Duke Energy reports second quarter 2015 financial results

Aug 06, 2015, 07:00 ET from Duke Energy

CHARLOTTE, N.C., Aug. 6, 2015 /PRNewswire/ --

  • Second quarter 2015 adjusted diluted earnings per share (EPS) were 95 cents, compared to $1.11 for the second quarter of 2014
  • Reported diluted EPS of 78 cents for second quarter 2015, compared to 86 cents in second quarter of 2014
  • Company remains on track to achieve its 2015 adjusted diluted earnings guidance range of $4.55 to $4.75 per share

Duke Energy today announced second quarter 2015 adjusted diluted EPS of 95 cents, compared to $1.11 for the second quarter of 2014. Second quarter 2015 reported EPS was 78 cents, compared to 86 cents for the same period last year.

Earnings for the second quarter of 2015 were lower than the prior year quarterly results, primarily due to one-time tax items that did not recur in the current year. Results also were affected by continued weakness in the International business, particularly Brazil, and the timing of O&M expenses at Regulated Utilities.

Year-to-date adjusted diluted EPS through the second quarter of 2015 is in line with the company's expectations. The company remains on track to achieve its 2015 adjusted diluted earnings guidance range of $4.55 to $4.75 per share.

Strength in the Regulated Utility business, coupled with the execution of the Midwest Generation sale and related share buyback, have served to offset weakness in the International business thus far in 2015.

"Operationally, we met our customers' energy needs in the second quarter during extended periods of warmer than normal temperatures particularly in the Southeast," said Lynn Good, president and CEO. "Equally important, we continued to follow through on the growth initiatives that will provide long-term benefits for our customers.

"We also continue to focus on providing solid returns for our shareholders," Good added. "Last month, our board approved an approximate 4 percent increase in the quarterly dividend payment, reflecting its confidence in the strength of our core businesses and cash flows."  

Business unit results

In addition to the summary business unit discussion below, a comprehensive table of quarterly and year-to-date adjusted earnings per share drivers compared to the prior year is provided on pages 16 and 17.

The discussion below of second quarter results includes adjusted segment income, which is a non-GAAP financial measure. The tables on pages 25 through 28 present a reconciliation of reported results to adjusted results.

Regulated Utilities

Regulated Utilities recognized second quarter 2015 adjusted segment income of $632 million, compared to $689 million in the second quarter 2014, a decrease of 9 cents per share, excluding the benefit of the accelerated stock repurchase program.

Lower quarterly results at Regulated Utilities were primarily driven by:

  • Higher O&M expense (-$0.11 per share) due to the timing of planned outages in the generation fleet. This includes the impact of nuclear outage cost levelization (-$0.05 per share)
  • Higher depreciation and amortization expense (-$0.05 per share) primarily resulting from additional plant in-service
  • Higher effective tax rate (-$0.04 per share) primarily due to a favorable prior-year state tax settlement

These unfavorable drivers were partially offset by:

  • Higher weather-normal retail volumes (+$0.05 per share) of 1.7 percent compared to 2014
  • Favorable weather (+$0.03 per share) driven by warmer than normal temperatures, primarily in the Carolinas
  • Higher revenues from increased pricing and riders (+$0.03 per share) due to increased energy efficiency programs and prior-year true-ups that did not recur
  • Increased wholesale net margins (+$0.02 per share) primarily resulting from growth in contracted amounts

On a year-to-date basis, Regulated Utilities recognized adjusted segment income of $1,406 million, compared to $1,426 million in the comparable year-to-date period of 2014, a decrease of 4 cents per share, excluding the benefit of the accelerated stock repurchase program.

Decreased year-to-date results at Regulated Utilities were primarily driven by:

  • Higher O&M expense (-$0.12 per share) due to the timing of planned outages in the generation fleet. This includes the impact of nuclear outage cost levelization (-$0.07 per share) and is offset by lower storm costs
  • Higher depreciation and amortization expense (-$0.08 per share) primarily resulting from additional plant in-service
  • Higher effective tax rate (-$0.04 per share) primarily due to a favorable prior-year state tax settlement

These unfavorable drivers were partially offset by:

  • Higher revenues from increased pricing and riders (+$0.07 per share) due to increased energy efficiency programs and prior-year true-ups that did not recur
  • Increased wholesale net margins (+$0.06 per share) primarily due to growth in contracted amounts
  • Higher AFUDC equity (+$0.03 per share) due to increased capital spending
  • Higher weather-normal retail volumes (+$0.02 per share) of 0.5 percent compared to 2014
  • Favorable weather (+$0.02 per share) across Duke Energy's service territories

International Energy

International Energy recognized second quarter 2015 adjusted segment income of $52 million, compared to $146 million in the second quarter 2014, a decrease of 13 cents per share.

Lower quarterly results at International Energy were primarily driven by:

  • Unfavorable results in Latin America (-$0.13 per share) primarily due to a prior-year favorable tax adjustment in Chile (-$0.07 per share), impacts from the weak economy and lower demand for electricity in Brazil (-$0.04 per share), as well as foreign currency exchange rates (-$0.01 per share)

On a year-to-date basis, International Energy recognized adjusted segment income of $88 million, compared to $276 million in the comparable year-to-date period of 2014, a decrease of 26 cents per share.

Lower year-to-date earnings at International Energy were driven by:

  • Weaker results in Latin America (-$0.23 per share), primarily due to a prior-year non-recurring tax benefit in Chile (-$0.07 per share), impacts from the weak economy and lower demand for electricity in Brazil (-$0.12 per share) as well as unfavorable foreign currency exchange rates (-$0.01 per share)
  • Lower margins at National Methanol (-$0.03 per share), largely driven by lower MTBE and methanol prices

Commercial Portfolio

Subsequent to the sale of its nonregulated Midwest Commercial Generation Business to Dynegy Inc. in April, Commercial Portfolio (formerly Commercial Power) includes Duke Energy's unregulated renewable assets as well as its commercial electric and gas transmission investments.

Commercial Portfolio recognized second quarter 2015 adjusted segment income of $8 million, compared to $16 million in the second quarter 2014, a decrease of 1 cent per share. The decline in Commercial Portfolio's quarterly earnings is primarily due to lower earnings from the renewables fleet resulting from lower wind resources.

On a year-to-date basis, Commercial Portfolio recognized adjusted segment income of $103 million, compared to $26 million in the comparable year-to-date period of 2014, an increase of 11 cents per share.

Commercial Portfolio's higher year-to-date earnings were driven by higher results from the Midwest Generation fleet during the first quarter 2015 (+$0.14 per share), partially offset by lower earnings from the renewables fleet (-$0.01 per share) resulting from lower wind resources.

Other

On an adjusted basis, Other primarily includes corporate interest expense not allocated to the business units, results from Duke Energy's captive insurance company, other investments, and quarterly income tax levelization adjustments.

Other recognized a second quarter 2015 adjusted net expense of $34 million, compared to net expense of $65 million in the second quarter 2014, an improvement of 4 cents per share. 

On a year-to-date basis, Other recognized adjusted net expense of $58 million, compared to $113 million in the comparable period of 2014, an improvement of 8 cents per share. Other's quarterly and year-to-date results were primarily driven by favorable results from the company's captive insurance business and favorable income tax levelization adjustments.

The consolidated adjusted effective tax rate for second quarter 2015 was 31.2 percent, compared to 28.2 percent in the second quarter of 2014. On a year-to-date basis, the consolidated adjusted effective tax rate was 32 percent, compared to 31.1 percent in the prior year. Adjusted effective tax rate is a non-GAAP financial measure. The tables on pages 29 and 30 present a reconciliation of reported effective tax rate to adjusted effective tax rate.

