UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One) |
|
|
|||
x |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|
|||
For the quarterly period ended September 30, 2013 |
|
||||
OR |
|
||||
¨ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|
|||
For the transition period from to |
|
||||
_________________________ |
|
||||
|
|
|
|||
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
|
|
1-3274 |
DUKE ENERGY FLORIDA, INC. (a Florida corporation) 299 First Avenue North St. Petersburg, Florida 33701 704-382-3853 59-0247770
|
1-15929 |
PROGRESS ENERGY, INC. (a North Carolina corporation) 410 South Wilmington Street Raleigh, North Carolina 27601-1748 704-382-3853 56-2155481
|
|
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, INC. (a North Carolina corporation) 410 South Wilmington Street Raleigh, North Carolina 27601-1748 704-382-3853 56-0165465
|
|
1-3543 |
DUKE ENERGY INDIANA, INC. (an Indiana corporation) 1000 East Main Street Plainfield, Indiana 46168 704-382-3853 35-0594457
|
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Duke Energy Corporation (Duke Energy) |
Yes x |
No ¨ |
|
Duke Energy Florida, Inc. (Duke Energy Florida) |
Yes x |
No ¨ |
Duke Energy Carolinas, LLC (Duke Energy Carolinas) |
Yes x |
No ¨ |
|
Duke Energy Ohio, Inc. (Duke Energy Ohio) |
Yes x |
No ¨ |
Progress Energy, Inc. (Progress Energy) |
Yes x |
No ¨ |
|
Duke Energy Indiana, Inc. (Duke Energy Indiana) |
Yes x |
No ¨ |
Duke Energy Progress, Inc. (Duke Energy Progress) |
Yes x |
No ¨ |
|
|
|
|
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Duke Energy |
Yes x |
No ¨ |
|
Duke Energy Florida |
Yes x |
No ¨ |
Duke Energy Carolinas |
Yes x |
No ¨ |
|
Duke Energy Ohio |
Yes x |
No ¨ |
Progress Energy |
Yes x |
No ¨ |
|
Duke Energy Indiana |
Yes x |
No ¨ |
Duke Energy Progress |
Yes x |
No ¨ |
|
|
|
|
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
(Check one):
Duke Energy |
Large accelerated filer x |
Accelerated filer ¨ |
Non-accelerated filer ¨ |
Smaller reporting company ¨ |
Duke Energy Carolinas |
Large accelerated filer ¨ |
Accelerated filer ¨ |
Non-accelerated filer x |
Smaller reporting company ¨ |
Progress Energy |
Large accelerated filer x |
Accelerated filer ¨ |
Non-accelerated filer ¨ |
Smaller reporting company ¨ |
Duke Energy Progress |
Large accelerated filer ¨ |
Accelerated filer ¨ |
Non-accelerated filer x |
Smaller reporting company ¨ |
Duke Energy Florida |
Large accelerated filer ¨ |
Accelerated filer ¨ |
Non-accelerated filer x |
Smaller reporting company ¨ |
Duke Energy Ohio |
Large accelerated filer ¨ |
Accelerated filer ¨ |
Non-accelerated filer x |
Smaller reporting company ¨ |
Duke Energy Indiana |
Large accelerated filer ¨ |
Accelerated filer ¨ |
Non-accelerated filer x |
Smaller reporting company ¨ |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Duke Energy |
Yes ¨ |
No x |
|
Duke Energy Florida |
Yes ¨ |
No x |
Duke Energy Carolinas |
Yes ¨ |
No x |
|
Duke Energy Ohio |
Yes ¨ |
No x |
Progress Energy |
Yes ¨ |
No x |
|
Duke Energy Indiana |
Yes ¨ |
No x |
Duke Energy Progress |
Yes ¨ |
No x |
|
|
|
|
Number of shares of Common Stock outstanding at November 5, 2013:
|
|
|
Registrant |
Description |
Shares |
Duke Energy |
Common Stock, $0.001 par value
|
705,993,361 |
Duke Energy Carolinas |
All of the registrant’s limited liability company member interests are directly owned by Duke Energy.
|
|
Progress Energy |
All of the registrant’s common stock is directly owned by Duke Energy.
|
|
Duke Energy Progress |
All of the registrant’s common stock is indirectly owned by Duke Energy.
|
|
Duke Energy Florida |
All of the registrant’s common stock is indirectly owned by Duke Energy.
|
|
Duke Energy Ohio |
All of the registrant’s common stock is indirectly owned by Duke Energy.
|
|
Duke Energy Indiana |
All of the registrant’s common stock is indirectly owned by Duke Energy. |
This combined Form 10-Q is filed separately by seven registrants: Duke Energy, Duke Energy Carolinas, Progress Energy, Duke Energy Progress, Duke Energy Florida, Duke Energy Ohio and Duke Energy Indiana (collectively the Duke Energy Registrants). Information contained herein relating to any individual registrant is filed by such registrant solely on its own behalf. Each registrant makes no representation as to information relating exclusively to the other registrants.
