Attached files
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| 8-K - 8-K - Duke Energy CORP | d815476d8k.htm |
Exhibit 99.1
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Media Contact: Tom Shiel
Office: 704.382.2355 | 24-Hour: 800.559.3853
Analysts: Bill Currens
Office: 704.382.1603
Nov. 5, 2014
Duke Energy reports third quarter earnings; on track to achieve 2014 guidance
| • | Third quarter 2014 adjusted diluted earnings per share (EPS) were $1.40, compared to $1.46 for the third quarter 2013 |
| • | Reported diluted EPS for the third quarter 2014 was $1.80, compared to $1.42 for the third quarter 2013 |
| • | Reported results for third quarter 2014 include a pre-tax reversal of an impairment charge originally taken in the first quarter based on the estimated fair value of the Midwest generation business. The reversal of $477 million, or $0.43 per share, is the result of the fair value exceeding the previous estimate |
| • | Company is on track to achieve its revised 2014 adjusted earnings guidance range of $4.50 to $4.65 per share |
CHARLOTTE, N.C. – Duke Energy today announced third quarter 2014 adjusted diluted EPS of $1.40, compared to $1.46 for third quarter 2013, and reported diluted EPS of $1.80, compared to $1.42 for the same period last year.
Quarterly adjusted EPS for the Regulated Utilities was relatively flat, while stronger results in Commercial Power were substantially offset by lower earnings at International Energy. On a consolidated basis, the company experienced a higher effective tax rate for the quarter compared to last year.
Reported results for the quarter were affected by a $477 million, or $0.43 per share, pre-tax reversal of a previously recognized impairment charge related to the sale of the company’s Midwest generation business. This impairment reversal was recorded in discontinued operations and has been excluded from the company’s adjusted diluted EPS results.
For the second summer in a row, the company experienced below normal weather. Cooling degree days were around 10 percent below normal in the Carolinas and almost 30 percent lower in the Midwest.
| Duke Energy News Release | 2 |
Based on results through the third quarter, the company remains on track to achieve its revised 2014 adjusted earnings guidance range of $4.50 to $4.65 per share.
“Although the weather this summer was milder than usual, we remain on track to meet our financial objectives for 2014 and beyond,” said President and CEO Lynn Good.
“Our generation assets performed well during the third quarter, led by the nuclear fleet’s record 98 percent capacity factor,” Good added.
“We also achieved several milestones in our growth strategy as we prepare to serve the evolving needs of our customers into the future,” she said. “We’re investing in solar projects and new natural gas generation; planning a major grid modernization in Indiana; and proposing to invest in the Atlantic Coast Pipeline that will bring diverse natural gas supplies to eastern North Carolina.
“Additionally, we continue to move forward with the sale of our Midwest generation business to Dynegy.”
Business unit results
In addition to the summary business unit discussion below, a comprehensive table of quarterly and year-to-date adjusted earnings per share drivers compared to the prior year are provided on pages 11 and 12.
The discussion below of third-quarter results includes adjusted segment income, which is a non-GAAP financial measure. The tables on pages 25 through 28 present a reconciliation of reported results to adjusted results.
Regulated Utilities
Regulated Utilities recognized third quarter 2014 adjusted segment income of $920 million, which was essentially flat compared to $923 million in the third quarter 2013.
Favorable drivers included:
| • | Higher revenues from increased pricing and riders (+$0.07 per share) primarily related to the implementation of revised customer rates |
| • | Although weather for the quarter was below normal, summer temperatures were still more favorable than last year (+$0.04 per share) |
| • | Favorable change in effective tax rate (+$0.04 per share) |
These favorable drivers were offset by:
| • | Higher depreciation and amortization expense (-$0.06 per share) primarily resulting from additional plant in-service and the prior-year impact of cost of removal amortization in Florida |
| Duke Energy News Release | 3 |
| • | Higher interest expense (-$0.04 per share) primarily due to financing costs on projects now reflected in customer rates |
| • | Lower weather-normal retail customer volumes (-$0.03 per share) of -0.6 percent compared to an increase of 1.7 percent in the third quarter of 2013 |
| • | Higher property and other non-income taxes (-$0.03 per share) |
On a year-to-date basis, Regulated Utilities recognized adjusted segment income of $2,346 million, compared to $2,169 million in the comparable year-to-date period of 2013, an increase of $0.25 per share.
Increased year-to-date results at Regulated Utilities were primarily driven by:
| • | Higher revenues from increased pricing and riders (+$0.27 per share) primarily related to the implementation of revised customer rates |
| • | Favorable weather (+$0.19 per share) across Duke Energy’s service territories |
| • | Favorable change in effective tax rate (+$0.08 per share) primarily due to a state tax settlement that resulted in a favorable adjustment to deferred taxes |
| • | Increased wholesale net margins (+$0.05 per share) primarily resulting from growth in contracted amounts and favorable weather |
| • | Higher weather-normal retail customer volumes (+$0.03 per share) of 0.7 percent compared to 2013 primarily driven by strong results in the first quarter (+2.6 percent) |
These favorable drivers were partially offset by:
| • | Higher depreciation and amortization expense (-$0.21 per share) due to additional plant in-service and the prior-year impact of cost-of-removal amortization primarily in Florida |
| • | Higher interest expense (-$0.10 per share) due to financing costs on projects now reflected in customer rates |
| • | Higher property and other non-income taxes (-$0.04 per share) |
| • | Lower Allowance for Funds Used During Construction (AFUDC) equity (-$0.03 per share) primarily due to the completion of certain major capital projects |
International Energy
International Energy recognized third quarter 2014 adjusted segment income of $80 million, compared to $116 million in the third quarter 2013, a decrease of $0.05 per share.
| Duke Energy News Release | 4 |
International Energy’s decreased quarterly adjusted earnings were primarily driven by unfavorable results in Latin America (-$0.05 per share) primarily due to lower volumes and higher purchased power costs resulting from poor hydrology in Brazil as well as an unplanned plant outage in Chile.
On a year-to-date basis, International Energy recognized adjusted segment income of $356 million, compared to $300 million in the comparable year-to-date period of 2013, an increase of $0.08 per share.
International Energy’s improved year-to-date adjusted earnings were driven by:
| • | Stronger results in Latin America (+$0.08 per share) primarily due to a tax benefit resulting from the reorganization of the company’s operations in Chile |
| • | Higher results at National Methanol Company (+$0.01 per share) due to a prior-year extended planned maintenance outage |
These favorable drivers were partially offset by unfavorable foreign currency exchange rates (-$0.02 per share)
Commercial Power
Commercial Power recognized third quarter 2014 adjusted segment income of $51 million, compared to $15 million in the third quarter 2013, an increase of $0.05 per share.
Commercial Power’s improved quarterly adjusted earnings were primarily driven by higher results from the Midwest coal and gas generation fleets (+$0.05 per share) primarily due to higher PJM capacity prices.
On a year-to-date basis, Commercial Power recognized adjusted segment income of $77 million, compared to $18 million in the comparable year-to-date period of 2013, an increase of $0.08 per share.
Commercial Power’s improved year-to-date adjusted earnings were primarily driven by:
| • | Higher results from the Midwest coal and gas generation fleets (+$0.08 per share) primarily due to higher PJM capacity prices |
| • | Increased results from the renewables business (+$0.04 per share) due to higher production of the wind and solar portfolio |
These results were partially offset by lower earnings from Duke Energy Retail (-$0.03 per share).
| Duke Energy News Release | 5 |
Other
On an adjusted basis, Other primarily includes corporate interest expense not allocated to the business units, results from Duke Energy’s captive insurance company, other investments, and income tax levelization adjustments.
Other recognized a third quarter 2014 adjusted net expense of $58 million, compared to $21 million in the third quarter 2013, a decrease of $0.05 per share primarily driven by a prior-year state deferred tax adjustment.
On a year-to-date basis, Other recognized adjusted net expense of $171 million, compared to $114 million in the comparable year-to-date period of 2013, a decrease of $0.08 per share primarily driven by a prior-year state deferred tax adjustment.
On a consolidated basis, the company experienced a third-quarter 2014 adjusted effective tax rate of approximately 33.5 percent, compared to 32 percent in the prior year. On a year-to-date basis, the company experienced an adjusted effective tax rate of approximately 32 percent, compared to 33.5 percent in the prior year. Adjusted effective tax rate is a non-GAAP financial measure. The tables on pages 29 and 30 present a reconciliation of reported effective tax rate to adjusted effective tax rate.
Third quarter 2014 accounting matters
Coal ash
Duke Energy recognized a liability of approximately $3.4 billion in asset retirement obligations (ARO) on Sept. 30, 2014, primarily as a result of the Coal Ash Management Act of 2014, which requires closure of ash basins in North Carolina. The ARO is calculated using a probability weighted net present value model for a number of different closure scenarios. This estimate will be refined as ash basin closure plans and related strategies are finalized and approved.
The ARO relating to operating plants has been included in Property, Plant and Equipment and the ARO relating to retired plants has been included in Regulatory assets on the Condensed Consolidated Balance Sheets, as of Sept. 30, 2014.
Midwest generation sale
Following the announcement of the sale of the nonregulated Midwest generation business to Dynegy in the third quarter 2014, this business was reclassified as discontinued operations for accounting purposes. Despite this accounting designation, financial results from this business will remain in Duke Energy’s adjusted earnings, adjusted diluted EPS and adjusted segment income during 2014.
Earnings Conference Call for Analysts
An earnings conference call for analysts is scheduled for 10 a.m. ET today to discuss Duke Energy’s financial performance for the quarter and other business updates.
| Duke Energy News Release | 6 |
The conference call will be hosted by Lynn Good, president and chief executive officer, and Steve Young, executive vice president and chief financial officer.
The call can be accessed via the investors’ section (http://www.duke-energy.com/investors/) of Duke Energy’s website or by dialing 888-471-3820 in the United States or 719-457-2619 outside the United States. The confirmation code is 8226680. Please call in 10 to 15 minutes prior to the scheduled start time.
A replay of the conference call will be available until 1 p.m. ET, Nov. 15, 2014, by calling 888-203-1112 in the United States or 719-457-0820 outside the United States and using the code 8226680. A replay and transcript also will be available by accessing the investors’ section of the company’s website.
Special Items and Non-GAAP Reconciliation
Special items affecting Duke Energy’s adjusted diluted EPS for third quarter 2014 and third quarter 2013 include:
| (In millions, except per-share amounts) |
After-Tax Amount |
3Q2014 EPS Impact |
3Q2013 EPS Impact |
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| Third Quarter 2014 |
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| • Costs to achieve, Progress Energy merger |
$ | (35 | ) | $ | (0.05 | ) | ||||||
| • Asset sales |
$ | 9 | $ | 0.01 | ||||||||
| • Discontinued operations (1)(2) |
$ | 307 | $ | 0.44 | ||||||||
| Third Quarter 2013 |
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| • Costs to achieve, Progress Energy merger |
$ | (54 | ) | $ | (0.08 | ) | ||||||
| • Discontinued operations (1)(3) |
$ | 25 | $ | 0.04 | ||||||||
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| Total diluted EPS impact |
$ | 0.40 | $ | (0.04 | ) | |||||||
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| (1) | Reported discontinued operations includes the 2014 reversal of the Midwest generation impairment, the economic hedges (mark-to-market) of Midwest generation, and operating results of the Midwest generation business. |
| (2) | Represents reported discontinued operations of $0.55 per diluted share, net of the Midwest generation operation results classified as discontinued operations of $0.11 per diluted share, which are treated as a special item and reflected in adjusted diluted EPS. |
| (3) | Represents reported discontinued operations of $0.09 per diluted share, net of elimination entries of $0.01 per diluted share, and the Midwest generation operation results classified as discontinued operations of $0.04 per diluted share, which are treated as a special item and reflected in adjusted diluted EPS. |
Reconciliation of reported to adjusted diluted EPS for the quarters:
| 3Q2014 EPS |
3Q2013 EPS |
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| Diluted EPS, as reported |
$ | 1.80 | $ | 1.42 | ||||
| Adjustments to reported EPS: |
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| • Diluted EPS impact of special items and discontinued operations (net of tax) |
$ | (0.40 | ) | $ | 0.04 | |||
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| Diluted EPS, adjusted |
$ | 1.40 | $ | 1.46 | ||||
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| Duke Energy News Release | 7 |
Non-GAAP financial measures
Management evaluates financial performance in part based on the non-GAAP financial measures, adjusted earnings and adjusted diluted earnings per share (EPS). These items are measured as income from continuing operations net of income (loss) attributable to noncontrolling interests, adjusted for dollar and per share impact of mark-to-market impacts of economic hedges in the Commercial Power segment and special items including the operating results of the nonregulated Midwest generation business (Disposal Group) classified as discontinued operations for GAAP purposes. Special items represent certain charges and credits, which management believes will not be recurring on a regular basis, although it is reasonably possible such charges and credits could recur. As result of the agreement in August of 2014 to sell the Disposal Group to Dynegy, the operating results of the Disposal Group were classified as discontinued operations in the current period and retrospectively, including a portion of the mark-to-market adjustments associated with derivative contracts. Management believes that including the operating results of the Disposal Group classified as discontinued operations better reflects its financial performance and therefore has included these results in adjusted earnings and adjusted diluted EPS. Derivative contracts are used in Duke Energy’s hedging of a portion of the economic value of its generation assets in the Commercial Power segment. The mark-to-market impact of derivative contracts is recognized in GAAP earnings immediately and, if associated with the Disposal Group, classified as discontinued operations, as such derivative contracts do not qualify for hedge accounting or regulatory treatment. The economic value of generation assets is subject to fluctuations in fair value due to market price volatility of input and output commodities (e.g. coal, electricity, natural gas). Economic hedging involves both purchases and sales of those input and output commodities related to generation assets. Operations of the generation assets are accounted for under the accrual method. Management believes excluding impacts of mark-to-market changes of the derivative contracts from adjusted earnings until settlement better matches the financial impacts of the derivative contract with the portion of economic value of the underlying hedged asset. However, due to the divestiture of the Disposal Group as mentioned above, certain derivative positions have tenors beyond the planned disposal date of these assets. As such, management excluded any settlement of these derivative positions from adjusted diluted EPS as these realized gains and losses more closely relate to the disposal of these assets. Management believes the presentation of adjusted earnings and adjusted diluted EPS provides useful information to investors, as it provides them an additional relevant comparison of Duke Energy’s performance across periods. Management uses these non-GAAP financial measures for planning and forecasting and for reporting results to the Board of Directors, employees, shareholders, analysts and investors concerning Duke Energy’s financial performance. Adjusted diluted EPS is also used as a basis for employee incentive bonuses. The most directly comparable GAAP measures for adjusted earnings and adjusted diluted EPS are Net Income Attributable to Duke Energy Corporation and Diluted EPS Attributable to Duke Energy Corporation common shareholders, which include the dollar and per share impact of special items, mark-to-market impacts of economic hedges in the Commercial Power segment and discontinued operations.
