,310	$	1,310		$	2,620
Balance at September 30, 2020									$	1,310	$	1,287		$	2,597

See Notes to Condensed Consolidated Financial Statements



FINANCIAL STATEMENTS	ORGANIZATION AND BASIS OF PRESENTATION

Index to Combined Notes to Condensed Consolidated Financial Statements

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

Applicable Notes

Registrant

Duke Energy

•

Duke Energy Carolinas

•

Progress Energy

•

Duke Energy Progress

•

Duke Energy Florida

•

Duke Energy Ohio

•

Duke Energy Indiana

•

Piedmont

•

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

1. ORGANIZATION AND BASIS OF PRESENTATION

BASIS OF PRESENTATION

These Condensed Consolidated Financial Statements have been prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, these Condensed Consolidated Financial Statements do not include all information and notes required by GAAP for annual financial statements and should be read in conjunction with the Consolidated Financial Statements in the Duke Energy Registrants’ combined Annual Report on Form 10-K for the year ended December 31, 2019.

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

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

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

BASIS OF CONSOLIDATION

These Condensed Consolidated Financial Statements include, after eliminating intercompany transactions and balances, the accounts of the Duke Energy Registrants and subsidiaries or VIEs where the respective Duke Energy Registrants have control. See Note 1112 for additional information on VIEs. These Condensed Consolidated Financial Statements also reflect the Duke Energy Registrants’ proportionate share of certain jointly owned generation and transmission facilities.

COVID-19

The COVID-19 pandemic is having a significant impact on global health and economic environments. In March 2020, the World Health Organization ~~(WHO)~~ declared COVID-19 a global pandemic, and President Trump proclaimed that the COVID-19 outbreak in the United States constitutes a national emergency. The COVID-19 pandemic has not had a material financial impact on the Duke Energy Registrants as of March 31, 2020; however, the extent to which the COVID-19 pandemic will impact the Duke Energy Registrants during 2020 and beyond is uncertain at this time. The Duke Energy Registrants are monitoring developments ~~closely.~~closely and responding appropriately. The company incurred approximately $39 million and $91 million of incremental COVID-19 costs before deferral for the three and nine months ended September 30, 2020, respectively, included in Operation, maintenance and other on the Condensed Consolidated Statements of Operations. For the nine months ended September 30, 2020, the company has deferred approximately $56 million of these incremental costs, which were primarily bad debt expense, personal protective equipment and cleaning supplies. Further, the company waived approximately $29 million and $54 million of late payment fees for the three and nine months ended September 30, 2020, respectively. See Notes 3, 5, ~~11,~~ 12, 13 and 1516 for additional information ~~on COVID-19 and~~as well as steps taken to mitigate the impacts to our business and ~~customers.~~customers from the COVID-19 pandemic.

OTHER CURRENT ASSETS

Included in Other within Current Assets on the Piedmont Condensed Consolidated Balance Sheets are prepaid assets of $23 million and $3 million as of September 30, 2020, and December 31, 2019, respectively. The prepaid assets relate to natural gas storage injections and inventory transfers classified as prepaid assets until winter season when the natural gas is moved to Inventory on the Piedmont Condensed Consolidated Balance Sheets under certain agreements.



FINANCIAL STATEMENTS	ORGANIZATION AND BASIS OF PRESENTATION

OTHER CURRENT LIABILITIES

Included in Other within Current Liabilities on the Duke Energy Condensed Consolidated Balance Sheet is a current liability of $935 million and $0 as of September 30, 2020, and December 31, 2019, respectively. The current liability, initially recorded in the second quarter and increased during the third quarter, primarily represents Duke Energy's share of ACP's obligations of outstanding debt and to satisfy ARO requirements to restore construction sites. See Notes 3, 4 and 12 for further information.

NONCONTROLLING INTEREST

Duke Energy maintains a controlling financial interest in certain less than wholly owned nonregulated subsidiaries. As a result, Duke Energy consolidates these subsidiaries and presents the third-party investors' portion of Duke Energy's net income (loss), net assets and comprehensive income (loss) as noncontrolling interest. Noncontrolling interest is included as a component of equity on the Condensed Consolidated Balance Sheet.



~~FINANCIAL STATEMENTS~~	~~ORGANIZATION AND BASIS OF PRESENTATION~~

Several operating agreements of Duke Energy's subsidiaries with noncontrolling interest are subject to allocations of earnings, tax attributes and cash flows in accordance with contractual agreements that vary throughout the lives of the subsidiaries. Therefore, Duke Energy and the other investors' (the owners) interests in the subsidiaries are not fixed, and the subsidiaries apply the Hypothetical Liquidation at Book Value (HLBV) method in allocating income or loss and other comprehensive income or loss (all measured on a pretax basis) to the owners. The HLBV method measures the amounts that each owner would hypothetically claim at each balance sheet reporting date, including tax benefits realized by the owners over the IRS recapture period, upon a hypothetical liquidation of the subsidiary at the net book value of its underlying assets. The change in the amount that each owner would hypothetically receive at the reporting date compared to the amount it would have received on the previous reporting date represents the amount of income or loss allocated to each owner for the reporting period. Duke Energy has received $103 million for the sale of noncontrolling interests to tax equity members for the three months ended March 31, 2020. Duke Energy allocated approximately $49 million and $7 million of losses to noncontrolling tax equity members utilizing the HLBV method for the three months ended March 31, 2020, and March 31, 2019, respectively.

Other operating agreements of Duke Energy's subsidiaries with noncontrolling interest allocate profit and loss based on their pro rata shares of the ownership interest in the respective subsidiary. Therefore, Duke Energy allocates net income or loss and other comprehensive income or loss of these subsidiaries to the owners based on their pro rata shares.

The following table presents cash received for the sale of noncontrolling interest and allocated losses to noncontrolling interest for the three and nine months ended September 30, 2020, and 2019.



	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions)	2020		2019		2020		2019
Noncontrolling Interest Capital Contributions
Cash received for the sale of noncontrolling interest to tax equity members	$	239	$	7	$	402	$	200
Cash received for the sale of noncontrolling interest to pro rata share members	0		0		0		415
Total Noncontrolling Interest Capital Contributions	239		7		402		615
Noncontrolling Interest Allocation of Income
Allocated losses to noncontrolling tax equity members utilizing the HLBV method	59		15		187		105
Allocated losses to noncontrolling members based on pro rata shares of ownership	11		4		21		5
Total Noncontrolling Interest Allocated Losses	$	70	$	19	$	208	$	110

CASH, CASH EQUIVALENTS AND RESTRICTED CASH

Duke Energy, Progress Energy and Duke Energy Florida have restricted cash balances related primarily to collateral assets, escrow deposits and VIEs. See ~~Note 11~~Notes 10 and 12 for additional information. Restricted cash amounts are included in Other within Current Assets and Other Noncurrent Assets on the Condensed Consolidated Balance Sheets. The following table presents the components of cash, cash equivalents and restricted cash included in the Condensed Consolidated Balance Sheets.


	March 31, 2020						December 31, 2019						September 30, 2020						December 31, 2019
					Duke						Duke						Duke						Duke
	Duke		Progress		Energy		Duke		Progress		Energy		Duke		Progress		Energy		Duke		Progress		Energy
	Energy		Energy		Florida		Energy		Energy		Florida		Energy		Energy		Florida		Energy		Energy		Florida
Current Assets
Cash and cash equivalents	$	1,450	$	52	$	12	$	311	$	48	$	17	$	308	$	70	$	19	$	311	$	48	$	17
Other	185		13		13		222		39		39		187		16		16		222		39		39
Other Noncurrent Assets
Other	63		60		—		40		39		—		105		102		—		40		39		—
Total cash, cash equivalents and restricted cash	$	1,698	$	125	$	25	$	573	$	126	$	56	$	600	$	188	$	35	$	573	$	126	$	56

~~INVENTORY~~

~~Provisions for inventory write-offs were not material at March 31, 2020, and December 31, 2019. The components of inventory are presented in the tables below.~~

March 31, 2020
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 $ 2,280
$ 759
$ 1,018
$ 678
$ 340
$ 83
$ 319
$ 5
Coal 742
268
246
167
79
10
218
—
Natural gas, oil and other fuel 302
40
199
111
89
28
1
34
Total inventory $ 3,324
$ 1,067
$ 1,463
$ 956
$ 508
$ 121
$ 538
$ 39
44

December 31, 2019
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 $ 2,297
$ 768
$ 1,038
$ 686
$ 351
$ 79
$ 318
$ 5
Coal 586
187
186
138
48
15
198
—
Natural gas, oil and other fuel 349
41
199
110
90
41
1
67
Total inventory $ 3,232
$ 996
$ 1,423
$ 934
$ 489
$ 135
$ 517
$ 72

~~NEW ACCOUNTING STANDARDS~~

~~The following new accounting standard was adopted by the Duke Energy Registrants in 2020.~~



FINANCIAL STATEMENTS	ORGANIZATION AND BASIS OF PRESENTATION

INVENTORY

Provisions for inventory write-offs were not material at September 30, 2020, and December 31, 2019. The components of inventory are presented in the tables below.



	September 30, 2020
			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	$	2,341	$	779	$	1,021	$	682	$	340	$	79	$	314	$	13
Coal	546		173		168		120		48		12		192		—
Natural gas, oil and other fuel	303		40		189		108		80		39		1		34
Total inventory	$	3,190	$	992	$	1,378	$	910	$	468	$	130	$	507	$	47



	December 31, 2019
			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	$	2,297	$	768	$	1,038	$	686	$	351	$	79	$	318	$	5
Coal	586		187		186		138		48		15		198		—
Natural gas, oil and other fuel	349		41		199		110		90		41		1		67
Total inventory	$	3,232	$	996	$	1,423	$	934	$	489	$	135	$	517	$	72

NEW ACCOUNTING STANDARDS

The following new accounting standard was adopted by the Duke Energy Registrants in 2020.

Current Expected Credit Losses. In June 2016, the ~~FASB~~Financial Accounting Standards Board (FASB) issued new accounting guidance for credit losses. Duke Energy adopted the new accounting guidance for credit losses effective January 1, 2020, using the modified retrospective method of adoption, which does not require restatement of prior year results. Duke Energy did not adopt any practical expedients.

Duke Energy recognizes allowances for credit losses based on management's estimate of losses expected to be incurred over the lives of certain assets or guarantees. Management monitors credit quality, changes in expected credit losses and the appropriateness of the allowance for credit losses on a forward-looking basis. Management reviews the risk of loss periodically as part of the existing assessment of collectability of receivables.

Duke Energy reviews the credit quality of its counterparties as part of its regular risk management process and requires credit enhancements, such as deposits or letters of credit, as appropriate and as allowed by regulators.

Duke Energy recorded cumulative effects of changes in accounting principles related to the adoption of new credit loss standard, for allowances for credit losses of trade and other receivables, insurance receivables and financial guarantees. These amounts are included in the Condensed Consolidated Balance Sheets in Receivables, Receivables of VIEs, Other Noncurrent Assets and Other Noncurrent Liabilities. See Notes 4 and 1213 for more information.

Duke Energy recorded an adjustment for the cumulative effect of a change in accounting principle due to the adoption of this standard on January 1, 2020, as shown in the table below:



	January 1, 2020
			Duke				Duke		Duke
	Duke		Energy		Progress		Energy		Energy
(in millions)	Energy		Carolinas		Energy		Progress		Florida		Piedmont
Total pretax impact to Retained Earnings	$	120	$	16	$	2	$	1	$	1	$	1

The following new accounting standard has been issued but not yet adopted by the Duke Energy Registrants as of ~~March 31,~~September 30, 2020.

Reference Rate Reform. In March 2020, the FASB issued new accounting guidance for reference rate reform. This guidance is elective and provides expedients to facilitate financial reporting for the anticipated transition away from the London Inter-bank Offered Rate (LIBOR) and other interbank reference rates by the end of 2021. The optional expedients are effective for modification of existing contracts or new arrangements executed between March 12, 2020, through December 31, 2022.