Duke Energy Carolinas, Progress Energy, Duke Energy Progress, Duke Energy Florida, Duke Energy Ohio and Duke Energy Indiana meet the conditions set forth in General Instructions H(1)(a) and (b) of Form 10-Q and are therefore filing this form with the reduced disclosure format specified in General Instructions H(2) of Form 10-Q.
TABLE OF CONTENTS |
||||
Safe Harbor for Forward-Looking Statements |
|
|||
|
|
|
|
|
PART I. FINANCIAL INFORMATION |
||||
Item 1. |
Financial Statements |
|
||
|
|
|
|
|
|
Duke Energy Corporation Financial Statements |
4 |
||
|
|
|
|
|
|
Duke Energy Carolinas, LLC Financial Statements |
9 |
||
|
|
|
|
|
|
Progress Energy, Inc. Financial Statements |
13 |
||
|
|
|
|
|
|
Duke Energy Progress, Inc. Financial Statements |
17 |
||
|
|
|
|
|
|
Duke Energy Florida, Inc. Financial Statements |
21 |
||
|
|
|
|
|
|
Duke Energy Ohio, Inc. Financial Statements |
25 |
||
|
|
|
|
|
|
Duke Energy Indiana, Inc. Financial Statements |
29 |
||
|
|
|
|
|
|
Combined Notes to Condensed Consolidated Financial Statements |
|
||
|
|
Note 1 - Organization and Basis of Presentation |
33 |
|
|
|
Note 2 - Acquisitions and Dispositions |
35 |
|
|
|
Note 3 - Business Segments |
37 |
|
|
|
Note 4 - Regulatory Matters |
40 |
|
|
|
Note 5 - Commitments and Contingencies |
48 |
|
|
|
Note 6 - Debt and Credit Facilities |
54 |
|
|
|
Note 7 - Goodwill |
56 |
|
|
|
Note 8 - Risk Management, Derivative Instruments and Hedging Activities |
57 |
|
|
|
Note 9 - Investments in Debt and Equity Securities |
71 |
|
|
|
Note 10 - Fair Value of Financial Instruments |
77 |
|
|
|
Note 11 - Variable Interest Entities |
88 |
|
|
|
Note 12 - Earnings Per Common Share |
92 |
|
|
|
Note 13 - Stock-Based Compensation |
93 |
|
|
|
Note 14 - Employee Benefit Plans |
93 |
|
|
|
Note 15 - Severance |
97 |
|
|
|
Note 16 - Income Taxes and Other Taxes |
97 |
|
|
|
Note 17 - Related Party Transactions |
99 |
|
|
|
Note 18 - New Accounting Standards |
100 |
|
|
|
Note 19 - Subsequent Events |
101 |
|
|
|
|
|
|
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
102 |
||
|
|
|
|
|
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
127 |
||
|
|
|
|
|
Item 4. |
Controls and Procedures |
127 |
||
|
|
|
|
|
PART II. OTHER INFORMATION |
||||
Item 1. |
Legal Proceedings |
129 |
||
|
|
|
|
|
Item 1A. |
Risk Factors |
129 |
||
|
|
|
|
|
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
130 |
||
|
|
|
|
|
Item 6. |
Exhibits |
131 |
||
|
|
|
|
|
|
Signatures |
133 |
CAUTIONARY STATEMENT REGARDING 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, which are intended to cover Duke Energy and the applicable Duke Energy Registrants, are identified by terms and phrases such as “anticipate,” “believe,” “intend,” “estimate,” “expect,” “continue,” “should,” “could,” “may,” “plan,” “project,” “predict,” “will,” “potential,” “forecast,” “target,” “guidance,” “outlook,” and similar expressions. Forward-looking statements involve risks and uncertainties that may cause actual results to be materially different from the results predicted. Factors that could cause actual results to differ materially from those indicated in any forward-looking statement include, but are not limited to:
· State, federal and foreign legislative and regulatory initiatives, including costs of compliance with existing and future environmental requirements or climate change, as well as rulings that affect cost and investment recovery or have an impact on rate structures or market prices;
· The 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 retiring Crystal River Unit 3 could prove to be more extensive than are currently identified and all costs associated with the retirement of the Crystal River Unit 3 asset, 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;
· The impact of compliance with material restrictions or conditions related to the Progress Energy merger imposed by regulators could exceed our expectations;
· Costs and effects of legal and administrative proceedings, settlements, investigations and claims;
· Industrial, commercial and residential growth or decline in service territories or customer bases resulting from customer usage patterns, including energy efficiency efforts and use of alternative energy sources including self-generation and distributed generation technologies;
· Additional competition in electric markets and continued industry consolidation;
· Political and regulatory uncertainty in other countries in which Duke Energy conducts business;
· The influence of weather and other natural phenomena on operations, including the economic, operational and other effects of severe storms, hurricanes, droughts and tornadoes;
· The ability to successfully operate electric generating facilities and deliver electricity to customers;
· The impact on facilities and business from a terrorist attack, cyber security threats 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 securities 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.
