3rd Quarter 2016 Statistical Supplement
| Table of Contents | ||||
| DUKE ENERGY CORPORATION (Unaudited) | Non-GAAP Disclosures (Unaudited) | |||
| Consolidating Statements of Operations | Reported to Adjusted Earnings Reconciliations | |||
| Consolidating Balance Sheets | Non-GAAP Financial Measures | |||
| REGULATED UTILITIES (Unaudited) | ||||
| Consolidating Segment Income | ||||
| Consolidating Balance Sheets | ||||
| Revenues by Customer Class | ||||
This Statistical Supplement should be read in conjunction with Duke Energy's Annual Report on Form 10-K for the year ended December 31, 2015, and Form 10-Q for the nine months ended September 30, 2016.
DUKE ENERGY CORPORATION
Consolidating Statements of Operations
(Unaudited)
| Nine Months Ended September 30, 2016 | ||||||||||||||||||
| (in millions) | Regulated Utilities | International Energy | Commercial Portfolio | Other | Eliminations / Adjustments | Duke Energy | ||||||||||||
| Operating Revenues | ||||||||||||||||||
| Regulated electric | $ | 16,430 | $ | — | $ | — | $ | — | $ | (109 | ) | $ | 16,321 | |||||
| Nonregulated electric and other | — | 761 | 366 | 91 | 33 | 1,251 | ||||||||||||
| Regulated natural gas | 358 | — | — | — | (3 | ) | 355 | |||||||||||
| Total operating revenues | 16,788 | 761 | 366 | 91 | (79 | ) | 17,927 | |||||||||||
| Operating Expenses | ||||||||||||||||||
| Fuel used in electric generation and purchased power - regulated | 5,102 | — | — | — | — | 5,102 | ||||||||||||
| Fuel used in electric generation and purchased power - nonregulated | — | 177 | — | 38 | — | 215 | ||||||||||||
| Cost of natural gas | 64 | 34 | — | — | — | 98 | ||||||||||||
| Operation, maintenance and other | 3,905 | 240 | 257 | 144 | (79 | ) | 4,467 | |||||||||||
| Depreciation and amortization | 2,198 | 62 | 96 | 108 | — | 2,464 | ||||||||||||
| Property and other taxes | 843 | 6 | 20 | 24 | — | 893 | ||||||||||||
Impairment charges (a) | 12 | 194 | — | 2 | — | 208 | ||||||||||||
| Total operating expenses | 12,124 | 713 | 373 | 316 | (79 | ) | 13,447 | |||||||||||
| Gains (Losses) on Sales of Other Assets and Other, net | 3 | (2 | ) | 3 | 16 | — | 20 | |||||||||||
| Operating Income (Loss) | 4,667 | 46 | (4 | ) | (209 | ) | — | 4,500 | ||||||||||
| Other Income and Expenses | ||||||||||||||||||
Equity in earnings (losses) of unconsolidated affiliates (b) | (2 | ) | 27 | (63 | ) | 1 | — | (37 | ) | |||||||||
| Other income and expenses, net | 215 | 35 | — | 29 | (9 | ) | 270 | |||||||||||
| Total Other Income and Expenses | 213 | 62 | (63 | ) | 30 | (9 | ) | 233 | ||||||||||
Interest Expense (c) | 848 | 63 | 38 | 553 | (9 | ) | 1,493 | |||||||||||
| Income (Loss) from Continuing Operations Before Income Taxes | 4,032 | 45 | (105 | ) | (732 | ) | — | 3,240 | ||||||||||
Income Tax Expense (Benefit) from Continuing Operations (d) | 1,419 | (48 | ) | (123 | ) | (276 | ) | — | 972 | |||||||||
| Income (Loss) from Continuing Operations | 2,613 | 93 | 18 | (456 | ) | — | 2,268 | |||||||||||
| Less: Net Income (Loss) Attributable to Noncontrolling Interest | — | 8 | (2 | ) | 7 | — | 13 | |||||||||||
| Segment Income / Other Net Expense | $ | 2,613 | $ | 85 | $ | 20 | $ | (463 | ) | $ | — | $ | 2,255 | |||||
Income from Discontinued Operations, net of tax (e) | 124 | |||||||||||||||||
| Net Income Attributable to Duke Energy Corporation | $ | 2,379 | ||||||||||||||||
| Segment Income / Other Net Expense | $ | 2,613 | $ | 85 | $ | 20 | $ | (463 | ) | $ | — | $ | 2,255 | |||||
| Special Items | — | 145 | 45 | 234 | — | 424 | ||||||||||||
Adjusted Earnings (f) | $ | 2,613 | $ | 230 | $ | 65 | $ | (229 | ) | $ | — | $ | 2,679 | |||||
| (a) | International Energy includes a pretax impairment charge of $194 million related to certain assets in Central America. |
| (b) | Commercial Portfolio includes a pretax impairment charge of $71 million related to certain equity method investments in wind projects. |
| (c) | Other includes $234 million related to Piedmont Natural Gas (Piedmont) acquisition financing. |
| (d) | International Energy includes a net tax benefit of $95 million resulting from the ability to more efficiently utilize foreign tax credits. |
| (e) | Primarily relates to tax adjustments from previously sold businesses. |
| (f) | See page 12 for a detailed reconciliation of Segment Income / Other Net Expense to Adjusted Earnings. |
3
DUKE ENERGY CORPORATION
Consolidating Statements of Operations
(Unaudited)
Nine Months Ended September 30, 2015 (a) | ||||||||||||||||||
| (in millions) | Regulated Utilities | International Energy | Commercial Portfolio | Other | Eliminations / Adjustments | Duke Energy | ||||||||||||
