Duke Energy reports third quarter earnings; on track to achieve 2014 guidance

CHARLOTTE, N.C., Nov. 5, 2014 /PRNewswire/ --

  • Third quarter 2014 adjusted diluted earnings per share (EPS) were $1.40, compared to $1.46 for the third quarter 2013
  • Reported diluted EPS for the third quarter 2014 was $1.80, compared to $1.42 for the third quarter 2013
    • Reported results for third quarter 2014 include a pre-tax reversal of an impairment charge originally taken in the first quarter based on the estimated fair value of the Midwest generation business. The reversal of $477 million, or $0.43 per share, is the result of the fair value exceeding the previous estimate
  • Company is on track to achieve its revised 2014 adjusted earnings guidance range of $4.50 to $4.65 per share

Duke Energy today announced third quarter 2014 adjusted diluted EPS of $1.40, compared to $1.46 for third quarter 2013, and reported diluted EPS of $1.80, compared to $1.42 for the same period last year.

New Duke Energy logo. (PRNewsFoto/Duke Energy)

Quarterly adjusted EPS for the Regulated Utilities was relatively flat, while stronger results in Commercial Power were substantially offset by lower earnings at International Energy. On a consolidated basis, the company experienced a higher effective tax rate for the quarter compared to last year.

Reported results for the quarter were affected by a $477 million, or $0.43 per share, pre-tax reversal of a previously recognized impairment charge related to the sale of the company's Midwest generation business. This impairment reversal was recorded in discontinued operations and has been excluded from the company's adjusted diluted EPS results.

For the second summer in a row, the company experienced below normal weather. Cooling degree days were around 10 percent below normal in the Carolinas and almost 30 percent lower in the Midwest.

Based on results through the third quarter, the company remains on track to achieve its revised 2014 adjusted earnings guidance range of $4.50 to $4.65 per share.

"Although the weather this summer was milder than usual, we remain on track to meet our financial objectives for 2014 and beyond," said President and CEO Lynn Good.

"Our generation assets performed well during the third quarter, led by the nuclear fleet's record 98 percent capacity factor," Good added.

"We also achieved several milestones in our growth strategy as we prepare to serve the evolving needs of our customers into the future," she said. "We're investing in solar projects and new natural gas generation; planning a major grid modernization in Indiana; and proposing to invest in the Atlantic Coast Pipeline that will bring diverse natural gas supplies to eastern North Carolina.

"Additionally, we continue to move forward with the sale of our Midwest generation business to Dynegy."

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 are provided on pages 11 and 12.

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 2014 adjusted segment income of $920 million, which was essentially flat compared to $923 million in the third quarter 2013.

Favorable drivers included:

  • Higher revenues from increased pricing and riders (+$0.07 per share) primarily related to the implementation of revised customer rates
  • Although weather for the quarter was below normal, summer temperatures were still more favorable than last year (+$0.04 per share)
  • Favorable change in effective tax rate (+$0.04 per share)

These favorable drivers were offset by:

  • Higher depreciation and amortization expense (-$0.06 per share) primarily resulting from additional plant in-service and the prior-year impact of cost of removal amortization in Florida
  • Higher interest expense (-$0.04 per share) primarily due to financing costs on projects now reflected in customer rates
  • Lower weather-normal retail customer volumes (-$0.03 per share) of -0.6 percent compared to an increase of 1.7 percent in the third quarter of 2013
  • Higher property and other non-income taxes (-$0.03 per share)

On a year-to-date basis, Regulated Utilities recognized adjusted segment income of $2,346 million, compared to $2,169 million in the comparable year-to-date period of 2013, an increase of $0.25 per share.

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

  • Higher revenues from increased pricing and riders (+$0.27 per share) primarily related to the implementation of revised customer rates
  • Favorable weather (+$0.19 per share) across Duke Energy's service territories
  • Favorable change in effective tax rate (+$0.08 per share) primarily due to a state tax settlement that resulted in a favorable adjustment to deferred taxes
  • Increased wholesale net margins (+$0.05 per share) primarily resulting from growth in contracted amounts and favorable weather
  • Higher weather-normal retail customer volumes (+$0.03 per share) of 0.7 percent compared to 2013 primarily driven by strong results in the first quarter (+2.6 percent)

These favorable drivers were partially offset by:

  • Higher depreciation and amortization expense (-$0.21 per share) due to additional plant in-service and the prior-year impact of cost-of-removal amortization primarily in Florida
  • Higher interest expense (-$0.10 per share) due to financing costs on projects now reflected in customer rates
  • Higher property and other non-income taxes (-$0.04 per share)
  • Lower Allowance for Funds Used During Construction (AFUDC) equity (-$0.03 per share) primarily due to the completion of certain major capital projects

International Energy

International Energy recognized third quarter 2014 adjusted segment income of $80 million, compared to $116 million in the third quarter 2013, a decrease of $0.05 per share.

International Energy's decreased quarterly adjusted earnings were primarily driven by unfavorable results in Latin America (-$0.05 per share) primarily due to lower volumes and higher purchased power costs resulting from poor hydrology in Brazil as well as an unplanned plant outage in Chile.

On a year-to-date basis, International Energy recognized adjusted segment income of $356 million, compared to $300 million in the comparable year-to-date period of 2013, an increase of $0.08 per share.

International Energy's improved year-to-date adjusted earnings were driven by:

  • Stronger results in Latin America (+$0.08 per share) primarily due to a tax benefit resulting from the reorganization of the company's operations in Chile
  • Higher results at National Methanol Company (+$0.01 per share) due to a prior-year extended planned maintenance outage

These favorable drivers were partially offset by unfavorable foreign currency exchange rates (-$0.02 per share)

Commercial Power

Commercial Power recognized third quarter 2014 adjusted segment income of $51 million, compared to $15 million in the third quarter 2013, an increase of $0.05 per share.

Commercial Power's improved quarterly adjusted earnings were primarily driven by higher results from the Midwest coal and gas generation fleets (+$0.05 per share) primarily due to higher PJM capacity prices.

On a year-to-date basis, Commercial Power recognized adjusted segment income of $77 million, compared to $18 million in the comparable year-to-date period of 2013, an increase of $0.08 per share.

Commercial Power's improved year-to-date adjusted earnings were primarily driven by:

  • Higher results from the Midwest coal and gas generation fleets (+$0.08 per share) primarily due to higher PJM capacity prices
  • Increased results from the renewables business (+$0.04 per share) due to higher production of the wind and solar portfolio

These results were partially offset by lower earnings from Duke Energy Retail (-$0.03 per share).

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 income tax levelization adjustments.

Other recognized a third quarter 2014 adjusted net expense of $58 million, compared to $21 million in the third quarter 2013, a decrease of $0.05 per share primarily driven by a prior-year state deferred tax adjustment.

On a year-to-date basis, Other recognized adjusted net expense of $171 million, compared to $114 million in the comparable year-to-date period of 2013, a decrease of $0.08 per share primarily driven by a prior-year state deferred tax adjustment.

On a consolidated basis, the company experienced a third-quarter 2014 adjusted effective tax rate of approximately 33.5 percent, compared to 32 percent in the prior year. On a year-to-date basis, the company experienced an adjusted effective tax rate of approximately 32 percent, compared to 33.5 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.

