Item 8.01. Other Events. As previously disclosed, on August 14, 2025, Duke Energy Carolinas, LLC (“ Duke Energy Carolinas ”) and Duke Energy Progress, LLC (“ Duke Energy Progress ,” and together with Duke Energy Carolinas, the “ Companies ”) filed a joint application with the North Carolina Utilities Commission (“ NCUC ”) and the Public Service Commission of South Carolina (“ PSCSC ”) for approval to combine utilities, by which Duke Energy Progress will merge into Duke Energy Carolinas, resulting in a single electric utility serving the Companies’ North Carolina and South Carolina service territories. Duke Energy Corporation, together with the Companies, also filed an application with the Federal Energy Regulatory Commission (the “ FERC ”) on the same day. In connection with the utility combination (the “ Combination ”), and immediately prior thereto, Duke Energy Corporation expects to contribute its 100% equity interest in Duke Energy Carolinas to Progress Energy, Inc. (“ Progress Energy ”). The targeted effective date is January 1, 2027. On January 30, 2026, the FERC issued an order authorizing the Combination as consistent with the public interest. Additionally, on April 30, 2026, the PSCSC voted to approve the Combination, and on May 1, 2026, the NCUC issued an order approving the Combination. The effectuation of the Combination remains subject to approval by the boards of directors of both Companies and the board of directors of Progress Energy, to the entry by the Companies, Progress Energy and Duke Energy Corporation into a definitive agreement governing the Combination and to the satisfaction of other conditions. Duke Energy Carolinas is filing this Current Report on Form 8-K solely to provide certain information relating to the proposed Combination. Additionally, Duke Energy Carolinas is providing certain supplemental risk factors related to the proposed Combination, which are filed as Exhibit 99.4 and incorporated herein by reference.
Duke Energy Carolinas, LLC - 8-K
Accession
0001104659-26-0683828.019.01
Item 8.01 - Other Events
306 words · Exhibit 99.4 attached
Exhibit 99.4 · 1,297 words
EX-99.4 4 tm2615850d1_ex99-4.htm EXHIBIT 99.4 Exhibit 99.4 Supplemental Risk Factors Unless these supplemental risk factors indicate otherwise, or the context otherwise requires, references to the term “Duke Energy Carolinas” means Duke Energy Carolinas, LLC and “Duke Energy Progress” means Duke Energy Progress, LLC. Capitalized terms used but not defined herein have the meanings ascribed to them in the Current Report on Form 8-K to which these supplemental risk factors are attached as Exhibit 99.4 (the “Financial Statement Form 8-K”). Risks Related to the Combination Duke Energy Carolinas is subject to risk of the Combination having an adverse impact on its credit rating, both while the Combination is pending and following completion of the Combination. Duke Energy Carolinas cannot be assured that its credit ratings will not be lowered as a result of the Combination or for any other reason. Any reduction in Duke Energy Carolinas’s credit ratings, or the criteria used by rating agencies to determine such ratings, could adversely affect its access to capital, its cost of capital and its other operating costs, and its ability to refinance or repay Duke Energy Carolinas’s existing debt and complete new financings, which could have a material adverse effect on Duke Energy Carolinas’s business, financial condition, results of operations or the trading price of its securities. Duke Energy Carolinas will incur significant costs in connection with the Combination. Duke Energy Carolinas expects to incur significant costs associated with the Combination, including costs of combining the operations of the two companies. Additional unanticipated costs also may be incurred in the integration of the businesses of Duke Energy Carolinas and Duke Energy Progress. Any net benefit from any anticipated elimination of duplicative costs, as well as the realization of other efficiencies related to the integration of the businesses, may not be achieved in the near term or at all. The failure to achieve the anticipated benefits and efficiencies from the Combination, or the incurrence of additional expenses, could have a material adverse impact on the results of operations of the combined company. The unaudited pro forma condensed combined financial information included in the Financial Statement Form 8-K does not purport to be, and likely is not, representative of the combined results of Duke Energy Carolinas and Duke Energy Progress after the Combination . The unaudited pro forma condensed combined financial information in the Financial Statement Form 8-K is presented for informational purposes only. It does not purport to be indicative of the financial position or results of operations that would have actually occurred had the Combination been completed at or as of the dates indicated, nor is it indicative of the combined company’s future operating results or financial position. The unaudited pro forma condensed combined financial information in the Financial Statement Form 8-K does not reflect future events that may occur after the closing of the Combination, including the potential realization of operating efficiencies or costs related to the Combination, and does not consider potential market conditions on revenues or expenses. The unaudited