DUKE ENERGY FLORIDA, LLC

Previous wording

Management’s Discussion and Analysis should be read in conjunction with the Condensed Consolidated Financial Statements and Notes for the three months ended March 31, 2026, and with Duke Energy’s Annual Report on Form 10-K for the year ended December 31, 2025.

Current wording

Management’s Discussion and Analysis should be read in conjunction with the Condensed Consolidated Financial Statements and Notes for the six months ended June 30, 2026, and with Duke Energy’s Annual Report on Form 10-K for the year ended December 31, 2025.

Previous wording

Executing on Strategic Transactions. Our service territories continue to experience accelerating investment opportunities driven by a deepening economic development pipeline and significant customer growth. In March, we closed on two previously announced strategic transactions to efficiently fund this growth and the related capital that will be required in the coming years. On March 3, 2026, we completed the first closing of a minority investment in Florida Progress, the holding company of Duke Energy Florida, by an affiliate of Brookfield Super-Core Infrastructure Partners. The initial investment resulted in the transfer of a 9.19% ownership interest for approximately $2.8 billion in cash proceeds, with additional staged investments anticipated through 2028. On March 31, 2026, following approval by the TPUC, we closed on the sale of Piedmont's Tennessee business with Spire, Inc., and received approximately $2.5 billion in cash proceeds. Closing on both transactions, along with our unwavering focus on operational excellence and value creation, demonstrates our continued ability to meet the unprecedented long-term growth anticipated across our service territories. See Note 2 to the Condensed Consolidated Financial Statements, "Dispositions," for further information.

Current wording

On March 3, 2026, we completed the first closing of a minority investment in Florida Progress, the holding company of Duke Energy Florida, by an affiliate of Brookfield Super-Core Infrastructure Partners. The initial investment resulted in the transfer of a 9.19% ownership interest for approximately $2.8 billion in cash proceeds, with additional staged investments anticipated through 2028. On March 31, 2026, following approval by the TPUC, we closed on the sale of Piedmont's Tennessee business to Spire, Inc. and received approximately $2.5 billion in cash proceeds.

Previous wording

•During the first quarter, revised base rates went into effect for several of our jurisdictions including both Duke Energy Carolinas' and Duke Energy Progress' South Carolina service territories, as well as Duke Energy Kentucky's natural gas business. In March, Duke Energy Progress filed its first request under South Carolina’s electric Rate Stabilization Adjustment framework to facilitate timely cost recovery of the important grid investments we continue to make and to improve reliability across the service territory. Additionally, Duke Energy Ohio's electric business and Piedmont's South Carolina natural gas business filed new base rate applications in March and April, respectively. Our regulatory efforts will continue to focus on securing the critical investments necessary to provide customer value, delivering reliable natural gas and electric service and ensuring timely cost recovery across all of our jurisdictions.

Current wording

•Revised base rates became effective during the first quarter of 2026 for Duke Energy Carolinas' and Duke Energy Progress' South Carolina service territories and Duke Energy Kentucky's natural gas business. During 2026, Duke Energy Ohio's electric and natural gas businesses and Piedmont's South Carolina natural gas business filed new base rate applications. In July, we reached settlements in Duke Energy Carolinas' 2025 North Carolina Rate Case and proceedings related to Winter Storm Fern. Our regulatory efforts remain focused on securing the recovery of investments necessary to maintain and strengthen our electric and natural gas systems while continuing to provide reliable service to customers.

Previous wording

•Our nuclear sites continue to serve customers by safely producing clean, reliable and low-cost electricity, as well as providing economic benefits for our local communities, such as thousands of well-paying jobs and significant tax benefits. In February, we announced that our nuclear fleet achieved a new all-time reliability record for systemwide capacity factor. In April, the NRC issued a subsequent license renewal for Robinson, which provides for a 20-year extension of nuclear operations at the plant through 2050. Also in April, we executed a multi-year agreement to sell up to $3.1 billion of net tax credits with expected proceeds through 2029, including nuclear PTCs, in continued support of providing low-cost electricity to our customers.

Current wording

•Our nuclear fleet continues to provide a significant source of reliable, carbon-free and cost-competitive generation. In February 2026, we announced that our nuclear fleet achieved a record systemwide capacity factor in 2025. In April 2026, the NRC issued a subsequent license renewal for Robinson, extending operations through 2050. Also during April, we executed a multi-year agreement to sell up to $3.1 billion of net tax credits through 2029, including nuclear PTCs, in continued support of providing low-cost electricity to our customers.

