Duke Energy reports third quarter 2015 financial results

Nov 05, 2015, 07:00 ET from Duke Energy

CHARLOTTE, N.C., Nov. 5, 2015 /PRNewswire/ --

  • Third quarter 2015 adjusted diluted earnings per share (EPS) were $1.47, compared to $1.40 for the third quarter of 2014
  • Reported diluted EPS of $1.35 for third quarter 2015, compared to $1.80 for the third quarter of 2014
  • Company narrows its 2015 adjusted diluted earnings guidance range from $4.55 to $4.75 per share to $4.55 to $4.65 per share

Duke Energy today announced third quarter 2015 adjusted diluted EPS of $1.47, compared to $1.40 for the third quarter of 2014. Third quarter 2015 reported EPS was $1.35, compared to $1.80 for the same period last year.

Earnings for the third quarter of 2015 were higher than the prior year quarterly results, primarily due to warmer weather compared to the previous year. The company also experienced strong growth in the Regulated Utilities business, including the impact of the recently completed North Carolina Eastern Municipal Power Agency (NCEMPA) acquisition. 

During 2015, the company has been able to offset weakness in the International business with favorable weather, solid operational performance in the regulated business, and benefits from closing certain strategic initiatives earlier than anticipated. The company has narrowed its 2015 adjusted diluted earnings guidance range from $4.55 to $4.75 per share to $4.55 to $4.65 per share.

"I am pleased with our overall operational and financial performance to date in 2015," said Lynn Good, president and CEO. "We are on-track to achieve our financial objectives for the year and our regulated generation fleet continues to reliably meet customer needs.

"Additionally, we are taking significant steps to grow our low-risk regulated business mix as highlighted by last week's announced acquisition of Piedmont Natural Gas, which provides us with additional capabilities and growth potential around natural gas infrastructure," Good added.

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 by segment compared to the prior year is provided on pages 16 and 17.

The discussion below of third 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 third quarter 2015 adjusted segment income of $965 million, compared to $920 million in the third quarter 2014, an increase of 7 cents per share, excluding the benefit of the $1.5 billion accelerated stock repurchase program that was completed in June.

Higher quarterly results at Regulated Utilities were primarily driven by:

  • Favorable weather (+$0.09 per share) driven by warmer temperatures in the Carolinas. This was the first above normal summer weather experienced since 2012.
  • 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 (+$0.05 per share) resulting from growth in contracted amounts and earnings from the long-term wholesale contract associated with the recent NCEMPA asset purchase

These favorable drivers were partially offset by:

  • Higher O&M expense (-$0.06 per share) due to the timing of planned work, increased costs related to the recent NCEMPA asset purchase and storm costs
  • Higher effective tax rate (-$0.04 per share) primarily due to additional deductions in the prior year

On a year-to-date basis, Regulated Utilities recognized adjusted segment income of $2,371 million, compared to $2,346 million for the same period last year, an increase of 3 cents per share, excluding the benefit of the accelerated stock repurchase program.

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

  • Higher revenues from increased pricing and riders (+$0.14 per share) due to increased energy efficiency programs and prior year true-ups that did not recur, partially offset by a regulatory order in Ohio related to energy efficiency (-$0.03 per share)
  • Favorable weather (+$0.11 per share) across Duke Energy's service territories
  • Increased wholesale net margins (+$0.12 per share) due to growth in contracted amounts and earnings from the long-term wholesale contract associated with the recent NCEMPA asset purchase
  • Higher AFUDC equity (+$0.03 per share) due to increased capital spending
  • Higher weather-normal retail volumes (+$0.03 per share) of 0.4 percent compared to 2014

These favorable drivers were partially offset by:

  • Higher O&M expense (-$0.19 per share) due to timing of planned outages, increased costs related to the recent NCEMPA asset purchase and nuclear outage cost levelization. These costs were partially offset by lower storm costs.
  • Higher effective tax rate (-$0.08 per share) primarily due to a favorable prior year state tax settlement and additional deductions in the prior year
  • Higher depreciation and amortization expense (-$0.04 per share) primarily resulting from additional plant in-service

International Energy

International Energy recognized third quarter 2015 adjusted segment income of $69 million, compared to $80 million in the third quarter 2014, a decrease of 2 cents per share, excluding the benefit of the accelerated stock repurchase program. 

Lower quarterly results at International Energy were primarily driven by:

  • Lower results in Latin America (-$0.01 per share) principally driven by unfavorable foreign exchange rates and an asset impairment in Ecuador. These drivers were partially offset by lower purchased power costs in Brazil.  
  • Lower margins at National Methanol (-$0.01 per share) due to lower MTBE prices

On a year-to-date basis, International Energy recognized adjusted segment income of $157 million, compared to $356 million for the same period in 2014, a decrease of 29 cents per share, excluding the benefit of the accelerated stock repurchase program.

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

  • Weaker results in Latin America (-$0.25 per share) primarily due to lower sales volumes and higher purchased power costs resulting from ongoing drought conditions and decreased demand in Brazil, a prior-year tax benefit in Chile, unfavorable foreign currency exchange rates, and an asset impairment in Ecuador
  • Lower margins at National Methanol (-$0.04 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 a third quarter 2015 adjusted segment loss of $4 million, compared to income of $51 million in the third quarter 2014, a decrease of 8 cents per share. The decline in Commercial Portfolio's quarterly earnings was primarily due to the sale of the Midwest Generation business to Dynegy, which was completed in April 2015.

On a year-to-date basis, Commercial Portfolio recognized adjusted segment income of $99 million, compared to $77 million in the comparable year-to-date period of 2014, an increase of 3 cents per share.

Commercial Portfolio's higher year-to-date earnings were driven by higher results from the Midwest Generation fleet (+$0.06 per share), which was sold in April 2015, partially offset by lower earnings from the renewables fleet (-$0.01 per share) resulting from lower wind resources during 2015.

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 third quarter 2015 adjusted net expense of $19 million, compared to net expense of $58 million in the third quarter 2014, an improvement of 6 cents per share, excluding the impact of the accelerated stock repurchase program. Other's quarterly results were primarily driven by a prior year tax charge and quarterly tax levelization, including the recognition of renewable tax credits.

On a year-to-date basis, Other recognized adjusted net expense of $77 million, compared to $171 million in the comparable period of 2014, an improvement of 14 cents per share, excluding the impact of the accelerated stock repurchase program. Other's year-to-date results were primarily driven by favorable tax resolution, a prior year tax charge and quarterly tax levelization, including the recognition of renewable tax credits.

The consolidated adjusted effective tax rate for third quarter 2015 was 31 percent, compared to 34 percent in the third quarter of 2014. On a year-to-date basis, the consolidated adjusted effective tax rate was 32 percent, consistent with 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 third quarter 2015 and year-to-date results of approximately 4 cents per share and 6 cents per share, respectively.

