Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following combined Management’s Discussion and Analysis of Financial Condition and Results of Operations is separately filed by Duke Energy and Duke Energy Carolinas, Progress Energy, Duke Energy Progress, Duke Energy Florida, Duke Energy Ohio, Duke Energy Indiana and Piedmont. However, none of the registrants make any representation as to information related solely to Duke Energy or the Subsidiary Registrants of Duke Energy other than itself.

DUKE ENERGY

Duke Energy is an energy company headquartered in Charlotte, North Carolina. Duke Energy operates in the U.S. primarily through its subsidiaries, Duke Energy Carolinas, Duke Energy Progress, Duke Energy Florida, Duke Energy Ohio, Duke Energy Indiana and Piedmont. When discussing Duke Energy’s consolidated financial information, it necessarily includes the results of the Subsidiary Registrants, which along with Duke Energy are collectively referred to as the Duke Energy Registrants.

Management’s Discussion and Analysis should be read in conjunction with the Condensed Consolidated Financial Statements and Notes for the six months ended June 30, 2022, and with Duke Energy’s Annual Report on Form 10-K for the year ended December 31, 2021.

Executive Overview

Advancing Our Clean Energy Transformation

During the second quarter of 2022, we continued to execute on our clean energy transformation, delivering strong, sustainable value for shareholders, customers, communities and employees.

• In June 2022, Duke Energy Florida completed The Fort Green Renewable Energy Center, the first of 10 solar sites, totaling 750 MW, that are part of the Duke Energy Florida's new community solar program, Clean Energy Connection. Through the program, Duke Energy Florida customers can subscribe to solar power and earn credits toward their electricity bills without having to install or maintain their own equipment.

• In May 2022, we were awarded one of two North Carolina offshore wind lease sites held by the Bureau of Ocean Energy Management. The approximately 55,000-acre site in the Atlantic Ocean east of Wilmington could support up to 1.6 gigawatts of potential offshore wind energy, enough to power nearly 375,000 homes. Securing this lease creates optionality for future offshore wind if the NCUC determines it's part of the least cost path to achieve North Carolina's interim and long-term carbon reduction goals.

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

• In June 2022, Duke Energy Ohio filed an application with the PUCO for a regulatory review of our natural gas base rates. Since our last Ohio natural gas rate case, which we filed in 2012, Duke Energy Ohio has invested $1.4 billion in a variety of capital investments, including the installation of new infrastructure to enable a robust system for customers.

• In June 2022, bipartisan legislation was signed into law that gives the PSCSC authority to approve securitization of storm costs in South Carolina. This is an important tool to provide our customers significant savings while helping our company recover storm restoration costs.

• In June 2022, the IURC approved Duke Energy Indiana's TDSIC 2.0 plan in its entirety, with no modifications. This six-year plan will continue to build upon electric grid modernization efforts to improve the reliability and resilience of the statewide network of power lines and infrastructure to improve service to more than 870,000 customers.

• In May 2022, Duke Energy Carolinas and Duke Energy Progress filed a proposed Carbon Plan with the NCUC. In keeping with the framework of HB 951, the proposed plan presents two pathways consisting of several different portfolios and includes a path to achieve 70% carbon dioxide emissions reduction by 2030, while offering regulators multiple options that balance affordability and reliability for customers. All portfolios plan for the retirement of all remaining coal generation resources by the end of 2035 and include significant expansion of zero-carbon resources, such as renewable technologies including solar, onshore and offshore wind, greater integration of battery and pumped-hydro energy storage, expanded energy efficiency and demand response and the deployment of new zero-emitting load-following resources such as new small modular nuclear resources as well as hydrogen solutions in later years to achieve carbon neutrality from electric generating facilities by 2050.

Matters Impacting Future Results

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

Regulatory Matters

Coal Ash Costs

Future spending of coal ash costs, including amounts recorded for depreciation and liability accretion, is expected to continue to be deferred and recovered in future rate cases or rider filings. The majority of spend is expected to occur over the next 15-20 years.

MD&A			MATTERS IMPACTING FUTURE RESULTS

Duke Energy Indiana has interpreted the CCR rule to identify the coal ash basin sites impacted and has assessed the amounts of coal ash subject to the rule and a method of compliance. In 2020, the Hoosier Environmental Council filed a petition challenging the Indiana Department of Environmental Management's (IDEM) partial approval of five of Duke Energy Indiana’s ash pond site closure plans at Gallagher Station. The petition does not challenge the other basin closures approved by IDEM at other Indiana stations. Interpretation of the requirements of the CCR rule is subject to further legal challenges and regulatory approvals, which could result in additional ash basin closure requirements, higher costs of compliance and greater AROs. Additionally, Duke Energy Indiana has retired facilities that are not subject to the CCR rule. Duke Energy Indiana may incur costs at these facilities to comply with environmental regulations or to mitigate risks associated with on-site storage of coal ash. In January 2022, Duke Energy Indiana received a letter from the EPA regarding interpretation of the CCR rule. See Note 4 to the Condensed Consolidated Financial Statements, "Commitments and Contingencies" for more information.

Commercial Renewables

On August 4, 2022 Duke Energy announced a strategic review of the Commercial Renewables business segment. The review remains in the preliminary stage and there have been no binding or non-binding offers requested or submitted. Duke Energy can provide no assurance that this process will result in a transaction and there is no specific timeline for execution of a potential transaction. If the potential sale were to progress it could result in classification of the Commercial Renewables segment as assets held for sale and as discontinued operations. If Duke Energy is unable to recover its book value of these assets through a sale, it could result in an impairment.

Duke Energy continues to monitor recoverability of renewable merchant plants located in the ERCOT West market and in the PJM West market, due to fluctuating market pricing and long-term forecasted energy prices. Based on the most recent recoverability test, the carrying value for the assets under review continues to be supported by the expected cash flows. A decline in energy market pricing or other factors unfavorably impacting the economics would likely result in a future impairment. Impairment of these assets could result in adverse impacts. For additional information, see Note 2 to the Condensed Consolidated Financial Statements, "Business Segments."