Previous wording

•The FERC issued an order authorizing the proposal to combine our two electric utilities that operate in the Carolinas as consistent with the public interest. The companies also reached comprehensive settlements with intervenors in North Carolina and South Carolina resolving all issues related to the proposed combination, and received approvals from both the NCUC and the PSCSC. The targeted effective date of the combination is January 1, 2027.

Current wording

•The FERC issued an order authorizing the proposed combination of our two electric utilities operating in the Carolinas, finding the transaction consistent with the public interest. The companies also reached comprehensive settlements with intervenors in North Carolina and South Carolina and received approvals from both the NCUC and the PSCSC. The targeted effective date of the combination remains January 1, 2027.

Previous wording

Economic Development. Load growth across our service territories continues to be driven by a combination of population growth, economic development and increasing electrification, including growing demand from data centers. Data center‑related demand continues to contribute to this accelerated load growth as we expand our portfolio of data center electric service agreements, increasing contracted capacity while maintaining a disciplined approach focused on aligning incremental infrastructure investments with the customers driving the growth. These arrangements are designed to support system reliability and continued investment while helping manage cost impacts for other customers. These trends continue to support Duke Energy’s long‑term regulated capital plan while balancing reliability, customer value and growth.

Current wording

These trends continue to support Duke Energy’s long‑term regulated capital plan while supporting reliable service and customer affordability.

Previous wording

See Notes 4 and 16 to the Condensed Consolidated Financial Statements, "Regulatory Matters" and "Income Taxes," along with "Other Matters," for additional information.

Current wording

See Notes 4 and 16 to the Condensed Consolidated Financial Statements, "Regulatory Matters" and "Income Taxes," respectively, along with "Other Matters," for additional information.

Previous wording

In April 2024, the EPA issued the 2024 CCR Rule, which significantly expands the scope of the 2015 CCR Rule by establishing regulatory requirements for inactive surface impoundments at retired generating facilities and previously unregulated coal ash sources at regulated facilities. Duke Energy is participating in legal challenges to the 2024 CCR Rule. Additionally, in April 2026, the EPA proposed to rescind or modify certain aspects of the 2015 CCR Rule, as amended by the 2024 CCR Rule. Duke Energy is reviewing the proposed rule and analyzing the potential impacts it could have on the Company, which could be material.

Current wording

In April 2024, the EPA issued the 2024 CCR Rule, which significantly expands the scope of the 2015 CCR Rule by establishing regulatory requirements for inactive surface impoundments at retired generating facilities and previously unregulated coal ash sources at regulated facilities. Duke Energy is participating in legal challenges to the 2024 CCR Rule. In April 2026, the EPA proposed to rescind or modify certain aspects of the 2015 CCR Rule, as amended by the 2024 CCR Rule. Duke Energy is evaluating the proposed rule and its potential impact on the Company, which could be material.

Previous wording

In April 2024, the EPA issued final rules under section 111 of the Clean Air Act (EPA Rule 111) regulating GHG emissions from existing coal-fired and new natural gas-fired power plants. Compliance with EPA Rule 111 as issued would have a material impact on the timing, nature and magnitude of future generation investments in our service territories. Cost recovery for future expenditures will be pursued through the normal ratemaking process with federal and state utility commissions, which permit recovery of reasonable and prudently incurred costs associated with Duke Energy’s regulated operations. Duke Energy is participating in legal challenges to the final rules. In June 2025, the EPA published a proposed rule to repeal EPA Rule 111 as well as an alternative proposal to repeal a narrower set of requirements. For more information, see "Other Matters."

Current wording

In April 2024, the EPA issued final rules under section 111 of the Clean Air Act (EPA Rule 111) regulating GHG emissions from existing coal-fired and new natural gas-fired power plants. Compliance with EPA Rule 111, if implemented as issued, would have a material impact on the timing, nature and magnitude of future generation investments in our service territories. Cost recovery for future expenditures will be pursued through the normal ratemaking process with federal and state utility commissions, which permit recovery of reasonable and prudently incurred costs associated with Duke Energy’s regulated operations. Duke Energy is participating in legal challenges to the final rules. In June 2025, the EPA published a proposed rule to repeal EPA Rule 111 as well as an alternative proposal to repeal a narrower set of requirements. Duke Energy is evaluating these proposals and their potential impacts on the Company. For more information, see "Other Matters."