FINANCIAL STATEMENTS	ORGANIZATION AND BASIS OF PRESENTATION

Duke Energy has variable-rate debt and manages interest rate risk by entering into financial contracts including interest rate swaps that are generally indexed to LIBOR. Impacted financial arrangements extending beyond 2021 may require contractual amendment or termination to fully adapt to a post-LIBOR environment. Duke Energy is assessing these financial arrangements and is evaluating the use of optional expedients outlined in the new accounting guidance. Alternative index provisions are also being assessed and incorporated into new financial arrangements that extend beyond 2021. The full outcome of the transition away from LIBOR cannot be determined at this time, but is not expected to have a material impact on the financial statements.

2. BUSINESS SEGMENTS

Duke Energy

Duke Energy's segment structure includes the following segments: Electric Utilities and Infrastructure, Gas Utilities and Infrastructure and Commercial Renewables. The Electric Utilities and Infrastructure segment primarily includes Duke Energy's regulated electric utilities in the Carolinas, Florida and the Midwest. The Gas Utilities and Infrastructure segment includes Piedmont, Duke Energy's natural gas local distribution companies in Ohio and Kentucky, and Duke Energy's natural gas storage and midstream pipeline investments.

The Commercial Renewables segment is primarily comprised of nonregulated utility-scale wind and solar generation assets located throughout the U.S. In 2020, Duke Energy continues to evaluate recoverability of a renewable merchant plant located in the Electric Reliability Council of Texas West market due to declining market pricing and declining long-term forecasted energy prices, primarily driven by lower forecasted natural gas prices. Duke Energy determined that the asset was not impaired as of September 30, 2020, because the carrying value of approximately $150 million approximates the aggregate estimated future undiscounted cash flows. A continued decline in energy market pricing would likely result in a future impairment. Duke Energy retained 51% ownership interest in this facility following the 2019 transaction to sell a minority interest in certain renewable assets.

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

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



	Three Months Ended September 30, 2020
	Electric		Gas					Total
	Utilities and		Utilities and			Commercial		Reportable
(in millions)	Infrastructure		Infrastructure			Renewables		Segments		Other			Eliminations			Total
Unaffiliated revenues	$	6,371	$	217		$	126	$	6,714	$	7		$	—		$	6,721
Intersegment revenues	8		24			—		32		17			(49		)	—
Total revenues	$	6,379	$	241		$	126	$	6,746	$	24		$	(49	)	$	6,721
Segment income (loss)^(a)(b)	$	1,381	$	(73	)	$	60	$	1,368	$	(103	)	$	—		$	1,265
Less: Noncontrolling interests																70
Add: Preferred stock dividend																39
Net Income																$	1,234
Segment assets	$	138,142	$	13,343		$	6,541	$	158,026	$	3,387		$	(4	)	$	161,409



	Three Months Ended September 30, 2019
	Electric		Gas				Total
	Utilities and		Utilities and		Commercial		Reportable
(in millions)	Infrastructure		Infrastructure		Renewables		Segments		Other			Eliminations			Total
Unaffiliated revenues	$	6,569	$	225	$	138	$	6,932	$	8		$	—		$	6,940
Intersegment revenues	8		24		—		32		17			(49		)	—
Total revenues	$	6,577	$	249	$	138	$	6,964	$	25		$	(49	)	$	6,940
Segment income (loss)^(c)	$	1,385	$	26	$	40	$	1,451	$	(124	)	$	—		$	1,327
Less: Noncontrolling interests															19
Add: Preferred stock dividend															15
Net Income															$	1,323



FINANCIAL STATEMENTS	BUSINESS SEGMENTS

(a)

Electric Utilities and Infrastructure includes $19 million recorded within Impairment charges and $8 million recorded within Operations, maintenance and other on the Duke Energy Carolinas' Condensed Consolidated Statements of Operations related to a partial settlement in the Duke Energy Carolinas' 2019 North Carolina rate case and $8 million recorded within Operations, maintenance and other on Duke Energy Progress' Condensed Consolidated Statements of Operation related to a partial settlement in the Duke Energy Progress' 2019 North Carolina rate case. See Note 3 for more information. Additionally, Electric Utilities and Infrastructure includes $5 million of Impairment charges related to gas pipeline assets recorded on Duke Energy Progress' Condensed Consolidated Statements of Operations.


(b)	Gas Utilities and Infrastructure includes $78 million recorded within Equity in (losses) earnings of unconsolidated affiliates on the Condensed Consolidated Statements of Operations and $7 million in Impairment charges recorded on the Piedmont Condensed Consolidated Statements of Operations related to gas pipeline investments.


(c)	Electric Utilities and Infrastructure includes a $25 million reduction of a prior year impairment recorded at Citrus County CC related to the plant's cost cap and is recorded within Impairment charges on Duke Energy Florida's Condensed Consolidated Statements of Operations.

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

Three Months Ended March 31, 2020
Electric
Gas
Total

Utilities and
Utilities and
Commercial
Reportable

(in millions) Infrastructure
Infrastructure
Renewables
Segments
Other
Eliminations
Total
Unaffiliated revenues $ 5,174
$ 640
$ 129
$ 5,943
$ 6
$ —
$ 5,949
Intersegment revenues 9
24
—
33
17
(50 ) —
Total revenues $ 5,183
$ 664
$ 129
$ 5,976
$ 23
$ (50 ) $ 5,949
Segment income (loss)^(a)
$ 705
$ 249
$ 57
$ 1,011
$ (112 ) $ —
$ 899
Add: Noncontrolling interests^(b)
(48 )
Add: Preferred stock dividend 39
Net income $ 890
Segment assets $ 134,838
$ 14,098
$ 6,184
$ 155,120
$ 4,964
$ (12 ) $ 160,072


	Three Months Ended March 31, 2019																	Nine Months Ended September 30, 2020
	Electric		Gas				Total											Electric		Gas					Total
	Utilities and		Utilities and		Commercial		Reportable											Utilities and		Utilities and			Commercial		Reportable
(in millions)	Infrastructure		Infrastructure		Renewables		Segments		Other			Eliminations			Total			Infrastructure		Infrastructure			Renewables		Segments		Other			Eliminations			Total
Unaffiliated revenues	$	5,321	$	732	$	106	$	6,159	$	4		$	—		$	6,163		$	16,571	$	1,122		$	378	$	18,071	$	20		$	—		$	18,091
Intersegment revenues	8		24		—		32		17			(49		)	—			25		72			—		97		53			(150		)	—
Total revenues	$	5,329	$	756	$	106	$	6,191	$	21		$	(49	)	$	6,163		$	16,596	$	1,194		$	378	$	18,168	$	73		$	(150	)	$	18,091
Segment income (loss)(c)	$	750	$	226	$	13	$	989	$	(89	)	$	—		$	900		$	2,839	$	(1,400	)	$	207	$	1,646	$	(299	)	$	—		$	1,347
Add: Noncontrolling interests^(b)															(7		)
Net income															$	893
Less: Noncontrolling interests																																	208
Add: Preferred stock dividend																																	93
Net Income																																	$	1,232



	Nine Months Ended September 30, 2019
	Electric		Gas				Total
	Utilities and		Utilities and		Commercial		Reportable
(in millions)	Infrastructure		Infrastructure		Renewables		Segments		Other			Eliminations			Total
Unaffiliated revenues	$	17,357	$	1,239	$	362	$	18,958	$	18		$	—		$	18,976
Intersegment revenues	24		72		—		96		53			(149		)	—
Total revenues	$	17,381	$	1,311	$	362	$	19,054	$	71		$	(149	)	$	18,976
Segment income (loss)^(d)	$	2,944	$	292	$	139	$	3,375	$	(328	)	$	—		$	3,047
Less: Noncontrolling interests															110
Add: Preferred stock dividend															27
Net Income															$	2,964

(a)


(b)	Gas Utilities and Infrastructure includes $2.1 billion recorded within Equity in (losses) earnings of unconsolidated affiliates on the Condensed Consolidated Statements of Operations and $7 million of Impairment charges recorded on the Piedmont Condensed Consolidated Statements of Operations related to gas pipeline investments. See Notes 3 and 12 for additional information.


(c)	Other includes a $98 million reversal, included in Operations, maintenance and other on the Condensed Consolidated Statements of Operations, of 2018 severance costs due to ~~the~~a partial settlement ofin the Duke Energy ~~Carolina's~~Carolinas' 2019 North Carolina rate case. See Note 3 for additional information.


~~(b)~~(d)	~~Includes~~Electric Utilities and Infrastructure includes a $25 million reduction of a prior year impairment recorded at Citrus County CC related to the ~~allocation~~plant's costs cap and is recorded within Impairment charges on Duke Energy Florida's Condensed Consolidated Statements of ~~losses to noncontrolling tax equity members. See Note 1 for additional information.~~Operations.



FINANCIAL STATEMENTS	BUSINESS SEGMENTS

Duke Energy Ohio

Duke Energy Ohio has 2 reportable segments, Electric Utilities and Infrastructure and Gas Utilities and Infrastructure. The remainder of Duke Energy Ohio's operations is presented as Other.


	Three Months Ended March 31, 2020														Three Months Ended September 30, 2020
	Electric		Gas		Total										Electric		Gas		Total
	Utilities and		Utilities and		Reportable										Utilities and		Utilities and		Reportable
(in millions)	Infrastructure		Infrastructure		Segments		Other			Eliminations			Total		Infrastructure		Infrastructure		Segments		Other			Eliminations			Total
Total revenues	$	346	$	152	$	498	$	—		$	—		$	498	$	394	$	79	$	473	$	—		$	—		$	473
Segment income/Net (loss) income	$	30	$	36	$	66	$	(1	)	$	—		$	65
Segment income/Net income															$	63	$	9	$	72	$	(2	)	$	—		$	70
Segment assets	$	6,238	$	3,135	$	9,373	$	26		$	(2	)	$	9,397	$	6,448	$	3,297	$	9,745	$	27		$	(23	)	$	9,749


	Three Months Ended March 31, 2019											Three Months Ended September 30, 2019
	Electric		Gas		Total							Electric		Gas		Total
	Utilities and		Utilities and		Reportable							Utilities and		Utilities and		Reportable
(in millions)	Infrastructure		Infrastructure		Segments		Other			Total		Infrastructure		Infrastructure		Segments		Other			Total
Total revenues	$	355	$	176	$	531	$	—		$	531	$	408	$	81	$	489	$	—		$	489
Segment income/Net (loss) income	$	36	$	35	$	71	$	(2	)	$	69
Segment income/Net income												$	62	$	13	$	75	$	(1	)	$	74



	Nine Months Ended September 30, 2020
	Electric		Gas		Total
	Utilities and		Utilities and		Reportable
(in millions)	Infrastructure		Infrastructure		Segments		Other			Total
Total revenues	$	1,070	$	324	$	1,394	$	—		$	1,394
Segment income/Net (loss) income	$	137	$	68	$	205	$	(4	)	$	201



	Nine Months Ended September 30, 2019
	Electric		Gas		Total
	Utilities and		Utilities and		Reportable
(in millions)	Infrastructure		Infrastructure		Segments		Other			Total
Total revenues	$	1,099	$	354	$	1,453	$	—		$	1,453
Segment income/Net (loss) income	$	129	$	65	$	194	$	(4	)	$	190

3. REGULATORY MATTERS

RATE-RELATED INFORMATION

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



~~FINANCIAL STATEMENTS~~	~~REGULATORY MATTERS~~

Duke Energy Carolinas and Duke Energy Progress

COVID-19 Filings

North Carolina

On March 10, 2020, Governor Roy Cooper ~~issued Executive Order No. 116 declaring~~declared a state of emergency due to the COVID-19 pandemic. InOn March 19, 2020, the NCUC issued an ~~effort~~order directing that utilities under its jurisdiction suspend disconnections for nonpayment of utility bills during the state of emergency and allow for customers to enter into payment arrangements to pay off arrearages accumulated during the state of emergency after the end of the state of emergency. Additionally, to help mitigate the financial impacts of the COVID-19 pandemic on their customers, on March 19, 2020, Duke Energy Carolinas and Duke Energy Progress filed a request with the NCUC seeking authorization to waive: (1) any late payment charges incurred by a residential or nonresidential customer, effective March 21, 2020; (2) the application of fees for checks returned for insufficient funds for residential and nonresidential customers; (3) the reconnection charge when a residential or nonresidential customer seeks to have service restored for those customers whose service was recently disconnected for nonpayment and to work with customers regarding the other requirements to restore service, including re-establishment of credit; and (4) the fees and charges associated with the use of credit cards or debit cards to pay residential electric utility bills, effective March 21, 2020. The NCUC granted the companies’ request on March 20, 2020.

