Attached files
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| 8-K - FORM 8-K - Duke Energy CORP | q32016earningsrelease8-k.htm |
News Release |  | |
Media Contact: Catherine Butler
24-Hour: 800.559.3853
Analysts: Mike Callahan
Office: 704.382.0459
Nov. 4, 2016
Duke Energy reports third quarter 2016 financial results
▪ | Third quarter 2016 GAAP reported diluted earnings per share (EPS) were $1.70 compared to $1.35 for the third quarter of 2015 |
▪ | Adjusted diluted EPS of $1.68 for third quarter 2016, compared to $1.47 for the third quarter of 2015 |
▪ | Company trending toward the high end of its original 2016 adjusted diluted earnings guidance range of $4.50 to $4.70 per share, excluding costs associated with Hurricane Matthew |
CHARLOTTE, N.C. - Duke Energy today announced third quarter 2016 reported diluted EPS, prepared in accordance with Generally Accepted Accounting Principles (GAAP) of $1.70, compared to $1.35 for third quarter 2015. Third quarter 2016 adjusted diluted EPS was $1.68, compared to $1.47 for third quarter 2015.
GAAP reported diluted EPS includes the impact of special items, which are excluded from adjusted diluted EPS. Special items during the third quarter of 2016 include favorable tax adjustments on previously disposed businesses, charges related to costs to achieve mergers and cost savings initiatives, and an impairment of certain wind projects within commercial renewables.
Third quarter adjusted diluted EPS was higher than the prior year driven by warm summer weather throughout Duke Energy’s service territories, higher retail volumes and rider revenues, and ongoing cost management efforts.
Based upon strong results through the third quarter, and the early closing of Piedmont Natural Gas, the company is trending toward the high end of its original 2016 adjusted diluted earnings guidance range of $4.50 to $4.70 per share, excluding fourth-quarter costs associated with Hurricane Matthew.
"We delivered strong financial results again this quarter underpinned by solid operational performance and reached pivotal milestones in transitioning our business portfolio,” said Lynn Good, Duke Energy chairman, president and CEO. "The recent closing of our Piedmont Natural Gas acquisition, complemented by the announced sale of our international business, advances our portfolio transition and positions us as a premier regulated energy company."
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Business segment results
In addition to the quarterly business segment discussion below, a comprehensive table of quarterly and year-to-date earnings per share drivers compared to the prior year is provided on pages 14 and 15.
The discussion below of the third-quarter results includes both GAAP segment income and adjusted segment income, which is a non-GAAP financial measure. The tables on pages 23 through 26 present a detail of special items and a reconciliation of GAAP reported results to adjusted results.
During the first quarter of 2016, Duke Energy began to evaluate interim period segment performance based on financial information that includes the impact of income tax levelization within segment income. This represents a change from the previous measure, where the interim period impacts of income tax levelization were included within Other, and therefore excluded from segment income. As a result, prior period segment results presented in this release have been recast to conform to this change.
Regulated Utilities
On a reported basis, Regulated Utilities recognized third quarter 2016 segment income of $1,200 million, compared to $905 million in the third quarter of 2015. In addition to the drivers outlined below, quarterly results were impacted by a $56 million after-tax impairment charge in the prior year related to the September 2015 Edwardsport settlement. This charge was treated as a special item and therefore excluded from adjusted earnings.
On an adjusted basis, Regulated Utilities recognized third quarter 2016 adjusted segment income of $1,200 million, compared to $965 million in the third quarter 2015, an increase of $0.34 per share.
Higher quarterly results at Regulated Utilities were primarily driven by:
▪ | Favorable weather (+$0.14 per share) driven by warmer temperatures across all Duke Energy service territories |
▪ | Lower effective tax rate (+$0.08 per share) due to prior year income tax adjustments |
▪ | Higher rider revenues (+$0.05 per share) primarily related to energy efficiency and grid investment riders at Duke Energy Progress and Duke Energy Ohio, respectively |
▪ | Increased weather-normal retail customer volumes (+$0.04 per share) |
▪ | Lower O&M expenses (+$0.02 per share), primarily as a result of ongoing cost savings initiatives, despite higher storm costs (-$0.02 per share) |
Commercial Portfolio
On a reported basis, Commercial Portfolio recognized a third quarter 2016 segment loss of $21 million, compared to segment income of $8 million in the third quarter of 2015. In addition to the drivers outlined below, quarterly results were impacted by a $45 million after-tax impairment charge in the current year associated with equity method investments in certain
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wind projects. This charge was treated as a special item and therefore excluded from adjusted earnings.
On an adjusted basis, Commercial Portfolio recognized third quarter 2016 adjusted segment income of $24 million, compared to $7 million in the third quarter 2015, an increase of $0.02 per share.
Higher quarterly results at Commercial Portfolio were primarily driven by additional wind and solar plants placed in service and improved wind resources.
International Energy
International Energy recognized third quarter 2016 reported and adjusted segment income of $64 million, compared to $69 million in the third quarter 2015, a decrease of $0.01 per share.
Other
Other primarily includes corporate interest expense not allocated to the business units, results from Duke Energy’s captive insurance company, and other investments.
On a reported basis, Other recognized third quarter 2016 net expense of $189 million, compared to net expense of $45 million in the third quarter of 2015. In addition to the drivers outlined below, quarterly results were impacted by $37 million of higher costs to achieve mergers and $12 million of charges in the current year related to cost savings initiatives, both net of tax. These charges were treated as special items and therefore excluded from adjusted earnings.
On an adjusted basis, Other recognized third quarter 2016 adjusted net expense of $125 million, compared to adjusted net expense of $30 million in the third quarter 2015, a decrease of $0.14 per share. The increased net expense was primarily driven by a higher effective tax rate (-$0.13 per share) due to prior year income tax benefits and an unfavorable audit settlement in the current year.
The consolidated reported effective tax rate for third quarter 2016 was 32.9 percent, compared to 30.9 percent in the third quarter of 2015. The consolidated adjusted effective tax rate for third quarter 2016 was 33.5 percent, compared to 31.6 percent in the third quarter of 2015. Adjusted effective tax rate is a non-GAAP financial measure. The tables on pages 27 and 28 present a reconciliation of GAAP reported effective tax rate to adjusted effective tax rate.
Discontinued Operations
In the third quarter, Duke Energy recognized an income tax benefit of $122 million within Discontinued Operations due to deferred tax liability adjustments related to the Midwest Generation Disposal Group and another previously sold business.
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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 and financial updates.
The conference call will be hosted by Lynn Good, chairman, president and chief executive officer, and Steve Young, executive vice president and chief financial officer.
The call can be accessed via the investors' section (http://www.duke-energy.com/investors/) of Duke Energy’s website or by dialing 877-741-4253 in the United States or 719-325-4802 outside the United States. The confirmation code is 4938179. Please call in 10 to 15 minutes prior to the scheduled start time.
A replay of the conference call will be available until 1 p.m. ET, Nov. 14, 2016, by calling 888-203-1112 in the United States or 719-457-0820 outside the United States and using the code 4938179. A replay and transcript also will be available by accessing the investors' section of the company’s website.
Special Items and Non-GAAP Reconciliation
The following table presents a reconciliation of GAAP reported to adjusted diluted EPS for quarterly results in 2016 and 2015:
(In millions, except per-share amounts) | After-Tax Amount | 3Q 2016 EPS | 3Q 2015 EPS | ||||||
Diluted EPS, as reported | $ | 1.70 | $ | 1.35 | |||||
Adjustments to reported EPS: | |||||||||
Third Quarter 2016 | |||||||||
Costs to achieve, mergers | $ | 52 | 0.07 | ||||||
Cost saving initiatives | 12 | 0.02 | |||||||
Commercial Renewables impairment | 45 | 0.07 | |||||||
Discontinued operations | (122 | ) | (0.18 | ) | |||||
Third Quarter 2015 | |||||||||
Costs to achieve, Progress merger | 15 | 0.02 | |||||||
Edwardsport Settlement | 56 | 0.08 | |||||||
Ash Basin Settlement | 4 | 0.01 | |||||||
Discontinued operations | 5 | 0.01 | |||||||
Total adjustments | $ | (0.02 | ) | $ | 0.12 | ||||
Diluted EPS, as adjusted | $ | 1.68 | $ | 1.47 | |||||
Non-GAAP financial measures
Management evaluates financial performance in part based on non-GAAP financial measures, adjusted earnings and adjusted diluted EPS. These items represent income from continuing operations net of income (loss) attributable to noncontrolling interests, adjusted for the dollar and per-share impact of special items. Special items represent certain charges and credits, which management believes are not indicative of our ongoing performance, and are discussed
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below. Management believes the presentation of adjusted earnings and adjusted diluted EPS provides useful information to investors, as it provides them with 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, stockholders, 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 stockholders.
Special items included in the periods presented include the following:
• | Costs to achieve mergers and International impairment represent charges that result from potential or completed strategic acquisitions and divestitures that do not reflect ongoing costs. |
• | Cost savings initiatives represents severance charges related to company-wide initiatives to standardize processes and systems, leverage technology and workforce optimization, which are not representative of ongoing costs. |
• | Commercial Renewables Impairment represents an other-than-temporary impairment of certain equity method investments. Management believes the impairment does not reflect an ongoing cost. |
• | Edwardsport settlement and Ash basin settlement represent charges related to settlement agreements with regulators and other governmental entities and do not represent ongoing costs. |
• | Midwest generation operations represents the operating results of the nonregulated Midwest generation business and Duke Energy Retail Sales (collectively, the Midwest Generation Disposal Group), which have been classified as discontinued operations. Management believes inclusion of the Midwest Generation Disposal Group's operating results within adjusted earnings and adjusted diluted EPS results in a better reflection of Duke Energy's financial performance during the period. |
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 for future periods (such as legal settlements, the impact of regulatory orders, or asset impairments).
Management evaluates segment performance based on segment income and other net expense. Segment income is defined as income from continuing operations net of income attributable to noncontrolling interests. Segment income includes intercompany revenues and expenses that are eliminated in the Condensed Consolidated Financial Statements. Management also uses adjusted segment income as a measure of historical and anticipated future segment performance. Adjusted segment income is a non-GAAP financial measure, as it is based upon segment income adjusted for special items, which are discussed above. Management believes the presentation of adjusted segment income provides useful
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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 or adjusted other net expense is segment income and other net expense.
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 for future periods, as discussed above.
Duke Energy’s adjusted earnings, adjusted diluted EPS, and adjusted segment income may not be comparable to similarly titled measures of another company because other entities may not calculate the measures in the same manner.
Duke Energy is one of the largest electric power holding companies in the United States. Its regulated utility operations serve approximately 7.4 million electric customers located in six states in the Southeast and Midwest, representing a population of approximately 24 million people. The company also distributes natural gas to more than 1.5 million customers in the Carolinas, Ohio, Kentucky and Tennessee. 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 an S&P 100 Stock Index company traded on the New York Stock Exchange under the symbol DUK. More information about the company is available at duke-energy.com.
The Duke Energy News Center serves as a multimedia resource for journalists and features news releases, helpful links, photos and videos. Hosted by Duke Energy, illumination is an online destination for stories about remarkable people, innovations, and community and environmental topics. It also offers glimpses into the past and insights into the future of energy.
Follow Duke Energy on Twitter, LinkedIn, Instagram and Facebook.
