November 4, 2016 - 7:00 AM EDT
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Duke Energy reports third quarter 2016 financial results

CHARLOTTE, N.C., Nov. 4, 2016 /PRNewswire/ -- 

  • Third quarter 2016 GAAP reported diluted earnings per share (EPS) were $1.70 compared to $1.35 for the third quarter of 2015
  • Adjusted diluted EPS of $1.68 for third quarter 2016, compared to $1.47 for the third quarter of 2015
  • Company trending toward the high end of its original 2016 adjusted diluted earnings guidance range of $4.50 to $4.70 per share, excluding costs associated with Hurricane Matthew

Duke Energy today announced third quarter 2016 reported diluted EPS, prepared in accordance with Generally Accepted Accounting Principles (GAAP) of $1.70, compared to $1.35 for third quarter 2015. Third quarter 2016 adjusted diluted EPS was $1.68, compared to $1.47 for third quarter 2015.

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GAAP reported diluted EPS includes the impact of special items, which are excluded from adjusted diluted EPS. Special items during the third quarter of 2016 include favorable tax adjustments on previously disposed businesses, charges related to costs to achieve mergers and cost savings initiatives, and an impairment of certain wind projects within commercial renewables.

Third quarter adjusted diluted EPS was higher than the prior year driven by warm summer weather throughout Duke Energy's service territories, higher retail volumes and rider revenues, and ongoing cost management efforts.

Based upon strong results through the third quarter, and the early closing of Piedmont Natural Gas, the company is trending toward the high end of its original 2016 adjusted diluted earnings guidance range of $4.50 to $4.70 per share, excluding fourth-quarter costs associated with Hurricane Matthew.

"We delivered strong financial results again this quarter underpinned by solid operational performance and reached pivotal milestones in transitioning our business portfolio," said Lynn Good, Duke Energy chairman, president and CEO. "The recent closing of our Piedmont Natural Gas acquisition, complemented by the announced sale of our international business, advances our portfolio transition and positions us as a premier regulated energy company."

Business segment results

In addition to the quarterly business segment discussion below, a comprehensive table of quarterly and year-to-date earnings per share drivers compared to the prior year is provided on pages 14 and 15.

The discussion below of the third-quarter results includes both GAAP segment income and adjusted segment income, which is a non-GAAP financial measure. The tables on pages 23 through 26 present a detail of special items and a reconciliation of GAAP reported results to adjusted results.

During the first quarter of 2016, Duke Energy began to evaluate interim period segment performance based on financial information that includes the impact of income tax levelization within segment income. This represents a change from the previous measure, where the interim period impacts of income tax levelization were included within Other, and therefore excluded from segment income. As a result, prior period segment results presented in this release have been recast to conform to this change.

Regulated Utilities

On a reported basis, Regulated Utilities recognized third quarter 2016 segment income of $1,200 million, compared to $905 million in the third quarter of 2015. In addition to the drivers outlined below, quarterly results were impacted by a $56 million after-tax impairment charge in the prior year related to the September 2015 Edwardsport settlement. This charge was treated as a special item and therefore excluded from adjusted earnings.

On an adjusted basis, Regulated Utilities recognized third quarter 2016 adjusted segment income of $1,200 million, compared to $965 million in the third quarter 2015, an increase of $0.34 per share.

Higher quarterly results at Regulated Utilities were primarily driven by:

  • Favorable weather (+$0.14 per share) driven by warmer temperatures across all Duke Energy service territories
  • Lower effective tax rate (+$0.08 per share) due to prior year income tax adjustments
  • Higher rider revenues (+$0.05 per share) primarily related to energy efficiency and grid investment riders at Duke Energy Progress and Duke Energy Ohio, respectively
  • Increased weather-normal retail customer volumes (+$0.04 per share)
  • Lower O&M expenses (+$0.02 per share), primarily as a result of ongoing cost savings initiatives, despite higher storm costs (-$0.02 per share)

Commercial Portfolio

On a reported basis, Commercial Portfolio recognized a third quarter 2016 segment loss of $21 million, compared to segment income of $8 million in the third quarter of 2015. In addition to the drivers outlined below, quarterly results were impacted by a $45 million after-tax impairment charge in the current year associated with equity method investments in certain wind projects. This charge was treated as a special item and therefore excluded from adjusted earnings.

On an adjusted basis, Commercial Portfolio recognized third quarter 2016 adjusted segment income of $24 million, compared to $7 million in the third quarter 2015, an increase of $0.02 per share.

Higher quarterly results at Commercial Portfolio were primarily driven by additional wind and solar plants placed in service and improved wind resources.

International Energy

International Energy recognized third quarter 2016 reported and adjusted segment income of $64 million, compared to $69 million in the third quarter 2015, a decrease of $0.01 per share.

Other

Other primarily includes corporate interest expense not allocated to the business units, results from Duke Energy's captive insurance company, and other investments.

On a reported basis, Other recognized third quarter 2016 net expense of $189 million, compared to net expense of $45 million in the third quarter of 2015. In addition to the drivers outlined below, quarterly results were impacted by $37 million of higher costs to achieve mergers and $12 million of charges in the current year related to cost savings initiatives, both net of tax. These charges were treated as special items and therefore excluded from adjusted earnings.

On an adjusted basis, Other recognized third quarter 2016 adjusted net expense of $125 million, compared to adjusted net expense of $30 million in the third quarter 2015, a decrease of $0.14 per share. The increased net expense was primarily driven by a higher effective tax rate (-$0.13 per share) due to prior year income tax benefits and an unfavorable audit settlement in the current year.

The consolidated reported effective tax rate for third quarter 2016 was 32.9 percent, compared to 30.9 percent in the third quarter of 2015. The consolidated adjusted effective tax rate for third quarter 2016 was 33.5 percent, compared to 31.6 percent in the third quarter of 2015. Adjusted effective tax rate is a non-GAAP financial measure. The tables on pages 27 and 28 present a reconciliation of GAAP reported effective tax rate to adjusted effective tax rate.

Discontinued Operations

In the third quarter, Duke Energy recognized an income tax benefit of $122 million within Discontinued Operations due to deferred tax liability adjustments related to the Midwest Generation Disposal Group and another previously sold business.

Earnings conference call for analysts

An earnings conference call for analysts is scheduled for 10 a.m. ET today to discuss Duke Energy's financial performance for the quarter and other business 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 877-741-4253 in the United States or 719-325-4802 outside the United States. The confirmation code is 4938179. 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, Nov. 14, 2016, by calling 888-203-1112 in the United States or 719-457-0820 outside the United States and using the code 4938179. A replay and transcript also will be available by accessing the investors' section of the company's website.

Special Items and Non-GAAP Reconciliation

The following table presents a reconciliation of GAAP reported to adjusted diluted EPS for quarterly results in 2016 and 2015:


(In millions, except per-share amounts)

After-Tax
Amount

3Q 2016
EPS

3Q 2015
EPS

Diluted EPS, as reported


$

1.70


$

1.35


Adjustments to reported EPS:




Third Quarter 2016




Costs to achieve, mergers

$

52


0.07



Cost saving initiatives

12


0.02



Commercial Renewables impairment

45


0.07



Discontinued operations

(122)


(0.18)



Third Quarter 2015




Costs to achieve, Progress merger

15



0.02


Edwardsport Settlement

56



0.08


Ash Basin Settlement

4



0.01


Discontinued operations

5



0.01


Total adjustments


$

(0.02)


$

0.12


Diluted EPS, as adjusted


$

1.68


$

1.47


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.