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 conference call will be webcast live through the investor relations page of Duke Energy's website at www.duke-energy.com/investors. In order to expedite access to the call, participants can register in advance through the webcast event link included on the company's investor relations website. A replay of the webcast will be accessible through the company's Investor Relations website and mobile app.

Special items and non-GAAP reconciliation

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

(In millions, except per-share amounts)

After-Tax
Amount

3Q2015
EPS
Impact

3Q2014
EPS
Impact

Third Quarter 2015




-   Costs to achieve, Progress Energy merger

$(15)

$(0.02)


-   Edwardsport settlement

$(56)

$(0.08)


-   Ash basin settlement

$(4)

$(0.01)


-    Discontinued operations

$(5)

$(0.01)


Third Quarter 2014




-   Costs to achieve, Progress Energy merger

$(35)


$(0.05)

-   Asset sales

$9


$0.01

-   Discontinued operations (1)(2)

$307


$0.44

Total diluted EPS impact


$(0.12)

$0.40



(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 (+$0.55) per diluted share less the Midwest generation operations results classified as discontinued operations of (+$0.11) 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:

 


3Q2015
EPS

3Q2014
EPS

Diluted EPS, as reported

$1.35

$1.80

Adjustments to reported EPS:



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

$0.12

$(0.40)

Diluted EPS, adjusted

$1.47

$1.40

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; the expected timing and likelihood of completion of the proposed acquisition of Piedmont, including the timing, receipt and terms and conditions of any required governmental and regulatory approvals of the proposed acquisition that could reduce anticipated benefits or cause the parties to abandon the acquisition, as well as the ability to successfully integrate the businesses 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; 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     

 


September 2015

QUARTERLY HIGHLIGHTS

(Unaudited)










Three Months Ended September 30,


Nine Months Ended September 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 stockholders








Basic

$

1.36



$

1.25



$

3.31



$

3.33


Diluted

$

1.36



$

1.25



$

3.31



$

3.33










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








Basic

$

(0.01)



$

0.55



$

0.05



$

(0.81)


Diluted

$

(0.01)



$

0.55



$

0.05



$

(0.81)










Net income attributable to Duke Energy Corporation common stockholders








Basic

$

1.35



$

1.80



$

3.36



$

2.52


Diluted

$

1.35



$

1.80



$

3.36



$

2.52










Weighted-average shares outstanding








Basic

688



707



696



707


Diluted

688



707



696



707










SEGMENT INCOME (LOSS) BY BUSINESS SEGMENT








Regulated Utilities(a)

$

905



$

920



$

2,311



$

2,346


International Energy

69



80



157



356


Commercial Portfolio (b)(c)

(3)



(17)



(35)



(70)


Total Reportable Segment Income

971



983



2,433



2,632


Other Net Expense(d)(e)

(34)



(92)



(119)



(269)


Intercompany Eliminations



(3)



(4)



(7)


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

(5)



386



29



(570)


Net Income Attributable to Duke Energy Corporation

$

932



$

1,274



$

2,339



$

1,786










CAPITALIZATION








Total Common Equity





48%



50%


Total Debt





52%



50%










Total Debt





$

42,622



$

41,645


Book Value Per Share





$

57.92



$

58.61


Actual Shares Outstanding





688



707










CAPITAL AND INVESTMENT EXPENDITURES








Regulated Utilities (g)

$

2,539



$

1,182



$

5,212



$

3,357


International Energy

14



15



33



40


Commercial Portfolio

374



156



757



324


Other

52



29



166



115


Total Capital and Investment Expenditures

$

2,979



$

1,382



$

6,168



$

3,836


















(a)

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

(b)

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

(c)

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

(d)

Includes costs to achieve the 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).

(e)

Includes costs to achieve the Progress merger of $35 million for the three months ended September 30, 2014 (net of tax of $21 million) and $107 million for the nine months ended September 30, 2014 (net of tax of $65 million).

(f)

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

(g)

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

 

 


 September 2015

QUARTERLY HIGHLIGHTS

(Unaudited)










Three Months Ended


Nine Months Ended


September 30,


September 30,

(In millions, except for GWh and MW amounts)

2015


2014


2015


2014

REGULATED UTILITIES








  Operating Revenues

$

6,147



$

5,986



$

17,090



$

17,074


  Operating Expenses(a)

4,481



4,361



12,789



12,807


  Gains on Sales of Other Assets, net

1



1



10



2


  Operating Income

1,667



1,626



4,311



4,269


  Other Income and Expenses

56



75



187



206


  Interest Expense

280



271



829



816


  Income Before Income Taxes

1,443



1,430



3,669



3,659


  Income Tax Expense(b)

538



510



1,358



1,313


  Segment Income

$

905



$

920



$

2,311



$

2,346










  Depreciation and Amortization

$

691



$

710



$

2,096



$

2,075










  Duke Energy Carolinas GWh sales

23,737



22,821



67,511



67,350


  Duke Energy Progress GWh sales

18,283



16,540



50,000



47,394


  Duke Energy Florida GWh sales

11,513



11,550



30,788



30,051


  Duke Energy Ohio GWh sales

6,698



6,465



19,698



18,768


  Duke Energy Indiana GWh sales

8,784



8,224



25,217



25,553


  Total GWh sales

69,015



65,600



193,214



189,116


  Net Proportional MW Capacity in Operation





50,033



49,471










INTERNATIONAL ENERGY








  Operating Revenues

$

281



$

366



$

841



$

1,111


  Operating Expenses

200



275



639



760


  Gains (Losses) on Sales of Other Assets, net



2



(1)



7


  Operating Income

81



93



201



358


  Other Income and Expenses

24



43



69



152


  Interest Expense

21



25



66



71


  Income Before Income Taxes

84



111



204



439


  Income Tax Expense

14



29



44



74


  Less: Income Attributable to Noncontrolling Interests

1



2



3



9


  Segment Income

$

69



$

80



$

157



$

356










  Depreciation and Amortization

$

23



$

23



$

69



$

74










  Sales, GWh

4,590



4,292



13,580



13,814


  Proportional MW Capacity in Operation





4,333



4,358










COMMERCIAL PORTFOLIO








  Operating Revenues

$

66



$

50



$

214



$

195


  Operating Expenses(c)

82



87



255



355


  Gains on Sales of Other Assets, net





6




  Operating Loss

(16)



(37)



(35)



(160)


  Other Income and Expenses

(3)



5



(3)



15


  Interest Expense

11



14



33



41


  Loss Before Income Taxes

(30)



(46)



(71)



(186)


  Income Tax Benefit(d)(e)

(26)



(29)



(35)



(116)


  Less: Loss Attributable to Noncontrolling Interests

$

(1)



