Attached files
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| 8-K - 8-K - Duke Energy CORP | d83445d8k.htm |
Exhibit 99.1
Media Contact: Tom Shiel
24-Hour: 800.559.3853
Analysts: Bill Currens
Office: 704.382.1603
Nov. 5, 2015
Duke Energy reports third quarter 2015 financial results
| • | Third quarter 2015 adjusted diluted earnings per share (EPS) were $1.47, compared to $1.40 for the third quarter of 2014 |
| • | Reported diluted EPS of $1.35 for third quarter 2015, compared to $1.80 for the third quarter of 2014 |
| • | Company narrows its 2015 adjusted diluted earnings guidance range from $4.55 to $4.75 per share to $4.55 to $4.65 per share |
CHARLOTTE, N.C. – Duke Energy today announced third quarter 2015 adjusted diluted EPS of $1.47, compared to $1.40 for the third quarter of 2014. Third quarter 2015 reported EPS was $1.35, compared to $1.80 for the same period last year.
Earnings for the third quarter of 2015 were higher than the prior year quarterly results, primarily due to warmer weather compared to the previous year. The company also experienced strong growth in the Regulated Utilities business, including the impact of the recently completed North Carolina Eastern Municipal Power Agency (NCEMPA) acquisition.
During 2015, the company has been able to offset weakness in the International business with favorable weather, solid operational performance in the regulated business, and benefits from closing certain strategic initiatives earlier than anticipated. The company has narrowed its 2015 adjusted diluted earnings guidance range from $4.55 to $4.75 per share to $4.55 to $4.65 per share.
“I am pleased with our overall operational and financial performance to date in 2015,” said Lynn Good, president and CEO. “We are on-track to achieve our financial objectives for the year and our regulated generation fleet continues to reliably meet customer needs.
“Additionally, we are taking significant steps to grow our low-risk regulated business mix as highlighted by last week’s announced acquisition of Piedmont Natural Gas, which provides us with additional capabilities and growth potential around natural gas infrastructure,” Good added.
| Duke Energy News Release | 2 |
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 by segment compared to the prior year is provided on pages 16 and 17.
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 2015 adjusted segment income of $965 million, compared to $920 million in the third quarter 2014, an increase of 7 cents per share, excluding the benefit of the $1.5 billion accelerated stock repurchase program that was completed in June.
Higher quarterly results at Regulated Utilities were primarily driven by:
| • | Favorable weather (+$0.09 per share) driven by warmer temperatures in the Carolinas. This was the first above normal summer weather experienced since 2012. |
| • | Higher revenues from increased pricing and riders (+$0.07 per share) due to increased energy efficiency programs and prior year true-ups that did not recur |
| • | Increased wholesale net margins (+$0.05 per share) resulting from growth in contracted amounts and earnings from the long-term wholesale contract associated with the recent NCEMPA asset purchase |
These favorable drivers were partially offset by:
| • | Higher O&M expense (-$0.06 per share) due to the timing of planned work, increased costs related to the recent NCEMPA asset purchase and storm costs |
| • | Higher effective tax rate (-$0.04 per share) primarily due to additional deductions in the prior year |
On a year-to-date basis, Regulated Utilities recognized adjusted segment income of $2,371 million, compared to $2,346 million for the same period last year, an increase of 3 cents per share, excluding the benefit of the accelerated stock repurchase program.
Higher year-to-date results at Regulated Utilities were primarily driven by:
| • | Higher revenues from increased pricing and riders (+$0.14 per share) due to increased energy efficiency programs and prior year true-ups that did not recur, partially offset by a regulatory order in Ohio related to energy efficiency (-$0.03 per share) |
| Duke Energy News Release | 3 |
| • | Favorable weather (+$0.11 per share) across Duke Energy’s service territories |
| • | Increased wholesale net margins (+$0.12 per share) due to growth in contracted amounts and earnings from the long-term wholesale contract associated with the recent NCEMPA asset purchase |
| • | Higher AFUDC equity (+$0.03 per share) due to increased capital spending |
| • | Higher weather-normal retail volumes (+$0.03 per share) of 0.4 percent compared to 2014 |
These favorable drivers were partially offset by:
| • | Higher O&M expense (-$0.19 per share) due to timing of planned outages, increased costs related to the recent NCEMPA asset purchase and nuclear outage cost levelization. These costs were partially offset by lower storm costs. |
| • | Higher effective tax rate (-$0.08 per share) primarily due to a favorable prior year state tax settlement and additional deductions in the prior year |
| • | Higher depreciation and amortization expense (-$0.04 per share) primarily resulting from additional plant in-service |
International Energy
International Energy recognized third quarter 2015 adjusted segment income of $69 million, compared to $80 million in the third quarter 2014, a decrease of 2 cents per share, excluding the benefit of the accelerated stock repurchase program.
Lower quarterly results at International Energy were primarily driven by:
| • | Lower results in Latin America (-$0.01 per share) principally driven by unfavorable foreign exchange rates and an asset impairment in Ecuador. These drivers were partially offset by lower purchased power costs in Brazil. |
| • | Lower margins at National Methanol (-$0.01 per share) due to lower MTBE prices |
On a year-to-date basis, International Energy recognized adjusted segment income of $157 million, compared to $356 million for the same period in 2014, a decrease of 29 cents per share, excluding the benefit of the accelerated stock repurchase program.
Lower year-to-date earnings at International Energy were driven by:
| • | Weaker results in Latin America (-$0.25 per share) primarily due to lower sales volumes and higher purchased power costs resulting from ongoing drought conditions and decreased demand in Brazil, a prior-year tax benefit in Chile, unfavorable foreign currency exchange rates, and an asset impairment in Ecuador |
| • | Lower margins at National Methanol (-$0.04 per share) largely driven by lower MTBE and methanol prices |
| Duke Energy News Release | 4 |
Commercial Portfolio
Subsequent to the sale of its nonregulated Midwest Commercial Generation Business to Dynegy Inc. in April, Commercial Portfolio (formerly Commercial Power) includes Duke Energy’s unregulated renewable assets as well as its commercial electric and gas transmission investments.
Commercial Portfolio recognized a third quarter 2015 adjusted segment loss of $4 million, compared to income of $51 million in the third quarter 2014, a decrease of 8 cents per share. The decline in Commercial Portfolio’s quarterly earnings was primarily due to the sale of the Midwest Generation business to Dynegy, which was completed in April 2015.
On a year-to-date basis, Commercial Portfolio recognized adjusted segment income of $99 million, compared to $77 million in the comparable year-to-date period of 2014, an increase of 3 cents per share.
Commercial Portfolio’s higher year-to-date earnings were driven by higher results from the Midwest Generation fleet (+$0.06 per share), which was sold in April 2015, partially offset by lower earnings from the renewables fleet (-$0.01 per share) resulting from lower wind resources during 2015.
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 quarterly income tax levelization adjustments.
Other recognized a third quarter 2015 adjusted net expense of $19 million, compared to net expense of $58 million in the third quarter 2014, an improvement of 6 cents per share, excluding the impact of the accelerated stock repurchase program. Other’s quarterly results were primarily driven by a prior year tax charge and quarterly tax levelization, including the recognition of renewable tax credits.
On a year-to-date basis, Other recognized adjusted net expense of $77 million, compared to $171 million in the comparable period of 2014, an improvement of 14 cents per share, excluding the impact of the accelerated stock repurchase program. Other’s year-to-date results were primarily driven by favorable tax resolution, a prior year tax charge and quarterly tax levelization, including the recognition of renewable tax credits.
| Duke Energy News Release | 5 |
The consolidated adjusted effective tax rate for third quarter 2015 was 31 percent, compared to 34 percent in the third quarter of 2014. On a year-to-date basis, the consolidated adjusted effective tax rate was 32 percent, consistent with 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.
Accelerated stock repurchase program
In connection with the transaction to sell the Midwest Generation business to Dynegy for $2.8 billion, which closed on April 2, 2015, Duke Energy completed a $1.5 billion accelerated stock repurchase program (ASR). The program resulted in share retirements of approximately 19.8 million, providing a benefit to the third quarter 2015 and year-to-date results of approximately 4 cents per share and 6 cents per share, respectively.
As a result of the ASR, weighted-average shares of Duke Energy common stock outstanding in 2015 are expected to be approximately 695 million.
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.
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 conference call will be webcast live through the investor relations page of Duke Energy’s website at www.duke-energy.com/investors. In order to expedite access to the call, participants can register in advance through the webcast event link included on the company’s investor relations website. A replay of the webcast will be accessible through the company’s Investor Relations website and mobile app.
| Duke Energy News Release | 6 |
Special items and non-GAAP reconciliation
Special items affecting Duke Energy’s quarterly adjusted diluted EPS results in 2015 and 2014 include:
| (In millions, except per-share amounts) | After-Tax Amount |
3Q2015 EPS Impact |
3Q2014 EPS Impact |
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| Third Quarter 2015 |
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| • Costs to achieve, Progress Energy merger |
$ | (15 | ) | $ | (0.02 | ) | ||||||
| • Edwardsport settlement |
$ | (56 | ) | $ | (0.08 | ) | ||||||
| • Ash basin settlement |
$ | (4 | ) | $ | (0.01 | ) | ||||||
| • Discontinued operations |
$ | (5 | ) | $ | (0.01 | ) | ||||||
| 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 | ||||||||
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| Total diluted EPS impact |
$ | (0.12 | ) | $ | 0.40 | |||||||
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| (1) | Reported discontinued operations includes 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 less the Midwest generation operations results classified as discontinued operations of (+$0.11) per diluted share. Midwest generation operations are treated as a special item and reflected in adjusted diluted EPS. |
Reconciliation of reported to adjusted diluted EPS for the quarter:
| 3Q2015 EPS |
3Q2014 EPS |
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| Diluted EPS, as reported |
$ | 1.35 | $ | 1.80 | ||||
| Adjustments to reported EPS: |
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| • Diluted EPS impact of special items and discontinued operations (net of tax) |
$ | 0.12 | $ | (0.40 | ) | |||
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| Diluted EPS, adjusted |
$ | 1.47 | $ | 1.40 | ||||
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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 non-controlling interests, adjusted for the dollar and per-share impact of mark-to-market impacts of economic hedges in the Commercial Portfolio segment and special items including the operating results of the 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. Operating results of the Disposal Group sold to Dynegy are reported as discontinued operations, including a portion of the mark-to-market adjustments associated with derivative contracts. Management believes that including the operating
| Duke Energy News Release | 7 |
results of the Disposal Group reported as discontinued operations better reflects its financial performance and therefore has included these results in adjusted earnings and adjusted diluted EPS prior to the sale of the Disposal Group. Additionally, as a result of completing the sale of the Disposal Group during the second quarter of 2015, state income tax expense increased as state income tax apportionments changed. The additional tax expense was recognized in Continuing Operations on a GAAP basis. This impact to state income taxes has been reflected in Discontinued Operations in the Commercial Portfolio segment for adjusted diluted EPS purposes as management believes these impacts are incidental to the sale of the Disposal Group. Derivative contracts are used in Duke Energy’s hedging of a portion of the economic value of its generation assets in the Commercial Portfolio 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. 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 Portfolio segment and discontinued operations.
