ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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, LLC (a Florida limited liability company) 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, 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 (an Indiana limited liability company) 1000 East Main Street Plainfield, Indiana 46168 704-382-3853 35-0594457 | |
1-6196 | PIEDMONT NATURAL GAS COMPANY, INC. (a North Carolina corporation) 4720 Piedmont Row Drive Charlotte, North Carolina 28210 704-364-3120 56-0556998 |
Duke Energy Corporation (Duke Energy) | Yes x | No ¨ | Duke Energy Florida, LLC (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, LLC (Duke Energy Indiana) | Yes x | No ¨ | |
Duke Energy Progress, LLC (Duke Energy Progress) | Yes x | No ¨ | Piedmont Natural Gas Company, Inc. (Piedmont) | Yes x | No ¨ |
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 ¨ | Piedmont | Yes x | No ¨ |
Duke Energy | Large accelerated filer x | Accelerated filer ¨ | Non-accelerated filer ¨ | Smaller reporting company ¨ | Emerging Growth Company ¨ |
Duke Energy Carolinas | Large accelerated filer ¨ | Accelerated filer ¨ | Non-accelerated filer x | Smaller reporting company ¨ | Emerging Growth Company ¨ |
Progress Energy | Large accelerated filer ¨ | Accelerated filer ¨ | Non-accelerated filer x | Smaller reporting company ¨ | Emerging Growth Company ¨ |
Duke Energy Progress | Large accelerated filer ¨ | Accelerated filer ¨ | Non-accelerated filer x | Smaller reporting company ¨ | Emerging Growth Company ¨ |
Duke Energy Florida | Large accelerated filer ¨ | Accelerated filer ¨ | Non-accelerated filer x | Smaller reporting company ¨ | Emerging Growth Company ¨ |
Duke Energy Ohio | Large accelerated filer ¨ | Accelerated filer ¨ | Non-accelerated filer x | Smaller reporting company ¨ | Emerging Growth Company ¨ |
Duke Energy Indiana | Large accelerated filer ¨ | Accelerated filer ¨ | Non-accelerated filer x | Smaller reporting company ¨ | Emerging Growth Company ¨ |
Piedmont | Large accelerated filer ¨ | Accelerated filer ¨ | Non-accelerated filer x | Smaller reporting company ¨ | Emerging Growth Company ¨ |
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 | Piedmont | Yes ¨ | No x |
Registrant | Description | Shares |
Duke Energy | Common stock, $0.001 par value | 712,877,558 |
PART I. FINANCIAL INFORMATION | ||
Piedmont Natural Gas Company, Inc. Financial Statements | ||
Note 1 – Organization and Basis of Presentation | ||
Note 2 – Business Segments | ||
Note 3 – Regulatory Matters | ||
Note 4 – Commitments and Contingencies | ||
Note 5 – Debt and Credit Facilities | ||
Note 6 – Asset Retirement Obligations | ||
Note 7 – Goodwill | ||
Note 8 – Related Party Transactions | ||
Note 9 – Derivatives and Hedging | ||
Note 10 – Investments in Debt and Equity Securities | ||
Note 11 – Fair Value Measurements | ||
Note 12 – Variable Interest Entities | ||
Note 13 – Revenue | ||
Note 14 – Common Stock | ||
Note 15 – Stock-Based Compensation | ||
Note 16 – Employee Benefit Plans | ||
Note 17 – Income Taxes | ||
Note 18 – Subsequent Events | ||
PART II. OTHER INFORMATION | ||
◦ | State, federal and foreign legislative and regulatory initiatives, including costs of compliance with existing and future environmental requirements, including those related to climate change, as well as rulings that affect cost and investment recovery or have an impact on rate structures or market prices; |
◦ | The extent and timing of costs and liabilities to comply with federal and state laws, regulations and legal requirements related to coal ash remediation, including amounts for required closure of certain ash impoundments, are uncertain and difficult to estimate; |
◦ | The ability to recover eligible costs, including amounts associated with coal ash impoundment retirement obligations and costs related to significant weather events, and to earn an adequate return on investment through rate case proceedings and the regulatory process; |
◦ | The costs of decommissioning Crystal River Unit 3 and other nuclear facilities could prove to be more extensive than amounts estimated and all costs may not be fully recoverable through the regulatory process; |
◦ | 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 sustained downturns of the economy and the economic health of our service territories or variations in customer usage patterns, including energy efficiency efforts and use of alternative energy sources, such as self-generation and distributed generation technologies; |