Duke Energy is one of the largest electric power holding companies in the United States. Its regulated utility operations serve approximately 7.4 million electric customers located in six states in the Southeast and Midwest, representing a population of approximately 24 million people. The company also distributes natural gas to more than 1.5 million customers in the Carolinas, Ohio, Kentucky and Tennessee. Its Commercial Portfolio and International business segments own and operate diverse power generation assets in North America and Latin America, including a growing portfolio of renewable energy assets in the United States.

Headquartered in Charlotte, N.C., Duke Energy is an S&P 100 Stock Index company traded on the New York Stock Exchange under the symbol DUK. More information about the company is available at duke-energy.com.

The Duke Energy News Center serves as a multimedia resource for journalists and features news releases, helpful links, photos and videos. Hosted by Duke Energy, illumination is an online destination for stories about remarkable people, innovations, and community and environmental topics. It also offers glimpses into the past and insights into the future of energy.

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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 or climate change, as well as rulings that affect cost and investment recovery or have an impact on rate structures or market prices; the extent and timing of costs and liabilities to comply with federal and state regulations related to coal ash, including amounts for the 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 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; credit ratings of the company or its subsidiaries may be different from what is expected; 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 variations in customer usage patterns, including energy efficiency efforts and use of alternative energy sources, including self-generation and distributed generation technologies; advancements in technology; additional competition in electric markets and continued industry consolidation; political, economic and regulatory uncertainty in Brazil and other countries in which Duke Energy conducts business; the influence of weather and other natural phenomena on operations, including the economic, operational and other effects of severe storms, hurricanes, droughts, earthquakes and tornadoes; 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 interruptions to our gas distribution and transmission activities; 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; the timing and extent of changes in commodity prices, interest rates and foreign currency exchange rates and the ability to recover such costs through the regulatory process, where appropriate, and their impact on liquidity positions and the value of underlying assets; the results of financing efforts, including the ability to obtain financing on favorable terms, which can be affected by various factors, including credit ratings, interest rate fluctuations and general economic conditions; declines in the market prices of equity and fixed income securities and resultant cash funding requirements for defined benefit pension plans, other post-retirement benefit plans, and nuclear decommissioning trust funds; 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; the impact of potential goodwill impairments; the ability to successfully complete future merger, acquisition or divestiture plans, including the proposed sale of International Energy, excluding the equity investment in National Methanol Company; and the ability to successfully integrate the natural gas businesses since the acquisition of Piedmont Natural Gas Company, Inc. and realize anticipated benefits and the risk that the credit ratings of the combined company or its subsidiaries may be different from what the companies expect.

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.

 

September 2016

QUARTERLY HIGHLIGHTS

(Unaudited)










Three Months Ended
September 30,


Nine Months Ended
September 30,

(In millions, except per-share amounts and where noted)

2016


2015


2016


2015

Earnings Per Share - Basic and Diluted








Income from continuing operations attributable to Duke Energy Corporation common stockholders








Basic

$

1.52



$

1.36



$

3.27



$

3.31


Diluted

$

1.52



$

1.36



$

3.26



$

3.31










Income (Loss) from discontinued operations attributable to Duke Energy Corporation common stockholders








Basic

$

0.18



$

(0.01)



$

0.18



$

0.05


Diluted

$

0.18



$

(0.01)



$

0.18



$

0.05










Net income attributable to Duke Energy Corporation common stockholders








Basic

$

1.70



$

1.35



$

3.45



$

3.36


Diluted

$

1.70



$

1.35



$

3.44



$

3.36










Weighted average shares outstanding








Basic

689



688



689



696


Diluted

691



688



690



696










SEGMENT INCOME (LOSS) BY BUSINESS SEGMENT








Regulated Utilities(a)

$

1,200



$

905



$

2,613



$

2,311


International Energy(b)

64



69



85



157


Commercial Portfolio(c)(d)

(21)



8



20



(15)


Total Reportable Segment Income

1,243



982



2,718



2,453


Other Net Expense(e)(f)(g)

(189)



(45)



(463)



(139)


Intercompany Eliminations







(4)


Income (Loss) from Discontinued Operations, net of tax(h)(i)

122



(5)



124



29


Net Income Attributable to Duke Energy Corporation

$

1,176



$

932



$

2,379



$

2,339










CAPITALIZATION








Total Common Equity (%)





45 %



48 %


Total Debt (%)





55 %



52 %










Total Debt





$

50,176



$

42,457


Book Value Per Share





$

58.85



$

57.92


Actual Shares Outstanding





689



688










CAPITAL AND INVESTMENT EXPENDITURES








Regulated Utilities(j)

$

1,674



$

2,539



$

4,687



$

5,212


International Energy

11



14



26



33


Commercial Portfolio

192



374



614



757


Other

44



52



123



166


Total Capital and Investment Expenditures

$

1,921



$

2,979



$

5,450



$

6,168


















Note: Certain prior period amounts have been reclassified to conform to the current year presentation.









(a) Includes a charge of $56 million (net of tax of $34 million) related to the Edwardsport settlement for the three and nine months ended September 30, 2015.

(b) Includes an impairment charge of $145 million (net of tax of $49 million) for the nine months ended September 30, 2016, related to certain assets in Central America, as well as a tax benefit of $95 million resulting from the ability to more efficiently utilize foreign tax credits.

(c) Includes an impairment charge of $45 million (net of tax of $26 million) for the three and nine months ended September 30, 2016, related to certain equity investments in wind projects.

(d) Includes a tax charge of $41 million for the nine months ended September 30, 2015, resulting from the completion of the sale of the nonregulated Midwest generation business.

(e) Includes costs to achieve mergers of $52 million for the three months ended September 30, 2016 (net of tax of $32 million), and $195 million for the nine months ended September 30, 2016 (net of tax of $120 million). These costs primarily consist of losses on forward-starting interest rate swaps associated with the Piedmont acquisition financing.

(f) Includes costs to achieve Progress merger of $15 million for the three months ended September 30, 2015 (net of tax of $9 million), and $42 million for the nine months ended September 30, 2015 (net of tax of $25 million).

(g) Includes a charge of $12 million for the three months ended September 30, 2016 (net of tax of $7 million) and $39 million for the nine months ended September 30, 2016 (net of tax of $24 million), primarily consisting of severance expense related to cost savings initiatives.

(h) Includes an income tax benefit of $122 million for the three and nine months ended September 30, 2016, resulting from deferred tax liability adjustments related to the Midwest Generation Disposal Group and another previously sold business.

(i) Includes the impact of a litigation reserve related to the nonregulated Midwest generation business of $53 million for the nine months ended September 30, 2015 (net of tax of $28 million).

(j) Includes $1.25 billion related to the NCEMPA acquisition for the three and nine months ended September 30, 2015.