| Duke Energy News Release | 8 |
Management evaluates segment performance based on segment income. Segment income is defined as income from continuing operations net of income attributable to noncontrolling interests. Segment income, as discussed below, includes intercompany revenues and expenses that are eliminated in the Condensed Consolidated Financial Statements. Management also uses adjusted segment income as a measure of historical and anticipated future segment performance. Adjusted segment income is a non-GAAP financial measure, as it is based upon segment income adjusted for the mark-to-market impacts of economic hedges in the Commercial Power segment and special items, including the operating results of the Disposal Group classified as discontinued operations for GAAP purposes. Management believes the presentation of adjusted segment income as presented provides useful information to investors, as it provides them with an additional relevant comparison of a segment’s performance across periods. The most directly comparable GAAP measure for adjusted segment income is segment income, which represents segment income from continuing operations, including any special items and the mark-to-market impacts of economic hedges in the Commercial Power segment.
Due to the forward-looking nature of any forecasted adjusted earnings guidance, information to reconcile this non-GAAP financial measure to the most directly comparable GAAP financial measure is not available at this time, as management is unable to project all special items or mark-to-market adjustments for future periods. The earnings guidance range assumptions for 2014 include a full-year of earnings contributions from the nonregulated Midwest generation business, which management has entered into an agreement to sell. Irrespective of discontinued operations accounting treatment, operating results from the nonregulated Midwest generation business will be included in Duke Energy’s adjusted earnings, adjusted diluted EPS, and adjusted segment income during 2014.
Due to the forward-looking nature of any forecasted adjusted segment income or adjusted Other net expenses and any related growth rates for future periods, information to reconcile these non-GAAP financial measures to the most directly comparable GAAP financial measures is not available at this time, as the company is unable to forecast all special items, the mark-to-market impacts of economic hedges in the Commercial Power segment, or any amounts that may be reported as discontinued operations or extraordinary items for future periods.
Duke Energy is the largest electric power holding company in the United States with more than $115 billion in total assets. Its regulated utility operations serve approximately 7.2 million electric customers located in six states in the Southeast and Midwest. Its commercial power and international business segments own and operate diverse power generation assets in North America and Latin America, including a growing portfolio of renewable energy assets in the United States.
| Duke Energy News Release | 9 |
Headquartered in Charlotte, N.C., Duke Energy is a Fortune 250 company traded on the New York Stock Exchange under the symbol DUK. More information about the company is available at duke-energy.com.
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.
These forward-looking statements are identified by terms and phrases such as “anticipate,” “believe,” “intend,” “estimate,” “expect,” “continue,” “should,” “could,” “may,” “plan,” “project,” “predict,” “will,” “potential,” “forecast,” “target,” “outlook,” “guidance,” and similar expressions. Forward-looking statements involve risks and uncertainties that may cause actual results to be materially different from the results predicted. Factors that could cause actual results to differ materially from those indicated in any forward-looking statement include, but are not limited to: state, federal and foreign legislative and regulatory initiatives, including costs of compliance with existing and future environmental requirements or 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 the costs and liabilities relating to the Dan River ash basin release and future regulatory changes related to the management of coal ash; the ability to recover eligible costs, including those associated with future significant weather events, and earn an adequate return on investment through the regulatory process; the costs of decommissioning Crystal River Unit 3 could prove to be more extensive than is currently identified and all costs may not be fully recoverable through the regulatory process; the risk that the credit ratings of the combined company or its subsidiaries may be different from what the companies expect; costs and effects of legal and administrative proceedings, settlements, investigations and claims; industrial, commercial and residential growth or decline in service territories or customer bases resulting from customer usage patterns, including energy efficiency effort and use of alternative energy sources including self-generation and distributed generation technologies; additional competition in electric markets and continued industry consolidation; political and regulatory uncertainty in other countries in which Duke Energy conducts business; the influence of weather and other natural phenomena on operations, including the economic, operational and other effects of severe storms, hurricanes, droughts and tornadoes; the ability to successfully operate electric generating facilities and deliver electricity to customers; the impact on facilities and business from a terrorist attack, cyber security threats, data security breaches and other catastrophic events; the inherent risks associated with the operation and potential construction of nuclear facilities, including environmental, health, safety, regulatory and financial risks; the timing and extent of changes in commodity prices, interest rates and foreign currency exchange rates and the ability to recover such costs through the
| Duke Energy News Release | 10 |
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 and general economic conditions; 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; 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; 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 nonregulated businesses and the success of efforts to invest in and develop new opportunities; the effect of accounting pronouncements issued periodically by accounting standard-setting bodies; the impact of potential goodwill impairments; the ability to reinvest retained earnings of foreign subsidiaries or repatriate such earnings on a tax-free basis; and the ability to successfully complete future merger, acquisition or divestiture plans.
Additional risks and uncertainties are identified and discussed in Duke Energy’s and its subsidiaries’ reports filed with the SEC and available at the SEC’s website at www.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 Duke Energy has described. Duke Energy undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
###
DUKE ENERGY CORPORATION
EARNINGS VARIANCES
September 2014 QTD vs. Prior Year
| ($ per share) | Regulated Utilities |
International Energy |
Commercial Power |
Other | Consolidated | |||||||||||||||
| 2013 QTD Reported Earnings Per Share, Diluted |
$ | 1.31 | $ | 0.16 | $ | (0.04 | ) | $ | (0.09 | ) | $ | 1.42 | ||||||||
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| Costs to Achieve, Progress Merger |
— | — | — | 0.08 | 0.08 | |||||||||||||||
| Midwest Generation Operations (offset in Discontinued Operations) |
— | — | 0.06 | (0.02 | ) | 0.04 | ||||||||||||||
| Discontinued Operations |
(0.08 | ) | ||||||||||||||||||
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| 2013 QTD Adjusted Earnings Per Share, Diluted |
$ | 1.31 | $ | 0.16 | $ | 0.02 | $ | (0.03 | ) | $ | 1.46 | |||||||||
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| Weather |
0.04 | — | — | — | 0.04 | |||||||||||||||
| Pricing and Riders (a) |
0.07 | — | — | — | 0.07 | |||||||||||||||
| Volume |
(0.03 | ) | — | — | — | (0.03 | ) | |||||||||||||
| Latin America, including Foreign Exchange Rates (b) |
— | (0.05 | ) | — | — | (0.05 | ) | |||||||||||||
| National Methanol Company |
— | (0.01 | ) | — | — | (0.01 | ) | |||||||||||||
| Midwest Generation (c) |
— | — | 0.05 | — | 0.05 | |||||||||||||||
| Duke Energy Retail |
— | — | (0.01 | ) | — | (0.01 | ) | |||||||||||||
| Duke Energy Renewables |
— | — | 0.01 | — | 0.01 | |||||||||||||||
| Interest Expense (d) |
(0.04 | ) | — | — | 0.01 | (0.03 | ) | |||||||||||||
| Change in effective income tax rate |
0.04 | — | — | (0.07 | ) | (0.03 | ) | |||||||||||||
| Other (e) |
(0.09 | ) | 0.01 | — | 0.01 | (0.07 | ) | |||||||||||||
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| 2014 QTD Adjusted Earnings Per Share, Diluted |
$ | 1.30 | $ | 0.11 | $ | 0.07 | $ | (0.08 | ) | $ | 1.40 | |||||||||
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| Costs to Achieve, Progress Merger |
— | — | — | (0.05 | ) | (0.05 | ) | |||||||||||||
| Asset Sales |
— | — | — | 0.01 | 0.01 | |||||||||||||||
| Midwest Generation Operations (offset in Discontinued Operations) |
— | — | (0.10 | ) | (0.01 | ) | (0.11 | ) | ||||||||||||
| Discontinued Operations |
0.55 | |||||||||||||||||||
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| 2014 QTD Reported Earnings Per Share, Diluted |
$ | 1.30 | $ | 0.11 | $ | (0.03 | ) | $ | (0.13 | ) | $ | 1.80 | ||||||||
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Note 1: Earnings Per Share amounts are calculated using the consolidated effective income tax rate.
Note 2: Adjusted and Reported Earnings Per Share amounts by segment may not recompute from other published schedules due to rounding.
| (a) | Primarily due to the September 2013 implementation of revised base rates for Duke Energy Carolinas (+$0.06). |
| (b) | Primarily driven by unfavorable results in Brazil (-$0.04) due to lower volumes and higher purchased power costs and unfavorable results in Chile (-$0.02) due to an unplanned outage, partially offset by favorable results in Central America (+$0.01) due to higher sales prices and volumes. |
| (c) | Primarily due to higher PJM capacity revenues (+$0.05) and lower depreciation and amortization due to ceasing depreciation on assets held for sale in the second quarter of 2014 (+$0.04), partially offset by the impairment of ongoing capital maintenance investments that are not expected to change the estimated fair value of the generation business (-$0.01) and lower coal generation margins (-$0.01). |
| (d) | Amount for Regulated Utilities is primarily due to the discontinuation of booking a post in-service debt return on projects that are now reflected in customer rates. |
| (e) | Amount for Regulated Utilities includes an increase in depreciation and amortization expense (-$0.06) due to higher depreciable base and lower adjustments to the cost of removal reserve, and higher non-income taxes (-$0.03), partially offset by higher wholesale net margins, including new contracts (+$0.01). |
11
DUKE ENERGY CORPORATION
EARNINGS VARIANCES
September 2014 YTD vs. Prior Year
| ($ per share) | Regulated Utilities |
International Energy |
Commercial Power |
Other | Consolidated | |||||||||||||||
| 2013 YTD Reported Earnings Per Share, Diluted |
$ | 2.73 | $ | 0.42 | $ | (0.07 | ) | $ | (0.39 | ) | $ | 2.79 | ||||||||
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| Crystal River Unit 3 Impairment |
0.26 | — | — | — | 0.26 | |||||||||||||||
| Nuclear Development Charges |
0.08 | — | — | — | 0.08 | |||||||||||||||
| Costs to Achieve, Progress Merger |
— | — | — | 0.20 | 0.20 | |||||||||||||||
| Litigation Reserve |
— | — | — | 0.04 | 0.04 | |||||||||||||||
| Midwest Generation Operations (offset in Discontinued Operations) |
— | — | 0.10 | (0.01 | ) | 0.09 | ||||||||||||||
| Discontinued Operations |
(0.10 | ) | ||||||||||||||||||
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| 2013 YTD Adjusted Earnings Per Share, Diluted |
$ | 3.07 | $ | 0.42 | $ | 0.03 | $ | (0.16 | ) | $ | 3.36 | |||||||||
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| Weather |
0.19 | — | — | — | 0.19 | |||||||||||||||
| Pricing and Riders (a) |
0.27 | — | — | — | 0.27 | |||||||||||||||
| Volumes |
0.03 | — | — | — | 0.03 | |||||||||||||||
| Latin America, including Foreign Exchange Rates (b) |
— | 0.06 | — | — | 0.06 | |||||||||||||||
| National Methanol Company |
— | 0.01 | — | — | 0.01 | |||||||||||||||
| Midwest Generation (c) |
— | — | 0.08 | — | 0.08 | |||||||||||||||
| Duke Energy Retail |
— | — | (0.03 | ) | — | (0.03 | ) | |||||||||||||
| Duke Energy Renewables (d) |
— | — | 0.04 | — | 0.04 | |||||||||||||||
| Interest Expense (e) |
(0.10 | ) | — | (0.01 | ) | 0.01 | (0.10 | ) | ||||||||||||
| Change in effective income tax rate |
0.08 | — | (0.01 | ) | (0.06 | ) | 0.01 | |||||||||||||
| Other (f)(g) |
(0.22 | ) | 0.01 | 0.01 | (0.03 | ) | (0.23 | ) | ||||||||||||
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| 2014 YTD Adjusted Earnings Per Share, Diluted |
$ | 3.32 | $ | 0.50 | $ | 0.11 | $ | (0.24 | ) | $ | 3.69 | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Asset Sales |
— | — | — | 0.01 | 0.01 | |||||||||||||||
| Costs to Achieve, Progress Merger |
— | — | — | (0.15 | ) | (0.15 | ) | |||||||||||||
| Midwest Generation Operations (offset in Discontinued Operations) |
— | — | (0.12 | ) | — | (0.12 | ) | |||||||||||||
| Asset Impairment |
— | — | (0.08 | ) | — | (0.08 | ) | |||||||||||||
| Economic Hedges (Mark-to-Market) |
— | — | (0.01 | ) | — | (0.01 | ) | |||||||||||||
| Discontinued Operations |
(0.82 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| 2014 YTD Reported Earnings Per Share, Diluted |
$ | 3.32 | $ | 0.50 | $ | (0.10 | ) | $ | (0.38 | ) | $ | 2.52 | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Note 1: Earnings Per Share amounts are calculated using the consolidated effective income tax rate.
