Exhibit 99.1
Media Contact: Tom Shiel
Office: 704.382.2355 | 24-Hour: 800.559.3853
Analysts: Bill Currens
Office: 704.382.1603
Aug. 7, 2014
Duke Energy posts strong second quarter 2014 results; increases outlook for 2014
| | • | | Second quarter 2014 adjusted diluted earnings per share (EPS) was $1.11, compared to 87 cents for the second quarter 2013 |
| | • | | Reported diluted EPS for the second quarter 2014 of 86 cents, compared to reported diluted EPS of 48 cents for the second quarter 2013 |
| | • | | Company increases its 2014 adjusted earnings guidance range from $4.45 to $4.60 per share to $4.50 to $4.65 per share |
CHARLOTTE, N.C. – Duke Energy today announced second quarter 2014 adjusted diluted EPS of $1.11, compared to 87 cents for second quarter 2013, and reported diluted EPS of 86 cents, compared to 48 cents for the same period last year.
The company saw strong performance from all of its business units in the quarter, led by Regulated Utilities, which continued to benefit from favorable weather and a lower effective tax rate, and International Energy, which recognized a tax benefit resulting from the reorganization of the company’s operations in Chile.
Based upon results through the first half of the year, the company is increasing its 2014 adjusted earnings guidance range from $4.45 to $4.60 per share to $4.50 to $4.65 per share.
“Our strong second quarter performance and continued focus on operational excellence leaves us well-positioned to meet our financial objectives in 2014 and beyond. We are committed to maintaining affordable customer rates and to supporting the strength of our local communities, as evidenced by our recent agreement with the North Carolina Eastern Municipal Power Agency,” said Lynn Good, president and CEO.
“We are executing our strategy to position the business for long-term sustainable growth, benefitting our customers and shareholders,” she added.
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| Duke Energy News Release | | 2 |
Business Unit Results
In addition to the summary business unit discussion below, a comprehensive table of quarterly and year-to-date earnings per share drivers compared to the prior year are provided on pages 10 and 11.
The discussion below of second-quarter results includes adjusted segment income, which is a non-GAAP financial measure. The tables on pages 24 through 27 present a reconciliation of reported results to adjusted results.
Regulated Utilities
Regulated Utilities recognized second quarter 2014 adjusted segment income of $689 million, compared to $590 million in the second quarter 2013, an increase of $0.13 per share.
Increased quarterly results at Regulated Utilities were primarily driven by:
| | • | | Higher revenues from increased pricing and riders (+$0.07 per share) primarily related to the implementation of revised customer rates |
| | • | | Favorable weather (+$0.07 per share) driven by warmer than normal temperatures across Duke Energy’s service territories |
| | • | | Lower effective tax rate (+$0.05 per share) primarily due to a state tax settlement that resulted in a favorable adjustment to deferred taxes |
| | • | | Lower operating and maintenance expenses (+$0.03 per share) primarily driven by a prior-year donation associated with the 2013 Duke Energy Progress rate case settlement as well as the benefit of nuclear outage cost levelization |
| | • | | Increased wholesale net margins (+$0.02 per share) primarily resulting from growth in contracted amounts |
These favorable drivers were partially offset by:
| | • | | Higher depreciation and amortization expense (-$0.07 per share) primarily resulting from additional plant in service and a decrease in cost of removal amortization |
| | • | | Higher interest expense (-$0.03 per share) primarily due to lower post-in-service debt returns on projects now reflected in customer rates |
| | • | | Lower AFUDC equity (-$0.01 per share) primarily due to the completion of certain major capital projects |
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| Duke Energy News Release | | 3 |
On a year-to-date basis, Regulated Utilities recognized adjusted segment income of $1,426 million, compared to $1,246 million in the comparable year-to-date period of 2013, an increase of $0.26 per share.
Increased year-to-date results at Regulated Utilities were primarily driven by:
| | • | | Higher revenues from increased pricing and riders (+$0.20 per share) primarily related to the implementation of revised customer rates |
| | • | | Favorable weather (+$0.15 per share) across Duke Energy’s service territories |
| | • | | Higher weather-normal retail volumes (+$0.06 per share) of 1.5 percent compared to 2013 primarily driven by strong results in the first quarter |
| | • | | Lower effective tax rate (+$0.05 per share) primarily due to a state tax settlement that resulted in a favorable adjustment to deferred taxes |
| | • | | Increased wholesale net margins (+$0.05 per share) primarily resulting from growth in contracted amounts and favorable weather |
These favorable drivers were partially offset by:
| | • | | Higher depreciation and amortization expense (-$0.14 per share) due to additional plant in service and the prior-year impact of cost of removal amortization primarily in Florida |
| | • | | Higher interest expense (-$0.06 per share) due to lower post-in-service debt returns on projects now reflected in customer rates |
| | • | | Lower AFUDC equity (-$0.03 per share) primarily due to the completion of certain major capital projects |
International Energy
International Energy recognized second quarter 2014 adjusted segment income of $146 million, compared to $87 million in the second quarter 2013, an increase of $0.09 per share.
International Energy’s improved quarterly earnings were driven by:
| | • | | Favorable results in Latin America (+$0.08 per share) primarily due to a tax benefit resulting from the reorganization of the company’s operations in Chile |
| | • | | Higher results at National Methanol Company (+$0.02 per share) due to a prior-year extended planned maintenance outage |
These favorable drivers were partially offset by unfavorable foreign currency exchange rates (-$0.01 per share).
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| Duke Energy News Release | | 4 |
On a year-to-date basis, International Energy recognized adjusted segment income of $276 million, compared to $184 million in the comparable year-to-date period of 2013, an increase of $0.13 per share.
International Energy’s improved year-to-date earnings were driven by:
| | • | | Stronger results in Latin America (+$0.13 per share), primarily due to a tax benefit resulting from the reorganization of the company’s operations in Chile and higher average volumes and pricing in Brazil |
| | • | | Higher results at National Methanol Company (+$0.02 per share) due to a prior-year extended planned maintenance outage |
These drivers were partially offset by unfavorable foreign currency exchange rates (-$0.03 per share).
Commercial Power
Commercial Power recognized second quarter 2014 adjusted segment income of $16 million, compared to a segment loss of $3 million in the second quarter 2013, an increase of $0.02 per share.
Commercial Power’s improved quarterly earnings were primarily driven by:
| | • | | Higher results from the Midwest coal and gas generation fleets (+$0.02 per share) primarily due to higher PJM capacity prices |
| | • | | Increased results at the renewables business (+$0.01 per share) due to higher production of the wind and solar portfolio |
On a year-to-date basis, Commercial Power recognized adjusted segment income of $26 million, compared to $3 million in the comparable year-to-date period of 2013, an increase of $0.03 per share.
Commercial Power’s improved year-to-date earnings were primarily driven by:
| | • | | Increased results from the renewables business (+$0.03 per share) due to higher production of the wind and solar portfolio and lower operating costs |
| | • | | Higher results from the Midwest coal and gas generation fleets (+$0.03 per share) primarily due to higher PJM capacity prices |
These results were partially offset by lower earnings from the company’s competitive retail business, Duke Energy Retail (-$0.02 per share).
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| Duke Energy News Release | | 5 |
Other
On an adjusted basis, Other primarily includes corporate interest expense not allocated to the business units, results from Duke Energy’s captive insurance company, other investments, and income tax levelization adjustments.
Other recognized a second quarter 2014 adjusted net expense of $65 million, compared to $57 million in the second quarter 2013. On a year-to-date basis, Other recognized adjusted net expense of $113 million, compared to $100 million in the comparable period of 2013.
Earnings Conference Call for Analysts
An earnings conference call for analysts is scheduled for 10 a.m. ET today to discuss Duke Energy’s financial performance for the quarter and other business updates.
The conference call will be hosted by Lynn Good, president and chief executive officer, and Steve Young, executive vice president and chief financial officer.
The call can be accessed via the investors’ section (http://www.duke-energy.com/investors/) of Duke Energy’s website or by dialing 877-718-5108 in the United States or 719-325-4765 outside the United States. The confirmation code is 6615300. 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, Aug. 17, 2014, by calling 888-203-1112 in the United States or 719-457-0820 outside the United States and using the code 6615300. A replay and transcript also will be available by accessing the investors’ section of the company’s website.
Special Items and Non-GAAP Reconciliation
Special items affecting Duke Energy’s adjusted diluted EPS for second quarter 2014 and second quarter 2013 include:
| | | | | | | | | | | | | | | | |
(In millions, except per-share amounts) | | Pre-Tax
Amount | | | Tax
Effect | | | 2Q2014
EPS
Impact | | | 2Q2013
EPS
Impact | |
Second Quarter 2014 | | | | | | | | | | | | | | | | |
• Economic hedges (mark-to-market) | | $ | (213 | ) | | $ | 77 | | | $ | (0.19 | ) | | | | |
• Costs to achieve, Progress Energy merger | | $ | (61 | ) | | $ | 23 | | | $ | (0.06 | ) | | | | |
• Discontinued operations | | $ | (13 | ) | | $ | 10 | | | | — | | | | | |
Second Quarter 2013 | | | | | | | | | | | | | | | | |
• Crystal River Unit 3 impairment | | $ | (295 | ) | | $ | 115 | | | | | | | $ | (0.26 | ) |
• Nuclear development charges | | $ | (87 | ) | | $ | 30 | | | | | | | $ | (0.08 | ) |
• Costs to achieve, Progress Energy merger | | $ | (82 | ) | | $ | 31 | | | | | | | $ | (0.07 | ) |
• Litigation reserve | | $ | (50 | ) | | $ | 19 | | | | | | | $ | (0.04 | ) |
• Economic hedges (mark-to-market) | | $ | 73 | | | $ | (29 | ) | | | | | | $ | 0.06 | |
• Discontinued operations | | $ | (5 | ) | | $ | 2 | | | | | | | | — | |
| | | | | | | | | | | | | | | | |
Total diluted EPS impact | | | | | | | | | | $ | (0.25 | ) | | $ | (0.39 | ) |
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| Duke Energy News Release | | 6 |
Reconciliation of reported to adjusted diluted EPS for the quarters:
| | | | | | | | |
| | | 2Q2014
EPS | | | 2Q2013
EPS | |
Diluted EPS, as reported | | $ | 0.86 | | | $ | 0.48 | |
Adjustments to reported EPS: | | | | | | | | |
• Diluted EPS impact of special items, mark-to-market in Commercial
Power, and discontinued operations (net of tax) | | $ | 0.25 | | | $ | 0.39 | |
| | | | | | | | |
Diluted EPS, adjusted | | $ | 1.11 | | | $ | 0.87 | |
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Non-GAAP financial measures
Management evaluates financial performance in part based on the non-GAAP financial measures, adjusted earnings and adjusted diluted earnings per share (EPS). These items are measured as income from continuing operations 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 and also relate to existing derivative positions that may have tenors beyond the planned disposal date of the nonregulated Midwest generation business. The mark-to-market impact of derivative contracts is recognized in GAAP earnings immediately as such derivative contracts do not qualify for hedge accounting or regulatory treatment. The economic value of generation assets is subject to fluctuations in fair value due to market price volatility of input and output commodities (e.g. coal, electricity, natural gas). Economic hedging involves both purchases and sales of those input and output commodities related to generation assets. Operations of the generation assets are accounted for under the accrual method. Management believes excluding impacts of mark-to-market changes of the derivative contracts from adjusted earnings until settlement better matches the financial impacts of the derivative contract with the portion of economic value of the underlying hedged asset. However, due to the divestiture of the nonregulated Midwest generation business as mentioned above, certain derivative positions have tenors beyond the planned disposal date of these assets. As such, management expects to exclude any settlement of these derivative positions from adjusted diluted EPS as these realized gains and losses more closely relate to the loss on disposal of these assets. Management believes the presentation of adjusted earnings and adjusted diluted EPS provides useful information to investors, as it provides them an additional relevant comparison of Duke Energy’s performance across periods. Management uses these non-GAAP financial measures for planning and forecasting and for reporting results to the Board of Directors, employees, shareholders, analysts and investors concerning Duke Energy’s financial performance. Adjusted diluted EPS is also used as a basis for employee incentive bonuses. The most directly
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| Duke Energy News Release | | 7 |
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 Condensed Consolidated Financial Statements. Management also uses adjusted segment income as a measure of historical and anticipated future segment performance. Adjusted segment income is a non-GAAP financial measure, as it is based upon segment income adjusted for special items 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 nonregulated Midwest generation business, 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 nonregulated Midwest generation business 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, information to reconcile these non-GAAP financial measures to the most directly comparable GAAP financial measures is not available at this time, as the company is unable to forecast all special items, the mark-to-market impacts of economic hedges in the Commercial Power segment, or any amounts that may be reported as discontinued operations or extraordinary items for future periods.
