DUKE ENERGY FLORIDA, LLC

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.

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 Duke Energy's Annual Report on Form 10-K for the year ended December 31, 2025.

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 12 for additional information on VIEs. These Condensed Consolidated Financial Statements also reflect the Duke Energy Registrants’ proportionate share of certain jointly owned generation and transmission facilities.

Discontinued Operations

Duke Energy has elected to present cash flows of discontinued operations combined with cash flows of continuing operations. For all periods presented, unless otherwise noted, disclosures related to balance sheet activity exclude amounts presented as held for sale and disclosures related to income statement activity exclude amounts related to discontinued operations. See Note 2 for discussion of discontinued operations related to the Commercial Renewables Disposal Groups.

CASH, CASH EQUIVALENTS AND RESTRICTED CASH

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

INVENTORY

Provisions for inventory write-offs were not material at June 30, 2026, and December 31, 2025. The components of inventory are presented in the tables below.

OTHER NONCURRENT ASSETS

Duke Energy, through a nonregulated subsidiary, was the winning bidder in the Carolina Long Bay offshore wind auction in May 2022. The rights acquired through the auction are recorded in Other within Other noncurrent assets on Duke Energy's Condensed Consolidated Balance Sheets and had a carrying value of approximately $150 million as of June 30, 2026, and December 31, 2025. The auction consideration consisted of approximately $129 million of cash payments, as well as bid credits associated with commitments made by Duke Energy to support development of the U.S. offshore wind industry. The carrying value of the offshore wind rights includes $21 million attributable to these bid credits, with corresponding obligations recorded in Other within Other noncurrent liabilities on Duke Energy's Condensed Consolidated Balance Sheets.

In June 2026, Duke Energy entered into a settlement agreement with the United States Department of the Interior to accept cancellation of its rights to develop offshore wind projects in Carolina Long Bay and related commitments associated with those rights. Under the settlement agreement, Duke Energy will receive $129 million upon satisfaction of specified conditions, including reinvestment in certain dispatchable generating resources and grid infrastructure projects that would enhance the reliability and resiliency of the electric grid, as well as completion of an independent third-party audit of related project costs. The investment in qualifying infrastructure projects is expected to be completed by the end of 2026.

As of June 30, 2026, the conditions required to receive the settlement proceeds had not been satisfied. Accordingly, the offshore wind rights and related bid credits have not been derecognized and no receivable has been recognized. Management evaluated the carrying value of the offshore wind rights and concluded that no impairment charge was required as of June 30, 2026. In performing this assessment, management considered the expected settlement proceeds together with the anticipated extinguishment of the related obligations associated with the bid-credit commitments. Upon satisfaction of the conditions and receipt of the settlement proceeds, Duke Energy expects to derecognize the offshore wind rights and the related bid-credit obligations.

ACCOUNTS PAYABLE

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

Outstanding obligations that have been confirmed to the financial institution are as follows:

NEW ACCOUNTING STANDARDS

The following new accounting standards have been issued but not yet adopted by the Duke Energy Registrants as of June 30, 2026.

Disaggregation of Income Statement Expenses. In November 2024, the Financial Accounting Standards Board (FASB) issued accounting guidance that requires additional disclosures regarding certain income statement expense captions. The guidance does not change the expense captions presented on the Condensed Consolidated Statements of Operations but requires disclosure in the notes to the financial statements of specified expense categories included within certain expense captions. For the Duke Energy Registrants, the amendments are effective for fiscal years beginning after December 15, 2026, and interim reporting periods within fiscal years beginning after December 15, 2027, with early adoption permitted. Duke Energy is currently evaluating the impact of this guidance on its financial statement disclosures and does not expect adoption of the guidance to have an impact on results of operations, cash flows or financial condition.

Environmental Credits and Environmental Credit Obligations. In May 2026, the FASB issued accounting guidance that establishes recognition, measurement, presentation and disclosure requirements for environmental credits and environmental credit obligations. For the Duke Energy Registrants, the amendments are effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years, with early adoption permitted. Duke Energy is currently evaluating the impact of the new guidance, including the transition provisions, and has not yet determined the effect adoption will have on its consolidated financial statements and related disclosures.

2. DISPOSITIONS

Minority Interest in Florida Progress

On August 4, 2025, Duke Energy, Progress Energy and Florida Progress LLC (Florida Progress), the holding company of Duke Energy Florida, entered into an investment agreement with an affiliate of Brookfield Super-Core Infrastructure Partners (Investor), pursuant to which Florida Progress agreed to issue membership interests to Investor for up to a 19.7% membership interest in Florida Progress following a series of closings, for an aggregate investment of $6 billion, subject to certain adjustments.

On March 3, 2026, Duke Energy, Progress Energy and Florida Progress consummated the first closing (First Closing) of a minority investment in Florida Progress by Investor. The First Closing resulted in Florida Progress issuing 9.19% of its membership interests in exchange for approximately $2.8 billion in cash proceeds. Duke Energy and Progress Energy retained indirect control of these assets, and, therefore, no gain or loss was recognized on their respective Condensed Consolidated Statements of Operations. The difference between the cash consideration received, net of transaction costs of approximately $30 million, and the carrying value of the noncontrolling interest was $1,941 million and was recorded as an increase to equity.

The first closing will be followed by additional closings with investments occurring no later than on the following timeline: (i) Investor will invest an additional $200 million in Florida Progress no later than December 31, 2026; (ii) Investor will invest an additional $500 million in Florida Progress no later than June 30, 2027; (iii) Investor will invest an additional $1.5 billion in Florida Progress no later than December 31, 2027; and (iv) Investor will invest an additional $1 billion in Florida Progress no later than June 30, 2028. The ownership interest of Florida Progress will transfer proportionally with each closing. The Investor has the option to fund its total $6 billion investment sooner.

Proceeds from the minority interest investment are expected to be used to efficiently fund Duke Energy’s growing capital and investment expenditures plan, primarily by displacing certain previously planned issuances of long-term debt and common equity through 2029.

In connection with the First Closing, Investor, Florida Progress, and Progress Energy entered in to an Amended and Restated Limited Liability Company Operating Agreement of Florida Progress (LLC Agreement). The LLC Agreement, among other things, establishes the general framework governing the relationship between Investor and Florida Progress and their respective successors and transferees, as members of Florida Progress. The LLC Agreement also provides Investor with limited governance rights commensurate with itsownership interest in Florida Progress. Under the LLC Agreement, following the First Closing, the board of managers of Florida Progress will consist of 11 managers, two nominated by Investor andnine nominated by Progress Energy. The LLC Agreement contains certain investor protections, including (1) requiring investor approval or the affirmative vote of a manager nominated by the Investor for Florida Progress to make certain major decisions, and (2) providing Investor with the rights to require Progress Energy to acquire Investor's membership interest in Florida Progress under certain specified circumstances (in each case, subject to certain minimum ownership thresholds). Certain transfer restrictions and other transfer rights apply to Investor and Progress Energy under the LLC Agreement.

Sale of Piedmont's Tennessee Business

In July 2025, Piedmont entered into a purchase agreement with Spire Inc., a Missouri corporation, for the sale of Piedmont's Tennessee business. Piedmont’s Tennessee business was included within the GU&I segment of Duke Energy and Piedmont prior to its sale. In the third quarter of 2025, Duke Energy and Piedmont reclassified the Piedmont Tennessee Disposal Group to assets held for sale. Piedmont ceased recording depreciation and amortization on long-lived assets of the Piedmont Tennessee Disposal Group upon meeting the held for sale criteria in August 2025.

On March 16, 2026, the TPUC approved the transaction and Piedmont closed on the sale on March 31, 2026. Piedmont received proceeds of approximately $2.5 billion from the sale, subject to post-closing adjustments, which were partially used for debt reduction at Piedmont, as well as to efficiently fund Duke Energy's capital plan, primarily by displacing the issuance of common equity in the near term. For the six months ended June 30, 2026, Duke Energy and Piedmont recorded pretax gains on the sale of $368 million and $652 million, respectively, in Gains on Sales of Other Assets and Other, net, in the Condensed Consolidated Statements of Operations. See Note 6 for further information on the repayment of Piedmont's term loan facility in March 2026.

Sale of Commercial Renewables Disposal Groups

The Commercial Renewables Disposal Groups were classified as held for sale and as discontinued operations in the fourth quarter of 2022.

In 2023, Duke Energy completed the sale of substantially all the assets in the Commercial Renewables business segment. Duke Energy closed on the transaction with an affiliate of Brookfield Renewable Partners L.P. on October 25, 2023, for proceeds of $1.1 billion, with approximately half of the proceeds received at closing and the remainder due 18 months after closing. On April 28, 2025, Duke Energy received the remaining sale proceeds from Brookfield Renewable Partners L.P. In January 2025, a sale of the remaining Commercial Renewables business assets was completed and proceeds from that disposition were not material.

During the six months ended June 30, 2025, Income From Discontinued Operations, net of tax in Duke Energy's Condensed Consolidated Statements of Operations related to the Commercial Renewables Disposal Groups was not material.

During the three months ended March 31, 2026, Duke Energy resolved an outstanding liability related to the Commercial Renewables Disposal Groups. As a result of this resolution, Duke Energy recognized $18 million of pretax earnings included in Income From Discontinued Operations, net of tax on Duke Energy's Condensed Consolidated Statements of Operations.

Duke Energy has elected not to separately disclose discontinued operations on Duke Energy's Condensed Consolidated Statements of Cash Flows. The cash flows from discontinued operations related to the Commercial Renewables Disposal Groups were not material for the six months ended June 30, 2026, and 2025.

Assets Held For Sale

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

3. BUSINESS SEGMENTS

Duke Energy's segment structure includes the followingtwo segments: EU&I and GU&I.

The EU&I segment primarily includes Duke Energy's regulated electric utilities in the Carolinas, Florida and the Midwest.

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

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

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

(b) EU&I includes an after tax amount of $39 million, net of $12 million tax benefit, recorded at Duke Energy Carolinas and Duke Energy Progress within Impairment of assets and other charges on the Condensed Consolidated Statements of Operations as a result of Duke Energy Carolinas' North Carolina rate case settlements. Refer to Note 4 for further information.