◦ | Federal and state regulations, laws and other efforts designed to promote and expand the use of energy efficiency measures and distributed generation technologies, such as private solar and battery storage, in Duke Energy service territories could result in customers leaving the electric distribution system, excess generation resources as well as stranded costs; |
◦ | Advancements in technology; |
◦ | Additional competition in electric and natural gas markets and continued industry consolidation; |
◦ | The influence of weather and other natural phenomena on operations, including the economic, operational and other effects of severe storms, hurricanes, droughts, earthquakes and tornadoes, including extreme weather associated with climate change; |
◦ | The ability to successfully operate electric generating facilities and deliver electricity to customers including direct or indirect effects to the company resulting from an incident that affects the U.S. electric grid or generating resources; |
◦ | The ability to obtain the necessary permits and approvals and to complete necessary or desirable pipeline expansion or infrastructure projects in our natural gas business; |
◦ | Operational interruptions to our natural gas distribution and transmission activities; |
◦ | The availability of adequate interstate pipeline transportation capacity and natural gas supply; |
◦ | The impact on facilities and business from a terrorist attack, cybersecurity threats, data security breaches and other catastrophic events, such as fires, explosions, pandemic health events or other similar occurrences; |
◦ | The inherent risks associated with the operation of nuclear facilities, including environmental, health, safety, regulatory and financial risks, including the financial stability of third-party service providers; |
◦ | The timing and extent of changes in commodity prices and interest 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, interest rate fluctuations, compliance with debt covenants and conditions and general market and economic conditions; |
◦ | Credit ratings of the Duke Energy Registrants may be different from what is expected; |
◦ | Declines in the market prices of equity and fixed-income securities and resultant cash funding requirements for defined benefit pension plans, other post-retirement benefit plans and nuclear decommissioning trust funds; |
◦ | Construction and development risks associated with the completion of the Duke Energy Registrants’ capital investment projects, including risks related to financing, obtaining and complying with terms of permits, meeting construction budgets and schedules and satisfying operating and environmental performance standards, as well as the ability to recover costs from customers in a timely manner, or at all; |
◦ | Changes in rules for regional transmission organizations, including changes in rate designs and new and evolving capacity markets, and risks related to obligations created by the default of other participants; |
◦ | The ability to control operation and maintenance costs; |
◦ | The level of creditworthiness of counterparties to transactions; |
◦ | Employee workforce factors, including the potential inability to attract and retain key personnel; |
◦ | The ability of subsidiaries to pay dividends or distributions to Duke Energy Corporation holding company (the Parent); |
◦ | The performance of projects undertaken by our nonregulated businesses and the success of efforts to invest in and develop new opportunities; |
◦ | The effect of accounting pronouncements issued periodically by accounting standard-setting bodies; |
◦ | The impact of new U.S. tax legislation to our financial condition, results of operations or cash flows and our credit ratings; |
◦ | The impacts from potential impairments of goodwill or equity method investment carrying values; and |
◦ | The ability to implement our business strategy. |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
(in millions, except per-share amounts) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Operating Revenues | |||||||||||||||
Regulated electric | $ | 6,216 | $ | 6,091 | $ | 16,678 | $ | 16,122 | |||||||
Regulated natural gas | 230 | 247 | 1,221 | 1,168 | |||||||||||
Nonregulated electric and other | 182 | 144 | 507 | 476 | |||||||||||