Duke Energy is the largest electric power holding company in the United States with more than $115 billion in total assets. Its regulated utility operations serve approximately 7.2 million electric customers located in six states in the Southeast and
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| Duke Energy News Release | | 8 |
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 document includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are based on management’s beliefs and assumptions.
These forward-looking statements are identified by terms and phrases such as “anticipate,” “believe,” “intend,” “estimate,” “expect,” “continue,” “should,” “could,” “may,” “plan,” “project,” “predict,” “will,” “potential,” “forecast,” “target,” “outlook,” “guidance,” and similar expressions. Forward-looking statements involve risks and uncertainties that may cause actual results to be materially different from the results predicted. Factors that could cause actual results to differ materially from those indicated in any forward-looking statement include, but are not limited to: state, federal and foreign legislative and regulatory initiatives, including costs of compliance with existing and future environmental requirements or climate change, as well as rulings that affect cost and investment recovery or have an impact on rate structures or market prices; the extent and timing of the costs and liabilities relating to the Dan River ash basin release and future regulatory changes related to the management of coal ash; the ability to recover eligible costs, including those associated with future significant weather events, and earn an adequate return on investment through the regulatory process; the costs of decommissioning Crystal River Unit 3 could prove to be more extensive than is currently identified and all costs may not be fully recoverable through the regulatory process; the risk that the credit ratings of the combined company or its subsidiaries may be different from what the companies expect; costs and effects of legal and administrative proceedings, settlements, investigations and claims; industrial, commercial and residential growth or decline in service territories or customer bases resulting from customer usage patterns, including energy efficiency effort and use of alternative energy sources including self-generation and distributed generation technologies; additional competition in electric markets and continued industry consolidation; political and regulatory uncertainty in other countries in which Duke Energy conducts business; the influence of weather and other natural phenomena on operations, including the economic, operational and other effects of severe storms, hurricanes, droughts and tornadoes; the ability to successfully operate electric generating facilities and deliver electricity to customers; the impact on facilities and business from a terrorist attack, cyber security threats, data security breaches and other
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| Duke Energy News Release | | 9 |
catastrophic events; the inherent risks associated with the operation and potential construction of nuclear facilities, including environmental, health, safety, regulatory and financial risks; the timing and extent of changes in commodity prices, interest rates and foreign currency exchange rates and the ability to recover such costs through the regulatory process, where appropriate, and their impact on liquidity positions and the value of underlying assets; the results of financing efforts, including the ability to obtain financing on favorable terms, which can be affected by various factors, including credit ratings and general economic conditions; declines in the market prices of equity and fixed income securities and resultant cash funding requirements for defined benefit pension plans, other post-retirement benefit plans, and nuclear decommissioning trust funds; changes in rules for regional transmission organizations, including changes in rate designs and new and evolving capacity markets, and risks related to obligations created by the default of other participants; the ability to control operation and maintenance costs; the level of creditworthiness of counterparties to transactions; employee workforce factors, including the potential inability to attract and retain key personnel; the ability of subsidiaries to pay dividends or distributions to Duke Energy Corporation holding company (the Parent); the performance of projects undertaken by our nonregulated businesses and the success of efforts to invest in and develop new opportunities; the effect of accounting pronouncements issued periodically by accounting standard-setting bodies; the impact of potential goodwill impairments; the ability to reinvest retained earnings of foreign subsidiaries or repatriate such earnings on a tax-free basis; and the ability to successfully complete future merger, acquisition or divestiture plans.
Additional risks and uncertainties are identified and discussed in Duke Energy’s and its subsidiaries’ reports filed with the SEC and available at the SEC’s website at www.sec.gov. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than Duke Energy has described. Duke Energy undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
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DUKE ENERGY CORPORATION
EARNINGS VARIANCES
June 2014 QTD vs. Prior Year
| | | | | | | | | | | | | | | | | | | | |
| ($ per share) | | Regulated
Utilities | | | International
Energy | | | Commercial
Power | | | Other | | | Consolidated | |
2013 QTD Reported Earnings Per Share, Diluted | | $ | 0.50 | | | $ | 0.12 | | | $ | 0.06 | | | $ | (0.20 | ) | | $ | 0.48 | |
| | | | | | | | | | | | | | | | | | | | |
Crystal River Unit 3 Impairment | | | 0.26 | | | | — | | | | — | | | | — | | | | 0.26 | |
Nuclear Development Charges | | | 0.08 | | | | — | | | | — | | | | — | | | | 0.08 | |
Costs to Achieve, Progress Merger | | | — | | | | — | | | | — | | | | 0.07 | | | | 0.07 | |
Litigation Reserve | | | — | | | | — | | | | — | | | | 0.04 | | | | 0.04 | |
Economic Hedges (Mark-to-Market) | | | — | | | | — | | | | (0.06 | ) | | | — | | | | (0.06 | ) |
| | | | | | | | | | | | | | | | | | | | |
2013 QTD Adjusted Earnings Per Share, Diluted | | $ | 0.84 | | | $ | 0.12 | | | $ | — | | | $ | (0.09 | ) | | $ | 0.87 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Weather | | | 0.07 | | | | — | | | | — | | | | — | | | | 0.07 | |
| | | | | |
Pricing and Riders (a) | | | 0.07 | | | | — | | | | — | | | | — | | | | 0.07 | |
| | | | | |
Operation and Maintenance, net of recoverables (b) | | | 0.03 | | | | — | | | | — | | | | — | | | | 0.03 | |
| | | | | |
Latin America, including Foreign Exchange Rates (c) | | | — | | | | 0.07 | | | | — | | | | — | | | | 0.07 | |
| | | | | |
National Methanol Company | | | — | | | | 0.02 | | | | — | | | | — | | | | 0.02 | |
| | | | | |
Midwest Generation (d) | | | — | | | | — | | | | 0.02 | | | | — | | | | 0.02 | |
| | | | | |
Duke Energy Renewables (e) | | | — | | | | — | | | | 0.01 | | | | — | | | | 0.01 | |
| | | | | |
Interest Expense (f) | | | (0.03 | ) | | | — | | | | (0.01 | ) | | | 0.01 | | | | (0.03 | ) |
| | | | | |
Change in effective income tax rate | | | 0.05 | | | | — | | | | (0.01 | ) | | | — | | | | 0.04 | |
| | | | | |
Other (g) | | | (0.06 | ) | | | — | | | | 0.01 | | | | (0.01 | ) | | | (0.06 | ) |
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2014 QTD Adjusted Earnings Per Share, Diluted | | $ | 0.97 | | | $ | 0.21 | | | $ | 0.02 | | | $ | (0.09 | ) | | $ | 1.11 | |
| | | | | | | | | | | | | | | | | | | | |
Costs to Achieve, Progress Merger | | | — | | | | — | | | | — | | | | (0.06 | ) | | | (0.06 | ) |
Economic Hedges (Mark-to-Market) | | | — | | | | — | | | | (0.19 | ) | | | — | | | | (0.19 | ) |
| | | | | | | | | | | | | | | | | | | | |
2014 QTD Reported Earnings Per Share, Diluted | | $ | 0.97 | | | $ | 0.21 | | | $ | (0.17 | ) | | $ | (0.15 | ) | | $ | 0.86 | |
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Note 1: Earnings Per Share amounts are calculated using the consolidated effective income tax rate.
Note 2: Adjusted and Reported Earnings Per Share amounts by segment may not recompute from other published schedules due to rounding.
| (a) | Primarily due to the September 2013 implementation of revised base rates for Duke Energy Carolinas (+$0.06), the June 2013 implementation of revised base rates for Duke Energy Progress (+$0.02), and the May 2013 implementation of revised electric distribution rates for Duke Energy Ohio (+$0.01). |
| (b) | Primarily driven by lower donations and the impact of nuclear outage cost levelization. |
| (c) | Primarily driven by favorable results in Latin America (+$0.08) due to a tax benefit related to the reorganization of the company’s operations in Chile, partially offset by unfavorable foreign currency exchange rates (-$0.01). |
| (d) | Primarily due to lower depreciation and amortization due to ceasing depreciation on assets held for sale in the second quarter of 2014 (+$0.03) and higher PJM capacity revenues (+$0.02), partially offset by lower coal generation margins (-$0.01) and the impairment of ongoing capital maintenance investments that are not expected to change the estimated fair value of the generation business (-$0.02). |
| (e) | Primarily due to higher production of the wind and solar portfolio. |
| (f) | Amount for Regulated Utilities is primarily due to the discontinuation of booking a post in-service debt return on projects that are now reflected in customer rates. |
| (g) | Amount for Regulated Utilities includes an increase in depreciation and amortization expense (-$0.07) due to higher depreciable base and lower adjustments to the cost of removal reserve, and lower AFUDC-equity (-$0.01), partially offset by higher wholesale net margins, including new contracts (+$0.02). |
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DUKE ENERGY CORPORATION
EARNINGS VARIANCES
June 2014 YTD vs. Prior Year
| | | | | | | | | | | | | | | | | | | | |
| ($ per share) | | Regulated
Utilities | | | International
Energy | | | Commercial
Power | | | Other | | | Consolidated | |
2013 YTD Reported Earnings Per Share, Diluted | | $ | 1.42 | | | $ | 0.26 | | | $ | (0.01 | ) | | $ | (0.30 | ) | | $ | 1.37 | |
| | | | | | | | | | | | | | | | | | | | |
Crystal River Unit 3 Impairment | | | 0.26 | | | | — | | | | — | | | | — | | | | 0.26 | |
Nuclear Development Charges | | | 0.08 | | | | — | | | | — | | | | — | | | | 0.08 | |
Costs to Achieve, Progress Merger | | | — | | | | — | | | | — | | | | 0.13 | | | | 0.13 | |
Litigation Reserve | | | — | | | | — | | | | — | | | | 0.04 | | | | 0.04 | |
Economic Hedges (Mark-to-Market) | | | — | | | | — | | | | 0.01 | | | | — | | | | 0.01 | |