Accelerated stock repurchase program

In connection with the transaction to sell the Midwest Generation business to Dynegy for $2.8 billion, which closed on April 2, 2015, Duke Energy completed a $1.5 billion accelerated stock repurchase program (ASR). The program resulted in share retirements of approximately 19.8 million, providing a benefit to the second quarter 2015 and year-to-date results of approximately 3 cents per share.

As a result of the ASR, weighted-average shares of Duke Energy common stock outstanding in 2015 are expected to be approximately 695 million.

Earnings conference call for analysts

An earnings conference call for analysts is scheduled for 10 a.m. ET today to discuss Duke Energy's financial performance for the quarter and other business updates.

The conference call will be hosted by Lynn Good, president and chief executive officer, and Steve Young, executive vice president and chief financial officer. 

The call can be accessed via the investors' section (http://www.duke-energy.com/investors/) of Duke Energy's website or by dialing 877-874-1586 in the United States or 719-325-4817 outside the United States. The confirmation code is 2859838. Please call in 10 to 15 minutes prior to the scheduled start time.

A replay of the conference call will be available until 1 p.m. ET, Aug. 16, 2015, by calling 888-203-1112 in the United States or 719-457-0820 outside the United States and using the code 2859838. A replay and transcript also will be available by accessing the investors' section of the company's website.

Special items and non-GAAP reconciliation

Special items affecting Duke Energy's adjusted diluted EPS for quarterly results in 2015 and 2014 include:

(In millions, except per-share amounts)

After-Tax
Amount

2Q2015

EPS

Impact

2Q2014
EPS
Impact

Second Quarter 2015




-     Cost to achieve, Progress Energy merger

$(14)

$(0.02)


-     Discontinued operations (1)(2)

$(101)

$(0.15)


Second Quarter 2014




-     Cost to achieve, Progress Energy merger

$(38)


$(0.06)

-     Economic hedges (mark-to-market)

$(3)


--

-     Discontinued operations (1)(3)

$(136)


$(0.19)

Total diluted EPS impact


$(0.17)

$(0.25)


(1) Reported discontinued operations includes the Midwest generation impairment, the economic hedges (mark-to-market) of Midwest generation, and operating results of the Midwest Generation business


(2) Represents reported discontinued operations of $(0.09) per diluted share, including the impact of a litigation reserve related to the nonregulated Midwest generation business, and a tax charge resulting from the completion of the sale of the Midwest generation business but not reported as discontinued operations of $(0.06), which are treated as a special item and reflected in adjusted diluted EPS.


(3) Represents reported discontinued operations of $(0.16) per diluted share less the Midwest generation operations results classified as discontinued operations of (+$0.03) per diluted share. Midwest generation operations are treated as a special item and reflected in adjusted diluted EPS.

 

Reconciliation of reported to adjusted diluted EPS for the quarter:


2Q2015

EPS

2Q2014

EPS

Diluted EPS, as reported

$0.78

$0.86

Adjustments to reported EPS:



-     Diluted EPS impact of special items and discontinued operations (net of tax)

$0.17

$0.25

Diluted EPS, adjusted

$0.95

$1.11

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 reflected in Discontinued Operations in 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, as discussed below, 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.

Due to the forward-looking nature of any forecasted adjusted earnings guidance, information to reconcile this non-GAAP financial measure to the most directly comparable GAAP financial measure is not available at this time, as management is unable to project all special items or mark-to-market adjustments for future periods.

Due to the forward-looking nature of any forecasted adjusted segment income or adjusted Other net expenses and any related growth rates for future periods, information to reconcile these non-GAAP financial measures to the most directly comparable GAAP financial measures is not available at this time, as the company is unable to forecast all special items, the mark-to-market impacts of economic hedges in the Commercial Portfolio segment, or any amounts that may be reported as discontinued operations or extraordinary items for future periods.

Duke Energy is the largest electric power holding company in the United States with approximately $120 billion in total assets. Its regulated utility operations serve approximately 7.3 million electric customers located in six states in the Southeast and Midwest. 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 a Fortune 250 company traded on the New York Stock Exchange under the symbol DUK. More information about the company is available at duke-energy.com. 

Forward-Looking Information

This document includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are based on management's beliefs and assumptions.

 These forward-looking statements are identified by terms and phrases such as "anticipate," "believe," "intend," "estimate," "expect," "continue," "should," "could," "may," "plan," "project," "predict," "will," "potential," "forecast," "target," "guidance," "outlook," and similar expressions. Forward-looking statements involve risks and uncertainties that may cause actual results to be materially different from the results predicted. Factors that could cause actual results to differ materially from those indicated in any forward-looking statement include, but are not limited to: state, federal and foreign legislative and regulatory initiatives, including costs of compliance with existing and future environmental requirements or climate change, as well as rulings that affect cost and investment recovery or have an impact on rate structures or market prices; the extent and timing of the costs and liabilities relating to the Dan River ash basin release and compliance with current regulations and any future regulatory changes related to the management of coal ash; the ability to recover eligible costs, including those associated with future significant weather events, and earn an adequate return on investment through the regulatory process; the costs of decommissioning Crystal River Unit 3 could prove to be more extensive than 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 customer usage patterns, including energy efficiency efforts and use of alternative energy sources including self-generation and distributed generation technologies; additional competition in electric markets and continued industry consolidation; political and regulatory uncertainty in other countries in which Duke Energy conducts business; the influence of weather and other natural phenomena on operations, including the economic, operational and other effects of severe storms, hurricanes, droughts and tornadoes; the ability to successfully operate electric generating facilities and deliver electricity to customers; the impact on facilities and business from a terrorist attack, cybersecurity threats, data security breaches and other catastrophic events; the inherent risks associated with the operation and potential construction of nuclear facilities, including environmental, health, safety, regulatory and financial risks; the timing and extent of changes in commodity prices, interest rates and foreign currency exchange rates and the ability to recover such costs through the regulatory process, where appropriate, and their impact on liquidity positions and the value of underlying assets; the results of financing efforts, including the ability to obtain financing on favorable terms, which can be affected by various factors, including credit ratings and general economic conditions; declines in the market prices of equity and fixed income securities and resultant cash funding requirements for defined benefit pension plans, other post-retirement benefit plans and nuclear decommissioning trust funds; construction and development risks associated with the completion of Duke Energy and its subsidiaries' capital investment projects in existing and new generation facilities, 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 reinvest prospective undistributed earnings of foreign subsidiaries or repatriate such earnings on a tax-efficient basis; and the ability to successfully complete future merger, acquisition or divestiture plans. 

Additional risks and uncertainties are identified and discussed in Duke Energy's and its subsidiaries' reports filed with the SEC and available at the SEC's website at www.sec.gov. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than Duke Energy has described. Duke Energy undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Media Contact: Tom Shiel
24-Hour: 800.559.3853

Analysts: Bill Currens
Office: 704.382.1603

 

 

June 2015

QUARTERLY HIGHLIGHTS

(Unaudited)










Three Months Ended June 30,


Six Months Ended June 30,

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

2015


2014


2015


2014

Earnings Per Share - Basic and Diluted








Income from continuing operations attributable to Duke Energy Corporation common shareholders








Basic

$

0.87



$

1.02



$

1.96



$

2.07


Diluted

$

0.87



$

1.02



$

1.96



$

2.07










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








Basic

$

(0.09)



$

(0.16)



$

0.05



$

(1.35)


Diluted

$

(0.09)



$

(0.16)



$

0.05



$

(1.35)










Net income attributable to Duke Energy Corporation common shareholders








Basic

$

0.78



$

0.86



$

2.01



$

0.72


Diluted

$

0.78



$

0.86



$

2.01



$

0.72










Weighted-average shares outstanding








Basic

692



707



700



707


Diluted

692



707



700



707










SEGMENT INCOME (LOSS) BY BUSINESS SEGMENT








Regulated Utilities

$

632



$

689



$

1,406



$

1,426


International Energy

52



146



88



276


Commercial Portfolio (a)(b)

