Duke Energy DUK · USD

BUSINESS SEGMENTSReportable segments are determined based on information used by the chief operating decision-maker (CODM) in deciding how to allocate resources and evaluate the performance of the business. The Duke Energy Registrants' CODM is the Chief Executive Officer. The CODM evaluates segment performance based on segment income for each of the Duke Energy Registrants' reportable business segments in deciding how to allocate resources and evaluate the performance of the business. Segment income is defined as income from continuing operations net of income attributable to NCI and preferred stock dividends. Segment income, as discussed below, includes intercompany revenues and expenses that are eliminated on the Consolidated Financial Statements. Certain governance costs are allocated to each segment. In addition, direct interest expense and income taxes are included in segment income.Products and services are sold between affiliate companies and reportable segments of Duke Energy at cost. Substantially all assets and revenues from continuing operations for each of the Duke Energy Registrants are within the U.S. Segment assets as presented in the tables that follow exclude all intercompany assets.Duke EnergyDuke Energy's segment structure includes the following two segments: EU&I and GU&I.The EU&I segment includes Duke Energy's regulated electric utilities in the Carolinas, Florida and the Midwest. The regulated electric utilities conduct operations through the Subsidiary Registrants that are substantially all regulated and, accordingly, qualify for regulatory accounting treatment.The GU&I segment includes Piedmont, Duke Energy's natural gas local distribution companies in Ohio and Kentucky, and Duke Energy's natural gas storage, midstream pipeline, and renewable natural gas investments. GU&I's operations are substantially all regulated and, accordingly, qualify for regulatory accounting treatment.The remainder of Duke Energy’s operations is presented as Other, which is primarily comprised of interest expense on holding company debt, unallocated corporate costs and Duke Energy’s wholly owned captive insurance company, Bison. Other also includes Duke Energy's interest in NMC. See Note 13 for additional information on the investment in NMC.Business segment information is presented in the following tables.

REVENUEDuke Energy recognizes revenue consistent with amounts billed under tariff offerings or at contractually agreed upon rates based on actual physical delivery of electric or natural gas service, including estimated volumes delivered when billings have not yet occurred. As such, the majority of Duke Energy’s revenues have fixed pricing based on the contractual terms of the published tariffs. Absent decoupling mechanisms, the variability in expected cash flows of the majority of Duke Energy's revenue is attributable to the customer’s volumetric demand and ultimate quantities of energy or natural gas supplied and used during the billing period. The stand-alone selling price of related sales are designed to support recovery of prudently incurred costs and an appropriate return on invested assets and are primarily governed by published tariff rates or contractual agreements approved by relevant regulatory bodies. As described in Note 1, certain excise taxes and franchise fees levied by state or local governments are required to be paid even if not collected from the customer. These taxes are recognized on a gross basis as part of revenues. Duke Energy elects to account for all other taxes net of revenues.Performance obligations are satisfied over time as energy or natural gas is delivered and consumed with billings generally occurring monthly and related payments due within 30 days, depending on regulatory requirements. In no event does the timing between payment and delivery of the goods and services exceed one year. Using this output method for revenue recognition provides a faithful depiction of the transfer of electric and natural gas service as customers obtain control of the commodity and benefit from its use at delivery. Additionally, Duke Energy has an enforceable right to consideration for energy or natural gas delivered at any discrete point in time and will recognize revenue at an amount that reflects the consideration to which Duke Energy is entitled for the energy or natural gas delivered.As described above, the majority of Duke Energy’s tariff revenues are at will and, as such, related contracts with customers have an expected duration of one year or less and will not have future performance obligations for disclosure. Additionally, other long-term revenue streams, including wholesale contracts, generally provide services that are part of a single performance obligation, the delivery of electricity or natural gas.