On March 31, 2020, the governor issued Executive Order No. 124, which, in addition to requiring the steps in the NCUC order noted above, stated that nothing in Executive Order No. 124 shall relieve a customer of its obligation to pay bills for receipt of utility services provided. Executive Order No. 124 remains in effect for 60 days unless otherwise rescinded or replaced with a superseding Executive Order.



FINANCIAL STATEMENTS	REGULATORY MATTERS

On ~~March 31, 2020, the Carolina Utility Customers Association (CUCA) filed a petition with the NCUC to temporarily suspend minimum demand charges for commercial and industrial customers. On April 2,~~July 29, 2020, the NCUC issued anits Order Lifting Disconnection Moratorium and Allowing Collection of Arrearages Pursuant to Special Repayment Plans. The order ~~requiring~~contained the ~~North Carolina Public Staff (Public Staff)~~following: (1) public utilities may resume customer disconnections due to nonpayment for bills first rendered on or after September 1, 2020, after appropriate notice; (2) the late fee moratorium will continue through the end of the state of emergency or until further order of the commission; (3) Duke Energy utilities may reinstate fees for checks returned for insufficient funds as well as transaction fees for use of credit cards or debit cards for bills first rendered on or after September 1, 2020; and (4) no sooner than September 1, 2020, the collection of past-due or delinquent accounts accrued up to and including August 31, 2020, may proceed subject to conditions. Duke Energy Carolinas and Duke Energy ~~Carolinas, Duke Energy~~ Progress resumed normal billing practices as of October 1, 2020, with the exception of the billing of late payment charges. Customers were notified of the resumption of normal billing practices, the option of deferred payment arrangements and ~~other utilities~~where to ~~file responses. On April 9, 2020,~~ find assistance, if necessary. Service disconnections for nonpayment for residential customers resumed on November 2, 2020.

Duke Energy Carolinas and Duke Energy Progress filed ~~responses~~a joint petition on August 7, 2020, with the NCUC for deferral treatment of incremental costs and waived customer fees due to ~~CUCA’s petition opposing CUCA’s request. The companies assert that voiding commission-approved tariffs and allowing all commercial and industrial customers~~the COVID-19 pandemic. On October 30, 2020, the NCUC issued an order extending deadlines to file comments on the ~~requested rate schedules~~joint petition to ~~avoid paying a portion of their bills is not legally permissible~~November 5, 2020, and ~~would result in these costs unfairly being shifted to other customers that are already paying their respective fair share of similar fixed components. Pursuant to the NCUC’s April 2 order,~~ reply comments ~~were filed by CUCA, the Public Staff and Duke Energy Carolinas and Duke Energy Progress on April 15,~~to November 30, 2020. ~~A final order from the NCUC deciding CUCA's request is pending.~~ Duke Energy Carolinas and Duke Energy Progress cannot predict the outcome of this matter.

South Carolina

On March 13, 2020, Governor Henry McMaster ~~issued Executive Order No. 2020-08 declaring~~declared a state of emergency due to the COVID-19 pandemic. The governor also issued a letter on March 14, 2020, to the ORS Executive Director regarding the suspension of disconnection of essential utility services for nonpayment. On March 16, 2020, citing the governor’s letter, the ORS filed a request asking the PSCSC to grant waivers so that utilities could suspend disconnections of utility services for nonpayment. Duke Energy Carolinas and Duke Energy Progress supported such motion. On March 18, 2020, the PSCSC issued an order approving such waivers, and also approved waivers for regulations related to late fees and reconnect fees. The PSCSC's order also required utilities to track the financial impacts of actions taken pursuant to such waivers for possible reporting to the PSCSC.

On ~~April 30,~~May 13, 2020, the ORS ~~requested~~filed a letter with the PSCSC ~~grant~~that included a ~~waiver~~request from Governor McMaster that utilities proceed with developing and implementing plans for phasing in normal business operations. On May 14, 2020, the PSCSC conditionally vacated the regulation waivers regarding termination of ~~the applicable regulations~~service and suspension of disconnect fees. Prior to ~~allow~~termination, utilities are to refer past-due customers ~~the flexibility~~ to ~~obtain~~local organizations for assistance and/or deferred payment ~~plans longer than 6 months for past-due amounts.~~arrangements. Duke Energy Carolinas and Duke Energy Progress filed a report on June 30, 2020, as required by PSCSC order, reporting revenue impact, costs and savings related to COVID-19 to date. On ~~May 5,~~August 14, 2020, Duke Energy Carolinas and Duke Energy Progress filed ~~responsive comments stating that while utility bills will remain due,~~a joint petition with the PSCSC for approval of an accounting order to defer incremental COVID-19 related costs incurred through June 30, 2020, and for the ongoing months during the duration of the COVID-19 pandemic. The deferral request did not include lost revenues. Updates on cost impacts were filed on September 30, 2020, and included financial impacts through the end of August 2020. On October 16, 2020, the ORS requested the PSCSC delay taking formal action on the deferral request until the ORS and any intervenors complete discovery. The PSCSC issued an order on October 21, 2020, to grant additional time to complete discovery until January 20, 2021, and to establish a procedural schedule.

On August 17, 2020, Duke Energy Carolinas and Duke Energy Progress ~~do not plan~~filed an update on their planned return to ~~immediately reinstitute disconnection upon~~normal operations during the ~~expiration~~COVID-19 pandemic. Normal billing practices resumed in South Carolina as of October 1, 2020, and service disconnections for nonpayment resumed on October 12, 2020. Customers were notified of the ~~state~~resumption of ~~emergency~~normal billing practices, the option of payment arrangements and ~~intend~~where to ~~work through a potential grace period as economic recovery begins.~~find assistance, if necessary. Duke Energy Carolinas and Duke Energy Progress ~~also concurred with~~cannot predict the ~~observation~~outcome of the ORS that reduced usage is impacting the fixed cost recovery and revenue assumptions included in rates. Those costs include not only ongoing operational and financing costs necessary to serve customers, but also the borrowings necessary to support extended payment arrangements that will be an important part of emerging from the COVID-19 pandemic.this matter.

2020 North Carolina Storm Securitization Filings

On October 26, 2020, Duke Energy Carolinas and Duke Energy Progress ~~will continue to track such costs, lost revenues and potential cost savings for future evaluation by the PSCSC.~~

~~Additionally, on May 8, 2020, the ORS~~ filed a ~~motion~~joint petition with the NCUC, as agreed to in partial settlements reached in the 2019 North Carolina Rate Cases for Duke Energy Carolinas and Duke Energy Progress, seeking authorization for the ~~PSCSC to solicit comments from utilities~~financing of each utilities’ storm recovery activities required as a result of Hurricane Florence, Hurricane Michael, Hurricane Dorian and ~~interested stakeholders regarding measures to be taken to mitigate impacts of COVID-19 on utility customers~~Winter Storm Diego. Specifically, Duke Energy Carolinas and ~~require recordkeeping. In a detailed motion,~~Duke Energy Progress requested that the ORS specifically asked the PSCSC to: (1) solicit input from utilities regarding the temporary mitigation measures to address COVID-19; (2) request utilities to inform the PSCSC of the plans utilities have to return to normalized operations; (3) require utilities to track revenue impacts, incrementalNCUC find that their storm recovery costs and ~~savings~~ related ~~to COVID-19~~financing costs are appropriately financed by debt secured by storm recovery property, and ~~file the findings with the PSCSC on a quarterly basis; and (4) include any other matters~~ that the ~~PSCSC believes should be addressed.~~commission issue financing orders by which each utility may accomplish such financing using a securitization structure. The ~~ORS requests that such comments be filed within 30 days of a PSCSC order approving~~total revenue requirement over the ~~motion.~~proposed 15-year bond period for the storm recovery charges is approximately $262 million for Duke Energy Carolinas and $842 million for Duke Energy Progress. The NCUC has until March 10, 2021, to issue financing orders. Duke Energy Carolinas and Duke Energy Progress cannot predict the outcome of this matter.

Duke Energy Carolinas

2017 North Carolina Rate Case

On August 25, 2017, Duke Energy Carolinas filed an application with the NCUC for a rate increase for retail customers of approximately $647 million, which represented an approximate 13.6% increase in annual base revenues. The request for rate increase was driven by capital investments subsequent to the previous base rate case, including the William States Lee Combined Cycle Facility, grid improvement projects, AMI, investments in customer service technologies, costs of complying with CCR regulations and the Coal Ash Act and recovery of costs related to licensing and development of the William States Lee III Nuclear Station.

million. On February 28, 2018, Duke Energy Carolinas and the North Carolina Public Staff (Public Staff) filed an Agreement and Stipulation of Partial Settlement resolving certain portions of the proceeding. Terms of the settlement included a return on equity of 9.9% and a capital structure of 52% equity and 48% debt.

On June 22, 2018, the NCUC issued an order approving the Stipulation of Partial Settlement and requiring a revenue reduction.



~~FINANCIAL STATEMENTS~~	~~REGULATORY MATTERS~~

~~On July 20, 2018, the~~The North Carolina Attorney General ~~filed a Notice of Appeal to the North Carolina Supreme Court from the June 22, 2018, Order Accepting Stipulation, Deciding Contested Issues~~ and Requiring Revenue Reduction issued by the NCUC. The Attorney General contends the commission’s order should be reversed and remanded, as it is in excess of the commission’s statutory authority; affected by errors of law; unsupported by competent, material and substantial evidence in view of the entire record as submitted; and arbitrary or capricious. The Sierra Club, North Carolina Sustainable Energy Association, North Carolina Justice Center, North Carolina Housing Coalition, Natural Resource Defense Council and Southern Alliance for Clean Energy alsoother parties separately filed Notices of Appeal to the North Carolina Supreme Court. On August 8, 2018, the Public Staff filed a Notice of Cross Appeal to the North Carolina Supreme Court, which contends the commission’s June 22, 2018, order should be reversed and remanded, as it is affected by errors of law, and is unsupported by substantial evidence with regard to the commission’s failure to consider substantial evidence of coal ash related environmental violations.Court. On November 29, 2018, the North Carolina Attorney General's Office filed a motion with the North Carolina Supreme Court requesting the court consolidate the Duke Energy Carolinas and Duke Energy Progress appeals and enter an order adopting the parties’ proposed briefing schedule as set out in the filing. On November 29, 2018, the North Carolina Supreme Court adopted a schedule for briefing set forth in the motion to consolidate the Duke Energy Carolinas and Duke Energy Progress appeals. Appellant briefs were filed on April 26, 2019. The Appellee response briefs were filed on September 25, 2019. Oral arguments before the North Carolina Supreme Court were held on March 11, 2020. Duke Energy Carolinas cannot predict the outcome of this matter.



FINANCIAL STATEMENTS	REGULATORY MATTERS

2019 North Carolina Rate Case

On September 30, 2019, Duke Energy Carolinas filed an application with the NCUC for a net rate increase for retail customers of approximately $291 million, which represented an approximate 6% increase in annual base revenues. The gross rate case revenue increase request was $445 million, which was offset by an EDIT rider of $154 million to return to customers North Carolina and federal EDIT resulting from recent reductions in corporate tax rates. The request for a rate increase was driven by major capital investments subsequent to the previous base rate case, coal ash pond closure costs, accelerated coal plant depreciation and deferred 2018 storm costs. Duke Energy Carolinas requested rates be effective no later than August 1, 2020. The NCUC established a procedural schedule with an evidentiary hearing to begin on March 23, 2020. On March 16, 2020, in consideration of public health and safety as a result of the COVID-19 pandemic, Duke Energy Carolinas filed a motion with the NCUC seeking a suspension of the procedural schedule in the rate case, including issuing discovery requests, and postponement of the evidentiary hearing for 60 days. Also on March 16, 2020, the NCUC issued an Order Postponing Hearing and Addressing Procedural Matters, which postponed the evidentiary hearing until further order by the commission.