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 the Duke Energy Registrants have described. Forward-looking statements speak only as of the date they are made; the Duke Energy Registrants undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise that occur after that date.
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DUKE ENERGY CORPORATION |
||||||||||||||
Condensed Consolidated Statements Of Operations |
||||||||||||||
(Unaudited) |
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
||||||||||
(in millions, except per-share amounts) |
|
|
2013 |
|
|
2012 |
|
|
|
2013 |
|
|
2012 |
|
Operating Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Regulated electric |
|
$ |
5,718 |
|
$ |
5,763 |
|
|
$ |
15,441 |
|
$ |
10,892 |
|
Nonregulated electric, natural gas, and other |
|
|
908 |
|
|
882 |
|
|
|
2,683 |
|
|
2,708 |
|
Regulated natural gas |
|
|
83 |
|
|
77 |
|
|
|
362 |
|
|
329 |
|
|
Total operating revenues |
|
|
6,709 |
|
|
6,722 |
|
|
|
18,486 |
|
|
13,929 |
Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fuel used in electric generation and purchased power - regulated |
|
|
2,013 |
|
|
2,222 |
|
|
|
5,394 |
|
|
3,848 |
|
Fuel used in electric generation and purchased power - nonregulated |
|
|
428 |
|
|
484 |
|
|
|
1,329 |
|
|
1,328 |
|
Cost of natural gas and coal sold |
|
|
33 |
|
|
40 |
|
|
|
180 |
|
|
184 |
|
Operation, maintenance and other |
|
|
1,458 |
|
|
1,654 |
|
|
|
4,383 |
|
|
3,262 |
|
Depreciation and amortization |
|
|
707 |
|
|
666 |
|
|
|
2,045 |
|
|
1,620 |
|
Property and other taxes |
|
|
325 |
|
|
326 |
|
|
|
991 |
|
|
681 |
|
Impairment charges |
|
|
2 |
|
|
266 |
|
|
|
388 |
|
|
668 |
|
|
Total operating expenses |
|
|
4,966 |
|
|
5,658 |
|
|
|
14,710 |
|
|
11,591 |
Gains on Sales of Other Assets and Other, net |
|
|
― |
|
|
14 |
|
|
|
3 |
|
|
21 |
|
Operating Income |
|
|
1,743 |
|
|
1,078 |
|
|
|
3,779 |
|
|
2,359 |
|
Other Income and Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings of unconsolidated affiliates |
|
|
33 |
|
|
33 |
|
|
|
91 |
|
|
118 |
|
Other income and expenses, net |
|
|
54 |
|
|
132 |
|
|
|
182 |
|
|
285 |
|
|
Total other income and expenses |
|
|
87 |
|
|
165 |
|
|
|
273 |
|
|
403 |
Interest Expense |
|
|
379 |
|
|
401 |
|
|
|
1,127 |
|
|
857 |
|
Income From Continuing Operations Before Income Taxes |
|
|
1,451 |
|
|
842 |
|
|
|
2,925 |
|
|
1,905 |
|
Income Tax Expense from Continuing Operations |
|
|
457 |
|
|
248 |
|
|
|
952 |
|
|
565 |
|
Income From Continuing Operations |
|
|
994 |
|
|
594 |
|
|
|
1,973 |
|
|
1,340 |
|
Income From Discontinued Operations, net of tax |
|
|
14 |
|
|
4 |
|
|
|
11 |
|
|
5 |
|
Net Income |
|
|
1,008 |
|
|
598 |
|
|
|
1,984 |
|
|
1,345 |
|
Less: Net Income Attributable to Noncontrolling Interests |
|
|
4 |
|
|
4 |
|
|
|
7 |
|
|
12 |
|
Net Income Attributable to Duke Energy Corporation |
|
$ |
1,004 |
|
$ |
594 |
|
|
$ |
1,977 |
|
$ |
1,333 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Per Share - Basic and Diluted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations attributable to Duke Energy Corporation common shareholders |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
1.40 |
|
$ |
0.84 |
|
|
$ |
2.78 |
|
$ |
2.50 |
|
Diluted |
|
$ |
1.40 |
|
$ |
0.84 |
|
|
$ |
2.78 |
|
$ |
2.50 |
Income from discontinued operations attributable to Duke Energy Corporation common shareholders |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.02 |
|
$ |
0.01 |
|
|
$ |
0.01 |
|
$ |
0.01 |
|
Diluted |
|
$ |
0.02 |
|
$ |
0.01 |
|
|
$ |
0.01 |
|
$ |
0.01 |