(b) EU&I segment income includes an after-tax total amount of $189 million, net of $59 million tax benefit, recorded at Duke Energy Carolinas and Duke Energy Progress within Operations, maintenance and other, Impairment of assets of other charges, and Operating Revenues on the Condensed Consolidated Statements of Operations due to legal settlements, as well as regulatory matters related to Duke Energy Carolinas' North Carolina rate case and the establishment of a regulatory liability associated with an energy efficiency program. Refer to Note 4 for further information.

(c) GU&I includes $368 million pretax recorded within Gains on Sales of Other Assets and Other, net, and $7 million pretax recorded within Property and other taxes on the Condensed Consolidated Statements of Operations related to the sale of Piedmont's Tennessee business. GU&I also includes $6 million pretax recorded within Gains on Sales of Other Assets and Other, net, on the Condensed Consolidated Statements of Operations related to the sale of certain renewable natural gas investments. GU&I segment income includes $196 million of tax expense related to these asset sales, which includes the impact of nondeductible goodwill related to the sale of Piedmont's Tennessee business. Refer to Note 2 for further information.

(b) GU&I includes Assets held for sale balances related to the Piedmont Tennessee Disposal Group. Refer to Note 2 for further information.

Duke Energy Carolinas hasone reportable segment, EU&I. The remainder of Duke Energy Carolinas' operations is presented as Other.

Progress Energy

Progress Energy hasone reportable segment, EU&I. The remainder of Progress Energy's operations is presented as Other.

Duke Energy Progress

Duke Energy Progress hasone reportable segment, EU&I. The remainder of Duke Energy Progress' operations is presented as Other.

Duke Energy Florida

Duke Energy Florida hasone reportable segment, EU&I. The remainder of Duke Energy Florida's operations is presented as Other.

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

(a) Other segment items for EU&I and GU&I include Gains (losses) on sales of other assets and other, net, and Other income and expenses, net.

(a) Other segment items for EU&I and GU&I include Gains (losses) on sales of other assets and other, net, and Other income and expenses, net.

Duke Energy Indiana

Duke Energy Indiana hasone reportable segment, EU&I. The remainder of Duke Energy Indiana's operations is presented as Other.

Piedmont hasone reportable segment, GU&I. The remainder of Piedmont's operations is presented as Other.

(a) Other includes Gains (losses) on sales of other assets and other, net, and Other income and expenses, net.

(b) GU&I includes Assets held for sale balances related to the Piedmont Tennessee Disposal Group. Refer to Note 2 for further information.

4. REGULATORY MATTERS

RATE-RELATED INFORMATION

The NCUC, PSCSC, FPSC, IURC, PUCO and KPSC approve rates for retail electric and natural gas services within their states. The FERC regulates and approves rates for wholesale electric sales and interstate transmission rates. The FERC also regulates certification and siting of new interstate natural gas pipeline projects. For open regulatory matters, unless otherwise noted, the Subsidiary Registrants cannot predict the outcome or ultimate resolution of their respective matters.

Winter Storm Fern

In late January 2026, severe weather associated with Winter Storm Fern moved across the eastern U.S. and impacted all of Duke Energy's service territories, with damage primarily occurring in the Duke Energy Carolinas and Duke Energy Progress territories in North Carolina and South Carolina. Approximately 200,000 customers were impacted across Duke Energy's system. Total storm restoration costs, including capital expenditures, for Duke Energy are estimated to be $268 million, which includes $177 million for Duke Energy Carolinas and $91 million for Duke Energy Progress. Incremental storm restoration costs related to operation and maintenance activities in excess of amounts in base rates were charged to storm reserves or deferred as regulatory assets, where applicable, and will be reviewed for recovery in future regulatory proceedings. As of June 30, 2026, the operations and maintenance expense amounts deferred in Regulatory assets within Other Noncurrent Assets on the Condensed Consolidated Balance Sheets were $146 million and $63 million for Duke Energy Carolinas and Duke Energy Progress, respectively. On July 6, 2026, Duke Energy Carolinas and the North Carolina Public Staff entered into a stipulation in the ongoing 2025 Duke Energy Carolinas' North Carolina rate case resolving certain issues regarding storm restoration cost recovery. Under the stipulation, the parties agreed that eligible Winter Storm Fern operation and maintenance restoration costs, without carrying costs, shall be included in the revenue requirement and netted against the Hurricane Helene over-securitization amount, subject to audit by the North Carolina Public Staff and a final true up in the next general rate case. The stipulation is subject to approval by the NCUC as part of ongoing proceedings in the 2025 Duke Energy Carolinas' North Carolina rate case. See below for additional information regarding the 2025 North Carolina rate cases.

On April 14, 2026, Duke Energy Carolinas and Duke Energy Progress filed interim requests with the NCUC related to fuel and purchased power costs incurred during severe winter weather and record customer energy demand experienced in the first quarter of 2026. The interim filings requested recovery of underrecovered fuel and purchased power costs of $500 million for Duke Energy Carolinas and $309 million for Duke Energy Progress, over a period of 19 months. These pass-through costs represent actual expenses, without markup, necessary to supply power, as allowed under the North Carolina Power Bill Reduction Act (SB266). SB266 implemented actions designed to reduce electricity costs for customers including enhanced cost recovery mechanisms and more timely recovery of fuel costs, among other actions. The NCUC approved the proposed 19 month recovery period in May 2026, and new fuel rider rates went into effect June 1, 2026.

Duke Energy Carolinas and Duke Energy Progress

Applications to Combine Utilities

On August 14, 2025, Duke Energy Carolinas and Duke Energy Progress (together, the Companies) filed a joint application with the NCUC and PSCSC for approval to combine utilities by which Duke Energy Progress will merge into Duke Energy Carolinas, resulting in a single electric utility serving the Companies' North Carolina and South Carolina service territories. Duke Energy Corporation, together with the Companies, also filed an application with the FERC on the same day. The single utility’s ability to plan, execute and operate resources more efficiently is expected to result in substantial cost savings, benefiting customers by reducing the overall costs to serve. The targeted effective date is January 1, 2027. On January 30, 2026, FERC issued an order authorizing the combination as consistent with the public interest.

The North Carolina Public Staff and intervenors in the NCUC proceeding filed testimony advocating, in part, that the NCUC impose certain conditions for the combination to go forward, including conditions related to treatment of costs to achieve and future rate consolidation. In the South Carolina proceeding, the South Carolina Office of Regulatory Staff and intervenors filed testimony recommending that the PSCSC condition approval of the combination on additional requirements, including addressing the identification, allocation and recovery of cost impacts and costs to achieve, as well as the treatment of benefits.

On February 24, 2026, the Companies reached a comprehensive settlement with the North Carolina Public Staff and certain other intervenors (stipulating parties) in the case, which was filed with NCUC. Subject to approval by the NCUC, the agreement resolved all issues among the North Carolina stipulating parties regarding the combinationof Duke Energy Carolinas and Duke Energy Progress. Among other terms, the agreement requires the Companies to guarantee that savings from the combination over a 14-year period will be sufficient to offset the identified impacts to North Carolina retail customers to achieve the combination. The guaranteed savings are calculated based on a combination of capital-related savings associated with Duke Energy Carolinas and Duke Energy Progress' most recent resource planning assumptions, as well as operational savings enabled by the combination expected to accrue following the effective date of the combination. The agreement also permits deferral of costs to achieve, with recovery subject to prudency review, and provides that North Carolina retail customers will make annual Share the Benefits contributions to South Carolina retail customers for asix-year period beginning in 2030. On May 1, 2026, the NCUC issued an order approving the combination consistent with the comprehensive settlement.

On March 6, 2026, the Companies reached a comprehensive settlement with the South Carolina Office of Regulatory Staff and certain other intervenors in the case, which was filed with PSCSC. Subject to approval by the PSCSC, the agreement, which has the same core components as the comprehensive settlement reached in North Carolina, resolved all issues among the South Carolina stipulating parties, regarding the combinationof Duke Energy Carolinas and Duke Energy Progress. Among other terms, the agreement requires the Companies to guarantee that savings from the combination over a 14-year period will be sufficient to offset the identified impacts to South Carolina retail customers, including through the receipt of Share the Benefits contributions from North Carolina retail and wholesale customers. On June 3, 2026, the PSCSC issued its final written order approving the combination consistent with the terms of the comprehensive settlement.

2023 North Carolina Rate Case

In January 2023, Duke Energy Carolinas filed a performance-based regulation (PBR) application with the NCUC to request an increase in base rate retail revenues. The PBR application included an MYRP to recover projected capital investments during thethree-year MYRP period. In addition to the MYRP, the PBR application included an Earnings Sharing Mechanism, Residential Decoupling Mechanism and Performance Incentive Mechanisms (PIMs) as required by HB951.

In August 2023, Duke Energy Carolinas filed with the NCUC a partial settlement with the North Carolina Public Staff in connection with its PBR application. The partial settlement included, among other things, agreement on a substantial portion of the North Carolina retail rate base for the historic base case of approximately $19.5 billion and all of the capital projects and related costs to be included in thethree-year MYRP, including $4.6 billion (North Carolina retail allocation) projected to go in service over the MYRP period. Additionally, the partial settlement included agreement, with certain adjustments, on depreciation rates, the recovery of grid improvement plan costs and PIMs, Tracking Metrics and the Residential Decoupling Mechanism under the PBR application. On August 28, 2023, Duke Energy Carolinas filed with the NCUC a second partial settlement with the North Carolina Public Staff resolving additional issues, including the future treatment of nuclear PTCs related to the IRA, through a stand-alone rider that would provide the benefits to customers. This stand-alone rider was effective in rates beginning January 1, 2025.

On December 15, 2023, the NCUC issued an order approving Duke Energy Carolinas' PBR application, as modified by the partial settlements and the order, including an overall retail revenue increase of $436 million in Year 1, $174 million in Year 2 and $158 million in Year 3, for a combined total of $768 million. The order established an ROE of 10.1% based upon an equity ratio of 53% and approved, with certain adjustments, depreciation rates and the recovery of grid improvement plan costs and certain deferred COVID-related costs. Additionally, the Residential Decoupling Mechanism and PIMs were approved as requested under the PBR application and revised by the partial settlements. Duke Energy Carolinas implemented interim rates on September 1, 2023. New revised Year 1 rates and the residential decoupling were implemented on January 15, 2024.