Total operating revenues | 6,628 | 6,482 | 18,406 | 17,766 | |||||||||||
Operating Expenses | |||||||||||||||
Fuel used in electric generation and purchased power | 1,931 | 1,863 | 5,181 | 4,853 | |||||||||||
Cost of natural gas | 58 | 68 | 460 | 402 | |||||||||||
Operation, maintenance and other | 1,584 | 1,476 | 4,592 | 4,385 | |||||||||||
Depreciation and amortization | 1,039 | 900 | 2,979 | 2,594 | |||||||||||
Property and other taxes | 323 | 313 | 954 | 924 | |||||||||||
Impairment charges | 124 | 207 | 339 | 216 | |||||||||||
Total operating expenses | 5,059 | 4,827 | 14,505 | 13,374 | |||||||||||
Gains (Losses) on Sales of Other Assets and Other, net | 10 | 6 | (87 | ) | 24 | ||||||||||
Operating Income | 1,579 | 1,661 | 3,814 | 4,416 | |||||||||||
Other Income and Expenses | |||||||||||||||
Equity in earnings of unconsolidated affiliates | 37 | 36 | 49 | 101 | |||||||||||
Other income and expenses, net | 131 | 122 | 327 | 358 | |||||||||||
Total other income and expenses | 168 | 158 | 376 | 459 | |||||||||||
Interest Expense | 517 | 498 | 1,550 | 1,475 | |||||||||||
Income From Continuing Operations Before Income Taxes | 1,230 | 1,321 | 2,640 | 3,400 | |||||||||||
Income Tax Expense From Continuing Operations | 168 | 364 | 449 | 1,035 | |||||||||||
Income From Continuing Operations | 1,062 | 957 | 2,191 | 2,365 | |||||||||||
Income (Loss) From Discontinued Operations, net of tax | 4 | (2 | ) | (1 | ) | (4 | ) | ||||||||
Net Income | 1,066 | 955 | 2,190 | 2,361 | |||||||||||
Less: Net (Loss) Income Attributable to Noncontrolling Interests | (16 | ) | 1 | (12 | ) | 5 | |||||||||
Net Income Attributable to Duke Energy Corporation | $ | 1,082 | $ | 954 | $ | 2,202 | $ | 2,356 | |||||||
Earnings Per Share – Basic and Diluted | |||||||||||||||
Income from continuing operations attributable to Duke Energy Corporation common stockholders | |||||||||||||||
Basic | $ | 1.51 | $ | 1.36 | $ | 3.12 | $ | 3.37 | |||||||
Diluted | $ | 1.51 | $ | 1.36 | $ | 3.11 | $ | 3.37 | |||||||
Loss from discontinued operations attributable to Duke Energy Corporation common stockholders | |||||||||||||||
Basic | $ | — | $ | — | $ | — | $ | (0.01 | ) | ||||||
Diluted | $ | — | $ | — | $ | — | $ | (0.01 | ) | ||||||
Net income attributable to Duke Energy Corporation common stockholders | |||||||||||||||
Basic | $ | 1.51 | $ | 1.36 | $ | 3.12 | $ | 3.36 | |||||||
Diluted | $ | 1.51 | $ | 1.36 | $ | 3.11 | $ | 3.36 | |||||||
Weighted average shares outstanding | |||||||||||||||
Basic | 713 | 700 | 705 | 700 | |||||||||||
Diluted | 714 | 700 | 706 | 700 |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
(in millions) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Net Income | $ | 1,066 | $ | 955 | $ | 2,190 | $ | 2,361 | |||||||
Other Comprehensive Income, net of tax | |||||||||||||||
Pension and OPEB adjustments | 1 | — | 3 | 2 | |||||||||||
Net unrealized (losses) gains on cash flow hedges | (3 | ) | 2 | 10 | (2 | ) | |||||||||
Reclassification into earnings from cash flow hedges | 6 | (2 | ) | 5 | 3 | ||||||||||
Unrealized (losses) gains on available-for-sale securities | — | 2 | (5 | ) | 10 | ||||||||||
Other Comprehensive Income, net of tax | 4 | 2 | 13 | 13 | |||||||||||
Comprehensive Income | 1,070 | 957 | 2,203 | 2,374 | |||||||||||
Less: Comprehensive (Loss) Income Attributable to Noncontrolling Interests | (16 | ) | 1 | (12 | ) | 5 | |||||||||
Comprehensive Income Attributable to Duke Energy Corporation | $ | 1,086 | $ | 956 | $ | 2,215 | $ | 2,369 |
(in millions) | September 30, 2018 | December 31, 2017 | |||||
ASSETS | |||||||
Current Assets | |||||||
Cash and cash equivalents | $ | 303 | $ | 358 | |||
Receivables (net of allowance for doubtful accounts of $17 at 2018 and $14 at 2017) | 682 | 779 | |||||
Receivables of VIEs (net of allowance for doubtful accounts of $55 at 2018 and $54 at 2017) | 2,397 | 1,995 | |||||
Inventory | 3,140 | 3,250 | |||||
Regulatory assets (includes $52 at 2018 and $51 at 2017 related to VIEs) | 1,906 | 1,437 | |||||
Other | 1,092 | 634 | |||||
Total current assets | 9,520 | 8,453 | |||||
Property, Plant and Equipment | |||||||
Cost | 132,677 | 127,507 | |||||
Accumulated depreciation and amortization | (43,200 | ) | (41,537 | ) | |||
Generation facilities to be retired, net | 388 | 421 | |||||
Net property, plant and equipment | 89,865 | 86,391 | |||||
Other Noncurrent Assets | |||||||
Goodwill | 19,303 | 19,396 | |||||
