Duke Energy Reports First-Quarter 2009 Results
- First quarter 2009 adjusted diluted earnings per share (EPS) was
- Reported diluted EPS for first quarter 2009 was
- After first quarter, on track to achieve 2009 employee incentive target of
- Issued
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The quarter’s results were impacted primarily by two items – lower sales to the industrial customer class due to the continuing global recession, and increased operating and maintenance expense due to significant winter storms in the quarter.
“Despite the effects of the recession and storm-related expenses, our businesses remain fundamentally strong,” said
“With our strong balance sheet, we maintain access to the capital markets, as demonstrated by the issuance of
Mark-to-market impacts of economic hedges in the Commercial Power segment and special items affecting Duke Energy’s adjusted diluted EPS for the quarters include:
1Q2009 1Q2008
Pre-Tax Tax EPS EPS
(In millions, except per-share amounts) Amount Effect Impact Impact
First-quarter 2009
- Costs to Achieve, Cinergy Merger $(7) $3 -- --
- Charges related to Crescent Obligations $(33) $13 $(0.02) --
- Mark-to-market impact of economic hedges $11 $(4) $0.01 --
First-quarter 2008
- Costs to Achieve, Cinergy Merger $(11) $4 -- $(0.01)
- Mark-to-market impact of economic hedges $47 $(17) -- $0.03
- Total diluted EPS impact $(0.01) $0.02
Reconciliation of reported to adjusted diluted EPS for the quarters:
1Q2009 1Q2008
EPS EPS
Diluted EPS, as reported $0.27 $0.37
Adjustments to reported EPS:
- Diluted EPS impact of special items and mark-to-market
in Commercial Power $0.01 $(0.02)
Diluted EPS, adjusted $0.28 $0.35
BUSINESS UNIT RESULTS (ON A REPORTED BASIS)
U.S. Franchised Electric and Gas (USFE&G)
USFE&G reported first-quarter 2009 segment EBIT of
Results were adversely affected by increased costs caused primarily by significant winter storms in the Midwest and Southeast, and a decline in weather-adjusted sales volumes to our industrial customers.
Commercial Power
Commercial Power reported first-quarter 2009 segment EBIT from continuing operations of
Duke Energy International (DEI)
DEI reported first-quarter 2009 segment EBIT from continuing operations of
Other
Due to a change in Duke Energy’s reportable segments in 2008, Other now includes the results of Crescent, Duke Energy’s real estate joint-venture. Other also includes costs associated with corporate governance, costs-to-achieve the Cinergy merger and Duke Energy’s captive insurance company.
Other reported a first-quarter 2009 net expense from continuing operations of
INTEREST EXPENSE
Interest expense from continuing operations was
INCOME TAX EXPENSE
Income tax expense from continuing operations for first quarter 2009 was
NON-GAAP FINANCIAL MEASURES
The primary performance measure used by management to evaluate segment performance is segment EBIT from continuing operations, which at the segment level represents all profits from continuing operations (both operating and non-operating), including any equity in earnings of unconsolidated affiliates, before deducting interest and taxes, and is net of the non-controlling interest expense related to those profits. Management believes segment EBIT from continuing operations, which is the GAAP measure used to report segment results, is a good indicator of each segment’s operating performance as it represents the results of Duke Energy’s ownership interests in continuing operations without regard to financing methods or capital structures.
Duke Energy’s management uses adjusted diluted EPS, which is a non-GAAP financial measure as it represents diluted EPS from continuing operations attributable to Duke Energy Corporation common shareholders, adjusted for the per-share impact of special items and the mark-to-market impacts of economic hedges in the Commercial Power segment, as a measure to evaluate operations of the company.
