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 Duke Energy reports fourth quarter and full-year 2016 financial results
   Thursday, February 16, 2017 7:00:00 AM ET

-- GAAP reported diluted earnings per share (EPS) were $3.11 in 2016, compared to $4.05 in 2015; adjusted diluted EPS was $4.69 for 2016 compared to $4.54 for 2015

-- Company achieves the high end of its 2016 adjusted diluted EPS guidance range

-- 2017 adjusted diluted EPS guidance range set at $4.50 to $4.70

-- Five-year growth capital plan increased by approximately 25 percent to $37 billion

Duke Energy today announced 2016 full-year reported diluted EPS, prepared in accordance with Generally Accepted Accounting Principles (GAAP) of $3.11, compared to $4.05 for the full-year 2015. Duke Energy’s full-year 2016 adjusted diluted EPS was $4.69, compared to $4.54 for full-year 2015.

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Adjusted diluted EPS excludes the impact of certain items included in GAAP reported diluted EPS. Amounts excluded from adjusted diluted EPS are primarily costs to achieve mergers, certain severance charges, asset impairments, a 2015 charge associated with the Edwardsport IGCC regulatory settlement, and the fourth quarter 2016 loss on sale of International Energy, primarily related to the recognition of cumulative currency translation adjustment losses.

Full-year 2016 adjusted results were driven by favorable weather, strong cost control and benefits from an early close of the Piedmont Natural Gas acquisition, which helped to offset significant storm costs and higher interest expense.

"2016 was a transformational year for Duke Energy as we acquired Piedmont Natural Gas and exited our International business, positioning the company for more consistent earnings and cash flow growth," said Lynn Good, Duke Energy chairman, president and CEO. "We continue to advance our long-term growth strategy to modernize the energy grid, generate cleaner energy and expand natural gas infrastructure. Our employees’ commitment to industry-leading operational and safety performance, combined with our unwavering focus on cost management, enabled us to achieve financial results at the high end of our guidance range.

"Our strategy is producing results. By investing in infrastructure our customers value and delivering sustainable growth for our investors, we are confident we will achieve strong results in 2017 and beyond," Good said.

Duke Energy reported a fourth quarter 2016 GAAP loss per share of 33 cents, compared to earnings per share of 69 cents for fourth quarter 2015 primarily related to the loss on the sale of International Energy. Fourth quarter 2016 adjusted diluted EPS was 81 cents, compared to 87 cents for fourth quarter 2015.

As expected, fourth quarter adjusted results were impacted by higher planned O&M expenses and higher interest expense, partially offset by Piedmont’s earnings contribution, net of financing costs.

The company has set its 2017 adjusted diluted EPS guidance range of $4.50 to $4.70, and extended its long-term adjusted diluted EPS growth rate of 4 to 6 percent to 2021. The growth rate is anchored to the midpoint of the 2017 adjusted diluted EPS guidance range, or $4.60 per share. The long-term growth rate is supported by an expanded $37 billion growth capital plan, representing an increase of approximately 25 percent from the previous five-year growth capital plan.

Business segment results

In addition to the following summary of fourth quarter 2016 business segment performance, comprehensive tables with detailed earnings per share drivers for the fourth quarter and full year 2016, compared to prior year, are provided on pages 15 and 16, respectively.

The discussion below of the fourth-quarter results includes both GAAP segment income and adjusted segment income, which is a non-GAAP financial measure. The tables on pages 24 through 27 present a reconciliation of GAAP reported results to adjusted results.

Due to the Piedmont acquisition and the sale of International Energy in the fourth quarter of 2016, Duke Energy’s segment structure has been realigned to include the following segments: Electric Utilities and Infrastructure, Gas Utilities and Infrastructure and Commercial Renewables. The remainder of Duke Energy’s operations is presented as Other. Other now includes the results of National Methanol Company (NMC), previously included in the International Energy segment, and the results of the Midwest Generation business that was sold in 2015, previously included in the former Commercial Portfolio segment.

Prior periods have been recast to conform to the current segment structure.

Electric Utilities and Infrastructure

On a reported basis, Electric Utilities and Infrastructure recognized fourth quarter 2016 segment income of $483 million, compared to $569 million in the fourth quarter of 2015.

On an adjusted basis, Electric Utilities and Infrastructure recognized fourth quarter 2016 adjusted segment income of $483 million, compared to $588 million in the fourth quarter of 2015. Adjusted diluted EPS was lower by $0.15 per share, excluding a $0.01 decrease due to the common stock issuance of 10.6 million shares used to fund a portion of the Piedmont acquisition.

Lower quarterly results at Electric Utilities and Infrastructure were primarily driven by:

-- Higher O&M expenses (-$0.08 per share), primarily due to higher planned spending

-- Higher effective tax rate (-$0.06 per share) resulting from a prior year benefit

-- Higher interest expense (-$0.03 per share) related to additional debt outstanding

-- Higher depreciation and amortization (-$0.03 per share) from additional plant in service

These unfavorable drivers were partially offset by:

-- Favorable weather (+$0.03 per share), net of estimated volume impacts of Hurricane Matthew (-$0.02 cents per share)

-- Higher AFUDC equity (+$0.02 per share) due to increased capital investments

Gas Utilities and Infrastructure

Gas Utilities and Infrastructure recognized fourth quarter 2016 reported and adjusted segment income of $89 million, compared to $14 million in the fourth quarter of 2015, an increase of $0.11 per share.

Higher quarterly results at Gas Utilities and Infrastructure were primarily driven by:

-- Contribution from Piedmont Natural Gas (+$0.10 per share), subsequent to the acquisition in October 2016 and before share dilution and debt financing costs which are included in Other

-- Higher earnings from midstream pipeline investments (+$0.01 per share), primarily the Atlantic Coast Pipeline

Commercial Renewables

On a reported basis, Commercial Renewables recognized fourth quarter 2016 segment income of $10 million, compared to $17 million in the fourth quarter of 2015.

On an adjusted basis, Commercial Renewables recognized fourth quarter 2016 adjusted segment income of $10 million, compared to $19 million in the fourth quarter 2015, a decrease of $0.01 per share.

Lower quarterly results at Commercial Renewables were primarily driven by lower investment tax credits due to lower solar investments, partially offset by higher production tax credits from additional wind facilities placed in service.

Other

Other primarily includes corporate interest expense not allocated to the business units, results from Duke Energy’s captive insurance company, and other investments including National Methanol Company, an equity method investment, and the results of the Midwest Generation business that was sold in 2015, previously included in the former Commercial Portfolio segment.

On a reported basis, Other recognized fourth quarter 2016 net expense of $209 million, compared to net expense of $170 million in the fourth quarter of 2015. In addition to the drivers outlined below, quarterly results were impacted by higher costs to achieve mergers, partially offset by lower charges related to cost savings initiatives. These charges were treated as special items and therefore excluded from adjusted earnings.

On an adjusted basis, Other recognized fourth quarter 2016 adjusted net expense of $57 million, compared to adjusted net expense of $75 million in the fourth quarter of 2015, an improvement of $0.02 per share. The decreased net expense was primarily driven by a change in effective tax rate due to an unfavorable tax adjustment in the prior year (+$0.07 per share) partially offset by higher interest expense in 2016 (-$0.03 per share) primarily resulting from the Piedmont Natural Gas acquisition financing.

Duke Energy’s consolidated reported effective tax rate for fourth quarter 2016 was 26.6 percent, compared to 29.2 percent in the fourth quarter of 2015. The consolidated adjusted effective tax rate for fourth quarter 2016 was 30.4 percent, compared to 31.4 percent in 2015. Adjusted effective tax rate is a non-GAAP financial measure. The tables on pages 28 and 29 present a reconciliation of the GAAP reported effective tax rate to the adjusted effective tax rate.

Discontinued Operations

For the fourth quarter of 2016, Duke Energy’s GAAP reported Loss From Discontinued Operations, net of tax includes a loss on the sale of the International business and other transaction-related costs, partially offset by the operating results of the International business prior to the sale of $40 million. The operating results of $40 million were included in Duke Energy’s adjusted earnings for the fourth quarter.

Earnings conference call for analysts

An earnings conference call for analysts is scheduled for 10 a.m. ET today. In addition to discussing the fourth quarter and year-end 2016 financial results, the company will provide its 2017 adjusted diluted earnings per share guidance range and other business and financial updates.

The conference call will be hosted by Lynn Good, chairman, president and chief executive officer, and Steve Young, executive vice president and chief financial officer.

The call can be accessed via the investors’ section (http://www.duke-energy.com/investors/) of Duke Energy’s website or by dialing 888-487-0354 in the United States or 719-457-2506 outside the United States. The confirmation code is 1359293. Please call in 10 to 15 minutes prior to the scheduled start time.

A replay of the conference call will be available until 1 p.m. ET, Feb. 24, 2017, by calling 888-203-1112 in the United States or 719-457-0820 outside the United States and using the code 1359293. An audio replay and transcript will also be available by accessing the investors’ section of the company’s website.

