4th Quarter 2015 Statistical Supplement
| Table of Contents | ||||
| DUKE ENERGY CORPORATION (Unaudited) | DUKE ENERGY MONEYPOOL SUPPLEMENT (Unaudited) | |||
| Consolidating Statements of Operations | Schedule of Moneypool Balances | |||
| Consolidating Balance Sheets | ||||
| Non-GAAP Disclosures (Unaudited) | ||||
| REGULATED UTILITIES (Unaudited) | Adjusted to Reported Earnings Reconciliations | |||
| Consolidating Segment Income | Non-GAAP Financial Measures | |||
| Consolidating Balance Sheets | ||||
| Revenues by Customer Class | ||||
| DUKE ENERGY OHIO SUPPLEMENT (Unaudited) | ||||
| Consolidating Statements of Operations | ||||
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.
DUKE ENERGY CORPORATION
Consolidating Statements of Operations
(Unaudited)
| Twelve Months Ended December 31, 2015 | ||||||||||||||||||
| (in millions) | Regulated Utilities | International Energy | Commercial Portfolio | Other | Eliminations / Adjustments | Duke Energy | ||||||||||||
| Operating Revenues | ||||||||||||||||||
| Regulated electric | $ | 21,521 | $ | — | $ | — | $ | 4 | $ | (146 | ) | $ | 21,379 | |||||
| Nonregulated electric and other | — | 1,088 | 301 | 119 | 36 | 1,544 | ||||||||||||
| Regulated natural gas | 541 | — | — | — | (5 | ) | 536 | |||||||||||
| Total operating revenues | 22,062 | 1,088 | 301 | 123 | (115 | ) | 23,459 | |||||||||||
| Operating Expenses | ||||||||||||||||||
| Fuel used in electric generation and purchased power - regulated | 7,308 | — | — | — | — | 7,308 | ||||||||||||
| Fuel used in electric generation and purchased power - nonregulated | — | 306 | 14 | 34 | — | 354 | ||||||||||||
| Cost of natural gas | 141 | 53 | — | — | 1 | 195 | ||||||||||||
| Operation, maintenance and other | 5,260 | 333 | 216 | 173 | (111 | ) | 5,871 | |||||||||||
| Depreciation and amortization | 2,814 | 92 | 104 | 134 | — | 3,144 | ||||||||||||
| Property and other taxes | 1,074 | 7 | 19 | 35 | — | 1,135 | ||||||||||||
Impairment charges(a) | 101 | 14 | — | 6 | (1 | ) | 120 | |||||||||||
| Total operating expenses | 16,698 | 805 | 353 | 382 | (111 | ) | 18,127 | |||||||||||
| Gains on Sales of Other Assets and Other, net | 11 | 6 | 1 | 17 | — | 35 | ||||||||||||
| Operating Income (Loss) | 5,375 | 289 | (51 | ) | (242 | ) | (4 | ) | 5,367 | |||||||||
Other Income and Expenses, net(b) | 262 | 101 | 6 | 20 | (6 | ) | 383 | |||||||||||
| Interest Expense | 1,097 | 85 | 44 | 393 | (6 | ) | 1,613 | |||||||||||
| Income (Loss) from Continuing Operations Before Income Taxes | 4,540 | 305 | (89 | ) | (615 | ) | (4 | ) | 4,137 | |||||||||
Income Tax Expense (Benefit) from Continuing Operations(c) | 1,647 | 74 | (92 | ) | (303 | ) | — | 1,326 | ||||||||||
| Income (Loss) from Continuing Operations | 2,893 | 231 | 3 | (312 | ) | (4 | ) | 2,811 | ||||||||||
| Less: Net Income (Loss) Attributable to Noncontrolling Interest | — | 6 | (1 | ) | 10 | — | 15 | |||||||||||
| Segment Income / Other Net Expense | $ | 2,893 | $ | 225 | $ | 4 | $ | (322 | ) | $ | (4 | ) | $ | 2,796 | ||||
Income from Discontinued Operations, net of tax(d) | 20 | |||||||||||||||||
| Net Income Attributable to Duke Energy Corporation | $ | 2,816 | ||||||||||||||||
| Segment Income / Other Net Expense | $ | 2,893 | $ | 225 | $ | 4 | $ | (322 | ) | $ | (4 | ) | $ | 2,796 | ||||
| Special Items, Economic Hedges, and Discontinued Operations | 79 | — | 136 | 137 | 4 | 356 | ||||||||||||
Adjusted Earnings(e) | $ | 2,972 | $ | 225 | $ | 140 | $ | (185 | ) | $ | — | $ | 3,152 | |||||
| (a) | Regulated Utilities includes a pretax charge of $88 million related to the Edwardsport settlement. |
| (b) | International Energy includes Equity in earnings of unconsolidated affiliates of $74 million, net of tax. |
| (c) | The amount for Commercial Portfolio includes a tax charge of $41 million resulting from the completion of the sale of the nonregulated Midwest generation business. |
| (d) | Includes the after-tax charge of $53 million for the litigation reserve related to a settlement agreement reached in a lawsuit related to the nonregulated Midwest generation business. |
| (e) | See page 15 for a detailed reconciliation of Segment Income / Other Net Expense to Adjusted Earnings. |
3
DUKE ENERGY CORPORATION
Consolidating Statements of Operations
(Unaudited)
| Twelve Months Ended December 31, 2014 | ||||||||||||||||||
| (in millions) | Regulated Utilities | International Energy | Commercial Portfolio | Other | Eliminations / Adjustments | Duke Energy | ||||||||||||
| Operating Revenues | ||||||||||||||||||
| Regulated electric | $ | 21,693 | $ | — | $ | — | $ | (2 | ) | $ | (141 | ) | $ | 21,550 | ||||
| Nonregulated electric and other | — | 1,417 | 255 | 107 | 23 | 1,802 | ||||||||||||
| Regulated natural gas | 578 | — | — | — | (5 | ) | 573 | |||||||||||
| Total operating revenues | 22,271 | 1,417 | 255 | 105 | (123 | ) | 23,925 | |||||||||||
| Operating Expenses | ||||||||||||||||||
| Fuel used in electric generation and purchased power - regulated | 7,686 | — | — | — | — | 7,686 | ||||||||||||
| Fuel used in electric generation and purchased power - nonregulated | — | 486 | 24 | 26 | (3 | ) | 533 | |||||||||||
| Cost of natural gas | 185 | 63 | — | — | — | 248 | ||||||||||||
Operation, maintenance and other(a) | 5,205 | 352 | 212 | 197 | (110 | ) | 5,856 | |||||||||||
| Depreciation and amortization | 2,759 | 97 | 92 | 118 | — | 3,066 | ||||||||||||
| Property and other taxes | 1,189 | 9 | 19 | (4 | ) | — | 1,213 | |||||||||||
Impairment charges(b) | 2 | — | 94 | (15 | ) | — | 81 | |||||||||||