On March 25, 2020, Duke Energy Carolinas and the Public Staff filed an Agreement and Stipulation of Partial Settlement, which is subject to review and approval of the NCUC, resolving certain issues in the base rate proceeding. Major components of the settlement included:

Removal of deferred storm costs from the rate case;

Filing a petition seeking to securitize the deferred storm costs within 120 days of a commission order in this rate case regarding the reasonableness and prudency of the storm costs;

Agreement of certain assumptions to demonstrate the quantifiable benefits to customers of a securitization financing; and

Agreement on certain accounting matters, including recovery of employee incentives, severance, aviation costs and executive compensation.

On May 6, 2020, Duke Energy Carolinas, Duke Energy Progress and the Public Staff filed a joint motion requesting that the NCUC issue an order scheduling one consolidated evidentiary hearing to consider the companies’ applications for net rate increases. ~~The~~On June 17, 2020, the NCUC issued an order adopting procedures for the expert witness hearings to take place in three phases: (1) a hearing on issues common to both rate cases conducted remotely; (2) a hearing on Duke Energy Carolinas specific rate case issues, followed immediately by; (3) a hearing on Duke Energy Progress specific rate case issues. On July 24, 2020, Duke Energy Carolinas filed its request for approval of its notice to customers required to implement temporary rates. On July 27, 2020, Duke Energy Carolinas filed a joint motion ~~suggests, health~~with Duke Energy Progress and ~~safety permitting,~~the Public Staff notifying the commission that the ~~commission consider~~parties reached a joint partial settlement with the ~~possibility~~Public Staff. Also on July 27, 2020, Duke Energy Carolinas filed a letter stating that it intended to update its temporary rates calculation to reflect the terms of ~~holding~~ the ~~consolidated hearing in July. If~~partial settlement.

On July 31, 2020, Duke Energy Carolinas and the Public Staff filed a Second Agreement and Stipulation of Partial Settlement (Second Partial Settlement), which is subject to review and approval of the NCUC, ~~grants~~resolving certain remaining issues in the ~~joint~~base rate proceeding. Major components of the Second Partial Settlement included:

A return on equity of 9.6% and a capital structure of 52% equity and 48% debt;

Agreement on amortization over a five-year period for unprotected federal EDIT flowbacks to customers;

Agreement on the inclusion of plant in service and other revenue requirement updates through May 31, 2020, subject to Public Staff review. Annual revenue requirement associated with the May 31 update is estimated at $45 million; and

Settlement to allow the deferral of costs for certain grid projects placed in service between June 1, 2020, and December 31, 2022, totaling $0.8 billion.

The remaining items litigated at hearing included recovery of deferred coal ash compliance costs that are subject to asset retirement obligation accounting, implementation of new depreciation rates and the amortization period of the loss on the hydro station sale.

On August 4, 2020, Duke Energy Carolinas filed an amended motion for approval of its amended notice to customers, seeking to exercise its statutory right to implement temporary rates subject to refund on or after August 24, 2020. The revenue requirement to be recovered, subject to refund, through the temporary rates is based on and consistent with the base rate component of the Second Partial Settlement with the Public Staff and excludes the items to be litigated noted above. Duke Energy Carolinas will not begin the amortization or implementation of these items until a final order is issued in the rate case and new base rates are implemented. These items will also be excluded when determining whether a refund of amounts collected through these temporary rates is needed. In addition, Duke Energy Carolinas also seeks authorization to place a temporary decrement EDIT Rider into effect, concurrent with the temporary base rate change. The temporary rate changes are not final rates and remain subject to the NCUC's determination of the just and reasonable rates to be charged by Duke Energy Carolinas on a permanent basis. The NCUC approved the August 4, 2020 amended temporary rates motion on August 6, 2020, and temporary rates went into effect on August 24, 2020.

The Duke Energy Carolinas evidentiary hearing concluded on September 18, 2020, and post-hearing filings were filed with the NCUC from all parties by November 4, 2020. Duke Energy Carolinas expects the NCUC to issue an order on its net rate increase bybefore the end of the ~~year.~~first quarter of 2021. Duke Energy Carolinas cannot predict the outcome of this matter.

2018 South Carolina Rate Case

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



FINANCIAL STATEMENTS	REGULATORY MATTERS

Duke Energy Carolinas also requested approval of its proposed Grid Improvement Plan (GIP), adjustments to its Prepaid Advantage Program and a variety of accounting orders related to ongoing costs for environmental compliance, including recovery over a five-year period of $242 million of deferred coal ash related compliance costs, grid investments between rate changes, incremental depreciation expense, a result of new depreciation rates from the depreciation study approved in the 2017 North Carolina Rate Case above, and the balance of development costs associated with the cancellation of the Lee Nuclear Project. Finally, Duke Energy Carolinas sought approval to establish a reserve and accrual for end-of-life nuclear costs for nuclear fuel and materials and supplies. On March 8, 2019, the ORS moved to establish a new and separate hearing docket to review and consider the GIP proposed by Duke Energy Carolinas. Subsequently, on March 12, 2019, the ORS and Duke Energy Carolinas executed a Stipulation resolving the ORS’s motion. The Stipulation provided that costs incurred for the GIP after January 1, 2019, would be deferred with a return, subject to evaluation in a future rate proceeding. The Stipulation was approved by the PSCSC on June 19, 2019. On December 16, 2019, Duke Energy Carolinas and Duke Energy Progress filed a Joint Petition to Establish an Informational Docket for Review and Consideration of Grid Improvement Plans through which Duke Energy Carolinas and Duke Energy Progress would provide interested stakeholders information on the companies' grid activities. The PSCSC requested parties comment on procedural matters by January 31, 2020; accordingly, various groups filed comments, none of which opposed an informational docket. Duke Energy Carolinas cannot predict the outcome of this matter.

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

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

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

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

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

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

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

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

As a result of the order, revised customer rates were effective June 1, 2019. On May 31, 2019, Duke Energy Carolinas filed a Petition for Rehearing or Reconsideration of that order contending substantial rights of Duke Energy Carolinas were prejudiced by unlawful, arbitrary and capricious rulings by the ~~commission~~PSCSC on certain issues presented in the proceeding. On June 19, 2019, the PSCSC issued a Directive denying Duke Energy Carolinas' request to rehear or reconsider the commission's rulings on certain issues presented in the proceeding including coal ash remediation and disposal costs, return on equity and the recovery of a return on deferred operation and maintenance expenses. An order detailing the commission's decision in the Directive was issued on October 18, 2019. Duke Energy Carolinas filed a notice of appeal on November 15, 2019, with the Supreme Court of South Carolina. On November 20, 2019, the South Carolina Energy Users Committee filed a Notice of Appeal and the ORS filed a Notice of Cross Appeal with the Supreme Court of South Carolina. On February 12, 2020, Duke Energy Carolinas and the ORS filed a joint motion to extend briefing schedule deadlines, which was approved by the Supreme Court of South Carolina on February 20, 2020. On March 10, 2020, the ORS filed a consent motion requesting withdrawal of their ~~appeal.~~appeal, which was granted by the Supreme Court of South Carolina on April 30, 2020. Initial briefs were filed on April 21, ~~2020. Response briefs and reply briefs are due July 6,~~ 2020, ~~and August 11, 2020, respectively. Also on April 21, 2020,~~which included the South Carolina Energy User's Committee ~~filed a~~ brief arguing that the PSCSC erred in allowing Duke Energy Carolinas' recovery of costs related to the Lee Nuclear Station. Response briefs were filed on July 6, 2020, and reply briefs were filed on August 11, 2020. Oral arguments have not yet been scheduled by the Supreme Court of South Carolina. Based on legal analysis and the filing of the appeal, Duke Energy Carolinas has not recorded an adjustment for its deferred coal ash costs. Duke Energy Carolinas cannot predict the outcome of this matter.

Duke Energy Progress

2017 North Carolina Rate Case

On June 1, 2017, Duke Energy Progress filed an application with the NCUC for a rate increase for retail customers of approximately $477 million, which ~~represented an approximate 14.9% increase in annual base revenues. Subsequent to the filing, Duke Energy Progress~~was subsequently adjusted ~~the requested amount~~ to $420 million, representing an approximate 13% increase. The request for rate increase was 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.

million. On November 22, 2017, Duke Energy Progress and the Public Staff filed an Agreement and Stipulation of Partial Settlement resolving certain portions of the proceeding. Terms of the settlement included a return on equity of 9.9% and a capital structure of 52% equity and 48% debt. On February 23, 2018, the NCUC issued an order approving the stipulation.



~~FINANCIAL STATEMENTS~~	~~REGULATORY MATTERS~~

~~On May 15, 2018, the~~ The Public Staff, the North Carolina Attorney General and the Sierra Club filed ~~a Notice~~notices of ~~Cross Appeal~~appeal to the North Carolina Supreme Court from the NCUC's February 23, 2018, order. The Public Staff contends the NCUC’s order should be reversed and remanded, as it is affected by errors of law, and is unsupported by competent, material and substantial evidence in view of the entire record as submitted. The North Carolina Attorney General and Sierra Club also filed Notices of Appeal to the North Carolina Supreme Court from the February 23, 2018, order. Court.

On November 29, 2018, the North Carolina Attorney General's Office filed a motion with the North Carolina Supreme Court requesting the court consolidate the Duke Energy Progress and Duke Energy Carolinas appeals and enter an order adopting the parties’ proposed briefing schedule as set out in the filing. Appellant briefs were filed on April 26, 2019. The Appellee response briefs were filed on September 25, 2019. Oral arguments before the North Carolina Supreme Court were held on March 11, 2020. Duke Energy Progress cannot predict the outcome of this matter.

2019 North Carolina Rate Case

On October 30, 2019, Duke Energy Progress filed an application with the NCUC for a net rate increase for retail customers of approximately $464 million, which represented an approximate 12.3% increase in annual base revenues. The gross rate case revenue increase request was $586 million, which was offset by riders of $122 million, primarily an EDIT rider of $120 million to return to customers North Carolina and federal EDIT resulting from recent reductions in corporate tax rates. The request for rate increase was driven by major capital investments subsequent to the previous base rate case, coal ash pond closure costs, accelerated coal plant depreciation and deferred 2018 storm costs. Duke Energy Progress seeks to defer and recover incremental Hurricane Dorian storm costs in this proceeding and requests rates be effective no later than September 1, 2020. As a result of the COVID-19 pandemic, on March 24, 2020, the NCUC suspended the procedural schedule and postponed the previously scheduled evidentiary hearing on this matter indefinitely. On April 7, 2020, the NCUC issued an order partially resuming the procedural schedule requiring intervenors to file direct testimony on April 13, 2020. Public Staff filed supplemental direct testimony on April 23, 2020. Duke Energy Progress filed rebuttal testimony on May 4, 2020.



FINANCIAL STATEMENTS	REGULATORY MATTERS

On June 2, 2020, Duke Energy Progress and the Public Staff filed an Agreement and Stipulation of Partial Settlement, which is subject to review and approval of the NCUC, resolving certain issues in the base rate proceeding. Major components of the settlement included:

Removal of deferred storm costs from the rate case;

Filing a petition seeking to securitize the deferred storm costs within 120 days of a commission order in this rate case regarding the reasonableness and prudency of the storm costs;

Agreement of certain assumptions to demonstrate the quantifiable benefits to customers of a securitization financing;

Agreement that the Asheville CC project is complete and in service and agreement on the amount to be included in rate base; and

Agreement on certain accounting matters, including recovery of employee incentives, severance, aviation costs and executive compensation.

On May 6, 2020, Duke Energy Progress, Duke Energy Carolinas and the Public Staff filed a joint motion requesting that the NCUC issue an order scheduling one consolidated evidentiary hearing to consider the companies’ applications for net rate increases. ~~The~~On June 17, 2020, the NCUC issued an order adopting procedures for the expert witness hearings to take place in three phases: (1) a hearing on issues common to both rate cases conducted remotely; (2) a hearing on Duke Energy Carolinas specific rate case issues, followed immediately by; (3) a hearing on Duke Energy Progress specific rate case issues. On July 27, 2020, Duke Energy Progress filed a joint motion ~~suggests, health~~with Duke Energy Carolinas and ~~safety permitting,~~the Public Staff notifying the commission that the ~~commission consider~~parties reached a joint partial settlement with the ~~possibility~~Public Staff.