Net Income attributable to Duke Energy Corporation common shareholders |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
1.42 |
|
$ |
0.85 |
|
|
$ |
2.79 |
|
$ |
2.51 |
|
Diluted |
|
$ |
1.42 |
|
$ |
0.85 |
|
|
$ |
2.79 |
|
$ |
2.51 |
Dividends declared per share |
|
$ |
― |
|
$ |
― |
|
|
$ |
2.31 |
|
$ |
2.265 |
|
Weighted-average shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
706 |
|
|
699 |
|
|
|
706 |
|
|
531 |
|
Diluted |
|
|
706 |
|
|
699 |
|
|
|
706 |
|
|
531 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Notes to Condensed Consolidated Financial Statements
4
PART I
DUKE ENERGY CORPORATION |
|
|
|
|
|
|
|
|||||||
Condensed Consolidated Statements Of Comprehensive Income |
|
|
|
|
|
|
|
|||||||
(Unaudited) |
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
||||||||||
(in millions) |
2013 |
|
2012 |
|
|
2013 |
|
2012 |
||||||
Net Income |
|
$ |
1,008 |
|
$ |
598 |
|
|
$ |
1,984 |
|
$ |
1,345 |
|
Other Comprehensive (Loss) Income, Net of Tax |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustments |
|
|
(8) |
|
|
2 |
|
|
|
(137) |
|
|
(85) |
|
Pension and OPEB adjustments(a) |
|
|
― |
|
|
(21) |
|
|
|
5 |
|
|
(15) |
|
Net unrealized gain (loss) on cash flow hedges(b) |
|
|
1 |
|
|
(2) |
|
|
|
55 |
|
|
(19) |
|
Reclassification into earnings from cash flow hedges |
|
|
1 |
|
|
(2) |
|
|
|
1 |
|
|
― |
|
Unrealized gain on investments in auction rate securities |
|
|
― |
|
|
1 |
|
|
|
― |
|
|
7 |
|
Unrealized (loss) gain on investments in available for sale securities |
|
|
(1) |
|
|
3 |
|
|
|
(5) |
|
|
6 |
|
Reclassification into earnings from available for sale securities |
|
|
3 |
|
|
(1) |
|
|
|
3 |
|
|
(4) |
|
Other Comprehensive Loss, Net of Tax |
|
|
(4) |
|
|
(20) |
|
|
|
(78) |
|
|
(110) |
|
Comprehensive Income |
|
|
1,004 |
|
|
578 |
|
|
|
1,906 |
|
|
1,235 |
|
Less: Comprehensive Income Attributable to Noncontrolling Interests |
|
|
4 |
|
|
4 |
|
|
|
3 |
|
|
8 |
|
Comprehensive Income Attributable to Duke Energy Corporation |
|
$ |
1,000 |
|
$ |
574 |
|
|
$ |
1,903 |
|
$ |
1,227 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
Net of insignificant tax expense and $2 million tax expense for the three and nine months ended September 30, 2013 and $10 million tax benefit and $7 million tax benefit for the three and nine months ended September 30, 2012. |
|||||||||||||
(b) |
Net of $1 million tax benefit and $17 million tax expense for the three and nine months ended September 30, 2013 and $1 million tax benefit and $10 million tax benefit for the three and nine months ended September 30, 2012. |
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Notes to Condensed Consolidated Financial Statements
5
PART I
DUKE ENERGY CORPORATION |
||||||
Condensed Consolidated Balance Sheets |
||||||
(Unaudited) |
||||||
|
|
|
|
|
|
|
(in millions) |
September 30, 2013 |
|
December 31, 2012 |
|||
ASSETS |
|
|
|
|
|
|
Current Assets |
|
|
|
|
|
|
Cash and cash equivalents |
$ |
2,166 |
|
$ |
1,424 |
|
Short-term investments |
|
118 |
|
|
333 |
|
Receivables (net of allowance for doubtful accounts of $31 at September 30, 2013 and $34 at December 31, 2012) |
|
1,585 |
|
|
1,516 |
|
Restricted receivables of variable interest entities (net of allowance for doubtful accounts of $42 at September 30, 2013 and $44 at December 31, 2012) |
|
1,258 |
|
|
1,201 |
|
Inventory |
|
3,100 |
|
|
3,223 |
|
Other |
|
2,191 |
|
|
2,425 |
|
|
Total current assets |
|
10,418 |
|
|
10,122 |
Investments and Other Assets |
|
|
|
|
|
|
Investments in equity method unconsolidated affiliates |
|
511 |
|
|
483 |
|