| Operating Revenues | ||||||||||||||||||
| Regulated electric | $ | 16,670 | $ | — | $ | — | $ | 3 | $ | (109 | ) | $ | 16,564 | |||||
| Nonregulated electric and other | — | 841 | 214 | 75 | 27 | 1,157 | ||||||||||||
| Regulated natural gas | 420 | — | — | — | (4 | ) | 416 | |||||||||||
| Total operating revenues | 17,090 | 841 | 214 | 78 | (86 | ) | 18,137 | |||||||||||
| Operating Expenses | ||||||||||||||||||
| Fuel used in electric generation and purchased power - regulated | 5,775 | — | — | — | — | 5,775 | ||||||||||||
| Fuel used in electric generation and purchased power - nonregulated | — | 262 | 14 | 7 | — | 283 | ||||||||||||
| Cost of natural gas | 117 | 42 | — | — | (1 | ) | 158 | |||||||||||
| Operation, maintenance and other | 3,910 | 247 | 149 | 47 | (79 | ) | 4,274 | |||||||||||
| Depreciation and amortization | 2,096 | 69 | 77 | 99 | — | 2,341 | ||||||||||||
| Property and other taxes | 798 | 5 | 15 | 19 | (1 | ) | 836 | |||||||||||
Impairment charges (b) | 93 | 14 | — | 5 | (1 | ) | 111 | |||||||||||
| Total operating expenses | 12,789 | 639 | 255 | 177 | (82 | ) | 13,778 | |||||||||||
| Gains (Losses) on Sales of Other Assets and Other, net | 10 | (1 | ) | 6 | 16 | — | 31 | |||||||||||
| Operating Income (Loss) | 4,311 | 201 | (35 | ) | (83 | ) | (4 | ) | 4,390 | |||||||||
| Other Income and Expenses | ||||||||||||||||||
| Equity in earnings (losses) of unconsolidated affiliates | (3 | ) | 60 | (4 | ) | 2 | (2 | ) | 53 | |||||||||
| Other income and expenses, net | 190 | 9 | 1 | 6 | (3 | ) | 203 | |||||||||||
| Total Other Income and Expenses | 187 | 69 | (3 | ) | 8 | (5 | ) | 256 | ||||||||||
| Interest Expense | 829 | 66 | 33 | 285 | (5 | ) | 1,208 | |||||||||||
| Income (Loss) from Continuing Operations Before Income Taxes | 3,669 | 204 | (71 | ) | (360 | ) | (4 | ) | 3,438 | |||||||||
Income Tax Expense (Benefit) from Continuing Operations (c) | 1,358 | 44 | (55 | ) | (229 | ) | — | 1,118 | ||||||||||
| Income (Loss) from Continuing Operations | 2,311 | 160 | (16 | ) | (131 | ) | (4 | ) | 2,320 | |||||||||
| Less: Net Income (Loss) Attributable to Noncontrolling Interest | — | 3 | (1 | ) | 8 | — | 10 | |||||||||||
| Segment Income (Loss) / Other Net Expense | $ | 2,311 | $ | 157 | $ | (15 | ) | $ | (139 | ) | $ | (4 | ) | $ | 2,310 | |||
Income from Discontinued Operations, net (d) | 29 | |||||||||||||||||
| Net Income Attributable to Duke Energy Corporation | $ | 2,339 | ||||||||||||||||
| Segment Income (Loss) / Other Net Expense | $ | 2,311 | $ | 157 | $ | (15 | ) | $ | (139 | ) | $ | (4 | ) | $ | 2,310 | |||
| Special Items | 60 | — | 134 | 42 | 4 | 240 | ||||||||||||
Adjusted Earnings (e) | $ | 2,371 | $ | 157 | $ | 119 | $ | (97 | ) | $ | — | $ | 2,550 | |||||
| (a) | Certain prior period amounts have been reclassified to conform to the current year presentation. |
| (b) | Regulated Utilities includes an $85 million pretax charge related to the Edwardsport settlement. |
| (c) | Regulated Utilities includes a tax benefit of $34 million related to the Edwardsport settlement. Commercial Portfolio includes state tax expense of $41 million, resulting from changes to state apportionment factors due to the sale of the nonregulated Midwest generation business, that does not qualify for discontinued operations. |
| (d) | Includes the after-tax impact of $53 million for the agreement in principle reached in a lawsuit related to the nonregulated Midwest generation business. |
| (e) | See page 13 for a detailed reconciliation of Segment Income (Loss) / Other Net Expense to Adjusted Earnings. |
4
DUKE ENERGY CORPORATION
Consolidating Balance Sheets - Assets
(Unaudited)
| September 30, 2016 | ||||||||||||||||||
| (in millions) | Regulated Utilities | International Energy | Commercial Portfolio | Other | Eliminations / Adjustments | Duke Energy | ||||||||||||
| Current Assets | ||||||||||||||||||
| Cash and cash equivalents | $ | 421 | $ | 526 | $ | 8 | $ | 5,224 | $ | — | $ | 6,179 | ||||||
| Receivables, net | 388 | 136 | 19 | 40 | — | 583 | ||||||||||||
| Receivables of variable interest entities, net | 2,111 | — | 23 | 5 | — | 2,139 | ||||||||||||
| Receivables from affiliated companies | 12 | — | 869 | 2,729 | (3,610 | ) | — | |||||||||||
| Notes receivable from affiliated companies | 120 | — | — | — | (120 | ) | — | |||||||||||
| Inventory | 3,240 | 67 | 17 | 26 | 1 | 3,351 | ||||||||||||
| Regulatory assets | 752 | — | — | 101 | — | 853 | ||||||||||||
| Other | 310 | 26 | 109 | 3 | (19 | ) | 429 | |||||||||||
