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Duke Energy Reports Third Quarter 2009 Results
PR Newswire
Oct 30, 2009
CHARLOTTE, N.C., Oct. 30 /PRNewswire-FirstCall/ --
-- Third quarter 2009 adjusted diluted earnings per share (EPS) was 40
cents, compared with 33 cents for the third quarter 2008
-- Reported diluted EPS for third quarter 2009 was 8 cents, compared to 17
cents for the third quarter 2008
-- Through the third quarter, results slightly ahead of internal plan; on
track to achieve 2009 employee incentive target of $1.20, based on
adjusted diluted EPS
-- Reported results include non-cash impairment charges of approximately
$400 million
Duke Energy (NYSE: DUK) today announced third quarter 2009 adjusted diluted earnings per share of 40 cents, compared to 33 cents for third quarter 2008. Reported diluted EPS for the third quarter 2009 was 8 cents, compared to 17 cents for the same period last year.
(Logo: http://www.newscom.com/cgi-bin/prnh/20040414/DUKEENERGYLOGO )
Reported results for third quarter 2009 were impacted by non-cash impairment charges of approximately $400 million, primarily related to goodwill associated with non-regulated generation operations in the Midwest. These charges have no impact on the company's liquidity position and have been excluded from adjusted diluted EPS.
In the third quarter, the company experienced lower electricity sales as a result of the economy. During the quarter, industrial sales volumes continued to show signs of stabilization and have improved approximately 11 percent from second-quarter 2009 levels. Through the third quarter of 2009, based upon adjusted diluted EPS, the company is slightly ahead of its internal plan. As a result, the company is on track to achieve the employee incentive target of $1.20, based on adjusted diluted EPS, assuming normal weather, continued cost control and solid operational performance, as well as no deterioration in the economy for the remainder of the year.
"I'm very pleased with our results through the third quarter," said Jim Rogers, Duke Energy chairman, president and CEO. "We continue to perform well in this recessionary climate, matching cost reductions with the declines we're experiencing in usage by our industrial customers. We are maintaining our commitment to operational excellence and strong credit and liquidity. Most importantly, we haven't lost focus on building our business for the long-term, modernizing our fleet and achieving constructive regulatory recovery of our capital investments."
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:
3Q2009 3Q2008
Pre-Tax Tax EPS EPS
Amount Effect Impact Impact
(In millions, except per-share amounts)
-----------------------------------------------------------------------
Third-quarter 2009
Costs to Achieve, Cinergy Merger $(8) $3 $(0.01) -
Crescent-related guarantees and tax
adjustments $(3) - -
Mark-to-market impact of economic hedges $(3) $1 - -
Goodwill and other impairments $(413) $15 $(0.31) -
Third-quarter 2008
Costs to Achieve, Cinergy Merger $(11) $4 - $(0.01)
Mark-to-market impact of economic hedges $(119) $42 - $(0.06)
Crescent project impairments $(114) $44 - $(0.05)
Emission allowances impairment $(82) $30 - $(0.04)
Total diluted EPS impact $(0.32) $(0.16)
Reconciliation of reported to adjusted diluted EPS for the quarters:
3Q2009 3Q2008
EPS EPS
-----------------------------------------------------------------------
Diluted EPS from continuing operations, as reported $0.08 $0.17
Diluted EPS from discontinued operations, as reported - -
Diluted EPS, as reported $0.08 $0.17
Adjustments to reported EPS:
Diluted EPS impact of special items and mark-to-market in
Commercial Power $0.32 $0.16
Diluted EPS, adjusted $0.40 $0.33
BUSINESS UNIT RESULTS (ON A REPORTED BASIS)
U.S. Franchised Electric and Gas (USFE&G)
USFE&G reported third-quarter 2009 segment EBIT of $716 million, compared with $726 million in the third quarter of 2008.
Results were adversely affected by unfavorable weather throughout the service territory and a decline in weather-adjusted sales volumes to industrial customers compared to the third quarter of 2008. These lower results were mostly offset by reduced operating and maintenance costs, increased riders and Allowance for Funds Used During Construction (AFUDC) related to the company's capital expenditure program, and lower depreciation and amortization.
Commercial Power
Commercial Power reported a third-quarter 2009 segment EBIT loss from continuing operations of $234 million, compared to a loss of $108 million in the third quarter of 2008.
Results were driven lower by non-cash impairment charges primarily related to goodwill associated with non-regulated generation operations in the Midwest. This goodwill impairment charge reflects the current estimated value of these operations, which has declined principally as a result of sustained lower power prices and demand. Absent this impairment charge, results were favorable due to prior year mark-to-market losses on economic hedges and a prior-year emission allowance impairment due to the invalidation of the Clean Air Interstate Rule (CAIR).
