Exhibit 99.1
Media Contact: Tom Shiel
Office: 704.382.2355 | 24-Hour: 800.559.3853
Analysts: Bill Currens
Office: 704.382.1603
May 7, 2014
Duke Energy reports strong first quarter 2014 adjusted earnings
| | • | | First quarter 2014 adjusted diluted earnings per share (EPS) were $1.17, compared to $1.02 for the first quarter 2013 |
| | • | | Reported diluted net loss per share for first quarter 2014 of 14 cents, compared to reported diluted EPS of 89 cents for the first quarter 2013 |
| | • | | Reported results for first quarter 2014 include a pre-tax impairment charge of approximately $1.4 billion, or $1.23 per share, to write-down the company’s Midwest Generation business to its estimated fair value |
| | • | | Company affirms its 2014 adjusted earnings guidance range of $4.45 to $4.60 per share |
CHARLOTTE, N.C. – Duke Energy today announced first quarter 2014 adjusted diluted EPS of $1.17, compared to $1.02 for first quarter 2013, and a reported diluted net loss per share of 14 cents, compared to reported diluted EPS of 89 cents for the same period last year.
Higher adjusted diluted EPS results for the quarter were led by the company’s largest business unit, Regulated Utilities, which benefitted from revised customer rates and strong weather-normalized retail volumes. International Energy also experienced stronger results in Latin America despite unfavorable foreign currency exchange rates.
Reported results for the quarter were affected by a pre-tax impairment charge of $1.4 billion, or $1.23 per share, to write-down the company’s Midwest Generation business to its estimated fair value. In February 2014, the company announced it had initiated a process to exit this business. This impairment is a special item that has been excluded from the company’s adjusted diluted EPS results.
Based upon results through the first quarter, the company is on track to achieve its 2014 adjusted earnings guidance range of $4.45 to $4.60 per share.
“I am proud of the way our team responded to challenging events in the first quarter – the severe winter weather and the Dan River coal ash release,” said Lynn Good,
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president and CEO. “Our employees demonstrated great discipline and resolve in meeting customer needs and our financial commitments during the quarter.
“For the third consecutive quarter, we experienced improved economic growth throughout our service territories,” she added. “We remain on track with our strategic initiatives to maximize value from our commercial businesses and to develop investment opportunities that underpin our financial objectives.”
Business Unit Results
The discussion below of first-quarter results includes adjusted segment income, which is a non-GAAP financial measure. The tables on pages 21 and 22 present a reconciliation of reported results to adjusted results.
Regulated Utilities
Regulated Utilities recognized first quarter 2014 adjusted segment income of $737 million, compared to $656 million in the first quarter 2013, an increase of $0.11 per share.
Increased quarterly results at Regulated Utilities were primarily driven by:
| | • | | Higher revenues from increased pricing and riders (+$0.12 per share) primarily related to the implementation of revised customer rates |
| | • | | Favorable weather (+$0.08 per share), driven by the extreme cold winter temperatures across Duke Energy’s service territories |
| | • | | Higher weather-normal retail volumes (+$0.06 per share) of 2.6 percent compared to 2013, principally within the residential and commercial customer classes |
| | • | | Increased wholesale net margins (+$0.03 per share) primarily resulting from growth in contracted amounts as well as favorable weather |
These favorable drivers were partially offset by:
| | • | | Higher depreciation and amortization expense (-$0.07 per share), including the impact of prior-year cost of removal amortization in Florida |
| | • | | Increased operating and maintenance expenses (-$0.05 per share) due to higher storm restoration costs (-$0.07 per share); excluding these storm costs, operating and maintenance expenses were lower primarily resulting from the company’s ongoing cost management efforts and nuclear outage cost levelization in the Carolinas |
| | • | | Higher interest expense (-$0.03 per share), due to lower post-in-service debt returns on projects now reflected in customer rates |
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| | • | | Lower AFUDC equity (-$0.02 per share), driven by the completion of capital projects |
International Energy
International Energy recognized first quarter 2014 adjusted segment income of $130 million, compared to $97 million in the first quarter 2013, an increase of $0.04 per share.
International Energy’s improved quarterly earnings were driven by stronger results in Latin America (+$0.06 per share), primarily due to higher spot volumes and pricing in Brazil. This driver was partially offset by unfavorable foreign currency exchange rates (-$0.02 per share).
Commercial Power
Commercial Power recognized first quarter 2014 adjusted segment income of $10 million, compared to a segment income of $6 million in the first quarter 2013.
Higher earnings from the renewables business (+$0.01 per share), driven by favorable wind production and lower costs, were partially offset by lower earnings from the company’s competitive retail business, Duke Energy Retail (-$0.01).
Other
On an adjusted basis, Other primarily includes corporate interest expense not allocated to the business units, results from Duke Energy’s captive insurance company, other investments, and income tax levelization adjustments.
Other recognized a first quarter 2014 adjusted net expense of $48 million, compared to $43 million in the first quarter 2013.
Earnings Conference Call for Analysts
An earnings conference call for analysts will be held at 10 a.m. ET today to discuss Duke Energy’s financial performance for the first quarter 2014 as well as providing other business updates.
The conference call will be hosted by Lynn Good, president and chief executive officer, and Steve Young, executive vice president and chief financial officer.
The call can be accessed via the investors’ section (http://www.duke-energy.com/investors/) of Duke Energy’s website or by dialing 888-438-5449 in the United States or 719-325-2475 outside the United States. The confirmation code is 5210970. 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, May 17, 2014, by calling 888-203-1112 in the United States or 719-457-0820 outside the United States and using the code 5210970. A replay and transcript also will be available by accessing the investors’ section of the company’s website.
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Special Items and Non-GAAP Reconciliation
Special items affecting Duke Energy’s adjusted diluted EPS for first quarter 2014 and first quarter 2013 include:
| | | | | | | | | | | | | | | | |
(In millions, except per-share amounts) | | Pre-Tax
Amount | | | Tax
Effect | | | 1Q2014
EPS
Impact | | | 1Q2013
EPS
Impact | |
First Quarter 2014 | | | | | | | | | | | | | | | | |
• Midwest Generation Impairment | | $ | (1,381 | ) | | $ | 514 | | | $ | (1.23 | ) | | | | |
• Costs to Achieve, Progress Energy Merger | | $ | (55 | ) | | $ | 21 | | | $ | (0.04 | ) | | | | |
• Economic Hedges (Mark-to-Market) | | $ | (34 | ) | | $ | 12 | | | $ | (0.03 | ) | | | | |
• Discontinued Operations | | $ | (1 | ) | | $ | (2 | ) | | $ | (0.01 | ) | | | | |
First Quarter 2013 | | | | | | | | | | | | | | | | |
• Costs to Achieve, Progress Energy Merger | | $ | (55 | ) | | $ | 21 | | | | | | | $ | (0.05 | ) |
• Economic Hedges (Mark-to-Market) | | $ | (75 | ) | | $ | 27 | | | | | | | $ | (0.08 | ) |
| | | | | | | | | | | | | | | | |
Total diluted EPS impact | | | | | | | | | | $ | (1.31 | ) | | $ | (0.13 | ) |
| | | | | | | | | | | | | | | | |
Reconciliation of reported to adjusted diluted EPS for the quarters:
| | | | | | | | |
| | | 1Q2014
EPS | | | 1Q2013
EPS | |
Diluted EPS, as reported | | ($ | 0.14 | ) | | $ | 0.89 | |
Adjustments to reported EPS: | | | | | | | | |
• Diluted EPS impact of special items, mark-to-market in Commercial Power, and discontinued operations (net of tax) | | $ | 1.31 | | | $ | 0.13 | |
| | | | | | | | |
Diluted EPS, adjusted | | $ | 1.17 | | | $ | 1.02 | |
| | | | | | | | |
Non-GAAP financial measures
Management evaluates financial performance in part based on the non-GAAP financial measures, adjusted earnings and adjusted diluted earnings per share (EPS). These items are measured as income from continuing operations after deducting income attributable to noncontrolling interests, adjusted for the dollar and per share impact of special items and mark-to-market impacts of economic hedges in the Commercial Power segment. Special items represent certain charges and credits, which management believes will not be recurring on a regular basis, although it is reasonably possible such charges and credits could recur. Mark-to-market adjustments reflect the impact of derivative contracts, which are used in Duke Energy’s hedging of a portion of the economic value of its generation assets in the Commercial Power segment. 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
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impacts of mark-to-market changes of the derivative contracts from adjusted earnings until settlement better matches the financial impacts of the derivative contract with the portion of economic value of the underlying hedged asset. Management believes the presentation of adjusted earnings and adjusted diluted EPS provides useful information to investors, as it provides them an additional relevant comparison of Duke Energy’s performance across periods. Management uses these non-GAAP financial measures for planning and forecasting and for reporting results to the Board of Directors, employees, shareholders, analysts and investors concerning Duke Energy’s financial performance. The most directly comparable GAAP measures for adjusted earnings and adjusted diluted EPS are Net Income Attributable to Duke Energy Corporation and Diluted EPS attributable to Duke Energy Corporation common shareholders, which include the dollar and per share impact of special items, mark-to-market impacts of economic hedges in the Commercial Power segment and discontinued operations.