Third quarter 2014 accounting matters

Coal ash

Duke Energy recognized a liability of approximately $3.4 billion in asset retirement obligations (ARO) on Sept. 30, 2014, primarily as a result of the Coal Ash Management Act of 2014, which requires closure of ash basins in North Carolina. The ARO is calculated using a probability weighted net present value model for a number of different closure scenarios. This estimate will be refined as ash basin closure plans and related strategies are finalized and approved.

The ARO relating to operating plants has been included in Property, Plant and Equipment and the ARO relating to retired plants has been included in Regulatory assets on the Condensed Consolidated Balance Sheets, as of Sept. 30, 2014.

Midwest generation sale

Following the announcement of the sale of the nonregulated Midwest generation business to Dynegy in the third quarter 2014, this business was reclassified as discontinued operations for accounting purposes. Despite this accounting designation, financial results from this business will remain in Duke Energy's adjusted earnings, adjusted diluted EPS and adjusted segment income during 2014.

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 888-471-3820 in the United States or 719-457-2619 outside the United States. The confirmation code is 8226680. Please call in 10 to 15 minutes prior to the scheduled start time.

A replay of the conference call will be available until 1 p.m. ET, Nov. 15, 2014, by calling 888-203-1112 in the United States or 719-457-0820 outside the United States and using the code 8226680. 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 third quarter 2014 and third quarter 2013 include:

(In millions, except per-share amounts)

After-Tax
Amount

3Q2014
EPS
Impact

3Q2013
EPS
Impact

Third Quarter 2014




·         Costs to achieve, Progress Energy merger

$(35)

$(0.05)


·         Asset sales

$9

$0.01


·         Discontinued operations (1)(2)

$307

$0.44


Third Quarter 2013




·         Costs to achieve, Progress Energy merger

$(54)


$(0.08)

·         Discontinued operations (1)(3)

$25


$0.04

Total diluted EPS impact


$0.40

$(0.04)

(1) Reported discontinued operations includes the 2014 reversal of 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, net of the Midwest generation operation results classified as discontinued operations of $0.11 per diluted share, which are treated as a special item and reflected in adjusted diluted EPS.

(3) Represents reported discontinued operations of $0.09 per diluted share, net of elimination entries of  $0.01 per diluted share, and the Midwest generation operation results classified as discontinued operations of $0.04 per diluted share, which are treated as a special item and reflected in adjusted diluted EPS.

Reconciliation of reported to adjusted diluted EPS for the quarters:


3Q2014

EPS

3Q2013

EPS

Diluted EPS, as reported

$1.80

$1.42

Adjustments to reported EPS:



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

$(0.40)

$0.04

Diluted EPS, adjusted

$1.40

$1.46

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 noncontrolling interests, adjusted for dollar and per share impact of mark-to-market impacts of economic hedges in the Commercial Power segment and special items including the operating results of the nonregulated 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. As result of the agreement in August of 2014 to sell the Disposal Group to Dynegy, the operating results of the Disposal Group were classified as discontinued operations in the current period and retrospectively, including a portion of the mark-to-market adjustments associated with derivative contracts. Management believes that including the operating results of the Disposal Group classified as discontinued operations better reflects its financial performance and therefore has included these results in adjusted earnings and adjusted diluted EPS. Derivative contracts are used in Duke Energy's hedging of a portion of the economic value of its generation assets in the Commercial Power 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. However, due to the divestiture of the Disposal Group as mentioned above, certain derivative positions have tenors beyond the planned disposal date of these assets. As such, management excluded any settlement of these derivative positions from adjusted diluted EPS as these realized gains and losses more closely relate to the disposal of these assets. 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 Power 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 noncontrolling interests. Segment income, as discussed below, includes intercompany revenues and expenses that are eliminated in the Condensed Consolidated Financial Statements. Management also uses adjusted segment income as a measure of historical and anticipated future segment performance. Adjusted segment income is a non-GAAP financial measure, as it is based upon segment income adjusted for the mark-to-market impacts of economic hedges in the Commercial Power 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 Power 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. The earnings guidance range assumptions for 2014 include a full-year of earnings contributions from the nonregulated Midwest generation business, which management has entered into an agreement to sell. Irrespective of discontinued operations accounting treatment, operating results from the nonregulated Midwest generation business will be included in Duke Energy's adjusted earnings, adjusted diluted EPS, and adjusted segment income during 2014.

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 Power 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 more than $115 billion in total assets. Its regulated utility operations serve approximately 7.2 million electric customers located in six states in the Southeast and Midwest. Its Commercial Power 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," "outlook," "guidance," 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 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 is currently identified and all costs may not be fully recoverable through the regulatory process; the risk that the credit ratings of the combined company or its subsidiaries may be different from what the companies expect; 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 effort 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, cyber security 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; 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 retained earnings of foreign subsidiaries or repatriate such earnings on a tax-free 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
Office: 704.382.2355 | 24-Hour: 800.559.3853

Analysts: Bill Currens
Office: 704.382.1603

 

DUKE ENERGY CORPORATION


EARNINGS VARIANCES


September 2014 QTD vs. Prior Year




















($ per share)


Regulated
Utilities


International Energy


Commercial Power


Other


Consolidated




















2013 QTD Reported Earnings Per Share, Diluted


$

1.31


$

0.16


$

(0.04)


$

(0.09)


$

1.42


Costs to Achieve, Progress Merger



-



-



-



0.08



0.08


Midwest Generation Operations (offset in Discontinued Operations)  



-



-



0.06



(0.02)



0.04


Discontinued Operations















(0.08)


2013 QTD Adjusted Earnings Per Share, Diluted


$

1.31


$

0.16


$

0.02


$

(0.03)


$

1.46




















Weather



0.04



-



-



-



0.04




















Pricing and Riders (a)



0.07



-



-



-



0.07




















Volume



(0.03)



-



-



-



(0.03)




















Latin America, including Foreign Exchange Rates (b)



-



(0.05)



-



-



(0.05)




















National Methanol Company



-



(0.01)



-



-



(0.01)




















Midwest Generation (c)



-



-



0.05



-



0.05




















Duke Energy Retail 



-



-



(0.01)



-



(0.01)




















Duke Energy Renewables



-



-



0.01



-



0.01




















Interest Expense (d)



(0.04)



-



-



0.01



(0.03)




















Change in effective income tax rate



0.04



-



-



(0.07)



(0.03)




















Other (e)



(0.09)



0.01



-



0.01



(0.07)












-








2014 QTD Adjusted Earnings Per Share, Diluted


$

1.30


$

0.11


$

0.07


$

(0.08)


$

1.40


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 Reported Earnings Per Share, Diluted


$

1.30


$

0.11


$

(0.03)


$

(0.13)


$

1.80




















     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) Primarily due to the September 2013 implementation of revised base rates for Duke Energy Carolinas (+$0.06).




















(b) Primarily driven by unfavorable results in Brazil (-$0.04) due to lower volumes and higher purchased power costs and unfavorable results in Chile (-$0.02) due to an unplanned outage, partially offset by favorable results in Central America (+$0.01) due to higher sales prices and volumes.




