Special items represent certain charges and credits, which management believes will not be recurring on a regular basis. Mark-to-market adjustments reflect the mark-to-market impact of derivative contracts, which is recognized in GAAP earnings immediately as such derivative contracts do not qualify for hedge accounting or regulatory accounting treatment, used in Duke Energy’s hedging of a portion of the economic value of its generation assets in the Commercial Power segment. The economic value of the generation assets is subject to fluctuations in fair value due to market price volatility of the input and output commodities (e.g. coal, power) and, as such, the economic hedging involves both purchases and sales of those input and output commodities related to the generation assets. Because the operations of the generation assets are accounted for under the accrual method, management believes that excluding the impact of mark-to-market changes of the economic hedge contracts from adjusted earnings until settlement better matches the financial impacts of the hedge contract with the portion of the economic value of the underlying hedged asset. Management believes that the presentation of adjusted diluted EPS provides useful information to investors, as it allows them to more accurately compare the company’s performance across periods. Adjusted diluted EPS is also used as a basis for employee incentive bonuses.
The most directly comparable GAAP measure for adjusted diluted EPS is reported diluted EPS from continuing operations attributable to Duke Energy Corporation common shareholders, which includes the impact of special items and the mark-to-market impacts of economic hedges in the Commercial Power segment.
Due to the forward-looking nature of adjusted diluted EPS for future periods, information to reconcile such 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 special items and the mark-to-market impacts of economic hedges in the Commercial Power segment for future periods.
Duke Energy also uses adjusted segment EBIT and Other net expenses (including adjusted equity earnings for Crescent Resources) as a measure of historical and anticipated future segment and Other performance. When used for future periods, adjusted segment EBIT and Other net expenses may also include any amounts that may be reported as discontinued operations or extraordinary items. Adjusted segment EBIT and Other net expenses are non-GAAP financial measures, as they represent reported segment EBIT and Other net expenses adjusted for special items and the mark-to-market impacts of economic hedges in the Commercial Power segment. Management believes that the presentation of adjusted segment EBIT and Other net expenses provides useful information to investors, as it allows them to more accurately compare a segment’s or Other’s ongoing performance across periods. The most directly comparable GAAP measure for adjusted segment EBIT or Other net expenses is reported segment EBIT or Other net expenses, which represents segment EBIT and Other net expenses from continuing operations, including any special items and the mark-to-market impacts of economic hedges in the Commercial Power segment. Due to the forward-looking nature of any forecasted adjusted segment EBIT or Other net expenses 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 special items, the mark-to-market impacts of economic hedges in the Commercial Power segment, or any amounts that may be reported as discontinued operations or extraordinary items for future periods.
Duke Energy is the third largest electric power holding company in
An earnings conference call for analysts is scheduled for
Forward-looking statement
This release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are based on management’s beliefs and assumptions. These forward-looking statements are identified by terms and phrases such as “anticipate,” “believe,” “intend,” “estimate,” “target,” “expect,” “continue,” “should,” “could,” “may,” “plan,” “project,” “predict,” “will,” “potential,” “forecast,” and similar expressions. Forward-looking statements involve risks and uncertainties that may cause actual results to be materially different from the results predicted. Factors that could cause actual results to differ materially from those indicated in any forward-looking statement include, but are not limited to: State, federal and foreign legislative and regulatory initiatives, including costs of compliance with existing and future environmental requirements; state, federal and foreign legislation and regulatory initiatives that affect cost and investment recovery, or have an impact on rate structures; costs and effects of legal and administrative proceedings, settlements, investigations and