| | | | | | | | | | | | | | | | | | | | |
2013 YTD Adjusted Earnings Per Share, Diluted | | $ | 1.76 | | | $ | 0.26 | | | $ | — | | | $ | (0.13 | ) | | $ | 1.89 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Weather | | | 0.15 | | | | — | | | | — | | | | — | | | | 0.15 | |
| | | | | |
Pricing and Riders (a) | | | 0.20 | | | | — | | | | — | | | | — | | | | 0.20 | |
| | | | | |
Volumes | | | 0.06 | | | | — | | | | — | | | | — | | | | 0.06 | |
| | | | | |
Operation and Maintenance, net of recoverables (b) | | | (0.01 | ) | | | — | | | | — | | | | — | | | | (0.01 | ) |
| | | | | |
Latin America, including Foreign Exchange Rates (c) | | | — | | | | 0.10 | | | | — | | | | — | | | | 0.10 | |
| | | | | |
National Methanol Company | | | — | | | | 0.02 | | | | — | | | | — | | | | 0.02 | |
| | | | | |
Midwest Generation (d) | | | — | | | | — | | | | 0.03 | | | | — | | | | 0.03 | |
| | | | | |
Duke Energy Retail | | | — | | | | — | | | | (0.02 | ) | | | — | | | | (0.02 | ) |
| | | | | |
Duke Energy Renewables (e) | | | — | | | | — | | | | 0.03 | | | | — | | | | 0.03 | |
| | | | | |
Interest Expense (f) | | | (0.06 | ) | | | — | | | | (0.01 | ) | | | (0.01 | ) | | | (0.08 | ) |
| | | | | |
Change in effective income tax rate | | | 0.05 | | | | — | | | | (0.01 | ) | | | 0.01 | | | | 0.05 | |
| | | | | |
Other (g) | | | (0.13 | ) | | | 0.01 | | | | 0.01 | | | | (0.03 | ) | | | (0.14 | ) |
| | | | | | | | | | | | | | | | | | | | |
2014 YTD Adjusted Earnings Per Share, Diluted | | $ | 2.02 | | | $ | 0.39 | | | $ | 0.03 | | | $ | (0.16 | ) | | $ | 2.28 | |
| | | | | | | | | | | | | | | | | | | | |
Midwest Generation Impairment | | | — | | | | — | | | | (1.23 | ) | | | — | | | | (1.23 | ) |
Costs to Achieve, Progress Merger | | | — | | | | — | | | | — | | | | (0.10 | ) | | | (0.10 | ) |
Economic Hedges (Mark-to-Market) | | | — | | | | — | | | | (0.22 | ) | | | — | | | | (0.22 | ) |
Discontinued Operations | | | | | | | | | | | | | | | | | | | (0.01 | ) |
| | | | | | | | | | | | | | | | | | | | |
2014 YTD Reported Earnings Per Share, Diluted | | $ | 2.02 | | | $ | 0.39 | | | $ | (1.42 | ) | | $ | (0.26 | ) | | $ | 0.72 | |
| | | | | | | | | | | | | | | | | | | | |
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 (+$0.12), the June 2013 implementation of revised base rates for Duke Energy Progress (+$0.06), and the May 2013 implementation of revised electric distribution rates for Duke Energy Ohio (+$0.02). |
| (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 a tax benefit related to the reorganization of the company’s operations in Chile (+$0.07) and higher pricing and volumes in Brazil (+$0.04), partially offset by unfavorable foreign exchange rates (-$0.03). |
| (d) | Primarily due to lower depreciation and amortization due to ceasing depreciation on assets held for sale in the second quarter of 2014 (+$0.03), higher PJM capacity revenues (+$0.02), and higher gas generation margins (+$0.02), partially offset by lower coal generation margins (-$0.03) and the impairment of ongoing capital maintenance investments that are not expected to change the estimated fair value of the generation business (-$0.02). |
| (e) | Primarily due to higher production of the wind and solar portfolio and lower operating costs. |
| (f) | Amount for Regulated Utilities is primarily due to the discontinuation of booking a post in-service debt return on projects that are now reflected in customer rates. |
| (g) | Amount for Regulated Utilities includes an increase in depreciation and amortization expense (-$0.14) due to higher depreciable base and the 2013 reduction in the cost of removal component of amortization expense for Duke Energy Florida, lower AFUDC-equity (-$0.03), and higher non-income taxes (-$0.01), partially offset by higher wholesale net margins (+$0.05). |
11
June 2014
QUARTERLY HIGHLIGHTS
(Unaudited)
| | | | | | | | | | | | | | | | |
| | | Three Months Ended
June 30, | | | Six Months Ended
June 30, | |
(In millions, except per-share amounts and where noted) | | 2014 | | | 2013 | | | 2014 | | | 2013 | |
COMMON STOCK DATA | | | | | | | | | | | | | | | | |
Income from continuing operations attributable to Duke Energy Corporation common shareholders | | | | | | | | | | | | | | | | |
Basic | | $ | 0.86 | | | $ | 0.48 | | | $ | 0.73 | | | $ | 1.37 | |
Diluted | | $ | 0.86 | | | $ | 0.48 | | | $ | 0.73 | | | $ | 1.37 | |
(Loss) Income from discontinued operations attributable to Duke Energy Corporation common shareholders | | | | | | | | | | | | | | | | |
Basic | | $ | — | | | $ | — | | | $ | (0.01 | ) | | $ | — | |
Diluted | | $ | — | | | $ | — | | | $ | (0.01 | ) | | $ | — | |
Net income attributable to Duke Energy Corporation common shareholders | | | | | | | | | | | | | | | | |
Basic | | $ | 0.86 | | | $ | 0.48 | | | $ | 0.72 | | | $ | 1.37 | |
Diluted | | $ | 0.86 | | | $ | 0.48 | | | $ | 0.72 | | | $ | 1.37 | |
Dividends Declared Per Share | | $ | 0.78 | | | $ | 1.545 | | | $ | 1.56 | | | $ | 2.310 | |
Weighted-Average Shares Outstanding | | | | | | | | | | | | | | | | |
Basic | | | 707 | | | | 706 | | | | 707 | | | | 705 | |
Diluted | | | 707 | | | | 706 | | | | 707 | | | | 706 | |
| | | | |
SEGMENT INCOME BY BUSINESS SEGMENT | | | | | | | | | | | | | | | | |
Regulated Utilities(a)(b) | | $ | 689 | | | $ | 353 | | | $ | 1,426 | | | $ | 1,009 | |
International Energy | | | 146 | | | | 87 | | | | 276 | | | | 184 | |
Commercial Power(c)(d) | | | (120 | ) | | | 41 | | | | (999 | ) | | | (1 | ) |
| | | | | | | | | | | | | | | | |
Total Reportable Segment Income | | | 715 | | | | 481 | | | | 703 | | | | 1,192 | |
Other Net Expense(e)(f) | | | (103 | ) | | | (139 | ) | | | (185 | ) | | | (216 | ) |
Loss from Discontinued Operations, net of tax | | | (3 | ) | | | (3 | ) | | | (6 | ) | | | (3 | ) |
| | | | | | | | | | | | | | | | |
Net Income Attributable to Duke Energy Corporation | | $ | 609 | | | $ | 339 | | | $ | 512 | | | $ | 973 | |
| | | | | | | | | | | | | | | | |
| | | | |
CAPITALIZATION | | | | | | | | | | | | | | | | |
Total Common Equity | | | | | | | | | | | 48 | % | | | 49 | % |
Total Debt | | | | | | | | | | | 52 | % | | | 51 | % |
| | | | |
Total Debt | | | | | | | | | | $ | 42,460 | | | $ | 41,408 | |
Book Value Per Share | | | | | | | | | | $ | 57.80 | | | $ | 56.95 | |
Actual Shares Outstanding | | | | | | | | | | | 707 | | | | 706 | |
| | | | |
CAPITAL AND INVESTMENT EXPENDITURES | | | | | | | | | | | | | | | | |
Regulated Utilities | | $ | 1,073 | | | $ | 1,250 | | | $ | 2,175 | | | $ | 2,543 | |
International Energy | | | 16 | | | | 42 | | | | 25 | | | | 67 | |
Commercial Power | | | 100 | | | | 14 | | | | 168 | | | | 26 | |
Other | | | 25 | | | | 64 | | | | 86 | | | | 128 | |
| | | | | | | | | | | | | | | | |
Total Capital and Investment Expenditures | | $ | 1,214 | | | $ | 1,370 | | | $ | 2,454 | | | $ | 2,764 | |
| | | | | | | | | | | | | | | | |
| (a) | Includes an impairment charge of $180 million for the three and six months ended June 30, 2013 related to the Crystal River Unit 3 Nuclear Station (net of tax of $115 million). |
| (b) | Includes impairment charges of $57 million for the three and six months ended June 30, 2013 related to nuclear development costs (net of tax of $30 million). |
| (c) | Includes an impairment charge related to the planned sale of the Midwest Generation assets of $867 million for the six months ended June 30, 2014 (net of tax of $514 million). |
| (d) | Includes mark-to-market losses on economic hedges of $136 million for the three months ended June 30, 2014 (net of tax of $77 million), and $158 million for the six months ended June 30, 2014 (net of tax of $89 million). |
| (e) | Includes costs to achieve Progress merger of $38 million for the three months ended June 30, 2014 (net of tax of $23 million), and $72 million for the six months ended June 30, 2014 (net of tax of $44 million). |
| (f) | Includes costs to achieve Progress merger of $51 million for the three months ended June 30, 2013 (net of tax of $31 million), and $85 million for the six months ended June 30, 2013 (net of tax of $52 million). |
12
June 2014
QUARTERLY HIGHLIGHTS
(Unaudited)
| | | | | | | | | | | | | | | | |
| | | Three Months Ended
June 30, | | | Six Months Ended
June 30, | |
(In millions, except where noted) | | 2014 | | | 2013 | | | 2014 | | | 2013 | |
REGULATED UTILITIES | | | | | | | | | | | | | | | | |
Operating Revenues | | $ | 5,283 | | | $ | 4,920 | | | $ | 11,088 | | | $ | 9,980 | |
Operating Expenses(a)(b) | | | 4,019 | | | | 4,165 | | | | 8,446 | | | | 8,005 | |
Gains on Sales of Other Assets, net | | | — | | | | 4 | | | | 1 | | | | 6 | |
| | | | | | | | | | | | | | | | |
Operating Income | | | 1,264 | | | | 759 | | | | 2,643 | | | | 1,981 | |
Other Income and Expenses | | | 62 | | | | 48 | | | | 131 | | | | 109 | |
Interest Expense | | | 275 | | | | 242 | | | | 545 | | | | 478 | |
| | | | | | | | | | | | | | | | |
Income Before Income Taxes | | | 1,051 | | | | 565 | | | | 2,229 | | | | 1,612 | |
Income Tax Expense(c)(d) | | | 362 | | | | 212 | | | | 803 | | | | 603 | |
| | | | | | | | | | | | | | | | |
Segment Income | | $ | 689 | | | $ | 353 | | | $ | 1,426 | | | $ | 1,009 | |
| | | | | | | | | | | | | | | | |
| | | | |
Depreciation and Amortization | | $ | 688 | | | $ | 556 | | | $ | 1,365 | | | $ | 1,092 | |
| | | | |
Duke Energy Carolinas GWh sales | | | 20,836 | | | | 20,202 | | | | 44,529 | | | | 42,448 | |
Duke Energy Progress GWh sales | | | 14,693 | | | | 14,055 | | | | 30,854 | | | | 28,756 | |
Duke Energy Florida GWh sales | | | 9,840 | | | | 9,853 | | | | 18,501 | | | | 17,869 | |
Duke Energy Ohio GWh sales | | | 5,824 | | | | 5,800 | | | | 12,303 | | | | 11,978 | |
Duke Energy Indiana GWh sales | | | 8,455 | | | | 7,937 | | | | 17,329 | | | | 16,442 | |
| | | | | | | | | | | | | | | | |
Total GWh sales | | | 59,648 | | | | 57,847 | | | | 123,516 | | | | 117,493 | |
| | | | | | | | | | | | | | | | |
Net Proportional MW Capacity in Operation | | | | | | | | | | | 49,452 | | | | 49,560 | |
| | | | |
INTERNATIONAL ENERGY | | | | | | | | | | | | | | | | |
Operating Revenues | | $ | 364 | | | $ | 406 | | | $ | 746 | | | $ | 798 | |
Operating Expenses | | | 254 | | | | 270 | | | | 485 | | | | 533 | |
Gains on Sales of Other Assets, net | | | 5 | | | | — | | | | 5 | | | | — | |
| | | | | | | | | | | | | | | | |
Operating Income | | | 115 | | | | 136 | | | | 266 | | | | 265 | |
Other Income and Expenses | | | 52 | | | | 14 | | | | 109 | | | | 47 | |
Interest Expense | | | 23 | | | | 17 | | | | 46 | | | | 38 | |
| | | | | | | | | | | | | | | | |
Income Before Income Taxes | | | 144 | | | | 133 | | | | 329 | | | | 274 | |
Income Tax Expense | | | (5 | ) | | | 42 | | | | 46 | | | | 84 | |
Less: Income Attributable to Noncontrolling Interests | | | 3 | | | | 4 | | | | 7 | | | | 6 | |
