DUK 10-K & 10-Q changes, risk factors and insider trading

Duke Energy’s future results could be adversely affected if it is unable to implement its business strategy to reliablyprovide reliable energy while maintaining low costs and affordably serve its customers while also balancing its grid and fleetenergy modernization objectives and carbon emissions reduction goals.reductions.

Duke Energy’s results of operations depend, in significant part, on the extent to which it can implement its business strategy and goals successfully. Duke Energy is working to meet growing and evolving customer energy needs while balancing customerreliability, reliability and affordability,costs and other priorities including the need to modernize its fleet and the regulatory construct.constructs. Duke Energy is subject to business, policy, regulatory, technology, economic and competitive uncertainties and contingencies, many of which are beyond its control and may make those goalsobjectives difficult to achieve.

Federal or state policies could be enacted that restrict the availability of, and increase the costs associated with the use of, fuels or generation technologies, such as natural gas or nuclear power, that enable Duke Energy to reduce its carbon emissions. For example, Duke Energy anticipates that its nuclear stations in North Carolina and South Carolina will continue to qualify for significant tax incentives in the form of nuclear production tax credits as allowed under the IRA.IRA and OBBBA. Nuclear energy is a reliable and clean energy source and nuclear tax incentives allowed under the IRA,allowed, including nuclear production tax credits, are expected to reduce the cost of the energy transition for our customers. If such nuclear production tax credits were eliminated or reduced, it could negatively impact our ability to return the anticipated cost benefits to customers.

Additionally, new EPA rules issued in April 2024 impose stringent GHG emission reduction standards, revised air toxic limits, and wastewater discharge limitations that may impact ourthe carbon-reductionachievement targets,of carbon-reductions, and operational timeline and costs associated with certain new and existing generation. Supportive policies may be needed to facilitate the siting and cost recovery of transmission and distribution upgrades needed to accommodate the build out of new generation facilities, including large volumes of renewables and energy storage. Further, the approval of our state regulators will be necessary for the Company to continue to retire existing carbon emitting assets or make investments in new generating capacity. The Company may be constrained by the ability to procure resources or labor needed to build new generation at a reasonable price as well as to construct projects on time. In addition, new technologies that are not yet commercially available or are unproven at utility scale will likely be needed, including carbon capture and sequestration and supporting infrastructure as well as new resources capable of following electric load over long durations such as advanced nuclear, hydrogen and long-duration storage. If these technologies are not developed or are not available at reasonable prices, or if we invest in early stage technologies that are then supplanted by technological breakthroughs, Duke Energy’s ability to achieve a net-zero targetcarbon emissions from electricity generation by 2050 at a cost-effective price could be at risk.

Meeting the evolving and growing energy needs of our customers will require continued operation of our existing carbon-free technologies including nuclear and renewables. The rapid transition to and expansion of certain low-carbon resources, such as renewables without cost-effective storage, may challenge our ability to meet customer expectations of reliability and affordabilityvalue in a carbon constrained environment, particularly as demand increases. Our nuclear fleet is central to our ability to meet these objectives and customer expectations. We are continuing toour seekwork to renew the operating licenses of the 11 reactors we operate at six nuclear stations for an additional 20 years, extending their operating lives to and beyond midcentury. Failure to receive approval from the NRC for the relicensing of any of these reactors could affect our ability to achieve a net-zero targetcarbon emissions from electricity generation by 2050.

As a consequence, Duke Energy may not be able to fully implement or realize the anticipated results of its energy transition strategy,modernization, which may have an adverse effect on its financial condition.

If legislative and regulatory structures were to evolve in such a way that the Duke Energy Registrants’ exclusive rights to serve their regulated customers were eroded, their earnings could be negatively impacted. Federal and state regulations, laws, commercialization and reduction of costs and other efforts designed to promote and expand the use of EE measures and distributed generation technologies, such as private solar and battery storage, in Duke Energy service territories could reduce recovery of fixed costs in Duke Energy service territories or result in customers leaving the electric distribution system andor an increase in customer net energy metering, which allows customers with private solar to receive bill credits for surplus power up to the full retail credit amount. Over time, customer adoption of these technologies or adoption of net metering regulatory structures could result in Duke Energy not being able to fully recover the costs andof investmentits in generation.investments.

State regulators have approved various mechanisms to stabilize natural gas utility margins, including margin decoupling in North Carolina and rate stabilization in South Carolina. Additionally, certain jurisdictions have established performance incentive mechanisms and revenue decoupling mechanisms for EU&I. Performance incentive mechanisms condition some portion of the respective utility's earnings on its performance on established measurable consumer, utility system,system or public policy outcomes. Revenue decoupling mechanisms provide periodic rate adjustments to ensure actual revenues match allowed revenues for certain customer classes. State regulators have also approved other margin stabilizing mechanisms that, for example, allow for recovery of margin losses associated with negotiated transactions designed to retain large volume customers that could use alternative fuels or that may otherwise directly access natural gas supply through their own connection to an interstate pipeline. If regulators decided to discontinue the Duke Energy Registrants' use of tariff mechanisms or other mechanisms intended to stabilize utility margins, it would negatively impact results of operations, financial position and cash flows. In addition, regulatory authorities also review whether naturalfuel gasand purchased power costs are prudently incurred and can disallow the recovery of a portion of natural gasthese costs that the Duke Energy Registrants seek to recover from customers, which would adversely impact earnings.earnings and cash flows.

Deregulation or restructuring in the electric industry may result in increasedIncreased competition and unrecovered costs that could adversely affect the Duke Energy Registrants’ results of operations, financial position or cash flows and their utility businesses.

The Duke Energy Registrants are subject to regulations under a wide variety of U.S. federal and state regulations and policies, including by FERC, NRC, EPA and various other federal agencies as well as the North American Electric Reliability Corporation. Regulation affects almost every aspect of the Duke Energy Registrants’ businesses, including, among other things, their ability to: take fundamental business management actions; determine the terms and rates for services; make acquisitions; issue equity or debt securities; engage in transactions with other subsidiaries and affiliates; and pay dividends upstream to the Duke Energy Registrants. Changes to federal regulations are continuous and ongoing. There can be no assurance that laws, regulations and policies, including tax incentives and credits, will not be changed in ways that result in material modifications of business models and objectives or affect returns on investment by restricting activities and products, subjecting them to escalating costs, causing delays, or prohibiting them outright, which could have a material effect on the Duke Energy Registrants' results of operations, financial position andor cash flows. Such potential changes that may have adverse consequences could include no longer allowing tax incentives and credits currently provided for under the IRA,IRA and OBBBA, including the ability to record or sell related tax credits to third parties.