In February 2021, a severe winter storm impacted certain Commercial Renewables assets in Texas. Extreme weather conditions limited the ability for these solar and wind facilities to generate and sell electricity into the ERCOT market. Duke Energy has been named in multiple lawsuits arising out of this winter storm. For more information, see Note 4 to the Condensed Consolidated Financial Statements, "Commitments and Contingencies."

Supply Chain

Duke Energy is monitoring supply chain disruptions, which could impact the timing of in service or economics of projects and may result in adverse impacts on operating results.

The company is also monitoring the impacts on future financial results and clean energy goals due to the availability of solar panels as a result of the U.S. Department of Commerce investigation into the potential circumvention of anti-dumping and countervailing duties by certain Chinese companies. In June 2022, in response to the uncertainty of solar supplies resulting from the investigation, a 24-month tariff exemption for solar panels from four Southeast Asian nations was declared.

Results of Operations

Non-GAAP Measures

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

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

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

• Regulatory Matters represents the net impact of charges related to the 2022 Indiana Supreme Court ruling on coal ash.

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

• Workplace and workforce realignment represents costs attributable to business transformation, including long-term real estate strategy changes and workforce realignment.

• Gas Pipeline Investments represents additional exit obligations related to ACP.

Three Months Ended June 30, 2022, as compared to June 30, 2021

GAAP reported EPS was $1.14 for the second quarter of 2022 compared to $0.96 in the second quarter of 2021. In addition to the drivers below, GAAP reported EPS increased primarily due to workplace and workforce realignment costs in the prior year.

MD&A			DUKE ENERGY

As discussed above, management also evaluates financial performance based on adjusted EPS. Duke Energy’s second quarter 2022 adjusted EPS was $1.14 compared to $1.15 for the second quarter of 2021. The decrease in adjusted EPS was primarily due to higher operation and maintenance expense due to plant outage timing, higher interest expense and the impact of GIC minority interest, partially offset by favorable weather, volumes and positive rate case contributions.

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

			Three Months Ended June 30,
			2022												2021
(in millions, except per share amounts)			Earnings						EPS						Earnings						EPS
GAAP Reported Earnings/GAAP Reported EPS			$	893					$	1.14					$	751					$	0.96
Adjustments:
Regulatory Matters(a)			(16)						(0.02)						—						—
Mark-to-Market(b)			16						0.02						—						—
Workplace and Workforce Realignment(c)			—						—						135						0.18
Gas Pipeline Investments(d)			—						—						12						0.01
Adjusted Earnings/Adjusted EPS			$	893					$	1.14					$	898					$	1.15

(a)Net of $2 million in noncontrolling interests.

(b)Net of tax benefit of $5 million.

(c)Net of tax benefit of $40 million.

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

Six Months Ended June 30, 2022, as compared to June 30, 2021

GAAP Reported EPS was $2.22 for the six months ended June 30, 2022, compared to $2.21 for the six months ended June 30, 2021. In addition to the drivers below, GAAP reported EPS increased due to workplace and workforce realignment costs in the prior year, partially offset by the net impact of charges related to the 2022 Indiana Supreme Court ruling on coal ash.

As discussed above, management also evaluates financial performance based on adjusted EPS. Duke Energy’s adjusted EPS was $2.45 for the six months ended June 30, 2022, compared to $2.41 for the six months ended June 30, 2021. The increase in adjusted EPS was primarily due to higher volumes, positive rate case contributions and favorable weather, partially offset by higher operations and maintenance expense, including storm costs, higher interest expense, the impact of GIC minority interest sale and lower returns on investments.

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

			Six Months Ended June 30,
			2022												2021
(in millions, except per share amounts)			Earnings						EPS						Earnings						EPS
GAAP Reported Earnings/GAAP Reported EPS			$	1,711					$	2.22					$	1,704					$	2.21
Adjustments:
Regulatory Matters(a)			157						0.21						—						—
Mark-to-Market(b)			16						0.02						—						—
Workplace and Workforce Realignment(c)			—						—						135						0.18
Gas Pipeline Investments(d)			—						—						17						0.02
Adjusted Earnings/Adjusted EPS			$	1,884					$	2.45					$	1,856					$	2.41

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

(b)Net of tax benefit of $5 million.

(c)Net of tax benefit of $40 million.

(d)Net of tax benefit of $5 million.

SEGMENT RESULTS

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

Duke Energy's segment structure includes the following segments: Electric Utilities and Infrastructure, Gas Utilities and Infrastructure and Commercial Renewables. The remainder of Duke Energy’s operations is presented as Other. See Note 2 to the Condensed Consolidated Financial Statements, “Business Segments,” for additional information on Duke Energy’s segment structure.

MD&A			SEGMENT RESULTS — ELECTRIC UTILITIES AND INFRASTRUCTURE

Electric Utilities and Infrastructure

			Three Months Ended June 30,																		Six Months Ended June 30,
(in millions)			2022						2021						Variance						2022						2021						Variance
Operating Revenues			$	6,135					$	5,335					$	800					$	12,137					$	10,616					$	1,521
Operating Expenses
Fuel used in electric generation and purchased power			1,991						1,434						557						3,828						2,896						932
Operation, maintenance and other			1,328						1,262						66						2,754						2,544						210
Depreciation and amortization			1,110						1,013						97						2,241						2,070						171
Property and other taxes			331						308						23						668						619						49
Impairment of assets and other charges			(8)						1						(9)						206						1						205
Total operating expenses			4,752						4,018						734						9,697						8,130						1,567
Gains on Sales of Other Assets and Other, net			3						2						1						5						2						3
Operating Income			1,386						1,319						67						2,445						2,488						(43)
Other Income and Expenses, net			153						97						56						267						201						66
Interest Expense			391						361						30						767						701						66
Income Before Income Taxes			1,148						1,055						93						1,945						1,988						(43)
Income Tax Expense			158						120						38						241						233						8
Less: Income Attributable to Noncontrolling Interest			16						—						16						7						—						7
Segment Income			$	974					$	935					$	39					$	1,697					$	1,755					$	(58)
Duke Energy Carolinas GWh sales			22,022						20,362						1,660						44,571						42,324						2,247
Duke Energy Progress GWh sales			16,915						15,799						1,116						34,884						32,336						2,548
Duke Energy Florida GWh sales			12,340						11,194						1,146						22,242						19,748						2,494
Duke Energy Ohio GWh sales			5,564						5,738						(174)						11,561						11,742						(181)
Duke Energy Indiana GWh sales			7,644						7,366						278						15,594						15,092						502
Total Electric Utilities and Infrastructure GWh sales			64,485						60,459						4,026						128,852						121,242						7,610
Net proportional MW capacity in operation																					49,459						49,749						(290)

Three Months Ended June 30, 2022, as compared to June 30, 2021

Electric Utilities and Infrastructure’s higher segment income is due to favorable weather, favorable retail sales volumes, and a favorable spent nuclear fuel storage settlement with the Department of Energy, partially offset by higher depreciation. The following is a detailed discussion of the variance drivers by line item.