On July 31, 2020, Duke Energy Progress and the Public Staff filed a Second Agreement and Stipulation of ~~holding the consolidated hearing in July. If~~Partial Settlement (Second Partial Settlement), which is subject to review and approval of the NCUC, ~~grants~~resolving certain remaining issues in the ~~joint~~base rate proceeding. Major components of the Second Partial Settlement included:

A return on equity of 9.6% and a capital structure of 52% equity and 48% debt;

Agreement on amortization over a five-year period for unprotected federal EDIT flowbacks to customers;

Settlement to allow the deferral of costs for certain grid projects placed in service between June 1, 2020, and December 31, 2022, of $0.5 billion.

The remaining items litigated at hearing included recovery of deferred coal ash compliance costs that are subject to asset retirement obligation accounting and implementation of new depreciation rates.

On August 7, 2020, Duke Energy Progress filed a motion for approval of notice required to implement temporary rates, seeking to exercise its statutory right to implement temporary rates subject to refund on or after September 1, 2020. The revenue requirement to be recovered subject to refund through the temporary rates is based on and consistent with the terms of the base rate component of the settlement agreements with the Public Staff and excludes items to be litigated noted above. Duke Energy Progress will not begin the amortization or implementation of these items until a final determination is issued in the rate case and new base rates are implemented. These items will also be excluded when determining whether a refund of amounts collected through these temporary rates is needed. In addition, Duke Energy Progress also seeks authorization to place a temporary decrement EDIT Rider into effect, concurrent with the temporary base rate change. The temporary rate changes are not final rates and remain subject to the NCUC's determination of the just and reasonable rates to be charged by Duke Energy Progress on a permanent basis. The NCUC approved the August 7, 2020 temporary rates motion on August 11, 2020, and temporary rates went into effect on September 1, 2020.

The Duke Energy Progress evidentiary hearing concluded on October 6, 2020, and post-hearing filings are due to be filed with the NCUC from all parties by December 4, 2020. Duke Energy Progress expects the NCUC to issue an order on its net rate increase by the end of the ~~year.~~first quarter of 2021. Duke Energy Progress cannot predict the outcome of this matter.

Hurricane Dorian

Hurricane Dorian reached the Carolinas in September 2019 as a Category 2 hurricane making landfall within Duke Energy Progress’ service territory. Approximately 270,000 North Carolina customers and 30,000 South Carolina customers were impacted by the slow-moving storm that brought high winds, tornadoes and heavy rain. With storm-response mobilization occurring in preparation for the storm and the assistance of mutual aid partners, full restoration was accomplished within four days for all customers able to receive service. Total estimated incremental operation and maintenance expenses incurred to repair and restore the system are approximately ~~$177~~$168 million with an additional $4 million in capital investments made for restoration efforts. Approximately ~~$151~~$145 million and $179 million of the operation and maintenance expenses are deferred in Regulatory assets within Other Noncurrent Assets on the Condensed Consolidated Balance Sheets as of ~~March 31,~~September 30, 2020, and December 31, 2019, respectively. A request for an accounting order to defer incremental storm costs associated with Hurricane Dorian was included in Duke Energy Progress' October 30, 2019, general rate case filing with the NCUC. Terms of the June 2, 2020, Agreement and Stipulation of Partial Settlement removed incremental storm costs from the general rate case. A petition seeking to securitize these costs, along with costs from Hurricane Florence, Hurricane Michael and Winter Storm Diego, was filed on October 26, 2020, with the NCUC. The NCUC has until March 10, 2021, to issue financing orders. Duke Energy Progress cannot predict the outcome of this matter.

On February 7, 2020, a petition was filed with the PSCSC in the 2019 storm deferrals docket requesting deferral of approximately $22 million in operation and maintenance expenses to an existing storm deferral balance previously approved by the PSCSC. The PSCSC voted to approve the request on March 4, 2020, and issued a final order on April 7, 2020. On July 1, 2020, Duke Energy Progress filed a supplemental true up reducing the actual costs to $17 million.



FINANCIAL STATEMENTS	REGULATORY MATTERS

2018 South Carolina Rate Case

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

Duke Energy Progress also requested approval of its proposed GIP, approval of a Prepaid Advantage Program and a variety of accounting orders related to ongoing costs for environmental compliance, including recovery over a five-year period of $51 million of deferred coal ash related compliance costs, AMI deployment, grid investments between rate changes and regulatory asset treatment related to the retirement of a generating plant located in Asheville, North Carolina. Finally, Duke Energy Progress sought approval to establish a reserve and accrual for end-of-life nuclear costs for materials and supplies and nuclear fuel. On March 8, 2019, the ORS moved to establish a new and separate hearing docket to review and consider the GIP proposed by Duke Energy Progress. Subsequently, on March 12, 2019, the ORS and Duke Energy Carolinas executed a Stipulation resolving the ORS’s motion, and Duke Energy Progress agreed to the Stipulation, as did other parties in the rate case. The Stipulation provided that costs incurred for the GIP after January 1, 2019, would be deferred with a return, with all costs subject to evaluation in a future rate proceeding, and that Duke Energy Progress would refile for consideration of the GIP in a new docket for resolution by January 1, 2020. The Stipulation was approved by the PSCSC on June 19, 2019. On December 16, 2019, Duke Energy Progress and Duke Energy Carolinas filed a Joint Petition to Establish an Informational Docket for Review and Consideration of Grid Improvement Plans through which Duke Energy Progress and Duke Energy Carolinas would provide interested stakeholders information on the companies' grid activities. The PSCSC requested parties comment on procedural matters by January 31, 2020; accordingly, various groups filed comments, none of which opposed an informational docket. Duke Energy Progress cannot predict the outcome of this matter.



~~FINANCIAL STATEMENTS~~	~~REGULATORY MATTERS~~

million.

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

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

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

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

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

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

As a result of the order, revised customer rates were effective June 1, 2019. On May 31, 2019, Duke Energy Progress filed a Petition for Rehearing or Reconsideration of that order contending substantial rights of Duke Energy Progress were prejudiced by unlawful, arbitrary and capricious rulings by the ~~commission~~PSCSC on certain issues presented in the proceeding. On June 19, 2019, the PSCSC issued a Directive denying Duke Energy Progress' request to rehear or reconsider the commission's rulings on certain issues presented in the proceeding including coal ash remediation and disposal costs, return on equity and the recovery of a return on deferred operation and maintenance expenses, but allowing additional litigation-related costs. As a result of the Directive allowing litigation-related costs, customer rates were revised effective July 1, 2019. An order detailing the commission's decision in the Directive was issued on October 18, 2019. Duke Energy Progress filed a notice of appeal on November 15, 2019, with the Supreme Court of South Carolina. The ORS filed a Notice of Cross Appeal on November 20, 2019. On February 12, 2020, Duke Energy Progress and the ORS filed a joint motion to extend briefing schedule deadlines, which was approved by the Supreme Court of South Carolina on February 20, 2020. On March 10, 2020, the ORS filed a consent motion requesting withdrawal of their ~~appeal.~~appeal, which was granted by the Supreme Court of South Carolina on April 30, 2020. Initial briefs were filed on April 21, 2020. Response briefs ~~and reply briefs are due~~were filed on July 6, 2020, and reply briefs were filed on August 11, ~~2020, respectively.~~2020. Oral arguments have not yet been scheduled by the Supreme Court of South Carolina. Based on legal analysis and the filing of the appeal, Duke Energy Progress has not recorded an adjustment for its deferred coal ash costs. Duke Energy Progress cannot predict the outcome of this matter.

~~Western~~Duke Energy Ohio

Duke Energy Ohio has 2 reportable segments, Electric Utilities and Infrastructure and Gas Utilities and Infrastructure. The remainder of Duke Energy Ohio's operations is presented as Other.



	Three Months Ended September 30, 2020
	Electric		Gas		Total
	Utilities and		Utilities and		Reportable
(in millions)	Infrastructure		Infrastructure		Segments		Other			Eliminations			Total
Total revenues	$	394	$	79	$	473	$	—		$	—		$	473
Segment income/Net income	$	63	$	9	$	72	$	(2	)	$	—		$	70
Segment assets	$	6,448	$	3,297	$	9,745	$	27		$	(23	)	$	9,749



	Three Months Ended September 30, 2019
	Electric		Gas		Total
	Utilities and		Utilities and		Reportable
(in millions)	Infrastructure		Infrastructure		Segments		Other			Total
Total revenues	$	408	$	81	$	489	$	—		$	489
Segment income/Net income	$	62	$	13	$	75	$	(1	)	$	74



	Nine Months Ended September 30, 2020
	Electric		Gas		Total
	Utilities and		Utilities and		Reportable
(in millions)	Infrastructure		Infrastructure		Segments		Other			Total
Total revenues	$	1,070	$	324	$	1,394	$	—		$	1,394
Segment income/Net (loss) income	$	137	$	68	$	205	$	(4	)	$	201



	Nine Months Ended September 30, 2019
	Electric		Gas		Total
	Utilities and		Utilities and		Reportable
(in millions)	Infrastructure		Infrastructure		Segments		Other			Total
Total revenues	$	1,099	$	354	$	1,453	$	—		$	1,453
Segment income/Net (loss) income	$	129	$	65	$	194	$	(4	)	$	190

3. REGULATORY MATTERS

RATE-RELATED INFORMATION

Duke Energy Carolinas ~~Modernization Plan~~

~~On November 4, 2015,~~and Duke Energy Progress announced a Western Carolinas Modernization Plan, which included retirement of the existing Asheville coal-fired plant, the construction of two 280‑MW combined-cycle natural gas plants having dual-fuel capability, with the option to build a third natural gas simple cycle unit in 2023 based upon the outcome of initiatives to reduce the region's power demand. The plan also included upgrades to existing transmission lines and substations, installation of solar generation and a pilot battery storage project.

Duke Energy Progress retired the 376-MW Asheville coal-fired plant on January 29, 2020, at which time the net book value, including associated ash basin closure costs, of $214 million was transferred from Generation facilities to be retired, net to Regulatory assets within Current Assets and Other Noncurrent Assets on the Condensed Consolidated Balance Sheets.COVID-19 Filings

North Carolina

On March ~~28, 2016,~~10, 2020, Governor Roy Cooper declared a state of emergency due to the COVID-19 pandemic. On March 19, 2020, the NCUC issued an order ~~approving a Certificate~~directing that utilities under its jurisdiction suspend disconnections for nonpayment of ~~Public Convenience~~utility bills during the state of emergency and ~~Necessity (CPCN)~~allow for customers to enter into payment arrangements to pay off arrearages accumulated during the ~~new combined-cycle natural gas plants with an estimated cost~~state of ~~$893 million, but required~~emergency after the end of the state of emergency. Additionally, to help mitigate the financial impacts of the COVID-19 pandemic on their customers, on March 19, 2020, Duke Energy ~~Progress to refile for CPCN approval for the contingent simple cycle unit.~~

~~On December 27, 2019, Asheville Combined Cycle Power Block 1~~Carolinas and the common systems that serve both combined cycle units went into commercial operation. Power Block 1 consists of the Unit 5 Combustion Turbine and Unit 6 Steam Turbine Generator (which together form the first combined cycle unit approved in the CPCN Order). Power Block 2 consists of the Unit 7 Combustion Turbine and Unit 8 Steam Turbine Generator (which together form the second combined cycle unit approved in the CPCN Order). Duke Energy Progress placed the Unit 7 Combustion Turbine portion of Power Block 2 into commercial operation in simple-cycle mode on January 15, 2020. The Unit 8 Steam Turbine Generator went into commercial operation on April 5, 2020.