Management evaluates segment performance based on segment income. Segment income is defined as income from continuing operations net of income attributable to non-controlling interests. Segment income, as discussed below, includes intercompany revenues and expenses that are eliminated in the 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 Portfolio segment and special items,
| Duke Energy News Release | 8 |
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 Portfolio 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.
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 Portfolio 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 approximately $120 billion in total assets. Its regulated utility operations serve approximately 7.3 million electric customers located in six states in the Southeast and Midwest. Its Commercial Portfolio 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.
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,” “guidance,” “outlook,” 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
| Duke Energy News Release | 9 |
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 compliance with current regulations and any 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 amounts estimated and all costs may not be fully recoverable through the regulatory process; credit ratings of the company or its subsidiaries may be different from what is expected; 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 efforts 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, cybersecurity 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 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; construction and development risks associated with the completion of Duke Energy and its subsidiaries’ capital investment projects in existing and new generation facilities, including risks related to financing, obtaining and complying with terms of permits, meeting construction budgets and schedules, and satisfying operating and environmental performance standards, as well as the ability to recover costs from customers in a timely manner or at all; changes in rules for regional transmission organizations, including changes in rate designs and new and evolving capacity markets, and risks related to obligations created by the default of other participants; the ability to control operation and maintenance costs; the level of creditworthiness of
| Duke Energy News Release | 10 |
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 prospective undistributed earnings of foreign subsidiaries or repatriate such earnings on a tax-efficient basis; the expected timing and likelihood of completion of the proposed acquisition of Piedmont, including the timing, receipt and terms and conditions of any required governmental and regulatory approvals of the proposed acquisition that could reduce anticipated benefits or cause the parties to abandon the acquisition, as well as the ability to successfully integrate the businesses and realize anticipated benefits and the risk that the credit ratings of the combined company or its subsidiaries may be different from what the companies expect; 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.
###
September 2015
QUARTERLY HIGHLIGHTS
(Unaudited)
| Three Months Ended September 30, |
Nine Months Ended September 30, |
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| (In millions, except per-share amounts and where noted) |
2015 | 2014 | 2015 | 2014 | ||||||||||||
| Earnings Per Share - Basic and Diluted |
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| Income from continuing operations attributable to Duke Energy Corporation common stockholders |
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| Basic |
$ | 1.36 | $ | 1.25 | $ | 3.31 | $ | 3.33 | ||||||||
| Diluted |
$ | 1.36 | $ | 1.25 | $ | 3.31 | $ | 3.33 | ||||||||
| (Loss) Income from discontinued operations attributable to Duke Energy Corporation common stockholders |
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| Basic |
$ | (0.01 | ) | $ | 0.55 | $ | 0.05 | $ | (0.81 | ) | ||||||
| Diluted |
$ | (0.01 | ) | $ | 0.55 | $ | 0.05 | $ | (0.81 | ) | ||||||
| Net income attributable to Duke Energy Corporation common stockholders |
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| Basic |
$ | 1.35 | $ | 1.80 | $ | 3.36 | $ | 2.52 | ||||||||
| Diluted |
$ | 1.35 | $ | 1.80 | $ | 3.36 | $ | 2.52 | ||||||||
| Weighted-average shares outstanding |
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| Basic |
688 | 707 | 696 | 707 | ||||||||||||
| Diluted |
688 | 707 | 696 | 707 | ||||||||||||
| SEGMENT INCOME (LOSS) BY BUSINESS SEGMENT |
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| Regulated Utilities(a) |
$ | 905 | $ | 920 | $ | 2,311 | $ | 2,346 | ||||||||
| International Energy |
69 | 80 | 157 | 356 | ||||||||||||
| Commercial Portfolio(b)(c) |
(3 | ) | (17 | ) | (35 | ) | (70 | ) | ||||||||
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| Total Reportable Segment Income |
971 | 983 | 2,433 | 2,632 | ||||||||||||
| Other Net Expense(d)(e) |
(34 | ) | (92 | ) | (119 | ) | (269 | ) | ||||||||
| Intercompany Eliminations |
— | (3 | ) | (4 | ) | (7 | ) | |||||||||
| (Loss) Income from Discontinued Operations, net of tax(f) |
(5 | ) | 386 | 29 | (570 | ) | ||||||||||
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| Net Income Attributable to Duke Energy Corporation |
$ | 932 | $ | 1,274 | $ | 2,339 | $ | 1,786 | ||||||||
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| CAPITALIZATION |
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| Total Common Equity |
48 | % | 50 | % | ||||||||||||
| Total Debt |
52 | % | 50 | % | ||||||||||||
| Total Debt |
$ | 42,622 | $ | 41,645 | ||||||||||||
| Book Value Per Share |
$ | 57.92 | $ | 58.61 | ||||||||||||
| Actual Shares Outstanding |
688 | 707 | ||||||||||||||
| CAPITAL AND INVESTMENT EXPENDITURES |
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| Regulated Utilities(g) |
$ | 2,539 | $ | 1,182 | $ | 5,212 | $ | 3,357 | ||||||||
| International Energy |
14 | 15 | 33 | 40 | ||||||||||||
| Commercial Portfolio |
374 | 156 | 757 | 324 | ||||||||||||
| Other |
52 | 29 | 166 | 115 | ||||||||||||
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| Total Capital and Investment Expenditures |
$ | 2,979 | $ | 1,382 | $ | 6,168 | $ | 3,836 | ||||||||
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| (a) | Includes a charge of $56 million related to the Edwardsport settlement for the three and nine months ended September 30, 2015 (net of tax of $34 million). |
| (b) | Includes a tax charge of $41 million resulting from the completion of the sale of the nonregulated Midwest generation business for the nine months ended September 30, 2015. |
| (c) | Includes an impairment charge of $59 million for the nine months ended September 30, 2014, related to OVEC (net of tax of $35 million). |
| (d) | Includes costs to achieve the Progress merger of $15 million for the three months ended September 30, 2015 (net of tax of $9 million) and $42 million for the nine months ended September 30, 2015 (net of tax of $25 million). |
| (e) | Includes costs to achieve the 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). |
| (f) | Includes the impact of a settlement agreement related to the nonregulated Midwest generation business of $53 million for the nine months ended September 30, 2015 (net of tax of $28 million). |
| (g) | Includes $1.25 billion related to the NCEMPA acquisition for the three and nine months ended September 30, 2015. |
11
September 2015
QUARTERLY HIGHLIGHTS
(Unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| (In millions, except for GWh and MW amounts) |
2015 | 2014 | 2015 | 2014 | ||||||||||||
| REGULATED UTILITIES |
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| Operating Revenues |
$ | 6,147 | $ | 5,986 | $ | 17,090 | $ | 17,074 | ||||||||
| Operating Expenses(a) |
4,481 | 4,361 | 12,789 | 12,807 | ||||||||||||
| Gains on Sales of Other Assets, net |
1 | 1 | 10 | 2 | ||||||||||||
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| Operating Income |
1,667 | 1,626 | 4,311 | 4,269 | ||||||||||||
| Other Income and Expenses |
56 | 75 | 187 | 206 | ||||||||||||
| Interest Expense |
280 | 271 | 829 | 816 | ||||||||||||
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| Income Before Income Taxes |
1,443 | 1,430 | 3,669 | 3,659 | ||||||||||||
| Income Tax Expense(b) |
538 | 510 | 1,358 | 1,313 | ||||||||||||
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| Segment Income |
$ | 905 | $ | 920 | $ | 2,311 | $ | 2,346 | ||||||||
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| Depreciation and Amortization |
$ | 691 | $ | 710 | $ | 2,096 | $ | 2,075 | ||||||||
| Duke Energy Carolinas GWh sales |
23,737 | 22,821 | 67,511 | 67,350 | ||||||||||||
| Duke Energy Progress GWh sales |
18,283 | 16,540 | 50,000 | 47,394 | ||||||||||||
| Duke Energy Florida GWh sales |
11,513 | 11,550 | 30,788 | 30,051 | ||||||||||||
| Duke Energy Ohio GWh sales |
6,698 | 6,465 | 19,698 | 18,768 | ||||||||||||
| Duke Energy Indiana GWh sales |