Operating Revenues. The variance was driven primarily by:

• a $459 million increase in fuel revenues primarily due to higher fuel prices and retail sales volumes;

• a $108 million increase in retail base rate pricing due to general rate cases in North Carolina, net of rider impacts as well as multiyear rate adjustments in Florida;

• a $91 million increase in retail sales due to favorable weather in the current year;

• a $47 million increase in wholesale revenues primarily due to higher capacity volumes; and

• a $28 million increase in weather-normal retail sales volumes.

Operating Expenses. The variance was driven primarily by:

• a $557 million increase in fuel used in electric generation and purchased power due to higher fuel prices and volumes from customer demand;

• a $97 million increase in depreciation and amortization primarily due to higher plant in service and resolution of prior year rate cases;

• a $66 million increase in operation, maintenance and other primarily driven by higher outage and maintenance costs; and

• a $23 million increase in property and other taxes primarily due to higher property taxes as well as higher revenue related taxes.

Other Income and Expenses, net. The increase is primarily due to a 2022 settlement with the Department of Energy over spent nuclear fuel storage and higher AFUDC equity.

Interest Expense. The variance was primarily driven by interest expense on excess deferred tax liabilities and higher outstanding debt.

MD&A			SEGMENT RESULTS — ELECTRIC UTILITIES AND INFRASTRUCTURE

Income Tax Expense. The increase in tax expense was primarily due to an increase in pretax income and a decrease in the amortization of excess deferred taxes. The ETRs for the three months ended June 30, 2022, and 2021, were 13.8% and 11.4%, respectively. The increase in the ETR was primarily due to a decrease in the amortization of excess deferred taxes.

Six Months Ended June 30, 2022, as compared to June 30, 2021

Electric Utilities and Infrastructure’s lower segment income is due to the Indiana Supreme Court ruling on recovery of certain coal ash costs and higher storm costs, partially offset by higher retail sales volumes. The following is a detailed discussion of the variance drivers by line item.

Operating Revenues. The variance was driven primarily by:

• a $759 million increase in fuel revenues primarily due to higher fuel prices and retail sales volumes;

• a $271 million increase in weather-normal retail sales volumes;

• a $234 million increase in retail base rate pricing due to general rate cases in North Carolina, net of rider impacts as well as multiyear rate adjustments in Florida;

• an $82 million increase in retail sales due to favorable weather compared to prior year;

• an $81 million increase in rider revenues primarily due to higher sales volumes; and

• a $77 million increase in wholesale revenues primarily due to higher capacity volumes.

Partially offset by

• a $53 million decrease due to the Indiana Supreme Court ruling on recovery of certain coal ash costs.

Operating Expenses. The variance was driven primarily by:

• a $932 million increase in fuel used in electric generation and purchased power due to higher fuel prices and volumes from customer demand;

• a $210 million increase in operation, maintenance and other primarily driven by higher storm costs and higher outage and maintenance costs;

• a $205 million increase in impairment of assets and other charges primarily due to the Indiana Supreme Court ruling on recovery of certain coal ash costs;

• a $171 million increase in depreciation and amortization primarily due to higher plant in service and resolution of prior year rate cases, partially offset by lower depreciation related to the extension of the lives of nuclear facilities; and

• a $49 million increase in property and other taxes primarily due to higher property taxes as well as higher revenue related taxes.

Other Income and Expenses, net. The increase is primarily due to a 2022 settlement with the Department of Energy over spent nuclear fuel storage and higher AFUDC equity.

Interest Expense. The variance was primarily driven by interest expense on excess deferred tax liabilities and higher outstanding debt.

Income Tax Expense. The increase in tax expense was primarily due to a decrease in the amortization of excess deferred taxes, partially offset by a decrease in pretax income. The ETRs for the six months ended June 30, 2022, and 2021, were 12.4% and 11.7%, respectively. The increase in the ETR was primarily due to a decrease in the amortization of excess deferred taxes.

MD&A			SEGMENT RESULTS — GAS UTILITIES AND INFRASTRUCTURE

Gas Utilities and Infrastructure

			Three Months Ended June 30,																		Six Months Ended June 30,
(in millions)			2022						2021						Variance						2022						2021						Variance
Operating Revenues			$	453					$	327					$	126					$	1,485					$	1,102					$	383
Operating Expenses
Cost of natural gas			189						79						110						670						355						315
Operation, maintenance and other			113						98						15						295						200						95
Depreciation and amortization			82						74						8						161						142						19
Property and other taxes			33						27						6						74						62						12
Total operating expenses			417						278						139						1,200						759						441
Gains on Sales of Other Assets and Other, net			4						—						4						4						—						4
Operating Income			40						49						(9)						289						343						(54)
Other Income and Expenses, Net			19						10						9						36						27						9
Interest Expense			42						35						7						82						68						14
Income Before Income Taxes			17						24						(7)						243						302						(59)
Income Tax (Benefit) Expense			(2)						7						(9)						(30)						40						(70)
Segment Income			$	19					$	17					$	2					$	273					$	262					$	11
Piedmont LDC throughput (dekatherms)			126,530,274						106,034,615						20,495,659						306,717,375						255,661,197						51,056,178
Duke Energy Midwest LDC throughput (Mcf)			16,531,986						14,842,906						1,689,080						53,762,623						51,951,909						1,810,714

Three Months Ended June 30, 2022, as compared to June 30, 2021

Gas Utilities and Infrastructure’s results were impacted primarily by margin growth and certain favorable tax credits, partially offset by higher operation and maintenance costs. The following is a detailed discussion of the variance drivers by line item.

