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Form 8-K Duke Energy CORP For: May 13 Filed by: Duke Energy Carolinas, LLC

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May 13, 2016 8:16 AM EDT


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 13, 2016
Commission file
number
 
Registrant, State of Incorporation or Organization,
 Address of Principal Executive Offices, and Telephone Number
 
IRS Employer
Identification No.
1-32853
 
 
 
DUKE ENERGY CORPORATION
(a Delaware corporation)
550 South Tryon Street
Charlotte, North Carolina 28202-1803
704-382-3853
 
20-2777218
Commission file number
Registrant, State of Incorporation or Organization, Address of Principal Executive Offices, Telephone Number and IRS Employer Identification Number
 
Commission file number
Registrant, State of Incorporation or Organization, Address of Principal Executive Offices, Telephone Number and IRS Employer Identification Number
1-4928
DUKE ENERGY CAROLINAS, LLC
(a North Carolina limited liability company)
526 South Church Street
Charlotte, North Carolina 28202-1803
704-382-3853
56-0205520
 
1-1232
DUKE ENERGY OHIO, INC.
(an Ohio corporation)
139 East Fourth Street
Cincinnati, Ohio 45202
704-382-3853
31-0240030
1-3382
DUKE ENERGY PROGRESS, LLC
(a North Carolina limited liability company)
410 South Wilmington Street
Raleigh, North Carolina 27601-1748
704-382-3853
56-0165465
 
1-3543
DUKE ENERGY INDIANA, LLC.
(Formerly DUKE ENERGY INDIANA, INC.)
(an Indiana limited liability company)
1000 East Main Street
Plainfield, Indiana 46168
704-382-3853
35-0594457
1-3274
DUKE ENERGY FLORIDA, LLC
(a Florida limited liability company)
299 First Avenue North
St. Petersburg, Florida 33701
704-382-3853
59-0247770
 
 
 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240. 13e-4(c))




Item 2.02.  Results of Operations and Financial Conditions.

The information attached hereto as exhibit 99.1 provides supplemental financial information for Duke Energy Corporation.

Item 9.01.  Financial Statements and Exhibits.

(d) Exhibits.

99.1 First Quarter 2016 Statistical Supplement




SIGNATURE

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
 
DUKE ENERGY CORPORATION
 
 
DUKE ENERGY CAROLINAS, LLC
 
 
DUKE ENERGY PROGRESS, LLC
 
 
DUKE ENERGY FLORIDA, LLC
 
 
DUKE ENERGY OHIO, INC.
 
 
DUKE ENERGY INDIANA, LLC
 
 
 
 
 
 
 
 
Date:
May 13, 2016
By:
/s/ Brian D. Savoy
 
 
Name:
Brian D. Savoy
 
 
Title:
Senior Vice President, Chief Accounting Officer and Controller





EXHIBIT INDEX

Exhibit
 
Description
 
 
 
99.1

 
First Quarter 2016 Statistical Supplement










1st Quarter 2016 Statistical Supplement




Table of Contents
 
 
 
 
 
 
 
 
DUKE ENERGY CORPORATION (Unaudited)
 
DUKE ENERGY MONEYPOOL SUPPLEMENT (Unaudited)
Consolidating Statements of Operations (a)
 
Schedule of Moneypool Balances
Consolidating Balance Sheets
 
 
 
 
 
 
Non-GAAP Disclosures (Unaudited)
REGULATED UTILITIES (Unaudited)
 
Adjusted to Reported Earnings Reconciliations (a)
Consolidating Segment Income (a)
 
Non-GAAP Financial Measures
Consolidating Balance Sheets
 
 
 
Revenues by Customer Class
 
 
 
 
 
 
 
 
















This Statistical Supplement should be read in conjunction with Duke Energy's Annual Report on Form 10-K for the year ended December 31, 2015, and the most recently filed Form 10-Q.





DUKE ENERGY CORPORATION
Consolidating Statements of Operations
(Unaudited)
 
Three Months Ended March 31, 2016
(in millions)
Regulated
Utilities

International
Energy

Commercial
Portfolio

Other

Eliminations /
Adjustments

Duke Energy

Operating Revenues
 
 
 
 
 
 
Regulated electric
$
5,089

$
—

$
—

$
—

$
(36
)
$
5,053

Nonregulated electric and other
—

246

114

29

11

400

Regulated natural gas
170

—

—

—

(1
)
169

Total operating revenues
5,259

246

114

29

(26
)
5,622

Operating Expenses
 
 
 
 
 