Special Items and Non-GAAP Reconciliation

The following tables present a reconciliation of GAAP reported to adjusted diluted EPS for fourth quarter and full-year 2016 and 2015 financial results:

(In millions, except per-share amounts) After-Tax                            4Q 2016                                 4Q 2015
                                        Amount                               EPS                                     EPS
Diluted EPS, as reported                                                     $                                (0.33) $                                0.69
Adjustments to reported EPS:
Fourth Quarter 2016
Costs to achieve mergers                $                                134 0.19
Cost saving initiatives                 18                                   0.03
Discontinued operations(a)              640                                  0.92
Fourth Quarter 2015
Costs to achieve mergers                18                                                                           0.03
Ash basin settlement                    7                                                                            0.01
Cost savings initiatives                88                                                                           0.13
Discontinued operations(b)              9                                                                            0.01
Total adjustments                                                            $                                1.14   $                                0.18
Diluted EPS, adjusted                                                        $                                0.81   $                                0.87
(a)  Includes a loss on sale of the International Disposal Group. Represents the GAAP reported Loss from Discontinued Operations less the International Disposal Group operating results, which are included in adjusted earnings.
(b)  Represents the GAAP reported Loss from Discontinued Operations less the International Disposal Group operating results, which are included in adjusted earnings.
(In millions, except per-share amounts)                             After-Tax     Full-Year      Full- Year
                                                                    Amount        2016 EPS       2015 EPS
Diluted EPS, as reported                                                          $         3.11 $          4.05
Adjustments to reported EPS:
Full-Year 2016
Costs to achieve mergers                                            $         329 0.48
Cost saving initiatives                                             57            0.08
Commercial Renewables impairment                                    45            0.07
Discontinued operations(a)                                          661           0.95
Full-Year 2015
Costs to achieve mergers                                            60                           0.09
Edwardsport settlement                                              58                           0.08
Ash basin settlement and penalties                                  11                           0.02
Cost savings initiatives                                            88                           0.13
Discontinued operations(b)                                          119                          0.17
Total adjustments                                                                 $         1.58 $          0.49
Diluted EPS, adjusted                                                             $         4.69 $          4.54
(a)  Includes a loss on sale of the International Disposal Group. Represents the GAAP reported Loss from Discontinued Operations, less the International Disposal Group operating results, which are included in adjusted earnings.
(b)  Includes the impact of a litigation reserve related to the Midwest Generation Disposal Group. Represents i) GAAP reported Income from Discontinued Operations, less the International Disposal Group operating results and Midwest Generation Disposal Group operating results, which are included in adjusted earnings, and ii) a state tax charge resulting from the completion of the sale of the Midwest Generation Disposal Group but not reported as discontinued operations.

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 attributable to Duke Energy, adjusted for the dollar and per-share impact of special items. As discussed below, special items include certain charges and credits, which management believes are not indicative of Duke Energy’s ongoing performance. Management believes the presentation of adjusted earnings and adjusted diluted EPS provides useful information to investors, as it provides them with 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 financial results to the Duke Energy Board of Directors, employees, stockholders, analysts and investors. 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 represent charges that result from potential or completed strategic acquisitions.

-- Cost savings initiatives represents severance charges related to company-wide initiatives to standardize processes and systems, leverage technology and workforce optimization.

-- Commercial Renewables Impairment and Asset impairment represent other-than-temporary impairments.

-- Edwardsport Settlement and Ash Basin Settlement and Penalties represent charges related to Plea Agreements and settlement agreements with regulators and other governmental entities.

Adjusted earnings also include the operating results of the nonregulated Midwest generation business and Duke Energy Retail Sales (collectively, the Midwest Generation Disposal Group) and the International Disposal Group, which have been classified as discontinued operations. Management believes inclusion of the operating results of the Disposal Groups within adjusted earnings and adjusted diluted EPS results is 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 and other net expense. Segment income is defined as income from continuing operations attributable to Duke Energy. Segment income includes intercompany revenues and expenses that are eliminated in the 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 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 or adjusted other net expense is segment income and other net expense.

Due to the forward-looking nature of any forecasted adjusted segment income or adjusted other net expense 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 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 companies may not calculate the measures in the same manner.

Duke Energy, one of the largest electric power holding companies in the United States, supplies and delivers electricity to approximately 7.4 million customers in the Southeast and Midwest, representing a population of approximately 24 million people. The company also distributes natural gas to more than 1.5 million customers in the Carolinas, Ohio, Kentucky and Tennessee. Its commercial business operates a growing renewable energy portfolio and transmission infrastructure across the United States.

Headquartered in Charlotte, N.C., Duke Energy is an S&P 100 Stock Index company traded on the New York Stock Exchange under the symbol DUK. More information about the company is available at duke-energy.com.

The Duke Energy News Center serves as a multimedia resource for journalists and features news releases, helpful links, photos and videos. Hosted by Duke Energy, illumination is an online destination for stories about remarkable people, innovations, and community and environmental topics. It also offers glimpses into the past and insights into the future of energy.

Follow Duke Energy on Twitter, LinkedIn, Instagram and Facebook.

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 and can often be identified by terms and phrases that include "anticipate," "believe," "intend," "estimate," "expect," "continue," "should," "could," "may," "plan," "project," "predict," "will," "potential," "forecast," "target," "guidance," "outlook" or other similar terminology. Various factors may cause actual results to be materially different than the suggested outcomes within forward-looking statements; accordingly, there is no assurance that such results will be realized. These factors 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 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 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; credit ratings of the company or its subsidiaries may be different from what is expected; 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 variations in customer usage patterns, including energy efficiency efforts and use of alternative energy sources, including 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 rooftop solar and battery storage, in our 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 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 complete necessary or desirable pipeline expansion or infrastructure projects in our natural gas business; operational interruptions to our 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 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, interest rate fluctuations and general economic conditions; the credit ratings may be different from what the company and its subsidiaries expect; 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 Duke Energy and its subsidiaries’ 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; substantial revision to the U.S. tax code, such as changes to the corporate tax rate or a material change in the deductibility of interest; the impact of potential goodwill impairments; the ability to successfully complete future merger, acquisition or divestiture plans; and the ability to successfully integrate the natural gas businesses following the acquisition of Piedmont Natural Gas Company, Inc. and realize anticipated benefits.

Additional risks and uncertainties are identified and discussed in Duke Energy’s and its subsidiaries’ reports filed with the SEC and available at the SEC’s website at www.sec.gov. 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 described. Forward-looking statements speak only as of the date they are made; Duke Energy expressly disclaims an obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Media Contact: Catherine Butler 24-Hour: 800.559.3853

