Duke Energy(US:DUK)2024-11-07 16:01Financial Performance - Duke Energy reported GAAP EPS of $1.60 for Q3 2024, a slight increase from $1.59 in Q3 2023, while adjusted EPS decreased to $1.62 from $1.94 due to higher effective tax rates and storm costs [350]. - GAAP reported earnings for the three months ended September 30, 2024, were $1,226 million, with an EPS of $1.60, compared to $1,213 million and an EPS of $1.59 for the same period in 2023 [352]. - Adjusted earnings for the three months ended September 30, 2024, were $1,236 million, resulting in an adjusted EPS of $1.62, down from $1,487 million and an adjusted EPS of $1.94 in the prior year [352]. - For the nine months ended September 30, 2024, GAAP reported EPS increased to $4.17 from $2.27 in the same period of 2023, primarily due to higher impairments on the sale of the Commercial Renewables business in the prior year [354]. - Adjusted EPS for the nine months ended September 30, 2024, was $4.24, compared to $4.05 for the same period in 2023, driven by growth from rate increases and higher sales volumes [354]. - Operating revenues for the three months ended September 30, 2024, were $7,852 million, an increase of $137 million from $7,715 million in 2023 [358]. - Operating revenues for Duke Energy Carolinas increased by $1,256 million (20.4%) for the nine months ended September 30, 2024, compared to the same period in 2023 [369]. - Operating revenues for Duke Energy Progress increased by $494 million (10.2%) for the nine months ended September 30, 2024, compared to the same period in 2023 [380]. - Operating revenues for the nine months ended September 30, 2024, increased to $1,139 million, up from $1,119 million in 2023, representing a variance of $20 million [399]. Customer Impact and Service Reliability - Approximately 3.5 million customers were impacted by Hurricane Helene, marking the largest number of outages from a single event in Duke Energy's history [338]. - Duke Energy's ongoing investments in grid hardening and self-healing technologies aim to improve service reliability during severe weather events [338]. - The average number of customers for Duke Energy Carolinas increased by 2.2% for the nine months ended September 30, 2024 [370]. - The average number of customers increased by 1.6% compared to the prior year, indicating growth in the customer base [402]. - The average number of customers for Duke Energy Florida increased by 2.2% compared to the prior year [386]. Regulatory and Rate Cases - Duke Energy Carolinas filed a rate case in January 2024, the first since 2018, reflecting $1.5 billion in transmission and distribution investments, with new rates effective August 1, 2024 [340]. - Duke Energy Florida proposed a three-year rate plan starting January 2025, including $4.9 billion in investments to reduce outages and expand solar generation [340]. - Duke Energy Indiana filed a general rate case requesting a $492 million revenue increase, the first since 2019, to support grid reliability and meet environmental regulations [340]. - The company is pursuing cost recovery for storm-related expenditures through regulatory frameworks, focusing on balancing bill impacts for customers [338]. - Cost recovery for future expenditures will be pursued through the normal ratemaking process with federal and state utility commissions [416]. Environmental Initiatives and Challenges - Duke Energy's clean energy transition includes the launch of the PowerPair program, which enrolled over 1,300 customers in its first three months, offering incentives up to $9,000 for solar and battery installations [338]. - The company is actively participating in legal challenges to the EPA's 2024 CCR Rule, which expands regulatory requirements for coal ash management [342]. - EPA Rule 111 requires existing coal-fired power plants to reduce GHG emissions by 90% starting in 2032, impacting future generation investments [416]. - Duke Energy is participating in legal challenges to EPA Rule 111, which could materially impact the company [416]. - Duke Energy's Portfolio 3 is recommended for an orderly energy transition, aiming to exit coal by 2035 and enhance energy efficiency and demand response options [417]. Operating Expenses and Financial Metrics - Total operating expenses for the three months ended September 30, 2024, were $5,743 million, up from $5,678 million in the prior year, reflecting a $143 million increase in depreciation and amortization [358]. - Operating expenses for Duke Energy Carolinas increased by $858 million (18.5%) primarily due to higher claim reserves related to captive insurance and increased employee benefit obligations [369]. - Operating expenses increased by $211 million due to higher fuel used in electric generation and purchased power, partially offset by lower natural gas prices [383]. - Interest expense increased due to higher outstanding debt balances and interest rates across both Electric and Gas Utilities segments [360][361]. - Interest expenses increased across the board due to higher outstanding debt balances and interest rates [389]. Cash Flow and Capital Expenditures - Cash flows from operating activities increased to $8,951 million, up from $7,309 million in the prior year, reflecting a variance of $1,642 million [409]. - Capital, investment, and acquisition expenditures totaled $(9,199) million, a decrease of $141 million compared to $(9,340) million in 2023 [412]. - Net cash provided by financing activities was $990 million, down from $2,413 million in the previous year, a decrease of $1,423 million [414]. - Interest expense increased to $135 million, up from $120 million, primarily due to higher outstanding debt balances and interest rates [399]. Segment Performance - The segment loss for Gas Utilities and Infrastructure was $25 million for the three months ended September 30, 2024, compared to a profit of $15 million in the same period of 2023 [361]. - Operating income for Gas Utilities and Infrastructure decreased to $13 million from $33 million year-over-year, reflecting a $20 million decline [361]. - The nine-month results for Gas Utilities and Infrastructure showed a $32 million increase in operating revenues compared to the previous year, driven by various rate increases [363]. - Operating income for Duke Energy Florida increased by $71 million, reaching $1,336 million compared to $1,265 million in the prior year [390]. - Duke Energy Ohio's operating revenues increased by $16 million, driven by a $35 million increase in retail revenue riders and a $31 million increase from higher pricing in rate cases [393].