| | | | | | | | | | | | | | | | |
Segment Income | | $ | 146 | | | $ | 87 | | | $ | 276 | | | $ | 184 | |
| | | | | | | | | | | | | | | | |
| | | | |
Depreciation and Amortization | | $ | 27 | | | $ | 24 | | | $ | 50 | | | $ | 50 | |
| | | | |
Sales, GWh | | | 4,281 | | | | 4,926 | | | | 9,522 | | | | 9,682 | |
Proportional MW Capacity in Operation | | | | | | | | | | | 4,411 | | | | 4,584 | |
| | | | |
COMMERCIAL POWER | | | | | | | | | | | | | | | | |
Operating Revenues(e) | | $ | 309 | | | $ | 557 | | | $ | 758 | | | $ | 1,009 | |
Operating Expenses(f) | | | 502 | | | | 508 | | | | 2,364 | | | | 1,041 | |
Gains on Sales of Other Assets, net | | | 1 | | | | 1 | | | | 1 | | | | 1 | |
| | | | | | | | | | | | | | | | |
Operating (Loss) Income | | | (192 | ) | | | 50 | | | | (1,605 | ) | | | (31 | ) |
Other Income and Expenses | | | 5 | | | | — | | | | 10 | | | | 11 | |
Interest Expense | | | 23 | | | | 17 | | | | 38 | | | | 32 | |
| | | | | | | | | | | | | | | | |
(Loss) Income Before Income Taxes | | | (210 | ) | | | 33 | | | | (1,633 | ) | | | (52 | ) |
Income Tax Benefit(g)(h) | | | (90 | ) | | | (8 | ) | | | (634 | ) | | | (51 | ) |
| | | | | | | | | | | | | | | | |
Segment (Loss) Income | | $ | (120 | ) | | $ | 41 | | | $ | (999 | ) | | $ | (1 | ) |
| | | | | | | | | | | | | | | | |
| | | | |
Depreciation and Amortization | | $ | 20 | | | $ | 62 | | | $ | 81 | | | $ | 125 | |
Actual Coal-fired Plant Production, GWh | | | 3,087 | | | | 4,185 | | | | 7,798 | | | | 8,734 | |
Actual Gas-fired Plant Production, GWh | | | 3,981 | | | | 3,341 | | | | 7,773 | | | | 7,238 | |
Actual Renewable Plant Production, GWh | | | 1,469 | | | | 1,415 | | | | 3,058 | | | | 2,820 | |
| | | | | | | | | | | | | | | | |
Actual Plant Production, GWh | | | 8,537 | | | | 8,941 | | | | 18,629 | | | | 18,792 | |
| | | | | | | | | | | | | | | | |
Net Proportional MW Capacity in Operation | | | | | | | | | | | 7,839 | | | | 8,127 | |
| | | | |
OTHER | | | | | | | | | | | | | | | | |
Operating Revenues | | $ | 28 | | | $ | 36 | | | $ | 53 | | | $ | 71 | |
Operating Expenses(i)(j) | | | 100 | | | | 156 | | | | 184 | | | | 246 | |
Losses on Sales of Other Assets, net | | | — | | | | (4 | ) | | | — | | | | (4 | ) |
| | | | | | | | | | | | | | | | |
Operating Loss | | | (72 | ) | | | (124 | ) | | | (131 | ) | | | (179 | ) |
Other Income and Expenses | | | 15 | | | | 8 | | | | 22 | | | | 19 | |
Interest Expense | | | 103 | | | | 105 | | | | 208 | | | | 200 | |
| | | | | | | | | | | | | | | | |
Loss Before Income Taxes | | | (160 | ) | | | (221 | ) | | | (317 | ) | | | (360 | ) |
Income Tax Benefit(k)(l) | | | (58 | ) | | | (81 | ) | | | (133 | ) | | | (141 | ) |
Less: Income (Loss) Attributable to Noncontrolling Interests | | | 1 | | | | (1 | ) | | | 1 | | | | (3 | ) |
| | | | | | | | | | | | | | | | |
Segment Net Expense | | $ | (103 | ) | | $ | (139 | ) | | $ | (185 | ) | | $ | (216 | ) |
| | | | | | | | | | | | | | | | |
| | | | |
Depreciation and Amortization | | $ | 26 | | | $ | 36 | | | $ | 55 | | | $ | 71 | |
| (a) | Includes a pre-tax impairment charge of $295 million for the three and six months ended June 30, 2013, related to the Crystal River Unit 3 Nuclear Station. |
| (b) | Includes pre-tax impairment charges of $87 million for the three and six months ended June 30, 2013, related to nuclear development costs. |
| (c) | Includes a tax benefit of $115 million for the three and six months ended June 30, 2013, on the impairment related to the Crystal River Unit 3 Nuclear Station. |
| (d) | Includes a tax benefit of $30 million for the three and six months ended June 30, 2013, on the impairment related to nuclear development costs. |
| (e) | Includes mark-to-market losses on economic hedges of $185 million for the three months ended June 30, 2014 and $309 million for the six months ended June 30, 2014. |
| (f) | Includes a pre-tax impairment charge of $1,381 million for the six months ended June 30, 2014, related to the planned sale of the Midwest Generation assets. |
| (g) | Includes a tax benefit of $77 million for the three months ended June 30, 2014 and $89 million for the six months ended June 30, 2014, related to the mark-to-market losses on economic hedges. |
| (h) | Includes a tax benefit of $514 million for the six months ended June 30, 2014, on the impairment related to the planned sale of the Midwest Generation assets. |
| (i) | Includes costs to achieve Progress merger of $61 million recorded in Operating Expense for the three months ended June 30, 2014, and $114 million recorded in Operating Expense for the six months ended June 30, 2014. |
| (j) | Includes costs to achieve Progress merger of $92 million recorded in Operating Expense for the three months ended June 30, 2013, and $162 million recorded in Operating Expense for the six months ended June 30, 2013. |
| (k) | Includes tax benefit related to costs to achieve Progress merger of $23 million for the three months ended June 30, 2014, and $44 million for the six months ended June 30, 2014. |
| (l) | Includes tax benefit related to costs to achieve Progress merger of $31 million for the three months ended June 30, 2013, and $52 million for the six months ended June 30, 2013. |
13
DUKE ENERGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In millions, except per-share amounts)
| | | | | | | | | | | | | | | | |
| | | Three Months Ended
June 30, | | | Six Months Ended
June 30, | |
| | | 2014 | | | 2013 | | | 2014 | | | 2013 | |
Operating Revenues | | | | | | | | | | | | | | | | |
Regulated electric | | $ | 5,167 | | | $ | 4,834 | | | $ | 10,745 | | | $ | 9,723 | |
Nonregulated electric, natural gas, and other | | | 675 | | | | 951 | | | | 1,499 | | | | 1,775 | |
Regulated natural gas | | | 107 | | | | 94 | | | | 329 | | | | 279 | |
| | | | | | | | | | | | | | | | |
Total operating revenues | | | 5,949 | | | | 5,879 | | | | 12,573 | | | | 11,777 | |
| | | | | | | | | | | | | | | | |
Operating Expenses | | | | | | | | | | | | | | | | |
Fuel used in electric generation and purchased power - regulated | | | 1,808 | | | | 1,678 | | | | 3,808 | | | | 3,381 | |
Fuel used in electric generation and purchased power - nonregulated | | | 436 | | | | 447 | | | | 845 | | | | 901 | |
Cost of natural gas and other | | | 43 | | | | 43 | | | | 165 | | | | 147 | |
Operation, maintenance and other | | | 1,467 | | | | 1,504 | | | | 2,973 | | | | 2,925 | |
Depreciation and amortization | | | 761 | | | | 678 | | | | 1,551 | | | | 1,338 | |
Property and other taxes | | | 318 | | | | 323 | | | | 676 | | | | 666 | |
Impairment charges | | | 6 | | | | 386 | | | | 1,388 | | | | 386 | |
| | | | | | | | | | | | | | | | |
Total operating expenses | | | 4,839 | | | | 5,059 | | | | 11,406 | | | | 9,744 | |
| | | | | | | | | | | | | | | | |
Gains on Sales of Other Assets and Other, net | | | 6 | | | | 1 | | | | 7 | | | | 3 | |
| | | | | | | | | | | | | | | | |
Operating Income | | | 1,116 | | | | 821 | | | | 1,174 | | | | 2,036 | |
| | | | | | | | | | | | | | | | |
Other Income and Expenses | | | | | | | | | | | | | | | | |
Equity in earnings of unconsolidated affiliates | | | 33 | | | | 22 | | | | 69 | | | | 58 | |
Other income and expenses, net | | | 89 | | | | 48 | | | | 184 | | | | 128 | |
| | | | | | | | | | | | | | | | |
Total other income and expenses | | | 122 | | | | 70 | | | | 253 | | | | 186 | |
| | | | | | | | | | | | | | | | |
Interest Expense | | | 413 | | | | 381 | | | | 819 | | | | 748 | |
| | | | | | | | | | | | | | | | |
Income From Continuing Operations Before Income Taxes | | | 825 | | | | 510 | | | | 608 | | | | 1,474 | |
Income Tax Expense from Continuing Operations | | | 209 | | | | 165 | | | | 82 | | | | 495 | |
| | | | | | | | | | | | | | | | |
Income From Continuing Operations | | | 616 | | | | 345 | | | | 526 | | | | 979 | |
| | | | | | | | | | | | | | | | |
Loss From Discontinued Operations, net of tax | | | (3 | ) | | | (3 | ) | | | (6 | ) | | | (3 | ) |
| | | | | | | | | | | | | | | | |
Net Income | | | 613 | | | | 342 | | | | 520 | | | | 976 | |
Less: Net Income Attributable to Noncontrolling Interests | | | 4 | | | | 3 | | | | 8 | | | | 3 | |
| | | | | | | | | | | | | | | | |
Net Income Attributable to Duke Energy Corporation | | $ | 609 | | | $ | 339 | | | $ | 512 | | | $ | 973 | |
| | | | | | | | | | | | | | | | |
| | | | |
Earnings Per Share - Basic and Diluted | | | | | | | | | | | | | | | | |
Income from continuing operations attributable to Duke Energy Corporation common shareholders | | | | | | | | | | | | | | | | |
Basic | | $ | 0.86 | | | $ | 0.48 | | | $ | 0.73 | | | $ | 1.37 | |
Diluted | | $ | 0.86 | | | $ | 0.48 | | | $ | 0.73 | | | $ | 1.37 | |
Loss from discontinued operations attributable to Duke Energy Corporation common shareholders | | | | | | | | | | | | | | | | |
Basic | | $ | — | | | $ | — | | | $ | (0.01 | ) | | $ | — | |
Diluted | | $ | — | | | $ | — | | | $ | (0.01 | ) | | $ | — | |
Net Income attributable to Duke Energy Corporation common shareholders | | | | | | | | | | | | | | | | |
Basic | | $ | 0.86 | | | $ | 0.48 | | | $ | 0.72 | | | $ | 1.37 | |
Diluted | | $ | 0.86 | | | $ | 0.48 | | | $ | 0.72 | | | $ | 1.37 | |
Weighted-average shares outstanding | | | | | | | | | | | | | | | | |
Basic | | | 707 | | | | 706 | | | | 707 | | | | 705 | |
Diluted | | | 707 | | | | 706 | | | | 707 | | | | 706 | |
14
DUKE ENERGY CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions)
| | | | | | | | |
| | | June 30,
2014 | | | December 31,
2013 | |
ASSETS | | | | | | | | |
Current Assets | | | | | | | | |
Cash and cash equivalents | | $ | 2,008 | | | $ | 1,501 | |
Short-term investments | | | — | | | | 44 | |
Receivables (net of allowance for doubtful accounts of $18 at June 30, 2014 and $30 at December 31, 2013) | | | 877 | | | | 1,286 | |
Restricted receivables of variable interest entities (net of allowance for doubtful accounts of $54 at June 30, 2014 and $43 at December 31, 2013) | | | 2,118 | | | | 1,719 | |
Inventory | | | 3,056 | | | | 3,250 | |
Assets held for sale | | | 409 | | | | — | |
Regulatory assets | | | 1,349 | | | | 895 | |
Other | | | 1,698 | | | | 1,821 | |
| | | | | | | | |
Total current assets | | | 11,515 | | | | 10,516 | |
| | | | | | | | |
Investments and Other Assets | | | | | | | | |
Investments in equity method unconsolidated affiliates | | | 381 | | | | 390 | |
Nuclear decommissioning trust funds | | | 5,417 | | | | 5,132 | |
Goodwill | | | 16,343 | | | | 16,340 | |
Assets held for sale | | | 2,195 | | | | 107 | |
Other | | | 3,227 | | | | 3,432 | |
| | | | | | | | |
Total investments and other assets | | | 27,563 | | | | 25,401 | |
| | | | | | | | |
Property, Plant and Equipment | | | | | | | | |
Cost | | | 100,885 | | | | 103,115 | |
Accumulated depreciation and amortization | | | (33,977 | ) | | | (33,625 | ) |
| | | | | | | | |
