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 and 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. Duke Energy’s consolidated financial information 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, 2024, and with Duke Energy’s Annual Report on Form 10-K for the year ended December 31, 2023.

Executive Overview

Advancing Our Clean Energy Transition. During the six months ended June 30, 2024, we continued to execute on our clean energy transition, remaining focused on reliability and affordability while delivering increasingly clean energy and providing strong, sustainable value for shareholders, customers, communities and employees.

• In May 2024, we entered into memorandums of understanding with several large customers which propose exploring new and innovative approaches to support carbon-free energy generation and serve future energy needs of large businesses in North Carolina and South Carolina through the use of new tariff structures. The proposed Accelerating Clean Energy (ACE) tariff framework includes new, voluntary pricing structures for large commercial and industrial customers which enable their direct support of carbon-free energy generation investments including facilitating beneficial customer on-site generation and load flexibility programs. The proposed ACE tariffs would be subject to regulatory approvals and include protections for non-participating customers.

• In January 2024, we filed supplemental modeling and analysis with the NCUC and PSCSC related to our combined systemwide Carolinas Resource Plan filed in August 2023. These updates were necessary due to substantially increased load forecasts resulting from continued economic development successes in the Carolinas occurring since the systemwide integrated resource plan was prepared. In March 2024, we filed for: (i) CPCNs with the NCUC for new natural gas generation facilities at the sites of the current Marshall Steam Station and Roxboro Plant in the Carolinas; and (ii) a Certificate of Environmental Compatibility and Public Convenience and Necessity with the PSCSC for a new solar center and associated facilities in Chesterfield and Darlington counties, South Carolina. Our energy transition strategy continues to focus on delivering a path to cleaner energy in a manner that protects grid reliability and affordability, all while meeting the energy demands of the growing and economically vibrant communities that we serve.

• As we continue to strengthen our grid and bring clean energy resources online, our customers are important partners in our clean energy future. In January 2024, we received approval for PowerPairSM, a new incentive-based pilot program for installing home solar generation with battery energy storage in our Duke Energy Carolinas and Duke Energy Progress North Carolina service territories. Enrollment options for residential customers that participate in the pilot include a one-time incentive of up to $9,000 for the installation of a solar plus battery system. The program was launched in May 2024 and successfully enrolled more than 1,300 customers in its first three months, providing another impactful way for our customers to save energy and money, while exploring new solutions to help manage low carbon grids of the future.

Regulatory Activity. During the six months ended June 30, 2024, we continued to move our regulatory strategy forward. See Note 4 to the Condensed Consolidated Financial Statements, "Regulatory Matters," for additional information.

• In January 2024, Duke Energy Carolinas filed a South Carolina rate case, the first base rate case filed by Duke Energy Carolinas in the state since 2018 and reflecting the South Carolina retail allocation of significant investments, including approximately $1.5 billion of transmission and distribution assets. In May 2024, we reached a constructive comprehensive settlement with certain parties and in July 2024, the PSCSC issued an order approving the settlement and revising recovery of certain environmental compliance costs. New rates were effective August 1, 2024.

• In April 2024, we filed formal requests for new base rates across several jurisdictions including Duke Energy Florida, Duke Energy Indiana and Piedmont.

• Duke Energy Florida filed a three-year rate plan that would begin in January 2025, once its current base rate settlement agreement concludes at the end of 2024, and proposed approximately $4.9 billion in incremental investments to reduce outages, expand solar generation, and increase generation unit efficiency. In July 2024, we reached a constructive comprehensive settlement with certain parties on the rate plan which, if approved by the FPSC, will allow us to continue making important investments to reduce outages, shorten response times, meet future energy demands, increase clean, solar generation and explore innovative technologies to generate cost savings for our customers.

• Duke Energy Indiana filed a general rate case with the IURC requesting an overall increase in revenues of $492 million. This is the first base rate case filed by Duke Energy Indiana since 2019 and reflects strategic investments to improve grid reliability and security, serve a growing customer base, and meet environmental regulations. These investments, which include approximately 345 miles of new power lines expected to be constructed through 2025, will support the more than 60,000 new customers anticipated since our last base rate case.

MD&A			DUKE ENERGY

• Piedmont filed a general rate case with the NCUC requesting an overall increase in revenues of $159 million. This is the first base rate case filed by Piedmont in North Carolina since 2021 and reflects significant investments to support ongoing service reliability, system growth, and compliance with federal pipeline safety regulations in addition to two energy reliability centers in eastern North Carolina.

• Also, in April 2024, Duke Energy Progress issued $177 million of storm recovery bonds, our first issuance under South Carolina's 2022 securitization legislation, which provided the necessary framework for us to lower the bill impacts on our customers related to critical storm restoration activities.

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

In April 2024, the EPA issued the 2024 CCR Rule under the Resource Conservation and Recovery Act, which significantly expands the scope of the 2015 CCR Rule by establishing regulatory requirements for inactive surface impoundments at retired generating facilities and previously unregulated coal ash sources at regulated facilities. Duke Energy is participating in and monitoring legal challenges to the 2024 CCR Rule.

Cost recovery for future expenditures is anticipated and will be pursued through the normal ratemaking process with federal and state utility commissions, which permit recovery of necessary and prudently incurred costs associated with Duke Energy’s regulated operations. The majority of spend is expected to occur over the next 10 years. For more information, see "Other Matters" and Notes 4 and 7 to the Condensed Consolidated Financial Statements, "Regulatory Matters" and "Asset Retirement Obligations."

Fuel Cost Recovery

As a result of rapidly rising commodity costs during 2022, including natural gas, fuel and purchased power prices in excess of amounts included in fuel-related revenues led to an increase in the under collection of fuel costs from customers in jurisdictions including those served by Duke Energy Carolinas, Duke Energy Progress and Duke Energy Florida. These amounts have been deferred in regulatory assets and impacted the cash flows of the registrants, including increased borrowings to temporarily finance related expenditures until recovery. Regulatory filings have been made and approved for recovery of all remaining uncollected 2022 fuel costs. Across all jurisdictions, Duke Energy is currently on pace to recover approximately $1.9 billion of deferred fuel costs in 2024 and we anticipate being in line with our historical average balance of deferred fuel costs by the end of this year.