The Duke Energy Registrants are subject to numerous environmental laws and regulations affecting many aspects of their present and future operations, including CCRs,CCR, air emissions, water quality, wastewater discharges, solid waste and hazardous waste. For example, new EPA rules issued in April 2024, among other things, impose stringent GHG emissions limitations on existing coal plants and new natural gas plants and more stringent air toxic limits on existing coal plants, increase limitations on wastewater discharge, and impose groundwater monitoring and corrective action requirements on previously unregulated coal ash sources at regulated facilities (CCR Management Units) and inactive surface impoundments at retired generating facilities (Legacy CCR Surface Impoundments). Potential legal challenges to such rules or actions to repeal or modify requirements may not be successful, and adherence to these rules may increase the cost of compliance, impact generation resource mixmix, andforce carbon-reductioncarbon targets,reductions andor negatively impact customer reliability and affordabilityperceived duevalue. toFor suchexample, rules'EPA impositionRule of111 as issued imposes stringent GHG emissions limitations and reliance on carbon capture technologies that are not yet adequately demonstrated at utility scale. These and other environmental laws and regulations can result in increased capital, operating and other costs. Additionally, new state legislation in response to such regulations could impose carbon reduction objectives that are more aggressive than the Company's plans. These regulations may require the Duke Energy Registrants to make additional capital expenditures or increase operating and maintenance costs.

These laws and regulations generally require the Duke Energy Registrants to obtain and comply with a wide variety of environmental licenses, permits, inspections and other approvals. Compliance with environmental laws and regulations can require significant expenditures, including expenditures for cleanup costs and damages arising from contaminated properties. Failure to comply with environmental regulations may result in the imposition of fines, penalties and injunctive measures affecting operating assets, as well as reputational damage. The steps the Duke Energy Registrants could be required to take to ensure their facilities are in compliance could be prohibitively expensive. As a result, the Duke Energy Registrants may be required to shut down or alter the operation of their facilities, which may cause the Duke Energy Registrants to incur losses. Further, the Duke Energy Registrants may not be successful in recovering capital and operating costs incurred to comply with new environmental regulations through existing regulatory rate structures and their contracts with customers. Also, the Duke Energy Registrants may not be able to obtain or maintain from time to time all required environmental regulatory approvals for their operating assets or development projects. Delays in obtaining any required environmental regulatory approvals, failure to obtain and comply with them or changes in environmental laws or regulations to more stringent compliance levels could, and are likely to, result in additional costs of operation for existing facilities or development of new facilities being prevented, delayed or subject to additional costs. The costs to comply with environmental laws and regulations could have a material effect on the Duke Energy Registrants’ results of operations, financial position andor cash flows.

There is continued concern, and increasing and conflicting activism, both nationally and internationally, about global climate change. The EPA and state regulators have, and may adopt and implement, additional regulations to restrict emissions of GHGs to address global climate change, as well as reporting requirements regarding such emissions and related climate-goal claims. Certain local and state jurisdictions have also enacted laws to restrict or prevent new natural gas infrastructure. Increased regulation of GHG emissions and reporting requirements could impose significant additional costs on the Duke Energy Registrants' electric and natural gas operations, their suppliers and customers and affect demand for energy conservation and renewable products, which could impact both our electric and natural gas businesses. Regulatory changes and/or uncertainty of applicability of such legislative and regulatory initiatives could also result in generation facilities to be retired earlier than planned to meet ourachieve net-zero 2050carbon goal.emissions from electricity generation by 2050. Though we would plan to seek cost recovery for investments related to GHG emissionsemission reductions through regulatory rate structures, changes in the regulatory climate could result in the delay in or failure to fully recover such costs and investmentinvestments, including in generation.

A continuation of adverse economic conditions including economic downturn or high commodity prices could also negatively impact the financial stability of certain of our customers and result in their inability to pay for electric and natural gas services. This could lead to increased bad debt expense and higher allowance for doubtful account reserves for the Duke Energy Registrants and result in delayed or unrecovered operating costs and lower financial results. Additionally, prolonged economic downturns that negatively impact the Duke Energy Registrants’ results of operations and cash flows could result in future material impairment charges to write-down the carrying value of certain assets, including goodwill, to their respective fair values. The Duke Energy Registrants also monitor the impacts of inflation on the procurement of goods and services and seek to minimize its effects in future periods through pricing strategies, productivity improvements, and cost reductions. Rapidly rising prices as a result of inflation, tariffs, or other factors may impact the ability of the Company to recover costs timely or execute on its business strategy including the achievement of growth objectives.

Factors that could impact sales volumes, generation of electricity and market prices at which the Duke Energy Registrants are able to sell electricity and natural gas areinclude asthe followsfollowing:

•transmission or transportation constraintsconstraints, orpurchased inefficienciespower availability and competitive alternative energy sources;

Natural disasters or operational accidents within the Company or industry (such as wild fires, earthquakes, hurricanes or natural gas transmission pipeline explosions) could have direct or indirect impacts to the Duke Energy Registrants or to key contractors and suppliers. Such events cancan, and in the past,past have, negatively impacted sales volumevolumes such as in the case of storm-related customer outages resulting in lower usage,usage. and costsCosts to restore service and rebuild assets after such events may be, and in the case of hurricanes Helene and Milton experienced in 2024, have been,be material and didcould impact the results of operations, financial position or cash flows of the Duke Energy Registrants, and such events may do so in the future, until complete and timely cost recovery is approved and occurs under existing relevant regulatory mechanisms across our jurisdictions. Further, the generation of electricity and the transportation and storage of natural gas involve inherent operating risks that may result in accidents involving serious injury or loss of life, environmental damage or property damage. Such events could impact the Duke Energy Registrants through civil or criminal legal proceedings or changes to policies, laws and regulations whose compliance costs have a significant impact on the Duke Energy Registrants’ results of operations, financial position and cash flows. In addition, if a serious operational accident were to occur, existing insurance policies may not cover all of the potential exposures or the actual amount of loss incurred, including potential litigation awards. Any losses not covered by insurance, or any increases in the cost of applicable insurance as a result of such accident, could have a material adverse effect on the results of operations, financial position, cash flows and reputation of the Duke Energy Registrants.