Note 2: Adjusted and Reported Earnings Per Share amounts by segment may not recompute from other published schedules due to rounding.
| (a) | Primarily due to the September 2013 implementation of revised base rates for Duke Energy Carolinas (+$0.18), the June 2013 implementation of revised base rates for Duke Energy Progress (+$0.07), the January 1, 2014 implementation of revised base rates for Duke Energy Florida (+$0.03), and the May 2013 implementation of revised electric distribution rates for Duke Energy Ohio (+$0.02). |
| (b) | Primarily driven by a tax benefit related to the reorganization of the company’s operations in Chile (+$0.07), partially offset by unfavorable foreign exchange rates (-$0.02). |
| (c) | Primarily due to lower depreciation and amortization due to ceasing depreciation on assets held for sale in the second quarter of 2014 (+$0.08), higher PJM capacity revenues (+$0.07), and higher gas generation margins (+$0.03), partially offset by lower coal generation margins (-$0.05) and the impairment of ongoing capital maintenance investments that are not expected to change the estimated fair value of the generation business (-$0.03). |
| (d) | Primarily due to higher production of the wind and solar portfolio and lower operating costs. |
| (e) | Amount for Regulated Utilities is primarily due to the discontinuation of booking a post in-service debt return on projects that are now reflected in customer rates. |
| (f) | Amount for Regulated Utilities includes an increase in depreciation and amortization expense (-$0.21) due to higher depreciable base and the 2013 reduction in the cost of removal component of amortization expense for Duke Energy Florida, higher non-income taxes (-$0.04), and lower AFUDC-equity (-$0.03), partially offset by higher wholesale net margins, including new contracts (+$0.05). |
| (g) | Amount for Other includes unfavorable captive insurance loss experience (-$0.04). |
12
September 2014
QUARTERLY HIGHLIGHTS
(Unaudited)
| Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
| (In millions, except per-share amounts and where noted) |
2014 | 2013 | 2014 | 2013 | ||||||||||||
| COMMON STOCK DATA |
||||||||||||||||
| Income from continuing operations attributable to Duke Energy Corporation common shareholders |
||||||||||||||||
| Basic |
$ | 1.25 | $ | 1.33 | $ | 3.33 | $ | 2.67 | ||||||||
| Diluted |
$ | 1.25 | $ | 1.33 | $ | 3.33 | $ | 2.67 | ||||||||
| Income (Loss) from discontinued operations attributable to Duke Energy Corporation common shareholders |
||||||||||||||||
| Basic |
$ | 0.55 | $ | 0.09 | $ | (0.81 | ) | $ | 0.12 | |||||||
| Diluted |
$ | 0.55 | $ | 0.09 | $ | (0.81 | ) | $ | 0.12 | |||||||
| Net income attributable to Duke Energy Corporation common shareholders |
||||||||||||||||
| Basic |
$ | 1.80 | $ | 1.42 | $ | 2.52 | $ | 2.79 | ||||||||
| Diluted |
$ | 1.80 | $ | 1.42 | $ | 2.52 | $ | 2.79 | ||||||||
| Weighted-Average Shares Outstanding |
||||||||||||||||
| Basic |
707 | 706 | 707 | 706 | ||||||||||||
| Diluted |
707 | 706 | 707 | 706 | ||||||||||||
| SEGMENT INCOME (LOSS) BY BUSINESS SEGMENT |
||||||||||||||||
| Regulated Utilities(a)(b) |
$ | 920 | $ | 923 | $ | 2,346 | $ | 1,932 | ||||||||
| International Energy |
80 | 116 | 356 | 300 | ||||||||||||
| Commercial Power(c) |
(17 | ) | (28 | ) | (70 | ) | (54 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total Reportable Segment Income |
983 | 1,011 | 2,632 | 2,178 | ||||||||||||
| Other Net Expense(d)(e) |
(92 | ) | (64 | ) | (269 | ) | (278 | ) | ||||||||
| Intercompany Eliminations |
(3 | ) | (5 | ) | (7 | ) | (10 | ) | ||||||||
| Income (Loss) from Discontinued Operations, net of tax(f)(g) |
386 | 62 | (570 | ) | 87 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net Income Attributable to Duke Energy Corporation |
$ | 1,274 | $ | 1,004 | $ | 1,786 | $ | 1,977 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| CAPITALIZATION |
||||||||||||||||
| Total Common Equity |
50 | % | 50 | % | ||||||||||||
| Total Debt |
50 | % | 50 | % | ||||||||||||
| Total Debt |
$ | 41,645 | $ | 41,636 | ||||||||||||
| Book Value Per Share |
$ | 58.61 | $ | 58.41 | ||||||||||||
| Actual Shares Outstanding |
707 | 706 | ||||||||||||||
| CAPITAL AND INVESTMENT EXPENDITURES |
||||||||||||||||
| Regulated Utilities |
$ | 1,182 | $ | 1,030 | $ | 3,357 | $ | 3,573 | ||||||||
| International Energy |
15 | 18 | 40 | 44 | ||||||||||||
| Commercial Power |
156 | 43 | 324 | 110 | ||||||||||||
| Other |
29 | 52 | 115 | 180 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total Capital and Investment Expenditures |
$ | 1,382 | $ | 1,143 | $ | 3,836 | $ | 3,907 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| (a) | Includes an impairment charge of $180 million for the nine months ended September 30, 2013 related to the Crystal River Unit 3 Nuclear Station (net of tax of $115 million). |
| (b) | Includes impairment charges of $57 million for the nine months ended September 30, 2013 related to nuclear development costs (net of tax of $30 million). |
| (c) | Includes an impairment charge of $59 million for the nine months ended September 30, 2014, related to OVEC, its carrying value was reduced to zero (net of tax of $35 million). |
| (d) | Includes costs to achieve Progress merger of $35 million for the three months ended September 30, 2014 (net of tax of $21 million), and $107 million for the nine months ended September 30, 2014 (net of tax of $65 million). |
| (e) | Includes costs to achieve Progress merger of $54 million for the three months ended September 30, 2013 (net of tax of $34 million), and $139 million for the nine months ended September 30, 2013 (net of tax of $86 million). |
| (f) | Includes an adjustment to impairment charge related to the planned sale of the Midwest Generation assets of $300 million for the three months ended September 30, 2014 (net of tax of $177 million) and an impairment charge related to the planned sale of the Midwest Generation assets of $508 million for the nine months ended September 30, 2013 (net of tax of $302 million). |
| (g) | Includes mark-to-market gains on economic hedges of $27 million for the three months ended September 30, 2014 (net of tax of $16 million), and mark-to-market losses on economic hedges of $125 million for the nine months ended September 30, 2014 (net of tax of $70 million). |
13
September 2014
QUARTERLY HIGHLIGHTS
(Unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| (In millions, except where noted) |
2014 | 2013 | 2014 | 2013 | ||||||||||||
| REGULATED UTILITIES |
||||||||||||||||
| Operating Revenues |
$ | 5,986 | $ | 5,786 | $ | 17,074 | $ | 15,766 | ||||||||
| Operating Expenses(a)(b) |
4,361 | 4,131 | 12,807 | 12,136 | ||||||||||||
| Gains on Sales of Other Assets, net |
1 | — | 2 | 6 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Operating Income |
1,626 | 1,655 | 4,269 | 3,636 | ||||||||||||
| Other Income and Expenses |
75 | 57 | 206 | 166 | ||||||||||||
| Interest Expense |
271 | 235 | 816 | 713 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income Before Income Taxes |
1,430 | 1,477 | 3,659 | 3,089 | ||||||||||||
| Income Tax Expense(c)(d) |
510 | 554 | 1,313 | 1,157 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Segment Income |
$ | 920 | $ | 923 | $ | 2,346 | $ | 1,932 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Depreciation and Amortization |
$ | 710 | $ | 586 | $ | 2,075 | $ | 1,678 | ||||||||
| Duke Energy Carolinas GWh sales |
22,821 | 22,935 | 67,350 | 65,383 | ||||||||||||
| Duke Energy Progress GWh sales |
16,540 | 17,005 | 47,394 | 45,761 | ||||||||||||
| Duke Energy Florida GWh sales |
11,550 | 11,263 | 30,051 | 29,132 | ||||||||||||
| Duke Energy Ohio GWh sales |
6,465 | 6,589 | 18,768 | 18,567 | ||||||||||||
| Duke Energy Indiana GWh sales |
8,224 | 8,747 | 25,553 | 25,189 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total GWh sales |
65,600 | 66,539 | 189,116 | 184,032 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net Proportional MW Capacity in Operation |
49,471 | 49,425 | ||||||||||||||
| INTERNATIONAL ENERGY |
||||||||||||||||
| Operating Revenues |
$ | 366 | $ | 370 | $ | 1,111 | $ | 1,168 | ||||||||
| Operating Expenses |
275 | 232 | 760 | 765 | ||||||||||||
| Gains on Sales of Other Assets, net |
2 | — | 7 | — | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Operating Income |
93 | 138 | 358 | 403 | ||||||||||||
| Other Income and Expenses |
43 | 48 | 152 | 95 | ||||||||||||
| Interest Expense |
25 | 22 | 71 | 60 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income Before Income Taxes |
111 | 164 | 439 | 438 | ||||||||||||
| Income Tax Expense |
29 | 44 | 74 | 128 | ||||||||||||
| Less: Income Attributable to Noncontrolling Interests |
2 | 4 | 9 | 10 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Segment Income |
$ | 80 | $ | 116 | $ | 356 | $ | 300 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Depreciation and Amortization |
$ | 23 | $ | 25 | $ | 74 | $ | 75 | ||||||||
| Sales, GWh |
4,292 | 5,062 | 13,814 | 14,744 | ||||||||||||
| Proportional MW Capacity in Operation |
4,358 | 4,600 | ||||||||||||||
| COMMERCIAL POWER |
||||||||||||||||
| Operating Revenues |
$ | 50 | $ | 58 | $ | 195 | $ | 189 | ||||||||
| Operating Expenses(e) |
87 | 104 | 355 | 308 | ||||||||||||
| Gains on Sales of Other Assets, net |
— | — | — | 1 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Operating Loss |
(37 | ) | (46 | ) | (160 | ) | (118 | ) | ||||||||
| Other Income and Expenses |
5 | (2 | ) | 15 | 9 | |||||||||||
| Interest Expense |
14 | 15 | 41 | 45 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Loss Before Income Taxes |
(46 | ) | (63 | ) | (186 | ) | (154 | ) | ||||||||
| Income Tax Benefit(f) |
(29 | ) | (35 | ) | (116 | ) | (100 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Segment Loss |
$ | (17 | ) | $ | (28 | ) | $ | (70 | ) | $ | (54 | ) | ||||
|
|
|
|
|
|
|
|
|
|||||||||
| Depreciation and Amortization |
$ | 24 | $ | 28 | $ | 70 | $ | 83 | ||||||||
| Actual Coal-fired Plant Production, GWh |
192 | 516 | 867 | 1,266 | ||||||||||||
| Actual Renewable Plant Production, GWh |
1,054 | 941 | 4,112 | 3,761 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Actual Plant Production, GWh |
1,246 | 1,457 | 4,979 | 5,027 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net Proportional MW Capacity in Operation |
1,698 | 2,060 | ||||||||||||||
| OTHER |
||||||||||||||||
| Operating Revenues |
$ | 25 | $ | 47 | $ | 79 | $ | 113 | ||||||||
| Operating Expenses(g)(h) |
84 | 128 | 269 | 360 | ||||||||||||
| Gains (Losses) on Sales of Other Assets, net |
1 | (1 | ) | 2 | (4 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Operating Loss |
(58 | ) | (82 | ) | (188 | ) | (251 | ) | ||||||||
| Other Income and Expenses |
18 | (14 | ) | 33 | 4 | |||||||||||
| Interest Expense |
101 | 108 | 302 | 305 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Loss Before Income Taxes |
(141 | ) | (204 | ) | (457 | ) | (552 | ) | ||||||||
| Income Tax Benefit(i)(j) |
(50 | ) | (140 | ) | (190 | ) | (276 | ) | ||||||||