8,784 | 8,224 | 25,217 | 25,553 | ||||||||||||
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| Total GWh sales |
69,015 | 65,600 | 193,214 | 189,116 | ||||||||||||
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| Net Proportional MW Capacity in Operation |
50,033 | 49,471 | ||||||||||||||
| INTERNATIONAL ENERGY |
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| Operating Revenues |
$ | 281 | $ | 366 | $ | 841 | $ | 1,111 | ||||||||
| Operating Expenses |
200 | 275 | 639 | 760 | ||||||||||||
| Gains (Losses) on Sales of Other Assets, net |
— | 2 | (1 | ) | 7 | |||||||||||
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| Operating Income |
81 | 93 | 201 | 358 | ||||||||||||
| Other Income and Expenses |
24 | 43 | 69 | 152 | ||||||||||||
| Interest Expense |
21 | 25 | 66 | 71 | ||||||||||||
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| Income Before Income Taxes |
84 | 111 | 204 | 439 | ||||||||||||
| Income Tax Expense |
14 | 29 | 44 | 74 | ||||||||||||
| Less: Income Attributable to Noncontrolling Interests |
1 | 2 | 3 | 9 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Segment Income |
$ | 69 | $ | 80 | $ | 157 | $ | 356 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Depreciation and Amortization |
$ | 23 | $ | 23 | $ | 69 | $ | 74 | ||||||||
| Sales, GWh |
4,590 | 4,292 | 13,580 | 13,814 | ||||||||||||
| Proportional MW Capacity in Operation |
4,333 | 4,358 | ||||||||||||||
| COMMERCIAL PORTFOLIO |
||||||||||||||||
| Operating Revenues |
$ | 66 | $ | 50 | $ | 214 | $ | 195 | ||||||||
| Operating Expenses(c) |
82 | 87 | 255 | 355 | ||||||||||||
| Gains on Sales of Other Assets, net |
— | — | 6 | — | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Operating Loss |
(16 | ) | (37 | ) | (35 | ) | (160 | ) | ||||||||
| Other Income and Expenses |
(3 | ) | 5 | (3 | ) | 15 | ||||||||||
| Interest Expense |
11 | 14 | 33 | 41 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Loss Before Income Taxes |
(30 | ) | (46 | ) | (71 | ) | (186 | ) | ||||||||
| Income Tax Benefit(d)(e) |
(26 | ) | (29 | ) | (35 | ) | (116 | ) | ||||||||
| Less: Loss Attributable to Noncontrolling Interests |
$ | (1 | ) | $ | — | $ | (1 | ) | $ | — | ||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Segment Loss |
$ | (3 | ) | $ | (17 | ) | $ | (35 | ) | $ | (70 | ) | ||||
|
|
|
|
|
|
|
|
|
|||||||||
| Depreciation and Amortization |
$ | 27 | $ | 24 | $ | 77 | $ | 70 | ||||||||
| Actual Coal-fired Plant Production, GWh |
— | 192 | — | 867 | ||||||||||||
| Actual Renewable Plant Production, GWh |
1,230 | 1,054 | 3,913 | 4,112 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Actual Plant Production, GWh |
1,230 | 1,246 | 3,913 | 4,979 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net Proportional MW Capacity in Operation |
1,634 | 1,698 | ||||||||||||||
| OTHER |
||||||||||||||||
| Operating Revenues |
$ | 17 | $ | 25 | $ | 78 | $ | 79 | ||||||||
| Operating Expenses(f)(g) |
64 | 84 | 177 | 269 | ||||||||||||
| Gains on Sales of Other Assets, net |
3 | 1 | 16 | 2 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Operating Loss |
(44 | ) | (58 | ) | (83 | ) | (188 | ) | ||||||||
| Other Income and Expenses |
(2 | ) | 18 | 8 | 33 | |||||||||||
| Interest Expense |
91 | 101 | 285 | 302 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Loss Before Income Taxes |
(137 | ) | (141 | ) | (360 | ) | (457 | ) | ||||||||
| Income Tax Benefit(h)(i) |
(106 | ) | (50 | ) | (249 | ) | (190 | ) | ||||||||
| Less: Income Attributable to Noncontrolling Interests |
3 | 1 | 8 | 2 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Segment Net Expense |
$ | (34 | ) | $ | (92 | ) | $ | (119 | ) | $ | (269 | ) | ||||
|
|
|
|
|
|
|
|
|
|||||||||
| Depreciation and Amortization |
$ | 33 | $ | 31 | $ | 99 | $ | 86 | ||||||||
| (a) | Includes a pre-tax charge of $85 million for the three and nine months ended September 30, 2015, related to the Edwardsport settlement. |
| (b) | Includes a tax benefit of $34 million for the three and nine months ended September 30, 2015, related to the Edwardsport settlement. |
| (c) | Includes a pre-tax impairment charge of $94 million for the nine months ended September 30, 2014, related to OVEC. |
| (d) | Includes a tax charge of $41 million resulting from the completion of the sale of the nonregulated Midwest generation business for the nine months ended September 30, 2015. |
| (e) | Includes a tax benefit of $35 million for the nine months ended September 30, 2014, related to OVEC. |
| (f) | Includes costs to achieve the Progress merger of $24 million for the three months ended September 30, 2015, and $67 million for the nine months ended September 30, 2015. |
| (g) | Includes costs to achieve the Progress merger of $51 million for the three months ended September 30, 2014, and $165 million for the nine months ended September 30, 2014. |
| (h) | Includes tax benefit related to costs to achieve the Progress merger of $9 million for the three months ended September 30, 2015, and $25 million for the nine months ended September 30, 2015. |
| (i) | Includes tax benefit related to costs to achieve the Progress merger of $21 million for the three months ended September 30, 2014, and $65 million for the nine months ended September 30, 2014. |
12
DUKE ENERGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In millions, except per-share amounts)
| Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| Operating Revenues |
||||||||||||||||
| Regulated electric |
$ | 6,017 | $ | 5,861 | $ | 16,564 | $ | 16,549 | ||||||||
| Nonregulated electric and other |
377 | 449 | 1,157 | 1,403 | ||||||||||||
| Regulated natural gas |
89 | 85 | 416 | 414 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total operating revenues |
6,483 | 6,395 | 18,137 | 18,366 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Operating Expenses |
||||||||||||||||
| Fuel used in electric generation and purchased power - regulated |
2,113 | 2,132 | 5,775 | 5,940 | ||||||||||||
| Fuel used in electric generation and purchased power - nonregulated |
61 | 148 | 283 | 410 | ||||||||||||
| Cost of natural gas and other |
21 | 27 | 158 | 181 | ||||||||||||
| Operation, maintenance and other |
1,426 | 1,409 | 4,274 | 4,254 | ||||||||||||
| Depreciation and amortization |
774 | 788 | 2,341 | 2,305 | ||||||||||||
| Property and other taxes |
293 | 275 | 836 | 936 | ||||||||||||
| Impairment charges |
111 | 1 | 111 | 81 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total operating expenses |
4,799 | 4,780 | 13,778 | 14,107 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Gain on Sales of Other Assets and Other, net |
4 | 4 | 31 | 11 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Operating Income |
1,688 | 1,619 | 4,390 | 4,270 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Other Income and Expenses |
||||||||||||||||
| Equity in earnings of unconsolidated affiliates |
17 | 28 | 53 | 97 | ||||||||||||
| Other income and expenses, net |
57 | 109 | 203 | 293 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total other income and expenses |
74 | 137 | 256 | 390 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Interest Expense |
402 | 405 | 1,208 | 1,212 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income from Continuing Operations before Income Taxes |
1,360 | 1,351 | 3,438 | 3,448 | ||||||||||||
| Income Tax Expense from Continuing Operations |
420 | 460 | 1,118 | 1,081 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income from Continuing Operations |
940 | 891 | 2,320 | 2,367 | ||||||||||||
| (Loss) Income from Discontinued Operations, net of tax |
(5 | ) | 378 | 29 | (578 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net Income |
935 | 1,269 | 2,349 | 1,789 | ||||||||||||
| Less: Net Income Attributable to Noncontrolling Interests |
3 | (5 | ) | 10 | 3 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net Income Attributable to Duke Energy Corporation |
$ | 932 | $ | 1,274 | $ | 2,339 | $ | 1,786 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Earnings Per Share - Basic and Diluted |
||||||||||||||||
| Income from continuing operations attributable to Duke Energy Corporation common stockholders |
||||||||||||||||
| Basic |
$ | 1.36 | $ | 1.25 | $ | 3.31 | $ | 3.33 | ||||||||
| Diluted |
$ | 1.36 | $ | 1.25 | $ | 3.31 | $ | 3.33 | ||||||||
| (Loss) income from discontinued operations attributable to Duke Energy Corporation common stockholders |
||||||||||||||||
| Basic |
$ | (0.01 | ) | $ | 0.55 | $ | 0.05 | $ | (0.81 | ) | ||||||
| Diluted |
$ | (0.01 | ) | $ | 0.55 | $ | 0.05 | $ | (0.81 | ) | ||||||
| Net income attributable to Duke Energy Corporation common stockholders |
||||||||||||||||
| Basic |
$ | 1.35 | $ | 1.80 | $ | 3.36 | $ | 2.52 | ||||||||
| Diluted |
$ | 1.35 | $ | 1.80 | $ | 3.36 | $ | 2.52 | ||||||||
| Weighted-average shares outstanding |
||||||||||||||||
| Basic |
688 | 707 | 696 | 707 | ||||||||||||
| Diluted |
688 | 707 | 696 | 707 | ||||||||||||
13
DUKE ENERGY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
| (in million, except per-share amounts) |
September 30, 2015 |