The reputation and financial condition of the Duke Energy Registrants could be negatively impacted due to their obligations to comply with federal and state regulations, laws, and other legal requirements that govern the operations, assessments, storage, closure, remediation, disposal and monitoring relating to CCR, the high costs and new rate impacts associated with implementing these new CCR-related requirements and the strategies and methods necessary to implement these requirements in compliance with these legal obligations.

As a result of electricity produced for decades at coal-fired power plants, the Duke Energy Registrants manage large amounts of CCR that are primarily stored in dry storage within landfills or combined with water in surface impoundments, all in compliance with applicable regulatory requirements. A CCR-related operational incident could have a material adverse impact on the reputation and results of operations, financial position andor cash flows of the Duke Energy Registrants.

The 2024 CCR Rule significantly expands the scope of the 2015 CCR Rule to apply to legacy CCR surface impoundments (inactive impoundments at retired facilities) and CCR management units (previously unregulated coal ash sources at regulated facilities). These federalFederal and state laws, regulations and other legal requirementsrequirements, including those related to the 2015 CCR Rule and 2024 CCR Rule, may require or result in additional expenditures, including increased operating and maintenance costs, which could affect the results of operations, financial position andor cash flows of the Duke Energy Registrants. The Duke Energy Registrants will continue to seek full cost recovery for expenditures through the normal ratemaking process with state and federal utility commissions, who permit recovery in rates of reasonable and prudently incurred costs associated with the Duke Energy Registrants’ regulated operations, and through other wholesale contracts with terms that contemplate recovery of such costs, although there is no guarantee of full cost recovery. In addition, the timing for and amount of recovery of such costs could have a material adverse impact on Duke Energy's cash flows.

Growth inand retention of customer accounts and growth of customer usage each directly influence demand for electricity and natural gas and the need for additional power generation and delivery facilities. Customer growth and customer usage are affected by several factors outside the control of the Duke Energy Registrants, such as mandated EE measures, demand-side management goals, advancements in technology that may impact the energy usage by large commercial customers, such as data centers, distributed generation resources and economic and demographic conditions, such as inflation, tariffs, and interest rate volatility, population changes, job and income growth, housing starts, new business formation and the overall level of economic activity.

In addition, certain regulatory and legislative bodies have passedFederal legislation implementingenacted in 2025 eliminated the long‑term extension of certain tax credits to be used toward the costs of residential solar installationtax orcredits, havecausing introduced or are considering requirements and/orthese incentives to reduceexpire after 2025, however, some states continue to offer or consider solar or energy consumptionefficiency byincentives. certainSuch datesincentives, inalong response to concerns related to climate change. Additionally,with technological advances driven by federal laws mandating new levels of EE in end-use electric and natural gas devices or other improvements in or applications of technologytechnology, could lead to declines in per capita energy consumption.

Some or all of these factors could result in a lack of growth or decline in customer demand for electricity or number of customers and may cause the failure of the Duke Energy Registrants to fully realize anticipated benefits from significant capital investments and expenditures, which could have a material adverse effect on their results of operations, financial position andor cash flows.

Furthermore, the Duke Energy Registrants currently have EE riders in place to recover the cost of EE programs in North Carolina, South Carolina, Florida, Indiana,Indiana and Kentucky. Should the Duke Energy Registrants be required to invest in conservation measures that result in reduced sales from effective conservation, regulatory lag in adjusting rates for the impact of these measures could have a negative financial impact.

Duke Energy’s ability to execute its strategy and achieve anticipated financial outcomes are influenced by the expectations of our customers, regulators, investors and stakeholders. Those expectations are based in part on the core fundamentals of reliability and affordabilityvalue but are also increasingly focused on our ability to meet rapidly changing demands for new and varied products, services and offerings. Additionally, the risks of global climate change continue to shape our customers’ sustainability goalsobjectives and energy needs as well as the investment and financing criteria of investors. Failure to meet these increasing expectations or to adequately address the risks and external pressures from regulators, customers, investors and other stakeholders may impact Duke Energy’s reputation andreputation, affect its ability to achieve favorable outcomes in future rate cases andor impact the results of operations for the Duke Energy Registrants. Furthermore, the increasing use of social media and conflicting expectations and demands regarding environmental, social, and governance concerns, may accelerate and increase the potential scope of negative publicity we might receive and could increase the negative impact on our reputation, business, results of operations andor financial condition.

As it relates to electric generation, a diversified fleet with increasingly clean generation resources may facilitate more efficient financing and lower costs. Conversely, jurisdictions utilizing more carbon-intensive generation such as coal may experience difficulty attracting certain investors and obtaining the most economical financing terms available. Furthermore, with thisa heightened emphasis on environmental, social, and governance concerns, and climate change in particular, there is an increased risk of litigation, activism, and legislation from groups both in support of and opposed to various environmental, social and governance initiatives, which could cause delays and increase the costs of our energy transition.modernization.

Electric power generation and natural gas distribution are generally seasonal businesses. In most parts of the U.S., the demand for power peaks during the warmer summer months, with market prices also typically peaking at that time. In other areas, demand for power peaks during the winter. Demand for natural gas peaks during the winter months. Further, changing frequency or magnitude of extreme weather conditions such as hurricanes, droughts, heat waves, winter storms and severe weather, including from climate change, could cause these seasonal fluctuations to be more pronounced. As a result, the overall operating results of the Duke Energy Registrants’ businesses may fluctuate substantially on a seasonal and quarterly basis and thus makemakes period-to-period comparison less relevant.

Sustained severe drought conditions could impact generation by hydroelectric plants, as well as fossil and nuclear plant operations, as these facilities use water for cooling purposes and for the operation of environmental compliance equipment. Furthermore, destruction caused by severe weather events, such as hurricanes, flooding, tornadoes, severe thunderstorms, snow and ice storms, droughts, extreme temperatures, and wild fires, including from climate change, can result in lost operating revenues due to outages, property damage or total loss, including downed transmission and distribution lines, personal injury, reputational harm, and additional and unexpected expenses to mitigate storm damage, including incremental financing costs. The cost of storm restoration efforts may not be fully recoverable or recoverable on a timely basis through the regulatory process and may impact the results of operations, financial position or cash flows of the Duke Energy Registrants.