pro forma condensed combined financial information in the Financial Statement Form 8-K is based in part on certain assumptions regarding the Combination that Duke Energy Carolinas believes are reasonable under the circumstances. Duke Energy Carolinas cannot assure you that its assumptions will prove to be accurate over time. The failure to integrate the businesses and operations of Duke Energy Carolinas and Duke Energy Progress successfully in the expected time frame may adversely affect the combined company’s future results. Duke Energy Carolinas and Duke Energy Progress have operated and, until the completion of the Combination, will continue to operate as separate utilities. Following the completion of the Combination, their respective businesses will need to be integrated successfully. The process of integration may reveal that benefits and efficiencies are less than anticipated and may result in additional expenses, all of which could reduce the anticipated benefits of the Combination. Furthermore, it is possible that the integration process could result in inconsistencies in standards, controls, procedures and policies, potential unknown liabilities and unforeseen expenses, delays, or regulatory conditions associated with and following completion of the Combination; or higher-than-expected integration costs and an overall post-completion integration process that takes longer than originally anticipated. Each of Duke Energy Carolinas and Duke Energy Progress has substantial amounts of indebtedness. Consequently, the combined company will have substantial indebtedness following the Combination. The combined company’s debt service obligations could have an adverse impact on its earnings and cash flows for as long as the indebtedness is outstanding. For example, it could: • make it more difficult for the combined company to pay or refinance its debts as they become due during adverse economic and industry conditions because any decrease in revenues could cause the combined company to not have sufficient cash flows from operations to make its scheduled debt payments; • require a substantial portion of the combined company’s cash flows from operations to be used for debt service payments, thereby reducing the availability of its cash flow to fund working capital, capital expenditures, strategic transactions and other general corporate purposes; • result in a downgrade in the rating of the combined company’s indebtedness, which could limit its ability to borrow additional funds or increase the interest rates applicable to its indebtedness; • limit the flexibility of the combined company in planning for or reacting to changes in its business and the industry in which it operates; or • increase the exposure of the combined company to a rise in interest rates, which would generate greater interest expense, or increase the costs of obtaining applicable interest rate fluctuation hedges. There can be no assurance that the combined company will be able to repay or refinance such borrowings and obligations. The combined company may fail to realize all of the anticipated benefits of the Combination. The success of the Combination will depend, in part, on Duke Energy Carolinas’s ability to realize the anticipated benefits and cost savings from combining Duke Energy Carolinas’s and Duke Energy Progress’s businesses and operational synergies. The anticipated benefits and cost savings of the Combination may not be realized fully or at all, may take longer to realize than expected, may not be realized or could have other adverse effects that Duke Energy Carolinas does not currently foresee. Some of the assumptions that Duke Energy Carolinas and Duke Energy Progress have made, such as the achievement of the anticipated benefits related to the expected size, scale and financial strength of the combined company, may not be realized. In addition, there could be potential unknown liabilities and unforeseen expenses associated with the Combination that could adversely impact the combined company. The combined company’s ability to realize anticipated benefits is also subject to regulatory frameworks requiring the development and application of methodologies to measure and track such benefits over time. These methodologies and outcomes may be subject to ongoing regulatory review and oversight, and failure to achieve specified benefit levels could require additional actions, including potential financial contributions, as determined by applicable regulatory authorities. The future results of the combined company following the Combination will suffer if the combined company does not effectively manage its expanded operations. Following the Combination, the size, geographic footprint and complexity of the combined company will increase significantly compared to the business of each of Duke Energy Carolinas and Duke Energy Progress. The combined company’s future success will depend, in part, upon its ability to manage this expanded business. The combined company may also face increased scrutiny from regulators and governmental authorities as a result of the significant increase in the size, geographic footprint and complexity of its business. There can be no assurances that the combined company will be successful or that it will realize the expected operating efficiencies, cost savings or other benefits currently anticipated from the Combination.