$



$

(1)



$


  Segment Loss

$

(3)



$

(17)



$

(35)



$

(70)










  Depreciation and Amortization

$

27



$

24



$

77



$

70










  Actual Coal-fired Plant Production, GWh



192





867


  Actual Renewable Plant Production, GWh

1,230



1,054



3,913



4,112


  Actual Plant Production, GWh

1,230



1,246



3,913



4,979


  Net Proportional MW Capacity in Operation





1,634



1,698










OTHER








  Operating Revenues

$

17



$

25



$

78



$

79


  Operating Expenses(f)(g)

64



84



177



269


  Gains on Sales of Other Assets, net

3



1



16



2


  Operating Loss

(44)



(58)



(83)



(188)


  Other Income and Expenses

(2)



18



8



33


  Interest Expense

91



101



285



302


  Loss Before Income Taxes

(137)



(141)



(360)



(457)


  Income Tax Benefit(h)(i)

(106)



(50)



(249)



(190)


  Less: Income Attributable to Noncontrolling Interests

3



1



8



2


  Segment Net Expense

$

(34)



$

(92)



$

(119)



$

(269)










  Depreciation and Amortization

$

33



$

31



$

99



$

86


















(a)

Includes a pre-tax charge of $85 million for the three and nine months ended September 30, 2015, related to the Edwardsport settlement.

(b)

Includes a tax benefit of $34 million for the three and nine months ended September 30, 2015, related to the Edwardsport settlement.

(c)

Includes a pre-tax impairment charge of $94 million for the nine months ended September 30, 2014, related to OVEC.

(d)

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

(e)

Includes a tax benefit of $35 million for the nine months ended September 30, 2014, related to OVEC.

(f)

Includes costs to achieve the Progress merger of $24 million for the three months ended September 30, 2015, and $67 million for the nine months ended September 30, 2015.

(g)

Includes costs to achieve the Progress merger of $51 million for the three months ended September 30, 2014, and $165 million for the nine months ended September 30, 2014.

(h)

Includes tax benefit related to costs to achieve the Progress merger of $9 million for the three months ended September 30, 2015, and $25 million for the nine months ended September 30, 2015.

(i)

Includes tax benefit related to costs to achieve the Progress merger of $21 million for the three months ended September 30, 2014, and $65 million for the nine months ended September 30, 2014.

 

 

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,


2015


2014


2015


2014

Operating Revenues








Regulated electric

$

6,017



$

5,861



$

16,564



$

16,549


Nonregulated electric and other

377



449



1,157



1,403


Regulated natural gas

89



85



416



414


Total operating revenues

6,483



6,395



18,137



18,366


Operating Expenses








Fuel used in electric generation and purchased power - regulated

2,113



2,132



5,775



5,940


Fuel used in electric generation and purchased power - nonregulated

61



148



283



410


Cost of natural gas and other

21



27



158



181


Operation, maintenance and other

1,426



1,409



4,274



4,254


Depreciation and amortization

774



788



2,341



2,305


Property and other taxes

293



275



836



936


Impairment charges

111



1



111



81


Total operating expenses

4,799



4,780



13,778



14,107


Gain on Sales of Other Assets and Other, net

4



4



31



11


Operating Income

1,688



1,619



4,390



4,270


Other Income and Expenses








Equity in earnings of unconsolidated affiliates

17



28



53



97


Other income and expenses, net

57



109



203



293


Total other income and expenses

74



137



256



390


Interest Expense

402



405



1,208



1,212


Income from Continuing Operations before Income Taxes

1,360



1,351



3,438



3,448


Income Tax Expense from Continuing Operations

420



460



1,118



1,081


Income from Continuing Operations

940



891



2,320



2,367


(Loss) Income from Discontinued Operations, net of tax

(5)



378



29



(578)


Net Income

935



1,269



2,349



1,789


Less: Net Income Attributable to Noncontrolling Interests

3



(5)



10



3


Net Income Attributable to Duke Energy Corporation

$

932



$

1,274



$

2,339



$

1,786


















Earnings Per Share - Basic and Diluted








Income from continuing operations attributable to Duke Energy Corporation common stockholders








Basic

$

1.36



$

1.25



$

3.31



$

3.33


Diluted

$

1.36



$

1.25



$

3.31



$

3.33


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








Basic

$

(0.01)



$

0.55



$

0.05



$

(0.81)


Diluted

$

(0.01)



$

0.55



$

0.05



$

(0.81)


Net income attributable to Duke Energy Corporation common stockholders








Basic

$

1.35



$

1.80



$

3.36



$

2.52


Diluted

$

1.35



$

1.80



$

3.36



$

2.52


Weighted-average shares outstanding








Basic

688



707



696



707


Diluted

688



707



696



707


 

 

DUKE ENERGY CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)







(in million, except per-share amounts)


September 30, 2015


December 31, 2014

ASSETS





Current Assets





Cash and cash equivalents


$

1,370



$

2,036


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


722



791


Restricted receivables of variable interest entities (net of allowance for doubtful accounts of $54 at September 30, 2015 and $51 at December 31, 2014)


2,037



1,973


Inventory


3,537



3,459


Assets held for sale




364


Regulatory assets


963



1,115


Other


1,566



1,837


Total current assets


10,195



11,575


Investments and Other Assets





Investments in equity method unconsolidated affiliates


501



358


Nuclear decommissioning trust funds


5,566



5,546


Goodwill


16,312



16,321


Assets held for sale




2,642


Other


3,205



3,008


Total investments and other assets


25,584



27,875


Property, Plant and Equipment





Cost


110,795



104,861


Accumulated depreciation and amortization


(37,479)



(34,824)


Generation facilities to be retired, net


460



9


Net property, plant and equipment


73,776



70,046


Regulatory Assets and Deferred Debits





Regulatory assets


11,290



11,042


Other


188



171


Total regulatory assets and deferred debits


11,478



11,213


Total Assets


$

121,033



$

120,709


LIABILITIES AND EQUITY





Current Liabilities





Accounts payable


$

2,078



$

2,271


Notes payable and commercial paper


2,419



2,514


Taxes accrued


628



569


Interest accrued


483



418


Current maturities of long-term debt


2,536



2,807


Liabilities associated with assets held for sale




262


Regulatory liabilities


320



204


Other


2,052



2,188


Total current liabilities


10,516



11,233


Long-term Debt


37,667



37,213


Deferred Credits and Other Liabilities





Deferred income taxes


13,999



13,423


Investment tax credits


416



427


Accrued pension and other post-retirement benefit costs


1,130



1,145


Liabilities associated with assets held for sale




35


Asset retirement obligations


9,713



8,466


Regulatory liabilities


6,129



6,193


Other


1,595



1,675


Total deferred credits and other liabilities


32,982



31,364


Commitments and Contingencies





Equity





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





and 707 million shares outstanding at September 30, 2015 and





December 31, 2014, respectively


1



1


Additional paid-in capital


37,953



39,405


Retained earnings


2,656



2,012


Accumulated other comprehensive income


(778)