EPA Regulations of GHG Emissions

In April 2024, the EPA issued a final rule under section 111 of the Clean Air Act (EPA Rule 111) regulating GHG emissions from existing coal-fired and new natural gas-fired power plants. Duke Energy is analyzing the potential impacts the rule could have on the Company, which could be material and may influence the timing, nature, and magnitude of future generation investments in our service territories. Cost recovery for future expenditures will be pursued through the normal ratemaking process with federal and state utility commissions, which permit recovery of necessary and prudently incurred costs associated with Duke Energy’s regulated operations. Duke Energy is participating in and monitoring legal challenges to the final rule. For more information, see "Other Matters."

Supply Chain

The Company continues to monitor the ongoing stability of markets for key materials and other developments, including public policy outcomes, that could disrupt or impact the Company's supply chain and, as a result, may impact Duke Energy's execution of its capital plan, future financial results or the achievement of its clean energy goals.

Goodwill

The Duke Energy Registrants performed their annual goodwill impairment tests as of August 31, 2023. As of this date, all of the Duke Energy Registrants' reporting units' estimated fair values materially exceeded the carrying values except for the GU&I reporting unit of Duke Energy Ohio. While no goodwill impairment charges were recorded in 2023, the potential for continued interest rate pressures, and the related impact on the weighted average cost of capital, without timely or adequate updates to the regulated allowed return on equity or deteriorating economic conditions impacting GU&I's future cash flows or equity valuations of peer companies could impact the estimated fair value of GU&I, and goodwill impairment charges could be recorded in the future.

Other

Duke Energy continues to monitor general market conditions, including the potential for continued interest rate pressures on the Company's cost of capital, which may impact Duke Energy's execution of its capital plan, future financial results, or the achievement of its clean energy goals.

Results of Operations

Non-GAAP Measures

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

MD&A			DUKE ENERGY

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 basic 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 Basic 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 primarily represents impairment charges related to Duke Energy Carolinas' South Carolina rate case order.

Discontinued operations primarily represents the operating results and impairments recognized related to the sale of Duke Energy's Commercial Renewables Disposal Groups.

Three Months Ended June 30, 2024, as compared to June 30, 2023

GAAP reported EPS was $1.13 for the three months ended June 30, 2024 compared to a GAAP reported loss per share of $(0.32) for the three months ended June 30, 2023. In addition to the drivers below, GAAP reported EPS increased primarily due to impairments on the sale of the Commercial Renewables business in the prior year.

As discussed above, management also evaluates financial performance based on adjusted EPS. Duke Energy’s second quarter 2024 adjusted EPS was $1.18 compared to $0.91 for the second quarter of 2023. The increase in adjusted EPS was primarily due to growth from rate increases and riders, higher sales volumes and favorable weather, partially offset by higher interest expense and higher depreciation on a growing asset base.

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

			Three Months Ended June 30,
			2024												2023
(in millions, except per share amounts)			Earnings						EPS						Earnings						EPS
GAAP Reported Earnings (Loss)/GAAP Reported Earnings (Loss) Per Share			$	886					$	1.13					$	(234)					$	(0.32)
Adjustments:
Regulatory Matters(a)			25						0.03						—						—
Discontinued Operations(b)			10						0.01						948						1.23
Adjusted Earnings/Adjusted EPS			$	921					$	1.18					$	714					$	0.91

Note: Total EPS may not foot due to rounding.

(a)Net of $8 million tax benefit. $42 million recorded within Impairment of assets and other charges, $2 million within Operations, maintenance and other, and an $11 million reduction recorded within Interest Expense.

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

Six Months Ended June 30, 2024, as compared to June 30, 2023

GAAP Reported EPS was $2.57 for the six months ended June 30, 2024, compared to $0.69 for the six months ended June 30, 2023. In addition to the drivers below, GAAP reported EPS increased primarily due to impairments on the sale of the Commercial Renewables business in the prior year.

As discussed above, management also evaluates financial performance based on adjusted EPS. Duke Energy’s adjusted EPS was $2.62 for the six months ended June 30, 2024, compared to $2.10 for the six months ended June 30, 2023. The increase in adjusted EPS was primarily due to growth from rate increases and riders and improved weather, partially offset by higher interest expense.

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

			Six Months Ended June 30,
			2024												2023
(in millions, except per share amounts)			Earnings						EPS						Earnings						EPS
GAAP Reported Earnings/GAAP Reported EPS			$	1,985					$	2.57					$	531					$	0.69
Adjustments:
Regulatory Matters(a)			25						0.03						—						—
Discontinued Operations(b)			13						0.02						1,093						1.41
Adjusted Earnings/Adjusted EPS			$	2,023					$	2.62					$	1,624					$	2.10

(a)Net of $8 million tax benefit. $42 million recorded within Impairment of assets and other charges, $2 million within Operations, maintenance and other, and an $11 million reduction recorded within Interest Expense.

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

MD&A			SEGMENT RESULTS — ELECTRIC UTILITIES AND INFRASTRUCTURE

SEGMENT RESULTS

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

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

Electric Utilities and Infrastructure

			Three Months Ended June 30,																		Six Months Ended June 30,
(in millions)			2024						2023						Variance						2024						2023						Variance
Operating Revenues			$	6,820					$	6,250					$	570					$	13,623					$	12,648					$	975
Operating Expenses
Fuel used in electric generation and purchased power			2,247						2,058						189						4,602						4,454						148
Operation, maintenance and other			1,262						1,341						(79)						2,578						2,610						(32)
Depreciation and amortization			1,246						1,188						58						2,471						2,284						187
Property and other taxes			351						337						14						688						685						3
Impairment of assets and other charges			42						5						37						43						12						31
Total operating expenses			5,148						4,929						219						10,382						10,045						337
Gains on Sales of Other Assets and Other, net			1						27						(26)						7						28						(21)
Operating Income			1,673						1,348						325						3,248						2,631						617
Other Income and Expenses, net			141						127						14						272						257						15
Interest Expense			488						444						44						987						896						91
Income Before Income Taxes			1,326						1,031						295						2,533						1,992						541
Income Tax Expense			214						158						56						387						307						80
Less: Income Attributable to Noncontrolling Interest			22						23						(1)						35						44						(9)
Segment Income			$	1,090					$	850					$	240					$	2,111					$	1,641					$	470
Duke Energy Carolinas GWh sales			22,484						20,638						1,846						44,872						41,557						3,315
Duke Energy Progress GWh sales			17,204						15,454						1,750						33,332						30,799						2,533
Duke Energy Florida GWh sales			11,862						11,400						462						20,701						20,390						311
Duke Energy Ohio GWh sales			5,910						5,695						215						11,690						11,338						352
Duke Energy Indiana GWh sales			7,516						6,927						589						14,991						14,277						714
Total Electric Utilities and Infrastructure GWh sales			64,976						60,114						4,862						125,586						118,361						7,225
Net proportional MW capacity in operation																					54,578						54,420						158