Item 9.01 - Financial Statements and Exhibits
1,896 words · Exhibit 99.3 attached
Item 9.01. Financial Statements and Exhibits. (a) Financial Statements of Businesses or Funds Acquired Pursuant to Rule 3-05 of Regulation S-X, Duke Energy Carolinas is filing herewith (i) the audited consolidated financial statements of Duke Energy Progress as of December 31, 2025 and 2024 and for the years ended December 31, 2025, 2024 and 2023, which are filed as Exhibit 99.1 and incorporated by reference herein, and (ii) the unaudited condensed consolidated interim combined financial statements of Duke Energy Progress as of March 31, 2026 and December 31, 2025, and for the three months ended March 31, 2026 and 2025, which are filed as Exhibit 99.2 and incorporated by reference herein. These combined financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission and U.S. generally accepted accounting principles. (b) Pro Forma Financial Information Pursuant to Article 11 of Regulation S-X, Duke Energy Carolinas is filing herewith (i) the unaudited pro forma condensed combined balance sheet as of March 31, 2026, of Duke Energy Carolinas, giving effect to the Combination as if it had been completed on March 31, 2026; and (ii) the unaudited pro forma condensed combined statements of operations for the years ended December 31, 2025, 2024 and 2023, and for the three months ended March 31, 2026, giving effect to the Combination as if it had been completed on January 1, 2023. The pro forma financial information included as Exhibit 99.3 to this Current Report on Form 8-K has been prepared for illustrative purposes only as required by Form 8-K, and is not intended to, and does not purport to, represent what Duke Energy Carolinas’ actual results or financial condition would have been if the Combination had occurred on the relevant date and is not intended to project the future results or the financial condition that Duke Energy Carolinas may achieve following the Combination. (d) Exhibits 23.1 Consent of Independent Registered Public Accounting Firm 99.1 Historical audited consolidated financial statements of Duke Energy Progress and accompanying notes as of December 31, 2025 and 2024 and for the years ended December 31, 2025, 2024 and 2023 (incorporated by reference to pages 91-96 and pages 121-233 of Duke Energy Progress’ Annual Report on Form 10-K for the year ended December 31, 2025, File No. 1-32853). 99.2 Historical unaudited condensed consolidated interim financial statements of Duke Energy Progress and accompanying notes as of March 31, 2026 and December 31, 2025, and for the three months ended March 31, 2026 and 2025 (incorporated by reference to pages 22-25 and 42-89 of Duke Energy Progress’ Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2026, File No. 1-32853). 99.3 Unaudited pro forma condensed combined financial information of Duke Energy Carolinas and accompanying notes for the years ended December 31, 2025, 2024 and 2023 and as of and for the three months ended March 31, 2026. 99.4 Supplemental risk factors 104 Cover Page Interactive Data File (embedded within the Inline XBRL document). CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION This document includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are based on management’s beliefs and assumptions and can often be identified by terms and phrases that include “anticipate,” “believe,” “intend,” “estimate,” “expect,” “continue,” “should,” “could,” “may,” “plan,” “project,” “predict,” “will,” “potential,” “forecast,” “target,” “guidance,” “outlook” or other similar terminology. Various factors may cause actual results to be materially different than the suggested outcomes within forward-looking statements; accordingly, there is no assurance that such results will be realized. These factors include, but are not limited to: · The (i) failure to realize the anticipated benefits, synergies, and value creation expected from the Combination, including as a result of difficulties or delays in integrating the contributed assets and operations and/or the incurring of significant costs in connection with the Combination; and (ii) the risk that the combined entity may not perform as expected following the consummation of the Combination due to unforeseen liabilities, its level of indebtedness, integration challenges, market conditions, ratings downgrades, or other factors beyond the control of the parties; · The ability to implement our business strategy, including meeting forecasted load growth demand, grid and fleet modernization objectives, and reducing carbon emissions, while balancing customer reliability and keeping costs as low as possible for our customers; · State, federal and foreign legislative and regulatory initiatives, including costs of compliance with existing and future environmental requirements and/or uncertainty of applicability or changes to such legislative and regulatory initiatives, including those related to climate change, as well as rulings that affect cost and investment recovery or have an impact on rate structures or market prices; · The extent and timing of costs and liabilities to comply with federal and state laws, regulations and legal requirements related to coal ash remediation, including amounts for required closure of certain ash impoundments, are uncertain and difficult to estimate; · The ability to timely recover eligible costs, including amounts associated with coal ash impoundment retirement obligations, asset retirement and construction costs related to carbon emissions reductions, and costs related to significant weather events, particularly in periods of heightened customer affordability concerns, bill volatility, or public and political scrutiny, and to earn an adequate return on investment through rate case proceedings and the regulatory process; · The costs of decommissioning nuclear facilities could prove to be more extensive than amounts estimated and all costs may not be fully recoverable through the regulatory process; · The impact of extraordinary external events, such as a global pandemic, trade wars or military conflict, and their collateral consequences, including the disruption of global supply chains or the economic activity in our service territories; · Costs and effects of legal and administrative proceedings, settlements, investigations and claims; · Industrial, commercial and residential decline in service territories or customer bases resulting from sustained downturns of the economy, storm damage, reduced customer usage due to cost pressures