Regulatory assets (includes $1,055 at 2018 and $1,091 at 2017 related to VIEs) | 12,616 | 12,442 | |||||
Nuclear decommissioning trust funds | 7,421 | 7,097 | |||||
Investments in equity method unconsolidated affiliates | 1,328 | 1,175 | |||||
Other | 3,112 | 2,960 | |||||
Total other noncurrent assets | 43,780 | 43,070 | |||||
Total Assets | $ | 143,165 | $ | 137,914 | |||
LIABILITIES AND EQUITY | |||||||
Current Liabilities | |||||||
Accounts payable | $ | 3,234 | $ | 3,043 | |||
Notes payable and commercial paper | 2,891 | 2,163 | |||||
Taxes accrued | 674 | 551 | |||||
Interest accrued | 557 | 525 | |||||
Current maturities of long-term debt (includes $228 at 2018 and $225 at 2017 related to VIEs) | 3,455 | 3,244 | |||||
Asset retirement obligations | 902 | 689 | |||||
Regulatory liabilities | 506 | 402 | |||||
Other | 1,703 | 1,865 | |||||
Total current liabilities | 13,922 | 12,482 | |||||
Long-Term Debt (includes $4,015 at 2018 and $4,306 at 2017 related to VIEs) | 50,507 | 49,035 | |||||
Other Noncurrent Liabilities | |||||||
Deferred income taxes | 7,765 | 6,621 | |||||
Asset retirement obligations | 9,354 | 9,486 | |||||
Regulatory liabilities | 15,587 | 15,330 | |||||
Accrued pension and other post-retirement benefit costs | 1,001 | 1,103 | |||||
Investment tax credits | 539 | 539 | |||||
Other | 1,477 | 1,581 | |||||
Total other noncurrent liabilities | 35,723 | 34,660 | |||||
Commitments and Contingencies | |||||||
Equity | |||||||
Common stock, $0.001 par value, 2 billion shares authorized; 713 million shares outstanding at 2018 and 700 million shares outstanding at 2017 | 1 | 1 | |||||
Additional paid-in capital | 39,747 | 38,792 | |||||
Retained earnings | 3,313 | 3,013 | |||||
Accumulated other comprehensive loss | (66 | ) | (67 | ) | |||
Total Duke Energy Corporation stockholders' equity | 42,995 | 41,739 | |||||
Noncontrolling interests | 18 | (2 | ) | ||||
Total equity | 43,013 | 41,737 | |||||
Total Liabilities and Equity | $ | 143,165 | $ | 137,914 |
Nine Months Ended | |||||||
September 30, | |||||||
(in millions) | 2018 | 2017 | |||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||||
Net income | $ | 2,190 | $ | 2,361 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation, amortization and accretion (including amortization of nuclear fuel) | 3,447 | 2,990 | |||||
Equity component of AFUDC | (175 | ) | (175 | ) | |||
Losses (gains) on sales of other assets | 87 | (28 | ) | ||||
Impairment charges | 339 | 216 | |||||
Deferred income taxes | 1,099 | 1,016 | |||||
Equity in earnings of unconsolidated affiliates | (49 | ) | (101 | ) | |||
Accrued pension and other post-retirement benefit costs | 46 | 19 | |||||
Contributions to qualified pension plans | (141 | ) | (8 | ) | |||
Payments for asset retirement obligations | (389 | ) | (420 | ) | |||
Payment for disposal of other assets | (105 | ) | — | ||||
Other rate case adjustments | 37 | — | |||||
Provision for rate refunds | 375 | — | |||||
(Increase) decrease in | |||||||
Net realized and unrealized mark-to-market and hedging transactions | 15 | 4 | |||||
Receivables | (288 | ) | 80 | ||||
Inventory | 104 | 248 | |||||
Other current assets | (648 | ) | (210 | ) | |||
Increase (decrease) in | |||||||
Accounts payable | 389 | (554 | ) | ||||
Taxes accrued | 122 | 233 | |||||
Other current liabilities | (180 | ) | (532 | ) | |||
Other assets | (585 | ) | (159 | ) | |||
Other liabilities | (23 | ) | (2 | ) | |||
Net cash provided by operating activities | 5,667 | 4,978 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||
Capital expenditures | (6,752 | ) | (5,841 | ) | |||
Contributions to equity method investments | (298 | ) | (370 | ) | |||
Purchases of debt and equity securities | (2,763 | ) | (3,170 | ) | |||
Proceeds from sales and maturities of debt and equity securities | 2,718 | 3,199 | |||||
Other | (175 | ) | (149 | ) | |||
Net cash used in investing activities | (7,270 | ) | (6,331 | ) | |||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||
Proceeds from the: | |||||||
Issuance of long-term debt | 4,110 | 5,710 | |||||
Issuance of common stock | 834 | — | |||||
Payments for the redemption of long-term debt | (2,278 | ) | (2,035 | ) | |||
Proceeds from the issuance of short-term debt with original maturities greater than 90 days | 243 | 265 | |||||
Payments for the redemption of short-term debt with original maturities greater than 90 days | (207 | ) | (237 | ) | |||