Forward-Looking Information
This document includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are based on management’s beliefs and assumptions and can often be identified by terms and phrases that include "anticipate," "believe," "intend," "estimate," "expect," "continue," "should," "could," "may," "plan," "project," "predict," "will," "potential," "forecast," "target," "guidance," "outlook" or other similar terminology. Various factors may cause actual results to be materially different than the suggested outcomes within forward-looking statements; accordingly, there is no assurance that such results will be realized. These factors include, but are not limited to: 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 costs and liabilities to comply with federal and state regulations related to coal ash, including amounts for the
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required closure of certain ash impoundments, are uncertain and difficult to estimate; the ability to recover eligible costs, including amounts associated with coal ash impoundment retirement obligations and costs related to significant weather events, and to earn an adequate return on investment through the regulatory process; the costs of decommissioning Crystal River Unit 3 and other nuclear facilities 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 variations in customer usage patterns, including energy efficiency efforts and use of alternative energy sources, including self-generation and distributed generation technologies; advancements in technology; additional competition in electric markets and continued industry consolidation; political, economic and regulatory uncertainty in Brazil and 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, earthquakes and tornadoes; the ability to successfully operate electric generating facilities and deliver electricity to customers including direct or indirect effects to the company resulting from an incident that affects the U.S. electric grid or generating resources; the ability to complete necessary or desirable pipeline expansion or infrastructure projects in our natural gas business; operational interruptions to our gas distribution and transmission activities; the impact on facilities and business from a terrorist attack, cybersecurity threats, data security breaches, and other catastrophic events such as fires, explosions, pandemic health events or other similar occurrences; 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, interest rate fluctuations 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, 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 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
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pronouncements issued periodically by accounting standard-setting bodies; the impact of potential goodwill impairments; the ability to successfully complete future merger, acquisition or divestiture plans, including the proposed sale of International Energy, excluding the equity investment in National Methanol Company; and the ability to successfully integrate the natural gas businesses since the acquisition of Piedmont Natural Gas Company, Inc. 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.
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 described. Forward-looking statements speak only as of the date they are made; Duke Energy expressly disclaims an obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
###
September 2016 | |||||||||||||||
QUARTERLY HIGHLIGHTS | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
(In millions, except per-share amounts and where noted) | 2016 | 2015 | 2016 | 2015 | |||||||||||
Earnings Per Share - Basic and Diluted | |||||||||||||||
Income from continuing operations attributable to Duke Energy Corporation common stockholders | |||||||||||||||
Basic | $ | 1.52 | $ | 1.36 | $ | 3.27 | $ | 3.31 | |||||||
Diluted | $ | 1.52 | $ | 1.36 | $ | 3.26 | $ | 3.31 | |||||||
Income (Loss) from discontinued operations attributable to Duke Energy Corporation common stockholders | |||||||||||||||
Basic | $ | 0.18 | $ | (0.01 | ) | $ | 0.18 | $ | 0.05 | ||||||
Diluted | $ | 0.18 | $ | (0.01 | ) | $ | 0.18 | $ | 0.05 | ||||||
Net income attributable to Duke Energy Corporation common stockholders | |||||||||||||||
Basic | $ | 1.70 | $ | 1.35 | $ | 3.45 | $ | 3.36 | |||||||
Diluted | $ | 1.70 | $ | 1.35 | $ | 3.44 | $ | 3.36 | |||||||
Weighted average shares outstanding | |||||||||||||||
Basic | 689 | 688 | 689 | 696 | |||||||||||
Diluted | 691 | 688 | 690 | 696 | |||||||||||
SEGMENT INCOME (LOSS) BY BUSINESS SEGMENT | |||||||||||||||
Regulated Utilities(a) | $ | 1,200 | $ | 905 | $ | 2,613 | $ | 2,311 | |||||||
International Energy(b) | 64 | 69 | 85 | 157 | |||||||||||
Commercial Portfolio(c)(d) | (21 | ) | 8 | 20 | (15 | ) | |||||||||
Total Reportable Segment Income | 1,243 | 982 | 2,718 | 2,453 | |||||||||||
Other Net Expense(e)(f)(g) | (189 | ) | (45 | ) | (463 | ) | (139 | ) | |||||||
Intercompany Eliminations | — | — | — | (4 | ) | ||||||||||
Income (Loss) from Discontinued Operations, net of tax(h)(i) | 122 | (5 | ) | 124 | 29 | ||||||||||
Net Income Attributable to Duke Energy Corporation | $ | 1,176 | $ | 932 | $ | 2,379 | $ | 2,339 | |||||||
CAPITALIZATION | |||||||||||||||
Total Common Equity (%) | 45 | % | 48 | % | |||||||||||
Total Debt (%) | 55 | % | 52 | % | |||||||||||
Total Debt | $ | 50,176 | $ | 42,457 | |||||||||||
Book Value Per Share | $ | 58.85 | $ | 57.92 | |||||||||||
Actual Shares Outstanding | 689 | 688 | |||||||||||||
CAPITAL AND INVESTMENT EXPENDITURES | |||||||||||||||
Regulated Utilities(j) | $ | 1,674 | $ | 2,539 | $ | 4,687 | $ | 5,212 | |||||||
International Energy | 11 | 14 | 26 | 33 | |||||||||||
Commercial Portfolio | 192 | 374 | 614 | 757 | |||||||||||
Other | 44 | 52 | 123 | 166 | |||||||||||
Total Capital and Investment Expenditures | $ | 1,921 | $ | 2,979 | $ | 5,450 | $ | 6,168 | |||||||
Note: Certain prior period amounts have been reclassified to conform to the current year presentation. | |||||||||||||||
(a) Includes a charge of $56 million (net of tax of $34 million) related to the Edwardsport settlement for the three and nine months ended September 30, 2015. | |||||||||||||||
(b) Includes an impairment charge of $145 million (net of tax of $49 million) for the nine months ended September 30, 2016, related to certain assets in Central America, as well as a tax benefit of $95 million resulting from the ability to more efficiently utilize foreign tax credits. | |||||||||||||||
(c) Includes an impairment charge of $45 million (net of tax of $26 million) for the three and nine months ended September 30, 2016, related to certain equity investments in wind projects. | |||||||||||||||
(d) Includes a tax charge of $41 million for the nine months ended September 30, 2015, resulting from the completion of the sale of the nonregulated Midwest generation business. | |||||||||||||||
(e) Includes costs to achieve mergers of $52 million for the three months ended September 30, 2016 (net of tax of $32 million), and $195 million for the nine months ended September 30, 2016 (net of tax of $120 million). These costs primarily consist of losses on forward-starting interest rate swaps associated with the Piedmont acquisition financing. | |||||||||||||||
(f) Includes costs to achieve 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). | |||||||||||||||
(g) Includes a charge of $12 million for the three months ended September 30, 2016 (net of tax of $7 million) and $39 million for the nine months ended September 30, 2016 (net of tax of $24 million), primarily consisting of severance expense related to cost savings initiatives. | |||||||||||||||
(h) Includes an income tax benefit of $122 million for the three and nine months ended September 30, 2016, resulting from deferred tax liability adjustments related to the Midwest Generation Disposal Group and another previously sold business. | |||||||||||||||
(i) Includes the impact of a litigation reserve related to the nonregulated Midwest generation business of $53 million for the nine months ended September 30, 2015 (net of tax of $28 million). | |||||||||||||||
(j) Includes $1.25 billion related to the NCEMPA acquisition for the three and nine months ended September 30, 2015. | |||||||||||||||
9
September 2016 | |||||||||||||||
QUARTERLY HIGHLIGHTS | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
(In millions, except for GWh and MW amounts) | 2016 | 2015 | 2016 | 2015 | |||||||||||
REGULATED UTILITIES | |||||||||||||||
Operating Revenues | $ | 6,430 | $ | 6,147 | $ | 16,788 | $ | 17,090 | |||||||
Operating Expenses | 4,385 | 4,481 | 12,124 | 12,789 | |||||||||||
Gains on Sales of Other Assets and Other, net | 1 | 1 | 3 | 10 | |||||||||||
Operating Income | 2,046 | 1,667 | 4,667 | 4,311 | |||||||||||
Other Income and Expenses | 75 | 56 | 213 | 187 | |||||||||||
Interest Expense | 293 | 280 | 848 | 829 | |||||||||||
Income Before Income Taxes | 1,828 | 1,443 | 4,032 | 3,669 | |||||||||||
Income Tax Expense | 628 | 538 | 1,419 | 1,358 | |||||||||||
Segment Income | $ | 1,200 | $ | 905 | $ | 2,613 | $ | 2,311 | |||||||
Depreciation and Amortization | $ | 749 | $ | 691 | $ | 2,198 | $ | 2,096 | |||||||