from inflation, tariffs, or fuel costs, worsening economic health of our service territories, reductions in customer usage patterns, or lower than anticipated load growth, particularly if usage of electricity by data centers is less than currently projected, energy efficiency efforts, natural gas building and appliance electrification, and use of alternative energy sources, such as self-generation and distributed generation technologies; · Federal and state regulations, laws and other efforts designed to promote and expand the use of energy efficiency measures, natural gas electrification, and distributed generation technologies, such as private solar and battery storage, in Duke Energy Corporation (collectively with its subsidiaries) service territories could result in a reduced number of customers, excess generation resources as well as stranded costs; · Advancements in technology, including artificial intelligence; · Additional competition in electric and natural gas markets, municipalization and continued industry consolidation; · The influence of weather and other natural phenomena on operations, financial position, and cash flows, including the economic, operational and other effects of severe storms, hurricanes, droughts, earthquakes and tornadoes, including extreme weather associated with climate change; · Changing or conflicting investor, customer and other stakeholder expectations and demands, particularly regarding environmental, social and governance matters and costs related thereto; · The ability to successfully operate electric generating facilities and deliver electricity to customers, including direct or indirect effects to the Company resulting from an incident that affects the United States electric grid or generating resources; · Operational interruptions to our natural gas distribution and transmission activities; · The availability of adequate interstate pipeline transportation capacity and natural gas supply; · The impact on facilities and business from a terrorist or other attack, war, vandalism, cybersecurity threats, data security breaches, operational events, information technology failures or other catastrophic events, such as severe storms, fires, explosions, pandemic health events or other similar occurrences; · The inherent risks associated with the operation of nuclear facilities, including environmental, health, safety, regulatory and financial risks, including the financial stability of third-party service providers; · The timing and extent of changes in commodity prices, including any impact from increased tariffs, export controls and interest rates, and the ability to timely recover such costs through the regulatory process, where appropriate, and their impact on liquidity positions and the value of underlying assets; · The results of financing efforts, including the ability to obtain financing on favorable terms, which can be affected by various factors, including credit ratings, interest rate fluctuations, compliance with debt covenants and conditions, an individual utility’s generation portfolio, and general market and economic conditions; · Credit ratings of Duke Energy Corporation, Duke Energy Carolinas, Progress Energy, Duke Energy Progress, Duke Energy Florida, LLC, Duke Energy Ohio, Inc., Duke Energy Indiana, LLC and Piedmont Natural Gas Company, Inc. (collectively, the “ Duke Energy Registrants ”) may be different from what is expected; · Declines in the market prices of equity and fixed-income securities and resultant cash funding requirements for defined benefit pension plans, other post-retirement benefit plans and nuclear decommissioning trust funds; · Construction and development risks associated with the completion of the Duke Energy Registrants’ capital investment projects, including risks related to financing, timing and receipt of necessary regulatory approvals, obtaining and complying with terms of permits, meeting construction budgets and schedules, obtaining sufficient skilled labor and satisfying operating and environmental performance standards, as well as the ability to recover costs from customers in a timely manner, or at all; · Changes in rules for regional transmission organizations, including changes in rate designs and new and evolving capacity markets, and risks related to obligations created by the default of other participants; · The ability to control operation and maintenance costs; · The level of creditworthiness of counterparties to transactions; · The ability to obtain adequate insurance at acceptable costs and recover on claims made; · Employee workforce factors, including the potential inability to attract and retain key personnel; · The ability of subsidiaries to pay dividends or distributions to Duke Energy Corporation holding company (the Parent); · The performance of projects undertaken by our businesses and the success of efforts to invest in and develop new opportunities; · The effect of accounting and reporting pronouncements issued periodically by accounting standard-setting bodies and the SEC; · The impact of United States tax legislation to our financial condition, results of operations or cash flows and our credit ratings; · The impacts from potential impairments of goodwill or investment carrying values; · Asset or business acquisitions and dispositions may not be consummated or yield the anticipated benefits, which could adversely affect our financial condition, credit metrics or ability to execute strategic and capital plans; and · The actions of activist shareholders could disrupt our operations, impact our ability to execute on our business strategy, or cause fluctuations in the trading price of our common stock. Additional risks and uncertainties are identified and discussed in the Duke Energy Registrants' reports filed with the SEC and available at the SEC’s website at sec.gov. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than described. Forward-looking statements speak only as of the date they are made and the Duke Energy Registrants expressly disclaim an obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Exhibit 99.3 · 2,885 words
EX-99.3
3
tm2615850d1_ex99-3.htm
EXHIBIT 99.3
Exhibit 99.3
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL
INFORMATION
Introduction
Duke Energy Carolinas, LLC ("Duke Energy Carolinas")
and Duke Energy Progress, LLC ("Duke Energy Progress") have operated as separate regulated utilities since the 2012 merger of
Duke Energy Corporation ("Duke Energy") and Progress Energy, Inc. ("Progress Energy") (the “2012 Merger”).