Three Months Ended June 30, 2024, as compared to June 30, 2023

EU&I’s results were driven by higher revenues from rate cases across multiple jurisdictions, improved weather, and higher weather-normal retail sales volumes, 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 $159 million increase due to higher pricing from jurisdictional rate cases primarily at Duke Energy Carolinas and Duke Energy Progress and the 2021 Settlement at Duke Energy Florida;

• a $150 million increase in fuel revenues primarily due to net higher fuel cost recovery in the current year;

• a $142 million increase in retail sales due to improved weather compared to prior year, including the impacts of decoupling;

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

• a $62 million increase in rider revenues primarily due to a decrease in the return of EDIT to customers at Duke Energy Carolinas; and

• a $23 million increase in other revenues at Duke Energy Florida.

Partially offset by:

• a $71 million decrease in storm revenues at Duke Energy Florida.

MD&A			SEGMENT RESULTS — ELECTRIC UTILITIES AND INFRASTRUCTURE

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

*•*a $189 million increase in fuel used in electric generation and purchased power due to higher recovery of fuel expense at Duke Energy Carolinas and Duke Energy Progress, partially offset by lower deferred fuel amortization and lower fuel prices and volumes at Duke Energy Florida, Duke Energy Ohio and Duke Energy Indiana;

*•*a $58 million increase in depreciation and amortization primarily due to higher depreciable base and higher net amortizations driven by the North Carolina rate cases at Duke Energy Carolinas and Duke Energy Progress, and lower amortization of the DOE settlement regulatory liability and higher depreciable base at Duke Energy Florida; and

• a $37 million increase in impairments of assets and other charges primarily related to the South Carolina rate case order at Duke Energy Carolinas.

Partially offset by:

*•*a $79 million decrease in operation, maintenance and other primarily driven by lower storm amortization at Duke Energy Florida, lower storm and nuclear outage costs at Duke Energy Progress, partially offset by higher storm costs at Duke Energy Carolinas.

Gains on Sales of Other Assets and Other, net. The decrease was primarily due to the sale of the Mint Street parking deck in the prior year at Duke Energy Carolinas.

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

Income Tax Expense. The increase in tax expense was primarily due to an increase in pretax income. The ETRs for the three months ended June 30, 2024 and 2023, were 16.1% and 15.3%, respectively.

Six Months Ended June 30, 2024, as compared to June 30, 2023

EU&I’s results were driven by higher revenues from rate cases across multiple jurisdictions, improved weather, and higher weather-normal retail sales volumes, 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 $306 million increase due to higher pricing from jurisdictional rate cases primarily at Duke Energy Carolinas, Duke Energy Progress and Duke Energy Kentucky and the 2021 Settlement at Duke Energy Florida;

• a $291 million increase in retail sales due to improved weather compared to prior year, including the impacts of decoupling;

• a $109 million increase in weather-normal retail sales volumes;

• a $101 million increase in fuel revenues primarily due to net higher fuel cost recovery in the current year;

• a $101 million increase in rider revenues primarily due to a decrease in the return of EDIT to customers at Duke Energy Carolinas; and

• a $38 million increase in other revenues at Duke Energy Florida.

Partially offset by:

• a $35 million decrease in storm revenues at Duke Energy Florida.

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

*•*a $187 million increase in depreciation and amortization primarily due to lower amortization of the DOE settlement regulatory liability and higher depreciable base at Duke Energy Florida and higher depreciable base and higher net amortizations driven by the North Carolina rate cases at Duke Energy Carolinas and Duke Energy Progress;

*•*a $148 million increase in fuel used in electric generation and purchased power due to higher recovery of fuel expense at Duke Energy Carolinas and Duke Energy Progress, partially offset by lower deferred fuel amortization and lower fuel prices and volumes at Duke Energy Indiana, Duke Energy Florida and Duke Energy Ohio; and

• a $31 million increase in impairment of assets and other charges primarily related to the South Carolina rate case order at Duke Energy Carolinas.

Partially offset by:

• a $32 million decrease in operation, maintenance and other primarily driven by lower storm amortization at Duke Energy Florida and lower outage work at Duke Energy Indiana, partially offset by higher storm costs at Duke Energy Carolinas.

Gains on Sales of Other Assets and Other, net. The decrease was primarily due to the sale of the Mint Street parking deck in the prior year at Duke Energy Carolinas.

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

Income Tax Expense. The increase in tax expense was primarily due to an increase in pretax income, partially offset by an increase in the amortization of EDIT. The ETRs for the six months ended June 30, 2024, and 2023, were 15.3% and 15.4%, respectively.

MD&A			SEGMENT RESULTS — GAS UTILITIES AND INFRASTRUCTURE

Gas Utilities and Infrastructure

			Three Months Ended June 30,																		Six Months Ended June 30,
(in millions)			2024						2023						Variance						2024						2023						Variance
Operating Revenues			$	381					$	359					$	22					$	1,283					$	1,270					$	13
Operating Expenses
Cost of natural gas			78						79						(1)						310						377						(67)
Operation, maintenance and other			117						110						7						246						229						17
Depreciation and amortization			96						84						12						194						169						25
Property and other taxes			38						30						8						84						61						23
Impairment of assets and other charges			—						(5)						5						—						(4)						4
Total operating expenses			329						298						31						834						832						2
Losses on Sales of Other Assets and Other, net			—						(1)						1						—						(1)						1
Operating Income			52						60						(8)						449						437						12
Other Income and Expenses, net			17						24						(7)						34						47						(13)
Interest Expense			61						52						9						122						102						20
Income Before Income Taxes			8						32						(24)						361						382						(21)
Income Tax Expense			2						7						(5)						71						70						1
Segment Income			$	6					$	25					$	(19)					$	290					$	312					$	(22)
Piedmont LDC throughput (dekatherms)			128,266,775						122,238,056						6,028,719						291,531,790						283,701,849						7,829,941
Duke Energy Midwest LDC throughput (Mcf)			12,969,694						13,738,164						(768,470)						46,167,345						45,553,131						614,214

Three Months Ended June 30, 2024, as compared to June 30, 2023

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

Operating Revenues. The variance was driven primarily by:

• a $6 million increase due to higher base rates, primarily from the Duke Energy Ohio rate case, partially offset by lower rider revenues as Duke Energy Ohio;

• a $6 million increase due to unregulated Renewable Natural Gas (RNG) revenue;

• a $4 million increase due to North Carolina IMR; and

• a $3 million increase due to Tennessee ARM revenues.