In February 2024, a number of parties filed Notices of Appeal of the December 15, 2023, NCUC order. Notices of Appeal were filed by the Carolina Industrial Group for Fair Utility Rates (CIGFUR) III, a collection of electric membership cooperatives (collectively, the EMCs), and the North Carolina Attorney General’s Office (the AGO). CIGFUR III and the EMCs appealed the interclass subsidy reduction percentage and the Transmission Cost Allocation stipulation. In addition, CIGFUR III appealed the NCUC’s elimination of the equal percentage fuel cost allocation methodology. The AGO appealed several issues, including the authorized ROE and certain rate design and accounting matters. On March 1, 2024, Carolina Utility Customers Association, Inc. appealed several issues, including the authorized ROE and certain rate design and accounting matters. In July 2024, the Supreme Court of North Carolina consolidated these appeals with the parallel appeals of the NCUC's order regarding the Duke Energy Progress PBR appli cation. On May 22, 2026, the Supreme Court of North Carolina affirmed the NCUC order in its entirety. This matter is now fully resolved.

2025 North Carolina Rate Case

On November 20, 2025, Duke Energy Carolinas filed a PBR application with the NCUC to request an increase in base rate retail revenues. The PBR application included an MYRP to recover projected capital investments during a two-year MYRP period. In addition to the MYRP, the PBR application included an Earnings Sharing Mechanism, Residential Decoupling Mechanism and PIMs. As filed, the overall net retail revenue increase was $727 million in Year 1 and $275 million in Year 2, for a combined total of $1.0 billion or 15.0%. The application also requested an ROE of 10.95% with an equity ratio of 53%. The rate increase is driven primarily by major transmission and distribution investments made since the last rate case and projected capital investments in the MYRP, as well as investments in energy storage and solar assets.

On June 19, 2026, Duke Energy Carolinas filed rebuttal testimony incorporating six adjustments to its application, including a reduction in the requested ROE, which reduced the requested increase to approximately $622 million over the two-year period. On July 2, 2026, Duke Energy Carolinas and the North Carolina Public Staff entered into a partial stipulation resolving certain issues in the proceeding while leaving key issues for litigation, including ROE, capital structure and performance-based regulation matters. On July 6, 2026, the parties entered into a separate storm cost stipulation resolving issues related to Hurricane Helene and Winter Storm Fern cost recovery. See the Winter Storm Fern discussion above for additional information regarding the storm cost stipulation.

On July 17, 2026, Duke Energy Carolinas, the North Carolina Public Staff and other intervening parties filed a comprehensive settlement with the NCUC resolving all remaining revenue requirement issues in the proceeding, including an ROE of 9.8% and an equity ratio of 53%. The settlement includes an overall net retail revenue increase of $286 million in Year 1 and $210 million in Year 2, representing a cumulative increase of $496 million, or 7.4%. The intervening parties also agreed to pursue good faith settlement discussions to reach a substantially similar settlement framework in the ongoing Duke Energy Progress rate case proceeding. Consistent with the settlement framework, Duke Energy Carolinas recorded a $29 million impairment charge within Impairment of assets and other charges in the Condensed Consolidated Statements of Operations and Comprehensive Income for the three and six months ended June 30, 2026. On July 24, 2026, Duke Energy Carolinas and the North Carolina Public Staff filed a separate settlement agreement with the NCUC regarding PIMs.

The stipulations are subject to the review and approval of the NCUC and an order is expected by November 2026. Duke Energy Carolinas has requested implementation of Year 1 rates no later than January 1, 2027.

2025 South Carolina Rate Case

On July 1, 2025, Duke Energy Carolinas filed a base rate case with the PSCSC requesting an increase in electric base rates. The request for the rate increase was driven by significant capital investments, including generation plant additions, as well as transmission, distribution and grid improvements. On November 11, 2025, Duke Energy Carolinas filed a comprehensive settlement with the South Carolina Office of Regulatory Staff and other intervenors in the case resolving all revenue requirement issues in the base rate proceeding. The settlement included an annual net increase in electric rates of approximately $19 million, including the flow back of PTC benefits to customers, an ROE of 9.99% and an equity ratio of 53%. On December 31, 2025, the PSCSC issued an order approving the settlement agreement without modification. Revised customer rates went into effect on March 1, 2026. This matter is now fully resolved.

Bad Creek License Extension

On July 14, 2025, Duke Energy Carolinas filed its final license application with the FERC for the Bad Creek Pumped Storage Hydroelectric Station. The application, if approved, would extend plant operations for an additional 50 years. The current license expires in July 2027 and the renewal would extend the operating license of the facility to 2077. A FERC ruling is expected in 2027.

Anderson County Combined Cycle CECPCN

On October 30, 2025, Duke Energy Carolinas filed with the PSCSC an application for a CECPCN to construct and operate a new 1,365-MW natural gas CC generating facility with hydrogen capability in Anderson County, South Carolina. The preliminary estimate of the total project cost was approximately$3.2 billion, inclusive of financing costs. Subject to negotiation of final contractual terms, which began in April 2026, the new CC will be co-owned with North Carolina Electric Membership Corporation (NCEMC) and Central Electric Power Cooperative (CEPC), with Duke Energy Carolinas owning approximately 1,170 MW, NCEMC owning 100 MW and CEPC owning the remaining 95 MW. On April 24, 2026, the PSCSC issued a final order approving the CECPCN and authorizing construction of the facility. Construction is anticipated to begin in 2027 and the facility is expected to be in service by the end of 2030. In addition, Duke Energy Carolinas submitted its application for an air permit on March 11, 2026, to the South Carolina Department of Environmental Services.

On March 18, 2026, Duke Energy Carolinas filed an out-of-state application for the Anderson facilities with the NCUC requesting the NCUC to determine the need for and approve an estimate of construction costs and construction schedule for the facilities intended to serve North Carolina retail customers. On July 24, 2026, Duke Energy Carolinas and the North Carolina Public Staff filed a settlement agreement recommending that the NCUC approve the requested determination of need and the estimated construction cost and schedule. A decision from the NCUC is anticipated in the fourth quarter of 2026.

Buck Combustion Turbines CPCN

On November 21, 2025, Duke Energy Carolinas filed with the NCUC an application to construct and operatetwo hydrogen-capable advanced-class simple-cycle CTs at the site of the existing Buck CC Station. Thetwo new CTs, totaling approximately 850 MW, will provide incremental peaking generation to serve Duke Energy Carolinas' customers growing energy needs. Pending regulatory approvals, construction of the CTs is planned to start in 2027 with the units targeted to be placed in service by the end of 2029. As part of the application, Duke Energy Carolinas noted that the recovery of Construction Work in Progress (CWIP) during the construction period for the proposed facility will not be included in rate base and will instead accrue AFUDC. The 2030 North Carolina retail revenue requirement for the proposed facility is estimated to be $154 million, representing an approximate average North Carolina retail rate increase of 2.3% across all classes. On February 27, 2026, Duke Energy Carolinas filed an air permit application with the NCDEQ for the CTs. An evidentiary hearing related to the CPCN is scheduled to begin on September 9, 2026. A decision on the CPCN application is anticipated by the fourth quarter of 2026.

Marshall Combustion Turbines CPCN

In March 2024, Duke Energy Carolinas filed with the NCUC an application to construct and operatetwo hydrogen-capable advanced-class simple-cycle CTs at the site of the existing Marshall Steam Station. Thetwo new CTs, totaling approximately 850 MW, will enable the retirement of Marshall coal units 1 and 2 and provide incremental capacity to support system capacity needs and expanded flexibility to support integration of renewables. Pending regulatory approvals, the CTs are targeted to be placed in service by the end of 2028. In December 2024, the NCUC issued its order granting the CPCN authorizing construction and the NCDEQ issued final air permits for thetwo CTs.

On December 1, 2025, Duke Energy Carolinas filed an application requesting the NCUC's ongoing review of the construction of thetwo CTs that are planned to operate at the Marshall Steam Station, covering costs incurred from the initiation of development of the facility through September 30, 2025. The application requested that the NCUC find that Duke Energy Carolinas’ construction costs incurred for the CTs during the review period are prudent and reasonable. These activities included actions related to site preparation and the ordering of certain long-lead-time equipment. The application also requested that the NCUC modify the existing CPCN for the CTs to reflect a revision to the cost estimate for the units. On May 29, 2026, the NCUC issued an order, concluding that the costs incurred by Duke Energy Carolinas during the review period were reasonable and prudently incurred and modifying the CPCN to incorporate the updated construction cost estimate.

On January 30, 2026, Duke Energy Carolinas filed an application for an out-of-state certificate with the PSCSC requesting that it find that the North Carolina-sited facility comprised oftwo new advanced class CTs at the existing Marshall Steam Station is in the public convenience and necessity for South Carolina retail customers. On July 23, 2026, the PSCSC issued its order granting the CPCN.

Duke Energy Progress

2022 North Carolina Rate Case

In October 2022, Duke Energy Progress filed a PBR application with the NCUC to request an increase in base rate retail revenues. The rate request before the NCUC included an MYRP to recover projected capital investments during thethree-year MYRP period. In addition to the MYRP, the PBR application included an Earnings Sharing Mechanism, Residential Decoupling Mechanism and PIMs as required by HB951.

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

On August 18, 2023, the NCUC issued an order approving Duke Energy Progress' PBR application, as modified by the partial settlements and the order, including an overall retail revenue increase of $233 million in Year 1, $126 million in Year 2 and $135 million in Year 3, for a combined total of $494 million. Key aspects of the order include the approval of North Carolina retail rate base for the historic base case of approximately $12.2 billion and capital projects and related costs to be included in thethree-year MYRP, including $3.5 billion (North Carolina retail allocation) projected to go in service over the MYRP period. The order established an ROE of 9.8% based upon an equity ratio of 53% and approved, with certain adjustments, depreciation rates and the recovery of grid improvement plan costs and certain deferred COVID-related costs. Additionally, the Residential Decoupling Mechanism and PIMs were approved as requested under the PBR application and revised by the partial settlements. Duke Energy Progress implemented interim rates on June 1, 2023, and implemented revised Year 1 rates and the residential decoupling on October 1, 2023.