COMMITMENTS AND CONTINGENCIESINSURANCEGeneral InsuranceThe Duke Energy Registrants have insurance and reinsurance coverage either directly or through indemnification from Duke Energy’s captive insurance company, Bison, and its affiliates, consistent with companies engaged in similar commercial operations with similar type properties. The Duke Energy Registrants’ coverage includes (i) commercial general liability coverage for liabilities arising to third parties for bodily injury and property damage; (ii) workers’ compensation; (iii) automobile liability coverage; and (iv) property coverage for all real and personal property damage. Real and personal property damage coverage excludes electric transmission and distribution lines, but includes damages arising from boiler and machinery breakdowns, earthquakes, flood damage and extra expense, but not outage or replacement power coverage. All coverage is subject to certain deductibles or retentions, sublimits, exclusions, terms and conditions common for companies with similar types of operations. The Duke Energy Registrants self-insure their electric transmission and distribution lines against loss due to storm damage and other natural disasters. As discussed further in Note 4, Duke Energy Florida maintains a storm damage reserve and has a regulatory mechanism to recover the cost of named storms on an expedited basis. Additionally, Duke Energy Carolinas and Duke Energy Progress maintain storm damage reserves and may leverage securitization to recover storm costs on an expedited basis, as appropriate.The cost of the Duke Energy Registrants’ coverage can fluctuate from year to year reflecting claims history and conditions of the insurance and reinsurance markets. In the event of a loss, terms and amounts of insurance and reinsurance available might not be adequate to cover claims and other expenses incurred. Uninsured losses and other expenses, to the extent not recovered by other sources, could have a material effect on the Duke Energy Registrants’ results of operations, cash flows or financial position. Each company is responsible to the extent losses may be excluded or exceed limits of the coverage available.Nuclear InsuranceDuke Energy Carolinas owns and operates McGuire and Oconee and operates and has a partial ownership interest in Catawba. McGuire and Catawba each have two reactors. Oconee has three reactors.

DEBT AND CREDIT FACILITIES Summary of Debt and Related TermsThe following tables summarize outstanding debt. December 31, 2025WeightedAverageDukeDukeDukeDukeDukeInterestDukeEnergyProgressEnergyEnergyEnergyEnergy(in millions) Rate EnergyCarolinasEnergyProgressFloridaOhioIndianaPiedmontUnsecured debt, maturing 2026-20824.63 %$35,585 $1,150 $1,800 $— $150 $1,285 $386 $4,275 Secured debt, maturing 2028-20523.85 %4,279 2,115 2,109 1,290 818 — — — First mortgage bonds, maturing 2026-2074(a)4.33 %44,289 15,053 21,923 11,576 10,349 3,075 4,238 — Finance leases, maturing 2027-2064576 272 569 481 88 — 10 — Tax-exempt bonds, maturing 2027-2046(b)3.54 %1,331 — 500 500 — 77 352 — Notes payable and commercial paper(c)3.95 %3,254 — — — — — — — Money pool/intercompany borrowings — 300 150 150 — 38 325 609 Fair value hedge carrying value adjustment 176 — — — — — — — Unamortized debt discount and premium, net(d) 762 (20)(44)(25)(19)(22)(16)(7)Unamortized debt issuance costs(e)(416)(93)(159)(76)(79)(20)(27)(17)Total debt 4.41 %$89,836 $18,777 $26,848 $13,896 $11,307 $4,433 $5,268 $4,860 Short-term notes payable and commercial paper (2,624)— — — — — — — Short-term money pool/intercompany borrowings — — — — — (13)(175)(609)Current maturities of long-term debt(f) (7,104)(629)(722)(285)(437)(45)(4)(490)Total long-term debt(f)$80,108 $18,148 $26,126 $13,611 $10,870 $4,375 $5,089 $3,761 (a)Substantially all electric utility property is mortgaged under mortgage bond indentures.(b)Substantially all tax-exempt bonds are secured by first mortgage bonds, letters of credit or the Master Credit Facility.(c)Includes $625 million classified as Long-Term Debt on the Consolidated Balance Sheets due to the existence of long-term credit facilities that backstop these commercial paper balances, along with Duke Energy’s ability and intent to refinance these balances on a long-term basis. The weighted average days to maturity for Duke Energy's commercial paper program was 21 days.(d)Duke Energy includes $855 million and $45 million in purchase accounting adjustments related to Progress Energy and Piedmont, respectively.(e)Duke Energy includes $21 million in purchase accounting adjustments primarily related to the merger with Progress Energy.(f)Refer to Note 18 for additional information on amounts from consolidated VIEs.