(c) Primarily due to higher PJM capacity revenues (+$0.05) and lower depreciation and amortization due to ceasing depreciation on assets held for sale in the second quarter of 2014 (+$0.04), partially offset by the impairment of ongoing capital maintenance investments that are not expected to change the estimated fair value of the generation business (-$0.01) and lower coal generation margins (-$0.01).




















(d) Amount for Regulated Utilities is primarily due to the discontinuation of booking a post in-service debt return on projects that are now reflected in customer rates.




















(e) Amount for Regulated Utilities includes an increase in depreciation and amortization expense (-$0.06) due to higher depreciable base and lower adjustments to the cost of removal reserve, and higher non-income taxes (-$0.03), partially offset by higher wholesale net margins, including new contracts (+$0.01).


 

DUKE ENERGY CORPORATION


EARNINGS VARIANCES


September 2014 YTD vs. Prior Year




















($ per share) 


Regulated
Utilities


International Energy


Commercial Power


Other


Consolidated




















2013 YTD Reported Earnings Per Share, Diluted 


$

2.73


$

0.42


$

(0.07)


$

(0.39)


$

2.79


Crystal River Unit 3 Impairment 



0.26



-



-



-



0.26


Nuclear Development Charges 



0.08



-



-



-



0.08


Costs to Achieve, Progress Merger



-



-



-



0.20



0.20


Litigation Reserve



-



-



-



0.04



0.04


Midwest Generation Operations (offset in Discontinued Operations)   



-



-



0.10



(0.01)



0.09


Discontinued Operations















(0.10)




















2013 YTD Adjusted Earnings Per Share, Diluted


$

3.07


$

0.42


$

0.03


$

(0.16)


$

3.36




















Weather



0.19



-



-



-



0.19




















Pricing and Riders (a)  



0.27



-



-



-



0.27




















Volumes



0.03



-



-



-



0.03




















Latin America, including Foreign Exchange Rates (b)  



-



0.06



-



-



0.06




















National Methanol Company



-



0.01



-



-



0.01




















Midwest Generation (c)  



-



-



0.08



-



0.08




















Duke Energy Retail 



-



-



(0.03)



-



(0.03)




















Duke Energy Renewables (d)  



-



-



0.04



-



0.04




















Interest Expense (e)  



(0.10)



-



(0.01)



0.01



(0.10)




















Change in effective income tax rate



0.08



-



(0.01)



(0.06)



0.01




















Other (f)(g)



(0.22)



0.01



0.01



(0.03)



(0.23)




















2014 YTD Adjusted Earnings Per Share, Diluted


$

3.32


$

0.50


$

0.11


$

(0.24)


$

3.69


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 Reported Earnings Per Share, Diluted


$

3.32


$

0.50


$

(0.10)


$

(0.38)


$

2.52




















     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) Primarily due to the September 2013 implementation of revised base rates for Duke Energy Carolinas (+$0.18), the June 2013 implementation of revised base rates for Duke Energy Progress (+$0.07), the January 1, 2014 implementation of revised base rates for Duke Energy Florida (+$0.03), and the May 2013 implementation of revised electric distribution rates for Duke Energy Ohio (+$0.02).  




















(b) Primarily driven by a tax benefit related to the reorganization of the company's operations in Chile (+$0.07), partially offset by unfavorable foreign exchange rates (-$0.02).  




















(c) Primarily due to lower depreciation and amortization due to ceasing depreciation on assets held for sale in the second quarter of 2014 (+$0.08), higher PJM capacity revenues (+$0.07), and higher gas generation margins (+$0.03), partially offset by lower coal generation margins (-$0.05) and the impairment of ongoing capital maintenance investments that are not expected to change the estimated fair value of the generation business (-$0.03).  




















(d) Primarily due to higher production of the wind and solar portfolio and lower operating costs. 




















(e) Amount for Regulated Utilities is primarily due to the discontinuation of booking a post in-service debt return on projects that are now reflected in customer rates. 




















(f) Amount for Regulated Utilities includes an increase in depreciation and amortization expense (-$0.21) due to higher depreciable base and the 2013 reduction in the cost of removal component of amortization expense for Duke Energy Florida, higher non-income taxes (-$0.04), and lower AFUDC-equity (-$0.03), partially offset by higher wholesale net margins, including new contracts (+$0.05).




















(g) Amount for Other includes unfavorable captive insurance loss experience (-$0.04).  


 

September 2014

QUARTERLY HIGHLIGHTS

(Unaudited)










Three Months Ended


Nine Months Ended


September 30,


September 30,









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

2014


2013


2014


2013

COMMON STOCK DATA








Income from continuing operations attributable to Duke Energy Corporation common shareholders








    Basic

$                 1.25


$                 1.33


$                 3.33


$                 2.67

    Diluted

$                 1.25


$                 1.33


$                 3.33


$                 2.67

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








    Basic

$                 0.55


$                 0.09


$                (0.81)


$                 0.12

    Diluted

$                 0.55


$                 0.09


$                (0.81)


$                 0.12

Net income attributable to Duke Energy Corporation common shareholders








    Basic

$                 1.80


$                 1.42


$                 2.52


$                 2.79

    Diluted

$                 1.80


$                 1.42


$                 2.52


$                 2.79

  Weighted-Average Shares Outstanding








    Basic

707


706


707


706

    Diluted

707


706


707


706









SEGMENT INCOME (LOSS) BY BUSINESS SEGMENT








Regulated Utilities(a)(b)

$                  920


$                  923


$               2,346


$               1,932

International Energy

80


116


356


300

Commercial Power(c)

(17)


(28)


(70)


(54)

Total Reportable Segment Income

983


1,011


2,632


2,178

Other Net Expense(d)(e)

(92)


(64)


(269)


(278)

Intercompany Eliminations

(3)


(5)


(7)


(10)

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

386


62


(570)


87

Net Income Attributable to Duke Energy Corporation

$               1,274


$               1,004


$               1,786


$               1,977









CAPITALIZATION








Total Common Equity





50%


50%

Total Debt





50%


50%









Total Debt





$             41,645


$             41,636

Book Value Per Share





$               58.61


$               58.41

Actual Shares Outstanding





707


706









CAPITAL AND INVESTMENT EXPENDITURES








Regulated Utilities

$               1,182


$               1,030


$               3,357


$               3,573

International Energy

15


18


40


44

Commercial Power

156


43


324


110

Other

29


52


115


180









Total Capital and Investment Expenditures

$               1,382


$               1,143


$               3,836


$               3,907

















(a) Includes an impairment charge of $180 million for the nine months ended September 30, 2013 related to the Crystal River Unit 3 Nuclear Station (net of tax of $115 million).

(b) Includes impairment charges of $57 million for the nine months ended September 30, 2013 related to nuclear development costs (net of tax of $30 million).

(c) Includes an impairment charge of $59 million for the nine months ended September 30, 2014, related to OVEC, its carrying value was reduced to zero (net of tax of $35 million).

(d) Includes costs to achieve 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).

(e) Includes costs to achieve Progress merger of $54 million for the three months ended September 30, 2013 (net of tax of $34 million), and $139 million for the nine months ended September 30, 2013 (net of tax of $86 million).