~~On October 8, 2018, Duke Energy Progress filed an application with the NCUC for a CPCN to construct~~ ~~the Hot Springs Microgrid Solar and Battery Storage Facility. On March 22, 2019, Duke Energy Progress and the Public Staff filed a Joint Proposed Order.~~ ~~On May 10, 2019, the NCUC issued an Order Granting Certificate of Public Convenience and Necessity with Conditions. On November 19, 2019,~~ Duke Energy Progress filed a ~~semiannual progress report~~request with the NCUC seeking authorization to waive: (1) any late payment charges incurred by a residential or nonresidential customer, effective March 21, 2020; (2) the application of fees for ~~its Hot Springs Microgrid Solar~~checks returned for insufficient funds for residential and ~~Battery Storage Facility. As required by an~~nonresidential customers; (3) the reconnection charge when a residential or nonresidential customer seeks to have service restored for those customers whose service was recently disconnected for nonpayment and to work with customers regarding the other requirements to restore service, including re-establishment of credit; and (4) the fees and charges associated with the use of credit cards or debit cards to pay residential electric utility bills, effective March 21, 2020. The NCUC ~~order issued December 6, 2019, an updated progress report was filed on January 15, 2020. An evidentiary hearing was held~~granted the companies’ request on March 5,20, 2020. ~~Construction is expected to begin in the second quarter of 2020 with commercial operation expected to begin in December 2020.~~



FINANCIAL STATEMENTS	REGULATORY MATTERS

~~COVID-19 Filings~~

~~On March~~utilities may reinstate fees for checks returned for insufficient funds as well as transaction fees for use of credit cards or debit cards for bills first rendered on or after September 1, 2020; and (4) no sooner than September 1, 2020, ~~Governor Ron DeSantis issued Executive Order No. 20-51 directing~~ the ~~State Health Officer~~collection of ~~Florida~~past-due or delinquent accounts accrued up to ~~declare~~and including August 31, 2020, may proceed subject to conditions. Duke Energy Carolinas and Duke Energy Progress resumed normal billing practices as of October 1, 2020, with the exception of the billing of late payment charges. Customers were notified of the resumption of normal billing practices, the option of deferred payment arrangements and where to find assistance, if necessary. Service disconnections for nonpayment for residential customers resumed on November 2, 2020.

Duke Energy Carolinas and Duke Energy Progress filed a ~~public health emergency in Florida related~~joint petition on August 7, 2020, with the NCUC for deferral treatment of incremental costs and waived customer fees due to the COVID-19 pandemic. The governor then issued a second Executive Order No. 20-52 on March 9, 2020, in which he declared a state of emergency in Florida and directed the Director of the Division of Emergency Management to implement the state’s Comprehensive Emergency Management Plan. The governor issued additional Executive Orders – Nos. 2020-68, 2020-69, 2020-71, 2020-72 and 2020-83 – in response to the ongoing health care emergency that, among other things, suspended the in-person public meeting requirements for state agencies and local governments and directed the state surgeon general to issue public health advisories to limit potential exposure to COVID-19, advising against gatherings of 10 or more persons. On ~~March 19, 2020, Duke Energy Florida filed a request to modify its tariff to allow it to waive late fees for customers, and on April 6,~~October 30, 2020, the ~~FPSC~~NCUC issued an order ~~approving~~extending deadlines to file comments on the ~~request.~~joint petition to November 5, 2020, and reply comments to November 30, 2020. Duke Energy Florida had already voluntarily waived reconnect fees and credit card fees, and is not disconnecting customers for nonpayment. On April 2, 2020, Duke Energy Florida filed a petition with the FPSC to accelerate a $78 million fuel cost refund to customers in the month of May 2020. Typically, the refund would be made over the course of 2021. The FPSC approved the petition on April 28, 2020.

~~Storm Restoration Cost Recovery~~

In October 2018, Duke Energy Florida’s service territory suffered damage when Hurricane Michael made landfall as a Category 5 hurricane with maximum sustained winds of 160 mph. The storm caused catastrophic damage from wind and storm surge, particularly from Panama City Beach to Mexico Beach, resulting in widespread outages and significant damage to transmission and distribution facilities across the central Florida Panhandle. In response to Hurricane Michael, Duke Energy Florida restored service to approximately 72,000 customers. Total estimated incremental operation and maintenance and capital costs are $311 million. Approximately $106 million and $107 million of the costs are included in Net property, plant and equipment on the Condensed Consolidated Balance Sheets as of March 31, 2020, and December 31, 2019, respectively. Approximately $205 million and $204 million of costs are included in Regulatory assets within Current Assets and Other Noncurrent Assets on the Condensed Consolidated Balance Sheets as of March 31, 2020, and December 31, 2019, respectively, representing recoverable costs under the FPSC’s storm ruleCarolinas and Duke Energy ~~Florida's OATT formula rates.~~

Duke Energy Florida filed a petition with the FPSC on April 30, 2019, to recover the retail portion of estimated incremental storm restoration costs for Hurricane Michael. On June 11, 2019, the FPSC approved the petition for recovery of estimated incremental storm restoration costs related to Hurricane Michael. The FPSC also approved the stipulation Duke Energy Florida filed, which will allow Duke Energy Florida to use the tax savings resulting from the Tax Act to recover these storm costs in lieu of implementing a storm surcharge. Approved storm costs are currently expected to be fully recovered by approximately year-end 2021. On November 22, 2019, Duke Energy Florida filed a petition for approval of actual retail recoverable storm restoration costs related to Hurricane Michael in the amount of $191 million plus interest. An Order Establishing Procedure was issued on January 30, 2020, and hearings are scheduled to begin September 15, 2020. Duke Energy FloridaProgress cannot predict the outcome of this matter.

~~Hurricane Dorian~~South Carolina

~~In September 2019,~~On March 13, 2020, Governor Henry McMaster declared a state of emergency due to the COVID-19 pandemic. The governor also issued a letter on March 14, 2020, to the ORS Executive Director regarding the suspension of disconnection of essential utility services for nonpayment. On March 18, 2020, the PSCSC issued an order approving such waivers, and also approved waivers for regulations related to late fees and reconnect fees. The PSCSC's order also required utilities to track the financial impacts of actions taken pursuant to such waivers for possible reporting to the PSCSC.

On May 13, 2020, the ORS filed a letter with the PSCSC that included a request from Governor McMaster that utilities proceed with developing and implementing plans for phasing in normal business operations. On May 14, 2020, the PSCSC conditionally vacated the regulation waivers regarding termination of service and suspension of disconnect fees. Prior to termination, utilities are to refer past-due customers to local organizations for assistance and/or deferred payment arrangements. Duke Energy ~~Florida’s service territory was threatened by Hurricane Dorian with landfall as a possible Category 5 hurricane. For several days, various forecasts~~Carolinas and ~~models predicted significant impact to~~ Duke Energy ~~Florida’s service territory; accordingly,~~Progress filed a report on June 30, 2020, as required by PSCSC order, reporting revenue impact, costs and savings related to COVID-19 to date. On August 14, 2020, Duke Energy ~~Florida incurred costs to secure necessary resources to be prepared for that potential impact. Although Hurricane Dorian never made landfall in Florida, its effects were still felt,~~Carolinas and ~~outages did occur. Preparations were required so that, if Hurricane Dorian had made landfall and impacts had been more severe,~~ Duke Energy ~~Florida would have been prepared to restore its customers’ power in~~Progress filed a ~~timely fashion.~~

~~On December 19, 2019, Duke Energy Florida filed a~~joint petition with the ~~FPSC~~PSCSC for approval of an accounting order to ~~recover $169 million,~~defer incremental COVID-19 related costs incurred through June 30, 2020, and for the ~~estimated retail portion~~ongoing months during the duration of ~~these costs, consistent with~~ the ~~provisions in~~COVID-19 pandemic. The deferral request did not include lost revenues. Updates on cost impacts were filed on September 30, 2020, and included financial impacts through the ~~2017 Settlement.~~end of August 2020. On ~~February 24,~~October 16, 2020, the ~~commission approved~~ORS requested the PSCSC delay taking formal action on the deferral request ~~for recovery over~~until the ORS and any intervenors complete discovery. The PSCSC issued an order on October 21, 2020, to grant additional time to complete discovery until January 20, 2021, and to establish a ~~12-month period with rates effective~~procedural schedule.

On August 17, 2020, Duke Energy Carolinas and Duke Energy Progress filed an update on their planned return to normal operations during the COVID-19 pandemic. Normal billing practices resumed in ~~March~~South Carolina as of October 1, 2020, and ~~subject~~service disconnections for nonpayment resumed on October 12, 2020. Customers were notified of the resumption of normal billing practices, the option of payment arrangements and where to ~~true up. The final actual amount will be filed later in 2020 and the FPSC will hold a hearing to determine the final amount of incremental costs.~~find assistance, if necessary. Duke Energy ~~Florida~~Carolinas and Duke Energy Progress cannot predict the outcome of this matter. Approximately $147 million and $167 million of these costs are included in Regulatory assets within Current Assets and Other Noncurrent Assets on the Condensed Consolidated Balance Sheets as of March 31,

2020 ~~and December 31, 2019, respectively, representing recoverable costs under the FPSC’s storm rule~~North Carolina Storm Securitization Filings

On October 26, 2020, Duke Energy Carolinas and Duke Energy ~~Florida's OATT formula rates.~~Progress filed a joint petition with the NCUC, as agreed to in partial settlements reached in the 2019 North Carolina Rate Cases for Duke Energy Carolinas and Duke Energy Progress, seeking authorization for the financing of each utilities’ storm recovery activities required as a result of Hurricane Florence, Hurricane Michael, Hurricane Dorian and Winter Storm Diego. Specifically, Duke Energy Carolinas and Duke Energy Progress requested that the NCUC find that their storm recovery costs and related financing costs are appropriately financed by debt secured by storm recovery property, and that the commission issue financing orders by which each utility may accomplish such financing using a securitization structure. The total revenue requirement over the proposed 15-year bond period for the storm recovery charges is approximately $262 million for Duke Energy Carolinas and $842 million for Duke Energy Progress. The NCUC has until March 10, 2021, to issue financing orders. Duke Energy Carolinas and Duke Energy Progress cannot predict the outcome of this matter.

~~Solar Base~~

Duke Energy Carolinas

2017 North Carolina Rate ~~Adjustment~~Case

On ~~July 31,~~August 25, 2017, Duke Energy Carolinas filed an application with the NCUC for a rate increase for retail customers of approximately $647 million. On February 28, 2018, Duke Energy ~~Florida petitioned the FPSC to include in base rates the revenue requirements for its first two solar generation projects, the Hamilton Project~~Carolinas and the ~~Columbia Project, as authorized by~~North Carolina Public Staff (Public Staff) filed an Agreement and Stipulation of Partial Settlement resolving certain portions of the ~~2017 Settlement. The Hamilton Project, which was placed into service~~proceeding. Terms of the settlement included a return on ~~December~~equity of 9.9% and a capital structure of 52% equity and 48% debt. On June 22, 2018, ~~had an annual retail revenue requirement of $15 million. At its October 30, 2018, Agenda Conference,~~ the FPSC approved the rate increase related to the Hamilton Project to go into effect beginning with the first billing cycle in January 2019 under its file and suspend authority, and revised customer rates became effective in January 2019. On April 2, 2019, the commission approved both solar projects as filed. The Columbia Project, which has a projected annual revenue requirement of $14 million, was placed in service in March 2020 and revised customer rates became effective in April 2020.

On March 25, 2019, Duke Energy Florida petitioned the FPSC to include in base rates the revenue requirements for its next wave of solar generation projects, the Trenton, Lake Placid and DeBary Solar Projects, as authorized by the 2017 Settlement. The annual retail revenue requirement for the Trenton and Lake Placid Projects was $13 million and $8 million, respectively, and they were placed into service in December 2019 with rates taking effect in January 2020. The DeBary Project has a projected annual revenue requirement of $11 million and a projected in-service date in the second quarter of 2020. The associated rate increase would take place with the first month’s billing cycle after each solar generation project goes into service. On July 22, 2019, the FPSCNCUC issued an order approving the Stipulation of Partial Settlement and requiring a revenue reduction.

The North Carolina Attorney General and other parties separately filed Notices of Appeal to the North Carolina Supreme Court. On August 8, 2018, the Public Staff filed a Notice of Cross Appeal to the North Carolina Supreme Court. On November 29, 2018, the North Carolina Attorney General's Office filed a motion with the North Carolina Supreme Court requesting the court consolidate the Duke Energy ~~Florida's request.~~Carolinas and Duke Energy Progress appeals and enter an order adopting the parties’ proposed briefing schedule as set out in the filing. On November 29, 2018, the North Carolina Supreme Court adopted a schedule for briefing set forth in the motion to consolidate the Duke Energy Carolinas and Duke Energy Progress appeals. Appellant briefs were filed on April 26, 2019. The Appellee response briefs were filed on September 25, 2019. Oral arguments before the North Carolina Supreme Court were held on March 11, 2020. Duke Energy Carolinas cannot predict the outcome of this matter.