| Total operating expenses | 17,026 | 1,007 | 441 | 322 | (113 | ) | 18,683 | |||||||||||
| Gains on Sales of Other Assets and Other, net | 4 | 6 | — | 6 | — | 16 | ||||||||||||
| Operating Income (Loss) | 5,249 | 416 | (186 | ) | (211 | ) | (10 | ) | 5,258 | |||||||||
Other Income and Expenses, net(c) | 267 | 190 | 18 | 45 | (22 | ) | 498 | |||||||||||
| Interest Expense | 1,093 | 93 | 58 | 400 | (22 | ) | 1,622 | |||||||||||
| Income (Loss) from Continuing Operations Before Income Taxes | 4,423 | 513 | (226 | ) | (566 | ) | (10 | ) | 4,134 | |||||||||
Income Tax Expense (Benefit) from Continuing Operations(d) | 1,628 | 449 | (171 | ) | (237 | ) | — | 1,669 | ||||||||||
| Income (Loss) from Continuing Operations | 2,795 | 64 | (55 | ) | (329 | ) | (10 | ) | 2,465 | |||||||||
| Less: Net Income Attributable to Noncontrolling Interest | — | 9 | — | 5 | — | 14 | ||||||||||||
| Segment Income (Loss) / Other Net Expense | $ | 2,795 | $ | 55 | $ | (55 | ) | $ | (334 | ) | $ | (10 | ) | $ | 2,451 | |||
| Loss from Discontinued Operations, Net of tax | (568 | ) | ||||||||||||||||
| Net Income Attributable to Duke Energy Corporation | $ | 1,883 | ||||||||||||||||
| Segment Income (Loss) / Other Net Expense | $ | 2,795 | $ | 55 | $ | (55 | ) | $ | (334 | ) | $ | (10 | ) | $ | 2,451 | |||
| Special Items, Economic Hedges, and Discontinued Operations | 102 | 373 | 164 | 118 | 10 | 767 | ||||||||||||
Adjusted Earnings(e) | $ | 2,897 | $ | 428 | $ | 109 | $ | (216 | ) | $ | — | $ | 3,218 | |||||
| (a) | Regulated Utilities includes a ligation reserve of $102 million related to the federal grand jury investigation of the February 2014 Dan River coal ash spill and ash basin operations at other North Carolina coal plants. |
| (b) | The amount for Commercial Portfolio includes an impairment taken related to OVEC. |
| (c) | International Energy includes Equity in earnings of unconsolidated affiliates of $120 million, net of tax. |
| (d) | International Energy includes a tax adjustment of $373 million related to a dividend declaration of historical undistributed earnings. |
| (e) | See page 16 for a detailed reconciliation of Segment Income (Loss) / Other Net Expense to Adjusted Earnings. |
4
DUKE ENERGY CORPORATION
Consolidating Balance Sheets - Assets
(Unaudited)
| December 31, 2015 | ||||||||||||||||||
| (in millions) | Regulated Utilities | International Energy | Commercial Portfolio | Other | Eliminations / Adjustments | Duke Energy | ||||||||||||
| Current Assets | ||||||||||||||||||
| Cash and cash equivalents | $ | 67 | $ | 534 | $ | 18 | $ | 238 | $ | — | $ | 857 | ||||||
| Receivables, net | 453 | 197 | 5 | 48 | — | 703 | ||||||||||||
| Restricted receivables of variable interest entities, net | 1,708 | — | 20 | 20 | — | 1,748 | ||||||||||||
| Receivables from affiliated companies | 117 | — | 527 | 3,876 | (4,520 | ) | — | |||||||||||
| Notes receivable from affiliated companies | 103 | — | — | 1,132 | (1,235 | ) | — | |||||||||||
| Inventory | 3,703 | 65 | 18 | 24 | — | 3,810 | ||||||||||||
| Regulatory assets | 795 | — | — | 82 | — | 877 | ||||||||||||
| Other | 383 | 51 | 118 | (225 | ) | — | 327 | |||||||||||
| Total current assets | 7,329 | 847 | 706 | 5,195 | (5,755 | ) | 8,322 | |||||||||||
| Investments and Other Assets | ||||||||||||||||||
| Investments in equity method unconsolidated affiliates | 2 | 39 | 433 | 25 | — | 499 | ||||||||||||
| Investments and advances (from) to subsidiaries | (53 | ) | (23 | ) | (63 | ) | 49,810 | (49,671 | ) | — | ||||||||
| Nuclear decommissioning trust funds | 5,825 | — | — | — | — | 5,825 | ||||||||||||
| Goodwill | 15,950 | 270 | 122 | — | 1 | 16,343 | ||||||||||||
| Other | 1,970 | 185 | 124 | 1,237 | (474 | ) | 3,042 | |||||||||||
| Total investments and other assets | 23,694 | 471 | 616 | 51,072 | (50,144 | ) | 25,709 | |||||||||||
| Property, Plant and Equipment | ||||||||||||||||||
| Cost | 104,684 | 2,860 | 3,591 | 1,691 | — | 112,826 | ||||||||||||
| Accumulated depreciation and amortization | (35,374 | ) | (930 | ) | (439 | ) | (922 | ) | — | (37,665 | ) | |||||||
| Generation facilities to be retired, net | 548 | — | — | — | — | 548 | ||||||||||||
| Net property, plant and equipment | 69,858 | 1,930 | 3,152 | 769 | — | 75,709 | ||||||||||||
| Regulatory Assets and Deferred Debits | ||||||||||||||||||
| Regulatory assets | 10,834 | — | — | 539 | — | 11,373 | ||||||||||||
| Other | 13 | — | — | 30 | — | 43 | ||||||||||||
| Total regulatory assets and deferred debits | 10,847 | — | — | 569 | — | 11,416 | ||||||||||||
| Total Assets | 111,728 | 3,248 | 4,474 | 57,605 | (55,899 | ) | 121,156 | |||||||||||
| Segment reclassifications, intercompany balances and other | (166 | ) | 23 | (464 | ) | (55,480 | ) | 56,087 | — | |||||||||
| Reportable Segment Assets | $ | 111,562 | $ | 3,271 | $ | 4,010 | $ | 2,125 | $ | 188 | $ | 121,156 | ||||||
5
DUKE ENERGY CORPORATION
Consolidating Balance Sheets - Liabilities and Equity
(Unaudited)
| December 31, 2015 | ||||||||||||||||||
| (in millions) | Regulated Utilities | International Energy | Commercial Portfolio | Other | Eliminations / Adjustments | Duke Energy | ||||||||||||
| Current Liabilities | ||||||||||||||||||
| Accounts payable | $ | 1,867 | $ | 51 | $ | 106 | $ | 376 | $ | — | $ | 2,400 | ||||||
| Accounts payable to affiliated companies | 3,255 | 971 | 77 | 119 | (4,422 | ) | — | |||||||||||
| Notes payable to affiliated companies | 981 | — | — | 103 | (1,084 | ) | — | |||||||||||
| Notes payable and commercial paper | — | — | — | 3,633 | — | 3,633 | ||||||||||||