In October 2023, CIGFUR II and Haywood Electric Membership Corporation each filed a Notice of Appeal of the August 18, 2023 NCUC order. Both parties appealed certain matters that do not impact the overall revenue requirement in the rate case. Specifically, they appealed the interclass subsidy reduction percentage, and CIGFUR II also appealed the Customer Assistance Program and the equal percentage fuel cost allocation methodology. In November 2023, the AGO filed a Notice of Cross Appeal of the NCUC's determination regarding the exclusion of electric vehicle revenue from the residential decoupling mechanism. In November 2023, Duke Energy Progress, the North Carolina Public Staff, CIGFUR II, and a number of other parties reached a settlement pursuant to which CIGFUR II agreed not to pursue its appeal of the Customer Assistance Program. In July 2024, the Supreme Court of North Carolina consolidated these appeals with the parallel appeals of the NCUC's order regarding the Duke Energy Carolinas PBR application. On May 22, 2026, the Supreme Court of North Carolina affirmed the NCUC order in its entirety. This matter is now fully resolved.

2025 North Carolina Rate Case

On November 20, 2025, Duke Energy Progress filed a PBR application with the NCUC to request an increase in base rate retail revenues. The PBR application included an MYRP to recover projected capital investments during a two-year MYRP period. In addition to the MYRP, the PBR application included an Earnings Sharing Mechanism, Residential Decoupling Mechanism and PIMs. The overall net retail revenue increase originally requested was $529 million in Year 1 and $200 million in Year 2, for a combined total of $729 million or 15.1%, including the flow back of PTC benefits to customers through a proposed PTC rider similar to Duke Energy Carolinas. The application also requested an ROE of 10.95% and an equity ratio of 53%. The requested rate increase is driven primarily by major transmission and distribution investments made since the last rate case, projected capital investments included in the MYRP and investments in energy storage and solar assets.

On July 17, 2026, Duke Energy Carolinas, the North Carolina Public Staff, and other intervening parties filed a comprehensive settlement agreement with the NCUC resolving all remaining revenue requirement issues in the Duke Energy Carolinas rate case proceeding and agreed to pursue good faith settlement discussions using a substantially similar framework in the ongoing Duke Energy Progress rate case proceeding. Consistent with the settlement framework, Duke Energy Progress recorded a $22 million charge within Impairment of assets and other charges in the Condensed Consolidated Statements of Operations and Comprehensive Income for the three and six months ended June 30, 2026. On July 24, 2026, Duke Energy Progress filed rebuttal testimony incorporating six adjustments to its application, including a reduction in the requested ROE, which reduced the requested increase to approximately $610 million over the two-year period, for a cumulative increase of 12.3%.

Duke Energy Progress has requested that Year 1 rates become effective no later than January 1, 2027. The evidentiary hearing is scheduled to commence on August 11, 2026 and an order is expected by November 2026.

South Carolina Electric Rate Stabilization Adjustment Filing

On March 13, 2026, Duke Energy Progress filed a request with the PSCSC to adjust electric rates under the new electric Rate Stabilization Adjustment (eRSA) framework, aimed at supporting investments and improving reliability. This filing represents the first electric utility proceeding under the eRSA in South Carolina. Established by South Carolina’s 2025 Energy Security Act, the eRSA allows electric utilities to seek annual rate adjustments using standardized historical data, with continued oversight based on prior base rate case outcomes. Duke Energy Progress' request stems from investments made in 2025 for grid and reliability improvements not covered in its base rate case, with the law permitting adjustments when calendar-year earned returns deviate by more than 0.50% from authorized returns. The filing requested an annual revenue increase of $37 million, reflecting an overall rate increase of 5.5% across customer classes and resulting in a projected ROE of 9.99%, consistent with the ROE authorized in the 2025 South Carolina Rate Case.

On June 15, 2026, Duke Energy Progress and the South Carolina Office of Regulatory Staff (ORS) filed a stipulation resolving audit adjustments and agreeing to a revenue requirement increase of $24 million. On June 29, 2026, the PSCSC issued a directive indicating its intent to deny the stipulation and Duke Energy Progress' election under the eRSA framework, citing Duke Energy Progress' failure to file a quarterly monitoring report by June 15, 2026, for the 12-month period ending March 31, 2026. Duke Energy Progress filed a request for reconsideration of that directive on July 2, 2026. On July 13, 2026, the PSCSC issued a further directive concluding that electric utilities electing into the eRSA are not eligible to implement rate adjustments until the year following their election. On July 14, 2026, Duke Energy Progress filed an objection and request that the PSCSC rescind or amend this directive prior to issuing a final order, asserting that the directive is inconsistent with the eRSA statute and prior PSCSC precedent in natural gas rate stabilization proceedings, and was based on legal arguments not previously raised in the proceeding. On July 15, 2026, the PSCSC issued an order denying the stipulation and rejecting Duke Energy Progress' proposed rate adjustment in 2026.

On July 23, 2026, Duke Energy Progress filed a petition for reconsideration of the PSCSC's order and is pursuing additional legal and regulatory remedies, including filing an appeal with the South Carolina Supreme Court on July 24, 2026. The ultimate outcome of the proceeding, including the timing and amount of any authorized rate adjustment, remains uncertain.

Person County Combined Cycle CPCNs

On February 7, 2025, Duke Energy Progress filed with the NCUC its application to construct and operate a second 1,360-MW hydrogen-capable, advanced-class CC unit in Person County at the Roxboro Plant. NCEMC has the right to co-own the facilities under its existing supply agreement with Duke Energy Progress. Duke Energy Progress and NCEMC executed the contractual agreements for both units in April 2026, which allows NCEMC to own approximately 225 MW of each unit, for a total of approximately 450 MW. The joint ownership agreement was finalized and executed in June 2026.

Pending regulatory approvals, the unit is targeted to be placed in service by the end of 2029. As part of the application, Duke Energy Progress noted that the recovery of CWIP during the construction period for the proposed facility may be pursued in the future. The 2030 North Carolina retail revenue requirement for the second unit is estimated to be $113 million, representing an approximate average retail rate increase of 2.6% across all classes. The air permit was issued by the NCDEQ in December 2024. On October 16, 2025, the NCUC issued its order granting the CPCN. Construction activities are ongoing at both Person County CC units.

On January 30, 2026, Duke Energy Progress filed an application for out-of-state certificates with the PSCSC requesting that it find that the two new CC units, totaling approximately 2,720 MW, sited at the Person County facilities in North Carolina are in the public convenience and necessity for South Carolina retail customers. On July 23, 2026, the PSCSC issued its order granting the CPCN.

Robinson Subsequent License Renewal

In April 2025, Duke Energy Progress filed an SLR application with the NRC to renew the Robinson facility operating license for an additional 20 years. The current license would have expired in 2030. In March 2026, the NRC approved a final environmental impact statement. On April 23, 2026, the NRC issued the subsequent renewed license for Robinson to continue operations until 2050. This matter is fully resolved.

Duke Energy Florida

Hurricanes Debby, Helene and Milton

In 2024, Hurricane Debby (Category 1 storm), Hurricane Helene (Category 4 storm) and Hurricane Milton (Category 3 storm) made landfall in Florida and caused significant damage. Duke Energy Florida has certain existing storm reserve regulatory liability amounts, which are applied to the recovery of storm costs. The storm reserve amount was approximately $63 million as of July 31, 2024, prior to the damage resulting from hurricanes Debby, Helene and Milton. Duke Energy Florida is permitted to petition the FPSC for recovery of incremental operation and maintenance costs resulting from the storms and to replenish the retail customer storm reserve to approximately $132 million.

In December 2024, Duke Energy Florida filed its petition to recover the estimated costs incurred to respond to all three storms, including replenishment of the storm reserve, seeking recovery of approximately $1.1 billion over 12 months beginning with the first billing cycle in March 2025. On February 4, 2025, the FPSC voted to approve Duke Energy Florida's request for recovery of these estimated storm costs as filed, subject to true up after the actual costs are filed. New rates were effective March 1, 2025. Approximately $75 million of capital related to these storms will be sought for recovery in future base rate case filings.

On January 5, 2026, Duke Energy Florida filed a notice with the FPSC to stop recovery of the storm cost charge because the costs were fully recovered and the storm reserve was fully replenished earlier than anticipated, primarily due to lower actual incurred storm costs as compared to preliminary estimates. The notice was administratively approved and revised rates with the storm charge removed were effective with the first billing cycle in Febr uary 2026. Duke Energy Florida filed documentation evidencing its total Debby, Helene and Milton actual storm costs of $903 million on February 27, 2026. In March 2026, Duke Energy Florida filed a petition to refund approximately $91 million of storm costs that were over-collected. On May 21, 2026, the FPSC issued its order approving the petition. The FPSC is expected to vote at its September 10, 2026 Agenda Conference on Duke Energy Florida's February 27, 2026 filing.

Duke Energy Ohio 2022 Natural Gas Base Rate Case

In June 2022, Duke Energy Ohio filed a natural gas base rate case application with the PUCO seeking recovery of capital investments made since Duke Energy Ohio's last natural gas base rate case in 2012. Duke Energy Ohio also sought to adjust the caps on its CEP rider. In April 2023, Duke Energy Ohio filed a stipulation with all parties to the case except the Ohio Consumers' Counsel (OCC). In the stipulation, the parties agreed to an annual revenue increase of approximately $32 million with an equity ratio of 52.32% and an ROE of 9.6%, and adjustments to the CEP rider caps. The stipulation was opposed by the OCC at an evidentiary hearing that concluded in May 2023. On November 1, 2023, PUCO issued an order approving the stipulation as filed and new rates went into effect November 1, 2023. In October 2024, the OCC filed a Notice of Appeal with the Supreme Court of Ohio. On June 5, 2026, the Supreme Court of Ohio affirmed the PUCO order. This matter is now fully resolved.

Duke Energy Ohio 2026 Electric Rate Case

On March 30, 2026, Duke Energy Ohio filed an electric distribution base rate case with the PUCO, requesting an annualized increase in electric distribution base rates of approximately $90 million. Duke Energy Ohio requested an ROE of 10.5% with an equity ratio of 52.66%. The rate increase is driven by significant infrastructure upgrade investments since the last general rate case. An evidentiary hearing is scheduled to commence on January 20, 2027. New rates are anticipated to go into effect in May 2027.