 

 

September 2016

QUARTERLY HIGHLIGHTS

(Unaudited)










Three Months Ended


Nine Months Ended


September 30,


September 30,

(In millions, except for GWh and MW amounts)

2016


2015


2016


2015

REGULATED UTILITIES








  Operating Revenues

$

6,430



$

6,147



$

16,788



$

17,090


  Operating Expenses

4,385



4,481



12,124



12,789


  Gains on Sales of Other Assets and Other, net

1



1



3



10


  Operating Income

2,046



1,667



4,667



4,311


  Other Income and Expenses

75



56



213



187


  Interest Expense

293



280



848



829


  Income Before Income Taxes

1,828



1,443



4,032



3,669


  Income Tax Expense

628



538



1,419



1,358


  Segment Income

$

1,200



$

905



$

2,613



$

2,311










  Depreciation and Amortization

$

749



$

691



$

2,198



$

2,096


INTERNATIONAL ENERGY








  Operating Revenues

$

245



$

281



$

761



$

841


  Operating Expenses

177



200



713



639


  Loss on Sales of Other Assets and Other, net

(1)





(2)



(1)


  Operating Income

67



81



46



201


  Other Income and Expenses

23



24



62



69


  Interest Expense

19



21



63



66


  Income Before Income Taxes

71



84



45



204


  Income Tax Expense (Benefit)

4



14



(48)



44


  Less: Income Attributable to Noncontrolling Interests

3



1



8



3


  Segment Income

$

64



$

69



$

85



$

157










  Depreciation and Amortization

$

18



$

23



$

62



$

69










  Sales, GWh

5,017



4,590



16,522



13,580


  Proportional MW Capacity in Operation





4,315



4,333


COMMERCIAL PORTFOLIO








  Operating Revenues

$

140



$

66



$

366



$

214


  Operating Expenses

141



82



373



255


  Gains on Sales of Other Assets and Other, net

1





3



6


  Operating Loss



(16)



(4)



(35)


  Other Income and Expenses

(69)



(3)



(63)



(3)


  Interest Expense

15



11



38



33


  Loss Before Income Taxes

(84)



(30)



(105)



(71)


  Income Tax Benefit

(62)



(37)



(123)



(55)


  Less: Loss Attributable to Noncontrolling Interests

(1)



(1)



(2)



(1)


  Segment (Loss) Income

$

(21)



$

8



$

20



$

(15)










  Depreciation and Amortization

$

33



$

27



$

96



$

77










  Actual Renewable Plant Production, GWh

1,801



1,230



5,619



3,913


  Net Proportional MW Capacity in Operation





2,725



1,634


OTHER








  Operating Revenues

$

32



$

17



$

91



$

78


  Operating Expenses

128



64



316



177


  Gains on Sales of Other Assets and Other, net

5



3



16



16


  Operating Loss

(91)



(44)



(209)



(83)


  Other Income and Expenses

12



(2)



30



8


  Interest Expense

157



91



553



285


  Loss Before Income Taxes

(236)



(137)



(732)



(360)


  Income Tax Benefit

(50)



(95)



(276)



(229)


  Less: Income Attributable to Noncontrolling Interests

3



3



7



8


  Other Net Expense

$

(189)



$

(45)



$

(463)



$

(139)










  Depreciation and Amortization

$

37



$

33



$

108



$

99










Note: Certain prior period amounts have been reclassified to conform to the current year presentation.


 

 

DUKE ENERGY CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In millions, except per-share amounts)










Three Months Ended
September 30,


Nine Months Ended
September 30,


2016


2015


2016


2015

Operating Revenues








Regulated electric

$

6,303



$

6,017



$

16,321



$

16,564


Nonregulated electric and other

429



377



1,251



1,157


Regulated natural gas

89



89



355



416


Total operating revenues

6,821



6,483



17,927



18,137


Operating Expenses








Fuel used in electric generation and purchased power - regulated

2,016



2,113



5,102



5,775


Fuel used in electric generation and purchased power - nonregulated

75



61



215



283


Cost of natural gas

17



21



98



158


Operation, maintenance and other

1,547



1,426



4,467



4,274


Depreciation and amortization

837



774



2,464



2,341


Property and other taxes

303



293



893



836


Impairment charges

10



111



208



111


Total operating expenses

4,805



4,799



13,447



13,778


Gains on Sales of Other Assets and Other, net

6



4



20



31


Operating Income

2,022



1,688



4,500



4,390


Other Income and Expenses








Equity in earnings (losses) of unconsolidated affiliates

(60)



17



(37)



53


Other income and expenses, net

99



57



270



203


Total other income and expenses

39



74



233



256


Interest Expense

482



402



1,493



1,208


Income From Continuing Operations Before Income Taxes

1,579



1,360



3,240



3,438


Income Tax Expense from Continuing Operations

520



420



972



1,118


Income From Continuing Operations

1,059



940



2,268



2,320


Income (Loss) From Discontinued Operations, net of tax

122



(5)



124



29


Net Income

1,181



935



2,392



2,349


Less: Net Income Attributable to Noncontrolling Interests

5



3



13



10


Net Income Attributable to Duke Energy Corporation

$

1,176



$

932



$

2,379



$

2,339










Earnings Per Share - Basic and Diluted








Income from continuing operations attributable to Duke Energy Corporation common stockholders








Basic

$

1.52



$

1.36



$

3.27



$

3.31


Diluted

$

1.52



$

1.36



$

3.26



$

3.31


Income (Loss) from discontinued operations attributable to Duke Energy Corporation common stockholders








Basic

$

0.18



$

(0.01)



$

0.18



$

0.05


Diluted

$

0.18



$

(0.01)



$

0.18



$

0.05


Net income attributable to Duke Energy Corporation common stockholders








Basic

$

1.70



$

1.35



$

3.45



$

3.36


Diluted

$

1.70



$

1.35



$

3.44



$

3.36


Weighted average shares outstanding








Basic

689



688



689



696


Diluted

691



688



690



696


 

 

DUKE ENERGY CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)







(in millions)


September 30, 2016


December 31, 2015

ASSETS





Current Assets





Cash and cash equivalents


$

6,179



$

857


Receivables (net of allowance for doubtful accounts of $25 at 2016 and $18 at 2015)


583



703


Receivables of VIEs (net of allowance for doubtful accounts of $54 at 2016 and $53 at 2015)


2,139



1,748


Inventory


3,351



3,810


Regulatory assets (includes $51 related to VIEs at 2016)


853



877


Other


429



327


Total current assets


13,534



8,322


Investments and Other Assets





Investments in equity method unconsolidated affiliates


604



499


Nuclear decommissioning trust funds


6,112



5,825


Goodwill


16,354



16,343


Other


2,948



3,042


Total investments and other assets


26,018



25,709


Property, Plant and Equipment





Cost


116,376



112,826


Accumulated depreciation and amortization


(38,812)



(37,665)


Generation facilities to be retired, net


652



548


Net property, plant and equipment


78,216



75,709


Regulatory Assets and Deferred Debits





Regulatory assets (includes $1,156 related to VIEs at 2016)


11,896



11,373


Other


22



43


Total regulatory assets and deferred debits


11,918



11,416


Total Assets


$

129,686



$

121,156


LIABILITIES AND EQUITY





Current Liabilities





Accounts payable


$

2,138



$

2,400


Notes payable and commercial paper


3,011



3,633


Taxes accrued


636



348


Interest accrued


504



430


Current maturities of long-term debt (includes $258 at 2016 and $125 at 2015 related to VIEs)


