| News Release |  | |
Media Contact: Catherine Butler
24-Hour: 800.559.3853
Analysts: Mike Callahan
Office: 704.382.0459
Aug. 3, 2017
Duke Energy reports second quarter 2017 financial results
| ▪ | Second quarter 2017 GAAP reported diluted earnings per share (EPS) was $0.98 compared to $0.74 in 2016; adjusted diluted EPS was $1.01 for the second quarter of 2017 compared to $1.07 for the second quarter of 2016 |
| ▪ | Company continues to execute on growth strategy, including advancing public policy solutions and enabling timely investment recovery |
| ▪ | Company remains on track to achieve its 2017 adjusted diluted earnings guidance range of $4.50 to $4.70 per share |
CHARLOTTE, N.C. - Duke Energy today announced second quarter 2017 reported diluted EPS, prepared in accordance with Generally Accepted Accounting Principles (GAAP) of $0.98, compared to $0.74 for the second quarter of 2016. Duke Energy's second quarter 2017 adjusted diluted EPS was $1.01, compared to $1.07 for the second quarter of 2016.
Adjusted diluted EPS excludes the impact of certain items included in GAAP reported diluted EPS. Amounts excluded from adjusted diluted EPS are primarily costs to achieve the Piedmont Natural Gas merger and a prior year impairment charge related to International Energy, which was sold in December 2016.
Adjusted diluted EPS for the second quarter of 2017 was lower than the prior year, primarily due to the absence of earnings from International Energy, less favorable weather, and higher income tax expense primarily due to a prior year favorable tax resolution. Partially offsetting these drivers were higher retail revenues from increased pricing and riders and stronger retail volumes at Electric Utilities and Infrastructure.
Based upon the results through the second quarter, the company remains on track to achieve its 2017 adjusted diluted earnings guidance range of $4.50 to $4.70 per share.
“We continue to execute our company’s strategy to build a smarter energy future as we invest in infrastructure our customers value and deliver sustainable growth,” said Lynn Good, Duke Energy chairman, president and CEO. “Our second quarter results reflect strong execution across our businesses, and we remain on track to deliver within our full-year guidance range for 2017.
“Advancing public policy solutions to enable our strategy remains a priority. Late last month, House Bill 589, Competitive Energy Solutions for North Carolina, became law. The act outlines a thoughtful, market-driven approach to renewable energy. It is consistent with our
Duke Energy News Release 2
commitment to deliver reliable, affordable and cleaner energy to our customers and provide timely investment recovery for our investors.”
Business segment results
In addition to the following summary of second quarter 2017 business segment performance, comprehensive tables with detailed earnings per share drivers for the quarter and the year-to-date, compared to prior year, are provided on pages 18 and 19.
The discussion below of the second quarter results includes both GAAP segment income and adjusted segment income, which is a non-GAAP financial measure. The tables on pages 8 through 11 present a reconciliation of GAAP reported results to adjusted results.
Due to the Piedmont acquisition and the sale of International Energy in the fourth quarter of 2016, Duke Energy's segment structure has been realigned to include the following segments: Electric Utilities and Infrastructure, Gas Utilities and Infrastructure and Commercial Renewables. The remainder of Duke Energy’s operations is presented as Other. Other now includes the results of National Methanol Company (NMC), previously included in the International Energy segment. Prior periods have been recast to conform to the current segment structure.
Electric Utilities and Infrastructure
On a reported and adjusted basis, Electric Utilities and Infrastructure recognized second quarter 2017 segment income of $729 million, compared to $704 million in the second quarter of 2016, an increase of $0.03 per share, excluding share dilution of $0.01 per share.
Higher quarterly results at Electric Utilities and Infrastructure were primarily driven by increased pricing and riders (+$0.05 per share) and higher retail volumes (+$0.03 per share). These favorable drivers were partially offset by less favorable weather (-$0.05 per share).
Gas Utilities and Infrastructure
On a reported and adjusted basis, Gas Utilities and Infrastructure recognized second quarter segment income of $27 million, compared to $16 million in the second quarter of 2016, an increase of $0.02 per share.
Higher quarterly results at Gas Utilities and Infrastructure were driven by higher earnings from midstream pipeline investments (+$0.02 per share).
Commercial Renewables
On a reported and adjusted basis, Commercial Renewables recognized second quarter 2017 segment income of $26 million, compared to $11 million in the second quarter of 2016, an increase of $0.02 per share.
Higher earnings from improved wind resources and new projects brought on-line in late 2016 (+$0.03 per share) were partially offset by lower solar investment tax credits (ITCs) in the current year (-$0.01 per share).
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Other
Other primarily includes corporate interest expense not allocated to the business units, results from Duke Energy’s captive insurance company, and other investments including NMC, an equity method investment.
On a reported basis, Other recognized second quarter 2017 net expense of $94 million, compared to net expense of $107 million in the second quarter of 2016. In addition to the drivers outlined below, quarterly results were impacted by lower costs to achieve the Piedmont merger. These charges were treated as special items and therefore excluded from adjusted earnings.
On an adjusted basis, Other recognized second quarter 2017 adjusted net expense of $75 million, compared to adjusted net expense of $23 million in the second quarter of 2016, a decrease of $0.07 per share. Lower quarterly results at Other were driven by higher income tax expense primarily due to a prior year favorable tax resolution (-$0.05 per share), and higher interest expense at the holding company, primarily resulting from the Piedmont Natural Gas acquisition financing (‑$0.03 per share).
Duke Energy's consolidated reported effective tax rate for the second quarter of 2017 was 32.1 percent, compared to 28.8 percent in the second quarter of 2016. The consolidated adjusted effective tax rate for second quarter 2017 was 32.3 percent, compared to 31.4 percent in 2016. Adjusted effective tax rate is a non-GAAP financial measure. The tables on page 12 present a reconciliation of the GAAP reported effective tax rate to the adjusted effective tax rate.
Discontinued Operations
Duke Energy's second quarter 2016 Loss from Discontinued Operations included an impairment charge related to certain assets in Central America, partially offset by the operating results of the International Disposal Group. The operating results of $31 million were included in adjusted earnings.
Earnings conference call for analysts
An earnings conference call for analysts is scheduled from 10 to 11 a.m. ET today to discuss the second quarter 2017 financial results and other business and financial updates.
The conference call will be hosted by Lynn Good, chairman, president and chief executive officer, and Steve Young, executive vice president and chief financial officer.
The call can be accessed via the investors' section (http://www.Duke-Energy.com/investors/) of Duke Energy’s website or by dialing 877-856-1958 in the United States or 719-325-4776 outside the United States. The confirmation code is 7921662. 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. 13, 2017, by calling 888-203-1112 in the United States or 719-457-0820 outside the United States and using the code 7921662. An audio replay and transcript will also be available by accessing the investors' section of the company’s website.
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Special Items and Non-GAAP Reconciliation
The following table presents a reconciliation of GAAP reported to adjusted diluted EPS for second quarter 2017 and 2016 financial results:
| (In millions, except per-share amounts) | After-Tax Amount | 2Q 2017 EPS | 2Q 2016 EPS | ||||||
| Diluted EPS, as reported | $ | 0.98 | $ | 0.74 | |||||
| Adjustments to reported EPS: | |||||||||
| Second Quarter 2017 | |||||||||
| Costs to achieve Piedmont merger | $ | 19 | 0.03 | ||||||
| Second Quarter 2016 | |||||||||
| Costs to achieve mergers | 69 | 0.10 | |||||||
| Cost savings initiatives | 15 | 0.02 | |||||||
Discontinued operations(a) | 146 | 0.21 | |||||||
| Total adjustments | $ | 0.03 | $ | 0.33 | |||||
| Diluted EPS, adjusted | $ | 1.01 | $ | 1.07 | |||||
| (a) | Includes an after-tax impairment charge of $145 million related to certain assets in Central America that were sold in 2016. Represents GAAP reported Loss from Discontinued Operations less the International Disposal Group operating results, which are included in adjusted earnings. |
Non-GAAP financial measures
Management evaluates financial performance in part based on non-GAAP financial measures, including adjusted earnings and adjusted diluted EPS.
Adjusted earnings and adjusted diluted EPS represent income from continuing operations attributable to Duke Energy, adjusted for the dollar and per share impact of special items. As discussed below, special items represent certain charges and credits which management believes are not indicative of Duke Energy's ongoing performance. Management believes the presentation of adjusted earnings and adjusted diluted EPS provides useful information to investors, as it provides them with an additional relevant comparison of Duke Energy’s performance across periods. Management uses these non-GAAP financial measures for planning and forecasting and for reporting financial results to the Duke Energy Board of Directors, employees, stockholders, analysts and investors. Adjusted diluted EPS is also used as a basis for employee incentive bonuses. The most directly comparable GAAP measures for adjusted earnings and adjusted diluted EPS are Net Income Attributable to Duke Energy Corporation (GAAP Reported Earnings) and Diluted EPS Attributable to Duke Energy Corporation common stockholders (GAAP Reported EPS), respectively.
Special items included in the periods presented include the following items which management believes do not reflect ongoing costs:
| • | Costs to achieve mergers represent charges that result from strategic acquisitions. |
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| • | Cost savings initiatives represent severance charges related to company-wide initiatives, excluding merger integration, to standardize processes and systems, leverage technology and workforce optimization. |
Adjusted earnings also include operating results of the International Disposal Group, which have been classified as discontinued operations. Management believes inclusion of the operating results of the Disposal Group within adjusted earnings and adjusted diluted EPS results in a better reflection of Duke Energy's financial performance during the period.
Due to the forward-looking nature of any forecasted adjusted earnings guidance, information to reconcile this non-GAAP financial measure to the most directly comparable GAAP financial measure is not available at this time, as management is unable to project all special items for future periods (such as legal settlements, the impact of regulatory orders, or asset impairments).
Management evaluates segment performance based on segment income and other net expense. Segment income is defined as income from continuing operations attributable to Duke Energy. Segment income includes intercompany revenues and expenses that are eliminated in the Consolidated Financial Statements. Management also uses adjusted segment income as a measure of historical and anticipated future segment performance. Adjusted segment income is a non-GAAP financial measure, as it is based upon segment income adjusted for special items, which are discussed above. Management believes the presentation of adjusted segment income provides useful information to investors, as it provides them with an additional relevant comparison of a segment’s performance across periods. The most directly comparable GAAP measure for adjusted segment income or adjusted other net expense is segment income and other net expense.
Due to the forward-looking nature of any forecasted adjusted segment income or adjusted other net expense and any related growth rates for future periods, information to reconcile these non-GAAP financial measures to the most directly comparable GAAP financial measures is not available at this time, as the company is unable to forecast all special items, as discussed above.
Duke Energy’s adjusted earnings, adjusted diluted EPS, and adjusted segment income may not be comparable to similarly titled measures of another company because other companies may not calculate the measures in the same manner.
Headquartered in Charlotte, N.C., Duke Energy is one of the largest energy holding companies in the United States. Its Electric Utilities and Infrastructure business unit serves approximately 7.5 million customers located in six states in the Southeast and Midwest. The company’s Gas Utilities and Infrastructure business unit distributes natural gas to approximately 1.6 million customers in the Carolinas, Ohio, Kentucky and Tennessee. Its Commercial Renewables business unit operates a growing renewable energy portfolio across the United States.
Duke Energy is a Fortune 125 company traded on the New York Stock Exchange under the symbol DUK. More information about the company is available at duke-energy.com.