December 31, 2014 |
||||||
| ASSETS |
||||||||
| Current Assets |
||||||||
| Cash and cash equivalents |
$ | 1,370 | $ | 2,036 | ||||
| Receivables (net of allowance for doubtful accounts of $17 at September 30, 2015 and December 31, 2014) |
722 | 791 | ||||||
| Restricted receivables of variable interest entities (net of allowance for doubtful accounts of $54 at September 30, 2015 and $51 at December 31, 2014) |
2,037 | 1,973 | ||||||
| Inventory |
3,537 | 3,459 | ||||||
| Assets held for sale |
— | 364 | ||||||
| Regulatory assets |
963 | 1,115 | ||||||
| Other |
1,566 | 1,837 | ||||||
|
|
|
|
|
|||||
| Total current assets |
10,195 | 11,575 | ||||||
|
|
|
|
|
|||||
| Investments and Other Assets |
||||||||
| Investments in equity method unconsolidated affiliates |
501 | 358 | ||||||
| Nuclear decommissioning trust funds |
5,566 | 5,546 | ||||||
| Goodwill |
16,312 | 16,321 | ||||||
| Assets held for sale |
— | 2,642 | ||||||
| Other |
3,205 | 3,008 | ||||||
|
|
|
|
|
|||||
| Total investments and other assets |
25,584 | 27,875 | ||||||
|
|
|
|
|
|||||
| Property, Plant and Equipment |
||||||||
| Cost |
110,795 | 104,861 | ||||||
| Accumulated depreciation and amortization |
(37,479 | ) | (34,824 | ) | ||||
| Generation facilities to be retired, net |
460 | 9 | ||||||
|
|
|
|
|
|||||
| Net property, plant and equipment |
73,776 | 70,046 | ||||||
|
|
|
|
|
|||||
| Regulatory Assets and Deferred Debits |
||||||||
| Regulatory assets |
11,290 | 11,042 | ||||||
| Other |
188 | 171 | ||||||
|
|
|
|
|
|||||
| Total regulatory assets and deferred debits |
11,478 | 11,213 | ||||||
|
|
|
|
|
|||||
| Total Assets |
$ | 121,033 | $ | 120,709 | ||||
|
|
|
|
|
|||||
| LIABILITIES AND EQUITY |
||||||||
| Current Liabilities |
||||||||
| Accounts payable |
$ | 2,078 | $ | 2,271 | ||||
| Notes payable and commercial paper |
2,419 | 2,514 | ||||||
| Taxes accrued |
628 | 569 | ||||||
| Interest accrued |
483 | 418 | ||||||
| Current maturities of long-term debt |
2,536 | 2,807 | ||||||
| Liabilities associated with assets held for sale |
— | 262 | ||||||
| Regulatory liabilities |
320 | 204 | ||||||
| Other |
2,052 | 2,188 | ||||||
|
|
|
|
|
|||||
| Total current liabilities |
10,516 | 11,233 | ||||||
|
|
|
|
|
|||||
| Long-term Debt |
37,667 | 37,213 | ||||||
|
|
|
|
|
|||||
| Deferred Credits and Other Liabilities |
||||||||
| Deferred income taxes |
13,999 | 13,423 | ||||||
| Investment tax credits |
416 | 427 | ||||||
| Accrued pension and other post-retirement benefit costs |
1,130 | 1,145 | ||||||
| Liabilities associated with assets held for sale |
— | 35 | ||||||
| Asset retirement obligations |
9,713 | 8,466 | ||||||
| Regulatory liabilities |
6,129 | 6,193 | ||||||
| Other |
1,595 | 1,675 | ||||||
|
|
|
|
|
|||||
| Total deferred credits and other liabilities |
32,982 | 31,364 | ||||||
|
|
|
|
|
|||||
| Commitments and Contingencies |
||||||||
| Equity |
||||||||
| Common stock, $0.001 par value, 2 billion shares authorized; 688 million and 707 million shares outstanding at September 30, 2015 and December 31, 2014, respectively |
1 | 1 | ||||||
| Additional paid-in capital |
37,953 | 39,405 | ||||||
| Retained earnings |
2,656 | 2,012 | ||||||
| Accumulated other comprehensive income |
(778 | ) | (543 | ) | ||||
|
|
|
|
|
|||||
| Total Duke Energy Corporation stockholder’s equity |
39,832 | 40,875 | ||||||
| Noncontrolling interests |
36 | 24 | ||||||
|
|
|
|
|
|||||
| Total equity |
39,868 | 40,899 | ||||||
|
|
|
|
|
|||||
| Total Liabilities and Equity |
$ | 121,033 | $ | 120,709 | ||||
|
|
|
|
|
|||||
14
DUKE ENERGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In millions)
| Nine Months Ended September 30, |
||||||||
| 2015 | 2014 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES |
||||||||
| Net Income |
$ | 2,349 | $ | 1,789 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities |
3,047 | 3,378 | ||||||
|
|
|
|
|
|||||
| Net cash provided by operating activities |
5,396 | 5,167 | ||||||
|
|
|
|
|
|||||
| CASH FLOWS FROM INVESTING ACTIVITIES |
||||||||
| Net cash used in investing activities |
(3,291 | ) | (3,734 | ) | ||||
|
|
|
|
|
|||||
| CASH FLOWS FROM FINANCING ACTIVITIES |
||||||||
| Net cash used in financing activities |
(2,771 | ) | (1,003 | ) | ||||
|
|
|
|
|
|||||
| Net (decrease) increase in cash and cash equivalents |
(666 | ) | 430 | |||||
| Cash and cash equivalents at the beginning of period |
2,036 | 1,501 | ||||||
|
|
|
|
|
|||||
| Cash and cash equivalents at end of period |
$ | 1,370 | $ | 1,931 | ||||
|
|
|
|
|
|||||
15
DUKE ENERGY CORPORATION
EARNINGS VARIANCES
September 2015 QTD vs. Prior Year
| ($ per share) | Regulated Utilities |
International Energy |
Commercial Portfolio |
Other | Consolidated | |||||||||||||||
| 2014 QTD Reported Earnings Per Share, Diluted |
$ | 1.30 | $ | 0.11 | $ | (0.03 | ) | $ | (0.13 | ) | $ | 1.80 | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| 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 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| 2014 QTD Adjusted Earnings Per Share, Diluted |
$ | 1.30 | $ | 0.11 | $ | 0.07 | $ | (0.08 | ) | $ | 1.40 | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Stock Repurchase (a) |
0.03 | 0.01 | — | — | 0.04 | |||||||||||||||
| Weather |
0.09 | — | — | — | 0.09 | |||||||||||||||
| Pricing and Riders (b) |
0.07 | — | — | — | 0.07 | |||||||||||||||
| Wholesale (c) |
0.05 | — | — | — | 0.05 | |||||||||||||||
| Operation and Maintenance, net of recoverables (d) |
(0.06 | ) | — | — | — | (0.06 | ) | |||||||||||||
| Latin America, including Foreign Exchange Rates (e) |
— | (0.01 | ) | — | — | (0.01 | ) | |||||||||||||
| National Methanol Company |
— | (0.01 | ) | — | — | (0.01 | ) | |||||||||||||
| Midwest Generation (f) |
— | — | (0.08 | ) | — | (0.08 | ) | |||||||||||||
| Interest Expense |
(0.01 | ) | — | — | 0.01 | — | ||||||||||||||
| Change in effective tax rates |
(0.04 | ) | — | — | 0.07 | 0.03 | ||||||||||||||
| Other (g) |
(0.03 | ) | — | — | (0.02 | ) | (0.05 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| 2015 QTD Adjusted Earnings Per Share, Diluted |
$ | 1.40 | $ | 0.10 | $ | (0.01 | ) | $ | (0.02 | ) | 1.47 | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Edwardsport Settlement |
(0.08 | ) | — | — | — | (0.08 | ) | |||||||||||||
| Costs to Achieve, Progress Merger |
— | — | — | (0.02 | ) | (0.02 | ) | |||||||||||||
| Ash Basin Settlement |
(0.01 | ) | — | — | — | (0.01 | ) | |||||||||||||
| Discontinued Operations |
(0.01 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| 2015 QTD Reported Earnings Per Share, Diluted |
$ | 1.31 | $ | 0.10 | $ | (0.01 | ) | $ | (0.04 | ) | $ | 1.35 | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
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) | Due to the decrease in common shares outstanding as a result of shares repurchased and retired under the Accelerated Stock Repurchase Program. Weighted-average diluted shares outstanding decreased from 707 million shares for the three months ended September 30, 2014, to 688 million shares for the three months ended September 30, 2015. |
| (b) | Primarily due to prior-year fuel and purchased power cost true-ups that did not recur (+$0.04) and higher energy efficiency and other rider recoveries across jurisdictions (+$0.02). |
| (c) | Primarily due to higher volumes and capacity rates due to favorable weather and the implementation of new contracts, including the new 30-year contract with NCEMPA. |
| (d) | Primarily due to an increase in planned spending, increased costs related to the recent NCEMPA asset purchase and higher storm restoration costs. |
| (e) | Primarily due to weakness in foreign currency exchange rates (-$0.03) and an asset impairment in Ecuador (-$0.02), partially offset by higher results in Brazil (+$0.04) due to lower purchased power costs. |
| (f) | Due to the sale of the nonregulated Midwest generation business. |
| (g) | Amount for Regulated Utilities includes increased depreciation and amortization expense (-$0.01) and an impairment of the Crystal River Unit 3 regulatory asset (-$0.02). |
16
DUKE ENERGY CORPORATION
EARNINGS VARIANCES
September 2015 YTD vs. Prior Year
| ($ per share) | Regulated Utilities |
International Energy |
Commercial Portfolio |
Other | Consolidated | |||||||||||||||
| 2014 YTD Reported Earnings Per Share, Diluted |
$ | 3.32 | $ | 0.50 | $ | (0.10 | ) | $ | (0.38 | ) | $ | 2.52 | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| 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 Adjusted Earnings Per Share, Diluted |
$ | 3.32 | $ | 0.50 | $ | 0.11 | $ | (0.24 | ) | $ | 3.69 | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Stock Repurchase (a) |
0.06 | 0.01 | — | (0.01 | ) | 0.06 | ||||||||||||||
| Weather |
0.11 | — | — | — | 0.11 | |||||||||||||||
| Pricing and Riders (b) |
0.14 | — | — | — | 0.14 | |||||||||||||||
| Volumes |
0.03 | — | — | — | 0.03 | |||||||||||||||
| Wholesale (c) |
0.12 | — | — | — | 0.12 | |||||||||||||||
| Operation and Maintenance, net of recoverables (d) |
(0.19 | ) | — | — | — | (0.19 | ) | |||||||||||||
| Latin America, including Foreign Exchange Rates (e) |