(543)


Total Duke Energy Corporation stockholder's equity


39,832



40,875


Noncontrolling interests


36



24


Total equity


39,868



40,899


Total Liabilities and Equity


$

121,033



$

120,709


 

 

DUKE ENERGY CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In millions)








Nine Months Ended September 30,



2015


2014

CASH FLOWS FROM OPERATING ACTIVITIES





Net Income


$

2,349



$

1,789


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


3,047



3,378


Net cash provided by operating activities


5,396



5,167







CASH FLOWS FROM INVESTING ACTIVITIES





Net cash used in investing activities


(3,291)



(3,734)







CASH FLOWS FROM FINANCING ACTIVITIES





Net cash used in financing activities


(2,771)



(1,003)







Net (decrease) increase in cash and cash equivalents


(666)



430


Cash and cash equivalents at the beginning of period


2,036



1,501


Cash and cash equivalents at end of period


$

1,370



$

1,931


 

 


DUKE ENERGY CORPORATION

EARNINGS VARIANCES

September 2015 QTD vs. Prior Year












($ per share)

Regulated

Utilities


International

Energy


Commercial

Portfolio


Other


Consolidated

2014 QTD Reported Earnings Per Share, Diluted

$

1.30



$

0.11



$

(0.03)



$

(0.13)



$

1.80


Costs to Achieve, Progress Merger







0.05



0.05


Asset Sales







(0.01)



(0.01)


Midwest Generation Operations (offset in Discontinued Operations)





0.10



0.01



0.11


Discontinued Operations









(0.55)


2014 QTD Adjusted Earnings Per Share, Diluted

$

1.30



$

0.11



$

0.07



$

(0.08)



$

1.40


Stock Repurchase (a)

0.03



0.01







0.04


Weather

0.09









0.09


Pricing and Riders (b)

0.07









0.07


Wholesale (c)

0.05









0.05


Operation and Maintenance, net of recoverables (d)

(0.06)









(0.06)


Latin America, including Foreign Exchange Rates (e)



(0.01)







(0.01)


National Methanol Company



(0.01)







(0.01)


Midwest Generation (f)





(0.08)





(0.08)


Interest Expense

(0.01)







0.01




Change in effective tax rates

(0.04)







0.07



0.03


Other (g)

(0.03)







(0.02)



(0.05)


2015 QTD Adjusted Earnings Per Share, Diluted

$

1.40



$

0.10



$

(0.01)



$

(0.02)



1.47


Edwardsport Settlement

(0.08)









(0.08)


Costs to Achieve, Progress Merger







(0.02)



(0.02)


Ash Basin Settlement

(0.01)









(0.01)


Discontinued Operations









(0.01)


2015 QTD Reported Earnings Per Share, Diluted

$

1.31



$

0.10



$

(0.01)



$

(0.04)



$

1.35














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.



(a)

Due to the decrease in 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 September 30, 2014, to 688 million shares for the three months ended September 30, 2015.

(b)

Primarily due to prior-year fuel and purchased power cost true-ups that did not recur (+$0.04) and higher energy efficiency and other rider recoveries across jurisdictions (+$0.02).

(c)

Primarily due to higher volumes and capacity rates due to favorable weather and the implementation of new contracts, including the new 30-year contract with NCEMPA.

(d)

Primarily due to an increase in planned spending, increased costs related to the recent NCEMPA asset purchase and higher storm restoration costs.

(e)

Primarily due to weakness in foreign currency exchange rates (-$0.03) and an asset impairment in Ecuador (-$0.02), partially offset by higher results in Brazil (+$0.04) due to lower purchased power costs.

(f)

Due to the sale of the nonregulated Midwest generation business.

(g)

Amount for Regulated Utilities includes increased depreciation and amortization expense (-$0.01) and an impairment of the Crystal River Unit 3 regulatory asset (-$0.02).

 


DUKE ENERGY CORPORATION

EARNINGS VARIANCES

September 2015 YTD vs. Prior Year












($ per share)

Regulated

Utilities


International

Energy


Commercial

Portfolio


Other


Consolidated

2014 YTD Reported Earnings Per Share, Diluted

$

3.32



$

0.50



$

(0.10)



$

(0.38)



$

2.52


Asset Sales







(0.01)



(0.01)


Costs to Achieve, Progress Merger







0.15



0.15


Midwest Generation Operations (offset in Discontinued Operations)





0.12





0.12


Asset Impairment





0.08





0.08


Economic Hedges (Mark-to-Market)





0.01





0.01


Discontinued Operations









0.82


2014 YTD Adjusted Earnings Per Share, Diluted

$

3.32



$

0.50



$

0.11



$

(0.24)



$

3.69


Stock Repurchase (a)

0.06



0.01





(0.01)



0.06


Weather

0.11









0.11


Pricing and Riders (b)

0.14









0.14


Volumes

0.03









0.03


Wholesale (c)

0.12









0.12


Operation and Maintenance, net of recoverables (d)

(0.19)









(0.19)


Latin America, including Foreign Exchange Rates (e)



(0.25)







(0.25)


National Methanol Company



(0.04)







(0.04)


Duke Energy Renewables (f)





(0.01)





(0.01)


Midwest Generation (g)





0.06





0.06


Interest Expense

(0.01)







0.01




Change in effective tax rates

(0.08)





(0.01)



0.14



0.05


Other (h)

(0.09)





(0.01)



(0.01)



(0.11)


2015 YTD Adjusted Earnings Per Share, Diluted

$

3.41



$

0.22



$

0.14



$

(0.11)



3.66


Edwardsport Settlement

(0.08)









(0.08)


Costs to Achieve, Progress Merger







(0.05)



(0.05)


Ash Basin Settlement

(0.01)









(0.01)


Midwest Generation Operations (offset in Discontinued Operations)





(0.14)





(0.14)


Discontinued Operations





(0.06)





(0.02)


2015 YTD Reported Earnings Per Share, Diluted

$

3.32



$

0.22



$

(0.06)



$

(0.16)



$

3.36














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.



(a)

Due to the decrease in 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 nine months ended September 30, 2014, to 696 million shares for the nine months ended September 30, 2015.

(b)

Primarily due to prior-year fuel and purchased power cost true-ups that did not recur (+$0.08), and higher energy efficiency and other rider recoveries in most jurisdictions (+$0.05), partially offset by the impact of a regulatory order that limited the ability to carry forward energy efficiency savings for Duke Energy Ohio (-$0.03).

(c)

Primarily due to higher volumes and capacity rates due to favorable weather and the implementation of new contracts, including the new 30-year contract with NCEMPA.