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Forward-Looking Information
This document includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are based on management’s beliefs and assumptions and can often be identified by terms and phrases that include "anticipate," "believe," "intend," "estimate," "expect," "continue," "should," "could," "may," "plan," "project," "predict," "will," "potential," "forecast," "target," "guidance," "outlook" or other similar terminology. Various factors may cause actual results to be materially different than the suggested outcomes within forward-looking statements; accordingly, there is no assurance that such results will be realized. These factors include, but are not limited to: state, federal and foreign legislative and regulatory initiatives, including costs of compliance with existing and future environmental requirements, including those related to climate change, as well as rulings that affect cost and investment recovery or have an impact on rate structures or market prices; the extent and timing of costs and liabilities to comply with federal and state laws, regulations and legal requirements related to coal ash remediation, including amounts for required closure of certain ash impoundments, are uncertain and difficult to estimate; the ability to recover eligible costs, including amounts associated with coal ash impoundment retirement obligations and costs related to significant weather events, and to earn an adequate return on investment through rate case proceedings and the regulatory process; the costs of decommissioning Crystal River Unit 3 and other nuclear facilities could prove to be more extensive than amounts estimated and all costs may not be fully recoverable through the regulatory process; 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 sustained downturns of the economy and the economic health of our service territories or variations in customer usage patterns, including energy efficiency efforts and use of alternative energy sources, such as self-generation and distributed generation technologies; federal and state regulations, laws and other efforts designed to promote and expand the use of energy efficiency measures and distributed generation technologies, such as private solar and battery storage, in Duke Energy's service territories could result in customers leaving the electric distribution system, excess generation resources as well as stranded costs; advancements in technology; additional competition in electric and gas markets and continued industry consolidation; the influence of weather and other natural phenomena on operations, including the economic, operational and other effects of severe storms, hurricanes, droughts, earthquakes and tornadoes, including extreme weather associated with climate change; the ability to successfully operate electric generating facilities and deliver electricity to customers including direct or indirect effects to the company resulting from an incident that affects the U.S. electric grid or generating resources; the ability to complete necessary or desirable pipeline expansion or infrastructure projects in our natural gas business; operational
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interruptions to our gas distribution and transmission activities; the availability of adequate interstate pipeline transportation capacity and natural gas supply; the impact on facilities and business from a terrorist attack, cybersecurity threats, data security breaches, and other catastrophic events such as fires, explosions, pandemic health events or other similar occurrences; the inherent risks associated with the operation and potential construction of nuclear facilities, including environmental, health, safety, regulatory and financial risks, including the financial stability of third party service providers; the timing and extent of changes in commodity prices and interest rates and the ability to recover such costs through the regulatory process, where appropriate, and their impact on liquidity positions and the value of underlying assets; the results of financing efforts, including the ability to obtain financing on favorable terms, which can be affected by various factors, including credit ratings, interest rate fluctuations and general economic conditions; the credit ratings may be different from what the company and its subsidiaries expect; declines in the market prices of equity and fixed income securities and resultant cash funding requirements for defined benefit pension plans, other post-retirement benefit plans, and nuclear decommissioning trust funds; construction and development risks associated with the completion of Duke Energy and its subsidiaries’ capital investment projects, including risks related to financing, obtaining and complying with terms of permits, meeting construction budgets and schedules, and satisfying operating and environmental performance standards, as well as the ability to recover costs from customers in a timely manner or at all; changes in rules for regional transmission organizations, including changes in rate designs and new and evolving capacity markets, and risks related to obligations created by the default of other participants; the ability to control operation and maintenance costs; the level of creditworthiness of counterparties to transactions; employee workforce factors, including the potential inability to attract and retain key personnel; the ability of subsidiaries to pay dividends or distributions to Duke Energy Corporation holding company (the Parent); the performance of projects undertaken by our nonregulated businesses and the success of efforts to invest in and develop new opportunities; the effect of accounting pronouncements issued periodically by accounting standard-setting bodies; substantial revision to the U.S. tax code, such as changes to the corporate tax rate or a material change in the deductibility of interest; the impact of potential goodwill impairments; the ability to successfully complete future merger, acquisition or divestiture plans; the ability to successfully integrate the natural gas businesses following the acquisition of Piedmont Natural Gas Company, Inc. and realize anticipated benefits; and the ability to implement our business strategy.
Additional risks and uncertainties are identified and discussed in Duke Energy’s and its subsidiaries’ reports filed with the SEC and available at the SEC’s website at www.sec.gov. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than described. Forward-looking statements speak only as of the date they are made; Duke Energy expressly disclaims an obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
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DUKE ENERGY CORPORATION
REPORTED TO ADJUSTED EARNINGS RECONCILIATION
Three Months Ended June 30, 2017
(Dollars in millions, except per-share amounts)
| Special Item | ||||||||||||||||||||
| Reported Earnings | Costs to Achieve Piedmont Merger | Discontinued Operations | Total Adjustments | Adjusted Earnings | ||||||||||||||||
| SEGMENT INCOME | ||||||||||||||||||||
| Electric Utilities and Infrastructure | $ | 729 | $ | — | $ | — | $ | — | $ | 729 | ||||||||||
| Gas Utilities and Infrastructure | 27 | — | — | — | 27 | |||||||||||||||
| Commercial Renewables | 26 | — | — | — | 26 | |||||||||||||||
| Total Reportable Segment Income | 782 | — | — | — | 782 | |||||||||||||||
| Other | (94 | ) | 19 | A | — | 19 | (75 | ) | ||||||||||||
| Discontinued Operations | (2 | ) | — | 2 | B | 2 | — | |||||||||||||
| Net Income Attributable to Duke Energy Corporation | $ | 686 | $ | 19 | $ | 2 | $ | 21 | $ | 707 | ||||||||||
| EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, DILUTED | $ | 0.98 | $ | 0.03 | $ | — | $ | 0.03 | $ | 1.01 | ||||||||||
A - Net of $11 million tax benefit. $30 million recorded within Operating Expenses on the Condensed Consolidated Statements of Operations.
B - Recorded in (Loss) Income from Discontinued Operations, net of tax on the Condensed Consolidated Statements of Operations.
Weighted Average Shares, Diluted (reported and adjusted) - 700 million
8
DUKE ENERGY CORPORATION
REPORTED TO ADJUSTED EARNINGS RECONCILIATION
Six Months Ended June 30, 2017
(Dollars in millions, except per-share amounts)
| Special Item | ||||||||||||||||||||
| Reported Earnings | Costs to Achieve Piedmont Merger | Discontinued Operations | Total Adjustments | Adjusted Earnings | ||||||||||||||||
| SEGMENT INCOME | ||||||||||||||||||||
| Electric Utilities and Infrastructure | $ | 1,364 | $ | — | $ | — | $ | — | $ | 1,364 | ||||||||||
| Gas Utilities and Infrastructure | 160 | — | — | — | 160 | |||||||||||||||
| Commercial Renewables | 51 | — | — | — | 51 | |||||||||||||||
| Total Reportable Segment Income | 1,575 | — | — | — | 1,575 | |||||||||||||||
| Other | (171 | ) | 29 | A | — | 29 | (142 | ) | ||||||||||||
| Discontinued Operations | (2 | ) | — | 2 | B | 2 | — | |||||||||||||
| Net Income Attributable to Duke Energy Corporation | $ | 1,402 | $ | 29 | $ | 2 | $ | 31 | $ | 1,433 | ||||||||||
| EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, DILUTED | $ | 2.00 | $ | 0.05 | $ | — | $ | 0.05 | $ | 2.05 | ||||||||||
A - Net of $17 million tax benefit. $45 million recorded within Operating Expenses and $1 million recorded within Interest Expense on the Condensed Consolidated Statements of Operations.
B - Recorded in (Loss) Income from Discontinued Operations, net of tax on the Condensed Consolidated Statements of Operations.
Weighted Average Shares, Diluted (reported and adjusted) - 700 million
9
DUKE ENERGY CORPORATION
REPORTED TO ADJUSTED EARNINGS RECONCILIATION
Three Months Ended June 30, 2016
(Dollars in millions, except per-share amounts)
| Special Items | |||||||||||||||||||||||||||
| Reported Earnings | Costs to Achieve Mergers | Cost Savings Initiatives | International Energy Operations | Discontinued Operations | Total Adjustments | Adjusted Earnings | |||||||||||||||||||||
| SEGMENT INCOME | |||||||||||||||||||||||||||
| Electric Utilities and Infrastructure | $ | 704 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 704 | |||||||||||||
| Gas Utilities and Infrastructure | 16 | — | — | — | — | — | 16 | ||||||||||||||||||||
| Commercial Renewables | 11 | — | — | — | — | — | 11 | ||||||||||||||||||||
| Total Reportable Segment Income | 731 | — | — | — | — | — | 731 | ||||||||||||||||||||
| International Energy | — | — | — | 31 | C | — | 31 | 31 | |||||||||||||||||||
| Other | (107 | ) | 69 | A | 15 | B | — | — | 84 | (23 | ) | ||||||||||||||||
| Discontinued Operations | (115 | ) | — | — | (31 | ) | C | 146 | D | 115 | — | ||||||||||||||||
| Net Income Attributable to Duke Energy Corporation | $ | 509 | $ | 69 | $ | 15 | $ | — | $ | 146 | $ | 230 | $ | 739 | |||||||||||||
| EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, DILUTED | $ | 0.74 | $ | 0.10 | $ | 0.02 | $ | — | $ | 0.21 | $ | 0.33 | $ | 1.07 | |||||||||||||
A - Net of $42 million tax benefit. Includes $28 million recorded within Operating Expenses and $83 million recorded within Interest Expense on the Condensed Consolidated Statements of Operations. The interest expense primarily relates to losses on forward-starting interest rate swaps associated with the Piedmont acquisition financing.
B - Net of $9 million tax benefit. Consists of severance costs recorded within Operation, maintenance and other on the Condensed Consolidated Statements of Operations.
C - Net of $35 million tax expense. Operating results of the International Disposal Group, which exclude the impairment described below, recorded within Income from Discontinued Operations, net of tax on the Condensed Consolidated Statements of Operations.
D - Recorded in (Loss) Income from Discontinued Operations, net of tax on the Condensed Consolidated Statements of Operations. Includes an impairment charge related to certain assets in Central America.
Weighted Average Shares Outstanding, Diluted (reported and adjusted) - 690 million
10
DUKE ENERGY CORPORATION
REPORTED TO ADJUSTED EARNINGS RECONCILIATION
Six Months Ended June 30, 2016
(Dollars in millions, except per-share amounts)
| Special Items | |||||||||||||||||||||||||||
| Reported Earnings | Costs to Achieve Mergers | Cost Savings Initiatives | International Energy Operations | Discontinued Operations | Total Adjustments | Adjusted Earnings | |||||||||||||||||||||
| SEGMENT INCOME | |||||||||||||||||||||||||||
| Electric Utilities and Infrastructure | $ | 1,368 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 1,368 | |||||||||||||
| Gas Utilities and Infrastructure | 48 | — | — | — | — | — | 48 | ||||||||||||||||||||
| Commercial Renewables | 37 | — | — | — | — | — | 37 | ||||||||||||||||||||
| Total Reportable Segment Income | 1,453 | — | — | — | — | — | 1,453 | ||||||||||||||||||||
| International Energy | — | — | — | 148 | C | — | 148 | 148 | |||||||||||||||||||
| Other | (255 | ) | 143 | A | 27 | B | — | — | 170 | (85 | ) | ||||||||||||||||
| Discontinued Operations | 5 | — | — | (148 | ) | C | 143 | D | (5 | ) | — | ||||||||||||||||
| Net Income Attributable to Duke Energy Corporation | $ | 1,203 | $ | 143 | $ | 27 | $ | — | $ | 143 | $ | 313 | $ | 1,516 | |||||||||||||
| EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, DILUTED | $ | 1.74 | $ | 0.21 | $ | 0.04 | $ | — | $ | 0.21 | $ | 0.46 | $ | 2.20 | |||||||||||||
A - Net of $88 million tax benefit. Includes $1 million recorded within Operating Revenues, $47 million recorded within Operating Expenses and $183 million recorded within Interest Expense on the Condensed Consolidated Statements of Operations. The interest expense primarily relates to losses on forward-starting interest rate swaps associated with the Piedmont acquisition financing.