Duke Energy Ohio 2026 Natural Gas Rate Case

On June 29, 2026, Duke Energy Ohio filed a natural gas base rate case application with the PUCO requesting an annualized increase in natural gas base rates of approximately $102 million, based on a proposed ROE of 10.5% and an equity ratio of 53.14%. The filing would result in an overall average customer rate increase of approximately 9.9%, primarily driven by capital investments to strengthen the natural gas delivery system. An evidentiary hearing is expected in the second quarter of 2027, with new rates anticipated to go into effect in September 2027.

Duke Energy Ohio RTO Adder

On February 24, 2022, the OCC filed a complaint asserting that FERC should reduce the ROE utilized in transmission formula rates for Duke Energy Ohio and certain other transmission providers by eliminating the 50-basis-point adder associated with RTO membership. The OCC contended that the adder was inappropriate because Ohio law requires transmission-owning utilities to participate in the RTO and the adder is only available when RTO membership is voluntary. On December 15, 2022, FERC denied the complaint as it related to Duke Energy Ohio but granted relief with respect to certain other transmission providers.

Following appeals by certain transmission providers, the U.S. Court of Appeals for the Sixth Circuit (Sixth Circuit) reversed FERC's decision on January 17, 2025. The Sixth Circuit held that the 50-basis-point-adder is available only when RTO membership is voluntary. The court further concluded that because Ohio law requires transmission-owning utilities to participate in an RTO, FERC could not lawfully remove the adder from certain Ohio transmission providers while continuing to permit Duke Energy Ohio to recover the adder. The matter was remanded to FERC for further proceedings consistent with the court's decision. As a result of the ruling, Duke Energy Ohio recognized a pretax charge during 2025 that was not material.

On March 26, 2025, the Sixth Circuit denied requests for rehearing. On April 16, 2025, the Sixth Circuit stayed its mandate pending further appeal to the U.S. Supreme Court. On July 17, 2025, Duke Energy Ohio filed a respondent brief with the U.S. Supreme Court seeking review of the Sixth Circuit's decision. On November 10, 2025, the U.S. Supreme Court denied review, and on November 13, 2025, the Sixth Circuit remanded the matter to FERC.

On June 25, 2026, FERC issued an order on remand directing the removal of the ROE adder from Duke Energy Ohio's transmission formula rate and requiring Duke Energy Ohio to provide refunds for the period beginning February 24, 2022. As a result of this order, Duke Energy Ohio recorded a $15 million reduction in Operating Revenues during the three months ended June 30, 2026. As of June 30, 2026, Duke Energy Ohio had recorded a regulatory liability of $20 million related to this matter. Refunds are expected to be issued by the first quarter of 2027. On July 24, 2026, Duke Energy Ohio filed a request for rehearing of FERC's June 25, 2026 order, including whether the order complies with the Federal Power Act's requirements governing changes to existing rates. FERC must act upon the request for rehearing by August 24, 2026, but could issue a further substantive order after that date.

Transmission Cost Allocation Proceedings

Duke Energy Ohio is a member of PJM Interconnection, LLC, the Independent System Operator (ISO) and FERC-approved RTO for the region in which Duke Energy Ohio operates. Duke Energy Ohio and other transmission owners in PJM have turned over control of their transmission facilities and their transmission systems are currently under the RTO dispatch control of PJM. Transmission service is provided on a regionwide, open-access basis using the transmission facilities of the PJM members at rates based on the costs of transmission service.

RTOs like PJM engage in long-term regional planning to ensure the transparent evaluation of transmission facilities and to assist in determining how such projects should be designed and built to meet broader regional needs. Costs are typically recovered from customers who benefit from the upgrades or, for certain larger projects, costs may be shared across the PJM region. Shared costs are determined according to a formula approved by FERC, and the formula relies on a Solution-Based Distribution Factor (DFAX) methodology. PJM has historically used a de minimis threshold in its DFAX methodology that exempts zones from paying a portion of transmission costs if the zone's calculated use of the transmission facility is below 1%. Duke Energy Ohio has historically been below the de minimis threshold for certain transmission projects and, as such, was not allocated respective costs for those projects.

From time to time, various parties have challenged cost allocations for specific RTO-area transmission projects, including PJM, at the FERC and other appellate courts. On March 6, 2026, FERC issued a ruling related to these cost challenges that is expected to impact the historical transmission cost allocations of PJM. Specifically, the FERC found that the de minimis threshold used in the DFAX cost allocation methodology is unjust, unreasonable and inconsistent with cost causation. Among other considerations, FERC noted that larger RTO zones typically have higher peak loads and the same DFAX usage value could place a smaller zone above the 1% de minimis threshold – which is based on peak load –resulting in a cost allocation to the smaller zone, while a larger zone with comparable usage would not receive a cost allocation. In conjunction with this ruling, PJM was ordered to file tariff revisions within 90 days, which update the DFAX cost allocation percentages in the tariff based on the elimination of the 1% de minimis threshold. Based on those updated cost allocation percentages, PJM will then need to recalculate costs and issue refunds/surcharges (with interest) going back to June 18, 2015. On April 6, 2026, Duke Energy Ohio, jointly with several other PJM transmission owners, filed for rehearing of the March 6, 2026 order. On May 12, 2026, Duke Energy Ohio, jointly with several of the PJM transmission owners, filed a petition for review of the March 6, 2026 order in the U.S. Court of Appeals for the District of Columbia Circuit. On June 4, 2026, PJM submitted a compliance filing to remove the de minimis threshold from the tariff prospectively, effective June 1, 2026.

Duke Energy Ohio is evaluating the potential impacts of this ruling, including any potential amounts owed to PJM, and required financial statement adjustments and is unable to reasonably estimate the ultimate financial statement impact.

Duke Energy Kentucky 2022 Electric Base Rate Case

In December 2022, Duke Energy Kentucky filed a base rate case with the KPSC driven by capital investments to strengthen the electricity generation and delivery systems along with adjusted depreciation rates for the East Bend and Woodsdale Combustion Turbine generation stations. Duke Energy Kentucky also requested approval for new programs and tariff updates, including a voluntary community-based renewable subscription program and two electric vehicle charging programs. The KPSC issued an order on October 12, 2023, including a $48 million increase in base revenues, an ROE of 9.75% for electric base rates and 9.65% for electric riders and an equity ratio of 52.145%. New rates went into effect October 13, 2023. Duke Energy Kentucky's request to adjust the depreciation rates of East Bend was denied and the KPSC ordered depreciation rates with a 2041 retirement date for the unit. The KPSC approved the request to align depreciation rates of Woodsdale CT with a 2040 retirement date and denied the voluntary community-based renewable subscription program and electric vehicle charging programs.

Revised rates were implemented in August 2024 after a rehearing request. On December 14, 2023, Duke Energy Kentucky filed an appeal with the Franklin County Circuit Court on certain matters for which the KPSC denied rehearing, specifically as it relates to the inclusion of decommissioning costs in depreciation rates for East Bend and Woodsdale. The case is fully briefed and Duke Energy Kentucky is awaiting the scheduling of oral arguments and the outcome of the appeal.

Duke Energy Indiana

Indiana Coal Ash Recovery

In Duke Energy Indiana’s 2019 rate case, the IURC opened a subdocket for post-2018 coal ash related expenditures. In April 2020, Duke Energy Indiana filed testimony in the coal ash subdocket requesting recovery for post-2018 coal ash basin closure costs associated with closure plans that were approved by the Indiana Department of Environmental Management (IDEM) at that time as well as continued deferral approval and carrying costs on the balance of such coal ash basin closure costs. On November 3, 2021, the IURC issued an order allowing recovery of the post-2018 coal ash basin closure costs, as well as continuing deferral, with carrying costs on the balance. The OUCC and the Duke Industrial Group appealed. The Indiana Court of Appeals issued its opinion on February 21, 2023, reversing the IURC's order to the extent that it allowed Duke Energy Indiana to recover federally mandated costs incurred prior to the IURC's November 3, 2021 order. In addition, the court found that any costs incurred pre-petition to determine federally mandated compliance options were not specifically authorized by the statute and should also be disallowed.

In 2023, Duke Energy Indiana filed its proposal to remove from rates certain costs incurred prior to the IURC's November 3, 2021 order date. On September 20, 2023, the IURC approved Duke Energy Indiana's proposal to remove the costs from its rates and assessed simple interest on the refunds at a rate of 4.71%, beginning from when the costs were initially recovered from customers. In the 2024 Indiana Rate Case, Duke Energy Indiana included a request to recover the pre-order costs denied by the Indiana Court of Appeals and certain future coal ash closure costs as part of depreciation costs. The IURC's January 29, 2025 order in the 2024 Indiana Rate Case denied recovery of the pre-order costs previously denied by the Indiana Court of Appeals but approved the recovery of certain future coal ash closure costs as part of depreciation costs.

In 2023, Duke Energy Indiana filed a petition under the amended version of the federal mandate statute for additional post-2018 coal ash closure costs for the remaining basins not included in the Indiana coal ash recovery case from 2020. On May 8, 2024, the IURC issued a CPCN and approved these coal ash related compliance projects as federally mandated compliance projects. In June 2024, the Citizens Action Coalition of Indiana (CAC) filed a notice of appeal of the IURC's order. On August 26, 2025, the Indiana Court of Appeals reversed the decision by the IURC concluding that the IURC incorrectly allowed Duke Energy Indiana to collect certain of those coal ash costs from customers. In October 2025, Duke Energy Indiana and the Indiana Office of Attorney General filed separate petitions requesting the Indiana Supreme Court to review the case. On January 26, 2026, the Indiana Supreme Court denied Duke Energy Indiana's and the Indiana Office of Attorney General's petitions. There were no material impacts on the results of operations, cash flows or financial position as a result of this ruling. On March 30, 2026, Duke Energy Indiana filed its Petition and Case-in-Chief for Environmental Cost Rider (ECR) 45, implementing changes directed by the Indiana Court of Appeals decision. Duke Energy Indiana anticipates the IURC will issue an ECR 45 order in the coming months.

2024 Indiana Rate Case

In April 2024, Duke Energy Indiana filed an application with the IURC for a rate increase for retail customers. The request for the rate increase was driven by $1.6 billion in investments made since the last general rate case filed in 2019 in order to reliably serve customers, improve resiliency of the system and advance energy solutions.