— | (0.25 | ) | — | — | (0.25 | ) | |||||||||||||
| National Methanol Company |
— | (0.04 | ) | — | — | (0.04 | ) | |||||||||||||
| Duke Energy Renewables (f) |
— | — | (0.01 | ) | — | (0.01 | ) | |||||||||||||
| Midwest Generation (g) |
— | — | 0.06 | — | 0.06 | |||||||||||||||
| Interest Expense |
(0.01 | ) | — | — | 0.01 | — | ||||||||||||||
| Change in effective tax rates |
(0.08 | ) | — | (0.01 | ) | 0.14 | 0.05 | |||||||||||||
| Other (h) |
(0.09 | ) | — | (0.01 | ) | (0.01 | ) | (0.11 | ) | |||||||||||
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|||||||||||
| 2015 YTD Adjusted Earnings Per Share, Diluted |
$ | 3.41 | $ | 0.22 | $ | 0.14 | $ | (0.11 | ) | 3.66 | ||||||||||
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|||||||||||
| Edwardsport Settlement |
(0.08 | ) | — | — | — | (0.08 | ) | |||||||||||||
| Costs to Achieve, Progress Merger |
— | — | — | (0.05 | ) | (0.05 | ) | |||||||||||||
| Ash Basin Settlement |
(0.01 | ) | — | — | — | (0.01 | ) | |||||||||||||
| Midwest Generation Operations (offset in Discontinued Operations) |
— | — | (0.14 | ) | — | (0.14 | ) | |||||||||||||
| Discontinued Operations |
(0.06 | ) | (0.02 | ) | ||||||||||||||||
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|||||||||||
| 2015 YTD Reported Earnings Per Share, Diluted |
$ | 3.32 | $ | 0.22 | $ | (0.06 | ) | $ | (0.16 | ) | $ | 3.36 | ||||||||
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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) | Due to the decrease in common shares outstanding as a result of shares repurchased and retired under the Accelerated Stock Repurchase Program. Weighted-average diluted shares outstanding decreased from 707 million shares for the nine months ended September 30, 2014, to 696 million shares for the nine months ended September 30, 2015. |
| (b) | Primarily due to prior-year fuel and purchased power cost true-ups that did not recur (+$0.08), and higher energy efficiency and other rider recoveries in most jurisdictions (+$0.05), partially offset by the impact of a regulatory order that limited the ability to carry forward energy efficiency savings for Duke Energy Ohio (-$0.03). |
| (c) | Primarily due to higher volumes and capacity rates due to favorable weather and the implementation of new contracts, including the new 30-year contract with NCEMPA. |
| (d) | Primarily due to an increase in planned spending, increased costs related to the recent NCEMPA asset purchase and nuclear outage cost levelization, partially offset by lower storm restoration costs. |
| (e) | Primarily due to lower results in Brazil (-$0.09) due to lower sales volumes and higher purchased power costs resulting from ongoing drought conditions and decreased demand, a prior year tax benefit related to the reorganization of the company’s operations in Chile (-$0.07), lower results in Central America (-$0.04) due to lower generation and prices from increased competition and unfavorable foreign currency exchange rates (-$0.03). |
| (f) | Primarily due to lower wind results. |
| (g) | Primarily due to higher capacity revenues, improved generation margins and the suspension of depreciation as a result of held for sale status prior to the sale of the nonregulated Midwest generation business. |
| (h) | Amount for Regulated Utilities includes increased depreciation and amortization expense (-$0.04) due to higher depreciable base and an impairment of the Crystal River Unit 3 regulatory asset (-$0.02), partially offset by higher AFUDC-equity (+$0.03). |
17
Regulated Utilities
Quarterly Highlights
Supplemental Regulated Utilities Electric Information
September 2015
| Three Months Ended September 30 | Nine Months Ended September 30 | |||||||||||||||||||||||||||||||
| 2015 | 2014 | % Inc. (Dec.) |
% Inc. (Dec.) Weather Normal (2) |
2015 | 2014 | % Inc. (Dec.) |
% Inc. (Dec.) Weather Normal (2) |
|||||||||||||||||||||||||
| GWH Sales (1) |
||||||||||||||||||||||||||||||||
| Residential |
24,176 | 22,960 | 5.3 | % | 1.0 | % | 66,195 | 65,064 | 1.7 | % | 0.3 | % | ||||||||||||||||||||
| General Service |
22,047 | 21,494 | 2.6 | % | — | % | 59,124 | 58,366 | 1.3 | % | 0.4 | % | ||||||||||||||||||||
| Industrial |
14,001 | 13,837 | 1.2 | % | (0.4 | )% | 39,370 | 38,973 | 1.0 | % | 0.7 | % | ||||||||||||||||||||
| Other Energy Sales |
149 | 152 | (2.0 | %) | 450 | 455 | (1.1 | %) | ||||||||||||||||||||||||
| Unbilled Sales |
(1,808 | ) | (1,500 | ) | (20.5 | %) | n/a | (476 | ) | (920 | ) | 48.3 | % | n/a | ||||||||||||||||||
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|
|||||||||||||||||
| Total Retail Sales |
58,565 | 56,943 | 2.8 | % | 0.3 | % | 164,663 | 161,938 | 1.7 | % | 0.4 | % | ||||||||||||||||||||
| Special Sales |
10,450 | 8,657 | 20.7 | % | 28,551 | 27,178 | 5.1 | % | ||||||||||||||||||||||||
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|
|||||||||||||||||||||
| Total Consolidated Electric Sales - Regulated Utilities |
69,015 | 65,600 | 5.2 | % | 193,214 | 189,116 | 2.2 | % | ||||||||||||||||||||||||
| Average Number of Customers (Electric) |
||||||||||||||||||||||||||||||||
| Residential |
6,365,092 | 6,281,374 | 1.3 | % | 6,351,973 | 6,271,001 | 1.3 | % | ||||||||||||||||||||||||
| General Service |
954,659 | 944,484 | 1.1 | % | 951,350 | 941,839 | 1.0 | % | ||||||||||||||||||||||||
| Industrial |
18,105 | 18,260 | (0.8 | %) | 18,150 | 18,315 | (0.9 | %) | ||||||||||||||||||||||||
| Other Energy Sales |
23,113 | 22,810 | 1.3 | % | 23,024 | 22,579 | 2.0 | % | ||||||||||||||||||||||||
|
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|
|
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|
|
|
|
|||||||||||||||||||||
| Total Regular Sales |
7,360,969 | 7,266,928 | 1.3 | % | 7,344,497 | 7,253,734 | 1.3 | % | ||||||||||||||||||||||||
| Special Sales |
64 | 62 | 3.2 | % | 63 | 62 | 1.6 | % | ||||||||||||||||||||||||
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|
|
|
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|
|||||||||||||||||||||
| Total Average Number of Customers - Regulated Utilities |
7,361,033 | 7,266,990 | 1.3 | % | 7,344,560 | 7,253,796 | 1.3 | % | ||||||||||||||||||||||||
| Heating and Cooling Degree Days |
||||||||||||||||||||||||||||||||
| Carolinas - Actual |
||||||||||||||||||||||||||||||||
| Heating Degree Days |
3 | 10 | (70.0 | %) | 2,057 | 2,135 | (3.7 | %) | ||||||||||||||||||||||||
| Cooling Degree Days |
1,108 | 942 | 17.6 | % | 1,744 | 1,535 | 13.6 | % | ||||||||||||||||||||||||
| Variance from Normal |
||||||||||||||||||||||||||||||||
| Heating Degree Days |
(57.1 | %) | 25.0 | % | n/a | 11.3 | % | 15.4 | % | n/a | ||||||||||||||||||||||
| Cooling Degree Days |
4.3 | % | (11.2 | %) | n/a | 7.7 | % | (4.7 | %) | n/a | ||||||||||||||||||||||
| Midwest - Actual |
||||||||||||||||||||||||||||||||
| Heating Degree Days |
23 | 73 | (68.5 | %) | 3,523 | 3,829 | (8.0 | %) | ||||||||||||||||||||||||
| Cooling Degree Days |
704 | 568 | 23.9 | % | 1,082 | 918 | 17.9 | % | ||||||||||||||||||||||||
| Variance from Normal |
||||||||||||||||||||||||||||||||
| Heating Degree Days |
(48.9 | %) | 46.0 | % | n/a | 13.7 | % | 22.7 | % | n/a | ||||||||||||||||||||||
| Cooling Degree Days |
(13.1 | %) | (29.4 | %) | n/a | (8.5 | %) | (20.9 | %) | n/a | ||||||||||||||||||||||
| Florida - Actual |
||||||||||||||||||||||||||||||||
| Heating Degree Days |
— | — | — | % | 373 | 418 | (10.8 | %) | ||||||||||||||||||||||||
| Cooling Degree Days |
1,487 | 1,497 | (0.7 | %) | 2,977 | 2,702 | 10.2 | % | ||||||||||||||||||||||||
| Variance from Normal |
||||||||||||||||||||||||||||||||
| Heating Degree Days |
— | % | — | % | n/a | (6.2 | %) | 0.5 | % | n/a | ||||||||||||||||||||||
| Cooling Degree Days |
(1.6 | %) | (0.7 | %) | n/a | 8.8 | % | (1.3 | %) | 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). |
18
Duke Energy Carolinas
Quarterly Highlights
Supplemental Regulated Utilities Electric Information
September 2015
| Three Months Ended September 30 | Nine Months Ended September 30 | |||||||||||||||||||||||||||||||
| 2015 | 2014 | % Inc. (Dec.) |
% Inc. (Dec.) Weather Normal (2) |
2015 | 2014 | % Inc. (Dec.) |
% Inc. (Dec.) Weather Normal (2) |
|||||||||||||||||||||||||
| GWH Sales (1) |
||||||||||||||||||||||||||||||||
| Residential |
8,213 | 7,501 | 9.5 | % | 22,445 | 21,937 | 2.3 | % | ||||||||||||||||||||||||
| General Service |
8,273 | 7,951 | 4.0 | % | 22,074 | 21,685 | 1.8 | % | ||||||||||||||||||||||||
| Industrial |
6,041 | 5,849 | 3.3 | % | 16,730 | 16,230 | 3.1 | % | ||||||||||||||||||||||||
| Other Energy Sales |
76 | 77 | (1.3 | %) | 229 | 226 | 1.3 | % | ||||||||||||||||||||||||
| Unbilled Sales |
(1,047 | ) | (677 | ) | (54.7 | %) | (693 | ) | (492 | ) | (40.9 | %) | ||||||||||||||||||||
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|
|
|||||||||||||||||
| Total Regular Electric Sales |
21,556 | 20,701 | 4.1 | % | (0.3 | )% | 60,785 | 59,586 | 2.0 | % | 0.4 | % | ||||||||||||||||||||
| Special Sales |
2,181 | 2,120 | 2.9 | % | 6,726 | 7,764 | (13.4 | %) | ||||||||||||||||||||||||
|
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|
|
|
|
|