Operating Expenses. The variance was driven primarily by:

• a $12 million increase in depreciation and amortization due to higher depreciable base and lower CEP deferrals;

• an $8 million increase in property and other taxes due to a higher base upon which property taxes are levied; and

• a $7 million increase in operations, maintenance and other primarily due to higher outside services, labor and service company costs.

Other Income and Expenses, net. The decrease was primarily due to lower production and higher labor expense at SustainRNG.

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

Income Tax Expense**.** The decrease in tax expense was primarily due to a decrease in pretax income. The ETRs for the three months ended June 30, 2024, and 2023, were 25% and 21.9%, respectively. The increase in the ETR was primarily due to a decrease in the amortization of EDIT.

Six Months Ended June 30, 2024, as compared to June 30, 2023

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

MD&A			SEGMENT RESULTS — GAS UTILITIES AND INFRASTRUCTURE

Operating Revenues. The variance was driven primarily by:

• a $26 million increase due to higher base rates, primarily from the Duke Energy Ohio rate case, partially offset by lower rider revenues as Duke Energy Ohio;

• a $17 million increase due to Tennessee ARM revenues;

• a $12 million increase due to customer growth;

• a $12 million increase due to North Carolina IMR; and

• a $9 million increase due to rate stabilization mechanisms in South Carolina.

Partially offset by:

• a $67 million decrease due to lower natural gas costs passed through to customers and lower rates of natural gas costs.

Operating Expenses. The variance was driven primarily by:

• a $25 million increase in depreciation and amortization due to higher depreciable base, higher depreciation for certain unregulated RNG projects and lower CEP deferrals;

• a $23 million increase in property and other taxes due to a higher base upon which property taxes are levied; and

• a $17 million increase in operations, maintenance and other primarily due to higher outside services, labor and service company costs.

Partially offset by:

• a $67 million decrease due to lower natural gas costs passed through to customers and lower rates of natural gas costs.

Other Income and Expenses, Net. The decrease was primarily due to lower production and higher labor expense at SustainRNG.

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

Other

			Three Months Ended June 30,																		Six Months Ended June 30,
(in millions)			2024						2023						Variance						2024						2023						Variance
Operating Revenues			$	40					$	34					$	6					$	78					$	65					$	13
Operating Expenses			70						20						50						126						49						77
Gains on Sales of Other Assets and Other, net			6						5						1						11						11						—
Operating (Loss) Income			(24)						19						(43)						(37)						27						(64)
Other Income and Expenses, net			67						59						8						146						121						25
Interest Expense			306						271						35						600						527						73
Loss Before Income Taxes			(263)						(193)						(70)						(491)						(379)						(112)
Income Tax Benefit			(77)						(46)						(31)						(141)						(103)						(38)
Less: Preferred Dividends			14						14						—						53						53						—
Net Loss			$	(200)					$	(161)					$	(39)					$	(403)					$	(329)					$	(74)

Three Months Ended June 30, 2024, as compared to June 30, 2023

Other's results were impacted by higher interest expense driven by higher outstanding long-term debt balances and interest rates.

Operating Expenses. The increase was driven by contributions to the Duke Energy Foundation, higher claim reserves related to captive insurance, and franchise tax benefits recognized in the prior year.

Other Income and Expenses, net. The increase was primarily due to higher equity earnings from the National Methanol Company (NMC) investment.

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

Income Tax Benefit. The increase in the tax benefit was primarily due an increase in pretax losses and tax levelization. The ETRs for the three months ended June 30, 2024, and 2023, were 29.3% and 23.8%, respectively. The increase in the ETR was primarily due to tax levelization and non-deductible interest on Company-owned life insurance in the prior year.

Six Months Ended June 30, 2024, as compared to June 30, 2023

Other's results were impacted by higher interest expense driven by higher outstanding long-term debt balances and interest rates.

Operating Expenses. The increase was primarily driven by contributions to the Duke Energy Foundation, higher claim reserves related to captive insurance, and franchise tax benefits in the prior year.

MD&A			SEGMENT RESULTS - OTHER

Other Income and Expenses, net. The increase was primarily due to higher equity earnings from the NMC investment.

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

Income Tax Benefit. The increase in the tax benefit was primarily due to an increase in pretax losses and non-deductible interest on Company-owned life insurance in the prior year. The ETRs for the six months ended June 30, 2024, and 2023, were 28.7% and 27.2%, respectively. The increase in the ETR was primarily due to non-deductible interest on Company-owned life insurance in the prior year.

LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX

			Three Months Ended June 30,																		Six Months Ended June 30,
(in millions)			2024						2023						Variance						2024						2023						Variance
Loss From Discontinued Operations, net of tax			$	(10)					$	(955)					$	945					$	(13)					$	(1,164)					$	1,151

Three Months Ended June 30, 2024, as compared to June 30, 2023

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

Six Months Ended June 30, 2024, as compared to June 30, 2023

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

DUKE ENERGY CAROLINAS

Results of Operations

			Six Months Ended June 30,
(in millions)			2024						2023						Variance
Operating Revenues			$	4,704					$	3,762					$	942
Operating Expenses
Fuel used in electric generation and purchased power			1,609						1,133						476
Operation, maintenance and other			895						861						34
Depreciation and amortization			834						779						55
Property and other taxes			183						186						(3)
Impairment of assets and other charges			34						6						28
Total operating expenses			3,555						2,965						590
Gains on Sales of Other Assets and Other, net			1						26						(25)
Operating Income			1,150						823						327
Other Income and Expenses, net			123						118						5
Interest Expense			348						332						16
Income Before Income Taxes			925						609						316
Income Tax Expense			104						67						37
Net Income			$	821					$	542					$	279

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			2024
Residential sales			7.3		%
General service sales			5.6		%
Industrial sales			(0.3)		%
Wholesale power sales			17.2		%
Joint dispatch sales			(5.3)		%
Total sales			8.0		%
Average number of customers			2.2		%

MD&A			DUKE ENERGY CAROLINAS

Six Months Ended June 30, 2024, as compared to June 30, 2023

Operating Revenues. The variance was driven primarily by:

• a $460 million increase in fuel revenues due to higher fuel rates and volumes;

• a $188 million increase due to higher pricing from the North Carolina rate case;

• a $146 million increase in retail sales due to improved weather compared to prior year, including the impacts of decoupling;

• a $66 million increase in rider revenues primarily due to the decrease in the return of EDIT to customers compared to the prior year; and

• a $31 million increase in weather-normal retail sales volumes.