(d)

Primarily due to an increase in planned spending, increased costs related to the recent NCEMPA asset purchase and nuclear outage cost levelization, partially offset by lower storm restoration costs.

(e)

Primarily due to lower results in Brazil (-$0.09) 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 (-$0.04) due to lower generation and prices from increased competition and unfavorable foreign currency exchange

rates (-$0.03).

(f)

Primarily due to lower wind results.

(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 (-$0.04) due to higher depreciable base and an impairment of the Crystal River Unit 3 regulatory asset (-$0.02), partially offset by higher AFUDC-equity (+$0.03).

 

Regulated Utilities

Quarterly Highlights

Supplemental Regulated Utilities Electric Information

September 2015




















Three Months Ended September 30


Nine Months Ended September 30



2015


2014


%

Inc.(Dec.)


% Inc.(Dec.)

Weather

Normal (2)


2015


2014


%

Inc.(Dec.)


% Inc.(Dec.)

Weather

Normal (2)

GWH Sales (1)

















Residential

24,176



22,960



5.3%



1.0%



66,195



65,064



1.7%



0.3%



General Service

22,047



21,494



2.6%



—%



59,124



58,366



1.3%



0.4%



Industrial

14,001



13,837



1.2%



(0.4%)



39,370



38,973



1.0%



0.7%



Other Energy Sales

149



152



(2.0%)





450



455



(1.1%)





Unbilled Sales

(1,808)



(1,500)



(20.5%)



n/a


(476)



(920)



48.3%



n/a


Total Retail Sales

58,565



56,943



2.8%



0.3%



164,663



161,938



1.7%



0.4%




















Special Sales

10,450



8,657



20.7%





28,551



27,178



5.1%






















Total Consolidated Electric Sales - Regulated Utilities

69,015



65,600



5.2%





193,214



189,116



2.2%






































Average Number of Customers (Electric)

















Residential

6,365,092



6,281,374



1.3%





6,351,973



6,271,001



1.3%





General Service

954,659



944,484



1.1%





951,350



941,839



1.0%





Industrial

18,105



18,260



(0.8%)





18,150



18,315



(0.9%)





Other Energy Sales

23,113



22,810



1.3%





23,024



22,579



2.0%





Total Regular Sales

7,360,969



7,266,928



1.3%





7,344,497



7,253,734



1.3%






















Special Sales

64



62



3.2%





63



62



1.6%






















Total Average Number of Customers - Regulated Utilities

7,361,033



7,266,990



1.3%





7,344,560



7,253,796



1.3%























































Heating and Cooling Degree Days

















Carolinas - Actual

















Heating Degree Days

3



10



(70.0%)





2,057



2,135



(3.7%)





Cooling Degree Days

1,108



942



17.6%





1,744



1,535



13.6%






















Variance from Normal

















Heating Degree Days

(57.1%)



25.0%



n/a




11.3%



15.4%



n/a




Cooling Degree Days

4.3%



(11.2%)



n/a




7.7%



(4.7%)



n/a





















Midwest - Actual

















Heating Degree Days

23



73



(68.5%)





3,523



3,829



(8.0%)





Cooling Degree Days

704



568



23.9%





1,082



918



17.9%






















Variance from Normal

















Heating Degree Days

(48.9%)



46.0%



n/a




13.7%



22.7%



n/a




Cooling Degree Days

(13.1%)



(29.4%)



n/a




(8.5%)



(20.9%)



n/a





















Florida - Actual

















Heating Degree Days





—%





373



418



(10.8%)





Cooling Degree Days

1,487



1,497



(0.7%)





2,977



2,702



10.2%






















Variance from Normal

















Heating Degree Days

—%



—%



n/a





(6.2%)



0.5%



n/a




Cooling Degree Days

(1.6%)



(0.7%)



n/a





8.8%



(1.3%)



n/a






































(1)

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





(2)

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




 

 


Duke Energy Carolinas

Quarterly Highlights

Supplemental Regulated Utilities Electric Information

September 2015




















Three Months Ended September 30


Nine Months Ended September 30



2015


2014


%

Inc.(Dec.)


% Inc.(Dec.)

Weather

Normal (2)


2015


2014


%

Inc.(Dec.)


% Inc.(Dec.)

Weather

Normal (2)

GWH Sales (1)

















Residential

8,213



7,501



9.5%





22,445



21,937



2.3%





General Service

8,273



7,951



4.0%





22,074



21,685



1.8%





Industrial

6,041



5,849



3.3%





16,730



16,230



3.1%





Other Energy Sales

76



77



(1.3%)





229



226



1.3%





Unbilled Sales

(1,047)



(677)



(54.7%)





(693)



(492)



(40.9%)





Total Regular Electric Sales

21,556



20,701



4.1%



(0.3%)



60,785



59,586



2.0%



0.4%




















Special Sales

2,181



2,120



2.9%





6,726



7,764



(13.4%)






















Total Consolidated Electric Sales - Duke Energy Carolinas

23,737



22,821



4.0%





67,511



67,350



0.2%






































Average Number of Customers

















Residential

2,120,091



2,091,669



1.4%





2,113,735



2,085,703



1.3%





General Service

346,039



342,340



1.1%





344,699



341,246



1.0%





Industrial

6,414



6,515



(1.6%)





6,444



6,524



(1.2%)





Other Energy Sales

15,095



14,862



1.6%





15,014



14,617



2.7%





Total Regular Sales

2,487,639



2,455,386



1.3%





2,479,892



2,448,090



1.3%






















Special Sales

24



26



(7.7%)





25



25



—%






















Total Average Number of Customers - Duke Energy Carolinas

2,487,663



2,455,412



1.3%





2,479,917



2,448,115



1.3%























































Heating and Cooling Degree Days

















Actual

















Heating Degree Days

5



12



(58.3%)





2,109



2,235



(5.6%)





Cooling Degree Days

1,085



884



22.7%





1,709



1,441



18.6%






















Variance from Normal

















Heating Degree Days

(51.6%)



20.0%



n/a





9.4%



16.0%



n/a





Cooling Degree Days

6.2%



(13.3%)



n/a





9.8%



(6.7%)



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

September 2015




















Three Months Ended September 30


Nine Months Ended September 30



2015


2014


%

Inc.(Dec.)


% Inc.(Dec.)

Weather

Normal (2)


2015


2014


%

Inc.(Dec.)


% Inc.(Dec.)