| Less: Income Attributable to Noncontrolling Interests |
1 | — | 2 | 2 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Segment Net Expense |
$ | (92 | ) | $ | (64 | ) | $ | (269 | ) | $ | (278 | ) | ||||
|
|
|
|
|
|
|
|
|
|||||||||
| Depreciation and Amortization |
$ | 31 | $ | 33 | $ | 86 | $ | 104 | ||||||||
| (a) | Includes a pre-tax impairment charge of $295 million for the nine months ended September 30, 2013, related to the Crystal River Unit 3 Nuclear Station. |
| (b) | Includes pre-tax impairment charges of $87 million for the nine months ended September 30, 2013, related to nuclear development costs. |
| (c) | Includes a tax benefit of $115 million for the nine months ended September 30, 2013, on the impairment related to the Crystal River Unit 3 Nuclear Station. |
| (d) | Includes a tax benefit of $30 million for the nine months ended September 30, 2013, on the impairment related to nuclear development costs. |
| (e) | Includes a pre-tax impairment charge of $94 for the nine months ended September 30, 2014, related to OVEC, its carrying value was reduced to zero. |
| (f) | Includes a tax benefit of $35 million for the nine months ended September 30, 2014, on the impairment related to OVEC, its carrying value was reduced to zero. |
| (g) | Includes costs to achieve Progress merger of $51 million recorded in Operating Expense for the three months ended Septmber 30, 2014, and $165 million recorded in Operating Expense for the nine months ended September 30, 2014. |
| (h) | Includes costs to achieve Progress merger of $113 million recorded in Operating Expense for the three months ended September 30, 2013, and $275 million recorded in Operating Expense for the nine months ended September 30, 2013. |
| (i) | Includes tax benefit related to costs to achieve Progress merger of $21 million for the three months ended September 30, 2014, and $65 million for the nine months ended September 30, 2014. |
| (j) | Includes tax benefit related to costs to achieve Progress merger of $34 million for the three months ended September 30, 2013, and $86 million for the nine months ended September 30, 2013. |
14
DUKE ENERGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In millions, except per-share amounts)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||
| Operating Revenues |
||||||||||||||||
| Regulated electric |
$ | 5,861 | $ | 5,685 | $ | 16,549 | $ | 15,355 | ||||||||
| Nonregulated electric, natural gas, and other |
449 | 449 | 1,403 | 1,415 | ||||||||||||
| Regulated natural gas |
85 | 83 | 414 | 362 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total operating revenues |
6,395 | 6,217 | 18,366 | 17,132 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Operating Expenses |
||||||||||||||||
| Fuel used in electric generation and purchased power - regulated |
2,132 | 2,013 | 5,940 | 5,394 | ||||||||||||
| Fuel used in electric generation and purchased power - nonregulated |
148 | 130 | 410 | 435 | ||||||||||||
| Cost of natural gas and other |
27 | 18 | 181 | 132 | ||||||||||||
| Operation, maintenance and other |
1,409 | 1,402 | 4,254 | 4,211 | ||||||||||||
| Depreciation and amortization |
788 | 672 | 2,305 | 1,940 | ||||||||||||
| Property and other taxes |
275 | 319 | 936 | 972 | ||||||||||||
| Impairment charges |
1 | 2 | 81 | 388 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total operating expenses |
4,780 | 4,556 | 14,107 | 13,472 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Gains (Losses) on Sales of Other Assets and Other, net |
4 | (1 | ) | 11 | 3 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Operating Income |
1,619 | 1,660 | 4,270 | 3,663 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Other Income and Expenses |
||||||||||||||||
| Equity in earnings of unconsolidated affiliates |
28 | 32 | 97 | 91 | ||||||||||||
| Other income and expenses, net |
109 | 55 | 293 | 182 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total other income and expenses |
137 | 87 | 390 | 273 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Interest Expense |
405 | 378 | 1,212 | 1,125 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income From Continuing Operations Before Income Taxes |
1,351 | 1,369 | 3,448 | 2,811 | ||||||||||||
| Income Tax Expense from Continuing Operations |
460 | 423 | 1,081 | 909 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income From Continuing Operations |
891 | 946 | 2,367 | 1,902 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income (Loss) From Discontinued Operations, net of tax |
378 | 62 | (578 | ) | 82 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net Income |
1,269 | 1,008 | 1,789 | 1,984 | ||||||||||||
| Less: Net (Loss) Income Attributable to Noncontrolling Interests |
(5 | ) | 4 | 3 | 7 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net Income Attributable to Duke Energy Corporation |
$ | 1,274 | $ | 1,004 | $ | 1,786 | $ | 1,977 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Earnings Per Share - Basic and Diluted |
||||||||||||||||
| Income from continuing operations attributable to Duke Energy Corporation common shareholders |
||||||||||||||||
| Basic |
$ | 1.25 | $ | 1.33 | $ | 3.33 | $ | 2.67 | ||||||||
| Diluted |
$ | 1.25 | $ | 1.33 | $ | 3.33 | $ | 2.67 | ||||||||
| Income (Loss) from discontinued operations attributable to Duke Energy Corporation common shareholders |
||||||||||||||||
| Basic |
$ | 0.55 | $ | 0.09 | $ | (0.81 | ) | $ | 0.12 | |||||||
| Diluted |
$ | 0.55 | $ | 0.09 | $ | (0.81 | ) | $ | 0.12 | |||||||
| Net Income attributable to Duke Energy Corporation common shareholders |
||||||||||||||||
| Basic |
$ | 1.80 | $ | 1.42 | $ | 2.52 | $ | 2.79 | ||||||||
| Diluted |
$ | 1.80 | $ | 1.42 | $ | 2.52 | $ | 2.79 | ||||||||
| Weighted-average shares outstanding |
||||||||||||||||
| Basic |
707 | 706 | 707 | 706 | ||||||||||||
| Diluted |
707 | 706 | 707 | 706 | ||||||||||||
15
DUKE ENERGY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions)
| September 30, | December 31, | |||||||
| 2014 | 2013 | |||||||
| ASSETS |
||||||||
| Current Assets |
||||||||
| Cash and cash equivalents |
$ | 1,931 | $ | 1,501 | ||||
| Short-term investments |
— | 44 | ||||||
| Receivables (net of allowance for doubtful accounts of $16 at September 30, 2014 and $30 at December 31, 2013) |
854 | 1,286 | ||||||
| Restricted receivables of variable interest entities (net of allowance for doubtful accounts of $52 at September 30, 2014 and $43 at December 31, 2013) |
2,069 | 1,719 | ||||||
| Inventory |
3,200 | 3,250 | ||||||
| Assets held for sale |
335 | — | ||||||
| Regulatory assets |
1,232 | 895 | ||||||
| Other |
1,954 | 1,821 | ||||||
|
|
|
|
|
|||||
| Total current assets |
11,575 | 10,516 | ||||||
|
|
|
|
|
|||||
| Investments and Other Assets |
||||||||
| Investments in equity method unconsolidated affiliates |
350 | 390 | ||||||
| Nuclear decommissioning trust funds |
5,374 | 5,132 | ||||||
| Goodwill |
16,331 | 16,340 | ||||||
| Assets held for sale |
2,718 | 107 | ||||||
| Other |
3,287 | 3,432 | ||||||
|
|
|
|
|
|||||
| Total investments and other assets |
28,060 | 25,401 | ||||||
|
|
|
|
|
|||||
| Property, Plant and Equipment |
||||||||
| Cost |
104,140 | 103,115 | ||||||
| Accumulated depreciation and amortization |
(34,545 | ) | (33,625 | ) | ||||
|
|
|
|
|
|||||
| Net property, plant and equipment |
69,595 | 69,490 | ||||||
|
|
|
|
|
|||||
| Regulatory Assets and Deferred Debits |
||||||||
| Regulatory assets |
10,252 | 9,191 | ||||||
| Other |
174 | 181 | ||||||
|
|
|
|
|
|||||
| Total regulatory assets and deferred debits |
10,426 | 9,372 | ||||||
|
|
|
|
|
|||||
| Total Assets |
$ | 119,656 | $ | 114,779 | ||||
|
|
|
|
|
|||||
| LIABILITIES AND EQUITY |
||||||||
| Current Liabilities |
||||||||
| Accounts payable |
$ | 1,801 | $ | 2,391 | ||||
| Notes payable and commercial paper |
1,787 | 839 | ||||||
| Taxes accrued |
704 | 551 | ||||||
| Interest accrued |
476 | 440 | ||||||
| Current maturities of long-term debt |
1,156 | 2,104 | ||||||
| Liabilities associated with assets held for sale |
284 | 7 | ||||||
| Regulatory liabilities |
175 | 316 | ||||||
| Other |
1,868 | 1,996 | ||||||
|
|
|
|
|
|||||
| Total current liabilities |
8,251 | 8,644 | ||||||
|
|
|
|
|
|||||
| Long-term Debt |
38,702 | 38,152 | ||||||
|
|
|
|
|
|||||
| Deferred Credits and Other Liabilities |
||||||||
| Deferred income taxes |
12,989 | 12,097 | ||||||
| Investment tax credits |
431 | 442 | ||||||
| Accrued pension and other post-retirement benefit costs |
1,231 | 1,322 | ||||||
| Liabilities associated with assets held for sale |
57 | 66 | ||||||
| Asset retirement obligations |
8,499 | 4,950 | ||||||
| Regulatory liabilities |
6,220 | 5,949 | ||||||
| Other |
1,823 | 1,749 | ||||||
|
|
|
|
|
|||||
| Total deferred credits and other liabilities |
31,250 | 26,575 | ||||||
|
|
|
|
|
|||||
| Commitments and Contingencies |
||||||||
| Equity |
||||||||
| Common stock, $0.001 par value, 2 billion shares authorized; 707 million and 706 million shares outstanding at September 30, 2014 and December 31, 2013, respectively |
1 | 1 | ||||||
| Additional paid-in capital |
39,388 | 39,365 | ||||||
| Retained earnings |
2,479 | 2,363 | ||||||
| Accumulated other comprehensive loss |
(456 | ) | (399 | ) | ||||
|
|
|
|
|
|||||
| Total Duke Energy Corporation stockholders’ equity |
41,412 | 41,330 | ||||||
| Noncontrolling interests |
41 | 78 | ||||||
|
|
|
|
|
|||||
| Total equity |
41,453 | 41,408 | ||||||
|
|
|
|
|
|||||
| Total Liabilities and Equity |
$ | 119,656 | $ | 114,779 | ||||
|
|
|
|
|
|||||
16
DUKE ENERGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In millions)
| Nine Months Ended September 30, |
||||||||
| 2014 | 2013 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES |
||||||||
| Net Income |
$ | 1,789 | $ | 1,984 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
3,378 | 3,006 | ||||||
|
|
|
|
|
|||||
| Net cash provided by operating activities |
5,167 | 4,990 | ||||||
|
|
|
|
|
|||||
| CASH FLOWS FROM INVESTING ACTIVITIES |
||||||||
| Net cash used in investing activities |
(3,734 | ) | (3,566 | ) | ||||
|
|
|
|
|
|||||
| CASH FLOWS FROM FINANCING ACTIVITIES |
||||||||
| Net cash used in financing activities |
(1,003 | ) | (682 | ) | ||||
|
|
|
|
|
|||||
| Net increase in cash and cash equivalents |
430 | 742 | ||||||
| Cash and cash equivalents at beginning of period |
1,501 | 1,424 | ||||||
|
|
|
|
|
|||||
| Cash and cash equivalents at end of period |
$ | 1,931 | $ | 2,166 | ||||
|
|
|
|
|
|||||
17
Regulated Utilities
Quarterly Highlights
Supplemental Regulated Utilities Electric Information
September 2014
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||
| September 30 | September 30 | |||||||||||||||||||||||||||||||
| % Inc. (Dec.) | % Inc. (Dec.) | |||||||||||||||||||||||||||||||
| % | Weather | % | Weather | |||||||||||||||||||||||||||||
| 2014 | 2013 | Inc. (Dec.) | Normal (2) | 2014 | 2013 | Inc. (Dec.) | Normal (2) | |||||||||||||||||||||||||
| GWH Sales (1) |
||||||||||||||||||||||||||||||||
| Residential |