Management evaluates segment performance based on segment income. Segment income is defined as income from continuing operations net of income attributable to noncontrolling interests. Segment income, as discussed below, includes intercompany revenues and expenses that are eliminated in the 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 and mark-to-market impacts of economic hedges in the Commercial Power segment. 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 is segment income, which represents segment income from continuing operations, including any special items and mark-to-market impacts of economic hedges in the Commercial Power segment.
Due to the forward-looking nature of any forecasted adjusted earnings guidance, information to reconcile this non-GAAP financial measure to the most directly comparable GAAP financial measure is not available at this time, as management is unable to project all special items or mark-to-market adjustments for future periods. The earnings guidance range assumptions for 2014 include a full-year of earnings contributions from the Midwest generation fleet, which management has begun a process to exit. Irrespective of whether this business is reclassified as discontinued operations for accounting purposes, management expects to continue including any Midwest generation fleet earnings in adjusted earnings, adjusted diluted EPS, and adjusted segment income. Management believes it is unlikely a sale transaction will close in 2014.
Due to the forward-looking nature of any forecasted adjusted segment income or adjusted Other net expenses and any related growth rates for future periods,
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information to reconcile these non-GAAP financial measures to the most directly comparable GAAP financial measures is not available at this time, as the company is unable to forecast all special items, the mark-to-market impacts of economic hedges in the Commercial Power segment, or any amounts that may be reported as discontinued operations or extraordinary items for future periods.
Duke Energy is the largest electric power holding company in the United States with more than $110 billion in total assets. Its regulated utility operations serve approximately 7.2 million electric customers located in six states in the Southeast and Midwest. Its commercial power and international business segments own and operate diverse power generation assets in North America and Latin America, including a growing portfolio of renewable energy assets in the United States.
Headquartered in Charlotte, N.C., Duke Energy is a Fortune 250 company traded on the New York Stock Exchange under the symbol DUK. More information about the company is available at duke-energy.com.
Forward-Looking Information
This release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are based on management’s beliefs and assumptions.
These forward-looking statements are identified by terms and phrases such as “anticipate,” “believe,” “intend,” “estimate,” “expect,” “continue,” “should,” “could,” “may,” “plan,” “project,” “predict,” “will,” “potential,” “forecast,” “target,” “guidance,” “outlook” and similar expressions. Forward-looking statements involve risks and uncertainties that may cause actual results to be materially different from the results predicted. Factors that could cause actual results to differ materially from those indicated in any forward-looking statement include, but are not limited to: state, federal and foreign legislative and regulatory initiatives, including costs of compliance with existing and future environmental requirements or climate change, as well as rulings that affect cost and investment recovery or have an impact on rate structures or market prices; the extent and timing of the costs and liabilities relating to the Dan River ash basin release and future regulatory changes related to the management of coal ash; the ability to recover eligible costs, including those associated with future significant weather events, and earn an adequate return on investment through the regulatory process; the costs of decommissioning Crystal River Unit 3 could prove to be more extensive than is currently identified and all costs may not be fully recoverable through the regulatory process; the risk that the credit ratings of the company or its subsidiaries may be different from what the companies expect; costs and effects of legal and administrative proceedings, settlements, investigations and claims; industrial, commercial and residential growth or decline in service territories or customer bases resulting from customer usage patterns, including energy efficiency efforts and use of
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alternative energy sources including self-generation and distributed generation technologies; additional competition in electric markets and continued industry consolidation; political and regulatory uncertainty in other countries in which Duke Energy conducts business; the influence of weather and other natural phenomena on operations, including the economic, operational and other effects of severe storms, hurricanes, droughts and tornadoes; the ability to successfully operate electric generating facilities and deliver electricity to customers; the impact on facilities and business from a terrorist attack, cyber security threats, data security breaches and other catastrophic events; the inherent risks associated with the operation and potential construction of nuclear facilities, including environmental, health, safety, regulatory and financial risks; the timing and extent of changes in commodity price, interest rates and foreign currency exchange rates and the ability to recover such costs through the regulatory process, where appropriate, and their impact on liquidity positions and the value of underlying assets; the results of financing efforts, including the ability to obtain financing on favorable terms, which can be affected by various factors, including credit ratings and general economic conditions; declines in the market prices of equity securities and resultant cash funding requirements for defined benefit pension plans, other post-retirement benefit plans, and nuclear decommissioning trust funds; changes in rules for regional transmission organizations, including changes in rate designs and new and evolving capacity markets, and risks related to obligations created by the default of other participants; the ability to control operation and maintenance costs; the level of creditworthiness of counterparties to transactions; employee workforce factors, including the potential inability to attract and retain key personnel; the ability of subsidiaries to pay dividends or distributions to Duke Energy Corporation holding company (the Parent); the performance of projects undertaken by our nonregulated businesses and the success of efforts to invest in and develop new opportunities; the effect of accounting pronouncements issued periodically by accounting standard-setting bodies; the impact of potential goodwill impairments; the ability to reinvest retained earnings of foreign subsidiaries or repatriate such earnings on a tax free basis; and the ability to successfully complete future merger, acquisition or divestiture plans.
Additional risks and uncertainties are identified and discussed in Duke Energy’s and its subsidiaries’ reports filed with the SEC and available at the SEC’s website at www.sec.gov. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than Duke Energy has described. Forward-looking statements speak only as of the date they are made, Duke Energy undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise that occur after that date.
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DUKE ENERGY CORPORATION
EARNINGS VARIANCES
March 2014 YTD vs. Prior Year
| | | | | | | | | | | | | | | | | | | | |
| ($ per share) | | Regulated
Utilities | | | International
Energy | | | Commercial
Power | | | Other | | | Consolidated | |
2013 YTD Reported Earnings Per Share, Diluted | | $ | 0.93 | | | $ | 0.14 | | | $ | (0.07 | ) | | $ | (0.11 | ) | | $ | 0.89 | |
| | | | | | | | | | | | | | | | | | | | |
Costs to Achieve, Progress Merger | | | — | | | | — | | | | — | | | | 0.05 | | | | 0.05 | |
Economic Hedges (Mark-to-Market) | | | — | | | | — | | | | 0.08 | | | | — | | | | 0.08 | |
| | | | | | | | | | | | | | | | | | | | |
2013 YTD Adjusted Earnings Per Share, Diluted | | $ | 0.93 | | | $ | 0.14 | | | $ | 0.01 | | | $ | (0.06 | ) | | $ | 1.02 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Weather | | | 0.08 | | | | — | | | | — | | | | — | | | | 0.08 | |
| | | | | |
Pricing and Riders (a) | | | 0.12 | | | | — | | | | — | | | | — | | | | 0.12 | |
| | | | | |
Volume | | | 0.06 | | | | — | | | | — | | | | — | | | | 0.06 | |
| | | | | |
Operation and Maintenance, net of recoverables (b) | | | (0.05 | ) | | | — | | | | — | | | | — | | | | (0.05 | ) |
| | | | | |
Latin America, including Foreign Exchange Rates (c) | | | — | | | | 0.04 | | | | — | | | | — | | | | 0.04 | |
| | | | | |
Midwest Coal Generation (d) | | | — | | | | — | | | | (0.01 | ) | | | — | | | | (0.01 | ) |
| | | | | |
Midwest Gas Generation (e) | | | — | | | | — | | | | 0.01 | | | | — | | | | 0.01 | |
| | | | | |
Duke Energy Retail | | | — | | | | — | | | | (0.01 | ) | | | — | | | | (0.01 | ) |
| | | | | |
Interest Expense | | | (0.03 | ) | | | — | | | | — | | | | (0.01 | ) | | | (0.04 | ) |
| | | | | |
Change in effective income tax rate | | | — | | | | — | | | | — | | | | 0.01 | | | | 0.01 | |
| | | | | |
Other (f)(g) | | | (0.07 | ) | | | — | | | | 0.01 | | | | — | | | | (0.06 | ) |
| | | | | | | | | | | | | | | | | | | | |
2014 YTD Adjusted Earnings Per Share, Diluted | | $ | 1.04 | | | $ | 0.18 | | | $ | 0.01 | | | $ | (0.06 | ) | | $ | 1.17 | |
| | | | | | | | | | | | | | | | | | | | |
Midwest Generation Impairment | | | — | | | | — | | | | (1.23 | ) | | | — | | | | (1.23 | ) |
Costs to Achieve, Progress Merger | | | — | | | | — | | | | — | | | | (0.04 | ) | | | (0.04 | ) |
Economic Hedges (Mark-to-Market) | | | — | | | | — | | | | (0.03 | ) | | | — | | | | (0.03 | ) |
Discontinued Operations | | | | | | | | | | | | | | | | | | | (0.01 | ) |
| | | | | | | | | | | | | | | | | | | | |
2014 YTD Reported Earnings Per Share, Diluted | | $ | 1.04 | | | $ | 0.18 | | | $ | (1.25 | ) | | $ | (0.10 | ) | | $ | (0.14 | ) |
| | | | | | | | | | | | | | | | | | | | |
Note 1: Earnings Per Share amounts are calculated using the consolidated effective income tax rate.