B - Net of $17 million tax benefit. Consists of severance costs recorded within Operation, maintenance and other on the Condensed Consolidated Statements of Operations.
C - Includes $4 million tax benefit. Operating results of the International Disposal Group, which exclude the impairment described below, recorded within Income from Discontinued Operations, net of tax on the Condensed Consolidated Statements of Operations.
D - Recorded in (Loss) Income from Discontinued Operations, net of tax on the Condensed Consolidated Statements of Operations. Includes an impairment charge related to certain assets in Central America.
Weighted Average Shares Outstanding, Diluted (reported and adjusted) - 689 million
11
DUKE ENERGY CORPORATION
ADJUSTED EFFECTIVE TAX RECONCILIATION
June 2017
(Dollars in Millions)
| Three Months Ended June 30, 2017 | Six Months Ended June 30, 2017 | ||||||||||||||
| Balance | Effective Tax Rate | Balance | Effective Tax Rate | ||||||||||||
| Reported Income From Continuing Operations Before Income Taxes | $ | 1,018 | $ | 2,079 | |||||||||||
| Costs to Achieve Piedmont Merger | 30 | 46 | |||||||||||||
| Noncontrolling Interests | (3 | ) | (4 | ) | |||||||||||
| Adjusted Pretax Income | $ | 1,045 | $ | 2,121 | |||||||||||
| Reported Income Tax Expense From Continuing Operations | $ | 327 | 32.1 | % | $ | 671 | 32.3 | % | |||||||
| Costs to Achieve Piedmont Merger | 11 | 17 | |||||||||||||
| Adjusted Tax Expense | $ | 338 | 32.3 | % | * | $ | 688 | 32.4 | % | * | |||||
| Three Months Ended June 30, 2016 | Six Months Ended June 30, 2016 | ||||||||||||||
| Balance | Effective Tax Rate | Balance | Effective Tax Rate | ||||||||||||
| Reported Income From Continuing Operations Before Income Taxes | $ | 877 | $ | 1,706 | |||||||||||
| Costs to Achieve Mergers | 111 | 231 | |||||||||||||
| Cost Savings Initiatives | 24 | 44 | |||||||||||||
| International Energy Operations | 66 | 144 | |||||||||||||
| Noncontrolling Interests | — | (3 | ) | ||||||||||||
| Adjusted Pretax Income | $ | 1,078 | $ | 2,122 | |||||||||||
| Reported Income Tax Expense From Continuing Operations | $ | 253 | 28.8 | % | $ | 505 | 29.6 | % | |||||||
| Costs to Achieve Mergers | 42 | 88 | |||||||||||||
| Cost Savings Initiatives | 9 | 17 | |||||||||||||
| International Energy Operations | 35 | (4 | ) | ||||||||||||
| Adjusted Tax Expense | $ | 339 | 31.4 | % | * | $ | 606 | 28.6 | % | * | |||||
| *Adjusted effective tax rate is a non-GAAP financial measure as the rate is calculated using pretax earnings and income tax expense, both adjusted for the impact of special items. The most directly comparable GAAP measure for adjusted effective tax rate is reported effective tax rate, which includes the impact of special items. | |||||||||||||||
12
| June 2017 | |||||||||||||||
| QUARTERLY HIGHLIGHTS | |||||||||||||||
| (Unaudited) | |||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||
| June 30, | June 30, | ||||||||||||||
| (In millions, except per-share amounts and where noted) | 2017 | 2016 | 2017 | 2016 | |||||||||||
| Earnings Per Share - Basic and Diluted | |||||||||||||||
| Income from continuing operations attributable to Duke Energy Corporation common stockholders | |||||||||||||||
| Basic | $ | 0.98 | $ | 0.90 | $ | 2.00 | $ | 1.73 | |||||||
| Diluted | $ | 0.98 | $ | 0.90 | $ | 2.00 | $ | 1.73 | |||||||
| (Loss) Income from discontinued operations attributable to Duke Energy Corporation common stockholders | |||||||||||||||
| Basic | $ | — | $ | (0.16 | ) | $ | — | $ | 0.01 | ||||||
| Diluted | $ | — | $ | (0.16 | ) | $ | — | $ | 0.01 | ||||||
| Net income attributable to Duke Energy Corporation common stockholders | |||||||||||||||
| Basic | $ | 0.98 | $ | 0.74 | $ | 2.00 | $ | 1.74 | |||||||
| Diluted | $ | 0.98 | $ | 0.74 | $ | 2.00 | $ | 1.74 | |||||||
| Weighted average shares outstanding | |||||||||||||||
| Basic | 700 | 689 | 700 | 689 | |||||||||||
| Diluted | 700 | 690 | 700 | 689 | |||||||||||
| INCOME (LOSS) BY BUSINESS SEGMENT | |||||||||||||||
| Electric Utilities and Infrastructure | $ | 729 | $ | 704 | $ | 1,364 | $ | 1,368 | |||||||
Gas Utilities and Infrastructure(a) | 27 | 16 | 160 | 48 | |||||||||||
| Commercial Renewables | 26 | 11 | 51 | 37 | |||||||||||
| Total Reportable Segment Income | 782 | 731 | 1,575 | 1,453 | |||||||||||
Other(b)(c)(d) | (94 | ) | (107 | ) | (171 | ) | (255 | ) | |||||||
(Loss) Income from Discontinued Operations(e) | (2 | ) | (115 | ) | (2 | ) | 5 | ||||||||
| Net Income Attributable to Duke Energy Corporation | $ | 686 | $ | 509 | $ | 1,402 | $ | 1,203 | |||||||
| CAPITALIZATION | |||||||||||||||
| Total Common Equity (%) | 44 | % | 48 | % | |||||||||||
| Total Debt (%) | 56 | % | 52 | % | |||||||||||
| Total Debt | $ | 53,003 | $ | 43,823 | |||||||||||
| Book Value Per Share | $ | 58.99 | $ | 57.98 | |||||||||||
| Actual Shares Outstanding | 700 | 689 | |||||||||||||
| CAPITAL AND INVESTMENT EXPENDITURES | |||||||||||||||
| Electric Utilities and Infrastructure | $ | 1,571 | $ | 1,517 | $ | 3,445 | $ | 2,956 | |||||||
| Gas Utilities and Infrastructure | 265 | 113 | 607 | 168 | |||||||||||
| Commercial Renewables | 10 | 142 | 69 | 309 | |||||||||||
Other(f) | 37 | 53 | 97 | 96 | |||||||||||
| Total Capital and Investment Expenditures | $ | 1,883 | $ | 1,825 | $ | 4,218 | $ | 3,529 | |||||||
| Note: Prior period amounts have been recast to conform to the current segment structure. | |||||||||||||||
| (a) Includes $1 million and $100 million of Piedmont's earnings for the three and six months ended June 30, 2017, respectively. | |||||||||||||||
| (b) Includes costs to achieve the Piedmont merger of $19 million (net of tax of $11 million) for the three months ended June 30, 2017, and $29 million (net of tax of $17 million) for the six months ended June 30, 2017. | |||||||||||||||
| (c) Includes costs to achieve mergers of $69 million (net of tax of $42 million) for the three months ended June 30, 2016, and $143 million (net of tax of $88 million) for the six months ended June 30, 2016. | |||||||||||||||
| (d) Includes a charge of $15 million (net of tax of $9 million) for the three months ended June 30, 2016, and $27 million (net of tax of $17 million) for the six months ended June 30, 2016, primarily consisting of severance expense related to cost savings initiatives. | |||||||||||||||
| (e) Includes an impairment charge related to certain assets in Central America, partially offset by the operating results of the International Disposal Group for the three and six months ended June 30, 2016. | |||||||||||||||
| (f) Includes capital expenditures of the International Disposal Group prior to the sale for the three and six months ended June 30, 2016. | |||||||||||||||
13
| June 2017 | |||||||||||||||
| QUARTERLY HIGHLIGHTS | |||||||||||||||
| (Unaudited) | |||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||
| June 30, | June 30, | ||||||||||||||
| (In millions) | 2017 | 2016 | 2017 | 2016 | |||||||||||
| ELECTRIC UTILITIES AND INFRASTRUCTURE | |||||||||||||||
| Operating Revenues | $ | 5,158 | $ | 5,001 | $ | 10,105 | $ | 10,090 | |||||||
| Operating Expenses | |||||||||||||||
| Fuel used in electric generation and purchased power | 1,549 | 1,509 | 3,003 | 3,086 | |||||||||||
| Operation, maintenance and other | 1,265 | 1,230 | 2,536 | 2,528 | |||||||||||
| Depreciation and amortization | 714 | 701 | 1,451 | 1,410 | |||||||||||
| Property and other taxes | 270 | 263 | 531 | 525 | |||||||||||
| Impairment charges | 2 | 1 | 2 | 3 | |||||||||||
| Total operating expenses | 3,800 | 3,704 | 7,523 | 7,552 | |||||||||||
| Gains on Sales of Other Assets and Other, net | 1 | 1 | 4 | 2 | |||||||||||
| Operating Income | 1,359 | 1,298 | 2,586 | 2,540 | |||||||||||
| Other Income and Expenses | 76 | 77 | 155 | 140 | |||||||||||
| Interest Expense | 305 | 272 | 620 | 542 | |||||||||||
| Income Before Income Taxes | 1,130 | 1,103 | 2,121 | 2,138 | |||||||||||
| Income Tax Expense | 401 | 399 | 757 | 770 | |||||||||||
| Segment Income | $ | 729 | $ | 704 | $ | 1,364 | $ | 1,368 | |||||||
| GAS UTILITIES AND INFRASTRUCTURE | |||||||||||||||
| Operating Revenues | $ | 301 | $ | 99 | $ | 971 | $ | 269 | |||||||
| Operating Expenses | |||||||||||||||
| Cost of natural gas | 76 | 9 | 334 | 58 | |||||||||||
| Operation, maintenance and other | 93 | 28 | 198 | 60 | |||||||||||
| Depreciation and amortization | 57 | 20 | 114 | 40 | |||||||||||
| Property and other taxes | 26 | 14 | 56 | 32 | |||||||||||
| Total operating expenses | 252 | 71 | 702 | 190 | |||||||||||
| Operating Income | 49 | 28 | 269 | 79 | |||||||||||
| Other Income and Expenses | 20 | 3 | 38 | 6 | |||||||||||
| Interest Expense | 26 | 6 | 52 | 13 | |||||||||||
| Income Before Income Taxes | 43 | 25 | 255 | 72 | |||||||||||
| Income Tax Expense | 16 | 9 | 95 | 24 | |||||||||||
| Segment Income | $ | 27 | $ | 16 | $ | 160 | $ | 48 | |||||||
| COMMERCIAL RENEWABLES | |||||||||||||||
