Duke Energy Profit Nearly Doubles

Posted: Updated:

Duke Energy Corp. (NYSE: DUK) is reporting a second quarter profit of more than $1 billion, compared to $594 million from the same period a year earlier. The utility is based in North Carolina and has approximately 790,000 electric customers in Indiana.

November 6, 2013

News Release

CHARLOTTE, N.C. - Duke Energy today announced third quarter 2013 adjusted diluted EPS of $1.46, compared to $1.47 for the third quarter of 2012. Reported diluted EPS for the third quarter 2013 was $1.42, compared to $0.85 for the same period last year.

Reported results include special items that are excluded from the company's adjusted diluted EPS results. In the company's regulated businesses, revised customer rates, increased weather-normalized retail volumes and wholesale net margins were partially offset by unfavorable weather and higher depreciation and amortization expense during the third quarter of 2013.

"Our third quarter results were supported by the constructive regulatory outcomes we achieved this year," said President and CEO Lynn Good. "As a result, we are narrowing our 2013 adjusted diluted EPS guidance range to $4.25 to $4.45.

"We have successfully achieved the near-term priorities we established a year ago and are well-positioned to deliver on our commitments to customers, communities and investors," she added. "Our ongoing focus is to deliver on the promises we made after our merger with Progress Energy - to leverage our scale in order to maximize the efficiency of our operational and financial performance."

BUSINESS UNIT RESULTS

The discussion below of third-quarter results includes adjusted segment income, which is a non-GAAP financial measure. The tables on pages 25 through 28 present a reconciliation of reported results to adjusted results.

U.S. Franchised Electric and Gas (USFE&G)

USFE&G recognized third-quarter 2013 adjusted segment income of $923 million, compared to $907 million in the third quarter 2012, an increase of $0.02 per share. USFE&G’s improved adjusted segment income was driven primarily by increased pricing and riders (+$0.16 per share) resulting from revised customer rates, as well as favorable retail volumes and wholesale net margins (+$0.07 per share).

These positive drivers were partially offset by unfavorable weather (-$0.11 per share), higher depreciation and amortization expense (-$0.06 per share) primarily resulting from reduced cost of removal amortization in Florida. Other unfavorable drivers included lower allowance for funds used during construction (AFUDC) equity (-$0.05 per share) primarily due to the completion of certain major capital projects.

International Energy

International Energy recognized third-quarter 2013 adjusted segment income of $116 million, compared to $103 million in the third quarter 2012, an increase of $0.02 per share.

International Energy’s improved quarterly earnings were primarily due to stronger results in Latin America (+$0.04 per share) due to higher pricing in Brazil and financial results from the Chilean operations acquired in 2012. This was partially offset by unfavorable foreign currency exchange rates (-$0.01 per share).

Commercial Power

Commercial Power recognized third-quarter 2013 adjusted segment income of $15 million, compared to $31 million in the third quarter 2012, a decrease of $0.02 per share.

Commercial Power’s lower results were primarily driven by weaker results from its renewables business (-$0.02 per share) and lower generation volumes from the Midwest gas generation fleet (-$0.01 per share).

These results were partially offset by higher generation margins from the Midwest coal generation fleet (+$0.01 per share).

Other

On an adjusted basis, Other primarily includes corporate interest expense not allocated

to the business units, results from Duke Energy’s captive insurance company, other investments, and income tax levelization adjustments.

Other recognized a third-quarter 2013 adjusted net expense of $22 million, compared to

$16 million in the third quarter 2012, a difference of $0.01 per share.

Share Dilution

On July 2, 2012, Duke Energy issued approximately 258 million shares of common stock in connection with the closing of the merger with Progress Energy, Inc. The full quarter impact of the issuance of these additional shares had a dilutive impact of $0.02 per share on the quarter-over-quarter adjusted diluted EPS results.

Source: Duke Energy Corp.