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

• a $476 million increase in fuel used in electric generation and purchased power primarily due to the recovery of fuel expense, and higher volumes, partially offset by lower natural gas prices;

*•*a $55 million increase in depreciation and amortization primarily due to a higher depreciable base, and higher net amortizations driven by the North Carolina rate case;

*•*a $34 million increase in operation, maintenance and other primarily due to higher storm costs; and

• a $28 million increase in impairment of assets and other charges primarily related to the South Carolina rate case order.

Gains on Sales of Other Assets and Other, net. The decrease was primarily due to the sale of the Mint Street parking deck in the prior year.

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

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

PROGRESS ENERGY

Results of Operations

			Six Months Ended June 30,
(in millions)			2024						2023						Variance
Operating Revenues			$	6,585					$	6,260					$	325
Operating Expenses
Fuel used in electric generation and purchased power			2,345						2,367						(22)
Operation, maintenance and other			1,216						1,252						(36)
Depreciation and amortization			1,155						1,046						109
Property and other taxes			324						341						(17)
Impairment of assets and other charges			9						5						4
Total operating expenses			5,049						5,011						38
Gains on Sales of Other Assets and Other, net			13						12						1
Operating Income			1,549						1,261						288
Other Income and Expenses, net			122						97						25
Interest Expense			525						465						60
Income Before Income Taxes			1,146						893						253
Income Tax Expense			190						149						41
Net Income			$	956					$	744					$	212

Six Months Ended June 30, 2024, as compared to June 30, 2023

Operating Revenues. The variance was driven primarily by:

• a $115 million increase in retail sales due to improved weather compared to prior year, including the impacts of decoupling, at Duke Energy Progress and Duke Energy Florida;

• a $99 million increase due to higher pricing from the North Carolina and South Carolina rate cases at Duke Energy Progress and the 2021 Settlement at Duke Energy Florida;

• a $93 million increase in weather-normal retail sales volumes at Duke Energy Progress;

• a $38 million increase in Clean Energy Connection subscription revenues, higher residential fixed bill program revenues and higher transmission revenues at Duke Energy Florida;

MD&A			PROGRESS ENERGY

• a $19 million increase in wholesale revenues, net of fuel, due to higher sales volumes and capacity rates at Duke Energy Progress; and

• a $16 million increase in rider revenues primarily due to higher rates for the Storm Protection Plan at Duke Energy Florida.

Partially offset by:

• a $35 million decrease in storm revenues at Duke Energy Florida;

• a $13 million decrease in franchise taxes revenue primarily due to decreased revenues over prior year at Duke Energy Florida; and

• an $11 million decrease in fuel and capacity revenues primarily due to lower fuel and capacity rates billed to retail customers at Duke Energy Florida, partially offset by an increase in fuel rates and volumes at Duke Energy Progress.

Operating Expenses. The variance was driven primarily by:

*•*a $109 million increase in depreciation and amortization due to lower amortization of the DOE settlement regulatory liability and higher depreciable base at Duke Energy Florida and higher net amortizations driven by the North Carolina rate case at Duke Energy Progress.

Partially offset by:

• a $36 million decrease in operation, maintenance and other primarily due to lower storm amortization at Duke Energy Florida;

• a $22 million decrease in fuel used in electric generation and purchased power primarily due to a decrease in purchased power costs driven by expiration of contracts in current year, lower fuel costs driven by lower natural gas prices and a decrease due to fuel cost recovery at Duke Energy Florida, partially offset by higher volumes and recovery of fuel expenses at Duke Energy Progress; and

• a $17 million decrease in property and other taxes primarily due to lower property taxes and lower franchise and gross receipts tax, driven by lower revenues at Duke Energy Florida.

Other Income and Expenses, net. The variance was primarily driven by other post-employment benefit activity and interest income at Duke Energy Progress.

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

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

DUKE ENERGY PROGRESS

Results of Operations

			Six Months Ended June 30,
(in millions)			2024						2023						Variance
Operating Revenues			$	3,424					$	2,958					$	466
Operating Expenses
Fuel used in electric generation and purchased power			1,217						1,034						183
Operation, maintenance and other			701						706						(5)
Depreciation and amortization			645						611						34
Property and other taxes			101						95						6
Impairment of assets and other charges			9						7						2
Total operating expenses			2,673						2,453						220
Gains on Sales of Other Assets and Other, net			1						1						—
Operating Income			752						506						246
Other Income and Expenses, net			73						61						12
Interest Expense			243						206						37
Income Before Income Taxes			582						361						221
Income Tax Expense			87						52						35
Net Income			$	495					$	309					$	186

MD&A			DUKE ENERGY PROGRESS

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

Increase (Decrease) over prior period			2024
Residential sales			6.9		%
General service sales			5.1		%
Industrial sales			(6.3)		%
Wholesale power sales			8.8		%
Joint dispatch sales			17.4		%
Total sales			8.2		%
Average number of customers			2.1		%

Six Months Ended June 30, 2024, as compared to June 30, 2023

Operating Revenues. The variance was driven primarily by:

• a $185 million increase in fuel revenues due to higher fuel rates and volumes;

• a $93 million increase in retail sales due to improved weather compared to prior year, including the impacts of decoupling;

• a $93 million increase in weather-normal retail sales volumes;

• a $70 million increase due to higher pricing from the North Carolina and South Carolina rate cases; and

• a $19 million increase in wholesale revenues, net of fuel, due to higher sales volumes and capacity rates.

Operating Expenses. The variance was driven primarily by:

• a $183 million increase in fuel used in electric generation and purchased power primarily due to the recovery of fuel expenses and higher volumes, partially offset by lower natural gas prices; and

*•*a $34 million increase in depreciation and amortization primarily due to higher net amortizations driven by the North Carolina rate case.

Other Income and Expenses, net. The increase was primarily driven by other post-employment benefit activity and interest income.