22,960 | 22,406 | 2.5 | % | (1.2 | %) | 65,064 | 61,997 | 4.9 | % | 0.6 | % | ||||||||||||||||||||
| General Service |
21,494 | 21,187 | 1.4 | % | (0.4 | %) | 58,366 | 57,163 | 2.1 | % | 1.1 | % | ||||||||||||||||||||
| Industrial |
13,837 | 13,719 | 0.9 | % | 0.3 | % | 38,973 | 38,466 | 1.3 | % | 0.5 | % | ||||||||||||||||||||
| Other Energy Sales |
152 | 150 | 1.3 | % | 455 | 451 | 0.9 | % | ||||||||||||||||||||||||
| Unbilled Sales |
(1,500 | ) | (650 | ) | (130.8 | %) | N/A | (920 | ) | (308 | ) | (198.7 | %) | N/A | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total Retail Sales |
56,943 | 56,812 | 0.2 | % | (0.6 | %) | 161,938 | 157,769 | 2.6 | % | 0.7 | % | ||||||||||||||||||||
| Special Sales |
8,657 | 9,727 | (11.0 | %) | 27,178 | 26,263 | 3.5 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Total Consolidated Electric Sales - Regulated Utilities |
65,600 | 66,539 | (1.4 | %) | 189,116 | 184,032 | 2.8 | % | ||||||||||||||||||||||||
| Average Number of Customers (Electric) |
||||||||||||||||||||||||||||||||
| Residential |
6,281,374 | 6,212,393 | 1.1 | % | 6,271,001 | 6,206,254 | 1.0 | % | ||||||||||||||||||||||||
| General Service |
944,484 | 938,214 | 0.7 | % | 941,839 | 935,372 | 0.7 | % | ||||||||||||||||||||||||
| Industrial |
18,260 | 18,533 | (1.5 | %) | 18,315 | 18,619 | (1.6 | %) | ||||||||||||||||||||||||
| Other Energy Sales |
22,810 | 22,142 | 3.0 | % | 22,579 | 22,148 | 1.9 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Total Regular Sales |
7,266,928 | 7,191,282 | 1.1 | % | 7,253,734 | 7,182,393 | 1.0 | % | ||||||||||||||||||||||||
| Special Sales |
62 | 61 | 1.6 | % | 62 | 62 | 0.0 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Total Average Number of Customers - |
7,266,990 | 7,191,343 | 1.1 | % | 7,253,796 | 7,182,455 | 1.0 | % | ||||||||||||||||||||||||
| Heating and Cooling Degree Days (3) |
||||||||||||||||||||||||||||||||
| Carolinas - Actual |
||||||||||||||||||||||||||||||||
| Heating Degree Days |
10 | 7 | 42.9 | % | 2,135 | 2,014 | 6.0 | % | ||||||||||||||||||||||||
| Cooling Degree Days |
942 | 889 | 6.1 | % | 1,535 | 1,355 | 13.3 | % | ||||||||||||||||||||||||
| Variance from Normal |
||||||||||||||||||||||||||||||||
| Heating Degree Days |
25.0 | % | 0.0 | % | n/a | 15.4 | % | 6.7 | % | n/a | ||||||||||||||||||||||
| Cooling Degree Days |
(11.2 | %) | (16.7 | %) | n/a | (4.7 | %) | (16.2 | %) | n/a | ||||||||||||||||||||||
| Midwest - Actual |
||||||||||||||||||||||||||||||||
| Heating Degree Days |
73 | 37 | 97.3 | % | 3,829 | 3,333 | 14.9 | % | ||||||||||||||||||||||||
| Cooling Degree Days |
568 | 714 | (20.4 | %) | 918 | 1,052 | (12.7 | %) | ||||||||||||||||||||||||
| Variance from Normal |
||||||||||||||||||||||||||||||||
| Heating Degree Days |
46.0 | % | (15.9 | %) | n/a | 22.7 | % | 5.0 | % | n/a | ||||||||||||||||||||||
| Cooling Degree Days |
(29.4 | %) | (11.3 | %) | n/a | (20.9 | %) | (8.4 | %) | n/a | ||||||||||||||||||||||
| Florida - Actual |
||||||||||||||||||||||||||||||||
| Heating Degree Days |
— | — | 0.0 | % | 418 | 338 | 23.7 | % | ||||||||||||||||||||||||
| Cooling Degree Days |
1,497 | 1,447 | 3.5 | % | 2,702 | 2,667 | 1.3 | % | ||||||||||||||||||||||||
| Variance from Normal |
||||||||||||||||||||||||||||||||
| Heating Degree Days |
0.0 | % | 0.0 | % | n/a | 0.5 | % | (21.7 | %) | n/a | ||||||||||||||||||||||
| Cooling Degree Days |
(0.7 | %) | (3.8 | %) | n/a | (1.3 | %) | (2.3 | %) | n/a | ||||||||||||||||||||||
| (1) | Except as indicated in footnote (2), represents non-weather normalized billed sales, with energy delivered but not yet billed (i.e. unbilled sales) reflected as a single amount and not allocated to the respective retail classes. |
| (2) | Represents weather normal total retail calendar sales (i.e. billed and unbilled sales). |
| (3) | Certain 2013 data has been recast to conform to the 2014 methodology which provides for consistency across all Regulated Utilities’ jurisdictions. |
18
Duke Energy Carolinas
Quarterly Highlights
Supplemental Regulated Utilities Electric Information
September 2014
| Three Months Ended September 30 |
Nine Months Ended September 30 |
|||||||||||||||||||||||||||||||
| % Inc. (Dec.) | % Inc. (Dec.) | |||||||||||||||||||||||||||||||
| % | Weather | % | Weather | |||||||||||||||||||||||||||||
| 2014 | 2013 | Inc. (Dec.) | Normal (2) | 2014 | 2013 | Inc. (Dec.) | Normal (2) | |||||||||||||||||||||||||
| GWH Sales (1) |
||||||||||||||||||||||||||||||||
| Residential |
7,501 | 7,351 | 2.0 | % | 21,937 | 20,874 | 5.1 | % | ||||||||||||||||||||||||
| General Service |
7,951 | 7,812 | 1.8 | % | 21,685 | 21,115 | 2.7 | % | ||||||||||||||||||||||||
| Industrial |
5,849 | 5,726 | 2.1 | % | 16,230 | 15,866 | 2.3 | % | ||||||||||||||||||||||||
| Other Energy Sales |
77 | 73 | 5.5 | % | 226 | 219 | 3.2 | % | ||||||||||||||||||||||||
| Unbilled Sales |
(677 | ) | (538 | ) | (25.8 | %) | (492 | ) | (512 | ) | 3.9 | % | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total Regular Electric Sales |
20,701 | 20,424 | 1.4 | % | (0.4 | %) | 59,586 | 57,562 | 3.5 | % | 0.8 | % | ||||||||||||||||||||
| Special Sales |
2,120 | 2,511 | (15.6 | %) | 7,764 | 7,821 | (0.7 | %) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Total Consolidated Electric Sales - Duke Energy Carolinas |
22,821 | 22,935 | (0.5 | %) | 67,350 | 65,383 | 3.0 | % | ||||||||||||||||||||||||
| Average Number of Customers |
||||||||||||||||||||||||||||||||
| Residential |
2,091,669 | 2,070,230 | 1.0 | % | 2,085,703 | 2,065,651 | 1.0 | % | ||||||||||||||||||||||||
| General Service |
342,340 | 339,859 | 0.7 | % | 341,246 | 338,717 | 0.7 | % | ||||||||||||||||||||||||
| Industrial |
6,515 | 6,573 | (0.9 | %) | 6,524 | 6,618 | (1.4 | %) | ||||||||||||||||||||||||
| Other Energy Sales |
14,862 | 14,369 | 3.4 | % | 14,617 | 14,377 | 1.7 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Total Regular Sales |
2,455,386 | 2,431,031 | 1.0 | % | 2,448,090 | 2,425,363 | 0.9 | % | ||||||||||||||||||||||||
| Special Sales |
26 | 23 | 13.0 | % | 25 | 24 | 4.2 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Total Average Number of Customers - Duke Energy Carolinas |
2,455,412 | 2,431,054 | 1.0 | % | 2,448,115 | 2,425,387 | 0.9 | % | ||||||||||||||||||||||||
| Heating and Cooling Degree Days (3) |
||||||||||||||||||||||||||||||||
| Actual |
||||||||||||||||||||||||||||||||
| Heating Degree Days |
12 | 9 | 33.3 | % | 2,235 | 2,115 | 5.7 | % | ||||||||||||||||||||||||
| Cooling Degree Days |
884 | 831 | 6.5 | % | 1,441 | 1,268 | 13.6 | % | ||||||||||||||||||||||||
| Variance from Normal |
||||||||||||||||||||||||||||||||
| Heating Degree Days |
20.0 | % | (10.0 | %) | n/a | 16.0 | % | 7.5 | % | n/a | ||||||||||||||||||||||
| Cooling Degree Days |
(13.3 | %) | (19.2 | %) | n/a | (6.7 | %) | (18.2 | %) | n/a | ||||||||||||||||||||||
| (1) | Except as indicated in footnote (2), represents non-weather normalized billed sales, with energy delivered but not yet billed (i.e. unbilled sales) reflected as a single amount and not allocated to the respective retail classes. |
| (2) | Represents weather normal total retail calendar sales (i.e. billed and unbilled sales). |
| (3) | Certain 2013 data has been recast to conform to the 2014 methodology which provides for consistency across all Regulated Utilities’ jurisdictions. |
19
Duke Energy Progress
Quarterly Highlights
Supplemental Regulated Utilities Electric Information
September 2014
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||
| September 30 | September 30 | |||||||||||||||||||||||||||||||
| % Inc. (Dec.) | % Inc. (Dec.) | |||||||||||||||||||||||||||||||
| % | Weather | % | Weather | |||||||||||||||||||||||||||||
| 2014 | 2013 | Inc. (Dec.) | Normal (2) | 2014 | 2013 | Inc. (Dec.) | Normal (2) | |||||||||||||||||||||||||
| GWH Sales (1) |
||||||||||||||||||||||||||||||||
| Residential |
4,736 | 4,604 | 2.9 | % | 14,275 | 13,375 | 6.7 | % | ||||||||||||||||||||||||
| General Service |
4,357 | 4,281 | 1.8 | % | 11,767 | 11,438 | 2.9 | % | ||||||||||||||||||||||||
| Industrial |
2,819 | 2,978 | (5.3 | %) | 7,816 | 8,086 | (3.3 | %) | ||||||||||||||||||||||||
| Other Energy Sales |
29 | 30 | (3.3 | %) | 88 | 90 | (2.2 | %) | ||||||||||||||||||||||||
| Unbilled Sales |
(291 | ) | (92 | ) | (216.3 | %) | (318 | ) | (105 | ) | (202.9 | %) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total Regular Electric Sales |
11,650 | 11,801 | (1.3 | %) | (3.7 | %) | 33,628 | 32,884 | 2.3 | % | (1.1 | %) | ||||||||||||||||||||
| Special Sales |
4,890 | 5,204 | (6.0 | %) | 13,766 | 12,877 | 6.9 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Total Consolidated Electric Sales - Duke Energy Progress |
16,540 | 17,005 | (2.7 | %) | 47,394 | 45,761 | 3.6 | % | ||||||||||||||||||||||||
| Average Number of Customers |
||||||||||||||||||||||||||||||||
| Residential |
1,258,769 | 1,243,523 | 1.2 | % | 1,254,632 | 1,240,502 | 1.1 | % | ||||||||||||||||||||||||
| General Service |
223,986 | 222,265 | 0.8 | % | 222,980 | 221,355 | 0.7 | % | ||||||||||||||||||||||||
| Industrial |
4,266 | 4,341 | (1.7 | %) | 4,278 | 4,370 | (2.1 | %) | ||||||||||||||||||||||||
| Other Energy Sales |
1,705 | 1,800 | (5.3 | %) | 1,729 | 1,808 | (4.4 | %) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Total Regular Sales |
1,488,726 | 1,471,929 | 1.1 | % | 1,483,619 | 1,468,035 | 1.1 | % | ||||||||||||||||||||||||
| Special Sales |
15 | 15 | 0.0 | % | 15 | 15 | 0.0 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Total Average Number of Customers - Duke Energy Progress |
1,488,741 | 1,471,944 | 1.1 | % | 1,483,634 | 1,468,050 | 1.1 | % | ||||||||||||||||||||||||
| Heating and Cooling Degree Days (3) |
||||||||||||||||||||||||||||||||
| Actual |
||||||||||||||||||||||||||||||||
| Heating Degree Days |
7 | 4 | 75.0 | % | 2,034 | 1,913 | 6.3 | % | ||||||||||||||||||||||||
| Cooling Degree Days |
1,000 | 946 | 5.7 | % | 1,629 | 1,442 | 13.0 | % | ||||||||||||||||||||||||
| Variance from Normal |
||||||||||||||||||||||||||||||||
| Heating Degree Days |
16.7 | % | 0.0 | % | n/a | 14.7 | % | 5.9 | % | n/a | ||||||||||||||||||||||
| Cooling Degree Days |
(9.3 | %) | (14.5 | %) | n/a | (2.9 | %) | (14.4 | %) | n/a | ||||||||||||||||||||||
| (1) | Except as indicated in footnote (2), represents non-weather normalized billed sales, with energy delivered but not yet billed (i.e. unbilled sales) reflected as a single amount and not allocated to the respective retail classes. |
| (2) | Represents weather normal total retail calendar sales (i.e. billed and unbilled sales). |
| (3) | Certain 2013 data has been recast to conform to the 2014 methodology which provides for consistency across all Regulated Utilities’ jurisdictions. |
20
Duke Energy Florida
Quarterly Highlights
Supplemental Regulated Utilities Electric Information
September 2014
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||
| September 30 | September 30 | |||||||||||||||||||||||||||||||
| % Inc. (Dec.) | % Inc. (Dec.) | |||||||||||||||||||||||||||||||
| % | Weather | % | Weather | |||||||||||||||||||||||||||||