INTERNATIONAL ENERGY | |||||||||||||||
Operating Revenues | $ | 245 | $ | 281 | $ | 761 | $ | 841 | |||||||
Operating Expenses | 177 | 200 | 713 | 639 | |||||||||||
Loss on Sales of Other Assets and Other, net | (1 | ) | — | (2 | ) | (1 | ) | ||||||||
Operating Income | 67 | 81 | 46 | 201 | |||||||||||
Other Income and Expenses | 23 | 24 | 62 | 69 | |||||||||||
Interest Expense | 19 | 21 | 63 | 66 | |||||||||||
Income Before Income Taxes | 71 | 84 | 45 | 204 | |||||||||||
Income Tax Expense (Benefit) | 4 | 14 | (48 | ) | 44 | ||||||||||
Less: Income Attributable to Noncontrolling Interests | 3 | 1 | 8 | 3 | |||||||||||
Segment Income | $ | 64 | $ | 69 | $ | 85 | $ | 157 | |||||||
Depreciation and Amortization | $ | 18 | $ | 23 | $ | 62 | $ | 69 | |||||||
Sales, GWh | 5,017 | 4,590 | 16,522 | 13,580 | |||||||||||
Proportional MW Capacity in Operation | 4,315 | 4,333 | |||||||||||||
COMMERCIAL PORTFOLIO | |||||||||||||||
Operating Revenues | $ | 140 | $ | 66 | $ | 366 | $ | 214 | |||||||
Operating Expenses | 141 | 82 | 373 | 255 | |||||||||||
Gains on Sales of Other Assets and Other, net | 1 | — | 3 | 6 | |||||||||||
Operating Loss | — | (16 | ) | (4 | ) | (35 | ) | ||||||||
Other Income and Expenses | (69 | ) | (3 | ) | (63 | ) | (3 | ) | |||||||
Interest Expense | 15 | 11 | 38 | 33 | |||||||||||
Loss Before Income Taxes | (84 | ) | (30 | ) | (105 | ) | (71 | ) | |||||||
Income Tax Benefit | (62 | ) | (37 | ) | (123 | ) | (55 | ) | |||||||
Less: Loss Attributable to Noncontrolling Interests | (1 | ) | (1 | ) | (2 | ) | (1 | ) | |||||||
Segment (Loss) Income | $ | (21 | ) | $ | 8 | $ | 20 | $ | (15 | ) | |||||
Depreciation and Amortization | $ | 33 | $ | 27 | $ | 96 | $ | 77 | |||||||
Actual Renewable Plant Production, GWh | 1,801 | 1,230 | 5,619 | 3,913 | |||||||||||
Net Proportional MW Capacity in Operation | 2,725 | 1,634 | |||||||||||||
OTHER | |||||||||||||||
Operating Revenues | $ | 32 | $ | 17 | $ | 91 | $ | 78 | |||||||
Operating Expenses | 128 | 64 | 316 | 177 | |||||||||||
Gains on Sales of Other Assets and Other, net | 5 | 3 | 16 | 16 | |||||||||||
Operating Loss | (91 | ) | (44 | ) | (209 | ) | (83 | ) | |||||||
Other Income and Expenses | 12 | (2 | ) | 30 | 8 | ||||||||||
Interest Expense | 157 | 91 | 553 | 285 | |||||||||||
Loss Before Income Taxes | (236 | ) | (137 | ) | (732 | ) | (360 | ) | |||||||
Income Tax Benefit | (50 | ) | (95 | ) | (276 | ) | (229 | ) | |||||||
Less: Income Attributable to Noncontrolling Interests | 3 | 3 | 7 | 8 | |||||||||||
Other Net Expense | $ | (189 | ) | $ | (45 | ) | $ | (463 | ) | $ | (139 | ) | |||
Depreciation and Amortization | $ | 37 | $ | 33 | $ | 108 | $ | 99 | |||||||
Note: Certain prior period amounts have been reclassified to conform to the current year presentation. | |||||||||||||||
10
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, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Operating Revenues | |||||||||||||||
Regulated electric | $ | 6,303 | $ | 6,017 | $ | 16,321 | $ | 16,564 | |||||||
Nonregulated electric and other | 429 | 377 | 1,251 | 1,157 | |||||||||||
Regulated natural gas | 89 | 89 | 355 | 416 | |||||||||||
Total operating revenues | 6,821 | 6,483 | 17,927 | 18,137 | |||||||||||
Operating Expenses | |||||||||||||||
Fuel used in electric generation and purchased power - regulated | 2,016 | 2,113 | 5,102 | 5,775 | |||||||||||
Fuel used in electric generation and purchased power - nonregulated | 75 | 61 | 215 | 283 | |||||||||||
Cost of natural gas | 17 | 21 | 98 | 158 | |||||||||||
Operation, maintenance and other | 1,547 | 1,426 | 4,467 | 4,274 | |||||||||||
Depreciation and amortization | 837 | 774 | 2,464 | 2,341 | |||||||||||
Property and other taxes | 303 | 293 | 893 | 836 | |||||||||||
Impairment charges | 10 | 111 | 208 | 111 | |||||||||||
Total operating expenses | 4,805 | 4,799 | 13,447 | 13,778 | |||||||||||
Gains on Sales of Other Assets and Other, net | 6 | 4 | 20 | 31 | |||||||||||
Operating Income | 2,022 | 1,688 | 4,500 | 4,390 | |||||||||||
Other Income and Expenses | |||||||||||||||
Equity in earnings (losses) of unconsolidated affiliates | (60 | ) | 17 | (37 | ) | 53 | |||||||||
Other income and expenses, net | 99 | 57 | 270 | 203 | |||||||||||
Total other income and expenses | 39 | 74 | 233 | 256 | |||||||||||
Interest Expense | 482 | 402 | 1,493 | 1,208 | |||||||||||
Income From Continuing Operations Before Income Taxes | 1,579 | 1,360 | 3,240 | 3,438 | |||||||||||
Income Tax Expense from Continuing Operations | 520 | 420 | 972 | 1,118 | |||||||||||
Income From Continuing Operations | 1,059 | 940 | 2,268 | 2,320 | |||||||||||
Income (Loss) From Discontinued Operations, net of tax | 122 | (5 | ) | 124 | 29 | ||||||||||
Net Income | 1,181 | 935 | 2,392 | 2,349 | |||||||||||
Less: Net Income Attributable to Noncontrolling Interests | 5 | 3 | 13 | 10 | |||||||||||
Net Income Attributable to Duke Energy Corporation | $ | 1,176 | $ | 932 | $ | 2,379 | $ | 2,339 | |||||||
Earnings Per Share - Basic and Diluted | |||||||||||||||
Income from continuing operations attributable to Duke Energy Corporation common stockholders | |||||||||||||||
Basic | $ | 1.52 | $ | 1.36 | $ | 3.27 | $ | 3.31 | |||||||
Diluted | $ | 1.52 | $ | 1.36 | $ | 3.26 | $ | 3.31 | |||||||
Income (Loss) from discontinued operations attributable to Duke Energy Corporation common stockholders | |||||||||||||||
Basic | $ | 0.18 | $ | (0.01 | ) | $ | 0.18 | $ | 0.05 | ||||||
Diluted | $ | 0.18 | $ | (0.01 | ) | $ | 0.18 | $ | 0.05 | ||||||
Net income attributable to Duke Energy Corporation common stockholders | |||||||||||||||
Basic | $ | 1.70 | $ | 1.35 | $ | 3.45 | $ | 3.36 | |||||||
Diluted | $ | 1.70 | $ | 1.35 | $ | 3.44 | $ | 3.36 | |||||||
Weighted average shares outstanding | |||||||||||||||
Basic | 689 | 688 | 689 | 696 | |||||||||||
Diluted | 691 | 688 | 690 | 696 | |||||||||||
11
DUKE ENERGY CORPORATION | ||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
(Unaudited) | ||||||||
(in millions) | September 30, 2016 | December 31, 2015 | ||||||
ASSETS | ||||||||
Current Assets | ||||||||
Cash and cash equivalents | $ | 6,179 | $ | 857 | ||||
Receivables (net of allowance for doubtful accounts of $25 at 2016 and $18 at 2015) | 583 | 703 | ||||||
Receivables of VIEs (net of allowance for doubtful accounts of $54 at 2016 and $53 at 2015) | 2,139 | 1,748 | ||||||
Inventory | 3,351 | 3,810 | ||||||
Regulatory assets (includes $51 related to VIEs at 2016) | 853 | 877 | ||||||
Other | 429 | 327 | ||||||
Total current assets | 13,534 | 8,322 | ||||||
Investments and Other Assets | ||||||||
Investments in equity method unconsolidated affiliates | 604 | 499 | ||||||
Nuclear decommissioning trust funds | 6,112 | 5,825 | ||||||
Goodwill | 16,354 | 16,343 | ||||||
Other | 2,948 | 3,042 | ||||||
Total investments and other assets | 26,018 | 25,709 | ||||||
Property, Plant and Equipment | ||||||||
Cost | 116,376 | 112,826 | ||||||
Accumulated depreciation and amortization | (38,812 | ) | (37,665 | ) | ||||
Generation facilities to be retired, net | 652 | 548 | ||||||
Net property, plant and equipment | 78,216 | 75,709 | ||||||
Regulatory Assets and Deferred Debits | ||||||||
Regulatory assets (includes $1,156 related to VIEs at 2016) | 11,896 | 11,373 | ||||||
Other | 22 | 43 | ||||||
Total regulatory assets and deferred debits | 11,918 | 11,416 | ||||||
Total Assets | $ | 129,686 | $ | 121,156 | ||||
LIABILITIES AND EQUITY | ||||||||
Current Liabilities | ||||||||
Accounts payable | $ | 2,138 | $ | 2,400 | ||||
Notes payable and commercial paper | 3,011 | 3,633 | ||||||
Taxes accrued | 636 | 348 | ||||||
Interest accrued | 504 | 430 | ||||||
Current maturities of long-term debt (includes $258 at 2016 and $125 at 2015 related to VIEs) | 3,201 | 2,074 | ||||||
Asset retirement obligations | 539 | — | ||||||
Regulatory liabilities | 319 | 400 | ||||||
Other | 1,728 | 2,115 | ||||||
Total current liabilities | 12,076 | 11,400 | ||||||
Long-Term Debt (includes $3,641 at 2016 and $2,197 at 2015 related to VIEs) | 43,964 | 37,495 | ||||||
Deferred Credits and Other Liabilities | ||||||||
Deferred income taxes | 13,201 | 12,705 | ||||||
Investment tax credits | 486 | 472 | ||||||
Accrued pension and other post-retirement benefit costs | 1,030 | 1,088 | ||||||
Asset retirement obligations | 10,291 | 10,264 | ||||||
Regulatory liabilities | 6,241 | 6,255 | ||||||
Other | 1,851 | 1,706 | ||||||
Total deferred credits and other liabilities | 33,100 | 32,490 | ||||||
Commitments and Contingencies | ||||||||
Equity | ||||||||
Common stock, $0.001 par value, 2 billion shares authorized; 689 million and 688 million shares outstanding at 2016 and 2015, respectively | 1 | 1 | ||||||
Additional paid-in capital | 37,997 | 37,968 | ||||||
Retained earnings | 3,212 | 2,564 | ||||||
Accumulated other comprehensive loss | (721 | ) | (806 | ) | ||||
Total Duke Energy Corporation stockholders' equity | 40,489 | 39,727 | ||||||
Noncontrolling interests | 57 | 44 | ||||||
Total equity | 40,546 | 39,771 | ||||||
Total Liabilities and Equity | $ | 129,686 | $ | 121,156 | ||||
12
DUKE ENERGY CORPORATION | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
(Unaudited) | ||||||||
(In millions) | ||||||||
Nine Months Ended September 30, | ||||||||
2016 | 2015 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