3,201



2,074


Asset retirement obligations


539




Regulatory liabilities


319



400


Other


1,728



2,115


Total current liabilities


12,076



11,400


Long-Term Debt (includes $3,641 at 2016 and $2,197 at 2015 related to VIEs)


43,964



37,495


Deferred Credits and Other Liabilities





Deferred income taxes


13,201



12,705


Investment tax credits


486



472


Accrued pension and other post-retirement benefit costs


1,030



1,088


Asset retirement obligations


10,291



10,264


Regulatory liabilities


6,241



6,255


Other


1,851



1,706


Total deferred credits and other liabilities


33,100



32,490


Commitments and Contingencies





Equity





Common stock, $0.001 par value, 2 billion shares authorized; 689 million and 688 million shares outstanding at 2016 and 2015, respectively


1



1


Additional paid-in capital


37,997



37,968


Retained earnings


3,212



2,564


Accumulated other comprehensive loss


(721)



(806)


Total Duke Energy Corporation stockholders' equity


40,489



39,727


Noncontrolling interests


57



44


Total equity


40,546



39,771


Total Liabilities and Equity


$

129,686



$

121,156


 

 

DUKE ENERGY CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In millions)








Nine Months Ended September 30,



2016


2015

CASH FLOWS FROM OPERATING ACTIVITIES





Net Income


$

2,392



$

2,349


Adjustments to reconcile net income to net cash provided by operating activities


3,200



3,047


Net cash provided by operating activities


5,592



5,396







CASH FLOWS FROM INVESTING ACTIVITIES





Net cash used in investing activities


(5,555)



(3,291)







CASH FLOWS FROM FINANCING ACTIVITIES





Net cash provided by (used in) financing activities


5,285



(2,771)







Net increase (decrease) in cash and cash equivalents


5,322



(666)


Cash and cash equivalents at the beginning of period


857



2,036


Cash and cash equivalents at end of period


$

6,179



$

1,370


 

 

DUKE ENERGY CORPORATION

EARNINGS VARIANCES

September 2016 QTD vs. Prior Year


($ per share)

Regulated Utilities


International Energy


Commercial Portfolio


Other


Discontinued Operations


Consolidated

2015 QTD Reported Earnings Per Share, Diluted

$

1.31



$

0.10



$

0.01



$

(0.06)



$

(0.01)



$

1.35


Costs to Achieve, Progress Merger







0.02





0.02


Edwardsport Settlement

0.08











0.08


Ash Basin Settlement

0.01











0.01


Discontinued Operations









0.01



0.01


2015 QTD Adjusted Earnings Per Share, Diluted

$

1.40



$

0.10



$

0.01



$

(0.04)



$



$

1.47


Weather

0.14











0.14


Pricing and Riders (a)

0.05











0.05


Volume

0.04











0.04


Wholesale (b)

0.03











0.03


Operations and Maintenance, net of recoverables

0.02











0.02


Latin America, including Foreign Exchange Rates












National Methanol Company



(0.01)









(0.01)


Duke Energy Renewables (c)





0.02







0.02


Commercial Transmission, Pipeline and Other












Interest Expense

(0.01)







(0.01)





(0.02)


Change in effective income tax rate

0.08



0.01





(0.13)





(0.04)


Other

(0.01)



(0.01)









(0.02)


2016 QTD Adjusted Earnings Per Share, Diluted

$

1.74



$

0.09



$

0.03



$

(0.18)



$



$

1.68


Costs to Achieve, Mergers







(0.07)





(0.07)


Cost Savings Initiatives







(0.02)





(0.02)


Commercial Renewables Impairment





(0.07)







(0.07)


Discontinued Operations









0.18



0.18


2016 QTD Reported Earnings Per Share, Diluted

$

1.74



$

0.09



$

(0.04)



$

(0.27)



$

0.18



$

1.70
















Note 1: Earnings Per Share amounts are calculated using the consolidated statutory income tax rate for all variance drivers except Duke Energy Renewables, which uses an effective tax rate.


Note 2: Adjusted and Reported Earnings Per Share amounts by segment may not recompute from other published schedules due to rounding.


Note 3: Certain prior period amounts have been reclassified to conform to the current year presentation.



(a)

Primarily due to the NCEMPA rider (+$0.02) and higher energy efficiency recoveries at Duke Energy Progress (+$0.01).

(b)

Primarily due to the implementation of new contracts.

(c)

Primarily due to new wind and solar growth and higher wind production.

 

 

DUKE ENERGY CORPORATION

EARNINGS VARIANCES

September 2016 YTD vs. Prior Year


($ per share)

Regulated Utilities


International Energy


Commercial Portfolio


Other


Discontinued Operations


Consolidated

2015 YTD Reported Earnings Per Share, Diluted

$

3.32



$

0.22



$

(0.03)



$

(0.19)



$

0.04



$

3.36


Costs to Achieve, Progress Merger







0.05





0.05


Edwardsport Settlement

0.08











0.08


Midwest Generation Operations





0.14







0.14


Ash Basin Settlement

0.01











0.01


Discontinued Operations





0.06





(0.04)



0.02


2015 YTD Adjusted Earnings Per Share, Diluted

$

3.41



$

0.22



$

0.17



$

(0.14)



$



$

3.66


Stock repurchase (a)

0.03



0.01









0.04


Weather

0.03











0.03


Pricing and Riders (b)

0.16











0.16


Volume

0.04











0.04


Wholesale (c)

0.07











0.07


Operations and Maintenance, net of recoverables (d)

0.06











0.06


Latin America, including Foreign Exchange Rates (e)



0.05









0.05


National Methanol Company



(0.05)









(0.05)


Duke Energy Renewables (f)





0.03







0.03


Commercial Transmission, Pipeline and Other





0.01







0.01


Midwest Generation (g)





(0.12)







(0.12)


Interest Expense

(0.01)







(0.03)





(0.04)


Change in effective income tax rate (h)

0.10



0.10





(0.14)





0.06


Other (i)

(0.10)







(0.02)





(0.12)


2016 YTD Adjusted Earnings Per Share, Diluted

$

3.79



$

0.33



$

0.09



$

(0.33)



$



$

3.88


Costs to Achieve, Mergers







(0.28)





(0.28)


International Impairment



(0.21)









(0.21)


Cost Savings Initiatives







(0.06)





(0.06)


Commercial Renewables Impairment





(0.07)







(0.07)


Discontinued Operations









0.18



0.18


2016 YTD Reported Earnings Per Share, Diluted

$

3.79



$

0.12



$

0.02



$

(0.67)



$

0.18



$

3.44
















Note 1: Earnings Per Share amounts are calculated using the consolidated statutory income tax rate for all variance drivers except Duke Energy Renewables, which uses an effective tax rate.


Note 2: Adjusted and Reported Earnings Per Share amounts by segment may not recompute from other published schedules due to rounding.


Note 3: Certain prior period amounts have been reclassified to conform to the current year presentation.



(a)

Due to the decrease in common shares outstanding as a result of the Accelerated Stock Repurchase Program. Weighted average diluted shares outstanding decreased from 696 million shares to 690 million shares.

(b)

Primarily due to the NCEMPA rider (+$0.06), higher energy efficiency recoveries in the Carolinas (+$0.05), and a prior year unfavorable regulatory order in Ohio related to energy efficiency (+$0.02).

(c)

Primarily due to the implementation of the new 30-year contract with NCEMPA.