claims; industrial, commercial and residential growth in Duke Energy Corporation’s (Duke Energy) service territories; additional competition in electric markets and continued industry consolidation; political and regulatory uncertainty in other countries in which Duke Energy conducts business; the influence of weather and other natural phenomena on Duke Energy operations, including the economic, operational and other effects of hurricanes, droughts, ice storms and tornadoes; the timing and extent of changes in commodity prices, interest rates and foreign currency exchange rates; unscheduled generation outages, unusual maintenance or repairs and electric transmission system constraints; the results of financing efforts, including Duke Energy’s ability to obtain financing on favorable terms, which can be affected by various factors, including Duke Energy’s credit ratings and general economic conditions; declines in the market prices of equity securities and resultant cash funding requirements for Duke Energy’s defined benefit pension plans; the level of credit worthiness of counterparties to Duke Energy’s transactions; employee workforce factors, including the potential inability to attract and retain key personnel; growth in opportunities for Duke Energy’s business units, including the timing and success of efforts to develop domestic and international power and other projects; the performance of electric generation and of projects undertaken by Duke Energy’s non-regulated businesses; construction and development risks associated with the completion of Duke Energy’s capital investment projects in existing and new generation facilities, 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; the effect of accounting pronouncements issued periodically by accounting standard-setting bodies; and the ability to successfully complete merger, acquisition or divestiture plans. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than Duke Energy has described. Duke Energy undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
MEDIA CONTACT: Tom Shiel
Phone: (704) 382-2355
24-Hour: (704) 382-8333
ANALYST CONTACT: Bill Currens
Phone: (704) 382-1603
March 2009
QUARTERLY HIGHLIGHTS
(Unaudited)
Three Months Ended
March 31,
------------------
(In millions, except per-share amounts and where noted) 2009 2008
-------------------------------------------------------------------------
COMMON STOCK DATA
Income from continuing operations attributable to
Duke Energy Corporation common shareholders
Basic $0.27 $0.37
Diluted $0.27 $0.37
Income from discontinued operations attributable to
Duke Energy Corporation common shareholders
Basic $- $-
Diluted $- $-
Net income attributable to Duke Energy Corporation
common shareholders
Basic $0.27 $0.37
Diluted $0.27 $0.37
Dividends Per Share $0.23 $0.22
Weighted-Average Shares Outstanding
Basic 1,282 1,266
Diluted 1,283 1,268
-------------------------------------------------------------------------
INCOME
Operating Revenues $3,312 $3,337
====== ======
Total Reportable Segment EBIT 764 897
Other EBIT (90) (76)
Interest Expense (184) (182)
Interest Income and Other (a) 35 47
Income Tax Expense from Continuing Operations (179) (222)
Income from Discontinued Operations, net of tax 3 2
--- ---
Net Income 349 466
Less: Net Income Attributable to Non-Controlling
Interests 5 1
--- ---
Net Income Attributable to Duke Energy Corporation $344 $465
==== ====
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CAPITALIZATION
Total Common Equity 58% 64%
Total Debt 42% 36%
-------------------------------------------------------------------------
Total Debt $15,495 $12,102
Book Value Per Share $16.64 $17.09
Actual Shares Outstanding 1,285 1,264
-------------------------------------------------------------------------
CAPITAL AND INVESTMENT EXPENDITURES
U.S. Franchised Electric and Gas $710 $875
Commercial Power 154 114
International Energy 12 56
Other 30 44
--- ---
Total Capital and Investment Expenditures $906 $1,089
==== ======
-------------------------------------------------------------------------
EBIT BY BUSINESS SEGMENT
U.S. Franchised Electric and Gas $557 $637
Commercial Power 114 146
International Energy 93 114
--- ---
Total Reportable Segment EBIT 764 897
Other EBIT (90) (76)
Interest Expense (184) (182)
Interest Income and Other (a) 35 47
--- ---
Income From Continuing Operations Before Income
Taxes $525 $686
==== ====
-------------------------------------------------------------------------
(a) Other within Interest Income and Other includes foreign currency
transaction gains and losses, an adjustment to add back the non-
controlling interest component of reportable segment and Other EBIT
and additional non-controlling interest amounts not allocated to the
reportable segment and Other results.
March 2009
QUARTERLY HIGHLIGHTS
(Unaudited)
Three Months Ended
March 31,
------------------
(In millions, except where noted) 2009 2008
------------------------------------------------------------------------
U.S. FRANCHISED ELECTRIC AND GAS
Operating Revenues $2,508 $2,601
Operating Expenses 1,974 1,999
Gains on Sales of Other Assets and Other, net - 3
Other Income and Expenses, net 23 32
--- ---
EBIT $557 $637
---- ----
Depreciation and Amortization $322 $332
Duke Energy Carolinas GWh sales 20,430 22,055
Duke Energy Midwest GWh sales 14,552 16,276
Net Proportional MW Capacity in Operation 27,438 27,333
------------------------------------------------------------------------
COMMERCIAL POWER
Operating Revenues $537 $450
Operating Expenses 436 323
Gains on Sales of Other Assets and Other, net 5 14
Other Income and Expenses, net 8 5
--- ---
EBIT $114 $146
---- ----
Depreciation and Amortization $55 $43
Actual Plant Production, GWh 6,296 5,919
Net Proportional MW Capacity in Operation 7,920 7,550
------------------------------------------------------------------------
INTERNATIONAL ENERGY
Operating Revenues $255 $289
Operating Expenses 161 212
Other Income and Expenses, net 6 42
Expense Attributable to Non-Controlling Interests 7 5
--- ---
EBIT $93 $114
--- ----
Depreciation and Amortization $19 $21
Sales, GWh 4,658 4,244
Proportional MW Capacity in Operation 4,014 4,005
------------------------------------------------------------------------
OTHER
Operating Revenues $36 $21
Operating Expenses 88 94
Gains on Sales of Other Assets and Other, net 1 1
Other Income and Expenses, net (38) (5)
Expense (Benefit) Attributable to Non-Controlling
Interests 1 (1)
--- ---
EBIT $(90) $(76)
---- ----
Depreciation and Amortization $18 $17
------------------------------------------------------------------------
DUKE ENERGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In millions, except per-share amounts)
Three Months Ended
March 31,
------------------
2009 2008
------------------------------------------------------------------------
Operating Revenues $3,312 $3,337
Operating Expenses 2,637 2,604
Gains on Sales of Other Assets and Other, net 6 18
------------------------------------------------------------------------
Operating Income 681 751
------------------------------------------------------------------------
Other Income and Expenses, net 28 117
Interest Expense 184 182
------------------------------------------------------------------------
Income From Continuing Operations Before Income Taxes 525 686
Income Tax Expense from Continuing Operations 179 222
------------------------------------------------------------------------
Income From Continuing Operations 346 464
Income From Discontinued Operations, net of tax 3 2
------------------------------------------------------------------------
Net Income 349 466
------------------------------------------------------------------------
Less: Net Income Attributable to Non-
Controlling Interests 5 1
------------------------------------------------------------------------
Net Income Attributable to Duke Energy Corporation $344 $465
========================================================================
Earnings Per Share - Basic and Diluted
Income from continuing operations attributable to
Duke Energy Corporation common shareholders
Basic $0.27 $0.37
Diluted $0.27 $0.37
Income from discontinued operations
attributable to Duke Energy Corporation common
shareholders
Basic $- $-
Diluted $- $-
Net income attributable to Duke Energy
Corporation common shareholders
Basic $0.27 $0.37
Diluted $0.27 $0.37
Dividends per share $0.23 $0.22
Weighted-average shares outstanding
Basic 1,282 1,266
Diluted 1,283 1,268
DUKE ENERGY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions)
March 31, December 31,
2009 2008
------- -------
ASSETS
Current Assets $5,320 $5,273
Investments and Other Assets 9,808 10,020
Net Property, Plant and Equipment 34,505 34,036
Regulatory Assets and Deferred Debits 3,951 3,748
------- -------
Total Assets $53,584 $53,077
======= =======
LIABILITIES AND EQUITY
Current Liabilities $3,524 $4,345
Long-term Debt 14,569 13,250
Deferred Credits and Other Liabilities 14,109 14,331
Equity 21,382 21,151
------- -------
Total Liabilities and Equity $53,584 $53,077
======= =======
DUKE ENERGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In millions)
Three Months Ended
March 31,
2009 2008
------ ------
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $349 $466
Adjustments to reconcile net income to net cash
provided by operating activities (159) 546
------ ------
Net cash provided by operating activities 190 1,012
------ ------
CASH FLOWS FROM INVESTING ACTIVITIES
Net cash used in investing activities (894) (1,075)
------ ------
CASH FLOWS FROM FINANCING ACTIVITIES
Net cash provided by financing activities 919 27
------ ------
Net increase (decrease) in cash and cash equivalents 215 (36)
Cash and cash equivalents at beginning of period 986 678
------ ------
Cash and cash equivalents at end of period $1,201 $642
====== ======
Duke Energy Carolinas
Quarterly Highlights
Supplemental Franchised Electric Information
March 31, 2009
Three Months Ended
March 31,
---------
%
2009 2008 Inc.(Dec.)
---- ---- ----------
GWH Sales
Residential 7,858 7,499 4.8%
General Service 6,504 6,449 0.9%
Industrial - Textile 816 1,112 (26.6%)
Industrial - Other 3,644 4,375 (16.7%)
----- ----- -----
Total Industrial 4,460 5,487 (18.7%)
Other Energy Sales 72 71 1.4%
Regular Resale 156 425 (63.3%)
------ ------ ----
Total Regular Sales Billed 19,050 19,931 (4.4%)
Special Sales 1,763 2,524 (30.2%)
------ ------ ----
Total Electric Sales 20,813 22,455 (7.3%)
Unbilled Sales (383) (400) 4.3%
------ ------ ----
Total Consolidated Electric
Sales -Carolinas 20,430 22,055 (7.4%)
Average Number of
Customers
Residential 2,022,676 2,004,488 0.9%
General Service 330,790 330,482 0.1%
Industrial - Textile 657 679 (3.2%)
Industrial - Other 6,703 6,559 2.2%
----- ----- ---
Total Industrial 7,360 7,238 1.7%
Other Energy Sales 13,821 13,580 1.8%
Regular Resale 11 21 (47.6%)
-- -- -----
Total Regular Sales 2,374,658 2,355,809 0.8%
Special Sales 31 42 (26.2%)
-- -- -----
Total Avg Number of Customers -
Carolinas 2,374,689 2,355,851 0.8%
Heating and Cooling
Degree Days
Actual
Heating Degree Days 1,785 1,679 6.3%
Cooling Degree Days 7 2 250.0%
Variance from Normal
Heating Degree Days 5.5% (0.6%) n/a
Cooling Degree Days 0.0% (62.5%) n/a
Duke Energy - Midwest
Quarterly Highlights
Supplemental Franchised Electric Information
March 2009
Three Months Ended
March 31,
---------------------------
%
Inc.
2009 2008 (Dec.)
------ ------ ------
GWH Sales
Residential 5,478 5,502 (0.4%)
General Service 4,431 4,552 (2.7%)
Industrial 3,419 4,287 (20.2%)
Other Energy Sales 43 44 (2.3%)
------ ------ ----
Total Regular Electric Sales
Billed 13,371 14,385 (7.0%)
Special Sales 1,734 2,180 (20.5%)
------ ------ ----
Total Electric Sales Billed -
Midwest 15,105 16,565 (8.8%)
Unbilled Sales (553) (289) (91.3%)
------ ------ -----
Total Electric Sales - Midwest 14,552 16,276 (10.6%)
Average Number of
Customers
Residential 1,407,184 1,412,465 (0.4%)
General Service 184,711 184,834 (0.1%)
Industrial 5,533 5,618 (1.5%)
Other Energy 4,068 3,951 3.0%
--------- --------- ----
Total Regular Sales 1,601,496 1,606,868 (0.3%)
Special Sales 24 38 (36.8%)
------ ------ -----
Total Avg Number Electric Customers -
Midwest 1,601,520 1,606,906 (0.3%)
Heating and Cooling Degree
Days*
Actual
Heating Degree Days 2,141 2,285 (6.3%)
Cooling Degree Days - - 0.0%
Variance from Normal
Heating Degree Days 3.8% 10.0% n/a
Cooling Degree Days (100.0%) (100.0%) n/a
* Reflects HDD and CDD for Duke Energy - Indiana, Duke Energy - Ohio and
Duke Energy - Kentucky
DUKE ENERGY CORPORATION
ADJUSTED TO REPORTED EARNINGS RECONCILIATION
March 2008 Year-to-Date
(Dollars in millions, except per-share amounts)
Special Items
(Note 1)
-------------
Costs to Economic
Achieve, Hedges Discon- Total
Adjusted Cinergy (Mark-to- tinued Adjust- Reported
Earnings Merger Market)* Operations ments Earnings
-------- -------- --------- ---------- ------- --------
SEGMENT EARNINGS
BEFORE INTEREST
AND TAXES
FROM CONTINUING
OPERATIONS
U.S.
Franchised
Electric and
Gas $637 $- $- $- $- $637
Commercial
Power 99 - 47 B - 47 146
International
Energy 114 - - - - 114
-------- -------- --------- ---------- ------- --------
Total
reportable
segment
EBIT 850 - 47 - 47 897
Other (65) (11)A - - (11) (76)
-------- -------- --------- ---------- ------- --------
Total
reportable
segment and
other EBIT $785 $(11) $47 $- $36 $821
Interest
Expense (182) - - - - (182)
Interest
Income and
Other 47 - - - - 47
Income Taxes
from Continuing
Operations (209) 4 (17) - (13) (222)
Discontinued
Operations,
net of taxes - - - 2 C 2 2
Less: Net Income
attributable
to non-
controlling
interests 1 - - - - 1
-------- -------- --------- ---------- ------- --------
Net Income (Loss)
Attributable
to Duke Energy
Corporation $440 $(7) $30 $2 $25 $465
======== ======== ========= ========== ======= ========
EARNINGS PER
SHARE
ATTRIBUTABLE
TO DUKE ENERGY
CORPORATION,
BASIC $0.35 $(0.01) $0.03 $- $0.02 $0.37
======== ======== ========= ========== ======= ========
EARNINGS PER
SHARE
ATTRIBUTABLE
TO DUKE ENERGY
CORPORATION,
DILUTED $0.35 $(0.01) $0.03 $- $0.02 $0.37
======== ======== ========= ========== ======= ========
Note 1 - Amounts for special items are presented net of any related non-
controlling interest.
A - $7 million recorded in Operation, maintenance and other and $4 million
recorded in Depreciation and amortization (all Operating Expenses) on
the Consolidated Statements of Operations.
B - $11 million loss recorded within Non-regulated electric, natural gas,
and other (Operating Revenues) and $58 million gain recorded within
Fuel used in electric generation and purchased power-non-regulated
(Operating Expenses) on the Consolidated Statements of Operations.
C - Recorded in Income From Discontinued Operations, net of tax on the
Consolidated Statements of Operations.
Weighted Average Shares (reported and adjusted) - in millions
Basic 1,266
Diluted 1,268
* Represents the mark-to-market impact of derivative contracts, which is
recognized in earnings immediately as such derivative contracts do not
qualify for hedge accounting, used in Duke Energy's hedging of a portion
of the economic value of its generation assets in the Commercial Power
segment. The economic value of the generation assets is subject to
fluctuations in fair value due to market price volatility of the input
and output commodities (e.g. coal, power) and, as such, the economic
hedging involves both purchases and sales of those input and output
commodities related to the generation assets. Because the operations of
the generation assets are accounted for under the accrual method,
management believes that excluding the impact of mark-to-market changes
of the economic hedge contracts from adjusted earnings until settlement
better matches the financial impacts of the hedge contract with the
portion of the economic value of the underlying hedged asset. Management
believes that the presentation of adjusted diluted EPS Attributable to
Controlling Interest provides useful information to investors, as it
allows them to more accurately compare the company's performance across
periods.
DUKE ENERGY CORPORATION
ADJUSTED TO REPORTED EARNINGS RECONCILIATION
March 2009 Year-to-Date
(Dollars in millions, except per-share amounts)
Special Items (Note 1)
---------------------
Costs to Economic Discon-
Achieve, Crescent Hedges tinued Total
Adjusted Cinergy Related (Mark-to- Oper- Adjust- Reported
Earnings Merger Guarantees Market)* ations ments Earnings
-------- -------- ---------- -------- ------- ------ --------
SEGMENT
EARNINGS
BEFORE
INTEREST
AND TAXES
FROM
CONTINUING
OPERATIONS
U.S.
Franchised
Electric and
Gas $557 $- $- $- $- $- $557
Commercial
Power 103 - - 11 B - 11 114
International
Energy 93 - - - - - 93
-------- -------- ---------- -------- ------- ------ --------
Total
reportable
segment
EBIT 753 - - 11 - 11 764
Other (50) (7)A (33)D - - (40) (90)
-------- -------- ---------- -------- ------- ------ --------
Total
reportable
segment
and
Other
EBIT $703 $(7) $(33) $11 $- $(29) $674
Interest
Expense (184) - - - - - (184)
Interest
Income and
Other 35 - - - - - 35
Income Taxes
from
Continuing
Operations (191) 3 13 (4) - 12 (179)
Discontinued
Operations,
net of taxes - - - - 3 C 3 3
Less: Net
Income
Attributable
to Non-
Controlling
Interests 5 - - - - - 5
-------- -------- ---------- -------- ------- ------ --------
Net Income
(Loss)
Attributable
to Duke
Energy
Corporation $358 $(4) $(20) $7 $3 $(14) $344
======== ======== ========== ======== ======= ====== ========
EARNINGS PER
SHARE
ATTRIBUTABLE
TO DUKE
ENERGY
CORPORATION,
BASIC $0.28 $- $(0.02) $0.01 $- $(0.01) $0.27
======== ======== ========== ======== ======= ====== ========
EARNINGS PER
SHARE
ATTRIBUTABLE
TO DUKE
ENERGY
CORPORATION,
DILUTED $0.28 $- $(0.02) $0.01 $- $(0.01) $0.27
======== ======== ========== ======== ======= ====== ========
Note 1 - Amounts for special items are presented net of any related non-
controlling interest.
A - $4 million recorded in Operation, maintenance and other and $3 million
recorded in Depreciation and amortization (all Operating Expenses) on
the Consolidated Statements of Operations.
B - $19 million gain recorded within Non-regulated electric, natural gas,
and other (Operating Revenues) and $8 million loss recorded within
Fuel used in electric generation and purchased power-non-regulated
(Operating Expenses) on the Consolidated Statements of Operations.
C - Recorded in Income From Discontinued Operations, net of tax on the
Consolidated Statements of Operations.
D - Recorded in Other income and expenses, net on the Consolidated
Statements of Operations.
Weighted Average Shares (reported and adjusted) - in millions
Basic 1,282
Diluted 1,283
* Represents the mark-to-market impact of derivative contracts in the non-
native portfolio, which is recognized in earnings immediately as such
derivative contracts do not qualify for hedge accounting, used in Duke
Energy's hedging of a portion of the economic value of its generation
assets in the Commercial Power segment. The economic value of the
generation assets is subject to fluctuations in fair value due to market
price volatility of the input and output commodities (e.g. coal, power)
and, as such, the economic hedging involves both purchases and sales of
those input and output commodities related to the generation assets.
Because the operations of the generation assets are accounted for under
the accrual method, management believes that excluding the impact of
mark-to-market changes of the economic hedge contracts from adjusted
earnings until settlement better matches the financial impacts of the
hedge contract with the portion of the economic value of the underlying
hedged asset. Management believes that the presentation of adjusted
diluted EPS Attributable to Controlling Interest provides useful
information to investors, as it allows them to more accurately compare
the company's performance across periods.
SOURCE Duke Energy