The proposed combination represents an internal reorganization of entities under common control (the "Combination") and is intended
to combine the operations of these utilities into a single regulated utility legal entity. The Combination is expected to result in a
single regulated utility operating in North Carolina and South Carolina, with a targeted effective date of January 1, 2027.
Duke Energy Carolinas and Duke Energy Progress are separate
regulated utility subsidiaries of Duke Energy serving customers in North Carolina and South Carolina. Each utility serves distinct service
territories within these states and is responsible for the generation, transmission, distribution, and sale of electricity to residential,
commercial, industrial, and wholesale customers.
The Combination represents
a transaction between entities under common control and is expected to be accounted for in accordance with Accounting Standards Codification
("ASC") 805-50, rather than as a business combination under ASC 805-10. Duke Energy has maintained continuous control over
both utilities since 2012, and the transaction does not result in a change in ultimate ownership or control.
Pursuant the transaction structure, Duke Energy will contribute
ownership of Duke Energy Carolinas to Progress Energy, a subsidiary of Duke Energy, after which Duke Energy Progress, a subsidiary of
Progress Energy, will merge with and into Duke Energy Carolinas, with Duke Energy Carolinas surviving the Combination as a subsidiary
of Progress Energy. Following the Combination, Duke Energy’s regulated electric utility operations in North Carolina and South Carolina
will be organized under Duke Energy Carolinas, including the generation, transmission, distribution, and sale of electricity to residential,
commercial, industrial, and wholesale customers.
Additional Information Related to the Unaudited Pro Forma
Condensed Combined Financial Information
The unaudited pro forma condensed
combined financial information has been prepared based on the historical financial statements of Duke Energy Carolinas and Duke Energy
Progress, as adjusted to give effect to the Combination. In accordance with ASC 805-50, assets and liabilities transferred between
entities under common control are accounted for at the historical cost basis of the common parent.
The unaudited pro forma condensed combined balance sheet
as of March 31, 2026 gives pro forma effect to the Combination as if it had occurred on March 31, 2026. The unaudited pro forma
condensed combined statements of operations for the years ended December 31, 2025, 2024, and 2023, and for the three months ended
March 31, 2026, give effect to the Combination as if it had occurred on January 1, 2023.
The unaudited pro forma
condensed combined financial information has been derived from and should be read in conjunction with: (i) the accompanying
notes to the unaudited pro forma condensed combined financial information; (ii) the historical audited consolidated financial
statements of Duke Energy Carolinas and Duke Energy Progress as of December 31, 2025 and 2024, and for the years ended
December 31, 2025, 2024, 2023, and the accompanying notes; and (iii) the historical unaudited condensed consolidated
financial statements of Duke Energy Carolinas and Duke Energy Progress as of March 31, 2026 and December 31, 2025, and for the three
months ended March 31, 2026 and 2025, and the accompanying notes.
The unaudited pro forma
condensed combined financial information is provided for illustrative purposes only and is not necessarily indicative of the results
of operations or financial position that would have been achieved had the Combination occurred on the dates indicated, nor is it
indicative of the future results of operations or financial position of the combined company. The transaction accounting adjustments
are based on information currently available and on assumptions described in the accompanying notes to the unaudited pro forma
condensed combined financial information. The unaudited pro forma condensed combined financial information does not include the
realization of any costs savings from operating efficiencies, synergies or other activities, or the recognition of any cost
increases or dis-synergies that might result from the Combination. Actual results may differ materially
from those reflected in the pro forma information.