Operating Revenues. The variance was driven primarily by:

• a $110 million increase due to higher natural gas costs passed through to customers and increased off-system sales natural gas costs; and

• a $7 million increase due to base rate increases.

Operating Expenses. The variance was driven primarily by:

• a $110 million increase due to higher natural gas costs passed through to customers and increased off-system sales natural gas costs; and

• a $15 million increase in operations, maintenance and other primarily due to higher costs for natural gas pipeline safety and integrity work, labor and benefits, customer repair plan program, and material and security purchases.

Income Tax Benefit. The decrease in tax expense was primarily due to certain favorable tax credits and an increase in the amortization of excess deferred taxes. The ETRs for the three months ended June 30, 2022, and 2021, were (11.8)% and 29.2%, respectively. The decrease in the ETR was primarily due to certain favorable tax credits and an increase in the amortization of excess deferred taxes.

Six Months Ended June 30, 2022, as compared to June 30, 2021

Gas Utilities and Infrastructure’s results were impacted primarily by margin growth partially offset by higher operation and maintenance costs. The following is a detailed discussion of the variance drivers by line item.

Operating Revenues. The variance was driven primarily by:

• a $315 million increase due to higher natural gas costs passed through to customers and increased off-system sales natural gas costs, partially offset by lower residential volumes;

• a $41 million increase due to base rate increases;

• a $15 million increase due to rider revenues related to Ohio Capital Expenditure Program (CEP); and

• a $7 million increase due to customer growth.

Partially offset by:

• a $15 million decrease due to the MGP settlement.

MD&A			SEGMENT RESULTS — GAS UTILITIES AND INFRASTRUCTURE

Operating Expenses. The variance was driven primarily by:

• a $315 million increase due to higher natural gas costs passed through to customers and increased off-system sales natural gas costs, partially offset by lower residential volumes;

• a $95 million increase in operations, maintenance and other primarily due to the MGP settlement and higher costs for natural gas pipeline safety and integrity work, labor and benefits, customer repair plan program, and material and security purchases;

• a $19 million increase in depreciation and amortization due to additional plant in service and lower CEP deferrals; and

• a $12 million increase in property and other taxes due to lower CEP deferrals.

Interest Expense. The increase was primarily due to lower AFUDC debt income and higher outstanding debt.

Income Tax Benefit. The decrease in tax expense was primarily due to an increase in the amortization of excess deferred taxes related to the Ohio MGP Settlement and a decrease in pretax income. The ETRs for the six months ended June 30, 2022, and 2021, were (12.3)% and 13.2%, respectively. The decrease in the ETR was primarily due to an increase in the amortization of excess deferred taxes related to the Ohio MGP Settlement.

Commercial Renewables

			Three Months Ended June 30,																		Six Months Ended June 30,
(in millions)			2022						2021						Variance						2022						2021						Variance
Operating Revenues			$	121					$	119					$	2					$	242					$	238					$	4
Operating Expenses
Operation, maintenance and other			82						78						4						164						150						14
Depreciation and amortization			60						56						4						120						109						11
Property and other taxes			10						9						1						20						18						2
Total operating expenses			152						143						9						304						277						27
Losses on Sales of Other Assets and Other, net			—						—						—						(1)						—						(1)
Operating Loss			(31)						(24)						(7)						(63)						(39)						(24)
Other Income and Expenses, net			—						3						(3)						—						(22)						22
Interest Expense			19						20						(1)						37						33						4
Loss Before Income Taxes			(50)						(41)						(9)						(100)						(94)						(6)
Income Tax Benefit			(36)						(21)						(15)						(69)						(50)						(19)
Add: Loss Attributable to Noncontrolling Interests			44						67						(23)						72						118						(46)
Segment Income			$	30					$	47					$	(17)					$	41					$	74					$	(33)
Renewable plant production, GWh			3,430						2,787						643						6,418						5,375						1,043
Net proportional MW capacity in operation(a)																					4,759						4,474						285

(a)Certain projects are included in tax equity structures where investors have differing interests in the project's economic attributes. One hundred percent of the tax equity project's capacity is included in the table above.

Three Months Ended June 30, 2022, as compared to June 30, 2021

Commercial Renewables' results were unfavorable to prior year primarily driven by fewer project investments financed by tax equity being placed into service in the current year and higher operating expenses from projects placed in service since the prior year.

Operating Expenses. The variance was primarily driven by an $11 million increase for higher operating expenses, depreciation, property tax expense, and other development costs from the growth of new projects, partially offset by $2 million decrease for lower operating expenses attributed to maintenance and other operating expenses.

Income Tax Benefit. The increase in the tax benefit was primarily due to an increase in production tax credits generated and a decrease in taxes associated with tax equity investments.

Loss Attributable to Noncontrolling Interests. The variance was driven by a decrease for fewer projects placed in service financed with tax equity in the current year and a net decrease in losses allocated to tax equity members from existing tax equity structures.

Six Months Ended June 30, 2022, as compared to June 30, 2021

Commercial Renewables' results were unfavorable primarily driven by fewer project investments financed by tax equity being placed into service in the current year and higher operating expenses from projects placed in service since the prior year offset by the impacts for losses experienced in the prior year from Texas Storm Uri.

Operating Expenses. The variance was primarily driven by an increase for higher operating expenses, depreciation, property tax expense and other development costs from the growth of new projects.

PART I

Other Income and Expenses, net. The increase was primarily due to $29 million of losses experienced in the prior year from Texas Storm Uri offset by a decrease in equity earnings.

Income Tax Benefit. The increase in the tax benefit was primarily due to a decrease in taxes associated with tax equity investments and an increase in production tax credits generated.

Loss Attributable to Noncontrolling Interests. The variance was driven by a $34 million decrease for fewer projects placed in service financed with tax equity in the current year and a $12 million net decrease in losses allocated to tax equity members from existing tax equity structures offset by losses experienced in the prior year from Texas Storm Uri.