(33)



(21)



(32)



(53)


Total Reportable Segment Income

651



814



1,462



1,649


Other Net Expense(c)(d)

(48)



(90)



(85)



(177)


Intercompany Eliminations

(3)



(2)



(4)



(4)


(Loss) Income from Discontinued Operations, net of tax (e)

(57)



(113)



34



(956)


Net Income Attributable to Duke Energy Corporation

$

543



$

609



$

1,407



$

512










CAPITALIZATION








Total Common Equity





49

%


48

%

Total Debt





51

%


52

%









Total Debt





$

41,331



$

42,460


Book Value Per Share





$

57.56



$

57.80


Actual Shares Outstanding





688



707










CAPITAL AND INVESTMENT EXPENDITURES








Regulated Utilities

$

1,411



$

1,073



$

2,673



$

2,175


International Energy

7



16



19



25


Commercial Portfolio

261



100



383



168


Other

56



25



114



86


Total Capital and Investment Expenditures

$

1,735



$

1,214



$

3,189



$

2,454


















Note: Prior period operating results reflect reclassifications due to the impacts of discontinued operations.









(a) Includes a tax charge of $41 million resulting from the completion of the sale of the nonregulated Midwest generation business for the three months and six months ended June 30, 2015.

(b) Includes an impairment charge of $59 million for the six months ended June 30, 2014, related to OVEC (net of tax of $35 million).

(c) Includes costs to achieve the Progress merger of $14 million for the three months ended June 30, 2015 (net of tax of $8 million) and $27 million for the six months ended June 30, 2015 (net of tax of $16 million).

(d) Includes costs to achieve the Progress merger of $38 million for the three months ended June 30, 2014 (net of tax of $23 million) and $72 million for the six months ended June 30, 2014 (net of tax of $44 million).

(e) Includes the impact of a litigation reserve related to the nonregulated Midwest generation business of $46 million for the three months ended June 30, 2015 (net of tax of $25 million), and $53 million for the six months ended June 30, 2015 (net of tax of $28 million).

 

 


June 2015

QUARTERLY HIGHLIGHTS

(Unaudited)










Three Months Ended


Six Months Ended


June 30,


June 30,

(In millions, except for GWh and MW amounts)

2015


2014


2015


2014

REGULATED UTILITIES








  Operating Revenues

$

5,220



$

5,283



$

10,943



$

11,088


  Operating Expenses

4,003



4,019



8,308



8,446


  Gains on Sales of Other Assets, net

2





9



1


  Operating Income

1,219



1,264



2,644



2,643


  Other Income and Expenses

59



62



131



131


  Interest Expense

274



275



549



545


  Income Before Income Taxes

1,004



1,051



2,226



2,229


  Income Tax Expense

372



362



820



803


  Segment Income

$

632



$

689



$

1,406



$

1,426










  Depreciation and Amortization

$

707



$

688



$

1,405



$

1,365










  Duke Energy Carolinas GWh sales

21,306



20,836



43,774



44,529


  Duke Energy Progress GWh sales

14,952



14,693



31,717



30,854


  Duke Energy Florida GWh sales

10,802



9,840



19,275



18,501


  Duke Energy Ohio GWh sales

6,233



5,824



13,000



12,303


  Duke Energy Indiana GWh sales

7,705



8,455



16,433



17,329


  Total GWh sales

60,998



59,648



124,199



123,516


  Net Proportional MW Capacity in Operation





49,528



49,452










INTERNATIONAL ENERGY








  Operating Revenues

$

287



$

364



$

560



$

746


  Operating Expenses

232



254



439



485


  (Loss) Gains on Sales of Other Assets, net

(1)



5



(1)



5


  Operating Income

54



115



120



266


  Other Income and Expenses

31



52



45



109


  Interest Expense

22



23



45



46


  Income Before Income Taxes

63



144



120



329


  Income Tax Expense

10



(5)



30



46


  Less: Income Attributable to Noncontrolling Interests

1



3



2



7


  Segment Income

$

52



$

146



$

88



$

276










  Depreciation and Amortization

$

23



$

27



$

46



$

50










  Sales, GWh

4,520



4,281



8,990



9,522


  Proportional MW Capacity in Operation





4,333



4,411










COMMERCIAL PORTFOLIO








  Operating Revenues

$

75



$

64



$

148



$

145


  Operating Expenses(a)

84



80



173



268


  Losses on Sales of Other Assets, net

6





6




  Operating Loss

(3)



(16)



(19)



(123)


  Other Income and Expenses

(2)



5





10


  Interest Expense

10



13



22



27


  Loss Before Income Taxes

(15)



(24)



(41)



(140)


  Income Tax Expense (Benefit)(b)(c)

18



(3)



(9)



(87)


  Segment Loss

$

(33)



$

(21)



$

(32)



$

(53)










  Depreciation and Amortization

$

26



$

19



$

50



$

46










  Actual Coal-fired Plant Production, GWh



204





675


  Actual Renewable Plant Production, GWh

1,373



1,469



2,683



3,058


  Actual Plant Production, GWh

1,373



1,673



2,683



3,733


  Net Proportional MW Capacity in Operation





1,634



1,305










OTHER








  Operating Revenues

$

34



$

29



$

61



$

54


  Operating Expenses(d)(e)

63



101



113



185


  Gains on Sales of Other Assets, net

6



1



13



1


  Operating Loss

(23)



(71)



(39)



(130)


  Other Income and Expenses

9



9



10



15


  Interest Expense

97



98



194



201


  Loss Before Income Taxes

(111)



(160)



(223)



(316)


  Income Tax Benefit(f)(g)

(66)



(71)



(143)



(140)


  Less: Income Attributable to Noncontrolling Interests

3



1



5



1


  Segment Net Expense

$

(48)



$

(90)



$

(85)



$

(177)










  Depreciation and Amortization

$

34



$

28



$

66



$

56










Note: Prior period reflects reclassifications due to the impact of discontinued operations.









(a) Includes a pre-tax impairment charge of $94 million for the six months ended June 30, 2014, related to OVEC.

(b) Includes a tax charge of $41 million resulting from the completion of the sale of the nonregulated Midwest generation business for the three months and six months ended June 30, 2015.

(c) Includes a tax benefit of $35 million for the six months ended June 30, 2014, related to OVEC impairment.

(d) Includes costs to achieve the Progress merger of $22 million for the three months ended June 30, 2015, and $43 million for the six months ended June 30, 2015.

(e) Includes costs to achieve the Progress merger of $61 million for the three months ended June 30, 2014, and $114 million for the six months ended June 30, 2014.

(f) Includes tax benefit related to costs to achieve the Progress merger of $8 million for the three months ended June 30, 2015, and $16 million for the six months ended June 30, 2015.

(g) Includes tax benefit related to costs to achieve the Progress merger of $23 million for the three months ended June 30, 2014, and $44 million for the six months ended June 30, 2014.