The Duke Energy Registrants are exposed to the effects of market fluctuations in the price of natural gas, coal, fuel oil, nuclear fuel, electricity and other energy-related commodities as a result of their ownership of energy-related assets. Fuel costs are recovered primarily through cost recovery clauses, subject to the approval of state utility commissions. Additionally, the Duke Energy Registrants are exposed to risk that counterparties will not be able to fulfill their obligations. Disruption in the delivery of fuel, including disruptions as a result of, among other things, changing economic conditions, bankruptcies, transportation delays, weather, labor relations, physical or cyber attack, force majeure events or environmental regulations affecting any of these fuel suppliers, could limit the Duke Energy Registrants' ability to operate their facilities. Should counterparties fail to perform, the Duke Energy Registrants might be forced to replace the underlying commitment at prevailing market prices possibly resulting in losses in addition to the amounts, if any, already paid to the counterparties.

Certain of the Duke Energy Registrants’ hedge agreements may result in the receipt of, or posting of, collateral with counterparties, depending on the daily market-based calculation of financial exposure of the derivative positions. Fluctuations in commodity prices that lead to the return of collateral received and/or the posting of collateral with counterparties could negatively impact liquidity. Downgrades in the Duke Energy Registrants’ credit ratings could also lead to additional collateral posting requirements. The Duke Energy Registrants continually monitor derivative positions in relation to market price activity.

Cybersecurity risks have increased in recent years as a result of the proliferation of new technologiestechnologies, and the increased sophistication, magnitude and frequency of cyberattacks and data security breaches. Duke Energy relies on the continued operation of advanced digital information and operational technology systems and network infrastructure, which are part of an interconnected regional grid. Additionally, connectivity to the internet continues to increase through grid modernization and other operational excellence initiatives. Furthermore, AI, including generative AI, may be used to facilitate or perpetrate these cybersecurity threats. Duke Energy’s use of generative AI (and use by their vendors and agents) may subject them to data privacy, legal, regulatory and security risks. Because of the critical nature of the infrastructure, increased connectivity to the internetinternet, external networks, mandatory reliability and safety obligations, and technology systems’ inherent vulnerability to disability or failures due to hacking, viruses, acts of war or terrorism or other types of data security breaches, the Duke Energy Registrants face a heightened risk of cyberattacks from foreignforeign, nation-state or domestic sources and have been subject, and will likely continue to be subject, to cyberattacks designed to gain unauthorized access to information and/or information systems or to disrupt utility operations through computer viruses and phishing attempts either directly or indirectly through its material vendors or related third parties. In addition, advances in emerging technologies such as quantum computing could, over time, be used to break standard encryption methods, compromise secure connections or otherwise conduct cyberattacks of increasing sophistication. In the event of a significant cybersecurity breach on either the Duke Energy Registrants or with one of our material vendors or related third parties, the Duke Energy Registrants could (i) have business operations disrupted, including the disruption of the operation of our natural gas and electric assets and the power grid, theft of confidential company, employee, retiree, shareholder, vendor or customer information, and general business systems and process interruption or compromise, including preventing the Duke Energy Registrants from servicing customers, collecting revenues or the recording, processing and/or reporting financial information correctly, (ii) experience substantial loss of revenues, repair and restoration costs, penalties and costs for lack of compliance with relevant regulations, implementation costs for additional security measures to avert future cyberattacks and other financial loss and (iii) be subject to increased regulation, litigation and reputational damage. While Duke Energy maintains insurance relating to cybersecurity events, such insurance does not protect Duke Energy from such cyberattacks occurring, and while it does provide some potential mitigation of the financial impacts resulting from such cyberattacks, it is subject to a number of exclusions and may be insufficient to offset any losses, costs or damage experienced. Also, the market for cybersecurity insurance is relatively new and coverage available for cybersecurity events is evolving as the industry matures.

The Duke Energy Registrants are subject to standards enacted by the North American Electric Reliability Corporation and enforced by FERC regarding protection of the physical and cybersecurity of critical infrastructure assets required for operating North America's bulk electric system. The Duke Energy Registrants are also subject to regulations set by the NRC regarding the protection of digital computer and communication systems and networks required for the operation of nuclear power plants. The Duke Energy Registrants that operate designated critical pipelines that transport natural gas are also subject to security directives issued by the Department of Homeland Security's Transportation Security Administration (TSA) requiring such registrants to implement specific cybersecurity mitigation measures. While the Duke Energy Registrants believe they are in compliance with, or, in the case of recent TSA security directives, are in the process of implementing such standards and regulations, the Duke Energy Registrants have from time to time been, and may in the future be, found to be in violation of such standards and regulations. In addition, compliance with or changes in the applicable standards and regulations may subject the Duke Energy Registrants to higher operating costs and/or increased capital expenditures as well as substantial fines for non-compliance.

The COVID-19 pandemic and efforts to respond to it resulted in widespread adverse consequences on the global economy and on the Duke Energy Registrants’ customers, third-party vendors, and other parties with whom we do business. If another pandemic or health epidemic or outbreak occurs and is significantly prolonged, it could impact the Duke Energy Registrants' business strategy, results of operations, financial position andor cash flows in the future as a result of delays in rate cases or other legal proceedings, an inability to obtain labor or equipment necessary for the construction of large capital projects, an inability to procure satisfactory levels of fuels or other necessary equipment for the continued production of electricity andor delivery of natural gas, volatility in global equity securities markets, and the health and availability of our critical personnel and their ability to perform business functions.