Weather

Normal (2)

GWH Sales (1)

















Residential

5,107



4,736



7.8%





14,547



14,275



1.9%





General Service

4,563



4,357



4.7%





12,000



11,767



2.0%





Industrial

2,788



2,819



(1.1%)





7,790



7,816



(0.3%)





Other Energy Sales

26



29



(10.3%)





81



88



(8.0%)





Unbilled Sales

(481)



(291)



(65.3%)





(352)



(318)



(10.7%)





Total Regular Electric Sales

12,003



11,650



3.0%



0.3%



34,066



33,628



1.3%



0.4%




















Special Sales

6,280



4,890



28.4%





15,934



13,766



15.7%






















Total Consolidated Electric Sales - Duke Energy Progress

18,283



16,540



10.5%





50,000



47,394



5.5%






































Average Number of Customers

















Residential

1,276,474



1,258,769



1.4%





1,272,450



1,254,632



1.4%





General Service

227,015



223,986



1.4%





225,721



222,980



1.2%





Industrial

4,204



4,266



(1.5%)





4,221



4,278



(1.3%)





Other Energy Sales

1,683



1,705



(1.3%)





1,687



1,729



(2.4%)





Total Regular Sales

1,509,376



1,488,726



1.4%





1,504,079



1,483,619



1.4%






















Special Sales

15



15



—%





15



15



—%






















Total Average Number of Customers - Duke Energy Progress

1,509,391



1,488,741



1.4%





1,504,094



1,483,634



1.4%























































Heating and Cooling Degree Days

















Actual

















Heating Degree Days

1



7



(85.7%)





2,004



2,034



(1.5%)





Cooling Degree Days

1,131



1,000



13.1%





1,779



1,629



9.2%






















Variance from Normal

















Heating Degree Days

(78.3%)



16.7%



n/a





13.3%



14.7%



n/a





Cooling Degree Days

2.7%



(9.3%)



n/a





5.8%



(2.9%)



n/a







































(1)

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





(2)

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







 

 


Duke Energy Florida

Quarterly Highlights

Supplemental Regulated Utilities Electric Information

September 2015




















Three Months Ended September 30


Nine Months Ended September 30



2015


2014


%

Inc.(Dec.)


% Inc.(Dec.)

Weather

Normal (2)


2015


2014


%

Inc.(Dec.)


% Inc.(Dec.)

Weather

Normal (2)

GWH Sales (1)

















Residential

6,152



6,207



(0.9%)





15,200



14,654



3.7%





General Service

4,309



4,320



(0.3%)





11,401



11,270



1.2%





Industrial

861



840



2.5%





2,442



2,444



(0.1%)





Other Energy Sales

6



6



—%





18



18



—%





Unbilled Sales

(226)



(270)



16.3%





567



461



23.0%





Total Regular Electric Sales

11,102



11,103



—%



1.4%



29,628



28,847



2.7%



1.1%




















Special Sales

411



447



(8.1%)





1,160



1,204



(3.7%)






















Total Electric Sales - Duke Energy Florida

11,513



11,550



(0.3%)





30,788



30,051



2.5%






































Average Number of Customers

















Residential

1,526,065



1,502,074



1.6%





1,521,345



1,497,535



1.6%





General Service

193,645



191,274



1.2%





193,161



190,897



1.2%





Industrial

2,249



2,259



(0.4%)





2,250



2,280



(1.3%)





Other Energy Sales

1,534



1,547



(0.8%)





1,537



1,553



(1.0%)





Total Regular Sales

1,723,493



1,697,154



1.6%





1,718,293



1,692,265



1.5%






















Special Sales

14



14



—%





14



15



(6.7%)






















Total Average Number of Customers - Duke Energy Florida

1,723,507



1,697,168



1.6%





1,718,307



1,692,280



1.5%























































Heating and Cooling Degree Days

















Actual

















Heating Degree Days





—%





373



418



(10.8%)





Cooling Degree Days

1,487



1,497



(0.7%)





2,977



2,702



10.2%






















Variance from Normal

















Heating Degree Days

—%



—%



n/a





(6.2%)



0.5%



n/a





Cooling Degree Days

(1.6%)



(0.7%)



n/a





8.8%



(1.3%)



n/a







































(1)

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





(2)

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







 

 


Duke Energy Ohio

Quarterly Highlights

Supplemental Regulated Utilities Electric Information

September 2015




















Three Months Ended September 30


Nine Months Ended September 30



2015


2014


%

Inc.(Dec.)


% Inc.(Dec.)

Weather

Normal (2)


2015


2014


%

Inc.(Dec.)


% Inc.(Dec.)

Weather

Normal (2)

GWH Sales (1)

















Residential

2,399



2,332



2.9%





6,891



6,924



(0.5%)





General Service

2,603



2,602



—%





7,281



7,273



0.1%





Industrial

1,580



1,571



0.6%





4,507



4,501



0.1%





Other Energy Sales

28



28



—%





82



84



(2.4%)





Unbilled Sales

(57)



(160)



64.4%





(8)



(242)



96.7%





Total Regular Electric Sales

6,553



6,373



2.8%



(0.5%)



18,753



18,540



1.1%



—%




















Special Sales

145



92



57.6%





945



228



314.5%






















Total Electric Sales - Duke Energy Ohio

6,698



6,465



3.6%





19,698



18,768



5.0%






































Average Number of Customers

















Residential

744,927



739,300



0.8%





746,183



741,316



0.7%





General Service

87,234



86,456



0.9%





87,203



86,402



0.9%





Industrial

2,525



2,526



—%





2,531



2,522



0.4%





Other Energy Sales

3,223



3,184



1.2%





3,215



3,175



1.3%





Total Regular Sales

837,909



831,466



0.8%





839,132



833,415



0.7%






















Special Sales

1



1



—%





1



1



—%






















Total Average Number of Customers - Duke Energy Ohio

837,910



831,467



0.8%





839,133



833,416



0.7%























































Heating and Cooling Degree Days

















Actual

















Heating Degree Days

21



58



(63.8%)





3,331



3,528



(5.6%)





Cooling Degree Days

703



629



11.8%





1,094



1,011



8.2%


























Variance from Normal





















Heating Degree Days

(50.0%)



26.1%



n/a





11.3%



16.9%



n/a





Cooling Degree Days

(13.6%)



(22.3%)



n/a





(7.5%)



(12.8%)



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).







 

 


Duke Energy Ohio

Quarterly Highlights

Supplemental Regulated Utilities Gas Information

September 2015




















Three Months Ended September 30


Nine Months Ended September 30



2015


2014


%

Inc.(Dec.)


% Inc.(Dec.)

Weather

Normal (2)


2015


2014


%

Inc.(Dec.)


% Inc.(Dec.)