| Taxes accrued | 419 | 66 | (212 | ) | 75 | — | 348 | |||||||||||
| Interest accrued | 307 | 19 | — | 104 | — | 430 | ||||||||||||
| Current maturities of long-term debt | 1,101 | 48 | 108 | 817 | — | 2,074 | ||||||||||||
| Regulatory liabilities | 400 | — | — | — | — | 400 | ||||||||||||
| Other | 1,552 | 109 | 39 | 515 | (100 | ) | 2,115 | |||||||||||
| Total current liabilities | 9,882 | 1,264 | 118 | 5,742 | (5,606 | ) | 11,400 | |||||||||||
| Long-Term Debt | 25,152 | 653 | 968 | 10,722 | — | 37,495 | ||||||||||||
| Long-Term Debt Payable to Affiliated Companies | 625 | — | — | — | (625 | ) | — | |||||||||||
| Deferred Credits and Other Liabilities | ||||||||||||||||||
| Deferred income taxes | 14,767 | (565 | ) | 360 | (1,857 | ) | — | 12,705 | ||||||||||
| Investment tax credits | 472 | — | — | — | — | 472 | ||||||||||||
| Accrued pension and other post-retirement benefit costs | 688 | 1 | — | 399 | — | 1,088 | ||||||||||||
| Asset retirement obligations | 10,185 | 15 | 63 | 1 | — | 10,264 | ||||||||||||
| Regulatory liabilities | 6,189 | — | — | 66 | — | 6,255 | ||||||||||||
| Other | 1,033 | 74 | 254 | 345 | — | 1,706 | ||||||||||||
| Total deferred credits and other liabilities | 33,334 | (475 | ) | 677 | (1,046 | ) | — | 32,490 | ||||||||||
| Equity | ||||||||||||||||||
| Total Duke Energy Corporation stockholders' equity | 42,735 | 1,769 | 2,702 | 42,203 | (49,682 | ) | 39,727 | |||||||||||
| Noncontrolling interests | — | 37 | 9 | (16 | ) | 14 | 44 | |||||||||||
Total equity(a) | 42,735 | 1,806 | 2,711 | 42,187 | (49,668 | ) | 39,771 | |||||||||||
| Total Liabilities and Equity | 111,728 | 3,248 | 4,474 | 57,605 | (55,899 | ) | 121,156 | |||||||||||
| Segment reclassifications, intercompany balances and other | (166 | ) | 23 | (464 | ) | (55,480 | ) | 56,087 | — | |||||||||
| Reportable Segment Liabilities and Equity | $ | 111,562 | $ | 3,271 | $ | 4,010 | $ | 2,125 | $ | 188 | $ | 121,156 | ||||||
| (a) | As of December 31, 2015, the International Energy segment had a carrying value of approximately $2.7 billion, adjusted to include the cumulative foreign currency translation losses currently classified as accumulated other comprehensive income. |
6
REGULATED UTILITIES
Consolidating Segment Income
(Unaudited)
| Twelve Months Ended December 31, 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 | $ | 7,229 | $ | 5,290 | $ | 4,977 | $ | 973 | $ | 359 | $ | 2,890 | $ | (197 | ) | $ | 21,521 | |||||||
| Regulated natural gas | — | — | — | 438 | 103 | — | — | 541 | ||||||||||||||||
| Total operating revenues | 7,229 | 5,290 | 4,977 | 1,411 | 462 | 2,890 | (197 | ) | 22,062 | |||||||||||||||
| Operating Expenses | — | |||||||||||||||||||||||
| Fuel used in electric generation and purchased power | 1,881 | 2,029 | 2,195 | 303 | 143 | 982 | (225 | ) | 7,308 | |||||||||||||||
| Cost of natural gas | — | — | — | 99 | 42 | — | — | 141 | ||||||||||||||||
| Operation, maintenance and other | 1,923 | 1,402 | 810 | 315 | 133 | 666 | 11 | 5,260 | ||||||||||||||||
| Depreciation and amortization | 1,044 | 643 | 473 | 182 | 44 | 434 | (6 | ) | 2,814 | |||||||||||||||
| Property and other taxes | 269 | 140 | 352 | 241 | 13 | 61 | (2 | ) | 1,074 | |||||||||||||||
Impairment charges(b) | 1 | 5 | 7 | — | — | 88 | — | 101 | ||||||||||||||||
| Total operating expenses | 5,118 | 4,219 | 3,837 | 1,140 | 375 | 2,231 | (222 | ) | 16,698 | |||||||||||||||
| (Losses) Gains on Sales of Other Assets and Other, net | (1 | ) | 3 | — | 8 | — | 1 | — | 11 | |||||||||||||||
| Operating Income | 2,110 | 1,074 | 1,140 | 279 | 87 | 660 | 25 | 5,375 | ||||||||||||||||
Other Income and Expenses, net(c) | 160 | 71 | 24 | 7 | 1 | 11 | (12 | ) | 262 | |||||||||||||||
| Interest Expense | 412 | 235 | 198 | 64 | 14 | 176 | (2 | ) | 1,097 | |||||||||||||||
| Income from Continuing Operations Before Income Taxes | 1,858 | 910 | 966 | 222 | 74 | 495 | 15 | 4,540 | ||||||||||||||||
| Income Tax Expense | 682 | 312 | 351 | 77 | 28 | 169 | 28 | 1,647 | ||||||||||||||||
| Segment Income | $ | 1,176 | $ | 598 | $ | 615 | $ | 145 | $ | 46 | $ | 326 | $ | (13 | ) | $ | 2,893 | |||||||
| Special Items | 12 | 5 | 1 | 1 | — | 60 | — | 79 | ||||||||||||||||
Adjusted Earnings(d) | $ | 1,188 | $ | 603 | $ | 616 | $ | 146 | $ | 46 | $ | 386 | $ | (13 | ) | $ | 2,972 | |||||||
| (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) | Includes an equity component of allowance for funds used during construction of $96 million for Duke Energy Carolinas, $47 million for Duke Energy Progress, $7 million for Duke Energy Florida, $3 million for Duke Energy Ohio, and $11 million for Duke Energy Indiana. |
| (d) | See page 15 for a detailed reconciliation of Regulated Utilities Segment Income to Adjusted Earnings. |
7
REGULATED UTILITIES
Consolidating Segment Income
(Unaudited)
| Twelve Months Ended December 31, 2014 | ||||||||||||||||||||||||
| (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 | $ | 7,356 | $ | 5,176 | $ | 4,975 | $ | 947 | $ | 369 | $ | 3,175 | $ | (305 | ) | $ | 21,693 | |||||||
| Regulated natural gas | — | — | — | 454 | 124 | — | — | 578 | ||||||||||||||||
| Total operating revenues | 7,356 | 5,176 | 4,975 | 1,401 | 493 | 3,175 | (305 | ) | 22,271 | |||||||||||||||
| Operating Expenses | ||||||||||||||||||||||||
| Fuel used in electric generation and purchased power | 2,118 | 2,025 | 2,158 | 287 | 172 | 1,259 | (333 | ) | 7,686 | |||||||||||||||
| Cost of natural gas | — | — | — | 125 | 60 | — | — | 185 | ||||||||||||||||