(f) Includes an adjustment to impairment charge related to the planned sale of the Midwest Generation assets of $300 million for the three months ended September 30, 2014 (net of tax of $177 million) and an impairment charge related to the planned sale of the Midwest Generation assets of $508 million for the nine months ended September 30, 2013 (net of tax of $302 million).

(g) Includes mark-to-market gains on economic hedges of $27 million for the three months ended September 30, 2014 (net of tax of $16 million), and mark-to-market losses on economic hedges of $125 million for the nine months ended September 30, 2014 (net of tax of $70 million).

 

September 2014

QUARTERLY HIGHLIGHTS

(Unaudited)










Three Months Ended


Nine Months Ended


September 30,


September 30,









(In millions, except where noted)

2014


2013


2014


2013

REGULATED UTILITIES








  Operating Revenues

$                       5,986


$                       5,786


$                     17,074


$                     15,766

  Operating Expenses(a)(b)

4,361


4,131


12,807


12,136

  Gains on Sales of Other Assets, net

1


-


2


6

  Operating Income

1,626


1,655


4,269


3,636

  Other Income and Expenses

75


57


206


166

  Interest Expense

271


235


816


713

  Income Before Income Taxes

1,430


1,477


3,659


3,089

  Income Tax Expense(c)(d)

510


554


1,313


1,157

  Segment Income

$                          920


$                          923


$                       2,346


$                       1,932









  Depreciation and Amortization

$                          710


$                          586


$                       2,075


$                       1,678









  Duke Energy Carolinas GWh sales

22,821


22,935


67,350


65,383

  Duke Energy Progress GWh sales

16,540


17,005


47,394


45,761

  Duke Energy Florida GWh sales

11,550


11,263


30,051


29,132

  Duke Energy Ohio GWh sales

6,465


6,589


18,768


18,567

  Duke Energy Indiana GWh sales

8,224


8,747


25,553


25,189

  Total GWh sales

65,600


66,539


189,116


184,032

  Net Proportional MW Capacity in Operation





49,471


49,425









INTERNATIONAL ENERGY








  Operating Revenues

$                          366


$                          370


$                         1,111


$                        1,168

  Operating Expenses

275


232


760


765

  Gains on Sales of Other Assets, net

2


-


7


-

  Operating Income

93


138


358


403

  Other Income and Expenses

43


48


152


95

  Interest Expense

25


22


71


60

  Income Before Income Taxes

111


164


439


438

  Income Tax Expense

29


44


74


128

  Less: Income Attributable to Noncontrolling Interests

2


4


9


10

  Segment Income

$                            80


$                           116


$                          356


$                          300









  Depreciation and Amortization

$                            23


$                             25


$                            74


$                            75









  Sales, GWh

4,292


5,062


13,814


14,744

  Proportional MW Capacity in Operation





4,358


4,600









COMMERCIAL POWER








  Operating Revenues

$                            50


$                            58


$                          195


$                          189

  Operating Expenses(e)

87


104


355


308

  Gains on Sales of Other Assets, net

-


-


-


1

  Operating Loss

(37)


(46)


(160)


(118)

  Other Income and Expenses

5


(2)


15


9

  Interest Expense

14


15


41


45

  Loss Before Income Taxes

(46)


(63)


(186)


(154)

  Income Tax Benefit(f)

(29)


(35)


(116)


(100)

  Segment Loss

$                           (17)


$                           (28)


$                          (70)


$                          (54)









  Depreciation and Amortization

$                            24


$                            28


$                            70


$                            83









  Actual Coal-fired Plant Production, GWh

192


516


867


1,266

  Actual Renewable Plant Production, GWh

1,054


941


4,112


3,761

  Actual Plant Production, GWh

1,246


1,457


4,979


5,027

  Net Proportional MW Capacity in Operation





1,698


2,060









OTHER 








  Operating Revenues

$                            25


$                            47


$                            79


$                           113

  Operating Expenses(g)(h)

84


128


269


360

  Gains (Losses) on Sales of Other Assets, net

1


(1)


2


(4)

  Operating Loss

(58)


(82)


(188)


(251)

  Other Income and Expenses

18


(14)


33


4

  Interest Expense

101


108


302


305

  Loss Before Income Taxes

(141)


(204)


(457)


(552)

  Income Tax Benefit(i)(j)

(50)


(140)


(190)


(276)

  Less: Income Attributable to Noncontrolling Interests

1


-


2


2

  Segment Net Expense

$                          (92)


$                          (64)


$                        (269)


$                        (278)









  Depreciation and Amortization

$                            31


$                            33


$                            86


$                          104

















(a) Includes a pre-tax impairment charge of $295 million for the nine months ended September 30, 2013, related to the Crystal River Unit 3 Nuclear Station.

(b) Includes pre-tax impairment charges of $87 million for the nine months ended September 30, 2013, related to nuclear development costs.

(c) Includes a tax benefit of $115 million for the nine months ended September 30, 2013, on the impairment related to the Crystal River Unit 3 Nuclear Station.

(d) Includes a tax benefit of $30 million for the nine months ended September 30, 2013, on the impairment related to nuclear development costs.

(e) Includes a pre-tax impairment charge of $94 for the nine months ended September 30, 2014, related to OVEC, its carrying value was reduced to zero.

(f) Includes a tax benefit of $35 million for the nine months ended September 30, 2014, on the impairment related to OVEC, its carrying value was reduced to zero.

(g) Includes costs to achieve Progress merger of $51 million recorded in Operating Expense for the three months ended September 30, 2014, and $165 million recorded in Operating Expense for the nine months ended September 30, 2014.

(h) Includes costs to achieve Progress merger of $113 million recorded in Operating Expense for the three months ended September 30, 2013, and $275 million recorded in Operating Expense for the nine months ended September 30, 2013.

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

(j) Includes tax benefit related to costs to achieve Progress merger of $34 million for the three months ended September 30, 2013, and $86 million for the nine months ended September 30, 2013.

 

DUKE ENERGY CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In millions, except per-share amounts)




















Three Months Ended


Nine Months Ended









September 30,


September 30,









2014

2013


2014

2013

Operating Revenues











Regulated electric






$         5,861

$         5,685


$       16,549

$       15,355

Nonregulated electric, natural gas, and other





449

449


1,403

1,415

Regulated natural gas






85

83


414

362

Total operating revenues






6,395

6,217


18,366

17,132

Operating Expenses











Fuel used in electric generation and purchased power - regulated



2,132

2,013


5,940

5,394

Fuel used in electric generation and purchased power - nonregulated 


148

130


410

435

Cost of natural gas and other






27

18


181

132

Operation, maintenance and other






1,409

1,402


4,254

4,211

Depreciation and amortization






788

672


2,305

1,940

Property and other taxes






275

319


936

972

Impairment charges






1

2


81

388

Total operating expenses






4,780

4,556


14,107

13,472

Gains (Losses) on Sales of Other Assets and Other, net




4

(1)


11

3

Operating Income







1,619

1,660


4,270

3,663

Other Income and Expenses











Equity in earnings of unconsolidated affiliates





28

32


97

91

Other income and expenses, net






109

55


293

182

Total other income and expenses





137

87


390

273

Interest Expense







405

378


1,212

1,125

Income From Continuing Operations Before Income Taxes



1,351

1,369


3,448

2,811

Income Tax Expense from Continuing Operations




460

423


1,081

909

Income From Continuing Operations






891

946


2,367

1,902

Income (Loss) From Discontinued Operations, net of tax




378

62


(578)