 
Fuel used in electric generation and purchased power - regulated
1,577

—

—

—

—

1,577

Fuel used in electric generation and purchased power - nonregulated
—

47

—

11

—

58

Cost of natural gas
49

11

—

—

—

60

Operation, maintenance and other
1,332

71

75

36

(25
)
1,489

Depreciation and amortization
728

22

30

34

—

814

Property and other taxes
279

3

6

9

—

297

Impairment charges
2

—

—

2

(1
)
3

Total operating expenses
3,967

154

111

92

(26
)
4,298

Gains on Sales of Other Assets and Other, net
1

—

1

7

—

9

Operating Income (Loss)
1,293

92

4

(56
)
—

1,333

Other Income and Expenses, net
64

16

2

10

(5
)
87

Interest Expense (a)
277

22

12

205

(5
)
511

Income (Loss) from Continuing Operations Before Income Taxes
1,080

86

(6
)
(251
)
—

909

Income Tax Expense (Benefit) from Continuing Operations (b) (c)
385

(39
)
(33
)
(100
)
—

213

Income (Loss) from Continuing Operations
695

125

27

(151
)
—

696

Less: Net Income Attributable to Noncontrolling Interest
—

2

—

3

—

5

Segment Income / Other Net Expense
$
695

$
123

$
27

$
(154
)
$
—

$
691

Income from Discontinued Operations, net of tax
 
 
 
 
 
3

Net Income Attributable to Duke Energy Corporation
 
 
 
 
 
$
694

 
 
 
 
 
 
 
Segment Income / Other Net Expense
$
695

$
123

$
27

$
(154
)
$
—

$
691

Special Items
—

—

—

86

—

86

Adjusted Earnings (d)
$
695

$
123

$
27

$
(68
)
$
—

$
777

(a)
Other includes costs to achieve mergers of $100 million related to the mark-to-market unrealized losses related to the forward-starting interest rate swaps and other financing costs for the expected financing of the Piedmont Natural Gas (Piedmont) acquisition.
(b)
International Energy includes a net tax benefit of $84 million related to more efficient utilization of foreign tax credits combined with the Company's intent to no longer indefinitely reinvest the foreign earnings of the International Energy segment, net of additional tax expense recognized in 2016 on International Energy's undistributed earnings.
(c)
Other includes a tax benefit of $54 million related to costs to achieve mergers and cost savings initiatives.
(d)
See page 13 for a detailed reconciliation of Segment Income / Other Net Expense to Adjusted Earnings.

3


DUKE ENERGY CORPORATION
Consolidating Statements of Operations
(Unaudited)
 
Three Months Ended March 31, 2015 (a)
(in millions)
Regulated
Utilities

International
Energy

Commercial
Portfolio

Other

Eliminations /
Adjustments

Duke Energy

Operating Revenues
 
 
 
 
 
 
Regulated electric
$
5,490

$
—

$
—

$
1

$
(34
)
$
5,457

Nonregulated electric and other
—

273

73

26

5

377

Regulated natural gas
233

—

—

—

(2
)
231

Total operating revenues
5,723

273

73

27

(31
)
6,065

Operating Expenses
 
 
 
 
 
 
Fuel used in electric generation and purchased power - regulated
1,941

—

—

—

—

1,941

Fuel used in electric generation and purchased power - nonregulated
—

90

14

—

—

104

Cost of natural gas
97

14

—

—

—

111

Operation, maintenance and other
1,320

78

46

11

(29
)
1,426

Depreciation and amortization
698

23

24

32

—

777

Property and other taxes
249

2

5

7

1

264

Total operating expenses
4,305

207

89

50

(28
)
4,623

Gains on Sales of Other Assets and Other, net
7

—

—

7

—

14

Operating Income (Loss)
1,425

66

(16
)
(16
)
(3
)
1,456

Other Income and Expenses, net
72

14

2

1

(2
)
87

Interest Expense
275

23

12

97

(4
)
403

Income (Loss) from Continuing Operations Before Income Taxes
1,222

57

(26
)
(112
)
(1
)
1,140

Income Tax Expense (Benefit) from Continuing Operations
448

20

(33
)
(71
)
—

364

Income (Loss) from Continuing Operations
774

37

7

(41
)
(1
)
776

Less: Net Income Attributable to Noncontrolling Interest
—

1

—

2

—

3

Segment Income / Other Net Expense
$
774

$
36

$
7

$
(43
)
$
(1
)
$
773

Income from Discontinued Operations, net (b)
 
 
 
 
 
91

Net Income Attributable to Duke Energy Corporation
 
 
 