| 2014 | 2013 | Inc. (Dec.) | Normal (2) | 2014 | 2013 | Inc. (Dec.) | Normal (2) | |||||||||||||||||||||||||
| GWH Sales (1) |
||||||||||||||||||||||||||||||||
| Residential |
6,207 | 5,713 | 8.6 | % | 14,654 | 13,948 | 5.1 | % | ||||||||||||||||||||||||
| General Service |
4,320 | 4,192 | 3.1 | % | 11,270 | 11,110 | 1.4 | % | ||||||||||||||||||||||||
| Industrial |
840 | 827 | 1.6 | % | 2,444 | 2,409 | 1.5 | % | ||||||||||||||||||||||||
| Other Energy Sales |
6 | 6 | 0.0 | % | 18 | 18 | 0.0 | % | ||||||||||||||||||||||||
| Unbilled Sales |
(270 | ) | 70 | (485.7 | %) | 461 | 483 | (4.6 | %) | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total Regular Sales |
11,103 | 10,808 | 2.7 | % | 0.0 | % | 28,847 | 27,968 | 3.1 | % | 1.1 | % | ||||||||||||||||||||
| Special Sales |
447 | 455 | (1.8 | %) | 1,204 | 1,164 | 3.4 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Total Electric Sales - Duke Energy Florida |
11,550 | 11,263 | 2.5 | % | 30,051 | 29,132 | 3.2 | % | ||||||||||||||||||||||||
| Average Number of Customers |
||||||||||||||||||||||||||||||||
| Residential |
1,502,074 | 1,477,918 | 1.6 | % | 1,497,535 | 1,476,026 | 1.5 | % | ||||||||||||||||||||||||
| General Service |
191,274 | 189,580 | 0.9 | % | 190,897 | 188,921 | 1.0 | % | ||||||||||||||||||||||||
| Industrial |
2,259 | 2,331 | (3.1 | %) | 2,280 | 2,350 | (3.0 | %) | ||||||||||||||||||||||||
| Other Energy Sales |
1,547 | 1,561 | (0.9 | %) | 1,553 | 1,565 | (0.8 | %) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Total Regular Sales |
1,697,154 | 1,671,390 | 1.5 | % | 1,692,265 | 1,668,862 | 1.4 | % | ||||||||||||||||||||||||
| Special Sales |
14 | 16 | (12.5 | %) | 15 | 15 | 0.0 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Total Average Number of Customers - Duke Energy Florida |
1,697,168 | 1,671,406 | 1.5 | % | 1,692,280 | 1,668,877 | 1.4 | % | ||||||||||||||||||||||||
| Heating and Cooling Degree Days (3) |
||||||||||||||||||||||||||||||||
| Actual |
||||||||||||||||||||||||||||||||
| Heating Degree Days |
— | — | 0.0 | % | 418 | 338 | 23.7 | % | ||||||||||||||||||||||||
| Cooling Degree Days |
1,497 | 1,447 | 3.5 | % | 2,702 | 2,667 | 1.3 | % | ||||||||||||||||||||||||
| Variance from Normal |
||||||||||||||||||||||||||||||||
| Heating Degree Days |
0.0 | % | 0.0 | % | n/a | 0.5 | % | (21.7 | %) | n/a | ||||||||||||||||||||||
| Cooling Degree Days |
(0.7 | %) | (3.8 | %) | n/a | (1.3 | %) | (2.3 | %) | n/a | ||||||||||||||||||||||
| (1) | Except as indicated in footnote (2), represents non-weather normalized billed sales, with energy delivered but not yet billed (i.e. unbilled sales) reflected as a single amount and not allocated to the respective retail classes. |
| (2) | Represents weather normal total retail calendar sales (i.e. billed and unbilled sales). |
| (3) | Certain 2013 data has been recast to conform to the 2014 methodology which provides for consistency across all Regulated Utilities’ jurisdictions. |
21
Duke Energy Ohio
Quarterly Highlights
Supplemental Regulated Utilities Electric Information
September 2014
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||
| September 30 | September 30 | |||||||||||||||||||||||||||||||
| % Inc. (Dec.) | % Inc. (Dec.) | |||||||||||||||||||||||||||||||
| % | Weather | % | Weather | |||||||||||||||||||||||||||||
| 2014 | 2013 | Inc. (Dec.) | Normal (2) | 2014 | 2013 | Inc. (Dec.) | Normal (2) | |||||||||||||||||||||||||
| GWH Sales (1) |
||||||||||||||||||||||||||||||||
| Residential |
2,332 | 2,426 | (3.9 | %) | 6,924 | 6,761 | 2.4 | % | ||||||||||||||||||||||||
| General Service |
2,602 | 2,601 | 0.0 | % | 7,273 | 7,166 | 1.5 | % | ||||||||||||||||||||||||
| Industrial |
1,571 | 1,497 | 4.9 | % | 4,501 | 4,316 | 4.3 | % | ||||||||||||||||||||||||
| Other Energy Sales |
28 | 28 | 0.0 | % | 84 | 84 | 0.0 | % | ||||||||||||||||||||||||
| Unbilled Sales |
(160 | ) | (66 | ) | (142.4 | %) | (242 | ) | (82 | ) | (195.1 | %) | ||||||||||||||||||||
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|||||||||||||||||
| Total Regular Electric Sales |
6,373 | 6,486 | (1.7 | %) | 2.9 | % | 18,540 | 18,245 | 1.6 | % | 2.5 | % | ||||||||||||||||||||
| Special Sales |
92 | 103 | (10.7 | %) | 228 | 322 | (29.2 | %) | ||||||||||||||||||||||||
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|||||||||||||||||||||
| Total Electric Sales - Duke Energy Ohio |
6,465 | 6,589 | (1.9 | %) | 18,768 | 18,567 | 1.1 | % | ||||||||||||||||||||||||
| Average Number of Customers |
||||||||||||||||||||||||||||||||
| Residential |
739,300 | 735,261 | 0.5 | % | 741,316 | 736,743 | 0.6 | % | ||||||||||||||||||||||||
| General Service |
86,456 | 86,141 | 0.4 | % | 86,402 | 86,143 | 0.3 | % | ||||||||||||||||||||||||
| Industrial |
2,526 | 2,540 | (0.6 | %) | 2,522 | 2,552 | (1.2 | %) | ||||||||||||||||||||||||
| Other Energy |
3,184 | 2,932 | 8.6 | % | 3,175 | 2,931 | 8.3 | % | ||||||||||||||||||||||||
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|||||||||||||||||||||
| Total Regular Sales |
831,466 | 826,874 | 0.6 | % | 833,415 | 828,369 | 0.6 | % | ||||||||||||||||||||||||
| Special Sales |
1 | 1 | 0.0 | % | 1 | 1 | 0.0 | % | ||||||||||||||||||||||||
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| Total Average Number of Electric Customers - Duke Energy Ohio |
831,467 | 826,875 | 0.6 | % | 833,416 | 828,370 | 0.6 | % | ||||||||||||||||||||||||
| Heating and Cooling Degree Days (3) |
||||||||||||||||||||||||||||||||
| Actual |
||||||||||||||||||||||||||||||||
| Heating Degree Days |
58 | 35 | 65.7 | % | 3,528 | 3,161 | 11.6 | % | ||||||||||||||||||||||||
| Cooling Degree Days |
629 | 699 | (10.0 | %) | 1,011 | 1,045 | (3.3 | %) | ||||||||||||||||||||||||
| Variance from Normal |
||||||||||||||||||||||||||||||||
| Heating Degree Days |
26.1 | % | (14.6 | %) | n/a | 16.9 | % | 3.1 | % | n/a | ||||||||||||||||||||||
| Cooling Degree Days |
(22.3 | %) | (13.9 | %) | n/a | (12.8 | %) | (9.1 | %) | n/a | ||||||||||||||||||||||
| (1) | Except as indicated in footnote (2), represents non-weather normalized billed sales, with energy delivered but not yet billed (i.e. unbilled sales) reflected as a single amount and not allocated to the respective retail classes. |
| (2) | Represents weather normal total retail calendar sales (i.e. billed and unbilled sales). |
| (3) | Certain 2013 data has been recast to conform to the 2014 methodology which provides for consistency across all Regulated Utilities’ jurisdictions. |
22
Duke Energy Ohio
Quarterly Highlights
Supplemental Regulated Utilities Gas Information
September 2014
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||
| September 30 | September 30 | |||||||||||||||||||||||||||||||
| % Inc. (Dec.) | % Inc. (Dec.) | |||||||||||||||||||||||||||||||
| % | Weather | % | Weather | |||||||||||||||||||||||||||||
| 2014 | 2013 | Inc. (Dec.) | Normal (2) | 2014 | 2013 | Inc. (Dec.) | Normal (2) | |||||||||||||||||||||||||
| MCF Sales (1) |
||||||||||||||||||||||||||||||||
| Residential |
1,819,907 | 1,860,539 | (2.2 | %) | 31,354,403 | 28,481,036 | 10.1 | % | ||||||||||||||||||||||||
| General Service |
1,711,398 | 1,656,619 | 3.3 | % | 19,335,821 | 17,456,201 | 10.8 | % | ||||||||||||||||||||||||
| Industrial |
1,104,399 | 944,865 | 16.9 | % | 5,425,634 | 4,633,841 | 17.1 | % | ||||||||||||||||||||||||
| Other Energy Sales |
4,197,435 | 4,710,321 | (10.9 | %) | 15,616,728 | 15,598,636 | 0.1 | % | ||||||||||||||||||||||||
| Unbilled Sales |
(125,000 | ) | 187,000 | (166.8 | %) | (5,027,000 | ) | (4,728,000 | ) | (6.3 | %) | |||||||||||||||||||||
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| Total Gas Sales - Duke Energy Ohio |
8,708,139 | 9,359,344 | (7.0 | %) | (5.8 | %) | 66,705,586 | 61,441,714 | 8.6 | % | 1.0 | % | ||||||||||||||||||||
| Average Number of Customers |
||||||||||||||||||||||||||||||||
| Residential |
468,840 | 466,283 | 0.5 | % | 472,600 | 469,384 | 0.7 | % | ||||||||||||||||||||||||
| General Service |
41,505 | 41,604 | (0.2 | %) | 43,379 | 43,301 | 0.2 | % | ||||||||||||||||||||||||
| Industrial |
1,558 | 1,586 | (1.8 | %) | 1,627 | 1,633 | (0.4 | %) | ||||||||||||||||||||||||
| Other Energy |
149 | 163 | (8.6 | %) | 154 | 165 | (6.7 | %) | ||||||||||||||||||||||||
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|||||||||||||||||||||
| Total Average Number of Gas Customers - Duke Energy Ohio |
512,052 | 509,636 | 0.5 | % | 517,760 | 514,483 | 0.6 | % | ||||||||||||||||||||||||
| Heating and Cooling Degree Days (3) |
||||||||||||||||||||||||||||||||
| Actual |
||||||||||||||||||||||||||||||||
| Heating Degree Days |
58 | 35 | 65.7 | % | 3,528 | 3,161 | 11.6 | % | ||||||||||||||||||||||||
| Cooling Degree Days |
629 | 699 | (10.0 | %) | 1,011 | 1,045 | (3.3 | %) | ||||||||||||||||||||||||
| Variance from Normal |
||||||||||||||||||||||||||||||||
| Heating Degree Days |
26.1 | % | (14.6 | %) | n/a | 16.9 | % | 3.1 | % | n/a | ||||||||||||||||||||||
| Cooling Degree Days |
(22.3 | %) | (13.9 | %) | n/a | (12.8 | %) | (9.1 | %) | n/a | ||||||||||||||||||||||
| (1) | Except as indicated in footnote (2), represents non-weather normalized billed sales, with energy delivered but not yet billed (i.e. unbilled sales) reflected as a single amount and not allocated to the respective retail classes. |
| (2) | Represents weather normal total retail calendar sales (i.e. billed and unbilled sales). |
| (3) | Certain 2013 data has been recast to conform to the 2014 methodology which provides for consistency across all Regulated Utilities’ jurisdictions. |
23
Duke Energy Indiana
Quarterly Highlights
Supplemental Regulated Utilities Electric Information
September 2014
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||
| September 30 | September 30 | |||||||||||||||||||||||||||||||
| % Inc. (Dec.) | % Inc. (Dec.) | |||||||||||||||||||||||||||||||
| % | Weather | % | Weather | |||||||||||||||||||||||||||||
| 2014 | 2013 | Inc. (Dec.) | Normal (2) | 2014 | 2013 | Inc. (Dec.) | Normal (2) | |||||||||||||||||||||||||
| GWH Sales (1) |
||||||||||||||||||||||||||||||||
| Residential |
2,184 | 2,312 | (5.5 | %) | 7,274 | 7,039 | 3.3 | % | ||||||||||||||||||||||||
| General Service |
2,264 | 2,301 | (1.6 | %) | 6,371 | 6,334 | 0.6 | % | ||||||||||||||||||||||||
| Industrial |
2,758 | 2,692 | 2.5 | % | 7,982 | 7,789 | 2.5 | % | ||||||||||||||||||||||||
| Other Energy Sales |
12 | 13 | (7.7 | %) | 39 | 40 | (2.5 | %) | ||||||||||||||||||||||||
| Unbilled Sales |
(102 | ) | (25 | ) | (308.0 | %) | (329 | ) | (92 | ) | (257.6 | %) | ||||||||||||||||||||
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| Total Regular Electric Sales |
7,116 | 7,293 | (2.4 | %) | 0.0 | % | 21,337 | 21,110 | 1.1 | % | 1.3 | % | ||||||||||||||||||||
| Special Sales |
1,108 | 1,454 | (23.8 | %) | 4,216 | 4,079 | 3.4 | % | ||||||||||||||||||||||||
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| Total Electric Sales - Duke Energy Indiana |
8,224 | 8,747 | (6.0 | %) | 25,553 | 25,189 | 1.4 | % | ||||||||||||||||||||||||
| Average Number of Customers |
||||||||||||||||||||||||||||||||
| Residential |