INVESTMENTS IN DEBT AND EQUITY SECURITIESDuke Energy’s investments in debt and equity securities are primarily comprised of investments held in (i) the NDTF at Duke Energy Carolinas, Duke Energy Progress and Duke Energy Florida, (ii) the grantor trusts at Duke Energy Florida and Duke Energy Indiana related to OPEB plans and (iii) Bison. The Duke Energy Registrants classify investments in debt securities as AFS and investments in equity securities as FV-NI. For investments in debt securities classified as AFS, the unrealized gains and losses are included in other comprehensive income until realized, at which time they are reported through net income. For investments in equity securities classified as FV-NI, both realized and unrealized gains and losses are reported through net income. Substantially all of Duke Energy’s investments in debt and equity securities qualify for regulatory accounting, and accordingly, all associated realized and unrealized gains and losses on these investments are deferred as a regulatory asset or liability.Duke Energy classifies the majority of investments in debt and equity securities as long term, unless otherwise noted.Investment TrustsThe investments within the Investment Trusts are managed by independent investment managers with discretion to buy, sell and invest pursuant to the objectives and guidelines set forth by the investment manager agreements and trust agreements. The Duke Energy Registrants have limited oversight of the day-to-day management of these investments. As a result, the ability to hold investments in unrealized loss positions is outside the control of the Duke Energy Registrants. Accordingly, all unrealized losses associated with debt securities within the Investment Trusts are recognized immediately and deferred to regulatory accounts where appropriate.Other AFS SecuritiesUnrealized gains and losses on all other AFS securities are included in other comprehensive income until realized, unless it is determined the carrying value of an investment has a credit loss. The Duke Energy Registrants analyze all investment holdings each reporting period to determine whether a decline in fair value is related to a credit loss. If a credit loss exists, the unrealized credit loss is included in earnings. There were no material credit losses as of December 31, 2025, and 2024. Other Investments amounts are recorded in Other within Other Noncurrent Assets on the Consolidated Balance Sheets.

INCOME TAXESInflation Reduction Act and the OBBBAIn August 2022, the IRA was signed into law. Among other provisions, the IRA implemented a new 15% corporate alternative minimum tax based on GAAP net income, with certain adjustments as defined by the IRA, and clean energy-related provisions. The IRA's clean energy provisions included, among other provisions, the extension and modification of existing investment and PTCs for projects placed in service through 2024 and introduced new technology-neutral clean energy-related tax credits beginning in 2025. In addition, the IRA created a new, zero-emission nuclear power PTC and a clean hydrogen PTC. Duke Energy Carolinas has $913 million and $449 million of nuclear PTCs recorded on its consolidated balance sheets as of December 31, 2025, and 2024, respectively. Duke Energy Progress has $152 million and $73 million of nuclear PTCs recorded on its consolidated balance sheets as of December 31, 2025, and 2024, respectively. These amounts represent the estimated net realizable value of the PTCs, which were deferred to a regulatory liability. The Company will continue to assess its calculations and interpretations as new information and guidance becomes available. In 2025, proceeds of $723 million were received, net of discount, related to the sale of tax credits, which primarily includes $530 million of nuclear power PTCs at Duke Energy Carolinas, $83 million of nuclear power PTCs at Duke Energy Progress and $69 million of solar PTCs at Duke Energy Florida. In 2024, net proceeds of $558 million were received related to the sale of tax credits, which primarily includes $428 million of nuclear power PTCs at Duke Energy Carolinas, $65 million of nuclear power PTCs at Duke Energy Progress, and $43 million of solar PTCs at Duke Energy Florida. See Note 4 for further details on the Subsidiary Registrants' regulatory process to pass the net realizable value back to customers over time, as applicable.On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law, which among other things, modified tax legislation affecting clean energy tax credits. While transferability was preserved for tax credits established by the IRA, including the nuclear PTC, which remains available through 2032, the legislation phases out or terminates certain tax credits sooner than previously scheduled.