Note 2: Adjusted and Reported Earnings Per Share amounts by segment may not recompute from other published schedules due to rounding.
| (a) | Primarily due to the September 2013 implementation of revised base rates for Duke Energy Carolinas (+$0.06), the June 2013 implementation of revised base rates for Duke Energy Progress (+$0.03), the May 2013 implementation of revised distribution rates for Duke Energy Ohio (+$0.01), and increased recovery under the IGCC rider, net of AFUDC, for Duke Energy Indiana (+$0.01). |
| (b) | Primarily driven by storm costs in the Carolinas, the 2013 deferral of Crystal River Unit 3 costs, and clean up costs related to the Dan River coal ash spill. These drivers are partially offset by the impact of nuclear outage cost levelization and lower nuclear generation operating expenses. |
| (c) | Primarily driven by stronger results in Latin America (+$0.06) primarily due to higher spot volumes and pricing in Brazil, offset by unfavorable foreign exchange rates (-$0.02). |
| (d) | Primarily due to lower energy margins (-$0.01) due to lower realized power prices (including hedge settlements) and higher fuel costs, partially offset by higher volumes. |
| (e) | Primarily due to increased generation margins (+$0.01) due to higher realized power prices (including hedge settlements) and lower fuel costs, partially offset by lower volumes. |
| (f) | Amount for Regulated Utilities includes an increase in depreciation and amortization expense (-$0.07) due to the 2013 reduction in the cost of removal component of amortization expense for Duke Energy Florida, lower AFUDC-equity (-$0.02), and higher non-income taxes (-$0.01), partially offset by higher wholesale margins (+$0.03). |
| (g) | Amount for Commercial Power includes favorable results of the renewables portfolio (+$0.01). |
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March 2014
QUARTERLY HIGHLIGHTS
(Unaudited)
| | | | | | | | |
| | | Three Months Ended
March 31, | |
(In millions, except per-share amounts and where noted) | | 2014 | | | 2013 | |
COMMON STOCK DATA | | | | | | | | |
(Loss) Income from continuing operations attributable to Duke Energy Corporation common shareholders | | | | | | | | |
Basic | | $ | (0.13 | ) | | $ | 0.89 | |
Diluted | | $ | (0.13 | ) | | $ | 0.89 | |
Loss from discontinued operations attributable to Duke Energy Corporation common shareholders | | | | | | | | |
Basic | | $ | (0.01 | ) | | $ | — | |
Diluted | | $ | (0.01 | ) | | $ | — | |
Net (loss) income attributable to Duke Energy Corporation common shareholders | | | | | | | | |
Basic | | $ | (0.14 | ) | | $ | 0.89 | |
Diluted | | $ | (0.14 | ) | | $ | 0.89 | |
Dividends Declared Per Share | | $ | 0.78 | | | $ | 0.765 | |
Weighted-Average Shares Outstanding | | | | | | | | |
Basic | | | 706 | | | | 705 | |
Diluted | | | 706 | | | | 705 | |
| | |
SEGMENT INCOME BY BUSINESS SEGMENT | | | | | | | | |
Regulated Utilities | | $ | 737 | | | $ | 656 | |
International Energy | | | 130 | | | | 97 | |
Commercial Power(a) | | | (879 | ) | | | (42 | ) |
| | | | | | | | |
Total Reportable Segment Income | | | (12 | ) | | | 711 | |
Other Net Expense | | | (82 | ) | | | (77 | ) |
Loss from Discontinued Operations, net of tax | | | (3 | ) | | | — | |
| | | | | | | | |
Net (Loss) Income Attributable to Duke Energy Corporation | | $ | (97 | ) | | $ | 634 | |
| | | | | | | | |
| | |
CAPITALIZATION | | | | | | | | |
Total Common Equity | | | 48 | % | | | 50 | % |
Total Debt | | | 52 | % | | | 50 | % |
| | |
Total Debt | | $ | 41,622 | | | $ | 41,350 | |
Book Value Per Share | | $ | 57.64 | | | $ | 58.14 | |
Actual Shares Outstanding | | | 707 | | | | 706 | |
| | |
CAPITAL AND INVESTMENT EXPENDITURES | | | | | | | | |
Regulated Utilities | | $ | 1,130 | | | $ | 1,309 | |
International Energy | | | 9 | | | | 12 | |
Commercial Power | | | 68 | | | | 25 | |
Other | | | 61 | | | | 64 | |
| | | | | | | | |
Total Capital and Investment Expenditures | | $ | 1,268 | | | $ | 1,410 | |
| | | | | | | | |
| (a) | Includes an impairment charge related to the planned disposition of the Midwest Generation business of $867 million for the three months ended March 31, 2014 (net of tax of $514 million). |
9
March 2014
QUARTERLY HIGHLIGHTS
(Unaudited)
| | | | | | | | |
| | | Three Months Ended
March 31, | |
(In millions, except where noted) | | 2014 | | | 2013 | |
REGULATED UTILITIES | | | | | | | | |
Operating Revenues | | $ | 5,805 | | | $ | 5,060 | |
Operating Expenses | | | 4,427 | | | | 3,840 | |
Gains on Sales of Other Assets, net | | | 1 | | | | 2 | |
| | | | | | | | |
Operating Income | | | 1,379 | | | | 1,222 | |
Other Income and Expenses | | | 69 | | | | 61 | |
Interest Expense | | | 270 | | | | 236 | |
| | | | | | | | |
Income Before Income Taxes | | | 1,178 | | | | 1,047 | |
Income Tax Expense | | | 441 | | | | 391 | |
| | | | | | | | |
Segment Income | | $ | 737 | | | $ | 656 | |
| | | | | | | | |
| | |
Depreciation and Amortization | | $ | 677 | | | $ | 536 | |
| | |
Duke Energy Carolinas GWh sales | | | 23,693 | | | | 22,246 | |
Duke Energy Progress GWh sales | | | 16,161 | | | | 14,701 | |
Duke Energy Florida’s GWh sales | | | 8,661 | | | | 8,017 | |
Duke Energy Ohio GWh sales | | | 6,479 | | | | 6,178 | |
Duke Energy Indiana GWh sales | | | 8,874 | | | | 8,505 | |
| | | | | | | | |
Total GWh sales | | | 63,868 | | | | 59,647 | |
| | | | | | | | |
Net Proportional MW Capacity in Operation | | | 49,595 | | | | 49,641 | |
| | |
INTERNATIONAL ENERGY | | | | | | | | |
Operating Revenues | | $ | 382 | | | $ | 392 | |
Operating Expenses | | | 231 | | | | 263 | |
| | | | | | | | |
Operating Income | | | 151 | | | | 129 | |
Other Income and Expenses | | | 57 | | | | 33 | |
Interest Expense | | | 23 | | | | 21 | |
| | | | | | | | |
Income Before Income Taxes | | | 185 | | | | 141 | |
Income Tax Expense | | | 51 | | | | 42 | |
Less: Income Attributable to Noncontrolling Interests | | | 4 | | | | 2 | |
| | | | | | | | |
Segment Income | | $ | 130 | | | $ | 97 | |
| | | | | | | | |
| | |
Depreciation and Amortization | | $ | 23 | | | $ | 26 | |
| | |
Sales, GWh | | | 5,241 | | | | 4,756 | |
Proportional MW Capacity in Operation | | | 4,600 | | | | 4,584 | |
| | |
COMMERCIAL POWER | | | | | | | | |