82

Net Income







1,269

1,008


1,789

1,984

Less: Net (Loss) Income Attributable to Noncontrolling Interests 



(5)

4


3

7

Net Income Attributable to Duke Energy Corporation




$         1,274

$         1,004


$         1,786

$         1,977









-

-


-

-














Earnings Per Share - Basic and Diluted










Income from continuing operations attributable to Duke Energy Corporation common shareholders






Basic 







$           1.25

$           1.33


$           3.33

$           2.67


Diluted







$           1.25

$           1.33


$           3.33

$           2.67

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





Basic 







$           0.55

$           0.09


$         (0.81)

$           0.12


Diluted







$           0.55

$           0.09


$         (0.81)

$           0.12

Net Income attributable to Duke Energy Corporation common shareholders








Basic 







$           1.80

$           1.42


$           2.52

$           2.79


Diluted







$           1.80

$           1.42


$           2.52

$           2.79

Weighted-average shares outstanding











Basic







707

706


707

706


Diluted







707

706


707

706

 

DUKE ENERGY CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In millions)















September 30,


December 31,




2014


2013

ASSETS





Current Assets





Cash and cash equivalents


$               1,931


$               1,501

Short-term investments


-


44

Receivables (net of allowance for doubtful accounts of 


854


1,286


$16 at September 30, 2014 and $30 at December 31, 2013)





Restricted receivables of variable interest entities (net of allowance for 


2,069


1,719


doubtful accounts of $52 at September 30, 2014 and $43 at December 31, 2013)





Inventory


3,200


3,250

Assets held for sale


335


-

Regulatory assets


1,232


895

Other


1,954


1,821


Total current assets


11,575


10,516

Investments and Other Assets





Investments in equity method unconsolidated affiliates


350


390

Nuclear decommissioning trust funds


5,374


5,132

Goodwill


16,331


16,340

Assets held for sale


2,718


107

Other


3,287


3,432


Total investments and other assets


28,060


25,401

Property, Plant and Equipment





Cost


104,140


103,115

Accumulated depreciation and amortization


(34,545)


(33,625)


Net property, plant and equipment


69,595


69,490

Regulatory Assets and Deferred Debits





Regulatory assets 


10,252


9,191

Other


174


181


Total regulatory assets and deferred debits


10,426


9,372

Total Assets


$            119,656


$            114,779

LIABILITIES AND EQUITY





Current Liabilities





Accounts payable


$               1,801


$               2,391

Notes payable and commercial paper


1,787


839

Taxes accrued


704


551

Interest accrued


476


440

Current maturities of long-term debt


1,156


2,104

Liabilities associated with assets held for sale


284


7

Regulatory liabilities


175


316

Other


1,868


1,996


Total current liabilities


8,251


8,644

Long-term Debt


38,702


38,152

Deferred Credits and Other Liabilities





Deferred income taxes


12,989


12,097

Investment tax credits


431


442

Accrued pension and other post-retirement benefit costs


1,231


1,322

Liabilities associated with assets held for sale


57


66

Asset retirement obligations


8,499


4,950

Regulatory liabilities


6,220


5,949

Other


1,823


1,749


Total deferred credits and other liabilities


31,250


26,575

Commitments and Contingencies





Equity





Common stock, $0.001 par value, 2 billion shares authorized; 707 million 


1


1


and 706 million shares outstanding at September 30, 2014 and 






December 31, 2013, respectively





Additional paid-in capital


39,388


39,365

Retained earnings


2,479


2,363

Accumulated other comprehensive loss


(456)


(399)


Total Duke Energy Corporation stockholders' equity


41,412


41,330

Noncontrolling interests


41


78


Total equity


41,453


41,408

Total Liabilities and Equity


$            119,656


$            114,779

 

DUKE ENERGY CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In millions)







Nine Months Ended September 30,







2014


2013










CASH FLOWS FROM OPERATING ACTIVITIES






Net Income




$               1,789


$               1,984


Adjustments to reconcile net income to net cash provided by







operating activities:


3,378


3,006





Net cash provided by operating activities


5,167


4,990










CASH FLOWS FROM INVESTING ACTIVITIES









Net cash used in investing activities


(3,734)


(3,566)










CASH FLOWS FROM FINANCING ACTIVITIES









Net cash used in financing activities


(1,003)


(682)











Net increase in cash and cash equivalents


430


742


Cash and cash equivalents at beginning of period


1,501


1,424


Cash and cash equivalents at end of period


$               1,931


$               2,166

 

Regulated Utilities

Quarterly Highlights

Supplemental Regulated Utilities Electric Information

  September 2014






















Three Months Ended


Nine Months Ended




  September 30


  September 30








%


% Inc.(Dec.)






%


% Inc.(Dec.)










Weather 








Weather 




2014


2013


Inc. (Dec.)


Normal (2)


2014


2013


Inc. (Dec.)


Normal (2)



















GWH Sales (1)


















Residential


22,960


22,406


2.5%


(1.2%)


65,064


61,997


4.9%


0.6%


General Service


21,494


21,187


1.4%


(0.4%)


58,366


57,163


2.1%


1.1%


Industrial


13,837


13,719


0.9%


0.3%


38,973


38,466


1.3%


0.5%


Other Energy Sales


152


150


1.3%




455


451


0.9%




Unbilled Sales


(1,500)


(650)


(130.8%)


N/A


(920)


(308)


(198.7%)


N/A


    Total Retail Sales


56,943


56,812


0.2%


(0.6%)


161,938


157,769


2.6%


0.7%




















Special Sales


8,657


9,727


(11.0%)




27,178


26,263


3.5%






















    Total Consolidated Electric Sales -
Regulated Utilities


65,600


66,539


(1.4%)




189,116


184,032


2.8%







































Average Number of Customers (Electric)


















Residential


6,281,374


6,212,393


1.1%




6,271,001


6,206,254


1.0%




General Service


944,484


938,214


0.7%




941,839


935,372


0.7%




Industrial


18,260


18,533


(1.5%)




18,315


18,619


(1.6%)




Other Energy Sales


22,810


22,142


3.0%




22,579


22,148


1.9%




  Total Regular Sales


7,266,928


7,191,282


1.1%




7,253,734


7,182,393


1.0%






















Special Sales


62


61


1.6%




62


62


0.0%






















    Total Average Number of Customers -
Regulated Utilities


7,266,990


7,191,343


1.1%




7,253,796


7,182,455


1.0%

























































Heating and Cooling Degree Days (3)


















Carolinas - Actual


















Heating Degree Days


10


7


42.9%




2,135


2,014


6.0%




Cooling Degree Days


942


889


6.1%




1,535


1,355


13.3%






















Variance from Normal


















Heating Degree Days


25.0%


0.0%


n/a




15.4%


6.7%


n/a




Cooling Degree Days


(11.2%)


(16.7%)


n/a




(4.7%)


(16.2%)


n/a






















Midwest - Actual


















Heating Degree Days 


73


37


97.3%




3,829


3,333


14.9%




Cooling Degree Days


568


714


(20.4%)




918


1,052


(12.7%)






















Variance from Normal


















Heating Degree Days 


46.0%


(15.9%)


n/a




22.7%


5.0%


n/a




Cooling Degree Days


(29.4%)


(11.3%)


n/a




(20.9%)


(8.4%)


n/a








































Florida - Actual


















Heating Degree Days


-


-


0.0%




418


338


23.7%




Cooling Degree Days


1,497


1,447


3.5%




2,702


2,667


1.3%






















Variance from Normal


















Heating Degree Days


0.0%


0.0%


n/a




0.5%


(21.7%)


n/a




Cooling Degree Days


(0.7%)


(3.8%)


n/a




(1.3%)


(2.3%)


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).




