| Total current assets | 7,354 | 755 | 1,045 | 8,128 | (3,748 | ) | 13,534 | |||||||||||
| Investments and Other Assets | ||||||||||||||||||
| Investments in equity method unconsolidated affiliates | 2 | 43 | 534 | 25 | — | 604 | ||||||||||||
| Investments and advances to (from) subsidiaries | 36 | (25 | ) | 6 | 47,365 | (47,382 | ) | — | ||||||||||
| Nuclear decommissioning trust funds | 6,112 | — | — | — | — | 6,112 | ||||||||||||
| Goodwill | 15,950 | 282 | 122 | — | — | 16,354 | ||||||||||||
| Other | 1,871 | 241 | 111 | 1,359 | (634 | ) | 2,948 | |||||||||||
| Total investments and other assets | 23,971 | 541 | 773 | 48,749 | (48,016 | ) | 26,018 | |||||||||||
| Property, Plant and Equipment | ||||||||||||||||||
| Cost | 107,541 | 3,060 | 4,004 | 1,771 | — | 116,376 | ||||||||||||
| Accumulated depreciation and amortization | (36,081 | ) | (1,228 | ) | (533 | ) | (971 | ) | 1 | (38,812 | ) | |||||||
| Generation facilities to be retired, net | 652 | — | — | — | — | 652 | ||||||||||||
| Net property, plant and equipment | 72,112 | 1,832 | 3,471 | 800 | 1 | 78,216 | ||||||||||||
| Regulatory Assets and Deferred Debits | ||||||||||||||||||
| Regulatory assets | 11,440 | — | — | 456 | — | 11,896 | ||||||||||||
| Other | 11 | — | — | 11 | — | 22 | ||||||||||||
| Total regulatory assets and deferred debits | 11,451 | — | — | 467 | — | 11,918 | ||||||||||||
| Total Assets | 114,888 | 3,128 | 5,289 | 58,144 | (51,763 | ) | 129,686 | |||||||||||
| Segment reclassifications, intercompany balances and other | (181 | ) | 25 | (875 | ) | (50,916 | ) | 51,947 | — | |||||||||
| Segment Assets | $ | 114,707 | $ | 3,153 | $ | 4,414 | $ | 7,228 | $ | 184 | $ | 129,686 | ||||||
5
DUKE ENERGY CORPORATION
Consolidating Balance Sheets - Liabilities and Equity
(Unaudited)
| September 30, 2016 | ||||||||||||||||||
| (in millions) | Regulated Utilities | International Energy | Commercial Portfolio | Other | Eliminations / Adjustments | Duke Energy | ||||||||||||
| Current Liabilities | ||||||||||||||||||
| Accounts payable | $ | 1,668 | $ | 62 | $ | 56 | $ | 351 | $ | 1 | $ | 2,138 | ||||||
| Accounts payable to affiliated companies | 3,180 | 136 | 13 | 272 | (3,601 | ) | — | |||||||||||
| Notes payable to affiliated companies | — | — | — | 120 | (120 | ) | — | |||||||||||
| Notes payable and commercial paper | — | — | — | 3,011 | — | 3,011 | ||||||||||||
| Taxes accrued | 707 | 116 | (401 | ) | 214 | — | 636 | |||||||||||
| Interest accrued | 350 | 30 | — | 123 | 1 | 504 | ||||||||||||
| Current maturities of long-term debt | 1,252 | 154 | 193 | 1,602 | — | 3,201 | ||||||||||||
| Asset retirement obligations | 539 | — | — | — | — | 539 | ||||||||||||
| Regulatory liabilities | 316 | — | — | 4 | (1 | ) | 319 | |||||||||||
| Other | 1,285 | 68 | 52 | 351 | (28 | ) | 1,728 | |||||||||||
| Total current liabilities | 9,297 | 566 | (87 | ) | 6,048 | (3,748 | ) | 12,076 | ||||||||||
| Long-Term Debt | 28,530 | 629 | 1,151 | 13,653 | 1 | 43,964 | ||||||||||||
| Long-Term Debt Payable to Affiliated Companies | 625 | — | 9 | — | (634 | ) | — | |||||||||||
| Deferred Credits and Other Liabilities | ||||||||||||||||||
| Deferred income taxes | 15,613 | 105 | 360 | (2,877 | ) | — | 13,201 | |||||||||||
| Investment tax credits | 486 | — | — | — | — | 486 | ||||||||||||
| Accrued pension and other post-retirement benefit costs | 642 | — | — | 388 | — | 1,030 | ||||||||||||
| Asset retirement obligations | 10,200 | 15 | 75 | 1 | — | 10,291 | ||||||||||||
| Regulatory liabilities | 6,196 | — | — | 44 | 1 | 6,241 | ||||||||||||
| Other | 1,120 | 82 | 294 | 355 | — | 1,851 | ||||||||||||
| Total deferred credits and other liabilities | 34,257 | 202 | 729 | (2,089 | ) | 1 | 33,100 | |||||||||||
| Equity | ||||||||||||||||||
| Total Duke Energy Corporation stockholders' equity | 42,179 | 1,685 | 3,467 | 40,541 | (47,383 | ) | 40,489 | |||||||||||
| Noncontrolling interests | — | 46 | 20 | (9 | ) | — | 57 | |||||||||||
| Total equity | 42,179 | 1,731 | 3,487 | 40,532 | (47,383 | ) | 40,546 | |||||||||||
| Total Liabilities and Equity | 114,888 | 3,128 | 5,289 | 58,144 | (51,763 | ) | 129,686 | |||||||||||
| Segment reclassifications, intercompany balances and other | (181 | ) | 25 | (875 | ) | (50,916 | ) | 51,947 | — | |||||||||
| Segment Liabilities and Equity | $ | 114,707 | $ | 3,153 | $ | 4,414 | $ | 7,228 | $ | 184 | $ | 129,686 | ||||||
6
REGULATED UTILITIES
Consolidating Segment Income
(Unaudited)
| Nine Months Ended September 30, 2016 | ||||||||||||||||||||||||
| (in millions) | Duke Energy Carolinas | Duke Energy Progress | Duke Energy Florida | Duke Energy Ohio(a) | Duke Energy Kentucky | Duke Energy Indiana | Eliminations/ Adjustments | Regulated Utilities | ||||||||||||||||