Operation, maintenance and other(b) | 1,890 | 1,413 | 819 | 287 | 133 | 652 | 11 | 5,205 | ||||||||||||||||
| Depreciation and amortization | 1,009 | 582 | 545 | 167 | 44 | 413 | (1 | ) | 2,759 | |||||||||||||||
| Property and other taxes | 316 | 174 | 343 | 216 | 14 | 128 | (2 | ) | 1,189 | |||||||||||||||
| Impairment charges | — | — | 2 | — | — | — | — | 2 | ||||||||||||||||
| Total operating expenses | 5,333 | 4,194 | 3,867 | 1,082 | 423 | 2,452 | (325 | ) | 17,026 | |||||||||||||||
| Gains on Sales of Other Assets and Other, net | — | 3 | 1 | 1 | — | — | (1 | ) | 4 | |||||||||||||||
| Operating Income | 2,023 | 985 | 1,109 | 320 | 70 | 723 | 19 | 5,249 | ||||||||||||||||
Other Income and Expenses, net(c) | 172 | 51 | 20 | 8 | 2 | 22 | (8 | ) | 267 | |||||||||||||||
| Interest Expense | 407 | 234 | 201 | 65 | 16 | 171 | (1 | ) | 1,093 | |||||||||||||||
| Income from Continuing Operations Before Income Taxes | 1,788 | 802 | 928 | 263 | 56 | 574 | 12 | 4,423 | ||||||||||||||||
| Income Tax Expense | 637 | 304 | 361 | 96 | 21 | 204 | 5 | 1,628 | ||||||||||||||||
| Segment Income | $ | 1,151 | $ | 498 | $ | 567 | $ | 167 | $ | 35 | $ | 370 | $ | 7 | $ | 2,795 | ||||||||
Special Items | 72 | 30 | — | — | — | — | — | 102 | ||||||||||||||||
Adjusted Earnings(d) | $ | 1,223 | $ | 528 | $ | 567 | $ | 167 | $ | 35 | $ | 370 | $ | 7 | $ | 2,897 | ||||||||
| (a) | Amounts exclude results from the wholly owned subsidiary, Duke Energy Kentucky. |
| (b) | Duke Energy Carolinas and Duke Energy Progress include $72 million and $30 million, respectively related to the federal grand jury investigation of the February 2014 Dan River coal ash release and ash basin operations at other North Carolina coal plants. |
| (c) | Includes an equity component of allowance for funds used during construction of $91 million for Duke Energy Carolinas, $25 million for Duke Energy Progress, |
| $4 million for Duke Energy Ohio, and $14 million for Duke Energy Indiana. |
| (d) | See page 16 for a detailed reconciliation of Regulated Utilities Segment Income to Adjusted Earnings. |
8
REGULATED UTILITIES
Consolidating Balance Sheets - Assets
(Unaudited)
| December 31, 2015 | ||||||||||||||||||||||||
| (in millions) | Duke Energy Carolinas | Duke Energy Progress | Duke Energy Florida | Duke Energy Ohio(a) | Duke Energy Kentucky | Duke Energy Indiana | Eliminations / Adjustments(b) | Regulated Utilities | ||||||||||||||||
| Current Assets | ||||||||||||||||||||||||
| Cash and cash equivalents | $ | 13 | $ | 15 | $ | 8 | $ | 13 | $ | 9 | $ | 9 | $ | — | $ | 67 | ||||||||
| Receivables, net | 142 | 87 | 60 | 59 | 5 | 96 | 4 | 453 | ||||||||||||||||
| Restricted receivables of variable interest entities, net | 596 | 349 | 308 | — | — | — | 455 | 1,708 | ||||||||||||||||
| Receivables from affiliated companies | 113 | 16 | 85 | 19 | 11 | 29 | (156 | ) | 117 | |||||||||||||||
| Notes receivable from affiliated companies | 163 | — | — | — | — | 83 | (143 | ) | 103 | |||||||||||||||
| Inventory | 1,276 | 1,088 | 663 | 61 | 44 | 570 | 1 | 3,703 | ||||||||||||||||
| Regulatory assets | 305 | 264 | 98 | 17 | 9 | 102 | — | 795 | ||||||||||||||||
| Other | 95 | 113 | 39 | 60 | 38 | 15 | 23 | 383 | ||||||||||||||||
| Total current assets | 2,703 | 1,932 | 1,261 | 229 | 116 | 904 | 184 | 7,329 | ||||||||||||||||
| Investments and Other Assets | ||||||||||||||||||||||||
| Investments in equity method unconsolidated affiliates | — | — | 2 | — | — | — | — | 2 | ||||||||||||||||
| Investments and advances from subsidiaries | (48 | ) | 2 | (3 | ) | (1 | ) | — | — | (3 | ) | (53 | ) | |||||||||||
| Nuclear decommissioning trust funds | 3,050 | 2,035 | 740 | — | — | — | — | 5,825 | ||||||||||||||||
| Goodwill | — | — | — | 920 | — | — | 15,030 | 15,950 | ||||||||||||||||
| Other | 999 | 485 | 289 | 27 | 6 | 209 | (45 | ) | 1,970 | |||||||||||||||
| Total investments and other assets | 4,001 | 2,522 | 1,028 | 946 | 6 | 209 | 14,982 | 23,694 | ||||||||||||||||
| Property, Plant and Equipment | ||||||||||||||||||||||||
| Cost | 39,398 | 27,313 | 15,343 | 5,670 | 2,080 | 14,007 | 873 | 104,684 | ||||||||||||||||
| Accumulated depreciation and amortization | (13,521 | ) | (10,141 | ) | (4,720 | ) | (1,583 | ) | (924 | ) | (4,484 | ) | (1 | ) | (35,374 | ) | ||||||||
| Generation facilities to be retired, net | — | 548 | — | — | — | — | — | 548 | ||||||||||||||||
| Net property, plant and equipment | 25,877 | 17,720 | 10,623 | 4,087 | 1,156 | 9,523 | 872 | 69,858 | ||||||||||||||||
| Regulatory Assets and Deferred Debits | ||||||||||||||||||||||||
| Regulatory assets | 2,766 | 2,667 | 2,725 | 445 | 62 | 716 | 1,453 | 10,834 | ||||||||||||||||
| Other | 4 | 3 | 2 | 2 | — | 2 | — | 13 | ||||||||||||||||
| Total regulatory assets and deferred debits | 2,770 | 2,670 | 2,727 | 447 | 62 | 718 | 1,453 | 10,847 | ||||||||||||||||
| Total Assets | 35,351 | 24,844 | 15,639 | 5,709 | 1,340 | 11,354 | 17,491 | 111,728 | ||||||||||||||||
| Intercompany balances and other | (94 | ) | (140 | ) | (105 | ) | (19 | ) | — | (38 | ) | 230 | (166 | ) | ||||||||||
| Reportable Segment Assets | $ | 35,257 | $ | 24,704 | $ | 15,534 | $ | 5,690 | $ | 1,340 | $ | 11,316 | $ | 17,721 | $ | 111,562 | ||||||||
| (a) | Excludes the balances of the wholly owned subsidiary, Duke Energy Kentucky. |
| (b) | Includes the elimination of intercompany balances, purchase accounting adjustments and restricted receivables related to Cinergy Receivables Company. |
9
REGULATED UTILITIES
Consolidating Balance Sheets - Liabilities and Equity
(Unaudited)