(3)  Certain 2013 data has been recast to conform to the 2014 methodology which provides for consistency across all Regulated Utilities' jurisdictions.

 

Duke Energy Carolinas

Quarterly Highlights

Supplemental Regulated Utilities Electric Information

September 2014






















Three Months Ended


Nine Months Ended




September 30


September 30










% Inc.(Dec.)








% Inc.(Dec.)








%


Weather






%


Weather




2014


2013


Inc.(Dec.)


Normal (2)


2014


2013


Inc.(Dec.)


Normal (2)



















GWH Sales (1)


















Residential


7,501


7,351


2.0%




21,937


20,874


5.1%




General Service


7,951


7,812


1.8%




21,685


21,115


2.7%




Industrial


5,849


5,726


2.1%




16,230


15,866


2.3%




Other Energy Sales


77


73


5.5%




226


219


3.2%




Unbilled Sales


(677)


(538)


(25.8%)




(492)


(512)


3.9%




Total Regular Electric Sales


20,701


20,424


1.4%


(0.4%)


59,586


57,562


3.5%


0.8%




















Special Sales


2,120


2,511


(15.6%)




7,764


7,821


(0.7%)






















Total Consolidated Electric Sales -
Duke Energy Carolinas


22,821


22,935


(0.5%)




67,350


65,383


3.0%







































Average Number of Customers


















Residential


2,091,669


2,070,230


1.0%




2,085,703


2,065,651


1.0%




General Service


342,340


339,859


0.7%




341,246


338,717


0.7%




Industrial


6,515


6,573


(0.9%)




6,524


6,618


(1.4%)




Other Energy Sales


14,862


14,369


3.4%




14,617


14,377


1.7%




Total Regular Sales


2,455,386


2,431,031


1.0%




2,448,090


2,425,363


0.9%






















Special Sales


26


23


13.0%




25


24


4.2%






















Total Average Number of Customers -
Duke Energy Carolinas


2,455,412


2,431,054


1.0%




2,448,115


2,425,387


0.9%

























































Heating and Cooling Degree Days (3)


















Actual


















Heating Degree Days


12


9


33.3%




2,235


2,115


5.7%




Cooling Degree Days


884


831


6.5%




1,441


1,268


13.6%






















Variance from Normal


















Heating Degree Days


20.0%


(10.0%)


n/a




16.0%


7.5%


n/a




Cooling Degree Days


(13.3%)


(19.2%)


n/a




(6.7%)


(18.2%)


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).




















(3) Certain 2013 data has been recast to conform to the 2014 methodology which provides for consistency across all Regulated Utilities' jurisdictions.

 

Duke Energy Progress

Quarterly Highlights

Supplemental Regulated Utilities Electric Information

  September 2014





















Three Months Ended


Nine Months Ended




  September 30


  September 30










% Inc.(Dec.)








% Inc.(Dec.)








%


Weather 






%


Weather 




2014


2013


Inc.(Dec.)


Normal (2)


2014


2013


Inc.(Dec.)


Normal (2)



















GWH Sales (1)


















Residential


4,736


4,604


2.9%




14,275


13,375


6.7%




General Service


4,357


4,281


1.8%




11,767


11,438


2.9%




Industrial


2,819


2,978


(5.3%)




7,816


8,086


(3.3%)




Other Energy Sales


29


30


(3.3%)




88


90


(2.2%)




Unbilled Sales


(291)


(92)


(216.3%)




(318)


(105)


(202.9%)




    Total Regular Electric Sales 


11,650


11,801


(1.3%)


(3.7%)


33,628


32,884


2.3%


(1.1%)




















Special Sales


4,890


5,204


(6.0%)




13,766


12,877


6.9%






















  Total Consolidated Electric Sales -

Duke Energy Progress


16,540


17,005


(2.7%)




47,394


45,761


3.6%







































Average Number of Customers


















Residential


1,258,769


1,243,523


1.2%




1,254,632


1,240,502


1.1%




General Service


223,986


222,265


0.8%




222,980


221,355


0.7%




Industrial


4,266


4,341


(1.7%)




4,278


4,370


(2.1%)




Other Energy Sales


1,705


1,800


(5.3%)




1,729


1,808


(4.4%)




  Total Regular Sales


1,488,726


1,471,929


1.1%




1,483,619


1,468,035


1.1%






















Special Sales


15


15


0.0%




15


15


0.0%






















Total Average Number of Customers -
Duke Energy Progress


1,488,741


1,471,944


1.1%




1,483,634


1,468,050


1.1%

























































Heating and Cooling Degree Days (3)


















Actual


















Heating Degree Days


7


4


75.0%




2,034


1,913


6.3%




Cooling Degree Days


1,000


946


5.7%




1,629


1,442


13.0%






















Variance from Normal


















Heating Degree Days


16.7%


0.0%


n/a




14.7%


5.9%


n/a




Cooling Degree Days


(9.3%)


(14.5%)


n/a




(2.9%)


(14.4%)


n/a






















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






















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
































(3)  Certain 2013 data has been recast to conform to the 2014 methodology which provides for consistency across all Regulated Utilities' jurisdictions.

 

Duke Energy Florida

Quarterly Highlights

Supplemental Utilities Electric Information

  September 2014






















Three Months Ended


Nine Months Ended




  September 30


  September 30










% Inc.(Dec.)








% Inc.(Dec.)








%


Weather 






%


Weather 




2014


2013


Inc.(Dec.)


Normal (2)


2014


2013


Inc.(Dec.)


Normal (2)



















GWH Sales (1)


















Residential


6,207


5,713


8.6%




14,654


13,948


5.1%




General Service


4,320


4,192


3.1%




11,270


11,110


1.4%




Industrial


840


827


1.6%




2,444


2,409


1.5%




Other Energy Sales


6


6


0.0%




18


18


0.0%




Unbilled Sales


(270)


70


(485.7%)




461


483


(4.6%)




    Total Regular Sales


11,103


10,808


2.7%


0.0%


28,847


27,968


3.1%


1.1%




















Special Sales


447


455


(1.8%)




1,204


1,164


3.4%






















  Total Electric Sales -

Duke Energy Florida


11,550


11,263


2.5%




30,051


29,132


3.2%







































Average Number of Customers


















Residential


1,502,074


1,477,918


1.6%




1,497,535


1,476,026


1.5%




General Service


191,274


189,580


0.9%




190,897


188,921


1.0%




Industrial


2,259


2,331


(3.1%)




2,280


2,350


(3.0%)




Other Energy Sales


1,547


1,561


(0.9%)




1,553


1,565


(0.8%)




  Total Regular Sales


1,697,154


1,671,390


1.5%




1,692,265


1,668,862


1.4%






















Special Sales


14


16


(12.5%)




15


15


0.0%






















Total Average Number of Customers -
Duke Energy Florida


1,697,168


1,671,406


1.5%




1,692,280


1,668,877


1.4%

























































Heating and Cooling Degree Days (3)


















Actual


















Heating Degree Days


-


-


0.0%




418


338


23.7%




Cooling Degree Days


1,497


1,447


3.5%




2,702


2,667


1.3%






















Variance from Normal


















Heating Degree Days


0.0%


0.0%


n/a




0.5%


(21.7%)


n/a




Cooling Degree Days


(0.7%)


(3.8%)


n/a




(1.3%)


(2.3%)


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).
