Other

			Three Months Ended June 30,																		Six Months Ended June 30,
(in millions)			2022						2021						Variance						2022						2021						Variance
Operating Revenues			$	30					$	27					$	3					$	60					$	53					$	7
Operating Expenses			16						208						(192)						49						236						(187)
Gains on Sales of Other Assets and Other, net			—						—						—						1						—						1
Operating Income (Loss)			14						(181)						195						12						(183)						195
Other Income and Expenses, net			(7)						32						(39)						(13)						53						(66)
Interest Expense			165						156						9						324						307						17
Loss Before Income Taxes			(158)						(305)						147						(325)						(437)						112
Income Tax Benefit			(43)						(71)						28						(79)						(103)						24
Less: Income Attributable to Noncontrolling Interests			1						—						1						1						—						1
Less: Preferred Dividends			14						14						—						53						53						—
Net Loss			$	(130)					$	(248)					$	118					$	(300)					$	(387)					$	87

Three Months Ended June 30, 2022, as compared to June 30, 2021

The lower net loss was driven by prior year asset impairments to optimize the company's real estate portfolio and reduce office space as parts of the business move to a hybrid and remote workforce strategy and by higher equity earnings from the NMC investment, partially offset by lower return on investments that fund certain employee benefit obligations.

Operating Expenses. The decrease was primarily driven by prior year asset impairments to optimize the company's real estate portfolio and reduce office space as parts of the business move to a hybrid and remote workforce strategy.

Other Income and Expenses, net. The variance was primarily due to lower return on investments that fund certain employee benefit obligations partially offset by higher equity earnings from the NMC investment.

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

Income Tax Benefit. The decrease in the tax benefit was primarily due to a decrease in pretax losses. The ETRs for the three months ended June 30, 2022, and 2021, were 27.2% and 23.3%, respectively. The increase in the ETR was primarily due to higher equity earnings from the NMC investment.

Six Months Ended June 30, 2022, as compared to June 30, 2021

The lower net loss was driven by prior year asset impairments to optimize the company's real estate portfolio and reduce office space as parts of the business move to a hybrid and remote workforce strategy, partially offset by lower return on investments that fund certain employee benefit obligations.

Operating Expenses. The decrease was primarily driven by prior year asset impairments to optimize the company's real estate portfolio and reduce office space as parts of the business move to a hybrid and remote workforce strategy.

Other Income and Expenses, net. The variance was primarily due to lower return on investments that fund certain employee benefit obligations partially offset by higher equity earnings from the NMC investment.

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

Income Tax Benefit. The decrease in the tax benefit was primarily due to a decrease in pretax losses.

MD&A			DUKE ENERGY CAROLINAS

DUKE ENERGY CAROLINAS

Results of Operations

			Six Months Ended June 30,
(in millions)			2022						2021						Variance
Operating Revenues			$	3,669					$	3,326					$	343
Operating Expenses
Fuel used in electric generation and purchased power			879						766						113
Operation, maintenance and other			974						876						98
Depreciation and amortization			763						722						41
Property and other taxes			170						157						13
Impairment of assets and other charges			(9)						75						(84)
Total operating expenses			2,777						2,596						181
Gains on Sales of Other Assets and Other, net			—						2						(2)
Operating Income			892						732						160
Other Income and Expenses, net			113						92						21
Interest Expense			284						263						21
Income Before Income Taxes			721						561						160
Income Tax Expense			53						24						29
Net Income			$	668					$	537					$	131

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

Increase (Decrease) over prior year			2022
Residential sales			(0.4)		%
General service sales			7.1		%
Industrial sales			8.1		%
Wholesale power sales			(1.8)		%
Joint dispatch sales			(50.6)		%
Total sales			5.3		%
Average number of customers			1.9		%

Six Months Ended June 30, 2022, as compared to June 30, 2021

Operating Revenues. The variance was driven primarily by:

• a $150 million increase in weather-normal retail sales volumes;

• an $85 million increase in fuel revenues due to higher fuel prices and weather-normal retail sales volumes in the current year;

• a $36 million increase due to higher pricing from the North Carolina retail rate case, net of a return of EDIT to customers; and

• a $32 million increase in rider revenues primarily due to energy efficiency, storm securitization, and competitive procurement of renewable energy programs.

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

• a $113 million increase in fuel used in electric generation and purchased power primarily due to higher natural gas prices and changes in the generation mix, partially offset by the recovery of fuel expenses and lower coal prices;

• a $98 million increase in operation, maintenance and other expense primarily due to higher storm restoration costs and higher outage and maintenance costs; and

• a $41 million increase in depreciation and amortization primarily due to an increase in assets placed into service, and new depreciation rates associated with the North Carolina rate case, partially offset by the extension of the lives of nuclear facilities.

Partially offset by:

• an $84 million decrease in impairment of assets and other charges due to the prior year optimization of the company's real estate portfolio and reduction of office space as parts of the business move to a hybrid and remote workforce strategy and an adjustment to the South Carolina Supreme Court decision on coal ash.

Other Income and Expenses. The variance was driven by an increase in AFUDC equity due to higher AFUDC base.

Interest Expense. The variance was driven by interest expense on excess deferred tax liabilities.

MD&A			DUKE ENERGY CAROLINAS

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

PROGRESS ENERGY

Results of Operations

			Six Months Ended June 30,
(in millions)			2022						2021						Variance
Operating Revenues			$	6,206					$	5,184					$	1,022
Operating Expenses
Fuel used in electric generation and purchased power			2,322						1,628						694
Operation, maintenance and other			1,248						1,227						21
Depreciation and amortization			1,045						926						119
Property and other taxes			303						275						28
Impairment of assets and other charges			4						37						(33)
Total operating expenses			4,922						4,093						829
Gains on Sales of Other Assets and Other, net			3						1						2
Operating Income			1,287						1,092						195
Other Income and Expenses, net			105						81						24
Interest Expense			419						392						27
Income Before Income Taxes			973						781						192
Income Tax Expense			160						80						80
Net Income			813						701						112
Less: Net Income Attributable to Noncontrolling Interests			1						—						1
Net Income Attributable to Parent			$	812					$	701					$	111

Six Months Ended June 30, 2022, as compared to June 30, 2021

Operating Revenues. The variance was driven primarily by:

• a $610 million increase in fuel cost recovery driven by higher fuel prices and volumes in the current year;

• a $198 million increase in retail pricing due to the North Carolina rate case and base rate adjustments at Duke Energy Florida related to annual increases from the 2021 Settlement Agreement and the solar base rate adjustment;

• a $97 million increase in weather-normal retail sales volumes;

• a $36 million increase in retail sales due to favorable weather; and

• a $23 million increase in wholesale revenues, net of fuel, due to higher capacity volumes at Duke Energy Florida.