| December 31, 2015 | ||||||||||||||||||||||||
| (in millions) | Duke Energy Carolinas | Duke Energy Progress | Duke Energy Florida | Duke Energy Ohio(a) | Duke Energy Kentucky | Duke Energy Indiana | Eliminations / Adjustments(b) | Regulated Utilities | ||||||||||||||||
| Current Liabilities | ||||||||||||||||||||||||
| Accounts payable | $ | 753 | $ | 399 | $ | 322 | $ | 176 | $ | 26 | $ | 189 | $ | 2 | $ | 1,867 | ||||||||
| Accounts payable to affiliated companies | 137 | 162 | 106 | 14 | 14 | 35 | 2,787 | 3,255 | ||||||||||||||||
| Notes payable to affiliated companies | — | 209 | 813 | 47 | 56 | — | (144 | ) | 981 | |||||||||||||||
| Taxes accrued | 25 | 15 | 139 | 137 | 11 | 92 | — | 419 | ||||||||||||||||
| Interest accrued | 95 | 96 | 43 | 15 | 3 | 56 | (1 | ) | 307 | |||||||||||||||
| Current maturities of long-term debt | 356 | 2 | 13 | 4 | 102 | 547 | 77 | 1,101 | ||||||||||||||||
| Regulatory liabilities | 39 | 85 | 200 | 9 | 3 | 62 | 2 | 400 | ||||||||||||||||
| Other | 519 | 412 | 452 | 54 | 18 | 97 | — | 1,552 | ||||||||||||||||
| Total current liabilities | 1,924 | 1,380 | 2,088 | 456 | 233 | 1,078 | 2,723 | 9,882 | ||||||||||||||||
| Long-Term Debt | 7,711 | 6,366 | 4,253 | 1,274 | 193 | 3,071 | 2,284 | 25,152 | ||||||||||||||||
| Long-Term Debt Payable to Affiliated Companies | 300 | 150 | — | — | 25 | 150 | — | 625 | ||||||||||||||||
| Deferred Credits and Other Liabilities | ||||||||||||||||||||||||
| Deferred income taxes | 6,163 | 3,005 | 2,478 | 1,133 | 290 | 1,657 | 41 | 14,767 | ||||||||||||||||
| Investment tax credits | 199 | 132 | — | 3 | 1 | 138 | (1 | ) | 472 | |||||||||||||||
| Accrued pension and other post-retirement benefit costs | 107 | 262 | 242 | 42 | 12 | 80 | (57 | ) | 688 | |||||||||||||||
| Asset retirement obligations | 3,918 | 4,567 | 802 | 21 | 104 | 525 | 248 | 10,185 | ||||||||||||||||
| Regulatory liabilities | 2,802 | 1,878 | 509 | 192 | 53 | 754 | 1 | 6,189 | ||||||||||||||||
| Other | 621 | 45 | 146 | 137 | 25 | 65 | (6 | ) | 1,033 | |||||||||||||||
| Total deferred credits and other liabilities | 13,810 | 9,889 | 4,177 | 1,528 | 485 | 3,219 | 226 | 33,334 | ||||||||||||||||
| Equity | 11,606 | 7,059 | 5,121 | 2,451 | 404 | 3,836 | 12,258 | 42,735 | ||||||||||||||||
| Total Liabilities and Equity | 35,351 | 24,844 | 15,639 | 5,709 | 1,340 | 11,354 | 17,491 | 111,728 | ||||||||||||||||
| Intercompany balances and other | (94 | ) | (140 | ) | (105 | ) | (19 | ) | — | (38 | ) | 230 | (166 | ) | ||||||||||
| Reportable Segment Liabilities and Equity | $ | 35,257 | $ | 24,704 | $ | 15,534 | $ | 5,690 | $ | 1,340 | $ | 11,316 | $ | 17,721 | $ | 111,562 | ||||||||
| (a) | Excludes the balances of the wholly owned subsidiary, Duke Energy Kentucky. |
| (b) | Includes the elimination of intercompany balances and purchase accounting adjustments. |
10
REGULATED UTILITIES
Revenues By Customer Class
(Unaudited)
| December 31, 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 | $ | 2,991 | $ | 1,943 | $ | 2,651 | $ | 590 | $ | 125 | $ | 991 | $ | — | $ | 9,291 | ||||||||
| General service | 2,276 | 1,339 | 1,546 | 299 | 134 | 734 | — | 6,328 | ||||||||||||||||
| Industrial | 1,319 | 664 | 294 | 62 | 53 | 734 | — | 3,126 | ||||||||||||||||
| Wholesale | 415 | 1,005 | 234 | — | 37 | 312 | — | 2,003 | ||||||||||||||||
| Change in unbilled | (15 | ) | (15 | ) | (12 | ) | 1 | (1 | ) | (15 | ) | — | (57 | ) | ||||||||||
| Other revenues | 243 | 354 | 264 | 21 | 11 | 134 | (197 | ) | 830 | |||||||||||||||
| Total Revenues | $ | 7,229 | $ | 5,290 | $ | 4,977 | $ | 973 | $ | 359 | $ | 2,890 | $ | (197 | ) | $ | 21,521 | |||||||
| Regulated Natural Gas Revenues | ||||||||||||||||||||||||
| Residential | $ | — | $ | — | $ | — | $ | 292 | $ | 70 | $ | — | $ | — | $ | 362 | ||||||||
| General service | — | — | — | 120 | 28 | — | — | 148 | ||||||||||||||||
| Industrial | — | — | — | 16 | 5 | — | — | 21 | ||||||||||||||||
| Change in unbilled | — | — | — | (4 | ) | (1 | ) | — | — | (5 | ) | |||||||||||||
| Other revenues | — | — | — | 14 | 1 | — | — | 15 | ||||||||||||||||
| Total Revenues | $ | — | $ | — | $ | — | $ | 438 | $ | 103 | $ | — | $ | — | $ | 541 | ||||||||
| December 31, 2014 | ||||||||||||||||||||||||
| (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 | $ | 2,951 | $ | 1,913 | $ | 2,628 | $ | 573 | $ | 134 | $ | 1,087 | $ | — | $ | 9,286 | ||||||||
| General service | 2,271 | 1,310 | 1,573 | 295 | 144 | 811 | — | 6,404 | ||||||||||||||||
| Industrial | 1,267 | 668 | 300 | 56 | 60 | 832 | — | 3,183 | ||||||||||||||||
| Wholesale | 385 | 911 | 210 | — | 20 | 321 | — | 1,847 | ||||||||||||||||
| Change in unbilled | (27 | ) | (1 | ) | 13 | (4 | ) | (1 | ) | (9 | ) | — | (29 | ) | ||||||||||
| Other revenues | 509 | 375 | 251 | 27 | 12 | 133 | (305 | ) | 1,002 | |||||||||||||||
| Total Revenues | $ | 7,356 | $ | 5,176 | $ | 4,975 | $ | 947 | $ | 369 | $ | 3,175 | $ | (305 | ) | $ | 21,693 | |||||||
| Regulated Natural Gas Revenues | ||||||||||||||||||||||||
| Residential | $ | — | $ | — | $ | — | $ | 299 | $ | 81 | $ | — | $ | — | $ | 380 | ||||||||
| General service | — | — | — | 119 | 35 | — | — | 154 | ||||||||||||||||
| Industrial | — | — | — | 17 | 5 | — | — | 22 | ||||||||||||||||
| Change in unbilled | — | — | — | (4 | ) | (1 | ) | — | — | (5 | ) | |||||||||||||
| Other revenues | — | — | — | 23 | 4 | — | — | 27 | ||||||||||||||||
| Total Revenues | $ | — | $ | — | $ | — | $ | 454 | $ | 124 | $ | — | $ | — | $ | 578 | ||||||||
(a) Amounts exclude results from the wholly owned subsidiary, Duke Energy Kentucky.
