Current Report Filing (8-k)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549 

 

 

 

FORM 8-K

 

 

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934

 

Date of report (Date of earliest event reported): September 8, 2021

 

Commission file number	Registrant, State of Incorporation or Organization, Address of Principal Executive Offices and Telephone Number	IRS Employer Identification Number
1-32853	DUKE ENERGY CORPORATION (a Delaware corporation) 550 South Tryon Street Charlotte, North Carolina 28202-1803 704-382-3853	20-2777218
1-3543	DUKE ENERGY INDIANA, LLC (an Indiana limited liability company) 1000 East Main Street Plainfield, Indiana 46168 704-382-3853	35-0594457

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425).

 

¨

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12).

 

¨

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)).

 

¨

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240. 13e-4(c)).

 

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

 

Registrant		Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Duke Energy		Common Stock, $0.001 par value		DUK		New York Stock Exchange LLC
Duke Energy		5.125% Junior Subordinated Debentures due January 15, 2073		DUKH		New York Stock Exchange LLC
Duke Energy		5.625% Junior Subordinated Debentures due September 15, 2078		DUKB		New York Stock Exchange LLC
Duke Energy		Depositary Shares each representing a 1/1,000th interest in a share of 5.75% Series A Cumulative Redeemable Perpetual Preferred Stock, par value $0.001 per share		DUK PR A		New York Stock Exchange LLC

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

 

 

 

 

 

Introductory Note.

 

On September 8, 2021, Duke Energy Corporation (“Duke Energy”), along with certain of its subsidiaries, consummated the initial closing (the “First Closing”) of a minority investment in Duke Energy Indiana, LLC (“DEI”) by an affiliate of GIC, a leading global investment firm based in Singapore with significant investments in U.S. utilities and infrastructure companies.

 

Pursuant to the previously announced Investment Agreement (the “Investment Agreement”), dated January 28, 2021, by and among Cinergy Corp. (“Cinergy”), Duke Energy Indiana Holdco, LLC (“DEI Holdco”), Duke Energy and Epsom Investment Pte. Ltd. (“Investor”), at the First Closing on September 8, 2021, DEI Holdco issued and sold to Investor a number of DEI Holdco membership interests equal to 11.05% of the DEI Holdco membership interests issued and outstanding immediately after the First Closing in exchange for $1,024,850,000. At the second closing (the “Second Closing”), which is to occur on a date to be proposed by DEI Holdco that is no later than January 18, 2023 and on which the applicable conditions have been satisfied, DEI Holdco will issue and sell to Investor an additional number of DEI Holdco membership interests such that Investor will hold an aggregate of 19.9% of the DEI Holdco membership interests issued and outstanding immediately after the Second Closing in exchange for $1,025,000,000.

 

Item 1.01 Entry into a Material Definitive Agreement.

 

On September 8, 2021, in connection with the First Closing, Investor, DEI Holdco and Cinergy entered into an Amended and Restated Limited Liability Company Operating Agreement of DEI Holdco (the “LLC Agreement”). The LLC Agreement, among other things, establishes the general framework governing the relationship between Investor and Cinergy, and their respective successors and transferees, as members of DEI Holdco. Under the LLC Agreement, (i) prior to the Second Closing, the board of directors of DEI Holdco (the “Board”) will consist of nine directors, one nominated by Investor and eight nominated by DEI Holdco and (ii) following the Second Closing, the Board will consist of ten directors, two nominated by Investor and eight nominated by DEI Holdco. The LLC Agreement contains certain investor protections, including (1) requiring Investor approval or the affirmative vote of the director nominated by Investor for DEI Holdco to make certain major decisions, and (2) providing Investor with the right to sell its membership interests in DEI Holdco to Cinergy upon the making of certain other major decisions (in each case, subject to certain minimum ownership thresholds). Certain transfer restrictions and other transfer rights apply to Investor and Cinergy under the LLC Agreement.

 

The foregoing summary of the LLC Agreement and the transactions contemplated thereby are subject to, and qualified in their entirety by, the full terms of the LLC Agreement, which is attached hereto as Exhibit 10.1 and incorporated herein by reference.