Notes payable and commercial paper | 638 | (647 | ) | ||||
Dividends paid | (1,835 | ) | (1,825 | ) | |||
Other | 42 | 8 | |||||
Net cash provided by financing activities | 1,547 | 1,239 | |||||
Net decrease in cash, cash equivalents and restricted cash | (56 | ) | (114 | ) | |||
Cash, cash equivalents and restricted cash at beginning of period | 505 | 541 | |||||
Cash, cash equivalents and restricted cash at end of period | $ | 449 | $ | 427 | |||
Supplemental Disclosures: | |||||||
Significant non-cash transactions: | |||||||
Accrued capital expenditures | $ | 1,016 | $ | 740 | |||
Non-cash dividends | 79 | — |
Accumulated Other Comprehensive Income (Loss) | ||||||||||||||||||||||||||||||||||||||
Net Unrealized | Total | |||||||||||||||||||||||||||||||||||||
Net Gains | (Losses) Gains | Duke Energy | ||||||||||||||||||||||||||||||||||||
Common | Additional | (Losses) on | on Available- | Pension and | Corporation | |||||||||||||||||||||||||||||||||
Stock | Common | Paid-in | Retained | Cash Flow | for-Sale- | OPEB | Stockholders' | Noncontrolling | Total | |||||||||||||||||||||||||||||
(in millions) | Shares | Stock | Capital | Earnings | Hedges | Securities | Adjustments | Equity | Interests | Equity | ||||||||||||||||||||||||||||
Balance at December 31, 2016 | 700 | $ | 1 | $ | 38,741 | $ | 2,384 | $ | (20 | ) | $ | (1 | ) | $ | (72 | ) | $ | 41,033 | $ | 8 | $ | 41,041 | ||||||||||||||||
Net income | — | — | — | 2,356 | — | — | — | 2,356 | 5 | 2,361 | ||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | 1 | 10 | 2 | 13 | — | 13 | ||||||||||||||||||||||||||||
Common stock issuances, including dividend reinvestment and employee benefits | — | — | 33 | — | — | — | — | 33 | — | 33 | ||||||||||||||||||||||||||||
Common stock dividends | — | — | — | (1,825 | ) | — | — | — | (1,825 | ) | — | (1,825 | ) | |||||||||||||||||||||||||
Distributions to noncontrolling interest in subsidiaries | — | — | — | — | — | — | — | — | (2 | ) | (2 | ) | ||||||||||||||||||||||||||
Other(a) | — | — | — | 21 | — | — | — | 21 | — | 21 | ||||||||||||||||||||||||||||
Balance at September 30, 2017 | 700 | $ | 1 | $ | 38,774 | $ | 2,936 | $ | (19 | ) | $ | 9 | $ | (70 | ) | $ | 41,631 | $ | 11 | $ | 41,642 | |||||||||||||||||
Balance at December 31, 2017 | 700 | $ | 1 | $ | 38,792 | $ | 3,013 | $ | (10 | ) | $ | 12 | $ | (69 | ) | $ | 41,739 | $ | (2 | ) | $ | 41,737 | ||||||||||||||||
Net income (loss) | — | — | — | 2,202 | — | — | — | 2,202 | (12 | ) | 2,190 | |||||||||||||||||||||||||||
Other comprehensive income (loss) | — | — | — | — | 15 | (5 | ) | 3 | 13 | — | 13 | |||||||||||||||||||||||||||
Common stock issuances, including dividend reinvestment and employee benefits | 13 | — | 955 | — | — | — | — | 955 | — | 955 | ||||||||||||||||||||||||||||
Common stock dividends | — | — | — | (1,914 | ) | — | — | — | (1,914 | ) | — | (1,914 | ) | |||||||||||||||||||||||||
Distributions to noncontrolling interest in subsidiaries | — | — | — | — | — | — | — | — | (1 | ) | (1 | ) | ||||||||||||||||||||||||||
Other(b) | — | — | — | 12 | — | (12 | ) | — | — | 33 | 33 | |||||||||||||||||||||||||||
Balance at September 30, 2018 | 713 | $ | 1 | $ | 39,747 | $ | 3,313 | $ | 5 | $ | (5 | ) | $ | (66 | ) | $ | 42,995 | $ | 18 | $ | 43,013 |
(a) | Cumulative-effect adjustment due to implementation of a new accounting standard related to stock-based compensation and the associated income taxes. |
(b) | Amounts in Retained Earnings and Accumulated Other Comprehensive Loss represent a cumulative-effect adjustment due to implementation of a new accounting standard related to Financial Instruments Classification and Measurement. See Note 1 for more information. Amount in Noncontrolling Interests relates to tax equity financing activity in the Commercial Renewables segment. |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
(in millions) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Operating Revenues | $ | 2,090 | $ | 2,136 | $ | 5,525 | $ | 5,581 | |||||||
Operating Expenses | |||||||||||||||
Fuel used in electric generation and purchased power | 490 | 531 | 1,370 | 1,394 | |||||||||||
Operation, maintenance and other | 514 | 494 | 1,464 | 1,472 | |||||||||||
Depreciation and amortization | 305 | 281 | 866 | 804 | |||||||||||
Property and other taxes | 67 | 67 | 214 | 206 | |||||||||||
Impairment charges | 1 | — | 191 | — | |||||||||||
Total operating expenses | 1,377 | 1,373 | 4,105 | 3,876 | |||||||||||