 
 
$
864

 
 
 
 
 
 
 
Segment Income / Other Net Expense
$
774

$
36

$
7

$
(43
)
$
(1
)
$
773

Special Items
—

—

94

13

1

108

Adjusted Earnings (c)
$
774

$
36

$
101

$
(30
)
$
—

$
881


(a)
During the first quarter of 2016, Duke Energy began to evaluate interim period segment performance based on financial information that includes the impact of income tax levelization within segment income. This represents a change from the previous measure, where the interim period impacts of income tax levelization were included within Other, and therefore excluded from segment income. As a result, prior-period segment results presented have been recast to conform to this change.
(b)
Income from Discontinued Operations, net primarily relates to the operating results of the nonregulated Midwest generation business, which was sold in April 2015.
(c)
See page 14 for a detailed reconciliation of Segment Income / Other Net Expense to Adjusted Earnings.

4


DUKE ENERGY CORPORATION
Consolidating Balance Sheets - Assets
(Unaudited)
 
March 31, 2016
(in millions)
Regulated
Utilities

International
Energy

Commercial
Portfolio

Other

Eliminations /
Adjustments

Duke Energy

Current Assets
 
 
 
 
 
 
Cash and cash equivalents
$
76

$
504

$
14

$
185

$
(1
)
$
778

Receivables, net
404

146

20

40

(1
)
609

Restricted receivables of variable interest entities, net
1,679

—

20

15

—

1,714

Receivables from affiliated companies
58

—

428

3,260

(3,746
)
—

Notes receivable from affiliated companies
451

—

—

539

(990
)
—

Inventory
3,614

64

18

25

—

3,721

Regulatory assets
733

—

—

81

(1
)
813

Other
174

25

109

50

(50
)
308

Total current assets
7,189

739

609

4,195

(4,789
)
7,943

Investments and Other Assets
 
 
 
 
 
 
Investments in equity method unconsolidated affiliates
2

46

474

26

(1
)
547

Investments and advances to (from) subsidiaries
47

(23
)
(56
)
50,032

(50,000
)
—

Nuclear decommissioning trust funds
5,880

—

—

—

—

5,880

Goodwill
15,950

277

122

—

—

16,349

Other
2,007

205

119

1,345

(640
)
3,036

Total investments and other assets
23,886

505

659

51,403

(50,641
)
25,812

Property, Plant and Equipment
 
 
 
 
 
 
Cost
105,512

2,957

3,757

1,715

1

113,942

Accumulated depreciation and amortization
(35,759
)
(977
)
(470
)
(948
)
—

(38,154
)
Generation facilities to be retired, net
644

—

—

—

—

644

Net property, plant and equipment
70,397

1,980

3,287

767

1

76,432

Regulatory Assets and Deferred Debits
 
 
 
 
 
 
Regulatory assets
10,950

—

—

533

—

11,483

Other
13

—

—

26

—

39

Total regulatory assets and deferred debits
10,963

—

—

559

—

11,522

Total Assets
112,435

3,224

4,555

56,924

(55,429
)
121,709

Segment reclassifications, intercompany balances and other
(597
)
23

(372
)
(54,661
)
55,607

—

Segment Assets
$
111,838

$
3,247

$
4,183

$
2,263

$
178

$
121,709



5


DUKE ENERGY CORPORATION
Consolidating Balance Sheets - Liabilities and Equity
(Unaudited)
 
March 31, 2016
(in millions)
Regulated
Utilities

International
Energy

Commercial
Portfolio

Other

Eliminations /
Adjustments

Duke Energy

Current Liabilities
 
 
 
 
 
 
Accounts payable
$
1,596

$
52

$
91

$
347

$
—

$
2,086

Accounts payable to affiliated companies
3,336

127

227

26

(3,716
)
—

Notes payable to affiliated companies
539

—

—

451

(990
)
—

Notes payable and commercial paper
—

—

—

3,486

—

3,486

Taxes accrued
426

47

(262
)
183

—

394

Interest accrued
352

22

—

107

—

481

Current maturities of long-term debt
1,413

68

82

512

—

2,075

Regulatory liabilities
404

—

—

—

—

404

Other
1,436

55

49

508

(83
)
1,965

Total current liabilities
9,502

371

187

5,620

(4,789
)
10,891

Long-Term Debt
25,879

653

995

10,704

1

38,232

Long-Term Debt Payable to Affiliated Companies
625

—

17

—

(642
)
—

Deferred Credits and Other Liabilities
 
 
 
 
 