Net Income | $ | 2,392 | $ | 2,349 | ||||
Adjustments to reconcile net income to net cash provided by operating activities | 3,200 | 3,047 | ||||||
Net cash provided by operating activities | 5,592 | 5,396 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
Net cash used in investing activities | (5,555 | ) | (3,291 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
Net cash provided by (used in) financing activities | 5,285 | (2,771 | ) | |||||
Net increase (decrease) in cash and cash equivalents | 5,322 | (666 | ) | |||||
Cash and cash equivalents at the beginning of period | 857 | 2,036 | ||||||
Cash and cash equivalents at end of period | $ | 6,179 | $ | 1,370 | ||||
13
DUKE ENERGY CORPORATION
EARNINGS VARIANCES
September 2016 QTD vs. Prior Year
($ per share) | Regulated Utilities | International Energy | Commercial Portfolio | Other | Discontinued Operations | Consolidated | ||||||||||||||||||
2015 QTD Reported Earnings Per Share, Diluted | $ | 1.31 | $ | 0.10 | $ | 0.01 | $ | (0.06 | ) | $ | (0.01 | ) | $ | 1.35 | ||||||||||
Costs to Achieve, Progress Merger | — | — | — | 0.02 | — | 0.02 | ||||||||||||||||||
Edwardsport Settlement | 0.08 | — | — | — | — | 0.08 | ||||||||||||||||||
Ash Basin Settlement | 0.01 | — | — | — | — | 0.01 | ||||||||||||||||||
Discontinued Operations | — | — | — | — | 0.01 | 0.01 | ||||||||||||||||||
2015 QTD Adjusted Earnings Per Share, Diluted | $ | 1.40 | $ | 0.10 | $ | 0.01 | $ | (0.04 | ) | $ | — | $ | 1.47 | |||||||||||
Weather | 0.14 | — | — | — | — | 0.14 | ||||||||||||||||||
Pricing and Riders (a) | 0.05 | — | — | — | — | 0.05 | ||||||||||||||||||
Volume | 0.04 | — | — | — | — | 0.04 | ||||||||||||||||||
Wholesale (b) | 0.03 | — | — | — | — | 0.03 | ||||||||||||||||||
Operations and Maintenance, net of recoverables | 0.02 | — | — | — | — | 0.02 | ||||||||||||||||||
Latin America, including Foreign Exchange Rates | — | — | — | — | — | — | ||||||||||||||||||
National Methanol Company | — | (0.01 | ) | — | — | — | (0.01 | ) | ||||||||||||||||
Duke Energy Renewables (c) | — | — | 0.02 | — | — | 0.02 | ||||||||||||||||||
Commercial Transmission, Pipeline and Other | — | — | — | — | — | — | ||||||||||||||||||
Interest Expense | (0.01 | ) | — | — | (0.01 | ) | — | (0.02 | ) | |||||||||||||||
Change in effective income tax rate | 0.08 | 0.01 | — | (0.13 | ) | — | (0.04 | ) | ||||||||||||||||
Other | (0.01 | ) | (0.01 | ) | — | — | — | (0.02 | ) | |||||||||||||||
2016 QTD Adjusted Earnings Per Share, Diluted | $ | 1.74 | $ | 0.09 | $ | 0.03 | $ | (0.18 | ) | $ | — | $ | 1.68 | |||||||||||
Costs to Achieve, Mergers | — | — | — | (0.07 | ) | — | (0.07 | ) | ||||||||||||||||
Cost Savings Initiatives | — | — | — | (0.02 | ) | — | (0.02 | ) | ||||||||||||||||
Commercial Renewables Impairment | — | — | (0.07 | ) | — | — | (0.07 | ) | ||||||||||||||||
Discontinued Operations | — | — | — | — | 0.18 | 0.18 | ||||||||||||||||||
2016 QTD Reported Earnings Per Share, Diluted | $ | 1.74 | $ | 0.09 | $ | (0.04 | ) | $ | (0.27 | ) | $ | 0.18 | $ | 1.70 | ||||||||||
Note 1: Earnings Per Share amounts are calculated using the consolidated statutory income tax rate for all variance drivers except Duke Energy Renewables, which uses an effective tax rate. | ||||||||||||||||||||||||
Note 2: Adjusted and Reported Earnings Per Share amounts by segment may not recompute from other published schedules due to rounding. | ||||||||||||||||||||||||
Note 3: Certain prior period amounts have been reclassified to conform to the current year presentation. | ||||||||||||||||||||||||
(a) | Primarily due to the NCEMPA rider (+$0.02) and higher energy efficiency recoveries at Duke Energy Progress (+$0.01). | |||||||||||||||||||||||
(b) | Primarily due to the implementation of new contracts. | |||||||||||||||||||||||
(c) | Primarily due to new wind and solar growth and higher wind production. | |||||||||||||||||||||||
14
DUKE ENERGY CORPORATION
EARNINGS VARIANCES
September 2016 YTD vs. Prior Year
($ per share) | Regulated Utilities | International Energy | Commercial Portfolio | Other | Discontinued Operations | Consolidated | ||||||||||||||||||
2015 YTD Reported Earnings Per Share, Diluted | $ | 3.32 | $ | 0.22 | $ | (0.03 | ) | $ | (0.19 | ) | $ | 0.04 | $ | 3.36 | ||||||||||
Costs to Achieve, Progress Merger | — | — | — | 0.05 | — | 0.05 | ||||||||||||||||||
Edwardsport Settlement | 0.08 | — | — | — | — | 0.08 | ||||||||||||||||||
Midwest Generation Operations | — | — | 0.14 | — | — | 0.14 | ||||||||||||||||||
Ash Basin Settlement | 0.01 | — | — | — | — | 0.01 | ||||||||||||||||||
Discontinued Operations | — | — | 0.06 | — | (0.04 | ) | 0.02 | |||||||||||||||||
2015 YTD Adjusted Earnings Per Share, Diluted | $ | 3.41 | $ | 0.22 | $ | 0.17 | $ | (0.14 | ) | $ | — | $ | 3.66 | |||||||||||
Stock repurchase (a) | 0.03 | 0.01 | — | — | — | 0.04 | ||||||||||||||||||
Weather | 0.03 | — | — | — | — | 0.03 | ||||||||||||||||||
Pricing and Riders (b) | 0.16 | — | — | — | — | 0.16 | ||||||||||||||||||
Volume | 0.04 | — | — | — | — | 0.04 | ||||||||||||||||||
Wholesale (c) | 0.07 | — | — | — | — | 0.07 | ||||||||||||||||||
Operations and Maintenance, net of recoverables (d) | 0.06 | — | — | — | — | 0.06 | ||||||||||||||||||
Latin America, including Foreign Exchange Rates (e) | — | 0.05 | — | — | — | 0.05 | ||||||||||||||||||
National Methanol Company | — | (0.05 | ) | — | — | — | (0.05 | ) | ||||||||||||||||
Duke Energy Renewables (f) | — | — | 0.03 | — | — | 0.03 | ||||||||||||||||||
Commercial Transmission, Pipeline and Other | — | — | 0.01 | — | — | 0.01 | ||||||||||||||||||
Midwest Generation (g) | — | — | (0.12 | ) | — | — | (0.12 | ) | ||||||||||||||||
Interest Expense | (0.01 | ) | — | — | (0.03 | ) | — | (0.04 | ) | |||||||||||||||
Change in effective income tax rate (h) | 0.10 | 0.10 | — | (0.14 | ) | — | 0.06 | |||||||||||||||||
Other (i) | (0.10 | ) | — | — | (0.02 | ) | — | (0.12 | ) | |||||||||||||||
2016 YTD Adjusted Earnings Per Share, Diluted | $ | 3.79 | $ | 0.33 | $ | 0.09 | $ | (0.33 | ) | $ | — | $ | 3.88 | |||||||||||
Costs to Achieve, Mergers | — | — | — | (0.28 | ) | — | (0.28 | ) | ||||||||||||||||
International Impairment | — | (0.21 | ) | — | — | — | (0.21 | ) | ||||||||||||||||
Cost Savings Initiatives | — | — | — | (0.06 | ) | — | (0.06 | ) | ||||||||||||||||
Commercial Renewables Impairment | — | — | (0.07 | ) | — | — | (0.07 | ) | ||||||||||||||||
Discontinued Operations | — | — | — | — | 0.18 | 0.18 | ||||||||||||||||||
2016 YTD Reported Earnings Per Share, Diluted | $ | 3.79 | $ | 0.12 | $ | 0.02 | $ | (0.67 | ) | $ | 0.18 | $ | 3.44 | |||||||||||
Note 1: Earnings Per Share amounts are calculated using the consolidated statutory income tax rate for all variance drivers except Duke Energy Renewables, which uses an effective tax rate. | ||||||||||||||||||||||||
Note 2: Adjusted and Reported Earnings Per Share amounts by segment may not recompute from other published schedules due to rounding. | ||||||||||||||||||||||||
Note 3: Certain prior period amounts have been reclassified to conform to the current year presentation. | ||||||||||||||||||||||||
(a) | Due to the decrease in common shares outstanding as a result of the Accelerated Stock Repurchase Program. Weighted average diluted shares outstanding decreased from 696 million shares to 690 million shares. | |||||||||||||||||||||||
(b) | Primarily due to the NCEMPA rider (+$0.06), higher energy efficiency recoveries in the Carolinas (+$0.05), and a prior year unfavorable regulatory order in Ohio related to energy efficiency (+$0.02). | |||||||||||||||||||||||
(c) | Primarily due to the implementation of the new 30-year contract with NCEMPA. | |||||||||||||||||||||||
(d) | Primarily due to lower outage costs and cost control efforts, partially offset by increased storm restoration costs and costs related to the NCEMPA asset purchase. | |||||||||||||||||||||||
(e) | Primarily due to higher results in Brazil due to improved hydrology, partially offset by weaker foreign currency exchange rates (-$0.02). | |||||||||||||||||||||||
(f) | Primarily due to new wind and solar growth and higher wind production. | |||||||||||||||||||||||
(g) | Due to the absence of earnings from the nonregulated Midwest generation business, which was sold in April 2015. | |||||||||||||||||||||||
(h) | International Energy includes lower income taxes resulting from the decision to divest the International Energy segment combined with more efficient utilization of foreign tax credits. | |||||||||||||||||||||||
(i) | Regulated Utilities includes increased depreciation and amortization expense (-$0.08) due to higher depreciable base including the NCEMPA asset purchase, and higher non-income taxes (-$0.05) primarily due to increased property taxes. | |||||||||||||||||||||||
15
Regulated Utilities | ||||||||||||||||||||||||
Quarterly Highlights | ||||||||||||||||||||||||
Supplemental Regulated Utilities Electric Information | ||||||||||||||||||||||||
September 2016 | ||||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||
2016 | 2015 | % Inc.(Dec.) | % Inc.(Dec.) Weather Normal (2) | 2016 | 2015 | % Inc.(Dec.) | % Inc.(Dec.) Weather Normal (2) | |||||||||||||||||
GWh Sales (1) | ||||||||||||||||||||||||