Nuclear decommissioning trust funds |
|
4,805 |
|
|
4,242 |
|
Goodwill |
|
16,345 |
|
|
16,365 |
|
Intangibles, net |
|
351 |
|
|
372 |
|
Notes receivable |
|
65 |
|
|
71 |
|
Restricted other assets of variable interest entities |
|
52 |
|
|
62 |
|
Other |
|
2,361 |
|
|
2,399 |
|
|
Total investments and other assets |
|
24,490 |
|
|
23,994 |
Property, Plant and Equipment |
|
|
|
|
|
|
Cost |
|
100,682 |
|
|
98,833 |
|
Cost, variable interest entities |
|
1,679 |
|
|
1,558 |
|
Accumulated depreciation and amortization |
|
(33,136) |
|
|
(31,969) |
|
Generation facilities to be retired, net |
|
59 |
|
|
136 |
|
|
Net property, plant and equipment |
|
69,284 |
|
|
68,558 |
Regulatory Assets and Deferred Debits |
|
|
|
|
|
|
Regulatory assets |
|
10,220 |
|
|
11,004 |
|
Other |
|
178 |
|
|
178 |
|
|
Total regulatory assets and deferred debits |
|
10,398 |
|
|
11,182 |
Total Assets |
$ |
114,590 |
|
$ |
113,856 |
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
Current Liabilities |
|
|
|
|
|
|
Accounts payable |
$ |
1,819 |
|
$ |
2,444 |
|
Notes payable and commercial paper |
|
1,278 |
|
|
745 |
|
Non-recourse notes payable of variable interest entities |
|
325 |
|
|
312 |
|
Taxes accrued |
|
706 |
|
|
459 |
|
Interest accrued |
|
474 |
|
|
448 |
|
Current maturities of long-term debt |
|
2,307 |
|
|
3,110 |
|
Other |
|
2,330 |
|
|
2,511 |
|
|
Total current liabilities |
|
9,239 |
|
|
10,029 |
Long-term Debt |
|
36,137 |
|
|
35,499 |
|
Non-recourse Long-term Debt of Variable Interest Entities |
|
1,265 |
|
|
852 |
|
Deferred Credits and Other Liabilities |
|
|
|
|
|
|
Deferred income taxes |
|
11,489 |
|
|
10,490 |
|
Investment tax credits |
|
446 |
|
|
458 |
|
Accrued pension and other post-retirement benefit costs |
|
1,743 |
|
|
2,520 |
|
Asset retirement obligations |
|
5,341 |
|
|
5,169 |
|
Regulatory liabilities |
|
5,904 |
|
|
5,584 |
|
Other |
|
1,789 |
|
|
2,221 |
|
|
Total deferred credits and other liabilities |
|
26,712 |
|
|
26,442 |
Commitments and Contingencies |
|
|
|
|
|
|
Preferred Stock of Subsidiaries |
|
― |
|
|
93 |
|
Equity |
|
|
|
|
|
|
Common stock, $0.001 par value, 2 billion shares authorized; 706 million and 704 million shares outstanding at September 30, 2013 and December 31, 2012, respectively |
|
1 |
|
|
1 |
|
Additional paid-in capital |
|
39,317 |
|
|
39,279 |
|
Retained earnings |
|
2,227 |
|
|
1,889 |
|
Accumulated other comprehensive loss |
|
(380) |
|
|
(306) |
|
|
Total Duke Energy Corporation shareholders' equity |
|
41,165 |
|
|
40,863 |
Noncontrolling interests |
|
72 |
|
|
78 |
|
|
Total equity |
|
41,237 |
|
|
40,941 |
Total Liabilities and Equity |
$ |
114,590 |
|
$ |
113,856 |
|
|
|
|
|
|
|
|
See Notes to Condensed Consolidated Financial Statements
6
PART I
DUKE ENERGY CORPORATION |
|||||||
Condensed Consolidated Statements Of Cash Flows |
|||||||
(Unaudited) |
|||||||
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, |
||||
(in millions) |
2013 |
|
2012 |
||||
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
|
||
Net income |
$ |
1,984 |
|
$ |
1,345 |
||
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
||
|
Depreciation, amortization and accretion (including amortization of nuclear fuel) |
|
2,365 |
|
|
1,865 |
|
|
Equity component of AFUDC |
|
(121) |
|
|
(209) |
|
|
Severance expense |
|
― |
|
|
73 |
|
|
FERC mitigation costs |
|
― |
|
|
117 |
|
|
Community support and charitable contributions expense |
|
34 |
|
|
100 |
|
|
Losses (gains) on sales of other assets |
|
8 |
|
|
(21) |
|
|
Impairment of other long-lived assets |
|
388 |
|
|
588 |