Operating Revenues | | $ | 449 | | | $ | 452 | |
Operating Expenses(a) | | | 1,862 | | | | 533 | |
| | | | | | | | |
Operating Loss | | | (1,413 | ) | | | (81 | ) |
Other Income and Expenses | | | 5 | | | | 11 | |
Interest Expense | | | 15 | | | | 15 | |
| | | | | | | | |
Loss Before Income Taxes | | | (1,423 | ) | | | (85 | ) |
Income Tax Benefit(b) | | | (544 | ) | | | (43 | ) |
| | | | | | | | |
Segment Loss | | $ | (879 | ) | | $ | (42 | ) |
| | | | | | | | |
| | |
Depreciation and Amortization | | $ | 61 | | | $ | 63 | |
Actual Coal-fired Plant Production, GWh | | | 4,711 | | | | 4,549 | |
Actual Gas-fired Plant Production, GWh | | | 3,792 | | | | 3,897 | |
Actual Renewable Plant Production, GWh | | | 1,589 | | | | 1,405 | |
| | | | | | | | |
Actual Plant Production, GWh | | | 10,092 | | | | 9,851 | |
| | | | | | | | |
Net Proportional MW Capacity in Operation | | | 7,770 | | | | 8,094 | |
| | |
OTHER | | | | | | | | |
Operating Revenues | | $ | 25 | | | $ | 35 | |
Operating Expenses | | | 84 | | | | 90 | |
| | | | | | | | |
Operating Loss | | | (59 | ) | | | (55 | ) |
Other Income and Expenses | | | 7 | | | | 11 | |
Interest Expense | | | 105 | | | | 95 | |
| | | | | | | | |
Loss Before Income Taxes | | | (157 | ) | | | (139 | ) |
Income Tax Benefit | | | (75 | ) | | | (60 | ) |
Less: Income (Loss) Attributable to Noncontrolling Interests | | | — | | | | (2 | ) |
| | | | | | | | |
Segment Net Expense | | $ | (82 | ) | | $ | (77 | ) |
| | | | | | | | |
| | |
Depreciation and Amortization | | $ | 29 | | | $ | 35 | |
| (a) | Includes a pretax impairment charge of $1,381 million for the three months ended March 31, 2014, related to the planned disposition of the Midwest Generation business. |
| (b) | Includes a tax benefit of $514 million for the three months ended March 31, 2014, on the impairment related to the planned disposition of the Midwest Generation business. |
10
DUKE ENERGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In millions, except per-share amounts)
| | | | | | | | |
| | | Three Months Ended
March 31, | |
| | | 2014 | | | 2013 | |
Operating Revenues | | | | | | | | |
Regulated electric | | $ | 5,578 | | | $ | 4,889 | |
Nonregulated electric, natural gas, and other | | | 824 | | | | 824 | |
Regulated natural gas | | | 222 | | | | 185 | |
| | | | | | | | |
Total operating revenues | | | 6,624 | | | | 5,898 | |
| | | | | | | | |
Operating Expenses | | | | | | | | |
Fuel used in electric generation and purchased power - regulated | | | 2,000 | | | | 1,703 | |
Fuel used in electric generation and purchased power - nonregulated | | | 409 | | | | 454 | |
Cost of natural gas and other | | | 122 | | | | 104 | |
Operation, maintenance and other | | | 1,506 | | | | 1,421 | |
Depreciation and amortization | | | 790 | | | | 660 | |
Property and other taxes | | | 358 | | | | 343 | |
Impairment charges | | | 1,382 | | | | — | |
| | | | | | | | |
Total operating expenses | | | 6,567 | | | | 4,685 | |
| | | | | | | | |
Gains on Sales of Other Assets and Other, net | | | 1 | | | | 2 | |
| | | | | | | | |
Operating Income | | | 58 | | | | 1,215 | |
| | | | | | | | |
Other Income and Expenses | | | | | | | | |
Equity in earnings of unconsolidated affiliates | | | 36 | | | | 36 | |
Other income and expenses, net | | | 95 | | | | 80 | |
| | | | | | | | |
Total other income and expenses | | | 131 | | | | 116 | |
| | | | | | | | |
Interest Expense | | | 406 | | | | 367 | |
| | | | | | | | |
(Loss) Income From Continuing Operations Before Income Taxes | | | (217 | ) | | | 964 | |
Income Tax (Benefit) Expense from Continuing Operations | | | (127 | ) | | | 330 | |
| | | | | | | | |
(Loss) Income From Continuing Operations | | | (90 | ) | | | 634 | |
| | | | | | | | |
Loss From Discontinued Operations, net of tax | | | (3 | ) | | | — | |
| | | | | | | | |
Net (Loss) Income | | | (93 | ) | | | 634 | |
Less: Net Income Attributable to Noncontrolling Interests | | | 4 | | | | — | |
| | | | | | | | |
Net (Loss) Income Attributable to Duke Energy Corporation | | $ | (97 | ) | | $ | 634 | |
| | | | | | | | |
| | |
Earnings Per Share - Basic and Diluted | | | | | | | | |
(Loss) Income from continuing operations attributable to Duke Energy Corporation common shareholders | | | | | | | | |
Basic | | $ | (0.13 | ) | | $ | 0.89 | |
Diluted | | $ | (0.13 | ) | | $ | 0.89 | |
Loss from discontinued operations attributable to Duke Energy Corporation common shareholders | | | | | | | | |
Basic | | $ | (0.01 | ) | | $ | — | |
Diluted | | $ | (0.01 | ) | | $ | — | |
Net (Loss) Income attributable to Duke Energy Corporation common shareholders | | | | | | | | |
Basic | | $ | (0.14 | ) | | $ | 0.89 | |
Diluted | | $ | (0.14 | ) | | $ | 0.89 | |
Weighted-average shares outstanding | | | | | | | | |
Basic | | | 706 | | | | 705 | |
Diluted | | | 706 | | | | 705 | |
11
DUKE ENERGY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions)
| | | | | | | | |
| | | March 31,
2014 | | | December 31,
2013 | |
ASSETS | | | | | | | | |
Current Assets | | | | | | | | |
Cash and cash equivalents | | $ | 1,531 | | | $ | 1,501 | |
Short-term investments | | | 6 | | | | 44 | |
Receivables (net of allowance for doubtful accounts of $17 at March 31, 2014 and $30 at December 31, 2013) | | | 597 | | | | 1,286 | |
Restricted receivables of variable interest entities (net of allowance for doubtful accounts of $54 at March 31, 2014 and $43 at December 31, 2013) | | | 2,199 | | | | 1,719 | |
Inventory | | | 2,908 | | | | 3,250 | |
Assets held for sale | | | 515 | | | | — | |
Regulatory assets | | | 1,148 | | | | 895 | |
Other | | | 1,661 | | | | 1,821 | |
| | | | | | | | |
Total current assets | | | 10,565 | | | | 10,516 | |
| | | | | | | | |
Investments and Other Assets | | | | | | | | |
Investments in equity method unconsolidated affiliates | | | 386 | | | | 390 | |
Nuclear decommissioning trust funds | | | 5,231 | | | | 5,132 | |
Goodwill | | | 16,342 | | | | 16,340 | |
Assets held for sale | | | 2,341 | | | | 107 | |
Other | | | 3,251 | | | | 3,432 | |
| | | | | | | | |
Total investments and other assets | | | 27,551 | | | | 25,401 | |
| | | | | | | | |
Property, Plant and Equipment | | | | | | | | |
Cost | | | 99,874 | | | | 103,115 | |
Accumulated depreciation and amortization | | | (33,519 | ) | | | (33,625 | ) |