(d)

Primarily due to lower outage costs and cost control efforts, partially offset by increased storm restoration costs and costs related to the NCEMPA asset purchase.

(e)

Primarily due to higher results in Brazil due to improved hydrology, partially offset by weaker foreign currency exchange rates (-$0.02).

(f)

Primarily due to new wind and solar growth and higher wind production.

(g)

Due to the absence of earnings from the nonregulated Midwest generation business, which was sold in April 2015.

(h)

International Energy includes lower income taxes resulting from the decision to divest the International Energy segment combined with more efficient utilization of foreign tax credits.

(i)

Regulated Utilities includes increased depreciation and amortization expense (-$0.08) due to higher depreciable base including the NCEMPA asset purchase, and higher non-income taxes (-$0.05) primarily due to increased property taxes.

 

 

Regulated Utilities

Quarterly Highlights

Supplemental Regulated Utilities Electric Information

September 2016




















Three Months Ended September 30,


Nine Months Ended September 30,



2016


2015


%

Inc.(Dec.)


% Inc.(Dec.)

Weather

Normal (2)


2016


2015


%

Inc.(Dec.)


% Inc.(Dec.)

Weather

Normal (2)

GWh Sales (1)

















Residential

26,103



24,176



8.0%



2.3%



65,450



66,195



(1.1%)



1.0%



General Service

22,768



22,047



3.3%



2.1%



59,291



59,124



0.3%



0.2%



Industrial

13,854



14,001



(1.0%)



(1.1%)



39,147



39,370



(0.6%)



(0.4%)



Other Energy Sales

144



149



(3.4%)





435



450



(3.3%)





Unbilled Sales

(703)



(1,808)



61.1%



n/a



1,078



(476)



326.5%



n/a



Total Retail Sales

62,166



58,565



6.1%



1.4%



165,401



164,663



0.4%



0.4%



Special Sales

12,102



10,450



15.8%





33,783



28,551



18.3%





Total Consolidated Electric Sales - Regulated Utilities

74,268



69,015



7.6%





199,184



193,214



3.1%





















Average Number of Customers (Electric)

















Residential

6,455,615



6,365,092



1.4%





6,439,699



6,351,973



1.4%





General Service

964,893



954,659



1.1%





961,246



951,350



1.0%





Industrial

17,807



18,105



(1.6%)





17,868



18,150



(1.6%)





Other Energy Sales

23,138



23,113



0.1%





23,117



23,024



0.4%





Total Regular Sales

7,461,453



7,360,969



1.4%





7,441,930



7,344,497



1.3%





Special Sales

61



64



(4.7%)





61



63



(3.2%)





Total Average Number of Customers - Regulated Utilities

7,461,514



7,361,033



1.4%





7,441,991



7,344,560



1.3%





















Sources of Electric Energy (GWh)

















Generated - Net Output (3)

















Coal

24,665



23,509



4.9%





58,367



62,433



(6.5%)





Nuclear

19,177



18,469



3.8%





55,785



52,580



6.1%





Hydro

131



91



44.0%





1,502



1,025



46.5%





Oil and Natural Gas

17,594



16,533



6.4%





48,461



46,054



5.2%





Renewable Energy

60



3



1,900.0%





158



10



1,480.0%





Total Generation (4)

61,627



58,605



5.2%





164,273



162,102



1.3%





Purchased Power and Net Interchange (5)

17,105



(2,765)



718.6%





45,757



24,461



87.1%





Total Sources of Energy

78,732



55,840



41.0%





210,030



186,563



12.6%





Less: Line Loss and Company Usage

4,464



2,604



71.4%





10,846



9,128



18.8%





Total GWh Sources

74,268



53,236



39.5%





199,184



177,435



12.3%





















Owned MW Capacity (3)

















Summer









49,839



50,081







Winter









53,028



53,346






Nuclear Capacity Factor (%) (6)









96



95









































(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.


















 

 

Duke Energy Carolinas

Quarterly Highlights

Supplemental Regulated Utilities Electric Information

 September 2016




















Three Months Ended September 30,


Nine Months Ended September 30,



2016


2015


%

Inc.(Dec.)


% Inc.(Dec.)

Weather

Normal (2)


2016


2015


%

Inc.(Dec.)


% Inc.(Dec.)

Weather

Normal (2)

GWh Sales (1)

















Residential

8,804



8,213



7.2%





22,055



22,445



(1.7%)





General Service

8,507



8,273



2.8%





22,105



22,074



0.1%





Industrial

5,923



6,041



(2.0%)





16,546



16,730



(1.1%)





Other Energy Sales

76



76



—%





228



229



(0.4%)





Unbilled Sales

(446)



(1,047)



57.4%





244



(693)



135.2%





Total Regular Electric Sales

22,864



21,556



6.1%



1.5%



61,178



60,785



0.6%



0.4%



Special Sales

2,644



2,181



21.2%





6,712



6,726



(0.2%)





Total Consolidated Electric Sales - Duke Energy Carolinas

25,508



23,737



7.5%





67,890



67,511



0.6%





















Average Number of Customers

















Residential

2,151,654



2,120,091



1.5%





2,144,598



2,113,735



1.5%





General Service

350,252



346,039



1.2%





348,819



344,699



1.2%





Industrial

6,276



6,414



(2.2%)





6,303



6,444



(2.2%)





Other Energy Sales

15,224



15,095



0.9%





15,170



15,014



1.0%





Total Regular Sales

2,523,406



2,487,639



1.4%





2,514,890



2,479,892



1.4%





Special Sales

24



24



—%





24



25



(4.0%)





Total Average Number of Customers - Duke Energy Carolinas

2,523,430



2,487,663



1.4%





2,514,914



2,479,917



1.4%





















Sources of Electric Energy (GWh)

















Generated - Net Output (3)

















Coal

9,395



8,597



9.3%





20,056



22,127



(9.4%)





Nuclear

11,607



10,991



5.6%





33,409



34,110



(2.1%)





Hydro

(35)



(40)



12.5%





802



436



83.9%





Oil and Natural Gas

3,216



2,945



9.2%





8,893



7,936



12.1%





Renewable Energy

3



3



—%





10



10



—%





Total Generation (4)

24,186



22,496



7.5%





63,170



64,619



(2.2%)





Purchased Power and Net Interchange (5)

2,729



2,731



(0.1%)





8,796



6,988



25.9%





Total Sources of Energy

26,915



25,227



6.7%





71,966



71,607



0.5%





Less: Line Loss and Company Usage

1,407



1,490



(5.6%)





4,076



4,096



(0.5%)





Total GWh Sources

25,508



23,737



7.5%





67,890



67,511



0.6%





















Owned MW Capacity (3)

















Summer









19,678



19,645







Winter









20,383



20,360






Nuclear Capacity Factor (%) (6)









96



97























Heating and Cooling Degree Days

















Actual

















Heating Degree Days



5



(100.0%)





1,861



2,109



(11.8%)





Cooling Degree Days

1,301



1,085



19.9%





1,890



1,709



10.6%






















Variance from Normal

















Heating Degree Days

(100.0%)



(51.6%)



n/a





(7.1%)



9.4%



n/a





Cooling Degree Days

33.6%



6.2%



n/a





29.0%



9.8%



n/a







































(1)  Except as indicated in footnote (2), represents non-weather normalized billed sales, with energy delivered but not yet billed (i.e. unbilled sales) reflected as a single amount and not allocated to the respective retail classes.



