Duke Energy Carolinas, LLC
Unaudited Pro Forma Condensed Combined Balance
Sheet
As of March 31, 2026
Transaction Accounting Adjustments
(in millions)
Duke Energy
Carolinas
Historical
Duke Energy
Progress
Historical
Combined
Eliminations of
Intercompany
Transactions
Notes
Effects of
Combination
Notes
Pro Forma
Balance
ASSETS
Current Assets
Cash and cash equivalents
$
44
$
63
$
107
$
-
$
-
$
107
Receivables (net of allowance for doubtful accounts)
1,198
967
2,165
-
-
2,165
Receivables from affiliated companies
251
35
286
(186
)
(a)
-
100
Inventory
1,544
1,350
2,894
-
-
2,894
Regulatory assets
752
675
1,427
-
-
1,427
Other
259
190
449
-
-
449
Total current assets
4,048
3,280
7,328
(186
)
-
7,142
Property, Plant and Equipment
Cost
63,715
45,974
109,689
-
-
109,689
Accumulated depreciation and amortization
(20,863
)
(17,179
)
(38,042
)
-
-
(38,042
)
Net property, plant and equipment
42,852
28,795
71,647
-
-
71,647
Other Noncurrent Assets
Goodwill
-
-
-
-
8,358
(d)
8,358
Regulatory assets
5,177
4,629
9,806
-
163
(b)(c)
9,969
Nuclear decommissioning trust funds
7,213
5,156
12,369
-
-
12,369
Operating lease right-of-use assets, net
92
368
460
-
-
460
Other
1,336
788
2,124
-
-
2,124
Total other noncurrent assets
13,818
10,941
24,759
-
8,521
33,280
Total Assets
$
60,718
$
43,016
$
103,734
$
(186
)
$
8,521
$
112,069
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable
$
1,539
$
962
$
2,501
$
-
$
-
$
2,501
Accounts payable to affiliated companies
353
370
723
(186
)
(a)
-
537
Notes payable to affiliated companies
638
644
1,282
-
-
1,282
Taxes accrued
124
66
190
-
-
190
Interest accrued
163
91
254
-
-
254
Current maturities of long-term debt
1,649
793
2,442
-
-
2,442
Asset retirement obligations
242
186
428
-
-
428
Regulatory liabilities
660
356
1,016
-
-
1,016
Other
634
342
976
-
-
976
Total current liabilities
6,002
3,810
9,812
(186
)
-
9,626
Long-Term Debt
17,839
12,917
30,756
-
151
(b)
30,907
Long-Term Debt Payable to Affiliated Companies
300
150
450
-
-
450
Other Noncurrent Liabilities
Deferred income taxes
4,274
2,778
7,052
-
-
7,052
Asset retirement obligations
3,598
4,113
7,711
-
12
(c)
7,723
Regulatory liabilities
7,333
4,245
11,578
-
-
11,578
Operating lease liabilities
79
366
445
-
-
445
Accrued pension and other post-retirement benefit costs
23
138
161
-
-
161
Investment tax credit
353
197
550
-
-
550
Other
750
338
1,088
-
-
1,088
Total other noncurrent liabilities
16,410
12,175
28,585
-
12
28,597
Equity
Member's equity
20,171
13,964
34,135
-
8,358
(d)
42,493
Accumulated other comprehensive income (loss)
(4
)
-
(4
)
-
-
(4
)
Total equity
20,167
13,964
34,131
-
8,358
42,489
Total Liabilities and Equity
$
60,718
$
43,016
$
103,734
$
(186
)
$
8,521
$
112,069
See accompanying Notes to the Unaudited Pro
Forma Condensed Combined Financial information, which is an integral part of this information.
Duke Energy Carolinas, LLC
Unaudited Pro Forma Condensed Combined Statement
of Operations
For the Three Months Ended March 31, 2026
Transaction
Accounting Adjustments
(in millions)
Duke Energy
Carolinas
Historical
Duke Energy
Progress
Historical
Combined
Eliminations of
Intercompany
Transactions
Notes
Pro Forma
Balance
Operating Revenues
$
2,766
$
2,301
$
5,067
$
(348
)
(a)
$
4,719
Operating Expenses
Fuel used in electric generation and purchased power
931
863
1,794
(345
)
(a)
1,449
Operation, maintenance and other
613
508
1,121
(3
)
(a)
1,118
Depreciation and amortization
526
386
912
-
912
Property and other taxes
106
59
165
-
165
Impairment of assets and other charges
-
-
-
-
-
Total operating expenses
2,176
1,816
3,992
(348
)
3,644
Gains on sales of other assets and other, net
2
1
3
-
3
Operating Income
592
486
1,078
-
1,078
Other income and expenses, net
63
43
106
-
106
Interest Expense
218
135
353
-
353
Income Before Income Taxes
437
394
831
-
831
Income Tax Expense
11
40
51
-
51
Net Income
$
426
$
354
$
780
$
-
$
780
Other Comprehensive Income, net of tax
-
Net gains on cashflow hedges
1
-
1
-
1
Comprehensive Income
$
427
$
354
$
781
$
-
$
781
See accompanying Notes to the Unaudited Pro
Forma Condensed Combined Financial information, which is an integral part of this information.