| Operating Revenues | $ | 110 | $ | 112 | $ | 238 | $ | 226 | |||||||
| Operating Expenses | |||||||||||||||
| Operation, maintenance and other | 58 | 82 | 135 | 155 | |||||||||||
| Depreciation and amortization | 38 | 32 | 77 | 62 | |||||||||||
| Property and other taxes | 8 | 6 | 17 | 12 | |||||||||||
| Total operating expenses | 104 | 120 | 229 | 229 | |||||||||||
| Gains on Sales of Other Assets and Other, net | 2 | 1 | 4 | 2 | |||||||||||
| Operating Income (Loss) | 8 | (7 | ) | 13 | (1 | ) | |||||||||
| Other Income and Expenses | (1 | ) | — | (2 | ) | (2 | ) | ||||||||
| Interest Expense | 23 | 12 | 42 | 23 | |||||||||||
| Loss Before Income Taxes | (16 | ) | (19 | ) | (31 | ) | (26 | ) | |||||||
| Income Tax Benefit | (42 | ) | (29 | ) | (81 | ) | (62 | ) | |||||||
| Less: Loss Attributable to Noncontrolling Interests | — | (1 | ) | (1 | ) | (1 | ) | ||||||||
| Segment Income | $ | 26 | $ | 11 | $ | 51 | $ | 37 | |||||||
| OTHER | |||||||||||||||
| Operating Revenues | $ | 35 | $ | 30 | $ | 68 | $ | 59 | |||||||
| Operating Expenses | |||||||||||||||
| Fuel used in electric generation and purchased power | 14 | 12 | 29 | 23 | |||||||||||
| Operation, maintenance and other | 18 | 39 | 26 | 75 | |||||||||||
| Depreciation and amortization | 26 | 37 | 52 | 71 | |||||||||||
| Property and other taxes | 4 | 8 | 7 | 17 | |||||||||||
| Impairment charges | 7 | — | 7 | 2 | |||||||||||
| Total operating expenses | 69 | 96 | 121 | 188 | |||||||||||
| Gains on Sales of Other Assets and Other, net | 6 | 6 | 11 | 11 | |||||||||||
| Operating Loss | (28 | ) | (60 | ) | (42 | ) | (118 | ) | |||||||
| Other Income and Expenses | 28 | 19 | 49 | 36 | |||||||||||
| Interest Expense | 139 | 191 | 273 | 396 | |||||||||||
| Loss Before Income Taxes | (139 | ) | (232 | ) | (266 | ) | (478 | ) | |||||||
| Income Tax Benefit | (48 | ) | (126 | ) | (100 | ) | (227 | ) | |||||||
| Less: Income Attributable to Noncontrolling Interests | 3 | 1 | 5 | 4 | |||||||||||
| Other Net Expense | $ | (94 | ) | $ | (107 | ) | $ | (171 | ) | $ | (255 | ) | |||
| Note: Prior period amounts have been recast to conform to the current segment structure. | |||||||||||||||
14
| 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, | ||||||||||||||
| 2017 | 2016 | 2017 | 2016 | ||||||||||||
| Operating Revenues | |||||||||||||||
| Regulated electric | $ | 5,118 | $ | 4,965 | $ | 10,031 | $ | 10,018 | |||||||
| Regulated natural gas | 275 | 97 | 921 | 266 | |||||||||||
| Nonregulated electric and other | 162 | 151 | 332 | 306 | |||||||||||
| Total operating revenues | 5,555 | 5,213 | 11,284 | 10,590 | |||||||||||
| Operating Expenses | |||||||||||||||
| Fuel used in electric generation and purchased power | 1,541 | 1,521 | 2,990 | 3,109 | |||||||||||
| Cost of natural gas | 76 | 9 | 334 | 58 | |||||||||||
| Operation, maintenance and other | 1,407 | 1,351 | 2,840 | 2,767 | |||||||||||
| Depreciation and amortization | 835 | 790 | 1,694 | 1,583 | |||||||||||
| Property and other taxes | 307 | 290 | 611 | 585 | |||||||||||
| Impairment charges | 9 | 1 | 9 | 4 | |||||||||||
| Total operating expenses | 4,175 | 3,962 | 8,478 | 8,106 | |||||||||||
| Gains on Sales of Other Assets and Other, net | 7 | 8 | 18 | 15 | |||||||||||
| Operating Income | 1,387 | 1,259 | 2,824 | 2,499 | |||||||||||
| Other Income and Expenses | |||||||||||||||
| Equity in earnings of unconsolidated affiliates | 36 | 15 | 65 | 23 | |||||||||||
| Other income and expenses, net | 81 | 81 | 167 | 151 | |||||||||||
| Total other income and expenses | 117 | 96 | 232 | 174 | |||||||||||
| Interest Expense | 486 | 478 | 977 | 967 | |||||||||||
| Income From Continuing Operations Before Income Taxes | 1,018 | 877 | 2,079 | 1,706 | |||||||||||
| Income Tax Expense from Continuing Operations | 327 | 253 | 671 | 505 | |||||||||||
| Income From Continuing Operations | 691 | 624 | 1,408 | 1,201 | |||||||||||
| (Loss) Income From Discontinued Operations, net of tax | (2 | ) | (112 | ) | (2 | ) | 10 | ||||||||
| Net Income | 689 | 512 | 1,406 | 1,211 | |||||||||||
| Less: Net Income Attributable to Noncontrolling Interests | 3 | 3 | 4 | 8 | |||||||||||
| Net Income Attributable to Duke Energy Corporation | $ | 686 | $ | 509 | $ | 1,402 | $ | 1,203 | |||||||
| Earnings Per Share - Basic and Diluted | |||||||||||||||
| Income from continuing operations attributable to Duke Energy Corporation common stockholders | |||||||||||||||
| Basic | $ | 0.98 | $ | 0.90 | $ | 2.00 | $ | 1.73 | |||||||
| Diluted | $ | 0.98 | $ | 0.90 | $ | 2.00 | $ | 1.73 | |||||||
| (Loss) Income from discontinued operations attributable to Duke Energy Corporation common stockholders | |||||||||||||||
| Basic | $ | — | $ | (0.16 | ) | $ | — | $ | 0.01 | ||||||
| Diluted | $ | — | $ | (0.16 | ) | $ | — | $ | 0.01 | ||||||
| Net income attributable to Duke Energy Corporation common stockholders | |||||||||||||||
| Basic | $ | 0.98 | $ | 0.74 | $ | 2.00 | $ | 1.74 | |||||||
| Diluted | $ | 0.98 | $ | 0.74 | $ | 2.00 | $ | 1.74 | |||||||
| Weighted average shares outstanding | |||||||||||||||
| Basic | 700 | 689 | 700 | 689 | |||||||||||
| Diluted | 700 | 690 | 700 | 689 | |||||||||||
15
DUKE ENERGY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
| (in millions) | June 30, 2017 | December 31, 2016 | |||||
| ASSETS | |||||||
| Current Assets | |||||||
| Cash and cash equivalents | $ | 298 | $ | 392 | |||
| Receivables (net of allowance for doubtful accounts of $13 at 2017 and $14 at 2016) | 498 | 751 | |||||
| Receivables of VIEs (net of allowance for doubtful accounts of $56 at 2017 and $54 at 2016) | 1,880 | 1,893 | |||||
| Inventory | 3,369 | 3,522 | |||||
| Regulatory assets (includes $52 at 2017 and $50 at 2016 related to VIEs) | 1,192 | 1,023 | |||||
| Other | 436 | 458 | |||||
| Total current assets | 7,673 | 8,039 | |||||
| Property, Plant and Equipment | |||||||
| Cost | 124,439 | 121,397 | |||||
| Accumulated depreciation and amortization | (40,522 | ) | (39,406 | ) | |||
| Generation facilities to be retired, net | 487 | 529 | |||||
| Net property, plant and equipment | 84,404 | 82,520 | |||||
| Other Noncurrent Assets | |||||||
| Goodwill | 19,425 | 19,425 | |||||
| Regulatory assets (includes $1,121 at 2017 and $1,142 at 2016 related to VIEs) | 12,808 | 12,878 | |||||
| Nuclear decommissioning trust funds | 6,601 | 6,205 | |||||
| Investments in equity method unconsolidated affiliates | 1,267 | 925 | |||||
| Other | 2,826 | 2,769 | |||||
| Total other noncurrent assets | 42,927 | 42,202 | |||||
| Total Assets | $ | 135,004 | $ | 132,761 | |||
| LIABILITIES AND EQUITY | |||||||
| Current Liabilities | |||||||
| Accounts payable | $ | 2,177 | $ | 2,994 | |||
| Notes payable and commercial paper | 3,488 | 2,487 | |||||
| Taxes accrued | 432 | 384 | |||||
| Interest accrued | 506 | 503 | |||||
| Current maturities of long-term debt (includes $212 at 2017 and $260 at 2016 related to VIEs) | 3,472 | 2,319 | |||||
| Asset retirement obligations | 397 | 411 | |||||
| Regulatory liabilities | 286 | 409 | |||||
| Other | 1,708 | 2,044 | |||||
| Total current liabilities | 12,466 | 11,551 | |||||
| Long-Term Debt (includes $4,018 at 2017 and $3,587 at 2016 related to VIEs) | 46,043 | 45,576 | |||||
| Other Noncurrent Liabilities | |||||||
| Deferred income taxes | 14,695 | 14,155 | |||||
| Asset retirement obligations | 10,165 | 10,200 | |||||
| Regulatory liabilities | 7,048 | 6,881 | |||||
| Accrued pension and other post-retirement benefit costs | 1,108 | 1,111 | |||||
| Investment tax credits | 534 | 493 | |||||
| Other | 1,651 | 1,753 | |||||
| Total other noncurrent liabilities | 35,201 | 34,593 | |||||
| Commitments and Contingencies | |||||||
| Equity | |||||||
| Common stock, $0.001 par value, 2 billion shares authorized; 700 million shares outstanding at 2017 and 2016 | 1 | 1 | |||||
| Additional paid-in capital | 38,758 | 38,741 | |||||
| Retained earnings | 2,607 | 2,384 | |||||
| Accumulated other comprehensive loss | (82 | ) | (93 | ) | |||
| Total Duke Energy Corporation stockholders' equity | 41,284 | 41,033 | |||||
| Noncontrolling interests | 10 | 8 | |||||
| Total equity | 41,294 | 41,041 | |||||
| Total Liabilities and Equity | $ | 135,004 | $ | 132,761 | |||
16
| DUKE ENERGY CORPORATION | ||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| (Unaudited) | ||||||||
| (In millions) | ||||||||
| Six Months Ended June 30, | ||||||||
| 2017 | 2016 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net Income | $ | 1,406 | $ | 1,211 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities | 1,350 | 2,014 | ||||||
| Net cash provided by operating activities | 2,756 | 3,225 | ||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Net cash used in investing activities | (4,324 | ) | (3,608 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Net cash provided by financing activities | 1,474 | 202 | ||||||
| Changes in cash and cash equivalents included in assets held for sale | — | 79 | ||||||