Previous wording

The Company continues to monitor the ongoing stability of markets for key materials and supplies, including potential impacts on prices or availability of goods resulting from global conflicts and war or restrictions on the trade of certain rare earth materials and technologies used in electric utility infrastructure. While recent judicial rulings invalidated the authority of the U.S. executive branch to impose certain tariffs, certain ongoing public policy outcomes, including impacts from new or revised tariffs or other actions from federal executive orders, federal legislation or other rulemakings, could disrupt or impact Duke Energy's supply chain, future financial results, capital plan or execution on the Company's energy modernization strategy.

Current wording

The Company continues to monitor the ongoing stability of markets for key materials and supplies, including potential impacts on the prices or availability of goods resulting from global conflicts, geopolitical developments, restrictions on trade involving certain rare earth materials and technologies used in electric utility infrastructure or evolving trade and tariff policies. Public policy developments, including new or revised tariffs or other actions from federal executive orders, federal legislation or other rulemakings, could disrupt or impact Duke Energy's supply chain, future financial results, capital plan or execution on the Company's energy modernization strategy.

Previous wording

The Duke Energy Registrants performed their annual goodwill impairment tests as of August 31, 2025. As of that date, all of the Duke Energy Registrants' reporting units' estimated fair values materially exceeded the carrying values except for the GU&I reporting unit of Duke Energy Ohio. No goodwill impairment charges were recorded in the accompanying Condensed Consolidated Statements of Operations. However, deteriorating economic conditions that adversely affect GU&I's future cash flows or peer company equity valuations could reduce the estimated fair value of GU&I below its carrying amount, potentially resulting in goodwill impairment charges in future periods.

Current wording

The Duke Energy Registrants performed their annual goodwill impairment tests as of August 31, 2025. As of that date, the estimated fair values of all reporting units materially exceeded the carrying values except for the GU&I reporting unit of Duke Energy Ohio. No goodwill impairment charges were recorded in the accompanying Condensed Consolidated Statements of Operations. However, adverse changes in economic conditions, projected future cash flows or peer company equity valuations could reduce the estimated fair value of the GU&I reporting unit below its carrying amount and result in goodwill impairment charges in future periods.

Previous wording

•Legal and Regulatory Settlements represent the impact of charges related to legal settlements as well as regulatory matters related to the establishment of a regulatory liability associated with an energy efficiency program at Duke Energy Carolinas and Duke Energy Progress.

Current wording

•Legal and Regulatory Settlements represent the impact of charges related to legal settlements as well as regulatory settlements related to the Duke Energy Carolinas' North Carolina rate case and establishment of a regulatory liability associated with an energy efficiency program at Duke Energy Carolinas and Duke Energy Progress.

Previous wording

As discussed above, management also evaluates financial performance based on adjusted EPS. Duke Energy’s adjusted EPS was $1.93 for the three months ended March 31, 2026, compared to $1.76 for the three months ended March 31, 2025. The increase in adjusted EPS was primarily due to the recovery of infrastructure investments to reliably serve customers in our growing jurisdictions, along with improved weather, partially offset by higher operation and maintenance expense, including storm costs, as well as higher depreciation on a growing asset base.

Current wording

As discussed above, management also evaluates financial performance based on adjusted EPS. Duke Energy’s adjusted EPS was $1.43 for the three months ended June 30, 2026, compared to $1.25 for the three months ended June 30, 2025. The increase in adjusted EPS was primarily due to the recovery of infrastructure investments to reliably serve customers in our growing jurisdictions, partially offset by higher depreciation on a growing asset base and interest expense.

Previous wording

GAAP reported EPS was $1.97 for the three months ended March 31, 2026, compared to $1.76 for the three months ended March 31, 2025. In addition to the drivers below, GAAP reported EPS increased primarily due to the gain on sale of Piedmont's Tennessee business, partially offset by charges related to legal and regulatory settlements.

Current wording

GAAP Reported EPS was $3.35 for the six months ended June 30, 2026, compared to $3.00 for the six months ended June 30, 2025. In addition to the drivers below, GAAP reported EPS increased primarily due to the gain on sale of Piedmont's Tennessee business, offset by charges related to legal and regulatory settlements.