|
|
Deferred income taxes |
|
1,014 |
|
|
437 |
|
|
Equity in earnings of unconsolidated affiliates |
|
(91) |
|
|
(118) |
|
|
Voluntary opportunity cost deferral |
|
― |
|
|
(101) |
|
|
Accrued pension and other post-retirement benefit costs |
|
259 |
|
|
152 |
|
|
Contributions to qualified pension plans |
|
(27) |
|
|
(79) |
|
|
(Increase) decrease in |
|
|
|
|
|
|
|
|
Net realized and unrealized mark-to-market and hedging transactions |
|
(14) |
|
|
68 |
|
|
Receivables |
|
(154) |
|
|
(83) |
|
|
Inventory |
|
119 |
|
|
(22) |
|
|
Other current assets |
|
(48) |
|
|
101 |
|
Increase (decrease) in |
|
|
|
|
|
|
|
|
Accounts payable |
|
(412) |
|
|
(222) |
|
|
Taxes accrued |
|
245 |
|
|
(7) |
|
|
Other current liabilities |
|
(31) |
|
|
128 |
|
Other assets |
|
(307) |
|
|
(167) |
|
|
Other liabilities |
|
(221) |
|
|
34 |
|
|
Net cash provided by operating activities |
|
4,990 |
|
|
3,979 |
|
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
|
||
Capital expenditures |
|
(3,854) |
|
|
(3,845) |
||
Investment expenditures |
|
(53) |
|
|
(7) |
||
Acquisitions |
|
― |
|
|
(36) |
||
Cash acquired from the merger with Progress Energy |
|
― |
|
|
71 |
||
Purchases of available-for-sale securities |
|
(4,591) |
|
|
(2,159) |
||
Proceeds from sales and maturities of available-for-sale securities |
|
4,687 |
|
|
1,947 |
||
Net proceeds from the sales of other assets, and sales of and collections on notes receivable |
|
59 |
|
|
29 |
||
Change in restricted cash |
|
166 |
|
|
(27) |
||
Other |
|
20 |
|
|
38 |
||
|
Net cash used in investing activities |
|
(3,566) |
|
|
(3,989) |
|
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
|
||
Proceeds from the: |
|
|
|
|
|
||
|
Issuance of long-term debt |
|
2,993 |
|
|
2,626 |
|
|
Issuance of common stock related to employee benefit plans |
|
8 |
|
|
16 |
|
Payments for the: |
|
|
|
|
|
||
|
Redemption of long-term debt |
|
(2,506) |
|
|
(1,934) |
|
|
Redemption of preferred stock of a subsidiary |
|
(96) |
|
|
― |
|
Notes payable and commercial paper |
|
537 |
|
|
98 |
||
Distributions to noncontrolling interests |
|
(9) |
|
|
(14) |
||
Contributions from noncontrolling interests |
|
― |
|
|
76 |
||
Dividends paid |
|
(1,636) |
|
|
(1,211) |
||
Other |
|
27 |
|
|
4 |
||
|
Net cash used in financing activities |
|
(682) |
|
|
(339) |
|
Net increase (decrease) in cash and cash equivalents |
|
742 |
|
|
(349) |
||
Cash and cash equivalents at beginning of period |
|
1,424 |
|
|
2,110 |
||
Cash and cash equivalents at end of period |
$ |
2,166 |
|
$ |
1,761 |
||
Supplemental Disclosures: |
|
|
|
|
|
||
Merger with Progress Energy |
|
|
|
|
|
||
|
Fair value of assets acquired |
$ |
― |
|
$ |
48,698 |
|
|
Fair value of liabilities assumed |
|
― |
|
|
30,627 |
|
|
Issuance of common stock |
|
― |
|
|
18,071 |
|
Significant non-cash transactions: |
|
|
|
|
|
||
|
Accrued capital expenditures |
|
383 |
|
|
407 |
|
|
Extinguishment of debt related to investment in Attiki Gas Supply, S. A. |
|
― |
|
|
66 |
|
|
|
|
|
|
|
|
|
See Notes to Condensed Consolidated Financial Statements
7
PART I
DUKE ENERGY CORPORATION |
||||||||||||||||||||||||||||||||
Condensed Consolidated Statements Of Equity |
||||||||||||||||||||||||||||||||
(Unaudited) |
||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated Other Comprehensive Loss |
|
|
|
|
|
|
|
|
|
||||||||||
(in millions) |
Common Stock Shares |
|
Common Stock |
|
Additional Paid-in Capital |
|
Retained Earnings |
|
Foreign Currency Translation Adjustments |
|
Net Gains (Losses) on Cash Flow Hedges |
|