Analysts: Mike Callahan Office: 704.382.0459

December 2016
QUARTERLY HIGHLIGHTS
(Unaudited)
                                                                              Three Months Ended                                          Years Ended
                                                                              December 31,                                                December 31,
(In millions, except per-share amounts and where noted)                       2016                          2015                          2016                          2015
Earnings Per Share - Basic and Diluted
Income from continuing operations attributable to Duke Energy Corporation
common stockholders
Basic                                                                         $             0.53            $             0.62            $             3.71            $             3.80
Diluted                                                                       $             0.53            $             0.62            $             3.71            $             3.80
(Loss) Income from discontinued operations attributable to Duke Energy
Corporation common stockholders
Basic                                                                         $             (0.86)          $             0.07            $             (0.60)          $             0.25
Diluted                                                                       $             (0.86)          $             0.07            $             (0.60)          $             0.25
Net (loss) income attributable to Duke Energy Corporation common stockholders
Basic                                                                         $             (0.33)          $             0.69            $             3.11            $             4.05
Diluted                                                                       $             (0.33)          $             0.69            $             3.11            $             4.05
Weighted average shares outstanding
Basic                                                                         699                           688                           691                           694
Diluted                                                                       699                           688                           691                           694
INCOME (LOSS) BY BUSINESS SEGMENT
Electric Utilities and Infrastructure(a)                                      $             483             $             569             $             3,040           $             2,819
Gas Utilities and Infrastructure(b)                                           89                            14                            152                           73
Commercial Renewables(c)                                                      10                            17                            23                            52
Total Reportable Segment Income                                               582                           600                           3,215                         2,944
Other(d)(e)(f)(g)                                                             (209)                         (170)                         (645)                         (299)
Intercompany Eliminations                                                     1                             --                            1                             --
(Loss) Income from Discontinued Operations, net of tax(h)                     (601)                         47                            (419)                         171
Net (Loss) Income Attributable to Duke Energy Corporation                     $             (227)           $             477             $             2,152           $             2,816
CAPITALIZATION
Total Common Equity (%)                                                                                                                   45%                           48%
Total Debt (%)                                                                                                                            55%                           52%
Total Debt                                                                                                                                $             50,382          $             42,501
Book Value Per Share                                                                                                                      $             58.63           $             57.78
Actual Shares Outstanding                                                                                                                 700                           688
CAPITAL AND INVESTMENT EXPENDITURES
Electric Utilities and Infrastructure(i)                                      $             2,070           $             1,721           $             6,649           $             6,852
Gas Utilities and Infrastructure(j)                                           5,242                         72                            5,519                         234
Commercial Renewables                                                         428                           343                           857                           1,019
Other(k)                                                                      124                           59                            190                           258
Total Capital and Investment Expenditures                                     $             7,864           $             2,195           $             13,215          $             8,363
Note: Prior period amounts have been restated to conform to the current segment structure.
(a) Includes a charge of $58 million (net of tax of $35 million) related to the Edwardsport settlement for the year ended December 31, 2015.
(b) Includes $67 million of Piedmont’s earnings for the three months and year ended December 31, 2016.
(c) Includes an impairment charge of $45 million (net of tax of $26 million) for the year ended December 31, 2016, related to certain equity method investments in wind projects.
(d) Includes costs to achieve mergers of $134 million (net of tax of $74 million) for the three months ended December 31, 2016, and $329 million (net of tax of $194 million) for the year ended December 31, 2016.
(e) Includes costs to achieve mergers of $60 million (net of tax of $37 million) for the year ended December 31, 2015.
(f) Includes a charge of $57 million (net of tax of $35 million) for the year ended December 31, 2016, primarily consisting of severance expense related to cost savings initiatives.
(g) Includes a charge of $77 million (net of tax of $47 million) for the three months and year ended December 31, 2015, primarily consisting of severance expense related to cost savings initiatives.
(h) Includes a loss on the sale of the International Disposal Group of $640 million (including tax charges of $126 million) for the three months and year ended December 31, 2016.
(i) Includes $1.25 billion related to the NCEMPA acquisition for the year ended December 31, 2015.
(j) Includes $5 billion related to the Piedmont acquisition for the three months and year ended December 31, 2016.
(k) Includes capital expenditures of the International Disposal Group prior to the sale.
December 2016
QUARTERLY HIGHLIGHTS
(Unaudited)
                                                      Three Months Ended          Years Ended
                                                      December 31,                December 31,
(In millions)                                         2016          2015          2016           2015
ELECTRIC UTILITIES AND INFRASTRUCTURE
Operating Revenues                                    $     4,936   $     4,851   $     21,366   $     21,521
Operating Expenses                                    3,950         3,818         15,821         16,295
(Loss) Gains on Sales of Other Assets and Other, net  (3)           2             --             5
Operating Income                                      983           1,035         5,545          5,231
Other Income and Expenses                             88            76            303            264
Interest Expense                                      307           263           1,136          1,074
Income Before Income Taxes                            764           848           4,712          4,421
Income Tax Expense                                    281           279           1,672          1,602
Segment Income                                        $     483     $     569     $     3,040    $     2,819
Depreciation and Amortization                         $     758     $     698     $     2,897    $     2,735
GAS UTILITIES AND INFRASTRUCTURE
Operating Revenues                                    $     543     $     122     $     901      $     541
Operating Expenses                                    379           93            636            408
(Loss) Gains on Sales of Other Assets and Other, net  (1)           (1)           (1)            6
Operating Income                                      163           28            264            139
Other Income and Expenses                             11            2             24             3
Interest Expense                                      27            6             46             25
Income Before Income Taxes                            147           24            242            117
Income Tax Expense                                    58            10            90             44
Segment Income                                        $     89      $     14      $     152      $     73
Depreciation and Amortization                         $     56      $     20      $     115      $     79
COMMERCIAL RENEWABLES
Operating Revenues                                    $     119     $     86      $     484      $     286
Operating Expenses                                    123           96            492            322
Gains (Loss) on Sales of Other Assets and Other, net  1             (5)           5              1
Operating Loss                                        (3)           (15)          (3)            (35)
Other Income and Expenses                             (5)           6             (83)           2
Interest Expense                                      15            11            53             44
Loss Before Income Taxes                              (23)          (20)          (139)          (77)
Income Tax Benefit                                    (33)          (36)          (160)          (128)
Less: Loss Attributable to Noncontrolling Interests   --            (1)           (2)            (1)
Segment Income                                        $     10      $     17      $     23       $     52
Depreciation and Amortization                         $     34      $     27      $     130      $     104
OTHER
Operating Revenues                                    $     26      $     45      $     117      $     135
Operating Expenses                                    287           206           604            409
Gains on Sales of Other Assets and Other, net         9             3             23             18
Operating Loss                                        (252)         (158)         (464)          (256)
Other Income and Expenses                             15            25            75             98
Interest Expense                                      140           108           693            393
Loss Before Income Taxes                              (377)         (241)         (1,082)        (551)
Income Tax Benefit                                    (170)         (74)          (446)          (262)
Less: Income Attributable to Noncontrolling Interests 2             3             9              10
Other Net Expense                                     $     (209)   $     (170)   $     (645)    $     (299)
Depreciation and Amortization                         $     44      $     36      $     152      $     135
Note: Prior period amounts have been restated to conform to the current segment structure.
DUKE ENERGY CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In millions, except per-share amounts)
                                                                                                       Years Ended December 31,
                                                                                                       2016         2015         2014
Operating Revenues
Regulated electric                                                                                     $   21,221   $   21,379   $   21,550
Nonregulated electric and other                                                                        659          456          386
Regulated natural gas                                                                                  863          536          573
Total operating revenues                                                                               22,743       22,371       22,509
Operating Expenses
Fuel used in electric generation and purchased power                                                   6,625        7,355        7,732
Cost of natural gas                                                                                    265          141          185
Operation, maintenance and other                                                                       6,085        5,539        5,506
Depreciation and amortization                                                                          3,294        3,053        2,969
Property and other taxes                                                                               1,142        1,129        1,204
Impairment charges                                                                                     18           106          81
Total operating expenses                                                                               17,429       17,323       17,677
Gains on Sales of Other Assets and Other, net                                                          27           30           10
Operating Income                                                                                       5,341        5,078        4,842
Other Income and Expenses
Equity in earnings (losses) of unconsolidated affiliates                                               (15)         69           130
Other income and expenses, net                                                                         324          290          320
Total other income and expenses                                                                        309          359          450
Interest Expense                                                                                       1,916        1,527        1,529
Income From Continuing Operations Before Income Taxes                                                  3,734        3,910        3,763
Income Tax Expense from Continuing Operations                                                          1,156        1,256        1,225
Income From Continuing Operations                                                                      2,578        2,654        2,538
(Loss) Income From Discontinued Operations, net of tax                                                 (408)        177          (649)
Net Income                                                                                             2,170        2,831        1,889
Less: Net Income Attributable to Noncontrolling Interests                                              18           15           6
Net Income Attributable to Duke Energy Corporation                                                     $   2,152    $   2,816    $   1,883
Earnings Per Share - Basic and Diluted
Income from continuing operations attributable to Duke Energy Corporation common stockholders
Basic                                                                                                  $   3.71     $   3.80     $   3.58
Diluted                                                                                                $   3.71     $   3.80     $   3.58
(Loss) Income from discontinued operations attributable to Duke Energy Corporation common stockholders
Basic                                                                                                  $   (0.60)   $   0.25     $   (0.92)
Diluted                                                                                                $   (0.60)   $   0.25     $   (0.92)
Net income attributable to Duke Energy Corporation common stockholders
Basic                                                                                                  $   3.11     $   4.05     $   2.66
Diluted                                                                                                $   3.11     $   4.05     $   2.66
Weighted average shares outstanding
Basic                                                                                                  691          694          707
Diluted                                                                                                691          694          707
DUKE ENERGY CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in millions)                                                                                                                               December 31, 2016  December 31, 2015
ASSETS
Current Assets