Residential | 26,103 | 24,176 | 8.0 | % | 2.3 | % | 65,450 | 66,195 | (1.1 | %) | 1.0 | % | ||||||||||||
General Service | 22,768 | 22,047 | 3.3 | % | 2.1 | % | 59,291 | 59,124 | 0.3 | % | 0.2 | % | ||||||||||||
Industrial | 13,854 | 14,001 | (1.0 | %) | (1.1 | %) | 39,147 | 39,370 | (0.6 | %) | (0.4 | %) | ||||||||||||
Other Energy Sales | 144 | 149 | (3.4 | %) | 435 | 450 | (3.3 | %) | ||||||||||||||||
Unbilled Sales | (703 | ) | (1,808 | ) | 61.1 | % | n/a | 1,078 | (476 | ) | 326.5 | % | n/a | |||||||||||
Total Retail Sales | 62,166 | 58,565 | 6.1 | % | 1.4 | % | 165,401 | 164,663 | 0.4 | % | 0.4 | % | ||||||||||||
Special Sales | 12,102 | 10,450 | 15.8 | % | 33,783 | 28,551 | 18.3 | % | ||||||||||||||||
Total Consolidated Electric Sales - Regulated Utilities | 74,268 | 69,015 | 7.6 | % | 199,184 | 193,214 | 3.1 | % | ||||||||||||||||
Average Number of Customers (Electric) | ||||||||||||||||||||||||
Residential | 6,455,615 | 6,365,092 | 1.4 | % | 6,439,699 | 6,351,973 | 1.4 | % | ||||||||||||||||
General Service | 964,893 | 954,659 | 1.1 | % | 961,246 | 951,350 | 1.0 | % | ||||||||||||||||
Industrial | 17,807 | 18,105 | (1.6 | %) | 17,868 | 18,150 | (1.6 | %) | ||||||||||||||||
Other Energy Sales | 23,138 | 23,113 | 0.1 | % | 23,117 | 23,024 | 0.4 | % | ||||||||||||||||
Total Regular Sales | 7,461,453 | 7,360,969 | 1.4 | % | 7,441,930 | 7,344,497 | 1.3 | % | ||||||||||||||||
Special Sales | 61 | 64 | (4.7 | %) | 61 | 63 | (3.2 | %) | ||||||||||||||||
Total Average Number of Customers - Regulated Utilities | 7,461,514 | 7,361,033 | 1.4 | % | 7,441,991 | 7,344,560 | 1.3 | % | ||||||||||||||||
Sources of Electric Energy (GWh) | ||||||||||||||||||||||||
Generated - Net Output (3) | ||||||||||||||||||||||||
Coal | 24,665 | 23,509 | 4.9 | % | 58,367 | 62,433 | (6.5 | %) | ||||||||||||||||
Nuclear | 19,177 | 18,469 | 3.8 | % | 55,785 | 52,580 | 6.1 | % | ||||||||||||||||
Hydro | 131 | 91 | 44.0 | % | 1,502 | 1,025 | 46.5 | % | ||||||||||||||||
Oil and Natural Gas | 17,594 | 16,533 | 6.4 | % | 48,461 | 46,054 | 5.2 | % | ||||||||||||||||
Renewable Energy | 60 | 3 | 1,900.0 | % | 158 | 10 | 1,480.0 | % | ||||||||||||||||
Total Generation (4) | 61,627 | 58,605 | 5.2 | % | 164,273 | 162,102 | 1.3 | % | ||||||||||||||||
Purchased Power and Net Interchange (5) | 17,105 | (2,765 | ) | 718.6 | % | 45,757 | 24,461 | 87.1 | % | |||||||||||||||
Total Sources of Energy | 78,732 | 55,840 | 41.0 | % | 210,030 | 186,563 | 12.6 | % | ||||||||||||||||
Less: Line Loss and Company Usage | 4,464 | 2,604 | 71.4 | % | 10,846 | 9,128 | 18.8 | % | ||||||||||||||||
Total GWh Sources | 74,268 | 53,236 | 39.5 | % | 199,184 | 177,435 | 12.3 | % | ||||||||||||||||
Owned MW Capacity (3) | ||||||||||||||||||||||||
Summer | 49,839 | 50,081 | ||||||||||||||||||||||
Winter | 53,028 | 53,346 | ||||||||||||||||||||||
Nuclear Capacity Factor (%) (6) | 96 | 95 | ||||||||||||||||||||||
(1) Except as indicated in footnote (2), represents non-weather normalized billed sales, with energy delivered but not yet billed (i.e. unbilled sales) reflected as a single amount and not allocated to the respective retail classes. | ||||||||||||||||||||||||
(2) Represents weather normal total retail calendar sales (i.e. billed and unbilled sales). | ||||||||||||||||||||||||
(3) Statistics reflect Duke Energy's ownership share of jointly owned stations. | ||||||||||||||||||||||||
(4) Generation by source is reported net of auxiliary power. | ||||||||||||||||||||||||
(5) Purchased power includes renewable energy purchases. | ||||||||||||||||||||||||
(6) Statistics reflect 100% of jointly owned stations. | ||||||||||||||||||||||||
16
Duke Energy Carolinas | ||||||||||||||||||||||||
Quarterly Highlights | ||||||||||||||||||||||||
Supplemental Regulated Utilities Electric Information | ||||||||||||||||||||||||
September 2016 | ||||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||
2016 | 2015 | % Inc.(Dec.) | % Inc.(Dec.) Weather Normal (2) | 2016 | 2015 | % Inc.(Dec.) | % Inc.(Dec.) Weather Normal (2) | |||||||||||||||||
GWh Sales (1) | ||||||||||||||||||||||||
Residential | 8,804 | 8,213 | 7.2 | % | 22,055 | 22,445 | (1.7 | %) | ||||||||||||||||
General Service | 8,507 | 8,273 | 2.8 | % | 22,105 | 22,074 | 0.1 | % | ||||||||||||||||
Industrial | 5,923 | 6,041 | (2.0 | %) | 16,546 | 16,730 | (1.1 | %) | ||||||||||||||||
Other Energy Sales | 76 | 76 | — | % | 228 | 229 | (0.4 | %) | ||||||||||||||||
Unbilled Sales | (446 | ) | (1,047 | ) | 57.4 | % | 244 | (693 | ) | 135.2 | % | |||||||||||||
Total Regular Electric Sales | 22,864 | 21,556 | 6.1 | % | 1.5 | % | 61,178 | 60,785 | 0.6 | % | 0.4 | % | ||||||||||||
Special Sales | 2,644 | 2,181 | 21.2 | % | 6,712 | 6,726 | (0.2 | %) | ||||||||||||||||
Total Consolidated Electric Sales - Duke Energy Carolinas | 25,508 | 23,737 | 7.5 | % | 67,890 | 67,511 | 0.6 | % | ||||||||||||||||
Average Number of Customers | ||||||||||||||||||||||||
Residential | 2,151,654 | 2,120,091 | 1.5 | % | 2,144,598 | 2,113,735 | 1.5 | % | ||||||||||||||||
General Service | 350,252 | 346,039 | 1.2 | % | 348,819 | 344,699 | 1.2 | % | ||||||||||||||||
Industrial | 6,276 | 6,414 | (2.2 | %) | 6,303 | 6,444 | (2.2 | %) | ||||||||||||||||
Other Energy Sales | 15,224 | 15,095 | 0.9 | % | 15,170 | 15,014 | 1.0 | % | ||||||||||||||||
Total Regular Sales | 2,523,406 | 2,487,639 | 1.4 | % | 2,514,890 | 2,479,892 | 1.4 | % | ||||||||||||||||
Special Sales | 24 | 24 | — | % | 24 | 25 | (4.0 | %) | ||||||||||||||||
Total Average Number of Customers - Duke Energy Carolinas | 2,523,430 | 2,487,663 | 1.4 | % | 2,514,914 | 2,479,917 | 1.4 | % | ||||||||||||||||
Sources of Electric Energy (GWh) | ||||||||||||||||||||||||
Generated - Net Output (3) | ||||||||||||||||||||||||
Coal | 9,395 | 8,597 | 9.3 | % | 20,056 | 22,127 | (9.4 | %) | ||||||||||||||||
Nuclear | 11,607 | 10,991 | 5.6 | % | 33,409 | 34,110 | (2.1 | %) | ||||||||||||||||
Hydro | (35 | ) | (40 | ) | 12.5 | % | 802 | 436 | 83.9 | % | ||||||||||||||
Oil and Natural Gas | 3,216 | 2,945 | 9.2 | % | 8,893 | 7,936 | 12.1 | % | ||||||||||||||||
Renewable Energy | 3 | 3 | — | % | 10 | 10 | — | % | ||||||||||||||||
Total Generation (4) | 24,186 | 22,496 | 7.5 | % | 63,170 | 64,619 | (2.2 | %) | ||||||||||||||||
Purchased Power and Net Interchange (5) | 2,729 | 2,731 | (0.1 | %) | 8,796 | 6,988 | 25.9 | % | ||||||||||||||||
Total Sources of Energy | 26,915 | 25,227 | 6.7 | % | 71,966 | 71,607 | 0.5 | % | ||||||||||||||||
Less: Line Loss and Company Usage | 1,407 | 1,490 | (5.6 | %) | 4,076 | 4,096 | (0.5 | %) | ||||||||||||||||
Total GWh Sources | 25,508 | 23,737 | 7.5 | % | 67,890 | 67,511 | 0.6 | % | ||||||||||||||||
Owned MW Capacity (3) | ||||||||||||||||||||||||
Summer | 19,678 | 19,645 | ||||||||||||||||||||||
Winter | 20,383 | 20,360 | ||||||||||||||||||||||
Nuclear Capacity Factor (%) (6) | 96 | 97 | ||||||||||||||||||||||
Heating and Cooling Degree Days | ||||||||||||||||||||||||
Actual | ||||||||||||||||||||||||
Heating Degree Days | — | 5 | (100.0 | %) | 1,861 | 2,109 | (11.8 | %) | ||||||||||||||||
Cooling Degree Days | 1,301 | 1,085 | 19.9 | % | 1,890 | 1,709 | 10.6 | % | ||||||||||||||||
Variance from Normal | ||||||||||||||||||||||||
Heating Degree Days | (100.0 | %) | (51.6 | %) | n/a | (7.1 | %) | 9.4 | % | n/a | ||||||||||||||
Cooling Degree Days | 33.6 | % | 6.2 | % | n/a | 29.0 | % | 9.8 | % | 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). | ||||||||||||||||||||||||
(3) Statistics reflect Duke Energy's ownership share of jointly owned stations. | ||||||||||||||||||||||||
(4) Generation by source is reported net of auxiliary power. | ||||||||||||||||||||||||
(5) Purchased power includes renewable energy purchases. | ||||||||||||||||||||||||
(6) Statistics reflect 100% of jointly owned stations. | ||||||||||||||||||||||||
17
Duke Energy Progress | ||||||||||||||||||||||||
Quarterly Highlights | ||||||||||||||||||||||||
Supplemental Regulated Utilities Electric Information | ||||||||||||||||||||||||
September 2016 | ||||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||
2016 | 2015 | % Inc.(Dec.) | % Inc.(Dec.) Weather Normal (2) | 2016 | 2015 | % Inc.(Dec.) | % Inc.(Dec.) Weather Normal (2) | |||||||||||||||||
GWh Sales (1) | ||||||||||||||||||||||||
Residential | 5,406 | 5,107 | 5.9 | % | 14,003 | 14,547 | (3.7 | %) | ||||||||||||||||
General Service | 4,667 | 4,563 | 2.3 | % | 12,007 | 12,000 | 0.1 | % | ||||||||||||||||
Industrial | 2,806 | 2,788 | 0.6 | % | 7,792 | 7,790 | — | % | ||||||||||||||||
Other Energy Sales | 22 | 26 | (15.4 | %) | 68 | 81 | (16.0 | %) | ||||||||||||||||
Unbilled Sales | (112 | ) | (481 | ) | 76.7 | % | 98 | (352 | ) | 127.8 | % | |||||||||||||
Total Regular Electric Sales | 12,789 | 12,003 | 6.5 | % | 1.4 | % | 33,968 | 34,066 | (0.3 | %) | 0.2 | % | ||||||||||||
Special Sales | 7,244 | 6,280 | 15.4 | % | 20,043 | 15,934 | 25.8 | % | ||||||||||||||||
Total Consolidated Electric Sales - Duke Energy Progress | 20,033 | 18,283 | 9.6 | % | 54,011 | 50,000 | 8.0 | % | ||||||||||||||||
Average Number of Customers | ||||||||||||||||||||||||
Residential | 1,294,491 | 1,276,474 | 1.4 | % | 1,289,892 | 1,272,450 | 1.4 | % | ||||||||||||||||
General Service | 229,854 | 227,015 | 1.3 | % | 228,698 | 225,721 | 1.3 | % | ||||||||||||||||
Industrial | 4,131 | 4,204 | (1.7 | %) | 4,142 | 4,221 | (1.9 | %) | ||||||||||||||||