|||||||||||||||||||||
| Total Consolidated Electric Sales - Duke Energy Carolinas |
23,737 | 22,821 | 4.0 | % | 67,511 | 67,350 | 0.2 | % | ||||||||||||||||||||||||
| Average Number of Customers |
||||||||||||||||||||||||||||||||
| Residential |
2,120,091 | 2,091,669 | 1.4 | % | 2,113,735 | 2,085,703 | 1.3 | % | ||||||||||||||||||||||||
| General Service |
346,039 | 342,340 | 1.1 | % | 344,699 | 341,246 | 1.0 | % | ||||||||||||||||||||||||
| Industrial |
6,414 | 6,515 | (1.6 | %) | 6,444 | 6,524 | (1.2 | %) | ||||||||||||||||||||||||
| Other Energy Sales |
15,095 | 14,862 | 1.6 | % | 15,014 | 14,617 | 2.7 | % | ||||||||||||||||||||||||
|
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|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Total Regular Sales |
2,487,639 | 2,455,386 | 1.3 | % | 2,479,892 | 2,448,090 | 1.3 | % | ||||||||||||||||||||||||
| Special Sales |
24 | 26 | (7.7 | %) | 25 | 25 | — | % | ||||||||||||||||||||||||
|
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|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Total Average Number of Customers - Duke Energy Carolinas |
2,487,663 | 2,455,412 | 1.3 | % | 2,479,917 | 2,448,115 | 1.3 | % | ||||||||||||||||||||||||
| Heating and Cooling Degree Days |
||||||||||||||||||||||||||||||||
| Actual |
||||||||||||||||||||||||||||||||
| Heating Degree Days |
5 | 12 | (58.3 | %) | 2,109 | 2,235 | (5.6 | %) | ||||||||||||||||||||||||
| Cooling Degree Days |
1,085 | 884 | 22.7 | % | 1,709 | 1,441 | 18.6 | % | ||||||||||||||||||||||||
| Variance from Normal |
||||||||||||||||||||||||||||||||
| Heating Degree Days |
(51.6 | %) | 20.0 | % | n/a | 9.4 | % | 16.0 | % | n/a | ||||||||||||||||||||||
| Cooling Degree Days |
6.2 | % | (13.3 | %) | n/a | 9.8 | % | (6.7 | %) | 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). |
19
Duke Energy Progress
Quarterly Highlights
Supplemental Regulated Utilities Electric Information
September 2015
| Three Months Ended September 30 | Nine Months Ended September 30 | |||||||||||||||||||||||||||||||
| 2015 | 2014 | % Inc. (Dec.) |
% Inc. (Dec.) Weather Normal (2) |
2015 | 2014 | % Inc. (Dec.) |
% Inc. (Dec.) Weather Normal (2) |
|||||||||||||||||||||||||
| GWH Sales (1) |
||||||||||||||||||||||||||||||||
| Residential |
5,107 | 4,736 | 7.8 | % | 14,547 | 14,275 | 1.9 | % | ||||||||||||||||||||||||
| General Service |
4,563 | 4,357 | 4.7 | % | 12,000 | 11,767 | 2.0 | % | ||||||||||||||||||||||||
| Industrial |
2,788 | 2,819 | (1.1 | %) | 7,790 | 7,816 | (0.3 | %) | ||||||||||||||||||||||||
| Other Energy Sales |
26 | 29 | (10.3 | %) | 81 | 88 | (8.0 | %) | ||||||||||||||||||||||||
| Unbilled Sales |
(481 | ) | (291 | ) | (65.3 | %) | (352 | ) | (318 | ) | (10.7 | %) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total Regular Electric Sales |
12,003 | 11,650 | 3.0 | % | 0.3 | % | 34,066 | 33,628 | 1.3 | % | 0.4 | % | ||||||||||||||||||||
| Special Sales |
6,280 | 4,890 | 28.4 | % | 15,934 | 13,766 | 15.7 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Total Consolidated Electric Sales - Duke Energy Progress |
18,283 | 16,540 | 10.5 | % | 50,000 | 47,394 | 5.5 | % | ||||||||||||||||||||||||
| Average Number of Customers |
||||||||||||||||||||||||||||||||
| Residential |
1,276,474 | 1,258,769 | 1.4 | % | 1,272,450 | 1,254,632 | 1.4 | % | ||||||||||||||||||||||||
| General Service |
227,015 | 223,986 | 1.4 | % | 225,721 | 222,980 | 1.2 | % | ||||||||||||||||||||||||
| Industrial |
4,204 | 4,266 | (1.5 | %) | 4,221 | 4,278 | (1.3 | %) | ||||||||||||||||||||||||
| Other Energy Sales |
1,683 | 1,705 | (1.3 | %) | 1,687 | 1,729 | (2.4 | %) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Total Regular Sales |
1,509,376 | 1,488,726 | 1.4 | % | 1,504,079 | 1,483,619 | 1.4 | % | ||||||||||||||||||||||||
| Special Sales |
15 | 15 | — | % | 15 | 15 | — | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Total Average Number of Customers - Duke Energy Progress |
1,509,391 | 1,488,741 | 1.4 | % | 1,504,094 | 1,483,634 | 1.4 | % | ||||||||||||||||||||||||
| Heating and Cooling Degree Days |
||||||||||||||||||||||||||||||||
| Actual |
||||||||||||||||||||||||||||||||
| Heating Degree Days |
1 | 7 | (85.7 | %) | 2,004 | 2,034 | (1.5 | %) | ||||||||||||||||||||||||
| Cooling Degree Days |
1,131 | 1,000 | 13.1 | % | 1,779 | 1,629 | 9.2 | % | ||||||||||||||||||||||||
| Variance from Normal |
||||||||||||||||||||||||||||||||
| Heating Degree Days |
(78.3 | %) | 16.7 | % | n/a | 13.3 | % | 14.7 | % | n/a | ||||||||||||||||||||||
| Cooling Degree Days |
2.7 | % | (9.3 | %) | n/a | 5.8 | % | (2.9 | %) | 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). |
20
Duke Energy Florida
Quarterly Highlights
Supplemental Regulated Utilities Electric Information
September 2015
| Three Months Ended September 30 | Nine Months Ended September 30 | |||||||||||||||||||||||||||||||
| 2015 | 2014 | % Inc. (Dec.) |
% Inc. (Dec.) Weather Normal (2) |
2015 | 2014 | % Inc. (Dec.) |
% Inc. (Dec.) Weather Normal (2) |
|||||||||||||||||||||||||
| GWH Sales (1) |
||||||||||||||||||||||||||||||||
| Residential |
6,152 | 6,207 | (0.9 | %) | 15,200 | 14,654 | 3.7 | % | ||||||||||||||||||||||||
| General Service |
4,309 | 4,320 | (0.3 | %) | 11,401 | 11,270 | 1.2 | % | ||||||||||||||||||||||||
| Industrial |
861 | 840 | 2.5 | % | 2,442 | 2,444 | (0.1 | %) | ||||||||||||||||||||||||
| Other Energy Sales |
6 | 6 | — | % | 18 | 18 | — | % | ||||||||||||||||||||||||
| Unbilled Sales |
(226 | ) | (270 | ) | 16.3 | % | 567 | 461 | 23.0 | % | ||||||||||||||||||||||
|
|
|
|
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|
|
|
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|
|
|
|
|
|
|||||||||||||||||
| Total Regular Electric Sales |
11,102 | 11,103 | — | % | 1.4 | % | 29,628 | 28,847 | 2.7 | % | 1.1 | % | ||||||||||||||||||||
| Special Sales |
411 | 447 | (8.1 | %) | 1,160 | 1,204 | (3.7 | %) | ||||||||||||||||||||||||
|
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|
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|
|||||||||||||||||||||
| Total Electric Sales - Duke Energy Florida |
11,513 | 11,550 | (0.3 | %) | 30,788 | 30,051 | 2.5 | % | ||||||||||||||||||||||||
| Average Number of Customers |
||||||||||||||||||||||||||||||||
| Residential |
1,526,065 | 1,502,074 | 1.6 | % | 1,521,345 | 1,497,535 | 1.6 | % | ||||||||||||||||||||||||
| General Service |
193,645 | 191,274 | 1.2 | % | 193,161 | 190,897 | 1.2 | % | ||||||||||||||||||||||||
| Industrial |
2,249 | 2,259 | (0.4 | %) | 2,250 | 2,280 | (1.3 | %) | ||||||||||||||||||||||||
| Other Energy Sales |
1,534 | 1,547 | (0.8 | %) | 1,537 | 1,553 | (1.0 | %) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Total Regular Sales |
1,723,493 | 1,697,154 | 1.6 | % | 1,718,293 | 1,692,265 | 1.5 | % | ||||||||||||||||||||||||
| Special Sales |
14 | 14 | — | % | 14 | 15 | (6.7 | %) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Total Average Number of Customers - Duke Energy Florida |
1,723,507 | 1,697,168 | 1.6 | % | 1,718,307 | 1,692,280 | 1.5 | % | ||||||||||||||||||||||||
| Heating and Cooling Degree Days |
||||||||||||||||||||||||||||||||
| Actual |
||||||||||||||||||||||||||||||||
| Heating Degree Days |
— | — | — | % | 373 | 418 | (10.8 | %) | ||||||||||||||||||||||||
| Cooling Degree Days |
1,487 | 1,497 | (0.7 | %) | 2,977 | 2,702 | 10.2 | % | ||||||||||||||||||||||||
| Variance from Normal |
||||||||||||||||||||||||||||||||
| Heating Degree Days |
— | % | — | % | n/a | (6.2 | %) | 0.5 | % | n/a | ||||||||||||||||||||||
| Cooling Degree Days |
(1.6 | %) | (0.7 | %) | n/a | 8.8 | % | (1.3 | %) | 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). |
21
Duke Energy Ohio
Quarterly Highlights
Supplemental Regulated Utilities Electric Information
September 2015
| Three Months Ended September 30 | Nine Months Ended September 30 | |||||||||||||||||||||||||||||||
| 2015 | 2014 | % Inc. (Dec.) |
% Inc. (Dec.) Weather Normal (2) |
2015 | 2014 | % Inc. (Dec.) |
% Inc. (Dec.) Weather Normal (2) |
|||||||||||||||||||||||||
| GWH Sales (1) |
||||||||||||||||||||||||||||||||
| Residential |
2,399 | 2,332 | 2.9 | % | 6,891 | 6,924 | (0.5 | %) | ||||||||||||||||||||||||
| General Service |
2,603 | 2,602 | — | % | 7,281 | 7,273 | 0.1 | % | ||||||||||||||||||||||||
| Industrial |
1,580 | 1,571 | 0.6 | % | 4,507 | 4,501 | 0.1 | % | ||||||||||||||||||||||||
| Other Energy Sales |
28 | 28 | — | % | 82 | 84 | (2.4 | %) | ||||||||||||||||||||||||
| Unbilled Sales |
(57 | ) | (160 | ) | 64.4 | % | (8 | ) | (242 | ) | 96.7 | % | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total Regular Electric Sales |
6,553 | 6,373 | 2.8 | % | (0.5 | %) | 18,753 | 18,540 | 1.1 | % | — | % | ||||||||||||||||||||
| Special Sales |
145 | 92 | 57.6 | % | 945 | 228 | 314.5 | % | ||||||||||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Total Electric Sales - Duke Energy Ohio |
6,698 | 6,465 | 3.6 | % | 19,698 | 18,768 | 5.0 | % | ||||||||||||||||||||||||
| Average Number of Customers |
||||||||||||||||||||||||||||||||
| Residential |
744,927 | 739,300 | 0.8 | % | 746,183 | 741,316 | 0.7 | % | ||||||||||||||||||||||||
| General Service |