Losses on Sales of Other Assets and Other, net | — | — | (1 | ) | — | ||||||||||
Operating Income | 713 | 763 | 1,419 | 1,705 | |||||||||||
Other Income and Expenses, net | 34 | 40 | 108 | 140 | |||||||||||
Interest Expense | 106 | 108 | 323 | 314 | |||||||||||
Income Before Income Taxes | 641 | 695 | 1,204 | 1,531 | |||||||||||
Income Tax Expense | 145 | 229 | 268 | 522 | |||||||||||
Net Income | $ | 496 | $ | 466 | $ | 936 | $ | 1,009 | |||||||
Other Comprehensive Income, net of tax | |||||||||||||||
Reclassification into earnings from cash flow hedges | — | — | 1 | 1 | |||||||||||
Comprehensive Income | $ | 496 | $ | 466 | $ | 937 | $ | 1,010 |
(in millions) | September 30, 2018 | December 31, 2017 | |||||
ASSETS | |||||||
Current Assets | |||||||
Cash and cash equivalents | $ | 27 | $ | 16 | |||
Receivables (net of allowance for doubtful accounts of $2 at 2018 and 2017) | 203 | 200 | |||||
Receivables of VIEs (net of allowance for doubtful accounts of $7 at 2018 and 2017) | 795 | 640 | |||||
Receivables from affiliated companies | 158 | 95 | |||||
Inventory | 976 | 971 | |||||
Regulatory assets | 435 | 299 | |||||
Other | 55 | 19 | |||||
Total current assets | 2,649 | 2,240 | |||||
Property, Plant and Equipment | |||||||
Cost | 44,086 | 42,939 | |||||
Accumulated depreciation and amortization | (15,536 | ) | (15,063 | ) | |||
Net property, plant and equipment | 28,550 | 27,876 | |||||
Other Noncurrent Assets | |||||||
Regulatory assets | 3,188 | 2,853 | |||||
Nuclear decommissioning trust funds | 3,943 | 3,772 | |||||
Other | 1,009 | 979 | |||||
Total other noncurrent assets | 8,140 | 7,604 | |||||
Total Assets | $ | 39,339 | $ | 37,720 | |||
LIABILITIES AND EQUITY | |||||||
Current Liabilities | |||||||
Accounts payable | $ | 888 | $ | 842 | |||
Accounts payable to affiliated companies | 142 | 209 | |||||
Notes payable to affiliated companies | 804 | 104 | |||||
Taxes accrued | 189 | 234 | |||||
Interest accrued | 141 | 108 | |||||
Current maturities of long-term debt | 506 | 1,205 | |||||
Asset retirement obligations | 292 | 337 | |||||
Regulatory liabilities | 144 | 126 | |||||
Other | 419 | 486 | |||||
Total current liabilities | 3,525 | 3,651 | |||||
Long-Term Debt | 9,589 | 8,598 | |||||
Long-Term Debt Payable to Affiliated Companies | 300 | 300 | |||||
Other Noncurrent Liabilities | |||||||
Deferred income taxes | 3,639 | 3,413 | |||||
Asset retirement obligations | 3,420 | 3,273 | |||||
Regulatory liabilities | 6,480 | 6,231 | |||||
Accrued pension and other post-retirement benefit costs | 97 | 95 | |||||
Investment tax credits | 233 | 232 | |||||
Other | 508 | 566 | |||||
Total other noncurrent liabilities | 14,377 | 13,810 | |||||
Commitments and Contingencies | |||||||
Equity | |||||||
Member's equity | 11,554 | 11,368 | |||||
Accumulated other comprehensive loss | (6 | ) | (7 | ) | |||
Total equity | 11,548 | 11,361 | |||||
Total Liabilities and Equity | $ | 39,339 | $ | 37,720 |
Nine Months Ended | |||||||
September 30, | |||||||
(in millions) | 2018 | 2017 | |||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||||
Net income | $ | 936 | $ | 1,009 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization (including amortization of nuclear fuel) | 1,084 | 1,051 | |||||
Equity component of AFUDC | (57 | ) | (79 | ) | |||
Losses on sales of other assets | 1 | — | |||||
Impairment charges | 191 | — | |||||
Deferred income taxes | 266 | 330 | |||||
Accrued pension and other post-retirement benefit costs | 3 | — | |||||
Contributions to qualified pension plans | (46 | ) | — | ||||
Payments for asset retirement obligations | (174 | ) | (201 | ) | |||
Provision for rate refunds | 163 | — | |||||
(Increase) decrease in | |||||||
Net realized and unrealized mark-to-market and hedging transactions | 2 | 1 | |||||
Receivables | (154 | ) | (40 | ) | |||
Receivables from affiliated companies | (63 | ) | 17 | ||||
Inventory | (11 | ) | 50 | ||||
Other current assets | (54 | ) | 8 | ||||
Increase (decrease) in | |||||||
Accounts payable | 69 | (78 | ) | ||||
Accounts payable to affiliated companies | (67 | ) | (88 | ) | |||
Taxes accrued | (47 | ) | 225 | ||||
Other current liabilities | (129 | ) | (149 | ) | |||
Other assets | 18 | (18 | ) | ||||
Other liabilities | (47 | ) | (26 | ) | |||
Net cash provided by operating activities | 1,884 | 2,012 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||
Capital expenditures | (2,006 | ) | (1,747 | ) | |||