The rules governing the various regional power markets may change, which could affect Duke Energy Ohio’s and Duke Energy Indiana’s costs and/or revenues. Both Duke Energy Ohio and Duke Energy Indiana have trackers to recover approved RTO costs, but to the degree Duke Energy Ohio and Duke Energy Indiana incur significant additional fees and increased costs to participate in an RTO that are not approved for recovery, their results of operations may be impacted. Duke Energy Ohio and Duke Energy Indiana may be allocated a portion of the cost of transmission facilities built by others due to changes in RTO transmission rate design, while being able to allocate costs of projects built by Duke Energy Ohio and Duke Energy Indiana to others. Duke Energy Ohio and Duke Energy Indiana may be required to expand their transmission system according to decisions made by an RTO rather than their own internal planning process. In addition, RTOs have been developing rules associated with the allocation and methodology of assigning costs associated with improved transmission reliability, reduced transmission congestion and firm transmission rights that may have a financial impact on the results of operations, financial position andor cash flows of Duke Energy Ohio and Duke Energy Indiana.

While we strive to maintain constructive communications with our shareholders, activist shareholders may, from time to time, engage in proxy solicitations or advance shareholder proposals, or otherwise attempt to affect changes and assert influence on our Board and management. Perceived uncertainties as to the future direction or governance of the Company may cause concern to our current or potential regulators, vendors or strategic partners, or make it more difficult to execute on our strategy or to attract and retain qualified personnel, which may have a material impact on our business and operating results. In addition, actions such as those described above could cause fluctuations in the trading price of our common stock, based on temporary or speculative market perceptions or other factors that do not necessarily reflect the underlying fundamentals or prospects of our business.

The following combined Management’s Discussion and Analysis of Financial Condition and Results of Operations is separately filed by Duke Energy Corporation and its subsidiaries.subsidiaries Duke Energy Carolinas, LLC, Progress Energy, Inc., Duke Energy Progress, LLC, Duke Energy Florida, LLC, Duke Energy Ohio, Inc., Duke Energy Indiana, LLC and Piedmont Natural Gas Company, Inc. 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's 20242025 Net Income Available to Duke Energy Corporation (GAAP Reported Earnings) increased primarily due to higher impairments on the salerecovery of thegrowing Commercialinfrastructure Renewablesinvestments businessto serve customers and growth in theour priorservice year. Additional drivers primarily include growth from rate increases and riders, improved weather and higher sales volumes,territories, partially offset by higher operation and maintenance expense, interest expense, property taxes and depreciation on a growing asset base and storm costs, along with a higher effective tax rate.base. See “Results of Operations” below for a detailed discussion of the consolidated results of operations and a detailed discussion ofthe financial results for each of Duke Energy’s reportable business segments, as well as Other.

Preparation,The effective execution of our storm response was on full display beginning in late 2024 as a result of a historic storm season that included hurricanes Debby, Helene and Milton. Our preparation, sound execution,execution and a comprehensive communication strategy helped us to respond quickly and build stakeholder loyalty and support as we continuecompleted the important work of rebuilding our communities, including power infrastructure in the hardest-hit areas of our service territories. WhileThis year included fewer large storms but we remained focused on minimizing customer bill impacts from the historic 2024 storm season by seeking insurance recovery and securitization of storm related costs in jurisdictions where permitted. To minimize the financing costs related to these historic storms created incremental financing needs,storms, we are workingworked with ourthe state commissions to appropriatelytimely track and recover storm costs under our approved regulatory frameworks on a timely basis. We also remain focused on balancing the bill impacts on our customers,frameworks, including seeking insurancestorm recovery charges in Florida and the securitization of relatedstorm costs in certainthe jurisdictions,Carolinas asso appropriate.that storm costs are fully recovered across all jurisdictions by early 2026. For more information, see "Matters Impacting Future Results," "Liquidity and Capital Resources," and Notes 4 and 7 to the Consolidated Financial Statements, "Regulatory Matters" and "Debt and Credit Facilities."

Despite the extreme weather and operational challenges with storm response, ourOur generation fleet and nuclearelectric sitestransmission and distribution systems delivered strong performance throughout the year and our electric distribution system performed well. In addition to unprecedented storm response, most of our service territories experienced above-average temperatures this summer, including the warmest July on record in Florida, new energy peaks in the Carolinas and weather alerts from PJM and MISO in the Midwest.year. In January 2025, due to 65 hours of freezing or below freezing temperatures, Duke Energy Carolinas and Duke Energy Progress achieved a new record for combined peak usage.usage due to 65 hours of freezing or below freezing temperatures and that combined peak was again surpassed in January 2026 as a result of Winter Storm Fern. Additionally, a summer heat wave brought triple-digit temperatures to parts of North Carolina and South Carolina in June 2025, and our customers set a new summertime record for electricity usage, surpassing the previous record set in July 2024. We effectively prepared for the arrival of extreme weather andthrough deliveredthe onidentification our customer commitments, identifyingof potential risks, effectively maintaining adequate short-term planning reserves, leveraging outage scheduling optimization,optimization and controlling planned and emergent equipment issues. Effective operations and flexibility by our generation and transmission teams managed these tight margins in an efficient manner and ensured the integrity of the grid our customers rely upon. We will continue to practice our forecasting, grid assessment, oversight,oversight and governance processes as extreme weather challenges operations from time to time, evaluate lessons learned and enhance our strategy and communications to effectively serve our customers now and in the future. Our ability to effectively handle all facets of the 2024 storm response efforts while making ongoing investments to enhance the reliability and physical security of the grid is a testament to our team’s extensive preparation and coordination, applying lessons learned from previous storms, and on-the-ground management throughout the restoration efforts. Duke Energy has received 20 Emergency Response Awards since EEI began recognizing storm response in 1998 (including 11 for assisting other utilities).

The safety and health of our workforce is a core value and we remain an industry leader in personal safety as measured by the Occupational Safety and Health Administration's (OSHA) Total Incident Case Rate (TICR). We closely tracked 2023's record-setting2024's safety results with our 20242025 TICR again coming in belowbetter than target and finishing 2025 with 100 OSHA recordable injuries. We also anticipate ranking first among North American combined gas and electric companies in an annual industry safety survey for the 10th11th consecutive year. We expect our gas operations organization to finish in the top 10% according to a gas industry survey for the fourth year in a row. Following on our historic success from 2023, we finished 2024 with less than 100 OSHA recordable injuries. In addition, we achievedcontinued significantto see excellent year-over-year improvement in environmental performance as measured by internal metrics and had no significant environmental events.