 

 


DUKE ENERGY CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In millions, except per-share amounts)










Three Months Ended June 30,


Six Months Ended June 30,


2015


2014


2015


2014

Operating Revenues








Regulated electric

$

5,090



$

5,138



$

10,547



$

10,688


Nonregulated electric and other

403



463



780



954


Regulated natural gas

96



107



327



329


Total operating revenues

5,589



5,708



11,654



11,971


Operating Expenses








Fuel used in electric generation and purchased power - regulated

1,721



1,808



3,662



3,808


Fuel used in electric generation and purchased power - nonregulated

118



126



222



262


Cost of natural gas and other

26



38



137



154


Operation, maintenance and other

1,422



1,396



2,848



2,845


Depreciation and amortization

790



762



1,567



1,517


Property and other taxes

279



311



543



661


Impairment charges



(16)





80


Total operating expenses

4,356



4,425



8,979



9,327


Gain on Sales of Other Assets and Other, net

13



6



27



7


Operating Income

1,246



1,289



2,702



2,651


Other Income and Expenses








Equity in earnings of unconsolidated affiliates

23



33



36



69


Other income and expenses, net

72



89



146



184


Total other income and expenses

95



122



182



253


Interest Expense

403



403



806



807


Income from Continuing Operations before Income Taxes

938



1,008



2,078



2,097


Income Tax Expense from Continuing Operations

334



282



698



621


Income from Continuing Operations

604



726



1,380



1,476


(Loss) Income from Discontinued Operations, net of tax

(57)



(113)



34



(956)


Net Income

547



613



1,414



520


Less: Net Income Attributable to Noncontrolling Interests

4



4



7



8


Net Income Attributable to Duke Energy Corporation

$

543



$

609



$

1,407



$

512


















Earnings Per Share - Basic and Diluted








Income from continuing operations attributable to Duke Energy Corporation common shareholders








Basic

$

0.87



$

1.02



$

1.96



$

2.07


Diluted

$

0.87



$

1.02



$

1.96



$

2.07


(Loss) income from discontinued operations attributable to Duke
Energy Corporation common shareholders








Basic

$

(0.09)



$

(0.16)



$

0.05



$

(1.35)


Diluted

$

(0.09)



$

(0.16)



$

0.05



$

(1.35)


Net income attributable to Duke Energy Corporation common shareholders








Basic

$

0.78



$

0.86



$

2.01



$

0.72


Diluted

$

0.78



$

0.86



$

2.01



$

0.72


Weighted-average shares outstanding








Basic

692



707



700



707


Diluted

692



707



700



707


 

 


DUKE ENERGY CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In millions)








June 30, 2015


December 31, 2014

ASSETS





Current Assets





Cash and cash equivalents


$

960



$

2,036


Receivables (net of allowance for doubtful accounts of  $17 at June 30, 2015 and December 31, 2014)


650



791


Restricted receivables of variable interest entities (net of allowance for
 doubtful accounts of $55 at June 30, 2015 and $51 at December 31, 2014)


2,046



1,973


Inventory


3,469



3,459


Assets held for sale




364


Regulatory assets


975



1,115


Other


1,498



1,837


Total current assets


9,598



11,575


Investments and Other Assets





Investments in equity method unconsolidated affiliates


375



358


Nuclear decommissioning trust funds


5,529



5,546


Goodwill


16,328



16,321


Assets held for sale




2,642


Other


3,239



3,008


Total investments and other assets


25,471



27,875


Property, Plant and Equipment





Cost


107,125



104,861


Accumulated depreciation and amortization


(35,826)



(34,824)


Generation facilities to be retired, net


460



9


Net property, plant and equipment


71,759



70,046


Regulatory Assets and Deferred Debits





Regulatory assets


11,564



11,042


Other


183



171


Total regulatory assets and deferred debits


11,747



11,213


Total Assets


$

118,575



$

120,709


LIABILITIES AND EQUITY





Current Liabilities





Accounts payable


$

1,920



$

2,271


Notes payable and commercial paper


2,162



2,514


Taxes accrued


550



569


Interest accrued


419



418


Current maturities of long-term debt


2,374



2,807


Liabilities associated with assets held for sale




262


Regulatory liabilities


245



204


Other


1,976



2,188


Total current liabilities


9,646



11,233


Long-term Debt


36,795



37,213


Deferred Credits and Other Liabilities





Deferred income taxes


13,664



13,423


Investment tax credits


420



427


Accrued pension and other post-retirement benefit costs


1,152



1,145


Liabilities associated with assets held for sale




35


Asset retirement obligations


9,490



8,466


Regulatory liabilities


6,203



6,193


Other


1,588



1,675


Total deferred credits and other liabilities


32,517



31,364


Commitments and Contingencies





Equity





Common stock, $0.001 par value, 2 billion shares authorized; 688 million





and 707 million shares outstanding at June 30, 2015 and





December 31, 2014, respectively


1



1


Additional paid-in capital


37,933



39,405


Retained earnings


2,294



2,012


Accumulated other comprehensive income


(648)



(543)


Total Duke Energy Corporation stockholder's equity


39,580



40,875


Noncontrolling interests


37



24


Total equity


39,617



40,899


Total Liabilities and Equity


$

118,575



$

120,709


 


 

DUKE ENERGY CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In millions)








Six Months Ended June 30,



2015


2014

CASH FLOWS FROM OPERATING ACTIVITIES





Net Income


$

1,414



$

520


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


1,465



2,099


Net cash provided by operating activities


2,879



2,619







CASH FLOWS FROM INVESTING ACTIVITIES





Net cash used in investing activities


(294)



(2,367)







CASH FLOWS FROM FINANCING ACTIVITIES





Net cash (used in) provided by financing activities


(3,661)



255







Net (decrease) increase in cash and cash equivalents


(1,076)



507


Cash and cash equivalents at the beginning of period


2,036



1,501


Cash and cash equivalents at end of period


$

960



$

2,008


 

 



DUKE ENERGY CORPORATION

EARNINGS VARIANCES

June 2015 QTD vs. Prior Year












($ per share)

Regulated

Utilities


International

Energy


Commercial

Portfolio


Other


Consolidated

2014 QTD Reported Earnings Per Share, Diluted

$

0.97



$

0.21



$

(0.03)



$

(0.13)



$

0.86


Costs to Achieve, Progress Merger







0.06



0.06


Midwest Generation Operations (offset in Discontinued Operations)





0.05



(0.02)



0.03


Discontinued Operations









0.16


2014 QTD Adjusted Earnings Per Share, Diluted

$

0.97



$

0.21



$

0.02



$

(0.09)



$

1.11


Stock Repurchase (a)

0.03









0.03


Weather

0.03









0.03


Pricing and Riders (b)

0.03









0.03


Volumes

0.05









0.05


Wholesale (c)

0.02









0.02


Operation and Maintenance, net of recoverables (d)

(0.11)









(0.11)


Latin America, including Foreign Exchange Rates (e)



(0.13)







(0.13)


Duke Energy Renewables (f)





(0.01)





(0.01)


Change in effective tax rates

(0.04)







0.03



(0.01)


Other (g)

(0.07)







0.01



(0.06)


2015 QTD Adjusted Earnings Per Share, Diluted

$

0.91



$

0.08



$

0.01



$

(0.05)



0.95


Costs to Achieve, Progress Merger







(0.02)



(0.02)


Discontinued Operations





(0.06)





(0.15)


2015 QTD Reported Earnings Per Share, Diluted

$

0.91



$

0.08



$

(0.05)



$

(0.07)



$

0.78





Note 1: Earnings Per Share amounts are calculated using the consolidated effective income tax rate.


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


Note 3: Prior period operating results reflect reclassifications due to the impact of discontinued operations.



(a)

Reflects the impact on earnings per diluted share due to the decrease in weighted-average diluted common shares outstanding as a result of shares repurchased and retired under the Accelerated Stock Repurchase Program. Weighted-average diluted shares outstanding decreased from 707 million shares for the three months ended June 30, 2014, to 692 million shares for the three months ended June 30, 2015.

(b)

Primarily due to prior-year fuel and purchased power costs true-ups (+$0.02) and higher energy efficiency rider recovery in North Carolina and South Carolina (+$0.01), partially offset by the impact of a regulatory order that limited the ability to carry forward energy efficiency savings for Duke Energy Ohio (-$0.02).

(c)

Primarily due to higher volumes and capacity rates due to favorable weather and the implementation of new contracts.