Purchases of debt and equity securities | (1,386 | ) | (1,660 | ) | |||
Proceeds from sales and maturities of debt and equity securities | 1,386 | 1,664 | |||||
Notes receivable from affiliated companies | — | 66 | |||||
Other | (103 | ) | (58 | ) | |||
Net cash used in investing activities | (2,109 | ) | (1,735 | ) | |||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||
Proceeds from the issuance of long-term debt | 991 | — | |||||
Payments for the redemption of long-term debt | (704 | ) | (115 | ) | |||
Notes payable to affiliated companies | 700 | 468 | |||||
Distributions to parent | (750 | ) | (625 | ) | |||
Other | (1 | ) | (1 | ) | |||
Net cash provided by (used in) financing activities | 236 | (273 | ) | ||||
Net increase in cash and cash equivalents | 11 | 4 | |||||
Cash and cash equivalents at beginning of period | 16 | 14 | |||||
Cash and cash equivalents at end of period | $ | 27 | $ | 18 | |||
Supplemental Disclosures: | |||||||
Significant non-cash transactions: | |||||||
Accrued capital expenditures | $ | 299 | $ | 292 |
Accumulated Other | |||||||||||
Comprehensive | |||||||||||
Loss | |||||||||||
Net Losses on | |||||||||||
Member's | Cash Flow | Total | |||||||||
(in millions) | Equity | Hedges | Equity | ||||||||
Balance at December 31, 2016 | $ | 10,781 | $ | (9 | ) | $ | 10,772 | ||||
Net income | 1,009 | — | 1,009 | ||||||||
Other comprehensive income | — | 1 | 1 | ||||||||
Distributions to parent | (625 | ) | — | (625 | ) | ||||||
Other | (1 | ) | — | (1 | ) | ||||||
Balance at September 30, 2017 | $ | 11,164 | $ | (8 | ) | $ | 11,156 | ||||
Balance at December 31, 2017 | $ | 11,368 | $ | (7 | ) | $ | 11,361 | ||||
Net income | 936 | — | 936 | ||||||||
Other comprehensive income | — | 1 | 1 | ||||||||
Distributions to parent | (750 | ) | — | (750 | ) | ||||||
Balance at September 30, 2018 | $ | 11,554 | $ | (6 | ) | $ | 11,548 |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
(in millions) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Operating Revenues | $ | 3,045 | $ | 2,864 | $ | 8,119 | $ | 7,435 | |||||||
Operating Expenses | |||||||||||||||
Fuel used in electric generation and purchased power | 1,148 | 1,031 | 3,019 | 2,588 | |||||||||||
Operation, maintenance and other | 680 | 588 | 1,913 | 1,697 | |||||||||||
Depreciation and amortization | 419 | 334 | 1,183 | 958 | |||||||||||
Property and other taxes | 145 | 140 | 399 | 386 | |||||||||||
Impairment charges | 1 | 135 | 34 | 137 | |||||||||||
Total operating expenses | 2,393 | 2,228 | 6,548 | 5,766 | |||||||||||
Gains on Sales of Other Assets and Other, net | 11 | 5 | 23 | 19 | |||||||||||
Operating Income | 663 | 641 | 1,594 | 1,688 | |||||||||||
Other Income and Expenses, net | 51 | 36 | 128 | 112 | |||||||||||
Interest Expense | 214 | 193 | 626 | 595 | |||||||||||
Income Before Income Taxes | 500 | 484 | 1,096 | 1,205 | |||||||||||
Income Tax Expense | 94 | 141 | 186 | 384 | |||||||||||
Net Income | 406 | 343 | 910 | 821 | |||||||||||
Less: Net Income Attributable to Noncontrolling Interests | 2 | 2 | 6 | 7 | |||||||||||
Net Income Attributable to Parent | $ | 404 | $ | 341 | $ | 904 | $ | 814 | |||||||
Net Income | $ | 406 | $ | 343 | $ | 910 | $ | 821 | |||||||
Other Comprehensive Income, net of tax | |||||||||||||||
Pension and OPEB adjustments | — | 3 | 2 | 5 | |||||||||||
Net unrealized gains (losses) on cash flow hedges | 2 | (2 | ) | 5 | 4 | ||||||||||
Unrealized (losses) gains on available-for-sale securities | — | 1 | (1 | ) | 3 | ||||||||||
Other Comprehensive Income, net of tax | 2 | 2 | 6 | 12 | |||||||||||
Comprehensive Income | 408 | 345 | 916 | 833 | |||||||||||
Less: Comprehensive Income Attributable to Noncontrolling Interests | 2 | 2 | 6 | 7 | |||||||||||
Comprehensive Income Attributable to Parent | $ | 406 | $ | 343 | $ | 910 | $ | 826 |
(in millions) | September 30, 2018 | December 31, 2017 | |||||
ASSETS | |||||||
Current Assets | |||||||
Cash and cash equivalents | $ | 43 | $ | 40 | |||
Receivables (net of allowance for doubtful accounts of $5 at 2018 and $4 at 2017) | 131 | 123 | |||||
Receivables of VIEs (net of allowance for doubtful accounts of $8 at 2018 and $7 at 2017) | 1,098 | 780 | |||||
Receivables from affiliated companies | 15 | 31 | |||||
Notes receivable from affiliated companies | 445 | 240 | |||||
Inventory | 1,473 | 1,592 | |||||
Regulatory assets (includes $52 at 2018 and $51 at 2017 related to VIEs) | 1,122 | 741 | |||||