(2)  Represents weather normal total retail calendar sales (i.e. billed and unbilled sales).



















(3)  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.

 

 

Duke Energy Progress

Quarterly Highlights

Supplemental Regulated Utilities Electric Information

September 2016




















Three Months Ended September 30,


Nine Months Ended September 30,



2016


2015


%

Inc.(Dec)


% Inc.(Dec.)

Weather

Normal (2)


2016


2015


%

Inc.(Dec)


% Inc.(Dec.)

Weather

Normal (2)

GWh Sales (1)

















Residential

5,406



5,107



5.9%





14,003



14,547



(3.7%)





General Service

4,667



4,563



2.3%





12,007



12,000



0.1%





Industrial

2,806



2,788



0.6%





7,792



7,790



—%





Other Energy Sales

22



26



(15.4%)





68



81



(16.0%)





Unbilled Sales

(112)



(481)



76.7%





98



(352)



127.8%





Total Regular Electric Sales

12,789



12,003



6.5%



1.4%



33,968



34,066



(0.3%)



0.2%



Special Sales

7,244



6,280



15.4%





20,043



15,934



25.8%





Total Consolidated Electric Sales - Duke Energy Progress

20,033



18,283



9.6%





54,011



50,000



8.0%





















Average Number of Customers

















Residential

1,294,491



1,276,474



1.4%





1,289,892



1,272,450



1.4%





General Service

229,854



227,015



1.3%





228,698



225,721



1.3%





Industrial

4,131



4,204



(1.7%)





4,142



4,221



(1.9%)





Other Energy Sales

1,505



1,683



(10.6%)





1,549



1,687



(8.2%)





Total Regular Sales

1,529,981



1,509,376



1.4%





1,524,281



1,504,079



1.3%





Special Sales

15



15



—%





15



15



—%





Total Average Number of Customers - Duke Energy Progress

1,529,996



1,509,391



1.4%





1,524,296



1,504,094



1.3%





















Sources of Electric Energy (GWh)

















Generated - Net Output (3)

















Coal

5,073



4,110



23.4%





9,508



11,454



(17.0%)





Nuclear

7,570



7,478



1.2%





22,376



18,470



21.1%





Hydro

71



55



29.1%





449



389



15.4%





Oil and Natural Gas

5,942



5,857



1.5%





18,037



17,183



5.0%





Renewable Energy

55





n/a





146





n/a





Total Generation (4)

18,711



17,500



6.9%





50,516



47,496



6.4%





Purchased Power and Net Interchange (5)

2,129



1,447



47.1%





5,391



4,627



16.5%





Total Sources of Energy

20,840



18,947



10.0%





55,907



52,123



7.3%





Less: Line Loss and Company Usage

807



664



21.5%





1,896



2,123



(10.7%)





Total GWh Sources

20,033



18,283



9.6%





54,011



50,000



8.0%





















Owned MW Capacity (3)

















Summer









12,935



12,923







Winter









14,034



14,042






Nuclear Capacity Factor (%) (6)









96



89























Heating and Cooling Degree Days

















Actual

















Heating Degree Days



1



(100.0%)





1,693



2,004



(15.5%)





Cooling Degree Days

1,343



1,131



18.7%





1,955



1,779



9.9%






















Variance from Normal

















Heating Degree Days

(100.0%)



(78.3%)



n/a





(7.4%)



13.3%



n/a





Cooling Degree Days

28.5%



2.7%



n/a





23.3%



5.8%



n/a







































(1)  Except as indicated in footnote (2), represents non-weather normalized billed sales, with energy delivered but not yet billed (i.e. unbilled sales) reflected as a single amount and not allocated to the respective retail classes.



















(2)  Represents weather normal total retail calendar sales (i.e. billed and unbilled sales).



















(3)  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.

 

 

Duke Energy Florida

Quarterly Highlights

Supplemental Regulated Utilities Electric Information

September 2016




















Three Months Ended September 30,


Nine Months Ended September 30,



2016


2015


%

Inc.(Dec)


% Inc.(Dec.)

Weather

Normal (2)


2016


2015


%

Inc.(Dec)


% Inc.(Dec.)

Weather

Normal (2)

GWh Sales (1)

















Residential

6,608



6,152



7.4%





15,653



15,200



3.0%





General Service

4,432



4,309



2.9%





11,493



11,401



0.8%





Industrial

817



861



(5.1%)





2,381



2,442



(2.5%)





Other Energy Sales

6



6



—%





18



18



—%





Unbilled Sales

(160)



(226)



29.2%





498



567



(12.2%)





Total Regular Electric Sales

11,703



11,102



5.4%



1.4%



30,043



29,628



1.4%



1.1%



Special Sales

737



411



79.3%





1,499



1,160



29.2%





Total Electric Sales - Duke Energy Florida

12,440



11,513



8.1%





31,542



30,788



2.4%





















Average Number of Customers

















Residential

1,550,574



1,526,065



1.6%





1,546,245



1,521,345



1.6%





General Service

196,142



193,645



1.3%





195,402



193,161



1.2%





Industrial

2,168



2,249



(3.6%)





2,184



2,250



(2.9%)





Other Energy Sales

1,529



1,534



(0.3%)





1,534



1,537



(0.2%)





Total Regular Sales

1,750,413



1,723,493



1.6%





1,745,365



1,718,293



1.6%





Special Sales

14



14



—%





14



14



—%





Total Average Number of Customers - Duke Energy Florida

1,750,427



1,723,507



1.6%





1,745,379



1,718,307



1.6%





















Sources of Electric Energy (GWh)

















Generated - Net Output (3)

















Coal

2,823



2,909



(3.0%)





6,605



8,106



(18.5%)





Oil and Natural Gas

7,610



7,215



5.5%





19,371



19,128



1.3%





Renewable Energy

2





n/a





2





n/a





Total Generation (4)

10,435



10,124



3.1%





25,978



27,234



(4.6%)





Purchased Power and Net Interchange (5)

2,768



1,986



39.4%





7,407



5,280



40.3%





Total Sources of Energy

13,203



12,110



9.0%





33,385



32,514



2.7%





Less: Line Loss and Company Usage

763



597



27.8%





1,843



1,726



6.8%





Total GWh Sources

12,440



11,513



8.1%





31,542



30,788



2.4%





















Owned MW Capacity (3)

















Summer









9,021



8,958







Winter









9,926



9,909























Heating and Cooling Degree Days

















Actual

















Heating Degree Days





—%





401



373



7.5%





Cooling Degree Days

1,598



1,487



7.5%





2,909



2,977



(2.3%)






















Variance from Normal

















Heating Degree Days

—%



—%



n/a





1.3%



(6.2%)



n/a





Cooling Degree Days

8.0%



(1.6%)



n/a





7.9%



8.8%



n/a







































(1)  Except as indicated in footnote (2), represents non-weather normalized billed sales, with energy delivered but not yet billed (i.e. unbilled sales) reflected as a single amount and not allocated to the respective retail classes.



















(2)  Represents weather normal total retail calendar sales (i.e. billed and unbilled sales).



















(3)  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.