(3)  Certain 2013 data has been recast to conform to the 2014 methodology which provides for consistency across all Regulated Utilities' jurisdictions.



















 

Duke Energy Ohio

Quarterly Highlights

Supplemental Regulated Utilities Electric Information

  September 2014






















Three Months Ended


Nine Months Ended




  September 30


  September 30










% Inc. (Dec.)








% Inc. (Dec.)








%


Weather






%


Weather




2014


2013


Inc.(Dec.)


 Normal (2)


2014


2013


Inc.(Dec.)


 Normal (2)



















GWH Sales (1)


















Residential


2,332


2,426


(3.9%)




6,924


6,761


2.4%




General Service


2,602


2,601


0.0%




7,273


7,166


1.5%




Industrial


1,571


1,497


4.9%




4,501


4,316


4.3%




Other Energy Sales


28


28


0.0%




84


84


0.0%




Unbilled Sales


(160)


(66)


(142.4%)




(242)


(82)


(195.1%)




    Total Regular Electric Sales


6,373


6,486


(1.7%)


2.9%


18,540


18,245


1.6%


2.5%




















Special Sales


92


103


(10.7%)




228


322


(29.2%)






















    Total Electric Sales -
Duke Energy Ohio


6,465


6,589


(1.9%)




18,768


18,567


1.1%







































Average Number of Customers


















Residential


739,300


735,261


0.5%




741,316


736,743


0.6%




General Service


86,456


86,141


0.4%




86,402


86,143


0.3%




Industrial 


2,526


2,540


(0.6%)




2,522


2,552


(1.2%)




Other Energy


3,184


2,932


8.6%




3,175


2,931


8.3%




  Total Regular Sales


831,466


826,874


0.6%




833,415


828,369


0.6%






















Special Sales


1


1


0.0%




1


1


0.0%






















Total Average Number of Electric Customers - Duke Energy Ohio


831,467


826,875


0.6%




833,416


828,370


0.6%

























































Heating and Cooling Degree Days (3)


















Actual


















Heating Degree Days 


58


35


65.7%




3,528


3,161


11.6%




Cooling Degree Days


629


699


(10.0%)




1,011


1,045


(3.3%)






















Variance from Normal


















Heating Degree Days 


26.1%


(14.6%)


n/a




16.9%


3.1%


n/a




Cooling Degree Days


(22.3%)


(13.9%)


n/a




(12.8%)


(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).




















(3)  Certain 2013 data has been recast to conform to the 2014 methodology which provides for consistency across all Regulated Utilities' jurisdictions.

 

Duke Energy Ohio

Quarterly Highlights

Supplemental Regulated Utilities Gas Information

  September 2014






















Three Months Ended


Nine Months Ended




  September 30


  September 30










% Inc. (Dec.)








% Inc. (Dec.)








%


Weather






%


Weather




2014


2013


Inc.(Dec.)


 Normal (2)


2014


2013


Inc.(Dec.)


 Normal (2)



















MCF Sales (1)


















Residential


1,819,907


1,860,539


(2.2%)




31,354,403


28,481,036


10.1%




General Service


1,711,398


1,656,619


3.3%




19,335,821


17,456,201


10.8%




Industrial 


1,104,399


944,865


16.9%




5,425,634


4,633,841


17.1%




Other Energy Sales


4,197,435


4,710,321


(10.9%)




15,616,728


15,598,636


0.1%




Unbilled Sales


(125,000)


187,000


(166.8%)




(5,027,000)


(4,728,000)


(6.3%)




    Total Gas Sales -
Duke Energy Ohio


8,708,139


9,359,344


(7.0%)


(5.8%)


66,705,586


61,441,714


8.6%


1.0%
































-





Average Number of Customers


















Residential


468,840


466,283


0.5%




472,600


469,384


0.7%




General Service


41,505


41,604


(0.2%)




43,379


43,301


0.2%




Industrial


1,558


1,586


(1.8%)




1,627


1,633


(0.4%)




Other Energy


149


163


(8.6%)




154


165


(6.7%)




Total Average Number of Gas Customers - Duke Energy Ohio


512,052


509,636


0.5%




517,760


514,483


0.6%







































Heating and Cooling Degree Days (3)


















Actual


















Heating Degree Days 


58


35


65.7%




3,528


3,161


11.6%




Cooling Degree Days


629


699


(10.0%)




1,011


1,045


(3.3%)






















Variance from Normal


















Heating Degree Days 


26.1%


(14.6%)


n/a




16.9%


3.1%


n/a




Cooling Degree Days


(22.3%)


(13.9%)


n/a




(12.8%)


(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).




















(3)  Certain 2013 data has been recast to conform to the 2014 methodology which provides for consistency across all Regulated Utilities' jurisdictions.

 

Duke Energy Indiana

Quarterly Highlights

Supplemental Regulated Utilities Electric Information

  September 2014






















Three Months Ended


Nine Months Ended




  September 30


  September 30










% Inc. (Dec.)








% Inc. (Dec.)








%


Weather






%


Weather




2014


2013


Inc.(Dec.)


 Normal (2)


2014


2013


Inc.(Dec.)


 Normal (2)



















GWH Sales (1)


















Residential


2,184


2,312


(5.5%)




7,274


7,039


3.3%




General Service


2,264


2,301


(1.6%)




6,371


6,334


0.6%




Industrial


2,758


2,692


2.5%




7,982


7,789


2.5%




Other Energy Sales


12


13


(7.7%)




39


40


(2.5%)




Unbilled Sales


(102)


(25)


(308.0%)




(329)


(92)


(257.6%)




    Total Regular Electric Sales


7,116


7,293


(2.4%)


0.0%


21,337


21,110


1.1%


1.3%




















Special Sales


1,108


1,454


(23.8%)




4,216


4,079


3.4%






















    Total Electric Sales -
Duke Energy Indiana


8,224


8,747


(6.0%)




25,553


25,189


1.4%







































Average Number of Customers


















Residential


689,562


685,461


0.6%




691,815


687,332


0.7%




General Service


100,428


100,369


0.1%




100,314


100,236


0.1%




Industrial 


2,694


2,748


(2.0%)




2,711


2,729


(0.7%)




Other Energy


1,512


1,480


2.2%




1,505


1,467


2.6%




  Total Regular Sales


794,196


790,058


0.5%




796,345


791,764


0.6%






















Special Sales


6


6


0.0%




6


7


(14.3%)






















Total Average Number of Customers -

Duke Energy Indiana


794,202


790,064


0.5%




796,351


791,771


0.6%

























































Heating and Cooling Degree Days (3)


















Actual


















Heating Degree Days 


88


39


125.6%




4,130


3,504


17.9%




Cooling Degree Days


507


729


(30.5%)




825


1,058


(22.0%)






















Variance from Normal


















Heating Degree Days 


66.0%


(17.4%)


n/a




28.1%


6.8%


n/a




Cooling Degree Days


(36.6%)


(8.9%)


n/a




(28.9%)


(7.7%)


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).




















(3)  Certain 2013 data has been recast to conform to the 2014 methodology which provides for consistency across all Regulated Utilities' jurisdictions.

 

DUKE ENERGY CORPORTATION

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 Power


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 (Loss) 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 Power


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 (Loss) 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 Power
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

Three Months Ended September 30, 2013

(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


$

923



$



$



$



$



$

923





















International Energy


116











116





















Commercial Power


15





(43)


B



(43)



(28)





















Total Reportable Segment Income


1,054





(43)





(43)



1,011





















Other


(21)



(54)


A

11


B



(43)



(64)





















Intercompany Eliminations








(5)


D

(5)



(5)





















Total Reportable Segment Income and Other Net Expense


1,033



(54)



(32)



(5)



(91)



942





















Discontinued Operations






32


B

30


C

62



62





















Net Income (Loss) Attributable to Duke Energy Corporation


$

1,033



$

(54)



$



$

25



$

(29)



$

1,004





















EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, BASIC


$

1.46



$

(0.08)



$



$

0.04



$

(0.04)



$

1.42





















EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, DILUTED


$

1.46



$

(0.08)



$



$

0.04



$

(0.04)



$

1.42





















A - Net of $34 million tax benefit. $24 million recorded as an increase in Operating Revenues and $113 million recorded within Operating Expenses 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 $17 million tax benefit)
and Other segment (net of $8 million tax benefit).

C - Recorded in Income (loss) From Discontinued Operations, net of tax on the Condensed Consolidated Statements of Operations. Includes the mark-to-market

of economic hedges of the nonregulated Midwest generation business.

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


Weighted Average Shares (reported and adjusted) - in millions

     Basic                                          706


     Diluted                                       706


 

DUKE ENERGY CORPORATION

ADJUSTED TO REPORTED EARNINGS RECONCILIATION

Nine Months Ended September 30, 2013

(Dollars in millions, except per-share amounts)




















Special Items











Adjusted Earnings


Costs to Achieve, Progress Merger


Nuclear Development Charges


Litigation Reserve


Crystal River Unit 3 Impairment


Midwest Generation Operations


Discontinued Operations


Total Adjustments


Reported Earnings

SEGMENT INCOME
























































Regulated Utilities


$

2,169



$



$

(57)


D

$



$

(180)


F

$



$



$

(237)



$

1,932






























International Energy


300

















300






























Commercial Power


18











(72)


B



(72)



(54)






























Total Reportable Segment Income


2,487





(57)





(180)



(72)





(309)



2,178






























Other


(114)



(139)


A



(31)


E



6


B



(164)



(278)






























Intercompany Eliminations














(10)


G

(10)



(10)






























Total Reportable Segment Income and Other Net Expense


2,373



(139)



(57)



(31)



(180)



(66)



(10)



(483)



1,890






























Discontinued Operations












66


B

21


C

87



87






























Net Income (Loss) Attributable to Duke Energy Corporation


$

2,373



$

(139)



$

(57)



$

(31)



$

(180)



$



$

11



$

(396)



$

1,977






























EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, BASIC


$

3.36



$

(0.20)



$

(0.08)



$

(0.04)



$

(0.26)



$



$

0.01



$

(0.57)



$

2.79






























EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, DILUTED


$

3.36



$

(0.20)



$

(0.08)



$

(0.04)



$

(0.26)



$



$

0.01



$

(0.57)



$

2.79






























A - Net of $86 million tax benefit. $57 million recorded as an increase in Operating Revenues, $275 million recorded within 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 $33 million tax benefit) and Other segment (net of $4 million tax benefit).

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

D - Net of $30 million tax benefit. Recorded in Impairment charges (Operating Expenses) on the Condensed Consolidated Statement of Operations.

E - Net of $19 million tax benefit. Recorded in Operations, maintenance and other (Operating Expenses) on the Condensed Consolidated Statement of Operations.

F - Net of $115 million tax benefit. Recorded in Impairment charges (Operating Expenses) on the Condensed Consolidated Statement 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                                          706


     Diluted                                       706


 

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


33.5%

**

$             1,230


32.0%

**

Costs-to-Achieve, Progress Energy Merger


(21)




(65)




Midwest Generation Operations


(22)




(51)




Asset Impairment


-




(35)




Economic Hedges (Mark-to-Market)


-




(3)




Asset Sales


5




5




Reported Income Tax Expense From Continuing
Operations


$               460


34.0%


$             1,081


31.4%












*Includes amounts attributable to noncontrolling interests 



















**Adjusted effective tax rate is a non-GAAP financial measure as the rate is calculated using a pre-tax earnings and income tax expense, both adjusted for the impact of special items and the mark-to-market impacts of economic hedges in the Commercial Power segment. The most directly comparable GAAP measure for adjusted effective tax rate is reported effective tax rate, which includes the impact of special items and the mark-to-market impacts of economic hedges in the Commercial Power segment.  


 

DUKE ENERGY CORPORATION

ADJUSTED EFFECTIVE TAX RECONCILIATION

Three and Nine Months Ended September 30, 2013

(Dollars in millions)









Three Months Ended
September 30, 2013


Nine Months Ended
September 30, 2013




Balance


Effective Tax Rate


Balance


Effective Tax Rate












Adjusted Earnings, Pre-Tax Income*


$             1,514




$             3,571




Crystal River Unit 3 Impairment


-




(295)




Costs-to-Achieve, Progress Energy Merger


(88)




(225)




Midwest Generation Operations


(57)




(103)




Nuclear Development Charges


-




(87)




Litigation Reserve


-




(50)




Reported Income From Continuing Operations
Before Income Taxes


$             1,369




$             2,811
























Adjusted Tax Expense*


$               482


31.8%

**

$             1,196


33.5%

**

Crystal River Unit 3 Impairment


-




(115)




Costs-to-Achieve, Progress Energy Merger


(34)




(86)




Midwest Generation Operations


(25)




(37)




Nuclear Development Charges


-




(30)




Litigation Reserve


-




(19)




Reported Income Tax Expense From Continuing
Operations


$               423


30.9%


$               909


32.3%












*Includes amounts attributable to noncontrolling interests 



















**Adjusted effective tax rate is a non-GAAP financial measure as the rate is calculated using a pre-tax earnings and income tax expense, both adjusted for the impact of special items and the mark-to-market impacts of economic hedges in the Commercial Power segment. The most directly comparable GAAP measure for adjusted effective tax rate is reported effective tax rate, which includes the impact of special items and the mark-to-market impacts of economic hedges in the Commercial Power segment.  


 

 

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SOURCE Duke Energy

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