Other | 256 | 334 | |||||
Total current assets | 4,583 | 3,881 | |||||
Property, Plant and Equipment | |||||||
Cost | 49,822 | 47,323 | |||||
Accumulated depreciation and amortization | (16,652 | ) | (15,857 | ) | |||
Generation facilities to be retired, net | 388 | 421 | |||||
Net property, plant and equipment | 33,558 | 31,887 | |||||
Other Noncurrent Assets | |||||||
Goodwill | 3,655 | 3,655 | |||||
Regulatory assets (includes $1,055 at 2018 and $1,091 at 2017 related to VIEs) | 5,987 | 6,010 | |||||
Nuclear decommissioning trust funds | 3,477 | 3,324 | |||||
Other | 1,019 | 931 | |||||
Total other noncurrent assets | 14,138 | 13,920 | |||||
Total Assets | $ | 52,279 | $ | 49,688 | |||
LIABILITIES AND EQUITY | |||||||
Current Liabilities | |||||||
Accounts payable | $ | 1,301 | $ | 1,006 | |||
Accounts payable to affiliated companies | 327 | 251 | |||||
Notes payable to affiliated companies | 794 | 805 | |||||
Taxes accrued | 244 | 101 | |||||
Interest accrued | 228 | 212 | |||||
Current maturities of long-term debt (includes $53 at 2018 and 2017 related to VIEs) | 1,322 | 771 | |||||
Asset retirement obligations | 475 | 295 | |||||
Regulatory liabilities | 246 | 213 | |||||
Other | 672 | 729 | |||||
Total current liabilities | 5,609 | 4,383 | |||||
Long-Term Debt (includes $1,636 at 2018 and $1,689 at 2017 related to VIEs) | 17,440 | 16,916 | |||||
Long-Term Debt Payable to Affiliated Companies | 150 | 150 | |||||
Other Noncurrent Liabilities | |||||||
Deferred income taxes | 3,947 | 3,502 | |||||
Asset retirement obligations | 4,960 | 5,119 | |||||
Regulatory liabilities | 5,275 | 5,306 | |||||
Accrued pension and other post-retirement benefit costs | 513 | 545 | |||||
Other | 255 | 302 | |||||
Total other noncurrent liabilities | 14,950 | 14,774 | |||||
Commitments and Contingencies | |||||||
Equity | |||||||
Common stock, $0.01 par value, 100 shares authorized and outstanding at 2018 and 2017 | — | — | |||||
Additional paid-in capital | 9,143 | 9,143 | |||||
Retained earnings | 5,009 | 4,350 | |||||
Accumulated other comprehensive loss | (24 | ) | (25 | ) | |||
Total Progress Energy, Inc. stockholders' equity | 14,128 | 13,468 | |||||
Noncontrolling interests | 2 | (3 | ) | ||||
Total equity | 14,130 | 13,465 | |||||
Total Liabilities and Equity | $ | 52,279 | $ | 49,688 |
Nine Months Ended | |||||||
September 30, | |||||||
(in millions) | 2018 | 2017 | |||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||||
Net income | $ | 910 | $ | 821 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation, amortization and accretion (including amortization of nuclear fuel) | 1,458 | 1,130 | |||||
Equity component of AFUDC | (80 | ) | (68 | ) | |||
Gains on sales of other assets | (23 | ) | (20 | ) | |||
Impairment charges | 34 | 137 | |||||
Deferred income taxes | 342 | 651 | |||||
Accrued pension and other post-retirement benefit costs | 18 | (9 | ) | ||||
Contributions to qualified pension plans | (45 | ) | — | ||||
Payments for asset retirement obligations | (164 | ) | (190 | ) | |||
Other rate case adjustments | 37 | — | |||||
Provision for rate refunds | 101 | — | |||||
(Increase) decrease in | |||||||
Net realized and unrealized mark-to-market and hedging transactions | 14 | 1 | |||||
Receivables | (316 | ) | (182 | ) | |||
Receivables from affiliated companies | 16 | 102 | |||||
Inventory | 119 | 126 | |||||
Other current assets | (156 | ) | (312 | ) | |||
Increase (decrease) in | |||||||
Accounts payable | 427 | (281 | ) | ||||
Accounts payable to affiliated companies | 76 | (59 | ) | ||||
Taxes accrued | 143 | 143 | |||||
Other current liabilities | (28 | ) | (184 | ) | |||
Other assets | (668 | ) | (100 | ) | |||
Other liabilities | (34 | ) | (85 | ) | |||
Net cash provided by operating activities | 2,181 | 1,621 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||
Capital expenditures | (2,689 | ) | (2,419 | ) | |||
Purchases of debt and equity securities | (1,216 | ) | (1,393 | ) | |||
Proceeds from sales and maturities of debt and equity securities | 1,225 | 1,411 | |||||
Net proceeds from the sales of other assets | 20 | — | |||||
Notes receivable from affiliated companies | (205 | ) | (90 | ) | |||
Other | (142 | ) | (36 | ) | |||
Net cash used in investing activities | (3,007 | ) | (2,527 | ) | |||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||
Proceeds from the issuance of long-term debt | 1,785 | 1,720 | |||||
Payments for t |