(d)

Primarily due to an increase in planned spending and the prior-year benefit associated with the adoption of nuclear outage levelization (-$0.05), partially offset by lower storm restoration costs.

(e)

Primarily due to a prior year tax benefit related to the reorganization of the company's operations in Chile (-$0.07), lower results in Brazil (-$0.04) due to higher purchased power costs resulting from ongoing drought conditions, lower results in Central America (-$0.01) due to lower generation and prices from increased competition, and unfavorable foreign currency exchange rates (-$0.01).

(f)

Primarily due to lower wind production and additional depreciation expense from higher depreciable base.

(g)

Amount for Regulated Utilities includes increased depreciation and amortization expense (-$0.05) due to higher depreciable base and higher non-income taxes (-$0.03), partially offset by higher AFUDC-equity

(+$0.01).

 


 


DUKE ENERGY CORPORATION

EARNINGS VARIANCES

June 2015 YTD vs. Prior Year












($ per share)

Regulated

Utilities


International

Energy


Commercial

Portfolio


Other


Consolidated

2014 YTD Reported Earnings Per Share, Diluted

$

2.02



$

0.39



$

(0.08)



$

(0.25)



$

0.72


Costs to Achieve, Progress Merger







0.10



0.10


Economic Hedges (Mark-to-Market)





0.01





0.01


Midwest Generation Operations (offset in Discontinued Operations)





0.02



(0.01)



0.01


Asset Impairment





0.08





0.08


Discontinued Operations









1.36


2014 YTD Adjusted Earnings Per Share, Diluted

$

2.02



$

0.39



$

0.03



$

(0.16)



$

2.28


Stock Repurchase (a)

0.03









0.03


Weather

0.02









0.02


Pricing and Riders (b)

0.07









0.07


Volumes

0.02









0.02


Wholesale (c)

0.06









0.06


Operation and Maintenance, net of recoverables (d)

(0.12)









(0.12)


Latin America, including Foreign Exchange Rates (e)



(0.23)







(0.23)


National Methanol Company



(0.03)







(0.03)


Duke Energy Renewables (f)





(0.01)





(0.01)


Midwest Generation (g)





0.14





0.14


Interest Expense







0.01



0.01


Change in effective tax rates

(0.04)





(0.01)



0.06



0.01


Other (h)

(0.05)





(0.01)



0.01



(0.05)


2015 YTD Adjusted Earnings Per Share, Diluted

$

2.01



$

0.13



$

0.14



$

(0.08)



2.20


Costs to Achieve, Progress Merger







(0.04)



(0.04)


Midwest Generation Operations (offset in Discontinued Operations)





(0.13)





(0.13)


Discontinued Operations





(0.06)





(0.02)


2015 YTD Reported Earnings Per Share, Diluted

$

2.01



$

0.13



$

(0.05)



$

(0.12)



$

2.01





Note 1: Earnings Per Share amounts are calculated using the consolidated effective income tax rate.


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


Note 3: Prior period operating results reflect reclassifications due to the impact of discontinued operations.



(a)

Reflects the impact on earnings per diluted share due to the decrease in weighted-average diluted common shares outstanding as a result of shares repurchased and retired under the Accelerated Stock Repurchase Program. Weighted-average diluted shares outstanding decreased from 707 million shares for the six months ended June 30, 2014, to 700 million shares for the six months ended June 30, 2015.

(b)

Primarily due to prior year fuel and purchased power costs true-ups (+$0.04) and higher energy efficiency rider recovery in North Carolina and South Carolina (+$0.03), partially offset by the impact of a regulatory order that limited the ability to carry forward energy efficiency savings for Duke Energy Ohio (-$0.02).

(c)

Primarily due to higher volumes and capacity rates due to favorable weather and the implementation of new contracts.

(d)

Primarily due to an increase in planned spending and the prior-year benefit associated with the adoption of nuclear outage levelization (-$0.07), partially offset by lower storm restoration costs.

(e)

Primarily due to lower results in Brazil (-$0.12) due to lower sales volumes and higher purchased power costs resulting from ongoing drought conditions and decreased demand, a prior year tax benefit related to the reorganization of the company's operations in Chile (-$0.07), lower results in Central America (-$0.02) due to lower generation and prices from increased competition and unfavorable foreign currency exchange

rates (-$0.01).

(f)

Primarily due to lower wind production.

(g)

Primarily due to higher capacity revenues, improved generation margins and the suspension of depreciation as a result of held for sale status prior to the sale of the nonregulated Midwest generation business.

(h)

Amount for Regulated Utilities includes increased depreciation and amortization expense (-$0.08) due to higher depreciable base, partially offset by higher AFUDC-equity (+$0.03).

 


 

Regulated Utilities

Quarterly Highlights

Supplemental Regulated Utilities Electric Information

June 2015




















Three Months Ended June 30


Six Months Ended June 30



2015


2014


%

Inc.(Dec.)


% Inc.(Dec.)

Weather

Normal (2)


2015


2014


%

Inc.(Dec.)


% Inc.(Dec.)

Weather

Normal (2)

GWH Sales (1)

















Residential

17,989


17,911


0.4%


1.8%


42,019


42,104


(0.2%)


(0.1%)


General Service

18,795


18,725


0.4%


1.3%


37,077


36,872


0.6%


0.6%


Industrial

13,105


13,081


0.2%


1.9%


25,369


25,136


0.9%


1.3%


Other Energy Sales

149


153


(2.6%)




301


303


(0.7%)




Unbilled Sales

2,378


1,164


104.3%


N/A


1,332


580


129.7%


N/A


Total Retail Sales

52,416


51,034


2.7%


1.7%


106,098


104,995


1.1%


0.5%



















Special Sales

8,582


8,614


(0.4%)




18,101


18,521


(2.3%)





















Total Consolidated Electric Sales - Regulated Utilities

60,998


59,648


2.3%




124,199


123,516


0.6%





































Average Number of Customers (Electric)

















Residential

6,348,277


6,266,316


1.3%




6,345,413


6,265,818


1.3%




General Service

951,642


941,986


1.0%




949,694


940,517


1.0%




Industrial

18,159


18,308


(0.8%)




18,172


18,341


(0.9%)




Other Energy Sales

23,012


22,468


2.4%




22,982


22,464


2.3%




Total Regular Sales

7,341,090


7,249,078


1.3%




7,336,261


7,247,140


1.2%





















Special Sales

61


60


1.7%




64


62


3.2%





















Total Average Number of Customers - Regulated
Utilities

7,341,151


7,249,138


1.3%




7,336,325


7,247,202


1.2%






















































Heating and Cooling Degree Days

















Carolinas - Actual

















Heating Degree Days

150


156


(3.8%)




2,054


2,125


(3.3%)




Cooling Degree Days

632


593


6.6%




636


593


7.3%





















Variance from Normal

















Heating Degree Days

(19.5%)


(15.7%)


n/a




11.6%


15.4%


n/a




Cooling Degree Days

15.3%


10.2%


n/a




14.0%


8.2%


n/a





















Midwest - Actual

















Heating Degree Days

380


443


(14.2%)




3,500


3,756


(6.8%)




Cooling Degree Days

378


350


8.0%




378


350


8.0%





















Variance from Normal

















Heating Degree Days

(10.4%)


4.2%


n/a




14.6%


22.3%


n/a




Cooling Degree Days

3.0%


(0.3%)


n/a




1.3%


(1.7%)


n/a





















Florida - Actual

















Heating Degree Days


1


(100.0%)




373


418


(10.8%)




Cooling Degree Days

1,256


1,061


18.4%




1,490


1,205


23.7%





















Variance from Normal

















Heating Degree Days

(100.0%)


(90.9%)


n/a




(6.3%)


0.7%


n/a




Cooling Degree Days

19.3%


0.7%


n/a




21.6%


(2.1%)


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 Carolinas

Quarterly Highlights

Supplemental Regulated Utilities Electric Information

June 2015




















Three Months Ended June 30


Six Months Ended June 30



2015


2014


%

Inc.(Dec.)