Net property, plant and equipment | | | 66,908 | | | | 69,490 | |
| | | | | | | | |
Regulatory Assets and Deferred Debits | | | | | | | | |
Regulatory assets | | | 9,009 | | | | 9,191 | |
Other | | | 178 | | | | 181 | |
| | | | | | | | |
Total regulatory assets and deferred debits | | | 9,187 | �� | | | 9,372 | |
| | | | | | | | |
Total Assets | | $ | 115,173 | | | $ | 114,779 | |
| | | | | | | | |
| | |
LIABILITIES AND EQUITY | | | | | | | | |
Current Liabilities | | | | | | | | |
Accounts payable | | $ | 1,782 | | | $ | 2,391 | |
Notes payable and commercial paper | | | 1,867 | | | | 839 | |
Taxes accrued | | | 522 | | | | 551 | |
Interest accrued | | | 453 | | | | 440 | |
Current maturities of long-term debt | | | 1,887 | | | | 2,104 | |
Liabilities associated with assets held for sale | | | 271 | | | | 7 | |
Regulatory liabilities | | | 140 | | | | 316 | |
Other | | | 1,786 | | | | 1,996 | |
| | | | | | | | |
Total current liabilities | | | 8,708 | | | | 8,644 | |
| | | | | | | | |
Long-term Debt | | | 38,706 | | | | 38,152 | |
| | | | | | | | |
Deferred Credits and Other Liabilities | | | | | | | | |
Deferred income taxes | | | 12,014 | | | | 12,097 | |
Investment tax credits | | | 435 | | | | 442 | |
Accrued pension and other post-retirement benefit costs | | | 1,263 | | | | 1,322 | |
Liabilities associated with assets held for sale | | | 75 | | | | 66 | |
Asset retirement obligations | | | 5,030 | | | | 4,950 | |
Regulatory liabilities | | | 6,338 | | | | 5,949 | |
Other | | | 1,723 | | | | 1,749 | |
| | | | | | | | |
Total deferred credits and other liabilities | | | 26,878 | | | | 26,575 | |
| | | | | | | | |
Equity | | | | | | | | |
Common stock, $0.001 par value, 2 billion shares authorized; 707 million and 706 million shares outstanding at June 30, 2014 and December 31, 2013, respectively | | | 1 | | | | 1 | |
Additional paid-in capital | | | 39,389 | | | | 39,365 | |
Retained earnings | | | 1,768 | | | | 2,363 | |
Accumulated other comprehensive loss | | | (355 | ) | | | (399 | ) |
| | | | | | | | |
Total Duke Energy Corporation stockholders’ equity | | | 40,803 | | | | 41,330 | |
Noncontrolling interests | | | 78 | | | | 78 | |
| | | | | | | | |
Total equity | | | 40,881 | | | | 41,408 | |
| | | | | | | | |
Total Liabilities and Equity | | $ | 115,173 | | | $ | 114,779 | |
| | | | | | | | |
15
DUKE ENERGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In millions)
| | | | | | | | |
| | | Six Months Ended
June 30, | |
| | | 2014 | | | 2013 | |
| | |
CASH FLOWS FROM OPERATING ACTIVITIES | | | | | | | | |
Net Income | | $ | 520 | | | $ | 976 | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | 2,099 | | | | 1,867 | |
| | | | | | | | |
Net cash provided by operating activities | | | 2,619 | | | | 2,843 | |
| | | | | | | | |
| | |
CASH FLOWS FROM INVESTING ACTIVITIES | | | | | | | | |
Net cash used in investing activities | | | (2,367 | ) | | | (2,562 | ) |
| | | | | | | | |
| | |
CASH FLOWS FROM FINANCING ACTIVITIES | | | | | | | | |
Net cash provided by (used in) financing activities | | | 255 | | | | (134 | ) |
| | | | | | | | |
| | |
Net increase in cash and cash equivalents | | | 507 | | | | 147 | |
Cash and cash equivalents at beginning of period | | | 1,501 | | | | 1,424 | |
| | | | | | | | |
Cash and cash equivalents at end of period | | $ | 2,008 | | | $ | 1,571 | |
| | | | | | | | |
16
Regulated Utilities
Quarterly Highlights
Supplemental Regulated Utilities Electric Information
June 2014
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended
June 30 | | | Six Months Ended
June 30 | |
| | | 2014 | | | 2013 | | | %
Inc. (Dec.) | | | % Inc. (Dec.)
Weather
Normal (2) | | | 2014 | | | 2013 | | | %
Inc. (Dec.) | | | % Inc. (Dec.)
Weather
Normal (2) | |
| | | | | | | | |
GWH Sales (1) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential | | | 17,911 | | | | 17,857 | | | | 0.3 | % | | | 0.1 | % | | | 42,104 | | | | 39,591 | | | | 6.3 | % | | | 1.6 | % |
General Service | | | 18,725 | | | | 18,431 | | | | 1.6 | % | | | 0.5 | % | | | 36,872 | | | | 35,976 | | | | 2.5 | % | | | 2.0 | % |
Industrial | | | 13,081 | | | | 12,821 | | | | 2.0 | % | | | 0.8 | % | | | 25,136 | | | | 24,746 | | | | 1.6 | % | | | 0.6 | % |
Other Energy Sales | | | 153 | | | | 149 | | | | 2.7 | % | | | | | | | 303 | | | | 300 | | | | 1.0 | % | | | | |
Unbilled Sales | | | 1,164 | | | | 549 | | | | 112.0 | % | | | n/a | | | | 580 | | | | 343 | | | | 69.1 | % | | | n/a | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Retail Sales | | | 51,034 | | | | 49,807 | | | | 2.5 | % | | | 0.4 | % | | | 104,995 | | | | 100,956 | | | | 4.0 | % | | | 1.5 | % |
| | | | | | | | |
Special Sales | | | 8,614 | | | | 8,040 | | | | 7.1 | % | | | | | | | 18,521 | | | | 16,537 | | | | 12.0 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Consolidated Electric Sales -
Regulated Utilities | | | 59,648 | | | | 57,847 | | | | 3.1 | % | | | | | | | 123,516 | | | | 117,493 | | | | 5.1 | % | | | | |
| | | | | | | | |
Average Number of Customers | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential | | | 6,266,316 | | | | 6,205,209 | | | | 1.0 | % | | | | | | | 6,265,818 | | | | 6,203,184 | | | | 1.0 | % | | | | |
General Service | | | 941,986 | | | | 935,671 | | | | 0.7 | % | | | | | | | 940,517 | | | | 933,951 | | | | 0.7 | % | | | | |
Industrial | | | 18,308 | | | | 18,635 | | | | (1.8 | %) | | | | | | | 18,341 | | | | 18,662 | | | | (1.7 | %) | | | | |
Other Energy Sales | | | 22,468 | | | | 22,193 | | | | 1.2 | % | | | | | | | 22,464 | | | | 22,152 | | | | 1.4 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Regular Sales | | | 7,249,078 | | | | 7,181,708 | | | | 0.9 | % | | | | | | | 7,247,140 | | | | 7,177,949 | | | | 1.0 | % | | | | |
| | | | | | | | |
Special Sales | | | 60 | | | | 61 | | | | (1.6 | %) | | | | | | | 62 | | | | 62 | | | | 0.0 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Average Number of Customers -
Regulated Utilities | | | 7,249,138 | | | | 7,181,769 | | | | 0.9 | % | | | | | | | 7,247,202 | | | | 7,178,011 | | | | 1.0 | % | | | | |
| | | | | | | | |
Heating and Cooling Degree Days (3) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Carolinas - Actual | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Heating Degree Days | | | 156 | | | | 232 | | | | (32.8 | %) | | | | | | | 2,125 | | | | 2,007 | | | | 5.9 | % | | | | |
Cooling Degree Days | | | 593 | | | | 466 | | | | 27.3 | % | | | | | | | 593 | | | | 467 | | | | 27.0 | % | | | | |
| | | | | | | | |
Variance from Normal | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Heating Degree Days | | | (15.7 | %) | | | 22.8 | % | | | n/a | | | | | | | | 15.4 | % | | | 6.6 | % | | | n/a | | | | | |
Cooling Degree Days | | | 10.2 | % | | | (14.3 | %) | | | n/a | | | | | | | | 8.2 | % | | | (15.2 | %) | | | n/a | | | | | |
| | | | | | | | |
Midwest - Actual | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Heating Degree Days | | | 443 | | | | 462 | | | | (4.1 | %) | | | | | | | 3,756 | | | | 3,296 | | | | 14.0 | % | | | | |
Cooling Degree Days | | | 350 | | | | 338 | | | | 3.6 | % | | | | | | | 350 | | | | 338 | | | | 3.6 | % | | | | |
| | | | | | | | |
Variance from Normal | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Heating Degree Days | | | 4.2 | % | | | 3.6 | % | | | n/a | | | | | | | | 22.3 | % | | | 5.3 | % | | | n/a | | | | | |
Cooling Degree Days | | | (0.3 | %) | | | (0.9 | %) | | | n/a | | | | | | | | (1.7 | %) | | | (1.5 | %) | | | n/a | | | | | |
| | | | | | | | |
Florida - Actual | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Heating Degree Days | | | 1 | | | | — | | | | n/a | | | | | | | | 418 | | | | 338 | | | | 23.7 | % | | | | |
Cooling Degree Days | | | 1,061 | | | | 1,041 | | | | 1.9 | % | | | | | | | 1,205 | | | | 1,220 | | | | (1.2 | %) | | | | |
| | | | | | | | |
Variance from Normal | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Heating Degree Days | | | (90.9 | %) | | | (100.0 | %) | | | n/a | | | | | | | | 0.7 | % | | | (18.8 | %) | | | n/a | | | | | |
Cooling Degree Days | | | 0.7 | % | | | (1.2 | %) | | | n/a | | | | | | | | (2.1 | %) | | | (0.8 | %) | | | n/a | | | | | |
| (1) | Except as indicated in footnote (2), represents non-weather normalized billed sales, with energy delivered but not yet billed (i.e. unbilled sales) reflected as a single amount and not allocated to the respective retail classes. |
| (2) | Represents weather normal total retail calendar sales (i.e. billed and unbilled sales). |
| (3) | Certain 2013 data has been recast to conform to the 2014 methodology which provides for consistency across all Regulated Utilities’ jurisdictions. |
17
Duke Energy Carolinas
Quarterly Highlights
Supplemental Regulated Utilities Electric Information
June 2014
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Six Months Ended | |
| | | June 30 | | | June 30 | |
| | | | | | | | | | | | % Inc. (Dec.) | | | | | | | | | | | | % Inc. (Dec.) | |
| | | | | | | | | % | | | Weather | | | | | | | | | % | | | Weather | |
| | | 2014 | | | 2013 | | | Inc. (Dec.) | | | Normal (2) | | | 2014 | | | 2013 | | | Inc. (Dec.) | | | Normal (2) | |
| | | | | | | | |
GWH Sales (1) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential | | | 5,872 | | | | 5,818 | | | | 0.9 | % | | | | | | | 14,436 | | | | 13,523 | | | | 6.8 | % | | | | |
General Service | | | 6,953 | | | | 6,777 | | | | 2.6 | % | | | | | | | 13,734 | | | | 13,303 | | | | 3.2 | % | | | | |
Industrial | | | 5,467 | | | | 5,329 | | | | 2.6 | % | | | | | | | 10,381 | | | | 10,140 | | | | 2.4 | % | | | | |
Other Energy Sales | | | 76 | | | | 72 | | | | 5.6 | % | | | | | | | 149 | | | | 146 | | | | 2.1 | % | | | | |
Unbilled Sales | | | 366 | | | | 16 | | | | 2187.5 | % | | | | | | | 185 | | | | 26 | | | | 611.5 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Regular Electric Sales | | | 18,734 | | | | 18,012 | | | | 4.0 | % | | | 0.6 | % | | | 38,885 | | | | 37,138 | | | | 4.7 | % | | | 1.5 | % |
| | | | | | | | |
Special Sales | | | 2,102 | | | | 2,190 | | | | (4.0 | %) | | | | | | | 5,644 | | | | 5,310 | | | | 6.3 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Electric Sales - Duke Energy Carolinas | | | 20,836 | | | | 20,202 | | | | 3.1 | % | | | | | | | 44,529 | | | | 42,448 | | | | 4.9 | % | | | | |
| | | | | | | | |
Average Number of Customers | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential | | | 2,083,576 | | | | 2,064,385 | | | | 0.9 | % | | | | | | | 2,082,721 | | | | 2,063,362 | | | | 0.9 | % | | | | |
General Service | | | 341,212 | | | | 338,779 | | | | 0.7 | % | | | | | | | 340,700 | | | | 338,147 | | | | 0.8 | % | | | | |
Industrial | | | 6,531 | | | | 6,627 | | | | (1.4 | %) | | | | | | | 6,527 | | | | 6,639 | | | | (1.7 | %) | | | | |