Duke Energy Carolinas, LLC
Unaudited Pro Forma Condensed Combined Statement
of Operations
For the Year Ended December 31, 2025
Transaction Accounting Adjustments
(in millions)
Duke Energy
Carolinas
Historical
Duke Energy
Progress
Historical
Combined
Eliminations of
Intercompany
Transactions
Notes
Pro Forma
Balance
Operating Revenues
$
9,713
$
7,386
$
17,099
$
(478
)
(a)
$
16,621
Operating Expenses
Fuel used in electric generation and purchased power
2,649
2,518
5,167
(469
)
(a)
4,698
Operation, maintenance and other
2,002
1,455
3,457
(9
)
(a)
3,448
Depreciation and amortization
1,903
1,406
3,309
-
3,309
Property and other taxes
349
172
521
-
521
Impairment of assets and other charges
(11
)
2
(9
)
-
(9
)
Total operating expenses
6,892
5,553
12,445
(478
)
11,967
Gains on sales of other assets and other, net
6
2
8
-
8
Operating Income
2,827
1,835
4,662
-
4,662
Other income and expenses, net
258
196
454
(1
)
(a)
453
Interest Expense
783
526
1,309
(1
)
(a)
1,308
Income Before Income Taxes
2,302
1,505
3,807
-
3,807
Income Tax Expense
194
223
417
-
417
Net Income
$
2,108
$
1,282
$
3,390
$
-
$
3,390
Other Comprehensive Income, net of tax
Net gains on cashflow hedges
1
-
1
-
1
Comprehensive Income
$
2,109
$
1,282
$
3,391
$
-
$
3,391
See accompanying Notes to the Unaudited Pro
Forma Condensed Combined Financial information, which is an integral part of this information.
Duke Energy Carolinas, LLC
Unaudited Pro Forma Condensed Combined Statement
of Operations
For the Year Ended December 31, 2024
Transaction Accounting Adjustments
(in millions)
Duke Energy
Carolinas
Historical
Duke Energy
Progress
Historical
Combined
Eliminations of
Intercompany
Transactions
Notes
Pro Forma
Balance
Operating Revenues
$
9,718
$
7,017
$
16,735
$
(232
)
(a)
$
16,503
Operating Expenses
Fuel used in electric generation and purchased power
3,251
2,409
5,660
(223
)
(a)
5,437
Operation, maintenance and other
1,740
1,388
3,128
(9
)
(a)
3,119
Depreciation and amortization
1,768
1,336
3,104
-
3,104
Property and other taxes
346
177
523
-
523
Impairment of assets and other charges
31
6
37
-
37
Total operating expenses
7,136
5,316
12,452
(232
)
12,220
Gains on sales of other assets and other, net
2
2
4
-
4
Operating Income
2,584
1,703
4,287
-
4,287
Other income and expenses, net
247
143
390
(2
)
(a)
388
Interest Expense
722
493
1,215
(2
)
(a)
1,213
Income Before Income Taxes
2,109
1,353
3,462
-
3,462
Income Tax Expense
226
189
415
-
415
Net Income and Comprehensive Income
$
1,883
$
1,164
$
3,047
$
-
$
3,047
See accompanying Notes to the Unaudited Pro
Forma Condensed Combined Financial information, which is an integral part of this information.
Duke Energy Carolinas, LLC
Unaudited Pro Forma Condensed Combined Statement
of Operations
For the Year Ended December 31, 2023
Transaction Accounting Adjustments
(in millions)
Duke Energy
Carolinas
Historical
Duke Energy
Progress
Historical
Combined
Eliminations of
Intercompany
Transactions
Notes
Pro Forma
Balance
Operating Revenues
$
8,288
$
6,488
$
14,776
$
(219
)
(a)
$
14,557
Operating Expenses
Fuel used in electric generation and purchased power
2,524
2,203
4,727
(211
)
(a)
4,516
Operation, maintenance and other
1,774
1,379
3,153
(8
)
(a)
3,145
Depreciation and amortization
1,593
1,266
2,859
-
2,859
Property and other taxes
320
164
484
-
484
Impairment of assets and other charges
44
29
73
-
73
Total operating expenses
6,255
5,041
11,296
(219
)
11,077
Gains on sales of other assets and other, net
26
3
29
-
29
Operating Income
2,059
1,450
3,509
-
3,509
Other income and expenses, net
238
124
362
(1
)
(a)
361
Interest Expense
686
427
1,113
(1
)
(a)
1,112
Income Before Income Taxes
1,611
1,147
2,758
-
2,758
Income Tax Expense
141
149
290
-
290
Net Income and Comprehensive Income
$
1,470
$
998
$
2,468
$
-
$
2,468
See accompanying Notes to the Unaudited Pro
Forma Condensed Combined Financial information, which is an integral part of this information.