% Inc.(Dec.)

Weather

Normal (2)


2015


2014


%

Inc.(Dec.)


% Inc.(Dec.)

Weather

Normal (2)

GWH Sales (1)

















Residential

5,754


5,872


(2.0%)




14,232


14,436


(1.4%)




General Service

6,942


6,953


(0.2%)




13,801


13,734


0.5%




Industrial

5,614


5,467


2.7%




10,689


10,381


3.0%




Other Energy Sales

76


76


—%




153


149


2.7%




Unbilled Sales

843


366


(130.3%)




354


185


(91.4%)




Total Regular Electric Sales

19,229


18,734


2.6%


2.0%


39,229


38,885


0.9%


0.9%



















Special Sales

2,077


2,102


(1.2%)




4,545


5,644


(19.5%)





















Total Consolidated Electric Sales - Duke Energy Carolinas

21,306


20,836


2.3%




43,774


44,529


(1.7%)





































Average Number of Customers

















Residential

2,112,443


2,083,576


1.4%




2,110,556


2,082,721


1.3%




General Service

344,865


341,212


1.1%




344,029


340,700


1.0%




Industrial

6,446


6,531


(1.3%)




6,459


6,527


(1.0%)




Other Energy Sales

14,993


14,505


3.4%




14,974


14,495


3.3%




Total Regular Sales

2,478,747


2,445,824


1.3%




2,476,018


2,444,443


1.3%





















Special Sales

24


24


—%




25


25


—%





















Total Average Number of Customers - Duke Energy
Carolinas

2,478,771


2,445,848


1.3%




2,476,043


2,444,468


1.3%






















































Heating and Cooling Degree Days

















Actual

















Heating Degree Days

163


181


(9.9%)




2,104


2,223


(5.4%)




Cooling Degree Days

623


557


11.8%




624


557


12.0%





















Variance from Normal

















Heating Degree Days

(18.9%)


(10.0%)


n/a




9.7%


16.0%


n/a




Cooling Degree Days

18.7%


8.4%


n/a




16.9%


6.5%


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 Progress

Quarterly Highlights

Supplemental Regulated Utilities Electric Information

June 2015




















Three Months Ended June 30


Six Months Ended June 30



2015


2014


%

Inc.(Dec.)


% Inc.(Dec.)

Weather

Normal (2)


2015


2014


%

Inc.(Dec.)


% Inc.(Dec.)

Weather

Normal (2)

GWH Sales (1)

















Residential

3,673


3,959


(7.2%)




9,440


9,539


(1.0%)




General Service

3,688


3,769


(2.1%)




7,437


7,410


0.4%




Industrial

2,565


2,616


(1.9%)




5,002


4,997


0.1%




Other Energy Sales

27


29


(6.9%)




55


59


(6.8%)




Unbilled Sales

570


(30)


2,000.0%




129


(27)


577.8%




Total Regular Electric Sales

10,523


10,343


1.7%


2.4%


22,063


21,978


0.4%


0.4%



















Special Sales

4,429


4,350


1.8%




9,654


8,876


8.8%





















Total Consolidated Electric Sales - Duke Energy Progress

14,952


14,693


1.8%




31,717


30,854


2.8%





































Average Number of Customers

















Residential

1,271,806


1,253,519


1.5%




1,270,438


1,252,564


1.4%




General Service

225,735


223,061


1.2%




225,073


222,477


1.2%




Industrial

4,229


4,277


(1.1%)




4,229


4,284


(1.3%)




Other Energy Sales

1,690


1,730


(2.3%)




1,689


1,741


(3.0%)




Total Regular Sales

1,503,460


1,482,587


1.4%




1,501,429


1,481,066


1.4%





















Special Sales

15


15


—%




15


15


—%





















Total Average Number of Customers - Duke Energy
Progress

1,503,475


1,482,602


1.4%




1,501,444


1,481,081


1.4%






















































Heating and Cooling Degree Days

















Actual

















Heating Degree Days

136


131


3.8%




2,003


2,027


(1.2%)




Cooling Degree Days

641


629


1.9%




648


629


3.0%





















Variance from Normal

















Heating Degree Days

(19.0%)


(22.0%)


n/a




13.6%


14.7%


n/a




Cooling Degree Days

12.5%


11.7%


n/a




11.5%


9.6%


n/a






































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



















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




























































 

 


Duke Energy Florida

Quarterly Highlights

Supplemental Regulated Utilities Electric Information

June 2015




















Three Months Ended June 30


Six Months Ended June 30



2015


2014


%

Inc.(Dec.)


% Inc.(Dec.)

Weather

Normal (2)


2015


2014


%

Inc.(Dec.)


% Inc.(Dec.)

Weather

Normal (2)

GWH Sales (1)

















Residential

4,944


4,396


12.5%




9,048


8,447


7.1%




General Service

3,857


3,702


4.2%




7,092


6,950


2.0%




Industrial

821


803


2.2%




1,581


1,604


(1.4%)




Other Energy Sales

6


6


—%




12


12


—%




Unbilled Sales

679


592


14.7%




793


731


8.5%




Total Regular Electric Sales

10,307


9,499


8.5%


3.4%


18,526


17,744


4.4%


0.9%



















Special Sales

495


341


45.2%




749


757


(1.1%)





















Total Electric Sales - Duke Energy Florida

10,802


9,840


9.8%




19,275


18,501


4.2%





































Average Number of Customers

















Residential

1,521,460


1,498,175


1.6%




1,518,985


1,495,267


1.6%




General Service

193,278


190,979


1.2%




192,919


190,708


1.2%




Industrial

2,245


2,279


(1.5%)




2,251


2,290


(1.7%)




Other Energy Sales

1,537


1,556


(1.2%)




1,539


1,556


(1.1%)




Total Regular Sales

1,718,520


1,692,989


1.5%




1,715,694


1,689,821


1.5%





















Special Sales

14


14


—%




15


15


—%





















Total Average Number of Customers - Duke Energy
Florida

1,718,534


1,693,003


1.5%




1,715,709


1,689,836


1.5%






















































Heating and Cooling Degree Days

















Actual

















Heating Degree Days


1


(100.0%)




373


418


(10.8%)




Cooling Degree Days

1,256


1,061


18.4%




1,490


1,205


23.7%





















Variance from Normal

















Heating Degree Days

(100.0%)


(90.9%)


n/a




(6.3%)


0.7%


n/a




Cooling Degree Days

19.3%


0.7%


n/a




21.6%


(2.1%)


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 Ohio

Quarterly Highlights

Supplemental Regulated Utilities Electric Information

June 2015




















Three Months Ended June 30


Six Months Ended June 30



2015


2014


%

Inc.(Dec.)


% Inc.(Dec.)

Weather

Normal (2)


2015


2014


%

Inc.(Dec.)


% Inc.(Dec.)

