When two bar magnets are held with their north poles facing each other, they are in a position of potential energy due to the repulsive magnetic force acting between them. Upon release, the magnets will move apart from each other, resulting in a decrease in potential energy as they separate. The energy that is released or converted during this movement will appear as kinetic energy (as the magnets accelerate away from each other) and may also generate some thermal energy due to friction or air resistance as they move.
The correct statement that describes the changes in energy when the magnets are released is:
Potential energy decreases, and kinetic and thermal energy increase.