Overall, 20242025 was a very active year as it relates tofor regulatory filings, which reflects the important investments and ongoing energy transitionmodernization activity across all of our service territories. We continuedreached comprehensive settlements in many of our proceedings this year and continue to move forward a variety of regulatory initiatives forward this year,initiatives, including the following:

We continue to balance reliability and affordability in light of expectedexpect increases in long-term demand for electricity in our service territories in the coming decades. While we continue to target a transition out of coal by 2035, subject to regulatory approvals,and our focus remains on meeting the growing and evolving energy needs of our customers through a long-range, enterprise strategy that involves modernizing our assets with reliability and affordabilityfocus topon ofcustomer mind.value. Although our path will not be linear as we retireintegrate new resources, evaluate coal generation and bringmeet newthe generationrising resourcesenergy online,needs driven by economic and hyperscale load growth, we have already made strong progress to date in reducing carbon emissions from electricity generation (with a 44%43% reduction from 2005) levels. Subject to not compromising reliability and haveaffordability, establishedobtaining goalsrequired state and federal regulatory approvals, the availability of new technologies and substantive permitting reform, we expect to docontinue moreon (50%a reduction by 2030, 80% by 2040, and net zero by 2050). We are also workingpath to reducenet-zero Scope 2 and certain Scope 3 emissions, includingcarbon emissions from upstreamelectricity purchased power and fossil fuel purchases, as well as downstream customer use of natural gas, by 50% by 2035, on the way to net zerogeneration by 2050.

Over the next decade, we expect to deploy between approximately $190$200 billion and $200$220 billion of capital into our regulated businesses,businesses. driven byOur energy transitionmodernization investments are designed to ensure reliable, affordable,reliable and cleanercost-effective energy while meeting expected growth in long-term energy demand and already include approximately 7,500 MW of new natural gas generation projects under construction or seeking regulatory approval across our service territories. We're making decisions rooted in thevalue comingfor decades.our Thesecustomers and these investments will maintain reliability and affordability,reliability, drive economic benefits for the communities we serve, deliver cleaner energy and reduce our customers' exposure toincrease fuel volatility.diversity. We have filed and refined comprehensive IRPs consistent with this strategy in multiple jurisdictions, including updates to the systemwide Carolinas resource plan in late 2025, allowing us to make neededthe necessary investments to meet an expected increase in demand, strengthen grid resiliencyresiliency, and enableevaluate coal plant retirements, and enable advanced natural gas generation facilities, renewables and energy storage. We are also leveraging new technology, including AI and digital tools and data analytics across the business in response to a transforming landscape. AI is being leveraged across the organization to improve reliability, optimize grid operations, enhance customer service and accelerate business transformation. This year, we deployed a personal productivity generative AI tool to approximately 10,000 employees across the enterprise and we continue to assess and prioritize high-impact investment opportunities including the development of agentic AI tools.

We are leveraging new technology, digital tools and data analytics across the business in response to a transforming landscape and ourOur grid improvement programs continue to be a key component of our growth strategy. ModernizationIn 2025, we developed and implemented a standardized data center delivery design that is repeatable, scalable and minimizes risk to meet capacity demands for AI expansion and economic growth. Further modernization of the electric grid, including smart meters, storm hardening, self-healing and targeted undergrounding, also helps to ensure the system is better prepared for severe weather, improves the system's reliability and flexibility, and provides better information and services for our customers. We continue to enhance our customers' experience with the Self-Optimizing Grid (SOG), our flagship grid improvement program spanning all of Duke Energy’s regulated utilities. In 2024,2025, oursmart, SOGself-healing investmentstechnology helped to avoid approximately 925,0002.2 million customer interruptionsoutages across ourDuke Energy’s six-state electric service area,territory, preventingsaving customersaround from having more than 8.65.2 million hours of losttotal outage timetime. Around one-third of those benefits were achieved during major events.storms, providing a powerful tool for field crews working to restore power in the wake of severe weather. As of December 31, 2025, nearly 75% of our electric customers now benefit from self-healing technology on main power distribution lines – more than double the number served by this innovative technology just three years ago.

Investments in integrity management of our natural gas infrastructure continue to be of importanceimportant to ensure reliable, safe,safe and increasingly clean delivery of natural gas to our customers. In ourOur LDC business,business we remainremains focused on reducing methane emissions, leveraging our partnerships, emissions platform, sensors and other technologies to find and fix leaks in near real time. We also use cross compression to avoid releasing natural gas into the atmosphere during certain operational activities.

Macroeconomic Environment. As the investment needs of our utilities accelerate, customer value remains front and center and we are committed to addressing the needs of all of our customers – from large industrials competing against a global market to residential customers managing their household budgets. Duke Energy has a demonstrated track record of driving efficiencies and productivity into our business while executing on our business plans while driving efficiencies and productivity in the business.plans. Despite higherelevated interest rates and navigating the operational and financial impacts of unprecedentedinflation, hurricanessupply acrosschain ourdisruptions serviceand territories,tariff uncertainty, we achieved financial results withinabove the midpoint of our adjusted EPS guidance range and continued our cost-management journey with a focus on driving productivity, increasing flexibility and prioritizing spend based on risk and strategic value to our customers and investors. We've built a culture of continuous improvement and continue to identify ways to reduce operating costs, remaining focused on organization simplification, automation, outsourcingautomation and continued operational excellence.

Recent macroeconomic headwinds aside, the level of economic development success and growth experienced in our service territories iscontinues to be significantly above what we have experienced over the last two decades. We successfully worked with our state partners to win 7887 economic development projects in 2024 alone,2025, representing approximatelyover $26$30 billion in new capital investment and overapproximately 16,00029,000 new jobs within our service territories. These projects include transformational lifemanufacturing, sciences,logistics, automotive,energy, and semiconductorslife sciences facilities as well as data centers.centers, including Amazon's planned $10 billion investment to launch a new high-tech cloud computing and AI innovation campus in Richmond County, North Carolina. The site selected for this project was included in Duke Energy's Site Readiness Program in 2019, a program that helps state, regional and local economic development partners increase the competitiveness of potential industrial land. The investment is expected to be among the largest in North Carolina's history. Supporting the increasingincreased generation load demands expected from projects like these in the coming years is an immense opportunity for our Company and a testament to the impactful and ongoing work of continuing to bring economic development success to the communities we proudly serve.