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

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

DUKE ENERGY FLORIDA

Results of Operations

			Six Months Ended June 30,
(in millions)			2024						2023						Variance
Operating Revenues			$	3,152					$	3,292					$	(140)
Operating Expenses
Fuel used in electric generation and purchased power			1,128						1,333						(205)
Operation, maintenance and other			507						537						(30)
Depreciation and amortization			510						435						75
Property and other taxes			223						246						(23)
Impairment of assets and other charges			—						(1)						1
Total operating expenses			2,368						2,550						(182)
Gains on Sales of Other Assets and Other, net			1						1						—
Operating Income			785						743						42
Other Income and Expenses, net			46						37						9
Interest Expense			225						202						23
Income Before Income Taxes			606						578						28
Income Tax Expense			118						115						3
Net Income			$	488					$	463					$	25

MD&A			DUKE ENERGY FLORIDA

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			2024
Residential sales			0.5		%
General service sales			0.6		%
Industrial sales			(0.6)		%
Wholesale power sales			13.3		%
Total sales			1.5		%
Average number of customers			2.2		%

Six Months Ended June 30, 2024, as compared to June 30, 2023

Operating Revenues. The variance was driven primarily by:

• a $196 million decrease in fuel and capacity revenues primarily due to lower fuel and capacity rates;

• a $35 million decrease in storm revenues; and

• a $13 million decrease in franchise tax revenue primarily due to decreased revenues over prior year.

Partially offset by:

• a $38 million increase in Clean Energy Connection subscription revenues, higher residential fixed bill program revenues and higher transmission revenues;

• a $29 million increase due to higher pricing from the 2021 Settlement;

• a $22 million increase in retail sales due to improved weather compared to prior year; and

• a $16 million increase in rider revenues primarily due to higher rates for the Storm Protection Plan.

Operating Expenses. The variance was driven primarily by:

• a $205 million decrease in fuel used in electric generation and purchased power primarily due to lower purchased power costs driven by the expiration of contracts in the current year and lower fuel costs driven by lower natural gas prices and fuel cost recovery;

• a $30 million decrease in operation, maintenance and other primarily due to lower storm amortization; and

• a $23 million decrease in property and other taxes primarily due to lower property taxes and lower franchise and gross receipts tax driven by lower revenues.

Partially offset by:

• a $75 million increase in depreciation and amortization primarily due to lower amortization of the DOE settlement regulatory liability and higher depreciable base.

Interest Expense. The increase in interest expense is primarily driven by lower interest credits on recovery clauses due to lower deferred balances, higher outstanding debt balances and interest rates, partially offset by lower intercompany interest income.

MD&A			DUKE ENERGY OHIO

DUKE ENERGY OHIO

Results of Operations

			Six Months Ended June 30,
(in millions)			2024						2023						Variance
Operating Revenues
Regulated electric			$	934					$	939					$	(5)
Regulated natural gas			352						359						(7)
Total operating revenues			1,286						1,298						(12)
Operating Expenses
Fuel used in electric generation and purchased power			270						340						(70)
Cost of natural gas			82						112						(30)
Operation, maintenance and other			247						244						3
Depreciation and amortization			195						176						19
Property and other taxes			204						164						40
Total operating expenses			998						1,036						(38)
Operating Income			288						262						26
Other Income and Expenses, net			10						21						(11)
Interest Expense			92						79						13
Income Before Income Taxes			206						204						2
Income Tax Expense			35						33						2
Net Income			$	171					$	171					$	—

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			2024			2024
Residential sales			3.4		%	(0.6)		%
General service sales			4.8		%	(1.0)		%
Industrial sales			(3.5)		%	20.8		%
Wholesale electric power sales			65.8		%	n/a
Other natural gas sales			n/a			0.6		%
Total sales			3.1		%	1.3		%
Average number of customers			1.1		%	0.9		%

Six Months Ended June 30, 2024, as compared to June 30, 2023

Operating Revenues. The variance was driven primarily by:

• a $127 million decrease in fuel-related revenues primarily due to lower full-service retail sales volumes, as well as decreased natural gas costs.

Partially offset by:

• a $28 million increase in retail revenue riders primarily due to the Distribution Capital Investment Rider (DCI);

• a $26 million increase due to higher pricing due to the Duke Energy Ohio natural gas rate case, net of decreases in the Ohio CEP rider and Accelerated Main Replacement Program (AMRP) Rider;

• a $20 million increase in revenues related to higher Ohio Valley Electric Corporation (OVEC) rider collections and OVEC sales into PJM Interconnection, LLC (PJM);

• a $19 million increase due to higher pricing from the Duke Energy Kentucky electric rate case;

• a $10 million increase in transmission revenue; and

• a $9 million increase due to improved weather compared to prior year.

Operating Expenses. The variance was driven primarily by:

• a $100 million decrease in fuel expense primarily driven by lower retail prices for natural gas and purchased power, and a decrease in purchased power volumes.

MD&A			DUKE ENERGY OHIO

Partially offset by:

• a $40 million increase in property and other taxes primarily due to a higher base upon which property taxes are levied, partially offset by lower franchise taxes; and

• a $19 million increase in depreciation and amortization primarily driven by an increase in distribution plant in service and depreciation rates resulting from the Duke Energy Kentucky electric rate case implemented in 2023 and CEP deferrals in 2024.

Other Income and Expenses, net. The decrease was primarily driven by lower intercompany interest income.

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

DUKE ENERGY INDIANA

Results of Operations

			Six Months Ended June 30,
(in millions)			2024						2023						Variance
Operating Revenues			$	1,506					$	1,755					$	(249)
Operating Expenses
Fuel used in electric generation and purchased power			494						697						(203)
Operation, maintenance and other			341						364						(23)
Depreciation and amortization			341						327						14
Property and other taxes			30						25						5
Total operating expenses			1,206						1,413						(207)
Operating Income			300						342						(42)
Other Income and Expenses, net			28						28						—
Interest Expense			115						104						11
Income Before Income Taxes			213						266						(53)
Income Tax Expense			36						46						(10)
Net Income			$	177					$	220					$	(43)

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			2024
Residential sales			3.6		%
General service sales			2.0		%
Industrial sales			(1.0)		%
Wholesale power sales			13.1		%
Total sales			5.0		%
Average number of customers			1.7		%

Six Months Ended June 30, 2024, as compared to June 30, 2023

Operating Revenues. The variance was driven primarily by:

• a $221 million decrease in retail fuel revenues primarily due to lower fuel rates;

• a $25 million decrease in wholesale revenues, including fuel, primarily due to the expiration of a wholesale customer contract; and

• a $12 million decrease in weather-normal retail sales volumes.