Weather

Normal (2)

MCF Sales (1)

















Residential

1,755,562



1,819,907



(3.5%)





28,986,782



31,354,403



(7.6%)





General Service

1,838,773



1,711,398



7.4%





18,463,853



19,335,821



(4.5%)





Industrial

1,192,994



1,104,399



8.0%





5,604,282



5,425,634



3.3%





Other Energy Sales

4,439,138



4,197,435



5.8%





15,194,003



15,616,728



(2.7%)





Unbilled Sales

24,000



(125,000)



119.2%





(3,221,000)



(5,027,000)



35.9%





Total Gas Sales - Duke Energy Ohio

9,250,467



8,708,139



6.2%



6.9%



65,027,920



66,705,586



(2.5%)



(0.4%)




































Average Number of Customers

















Residential

471,005



468,840



0.5%





474,704



472,600



0.4%





General Service

41,294



41,505



(0.5%)





43,212



43,379



(0.4%)





Industrial

1,544



1,558



(0.9%)





1,618



1,627



(0.6%)





Other Energy Sales

142



149



(4.7%)





143



154



(7.1%)





Total Average Number of Gas Customers - Duke Energy Ohio

513,985



512,052



0.4%





519,677



517,760



0.4%























































Heating and Cooling Degree Days

















Actual

















Heating Degree Days

21



58



(63.8%)





3,331



3,528



(5.6%)





Cooling Degree Days

703



629



11.8%





1,094



1,011



8.2%






















Variance from Normal

















Heating Degree Days

(50.0%)



26.1%



n/a





11.3%



16.9%



n/a





Cooling Degree Days

(13.6%)



(22.3%)



n/a





(7.5%)



(12.8%)



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).







 

 


Duke Energy Indiana

Quarterly Highlights

Supplemental Regulated Utilities Electric Information

September 2015




















Three Months Ended September 30


Nine Months Ended September 30



2015


2014


%

Inc.(Dec.)


% Inc.(Dec.)

Weather

Normal (2)


2015


2014


%

Inc.(Dec.)


% Inc.(Dec.)

Weather

Normal (2)

GWH Sales (1)

















Residential

2,305



2,184



5.5%





7,112



7,274



(2.2%)





General Service

2,299



2,264



1.5%





6,368



6,371



—%





Industrial

2,731



2,758



(1.0%)





7,901



7,982



(1.0%)





Other Energy Sales

13



12



8.3%





40



39



2.6%





Unbilled Sales

3



(102)



102.9%





10



(329)



103.0%





Total Regular Electric Sales

7,351



7,116



3.3%



1.2%



21,431



21,337



0.4%



(0.2%)




















Special Sales

1,433



1,108



29.3%





3,786



4,216



(10.2%)






















Total Electric Sales - Duke Energy Indiana

8,784



8,224



6.8%





25,217



25,553



(1.3%)






































Average Number of Customers

















Residential

697,535



689,562



1.2%





698,260



691,815



0.9%





General Service

100,726



100,428



0.3%





100,566



100,314



0.3%





Industrial

2,713



2,694



0.7%





2,704



2,711



(0.3%)





Other Energy Sales

1,578



1,512



4.4%





1,571



1,505



4.4%





Total Regular Sales

802,552



794,196



1.1%





803,101



796,345



0.8%






















Special Sales

10



6



66.7%





8



6



33.3%






















Total Average Number of Customers - Duke Energy Indiana

802,562



794,202



1.1%





803,109



796,351



0.8%























































Heating and Cooling Degree Days

















Actual

















Heating Degree Days

26



88



(70.5%)





3,715



4,130



(10.0%)





Cooling Degree Days

706



507



39.3%





1,070



825



29.7%






















Variance from Normal

















Heating Degree Days

(45.7%)



66.0%



n/a





15.9%



28.1%



n/a





Cooling Degree Days

(12.6%)



36.6%



n/a





(9.5%)



(28.9%)



n/a







































(1)

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





(2)

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







DUKE ENERGY CORPORATION

ADJUSTED TO REPORTED EARNINGS RECONCILIATION

Three Months Ended September 30, 2015

(Dollars in millions, except per-share amounts)

 




Special Items










Adjusted
Earnings


Costs to
Achieve,
Progress
Merger


Edwardsport
Settlement


Ash
Basin
Settlement


Economic
Hedges
(Mark-to-
Market) *


Discontinued
Operations


Total
Adjustments


Reported
Earnings

SEGMENT INCOME


































Regulated Utilities


$

965



$



$

(56)


B

$

(4)


C

$



$



$

(60)



$

905



















International Energy


69















69



















Commercial Portfolio


(4)









1


D



1



(3)



















Total Reportable Segment Income


1,030





(56)



(4)



1





(59)



971



















Other


(19)



(15)


A









(15)



(34)



















Total Reportable Segment Income and Other Net Expense


1,011



(15)



(56)



(4)



1





(74)



937



















Discontinued Operations












(5)


E

(5)



(5)



















Net Income (Loss) Attributable to Duke Energy Corporation


$

1,011



$

(15)



$

(56)



$

(4)



$

1



$

(5)



$

(79)



$

932



















EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, BASIC


$

1.47



$

(0.02)



$

(0.08)



$

(0.01)



$



$

(0.01)



$

(0.12)



$

1.35



















EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, DILUTED


$

1.47



$

(0.02)



$

(0.08)



$

(0.01)



$



$

(0.01)



$

(0.12)



$

1.35




















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 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.


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 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

ADJUSTED TO REPORTED EARNINGS RECONCILIATION

Nine Months Ended September 30, 2015

(Dollars in millions, except per-share amounts)

 

 





Special Items











Adjusted
Earnings


Costs to
Achieve,
Progress
Merger


Edwardsport
Settlement


Midwest
Generation
Operations


Ash
Basin
Settlement


Economic
Hedges
(Mark-to-
Market) *


Discontinued
Operations


Total
Adjustments


Reported
Earnings

SEGMENT INCOME






































Regulated Utilities


$

2,371



$



$

(56)


B

$



$

(4)


D

$



$



$

(60)



$

2,311





















International Energy


157

















157





















Commercial Portfolio


99







(94)


C



1


E

(41)


F

(134)



(35)





















Total Reportable Segment Income


2,627





(56)



(94)



(4)



1



(41)



(194)



2,433





















Other


(77)



(42)


A











(42)



(119)





















Intercompany Eliminations














(4)


G

(4)



(4)





















Total Reportable Segment Income and Other Net Expense


2,550



(42)



(56)



(94)



(4)



1



(45)



(240)



2,310





















Discontinued Operations








94


C





(65)


H

29



29





















Net Income Attributable to Duke Energy Corporation


$

2,550



$

(42)



$

(56)



$



$

(4)



$

1



$

(110)



$

(211)



$

2,339





















EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, BASIC


$

3.66



$

(0.05)



$

(0.08)



$



$

(0.01)



$



$

(0.16)



$

(0.30)



$

3.36





















EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, DILUTED


$

3.66



$

(0.05)



$

(0.08)



$



$

(0.01)



$



$

(0.16)



$

(0.30)



$

3.36






















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 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.