Other Energy Sales | | | 14,505 | | | | 14,412 | | | | 0.6 | % | | | | | | | 14,495 | | | | 14,381 | | | | 0.8 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Regular Sales | | | 2,445,824 | | | | 2,424,203 | | | | 0.9 | % | | | | | | | 2,444,443 | | | | 2,422,529 | | | | 0.9 | % | | | | |
| | | | | | | | |
Special Sales | | | 24 | | | | 24 | | | | 0.0 | % | | | | | | | 25 | | | | 24 | | | | 4.2 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Average Number of Customers - Duke Energy Carolinas | | | 2,445,848 | | | | 2,424,227 | | | | 0.9 | % | | | | | | | 2,444,468 | | | | 2,422,553 | | | | 0.9 | % | | | | |
| | | | | | | | |
Heating and Cooling Degree Days (3) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Actual | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Heating Degree Days | | | 181 | | | | 249 | | | | (27.3 | %) | | | | | | | 2,223 | | | | 2,106 | | | | 5.6 | % | | | | |
Cooling Degree Days | | | 557 | | | | 438 | | | | 27.2 | % | | | | | | | 557 | | | | 438 | | | | 27.2 | % | | | | |
| | | | | | | | |
Variance from Normal | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Heating Degree Days | | | (10.0 | %) | | | 20.9 | % | | | n/a | | | | | | | | 16.0 | % | | | 7.4 | % | | | n/a | | | | | |
Cooling Degree Days | | | 8.4 | % | | | (15.1 | %) | | | n/a | | | | | | | | 6.5 | % | | | (16.3 | %) | | | n/a | | | | | |
| (1) | Except as indicated in footnote (2), represents non-weather normalized billed sales, with energy delivered but not yet billed (i.e. unbilled sales) reflected as a single amount and not allocated to the respective retail classes. |
| (2) | Represents weather normal total retail calendar sales (i.e. billed and unbilled sales). |
| (3) | Certain 2013 data has been recast to conform to the 2014 methodology which provides for consistency across all Regulated Utilities’ jurisdictions. |
18
Duke Energy Progress
Quarterly Highlights
Supplemental Regulated Utilities Electric Information
June 2014
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended
June 30 | | | Six Months Ended
June 30 | |
| | | | | | | | | | | | % Inc. (Dec.) | | | | | | | | | | | | % Inc. (Dec.) | |
| | | | | | | | | % | | | Weather | | | | | | | | | % | | | Weather | |
| | | 2014 | | | 2013 | | | Inc. (Dec.) | | | Normal (2) | | | 2014 | | | 2013 | | | Inc. (Dec.) | | | Normal (2) | |
| | | | | | | | |
GWH Sales (1) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential | | | 3,959 | | | | 3,812 | | | | 3.9 | % | | | | | | | 9,539 | | | | 8,771 | | | | 8.8 | % | | | | |
General Service | | | 3,769 | | | | 3,675 | | | | 2.6 | % | | | | | | | 7,410 | | | | 7,157 | | | | 3.5 | % | | | | |
Industrial | | | 2,616 | | | | 2,664 | | | | (1.8 | %) | | | | | | | 4,997 | | | | 5,108 | | | | (2.2 | %) | | | | |
Other Energy Sales | | | 29 | | | | 30 | | | | (3.3 | %) | | | | | | | 59 | | | | 60 | | | | (1.7 | %) | | | | |
Unbilled Sales | | | (30 | ) | | | (48 | ) | | | 37.5 | % | | | | | | | (27 | ) | | | (13 | ) | | | (107.7 | %) | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Regular Electric Sales | | | 10,343 | | | | 10,133 | | | | 2.1 | % | | | (1.5 | %) | | | 21,978 | | | | 21,083 | | | | 4.2 | % | | | 0.4 | % |
| | | | | | | | |
Special Sales | | | 4,350 | | | | 3,922 | | | | 10.9 | % | | | | | | | 8,876 | | | | 7,673 | | | | 15.7 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Electric Sales - Duke Energy Progress | | | 14,693 | | | | 14,055 | | | | 4.5 | % | | | | | | | 30,854 | | | | 28,756 | | | | 7.3 | % | | | | |
| | | | | | | | |
Average Number of Customers | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential | | | 1,253,519 | | | | 1,240,416 | | | | 1.1 | % | | | | | | | 1,252,564 | | | | 1,238,992 | | | | 1.1 | % | | | | |
General Service | | | 223,061 | | | | 221,592 | | | | 0.7 | % | | | | | | | 222,477 | | | | 220,900 | | | | 0.7 | % | | | | |
Industrial | | | 4,277 | | | | 4,375 | | | | (2.2 | %) | | | | | | | 4,284 | | | | 4,385 | | | | (2.3 | %) | | | | |
Other Energy Sales | | | 1,730 | | | | 1,812 | | | | (4.5 | %) | | | | | | | 1,741 | | | | 1,812 | | | | (3.9 | %) | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Regular Sales | | | 1,482,587 | | | | 1,468,195 | | | | 1.0 | % | | | | | | | 1,481,066 | | | | 1,466,089 | | | | 1.0 | % | | | | |
| | | | | | | | |
Special Sales | | | 15 | | | | 15 | | | | 0.0 | % | | | | | | | 15 | | | | 15 | | | | 0.0 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Average Number of Customers - Duke Energy Progress | | | 1,482,602 | | | | 1,468,210 | | | | 1.0 | % | | | | | | | 1,481,081 | | | | 1,466,104 | | | | 1.0 | % | | | | |
| | | | | | | | |
Heating and Cooling Degree Days (3) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Actual | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Heating Degree Days | | | 131 | | | | 214 | | | | (38.8 | %) | | | | | | | 2,027 | | | | 1,909 | | | | 6.2 | % | | | | |
Cooling Degree Days | | | 629 | | | | 494 | | | | 27.3 | % | | | | | | | 629 | | | | 496 | | | | 26.8 | % | | | | |
| | | | | | | | |
Variance from Normal | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Heating Degree Days | | | (22.0 | %) | | | 25.1 | % | | | n/a | | | | | | | | 14.7 | % | | | 5.9 | % | | | n/a | | | | | |
Cooling Degree Days | | | 11.7 | % | | | (13.5 | %) | | | n/a | | | | | | | | 9.6 | % | | | (14.3 | %) | | | n/a | | | | | |
| (1) | Except as indicated in footnote (2), represents non-weather normalized billed sales, with energy delivered but not yet billed (i.e. unbilled sales) reflected as a single amount and not allocated to the respective retail classes. |
| (2) | Represents weather normal total retail calendar sales (i.e. billed and unbilled sales). |
| (3) | Certain 2013 data has been recast to conform to the 2014 methodology which provides for consistency across all Regulated Utilities’ jurisdictions. |
19
Duke Energy Florida
Quarterly Highlights
Supplemental Regulated Utilities Electric Information
June 2014
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Six Months Ended | |
| | | June 30 | | | June 30 | |
| | | | | | | | | | | | % Inc. (Dec.) | | | | | | | | | | | | % Inc. (Dec.) | |
| | | | | | | | | % | | | Weather | | | | | | | | | % | | | Weather | |
| | | 2014 | | | 2013 | | | Inc. (Dec.) | | | Normal (2) | | | 2014 | | | 2013 | | | Inc. (Dec.) | | | Normal (2) | |
| | | | | | | | |
GWH Sales (1) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential | | | 4,396 | | | | 4,491 | | | | (2.1 | %) | | | | | | | 8,447 | | | | 8,235 | | | | 2.6 | % | | | | |
General Service | | | 3,702 | | | | 3,694 | | | | 0.2 | % | | | | | | | 6,950 | | | | 6,918 | | | | 0.5 | % | | | | |
Industrial | | | 803 | | | | 827 | | | | (2.9 | %) | | | | | | | 1,604 | | | | 1,582 | | | | 1.4 | % | | | | |
Other Energy Sales | | | 6 | | | | 6 | | | | 0.0 | % | | | | | | | 12 | | | | 12 | | | | 0.0 | % | | | | |
Unbilled Sales | | | 592 | | | | 379 | | | | 56.2 | % | | | | | | | 731 | | | | 413 | | | | 77.0 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Regular Sales | | | 9,499 | | | | 9,397 | | | | 1.1 | % | | | 0.5 | % | | | 17,744 | | | | 17,160 | | | | 3.4 | % | | | 1.8 | % |
| | | | | | | | |
Special Sales | | | 341 | | | | 456 | | | | (25.2 | %) | | | | | | | 757 | | | | 709 | | | | 6.8 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Electric Sales - Duke Energy Florida | | | 9,840 | | | | 9,853 | | | | (0.1 | %) | | | | | | | 18,501 | | | | 17,869 | | | | 3.5 | % | | | | |
| | | | | | | | |
Average Number of Customers | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential | | | 1,498,175 | | | | 1,476,411 | | | | 1.5 | % | | | | | | | 1,495,267 | | | | 1,475,080 | | | | 1.4 | % | | | | |
General Service | | | 190,979 | | | | 188,839 | | | | 1.1 | % | | | | | | | 190,708 | | | | 188,591 | | | | 1.1 | % | | | | |
Industrial | | | 2,279 | | | | 2,357 | | | | (3.3 | %) | | | | | | | 2,290 | | | | 2,359 | | | | (2.9 | %) | | | | |
Other Energy Sales | | | 1,556 | | | | 1,567 | | | | (0.7 | %) | | | | | | | 1,556 | | | | 1,568 | | | | (0.8 | %) | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Regular Sales | | | 1,692,989 | | | | 1,669,174 | | | | 1.4 | % | | | | | | | 1,689,821 | | | | 1,667,598 | | | | 1.3 | % | | | | |
| | | | | | | | |
Special Sales | | | 14 | | | | 15 | | | | (6.7 | %) | | | | | | | 15 | | | | 15 | | | | 0.0 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Average Number of Customers - Duke Energy Florida | | | 1,693,003 | | | | 1,669,189 | | | | 1.4 | % | | | | | | | 1,689,836 | | | | 1,667,613 | | | | 1.3 | % | | | | |
| | | | | | | | |
Heating and Cooling Degree Days (3) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Actual | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Heating Degree Days | | | 1 | | | | — | | | | n/a | | | | | | | | 418 | | | | 338 | | | | 23.7 | % | | | | |
Cooling Degree Days | | | 1,061 | | | | 1,041 | | | | 1.9 | % | | | | | | | 1,205 | | | | 1,220 | | | | (1.2 | %) | | | | |
| | | | | | | | |
Variance from Normal | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Heating Degree Days | | | (90.9 | %) | | | (100.0 | %) | | | n/a | | | | | | | | 0.7 | % | | | (18.8 | %) | | | n/a | | | | | |
Cooling Degree Days | | | 0.7 | % | | | (1.2 | %) | | | n/a | | | | | | | | (2.1 | %) | | | (0.8 | %) | | | n/a | | | | | |
| (1) | Except as indicated in footnote (2), represents non-weather normalized billed sales, with energy delivered but not yet billed (i.e. unbilled sales) reflected as a single amount and not allocated to the respective retail classes. |
| (2) | Represents weather normal total retail calendar sales (i.e. billed and unbilled sales). |
| (3) | Certain 2013 data has been recast to conform to the 2014 methodology which provides for consistency across all Regulated Utilities’ jurisdictions. |
20
Duke Energy Ohio
Quarterly Highlights
Supplemental Regulated Utilities Electric Information
June 2014
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Six Months Ended | |
| | | June 30 | | | June 30 | |
| | | | | | | | | | | | % Inc. (Dec.) | | | | | | | | | | | | % Inc. (Dec.) | |
| | | | | | | | | % | | | Weather | | | | | | | | | % | | | Weather | |
| | | 2014 | | | 2013 | | | Inc. (Dec.) | | | Normal (2) | | | 2014 | | | 2013 | | | Inc. (Dec.) | | | Normal (2) | |
| | | | | | | | |
GWH Sales (1) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential | | | 1,813 | | | | 1,837 | | | | (1.3 | %) | | | | | | | 4,592 | | | | 4,335 | | | | 5.9 | % | | | | |
General Service | | | 2,299 | | | | 2,283 | | | | 0.7 | % | | | | | | | 4,671 | | | | 4,565 | | | | 2.3 | % | | | | |
Industrial | | | 1,494 | | | | 1,423 | | | | 5.0 | % | | | | | | | 2,930 | | | | 2,819 | | | | 3.9 | % | | | | |
Other Energy Sales | | | 28 | | | | 28 | | | | 0.0 | % | | | | | | | 56 | | | | 56 | | | | 0.0 | % | | | | |