| Operating Revenues | ||||||||||||||||||||||||
| Regulated electric | $ | 5,642 | $ | 4,103 | $ | 3,538 | $ | 791 | $ | 262 | $ | 2,225 | $ | (131 | ) | $ | 16,430 | |||||||
| Regulated natural gas | — | — | — | 296 | 62 | — | — | 358 | ||||||||||||||||
| Total operating revenues | 5,642 | 4,103 | 3,538 | 1,087 | 324 | 2,225 | (131 | ) | 16,788 | |||||||||||||||
| Operating Expenses | ||||||||||||||||||||||||
| Fuel used in electric generation and purchased power | 1,391 | 1,441 | 1,391 | 243 | 97 | 690 | (151 | ) | 5,102 | |||||||||||||||
| Cost of natural gas | — | — | — | 44 | 20 | — | — | 64 | ||||||||||||||||
| Operation, maintenance and other | 1,420 | 1,031 | 601 | 235 | 103 | 512 | 3 | 3,905 | ||||||||||||||||
| Depreciation and amortization | 785 | 520 | 376 | 141 | 33 | 343 | — | 2,198 | ||||||||||||||||
| Property and other taxes | 206 | 120 | 256 | 183 | 11 | 67 | — | 843 | ||||||||||||||||
| Impairment charges | — | — | 4 | — | — | 8 | — | 12 | ||||||||||||||||
| Total operating expenses | 3,802 | 3,112 | 2,628 | 846 | 264 | 1,620 | (148 | ) | 12,124 | |||||||||||||||
| (Losses) Gains on Sales of Other Assets and Other, net | (1 | ) | 2 | — | 2 | — | — | — | 3 | |||||||||||||||
| Operating Income | 1,839 | 993 | 910 | 243 | 60 | 605 | 17 | 4,667 | ||||||||||||||||
| Other Income and Expenses, net | 121 | 47 | 30 | 4 | 2 | 15 | (6 | ) | 213 | |||||||||||||||
| Interest Expense | 316 | 188 | 143 | 51 | 12 | 136 | 2 | 848 | ||||||||||||||||
| Income Before Income Taxes | 1,644 | 852 | 797 | 196 | 50 | 484 | 9 | 4,032 | ||||||||||||||||
| Income Tax Expense | 568 | 287 | 296 | 67 | 15 | 165 | 21 | 1,419 | ||||||||||||||||
Segment Income | $ | 1,076 | $ | 565 | $ | 501 | $ | 129 | $ | 35 | $ | 319 | $ | (12 | ) | $ | 2,613 | |||||||
| (a) | Amounts exclude results from the wholly owned subsidiary, Duke Energy Kentucky. |
7
REGULATED UTILITIES
Consolidating Segment Income
(Unaudited)
| Nine Months Ended September 30, 2015 | ||||||||||||||||||||||||
| (in millions) | Duke Energy Carolinas | Duke Energy Progress | Duke Energy Florida | Duke Energy Ohio(a) | Duke Energy Kentucky | Duke Energy Indiana | Eliminations / Adjustments | Regulated Utilities | ||||||||||||||||
| Operating Revenues | ||||||||||||||||||||||||
| Regulated electric | $ | 5,669 | $ | 4,130 | $ | 3,803 | $ | 725 | $ | 280 | $ | 2,223 | $ | (160 | ) | $ | 16,670 | |||||||
| Regulated natural gas | — | — | — | 339 | 80 | — | 1 | 420 | ||||||||||||||||
| Total operating revenues | 5,669 | 4,130 | 3,803 | 1,064 | 360 | 2,223 | (159 | ) | 17,090 | |||||||||||||||
| Operating Expenses | ||||||||||||||||||||||||
| Fuel used in electric generation and purchased power | 1,553 | 1,608 | 1,665 | 235 | 115 | 779 | (180 | ) | 5,775 | |||||||||||||||
| Cost of natural gas | — | — | — | 82 | 34 | — | 1 | 117 | ||||||||||||||||
| Operation, maintenance and other | 1,424 | 1,046 | 583 | 233 | 99 | 516 | 9 | 3,910 | ||||||||||||||||
| Depreciation and amortization | 779 | 462 | 369 | 137 | 35 | 320 | (6 | ) | 2,096 | |||||||||||||||
| Property and other taxes | 204 | 102 | 265 | 177 | 10 | 41 | (1 | ) | 798 | |||||||||||||||
Impairment charges (b) | — | — | 7 | — | — | 85 | 1 | 93 | ||||||||||||||||
| Total operating expenses | 3,960 | 3,218 | 2,889 | 864 | 293 | 1,741 | (176 | ) | 12,789 | |||||||||||||||
| Gains on Sales of Other Assets and Other, net | — | 2 | — | 7 | 1 | — | — | 10 | ||||||||||||||||
| Operating Income | 1,709 | 914 | 914 | 207 | 68 | 482 | 17 | 4,311 | ||||||||||||||||
| Other Income and Expenses, net | 125 | 49 | 12 | (3 | ) | 1 | 9 | (6 | ) | 187 | ||||||||||||||
| Interest Expense | 313 | 175 | 149 | 47 | 11 | 132 | 2 | 829 | ||||||||||||||||
| Income Before Income Taxes | 1,521 | 788 | 777 | 157 | 58 | 359 | 9 | 3,669 | ||||||||||||||||
Income Tax Expense (c) | 553 | 279 | 274 | 59 | 21 | 131 | 41 | 1,358 | ||||||||||||||||
| Segment Income | $ | 968 | $ | 509 | $ | 503 | $ | 98 | $ | 37 | $ | 228 | $ | (32 | ) | $ | 2,311 | |||||||
| (a) | Amounts exclude results from the wholly owned subsidiary, Duke Energy Kentucky. |
| (b) | The amount for Duke Energy Indiana relates to the Edwardsport settlement. |
| (c) | Duke Energy Indiana includes a $34 million tax benefit related to the Edwardsport settlement. |
8
REGULATED UTILITIES
Consolidating Balance Sheets - Assets
(Unaudited)
| September 30, 2016 | ||||||||||||||||||||||||
| (in millions) | Duke Energy Carolinas | Duke Energy Progress | Duke Energy Florida | Duke Energy Ohio(a) | Duke Energy Kentucky | Duke Energy Indiana | Eliminations/ Adjustments | Regulated Utilities | ||||||||||||||||