| Net decrease in cash and cash equivalents | (94 | ) | (102 | ) | ||||
| Cash and cash equivalents at the beginning of period | 392 | 383 | ||||||
| Cash and cash equivalents at end of period | $ | 298 | $ | 281 | ||||
17
DUKE ENERGY CORPORATION
EARNINGS VARIANCES
June 2017 QTD vs. Prior Year
| ($ per share) | Electric Utilities and Infrastructure | Gas Utilities and Infrastructure | Commercial Renewables | International Energy | Other | Discontinued Operations | Consolidated | |||||||||||||||||||||||||||
| 2016 QTD Reported Earnings Per Share, Diluted | $ | 1.02 | $ | 0.02 | $ | 0.02 | $ | — | $ | (0.16 | ) | $ | (0.16 | ) | $ | 0.74 | ||||||||||||||||||
| Costs to Achieve Mergers | — | — | — | — | 0.10 | — | 0.10 | |||||||||||||||||||||||||||
| Cost Savings Initiatives | — | — | — | — | 0.02 | — | 0.02 | |||||||||||||||||||||||||||
| International Energy Operations | — | — | — | 0.05 | — | (0.05 | ) | — | ||||||||||||||||||||||||||
| Discontinued Operations (a) | — | — | — | — | — | 0.21 | 0.21 | |||||||||||||||||||||||||||
| 2016 QTD Adjusted Earnings Per Share, Diluted | $ | 1.02 | $ | 0.02 | $ | 0.02 | $ | 0.05 | $ | (0.04 | ) | $ | — | $ | 1.07 | |||||||||||||||||||
| Change in share count (b) | (0.01 | ) | — | — | — | — | — | (0.01 | ) | |||||||||||||||||||||||||
| Weather | (0.05 | ) | — | — | — | — | — | (0.05 | ) | |||||||||||||||||||||||||
| Retail Volumes | 0.03 | — | — | — | — | — | 0.03 | |||||||||||||||||||||||||||
| Pricing and Riders (c) | 0.05 | — | — | — | — | — | 0.05 | |||||||||||||||||||||||||||
| Wholesale | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
| Operations and maintenance, net of recoverables | 0.01 | — | — | — | — | — | 0.01 | |||||||||||||||||||||||||||
| Piedmont Natural Gas contribution | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
| Midstream Gas Pipelines | — | 0.02 | — | — | — | — | 0.02 | |||||||||||||||||||||||||||
| Duke Energy Renewables (d) | — | — | 0.02 | — | — | — | 0.02 | |||||||||||||||||||||||||||
| National Methanol Company (NMC) | — | — | — | — | 0.01 | — | 0.01 | |||||||||||||||||||||||||||
| Interest Expense | (0.02 | ) | — | — | — | (0.03 | ) | — | (0.05 | ) | ||||||||||||||||||||||||
| Other (e) | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
| Change in effective income tax rate (f) | 0.01 | — | — | 0.02 | (0.05 | ) | — | (0.02 | ) | |||||||||||||||||||||||||
| Latin America, including foreign exchange rates | — | — | — | (0.07 | ) | — | — | (0.07 | ) | |||||||||||||||||||||||||
| 2017 QTD Adjusted Earnings Per Share, Diluted | $ | 1.04 | $ | 0.04 | $ | 0.04 | $ | — | $ | (0.11 | ) | $ | — | $ | 1.01 | |||||||||||||||||||
| Costs to Achieve Piedmont Merger | — | — | — | — | (0.03 | ) | — | (0.03 | ) | |||||||||||||||||||||||||
| 2017 QTD Reported Earnings Per Share, Diluted | $ | 1.04 | $ | 0.04 | $ | 0.04 | $ | — | $ | (0.14 | ) | $ | — | $ | 0.98 | |||||||||||||||||||
| Note 1: Prior period amounts have been recast to conform to the current segment structure. Results of NMC are included within Other. | ||||||||||||||||||||||||||||||||||
| Note 2: Earnings Per Share amounts are calculated using the consolidated statutory income tax rate for all drivers except Duke Energy Renewables, which uses an effective rate. | ||||||||||||||||||||||||||||||||||
| (a) Represents an impairment charge related to certain assets in Central America that were sold in 2016. | ||||||||||||||||||||||||||||||||||
| (b) Due to the Q4 2016 share issuance used to partially fund the Piedmont acquisition. Weighted average diluted shares outstanding increased from 690 million shares to 700 million shares. | ||||||||||||||||||||||||||||||||||
| (c) Primarily due to the DEP South Carolina rate case, the generation base rate adjustment at DEF, and favorable energy efficiency riders. | ||||||||||||||||||||||||||||||||||
| (d) Primarily due to improved wind resources and new projects placed in service (+$0.03), partially offset by lower solar ITCs in the current year (-$0.01). | ||||||||||||||||||||||||||||||||||
| (e) Electric Utilities and Infrastructure is primarily due to higher AFUDC Equity (+$0.02) offset by higher depreciation, amortization and other (-$0.02). | ||||||||||||||||||||||||||||||||||
| (f) Other is driven by a prior year favorable tax resolution (-$0.04). | ||||||||||||||||||||||||||||||||||
18
DUKE ENERGY CORPORATION
EARNINGS VARIANCES
June 2017 YTD vs. Prior Year
Electric Utilities and Infrastructure | Gas Utilities and Infrastructure | Commercial Renewables | International Energy | Other | Discontinued Operations | Consolidated | ||||||||||||||||||||||||||||
| ($ per share) | ||||||||||||||||||||||||||||||||||
| 2016 YTD Reported Earnings Per Share, Diluted | $ | 1.99 | $ | 0.07 | $ | 0.05 | $ | — | $ | (0.37 | ) | $ | — | $ | 1.74 | |||||||||||||||||||
| Costs to Achieve Mergers | — | — | — | — | 0.21 | — | 0.21 | |||||||||||||||||||||||||||
| Cost Savings Initiatives | — | — | — | — | 0.04 | — | 0.04 | |||||||||||||||||||||||||||
| International Energy Operations | — | — | — | 0.21 | — | (0.21 | ) | — | ||||||||||||||||||||||||||
| Discontinued Operations (a) | — | — | — | — | — | 0.21 | 0.21 | |||||||||||||||||||||||||||
| 2016 YTD Adjusted Earnings Per Share, Diluted | $ | 1.99 | $ | 0.07 | $ | 0.05 | $ | 0.21 | $ | (0.12 | ) | $ | — | $ | 2.20 | |||||||||||||||||||
| Change in share count (b) | (0.03 | ) | — | — | — | — | — | (0.03 | ) | |||||||||||||||||||||||||
| Weather | (0.19 | ) | — | — | — | — | — | (0.19 | ) | |||||||||||||||||||||||||
| Retail Volumes | 0.04 | — | — | — | — | — | 0.04 | |||||||||||||||||||||||||||
| Pricing and Riders (c) | 0.08 | — | — | — | — | — | 0.08 | |||||||||||||||||||||||||||
| Wholesale | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
| Operations and maintenance, net of recoverables (d) | 0.09 | — | — | — | — | — | 0.09 | |||||||||||||||||||||||||||
| Piedmont Natural Gas contribution | — | 0.14 | — | — | — | — | 0.14 | |||||||||||||||||||||||||||
| Midstream Gas Pipelines | — | 0.02 | — | — | — | — | 0.02 | |||||||||||||||||||||||||||
| Duke Energy Renewables (e) | — | — | 0.02 | — | — | — | 0.02 | |||||||||||||||||||||||||||
| National Methanol Company (NMC) | — | — | — | — | 0.02 | — | 0.02 | |||||||||||||||||||||||||||
| Interest Expense | (0.06 | ) | — | — | — | (0.05 | ) | — | (0.11 | ) | ||||||||||||||||||||||||
| Other (f) | 0.04 | — | — | — | 0.02 | — | 0.06 | |||||||||||||||||||||||||||
| Change in effective income tax rate (g) | (0.01 | ) | — | — | (0.08 | ) | (0.07 | ) | — | (0.16 | ) | |||||||||||||||||||||||
| Latin America, including foreign exchange rates | — | — | — | (0.13 | ) | — | — | (0.13 | ) | |||||||||||||||||||||||||
| 2017 YTD Adjusted Earnings Per Share, Diluted | $ | 1.95 | $ | 0.23 | $ | 0.07 | $ | — | $ | (0.20 | ) | $ | — | $ | 2.05 | |||||||||||||||||||
| Cost to Achieve Piedmont Merger | — | — | — | — | (0.05 | ) | — | (0.05 | ) | |||||||||||||||||||||||||
| 2017 YTD Reported Earnings Per Share, Diluted | $ | 1.95 | $ | 0.23 | $ | 0.07 | $ | — | $ | (0.25 | ) | $ | — | $ | 2.00 | |||||||||||||||||||
| Note 1: Prior period amounts have been recast to conform to the current segment structure. Results of NMC are included within Other. | ||||||||||||||||||||||||||||||||||
| Note 2: Earnings Per Share amounts are calculated using the consolidated statutory income tax rate for all drivers except Duke Energy Renewables, which uses an effective rate. | ||||||||||||||||||||||||||||||||||
| (a) Represents an impairment charge related to certain assets in Central America that were sold in 2016. | ||||||||||||||||||||||||||||||||||
| (b) Due to the Q4 2016 share issuance used to partially fund the Piedmont acquisition. Weighted average diluted shares outstanding increased from 689 million shares to 700 million shares. | ||||||||||||||||||||||||||||||||||
| (c) Primarily due the DEP South Carolina rate case, the generation base rate adjustment at DEF, and favorable energy efficiency riders. | ||||||||||||||||||||||||||||||||||
| (d) Primarily due to ongoing cost control and lower storm restoration costs. | ||||||||||||||||||||||||||||||||||
| (e) Primarily due to improved wind resources and new projects placed in service (+$0.03), partially offset by lower solar ITCs in the current year (-$0.01). | ||||||||||||||||||||||||||||||||||
| (f) Electric Utilities and Infrastructure is primarily due to higher AFUDC equity (+$0.05), partially offset by higher depreciation, amortization and other (-$0.02). | ||||||||||||||||||||||||||||||||||
| (g) Other is driven by a prior year favorable tax resolution ($-0.04). | ||||||||||||||||||||||||||||||||||
19
| Electric Utilities and Infrastructure | ||||||||||||||||||||||||
| Quarterly Highlights | ||||||||||||||||||||||||
| June 2017 | ||||||||||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||
| 2017 | 2016 | % Inc.(Dec.) | % Inc.(Dec.) Weather Normal (2) | 2017 | 2016 | % Inc.(Dec.) | % Inc.(Dec.) Weather Normal (2) | |||||||||||||||||