Other Energy Sales | 1,505 | 1,683 | (10.6 | %) | 1,549 | 1,687 | (8.2 | %) | ||||||||||||||||
Total Regular Sales | 1,529,981 | 1,509,376 | 1.4 | % | 1,524,281 | 1,504,079 | 1.3 | % | ||||||||||||||||
Special Sales | 15 | 15 | — | % | 15 | 15 | — | % | ||||||||||||||||
Total Average Number of Customers - Duke Energy Progress | 1,529,996 | 1,509,391 | 1.4 | % | 1,524,296 | 1,504,094 | 1.3 | % | ||||||||||||||||
Sources of Electric Energy (GWh) | ||||||||||||||||||||||||
Generated - Net Output (3) | ||||||||||||||||||||||||
Coal | 5,073 | 4,110 | 23.4 | % | 9,508 | 11,454 | (17.0 | %) | ||||||||||||||||
Nuclear | 7,570 | 7,478 | 1.2 | % | 22,376 | 18,470 | 21.1 | % | ||||||||||||||||
Hydro | 71 | 55 | 29.1 | % | 449 | 389 | 15.4 | % | ||||||||||||||||
Oil and Natural Gas | 5,942 | 5,857 | 1.5 | % | 18,037 | 17,183 | 5.0 | % | ||||||||||||||||
Renewable Energy | 55 | — | n/a | 146 | — | n/a | ||||||||||||||||||
Total Generation (4) | 18,711 | 17,500 | 6.9 | % | 50,516 | 47,496 | 6.4 | % | ||||||||||||||||
Purchased Power and Net Interchange (5) | 2,129 | 1,447 | 47.1 | % | 5,391 | 4,627 | 16.5 | % | ||||||||||||||||
Total Sources of Energy | 20,840 | 18,947 | 10.0 | % | 55,907 | 52,123 | 7.3 | % | ||||||||||||||||
Less: Line Loss and Company Usage | 807 | 664 | 21.5 | % | 1,896 | 2,123 | (10.7 | %) | ||||||||||||||||
Total GWh Sources | 20,033 | 18,283 | 9.6 | % | 54,011 | 50,000 | 8.0 | % | ||||||||||||||||
Owned MW Capacity (3) | ||||||||||||||||||||||||
Summer | 12,935 | 12,923 | ||||||||||||||||||||||
Winter | 14,034 | 14,042 | ||||||||||||||||||||||
Nuclear Capacity Factor (%) (6) | 96 | 89 | ||||||||||||||||||||||
Heating and Cooling Degree Days | ||||||||||||||||||||||||
Actual | ||||||||||||||||||||||||
Heating Degree Days | — | 1 | (100.0 | %) | 1,693 | 2,004 | (15.5 | %) | ||||||||||||||||
Cooling Degree Days | 1,343 | 1,131 | 18.7 | % | 1,955 | 1,779 | 9.9 | % | ||||||||||||||||
Variance from Normal | ||||||||||||||||||||||||
Heating Degree Days | (100.0 | %) | (78.3 | %) | n/a | (7.4 | %) | 13.3 | % | n/a | ||||||||||||||
Cooling Degree Days | 28.5 | % | 2.7 | % | n/a | 23.3 | % | 5.8 | % | 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). | ||||||||||||||||||||||||
(3) Statistics reflect Duke Energy's ownership share of jointly owned stations. | ||||||||||||||||||||||||
(4) Generation by source is reported net of auxiliary power. | ||||||||||||||||||||||||
(5) Purchased power includes renewable energy purchases. | ||||||||||||||||||||||||
(6) Statistics reflect 100% of jointly owned stations. | ||||||||||||||||||||||||
18
Duke Energy Florida | ||||||||||||||||||||||||
Quarterly Highlights | ||||||||||||||||||||||||
Supplemental Regulated Utilities Electric Information | ||||||||||||||||||||||||
September 2016 | ||||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||
2016 | 2015 | % Inc.(Dec.) | % Inc.(Dec.) Weather Normal (2) | 2016 | 2015 | % Inc.(Dec.) | % Inc.(Dec.) Weather Normal (2) | |||||||||||||||||
GWh Sales (1) | ||||||||||||||||||||||||
Residential | 6,608 | 6,152 | 7.4 | % | 15,653 | 15,200 | 3.0 | % | ||||||||||||||||
General Service | 4,432 | 4,309 | 2.9 | % | 11,493 | 11,401 | 0.8 | % | ||||||||||||||||
Industrial | 817 | 861 | (5.1 | %) | 2,381 | 2,442 | (2.5 | %) | ||||||||||||||||
Other Energy Sales | 6 | 6 | — | % | 18 | 18 | — | % | ||||||||||||||||
Unbilled Sales | (160 | ) | (226 | ) | 29.2 | % | 498 | 567 | (12.2 | %) | ||||||||||||||
Total Regular Electric Sales | 11,703 | 11,102 | 5.4 | % | 1.4 | % | 30,043 | 29,628 | 1.4 | % | 1.1 | % | ||||||||||||
Special Sales | 737 | 411 | 79.3 | % | 1,499 | 1,160 | 29.2 | % | ||||||||||||||||
Total Electric Sales - Duke Energy Florida | 12,440 | 11,513 | 8.1 | % | 31,542 | 30,788 | 2.4 | % | ||||||||||||||||
Average Number of Customers | ||||||||||||||||||||||||
Residential | 1,550,574 | 1,526,065 | 1.6 | % | 1,546,245 | 1,521,345 | 1.6 | % | ||||||||||||||||
General Service | 196,142 | 193,645 | 1.3 | % | 195,402 | 193,161 | 1.2 | % | ||||||||||||||||
Industrial | 2,168 | 2,249 | (3.6 | %) | 2,184 | 2,250 | (2.9 | %) | ||||||||||||||||
Other Energy Sales | 1,529 | 1,534 | (0.3 | %) | 1,534 | 1,537 | (0.2 | %) | ||||||||||||||||
Total Regular Sales | 1,750,413 | 1,723,493 | 1.6 | % | 1,745,365 | 1,718,293 | 1.6 | % | ||||||||||||||||
Special Sales | 14 | 14 | — | % | 14 | 14 | — | % | ||||||||||||||||
Total Average Number of Customers - Duke Energy Florida | 1,750,427 | 1,723,507 | 1.6 | % | 1,745,379 | 1,718,307 | 1.6 | % | ||||||||||||||||
Sources of Electric Energy (GWh) | ||||||||||||||||||||||||
Generated - Net Output (3) | ||||||||||||||||||||||||
Coal | 2,823 | 2,909 | (3.0 | %) | 6,605 | 8,106 | (18.5 | %) | ||||||||||||||||
Oil and Natural Gas | 7,610 | 7,215 | 5.5 | % | 19,371 | 19,128 | 1.3 | % | ||||||||||||||||
Renewable Energy | 2 | — | n/a | 2 | — | n/a | ||||||||||||||||||
Total Generation (4) | 10,435 | 10,124 | 3.1 | % | 25,978 | 27,234 | (4.6 | %) | ||||||||||||||||
Purchased Power and Net Interchange (5) | 2,768 | 1,986 | 39.4 | % | 7,407 | 5,280 | 40.3 | % | ||||||||||||||||
Total Sources of Energy | 13,203 | 12,110 | 9.0 | % | 33,385 | 32,514 | 2.7 | % | ||||||||||||||||
Less: Line Loss and Company Usage | 763 | 597 | 27.8 | % | 1,843 | 1,726 | 6.8 | % | ||||||||||||||||
Total GWh Sources | 12,440 | 11,513 | 8.1 | % | 31,542 | 30,788 | 2.4 | % | ||||||||||||||||
Owned MW Capacity (3) | ||||||||||||||||||||||||
Summer | 9,021 | 8,958 | ||||||||||||||||||||||
Winter | 9,926 | 9,909 | ||||||||||||||||||||||
Heating and Cooling Degree Days | ||||||||||||||||||||||||
Actual | ||||||||||||||||||||||||
Heating Degree Days | — | — | — | % | 401 | 373 | 7.5 | % | ||||||||||||||||
Cooling Degree Days | 1,598 | 1,487 | 7.5 | % | 2,909 | 2,977 | (2.3 | %) | ||||||||||||||||
Variance from Normal | ||||||||||||||||||||||||
Heating Degree Days | — | % | — | % | n/a | 1.3 | % | (6.2 | %) | n/a | ||||||||||||||
Cooling Degree Days | 8.0 | % | (1.6 | %) | n/a | 7.9 | % | 8.8 | % | 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). | ||||||||||||||||||||||||
(3) Statistics reflect Duke Energy's ownership share of jointly owned stations. | ||||||||||||||||||||||||
(4) Generation by source is reported net of auxiliary power. | ||||||||||||||||||||||||
(5) Purchased power includes renewable energy purchases. | ||||||||||||||||||||||||
19
Duke Energy Ohio | ||||||||||||||||||||||||
Quarterly Highlights | ||||||||||||||||||||||||
Supplemental Regulated Utilities Electric Information | ||||||||||||||||||||||||
September 2016 | ||||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||
2016 | 2015 | % Inc.(Dec.) | % Inc.(Dec.) Weather Normal (2) | 2016 | 2015 | % Inc.(Dec.) | % Inc.(Dec.) Weather Normal (2) | |||||||||||||||||
GWh Sales (1) | ||||||||||||||||||||||||
Residential | 2,735 | 2,399 | 14.0 | % | 6,802 | 6,891 | (1.3 | %) | ||||||||||||||||
General Service | 2,751 | 2,603 | 5.7 | % | 7,326 | 7,281 | 0.6 | % | ||||||||||||||||
Industrial | 1,577 | 1,580 | (0.2 | %) | 4,478 | 4,507 | (0.6 | %) | ||||||||||||||||
Other Energy Sales | 27 | 28 | (3.6 | %) | 82 | 82 | — | % | ||||||||||||||||
Unbilled Sales | 16 | (57 | ) | 128.1 | % | 136 | (8 | ) | 1,800.0 | % | ||||||||||||||
Total Regular Electric Sales | 7,106 | 6,553 | 8.4 | % | 3.1 | % | 18,824 | 18,753 | 0.4 | % | 0.3 | % | ||||||||||||
Special Sales | 108 | 145 | (25.5 | %) | 293 | 945 | (69.0 | %) | ||||||||||||||||
Total Electric Sales - Duke Energy Ohio | 7,214 | 6,698 | 7.7 | % | 19,117 | 19,698 | (2.9 | %) | ||||||||||||||||
Average Number of Customers | ||||||||||||||||||||||||
Residential | 752,157 | 744,927 | 1.0 | % | 752,530 | 746,183 | 0.9 | % | ||||||||||||||||
General Service | 87,582 | 87,234 | 0.4 | % | 87,522 | 87,203 | 0.4 | % | ||||||||||||||||
Industrial | 2,506 | 2,525 | (0.8 | %) | 2,517 | 2,531 | (0.6 | %) | ||||||||||||||||
Other Energy Sales | 3,259 | 3,223 | 1.1 | % | 3,253 | 3,215 | 1.2 | % | ||||||||||||||||
Total Regular Sales | 845,504 | 837,909 | 0.9 | % | 845,822 | 839,132 | 0.8 | % | ||||||||||||||||
Special Sales | 1 | 1 | — | % | 1 | 1 | — | % | ||||||||||||||||
Total Average Number of Customers - Duke Energy Ohio | 845,505 | 837,910 | 0.9 | % | 845,823 | 839,133 | 0.8 | % | ||||||||||||||||
Sources of Electric Energy (GWh) | ||||||||||||||||||||||||
Generated - Net Output (3) | ||||||||||||||||||||||||
Coal | 1,186 | 1,065 | 11.4 | % | 2,650 | 3,453 | (23.3 | %) | ||||||||||||||||
Oil and Natural Gas | 17 | 13 | 30.8 | % | 28 | 43 | (34.9 | %) | ||||||||||||||||
Total Generation (4) | 1,203 | 1,078 | 11.6 | % | 2,678 | 3,496 | (23.4 | %) | ||||||||||||||||
Purchased Power and Net Interchange (5) | 6,655 | (10,721 | ) | 162.1 | % | 18,141 | 725 | 2,402.2 | % | |||||||||||||||
Total Sources of Energy | 7,858 | (9,643 | ) | 181.5 | % | 20,819 | 4,221 | 393.2 | % | |||||||||||||||
Less: Line Loss and Company Usage | 644 | (562 | ) | 214.6 | % | 1,702 | 302 | 463.6 | % | |||||||||||||||
Total GWh Sources | 7,214 | (9,081 | ) | 179.4 | % | 19,117 | 3,919 | 387.8 | % | |||||||||||||||
Owned MW Capacity (3) | ||||||||||||||||||||||||
Summer | 1,062 | 1,062 | ||||||||||||||||||||||
Winter | 1,164 | 1,164 | ||||||||||||||||||||||
Heating and Cooling Degree Days | ||||||||||||||||||||||||
Actual | ||||||||||||||||||||||||