Previous wording

(a)Net of $47 million tax benefit. $172 million recorded within Operations, maintenance and other and $25 million recorded within Operating Revenues.

Current wording

(a)Net of $59 million tax benefit. $172 million recorded within Operations, maintenance and other, $51 million recorded within Impairments of assets and other charges and $25 million recorded within Operating Revenues.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

EU&I’s results were primarily driven by higher revenues from rate cases across multiple jurisdictions andhigher weather-normal retail sales volumes and lower operation and maintenance expenses, partially offset by higher depreciation expense, impairments and interest expense. The following is a detailed discussion of the variance drivers by line item.

Previous wording

•a $286 million increase in fuel revenues primarily due to net higher fuel rates in the current year;

Current wording

•a $145 million increase in fuel revenues primarily due to net higher fuel rates and volumes in the current year;

Previous wording

•a $20 million increase in rider revenues primarily due to higher rates for the SPP at Duke Energy Florida;

Current wording

•a $20 million decrease in retail sales due to less favorable weather in the current year.

Previous wording

•a $15 million increase in property and other taxes due to a higher base on which property taxes are levied at Duke Energy Florida.

Current wording

•a $28 million decrease in property and other taxes due to franchise tax refunds, partially offset by a higher base on which property taxes are levied across jurisdictions.

Previous wording

•a $67 million increase in fuel used in electric generation and purchased power primarily due to higher fuel costs driven by higher natural gas and coal prices and higher purchased power costs, partially offset by lower fuel cost recovery;

Current wording

•a $35 million increase in fuel used in electric generation and purchased power primarily due to higher purchased power costs, partially offset bylower fuel cost recovery and the prior year retirement of renewable energy credits at Duke Energy Progress.

Previous wording

Income Tax Expense. The decrease in tax expense was primarily due to an increase in the amortization of nuclear PTCs.

Current wording

Income Tax Expense. The increase in tax expense was primarily due to an increase in pretax income. The ETRs for the three months ended June 30, 2026, and 2025, were 14.7% and 14.1%, respectively.

Previous wording

EU&I’s results were primarily driven by higher revenues from rate cases across multiple jurisdictions, improved weather and higher weather-normal retail sales volumes, partially offset by higher operation and maintenance and depreciation expenses. The following is a detailed discussion of the variance drivers by line item.

Current wording

EU&I’s results were primarily driven by higher revenues from rate cases across multiple jurisdictions and higher weather-normal retail sales volumes, partially offset by higher depreciation and operation and maintenance expenses. The following is a detailed discussion of the variance drivers by line item.

Previous wording

•a $321 million increase in fuel used in electric generation and purchased power primarily due tohigher natural gas prices and higher purchased power costs, partially offset bylower fuel cost recovery;

Current wording

•a $356 million increase in fuel used in electric generation and purchased power primarily due tohigher natural gas prices and higher purchased power costs, partially offset bylower fuel cost recovery and the prior year retirement of renewable energy credits at Duke Energy Carolinas and Duke Energy Progress;

Previous wording

•a $164 million increase in depreciation and amortization primarily due to higher depreciable base across all jurisdictions and higher depreciation rates driven by rate cases; and

Current wording

•a $276 million increase in depreciation and amortization primarily due to higher depreciable base across jurisdictions, higher depreciation rates driven by rate cases and the prior year retirement of renewable energy credits at Duke Energy Carolinas and Duke Energy Progress;

Previous wording

Income Tax Expense. The decrease in tax expense was primarily due to an increase in the amortization of nuclear PTCs and a decrease in pretax income, partially offset by a decrease in the amortization of EDIT. The ETRs for the three months ended March 31, 2026, and 2025, were 9.0% and 12.7%, respectively. The decrease in the ETR was primarily due to an increase in the amortization of nuclear PTCs, partially offset by a decrease in the amortization of EDIT.

Current wording

Income Tax Expense. The decrease in tax expense was primarily due to an increase in the amortization of nuclear PTCs, partially offset by a decrease in the amortization of EDIT. The ETRs for the six months ended June 30, 2026, and 2025, were 12.0% and 13.4%, respectively. The decrease in the ETR was primarily due to an increase in the amortization of nuclear PTCs, partially offset by a decrease in the amortization of EDIT.

Previous wording

•a $13 million increase in retail sales due to improved weather compared to the prior year.