Cash and cash equivalents                                                                                                                   $     392          $     383
Receivables (net of allowance for doubtful accounts of $14 at 2016 and $12 at 2015)                                                         751                515
Receivables of VIEs (net of allowance for doubtful accounts of $54 at 2016 and $53 at 2015)                                                 1,893              1,748
Inventory                                                                                                                                   3,522              3,746
Assets held for sale                                                                                                                        --                 746
Regulatory assets (includes $50 related to VIEs at 2016)                                                                                    1,023              877
Other                                                                                                                                       458                307
Total current assets                                                                                                                        8,039              8,322
Investments and Other Assets
Investments in equity method unconsolidated affiliates                                                                                      925                499
Nuclear decommissioning trust funds                                                                                                         6,205              5,825
Goodwill                                                                                                                                    19,425             16,072
Assets held for sale                                                                                                                        --                 2,413
Other                                                                                                                                       2,752              2,830
Total investments and other assets                                                                                                          29,307             27,639
Property, Plant and Equipment
Cost                                                                                                                                        121,397            109,967
Accumulated depreciation and amortization                                                                                                   (39,406)           (36,736)
Generation facilities to be retired, net                                                                                                    529                548
Net property, plant and equipment                                                                                                           82,520             73,779
Regulatory Assets and Deferred Debits
Regulatory assets (includes $1,142 related to VIEs at 2016)                                                                                 12,878             11,373
Other                                                                                                                                       17                 43
Total regulatory assets and deferred debits                                                                                                 12,895             11,416
Total Assets                                                                                                                                $     132,761      $     121,156
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable                                                                                                                            $     2,994        $     2,350
Notes payable and commercial paper                                                                                                          2,487              3,633
Taxes accrued                                                                                                                               384                289
Interest accrued                                                                                                                            503                412
Current maturities of long-term debt (includes $260 at 2016 and $125 at 2015 related to VIEs)                                               2,319              2,026
Liabilities associated with assets held for sale                                                                                            --                 279
Asset retirement obligations                                                                                                                411                --
Regulatory liabilities                                                                                                                      409                400
Other                                                                                                                                       2,044              2,011
Total current liabilities                                                                                                                   11,551             11,400
Long-Term Debt (includes $3,587 at 2016 and $2,197 at 2015 related to VIEs)                                                                 45,576             36,842
Deferred Credits and Other Liabilities
Deferred income taxes                                                                                                                       14,155             12,548
Investment tax credits                                                                                                                      493                472
Accrued pension and other post-retirement benefit costs                                                                                     1,111              1,088
Liabilities associated with assets held for sale                                                                                            --                 900
Asset retirement obligations                                                                                                                10,200             10,249
Regulatory liabilities                                                                                                                      6,881              6,255
Other                                                                                                                                       1,753              1,631
Total deferred credits and other liabilities                                                                                                34,593             33,143
Commitments and Contingencies
Equity
Common stock, $0.001 par value, 2 billion shares authorized; 700 million and 688 million shares outstanding at 2016 and 2015, respectively  1                  1
Additional paid-in capital                                                                                                                  38,741             37,968
Retained earnings                                                                                                                           2,384              2,564
Accumulated other comprehensive loss                                                                                                        (93)               (806)
Total Duke Energy Corporation stockholders’ equity                                                                                          41,033             39,727
Noncontrolling interests                                                                                                                    8                  44
Total equity                                                                                                                                41,041             39,771
Total Liabilities and Equity                                                                                                                $     132,761      $     121,156
DUKE ENERGY CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In millions)
                                                                                  Years Ended December 31,
                                                                                  2016         2015
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income                                                                        $    2,170   $    2,831
Adjustments to reconcile net income to net cash provided by operating activities  4,628        3,845
Net cash provided by operating activities                                         6,798        6,676
CASH FLOWS FROM INVESTING ACTIVITIES
Net cash used in investing activities                                             (11,533)     (5,277)
CASH FLOWS FROM FINANCING ACTIVITIES
Net cash provided by (used in) financing activities                               4,270        (2,578)
Changes in cash and cash equivalents included in assets held for sale             474          1,099
Net increase (decrease) in cash and cash equivalents                              9            (80)
Cash and cash equivalents at the beginning of period                              383          463
Cash and cash equivalents at end of period                                        $    392     $    383
DUKE ENERGY CORPORATION
EARNINGS VARIANCES
December 2016 QTD vs. Prior Year
($ per share)                                       Electric         Gas              Commercial       International    Other            Discontinued     Consolidated
                                                    Utilities and    Utilities and    Renewables       Energy                            Operations
                                                    Infrastructure   Infrastructure
2015 QTD Reported Earnings Per Share, Diluted       $      0.82      $      0.02      $      0.02      $      --        $      (0.24)    $      0.07      $      0.69
Costs to Achieve Mergers                            --               --               --               --               0.03             --               0.03
Ash Basin Settlement and Penalties                  0.01             --               --               --               --               --               0.01
Cost Savings Initiatives                            0.02             --               --               --               0.11             --               0.13
International Energy Operations                     --               --               --               0.08             --               (0.08)           --
Discontinued Operations                             --               --               --               --               --               0.01             0.01
2015 QTD Adjusted Earnings Per Share, Diluted       $      0.85      $      0.02      $      0.02      $      0.08      $      (0.10)    $      --        $      0.87
Change in share count                               (0.01)           --               --               --               --               --               (0.01)
Weather-related (a)                                 0.03             --               --               --               --               --               0.03
Volume                                              (0.01)           --               --               --               --               --               (0.01)
Pricing and Riders                                  (0.01)           --               --               --               --               --               (0.01)
Wholesale                                           (0.01)           --               --               --               --               --               (0.01)
Operations and maintenance, net of recoverables (b) (0.08)           0.01             --               --               --               --               (0.07)
Piedmont Natural Gas contribution                   --               0.10             --               --               --               --               0.10
Commercial Gas Pipelines                            --               0.01             --               --               --               --               0.01
Duke Energy Renewables                              --               --               (0.01)           --               --               --               (0.01)
Other (c)                                           0.02             --               --               --               (0.02)           --               --
Interest Expense                                    (0.03)           --               --               --               (0.03)           --               (0.06)
Change in effective income tax rate                 (0.06)           (0.01)           --               (0.01)           0.07             --               (0.01)
Latin America, including foreign exchange rates     --               --               --               (0.01)           --               --               (0.01)
2016 QTD Adjusted Earnings Per Share, Diluted       $      0.69      $      0.13      $      0.01      $      0.06      $      (0.08)    $      --        $      0.81
Costs to Achieve Mergers                            --               --               --               --               (0.19)           --               (0.19)
Cost Savings Initiatives                            --               --               --               --               (0.03)           --               (0.03)
International Energy Operations                     --               --               --               (0.06)           --               0.06             --
Discontinued Operations                             --               --               --               --               --               (0.92)           (0.92)
2016 QTD Reported Earnings Per Share, Diluted       $      0.69      $      0.13      $      0.01      $      --        $      (0.30)    $      (0.86)    $      (0.33)
Note 1: Prior period amounts have been restated to conform to the current segment structure. Results of NMC, previously included in the International Energy segment, are now within Other.
Note 2: Adjusted and Reported Earnings Per Share amounts by segment may not recompute from other published schedules due to rounding.
Note 3: Earnings Per Share amounts are calculated using the consolidated statutory income tax rate for all variance drivers except Duke Energy Renewables, which uses an effective tax rate.
(a) Weather-related amounts include estimated volume impacts of Hurricane Matthew.
(b) Primarily due to higher planned O&M spending, including costs related to employee benefits.
(c) Electric Utilities and Infrastructure includes higher AFUDC equity (+$0.02) and lower general taxes (+$0.03), partially offset by increased depreciation and amortization expense (-$0.03) due to higher depreciable base.
DUKE ENERGY CORPORATION
EARNINGS VARIANCES
December 2016 YTD vs. Prior Year
($ per share)                                       Electric               Gas                    Commercial             International          Other                           Discontinued     Consolidated
                                                    Utilities and          Utilities and          Renewables             Energy                                                 Operations
                                                    Infrastructure         Infrastructure
                                                                                                                                                Continuing     Midwest
                                                                   Generation             Generation             Generation             Generation             Generation
2015 YTD Reported Earnings Per Share, Diluted       $      4.06            $      0.11            $      0.08            $      --              $      (0.45)  $      --        $      0.25      $      4.05
Costs to Achieve Mergers                            --                     --                     --                     --                     0.09           --               --               0.09
Edwardsport Settlement                              0.08                   --                     --                     --                     --             --               --               0.08
Midwest Generation Operations                       --                     --                     --                     --                     --             0.14             (0.14)           --
Ash Basin Settlement and Penalties                  0.02                   --                     --                     --                     --             --               --               0.02
Cost Savings Initiatives                            0.01                   --                     --                     --                     0.12           --               --               0.13
International Energy Operations                     --                     --                     --                     0.22                   --             --               (0.22)           --
Discontinued Operations                             --                     --                     --                     --                     0.06           --               0.11             0.17