Partially offset by:

• a $43 million decrease in capacity revenue primarily due to accelerated recovery of retired Crystal River coal units in 2021.

Operating Expenses. The variance was driven primarily by:

• a $694 million increase in fuel used in electric generation and purchased power primarily due to higher demand and higher natural gas prices;

• a $119 million increase in depreciation and amortization primarily due to increased rates at Duke Energy Florida and higher amortization of deferred coal ash and storm costs at Duke Energy Progress, partially offset by the extension of the lives at nuclear facilities at Duke Energy Progress;

• a $28 million increase in property and other taxes primarily due to an increase in gross receipts taxes at Duke Energy Florida; and

• a $21 million increase in operation, maintenance and other expense primarily due to higher storm costs at Duke Energy Progress.

Partially offset by:

• a $33 million decrease in impairment of assets and other charges due to the prior year optimization of the company's real estate portfolio and reduction of office space as parts of the business moved to hybrid and remote workforce strategy.

Other Income and Expenses, net. The increase is primarily due to a 2022 settlement with the Department of Energy over spent nuclear fuel storage.

Interest Expense. The variance was driven primarily by interest expense on excess deferred tax liabilities at Duke Energy Progress and higher outstanding debt.

MD&A			PROGRESS ENERGY

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

DUKE ENERGY PROGRESS

Results of Operations

			Six Months Ended June 30,
(in millions)			2022						2021						Variance
Operating Revenues			$	3,213					$	2,750					$	463
Operating Expenses
Fuel used in electric generation and purchased power			1,167						845						322
Operation, maintenance and other			751						724						27
Depreciation and amortization			577						521						56
Property and other taxes			90						90						—
Impairment of assets and other charges			4						18						(14)
Total operating expenses			2,589						2,198						391
Gains on Sales of Other Assets and Other, net			1						1						—
Operating Income			625						553						72
Other Income and Expenses, net			54						44						10
Interest Expense			175						147						28
Income Before Income Taxes			504						450						54
Income Tax Expense			70						25						45
Net Income			$	434					$	425					$	9

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

Increase (Decrease) over prior period			2022
Residential sales			(0.9)		%
General service sales			8.4		%
Industrial sales			16.3		%
Wholesale power sales			2.8		%
Joint dispatch sales			61.4		%
Total sales			7.9		%
Average number of customers			2.0		%

Six Months Ended June 30, 2022, as compared to June 30, 2021

Operating Revenues. The variance was driven primarily by:

• a $291 million increase in fuel revenues due to higher fuel prices and retail sales volumes in the current year;

• a $111 million increase due to higher pricing from the North Carolina retail rate case, net of a return of EDIT to customers;

• a $19 million increase in weather-normal retail sales volumes; and

• a $10 million increase in retail sales due to favorable weather compared to prior year.

Operating Expenses. The variance was driven primarily by:

• a $322 million increase in fuel used in electric generation and purchased power primarily due to higher natural gas prices and changes in the generation mix, partially offset by the recovery of fuel expenses and lower coal prices;

• a $56 million increase in depreciation and amortization due to higher amortization of deferred coal ash costs and amortization related to deferred storm costs, partially offset by lower depreciation related to the extension of the lives of nuclear facilities; and

• a $27 million increase in operation, maintenance and other expense primarily due to higher storm costs.

Partially offset by:

• a $14 million decrease in impairment of assets and other charges due to the prior year optimization of the company's real estate portfolio and reduction of office space as parts of the business moved to hybrid and remote workforce strategy.

Interest Expense. The variance was driven primarily by interest expense on excess deferred tax liabilities and higher outstanding debt.

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

MD&A			DUKE ENERGY FLORIDA

DUKE ENERGY FLORIDA

Results of Operations

			Six Months Ended June 30,
(in millions)			2022						2021						Variance
Operating Revenues			$	2,983					$	2,426					$	557
Operating Expenses
Fuel used in electric generation and purchased power			1,155						783						372
Operation, maintenance and other			490						497						(7)
Depreciation and amortization			468						405						63
Property and other taxes			212						185						27
Impairment of assets and other charges			—						19						(19)
Total operating expenses			2,325						1,889						436
Gains on Sales of Other Assets and Other, net			2						—						2
Operating Income			660						537						123
Other Income and Expenses, net			55						36						19
Interest Expense			174						160						14
Income Before Income Taxes			541						413						128
Income Tax Expense			109						79						30
Net Income			$	432					$	334					$	98

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

Increase (Decrease) over prior period			2022
Residential sales			2.1		%
General service sales			4.0		%
Industrial sales			6.2		%
Wholesale and other			63.3		%
Total sales			12.6		%
Average number of customers			1.8		%

Six Months Ended June 30, 2022, as compared to June 30, 2021

Operating Revenues. The variance was driven primarily by:

• a $319 million increase in fuel revenue primarily due to higher retail sales volumes and a higher fuel rate in the current year in response to an increase in natural gas prices;

• an $87 million increase in retail pricing due to base rate adjustments related to annual increases from the 2021 Settlement Agreement and the solar base rate adjustment;

• a $78 million increase in weather-normal retail sales volumes;

• a $37 million increase in rider revenues primarily due to increased Storm Protection Plan rider revenue driven by higher debt and equity returns from increased capital expenditures in the current year;

• a $26 million increase in retail sales due to favorable weather in the current year; and

• a $23 million increase in wholesale power revenues, net of fuel, primarily due to higher capacity revenues and bulk power sales.

Partially offset by:

• a $43 million decrease in capacity revenue primarily due to accelerated recovery of the retired coal units Crystal River 1 and 2 in 2021.

Operating Expenses. The variance was driven primarily by:

• a $372 million increase in fuel used in electric generation and purchased power primarily due to higher natural gas prices;

• a $63 million increase in depreciation and amortization primarily due to an increase in depreciation rates starting in January 2022; and

• a $27 million increase in property and other taxes primarily due to an increase in gross receipts taxes.