| Current Assets | ||||||||||||||||||||||||
| Cash and cash equivalents | $ | 82 | $ | 136 | $ | 10 | $ | 92 | $ | 7 | $ | 94 | $ | — | $ | 421 | ||||||||
| Receivables, net | 129 | 42 | 65 | 62 | 3 | 84 | 3 | 388 | ||||||||||||||||
| Receivables of variable interest entities, net | 780 | 473 | 385 | — | — | — | 473 | 2,111 | ||||||||||||||||
| Receivables from affiliated companies | 88 | 5 | 5 | 42 | 13 | 74 | (215 | ) | 12 | |||||||||||||||
| Notes receivable from affiliated companies | 32 | 65 | — | 47 | — | 38 | (62 | ) | 120 | |||||||||||||||
| Inventory | 1,053 | 998 | 656 | 65 | 45 | 424 | (1 | ) | 3,240 | |||||||||||||||
| Regulatory assets | 256 | 186 | 161 | 13 | 6 | 131 | (1 | ) | 752 | |||||||||||||||
| Other | 22 | 79 | 46 | 34 | 26 | 104 | (1 | ) | 310 | |||||||||||||||
| Total current assets | 2,442 | 1,984 | 1,328 | 355 | 100 | 949 | 196 | 7,354 | ||||||||||||||||
| Investments and Other Assets | ||||||||||||||||||||||||
| Investments in equity method unconsolidated affiliates | — | — | 2 | — | — | — | — | 2 | ||||||||||||||||
| Investments and advances to (from) subsidiaries | 29 | — | 4 | — | — | — | 3 | 36 | ||||||||||||||||
| Nuclear decommissioning trust funds | 3,234 | 2,171 | 708 | — | — | — | (1 | ) | 6,112 | |||||||||||||||
| Goodwill | — | — | — | 920 | — | — | 15,030 | 15,950 | ||||||||||||||||
| Other | 923 | 518 | 290 | 12 | 3 | 170 | (45 | ) | 1,871 | |||||||||||||||
| Total investments and other assets | 4,186 | 2,689 | 1,004 | 932 | 3 | 170 | 14,987 | 23,971 | ||||||||||||||||
| Property, Plant and Equipment | ||||||||||||||||||||||||
| Cost | 40,495 | 28,001 | 16,139 | 5,901 | 2,118 | 14,069 | 818 | 107,541 | ||||||||||||||||
| Accumulated depreciation and amortization | (14,124 | ) | (10,508 | ) | (4,654 | ) | (1,621 | ) | (945 | ) | (4,225 | ) | (4 | ) | (36,081 | ) | ||||||||
| Generation facilities to be retired, net | — | 562 | — | — | — | 90 | — | 652 | ||||||||||||||||
| Net property, plant and equipment | 26,371 | 18,055 | 11,485 | 4,280 | 1,173 | 9,934 | 814 | 72,112 | ||||||||||||||||
| Regulatory Assets and Deferred Debits | ||||||||||||||||||||||||
| Regulatory assets | 3,040 | 3,093 | 2,559 | 434 | 83 | 909 | 1,322 | 11,440 | ||||||||||||||||
| Other | 3 | 2 | 2 | 2 | — | 2 | — | 11 | ||||||||||||||||
| Total regulatory assets and deferred debits | 3,043 | 3,095 | 2,561 | 436 | 83 | 911 | 1,322 | 11,451 | ||||||||||||||||
| Total Assets | 36,042 | 25,823 | 16,378 | 6,003 | 1,359 | 11,964 | 17,319 | 114,888 | ||||||||||||||||
| Intercompany balances and other | (159 | ) | (117 | ) | (65 | ) | (53 | ) | 42 | (46 | ) | 217 | (181 | ) | ||||||||||
| Reportable Segment Assets | $ | 35,883 | $ | 25,706 | $ | 16,313 | $ | 5,950 | $ | 1,401 | $ | 11,918 | $ | 17,536 | $ | 114,707 | ||||||||
| (a) | Excludes the balances of the wholly owned subsidiary, Duke Energy Kentucky. |
9
REGULATED UTILITIES
Consolidating Balance Sheets - Liabilities and Equity
(Unaudited)
| September 30, 2016 | ||||||||||||||||||||||||
| (in millions) | Duke Energy Carolinas | Duke Energy Progress | Duke Energy Florida | Duke Energy Ohio(a) | Duke Energy Kentucky | Duke Energy Indiana | Eliminations/ Adjustments | Regulated Utilities | ||||||||||||||||
| Current Liabilities | ||||||||||||||||||||||||
| Accounts payable | $ | 582 | $ | 319 | $ | 354 | $ | 221 | $ | 23 | $ | 166 | $ | 3 | $ | 1,668 | ||||||||
| Accounts payable to affiliated companies | 149 | 143 | 61 | 1 | 9 | 27 | 2,790 | 3,180 | ||||||||||||||||
| Notes payable to affiliated companies | — | — | 63 | — | — | — | (63 | ) | — | |||||||||||||||
| Taxes accrued | 204 | 91 | 211 | 137 | 10 | 49 | 5 | 707 | ||||||||||||||||
| Interest accrued | 125 | 81 | 58 | 29 | 3 | 54 | — | 350 | ||||||||||||||||
| Current maturities of long-term debt | 468 | 252 | 326 | 3 | 51 | 71 | 81 | 1,252 | ||||||||||||||||
| Asset retirement obligations | 303 | 236 | — | — | — | — | — | 539 | ||||||||||||||||
| Regulatory liabilities | 125 | 129 | 18 | 11 | 2 | 30 | 1 | 316 | ||||||||||||||||
| Other | 417 | 326 | 368 | 61 | 20 | 96 | (3 | ) | 1,285 | |||||||||||||||
| Total current liabilities | 2,373 | 1,577 | 1,459 | 463 | 118 | 493 | 2,814 | 9,297 | ||||||||||||||||
| Long-Term Debt | 8,592 | 6,609 | 5,802 | 1,521 | 287 | 3,566 | 2,153 | 28,530 | ||||||||||||||||
| Long-Term Debt Payable to Affiliated Companies | 300 | 150 | — | — | 25 | 150 | — | 625 | ||||||||||||||||
| Deferred Credits and Other Liabilities | ||||||||||||||||||||||||