Weather

Normal (2)

GWH Sales (1)

















Residential

1,811


1,813


(0.1%)




4,492


4,592


(2.2%)




General Service

2,315


2,299


0.7%




4,678


4,671


0.1%




Industrial

1,479


1,494


(1.0%)




2,927


2,930


(0.1%)




Other Energy Sales

26


28


(7.1%)




54


56


(3.6%)




Unbilled Sales

182


160


13.8%




49


(82)


159.8%




Total Regular Electric Sales

5,813


5,794


0.3%


(0.4%)


12,200


12,167


0.3%


0.4%



















Special Sales

420


30


1,300.0%




800


136


488.2%





















Total Electric Sales - Duke Energy Ohio

6,233


5,824


7.0%




13,000


12,303


5.7%





































Average Number of Customers

















Residential

746,005


741,069


0.7%




746,812


742,324


0.6%




General Service

87,200


86,497


0.8%




87,187


86,374


0.9%




Industrial

2,530


2,519


0.4%




2,534


2,521


0.5%




Other Energy Sales

3,218


3,171


1.5%




3,212


3,171


1.3%




Total Regular Sales

838,953


833,256


0.7%




839,745


834,390


0.6%





















Special Sales

1


1


—%




1


1


—%





















Total Average Number of Customers - Duke Energy
Ohio

838,954


833,257


0.7%




839,746


834,391


0.6%






















































Heating and Cooling Degree Days

















Actual

















Heating Degree Days

348


361


(3.6%)




3,310


3,470


(4.6%)




Cooling Degree Days

391


382


2.4%




391


382


2.4%





















Variance from Normal

















Heating Degree Days

(14.5%)


(11.7%)


n/a




12.1%


16.8%


n/a




Cooling Degree Days

7.7%


10.7%


n/a




6.3%


9.1%


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 Ohio

Quarterly Highlights

Supplemental Regulated Utilities Gas Information

June 2015




















Three Months Ended June 30


Six Months Ended June 30



2015


2014


%

Inc.(Dec.)


% Inc.(Dec.)

Weather

Normal (2)


2015


2014


%

Inc.(Dec.)


% Inc.(Dec.)

Weather

Normal (2)

MCF Sales (1)

















Residential

5,052,315


5,948,555


(15.1%)




27,231,220


29,534,496


(7.8%)




General Service

3,553,999


3,931,932


(9.6%)




16,625,080


17,624,423


(5.7%)




Industrial

1,335,427


1,508,405


(11.5%)




4,411,288


4,321,235


2.1%




Other Energy Sales

4,538,714


4,822,263


(5.9%)




10,754,865


11,419,293


(5.8%)




Unbilled Sales

(2,892,000)


(2,435,000)


(18.8%)




(3,245,000)


(4,902,000)


33.8%




Total Gas Sales - Duke Energy Ohio

11,588,455


13,776,155


(15.9%)


(9.3%)


55,777,453


57,997,447


(3.8%)


(1.7%)



































Average Number of Customers

















Residential

474,973


472,847


0.4%




476,554


474,482


0.4%




General Service

43,003


43,330


(0.8%)




44,171


44,316


(0.3%)




Industrial

1,604


1,609


(0.3%)




1,655


1,663


(0.5%)




Other Energy Sales

143


155


(7.7%)




144


156


(7.7%)




Total Average Number of Gas Customers -
Duke Energy Ohio

519,723


517,941


0.3%




522,524


520,617


0.4%






















































Heating and Cooling Degree Days

















Actual

















Heating Degree Days

348


361


(3.6%)




3,310


3,470


(4.6%)




Cooling Degree Days

391


382


2.4%




391


382


2.4%





















Variance from Normal

















Heating Degree Days

(14.5%)


(11.7%)


n/a




12.1%


16.8%


n/a




Cooling Degree Days

7.7%


10.7%


n/a




6.3%


9.1%


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

June 2015




















Three Months Ended June 30


Six Months Ended June 30



2015


2014


%

Inc.(Dec.)


% Inc.(Dec.)

Weather

Normal (2)


2015


2014


%

Inc.(Dec.)


% Inc.(Dec.)

Weather

Normal (2)

GWH Sales (1)

















Residential

1,807


1,871


(3.4%)




4,807


5,090


(5.6%)




General Service

1,993


2,002


(0.4%)




4,069


4,107


(0.9%)




Industrial

2,626


2,701


(2.8%)




5,170


5,224


(1.0%)




Other Energy Sales

14


14


—%




27


27


—%




Unbilled Sales

104


76


36.8%




7


(227)


103.1%




Total Regular Electric Sales

6,544


6,664


(1.8%)


(1.1%)


14,080


14,221


(1.0%)


(0.9%)



















Special Sales

1,161


1,791


(35.2%)




2,353


3,108


(24.3%)





















Total Electric Sales - Duke Energy Indiana

7,705


8,455


(8.9%)




16,433


17,329


(5.2%)





































Average Number of Customers

















Residential

696,563


689,977


1.0%




698,622


692,942


0.8%




General Service

100,564


100,237


0.3%




100,486


100,258


0.2%




Industrial

2,709


2,702


0.3%




2,699


2,719


(0.7%)




Other Energy Sales

1,574


1,506


4.5%




1,568


1,501


4.5%




Total Regular Sales

801,410


794,422


0.9%




803,375


797,420


0.7%





















Special Sales

7


6


16.7%




8


6


33.3%





















Total Average Number of Customers - Duke Energy
Indiana

801,417


794,428


0.9%




803,383


797,426


0.7%






















































Heating and Cooling Degree Days

















Actual

















Heating Degree Days

411


525


(21.7%)




3,689


4,042


(8.7%)




Cooling Degree Days

364


318


14.5%




364


318


14.5%





















Variance from Normal

















Heating Degree Days

(7.0%)


18.5%


n/a




16.9%


27.5%


n/a




Cooling Degree Days

(1.4%)


(10.9%)


n/a




(2.9%)


(12.2%)


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 CORPORATION

ADJUSTED TO REPORTED EARNINGS RECONCILIATION

Three Months Ended June 30, 2015

(Dollars in millions, except per-share amounts)





Special Items








Adjusted Earnings


Costs to Achieve, Progress Merger


Discontinued Operations


Total Adjustments


Reported Earnings

SEGMENT INCOME






















Regulated Utilities


$

632



$



$



$



$

632













International Energy


52









52













Commercial Portfolio


8





(41)


D

(41)



(33)













Total Reportable Segment Income


692





(41)



(41)



651













Other


(34)



(14)


A



(14)



(48)













Intercompany Eliminations






(3)


C

(3)



(3)













Total Reportable Segment Income and Other Net Expense


658



(14)



(44)



(58)



600













Discontinued Operations






(57)


B

(57)



(57)













Net Income (Loss) Attributable to Duke Energy Corporation


$

658



$

(14)



$

(101)



$

(115)



$

543













EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, BASIC


$

0.95



$

(0.02)



$

(0.15)



$

(0.17)



$

0.78













EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, DILUTED


$

0.95



$

(0.02)



$

(0.15)



$

(0.17)



$

0.78













A - Net of $8 million tax benefit. Recorded within Operating Expenses on the Condensed Consolidated Statements of Operations.


B - 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.


C - Reverses the impact on eliminations of classifying the nonregulated Midwest generation business as discontinued operations.


D - State tax expense resulting from the completion of the sale of the nonregulated Midwest generation business.


Weighted Average Shares (reported and adjusted) - in millions


Basic 

692


Diluted 

692

 

 



DUKE ENERGY CORPORATION

ADJUSTED TO REPORTED EARNINGS RECONCILIATION

Six Months Ended June 30, 2015

(Dollars in millions, except per-share amounts)







Special Items








Adjusted Earnings


Costs to Achieve, Progress Merger


Midwest Generation Operations


Discontinued Operations


Total Adjustments


Reported Earnings

SEGMENT INCOME


























Regulated Utilities


$

1,406



$



$



$



$



$

1,406















International Energy


88











88















Commercial Portfolio


103





(94)


B

(41)


E

(135)



(32)















Total Reportable Segment Income


1,597





(94)



(41)



(135)



1,462















Other


(58)



(27)


A





(27)



(85)















Intercompany Eliminations








(4)


D

(4)



(4)















Total Reportable Segment Income and Other Net Expense


1,539



(27)



(94)



(45)



(166)



1,373















Discontinued Operations






94


B

(60)


C

34



34















Net Income (Loss) Attributable to Duke Energy Corporation


$

1,539



$

(27)



$



$

(105)



$

(132)



$

1,407















EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, BASIC


$

2.20



$

(0.04)



$



$

(0.15)



$

(0.19)



$

2.01















EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, DILUTED


$

2.20



$

(0.04)



$



$

(0.15)



$

(0.19)



$

2.01



A - Net of $16 million tax benefit. Recorded within Operating Expenses on the Condensed Consolidated Statements of Operations.