Net Gains (Losses) on Available for Sale Securities |
|
Pension and OPEB Adjustments |
|
Common Stockholders' Equity |
|
Noncontrolling Interests |
|
Total Equity |
|||||||||||
Balance at December 31, 2011 |
445 |
|
$ |
1 |
|
$ |
21,132 |
|
$ |
1,873 |
|
$ |
(45) |
|
$ |
(71) |
|
$ |
(9) |
|
$ |
(109) |
|
$ |
22,772 |
|
$ |
93 |
|
$ |
22,865 |
|
Net income(a) |
― |
|
|
― |
|
|
― |
|
|
1,333 |
|
|
― |
|
|
― |
|
|
― |
|
|
― |
|
|
1,333 |
|
|
11 |
|
|
1,344 |
|
Other comprehensive (loss) income |
― |
|
|
― |
|
|
― |
|
|
― |
|
|
(81) |
|
|
(19) |
|
|
9 |
|
|
(15) |
|
|
(106) |
|
|
(4) |
|
|
(110) |
|
Common stock issued in connection with the Progress Energy Merger |
258 |
|
|
― |
|
|
18,071 |
|
|
― |
|
|
― |
|
|
― |
|
|
― |
|
|
― |
|
|
18,071 |
|
|
― |
|
|
18,071 |
|
Common stock issuances, including dividend reinvestment and employee benefits |
1 |
|
|
― |
|
|
46 |
|
|
― |
|
|
― |
|
|
― |
|
|
― |
|
|
― |
|
|
46 |
|
|
― |
|
|
46 |
|
Common stock dividends |
― |
|
|
― |
|
|
― |
|
|
(1,211) |
|
|
― |
|
|
― |
|
|
― |
|
|
― |
|
|
(1,211) |
|
|
― |
|
|
(1,211) |
|
Deconsolidation of DS Cornerstone, LLC(b) |
― |
|
|
― |
|
|
― |
|
|
― |
|
|
― |
|
|
― |
|
|
― |
|
|
― |
|
|
― |
|
|
(82) |
|
|
(82) |
|
Contribution from noncontrolling interest in DS Cornerstone, LLC(b) |
― |
|
|
― |
|
|
― |
|
|
― |
|
|
― |
|
|
― |
|
|
― |
|
|
― |
|
|
― |
|
|
76 |
|
|
76 |
|
Changes in noncontrolling interest in subsidiaries(c) |
― |
|
|
― |
|
|
― |
|
|
― |
|
|
― |
|
|
― |
|
|
― |
|
|
― |
|
|
― |
|
|
(4) |
|
|
(4) |
|
Balance at September 30, 2012 |
704 |
|
$ |
1 |
|
$ |
39,249 |
|
$ |
1,995 |
|
$ |
(126) |
|
$ |
(90) |
|
$ |
― |
|
$ |
(124) |
|
$ |
40,905 |
|
$ |
90 |
|
$ |
40,995 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2012 |
704 |
|
$ |
1 |
|
$ |
39,279 |
|
$ |
1,889 |
|
$ |
(116) |
|
$ |
(100) |
|
$ |
― |
|
$ |
(90) |
|
$ |
40,863 |
|
$ |
78 |
|
$ |
40,941 |
|
Net income |
― |
|
|
― |
|
|
― |
|
|
1,977 |
|
|
― |
|
|
― |
|
|
― |
|
|
― |
|
|
1,977 |
|
|
7 |
|
|
1,984 |
|
Other comprehensive (loss) income |
― |
|
|
― |
|
|
― |
|
|
― |
|
|
(133) |
|
|
56 |
|
|
(2) |
|
|
5 |
|
|
(74) |
|
|
(4) |
|
|
(78) |
|
Common stock issuances, including dividend reinvestment and employee benefits |
2 |
|
|
― |
|
|
38 |
|
|
― |
|
|
― |
|
|
― |
|
|
― |
|
|
― |
|
|
38 |
|
|
― |
|
|
38 |
|
Common stock dividends |
― |
|
|
― |
|
|
― |
|
|
(1,636) |
|
|
― |
|
|
― |
|
|
― |
|
|
― |
|
|
(1,636) |
|
|
― |
|
|
(1,636) |
|
Premium on the redemption of preferred stock of subsidiaries |
― |
|
|
― |
|
|
― |
|
|
(3) |
|
|
― |
|
|
― |
|
|
― |
|
|
― |
|
|
(3) |
|
|
― |
|
|
(3) |
|
Distributions to noncontrolling interests |
― |
|
|
― |
|
|
― |
|
|
― |
|
|
― |
|
|
― |
|
|
― |
|
|
― |
|
|
― |
|
|
(9) |
|
|
(9) |
|
Balance at September 30, 2013 |
706 |
|
$ |
1 |
|
$ |
39,317 |
|
$ |
2,227 |
|
$ |
(249) |
|
$ |
(44) |
|
$ |
(2) |
|
$ |
(85) |
|
$ |
41,165 |
|
$ |
72 |
|
$ |
41,237 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
For the nine months ended September 30, 2012 consolidated net income of $1,345 million includes $1 million attributable to preferred shareholders of subsidiaries. Income attributable to preferred shareholders of subsidiaries is not a component of total equity and is excluded from the table above. |
|||||||||||||||||||||||||||||||
(b) |
Refer to Note 2 for further information related to DS Cornerstone, LLC. |
|||||||||||||||||||||||||||||||
(c) |
Includes payments to noncontrolling interests of $14 million for the nine months ended September 30, 2012. |
|||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Notes to Condensed Consolidated Financial Statements