FINANCIAL STATEMENTS	REGULATORY MATTERS

~~Crystal River Unit 3 Accelerated Decommissioning~~ 2019 North Carolina Rate Case

Removal of deferred storm costs from the rate case;

Filing a petition seeking to securitize the deferred storm costs within 120 days of a commission order in this rate case regarding the reasonableness and prudency of the storm costs;

Agreement of certain assumptions to demonstrate the quantifiable benefits to customers of a securitization financing; and

Agreement on certain accounting matters, including recovery of employee incentives, severance, aviation costs and executive compensation.

On May ~~29,~~6, 2020, Duke Energy Carolinas, Duke Energy Progress and the Public Staff filed a joint motion requesting that the NCUC issue an order scheduling one consolidated evidentiary hearing to consider the companies’ applications for net rate increases. On June 17, 2020, the NCUC issued an order adopting procedures for the expert witness hearings to take place in three phases: (1) a hearing on issues common to both rate cases conducted remotely; (2) a hearing on Duke Energy Carolinas specific rate case issues, followed immediately by; (3) a hearing on Duke Energy Progress specific rate case issues. On July 24, 2020, Duke Energy Carolinas filed its request for approval of its notice to customers required to implement temporary rates. On July 27, 2020, Duke Energy Carolinas filed a joint motion with Duke Energy Progress and the Public Staff notifying the commission that the parties reached a joint partial settlement with the Public Staff. Also on July 27, 2020, Duke Energy Carolinas filed a letter stating that it intended to update its temporary rates calculation to reflect the terms of the partial settlement.

On July 31, 2020, Duke Energy Carolinas and the Public Staff filed a Second Agreement and Stipulation of Partial Settlement (Second Partial Settlement), which is subject to review and approval of the NCUC, resolving certain remaining issues in the base rate proceeding. Major components of the Second Partial Settlement included:

A return on equity of 9.6% and a capital structure of 52% equity and 48% debt;

Agreement on amortization over a five-year period for unprotected federal EDIT flowbacks to customers;

Settlement to allow the deferral of costs for certain grid projects placed in service between June 1, 2020, and December 31, 2022, totaling $0.8 billion.

The Duke Energy Carolinas evidentiary hearing concluded on September 18, 2020, and post-hearing filings were filed with the NCUC from all parties by November 4, 2020. Duke Energy Carolinas expects the NCUC to issue an order on its net rate increase before the end of the first quarter of 2021. Duke Energy Carolinas cannot predict the outcome of this matter.

2018 South Carolina Rate Case

On November 8, 2018, Duke Energy Carolinas filed an application with the PSCSC for a rate increase for retail customers of approximately $168 million.



FINANCIAL STATEMENTS	REGULATORY MATTERS

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

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

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

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

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

As a result of the order, revised customer rates were effective June 1, 2019. On May 31, 2019, Duke Energy ~~Florida entered into~~Carolinas filed a ~~Decommissioning Services Agreement~~Petition for Rehearing or Reconsideration of that order contending substantial rights of Duke Energy Carolinas were prejudiced by unlawful, arbitrary and capricious rulings by the ~~accelerated decommissioning~~PSCSC on certain issues presented in the proceeding. On June 19, 2019, the PSCSC issued a Directive denying Duke Energy Carolinas' request to rehear or reconsider the commission's rulings on certain issues presented in the proceeding including coal ash remediation and disposal costs, return on equity and the recovery of a return on deferred operation and maintenance expenses. An order detailing the commission's decision in the Directive was issued on October 18, 2019. Duke Energy Carolinas filed a notice of appeal on November 15, 2019, with the Supreme Court of South Carolina. On November 20, 2019, the South Carolina Energy Users Committee filed a Notice of Appeal and the ORS filed a Notice of Cross Appeal with the Supreme Court of South Carolina. On February 12, 2020, Duke Energy Carolinas and the ORS filed a joint motion to extend briefing schedule deadlines, which was approved by the Supreme Court of South Carolina on February 20, 2020. On March 10, 2020, the ORS filed a consent motion requesting withdrawal of their appeal, which was granted by the Supreme Court of South Carolina on April 30, 2020. Initial briefs were filed on April 21, 2020, which included the South Carolina Energy User's Committee brief arguing that the PSCSC erred in allowing Duke Energy Carolinas' recovery of costs related to the Lee Nuclear Station. Response briefs were filed on July 6, 2020, and reply briefs were filed on August 11, 2020. Oral arguments have not yet been scheduled by the Supreme Court of South Carolina. Based on legal analysis and the filing of the Crystal River Unit 3 nuclear power station located in Citrus County, Florida, with ADP CR3, LLC and ADP SF1, LLC, each of which is a wholly owned subsidiary of Accelerated Decommissioning Partners, LLC, a joint venture between NorthStar Group Services, Inc. and Orano USA LLC. Closing of this agreement is contingent upon the approval of the U.S. Nuclear Regulatory Commission (NRC) and FPSC. If approved, the decommissioning will be accelerated starting in 2020 and continuing through 2027, rather than the expected time frame under SAFSTOR of starting in 2067 and ending in 2074.appeal, Duke Energy ~~Florida expects that the assets of the Nuclear Decommissioning Trust Fund will be sufficient to cover the contract price. On July 10, 2019,~~Carolinas has not recorded an adjustment for its deferred coal ash costs. Duke Energy Florida petitioned the FPSC for approval of the agreement. On April 1, 2020, the NRC issued an order approving the license transfer application. Following the NRC order, on April 15, 2020, the FPSC issued its Second Order Modifying Order Establishing Procedure in which hearings are scheduled to begin July 7, 2020. Duke Energy FloridaCarolinas cannot predict the outcome of this matter.

Duke Energy Progress

2017 North Carolina Rate Case

On June 1, 2017, Duke Energy Progress filed an application with the NCUC for a rate increase for retail customers of approximately $477 million, which was subsequently adjusted to $420 million. On November 22, 2017, Duke Energy Progress and the Public Staff filed an Agreement and Stipulation of Partial Settlement resolving certain portions of the proceeding. Terms of the settlement included a return on equity of 9.9% and a capital structure of 52% equity and 48% debt. On February 23, 2018, the NCUC issued an order approving the stipulation. The Public Staff, the North Carolina Attorney General and the Sierra Club filed notices of appeal to the North Carolina Supreme Court.

2019 North Carolina Rate Case



FINANCIAL STATEMENTS	REGULATORY MATTERS

Removal of deferred storm costs from the rate case;

Filing a petition seeking to securitize the deferred storm costs within 120 days of a commission order in this rate case regarding the reasonableness and prudency of the storm costs;

Agreement of certain assumptions to demonstrate the quantifiable benefits to customers of a securitization financing;

Agreement that the Asheville CC project is complete and in service and agreement on the amount to be included in rate base; and

Agreement on certain accounting matters, including recovery of employee incentives, severance, aviation costs and executive compensation.

On May 6, 2020, Duke Energy Progress, Duke Energy Carolinas and the Public Staff filed a joint motion requesting that the NCUC issue an order scheduling one consolidated evidentiary hearing to consider the companies’ applications for net rate increases. On June 17, 2020, the NCUC issued an order adopting procedures for the expert witness hearings to take place in three phases: (1) a hearing on issues common to both rate cases conducted remotely; (2) a hearing on Duke Energy Carolinas specific rate case issues, followed immediately by; (3) a hearing on Duke Energy Progress specific rate case issues. On July 27, 2020, Duke Energy Progress filed a joint motion with Duke Energy Carolinas and the Public Staff notifying the commission that the parties reached a joint partial settlement with the Public Staff.

On July 31, 2020, Duke Energy Progress and the Public Staff filed a Second Agreement and Stipulation of Partial Settlement (Second Partial Settlement), which is subject to review and approval of the NCUC, resolving certain remaining issues in the base rate proceeding. Major components of the Second Partial Settlement included:

A return on equity of 9.6% and a capital structure of 52% equity and 48% debt;

Agreement on amortization over a five-year period for unprotected federal EDIT flowbacks to customers;

Settlement to allow the deferral of costs for certain grid projects placed in service between June 1, 2020, and December 31, 2022, of $0.5 billion.

The Duke Energy Progress evidentiary hearing concluded on October 6, 2020, and post-hearing filings are due to be filed with the NCUC from all parties by December 4, 2020. Duke Energy Progress expects the NCUC to issue an order on its net rate increase by the end of the first quarter of 2021. Duke Energy Progress cannot predict the outcome of this matter.

Hurricane Dorian

Hurricane Dorian reached the Carolinas in September 2019 as a Category 2 hurricane making landfall within Duke Energy Progress’ service territory. Total estimated incremental operation and maintenance expenses incurred to repair and restore the system are approximately $168 million with an additional $4 million in capital investments made for restoration efforts. Approximately $145 million and $179 million of the operation and maintenance expenses are deferred in Regulatory assets within Other Noncurrent Assets on the Condensed Consolidated Balance Sheets as of September 30, 2020, and December 31, 2019, respectively. A request for an accounting order to defer incremental storm costs associated with Hurricane Dorian was included in Duke Energy Progress' October 30, 2019, general rate case filing with the NCUC. Terms of the June 2, 2020, Agreement and Stipulation of Partial Settlement removed incremental storm costs from the general rate case. A petition seeking to securitize these costs, along with costs from Hurricane Florence, Hurricane Michael and Winter Storm Diego, was filed on October 26, 2020, with the NCUC. The NCUC has until March 10, 2021, to issue financing orders. Duke Energy Progress cannot predict the outcome of this matter.



FINANCIAL STATEMENTS	REGULATORY MATTERS

2018 South Carolina Rate Case

On November 8, 2018, Duke Energy Progress filed an application with the PSCSC for a rate increase for retail customers of approximately $59 million.

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

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

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

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

As a result of the order, revised customer rates were effective June 1, 2019. On May 31, 2019, Duke Energy Progress filed a Petition for Rehearing or Reconsideration of that order contending substantial rights of Duke Energy Progress were prejudiced by unlawful, arbitrary and capricious rulings by the PSCSC on certain issues presented in the proceeding. On June 19, 2019, the PSCSC issued a Directive denying Duke Energy Progress' request to rehear or reconsider the commission's rulings on certain issues presented in the proceeding including coal ash remediation and disposal costs, return on equity and the recovery of a return on deferred operation and maintenance expenses, but allowing additional litigation-related costs. As a result of the Directive allowing litigation-related costs, customer rates were revised effective July 1, 2019. An order detailing the commission's decision in the Directive was issued on October 18, 2019. Duke Energy Progress filed a notice of appeal on November 15, 2019, with the Supreme Court of South Carolina. The ORS filed a Notice of Cross Appeal on November 20, 2019. On February 12, 2020, Duke Energy Progress and the ORS filed a joint motion to extend briefing schedule deadlines, which was approved by the Supreme Court of South Carolina on February 20, 2020. On March 10, 2020, the ORS filed a consent motion requesting withdrawal of their appeal, which was granted by the Supreme Court of South Carolina on April 30, 2020. Initial briefs were filed on April 21, 2020. Response briefs were filed on July 6, 2020, and reply briefs were filed on August 11, 2020. Oral arguments have not yet been scheduled by the Supreme Court of South Carolina. Based on legal analysis and the filing of the appeal, Duke Energy Progress has not recorded an adjustment for its deferred coal ash costs. Duke Energy Progress cannot predict the outcome of this matter.

Duke Energy Ohio

Duke Energy Ohio has 2 reportable segments, Electric Utilities and Infrastructure and Gas Utilities and Infrastructure. The remainder of Duke Energy Ohio's operations is presented as Other.