Unbilled Sales | | | 160 | | | | 130 | | | | 23.1 | % | | | | | | | (82 | ) | | | (16 | ) | | | (412.5 | %) | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Regular Electric Sales | | | 5,794 | | | | 5,701 | | | | 1.6 | % | | | 2.6 | % | | | 12,167 | | | | 11,759 | | | | 3.5 | % | | | 2.3 | % |
| | | | | | | | |
Special Sales | | | 30 | | | | 99 | | | | (69.7 | %) | | | | | | | 136 | | | | 219 | | | | (37.9 | %) | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Electric Sales - Duke Energy Ohio | | | 5,824 | | | | 5,800 | | | | 0.4 | % | | | | | | | 12,303 | | | | 11,978 | | | | 2.7 | % | | | | |
| | | | | | | | |
Average Number of Customers | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential | | | 741,069 | | | | 737,683 | | | | 0.5 | % | | | | | | | 742,324 | | | | 737,483 | | | | 0.7 | % | | | | |
General Service | | | 86,497 | | | | 86,233 | | | | 0.3 | % | | | | | | | 86,374 | | | | 86,145 | | | | 0.3 | % | | | | |
Industrial | | | 2,519 | | | | 2,557 | | | | (1.5 | %) | | | | | | | 2,521 | | | | 2,559 | | | | (1.5 | %) | | | | |
Other Energy | | | 3,171 | | | | 2,934 | | | | 8.1 | % | | | | | | | 3,171 | | | | 2,930 | | | | 8.2 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Regular Sales | | | 833,256 | | | | 829,407 | | | | 0.5 | % | | | | | | | 834,390 | | | | 829,117 | | | | 0.6 | % | | | | |
| | | | | | | | |
Special Sales | | | 1 | | | | 1 | | | | 0.0 | % | | | | | | | 1 | | | | 1 | | | | 0.0 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
Total Average Number of Electric Customers - Duke Energy Ohio | | | 833,257 | | | | 829,408 | | | | 0.5 | % | | | | | | | 834,391 | | | | 829,118 | | | | 0.6 | % | | | | |
| | | | | | | | |
Heating and Cooling Degree Days (3) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Actual | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Heating Degree Days | | | 361 | | | | 423 | | | | (14.7 | %) | | | | | | | 3,470 | | | | 3,126 | | | | 11.0 | % | | | | |
Cooling Degree Days | | | 382 | | | | 346 | | | | 10.4 | % | | | | | | | 382 | | | | 346 | | | | 10.4 | % | | | | |
| | | | | | | | |
Variance from Normal | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Heating Degree Days | | | (11.7 | %) | | | (0.7 | %) | | | n/a | | | | | | | | 16.8 | % | | | 3.3 | % | | | n/a | | | | | |
Cooling Degree Days | | | 10.7 | % | | | 3.0 | % | | | n/a | | | | | | | | 9.1 | % | | | 2.4 | % | | | n/a | | | | | |
| (1) | Except as indicated in footnote (2), represents non-weather normalized billed sales, with energy delivered but not yet billed (i.e. unbilled sales) reflected as a single amount and not allocated to the respective retail classes. |
| (2) | Represents weather normal total retail calendar sales (i.e. billed and unbilled sales). |
| (3) | Certain 2013 data has been recast to conform to the 2014 methodology which provides for consistency across all Regulated Utilities’ jurisdictions. |
21
Duke Energy Ohio
Quarterly Highlights
Supplemental Regulated Utilities Gas Information
June 2014
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Six Months Ended | |
| | | June 30 | | | June 30 | |
| | | | | | | | | | | | % Inc. (Dec.) | | | | | | | | | | | | % Inc. (Dec.) | |
| | | | | | | | | % | | | Weather | | | | | | | | | % | | | Weather | |
| | | 2014 | | | 2013 | | | Inc. (Dec.) | | | Normal (2) | | | 2014 | | | 2013 | | | Inc. (Dec.) | | | Normal (2) | |
| | | | | | | | |
MCF Sales (1) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential | | | 5,948,555 | | | | 6,575,647 | | | | (9.5 | %) | | | | | | | 29,534,496 | | | | 26,620,497 | | | | 10.9 | % | | | | |
General Service | | | 3,931,932 | | | | 4,151,037 | | | | (5.3 | %) | | | | | | | 17,624,423 | | | | 15,799,582 | | | | 11.5 | % | | | | |
Industrial | | | 1,508,405 | | | | 1,281,485 | | | | 17.7 | % | | | | | | | 4,321,235 | | | | 3,688,976 | | | | 17.1 | % | | | | |
Other Energy Sales | | | 4,822,263 | | | | 4,733,817 | | | | 1.9 | % | | | | | | | 11,419,293 | | | | 10,888,315 | | | | 4.9 | % | | | | |
Unbilled Sales | | | (2,435,000 | ) | | | (4,003,000 | ) | | | 39.2 | % | | | | | | | (4,902,000 | ) | | | (4,915,000 | ) | | | 0.3 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Gas Sales - Duke Energy Ohio | | | 13,776,155 | | | | 12,738,986 | | | | 8.1 | % | | | 3.1 | % | | | 57,997,447 | | | | 52,082,370 | | | | 11.4 | % | | | 2.3 | % |
| | | | | | | | |
Average Number of Customers | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential | | | 472,847 | | | | 470,301 | | | | 0.5 | % | | | | | | | 474,482 | | | | 470,936 | | | | 0.8 | % | | | | |
General Service | | | 43,330 | | | | 43,300 | | | | 0.1 | % | | | | | | | 44,316 | | | | 44,151 | | | | 0.4 | % | | | | |
Industrial | | | 1,609 | | | | 1,625 | | | | (1.0 | %) | | | | | | | 1,663 | | | | 1,657 | | | | 0.4 | % | | | | |
Other Energy | | | 155 | | | | 165 | | | | (6.1 | %) | | | | | | | 156 | | | | 166 | | | | (6.0 | %) | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Average Number of Gas Customers - Duke Energy Ohio | | | 517,941 | | | | 515,391 | | | | 0.5 | % | | | | | | | 520,617 | | | | 516,910 | | | | 0.7 | % | | | | |
| | | | | | | | |
Heating and Cooling Degree Days (3) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Actual | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Heating Degree Days | | | 361 | | | | 423 | | | | (14.7 | %) | | | | | | | 3,470 | | | | 3,126 | | | | 11.0 | % | | | | |
Cooling Degree Days | | | 382 | | | | 346 | | | | 10.4 | % | | | | | | | 382 | | | | 346 | | | | 10.4 | % | | | | |
| | | | | | | | |
Variance from Normal | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Heating Degree Days | | | (11.7 | %) | | | (0.7 | %) | | | n/a | | | | | | | | 16.8 | % | | | 3.3 | % | | | n/a | | | | | |
Cooling Degree Days | | | 10.7 | % | | | 3.0 | % | | | n/a | | | | | | | | 9.1 | % | | | 2.4 | % | | | n/a | | | | | |
| (1) | Except as indicated in footnote (2), represents non-weather normalized billed sales, with energy delivered but not yet billed (i.e. unbilled sales) reflected as a single amount and not allocated to the respective retail classes. |
| (2) | Represents weather normal total retail calendar sales (i.e. billed and unbilled sales). |
| (3) | Certain 2013 data has been recast to conform to the 2014 methodology which provides for consistency across all Regulated Utilities’ jurisdictions. |
22
Duke Energy Indiana
Quarterly Highlights
Supplemental Regulated Utilities Electric Information
June 2014
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Six Months Ended | |
| | | June 30 | | | June 30 | |
| | | | | | | | | | | | % Inc. (Dec.) | | | | | | | | | | | | % Inc. (Dec.) | |
| | | | | | | | | % | | | Weather | | | | | | | | | % | | | Weather | |
| | | 2014 | | | 2013 | | | Inc. (Dec.) | | | Normal (2) | | | 2014 | | | 2013 | | | Inc. (Dec.) | | | Normal (2) | |
| | | | | | | | |
GWH Sales (1) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential | | | 1,871 | | | | 1,899 | | | | (1.5 | %) | | | | | | | 5,090 | | | | 4,727 | | | | 7.7 | % | | | | |
General Service | | | 2,002 | | | | 2,002 | | | | 0.0 | % | | | | | | | 4,107 | | | | 4,033 | | | | 1.8 | % | | | | |
Industrial | | | 2,701 | | | | 2,578 | | | | 4.8 | % | | | | | | | 5,224 | | | | 5,097 | | | | 2.5 | % | | | | |
Other Energy Sales | | | 14 | | | | 13 | | | | 7.7 | % | | | | | | | 27 | | | | 26 | | | | 3.8 | % | | | | |
Unbilled Sales | | | 76 | | | | 72 | | | | 5.6 | % | | | | | | | (227 | ) | | | (67 | ) | | | (238.8 | %) | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Regular Electric Sales | | | 6,664 | | | | 6,564 | | | | 1.5 | % | | | 1.2 | % | | | 14,221 | | | | 13,816 | | | | 2.9 | % | | | 2.0 | % |
| | | | | | | | |
Special Sales | | | 1,791 | | | | 1,373 | | | | 30.4 | % | | | | | | | 3,108 | | | | 2,626 | | | | 18.4 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Electric Sales - Duke Energy Indiana | | | 8,455 | | | | 7,937 | | | | 6.5 | % | | | | | | | 17,329 | | | | 16,442 | | | | 5.4 | % | | | | |
| | | | | | | | |
Average Number of Customers | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential | | | 689,977 | | | | 686,314 | | | | 0.5 | % | | | | | | | 692,942 | | | | 688,267 | | | | 0.7 | % | | | | |
General Service | | | 100,237 | | | | 100,228 | | | | 0.0 | % | | | | | | | 100,258 | | | | 100,168 | | | | 0.1 | % | | | | |
Industrial | | | 2,702 | | | | 2,719 | | | | (0.6 | %) | | | | | | | 2,719 | | | | 2,720 | | | | (0.0 | %) | | | | |
Other Energy | | | 1,506 | | | | 1,468 | | | | 2.6 | % | | | | | | | 1,501 | | | | 1,461 | | | | 2.7 | % | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Regular Sales | | | 794,422 | | | | 790,729 | | | | 0.5 | % | | | | | | | 797,420 | | | | 792,616 | | | | 0.6 | % | | | | |
| | | | | | | | |
Special Sales | | | 6 | | | | 6 | | | | 0.0 | % | | | | | | | 6 | | | | 7 | | | | (14.3 | %) | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
Total Average Number of Electric Customers - Duke Energy Indiana | | | 794,428 | | | | 790,735 | | | | 0.5 | % | | | | | | | 797,426 | | | | 792,623 | | | | 0.6 | % | | | | |
| | | | | | | | |
Heating and Cooling Degree Days (3) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Actual | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Heating Degree Days | | | 525 | | | | 499 | | | | 5.2 | % | | | | | | | 4,042 | | | | 3,465 | | | | 16.7 | % | | | | |
Cooling Degree Days | | | 318 | | | | 329 | | | | (3.3 | %) | | | | | | | 318 | | | | 329 | | | | (3.3 | %) | | | | |
| | | | | | | | |
Variance from Normal | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Heating Degree Days | | | 18.5 | % | | | 7.8 | % | | | n/a | | | | | | | | 27.5 | % | | | 7.1 | % | | | n/a | | | | | |
Cooling Degree Days | | | (10.9 | %) | | | -4.4 | % | | | n/a | | | | | | | | (12.2 | %) | | | (4.9 | %) | | | n/a | | | | | |
| (1) | Except as indicated in footnote (2), represents non-weather normalized billed sales, with energy delivered but not yet billed (i.e. unbilled sales) reflected as a single amount and not allocated to the respective retail classes. |
| (2) | Represents weather normal total retail calendar sales (i.e. billed and unbilled sales). |
| (3) | Certain 2013 data has been recast to conform to the 2014 methodology which provides for consistency across all Regulated Utilities’ jurisdictions. |
23
DUKE ENERGY CORPORATION
ADJUSTED TO REPORTED EARNINGS RECONCILIATION
Three Months Ended June 30, 2014
(Dollars in millions, except per-share amounts)
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | Special
Items | | | | | | | | | | | | | |
| | | Adjusted
Earnings | | | Costs to
Achieve,
Progress
Merger | | | Economic
Hedges
(Mark- to-
Market) * | | | Discontinued
Operations | | | Total
Adjustments | | | Reported
Earnings | |
SEGMENT INCOME | | | | | | | | | | | | | | | | | | | | | | | | |
Regulated Utilities | | $ | 689 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 689 | |