 

 

Duke Energy Ohio

Quarterly Highlights

Supplemental Regulated Utilities Electric Information

September 2016




















Three Months Ended September 30,


Nine Months Ended September 30,



2016


2015


%

Inc.(Dec)


% Inc.(Dec.)

Weather

Normal (2)


2016


2015


%

Inc.(Dec)


% Inc.(Dec.)

Weather

Normal (2)

GWh Sales (1)

















Residential

2,735



2,399



14.0%





6,802



6,891



(1.3%)





General Service

2,751



2,603



5.7%





7,326



7,281



0.6%





Industrial

1,577



1,580



(0.2%)





4,478



4,507



(0.6%)





Other Energy Sales

27



28



(3.6%)





82



82



—%





Unbilled Sales

16



(57)



128.1%





136



(8)



1,800.0%





Total Regular Electric Sales

7,106



6,553



8.4%



3.1%



18,824



18,753



0.4%



0.3%



Special Sales

108



145



(25.5%)





293



945



(69.0%)





Total Electric Sales - Duke Energy Ohio

7,214



6,698



7.7%





19,117



19,698



(2.9%)





















Average Number of Customers

















Residential

752,157



744,927



1.0%





752,530



746,183



0.9%





General Service

87,582



87,234



0.4%





87,522



87,203



0.4%





Industrial

2,506



2,525



(0.8%)





2,517



2,531



(0.6%)





Other Energy Sales

3,259



3,223



1.1%





3,253



3,215



1.2%





Total Regular Sales

845,504



837,909



0.9%





845,822



839,132



0.8%





Special Sales

1



1



—%





1



1



—%





Total Average Number of Customers - Duke Energy Ohio

845,505



837,910



0.9%





845,823



839,133



0.8%





















Sources of Electric Energy (GWh)

















Generated - Net Output (3)

















Coal

1,186



1,065



11.4%





2,650



3,453



(23.3%)





Oil and Natural Gas

17



13



30.8%





28



43



(34.9%)





Total Generation (4)

1,203



1,078



11.6%





2,678



3,496



(23.4%)





Purchased Power and Net Interchange (5)

6,655



(10,721)



162.1%





18,141



725



2,402.2%





Total Sources of Energy

7,858



(9,643)



181.5%





20,819



4,221



393.2%





Less: Line Loss and Company Usage

644



(562)



214.6%





1,702



302



463.6%





Total GWh Sources

7,214



(9,081)



179.4%





19,117



3,919



387.8%





















Owned MW Capacity (3)

















Summer









1,062



1,062







Winter









1,164



1,164























Heating and Cooling Degree Days

















Actual

















Heating Degree Days

24



21



14.3%





2,848



3,331



(14.5%)





Cooling Degree Days

973



703



38.4%





1,345



1,094



22.9%






















Variance from Normal

















Heating Degree Days

(60.0%)



(50.0%)



n/a





(8.2%)



11.3%



n/a





Cooling Degree Days

29.9%



(13.6%)



n/a





24.9%



(7.5%)



n/a







































(1)  Except as indicated in footnote (2), represents non-weather normalized billed sales, with energy delivered but not yet billed (i.e. unbilled sales) reflected as a single amount and not allocated to the respective retail classes.



















(2)  Represents weather normal total retail calendar sales (i.e. billed and unbilled sales).



















(3)  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.

 

 

Duke Energy Ohio

Quarterly Highlights

Supplemental Regulated Utilities Gas Information

September 2016




















Three Months Ended September 30,


Nine Months Ended September 30,



2016


2015


%

Inc.(Dec)


% Inc.(Dec.)

Weather

Normal (2)


2016


2015


%

Inc.(Dec)


% Inc.(Dec.)

Weather

Normal (2)

MCF Sales (1)

















Residential

1,664,506



1,755,562



(5.2%)





23,292,149



28,986,782



(19.6%)





General Service

1,805,312



1,838,773



(1.8%)





15,372,608



18,463,853



(16.7%)





Industrial

1,134,323



1,192,994



(4.9%)





5,017,068



5,604,282



(10.5%)





Other Energy Sales

4,904,296



4,439,138



10.5%





15,717,935



15,194,003



3.4%





Unbilled Sales

59,903



24,000



149.6%





(2,375,774)



(3,221,000)



26.2%





Total Gas Sales - Duke Energy Ohio

9,568,340



9,250,467



3.4%



2.7%



57,023,986



65,027,920



(12.3%)



(6.1%)




































Average Number of Customers

















Residential

473,823



471,005



0.6%





477,385



474,704



0.6%





General Service

41,180



41,294



(0.3%)





43,100



43,212



(0.3%)





Industrial

1,524



1,544



(1.3%)





1,608



1,618



(0.6%)





Other Energy Sales

143



142



0.7%





144



143



0.7%





Total Average Number of Gas Customers - Duke Energy Ohio

516,670



513,985



0.5%





522,237



519,677



0.5%























































Heating and Cooling Degree Days

















Actual

















Heating Degree Days

24



21



14.3%





2,848



3,331



(14.5%)





Cooling Degree Days

973



703



38.4%





1,345



1,094



22.9%






















Variance from Normal

















Heating Degree Days

(60.0%)



(50.0%)



n/a





(8.2%)



11.3%



n/a





Cooling Degree Days

29.9%



(13.6%)



n/a





24.9%



(7.5%)



n/a







































(1)  Except as indicated in footnote (2), represents non-weather normalized billed sales, with energy delivered but not yet billed (i.e. unbilled sales) reflected as a single amount and not allocated to the respective retail classes.



















(2)  Represents weather normal total retail calendar sales (i.e. billed and unbilled sales).



































 

 

Duke Energy Indiana

Quarterly Highlights

Supplemental Regulated Utilities Electric Information

September 2016




















Three Months Ended September 30,


Nine Months Ended September 30,



2016


2015


%

Inc.(Dec)


% Inc.(Dec.)

Weather

Normal (2)


2016


2015


%

Inc.(Dec)


% Inc.(Dec.)

Weather

Normal (2)

GWh Sales (1)

















Residential

2,550



2,305



10.6%





6,937



7,112



(2.5%)





General Service

2,411



2,299



4.9%





6,360



6,368



(0.1%)





Industrial

2,731



2,731



—%





7,950



7,901



0.6%





Other Energy Sales

13



13



—%





39



40



(2.5%)





Unbilled Sales

(1)



3



(133.3%)





102



10



920.0%





Total Regular Electric Sales

7,704



7,351



4.8%



(0.2%)



21,388



21,431



(0.2%)



(0.4%)



Special Sales

1,369



1,433



(4.5%)





5,236



3,786



38.3%





Total Electric Sales - Duke Energy Indiana

9,073



8,784



3.3%





26,624



25,217



5.6%





















Average Number of Customers

















Residential

706,739



697,535



1.3%





706,434



698,260



1.2%





General Service

101,063



100,726



0.3%





100,805



100,566



0.2%





Industrial

2,726



2,713



0.5%





2,722



2,704



0.7%





Other Energy Sales

1,621



1,578



2.7%





1,611



1,571



2.5%





Total Regular Sales

812,149



802,552



1.2%





811,572



803,101



1.1%





Special Sales

7



10



(30.0%)





7



8



(12.5%)





Total Average Number of Customers - Duke Energy Indiana

812,156



802,562



1.2%





811,579



803,109



1.1%





















Sources of Electric Energy (GWh)

