Deferred income taxes
15,057

189

315

(2,736
)
—

12,825

Investment tax credits
493

—

—

—

—

493

Accrued pension and other post-retirement benefit costs
678

1

—

398

—

1,077

Asset retirement obligations
10,186

16

67

1

(1
)
10,269

Regulatory liabilities
6,218

—

—

60

—

6,278

Other
1,018

84

281

318

2

1,703

Total deferred credits and other liabilities
33,650

290

663

(1,959
)
1

32,645

Equity
 
 
 
 
 
 
Total Duke Energy Corporation stockholders' equity
42,779

1,869

2,671

42,573

(50,000
)
39,892

Noncontrolling interests
—

41

22

(14
)
—

49

Total equity(a)
42,779

1,910

2,693

42,559

(50,000
)
39,941

Total Liabilities and Equity
112,435

3,224

4,555

56,924

(55,429
)
121,709

Segment reclassifications, intercompany balances and other
(597
)
23

(372
)
(54,661
)
55,607

—

Segment Liabilities and Equity
$
111,838

$
3,247

$
4,183

$
2,263

$
178

$
121,709


(a)
As of March 31, 2016, the International Energy segment had a carrying value of approximately $2.6 billion, adjusted for $644 million of cumulative foreign currency translation losses currently classified as accumulated other comprehensive loss.

6


REGULATED UTILITIES
Consolidating Segment Income
(Unaudited)
 
Three Months Ended March 31, 2016
(in millions)
Duke
Energy
Carolinas

Duke
Energy
Progress

Duke
Energy
Florida

Duke
Energy
Ohio(a)

Duke
Energy
Kentucky

Duke
Energy
Indiana

Eliminations /
Adjustments

Regulated
Utilities

Operating Revenues
 
 
 
 
 
 
 
 
Regulated electric
$
1,740

$
1,307

$
1,024

$
256

$
84

$
714

$
(36
)
$
5,089

Regulated natural gas
—

—

—

133

37

—

—

170

Total operating revenues
1,740

1,307

1,024

389

121

714

(36
)
5,259

Operating Expenses
 
 
 
 
 
 

 
Fuel used in electric generation and purchased power
421

448

412

79

32

228

(43
)
1,577

Cost of natural gas
—

—

—

34

15

—

—

49

Operation, maintenance and other
492

373

199

77

32

158

1

1,332

Depreciation and amortization
254

175

114

50

11

125

(1
)
728

Property and other taxes
67

41

78

68

3

23

(1
)
279

Impairment charges
—

—

2

—

—

—

—

2

Total operating expenses
1,234

1,037

805

308

93

534

(44
)
3,967

Gains on Sales of Other Assets and Other, net
—

1

—

1

—

—

(1
)
1

Operating Income
506

271

219

82

28

180

7

1,293

Other Income and Expenses, net
37

17

5

1

1

4

(1
)
64

Interest Expense
107

63

41

16

4

44

2

277

Income Before Income Taxes
436

225

183

67

25

140

4

1,080

Income Tax Expense
148

80

69

18

6

43

21

385

Segment Income 
$
288

$
145

$
114

$
49

$
19

$
97

$
(17
)
$
695


(a)
Amounts exclude results from the wholly owned subsidiary, Duke Energy Kentucky.    


7


REGULATED UTILITIES
Consolidating Segment Income
(Unaudited)
 
Three Months Ended March 31, 2015
 
(in millions)
Duke
Energy
Carolinas

Duke
Energy
Progress

Duke
Energy
Florida

Duke
Energy
Ohio (a)

Duke
Energy
Kentucky

Duke
Energy
Indiana

Eliminations /
Adjustments

Regulated
Utilities

Operating Revenues
 
 
 
 
 
 
 
 
Regulated electric
$
1,901

$
1,449

$
1,086

$
245

$
94

$
788

$
(73
)
$
5,490

Regulated natural gas
—

—

—

178

55

—

—

233

Total operating revenues
1,901

1,449

1,086

423

149

788

(73
)
5,723

Operating Expenses
 
 
 
 
 
 
 
 
Fuel used in electric generation and purchased power
578

575

457

75

40

294

(78
)
1,941

Cost of natural gas
—

—

—

69

28

—

—

97

Operation, maintenance and other
476

368

183

77

35

179

2

1,320

Depreciation and amortization
249

152

134

45

12

104

2

698

Property and other taxes
70

32

80

67

3

(1
)
(2
)
249

Total operating expenses
1,373

1,127

854

333

118

576

(76
)
4,305

Gains on Sales of Other Assets and Other, net
—

—

—

6

—

—

1

7

Operating Income
528

322

232

96

31

212

4

1,425

Other Income and Expenses, net
42

20

6

2

1

5

(4
)
72

Interest Expense
102

60

49

16

4

45

(1
)
275

Income Before Income Taxes
468

282

189

82

28

172

1

1,222

Income Tax Expense
168

95

73

30

10

62

10

448

Segment Income
$
300

$
187

$
116

$
52

$
18

$
110

$
(9
)
$
774


(a)
Amounts exclude results from the wholly owned subsidiary, Duke Energy Kentucky.


8


REGULATED UTILITIES
Consolidating Balance Sheets - Assets
(Unaudited)
 
March 31, 2016
(in millions)
Duke
Energy
Carolinas

Duke
Energy
Progress

Duke
Energy
Florida

Duke
Energy
Ohio(a)

Duke
Energy
Kentucky

Duke
Energy
Indiana

Eliminations /
Adjustments

Regulated
Utilities

Current Assets
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
17

$
11

$
12

$
8

$
11

$
17

$
—

$
76

Receivables, net
129

47

61

80

2

82

3

404

Restricted receivables of variable interest entities, net
615

372

256

—

—

—

436

1,679

Receivables from affiliated companies
78

5

26

8

9

106

(174
)
58

Notes receivable from affiliated companies
854

—

—

—

19

102

(524
)
451

Inventory
1,236

1,074

674

64

41

525

—

3,614

Regulatory assets
269

222

111

10

7

114

—

733

Other
32

47

53

9

17

16

—

174

Total current assets
3,230

1,778

1,193

179

106

962

(259
)
7,189

Investments and Other Assets
 
 
 

 
 
 
 
Investments in equity method unconsolidated affiliates
—

—

2

—

—

—

—

2

Investments and advances to subsidiaries
10

19

18

—

—

—

—

47

Nuclear decommissioning trust funds
3,081

2,068

730

—

—

—

1

5,880

Goodwill
—

—

—

920

—

—

15,030

15,950

Other
1,002

520

298

24

6

204

(47
)
2,007

Total investments and other assets
4,093

2,607

1,048

944

6

204

14,984

23,886

Property, Plant and Equipment

 
 

 
 
 

Cost
39,833

27,503

15,652

5,710

2,093

13,864

857

105,512

Accumulated depreciation and amortization
(13,769
)
(10,266
)
(4,734
)
(1,585
)
(930
)
(4,472
)
(3
)
(35,759
)
Generation facilities to be retired, net
—

531

—

—

—

113

—

644

Net property, plant and equipment
26,064

17,768

10,918

4,125

1,163

9,505

854

70,397

Regulatory Assets and Deferred Debits
 
 
 

 
 
 
 
Regulatory assets
2,801

2,725

2,730

441

71

766

1,416

10,950

Other
4

3

2

2

—

2

—

13

Total regulatory assets and deferred debits
2,805

2,728

2,732

443

71

768

1,416

10,963

Total Assets
36,192

24,881

15,891

5,691

1,346

11,439

16,995

112,435

Intercompany balances and other
(251
)
(162
)
(91
)
(11
)
—

(98
)
16

(597
)
Reportable Segment Assets
$
35,941

$
24,719

$
15,800

$
5,680

$
1,346

$
11,341

$
17,011

$
111,838


(a)
Excludes the balances of the wholly owned subsidiary, Duke Energy Kentucky.

9


REGULATED UTILITIES
Consolidating Balance Sheets - Liabilities and Equity
(Unaudited)
 
March 31, 2016
(in millions)
Duke
Energy
Carolinas

Duke
Energy
Progress

Duke
Energy
Florida

Duke
Energy
Ohio(a)

Duke
Energy
Kentucky

Duke
Energy
Indiana

Eliminations /
Adjustments

Regulated
Utilities

Current Liabilities
 
 
 
 
 
 
 
 
Accounts payable
$
597

$
295

$
371

$
188

$
17

$
124

$
4

$
1,596

Accounts payable to (from) affiliated companies
236

168

73

(2
)
14

11

2,836

3,336

Notes payable to affiliated companies
—

108

948

8

—

—

(525
)
539

Taxes accrued
83

33

64

111

11

119

5

426

Interest accrued
134

80

59

26

3

51

(1
)
352

Current maturities of long-term debt
468

252

13

4

51

547

78

1,413

Regulatory liabilities
48

93

186

15

3

60

(1
)
404

Other
452

382

450

53

18

79

2

1,436

Total current liabilities
2,018

1,411

2,164

403

117

991

2,398

9,502

Long-Term Debt
8,592

6,163

4,252

1,275

287

3,071

2,239

25,879

Long-Term Debt Payable to Affiliated Companies
300

150

—

—

25

150

—

625

Deferred Credits and Other Liabilities
 
 
 

 
 
 
 
Deferred income taxes
6,318

3,067

2,563

1,145

298

1,650

16

15,057

Investment tax credits
197

154

—

3

1

138

—

493

Accrued pension and other post-retirement benefit costs
105

261

240

40

12

78

(58
)
678

Asset retirement obligations
3,913

4,573

799

22

103

525

251

10,186

Regulatory liabilities
2,829

1,876

509

192

53

759

—

6,218

Other
642

31

132

134

27

59

(7
)
1,018

Total deferred credits and other liabilities
14,004

9,962

4,243

1,536

494

3,209

202

33,650

Equity
11,278

7,195

5,232

2,477

423

4,018

12,156

42,779

Total Liabilities and Equity
36,192

24,881

15,891

5,691

1,346

11,439

16,995

112,435

Intercompany balances and other
(251
)
(162
)
(91
)
(11
)
—

(98
)
16

(597
)
Reportable Segment Liabilities and Equity
$
35,941

$
24,719

$
15,800

$
5,680

$
1,346

$
11,341

$
17,011

$
111,838


(a)
Excludes the balances of the wholly owned subsidiary, Duke Energy Kentucky.



10


REGULATED UTILITIES
Revenues By Customer Class
(Unaudited)
 
Three Months Ended March 31, 2016
(in millions)
Duke Energy
Carolinas

Duke Energy
Progress

Duke Energy
Florida

Duke Energy
Ohio(a)

Duke Energy
Kentucky

Duke Energy
Indiana

Eliminations /
Adjustments

Regulated
Utilities

Regulated Electric Revenues
 
 
 
 
 
 
 
 
Residential
$
787

$
514

$
520

$
164

$
34

$
269

$
—

$
2,288

General service
526

311

307

76

32

171

—

1,423

Industrial
287

148

62

16

13

171

—

697

Wholesale
114

268

58

—

5

88

—

533

Change in unbilled
6

(9
)
2

(5
)
(1
)
(9
)
—

(16
)
Other revenues
20

75

75

5

1

24

(36
)
164

Total Revenues
$
1,740

$
1,307

$
1,024

$
256

$
84

$
714

$
(36
)
$
5,089

 
 
 
 
 
 
 
 
 
Regulated Natural Gas Revenues
 
 
 
 
 
 
 
 
Residential
$
—

$
—

$
—

$
87

$
28

$
—

$
—

$
115

General service
—

—

—

38

10

—

—

48

Industrial
—

—

—

5

2

—

—

7

Change in unbilled
—

—

—

(2
)
(1
)
—

—

(3
)
Other revenues
—

—

—

5

(2
)
—

—

3

Total Revenues
$
—

$
—

$
—

$
133

$
37

$
—

$
—

$
170

 
Three Months Ended March 31, 2015
(in millions)
Duke Energy
Carolinas

Duke Energy
Progress

Duke Energy
Florida

Duke Energy
Ohio(a)

Duke Energy
Kentucky

Duke Energy
Indiana

Eliminations /
Adjustments

Regulated
Utilities

Regulated Electric Revenues
 
 
 
 
 
 
 
 
Residential
$
878

$
593

$
556

$
164

$
38

$
321

$
—

$
2,550

General service
533

326

335

75

34

190

—

1,493

Industrial
288

159

69

15

13

188

—

732

Wholesale
116

299

76

—

14

78

—

583

Change in unbilled
(42
)
(26
)
(9
)
(7
)
(2
)
(21
)
—

(107
)
Other revenues
128

98

59

(2
)
(3
)
32

(73
)
239

Total Revenues
$
1,901

$
1,449

$
1,086

$
245

$
94

$
788

$
(73
)
$
5,490

 
 
 
 
 
 
 
 
 
Regulated Natural Gas Revenues
 
 
 
 
 
 
 
 
Residential
$
—

$
—

$
—

$
116

$
39

$
—

$
—

$
155

General service
—

—

—

51

16

—

—

67

Industrial
—

—

—

8

2

—

—

10

Change in unbilled
—

—

—

(3
)
(1
)
—

—

(4
)
Other revenues
—

—

—

6

(1
)
—

—

5

Total Revenues
$
—

$
—

$
—

$
178

$
55

$
—

$
—

$
233

(a)    Amounts exclude results from the wholly owned subsidiary, Duke Energy Kentucky.

11


DUKE ENERGY MONEYPOOL SUPPLEMENT
Schedule of Moneypool Balances
(Unaudited)



 
March 31, 2016
(in millions)
Duke Energy(a)

Duke Energy
Carolinas

Duke Energy
Progress

Duke Energy
Florida

Duke Energy
Ohio(b)

Duke Energy
Kentucky

Duke Energy
Indiana

Consolidated

Moneypool lendings (borrowings) of commercial paper(c)
$
1,164

$
(300
)
$
(205
)
$
(480
)
$
(4
)
$
(25
)
$
(150
)
$
—

Moneypool (borrowings) lendings(d)
(451
)
855

(53
)
(468
)
(4
)
19

102

—


(a)
Duke Energy only includes Duke Energy Corporation (the Parent) and Duke Energy Business Services (DEBS).
(b)
Excludes amounts of the wholly owned subsidiary, Duke Energy Kentucky.
(c)
Duke Energy issues commercial paper and loans a portion of the proceeds through the moneypool to the subsidiary Public Utilities.
(d)
Duke Energy participates in a moneypool arrangement with the subsidiary Public Utilities. Under the arrangement, short-term loans may be provided to affiliates. The Parent may loan funds through the moneypool but is prohibited from borrowing funds. DEBS is permitted to both borrow and loan funds into the moneypool. Borrowings presented for Duke Energy are borrowed by DEBS.
 

12


DUKE ENERGY CORPORATION
ADJUSTED TO REPORTED EARNINGS RECONCILIATION
Three Months Ended March 31, 2016
(Dollars in millions, except per-share amounts)
 
 
 
 
Special Items
 
 
 
 
 
 
 
 
Adjusted
Earnings
 
Costs to
Achieve,
Mergers
 
Cost Savings
Initiatives
 
Discontinued
Operations
 
Total
Adjustments
 
Reported
Earnings
SEGMENT INCOME
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Regulated Utilities
 
$
695

 
$
—

 
$
—

 
$
—

 
$
—

 
$
695

 
 
 
 
 
 
 
 
 
 
 
 
 
International Energy
 
123

 
—

 
—

 
—

 
—

 
123

 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial Portfolio
 
27

 
—

 
—

 
—

 
—

 
27

 
 
 
 
 
 
 
 
 
 
 
 
 
Total Reportable Segment Income
 
845

 
—

 
—

 
—

 
—

 
845

 
 
 
 
 
 
 
 
 
 
 
 
 
Other
 
(68
)
 
(74
)
A
(12
)
B
—

 
(86
)
 
(154
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Reportable Segment Income and Other Net Expense
 
777

 
(74
)
 
(12
)
 
—

 
(86
)
 
691

 
 
 
 
 
 
 
 
 
 
 
 
 
Discontinued Operations
 
—

 
—

 
—

 
3

C
3

 
3

 
 
 
 
 
 
 
 
 
 
 
 
 
Net Income Attributable to Duke Energy Corporation
 
$
777

 
$
(74
)
 
$
(12
)
 
$
3

 
$
(83
)
 
$
694

 
 
 
 
 
 
 
 
 
 
 
 
 
EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, BASIC
 
$
1.13

 
$
(0.11
)
 
$
(0.02
)
 
$
0.01

 
$
(0.12
)
 
$
1.01

 
 
 
 
 
 
 
 
 
 
 
 
 
EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, DILUTED
 
$
1.13

 
$
(0.11
)
 
$
(0.02
)
 
$
0.01

 
$
(0.12
)
 
$
1.01

 
 
 
 
 
 
 
 
 
 
 
 
 
A - Net of $46 million tax benefit. Includes $1 million recorded within Operating Revenues, $19 million recorded within Operating Expenses and $100 million recorded within Interest Expense on the Condensed Consolidated Statements of Operations.
B - Net of $8 million tax benefit. Consists of severance costs recorded within Operation, maintenance and other on the Condensed Consolidated Statements of Operations.
C - Recorded in Income (Loss) From Discontinued Operations, net of tax on the Condensed Consolidated Statements of Operations.
Weighted Average Shares (reported and adjusted) - in millions
Basic            689
Diluted            689


13


DUKE ENERGY CORPORATION
ADJUSTED TO REPORTED EARNINGS RECONCILIATION
Three Months Ended March 31, 2015
(Dollars in millions, except per-share amounts)
 
 
 
 
Special Items
 
 
 
 
 
 
 
 
Adjusted
Earnings
 
Costs to
Achieve,
Progress Merger
 
Midwest
Generation
Operations
 
Discontinued
Operations
 
Total
Adjustments
 
Reported
Earnings
SEGMENT INCOME
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Regulated Utilities
 
$
774

 
$
—

 
$
—

 
$
—

 
$
—

 
$
774

 
 
 
 
 
 
 
 
 
 
 
 
 
International Energy
 
36

 
—

 
—

 
—

 
—

 
36

 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial Portfolio
 
101

 
—

 
(94
)
B
—

 
(94
)
 
7

 
 
 
 
 
 
 
 
 
 
 
 
 
Total Reportable Segment Income
 
911

 
—

 
(94
)
 
—

 
(94
)
 
817

 
 
 
 
 
 
 
 
 
 
 
 
 
Other
 
(30
)
 
(13
)
A
—

 
—

 
(13
)
 
(43
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Intercompany Eliminations
 
—

 
—

 
—

 
(1
)
D
(1
)
 
(1
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Reportable Segment Income and Other Net Expense
 
881

 
(13
)
 
(94
)
 
(1
)
 
(108
)
 
773

 
 
 
 
 
 
 
 
 
 
 
 
 
Discontinued Operations
 
—

 
—

 
94

B
(3
)
C
91

 
91

 
 
 
 
 
 
 
 
 
 
 
 
 
Net Income Attributable to Duke Energy Corporation
 
$
881

 
$
(13
)
 
$
—

 
$
(4
)
 
$
(17
)
 
$
864

 
 
 
 
 
 
 
 
 
 
 
 
 
EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, BASIC
 
$
1.24

 
$
(0.02
)
 
$
—

 
$
—

 
$
(0.02
)
 
$
1.22

 
 
 
 
 
 
 
 
 
 
 
 
 
EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, DILUTED
 
$
1.24

 
$
(0.02
)
 
$
—

 
$
—

 
$
(0.02
)
 
$
1.22

 
 
 
 
 
 
 
 
 
 
 
 
 
A - Net of $8 million tax benefit. Recorded within Operating Expenses on the Condensed Consolidated Statements of Operations.
B - Operating results of the nonregulated Midwest generation business that had been classified from discontinued operations after adjustment for special items and economic hedges (net of $53 million tax benefit).
C - Recorded in Income (Loss) From Discontinued Operations, net of tax on the Condensed Consolidated Statements of Operations.
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            708
Diluted            708


14


DUKE ENERGY CORPORATION
Non-GAAP Financial Measures

Management evaluates financial performance in part based on non-GAAP financial measures, adjusted earnings and adjusted diluted EPS. These items represent income from continuing operations net of income (loss) attributable to noncontrolling interests, adjusted for the dollar and per-share impact of special items. Special items represent certain charges and credits, which management believes will not be recurring on a regular basis. The special items for the period ended March 31, 2015, include the operating results of the nonregulated Midwest generation business and Duke Energy Retail Sales (collectively, the Disposal Group) which are classified as discontinued operations for GAAP purposes. Management believes inclusion of the Disposal Group's operating results within adjusted earnings and adjusted diluted EPS results in a better reflection of Duke Energy's financial performance. Costs to achieve mergers includes financing costs related to the unsecured bridge facility to support the acquisition of Piedmont and the mark-to-market unrealized losses related to the forward-starting interest rate swaps used by Duke Energy to manage interest rate exposure for the expected financing of the Piedmont acquisition. The mark-to-market impact of forward-starting interest rate swaps is recognized in GAAP earnings immediately as the contracts do not qualify for hedge accounting or regulatory treatment. Management believes excluding the impact of the mark-to-market losses of the forward-starting interest rate swaps from adjusted earnings better reflects Duke Energy's financial performance and therefore has excluded these impacts from adjusted earnings and adjusted diluted EPS. 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 Duke Energy Board of Directors, employees, stockholders, analysts and investors concerning Duke Energy’s financial performance. Adjusted diluted EPS is also used as a basis for employee incentive bonuses. The most directly comparable GAAP measures for adjusted earnings and adjusted diluted EPS are Net Income Attributable to Duke Energy Corporation and Diluted EPS Attributable to Duke Energy Corporation common stockholders.
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 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 provides useful information to investors as it provides 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 not adjusted for any special items.
Duke Energy’s adjusted earnings, adjusted diluted EPS, and adjusted segment income may not be comparable to similarly titled measures of another company because other entities may not calculate the measures in the same manner.
 


15

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