Heating Degree Days | 24 | 21 | 14.3 | % | 2,848 | 3,331 | (14.5 | %) | ||||||||||||||||
Cooling Degree Days | 973 | 703 | 38.4 | % | 1,345 | 1,094 | 22.9 | % | ||||||||||||||||
Variance from Normal | ||||||||||||||||||||||||
Heating Degree Days | (60.0 | %) | (50.0 | %) | n/a | (8.2 | %) | 11.3 | % | n/a | ||||||||||||||
Cooling Degree Days | 29.9 | % | (13.6 | %) | n/a | 24.9 | % | (7.5 | %) | n/a | ||||||||||||||
(1) Except as indicated in footnote (2), represents non-weather normalized billed sales, with energy delivered but not yet billed (i.e. unbilled sales) reflected as a single amount and not allocated to the respective retail classes. | ||||||||||||||||||||||||
(2) Represents weather normal total retail calendar sales (i.e. billed and unbilled sales). | ||||||||||||||||||||||||
(3) Statistics reflect Duke Energy's ownership share of jointly owned stations. | ||||||||||||||||||||||||
(4) Generation by source is reported net of auxiliary power. | ||||||||||||||||||||||||
(5) Purchased power includes renewable energy purchases. | ||||||||||||||||||||||||
20
Duke Energy Ohio | ||||||||||||||||||||||||
Quarterly Highlights | ||||||||||||||||||||||||
Supplemental Regulated Utilities Gas Information | ||||||||||||||||||||||||
September 2016 | ||||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||
2016 | 2015 | % Inc.(Dec.) | % Inc.(Dec.) Weather Normal (2) | 2016 | 2015 | % Inc.(Dec.) | % Inc.(Dec.) Weather Normal (2) | |||||||||||||||||
MCF Sales (1) | ||||||||||||||||||||||||
Residential | 1,664,506 | 1,755,562 | (5.2 | %) | 23,292,149 | 28,986,782 | (19.6 | %) | ||||||||||||||||
General Service | 1,805,312 | 1,838,773 | (1.8 | %) | 15,372,608 | 18,463,853 | (16.7 | %) | ||||||||||||||||
Industrial | 1,134,323 | 1,192,994 | (4.9 | %) | 5,017,068 | 5,604,282 | (10.5 | %) | ||||||||||||||||
Other Energy Sales | 4,904,296 | 4,439,138 | 10.5 | % | 15,717,935 | 15,194,003 | 3.4 | % | ||||||||||||||||
Unbilled Sales | 59,903 | 24,000 | 149.6 | % | (2,375,774 | ) | (3,221,000 | ) | 26.2 | % | ||||||||||||||
Total Gas Sales - Duke Energy Ohio | 9,568,340 | 9,250,467 | 3.4 | % | 2.7 | % | 57,023,986 | 65,027,920 | (12.3 | %) | (6.1 | %) | ||||||||||||
Average Number of Customers | ||||||||||||||||||||||||
Residential | 473,823 | 471,005 | 0.6 | % | 477,385 | 474,704 | 0.6 | % | ||||||||||||||||
General Service | 41,180 | 41,294 | (0.3 | %) | 43,100 | 43,212 | (0.3 | %) | ||||||||||||||||
Industrial | 1,524 | 1,544 | (1.3 | %) | 1,608 | 1,618 | (0.6 | %) | ||||||||||||||||
Other Energy Sales | 143 | 142 | 0.7 | % | 144 | 143 | 0.7 | % | ||||||||||||||||
Total Average Number of Gas Customers - Duke Energy Ohio | 516,670 | 513,985 | 0.5 | % | 522,237 | 519,677 | 0.5 | % | ||||||||||||||||
Heating and Cooling Degree Days | ||||||||||||||||||||||||
Actual | ||||||||||||||||||||||||
Heating Degree Days | 24 | 21 | 14.3 | % | 2,848 | 3,331 | (14.5 | %) | ||||||||||||||||
Cooling Degree Days | 973 | 703 | 38.4 | % | 1,345 | 1,094 | 22.9 | % | ||||||||||||||||
Variance from Normal | ||||||||||||||||||||||||
Heating Degree Days | (60.0 | %) | (50.0 | %) | n/a | (8.2 | %) | 11.3 | % | n/a | ||||||||||||||
Cooling Degree Days | 29.9 | % | (13.6 | %) | n/a | 24.9 | % | (7.5 | %) | 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 Indiana | ||||||||||||||||||||||||
Quarterly Highlights | ||||||||||||||||||||||||
Supplemental Regulated Utilities Electric Information | ||||||||||||||||||||||||
September 2016 | ||||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||
2016 | 2015 | % Inc.(Dec.) | % Inc.(Dec.) Weather Normal (2) | 2016 | 2015 | % Inc.(Dec.) | % Inc.(Dec.) Weather Normal (2) | |||||||||||||||||
GWh Sales (1) | ||||||||||||||||||||||||
Residential | 2,550 | 2,305 | 10.6 | % | 6,937 | 7,112 | (2.5 | %) | ||||||||||||||||
General Service | 2,411 | 2,299 | 4.9 | % | 6,360 | 6,368 | (0.1 | %) | ||||||||||||||||
Industrial | 2,731 | 2,731 | — | % | 7,950 | 7,901 | 0.6 | % | ||||||||||||||||
Other Energy Sales | 13 | 13 | — | % | 39 | 40 | (2.5 | %) | ||||||||||||||||
Unbilled Sales | (1 | ) | 3 | (133.3 | %) | 102 | 10 | 920.0 | % | |||||||||||||||
Total Regular Electric Sales | 7,704 | 7,351 | 4.8 | % | (0.2 | %) | 21,388 | 21,431 | (0.2 | %) | (0.4 | %) | ||||||||||||
Special Sales | 1,369 | 1,433 | (4.5 | %) | 5,236 | 3,786 | 38.3 | % | ||||||||||||||||
Total Electric Sales - Duke Energy Indiana | 9,073 | 8,784 | 3.3 | % | 26,624 | 25,217 | 5.6 | % | ||||||||||||||||
Average Number of Customers | ||||||||||||||||||||||||
Residential | 706,739 | 697,535 | 1.3 | % | 706,434 | 698,260 | 1.2 | % | ||||||||||||||||
General Service | 101,063 | 100,726 | 0.3 | % | 100,805 | 100,566 | 0.2 | % | ||||||||||||||||
Industrial | 2,726 | 2,713 | 0.5 | % | 2,722 | 2,704 | 0.7 | % | ||||||||||||||||
Other Energy Sales | 1,621 | 1,578 | 2.7 | % | 1,611 | 1,571 | 2.5 | % | ||||||||||||||||
Total Regular Sales | 812,149 | 802,552 | 1.2 | % | 811,572 | 803,101 | 1.1 | % | ||||||||||||||||
Special Sales | 7 | 10 | (30.0 | %) | 7 | 8 | (12.5 | %) | ||||||||||||||||
Total Average Number of Customers - Duke Energy Indiana | 812,156 | 802,562 | 1.2 | % | 811,579 | 803,109 | 1.1 | % | ||||||||||||||||
Sources of Electric Energy (GWh) | ||||||||||||||||||||||||
Generated - Net Output (3) | ||||||||||||||||||||||||
Coal | 6,188 | 6,828 | (9.4 | %) | 19,548 | 17,293 | 13.0 | % | ||||||||||||||||
Hydro | 95 | 76 | 25.0 | % | 251 | 200 | 25.5 | % | ||||||||||||||||
Oil and Natural Gas | 809 | 503 | 60.8 | % | 2,132 | 1,764 | 20.9 | % | ||||||||||||||||
Total Generation (4) | 7,092 | 7,407 | (4.3 | %) | 21,931 | 19,257 | 13.9 | % | ||||||||||||||||
Purchased Power and Net Interchange (5) | 2,824 | 1,792 | 57.6 | % | 6,022 | 6,841 | (12.0 | %) | ||||||||||||||||
Total Sources of Energy | 9,916 | 9,199 | 7.8 | % | 27,953 | 26,098 | 7.1 | % | ||||||||||||||||
Less: Line Loss and Company Usage | 843 | 415 | 103.1 | % | 1,329 | 881 | 50.9 | % | ||||||||||||||||
Total GWh Sources | 9,073 | 8,784 | 3.3 | % | 26,624 | 25,217 | 5.6 | % | ||||||||||||||||
Owned MW Capacity (3) | ||||||||||||||||||||||||
Summer | 7,143 | 7,493 | ||||||||||||||||||||||
Winter | 7,521 | 7,871 | ||||||||||||||||||||||
Heating and Cooling Degree Days | ||||||||||||||||||||||||
Actual | ||||||||||||||||||||||||
Heating Degree Days | 21 | 26 | (19.2 | %) | 3,064 | 3,715 | (17.5 | %) | ||||||||||||||||
Cooling Degree Days | 932 | 706 | 32.0 | % | 1,308 | 1,070 | 22.2 | % | ||||||||||||||||
Variance from Normal | ||||||||||||||||||||||||
Heating Degree Days | (69.1 | %) | (45.7 | %) | n/a | (8.3 | %) | 15.9 | % | n/a | ||||||||||||||
Cooling Degree Days | 26.5 | % | (12.6 | %) | n/a | 22.5 | % | (9.5 | %) | n/a | ||||||||||||||
(1) Except as indicated in footnote (2), represents non-weather normalized billed sales, with energy delivered but not yet billed (i.e. unbilled sales) reflected as a single amount and not allocated to the respective retail classes. | ||||||||||||||||||||||||
(2) Represents weather normal total retail calendar sales (i.e. billed and unbilled sales). | ||||||||||||||||||||||||
(3) Statistics reflect Duke Energy's ownership share of jointly owned stations. | ||||||||||||||||||||||||
(4) Generation by source is reported net of auxiliary power. | ||||||||||||||||||||||||
(5) Purchased power includes renewable energy purchases. | ||||||||||||||||||||||||
22
DUKE ENERGY CORPORATION
REPORTED TO ADJUSTED EARNINGS RECONCILIATION
Three Months Ended September 30, 2016
(Dollars in millions, except per-share amounts)
Special Items | ||||||||||||||||||||||||||||
Reported Earnings | Costs to Achieve, Mergers | Cost Savings Initiatives | Commercial Renewables Impairment | Discontinued Operations | Total Adjustments | Adjusted Earnings | ||||||||||||||||||||||
SEGMENT INCOME | ||||||||||||||||||||||||||||
Regulated Utilities | $ | 1,200 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 1,200 | ||||||||||||||
International Energy | 64 | — | — | — | — | — | 64 | |||||||||||||||||||||
Commercial Portfolio | (21 | ) | — | — | 45 | C | — | 45 | 24 | |||||||||||||||||||
Total Reportable Segment Income | 1,243 | — | — | 45 | — | 45 | 1,288 | |||||||||||||||||||||
Other | (189 | ) | 52 | A | 12 | B | — | — | 64 | (125 | ) | |||||||||||||||||
Total Reportable Segment Income and Other Net Expense | 1,054 | 52 | 12 | 45 | — | 109 | 1,163 | |||||||||||||||||||||
Discontinued Operations | 122 | — | — | — | (122 | ) | D | (122 | ) | — | ||||||||||||||||||
Net Income Attributable to Duke Energy Corporation | $ | 1,176 | $ | 52 | $ | 12 | $ | 45 | $ | (122 | ) | $ | (13 | ) | $ | 1,163 | ||||||||||||
EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, BASIC | $ | 1.70 | $ | 0.08 | $ | 0.02 | $ | 0.07 | $ | (0.18 | ) | $ | (0.01 | ) | $ | 1.69 | ||||||||||||
EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, DILUTED | $ | 1.70 | $ | 0.07 | $ | 0.02 | $ | 0.07 | $ | (0.18 | ) | $ | (0.02 | ) | $ | 1.68 | ||||||||||||
A - Net of $32 million tax benefit. Includes $33 million recorded within Operating Expenses and $51 million recorded within Interest Expense on the Condensed Consolidated Statements of Operations.
B - Net of $7 million tax benefit. Primarily consists of severance costs recorded within Operation, maintenance and other on the Condensed Consolidated Statements of Operations.