Generated - Net Output (3)

















Coal

6,188



6,828



(9.4%)





19,548



17,293



13.0%





Hydro

95



76



25.0%





251



200



25.5%





Oil and Natural Gas

809



503



60.8%





2,132



1,764



20.9%





Total Generation (4)

7,092



7,407



(4.3%)





21,931



19,257



13.9%





Purchased Power and Net Interchange (5)

2,824



1,792



57.6%





6,022



6,841



(12.0%)





Total Sources of Energy

9,916



9,199



7.8%





27,953



26,098



7.1%





Less: Line Loss and Company Usage

843



415



103.1%





1,329



881



50.9%





Total GWh Sources

9,073



8,784



3.3%





26,624



25,217



5.6%





















Owned MW Capacity (3)

















Summer









7,143



7,493







Winter









7,521



7,871























Heating and Cooling Degree Days

















Actual

















Heating Degree Days

21



26



(19.2%)





3,064



3,715



(17.5%)





Cooling Degree Days

932



706



32.0%





1,308



1,070



22.2%






















Variance from Normal

















Heating Degree Days

(69.1%)



(45.7%)



n/a





(8.3%)



15.9%



n/a





Cooling Degree Days

26.5%



(12.6%)



n/a





22.5%



(9.5%)



n/a







































(1)  Except as indicated in footnote (2), represents non-weather normalized billed sales, with energy delivered but not yet billed (i.e. unbilled sales) reflected as a single amount and not allocated to the respective retail classes.



















(2)  Represents weather normal total retail calendar sales (i.e. billed and unbilled sales).



















(3)  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.

 

 

DUKE ENERGY CORPORATION
REPORTED TO ADJUSTED EARNINGS RECONCILIATION
Three Months Ended September 30, 2016
(Dollars in millions, except per-share amounts)






Special Items









Reported Earnings


Costs to Achieve, Mergers


Cost Savings Initiatives


Commercial Renewables Impairment


Discontinued Operations


Total Adjustments


Adjusted Earnings

SEGMENT INCOME















Regulated Utilities


$

1,200



$



$



$



$



$



$

1,200


International Energy


64













64


Commercial Portfolio


(21)







45


C



45



24


Total Reportable Segment Income


1,243







45





45



1,288


Other


(189)



52


A

12


B





64



(125)


Total Reportable Segment Income and Other Net Expense


1,054



52



12



45





109



1,163


Discontinued Operations


122









(122)


D

(122)




Net Income Attributable to Duke Energy Corporation


$

1,176



$

52



$

12



$

45



$

(122)



$

(13)



$

1,163


EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, BASIC


$

1.70



$

0.08



$

0.02



$

0.07



$

(0.18)



$

(0.01)



$

1.69


EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, DILUTED


$

1.70



$

0.07



$

0.02



$

0.07



$

(0.18)



$

(0.02)



$

1.68



A - Net of $32 million tax benefit. Includes $33 million recorded within Operating Expenses and $51 million recorded within Interest Expense on the Condensed Consolidated Statements of Operations.


B - Net of $7 million tax benefit. Primarily consists of severance costs recorded within Operation, maintenance and other on the Condensed Consolidated Statements of Operations.


C - 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.


D - 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 

691


 

 

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


 

 

DUKE ENERGY CORPORATION
REPORTED TO ADJUSTED EARNINGS RECONCILIATION
Three Months Ended September 30, 2015
(Dollars in millions, except per-share amounts)






Special Items










Reported Earnings


Costs to Achieve, Progress Merger


Edwardsport Settlement


Ash Basin Settlement


Economic Hedges (Mark-to-Market) *


Discontinued Operations


Total Adjustments


Adjusted Earnings

SEGMENT INCOME

















Regulated Utilities


$

905



$



$

56


B

$

4


C

$



$



$

60



$

965


International Energy


69















69


Commercial Portfolio


8









(1)


D



(1)



7


Total Reportable Segment Income


982





56



4



(1)





59



1,041


Other


(45)



15


A









15



(30)


Total Reportable Segment Income and Other Net Expense


937



15



56



4



(1)





74



1,011


Discontinued Operations


(5)











5


E

5




Net Income Attributable to Duke Energy Corporation


$

932



$

15



$

56



$

4



$

(1)



$

5



$

79



$

1,011


EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, BASIC


$

1.35



$

0.02



$

0.08



$

0.01



$



$

0.01



$

0.12



$

1.47


EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, DILUTED


$

1.35



$

0.02



$

0.08



$

0.01



$



$

0.01



$

0.12



$

1.47



A - Net of $9 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 - 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.


D - Recorded within Operating Revenues on the Condensed Consolidated Statements of Operations.


E - Recorded in (Loss) Income From Discontinued Operations, net of tax on the Condensed Consolidated Statements of Operations.


Weighted Average Shares (reported and adjusted) - in millions


Basic

688



Diluted

688



* 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.

 


 

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.

 

 

DUKE ENERGY CORPORATION
ADJUSTED EFFECTIVE TAX RECONCILIATION
Three and Nine Months Ended September 30, 2016
(Dollars in Millions)




Three Months Ended
 September 30, 2016


Nine Months Ended
 September 30, 2016



Balance


Effective Tax Rate


Balance


Effective Tax Rate










Reported Income From Continuing Operations Before Income Taxes


$

1,579





$

3,240




Costs to Achieve, Mergers


84





315




International Impairment






194




Cost Savings Initiatives


19





63




Commercial Renewables Impairment


71





71




Noncontrolling Interests


(5)





(13)




Adjusted Pretax Income


$

1,748





$

3,870































Reported Income Tax Expense From Continuing Operations


$

520



32.9%



$

972



30.0%


Costs to Achieve, Mergers


32





120




International Impairment






49




Cost Savings Initiatives


7





24




Commercial Renewables Impairment


26





26




Adjusted Tax Expense


$

585



33.5%  *



$

1,191



30.8%  *











*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.

 

 

DUKE ENERGY CORPORATION
ADJUSTED EFFECTIVE TAX RECONCILIATION
Three and Nine Months Ended September 30, 2015
(Dollars in Millions)






Three Months Ended
 September 30, 2015


Nine Months Ended
 September 30, 2015




Balance


Effective Tax Rate


Balance


Effective Tax Rate












Reported Income From Continuing Operations Before Income Taxes


$

1,360





$

3,438





Costs to Achieve, Progress Energy Merger


24





67





Edwardsport Settlement


90





90





Midwest Generation Operations






147





Ash Basin Settlement


7





7





Economic Hedges (Mark-to-Market)


(1)





(1)





Noncontrolling Interests


(3)





(10)





Intercompany Eliminations






4





Adjusted Pretax Income


$

1,477





$

3,742



































Reported Income Tax Expense From Continuing Operations


$

420



30.9%



$

1,118



32.5%



Tax Adjustment Related to Midwest Generation Sale






(41)





Costs to Achieve, Progress Energy Merger


9





25





Edwardsport Settlement


34





34





Midwest Generation Operations






53





Ash Basin Settlement


3





3





Adjusted Tax Expense


$

466



31.6%  *



$

1,192



31.9%  *













*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.


 

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To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/duke-energy-reports-third-quarter-2016-financial-results-300357287.html

SOURCE Duke Energy


Source: PR Newswire (November 4, 2016 - 7:00 AM EDT)

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