| Deferred income taxes | 6,487 | 3,275 | 2,599 | 1,101 | 311 | 1,823 | 17 | 15,613 | ||||||||||||||||
| Investment tax credits | 195 | 148 | 3 | 3 | 1 | 137 | (1 | ) | 486 | |||||||||||||||
| Accrued pension and other post-retirement benefit costs | 93 | 247 | 237 | 36 | 12 | 72 | (55 | ) | 642 | |||||||||||||||
| Asset retirement obligations | 3,622 | 4,623 | 798 | 21 | 86 | 847 | 203 | 10,200 | ||||||||||||||||
| Regulatory liabilities | 2,864 | 1,874 | 478 | 190 | 52 | 738 | — | 6,196 | ||||||||||||||||
| Other | 686 | 23 | 163 | 136 | 28 | 94 | (10 | ) | 1,120 | |||||||||||||||
| Total deferred credits and other liabilities | 13,947 | 10,190 | 4,278 | 1,487 | 490 | 3,711 | 154 | 34,257 | ||||||||||||||||
| Equity | 10,830 | 7,297 | 4,839 | 2,532 | 439 | 4,044 | 12,198 | 42,179 | ||||||||||||||||
| Total Liabilities and Equity | 36,042 | 25,823 | 16,378 | 6,003 | 1,359 | 11,964 | 17,319 | 114,888 | ||||||||||||||||
| Intercompany balances and other | (159 | ) | (117 | ) | (65 | ) | (53 | ) | 42 | (46 | ) | 217 | (181 | ) | ||||||||||
| Reportable Segment Liabilities and Equity | $ | 35,883 | $ | 25,706 | $ | 16,313 | $ | 5,950 | $ | 1,401 | $ | 11,918 | $ | 17,536 | $ | 114,707 | ||||||||
| (a) | Excludes the balances of the wholly owned subsidiary, Duke Energy Kentucky. |
10
REGULATED UTILITIES
Revenues By Customer Class
(Unaudited)
| Nine Months Ended September 30, 2016 | ||||||||||||||||||||||||
| (in millions) | Duke Energy Carolinas | Duke Energy Progress | Duke Energy Florida | Duke Energy Ohio(a) | Duke Energy Kentucky | Duke Energy Indiana | Eliminations / Adjustments | Regulated Utilities | ||||||||||||||||
| Regulated Electric Revenues | ||||||||||||||||||||||||
| Residential | $ | 2,324 | $ | 1,500 | $ | 1,910 | $ | 486 | $ | 100 | $ | 754 | $ | — | $ | 7,074 | ||||||||
| General service | 1,779 | 1,021 | 1,033 | 231 | 104 | 557 | — | 4,725 | ||||||||||||||||
| Industrial | 994 | 485 | 187 | 50 | 41 | 542 | — | 2,299 | ||||||||||||||||
| Wholesale | 340 | 834 | 150 | — | 13 | 265 | — | 1,602 | ||||||||||||||||
| Change in unbilled | 35 | 12 | 28 | 6 | 3 | 12 | — | 96 | ||||||||||||||||
| Other revenues | 170 | 251 | 230 | 18 | 1 | 95 | (131 | ) | 634 | |||||||||||||||
| Total Electric Revenues | $ | 5,642 | $ | 4,103 | $ | 3,538 | $ | 791 | $ | 262 | $ | 2,225 | $ | (131 | ) | $ | 16,430 | |||||||
| Regulated Natural Gas Revenues | ||||||||||||||||||||||||
| Residential | $ | — | $ | — | $ | — | $ | 198 | $ | 45 | $ | — | $ | — | $ | 243 | ||||||||
| General service | — | — | — | 80 | 17 | — | — | 97 | ||||||||||||||||
| Industrial | — | — | — | 10 | 3 | — | — | 13 | ||||||||||||||||
| Change in unbilled | — | — | — | (5 | ) | (3 | ) | — | — | (8 | ) | |||||||||||||
| Other revenues | — | — | — | 13 | — | — | — | 13 | ||||||||||||||||
| Total Natural Gas Revenues | $ | — | $ | — | $ | — | $ | 296 | $ | 62 | $ | — | $ | — | $ | 358 | ||||||||
| Nine Months Ended September 30, 2015 | ||||||||||||||||||||||||
| (in millions) | Duke Energy Carolinas | Duke Energy Progress | Duke Energy Florida | Duke Energy Ohio(a) | Duke Energy Kentucky | Duke Energy Indiana | Eliminations / Adjustments | Regulated Utilities | ||||||||||||||||
| Regulated Electric Revenues | ||||||||||||||||||||||||
| Residential | $ | 2,389 | $ | 1,565 | $ | 2,028 | $ | 458 | $ | 100 | $ | 785 | $ | — | $ | 7,325 | ||||||||
| General service | 1,756 | 1,036 | 1,156 | 225 | 103 | 568 | — | 4,844 | ||||||||||||||||
| Industrial | 1,007 | 508 | 219 | 46 | 41 | 562 | — | 2,383 | ||||||||||||||||
| Wholesale | 335 | 778 | 187 | — | 29 | 228 | — | 1,557 | ||||||||||||||||
| Change in unbilled | (50 | ) | (16 | ) | 15 | 2 | — | (19 | ) | — | (68 | ) | ||||||||||||
| Other revenues | 232 | 259 | 198 | (6 | ) | 7 | 99 | (160 | ) | 629 | ||||||||||||||
| Total Electric Revenues | $ | 5,669 | $ | 4,130 | $ | 3,803 | $ | 725 | $ | 280 | $ | 2,223 | $ | (160 | ) | $ | 16,670 | |||||||
| Regulated Natural Gas Revenues | ||||||||||||||||||||||||
| Residential | $ | — | $ | — | $ | — | $ | 228 | $ | 58 | $ | — | $ | — | $ | 286 | ||||||||
| General service | — | — | — | 95 | 23 | — | — | 118 | ||||||||||||||||
| Industrial | — | — | — | 13 | 4 | — | — | 17 | ||||||||||||||||
| Wholesale | — | — | — | — | — | — | — | — | ||||||||||||||||
| Change in unbilled | — | — | — | (8 | ) | (5 | ) | — | — | (13 | ) | |||||||||||||
| Other revenues | — | — | — | 11 | — | — | 1 | 12 | ||||||||||||||||
| Total Natural Gas Revenues | $ | — | $ | — | $ | — | $ | 339 | $ | 80 | $ | — | $ | 1 | $ | 420 | ||||||||
(a) Amounts exclude results from the wholly owned subsidiary, Duke Energy Kentucky.