Current wording

•a $13 million decrease in property and other taxes primarily due to lower franchise taxes.

Previous wording

GU&I’s results were primarily driven by the gain on sale of Piedmont's Tennessee business and customer growth in the Carolinas. The following is a detailed discussion of the variance drivers by line item.

Current wording

GU&I’s results were primarily driven by the gain on sale of Piedmont's Tennessee business and growth in capital riders. The following is a detailed discussion of the variance drivers by line item.

Previous wording

•a $17 million increase due to customer growth in North Carolina and South Carolina and the North Carolina Integrity Management Rider (IMR); and

Current wording

•a $24 million increase due to customer growth in North Carolina and South Carolina and the North Carolina Integrity Management Rider (IMR);

Previous wording

•a $12 million increase primarily due to higher pricing from the 2025 Duke Energy Kentucky natural gas rate case.

Current wording

•an $11 million increase primarily due to higher pricing from the 2025 Duke Energy Kentucky natural gas rate case.

Previous wording

•a $151 million increase in the cost of natural gas primarily due to higher commodity prices;

Current wording

•a $123 million increase in the cost of natural gas primarily due to higher commodity prices.

Previous wording

Gains on Sales of Other Assets and Other, net. The increase was primarily due to the sale of Piedmont's Tennessee business, net of allocated goodwill.

Current wording

Gains (Losses) on Sales of Other Assets and Other, net. The increase was primarily due to the sale of Piedmont's Tennessee business, net of allocated goodwill.

Previous wording

Income Tax Expense. The increase in tax expense was primarily due to an increase in pretax income and non-deductible goodwill associated with the sale of Piedmont's Tennessee business. The ETRs for the three months ended March 31, 2026, and 2025, were 35.6% and 20.7%, respectively. The increase in the ETR was primarily due to non-deductible goodwill associated with the sale of Piedmont's Tennessee business.

Current wording

Income Tax Expense (Benefit). The increase in tax expense was primarily due to an increase in pretax income and non-deductible goodwill associated with the sale of Piedmont's Tennessee business. The ETRs for the six months ended June 30, 2026, and 2025, were 35.4% and 19.7%, respectively. The increase in the ETR was primarily due to non-deductible goodwill associated with the sale of Piedmont's Tennessee business.

Previous wording

Other's results were primarily driven by higher interest expense and lower equity earnings from the NMC investment, partially offset by lower contributions to the Duke Energy Foundation and lower loss experience related to captive insurance claims.

Current wording

Other's results were primarily driven by higher investment returns resulting from favorable market performance and lower Duke Energy Foundation contributions than the prior year, partially offset by higher interest expense.

Previous wording

Operating Expenses. The decrease was primarily due to lower contributions to the Duke Energy Foundation and lower loss experience related to captive insurance claims.

Current wording

Operating Expenses. The decrease was primarily due to lower Duke Energy Foundation contributions than the prior year.

Previous wording

The increase was primarily due to the resolution of an outstanding liability related to the Commercial Renewables Disposal Groups.

Current wording

The variance was primarily due to the resolution of an outstanding liability related to the Commercial Renewables Disposal Groups.

Previous wording

•an $11 million increase rider revenue primarily due to North Carolina storm securitization.

Current wording

•a $37 million increase in rider revenue primarily due to North Carolina storm securitization; and

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•a $27 million increase in other revenues due to higher transmission revenues primarily from higher demand and rates;

Current wording

•a $27 million increase in retail sales due to improved weather compared to the prior year.

Previous wording

•a $128 million increase in fuel used in electric generation and purchased power primarily due to higher purchased power costs, including JDA, and natural gas prices, partially offset by lower fuel cost recovery and the prior year retirement of renewable energy credits; and

Current wording

•a $189 million increase in fuel used in electric generation and purchased power primarily due to higher purchased power costs, including JDA, and natural gas prices, partially offset by lower fuel cost recovery and the prior year retirement of renewable energy credits;

Previous wording

•a $94 million increase in depreciation and amortization primarily due to the prior year retirement of renewable energy credits, higher depreciable base and the impact of new rates implemented for the North Carolina MYRP.

Current wording

•a $143 million increase in depreciation and amortization primarily due to higher depreciable base, the prior year retirement of renewable energy credits, and the impact of new rates implemented for the North Carolina MYRP;