In connection with this rate case, a $29 million increase in a regulatory liability associated with certain employee post-retirement benefits was recorded in December 2024. An order for the rate case was issued by the IURC on January 29, 2025, and revised February 3, 2025, which authorized an ROE of 9.75%, an equity ratio of 53% and an annual revenue increase of $296 million. Based on review of these orders, Duke Energy Indiana identified an inconsistency in the calculation of operating revenues before the effect of trackers. On February 7, 2025, Duke Energy Indiana made a compliance filing in accordance with the IURC's findings in its order and addressed the identified inconsistencies. The compliance filing also clarified the annual revenue increase was approximately $385 million. On February 18, 2025, one industrial customer submitted a filing requesting the IURC to clarify its revenue allocation in these proceedings, which was denied by the commission on April 16, 2025. On February 25, 2025, the IURC approved Duke Energy Indiana’s compliance filing and new rates were implemented February 27, 2025. The industrial customer filed a notice of appeal on February 28, 2025, regarding cost of service allocation. On April 9, 2025, the IURC issued an order clarifying the intent of its January 29, 2025 order regarding the rate migration adjustment, resulting in revised rates that were effective on May 19, 2025. On May 14, 2025, the industrial customer filed a motion to dismiss its appeal, and on May 20, 2025, the Indiana Court of Appeals granted the industrial customer's motion to dismiss.

On February 18, 2026, Duke Energy Indiana submitted a second compliance filing in accordance with the IURC’s findings in its order, and the IURC approved the compliance filing on February 25, 2026. On March 20, 2026, the Industrial Group and Indiana Office of Consumer Counselor (OUCC) filed an objection to the Company’s Step 2 compliance filing. On May 27, 2026, the presiding officers denied the objection. On June 4, 2026, the OUCC, the Industrial Group and other intervenors appealed this decision to all of the IURC commissioners.

Cayuga Combined Cycle CPCN

On February 13, 2025, Duke Energy Indiana filed for a CPCN seeking approval to constructtwo 1x1 CC natural gas-fired units with a combined winter rating of 1,476 MW. The Cayuga CC Project is being constructed on the same site as the retiring Cayuga coal-fired steam units with a winter rating of 1,005 MW. The Cayuga CC Project will result in an incremental 471 MW for the Duke Energy Indiana system and will allow Duke Energy Indiana to avoid expected maintenance and environmental compliance costs needed for the coal units to continue operating. The estimated cost of the Cayuga CC Project is approximately $3.3 billion, plus actual AFUDC. Duke Energy Indiana proposed recovery of certain facility costs during construction, including AFUDC, through CWIP ratemaking via a proposed Generation Cost Tracker (GCT). Duke Energy Indiana expects CC 1 to be placed in service in 2029 and CC 2 to be placed in service in 2030. A final air permit was issued by IDEM on March 5, 2025.

On June 17, 2025, Duke Energy Indiana entered into a settlement agreement withone of the parties in this proceeding to conduct a study evaluating the feasibility of third-party operation of the Cayuga coal units. On July 11, 2025, Duke Energy Indiana entered into a settlement agreement with an additional party in this proceeding agreeing to the need of the units and addressing accounting and ratemaking components. Neither agreement altered the underlying plans in the pending CPCN application. On October 29, 2025, the IURC issued its order approving the settlement agreements, granting the CPCN and approving cost recovery through the proposed GCT. On November 26, 2025, CAC filed a notice of appeal of the IURC's order. Duke Energy Indiana filed a petition to transfer the case to the Indiana Supreme Court. The petition was granted in April 2026, with oral arguments scheduled for September 2026.

In April 2026, Duke Energy Indiana's first GCT tariff factors to recover Cayuga CC CPCN-related costs were effective. These factors will remain in place for approximately six months or until superseded by IURC-approved factors in a subsequent filing. On May 15, 2026, Duke Energy Indiana filed its second GCT tariff for approval to recover Cayuga CC CPCN-related costs. These factors are expected to be effective in the first October 2026 billing cycle and will remain in place for approximately six months or until superseded by IURC-approved factors in a subsequent filing. The estimated average cumulative retail rate impact during construction and initial in-service periods from April 2026 through May 2031 is approximately 5.6%.

2026 South Carolina Rate Case

On April 1, 2026, Piedmont filed an application with the PSCSC for a rate increase for retail customers of approximately $16 million, which represents a 6.3% increase in retail revenues. Piedmont requested an ROE of 10.8% with an equity ratio of 55.09%. The rate increase is driven by significant infrastructure upgrade investments and higher cost of capital since the last general rate case. In its application, Piedmont expressed its intent to resume operating under the South Carolina Rate Stabilization Act prospectively after completion of the rate case. The evidentiary hearing is scheduled to commence on August 20, 2026, with a final decision on or before October 1, 2026. New rates are expected to become effective October 1, 2026.

5. COMMITMENTS AND CONTINGENCIES

ENVIRONMENTAL

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

Remediation Activities

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

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

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

LITIGATION

For open litigation, unless otherwise noted, Duke Energy and the Subsidiary Registrants cannot predict the outcome or ultimate resolution of their respective matters.

NTE Carolinas II, LLC Litigation

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

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

Following completion of discovery, the Defendants filed a motion for summary judgment seeking a ruling in their favor as to some of its affirmative claims against NTE and to all of NTE’s counterclaims. On June 24, 2022, the court issued an order partially granting the Defendants' motion by dismissing NTE's counterclaims that Duke Energy Carolinas and Duke Energy Progress engaged in anti-competitive behavior in violation of state and federal statutes. In October 2022, the parties executed a settlement agreement with respect to the remaining breach of contract claims in the litigation and a Stipulation of Dismissal was filed with the court.

In November 2022, NTE filed its Notice of Appeal to the U.S. Court of Appeals for the Fourth Circuit as to the district court's summary judgment ruling on NTE's antitrust and unfair competition claims. On August 5, 2024, the U.S. Court of Appeals for the Fourth Circuit reversed the district court's grant of summary judgment and remanded the case back to the district court for further proceedings. In August 2024, the Defendants filed a petition for rehe aring, which was denied on November 26, 2024. On February 21, 2025, the Defendants filed a petition seeking review by the U.S. Supreme Court. On January 12, 2026, the U.S. Supreme Court denied the petition seeking review. In March 2026, the parties executed a settlement agreement resolving the entire case and a Stipulation of Dismissal was filed with the court. The amount of the settlement was not material in 2026. This matter is now fully resolved.

Mooresville Coal Ash Class Action Litigation

On December 20, 2024,15 plaintiffs filed a lawsuit in Iredell County, North Carolina, against Duke Energy (Parent), Duke Energy Carolinas and Duke Energy Progress (collectively “Duke Energy”) on behalf of a putative class related to alleged past and ongoing environmental contamination in the Mooresville, North Carolina, area. The lawsuit alleges that Duke Energy disposed of and sold coal ash for use as structural fill, resulting in contamination of soil, groundwater and Lake Norman. The plaintiffs further allege that Duke Energy failed to adequately remediate the contamination, continues to pollute and has negatively impacted property values. The plaintiffs seek unspecified compensatory and punitive damages, injunctive relief to prevent further contamination, remediation of contaminated areas and recovery of attorneys' fees and costs.

On July 28, 2025, the plaintiffs filed an amended complaint, which asserts claims for negligence, negligence per se, gross negligence, private nuisance, strict liability for ultra-hazardous activities and trespass. On September 11, 2025, Duke Energy filed its answer to the plaintiffs' amended complaint and a motion for judgment on the pleadings. Following a hearing on December 29, 2025, the court entered an interim order dismissing the plaintiffs' strict liability claim. On February 4, 2026, the court denied the remainder of Duke Energy's motion for judgment on the pleadings. A scheduling order has been entered in this matter, and the parties are evaluating the possibility of an early mediation.

Nuclear Compensation Class Action Litigation

On July 11, 2025, plaintiffs Leo Dorrell and John Dunn filed a putative class action lawsuit in the U.S. District Court for the District of Maryland against all U.S. commercial nuclear power operators, including Duke Energy Corporation (Parent) and Progress Energy. The plaintiffs allege that the nuclear power industry engaged in a conspiracy to suppress compensation by exchanging salary information since 2003, in violation of Section 1 of the Sherman Act. The lawsuit seeks unspecified monetary damages, including treble damages, on behalf of current and former employees in the nuclear power industry, as well as injunctive relief.

On October 15, 2025, all defendants jointly filed an omnibus motion to dismiss all claims in the complaint and Duke Energy also joined a motion filed by several defendants to dismiss for lack of personal jurisdiction. On November 5, 2025, the plaintiffs filed an amended complaint adding Duke Energy Carolinas and Duke Energy Business Services as defendants and including more factual allegations to support their complaint. Although not named as a defendant, Duke Energy Progress is accused of having participated in the alleged conspiracy. In response to the amended complaint, defendants filed an omnibus motion to dismiss on December 19, 2025. The court held oral argument on May 13, 2026, and no ruling has been issued to date.

Asbestos-related Injuries and Damages Claims

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

Duke Energy Carolinas has recognized asbestos-related reserves of $377 million at June 30, 2026, and $395 million at December 31, 2025. These reserves are classified in Other within Other Noncurrent Liabilities and Other within Current Liabilities on the Condensed Consolidated Balance Sheets. These reserves are based on Duke Energy Carolinas' best estimate for current and future asbestos claims through 2045 and are recorded on an undiscounted basis. In light of the uncertainties inherent in a longer-term forecast, management does not believe they can reasonably estimate the indemnity and medical costs that might be incurred after 2045 related to such potential claims. It is possible Duke Energy Carolinas may incur asbestos liabilities in excess of the recorded reserves.

Duke Energy Carolinas has third-party insurance to cover certain losses related to asbestos-related injuries and damages above an aggregate self-insured retention. Receivables for insurance recoveries were $556 million at June 30, 2026, and $555 million at December 31, 2025. These amounts are classified in Other within Other Noncurrent Assets and Receivables within Current Assets on the Condensed Consolidated Balance Sheets. Any future payments up to the policy limit will be reimbursed by the third-party insurance carrier. Duke Energy Carolinas is not aware of any uncertainties regarding the legal sufficiency of insurance claims. Duke Energy Carolinas believes the insurance recovery asset is probable of recovery as the insurance carrier continues to have a strong financial strength rating.