| | | | | | | | |
Net property, plant and equipment | | | 66,355 | | | | 69,490 | |
| | | | | | | | |
Regulatory Assets and Deferred Debits | | | | | | | | |
Regulatory assets | | | 9,138 | | | | 9,191 | |
Other | | | 183 | | | | 181 | |
| | | | | | | | |
Total regulatory assets and deferred debits | | | 9,321 | | | | 9,372 | |
| | | | | | | | |
Total Assets | | | 113,792 | | | | 114,779 | |
| | | | | | | | |
| | |
LIABILITIES AND EQUITY | | | | | | | | |
Current Liabilities | | | | | | | | |
Accounts payable | | | 1,892 | | | | 2,391 | |
Notes payable and commercial paper | | | 1,737 | | | | 839 | |
Taxes accrued | | | 423 | | | | 551 | |
Interest accrued | | | 478 | | | | 440 | |
Current maturities of long-term debt | | | 885 | | | | 2,104 | |
Liabilities associated with assets held for sale | | | 222 | | | | 7 | |
Regulatory liabilities | | | 243 | | | | 316 | |
Other | | | 1,612 | | | | 1,996 | |
| | | | | | | | |
Total current liabilities | | | 7,492 | | | | 8,644 | |
| | | | | | | | |
Long-term Debt | | | 39,000 | | | | 38,152 | |
| | | | | | | | |
Deferred Credits and Other Liabilities | | | | | | | | |
Deferred income taxes | | | 11,852 | | | | 12,097 | |
Investment tax credits | | | 438 | | | | 442 | |
Accrued pension and other post-retirement benefit costs | | | 1,270 | | | | 1,322 | |
Liabilities associated with assets held for sale | | | 71 | | | | 66 | |
Asset retirement obligations | | | 4,994 | | | | 4,950 | |
Regulatory liabilities | | | 6,125 | | | | 5,949 | |
Other | | | 1,761 | | | | 1,749 | |
| | | | | | | | |
Total deferred credits and other liabilities | | | 26,511 | | | | 26,575 | |
| | | | | | | | |
Equity | | | | | | | | |
Common stock, $0.001 par value, 2 billion shares authorized; 707 million and 706 million shares outstanding at March 31, 2014 and December 31, 2013, respectively | | | 1 | | | | 1 | |
Additional paid-in capital | | | 39,372 | | | | 39,365 | |
Retained earnings | | | 1,713 | | | | 2,363 | |
Accumulated other comprehensive loss | | | (377 | ) | | | (399 | ) |
| | | | | | | | |
Total Duke Energy Corporation shareholders’ equity | | | 40,709 | | | | 41,330 | |
Noncontrolling interests | | | 80 | | | | 78 | |
| | | | | | | | |
Total equity | | | 40,789 | | | | 41,408 | |
| | | | | | | | |
Total Liabilities and Equity | | $ | 113,792 | | | $ | 114,779 | |
| | | | | | | | |
12
DUKE ENERGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In millions)
| | | | | | | | |
| | | Three Months Ended
March 31, | |
| | | 2014 | | | 2013 | |
| | |
CASH FLOWS FROM OPERATING ACTIVITIES | | | | | | | | |
Net (Loss) Income | | $ | (93 | ) | | $ | 634 | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | 1,466 | | | | 457 | |
| | | | | | | | |
Net cash provided by operating activities | | | 1,373 | | | | 1,091 | |
| | | | | | | | |
| | |
CASH FLOWS FROM INVESTING ACTIVITIES | | | | | | | | |
Net cash used in investing activities | | | (1,286 | ) | | | (1,465 | ) |
| | | | | | | | |
| | |
CASH FLOWS FROM FINANCING ACTIVITIES | | | | | | | | |
Net cash (used in) provided by financing activities | | | (57 | ) | | | 246 | |
| | | | | | | | |
| | |
Net increase (decrease) in cash and cash equivalents | | | 30 | | | | (128 | ) |
Cash and cash equivalents at beginning of period | | | 1,501 | | | | 1,424 | |
| | | | | | | | |
Cash and cash equivalents at end of period | | $ | 1,531 | | | $ | 1,296 | |
| | | | | | | | |
13
Regulated Utilities
Quarterly Highlights
Supplemental Regulated Utilities Electric Information
March 2014
| | | | | | | | | | | | | | | | |
| | | Three Months Ended
March 31 | |
| | | | | | | | | | | | % Inc. (Dec.) | |
| | | | | | | | | % | | | Weather | |
| | | 2014 | | | 2013 | | | Inc. (Dec.) | | | Normal (2) | |
| | | | |
GWH Sales (1) | | | | | | | | | | | | | | | | |
Residential | | | 24,193 | | | | 21,734 | | | | 11.3 | % | | | 2.9 | % |
General Service | | | 18,147 | | | | 17,545 | | | | 3.4 | % | | | 3.6 | % |
Industrial | | | 12,055 | | | | 11,925 | | | | 1.1 | % | | | 0.4 | % |
Other Energy Sales | | | 150 | | | | 151 | | | | (0.7 | %) | | | | |
Unbilled Sales | | | (584 | ) | | | (206 | ) | | | 183.5 | % | | | N/A | |
| | | | | | | | | | | | | | | | |
Total Retail Sales | | | 53,961 | | | | 51,149 | | | | 5.5 | % | | | 2.6 | % |
| | | | |
Special Sales (3) | | | 9,907 | | | | 8,498 | | | | 16.6 | % | | | | |
| | | | | | | | | | | | | | | | |
Total Consolidated Electric Sales -
Regulated Utilities | | | 63,868 | | | | 59,647 | | | | 7.1 | % | | | | |
| | | | |
Average Number of Customers | | | | | | | | | | | | | | | | |
Residential | | | 6,265,318 | | | | 6,201,159 | | | | 1.0 | % | | | | |
General Service | | | 939,046 | | | | 932,231 | | | | 0.7 | % | | | | |
Industrial | | | 18,374 | | | | 18,690 | | | | (1.7 | %) | | | | |
Other Energy Sales | | | 22,458 | | | | 22,108 | | | | 1.6 | % | | | | |
| | | | | | | | | | | | | | | | |
Total Regular Sales | | | 7,245,196 | | | | 7,174,188 | | | | 1.0 | % | | | | |
| | | | |
Special Sales | | | 64 | | | | 62 | | | | 3.2 | % | | | | |
| | | | | | | | | | | | | | | | |
Total Average Number of Customers -
Regulated Utilities | | | 7,245,260 | | | | 7,174,250 | | | | 1.0 | % | | | | |
| | | | |
Heating and Cooling Degree Days (4) | | | | | | | | | | | | | | | | |
Carolinas - Actual | | | | | | | | | | | | | | | | |
Heating Degree Days | | | 1,969 | | | | 1,776 | | | | 10.9 | % | | | | |
Cooling Degree Days | | | — | | | | 1 | | | | 0.0 | % | | | | |
| | | | |
Variance from Normal | | | | | | | | | | | | | | | | |
Heating Degree Days | | | 18.8 | % | | | 5.0 | % | | | n/a | | | | | |
Cooling Degree Days | | | (100.0 | %) | | | (86.4 | %) | | | n/a | | | | | |
| | | | |
Midwest - Actual | | | | | | | | | | | | | | | | |
Heating Degree Days | | | 3,313 | | | | 2,834 | | | | 16.9 | % | | | | |
Cooling Degree Days | | | — | | | | — | | | | 0.0 | % | | | | |
| | | | |
Variance from Normal | | | | | | | | | | | | | | | | |
Heating Degree Days | | | 25.3 | % | | | 5.6 | % | | | n/a | | | | | |
Cooling Degree Days | | | (100.0 | %) | | | (100.0 | %) | | | n/a | | | | | |
| | | | |
Florida - Actual | | | | | | | | | | | | | | | | |
Heating Degree Days | | | 417 | | | | 339 | | | | 23.0 | % | | | | |