	Three Months Ended September 30, 2020
	Electric		Gas		Total
	Utilities and		Utilities and		Reportable
(in millions)	Infrastructure		Infrastructure		Segments		Other			Eliminations			Total
Total revenues	$	394	$	79	$	473	$	—		$	—		$	473
Segment income/Net income	$	63	$	9	$	72	$	(2	)	$	—		$	70
Segment assets	$	6,448	$	3,297	$	9,745	$	27		$	(23	)	$	9,749



	Three Months Ended September 30, 2019
	Electric		Gas		Total
	Utilities and		Utilities and		Reportable
(in millions)	Infrastructure		Infrastructure		Segments		Other			Total
Total revenues	$	408	$	81	$	489	$	—		$	489
Segment income/Net income	$	62	$	13	$	75	$	(1	)	$	74



	Nine Months Ended September 30, 2020
	Electric		Gas		Total
	Utilities and		Utilities and		Reportable
(in millions)	Infrastructure		Infrastructure		Segments		Other			Total
Total revenues	$	1,070	$	324	$	1,394	$	—		$	1,394
Segment income/Net (loss) income	$	137	$	68	$	205	$	(4	)	$	201



	Nine Months Ended September 30, 2019
	Electric		Gas		Total
	Utilities and		Utilities and		Reportable
(in millions)	Infrastructure		Infrastructure		Segments		Other			Total
Total revenues	$	1,099	$	354	$	1,453	$	—		$	1,453
Segment income/Net (loss) income	$	129	$	65	$	194	$	(4	)	$	190

3. REGULATORY MATTERS

RATE-RELATED INFORMATION

Duke Energy Carolinas and Duke Energy Progress

COVID-19 Filings

North Carolina

On March 10, 2020, Governor Roy Cooper declared a state of emergency due to the COVID-19 pandemic. On March 19, 2020, the NCUC issued an order directing that utilities under its jurisdiction suspend disconnections for nonpayment of utility bills during the state of emergency and allow for customers to enter into payment arrangements to pay off arrearages accumulated during the state of emergency after the end of the state of emergency. Additionally, to help mitigate the financial impacts of the COVID-19 pandemic on their customers, on March 19, 2020, Duke Energy Carolinas and Duke Energy Progress filed a request with the NCUC seeking authorization to waive: (1) any late payment charges incurred by a residential or nonresidential customer, effective March 21, 2020; (2) the application of fees for checks returned for insufficient funds for residential and nonresidential customers; (3) the reconnection charge when a residential or nonresidential customer seeks to have service restored for those customers whose service was recently disconnected for nonpayment and to work with customers regarding the other requirements to restore service, including re-establishment of credit; and (4) the fees and charges associated with the use of credit cards or debit cards to pay residential electric utility bills, effective March 21, 2020. The NCUC granted the companies’ request on March 20, 2020.



FINANCIAL STATEMENTS	REGULATORY MATTERS

On July 29, 2020, the NCUC issued its Order Lifting Disconnection Moratorium and Allowing Collection of Arrearages Pursuant to Special Repayment Plans. The order contained the following: (1) public utilities may resume customer disconnections due to nonpayment for bills first rendered on or after September 1, 2020, after appropriate notice; (2) the late fee moratorium will continue through the end of the state of emergency or until further order of the commission; (3) Duke Energy utilities may reinstate fees for checks returned for insufficient funds as well as transaction fees for use of credit cards or debit cards for bills first rendered on or after September 1, 2020; and (4) no sooner than September 1, 2020, the collection of past-due or delinquent accounts accrued up to and including August 31, 2020, may proceed subject to conditions. Duke Energy Carolinas and Duke Energy Progress resumed normal billing practices as of October 1, 2020, with the exception of the billing of late payment charges. Customers were notified of the resumption of normal billing practices, the option of deferred payment arrangements and where to find assistance, if necessary. Service disconnections for nonpayment for residential customers resumed on November 2, 2020.

Duke Energy Carolinas and Duke Energy Progress filed a joint petition on August 7, 2020, with the NCUC for deferral treatment of incremental costs and waived customer fees due to the COVID-19 pandemic. On October 30, 2020, the NCUC issued an order extending deadlines to file comments on the joint petition to November 5, 2020, and reply comments to November 30, 2020. Duke Energy Carolinas and Duke Energy Progress cannot predict the outcome of this matter.

South Carolina

On March 13, 2020, Governor Henry McMaster declared a state of emergency due to the COVID-19 pandemic. The governor also issued a letter on March 14, 2020, to the ORS Executive Director regarding the suspension of disconnection of essential utility services for nonpayment. On March 18, 2020, the PSCSC issued an order approving such waivers, and also approved waivers for regulations related to late fees and reconnect fees. The PSCSC's order also required utilities to track the financial impacts of actions taken pursuant to such waivers for possible reporting to the PSCSC.

On May 13, 2020, the ORS filed a letter with the PSCSC that included a request from Governor McMaster that utilities proceed with developing and implementing plans for phasing in normal business operations. On May 14, 2020, the PSCSC conditionally vacated the regulation waivers regarding termination of service and suspension of disconnect fees. Prior to termination, utilities are to refer past-due customers to local organizations for assistance and/or deferred payment arrangements. Duke Energy Carolinas and Duke Energy Progress filed a report on June 30, 2020, as required by PSCSC order, reporting revenue impact, costs and savings related to COVID-19 to date. On August 14, 2020, Duke Energy Carolinas and Duke Energy Progress filed a joint petition with the PSCSC for approval of an accounting order to defer incremental COVID-19 related costs incurred through June 30, 2020, and for the ongoing months during the duration of the COVID-19 pandemic. The deferral request did not include lost revenues. Updates on cost impacts were filed on September 30, 2020, and included financial impacts through the end of August 2020. On October 16, 2020, the ORS requested the PSCSC delay taking formal action on the deferral request until the ORS and any intervenors complete discovery. The PSCSC issued an order on October 21, 2020, to grant additional time to complete discovery until January 20, 2021, and to establish a procedural schedule.

2020 North Carolina Storm Securitization Filings

On October 26, 2020, Duke Energy Carolinas and Duke Energy Progress filed a joint petition with the NCUC, as agreed to in partial settlements reached in the 2019 North Carolina Rate Cases for Duke Energy Carolinas and Duke Energy Progress, seeking authorization for the financing of each utilities’ storm recovery activities required as a result of Hurricane Florence, Hurricane Michael, Hurricane Dorian and Winter Storm Diego. Specifically, Duke Energy Carolinas and Duke Energy Progress requested that the NCUC find that their storm recovery costs and related financing costs are appropriately financed by debt secured by storm recovery property, and that the commission issue financing orders by which each utility may accomplish such financing using a securitization structure. The total revenue requirement over the proposed 15-year bond period for the storm recovery charges is approximately $262 million for Duke Energy Carolinas and $842 million for Duke Energy Progress. The NCUC has until March 10, 2021, to issue financing orders. Duke Energy Carolinas and Duke Energy Progress cannot predict the outcome of this matter.

Duke Energy Carolinas

2017 North Carolina Rate Case

On August 25, 2017, Duke Energy Carolinas filed an application with the NCUC for a rate increase for retail customers of approximately $647 million. On February 28, 2018, Duke Energy Carolinas and the North Carolina Public Staff (Public Staff) filed an Agreement and Stipulation of Partial Settlement resolving certain portions of the proceeding. Terms of the settlement included a return on equity of 9.9% and a capital structure of 52% equity and 48% debt. On June 22, 2018, the NCUC issued an order approving the Stipulation of Partial Settlement and requiring a revenue reduction.

The North Carolina Attorney General and other parties separately filed Notices of Appeal to the North Carolina Supreme Court. On August 8, 2018, the Public Staff filed a Notice of Cross Appeal to the North Carolina Supreme Court. On November 29, 2018, the North Carolina Attorney General's Office filed a motion with the North Carolina Supreme Court requesting the court consolidate the Duke Energy Carolinas and Duke Energy Progress appeals and enter an order adopting the parties’ proposed briefing schedule as set out in the filing. On November 29, 2018, the North Carolina Supreme Court adopted a schedule for briefing set forth in the motion to consolidate the Duke Energy Carolinas and Duke Energy Progress appeals. Appellant briefs were filed on April 26, 2019. The Appellee response briefs were filed on September 25, 2019. Oral arguments before the North Carolina Supreme Court were held on March 11, 2020. Duke Energy Carolinas cannot predict the outcome of this matter.



FINANCIAL STATEMENTS	REGULATORY MATTERS

2019 North Carolina Rate Case

Removal of deferred storm costs from the rate case;

Filing a petition seeking to securitize the deferred storm costs within 120 days of a commission order in this rate case regarding the reasonableness and prudency of the storm costs;

Agreement of certain assumptions to demonstrate the quantifiable benefits to customers of a securitization financing; and

Agreement on certain accounting matters, including recovery of employee incentives, severance, aviation costs and executive compensation.

On May 6, 2020, Duke Energy Carolinas, Duke Energy Progress and the Public Staff filed a joint motion requesting that the NCUC issue an order scheduling one consolidated evidentiary hearing to consider the companies’ applications for net rate increases. On June 17, 2020, the NCUC issued an order adopting procedures for the expert witness hearings to take place in three phases: (1) a hearing on issues common to both rate cases conducted remotely; (2) a hearing on Duke Energy Carolinas specific rate case issues, followed immediately by; (3) a hearing on Duke Energy Progress specific rate case issues. On July 24, 2020, Duke Energy Carolinas filed its request for approval of its notice to customers required to implement temporary rates. On July 27, 2020, Duke Energy Carolinas filed a joint motion with Duke Energy Progress and the Public Staff notifying the commission that the parties reached a joint partial settlement with the Public Staff. Also on July 27, 2020, Duke Energy Carolinas filed a letter stating that it intended to update its temporary rates calculation to reflect the terms of the partial settlement.

On July 31, 2020, Duke Energy Carolinas and the Public Staff filed a Second Agreement and Stipulation of Partial Settlement (Second Partial Settlement), which is subject to review and approval of the NCUC, resolving certain remaining issues in the base rate proceeding. Major components of the Second Partial Settlement included:

A return on equity of 9.6% and a capital structure of 52% equity and 48% debt;

Agreement on amortization over a five-year period for unprotected federal EDIT flowbacks to customers;

Settlement to allow the deferral of costs for certain grid projects placed in service between June 1, 2020, and December 31, 2022, totaling $0.8 billion.

The Duke Energy Carolinas evidentiary hearing concluded on September 18, 2020, and post-hearing filings were filed with the NCUC from all parties by November 4, 2020. Duke Energy Carolinas expects the NCUC to issue an order on its net rate increase before the end of the first quarter of 2021. Duke Energy Carolinas cannot predict the outcome of this matter.

2018 South Carolina Rate Case

On November 8, 2018, Duke Energy Carolinas filed an application with the PSCSC for a rate increase for retail customers of approximately $168 million.



FINANCIAL STATEMENTS	REGULATORY MATTERS

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

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

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

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

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

As a result of the order, revised customer rates were effective June 1, 2019. On May 31, 2019, Duke Energy Carolinas filed a Petition for Rehearing or Reconsideration of that order contending substantial rights of Duke Energy Carolinas were prejudiced by unlawful, arbitrary and capricious rulings by the PSCSC on certain issues presented in the proceeding. On June 19, 2019, the PSCSC issued a Directive denying Duke Energy Carolinas' request to rehear or reconsider the commission's rulings on certain issues presented in the proceeding including coal ash remediation and disposal costs, return on equity and the recovery of a return on deferred operation and maintenance expenses. An order detailing the commission's decision in the Directive was issued on October 18, 2019. Duke Energy Carolinas filed a notice of appeal on November 15, 2019, with the Supreme Court of South Carolina. On November 20, 2019, the South Carolina Energy Users Committee filed a Notice of Appeal and the ORS filed a Notice of Cross Appeal with the Supreme Court of South Carolina. On February 12, 2020, Duke Energy Carolinas and the ORS filed a joint motion to extend briefing schedule deadlines, which was approved by the Supreme Court of South Carolina on February 20, 2020. On March 10, 2020, the ORS filed a consent motion requesting withdrawal of their appeal, which was granted by the Supreme Court of South Carolina on April 30, 2020. Initial briefs were filed on April 21, 2020, which included the South Carolina Energy User's Committee brief arguing that the PSCSC erred in allowing Duke Energy Carolinas' recovery of costs related to the Lee Nuclear Station. Response briefs were filed on July 6, 2020, and reply briefs were filed on August 11, 2020. Oral arguments have not yet been scheduled by the Supreme Court of South Carolina. Based on legal analysis and the filing of the appeal, Duke Energy Carolinas has not recorded an adjustment for its deferred coal ash costs. Duke Energy Carolinas cannot predict the outcome of this matter.

Duke Energy Progress

2017 North Carolina Rate Case

2019 North Carolina Rate Case



FINANCIAL STATEMENTS	REGULATORY MATTERS