Partially offset by:

• a $20 million increase in retail sales due to improved weather compared to prior year.

Operating Expenses. The variance was driven primarily by:

• a $203 million decrease in fuel used in electric generation and purchased power primarily due to lower deferred fuel amortization as well as lower purchased power expense and natural gas costs, partially offset by higher coal costs; and

• a $23 million decrease in operation, maintenance and other primarily due to lower outage costs.

Partially offset by:

• a $14 million increase in depreciation and amortization primarily due to a higher depreciable base.

MD&A			DUKE ENERGY INDIANA

Interest Expense. The variance is primarily due to higher outstanding debt balances and interest rates.

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

PIEDMONT

Results of Operations

			Six Months Ended June 30,
(in millions)			2024						2023						Variance
Operating Revenues			$	920					$	911					$	9
Operating Expenses
Cost of natural gas			228						265						(37)
Operation, maintenance and other			180						171						9
Depreciation and amortization			126						116						10
Property and other taxes			31						30						1
Impairment of assets and other charges			—						(4)						4
Total operating expenses			565						578						(13)
Operating Income			355						333						22
Other Income and Expenses, net			34						32						2
Interest Expense			88						79						9
Income Before Income Taxes			301						286						15
Income Tax Expense			59						51						8
Net Income			$	242					$	235					$	7

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			2024
Residential deliveries			14.8		%
Commercial deliveries			15.2		%
Industrial deliveries			1.2		%
Power generation deliveries			(0.2)		%
For resale			(0.7)		%
Total throughput deliveries			2.8		%
Secondary market volumes			(8.1)		%
Average number of customers			1.5		%

Six Months Ended June 30, 2024, as compared to June 30, 2023

Operating Revenues. The variance was driven primarily by:

• a $17 million increase due to Tennessee ARM revenues;

• a $12 million increase due to customer growth;

• a $12 million increase due to North Carolina IMR; and

• a $9 million increase due to rate stabilization mechanisms in South Carolina.

Partially offset by:

• a $37 million decrease due to lower natural gas costs passed through to customers and lower rates, partially offset by higher volumes.

Operating Expenses. The variance was driven primarily by:

• a $37 million decrease in cost of natural gas due to lower natural gas costs passed through to customers and lower rates, partially offset by higher volumes.

Partially offset by:

• a $10 million increase in depreciation and amortization due to additional plant in service; and

• a $9 million increase in operations, maintenance and other primarily due to higher outside services, labor and service company costs.

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

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

MD&A			LIQUIDITY AND CAPITAL RESOURCES

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 and projected tax credits to be generated relating to the IRA, Duke Energy does not expect to be a significant federal cash taxpayer until around 2030. Duke Energy’s Annual Report on Form 10-K for the year ended December 31, 2023, included a summary and detailed discussion of projected primary sources and uses of cash for 2024 to 2026.

In 2024, Duke Energy executed several equity forward sales agreements as part of the ATM program. Settlement of the forward sales agreements is expected to occur by December 31, 2024. See Note 15 to the Condensed Consolidated Financial Statements, “Stockholders’ Equity” for further details. Also in 2024, Duke Energy Carolinas and Duke Energy Progress began recording nuclear PTC deferred tax assets related to the IRA and anticipate monetizing the PTCs in the transferability markets established by the IRA beginning later in 2024. Duke Energy Carolinas and Duke Energy Progress will work with the state utility commissions on the appropriate regulatory process to pass the net realizable value back to customers over time. See Note 17 to the Condensed Consolidated Financial Statements, “Income Taxes,” for further information.

As of June 30, 2024, Duke Energy had $390 million of cash on hand and $5.6 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.

During the second quarter of 2024, Moody’s Investors Service, Inc. (Moody's) maintained the credit ratings and affirmed the ratings outlook for all of the Duke Energy Registrants, including Duke Energy Ohio. Operations in Kentucky are conducted through Duke Energy Ohio's wholly owned subsidiary, Duke Energy Kentucky. Moody's revised Duke Energy Kentucky's ratings outlook to stable, citing the expectation that a credit supportive outcome in the utility's most recent electric rate case will support credit metrics appropriate for its Baa1 rating.

As discussed in Note 13 to the Condensed Consolidated Financial Statements, "Variable Interest Entities," Duke Energy terminated and repaid CRC in March 2024 and Duke Energy Florida terminated and repaid DEFR in April 2024. As a result of these repayments, CRC and DEFR have ceased operations and no longer acquire the receivables of Duke Energy’s subsidiaries. Duke Energy Carolinas and Duke Energy Progress continue to evaluate financing opportunities and anticipate termination and repayment of the borrowing facilities of DERF and DEPR prior to their scheduled termination dates in January 2025 and April 2025, respectively.

Refer to Note 6 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. Additionally, see Note 2 to the Condensed Consolidated Financial Statements, "Dispositions," for the timing and use of proceeds from the sale of certain Commercial Renewables assets to affiliates of Brookfield.

Cash Flow Information

The following table summarizes Duke Energy’s cash flows.

						Six Months Ended
						June 30,
(in millions)						2024						2023
Cash flows provided by (used in):
Operating activities						$	5,427					$	3,785
Investing activities						(6,575)						(6,508)
Financing activities						1,274						2,687
Net increase (decrease) in cash, cash equivalents and restricted cash						126						(36)
Cash, cash equivalents and restricted cash at beginning of period						357						603
Cash, cash equivalents and restricted cash at end of period						$	483					$	567

OPERATING CASH FLOWS

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

						Six Months Ended
						June 30,
(in millions)						2024						2023						Variance
Net income						$	2,072					$	557					$	1,515
Non-cash adjustments to net income						3,234						4,085						(851)
Payments for asset retirement obligations						(262)						(261)						(1)
Working capital						(175)						(1,286)						1,111
Other assets and Other liabilities						558						690						(132)
Net cash provided by operating activities						$	5,427					$	3,785					$	1,642

MD&A			LIQUIDITY AND CAPITAL RESOURCES

The variance is primarily driven by:

• a $1,111 million decrease in net working capital amounts, primarily due to the recovery of deferred fuel costs and the timing of accruals and payments; and

• a $664 million increase in net income, after adjustment for non-cash items, primarily due to improved weather and favorable rate case impacts along with growth from riders and other margin, partially offset by higher interest expense.