International Energy | | | 146 | | | | — | | | | — | | | | — | | | | — | | | | 146 | |
Commercial Power | | | 16 | | | | — | | | | (136 | )B | | | — | | | | (136 | ) | | | (120 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Reportable Segment Income | | | 851 | | | | — | | | | (136 | ) | | | — | | | | (136 | ) | | | 715 | |
Other | | | (65 | ) | | | (38 | )A | | | — | | | | — | | | | (38 | ) | | | (103 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Reportable Segment Income and Other Net Expense | | | 786 | | | | (38 | ) | | | (136 | ) | | | — | | | | (174 | ) | | | 612 | |
Discontinued Operations | | | — | | | | — | | | | — | | | | (3 | )C | | | (3 | ) | | | (3 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net Income (Loss) Attributable to Duke Energy Corporation | | $ | 786 | | | $ | (38 | ) | | $ | (136 | ) | | $ | (3 | ) | | $ | (177 | ) | | $ | 609 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, BASIC | | $ | 1.11 | | | $ | (0.06 | ) | | $ | (0.19 | ) | | $ | — | | | $ | (0.25 | ) | | $ | 0.86 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, DILUTED | | $ | 1.11 | | | $ | (0.06 | ) | | $ | (0.19 | ) | | $ | — | | | $ | (0.25 | ) | | $ | 0.86 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| A - | Net of $23 million tax benefit. $61 million recorded in Operating Expenses on the Condensed Consolidated Statements of Operations. |
| B - | Net of $77 million tax benefit. $185 million loss recorded within Nonregulated electric, natural gas, and other (Operating Revenues) and $28 million loss 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. |
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. |
24
DUKE ENERGY CORPORATION
ADJUSTED TO REPORTED EARNINGS RECONCILIATION
Six Months Ended June 30, 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 | | $ | 1,426 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 1,426 | |
International Energy | | | 276 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 276 | |
Commercial Power | | | 26 | | | | — | | | | (867 | )C | | | (158 | )B | | | — | | | | (1,025 | ) | | | (999 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Reportable Segment Income | | | 1,728 | | | | — | | | | (867 | ) | | | (158 | ) | | | — | | | | (1,025 | ) | | | 703 | |
Other | | | (113 | ) | | | (72 | )A | | | — | | | | — | | | | — | | | | (72 | ) | | | (185 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Reportable Segment Income and Other Net Expense | | | 1,615 | | | | (72 | ) | | | (867 | ) | | | (158 | ) | | | — | | | | (1,097 | ) | | | 518 | |
Discontinued Operations | | | — | | | | — | | | | — | | | | — | | | | (6 | )D | | | (6 | ) | | | (6 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net Income (Loss) Attributable to Duke Energy Corporation | | $ | 1,615 | | | $ | (72 | ) | | $ | (867 | ) | | $ | (158 | ) | | $ | (6 | ) | | $ | (1,103 | ) | | $ | 512 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, BASIC | | $ | 2.28 | | | $ | (0.10 | ) | | $ | (1.23 | ) | | $ | (0.22 | ) | | $ | (0.01 | ) | | $ | (1.56 | ) | | $ | 0.72 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, DILUTED | | $ | 2.28 | | | $ | (0.10 | ) | | $ | (1.23 | ) | | $ | (0.22 | ) | | $ | (0.01 | ) | | $ | (1.56 | ) | | $ | 0.72 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| A - | Net of $44 million tax benefit. $1 million recorded as a decrease in Operating Revenues, $114 million recorded within Operating Expenses and $1 million recorded within Interest Expense on the Condensed Consolidated Statements of Operations. |
| B - | Net of $89 million tax benefit. $309 million loss recorded within Nonregulated electric, natural gas, and other (Operating Revenues) and $62 million gain recorded within Fuel used in electric generation and purchased power-nonregulated (Operating Expenses) on the Condensed Consolidated Statements of Operations. |
| C - | Net of $514 million tax benefit. Recorded in Impairment charges (Operating Expenses) on the Condensed Consolidated Statement of Operations. |
| D - | Recorded in Income (loss) From Discontinued Operations, net of tax on the Condensed Consolidated Statements of Operations. |
Weighted Average Shares (reported and adjusted) - in millions
| * | 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. |
25
DUKE ENERGY CORPORATION
ADJUSTED TO REPORTED EARNINGS RECONCILIATION
Three Months Ended June 30, 2013
(Dollars in millions, except per-share amounts)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | Special Items | | | | | | | | | | | | | |
| | | Adjusted
Earnings | | | Costs to
Achieve,
Progress
Merger | | | Nuclear
Development
Charges | | | Litigation
Reserve | | | Crystal River
Unit 3
Impairment | | | Economic
Hedges
(Mark-to-
Market) * | | | Discontinued
Operations | | | Total
Adjustments | | | Reported
Earnings | |
SEGMENT INCOME | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Regulated Utilities | | $ | 590 | | | $ | — | | | $ | (57 | )D | | $ | — | | | $ | (180 | )F | | $ | — | | | $ | — | | | $ | (237 | ) | | $ | 353 | |
International Energy | | | 87 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 87 | |
Commercial Power | | | (3 | ) | | | — | | | | — | | | | — | | | | — | | | | 44 | B | | | — | | | | 44 | | | | 41 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Reportable Segment Income | | | 674 | | | | — | | | | (57 | ) | | | — | | | | (180 | ) | | | 44 | | | | — | | | | (193 | ) | | | 481 | |
Other | | | (57 | ) | | | (51 | )A | | | — | | | | (31 | )E | | | — | | | | — | | | | — | | | | (82 | ) | | | (139 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Reportable Segment Income and Other Net Expense | | | 617 | | | | (51 | ) | | | (57 | ) | | | (31 | ) | | | (180 | ) | | | 44 | | | | — | | | | (275 | ) | | | 342 | |
Discontinued Operations | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (3 | )C | | | (3 | ) | | | (3 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net Income (Loss) Attributable to Duke Energy Corporation | | $ | 617 | | | $ | (51 | ) | | $ | (57 | ) | | $ | (31 | ) | | $ | (180 | ) | | $ | 44 | | | $ | (3 | ) | | $ | (278 | ) | | $ | 339 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, BASIC | | $ | 0.87 | | | $ | (0.07 | ) | | $ | (0.08 | ) | | $ | (0.04 | ) | | $ | (0.26 | ) | | $ | 0.06 | | | $ | — | | | $ | (0.39 | ) | | $ | 0.48 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, DILUTED | | $ | 0.87 | | | $ | (0.07 | ) | | $ | (0.08 | ) | | $ | (0.04 | ) | | $ | (0.26 | ) | | $ | 0.06 | | | $ | — | | | $ | (0.39 | ) | | $ | 0.48 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| A - | Net of $31 million tax benefit. $11 million recorded as an increase in Operating Revenues, $92 million recorded within Operating Expenses and $1 million recorded within Interest Expense on the Condensed Consolidated Statements of Operations. |
| B - | Net of $29 million tax expense. $79 million gain recorded within Nonregulated electric, natural gas, and other (Operating Revenues) and $10 million loss 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 $30 million tax benefit. Recorded in Impairment charges (Operating Expenses) on the Condensed Consolidated Statement of Operations. |
| E - | Net of $19 million tax benefit. Recorded in Operations, maintenance and other (Operating Expenses) on the Condensed Consolidated Statement of Operations. |
| F - | Net of $115 million tax benefit. Recorded in Impairment charges (Operating Expenses) on the Condensed Consolidated Statement of Operations. |
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. |
26
DUKE ENERGY CORPORATION
ADJUSTED TO REPORTED EARNINGS RECONCILIATION
Six Months Ended June 30, 2013
(Dollars in millions, except per-share amounts)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | Special Items | | | | | | | | | | | | | |
| | | Adjusted
Earnings | | | Costs to
Achieve,
Progress
Merger | | | Nuclear
Development
Charges | | | Litigation
Reserve | | | Crystal River
Unit 3
Impairment | | | Economic
Hedges
(Mark-to-
Market) * | | | Discontinued
Operations | | | Total
Adjustments | | | Reported
Earnings | |
SEGMENT INCOME | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Regulated Utilities | | $ | 1,246 | | | $ | — | | | $ | (57 | )D | | $ | — | | | $ | (180 | )F | | $ | — | | | $ | — | | | $ | (237 | ) | | $ | 1,009 | |
International Energy | | | 184 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 184 | |
Commercial Power | | | 3 | | | | — | | | | — | | | | — | | | | — | | | | (4 | )B | | | — | | | | (4 | ) | | | (1 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Reportable Segment Income | | | 1,433 | | | | — | | | | (57 | ) | | | — | | | | (180 | ) | | | (4 | ) | | | — | | | | (241 | ) | | | 1,192 | |
Other | | | (100 | ) | | | (85 | )A | | | — | | | | (31 | )E | | | — | | | | — | | | | — | | | | (116 | ) | | | (216 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Reportable Segment Income and Other Net Expense | | | 1,333 | | | | (85 | ) | | | (57 | ) | | | (31 | ) | | | (180 | ) | | | (4 | ) | | | — | | | | (357 | ) | | | 976 | |
Discontinued Operations | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (3 | )C | | | (3 | ) | | | (3 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net Income (Loss) Attributable to Duke Energy Corporation | | $ | 1,333 | | | $ | (85 | ) | | $ | (57 | ) | | $ | (31 | ) | | $ | (180 | ) | | $ | (4 | ) | | $ | (3 | ) | | $ | (360 | ) | | $ | 973 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, BASIC | | $ | 1.89 | | | $ | (0.13 | ) | | $ | (0.08 | ) | | $ | (0.04 | ) | | $ | (0.26 | ) | | $ | (0.01 | ) | | $ | — | | | $ | (0.52 | ) | | $ | 1.37 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, DILUTED | | $ | 1.89 | | | $ | (0.13 | ) | | $ | (0.08 | ) | | $ | (0.04 | ) | | $ | (0.26 | ) | | $ | (0.01 | ) | | $ | — | | | $ | (0.52 | ) | | $ | 1.37 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| A - | Net of $52 million tax benefit. $26 million recorded as an increase in Operating Revenues, $162 million recorded within Operating Expenses and $1 million recorded within Interest Expense on the Condensed Consolidated Statements of Operations. |
| B - | Net of $2 million tax benefit. $11 million gain recorded within Nonregulated electric, natural gas, and other (Operating Revenues) and $17 million loss 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 $30 million tax benefit. Recorded in Impairment charges (Operating Expenses) on the Condensed Consolidated Statement of Operations. |
| E - | Net of $19 million tax benefit. Recorded in Operations, maintenance and other (Operating Expenses) on the Condensed Consolidated Statement of Operations. |
| F - | Net of $115 million tax benefit. Recorded in Impairment charges (Operating Expenses) on the Condensed Consolidated Statement of Operations. |
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. |
27