Cooling Degree Days | | | 144 | | | | 178 | | | | (19.1 | %) | | | | |
| | | | |
Variance from Normal | | | | | | | | | | | | | | | | |
Heating Degree Days | | | 3.2 | % | | | (16.1 | %) | | | n/a | | | | | |
Cooling Degree Days | | �� | (18.2 | %) | | | 1.1 | % | | | n/a | | | | | |
| (1) | Except as indicated in footnote (2), represents non-weather normalized billed sales, with energy delivered but not yet billed (i.e. unbilled sales) reflected as a single amount and not allocated to the respective retail classes. |
| (2) | Represents weather normal total retail calendar sales (i.e. billed and unbilled sales). |
| (3) | First quarter 2014 and first quarter 2013 include 177 GWH and 184 GWH, respectively, of sales associated with the FERC mitigation contracts, for which the financial results are excluded from the Regulated Utilities segment earnings. |
| (4) | Certain 2013 data has been recast to conform to the 2014 methodology which provides for consistency across all Regulated Utilities’ jurisdictions. |
14
Duke Energy Carolinas
Quarterly Highlights
Supplemental Regulated Utilities Electric Information
March 2014
| | | | | | | | | | | | | | | | |
| | | Three Months Ended
March 31 | |
| | | | | | | | | | | | % Inc. (Dec.) | |
| | | | | | | | | % | | | Weather | |
| | | 2014 | | | 2013 | | | Inc. (Dec.) | | | Normal (2) | |
| | | | |
GWH Sales (1) | | | | | | | | | | | | | | | | |
Residential | | | 8,564 | | | | 7,705 | | | | 11.1 | % | | | | |
General Service | | | 6,781 | | | | 6,526 | | | | 3.9 | % | | | | |
Industrial | | | 4,914 | | | | 4,811 | | | | 2.1 | % | | | | |
Other Energy Sales | | | 73 | | | | 74 | | | | (1.4 | %) | | | | |
Unbilled Sales | | | (181 | ) | | | 10 | | | | (100.0 | %) | | | | |
| | | | | | | | | | | | | | | | |
Total Regular Electric Sales | | | 20,151 | | | | 19,126 | | | | 5.4 | % | | | 2.5 | % |
| | | | |
Special Sales (3) | | | 3,542 | | | | 3,120 | | | | 13.5 | % | | | | |
| | | | | | | | | | | | | | | | |
Total Consolidated Electric Sales - Duke
Energy Carolinas | | | 23,693 | | | | 22,246 | | | | 6.5 | % | | | | |
| | | | |
Average Number of Customers | | | | | | | | | | | | | | | | |
Residential | | | 2,081,865 | | | | 2,062,339 | | | | 0.9 | % | | | | |
General Service | | | 340,187 | | | | 337,515 | | | | 0.8 | % | | | | |
Industrial | | | 6,525 | | | | 6,650 | | | | (1.9 | %) | | | | |
Other Energy Sales | | | 14,485 | | | | 14,350 | | | | 0.9 | % | | | | |
| | | | | | | | | | | | | | | | |
Total Regular Sales | | | 2,443,062 | | | | 2,420,854 | | | | 0.9 | % | | | | |
| | | | |
Special Sales | | | 26 | | | | 24 | | | | 8.3 | % | | | | |
| | | | | | | | | | | | | | | | |
Total Average Number of Customers - Duke
Energy Carolinas | | | 2,443,088 | | | | 2,420,878 | | | | 0.9 | % | | | | |
| | | | |
Heating and Cooling Degree Days (4) | | | | | | | | | | | | | | | | |
Actual | | | | | | | | | | | | | | | | |
Heating Degree Days | | | 2,042 | | | | 1,857 | | | | 10.0 | % | | | | |
Cooling Degree Days | | | — | | | | — | | | | 0.0 | % | | | | |
| | | | |
Variance from Normal | | | | | | | | | | | | | | | | |
Heating Degree Days | | | 19.1 | % | | | 6.1 | % | | | n/a | | | | | |
Cooling Degree Days | | | (100.0 | %) | | | (100.0 | %) | | | 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) | First quarter 2014 and first quarter 2013 include 177 GWH and 184 GWH, respectively, of sales associated with the FERC mitigation contracts, for which the financial results are excluded from the Regulated Utilities segment earnings. |
| (4) | Certain 2013 data has been recast to conform to the 2014 methodology which provides for consistency across all Regulated Utilities’ jurisdictions. |
15
Duke Energy Progress
Quarterly Highlights
Supplemental Regulated Utilities Electric Information
March 2014
| | | | | | | | | | | | | | | | |
| | | Three Months Ended
March 31 | |
| | | 2014 | | | 2013 | | | %
Inc. (Dec.) | | | % Inc. (Dec.)
Weather
Normal (2) | |
| | | | |
GWH Sales (1) | | | | | | | | | | | | | | | | |
Residential | | | 5,580 | | | | 4,959 | | | | 12.5 | % | | | | |
General Service | | | 3,641 | | | | 3,482 | | | | 4.6 | % | | | | |
Industrial | | | 2,381 | | | | 2,444 | | | | (2.6 | %) | | | | |
Other Energy Sales | | | 30 | | | | 30 | | | | 0.0 | % | | | | |
Unbilled Sales | | | 3 | | | | 35 | | | | (91.4 | %) | | | | |
| | | | | | | | | | | | | | | | |
Total Regular Electric Sales | | | 11,635 | | | | 10,950 | | | | 6.3 | % | | | 2.3 | % |
| | | | |
Special Sales | | | 4,526 | | | | 3,751 | | | | 20.7 | % | | | | |
| | | | | | | | | | | | | | | | |
Total Consolidated Electric Sales - Duke Energy Progress | | | 16,161 | | | | 14,701 | | | | 9.9 | % | | | | |
| | | | |
Average Number of Customers | | | | | | | | | | | | | | | | |
Residential | | | 1,251,608 | | | | 1,237,568 | | | | 1.1 | % | | | | |
General Service | | | 221,892 | | | | 220,208 | | | | 0.8 | % | | | | |
Industrial | | | 4,291 | | | | 4,396 | | | | (2.4 | %) | | | | |
Other Energy Sales | | | 1,751 | | | | 1,812 | | | | (3.4 | %) | | | | |
| | | | | | | | | | | | | | | | |
Total Regular Sales | | | 1,479,542 | | | | 1,463,984 | | | | 1.1 | % | | | | |
| | | | |
Special Sales | | | 15 | | | | 15 | | | | 0.0 | % | | | | |
| | | | | | | | | | | | | | | | |
Total Average Number of Customers - Duke Energy Progress | | | 1,479,557 | | | | 1,463,999 | | | | 1.1 | % | | | | |
| | | | |
Heating and Cooling Degree Days (3) | | | | | | | | | | | | | | | | |
Actual | | | | | | | | | | | | | | | | |
Heating Degree Days | | | 1,896 | | | | 1,695 | | | | 11.9 | % | | | | |
Cooling Degree Days | | | — | | | | 2 | | | | 0.0 | % | | | | |
| | | | |
Variance from Normal | | | | | | | | | | | | | | | | |
Heating Degree Days | | | 18.5 | % | | | 3.9 | % | | | n/a | | | | | |
Cooling Degree Days | | | (100.0 | %) | | | (74.5 | %) | | | 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) | Certain 2013 data has been recast to conform to the 2014 methodology which provides for consistency across all Regulated Utilities’ jurisdictions. |
16
Duke Energy Florida
Quarterly Highlights
Supplemental Regulated Utilities Electric Information
March 2014
| | | | | | | | | | | | | | | | |
| | | Three Months Ended
March 31 | |
| | | 2014 | | | 2013 | | | %
Inc. (Dec.) | | | % Inc. (Dec.)