| GWh Sales (1) | ||||||||||||||||||||||||
| Residential | 18,061 | 17,685 | 2.1 | % | 2.5 | % | 38,126 | 39,347 | (3.1 | %) | 0.8 | % | ||||||||||||
| General Service | 18,774 | 18,673 | 0.5 | % | 0.4 | % | 36,323 | 36,523 | (0.5 | %) | 0.4 | % | ||||||||||||
| Industrial | 13,096 | 13,021 | 0.6 | % | 0.7 | % | 25,401 | 25,293 | 0.4 | % | 0.7 | % | ||||||||||||
| Other Energy Sales | 141 | 145 | (2.8 | %) | 285 | 291 | (2.1 | %) | ||||||||||||||||
| Unbilled Sales | 1,397 | 2,125 | (34.3 | %) | n/a | 462 | 1,781 | (74.1 | %) | n/a | ||||||||||||||
| Total Retail Sales | 51,469 | 51,649 | (0.3 | %) | 1.2 | % | 100,597 | 103,235 | (2.6 | %) | 0.6 | % | ||||||||||||
| Wholesale and Other | 9,949 | 10,536 | (5.6 | %) | 19,811 | 21,681 | (8.6 | %) | ||||||||||||||||
| Total Consolidated Electric Sales - Electric Utilities and Infrastructure | 61,418 | 62,185 | (1.2 | %) | 120,408 | 124,916 | (3.6 | %) | ||||||||||||||||
| Average Number of Customers (Electric) | ||||||||||||||||||||||||
| Residential | 6,523,982 | 6,438,062 | 1.3 | % | 6,517,331 | 6,431,744 | 1.3 | % | ||||||||||||||||
| General Service | 972,127 | 961,364 | 1.1 | % | 970,512 | 959,423 | 1.2 | % | ||||||||||||||||
| Industrial | 17,730 | 17,864 | (0.8 | %) | 17,739 | 17,900 | (0.9 | %) | ||||||||||||||||
| Other Energy Sales | 23,298 | 23,099 | 0.9 | % | 23,251 | 23,106 | 0.6 | % | ||||||||||||||||
| Total Retail Customers | 7,537,137 | 7,440,389 | 1.3 | % | 7,528,833 | 7,432,173 | 1.3 | % | ||||||||||||||||
| Wholesale and Other | 58 | 65 | (10.8 | %) | 59 | 64 | (7.8 | %) | ||||||||||||||||
| Total Average Number of Customers - Electric Utilities and Infrastructure | 7,537,195 | 7,440,454 | 1.3 | % | 7,528,892 | 7,432,237 | 1.3 | % | ||||||||||||||||
| Sources of Electric Energy (GWh) | ||||||||||||||||||||||||
| Generated - Net Output (3) | ||||||||||||||||||||||||
| Coal | 18,257 | 15,768 | 15.8 | % | 35,196 | 33,702 | 4.4 | % | ||||||||||||||||
| Nuclear | 18,158 | 18,609 | (2.4 | %) | 35,899 | 36,608 | (1.9 | %) | ||||||||||||||||
| Hydro | 628 | 324 | 93.8 | % | 829 | 1,371 | (39.5 | %) | ||||||||||||||||
| Oil and Natural Gas | 14,364 | 14,784 | (2.8 | %) | 28,595 | 30,867 | (7.4 | %) | ||||||||||||||||
| Renewable Energy | 128 | 45 | 184.4 | % | 203 | 98 | 107.1 | % | ||||||||||||||||
| Total Generation (4) | 51,535 | 49,530 | 4.0 | % | 100,722 | 102,646 | (1.9 | %) | ||||||||||||||||
| Purchased Power and Net Interchange (5) | 13,146 | 16,139 | (18.5 | %) | 25,714 | 28,652 | (10.3 | %) | ||||||||||||||||
| Total Sources of Energy | 64,681 | 65,669 | (1.5 | %) | 126,436 | 131,298 | (3.7 | %) | ||||||||||||||||
| Less: Line Loss and Other | 3,263 | 3,484 | (6.3 | %) | 6,028 | 6,382 | (5.5 | %) | ||||||||||||||||
| Total GWh Sources | 61,418 | 62,185 | (1.2 | %) | 120,408 | 124,916 | (3.6 | %) | ||||||||||||||||
| Owned MW Capacity (3) | ||||||||||||||||||||||||
| Summer | 49,387 | 49,666 | ||||||||||||||||||||||
| Winter | 53,091 | 52,837 | ||||||||||||||||||||||
| Nuclear Capacity Factor (%) (6) | 93 | 96 | ||||||||||||||||||||||
| (1) Except as indicated in footnote (2), represents non-weather normalized billed sales, with energy delivered but not yet billed (i.e., unbilled sales) reflected as a single amount and not allocated to the respective retail classes. | ||||||||||||||||||||||||
| (2) Represents weather normal total retail calendar sales (i.e., billed and unbilled sales). | ||||||||||||||||||||||||
| (3) Statistics reflect Duke Energy's ownership share of jointly owned stations. | ||||||||||||||||||||||||
| (4) Generation by source is reported net of auxiliary power. | ||||||||||||||||||||||||
| (5) Purchased power includes renewable energy purchases. | ||||||||||||||||||||||||
| (6) Statistics reflect 100% of jointly owned stations. | ||||||||||||||||||||||||
20
| Duke Energy Carolinas | ||||||||||||||||||||||||
| Quarterly Highlights | ||||||||||||||||||||||||
| Supplemental Electric Utilities and Infrastructure Information | ||||||||||||||||||||||||
| June 2017 | ||||||||||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||
| 2017 | 2016 | % Inc.(Dec.) | % Inc.(Dec.) Weather Normal (2) | 2017 | 2016 | % Inc.(Dec.) | % Inc.(Dec.) Weather Normal (2) | |||||||||||||||||
| GWh Sales (1) | ||||||||||||||||||||||||
| Residential | 5,841 | 5,671 | 3.0 | % | 12,712 | 13,251 | (4.1 | %) | ||||||||||||||||
| General Service | 7,005 | 6,934 | 1.0 | % | 13,532 | 13,598 | (0.5 | %) | ||||||||||||||||
| Industrial | 5,572 | 5,545 | 0.5 | % | 10,634 | 10,623 | 0.1 | % | ||||||||||||||||
| Other Energy Sales | 75 | 76 | (1.3 | %) | 151 | 152 | (0.7 | %) | ||||||||||||||||
| Unbilled Sales | 200 | 685 | (70.8 | %) | (32 | ) | 690 | (104.6 | %) | |||||||||||||||
| Total Retail Sales | 18,693 | 18,911 | (1.2 | %) | 1.0 | % | 36,997 | 38,314 | (3.4 | %) | 0.4 | % | ||||||||||||
| Wholesale and Other | 2,550 | 1,846 | 38.1 | % | 5,027 | 4,068 | 23.6 | % | ||||||||||||||||
| Total Consolidated Electric Sales - Duke Energy Carolinas | 21,243 | 20,757 | 2.3 | % | 42,024 | 42,382 | (0.8 | %) | ||||||||||||||||
| Average Number of Customers | ||||||||||||||||||||||||
| Residential | 2,176,676 | 2,143,608 | 1.5 | % | 2,173,011 | 2,141,071 | 1.5 | % | ||||||||||||||||
| General Service | 353,269 | 348,878 | 1.3 | % | 352,521 | 348,103 | 1.3 | % | ||||||||||||||||
| Industrial | 6,239 | 6,301 | (1.0 | %) | 6,245 | 6,317 | (1.1 | %) | ||||||||||||||||
| Other Energy Sales | 15,365 | 15,153 | 1.4 | % | 15,331 | 15,143 | 1.2 | % | ||||||||||||||||
| Total Retail Customers | 2,551,549 | 2,513,940 | 1.5 | % | 2,547,108 | 2,510,634 | 1.5 | % | ||||||||||||||||
| Wholesale and Other | 25 | 25 | — | % | 25 | 24 | 4.2 | % | ||||||||||||||||
| Total Average Number of Customers - Duke Energy Carolinas | 2,551,574 | 2,513,965 | 1.5 | % | 2,547,133 | 2,510,658 | 1.5 | % | ||||||||||||||||
| Sources of Electric Energy (GWh) | ||||||||||||||||||||||||
| Generated - Net Output (3) | ||||||||||||||||||||||||
| Coal | 6,906 | 5,082 | 35.9 | % | 12,492 | 10,661 | 17.2 | % | ||||||||||||||||
| Nuclear | 11,027 | 10,809 | 2.0 | % | 22,063 | 21,802 | 1.2 | % | ||||||||||||||||
| Hydro | 384 | 112 | 242.9 | % | 437 | 837 | (47.8 | %) | ||||||||||||||||
| Oil and Natural Gas | 2,366 | 2,691 | (12.1 | %) | 5,060 | 5,677 | (10.9 | %) | ||||||||||||||||
| Renewable Energy | 41 | 4 | 925.0 | % | 50 | 7 | 614.3 | % | ||||||||||||||||
| Total Generation (4) | 20,724 | 18,698 | 10.8 | % | 40,102 | 38,984 | 2.9 | % | ||||||||||||||||
| Purchased Power and Net Interchange (5) | 1,816 | 3,448 | (47.3 | %) | 4,299 | 6,067 | (29.1 | %) | ||||||||||||||||
| Total Sources of Energy | 22,540 | 22,146 | 1.8 | % | 44,401 | 45,051 | (1.4 | %) | ||||||||||||||||
| Less: Line Loss and Other | 1,297 | 1,389 | (6.6 | %) | 2,377 | 2,669 | (10.9 | %) | ||||||||||||||||
| Total GWh Sources | 21,243 | 20,757 | 2.3 | % | 42,024 | 42,382 | (0.8 | %) | ||||||||||||||||
| Owned MW Capacity (3) | ||||||||||||||||||||||||
| Summer | 19,568 | 19,678 | ||||||||||||||||||||||
| Winter | 20,425 | 20,383 | ||||||||||||||||||||||
| Nuclear Capacity Factor (%) (6) | 95 | 96 | ||||||||||||||||||||||
| Heating and Cooling Degree Days | ||||||||||||||||||||||||
| Actual | ||||||||||||||||||||||||
| Heating Degree Days | 131 | 200 | (34.5 | %) | 1,422 | 1,861 | (23.6 | %) | ||||||||||||||||
| Cooling Degree Days | 524 | 570 | (8.1 | %) | 534 | 589 | (9.3 | %) | ||||||||||||||||
| Variance from Normal | ||||||||||||||||||||||||
| Heating Degree Days | (40.5 | %) | (9.5 | %) | n/a | (27.7 | %) | (6.3 | %) | n/a | ||||||||||||||
| Cooling Degree Days | 6.3 | % | 17.3 | % | n/a | 7.2 | % | 19.6 | % | n/a | ||||||||||||||
| (1) Except as indicated in footnote (2), represents non-weather normalized billed sales, with energy delivered but not yet billed (i.e., unbilled sales) reflected as a single amount and not allocated to the respective retail classes. | ||||||||||||||||||||||||
| (2) Represents weather normal total retail calendar sales (i.e., billed and unbilled sales). | ||||||||||||||||||||||||
| (3) Statistics reflect Duke Energy's ownership share of jointly owned stations. | ||||||||||||||||||||||||
| (4) Generation by source is reported net of auxiliary power. | ||||||||||||||||||||||||
| (5) Purchased power includes renewable energy purchases. | ||||||||||||||||||||||||
| (6) Statistics reflect 100% of jointly owned stations. | ||||||||||||||||||||||||
21
| Duke Energy Progress | ||||||||||||||||||||||||
| Quarterly Highlights | ||||||||||||||||||||||||
| Supplemental Electric Utilities and Infrastructure Information | ||||||||||||||||||||||||
| June 2017 | ||||||||||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||
| 2017 | 2016 | % Inc.(Dec.) | % Inc.(Dec.) Weather Normal (2) | 2017 | 2016 | % Inc.(Dec.) | % Inc.(Dec.) Weather Normal (2) | |||||||||||||||||
| GWh Sales (1) | ||||||||||||||||||||||||
| Residential | 3,705 | 3,597 | 3.0 | % | 8,338 | 8,597 | (3.0 | %) | ||||||||||||||||