Partially offset by:

• a $19 million decrease in impairment of assets and other charges due to the prior year optimization of the company's real estate portfolio and reduction of office space as parts of the business moved to hybrid and remote workforce strategy.

MD&A			DUKE ENERGY FLORIDA

Other Income and Expense, net. The increase is primarily due to a 2022 settlement with the Department of Energy over spent nuclear fuel storage.

Interest Expense. The increase in interest expense was primarily due to higher outstanding debt.

Income Tax Expense. The increase in tax expense was primarily due to an increase in pretax income.

DUKE ENERGY OHIO

Results of Operations

			Six Months Ended June 30,
(in millions)			2022						2021						Variance
Operating Revenues
Regulated electric			$	813					$	706					$	107
Regulated natural gas			370						282						88
Total operating revenues			1,183						988						195
Operating Expenses
Fuel used in electric generation and purchased power			254						175						79
Cost of natural gas			153						67						86
Operation, maintenance and other			287						219						68
Depreciation and amortization			163						149						14
Property and other taxes			193						175						18
Impairment of assets and other charges			—						5						(5)
Total operating expenses			1,050						790						260
Gains on Sales of Other Assets and Other, net			1						—						1
Operating Income			134						198						(64)
Other Income and Expenses, net			12						10						2
Interest Expense			60						53						7
Income Before Income Taxes			86						155						(69)
Income Tax (Benefit) Expense			(47)						25						(72)
Net Income			$	133					$	130					$	3

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

			Electric			Natural Gas
Increase (Decrease) over prior year			2022			2022
Residential sales			0.2		%	5.4		%
General service sales			(9.7)		%	6.0		%
Industrial sales			(16.5)		%	5.7		%
Wholesale electric power sales			(18.5)		%	n/a
Other natural gas sales			n/a			(4.6)		%
Total sales			(1.5)		%	3.5		%
Average number of customers			1.2		%	1.7		%

Six Months Ended June 30, 2022, as compared to June 30, 2021

Operating Revenues. The variance was driven primarily by:

• a $139 million increase in fuel related revenues primarily due to higher natural gas prices and increased natural gas volumes;

• a $21 million increase in other electric revenues primarily due to Distribution Decoupling rider adjustments recorded in 2021;

• an $18 million increase in retail revenue riders, primarily due to the Ohio CEP, Distribution Capital Investment Rider (DCI);

• a $13 million increase in revenues related to OVEC collections and OVEC sales into PJM; and

• an $8 million increase in PJM transmission revenues as a result of increased capital spend.

Partially offset by:

• a $15 million decrease due to the MGP settlement.

MD&A			DUKE ENERGY OHIO

Operating Expenses. The variance was driven primarily by:

• a $165 million increase in fuel expense primarily driven by higher retail prices and increased volumes for natural gas and purchased power;

• a $68 million increase in operation, maintenance and other expense primarily due to the MGP settlement and higher storm costs;

• an $18 million increase in property and other taxes primarily due to increased plant in service, higher kilowatt and natural gas distribution taxes due to increased usage and a lower Network Integration Transmission Service tax deferral partially offset by Sales and Use Tax and the Ohio Kilowatt Tax; and

• a $14 million increase in depreciation and amortization primarily driven by lower CEP deferrals and an increase in distribution plant in service.

Income Tax Benefit. The decrease in tax expense was primarily due to an increase in the amortization of excess deferred taxes related to the MGP Settlement and a decrease in pretax income.

DUKE ENERGY INDIANA

Results of Operations

			Six Months Ended June 30,
(in millions)			2022						2021						Variance
Operating Revenues			$	1,740					$	1,480					$	260
Operating Expenses
Fuel used in electric generation and purchased power			678						418						260
Operation, maintenance and other			374						370						4
Depreciation and amortization			311						304						7
Property and other taxes			47						41						6
Impairment of assets and other charges			211						8						203
Total operating expenses			1,621						1,141						480
Losses on Sales of Other Assets and Other, net			—						(1)						1
Operating Income			119						338						(219)
Other Income and Expenses, net			18						19						(1)
Interest Expense			90						99						(9)
Income Before Income Taxes			47						258						(211)
Income Tax (Benefit) Expense			(23)						43						(66)
Net Income			$	70					$	215					$	(145)

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

Increase (Decrease) over prior year			2022
Residential sales			0.8		%
General service sales			4.4		%
Industrial sales			(14.6)		%
Wholesale power sales			16.6		%
Total sales			3.3		%
Average number of customers			1.4		%

Six Months Ended June 30, 2022, as compared to June 30, 2021

Operating Revenues. The variance was driven primarily by:

• a $221 million increase in fuel revenues primarily due to higher fuel cost recovery driven by retail sales volumes and fuel prices;

• a $54 million increase in wholesale revenues primarily driven by higher fuel rates and BPM sharing provision;

• an $18 million increase in weather-normal retail sales volumes driven by higher nonresidential customer demand;

• a $12 million increase primarily due to Energy Efficiency and Renewables riders; and

• an $11 million increase in retail sales due to favorable weather in the current year.

MD&A			DUKE ENERGY INDIANA

Partially offset by:

• a $53 million decrease due to the Indiana Supreme Court ruling on recovery of certain coal ash costs.

Operating Expenses. The variance was driven primarily by:

• a $260 million increase in fuel used in electric generation and purchased power expense primarily due to higher purchased power expense and higher coal and natural gas costs; and

• a $203 million increase in impairment of assets and other charges primarily due to the Indiana Supreme Court ruling on recovery of certain coal ash costs.

Income Tax Benefit. The decrease in tax expense was primarily due the change in pretax income and excess deferred income taxes from the coal ash impairment.

PIEDMONT

Results of Operations

			Six Months Ended June 30,
(in millions)			2022						2021						Variance
Operating Revenues			$	1,115					$	821					$	294
Operating Expenses
Cost of natural gas			517						288						229
Operation, maintenance and other			183						154						29
Depreciation and amortization			110						99						11
Property and other taxes			31						28						3
Impairment of assets and other charges			—						5						(5)
Total operating expenses			841						574						267
Gains on Sales of Other Assets and Other, net			4						—						4
Operating Income			278						247						31
Other Income and Expenses, net			28						35						(7)
Interest Expense			66						59						7
Income Before Income Taxes			240						223						17
Income Tax Expense			27						24						3
Net Income			$	213					$	199					$	14

The following table shows the percent changes in dekatherms delivered and average number of customers. The percentages for all throughput deliveries represent billed and unbilled sales. Amounts are not weather-normalized.