689,562 | 685,461 | 0.6 | % | 691,815 | 687,332 | 0.7 | % | ||||||||||||||||||||||||
| General Service |
100,428 | 100,369 | 0.1 | % | 100,314 | 100,236 | 0.1 | % | ||||||||||||||||||||||||
| Industrial |
2,694 | 2,748 | (2.0 | %) | 2,711 | 2,729 | (0.7 | %) | ||||||||||||||||||||||||
| Other Energy |
1,512 | 1,480 | 2.2 | % | 1,505 | 1,467 | 2.6 | % | ||||||||||||||||||||||||
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| Total Regular Sales |
794,196 | 790,058 | 0.5 | % | 796,345 | 791,764 | 0.6 | % | ||||||||||||||||||||||||
| Special Sales |
6 | 6 | 0.0 | % | 6 | 7 | (14.3 | %) | ||||||||||||||||||||||||
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| Total Average Number of Customers - Duke Energy Indiana |
794,202 | 790,064 | 0.5 | % | 796,351 | 791,771 | 0.6 | % | ||||||||||||||||||||||||
| Heating and Cooling Degree Days (3) |
||||||||||||||||||||||||||||||||
| Actual |
||||||||||||||||||||||||||||||||
| Heating Degree Days |
88 | 39 | 125.6 | % | 4,130 | 3,504 | 17.9 | % | ||||||||||||||||||||||||
| Cooling Degree Days |
507 | 729 | (30.5 | %) | 825 | 1,058 | (22.0 | %) | ||||||||||||||||||||||||
| Variance from Normal |
||||||||||||||||||||||||||||||||
| Heating Degree Days |
66.0 | % | (17.4 | %) | n/a | 28.1 | % | 6.8 | % | n/a | ||||||||||||||||||||||
| Cooling Degree Days |
(36.6 | %) | (8.9 | %) | n/a | (28.9 | %) | (7.7 | %) | n/a | ||||||||||||||||||||||
| (1) | Except as indicated in footnote (2), represents non-weather normalized billed sales, with energy delivered but not yet billed (i.e. unbilled sales) reflected as a single amount and not allocated to the respective retail classes. |
| (2) | Represents weather normal total retail calendar sales (i.e. billed and unbilled sales). |
| (3) | Certain 2013 data has been recast to conform to the 2014 methodology which provides for consistency across all Regulated Utilities’ jurisdictions. |
24
DUKE ENERGY CORPORTATION
ADJUSTED TO REPORTED EARNINGS RECONCILIATION
Three Months Ended September 30, 2014
(Dollars in millions, except per-share amounts)
| Special Items | ||||||||||||||||||||||||||||
| Adjusted Earnings |
Costs to Achieve, Progress Merger |
Midwest Generation Operations |
Asset Sales | Discontinued Operations |
Total Adjustments |
Reported Earnings |
||||||||||||||||||||||
| SEGMENT INCOME |
||||||||||||||||||||||||||||
| Regulated Utilities |
$ | 920 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 920 | ||||||||||||||
| International Energy |
80 | — | — | — | — | — | 80 | |||||||||||||||||||||
| Commercial Power |
51 | — | (68 | )B | — | — | (68 | ) | (17 | ) | ||||||||||||||||||
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|||||||||||||||
| Total Reportable Segment Income |
1,051 | — | (68 | ) | — | — | (68 | ) | 983 | |||||||||||||||||||
| Other |
(58 | ) | (35 | )A | (8 | )B | 9 | D | — | (34 | ) | (92 | ) | |||||||||||||||
| Intercompany Eliminations |
— | — | — | — | (3 | )E | (3 | ) | (3 | ) | ||||||||||||||||||
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|||||||||||||||
| Total Reportable Segment Income and Other Net Expense |
993 | (35 | ) | (76 | ) | 9 | (3 | ) | (105 | ) | 888 | |||||||||||||||||
| Discontinued Operations |
— | — | 76 | B | — | 310 | C | 386 | 386 | |||||||||||||||||||
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| Net Income (Loss) Attributable to Duke Energy Corporation |
$ | 993 | $ | (35 | ) | $ | — | $ | 9 | $ | 307 | $ | 281 | $ | 1,274 | |||||||||||||
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|||||||||||||||
| EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, BASIC |
$ | 1.40 | $ | (0.05 | ) | $ | — | $ | 0.01 | $ | 0.44 | $ | 0.40 | $ | 1.80 | |||||||||||||
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|||||||||||||||
| EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, DILUTED |
$ | 1.40 | $ | (0.05 | ) | $ | — | $ | 0.01 | $ | 0.44 | $ | 0.40 | $ | 1.80 | |||||||||||||
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| A - | Net of $21 million tax benefit. $4 million recorded as a decrease in Operating Revenues, $51 million recorded in Operating Expenses and $1 million recorded within Interest Expense on the Condensed Consolidated Statements of Operations. |
| B - | Midwest Generation Operations reclassifies the operating results of the nonregulated Midwest generation business that had been classified as discontinued operations after adjustment for special items and economic hedges from discontinued operations to the Commercial Power segment (net of $32 million tax benefit) and Other segment (net of $10 million tax expense). |
| C - | Recorded in Income (loss) From Discontinued Operations, net of tax on the Condensed Consolidated Statements of Operations. Includes the adjustment to the impairment of the nonregulated Midwest generation business and the mark-to-market of economic hedges of the nonregulated Midwest generation business. |
| D - | Net of $5 million tax expense. Recorded in Other Income and Expenses on the Condensed Consolidated Statements of Operations. |
| E - | Reverses the impact on eliminations of classifying the nonregulated Midwest generation business as discontinued operations. |
Weighted Average Shares (reported and adjusted) - in millions
| Basic |
707 | |||
| Diluted |
707 |
25
DUKE ENERGY CORPORATION
ADJUSTED TO REPORTED EARNINGS RECONCILIATION
Nine Months Ended September 30, 2014
(Dollars in millions, except per-share amounts)
| Special Items | ||||||||||||||||||||||||||||||||||||
| Adjusted Earnings |
Costs to Achieve, Progress Merger |
Asset Impairment |
Midwest Generation Operations |
Asset Sales | Economic Hedges (Mark-to- Market) * |
Discontinued Operations |
Total Adjustments |
Reported Earnings |
||||||||||||||||||||||||||||
| SEGMENT INCOME |
||||||||||||||||||||||||||||||||||||
| Regulated Utilities |
$ | 2,346 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 2,346 | ||||||||||||||||||
| International Energy |
356 | — | — | — | — | — | — | — | 356 | |||||||||||||||||||||||||||
| Commercial Power |
77 | — | (59 | )F | (82 | )C | — | (6 | )B | — | (147 | ) | (70 | ) | ||||||||||||||||||||||
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|||||||||||||||||||
| Total Reportable Segment Income |
2,779 | — | (59 | ) | (82 | ) | — | (6 | ) | — | (147 | ) | 2,632 | |||||||||||||||||||||||
| Other |
(171 | ) | (107 | )A | — | — | 9 | E | — | — | (98 | ) | (269 | ) | ||||||||||||||||||||||
| Intercompany Eliminations |
— | — | — | — | — | — | (7 | )G | (7 | ) | (7 | ) | ||||||||||||||||||||||||
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| Total Reportable Segment Income and Other Net Expense |
2,608 | (107 | ) | (59 | ) | (82 | ) | 9 | (6 | ) | (7 | ) | (252 | ) | 2,356 | |||||||||||||||||||||
| Discontinued Operations |
— | — | — | 82 | C | — | — | (652 | )D | (570 | ) | (570 | ) | |||||||||||||||||||||||
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| Net Income (Loss) Attributable to Duke Energy Corporation |
$ | 2,608 | $ | (107 | ) | $ | (59 | ) | $ | — | $ | 9 | $ | (6 | ) | $ | (659 | ) | $ | (822 | ) | $ | 1,786 | |||||||||||||
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| EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, BASIC |
$ | 3.69 | $ | (0.15 | ) | $ | (0.08 | ) | $ | — | $ | 0.01 | $ | (0.01 | ) | $ | (0.94 | ) | $ | (1.17 | ) | $ | 2.52 | |||||||||||||
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| EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, DILUTED |
$ | 3.69 | $ | (0.15 | ) | $ | (0.08 | ) | $ | — | $ | 0.01 | $ | (0.01 | ) | $ | (0.94 | ) | $ | (1.17 | ) | $ | 2.52 | |||||||||||||
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| A - | Net of $65 million tax benefit. $5 million recorded as a decrease in Operating Revenues, $165 million recorded within Operating Expenses and $2 million recorded within Interest Expense on the Condensed Consolidated Statements of Operations. |
| B - | Net of $3 million tax benefit. Recorded within Operating Revenues on the Condensed Consolidated Statements of Operations. |
| C - | Midwest Generation Operations reclassifies the operating results of the nonregulated Midwest generation business that had been classified as discontinued operations after adjustment for special items and economic hedges from discontinued operations to the Commercial Power segment (net of $51 million tax benefit). |
| D - | Recorded in Income (loss) From Discontinued Operations, net of tax on the Condensed Consolidated Statements of Operations. Includes the impairment of the nonregulated Midwest generation business and the mark-to-market of economic hedges of the nonregulated Midwest generation business. |
| E - | Net of $5 million tax expense. Recorded in Other Income and Expenses on the Condensed Consolidated Statements of Operations. |
| F - | Net of $35 million tax benefit. Recorded in impairment charges on the Condensed Consolidated Statements of Operations. |
| G - | Reverses the impact on eliminations of classifying the nonregulated Midwest generation business as discontinued operations. |
Weighted Average Shares (reported and adjusted) - in millions
| Basic |
707 | |||
| Diluted |
707 |
| * | Mark-to-market adjustments reflect the impact of derivative contracts, which are used in Duke Energy’s hedging of a portion of the economic value of its generation assets in the Commercial Power segment and also relate to existing derivative positions that may have tenors beyond the planned disposal date of the nonregulated Midwest generation business. The mark-to-market impact of derivative contracts is recognized in GAAP earnings immediately as such derivative contracts do not qualify for hedge accounting or regulatory treatment. The economic value of generation assets is subject to fluctuations in fair value due to market price volatility of input and output commodities (e.g. coal, electricity, natural gas). Economic hedging involves both purchases and sales of those input and output commodities related to generation assets. Operations of the generation assets are accounted for under the accrual method. Management believes excluding impacts of mark-to-market changes of the derivative contracts from adjusted earnings until settlement better matches the financial impacts of the derivative contract with the portion of economic value of the underlying hedged asset. However, due to the divestiture of the nonregulated Midwest generation business as mentioned above, certain derivative positions have tenors beyond the planned disposal date of these assets. As such, management has excluded settlements of these derivative positions from adjusted diluted EPS as these realized gains and losses more closely relate to the loss on disposal of these assets. Management believes that the presentation of adjusted diluted EPS Attributable to Duke Energy Corporation provides useful information to investors, as it provides them an additional relevant comparison of Duke Energy Corporation’s performance across periods. |
26
DUKE ENERGY CORPORATION
ADJUSTED TO REPORTED EARNINGS RECONCILIATION