8
PART I
DUKE ENERGY CAROLINAS, LLC |
||||||||||||||
Condensed Consolidated Statements Of Operations And Comprehensive Income |
||||||||||||||
(Unaudited) |
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
||||||||||
(in millions) |
2013 |
|
|
2012 |
|
2013 |
|
|
2012 |
|||||
Operating Revenues |
|
$ |
1,919 |
|
$ |
1,939 |
|
|
$ |
5,239 |
|
$ |
5,056 |
|
Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fuel used in electric generation and purchased power |
|
|
539 |
|
|
576 |
|
|
|
1,500 |
|
|
1,398 |
|
Operation, maintenance and other |
|
|
456 |
|
|
562 |
|
|
|
1,392 |
|
|
1,369 |
|
Depreciation and amortization |
|
|
228 |
|
|
233 |
|
|
|
676 |
|
|
687 |
|
Property and other taxes |
|
|
90 |
|
|
100 |
|
|
|
282 |
|
|
279 |
|
Impairment charges |
|
|
― |
|
|
31 |
|
|
|
― |
|
|
31 |
|
|
Total operating expenses |
|
|
1,313 |
|
|
1,502 |
|
|
|
3,850 |
|
|
3,764 |
(Losses) Gains on Sales of Other Assets and Other, net |
|
|
(2) |
|
|
3 |
|
|
|
― |
|
|
9 |
|
Operating Income |
|
|
604 |
|
|
440 |
|
|
|
1,389 |
|
|
1,301 |
|
Other Income and Expenses, net |
|
|
29 |
|
|
48 |
|
|
|
94 |
|
|
130 |
|
Interest Expense |
|
|
82 |
|
|
95 |
|
|
|
255 |
|
|
285 |
|
Income Before Income Taxes |
|
|
551 |
|
|
393 |
|
|
|
1,228 |
|
|
1,146 |
|
Income Tax Expense |
|
|
209 |
|
|
135 |
|
|
|
461 |
|
|
411 |
|
Net Income |
|
|
342 |
|
|
258 |
|
|
|
767 |
|
|
735 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income, net of tax |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reclassification into earnings from cash flow hedges |
|
|
1 |
|
|
― |
|
|
|
1 |
|
|
2 |
|
Comprehensive Income |
|
$ |
343 |
|
$ |
258 |
|
|
$ |
768 |
|
$ |
737 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Notes to Condensed Consolidated Financial Statements
9
PART I
DUKE ENERGY CAROLINAS, LLC |
||||||
Condensed Consolidated Balance Sheets |
||||||
(Unaudited) |
||||||
|
|
|
|
|
|
|
(in millions) |
September 30, 2013 |
|
December 31, 2012 |
|||
ASSETS |
|
|
|
|
|
|
Current Assets |
|
|
|
|
|
|
Cash and cash equivalents |
$ |
25 |
|
$ |
19 |
|
Receivables (net of allowance for doubtful accounts of $3 at September 30, 2013 and December 31, 2012) |
|
140 |
|
|
188 |
|
Restricted receivables of variable interest entities (net of allowance for doubtful accounts of $6 at September 30, 2013 and December 31, 2012) |
|
703 |
|
|
637 |
|
Receivables from affiliated companies |
|
40 |
|
|
3 |
|
Notes receivable from affiliated companies |
|
595 |
|
|
382 |
|
Inventory |
|
1,033 |
|
|
1,062 |
|
Other |
|
474 |
|
|
439 |
|
|
Total current assets |
|
3,010 |
|
|
2,730 |
Investments and Other Assets |
|
|
|
|
|
|
Nuclear decommissioning trust funds |
|
2,673 |
|
|
2,354 |
|
Other |
|
845 |
|
|
934 |
|
|
Total investments and other assets |
|
3,518 |
|
|
3,288 |
Property, Plant and Equipment |
|
|
|
|
|
|
Cost |
|
34,916 |
|
|
34,190 |
|
Accumulated depreciation and amortization |
|
(11,731) |
|
|
(11,437) |
|
Generation facilities to be retired, net |
|
― |
|
|
73 |
|
|
Net property, plant and equipment |
|
23,185 |
|
|
22,826 |
Regulatory Assets and Deferred Debits |
|
|
|
|
|
|
Regulatory assets |
|
1,794 |
|
|
1,727 |
|
Other |
|
45 |
|
|
71 |
|
|
Total regulatory assets and deferred debits |
|
1,839 |
|
|
1,798 |
Total Assets |
$ |
31,552 |
|
$ |
30,642 |
|
LIABILITIES AND MEMBER'S EQUITY |
|
|
|
|
|
|
Current Liabilities |
|
|
|
|
|
|
Accounts payable |
$ |
451 |
|
$ |
599 |
|
Accounts payable to affiliated companies |
|
235 |
|
|
128 |
|
Taxes accrued |
|
156 |
|
|
114 |
|
Interest accrued |
|
142 |
|