B - 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).


C - Recorded in Income (Loss) 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.


D - Reverses the impact on eliminations of classifying the nonregulated Midwest generation business as discontinued operations.


E - State tax expense resulting from the completion of the sale of the nonregulated Midwest generation business.


Weighted Average Shares (reported and adjusted) - in millions


Basic 

700


Diluted 

700

 

 


DUKE ENERGY CORPORATION

ADJUSTED TO REPORTED EARNINGS RECONCILIATION

Three Months Ended June 30, 2014

(Dollars in millions, except per-share amounts)







Special Items










Adjusted Earnings


Costs to Achieve, Progress Merger


Midwest Generation Operations


Economic Hedges (Mark-to-Market) *


Discontinued Operations


Total Adjustments


Reported Earnings

SEGMENT INCOME






























Regulated Utilities


$

689



$



$



$



$



$



$

689

















International Energy


146













146

















Commercial Portfolio


16





(34)


B

(3)


C



(37)



(21)

















Total Reportable Segment Income


851





(34)



(3)





(37)



814

















Other


(65)



(38)


A

13


B





(25)



(90)

















Intercompany Eliminations










(2)


D

(2)



(2)

















Total Reportable Segment Income and Other Net Expense


786



(38)



(21)



(3)



(2)



(64)



722

















Discontinued Operations






21


B



(134)


E

(113)



(113)

















Net Income (Loss) Attributable to Duke Energy Corporation


$

786



$

(38)



$



$

(3)



$

(136)



$

(177)



$

609

















EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, BASIC


$

1.11



$

(0.06)



$



$



$

(0.19)



$

(0.25)



$

0.86

















EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, DILUTED


$

1.11



$

(0.06)



$



$



$

(0.19)



$

(0.25)



$

0.86


















A - Net of $23 million tax benefit. Recorded in Operating Expenses on the Consolidated Statements of Operations.

B - Operating results of the nonregulated Midwest generation business that had been classified from discontinued operations after adjustment for special items and economic hedges to the Commercial Portfolio segment (net of $10 million tax expense) and Other segment (net of $13 million tax benefit).

C - Net of $2 million tax expense. Recorded in Operating Revenues on the Consolidated Statement of Operations.

D - Reverses the impact on eliminations of classifying the nonregulated Midwest generation business as discontinued operations.

E - Recorded in Income (Loss) From Discontinued Operations, net of tax on the Consolidated Statement of Operations. Includes the impairment of the nonregulated Midwest generation business and the mark-to-market of economic hedges of the nonregulated Midwest generation business.


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.

 

 


DUKE ENERGY CORPORATION

ADJUSTED TO REPORTED EARNINGS RECONCILIATION

Six Months Ended June 30, 2014

(Dollars in millions, except per-share amounts)






Special Items










Adjusted Earnings


Costs to Achieve, Progress Merger


Midwest Generation Impairment


Midwest Generation Operations


Economic Hedges (Mark-to-Market) *


Discontinued Operations


Total Adjustments


Reported Earnings

SEGMENT INCOME


































Regulated Utilities


$

1,426



$



$



$



$



$



$



$

1,426



















International Energy


276















276



















Commercial Portfolio


26





(59)


B

(14)


C

(6)


F



(79)



(53)



















Total Reportable Segment Income


1,728





(59)



(14)



(6)





(79)



1,649



















Other


(113)



(72)


A



8


C





(64)



(177)



















Intercompany Eliminations












(4)


E

(4)



(4)



















Total Reportable Segment Income and Other Net Expense


1,615



(72)



(59)



(6)



(6)



(4)



(147)



1,468



















Discontinued Operations








6


C



(962)


D

(956)



(956)



















Net Income (Loss) Attributable to Duke Energy Corporation


$

1,615



$

(72)



$

(59)



$



$

(6)



$

(966)



$

(1,103)



$

512



















EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, BASIC


$

2.28



$

(0.10)



$

(0.08)



$



$

(0.01)



$

(1.37)



$

(1.56)



$

0.72



















EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, DILUTED


$

2.28



$

(0.10)



$

(0.08)



$



$

(0.01)



$

(1.37)



$

(1.56)



$

0.72




















A - Net of $44 million tax benefit. $1 million recorded as a decrease in Operating Revenues, $114 million recorded within Operating Expenses and $1 million recorded within Interest Expense on the Consolidated Statements of Operations.

B - Net of $35 million tax benefit. Recorded within Impairment Charges (Operating Expenses) on the 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 to the Commercial Portfolio segment (net of $19 million tax benefit) and Other segment (net of $8 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 and the mark-to-market of economic hedges of the nonregulated Midwest generation business.

E - Reverses the impact on eliminations of classifying the nonregulated Midwest generation business as discontinued operations.

F - Net of $3 million tax benefit. Recorded within Operating Revenues on the Consolidating 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.

 

 


DUKE ENERGY CORPORATION

ADJUSTED EFFECTIVE TAX RECONCILIATION

Three and Six Months Ended June 30, 2015

(Dollars in Millions)




Three Months Ended
 June 30, 2015


Six Months Ended
 June 30, 2015




Balance


Effective Tax Rate


Balance


Effective Tax Rate












Adjusted Earnings, Pre-Tax Income*


$

962





$

2,272





Costs to Achieve, Progress Energy Merger


(22)





(43)





Midwest Generation Operations






(147)





Intercompany Eliminations


(2)





(4)





Reported Income From Continuing Operations
Before Income Taxes


$

938





$

2,078



































Adjusted Tax Expense*


$

300



31.2

%

**

$

726



32.0

%

**

Tax Adjustment Related to Midwest Generation Sale


41





41





Midwest Generation Operations






(53)





Costs to Achieve, Progress Energy Merger


(8)





(16)





Intercompany Eliminations


1









Reported Income Tax Expense From Continuing Operations


$

334



35.6

%


$

698



33.6

%












*Includes amounts attributable to noncontrolling interests











**Adjusted effective tax rate is a non-GAAP financial measure as the rate is calculated using a 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 Six Months Ended June 30, 2014

(Dollars in Millions)




Three Months Ended
 June 30, 2014


Six Months Ended
 June 30, 2014




Balance


Effective Tax Rate


Balance


Effective Tax Rate












Adjusted Earnings, Pre-Tax Income*


$

1,101





$

2,354





Costs to Achieve, Progress Energy Merger


(61)





(116)





Midwest Generation Operations


(24)





(33)





Economic Hedges (Mark-to-Market)


(5)





(9)





Asset Impairment






(94)





Intercompany Eliminations


(3)





(5)





Reported Income From Continuing Operations
Before Income Taxes


$

1,008





$

2,097



































Adjusted Tax Expense*


$

311



28.2

%

**

$

731



31.1

%

**

Costs to Achieve, Progress Energy Merger


(23)





(44)





Midwest Generation Operations


(3)





(27)





Economic Hedges (Mark-to-Market)


(2)





(3)





Asset Impairment






(35)





Intercompany Eliminations


(1)





(1)





Reported Income Tax Expense From Continuing Operations


$

282



28.0

%


$

621



29.6

%












*Includes amounts attributable to noncontrolling interests











**Adjusted effective tax rate is a non-GAAP financial measure as the rate is calculated using a 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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SOURCE Duke Energy



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