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
1.
Basis of Pro Forma Presentation
The unaudited pro forma condensed combined financial information has
been prepared in accordance with Article 11 of Regulation S-X, as amended by the final rule, Release No. 33-10786, Amendments
to Financial Disclosures about Acquired and Disposed Businesses. Under these rules, pro forma information is required to present adjustments
that reflect the accounting for the transaction (“Transaction Accounting Adjustments”)
The pro forma adjustments reflected in the unaudited pro forma condensed
combined financial information are based on currently available information and assumptions management considered reasonable under the
circumstances. The adjustments are described in the accompanying notes and may be revised as additional information becomes available
and is evaluated. Accordingly, the actual adjustments may differ from the pro forma adjustments, and such differences may be material.
The unaudited pro forma condensed combined financial information is
intended to present the significant effects of the Combination and reflects adjustments that are appropriately applied in accordance with
Article 11 of Regulation S-X.
2.
Accounting Treatment for the Merger
Although the Combination will be effected as a legal reorganization,
it is expected to be accounted for as a transaction between entities under common control in accordance with U.S. generally accepted accounting
principles and not as a business combination under ASC 805. Duke Energy is expected to contribute ownership of Duke
Energy Carolinas to Progress Energy, a subsidiary of Duke Energy, after which Duke Energy Progress will merge with and into Duke Energy
Carolinas.
Following the Combination, the regulated electric utility operations
of Duke Energy in North Carolina and South Carolina will be organized under Progress Energy and Duke Energy Carolinas.
Under common control accounting, the assets and liabilities of Duke Energy Carolinas and Duke Energy Progress are expected to be recorded
at their historical carrying amounts. Accordingly, no new goodwill or other intangible assets will be recognized as a result of the Combination,
and no gain or loss will be recorded. Existing goodwill attributable to Duke Energy Progress from prior purchase accounting is reflected
and carried forward.
In connection with the Combination, Duke Energy Carolinas is expected to reflect the effects of pushdown accounting related to the 2012
Merger, which were previously only recognized in Duke Energy's consolidated financial statements. As a result, the assets and liabilities
of the combined company reflect the historical purchase accounting adjustments recorded by Duke Energy, including goodwill attributable
to Duke Energy Progress that is carried forward (i.e., not newly recognized) as part of the Combination. There are no material impacts
to the pro forma condensed combined statements of operations resulting from the historical purchase accounting adjustments; accordingly,
no pro forma adjustments have been recorded to reflect such impacts.
The pro forma adjustments are based on currently available information
and assumptions that are factually supportable and directly attributable to the Combination and do not reflect the costs of any integration
activities or the benefits of potential future revenue growth or operational synergies.
3.
Transaction Accounting Adjustments
The following adjustments in the unaudited pro forma condensed combined
balance sheet and statements of operations reflect the impact of adjustments that are directly attributable to the Combination. The unaudited
pro forma condensed combined balance sheet as of March 31, 2026, gives pro forma effect to the Combination as if it had occurred
on March 31, 2026. The unaudited pro forma condensed combined statements of operations for the years ended December 31, 2025,
2024, and 2023, and for the three months ended March 31, 2026, give effect to the Combination as if it had occurred on January 1,
2023.
(a)
Represents the elimination of intercompany balances and transactions between Duke Energy Carolinas and Duke Energy Progress, primarily
intercompany receivables and payables, electricity sales, purchased power and intercompany interest.
(b)
Represents prior purchase accounting adjustments related to debt with respect to the Duke Energy Progress business
originating from the 2012 Merger. These adjustments affect noncurrent regulatory assets and long-term debt.
(c)
Represents prior purchase accounting adjustments related to asset retirement obligations with respect to the Duke Energy Progress
business originating from the 2012 Merger. These adjustments affect noncurrent regulatory assets and long-term asset retirement obligations.
(d)
The 2012 Merger created goodwill of $12,469 million at Duke Energy, of which $8,358 million was attributable to Duke Energy
Progress. The goodwill represents a basis difference between the net assets of Duke Energy Progress and Duke Energy's basis in Duke
Energy Progress and accordingly, the goodwill balance of $8,358 million is transferred as part of the Combination. As a result, the
combined entity reflects the historical goodwill attributed to Duke Energy Progress, and no new goodwill will be recognized as part
of the Combination.