Weather
Normal (2) | |
| | | | |
GWH Sales (1) | | | | | | | | | | | | | | | | |
Residential | | | 4,051 | | | | 3,744 | | | | 8.2 | % | | | | |
General Service | | | 3,248 | | | | 3,224 | | | | 0.7 | % | | | | |
Industrial | | | 801 | | | | 755 | | | | 6.1 | % | | | | |
Other Energy Sales | | | 6 | | | | 6 | | | | 0.0 | % | | | | |
Unbilled Sales | | | 139 | | | | 34 | | | | 308.8 | % | | | | |
| | | | | | | | | | | | | | | | |
Total Regular Sales | | | 8,245 | | | | 7,763 | | | | 6.2 | % | | | 3.3 | % |
| | | | |
Special Sales | | | 416 | | | | 254 | | | | 63.8 | % | | | | |
| | | | | | | | | | | | | | | | |
Total Electric Sales - Duke Energy Florida | | | 8,661 | | | | 8,017 | | | | 8.0 | % | | | | |
| | | | |
Average Number of Customers | | | | | | | | | | | | | | | | |
Residential | | | 1,492,358 | | | | 1,473,749 | | | | 1.3 | % | | | | |
General Service | | | 190,437 | | | | 188,343 | | | | 1.1 | % | | | | |
Industrial | | | 2,301 | | | | 2,361 | | | | (2.5 | %) | | | | |
Other Energy Sales | | | 1,555 | | | | 1,568 | | | | (0.8 | %) | | | | |
| | | | | | | | | | | | | | | | |
Total Regular Sales | | | 1,686,651 | | | | 1,666,021 | | | | 1.2 | % | | | | |
| | | | |
Special Sales | | | 16 | | | | 15 | | | | 6.7 | % | | | | |
| | | | | | | | | | | | | | | | |
Total Average Number of Customers - Duke Energy Florida | | | 1,686,667 | | | | 1,666,036 | | | | 1.2 | % | | | | |
| | | | |
Heating and Cooling Degree Days (3) | | | | | | | | | | | | | | | | |
Actual | | | | | | | | | | | | | | | | |
Heating Degree Days | | | 417 | | | | 339 | | | | 23.0 | % | | | | |
Cooling Degree Days | | | 144 | | | | 178 | | | | (19.1 | %) | | | | |
| | | | |
Variance from Normal | | | | | | | | | | | | | | | | |
Heating Degree Days | | | 3.2 | % | | | (16.1 | %) | | | n/a | | | | | |
Cooling Degree Days | �� | | (18.2 | %) | | | 1.1 | % | | | n/a | | | | | |
| (1) | Except as indicated in footnote (2), represents non-weather normalized billed sales, with energy delivered but not yet billed (i.e. unbilled sales) reflected as a single amount and not allocated to the respective retail classes. |
| (2) | Represents weather normal total retail calendar sales (i.e. billed and unbilled sales). |
| (3) | Certain 2013 data has been recast to conform to the 2014 methodology which provides for consistency across all Regulated Utilities’ jurisdictions. |
17
Duke Energy Ohio
Quarterly Highlights
Supplemental Regulated Utilities Electric Information
March 2014
| | | | | | | | | | | | | | | | |
| | | Three Months Ended
March 31 | |
| | | | | | | | | | | | % Inc. (Dec.) | |
| | | | | | | | | % | | | Weather | |
| | | 2014 | | | 2013 | | | Inc. (Dec.) | | | Normal (2) | |
| | | | |
GWH Sales (1) | | | | | | | | | | | | | | | | |
Residential | | | 2,779 | | | | 2,498 | | | | 11.2 | % | | | | |
General Service | | | 2,372 | | | | 2,282 | | | | 3.9 | % | | | | |
Industrial | | | 1,436 | | | | 1,396 | | | | 2.9 | % | | | | |
Other Energy Sales | | | 28 | | | | 28 | | | | 0.0 | % | | | | |
Unbilled Sales | | | (242 | ) | | | (146 | ) | | | (65.8 | %) | | | | |
| | | | | | | | | | | | | | | | |
Total Regular Electric Sales | | | 6,373 | | | | 6,058 | | | | 5.2 | % | | | 2.0 | % |
| | | | |
Special Sales | | | 106 | | | | 120 | | | | (11.7 | %) | | | | |
| | | | | | | | | | | | | | | | |
Total Electric Sales - Duke Energy Ohio | | | 6,479 | | | | 6,178 | | | | 4.9 | % | | | | |
| | | | |
Average Number of Customers | | | | | | | | | | | | | | | | |
Residential | | | 743,580 | | | | 737,283 | | | | 0.9 | % | | | | |
General Service | | | 86,251 | | | | 86,056 | | | | 0.2 | % | | | | |
Industrial | | | 2,522 | | | | 2,562 | | | | (1.6 | %) | | | | |
Other Energy | | | 3,171 | | | | 2,924 | | | | 8.4 | % | | | | |
| | | | | | | | | | | | | | | | |
Total Regular Sales | | | 835,524 | | | | 828,825 | | | | 0.8 | % | | | | |
| | | | |
Special Sales | | | 1 | | | | 1 | | | | 0.0 | % | | | | |
| | | | | | | | | | | | | | | | |
| | | | |
Total Average Number of Electric Customers - Duke Energy Ohio | | | 835,525 | | | | 828,826 | | | | 0.8 | % | | | | |
| | | | |
Heating and Cooling Degree Days (3) | | | | | | | | | | | | | | | | |
Actual | | | | | | | | | | | | | | | | |
Heating Degree Days | | | 3,109 | | | | 2,703 | | | | 15.0 | % | | | | |
Cooling Degree Days | | | — | | | | — | | | | 0.0 | % | | | | |
| | | | |
Variance from Normal | | | | | | | | | | | | | | | | |
Heating Degree Days | | | 21.4 | % | | | 4.0 | % | | | n/a | | | | | |
Cooling Degree Days | | | (100.0 | %) | | | (100.0 | %) | | | n/a | | | | | |
| (1) | Except as indicated in footnote (2), represents non-weather normalized billed sales, with energy delivered but not yet billed (i.e. unbilled sales) reflected as a single amount and not allocated to the respective retail classes. |
| (2) | Represents weather normal total retail calendar sales (i.e. billed and unbilled sales). |
| (3) | Certain 2013 data has been recast to conform to the 2014 methodology which provides for consistency across all Regulated Utilities’ jurisdictions. |
18
Duke Energy Ohio
Quarterly Highlights
Supplemental Regulated Utilities Gas Information
March 2014
| | | | | | | | | | | | | | | | |
| | | Three Months Ended
March 31 | |
| | | | | | | | | | | | % Inc. (Dec.) | |
| | | | | | | | | % | | | Weather | |
| | | 2014 | | | 2013 | | | Inc. (Dec.) | | | Normal (2) | |
| | | | |
MCF Sales (1) | | | | | | | | | | | | | | | | |
Residential | | | 23,585,941 | | | | 20,044,850 | | | | 17.7 | % | | | | |
General Service | | | 13,692,491 | | | | 11,648,545 | | | | 17.5 | % | | | | |
Industrial | | | 2,812,830 | | | | 2,407,491 | | | | 16.8 | % | | | | |
Other Energy Sales | | | 6,597,030 | | | | 6,154,498 | | | | 7.2 | % | | | | |
Unbilled Sales | | | (2,467,000 | ) | | | (912,000 | ) | | | (170.5 | %) | | | | |
| | | | | | | | | | | | | | | | |
Total Gas Sales - Duke Energy Ohio | | | 44,221,292 | | | | 39,343,384 | | | | 12.4 | % | | | 2.0 | % |
| | | | |
Average Number of Customers | | | | | | | | | | | | | | | | |
Residential | | | 476,115 | | | | 471,571 | | | | 1.0 | % | | | | |
General Service | | | 45,299 | | | | 45,001 | | | | 0.7 | % | | | | |
Industrial | | | 1,717 | | | | 1,688 | | | | 1.7 | % | | | | |
Other Energy | | | 158 | | | | 166 | | | | (4.8 | %) | | | | |
| | | | | | | | | | | | | | | | |
Total Average Number of Gas Customers - Duke Energy Ohio | | | 523,289 | | | | 518,426 | | | | 0.9 | % | | | | |
| | | | |
Heating and Cooling Degree Days (3) | | | | | | | | | | | | | | | | |
Actual | | | | | | | | | | | | | | | | |
Heating Degree Days | | | 3,109 | | | | 2,703 | | | | 15.0 | % | | | | |
Cooling Degree Days | | | — | | | | — | | | | 0.0 | % | | | | |
| | | | |
Variance from Normal | | | | | | | | | | | | | | | | |
Heating Degree Days | | | 21.4 | % | | | 4.0 | % | | | n/a | | | | | |
Cooling Degree Days | | | (100.0 | %) | | | (100.0 | %) | | | n/a | | | | | |
| (1) | Except as indicated in footnote (2), represents non-weather normalized billed sales, with energy delivered but not yet billed (i.e. unbilled sales) reflected as a single amount and not allocated to the respective retail classes. |
| (2) | Represents weather normal total retail calendar sales (i.e. billed and unbilled sales). |
| (3) | Certain 2013 data has been recast to conform to the 2014 methodology which provides for consistency across all Regulated Utilities’ jurisdictions. |
19
Duke Energy Indiana
Quarterly Highlights
Supplemental Regulated Utilities Electric Information
March 2014
| | | | | | | | | | | | | | | | |
| | | Three Months Ended
March 31 | |
| | | | | | | | | | | | % Inc. (Dec.) | |
| | | | | | | | | % | | | Weather | |
| | | 2014 | | | 2013 | | | Inc. (Dec.) | | | Normal (2) | |
| | |
GWH Sales (1) | | | | | | | | | |
Residential | | | 3,219 | | | | 2,828 | | | | 13.8 | % | | | | |
General Service | | | 2,105 | | | | 2,031 | | | | 3.6 | % | | | | |
Industrial | | | 2,523 | | | | 2,519 | | | | 0.2 | % | | | | |
Other Energy Sales | | | 13 | | | | 13 | | | | 0.0 | % | | | | |
Unbilled Sales | | | (303 | ) | | | (139 | ) | | | (118.0 | %) | | | | |
| | | | | | | | | | | | | | | | |
Total Regular Electric Sales | | | 7,557 | | | | 7,252 | | | | 4.2 | % | | | 2.8 | % |