Customer Satisfaction. Duke Energy continues to transform the customer experience through ourthe use of customer data to better inform operational priorities and performance levels. This data-driven approach allows us to identify the investments that are most important to the customer experience. While customer satisfaction across our industry continues to be impacted by theinflationary macroeconomic environmentpressures and the impactsimpact of inflationaryongoing pressuresrate includingcase higher fuel prices and interest ratesactivity on customer bills, our work continues to be recognized by ourcustomers customers, withthrough strong customer satisfaction scores in ourseveral jurisdictions including Piedmont,Duke whichEnergy wasCarolinas, rankedDuke No.Energy 1Progress, inDuke customerEnergy satisfactionFlorida and Piedmont as measured by J.D. PowerPower. Additionally, with a growing national narrative on the impact of data centers and the build out of electric utility infrastructure in support of AI we remain focused on prioritizing what matters most to our customers, which is reliable service at a reasonable cost and transparent solutions that allow for residentialinformed naturalchoices gasand serviceprovide inobservable the south for the third year in a row.value.

At Duke Energy, our business strategy centers on meeting rapidly growing energy needs and powering the modern economy, while delivering reliable, affordablereliable and cleanercost-effective energy and value to our customers and communities. To meet these goals, we are safely transforming and readying our system by investing in secureinnovative technologies, replacing aging and innovativeless technologies,efficient generating resources, modernizing our gas and electric infrastructure and integrating efficiencyefficiency, resiliency and demand management programs. AsThe wedeployment transitionof more modern critical infrastructure will meet our businesscustomers’ torapidly meetevolving anticipatedenergy increased long-term demand while delivering more efficient sources of energy, we are focused on creating sustainable value for our customersdemands and shareholdersreduce by leveraging business transformation to exceed customer expectations, optimizing investments to drive attractive shareholder returns and providing new product offerings and solutions that deliver growth and customer value. To achieve these objectives, we are partnering with stakeholders, championing public policy that advances innovation and continuing to leverage regulatory models that support the delivery of reliable energy, timely cost recovery and affordable customer rates.emissions.

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

In April 2024, the EPA issued final rules under section 111 of the Clean Air Act (EPA Rule 111) regulating GHG emissions from existing coal-fired and new natural gas-fired power plants. DukeCompliance Energywith isEPA analyzingRule the111 potentialas impactsissued the rules couldwould have a material impact on the Company, which could be material and may influence the timing, nature,nature and magnitude of future generation investments in our service territories. Cost recovery for future expenditures will be pursued through the normal ratemaking process with federal and state utility commissions, which permit recovery of reasonable and prudently incurred costs associated with Duke Energy’s regulated operations. Duke Energy is participating in legal challenges to the final rules. In June 2025, the EPA published a proposed rule to repeal EPA Rule 111 as well as an alternative proposal to repeal a narrower set of requirements. For more information, see "Other Matters."

The Company continues to monitor the ongoing stability of markets for key materials and publicsupplies, including potential restrictions on the trade of certain rare earth materials and technologies used in electric utility infrastructure. Public policy outcomes, including the potential impacts from possible new tariffstariffs, changes in existing tariffs, or other actions from thefederal newexecutive presidentialorders, administrationfederal thatlegislation or other rulemakings, could disrupt or impact Duke Energy's supply chain, future financial results, capital plan execution or the achievementability ofto itsexecute on the Company's vision for a smarter energy transition.future.

The Duke Energy Registrants performed their annual goodwill impairment tests as of August 31, 2024,2025, as described in Note 12 to the Consolidated Financial Statements, "Goodwill and Intangible Assets." As of thisthat 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 noNo goodwill impairment charges have beenwere recorded in the accompanying Consolidated Statements of Operations,Operations. the potential forHowever, deteriorating economic conditions impactingthat adversely affect GU&I's future cash flows or peer company equity valuations of peer companies could impactreduce the estimated fair value of GU&I,I andbelow its carrying amount, potentially resulting in goodwill impairment charges could be recorded in thefuture future.periods.

In addition to the other information set forth in this report, careful consideration should be given to the factors discussed in Part I, “Item 1A. Risk Factors” in Duke Energy's Annual Report on Form 10-K for the year ended December 31, 2025, and the supplemental risk factors included in Exhibit 99.4 to the Current Report on Form 8-K filed by Duke Energy Carolinas with the Securities Exchange Commission on May 29, 2026, which is herein incorporated by reference, and which could materially affect the Duke Energy Registrants’ financial condition or future results.

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

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

Constructive Regulatory and Legislative Outcomes. During the threesix months ended MarchJune 31,30, 2026, we continued to moveadvance ourkey regulatory strategy forwardinitiatives and execute onthe investments fornecessary buildingto asupport smartergrowth, energymaintain futurereliable while maintaining our focus on safetyservice and operational excellence, our customers, growth ofposition our business asfor welllong-term assuccess. theThese engagementefforts remain focused on delivering safe and empowermentreliable electric and natural gas service, supporting customer affordability and achieving timely recovery of ourprudent employees. These priorities enable us to provide strong, sustainable value for our customers, communities, employees and shareholders.costs.

•DuringRevised base rates became effective during the first quarter, revised base rates went into effect for severalquarter of our2026 jurisdictions including bothfor Duke Energy Carolinas' and Duke Energy Progress' South Carolina service territories,territories as well asand Duke Energy Kentucky's natural gas business. InDuring March, Duke Energy Progress filed its first request under South Carolina’s electric Rate Stabilization Adjustment framework to facilitate timely cost recovery of the important grid investments we continue to make and to improve reliability across the service territory. Additionally,2026, Duke Energy Ohio's electric businessand natural gas businesses and Piedmont's South Carolina natural gas business filed new base rate applicationsapplications. In July, we reached settlements in MarchDuke Energy Carolinas' 2025 North Carolina Rate Case and April,proceedings respectively.related to Winter Storm Fern. Our regulatory efforts willremain continue to focusfocused on securing the criticalrecovery of investments necessary to providemaintain customerand value,strengthen deliveringour reliableelectric and natural gas andsystems electricwhile continuing to provide reliable service andto ensuring timely cost recovery across all of our jurisdictions.customers.