87,234 | 86,456 | 0.9 | % | 87,203 | 86,402 | 0.9 | % | ||||||||||||||||||||||||
| Industrial |
2,525 | 2,526 | — | % | 2,531 | 2,522 | 0.4 | % | ||||||||||||||||||||||||
| Other Energy Sales |
3,223 | 3,184 | 1.2 | % | 3,215 | 3,175 | 1.3 | % | ||||||||||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Total Regular Sales |
837,909 | 831,466 | 0.8 | % | 839,132 | 833,415 | 0.7 | % | ||||||||||||||||||||||||
| Special Sales |
1 | 1 | — | % | 1 | 1 | — | % | ||||||||||||||||||||||||
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|
|||||||||||||||||||||
| Total Average Number of Customers - Duke Energy Ohio |
837,910 | 831,467 | 0.8 | % | 839,133 | 833,416 | 0.7 | % | ||||||||||||||||||||||||
| Heating and Cooling Degree Days |
||||||||||||||||||||||||||||||||
| Actual |
||||||||||||||||||||||||||||||||
| Heating Degree Days |
21 | 58 | (63.8 | %) | 3,331 | 3,528 | (5.6 | %) | ||||||||||||||||||||||||
| Cooling Degree Days |
703 | 629 | 11.8 | % | 1,094 | 1,011 | 8.2 | % | ||||||||||||||||||||||||
| Variance from Normal |
||||||||||||||||||||||||||||||||
| Heating Degree Days |
(50.0 | %) | 26.1 | % | n/a | 11.3 | % | 16.9 | % | n/a | ||||||||||||||||||||||
| Cooling Degree Days |
(13.6 | %) | (22.3 | %) | n/a | (7.5 | %) | (12.8 | %) | 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). |
22
Duke Energy Ohio
Quarterly Highlights
Supplemental Regulated Utilities Gas Information
September 2015
| Three Months Ended September 30 | Nine Months Ended September 30 | |||||||||||||||||||||||||||||||
| 2015 | 2014 | % Inc. (Dec.) |
% Inc. (Dec.) Weather Normal (2) |
2015 | 2014 | % Inc. (Dec.) |
% Inc. (Dec.) Weather Normal (2) |
|||||||||||||||||||||||||
| MCF Sales (1) |
||||||||||||||||||||||||||||||||
| Residential |
1,755,562 | 1,819,907 | (3.5 | %) | 28,986,782 | 31,354,403 | (7.6 | %) | ||||||||||||||||||||||||
| General Service |
1,838,773 | 1,711,398 | 7.4 | % | 18,463,853 | 19,335,821 | (4.5 | %) | ||||||||||||||||||||||||
| Industrial |
1,192,994 | 1,104,399 | 8.0 | % | 5,604,282 | 5,425,634 | 3.3 | % | ||||||||||||||||||||||||
| Other Energy Sales |
4,439,138 | 4,197,435 | 5.8 | % | 15,194,003 | 15,616,728 | (2.7 | %) | ||||||||||||||||||||||||
| Unbilled Sales |
24,000 | (125,000 | ) | 119.2 | % | (3,221,000 | ) | (5,027,000 | ) | 35.9 | % | |||||||||||||||||||||
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|
|||||||||||||||||
| Total Gas Sales - Duke Energy Ohio |
9,250,467 | 8,708,139 | 6.2 | % | 6.9 | % | 65,027,920 | 66,705,586 | (2.5 | %) | (0.4 | %) | ||||||||||||||||||||
| Average Number of Customers |
||||||||||||||||||||||||||||||||
| Residential |
471,005 | 468,840 | 0.5 | % | 474,704 | 472,600 | 0.4 | % | ||||||||||||||||||||||||
| General Service |
41,294 | 41,505 | (0.5 | %) | 43,212 | 43,379 | (0.4 | %) | ||||||||||||||||||||||||
| Industrial |
1,544 | 1,558 | (0.9 | %) | 1,618 | 1,627 | (0.6 | %) | ||||||||||||||||||||||||
| Other Energy Sales |
142 | 149 | (4.7 | %) | 143 | 154 | (7.1 | %) | ||||||||||||||||||||||||
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|
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|
|
|
|
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|
|
|||||||||||||||||||||
| Total Average Number of Gas Customers - Duke Energy Ohio |
513,985 | 512,052 | 0.4 | % | 519,677 | 517,760 | 0.4 | % | ||||||||||||||||||||||||
| Heating and Cooling Degree Days |
||||||||||||||||||||||||||||||||
| Actual |
||||||||||||||||||||||||||||||||
| Heating Degree Days |
21 | 58 | (63.8 | %) | 3,331 | 3,528 | (5.6 | %) | ||||||||||||||||||||||||
| Cooling Degree Days |
703 | 629 | 11.8 | % | 1,094 | 1,011 | 8.2 | % | ||||||||||||||||||||||||
| Variance from Normal |
||||||||||||||||||||||||||||||||
| Heating Degree Days |
(50.0 | %) | 26.1 | % | n/a | 11.3 | % | 16.9 | % | n/a | ||||||||||||||||||||||
| Cooling Degree Days |
(13.6 | %) | (22.3 | %) | n/a | (7.5 | %) | (12.8 | %) | 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). |
23
Duke Energy Indiana
Quarterly Highlights
Supplemental Regulated Utilities Electric Information
September 2015
| Three Months Ended September 30 | Nine Months Ended September 30 | |||||||||||||||||||||||||||||||
| 2015 | 2014 | % Inc. (Dec.) |
% Inc. (Dec.) Weather Normal (2) |
2015 | 2014 | % Inc. (Dec.) |
% Inc. (Dec.) Weather Normal (2) |
|||||||||||||||||||||||||
| GWH Sales (1) |
||||||||||||||||||||||||||||||||
| Residential |
2,305 | 2,184 | 5.5 | % | 7,112 | 7,274 | (2.2 | %) | ||||||||||||||||||||||||
| General Service |
2,299 | 2,264 | 1.5 | % | 6,368 | 6,371 | — | % | ||||||||||||||||||||||||
| Industrial |
2,731 | 2,758 | (1.0 | %) | 7,901 | 7,982 | (1.0 | %) | ||||||||||||||||||||||||
| Other Energy Sales |
13 | 12 | 8.3 | % | 40 | 39 | 2.6 | % | ||||||||||||||||||||||||
| Unbilled Sales |
3 | (102 | ) | 102.9 | % | 10 | (329 | ) | 103.0 | % | ||||||||||||||||||||||
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|
|
|||||||||||||||||
| Total Regular Electric Sales |
7,351 | 7,116 | 3.3 | % | 1.2 | % | 21,431 | 21,337 | 0.4 | % | (0.2 | %) | ||||||||||||||||||||
| Special Sales |
1,433 | 1,108 | 29.3 | % | 3,786 | 4,216 | (10.2 | %) | ||||||||||||||||||||||||
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|
|||||||||||||||||||||
| Total Electric Sales - Duke Energy Indiana |
8,784 | 8,224 | 6.8 | % | 25,217 | 25,553 | (1.3 | %) | ||||||||||||||||||||||||
| Average Number of Customers |
||||||||||||||||||||||||||||||||
| Residential |
697,535 | 689,562 | 1.2 | % | 698,260 | 691,815 | 0.9 | % | ||||||||||||||||||||||||
| General Service |
100,726 | 100,428 | 0.3 | % | 100,566 | 100,314 | 0.3 | % | ||||||||||||||||||||||||
| Industrial |
2,713 | 2,694 | 0.7 | % | 2,704 | 2,711 | (0.3 | %) | ||||||||||||||||||||||||
| Other Energy Sales |
1,578 | 1,512 | 4.4 | % | 1,571 | 1,505 | 4.4 | % | ||||||||||||||||||||||||
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|
|
|||||||||||||||||||||
| Total Regular Sales |
802,552 | 794,196 | 1.1 | % | 803,101 | 796,345 | 0.8 | % | ||||||||||||||||||||||||
| Special Sales |
10 | 6 | 66.7 | % | 8 | 6 | 33.3 | % | ||||||||||||||||||||||||
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|
|||||||||||||||||||||
| Total Average Number of Customers - Duke Energy Indiana |
802,562 | 794,202 | 1.1 | % | 803,109 | 796,351 | 0.8 | % | ||||||||||||||||||||||||
| Heating and Cooling Degree Days |
||||||||||||||||||||||||||||||||
| Actual |
||||||||||||||||||||||||||||||||
| Heating Degree Days |
26 | 88 | (70.5 | %) | 3,715 | 4,130 | (10.0 | %) | ||||||||||||||||||||||||
| Cooling Degree Days |
706 | 507 | 39.3 | % | 1,070 | 825 | 29.7 | % | ||||||||||||||||||||||||
| Variance from Normal |
||||||||||||||||||||||||||||||||
| Heating Degree Days |
(45.7 | %) | 66.0 | % | n/a | 15.9 | % | 28.1 | % | n/a | ||||||||||||||||||||||
| Cooling Degree Days |
(12.6 | %) | 36.6 | % | n/a | (9.5 | %) | (28.9 | %) | 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). |
24
DUKE ENERGY CORPORATION
ADJUSTED TO REPORTED EARNINGS RECONCILIATION
Three Months Ended September 30, 2015
(Dollars in millions, except per-share amounts)
| Special Items | ||||||||||||||||||||||||||||||||
| Adjusted Earnings |
Costs to Achieve, Progress Merger |
Edwardsport Settlement |
Ash Basin Settlement |
Economic Hedges (Mark-to- Market) * |
Discontinued Operations |
Total Adjustments |
Reported Earnings |
|||||||||||||||||||||||||
| SEGMENT INCOME |
||||||||||||||||||||||||||||||||
| Regulated Utilities |
$ | 965 | $ | — | $ | (56 | )B | $ | (4 | )C | $ | — | $ | — | $ | (60 | ) | $ | 905 | |||||||||||||
| International Energy |
69 | — | — | — | — | — | — | 69 | ||||||||||||||||||||||||
| Commercial Portfolio |
(4 | ) | — | — | — | 1 | D | — | 1 | (3 | ) | |||||||||||||||||||||
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|||||||||||||||||
| Total Reportable Segment Income |
1,030 | — | (56 | ) | (4 | ) | 1 | — | (59 | ) | 971 | |||||||||||||||||||||
| Other |
(19 | ) | (15 | )A | — | — | — | — | (15 | ) | (34 | ) | ||||||||||||||||||||
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|||||||||||||||||
| Total Reportable Segment Income and Other Net Expense |
1,011 | (15 | ) | (56 | ) | (4 | ) | 1 | — | (74 | ) | 937 | ||||||||||||||||||||
| Discontinued Operations |
— | — | — | — | — | (5 | )E | (5 | ) | (5 | ) | |||||||||||||||||||||
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|
|||||||||||||||||
| Net Income (Loss) Attributable to Duke Energy Corporation |
$ | 1,011 | $ | (15 | ) | $ | (56 | ) | $ | (4 | ) | $ | 1 | $ | (5 | ) | $ | (79 | ) | $ | 932 | |||||||||||
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|
|||||||||||||||||
| EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, BASIC |
$ | 1.47 | $ | (0.02 | ) | $ | (0.08 | ) | $ | (0.01 | ) | $ | — | $ | (0.01 | ) | $ | (0.12 | ) | $ | 1.35 | |||||||||||
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|||||||||||||||||
| EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, DILUTED |
$ | 1.47 | $ | (0.02 | ) | $ | (0.08 | ) | $ | (0.01 | ) | $ | — | $ | (0.01 | ) | $ | (0.12 | ) | $ | 1.35 | |||||||||||
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|||||||||||||||||