11
DUKE ENERGY OHIO SUPPLEMENT
Consolidating Statements of Operations
(Unaudited)
| Twelve Months Ended December 31, 2015 | ||||||||||||||||||||||||
| Regulated Utilities | Commercial Portfolio(a) | Other | Eliminations | Duke Energy Ohio | ||||||||||||||||||||
| (in millions) | Ohio Transmission & Distribution | Duke Energy Kentucky | ||||||||||||||||||||||
| Operating Revenues | ||||||||||||||||||||||||
| Regulated electric | $ | 973 | $ | 359 | $ | — | $ | — | $ | (1 | ) | $ | 1,331 | |||||||||||
| Nonregulated electric and other | — | — | 14 | 19 | — | 33 | ||||||||||||||||||
| Regulated natural gas | 438 | 103 | — | — | — | 541 | ||||||||||||||||||
| Total operating revenues | 1,411 | 462 | 14 | 19 | (1 | ) | 1,905 | |||||||||||||||||
| Operating Expenses | ||||||||||||||||||||||||
| Fuel used in electric generation and purchased power - regulated | 303 | 143 | — | — | — | 446 | ||||||||||||||||||
| Fuel used in electric generation and purchased power - nonregulated | — | — | 14 | 33 | — | 47 | ||||||||||||||||||
| Cost of natural gas | 99 | 42 | — | — | — | 141 | ||||||||||||||||||
| Operation, maintenance and other | 315 | 133 | 12 | 35 | — | 495 | ||||||||||||||||||
| Depreciation and amortization | 182 | 44 | — | 1 | — | 227 | ||||||||||||||||||
| Property and other taxes | 241 | 13 | 1 | (1 | ) | — | 254 | |||||||||||||||||
| Total operating expenses | 1,140 | 375 | 27 | 68 | — | 1,610 | ||||||||||||||||||
| Gain on Sales of Other Assets and Other, net | 8 | — | — | — | — | 8 | ||||||||||||||||||
| Operating Income (Loss) | 279 | 87 | (13 | ) | (49 | ) | (1 | ) | 303 | |||||||||||||||
| Other Income and Expenses, net | 7 | 1 | — | (2 | ) | — | 6 | |||||||||||||||||
| Interest Expense | 64 | 14 | — | 1 | — | 79 | ||||||||||||||||||
| Income (Loss) from Continuing Operations Before Income Taxes | 222 | 74 | (13 | ) | (52 | ) | (1 | ) | 230 | |||||||||||||||
| Income Tax Expense (Benefit) from Continuing Operations | 77 | 28 | (5 | ) | (19 | ) | — | 81 | ||||||||||||||||
| Segment Income (Loss) / Other Net Expense | $ | 145 | $ | 46 | $ | (8 | ) | $ | (33 | ) | $ | (1 | ) | $ | 149 | |||||||||
Income from Discontinued Operations, net of tax (b) | 23 | |||||||||||||||||||||||
| Net Income | $ | 172 | ||||||||||||||||||||||
| (a) | Subsequent to the sale of the nonregulated Midwest generation business, beginning in the second quarter of 2015, all Duke Energy Ohio results of operations are presented in Regulated Utilities and Other. |
| (b) | Includes the after-tax charge of $53 million for the litigation reserve related to a settlement agreement reached in a lawsuit related to the nonregulated Midwest generation business. |
12
DUKE ENERGY OHIO SUPPLEMENT
Consolidating Statements of Operations
(Unaudited)
| Twelve Months Ended December 31, 2014 | ||||||||||||||||||
| Regulated Utilities | Commercial Portfolio | Other | Duke Energy Ohio | |||||||||||||||
| (in millions) | Ohio Transmission & Distribution | Duke Energy Kentucky | ||||||||||||||||
| Operating Revenues | ||||||||||||||||||
| Regulated electric | $ | 947 | $ | 369 | $ | — | $ | — | $ | 1,316 | ||||||||
| Nonregulated electric and other | — | — | 19 | — | 19 | |||||||||||||
| Regulated natural gas | 454 | 124 | — | — | 578 | |||||||||||||
| Total operating revenues | 1,401 | 493 | 19 | — | 1,913 | |||||||||||||
| Operating Expenses | ||||||||||||||||||
| Fuel used in electric generation and purchased power - regulated | 287 | 172 | — | — | 459 | |||||||||||||
| Fuel used in electric generation and purchased power - nonregulated | — | — | 25 | — | 25 | |||||||||||||
| Cost of natural gas | 125 | 60 | — | — | 185 | |||||||||||||
| Operation, maintenance and other | 287 | 133 | 78 | 18 | 516 | |||||||||||||
| Depreciation and amortization | 167 | 44 | 2 | 1 | 214 | |||||||||||||
| Property and other taxes | 216 | 14 | 3 | 1 | 234 | |||||||||||||
Impairment charges(a) | — | — | 94 | — | 94 | |||||||||||||
| Total operating expenses | 1,082 | 423 | 202 | 20 | 1,727 | |||||||||||||
| Gain on Sales of Other Assets and Other, net | 1 | — | — | — | 1 | |||||||||||||
| Operating Income (Loss) | 320 | 70 | (183 | ) | (20 | ) | 187 | |||||||||||
| Other Income and Expenses, net | 8 | 2 | — | — | 10 | |||||||||||||
| Interest Expense | 65 | 16 | 5 | — | 86 | |||||||||||||
| Income (Loss) from Continuing Operations before Income Taxes | 263 | 56 | (188 | ) | (20 | ) | 111 | |||||||||||
| Income Tax Expense (Benefit) from Continuing Operations | 96 | 21 | (67 | ) | (7 | ) | 43 | |||||||||||
| Segment Income (Loss) / Other Net Expense | $ | 167 | $ | 35 | $ | (121 | ) | $ | (13 | ) | $ | 68 | ||||||
| Loss from Discontinued Operations, net of tax | (563 | ) | ||||||||||||||||
| Net Loss | $ | (495 | ) | |||||||||||||||
| (a) | The amount for Commercial Portfolio includes an impairment charge related to OVEC. |
13
DUKE ENERGY MONEYPOOL SUPPLEMENT
Schedule of Moneypool Balances
(Unaudited)
| December 31, 2015 | ||||||||||||||||||||||||