Three Months Ended September 30, 2013
(Dollars in millions, except per-share amounts)
| Special Items | ||||||||||||||||||||||||
| Adjusted Earnings |
Costs to Achieve, Progress Merger |
Midwest Generation Operations |
Discontinued Operations |
Total Adjustments |
Reported Earnings |
|||||||||||||||||||
| SEGMENT INCOME |
||||||||||||||||||||||||
| Regulated Utilities |
$ | 923 | $ | — | $ | — | $ | — | $ | — | $ | 923 | ||||||||||||
| International Energy |
116 | — | — | — | — | 116 | ||||||||||||||||||
| Commercial Power |
15 | — | (43 | )B | — | (43 | ) | (28 | ) | |||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total Reportable Segment Income |
1,054 | — | (43 | ) | — | (43 | ) | 1,011 | ||||||||||||||||
| Other |
(21 | ) | (54 | )A | 11 | B | — | (43 | ) | (64 | ) | |||||||||||||
| Intercompany Eliminations |
— | — | — | (5 | )D | (5 | ) | (5 | ) | |||||||||||||||
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|
|
|
|
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|
|||||||||||||
| Total Reportable Segment Income and Other Net Expense |
1,033 | (54 | ) | (32 | ) | (5 | ) | (91 | ) | 942 | ||||||||||||||
| Discontinued Operations |
— | — | 32 | B | 30 | C | 62 | 62 | ||||||||||||||||
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|
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|
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|
|||||||||||||
| Net Income (Loss) Attributable to Duke Energy Corporation |
$ | 1,033 | $ | (54 | ) | $ | — | $ | 25 | $ | (29 | ) | $ | 1,004 | ||||||||||
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|
|||||||||||||
| EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, BASIC |
$ | 1.46 | $ | (0.08 | ) | $ | — | $ | 0.04 | $ | (0.04 | ) | $ | 1.42 | ||||||||||
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|
|||||||||||||
| EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, DILUTED |
$ | 1.46 | $ | (0.08 | ) | $ | — | $ | 0.04 | $ | (0.04 | ) | $ | 1.42 | ||||||||||
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|
|||||||||||||
| A - | Net of $34 million tax benefit. $24 million recorded as an increase in Operating Revenues and $113 million recorded within Operating Expenses on the Condensed Consolidated Statements of Operations. |
| B - | Midwest Generation Operations reclassifies the operating results of the nonregulated Midwest generation business that had been classified as discontinued operations after adjustment for special items and economic hedges from discontinued operations to the Commercial Power segment (net of $17 million tax benefit) and Other segment (net of $8 million tax benefit). |
| C - | Recorded in Income (loss) From Discontinued Operations, net of tax on the Condensed Consolidated Statements of Operations. Includes the mark-to-market of economic hedges of the nonregulated Midwest generation business. |
| D - | Reverses the impact on eliminations of classifying the nonregulated Midwest generation business as discontinued operations. |
Weighted Average Shares (reported and adjusted) - in millions
| Basic |
706 | |||
| Diluted |
706 |
27
DUKE ENERGY CORPORATION
ADJUSTED TO REPORTED EARNINGS RECONCILIATION
Nine Months Ended September 30, 2013
(Dollars in millions, except per-share amounts)
| Special Items | ||||||||||||||||||||||||||||||||||||
| Adjusted Earnings |
Costs to Achieve, Progress Merger |
Nuclear Development Charges |
Litigation Reserve |
Crystal River Unit 3 Impairment |
Midwest Generation Operations |
Discontinued Operations |
Total Adjustments |
Reported Earnings |
||||||||||||||||||||||||||||
| SEGMENT INCOME |
||||||||||||||||||||||||||||||||||||
| Regulated Utilities |
$ | 2,169 | $ | — | $ | (57 | )D | $ | — | $ | (180 | )F | $ | — | $ | — | $ | (237 | ) | $ | 1,932 | |||||||||||||||
| International Energy |
300 | — | — | — | — | — | — | — | 300 | |||||||||||||||||||||||||||
| Commercial Power |
18 | — | — | — | — | (72 | )B | — | (72 | ) | (54 | ) | ||||||||||||||||||||||||
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|
|||||||||||||||||||
| Total Reportable Segment Income |
2,487 | — | (57 | ) | — | (180 | ) | (72 | ) | — | (309 | ) | 2,178 | |||||||||||||||||||||||
| Other |
(114 | ) | (139 | )A | — | (31 | )E | — | 6 | B | — | (164 | ) | (278 | ) | |||||||||||||||||||||
| Intercompany Eliminations |
— | — | — | — | — | — | (10 | )G | (10 | ) | (10 | ) | ||||||||||||||||||||||||
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|
|||||||||||||||||||
| Total Reportable Segment Income and Other Net Expense |
2,373 | (139 | ) | (57 | ) | (31 | ) | (180 | ) | (66 | ) | (10 | ) | (483 | ) | 1,890 | ||||||||||||||||||||
| Discontinued Operations |
— | — | — | — | — | 66 | B | 21 | C | 87 | 87 | |||||||||||||||||||||||||
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| Net Income (Loss) Attributable to Duke Energy Corporation |
$ | 2,373 | $ | (139 | ) | $ | (57 | ) | $ | (31 | ) | $ | (180 | ) | $ | — | $ | 11 | $ | (396 | ) | $ | 1,977 | |||||||||||||
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| EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, BASIC |
$ | 3.36 | $ | (0.20 | ) | $ | (0.08 | ) | $ | (0.04 | ) | $ | (0.26 | ) | $ | — | $ | 0.01 | $ | (0.57 | ) | $ | 2.79 | |||||||||||||
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| EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, DILUTED |
$ | 3.36 | $ | (0.20 | ) | $ | (0.08 | ) | $ | (0.04 | ) | $ | (0.26 | ) | $ | — | $ | 0.01 | $ | (0.57 | ) | $ | 2.79 | |||||||||||||
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|||||||||||||||||||
| A - | Net of $86 million tax benefit. $57 million recorded as an increase in Operating Revenues, $275 million recorded within Operating Expenses and $1 million recorded within Interest Expense on the Condensed Consolidated Statements of Operations. |
| B - | Midwest Generation Operations reclassifies the operating results of the nonregulated Midwest generation business that had been classified as discontinued operations after adjustment for special items and economic hedges from discontinued operations to the Commercial Power segment (net of $33 million tax benefit) and Other segment (net of $4 million tax benefit). |
| C - | Recorded in Income (loss) From Discontinued Operations, net of tax on the Condensed Consolidated Statements of Operations. Includes the mark-to-market of economic hedges of the nonregulated Midwest generation business. |
| D - | Net of $30 million tax benefit. Recorded in Impairment charges (Operating Expenses) on the Condensed Consolidated Statement of Operations. |
| E - | Net of $19 million tax benefit. Recorded in Operations, maintenance and other (Operating Expenses) on the Condensed Consolidated Statement of Operations. |
| F - | Net of $115 million tax benefit. Recorded in Impairment charges (Operating Expenses) on the Condensed Consolidated Statement of Operations. |
| G - | Reverses the impact on eliminations of classifying the nonregulated Midwest generation business as discontinued operations. |
Weighted Average Shares (reported and adjusted) - in millions
| Basic |
706 | |||
| Diluted |
706 |
28
DUKE ENERGY CORPORATION
ADJUSTED EFFECTIVE TAX RECONCILIATION
Three and Nine Months Ended September 30, 2014
(Dollars in millions)
| Three Months Ended September 30, 2014 |
Nine Months Ended September 30, 2014 |
|||||||||||||||
| Balance | Effective Tax Rate | Balance | Effective Tax Rate | |||||||||||||
| Adjusted Earnings, Pre-Tax Income* |
$ | 1,491 | $ | 3,842 | ||||||||||||
| Costs-to-Achieve, Progress Energy Merger |
(56 | ) | (172 | ) | ||||||||||||
| Midwest Generation Operations |
(98 | ) | (133 | ) | ||||||||||||
| Asset Impairment |
— | (94 | ) | |||||||||||||
| Economic Hedges (Mark-to-Market) |
— | (9 | ) | |||||||||||||
| Asset Sales |
14 | 14 | ||||||||||||||
|
|
|
|
|
|||||||||||||
| Reported Income From Continuing Operations Before Income Taxes |
$ | 1,351 | $ | 3,448 | ||||||||||||
|
|
|
|
|
|||||||||||||
| Adjusted Tax Expense* |
$ | 498 | 33.5 | %** | $ | 1,230 | 32.0 | %** | ||||||||
| Costs-to-Achieve, Progress Energy Merger |
(21 | ) | (65 | ) | ||||||||||||
| Midwest Generation Operations |
(22 | ) | (51 | ) | ||||||||||||
| Asset Impairment |
— | (35 | ) | |||||||||||||
| Economic Hedges (Mark-to-Market) |
— | (3 | ) | |||||||||||||
| Asset Sales |
5 | 5 | ||||||||||||||
|
|
|
|
|
|||||||||||||
| Reported Income Tax Expense From Continuing Operations |
$ | 460 | 34.0 | % | $ | 1,081 | 31.4 | % | ||||||||
|
|
|
|
|
|||||||||||||
| * | Includes amounts attributable to noncontrolling interests |
| ** | Adjusted effective tax rate is a non-GAAP financial measure as the rate is calculated using a pre-tax earnings and income tax expense, both adjusted for the impact of special items and the mark-to-market impacts of economic hedges in the Commercial Power segment. The most directly comparable GAAP measure for adjusted effective tax rate is reported effective tax rate, which includes the impact of special items and the mark-to-market impacts of economic hedges in the Commercial Power segment. |
29
DUKE ENERGY CORPORATION
ADJUSTED EFFECTIVE TAX RECONCILIATION
Three and Nine Months Ended September 30, 2013
(Dollars in millions)
| Three Months Ended September 30, 2013 |
Nine Months Ended September 30, 2013 |
|||||||||||||||
| Balance | Effective Tax Rate | Balance | Effective Tax Rate | |||||||||||||
| Adjusted Earnings, Pre-Tax Income* |
$ | 1,514 | $ | 3,571 | ||||||||||||
| Crystal River Unit 3 Impairment |
— | (295 | ) | |||||||||||||
| Costs-to-Achieve, Progress Energy Merger |
(88 | ) | (225 | ) | ||||||||||||
| Midwest Generation Operations |
(57 | ) | (103 | ) | ||||||||||||
| Nuclear Development Charges |
— | (87 | ) | |||||||||||||
| Litigation Reserve |
— | (50 | ) | |||||||||||||
|
|
|
|
|
|||||||||||||
| Reported Income From Continuing Operations Before Income Taxes |
$ | 1,369 | $ | 2,811 | ||||||||||||
|
|
|
|
|
|||||||||||||
| Adjusted Tax Expense* |
$ | 482 | 31.8 | %** | $ | 1,196 | 33.5 | %** | ||||||||
| Crystal River Unit 3 Impairment |
— | (115 | ) | |||||||||||||
| Costs-to-Achieve, Progress Energy Merger |
(34 | ) | (86 | ) | ||||||||||||
| Midwest Generation Operations |
(25 | ) | (37 | ) | ||||||||||||
| Nuclear Development Charges |
— | (30 | ) | |||||||||||||
| Litigation Reserve |
— | (19 | ) | |||||||||||||
|
|
|
|
|
|||||||||||||
| Reported Income Tax Expense From Continuing Operations |
$ | 423 | 30.9 | % | $ | 909 | 32.3 | % | ||||||||
|
|
|
|
|
|||||||||||||
| * | Includes amounts attributable to noncontrolling interests |
| ** | Adjusted effective tax rate is a non-GAAP financial measure as the rate is calculated using a pre-tax earnings and income tax expense, both adjusted for the impact of special items and the mark-to-market impacts of economic hedges in the Commercial Power segment. The most directly comparable GAAP measure for adjusted effective tax rate is reported effective tax rate, which includes the impact of special items and the mark-to-market impacts of economic hedges in the Commercial Power segment. |
30