| General Service | 3,723 | 3,680 | 1.2 | % | 7,272 | 7,340 | (0.9 | %) | ||||||||||||||||
| Industrial | 2,602 | 2,547 | 2.2 | % | 5,091 | 4,986 | 2.1 | % | ||||||||||||||||
| Other Energy Sales | 20 | 22 | (9.1 | %) | 41 | 46 | (10.9 | %) | ||||||||||||||||
| Unbilled Sales | 448 | 345 | 29.9 | % | (52 | ) | 210 | (124.8 | %) | |||||||||||||||
| Total Retail Sales | 10,498 | 10,191 | 3.0 | % | 2.5 | % | 20,690 | 21,179 | (2.3 | %) | 0.8 | % | ||||||||||||
| Wholesale and Other | 5,064 | 6,638 | (23.7 | %) | 10,509 | 12,799 | (17.9 | %) | ||||||||||||||||
| Total Consolidated Electric Sales - Duke Energy Progress | 15,562 | 16,829 | (7.5 | %) | 31,199 | 33,978 | (8.2 | %) | ||||||||||||||||
| Average Number of Customers | ||||||||||||||||||||||||
| Residential | 1,307,337 | 1,289,306 | 1.4 | % | 1,304,901 | 1,287,593 | 1.3 | % | ||||||||||||||||
| General Service | 231,713 | 228,717 | 1.3 | % | 231,059 | 228,120 | 1.3 | % | ||||||||||||||||
| Industrial | 4,132 | 4,137 | (0.1 | %) | 4,130 | 4,148 | (0.4 | %) | ||||||||||||||||
| Other Energy Sales | 1,456 | 1,542 | (5.6 | %) | 1,459 | 1,571 | (7.1 | %) | ||||||||||||||||
| Total Retail Customers | 1,544,638 | 1,523,702 | 1.4 | % | 1,541,549 | 1,521,432 | 1.3 | % | ||||||||||||||||
| Wholesale and Other | 14 | 15 | (6.7 | %) | 14 | 15 | (6.7 | %) | ||||||||||||||||
| Total Average Number of Customers - Duke Energy Progress | 1,544,652 | 1,523,717 | 1.4 | % | 1,541,563 | 1,521,447 | 1.3 | % | ||||||||||||||||
| Sources of Electric Energy (GWh) | ||||||||||||||||||||||||
| Generated - Net Output (3) | ||||||||||||||||||||||||
| Coal | 1,593 | 2,328 | (31.6 | %) | 3,237 | 4,435 | (27.0 | %) | ||||||||||||||||
| Nuclear | 7,131 | 7,800 | (8.6 | %) | 13,836 | 14,806 | (6.6 | %) | ||||||||||||||||
| Hydro | 198 | 125 | 58.4 | % | 301 | 378 | (20.4 | %) | ||||||||||||||||
| Oil and Natural Gas | 4,876 | 5,623 | (13.3 | %) | 10,712 | 12,095 | (11.4 | %) | ||||||||||||||||
| Renewable Energy | 72 | 41 | 75.6 | % | 134 | 91 | 47.3 | % | ||||||||||||||||
| Total Generation (4) | 13,870 | 15,917 | (12.9 | %) | 28,220 | 31,805 | (11.3 | %) | ||||||||||||||||
| Purchased Power and Net Interchange (5) | 2,162 | 1,497 | 44.4 | % | 3,986 | 3,262 | 22.2 | % | ||||||||||||||||
| Total Sources of Energy | 16,032 | 17,414 | (7.9 | %) | 32,206 | 35,067 | (8.2 | %) | ||||||||||||||||
| Less: Line Loss and Other | 470 | 585 | (19.7 | %) | 1,007 | 1,089 | (7.5 | %) | ||||||||||||||||
| Total GWh Sources | 15,562 | 16,829 | (7.5 | %) | 31,199 | 33,978 | (8.2 | %) | ||||||||||||||||
| Owned MW Capacity (3) | ||||||||||||||||||||||||
| Summer | 12,777 | 12,935 | ||||||||||||||||||||||
| Winter | 13,987 | 14,034 | ||||||||||||||||||||||
| Nuclear Capacity Factor (%) (6) | 90 | 96 | ||||||||||||||||||||||
| Heating and Cooling Degree Days | ||||||||||||||||||||||||
| Actual | ||||||||||||||||||||||||
| Heating Degree Days | 83 | 179 | (53.6 | %) | 1,286 | 1,693 | (24.0 | %) | ||||||||||||||||
| Cooling Degree Days | 647 | 576 | 12.3 | % | 657 | 612 | 7.4 | % | ||||||||||||||||
| Variance from Normal | ||||||||||||||||||||||||
| Heating Degree Days | (55.7 | %) | (5.3 | %) | n/a | (28.7 | %) | (6.9 | %) | n/a | ||||||||||||||
| Cooling Degree Days | 21.1 | % | 8.7 | % | n/a | 20.8 | % | 13.3 | % | 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) Statistics reflect Duke Energy's ownership share of jointly owned stations. | ||||||||||||||||||||||||
| (4) Generation by source is reported net of auxiliary power. | ||||||||||||||||||||||||
| (5) Purchased power includes renewable energy purchases. | ||||||||||||||||||||||||
| (6) Statistics reflect 100% of jointly owned stations. | ||||||||||||||||||||||||
22
| Duke Energy Florida | ||||||||||||||||||||||||
| Quarterly Highlights | ||||||||||||||||||||||||
| Supplemental Electric Utilities and Infrastructure Information | ||||||||||||||||||||||||
| June 2017 | ||||||||||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||
| 2017 | 2016 | % Inc.(Dec.) | % Inc.(Dec.) Weather Normal (2) | 2017 | 2016 | % Inc.(Dec.) | % Inc.(Dec.) Weather Normal (2) | |||||||||||||||||
| GWh Sales (1) | ||||||||||||||||||||||||
| Residential | 4,944 | 4,872 | 1.5 | % | 8,768 | 9,045 | (3.1 | %) | ||||||||||||||||
| General Service | 3,803 | 3,820 | (0.4 | %) | 7,057 | 7,061 | (0.1 | %) | ||||||||||||||||
| Industrial | 787 | 812 | (3.1 | %) | 1,542 | 1,564 | (1.4 | %) | ||||||||||||||||
| Other Energy Sales | 6 | 6 | — | % | 12 | 12 | — | % | ||||||||||||||||
| Unbilled Sales | 497 | 669 | (25.7 | %) | 653 | 658 | (0.8 | %) | ||||||||||||||||
| Total Retail Sales | 10,037 | 10,179 | (1.4 | %) | 0.9 | % | 18,032 | 18,340 | (1.7 | %) | 1.9 | % | ||||||||||||
| Wholesale and Other | 703 | 467 | 50.5 | % | 1,013 | 762 | 32.9 | % | ||||||||||||||||
| Total Electric Sales - Duke Energy Florida | 10,740 | 10,646 | 0.9 | % | 19,045 | 19,102 | (0.3 | %) | ||||||||||||||||
| Average Number of Customers | ||||||||||||||||||||||||
| Residential | 1,569,855 | 1,546,606 | 1.5 | % | 1,566,947 | 1,544,081 | 1.5 | % | ||||||||||||||||
| General Service | 198,307 | 195,356 | 1.5 | % | 197,864 | 195,032 | 1.5 | % | ||||||||||||||||
| Industrial | 2,146 | 2,182 | (1.6 | %) | 2,151 | 2,192 | (1.9 | %) | ||||||||||||||||
| Other Energy Sales | 1,518 | 1,536 | (1.2 | %) | 1,521 | 1,536 | (1.0 | %) | ||||||||||||||||
| Total Retail Customers | 1,771,826 | 1,745,680 | 1.5 | % | 1,768,483 | 1,742,841 | 1.5 | % | ||||||||||||||||
| Wholesale and Other | 13 | 15 | (13.3 | %) | 14 | 15 | (6.7 | %) | ||||||||||||||||
| Total Average Number of Customers - Duke Energy Florida | 1,771,839 | 1,745,695 | 1.5 | % | 1,768,497 | 1,742,856 | 1.5 | % | ||||||||||||||||
| Sources of Electric Energy (GWh) | ||||||||||||||||||||||||
| Generated - Net Output (3) | ||||||||||||||||||||||||
| Coal | 2,835 | 2,331 | 21.6 | % | 4,952 | 3,782 | 30.9 | % | ||||||||||||||||
| Oil and Natural Gas | 6,664 | 5,638 | 18.2 | % | 12,012 | 11,761 | 2.1 | % | ||||||||||||||||
| Renewable Energy | 4 | — | n/a | 8 | — | n/a | ||||||||||||||||||
| Total Generation (4) | 9,503 | 7,969 | 19.2 | % | 16,972 | 15,543 | 9.2 | % | ||||||||||||||||
| Purchased Power and Net Interchange (5) | 1,753 | 3,130 | (44.0 | %) | 3,049 | 4,639 | (34.3 | %) | ||||||||||||||||
| Total Sources of Energy | 11,256 | 11,099 | 1.4 | % | 20,021 | 20,182 | (0.8 | %) | ||||||||||||||||
| Less: Line Loss and Other | 516 | 453 | 13.9 | % | 976 | 1,080 | (9.6 | %) | ||||||||||||||||
| Total GWh Sources | 10,740 | 10,646 | 0.9 | % | 19,045 | 19,102 | (0.3 | %) | ||||||||||||||||
| Owned MW Capacity (3) | ||||||||||||||||||||||||
| Summer | 9,225 | 8,848 | ||||||||||||||||||||||
| Winter | 10,332 | 9,735 | ||||||||||||||||||||||
| Heating and Cooling Degree Days | ||||||||||||||||||||||||
| Actual | ||||||||||||||||||||||||
| Heating Degree Days | 1 | — | — | % | 177 | 401 | (55.9 | %) | ||||||||||||||||
| Cooling Degree Days | 1,079 | 1,112 | (3.0 | %) | 1,352 | 1,311 | 3.1 | % | ||||||||||||||||
| Variance from Normal | ||||||||||||||||||||||||
| Heating Degree Days | (94.1 | %) | (100.0 | %) | n/a | (54.8 | %) | 1.1 | % | n/a | ||||||||||||||
| Cooling Degree Days | 4.5 | % | 8.0 | % | n/a | 11.2 | % | 7.9 | % | 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) Statistics reflect Duke Energy's ownership share of jointly owned stations. | ||||||||||||||||||||||||
| (4) Generation by source is reported net of auxiliary power. | ||||||||||||||||||||||||
| (5) Purchased power includes renewable energy purchases. | ||||||||||||||||||||||||
23
| Duke Energy Ohio | ||||||||||||||||||||||||
| Quarterly Highlights | ||||||||||||||||||||||||
| Supplemental Electric Utilities and Infrastructure Information | ||||||||||||||||||||||||
| June 2017 | ||||||||||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||
| 2017 | 2016 | % Inc.(Dec.) | % Inc.(Dec.) Weather Normal (2) | 2017 | 2016 | % Inc.(Dec.) | % Inc.(Dec.) Weather Normal (2) | |||||||||||||||||
| GWh Sales (1) | ||||||||||||||||||||||||
| Residential | 1,777 | 1,747 | 1.7 | % | 4,030 | 4,067 | (0.9 | %) | ||||||||||||||||
| General Service | 2,267 | 2,278 | (0.5 | %) | 4,524 | 4,575 | (1.1 | %) | ||||||||||||||||
| Industrial | 1,464 | 1,457 | 0.5 | % | 2,905 | 2,901 | 0.1 | % | ||||||||||||||||
| Other Energy Sales | 27 | 28 | (3.6 | %) | 55 | 55 | — | % | ||||||||||||||||
| Unbilled Sales | 132 | 212 | (37.7 | %) | (69 | ) | 120 | (157.5 | %) | |||||||||||||||
| Total Retail Sales | 5,667 | 5,722 | (1.0 | %) | 0.8 | % | 11,445 | 11,718 | (2.3 | %) | (0.2 | %) | ||||||||||||
| Wholesale and Other | 234 | 74 | 216.2 | % | 515 | 185 | 178.4 | % | ||||||||||||||||
| Total Electric Sales - Duke Energy Ohio | 5,901 | 5,796 | 1.8 | % | 11,960 | 11,903 | 0.5 | % | ||||||||||||||||
| Average Number of Customers | ||||||||||||||||||||||||
| Residential | 758,460 | 752,249 | 0.8 | % | 758,962 | 752,718 | 0.8 | % | ||||||||||||||||