INVESTING CASH FLOWS

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

						Six Months Ended
						June 30,
(in millions)						2024						2023						Variance
Capital, investment and acquisition expenditures						$	(6,212)					$	(6,287)					$	75
Other investing items						(363)						(221)						(142)
Net cash used in investing activities						$	(6,575)					$	(6,508)					$	(67)

The variance is primarily due to net proceeds of $111 million received in the prior year related to the sale of certain assets, partially offset by lower capital expenditures in the current year due to the sale of Commercial Renewables business in the prior year.

FINANCING CASH FLOWS

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

						Six Months Ended
						June 30,
(in millions)						2024						2023						Variance
Issuances of long-term debt, net						$	3,641					$	4,722					$	(1,081)
Notes payable, commercial paper and other short-term borrowings						(736)						(582)						(154)
Dividends paid						(1,590)						(1,606)						16
Contributions from noncontrolling interests						47						248						(201)
Other financing items						(88)						(95)						7
Net cash provided by financing activities						$	1,274					$	2,687					$	(1,413)

The variance is primarily due to:

• a $1,081 million decrease in proceeds from net issuances of long-term debt, primarily due to timing of issuances and redemptions of long-term debt;

• a $201 million decrease in contributions from noncontrolling interests; and

• a $154 million decrease 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 4, "Regulatory Matters," in Duke Energy's Annual Report on Form 10-K for the year ended December 31, 2023, for more information regarding potential plant retirements and Note 4, "Regulatory Matters," to the Condensed Consolidated Financial Statements, for further information regarding regulatory filings related to the Duke Energy Registrants.

In April 2024, the EPA issued the 2024 CCR Rule under the Resource Conservation and Recovery Act, which significantly expands the scope of the 2015 CCR Rule by establishing regulatory requirements for inactive surface impoundments at retired generating facilities (Legacy CCR Surface Impoundments). The final rule also imposes a subset of the 2015 CCR Rule’s requirements, including groundwater monitoring, corrective action (where necessary), and in certain cases, closure, and post-closure care requirements, on previously unregulated coal ash sources at regulated facilities (CCR Management Units). CCR Management Units may include surface impoundments and landfills that closed prior to the effective date of the 2015 CCR Rule, inactive CCR landfills, and other areas where CCR is managed directly on the land at Duke Energy facilities. Duke Energy, as part of a group of similarly affected electric utilities, intends to file a petition to challenge the 2024 CCR Rule in the U.S. Court of Appeals for the District of Columbia Circuit on August 6, 2024. For more information, see Note 7 to the Condensed Consolidated Financial Statements, "Asset Retirement Obligations."

MD&A			OTHER MATTERS

In April 2024, the EPA issued a final rule under section 111 of the Clean Air Act (EPA Rule 111) regulating GHG emissions from existing coal-fired and new natural gas-fired power plants, referred to as electric generating units (EGUs). EPA Rule 111 requires existing coal-fired power plants expected to operate in 2039 and beyond to reduce GHG emissions by 90% through the use of carbon capture and sequestration starting in 2032, subject to certain modifications for coal plants that retire sooner and co-fire natural gas. EPA Rule 111 also establishes GHG emissions reduction standards for new natural gas-fired EGUs, subject to carve-outs for smaller peaking units that fill gaps that cannot be met with renewables or storage. The EPA did not finalize emission guidelines for GHG emissions from existing fossil fuel-fired stationary combustion turbines and intends to address these in a future rulemaking. Duke Energy is analyzing the potential impacts the rule could have on the Company, which could be material and may influence the timing, nature, and magnitude of future generation investments in our service territories. Duke Energy is participating in legal challenges to EPA Rule 111 as a member of Electric Generators for a Sensible Transition, a coalition of similarly affected utilities, and as a member of a utility trade group.

Cost recovery for future expenditures is anticipated and will be pursued through the normal ratemaking process with federal and state utility commissions, which permit recovery of necessary and prudently incurred costs associated with Duke Energy’s regulated operations.

Generation Mix Planning Process

In August 2023, Duke Energy Carolinas and Duke Energy Progress filed their 2023 systemwide Carolinas Resource Plan (the Plan) with the NCUC and PSCSC. The Plan provided a range of generation options, including three core portfolios, reflecting an “all of the above” approach to powering the energy needs of our growing region. In the Plan, Duke Energy Carolinas and Duke Energy Progress recommended Portfolio 3 as the most prudent path forward to comply with applicable state laws, providing a reliable and orderly energy transition that was proposed as the most reasonable, executable, and lowest-cost plan for the Carolinas. Portfolio 3 proposes a diverse and reliable set of generation and energy storage solutions and shrinks the challenges of growth and the transition from coal by expanding industry-leading energy efficiency and demand response options, laying out a path to reliably exit coal by 2035. Portfolio 3 also makes the most of existing system resources by extending the lives of Duke Energy’s nuclear plants and extending the license and doubling the peak hourly capacity of the Bad Creek pumped-hydro storage facility. Near-term actions consistent with Portfolio 3 were also proposed that will be executed between now and the end of 2026 to advance the orderly energy transition.

In November 2023, Duke Energy Carolinas and Duke Energy Progress provided notice to the NCUC and PSCSC of a substantially increased load forecast resulting from increased economic development in the Carolinas occurring since the system-wide Plan was prepared. The companies filed supplemental modeling and analysis with the NCUC and PSCSC in January 2024, demonstrating the need for additional resources beyond the set of resources identified by the companies in their initial plan.

In July 2024, Duke Energy Carolinas and Duke Energy Progress reached a comprehensive settlement with the Public Staff of the NCUC, Walmart, and the Carolinas Clean Energy Business Association on the Plan, agreeing it is reasonable to use Portfolio 3 as the reference portfolio for planning purposes and to add sufficient new replacement generating resources to replace retiring capacity and meet future load growth on a schedule to achieve the interim 70% carbon emission reduction target by 2030 is unachievable and presents unacceptable risks to the reliability of the grid. Additionally, the agreement confirms the reasonableness of pursuing certain limited near-term development activities including those related to solar, battery storage, onshore wind, and certain natural gas generation assets, as well as certain limited actions exploring initial development activities related to advanced nuclear, offshore wind, and to advance the potential for 1,834 MW of pumped storage hydro at the Bad Creek II facility by 2034.

The settlement is subject to the review and approval of the NCUC. The NCUC is conducting evidentiary hearings in July and August 2024, with an order expected by the end of 2024. The PSCSC will hold its hearings in September 2024 with a decision expected in late November 2024.