| (in millions) | Duke Energy(a) | Duke Energy Carolinas | Duke Energy Progress | Duke Energy Florida | Duke Energy Ohio(b) | Duke Energy Kentucky | Duke Energy Indiana | Consolidated | ||||||||||||||||
Moneypool lendings (borrowings) of commercial paper(c) | $ | 1,607 | $ | (300 | ) | $ | (333 | ) | $ | (709 | ) | $ | (41 | ) | $ | (74 | ) | $ | (150 | ) | $ | — | ||
Moneypool (borrowings) lendings(d) | (102 | ) | 163 | (27 | ) | (104 | ) | (6 | ) | (7 | ) | 83 | — | |||||||||||
| (a) | Duke Energy only includes Duke Energy Corporation (the Parent) and Duke Energy Business Services (DEBS). |
| (b) | Excludes amounts of from the wholly owned subsidiary, Duke Energy Kentucky. |
| (c) | Duke Energy issues commercial paper and loans a portion of the proceeds through the moneypool to the Subsidiary Public Utilities. |
| (d) | Duke Energy participates in a moneypool arrangement with the Subsidiary Public Utilities. Under the arrangement, short-term loans may be provided to affiliates. The Parent may loan funds through the moneypool but is prohibited from borrowing funds. DEBS is permitted to both borrow and loan funds into the moneypool. Borrowings presented for Duke Energy are borrowed by DEBS. |
14
DUKE ENERGY CORPORATION
ADJUSTED TO REPORTED EARNINGS RECONCILIATION
Twelve Months Ended December 31, 2015
(Dollars in millions, except per-share amounts)
| Special Items | ||||||||||||||||||||||||||||||||||||
| Adjusted Earnings | Costs to Achieve, Mergers | Edwardsport Settlement | Midwest Generation Operations | Ash Basin Settlement and Penalties | Cost Savings Initiatives | Discontinued Operations | Total Adjustments | Reported Earnings | ||||||||||||||||||||||||||||
| SEGMENT INCOME | ||||||||||||||||||||||||||||||||||||
| Regulated Utilities | $ | 2,972 | $ | — | $ | (58 | ) | B | $ | — | $ | (11 | ) | D | $ | (10 | ) | E | $ | — | $ | (79 | ) | $ | 2,893 | |||||||||||
| International Energy | 225 | — | — | — | — | — | — | — | 225 | |||||||||||||||||||||||||||
| Commercial Portfolio | 140 | — | — | (94 | ) | C | — | (1 | ) | F | (41 | ) | H | (136 | ) | 4 | ||||||||||||||||||||
| Total Reportable Segment Income | 3,337 | — | (58 | ) | (94 | ) | (11 | ) | (11 | ) | (41 | ) | (215 | ) | 3,122 | |||||||||||||||||||||
| Other | (185 | ) | (60 | ) | A | — | — | — | (77 | ) | G | — | (137 | ) | (322 | ) | ||||||||||||||||||||
| Intercompany Eliminations | — | — | — | — | — | — | (4 | ) | I | (4 | ) | (4 | ) | |||||||||||||||||||||||
| Total Reportable Segment Income and Other Net Expense | 3,152 | (60 | ) | (58 | ) | (94 | ) | (11 | ) | (88 | ) | (45 | ) | (356 | ) | 2,796 | ||||||||||||||||||||
| Discontinued Operations | — | — | — | 94 | C | — | — | (74 | ) | J | 20 | 20 | ||||||||||||||||||||||||
| Net Income Attributable to Duke Energy Corporation | $ | 3,152 | $ | (60 | ) | $ | (58 | ) | $ | — | $ | (11 | ) | $ | (88 | ) | $ | (119 | ) | $ | (336 | ) | $ | 2,816 | ||||||||||||
| EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, BASIC | $ | 4.54 | $ | (0.09 | ) | $ | (0.08 | ) | $ | — | $ | (0.02 | ) | $ | (0.13 | ) | $ | (0.17 | ) | $ | (0.49 | ) | $ | 4.05 | ||||||||||||
| EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, DILUTED | $ | 4.54 | $ | (0.09 | ) | $ | (0.08 | ) | $ | — | $ | (0.02 | ) | $ | (0.13 | ) | $ | (0.17 | ) | $ | (0.49 | ) | $ | 4.05 | ||||||||||||
A - Net of $37 million tax benefit. Recorded within Operating Expenses and Interest Expenses on the Consolidated Statements of Operations.
B - Net of $35 million tax benefit. $88 million recorded within Impairment charges and $5 million recorded within Other income and expenses, net on the Duke Energy Indiana Consolidated Statements of Operations.
C - 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 Consolidated Statements of Operations. Includes $8 million and $6 million at Duke Energy Carolinas and Duke Energy Progress, respectively.
E - Net of $6 million tax benefit. Primarily consists of severance costs recorded within Operation, maintenance and other on the Consolidated Statements of Operations. Includes $7 million at Duke Energy Carolinas, $4 million at Duke Energy Progress, $2 million at Duke Energy Florida, $1 million at Duke Energy Ohio and $2 million at Duke Energy Indiana.
F - Net of $1 million tax benefit. Primarily consists of severance costs recorded within Operation, maintenance and other on the Consolidated Statements of Operations.
G - Net of $47 million tax benefit. Primarily consists of severance costs recorded within Operation, maintenance and other on the Consolidated Statements of Operations.
H - State tax expense resulting from the completion of the sale of the nonregulated Midwest generation business.
I - Reverses the impact on eliminations of classifying the nonregulated Midwest generation business as discontinued operations.
J - Recorded in Income (Loss) From Discontinued Operations, net of tax on the Consolidated Statements of Operations, and includes the impact of a litigation reserve related to the nonregulated Midwest generation business.