11
DUKE ENERGY CORPORATION
REPORTED TO ADJUSTED EARNINGS RECONCILIATION
Nine Months Ended September 30, 2016
(Dollars in millions, except per-share amounts)
| Special Items | ||||||||||||||||||||||||||||||||
| Reported Earnings | Costs to Achieve, Mergers | International Impairment | Cost Savings Initiatives | Commercial Renewables Impairment | Discontinued Operations | Total Adjustments | Adjusted Earnings | |||||||||||||||||||||||||
| SEGMENT INCOME | ||||||||||||||||||||||||||||||||
| Regulated Utilities | $ | 2,613 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 2,613 | ||||||||||||||||
| International Energy | 85 | — | 145 | B | — | — | — | 145 | 230 | |||||||||||||||||||||||
| Commercial Portfolio | 20 | — | — | — | 45 | D | — | 45 | 65 | |||||||||||||||||||||||
| Total Reportable Segment Income | 2,718 | — | 145 | — | 45 | — | 190 | 2,908 | ||||||||||||||||||||||||
| Other | (463 | ) | 195 | A | — | 39 | C | — | — | 234 | (229 | ) | ||||||||||||||||||||
| Total Reportable Segment Income and Other Net Expense | 2,255 | 195 | 145 | 39 | 45 | — | 424 | 2,679 | ||||||||||||||||||||||||
| Discontinued Operations | 124 | — | — | — | — | (124 | ) | E | (124 | ) | — | |||||||||||||||||||||
| Net Income Attributable to Duke Energy Corporation | $ | 2,379 | $ | 195 | $ | 145 | $ | 39 | $ | 45 | $ | (124 | ) | $ | 300 | $ | 2,679 | |||||||||||||||
| EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, BASIC | $ | 3.45 | $ | 0.27 | $ | 0.21 | $ | 0.06 | $ | 0.07 | $ | (0.18 | ) | $ | 0.43 | $ | 3.88 | |||||||||||||||
| EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, DILUTED | $ | 3.44 | $ | 0.28 | $ | 0.21 | $ | 0.06 | $ | 0.07 | $ | (0.18 | ) | $ | 0.44 | $ | 3.88 | |||||||||||||||
A - Net of $120 million tax benefit. Includes $1 million recorded within Operating Revenues, $80 million recorded within Operating Expenses and $234 million recorded within Interest Expense on the Condensed Consolidated Statements of Operations. The interest expense primarily relates to losses on forward-starting interest rate swaps associated with the Piedmont acquisition financing.
B - Net of $49 million tax benefit. Impairment of certain assets in Central America recorded within Impairment Charges on the Condensed Consolidated Statements of Operations.
C - Net of $24 million tax benefit. Primarily consists of severance costs recorded within Operation, maintenance and other on the Condensed Consolidated Statements of Operations.
D - Net of $26 million tax benefit. Other-than-temporary impairment included within Equity in earnings (losses) of unconsolidated affiliates on the Condensed Consolidated Statements of Operations.
E - Tax adjustments related to previously disposed businesses recorded in Income (Loss) From Discontinued Operations, net of tax on the Condensed Consolidated Statements of Operations.
Weighted Average Shares (reported and adjusted) - in millions
Basic 689
Diluted 690
12
DUKE ENERGY CORPORATION
REPORTED TO ADJUSTED EARNINGS RECONCILIATION
Nine Months Ended September 30, 2015
(Dollars in millions, except per-share amounts)
| Special Items | ||||||||||||||||||||||||||||||||||||
| Reported Earnings | Costs to Achieve, Progress Merger | Edwardsport Settlement | Midwest Generation Operations | Ash Basin Settlement | Economic Hedges (Mark-to-Market) * | Discontinued Operations | Total Adjustments | Adjusted Earnings | ||||||||||||||||||||||||||||
| SEGMENT INCOME | ||||||||||||||||||||||||||||||||||||
| Regulated Utilities | $ | 2,311 | $ | — | $ | 56 | B | $ | — | $ | 4 | D | $ | — | $ | — | $ | 60 | $ | 2,371 | ||||||||||||||||
| International Energy | 157 | — | — | — | — | — | — | — | 157 | |||||||||||||||||||||||||||
| Commercial Portfolio | (15 | ) | — | — | 94 | C | — | (1 | ) | E | 41 | F | 134 | 119 | ||||||||||||||||||||||
| Total Reportable Segment Income | 2,453 | — | 56 | 94 | 4 | (1 | ) | 41 | 194 | 2,647 | ||||||||||||||||||||||||||
| Other | (139 | ) | 42 | A | — | — | — | — | — | 42 | (97 | ) | ||||||||||||||||||||||||
| Intercompany Eliminations | (4 | ) | — | — | — | — | — | 4 | G | 4 | — | |||||||||||||||||||||||||
| Total Reportable Segment Income and Other Net Expense | 2,310 | 42 | 56 | 94 | 4 | (1 | ) | 45 | 240 | 2,550 | ||||||||||||||||||||||||||
| Discontinued Operations | 29 | — | — | (94 | ) | C | — | — | 65 | H | (29 | ) | — | |||||||||||||||||||||||
| Net Income Attributable to Duke Energy Corporation | $ | 2,339 | $ | 42 | $ | 56 | $ | — | $ | 4 | $ | (1 | ) | $ | 110 | $ | 211 | $ | 2,550 | |||||||||||||||||
| EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, BASIC | $ | 3.36 | $ | 0.05 | $ | 0.08 | $ | — | $ | 0.01 | $ | — | $ | 0.16 | $ | 0.30 | $ | 3.66 | ||||||||||||||||||
| EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, DILUTED | $ | 3.36 | $ | 0.05 | $ | 0.08 | $ | — | $ | 0.01 | $ | — | $ | 0.16 | $ | 0.30 | $ | 3.66 | ||||||||||||||||||
A - Net of $25 million tax benefit. Recorded within Operating Expenses on the Condensed Consolidated Statements of Operations.