| A - | Net of $9 million tax benefit. Recorded within Operating Expenses on the Condensed Consolidated Statements of Operations. |
| B - | Net of $34 million tax benefit. $85 million recorded within Impairment charges and $5 million recorded within Other income and expenses, net on the Condensed Consolidated Statements of Operations. |
| C - | Net of $3 million tax benefit. Recorded within Operation, maintenance and other on the Condensed Consolidated Statements of Operations. |
| D - | Recorded within Operating Revenues on the Condensed Consolidated Statements of Operations. |
| E - | Recorded in (Loss) Income From Discontinued Operations, net of tax on the Consolidated Statements of Operations. |
Weighted Average Shares (reported and adjusted) - in millions
| Basic |
688 | |||
| Diluted |
688 |
| * | 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 Portfolio segment. 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. 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. |
25
DUKE ENERGY CORPORATION
ADJUSTED TO REPORTED EARNINGS RECONCILIATION
Nine Months Ended September 30, 2015
(Dollars in millions, except per-share amounts)
| Special Items | ||||||||||||||||||||||||||||||||||||
| Adjusted Earnings |
Costs to Achieve, Progress Merger |
Edwardsport Settlement |
Midwest Generation Operations |
Ash Basin Settlement |
Economic Hedges (Mark-to- Market) * |
Discontinued Operations |
Total Adjustments |
Reported Earnings |
||||||||||||||||||||||||||||
| SEGMENT INCOME |
||||||||||||||||||||||||||||||||||||
| Regulated Utilities |
$ | 2,371 | $ | — | $ | (56 | )B | $ | — | $ | (4 | )D | $ | — | $ | — | $ | (60 | ) | $ | 2,311 | |||||||||||||||
| International Energy |
157 | — | — | — | — | — | — | — | 157 | |||||||||||||||||||||||||||
| Commercial Portfolio |
99 | — | — | (94 | )C | — | 1 | E | (41 | )F | (134 | ) | (35 | ) | ||||||||||||||||||||||
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|||||||||||||||||||
| Total Reportable Segment Income |
2,627 | — | (56 | ) | (94 | ) | (4 | ) | 1 | (41 | ) | (194 | ) | 2,433 | ||||||||||||||||||||||
| Other |
(77 | ) | (42 | )A | — | — | — | — | — | (42 | ) | (119 | ) | |||||||||||||||||||||||
| Intercompany Eliminations |
— | — | — | — | — | (4 | )G | (4 | ) | (4 | ) | |||||||||||||||||||||||||
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|||||||||||||||||||
| Total Reportable Segment Income and Other Net Expense |
2,550 | (42 | ) | (56 | ) | (94 | ) | (4 | ) | 1 | (45 | ) | (240 | ) | 2,310 | |||||||||||||||||||||
| Discontinued Operations |
— | — | — | 94 | C | — | — | (65 | )H | 29 | 29 | |||||||||||||||||||||||||
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|||||||||||||||||||
| Net Income Attributable to Duke Energy Corporation |
$ | 2,550 | $ | (42 | ) | $ | (56 | ) | $ | — | $ | (4 | ) | $ | 1 | $ | (110 | ) | $ | (211 | ) | $ | 2,339 | |||||||||||||
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|||||||||||||||||||
| EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, BASIC |
$ | 3.66 | $ | (0.05 | ) | $ | (0.08 | ) | $ | — | $ | (0.01 | ) | $ | — | $ | (0.16 | ) | $ | (0.30 | ) | $ | 3.36 | |||||||||||||
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|||||||||||||||||||
| EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, DILUTED |
$ | 3.66 | $ | (0.05 | ) | $ | (0.08 | ) | $ | — | $ | (0.01 | ) | $ | — | $ | (0.16 | ) | $ | (0.30 | ) | $ | 3.36 | |||||||||||||
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|||||||||||||||||||
| A - | Net of $25 million tax benefit. Recorded within Operating Expenses on the Condensed Consolidated Statements of Operations. |
| B - | Net of $34 million tax benefit. $85 million recorded within Impairment charges and $5 million recorded within Other income and expenses, net on the Condensed Consolidated Statements of Operations. |
| C - | Operating results of the nonregulated Midwest generation business that had been classified from discontinued operations after adjustment for special items and economic hedges (net of $53 million tax benefit). |
| D - | Net of $3 million tax benefit. Recorded within Operation, maintenance and other on the Condensed Consolidated Statements of Operations. |
| E - | Recorded within Operating Revenues on the Condensed Consolidated Statements of Operations. |
| F - | State tax expense resulting from the completion of the sale of the nonregulated Midwest generation business. |
| G - | Reverses the impact on eliminations of classifying the nonregulated Midwest generation business as discontinued operations. |
| H - | Recorded in (Loss) Income From Discontinued Operations, net of tax on the Condensed Consolidated Statements of Operations, and includes the impact of a litigation reserve related to the nonregulated Midwest generation business. |
Weighted Average Shares (reported and adjusted) - in millions
| Basic |
696 | |||
| Diluted |
696 |
| * | 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 Portfolio segment. 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. 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, 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 Portfolio |
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 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 |
27
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 |
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| SEGMENT INCOME |
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| Regulated Utilities |
$ | 2,346 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 2,346 | ||||||||||||||||||
| International Energy |
356 | — | — | — | — | — | — | — | 356 | |||||||||||||||||||||||||||
| Commercial Portfolio |
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 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 Portfolio 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. |
28
DUKE ENERGY CORPORATION
ADJUSTED EFFECTIVE TAX RECONCILIATION
Three and Nine Months Ended September 30, 2015
(Dollars in Millions)
| Three Months Ended September 30, 2015 |
Nine Months Ended September 30, 2015 |
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| Balance | Effective Tax Rate | Balance | Effective Tax Rate | |||||||||||||
| Adjusted Earnings, Pre-Tax Income* |
$ | 1,480 | $ | 3,752 | ||||||||||||
| Midwest Generation Operations |
— | (147 | ) | |||||||||||||
| Edwardsport Settlement |
(90 | ) | (90 | ) | ||||||||||||
| Costs to Achieve, Progress Energy Merger |
(24 | ) | (67 | ) | ||||||||||||
| Ash Basin Settlement |
(7 | ) | (7 | ) | ||||||||||||
| Economic Hedges (Mark-to-Market) |
1 | 1 | ||||||||||||||
| Intercompany Eliminations |
— | (4 | ) | |||||||||||||
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| Reported Income From Continuing Operations Before Income Taxes |
$ | 1,360 | $ | 3,438 | ||||||||||||
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| Adjusted Tax Expense* |
$ | 466 | 31 | %** | $ | 1,192 | 32 | %** | ||||||||
| Tax Adjustment Related to Midwest Generation Sale |
— | 41 | ||||||||||||||
| Midwest Generation Operations |
— | (53 | ) | |||||||||||||
| Edwardsport Settlement |
(34 | ) | (34 | ) | ||||||||||||
| Costs to Achieve, Progress Energy Merger |
(9 | ) | (25 | ) | ||||||||||||
| Ash Basin Settlement |
(3 | ) | (3 | ) | ||||||||||||
| Intercompany Eliminations |
— | — | ||||||||||||||
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| Reported Income Tax Expense From Continuing Operations |
$ | 420 | 31 | % | $ | 1,118 | 33 | % | ||||||||
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| * | Includes amounts attributable to noncontrolling interests |
| ** | Adjusted effective tax rate is a non-GAAP financial measure as the rate is calculated using a pretax earnings and income tax expense, both adjusted for the impact of special items. The most directly comparable GAAP measure for adjusted effective tax rate is reported effective tax rate, which includes the impact of special items. |
29
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 |
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| 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 | ||||||||||||||
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| Reported Income From Continuing Operations Before Income Taxes |
$ | 1,351 | $ | 3,448 | ||||||||||||
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| Adjusted Tax Expense* |
$ | 498 | 34 | %** | $ | 1,230 | 32 | %** | ||||||||
| 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 | ||||||||||||||
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| Reported Income Tax Expense From Continuing Operations |
$ | 460 | 34 | % | $ | 1,081 | 31 | % | ||||||||
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| * | Includes amounts attributable to noncontrolling interests |
| ** | Adjusted effective tax rate is a non-GAAP financial measure as the rate is calculated using a pretax earnings and income tax expense, both adjusted for the impact of special items. The most directly comparable GAAP measure for adjusted effective tax rate is reported effective tax rate, which includes the impact of special items. |
30