The reserve for credit losses for insurance receivables for the asbestos-related injuries and damages is $9 million as of June 30, 2026, and December 31, 2025, for both Duke Energy and Duke Energy Carolinas. The insurance receivable is evaluated based on the risk of default and the historical losses, current conditions and expected conditions around collectability. Management evaluates the risk of default annually based on payment history, credit rating and changes in the risk of default from credit agencies.

Other Litigation and Legal Proceedings

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

OTHER COMMITMENTS AND CONTINGENCIES

General

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

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

6. DEBT AND CREDIT FACILITIES

SUMMARY OF SIGNIFICANT DEBT ISSUANCES

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

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

(b)Proceeds were used to pay down short-term debt and for general company purposes.

(c)Floating interest rate debt. Proceeds were used to pay down short-term debt and for general company purposes.

(d)Proceeds were used to repay $500 million of Duke Energy Carolinas'364-day term loan facility, pay down short-term debt and for general company purposes and are expected to be used to repay $600 million of maturities due December 2026.

In June 2026, Duke Energy Kentucky priced an aggregate principal amount of $100 million senior unsecured debentures through a private placement offering. The debentures are expected to be issued on September 9, 2026, and will consist of two tranches, $50 million with a coupon of 5.79% maturing September 2033 and $50 million with a coupon of 6.13% maturing September 2038. Proceeds are expected to be used to pay down short-term debt and for general corporate purposes.

Duke Energy (Parent) Convertible Senior Notes

On April 15, 2026, Duke Energy (Parent) settled all of its outstanding 4.125% Convertible Senior Notes due April 2026 (the “Notes due 2026”) upon conversion. In accordance with the terms of the indenture and at the Company's election, Duke Energy paid approximately $1.7 billion in cash equal to the aggregate principal amount of the Notes due 2026 and issued 1.4 million shares of its common stock to settle the conversion premium, as the conversion value exceeded the principal amount of the Notes due 2026.

In March 2026, Duke Energy (Parent) completed the sale of $1.5 billion 3.000% Convertible Senior Notes due March 2029 (convertible notes). The convertible notes are senior unsecured obligations of Duke Energy, and will mature on March 15, 2029, unless earlier converted or repurchased in accordance with their terms. The convertible notes bear interest at a fixed rate of 3.000% per year, payable semiannually in arrears on March 15 and September 15 of each year, beginning on September 15, 2026. Proceeds were used to repay a portion of $1.7 billion of outstanding convertible senior notes due April 2026 and for general corporate purposes.

Prior to the close of business on the business day immediately preceding December 15, 2028, the convertible notes will be convertible at the option of the holders when the following conditions are met:

•during any calendar quarter commencing after the calendar quarter ending on June 30, 2026 (and only during such calendar quarter), if the last reported sale price of Duke Energy common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day;

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

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

On or after December 15, 2028, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders of the convertible notes may convert all or any portion of their convertible notes at their option at any time at the conversion rate then in effect, irrespective of these conditions. Duke Energy will settle conversions of the convertible notes by paying cash up to the aggregate principal amount of the convertible notes to be converted and paying or delivering, as the case may be, cash, shares of Duke Energy's common stock, $0.001 par value per share, or a combination of cash and shares of its common stock, at its election, in respect of the remainder, if any, of its conversion obligation in excess of the aggregate principal amount of the convertible notes being converted.

The conversion rate for the convertible notes is initially 6.2277 shares of Duke Energy's common stock per $1,000 principal amount of convertible notes. The initial conversion price of the convertible notes represents a premium of approximately 22.5% over the last reported sale price of Duke Energy’s common stock on the NYSE on March 9, 2026. The conversion rate and the corresponding conversion price will not be adjusted for any accrued and unpaid interest but will be subject to adjustment in some instances, such as stock splits or share combinations, certain distributions to common stockholders, or tender offers at off-market rates. The changes in the conversion rates are intended to make convertible note holders whole for changes in the fair value of Duke Energy common stock resulting from such events. Duke Energy may not redeem the convertible notes prior to the maturity date.

Duke Energy issued the convertible notes pursuant to an indenture, dated as of March 12, 2026, by and between Duke Energy and The Bank of New York Mellon Trust Company, N.A., as trustee. The terms of the convertible notes include customary fundamental change provisions that require repayment of the notes with interest upon certain events, such as a stockholder-approved plan of liquidation or if Duke Energy's common stock ceases to be listed on the NYSE.

CURRENT MATURITIES OF LONG-TERM DEBT

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

(a)Floating interest rate debt.

(b)These first mortgage bonds are classified as Current maturities of long-term debt on the Condensed Consolidated Balance Sheets based on terms of the indentures, which could require repayment in less than 12 months if exercised by the bondholders.

(c)These tax-exempt bonds are classified as Current maturities of long-term debt on the Consolidated Balance Sheets as of June 30, 2026, due to mandatory put options expiring within 12 months. Duke Energy (Parent) and Duke Energy Progress anticipate remarketing the bonds and the securities are expected to be reclassified to Long-Term Debt once successfully remarketed.

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

AVAILABLE CREDIT FACILITIES

Master Credit Facility

In March 2026, Duke Energy extended the termination date of its existing $10 billion Master Credit Facility to March 2031. The Duke Energy Registrants, excluding Progress Energy, have borrowing capacity under the Master Credit Facility up to a specified sublimit for each borrower. Duke Energy has the unilateral ability at any time to increase or decrease the borrowing sublimits of each borrower, subject to a maximum sublimit for each borrower. The amount available under the Master Credit Facility has been reduced to backstop issuances of commercial paper, certain letters of credit and variable-rate demand tax-exempt bonds that may be put to the Duke Energy Registrants at the option of the holder.

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

(a)Represents the sublimit of each borrower.

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

Term Loan Facilities

Duke Energy (Parent)

In September 2025, Duke Energy (Parent) entered into a 364-day term loan facility with commitments totaling $2 billion. As of December 31, 2025, $2.0 billion was drawn under the term loan facility, which was classified as Current maturities of long-term debt on the Condensed Consolidated Balance Sheets. Borrowings were used to pay down short-term debt and for general corporate purposes. In March 2026, Duke Energy (Parent) repaid the term loan facility.

Duke Energy Carolinas and Duke Energy Progress

In March 2026, Duke Energy Carolinas and Duke Energy Progress entered into 364-day term loan facilities with commitments totaling $1.5 billion and $300 million, respectively. During the second quarter of 2026, Duke Energy Carolinas repaid $500 million of borrowings under its facility. As of June 30, 2026, outstanding borrowings of $1 billion and $300 million under the Duke Energy Carolinas and Duke Energy Progress term loan facilities, respectively, were classified as Current maturities of long-term debt on the Condensed Consolidated Balance Sheets. The borrowings were used primarily to fund incurred fuel and storm costs, to pay down short-term debt and for general company purposes.

In August 2025, Piedmont entered into a 364-day term loan facility with commitments totaling $450 million. In September 2025, $450 million was drawn under the term loan facility, which was classified as Current maturities of long-term debt on the Condensed Consolidated Balance Sheets as of December 31, 2025. Proceeds were used to repay $150 million of maturities due September 2025, to pay down short-term debt and for general corporate purposes. In March 2026, Piedmont repaid the term loan facility.

7. GOODWILL

Duke Energy's Goodwill balance of $19.0 billion is allocated $17.4 billion to EU&I and $1.6 billion to GU&I on Duke Energy's Condensed Consolidated Balance Sheets at June 30, 2026, and December 31, 2025. There areno accumulated impairment charges.

On July 27, 2025, Piedmont entered into a purchase agreement for the sale of Piedmont's Tennessee business. In the third quarter of 2025, $294 million of Duke Energy’s Goodwill balance that was allocated to the Piedmont Tennessee Disposal Group was reclassified to noncurrent assets held for sale on Duke Energy's Condensed Consolidated Balance Sheets. Piedmont closed on the sale on March 31, 2026. See Note 2 for additional information.

Duke Energy Ohio's Goodwill balance of $920 million, allocated $596 million to EU&I and $324 million to GU&I, is presented net of accumulated impairment charges of $216 million on the Condensed Consolidated Balance Sheets at June 30, 2026, and December 31, 2025.

Progress Energy

Progress Energy's Goodwill is included in the EU&I segment and there areno accumulated impairment charges.

Piedmont's Goodwill is included in the GU&I segment and there areno accumulated impairment charges.

On July 27, 2025, Piedmont entered into a purchase agreement for the sale of Piedmont's Tennessee business. In the third quarter of 2025, $10 million of Piedmont’s Goodwill balance that was allocated to the Piedmont Tennessee Disposal Group was reclassified to noncurrent assets held for sale on Piedmont's Condensed Consolidated Balance Sheets. Piedmont closed on the sale on March 31, 2026. See Note 2 for additional information.

8. RELATED PARTY TRANSACTIONS

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

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

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

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

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

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

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

Intercompany Income Taxes

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

9. DERIVATIVES AND HEDGING

The Duke Energy Registrants use commodity, interest rate and foreign currency contracts to manage commodity price risk, interest rate risk and foreign currency exchange rate risk. The primary use of commodity derivatives is to hedge the generation portfolio against changes in the prices of electricity and natural gas. Piedmont enters into natural gas supply contracts to provide diversification, reliability and natural gas cost benefits to its customers. Interest rate derivatives are used to manage interest rate risk associated with borrowings. Foreign currency derivatives are used to manage risk related to foreign currency exchange rates on certain issuancesof debt.

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

INTEREST RATE RISK

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

Cash Flow Hedges

For a derivative designated as hedging the exposure to variable cash flows of a future transaction, referred to as a cash flow hedge, the effective portion of the derivative's gain or loss is initially reported as a component of other comprehensive income and subsequently reclassified into earnings once the future transaction impacts earnings. Amounts for interest rate contracts are reclassified to earnings as interest expense over the term of the related debt. Gains and losses reclassified out of accumulated other comprehensive income (loss) for the three and six months ended June 30, 2026, and 2025, were not material. Duke Energy's interest rate derivatives designated as hedges include forward-starting interest rate swaps not accounted for under regulatory accounting.