C - Net of $26 million tax benefit. Other-than-temporary impairment included within Equity in earnings (losses) of unconsolidated affiliates on the Condensed Consolidated Statements of Operations.
D - Tax adjustments related to previously disposed businesses recorded in Income (Loss) From Discontinued Operations, net of tax on the Condensed Consolidated Statements of Operations.
Weighted Average Shares (reported and adjusted) - in millions
Basic 689
Diluted 691
23
DUKE ENERGY CORPORATION
REPORTED TO ADJUSTED EARNINGS RECONCILIATION
Nine Months Ended September 30, 2016
(Dollars in millions, except per-share amounts)
Special Items | ||||||||||||||||||||||||||||||||
Reported Earnings | Costs to Achieve, Mergers | International Impairment | Cost Savings Initiatives | Commercial Renewables Impairment | Discontinued Operations | Total Adjustments | Adjusted Earnings | |||||||||||||||||||||||||
SEGMENT INCOME | ||||||||||||||||||||||||||||||||
Regulated Utilities | $ | 2,613 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 2,613 | ||||||||||||||||
International Energy | 85 | — | 145 | B | — | — | — | 145 | 230 | |||||||||||||||||||||||
Commercial Portfolio | 20 | — | — | — | 45 | D | — | 45 | 65 | |||||||||||||||||||||||
Total Reportable Segment Income | 2,718 | — | 145 | — | 45 | — | 190 | 2,908 | ||||||||||||||||||||||||
Other | (463 | ) | 195 | A | — | 39 | C | — | — | 234 | (229 | ) | ||||||||||||||||||||
Total Reportable Segment Income and Other Net Expense | 2,255 | 195 | 145 | 39 | 45 | — | 424 | 2,679 | ||||||||||||||||||||||||
Discontinued Operations | 124 | — | — | — | — | (124 | ) | E | (124 | ) | — | |||||||||||||||||||||
Net Income Attributable to Duke Energy Corporation | $ | 2,379 | $ | 195 | $ | 145 | $ | 39 | $ | 45 | $ | (124 | ) | $ | 300 | $ | 2,679 | |||||||||||||||
EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, BASIC | $ | 3.45 | $ | 0.27 | $ | 0.21 | $ | 0.06 | $ | 0.07 | $ | (0.18 | ) | $ | 0.43 | $ | 3.88 | |||||||||||||||
EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, DILUTED | $ | 3.44 | $ | 0.28 | $ | 0.21 | $ | 0.06 | $ | 0.07 | $ | (0.18 | ) | $ | 0.44 | $ | 3.88 | |||||||||||||||
A - Net of $120 million tax benefit. Includes $1 million recorded within Operating Revenues, $80 million recorded within Operating Expenses and $234 million recorded within Interest Expense on the Condensed Consolidated Statements of Operations. The interest expense primarily relates to losses on forward-starting interest rate swaps associated with the Piedmont acquisition financing.
B - Net of $49 million tax benefit. Impairment of certain assets in Central America recorded within Impairment Charges on the Condensed Consolidated Statements of Operations.
C - Net of $24 million tax benefit. Primarily consists of severance costs recorded within Operation, maintenance and other on the Condensed Consolidated Statements of Operations.
D - Net of $26 million tax benefit. Other-than-temporary impairment included within Equity in earnings (losses) of unconsolidated affiliates on the Condensed Consolidated Statements of Operations.
E - Tax adjustments related to previously disposed businesses recorded in Income (Loss) From Discontinued Operations, net of tax on the Condensed Consolidated Statements of Operations.
Weighted Average Shares (reported and adjusted) - in millions
Basic 689
Diluted 690
24
DUKE ENERGY CORPORATION
REPORTED TO ADJUSTED EARNINGS RECONCILIATION
Three Months Ended September 30, 2015
(Dollars in millions, except per-share amounts)
Special Items | ||||||||||||||||||||||||||||||||
Reported Earnings | Costs to Achieve, Progress Merger | Edwardsport Settlement | Ash Basin Settlement | Economic Hedges (Mark-to-Market) * | Discontinued Operations | Total Adjustments | Adjusted Earnings | |||||||||||||||||||||||||
SEGMENT INCOME | ||||||||||||||||||||||||||||||||
Regulated Utilities | $ | 905 | $ | — | $ | 56 | B | $ | 4 | C | $ | — | $ | — | $ | 60 | $ | 965 | ||||||||||||||
International Energy | 69 | — | — | — | — | — | — | 69 | ||||||||||||||||||||||||
Commercial Portfolio | 8 | — | — | — | (1 | ) | D | — | (1 | ) | 7 | |||||||||||||||||||||
Total Reportable Segment Income | 982 | — | 56 | 4 | (1 | ) | — | 59 | 1,041 | |||||||||||||||||||||||
Other | (45 | ) | 15 | A | — | — | — | — | 15 | (30 | ) | |||||||||||||||||||||
Total Reportable Segment Income and Other Net Expense | 937 | 15 | 56 | 4 | (1 | ) | — | 74 | 1,011 | |||||||||||||||||||||||
Discontinued Operations | (5 | ) | — | — | — | — | 5 | E | 5 | — | ||||||||||||||||||||||
Net Income Attributable to Duke Energy Corporation | $ | 932 | $ | 15 | $ | 56 | $ | 4 | $ | (1 | ) | $ | 5 | $ | 79 | $ | 1,011 | |||||||||||||||
EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, BASIC | $ | 1.35 | $ | 0.02 | $ | 0.08 | $ | 0.01 | $ | — | $ | 0.01 | $ | 0.12 | $ | 1.47 | ||||||||||||||||
EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, DILUTED | $ | 1.35 | $ | 0.02 | $ | 0.08 | $ | 0.01 | $ | — | $ | 0.01 | $ | 0.12 | $ | 1.47 | ||||||||||||||||
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 Duke Energy Indiana 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. Includes $1 million and $6 million at Duke Energy Carolinas and Duke Energy Progress, respectively.
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 Condensed 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
REPORTED TO ADJUSTED EARNINGS RECONCILIATION
Nine Months Ended September 30, 2015
(Dollars in millions, except per-share amounts)
Special Items | ||||||||||||||||||||||||||||||||||||
Reported Earnings | Costs to Achieve, Progress Merger | Edwardsport Settlement | Midwest Generation Operations | Ash Basin Settlement | Economic Hedges (Mark-to-Market) * | Discontinued Operations | Total Adjustments | Adjusted Earnings | ||||||||||||||||||||||||||||
SEGMENT INCOME | ||||||||||||||||||||||||||||||||||||
Regulated Utilities | $ | 2,311 | $ | — | $ | 56 | B | $ | — | $ | 4 | D | $ | — | $ | — | $ | 60 | $ | 2,371 | ||||||||||||||||
International Energy | 157 | — | — | — | — | — | — | — | 157 | |||||||||||||||||||||||||||
Commercial Portfolio | (15 | ) | — | — | 94 | C | — | (1 | ) | E | 41 | F | 134 | 119 | ||||||||||||||||||||||
Total Reportable Segment Income | 2,453 | — | 56 | 94 | 4 | (1 | ) | 41 | 194 | 2,647 | ||||||||||||||||||||||||||
Other | (139 | ) | 42 | A | — | — | — | — | — | 42 | (97 | ) | ||||||||||||||||||||||||
Intercompany Eliminations | (4 | ) | — | — | — | — | — | 4 | G | 4 | — | |||||||||||||||||||||||||
Total Reportable Segment Income and Other Net Expense | 2,310 | 42 | 56 | 94 | 4 | (1 | ) | 45 | 240 | 2,550 | ||||||||||||||||||||||||||
Discontinued Operations | 29 | — | — | (94 | ) | C | — | — | 65 | H | (29 | ) | — | |||||||||||||||||||||||
Net Income Attributable to Duke Energy Corporation | $ | 2,339 | $ | 42 | $ | 56 | $ | — | $ | 4 | $ | (1 | ) | $ | 110 | $ | 211 | $ | 2,550 | |||||||||||||||||
EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, BASIC | $ | 3.36 | $ | 0.05 | $ | 0.08 | $ | — | $ | 0.01 | $ | — | $ | 0.16 | $ | 0.30 | $ | 3.66 | ||||||||||||||||||
EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, DILUTED | $ | 3.36 | $ | 0.05 | $ | 0.08 | $ | — | $ | 0.01 | $ | — | $ | 0.16 | $ | 0.30 | $ | 3.66 | ||||||||||||||||||
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 Duke Energy Indiana 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. Includes $1 million and $6 million at Duke Energy Carolinas and Duke Energy Progress, respectively.
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 EFFECTIVE TAX RECONCILIATION
Three and Nine Months Ended September 30, 2016
(Dollars in Millions)
Three Months Ended September 30, 2016 | Nine Months Ended September 30, 2016 | ||||||||||||||
Balance | Effective Tax Rate | Balance | Effective Tax Rate | ||||||||||||
Reported Income From Continuing Operations Before Income Taxes | $ | 1,579 | $ | 3,240 | |||||||||||
Costs to Achieve, Mergers | 84 | 315 | |||||||||||||
International Impairment | — | 194 | |||||||||||||
Cost Savings Initiatives | 19 | 63 | |||||||||||||
Commercial Renewables Impairment | 71 | 71 | |||||||||||||
Noncontrolling Interests | (5 | ) | (13 | ) | |||||||||||
Adjusted Pretax Income | $ | 1,748 | $ | 3,870 | |||||||||||
Reported Income Tax Expense From Continuing Operations | $ | 520 | 32.9 | % | $ | 972 | 30.0 | % | |||||||
Costs to Achieve, Mergers | 32 | 120 | |||||||||||||
International Impairment | — | 49 | |||||||||||||
Cost Savings Initiatives | 7 | 24 | |||||||||||||
Commercial Renewables Impairment | 26 | 26 | |||||||||||||
Adjusted Tax Expense | $ | 585 | 33.5 | % | * | $ | 1,191 | 30.8 | % | * | |||||
*Adjusted effective tax rate is a non-GAAP financial measure as the rate is calculated using 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. | |||||||||||||||
27
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 | ||||||||||||||
Balance | Effective Tax Rate | Balance | Effective Tax Rate | ||||||||||||
Reported Income From Continuing Operations Before Income Taxes | $ | 1,360 | $ | 3,438 | |||||||||||
Costs to Achieve, Progress Energy Merger | 24 | 67 | |||||||||||||
Edwardsport Settlement | 90 | 90 | |||||||||||||
Midwest Generation Operations | — | 147 | |||||||||||||
Ash Basin Settlement | 7 | 7 | |||||||||||||
Economic Hedges (Mark-to-Market) | (1 | ) | (1 | ) | |||||||||||
Noncontrolling Interests | (3 | ) | (10 | ) | |||||||||||
Intercompany Eliminations | — | 4 | |||||||||||||
Adjusted Pretax Income | $ | 1,477 | $ | 3,742 | |||||||||||
Reported Income Tax Expense From Continuing Operations | $ | 420 | 30.9 | % | $ | 1,118 | 32.5 | % | |||||||
Tax Adjustment Related to Midwest Generation Sale | — | (41 | ) | ||||||||||||
Costs to Achieve, Progress Energy Merger | 9 | 25 | |||||||||||||
Edwardsport Settlement | 34 | 34 | |||||||||||||
Midwest Generation Operations | — | 53 | |||||||||||||
Ash Basin Settlement | 3 | 3 | |||||||||||||
Adjusted Tax Expense | $ | 466 | 31.6 | % | * | $ | 1,192 | 31.9 | % | * | |||||
*Adjusted effective tax rate is a non-GAAP financial measure as the rate is calculated using 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. | |||||||||||||||
28