•Our nuclear sitesfleet continuecontinues to serveprovide customersa bysignificant safelysource producingof clean,reliable, reliablecarbon-free and low-costcost-competitive electricity, as well as providing economic benefits for our local communities, such as thousands of well-paying jobs and significant tax benefits.generation. In February,February 2026, we announced that our nuclear fleet achieved a new all-time reliability record for systemwide capacity factor.factor in 2025. In April,April 2026, the NRC issued a subsequent license renewal for Robinson, which provides for a 20-year extension of nuclearextending operations at the plant through 2050. Also induring April, we executed a multi-year agreement to sell up to $3.1 billion of net tax credits with expected proceeds through 2029, including nuclear PTCs, in continued support of providing low-cost electricity to our customers.

•The FERC issued an order authorizing the proposalproposed tocombination combineof our two electric utilities that operateoperating in the CarolinasCarolinas, asfinding the transaction consistent with the public interest. The companies also reached comprehensive settlements with intervenors in North Carolina and South Carolina resolving all issues related to the proposed combination, and received approvals from both the NCUC and the PSCSC. The targeted effective date of the combination isremains January 1, 2027.

Operational Excellence. The reliablesafe and safereliable operation of our powerelectric generatinggeneration facilities, electricfleet, transmission and distribution systems and natural gas infrastructure continuesremains to be foundationalfundamental to serving our customers,customers and supporting our financial results and our credibility with our communities and stakeholders.performance. Operational excellence is especiallyparticularly criticalimportant toduring successfullysignificant navigateweather events when system reliability and effective storm response and to efficiently provide the continuity of service ourrestoration customersare demand, regardless of weather or circumstance.critical.

In late January,January 2026, Winter Storm Fern moved across the eastern U.S., impactingimpacted all of our service territories. During the sustainedSustained subfreezing temperatures,temperatures drove customer energy useusage surgedto record winter peak demand levels across the CarolinasCarolinas. and energy demand reached a new winter peak, the highest on record across our Carolinas' system. In addition to effectively managing the grid during this peak demand, we also proactivelyWe implemented storm preparation and response measures, including pre‑stagingpositioning crews and equipment, coordination ofcoordinating mutual‑assistance resources and leveraging established restoration processes. WeThese haveefforts previouslysupported experiencedcontinued the benefit of these processes in supporting gridsystem reliability and the achievement of timely and effective restoration foractivities ourwhere customersservice duringinterruptions significant weather events that result in outages stemming from severe cold weather and ice.occurred.

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

Duke Energy Objectives and Beyond. Looking ahead toFor the remainder of 2026, we remain focused on providing exceptional value for our customers and on the effective execution ofexecuting our strategic priorities, including the advancement ofadvancing key regulatory initiativesinitiatives, supporting customer growth and investing in the planninginfrastructure necessary to maintain safe and constructionreliable service. The combination of theconstructive criticalregulatory infrastructure investments our communities depend on. Through aoutcomes, continued emphasiseconomic ondevelopment safety, reliability andgrowth, disciplined capital allocation,allocation weand arestrong welloperational positionedexecution topositions continueus to support our customers and communities while creating long‑term valueshareholder for our shareholders.value.

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

In April 2024, the EPA issued final rules under section 111 of the Clean Air Act (EPA Rule 111) regulating GHG emissions from existing coal-fired and new natural gas-fired power plants. Compliance with EPA Rule 111111, if implemented as issuedissued, would have a material impact on the timing, nature and magnitude of future generation investments in our service territories. Cost recovery for future expenditures will be pursued through the normal ratemaking process with federal and state utility commissions, which permit recovery of reasonable and prudently incurred costs associated with Duke Energy’s regulated operations. Duke Energy is participating in legal challenges to the final rules. In June 2025, the EPA published a proposed rule to repeal EPA Rule 111 as well as an alternative proposal to repeal a narrower set of requirements. Duke Energy is evaluating these proposals and their potential impacts on the Company. For more information, see "Other Matters."

The Company continues to monitor the ongoing stability of markets for key materials and supplies, including potential impacts on the prices or availability of goods resulting from global conflictsconflicts, andgeopolitical war ordevelopments, restrictions on the trade ofinvolving certain rare earth materials and technologies used in electric utility infrastructure.infrastructure Whileor recentevolving judicialtrade rulingsand invalidatedtariff thepolicies. authority of the U.S. executive branch to impose certain tariffs, certain ongoing publicPublic policy outcomes,developments, including impacts from new or revised tariffs or other actions from federal executive orders, federal legislation or other rulemakings, could disrupt or impact Duke Energy's supply chain, future financial results, capital plan or execution on the Company's energy modernization strategy.

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

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

GAAP reported EPS was $1.97$1.38 for the three months ended MarchJune 31,30, 2026, compared to $1.76$1.25 for the three months ended MarchJune 31,30, 2025. In addition to the drivers below, GAAP reported EPS increased primarily due toincludes the gain on saleimpact of Piedmont's Tennessee business, partially offset by charges related to legalNorth andCarolina regulatoryrate settlements.case settlements for the three months ended June 30, 2026.

As discussed above, management also evaluates financial performance based on adjusted EPS. Duke Energy’s adjusted EPS was $1.93$1.43 for the three months ended MarchJune 31,30, 2026, compared to $1.76$1.25 for the three months ended MarchJune 31,30, 2025. The increase in adjusted EPS was primarily due to the recovery of infrastructure investments to reliably serve customers in our growing jurisdictions, along with improved weather, partially offset by higher operation and maintenance expense, including storm costs, as well as higher depreciation on a growing asset base.base and interest expense.

(a)Net of $47$12 million tax benefit. $172$51 million recorded within Operations,Impairments maintenanceof assets and other and $25 million recorded within Operating Revenues.charges.

(cb) Recorded in Income (Loss) from Discontinued Operations, net of tax.

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 interestsNCI and preferred stock dividends. Segment income includes intercompany revenues and expenses that are eliminated on the Condensed Consolidated Financial Statements.

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

•a $286$145 million increase in fuel revenues primarily due to net higher fuel rates and volumes in the current year;

•a $12$117 million increase primarily due to higher pricing from the 2025 Duke Energy Kentucky natural gas rate case.cases across jurisdictions;

•aan $10$84 million increase in propertyweather-normal andretail othersales taxes due to higher franchise taxes.volumes;