| General Service | 87,787 | 87,543 | 0.3 | % | 87,965 | 87,491 | 0.5 | % | ||||||||||||||||
| Industrial | 2,499 | 2,517 | (0.7 | %) | 2,504 | 2,523 | (0.8 | %) | ||||||||||||||||
| Other Energy Sales | 3,302 | 3,254 | 1.5 | % | 3,292 | 3,250 | 1.3 | % | ||||||||||||||||
| Total Retail Customers | 852,048 | 845,563 | 0.8 | % | 852,723 | 845,982 | 0.8 | % | ||||||||||||||||
| Wholesale and Other | 1 | 1 | — | % | 1 | 1 | — | % | ||||||||||||||||
| Total Average Number of Customers - Duke Energy Ohio | 852,049 | 845,564 | 0.8 | % | 852,724 | 845,983 | 0.8 | % | ||||||||||||||||
| Sources of Electric Energy (GWh) | ||||||||||||||||||||||||
| Generated - Net Output (3) | ||||||||||||||||||||||||
| Coal | 1,023 | 536 | 90.9 | % | 2,226 | 1,464 | 52.0 | % | ||||||||||||||||
| Oil and Natural Gas | 6 | 10 | (40.0 | %) | 7 | 11 | (36.4 | %) | ||||||||||||||||
| Total Generation (4) | 1,029 | 546 | 88.5 | % | 2,233 | 1,475 | 51.4 | % | ||||||||||||||||
| Purchased Power and Net Interchange (5) | 5,446 | 5,931 | (8.2 | %) | 10,912 | 11,486 | (5.0 | %) | ||||||||||||||||
| Total Sources of Energy | 6,475 | 6,477 | — | % | 13,145 | 12,961 | 1.4 | % | ||||||||||||||||
| Less: Line Loss and Other | 574 | 681 | (15.7 | %) | 1,185 | 1,058 | 12.0 | % | ||||||||||||||||
| Total GWh Sources | 5,901 | 5,796 | 1.8 | % | 11,960 | 11,903 | 0.5 | % | ||||||||||||||||
| Owned MW Capacity (3) | ||||||||||||||||||||||||
| Summer | 1,076 | 1,062 | ||||||||||||||||||||||
| Winter | 1,164 | 1,164 | ||||||||||||||||||||||
| Heating and Cooling Degree Days | ||||||||||||||||||||||||
| Actual | ||||||||||||||||||||||||
| Heating Degree Days | 313 | 475 | (34.1 | %) | 2,357 | 2,824 | (16.5 | %) | ||||||||||||||||
| Cooling Degree Days | 332 | 372 | (10.8 | %) | 333 | 372 | (10.5 | %) | ||||||||||||||||
| Variance from Normal | ||||||||||||||||||||||||
| Heating Degree Days | (30.4 | %) | 5.8 | % | n/a | (22.1 | %) | (7.2 | %) | n/a | ||||||||||||||
| Cooling Degree Days | 1.2 | % | 14.5 | % | n/a | 0.5 | % | 13.3 | % | 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) Statistics reflect Duke Energy's ownership share of jointly owned stations. | ||||||||||||||||||||||||
| (4) Generation by source is reported net of auxiliary power. | ||||||||||||||||||||||||
| (5) Purchased power includes renewable energy purchases. | ||||||||||||||||||||||||
24
| Duke Energy Indiana | ||||||||||||||||||||||||
| Quarterly Highlights | ||||||||||||||||||||||||
| Supplemental Electric Utilities and Infrastructure Information | ||||||||||||||||||||||||
| June 2017 | ||||||||||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||
| 2017 | 2016 | % Inc.(Dec.) | % Inc.(Dec.) Weather Normal (2) | 2017 | 2016 | % Inc.(Dec.) | % Inc.(Dec.) Weather Normal (2) | |||||||||||||||||
| GWh Sales (1) | ||||||||||||||||||||||||
| Residential | 1,794 | 1,798 | (0.2 | %) | 4,278 | 4,387 | (2.5 | %) | ||||||||||||||||
| General Service | 1,976 | 1,961 | 0.8 | % | 3,938 | 3,949 | (0.3 | %) | ||||||||||||||||
| Industrial | 2,671 | 2,660 | 0.4 | % | 5,229 | 5,219 | 0.2 | % | ||||||||||||||||
| Other Energy Sales | 13 | 13 | — | % | 26 | 26 | — | % | ||||||||||||||||
| Unbilled Sales | 120 | 214 | (43.9 | %) | (38 | ) | 103 | (136.9 | %) | |||||||||||||||
| Total Retail Sales | 6,574 | 6,646 | (1.1 | %) | 0.6 | % | 13,433 | 13,684 | (1.8 | %) | (0.1 | %) | ||||||||||||
| Wholesale and Other | 1,398 | 1,511 | (7.5 | %) | 2,747 | 3,867 | (29.0 | %) | ||||||||||||||||
| Total Electric Sales - Duke Energy Indiana | 7,972 | 8,157 | (2.3 | %) | 16,180 | 17,551 | (7.8 | %) | ||||||||||||||||
| Average Number of Customers | ||||||||||||||||||||||||
| Residential | 711,654 | 706,293 | 0.8 | % | 713,510 | 706,281 | 1.0 | % | ||||||||||||||||
| General Service | 101,051 | 100,870 | 0.2 | % | 101,103 | 100,677 | 0.4 | % | ||||||||||||||||
| Industrial | 2,714 | 2,727 | (0.5 | %) | 2,709 | 2,720 | (0.4 | %) | ||||||||||||||||
| Other Energy Sales | 1,657 | 1,614 | 2.7 | % | 1,648 | 1,606 | 2.6 | % | ||||||||||||||||
| Total Retail Customers | 817,076 | 811,504 | 0.7 | % | 818,970 | 811,284 | 0.9 | % | ||||||||||||||||
| Wholesale and Other | 5 | 9 | (44.4 | %) | 5 | 9 | (44.4 | %) | ||||||||||||||||
| Total Average Number of Customers - Duke Energy Indiana | 817,081 | 811,513 | 0.7 | % | 818,975 | 811,293 | 0.9 | % | ||||||||||||||||
| Sources of Electric Energy (GWh) | ||||||||||||||||||||||||
| Generated - Net Output (3) | ||||||||||||||||||||||||
| Coal | 5,900 | 5,491 | 7.4 | % | 12,289 | 13,360 | (8.0 | %) | ||||||||||||||||
| Hydro | 46 | 87 | (47.1 | %) | 91 | 156 | (41.7 | %) | ||||||||||||||||
| Oil and Natural Gas | 452 | 822 | (45.0 | %) | 804 | 1,323 | (39.2 | %) | ||||||||||||||||
| Renewable Energy | 11 | — | n/a | 11 | — | n/a | ||||||||||||||||||
| Total Generation (4) | 6,409 | 6,400 | 0.1 | % | 13,195 | 14,839 | (11.1 | %) | ||||||||||||||||
| Purchased Power and Net Interchange (5) | 1,969 | 2,133 | (7.7 | %) | 3,468 | 3,198 | 8.4 | % | ||||||||||||||||
| Total Sources of Energy | 8,378 | 8,533 | (1.8 | %) | 16,663 | 18,037 | (7.6 | %) | ||||||||||||||||
| Less: Line Loss and Other | 406 | 376 | 8.0 | % | 483 | 486 | (0.6 | %) | ||||||||||||||||
| Total GWh Sources | 7,972 | 8,157 | (2.3 | %) | 16,180 | 17,551 | (7.8 | %) | ||||||||||||||||
| Owned MW Capacity (3) | ||||||||||||||||||||||||
| Summer | 6,741 | 7,143 | ||||||||||||||||||||||
| Winter | 7,183 | 7,521 | ||||||||||||||||||||||
| Heating and Cooling Degree Days | ||||||||||||||||||||||||
| Actual | ||||||||||||||||||||||||
| Heating Degree Days | 372 | 522 | (28.7 | %) | 2,580 | 3,043 | (15.2 | %) | ||||||||||||||||
| Cooling Degree Days | 323 | 376 | (14.1 | %) | 323 | 376 | (14.1 | %) | ||||||||||||||||
| Variance from Normal | ||||||||||||||||||||||||
| Heating Degree Days | (24.6 | %) | 6.1 | % | n/a | (20.8 | %) | (7.0 | %) | n/a | ||||||||||||||
| Cooling Degree Days | (2.2 | %) | 14.6 | % | n/a | (3.1 | %) | 13.4 | % | 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) Statistics reflect Duke Energy's ownership share of jointly owned stations. | ||||||||||||||||||||||||
| (4) Generation by source is reported net of auxiliary power. | ||||||||||||||||||||||||
| (5) Purchased power includes renewable energy purchases. | ||||||||||||||||||||||||
25
| Gas Utilities and Infrastructure | ||||||||||||||||||
| Quarterly Highlights | ||||||||||||||||||
| June 2017 | ||||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||
| 2017 | 2016 | % Inc.(Dec.) | 2017 | 2016 | % Inc.(Dec.) | |||||||||||||
| Total Sales | ||||||||||||||||||
| Piedmont Natural Gas Local Distribution Company (LDC) throughput (dekatherms) (1) (2) | 94,013,754 | 105,896,652 | (11.2 | %) | 227,290,541 | 261,343,238 | (13.0 | %) | ||||||||||
| Duke Energy Midwest LDC throughput (Mcf) | 12,204,767 | 12,714,127 | (4.0 | %) | 43,035,766 | 47,455,646 | (9.3 | %) | ||||||||||
| Average Number of Customers - Piedmont Natural Gas (1) | ||||||||||||||||||
| Residential | 952,716 | 936,622 | 1.7 | % | 953,800 | 938,346 | 1.6 | % | ||||||||||
| Commercial | 101,138 | 100,211 | 0.9 | % | 101,378 | 100,467 | 0.9 | % | ||||||||||
| Industrial | 2,295 | 2,295 | — | % | 2,317 | 2,298 | 0.8 | % | ||||||||||
| Power Generation | 26 | 25 | 4.0 | % | 26 | 25 | 4.0 | % | ||||||||||
| Total Average Number of Gas Customers - Piedmont Natural Gas | 1,056,175 | 1,039,153 | 1.6 | % | 1,057,521 | 1,041,136 | 1.6 | % | ||||||||||
| Average Number of Customers - Duke Energy Midwest | ||||||||||||||||||
| Residential | 481,716 | 477,813 | 0.8 | % | 482,905 | 479,166 | 0.8 | % | ||||||||||
| Commercial | 42,816 | 42,898 | (0.2 | %) | 44,077 | 44,061 | — | % | ||||||||||
| Industrial | 1,564 | 1,601 | (2.3 | %) | 1,617 | 1,650 | (2.0 | %) | ||||||||||
| Other | 140 | 143 | (2.1 | %) | 140 | 143 | (2.1 | %) | ||||||||||
| Total Average Number of Gas Customers - Duke Energy Midwest | 526,236 | 522,455 | 0.7 | % | 528,739 | 525,020 | 0.7 | % | ||||||||||
| (1) Sales and customer data for Piedmont Natural Gas include amounts prior to the acquisition on October 3, 2016, for comparative purposes. Duke Energy's consolidated financial results for 2016 do not include Piedmont's results of operations prior to the date of acquisition. | ||||||||||||||||||
| (2) Piedmont has a margin decoupling mechanism in North Carolina and weather normalization mechanisms in South Carolina and Tennessee that significantly eliminate the impact of throughput changes on earnings. Duke Energy Ohio's rate design also serves to offset this impact. | ||||||||||||||||||
| Commercial Renewables | ||||||||||||||||||
| Quarterly Highlights | ||||||||||||||||||
| June 2017 | ||||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||
| 2017 | 2016 | % Inc.(Dec.) | 2017 | 2016 | % Inc.(Dec.) | |||||||||||||
| Renewable Plant Production, GWh | 2,231 | 1,758 | 26.9 | % | 4,516 | 3,818 | 18.3 | % | ||||||||||
| Net Proportional MW Capacity in Operation | n/a | n/a | 2,908 | 1,978 | 47.0 | % | ||||||||||||
26