Undesignated Contracts

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

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

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

COMMODITY PRICE RISK

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

Cash Flow Hedges

For derivatives designated as hedging the exposure to variable cash flows of a future transaction, referred to as a cash flow hedge, the derivative's gain or loss is initially reported as a component of other comprehensive income and subsequently reclassified into earnings once the future transaction impacts earnings. Gains and losses reclassified out of accumulated other comprehensive income (loss) for the three and six months ended June 30, 2026, and 2025, were not material. Duke Energy’s commodity derivatives designated as hedges include fixed-price energy futures at Duke Energy Ohio.

Undesignated Contracts

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

Volumes

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

FOREIGN CURRENCY RISK

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

Fair Value Hedges

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

The following table shows Duke Energy's outstanding derivatives related to foreign currency risk at June 30, 2026.

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

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

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

OFFSETTING ASSETS AND LIABILITIES

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

OBJECTIVE CREDIT CONTINGENT FEATURES

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

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

10. INVESTMENTS IN DEBT AND EQUITY SECURITIES

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

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

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

Investment Trusts

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

Other AFS Securities

Unrealized gains and losses on all other AFS securities are included in other comprehensive income until realized, unless it is determined the carrying value of an investment has a credit loss. The Duke Energy Registrants analyze all investment holdings each reporting period to determine whether a decline in fair value is related to a credit loss. If a credit loss exists, the unrealized credit loss is included in earnings. There were no material credit losses as of June 30, 2026, and December 31, 2025.

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

(a)During the six months ended June 30, 2026, and the year ended December 31, 2025, Duke Energy Florida received reimbursements from the NDTF for costs related to ongoing decommissioning activity of Crystal River Unit 3.

Realized gains and losses, which were determined on a specific identification basis, from sales of FV-NI and AFS securities for the three and six months ended June 30, 2026, and 2025, were immaterial.

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

Realized gains and losses, which were determined on a specific identification basis, from sales of FV-NI and AFS securities for the three and six months ended June 30, 2026, and 2025, were immaterial.

DEBT SECURITY MATURITIES

The table below summarizes the maturity date for debt securities.

11. FAIR VALUE MEASUREMENTS

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

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

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

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

Investments in equity securities

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

Investments in debt securities

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

Commodity derivatives

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

Interest rate derivatives

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

Foreign currency derivatives

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

Other fair value considerations

See Note 12 in Duke Energy's Annual Report on Form 10-K for the year ended December 31, 2025, for a discussion of the valuation of goodwill and intangible assets.

The following tables provide recorded balances for assets and liabilities measured at fair value on a recurring basis on the Condensed Consolidated Balance Sheets. Derivative amounts in the tables below for all Duke Energy Registrants exclude cash collateral, which is disclosed in Note 9. See Note 10 for additional information related to investments by major security type for the Duke Energy Registrants.

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

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

DUKE ENERGY OHIO

The recorded balances for assets and liabilities measured at fair value on a recurring basis on the Condensed Consolidated Balance Sheets were not material at June 30, 2026, and December 31, 2025.

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

PIEDMONT

QUANTITATIVE INFORMATION ABOUT UNOBSERVABLE INPUTS

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

OTHER FAIR VALUE DISCLOSURES

The fair value and book value of long-term debt, including current maturities, is summarized in the following table. Estimates determined are not necessarily indicative of amounts that could have been settled in current markets. Fair value of long-term debt uses Level 2 measurements.

(a)Book value of long-term debt includes$879 million and $921 millionat June 30, 2026, and December 31, 2025, respectively, of net unamortized debt discount and premium of purchase accounting adjustments related to the mergers with Progress Energy and Piedmont that are excluded from fair value of long-term debt.

At both June 30, 2026, and December 31, 2025, fair value of cash and cash equivalents, accounts and notes receivable, accounts payable, notes payable and commercial paper and nonrecourse notes payable of VIEs are not materially different from their carrying amounts because of the short-term nature of these instruments and/or because the stated rates approximate market rates.

12. VARIABLE INTEREST ENTITIES

CONSOLIDATED VIEs

The obligations of the consolidated VIEs discussed in the following paragraphs are nonrecourse to the Duke Energy Registrants. The registrants have no requirement to provide liquidity to purchase assets of or guarantee performance of these VIEs unless noted in the following paragraphs.

No financial support was provided to any of the consolidated VIEs during the six months ended June 30, 2026, and the year ended December 31, 2025, or is expected to be provided in the future that was not previously contractually required.

Nuclear Asset-Recovery Bonds

Duke Energy Florida Project Finance, LLC (DEFPF) is a bankruptcy remote, wholly owned special purpose subsidiary of Duke Energy Florida. DEFPF was formed in 2016 for the sole purpose of issuing nuclear asset-recovery bonds to finance Duke Energy Florida's unrecovered regulatory asset related to Crystal River Unit 3.

DEFPF issued senior secured bonds and used the proceeds to acquire nuclear asset-recovery property from Duke Energy Florida. The nuclear asset-recovery property acquired includes the right to impose, bill, collect and adjust a non-bypassable nuclear asset-recovery charge from all Duke Energy Florida retail customers until the bonds are paid in full and all financing costs have been recovered. The nuclear asset-recovery bonds are secured by the nuclear asset-recovery property and cash collections from the nuclear asset-recovery charges are the sole source of funds to satisfy the debt obligation. The bondholders have no recourse to Duke Energy Florida.

DEFPF is considered a VIE primarily because the equity capitalization is insufficient to support its operations. Duke Energy Florida has the power to direct the significant activities of the VIE as described above and therefore Duke Energy Florida is considered the primary beneficiary and consolidates DEFPF.

The following table summarizes the impact of DEFPF on Duke Energy Florida's Condensed Consolidated Balance Sheets.

Storm Recovery Bonds

Duke Energy Carolinas NC Storm Funding, LLC (DECNCSF), Duke Energy Carolinas NC Storm Funding II, LLC (DECNCSFII), Duke Energy Carolinas SC Storm Funding, LLC (DECSCSF), Duke Energy Progress NC Storm Funding, LLC (DEPNCSF), Duke Energy Progress NC Storm Funding II, LLC (DEPNCSFII) and Duke Energy Progress SC Storm Funding, LLC (DEPSCSF) are bankruptcy remote, wholly owned special purpose subsidiaries of Duke Energy Carolinas and Duke Energy Progress. DECNCSF and DEPNCSF were formed in 2021, DEPSCSF was formed in 2024, and DECNCSFII, DECSCSF and DEPNCSFII were formed in 2025, all for the sole purpose of issuing storm recovery bonds to finance certain of Duke Energy Carolinas’ and Duke Energy Progress’ unrecovered regulatory assets related to storm costs incurred in North Carolina and South Carolina.

These subsidiaries issued senior secured bonds and used the proceeds to acquire storm recovery property from Duke Energy Carolinas and Duke Energy Progress. The storm recovery property acquired includes the right to impose, bill, collect and adjust a non-bypassable charge from all Duke Energy Carolinas’ and Duke Energy Progress’ North Carolina and South Carolina retail customers until the bonds are paid in full and all financing costs have been recovered. The storm recovery bonds are secured by the storm recovery property and cash collections from the storm recovery charges are the sole source of funds to satisfy the debt obligation. The bondholders have no recourse to Duke Energy Carolinas or Duke Energy Progress. These entities are considered VIEs primarily because their equity capitalization is insufficient to support their operations. Duke Energy Carolinas and Duke Energy Progress have the power to direct the significant activities of the VIEs as described above and therefore Duke Energy Carolinas and Duke Energy Progress are considered the primary beneficiaries. Duke Energy Carolinas consolidates DECNCSF, DECNCSFII and DECSCSF and Duke Energy Progress consolidates DEPNCSF, DEPNCSFII and DEPSCSF.

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

Procurement Companies

Duke Energy Florida Purchasing Company, LLC (DEF ProCo) and Duke Energy Indiana Purchasing Company, LLC (DEI ProCo) are wholly owned special purpose subsidiaries and the primary procurement agents for equipment, materials and supplies of Duke Energy Florida (beginning in 2023) and Duke Energy Indiana (beginning in 2026). The ProCos interact with third-party suppliers on Duke Energy Florida’s and Duke Energy Indiana's behalf with credit and risk support provided by Duke Energy Florida and Duke Energy Indiana. Both ProCos are qualified resellers under their respective state's tax laws and convey acquired assets to the utilities through leases on each acquired asset.

These entities are considered VIEs primarily because their equity capitalization is insufficient to support their operations. Duke Energy Florida and Duke Energy Indiana have the power to direct the significant activities of the VIEs as described above and therefore Duke Energy Florida and Duke Energy Indiana are considered the primary beneficiaries and consolidate each respective procurement company.

The following table summarizes the impact of these VIEs on Duke Energy Florida's and Duke Energy Indiana's Consolidated Balance Sheets.

NON-CONSOLIDATED VIEs

Natural Gas Investments

Duke Energy has investments in various joint ventures, including transmission pipeline projects. These entities are considered VIEs due to having insufficient equity to finance their own activities without subordinated financial support. Duke Energy does not have the power to direct the activities that most significantly impact the economic performance, the obligation to absorb losses or the right to receive benefits of these VIEs and therefore does not consolidate these entities.

Non-consolidated VIEs are immaterial on the Condensed Consolidated Balance Sheets and the Duke Energy Registrants are not aware of any situations where the maximum exposure to loss significantly exceeds the carrying values.

13. REVENUE

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

Electric Utilities and Infrastructure

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

The majority of wholesale revenues are full requirements contracts where the customers purchase the substantial majority of their energy needs and do not have a fixed quantity of contractually required energy or capacity. As such, related forecasted revenues are considered optional purchases. Supplemental requirements contracts that include contracted blocks of energy and capacity at contractually fixed prices have the following estimated remaining performance obligations as of June 30, 2026:

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

Gas Utilities and Infrastructure

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

Fixed-capacity payments under long-term contracts for the GU&I segment include minimum margin contracts and supply arrangements with municipalities and power generation facilities. Revenues for related sales are recognized monthly as natural gas is delivered and stand-ready service is provided, consistent with invoiced amounts and unbilled estimates. Estimated remaining performance obligations as of June 30, 2026, are as follows:

Other

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

Disaggregated Revenues

Disaggregated revenues are presented as follows: