Duke Energy CORP - FORM 8-K - EX-99.1 - EXHIBIT 99.1

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8-K - FORM 8-K - Duke Energy CORP	a4q2016statsupplement8-k.htm

4th Quarter 2016 Statistical Supplement



Table of Contents

DUKE ENERGY CORPORATION (Unaudited)		Electric and Natural Gas Revenues by Customer Class
3	Consolidating Statements of Operations	21	Revenues by Customer Class (Unaudited)
5	Consolidating Balance Sheets
		Non-GAAP Disclosures (Unaudited)
Electric Utilities and Infrastructure (Unaudited)		22	Reported to Adjusted Earnings Reconciliations
9	Consolidating Segment Income	24	Non-GAAP Financial Measures
11	Consolidating Balance Sheets

Gas Utilities and Infrastructure (Unaudited)
15	Consolidating Segment Income
17	Consolidating Balance Sheets

Duke Energy and Piedmont Natural Gas

This Statistical Supplement includes results of Piedmont Natural Gas subsequent to the acquisition on October 3, 2016, and should be read in conjunction with i) Duke Energy's Annual Report on Form 10-K for the year ended December 31, 2016, ii) Piedmont's Form 10-K for the year ended October 31, 2016, and iii) Piedmont's Form 10-QT for the transition period from November 1, 2016 to December 31, 2016.

Segment Change

Due to the Piedmont acquisition and the sale of International Energy in the fourth quarter of 2016, Duke Energy's segment structure has been realigned to include the following segments: Electric Utilities and Infrastructure, Gas Utilities and Infrastructure and Commercial Renewables. The remainder of Duke Energy’s operations is presented as Other. Other now includes the results of National Methanol Company (NMC), previously included in the International Energy segment, and the results of the Midwest Generation business that was sold in 2015, previously included in the former Commercial Portfolio segment.

Prior periods have been recast to conform to the current segment structure.

DUKE ENERGY CORPORATION

Consolidating Statements of Operations

(Unaudited)



	Twelve Months Ended December 31, 2016
(in millions)	Electric Utilities and Infrastructure		Gas Utilities and Infrastructure			Commercial Renewables			Other			International Energy		Eliminations / Adjustments			Duke Energy
Operating Revenues
Regulated electric	$	21,366	$	—		$	—		$	—		$	—	$	(145	)	$	21,221
Nonregulated electric and other	—		—			484			127			—		48			659
Regulated natural gas	—		901			—			(10		)	—		(28		)	863
Total operating revenues	21,366		901			484			117			—		(125		)	22,743
Operating Expenses
Fuel used in electric generation and purchased power	6,595		—			—			51			—		(21		)	6,625
Cost of natural gas	—		265			—			—			—		—			265
Operation, maintenance and other	5,293		186			337			371			—		(102		)	6,085
Depreciation and amortization	2,897		115			130			152			—		—			3,294
Property and other taxes	1,020		70			25			28			—		(1		)	1,142
Impairment charges	16		—			—			2			—		—			18
Total operating expenses	15,821		636			492			604			—		(124		)	17,429
(Loss) Gains on Sales of Other Assets and Other, net	—		(1		)	5			23			—		—			27
Operating Income (Loss)	5,545		264			(3		)	(464		)	—		(1		)	5,341
Other Income and Expenses
Equity in earnings (losses) of unconsolidated affiliates^(a)	5		19			(82		)	43			—		—			(15		)
Other income and expenses, net	298		5			(1		)	32			—		(10		)	324
Total Other Income and Expenses	303		24			(83		)	75			—		(10		)	309
Interest Expense^(b)	1,136		46			53			693			—		(12		)	1,916
Income (Loss) from Continuing Operations Before Income Taxes	4,712		242			(139		)	(1,082		)	—		1			3,734
Income Tax Expense (Benefit) from Continuing Operations	1,672		90			(160		)	(446		)	—		—			1,156
Income (Loss) from Continuing Operations	3,040		152			21			(636		)	—		1			2,578
Less: Net (Loss) Income Attributable to Noncontrolling Interest	—		—			(2		)	9			—		—			7
Segment Income / Other Net Expense	$	3,040	$	152		$	23		$	(645	)	$	—	$	1		$	2,571
Loss from Discontinued Operations, net of tax^(c)																	(419		)
Net Income Attributable to Duke Energy Corporation																	$	2,152

Segment Income / Other Net Expense	$	3,040	$	152		$	23		$	(645	)	$	—	$	1		$	2,571
Special Items	—		—			45			386			243		(1		)	673
Adjusted Earnings^(d)	$	3,040	$	152		$	68		$	(259	)	$	243	$	—		$	3,244


(a)	Commercial Renewables includes a pretax impairment charge of $71 million related to certain equity method investments in wind projects.


(b)	Other includes $234 million related to Piedmont acquisition financing, primarily due to losses on forward-starting interest rate swaps.


(c)	Includes a loss on the sale of the International Disposal Group and an impairment charge related to certain assets in Central America, partially offset by the operating results of the International Disposal Group and a tax benefit related to previously sold businesses.


(d)	See page 22 for a detailed reconciliation of Segment Income / Other Net Expense to Adjusted Earnings.

DUKE ENERGY CORPORATION

Consolidating Statements of Operations

(Unaudited)



	Twelve Months Ended December 31, 2015^(a)
(in millions)	Electric Utilities and Infrastructure			Gas Utilities and Infrastructure		Commercial Renewables			Other			International Energy		Eliminations / Adjustments			Duke Energy
Operating Revenues
Regulated electric	$	21,521		$	—	$	—		$	—		$	—	$	(142	)	$	21,379
Nonregulated electric and other	—			—		286			135			—		35			456
Regulated natural gas	—			541		—			—			—		(5		)	536
Total operating revenues	21,521			541		286			135			—		(112		)	22,371
Operating Expenses
Fuel used in electric generation and purchased power	7,308			—		—			48			—		(1		)	7,355
Cost of natural gas	—			141		—			—			—		—			141
Operation, maintenance and other	5,138			126		197			188			—		(110		)	5,539
Depreciation and amortization	2,735			79		104			135			—		—			3,053
Property and other taxes	1,013			62		18			35			—		1			1,129
Impairment charges^(b)	101			—		3			3			—		(1		)	106
Total operating expenses	16,295			408		322			409			—		(111		)	17,323
Gains on Sales of Other Assets and Other, net	5			6		1			18			—		—			30
Operating Income (Loss)	5,231			139		(35		)	(256		)	—		(1		)	5,078
Other Income and Expenses
Equity in earnings (losses) of unconsolidated affiliates	(2		)	1		(6		)	76			—		—			69
Other income and expenses, net	266			2		8			22			—		(8		)	290
Total Other Income and Expenses	264			3		2			98			—		(8		)	359
Interest Expense	1,074			25		44			393			—		(9		)	1,527
Income (Loss) from Continuing Operations Before Income Taxes	4,421			117		(77		)	(551		)	—		—			3,910
Income Tax Expense (Benefit) from Continuing Operations^(c)	1,602			44		(128		)	(262		)	—		—			1,256
Income (Loss) from Continuing Operations	2,819			73		51			(289		)	—		—			2,654
Less: Net (Loss) Income Attributable to Noncontrolling Interest	—			—		(1		)	10			—		—			9
Segment Income (Loss) / Other Net Expense	$	2,819		$	73	$	52		$	(299	)	$	—	$	—		$	2,645
Income from Discontinued Operations, net of tax^(d)																	171
Net Income Attributable to Duke Energy Corporation																	$	2,816

Segment Income (Loss) / Other Net Expense	$	2,819		$	73	$	52		$	(299	)	$	—	$	—		$	2,645
Special Items^(e)	79			—		1			276			151		—			507
Adjusted Earnings^(f)	$	2,898		$	73	$	53		$	(23	)	$	151	$	—		$	3,152


(a)	Amounts have been recast to conform to the current segment structure.


(b)	Electric Utilities and Infrastructure includes a pretax impairment charge of $88 million related to the Edwardsport settlement.


(c)	Other includes a state tax charge of $41 million resulting from the completion of the sale of the nonregulated Midwest generation business.


(d)	Includes results of the International Disposal Group and an after-tax charge of $53 million related to a settlement agreement reached in a lawsuit related to the Midwest Disposal Group.


(e)	Other includes $98 million for the operating results of the Midwest Generation Disposal Group classified as discontinued operations.


(f)	See page 23 for a detailed reconciliation of Segment Income (Loss) / Other Net Expense to Adjusted Earnings.

DUKE ENERGY CORPORATION

Consolidating Balance Sheets - Assets

(Unaudited)



	December 31, 2016
(in millions)	Electric Utilities and Infrastructure			Gas Utilities and Infrastructure			Commercial Renewables			Other			Eliminations / Adjustments			Duke Energy
Current Assets
Cash and cash equivalents	$	72		$	25		$	8		$	287		$	—		$	392
Receivables, net	451			228			24			47			1			751
Receivables of variable interest entities, net	1,871			—			22			—			—			1,893
Receivables from affiliated companies	25			31			769			3,075			(3,900		)	—
Notes receivable from affiliated companies	179			38			—			89			(306		)	—
Inventory	3,372			108			17			26			(1		)	3,522
Regulatory assets	806			124			—			93			—			1,023
Other	283			31			107			35			2			458
Total current assets	7,059			585			947			3,652			(4,204		)	8,039
Investments and Other Assets
Investments in equity method unconsolidated affiliates	93			566			185			81			—			925
Investments and advances to (from) subsidiaries	234			(7		)	9			52,478			(52,714		)	—
Nuclear decommissioning trust funds	6,205			—			—			—			—			6,205
Goodwill	17,379			1,924			122			—			—			19,425
Other	1,907			34			117			3,189			(2,495		)	2,752
Total investments and other assets	25,818			2,517			433			55,748			(55,209		)	29,307
Property, Plant and Equipment
Cost	106,271			8,922			4,344			1,860			—			121,397
Accumulated depreciation and amortization	(35,788		)	(2,047		)	(569		)	(1,002		)	—			(39,406		)
Generation facilities to be retired, net	529			—			—			—			—			529
Net property, plant and equipment	71,012			6,875			3,775			858			—			82,520
Regulatory Assets and Deferred Debits
Regulatory assets	11,590			785			—			503			—			12,878
Other	10			2			—			5			—			17
Total regulatory assets and deferred debits	11,600			787			—			508			—			12,895
Total Assets	115,489			10,764			5,155			60,766			(59,413		)	132,761
Segment reclassifications, intercompany balances and other	(496		)	(4		)	(778		)	(58,323		)	59,601			—
Segment Assets	$	114,993		$	10,760		$	4,377		$	2,443		$	188		$	132,761

DUKE ENERGY CORPORATION

Consolidating Balance Sheets - Liabilities and Equity

(Unaudited)



	December 31, 2016
(in millions)	Electric Utilities and Infrastructure			Gas Utilities and Infrastructure			Commercial Renewables			Other			Eliminations / Adjustments			Duke Energy
Current Liabilities
Accounts payable	$	2,301		$	233		$	57		$	403		$	—		$	2,994
Accounts payable to affiliated companies	3,427			5			174			248			(3,854		)	—
Notes payable to affiliated companies	143			1			—			186			(330		)	—
Notes payable and commercial paper	—			330			—			2,157			—			2,487
Taxes accrued	471			102			(267		)	79			(1		)	384
Interest accrued	328			38			—			139			(2		)	503
Current maturities of long-term debt	986			35			198			1,099			1			2,319
Asset retirement obligations	411			—			—			—			—			411
Regulatory liabilities	404			—			—			5			—			409
Other	1,360			99			53			551			(19		)	2,044
Total current liabilities	9,831			843			215			4,867			(4,205		)	11,551
Long-Term Debt	28,396			2,445			1,096			13,640			(1		)	45,576
Long-Term Debt Payable to Affiliated Companies	618			7			9			1,859			(2,493		)	—
Deferred Credits and Other Liabilities
Deferred income taxes	15,484			1,411			385			(3,124		)	(1		)	14,155
Investment tax credits	490			3			—			—			—			493
Accrued pension and other post-retirement benefit costs	718			31			—			362			—			1,111
Asset retirement obligations	10,071			42			85			1			1			10,200
Regulatory liabilities	6,111			733			—			37			—			6,881
Other	875			262			273			343			—			1,753
Total deferred credits and other liabilities	33,749			2,482			743			(2,381		)	—			34,593
Equity
Total Duke Energy Corporation stockholders' equity	42,895			4,987			3,072			42,792			(52,713		)	41,033
Noncontrolling interests	—			—			20			(11		)	(1		)	8
Total equity	42,895			4,987			3,092			42,781			(52,714		)	41,041
Total Liabilities and Equity	115,489			10,764			5,155			60,766			(59,413		)	132,761
Segment reclassifications, intercompany balances and other	(496		)	(4		)	(778		)	(58,323		)	59,601			—
Segment Liabilities and Equity	$	114,993		$	10,760		$	4,377		$	2,443		$	188		$	132,761

DUKE ENERGY CORPORATION

Consolidating Balance Sheets - Assets

(Unaudited)



	December 31, 2015^(a)
(in millions)	Electric Utilities and Infrastructure			Gas Utilities and Infrastructure			Commercial Renewables			Other			Eliminations / Adjustments			Duke Energy
Current Assets
Cash and cash equivalents	$	67		$	—		$	18		$	298		$	—		$	383
Receivables, net	459			(6		)	5			56			1			515
Receivables of variable interest entities, net	1,708			—			19			20			1			1,748
Receivables from affiliated companies	101			8			250			4,230			(4,589		)	—
Notes receivable from affiliated companies	112			—			—			1,131			(1,243		)	—
Inventory	3,689			14			18			25			—			3,746
Assets held for sale	—			—			—			746			—			746
Regulatory assets	788			7			—			82			—			877
Other	352			31			117			(191		)	(2		)	307
Total current assets	7,276			54			427			6,397			(5,832		)	8,322
Investments and Other Assets
Investments in equity method unconsolidated affiliates	57			113			265			64			—			499
Investments and advances to subsidiaries	47			—			11			46,925			(46,983		)	—
Nuclear decommissioning trust funds	5,825			—			—			—			—			5,825
Goodwill	15,656			294			122			—			—			16,072
Assets held for sale	—			—			—			2,413			—			2,413
Other	1,961			9			149			1,204			(493		)	2,830
Total investments and other assets	23,546			416			547			50,606			(47,476		)	27,639
Property, Plant and Equipment
Cost	102,104			2,584			3,587			1,692			—			109,967
Accumulated depreciation and amortization	(34,723		)	(651		)	(439		)	(923		)	—			(36,736		)
Generation facilities to be retired, net	548			—			—			—			—			548
Net property, plant and equipment	67,929			1,933			3,148			769			—			73,779
Regulatory Assets and Deferred Debits
Regulatory assets	10,639			195			—			539			—			11,373
Other	13			—			—			30			—			43
Total regulatory assets and deferred debits	10,652			195			—			569			—			11,416
Total Assets	109,403			2,598			4,122			58,341			(53,308		)	121,156
Segment reclassifications, intercompany balances and other	(306		)	39			(261		)	(52,968		)	53,496			—
Segment Assets	$	109,097		$	2,637		$	3,861		$	5,373		$	188		$	121,156


(a)	Amounts have been recast to conform to the current segment structure.

DUKE ENERGY CORPORATION

Consolidating Balance Sheets - Liabilities and Equity

(Unaudited)



	December 31, 2015^(a)
(in millions)	Electric Utilities and Infrastructure			Gas Utilities and Infrastructure			Commercial Renewables			Other			Eliminations / Adjustments			Duke Energy
Current Liabilities
Accounts payable	$	1,827		$	41		$	106		$	376		$	—		$	2,350
Accounts payable to affiliated companies	3,279			66			124			1,010			(4,479		)	—
Notes payable to affiliated companies	971			30			—			103			(1,104		)	—
Notes payable and commercial paper	—			—			—			3,633			—			3,633
Taxes accrued	422			(4		)	(240		)	110			1			289
Interest accrued	302			5			1			105			(1		)	412
Current maturities of long-term debt	1,073			28			108			817			—			2,026
Liabilities associated with assets held for sale	—			—			—			279			—			279
Regulatory liabilities	396			3			—			—			1			400
Other	1,548			6			37			521			(101		)	2,011
Total current liabilities	9,818			175			136			6,954			(5,683		)	11,400
Long-Term Debt	24,670			481			968			10,722			1			36,842
Long-Term Debt Payable to Affiliated Companies	618			7			17			—			(642		)	—
Deferred Credits and Other Liabilities
Deferred income taxes	14,305			463			347			(2,568		)	1			12,548
Investment tax credits	470			3			—			—			(1		)	472
Accrued pension and other post-retirement benefit costs	670			19			—			400			(1		)	1,088
Liabilities associated with assets held for sale	—			—			—			900			—			900
Asset retirement obligations	10,160			25			63			1			—			10,249
Regulatory liabilities	6,083			105			—			66			1			6,255
Other	970			63			255			344			(1		)	1,631
Total deferred credits and other liabilities	32,658			678			665			(857		)	(1		)	33,143
Equity
Total Duke Energy Corporation stockholders' equity	41,639			1,257			2,314			41,500			(46,983		)	39,727
Noncontrolling interests	—			—			22			22			—			44
Total equity	41,639			1,257			2,336			41,522			(46,983		)	39,771
Total Liabilities and Equity	109,403			2,598			4,122			58,341			(53,308		)	121,156
Segment reclassifications, intercompany balances and other	(306		)	39			(261		)	(52,968		)	53,496			—
Segment Liabilities and Equity	$	109,097		$	2,637		$	3,861		$	5,373		$	188		$	121,156


(a)	Amounts have been recast to conform to the current segment structure.

ELECTRIC UTILITIES AND INFRASTRUCTURE

Consolidating Segment Income

(Unaudited)



	Twelve Months Ended December 31, 2016
(in millions)	Duke Energy Carolinas			Duke Energy Progress		Duke Energy Florida		Duke Energy Ohio^(a)		Duke Energy Indiana		Commercial Transmission			Eliminations/ Adjustments			Electric Utilities and Infrastructure
Operating Revenues	7,322			5,277		4,568		1,410		2,958		—			(169		)	21,366
Operating Expenses
Fuel used in electric generation and purchased power	1,797			1,830		1,814		442		909		—			(197		)	6,595
Operation, maintenance and other	1,969			1,423		831		358		704		3			5			5,293
Depreciation and amortization	1,049			694		506		151		493		1			3			2,897
Property and other taxes	276			156		333		199		58		—			(2		)	1,020
Impairment charges	1			1		6		—		8		—			—			16
Total operating expenses	5,092			4,104		3,490		1,150		2,172		4			(191		)	15,821
(Loss) Gains on Sales of Other Assets and Other, net	(5		)	3		1		2		1		—			(2		)	—
Operating Income (Loss)	2,225			1,176		1,079		262		787		(4		)	20			5,545
Other Income and Expenses, net^(b)	162			71		44		5		22		6			(7		)	303
Interest Expense	424			257		212		58		181		—			4			1,136
Income Before Income Taxes	1,963			990		911		209		628		2			9			4,712
Income Tax Expense	693			335		337		55		234		1			17			1,672
Segment Income	$	1,270		$	655	$	574	$	154	$	394	$	1		$	(8	)	$	3,040


(a)	Includes results of the wholly owned subsidiary, Duke Energy Kentucky.


(b)	Includes an equity component of allowance for funds used during construction of $102 million for Duke Energy Carolinas, $50 million for Duke Energy Progress, $26 million for Duke Energy Florida, $5 million for Duke Energy Ohio, and $16 million for Duke Energy Indiana.

ELECTRIC UTILITIES AND INFRASTRUCTURE

Consolidating Segment Income

(Unaudited)



	Twelve Months Ended December 31, 2015^(a)
(in millions)	Duke Energy Carolinas			Duke Energy Progress		Duke Energy Florida		Duke Energy Ohio^(b)		Duke Energy Indiana		Commercial Transmission			Eliminations / Adjustments			Electric Utilities and Infrastructure
Operating Revenues	7,229			5,290		4,977		1,331		2,890		—			(196		)	21,521
Operating Expenses
Fuel used in electric generation and purchased power	1,881			2,029		2,195		446		982		—			(225		)	7,308
Operation, maintenance and other	1,923			1,402		810		323		666		3			11			5,138
Depreciation and amortization	1,044			643		473		147		434		—			(6		)	2,735
Property and other taxes	269			140		352		190		61		—			1			1,013
Impairment charges^(c)	1			5		7		—		88		—			—			101
Total operating expenses	5,118			4,219		3,837		1,106		2,231		3			(219		)	16,295
(Loss) Gains on Sales of Other Assets and Other, net	(1		)	3		—		2		1		—			—			5
Operating Income (Loss)	2,110			1,074		1,140		227		660		(3		)	23			5,231
Other Income and Expenses, net^(d)	160			71		24		3		11		2			(7		)	264
Interest Expense	412			235		198		53		176		—			—			1,074
Income Before Income Taxes	1,858			910		966		177		495		(1		)	16			4,421
Income Tax Expense	682			312		351		59		169		—			29			1,602
Segment Income (Loss)	$	1,176		$	598	$	615	$	118	$	326	$	(1	)	$	(13	)	$	2,819
Special Items	12			5		1		1		60		—			—			79
Adjusted Earnings (Loss) ^(e)	$	1,188		$	603	$	616	$	119	$	386	$	(1	)	$	(13	)	$	2,898


(a)	Amounts have been recast to conform to the current segment structure.


(b)	Includes results of the wholly owned subsidiary, Duke Energy Kentucky.


(c)	The amount for Duke Energy Indiana relates to the Edwardsport settlement.


(d)	Includes an equity component of allowance for funds used during construction of $96 million for Duke Energy Carolinas, $47 million for Duke Energy Progress, $7 million for Duke Energy Florida, $2 million for Duke Energy Ohio, and $11 million for Duke Energy Indiana.


(e)	See page 23 for a detailed reconciliation of Electric Utilities and Infrastructure Segment Income to Adjusted Earnings.

ELECTRIC UTILITIES AND INFRASTRUCTURE

Consolidating Balance Sheets - Assets

(Unaudited)



	December 31, 2016
(in millions)	Duke Energy Carolinas			Duke Energy Progress			Duke Energy Florida			Duke Energy Ohio^(a)			Duke Energy Indiana			Commercial Transmission			Eliminations/ Adjustments^(b)			Electric Utilities and Infrastructure
Current Assets
Cash and cash equivalents	$	14		$	11		$	16		$	13		$	17		$	—		$	1		$	72
Receivables, net	160			51			61			72			105			—			2			451
Receivables of variable interest entities, net	645			404			288			—			—			—			534			1,871
Receivables from affiliated companies	163			5			5			72			111			2			(333		)	25
Notes receivable from affiliated companies	66			165			—			58			86			—			(196		)	179
Inventory	1,055			1,076			641			96			504			—			—			3,372
Regulatory assets	238			188			213			9			149			—			9			806
Other	36			57			125			21			45			—			(1		)	283
Total current assets	2,377			1,957			1,349			341			1,017			2			16			7,059
Investments and Other Assets
Investments in equity method unconsolidated affiliates	—			—			1			—			—			92			—			93
Investments and advances to (from) subsidiaries	52			12			6			161			—			—			3			234
Nuclear decommissioning trust funds	3,273			2,217			715			—			—			—			—			6,205
Goodwill	—			—			—			596			—			—			16,783			17,379
Other	940			523			276			15			142			—			11			1,907
Total investments and other assets	4,265			2,752			998			772			142			92			16,797			25,818
Property, Plant and Equipment
Cost	41,127			28,419			16,434			5,377			14,241			4			669			106,271
Accumulated depreciation and amortization	(14,365		)	(10,561		)	(4,644		)	(1,892		)	(4,317		)	(1		)	(8		)	(35,788		)
Generation facilities to be retired, net	—			529			—			—			—			—			—			529
Net property, plant and equipment	26,762			18,387			11,790			3,485			9,924			3			661			71,012
Regulatory Assets and Deferred Debits
Regulatory assets	3,159			3,243			2,480			348			1,074			—			1,286			11,590
Other	3			2			2			1			1			—			1			10
Total regulatory assets and deferred debits	3,162			3,245			2,482			349			1,075			—			1,287			11,600
Total Assets	36,566			26,341			16,619			4,947			12,158			97			18,761			115,489
Intercompany balances and other	(298		)	(188		)	(132		)	(178		)	(53		)	(54		)	407			(496		)
Reportable Segment Assets	$	36,268		$	26,153		$	16,487		$	4,769		$	12,105		$	43		$	19,168		$	114,993


(a)	Includes balances of the wholly owned subsidiary, Duke Energy Kentucky.


(b)	Includes the elimination of intercompany balances, purchase accounting adjustments and restricted receivables related to Cinergy Receivables Company.

ELECTRIC UTILITIES AND INFRASTRUCTURE

Consolidating Balance Sheets - Liabilities and Equity

(Unaudited)



	December 31, 2016
(in millions)	Duke Energy Carolinas			Duke Energy Progress			Duke Energy Florida			Duke Energy Ohio^(a)			Duke Energy Indiana			Commercial Transmission			Eliminations/ Adjustments^(b)			Electric Utilities and Infrastructure
Current Liabilities
Accounts payable	$	833		$	589		$	413		$	200		$	262		$	—		$	4		$	2,301
Accounts payable to affiliated companies	247			227			125			13			7			54			2,754			3,427
Notes payable to affiliated companies	—			—			297			18			—			—			(172		)	143
Taxes accrued	150			107			37			139			32			1			5			471
Interest accrued	102			102			49			14			61			—			—			328
Current maturities of long-term debt	116			452			326			1			3			—			88			986
Asset retirement obligations	222			189			—			—			—			—			—			411
Regulatory liabilities	161			158			31			15			40			—			(1		)	404
Other	467			366			353			82			94			—			(2		)	1,360
Total current liabilities	2,298			2,190			1,631			482			499			55			2,676			9,831
Long-Term Debt	9,187			6,409			5,799			1,397			3,633			—			1,971			28,396
Long-Term Debt Payable to Affiliated Companies	300			150			—			18			150			—			—			618
Deferred Credits and Other Liabilities
Deferred income taxes	6,588			3,331			2,695			954			1,902			4			10			15,484
Investment tax credits	203			146			3			1			137			—			—			490
Accrued pension and other post-retirement benefit costs	97			252			262			36			71			—			—			718
Asset retirement obligations	3,673			4,508			778			48			866			—			198			10,071
Regulatory liabilities	2,840			1,946			448			129			748			—			—			6,111
Other	608			51			103			95			27			—			(9		)	875
Total deferred credits and other liabilities	14,009			10,234			4,289			1,263			3,751			4			199			33,749
Equity	10,772			7,358			4,900			1,787			4,125			38			13,915			42,895
Total Liabilities and Equity	36,566			26,341			16,619			4,947			12,158			97			18,761			115,489
Intercompany balances and other	(298		)	(188		)	(132		)	(178		)	(53		)	(54		)	407			(496		)
Reportable Segment Liabilities and Equity	$	36,268		$	26,153		$	16,487		$	4,769		$	12,105		$	43		$	19,168		$	114,993


(a)	Includes balances of the wholly owned subsidiary, Duke Energy Kentucky.


(b)	Includes the elimination of intercompany balances and purchase accounting adjustments.

ELECTRIC UTILITIES AND INFRASTRUCTURE

Consolidating Balance Sheets - Assets

(Unaudited)



	December 31, 2015^(a)
(in millions)	Duke Energy Carolinas			Duke Energy Progress			Duke Energy Florida			Duke Energy Ohio^(b)			Duke Energy Indiana			Commercial Transmission			Eliminations/ Adjustments^(c)			Electric Utilities and Infrastructure
Current Assets
Cash and cash equivalents	$	13		$	15		$	8		$	21		$	9		$	—		$	1		$	67
Receivables, net	142			87			60			70			96			—			4			459
Receivables of variable interest entities, net	596			349			308			—			—			—			455			1,708
Receivables from affiliated companies	113			16			85			22			29			3			(167		)	101
Notes receivable from affiliated companies	163			—			—			—			83			—			(134		)	112
Inventory	1,276			1,088			663			92			570			—			—			3,689
Regulatory assets	305			264			98			19			102			—			—			788
Other	95			113			39			69			15			—			22			352
Total current assets	2,703			1,932			1,261			293			904			3			181			7,276
Investments and Other Assets
Investments in equity method unconsolidated affiliates	—			—			2			—			—			55			—			57
Investments and advances (from) to subsidiaries	(48		)	2			(3		)	100			—			—			(4		)	47
Nuclear decommissioning trust funds	3,050			2,035			740			—			—			—			—			5,825
Goodwill	—			—			—			596			—			—			14,736			15,656
Other	999			485			289			23			209			—			(44		)	1,961
Total investments and other assets	4,001			2,522			1,028			719			209			55			14,688			23,546
Property, Plant and Equipment
Cost	39,398			27,313			15,343			5,165			14,007			4			874			102,104
Accumulated depreciation and amortization	(13,521		)	(10,141		)	(4,720		)	(1,856		)	(4,484		)	—			(1		)	(34,723		)
Generation facilities to be retired, net	—			548			—			—			—			—			—			548
Net property, plant and equipment	25,877			17,720			10,623			3,309			9,523			4			873			67,929
Regulatory Assets and Deferred Debits
Regulatory assets	2,766			2,667			2,725			311			716			—			1,453			10,639
Other	4			3			2			2			2			—			—			13
Total regulatory assets and deferred debits	2,770			2,670			2,727			313			718			—			1,453			10,652
Total Assets	35,351			24,844			15,639			4,634			11,354			62			17,195			109,403
Intercompany balances and other	(94		)	(140		)	(105		)	(107		)	(42		)	(50		)	232			(306		)
Reportable Segment Assets	$	35,257		$	24,704		$	15,534		$	4,527		$	11,312		$	12		$	17,427		$	109,097


(a)	Amounts have been recast to conform to current segment structure.


(b)	Includes balances of the wholly owned subsidiary, Duke Energy Kentucky.


(c)	Includes the elimination of intercompany balances, purchase accounting adjustments and restricted receivables related to Cinergy Receivables Company.

ELECTRIC UTILITIES AND INFRASTRUCTURE

Consolidating Balance Sheets - Liabilities and Equity

(Unaudited)



	December 31, 2015^(a)
(in millions)	Duke Energy Carolinas			Duke Energy Progress			Duke Energy Florida			Duke Energy Ohio^(b)			Duke Energy Indiana			Commercial Transmission			Eliminations/ Adjustments^(c)			Electric Utilities and Infrastructure
Current Liabilities
Accounts payable	$	753		$	399		$	322		$	161		$	189		$	—		$	4		$	1,827
Accounts payable to affiliated companies	137			162			106			23			35			51			2,765			3,279
Notes payable to affiliated companies	—			209			813			73			—			—			(123		)	971
Taxes accrued	25			15			139			151			92			—			(1		)	422
Interest accrued	95			96			43			13			56			—			(1		)	302
Current maturities of long-term debt	356			2			13			78			547			—			77			1,073
Regulatory liabilities	39			85			200			9			62			—			1			396
Other	519			412			452			67			97			—			—			1,548
Total current liabilities	1,924			1,380			2,088			575			1,078			51			2,722			9,818
Long-Term Debt	7,711			6,366			4,253			986			3,071			—			2,284			24,670
Long-Term Debt Payable to Affiliated Companies	300			150			—			18			150			—			—			618
Deferred Credits and Other Liabilities
Deferred income taxes	6,163			3,005			2,478			960			1,657			2			40			14,305
Investment tax credits	199			132			—			1			138			—			—			470
Accrued pension and other post-retirement benefit costs	107			262			242			35			80			—			(56		)	670
Asset retirement obligations	3,918			4,567			802			99			525			—			249			10,160
Regulatory liabilities	2,802			1,878			509			140			754			—			—			6,083
Other	621			45			146			100			65			—			(7		)	970
Total deferred credits and other liabilities	13,810			9,889			4,177			1,335			3,219			2			226			32,658
Equity	11,606			7,059			5,121			1,720			3,836			9			11,963			41,639
Total Liabilities and Equity	35,351			24,844			15,639			4,634			11,354			62			17,195			109,403
Intercompany balances and other	(94		)	(140		)	(105		)	(107		)	(42		)	(50		)	232			(306		)
Reportable Segment Liabilities and Equity	$	35,257		$	24,704		$	15,534		$	4,527		$	11,312		$	12		$	17,427		$	109,097


(a)	Amounts have been recast to conform to the current segment structure.


(b)	Includes balances of the wholly owned subsidiary, Duke Energy Kentucky.


(c)	Includes the elimination of intercompany balances and purchase accounting adjustments.

GAS UTILITIES AND INFRASTRUCTURE

Consolidating Segment Income

(Unaudited)



	Twelve Months Ended December 31, 2016
(in millions)	Duke Energy Ohio^(a)		Piedmont Natural Gas LDC^(b)		Mid-Stream Pipelines and Storage^(b)(c)			Eliminations/ Adjustments			Gas Utilities and Infrastructure
Operating Revenues	503		398		—			—			901
Operating Expenses
Cost of natural gas	103		161		—			1			265
Operation, maintenance and other	116		70		2			(2		)	186
Depreciation and amortization	80		35		—			—			115
Property and other taxes	59		11		—			—			70
Total operating expenses	358		277		2			(1		)	636
Gains on Sales of Other Assets and Other, net	—		—		—			(1		)	(1		)
Operating Income (Loss)	145		121		(2		)	—			264
Other Income and Expenses
Equity in earnings of unconsolidated affiliates	—		—		19			—			19
Other income and expenses, net	3		1		2			(1		)	5
Total Other Income and Expenses	3		1		21			(1		)	24
Interest Expense	27		20		—			(1		)	46
Income Before Income Taxes	121		102		19			—			242
Income Tax Expense	44		37		7			2			90
Segment Income	$	77	$	65	$	12		$	(2	)	$	152


(a)	Includes results of the wholly owned subsidiary, Duke Energy Kentucky.


(b)	Includes Piedmont's results subsequent to the acquisition on October 3, 2016.


(c)	Includes earnings from investments in ACP, Sabal Trail, Constitution and Cardinal pipelines, as well as Hardy and Pine Needle storage facilities.

GAS UTILITIES AND INFRASTRUCTURE

Consolidating Segment Income

(Unaudited)



	Twelve Months Ended December 31, 2015
(in millions)	Duke Energy Ohio^(a)		Mid-Stream Pipelines			Eliminations/ Adjustments			Gas Utilities and Infrastructure
Operating Revenues	$	541	$	—		$	—		$	541
Operating Expenses
Cost of natural gas	141		—			—			141
Operation, maintenance and other	125		1			—			126
Depreciation and amortization	79		—			—			79
Property and other taxes	62		—			—			62
Total operating expenses	407		1			—			408
Gains on Sales of Other Assets and Other, net	7		—			(1		)	6
Operating Income (Loss)	141		(1		)	(1		)	139
Other Income and Expenses	2		—			1			3
Interest Expense	25		—			—			25
Income (Loss) Before Income Taxes	118		(1		)	—			117
Income Tax Expense	45		—			(1		)	44
Segment Income(Loss)	$	73	$	(1	)	$	1		$	73


(a)	Includes results of the wholly owned subsidiary, Duke Energy Kentucky.

GAS UTILITIES AND INFRASTRUCTURE

Consolidating Balance Sheets - Assets

(Unaudited)



	December 31, 2016
(in millions)	Duke Energy Ohio^(a)			Piedmont Natural Gas LDC			Mid-Stream Pipelines and Storage		Eliminations/ Adjustments^(b)			Gas Utilities and Infrastructure
Current Assets
Cash and cash equivalents	$	—		$	25		$	—	$	—		$	25
Receivables, net	(4		)	232			—		—			228
Receivables from affiliated companies	21			7			—		3			31
Notes receivable from affiliated companies	38			—			—		—			38
Inventory	41			66			—		1			108
Regulatory assets	6			117			—		1			124
Other	12			21			—		(2		)	31
Total current assets	114			468			—		3			585
Investments and Other Assets
Investments in equity method unconsolidated affiliates	—			—			566		—			566
Investments and advances from subsidiaries	—			—			—		(7		)	(7		)
Goodwill	324			49			—		1,551			1,924
Other	2			19			12		1			34
Total investments and other assets	326			68			578		1,545			2,517
Property, Plant and Equipment
Cost	2,748			6,174			—		—			8,922
Accumulated depreciation and amortization	(687		)	(1,360		)	—		—			(2,047		)
Net property, plant and equipment	2,061			4,814			—		—			6,875
Regulatory Assets and Deferred Debits
Regulatory assets	196			379			—		210			785
Other	—			2			—		—			2
Total regulatory assets and deferred debits	196			381			—		210			787
Total Assets	2,697			5,731			578		1,758			10,764
Intercompany balances and other	(1		)	91			—		(94		)	(4		)
Reportable Segment Assets	$	2,696		$	5,822		$	578	$	1,664		$	10,760


(a)	Includes balances of the wholly owned subsidiary, Duke Energy Kentucky.


(b)	Includes the elimination of intercompany balances and purchase accounting adjustments.

GAS UTILITIES AND INFRASTRUCTURE

Consolidating Balance Sheets - Liabilities and Equity

(Unaudited)



	December 31, 2016
(in millions)	Duke Energy Ohio^(a)			Piedmont Natural Gas LDC			Mid-Stream Pipelines and Storage		Eliminations/ Adjustments^(b)			Gas Utilities and Infrastructure
Current Liabilities
Accounts payable	$	78		$	155		$	—	$	—		$	233
Accounts payable to affiliated companies	4			4			25		(28		)	5
Notes payable to affiliated companies	1			—			—		—			1
Notes payable and commercial paper	—			330			—		—			330
Taxes accrued	27			(14		)	89		—			102
Interest accrued	5			33			—		—			38
Current maturities of long-term debt	—			35			—		—			35
Regulatory liabilities	6			(6		)	—		—			—
Other	3			96			—		—			99
Total current liabilities	124			633			114		(28		)	843
Long-Term Debt	462			1,786			—		197			2,445
Long-Term Debt Payable to Affiliated Companies	7			—			—		—			7
Deferred Credits and Other Liabilities
Deferred income taxes	480			904			28		(1		)	1,411
Investment tax credits	2			1			—		—			3
Accrued pension and other post-retirement benefit costs	17			14			—		—			31
Asset retirement obligations	28			14			—		—			42
Regulatory liabilities	108			608			—		17			733
Other	68			194			—		—			262
Total deferred credits and other liabilities	703			1,735			28		16			2,482
Equity	1,401			1,577			436		1,573			4,987
Total Liabilities and Equity	2,697			5,731			578		1,758			10,764
Intercompany balances and other	(1		)	91			—		(94		)	(4		)
Reportable Segment Liabilities and Equity	$	2,696		$	5,822		$	578	$	1,664		$	10,760


(a)	Includes balances of the wholly owned subsidiary, Duke Energy Kentucky.


(b)	Includes the elimination of intercompany balances and purchase accounting adjustments.

GAS UTILITIES AND INFRASTRUCTURE

Consolidating Balance Sheets - Assets

(Unaudited)



	December 31, 2015
(in millions)	Duke Energy Ohio^(a)			Mid-Stream Pipelines		Eliminations/ Adjustments^(b)			Gas Utilities and Infrastructure
Current Assets
Receivables, net	$	(6	)	$	—	$	—		$	(6	)
Receivables from affiliated companies	16			—		(8		)	8
Inventory	14			—		—			14
Regulatory assets	7			—		—			7
Other	31			—		—			31
Total current assets	62			—		(8		)	54
Investments and Other Assets
Investments in equity method unconsolidated affiliates	—			113		—			113
Goodwill	324			—		(30		)	294
Other	9			—		—			9
Total investments and other assets	333			113		(30		)	416
Property, Plant and Equipment
Cost	2,584			—		—			2,584
Accumulated depreciation and amortization	(651		)	—		—			(651		)
Net property, plant and equipment	1,933			—		—			1,933
Regulatory Assets and Deferred Debits
Regulatory assets	195			—		—			195
Total Assets	2,523			113		(38		)	2,598
Intercompany balances and other	(20		)	—		59			39
Reportable Segment Assets	$	2,503		$	113	$	21		$	2,637


(a)	Includes balances of the wholly owned subsidiary, Duke Energy Kentucky.


(b)	Includes the elimination of intercompany balances and purchase accounting adjustments.

GAS UTILITIES AND INFRASTRUCTURE

Consolidating Balance Sheets - Liabilities and Equity

(Unaudited)



	December 31, 2015
(in millions)	Duke Energy Ohio^(a)			Mid-Stream Pipelines		Eliminations/ Adjustments^(b)			Gas Utilities and Infrastructure
Current Liabilities
Accounts payable	$	41		$	—	$	—		$	41
Accounts payable to affiliated companies	13			61		(8		)	66
Notes payable to affiliated companies	30			—		—			30
Taxes accrued	(4		)	—		—			(4		)
Interest accrued	5			—		—			5
Current maturities of long-term debt	28			—		—			28
Regulatory liabilities	3			—		—			3
Other	6			—		—			6
Total current liabilities	122			61		(8		)	175
Long-Term Debt	481			—		—			481
Long-Term Debt Payable to Affiliated Companies	7			—		—			7
Deferred Credits and Other Liabilities
Deferred income taxes	464			—		(1		)	463
Investment tax credits	3			—		—			3
Accrued pension and other post-retirement benefit costs	19			—		—			19
Asset retirement obligations	25			—		—			25
Regulatory liabilities	105			—		—			105
Other	62			—		1			63
Total deferred credits and other liabilities	678			—		—			678
Equity	1,235			52		(30		)	1,257
Total Liabilities and Equity	2,523			113		(38		)	2,598
Intercompany balances and other	(20		)	—		59			39
Reportable Segment Liabilities and Equity	$	2,503		$	113	$	21		$	2,637


(a)	Includes balances of the wholly owned subsidiary, Duke Energy Kentucky.


(b)	Includes the elimination of intercompany balances.

Revenues By Customer Class

(Unaudited)



	Twelve Months Ended December 31, 2016
(in millions)	Duke Energy Carolinas		Duke Energy Progress		Duke Energy Florida			Duke Energy Ohio		Duke Energy Indiana		Piedmont Natural Gas^(a)		Eliminations / Adjustments			Total
Regulated Electric Revenues
Residential	$	2,933	$	1,897	$	2,473		$	755	$	983	$	—	$	—		$	9,041
General service	2,299		1,323		1,373			442		741		—		—			6,178
Industrial	1,287		638		251			121		726		—		—			3,023
Wholesale	457		1,078		185			20		334		—		—			2,074
Change in unbilled	29		22		(11		)	13		26		—		—			79
Other revenues	317		319		297			59		148		—		(169		)	971
Total Electric Revenues	$	7,322	$	5,277	$	4,568		$	1,410	$	2,958	$	—	$	(169	)	$	21,366

Regulated Natural Gas Revenues
Residential	$	—	$	—	$	—		$	324	$	—	$	154	$	—		$	478
Commercial	—		—		—			128		—		83		—			211
Industrial	—		—		—			18		—		31		—			49
Power Generation	—		—		—			—		—		21		—			21
Change in unbilled	—		—		—			14		—		74		—			88
Other revenues	—		—		—			19		—		35		—			54
Total Natural Gas Revenues	$	—	$	—	$	—		$	503	$	—	$	398	$	—		$	901


(a)	Includes Piedmont's results subsequent to the acquisition on October 3, 2016.



	Twelve Months Ended December 31, 2015
(in millions)	Duke Energy Carolinas			Duke Energy Progress			Duke Energy Florida			Duke Energy Ohio			Duke Energy Indiana			Eliminations / Adjustments			Total
Regulated Electric Revenues
Residential	$	2,991		$	1,943		$	2,651		$	715		$	991		$	—		$	9,291
General service	2,276			1,339			1,546			433			734			—			6,328
Industrial	1,319			664			294			115			734			—			3,126
Wholesale	415			1,005			234			37			312			—			2,003
Change in unbilled	(15		)	(15		)	(12		)	—			(15		)	—			(57		)
Other revenues	243			354			264			31			134			(196		)	830
Total Electric Revenues	$	7,229		$	5,290		$	4,977		$	1,331		$	2,890		$	(196	)	$	21,521

Regulated Natural Gas Revenues
Residential	$	—		$	—		$	—		$	362		$	—		$	—		$	362
Commercial	—			—			—			148			—			—			148
Industrial	—			—			—			21			—			—			21
Change in unbilled	—			—			—			(5		)	—			—			(5		)
Other revenues	—			—			—			15			—			—			15
Total Natural Gas Revenues	$	—		$	—		$	—		$	541		$	—		$	—		$	541

DUKE ENERGY CORPORATION

REPORTED TO ADJUSTED EARNINGS RECONCILIATION

Twelve Months Ended December 31, 2016

(Dollars in millions, except per share amounts)