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 TO REPORTED EARNINGS RECONCILIATION

Three Months Ended September 30, 2014

(Dollars in millions, except per-share amounts)

 





Special Items









Adjusted
Earnings


Costs to
Achieve,
Progress
Merger


Midwest
Generation
Operations


Asset
Sales


Discontinued
Operations


Total
Adjustments


Reported
Earnings

SEGMENT INCOME






























Regulated Utilities


$

920



$



$



$



$



$



$

920

















International Energy


80













80

















Commercial Portfolio


51





(68)


B





(68)



(17)

















Total Reportable Segment Income


1,051





(68)







(68)



983

















Other


(58)



(35)


A

(8)


B

9


D



(34)



(92)

















Intercompany Eliminations










(3)


E

(3)



(3)

















Total Reportable Segment Income and Other Net Expense


993



(35)



(76)



9



(3)



(105)



888

















Discontinued Operations






76


B



310


C

386



386

















Net Income Attributable to Duke Energy Corporation


$

993



$

(35)



$



$

9



$

307



$

281



$

1,274

















EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, BASIC


$

1.40



$

(0.05)



$



$

0.01



$

0.44



$

0.40



$

1.80

















EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, DILUTED


$

1.40



$

(0.05)



$



$

0.01



$

0.44



$

0.40



$

1.80


















A - Net of $21 million tax benefit. $4 million recorded as a decrease in Operating Revenues, $51 million recorded in Operating Expenses and $1 million recorded within Interest Expense on the Condensed Consolidated Statements of Operations.


B - Midwest Generation Operations reclassifies the operating results of the nonregulated Midwest generation business that had been classified as discontinued operations after adjustment for special items and economic hedges from discontinued operations to the Commercial Power segment (net of $32 million tax benefit) and Other segment (net of $10 million tax expense).


C - Recorded in Income (loss) From Discontinued Operations, net of tax on the Condensed Consolidated Statements of Operations. Includes the adjustment to the impairment of the nonregulated Midwest generation business and the mark-to-market of economic hedges of the nonregulated Midwest generation business.


D - Net of $5 million tax expense. Recorded in Other Income and Expenses on the Condensed Consolidated Statements of Operations.


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

 

Weighted Average Shares (reported and adjusted) - in millions

          Basic


707

          Diluted 


707

 

DUKE ENERGY CORPORATION

ADJUSTED TO REPORTED EARNINGS RECONCILIATION

Nine Months Ended September 30, 2014

(Dollars in millions, except per-share amounts)

 





Special Items











Adjusted
Earnings


Costs to
Achieve,
Progress
Merger


Asset
Impairment


Midwest
Generation
Operations


Asset
Sales


Economic
Hedges
(Mark-to
Market) *


Discontinued
Operations


Total
Adjustments


Reported
Earnings

SEGMENT INCOME






































Regulated Utilities


$

2,346



$



$



$



$



$



$



$



$

2,346





















International Energy


356

















356





















Commercial Portfolio


77





(59)


F

(82)


C



(6)


B



(147)



(70)





















Total Reportable Segment Income


2,779





(59)



(82)





(6)





(147)



2,632





















Other


(171)



(107)


A





9


E





(98)



(269)





















Intercompany Eliminations














(7)


G

(7)



(7)





















Total Reportable Segment Income and Other Net Expense


2,608



(107)



(59)



(82)



9



(6)



(7)



(252)



2,356





















Discontinued Operations








82


C





(652)


D

(570)



(570)





















Net Income Attributable to Duke Energy Corporation


$

2,608



$

(107)



$

(59)



$



$

9



$

(6)



$

(659)



$

(822)



$

1,786





















EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, BASIC


$

3.69



$

(0.15)



$

(0.08)



$



$

0.01



$

(0.01)



$

(0.94)



$

(1.17)



$

2.52





















EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, DILUTED


$

3.69



$

(0.15)



$

(0.08)



$



$

0.01



$

(0.01)



$

(0.94)



$

(1.17)



$

2.52






















A - Net of $65 million tax benefit. $5 million recorded as a decrease in Operating Revenues, $165 million recorded within Operating Expenses and $2 million recorded within Interest Expense on the Condensed Consolidated Statements of Operations.


B - Net of $3 million tax benefit. Recorded within Operating Revenues on the Condensed Consolidated Statements of Operations.


C - Midwest Generation Operations reclassifies the operating results of the nonregulated Midwest generation business that had been classified as discontinued operations after adjustment for special items and economic hedges from discontinued operations to the Commercial Power segment (net of $51 million tax benefit).


D - Recorded in Income (loss) From Discontinued Operations, net of tax on the Condensed 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 - Net of $5 million tax expense. Recorded in Other Income and Expenses on the Condensed Consolidated Statements of Operations.


F - Net of $35 million tax benefit. Recorded in impairment charges on the Condensed Consolidated Statements of Operations.


G - Reverses the impact on eliminations of classifying the nonregulated Midwest generation business as discontinued 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 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












Adjusted Earnings, Pre-Tax Income*


$

1,480





$

3,752





Midwest Generation Operations






(147)





Edwardsport Settlement


(90)





(90)





Costs to Achieve, Progress Energy Merger


(24)





(67)





Ash Basin Settlement


(7)





(7)





Economic Hedges (Mark-to-Market)


1





1





Intercompany Eliminations






(4)





Reported Income From Continuing Operations Before Income Taxes


$

1,360





$

3,438



































Adjusted Tax Expense*


$

466



31%

**

$

1,192



32%

**

Tax Adjustment Related to Midwest Generation Sale






41





Midwest Generation Operations






(53)





Edwardsport Settlement


(34)





(34)





Costs to Achieve, Progress Energy Merger


(9)





(25)





Ash Basin Settlement


(3)





(3)





Intercompany Eliminations










Reported Income Tax Expense From Continuing Operations


$

420



31%


$

1,118



33%












*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 Nine Months Ended September 30, 2014

(Dollars in Millions)

 



Three Months Ended
 September 30, 2014


Nine Months Ended
 September 30, 2014




Balance


Effective Tax Rate


Balance


Effective Tax Rate












Adjusted Earnings, Pre-Tax Income*


$

1,491





$

3,842





Costs to Achieve, Progress Energy Merger


(56)





(172)





Midwest Generation Operations


(98)





(133)





Asset Impairment






(94)





Economic Hedges (Mark-to-Market)






(9)





Asset Sales


14





14





Reported Income From Continuing Operations Before Income Taxes


$

1,351





$

3,448



































Adjusted Tax Expense*


$

498



34%

**

$

1,230



32%

**

Costs to Achieve, Progress Energy Merger


(21)





(65)





Midwest Generation Operations


(22)





(51)





Asset Impairment






(35)





Economic Hedges (Mark-to-Market)






(3)