2015 YTD Adjusted Earnings Per Share, Diluted       $      4.17            $      0.11            $      0.08            $      0.22            $      (0.18)  $      0.14      $      --        $      4.54
Change in share count (a)                           0.02                   --                     --                     --                     --             --               --               0.02
Weather-related (b)                                 0.07                   --                     --                     --                     --             --               --               0.07
Volume                                              0.03                   --                     --                     --                     --             --               --               0.03
Pricing and Riders (c)                              0.14                   0.01                   --                     --                     --             --               --               0.15
Wholesale (d)                                       0.07                   --                     --                     --                     --             --               --               0.07
Operations and maintenance, net of recoverables (e) (0.02)                 --                     --                     --                     --             --               --               (0.02)
Piedmont Natural Gas contribution                   --                     0.10                   --                     --                     --             --               --               0.10
Commercial Gas Pipelines                            --                     0.02                   --                     --                     --             --               --               0.02
Duke Energy Renewables                              --                     --                     0.02                   --                     --             --               --               0.02
National Methanol Company (NMC)                     --                     --                     --                     --                     (0.05)         --               --               (0.05)
Other (f)                                           (0.08)                 (0.02)                 --                     --                     (0.03)         --               --               (0.13)
Interest Expense                                    (0.04)                 --                     --                     --                     (0.06)         --               --               (0.10)
Change in effective income tax rate                 0.04                   --                     --                     0.09                   (0.06)         --               --               0.07
Midwest Generation (g)                              --                     --                     --                     --                     --             (0.14)           --               (0.14)
Latin America, including foreign exchange rates     --                     --                     --                     0.04                   --             --               --               0.04
2016 YTD Adjusted Earnings Per Share, Diluted       $      4.40            $      0.22            $      0.10            $      0.35            $      (0.38)  $      --        $      --        $      4.69
Cost to Achieve Mergers                             --                     --                     --                     --                     (0.48)         --               --               (0.48)
Cost Savings Initiatives                            --                     --                     --                     --                     (0.08)         --               --               (0.08)
Commercial Renewables Impairment                    --                     --                     (0.07)                 --                     --             --               --               (0.07)
International Energy Operations                     --                     --                     --                     (0.35)                 --             --               0.35             --
Discontinued Operations                             --                     --                     --                     --                     --             --               (0.95)           (0.95)
2016 YTD Reported Earnings Per Share, Diluted       $      4.40            $      0.22            $      0.03            $      --              $      (0.94)  $      --        $      (0.60)    $      3.11
Note 1: Prior period amounts have been restated to conform to the current segment structure. Results of NMC, previously included in the International Energy segment, are now within Other.
Note 2: Adjusted and Reported Earnings Per Share amounts by segment may not recompute from other published schedules due to rounding.
Note 3: Earnings Per Share amounts are calculated using the consolidated statutory income tax rate for all variance drivers except Duke Energy Renewables, which uses an effective tax rate.
(a) Due to the prior year repurchase of common shares, partially offset by the issuance of shares in 2016 to partially fund the Piedmont acquisition. Weighted average diluted shares outstanding decreased from 694 million shares to 691 million shares.
(b) Weather-related amounts include estimated volume impacts of Hurricane Matthew.
(c) Primarily due to the NCEMPA rider (+$0.07) and higher energy efficiency recoveries in the Carolinas (+$0.05).
(d) Primarily due to the implementation of the 30-year contract with NCEMPA.
(e) Primarily due to increased storm restoration costs and costs related to the NCEMPA asset purchase, partially offset by strong cost control.
(f) Electric Utilities and Infrastructure includes increased depreciation and amortization expense (-$0.11) due to higher depreciable base, partially offset by higher AFUDC equity (+$0.03).
(g) Due to prior year earnings from the nonregulated Midwest generation business, which was sold in April 2015.
Electric Utilities and Infrastructure
Quarterly Highlights
December 2016
                                                                                              Three Months Ended December 31,                 Years Ended December 31,
                                                                                              2016        2015        %           % Inc.      2016        2015        %           % Inc.(Dec.)
                                                                                                                      Inc.(Dec.)  (Dec.)                              Inc.(Dec.)  Weather
                                                                                                                                  Weather                                         Normal (2)
                                                                                                                                  Normal (2)
GWh Sales (1)
                    Residential                                                               18,057      17,198      5.0%        --%         83,507      83,393      0.1%        0.7%
                    General Service                                                           18,473      18,243      1.3%        0.2%        77,764      77,367      0.5%        0.1%
                    Industrial                                                                12,748      12,827      (0.6%)      (1.0%)      51,895      52,197      (0.6%)      (0.6%)
                    Other Energy Sales                                                        144         147         (2.0%)                  579         597         (3.0%)
                    Unbilled Sales                                                            (328)       113         (390.3%)    n/a         750         (363)       306.6%      n/a
                    Total Retail Sales                                                        49,094      48,528      1.2%        (0.2%)      214,495     213,191     0.6%        0.2%
                    Special Sales                                                             9,251       9,524       (2.9%)                  43,034      38,075      13.0%
                    Total Consolidated Electric Sales - Electric Utilities and Infrastructure 58,345      58,052      0.5%                    257,529     251,266     2.5%
Average Number of Customers (Electric)
                    Residential                                                               6,481,081   6,394,280   1.4%                    6,450,046   6,362,549   1.4%
                    General Service                                                           966,777     955,880     1.1%                    962,629     952,483     1.1%
                    Industrial                                                                17,768      17,983      (1.2%)                  17,843      18,107      (1.5%)
                    Other Energy Sales                                                        23,177      23,119      0.3%                    23,132      23,049      0.4%
                    Total Regular Sales                                                       7,488,803   7,391,262   1.3%                    7,453,650   7,356,188   1.3%
                    Special Sales                                                             60          63          (4.8%)                  61          63          (3.2%)
                    Total Average Number of Customers - Electric Utilities and Infrastructure 7,488,863   7,391,325   1.3%                    7,453,711   7,356,251   1.3%
Sources of Electric Energy (GWh)
                    Generated - Net Output (3)
                    Coal                                                                      15,400      13,915      10.7%                   73,767      76,348      (3.4%)
                    Nuclear                                                                   18,375      18,541      (0.9%)                  74,160      71,121      4.3%
                    Hydro                                                                     153         996         (84.6%)                 1,655       2,021       (18.1%)
                    Oil and Natural Gas                                                       13,689      14,616      (6.3%)                  62,150      60,670      2.4%
                    Renewable Energy                                                          37          3           1,133.3%                195         13          1,400.0%
                    Total Generation (4)                                                      47,654      48,071      (0.9%)                  211,927     210,173     0.8%
                    Purchased Power and Net Interchange (5)                                   13,625      11,763      15.8%                   59,382      52,845      12.4%
                    Total Sources of Energy                                                   61,279      59,834      2.4%                    271,309     263,018     3.2%
                    Less: Line Loss and Other                                                 2,934       1,782       64.6%                   13,780      11,752      17.3%
                    Total GWh Sources                                                         58,345      58,052      0.5%                    257,529     251,266     2.5%
Owned MW Capacity (3)
                    Summer                                                                                                                    49,338      50,216
                    Winter                                                                                                                    52,515      53,484
Nuclear Capacity Factor (%) (6)                                                                                                               96          94
                    (1)  Except as indicated in footnote (2), represents non-weather normalized billed sales, with energy delivered but not yet billed (i.e., unbilled sales) reflected as a single amount and not allocated to the respective retail classes.
                    (2)  Represents weather normal total retail calendar sales (i.e., billed and unbilled sales).
                    (3)  Statistics reflect Duke Energy’s ownership share of jointly owned stations.
                    (4)  Generation by source is reported net of auxiliary power.
                    (5)  Purchased power includes renewable energy purchases.
                    (6)  Statistics reflect 100% of jointly owned stations.
Duke Energy Carolinas
Quarterly Highlights
Supplemental Electric Utilities and Infrastructure Information
December 2016
                                                                           Three Months Ended December 31,                 Years Ended December 31,
                                                                           2016        2015        %           % Inc.      2016        2015        %           % Inc.
                                                                                                   Inc.(Dec.)  (Dec.)                              Inc.(Dec.)  (Dec.)
                                                                                                               Weather                                         Weather
                                                                                                               Normal (2)                                      Normal (2)
GWh Sales (1)
                 Residential                                               5,884       5,471       7.5%                    27,939      27,916      0.1%
                 General Service                                           6,801       6,626       2.6%                    28,906      28,700      0.7%
                 Industrial                                                5,396       5,406       (0.2%)                  21,942      22,136      (0.9%)
                 Other Energy Sales                                        76          76          --%                     304         305         (0.3%)
                 Unbilled Sales                                            128         (21)        709.5%                  372         (539)       169.0%
                 Total Retail Sales                                        18,285      17,558      4.1%        (1.7%)      79,463      78,518      1.2%        (0.3%)
                 Special Sales                                             2,370       1,706       38.9%                   9,082       8,432       7.7%
                 Total Consolidated Electric Sales - Duke Energy Carolinas 20,655      19,264      7.2%                    88,545      86,950      1.8%
Average Number of Customers
                 Residential                                               2,159,930   2,128,724   1.5%                    2,148,432   2,117,482   1.5%
                 General Service                                           351,145     346,378     1.4%                    349,400     345,119     1.2%
                 Industrial                                                6,270       6,337       (1.1%)                  6,295       6,417       (1.9%)
                 Other Energy Sales                                        15,250      15,123      0.8%                    15,190      15,041      1.0%
                 Total Regular Sales                                       2,532,595   2,496,562   1.4%                    2,519,317   2,484,059   1.4%
                 Special Sales                                             23          24          (4.2%)                  24          25          (4.0%)
                 Total Average Number of Customers - Duke Energy Carolinas 2,532,618   2,496,586   1.4%                    2,519,341   2,484,084   1.4%
Sources of Electric Energy (GWh)
                 Generated - Net Output (3)
                 Coal                                                      5,551       3,769       47.3%                   25,607      25,896      (1.1%)
                 Nuclear                                                   11,417      10,903      4.7%                    44,826      45,013      (0.4%)
                 Hydro                                                     20          700         (97.1%)                 822         1,136       (27.6%)
                 Oil and Natural Gas                                       2,886       2,659       8.5%                    11,779      10,595      11.2%
                 Renewable Energy                                          3           3           --%                     13          13          --%
                 Total Generation (4)                                      19,877      18,034      10.2%                   83,047      82,653      0.5%
                 Purchased Power and Net Interchange (5)                   1,941       2,182       (11.0%)                 10,737      9,170       17.1%
                 Total Sources of Energy                                   21,818      20,216      7.9%                    93,784      91,823      2.1%
                 Less: Line Loss and Other                                 1,163       952         22.2%                   5,239       4,873       7.5%
                 Total GWh Sources                                         20,655      19,264      7.2%                    88,545      86,950      1.8%
Owned MW Capacity (3)
                 Summer                                                                                                    19,685      19,645
                 Winter                                                                                                    20,390      20,360
Nuclear Capacity Factor (%) (6)                                                                                            96          96
Heating and Cooling Degree Days
                 Actual
                 Heating Degree Days                                       1,047       813         28.8%                   2,908       2,922       (0.5%)
                 Cooling Degree Days                                       60          22          172.7%                  1,950       1,731       12.7%
                 Variance from Normal
                 Heating Degree Days                                       (18.1%)     (34.2%)     n/a                     (11.4%)     (7.6%)      n/a
                 Cooling Degree Days                                       71.4%       (46.3%)     n/a                     29.9%       8.4%        n/a
                 (1)  Except as indicated in footnote (2), represents non-weather normalized billed sales, with energy delivered but not yet billed (i.e., unbilled sales) reflected as a single amount and not allocated to the respective retail classes.
                 (2)  Represents weather normal total retail calendar sales (i.e., billed and unbilled sales).
                 (3)  Statistics reflect Duke Energy’s ownership share of jointly owned stations.
                 (4)  Generation by source is reported net of auxiliary power.
                 (5)  Purchased power includes renewable energy purchases.
                 (6)  Statistics reflect 100% of jointly owned stations.
Duke Energy Progress
Quarterly Highlights
Supplemental Electric Utilities and Infrastructure Information
December 2016
                                                                          Three Months Ended December 31,                 Years Ended December 31,
                                                                          2016        2015        %           % Inc.      2016        2015        %           % Inc.
                                                                                                  Inc.(Dec.)  (Dec.)                              Inc.(Dec.)  (Dec.)
                                                                                                              Weather                                         Weather
                                                                                                              Normal (2)                                      Normal (2)
GWh Sales (1)
                 Residential                                              3,683       3,407       8.1%                    17,686      17,954      (1.5%)
                 General Service                                          3,550       3,529       0.6%                    15,557      15,529      0.2
                 Industrial                                               2,482       2,498       (0.6%)                  10,274      10,288      (0.1%)
                 Other Energy Sales                                       21          25          (16.0%)                 89          106         (16.0%)
                 Unbilled Sales                                           164         50          228.0%                  262         (302)       186.8%
                 Total Retail Sales                                       9,900       9,509       4.1%        0.3%        43,868      43,575      0.7%        0.2%
                 Special Sales                                            5,138       5,372       (4.4%)                  25,181      21,306      18.2%
                 Total Consolidated Electric Sales - Duke Energy Progress 15,038      14,881      1.1%                    69,049      64,881      6.4%
Average Number of Customers
                 Residential                                              1,297,292   1,280,852   1.3%                    1,291,742   1,274,550   1.3%
                 General Service                                          229,936     227,233     1.2%                    229,007     226,099     1.3%
                 Industrial                                               4,115       4,174       (1.4%)                  4,136       4,209       (1.7%)
                 Other Energy Sales                                       1,498       1,648       (9.1%)                  1,537       1,677       (8.3%)
                 Total Regular Sales                                      1,532,841   1,513,907   1.3%                    1,526,422   1,506,535   1.3%
                 Special Sales                                            15          15          --%                     15          15          --%
                 Total Average Number of Customers - Duke Energy Progress 1,532,856   1,513,922   1.3%                    1,526,437   1,506,550   1.3%
Sources of Electric Energy (GWh)
                 Generated - Net Output (3)
                 Coal                                                     2,062       1,506       36.9%                   11,570      12,960      (10.7%)
                 Nuclear                                                  6,958       7,638       (8.9%)                  29,334      26,108      12.4%
                 Hydro                                                    41          193         (78.8%)                 490         582         (15.8%)
                 Oil and Natural Gas                                      4,679       5,020       (6.8%)                  22,716      22,203      2.3%
                 Renewable Energy                                         31          --          n/a                     177         --          n/a
                 Total Generation (4)                                     13,771      14,357      (4.1%)                  64,287      61,853      3.9%
                 Purchased Power and Net Interchange (5)                  1,990       1,022       94.7%                   7,381       5,649       30.7%
                 Total Sources of Energy                                  15,761      15,379      2.5%                    71,668      67,502      6.2%
                 Less: Line Loss and Other                                723         498         45.2%                   2,619       2,621       (0.1%)
                 Total GWh Sources                                        15,038      14,881      1.1%                    69,049      64,881      6.4%
Owned MW Capacity (3)
                 Summer                                                                                                   12,935      12,915
                 Winter                                                                                                   14,034      14,019
Nuclear Capacity Factor (%) (6)                                                                                           94          91
Heating and Cooling Degree Days
                 Actual
                 Heating Degree Days                                      1,013       650         55.8%                   2,706       2,654       2.0%
                 Cooling Degree Days                                      78          65          20.0%                   2,033       1,844       10.2%
                 Variance from Normal
                 Heating Degree Days                                      (11.7%)     (41.5%)     n/a                     (9.0%)      (7.8%)      n/a
                 Cooling Degree Days                                      39.3%       4.8%        n/a                     23.9%       5.8%        n/a
                 (1)  Except as indicated in footnote (2), represents non-weather normalized billed sales, with energy delivered but not yet billed (i.e., unbilled sales) reflected as a single amount and not allocated to the respective retail classes.
                 (2)  Represents weather normal total retail calendar sales (i.e., billed and unbilled sales).
                 (3)  Statistics reflect Duke Energy’s ownership share of jointly owned stations.
                 (4)  Generation by source is reported net of auxiliary power.
                 (5)  Purchased power includes renewable energy purchases.
                 (6)  Statistics reflect 100% of jointly owned stations.
Duke Energy Florida
Quarterly Highlights
Supplemental Electric Utilities and Infrastructure Information
December 2016
                                                                         Three Months Ended December 31,                 Years Ended December 31,
                                                                         2016        2015        %           % Inc.      2016        2015        %           % Inc.
                                                                                                 Inc.(Dec.)  (Dec.)                              Inc.(Dec.)  (Dec.)
                                                                                                             Weather                                         Weather
                                                                                                             Normal (2)                                      Normal (2)
GWh Sales (1)
                 Residential                                             4,612       4,732       (2.5%)                  20,265      19,932      1.7%
                 General Service                                         3,795       3,903       (2.8%)                  15,288      15,304      (0.1%)
                 Industrial                                              816         851         (4.1%)                  3,197       3,293       (2.9%)
                 Other Energy Sales                                      6           6           --%                     24          24          --%
                 Unbilled Sales                                          (755)       (463)       (63.1%)                 (257)       104         (347.1%)
                 Total Retail Sales                                      8,474       9,029       (6.1%)      (0.4%)      38,517      38,657      (0.4%)      0.8%
                 Special Sales                                           388         236         64.4%                   1,887       1,396       35.2%
                 Total Electric Sales - Duke Energy Florida              8,862       9,265       (4.3%)                  40,404      40,053      0.9%
Average Number of Customers
                 Residential                                             1,555,990   1,533,247   1.5%                    1,548,681   1,524,320   1.6%
                 General Service                                         196,708     194,265     1.3%                    195,728     193,437     1.2%
                 Industrial                                              2,157       2,227       (3.1%)                  2,177       2,244       (3.0%)
                 Other Energy Sales                                      1,528       1,534       (0.4%)                  1,532       1,537       (0.3%)
                 Total Regular Sales                                     1,756,383   1,731,273   1.5%                    1,748,118   1,721,538   1.5%
                 Special Sales                                           14          14          --%                     14          14          --%
                 Total Average Number of Customers - Duke Energy Florida 1,756,397   1,731,287   1.5%                    1,748,132   1,721,552   1.5%
Sources of Electric Energy (GWh)
                 Generated - Net Output (3)
                 Coal                                                    2,247       1,612       39.4%                   8,852       9,718       (8.9%)
                 Oil and Natural Gas                                     5,513       6,135       (10.1%)                 24,884      25,263      (1.5%)
                 Renewable Energy                                        3           --          n/a                     5           --          n/a
                 Total Generation (4)                                    7,763       7,747       0.2%                    33,741      34,981      (3.5%)
                 Purchased Power and Net Interchange (5)                 1,591       1,937       (17.9%)                 8,998       7,217       24.7%
                 Total Sources of Energy                                 9,354       9,684       (3.4%)                  42,739      42,198      1.3%
                 Less: Line Loss and Other                               492         419         17.4%                   2,335       2,145       8.9%
                 Total GWh Sources                                       8,862       9,265       (4.3%)                  40,404      40,053      0.9%
Owned MW Capacity (3)
                 Summer                                                                                                  8,839       9,101
                 Winter                                                                                                  9,732       10,070
Heating and Cooling Degree Days
                 Actual
                 Heating Degree Days                                     81          27          200.0%                  482         400         20.5%
                 Cooling Degree Days                                     572         765         (25.2%)                 3,481       3,742       (7.0%)
                 Variance from Normal
                 Heating Degree Days                                     (60.0%)     (86.2%)     n/a                     (19.8%)     (32.6%)     n/a
                 Cooling Degree Days                                     22.3%       65.2%       n/a                     10.1%       17.0%       n/a
                 (1)  Except as indicated in footnote (2), represents non-weather normalized billed sales, with energy delivered but not yet billed (i.e., unbilled sales) reflected as a single amount and not allocated to the respective retail classes.
                 (2)  Represents weather normal total retail calendar sales (i.e., billed and unbilled sales).
                 (3)  Statistics reflect Duke Energy’s ownership share of jointly owned stations.
                 (4)  Generation by source is reported net of auxiliary power.
                 (5)  Purchased power includes renewable energy purchases.
Duke Energy Ohio
Quarterly Highlights
Supplemental Electric Utilities and Infrastructure Information
December 2016
                                                                      Three Months Ended December 31,                 Years Ended December 31,
                                                                      2016        2015        %           % Inc.      2016        2015        %           % Inc.
                                                                                              Inc.(Dec.)  (Dec.)                              Inc.(Dec.)  (Dec.)
                                                                                                          Weather                                         Weather
                                                                                                          Normal (2)                                      Normal (2)
GWh Sales (1)
                 Residential                                          1,897       1,747       8.6%                    8,699       8,638       0.7%
                 General Service                                      2,307       2,231       3.4%                    9,633       9,512       1.3%
                 Industrial                                           1,467       1,481       (0.9%)                  5,945       5,988       (0.7%)
                 Other Energy Sales                                   27          27          --%                     109         109         --%
                 Unbilled Sales                                       67          (44)        252.3%                  203         (52)        490.4%
                 Total Retail Sales                                   5,765       5,442       5.9%        2.1%        24,589      24,195      1.6%        0.7%
                 Special Sales                                        281         299         (6.0%)                  574         1,244       (53.9%)
                 Total Electric Sales - Duke Energy Ohio              6,046       5,741       5.3%                    25,163      25,439      (1.1%)
Average Number of Customers
                 Residential                                          756,044     748,478     1.0%                    753,409     746,757     0.9%
                 General Service                                      87,931      87,298      0.7%                    87,625      87,227      0.5%
                 Industrial                                           2,507       2,530       (0.9%)                  2,514       2,530       (0.6%)
                 Other Energy Sales                                   3,274       3,231       1.3%                    3,258       3,220       1.2%
                 Total Regular Sales                                  849,756     841,537     1.0%                    846,806     839,734     0.8%
                 Special Sales                                        1           1           --%                     1           1           --%
                 Total Average Number of Customers - Duke Energy Ohio 849,757     841,538     1.0%                    846,807     839,735     0.8%
Sources of Electric Energy (GWh)
                 Generated - Net Output (3)
                 Coal                                                 1,017       949         7.2%                    3,667       4,402       (16.7%)
                 Oil and Natural Gas                                  4           10          (60.0%)                 32          53          (39.6%)
                 Total Generation (4)                                 1,021       959         6.5%                    3,699       4,455       (17.0%)
                 Purchased Power and Net Interchange (5)              5,507       4,934       11.6%                   23,648      22,280      6.1%
                 Total Sources of Energy                              6,528       5,893       10.8%                   27,347      26,735      2.3%
                 Less: Line Loss and Other                            482         152         217.1%                  2,184       1,296       68.5%
                 Total GWh Sources                                    6,046       5,741       5.3%                    25,163      25,439      (1.1%)
Owned MW Capacity (3)
                 Summer                                                                                               1,062       1,062
                 Winter                                                                                               1,164       1,164
Heating and Cooling Degree Days
                 Actual
                 Heating Degree Days                                  1,635       1,316       24.2%                   4,483       4,647       (3.5%)
                 Cooling Degree Days                                  55          15          266.7%                  1,400       1,109       26.2%
                 Variance from Normal
                 Heating Degree Days                                  (12.6%)     (28.0%)     n/a                     (9.9%)      (3.6%)      n/a
                 Cooling Degree Days                                  223.5%      (31.8%)     n/a                     28.0%       (7.9%)      n/a
                 (1)  Except as indicated in footnote (2), represents non-weather normalized billed sales, with energy delivered but not yet billed (i.e., unbilled sales) reflected as a single amount and not allocated to the respective retail classes.
                 (2)  Represents weather normal total retail calendar sales (i.e., billed and unbilled sales).
                 (3)  Statistics reflect Duke Energy’s ownership share of jointly owned stations.
                 (4)  Generation by source is reported net of auxiliary power.
                 (5)  Purchased power includes renewable energy purchases.
Duke Energy Indiana
Quarterly Highlights
Supplemental Electric Utilities and Infrastructure Information
December 2016
                                                                         Three Months Ended December 31,                 Years Ended December 31,
                                                                         2016        2015        %           % Inc.      2016        2015        %           % Inc.
                                                                                                 Inc.(Dec.)  (Dec.)                              Inc.(Dec.)  (Dec.)
                                                                                                             Weather                                         Weather
                                                                                                             Normal (2)                                      Normal (2)
GWh Sales (1)
                 Residential                                             1,981       1,841       7.6%                    8,918       8,953       (0.4%)
                 General Service                                         2,020       1,954       3.4%                    8,380       8,322       0.7%
                 Industrial                                              2,587       2,591       (0.2%)                  10,537      10,492      0.4%
                 Other Energy Sales                                      14          13          7.7%                    53          53          --%
                 Unbilled Sales                                          68          (9)         855.6%                  170         1           16,900.0%
                 Total Retail Sales                                      6,670       6,390       4.4%        1.4%        28,058      27,821      0.9%        --%
                 Special Sales                                           1,074       1,911       (43.8%)                 6,310       5,697       10.8%
                 Total Electric Sales - Duke Energy Indiana              7,744       8,301       (6.7%)                  34,368      33,518      2.5%
Average Number of Customers
                 Residential                                             711,825     702,979     1.3%                    707,782     699,440     1.2%
                 General Service                                         101,057     100,706     0.3%                    100,869     100,601     0.3%
                 Industrial                                              2,719       2,715       0.1%                    2,721       2,707       0.5%
                 Other Energy Sales                                      1,627       1,583       2.8%                    1,615       1,574       2.6%
                 Total Regular Sales                                     817,228     807,983     1.1%                    812,987     804,322     1.1%
                 Special Sales                                           7           9           (22.2%)                 7           8           (12.5%)
                 Total Average Number of Customers - Duke Energy Indiana 817,235     807,992     1.1%                    812,994     804,330     1.1%
Sources of Electric Energy (GWh)
                 Generated - Net Output (3)
                 Coal                                                    4,523       6,079       (25.6%)                 24,071      23,372      3.0%
                 Hydro                                                   92          103         (10.7%)                 343         303         13.2%
                 Oil and Natural Gas                                     607         792         (23.4%)                 2,739       2,556       7.2%
                 Total Generation (4)                                    5,222       6,974       (25.1%)                 27,153      26,231      3.5%
                 Purchased Power and Net Interchange (5)                 2,596       1,688       53.8%                   8,618       8,529       1.0%
                 Total Sources of Energy                                 7,818       8,662       (9.7%)                  35,771      34,760      2.9%
                 Less: Line Loss and Other                               74          361         (79.5%)                 1,403       1,242       13.0%
                 Total GWh Sources                                       7,744       8,301       (6.7%)                  34,368      33,518      2.5%
Owned MW Capacity (3)
                 Summer                                                                                                  6,817       7,493
                 Winter                                                                                                  7,195       7,871
Heating and Cooling Degree Days
                 Actual
                 Heating Degree Days                                     1,782       1,487       19.8%                   4,846       5,202       (6.8%)
                 Cooling Degree Days                                     40          6           566.7%                  1,348       1,076       25.3%
                 Variance from Normal
                 Heating Degree Days                                     (10.9%)     (24.0%)     n/a                     (9.3%)      0.8%        n/a
                 Cooling Degree Days                                     166.7%      (73.9%)     n/a                     24.5%       (10.7%)     n/a
                 (1)  Except as indicated in footnote (2), represents non-weather normalized billed sales, with energy delivered but not yet billed (i.e., unbilled sales) reflected as a single amount and not allocated to the respective retail classes.
                 (2)  Represents weather normal total retail calendar sales (i.e., billed and unbilled sales).
                 (3)  Statistics reflect Duke Energy’s ownership share of jointly owned stations.
                 (4)  Generation by source is reported net of auxiliary power.
                 (5)  Purchased power includes renewable energy purchases.
Gas Utilities and Infrastructure
Quarterly Highlights
December 2016
                                                                                  Three Months Ended December 31,                       Years Ended December 31,
                                                                                  2016              2015              %                 2016              2015              %
                                                                                                                      Inc.(Dec.)                                            Inc.(Dec.)
Total Sales
                            Piedmont Natural Gas Local Distribution Company (LDC) 120,908,508       112,854,663       7.1%              495,122,794       465,670,939       6.3%
                            throughput (dekatherms) (1) (2)
                            Duke Energy Midwest LDC throughput (MCF)              24,846,503        19,495,894        27.4%             81,870,489        84,523,814        (3.1%)
Average Number of Customers - Piedmont Natural Gas (1)
                            Residential                                           934,940           921,239           1.5%              934,523           919,482           1.6%
                            Commercial                                            99,354            98,562            0.8%              99,827            98,764            1.1%
                            Industrial                                            2,289             2,282             0.3%              2,294             2,297             (0.1%)
                            Power Generation                                      25                25                --%               25                25                --%
                            Total Average Number of Gas Customers - Piedmont      1,036,608         1,022,108         1.4%              1,036,669         1,020,568         1.6%
                            Natural Gas
Average Number of Customers - Duke Energy Midwest
                            Residential                                           478,761           475,254           0.7%              477,729           474,842           0.6%
                            Commercial                                            43,196            43,378            (0.4%)            43,124            43,253            (0.3%)
                            Industrial                                            1,609             1,627             (1.1%)            1,609             1,619             (0.6%)
                            Other Energy Sales                                    142               142               --%               144               142               1.4%
                            Total Average Number of Gas Customers - Duke Energy   523,708           520,401           0.6%              522,606           519,856           0.5%
                            Midwest
                            (1) Sales and customer data for Piedmont Natural Gas include amounts prior to the acquisition on October 3, 2016, for comparative purposes. Duke Energy’s consolidated financial results do not include Piedmont’s results of operations prior to the date of acquisition.
                            (2) Piedmont has a margin decoupling mechanism in North Carolina and weather normalization mechanisms in South Carolina and Tennessee that significantly eliminate the impact of throughput changes on earnings. Duke Energy Ohio’s rate design also serves to offset this impact.
Commercial Renewables
Quarterly Highlights
December 2016
                                            Three Months Ended December 31,  Years Ended December 31,
                                            2016     2015                    2016    2015
  Actual Renewable Plant Production, GWh    1,946    1,664                   7,565   5,577
  Net Proportional MW Capacity in Operation n/a      n/a                     2,892   1,943
DUKE ENERGY CORPORATION
REPORTED TO ADJUSTED EARNINGS RECONCILIATION
Three Months Ended December 31, 2016
(Dollars in millions, except per-share amounts)
                                                                  Special Items
                                                      Reported    Costs to   Cost          International   Discontinued   Total        Adjusted
                                                      Earnings    Achieve    Savings       Energy          Operations     Adjustments  Earnings
                                                                  Mergers    Initiatives   Operations
SEGMENT INCOME
Electric Utilities and Infrastructure                 $  483      $  --      $   --        $    --         $    --        $   --       $  483
Gas Utilities and Infrastructure                      89          --         --            --              --             --           89
Commercial Renewables                                 10          --         --            --              --             --           10
Total Reportable Segment Income                       582         --         --            --              --             --           582
International Energy                                  --          --         --            40            C --             40           40
Other                                                 (209)       134      A 18          B --              --             152          (57)
Intercompany Eliminations                             1           --         --            --              (1)            (1)          --
Discontinued Operations                               (601)       --         --            (40)          C 641          D 601          --
Net Income Attributable to Duke Energy Corporation    $  (227)    $  134     $   18        $    --         $    640       $   792      $  565
EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, DILUTED  $  (0.33)   $  0.19    $   0.03      $    --         $    0.92      $   1.14     $  0.81
A -                                 Net of $74 million tax benefit. $10 million recorded within Operating Revenues, $198 million recorded within Operating Expenses on the Consolidated Statements of Operations.
B -                                 Net of $11 million tax benefit. Primarily consists of severance costs recorded within Operation, maintenance and other on the Consolidated Statements of Operations.
C -                                 Net of $26 million tax expense. Operating results of the International Disposal Group, which exclude the loss and transaction-related costs described below, recorded within (Loss) Income from Discontinued Operations, net of tax on the Consolidated Statements of Operations.
D -                                 Recorded within (Loss) Income From Discontinued Operations, net of tax on the Consolidated Statements of Operations. Includes a loss on the sale of the International Disposal Group and other transaction-related costs.
Weighted Average Shares, Diluted (reported and adjusted) - 699 million
DUKE ENERGY CORPORATION
REPORTED TO ADJUSTED EARNINGS RECONCILIATION
Twelve Months Ended December 31, 2016
(Dollars in millions, except per-share amounts)
                                                                 Special Items
                                                      Reported   Costs to   Cost          Commercial  International   Discontinued   Total       Adjusted
                                                      Earnings   Achieve    Savings       Renewables  Energy          Operations     Adjustments Earnings
                                                                 Mergers    Initiatives   Impairment  Operations
SEGMENT INCOME
Electric Utilities and Infrastructure                 $  3,040   $  --      $   --        $   --      $    --         $    --        $   --      $  3,040
Gas Utilities and Infrastructure                      152        --         --            --          --              --             --          152
Commercial Renewables                                 23         --         --            45        C --              --             45          68
Total Reportable Segment Income                       3,215      --         --            45          --              --             45          3,260
International Energy                                  --         --         --            --          243           D --             243         243
Other                                                 (645)      329      A 57          B --          --              --             386         (259)
Intercompany Eliminations                             1          --         --            --          --              (1)            (1)         --
Discontinued Operations                               (419)      --         --            --          (243)         D 662          E 419         --
Net Income Attributable to Duke Energy Corporation    $  2,152   $  329     $   57        $   45      $    --         $    661       $   1,092   $  3,244
EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION, DILUTED  $  3.11    $  0.48    $   0.08      $   0.07    $    --         $    0.95      $   1.58    $  4.69
A -                                 Net of $194 million tax benefit. Includes $11 million recorded within Operating Revenues, $278 million recorded within Operating Expenses and $234 million recorded within Interest Expense on the Consolidated Statements of Operations. The interest expense primarily relates to losses on forward-starting interest rate swaps associated with the Piedmont acquisition financing.
B -                                 Net of $35 million tax benefit. Primarily consists of severance costs recorded within Operation, maintenance and other on the Consolidated Statements of Operations.
C -                                 Net of $26 million tax benefit. Other-than-temporary impairment included within Equity in earnings (losses) of unconsolidated affiliates on the Consolidated Statements of Operations.
D -                                 Net of $27 million tax expense. Operating results of the International Disposal Group, which exclude the loss and impairment described below and other miscellaneous transaction-related costs, recorded within (Loss) Income from Discontinued Operations, net of tax on the Consolidated Statements of Operations.
E -                                 Recorded within (Loss) Income From Discontinued Operations, net of tax on the Consolidated Statements of Operations. Includes a loss on the sale of the International Disposal Group, an impairment charge related to certain assets in Central America, and a tax benefit related to previously sold businesses.
Weighted Average Shares, Diluted (reported and adjusted) - 691 million
DUKE ENERGY CORPORATION
REPORTED TO ADJUSTED EARNINGS RECONCILIATION
Three Months Ended December 31, 2015
(Dollars in millions, except per-share amounts)
                                                 Special Items
                                       Reported  Costs to   Edwardsport   Ash Basin   Cost          International   Economic   Discontinued   Total        Adjusted
                                       Earnings  Achieve    Settlement    Settlement  Savings       Energy          Hedges     Operations     Adjustments  Earnings
                                                 Mergers                  and         Initiatives   Operations      (Mark-to-
                                                                          Penalties                                 Market)
SEGMENT INCOME
Electric Utilities and Infrastructure  $  569    $  --      $   2       B $   7     C $   10      D $    --         $   --     $    --        $   19       $  588
Gas Utilities and Infrastructure       14        --         --            --          --            --              --         --             --           14
Commercial Renewables                  17        --         --            --          1           E --              1        H --             2            19
Total Reportable Segment Income        600       --         2             7           11            --              1          --             21           621
International Energy                   --        --         --            --          --            56            G --         --             56           56
Other                                  (170)     18       A --            --          77          F --              --         --             95           (75)
Discontinued Operations                47        --         --            --          --            (56)          G --         9            I (47)         --
Net Income Attributable to Duke Energy $  477    $  18      $   2         $   7       $   88        $    --         $   1      $    9         $   125      $  602
Corporation
EPS ATTRIBUTABLE TO DUKE ENERGY        $  0.69   $  0.03    $   --        $   0.01    $   0.13      $    --         $   --     $    0.01      $   0.18     $  0.87
CORPORATION, DILUTED
A -                                       Net of $12 million tax benefit. Recorded within Operating Expenses on the Consolidated Statements of Operations.
B -                                       Net of $1 million tax benefit. $3 million recorded within Impairment charges on the Duke Energy Indiana Consolidated Statements of Operations.
C -                                       Recorded within Operation, maintenance and other on the Duke Energy Carolinas Consolidated Statements of Operations.
D -                                       Net of $6 million tax benefit. Primarily consists of severance costs recorded within Operation, maintenance and other on the Consolidated Statements of Operations. Includes $7 million at Duke Energy Carolinas, $4 million at Duke Energy Progress, $2 million at Duke Energy Florida, $1 million at Duke Energy Ohio and $2 million at Duke Energy Indiana.
E -                                       Net of $1 million tax benefit. Primarily consists of severance costs recorded within Operation, maintenance and other on the Consolidated Statements of Operations.
F -                                       Net of $47 million tax benefit. Primarily consists of severance costs recorded within Operation, maintenance and other on the Consolidated Statements of Operations.
G -                                       Net of $29 million tax expense. Operating results of the International Disposal Group classified as discontinued operations.
H -                                       Recorded within Operating Revenues on the Consolidated Statements of Operations.
I -                                       Recorded in Income (Loss) From Discontinued Operations, net of tax on the Consolidated Statements of Operations.
Weighted Average Shares Outstanding, Diluted (reported and adjusted) - 688 million
DUKE ENERGY CORPORATION
REPORTED TO ADJUSTED EARNINGS RECONCILIATION
Twelve Months Ended December 31, 2015
(Dollars in millions, except per-share amounts)
                                                              Special Items
                                                   Reported   Costs to   Edwardsport   Midwest      Ash Basin   Cost          International   Discontinued   Total        Adjusted
                                                   Earnings   Achieve    Settlement    Generation   Settlement  Savings       Energy          Operations     Adjustments  Earnings
                                                              Mergers                  Operations   and         Initiatives   Operations
                                                                                                    Penalties
SEGMENT INCOME
Electric Utilities and Infrastructure              $  2,819   $  --      $   58      B $   --       $   11    D $   10      E $    --         $    --        $   79       $  2,898
Gas Utilities and Infrastructure                   73         --         --            --           --          --            --              --             --           73
Commercial Renewables                              52         --         --            --           --          1           F --              --             1            53
Total Reportable Segment Income                    2,944      --         58            --           11          11            --              --             80           3,024
International Energy                               --         --         --            --           --          --            151           H --             151          151
Other                                              (299)      60       A --            98         C --          77          G --              41           I 276          (23)
Discontinued Operations                            171        --         --            (98)       C --          --            (151)         H 78           J (171)        --
Net Income Attributable to Duke Energy Corporation $  2,816   $  60      $   58        $   --       $   11      $   88        $    --         $    119       $   336      $  3,152
EPS ATTRIBUTABLE TO DUKE ENERGY CORPORATION,       $  4.05    $  0.09    $   0.08      $   --       $   0.02    $   0.13      $    --         $    0.17      $   0.49     $  4.54
DILUTED
A -                                       Net of $37 million tax benefit. $95 million recorded within Operating Expenses and $2 million recorded within Interest Expense on the Consolidated Statements of Operations.
B -                                       Net of $35 million tax benefit. $88 million recorded within Impairment charges and $5 million recorded within Other income and expenses, net on the Duke Energy Indiana Consolidated Statements of Operations.
C -                                       Net of $53 million tax expense. Operating results of the nonregulated Midwest generation business classified as discontinued operations, which exclude special items and economic hedges.
D -                                       Net of $3 million tax benefit. Recorded within Operation, maintenance and other on the Consolidated Statements of Operations. Includes $8 million and $6 million at Duke Energy Carolinas and Duke Energy Progress, respectively.
E -                                       Net of $6 million tax benefit. Primarily consists of severance costs recorded within Operation, maintenance and other on the Consolidated Statements of Operations. Includes $7 million at Duke Energy Carolinas, $4 million at Duke Energy Progress, $2 million at Duke Energy Florida, $1 million at Duke Energy Ohio and $2 million at Duke Energy Indiana.
F -                                       Net of $1 million tax benefit. Primarily consists of severance costs recorded within Operation, maintenance and other on the Consolidated Statements of Operations.
G -                                       Net of $47 million tax benefit. Primarily consists of severance costs recorded within Operation, maintenance and other on the Consolidated Statements of Operations.
H -                                       Net of $70 million tax expense. Operating results of the International Disposal Group classified as discontinued operations.
I -                                       State tax expense resulting from the completion of the sale of the nonregulated Midwest generation business.
J -                                       Recorded in Income (Loss) From Discontinued Operations, net of tax on the Consolidated Statements of Operations, and includes the impact of a litigation reserve related to the nonregulated Midwest generation business.
Weighted Average Shares Outstanding, Diluted (reported and adjusted) - 694 million
DUKE ENERGY CORPORATION
ADJUSTED EFFECTIVE TAX RECONCILIATION
Three Months and Year Ended December 31, 2016
(Dollars in Millions)
                                                                Three Months Ended                                   Year Ended
                                                                December 31, 2016                                    December 31, 2016
                                                                Balance                     Effective Tax Rate       Balance                                       Effective Tax Rate
Reported Income From Continuing Operations Before Income Taxes  $                     512                            $                     3,734
Costs to Achieve Mergers                                        208                                                  523
Cost Savings Initiatives                                        29                                                   92
Commercial Renewables Impairment                                --                                                   71
International Energy Operations                                 66                                                   270
Noncontrolling Interests                                        (2)                                                  (7)
Intercompany Eliminations                                       (1)                                                  (1)
Adjusted Pretax Income                                          $                     812                            $                     4,682
Reported Income Tax Expense From Continuing Operations          $                     136   26.6%                    $                     1,156                   31.0%
Costs to Achieve Mergers                                        74                                                   194
Cost Savings Initiatives                                        11                                                   35
Commercial Renewables Impairment                                --                                                   26
International Energy Operations                                 26                                                   27
Adjusted Tax Expense                                            $                     247   30.4%                 *  $                     1,438                   30.7%                 *
*Adjusted effective tax rate is a non-GAAP financial measure as the rate is calculated using pretax earnings and income tax expense, both adjusted for the impact of special items. The most directly comparable GAAP measure for adjusted effective tax rate is reported effective tax rate, which includes the impact of special items.
DUKE ENERGY CORPORATION
ADJUSTED EFFECTIVE TAX RECONCILIATION
Three Months and Year Ended December 31, 2015
(Dollars in Millions)
                                                                Three Months Ended                                   Year Ended
                                                                December 31, 2015                                    December 31, 2015
                                                                Balance                     Effective Tax Rate       Balance                                       Effective Tax Rate
Reported Income From Continuing Operations Before Income Taxes  $                     612                            $                     3,910
Costs to Achieve Mergers                                        30                                                   97
Edwardsport Settlement                                          3                                                    93
Midwest Generation Operations                                   --                                                   151
Ash Basin Settlement and Penalties                              7                                                    14
Cost Savings Initiatives                                        142                                                  142
International Energy Operations                                 85                                                   221
Economic Hedges (Mark-to-Market)                                1                                                    --
Noncontrolling Interests                                        (3)                                                  (9)
Adjusted Pretax Income                                          $                     877                            $                     4,619
Reported Income Tax Expense From Continuing Operations          $                     179   29.2%                    $                     1,256                   32.1%
Tax Adjustment Related to Midwest Generation Sale               --                                                   (41)
Costs to Achieve Mergers                                        12                                                   37
Edwardsport Settlement                                          1                                                    35
Midwest Generation Operations                                   --                                                   53
Ash Basin Settlement and Penalties                              --                                                   3
Cost Savings Initiatives                                        54                                                   54
International Energy Operations                                 29                                                   70
Adjusted Tax Expense                                            $                     275   31.4%                 *  $                     1,467                   31.8%                 *
*Adjusted effective tax rate is a non-GAAP financial measure as the rate is calculated using pretax earnings and income tax expense, both adjusted for the impact of special items. The most directly comparable GAAP measure for adjusted effective tax rate is reported effective tax rate, which includes the impact of special items.

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/duke-energy-reports-fourth-quarter-and-full-year-2016-financial-results-300408445.html

SOURCE Duke Energy

https://rt.prnewswire.com/rt.gif?NewsItemId=CL12765&Transmission_Id=201702160700PR_NEWS_USPR_____CL12765&DateId=20170216



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