Also, native margins were higher in the third quarter of 2009 primarily due to increased Electric Security Plan rates in the Midwest and timing of fuel and purchased power rider collections in 2008, net of lower volumes and milder weather. Additionally, the Midwest gas-fired assets recognized higher EBIT in 2009 as a result of additional capacity revenues in 2009 and a receivable writeoff in the prior year related to Lehman Brothers. Non-native margins increased principally as a result of gains on coal sales.
Duke Energy International (DEI)
DEI reported third-quarter 2009 segment EBIT from continuing operations of $100 million, compared to $77 million in the third quarter of 2008.
Positive results were driven by lower commodity costs in Peru and favorable hydrology in Central America, partially offset by lower commodity prices at National Methanol Company and unfavorable average foreign currency exchange rates.
Other
Other includes costs associated with corporate governance, costs-to-achieve the Cinergy merger, Duke Energy's captive insurance company and the results of Crescent, Duke Energy's real estate joint-venture.
Other reported a third-quarter 2009 net expense from continuing operations of $65 million, compared to $195 million in the third quarter of 2008.
The decrease in net expense for the quarter was due primarily to prior year equity losses at Crescent, including $114 million in non-cash project impairments.
INTEREST EXPENSE
Interest expense from continuing operations was $190 million for the third quarter 2009, compared to $176 million for the third quarter of 2008. The increase in interest expense for the quarter was primarily due to higher debt balances offset by lower average interest rates on floating rate debt and commercial paper balances.
INCOME TAX EXPENSE
Income tax expense from continuing operations for third quarter 2009 was $244 million, compared to $132 million for the third quarter of 2008. The effective tax rate for full-year 2009 is forecasted to be approximately 42 percent, reflecting the effect of the goodwill impairment, which is non-deductible for tax purposes. The effective tax rate excluding the impairment charge is forecasted to be approximately 35 percent.
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 income attributable to non-controlling interests. 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 adjusted 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 adjusted Other net expenses may also include any amounts that may be reported as discontinued operations or extraordinary items. Adjusted segment EBIT and adjusted 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 adjusted 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 adjusted 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 adjusted 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 the United States, based on kilowatt-hour sales. Its regulated utility operations serve approximately 4 million customers located in five states - North Carolina, South Carolina, Indiana, Ohio and Kentucky -- representing a population of approximately 11 million people. Duke Energy's commercial power and international business segments operate diverse power generation assets in North America and Latin America, including a growing portfolio of renewable energy assets in the United States. Headquartered in Charlotte, N.C., Duke Energy is a Fortune 500 company traded on the New York Stock Exchange under the symbol DUK. More information about the company is available on the Internet at: www.duke-energy.com.
An earnings conference call for analysts is scheduled for 11 a.m. ET Friday, Oct. 30. The conference call can be accessed via the investors' section (http://www.duke-energy.com/investors/) of Duke Energy's Web site or by dialing 719-325-4762 outside the United States or 877-719-9788 in the United States. The confirmation code is 7451703. Please call in 10 to 15 minutes prior to the scheduled start time. A replay of the conference call will be available until midnight ET, Nov. 9, 2009, by calling 719-457-0820 outside the United States or 888-203-1112 in the United States, and using the code 7451703. A replay and transcript also will be available by accessing the investors' section of the company's Web site.
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, customer base or customer usage patterns; 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 storms, hurricanes, droughts 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.
September 2009
QUARTERLY HIGHLIGHTS
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------- -------------
(In millions, except per-
share amounts and where
noted) 2009 2008 2009 2008
------------------------- ---- ---- ---- ----
COMMON STOCK DATA
Income from continuing
operations attributable
to Duke Energy Corporation
common shareholders
Basic $0.08 $0.17 $0.56 $0.80
Diluted $0.08 $0.17 $0.56 $0.80
Income from discontinued
operations attributable
to Duke Energy Corporation
Common shareholders
Basic $- $- $- $0.01
Diluted $- $- $- $0.01
Net income attributable to
Duke Energy Corporation
common shareholders
Basic $0.08 $0.17 $0.56 $0.81
Diluted $0.08 $0.17 $0.56 $0.81
Dividends Per Share $- $- $0.70 $0.67
Weighted-Average Shares
Outstanding
Basic 1,299 1,265 1,289 1,264
Diluted 1,300 1,267 1,290 1,266
------
INCOME
Operating Revenues $3,396 $3,508 $9,621 $10,074
====== ====== ====== =======
Total Reportable
Segment EBIT 582 695 1,993 2,446
Other EBIT (65) (195) (193) (460)
Interest Expense (190) (176) (560) (552)
Interest Income and
Other (a) 24 22 97 101
Income Tax Expense from
Continuing Operations (244) (132) (600) (521)
(Loss) Income from
Discontinued Operations,
net of tax (1) (1) - 14
--- --- --- ---
Net Income 106 213 737 1,028
Less: Net (Loss) Income
Attributable to
Noncontrolling Interests (3) (2) 8 (3)
-- -- -- --
Net Income
Attributable to Duke
Energy Corporation $109 $215 $729 $1,031
==== ==== ==== ======
--------------
CAPITALIZATION
Total Common Equity 57% 59%
Total Debt 43% 41%
---------- ------- -------
Total Debt $16,428 $14,919
Book Value Per Share $16.69 $17.00
Actual Shares Outstanding 1,303 1,265
------------------------- ----- -----
CAPITAL AND INVESTMENT
EXPENDITURES
U.S. Franchised
Electric and Gas $941 $1,015 $2,498 $2,668
Commercial Power 151 371 562 648
International Energy 29 25 68 108
Other 50 50 123 189
-- -- --- ---
Total Capital and
Investment
Expenditures $1,171 $1,461 $3,251 $3,613
====== ====== ====== ======
------------------------
EBIT BY BUSINESS SEGMENT
U.S. Franchised
Electric and Gas $716 $726 $1,773 $1,866
Commercial Power (b) (234) (108) (41) 273
International Energy 100 77 261 307
--- -- --- ---
Total Reportable
Segment EBIT 582 695 1,993 2,446
Other EBIT (65) (195) (193) (460)
Interest Expense (190) (176) (560) (552)
Interest Income and
Other (a) 24 22 97 101
-- -- -- ---
Income From Continuing
Operations Before
Income Taxes $351 $346 $1,337 $1,535
==== ==== ====== ======
(a) Other within Interest Income and Other includes foreign currency
transaction gains and losses, an adjustment to add back the
noncontrolling interest component of reportable segment and Other
EBIT and additional noncontrolling interest amounts not allocated
to the reportable segment and Other results.
(b) Includes non-cash impairment charges of approximately $413 million
in the third quarter of 2009, which consists primarily of a
goodwill impairment charge associated with the non-regulated
generation operations in the Midwest.
September 2009
QUARTERLY HIGHLIGHTS
(Unaudited)
Three Months Nine Months
Ended Ended
September 30, September 30,
------------- -------------
(In millions, except where noted) 2009 2008 2009 2008
--------------------------------- ---- ---- ---- ----
U.S. FRANCHISED ELECTRIC AND GAS
Operating Revenues $2,500 $2,698 $7,157 $7,701
Operating Expenses 1,833 2,003 5,499 5,941
Gains on Sales of Other Assets
and Other, net 8 1 21 4
Other Income and Expenses, net 41 30 94 102
-- -- -- ---
EBIT $716 $726 $1,773 $1,866
---- ---- ------ ------
Depreciation and Amortization $339 $344 $980 $1,009
Duke Energy Carolinas GWh sales 21,358 22,785 60,650 65,875
Duke Energy Midwest GWh sales 14,555 16,566 42,476 47,860
Net Proportional MW Capacity
in Operation 26,977 27,487
----------------
COMMERCIAL POWER
Operating Revenues $609 $498 $1,620 $1,429
Operating Expenses (a) 846 614 1,695 1,219
Gains on Sales of Other Assets
and Other, net 3 - 8 46
Other Income and Expenses, net - 8 26 17
-- -- -- --
EBIT $(234) $(108) $(41) $273
----- ----- ---- ----
Depreciation and Amortization $51 $43 $155 $128
Actual Plant Production, GWh 7,707 5,027 20,134 15,893
Net Proportional MW Capacity
in Operation 8,141 7,550
--------------------
INTERNATIONAL ENERGY
Operating Revenues $293 $297 $819 $920
Operating Expenses 208 250 594 716
Gains on Sales of Other Assets
and Other, net (1) - (1) 1
Other Income and Expenses, net 21 36 53 119
Expense Attributable to
Noncontrolling Interests 5 6 16 17
-- -- -- --
EBIT $100 $77 $261 $307
---- --- ---- ----
Depreciation and Amortization $22 $22 $60 $64
Sales, GWh 4,870 4,379 13,805 13,541
Proportional MW Capacity
in Operation 4,051 4,010
------
OTHER
Operating Revenues $19 $38 $97 $94
Operating Expenses 101 90 283 311
Gains on Sales of Other Assets
and Other, net 3 1 4 2
Other Income and Expenses, net 8 (149) (13) (254)
Benefit Attributable to
Noncontrolling Interests (6) (5) (2) (9)
-- -- -- --
EBIT $(65) $(195) $(193) $(460)
---- ----- ----- -----
Depreciation and Amortization $20 $23 $58 $62
(a) Includes non-cash impairment charges of approximately $413 million
in the third quarter of 2009, which consists primarily of a
goodwill impairment charge associated with the non-regulated
generation operations in the Midwest.
DUKE ENERGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In millions, except per-share amounts)
Three Months Nine Months
Ended Ended
September 30, September 30,
------------- -------------
2009 2008 2009 2008
--------------- ---- ---- ---- ----
Operating Revenues $3,396 $3,508 $9,621 $10,074
Operating Expenses 2,964 2,933 7,999 8,116
Gains on Sales of Other
Assets and Other, net 13 2 32 53
-------------- -- -- -- --
Operating Income 445 577 1,654 2,011
--------- --- --- ----- -----
Other Income and
Expenses, net 96 (55) 243 76
Interest Expense 190 176 560 552
-------- --- --- --- ---
Income From Continuing
Operations Before
Income Taxes 351 346 1,337 1,535
Income Tax Expense
from Continuing
Operations 244 132 600 521
------------- --- --- --- ---
Income From Continuing
Operations 107 214 737 1,014
(Loss) Income From
Discontinued
Operations, net
of tax (1) (1) - 14
------------- -- -- -- --
Net Income 106 213 737 1,028
---------- --- --- --- -----
Less: Net
(Loss) Income
Attributable to
Noncontrolling
Interests (3) (2) 8 (3)
--------------- -- -- -- --
Net Income Attributable
to Duke Energy
Corporation $109 $215 $729 $1,031
=============== ==== ==== ==== ======
Earnings Per Share - Basic
and Diluted
Income from continuing
operations attributable
to Duke Energy
Corporation common
shareholders
Basic $0.08 $0.17 $0.56 $0.80
Diluted $0.08 $0.17 $0.56 $0.80
Income from discontinued
operations attributable
to Duke Energy Corporation
common shareholders
Basic $- $- $- $0.01
Diluted $- $- $- $0.01
Net income attributable
to Duke Energy Corporation
common shareholders
Basic $0.08 $0.17 $0.56 $0.81
Diluted $0.08 $0.17 $0.56 $0.81
Dividends per share $- $- $0.70 $0.67
Weighted-average shares
outstanding
Basic 1,299 1,265 1,289 1,264
Diluted 1,300 1,267 1,290 1,266
DUKE ENERGY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions)
September 30, December 31,
2009 2008
---- ----
ASSETS
Current Assets $5,815 $5,273
Investments and Other Assets 10,061 10,020
Net Property, Plant and
Equipment 36,425 34,036
Regulatory Assets and Deferred
Debits 3,473 3,748
----- -----
Total Assets $55,774 $53,077
======= =======
LIABILITIES AND EQUITY
Current Liabilities $3,718 $4,345
Long-term Debt 15,406 13,250
Deferred Credits and Other
Liabilities 14,905 14,331
Equity 21,745 21,151
------ ------
Total Liabilities and Equity $55,774 $53,077
======= =======
DUKE ENERGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In millions)
Nine Months
Ended
September 30,
2009 2008
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $737 $1,028
Adjustments to reconcile net income to net cash
provided by operating activities 1,805 1,449
----- -----
Net cash provided by operating activities 2,542 2,477
----- -----
CASH FLOWS FROM INVESTING ACTIVITIES
Net cash used in investing activities (3,221) (3,484)
------ ------
CASH FLOWS FROM FINANCING ACTIVITIES
Net cash provided by financing activities 1,299 2,205
----- -----
Net increase in cash and cash equivalents 620 1,198
Cash and cash equivalents at beginning of period 986 678
--- ---
Cash and cash equivalents at end of period $1,606 $1,876
====== ======
Duke Energy Carolinas
Quarterly Highlights
Supplemental Franchised Electric Information
September 30, 2009
Quarter To Date Ended
September 30
-------------
%
2009 2008 Inc.(Dec.)
---- ---- ----------
GWH Sales
Residential 7,793 7,911 (1.5%)
General Service 7,609 7,755 (1.9%)
Industrial - Textile 986 1,237 (20.3%)
Industrial - Other 4,223 4,891 (13.7%)
----- ----- -----
Total Industrial 5,209 6,128 (15.0%)
Other Energy Sales 72 71 1.4%
Regular Resale 19 523 (96.3%)
------ ------ ----
Total Regular
Sales Billed 20,702 22,389 (7.5%)
Special Sales 1,157 1,148 0.8%
------ ------ ----
Total Electric Sales 21,859 23,537 (7.1%)
Unbilled Sales (501) (752) (33.3%)
------ ------ ----
Total Consolidated Electric
Sales - Carolinas 21,358 22,785 (6.3%)
Average Number of Customers
Residential 2,024,795 2,015,424 0.5%
General Service 331,820 334,699 (0.9%)
Industrial - Textile 645 671 (3.9%)
Industrial - Other 6,708 6,597 1.7%
----- ----- ---
Total Industrial 7,353 7,268 1.2%
Other Energy Sales 14,060 13,687 2.7%
Regular Resale 6 21 (71.4%)
-- -- -----
Total Regular Sales 2,378,034 2,371,099 0.3%
Special Sales 26 31 (16.1%)
-- -- -----
Total Avg Number of
Customers - Carolinas 2,378,060 2,371,130 0.3%
Heating and Cooling Degree Days
Actual
Heating Degree Days 12 8 54.9%
Cooling Degree Days 941 976 (3.6%)
Variance from Normal
Heating Degree Days (31.8%) (59.1%) n/a
Cooling Degree Days (3.9%) 2.4% n/a
Year To Date
September 30
------------
%
2009 2008 Inc.(Dec.)
---- ---- ----------
GWH Sales
Residential 21,312 21,139 0.8%
General Service 20,647 20,833 (0.9%)
Industrial - Textile 2,699 3,526 (23.5%)
Industrial - Other 11,703 13,898 (15.8%)
------ ------ -----
Total Industrial 14,402 17,424 (17.3%)
Other Energy Sales 215 213 0.9%
Regular Resale 193 1,341 (85.6%)
------ ------ ----
Total Regular
Sales Billed 56,769 60,950 (6.9%)
Special Sales 3,949 5,324 (25.8%)
------ ------ ----
Total Electric Sales 60,718 66,274 (8.4%)
Unbilled Sales (68) (399) (83.0%)
------ ------ ----
Total Consolidated Electric
Sales - Carolinas 60,650 65,875 (7.9%)
Average Number of Customers
Residential 2,022,876 2,009,610 0.7%
General Service 331,258 332,160 (0.3%)
Industrial - Textile 653 674 (3.1%)
Industrial - Other 6,699 6,566 2.0%
----- ----- ---
Total Industrial 7,352 7,240 1.5%
Other Energy Sales 13,928 13,641 2.1%
Regular Resale 8 21 (61.9%)
-- -- -----
Total Regular Sales 2,375,422 2,362,672 0.5%
Special Sales 28 34 (17.6%)
-- -- -----
Total Avg Number of
Customers - Carolinas 2,375,450 2,362,706 0.5%
Heating and Cooling Degree Days
Actual
Heating Degree Days 1,996 1,903 4.9%
Cooling Degree Days 1,480 1,521 (2.7%)
Variance from Normal
Heating Degree Days 3.6% (1.6%) n/a
Cooling Degree Days 1.6% 8.3% n/a
Duke Energy Midwest
Quarterly Highlights
Supplemental Franchised Electric Information
September 2009
Quarter Ended
September 30,
------------------
%
2009 2008 Inc.(Dec.)
---- ---- ---------
GWH Sales
Residential 4,437 4,834 (8.2%)
General Service 4,808 5,024 (4.3%)
Industrial 3,837 4,477 (14.3%)
Other Energy Sales 42 43 (2.3%)
------ ------ ----
Total Regular Electric
Sales Billed 13,124 14,378 (8.7%)
Special Sales 1,495 2,232 (33.0%)
------ ------ -----
Total Electric Sales
Billed - Midwest 14,619 16,610 (12.0%)
Unbilled Sales (64) (44) (45.5%)
------ ------ -----
Total Electric Sales
- Midwest 14,555 16,566 (12.1%)
Average Number of Customers
Residential 1,394,565 1,399,932 (0.4%)
General Service 184,350 184,822 (0.3%)
Industrial 5,502 5,569 (1.2%)
Other Energy 4,123 4,014 2.7%
--------- --------- ----
Total Regular Sales 1,588,540 1,594,337 (0.4%)
Special Sales 15 38 (60.5%)
-- -- -----
Total Avg Number Electric
Customers - Midwest 1,588,555 1,594,375 (0.4%)
Heating and Cooling
Degree Days*
Actual
Heating Degree Days 9 1 800.0%
Cooling Degree Days 527 753 (30.0%)
Variance from Normal
Heating Degree Days (43.8%) (93.8%) n/a
Cooling Degree Days (31.5%) 3.4% n/a
Year To Date
September 30,
------------------
%
2009 2008 Inc.(Dec.)
---- ---- ----------
GWH Sales
Residential 13,482 13,987 (3.6%)
General Service 13,562 13,941 (2.7%)
Industrial 10,651 13,057 (18.4%)
Other Energy Sales 127 130 (2.3%)
------ ------ ----
Total Regular
Electric
Sales Billed 37,822 41,115 (8.0%)
Special Sales 4,960 6,845 (27.5%)
------ ------ -----
Total Electric Sales
Billed - Midwest 42,782 47,960 (10.8%)
Unbilled Sales (306) (100) (206.0%)
------ ------ -----
Total Electric Sales
- Midwest 42,476 47,860 (11.2%)
Average Number of
Customers
Residential 1,399,683 1,404,914 (0.4%)
General Service 184,420 184,798 (0.2%)
Industrial 5,514 5,598 (1.5%)
Other Energy 4,097 3,986 2.8%
--------- --------- ----
Total Regular
Sales 1,593,714 1,599,296 (0.3%)
Special Sales 18 38 (52.6%)
-- -- -----
Total Avg Number
Electric Customers -
Midwest 1,593,732 1,599,334 (0.4%)
Heating and Cooling
Degree Days*
Actual
Heating Degree Days 2,377 2,528 (6.0%)
Cooling Degree Days 890 1,043 (14.7%)
Variance from Normal
Heating Degree Days 3.2% 8.4% n/a
Cooling Degree Days (18.3%) 2.2% 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
September 2008 Quarter-to-Date
(Dollars in millions, except per-share amounts)
Special Items (Note 1)
-----------------------
Costs Crescent Emission Economic
to Pro- Allow- Hedges Discon-
Achieve, ject ances (Mark- tinued Total
Adjusted Cinergy Impair- Impair- to- Oper- Adjust- Reported
Earnings Merger ments ment Market)* ations ments Earnings
-------- ------- ------ ---- -------- ------ ----- --------
----------------
SEGMENT EARNINGS
BEFORE INTEREST
AND TAXES FROM
CONTINUING
OPERATIONS
----------------
U.S.
Franchised
Electric and
Gas $726 $- $- $- $- $- $- $726
Commercial
Power 93 - - (82)E (119)B - (201) (108)
International
Energy 77 - - - - - - 77
-------- ------- ------ ---- -------- ------ ----- --------
Total
reportable
segment
EBIT 896 - - (82) (119) - (201) 695
Other (70) (11)A (114)D - - - (125) (195)
-------- ------- ------ ---- -------- ------ ----- --------
Total
reportable
segment EBIT
and other
EBIT $826 $(11) $(114) $(82) $(119) $- $(326) $500
Interest
Expense (176) - - - - - - (176)
Interest
Income and
Other 22 - - - - - - 22
Income Taxes
from
Continuing
Operations (252) 4 44 30 42 - 120 (132)
Discontinued
Operations,
net of taxes - - - - - (1)C (1) (1)
Less: Net
Income
Attributable
to
Noncontrolling
Interests (2) - - - - - - (2)
-------- ------- ------ ---- -------- ------ ----- -------
Net Income
(Loss)
Attributable
to Duke Energy
Corporation $422 $(7) $(70) $(52) $(77) $(1) $(207) $215
======== ======= ====== ==== ======== ====== ====== =======
---------------
EPS
ATTRIBUTABLE
TO DUKE ENERGY
CORPORATION,
BASIC $0.34 $(0.01) $(0.06) $(0.04) $(0.06) $- $(0.17) $0.17
======== ======= ====== ==== ======== ====== ====== =======
EPS
ATTRIBUTABLE
TO DUKE ENERGY
CORPORATION,
DILUTED $0.33 $(0.01) $(0.05) $(0.04) $(0.06) $- $(0.16) $0.17
======== ======= ====== ==== ======== ====== ====== =======
---------------
Note 1 - Amounts for special items are presented net of any related
noncontrolling interest.
A - $5 million recorded in Operation, maintenance and other and $6 million
recorded in Depreciation and amortization (all Operating Expenses) on
the Consolidated Statements of Operations.
B - $45 million loss recorded within Non-regulated electric, natural gas,
and other (Operating Revenues) and $74 million loss recorded within
Fuel used in electric generation and purchased power (Operating
Expenses) on the Consolidated Statements of Operations.
C - Recorded in (Loss) Income From Discontinued Operations, net of tax on
the Consolidated Statements of Operations.
D - Recorded in Equity in earnings (loss) of unconsolidated affiliates on
the Consolidated Statements of Operations.
E - Recorded in Goodwill and other impairment charges within Operating
Expenses on the Consolidated Statements of Operations.
Weighted Average Shares (reported and adjusted) - in millions
Basic 1,265
Diluted 1,267
* 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 Duke Energy
Corporation 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
September 2008 Year-to-Date
(Dollars in millions, except per-share amounts)
Special Items (Note 1)
-----------------------
Costs Crescent Emission Economic
to Pro- Allow- Hedges Discon-
Achieve, ject ances (Mark- tinued Total
Adjusted Cinergy Impair- Impair- to- Oper- Adjust- Reported
Earnings Merger ments ment Market)* ations ments Earnings
-------- ------- ------ ----- -------- ------ ----- --------
----------------
SEGMENT EARNINGS
BEFORE INTEREST
AND TAXES FROM
CONTINUING
OPERATIONS
----------------
U.S.
Franchised
Electric and
Gas $1,866 $- $- $- $- $- $- $1,866
Commercial
Power 320 - - (82)E 35 B - (47) 273
International
Energy 307 - - - - - - 307
-------- ------- ------ ----- -------- ------ ----- --------
Total
reportable
segment
EBIT 2,493 - - (82) 35 - (47) 2,446
Other (212) (34)A (214)D - - - (248) (460)
-------- ------- ------ ----- -------- ------ ----- --------
Total
reportable
segment and
other
EBIT $2,281 $(34) $(214) $(82) $35 $- $(295) $1,986
Interest
Expense (552) - - - - - - (552)
Interest
Income and
Other 101 - - - - - - 101
Income Taxes
from
Continuing
Operations (634) 13 83 30 (13) - 113 (521)
Discontinued
Operations,
net of taxes - - - - - 14 C 14 14
Less: Net
Income
Attributable
to
Noncontrolling
Interests (3) - - - - - - (3)
-------- ------- ------ ----- -------- ------ ----- --------
Net Income
(Loss)
Attributable
to Duke Energy
Corporation $1,199 $(21) $(131) $(52) $22 $14 $(168) $1,031
======== ======= ====== ===== ======== ====== ====== ========
---------------
EPS
ATTRIBUTABLE
TO DUKE ENERGY
CORPORATION,
BASIC $0.95 $(0.02) $(0.10) $(0.04) $0.01 $0.01 $(0.14) $0.81
======== ======= ====== ===== ======== ====== ====== ========
EPS
ATTRIBUTABLE
TO DUKE ENERGY
CORPORATION,
DILUTED $0.95 $(0.02) $(0.10) $(0.04) $0.01 $0.01 $(0.14) $0.81
======== ======= ====== ===== ======== ====== ====== ========
---------------
Note 1 - Amounts for special items are presented net of any related
noncontrolling interest.
A - $17 million recorded in Operation, maintenance and other and $17
million recorded in Depreciation and amortization (all Operating
Expenses) on the Consolidated Statements of Operations.
B - $38 million loss recorded within Non-regulated electric, natural gas,
and other (Operating Revenues) and $73 million gain recorded within
Fuel used in electric generation and purchased power (Operating
Expenses) on the Consolidated Statements of Operations.
C - Recorded in (Loss) Income From Discontinued Operations, net of tax on
the Consolidated Statements of Operations.
D - Recorded in Equity in earnings (loss) of unconsolidated affiliates on
the Consolidated Statements of Operations.
E- Recorded in Goodwill and other impairment charges within Operating
Expenses on the Consolidated Statements of Operations.
Weighted Average Shares (reported and adjusted) - in millions
Basic 1,264
Diluted 1,266
* 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 Duke Energy
Corporation 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
September 2009 Quarter-to-Date
(Dollars in millions, except per-share amounts)
Special Items (Note 1)
-----------------------
Crescent
Related
Guaran- Good-
Costs tees will Economic
to and and Hedges Discon-
Achieve, Tax Other (Mark- tinued Total
Adjusted Cinergy Adjust- Impair- to- Oper- Adjust- Reported
Earnings Merger ments ments Market)* ations ments Earnings
-------- ------- ------ ----- -------- ------ ----- --------
----------------
SEGMENT EARNINGS
BEFORE INTEREST
AND TAXES FROM
CONTINUING
OPERATIONS
----------------
U.S. Franchised
Electric and Gas $716 $- $- $- $- $- $- $716
Commercial Power 182 - - (413) D (3)B - (416) (234)
International
Energy 100 - - - - - - 100
-------- ------- ------ ----- -------- ------ ----- --------
Total
reportable
segment EBIT 998 - - (413) (3) - (416) 582
Other (57) (8)A - D - - - (8) (65)
-------- ------- ------ ----- -------- ------ ----- --------
Total
reportable
segment and
Other EBIT $941 $(8) $- $(413) $(3) $- $(424) $517
Interest
Expense (190) - - - - - - (190)
Interest
Income and
Other 24 - - - - - - 24
Income Taxes from
Continuing
Operations (260) 3 (3) 15 1 - 16 (244)
Discontinued
Operations, net
of taxes - - - - - (1) C (1) (1)
Less: Net Loss
Attributable to
Non-
controlling
Interests (3) - - - - - - (3)
-------- ------- ------ ----- -------- ------ ----- --------
Net Income (Loss)
Attributable to
Duke Energy
Corporation $518 $(5) $(3) $(398) $(2) $(1) $(409) $109
======== ======= ====== ===== ======== ====== ====== ========
-------------------
EPS ATTRIBUTABLE TO
DUKE ENERGY
CORPORATION,
BASIC $0.40 $(0.01) $- $(0.31) $- $- $(0.32) $0.08
======== ======= ====== ===== ======== ====== ====== ========
EPS ATTRIBUTABLE TO
DUKE ENERGY
CORPORATION,
DILUTED $0.40 $(0.01) $- $(0.31) $- $- $(0.32) $0.08
======== ======= ====== ===== ======== ====== ====== ========
-------------------
Note 1 - Amounts for special items are presented net of any related
noncontrolling interest.
A - $2 million recorded in Operation, maintenance and other and $6 million
recorded in Depreciation and amortization (all Operating Expenses) on
the Consolidated Statements of Operations.
B - $6 million gain recorded within Non-regulated electric, natural gas,
and other (Operating Revenues) and $9 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 (Loss) Income From Discontinued Operations, net of tax on
the Consolidated Statements of Operations.
D - Recorded in Goodwill and other impairment charges within Operating
Expenses on the Consolidated Statements of Operations.
Weighted Average Shares (reported and adjusted) - in millions
Basic 1,299
Diluted 1,300
* 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 Duke Energy Corporation 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
September 2009 Year-to-Date
(Dollars in millions, except per-share amounts)
Special Items (Note 1)
---------------------------------
Crescent
Related
Guaran- Inter- Good-
Costs tees national will Economic
to and Trans- and Hedges
Achieve, Tax mission Other (Mark- Total
Adjusted Cinergy Adjust- Adjust- Impair- to- Adjust- Reported
Earnings Merger ments ment ments Market)* ments Earnings
-------- ------- ------ ---- ----- ------ ----- --------
----------------
SEGMENT EARNINGS
BEFORE INTEREST
AND TAXES FROM
CONTINUING
OPERATIONS
----------------
U.S.
Franchised
Electric and
Gas $1,773 $- $- $- $- $- $- $1,773
Commercial
Power 400 - - - (413)E (28)B (441) (41)
International
Energy 287 - - (26)D - - (26) 261
------ ------ ------ ------ ------ ------ ------ -----
Total
reportable
segment
EBIT 2,460 - - (26) (413) (28) (467) 1,993
Other (144) (23)A (26)C - - - (49) (193)
------ ------ ------ ------ ------ ------ ------ -----
Total
reportable
segment and
Other
EBIT $2,316 $(23) $(26) $(26) $(413) $(28) $(516) $1,800
Interest
Expense (554) - - (6) - - (6) (560)
Interest
Income and
Other 97 - - - - - - 97
Income Taxes
from
Continuing
Operations (641) 9 (3) 10 15 10 41 (600)
Less: Net
Income
Attributable
to Non-
controlling
Interests 8 - - - - - - 8
------ ------ ------ ------ ------ ------ ------ -----
Net Income
(Loss)
Attributable
to Duke Energy
Corporation $1,210 $(14) $(29) $(22) $(398) $(18) $(481) $729
====== ====== ====== ====== ====== ====== ====== =====
---------------
EPS
ATTRIBUTABLE
TO DUKE ENERGY
CORPORATION,
BASIC $0.94 $(0.01) $(0.02) $(0.02) $(0.31) $(0.02) $(0.38) $0.56
====== ====== ====== ====== ====== ====== ====== =====
EPS
ATTRIBUTABLE
TO DUKE ENERGY
CORPORATION,
DILUTED $0.94 $(0.01) $(0.02) $(0.02) $(0.31) $(0.02) $(0.38) $0.56
====== ====== ====== ====== ====== ====== ====== =====
---------------
Note 1 - Amounts for special items are presented net of any related
noncontrolling interest.
A - $9 million recorded in Operation, maintenance and other and $14
million recorded in Depreciation and amortization (all Operating
Expenses) on the Consolidated Statements of Operations.
B - $5 million gain recorded within Non-regulated electric, natural gas,
and other (Operating Revenues) and $33 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 Other income and expenses, net on the Consolidated
Statements of Operations.
D - $30 million recorded in Operation, maintenance and other, $2 million
recorded as a reduction to fuel used in electric generation and
purchased power - non-regulated, and $2 million as a reduction to Net
income (loss) attributable to noncontrolling interests on the
Consolidated Statements of Operations.
E - Recorded in Goodwill and other impairment charges within Operating
Expenses on the Consolidated Statements of Operations.
Weighted Average Shares (reported and adjusted) - in millions
Basic 1,289
Diluted 1,290
* 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 Duke Energy Corporation provides useful information to
investors, as it allows them to more accurately compare the company's
performance across periods.
MEDIA CONTACT: Tom Shiel
Phone: 704-382-2355
24-Hour: 800-559-3853
ANALYST CONTACT: Bill Currens
Phone: 704-382-1603
SOURCE Duke Energy
Copyright (2009) PR Newswire. All Rights Reserved.
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