| | | | |
Special Sales | | | 1,317 | | | | 1,253 | | | | 5.1 | % | | | | |
| | | | | | | | | | | | | | | | |
Total Electric Sales - Duke Energy Indiana | | | 8,874 | | | | 8,505 | | | | 4.3 | % | | | | |
| | | | |
Average Number of Customers | | | | | | | | | | | | | | | | |
Residential | | | 695,907 | | | | 690,220 | | | | 0.8 | % | | | | |
General Service | | | 100,279 | | | | 100,109 | | | | 0.2 | % | | | | |
Industrial | | | 2,735 | | | | 2,721 | | | | 0.5 | % | | | | |
Other Energy | | | 1,496 | | | | 1,454 | | | | 2.9 | % | | | | |
| | | | | | | | | | | | | | | | |
Total Regular Sales | | | 800,417 | | | | 794,504 | | | | 0.7 | % | | | | |
| | | | |
Special Sales | | | 6 | | | | 7 | | | | (14.3 | %) | | | | |
| | | | | | | | | | | | | | | | |
| | | | |
Total Average Number of Electric Customers - Duke Energy Indiana | | | 800,423 | | | | 794,511 | | | | 0.7 | % | | | | |
| | | | |
Heating and Cooling Degree Days (3) | | | | | | | | | | | | | | | | |
Actual | | | | | | | | | | | | | | | | |
Heating Degree Days | | | 3,517 | | | | 2,966 | | | | 18.6 | % | | | | |
Cooling Degree Days | | | — | | | | — | | | | 0.0 | % | | | | |
| | | | |
Variance from Normal | | | | | | | | | | | | | | | | |
Heating Degree Days | | | 29.0 | % | | | 7.0 | % | | | n/a | | | | | |
Cooling Degree Days | | | (100.0 | %) | | | (100.0 | %) | | | n/a | | | | | |
| (1) | Except as indicated in footnote (2), represents non-weather normalized billed sales, with energy delivered but not yet billed (i.e. unbilled sales) reflected as a single amount and not allocated to the respective retail classes. |
| (2) | Represents weather normal total retail calendar sales (i.e. billed and unbilled sales). |
| (3) | Certain 2013 data has been recast to conform to the 2014 methodology which provides for consistency across all Regulated Utilities’ jurisdictions. |
20
DUKE ENERGY CORPORATION
ADJUSTED TO REPORTED EARNINGS RECONCILIATION
Three Months Ended March 31, 2014
(Dollars in millions, except per-share amounts)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | Special Items | | | | | | | | | | | | | |
| | | Adjusted
Earnings | | | Costs to
Achieve,
Progress
Merger | | | Midwest
Generation
Impairment | | | Economic
Hedges
(Mark-to-
Market) * | | | Discontinued
Operations | | | Total
Adjustments | | | Reported
Earnings | |
SEGMENT INCOME | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Regulated Utilities | | $ | 737 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 737 | |
International Energy | | | 130 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 130 | |
Commercial Power | | | 10 | | | | — | | | | (867 | )D | | | (22 | )B | | | — | | | | (889 | ) | | | (879 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Reportable Segment Income | | | 877 | | | | — | | | | (867 | ) | | | (22 | ) | | | — | | | | (889 | ) | | | (12 | ) |
Other | | | (48 | ) | | | (34 | )A | | | — | | | | — | | | | — | | | | (34 | ) | | | (82 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Reportable Segment Income and Other Net Expense | | | 829 | | | | (34 | ) | | | (867 | ) | | | (22 | ) | | | — | | | | (923 | ) | | | (94 | ) |
Discontinued Operations | | | — | | | | — | | | | — | | | | — | | | | (3 | )C | | | (3 | ) | | | (3 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net Income (Loss) Attributable to Duke Energy Corporation | | $ | 829 | | | $ | (34 | ) | | $ | (867 | ) | | $ | (22 | ) | | $ | (3 | ) | | $ | (926 | ) | | $ | (97 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, BASIC | | $ | 1.17 | | | $ | (0.04 | ) | | $ | (1.23 | ) | | $ | (0.03 | ) | | $ | (0.01 | ) | | $ | (1.31 | ) | | $ | (0.14 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, DILUTED | | $ | 1.17 | | | $ | (0.04 | ) | | $ | (1.23 | ) | | $ | (0.03 | ) | | $ | (0.01 | ) | | $ | (1.31 | ) | | $ | (0.14 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| A - | Net of $21 million tax benefit. $1 million recorded as a decrease in Operating Revenues, $53 million recorded within Operating Expenses and $1 million recorded within Interest expense on the Condensed Consolidated Statements of Operations. |
| B - | Net of $12 million tax benefit. $124 million loss recorded within Nonregulated electric, natural gas, and other (Operating Revenues) and $90 million gain recorded within Fuel used in electric generation and purchased power-nonregulated (Operating Expenses) on the Condensed Consolidated Statements of Operations. |
| C - | Recorded in Income (Loss) From Discontinued Operations, net of tax on the Condensed Consolidated Statements of Operations. |
| D - | Net of $514 million tax benefit. Recorded in Impairment charges (Operating Expenses) on the Condensed Consolidated Statements of Operations. |
Weighted Average Shares (reported and adjusted) - in millions
| * | Mark-to-market adjustments reflect the impact of derivative contracts, which are used in Duke Energy’s hedging of a portion of the economic value of its generation assets in the Commercial Power segment. 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 operating earnings until settlement better matches the financial impacts of the derivative contract with the portion of economic value of the underlying hedged asset. Management believes the presentation of adjusted earnings and adjusted diluted EPS provides useful information to investors, as it provides them an additional relevant comparison of Duke Energy’s performance across periods. |
21
DUKE ENERGY CORPORATION
ADJUSTED TO REPORTED EARNINGS RECONCILIATION
Three Months Ended March 31, 2013
(Dollars in millions, except per-share amounts)
| | | | | | | | | | | | | | | | | | | | |
| | | | | | Special
Items | | | | | | | | | | |
| | | Adjusted
Earnings | | | Costs to
Achieve,
Progress
Merger | | | Economic
Hedges (Mark-
to-Market) * | | | Total
Adjustments | | | Reported
Earnings | |
SEGMENT INCOME | | | | | | | | | | | | | | | | | | | | |
Regulated Utilities | | $ | 656 | | | $ | — | | | $ | — | | | $ | — | | | $ | 656 | |
International Energy | | | 97 | | | | — | | | | — | | | | — | | | | 97 | |
Commercial Power | | | 6 | | | | — | | | | (48 | )B | | | (48 | ) | | | (42 | ) |
| | | | | | | | | | | | | | | | | | | | |
Total Reportable Segment Income | | | 759 | | | | — | | | | (48 | ) | | | (48 | ) | | | 711 | |
Other | | | (43 | ) | | | (34 | )A | | | — | | | | (34 | ) | | | (77 | ) |
| | | | | | | | | | | | | | | | | | | | |
Net Income (Loss) Attributable to Duke Energy Corporation | | $ | 716 | | | $ | (34 | ) | | $ | (48 | ) | | $ | (82 | ) | | $ | 634 | |
| | | | | | | | | | | | | | | | | | | | |
EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, BASIC | | $ | 1.02 | | | $ | (0.05 | ) | | $ | (0.08 | ) | | $ | (0.13 | ) | | $ | 0.89 | |
| | | | | | | | | | | | | | | | | | | | |
EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, DILUTED | | $ | 1.02 | | | $ | (0.05 | ) | | $ | (0.08 | ) | | $ | (0.13 | ) | | $ | 0.89 | |
| | | | | | | | | | | | | | | | | | | | |
| A - | Net of $21 million tax benefit. $15 million recorded as an increase in Operating Revenues and $70 million recorded in Operating Expenses on the Condensed Consolidated Statements of Operations. |
| B - | Net of $27 million tax benefit. $68 million loss recorded in Nonregulated electric, natural gas and other (Operating Revenues) and $7 million loss recorded within Fuel used in electric generation and purchased power-nonregulated (Operating Expenses) on the Condensed Consolidated Statements of Operations. |
Weighted Average Shares (reported and adjusted) - in millions
| * | Mark-to-market adjustments reflect the impact of derivative contracts, which are used in Duke Energy’s hedging of a portion of the economic value of its generation assets in the Commercial Power segment. 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 operating earnings until settlement better matches the financial impacts of the derivative contract with the portion of economic value of the underlying hedged asset. Management believes the presentation of adjusted earnings and adjusted diluted EPS provides useful information to investors, as it provides them an additional relevant comparison of Duke Energy’s performance across periods. |
22