 

Item 2.01 Completion of Acquisition or Disposition of Assets.

 

The description under the Introductory Note in this Current Report on Form 8-K is incorporated herein by reference under this Item 2.01.

 

Item 7.01 Regulation FD Disclosure.

 

On September 8, 2021, Duke issued a press release announcing the First Closing. A copy of the press release is attached hereto as Exhibit 99.1.

 

The information in Exhibit 99.1 is being furnished pursuant to this Item 7.01. In accordance with General Instruction B.2 of Form 8-K, the information in Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section.

 

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Forward Looking Statements

 

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 impact of the COVID-19 pandemic;

•

State, federal and foreign legislative and regulatory initiatives, including costs of compliance with existing and future environmental requirements, 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 recover eligible costs, including amounts associated with coal ash impoundment retirement obligations and costs related to significant weather events, 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;

•

Costs and effects of legal and administrative proceedings, settlements, investigations and claims;

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Industrial, commercial and residential growth or decline in service territories or customer bases resulting from sustained downturns of the economy and the economic health of our service territories or variations in customer usage patterns, including energy efficiency efforts 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 and distributed generation technologies, such as private solar and battery storage, in Duke Energy service territories could result in customers leaving the electric distribution system, excess generation resources as well as stranded costs;

•

Advancements in technology;

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Additional competition in electric and natural gas markets and continued industry consolidation;

•

The influence of weather and other natural phenomena on operations, including the economic, operational and other effects of severe storms, hurricanes, droughts, earthquakes and tornadoes, including extreme weather associated with climate change;

•

Changing customer expectations and demands including heightened emphasis on environmental, social and governance concerns;

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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;

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The availability of adequate interstate pipeline transportation capacity and natural gas supply;

•

The impact on facilities and business from a terrorist attack, cybersecurity threats, data security breaches, operational accidents, information technology failures or other catastrophic events, such as fires, explosions, pandemic health events or other similar occurrences;

 

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•

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 and interest rates and the ability to 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 and general market and economic conditions;

•

Credit ratings of Duke Energy and DEI (the “Duke Energy Registrants”) may be different from what is expected;

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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, obtaining and complying with terms of permits, meeting construction budgets and schedules 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;

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The ability to control operation and maintenance costs;

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The level of creditworthiness of counterparties to transactions;

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The ability to obtain adequate insurance at acceptable costs;

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Employee workforce factors, including the potential inability to attract and retain key personnel;

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The ability of subsidiaries to pay dividends or distributions to Duke Energy Corporation holding company (the Parent);

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The performance of projects undertaken by our nonregulated businesses and the success of efforts to invest in and develop new opportunities;

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The effect of accounting pronouncements issued periodically by accounting standard-setting bodies;

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The impact of United States tax legislation to our financial condition, results of operations or cash flows and our credit ratings;

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The impacts from potential impairments of goodwill or equity method investment carrying values;

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Asset or business acquisitions and dispositions, including our ability to successfully consummate the Second Closing or that the sale to Investor may not yield the anticipated benefits;

•

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; and

•

The ability to implement our business strategy, including enhancing existing technology systems.

 

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.

 

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Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits.

 

10.1	Amended and Restated Limited Liability Company Operating Agreement of Duke Energy Indiana Holdco, LLC, dated September 8, 2021
99.1	Press Release, dated September 8, 2021 (furnished pursuant to Item 7.01)
104	Cover Page Interactive Data File (the cover page XBRL tags are embedded in the Inline XBRL document).

 

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SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

		DUKE ENERGY CORPORATION
	By:	/s/ David S. Maltz
	Name:	David S. Maltz
	Title:	Vice President, Legal, Chief Governance Officer and Assistant Corporate Secretary

 

Date: September 8, 2021

 

		DUKE ENERGY INDIANA, LLC
	By:	/s/ David S. Maltz
	Name:	David S. Maltz
	Title:	Vice President, Legal, Chief Governance Officer and Assistant Secretary

 

Date: September 8, 2021

 

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