Weighted Average Shares (reported and adjusted) - in millions
Basic 694
Diluted 694
15
DUKE ENERGY CORPORATION
ADJUSTED TO REPORTED EARNINGS RECONCILIATION
Twelve Months Ended December 31, 2014
(Dollars in millions, except per-share amounts)
| Special Items | ||||||||||||||||||||||||||||||||||||||||||||
| Adjusted Earnings | Costs to Achieve, Progress Merger | Asset Impairment | Midwest Generation Operations | Litigation Reserve | Asset Sales | International Tax Adjustment | Economic Hedges (Mark-to-Market) * | Discontinued Operations | Total Adjustments | Reported Earnings | ||||||||||||||||||||||||||||||||||
| SEGMENT INCOME | ||||||||||||||||||||||||||||||||||||||||||||
| Regulated Utilities | $ | 2,897 | $ | — | $ | — | $ | — | $ | (102 | ) | J | $ | — | $ | — | $ | — | $ | — | $ | (102 | ) | $ | 2,795 | |||||||||||||||||||
| International Energy | 428 | — | — | — | — | — | (373 | ) | H | — | — | (373 | ) | 55 | ||||||||||||||||||||||||||||||
| Commercial Portfolio | 109 | — | (59 | ) | F | (114 | ) | C | — | — | — | (6 | ) | B | 15 | I | (164 | ) | (55 | ) | ||||||||||||||||||||||||
| Total Reportable Segment Income | 3,434 | — | (59 | ) | (114 | ) | (102 | ) | — | (373 | ) | (6 | ) | 15 | (639 | ) | 2,795 | |||||||||||||||||||||||||||
| Other | (216 | ) | (127 | ) | A | — | — | — | 9 | E | — | — | — | (118 | ) | (334 | ) | |||||||||||||||||||||||||||
| Intercompany Eliminations | — | — | — | — | — | — | — | — | (10 | ) | G | (10 | ) | (10 | ) | |||||||||||||||||||||||||||||
| Total Reportable Segment Income and Other Net Expense | 3,218 | (127 | ) | (59 | ) | (114 | ) | (102 | ) | 9 | (373 | ) | (6 | ) | 5 | (767 | ) | 2,451 | ||||||||||||||||||||||||||
| Discontinued Operations | — | — | — | 114 | C | — | — | — | — | (682 | ) | D | (568 | ) | (568 | ) | ||||||||||||||||||||||||||||
| Net Income Attributable to Duke Energy Corporation | $ | 3,218 | $ | (127 | ) | $ | (59 | ) | $ | — | $ | (102 | ) | $ | 9 | $ | (373 | ) | $ | (6 | ) | $ | (677 | ) | $ | (1,335 | ) | $ | 1,883 | |||||||||||||||
| EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, BASIC | $ | 4.55 | $ | (0.18 | ) | $ | (0.08 | ) | $ | — | $ | (0.14 | ) | $ | 0.01 | $ | (0.53 | ) | $ | (0.01 | ) | $ | (0.96 | ) | $ | (1.89 | ) | $ | 2.66 | |||||||||||||||
| EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, DILUTED | $ | 4.55 | $ | (0.18 | ) | $ | (0.08 | ) | $ | — | $ | (0.14 | ) | $ | 0.01 | $ | (0.53 | ) | $ | (0.01 | ) | $ | (0.96 | ) | $ | (1.89 | ) | $ | 2.66 | |||||||||||||||
A - Net of $78 million tax benefit. $5 million recorded as a decrease in Operating Revenues, $198 million recorded within Operating Expenses and $2 million recorded within Interest Expense on the Consolidated Statements of Operations.
B - Net of $3 million tax benefit. Recorded within Operating Revenues on the Consolidated Statements of Operations.
C - Midwest Generation Operations reclassifies the operating results of the nonregulated Midwest generation business that had been classified as discontinued operations after adjustment for special items and economic hedges from discontinued operations to the Commercial Power segment (net of $71 million tax benefit).
D - Recorded in Income (loss) From Discontinued Operations, net of tax on the Consolidated Statements of Operations. Includes the impairment of the nonregulated Midwest generation business, the mark-to-market of economic hedges of the nonregulated Midwest generation business and certain costs associated with a contract settlement.
E - Net of $5 million tax expense. Recorded in Other Income and Expenses on the Consolidated Statements of Operations.
F - Net of $35 million tax benefit. Recorded in impairment charges on the Consolidated Statements of Operations.
G - Reverses the impact on eliminations of classifying the nonregulated Midwest generation business as discontinued operations.
H - Deferred tax impact resulting from the decision to repatriate International Energy's historic undistributed foreign earnings, included within Income Tax Expense on the Consolidated Statement of Operations.
I - State tax benefit resulting from the planned disposition of the nonregulated Midwest generation business.
J - Recorded within Operating, maintenance and other (Operating Expenses) on the Consolidated Statements of Operations.
Weighted Average Shares (reported and adjusted) - in millions
Basic 707
Diluted 707
* 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 and also relate to existing derivative positions that may have tenors beyond the planned disposal date of the nonregulated Midwest generation business. The mark-to-market impact of derivative contracts is recognized in GAAP earnings immediately as such derivative contracts do not qualify for hedge accounting or regulatory treatment. The economic value of generation assets is subject to fluctuations in fair value due to market price volatility of input and output commodities (e.g. coal, electricity, natural gas). Economic hedging involves both purchases and sales of those input and output commodities related to generation assets. Operations of the generation assets are accounted for under the accrual method. Management believes excluding impacts of mark-to-market changes of the derivative contracts from adjusted earnings until settlement better matches the financial impacts of the derivative contract with the portion of economic value of the underlying hedged asset. However, due to the divestiture of the nonregulated Midwest generation business as mentioned above, certain derivative positions have tenors beyond the planned disposal date of these assets. As such, management has excluded settlements of these derivative positions from adjusted diluted EPS as these realized gains and losses more closely relate to the loss on disposal of these assets. Management believes 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.
16
DUKE ENERGY CORPORATION
Non-GAAP Financial Measures
Management evaluates financial performance in part based on the non-GAAP financial measures, adjusted earnings and adjusted diluted earnings per share (EPS). These items are measured as income from continuing operations net of income (loss) attributable to non-controlling interests, adjusted for the dollar and per-share impact of mark-to-market impacts of economic hedges in the Commercial Portfolio segment and special items including the operating results of the Midwest Generation business (Disposal Group) classified as discontinued operations for GAAP purposes. Special items represent certain charges and credits, which management believes will not be recurring on a regular basis, although it is reasonably possible such charges and credits could recur. Operating results of the Disposal Group sold to Dynegy are reported as discontinued operations, including a portion of the mark-to-market adjustments associated with derivative contracts. Management believes that including the operating results of the Disposal Group reported as discontinued operations better reflects its financial performance and therefore has included these results in adjusted earnings and adjusted diluted EPS prior to the sale of the Disposal Group. Additionally, as a result of completing the sale of the Disposal Group during the second quarter of 2015, state income tax expense increased as state income tax apportionments changed. The additional tax expense was recognized in Continuing Operations on a GAAP basis. This impact to state income taxes has been excluded from the Commercial Portfolio segment for adjusted diluted EPS purposes as management believes these impacts are incidental to the sale of the Disposal Group. Derivative contracts 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 and, if associated with the Disposal Group, classified as discontinued operations, 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 the presentation of adjusted earnings and adjusted diluted EPS provides useful information to investors, as it provides them an additional relevant comparison of Duke Energy’s performance across periods. Management uses these non-GAAP financial measures for planning and forecasting and for reporting results to the Board of Directors, employees, shareholders, analysts and investors concerning Duke Energy’s financial performance. Adjusted diluted EPS is also used as a basis for employee incentive bonuses. The most directly comparable GAAP measures for adjusted earnings and adjusted diluted EPS are Net Income Attributable to Duke Energy Corporation and Diluted EPS Attributable to Duke Energy Corporation common shareholders, which include the dollar and per share impact of special items, mark-to-market impacts of economic hedges in the Commercial Portfolio segment and discontinued operations.
Management evaluates segment performance based on segment income. Segment income is defined as income from continuing operations net of income attributable to non-controlling interests. 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 the mark-to-market impacts of economic hedges in the Commercial Portfolio segment and special items, including the operating results of the Disposal Group classified as discontinued operations for GAAP purposes. Management believes the presentation of adjusted segment income as presented provides useful information to investors, as it provides them with an additional relevant comparison of a segment’s performance across periods. The most directly comparable GAAP measure for adjusted segment income is segment income, which represents segment income from continuing operations, including any special items and the mark-to-market impacts of economic hedges in the Commercial Portfolio segment.
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.
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