STOCK-BASED COMPENSATIONThe Duke Energy Corporation 2023 Long-Term Incentive Plan (the 2023 Plan) provides for the grant of stock-based compensation awards to employees and outside directors. The 2023 Plan superseded the Duke Energy Corporation 2015 Long-Term Incentive Plan (the 2015 Plan). No additional grants will be made from the 2015 Plan. The 2023 Plan reserves 15 million shares of common stock for issuance. Duke Energy has historically issued new shares upon exercising or vesting of share-based awards. However, Duke Energy may use a combination of new share issuances and open market repurchases for share-based awards that are exercised or vest in the future. Duke Energy has not determined with certainty the amount of such new share issuances or open market repurchases.The following table summarizes the total expense recognized by the Duke Energy Registrants, net of tax, for stock-based compensation. Years Ended December 31,(in millions)202520242023Duke Energy$74 $70 $71 Duke Energy Carolinas27 25 25 Progress Energy29 28 28 Duke Energy Progress18 17 17 Duke Energy Florida11 11 11 Duke Energy Ohio6 5 5 Duke Energy Indiana8 7 7 Piedmont4 4 4 Duke Energy's pretax stock-based compensation costs, the tax benefit associated with stock-based compensation expense and stock-based compensation costs capitalized are included in the following table. Years Ended December 31,(in millions)202520242023RSU awards$58 $49 $54 Performance awards44 47 43 Pretax stock-based compensation cost$102 $96 $97 Stock-based compensation costs capitalized7 6 6 Stock-based compensation expense$95 $90 $91 Tax benefit associated with stock-based compensation expense$21 $20 $20 RESTRICTED STOCK UNIT AWARDSRSU awards generally vest over periods from immediate to three years. Fair value amounts are based on the market price of Duke Energy's common stock on the grant date. The following table includes information related to RSU awards. Years Ended December 31, 202520242023Shares granted (in thousands) 564 598 670 Fair value (in millions)$66 $59 $65 The following table summarizes information about RSU awards outstanding.

LEASESAs part of its operations, Duke Energy leases certain aviation facilities, space on communication towers, dedicated host servers, industrial equipment, fleet vehicles, fuel transportation (barges and railcars), land and office space under various terms and expiration dates. Additionally, Duke Energy Carolinas, Duke Energy Progress and Duke Energy Indiana have finance leases related to firm natural gas pipeline transportation capacity. Duke Energy Progress and Duke Energy Florida have entered into certain purchase power agreements, which are classified as finance and operating leases. Duke Energy has certain lease agreements, which include variable lease payments that are based on the usage of an asset. These variable lease payments are not included in the measurement of the ROU assets or operating lease liabilities on the Consolidated Financial Statements.Certain Duke Energy lease agreements include options for renewal and early termination. The intent to renew a lease varies depending on the lease type and asset. Renewal options that are reasonably certain to be exercised are included in the lease measurements. The decision to terminate a lease early is dependent on various economic factors. No termination options have been included in any of the lease measurements.In December 2019, Duke Energy Carolinas entered into a sale-leaseback arrangement to construct and occupy an office tower. The lease agreement was evaluated as a sale-leaseback of real estate but did not qualify for sale-leaseback accounting. As a result, the transaction is accounted for as a financing. Duke Energy Carolinas recorded the real estate on the Consolidated Balance Sheets within Property, Plant and Equipment as if it is the legal owner and recognizes depreciation expense over the estimated useful life. In addition, the failed sale-leaseback obligation is reported within Long-Term Debt on the Consolidated Balance Sheets with the monthly lease payments split between interest expense and debt principal.Piedmont has certain agreements for the construction and transportation of natural gas pipelines to supply Duke Energy Carolinas' natural gas plant needs. Piedmont accounts for these pipeline lateral contracts as sales-type leases since the present value of the sum of the lease payments equals the fair value of the assets.