				Special Items
	Reported Earnings			Costs to Achieve Mergers			Cost Savings Initiatives			Commercial Renewables Impairment			International Energy Operations				Discontinued Operations				Total Adjustments			Adjusted Earnings
SEGMENT INCOME
Electric Utilities and Infrastructure	$	3,040		$	—		$	—		$	—		$	—			$	—			$	—		$	3,040
Gas Utilities and Infrastructure	152			—			—			—			—				—				—			152
Commercial Renewables	23			—			—			45		C	—				—				45			68
Total Reportable Segment Income	3,215			—			—			45			—				—				45			3,260
International Energy	—			—			—			—			243			D	—				243			243
Other	(645		)	329		A	57		B	—			—				—				386			(259		)
Intercompany Eliminations	1			—			—			—			—				(1		)		(1		)	—
Discontinued Operations	(419		)	—			—			—			(243		)	D	662			E	419			—
Net Income Attributable to Duke Energy Corporation	$	2,152		$	329		$	57		$	45		$	—			$	661			$	1,092		$	3,244
EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, DILUTED	$	3.11		$	0.48		$	0.08		$	0.07		$	—			$	0.95			$	1.58		$	4.69

A - Net of $194 million tax benefit. Includes $11 million recorded within Operating Revenues, $278 million recorded within Operating Expenses and $234 million recorded within Interest Expense on the 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 $35 million tax benefit. Primarily consists of severance costs recorded within Operation, maintenance and other on the 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 Consolidated Statements of Operations.

D - Net of $27 million tax expense. Operating results of the International Disposal Group, which exclude the loss and impairment described below and other miscellaneous transaction-related costs, recorded within (Loss) Income from Discontinued Operations, net of tax on the Consolidated Statements of Operations.

E - Recorded within (Loss) Income From Discontinued Operations, net of tax on the Consolidated Statements of Operations. Includes a loss on the sale of the International Disposal Group, an impairment charge related to certain assets in Central America, and a tax benefit related to previously sold businesses.

Weighted Average Shares, Diluted (reported and adjusted) - 691 million

DUKE ENERGY CORPORATION

REPORTED TO ADJUSTED EARNINGS RECONCILIATION

Twelve Months Ended December 31, 2015

(Dollars in millions, except per share amounts)



				Special Items
	Reported Earnings			Costs to Achieve Mergers			Edwardsport Settlement			Midwest Generation Operations				Ash Basin Settlement and Penalties			Cost Savings Initiatives			International Energy Operations				Discontinued Operations			Total Adjustments			Adjusted Earnings
SEGMENT INCOME
Electric Utilities and Infrastructure	$	2,819		$	—		$	58	B	$	—			$	11	D	$	10	E	$	—			$	—		$	79		$	2,898
Gas Utilities and Infrastructure	73			—			—			—				—			—			—				—			—			73
Commercial Renewables	52			—			—			—				—			1		F	—				—			1			53
Total Reportable Segment Income	2,944			—			58			—				11			11			—				—			80			3,024
International Energy	—			—			—			—				—			—			151			H	—			151			151
Other	(299		)	60		A	—			98			C	—			77		G	—				41		I	276			(23		)
Discontinued Operations	171			—			—			(98		)	C	—			—			(151		)	H	78		J	(171		)	—
Net Income Attributable to Duke Energy Corporation	$	2,816		$	60		$	58		$	—			$	11		$	88		$	—			$	119		$	336		$	3,152
EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, DILUTED	$	4.05		$	0.09		$	0.08		$	—			$	0.02		$	0.13		$	—			$	0.17		$	0.49		$	4.54

A - Net of $37 million tax benefit. $95 million recorded within Operating Expenses and $2 million recorded within Interest Expense on the Consolidated Statements of Operations.

B - Net of $35 million tax benefit. $88 million recorded within Impairment charges and $5 million recorded within Other income and expenses, net on the Duke Energy Indiana Consolidated Statements of Operations.

C - Net of $53 million tax expense. Operating results of the nonregulated Midwest generation business classified as discontinued operations, which exclude special items and economic hedges.

D - Net of $3 million tax benefit. Recorded within Operation, maintenance and other on the Consolidated Statements of Operations. Includes $8 million and $6 million at Duke Energy Carolinas and Duke Energy Progress, respectively.

E - Net of $6 million tax benefit. Primarily consists of severance costs recorded within Operation, maintenance and other on the Consolidated Statements of Operations. Includes $7 million at Duke Energy Carolinas, $4 million at Duke Energy Progress, $2 million at Duke Energy Florida, $1 million at Duke Energy Ohio and $2 million at Duke Energy Indiana.

F - Net of $1 million tax benefit. Primarily consists of severance costs recorded within Operation, maintenance and other on the Consolidated Statements of Operations.

G - Net of $47 million tax benefit. Primarily consists of severance costs recorded within Operation, maintenance and other on the Consolidated Statements of Operations.

H - Net of $70 million tax expense. Operating results of the International Disposal Group classified as discontinued operations.

I - State tax expense resulting from the completion of the sale of the nonregulated Midwest generation business.

J - Recorded in Income (Loss) From Discontinued Operations, net of tax on the Consolidated Statements of Operations, and includes the impact of a litigation reserve related to the nonregulated Midwest generation business.

Weighted Average Shares Outstanding, Diluted (reported and adjusted) - 694 million

DUKE ENERGY CORPORATION

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 attributable to Duke Energy, adjusted for the dollar and per share impact of special items. As discussed below, special items include certain charges and credits, which management believes are not indicative of Duke Energy's ongoing performance. 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 financial results to the Duke Energy Board of Directors, employees, stockholders, analysts and investors. 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 represent charges that result from potential or completed strategic acquisitions.


•	Cost savings initiatives represents severance charges related to company-wide initiatives to standardize processes and systems, leverage technology and workforce optimization.


•	Commercial Renewables Impairment and Asset impairment represent other-than-temporary impairments.


•	Edwardsport Settlement and Ash Basin Settlement and Penalties represent charges related to Plea Agreements and settlement agreements with regulators and other governmental entities.

Adjusted earnings also include the operating results of the nonregulated Midwest generation business and Duke Energy Retail Sales (collectively, the Midwest Generation Disposal Group) and the International Disposal Group, which have been classified as discontinued operations. Management believes inclusion of the operating results of the Disposal Groups within adjusted earnings and adjusted diluted EPS results is 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 attributable to Duke Energy. Segment income 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 special items, which are discussed above. Management believes the presentation of adjusted segment income 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 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 expense 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 companies may not calculate the measures in the same manner.

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