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Alternate Symbol(s): DUK.PR.A

Duke Energy Corporation is an energy holding company. The Company operates through two segments: Electric Utilities and Infrastructure (EU&I) and Gas Utilities and Infrastructure (GU&I). The EU&I segment conducts operations primarily through the regulated public utilities of Duke Energy Carolinas, Duke Energy Progress, Duke Energy Florida, Duke Energy Indiana, and Duke Energy Ohio. EU&I... see more

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Duke Energy Corp > Duke Energy announces first post-merger quarterly

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Post by bc4u on Nov 08, 2012 9:11am

Duke Energy announces first post-merger quarterly

Duke Energy announces first post-merger quarterly earnings

• Third quarter 2012 adjusted diluted earnings per share (EPS) were $1.47, compared with $1.50 for the third quarter 2011
• Reported diluted EPS for third quarter 2012 was $0.85, compared to $1.06 for the third quarter 2011
• Company is on pace to achieve its 2012 adjusted diluted earnings guidance range of $4.20 to $4.35 per share

CHARLOTTE, N.C. – Duke Energy today announced third quarter earnings that for the first time reflect its merger with Progress Energy.
Third quarter 2012 adjusted diluted EPS was $1.47, compared to $1.50 for the third quarter of 2011. Reported diluted EPS for the third quarter 2012 was $0.85, compared to $1.06 for the same period last year. Last year’s quarterly results have been adjusted to reflect the one-for-three stock split that occurred just prior to the merger closing on July 2, 2012.
Reported results include special items that are excluded from the company’s adjusted diluted EPS results. Special items for the third quarter 2012 primarily include $0.42 per share in charges related to the merger’s closing, and $0.17 per share in impairment charges related to the company’s Edwardsport, Ind., Integrated Gasification Combined Cycle (IGCC) project. Special items for the third quarter 2011 primarily included $0.30 per share of impairment charges related to Edwardsport as well as $0.12 per share of emission allowance impairment charges.
On an adjusted earnings basis, Duke Energy continued to see strength in its regulated businesses in the third quarter of 2012. Revised customer rates, principally resulting from the company’s modernization program, helped offset less favorable weather and the expected reduced earnings from International Energy and Commercial Power.
International Energy was affected by unfavorable average foreign exchange rates, while Commercial Power’s reduced earnings were principally due to the new market-based Electric Security Plan (ESP) in Ohio.
The earnings contribution from the inclusion of Progress Energy’s regulated utility operations in the Carolinas and Florida was substantially offset by dilution related to the issuance of additional shares in connection with the merger.
“Our strong quarterly performance keeps us on track to achieve our targeted 2012 adjusted diluted EPS guidance range of $4.20 to $4.35,” said Jim Rogers, chairman, president and CEO.
“We recently celebrated the first 100 days as the ‘new’ Duke Energy and are coming together as one stronger, more efficient organization,” he added. “Our employees are focused on delivering on our merger commitments to customers, regulators and shareholders. We’re off to a great start.”

BUSINESS UNIT RESULTS
The discussion below of third-quarter results includes adjusted segment income, which is a non-GAAP financial measure. The tables on pages 23 through 26 present a reconciliation of reported results to adjusted results.
U.S. Franchised Electric and Gas (USFE&G)
USFE&G recognized third-quarter 2012 adjusted segment income of $907 million, compared to $472 million in the third quarter 2011, an increase of $0.62 per share.
USFE&G’s increased quarterly results were primarily driven by the addition of Progress Energy’s regulated utility operations in the Carolinas and Florida (+$0.55 per share). Additionally, quarterly results were higher due to increased pricing and riders (+$0.12 per share) principally related to the implementation of revised customer rates at Duke Energy Carolinas, energy efficiency programs, and lower governance and operating and maintenance costs (+$0.01 per share).
These results were partially offset by less favorable weather (-$0.06 per share).
International Energy
International Energy recognized third-quarter 2012 adjusted segment income of $103 million, compared to $115 million in the third quarter 2011, a decrease of $0.02 per share.
International Energy’s quarterly results decreased primarily due to unfavorable average foreign currency exchange rates (-$0.01 per share).
Commercial Power
Commercial Power recognized third-quarter 2012 adjusted segment income of $31 million, compared to $74 million in the third quarter 2011, a decrease of $0.06 per share.
Commercial Power’s quarterly results decreased primarily due to lower results for the Midwest coal generation fleet (-$0.06 per share) resulting from the new market-based ESP in Ohio, partially offset by the ESP’s non-bypassable stability charge. The new market-based ESP became effective Jan. 1, 2012.
Other
On an adjusted basis, Other primarily includes corporate interest expense not allocated to the business units, results from Duke Energy’s captive insurance company, other investments, and income tax levelization adjustments.
Other recognized a third-quarter 2012 adjusted net expense of $16 million, compared to income of $5 million in the third quarter 2011, a decrease of $0.03 per share. Other’s results decreased primarily due to the addition of interest expense on Progress Energy’s corporate debt (-$0.05 per share).
Share Dilution
On July 2, 2012, Duke Energy issued approximately 258 million shares of common stock in connection with the closing of the merger with Progress Energy, Inc. The issuance of these additional shares had a dilutive impact of $0.54 per share on the quarter-over-quarter adjusted diluted EPS results.
Reconciliation of quarterly reported to adjusted diluted EPS
Mark-to-market impacts of economic hedges in the Commercial Power segment and special items excluded from Duke Energy’s adjusted diluted EPS for the quarters include: