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Form 8-K Duke Energy CORP For: Aug 15 Filed by: Duke Energy Carolinas, LLC

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August 15, 2016 4:38 PM 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): August 15, 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 Second 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:
August 15, 2016
By:
/s/ William E. Currens Jr.
 
 
Name:
William E. Currens Jr.
 
 
Title:
Senior Vice President, Chief Accounting Officer and Controller





EXHIBIT INDEX

Exhibit
 
Description
 
 
 
99.1

 
Second Quarter 2016 Statistical Supplement










2nd Quarter 2016 Statistical Supplement




Table of Contents
 
 
 
 
 
 
 
 
DUKE ENERGY CORPORATION (Unaudited)
 
DUKE ENERGY MONEYPOOL SUPPLEMENT (Unaudited)
Consolidating Statements of Operations
 
Schedule of Moneypool Balances
Consolidating Balance Sheets
 
 
 
 
 
 
Non-GAAP Disclosures (Unaudited)
REGULATED UTILITIES (Unaudited)
 
Reported to Adjusted Earnings Reconciliations
Consolidating Segment Income
 
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 Form 10-Q for the six months ended June 30, 2016.





DUKE ENERGY CORPORATION
Consolidating Statements of Operations
(Unaudited)
 
Six Months Ended June 30, 2016
(in millions)
Regulated
Utilities

International
Energy

Commercial
Portfolio

Other

Eliminations /
Adjustments

Duke Energy

Operating Revenues
 
 
 
 
 
 
Regulated electric
$
10,090

$
—

$
—

$
—

$
(72
)
$
10,018

Nonregulated electric and other
—

516

226

59

21

822

Regulated natural gas
268

—

—

—

(2
)
266

Total operating revenues
10,358

516

226

59

(53
)
11,106

Operating Expenses
 
 
 
 
 
 
Fuel used in electric generation and purchased power - regulated
3,086

—

—

—

—

3,086

Fuel used in electric generation and purchased power - nonregulated
—

117

—

23

—

140

Cost of natural gas
58

23

—

—

—

81

Operation, maintenance and other
2,587

153

157

75

(52
)
2,920

Depreciation and amortization
1,449

44

63

71

—

1,627

Property and other taxes
556

5

12

17

—

590

Impairment charges (a)
3

194

—

2

(1
)
198

Total operating expenses
7,739

536

232

188

(53
)
8,642

Gains (Losses) on Sales of Other Assets and Other, net
2

(1
)
2

11

—

14

Operating Income (Loss)
2,621

(21
)
(4
)
(118
)
—

2,478

Other Income and Expenses
 
 
 
 
 
 
Equity in earnings of unconsolidated affiliates
(1
)
17

6

1

—

23

Other income and expenses, net
139

22

—

17

(7
)
171

Total Other Income and Expenses
138

39

6

18

(7
)
194

Interest Expense (b)
555

44

23

396

(7
)
1,011

Income (Loss) from Continuing Operations Before Income Taxes
2,204

(26
)
(21
)
(496
)
—

1,661

Income Tax Expense (Benefit) from Continuing Operations (c)
791

(52
)
(61
)
(226
)
—

452

Income (Loss) from Continuing Operations
1,413

26

40

(270
)
—

1,209

Less: Net Income (Loss) Attributable to Noncontrolling Interest
—

5

(1
)
4

—

8

Segment Income / Other Net Expense
$
1,413

$
21

$
41

$
(274
)
$
—

$
1,201

Income from Discontinued Operations, net of tax
 
 
 
 
 
2

Net Income Attributable to Duke Energy Corporation
 
 
 
 
 
$
1,203

 
 
 
 
 
 
 
Segment Income / Other Net Expense
$
1,413

$
21

$
41

$
(274
)
$
—

$
1,201

Special Items
—

145

—

170

—

315

Adjusted Earnings (d)
$
1,413

$
166

$
41

$
(104
)
$
—

$
1,516

(a)
International Energy includes an impairment charge of $194 million related to certain assets in Central America.
(b)
Other includes costs to achieve mergers of $183 million, which primarily consists of 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.
(c)
International Energy includes a net tax benefit of $79 million resulting from the ability to more efficiently utilize foreign tax credits, net of higher taxes due to no longer asserting indefinite reinvestment of foreign earnings.
(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)
 
Six Months Ended June 30, 2015 (a)
(in millions)
Regulated
Utilities

International
Energy

Commercial
Portfolio

Other

Eliminations /
Adjustments

Duke Energy

Operating Revenues
 
 
 
 
 
 
Regulated electric
$
10,613

$
—

$
—

$
2

$
(68
)
$
10,547

Nonregulated electric and other
—

560

148

59

13

780

Regulated natural gas
330

—

—

—

(3
)
327

Total operating revenues
10,943

560

148

61

(58
)
11,654

Operating Expenses
 
 
 
 
 
 
Fuel used in electric generation and purchased power - regulated
3,662

—

—

—

—

3,662

Fuel used in electric generation and purchased power - nonregulated
—

197

14

12

(1
)
222

Cost of natural gas
110

28

—

—

(1
)
137

Operation, maintenance and other
2,615

164

100

21

(52
)
2,848

Depreciation and amortization
1,405

46

50

66

—

1,567

Property and other taxes
516

4

9

14

—

543

Total operating expenses
8,308

439

173

113

(54
)
8,979

Gains on Sales of Other Assets and Other, net
9

(1
)
6

13

—

27

Operating Income (Loss)
2,644

120

(19
)
(39
)
(4
)
2,702

Other Income and Expenses
 
 
 
 
 
 
Equity in earnings of unconsolidated affiliates
(2
)
40

(3
)
1

—

36

Other income and expenses, net
133

5

3

9

(4
)
146

Total Other Income and Expenses
131

45

—

10

(4
)
182

Interest Expense
549

45

22

194

(4
)
806

Income (Loss) from Continuing Operations Before Income Taxes
2,226

120

(41
)
(223
)
(4
)
2,078

Income Tax Expense (Benefit) from Continuing Operations (b)
820

30

(18
)
(134
)
—

698

Income (Loss) from Continuing Operations
1,406

90

(23
)
(89
)
(4
)
1,380

Less: Net Income Attributable to Noncontrolling Interest
—

2

—

5

—

7

Segment Income / Other Net Expense
$
1,406

$
88

$
(23
)
$
(94
)
$
(4
)
$
1,373

Income from Discontinued Operations, net (c)
 
 
 
 
 
34

Net Income Attributable to Duke Energy Corporation
 
 
 
 
 
$
1,407

 
 
 
 
 
 
 
Segment Income / Other Net Expense
$
1,406

$
88

$
(23
)
$
(94
)
$
(4
)
$
1,373

Special Items
—

—

135

27

4

166

Adjusted Earnings (d)
$
1,406

$
88

$
112

$
(67
)
$
—

$
1,539


(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)
The amount for Commercial Portfolio includes state tax expense of $41 million, resulting from changes to state apportionment factors due to the sale of the nonregulated Midwest generation business, that does not qualify for discontinued operations.
(c)
Includes the after-tax impact of $53 million for the agreement in principle reached in a lawsuit related to the nonregulated Midwest generation business.
(d)
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)
 
June 30, 2016
(in millions)
Regulated
Utilities

International
Energy

Commercial
Portfolio

Other

Eliminations /
Adjustments

Duke Energy

Current Assets
 
 
 
 
 
 
Cash and cash equivalents
$
55

$
454

$
8

$
159

$
—

$
676

Receivables, net
360

147

34

35

(1
)
575

Receivables of variable interest entities, net
1,919

—

15

10

(1
)
1,943

Receivables from affiliated companies
4

—

249

3,415

(3,668
)
—

Notes receivable from affiliated companies
157

—

—

56

(213
)
—

Inventory
3,513

65

23

26

—

3,627

Regulatory assets
717

—

—

108

—

825

Other
240

26

89

129

(33
)
451

Total current assets
6,965

692

418

3,938

(3,916
)
8,097

Investments and Other Assets
 
 
 
 
 
 
Investments in equity method unconsolidated affiliates
3

41

543

25

1

613

Investments and advances to (from) subsidiaries
18

(24
)
12

46,584

(46,590
)
—

Nuclear decommissioning trust funds
5,966

—

—

—

—

5,966

Goodwill
15,950

284

122

—

1

16,357

Other
1,914

259

100

1,342

(643
)
2,972

Total investments and other assets
23,851

560

777

47,951

(47,231
)
25,908

Property, Plant and Equipment
 
 
 
 
 
 
Cost
106,415

3,072

3,896

1,760

—

115,143

Accumulated depreciation and amortization
(35,718
)
(1,218
)
(501
)
(975
)
—

(38,412
)
Generation facilities to be retired, net
598

—

—

—

—

598

Net property, plant and equipment
71,295

1,854

3,395

785

—

77,329

Regulatory Assets and Deferred Debits
 
 
 
 
 
 
Regulatory assets
10,838

—

—

452

—

11,290

Other
12

—

—

19

(1
)
30

Total regulatory assets and deferred debits
10,850

—

—

471

(1
)
11,320

Total Assets
112,961

3,106

4,590

53,145

(51,148
)
122,654

Segment reclassifications, intercompany balances and other
(207
)
25

(261
)
(50,885
)
51,328

—

Segment Assets
$
112,754

$
3,131

$
4,329

$
2,260

$
180

$
122,654



5


DUKE ENERGY CORPORATION
Consolidating Balance Sheets - Liabilities and Equity
(Unaudited)
 
June 30, 2016
(in millions)
Regulated
Utilities

International
Energy

Commercial
Portfolio

Other

Eliminations /
Adjustments

Duke Energy

Current Liabilities
 
 
 
 
 
 
Accounts payable
$
1,615

$
66

$
86

$
454

$
—

$
2,221

Accounts payable to affiliated companies
3,273

133

208

45

(3,659
)
—

Notes payable to affiliated companies
56

—

—

157

(213
)
—

Notes payable and commercial paper
—

—

—

2,312

—

2,312

Taxes accrued
496

109

(306
)
168

—

467

Interest accrued
322

30

1

96

(1
)
448

Current maturities of long-term debt
1,124

156

154

907

1

2,342

Regulatory liabilities
330

—

—

2

—

332

Other
1,253

57

36

482

(44
)
1,784

Total current liabilities
8,469

551

179

4,623

(3,916
)
9,906

Long-Term Debt
27,818

607

866

10,641

(1
)
39,931

Long-Term Debt Payable to Affiliated Companies
625

—

17

—

(642
)
—

Deferred Credits and Other Liabilities
 
 
 
 
 

Deferred income taxes
15,441

138

300

(2,841
)
—

13,038

Investment tax credits
492

—

—

—

—

492

Accrued pension and other post-retirement benefit costs
653

—

—

391

—

1,044

Asset retirement obligations
10,146

16

68

1

—

10,231

Regulatory liabilities
6,285

—

—

49

—

6,334

Other
992

85

296

358

(1
)
1,730

Total deferred credits and other liabilities
34,009

239

664

(2,042
)
(1
)
32,869

Equity
 
 
 
 
 
 
Total Duke Energy Corporation stockholders' equity
42,040

1,666

2,843

39,935

(46,589
)
39,895

Noncontrolling interests
—

43

21

(12
)
1

53

Total equity(a)
42,040

1,709

2,864

39,923

(46,588
)
39,948

Total Liabilities and Equity
112,961

3,106

4,590

53,145

(51,148
)
122,654

Segment reclassifications, intercompany balances and other
(207
)
25

(261
)
(50,885
)
51,328

—

Segment Liabilities and Equity
$
112,754

$
3,131

$
4,329

$
2,260

$
180

$
122,654


(a)
As of June 30, 2016, the International Energy segment had a carrying value of approximately $2.4 billion, adjusted for $589 million of cumulative foreign currency translation losses currently classified as accumulated other comprehensive loss.

6


REGULATED UTILITIES
Consolidating Segment Income
(Unaudited)
 
Six Months Ended June 30, 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
$
3,416

$
2,520

$
2,157

$
500

$
163

$
1,416

$
(82
)
$
10,090

Regulated natural gas
—

—

—

218

51

—

(1
)
268

Total operating revenues
3,416

2,520

2,157

718

214

1,416

(83
)
10,358

Operating Expenses
 
 
 
 
 
 

 
Fuel used in electric generation and purchased power
810

872

841

150

61

448

(96
)
3,086

Cost of natural gas
—

—

—

40

18

—

—

58

Operation, maintenance and other
946

684

391

151

69

342

4

2,587

Depreciation and amortization
523

346

235

103

22

221

(1
)
1,449

Property and other taxes
138

80

159

128

7

44

—

556

Impairment charges
—

—

3

—

—

—

—

3

Total operating expenses
2,417

1,982

1,629

572

177

1,055

(93
)
7,739

Gains on Sales of Other Assets and Other, net
—

1

—

—

—

—

1

2

Operating Income
999

539

528

146

37

361

11

2,621

Other Income and Expenses, net
82

29

18

2

1

9

(3
)
138

Interest Expense
214

127

81

32

8

90

3

555

Income Before Income Taxes
867

441

465

116

30

280

5

2,204

Income Tax Expense
301

157

175

37

8

93

20

791

Segment Income 
$
566

$
284

$
290

$
79

$
22

$
187

$
(15
)
$
1,413


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


7


REGULATED UTILITIES
Consolidating Segment Income
(Unaudited)
 
Six Months Ended June 30, 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
$
3,608

$
2,642

$
2,367

$
454

$
184

$
1,474

$
(116
)
$
10,613

Regulated natural gas
—

—

—

261

69

—

—

330

Total operating revenues
3,608

2,642

2,367

715

253

1,474

(116
)
10,943

Operating Expenses
 
 
 
 
 
 
 
 
Fuel used in electric generation and purchased power
1,005

1,024

1,011

144

78

529

(129
)
3,662

Cost of natural gas
—

—

—

77

32

—

1

110

Operation, maintenance and other
929

724

381

157

65

355

4

2,615

Depreciation and amortization
510

315

256

90

25

211

(2
)
1,405

Property and other taxes
137

67

168

121

6

18

(1
)
516

Total operating expenses
2,581

2,130

1,816

589

206

1,113

(127
)
8,308

Gains on Sales of Other Assets and Other, net
—

1

—

8

—

1

(1
)
9

Operating Income
1,027

513

551

134

47

362

10

2,644

Other Income and Expenses, net
83

35

10

(3
)
1

9

(4
)
131

Interest Expense
208

116

99

31

7

88

—

549

Income Before Income Taxes
902

432

462

100

41

283

6

2,226

Income Tax Expense
327

156

178

37

15

103

4

820

Segment Income
$
575

$
276

$
284

$
63

$
26

$
180

$
2

$
1,406


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


8


REGULATED UTILITIES
Consolidating Balance Sheets - Assets
(Unaudited)
 
June 30, 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
$
16

$
8

$
8

$
4

$
6

$
12

$
1

$
55

Receivables, net
112

35

64

57

2

87

3

360

Receivables of variable interest entities, net
696

421

355

—

—

—

447

1,919

Receivables from affiliated companies
71

9

3

33

10

59

(181
)
4

Notes receivable from affiliated companies
252

—

—

184

2

147

(428
)
157

Inventory
1,169

1,068

657

66

44

508

1

3,513

Regulatory assets
262

187

135

11

7

115

—

717

Other
77

35

43

16

27

45

(3
)
240

Total current assets
2,655

1,763

1,265

371

98

973

(160
)
6,965

Investments and Other Assets
 
 
 

 
 
 
 
Investments in equity method unconsolidated affiliates
1

1

2

—

—

—

(1
)
3

Investments and advances to (from) subsidiaries
29

(17
)
3

—

—

—

3

18

Nuclear decommissioning trust funds
3,133

2,110

724

—

—

—

(1
)
5,966

Goodwill
—

—

—

920

—

—

15,030

15,950

Other
915

508

287

27

2

217

(42
)
1,914

Total investments and other assets
4,078

2,602

1,016

947

2

217

14,989

23,851

Property, Plant and Equipment

 
 

 
 
 

Cost
40,285

27,771

15,938

5,794

2,112

13,677

838

106,415

Accumulated depreciation and amortization
(13,880
)
(10,350
)
(4,730
)
(1,601
)
(936
)
(4,219
)
(2
)
(35,718
)
Generation facilities to be retired, net
—

506

—

—

—

93

(1
)
598

Net property, plant and equipment
26,405

17,927

11,208

4,193

1,176

9,551

835

71,295

Regulatory Assets and Deferred Debits
 
 
 

 
 
 
 
Regulatory assets
2,856

2,744

2,553

430

82

825

1,348

10,838

Other
3

2

3

2

—

2

—

12

Total regulatory assets and deferred debits
2,859

2,746

2,556

432

82

827

1,348

10,850

Total Assets
35,997

25,038

16,045

5,943

1,358

11,568

17,012

112,961

Intercompany balances and other
(201
)
(98
)
(104
)
(53
)
44

(44
)
249

(207
)
Reportable Segment Assets
$
35,796

$
24,940

$
15,941

$
5,890

$
1,402

$
11,524

$
17,261

$
112,754


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

9


REGULATED UTILITIES
Consolidating Balance Sheets - Liabilities and Equity
(Unaudited)
 
June 30, 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
$
565

$
300

$
390

$
191

$
21

$
145

$
3

$
1,615

Accounts payable to affiliated companies
173

134

100

26

7

37

2,796

3,273

Notes payable to affiliated companies
—

78

406

—

—

—

(428
)
56

Taxes accrued
135

58

158

90

9

42

4

496

Interest accrued
108

96

40

15

4

59

—

322

Current maturities of long-term debt
468

252

48

3

51

221

81

1,124

Regulatory liabilities
91

84

82

14

2

57

—

330

Other
400

314

361

57

21

102

(2
)
1,253

Total current liabilities
1,940

1,316

1,585

396

115

663

2,454

8,469

Long-Term Debt
8,592

6,163

5,492

1,521

287

3,566

2,197

27,818

Long-Term Debt Payable to Affiliated Companies
300

150

—

—

25

150

—

625

Deferred Credits and Other Liabilities
 
 
 

 
 
 
 
Deferred income taxes
6,494

3,162

2,572

1,160

305

1,732

16

15,441

Investment tax credits
196

152

3

3

1

137

—

492

Accrued pension and other post-retirement benefit costs
96

249

238

38

12

74

(54
)
653

Asset retirement obligations
3,910

4,594

792

21

103

520

206

10,146

Regulatory liabilities
2,885

1,901

508

190

56

745

—

6,285

Other
645

24

101

131

27

72

(8
)
992

Total deferred credits and other liabilities
14,226

10,082

4,214

1,543

504

3,280

160

34,009

Equity
10,939

7,327

4,754

2,483

427

3,909

12,201

42,040

Total Liabilities and Equity
35,997

25,038

16,045

5,943

1,358

11,568

17,012

112,961

Intercompany balances and other
(201
)
(98
)
(104
)
(53
)
44

(44
)
249

(207
)
Reportable Segment Liabilities and Equity
$
35,796

$
24,940

$
15,941

$
5,890

$
1,402

$
11,524

$
17,261

$
112,754


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



10


REGULATED UTILITIES
Revenues By Customer Class
(Unaudited)
 
Six Months Ended June 30, 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
$
1,398

$
900

$
1,100

$
296

$
60

$
476

$
—

$
4,230

General service
1,071

622

642

150

65

344

—

2,894

Industrial
604

303

123

33

26

349

—

1,438

Wholesale
217

593

104

—

9

171

—

1,094

Change in unbilled
73

20

35

5

3

13

—

149

Other revenues
53

82

153

16

—

63

(82
)
285

Total Electric Revenues
$
3,416

$
2,520

$
2,157

$
500

$
163

$
1,416

$
(82
)
$
10,090

 
 
 
 
 
 
 
 
 
Regulated Natural Gas Revenues
 
 
 
 
 
 
 
 
Residential
$
—

$
—

$
—

$
145

$
38

$
—

$
—

$
183

General service
—

—

—

61

14

—

—

75

Industrial
—

—

—

8

2

—

—

10

Change in unbilled
—

—

—

(6
)
(3
)
—

—

(9
)
Other revenues
—

—

—

10

—

—

(1
)
9

Total Natural Gas Revenues
$
—

$
—

$
—

$
218

$
51

$
—

$
(1
)
$
268

 
Six Months Ended June 30, 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
$
1,506

$
991

$
1,214

$
289

$
65

$
532

$
—

$
4,597

General service
1,071

643

727

146

67

369

—

3,023

Industrial
610

323

142

29

27

373

—

1,504

Wholesale
220

584

133

—

22

149

—

1,108

Change in unbilled
31

8

24

6

—

(15
)
—

54

Other revenues
170

93

127

(16
)
3

66

(116
)
327

Total Electric Revenues
$
3,608

$
2,642

$
2,367

$
454

$
184

$
1,474

$
(116
)
$
10,613

 
 
 
 
 
 
 
 
 
Regulated Natural Gas Revenues
 
 
 
 
 
 
 
 
Residential
$
—

$
—

$
—

$
176

$
51

$
—

$
—

$
227

General service
—

—

—

75

21

—

—

96

Industrial
—

—

—

11

3

—

—

14

Change in unbilled
—

—

—

(9
)
(5
)
—

—

(14
)
Other revenues
—

—

—

8

(1
)
—

—

7

Total Natural Gas Revenues
$
—

$
—

$
—

$
261

$
69

$
—

$
—

$
330

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

11


DUKE ENERGY MONEYPOOL SUPPLEMENT
Schedule of Moneypool Balances
(Unaudited)



 
June 30, 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)
$
681

$
(300
)
$
(159
)
$
(47
)
$
—

$
(25
)
$
(150
)
$
—

Moneypool (borrowings) lendings(d)
(157
)
252

(69
)
(359
)
184

2

147

—


(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
REPORTED TO ADJUSTED EARNINGS RECONCILIATION
Six Months Ended June 30, 2016
(Dollars in millions, except per-share amounts)

 
 
 
 
Special Items
 
 
 
 
 
 
 
 
Reported Earnings
 
Costs to Achieve, Mergers
 
International Impairment
 
Cost Savings Initiatives
 
Discontinued Operations
 
Total Adjustments
 
Adjusted Earnings
SEGMENT INCOME
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Regulated Utilities
 
$
1,413

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
1,413

International Energy
 
21

 
—

 
145

B
—

 
—

 
145

 
166

Commercial Portfolio
 
41

 
—

 
—

 
—

 
—

 
—

 
41

Total Reportable Segment Income
 
1,475

 
—

 
145

 
—

 
—

 
145

 
1,620

Other
 
(274
)
 
143

A
—

 
27

C
—

 
170

 
(104
)
Total Reportable Segment Income and Other Net Expense
 
1,201

 
143

 
145

 
27

 
—

 
315

 
1,516

Discontinued Operations
 
2

 
—

 
—

 
—

 
(2
)
D
(2
)
 
—

Net Income Attributable to Duke Energy Corporation
 
$
1,203

 
$
143

 
$
145

 
$
27

 
$
(2
)
 
$
313

 
$
1,516

EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, BASIC
 
$
1.74

 
$
0.21

 
$
0.21

 
$
0.04

 
$
—

 
$
0.46

 
$
2.20

EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, DILUTED
 
$
1.74

 
$
0.21

 
$
0.21

 
$
0.04

 
$
—

 
$
0.46

 
$
2.20


A - Net of $88 million tax benefit. Includes $1 million recorded within Operating Revenues, $47 million recorded within Operating Expenses and $183 million recorded within Interest Expense on the Condensed Consolidated Statements of Operations. The interest expense is primarily mark-to-market losses related to forward-starting interest rate swaps utilized to manage interest rate exposure for the expected financing of the Piedmont acquisition.
B - Net of $49 million tax benefit. Impairment of certain assets in Central America recorded within Impairment Charges on the Condensed Consolidated Statements of Operations.
C - Net of $17 million tax benefit. Primarily consists of severance costs recorded within Operation, maintenance and other on the Condensed Consolidated Statements of Operations.
D - Recorded in (Loss) Income From Discontinued Operations, net of tax on the Condensed Consolidated Statements of Operations.

Weighted Average Shares (reported and adjusted) - in millions
Basic            689
Diluted            689



13


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

 
 
 
 
Special Items
 
 
 
 
 
 
 
 
Reported Earnings
 
Costs to Achieve, Progress Merger
 
Midwest Generation Operations
 
Discontinued Operations
 
Total Adjustments
 
Adjusted Earnings
SEGMENT INCOME
 
 
 
 
 
 
 
 
 
 
 
 
Regulated Utilities
 
$
1,406

 
$
—

 
$
—

 
$
—

 
$
—

 
$
1,406

International Energy
 
88

 
—

 
—

 
—

 
—

 
88

Commercial Portfolio
 
(23
)
 
—

 
94

B
41

E
135

 
112

Total Reportable Segment Income
 
1,471

 
—

 
94

 
41

 
135

 
1,606

Other
 
(94
)
 
27

A
—

 
—

 
27

 
(67
)
Intercompany Eliminations
 
(4
)
 
—

 
—

 
4

D
4

 
—

Total Reportable Segment Income and Other Net Expense
 
1,373

 
27

 
94

 
45

 
166

 
1,539

Discontinued Operations
 
34

 
—

 
(94
)
B
60

C
(34
)
 
—

Net Income Attributable to Duke Energy Corporation
 
$
1,407

 
$
27

 
$
—

 
$
105

 
$
132

 
$
1,539

EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, BASIC
 
$
2.01

 
$
0.04

 
$
—

 
$
0.15

 
$
0.19

 
$
2.20

EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, DILUTED
 
$
2.01

 
$
0.04

 
$
—

 
$
0.15

 
$
0.19

 
$
2.20


A - Net of $16 million tax benefit. Recorded within Operating Expenses on the Condensed Consolidated Statements of Operations.
B - Operating results of the nonregulated Midwest generation business that had been classified from discontinued operations after adjustment for special items and economic hedges (net of $53 million tax benefit).
C - Recorded in Income (Loss) From Discontinued Operations, net of tax on the Condensed Consolidated Statements of Operations, and includes the impact of a litigation reserve related to the nonregulated Midwest generation business.
D - Reverses the impact on eliminations of classifying the nonregulated Midwest generation business as discontinued operations.
E - State tax expense resulting from the completion of the sale of the nonregulated Midwest generation business.

Weighted Average Shares (reported and adjusted) - in millions
Basic            700
Diluted            700


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 are not indicative of our ongoing performance, and are discussed below. Management believes the presentation of adjusted earnings and adjusted diluted EPS provides useful information to investors, as it provides them an additional relevant comparison of Duke Energy’s performance across periods. Management uses these non-GAAP financial measures for planning and forecasting and for reporting results to the Board of Directors, employees, stockholders, analysts and investors concerning Duke Energy’s financial performance. Adjusted diluted EPS is also used as a basis for employee incentive bonuses. The most directly comparable GAAP measures for adjusted earnings and adjusted diluted EPS are Net Income Attributable to Duke Energy Corporation and Diluted EPS Attributable to Duke Energy Corporation common stockholders.
Special items included in the periods presented include the following:
•
Costs to achieve mergers and International impairment represent charges that result from potential or completed strategic acquisitions and divestitures that do not reflect ongoing costs of the business.
•
Costs savings initiatives represent restructuring charges incurred to reduce future expenses and do not represent ongoing costs.
•
Midwest generation operations represents the operating results of the nonregulated Midwest generation business and Duke Energy Retail Sales (collectively, the Disposal Group), which have been classified as discontinued operations. 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 during the period.
Due to the forward-looking nature of any forecasted adjusted earnings guidance, information to reconcile this non-GAAP financial measure to the most directly comparable GAAP financial measure is not available at this time, as management is unable to project all special items for future periods (such as legal settlements, the impact of regulatory orders, or asset impairments).
Management evaluates segment performance based on segment income. Segment income is defined as income from continuing operations net of income attributable to noncontrolling interests. Segment income includes intercompany revenues and expenses that are eliminated in the Condensed Consolidated Financial Statements. Management also uses adjusted segment income as a measure of historical and anticipated future segment performance. Adjusted segment income is a non-GAAP financial measure, as it is based upon segment income adjusted for special items, which are discussed above. Management believes the presentation of adjusted segment income 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.
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 or any amounts that may be reported as discontinued operations or extraordinary items for future periods, as discussed above.
Duke Energy’s adjusted earnings, adjusted diluted EPS, and adjusted segment income may not be comparable to similarly titled measures of another company because other entities may not calculate the measures in the same manner.



15

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