B - Net of $34 million tax benefit. $85 million recorded within Impairment charges and $5 million recorded within Other income and expenses, net on the Duke Energy Indiana Condensed Consolidated Statements of Operations.
C - Operating results of the nonregulated Midwest generation business that had been classified from discontinued operations after adjustment for special items and economic hedges (net of $53 million tax benefit).
D - Net of $3 million tax benefit. Recorded within Operation, maintenance and other on the Condensed Consolidated Statements of Operations. Includes $1 million and $6 million at Duke Energy Carolinas and Duke Energy Progress, respectively.
E - Recorded within Operating Revenues on the Condensed Consolidated Statements of Operations.
F - State tax expense resulting from the completion of the sale of the nonregulated Midwest generation business.
G - Reverses the impact on eliminations of classifying the nonregulated Midwest generation business as discontinued operations.
H - Recorded in (Loss) Income From Discontinued Operations, net of tax on the Condensed Consolidated Statements of Operations, and includes the impact of a litigation reserve related to the nonregulated Midwest generation business.
Weighted Average Shares (reported and adjusted) - in millions
Basic 696
Diluted 696
* Mark-to-market adjustments reflect the impact of derivative contracts, which are used in Duke Energy’s hedging of a portion of the economic value of its generation assets in the Commercial Portfolio segment. The mark-to-market impact of derivative contracts is recognized in GAAP earnings immediately as such derivative contracts do not qualify for hedge accounting or regulatory treatment. The economic value of generation assets is subject to fluctuations in fair value due to market price volatility of input and output commodities (e.g. coal, electricity, natural gas). Economic hedging involves both purchases and sales of those input and output commodities related to generation assets. Operations of the generation assets are accounted for under the accrual method. Management believes excluding impacts of mark-to-market changes of the derivative contracts from adjusted earnings until settlement better matches the financial impacts of the derivative contract with the portion of economic value of the underlying hedged asset. Management believes that the presentation of adjusted diluted EPS Attributable to Duke Energy Corporation provides useful information to investors, as it provides them an additional relevant comparison of Duke Energy Corporation's performance across periods.
13
DUKE ENERGY CORPORATION
Non-GAAP Financial Measures
Management evaluates financial performance in part based on non-GAAP financial measures, adjusted earnings and adjusted diluted EPS. These items represent income from continuing operations net of income (loss) attributable to noncontrolling interests, adjusted for the dollar and per-share impact of special items. Special items represent certain charges and credits, which management believes are not indicative of our ongoing performance, and are discussed below. Management believes the presentation of adjusted earnings and adjusted diluted EPS provides useful information to investors, as it provides them with an additional relevant comparison of Duke Energy’s performance across periods. Management uses these non-GAAP financial measures for planning and forecasting and for reporting results to the Board of Directors, employees, stockholders, analysts and investors concerning Duke Energy’s financial performance. Adjusted diluted EPS is also used as a basis for employee incentive bonuses. The most directly comparable GAAP measures for adjusted earnings and adjusted diluted EPS are Net Income Attributable to Duke Energy Corporation and Diluted EPS Attributable to Duke Energy Corporation common stockholders.
Special items included in the periods presented include the following:
| • | Costs to achieve mergers and International impairment represent charges that result from potential or completed strategic acquisitions and divestitures that do not reflect ongoing costs. |
| • | Cost savings initiatives represents severance charges related to company-wide initiatives to standardize processes and systems, leverage technology and workforce optimization, which are not representative of ongoing costs. |
| • | Commercial Renewables Impairment represents an other-than-temporary impairment of certain equity method investments. Management believes the impairment does not reflect an ongoing cost. |
| • | Edwardsport settlement and Ash basin settlement represent charges related to settlement agreements with regulators and other governmental entities and do not represent ongoing costs. |
| • | Midwest generation operations represents the operating results of the nonregulated Midwest generation business and Duke Energy Retail Sales (collectively, the Midwest Generation Disposal Group), which have been classified as discontinued operations. Management believes inclusion of the Midwest Generation Disposal Group's operating results within adjusted earnings and adjusted diluted EPS results in a better reflection of Duke Energy's financial performance during the period. |
Due to the forward-looking nature of any forecasted adjusted earnings guidance, information to reconcile this non-GAAP financial measure to the most directly comparable GAAP financial measure is not available at this time, as management is unable to project all special items for future periods (such as legal settlements, the impact of regulatory orders, or asset impairments).
Management evaluates segment performance based on segment income and other net expense. Segment income is defined as income from continuing operations net of income attributable to noncontrolling interests. Segment income includes intercompany revenues and expenses that are eliminated in the Condensed Consolidated Financial Statements. Management also uses adjusted segment income as a measure of historical and anticipated future segment performance. Adjusted segment income is a non-GAAP financial measure, as it is based upon segment income adjusted for special items, which are discussed above. Management believes the presentation of adjusted segment income provides useful information to investors, as it provides them with an additional relevant comparison of a segment’s performance across periods. The most directly comparable GAAP measure for adjusted segment income or adjusted other net expense is segment income and other net expense.
Due to the forward-looking nature of any forecasted adjusted segment income or adjusted Other net expenses and any related growth rates for future periods, information to reconcile these non-GAAP financial measures to the most directly comparable GAAP financial measures is not available at this time, as the company is unable to forecast all special items for future periods, as discussed above.
Duke Energy’s adjusted earnings, adjusted diluted EPS, and adjusted segment income may not be comparable to similarly titled measures of another company because other entities may not calculate the measures in the same manner.
14