Increase (Decrease) over prior year			2022
Residential deliveries			(5.0)		%
Commercial deliveries			0.7		%
Industrial deliveries			0.8		%
Power generation deliveries			38.2		%
For resale			(3.9)		%
Total throughput deliveries			20.0		%
Secondary market volumes			28.8		%
Average number of customers			1.5		%

The margin decoupling mechanism adjusts for variations in residential and commercial use per customer, including those due to weather and conservation. The weather normalization adjustment mechanisms mostly offset the impact of weather on bills rendered, but do not ensure full recovery of approved margin during periods when winter weather is significantly warmer or colder than normal.

Six Months Ended June 30, 2022, as compared to June 30, 2021

Operating Revenues. The variance was driven primarily by:

• a $229 million increase due to higher natural gas costs passed through to customers and increased off-system natural sales gas costs, partially offset by lower volumes billed;

• a $41 million increase due to base rate increases; and

• a $7 million increase due to customer growth.

MD&A			PIEDMONT

Operating Expenses. The variance was driven primarily by:

• a $229 million increase due to higher natural gas costs passed through to customers and increased off-system sales natural gas costs, partially offset by lower volumes billed;

• a $29 million increase in operation, maintenance and other due higher costs for natural gas pipeline safety and integrity work, labor and benefits, customer repair plan program, and material and security purchases; and

• an $11 million increase in depreciation and amortization due to additional plant in service.

Other Income and Expenses, net. The decrease was primarily due to lower AFUDC equity income.

Interest Expense. The increase was primarily due to lower AFUDC debt income and higher outstanding debt.

Income Tax Expense. The increase in tax expense was primarily due to an increase in pretax income.

LIQUIDITY AND CAPITAL RESOURCES

Sources and Uses of Cash

Duke Energy relies primarily upon cash flows from operations, debt and equity issuances and its existing cash and cash equivalents to fund its liquidity and capital requirements. Duke Energy’s capital requirements arise primarily from capital and investment expenditures, repaying long-term debt and paying dividends to shareholders. Additionally, due to its existing tax attributes, Duke Energy does not expect to be a significant federal cash taxpayer until around 2030. Duke Energy’s Annual Report on Form 10-K for the year ended December 31, 2021, included a summary and detailed discussion of projected primary sources and uses of cash for 2022 to 2024.

As of June 30, 2022, Duke Energy had approximately $428 million of cash on hand and $5.4 billion available under its $9 billion Master Credit Facility. Duke Energy expects to have sufficient liquidity in the form of cash on hand, cash from operations and available credit capacity to support its funding needs. Refer to Note 5 to the Condensed Consolidated Financial Statements, "Debt and Credit Facilities," for information regarding Duke Energy's debt issuances and maturities, and available credit facilities including the Master Credit Facility.

Cash Flow Information

The following table summarizes Duke Energy’s cash flows.

						Six Months Ended
						June 30,
(in millions)						2022						2021
Cash flows provided by (used in):
Operating activities						$	4,035					$	3,873
Investing activities						(5,492)						(5,614)
Financing activities						1,576						1,750
Net increase in cash, cash equivalents and restricted cash						119						9
Cash, cash equivalents and restricted cash at beginning of period						520						556
Cash, cash equivalents and restricted cash at end of period						$	639					$	565

OPERATING CASH FLOWS

The following table summarizes key components of Duke Energy’s operating cash flows.

						Six Months Ended
						June 30,
(in millions)						2022						2021						Variance
Net income						$	1,700					$	1,639					$	61
Non-cash adjustments to net income						2,971						2,915						56
Payments for asset retirement obligations						(255)						(263)						8
Working capital						(381)						(418)						37
Net cash provided by operating activities						$	4,035					$	3,873					$	162

The variance is primarily due to a 2022 settlement with the Department of Energy over spent nuclear fuel storage as well as timing of accruals and payments in working capital accounts.

MD&A			LIQUIDITY AND CAPITAL RESOURCES

INVESTING CASH FLOWS

The following table summarizes key components of Duke Energy’s investing cash flows.

						Six Months Ended
						June 30,
(in millions)						2022						2021						Variance
Capital, investment and acquisition expenditures						$	(5,149)					$	(4,657)					$	(492)
Other investing items						(343)						(957)						614
Net cash used in investing activities						$	(5,492)					$	(5,614)					$	122

The variance relates primarily to payment made in 2021 to fund ACP's outstanding debt and lower overall investments in the Gas Utilities and Infrastructure and Commercial Renewables segments, partially offset by increases in capital expenditures due to higher overall investments in the Electric Utilities and Infrastructure segment.

FINANCING CASH FLOWS

The following table summarizes key components of Duke Energy’s financing cash flows.

						Six Months Ended
						June 30,
(in millions)						2022						2021						Variance
Issuances of long-term debt, net						$	2,567					$	2,625					$	(58)
Issuances of common stock						—						5						(5)
Notes payable, commercial paper and other short-term borrowings						558						415						143
Dividends paid						(1,574)						(1,541)						(33)
Contributions from noncontrolling interests						126						318						(192)
Other financing items						(101)						(72)						(29)
Net cash provided by financing activities						$	1,576					$	1,750					$	(174)

The variance was primarily due to:

• a $192 million decrease in contributions from noncontrolling interests due to fewer project investments financed by tax equity being placed into service in the current year; and

• a $58 million decrease in net proceeds from issuances of long-term debt, primarily due to timing of issuances and redemptions of long-term debt.

Partially offset by:

• a $143 million increase in net borrowings from notes payable and commercial paper.

OTHER MATTERS

Environmental Regulations

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 and result in new obligations of the Duke Energy Registrants. Refer to Note 3 to the Condensed Consolidated Financial Statements, "Regulatory Matters," for further information regarding potential plant retirements and regulatory filings related to the Duke Energy Registrants.